Counterparties

By Felix Salmon
April 19, 2010
Pimco

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Wherein Pimco wheels out a robot named “Neel Kashkari” which unfortunately fails the Turing Test — Pimco

Wherein the first Edible Los Angeles blog entry in 6 months announces it’s for sale — ELA

DeLong nails “the crux of the SEC’s Goldman Sachs case” – conceptually, if not legally — DeLong

The SEC inspector general’s report on the Stanford affair is devastating. Funny how it came out the same day as the Goldman filing — SEC

Krugman and Avent on financial reform — NYT, Economist

Someone please tell the WSJ that if they replace “bonds” with “IOUs”, that doesn’t make the story any easier to read — WSJ

Quite easy and very tasty ramp soup — Epicurious

YouGov show Liberal Democrats ahead! CON 32%(-1), LAB 26%(-3), LDEM 33%(+4) — UK Polling Report

Genius: the train that never stops at a station — YouTube

So, God can send a sunstorm to destroy my money. What do you want me to do about it? — SSRN

America‚Äôs Costliest Tax Break — Yglesias

Sonoma County CA separates elderly gay couple. Shockingly intolerant story devoid of compassion — Bilerico

5 comments

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HEy Felix, is there a synopsis of the Stanford judgment coming out with the juicy condemnations? I don’t have time at work to wade through the whole thing.

==Bob

Posted by REDruin | Report as abusive

Bob,

I swear, just read the table of contents…. it lays out a perfect synopsis.

Posted by ContrarianP | Report as abusive

great first line

Posted by randolfduke | Report as abusive

Thanks for the pointer to DeLong. He writes: “Perhaps the active exchange [is] itself the motive for other bad actions [I think this means: "other actions, which actions are bad"; it would be premature to label the exchange itself "bad"] outside the narrowly economic sphere (when the existence of British demand for tobacco, sugar, and cotton triggers the growth of plantations in and around the Caribbean and makes it worth people’s while to wage war in Africa to steal slaves, then that market for cotton, sugar and tobacco is a bad thing, even though both the sellers and the buyers of cotton, sugar and tobacco like it).”

This is misguided. It was not any particular exchange that provided the motive for enslavement: it was the fact that *people in general valued things that could be most cheaply produced by using slaves*. No exchange gave rise to slavery: it was, rather, the obvious *potential for future exchanges*.

And while the fact that T, S, and C were valuable was a factor in giving rise to slavery, and slavery is bad, it does not follow that the value of these commodities was bad. Their value was hardly the sole causal factor; maybe a negative evaluation should be put only on some of the other factors, such as the unrestrained greed of the slaver-traders and slave-owners and slave-drivers (and some of the bystanders), with *the value of T, S, and C* getting a neutral or even a positive evaluation.

By DeLong’s reasoning, the fact that automobiles are valuable is a bad thing, since it provides a motivation for auto theft; the fact that artworks are valuable is a bad thing, since it provides a motivation for art theft; etc. The fact that some people are physically attractive is bad, since it provides a motivation (one motivation, at least) for rape; the fact that people like to have a good opinion of themselves is bad, since it provides a motivation for flattery; etc. None of this is cogent, nor has it any bearing on the value of exchange.

(I wouldn’t try to post this on DeLong’s site; he’s notorious for deleting critical comments.)

Posted by Philon | Report as abusive