Evening Links 12-10

December 11, 2009

Loopholes lurk in bank bill (Paletta/Enrich, WSJ) Companies with connections get to buy exemptions…

Treasury yield curve widens to most since 1992 (Walker, Bloomberg)

Dems want to raise debt ceiling a whopping $1.8 trillion (Rogers, Politico) So they don’t have to revisit the issue before the 2010 midterm elections…

The job market: Is a college degree worth less? (Oloffson, Time) Yes! The net present value of a B.A. has been declining for years. Look for the trend to continue as tuitions increase even as unemployment stays high and wages fall. Don’t go into debt to buy that fancy degree from a private school kids. A good state school is a much better deal right now. Save your money for an advanced degree…

Wells writing off principal on option ARMs (Cambell, Bloomberg) This is the proper way to modify mortgages if you’re hoping to keep people paying. My question is whether Wells has to write down the loan on its balance sheet and take a hit to capital. My impression was that they already took huge writedowns on Wachovia’s book of option ARM loans when they acquired it. So would guess principal forgiveness is not leading to asset writedowns.

AT&T to charge for heavy data usage on iPhones (Svennson, AP)

Shooting in Times Square, perp had Mac-10 (CityRoom) A couple hundred yards up the street from Reuters’ office….

Google goggles (Youtube) Pretty cool. Wonder if it really works.

22 million horsepower (YouTube) Flame exits the rocket at Mach 3. Temp is 4500 Fahrenheit, 2/3rds as hot as the sun. At that temp, they say, steel boils.


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One thing I have to disagree with you on Rolfe is that the US will be as lucky as Japan, the deflationary spiral in the US will be truly epic and devestating, why? Simple really

1) Japan had a large savings buffer, anywhere from 14% to 18%, a stash for a rainy day that the US simply does not have. When it rained in Japan they could use their own umbrella, when it’s raining in the US, they have to ask the Chinese for an umbrella.

2) Japan had a strong global economy to export into, the US is a net importer. Alas the US will not be able to export anything anywhere as there are far too many factories making shoes, clothes, electronics and all sorts of widgets and gadgets around the world. The boom created years of overcapacity if not decades. So the US will fail in that regard.

Eventually the US will go down the way of the Soviets, all centrally planned economies fail eventually as is well known, this is because of falling marginal returns and rising marginal costs due to the misappropriation of capital.

America now has a plethora of Czars and God like Treasury Secretaries and maniacal central planners like Ben Bernanke who seem quite happy blowing large sums of money on hapless projects such as guaranteeing banker bonuses.

So no long, slow depression for America. They’ll be the best at it in the world I say, beat the old Soviets at their own collapse game I say!

Posted by VK | Report as abusive

“Don’t go into debt to buy that fancy degree from a private school kids. …. Save your money for an advanced degree…”: and so the educational Arms Race continues. Or should that be Harm Race?

Posted by dearieme | Report as abusive

don’t spend your money for a fancy private school advanced degree either. Fancy private school MBA here locally? $80-100k (total cost, not per year). State school? $25-60k, depending on which program and which state school.

Posted by Andrew | Report as abusive

USAA, GE get the exemptions. as always, the companies with the best/biggest lobbyists get the spoils of regulation. SUCK IT, small business competitors!

“The [exemption] doesn’t mention USAA by name. It refers to any industrial bank—a financial institution regulated by states—owned by a savings-and-loan holding company that ‘predominantly provides financial products and services to current and former members of the military and their families.’ USAA Savings Bank, chartered in Nevada, appears to be the only company meeting that description.”


“A spokesman for USAA didn’t return calls seeking comment. A Treasury spokesman declined to comment on the amendments and the exemptions.”

“Lawmakers wouldn’t identify the lawmaker who requested the exemption.”

of course not. what do you think government is, transparent?

Referring to USAA, House Financial Services Committee Chairman Barney Frank (D., Mass.) said, “There’s no remote prospect of them being a problem.”

just like Fannie and Freddie.

Posted by million | Report as abusive