Lunchtime Links 2-10

February 10, 2010

How a new jobless era will transform America (Peck, Atlantic)

Bernanke testimony (Fed) Key line: “Also, before long, we expect to consider a modest increase in the spread between the discount rate and the target federal funds rate.” That’s not the same as raising the Fed Funds rate or the rate paid on excess reserves, but it’s the first time Bernanke has indicated policy may be tightened. Also, the balance sheet will be allowed to shrink on its own as mortgagees prepay.

For $110, godless will adopt pets of blessed after Judgment Day (DiPaolo, Bloomberg) Great story. And a great way to clear $10 grand! One of many money quotes: “With the economic downturn we’re in, I’m trying to figure out how to cash in on this hysteria to supplement my income … Given the intellectual capacity of believers this could be a gold mine!”

Chinese military officers urge economic punch at U.S. (Buckley, Reuters) Their economic nuclear option….

Eurozone holds intensive talks about Greek rescue (Sobolewski/Maltezou, Reuters) Some combination of #1 and #2 is indeed the way Europe and Greece appear to be attacking this problem. Here is an update of sovereign CDS:

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How Brussels is trying to prevent a collapse of the Euro (Der Spiegel)

Google tweaks Gmail to challenge Facebook, Twitter (Oreskovic, Reuters) Should Zuckerberg fear Larry Page and Sergey Brin? Or will Buzz impact Facebook as weakly as Docs impacted Microsoft Office?

Mervyn King leaves his options open (Brereton/Hannon, WSJ) The head of the Bank of England won’t rule out more money printing to buy assets (“quantitative easing”). Not that this shouldn’t be expected.

Blast off (imgur)

Slow motion lightning….more here

One comment

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The Peck article in the Atlantic on the unemployment situation that you recommend is a very good, read but it ends with two questionable statements:

“…solutions (to high unemployment) …must include…ensuring that we are creating the kinds of jobs…that can allow for a more broadly shared prosperity in the future.”

Who is the “we” and how are jobs of a certain type created? Isn’t employment the result of employers providing a service or product that is wanted and for the lowest possible production cost? Doesn’t unemployment in itself drive down labor cost? The author implies government stepping in, further reinforced by this…

“Concerns over deficits are understandable…but our bias should be toward doing too much rather than too little. That implies some small risk to the government’s ability to borrow in the future…”

Rolfe, I think all that you have been saying indicates such risk is far from small. It worries me, as I think it does you, that the bottomless government borrowing we are seeing appears to have no immediate consequences. It makes me think that a very unpleasant surprise may be coming, just as a rubber band remains intact as it is stretched, until it snaps. I think there is more faith that government can exert control over the economy in this article than is warranted.

Posted by Chicagoboy | Report as abusive