Let’s hear from two fellows who are unabashed capitalists and acolytes of Adam Smith… just like Warren Buffett and Bill Gates (and me!)… starting with one of the world’s top/respected pundits on technology industry, Mark Anderson, CEO of the Strategic News Service:

“For me, there is no more poignant example of the Bush 9.11 era, and the need to get beyond it now. Like two slides, I picture, first: an army of soldiers surrounding bin Laden in the mountains of Tora Bora, and then being ordered by Team Bush to wait until the locals can get there and participate, at which point the enemy has escaped.

“I compare that slide to the story of this year: after a year in secret investigation and preparation, Team Obama finds a likely target compound in Pakistan, orders in Seal Team Six via stealth choppers, uses overwhelming force, and shoots to kill. DNA samples are taken to confirm ID, and the body is dumped ignominiously in the ocean, with no propaganda pics for the enemy, and no burial process or site to rally round.” What a difference.  And yet, which man is called a “wimp”?”

(I will soon put up an essay appraising the different ways that democrats and republicans use military might and wage war.  You’ll be astonished by how stark it is, like night and day. Almost like two different species.)

Read the complete post at Contrary Brin

25 November 2011 23:16

Mark Anderson:

Tim, how do you see Britain’s economic future?

26 November 2011 14:09:

Tim Coldwell:

Northern Rock sale raised £750m, “enough to finance the UK state spending machine for about 9 hours”

In a nutshell, the old French jibe that Britain is a nation of shopkeepers comes to mind. At last someone (Andy Haldane of B of E) has published a good paper to refute the bankers’ claim that the city is so important to the UK economy.

Hot topic this last week:

There is much talk of doing something about excessive executive pay. The government are “consulting”. I’ve yet to hear anyone suggest that outside directors who are involved in corporate remuneration committees should be both elected and paid solely and directly by shareholders (aka owners) rather than the corporation. FTSE 100 senior execs getting a 49% pay rise (aided and abetted by pay consultants) when the general population suffers falling real incomes is not smart.

Economic future

The UK’s economic future looks grim. If the usual technique of attracting inward investment (gateway to Europe concept like Ireland) with low corporate tax rates is used I suspect an EU backlash may result. Pushing down the £ FX rate a few years ago did not go unnoticed. And, if the Euro survives it’s hard to see it holding its current strength if, as most expect, printing a lot of new money will be needed to bail out weak EZ countries which assuming little is sanitized QE will restart UK QE to continue the “currency wars”.

2 years ago I told Jon Moulton when he was indicating support for the latest government plan to cut public expenditure to increase private investment etc., that I couldn’t see sufficient aggregate demand anywhere to support this plan.

Lo and behold, government borrowing is now forecast to be less than 1% different than would have been Labour’s plan. Growth is going to be flat for years at close to zero.

Meanwhile articles such as this cause much head scratching amongst the talking heads.

A little data that makes me smile:

England is twice as crowded as Germany, three and a half times France and has more people per square km than India.

Sorry this is short and rambling but there is not a lot, good or bad, to report

Tim

26 November 2011 14:28:

The euro zone

Is this really the end?

Unless Germany and the ECB move quickly, the single currency’s collapse is looming”

www.economist.com/node/21540255

Tim

26 November 2011 14:35

And:

How to stop the bogus bonus

Successful oversight is going to require more transparency about what trades are being made. But transparency is a scarce commodity

“It used to be so easy to “earn” a performance bonus in financial services. Step one: agree a contract whereby you are paid if you exceed a modest benchmark with the funds you are managing. Step two: borrow money and invest it in risky assets. Step three: profit! Step three does not follow automatically, of course, if the risky asset does not pay off. But from the point of view of the fund manager and his bonus, itā€™s a case of ā€ heads I win, tails the investor loses.

http://timharford.com/2011/11/how-to-stop-the-bogus-bonus/

26 November 2011 14:56

And a very good review of the current status, focussed mainly on Europe (UK is a side issue) from [John Mauldin, writing at Barry's "The Big Picture"].

Changing the Rules
When Even Germany Fails
European Inverted Yield Curves
Time to Review the Bang!Moment
The Risk of Contagion in the US
Time to Start Watching China
New York, China, and Some Links

27 November 2011 12:29:

Treasury subsidises small-business loans

Global Economy

What’s the matter with Spain?

What’s the matter with Italy?

Is the euro about to capsize?

How might Greece leave the euro?

Too-clever banking may have played a role in getting us into the economic and financial mess we’re in.

But the Treasury hopes that a bit of financial engineering of its own will help to get us out.

The Chancellor, George Osborne, is aiming to use limited quantities of taxpayers’ money to unlock private-sector cash and to stimulate activity by private-sector businesses, at a time when those businesses are scaling back investment and expansion ambitions.

The most eye-catching initiative, which goes by the name of credit easing, could reduce the interests costs on £20bn of loans for small and medium size businesses by around 1% over the next couple of years.

Then there’s a separate proposal to subsidise to the tune of £1bn the creation of new private sector funds that would lend to all but the very biggest businesses – in competition with the banks that currently dominate business lending.

Finally, the Treasury will be giving technical assistance to pension funds, to unlock around £20bn of British pension savers’ cash for investment in roads, rail, and other infrastructure projects – to get British pension funds providing capital to improve infrastructure in the way that Canadian and Australian pension funds already do.

http://www.bbc.co.uk/news/business-15908514

Pushing on a string?

Tim

27 November 2011 13:08:

ECB couldn’t inflate even if it wanted to: Warren Mosler http://t.co/0J7zWyKA

If true, is this good or bad news for UK (and US)? It seems to imply that ECB could print (without sterilisation), not weaken the Euro and EZ could take over from US as the the world’s consumer of last resort.

Somehow I doubt it The newly printed Euros would eventually get sold for $s, Yuan etc. to pay for increasing imports while EZ exports slump. Then the fake status of a kind of “reserve currency” would become obvious to investors in Euro denominated debt …. etc.

Or can everyone play the Japanese game now …. until no-one can?

Tim

27 November 2011 13:34:

Germany and the Eurozone: Clutching disaster from the jaws of victory?

John Muellbauer
25 November 2011

For months economists have been arguing that Germany holds the key to ending the Eurozone crisis. Should it relax its anti-inflation stance and allow the ECB to inflate away sovereign debt? Or should it write a cheque of its own to the EFSF? Neither, says this column. There is a simple solution, if only Eurozone leaders can see it. Eurobonds are the answer – but wiith conditions.

http://www.voxeu.org/index.php?q=node/7332

Mark,

This might be close to the real plan. But does it address demand? Not directly, but a halt to the EZ crisis might help sentiment, bearing in mind that the EU is the world’s largest economic zone. Therefore this would be good for UK (and US).

Tim

27 November 2011 13:44:

Reviving manufacturing
No land of giants
A lack of big companies hampers efforts to boost manufacturing

Nov 26th 2011 | from the print edition

Its effect on the economy is even mightier

THREE decades ago a Conservative government led by Margaret Thatcher removed many of the props that had supported manufacturing, revealing its weakness and causing factories to collapse. Now manufacturing is modish. The business secretary, Vince Cable, talks of polishing the image of an industry associated with dirt and decline, and of rebalancing the economy away from financial services toward more tangible stuff. On November 17th David Cameron attended the launch of a new engineering prize and opened a factory in Surrey that will make 4,000 expensive supercars a year.

In the early 1980s about 6m people worked in manufacturing; today the figure is barely 2.5m. Once-famous firms such as British Leyland, GEC and ICI have fallen apart or been taken over and dismembered. Stronger growth in other sectors means manufacturing has slumped from 25% of the economy to 11% today. Yet manufacturing output was rising before recession hit in 2008. Foreign firms like Nissan, Honda and Toyota opened car factories that became efficiency leaders in Europe, taking British car production back up to 1.5m vehicles a year. Some four-fifths of the output of such factories is exported.

www.economist.com/node/21540267

See also: www.wisegeek.com/what-are-the-top-manufacturing-countries.htm

China was once before the world’s leading manufacturer — way back in 1830, the country was responsible for 30% of the global industrial output.

Tim

27 November 2011 14:00:

Juergen Stark explains ECB opposition to monetisation is not about inflation

Conclusion: central bankers always prefer to force elected officials to make the tough political choices that are the essence of fiscal policy. The fiscal agent adds and subtracts net financial assets in the private sector by deficit spending, or cutting spending and raising taxes. Central bankers want the fiscal agent to use these tools as the driver of macroeconomic policy while the monetary agent is tasked with more narrow aims.

www.creditwritedowns.com/2011/11/juergen-stark-on-ecb-inflation-monetisation.html

Mark,

This is why the ECB is what I call a “fake” central bank, hence the Euro is, perhaps, a “fake” currency.

This is not to say I think CBs bailing out idiotic banks with taxpayer money is part of their role

Ed Harrison’s take:

In an interview with the Frankfurter Allgemeine Zeitung, a leading German broadsheet, the ECB chief economist explained his resignation and that of Bundesbank head Axel Weber in terms very similar to these. The argument is clear. Whether the ECB eventually is forced to take on this quasi-fiscal role by the escalating sovereign debt crisis is another matter. I have said the ECB will be forced into this role because of Italy, though I do have my doubts.

Below is my translation of the Stark interview. Note his commentary on commodity and asset-price inflation and the distortionary asset-based economic model based on cheap money that is practiced in the US. His is a framing of the problem with which I agree due to the altered private portfolio preferences this Greenspan/Bernanke put engenders.

However, I do not agree with Stark’s framing of deficits as the “root causes” of the crisis. Spain and Ireland had no deficits pre-crisis. The problem was the incomplete institutional arrangement of the euro zone currency union. Any solution that does not address this will fail.

Also notice his framing of the Eurobond/fiscal union issue. He doesn’t rule out Eurobonds. Rather, he says it must be fiscal/political union first and only then Eurobonds.

Political union is a dream, fiscal union may be possible but will still take years to achieve, meanwhile …

Tim

27 November 2011 14:07:

Sources: IMF to offer Italy a 600 billion euro bailout via ECB funding

According to Austrian daily Der Standard, Italy is to receive a 600 billion euro bailout courtesy of the IMF. Note: the article has what I assume to be a typo, referring to 600 million euros instead of 600 billion. I have fixed that in the translation below. Also note that the ultimate source of this information is La Stampa, an Italian daily newspaper.

www.creditwritedowns.com/2011/11/imf-ecb-italy-600-billion-euro-bailout.html

Mark,

So, indirectly the US taxpayer may now be on the hook to the ECB and Italy too. But, of course, the IMF never takes a haircut

Tim

27 November 2011 14:18:

Some related tweets:

RT @economistmeg: The EUR600bn IMF plan might look something like this (as I did the calculations 10 days ago) http://t.co/069tXbnW

edwardnh:
There’s a lotta lotta going on in Europe this weekend. throwing stuff on the wall to see what sticks. I anticipate a strong market reaction

RT @trumanfactor: “When a central bank has financed states in grand style, it has always led to disaster.” (Juergen Stark) http://t.co/ORCLQGKT - via @polit2k

RT @hblodget: IMF said to be bailing out Italy… which means US taxpayer is bailing out Italy http://t.co/plnfDWwp

Tim

27 Nov 2011 14:41:34:

John Rentoul: Labour wakes up, fuzzy and too late

As Osborne fiddles, Miliband, rather belatedly, is beginning to think about balancing the books

www.independent.co.uk/opinion/commentators/john-rentoul/john-rentoul-labour-wakes-up-fuzzy-and-too-late-6268529.html

Mark,

Alternative title: “2 men in a boat … up the creek … without a paddle between them”

Tim

PS: And more tweets from @economistmeg:

An IMF bailout for Italy would be followed immediately by IMF bailout for Spain. Hope they’re considering that in their calcs for It bailout

EZ crisis key dates ahead http://t.co/8W2CVayV

27 Nov 2011 21:15:32:

The Entire Sovereign Debt Crisis Can Be Understood By Looking At Sweden Vs. Finland
Read more: www.businessinsider.com/sweden-vs-finland-2011-11

and:

http://krugman.blogs.nytimes.com/2011/11/27/the-euro-curse

Mark,

Is the ECB now being seen as a fake CB because it denies LOLR role? In a crisis investors look much further than they normally do when doing risk analysis.

Tim

27 November 2011 22:05:

Mark Anderson:

Hi Tim,

1. yes.
2. we are thinking of posting this whole run on the abrightfire.com site, instead of in the letters section as last time. ca va?

mark

28 November 2011 01:17:

Mark Anderson:

Would you have any interest in writing a Special Issue for us?

Tim Coldwell:

OK with me. Bit of a mouthful?

Latest:

Roubini doubts the La Stamp article re IMF €600 billion for Italy. [ Me too ]

RT @Nouriel: Only way to get €600bn to italy is to combine IMF, NABB, ECB/SMP, new SDRs & bigger EFSF. To get there EFSF has to be turned into a €1tr ESM.

Should the Fed save Europe from disaster?

www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8918784/Should-the-Fed-save-Europe-from-disaster.html

ZekeJMiller‚
Obama and EU leaders will make statements at 1:40 tomorrow. Will discuss the global economy in the Roosevelt Room.

Hmm

28 November 2011 04:19

This time it’s Steve Keen on the hot seat on HARDtalk. Now, Steve is one of the few economists who actually predicted the global financial crisis. But what about the possibility of another Great Depression? That possibility and how to avoid it were the topics of conversation in this 25-minute interview. Great stuff.

www.creditwritedowns.com/2011/11/steve-keen-on-hardtalk-on-the-financial-crisis-and-the-economy.html

Tim

28 Nov 2011 04:23:41

The eurozone really has only days to avoid collapse
By Wolfgang Mȕnchau

“Italy’s disastrous bond auction on Friday tells us time is running out. The eurozone has 10 days at most.”
RT @pkedrosky: .@zkiraly If you can’t access the Munchau piece in FT, try this: http://t.co/riBynPU2

 By Larry Smarr

This is a report on my 10-year personal quest to increasingly quantify my body. As a lifelong scientist, this form of understanding my physical being has come naturally to me.

In many ways, my personal journey is a detective story. It started with simple quantification, such as weighing myself every day; but then clues began emerging which caused me to dig deeper and to rapidly expand the biochemical variables I was tracking over time. Eventually, I made a completely unexpected discovery about myself, with serious future health ramifications. But rather than jump to that surprise twist, I will describe the journey I experienced step-by-step, in the belief that hearing about the evolution of my understanding may benefit others.

What I have learned about myself both illustrates and foreshadows the ongoing digital transformation of medicine[1]. As our technological ability to “read out” the state of our body’s many subsystems improves, keeping track of changes in our key biochemical markers over time will become routine, and deviations from norms will more easily reveal early signals of disease development.

Genome sequencing is exponentially decreasing in cost, allowing for much broader population sequencing, leading to a digital context for comparison of our individual body’s markers. Social networks enable sharing among people with similar health situations[2] in a way that was virtually impossible until recently, increasing the positive reinforcement of better personal health choices. Finally, the emergence of system biology is leading to an integrative approach for all this data.

As mentioned above, I have been engaged in an ongoing personal experiment[3] in probing this emerging paradigm. This report is a short summary of my quest – a report from the field on the coming radical changes in how we can monitor and improve our personal health status.

Read the complete letter here: Quantified Health

You should consider yourself lucky that you don’t have to deal with Orange and France Telecom (aka FT) here in France. We have had no possibility to receive VOIP calls for over 2 weeks. We can call out but no calls arrive. Sometimes a caller gets to voicemail, sometimes not. We have no conventional “fixed” line so callers have to know our mobile numbers or catch us on skype, gtalk etc. The cordless phones ring fine when tested from the router.

Neither Orange nor FT seem to be remotely concerned and say they’ll try to get someone along soon to look at it. I am expecting them to say we have the wrong plan and will subscribe us to yet another one that takes another 3 weeks to get set up as they did recently without telling us. That time we had no services at all for 3 weeks and had no idea why until calling about 5 times (long waits) by mobile phones at great cost (no offer to recompense). I’m not surprised that the suicide rate at FT is so high.

Despite my wife’s exceptional patience and calm it must be a really shitty places to work especially for someone who has to deal with us:-) However, I hear Telstra in Australia has an even worse reputation.

Incidentally while I’m crapping on famous brand names, I have been waiting patiently for about 8 months for my son’s almost new Sonyericsson W910i mobile phone to be returned by their UK repair shop. Now they really are a totally fucked up company when it comes to customer relations. The only way I get a response is by public tweeting with an @SonyEricssonUK included but as only the kind but powerless marketing people are watching I don’t get very far.

It suddenly struck me that Sol Trujillo used to run either FT or Orange France and then Telstra:-)  Where is he now? Verizon?

Any tips on dealing effectively with such “enterprises” will be most welcome.  Also a suitable new category on A Bright Fire is needed methinks.

related: http://brontecapital.blogspot.com/2010/08/virtualization-one-more-benefit-and-one.html

UPDATE Monday 30th August : France Telecom specialist phoned my wife on her portable today to say their servers are F*%$ed up until Friday so why don’t we plug in a phone to the normal sockets.  Sure enough it now rings, and, of course, the internet is dead, a side effect he didn’t mention to my wife.

Meanwhile in a chat with John Hempton (see link above) I learned that he is an activist and now takes any corporation (aka call centre) that keeps him waiting too long on the phone to a small claims damages court (actually he files a claim threatening to do so) and gets paid off with 100% success rate.  Luckily for him the claims office is en route by bicycle from home to office.

Still no word from SonyEricssonUK on phone repair/replacement.

Continuing with Thursday’s China theme, SocGen’s Albert Edwards has been looking at the emergence of a trade deficit in the People’s Republic and the implications.

The backstory here is the recent, surprise announcement from Premier Wen Jiabao and Commerce Secretary Chen Deming that China would record a trade deficit in March – the first since April 2004.

The deficit, of course, is one result of the massive Chinese stimulus package focused on infrastructure, which has sucked in massive amounts of commodities.

And obviously Edwards thinks this is going to have serious ramifications.

read full story: http://ftalphaville.ft.com/blog/2010/03/25/187316/devaluing-the-yuan/

If indeed China were to de-value their currency (by letting it float freely) how would the China bashers in Congress react?  Would they put their brains in gear before their mouths or is that too much to hope for?  See below for more evidence of problems in China.

Is China blowing bubbles?

Yes, says Citigroup’s Willem Buiter, who thinks the Chinese authorities will fail in their efforts to prevent a classic boom, bubble and bust asset sequence.

http://ftalphaville.ft.com/blog/2010/03/25/186756/is-china-blowing-bubbles/

More unexpected trends:  http://www.ft.com/cms/0e45e12c-0619-11dd-802c-0000779fd2ac.html?_i_referralObject=15585205&fromSearch=n

“This is basically a kind of insurance product. The main issue is: how good is the party issuing it? If it’s going to be paying out huge numbers in the event of a crisis, will it be able to meet it obligations? Insurers can buy reinsurance for their liabilities, but the buck has to stop somewhere – there’s a limit to how much a private insurer can pay out. Only the government can cover unlimited losses,”

http://www.risk.net/risk-magazine/news/1590861/citi-plans-crisis-derivatives

and from Felix Salmon | Reuters

Citi reinvents end-of-the-world insurance

In hindsight, one of the silliest and most dangerous excesses of the Great Moderation was the large number of companies — foremost among them AIG, although there were lots of monoline insurers in the same trade — basically selling insurance on the world coming to an end. It’s a great trade: either the world doesn’t come to an end, and you make lots of money, or the world does come to an end, and it doesn’t matter ‘cos you’re bust anyway. Now, however, after seeing how that trade worked out, we’re wiser, and no large and leveraged financial institution would have the chutzpah to start selling world-coming-to-an-end insurance. Would they?

http://blogs.reuters.com/felix-salmon/2010/02/08/citi-reinvents-end-of-the-world-insurance/

Meanwhile in the real world

Payback’s A Bitch For Banks Stuck Holding Euro Debt

First the governments bail out the banks who were (are) basically insolvent. Then these governments, especially in Europe, see their balance sheets explode and face escalating concerns over sovereign default. The IMF now predicts that the government debt-to-GDP ratio in the G20 nations will explode to 118% by 2014 from pre-crisis levels of around 80%. Now, the ball is put back onto the banks because many have exposure to the areas of Europe that are facing substantial fiscal problems right now. According to the Wall Street Journal, U.K. banks have $193 billion of exposure to Ireland. German banks have the same amount of exposure and an additional $240 billion to Spain. Many international bond mutual funds also have sizeable exposure to sovereign debt of Portugal, Ireland, Greece and Spain as well. Contagion risks are back. Stay defensive and expect to see heightened volatility. In a nutshell, toxic assets have basically been swept under the rug in the hopes that we will outgrow the problem. Leverage ratios across every level of society are still reaching unprecedented levels as the public sector sacrifices the sanctity of its balance sheet in its quest to stabilize the dubious financial position of the household and banking sectors in many parts of the world.

http://www.businessinsider.com/rosenberg-paybacks-a-bitch-for-banks-stuck-holding-euro-debt-2010-2

and a really downbeat view of tea parties, politicians and the US economy:

We’re Weimar

By James Howard Kunstler | February 8, 2010 6:35 AM

As the contest heats up this year between Tea Partydom and the Weimar-like remnant of the party in power expect to see a political vortex form that will suck the little remaining coherence out of American life. Personally, I’d like to see Mr. Obama have a little fun with his adversaries, even if it seals his fate as a one-term president.  I’d like to see him start by using the just-proposed national forum on health care reform as a rope-a-dope moment to expose opponents to reform as the bought-and-sold errand boys they are.

And a good overview of the state of play in Europe from Edward Harrison dated Feb 2009: It’s much worse now!!

The European problem

Europe is having a problem right now. In truth, it is many problems more than a single problem. Countries in the former Soviet bloc are in a deep downturn which has been significantly worsened by turmoil in currency markets. Western European banks are hemorrhaging losses – some will probably be nationalized. Spain, the U.K. and Ireland have all seen massive property bubbles implode. Greece, Ireland, Spain, Portugal and Italy have all seen credit warnings and downgrades. And Ukraine, Hungary and Latvia are but three nations that have been forced into the arms of the International Monetary Fund for a bailout. Clearly, the credit crisis has moved to Europe in a massive way. In my view, this was always inevitable given the available evidence after the panic in September.

read more: http://www.creditwritedowns.com/2009/02/the-european-problem.html

Tin hats time again?

Tim,
Le Touquet, France

When the Republicans invited President Obama to address their congressional House delegation in Baltimore today, they probably had no idea how badly it would turn out for them.

Presumably the Republicans thought they’d get a chance to grill the president on live television. But instead, Obama – following on from his state of the union address on Wednesday night – turned the tables by highlighting the Republicans who opposed his policies and refused to bend, yet were prepared to “turn up and cut ribbons” when their constituents reaped the rewards.

Obama also displayed a rare grasp of policy and legislation, wrong-footing his questioners with some stern rebuttal and in some instances quoting their own positions back to them to highlight the contradictions. He mocked the GOP for presenting healthcare reforms as a “Bolshevik plot” – and got a laugh, even from the Republican audience – and suggested that their approach was counterproductive:

Frankly, how some of you went after this bill, you would think that this thing was a Bolshevik plot. That’s how you presented it. I’m thinking to myself, how is it that a plan that is pretty centrist — no, look. I’m just saying. I know you guys disagree, but if you look at the facts of this bill, most independent observers would say this is actually what many Republicans — it is similar to what many republicans proposed to Bill Clinton when he was doing his debate on health care.

So, all I’m saying is, we’ve got to close the gap a little bit between the rhetoric and the reality. I’m not suggesting that we’re going to agree on everything, whether it’s on health care, energy or what have you. But if the way these issues are being presented by the Republicans is that this is some wild-eyed plot to impose huge government in every aspect of our lives, what happens is you guys then don’t have a lot of room to negotiate with me.

I think we can confidently predict this is the last time the Republicans invite the president to a similar format. Indeed, because the hall the Republicans are holding their event seemed to have just a single TV camera, Obama literally took the spotlight away. Republican questioners showed up as shadowy figures, and when caucus leader Mike Pence kicked off the Republican questions at first he couldn’t be heard at all.

At the end, shaking hands with the president, Pence’s face looked as if he’d sucked a lemon for an hour – and in a way he had.

A sign of how compelling the footage was: the US cable networks, always so trigger-happy and ready to move on if an event is looking boring, stuck with the live feed, although Fox did cut away first for analysis.

The net effect is that Obama looked serious, reasonable and intelligent. The Republicans got to sound like whiners, complaining about various pet peeves and chewing over their old laundry list of tax cuts and opposition.

CNN quickly compared it to weekly question time in the House of Commons – and Twitter is seeing an avalanche of comments calling for this to be a regular event. Not if the Republicans have any say in the matter.

Richard Adams Friday 29 January 2010 18.36 GMT | guardian.co.uk

http://www.guardian.co.uk/world/richard-adams-blog/2010/jan/29/barack-obama-republicans#

See also:

Why do people often vote against their own interests?

The Republicans’ shock victory in the election for the US Senate seat in Massachusetts meant the Democrats lost their supermajority in the Senate. This makes it even harder for the Obama administration to get healthcare reform passed in the US.

Political scientist Dr David Runciman looks at why is there often such deep opposition to reforms that appear to be of obvious benefit to voters.

http://news.bbc.co.uk/2/hi/americas/8474611.stm#

The 2 articles above nicely illustrate the view from the UK, one covers an amusing episode in the confrontation and the other the frustration.  Who would want to be a politician these days?

Obama-Volcker on target, avoid Glass-Steagall

The furore over bankers’ bonuses illustrates one aspect of current financial market conduct that has wide implications: the casual slippage back to “normalcy”, interpreted as business-as-usual 2007-style. It seems clear to us that normalcy is a long way off (if it has ever existed). Indeed, complacency in many quarters about economic recovery, and the illusion of normalcy, is itself a reason why renewed economic and financial trouble, probably crisis, is likely. The drop in bank shares yesterday on the announcement of new regulatory plans by Mr Obama, originated by former Fed governor Volcker, is a classic case of blinkers falling from the eyes of financial markets that have been amazingly credulous of delusions in recent years (if not always). One thinks of the Latino debt farrago (“countries can’t go bankrupt”), the high-leverage, saving-andloans bubble, the tech bubble, as much as the recent alphabet-soup mortgage bubble. These were obvious cases where a little scepticism, and willingness to look at situations from multiple perspectives, seemed to be beyond the reach of market participants, or their educators.

http://ftalphaville.ft.com/blog/2010/01/22/132991/dumas-on-volcker/

This doesn’t seem too aggressive to me, just a spot on common sense take on the way forward.  But from Felix Salmon at Reuters:

[Mark Thoma is as pessimistic as I’ve seen him] [WP strikethrough not working?]

Economics of Contempt is pessimistic when it comes to the chances that the Democrats will line up behind Obama on this one:

I don’t even know why I took the time to write about this, because there’s zero chance the proposals Obama announced today will ever be law. This was a fairly transparent political stunt — the White House needed to do something to take the media’s focus off of health care 24/7, so they flew in Volcker and announced some proposals that sound good to the media. The two Senate staffers I talk to regularly both said their offices were basically ignoring Obama’s proposals, because even if the White House fights for them (which they won’t), Chris Dodd has no intention of inserting them into his committee’s bill.

http://blogs.reuters.com/felix-salmon/2010/01/22/a-closer-look-at-the-volcker-rule/

Back to Dumas, because the “poodles” have in fact been responsible for far more creation of the weapons of choice (Derivatives – running at $600bn per day in early 2008) than Wall Street, an interesting obvservation:

The lack of international coordination has been lamented in some quarters. But it was always a chimera. A strong lead from a man like Volcker is so obviously vastly superior to prolonged negotiations with a bunch of muddle-headed continental Europeans, who do not understand and dislike finance in the first place, that we should all emit a sigh of relief on that point. The British will behave much more justifiably like “poodles” (a much maligned breed, by the way) on this issue than on others in recent years, and the rest can just follow along when they make up their minds to do so.

So:

President Obama probably feels he has had a bad week. But it may prove to have been a good one for world welfare!

Maybe.

For example, if you use Seesmic to view Twitter feeds it already decodes the short URL and shows you the real destination in a bubble popup (and thumbs of images at Twitpic or active Google Maps from geotags) so the technology looks very doable.  I’m surprised this bubble is not yet used for ads (opt in or not).

Maybe users might even pay for such a time-saving and irritation reducing feature:-)

OK, I’m obsessed. I just checked and I’ve written over 30 blog entries in the last few years about Jeff Bezos, Amazon’s CEO, for what I consider empty, meaningless hype around the Kindle and eBooks generally. Where is Peter Finch’s Howard Beale when we need him: “I’m mad as hell and I’m not going to take this any more!” (Younger readers, please check out the famous Network film scene on YouTube.)

For the record: I’m not against eBooks. They are fast maturing into a vital part of the information landscape. I think Amazon as a company is (as Mark Anderson calls it) “Amazin’,” and that it would not have become Amazin’ without Jeff Bezos. He is a fine example of a risk-taking entrepreneur.

I just don’t think that a company of Amazon’s stature, and a pioneer in eBook marketing, should appear to treat the public like fools.

Bezos’s latest insult to our intelligence was delivered on the day after Christmas. In a press release titled “Amazon Kindle is the Most Gifted Item Ever on Amazon.com,” we “learn” that “Amazon.com, Inc. (NASDAQ:AMZN) today announced that Kindle has become the most gifted item in Amazon’s history.” The release immediately continues, “On Christmas Day, for the first time ever, customers purchased more Kindle books than physical books.”

OK, with all the ongoing hype, I’m willing to believe that the Kindle was indeed  the most gifted item in Amazon’s history. BUT may I note that of course we do not learn how many Kindles that represents, nor, if you ponder more carefully, over what time period. Is this being measured from the Kindle’s introduction? Or just from fall, 2009? Amazon must be the last large publicly-traded company in the world to fail to fill in those small details on its supposed #1 product. Does the SEC ever complain that Amazon might be misleading shareholders about information necessary to their understanding of the value of Amazon’s shares? Of course not.

Mediabistro’s Galleycat pointed out in a December 28, 2009 blog entry that “64 of the 100 Top Kindle Store Bestsellers Are Free.” Does Amazon consider obtaining something that costs $0.00 a purchase? Princeton University’s WordNet’s first definition of the term “purchase” is “the acquisition of something for payment.” I, for one, would very much appreciate it if Amazon would clarify if it thinks that the word “purchase” is simply synonymous with “obtain.”

Further, does Amazon believe that Christmas Day 2009 will be seen as the tipping point? While almost certainly less than 5% of Amazon’s book-buying customers own Kindles, have the non-Kindle owners decided it is too embarrassing to be seen in public with a printed book? I find it extremely difficult to imagine what the real or symbolic significance is in Amazon’s hyperbolic “On Christmas Day, for the first time ever, customers purchased more Kindle books than physical books.”

To Mr. Bezos and the amazing PR folks at Amazon: please stop treating us like morons!

PS: From Mike Cane an excellent adjunct to this posting here.

For more articles by Thad, visit his site, The Future of Publishing.