Links: 2009-05-07

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  • YouTube – Pig Slop Processor

    A friend of mine sent me this link. It has nothing to do with finance, but it was so good I had to post it. WARNING: don’t watch this while eating.

  • The Banks and Orwell – Yves Smith

    This post demonstrates that it may be back to the grind, business as usual in banking after all is said and done. The banks have learnt nothing. Meanwhile, the problem loans and the leverage is still there. Not a sign of a robust economic future, if you asked me.

  • Where Is China’s Surge In Bank Credit Going? – WSJ

    Obviously, if you do fiscal stimulus and the stimulus is wasted a-la Japan in the 1990s, the long-term effects are going to be muted. Is this what is happening in China?

  • A Strong Safety Net Encourages Healthy Risk-Taking | The American Prospect

    Hat tip Mark Thoma. This is a theme I have been meaning to bring up. One reason the likes of Germany can legitimately get away with less stimulus is that their automatic stabilsers are more robust. The U.S. has a poor social safety net. An article in the WSJ, also in the links, brings this point across.

  • Pollution, Race, and Poverty – James Kwak

    18.1% of the health impact of air pollution falls on African-Americans, while they make up only 11.8% of the population; 15.3% of impact falls on the poor, who make up 12.9% of the population.

  • FT.com / John Gapper – How banks learnt to play the system

    The difference between 1988 and today is that tangible common equity is the new tier 1 capital. To all but bankers or regulators, that last sentence is incomprehensible, of course. Yet it encapsulates why two decades of reform intended to protect banks against collapse not only failed to work but had the perverse effect of hiding the problem.

  • Banks Need Fewer Carrots and More Sticks – WSJ

    “The results of bank stress tests — expected tomorrow — will no doubt prompt calls for further government guarantees and capital injections. But continuing to prop up the banks with government cash is a mistake. There is a better approach.”

  • U.S., Europe Are Ocean Apart on Human Toll of Joblessness – WSJ.com

    In Germany, losing his factory job didn’t stop Alfred Butt from taking a Mediterranean vacation this winter. Thanks to generous jobless benefits, being out of work “hasn’t changed my life that much,” Mr. Butt says. In the U.S., Dylan DeRoberts lost similar work — but there’s no seaside getaway for him. Instead, he’s giving up life’s little pleasures, like riding his snowmobile, because he lost his insurance, too. “I’ve learned to live at a new level,” Mr. DeRoberts says.

  • FT.com / Europe – Red-faced IMF fixes east Europe error

    “The International Monetary Fund has corrected an embarrassing error that led to the publication of exaggerated estimates of the external debt levels of crisis-hit eastern European states…But after the numbers for some countries were challenged by central bankers, analysts and journalists, the IMF revised the data and began publishing new figures for the external debt/reserves ratios of some eastern European countries.”

  • FT.com – Subprime lobbyist spending

    The top 25 US originators of subprime mortgages – the risky assets that sparked the global financial crisis – spent almost $370m in Washington over the past decade on lobbying and campaign donations as they tried to ward off tighter regulation of their industry, an investigation by the non-profit by the Center for Public Integrity has shown.

  • Boston Globe union, NY Times reach accord

    By Jason Szep and Robert MacMillan BOSTON/NEW YORK (Reuters) – The Boston Globe’s biggest union reached a tentative accord on Wednesday with owner New York Times Co to secure the money-losing newspaper’s survival after a month of intense…

  • Property: ‘It’s a good time to buy,’ say first-timers – Telegraph

    “Around 57pc of people hoping to get on to the property ladder said they thought house prices would either stay the same or increase during the coming 12 months, while 69pc thought now was a good time to buy.”

  • Roubini’s Star Is Fading – Business Insider

    This one is a bit of a hatchet job on Roubini by the Business Insider game. They think Dr. Doom is missing the turn and he’s going to get left in history’s dust bin if he doesn’t watch out. The post has a nice pick of Dr. Roubini and three young ladies, suggesting, ofcourse, he’s a media hound more than aserious economist. A bit amusing, but very tabloid-esque.”

  • Why own when you can rent? – MSN Money

    “Having shelled out close to $700 in car repairs last month and facing a chimney repair that is creeping up to $5,000 or more, I’m fed up with the endless cost of owning stuff. Ownership is supposed to be the key that unlocks the American dream. But there are hidden costs that no one talks about, like the constant repairs and upgrades and attention that possessions demand. “

  • China’s fake recovery – FT Alphaville

    Alphaville are not the only ones who think this is a head fake. Yves Smith and WIllem Buiter are unconviced as well.

  • June 8 Deadline Set For Banks’ Capital Plan

    “In a joint statement, Treasury Secretary Timothy Geithner and other government banking officials said Wednesday that the 19 largest banks seeking to withdraw from the $700 billion rescue program will have to prove that they can borrow money without the support of the Federal Deposit Insurance Corp.”

  • Geithner Charlie Rose Interview: There Were Intense Negotiations With Banks Over Stress Test Results

    “Scroll down for video excerpt and full transcript”

  • How to Embed MP3 Audio Files In Web Pages With Google or Yahoo! Flash Player

    Question: How do you embed an MP3 file (like a podcast, song or background music) into a web page or an RSS feed so that visitors can listen to the audio in the browser itself without requiring an external player like QuickTime or Windows Media Player.

  • Overcoming Bias: We Like Pride

    “A recent Psychological Science article describes experiments where subjects were randomly induced into either an proud or a neutral mental state, and then worked with a group on solving a problem: Proud individuals not only took on a dominant role within the group problem-solving task, but also were perceived as the most likeable interaction partners. These findings suggest that pride, when representing an appropriate response to actual performance (as opposed to overgeneralized hubris), constitutes a functional social emotion with important implications for leadership and the building of social capital.”

  • UK Bubble: US mortgage rate hits an all time low

    “The US 30 year fixed rate mortgage is now at its lowest level in almost four decades. According to the Federal Reserve’s database of interest rates, it is now hovering around 4.78 percent. “

  • Commentary by James K. Galbraith – The Texas Observer

    Very good comments. Hat tip Angry Bear. “First, an idea. The idea that capitalism, for all its considerable virtues, is inherently self-stabilizing, that government and private business are adversaries rather than partners; the idea that freedom without responsibility is a viable business principle; the idea that regulation, in financial matters especially, can be dispensed with. We tried it, and we see the result.” By the way, I don’t think the repeal of Glass-Steagall was the problem. It was a lack of regulatory oversight.

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