Saturday, December 27, 2008
Quantitative Easing
Will the Financial Crisis Bring Upheaval to China?
For a while, it seemed China night be different. Maybe the unique factors that have allowed its economy to grow at an unprecedented rate for nearly 30 years would keep it afloat when the rest of the world was succumbing to the impact of the growing global financial crisis. But that hope has now been crushed under an increasing tide of grimmer and grimmer statistics that seem to portray an economy in free fall. China will have its hard landing in 2009, and even the most optimistic economists now concede that GDP growth will be far below the 8% annual pace that Chinese economists and officials generally regard as the minimum necessary for the preservation of social order, possibly hitting 5% or under.
As the depth of the slowdown becomes clearer, voices from all quarters have warned of the dangers of unrest.
As the depth of the slowdown becomes clearer, voices from all quarters have warned of the dangers of unrest.
George Bush, Protectionist
"I've abandoned free-market principles to save the free-market system," President Bush told CNN, defending his offer of $17 billion in loans to the Big Three "to make sure the economy doesn't collapse."
Thus did Bush concede that protectionism, if a critical U.S. industry is in peril, must trump free-trade ideology. For in offering the bailout to GM, Ford and Chrysler, Bush, by omission, excluded BMW, Mercedes, Honda, Toyota, Nissan and Hyundai -- though all operate auto plants here in the United States and all are feeling the same sales slump.
Thus did Bush concede that protectionism, if a critical U.S. industry is in peril, must trump free-trade ideology. For in offering the bailout to GM, Ford and Chrysler, Bush, by omission, excluded BMW, Mercedes, Honda, Toyota, Nissan and Hyundai -- though all operate auto plants here in the United States and all are feeling the same sales slump.
Friday, December 26, 2008
A Mysterious Link Between Sleeplessness and Heart Disease
People who don’t get much sleep are more likely than those who do to develop calcium deposits in their coronary arteries, possibly raising their risk for heart disease, a new study has found.
(..)
After accounting for various other causes, the researchers concluded that one hour more of sleep per night was associated with a 33 percent decrease in the odds of calcification, comparable to the heart benefit gained by lowering one’s systolic blood pressure by 17 millimeters of mercury.
(..)
After accounting for various other causes, the researchers concluded that one hour more of sleep per night was associated with a 33 percent decrease in the odds of calcification, comparable to the heart benefit gained by lowering one’s systolic blood pressure by 17 millimeters of mercury.
Thursday, December 25, 2008
TIME MAG pictures of the year
Swiss pilot Yves Rossy, the world's first man to fly with a jet-powered fixed-wing apparatus strapped to his back, flies during his first official demonstration, on May 14, 2008 above Bex, Switzerland.
2008 has been an eventful year to say the least - it is difficult to sum up the thousands of stories in just a handful of photographs. That said, I will try to do what I've done with other photo narratives here, and tell a story of 2008 in photographs. It's not the story of 2008, it's certainly not all stories, but as a collection it does show a good portion of what life has been like over the past 12 months. This is a multi-entry story, 120 photographs over three days. Look for part 1 from yesterday and part 3 tomorrow. (40 photos total)
Among Dolphins, Tool-Using Handymen Are Women
In the deep, lucid channels of Australia's Shark Bay, wild bottlenose dolphins have discovered tools, raising provocative questions about the origins of intelligent behavior, the nature of learning and the birth of technology.
There, dolphins in one extended family routinely use sponges to protect their noses as they forage for fish hidden in the abrasive seafloor sand, Georgetown University scientists reported earlier this month.
One of the few male spongers with a bright orange sponge.
As best the researchers can tell, a single dolphin may have invented the technique relatively recently and taught it to her kin. The simple innovation dramatically changed their behavior, hunting habits and social life, the researchers found. Those that adopted it became loners who spend much more time on the hunt than others and dive more deeply in search of prey. The sponging dolphins teach the technique to all their young, but only the females seem to grasp the idea.
There, dolphins in one extended family routinely use sponges to protect their noses as they forage for fish hidden in the abrasive seafloor sand, Georgetown University scientists reported earlier this month.
One of the few male spongers with a bright orange sponge.
As best the researchers can tell, a single dolphin may have invented the technique relatively recently and taught it to her kin. The simple innovation dramatically changed their behavior, hunting habits and social life, the researchers found. Those that adopted it became loners who spend much more time on the hunt than others and dive more deeply in search of prey. The sponging dolphins teach the technique to all their young, but only the females seem to grasp the idea.
Tuesday, December 23, 2008
$1.6B Of Bank Bailout Went To Execs
Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals.
The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages.
Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.
The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines.
The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages.
Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.
The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines.
20 Amazing and Essential Non-fiction Books to Enrich Your Library
This list includes a few of my favorites as well...
I’m an avid reader of fiction and just love a novel that transports me, that is so gripping that I can’t put it down. But I also enjoy a good non-fiction book, from self-help stuff to philosophy to biographies to just about anything that makes me think. After the warm reception of my post on novels (50 Amazing and Essential Novels to Enrich Your Library), a number of people asked for a list of non-fiction as well. Well, here it is!
I’m an avid reader of fiction and just love a novel that transports me, that is so gripping that I can’t put it down. But I also enjoy a good non-fiction book, from self-help stuff to philosophy to biographies to just about anything that makes me think. After the warm reception of my post on novels (50 Amazing and Essential Novels to Enrich Your Library), a number of people asked for a list of non-fiction as well. Well, here it is!
Blind Man Sees With Subconscious Eye
Scientists are reporting the remarkable case of a blind man who can see.
The case involves a middle-aged male physician living in Switzerland, who is known only by the initials "TN." A few years ago, TN had two strokes, one on either side of his brain. The strokes severely damaged the part of the brain primarily responsible for vision, known as the occipital cortex.
Extensive testing of TN confirmed that even though his eyes were just fine, he was completely blind. He couldn't see objects held in front of him and used a cane to get around. Ask him if he could see, and TN would reply, "No, I'm blind."
But neuroscientist Beatrice de Gelder wanted to study TN further. She is affiliated with Tilburg University in the Netherlands as well as Massachusetts General Hospital in Boston. First, she and her colleagues repeated tests on TN to satisfy themselves that he was indeed blind.
Then they laid out an obstacle course in a hallway. The obstacles consisted of everyday objects.
"One was a typical paper basket; one was a stack of books," says de Gelder. "They all had different shapes and sizes."
She then told TN to walk down the hall.
"We didn't give him information about obstacles or anything. So he was not aware that there were obstacles."
So TN walked down the hall, but instead of walking straight ahead, he carefully stepped around each of the obstacles.
"He never touched any of it. We were like totally amazed," says de Gelder, who reports her finding in the journal Current Biology. You can see this test by clicking on the video link above.
The case involves a middle-aged male physician living in Switzerland, who is known only by the initials "TN." A few years ago, TN had two strokes, one on either side of his brain. The strokes severely damaged the part of the brain primarily responsible for vision, known as the occipital cortex.
Extensive testing of TN confirmed that even though his eyes were just fine, he was completely blind. He couldn't see objects held in front of him and used a cane to get around. Ask him if he could see, and TN would reply, "No, I'm blind."
But neuroscientist Beatrice de Gelder wanted to study TN further. She is affiliated with Tilburg University in the Netherlands as well as Massachusetts General Hospital in Boston. First, she and her colleagues repeated tests on TN to satisfy themselves that he was indeed blind.
Then they laid out an obstacle course in a hallway. The obstacles consisted of everyday objects.
"One was a typical paper basket; one was a stack of books," says de Gelder. "They all had different shapes and sizes."
She then told TN to walk down the hall.
"We didn't give him information about obstacles or anything. So he was not aware that there were obstacles."
So TN walked down the hall, but instead of walking straight ahead, he carefully stepped around each of the obstacles.
"He never touched any of it. We were like totally amazed," says de Gelder, who reports her finding in the journal Current Biology. You can see this test by clicking on the video link above.
Iceland ‘Like Chernobyl’ as Meltdown Shows Anger Can Boil Over
The potential for civil unrest is global...
Dec. 23 (Bloomberg) -- It was the week before Christmas in Reykjavik, and all through the town Eva Hauksdottir led a band of 60 whistle-blowing, pan-banging, shouting demonstrators.
“Pay your own debts,” they yelled as they visited one bank office after another in Iceland’s capital. “Don’t make the children pay.”
When she isn’t leading one of the almost daily acts of protest in this land devastated by the global financial meltdown, Hauksdottir sells good luck charms made from the claws of ptarmigans, a local bird, and voodoo dolls in the form of bankers. She says she expects to lose her home, worth less than when she bought it two years ago, after the amount she owes jumped more than 20 percent.
Unrest following the end of a five-year economic boom is overshadowing the holidays in a country of 320,000 near the Arctic Circle, where the folklore is filled with magic, trolls and elves. Expansion ended with the collapse of the U.S. subprime mortgage market. The fallout in Iceland may presage civil disruptions elsewhere, as job losses multiply and credit bills come due. Few nations can count themselves safe, says Ian Bremmer, president of the New York-based Eurasia Group, which analyzes political risk for businesses.
“As people have their expectations changed radically, you can have protests come out of nowhere,” even in developed countries, Bremmer said.
(..)
Hauksdottir, the owner of a Reykjavik witchcraft shop, says over a cup of thyme and juniper tea that only civil disobedience can force banks to stop collecting debts that people can’t pay.
“We’ll use our voices, and then if we have to we’ll use our hands, and maybe axes,” Hauksdottir says.
Dec. 23 (Bloomberg) -- It was the week before Christmas in Reykjavik, and all through the town Eva Hauksdottir led a band of 60 whistle-blowing, pan-banging, shouting demonstrators.
“Pay your own debts,” they yelled as they visited one bank office after another in Iceland’s capital. “Don’t make the children pay.”
When she isn’t leading one of the almost daily acts of protest in this land devastated by the global financial meltdown, Hauksdottir sells good luck charms made from the claws of ptarmigans, a local bird, and voodoo dolls in the form of bankers. She says she expects to lose her home, worth less than when she bought it two years ago, after the amount she owes jumped more than 20 percent.
Unrest following the end of a five-year economic boom is overshadowing the holidays in a country of 320,000 near the Arctic Circle, where the folklore is filled with magic, trolls and elves. Expansion ended with the collapse of the U.S. subprime mortgage market. The fallout in Iceland may presage civil disruptions elsewhere, as job losses multiply and credit bills come due. Few nations can count themselves safe, says Ian Bremmer, president of the New York-based Eurasia Group, which analyzes political risk for businesses.
“As people have their expectations changed radically, you can have protests come out of nowhere,” even in developed countries, Bremmer said.
(..)
Hauksdottir, the owner of a Reykjavik witchcraft shop, says over a cup of thyme and juniper tea that only civil disobedience can force banks to stop collecting debts that people can’t pay.
“We’ll use our voices, and then if we have to we’ll use our hands, and maybe axes,” Hauksdottir says.
Feinberg Despised in Wisconsin Where Cerberus Lives Up to Name
Dec. 23 (Bloomberg) -- Just about everyone in Kimberly, Wisconsin, hates billionaire Stephen Feinberg.
“This is a greedy, extremely greedy guy who doesn’t care about other human beings,” said Jeffery Wyngard, a third- generation Kimberly mill worker with 30 years on the job.
(..)
Feinberg inspires this reaction in Kimberly because Cerberus Capital Management LLC, the company he founded in 1992, owns NewPage Corp., which closed the town’s 119-year-old paper mill that Local 2-9 of the United Steelworkers says was profitable when NewPage bought it nine months ago. Six hundred people are out of work in the town of 6,200 at the same time Cerberus’s money-losing Chrysler LLC automotive unit was seeking a taxpayer loan.
(..)
Three-Headed Dog
Still, the workers blame Cerberus, named after the three- headed dog from Greek and Roman mythology who guards the gates of hell, and Feinberg, its 48-year-old founder.
Feinberg “is partly responsible for my little girl not being able to sleep at night, the 9-year-old girl who worries about her father losing his job,” Brukardt said. “That’s why he hides under his rock. Because in his heart he knows he isn’t right.”
As CEO of a $26 billion company, Feinberg has a net worth of about $1 billion, according to Forbes Magazine’s 2008 list. Brukardt made $24 an hour, or about $80,000 last year including overtime. Brukardt said he owes $160,000 on the mortgage for his five-bedroom duplex on College Avenue in Appleton, Wisconsin, and he doesn’t know how long he can keep making payments.
(..)
Dan Sawall, a 30-year mill veteran, said he had watched Chrysler Chief Executive Officer Robert Nardelli on television “with those granny glasses at the end of his nose,” Sawall said, telling Congress the automaker needed billions in taxpayer money to stay afloat.
“How ironic is that? You’re taking people’s lives and ripping them apart and now you want those same people to bail you out?” Sawall said. “If I don’t have a job to pay my taxes, how am I supposed to bail you out? Personally, I don’t know how those guys sleep at night.”
Karl Hooyman shook his head. He calculated that $54 from his weekly unemployment compensation of $355 would go to taxes that might be funneled to the Chrysler loan.
“Thirty-eight years gone in the blink of an eye,” he said. “It don’t make sense.”
“This is a greedy, extremely greedy guy who doesn’t care about other human beings,” said Jeffery Wyngard, a third- generation Kimberly mill worker with 30 years on the job.
(..)
Feinberg inspires this reaction in Kimberly because Cerberus Capital Management LLC, the company he founded in 1992, owns NewPage Corp., which closed the town’s 119-year-old paper mill that Local 2-9 of the United Steelworkers says was profitable when NewPage bought it nine months ago. Six hundred people are out of work in the town of 6,200 at the same time Cerberus’s money-losing Chrysler LLC automotive unit was seeking a taxpayer loan.
(..)
Three-Headed Dog
Still, the workers blame Cerberus, named after the three- headed dog from Greek and Roman mythology who guards the gates of hell, and Feinberg, its 48-year-old founder.
Feinberg “is partly responsible for my little girl not being able to sleep at night, the 9-year-old girl who worries about her father losing his job,” Brukardt said. “That’s why he hides under his rock. Because in his heart he knows he isn’t right.”
As CEO of a $26 billion company, Feinberg has a net worth of about $1 billion, according to Forbes Magazine’s 2008 list. Brukardt made $24 an hour, or about $80,000 last year including overtime. Brukardt said he owes $160,000 on the mortgage for his five-bedroom duplex on College Avenue in Appleton, Wisconsin, and he doesn’t know how long he can keep making payments.
(..)
Dan Sawall, a 30-year mill veteran, said he had watched Chrysler Chief Executive Officer Robert Nardelli on television “with those granny glasses at the end of his nose,” Sawall said, telling Congress the automaker needed billions in taxpayer money to stay afloat.
“How ironic is that? You’re taking people’s lives and ripping them apart and now you want those same people to bail you out?” Sawall said. “If I don’t have a job to pay my taxes, how am I supposed to bail you out? Personally, I don’t know how those guys sleep at night.”
Karl Hooyman shook his head. He calculated that $54 from his weekly unemployment compensation of $355 would go to taxes that might be funneled to the Chrysler loan.
“Thirty-eight years gone in the blink of an eye,” he said. “It don’t make sense.”
Friedman Would Be Roiled as Chicago Disciples Rue Repudiation
At the University of Chicago, once ascendant free-market acolytes are finding themselves in an unusual role: They’re battling a wave of government intervention more sweeping than any since the Great Depression as the U.S. struggles with the worst recession in seven decades.
By the end of November, the government had committed $8.5 trillion, or more than half the value of everything produced in the country in 2007, to save the financial system.
The European Union had ponied up more than $3 trillion to guarantee bank loans and provide capital to lenders. And China had unveiled a $586 billion stimulus plan and its biggest interest-rate cut in 11 years.
The intrusion is anathema to the so-called Chicago School of economics and its patriarch, the late Milton Friedman.
By the end of November, the government had committed $8.5 trillion, or more than half the value of everything produced in the country in 2007, to save the financial system.
The European Union had ponied up more than $3 trillion to guarantee bank loans and provide capital to lenders. And China had unveiled a $586 billion stimulus plan and its biggest interest-rate cut in 11 years.
The intrusion is anathema to the so-called Chicago School of economics and its patriarch, the late Milton Friedman.
Monday, December 22, 2008
Inventor designs 'tunable' glasses to help one billion in Third World see
THIS IS BRILLIANT!!!!!!!!!!!!!!!!!!
A Brition has designed a pair of glasses which can be adjusted by the wearer without the need for an optician, in an invention which he hopes will help the world's poor.
Prof Joshua Silver hopes his design will enable a billion people in the developing world to receive spectacles for the first time within just over a decade.
A retired Oxford University physics professor, he came up with the idea in what he describes as a "glimpse of the obvious".
His adaptive glasses are designed to be "tuned" by the wearer to suit their eyes without the need for a prescription and can help both short-sighted and long-sighted people.
He set on the idea of developing an adjustable spectacle after a chance conversation in 1985 when he and a colleague were discussing optical lenses.
It took more than 20 years to finally come up a design which can be made cheaply on a large scale.
Working on the principle that thicker lenses are more powerful than thin ones, Prof Silver's spectacles can be adjusted by injecting tiny quantities of fluid.
The tough plastic glasses have thin sacs of liquid in the centre of each lens.
They come with small syringes attached to each arm with a dial for the wearer to add or remove fluid from the lens.
Once the lenses have been adjusted, the syringes are removed and the spectacles worn just like a prescription pair.
The invention will enable millions of people in poorer parts of the world, where opticians are in short supply, to get spectacles for the first time.
A trial project, supported by the Department for International Development, has already seen thousands of pairs distributed in Third World countries.
He is now preparing to launch an ambitious scheme in India to distribute one million pairs in a year.
His aim is to eventually reach 100 million people a year, with a target of one billion in total by 2020.
Other "simple" British inventions which have transformed the lives of millions of people in the Third World include Trevor Baylis's clockwork radio, which has brought communications to remote areas without electricity supplies.
A Brition has designed a pair of glasses which can be adjusted by the wearer without the need for an optician, in an invention which he hopes will help the world's poor.
Prof Joshua Silver hopes his design will enable a billion people in the developing world to receive spectacles for the first time within just over a decade.
A retired Oxford University physics professor, he came up with the idea in what he describes as a "glimpse of the obvious".
His adaptive glasses are designed to be "tuned" by the wearer to suit their eyes without the need for a prescription and can help both short-sighted and long-sighted people.
He set on the idea of developing an adjustable spectacle after a chance conversation in 1985 when he and a colleague were discussing optical lenses.
It took more than 20 years to finally come up a design which can be made cheaply on a large scale.
Working on the principle that thicker lenses are more powerful than thin ones, Prof Silver's spectacles can be adjusted by injecting tiny quantities of fluid.
The tough plastic glasses have thin sacs of liquid in the centre of each lens.
They come with small syringes attached to each arm with a dial for the wearer to add or remove fluid from the lens.
Once the lenses have been adjusted, the syringes are removed and the spectacles worn just like a prescription pair.
The invention will enable millions of people in poorer parts of the world, where opticians are in short supply, to get spectacles for the first time.
A trial project, supported by the Department for International Development, has already seen thousands of pairs distributed in Third World countries.
He is now preparing to launch an ambitious scheme in India to distribute one million pairs in a year.
His aim is to eventually reach 100 million people a year, with a target of one billion in total by 2020.
Other "simple" British inventions which have transformed the lives of millions of people in the Third World include Trevor Baylis's clockwork radio, which has brought communications to remote areas without electricity supplies.
Happiness quotation from Christopher Alexander (again).
If I consider my life honestly, I see that it is governed by a certain very small number of patterns of events which I take part in over and over again.
Being in bed, having a shower, having breakfast in the kitchen, sitting in my study writing, walking in the garden, cooking and eating our common lunch at my office with my friends, going to the movies, taking my family to eat at a restaurant, going to bed agin. There are a few more.
There are surprisingly few of these patterns of events in any one person’s way of life, perhaps no more than a dozen. Look at your own life and you will find the same. It is shocking at first, to see that there are so few patterns of events open to me.
Not that I want more of them. But when I see how very few of them there are, I begin to understand what huge effect these few patterns have on my life, on my capacity to live. If these few patterns are good for me, I can live well. If they are bad for me, I can’t. -- Christopher Alexander
Being in bed, having a shower, having breakfast in the kitchen, sitting in my study writing, walking in the garden, cooking and eating our common lunch at my office with my friends, going to the movies, taking my family to eat at a restaurant, going to bed agin. There are a few more.
There are surprisingly few of these patterns of events in any one person’s way of life, perhaps no more than a dozen. Look at your own life and you will find the same. It is shocking at first, to see that there are so few patterns of events open to me.
Not that I want more of them. But when I see how very few of them there are, I begin to understand what huge effect these few patterns have on my life, on my capacity to live. If these few patterns are good for me, I can live well. If they are bad for me, I can’t. -- Christopher Alexander
Some Arab Women Find Freedom in the Skies
A decade ago, unmarried Arab women like Ms. Fathi, working outside their home countries, were rare. But just as young men from poor Arab nations flocked to the oil-rich Persian Gulf states for jobs, more young women are doing so, sociologists say, though no official statistics are kept on how many.Flight attendants have become the public face of the new mobility for some young Arab women, just as they were the face of new freedoms for women in the United States in the 1950s and 1960s. They have become a subject of social anxiety and fascination in much the same way.
Sunday, December 21, 2008
Health Is A Human Right
An editorial on NPR from one of my heroes, Paul Farmer...
I believe in health care as a human right. I've worked as a doctor in many places, and I've seen where to be poor means to be bereft of rights.
I saw early on, still just a medical student, the panicky dead-end faced by so many of the destitute sick: a young woman dying in childbirth; a child writhing in the spasms of a terrible disease for which a vaccine has existed — for more than a century; a friend whose guts were irreparably shredded by bacteria from impure water; an 8 year old caught in cross-fire. Li mouri bet — what a stupid death, goes one Haitian response.
Fighting such "stupid deaths" is never the work of one, or even of a small group. I've had the privilege of joining many others providing medical care to people who would otherwise not be able to get it. The number of those eager to serve is impressive, and so is the amount that can be accomplished. I believe that stupid deaths can be averted; we've done it again and again. But this hard and painful work has never yet been an urgent global priority.
The fight for health as a human right, a fight with real promise, has so far been plagued by failures. Failure because we are chronically short of resources. Failure because we are too often at the mercy of those with the power and money to decide the fates of hundreds of millions. Failure because ill health, as we have learned again and again, is more often than not a symptom of poverty and violence and inequality — and we do little to fight those when we provide just vaccines, or only treatment for one disease or another. Every premature death, and there are millions of these each year, should be considered a rebuke.
I believe in health care as a human right. I've worked as a doctor in many places, and I've seen where to be poor means to be bereft of rights.
I saw early on, still just a medical student, the panicky dead-end faced by so many of the destitute sick: a young woman dying in childbirth; a child writhing in the spasms of a terrible disease for which a vaccine has existed — for more than a century; a friend whose guts were irreparably shredded by bacteria from impure water; an 8 year old caught in cross-fire. Li mouri bet — what a stupid death, goes one Haitian response.
Fighting such "stupid deaths" is never the work of one, or even of a small group. I've had the privilege of joining many others providing medical care to people who would otherwise not be able to get it. The number of those eager to serve is impressive, and so is the amount that can be accomplished. I believe that stupid deaths can be averted; we've done it again and again. But this hard and painful work has never yet been an urgent global priority.
The fight for health as a human right, a fight with real promise, has so far been plagued by failures. Failure because we are chronically short of resources. Failure because we are too often at the mercy of those with the power and money to decide the fates of hundreds of millions. Failure because ill health, as we have learned again and again, is more often than not a symptom of poverty and violence and inequality — and we do little to fight those when we provide just vaccines, or only treatment for one disease or another. Every premature death, and there are millions of these each year, should be considered a rebuke.
Saturday, December 20, 2008
The Madoff Economy
Krugman on those whom out tax dollars are bailing out...
The revelation that Bernard Madoff — brilliant investor (or so almost everyone thought), philanthropist, pillar of the community — was a phony has shocked the world, and understandably so. The scale of his alleged $50 billion Ponzi scheme is hard to comprehend.
Yet surely I’m not the only person to ask the obvious question: How different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole?
The financial services industry has claimed an ever-growing share of the nation’s income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it. And it’s not just a matter of money: the vast riches achieved by those who managed other people’s money have had a corrupting effect on our society as a whole.
Let’s start with those paychecks. Last year, the average salary of employees in “securities, commodity contracts, and investments” was more than four times the average salary in the rest of the economy. Earning a million dollars was nothing special, and even incomes of $20 million or more were fairly common. The incomes of the richest Americans have exploded over the past generation, even as wages of ordinary workers have stagnated; high pay on Wall Street was a major cause of that divergence.
(..)
Think of the way almost everyone important missed the warning signs of an impending crisis. How was that possible? How, for example, could Alan Greenspan have declared, just a few years ago, that “the financial system as a whole has become more resilient” — thanks to derivatives, no less? The answer, I believe, is that there’s an innate tendency on the part of even the elite to idolize men who are making a lot of money, and assume that they know what they’re doing.
The revelation that Bernard Madoff — brilliant investor (or so almost everyone thought), philanthropist, pillar of the community — was a phony has shocked the world, and understandably so. The scale of his alleged $50 billion Ponzi scheme is hard to comprehend.
Yet surely I’m not the only person to ask the obvious question: How different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole?
The financial services industry has claimed an ever-growing share of the nation’s income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it. And it’s not just a matter of money: the vast riches achieved by those who managed other people’s money have had a corrupting effect on our society as a whole.
Let’s start with those paychecks. Last year, the average salary of employees in “securities, commodity contracts, and investments” was more than four times the average salary in the rest of the economy. Earning a million dollars was nothing special, and even incomes of $20 million or more were fairly common. The incomes of the richest Americans have exploded over the past generation, even as wages of ordinary workers have stagnated; high pay on Wall Street was a major cause of that divergence.
(..)
Think of the way almost everyone important missed the warning signs of an impending crisis. How was that possible? How, for example, could Alan Greenspan have declared, just a few years ago, that “the financial system as a whole has become more resilient” — thanks to derivatives, no less? The answer, I believe, is that there’s an innate tendency on the part of even the elite to idolize men who are making a lot of money, and assume that they know what they’re doing.
Friday, December 19, 2008
Greenback slumped on the canvas
Bernanke & Co. on Tuesday signaled to the financial markets that they were hell-bent on pursuing an “inflate or die” approach to rescuing the ailing US economy and fending off the forces of deflation. The Fed is now inflating at a level possibly not seen before by a developed nation since Weimar Germany.
Since the credit crisis started intensifying in July, the dollar benefited from a global flight to safety in US Treasuries and a scramble for dollars to repay USD-denominated debt. The deleveraging process effectively created a short position in the greenback.
But more recently, US-specific worries concerned with public debt expansion and the potential inflationary implications of quantitative easing dawned upon battle-weary investors, causing the dollar to reverse the uptrend that had commenced in July.
The US Dollar Index (i.e. a trade-weighted basket) has not only breached its 50-day moving average convincingly, but seems to be forming a top of at least medium-term significance (see chart below). The fall from grace was brutal with the Index recording its largest six-day decline (from December 10 to 17) ever, setting up an assault on the key 200-day line (often seen as a crude indicator of the primary trend).
Federal Reserve Assets
Amazing...
Here is another look at the Fed's balance sheet (released today). As a reminder, Dallas Fed President Richard Fisher commented in early November that he expected the Fed assets to grow to $3 trillion by the end of this year.
The Federal Reserve assets increased to $2.312 trillion this week.
Note: the graph shows Total Factors Supplying Federal Reserve Funds and is an available series that is close to assets.
Although the assets are still increasing, it looks like Fisher was overly pessimistic - $3 trillion by year end seems less likely now.
Oil's Crash Stirs Unrest in Russia as Slump Hits Home
BARNAUL, Russia -- Russia's oil-fired economic miracle is unraveling as industry shrinks and job losses mount. Now the first stirrings of social unrest have the Kremlin groping for a response.
Gloom deepened over the outlook for oil-export revenue, Russia's main earner, as prices plunged Thursday despite OPEC's move this week to deeply cut production. Oil hit a 4½ year low on anxiety about falling global demand, with crude closing at $36.22 a barrel in New York, down $3.84. This could spell trouble for Russia, which has pegged its 2009 budget on much higher oil prices, meaning it will have to trim spending.
The drop in oil prices is eroding the Kremlin's ability to replenish its gold and foreign-currency reserves just when it needs them most. Although the country's reserves are the world's third-largest behind China and Japan, it has been spending tens of billions of dollars in an attempt to prop up its falling ruble and stave off public panic.
(..)
The Kremlin has tried in state media to downplay the impact of the global financial crisis. Yet popular discontent is growing.
Last weekend, thousands of angry residents in the far eastern city of Vladivostok took to the streets and blocked traffic to protest government plans to raise tariffs on secondhand foreign cars, which are one of the impoverished region's biggest moneymakers. Similar protests have been attempted in Moscow, St. Petersburg and Kaliningrad, and further demonstrations are planned for Sunday in Vladivostok.
Public anger also spilled onto the streets this fall in the Siberian town of Barnaul, as thousands of pensioners who had lost their right to discounted public-transport tickets staged noisy protests.
(..)
The prospect of further unrest poses what could be the biggest challenge yet to the authoritarian system built by Mr. Putin. It also foists a stark choice on the Kremlin: to stifle dissent, or to placate protesters to provide some kind of pressure outlet. For now, the Kremlin has decided on a mixture of both. But the government's options may narrow as its financial reserves shrink.
"They're incredibly scared of this," says Yevgeny Gontmakher, an economic adviser to the Kremlin. "They don't know how to operate in this environment."
Gloom deepened over the outlook for oil-export revenue, Russia's main earner, as prices plunged Thursday despite OPEC's move this week to deeply cut production. Oil hit a 4½ year low on anxiety about falling global demand, with crude closing at $36.22 a barrel in New York, down $3.84. This could spell trouble for Russia, which has pegged its 2009 budget on much higher oil prices, meaning it will have to trim spending.
The drop in oil prices is eroding the Kremlin's ability to replenish its gold and foreign-currency reserves just when it needs them most. Although the country's reserves are the world's third-largest behind China and Japan, it has been spending tens of billions of dollars in an attempt to prop up its falling ruble and stave off public panic.
(..)
The Kremlin has tried in state media to downplay the impact of the global financial crisis. Yet popular discontent is growing.
Last weekend, thousands of angry residents in the far eastern city of Vladivostok took to the streets and blocked traffic to protest government plans to raise tariffs on secondhand foreign cars, which are one of the impoverished region's biggest moneymakers. Similar protests have been attempted in Moscow, St. Petersburg and Kaliningrad, and further demonstrations are planned for Sunday in Vladivostok.
Public anger also spilled onto the streets this fall in the Siberian town of Barnaul, as thousands of pensioners who had lost their right to discounted public-transport tickets staged noisy protests.
(..)
The prospect of further unrest poses what could be the biggest challenge yet to the authoritarian system built by Mr. Putin. It also foists a stark choice on the Kremlin: to stifle dissent, or to placate protesters to provide some kind of pressure outlet. For now, the Kremlin has decided on a mixture of both. But the government's options may narrow as its financial reserves shrink.
"They're incredibly scared of this," says Yevgeny Gontmakher, an economic adviser to the Kremlin. "They don't know how to operate in this environment."
THE RECKONING
These are the folks our tax dollars are bailing out....Who is Congress representing? Not only are we bailing out these wall street tycoons, but with a currency that is woth substanitally less thanks to Bush-Paulsen--Bernanke monetizing our debt...
For Dow Kim, 2006 was a very good year. While his salary at Merrill Lynch was $350,000, his total compensation was 100 times that — $35 million.
The difference between the two amounts was his bonus, a rich reward for the robust earnings made by the traders he oversaw in Merrill’s mortgage business.
Mr. Kim’s colleagues, not only at his level, but far down the ranks, also pocketed large paychecks. In all, Merrill handed out $5 billion to $6 billion in bonuses that year. A 20-something analyst with a base salary of $130,000 collected a bonus of $250,000. And a 30-something trader with a $180,000 salary got $5 million.
But Merrill’s record earnings in 2006 — $7.5 billion — turned out to be a mirage. The company has since lost three times that amount, largely because the mortgage investments that supposedly had powered some of those profits plunged in value.
Unlike the earnings, however, the bonuses have not been reversed.
(..)
For Wall Street, much of this decade represented a new Gilded Age. Salaries were merely play money — a pittance compared to bonuses. Bonus season became an annual celebration of the riches to be had in the markets. That was especially so in the New York area, where nearly $1 out of every $4 that companies paid employees last year went to someone in the financial industry. Bankers celebrated with five-figure dinners, vied to outspend each other at charity auctions and spent their newfound fortunes on new homes, cars and art.
The bonanza redefined success for an entire generation. Graduates of top universities sought their fortunes in banking, rather than in careers like medicine, engineering or teaching. Wall Street worked its rookies hard, but it held out the promise of rich rewards. In college dorms, tales of 30-year-olds pulling down $5 million a year were legion.
While top executives received the biggest bonuses, what is striking is how many employees throughout the ranks took home large paychecks. On Wall Street, the first goal was to make “a buck” — a million dollars. More than 100 people in Merrill’s bond unit alone broke the million-dollar mark in 2006. Goldman Sachs paid more than $20 million apiece to more than 50 people that year, according to a person familiar with the matter. Goldman declined to comment.
For Dow Kim, 2006 was a very good year. While his salary at Merrill Lynch was $350,000, his total compensation was 100 times that — $35 million.
The difference between the two amounts was his bonus, a rich reward for the robust earnings made by the traders he oversaw in Merrill’s mortgage business.
Mr. Kim’s colleagues, not only at his level, but far down the ranks, also pocketed large paychecks. In all, Merrill handed out $5 billion to $6 billion in bonuses that year. A 20-something analyst with a base salary of $130,000 collected a bonus of $250,000. And a 30-something trader with a $180,000 salary got $5 million.
But Merrill’s record earnings in 2006 — $7.5 billion — turned out to be a mirage. The company has since lost three times that amount, largely because the mortgage investments that supposedly had powered some of those profits plunged in value.
Unlike the earnings, however, the bonuses have not been reversed.
(..)
For Wall Street, much of this decade represented a new Gilded Age. Salaries were merely play money — a pittance compared to bonuses. Bonus season became an annual celebration of the riches to be had in the markets. That was especially so in the New York area, where nearly $1 out of every $4 that companies paid employees last year went to someone in the financial industry. Bankers celebrated with five-figure dinners, vied to outspend each other at charity auctions and spent their newfound fortunes on new homes, cars and art.
The bonanza redefined success for an entire generation. Graduates of top universities sought their fortunes in banking, rather than in careers like medicine, engineering or teaching. Wall Street worked its rookies hard, but it held out the promise of rich rewards. In college dorms, tales of 30-year-olds pulling down $5 million a year were legion.
While top executives received the biggest bonuses, what is striking is how many employees throughout the ranks took home large paychecks. On Wall Street, the first goal was to make “a buck” — a million dollars. More than 100 people in Merrill’s bond unit alone broke the million-dollar mark in 2006. Goldman Sachs paid more than $20 million apiece to more than 50 people that year, according to a person familiar with the matter. Goldman declined to comment.
Thursday, December 18, 2008
The Real Price of Gold
Fascinating article on Gold from National Geographic...
Like many of his Inca ancestors, Juan Apaza is possessed by gold. Descending into an icy tunnel 17,000 feet up in the Peruvian Andes, the 44-year-old miner stuffs a wad of coca leaves into his mouth to brace himself for the inevitable hunger and fatigue. For 30 days each month Apaza toils, without pay, deep inside this mine dug down under a glacier above the world's highest town, La Rinconada. For 30 days he faces the dangers that have killed many of his fellow miners—explosives, toxic gases, tunnel collapses—to extract the gold that the world demands. Apaza does all this, without pay, so that he can make it to today, the 31st day, when he and his fellow miners are given a single shift, four hours or maybe a little more, to haul out and keep as much rock as their weary shoulders can bear. Under the ancient lottery system that still prevails in the high Andes, known as the cachorreo, this is what passes for a paycheck: a sack of rocks that may contain a small fortune in gold or, far more often, very little at all.
Apaza is still waiting for a stroke of luck. "Maybe today will be the big one," he says, flashing a smile that reveals a single gold tooth. To improve his odds, the miner has already made his "payment to the Earth": a bottle of pisco, the local liquor, placed near the mouth of the mine; a few coca leaves slipped under a rock; and, several months back, a rooster sacrificed by a shaman on the sacred mountaintop. Now, heading into the tunnel, he mumbles a prayer in his native Quechua language to the deity who rules the mountain and all the gold within.
(..)
No single element has tantalized and tormented the human imagination more than the shimmering metal known by the chemical symbol Au. For thousands of years the desire to possess gold has driven people to extremes, fueling wars and conquests, girding empires and currencies, leveling mountains and forests. Gold is not vital to human existence; it has, in fact, relatively few practical uses. Yet its chief virtues—its unusual density and malleability along with its imperishable shine—have made it one of the world's most coveted commodities, a transcendent symbol of beauty, wealth, and immortality. From pharaohs (who insisted on being buried in what they called the "flesh of the gods") to the forty-niners (whose mad rush for the mother lode built the American West) to the financiers (who, following Sir Isaac Newton's advice, made it the bedrock of the global economy): Nearly every society through the ages has invested gold with an almost mythological power.
Humankind's feverish attachment to gold shouldn't have survived the modern world. Few cultures still believe that gold can give eternal life, and every country in the world—the United States was last, in 1971—has done away with the gold standard, which John Maynard Keynes famously derided as "a barbarous relic." But gold's luster not only endures; fueled by global uncertainty, it grows stronger. The price of gold, which stood at $271 an ounce on September 10, 2001, hit $1,023 in March 2008, and it may surpass that threshold again. Aside from extravagance, gold is also reprising its role as a safe haven in perilous times. Gold's recent surge, sparked in part by the terrorist attack on 9/11, has been amplified by the slide of the U.S. dollar and jitters over a looming global recession. In 2007 demand outstripped mine production by 59 percent. "Gold has always had this kind of magic," says Peter L. Bernstein, author of The Power of Gold. "But it's never been clear if we have gold—or gold has us."
Like many of his Inca ancestors, Juan Apaza is possessed by gold. Descending into an icy tunnel 17,000 feet up in the Peruvian Andes, the 44-year-old miner stuffs a wad of coca leaves into his mouth to brace himself for the inevitable hunger and fatigue. For 30 days each month Apaza toils, without pay, deep inside this mine dug down under a glacier above the world's highest town, La Rinconada. For 30 days he faces the dangers that have killed many of his fellow miners—explosives, toxic gases, tunnel collapses—to extract the gold that the world demands. Apaza does all this, without pay, so that he can make it to today, the 31st day, when he and his fellow miners are given a single shift, four hours or maybe a little more, to haul out and keep as much rock as their weary shoulders can bear. Under the ancient lottery system that still prevails in the high Andes, known as the cachorreo, this is what passes for a paycheck: a sack of rocks that may contain a small fortune in gold or, far more often, very little at all.
Apaza is still waiting for a stroke of luck. "Maybe today will be the big one," he says, flashing a smile that reveals a single gold tooth. To improve his odds, the miner has already made his "payment to the Earth": a bottle of pisco, the local liquor, placed near the mouth of the mine; a few coca leaves slipped under a rock; and, several months back, a rooster sacrificed by a shaman on the sacred mountaintop. Now, heading into the tunnel, he mumbles a prayer in his native Quechua language to the deity who rules the mountain and all the gold within.
(..)
No single element has tantalized and tormented the human imagination more than the shimmering metal known by the chemical symbol Au. For thousands of years the desire to possess gold has driven people to extremes, fueling wars and conquests, girding empires and currencies, leveling mountains and forests. Gold is not vital to human existence; it has, in fact, relatively few practical uses. Yet its chief virtues—its unusual density and malleability along with its imperishable shine—have made it one of the world's most coveted commodities, a transcendent symbol of beauty, wealth, and immortality. From pharaohs (who insisted on being buried in what they called the "flesh of the gods") to the forty-niners (whose mad rush for the mother lode built the American West) to the financiers (who, following Sir Isaac Newton's advice, made it the bedrock of the global economy): Nearly every society through the ages has invested gold with an almost mythological power.
Humankind's feverish attachment to gold shouldn't have survived the modern world. Few cultures still believe that gold can give eternal life, and every country in the world—the United States was last, in 1971—has done away with the gold standard, which John Maynard Keynes famously derided as "a barbarous relic." But gold's luster not only endures; fueled by global uncertainty, it grows stronger. The price of gold, which stood at $271 an ounce on September 10, 2001, hit $1,023 in March 2008, and it may surpass that threshold again. Aside from extravagance, gold is also reprising its role as a safe haven in perilous times. Gold's recent surge, sparked in part by the terrorist attack on 9/11, has been amplified by the slide of the U.S. dollar and jitters over a looming global recession. In 2007 demand outstripped mine production by 59 percent. "Gold has always had this kind of magic," says Peter L. Bernstein, author of The Power of Gold. "But it's never been clear if we have gold—or gold has us."
Analyses of the Financial Meltdown from the Financial Times
Worst financial crisis in 60 years marks end of an era...from George Soros:
Every time the credit expansion ran into trouble the financial authorities intervened, injecting liquidity and finding other ways to stimulate the economy. That created a system of asymmetric incentives also known as moral hazard, which encouraged ever greater credit expansion. It was so successful that people came to believe in what former US president Ronald Reagan called the magic of the marketplace and I call market fundamentalism.
Fundamentalists believe that markets tend towards equilibrium and the common interest is best served by allowing participants to pursue their self-interest. It is an obvious misconception, because it was the intervention of the authorities that prevented financial markets from breaking down, not the markets But market fundamentalism emerged as the dominant ideology in the 1980s, when financial markets started to become globalised and the US started to run a current account deficit.
Globalisation allowed the US to suck up the savings of the rest of the world and consume more than it produced. The US current account deficit reached 6.2 per cent of gross national product in 2006. The financial markets encouraged consumers to borrow by introducing ever more sophisticated instruments and more generous terms. The authorities aided and abetted the process by intervening whenever the global financial system was at risk. Since 1980, regulations have been progressively relaxed until they have practically disappeared.
The super-boom got out of hand when the new products became so complicated that the authorities could no longer calculate the risks and started relying on the risk management methods of the banks themselves. Similarly, the rating agencies relied on information from originators of synthetic products. It was a shocking abdication of responsibility.
and from Niall Feguson, whose book, "The Ascent of Money" is a fascinating read...
How a local Squall became a Global Tempest..
The phrase “perfect storm” has been trotted out once too often to characterise the past year’s financial crisis. Yet the real perfect storm may still lie ahead.
Every time the credit expansion ran into trouble the financial authorities intervened, injecting liquidity and finding other ways to stimulate the economy. That created a system of asymmetric incentives also known as moral hazard, which encouraged ever greater credit expansion. It was so successful that people came to believe in what former US president Ronald Reagan called the magic of the marketplace and I call market fundamentalism.
Fundamentalists believe that markets tend towards equilibrium and the common interest is best served by allowing participants to pursue their self-interest. It is an obvious misconception, because it was the intervention of the authorities that prevented financial markets from breaking down, not the markets But market fundamentalism emerged as the dominant ideology in the 1980s, when financial markets started to become globalised and the US started to run a current account deficit.
Globalisation allowed the US to suck up the savings of the rest of the world and consume more than it produced. The US current account deficit reached 6.2 per cent of gross national product in 2006. The financial markets encouraged consumers to borrow by introducing ever more sophisticated instruments and more generous terms. The authorities aided and abetted the process by intervening whenever the global financial system was at risk. Since 1980, regulations have been progressively relaxed until they have practically disappeared.
The super-boom got out of hand when the new products became so complicated that the authorities could no longer calculate the risks and started relying on the risk management methods of the banks themselves. Similarly, the rating agencies relied on information from originators of synthetic products. It was a shocking abdication of responsibility.
and from Niall Feguson, whose book, "The Ascent of Money" is a fascinating read...
How a local Squall became a Global Tempest..
The phrase “perfect storm” has been trotted out once too often to characterise the past year’s financial crisis. Yet the real perfect storm may still lie ahead.
Quote of the Day
Happiness is not a brilliant climax to years of grim struggle and anxiety. It is a long succession of little decisions simply to be happy in the moment.
-- J. Donald Walters
From RevShark at Realmoney.com
-- J. Donald Walters
From RevShark at Realmoney.com
Tuesday, December 16, 2008
Colonoscopies Miss Many Cancers, Study Finds
Then, last spring, researchers reported the test may miss a type of polyp, a flat lesion or an indented one that nestles against the colon wall. And now, a Canadian study, published Tuesday in the journal Annals of Internal Medicine, found the test, while still widely recommended, was much less accurate than anyone expected.
In the new study, the test missed just about every cancer in the right side of the colon, where cancers are harder to detect but about 40 percent arise. And it also missed roughly a third of cancers in the left side of the colon.
Instead of preventing 90 percent of cancers, as some doctors have told patients, colonoscopies might actually prevent more like 60 percent to 70 percent.
In the new study, the test missed just about every cancer in the right side of the colon, where cancers are harder to detect but about 40 percent arise. And it also missed roughly a third of cancers in the left side of the colon.
Instead of preventing 90 percent of cancers, as some doctors have told patients, colonoscopies might actually prevent more like 60 percent to 70 percent.
Monday, December 15, 2008
Friday, December 12, 2008
White House considers auto rescue
So Congress vetoes the auto bailout in large part because of the unwillingness of the autoworkers to accept non-union wages, and Pres. Bush is going to find a way to rescue these losing enterprises with tax payer dollars...again I ask--Can people please stop accusing President Elect Obama a socialist.
Under the Bush administration, an 8 trillion dollar bailout with taxpayer dollars is being enacted to "rescue" those such as Merrill Lynch CEO, Mr. Thain, trying to still claim a 10 million dollar bonus; and auto executives who come begging from money in their private jets...And thanks to the the Feds monetizing of the debt, whatever dollars the taxpayers have left after bailing out these wealthy folks, will be worth substantially less...Years of savings have been wiped out thanks to Paulson/Bernacke/and Bush's recent monetary actions (imho)...
The White House says it is considering using money earmarked to rescue the US banking industry to bail out the country's struggling carmakers.
Employment Falling off a Cliff
Two posts from Paul Krugman's blog on employment...
Terrible employment numbers from Dec 6
The chart above shows the employment-population ratio, the ratio of employed Americans to the adult population. By this measure it’s been a weak economy all along — and now it’s falling off a cliff.
From Dec. 11...
Nosedive
Another day, another terrifying economic report, this time on unemployment claims.
So are we now losing jobs at the rate of 600,000 a month? 700,000? If fiscal expansion takes, say, 8 months to kick in (and that’s optimistic), where will that leave us?
Wednesday, December 10, 2008
Capitalist Fools
From Nobel Prize Winning Economist Joseph Stiglitz...
(via Barry Ritholtz blog)
Behind the debate over remaking U.S. financial policy will be a debate over who’s to blame. It’s crucial to get the history right, writes a Nobel-laureate economist, identifying five key mistakes—under Reagan, Clinton, and Bush II—and one national delusion.
(..)
What were the critical decisions that led to the crisis? Mistakes were made at every fork in the road—we had what engineers call a “system failure,” when not a single decision but a cascade of decisions produce a tragic result. Let’s look at five key moments.
(..)
No. 1: Firing the Chairman
In 1987 the Reagan administration decided to remove Paul Volcker as chairman of the Federal Reserve Board and appoint Alan Greenspan in his place. Volcker had done what central bankers are supposed to do. On his watch, inflation had been brought down from more than 11 percent to under 4 percent. In the world of central banking, that should have earned him a grade of A+++ and assured his re-appointment. But Volcker also understood that financial markets need to be regulated. Reagan wanted someone who did not believe any such thing, and he found him in a devotee of the objectivist philosopher and free-market zealot Ayn Rand.
Greenspan played a double role. The Fed controls the money spigot, and in the early years of this decade, he turned it on full force. But the Fed is also a regulator. If you appoint an anti-regulator as your enforcer, you know what kind of enforcement you’ll get. A flood of liquidity combined with the failed levees of regulation proved disastrous.
(..)
No. 2: Tearing Down the Walls
The deregulation philosophy would pay unwelcome dividends for years to come. In November 1999, Congress repealed the Glass-Steagall Act—the culmination of a $300 million lobbying effort by the banking and financial-services industries, and spearheaded in Congress by Senator Phil Gramm. Glass-Steagall had long separated commercial banks (which lend money) and investment banks (which organize the sale of bonds and equities); it had been enacted in the aftermath of the Great Depression and was meant to curb the excesses of that era, including grave conflicts of interest.
(..)
As we stripped back the old regulations, we did nothing to address the new challenges posed by 21st-century markets. The most important challenge was that posed by derivatives. In 1998 the head of the Commodity Futures Trading Commission, Brooksley Born, had called for such regulation—a concern that took on urgency after the Fed, in that same year, engineered the bailout of Long-Term Capital Management, a hedge fund whose trillion-dollar-plus failure threatened global financial markets. But Secretary of the Treasury Robert Rubin, his deputy, Larry Summers, and Greenspan were adamant—and successful—in their opposition. Nothing was done.
(..)
No. 3: Applying the Leeches
Then along came the Bush tax cuts, enacted first on June 7, 2001, with a follow-on installment two years later. The president and his advisers seemed to believe that tax cuts, especially for upper-income Americans and corporations, were a cure-all for any economic disease—the modern-day equivalent of leeches. The tax cuts played a pivotal role in shaping the background conditions of the current crisis. Because they did very little to stimulate the economy, real stimulation was left to the Fed, which took up the task with unprecedented low-interest rates and liquidity. The war in Iraq made matters worse, because it led to soaring oil prices. With America so dependent on oil imports, we had to spend several hundred billion more to purchase oil—money that otherwise would have been spent on American goods. Normally this would have led to an economic slowdown, as it had in the 1970s. But the Fed met the challenge in the most myopic way imaginable. The flood of liquidity made money readily available in mortgage markets, even to those who would normally not be able to borrow. And, yes, this succeeded in forestalling an economic downturn; America’s household saving rate plummeted to zero. But it should have been clear that we were living on borrowed money and borrowed time.
(..)
No. 4: Faking the Numbers
Meanwhile, on July 30, 2002, in the wake of a series of major scandals—notably the collapse of WorldCom and Enron—Congress passed the Sarbanes-Oxley Act. The scandals had involved every major American accounting firm, most of our banks, and some of our premier companies, and made it clear that we had serious problems with our accounting system. Accounting is a sleep-inducing topic for most people, but if you can’t have faith in a company’s numbers, then you can’t have faith in anything about a company at all. Unfortunately, in the negotiations over what became Sarbanes-Oxley a decision was made not to deal with what many, including the respected former head of the S.E.C. Arthur Levitt, believed to be a fundamental underlying problem: stock options. Stock options have been defended as providing healthy incentives toward good management, but in fact they are “incentive pay” in name only.
(..)
No. 5: Letting It Bleed
The final turning point came with the passage of a bailout package on October 3, 2008—that is, with the administration’s response to the crisis itself. We will be feeling the consequences for years to come. Both the administration and the Fed had long been driven by wishful thinking, hoping that the bad news was just a blip, and that a return to growth was just around the corner. As America’s banks faced collapse, the administration veered from one course of action to another. Some institutions (Bear Stearns, A.I.G., Fannie Mae, Freddie Mac) were bailed out. Lehman Brothers was not. Some shareholders got something back. Others did not.
(..)
The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal. Looking back at that belief during hearings this fall on Capitol Hill, Alan Greenspan said out loud, “I have found a flaw.” Congressman Henry Waxman pushed him, responding, “In other words, you found that your view of the world, your ideology, was not right; it was not working.” “Absolutely, precisely,” Greenspan said. The embrace by America—and much of the rest of the world—of this flawed economic philosophy made it inevitable that we would eventually arrive at the place we are today.
(via Barry Ritholtz blog)
Behind the debate over remaking U.S. financial policy will be a debate over who’s to blame. It’s crucial to get the history right, writes a Nobel-laureate economist, identifying five key mistakes—under Reagan, Clinton, and Bush II—and one national delusion.
(..)
What were the critical decisions that led to the crisis? Mistakes were made at every fork in the road—we had what engineers call a “system failure,” when not a single decision but a cascade of decisions produce a tragic result. Let’s look at five key moments.
(..)
No. 1: Firing the Chairman
In 1987 the Reagan administration decided to remove Paul Volcker as chairman of the Federal Reserve Board and appoint Alan Greenspan in his place. Volcker had done what central bankers are supposed to do. On his watch, inflation had been brought down from more than 11 percent to under 4 percent. In the world of central banking, that should have earned him a grade of A+++ and assured his re-appointment. But Volcker also understood that financial markets need to be regulated. Reagan wanted someone who did not believe any such thing, and he found him in a devotee of the objectivist philosopher and free-market zealot Ayn Rand.
Greenspan played a double role. The Fed controls the money spigot, and in the early years of this decade, he turned it on full force. But the Fed is also a regulator. If you appoint an anti-regulator as your enforcer, you know what kind of enforcement you’ll get. A flood of liquidity combined with the failed levees of regulation proved disastrous.
(..)
No. 2: Tearing Down the Walls
The deregulation philosophy would pay unwelcome dividends for years to come. In November 1999, Congress repealed the Glass-Steagall Act—the culmination of a $300 million lobbying effort by the banking and financial-services industries, and spearheaded in Congress by Senator Phil Gramm. Glass-Steagall had long separated commercial banks (which lend money) and investment banks (which organize the sale of bonds and equities); it had been enacted in the aftermath of the Great Depression and was meant to curb the excesses of that era, including grave conflicts of interest.
(..)
As we stripped back the old regulations, we did nothing to address the new challenges posed by 21st-century markets. The most important challenge was that posed by derivatives. In 1998 the head of the Commodity Futures Trading Commission, Brooksley Born, had called for such regulation—a concern that took on urgency after the Fed, in that same year, engineered the bailout of Long-Term Capital Management, a hedge fund whose trillion-dollar-plus failure threatened global financial markets. But Secretary of the Treasury Robert Rubin, his deputy, Larry Summers, and Greenspan were adamant—and successful—in their opposition. Nothing was done.
(..)
No. 3: Applying the Leeches
Then along came the Bush tax cuts, enacted first on June 7, 2001, with a follow-on installment two years later. The president and his advisers seemed to believe that tax cuts, especially for upper-income Americans and corporations, were a cure-all for any economic disease—the modern-day equivalent of leeches. The tax cuts played a pivotal role in shaping the background conditions of the current crisis. Because they did very little to stimulate the economy, real stimulation was left to the Fed, which took up the task with unprecedented low-interest rates and liquidity. The war in Iraq made matters worse, because it led to soaring oil prices. With America so dependent on oil imports, we had to spend several hundred billion more to purchase oil—money that otherwise would have been spent on American goods. Normally this would have led to an economic slowdown, as it had in the 1970s. But the Fed met the challenge in the most myopic way imaginable. The flood of liquidity made money readily available in mortgage markets, even to those who would normally not be able to borrow. And, yes, this succeeded in forestalling an economic downturn; America’s household saving rate plummeted to zero. But it should have been clear that we were living on borrowed money and borrowed time.
(..)
No. 4: Faking the Numbers
Meanwhile, on July 30, 2002, in the wake of a series of major scandals—notably the collapse of WorldCom and Enron—Congress passed the Sarbanes-Oxley Act. The scandals had involved every major American accounting firm, most of our banks, and some of our premier companies, and made it clear that we had serious problems with our accounting system. Accounting is a sleep-inducing topic for most people, but if you can’t have faith in a company’s numbers, then you can’t have faith in anything about a company at all. Unfortunately, in the negotiations over what became Sarbanes-Oxley a decision was made not to deal with what many, including the respected former head of the S.E.C. Arthur Levitt, believed to be a fundamental underlying problem: stock options. Stock options have been defended as providing healthy incentives toward good management, but in fact they are “incentive pay” in name only.
(..)
No. 5: Letting It Bleed
The final turning point came with the passage of a bailout package on October 3, 2008—that is, with the administration’s response to the crisis itself. We will be feeling the consequences for years to come. Both the administration and the Fed had long been driven by wishful thinking, hoping that the bad news was just a blip, and that a return to growth was just around the corner. As America’s banks faced collapse, the administration veered from one course of action to another. Some institutions (Bear Stearns, A.I.G., Fannie Mae, Freddie Mac) were bailed out. Lehman Brothers was not. Some shareholders got something back. Others did not.
(..)
The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal. Looking back at that belief during hearings this fall on Capitol Hill, Alan Greenspan said out loud, “I have found a flaw.” Congressman Henry Waxman pushed him, responding, “In other words, you found that your view of the world, your ideology, was not right; it was not working.” “Absolutely, precisely,” Greenspan said. The embrace by America—and much of the rest of the world—of this flawed economic philosophy made it inevitable that we would eventually arrive at the place we are today.
How to Pay for National Health Insurance
From economist Barry Ritholtz...
Since the government has spent such an inordinate amount of taxpayer money cleaning up after the Wall Street ne’er-do-wells and the giant mess they made, there is not a whole lot of money left over for other projects.
Once such legislative work was National Health Insurance. Surveys have shown that a significant majority of Americans support this. It was one of the key planks that President-elect Barack Obama ran on.
Well, no worries over the lack of funding for health care. I have figured out a simple way to insure that every man woman and child int he US is covered by health care insurance. I took a page from the cleverest of the financial engineers on Wall Street, and all it took was a little of that street magic and derivative-based hocus pocus.
It goes something like this:
1. Set up a large, well capitalized hedge fund. About $5B should do it.
2. The prospectus of the fund should note its purpose is to “Seek out profit opportunities via arbitraging inefficiencies in the markets and health care system of the United States.” Include standard “Socially Conscious” fund language in clauses such as Do well by doing good.
3. Launch the fund — and promptly max out your leverage. Today’s environment makes it difficult to go 50 to 1, but getting 10 or 20 to 1 should not be much problem.
4. Use the money to write Credit Default Swaps with a notational value of $3 trillion dollars. The premia on these CDS should be about 10-15% or so.
5. Rollover the cash premiums — about $350 billion dollars worth — into a national fund. Use it to buy health care insurance for all US citizens.
6. Declare that due to current credit conditions, your unfortunately must announce to your counter-parties that you will be defaulting on these CDS. Note that significant amounts of this paper are held by JP Morgan and Citi. Another trillion is held by China and Japan, with Sovereign Wealth Funds owning the rest.
7. Send out a press release announcing “systemic risk.” Tell the Treasury Secretary and the Federal Reserve Chief that your imminent collapse will wreak global havoc. Apply for bailout.
Congratulations! You have National Health Care!
Repeat for any major government program: Alternative energy, School Vouchers, Mars Mission, Global warming, Missile Defense Shild, etc.
Note: This is how all government spending programs will be funded in the future.
Since the government has spent such an inordinate amount of taxpayer money cleaning up after the Wall Street ne’er-do-wells and the giant mess they made, there is not a whole lot of money left over for other projects.
Once such legislative work was National Health Insurance. Surveys have shown that a significant majority of Americans support this. It was one of the key planks that President-elect Barack Obama ran on.
Well, no worries over the lack of funding for health care. I have figured out a simple way to insure that every man woman and child int he US is covered by health care insurance. I took a page from the cleverest of the financial engineers on Wall Street, and all it took was a little of that street magic and derivative-based hocus pocus.
It goes something like this:
1. Set up a large, well capitalized hedge fund. About $5B should do it.
2. The prospectus of the fund should note its purpose is to “Seek out profit opportunities via arbitraging inefficiencies in the markets and health care system of the United States.” Include standard “Socially Conscious” fund language in clauses such as Do well by doing good.
3. Launch the fund — and promptly max out your leverage. Today’s environment makes it difficult to go 50 to 1, but getting 10 or 20 to 1 should not be much problem.
4. Use the money to write Credit Default Swaps with a notational value of $3 trillion dollars. The premia on these CDS should be about 10-15% or so.
5. Rollover the cash premiums — about $350 billion dollars worth — into a national fund. Use it to buy health care insurance for all US citizens.
6. Declare that due to current credit conditions, your unfortunately must announce to your counter-parties that you will be defaulting on these CDS. Note that significant amounts of this paper are held by JP Morgan and Citi. Another trillion is held by China and Japan, with Sovereign Wealth Funds owning the rest.
7. Send out a press release announcing “systemic risk.” Tell the Treasury Secretary and the Federal Reserve Chief that your imminent collapse will wreak global havoc. Apply for bailout.
Congratulations! You have National Health Care!
Repeat for any major government program: Alternative energy, School Vouchers, Mars Mission, Global warming, Missile Defense Shild, etc.
Note: This is how all government spending programs will be funded in the future.
Monday, December 08, 2008
Gold Buyers Smash Records
Gold demand has in fact exploded, and not just here and there. Everywhere. Around the world, customers have been queuing up to strip coin shops' shelves bare. Mints have been running 24/7 and still have been forced to ration coin shipments to their dealers. ETF vaults are bulging.
Now, the World Gold Council has confirmed the trend with hard numbers for the third quarter of this year. In a page-and-a-half press release summarizing 3Q2008 activity, the WGC had to use the word "record" ten times. Some highlights:
*
Dollar demand for gold in Q3 was a record US$32 billion, 45% higher than the previous record, set in 2Q2008.
*
Identifiable investment demand, which incorporates demand for gold through exchange-traded funds (ETFs), bars and coins, rose to $10.7 billion (12.3 million ounces), double year-earlier levels.
*
Retail investment demand rose 121% to 7.5 million ounces, with strong bar and coin buying in the Swiss, German, and U.S. markets. Europe as a whole saw an all-time record 1.64 million ounces of bar and coin buying. France became a net investor in gold for the first time since the early 1980s.
*
Gold ETFs posted a record quarterly inflow of 4.8 million ounces in Q3. After the collapse of Lehman Brothers in late September, ETF inflows shot higher by an unprecedented 3.6 million ounces in only five days.
*
Demand for gold jewelry hit a record $18 billion. Leading the way was India, which witnessed a rise of 65% in dollar value (1.3 million ounces) compared with 3Q2007. The Middle East, Indonesia, and China all experienced increases of more than 40% in value or 10% in weight, year over year.
Now, the World Gold Council has confirmed the trend with hard numbers for the third quarter of this year. In a page-and-a-half press release summarizing 3Q2008 activity, the WGC had to use the word "record" ten times. Some highlights:
*
Dollar demand for gold in Q3 was a record US$32 billion, 45% higher than the previous record, set in 2Q2008.
*
Identifiable investment demand, which incorporates demand for gold through exchange-traded funds (ETFs), bars and coins, rose to $10.7 billion (12.3 million ounces), double year-earlier levels.
*
Retail investment demand rose 121% to 7.5 million ounces, with strong bar and coin buying in the Swiss, German, and U.S. markets. Europe as a whole saw an all-time record 1.64 million ounces of bar and coin buying. France became a net investor in gold for the first time since the early 1980s.
*
Gold ETFs posted a record quarterly inflow of 4.8 million ounces in Q3. After the collapse of Lehman Brothers in late September, ETF inflows shot higher by an unprecedented 3.6 million ounces in only five days.
*
Demand for gold jewelry hit a record $18 billion. Leading the way was India, which witnessed a rise of 65% in dollar value (1.3 million ounces) compared with 3Q2007. The Middle East, Indonesia, and China all experienced increases of more than 40% in value or 10% in weight, year over year.
Sunday, December 07, 2008
Briefing: Holding on to happiness in hard times
With economists projecting a gloomy Christmas and an even gloomier 2009, new research offers clues into how a dispirited nation can hold on to some optimism. Is there a cure for the blues?
(..)
Even within a robust, sometimes shaky system of capitalism, psychologists believe that increased happiness is attainable. Distilled to its most basic level, positive psychology encourages people to strive for “mindfulness”—living in the moment, recognizing the beauty of nature, and appreciating the positive aspects of our lives. Research has also shown that happiness is enhanced by optimism; religious faith; acts of generosity and altruism such as community service; and work or hobbies that produce a frequent experience of “flow’’—a state of total engagement.
(..)
Even within a robust, sometimes shaky system of capitalism, psychologists believe that increased happiness is attainable. Distilled to its most basic level, positive psychology encourages people to strive for “mindfulness”—living in the moment, recognizing the beauty of nature, and appreciating the positive aspects of our lives. Research has also shown that happiness is enhanced by optimism; religious faith; acts of generosity and altruism such as community service; and work or hobbies that produce a frequent experience of “flow’’—a state of total engagement.
Friday, December 05, 2008
Does More Sleep Make for Better Doctors?
I have to agree with Dr. Pauline Chen in her concerns over limiting residency hours. Ophthalmology took over "my life" during my residency. It was as exhilirating as it was tiring...
Then I went and spent 8 years overseas, where I worked even harder than during my residency...
As Malcolm Gladwell points out in his most recent book, "The Outliers,"one needs 10,000 hours to be world class in any skill. I got that in my residency and overseas experience I feel...
This week a national panel of health care experts released a report affirming the current mandate that limits the workweek for medical residents to 80 hours and offering additional recommendations to decrease fatigue for doctors-in-training.
(..)
Residency training, the three to seven or more years following medical school, has historically been the most intense period of a doctor’s professional life. In teaching hospitals and large academic medical centers across the country, freshly minted doctors balance learning myriad clinical skills with serving on the clinical front line. Residents are often the first doctors to see a patient in the admission process and in hospital emergencies. And up until relatively recently, they shouldered these responsibilities while working 110 hours a week or more.
I finished my general surgery training in 1998, five years before the national accrediting organization for residency programs set a limit of 80 hours per workweek for residents across the country. I worked on average 110 to 120 hours per week and had my share of being on call every other night. Like many of my peers, I know about fatigue so overpowering that the odor from your pores smells not like nervousness or exertion but exhaustion. I have experienced the teeth-chattering chill of the early morning, which never leaves despite two layers of clothing, a sweatshirt and a doctor’s coat. I remember that falling asleep at 5 a.m. for an hour before rounds does more harm than good. And I can tell you that a quick but well-timed morning shower after being up all night is the physiological equivalent of a two-hour nap.
This is not the kind of wisdom or experience I think anyone should ever have.
But I can also say that I, like many of my peers, had unparalleled experiences and freedom in residency because our time with patients was not restricted. And a part of me, I have to admit, feels badly for the young doctors and future patients who may not have a chance for the same because of the way we choose to address the problem of resident fatigue.
Strangers May Cheer You Up, Study Says
How happy you are may depend on how happy your friends’ friends’ friends are, even if you don’t know them at all.
And a cheery next-door neighbor has more effect on your happiness than your spouse’s mood.
So says a new study that followed a large group of people for 20 years — happiness is more contagious than previously thought.
“Your happiness depends not just on your choices and actions, but also on the choices and actions of people you don’t even know who are one, two and three degrees removed from you,” said Dr. Nicholas A. Christakis, a physician and social scientist at Harvard Medical School and an author of the study, to be published Friday in BMJ, a British journal. “There’s kind of an emotional quiet riot that occurs and takes on a life of its own, that people themselves may be unaware of. Emotions have a collective existence — they are not just an individual phenomenon.”
In fact, said his co-author, James H. Fowler, an associate professor of political science at University of California, San Diego, their research found that “if your friend’s friend’s friend becomes happy, that has a bigger impact on you being happy than putting an extra $5,000 in your pocket.”
And a cheery next-door neighbor has more effect on your happiness than your spouse’s mood.
So says a new study that followed a large group of people for 20 years — happiness is more contagious than previously thought.
“Your happiness depends not just on your choices and actions, but also on the choices and actions of people you don’t even know who are one, two and three degrees removed from you,” said Dr. Nicholas A. Christakis, a physician and social scientist at Harvard Medical School and an author of the study, to be published Friday in BMJ, a British journal. “There’s kind of an emotional quiet riot that occurs and takes on a life of its own, that people themselves may be unaware of. Emotions have a collective existence — they are not just an individual phenomenon.”
In fact, said his co-author, James H. Fowler, an associate professor of political science at University of California, San Diego, their research found that “if your friend’s friend’s friend becomes happy, that has a bigger impact on you being happy than putting an extra $5,000 in your pocket.”
Thursday, December 04, 2008
Strangers May Cheer You Up, Study Says
How happy you are may depend on how happy your friends’ friends’ friends are, even if you don’t know them at all.
And a cheery next-door neighbor has more effect on your happiness than your spouse’s mood.
(..)
“There’s kind of an emotional quiet riot that occurs and takes on a life of its own, that people themselves may be unaware of. Emotions have a collective existence — they are not just an individual phenomenon.”
And a cheery next-door neighbor has more effect on your happiness than your spouse’s mood.
(..)
“There’s kind of an emotional quiet riot that occurs and takes on a life of its own, that people themselves may be unaware of. Emotions have a collective existence — they are not just an individual phenomenon.”
Raising the World’s I.Q.
Travelers to Africa and Asia all have their favorite forms of foreign aid to “make a difference.” One of mine is a miracle substance that is cheap and actually makes people smarter.
Unfortunately, it has one appalling side effect. No, it doesn’t make you sterile, but it is just about the least sexy substance in the world. Indeed, because it’s so numbingly boring, few people pay attention to it or invest in it. (Or dare write about it!)
It’s iodized salt.
(..)
Yet the strategy hasn’t been fully put in place, partly because micronutrients have zero glamour. There are no starlets embracing iodine. And guess which country has taken the lead in this area by sponsoring the Micronutrient Initiative? Hint: It’s earnest and dull, just like micronutrients themselves.
Ta-da — Canada!
(Years ago, New Republic magazine held a contest for the most boring headline ever. The benchmark was from a Times Op-Ed column — not mine — that read “Worthwhile Canadian Initiative.” Alas, that’s salt iodization!)
Pakistan is typical of the challenges. Until recently, 6 in 10 Pakistani schoolchildren were iodine-deficient. Iodine just wasn’t on anyone’s mind.
(..)
Indeed, the problem used to be widespread in the Alps. The word “cretin” is believed to come from a mountain dialect of French, apparently because iodine deficiency in the Alps produced so many cretins. The problem ended when food was brought in from elsewhere and salt was iodized.
There is talk that President-elect Barack Obama may reorganize the American aid apparatus, perhaps turning it into a cabinet department. There are many competing good causes — I’m a huge believer in spending more on education and maternal health, in particular — but there may be no investment that gets more bang for the buck than micronutrients.
So, yes, salt iodization is boring. But if we can add 1 billion points to the global I.Q., then let’s lend strong American support — to a worthwhile Canadian initiative.
Unfortunately, it has one appalling side effect. No, it doesn’t make you sterile, but it is just about the least sexy substance in the world. Indeed, because it’s so numbingly boring, few people pay attention to it or invest in it. (Or dare write about it!)
It’s iodized salt.
(..)
Yet the strategy hasn’t been fully put in place, partly because micronutrients have zero glamour. There are no starlets embracing iodine. And guess which country has taken the lead in this area by sponsoring the Micronutrient Initiative? Hint: It’s earnest and dull, just like micronutrients themselves.
Ta-da — Canada!
(Years ago, New Republic magazine held a contest for the most boring headline ever. The benchmark was from a Times Op-Ed column — not mine — that read “Worthwhile Canadian Initiative.” Alas, that’s salt iodization!)
Pakistan is typical of the challenges. Until recently, 6 in 10 Pakistani schoolchildren were iodine-deficient. Iodine just wasn’t on anyone’s mind.
(..)
Indeed, the problem used to be widespread in the Alps. The word “cretin” is believed to come from a mountain dialect of French, apparently because iodine deficiency in the Alps produced so many cretins. The problem ended when food was brought in from elsewhere and salt was iodized.
There is talk that President-elect Barack Obama may reorganize the American aid apparatus, perhaps turning it into a cabinet department. There are many competing good causes — I’m a huge believer in spending more on education and maternal health, in particular — but there may be no investment that gets more bang for the buck than micronutrients.
So, yes, salt iodization is boring. But if we can add 1 billion points to the global I.Q., then let’s lend strong American support — to a worthwhile Canadian initiative.
College May Become Unaffordable for Most in U.S.
Over all, the report found, published college tuition and fees increased 439 percent from 1982 to 2007 while median family income rose 147 percent.
Student borrowing has more than doubled in the last decade, and students from lower-income families, on average, get smaller grants from the colleges they attend than students from more affluent families.
“If we go on this way for another 25 years, we won’t have an affordable system of higher education,” said Patrick M. Callan, president of the center, a nonpartisan organization that promotes access to higher education.
“When we come out of the recession,” Mr. Callan added, “we’re really going to be in jeopardy, because the educational gap between our work force and the rest of the world will make it very hard to be competitive. Already, we’re one of the few countries where 25- to 34-year-olds are less educated than older workers.”
Student borrowing has more than doubled in the last decade, and students from lower-income families, on average, get smaller grants from the colleges they attend than students from more affluent families.
“If we go on this way for another 25 years, we won’t have an affordable system of higher education,” said Patrick M. Callan, president of the center, a nonpartisan organization that promotes access to higher education.
“When we come out of the recession,” Mr. Callan added, “we’re really going to be in jeopardy, because the educational gap between our work force and the rest of the world will make it very hard to be competitive. Already, we’re one of the few countries where 25- to 34-year-olds are less educated than older workers.”
We are in Good Company
From Gary Dvorchak...
(realmoney.com)
The debate will rage if the $7 or so trillion of "aid" now offered to our financial system will eventually become inflationary. Certainly not in the immediate future, deflation is more the problem now, but massive money creation is usually inflationary longer term. Is our future to be Japan-- or Zimbabwe Light?
In any case, I was amused to learn of this endorsement from Dr. G Gono, the President of the Reserve Bank of Zimbabwe. On page 8 of their Statement of Monetary Policy, released last spring, he says:
"As Monetary Authorities, we have been humbled and have taken heart in the realization that some leading Central Banks, including those in the USA and the UK, are now not just talking of, but also actually implementing flexible and pragmatic central bank support programmes where these are deemed necessary in their National interests. That is precisely the path that we began over 4 years ago in pursuit of our own national interest and we have not wavered on that critical path despite the untold misunderstanding, vilification and demonization we have endured from across the political divide."
Good company indeed!
(realmoney.com)
The debate will rage if the $7 or so trillion of "aid" now offered to our financial system will eventually become inflationary. Certainly not in the immediate future, deflation is more the problem now, but massive money creation is usually inflationary longer term. Is our future to be Japan-- or Zimbabwe Light?
In any case, I was amused to learn of this endorsement from Dr. G Gono, the President of the Reserve Bank of Zimbabwe. On page 8 of their Statement of Monetary Policy, released last spring, he says:
"As Monetary Authorities, we have been humbled and have taken heart in the realization that some leading Central Banks, including those in the USA and the UK, are now not just talking of, but also actually implementing flexible and pragmatic central bank support programmes where these are deemed necessary in their National interests. That is precisely the path that we began over 4 years ago in pursuit of our own national interest and we have not wavered on that critical path despite the untold misunderstanding, vilification and demonization we have endured from across the political divide."
Good company indeed!
Zimbabwe Declares Cholera Emergency
The nightmare continues to unfold...
JOHANNESBURG — The Zimbabwean Health Minister, David Parirenyatwa, has declared the nation’s cholera outbreak a national emergency and appealed for outside help, the state-controlled Herald newspaper reported on Thursday. The epidemic has claimed more than 560 lives.
The news emerged a day after riot police officers brandishing batons charged into a group of 100 doctors and nurses on Wednesday in Harare, the capital, breaking up a demonstration for better pay and working conditions in a nation suffering from both the cholera outbreak and an economy in free fall.
The health workers, many dressed in uniform, fled as the police approached. Nearby, teachers and other union members tried to join the protest but were clubbed by yet more police officers, and at least 15 were arrested.
Earlier in the day, armed men identifying themselves as the police officers took a human rights activist, Jestina Mukoko, from her home in what Amnesty International called “part of an established pattern of harassment and intimidation of human rights defenders.” Ms. Mukoko, whose whereabouts are unknown, is director of the Zimbabwe Peace Project, an organization that has been documenting rights abuses.
The cholera epidemic and the new crackdown on dissent come in a country already mired in desperation. The government is paralyzed by a stalemated power-sharing deal, and the official inflation rate is 231 million percent. Grocery shelves are largely barren. Most public hospitals and schools are closed.
JOHANNESBURG — The Zimbabwean Health Minister, David Parirenyatwa, has declared the nation’s cholera outbreak a national emergency and appealed for outside help, the state-controlled Herald newspaper reported on Thursday. The epidemic has claimed more than 560 lives.
The news emerged a day after riot police officers brandishing batons charged into a group of 100 doctors and nurses on Wednesday in Harare, the capital, breaking up a demonstration for better pay and working conditions in a nation suffering from both the cholera outbreak and an economy in free fall.
The health workers, many dressed in uniform, fled as the police approached. Nearby, teachers and other union members tried to join the protest but were clubbed by yet more police officers, and at least 15 were arrested.
Earlier in the day, armed men identifying themselves as the police officers took a human rights activist, Jestina Mukoko, from her home in what Amnesty International called “part of an established pattern of harassment and intimidation of human rights defenders.” Ms. Mukoko, whose whereabouts are unknown, is director of the Zimbabwe Peace Project, an organization that has been documenting rights abuses.
The cholera epidemic and the new crackdown on dissent come in a country already mired in desperation. The government is paralyzed by a stalemated power-sharing deal, and the official inflation rate is 231 million percent. Grocery shelves are largely barren. Most public hospitals and schools are closed.
Wednesday, December 03, 2008
British Balance Benefit vs. Cost of Latest Drugs
For years, Britain was almost alone in using evidence of cost-effectiveness to decide what to pay for. But skyrocketing prices for drugs and medical devices have led a growing number of countries to ask the hardest of questions: How much is life worth? For many, NICE has the answer.
Top health officials in Austria, Brazil, Colombia and Thailand said in interviews that NICE now strongly influences their policies.
“All the middle-income countries — in Eastern Europe, Central and South America, the Middle East and all over Asia — are aware of NICE and are thinking about setting up something similar,” said Dr. Andreas Seiter, a senior health specialist at the World Bank.
Even in the United States, rising costs have led some in Congress to propose an institute that would compare the effectiveness of new medical technologies, although the proposals so far would not allow for price considerations. At the present rate of growth, medical costs will increase to 25 percent of the nation’s gross domestic product in 2025 from 16 percent, with half of the increase coming from new drugs and devices, according to the Congressional Budget Office.
Top health officials in Austria, Brazil, Colombia and Thailand said in interviews that NICE now strongly influences their policies.
“All the middle-income countries — in Eastern Europe, Central and South America, the Middle East and all over Asia — are aware of NICE and are thinking about setting up something similar,” said Dr. Andreas Seiter, a senior health specialist at the World Bank.
Even in the United States, rising costs have led some in Congress to propose an institute that would compare the effectiveness of new medical technologies, although the proposals so far would not allow for price considerations. At the present rate of growth, medical costs will increase to 25 percent of the nation’s gross domestic product in 2025 from 16 percent, with half of the increase coming from new drugs and devices, according to the Congressional Budget Office.
Christmas cheer for Malawi's Mary and Joseph?
Their names are Mary and Joseph and they have a newborn child.
But for this Malawian family this is a time of worry and not of cheer.
Both parents have HIV and when we meet them the status of their baby girl, Idess, is still unclear.
"God has been wonderful to us," Joseph says as he sits outside their small hut in Kawale on the outskirts of the capital Lilongwe.
"With all the medicines which we now take to stay alive, God has been good to us."
(via Doc Gurley)
But for this Malawian family this is a time of worry and not of cheer.
Both parents have HIV and when we meet them the status of their baby girl, Idess, is still unclear.
"God has been wonderful to us," Joseph says as he sits outside their small hut in Kawale on the outskirts of the capital Lilongwe.
"With all the medicines which we now take to stay alive, God has been good to us."
(via Doc Gurley)
Africa’s route to prosperity is not just a rocky road
Any first-time visitor to Africa is faced with a whirl of new experiences, but the awful roads are guaranteed to make an impression. That is true even in many cities – when I visited Douala, the commercial hub of Cameroon, I was appalled to realise that a four-wheel-drive vehicle was all but a necessity.
(..)
More rigorous studies have also found that the cost of transporting goods around west Africa is astonishingly high. One, albeit 15 years old, went so far as to conclude that road transport in Francophone Africa was six times more expensive even than in Pakistan.
Pity the entrepreneur who wants to do business under such conditions..
(..)
More rigorous studies have also found that the cost of transporting goods around west Africa is astonishingly high. One, albeit 15 years old, went so far as to conclude that road transport in Francophone Africa was six times more expensive even than in Pakistan.
Pity the entrepreneur who wants to do business under such conditions..
Cholera death rate multiplies in Zimbabwe
A sharp rise in the death toll from cholera has added new urgency to the humanitarian disaster in Zimbabwe, amid fresh signs that the provision of transport and public services is close to collapse.
Relief workers said yesterday that with hyperinflation, many nurses, doctors and health workers could no longer afford to pay for the bus or taxi to reach cholera treatment centres. More than four times as many people were dying from this outbreak of cholera than was typically the case, said relief workers.
In a sign that the economic crisis may be starting to affect the props of President Robert Mugabe's repressive regime, about 50 soldiers are reported to have looted shops, attacked traders and clashed
with police after queuing to withdraw virtually worthless Zimbabwean dollars from banks on Monday.
"They had to vent their anger in some way," said Itai Zimunya, of the Open Society's Zimbabwe project in Johannesburg. "The state has begun to fail. There is no government."
(..)
The numbers released yesterday by the World Health Organisation indicated that the cholera epidemic was spreading rapidly, with nearly 11,000 people contracting the illness in the past three weeks. During the same period 400 people died, bringing the total death toll to 484 and indicating that Zimbabwean cholera sufferers are losing their lives at four times the standard rate in a cholera epidemic.
Relief workers said yesterday that with hyperinflation, many nurses, doctors and health workers could no longer afford to pay for the bus or taxi to reach cholera treatment centres. More than four times as many people were dying from this outbreak of cholera than was typically the case, said relief workers.
In a sign that the economic crisis may be starting to affect the props of President Robert Mugabe's repressive regime, about 50 soldiers are reported to have looted shops, attacked traders and clashed
with police after queuing to withdraw virtually worthless Zimbabwean dollars from banks on Monday.
"They had to vent their anger in some way," said Itai Zimunya, of the Open Society's Zimbabwe project in Johannesburg. "The state has begun to fail. There is no government."
(..)
The numbers released yesterday by the World Health Organisation indicated that the cholera epidemic was spreading rapidly, with nearly 11,000 people contracting the illness in the past three weeks. During the same period 400 people died, bringing the total death toll to 484 and indicating that Zimbabwean cholera sufferers are losing their lives at four times the standard rate in a cholera epidemic.
A New Picture of Early Earth
Over the last decade, the mineralogical analysis of small hardy crystals known as zircons embedded in old Australian rocks has painted a picture of the Hadean period “completely inconsistent with this myth we made up,” Dr. Harrison said.
Geologists now almost universally agree that by 4.2 billion years ago, the Earth was a pretty placid place, with both land and oceans. Instead of hellishly hot, it may have frozen over. Because the young Sun put out 30 percent less energy than it does today, temperatures on Earth might have been cold enough for parts of the surface to have been covered by expanses of ice.
In a Host of Ailments, Seeing a Brain Out of Rhythm
Dr. Llinás, the chairman of neuroscience and physiology at the N.Y.U. School of Medicine, believes that abnormal brain rhythms help account for a variety of serious disorders, including Parkinson’s disease, schizophrenia, tinnitus and depression. His theory may explain why the technique called deep brain stimulation — implanting electrodes into particular regions of the brain — often alleviates the symptoms of movement disorders like Parkinson’s.
The theory is far from widely accepted, and most neurosurgeons say the mechanisms behind deep brain stimulation remain a mystery. Still, surgeons like Dr. Kelly are excited about the research, saying it suggests new targets for treating a variety of disorders.
“It’s a mystery to me why it took me so long to get what Rodolfo was saying,” Dr. Kelly said. “I’d like to latch on to the excuse that I was too busy. In truth, I was too dumb to listen. Now I tell my younger colleagues, ‘Listen to this man.’ He’s on to something that can revolutionize neurosurgery and our understanding of how the brain works.”
(..)
The thalamus and cortex work dynamically by passing loops of information back and forth, Dr. Llinás said. “If you think of the brain as an orchestra, the thalamus is the conductor. The players are in the cortex. When the conductor makes a move, the players follow. The conductor then hears their sounds and makes new moves, resulting in a continuous dialogue.”
Cells in the thalamus and cortex rely on intrinsic electrical properties to keep the music going. “Groups of neurons, millions strong, act like little hearts beating all their own,” Dr. Llinás said. They can oscillate at multiple frequencies, depending on what is happening in the outside world.
When the brain is awake, neurons in the cortex and thalamus oscillate at the same high frequency, called gamma. “It’s like a Riverdance performance,” Dr. Llinás continued. “Some cells are tapping in harmony and some are silent, creating myriads of patterns that represent the properties of the external world. Cells with the same rhythm form circuits to bind information in time. Such coherent activity allows you to see and hear, to be alert and able to think.”
But at day’s end, cells in the thalamus naturally enter a low-frequency oscillation. They burst slowly instead of firing rapidly. With the thalamus thrumming at a slower rhythm, the cortex follows along. You fall asleep. Your brain is still tapping out slow rhythms, but consciousness is suspended.
So if a small part of the thalamus gets permanently stuck at a low frequency, or part of the cortex fails to respond to the wake-up call, Dr. Llinás said, an abnormal rhythm is generated, a so-called thalamocortical dysrhythmia.
(..)
Dr. Llinás believes that these disrupted rhythms can be set off by a variety of causes — faulty genes, brain injury, chemical imbalance. In the case of his colleague Dr. Kelly, a small portion of the auditory cortex was damaged by helicopter noise. Dr. Llinás spotted it in the MEG machine — a spot oscillating as if in light sleep.
Tinnitus and other dysrhythmias can be treated with deep brain stimulation, drugs or tiny surgical lesions that return brain oscillations to normal, he said. The goal is to wake up parts of the brain that have fallen into low-frequency sleep mode.
The theory is far from widely accepted, and most neurosurgeons say the mechanisms behind deep brain stimulation remain a mystery. Still, surgeons like Dr. Kelly are excited about the research, saying it suggests new targets for treating a variety of disorders.
“It’s a mystery to me why it took me so long to get what Rodolfo was saying,” Dr. Kelly said. “I’d like to latch on to the excuse that I was too busy. In truth, I was too dumb to listen. Now I tell my younger colleagues, ‘Listen to this man.’ He’s on to something that can revolutionize neurosurgery and our understanding of how the brain works.”
(..)
The thalamus and cortex work dynamically by passing loops of information back and forth, Dr. Llinás said. “If you think of the brain as an orchestra, the thalamus is the conductor. The players are in the cortex. When the conductor makes a move, the players follow. The conductor then hears their sounds and makes new moves, resulting in a continuous dialogue.”
Cells in the thalamus and cortex rely on intrinsic electrical properties to keep the music going. “Groups of neurons, millions strong, act like little hearts beating all their own,” Dr. Llinás said. They can oscillate at multiple frequencies, depending on what is happening in the outside world.
When the brain is awake, neurons in the cortex and thalamus oscillate at the same high frequency, called gamma. “It’s like a Riverdance performance,” Dr. Llinás continued. “Some cells are tapping in harmony and some are silent, creating myriads of patterns that represent the properties of the external world. Cells with the same rhythm form circuits to bind information in time. Such coherent activity allows you to see and hear, to be alert and able to think.”
But at day’s end, cells in the thalamus naturally enter a low-frequency oscillation. They burst slowly instead of firing rapidly. With the thalamus thrumming at a slower rhythm, the cortex follows along. You fall asleep. Your brain is still tapping out slow rhythms, but consciousness is suspended.
So if a small part of the thalamus gets permanently stuck at a low frequency, or part of the cortex fails to respond to the wake-up call, Dr. Llinás said, an abnormal rhythm is generated, a so-called thalamocortical dysrhythmia.
(..)
Dr. Llinás believes that these disrupted rhythms can be set off by a variety of causes — faulty genes, brain injury, chemical imbalance. In the case of his colleague Dr. Kelly, a small portion of the auditory cortex was damaged by helicopter noise. Dr. Llinás spotted it in the MEG machine — a spot oscillating as if in light sleep.
Tinnitus and other dysrhythmias can be treated with deep brain stimulation, drugs or tiny surgical lesions that return brain oscillations to normal, he said. The goal is to wake up parts of the brain that have fallen into low-frequency sleep mode.
Standing in Someone Else's Shoes, Almost for Real
Now, neuroscientists have shown that they can make this experience physical, creating a “body swapping” illusion that could have a profound effect on a range of therapeutic techniques. At the annual meeting of the Society for Neuroscience last month, Swedish researchers presented evidence that the brain, when tricked by optical and sensory illusions, can quickly adopt any other human form, no matter how different, as its own.
“You can see the possibilities, putting a male in a female body, young in old, white in black and vice versa,” said Dr. Henrik Ehrsson of the Karolinska Institute in Stockholm, who with his colleague Valeria Petkova described the work to other scientists at the meeting. Their full study is to appear online this week in the journal PLoS One. .
The technique is simple. A subject stands or sits opposite the scientist, as if engaged in an interview.. Both are wearing headsets, with special goggles, the scientist’s containing small film cameras. The goggles are rigged so the subject sees what the scientist sees: to the right and left are the scientist’s arms, and below is the scientist’s body.
(..)
In previous work, neuroscientists have induced various kinds of out-of-body experiences using similar techniques. The brain is so easily tricked, they say, precisely because it has spent a lifetime in its own body. It builds models of the world instantaneously, based on lived experience and using split-second assumptions — namely, that the eyes are attached to the skull.
(..)
The evidence that inhabiting another’s perspective can change behavior comes in part from virtual-reality experiments. In these studies, researchers create avatars that mimic a person’s every movement. After watching their “reflection” in a virtual mirror, people mentally inhabit this avatar at some level, regardless of its sex, race or appearance. In several studies, for instance, researchers have shown that white people who spend time interacting virtually as black avatars become less anxious about racial differences.
(..)
The evidence that inhabiting another’s perspective can change behavior comes in part from virtual-reality experiments. In these studies, researchers create avatars that mimic a person’s every movement. After watching their “reflection” in a virtual mirror, people mentally inhabit this avatar at some level, regardless of its sex, race or appearance. In several studies, for instance, researchers have shown that white people who spend time interacting virtually as black avatars become less anxious about racial differences.
(..)
In one experiment, the Stanford team found that people inhabiting physically attractive avatars were far more socially intimate in virtual interactions than those who had less appealing ones. The effect was subconscious: the study participants were not aware that they were especially good-looking, or that in virtual conversations they moved three feet closer to virtual conversation partners and revealed more about themselves than others did. This confidence lingered even after the experiment was over, when the virtual lookers picked more attractive partners as matches for a date.
“You can see the possibilities, putting a male in a female body, young in old, white in black and vice versa,” said Dr. Henrik Ehrsson of the Karolinska Institute in Stockholm, who with his colleague Valeria Petkova described the work to other scientists at the meeting. Their full study is to appear online this week in the journal PLoS One. .
The technique is simple. A subject stands or sits opposite the scientist, as if engaged in an interview.. Both are wearing headsets, with special goggles, the scientist’s containing small film cameras. The goggles are rigged so the subject sees what the scientist sees: to the right and left are the scientist’s arms, and below is the scientist’s body.
(..)
In previous work, neuroscientists have induced various kinds of out-of-body experiences using similar techniques. The brain is so easily tricked, they say, precisely because it has spent a lifetime in its own body. It builds models of the world instantaneously, based on lived experience and using split-second assumptions — namely, that the eyes are attached to the skull.
(..)
The evidence that inhabiting another’s perspective can change behavior comes in part from virtual-reality experiments. In these studies, researchers create avatars that mimic a person’s every movement. After watching their “reflection” in a virtual mirror, people mentally inhabit this avatar at some level, regardless of its sex, race or appearance. In several studies, for instance, researchers have shown that white people who spend time interacting virtually as black avatars become less anxious about racial differences.
(..)
The evidence that inhabiting another’s perspective can change behavior comes in part from virtual-reality experiments. In these studies, researchers create avatars that mimic a person’s every movement. After watching their “reflection” in a virtual mirror, people mentally inhabit this avatar at some level, regardless of its sex, race or appearance. In several studies, for instance, researchers have shown that white people who spend time interacting virtually as black avatars become less anxious about racial differences.
(..)
In one experiment, the Stanford team found that people inhabiting physically attractive avatars were far more socially intimate in virtual interactions than those who had less appealing ones. The effect was subconscious: the study participants were not aware that they were especially good-looking, or that in virtual conversations they moved three feet closer to virtual conversation partners and revealed more about themselves than others did. This confidence lingered even after the experiment was over, when the virtual lookers picked more attractive partners as matches for a date.
Iceland Crisis Sends Viking Descendants to Norway
Dec. 2 (Bloomberg) -- Almost 1,200 years after Viking chief Ingolfur Arnarson left Norway to found Reykjavik, the crisis engulfing Iceland is forcing his descendants home.
“There are no jobs here,” said Baldvin Kristjansson, an 18-year-old former container repairman from western Iceland, at a European job fair in Reykjavik. “I’m going to move away and go to Norway.”
The Atlantic island of 320,000, suffering from its worst financial crisis since gaining independence in 1944, faces the biggest exodus in a century. Iceland’s $7.5-billion economy may shrink about 10 percent next year, according to the International Monetary Fund, which is helping provide a $4.6 billion bailout package.
About half of Icelanders aged between 18 and 24 are considering leaving the country, Reykjavik-based newspaper Morgunbladid said, citing a survey of 1,117 people between Oct. 27 and Oct. 29.
“Tens of thousands” will depart, estimated Lars Christensen, chief analyst at Danske Bank A/S, the biggest lender in neighboring Denmark.
“There are no jobs here,” said Baldvin Kristjansson, an 18-year-old former container repairman from western Iceland, at a European job fair in Reykjavik. “I’m going to move away and go to Norway.”
The Atlantic island of 320,000, suffering from its worst financial crisis since gaining independence in 1944, faces the biggest exodus in a century. Iceland’s $7.5-billion economy may shrink about 10 percent next year, according to the International Monetary Fund, which is helping provide a $4.6 billion bailout package.
About half of Icelanders aged between 18 and 24 are considering leaving the country, Reykjavik-based newspaper Morgunbladid said, citing a survey of 1,117 people between Oct. 27 and Oct. 29.
“Tens of thousands” will depart, estimated Lars Christensen, chief analyst at Danske Bank A/S, the biggest lender in neighboring Denmark.
Tuesday, December 02, 2008
Bush administration ignored clear warnings
WASHINGTON - The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory document
(..)
The administration’s blind eye to the impending crisis is emblematic of a philosophy that trusted market forces and discounted the need for government intervention in the economy. Its belief ironically has ushered in the most massive government intervention since the 1930s.
(..)
The administration’s blind eye to the impending crisis is emblematic of a philosophy that trusted market forces and discounted the need for government intervention in the economy. Its belief ironically has ushered in the most massive government intervention since the 1930s.
Despite Hardships, Medicine Gives Cause for Thanks * By BENJAMIN BREWER,
I often wonder how family medicine will survive in places like this. Nearly half the primary care doctors in this country plan to quit, retire early or cut back on their practices, according to a recent national survey. If those physicians follow through on those intentions, the shortages of doctors in Illinois, and elsewhere, could be severe.
It gives me pause to think that we've lost our way that much. Yes, there are challenges, both personal and financial, in being a primary care doctor. Those challenges can break your spirit, if you let them. But I still find reasons to give thanks for being a country doctor.
It gives me pause to think that we've lost our way that much. Yes, there are challenges, both personal and financial, in being a primary care doctor. Those challenges can break your spirit, if you let them. But I still find reasons to give thanks for being a country doctor.
Panel Calls for Changes in Doctor Training
A national panel of medical experts proposed significant and costly changes for training new doctors in the nation’s hospitals, recommending mandatory sleep breaks and more structured shift changes to reduce the risk of fatigue-related errors.
The report, issued by the Institute of Medicine, focused on the grueling training of medical residents, the recent medical school graduates who care for patients under the supervision of a fully-licensed physician. The medical residency, which aims to educate doctors by fully immersing them in a particular specialty and all aspects of patient care, is characterized by heavy patient workloads, 80-hour workweeks and sleep deprivation.
The report, issued by the Institute of Medicine, focused on the grueling training of medical residents, the recent medical school graduates who care for patients under the supervision of a fully-licensed physician. The medical residency, which aims to educate doctors by fully immersing them in a particular specialty and all aspects of patient care, is characterized by heavy patient workloads, 80-hour workweeks and sleep deprivation.
Fat Tails in Stock Returns
Ever wondered:
1. What percentage of stocks beat their benchmark index over their lifetime?
2. What percentage of stocks have a negative return over their lifetime?
3. What percentage of stocks lose essentially all of their value?
The answers are in the great white paper "The Capitalism Distribution" by the guys at Blackstar Funds.
Answers:
1. 36%
2. 39%
3. 18%
(via Mebane Faber at Realmoney.com)
1. What percentage of stocks beat their benchmark index over their lifetime?
2. What percentage of stocks have a negative return over their lifetime?
3. What percentage of stocks lose essentially all of their value?
The answers are in the great white paper "The Capitalism Distribution" by the guys at Blackstar Funds.
Answers:
1. 36%
2. 39%
3. 18%
(via Mebane Faber at Realmoney.com)
Monday, December 01, 2008
Going Off to College for Less (Passport Required)
I am all in favor of overseas education, to some extent. However, if you want to get into a top-notch college here in the U.S., make sure you check out Mychances.Net.
With higher education fast becoming a global commodity, universities worldwide — many of them in Canada and England — are competing for the same pool of affluent, well-qualified students, and more American students are heading overseas not just for a semester abroad, but for their full degree program.
With higher education fast becoming a global commodity, universities worldwide — many of them in Canada and England — are competing for the same pool of affluent, well-qualified students, and more American students are heading overseas not just for a semester abroad, but for their full degree program.
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