NYT Magazine Round Up
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There is a full run of finance related articles coming up in the Sunday Times Magazine:
Diminished Returns: Its hit or miss whether I agree with Niall Ferguson’s conclusions, but he is always interesting.
The China Puzzle: David Leonhardt looks at the beginning of our problems with China. Very interesting read.
Brother, Can You Spare a Loan? Oh, goody, yet another article on peer-to-peer lending.
Suze Orman Is Having a Moment: A surprisingly interesting puff piece on the ubiquitous finance chater box. Hey, better her than Cramer . . .
My Personal Credit Crisis: I started Edmund Andrews new book, last month. I felt guilty, and had to stop. It was just so wrong — I had stolen someone’s personal diary and was reading very personal, intimate details of someone else’s life that I had no business reading. TMI! Way too much information!
There’s more, but that will have to hold you til tomorrow . . .
May 16th, 2009 at 12:45 pm
I am curious. Is divorce court so bad that the ex-wife gets 58% of his after tax monthly paycheck? Dude needs to learn to live with in his means. It’s pretty sad especially for an Economics writer. He ought to know better.
May 16th, 2009 at 1:03 pm
Niall Ferguson (article entitled “Diminished Returns”) made reference to Leftback’s investment firm:
“The German government likes to wag its finger disapprovingly at the ‘Anglo Saxon’ financial model, but last year average bank leverage was four times higher in Germany than in the United States. SCHADENFREUDE will be in order when the German banking crisis strikes”.
May 16th, 2009 at 1:22 pm
I can’t even feel sorry for Edmund L. Andrews @ The Times. Goes to tell you the illiteracy of economics reporter at the most prestigious journal in the country. No wonder this country is so deep in the hole.
He never seemed to consider the possibility that he might lose his job. NYT is about to file for bankruptcy. Sounds like he’s fishing for a book contract.
May 16th, 2009 at 1:25 pm
Apparently he got the book deal. No wonder the story has a brighter sound at the end of the article. It’s his way out of the mess.
May 16th, 2009 at 1:34 pm
Re: The China Puzzle, I read it earlier and didn’t learn too much that hasn’t already been said recently.
Having lived in China for 5 years I will not argue with the title, however. China and the rest of the developing world is indeed a puzzle, one that you guys still in the States should probably get around to solving sooner rather than later. I used to be a 100% free trader but having seen the impact of so much globalization from both sides of the ocean I am often left wondering if more forms of targeted protectionism would have saved the whole world a lot of pain.
China’s pain is mostly environmental (some of which gets shared with the rest of the world), and the US’ pain is mostly financial.
May 16th, 2009 at 1:44 pm
Kyle Says:
‘China’s pain is mostly environmental”
undoubtedly- the air in Beijing is pitiful- so hazy you can barely make out not too distant buildings- not to mention how your eyes feel after being out and around-
can’t imagine what it must be like in an industrial town
May 16th, 2009 at 2:23 pm
China and the US are locked in an economic moebius. Anyone who thinks China will decouple and survive this crash without as much or more economic pain than the US is only viewing part of the whole picture. Chin can no more develop a sustainable internal consumer economy than the US can suddenly turn to the manufacture of rubber boots and plastic christmas ornaments at profit levels that will pull it out of this “recession”.
If China does diminish its purchase of US debt this will only hasten their own economic demise. The mirror image would be the US imposing trade restrictions and tarriffs on Chinese goods. Either action will damage the actor as much as it will harm their counterpart.
I believe this “recession” (note: substitute the d-word at your pleasure) will force China and the US into an even tigher relationship than they had previously. Far tigher than China and Europe or even China and the rest of Asia. I will even dare to state that China and the US will likely be the first countries to emerge from this “recession” via mutually benefical strategies of economic exchange. The Yuan and Dollar will also likely be the strongest currencies as this crash begins its slow climb upwards in a few years.
May 16th, 2009 at 2:58 pm
I’m getting the sinking feeling again, circa Sept/Oct. ‘08 and ‘Feb/March ‘09. There’s NO freaking way we’re anywhere near turning the corner just yet. Brown shoots.
@leftback: It seems that places like Nantucket aren’t “recession-proof” after all. Hoocoodanode? Another myth bites the dust.
http://www.boston.com/news/local/massachusetts/articles/2009/05/16/in_downturn_nantucket_has_its_share_of_foreclosures_ailing_businesses/?p1=Well_MostPop_Emailed1
May 16th, 2009 at 3:18 pm
Calvin:
The money wasn’t going only for alimony; if you sire kids you gotta support em. No details given, but I imagine it’s the typical dumping of the stay-at-home mom by the middle-aged-crazy guy. His support paymens will decline as they reach majority and the wife is forced to work at some menial position because she didn’t have a career like he did and she doesn’t have a book deal.
super_trooper: the obvious answer to our problems is to give everyone a book deal.
May 16th, 2009 at 3:30 pm
I have found on those rare occasions when I disagreed with Niall Ferguson that I was wrong.
May 16th, 2009 at 3:33 pm
Mike, in response to Calvin, you took the words right out of my mouth. Still, I agree with Barry, TMI; further, I don’t want to read about someone making one stupid decision after the other. It makes me feel very anxious and uncomfortable..
May 16th, 2009 at 3:53 pm
Manny:
Was looking for more on Nantucket and came across this great and vicious satire. I bet the author is very popular among the socialites:
http://nantuckets.com/
May 16th, 2009 at 3:56 pm
Fye:
(Any radicals out there?)
Agenda for a New Economy: From Phantom Wealth to Real Wealth
Author: David Korten
Mr. Korten explains that Wall Street can’t be fixed because it’s based on the creation of phantom wealth. He advocates replacement of the stock market system.
http://www.booktv.org/watch.aspx?ProgramId=PC-10284
The good stuff starts at minute 20.
May 16th, 2009 at 5:02 pm
KJ-
watched a good portion of the video-
the problem with folks that want to live in a world of peace and mutual respect with all effort going to the benefit of all- is that that requires a government that demands such- to the detriment of individual liberty-
the people who cherish these ideals are the same who feel these ideals and are under the impression that everyone feels the same-
they would be the first that would be cut down by the ruthless individual of which there are many-
I am not a believer that man is inherently good or bad- and is just as prone to “break your face” as well as share a banana.
May 16th, 2009 at 6:10 pm
Can’t really read more thn the intros to these articles before getting turned off.
Niall Ferguson tries to justify deregulation as having been beneficial at first. Of course, all bubbles start with benefits from loose credit and little regulation. Can’t finish it.
Do I really want to read more about the privileged, arrogant Dartmouth guy who helped us into this and isn’t helping us out? The first page appears to accept that China’s policy for the past several years has been to move from an export based to a consumption based economy. Yeah, right. And the official policy of the Bushies was to bring peace and freedom to Iraq.
Suze Orman – how to get hundeds of thousands (millions?) of people to loose tens to hundreds of millions of bucks and continue to be popular.
IMHO, All pretty disgusting.
May 16th, 2009 at 6:19 pm
Has anyone asked Orman how that “dollar cost averaging buy the dips strategy” has worked out for her loyal viewers/listeners. I’m guessing she hasn’t followed that strategy herself though, or may she has……
May 16th, 2009 at 6:24 pm
Mannwich 6:19
I’ve heard her say that she keeps most of her money in munis.
(I guess she doesn’t eat her own cooking)
May 16th, 2009 at 6:46 pm
@DL: Big shocker there. Why would anyone listen to her then?
If there’s any poetic justice, munis will blow up and she’ll get crushed.
May 16th, 2009 at 7:54 pm
Mike in NOLA,
w/ this: “Suze Orman – how to get hundeds of thousands (millions?) of people to loose tens to hundreds of millions of bucks and continue to be popular.
IMHO, All pretty disgusting.” I totally agree. Her ‘numbers’ never did add up. That she continues to be popular should be seen as toubling..
Suze should join Charlie Merrill on the honary ‘to be Hung in Effigy’-list.
May 16th, 2009 at 8:17 pm
Yo, btw, what’s up w/ the Map Graphic?
looks like the lower 48 as wholly-owned subsidiary of the PROC, slowly being taken over by the U.N.
..
May 16th, 2009 at 8:30 pm
hoffer-
toss up as to which would be worse
May 16th, 2009 at 8:47 pm
ahab,
yes, it’d be a real Hobson’s choice. though, seems like we’re all too willing to let either/both occur.
note the continuing ‘chatter’ that the PROC ‘owns’ us b/c they’re Long a Trillion+U$D of Treasuries..
and, at the minimum, the U.N.’s continuing drumbeat about Climate Change nee’ Global Warming.
Funny how the U.N. “didn’t know Sh*t”, Hans Blix, notwithstanding, about Iraqi WMD, but Now the IPCC is Omniscient on the topic of Global Warming, oops, Climate Change..
as if..
May 16th, 2009 at 9:24 pm
@call me ahab Says:
“they would be the first that would be cut down by the ruthless individual of which there are many”
Yes, but there wouldn’t be as many ruthless individuals if our culture didn’t continually promote individualism over self-sacrifice for the greater good.
And why do they do that anyway? Might it have something to do with consumption? Individualism requires purchasing all the accessories we need to show others “who we are”, from houses on down to tattoos we “make a statement” with what we buy. That is the freedom they most want us to have – the freedom to go shopping.
Individual freedom?
http://www.youtube.com/watch?v=1FlY25Vek4k
And why is individual freedom the most important thing in life anyway? Is there no higher goal than self interest? Do the interests of the individual really outweigh the interests of the many?
Is it so hard to believe that people can actually be happier pursuing better personal relationships, creating neighborhoods where people actually live like neighbors, and working for the benefit of each other rather than endlessly chasing money, fame, and material possessions?
And if individual freedom is so important, then why are the happiest people living in socialist countries? Why are they not depressed instead by their lack of individual freedoms?
http://abcnews.go.com/Business/Economy/story?id=7585729&page=1
May 16th, 2009 at 10:13 pm
On the China Puzzle:
Dope article BR, thanks for sharing. I never knew that about Geithner, and had almost totally destracted myself from the China puzzle because its too damn depressing for a roots American patriot. Thanks for reacquainting me with the inevitable.
Now…
I cant decide which one is the better short… SPY or FXI.
We’re both fuc*ed.
Irie vibes on a weekend. Inna fine style. Bless yall. See ya monday.
May 16th, 2009 at 10:17 pm
I haven’t read any of the articles, but I’ve read some of here articles, mostly because I get pointed to her by some relatives. I’d say that Orman’s popularity is not because she tries to give specific investment advice but because she tries to get people to deal with money in general, pay off credit cards, not splurge, have a savings plan, how to deal with family & money issues, etc., etc. Her advice and appeal is more general than Cramer that way. Also, from talking with friends and family I get the vibe that she is very helpful to a lot of women, especially since women are often not taught to think concretely about money and might have a lot of hangups about diving in. In that way she’s sort of like the Oprah of personal finance, and I’d guess she does more good than harm in the world.
Of course, her investment advice (like many people’s) wasn’t pretty lousy, but I’d guess that a lot of her fans, without hearing her advice, would have saved nothing without her. Instead, they saved something, and lost 40% of it, but they’ve got 60% left, so that might count as progress.
May 16th, 2009 at 10:22 pm
Arg, I meant to say: I haven’t read any of the NYT Magazine articles Barry references, but I have read some articles by Suze Orman. A book, too.
May 16th, 2009 at 11:41 pm
Well, I don’t know about his personal troubles, but Ferguson’s rhetorical question, “Who will regulate the regulators?” Eureka! Dependency only breeds disappointment and resentment. Down with the FR! It’s the best ETF you can buy.
http://www.endthefed.us/
http://www.youtube.com/watch?v=Rpne0z9f7WA
May 17th, 2009 at 1:29 am
i greatly enjoyed niall ferguson’s book “the story of money”, and his attention to the development of financial methods as an outcome of human history rather than abstract economic principles.
the attention paid in his short column is therefore appropriately tuned to the tension of regulation/degregulation as the balance between simple and concrete rules on the one hand and politics or complex rules (the kind of rules that try to make everyone happy, or serve a specific constituency) on the other.
he points out that simple regulations (such as canada’s 20:1 leverage cap) have worked much better than complex regulations (such as basle 1 &2) or prohibitions (the south seas bubble law against joint stock companies). he leaves out the issue of politics as it affects *enforcement* (the bush SEC did not enforce the rules already available), probably because bad regulations are inherently hard to enforce and lax enforcement is again often a symptom of politics.
but he doesn’t offer any regulatory solutions. he merely says that these particular historical junctures are when we usually get screwed by politics. well, i think we all knew that. given his focus on politics, his sermon of the fat tails and black swans seems to say that we all get screwed much worse than we fear, more often than we expect. gee, thanks.
May 17th, 2009 at 7:06 am
drollere:
I alway thought we got screwed worse than most people feared and more often that we expect. I suppose it’s my basic pessimissim about aristocracies running things and knowing seeing how it worked out historically in other places.
People like Greenspan and Bernanke and Geithner are not ignorant of history; they are just not humble enough to accept that some forces are beyond control. I’m sure they have read of previous bubbles and my guess is that they thought that they could reproduce the early days of past bubbles without suffering the consequences. That was, more or less, the Federal reserve policy since Alan took over: a little easy money and “the creativity of the marketplace.” This was combined with “I just won’t be as stupid as John Law and let things get out of control.” I’m sure John Law didn’t intend to create a bubble and what he did was very creative and, perhaps, brilliant. But, like many who get in over their heads, Law and the current group had political pressure to keep things going, enjoyed the status they had attained, and couldn’t get off the tiger once they got on.
May 17th, 2009 at 8:41 am
RE: China piece. Anyone fortunate to have read Fallows piece in the Atlantic Monthly “Countdown to a Meltdown” written in the summer 2005 [yes that's 2005 http://www.theatlantic.com/doc/200507/fallows ], where he plays out the scenario through 2012, like myself, thought about it and looked critically at where we were, saved a lot of money scaling out of real estate and the market over the next year or so. It’s an amazing piece–i just reread it. SCARY.
Now this quote from Fallows from NYT:
“In an otherwise optimistic article in a recent issue of The Atlantic Monthly, James Fallows, an American writer living in China, pointed out that the United States followed a similar protectionist strategy during the Great Depression. As a big exporter, it felt the need to help its struggling manufacturers. Other countries soon retaliated, and the depression deepened.”
Could the China be the Black Swan???
Think
May 17th, 2009 at 9:27 am
Ecclesiastes 9:11-12
I returned, and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favour to men of skill; but time and chance happeneth to them all.
For man also knoweth not his time: as the fishes that are taken in an evil net, and as the birds that are caught in the snare; so are the sons of men snared in an evil time, when it falleth suddenly upon them.
May 17th, 2009 at 9:39 am
KJ-
I hear you- don’t disagree that the chasing of fame and wealth are definitely not the path to happiness
individual liberty however is mutually exclusive from fame and wealth- you can have individual liberty and not be a chaser of fame and wealth- one does not determine the other-
a Utopian society in my mind means thought police- fine maybe in a homogeneous society- but that is not this country
May 17th, 2009 at 10:47 am
H.T.: many signs that China is doing just that. Check out the blogs at mpettis.com. Of course, it’s not called protectionism, but subsidizing exporters and manipulating the currency amounts to the same thing.
BTW, did anybody see this article about all the pickapay loand on WFC’s books. Between that and HELOC’s, Warren may wind up with some egg on his face:
http://www.nytimes.com/2009/05/15/business/economy/15norris.html?pagewanted=1
May 17th, 2009 at 11:34 am
Interesting piece on how US banks are now pretty much like the Chinese:
http://chinesepolitics.blogspot.com/2009/05/chinese-banks-are-not-good-students.html
May 17th, 2009 at 11:37 am
>> a Utopian society in my mind means thought police
Heh… Interesting association, er, mis-association. Perhaps you’ve enjoyed one too many book/movie where a future utopia looks ugly under the surface?? (Cue that guy with the deep voice over movie trailers: “in a world where….”)
May 17th, 2009 at 11:45 am
The biggest blunder of all had nothing to do with deregulation. For some reason, the Federal Reserve convinced itself that it could focus exclusively on the prices of consumer goods instead of taking asset prices into account when setting monetary policy. In July 2004, the federal funds rate was just 1.25 percent, at a time when urban property prices were rising at an annual rate of 17 percent. Negative real interest rates at this time were arguably the single most important cause of the property bubble.
Thank You. Agreed.
May 17th, 2009 at 11:51 am
Moss,
you make a fine point. more people should understand that “The Bible” is, also, a work of Philosophy, all by its self, as well as Theology..
May 17th, 2009 at 1:14 pm
@wunsacon-
got a laugh out of me- I can hear the voice over now . . .
May 17th, 2009 at 2:05 pm
Moss,
That’s one of the most beautiful quotes I’ve ever read from the Bible. Thanks so much for sharing.
May 17th, 2009 at 3:01 pm
Moss @ 9:27:
Great post. Jah word is truth. Thank you for sharing.
May 18th, 2009 at 12:33 pm
I AM SORRY FOR SPAMMING YOUR BLOG
The stock market keeps going higher
dow 14000 soon according to experts
http://www.bloomberg.com/apps/news?pid=20601087&sid=ajgUp7xQIn6c&refer=home