Some interesting reading for a sleepy Tuesday afternoon:

As Subprime Lending Crisis Unfolded, Watchdog Fed Didn’t Bother Barking (WaPo)

How Bank of America Used Merrill Losses to Bully the Government (

FDIC Proposes Banks Prepay Deposit Fees Through 2012 (Bloomberg)

A risky revival (FT)

Earnings Revisions at a Two Year High (Bespoke)

• Dylan Ratigan: Why Would We Let Them Rig the Game?

We’re Speaking Japanese Without Knowing It (John P. Hussman)

THE LAST DAYS OF THE POLYMATH (intelligent life)

How Do Innovators Think? (HBR)

When the Sirens Sing, How to Avoid Giving in (Aleph Blog)


You see anything else worth perusing?

Category: Financial Press

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

41 Responses to “Tuesday Links”

  1. manhattanguy says:

    Excellent article by Paul B Farrell

    WW3 Population Wars: a 12-bomb question

  2. VennData says:

    Fed Head: Three main determinants for when Fed rate hikes begin:

    1) Election ’10
    2) Inflation expectations
    3) Job, ISM, GDP positively trending.

    Of the three, the first two matter.

  3. Bruce in Tn says:

    The Hussman article was excellent.

    Japan’s Deflation Deepens as Prices Fall Record 2.4%

  4. Bruce in Tn says:

    We Are in a Toilet-Shaped Recovery: Roche

    ” You want to know my shape? My shape is a toilet shape,” Roche said on “Squawk Box Asia.” “Because I think that’s where 14 percent of (gross domestic product) in terms of spending and central bank help will disappear.”

    A lot of the money spent by governments should not have been spent at all, Roche said.

    Roche predicted there would be a short-term recovery, but afterwards demand would peter out because the problems that caused the credit crisis were not addressed.

    …The problems of the credit crisis have not been addressed….how many hundreds of times have I read that opinion lately?

    I pine wishfully for the days of Arthur Burns and Paul Volcker..when all you had to do was follow what men were doing, and invest accordingly. Now California is going to try a new radial way of raising revenue, governments don’t tell, central bankers work on theories, debt means the same thing as money…

    It just seems awfully complicated now…don’t it.

  5. The Curmudgeon says:

    The polymath article was excellent. Specialists abound, that know a lot about a little. Very few understand a lot about a lot. These are the Big Picture people. Details are important, but knowing how they fit the bigger schema is more important.

    Rampant specialization, i.e., the lack of visionary polymaths, bodes ill for the future. Example: Newton was a bit of a polymath, making contributions in math, astronomy, philosophy, and of course, our understanding of gravity. Einstein then clarified gravity. But now we know, even physicists admit, that something’s not right about the General Theory. It needs 95% of the universe to be composed of dark matter and dark energy, i.e., things that we can’t detect, neither with our own senses nor our sensory-extending instruments such as telescopes and particle accelerators. What use is a theory that only explains 5% of the universe? Or, alternatively, that needs us to imagine 95% of it is unknowable? Yet only the specialists in theoretical physics have any say in the matter, and they are consumately Einsteinians, much like the Aristotlean scholastics adamantly refused to allow that the earth might just rotate around the sun, and not the other way around. To dispute the grandour of the General Theory is to be a heretic physicist, and to suffer sure excommunication from the tribe. Yet, it doesn’t do a very good job of explaining, without having to resort to imagination, and that’s just for the big stuff. It works not at all at the microscopic level. And the string theorists that are trying anew to unify it all need about eleven or twelve or several trillion universes to make their strings dance like they’d like.

    This is the danger of over-specialization. It impairs clear thinking. It fosters myopia. No one outside of the tribe gets to question the assumptions and logic of the specialists, but the specialists won’t let anyone into their protected coven without ensuring beforehand they are of like mind.

    They get away with it because of our post-Enlightenment worship of the scientific priesthood. Einstein is now considered, at least, a demigod. We humans are wired to worship something, and since science has successfully dispelled many of the myths and superstitions of the major religions, we averted our worshipful gaze to the specialists in science, finance, etc. It’s why we let the Federal Reserve have its way with the money and the economy, without recourse. It’s why we listen to TA specialists as they try to predict future market performance through their specialized tea-leaf reading exercises.

    The worship of the specialists will ultimately turn out no better than did vesting absolute power in the papacy in the Middle Ages. We need a new Martin Luther.

  6. scepticus says:

    “It just seems awfully complicated now…don’t it.”

    Part of that feeling must come from the fact that even while the velocity of money falls, the velocity of opinion continues to ramp up.

    Perhaps we can all live happily in an economy based on the recycling of stale observations and the leveraging up of dodgy memes, that are re-lent, loaned and deposited ad infinitum through an ever expanding financial and political blogosphere that seems to be eating real life quicker than the banks.

    Personally, I’m looking forwards to the eventual hyperdeflation of assorted experts, idiot savant economists, doomers, gloomers and boomers, the predictions of most or perhaps all of which will turn out to be utterly wrong.

  7. the story on Polymaths was a good one until this:

    “…Specialisation is hard on polymaths. Every moment devoted to one area is a moment less to give over to something else. Researchers are focused on narrower areas of work. In the sciences this means that you often need to put together a team to do anything useful. Most scientific papers have more than one author; papers in some disciplines have 20 or 30. Only a fool sets out to cure cancer, Rees says. You need to concentrate on some detail—while remembering the big question you are ultimately trying to answer. “These days”, he says, “no scientist makes a unique contribution.”

    with nothing but: ““Even in relatively soft fields, specialists tend to develop a specialised vocabulary which creates barriers to entry,” Posner says with his economic hat pulled down over his head. “Specialists want to fend off the generalists. They may also want to convince themselves that what they are doing is really very difficult and challenging. One of the ways they do that is to develop what they regard a rigorous methodology—often mathematical.

    “The specialist will always be able to nail the generalists by pointing out that they don’t use the vocabulary quite right and they make mistakes that an insider would never make. It’s a defence mechanism. They don’t like people invading their turf, especially outsiders criticising insiders…”

    to attempt to question the Status Quo of ‘Specialization’…

    and this summation: “The world may well be a better place for the specialisation that has come along instead. The pity is that progress has to come at a price. Civilisation has put up fences that people can no longer leap across; a certain type of mind is worth less. The choices modern life imposes are duller, more cramped.

    The question is whether their loss has affected the course of human thought. Polymaths possess something that monomaths do not. Time and again, innovations come from a fresh eye or from another discipline. Most scientists devote their careers to solving the everyday problems in their specialism. Everyone knows what they are and it takes ingenuity and perseverance to crack them. But breakthroughs—the sort of idea that opens up whole sets of new problems—often come from other fields. The work in the early 20th century that showed how nerves work and, later, how DNA is structured originally came from a marriage of physics and biology. Today, Einstein’s old employer, the Institute for Advanced Study at Princeton, is laid out especially so that different disciplines rub shoulders. I suspect that it is a poor substitute.

    Isaiah Berlin once divided thinkers into two types. Foxes, he wrote, know many things; whereas hedgehogs know one big thing. The foxes used to roam free across the hills. Today the hedgehogs rule.”

    should be worries that great minds are cast asunder, still, let us not be too harsh in considering the dyspeptic dysfunctional dystopia (to be alliteratively redundant) that ‘our Institutions’ have created of us, for us, we can, if we ever learn to remember, be wistful for a past age and draw, empty, succor from pitying the cost..


  8. Mannwich says:

    Guest post by your buddy Dylan Ratigan over at ZH:


    BR: Same link as above

  9. call me ahab says:


    Ratigan is turning into quite the firebrand

  10. call me ahab says:

    “Kneale: Why Apple Is the World’s Best Retailer”

    if i was holding AAPL- this alone would make me question whether i should continue holding

  11. bubba says:


    re ratigan

    i’m actually tired of these rage-against-the-machine railings. yeah, the who system is fubar, we know. public option is not ideal — no shit sherlock. but what’s the alternative? single payer? is that gonna fly with the lunatic fringe? i didn’t see anything in his rant about a realistic workable alternative, or anything resembling a proposal about what we should do.

  12. Mannwich says:

    @bubba: I agree but actually think a real public option with teeth (this one doesn’t have any, it’s merely wind0w-dressing to appease some lefties in the short term) could work (single payer would be ideal), but the while system needs an overhaul. Just like everything else right now (Wall Street, the environment, etc.), there are just too many entreched self-interested party to enact real change that matters until things are far worse than they are now.

    I have one question though – if Congress were serious about enacting real, substantive health care reform that works reasonably well, why not travel to places like Canada, France, Switzerland, the Netherlands, and other countries where their systems seem to do a pretty good job, and certainly far better than ours? Why not take parts of their systems, make it our own, and in the process completely overhaul the system for the country’s betterment? Answer: because they’re not serious about doing anything substantive to fix the system and piss of their masters. They’re just trying to appease enough people without pissing off their real supporters, the corporations and their lobbies.

    What I gleaned from the great New Yorker article that you posted last week that our problems are mainly one of cultural inertia, so until the grip that those who favor the status quo have on our country is broken, all of this chatter about it is actually a big waste of all of our time. Real change comes from We the Sheeple. Until enough of us demand that, then nothing will change. Knowing that, I may have to join CNBC Sucks soon and go into “FASHION FORWARD” hibernation for a while.

  13. Mannwich says:

    Sorry for the typos above. Never did get good grades in typing class. Mediocre.

  14. bubba says:

    “I have one question though – if Congress were serious about enacting real, substantive health care reform that works reasonably well, why not travel to places like Canada, France, Switzerland, the Netherlands, and other countries where their systems seem to do a pretty good job, and certainly far better than ours? Why not take parts of their systems, make it our own, and in the process completely overhaul the system for the country’s betterment?”

    by congress, i assume you mean the dems…cuz the repubs aren’t interested in fixing healthcare, or ANYTHING for that matter. i like your proposal, but is that really going to fly here in amurica, when you have the loud minority, too stupid to think for themselves, labeling this as socialism? a complete overhaul, while much needed and would be most sensible, is just not going to happen given the political realities. btw, the whole public option discussion may be moot now that the senate finance committee has effectively voted it down (with help from a handful of the dems).

  15. Thor says:

    Manny – very good points. As to the typos. Better than what I got in school. Scrawled across every paper I ever turned in, usually underlined several times. PENMANSHIP!!!!

  16. Jeff,

    this: Knowing that, I may have to join CNBC Sucks soon and go into “FASHION FORWARD” hibernation for a while.

    has been something crossing my mind, as well.

    FF may have been one of CNBC S’ best ideas, yet.

    In one sense, those DWTS-gazers need something wear, might as well design, and sell, a line of clothing to them, et al..

    and, in another sense, now that ‘green-washed’ has replaced ‘acid-washed’ as the rinse du jour, there are, ever burgeoning, opportunities opening up–even Mercury-filled CFLs gain the ‘green-washed’ bark from the ‘approval’ seals..

  17. KidDynamite says:

    today’s release by the FDIC:

    is probably the most important news story of the past 3 months. there’s a lot of information in there – i wrote a post about it if you can’t figure it out.

    this is a MAJOR FREAKING STORY! the FDIC is giving you the truth about the financial picture: they are still increasing loss estimates – they tell you about their illiquid collateral… huge.

  18. Marcus Aurelius says:


    Thanks for the link.

  19. MR-

    nice link~ as we should be reminded: “Knowledge is Power”, and, as his story illuminates “Power is Freedom”.

    maybe we should understand , and export them, instead of nascent-Industry destroying Crop-surpluses and Used Clothing (?)

    maybe that would be, too heavy, a mirror of our own Ignorance?

  20. call me ahab says:

    KD-i read your condensed version- thanks- everything comes down to the fact that the banking system is BK- with liabilities exceeding assets due to securities that have zero market value


    good little human interest story there- kid must be pretty bright to be able to pull that off from just a magazine

  21. call me ahab says:

    for the brave- does not appear to be in real terms- but frightening nonetheless- especially the tax implications-

    hat tip Marcus Aurelius

  22. willid3 says:

    one theory on the mess


    BR: And the correction of that theory:

    Can Irrationality Be Rational?

  23. wunsacon says:

    Without the polymaths, who’s looking out for the Big Picture? Huh, Barry?? You “lawyer”, “investor”, “blogger”, you.

  24. call me ahab says:

    willid @ 8:06-

    sadly- he was only speaking the truth- look what that gets you- my guess is he will land somewhere where the truth is valued-

    good for him for saying what he believed

  25. wunsacon says:

    OF COURSE, the income gap widened. And we blew a historic chance to reset the wealth gap. Had every bank and business failed, most people would be worth just the maximum guaranteed by the FDIC or SIPC (multiplied by their *number* of accounts).

    The bailouts, as conceived and implemented, were overwhelmingly oligarchical.

  26. David Merkel says:

    Thanks, Barry. My post got more attention than I would have predicted.

  27. keithpiccirillo says:

    On the article of inquisitiveness.
    Why and how can one be a child but not childlike?
    It’s a tough job but somebody has to do it, and as an adult playfulness and a sense of humour are important catalysts.

  28. beaufou says:

    The FDIC already have an approved line of credit with the treasury.
    Why on earth are they complicating the matter by asking banks for pre-payments?

    Did I miss an episode?

  29. bubba says:


    tried to reply to your post, but i guess it didn’t get pass barry’s filter. prolly on account that it included the word soc!lism. in short, i like your idea but it’s not going to happen here on account of the loud minority too stupid to think for themselves.

  30. jonagil says:

    The intelligent life and HBR posts make a nice couplet. Polymath enables Associating. Not just good for innovating, but also key to investing…

    Barry, I know you essentially play the role of editor when you post your daily links. I’m curious whether you consciously assemble themes, or whether it’s the result of unconscious randomness.

  31. Mannwich says:

    @bubba: Looks like it’s there now. Sadly, I agree with you. Looks like things aren’t nearly broken enough, and our populace nearly smart enough, for real, substantive change to happen. Not there yet. Could take a lot longer than I had thought or hoped.

  32. investorinpa says:

    This is the ultimate in sucker investments…great article on people losing their shirts because they bought the dumb investment known as a time share!

  33. lhenriquez says:

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