These are the most interesting reads I came across today:

• Why the Doomsayers Are Wrong (WSJ)

• Crisis Awaits World’s Banks as Trillions Come Due (NYT)

• Fleck: Tech is the market’s best bet right now (MSN Money)

• Global Unemployment Rate Race (economix)

Caroline Baum: Double-Dippers Are All Wet Ignoring Yield Curve (Bloomberg)

• Mortgage-Implode to Face Bankruptcy due to SLAPP Lawsuit (ML-Implode)

• The Market Confidence Bugaboo (Dani Rodrik)

• Obscure book by British adviser becomes cult hit after Warren Buffett tip (Telegraph)

• Historic oil spill fails to produce gains for U.S. environmentalists (Washington Post)

• A Scientist Takes On Gravity (NYT)

• Porsche 918 Spyder May Cost $630,000, Top Carrera GT (Bloomberg)

What are you reading ?

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.

37 Responses to “Tuesday Readings”

  1. Free speech online requires anti-SLAPP legislation
    Federal response needed to stop meritless lawsuits intended to silence critics
    By Paul McNamara on Tue, 06/01/10 – 5:58am.

  2. Lariat1 says:

    When your kid asks if you ever smoked pot.

    If only he really knew the big picture from way back when.

  3. NoKidding says:

    Re: Historic oil spill fails to produce gains for U.S. environmentalists

    The article says “historians say they’re facing a political moment deadened by a bad economy, suspicious politics and lingering doubts after a scandal over climate scientists’ e-mails”

    Not even a burried-at-the-bottom mention that the liberal press might not want to be stirring up blame and outrage game going into election season while liberals are in control?

    Before the ususl replies hit: yeah Fox News was saying nothing about Iraq casualties when that other guy was president, but they sure do now. Everyone does it, but that doesn’t change the smell.

  4. tradeking13 says:

    Products made in China often cost more there than in the West,0,1615376.story

  5. Lariat1 says:

    This is so sad. Can anyone explain why we are in this mess, excluding greed and stupidity?

  6. napster says:

    I apologize if someone already mentioned John Hussman’s July 6 Weekly Market Comment, but for those who may not have read it …

    Here is one of many money quotes: “Apart from encouraging investors to review their risk exposures, my other hope is to encourage a more constructive policy response than we observed last year. To-date, our policy makers have placed bondholders ahead of ordinary citizens, largely out of fear of disastrous consequences predicted by precisely those who stood to benefit most from government largesse. We have directed massive and ultimately real (not simply “paper”) resources of the public to ensure that holde rs of bank debt, financial debt, and GSE debt get back 100 cents on the dollar plus interest.”

    The comment is it’s usual length, about 10 pages in print length, but I personally find the perspective an extremely relevant addition to the thought process about the Zeitgeist of our economic situation.

  7. swag says:

    How Facts Backfire

    “In a series of studies in 2005 and 2006, researchers at the University of Michigan found that when misinformed people, particularly political partisans, were exposed to corrected facts in news stories, they rarely changed their minds. In fact, they often became even more strongly set in their beliefs. Facts, they found, were not curing misinformation. Like an underpowered antibiotic, facts could actually make misinformation even stronger.”

  8. call me ahab says:


    that WSJ article- if you can call it that- what a sophomoric defense of the bull case-

    pathetic, pandering puffery meant as a quick read for the basically (now) moronic readers of the WSJ

  9. jeg3 says:

    Not a favorable mass media review, no wonder mass media is on the attack with regard to free speech and blogs:

    “Interview with Thomas Cleary”, translator of “The Art of War”

    I’m waiting for BR’s translation:

    Never thought I would see this:
    “Napolitano: They should have been indicted. They absolutely should have been indicted for torturing, for spying, for arresting without warrants.”

    And finally Krugman giving the Hayekians a schlacking:

  10. Jojo says:

    This site has good articles but I rarely see them referenced:
    Political Calculations
    July 12, 2010
    Tax Gouging the Poor and the Middle Class

    In 2003, Congress enacted across-the-board cuts in the tax rates paid by all income earners in the U.S. that are set to expire at the end of 2010. Many have been expecting that the current Congress would act to keep tax rates where they were set for those at the lowest end of the income spectrum, while letting rates go back to their pre-2003 levels for those at the highest end.

    What if they’re wrong and the current Congress chooses not to act? After all, it’s not like they’re going to get around to passing a budget in 2010, so why not also take another pass on the opportunity to keep tax rates low?…

    That’s the possibility we’re looking at today in considering what the raw impact would be if, rather than reining in excessive spending, the 111th United States Congress instead opts to attempt to reduce the annual federal government budget deficit by doing nothing to stop all the 2003 tax rate cuts from expiring.

  11. Jojo says:

    Robert Reich
    The Root of Economic Fragility and Political Anger

    Tuesday, July 13, 2010


    Missing from almost all discussion of America’s dizzying rate of unemployment is the brute fact that hourly wages of people with jobs have been dropping, adjusted for inflation. Average weekly earnings rose a bit this spring only because the typical worker put in more hours, but June’s decline in average hours pushed weekly paychecks down at an annualized rate of 4.5 percent.

    In other words, Americans are keeping their jobs or finding new ones only by accepting lower wages.

    Meanwhile, a much smaller group of Americans’ earnings are back in the stratosphere: Wall Street traders and executives, hedge-fund and private-equity fund managers, and top corporate executives. As hiring has picked up on the Street, fat salaries are reappearing. Richard Stein, president of Global Sage, an executive search firm, tells the New York Times corporate clients have offered compensation packages of more than $1 million annually to a dozen candidates in just the last few weeks.

    We’re back to the same ominous trend as before the Great Recession: a larger and larger share of total income going to the very top while the vast middle class continues to lose ground.

    And as long as this trend continues, we can’t get out of the shadow of the Great Recession. When most of the gains from economic growth go to a small sliver of Americans at the top, the rest don’t have enough purchasing power to buy what the economy is capable of producing.

  12. Jojo says:
    July 12, 2010

    Credit scores sink to new lows
    About 25.5% of Americans had credit scores below 600 in April, according to FICO Inc. Historically, only about 15% of consumers have had scores below that level.,0,1240553.story

  13. June 10, 2010

    “Last week, Barry Callebaut AG, the world’s leading manufacturer of cocoa and chocolate products, officially opened its new chocolate factory located in Extrema, Minas Gerais, near São Paulo — the company’s first chocolate factory in South America. According to Barry Callebaut, the factory marks another cornerstone in its strategy to “selectively expand its geographic presence to emerging markets that offer above-average growth opportunities.”

    The $15-milion chocolate factory in Extrema has been designed to meet the highest quality and food safety standards. The plant has an initial production capacity of 20,000 tons, which easily can be doubled based on demand. In addition, 70 new jobs were created as a result of the investment.

    The new factory will make high-quality dark, milk and white chocolate as well as compound for artisanal and for industrial customers, but no end-consumer products. Capacity utilization at the plant is expected to rise rapidly. Eighty percent of the factory’s production is targeted toward the rapidly growing food service market, which includes restaurants, fast food restaurants, bakeries, pastries, in-store bakeries, caterers, hotels, chocolatiers, and hospital and school canteens.

    For the distribution of food service products manufactured in Extrema, Barry Callebaut has signed an exclusive distribution agreement in 2009 with Bunge, a leading agribusiness company. Every day, Bunge serves about 25,000 points of sale in Brazil.

    “Brazil is the fifth-largest country in the world with a population of more than 190 million, and the country has returned much faster to its earlier growth dynamic than most other economies after the recent economic turmoil,” Barry Callebaut CEO Juergen Steinemann said at the grand opening.

    “In addition, the Brazilian government as well as the International Monetary Fund (IMF) are expecting a GDP growth of up to 6% for 2010,” Steinemann explained. “Against this background, and based on growth forecasts for the Latin American chocolate market of more than 3% in volume terms [Source: Euromonitor International] annually over the next three years, we see a tremendous market potential — not only in Brazil but in the entire region. Seventy-five percent of the Brazilian GDP is generated within a radius of 500 kilometers from Extrema.

    “With our existing cocoa factory in Ilhéus, Bahia, and now our new chocolate factory in Extrema,” he continued, “we are close to our local customers and well positioned to achieve our goal to also become the No 1 chocolate supplier to Brazil’s fast-growing food service industry.”

    Barry Callebaut has been present in Brazil with a cocoa factory in Ilhéus, Bahia, since 1999 and employs more than 300 people in the country. Today, the company operates nine cocoa and chocolate factories across the Americas.
    For more information, visit
    Aug. 4, 2005 (Bloomberg) — “… Chicago, the home of the largest U.S. candy industry, next year will lose a Wm. Wrigley Jr. Co. plant that has made chewing gum such as Spearmint and Juicy Fruit for 94 years.

    Wrigley’s decision to close the plant followed exits by the makers of Fannie May and Brach’s candies in the past two years. Confection-industry jobs in the Chicago area fell by 44 percent since 1995.

    Sugar prices contributed to the departures, Puch said. The sweetener is more expensive in the U.S. than elsewhere, and the government helps support prices by lending money to processors to make purchases.

    Wrigley, the world’s largest chewing-gum maker, said June 29 that it will end production at the Chicago plant after buying Kraft Foods Inc.’s candies, such as Altoids and Life Savers. The company also will shut down facilities in Edison, New Jersey, and Bridgend, Wales, and eliminate about 500 jobs.

    Jobs Lost

    Archibald Candy Corp., which started making Fannie May and Fanny Farmer chocolates in 1920, closed its 70-year-old Chicago plant after filing for bankruptcy in January 2004. The facility employed about 625 people. Alpine Confections, based in Salt Lake City, later bought the company for $38.9 million.

    Brach’s Confections Inc., founded in Chicago in 1904, was purchased by Zurich-based Barry Callebaut AG in September 2003. Callebaut, the world’s largest producer of bulk chocolate, shut Brach’s operations in the city last year and shifted production to facilities in Chattanooga, Tennessee, and Linares, Mexico.

    Confectionary jobs in Cook County, which includes Chicago, fell to 5,738 last year from 10,170 in 1995, according to the Illinois Department of Employment Security.

    Chicago became the candy capital of the U.S. during the early 1900s because its railyards provided access to shipping and supplies and its Midwestern location allowed them to buy corn syrup, a sweetener, at relatively low cost.

    Bulk Discounts

    …To stay profitable, local candy makers combined to obtain bulk discounts on supplies such as vanilla extracts, according to the Candy Institute of Chicago, which promotes the city’s confectioners.

    “Companies tend to prosper where there are lots of other people in the same industry because there’s the technology, the consultants and the suppliers all there,” said Dave Phleger, a consultant to the institute for 10 years.

    China Plant

    At Primrose, Puch has boosted sales by making treats laced with medicine for drug companies. About 25 percent of Primrose’s sales now come from “nutraceuticals,” candies with ingredients such as vitamins, herbal remedies or appetite suppressants.

    The company also has cut expenses by letting its workforce in Chicago dwindle through attrition. There are now 140 workers, down from 220 in 2000, Puch said.

    Primrose recently opened a factory in China’s Guangdong province, near Hong Kong. The plant can make as much as 20 million pounds of candy annually, or two-thirds of the 30 million produced in Chicago, and is currently operating at a quarter of its capacity.

    “We’re all more afraid of foreign competition than we are of competition with each other,” Puch said. “The foreign competition is the scary one because we’re at such a competitive disadvantage.”

    Costly Sugar

    U.S. sugar prices are a reason. Puch said he and other candy makers pay about 30 cents a pound, three times what the makers of chocolates and hard candies pay in Canada, Mexico and South America. World sugar futures for October delivery traded yesterday at 10.2 cents a pound on the New York Board of Trade.

    The government makes loans to processors for purchases of U.S.-grown cane sugar at 18 cents a pound and U.S.-grown sugar beets at 22.9 cents a pound, according to the Department of Agriculture. The government also restricts imports from countries such as Brazil, the world’s largest producer.

    Chicago’s candy industry would undergo a resurgence if sugar was cheaper, Puch said. Companies such as Primrose that have survived would increase production in the city immediately, he said.

    “Before the global competition, there was more camaraderie,” he said. “It was easier to get things done, there were more suppliers and more variety of companies to do business with. That’s all gone by the wayside.”

    To contact the reporter on this story: Kevin Orland in Chicago at

    How, is it, again, do We ‘create Jobs’ ?

    File under: Ripley’s, if One must, but it isn’t, Really, a F___in’ Mystery..

  14. BR,

    sorry for ‘square-footage’.. ~

  15. call me ahab says:

    <a href=";Ecology of the Mind

    . . .”we are witnessing the birth pangs of the quintessential uprising of the 21st century. What will come is a rewilding of our souls, a riot against the production of fake corporate and commercial meaning. What begins here today will be known as the environmental movement of the mind.”

  16. wunsacon says:

    Hey, look! The Feds have time to prosecute pornography:

    MEH, interesting stuff there. The emerging markets will perhaps keep more of their raw materials at home and use them there? Good for them…

    Ahab, Adbusters’s artistic presentation (especially in the hard copy) of progressive messages can be pretty entertaining.

  17. Mike in Nola says:

    For the gadget minded, there’s a video demo of the Windows Phone 7 interface which is very unlike the competing platforms and has integrated a number of things very well.

    I haven’t been too enthused about it since I’m a hacker at heart and want something I can freely customize while MS seems to be locking down the new platform to make it less easy to screw up. Android seems to be the successor to Windows Mobile in that regard. However, the interface is pretty slick and I could be tempted. Well, my contract isn’t up til Oct. I had gotten a 1 year since I knew there would be a slew of new phones of various platforms to choose from at that time.

    Anyway, here’s the link. The phone presentation starts at about 51 minutes or so.

    Another interesting feature MS is throwing in is 25GB of cloud storage for your pics, music or whatever and it can sync from their to your other machines.

  18. mad97123 says:

    Regarding ‘Double-Dippers Are All Wet Ignoring Yield Curve’, this is the most lame attempt at reasoning I’ve seen in quite a while.

    “The yield curve has inverted prior to all of the last seven recessions, with no false signals since 1967, according to Estrella…..That’s the message of the yield curve. Its track record is impeccable. It beats forecasters, econometric models, even the Fed, which seems to resist the inherent message in the spread.”

    Rates have NEVER BEEN ZERO BEFORE (i.e. read we’ve never been in this big a mess before), so all the data since 1967 is irrelevant. Rates across the curve are at historic lows and aggregate credit is still contracting. Very stimulating indeed.

    Maybe the yield curve has been a good predictor under past circumstances, but past circumstances have never warranted zero rates, so what conclusions can be drawn for this, the very first zero rate data point? Nothing, other than that the Fed is scared of a double dip more than inflation.

  19. Mike in Nola says:

    mad: ZH mentioned that Rosie had already said the the yield curve would be inverted if the Fed hadn’t instituted ZIRP on the short end. Didn’t notice that Rosie had said it but it sounds pretty reasonable:

  20. Detroit Dan says:

    More reasons to be bearish, I’m afraid. How could anyone believe that the current situation is any different than the 2007-2008 situation? Reich is right on the money. Thanks for the link Jojo…

  21. paulyarbles says:

    Depressing read:

    After extensive investigation into conditions at the St. Tammany Parish jail, today the ACLU of Louisiana sent a letter to St. Tammany Parish Sheriff Jack Strain and Parish President Kevin Davis, demanding an end to the practice of caging suicidal prisoners in “squirrel cages.” After the jail determines a prisoner is suicidal, the prisoner is stripped half-naked and placed in a 3′ x 3′ metal cage with no shoes, bed, blanket or toilet, according to numerous interviews conducted with current and former prisoners. Prisoners report they must curl up on the floor to sleep because the cages are too small to let them lie down. Guards frequently ignore repeated requests to use the bathroom, forcing some desperate people to urinate in discarded containers. The cages are in a main part of the jail, allowing other prisoners to gawk at those confined in these cages. People have been reportedly held in these cages for days, weeks, and months.

    Not-so-depressing read:

  22. paulyarbles says:

    Ooo… ooo… ooo… and how about this…

    If you don’t believe in God, you have no meaning in your life, and you will thus search for meaning, and you will find it anywhere. Most people, even atheists, want religion of some kind in their life. Hello, global warming, as a substitute — apparently unrecognized and not even organized — religion. Yet it is. So you can set the stage for more people, if the atheists were to ever get their way, of establishing global warming as an unofficial religion that does force people to behave in religious ways just to a false god: the earth, a tangible god. By the way, there’s another thing, another character that all major religions require, and the same thing can be said of manmade global warming, and that characteristic that both require is “faith.” Because, when you get down to it, nobody can prove their religion is true. That’s why there is faith, and that’s why faithful people frighten those who have no faith, because faithful people realize there’s something larger than themselves. The global warming people essentially are atheists. You cannot believe in the God of Creation and believe manmade global warming. You just can’t. You might run around and say, “I don’t want to destroy God’s creation.” God’s laughing at you. You can’t! He could, but you can’t. You can’t create it; you can’t destroy it. You might be changing it. We adapt to it. We have to adapt to it. Every living thing has to adapt to nature in order to thrive.

  23. FrancoisT says:


    La Tentation Totalitaire (The Totalitarian Temptation ) by Jean-Francois Revel. Written in 1976, but man! his insights still hold 34 years later and one continent away from Europe. — Health Insurance corporations are consolidating into an oligopoly. Yup! That means more pain for everyone who doesn’t have mucho dinero, a.k.a. most of us. But, with a population replete with deep-seated prejudices and a political system bought and paid for by the monied interests, single payer is an impossibility anyway. So, prepare to suffer even more,…bitches!

  24. Jim67545 says:

    BR (teasing)
    The article on Bugaboo, if you went down a couple articles, there was one postulating that the housing bubble was an attempt by government to adjust the income inequality in this country by boosting (and therefore stretching underwriting) home ownership among the lower income. The author does not utter the acronym CRA but…. if it quacks like a duck…

  25. alfred e says:

    @ahab: Ecology of the Mind blew me away..

    Dead on. Been having those thoughts for a long time.

    Feeling more like part of the matrix everyday.

    Thanks. I think.

  26. wunsacon says:

    paulyarbles, wow, shocking/interesting stuff there, too.

  27. Canadians snap up U.S. properties

    Study says Canadians have become the
    biggest foreign buyers of U.S. real estate

    The beavers are taking over folks. We will soon own everything. Not just comedy. Then we will stop sending you cars. Of course, we might be a little more lenient if Barry were to restore smileys

  28. DiggidyDan says:

    for the devil’s advocate argument, food for thought on the current valuations of the stock market in juxtaposition with the current interest rates:

    I found it interesting, and it’s from a rather fact based source.

  29. Mike in Nola says:

    Common Man:

    If Canadians are holding up the market, then we are surely in for a downturn there. The Canadian RE bubble is popping. When we were in Vancouver last fall, the place looked like pictures I’ve seen of Miami: condos going up all over. Prices were outrageous and continued to climb til recently. Last monthsales of previously owned homes in Vancouver dropped 30%.

    Cute video here:

  30. Mike,

    I’ve seen that video. It is good. I live in Van and we are definitely coming off the top here. The cranes have been that way for a long time now. We are a young, growing city just entering into it’s heyday due to mild climate and good geography. Plus we are the gateway to Canada from both China and India so our prospect for the future are phenomenal. Vancouver is definitely in a special category. I’d put her boom bust cycle more in the line of world class cities than Canadian ones or even North American ones

    Last month’s sales were a bit of a technical glitch due to both Provincial and Federal governments changing tax rules so sales were rushed

  31. beaufou says:

    Nice link, I was recently reading an article on the subject but with a different approach (an astrophysicist comparing the evolution of civilization with thermodynamics).
    Surprisingly or maybe not, he comes to the same conclusions.
    The thing is in french but i could translate if you’re interested.

  32. mark says:

    Br – what, exactly, was interesting about Caroline Baum’s piece? She doesn’t understand (or acknowledge) that we are in a liquidity trap and doesn’t understand that there is nothing about any of the last seven recessions (since 1967, she says, since WWII, I would say) that are in any way comparable to the current one. How many times did Japan’s yield curve invert since 1990? And yet they find themselves in a seemingly never ending liquidity trap, deflation and recession after recession after recession.

  33. mark says:

    And to those who would read “the obscure book by British adviser” I suggest that you also read Liaquat Ahamed’s not so obscure, Pulitzer Prize winning “Lords of Finance – The Bankers Who Broke the World”.