Afternoon train reading:

• Parallels Between China And Pre-Crash Japan: Déjà Vu All Over Again (Patrick Chovanec)
Liesman vs Achuthan: Why investors should be terrified of certainty (Interloper)
• Small Banks on Occupy Wall Street’s “Move Your Money Day” (Fast Company)
Nassim Taleb: End Bonuses for Bankers (NYT)
• Apple: For What It’s Worth, Part II (Jeff Matthews Is Not Making This Up)
Steven Pearlstein: You bet it’s another bubble (Washington Post) but see The Extraordinary Popular Delusion of Bubble Spotting (WSJ)
• High Bank Fees Give Wal-Mart a Money Aisle (NYT)
• Did Fannie Cause the Disaster? (NY Review Of Books) see also WaMu Bank Executives Knew of Rampant Fraud, Yet Failed to Act (Alter Net)
• How Jonah Hill Became An Action Hero In Call Of Duty Modern Warfare 3 [video] (Fast Company)
• Louis CK’s next comedy special: It’s not TV, it’s NOT HBO. It’s online. (Pop Watch)

What are you reading?

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Source: The Reformed Broker

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.

19 Responses to “10 Tuesday PM Reads”

  1. dpharris says:

    RE: Bubble Spotting

    I think a big lesson we should learn from the last recession is connecting the dots between the business cycle, aggregate credit growth relative to GDP, and interest rates set by central banks. This needs to be part of the Fed’s decision making process.

    If you control credit growth you cut off some bubbles before they start (Ex. – access to credit allowed home prices to rise, access to student loans allows tuition to rise, on the flip-side raising margin requirements can cause commodity prices to fall.

    Further, speculative bubbles that aren’t financed with borrowed money are a lot less traumatic for the broader economy (ex – tech bubble).

  2. DeDude says:

    It is really sort of sad that we have so many people for whom it is a completely foreign concept to be fighting for what is right for your country, even if that is not serving your own personal self interest. But I guess that sort of defines todays conservatives in contrast to the GOP of old days.

    http://krugman.blogs.nytimes.com/2011/11/08/i-do-not-think-that-word-means-what-politico-thinks-it-means/

  3. Bill Wilson says:

    HarrassMint Chocolate Chip, don’t settle on anything else.

  4. poakland says:

    Wouldn’t that be Herass Mint Chocolate CHip

  5. deanscamaro says:

    Rapper Heavy D dies………AHHH……….soooooo!?!? What’s the news???

    http://www.cnn.com/2011/11/08/showbiz/ent-heavy-d-dead/index.html?eref=mrss_igoogle_cnn

  6. Transor Z says:

    I’ve often wondered about Gretchen Morgenson, the way so many of her pieces miss the mark or seem to come up just short of reaching the conclusions that seem so obvious. Now I know.

  7. Bill in SF says:

    OMG… Joe Walsh didn’t just repeat the Big Lie, he had a major meltdown while doing so with constituents in a Chicago bar last Sunday.

    http://www.youtube.com/watch?v=gmjdl4RdIBU&feature=player_embedded

  8. louis says:

    For those that think Fannie caused the crisis, they need your help again.

    http://news.yahoo.com/fannie-mae-loss-widens-asks-taxpayers-7-8b-221752510.html

  9. GeorgeBurnsWasRight says:

    If the Japanese authorities couldn’t see what was happening, what chance do the Chinese have of getting adequate data to manage their economy.

  10. algernon says:

    So Countrywide Financial sold nearly all their loans to Fannie & Freddie–with their implicit govt guarantee, but that had no effect? Right.

    Central bank loose money policy was the sine qua non of the bubble, but you cannot say Fannie, Freddie, etc. didn’t exacerbate it.

  11. alg…..,

    “Elastic Currency” leads to “Elastic” *Rules..

    and, further, yes, you bet, that “Fannie & Phraudie” exacerbated ‘the Scene’..

    ex·ac·er·bate (g-zsr-bt)
    tr.v. ex·ac·er·bat·ed, ex·ac·er·bat·ing, ex·ac·er·bates
    To increase the severity, violence, or bitterness of; aggravate: a speech that exacerbated racial tensions; a heavy rainfall that exacerbated the flood problems.

    ——————————————————————————–

    [Latin exacerbre, exacerbt- : ex-, intensive pref.; see ex- + acerbre, to make harsh (from acerbus, harsh; see ak- in Indo-European roots).]

    ——————————————————————————–
    http://www.thefreedictionary.com/exacerbated

  12. Mike in Nola says:

    @Algernon – It was easy to sell loans to Fannie and Freddie; just lie about the underwriting. That’s why there are big putback cases against BAC.

  13. Futuredome says:

    lol. F/F is asking for more money because they keep being dumping grounds of the “private” market’s crap on their balance sheet. [BR: see this F&F and the Backdoor Bank Bailout and this GSEs: $1 Trillion Dumping Ground for Bad Bank Loans] This has been going on since late in 2008. Basically private creditors needing a refuge from their bets in the short run.

    “Further, speculative bubbles that aren’t financed with borrowed money are a lot less traumatic for the broader economy (ex – tech bubble)”

    Misses the point. If you only growth is from credit, something is wrong in the first place. You can restrict the credit, but you are creating a crisis as that creates more debt as the economy stagnates. The 19th century and great contraction prove this point. You force less credit in the early 00′s, you deepen the recession and lift debt levels needlessly. The real problem isn’t central bank credit easing (which wasn’t that impressive as you suggest) but the end of the information boom in the first place which spawned your ‘tech bubble’ and created excess savings for the investor class by the early 00′s.

    Bubbles are hardly new. We have had them since the beginning of capitalism. Some are harder to deal with than others (like the latter quarter of the 19th century proved). A lot of the “stagflation” era blame was put on high worker savings which intellectuals blamed for leading toward a lack of investor savings and spurned high inflation. So we have slammed labor the last generation and given everything to the invester class.

    The real problem is handling the issue of excess savings by “sections” of the economy. If they are not invested right, problems begin. Which leads you to the finance/offshoring boom in the first place. Now they no longer give any benefit except credit deflation and collapse. The investor class misallocated. Period. They looked for to high a return and went for the easy lay. Instead of investing in longer turn business that takes a while to mature.

    If you went a real anti-capitalist view: real corporate profits have been declining since after 1979. What happened after that year?

    ~~~~

    BR: great points!

  14. formerlawyer says:

    @Bill in SF Says:

    OMFG! Joe Walsh, the deadbeat dad shouting down his voters! Recall the bastard.

  15. frodo1314 says:

    I know I’ll just be accused of being a dyed in the wool conservative – which I’m not – but I just find the treatment of Cain incredible. If he were a Democrat the media and punditry throughout the country would be screaming RACISM at the top of their lungs. The blatant bias is just too much.

  16. AHodge says:

    Letter of Harvard Econ students to professor mankiw
    Today, we are walking out of your class, Economics 10, in order to express our discontent with the bias inherent in this introductory economics course. We are deeply concerned about the way that this bias affects students, the University, and our greater society.As Harvard undergraduates, we enrolled in Economics 10 hoping to gain a broad and introductory foundation of economic theory that would assist us in our various intellectual pursuits and diverse disciplines, which range from Economics, to Government, to Environmental Sciences and Public Policy, and beyond.

    Instead, we found a course that espouses a specific—and limited—view of economics that we believe perpetuates problematic and inefficient systems of economic inequality in our society today.A legitimate academic study of economics must include a critical discussion of both the benefits and flaws of different economic simplifying models.

    As your class does not include primary sources and rarely features articles from academic journals, we have very little access to alternative approaches to economics. There is no justification for presenting Adam Smith’s economic theories as more fundamental or basic than, for example, Keynesian theory

  17. VennData says:

    “…Under existing law, the (upper income, ‘temporary” Bush tax cut for the rich) rate is scheduled to rise to 39.6 percent in 2013…”

    http://www.nytimes.com/2011/11/09/us/politics/both-sides-on-deficit-panel-seeking-to-avoid-blame.html

    The Koch brothers and the rest of the GOP media machine had better compromise on letting rates rise on the uber rich or they will be sucking on 40%.