My morning reads:

• Avoiding unforced errors in investing (Abnormal Returns)
• The Perils of Prophecy (Project Syndicate)
• Barclays’ gift to private antitrust plaintiffs in Libor case (Reuters)
• Europe’s Mightiest Banks Still Grapple With Crisis (NYT) see also European Banks Are Facing More Pain In Spain (WSJ)
• Krugman & Layard: A manifesto for economic sense ( see also Europe’s Optional Catastrophe (Foreign Affairs)
The Lipstick Indicator: Lipstick, the Recession and Evolutionary Psychology (Scientific American)
• More Housing Optimism: After Years of False Hopes, Signs of a Turn in Housing (NYT) this is misplaced IMO
• Obama and Roberts Legacies Are Intertwined (WSJ) see also Obama’s Legacy at Risk After Winning Health-Care Fight (Bloomberg)
• In China, Banks Pitch Yield (WSJ)
• Analysts Hit the Tepid Button on Facebook (WSJ) see also Twitter prepares curbs on hate speech (

What are you reading?

World GDP

Source: Economist

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.

15 Responses to “10 Thursday AM Reads”

  1. Herman Frank says:

    Perhaps that I mentioned it in the wrong place on your website for you to notice, but your quote of the day is accredited to a non-existent person; however, if you add an -s- in the name to spell “Erasmus”, you end up with the founder of the Christian Humanists.

    I admit, these days a rare and almost extinct species, but for all what it is worth he was and will be “the Prince of Humanists”. Go to Holland, Germany and Switzerland and you’ll still see his influence in the culture.


    BR: Doh! Thanks for the heads up.

  2. DeDude says:

    The Krugman manifesto and pleading for fact-based economic policy (rather than a “lets-shot-ourselves-in-the-foot-cause-pain-is-good” policy) can be found here (with no need to first register with FT):

    Nice short explanation of what the problem is and what will make them worse. Always puzzled me why people postulating to believe in market forces would think that an increased level of borrowing by government would drive interest rates up at a time when private sector borrowing were plunging and the capital markets were in a decidedly risk-off mode. It’s not just about how much you pour into the bucket its also about how much is running out from each of the holes in it.

  3. Mike in Nola says:

    A shame about the health care ruling. The law was a sellout to big insurers. The best outcome would have been striking it down and putting the single payer option back on the table. Medicare delivers better and cheaper care than insurers, with plenty of freedom to choose doctors.

    I guess we’ll have to wait another few years to see how disastrous the law will be.

    Obama is probably unhappy, whatever he says. Took away a big campaign issue. Running against the Supreme Court as an alleged champion of the people would have distracted the public from the economy.

  4. James Cameron says:

    What should give everyone pause here is that the bank’s initial estimate of the magnitude of the loss may have been so wrong.

    JPMorgan Trading Loss May Reach $9 Billion

  5. Mike in Nola says:

    It does seem that the power of the Empire does have some limits, although I expect it to strike back:

    Wikipedia founder is campaigning to prevent the extradition to the US of a British student who simply provided links to file sharing sites on his website. This was not illegal where he was a citizen, but it was in Hollywood and I suppose we are all citizens of The Empire, whereverever we reside. Such things as sovereignty of other nations don’t matter to President Palpatine, as long as the miscreant is not a banker.

  6. Lyle says:

    The LIBOR issue is a big deal, including that it hurt the financial condition of a lot of cities. Consider that the industry was selling interest rate swaps based upon LIBOR, and then it manipulated LIBOR to favor itself. This is nice work if you can get it, in the tradition of Daniel Drew and Jay Gould of the 19th century. Hopefully some more banks get to pay the big bucks. It also means that the derivatives industry now has a benchmark of questionable repute so it will have to be fixed.

  7. hawleyl says:

    Does the Lipstick Effect conflict with the Hemline Effect? Does more lipstick overcome hemlines that fall with the market?

  8. Mike in Nola says:

    Lyle: As I’ve told Barry time and again regarding the fixing of broken financial mechanisms– you are a hopelss optimist.

  9. Molesworth says:

    @Mike in Nola,
    Don’t disagree, but strike down might have been disastrous for Obama / Dems reelection hopes.
    With Reps, you stand no chance of single payer; with Dems you might get health care law tweak over time after, as you note, it doesn’t work quite the way they thought.
    Best comment was ex exec of health care co (I forget which) who said, yes, the law sucks but more importantly, the health care system sucks even worse. Better to focus on rewarding employees for being healthy rather than fee based fixing of sick people; said 3 1/2 year wasted on political arguing and not fixing the way we manage health.
    He has that right but he misses the point, that so many do, that relying upon employers to provide health care is a stupid, warped system.

    To me, 5-4 vote is bad. Should have been minimally 6-3. Why Roberts couldn’t get Kennedy to join shows a lack of leadership and is a failure on his part.

  10. mathman says:

    i’m not sure which to worry about more, the financial dilemma, or the fact that almost everyone thinks that “everything is under control”, when evidence like this shows that its anything but:

    (via cryptogon)

    Security lapses found at CDC bioterror lab in Atlanta

    “A federal bioterror laboratory already under investigation by Congress for safety issues has had repeated incidents of security doors left unlocked to an area where experiments occur with dangerous germs, according to internal agency e-mails obtained by USA TODAY. In one incident, an unauthorized employee was discovered inside a restricted area.”

    and how about this for your Homeland Security file:

    Top CIA Spy Accused of Being a Mafia Hitman

    “Enrique “Ricky” Prado’s resume reads like the ultimate CIA officer: veteran of the Central American wars, running the CIA’s operations in Korea, a top spy in America’s espionage programs against China, and deputy to counter-terrorist chief Cofer Black — and then a stint at Blackwater. But he’s also alleged to have started out a career as a hitman for a notorious Miami mobster, and kept working for the mob even after joining the CIA. Finally, he went on to serve as the head of the CIA’s secret assassination squad against Al-Qaida.

    That’s according to journalist Evan Wright’s blockbuster story How to Get Away With Murder in America, distributed by Byliner. In it, Wright — who authored Generation Kill, the seminal story of the Iraq invasion — compiles lengthy, years-long investigations by state and federal police into a sector of Miami’s criminal underworld that ended nowhere, were sidelined by higher-ups, or cut short by light sentences. It tracks the history of Prado’s alleged Miami patron and notorious cocaine trafficker, Alberto San Pedro, and suspicions that Prado moved a secret death squad from the CIA to Blackwater.

    “In protecting Prado, the CIA arguably allowed a new type of mole — an agent not of a foreign government but of American criminal interests — to penetrate command,” Wright writes.

    In this sense, there are two stories that blur into each other: Prado the CIA officer, and Prado the alleged killer. The latter begins when Prado met his alleged future mob patron, Alberto San Pedro, as a high school student in Miami after their families had fled Cuba following the revolution. Prado would later join the Air Force, though he never saw service in Vietnam, and returned to Miami to work as a firefighter. But he kept moonlighting as a hitman for San Pedro, who had emerged into one of Miami’s most formidable cocaine traffickers, according to Wright.

    San Pedro hosted parties for the city’s elite, lost a testicle in a drive-by shooting outside of his house, rebuilt his house into a fortress, tortured guard dogs for sport, and imported tens of millions of dollars’ worth of cocaine into the United States per year, Wright adds. His ties reportedly included an aide to former Florida Governor Bob Graham, numerous judges, lobbyists and a state prosecutor. His ties also included a friendship with former CNN anchor Rick Sanchez, then a local TV reporter.

    Prado, meanwhile, was dropping bodies, alleges Wright. Investigators from the Miami-Dade Police Department’s organized crime squad suspected him of participating in at least seven murders and one attempted murder. He attempted to join the CIA, but returned to Miami after not completing the background check (due to his apparent concern over his family ties). But was admitted after the Reagan administration opened up a covert offensive against leftist Central American militants, where he reportedly served training the Contras.

    More startling, the Miami murders allegedly continued after Prado joined the CIA. One target included a cocaine distributor in Colorado who was killed by a car bomb. Investigators believed he was killed over concerns he would talk to the police.

    Years later, in 1996, Prado was a senior manager inside the CIA’s Bin Laden Issue Station, before the Al-Qaida mastermind was a well-known name. Two years later, the bombings of the U.S. embassies in Kenya and Tanzania elevated Prado to become the chief of operations inside the CIA’s Counterterrorist Center, headed by then-chief Cofer Black, later an executive for the notorious merc firm Blackwater. “As the title implied, the job made Prado responsible for all the moving pieces at the CTC — supervising field offices on surveillance, rendition, or other missions, and making sure that logistics were in order, that personnel were in place,” according to Wright.

    Prado was also reportedly put in charge of a “targeted assassination unit,” that was never put into operation. (The CIA shifted to drones.) But according to Wright, the CIA handed over its hit squad operation to Blackwater, now called Academi, as a way “to kill people with precision, without getting caught.” Prado is said to have negotiated the deal to transfer the unit, which Wright wrote “marked the first time the U.S. government outsourced a covert assassination service to private enterprise.” As to whether the unit was then put into operation, two Blackwater contractors tell Wright the unit began “whacking people like crazy” beginning in 2008. Prado also popped up two years ago in a report by Jeremy Scahill of The Nation, in which the now ex-CIA Prado was discovered to have built up a network of foreign shell companies to hide Blackwater operations, beginning in 2004. The Nation also revealed that Prado pitched an e-mail in 2007 to the DEA, explaining that Blackwater could “do everything from everything from surveillance to ground truth to disruption operations,” carried out by foreign nationals, “so deniability is built in and should be a big plus.”

    But it’s hard to say where Prado’s alleged criminal ties end. It’s possibly his ties dried up, or moved on. Even mobsters, like Alberto San Pedro, retire. Another theory has it that Prado wanted to break his ties to the Miami underworld — and San Pedro — all along, and sought out legitimate employment in the military, in firefighting and the CIA as an escape. But, the theory goes, he stayed in because he still owed a debt to his patrons.

    The other question involves the CIA itself. It’s no secret the agency has associated with dubious types, but the agency is also “notoriously risk averse,” Wright writes. Yet the agency is also protective. And letting Prado on board wouldn’t be the agency’s first intelligence failure.”

  11. Mike in Nola says:

    Molesworth: The problem is that the Dem’s of today are not “real” Dems as we used to think of them. No chance of single payer because health insurance lobbyists are too powerful as shown by how the law came out. Single payer was taken off the table at the beginning.

    Roberts vote may have been anti-Obama. With it, he took away a great “Crusade against the Supreme Court” issue and gave the wingnuts a rallying point. As a recent poll shows, Americans have been so indoctrinated by Fair and Balanced media that a majority are against the bill though they support the provisions in it if they are asked about them individiually.

  12. Molesworth says:

    You are right. I keep forgetting about our bought congress.
    Interesting perspective on Roberts vote. Let me wrap my head around that.

  13. ilsm says:

    Mike in NOLA,

    The dems are in trouble, the wingnuts are recognizing the “property is liberty” thing and xenophobia are not that well represented on the Reag/Bush court.

    The wing nuts will be out in force.

    Ever more it is “time to get out into the wards”!!

  14. farmera1 says:

    JP Morgan Betting Losses

    I said before the looses would be between two billion and infinity. This dude thinks nine billion US$ will cover the loss. Time will tell.

    But what’s to worry about for JPM. When you have the US$ printing press backing you, billions in losses don’t mean much.

  15. Frwip says:

    @James Cameron

    Yeah. Isn’t it funny Jamie comes out with that stuff TODAY ?

    Right on time to be buried under the man-date drama in the SCOTUS.