Flashman Letters

The Iranian Incursion in Context | STRATFOR

The United States and Iran are both playing for time. Neither side wants to change its position on the nuclear question, although each hopes the other will give in. Moreover, neither side is really confident in its military options. The Americans are not certain that they can both destroy the nuclear facilities and Iranian counters — and if the counters are effective, their consequences could be devastating. The Iranians are not certain that their counters will work effectively, and once failure is established, the Iranians will be wide open for devastating attack. Each side assumes the other understands the risks and will accept the other’s terms for a settlement.

via www.stratfor.com

Fed's approach to regulation left banks exposed to crisis - washingtonpost.com

Foreclosures already pocked Chicago's poorer neighborhoods but the downtown still was booming as the Federal Reserve Bank of Chicago convened its annual conference in May 2007.

This Story

• Fed's approach to regulation left banks exposed to crisis
• What became of the biggest players
• A breakdown in oversight and rules

The keynote speaker, Federal Reserve Chairman Ben S. Bernanke, assured the bankers and businessmen gathered at the Westin Hotel on Michigan Avenue that their prosperity was not threatened by the plight of borrowers struggling to repay high-cost subprime loans.

Bernanke, who was in charge of regulating the nation's largest banks, told the audience that these firms were not at risk. He said most were not even involved in subprime lending. And the broader economy, he concluded, would be fine.

via www.washingtonpost.com

At Accenture, It’s as if Tiger Woods Were Never There - NYTimes.com

At Dulles International outside Washington, he is peering into the distance, dark clouds on the horizon. That ad, forebodingly, says it is “tougher than ever to be a Tiger.”

“The Accenture ads with Tiger finally make sense,” Quentin George, the chief digital officer for Interpublic Mediabrands, an advertising holding company, remarked on Twitter Wednesday.

via www.nytimes.com

Han van Meegeren - The Vermeer Faker

During World War II, wealthy Dutchmen, wanting to prevent a sellout of Dutch art to Adolf Hitler and the Nazi Party, avidly bought Van Meegeren's forgeries. Nevertheless, a falsified "Vermeer" ended up in the possession of Reichsmarschall Hermann Göring. Following the war, the forgery was discovered in Göring's possession, and Han van Meegeren was arrested 29 May 1945 as a collaborator, as the officials believed that he had sold Dutch cultural property to the Nazis. This would have been an act of treason, the punishment for which was death, and so Van Meegeren fearfully confessed to the forgery. On 12 November 1947, after a brief but highly publicized trial, van Meegeren was convicted of falsification and fraud charges, and was sentenced to a modest punishment of one year in prison.

via en.wikipedia.org

American wine: Supersipping in the superstate | The Economist

the Parker rating is what counts, how do you score well? Ms McCoy, in her eminently readable book, writes: “As dozens of winemakers have told me, ‘If I want to make a 95 Parker wine, I know what I have to do.' ” Indeed so: thin the vine leaves to allow more sun to hit the grapes; reduce the number of grape clusters in order to concentrate the flavour in the ones remaining; harvest the grapes as late as possible; and use processes called cold maceration and malolactic fermentation to deepen the wine's colour and smooth out its tannins. In other words, arrive at the full-bodied, strong and rich wines typical of California. If you need help, you can hire Michel Rolland, a peripatetic winemaker and a friend of Mr Parker's. Or in California you can contact Leo McCloskey, whose Enologix company claims to have cracked the scientific formula for a 90+ wine.

via www.economist.com

: The price puzzle | The Economist

ERNEST GALLO, the 91-year-old patriarch of the eponymous American wine company, tells a story about his early days of selling wine, just after Prohibition had been lifted. On visiting a buyer in New York, he offered him two samples of the same red wine. The man tasted the first glass, asked its price, and was told it was five cents a bottle. He tried the second sample, asked the price, and was told it was ten cents a bottle. “I’ll take the ten-cent one,” said the buyer.

via www.economist.com

Harder to buy Treasuries

IT is getting harder for governments to buy United States Treasuries because the US's shrinking current-account gap is reducing supply of dollars overseas, a Chinese central bank official said yesterday.

The comments by Zhu Min, deputy governor of the People's Bank of China, referred to the overall situation globally, not specifically to China, the biggest foreign holder of US government bonds.

via www.shanghaidaily.com

Energy Tribune- After Copenhagen, It’s Still About Physics, Math, and Money

Those three subjects have always been the most important when it comes to discussions about global energy consumption. But they continue to be obscured by the incessant yammering about climate forcings, albedo, stolen emails, and the optimum level of atmospheric concentrations of carbon dioxide. Indeed, the meeting at Copenhagen was remarkable more for its circus-like air than its attention to the physical and mathematical problems of achieving major reductions in carbon emissions. And yet, for the last two weeks, the world’s major media outlets have been transfixed by an event that, from the start, was destined to amount to nothing. As Michael Shellenberger and Ted Nordhaus noted earlier this week, the meeting at Copenhagen “represents the first truly postmodern global event in human history.” They said that the leaders meeting in Copenhagen have “no power to do anything….But the United Nations, multinational green groups, and sympathetic reporters have succeeded in creating the impression of action where there is, in fact, none at all.”

via www.energytribune.com

In Regulation We Trust?

The quest for market efficiency has also led to a frightening rise in complexity. Today, the systems by which most services are provided have become almost completely opaque to their users. People who call for greater “transparency” do not understand that complexity is the enemy of transparency, just as simplicity is the hallmark of trust. Complexity, by leading to moral ambiguities, forces relationships onto a contractual footing.

Parliamentarians are by no means the only, or chief, victims of the cold blast of public mistrust. Some of the most respected banks have been exposed as perpetrators of moral fraud: hence the demand for a new regulatory framework. But pervasive mistrust of politicians is more dangerous, because it undermines the basis of a free society.

A low-trust society is the enemy of freedom. It will produce a juggernaut of escalating regulation and surveillance, which will reduce trust further and encourage cheating. After all, human nature is not only inherently gainful, but also takes satisfaction in gain cunningly achieved – for example, by finding ways round regulations. A free society requires a high degree of trust to reduce the burden of monitoring and control, and trust requires internalized standards of honor, truthfulness, and fairness.

Systems in which people are trusted to behave well are more likely to produce good behavior than systems in which they are compelled to do so by regulation or fear of legal sanctions. Liberal societies must tolerate some degree of crime and corruption. But there will be less of it than in societies run by bureaucrats, courts, and policeman. In the former communist countries, private crime was virtually non-existent, but state crime was rampant.

via www.project-syndicate.org

Chaos and Uncertainty in Copenhagen?

It should not be surprising that the outcome remains in doubt, because of some basic economic realities.  First of all, keep in mind that climate change is the ultimate global commons problem, because greenhouse gases uniformly mix in the atmosphere.  Therefore, each country incurs the costs of its emission-reduction actions, but the benefits of its actions are spread worldwide.  Hence, for any individual nation, the benefits it receives from its actions are inevitably less than the costs it incurs, despite the fact that globally the total benefits of appropriate coordinated international action would exceed the total costs (and for many countries the national benefits of coordinated international action would exceed their national costs of action).

via belfercenter.ksg.harvard.edu