Flashman Letters

Gordita Supreme Court - The Colbert Report - Too funny

The Colbert Report

Thursday, January 27, 2011

Gordita Supreme Court

Taco Bell's meat mixture doesn't satisfy the USDA's minimum requirements to be called beef. (03:50)

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via www.colbertnation.com

How much do we really learn in college? Fact of the day

The study, included in NYU Professor of Sociology Richard Arum’s new book Academically Adrift: Limited Learning on College Campuses, surveyed more 3,000 students with an average GPA of 3.2. The students surveyed were asked to take a standardized test covering skills students are expected to garner from an undergraduate education, and only 36 percent showed improvement after four years of college.

via www.bakadesuyo.com

ROBERT SHILLER: “EVERYTHING IS OVERPRICED” - Click to listen

Robert Shiller:  ”It seems like everything is overpriced: stocks, bonds, and real estate. And index bonds were given a negative yield recently; maybe they’re coming back. Nothing looked attractive.”

via pragcap.com

Letter from Kabul: The Great Afghan Bank Heist : The New Yorker

Despite the deep skepticism that the Karzai government has prompted in Washington, the corruption appears to have got worse. One of the reasons is the war itself. President Obama’s deadline for beginning his withdrawal of American forces later this year confirmed for many Afghans that time is running out. “Right now, this country is all about raping and pillaging as much as you can, because there is no faith in the future,” an Afghan businessman told me.

The businessman, who spoke on condition of anonymity, told of a recent dinner with a number of Afghan officials: “I said to them, ‘Look at the Taliban. They believe in their cause, and that sustains them. You people have no cause. You don’t believe in anything.’ And these guys just sat there in their chairs. They agreed with me.”

The allegations against many appear to confirm wider suspicions that the vast army of private gunmen here, many hired to escort supply convoys headed for NATO military bases, often accomplish their work by bribing the Taliban to hold their fire. These bribes are believed by officials here and in Washington to be one of the main sources of the Taliban’s income. One Western diplomat told me that bribes paid to Taliban commanders by the private security contractors, along with the other ways the Taliban extort Western money, are themselves enough to finance a robust insurgency. “It costs NATO a hundred and forty thousand dollars to keep a soldier in the field for a year, and a Taliban fighter a fraction of that,” he said. “If just ten per cent of that money gets to the Taliban—through bribes or extortion or whatever—that’s enough to keep five Taliban fighters in the field.”

via www.newyorker.com

Things That Keep Dylan Grice Up At Night... A pretty good list

Here are some things I think are true:

• developed economy governments are insolvent
• Japan is the highest risk developed market (DM) to an inflation crisis (though it might be Greece)
• there is too much debt around
• China?s economic model is biased towards misallocating resources
• every country which has industrialized has experienced nasty bumps on the way
• China and the US are in the early stages of an arms race
• demographic trends suggest more conflict in the oil rich regions of the world
• bottlenecks are developing in key commodity markets
• the only thing central banks are good at is blowing the bubbles that cause the crashes which are used to justify their existence
• market prices only reflect fair value by accident and in passing
• most people don?t think these things are important
• they might be right.

Here are some things I know are true:

• perceived uncertainty causes emotional discomfort which isn?t conducive to good decision making
• all the above situations have the potential to cause significant asset price volatility
• I have no idea when.

via www.zerohedge.com

Marginal Revolution

 
That is from Paul Krugman.  And from Krugman's source, Bart van Ark:

To conclude, there is good reason to adjust the long-term US productivity growth rate downwards.

via www.marginalrevolution.com

Jealous Davos Mistresses

The point about Davos is that it makes everyone feel wildly insecure. Billionaires and heads of state alike are all convinced that they have been given the worst hotel rooms, put on the least interesting panels and excluded from the most important events/most interesting private dinners. The genius of World Economic Founder Klaus Schwab is that he has been able to persuade hundreds of accomplished businessmen to pay thousands of dollars to attend an event which is largely based on mass humiliation and paranoia.

Wives feel sympathetic to their husbands and share their pain. But we have our own problems to cope with. After all, we are the on the bottom rung of the Davos ladder.

The most revealing sign of our lowly status is that we are forced to wear the ultimate badge of shame — the white name tag.

Here is how it works: everyone at Davos has to wear a name tag and these are color coded by status/occupation (speaker, organizer, journalist etc). Usually these name tags include some kind of affiliation, such as the company or organization you work for.

But wives’ name tags state only their name. This means there is nothing on it that could help a stranger strike up a conversation. If you don’t use your husband’s name then you are guaranteed virtual anonymity. Upon being introduced to someone new, the normal Davos gesture is not to look at the face of the person they are meeting but to look down at his/her name tag.

via blogs.reuters.com

ROB ARNOTT: THE MARKET IS RUNNING ON STIMULUS FUMES

Source: Morningstar

via pragcap.com

Spain to Pass Pension Bill After Bank Plan Fails to Stem Yields

The Spanish government will raise the retirement age today in a renewed bid to restore investor confidence after a 20 billion-euro ($27 billion) plan to shore up savings banks failed to tame the nation’s borrowing costs.

Four months after Spanish workers disrupted transport and broadcasts in a general strike aimed partly at the plan, Prime Minister Jose Luis Rodriguez Zapatero’s Socialist government will approve the bill to raise the retirement age to 67 from 65

via noir.bloomberg.com

Just some thoughts: While I agree that longer lives and longer productive working lives should go hand in hand with pension reforms, I see lots of unintended consequences on this one. 

1. Will this make Spaniards spend more or less?
2. Can the labor market readily absorb an increase of 5% in the workforce?
3. What are they going to do with this money - indirectly buy Spanish bonds - via the banks or directly?

I am not sure that increasing savings and reducing aggregate demand when there is so much unutilized capacity is such a great idea. I think Spain like the UK is running the risk of contracting Hashimoto's disease. Except unlike the UK they cannot devalue.

If only all research we so good

I apologise for any spelling mistakes as it’s hard to write with the tears streaming down my face. No its not sadness that my SELL on Astra is getting squeezed by the open, it is laughter as I read that today’s miss would have been a heck of a lot worse had it not been for a visit to the UK pension fund and the making of a few adjustments. On top of this the company cuts its own R&D revenue expectations, and talks of a “favourable movement in managed market relative accruals” as a prime reason for the Crestor result…

They say sharks can identify fish dying and in difficulty from a distance of 3 miles. Apparently it is something about the way that they swim. Half decent sell-siders can do it with companies, it’s something about the excuses we hear from management as they attempt to shore up results and justify the future.

There’s going to be more buy-back. And just in case the umpteenth reiteration that the FDA doesn’t want more clinical trials on Brilinta hasn’t yet sunk in, did you know that the FDA doesn’t want more clinical trials on Brilinta? It just needs to be told why the drug doesn’t work in Americans.

There are 3 reasons why you may want to cream off your UK pension fund. You could have outperformed and so there was too much money in it. You could simply be doing a Robert Maxwell, though I am sure no-one at Astra would be so dastardly, or thirdly you could plan to sack so many employees early that they will never need pensions from you anyway. If there’s a 4th reason maybe you can tell me?

So with my eyes red and puffy with fresh tears of amusement, and with the great white sharks ever circling, my work here is done. I don’t think that I will need to revisit my Astra call ever again. I am so pleased about that!

via ftalphaville.ft.com