Thursday, December 18, 2008
1) The promoters do not (generally) lie. Rather, they simply don't go out of their way to let investors know that current contributions funding distributions to historic participants.
2) To some extent, the promoters are actually trying to make the system somewhat legit (actuarially feasible) - rare to unique in ponzi world.
Just teasing. Sort of.
Monday, December 8, 2008
Thursday, December 4, 2008
Monday, November 24, 2008
Monday, November 17, 2008
Monday, November 10, 2008
Wednesday, November 5, 2008
Monday, November 3, 2008
Wednesday, October 29, 2008
But, of course, it's not all sunshine and light - logging in is a multi-step, daily process so I can't skip from node to node as I walk past the quintet.
Someone needs to write an app that automates the login process ASAP.
Tuesday, October 21, 2008
"The contingency planning to become a commercial bank had been under way since March, after the collapse of Bear Stearns Cos. sent shivers through Wall Street. That's when Federal Reserve inspectors set up camp at the firm's 85 Broad St. headquarters, a sign of things to come."
Tuesday, October 14, 2008
Friday, October 10, 2008
Tuesday, October 7, 2008
Monday, October 6, 2008
Consider his weakening of the investment banks (leading them to take on riskier strategies to maintain earnings), targeting of AIG (leading to the ouster of its CEO – the one man who could keep Financial Products in line), and failure to limit mortgage lending fraud and abuses (items more appropriately with a state AG’s mandate).
And then the consequences: Lehman’s bankruptcy, Bear’s bailout, Merrill’s merger, AIG’s nationalization, and today’s frozen credit markets.
Friday, October 3, 2008
Thursday, October 2, 2008
I would have thought that, for the most part, repayment of debt to LBIE would effectively release securities held as collateral in margin accounts and NOT cash (because cash would be credited dollar for dollar and so is a wash - no incentive to repay).
If this thought is correct, that means that GLG and its brethren have contingent liabilities equal to (x) the excess of securities held as collateral over (y) borrowings from LBIE. Assuming they were leveraged to the hilt and a meaningful portion of assets were at LBIE and they are a general unsecured creditor of LBIE...
From the NYT website:
"The preferred shares will have an interest equivalent to 79.9 percent of the votes of A.I.G. and be entitled to receive 79.9 percent of any dividends paid by A.I.G. on A.I.G.’s common stock."
Does this mean that dividends are paid roughly 50/50 (44/56) until the preferred is converted?
Tuesday, September 23, 2008
Stadium financing proponents often argue in favor of government subsidy by noting increases in local business revenues (which I suspect are simply made up numbers). But I have also wondered whether there should be public support even if the numbers are valid. And thought: "No. Even if the numbers are right, the tax revenues related to that increase in business will be much smaller than the expenditure, even assuming some sort of multiplier effect based on local velocity of money." But I think my reasoning was incorrect. If one thinks of government not as a separate person but rather as a collective spending pool, then an increase in revenues less than the expenditures is an appropriate use of government funds (a collective action/public good theory; ignoring Mills type issues).
Which brings me to balanced budgets. I don't think there is much alternative to balanced budgets as local governments cannot print money. But I do wonder if this limitation results in suboptimal government spending (because the wrong measures are being compared and balanced). And then the kicker - perhaps federal subsidy mitigates this problem AND federalism (at least on the budget side) is a mistake. Yikes.
Wednesday, September 10, 2008
Not that it requires repeating, but Fannie has been rotten to the core for years.
Tuesday, September 9, 2008
Thursday, September 4, 2008
Monday, September 1, 2008
Tuesday, August 26, 2008
Monday, August 25, 2008
Monday, August 18, 2008
Tuesday, July 29, 2008
Monday, July 21, 2008
Most Americans would likely feel less conflicted about hearing of an American being held in an English prison than Mexican. I would guess that a chart showing reactions would be a good predictor of feelings regarding other places. Assuming the validity of this "kinship" test is proven, I think it could be useful in another context: Nationbuilding.
I think most Americans feel relatively (aside from the burdens of travel) indifferent between incarceration in NY or California. But this is unlikely between Basra and Tikrit for most Iraqis. A survey indicating this would be a nice, more concrete, way to show that efforts to build a single Iraq are misguided and that success is somewhere between far-away and never.
Friday, June 20, 2008
Wednesday, May 21, 2008
Tuesday, May 20, 2008
The D.C. Circuit court decided today that
Friday, May 16, 2008
Wednesday, May 14, 2008
The real reason for this post: It feels like China is not in the same camp as Burma. And I'd like to better understand how and why this is (or if I am simply naive or blind).
Tuesday, May 13, 2008
"On top of that, many chief executives of big universal banks, the ones that combine all sorts of financial services under one roof, 'only understand a small part of the business,' Mr. Griffin said, suggesting too many of them come from sales backgrounds. Put those two things together, the traders and the chiefs, and you have the making of an outright debacle."
The primary focus of the article was Mr. Griffin's point that many relatively senior professionals have only modest experience with bad times. But I find the small mention of a sales background as a problem more interesting -- not because it seems correct (I've thought it many times and trust that Mr. Griffin is far smarter than I so even if I didn't agree, would assume it is correct) -- but because it is an indictment of many chiefs (see, for example, James Cayne).
Unfortunately, I think that the situation is unlikely to change. Sales people tend to rise to the top (both because they likely have strong personal/political skills and their performance is more easily quantified). However, the ability to sell isn't highly correlated with the intellectual skills needed to run a complex business. And sales, because usually structured as a percentage of revenue (not profits), often creates a bias towards unprofitable growth and corner cutting.
Of course, this phenomenon is not limited to financial institutions...
Tuesday, April 29, 2008
But the bias is likely towards the second - the sinecure of a (widely-held) public company is very attractive to management.
Monday, April 28, 2008
"The idea to suspend the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor Day was first proposed by McCain, the likely Republican presidential nominee, as a way to lessen the pain at the pump for consumers this summer.
Clinton said she would make up the lost revenue by imposing a "windfall profits tax" on oil companies."If this is sincere, it is reprehensible. If this is disingenuous populism, it is merely ugly.
I have no idea whether or not Obama has any similarly counterproductive proposals but the fact that 2 of the 3 people who are mostly likely to be president support removing the gas tax (and perhaps to create a "windfall" profits tax) is scary.
Tuesday, April 1, 2008
Monday, March 24, 2008
One rationale for the argument appears to be: Obama's wins in traditionally Republican states are less meaningful than Clinton's in states where Democrats can reliably win. The argument would thus seem to be: if Obama becomes the candidate, our grip on those Democratic states will be put at risk. But isn't this backwards? Isn't it the case that Obama has stronger support in states that Democrats need to win (i.e., Republican or swing states) and thus wins in those states are more valuable? Especially to the extent that his wins come from drawing independent voters that Clinton was apparently less able to draw?
The other rationale is that primary wins in big states translate into wins in the general election. For this to be true, it would require either (A) that Democrats (in this case) turn against or choose not to vote for their party candidate in the general election and/or (B) that swing or Republican voters are more likely to choose the primary winning candidate than the alternative Republican. Because A seems unlikely, I think B is left as the rationale. A shaky rationale as B's accuracy depends upon the identity of the candidate fielded by the other party. Meaning that the right test is how the Democratic candidate matches up against a specific Republican in the various contested states.
Simply said, because (i) the primary process tends to produce candidates who have successfully presented themselves as a party standard bearer (meaning less centrist) and (ii) winning the nomination doesn't give a lot of insight into how a candidate will appeal to the general population, drawing any inferences or making predictions based upon success in a type of state is stupid.
Tuesday, March 4, 2008
For the students at the highest levels, the university structure here pushes them to: (i) spend a lot of time getting to 99% knowledge; (ii) spend time on extracurricular activities as a resume filler; and (iii) learn some subjects (especially languages) late. The structure is the pyramidal hierarchy (and meaningful differences in outcome for different schools).
For most students, I think it comes down to weaker teachers, low expectations, and poor explanation of the reasons for education. Also, I believe that almost nothing is learned at the bulk of colleges.
Separately, I wonder how much the income disparities in the US play a role -- I'm especially wondering if teaching is closed off as an option to people who might consider it in other places with flatter income profiles.
I really have no idea but do wonder about how to improve basic and elite education.