• Happy St. Patrick’s Day
    Posted by on March 17th, 2009 at 6:42 am

  • Just Say No to College
    Posted by on March 16th, 2009 at 5:07 pm

    This past weekend’s episode of This American Life had an interesting vignette (Act One). One of the NPR guys was upset that his cousin DJ had dropped out of college. He was trying to change DJ’s mind so he called one of his friends, a labor economist at Georgetown, to speak with DJ.
    After talking with him, the professor did something very refreshing. She took DJ’s side.
    For many Americans, college is a raw deal. I find it amazing that so many young people are forced to take on huge amounts of debt and get so little in return.

  • FixCNBC.com
    Posted by on March 16th, 2009 at 4:52 pm

    The liberal group Media Matters for America has a new website up, fixcnbc.com, which is demanding changes at CNBC.

    You screwed up badly. Don’t apologize – fix it!
    CNBC should publicly declare that its new overriding mission will be responsible journalism that holds Wall Street accountable. As a down payment, we ask you to hire some new economic voices – people who have a track record of being right about the economic crisis and holding Wall Street executives’ feet to the fire.

    Oh boy. Neither CNBC nor Jim Cramer are responsible for the credit crisis. If you think they are, then you don’t understand the crisis.
    The idea that they need to hire “people who have a track record of being right about the economic crisis” is laughable. No economist predicted what happened because no economist could have predicted it. Some people got parts of it right, but were way off on many, many other aspects. And being right on one prediction doesn’t mean much about your next prediction.
    One more thing. You can only ask for a down payment if you own something and someone else wants to buy it. Ironically, it was people who didn’t understand the concept of a down payment that Media Matters should be upset with. They can blame themselves.

  • Guess How Many Building Permits Massachusetts Issued in January?
    Posted by on March 16th, 2009 at 4:28 pm

    One.

    The sharp downturn has ended a prolonged building boom that was fueled by easy credit and a strong housing market. Now, constraints on lending are preventing developers from getting money to start work. In January, one building permit was issued in Massachusetts for a residential complex with five or more units, according government housing data. Homeowners are also feeling the pinch, delaying renovations and other odd jobs that have helped sustain construction workers during previous downturns.

    Something tells me that despite less work, the government agency wasn’t downsized.
    (Via: Blodget).

  • Wells Fargo Chairman Calls Stress Test “Asinine”
    Posted by on March 16th, 2009 at 12:12 pm

    Richard Kovacevich, the Chairman of Wells Fargo has unkind words for the stress test:

    “We do stress tests all the time on all of our portfolios,” Kovacevich said. “We share those stress tests with our regulators. It is absolutely asinine that somebody would announce we’re going to do stress tests for banks and we’ll give you the answer in 12 weeks.”

  • Ben Bernanke on 60 Minutes
    Posted by on March 16th, 2009 at 10:34 am


  • Sesame Street on Ponzi Schemes
    Posted by on March 15th, 2009 at 6:19 pm


    (H/T: Barry.)

  • The Roubini Portfolio
    Posted by on March 14th, 2009 at 11:38 pm

    The FT uncovers Roubini’s investment strategy:

    Just ask Nouriel Roubini of New York University, who has a reputation as the most pessimistic economist in academe. He deserves it. His most recent paper, published last week, is entitled: “Can the Fed and Policy Makers Avoid a Systemic Financial Meltdown? Most Likely Not.”
    Nobody is more aware of the gravity of the financial situation, and nobody has done more to point out the risks of a systemic crisis.
    So how are Roubini’s own funds invested? They are 100 per cent in equities. In the long run stocks do best and he is not yet close to retirement, so he keeps putting more money into index funds each month.
    Fully aware of the gravity of the financial situation, he is also aware of the futility of trying to take action or to time the market. Those tempted to make the investing equivalent of a goalkeeper’s depairing dive should take note.

    Update: Felix went to the source and finds that Roubini’s 401k is in equities but he has substantial holdings of cash, plus his interest in his own firm.

  • Blaming the Victim
    Posted by on March 14th, 2009 at 9:45 pm

    Joe Nocera has a good article in the New York Times where he points out an unpleasant truth—many of Madoff’s victims should have known better.

    “These were people with a fair amount of money, and most of them sought no professional advice,” said Bruce C. Greenwald, who teaches value investing at the Graduate School of Business at Columbia University. “It’s like trying to do your own dentistry.” Mr. Hedges said, “It is a real lesson that people cannot abdicate personal responsibility when it comes to their personal finances.”
    And that’s the point. People did abdicate responsibility — and now, rather than face that fact, many of them are blaming the government for not, in effect, saving them from themselves. Indeed, what you discover when you talk to victims is that they harbor an anger toward the S.E.C. that is as deep or deeper than the anger they feel toward Mr. Madoff. There is a powerful sense that because the agency was asleep at the switch, they have been doubly victimized. And they want the government to do something about it.

    Also, don’t forget to blame Jim Cramer and CNBC.

  • A Short-Selling Conspiracy
    Posted by on March 14th, 2009 at 11:42 am

    A totally unhinged article from the Daily Kos:

    This rabbit hole involves the thugs surrounding Jim Cramer and some of the top financial “journalists” from the New York Times, WSJ, Fortune magazine and BusinessWeek, top hedge funds, the Mafia, and the DTCC. It also includes “blackmail, smear campaigns, espionage, fraud, harassment, extortion, bribery, rumor-mongering, sabotage, off-shore money laundering, political cronyism, frivolous lawsuits, witness tampering, biased financial research, false identities, bogus credit ratings, bribery, libelous blogs, bad science, forgery, wiretapping, counterfeiting, collusion, lying, cheating, threats and theft.”
    And if that wasn’t fun enough, it may be the underlying story of what collapsed the entire, global banking system or at least served as the catalyst for the collapse.

    What, no JFK assassination?

    Unfortunately, this story is so rich and multi-dimensional that I cannot possibly hope to do it justice here.

    Well, he’s right about that.