Saturday, November 21, 2009

On Timothy Geithner

Tim Geithner should be the Secretary of the Treasury, because he saved Goldman Sachs;
Tim Geithner should not be the Secretary of the Treasury, because he saved Goldman Sachs;

Tim Geithner should be the Secretary of the Treasury, because he saved Goldman Sachs under a Republican president;
Tim Geithner should not be the Secretary of the Treasury, because he is now serving a Democrat president;

Friday, October 23, 2009

Steve Wynn quoted Alexis de Tocqueville on CNBC today

The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money.
  • This is a variant expression of a sentiment which is often attributed to Tocqueville or Alexander Fraser Tytler, but the earliest known occurrence is as an unsourced attribution to Tytler in "This is the Hard Core of Freedom" by Elmer T. Peterson in The Daily Oklahoman (9 December 1951): "A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy."
  • Variant: The American Republic will endure, until politicians realize they can bribe the people with their own money.
Steve Wynn on the Economy, Jobs & Hotels - @9'05"

Friday, May 22, 2009

Mankiw finally admit market is working

well, in the case of Chrysler and GM.

But I don't remember he came out to object the the Bush administration auto bailout.

Monday, April 6, 2009

On negative interest rate.

Havard "new" old ideas of negative interest rate came out. (Hat tip to Dan Wright.)

Here is my thoughts: I see no difference between negative interest/tax on cash holding and a positive inflation rate. If anyone starts to make cash holding worth less, people will convert their cash into gold/other assets that are better in preserve value which will lead to, well, inflation. The ultimate question is how much inflation will the Fed tolerate at this time. Playing with inflation expectation is a dangerous game since central banks usually spend a lot of effort to anchor inflation. Will the Fed release the beast out of its cage? Will Paul Volker agree with that?

Friday, February 27, 2009

A good joke

1949, only Socialism can save China;
1979, only Capitalism can save China;
1989, only China can save Socialism;
2009, only China can save Capitalism.

Tuesday, February 10, 2009

No U-turn in Columbus OHIO

It's probably allowed elsewhere in Ohio. Drive carefully in Columbus!

2131.12 “U” turns prohibited.
(a)No vehicle shall be turned so as to proceed in the opposite direction upon any street or highway. Turns commonly known as “U” turns are hereby prohibited.
(b)Except as otherwise provided in this division, whoever violates this section is guilty of a minor misdemeanor. If, within one (1) year of the offense, the offender previously has been convicted of or pleaded guilty to one (1) predicate motor vehicle or traffic offense, whoever violates this section is guilty of a misdemeanor of the fourth degree. If, within one (1) year of the offense, the offender previously has been convicted of two (2) or more predicate motor vehicle or traffic offenses, whoever violates this section is guilty of a misdemeanor of the third degree. (Ord. 1579-72: Ord. 2120-03 § 1 (part).)

To make a proper U-turn, follow these instructions:
Use your turn signal at least 100 feet prior to turning
Check traffic ahead, behind and beside you before turning
If there's traffic in the area, don't make the U-turn; instead make other turns to reverse your direction
Check traffic again before completing final half of turn
Turn into the lane closest to the center line or median

It is illegal to make a U-turn on a curve, near the top of a hill, if your vehicle cannot be seen within five hundred feet by the driver of another vehicle approaching from either direction or when a sign prohibiting U-turns is posted.

Thursday, February 5, 2009

Money or life, which is more important?

***************Boston Globe

Tensions ran high in the hearing yesterday when SEC officials Andy Vollmer, the agency's acting general counsel, and enforcement director Linda Thomsen, refused to respond to questions about the Madoff investigation posed by Representative Gary Ackerman, a New York Democrat.

"You've told us nothing," Ackerman shouted. "You have totally and thoroughly failed in your mission, don't you get it?"

***************Washington Post

"If anyone could make the case better than Mr. Markopolos, and I didn't think they could, about you people being completely inept, you have made the case better than him," Ackerman said.


"... men more quickly forget the death of their father than the loss of their patrimony."

------ The Prince, Niccolò Machiavelli

I still vividly remember that after 9/11, a lady from the CIA straightforwardly refused "the finger pointing" in a television interview and there was certainly no law maker threw any harsh words like the above to CIA, FBI and USSS etc. (Some efforts are on the way.)

So, losing 50 billion dollars can get words out of the law makers but nearly 3000 lives gone, forget it.

Thursday, January 29, 2009

Fun Pictures (Copy &Pasted)


Received the following mail. i think it is cool

The 2008 crash is probably the most serious economic crisis we have faced after the Great Depression. Stock markets from around the world fell as much as 20% in a single week, dozens of banks either failed or were rescued by government and private instutitions, and companies started laying off employees as a consequence of the reduced demand.

We know how we entered into the crisis, but we don’t how, when, or how we will be getting out of it. Considering that issue, we decided to our little bit to help cheer everyone up by redoing the logos of some renowned companies …. after the crisis.

Tuesday, January 20, 2009

On Obama's Inaugural Address

"The question we ask today is not whether our government is too big or too small, but whether it works — whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified."

I am glad that finally both Bush and Obama agreed on this point. Although we still have to wait and see how the new administration makes sure the government achieve administrative efficiency.

Tuesday, January 13, 2009

The exit plan of Ben Bernanke

Here is the speech Ben gave at LSE today.

Ben first explained his approach in dealing with the financial crisis with the asset side of the Fed's balance sheet. Jim Hamilton does not like this approach but Ben clearly laid out his exit strategy focusing on how he will manage the inflation expectation as the economy recovers. He is building the expectation or say anchoring it by doing exactly what he is doing now: talking about it. It sounds like Ben knows what he is doing. But I am with Jim that the Fed probably should minimize the interest paid to excess reserve since paying interest on reserve itself is a contractionary policy and on the other hand, the Fed is trying to create liquidity in credit market, which is monetary expansion. I think maybe the Fed can sell something like the loan insurance to the banks, which may be helpful.

A little puzzle raised by Hamilton is that the Fed hope that by removing the toxic assets from the banks' balance sheet, the banks will start to lend out money again. However, the goal is not fully achieved for a while, at least. On the other hand, had the Fed not removed those toxic assets from the banks' balance sheet, there will be no credit easing for sure. Hamilton suggested that the Fed should off-load the colorful assets it has taken onto the asset side of its balance sheet, but my question is: How? Who will buy them and at what price? Won't that result in an immediate loss? It seems that the Fed need to do something effective in boost long-term lending for now and worry about everything else later since if the economy goes deeper into recession, the loss for taxpayers will be even higher.

Here is Q&A session.

Here is Hamilton's response.

Monday, January 5, 2009

Economists vs. House

The similarity between economists and doctors these days is that both professions give out prescriptions to cure something wrong, one for an ailing economy and one for a patient. There is actually a big gap between the two seemingly close practices.

Krugman, in his New York Times column, recently concluded that Friedman is not quite right on the healing power of monetary policy even Ben Bernanke has twisted his arms in all possible ways that he can imagine and Keynes was right the first time that monetary is not very effective during a financial crisis and large scale fiscal policy is needed. This shows the difference between economists and doctors. Some economic theories are only hypothesis and can be only tested once there is an opportunity. However, doctors, like Greg House, can some times experiment on their patient. As long as we don't have frequently repeated similar recessions, we may never know the true effect of the policy alternatives as long as they have not been adopted. Even for those policies were actually effective in boosting the economy, we may not fully understand the exact mechanisms of how these implemented policies work since in most cases, each recession may be quite different from one another.