Within one year from this date, September 21, 2008, US 5 Year Treasury Bonds will be paying at least 6.5%. That is more than double today’s yield of 3.05%. This will place a huge burden on the Federal Treasury as it struggles to pay skyrocketing interest rate costs, and it will raise the borrowing cost Click Here to continue reading.
If Gov. Arnold Schwarzenegger wants to issue minimum-wage checks to 200,000 state workers in less than a month, he may want to rehire any semi-retired computer programmers he terminated last week.
The massive pay cut would exhaust the state’s antiquated payroll system, which is built on a Vietnam-era computer language so outdated that many college students don’t even bother to learn it anymore.
Democratic state Controller John Chiang said Monday it would take at least six months to reconfigure the state’s payroll system to issue blanket checks at the federal minimum wage of $6.55 per hour, though Schwarzenegger insists such a change should occur this month.
I have to wonder if this is really true or not. Part of me thinks that if Mr. Chiang really wanted to obey the Governor’s order, he could find a way. Then again, I know enough about how IT works on the state level to think that maybe he is telling the truth.
There’s a lot of figuring and checking. My helpers can’t be hurt, as they’re at the top of this rollercoaster looking down, but I imagine that watching the thing crush me and being sent to the workhouse for the rest of their miserable lives would be less fun than shoe-shopping and playing X-Box, so I was determined not to let the thing land on me. I’m considerate like that.
But it started to rain, less than thirty seconds after I was dumb enough to say: “Thank God it hasn’t rained.” Time to act.
I have had more excitement moving heaver weights, but I am not as smart as Sippican Cottage is. Life is always more exciting when you are dumb.
Computer models have been getting a bad rap. It is often claimed that risk mangers and CFO’s at major banks made the mistake of relying to heavily on their models. But likes so many other things that are often said, this is self serving. It makes it seem as if all these smart people were just naive little boys who didn’t know any better.
The truth of the matter is that financial executives deliberately gamed their own models. As this New York Times blog post explains….
In other words, the computer is supposed to monitor the temperature of the party and drain the punch bowl as things get hot. And just as drunken revelers may want to put the thermostat in the freezer, Wall Street executives had lots of incentives to make sure their risk systems didn’t see much risk.
“There was a willful designing of the systems to measure the risks in a certain way that would not necessarily pick up all the right risks,” said Gregg Berman, the co-head of the risk-management group at RiskMetrics, a software company spun out of JPMorgan. “They wanted to keep their capital base as stable as possible so that the limits they imposed on their trading desks and portfolio managers would be stable.”
One way they did this, Mr. Berman said, was to make sure the computer models looked at several years of trading history instead of just the last few months. The most important models calculate a measure known as Value at Risk — the amount of money you might lose in the worst plausible situation. They try to figure out what that worst case is by looking at how volatile markets have been in the past.
But since the markets were placid for several years (as mortgage bankers busily lent money to anyone with a pulse), the computers were slow to say that risk had increased as defaults started to rise.
It was like a weather forecaster in Houston last weekend talking about the onset of Hurricane Ike by giving the average wind speed for the previous month.
The first comment on this blog post claims that Goldman Sachs superior performance relative to their peers stemmed from the fact that they did not mess with their models. I don’t find this hard to believe. While I think that Goldman Sachs will not escape in the long run, computer models do have advantages. The biggest one being that they take emotion out of a lot of decisions.
Britain is “quite simply running out of power” and blackouts are almost inevitable within the next few years.
This is the stark warning from the head of an energy think-tank who believes power cuts could be serious enough to spark civil disorder.
You might be thinking “Sure you can find a head of a think-tank who will say just about anything. But there is little more to this then hot air. From latter on in the same article….
Only last Thursday, National Grid issued an urgent call for power after a series of power station breakdowns. Suppliers were asked to bring all their available generating capacity online, including costly oil-fired stations.
In May, hundreds of thousands of people in Cleveland, Cheshire, Lincolnshire and London suffered blackouts when seven power stations were closed.
The electricity industry estimates it needs to spend £100billion on new stations to ensure supplies.
The “retirement” of a string of nuclear and coal-fired power stations will see 37 per cent of the UK’s generation disappear by 2015, partly because of EU environmental directives.
That last part is the real kicker. But it also might not happen.
I suspect that the UK government may just ignore EU directives when it comes time to take 37 percent of their power off line. Still, they are having problems without EU intervention and I suspect those problems will just get worse.
Infrastructures costs is one of those hidden bombs in modern society. We built it in the past for far cheaper then we can build it today, even accounting for inflation. And when we pay for it to be rebuilt we will also have to be dealing with all the cost associated with an aging demographic.
There have been all kinds of reactions to this news in individual nations. Let’s start with the smaller member-states. Observers in the Czech Republic pointed out that the Eurostat data presuming a decline from 10 to 9 million underestimate immigration and births, with some arguing that the population could instead rise to 13 million by 2060. People in the Republic of Ireland are reacting to the news that, with an estimated 2060 population of 6.7 million, the island of Ireland would have regained its pre-Famine population of eight million. News that the population of Estonia might decline by one-sixth to 1.1 million have been greeted with concern, along with the news that Bulgaria’s population is projected to fall by 29%, as have news that Romania will certainly see rapid and perhaps economically unsustainable population aging as the population falls by 4.5 million.
The changes among the largest European Union states are perhaps especially noteworthy for their influence on the balances of economic and perhaps political power, Britain’s projected growth to 77 million people, giving it the largest national population in Europe, is fitting into national concern over “uncontrolled” immigration, while metropolitan France’s expected growth to nearly 72 million–not, it should be noted, out of line with 2005 projections charting a French population of 75 million by 2050–coexists with a Gemran population projected to fall to less than 71 million and a Spain projected to grow to just short of 52 million people. Italy’s population is projected to remain stable at 59 million, but quite frankly the numbers look cooked–is a natural decrease of 12.0 million really going to be almost entirely balanced out by an immigration of 11.8 million? Who knows, perhaps it is the recent rivalry with Spain at work. Poland, at present the sixth EU member-state by population at 38 million is projected to see a fall to 31 million. Barber is quite right to note that all these changes will of necessity influence the development of Europe.
I think that Randy’s point about Italy could be made for Europe as a whole. It is taken for granted that there will always be this endless supply of immigrants looking to get into Europe. But the nations that are currently supplying Europe with immigrants simply can not keep up the current pace with out destroying their own nations.
As Randy himself notes, Eastern Europe is already being destroyed by the huge amounts of people leaving their country. Since Britain has been a huge beneficiary of Eastern Europe’s loss, it is unlikely that Britain will continue to grow at the current rate. There is not many young people left in Poland as it is.
Moreover, North African and Turkey have sharply falling birth rates. That will cut down on the amount of young people willing to immigrate from those countries.
There will be large numbers of immigrants into Europe for the foreseeable future, but I do doubt it will happen at the rates the Eurostats predict.
In other words, one of Korea’s last ditch measures to defend its currency would be to sell its remaining Freddie and Fannie debt, but the lack of liquidity argues against that.
Just like many other Asian countries, Korea built up big dollar reserves. But now that they need their dollar denominated assets, they can’t use them for fear of having to sell them at fire sale prices. I think a lot of other countries who are building up huge dollar reserves on the premise that it will safe guard them from future problems are going to find themselves in the same boat.
And the Conservative base goes wild. Seriously wild.
Read this BlackFive Post and comment section to see how wild.
Read anyone of Rod Dreher’s posts on the subject (this one in particular). Keep in mind that he is someone who has said they would not vote for McCain.
Instapundit has a more balanced roundup of reactions.
The Volokh Conspiracy blows my mind with a collection of comments from Hillary supporters.
Regardless of the outcome, I am sorry that Palin was dragged into this election. It would have been better for her to stay in Alaska. But from McCain’s perspective, this was a good choice.
Sure he gives up the lack of experience line of attack. But he never could use this without reminding everyone that he an old man who has been in Washington forever. Besides, anyone who truly cared about experience was not going to vote for Obama anyway. So I don’t think McCain gave up a lot in that regards.
In return, McCain gets someone who can fire up the Republican base with out looking too scary to non base types, go head to head with Obama in both public speaking and good looks, and appeal to all those people for whom the gender of a candidate matters (except for those who think that nobody but a real man is fit for office. But what are they going to do, vote for Obama?).
One wrinkle on all this has not been mentioned is that Palin’s only real accomplishment has been to go after corruption in her own party. I wonder if this means that McCain wants to go after the rumors of corruption surrounding the political machine that put Obama in Congress. If that is true, I hope his people checked out the allegations that Palin was improperly involved in the firing of a trooper real throughly.
Edit: Here is the Wall Street Journal on the firing of the trooper….
He said afterwards that Gov. Palin and her husband had pressured him to remove a state trooper who was a former brother-in-law she and her family had feuded with. Gov. Palin denies that, saying she removed the commissioner she appointed 18 months ago because she wants “a new direction,” and offered him a job as liquor board director which he turned down.
The case stemmed from a messy divorce between the trooper, Mike Wooten, and his wife, Molly, who is Gov. Palin’s younger sister. In 2005, Gov. Palin alleged the trooper had threatened to harm her father and sister and that he had engaged in numerous instances of official misconduct, including using a Taser on his 10-year-old stepson and shooting a moose without a proper permit, according to state documents. In one instance, she told state investigators, she overheard him on the telephone threatening her sister: “I’m gonna f—shoot your dad. He’s gonna get a lead bullet.”
Mr. Wooten told investigators he tested a Taser on the boy at his request, thought he was within his rights to kill the moose and never threatened the Palins. An internal police investigation substantiated the moose and Tasering charges, but threw out most of the rest. He was ordered suspended for 10 days in 2006. He declined comment through a spokesman with the Public Safety Employees Association.
Many of Gov. Palin’s supporters dismiss the trooper matter as trouble being stirred up by her enemies. “Many of those who had been in positions of power and authority have been very envious over the past year and a half with Gov. Palin’s great popularity,” says David Carey, mayor of Soldotna, Alaska.
He tested a Taser on a boy and only got suspended for 10 days? If this is true I can see why McCain is not to worried about the whole thing.
The official bean counters say that GDP grew by 3.3% in the second quarter. Naked Capitalism argues that this is the result of lies. I say it is the result of incompetence. Unlike Yves, I don’t find it hard to believe that the government can not keep track of its expenditures in very well.
Also, it has been known for a while that the government is not properly accounting for inflation. This is long standing I don’t think you can say that it is being done by one administration for political reasons.Since inflation picked up sharply in the second quarter, it stands to reason that this distorted the statistics by more then usual. I don’t think we need to hint that somebody went out there way to manipulate the statistics.
Rod Dreher said this about Anthony Lane: “If you want to be a writer, read him. Start with his report from the Beijing Olympics. And don’t stop.”
Naturally, I had to check it out.
He’s not bad that’s for sure. He made the a subject that I am not very interested in (The Olympics) interesting. But he did not quite manged to justify the demigod status that Mr. Dreher tried to ascribe to him.
Still his essay was interesting and I do not regret the time it took to read it. I think what made it interesting is that Mr. Lane was bored by most of the sporting events himself and so wrote about other things. Such as little red cars remote control cars….
The best thing about the shot put was the cars. After the shot landed, and the distance had been measured, the precious sphere would be retrieved by an official and placed in the cockpit of an automobile: two feet long, bright red, with a tail fin—in short, the idealized vehicle that I drew during chemistry lessons when I was nine years old. Now it exists, for real, and there are two Chinese fellows with the best job in the world, who get to steer it back to the shot-putting circle by remote control. (It can also bring a hammer, or even a javelin, which slots neatly into the fin.) I followed the gaze of the spectators around me, and realized that most of them had entirely lost interest in what was happening on the track, so urgently were they tracing the progress of the cars, and so hastily were they revising their list of what they want for Christmas.
Underlying the whole essay is a touch of knowing snark. I suppose that could become obnoxious if that is the style he writes in all the time, but I found it amusing in this piece. I actually laughed aloud at this bit…
The other mystery weapon in Lyon’s quiver was Phil Towle, a performance coach back in the States, whose online messages had been an inspiration. “He’s also been a psychologist for Metallica,” Ryan said, as if to justify the gentleman. I had to steady myself against a passing volunteer. Metallica has a psychologist? What, exactly, is it repressing in its sylvan melodies?