Author Archives: the editor

Economic News of Note

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If you don’t read calculated Risk, here are some stories you missed this week…

From Bloomberg:

Consumer credit increased by $15.3 billion for the month to $2.56 trillion, the biggest monthly rise since November, the Federal Reserve said today in Washington. In February, credit rose by $6.5 billion, previously reported as an increase of $5.2 billion.

Again From Bloomberg:….

Vallejo, California, officials voted to file for bankruptcy because the San Francisco suburb isn’t able pay its bills after costs for police and firefighters soared and the housing market’s slide cut into tax revenue.

Pretty soon people are going to be complaining about how the rating agencies rated municipal debt.

From the Wall Street Journal…..

Fannie Mae announced plans to shore up its capital after recording a loss of $2.19 billion for the first quarter and warning that losses stemming from mortgage defaults are likely to be even worse next year.

The government-sponsored provider of funds for home mortgages expects to raise about $6 billion through the sale of common and preferred shares. Regulators have been prodding Fannie and its main rival, Freddie Mac, to bolster their capital to provide more protection against the growing costs of mortgage defaults.

The latest plan comes on top of $7 billion Fannie raised in December …

They are going to need a government bail out before long.

Poem of the Week: 5/4/08 – 5/10/08

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All These Things That I’ve Done was a widely popular song when it was released in 2005. Many people still find it to be deeply meaningful. The writer of this blog would an example of the type of people who love it.

What does this say about the people who like the song?

Lots of You Tube videos of the song, but we are not posting any of them because we could not find one that we could stand.

Don't question the Egyptologists

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Some heretics have dared to suggest that some of the blocks in the Egyptian pyramids were cast in place with a kind of crude concrete. They are currently being rounded up and shot. You can read all about it in this Boston Globe article.

I am in no position to add anything intelligent to this argument, but this passage from the article really struck me….

Archeologists, however, say there is simply no evidence that the pyramids are built of anything other than huge limestone blocks. Any synthetic material showing up in tests – as it has occasionally, even in work not trying to prove a concrete connection – is probably just slop from “modern” repairs done over the centuries, they say.

This is either really bad reporting or the Archeolgoists have a really weak argument. How can you say out of one side of your mouth that there is no evidence for the opposing camp and out of the other side of your mouth that the evidence “probably” was caused by something else?

Other gems from the article…..

Nearly every prominent Egyptologist is adamant that the pyramids are made solely of giant blocks cut with crude copper or stone tools. They note that proponents of the concrete theory are chemists or materials specialists with little experience at ancient digs – lab researchers, not shovel-wielding field archeologists.

I am all in favor of people who get their hands dirty, but are archeologists really arguing that chemists or materials specialists have no special skills that archeologists do not? Do they really ignore the insights of all the other branches of science?

And one last gem…

Zahi Hawass, head of Egypt’s Supreme Council of Antiquities, minced no words in assailing the concrete idea. “It’s highly stupid,” he said via a spokesman. “The pyramids are made from solid blocks of quarried limestone. To suggest otherwise is idiotic and insulting.”

Now that is my style of arguing.

The US should drop the façade of auctioning off Treasuries

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This from Brad Setser’s blog….

Incidentally, the $8.7b in average weekly purchases of Treasuries over the last 8 weeks would – if sustained — be enough to finance a $454b budget deficit without selling a single Treasury bond to private investors. Sometimes I think the US should drop the façade of auctioning off Treasuries and just negotiate private placements with the People’s Bank of China and the Saudi Monetary Agency.

What’s more, all this financing was provided more or less unconditionally, with the United States creditors taking on the risk of future dollar depreciation. Further dollar depreciation against the euro – and, perhaps more importantly, the risk of further dollar depreciation against their own currencies.

It goes without saying that this flow is far, far larger than the $30b or so sovereign funds committed to troubled US financial institutions in December and January ($40b if UBS is considered a US financial institution). Yet it has attracted far less attention.

Rant of the Week: 4/27/08 – 5/3/08

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Who’s going to step up and defend a cult that practices polygamy? Who is going to argue that children should be raised in such an environment? We must confess that we cannot find it in ourselves to defend either point.

But we must confess that it seems to us that Vox Day has a point when he argues that raid on the compound of a Mormon sect was hypocritical and immoral. His comparison of instances of underage pregnancy within the sect to rate of population at large in Texas is particularly damming. But we must imagine that he could have strengthened his argument even more if he had laid his hands on statistics showing how children in the tender embrace of child protection agencies turn out.

North Korean News

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The YouTube Clip below has been in the news a lot lately. If you have not seen it, you might want to watch it. It is the CIA’s explanation of the target that Israel destroyed in Syria awhile back. It publicly accuses North Korea and Syria of conspiring together to make atomic weapons.

In related news, The Times reports….

An airbase inside a mountain is the latest sign that North Korea, whose links to Syria’s nuclear programme came to light last week, is cranking up its military machine

North Korean military engineers are completing an underground runway beneath a mountain that can protect fighter aircraft from attack until they take off at high speed through the mouth of a tunnel.

The 6,000ft runway is a few minutes’ flying time from the tense front line where the Korean People’s Army faces soldiers from the United States and South Korea.

The project was identified by an air force defector from North Korea and captured on a satellite image by Google Earth, according to reports in the South Korean press last week.

It is one of three underground fighter bases among an elaborate subterranean military infrastructure built to withstand a “shock and awe” assault in the first moments of a war, the defector said.