Category Archives: Front Page

Anything for a cigarette

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From Strategy Page…..

Since navigation was often uncertain when Zeppelins were flying above clouds, some were equipped with an observation basket that could be lowered through the cloud layers. In that way one or two men in the basket would have a good view of the earth’s surface. From this position, they could keep the ship informed by telephone of the landmarks below, helping it navigate to and from its target.

Of course this was particularly hazardous, as the men were without parachutes in a flimsy basket dangling at the end of a 750 meter tether, in freezing cold. Yet there never seems to have been a shortage of volunteers for this duty. In part this was due to the very high morale of the airshipmen. But volunteers also gained a privilege denied to everyone else on the ship; the little basket dangling at the end of nearly a half-mile of cable was the only place on the airship where a man was allowed to have a cigarette.

This ought to be illegal

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From Bloomberg…..

The misleading numbers posted by retirement fund administrators help mask this reality: Public pensions in the U.S. had total liabilities of $2.9 trillion as of Dec. 16, according to the Center for Retirement Research at Boston College. Their total assets are about 30 percent less than that, at $2 trillion.

With stock market losses this year, public pensions in the U.S. are now underfunded by more than $1 trillion.

That lack of funds explains why dozens of retirement plans in the U.S. have issued more than $50 billion in pension obligation bonds during the past 25 years — more than half of them since 1997 — public records show.

The quick fix for pension funds becomes a future albatross for taxpayers.

In the CTA deal, the fund borrowed $1.9 billion by promising to pay bondholders a 6.8 percent return. The proceeds of the bond sale, held in a money market fund, earned 2 percent — 70 percent less than what the fund was paying for the loan.

The public gets nothing from pension bonds — other than a chance to at least temporarily avoid paying for higher pension fund contributions. Pension bonds portend the possibility of steep tax increases.

Read the whole article for all the disgusting details. For example, by law most states have to guarantee pay back of those pension bonds.

Even Toyota…..

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From the Times….

The loan-financing arm of Toyota, Japan’s biggest industrial giant, is understood to have approached a state-backed fund for as much as $2 billion in emergency loans.

A request for Government funding from the Japanese giant is expected to trigger a deluge of other demands for capital by other of the country’s struggling industrial companies.

When the article says $2 billion dollars it means dollars not the equivalent value of yen. What this means is that Japan is going to have to sell some T-bonds if it is going to honor this request.

Given the scale of the T-bond market, this is small potatoes. Still, it does demonstrate the mechanism by which T-bond yields could spike even if Japan or China do not decided to deliberately dump dollars as a matter of policy.

Always remember that it could be worse

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From Fox News…

The rock, estimated to be no more than 200 feet wide, zoomed past our planet at an altitude of 40,000 miles at 1:44 p.m. universal time — or 8:44 EST.

Dubbed 2009 DD45, it was discovered only on Friday by Australian astronomers.

Forty thousand miles may sound like a lot, but it’s only about one-seventh of the way to the moon, and less than twice as far out as many telecommunications satellites.

Had 2009 DD45 hit the Earth, it would have exploded on or near the surface with the force of a large nuclear blast — not very reassuring when you consider humanity had only about three days’ notice.

If that had hit in the wrong place, it could have made the falling stock market seem like a minor problem.

America's problem in a nutshell

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From the New York Times…

Criminal correction spending is outpacing budget growth in education, transportation and public assistance, based on state and federal data. Only Medicaid spending grew faster than state corrections spending, which quadrupled in the past two decades, according to the report Monday by the Pew Center on the States, the first breakdown of spending in confinement and supervision in the past seven years.

In that one paragraph you have the problem of demographic aging and cultural break down.

Young Talent

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Mozart’s sister as quoted in Wikipedia…..

He often spent much time at the clavier, picking out thirds, which he was always striking, and his pleasure showed that it sounded good. […] In the fourth year of his age his father, for a game as it were, began to teach him a few minuets and pieces at the clavier. […] He could play it faultlessly and with the greatest delicacy, and keeping exactly in time. […] At the age of five he was already composing little pieces, which he played to his father who wrote them down.

The kid in the clip below does not quite top that. Still, it is a little unnerving to watch him play (they make him do to much talking at the start of the show to demonstrate how cute he is or something. But if you endure it, you will get to see him play.)

(h/t Amy’s Humble Musings side bar feed)

Just So You Know

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From the AP……

Investors’ despair about financial companies and the recession has brought the Dow Jones industrial average to another unwanted milestone: its first drop below 7,000 in more than 11 years. The market’s slide Monday, which took the Dow down 300 points, was nowhere near the largest it has seen since last fall, but the tumble below 7,000 was nonetheless painful.

The credit crisis and recession have slashed more than half the average’s value since it hit a record high over 14,000 in October 2007. And now many investors fear the market could take a long time to regain the lost 7,000.

From the Times…..

AIG, the fallen US insurer, unveiled a $62 billion loss today — the largest in US corporate history — as it secured a fresh $30 billion bailout package from the Government.

From Marginal Revolution (in regards to AIG bailouts)…..

No one wants to say it, but essentially the Fed has been bailing out European banks.

The inflation-adjusted cost of the Marshall plan has been estimated at about $115 billion in current dollars. If we end up spending $250 billion on AIG, how much of that sum will go to European financial institutions and might it someday exceed the scope of the Marshall plan? (I do not, by the way, think that central banks ought to treat foreign creditors differently.)

He is right that nobody important wants to say it, but blogs have been pointing this out from the beginning. Still, the comparison to the cost of the Marshall plan is an original twist.