The Hun's News Invasion, Dec 17th
Time for another edition of the Hun's New Invasion --- plundering the news from all over the world!
On the plate for this episode:
Citi Shares Down After US Govt Backs Off On Selling Shares
Link - BBC
Surprise, surprise! As it turns out, there was weak demand for Citi's latest secondary offering that seemed to be crafted solely to benefit executives and increase salaries of higher-ups. Citi shares plummetted and the US govt backs off selling its shares. This is yet another (albeit minor) blunder by the Obama Administration. Citi should have never been allowed to exit TARP in its current condition.
Howard Dean Slams Healthcare Overhaul
Link - Associated Press
Dean is the one of the first major Democrats to come out against the bill. And Iagree with a lot of the points he makes. I'm open-ended on the issue of healthcare reform, but I think "Obamacare", as it has come to be known, will do much more harm than good. In particular, I believe the "mandatory" coverage aspect is an insurance industry handout (as does Dean) that steals from the poor to give to the rich. I don't see how this bill would significantly reduce costs, either. As terrible as the current system is, I think it's still better than a post-Obama reform system.
Howard Dean's Op-Ed Piece Opposing 'Obamacare'
Link - Washington Post
Funny enough, I wrote an op-ed piece to WaPo about a month ago on this very issue. I talked about my experiences several years ago in Atlanta and how I could not afford insurance, but I made enough money ($22K) so that I would not be considered "poor" by the Federal government. I would most likely not have qualified for any assistance and would've simply been required to take on another expense I could not have afforded. WaPo didn't publish my piece. *Grumble, grumble* In any case, I am happy to see someone prominent (that is not a nutcase talking about "death squads") come out against this.
British Airways Cabin Crew Strike Illegal, Court Rules
Link - BBC
In the same vein as the last issue, there are dogged pro-union people and dogged anti-union people. I fall into neither camp. Unions can be a good tool sometimes and there are examples where unions have really saved a company. Whereas, there are also bad, dumb, and corrupt unions. They are really no different corporations when you get down to it --- some good, some bad. The particular union that organized this strike falls into the "bad" and "extraordinarily dumb" category. I wouldn't feel sorry for any of them if they lost their jobs. You have an airline barely struggling to survive and a group that is probably overpaid to begin with demanding more money by trying to stage the most disruptive strike possible. These bozos need to be fired; not given raises.
Is the Treasury's Monetary Policy Effective
Link - Seeking Alpha
Andy Harless is one of the most underrated economic writers on the web. I don't always agree with him, but he always raises interesting and well-thought out points. This article is worth a read and believe there needs to be more focus on how the government finances its debt --- because very little attention is paid to that. Only the debt-load itself is looked it; which would not be a good way to analyze a business. After all, if a company can borrow at 4%, it's debt is much safer than a company that can only borrow at 9%.
Obama Draws Blank on How Banks Really Work
Link - Seeking Alpha
Jumping from the macro to the micro, bank investor Tom Brown critiques Obama's contradictatory signals to the banks. I agree with most of his analysis. The banks are trying to be prudent and take what steps they can to insure survival and grow in the future. Meanwhile, the FDIC is hiking up capital requirements in anticipation of regulatory increases on these metrics. Yet, Obama wants the banks to lend out more. Wasn't that the problem to begin with? That the banks were recklessly lending out to anyone?
Gold Buying by Central Banks May Send Signal To Sell
Link - Bloomberg
Another article that will draw the ire of the goldbugs. Interesting argument, though. When you really get down to it, central banks are the market movers on something like gold, so a "speculative frenzy" occurs when they are increasing their reserves in the most dramatic fashion. Once their buying slows, who is left to fill the void? This kind of brings up a basic contradiction in the gold investing hypothesis --- goldbugs buy in on the basis that fiat money systems are doomed for failure; yet gold only maintains its value because the central banks increase their gold reserves. If central banks quit buying; gold's value would actually plummet.
Advent Christmas Challenges Consumer Culture
Link - Time
This is definitely one of the more interesting articles I've read lately. Admittedly, I'm not a religious person, but I do find myself happy to see a movement within religious circles to move away from consumer-mania and focus on the things that are really important.
French Farmers Lay Hay in Protest of Falling Crop Prices
Link - Al Jazeera
While I certainly sympathesize with the French farmers, I don't see how subsidizing crops solves any problems. I believe this is simply part of a larger macroeconomic shift towards mass production of food. Is this a good or bad thing? I say both. I think quality does take a backseat, but at the same time, you can't feed 7 billion people without it. Unfortunately, farmers pretty much get screwed at every point in civilization --- it's not merely a recent phenomenon.
Doubt Grows Over Copenhagen Talks
Link - Al Jazeera
A good article analyzing the situation --- I don't have anything to add.
South Korea in $10bn Ghana Homes Deal
Link - BBC
Nothing to add here, either. Just found the article interesting.
Saxo Bank's 10 Outrageous Predictions for 2010
Link - Financial Times/Alphaville
I include this just for fun. Most of these are normally wrong. I do, however, find #6 interesting. I don't believe a third party will emerge in 2010, but I have been speculating that a potential third party challenge could come in the 2012 Presidential election. We had eight years of Republicans, who were wedded with corporate interests, that turned out to be disastrous. Now, we've had a year or so of Democrats, also wedded to corporate interests, that seems to be alienating people as well. There's a lot of anger being directed at both parties right now. While the criticisms are often off, the basic sentiment is on; neither party serves the interests of the American public. I don't believe the "challenge" will succeed if it happens; the system deeply entrenches the two major parties; but I believe we are starting to get back to that tipping point where people are incredibly dissatisfied with both sets of scoundrels. Oh where art thou, Ross Perot? ;)
That's all for today. Au revoir!