Monday, December 8, 2008

My faves for the day (December 8, 2008)

From Naked Capitalism, Auto Industry Duress to Take Toll, Worsen Unemployment (via A Bloomberg story tallies the likely damage):“GM told Congress it projects trimming its workforce by as many as 30,000 employees by 2012, or 33 percent. Dealers for the biggest U.S. automaker would fall to 4,700 from about 6,500.”

RW: That’s just preying on the public’s fears. 2012 is over three years away, and GM better be sizing down by then!

A new take on the job report by Macro Man, Frozen:“Macro Man and his companions were only the only frozen things in the market, however. Friday's US employment report confirmed that hiring across businesses has been well and truly frozen, as November job losses were the worst since December 1974, when Macro Man was but three years old.”

RW: I now know that Macro Man is 4 years older than I and graduated high school in 1989.

From WSJ Real Time Economics, BIS: No Evidence of Second-Round Effects From High Oil Prices: “But a paper by two BIS economists found that in recent years “higher commodity prices have generally not spawned strong second-round effects on inflation.” That suggests that a number of central banks were wrong to leave their key interest rates unchanged until well after oil prices began to fall from mid-July, and until after the intensification of the global financial crisis from September on made it inevitable that much of the global economy would enter a recession.”

RW: In other words, Trichet got it wrong.

From the Skeptical Optimist, The USA's debt burden, according to the TIT Ratio: “Notice that our current ability to afford the federal debt is better than it was at the end of 2000 — even though we've been adding debt at a fast pace recently. (Reasons: our economy has grown, and the interest rates have dropped.) The good news today: we have lots of room to borrow because there are plenty of investors willing to buy Treasury securities at low interest rates (near-zero rates, in fact).”

RW: Haven't had a lot of time to think about this, but still, it is an interesting concept.

From The Conglomerate, Recession Silver Linings: “So, the recession may be bad if you're my parents, who might like to retire sooner rather than later, but if you're in your mid-20s, have a job, and want to buy a house and maybe a lot of home electronics this Christmas, you're in luck!”

RW: Her number two recession blessing is: Shipping seems to be free. Man, I just bought a pair of Juicy sunglasses (at Rue La La, an online trunk store – membership only, so send me an email if you would like to be invited) for my sister-in-law and paid shipping (and was quite upset about it).

From the Bing Blog, Can the party please be over?: “While I have nothing but respect and affection for Mr. Colvin, who has probably forgotten more than I ever knew about economics, I do have to say I’m disappointed with this analysis. In fact, it qualifies, I think, as the first salvo of note in what will most certainly be the battle to maintain Big Finance’s right to screw with everybody else’s money as soon as things get back on their feet again.”

RW: Honestly, I thought the same thing when I read this article (or at least along the same lines – can never think like the Bing).

From FOX News (the classiest of them all), 'Hero Dog' Pulls Injured Friend From Oncoming Traffic: “Footage from a traffic camera overlooking a busy freeway in Santiago, Chile captured a dog performing a heroic act — pulling an injured friend from oncoming traffic.

And from my friend, Kerry Hawkins, at K Hawkins Photography and Design:


  1. You know, I am probably older than most of the people who are part of your blog (ARG!! Can't believe I said that!!) Who can say that age always brings wisdom. The phrase "out of the mouths of babes..." didn't just appear in a vacuum. Go for it and think!

  2. TIT ratio (another theory estranged from the real world).

    Those who are wont to minimize the ill effects of the deficit are prone to compare the size of the deficit with nominal GDP, as if the volume of nominal GDP were independent of the size of the deficit. Unprecedentedly large deficits “absorb” a disproportionately large share of nominal GDP

    Present deficits are unprecedented no matter how measured, and the past gives us no reliable guide to the future effects of deficit financing, beneficial or otherwise.

    To appraise the effect of the federal budget deficit on interest rates, it is necessary to compare the deficit, not to GDP, but to the VOLUME OF CURRENT SAVINGS MADE AVAILABLE TO THE CREDIT MARKETS.

    The current deficit is absorbing about ??% of gross savings (go to St. Louis #'s).

  3. It would seem that somewhere, somehow, if total net debt (not just Federal Debt) keeps rising faster than production (Real-GDP), the burden of interest charges at some point now indefinite and unknown, but nevertheless real, will become too great to carry.

  4. It should be recalled that the charges on debt are related to a CUMULATIVE figure; and since the multiplier effects of debt expansion on income, the ingredient from which the charges must inevitably be paid, is a NON-CUMULATIVE figure, it would seem that the time will inevitably arrive when further debt expansion is no longer a practical or possible expedient, either to provide full employment or to keep debt charges with tolerable limits.

  5. The significant economic purposes for which a debt was contracted, or the manner in which it was financed, is of inestimatable value in evaluating it's impact.

    For example if the debt was acquired to finance the acquisition of a (new-security), the proceeds of which are used to finance plant and equipment expansion, rather than the purchase of an (existing-security) to finance the construction of a new house, rather than to finance the purchase of an existing one (as will Paulson's planned $700 bill bailout), or
    to finance (inventory-expansion), rather than refinance (existing-inventories).

    The former types of investment are designated as "real" as contrasted to the latter, which constitute "financial" investment (existing homes). Financial investment provides a relatively insignificant demand for labor and materials and in some instances the over-all effects may actually be retarding to the economy. Compared to real investment,it is rather inconsequential as a contributor to employment and production. Only debt growing out of real investment or consumption makes an actual direct demand for labor and materials.

  6. The Hero Dog piece:

    It was on various news services, I watched it a few days back. It has haunted me ever since.

    I had the supreme fortune to foster, and then adopt (I never meant for adoption, but Nature has a way of entrapping you with bonding) a Wolf/Dog hybrid (technically, an Alaskan Husky, which is a collective of any hybrid bred for sled duty) from the Yukon. He was in the preliminaries for the Yukon Quest (equiv to the Ididarod), 13 when I got him....and pragmatic beyond belief.

    I had to pull the plug on him two years later, I managed to keep him alive and fight his cancer for those two years.

    How profound was his impression on my life? I don't state this lightly:

    He changed me from being an Atheist to being an Agnostic. He shattered so many illusions I had on Canines that I had garnered from having domestic dogs all my life.

    His thinking was entirely different. He was attuned to survival...and *leadership*! He was the alpha of the two lead dogs in the 14 dog team.

    Science continues to be "astounded" at the intelligence and *Humanity* of many animals.

    Now I'm in Science, but I still can't help but scoff at headlines like:
    "Scientists are amazed that dogs can understand up to 300 words".

    Ummmm....ever have a dog? I'll take that research money, thank you very much, and prove the same thing and more.

    They are now 'astounded' by the depth of emotions with our cousins in the animal world.


    Here we are, searching for 'other intelligent life' in the Universe...and we're surrounded by it.

    Whatever, RW, it is a very revealing aspect for you to publish comment on the matter. The 'Chilean Companion' was actually killed, but again, just as it is against human nature to 'commit an indignity to a human body', so it is for many animals too. Elephants are renowned for their respect for their dead.

    I'm asked by many if I "will ever get another dog" after the Wolf hybrid. Even the musher who raised him in West Dawson stated: "He was one of a kind" until fate brings me another...the answer is no.

    I miss him dearly.....Mans' Best Friend.