- The $ Cost of 9/11
- Why Start Ups Fail to Scale
- Preparing for a Credit Crisis
- 10 Saturday AM Reads
- Clash of The Clueless: Friedman v. Santelli
- Tracking the European Debt Crisis
- ‘McLaren Special Operations’ to offer personalised service for MP4-12C
- 9/11 and the War on Terror: Polls Show What People Think 10 Years Later
- The GOP Debate In 45 Seconds
- This Time is Different . . .
Posted: 10 Sep 2011 12:00 PM PDT
I try to avoid getting caught up in the 9/11 retrospective hype. I’ve already had my say (A Personal Recollection From a Day of Horror (September 12th, 2001).
Meanwhile, here is the NYT’s infographic of the numbers:
Click for interactive data:
Source: 9/11 : The Reckoning
Postscript (September 16th, 2001)
Feedback from around the World (September 19th, 2001)
9/11 Reflections (September 11th, 2010)
Posted: 10 Sep 2011 10:00 AM PDT
click for ginormous graphic
Posted: 10 Sep 2011 09:45 AM PDT
Preparing for a Credit Crisis
The Consequences of Austerity
Posted: 10 Sep 2011 06:30 AM PDT
Hey, that was a FUN week, as Markets got shellacked nicely. While you recover, here are some distractions to keep you busy — your weekend linkfest:
What are you reading?
Posted: 10 Sep 2011 05:00 AM PDT
FRIEDMAN: No, I don't think it's a Ponzi scheme.
SANTELLI: Earlier in the show you said that we're putting a burden on our kids that's unsustainable. What's the definition of a Ponzi scheme?
FRIEDMAN: It's a program that made promises that it cannot keep in full and it needs to be fixed and reformed.
SANTELLI: Isn't that exactly what a Ponzi pyramid is?
FRIEDMAN: I don't think it is a Ponzi scheme as a criminal endeavor.
SANTELLI: No, no — forget the criminal side. You need more people to perpetuate a myth because if the people stop the myth is known to all. That's my definition of a Ponzi scheme. Let's call at it chain letter, a pyramid scheme. Isn't that by definition what Social Security is? Take the legalities and fraud out.
STEVE LIESMAN: Why is it a Ponzi scheme, Rick?
FRIEDMAN: It is pay as we go. Ronald Reagan fixed it. Why can't we fix it?
SANTELLI: What does Ronald Reagan have to do with my question?
FRIEDMAN: What does your question have to do with reality?
MICHELLE CARUSO CABRERA: We brought it up.
SANTELLI: You can't decide that more people is the only thing made Social Security work. We have a real issue because many people in government seem to like to read your work.
FRIEDMAN: What makes Social Security work is fixing Social Security in terms of the population demands.
SANTELLI: I didn't ask if we should fix it or not. I asked if it's a pyramid scheme.
FRIEDMAN: Your question is idiotic. That's what you asked.
SANTELLI: You're answer’s idiotic. I'm done. I feel good.
FRIEDMAN: So do I.
Source: Clash of The Clueless
Posted: 10 Sep 2011 04:15 AM PDT
Posted: 10 Sep 2011 04:00 AM PDT
Posted: 10 Sep 2011 03:29 AM PDT
Polls Show that Americans Think We Overreacted, Overspent and Weakened Ourselves Through the War on Terror
As the Brooking Institution reported yesterday, Americans that the government overreacted and overspent in reaction to 9/11:
(Incidentally, top American military leaders agree, saying that the war on terror has weakened our national security).
Rasmussen has repeatedly noted that Americans are strongly opposed to further military or other types of intervention in Arab countries:
This was true for Libya. And it is true elsewhere. For example, the overwhelming majority of Americans are also opposed to intervention in Syria.
Polls Show Widespread Doubt About Official Explanations
The results of polls on peoples' beliefs about 9/11 around the world might surprise you:
Posted: 10 Sep 2011 02:56 AM PDT
Posted: 09 Sep 2011 11:30 PM PDT
Those dreaded words you never want to hear as an investor. But check out the Fortune Magazine graphic of this recession relative to others since the WWII. Yes it's a balance sheet problem and the economy needs more time to heal and delever.
We also maintain, however, at least some, if not much of the weakness, especially in the labor market, is structural and not cyclical. Take the U.S. Postal Service (USPS) as the poster child of the current problems plaguing the U.S. labor market. The USPS has 571,566 full-time workers making it the country's second-largest civilian employer after Wal-Mart. It has eliminated 110,000 jobs in the past four years and according to the FT,
Now why is this? Not enough stimulus? Monetary policy too tight? Insufficient quantitative easing? To paraphrase James Carville, "It's technology, stupid!" The rise of the internet, e-mail, and Twitter coupled with some piss poor management, which failed to adapt to the changing times, and the result is one of the nation's largest employers facing bankruptcy and mass layoffs.
Borders Books Inc. is also in the process of liquidating the last of its stores, which will result in a final mass layoff of close to 11,000 employees. True, they failed because of "lack of demand" for their goods and services. But not because of cyclical forces that could be offset by fiscal and monetary expansion. The rise of the e-book, Kindle, and iPad shut them down.
The Shumpeterian "creative destruction" of one sector is not being equally and instantaneously offset by job creation in the sectors benefiting from technology. This takes time, retraining, political vision and strong leadership. Companies can't hire enough software engineers in these fields because the current labor pool lacks the education, training and skills.
Policymakers must recognize the global economy is sitting at the elbow of an exponential curve in technological advances that is and will uproot everything from manufacturing to how we read our mail and books to how medical services will be delivered.
We've posted several pieces on the Global Macro Monitor blog about the role of transformative tech, including medical apps where smart phones can be transformed into EKG monitors and cataract detecting devices. How do you think this revolution will impact the traditional health care workforce?
The painkillers of fiscal and monetary stimulus, including negative real interest rates and quantitative easing, has no doubt cushioned the blow of the great crash of 2007-08. We're the first to thank Paulson, Bernanke, Geithner and Co. that we are not all farmers living under the freeway. They all deserve the Presidential Medal of Freedom in our book for saving and stabilizing the global financial system.
But the continued use of cyclical policies to deal with structural issues has created an acute addiction in the markets and economy causing more uncertainty, political angst, and volatility, in our opinion. This is especially true in the equity markets, which was evident yesterday in its reaction to Mr. Bernanke's speech.
The policy medicine has now become an additional disease afflicting and distorting markets and the economy, which are now hooked on the painkillers.
Policies that address structural issues, though painful, will go a long way in healing the economy. A long-term credible budget plan which addresses the structural deficit will instantly reduce much of the uncertainty holding back investment. Punishing savers with negative real interest rates "for at least two more years" will not and may actually consume the rest of the decade in cleaning up the unintended consequences of the Fed's serial distorting of the relative price of money.
There's now talk of the Fed targeting unemployment. How 'bout this. As part of the next quantitative easing, the Fed creates a $1,000 checking deposit for every citizen who agrees to write ten letters to friends, especially in rural parts of the country. This stimulates demand for postal services and thus eliminates, for a time, the need for mass layoffs at the USPS.
In no way do we intend to be insensitive to the workers at risk of losing their jobs. But is this really where economic policy is headed? Where is the leadership?
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