The Big Picture |
- Governments Have Been Covering Up Nuclear Meltdowns for Fifty Years to Protect the Nuclear Power Industry
- Site Advert Update: Help Me Kill Junk Ads
- Why Aren’t Arab States – Instead of the U.S., France and Britain – Taking Care of Libya?
- Alan Greenspan on the Dunning–Kruger Effect
- Is Housing Ready for a Rebound?
- Foreclosure Fraud
- The End of QE2?
- Putting an end to Wall Street’s ‘I’ll be gone, you’ll be gone’ bonuses
- John Gerzema: The post-crisis consumer
- Barron’s: Buy Japan Now
| Posted: 20 Mar 2011 02:00 AM PDT Washington's Blog strives to provide real-time, well-researched and actionable information. George – the head writer at Washington's Blog – is a busy professional and a former adjunct professor. ~~~ Santa Susana As a History Chanel special notes, a nuclear meltdown occurred at the world’s first commercial reactor only 30 miles from downtown Los Angeles, and only 7 miles from the community of Canoga Park and the San Fernando Valley area of Los Angeles Specifically, in 1959, there was a meltdown of one-third of the nuclear reactors at the Santa Susana field laboratory operated by Rocketdyne, releasing – according to some scientists’ estimates – 240 times as much radiation as Three Mile Island. But the Atomic Energy Commission lied and said only there was only 1 partially damaged rod, and no real problems. In fact, the AEC kept the meltdown a state secret for 20 years. There were other major accidents at that reactor facility, which the AEC and Nuclear Regulatory Commission covered up as well. See this. Kyshtm Two years earlier, a Russian government reactor at Kyshtm melted down in an accident which some claim was even worse than Chernobyl. The Soviet government hid the accident, pretending that it was creating a new “nature reserve” to keep people out of the huge swath of contaminated land. Journalist Anna Gyorgy alleges that the results of a freedom of information act request show that the CIA knew about the accident at the time, but kept it secret to prevent adverse consequences for the fledgling American nuclear industry. 1980s Studies and Hearings In 1982, the House Committee on Interior and Insular Affairs received a secret report received from the Nuclear Regulatory Commission called “Calculation of Reactor Accident Consequences 2″. In that report and other reports by the NRC in the 1980s, it was estimated that there was a 50% chance of a nuclear meltdown within the next 20 years which would be so large that it would contaminate an area the size of the State of Pennsylvania, which would result in huge numbers of a fatalities, and which would cause damage in the hundreds of billions of dollars (in 1980s dollars). Those reports were kept secret for decades. Ongoing? In light of the foregoing, the following quote from the San Jose Mercury News may not seem so far-fetched:
. |
| Site Advert Update: Help Me Kill Junk Ads Posted: 19 Mar 2011 06:30 PM PDT So I have been tweaking the ads that are running on the site — I want to stay away from the junk, and keep them relevant and not-too-annoying (I did see one schlock text ad, which I killed.) I keep seeing a Barbados ad on the site, and I wonder if it has anything to do with my recent trip there — do ad servers somehow hunt for cookies? Can they tell I searched for specific info on something, and then serve me ads on that topic? Very Minority Report (and a little creepy). Let me know if you see any really ugly or inappropriate ads. Grab a screen shot and a copy the URL, send it to The Big Picture -at- Optonline.net, and I will kill that ad. |
| Why Aren’t Arab States – Instead of the U.S., France and Britain – Taking Care of Libya? Posted: 19 Mar 2011 04:53 PM PDT Washington's Blog strives to provide real-time, well-researched and actionable information. George – the head writer at Washington's Blog – is a busy professional and a former adjunct professor. ~~~ Gaddafi is a lying psychopath who is slaughtering his own people. So is the imposition of a no-fly zone a good thing? Perhaps. The Arab League called for it. And even some Libyan rebels pleaded for imposition of a no-fly zone. But if someone is going to stop Gaddafi, it should be Arab League nations – like Saudi Arabia, which is armed to the teeth. America should not be involved, because:
So I don’t care whether or not someone imposes a no-fly zone or takes out Gaddafi … but the U.S. shouldn’t be the one to do it, even as part of a coalition with France and Britain. Indeed, Gaddafi has accused the efforts by the three former colonial powers – U.S., France and Britain – as being “neo-colonial” aggression and a “crusade“. If Arabic countries were the ones to intervene, Arabs wouldn’t be able to make those charges. And if Arab countries are not willing to intervene themselves, that speaks volumes as to their true priorities … especially since Saudi Arabia just sent 1,000 troops to Bahrain to help the tyrants in that country brutally put down a pro-democracy protest |
| Alan Greenspan on the Dunning–Kruger Effect Posted: 19 Mar 2011 02:43 PM PDT Did I write The Dunning–Kruger effect? I mean “Activism.” You see, Mr. “1%.FOMC.Rates-Nonfeasance-banks.can.self.regulate-its.called.innovation-Greenspan.Put,” had the unmitigated gall, the colossal cojones, the planet sized testicles to blame the current slow recovery on Government Intervention! Given how utterly unaware the former Fed Chairman is of his own gross incompetentcies, I thought if I used the actual, title no one would believe me. Alan Greenspan on Activism
Perhaps Messrs Dunning and Kruger would not mind if we renamed their research the Alan Greenspan Effect? > Source: PDF |
| Is Housing Ready for a Rebound? Posted: 19 Mar 2011 01:00 PM PDT David Kotok, who published regularly in the Think Tank, is hosting a conference in Philadelphia in May: > 29th Annual Monetary and Trade Conference Tuesday, May 24, 2011 “Is Housing Ready for a Rebound? QE2, Housing and Foreclosures: Are they Related?" 7:30AM – 8:00AM • Registration & Continental Breakfast 8:00AM – 8:15AM • Welcoming Remarks: 8:15AM – 9:20AM • Session I: Panel Discussion and Audience Q & A "Fannie/Freddie: Where Have We Been and Where are We Going?" Moderator: Gretchen Morgenson, Assistant Business and Financial Editor of The New York Times . Co-author of Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon The speakers above will be available for a book signing during the break. ~~~ 9:20AM – 9:50AM • Session II: "Outlook for Housing Recovery" Followed by Audience Q&A 9:50AM – 10:25AM • Keynote Speaker: Tom Hoenig, President, Federal Reserve Bank of Kansas City 10:25AM – 10:45AM • Coffee Break and Book Signing 10:45AM – 11:25AM • Session III: "What Does QE Mean for U.S. Housing?" Followed by Audience Q & A 11:25AM – 12:10PM • Session IV: "GSEs: What To Do and How to Do It." Followed by Audience Q & A 12:10PM – 12:20PM • Summary and closing comments by Bill Dunkelberg, Chair, GIC 7:30AM – 12:30PM Behrakis Grand Hall, Drexel University in Philadelphia, PA Registration: $50 – Members $100 – Non-Members and includes a one-year membership Registration Available Online: http://www.interdependence.org/Event-05-24-11.php Contact: Jillian Fornito at GIC at jfornito@interdependence.org or 215-898-9453 Global Interdependence Center • 3701 Chestnut Street • Philadelphia, PA 19104 • 215-898-9453 • www.interdependence.org |
| Posted: 19 Mar 2011 10:14 AM PDT
|
| Posted: 19 Mar 2011 10:08 AM PDT The End of QE2?
> New York Times Bestseller |
| Putting an end to Wall Street’s ‘I’ll be gone, you’ll be gone’ bonuses Posted: 19 Mar 2011 09:00 AM PDT Putting an end to Wall Street’s ‘I’ll be gone, you’ll be gone’ bonuses > Want to reform Wall Street bonuses? Try clawbacks. That’s right. We need to make executives personally liable for their reckless bets if we want to remove the risk for taxpayers. That means giving shareholders, boards of directors and regulators the ability to “clawback” past gains when new speculations go horribly wrong. The Federal Deposit Insurance Corp. and the Securities and Exchange Commission have floated proposals on performance-based compensation for traders and bankers. Firms that have more than $1 billion in assets would have to disclose incentive-based bonuses. The largest firms (those with more than $50 billion in assets) would have to pay at least half of their bonuses in compensation that is deferred for three years. The SEC could, in theory, deny plans that encourage excessive risk-taking or outrageous bonuses. While this approach is well-intentioned, Wall Street has proven itself especially adept at circumventing compensation laws. Rules that seek to limit bonuses will likely shift compensation more to salary and commissions. Private profit, public risk Understand this: I do not care what shareholders and their boards pay the people who create enormous value. Whether it’s a chief executive such as Steve Jobs of Apple or a hedge-fund manager such as Steve Cohen of SAC Capital, the people who are paid handsomely for creating incredible profit are not the problem. On the other hand, many others received huge bonuses for bankrupting their firms and driving the economy into recession. Their job performance should be the subject of your ire and of regulators. They brought the world to the abyss of economic collapse because they had incentives to do so. If that sounds unbelievable, consider:
This is backward. The people who should bear the downside are the ones who have the upside. Instead, the system was perversely one of private profit but public risk. Note that it wasn’t merely the staff that engaged in this reckless risk-taking. At investment banks, senior managements were so reckless that they managed to destroy their firms. For this act of gross incompetency, they were rewarded with vast bonuses in cash and stock options. By the time their firms collapsed, they had cashed out hundreds of millions of dollars in legal booty. Consider:
Add to this list Washington Mutual, Wachovia, IndyMac and other bankrupted firms whose senior management took a boatload of money and ran. Nice work if you can get it – and still live with yourself. Blame game How did this happen? Some people blame excessive greed; others say crony capitalism is at fault. I believe we can sum it up in one word: liability. In recent years, there was no legal liability for extreme recklessness. Take a healthy company, roll the dice and if it comes up snake eyes, all you lose are your unvested stock options. Most management does not have significant capital at risk. The cost for pushing a healthy firm into insolvency by excessive risk-taking is some snickering at the golf course. In terms of lost monies, it is minimal. You might be surprised to learn that it was not always this way. Before these firms went public in the 1970s and 1980s, bank management had full liability for their firm’s losses. During the era of Wall Street partnerships, if employees were so reckless as to lose billions of dollars, the partners were on the hook for the full amount. This meant that after the firm was liquidated to pay its debts, the partners’ personal assets were next on the auction block: Houses, cars, boats, even watches were sold to satisfy the debt. Not surprisingly, partnership liability worked wonders in focusing attention on taking appropriate risks. Once a bank or investment firm went public, this liability shifted from management to the company’s stockholders and creditors (namely, the bond holders). Add to this the rise of stock-option compensation, and you have a recipe for extreme short-termism. In his book “The Accidental Investment Banker,” Jonathan Knee described this mercenary attitude with the phrase “IBGYBG.” As bankers signed off on increasingly risky deals, IBGYBG meant “I’ll be gone, you’ll be gone” by the time the really messy stuff hit the fan. Call it what you will – smash and grab, take the money and run. Without partnership liability or clawback terms, IBGYBG was perfectly legal. The simple solution to IBGYBG is legal liability. How this works: There must be a civil liability for recklessness that caused a collapse or loss. Liability for loss accrues when a trader knew and disregarded the risk or, failing that, should have been aware of the risks they were taking. The ability to clawback past gains in the event of a subsequent collapse should accrue to the board of directors, the shareholders and the SEC. It is too late to force the big banks and investment houses to go private and become partnerships again. However, we can return the liability for their recklessness back to where it belongs – on the traders, fund managers and executives who profited from extreme risk-taking. ~~~ Ritholtz is chief executive of FusionIQ, a quantitative research firm. He is the author of “Bailout Nation” and runs a finance blog, The Big Picture. Originally published in the Sunday Washington Post, March 13, 2011 |
| John Gerzema: The post-crisis consumer Posted: 19 Mar 2011 07:00 AM PDT John Gerzema says there’s an upside to the recent financial crisis — the opportunity for positive change. Speaking at TEDxKC, he identifies four major cultural shifts driving new consumer behavior and shows how businesses are evolving to connect with thoughtful spending. Record Aug 09, Posted Oct 09 |
| Posted: 19 Mar 2011 04:14 AM PDT Interesting cover on Barron’s this week: This is hardly a contrary view — I’ve heard from lots of people saying they are doing the same thing. As mentioned previously, stick with the small cap funds (DFJ, SCJ, and JSC). The large market cap ETF (EWJ) is not the ideal investment for the bounce back (already underway) >
> |
| You are subscribed to email updates from The Big Picture To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
The Big Picture (ritholtz)
0 comments:
Post a Comment