He is risen!

... even, especially, for those of us who are fallen.

Happy Easter to current and future believers.

Ivy League snobbery: justified?

You make the call.


(click twice to enlarge)

Shootout at the Lone Jack Corral: Vilkin says Upton drew first

Ooops... meant to send you here.

Words of Wisdom from the Grave

...updated for 2012/2013.

Miss you Bill

From beggar-thy-neighbor to bugger-thy-saver

Bill McBride at Calculated Risk agrees with Zimbabwe Ben when he says that today's money-printing orgy isn't a case of "beggar-thy-neighbor."

Zimbabwe Ben:

Indeed, the decline in the value of the pound after 1931 was associated with a relatively early recovery from the Depression by the United Kingdom, in part because of some rebound in exports. However, according to this view, the gains to the depreciating country were equaled or exceeded by the losses to its trading partners, which became less internationally competitive--hence, "beggar thy neighbor."

The idea behind beggar-thy-neighbor is that by devaluing your currency, you make exports cheap and imports expensive, and steal manufacturing jobs from your trading partners.

We have been using the phrase "global competitive devaluation" here for years, but McBride and Zimbabwe Ben have a point. There's nothing "competitive" in this clubby cabal of money-printing central bankers. They are all printing and devaluing their currencies relative to real assets, but currencies are being devalued at generally similar rates so no one central bank is trying to get way ahead of the others and "beggar-thy-neighbor." It's global co-ordinated devaluation, and the victim is not a trading partner nation but anyone anywhere who has saved money and is now earning 0% while the value of his currency falls.

Welcome to "bugger-thy-saver."

Gretchen Morgenson: government which has proven itself incompetent at pricing mortgage risk to continue indefinitely in the business of pricing mortgage risk

The inertia of central planning:

[...] the future of housing finance in this country seems to be coming down to two taxpayer-backed concepts. One is the status quo, with Fannie Mae and Freddie Mac continuing to back the vast majority of mortgages. The other is a newly conceived public guarantor with some of the same problems that got Fannie and Freddie into trouble.

Let’s begin with the status quo. The taxpayer rescue of Fannie and Freddie in September 2008 has cost $137 billion so far. While this has been paid down from an initial $187.5 billion, taxpayers aren’t likely to get their money back anytime soon. Last fall, the regulator charged with overseeing Fannie and Freddie estimated that the taxpayer bill for the companies could be $200 billion by the end of 2015.

Remember when University of Wisconsin professor Menzie Chinn mocked Sarah Palin for calling Fannie and Freddie "too big and too expensive to the taxpayers?"  Who's the idiot now?

[The alternative plan's] details differ from the broken system that the commission aims to replace, but there are many similarities.

For example, the plan requires the government to be sophisticated at pricing the risk in the mortgages it will back. If it isn’t, the premiums it receives will be insufficient to pay future loss claims.

This sophistication is not a given. Neither Fannie nor Freddie has been adept at setting an appropriate price for their guarantees — that’s why they’re choking on more than $100 billion in losses. Why would a new public guarantor do the job any better?

And what would central planning be without crony capitalism? The corrupt, bankrupt government agencies made some politically-connected appointees fabulously wealthy:

Among the retirees receiving pensions courtesy of the taxpayer are Franklin D. Raines, Fannie Mae’s former chief executive; J. Timothy Howard, the company’s former chief financial officer; and Leland C. Brendsel, former chief executive of Freddie Mac.

All three men were ousted from their companies amid accounting scandals — Freddie’s in 2003 and Fannie’s a year later. All were paid handsomely through their tenures. Between 1998 and 2004, for example, Mr. Raines received $90 million in compensation, regulators found. Mr. Howard received $30 million over the period. When Mr. Brendsel left Freddie Mac, he was earning $1.2 million a year in salary.

Even so, Mr. Raines receives a pension of $2,639 from taxpayers each month, the documents show; Mr. Howard receives $4,395 and Mr. Brendsel $8,039. Requests for comment from the former executives’ lawyers were not returned.

The documents show that taxpayers spent $11 million last year on medical costs for 1,392 Fannie and Freddie retirees. And from September 2008 through 2012, taxpayers also spent $114 million for legal bills racked up by former executives and directors testifying in lawsuits relating to the accounting scandals or financial crisis inquiries.

Rand Paul was right!

"Pilot program targets teen drivers" - headline, San Diego Union-Tribune, March 23, 2013