Monday, March 31, 2014

Your whole perspective gets hazy

So you turn to options markets during times of political uncertainty, say Bryan T. Kelly, Lubos Pastor, Pietro Veronesi, to determine what to do, what to do;
Equity markets are an informative gauge of the price of political uncertainty. They reveal investors' assessments of how political risks impact economic activity into the indefinite future, conveniently summarised in present value terms. Day after day, stock prices react to news about what governments around the world have done or might do.
How to measure that?
Options are ideally suited for this analysis for two reasons.
  • First, they have relatively short maturities, which we can choose to cover the dates of political events. An option whose life spans a political event provides protection against the risk associated with that event. Since the political event is often the main event that occurs during the option’s short life, the option’s price is informative about the value of protection against political risk.
  • Second, options come with different strike prices, which allow us to examine various types of risk associated with political events, such as tail risk.
We find that at-the-money options whose lives span political events are on average 5% more expensive than neighbouring options that don't span the event. Furthermore, the well-known implied volatility smirk dramatically steepens around such events as investor demand for insurance against tail events soars. For example, among put options that are 10% out-of-the-money (and thus provide better protection against tail risk than at-the-money options), options whose lives span political events are more expensive by 16% compared to neighbouring options. We also find that political events are associated with abnormally high variance risk premia, so that insurance against variance risk is also more expensive ahead of such events. 
Politicians are expensive;
We show that political uncertainty commands a risk premium, especially when the economy is weak. By raising the firms’ cost of capital, political uncertainty depresses investment and real activity. Furthermore, by raising risk premia, political uncertainty destroys market value. Perhaps we should ask reckless politicians to chip in. 
Or come up with better ways to control how large a role politics plays in our lives.

Let's Go Dutch

When life gives you higher sea levels, make the most of it (sink or swim?);
 "We shouldn't see water as a danger, but as a chance, as a challenge."
And they've been up to every challenge the water has given them for centuries.
"Leven met water" reflects the new strategy in civil planning in the Netherlands. A major shift is taking place, away from working against increasing water, and instead trying to work with it. Marshes formerly dyked are being re-flooded, defunct canals are being brought back into use and catchment lakes are being built. In other places, some rivers are being dug deeper, and dykes are being moved away from the river's edge.
 Necessity, the mother of floating homes.
The Netherlands' efforts in combating rising water levels are starting to attract attention worldwide, too. Delegates from Thailand, Vietnam, Australia and the United States have all visited the country recently to meet with Dutch civil engineers, to discuss methods to alleviate problems caused by rising water levels.
What's' sad is that this is news. Human adaptability has been going on for eons, and will continue to do so.

Sunday, March 30, 2014


The landlords of Little Italy made them offers they could refuse, and they did;
Rising rents and changing demographics have driven Little Italy to the verge of extinction. Once a teeming neighborhood stretching 50 square blocks, it now barely covers three blocks of Mulberry Street — and even that strip is under threat.
“You can’t rebuild Little Italy,” said Robert Ianniello Jr., owner of the famed Umbertos Clam House. “If we go away, it will never be here again. You can’t build an Olive Garden and say it’s Little Italy.”
Ianniello is battling a rent increase from a new landlord who bought the building last month for $17.5 million. He recently got a rent bill for $34,000 a month — more than double what he used to pay.
It’s a landlord problem,” said Ianniello, who heads the Little Italy Merchants Association. “They think this is Fifth Avenue.”
Eight eateries have shut down in the past year.
Where are the mob hit men going to find their victims now?

We're #1!

So naturally, we're also number one on the enemies list of NYC's Mayor;
The combination of weak charters closing and strong charters replicating is having powerful effects. The first major assessment of charter schools by Stanford's Center for Research on Educational Outcomes found their results to be extremely variable, and overall no better than conventional schools as of 2009. Its follow-up study several years later found that steady closures and their replacement by proven models had pushed charters ahead of conventional schools. In New York City, the average charter-school student now absorbs five months of extra learning a year in math, and one extra month in reading, compared with counterparts in conventional schools.
Other reviews show similar results, and performance advantages will accelerate in the near future. Charter schools tend to start small and then add one additional grade each year. Thus many charters in New York and elsewhere are just getting started with many children. As the schools mature, and weak performers continue to be replaced, charters will become even more effective.
Contrary to Mae West, too much of a good thing is not wonderful, for the competition;
At KIPP, the largest chain of charters, 86% of all students are low-income, and 95% are African-American or Latino, yet 83% go to college. In New York City, one of the academies Mr. de Blasio has denied additional space to is Harlem's highest-performing middle school, with its 97% minority fifth-graders ranking No. 1 in the state in math achievement. It and the 21 other schools in its charter network have passing rates on state math and reading tests more than twice the citywide average.
Judged by how far they move students from where they start, New York charter schools like Success Academies, Uncommon Schools, Democracy Prep and Achievement First—and others like them across the country—are now the highest-achieving schools in America. The oft-heard claim that charters perform no better than conventional schools on the whole is out of date and inaccurate.
Horse and buggy educational economics? Oh, we don't like that metaphor either.

Macy's: It's bad business practice, we think... shoot our customers, so you can shop in safety at our Fresno store;
A 21-year-old Afghanistan veteran claims she was denied a job in Macy's specifically because of her service in the war-torn nation.
Kayla Reyes says she interviewed for a job on the sales floor at Fresno's Fashion Fair mall in February but was told that she wouldn't be able to relate to customers because she had seen combat.
Reyes, who enlisted in the military at the age of 17, claims that the interview took a turn for the worse when her 4-year army career came up and that the hiring manager said, 'Being that you've been over there, you wouldn't really know how to approach people.'
Give her a job in Human Resources then!

Saturday, March 29, 2014

!Yanqui vuelve!

We told you you'd miss us when we were gone;
Cuba’s National Assembly is expected at a special session on Saturday to approve a new law that will pave the way for private foreign investment “in all sectors” – with the exception of education and health – as the government seeks ways to help bring money to the island’s fledging economy.
Even the Castros can't break the educrat monopoly? But what about old, bad habits;
Investment properties “cannot be expropriated except for public use or social interest reasons,” according to one report. But if this occurs, the investor will receive full compensation.
A Cuban bond with Fidel's portrait on it?
Currently, there is some foreign investment in the island, but it is mostly centered on the tourist industry.
Can't imagine why.

She who does not learn from the past...

Is dooming her beneficiaries to unemployment, if history matters, said Bruce Ramsey last December;
What is the likely effect of the rise in the minimum wage in SeaTac to $15, or some other increase? I was cleaning out my paper files preparatory to retirement, and under “Minimum Wage” was a study dated January 1991 from the University of Washington’s Northwest Policy Center. The principal investigator was James McIntire, who is now Washington state treasurer, the official responsible for floating state bond issues on Wall Street.
The study’s aim was to judge the effect of a 1968 state ballot measure that increased Washington’s minimum wage in two steps to $4.25 ($7.59 in today’s money) by January 1990. The effective minimum in Washington for most workers had been the federal minimum of $3.35.
This was a 27 percent increase over two years, which was fairly big, but less than half the 63 percent increase between the 2013 state minimum of $9.19 and the 2014 SeaTac minimum of $15.
McIntyre, like most State officials in Washington, is a Democrat. But, apparently, one who stayed awake in economics class;
In its study, McIntire’s team surveyed more than 1,000 employers and interviewed more than 500 affected employees. It also looked at state Employment Security data.
More than 100,000 employees got wage increases in 1989 and 1990 because of the rise in Washington’s legal minimum. Over two years, employers reported laying off 11,700 workers “as a result of the minimum wage increases.” Employees reported about the same number.
In other words, for every 10 workers who got a raise under the law, one worker somewhere was laid off. The most-affected employers were restaurants and bars (the law also eliminated the tip credit), particularly in the lower-wage parts of the state. [Italics in the original.] 
So, two decades ago, the state of Washington ran an experiment, and the Laws of Supply and Demand were still operative.

Friday, March 28, 2014

Vernon, Vernon, he's our...retirement plan?

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Reputación de verdad seriamente impugnado

El País is beginning to have doubts about el führer;
Two days after Venezuelan President Nicolás Maduro announced the arrests of three air force generals for reportedly plotting to overthrow his government, some sectors have begun to cast doubts as to whether such a conspiracy actually existed.
During an address to commemorate the 20th anniversary of the release from prison of his predecessor and mentor, the late Hugo Chávez – who led the unsuccessful 1992 coup to overthrow President Carlos Andrés Pérez – Maduro vowed to severely punish the three officers, along with anyone else who was part of the alleged plot.
Jet jockeys would seem to be unlikely coup initiators.
Many sectors began to question the real motives behind their arrests. Doubts also surfaced on whether the three were actually capable of leading a coup. Military analysts maintain that the air force doesn’t have the power to carry out an overthrow without the army’s support. 
Their crime seems more likely to have been, talking with foreigners;
On Tuesday, the Venezuelan president made the surprise announcement of the capture of the three air force officials at a meeting with members of a fact-finding mission from Union of South American Nations (Unasur), which traveled to Venezuela to investigate the ongoing social unrest. 
Not that Maduro doesn't have real enemies.

Slow down, you've moved too fast

San Franciscans were joy riding(?), and the answer is more employees watching out for the other employees;
BART's chief engineer has recommended the district hire 40 new track maintenance workers in response to new safety rules imposed by the state after last year's tragic death of two top track experts.
BART sources tell us Don Allen's budget proposal - spelled out in a white paper he prepared for the district - could carry an annual price tag upward of $5 million a year.
That comes to a cool $125,000 per worker. Never let a crisis go to waste.

And, btw, the trains will be slower and fewer too.

Why don't you go with that, Mr. Obama

Billions and billions of dollars in trade between Windsor, Ontario and Detroit, Michigan, and the Obama Administration has a very good idea;
In a potential blow to a project that would speed traffic over one of the world's busiest trade routes, the Obama administration is holding back financial support for a customs plaza that is key to the future of a proposed international bridge linking Detroit and Windsor, Ontario.
Canada has already pledged to provide or guarantee private funding for most of the project's expected $3.65 billion cost, including $550 million for a connection between the bridge and U.S. Interstate 75. The Obama administration approved construction of the bridge last April, and Ottawa expected Washington to contribute $250 million to build the plaza, without which the bridge wouldn't be viable.
The bridge has support of Michigan's Republican governor and its two Democratic senators, among others in the state's congressional delegation. But U.S. officials say that there are limited infrastructure dollars and competing projects and that private money can step in on this bridge.
Maybe a phone call to ex-Governor Mitch Daniels might shed a little light on how to proceed. After all, the Canadian social security system currently owns the rights to the revenues from the Indiana Toll Road, for which the state of Indiana was paid almost $4 billion in 2006.

Contrary to the wailing and gnashing of teeth from the usual left-wingers at the time, it's worked out pretty well for Indiana, as they took the upfront payment and improved other roads and highways in the state. That led Honda to build a new auto plant in the state.

He may know much about art

But he's no slouch at financing it too;
Max Hollein, who was born in Vienna in 1969 as the son of famous architect Hans Hollein, is known for connecting money and art like no one else in the German museum landscape. The different buildings of the Städel Museum [in Frankfurt] were largely financed by private donors. Time and again Hollein has come up with new partners to bring art to the market.
Together with German drugstore chain "dm," Hollein and his Städel Museum now want to offer 100 art pieces as prints for people's living rooms. Hollein, who is well connected in the city of Frankfurt am Main, knows where to get funding for his museum temple and manages to walk the line between art and commerce. 
Actually he erases the line, recognizing that it's just business;
I grew up in a very artistic household, in a family that was deeply entrenched in the art scene and actually still is. I started dealing with art early on, at the beginning maybe not completely voluntarily, but I was confronted with art and artists who were friends of the family. That's how I grew up. It was a completely natural environment. But at the same time I developed certain interests outside of the art world, namely for economy and the world of finance. That's how I ended up studying both art history and business administration. In this respect, two souls are dwelling in my chest [as Goethe once said], but I was able to combine them, and I still am.
He knows what he likes, and what others do too.

Here's looking at you, Vlad

Oliver Bullough has been seeing a lot by just observing Vladimir Putin. That, and taking him at his word;
When Putin spoke to the Duma [in 1999, upon being named by Boris Yeltsin, Prime Minister], his homeland was a different, and less respected place [from the Soviet Union in which he'd grown up, and served as a KGB officer]. He spoke the language of a man who yearned for the lost certainties, who longed for a time when Moscow was to be reckoned with. He did not say it explicitly, but he was clearly stung by Russia's failure to stop Nato driving the forces of its ally, Serbia, out of Kosovo just months previously.
"Russia has been a great power for centuries, and remains so. It has always had and still has legitimate zones of interest ... We should not drop our guard in this respect, neither should we allow our opinion to be ignored," he said.
His domestic policy was to restore stability, to end what he called the "revolutions", that had brought Russia low. His foreign policy was to regain Russia's place in world affairs.
Those two core aims have driven everything he has done since. If only people had been listening, none of his actions would have come as a surprise to them.
As they weren't to Sarah Palin and Mitt Romney. Unfortunately, the American electorate was not listening to them in 2008 and 2012. Bullough thinks that Putin is heading for a rough patch ahead though;
Putin has succeeded in building a version of the country of his childhood, one that can act independently in the world, and one where dissent is controlled and the Kremlin's power unchallenged. But that is a double-edged sword, because the Soviet Union collapsed for a reason, and a Russia recreated in its image risks sharing its fate.
So maybe those non-Obamalike favorability ratings will be dropping. If Barack Obama is reading, that is.

Thursday, March 27, 2014

We've got you, Vlad

Now, how about some of that cheap oil you used to send us;
 Fidel Castro Diaz-Balart, scientific advisor for Cuba's Council of State, said here [Moscow] today that his country is grateful for Soviet and Russian support since 1959, and at a moment of threats and sanctions, he reiterated Cuba's solidarity with Russia.
"We feel especially proud of our relationship with our brothers at a time when sanctions and threats are resurfacing," Fidel Castro Diaz-Balart stated after speaking at the launch of the Russian language edition of the book "Breve Historia de Cuba" (A Brief History of Cuba) at the Moscow State Institute of International Relations.
"If in the days of the mercenary invasion at Playa Giron, the 1962 October (missile) Crisis, and the decades of struggle for our own independence and struggle led to a particular slogan, popularized by the Soviets and especially, the Russians, today we confirm that slogan: Russia is not alone!" said the scientific adviser.
Hmm, so Cuba favors a nuclear weaponed power invading a smaller, nuke-free pest next door?

Me puzzle esta

Anyone know a four letter word for adiós señor presidente;
Crossword puzzles in a local Venezuelan newspaper are calling readers to violent protests with conspiratorial messages, the country’s information minister said today.
Delcy Rodriguez called for an investigation of El Aragueno daily from the industrial town of Maracay, 120 kilometers (75 miles) west of Caracas for putting “encrypted messages” in its puzzles, she said in a post on her Twitter account. She didn’t give any details.
....Brain teasers have triggered the alarm of Venezuela’s socialist government before. In May 2012, state television accused the biggest national newspaper Ultimas Noticias of trying to organize the assassination of then-President Hugo Chavez through coded crossword messages.

Wouldn't give the time of day

The Swiss, pace Mencken, know what they want, and deserve to get it...good and hard;
A Swiss vote earlier this year to tighten immigration could damage the country's watch industry, potentially limiting the number of skilled employees companies such as Swatch Group AG ... and Rolex SA are able to recruit, industry executives say.
...."Without border-crossing workers and without foreign workers in general, we will really have trouble," said Jacques Duchêne, a director of closely-held Rolex and one of the organizers of the Baselworld Exhibition, which opens today. that Swiss natives won't do? Well, maybe demand will decline;
Concerns over the industry's ability to hire come as watchmakers wrestle with sluggishness in their biggest market: China. China and Hong Kong buy a combined quarter of the industry's output, but exports declined last year amid a Beijing crackdown on lavish gift-giving.
The Ukraine crisis could also weigh on the industry as fewer Russians travel abroad.
"The Russians are big buyers of luxury watches, but they aren't traveling at the moment," said Ricardo Guadalupe, chief executive of the swanky Hublot brand. "At our boutique in Munich, for example, there are always a few Russians, but in March there's been zero."

Performance bonuses

If you're an NCAA 'student-athlete' you work for tuition. If you're a coach of a 'student-athlete' you're more like the trainer of a race horse;
Little did grappler Logan Stieber know when he signed on for room and board at the university [Ohio State] that winning the 141-pound weight class at the NCAA wrestling championship paid actual cash. Not to him, of course, because that would violate NCAA rules that seem designed to make everyone money but the athletes themselves.
Instead, [his coach Gene] Smith gets the bonus money, part of a deal where he gets paid every time there are "exceptional athletic achievements" under his watch. Smith already makes $940,484 a year, but if the athletes at Ohio State perform well he could earn more than $1.5 million a year under a sweetheart contract that runs through 2020.
But that might be changing, as the slaves are in revolt;
Ed O'Bannon's lawsuit against the NCAA could go to trial this summer and change everything. Several Northwestern athletes are trying to start a union. And a lawyer jumped in the fray last week with a federal lawsuit on behalf of four players that calls the NCAA and five major conferences an "unlawful cartel" that illegally restricts players from making money while taking in billions.
In the meantime, the NCAA continues to pocket an average of $771 million a year in television rights to the basketball tournament and millions more in ticket sales. There's an official drink for the tournament, as well as an official wireless partner.
Oh the heartbreaking inequality in America.

All that's Gold Plan doesn't glitter

I called Blue Cross directly to ask if its most expensive insurance plan covered the only hospital I'd ever go to in an emergency. Since that's all I wanted to know, that's what I asked. (I like to get to the point that way.)
But -- as happens whenever you try to ascertain the most basic information about insurance under Obamacare -- the Blue Cross representative began hammering me with a battery of questions about myself. 
First my name. (Does that make a difference to what hospitals its plans cover?) Then my phone number. By the time he got to my address, I said, CAN YOU PLEASE JUST TELL ME IF ANY OF YOUR PLANS COVER XYZ HOSPITAL? I DON'T EVEN KNOW IF I WANT TO SIGN UP WITH YOU! 
Finally, he admitted that Blue Cross' most expensive individual insurance plan does not cover treatment at the hospitals I named. Their doctors are "out of network" (and the person who designed this plan is "out of his mind"). 
As a woman in the state of Washington just found out, to the tune of about $18,000 in hospital bills.

And she went for the Gold.

Wednesday, March 26, 2014

...aber Limburg, Bishop?

Pope Francis has accepted the resignation of Germany's Bishop of Limburg, the notorious 'bling bishop' who squandered millions in church funds on an extravagant residence.
Limburg Bishop Franz-Peter Tebartz-van Elst and the high life;
... it was the details about the bishop's new residence in Limburg that got him into hot water. Instead of the initial 5.5 million euros, the price tag was rumored to be around 10 million. Several German media began to investigate and came to the conclusion that, in fact, the cost must be even higher than that.
Mass-circulation tabloid Bild revealed the pricelist of a number of special requests by the bishop: 15,000 euros for a freestanding bathtub, 100,000 for a chandelier advent wreath, 450,000 for art objects, 800,000 for a garden and 2.3 million for an atrium. , Tebartz-van Elst had only asked for a number of those things late in the construction process so that floors and ceilings that had already been finished had to be torn up again. By now, the cost was estimated to be around 31 million euros, though even this doesn't seem to be the final bill quite yet.
The final bill may not be paid in this world.

Tuesday, March 25, 2014

Gone wobbly on Chile

Michelle Bachelet is off to something less than a bang up start;
The new administration of President Michelle Bachelet was hit by a fresh wave of forced resignations Tuesday as Interior Minister Rodrigo Peñailillo requested four provincial governors to stand down for a variety of past controversies just a week after they were appointed.
Accusations of irregular financial statements, unfulfilled promises and misappropriation of funds prompted the resignations....
All four of the appointed provincial governors stood down after scandals resurfaced relating to positions held over the last few years. But perhaps none was as damning as that involving [Claudia] Placencio, a member of the Party for Democracy (PPD), sociologist and former employee of the Civil Registry.
A report published by La Tercera on Saturday found that, upon assuming her position as governor last week, Placencio was listed in the lowest income bracket in the country — entitling her to a number of social welfare benefits. In fact, the governor’s social welfare listing was so low that she was officially classified in the bottom 1 percent of incomes, which placed her among people who were not only homeless, but illiterate and seriously disabled as well. 
This seems to be code--The Santiago Times is a left-wing newspaper--for welfare fraud.

Let's get physical...over time

The bravest CEO in America might be restaurateur Andy Puzder, who braves the wrath of Barack (by taking him to business school);
President Obama on March 13 signed an order directing the Labor Department to expand the class of employees entitled to overtime pay. Currently, if a salaried employee makes more than $24,000 a year and is part of management—if he manages the business, directs the work of other employees, and has the authority to hire and fire—that employee is exempt from overtime coverage. The president wants to raise this salary threshold, perhaps as high as $50,000, demoting entry-level managers to glorified crew members by replacing their incentive to get results with an incentive to log more hours.
Pretty clearly, Mr. Puzder thinks the POTUS has no clue what goes on in small businesses;
Mr. Obama claimed that the individuals covered by the Labor Department change in overtime coverage would include employees who "mostly [do] physical work like stocking shelves." This assertion is, at best, misleading. 
Managers in small businesses--Puzder states that on average one of his restaurants grosses only $1.3 million per year--not only stock shelves, but sweep the floors, empty garbage bins, wipe tables, and help out with whatever physical tasks need doing. We speak from experience.

So, why? Puzder explains;
Workers who aspire to climb the management ladder strive for the opportunity to move from hourly-wage, crew-level positions to salaried management positions with performance-based incentives. What they lose in overtime pay they gain in the stature and sense of accomplishment that comes from being a salaried manager. This is hardly oppressive. To the contrary, it can be very lucrative for those willing to invest the time and energy, which explains why so many crew employees aspire to be managers. 
They're so ambitious, they even.... So, by their own judgment they'd rather have opportunity than time and a half. As Puzder again makes it plain as day (unless you're a guy who grew up in a banker's family);
Perhaps this misunderstanding is what led Mr. Obama to believe that government should compel employers to pay managers hourly overtime. Unfortunately, the move would hurt the very managers he intends to help by turning them into hourly employees, depriving them of the benefits that come from moving into management. Overtime pay has to come from somewhere, most likely from reduced hours, reduced salaries or reduced bonuses. It's easy to attack businesses when they employ these cost-cutting measures. But, unlike government, businesses must generate profits to grow.
Mr. Obama did say that in pursuing the rule change the administration was "going to do this the right way" and would "consult with both workers and businesses." Maybe he should begin the process by asking managers who make below the new threshold whether they would prefer to keep their current salaries and incentive compensation or, in exchange for this overtime "opportunity," go back to being hourly employees without bonus potential or equity incentives. Their answer might surprise him.

Monday, March 24, 2014

Unintended acceleration to $1.2 billion

Walter Olson notes the speed with which the U.S. Justice Department moves when it wishes to extort money from major corporations;
The acceleration claims themselves had turned out to be almost entirely bogus, and were refuted in a report from the federal government’s own expert agency, NHTSA. Instead, the prosecution relied on a single count of wire fraud: Toyota had supposedly given regulators, Congress and the public an erroneously positive view of its safety efforts. It should therefore have to “forfeit” a huge sum supposedly related to the volume of business it did over a relevant period.
Toyota's cars work just fine...that'll be $1.2 billion for our trouble confirming what its customers already know, thank you very much.

[Bold in above by HSIB]

Poor losers

Former Obama diplomat Michael McFaul sounds like he wishes there had been a McCain-Palin administration;
The decision by President Vladimir V. Putin of Russia to annex Crimea ended the post-Cold War era in Europe. Since the late Gorbachev-Reagan years, the era was defined by zigzags of cooperation and disputes between Russia and the West, but always with an underlying sense that Russia was gradually joining the international order. No more.
Things were hunky dory;
I witnessed President Medvedev cooperating with President Obama on issues of mutual benefit — a new Start treaty, new sanctions against Iran, new supply routes through Russia to our soldiers in Afghanistan and Russian membership in the World Trade Organization. These results of the “reset” advanced several American vital national interests. The American post-Cold War policy of engagement and integration, practiced by Democratic and Republican administrations alike, appeared to be working again.
But, then;
When Mr. Putin became president again in 2012, this momentum slowed, and then stopped. 
When you-know-who was POTUS.
Mr. Putin was especially angry at the young, educated and wealthy protesters in Moscow who did not appreciate that he (in his view) had made them rich. So he pivoted backward, instituting restrictions on independent behavior reminiscent of Soviet days. He attacked independent media, arrested demonstrators and demanded that the wealthy bring their riches home.
In addition to more autocracy, Mr. Putin needed an enemy — the United States — to strengthen his legitimacy. His propagandists rolled out clips on American imperialism, immoral practices and alleged plans to overthrow the Putin government. As the ambassador in Moscow, I was often featured in the leading role in these works of fiction. 
While Mr. McFaul's boss was whispering in Putin's ear that things would get better for Russia after his re-election. Looks like Putin believed him.

Sunday, March 23, 2014

Spies, like us

A new book, by Ben Macintyre--A Spy Among Friends--on the curious case of Kim Philby, is reviewed in the Brit press;
[Kim] Philby...betrayed both his friends and his country. Indeed, he betrayed, or spied on, just about everyone of any importance in his life, including his father and his wife. But perhaps his greatest personal betrayal was that of his closest friend Nicholas Elliott.
....Almost everyone who met Philby was won over by his charm. One of the few who held out was the historian, Hugh Trevor-Roper, who recalled, ‘There was something mysterious about him. He never engaged you in serious conversation - it was always irony.’
Which we juxtaposed with the appearance of a new video about someone who also never engages in a serious conversation with cameras rolling (Anita Hill), and has managed to charm most of the world's journalists. Though in this AP article by Jocelyn Noveck about that video, the irony is unintended;
The soft-spoken Hill, who still speaks in the same calm, precise tone many remember from 1991, has for two decades been living a quiet academic life, occasionally venturing out to speak about sexual harassment but often declining interviews.
Which is because, while Ms Hill is not the sharpest knife in the drawer of Convenience Feminism, she knows that interviews are dangerous. Though her testimony in the Clarence Thomas confirmation hearing is years beyond the statute of limitations on perjury.

Someone who isn't beguiled by Anita might ask some timeline questions that can't be answered truthfully without giving up the fact that Clarence Thomas was telling the truth. I.e. the tale spun by Anita, and her witless friend Susan Hoerchner--Yale Law grad and unemployment compensation judge--was false. Especially since, while Ms. Hill was working for Thomas, Hoerchner was long gone from Washington DC, living in California.  Any conversation between Hill and Hoerchner about sexual harrassment would have been regarding someone other than Clarence Thomas.

Betrayal is only possible when people who should know the truth are willing to look the other way. For political and/or personal reasons.

Saturday, March 22, 2014

Air America Anarchy

It's back to the drawing (up regulations) board for the FAA--that, or Appeals Court;
In 2011 the Federal Aviation Administration slapped him [ Raphael Pirker] with an unprecedented $10,000 fine after he used a drone to record a promotional video of the University of Virginia campus. The FAA charged that he had operated without a license and flown recklessly close to buildings, cars in a tunnel and pedestrians.
In his defense, Mr. Pirker noted that his drone—a five-pound Styrofoam model airplane—caused no injury or damage. More significantly, he argued that the U.S. government was acting lawlessly, prohibiting commercial drone use based only on model-airplane guidelines from 1981 that were explicitly "voluntary" and never carried the force of law.
Two weeks ago, Patrick Geraghty, an administrative law judge for the National Transportation Safety Board, emphatically agreed. "There was no enforceable FAA rule" concerning Mr. Pirker's aircraft, he wrote, and the government's insistence amounted to a "risible argument" that the FAA has authority over anything that moves through the air, including even "a paper aircraft, or a toy balsa wood glider." The judge threw out the fine and, with it, the federal ban on commercial drones.
Hell hath no fury like a federal agency treated with scorn, so we expect a counterattack soon.

God save the Queen

Thanks to her ability to appoint the members of Canada's upper house (Senate), rather than their being elected by Canada's populist electorate, the country was spared the financial crisis that hit the USA in 2008-09. And, that's been traditional in Canada for almost two centuries now, says Charles Calomiris in an informative, short audio interview with Romesh Vaitilingam, from

Well worth the 23 minutes it takes to listen, if you want to know why the Canadian banking system provides more credit to its citizens, without all the crises Americans have had to weather, right next door. But, Housing Cause Denialists will want to hide their ears.

Friday, March 21, 2014

Paella Westerns

Welcome to hard times, in the former Spanish movie center of Almeria;
In the tiny village of Tabernas, the only real settlement for dozens of kilometres, elderly residents trade tales of their glory days in the golden age of westerns.
"This was considered the Spanish Hollywood," said Jesus Laguna, a former stuntman who still wears a cowboy hat. "All types of actors came through here from the real Hollywood - American Oscar winners, they were all here. But not anymore."
....Recently a Spanish photographer, Alvaro Deprit, spent a month living in this desert, documenting the lives of those left behind when the film industry up and left.
"It's a melancholy feeling," Deprit said. "Because their world has finished. It was the golden age of western films, and now it's an imitation of what it once was."
Then there's the sincerest form of flattery;

There's also a local actor, Jose Novo, who looks nearly identical to the late Henry Fonda. Novo says his mother was friendly with the American actor, and gave birth exactly 9 months after Fonda was last here in 1968, shooting a film.
It was aptly titled "Once Upon a Time in the West."

You can fight city hall

If you're a Castroite thug ruling Venezuela, that is;
Venezuelan President Nicolás Maduro has entrusted Minister of the Interior and Justice Miguel Rodríguez Torres with the task of taking over local police in San Diego municipality in central Carabobo state.
The decision was announced one day after the Constitutional Court, Supreme Tribunal of Justice of Venezuela sentenced San Diego Mayor Enzo Scarano to prison for ten and a half months, and ordered his removal from office.
"For any mayor messing with the Government, the law will be there. Wherever the Supreme Tribunal of Justice (TSJ) finds contempt, and any right-wing fascist mayor is imprisoned, an election will be held. Did you not want an election? There you go!" said the president in a live TV broadcast.
'There you go!' might be words Maduro lives to regret.

El who pays the driver...

...calls the traffic violation, in Madrid;
The city of Madrid has stopped looking the other way when cars carrying high-ranking officials violate traffic regulations in plain view. Instead, it has notably increased the number of fines it is handing out to drivers caught speeding, double parking, using bus lanes or driving in areas restricted for the use of local residents.
In September the state agency that runs the official vehicle service, Parque Móvil del Estado, received 30 fines in just one week.
Chauffeurs are complaining that they are forced to pay the fines out of their own pockets and that their bosses often pressure them into ignoring the rules of the road.
Now, more than 200 of the agency’s 700 drivers have signed a document protesting the situation.
“Often the user of the official vehicle urges [the driver] to violate one of those rules to gain an advantage in terms of speed, comfort or out of the simple desire to do so,” they say.
Chauffeurs admit that they tend to accept this abuse of power. “The money we earn largely depends on whether we accept the requests, official or not, from our vehicle users, who thus become our bosses.”
Sorta like the way banking systems get developed.

¡Woe, [Air] Canadá!

The least flamboyant country of the Western World, shall not be first, in the hearts of Venezuelans, if Nicolas Maduro has any say in the matter;
The Venezuelan government has declared it will sever all commercial ties with Air Canada, after the airline suspended operations in the country earlier this week.
Describing Air Canada's decision as “unilateral”, Venezuela's air and sea transport minister Hebert Garcia accused the airline of flouting international standards on Tuesday.
“That relationship with Air Canada is over until the president decides otherwise,” Garcia stated.
....Last week, President Nicolas Maduro warned he would take “severe measures” against airlines that reduce services.
Capitalists, it's your revolutionary duty to put your employees at risk! That, and wait patiently for payment for your service; 
Air Canada isn't the only international company to curb operations in Venezuela.
Airlines including Lufthansa, Iberia, Air Europe, Air France, American Airlines and others have reduced flights this year. According to a recent report from daily newspaper Ultimas Noticias, 11 of 26 airlines in Venezuela have at least reduced services, with some using smaller planes.
However, most airlines have cited difficulty exchanging currency through official channels as the main reason for the cutbacks. Under Venezuela's currency control regime, foreign currency can only legally be exchanged for the bolivar through a governmental institution. However, both Venezuelan and international companies have long criticised the system, complaining of transaction delays.
Aéreo línea non grata. 

What this company needs...

Probably not a good, stiff minimum wage hike (aka, the Sawant Solution), but a different business plan;
Leaders of Citi Bike are moving quickly to raise tens of millions of dollars to rescue the popular bike-share program as it loses money, according to people familiar with the matter.
Citi Bike's bright blue bicycles have become a seemingly indispensable part of some city neighborhoods, but its managers don't believe it can survive if it doesn't become more appealing to tourists and expand to new neighborhoods, the people familiar with the matter said.
The program's leaders have approached officials in Mayor Bill de Blasio's administration about raising Citi Bike's rates, the people said.
We, of course, are all in favor of businesses being able to set their own prices--and see if, having built it, the customers will come--but it seems unlikely that higher prices in the face of already weak demand will increase revenues.

One issue is that Citi Bike has proved more popular than expected with annual users who generate comparatively little revenue. Some 99,000 people pay $95 a year plus tax to be able to use the bikes for 45 minutes at a time.
The potential for far greater revenue, however, is with short-term users. Many of those were expected to be tourists, and they haven't used the bikes nearly as much as officials had anticipated, people familiar with the matter said.
Tourists are there to have reasonable prices....

Thursday, March 20, 2014

Como los viejos tiempos

Our Sal, he was a good ol' comrade;
Chilean President Michelle Bachelet on March 11 received Cuba’s First Vice President Miguel Díaz-Canel, who led the country’s delegation to the inaugural ceremony during which Bachelet assumed the presidency.
During the positive encounter, Díaz-Canel conveyed greetings from President Raúl Castro and expressed Cuba’s willingness to renew and expand relations with Chile, not only on the diplomatic level, but in the areas of economy, trade and cooperation.

....Díaz-Canel reported that during his short visit to Chile, he additionally met with representatives of several organizations promoting solidarity with Cuba and freedom for the Cuban Five. He expressed the country’s gratitude for these efforts and his desire to strengthen ties with these groups.
They're supporters of Cuban intelligence agents who were convicted of espionage and conspiracy to commit murder against American citizens in Florida.

During his stay, Díaz-Canel paid his respects to deceased President Salvador Allende and long-time Communist Party leader Gladys Marín at Santiago de Chile’s main cemetery.
"Two great friends of Cuba, two unforgettable personalities … We cannot overlook this tribute which enriches the strong ties between our peoples," Díaz Canel concluded. 
We'll bet Senora Bachelet would like to forget the way Allende ended his term--voted 81-47 to be impeached, by the Chilean congress in 1973, for acting unconstitutionally.

As old as the hills

Not the 35,000 years old Ramtha, but the desire of humans to evade taxes--and provide a useful product to the public (of Romania, this time);
A Romanian couple accused in a plot to dodge $73 million in taxes have been arrested after joining followers of a fringe religious movement in Yelm.
Radu Nemes and his wife Diana are accused of conspiring with a high-ranking Romanian tax official to dodge millions in fuel taxes. Indicted in their native country, the pair were  arrested in Washington earlier this week and currently face extradition proceedings.
According to court papers, the Nemes wound up in Yelm, where they’d joined Ramtha’s School of Enlightenment, a religious movement founded by J.Z. Knight. Knight claims to channel a 35,000-year-old warrior spirit from a mythical continent; she established the Yelm “school” in 1988.
What was the nefarious couple doing?
Radu Nemes, 39, is alleged to have worked with others to illegally import and sell nearly 1 million tons of diesel fuel, using a series of shell companies. Investigators contend Nemes dodged $53 million Euros in taxes (approximately $73.3 million) by importing the fuel for use in manufacturing, then selling it directly to consumers. 
So those consumers could heat their homes. Cutting out the middleman; their government.

Not playing with a full deck

The apologists at Venezuelanalysis, are aghast that anyone would suspect the (almost dead) hand of Fidel Castro is dealing the ration cards;
He [President Maduro] went on to describe the Food Card, or Ensured Supply Card. The free, non-mandatory bank card will give the user certain benefits, and is primarily meant to combat contraband and price speculation.
According to Maduro, the card represents a marriage between the Mision Alimentación and the Fair Price Law, enabled late last year amid rampant speculation when certain chain stores were found to have marked prices up as much as 1,200%. The card is expected to bring greater efficiency to both initiatives.
Upon mention of the card, members of the opposition were up in arms via Twitter, calling it a “Cuban rationing card” and implying that the biometrics fingerprint census required to receive the card is an imposition on consumer freedom and privacy.
Relax hombres, trust us, it's just like a loyalty card. Only a little more loyalty needed to eat.
Details as to what the requirements will be to get a card, and exactly how the system will work are to be released this week.  
Details, details.

Take George Clooney...Please!

Germany's taxpayers got him whether they liked him or not;

The German Federal Film Fund contributed almost $12 million to the making of The Monuments Men. To promote a shameful aspect of a war they lost.

Wednesday, March 19, 2014

What to do? What to do?

Certainly plausible, uncertainty;
In our model, due to fixed costs of ordering associated with transportation, firms hold an inventory of intermediate inputs, but the costs are larger for foreign inputs. We show that in response to a large uncertainty shock in business conditions, whether to productivity or the demand for final products, firms optimally adjust their inventory policy by cutting their orders of foreign intermediates more strongly than orders for domestic intermediates.
In the aggregate, this differential response leads to a bigger contraction and, subsequently, a stronger recovery in international trade flows than in domestic trade. Thus, international trade exhibits more volatility than domestic economic activity.
  • In a nutshell, uncertainty shocks magnify the response of international trade, given the differential cost structure.
Which is from Dennis Novy and Alan Taylor.

¡Oh, Canadá!

In the war with the counterrevolutionaries, Bolivarians are ever vigilant. Can't sneak a new ambassador by these guys;
 Ben Rowswell replaced Paul Gibbard as Canadian ambassador to Venezuela, as mandated by Foreign Affairs Minister John Baird. But a quick look into the appointee’s background brings special significance to his promotion, especially as opposition protests escalate in Venezuela.
Evil day!
In 2011, Rowswell gave a fascinating TEDx talk at Hayward University in California that outlined his views about the power of social media to shape democracy. He focused on post-Murbarak Egypt, before Mohammed Morsi’s election.    
He detailed how notions of race, ethnicity and class may be pushed aside when organizing through social media platforms. He theorized that the internet allows for "opensource democracy," allowing individuals to exchange their ideas as equals.    
But let’s look at that idea in the context of Venezuela, where the middle and upper classes are more likely to have regular access to the internet. Twitter and Facebook have been the choice tools of the opposition in recent months, both to organize protests and to call upon international support. 
The Bolivarian Revolution itself was born 15 years ago upon massive social movements and since has experimented with many revolutionary forms of democratic participation. But theirs is a different concept of democracy than what Rowswell and other Western powers have in mind.  
True, too true. Maduro and his Castroite allies have a Rousseauian perspective, not a liberal one. The idea of liberal democracy with protections for minorities can't be allowed to co-exist with Maduroismo. That would be the death of socialism.

[Bold by HSIB in the above]