A random sampling of the stupid.

Saturday, October 18, 2008

Saying you don't want somebody elected is a political statement

In a grand display proving that racism is still alive and well, at least in some parts of the US, ABC news reports that a man has hung an effigy of Barack Obama in his lawn from a noose, in the shape of a ghost. Paraphrasing the report, "In an off-camera interview, he said that he do it for political purposes, but because he doesn't want an African American to become president".

I don't want charity, but please give me a hundred thousand dollars. I'm not sexist, but women are inferior to men. I don't want to say anything controversial, so I'm going to preface a political statement by saying that it's not political.

Honestly, what exactly does constitute a "political purpose"? I'm not going to give a precise definition, but I would say any public comment about a candidate for president is political. I'm not saying that's such a bad thing, there's nothing wrong with criticizing a candidates policies, experience (or lack thereof), or statements. But the statement he was making (assuming you believe the ABC news report) was that black people shouldn't be able to be president. How much more political can you get?

Error rating: 10. "I'm not trying to make a statement, but here's my statement." Honestly. This is of course predicated on accurate reporting by ABC news.


PS They didn't mention the fact that the effigy had a star of david on the top of its head.

Sunday, October 12, 2008

Market manipulation shouldn't be government policy

The weekends over, and that means the latest in the wave of world government clusterfucks rescue plans is being announced. The UK is partially nationalizing the Royal Bank of Scotland and HBOS. I can understand why that might be necessary (too big to fail, systemic risk, yada yada) but the justification given is the dumbest thing I've ever heard:

The Government was forced to take bigger stakes in the banks than it originally intended because of a dramatic slump in banks’ share prices last week. It also increased the amount of money it demanded the banks raise in an attempt to rebuild shattered confidence in the financial system.

That's stupid. Their share price is irrelevant. Look at their damn books, and see how solvent the bank is. Remember when people cared about assets and liabilities? A run on a banks deposits is reason for a bailout; a run on their stock most certainly is not. It gets better:
Mervyn King, the Bank of England Governor, has reportedly told the banks to ask for more than they need, meaning their capital position would be strengthened sufficiently to absorb shocks and a long recession
Take the money now, and because somebody might ask questions later. If we don't give "emergency" loans, disbursed over a period of days, people might actually be able to consider the consequences of our actions. Oy.

Error rating: 7. MARKETS FLUCTUATE


Sunday, October 5, 2008

You'd think our leaders would understand finance

The financial crisis is all everybody seems to be talking about these days, and the buzzword of the month is "bailout". British Prime Minister Gordon Brown is no exception. With regards to his attitude, CNN reports:

Sarkozy said the economic crisis required a global response, but Brown said that no strong bank should be allowed to fail for lack of solvency.
I am speechless. How exactly do you define a bank as "strong" without including solvent? Many individuals (and likely some companies) are technically "insolvent"; all you need is more debt than assets. This doesn't drive you to bankruptcy necessarily, if you have a job to bring in income to service your debts, you may do fine.

But for a bank, solvency is critical. They make money off the spread between interest paid to depositors and paid by borrowers. The only way to re-achieve solvency in any reasonable time is through high-yield (re: high risk) lending. Many S&Ls tried this; it didn't go well. Or you can hope that the loans you wrote off will somehow magically increase again in value. That's likely.

If a bank is insolvent, it should be shut down.

Error rating: 6. Shouldn't be shut down for lack of solvency? Double You Tee EFF?!