This seems to be showing up everywhere and, if you haven’t already seen it, it’s well worth ten minutes of your time if you’re in need of a good chuckle.
Quite a contrast with that last item…
REMINDER: All investment, economics, and finance related material now appears at the new IaconoResearch.com. For the time being at least, this has become a personal blog covering a variety of mostly unrelated topics.
On March 18, 2010,
in Banks,
by Tim
On March 18, 2010,
in Currencies, WTF?,
by Tim
The Guardian reports that there’s more than just career risk when you fail at monetary reform in North Korea – you could lose your life, as Pak Nam-gi apparently just did.
North Korea has executed a senior official blamed for currency reforms that damaged the already ailing economy and potentially affected the succession, a news agency in South Korea reported today.
Pak Nam-gi was killed by firing squad last week, said Yonhap, citing multiple sources. The Workers party chief for planning and the economy had not been seen in public since January.
The 77-year-old was put to death as “a son of a bourgeois conspiring to infiltrate the ranks of revolutionaries to destroy the national economy”, the agency said.
But it reported that many North Koreans did not believe the explanation, citing one source who said: “The mood is the leadership has made Pak Nam-gi a scapegoat.”
If you’re not familiar with the story, you might be interested to know that North Korea introduced a new local currency a while back that could be exchanged for the old currency at 1-to-100 in an attempt to control inflation and drive out foreign currencies that were thriving on a very active black market.
Like most such attempts, this move did not produce the desired results – prices soared, hoarding increased, people starved – and, in the process, it wiped out the meager savings of many citizens while benefiting state workers who were paid in the new currency.
On March 18, 2010,
in Economy,
by Tim
Well, it looks like whatever it was that was going on last month within the shelter category of the Labor Department’s consumer price data is now back to normal in this month’s report. As shown below, after considering the respective component weightings, the total seems to make sense in February (in green) versus the oddity that was January (in red).
Recall that, about a month ago in A math problem at the Labor Department? this question of addition was raised after the -0.5 percent decline in shelter costs caused the widely publicized first negative reading on month-to-month core inflation in many, many years.
What looks to be an obvious error was attributed to seasonal adjustment. That is, after the weightings (in blue) are adjusted for seasonal factors they somehow allow the lodging away from home component to greatly impact the shelter total.
All else being equal, you’d have to increase the lodging away from home weighting by a factor of ten to get the overall shelter total as reported in January. Do that many more people travel in January than during other months of the year?
On March 18, 2010,
in Banks,
by Tim
Perhaps there is some context, somewhere, that makes yesterday’s words from Fed chief Ben Bernanke’s prepared remarks before the House Financial Services committee on the subject of the Fed’s role in bank supervision seem less filled with hubris than they first appear. But, if there is, I couldn’t find them.
The Federal Reserve is uniquely suited to supervise large, complex financial organizations and to address both safety and soundness risks and risks to the stability of the financial system as a whole.
…
The insights provided by our role in supervising a range of banks, including community banks, significantly increases our effectiveness in making monetary policy and fostering financial stability.
Maybe he’s confusing risk assessment and fostering stability with bailing out the big banks, something that the Fed chief has proven himself quite proficient at over the last few years.
If a few substitutions are made (in bold), this seems to make a whole lot more sense.
The Federal Reserve is uniquely suited to
supervisebailout large, complex financial organizations and to addressboth safety and soundness risks and risks to the stability of the financial system as a wholefuture bailouts.
…
The insights provided by ourrole in supervisingbailing out a range of banks, not including community banks, significantly increases our effectiveness in making monetary policy andfostering financial stabilityguaranteeing that there will be more bailouts.
Yes, that’s much better.
On March 18, 2010,
in Economy,
by Tim
The Labor Department reported zero inflation for the month of February as rising prices for medical care and education were offset by sharply lower costs for energy and apparel. This comes after a 0.2 percent increase in January and marks the eleventh straight month that the price index did not drop after a series of steep declines beginning in late-2008.
On a year-over-year basis, the overall consumer price index was up 2.2 percent following an annual gain of 2.7 percent the month before, however, we may not have seen the last of rising annual inflation as recently higher gasoline prices are not reflected in the most recent data.
On March 18, 2010,
in Uncategorized,
by Tim
TOP STORIES
Sen. Dodd’s regulatory rewrite – Washington Post
Concerns About Greece Return to the Markets – AP
Great Britain Stars in Its Own Greek Tragedy – Spiegel Online
Jim Cramer’s TheStreet Is Being Investigated By The SEC – Zero Hedge
More homeowners are opting for ’strategic defaults’ – LA Times
So You Want to Walk Away from the Mortgage… – WSJ
Marc Faber: We Have a New Gold Standard – CNBC
Elizabeth Warren’s war – Fortune
MARKETS/INVESTING
Oil futures edge lower as dollar gains – MarketWatch
Gold steadies as haven buying offsets weak euro – Reuters
Rally on: Dow hits highest level since October 2008 – LA Times
Oil Has $88 a Barrel as Next ‘Port of Call’: Technical Analysis – Bloomberg
Rick Rule: Systemic Shock Will Kill Sucker Rally – Gold Report
Letters that foresaw 2008 crash are skeptical – MarketWatch
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