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Morning Reading
Good morning. Let's start the day this way:
The boy in the balloon was a hoax? (NPR)
When the father, Richard Heene, was asked about that Thursday, he seemed uncomfortable and said he was appalled by the question. After Falcon and his father were again asked about the comment during national TV interviews Friday, Falcon got sick.
The family's history in the spotlight is fueling speculation that the incident was a hoax. They were on the ABC reality show Wife Swap last spring, and they have 55 videos posted on YouTube. Authorities say they're continuing to investigate the case.
Decide for yourself. Oh, and make sure you watch the part about commuting to work in a low altitude vehicle:
Eliot Spitzer wants to destroy the US Chamber of Commerce (Slate):
The elected comptrollers and treasurers who agree--as a vast majority will--that the Chamber of Commerce has a distorted view of both economic and political policy should demand that each company in which they own stock drop its membership in the chamber. If the CEO doesn't agree, the public pension funds should pressure the board to drop the chamber membership. If one activist state comptroller begins to build this coalition, the other state pension funds will follow.
Obama isn't helping (Naomi Klein/Guardian)
After nine months in office, Obama has a clear track record as a global player. Again and again, US negotiators have chosen not to strengthen international laws and protocols but to weaken them, often leading other rich countries in a race to the bottom.
How else Goldman might spend $20 billion (Bloomberg)
Making sense of the foreclosure crisis (PBS NewsHour)
The latest Whiteboard video with Paddy Hirsch (Marketplace) Excellent way to explain derivatives. Gobble gobble:
Derivatives from Marketplace on Vimeo.
It seems to me that 99% of the derivative market is just gambling. If you want to protect your costs, hedge an actual cost to YOUR business, derivatives work well. Both sides will balance and both sides will want to reduce their costs but neither side expects to make a killing at the other sides’ expense. When there are lots of gamblers in the mix there are always people who will try to manipulate, corner or bend the market to increase their payoff
I have a question about derivatives. How much of the market is tied-up in derivatives and how much capitlization are they keeping out of the market?
That is, does anyone have any idea how much more money would be going to capitalize businesses if it were not being siphoned off into derivatives? Obviously there's a net effect since derivatives sometimes make people more willing to invest, but you have to wonder if that's a net positive or negative.
It seems to me like the effect of a lot of investment in derivatives is just a giant skimming machine that pulls capital out of the economy without producing anything. Kind of like what Enron did to California.
