"It is easy to confuse what is with what ought to be, especially when what is has worked out in your favor."
- Tyrion Lannister
"Lannister. Baratheon. Stark. Tyrell. They're all just spokes on a wheel. This one's on top, then that's ones on top and on and on it spins, crushing those on the ground. I'm not going to stop the wheel. I'm going to break the wheel."
- Daenerys Targaryen
"The Lord of Light wants his enemies burned. The Drowned God wants them drowned. Why are all the gods such vicious cunts? Where's the God of Tits and Wine?"
- Tyrion Lannister
"The common people pray for rain, healthy children, and a summer that never ends. It is no matter to them if the high lords play their game of thrones, so long as they are left in peace. They never are."
- Jorah Mormont
"These bad people are what I'm good at. Out talking them. Out thinking them."
- Tyrion Lannister
"What happened? I think fundamentals were trumped by mechanics and, to a lesser extent, by demographics."
- Michael Barone
"If you want to know what God thinks of money, just look at the people he gave it to."
- Dorothy Parker
Saturday, March 23, 2013
Agron, Gannicus, Crixus, and Spartacus. Martin and Malcolm. Crixus and Agron march on Rome. Spartacus and Gannicus lead the former slaves to the mountain.
AV Club review of "Separate Paths" from "Spartacus."
Wednesday, March 20, 2013
Still trying to wrap my head around the Cyprus situation; what makes it so interesting (as in “may you live in interesting times”) is the role of the island as a tax, regulation, and law enforcement haven.
It’s not just about the Russian connection, but that connection is really huge. Here’s another metric: Cyprus is, according to official figures, the largest single foreign direct investor in Russia — this from an economy roughly the same size as metropolitan Scranton PA. What’s that about? The FT explained it a while back:This link occurs through CIS [Commonwealth of Independent States] commodity-based shell companies that deposit transactional balances of their CIS-based legal subsidiaries engaged in oil, mineral, and metals exports, often involving transfer pricing and other tax minimization strategies. The Central Bank of Russia classifies Cyprus as the largest single source of FDI in the Russian Federation, with a total of $41.7 billion in cumulative inbound FDI into Russia’s non-financial sector between 2007 and 2010 (over 2.7x German levels)… Cyprus is also counted among the top FDI investing nations in several Central Asian countries (likely Russian capital reinvested via Cyprus, a process known informally as “round-tripping”).
Stannis! Daario? And Theon on the flaying rack.
Game of Thones' women on the red carpet.
Wow each and everyone one is awesome. Credit Benioff and Weiss. Where are Osha, Shae, Ros, Yara Greyjoy, Lysa Arryn, Gilly, The Queen of Thorns and Quaithe? The actress who played Old Nan passed away.
"Oh my sweet summer child..."
The biggest single conceptual failure of my argument for war is that I gave absurdly little thought to the post-invasion phase. I was aware that the Bush administration was deploying far too few troops to the front for a workable occupation while blatantly lying about the war’s likely costs. I assumed that its real plan was to decapitate the Iraqi leadership, install a more pliant and less brutal military figure in Saddam’s place, and call it democracy.
In other words, I deemed the administration’s rhetoric about democracy to be a pack of lies. Now, I could accept this, because I assumed the successor regime would be less brutal than the psychotically cruel one that was being deposed. The quality of the regime was an important predicate for my support of the war — I would not have supported it had I believed it would make life harder for Iraqis, on the whole — but not the necessary rationale. I assumed these things because at the time Bush appeared — from the 2000 campaign through Florida through his push to cut taxes — to be a dishonest but ruthlessly effective figure. A messy, undermanned occupation would be politically fatal, I reasoned, therefore Bush wouldn’t actually undertake one.
But my view of the postwar was facile. I really focused nearly all my attention to the legitimacy of the war, and almost none to its advisability. Indeed, I essentially mistook one for the other: In my mind, establishing that the United States had a moral right to enforce the truce terms of the Gulf War closed the case.
Now, why didn’t I think very hard about the occupation? I think I was probably influenced by the recent history. And here is where I depart most sharply from most other liberals, especially the younger ones, who have responded to the war by adopting dramatically more anti-interventionist views on foreign policy.Saddam Hussein should have complied with the weapon inspectors. Instead he ended up in a spider hole and then lynched.
Tuesday, March 19, 2013
From Lehman to Cyprus by Floyd Norris
The European decision not to honor deposit insurance in Cyprus, by making all depositors contribute to the cost of a bailout, reminds me of the decision to let Lehman Brothers go under. Moral hazard is being avoided. The question is what that will cost.
In the case of Lehman, the cost turned out to be far greater than anyone expected. Suddenly the crisis was affecting money market funds. We learned to our discomfort just how interrelated the world’s markets were. I doubt anyone involved in making the decision thought about money market funds until they learned one had just blown up, thanks to the Lehman failure.
Andrew Ross Sorkin says not to worry:
There is very little chance that politicians would ever choose to use the model they developed in Cyprus in a country like Italy or Spain, where a run on the banks would have such profound implications. By the way, if you’re wondering why investors left so much money in troubled Cypriot banks, here’s a trivia question: Would you have been better off leaving your money in a bank in the United States or in Cyprus over the last five years?
The answer: You would have been better off in Cyprus, even after the bailout, when your money was “confiscated.” If you had 100,000 euros in a Cypriot bank account over the last five years, where the interest rate has averaged about 5 percent, you would have about 127,600 euros today. Even after the bailout, which would require you to give up 10 percent of your deposit — 12,760 euros — you would be left with 114,840 euros. The American bank? The $100,000 you deposited at Bank of America five years ago is about $105,100, at the going rate of about 1 percent interest a year.Germans wouldn't risk a run in Italy or Spain? Investors might not want to risk it if Cyprus gets messy.
Cyprus Set to Reject Bailout
Cypriot banks were closed Monday for a bank holiday that has been extended through Wednesday.
The governor of the Cypriot central bank, Panicos Demetriades, warned lawmakers on Tuesday that as much as 10 percent of the €65 billion in deposits placed in Cypriot banks would flee the country as soon as banks’ doors open Thursday morning, should Parliament approve the deposit tax.Cyprus Bailout Incites Turmoil as Blame Flies
What happened next sealed the deal, which now appears to be coming apart amid strong protests from ordinary Cypriots. Jörg Asmussen, a German member of the executive board of the European Central Bank, told Michalis Sarris, the Cypriot finance minister, that stopgap financing for Cyprus would be cut off this week if no agreement was reached.
Mr. Asmussen’s message “really did sharpen the thinking of Mr. Anastasiades,” said a European official with knowledge of what happened during the talks but who spoke on condition of anonymity because they were conducted in private.
“The Cypriot president understood clearly he faced the collapse of his banking system and disorderly exit from the euro area,” said the official.
What emerged was a deal that took a bite out of average savers, one that made sense in the wee hours between the dealmakers. In the light of day, as Cypriots tried desperately to pull their savings out of A.T.M.’s, it looked like a threshold that many experts say should never have been crossed.Taxing Savers in Cyprus
Any tax on smaller accounts would set a terrible precedent. Savers in other troubled economies like Italy, Spain and Greece are now justifiably worried that their deposits may someday also be stripped of protection.
European leaders have said that taking money from Cypriot bank deposits is a singular event, but this assurance will ring hollow in light of their poor track record in dealing with the euro crisis. The plan has now given savers in Spain, Italy and other countries incentive to withdraw money from their national banks or move it out of the country if they have offshore accounts.
Imposing a bigger tax on deposits of more than 100,000 euros would not have the same ripple effect on confidence. A large percentage of those deposits belong to Russian businessmen, some of whom have reportedly laundered money through the island’s banks. These sophisticated investors were well aware of the risks they were taking by putting their money in offshore accounts, and Cyprus should not try to protect them at the expense of local depositors.
Cypriot officials created this catastrophe by relying on a lightly regulated banking industry to drive up its growth rate while encouraging foreigners to use the island as a tax haven. European officials also deserve blame for not requiring more capital in euro-zone banks and for not anticipating the consequences of lowering the value of Greek bonds. They should not add to those mistakes with a punitive package that is disastrously counterproductive.
Monday, March 18, 2013
William Saleton sucks. Yglesias had a great column about "Miss America Conservatism."
AV Club revies "Prey" from "The Walking Dead."
The Governor and his loyalists are conservatives with their lizard brains. Authoritarian. Fascist. Dishonest about the Marathon Man chair and pit o' zombies (The War on Terror's dark side, "enhanced interrogation," "Zero Dark Thirty.")
Andrea, Milton, Tyrese and the Prison Gang (Rick, Herschel, Michonne, etc.) are the liberals with their notions of solidarity and "social insurance."
The Cypriot Haircut by Krugman
You can sort of see why they’re doing this: Cyprus is a money haven, especially for the assets of Russian beeznessmen; this means that it has a hugely oversized banking sector (think Iceland) and that a haircut-free bailout would be seen as a bailout, not just of Cyprus, but of Russians of, let’s say, uncertain probity and moral character. (I think it’s interesting thatMohamed El-Erian manages to write about this thing, fairly reasonably, without so much as mentioning the Russian thing.)
The big problem, however, is that it’s not just large foreign deposits that are taking a haircut; the haircut on small domestic deposits is a bit smaller, but still substantial. It’s as if the Europeans are holding up a neon sign, written in Greek and Italian, saying “time to stage a run on your banks!”
As long as you haven’t bought into the Barney-Frank-did-it school of thought, you realize that the global crisis of 2008 was in a fundamental sense made possible by the erosion of effective bank regulation. As Gary Gorton (pdf) has documented, we had a 70-year “quiet period” after the Great Depression in which advanced countries had very few major financial flare-ups; Gorton argues, and most of us agree, that the key to this quietness was a constrained, regulated financial system that also limited the opportunities for excessive non-bank leverage.
But this regulation in turn depended, to an important extent, on limited international capital flows; otherwise regulations made in Washington or elsewhere would have been bypassed via havens like, well, Cyprus. And once capital controls began to be lifted in the 1970s we entered an era of ever-bigger financial crises, starting in Latin America, then moving to Asia, and finally striking the whole world.
So what are we going to do about this? Cyprus, as a euro-zone country, should really be part of a euro-wide safety net buttressed by appropriate regulation; it’s insane to imagine that the euro can be run indefinitely with merely national deposit insurance. But euro-area deposit insurance doesn’t seem to be in the cards — and anyway, there are plenty of other potential Cypruses out there.
All of which raises the question, is the era of free capital movement just a bubble, fated to end one of these years, maybe soon?