links for 2008-03-13

• Dead heats and democracy - Crooked Timber
• US will avoid deep recession, Fed says - FT
• Cooked Books - Tuler Cowen
• Public Choice - Public Finance & Economics Journals
• Macroeconomics! - Economic Investigations
• Lags in Monetary Policy with the TSFL - Economics Unbound
• Collapse of Salmon Stocks Endangers Pacific Fishery - New York Times
• Are We Closer to War? - Dan Froomkin
• Bill to Propose Expanded U.S. Backing of Home Loans - New York Times
• The End of Cosmology? - Scientific American
• The Recession Felt Around the World - Nouriel Roubini

Comments

[Subsidized Rates Demanded]

“This is not a bailout,” Mr. Taylor said. “This is a market-driven solution.”

Okay, the disconnect with this statement is that a true market based solution would be to allow interest rates to rise high enough to cover the risk of default (current default rate 7.86%). Think credit card type interest rates. This is politically unacceptable to US borrowers, who are accustomed to being coddled with ever larger subsidies. Yet, foreign savers are not going to buy mortgage packages with interest rates too low to cover defaults. Market based solutions are inconsistent with politically demanded mortgage rates, so a genuine market based solution will not happen.

There are not enough domestic savers left to intimidate into lending at low rates with the threat of confiscation. Creating sufficient new money to monetize low rate mortgages would allow us to experience Zimbabwe's economy first hand. Guess what this leaves?

[anne]

http://www.juancole.com/2008/03/15-us-troops-killed-since-sunday-mccain.html

March 13, 2008

Iraq Refugee Crisis Grows
By Juan Cole

The Iraqi refugee crisis, affecting over 4 million persons, is getting worse. * The number of refugees is not growing, but neither is it shrinking, and moreover the big problem is that the refugees are running out of money and resources.

* http://www.theage.com.au/news/world/iraq-refugee-crisis-grows/2008/03/12/1205126007288.html

[anne]

http://www.juancole.com/2008/03/15-us-troops-killed-since-sunday-mccain.html

March 13, 2008

15 US Troops Killed Since Sunday in Iraq
By Juan Cole

Guerrillas fired rockets at a US base south of Baghdad on Wednesday, killing 3 US soldiers and wounding 2. An Iraqi civilian was also wounded.

A US soldier was killed and another wounded at Diwaniya on Tuesday by a roadside bomb (that is Shiite territory). So the death toll for Monday through Wednesday was fifteen US troops killed.

If you're reading these words, you are better informed about US casualties in Iraq than most Americans, for whom it has become a forgotten war. If it is not on television, it does not exist.

[oops]

re: are we closer to war

here is the link to the article on admiral fallon. a good one.

http://www.esquire.com/features/fox-fallon?click=pp

[anne]

http://krugman.blogs.nytimes.com/2008/03/13/core-competence/

March 13, 2008

Core Competence
By Paul Krugman

Carlyle Group should have stuck to what it knows. It’s great at the merchant of death thing; at investment banking, not so much: *

"Carlyle Capital, the bond fund affiliated with private equity firm The Carlyle Group, is on the verge of collapse after failing to agree a new financing deal with lenders.

"The fund said late Wednesday that it expects lenders will soon take possession of 'substantially all' its remaining assets after it was unable to meet surging margin calls on its portfolio of residential-mortgage-backed securities."

* http://www.marketwatch.com/news/story/carlyle-capital-verge-collapse-talks/story.aspx?guid=%7B16193889%2D7248%2D4C9E%2DAE91%2D7D6D61C6EB80%7D&dist=TNMostRead

[anne]

http://www.guardian.co.uk/business/2003/mar/23/iraq.theobserver

March 23, 2003

'Ex-Presidents Club' Gets Fat on Conflict

High-flying venture capital firm Carlyle Group cashes in when the tanks roll....