Wednesday, October 22, 2008

Ethanol blues

FT notes that the ethanol boom is drying up. This is a subject this blog has visited previously.

Ethanol from corn was always a costly, inefficient idea. Corn as a commodity is terribly skewed in the United States by corn-related (and more recently, ethanol) subsidies. The "corn lobby" has successfully prevented more-efficient, cheaper biofuels from Brazillian sugar cane to be imported, for example (see also this comparison).

Sunday, October 19, 2008

Press freedom in China

McClathy newspapers' Beijing bureau chief Tim Johnson blogs about the state of press freedom in China. In terms of overall policy,

[China's] Foreign Ministry announced that press freedoms instituted this year for foreign reporters during the Olympics were being extended indefinitely.

Of course, Johnson also notes, it remains important for a foreign journalist to prepare to be detained for any reason, by a local village chief, factory owner, local police, etc.

Johnson also links to a BBC collection of foreign journalists' anecdotes from October 17, on the state of press freedom.

Thursday, October 16, 2008

Settlement risk

Financial Times discusses settlement risk in an article noting OTC foreign exchange trading soars.

Although the article is about currency trading, it raises a pet peeve of this blog: All stock trades should be settled instantly, rather than the current T + 3 settlement period.

Doing so reduces one avenue for irresponsible behavior, one window with a large potential for networked (interconnected) risk. Modern trading platforms can certainly support instant settlement. The T+3 settlement does not provide any great advance to the average investor, and short term loans (what the settlement period may be abused to be, in effect) can be had elsewhere.

In other news: right-leaning Investor's Business Daily supports reinstating the uptick rule.

Tuesday, October 14, 2008

US election endorsements

On November 2nd, I have decided to be a radical, in this election.

I am stating for the record that I will not vote for Obama or McCain. Furthermore, in national and state-wide elections, I am voting anti-incumbent, regardless of the challenger's party affilition.

Congress needs to be shaken and stirred, as neither party seems capable of even discussing looming issues: aging population, need for increased immigration, China and India and global resource competition, US energy shortages and requirements, unsustainable entitlement spending, ancient, decayed infrastructure, corrupt and over-complex tax code, ...

Monday, October 13, 2008

Southern France and The Med

My wife and I just concluded a wonderfully long vacation through southern France, and the Med. One part of her family grew up in southern France. Our first stop was the small village in the foothills of the Cevennes where most of the family remains, St. Hippolyte du Fort. Here I am, with a local tower and now-unused railway overpass in the background:

We rented a car, and drove around the countryside quite a bit. After getting used to French driving laws — for the most part, it is easier to navigate in France than on U.S. roads — we started touring Roman and medieval villages and ruins nearby. The first stop was the tiny medieval village of Sauve:

Next, we visited Nimes, with its Roman Maisson Carre and arena:

Then on to Avignon:

And finally cruising to stop for several days in relaxing Nice, with its world-famous boardwalk, Promenade des Anglais (I am facing away from the camera, in the blue t-shirt, lower left corner):

Woe, woe is the banker

Rock star economist Steven Levitt points out an op-ed by Casey Mulligan, noting that there is no reason to panic. As this blog noted, the bankers are hurting more than any other industry.

This is a crisis of finance, so far. It will be Another Great Depression when unemployment reaches massive levels (over 25% by 1933). Not even Dr. Doom is predicting that.

Sunday, October 12, 2008

Quoth Hawk

Quoting Hudson Hawk, a favorite movie of mine:

Minerva: Markets will crash, crash. Financial empires will crumble, crumble.
Hawk: Except yours, yours.