Friday, May 21, 2010

Friday Links

Some of these I sent out on Twitter already:

 - Dubious Politician of the week: "Blumenthal's Words on Vietnam Service Differ from History."  Then today, this follow up:  "Another Case of Blumenthal Misstating Service."

 - Not as easy at it seems article of the week: "Padded Pensions Add to New York Fiscal Woes."

I say "not as easy as it seems" because I think the initial reaction is to say "that's f'n crazy."  And yet, I sympathize with the policeman who they talk a lot about in the article, who defended the situation:

"Mr. Tassone said the only reason he joined the police force was the promise of a full pension after just 20 years, and it would have been wrong for the state or city to go back on the promise after using it to recruit him."

Yes - they did promise it to him, and it's hard to just tear up that obligation...   I don't think it's reasonable to expect that Mr. Tassone could have reasonably assessed the likelihood of the City of Yonkers running out of money in the future when he took this job.  HOWEVER, the article also talks a lot about the manipulations used to increase pension payments ("Hugo Tassone, retired at 44 with a base pay of about $74,000 a year. His pension is now $101,333 a year,") which can certainly be cracked down on.  

 - early 90's crank calling comedy group reference of the week: "Greece & The Jerky Boys." Yeah - that's my own link - it didn't get enough love! RESPECT!

-least repentant accounting of the market's function during the Flash Crash:  Taste_Arbitrage @ Stone Street Advisors.

"I keep hearing how terrible this event was, and if nothing is changed it could happen again. Oh no, what ever shall we do?! Here’s a thought, if you think the price of a security is too low and you think it’s insane that it doesn’t seem to have a bid, you should just go ahead and bid. That’s it. If the price is too low, pay it and make money."

- David Merkel : "Two Experiments."

"The Fed always delays trouble in the modern era.  Slow to tighten, quick to loosen.  No wonder that we built up a mountain of debt, because the Fed would always ride to the rescue of crises, but never let the pain settle in that would liquidate poor investments.

We need fewer banks, fewer homebuilders, and fewer auto companies.  But guess what we bailed out?  We bailed out the very things that were the least productive in our economy, and taxed those more productive to do so.  Monstrously dumb.

So when the market corrects because there has been no effective change in economic policy that would allow for elimination of bad debts, and shrinkage of bloated industries, we should not be surprised.  Government stimulus can only do so much.  The markets incorporate the stimulus, and they move on.  Those stimulated gain, and taxpayers/moneyholders lose, but the markets move on."

 - Gold conspiracy theorists won't like this one:  "Seriously, GLD is Not a Scam, but PHYS Might Be."  I think the author has a factual error in her post which doesn't really alter the point:  she claims PHYS cannot issue additional shares  - I believe that is false, and a reading of the PHYS prospectus backs up my thought.



Benny said...

Gotta love the first article about the Chinese orgy guy. He was put in prison for crowd licentiousness. How cool is that?!

Despite that, pretty messed up that he's been pit away for having a bit of harmless fun in his own house

Transor Z said...

I fully expect a double-standard from the pundits who argued "sanctity of contracts" to defend bonuses for financial execs -- but not so much when it comes to public employees' pensions.

You know who else vests after "only" 20 years? Armed services personnel. Let's screw them, too, while we're at it.

If people want to point out the irresponsible Ponzi nature of Social Security and public pension funds, fine, but playing on human jealousies during rough economic times is bullshit.

Pat said...

Part of the problem with pensions in NYS is that after 10 years of service, state union employees no longer contribute 3% of their salary to the pension fund. (This policy went into effect maybe 5-6 years ago.) So if I'm lucky enough to still be employed by NYS when I hit 55, I'll have only contributed to my pension for 10 of my 34 years on the job. That's ridiculous.

Angela said...

Couldn't agree with Transor Z more. The structure of social security and public pension funds entails an element of risk. However, many state employees forgo lucrative private sector opportunities in order to do something for the public good.

Kid Dynamite said...

sure Angela, but the real problem is that the municipalities cannot afford to pay the benefits that they promised! the return assumptions they use are WAY too high, and need to be adjusted, to lessen this problem in the future.

the NYT already has a follow up article/discussion:

but you'll notice that there's no silver bullet cure here...