He who places his hope on thee, O Virgin all-glorious, will prosper in all he does.

Inscription on Byzantine coin during reign of Romanus III



Saturday, October 30, 2010

The Count Returns

This is Jumpin' at the Woodside by Count Basie, first recorded in 1938. I've played this one, and no trash talkin' is permitted.




If you don't get tired from watching frenzied dancing, look at this version. It features a version of the Jitterbug, known as the Lindy Hop.


Friday, October 29, 2010

I've Found Something Better

I'm a Nelson Eddy and The Student Prince fan, and I was looking for his rendition of the drinking song. I've found something better:





Here's the drinking song with Mario Lanza:





As a bonus, here's Lanza with Gaudeamus Igitur:


Al Jolson On Economic Challenges



This was a popular Depression-era song.

Saturday, October 16, 2010

More From The Reconquista

This one is Hoy Comamos Y Bebamos by Juan del Encina. Yes, the title is spelled correctly for the period.



From The Reconquista

A worthy performance of Rodrigo Martinez.


Charpentier, Again

A worthwhile performance of Charpentier's Prelude from Te Deum. I'd pay real money for this concert.



Thursday, October 07, 2010

TARP Debate: Soros Vs. Summers

I've mentioned previously that I thought that the TARP program was necessary to avoid a catastrophic meltdown of the American banking system. Rather than being a bailout solely for the financial system, as is commonly report, it was in fact a bailout for everyone. Everyone benefits when systemic risk is mitigated.

We can argue about the proper role of government, and whether the State should be offering bailouts to anyone. Yes, that's a longer term issue. The imbalances created by discretionary Federal Reserve monetary policy have grown so big that they endanger the entire financial system. That should be corrected.

The acute problem, however, was how to avoid a government-induced meltdown of the financial system and concomitant misery for millions of people.

In this link, Larry Summers and George Soros disagree on the merits of TARP. Their discussions focus correctly on the most important issue: how to deal with the "toxic" assets that banks held on their balance sheets. Writedown or price floor?


Soros vs. Summers

Monday, October 04, 2010

TARP, Requiescat In Pace

TARP ended today. Its net cost was estimated to be $50 billion.

Was it worth it? I think so. The proponents were absolutely correct about the shape of the world in the absence of TARP--large numbers of bank failures and massive credit deflation. TARP bought us time for banks to replenish their capital.

Now that the program bought us time, let's forge ahead to get rid of the economy's systemic risk--discretionary Federal Reserve monetary policy, which is the source of the risk, and fractional-reserve commercial banking, which is the transmission channel.

TARP limited the capital market's downside risk, but what was responsible for the upturn? Chalk that up to a lesser known program, TALF. This is my favorite program because it jump-started the securitization market, which is how most lending is done nowadays.

At The Margin

Let me microscopically expand on a statement that I made over at Fr. Oliver Herbel's blog: "Charity can help at the margin–I don’t think anyone wants to completely remove the incentives for success and social mobility."

Yes, that's right. I don't believe in the same kind of charity in which many folks believe. For example, I was watching the TV show, 60 Minutes, in which Melinda Gates spoke about the causes to which she devoted large sums of money, like AIDs and malaria.

I'm not a fan of that kind of giving. Charitable spending, commonly conceived, is consumption spending. Nothing is saved; nothing is invested; nothing is available to aid economic growth; nothing is available for future generations. Capital formation aids future generations by making possible increased future consumption.

Any large charitable contributions that I'll make will go to endowments , not directly to recipients. Certainly, use a portion of the income for direct aid to recipients, but remember the remaindermen as well.

Bank Capital

Two proposals to prevent the violent swings of the business cycle appeared in the news today.

1) "...proposals, which are backed by the Swiss National Bank and the country's financial regulator FINMA, would require both banks to hold reserves of 10 percent in common equity and 19 percent in total capital by 2019."The so-called Basel III rules agreed by governors of major central banks in September require reserves of 7 percent and 10.5 percent respectively, though the composition of those reserves is slightly different from the Swiss proposal."

In my view, even the Swiss proposal doesn't go far enough. Nothing less than a 100% reserve requirement will prevent violent business cycle swings.

2) The International Monetary Fund recommended that regulation be extended to non-bank financial firms, such as hedge funds and insurance companies, to lessen systemic risk. I almost forgot: the IMF thinks that derivatives should be regulated, too.

What a surprise. The statists at the IMF have never seen a private entity that they haven't wanted governments to control. Other than a personal preference for financial regulation, however, the IMF hasn't pinpointed the role that non-banks played in the most recent downturn, other than a magnification of bank-originated leverage.

Saturday, October 02, 2010

The Philosopher's Stone

To retire early and optimize marital bliss, the author proposes a simple solution: Don't have kids.

She has a blog "Retirement: A Full-Time Job".