W. Arthur Lewis and the Tradeoffs of Economics and Economists - From Vox EU: W. Arthur Lewis and the tradeoffs of economics and economists, by Ravi Kanbur, VoxEU: There is nothing new under the sun. The passionate polit...
16 hours ago
Politically, both Socrates and Machievelli were disturbed not by lying but by the problem of the hidden crime, that is, by the possibility of a criminal act witnessed by nobody and remaining unknown to all but its agent. In Plato's early Socratic Dialogues, where this question forms a recurring topic of discussion, it is always carefully added that the problem consists in an action 'unknown to men and gods.' The addition is crucial, because in this form, the question could not exist for Machievelli, whose whole so-called moral teachings presuppose the existence of a God who knows all and eventually will judge everybody. For Socrates, on the contrary, it was an authentic problem whether something that 'appeared' to no one except the agent did exist at all. The Socratic solution consisted in the extraordinary discovery that the agent and the onlooker, the one who does and the one to whom the action must appear in order to become real - the latter, in Greek terms, is the one who can say dokei moi, it appears to me, and then can form his doxa, his opinion, accordingly - were contained in the selfsame person."
“Goldman posted the richest quarterly profit in its 140-year history and, to the envy of its rivals, announced that it had earmarked $11.4 billion so far this year to compensate its workers.
At that rate, Goldman employees could, on average, earn roughly $770,000 each this year — or nearly what they did at the height of the boom.”
(from the NYT) “Because of an editing error, an article on Sunday about the financial problems of American International Group referred incorrectly to the timing and participants at meetings at the New York Federal Reserve between Saturday, Sept. 13, and Monday, Sept. 15. Although there were indeed meetings that weekend, there was also a separate meeting on Monday to discuss financial aid for A.I.G. Lloyd C. Blankfein, the chief executive of Goldman Sachs, was the only Wall Street chief executive who attended the Monday meeting, not the only chief executive who attended weekend meetings. Also, Henry M. Paulson Jr., the Treasury secretary, did not lead or attend the Monday meeting. (Both Mr. Blankfein and Mr. Paulson did attend the weekend meetings.).”
“Hoping to reduce a swirl of speculation over its role in the bailout of the American International Group, Goldman Sachs reiterated Friday that its direct losses would have been minimal if A.I.G. had failed.
Goldman also described how, as early as July 2007, it began to have ''collateral disputes'' with A.I.G. as the companies disagreed on the value of the mortgage-backed securities that were the basis of multibillion-dollar contracts between them.
David A. Viniar, Goldman's chief financial officer, walked reporters through a thicket of numbers Friday in a conference call that the company held to ''clarify certain misperceptions'' about its positions with A.I.G.
While Mr. Viniar acknowledged that Goldman's relationship with A.I.G. raised what he called a complex set of issues, he was adamant that, because of the collateral Goldman held and hedging trades with third parties, it would not have been damaged directly if A.I.G. had been allowed to collapse.
Since September, the government has set aside more than $180 billion to support A.I.G., the Government Accountability Office reported.
A significant part of that money has flowed through A.I.G. to various trading counterparties, many of them large financial institutions, which A.I.G. at first refused to identify.
Under intense pressure from lawmakers, A.I.G. recently released a list of counterparties, and Goldman was among the largest, accepting $12.9 billion of the insurer's bailout money. For some, this raised questions about the government's motivations for not letting the insurance company go into bankruptcy protection.
Henry M. Paulson Jr., the Treasury secretary at the time of the first A.I.G. bailout, was Goldman's former chief executive.
Goldman has said all along that its exposure to A.I.G.'s troubles was immaterial because of outside hedges that would have protected it.”
“But much of the political and financial world was surprised to learn this week that the man was Neel T. Kashkari, 35, a former Goldman Sachs investment banker whom Mr. Paulson has tapped to oversee the $700 billion bailout effort as interim assistant secretary for financial stability.
Mr. Kashkari, who has only six years of experience in finance and government, said he knew he seemed young to be shouldering so much responsibility for the world's financial stability. But, he said, Mr. Paulson will oversee every step he takes.
''This project is Secretary Paulson's highest priority,'' Mr. Kashkari said in an interview on Wednesday. ''He is all over it. Our team is just executing his strategy.''
Even so, some experts question whether Mr. Kashkari is up to the job.”
“Edward M. Liddy, the dollar-a-year chief executive leading the American International Group since its bailout last fall, still owns a significant stake in GoldmanSachs, one of the insurer's trading partners that was made whole by the government bailout of A.I.G.
Mr. Liddy earned most of his holdings in Goldman, worth more than $3 million total, as compensation for serving on the bank's board and its audit committee until he stepped down in September to take the job at A.I.G. He moved to A.I.G. at the request of Henry M. Paulson Jr., then the Treasury secretary and a former Goldman director.
Details about his holdings were disclosed in Goldman's proxy statement and confirmed by an A.I.G. spokeswoman, who said they constituted ''a small percentage of his total net worth.'' Mr. Liddy had already owned some stock in Goldman Sachs before joining its board in 2003.
He has said that he considers his work at A.I.G. to be a public service, performed on behalf of the taxpayers, who ended up with nearly 80 percent of the insurance company. His goal is to dismantle the company and sell its operating units, using the proceeds to pay back the rescue loans. On Thursday, A.I.G. said it had sold its car insurance unit, 21st Century Insurance, to the Zurich Financial Services Group for $1.9 billion.” (17 April, 2009 NYT)
“During yesterday's conference call, Guy Moszkowski, an analyst from Merrill Lynch, asked Mr. Viniar what role the $13 billion Goldman has collected from A.I.G. had on its first-quarter showing. But Mr. Viniar would have none of it: Profits ''related to A.I.G. in the first quarter rounded to zero.'' Hmm, how then did Goldman make so much money if that multibillion-dollar gift from you and me had nothing to do with it?
Part of the answer lies in a little sleight of hand. One consequence of Goldman's becoming a bank holding company last year was that it had to switch its fiscal year to the calendar year. Previously, Goldman's fiscal year had ended on Nov. 30. Now it ends Dec. 31.
As a result, December 2008 was not included in Goldman's rosy first-quarter 2009 numbers. In that month, Goldman lost a little more than $1 billion, after a $1 billion writedown related to ''non-investment-grade credit origination activities'' and a further $625 million related to commercial real estate loans and securities. All told, in the last seven months, Goldman has lost $1.5 billion. But that number didn't come up on Monday. How convenient.”
“To make the case for a big stimulus package, they released their economic forecast for the next few years. Without the stimulus, they saw the unemployment rate — then 7.2 percent — rising above 8 percent in 2009 and peaking at 9 percent next year. With the stimulus, the advisers said, unemployment would probably peak at 8 percent late this year.
We now know that this forecast was terribly optimistic. The jobless rate has already reached 9.4 percent. On Thursday, the Labor Department will announce the latest number, for June, and forecasters are expecting it to rise further. In concrete terms, the difference between the situation that the Obama advisers predicted and the one that has come to pass is about 2.5 million jobs. It’s as if every worker in the city of Los Angeles received an unexpected layoff notice.”
“These models, which are also used by Wall Street and various research firms, do a decent job most of the time. But they are notoriously bad at forecasting turning points because they are based on an assumption that the recent past will more or less repeat itself.”
Will't please you eat? will't please your
Why hast thou slain thine only daughter thus?
Not I; 'twas Chiron and Demetrius:
They ravish'd her, and cut away her tongue;
And they, 'twas they, that did her all this wrong.