Saturday, July 23, 2016

Weekend reading

I think I got badly buttraped on that calc test Wednesday, so I'm going to have to try and study more for the next 2 weeks so I can rescue my mark on the final.

Then again, I'm pretty sure that everybody found that test to be harder than the first one, and the class median on the first one was 58%, so maybe I'll get rescued by the bell curve? I mean, I'm pretty sure they don't fail half the class in a first year math summer school course.

Anyway, here's some stuff:

Calculated Risk - existing home sales run to 5.57M. Existing homes don't contribute to the US economy, really. But what it means for inventory is potentially a big deal.

Reuters - Goldman Sachs in spotlight in Malaysian fund scandal. Just out of curiosity: if one single country's elite can steal $2.5 billion through one single bond issuance, then what does the possible aggregate of all such theft worldwide mean for the loanable funds model? Hm? How many trillions of dollars of stolen money are sitting in bank accounts looking to earn interest? Maybe a zero interest rate is just what you get after kleptocracy gains supremacy over the world economy?

Bloomberg - China faces WTO complaint over metals export curbs. Huh... an export curb on copper? I guess China feels they're going to need yet more metal in the years to come? I guess Chinese demand hasn't disappeared? I guess this'll become a mainstream narrative again?

WSJ China Realtime - China's busiest high-speed rail line makes a fast buck. This is why Chinese investment in physical capital was a good thing:
The link’s biggest shareholder, China Railways Corp., has never released the financial performance of the line, which cost $33 billion to build. Recently, a bond prospectus issued by a minor shareholder offered a glimpse into the rail link’s financial performance.

According to Tianjin Railway Construction & Investment Holding (Group) Co., a regional railway builder, the Beijing-Shanghai high-speed rail link last year recorded a net profit of 6.6 billion yuan, or about $1 billion. It’s the first time it made a profit, said Tianjin Railway, which owns a 4.5% stake in the link. Chinese state media has often touted the line as the most profitable high-speed rail route in the world.
The Chinese government has 10,000 economists, and they've all studied emerging market success and failure stories, and so they knew that China needed to spend money on infrastructure development so that it could continue to grow into a developed market. And guess what? Government investment in capital can indeed yield a permanent growth dividend that more than pays for the upfront costs, despite everything the paleoconservative kleptocrat apologists in American universities want us to believe.

But no, you guys go ahead and invest in India, where the port system is in gridlock, the rail system is operating beyond capacity, and what few roads they have kill 1/10th of the population. Invest in India just because Modi's a kleptocrat Thatcherite. Go ahead. See where that gets you.

The Krugginator - Donald Trump, the Siberian candidate. Apparently his campaign manager is in thick with Putin via his connection with Yanukovych:
We do know that Paul Manafort, Mr. Trump’s campaign manager, has worked as a consultant for various dictators, and was for years on the payroll of Viktor Yanukovych, the former Ukrainian president and a Putin ally.

And there are reasons to wonder about Mr. Trump’s own financial interests. Remember, we know nothing about the true state of his business empire, and he has refused to release his taxes, which might tell us more. We do know that he has substantial if murky involvement with wealthy Russians and Russian businesses. You might say that these are private actors, not the government — but in Mr. Putin’s crony-capitalist paradise, this is a meaningless distinction.
Vote Putin, America!

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