Good morning.
- Tech-splanations.
- Forgotten cities.
- Political motion.
- A quote … on becoming Orthodox.
- Of taxpayers and banks.
- Syncretism … religions insanity?
- Importing games shows … now from Russia not just the Beeb.
- What does “other” mean in that context?
- Sun and earth.
- Climate and the UK upper house.
- Hmm, that seems dated, talk should be replaced with something Obamoid platitude like “engagement.”
- Cranky?
- Looking for hypocrisy, go no further than Copenhagen?
- That doesn’t mesh with the history I’ve read.
- Somewhat critical of Mr Obama as orator.
Of taxpayers and banks.
Raise $1 billion of equity.
Borrow $9 billion from the Fed at an annual cost of 0.25%.
Buy $10 billion of 30-year Treasuries paying 4.45%
The only thing missing is this:
http://www.frbdiscountwindow.org/borrowing.cfm?genid=14&desc=Borrowing&url=borrowing.cfm
Borrowing from the Fed Discount Window is usually only for overnight terms, due to the crises its been extended to 90 day terms.
What does this mean? This means every 90 days (or in more normal times every day) your entire loan comes due. Since the US Treasury bonds aren’t going to pay you $10Billion until 30 years from now, you will have to roll over the entire debt with the Fed.
Now what happens if interest rates go up? Well the value of your $10B in bonds will go down since investors can now buy bonds paying more than 4.45%. So if you sell your bonds to pay off your debt to the Fed (which you have to do every 90 days or every day unless you’re rolling your debt over) you’ll take a loss. Since you have $1B in capital you can only asorb a loss of 10%. If you keep rolling over your debt with the Fed you’re locked in at receiving 4.45% from the Treasuries BUT every 90 days (or every day) the 0.25% may change.
What this all means is that this ‘riskless’ position is anything but riskless. It’s a comfortable safe harbor in a period of financial crises and deflation but its a minefield in normal economic times. Goldman and other banks playing this game are no doubt eyeing the point where they will start moving the $10B out of Treasuries and into more productive loans (hopefully to things like worthwhile business investment and *good* consumer credit).
In the meantime the ‘riskless’ profits does help to recapitalize the investment banks so there is a bailout going on here. We could have dispensed with this type of bailout if we were willing to do, say, a $1.5T stimulus package 50% financed with the Fed printing money. But then something’s better than nothing.
Going forward, a serious discussion needs to happen over regulation of the financial sector. The game that is being played now as most of the attention is focused on health care and the environment is that the banks are telling us their current profits prove they are OK after all and regulation is unnecessary. The Republicans, not surprisingly, are mostly going along with that line.
Syncretism … religions insanity?
I once perused a book in Barnes and Noble written by the chief excorist for Rome. I was a bit surprised that a Catholic country like Italy has a long tradition of tapping occult practices like hiring witches to place or remove curses, hexes, ‘the evil eye’, etc on people. As a result, the excorist stated a lot of his work came from people who engaged such people to either help or hurt others. A section of the book went into great length detailing how to dispose of ‘cursed’ items….
Anyway this type of syncretism which is what the USA Today article was describing is hardly new. Old Catholic countries like Ireland and Italy have long had parrell reigious systems running alongside the traditional Church toying with occult ideas like ghosts, communication with the dead, fortune telling etc. Oddly it seems to me that the stronger the Church is in some areas, the more seriousness is given to the ‘unofficial Church’. I think the attitude most more secular types of religious would have to ‘cursed items’ from an Italian witch would be bemused indifference. Yet this priest who took the matter very seriously urged they be disposed of with slightly less control than highly radioactive waste. Clearly the subtext of that the orthodox give is the competiting religion has legitimacy hence we attack it the way ATT attacks Verizon. As a result the faithful are surprisingly willing to give the occult a try when they are disappointed with the Church. Wouldn’t you give Verizon a shot if your ATT phone wouldn’t work after bringing it in 3 times in a row?
This type of, let’s call it ‘peasant syncretism’ is probably not increasing in the US IMO and is hardly something new.
The more interesting type of syncretism IMO is not Catholics going to mass on Sunday and visiting a psychic on Friday or buying tickets to see Jonathan Edwards do his show live. Its the more educated who pull from ideas of multiple major religions. The most important here is Buddhism, which because it has so little emphasis on revalation and makes next to no metaphysical claims, has mixed itself well with just about every major world religion including Christianity (see Merton), Judism and even Islam. There are others, though. Joe Carter once cited a story about a woman who celebrated a mix of Christian and Muslim holidays.
Is this insanity? I don’t think so. I think its a denial of the claim most major religions make of having a monopoly on truth (or at least religious truth). Hence as customers, the religious are reserving their right to choose the products they will and won’t accept from the providers. This is no different than a person who shops at Shop Rite but goes to Whole Foods for fresh veggies and fruits. Now of course if you think a particular denonmination or religion does objectively have a monopoly on the truth, this is a bad call (and if Shop Rite has the best food and best prices on *everything* then you should do all your shopping there). But is it insanity to reject that assumption?
Boonton,
Speaking of books, my (used) copy of the Economics of Time and Ignorance arrived. I’ll read it over the holidays … and be blogging about it.
Cool. if you have time you may want to look at R Scott Bakker’s Prince of Nothing series. A very good set of fantasy books that touches on a character whose a bit like a Jesus who took the Devil’s offer of ruling the world (but also not as supernatural as Jesus). It’s lots of reading (each book about 500 pages) but it goes very quickly. Might make a good discussion…..
Boonton,
On the fantasy/sci-fi front I have a full queue. I’ve got two of the Malazan Empire books to read (which I recommend) and I gave my eldest daughter two China Mieville books for her birthday (Iron Council and Perdido Street Station … which if she brings them for the train rides I might read too if I run out of other entertainment (that is reading) material. I’ve also got two book on post Soviet Russia and I’ll probably
For some reason Netflix has the start of the BSG series (the first partial season) as not available now … but indicates that they will have them soon. So … I’m going to put off the BSG franchise for later … I’m starting off on the John Adams miniseries (I read the book) and the Sarah Jane/Terminator TV series. I’ve found that while my in theater tastes for film run to the eclectic and often difficult … while riding my attention and interest is different … which drives a somewhat lower brow selection. Not that I can’t think about it then or after, but longer dry segments are tough.