Love me some Argentina

The real-life Argentinian food pyramid:

We don't need no stinkin' vegetables!  Or whole grains.  Or fruit.  Or really much in the way of bread or pasta. 

The biggest issue, though, seems to be the distinct lack of bacon. Ham is great, but where is the bacon?  This is what happens when you live south of the Equator and the toilet flushes backwards.

Satchmo and the Man in Black

Not two people I would have expected together, but I guess I underestimate how close the blues and country music are to each other.  Plus, it's just really cool to watch Louis Armstrong play.

Even Stupider

If housing stimulus is dumb, then the "Buy America" provisions in the stimulus bill are galactically stupid. This is idiotic, economically-ignorant, pandering bullshit of the Nth degree.

Let's count the ways in which this is so colossally retarded:
1) It's illegal.  We signed a whole bunch of really fancy treaties that say we won't do this.

2) It's useless. Trade deficits arise because we are less patient than other countries.  We would like to consume goods today, while they are willing to wait until tomorrow.  So they sell us the stuff today (a trade deficit), with the agreement that we'll pay them back with other stuff tomorrow (a trade surplus in the future).  We like to have stuff today rather than tomorrow.  If you say that the stimulus money has to be spent on U.S. goods, great.  We'll still have a trade deficit unless our savings behavior changes.

3) It's inefficient.  The reason that U.S. steel and concrete companies are struggling is because they suck at what they do.  They charge too much for their product, and so people buy their steel and concrete from the cheaper Chinese and Mexican firms.  If you buy only U.S. steel and concrete, you are literally burning up money.  Say we need 1,000 tons of steel to build a new bridge.  If we buy only U.S. steel, this will cost us $200,000.  If we buy Chinese steel, this will cost us $100,000, leaving $100,000 left over to buy other new things (like a school).

4) It'll backfire.  Companies in the U.S. sell a lot of stuff overseas.  I know we have a trade deficit, but we happen to export about $1.5 trillion worth of stuff every year.  If we pass this stupid rule, then you know what? Other countries will do the same thing, and our exports will collapse.  You know what happens when GE and Catepillar can't export anything?  They fire people.

Stupid, stupid, stupid, stupid, stupid.

Housing Stimulus Provision

The Senate, according to this, is thinking about several measures to boost the housing sector.  Why on earth would we possibly want to do this?  The whole point of the financial crisis was that the housing market was way over-valued, and the realization of this led - all at once - to a big drop in housing prices and put a lot of banks in a bad position.  But that doesn't mean that the drop in housing prices was unwarranted!

The problem with a financial crisis/recession is that not only do the financial Einstein's who made the wrong bets on housing get hosed, but so do lot's of innocent people in the rest of the economy.  So I understand the need to stimulate the economy and cushion the blow to those innocents.  This may require us taking stakes in banks or bailing them out.  But I don't understand how trying to re-inflate the housing bubble has any value whatsoever.  We want to ease the transition into a future in which real estate is fairly valued, not over-valued.

This all just sounds dumb, but then again it is the Senate.

It's always about the cows

Here you go, just about the simplest explanation of how a giant financial company can destroy itself:

"You have two cows.

John Paulson borrows one cow so he can sell it for $100. He gives you $10 as collateral.

You buy your neighbors cow for $100, which you finance by taking out a $90 loan from the bank and use John's $10 to make up the rest.

You brag to everyone about your financial health. You have assets--two cows you own, plus one Paulson owes you--worth $300, and liabilities of just $100.

A third of the country goes vegetarian.

You thought your two cows were worth $200 and now they are worth $140.

You express confidence in your financial health. Your assets are now worth only $200--your two cows plus the one John owes you--but your liabilities are still only $100. If necessary, you could sell the assets at this distressed price and pay off all your loans.

You hold onto your cows because you are sure the market is "dislocated." Some day someone will want to eat beef again.

The rest of the country goes vegetarian. Your two cows are now worth $2 each to guys who want to make dog food.

John Paulson buys a cow in the market for $2 and he gives it to you as repayment of the loan. You now have three cows worth six bucks.

John wants his $10 back.

The bank calls. It wants its $90 back.

You call the Federal Reserve and ask for a bailout."

Alright, this is cool, but doesn't it leave out the most important question: why does everyone go vegetarian?  Was it obvious that the country was going to go veggie? Should you have seen this coming? Did you willfully ignore the vegination of the country, or was this really a big surprise?  

It seems that this little story is missing out on the fact that we could all tell that the beef industry was in a boom and that vegetarianism was on the horizon, but no one stopped buying and selling cows. 

Why?

Your Credit Rating

This is interesting - the formula that determines your the FICO score in your credit rating is being updated. See here for details, but the interesting ones to me are:

4. Having more available credit will increase your score more
6. Closing accounts will bring down the score.

These are simply saying the same thing, in some way.  If you reduce the amount of credit that you could use, then people will apparently be less willing to extend you new credit.

So if people are rationalizing their spending these days and trying to live within their means, wouldn't they close down unused credit accounts (if only to stop themselves from spending more).  And then their credit score will go down, meaning that they'll be less able to access credit and buy things like cars, houses, and major appliances.  Won't that make the recession worse?

One big problem with the FICO is that they have information only on your credit payments, not on your income. So it's not clear to a prospective lender whether your amount of credit is appropriate to your income or not.  They are basically hoping that because other people are willing to loan to you, you are a good credit risk.  But if this is how everyone operates, it seems like there is a really big potential coordination problem. (If no one lends you money, you can't get credit, even if you have a stable job and are really responsible.)

Last name map

So this is pretty cool.  You enter your last name, and they map out the distribution of that name across the U.S.

Distribution of the surname Vollrath

Where does your name come from?

We're big in Wisconsin and Florida, perhaps not surprisingly.  Not sure about that Missouri thing, though. Probably the red-headed step children.