White House calls for warrantless searches of suspects’ cellphones | The Verge
“The Obama administration is urging the Supreme Court to allow for warrantless cellphone searches of arrested suspects, calling upon the court to resolve a nearly six-year-old case. In a petition filed last week, the White House disputed an appeals court ruling, which determined that police should be required to obtain a search warrant before accessing the contents of a suspect’s phone.”
UK Prime Minister David Cameron reportedly authorized Guardian hard drive destruction | The Verge
“As UK officials continue to justify the destruction of Guardian hard drives containing information leaked by Edward Snowden, the state’s deputy prime minister, Nick Clegg, has stepped up to say that he endorsed the action. According to the Guardian, a spokesperson for Clegg revealed that he and Prime Minister David Cameron had given authority for the action to be carried out. The spokesperson reportedly said that, alongside Cameron, Clegg “thought it was reasonable” to destroy the hard drives because they “would represent a serious threat to national security if [they were] to fall into the wrong hands.””
The incredible shrinking company | Felix Salmon
Econbrowser: What Should Emerging Market Economies Do?
Not Quite Noahpinion: 30 year fixed rate mortgages are awesome
This from Frances Coppola in the comments made sense to me.
“Hi Guan,
As I see it the main thing that enables interest rates to be fixed for 30 years in both the US and Denmark is the financing model for mortgages, not government guarantees. In both cases, mortgages are financed with long-term bond issuance, either by the mortgage lenders themselves to fund lending directly (Denmark), or via sometimes complex off-balance sheet structures to remove loans from lenders’ balance sheets (US). In both cases, the interest rate risk on fixed-rate mortgage lending is transferred to the capital markets where it is dissipated – in the US’s case, by being exported around the world. This prevents lenders being bankrupted by interest rate rises.
In the UK where I live, lenders generally keep mortgages on their own balance sheets and fund them with shorter-term debt, typically retail call and notice deposits. This leaves them exposed to interest rate risk and makes long-term fixed-rate lending extremely dangerous. The UK’s experiment with US-style securitization to fund mortgage lending did not end well; the two banks that used it in a big way (HBOS and Northern Rock) both failed in the financial crisis and were nationalised, so it is not surprising that the general public are now very wary of mortgage-backed securities issued by banks. Though institutional investors might be more forgiving, especially if the Danish rather than US model were used. “
BBC News – Eurozone growth hits 26-month high, says PMI survey
Emerging market sell-off worsens, more pain ahead | Reuters
“Heavy selling engulfed emerging markets again on Thursday with more currencies falling prey to fears of higher global borrowing costs and a reduction in cheap cash supplies from the United States.
While the Indian rupee and Turkish lira skidded to new record lows against the dollar and the Indonesian rupiah slumped to fresh four-year lows, currencies such as the Mexican peso and the Korean won that have so far been spared the worst of the recent selloff, are also now feeling the heat.”
Analysis: New Greek rescue promises euro drama, not crisis | Reuters
“The need for a new rescue program for Greece promises a drawn-out drama of late-night negotiations but is unlikely to trigger the sort of crisis that has threatened the breakup of the euro in the recent past.”
Dutch finance minister says new support for Greece ‘inevitable’ – Telegraph
“Dutch finance minister Jeroen Dijsselbloem has joined a growing chorus of eurozone officials who have conceded that Greece may need a third bail-out, despite claims that another rescue is “not in discussion”. “
The Arab Spring’s Unlikely Winner by Dominique Moisi – Project Syndicate
I don’t have a view on this but I thought I’d highlight the key statement here:
“At least for the time being, Israel seems to be the only clear winner of the “Arab Spring” revolutions. Most Israelis would strongly object to this interpretation. Their regional environment has become much more unstable and unpredictable.”
In U.S., China, Europe, data points to global rebound | Reuters
“Business surveys on Thursday suggested the world economy was on the mend, with U.S. and Chinese manufacturing activity at multi-month highs and better-than-expected growth in the euro zone.”
“”Sociologists have found that whites refer to ‘qualifications’ and a meritocratic distribution of opportunities and rewards, and the purported failure of blacks to live up to this meritocratic standard, to bolster the belief that racial inequality in the United States has some legitimacy,” Samson writes in the paper. “However, the results here suggest that the importance of meritocratic criteria for whites varies depending upon certain circumstances. To wit, white Californians do not hold a principled commitment to a fixed standard of merit.””
Fed Seeks More Control Over Rates – WSJ.com
This is just about interest on excess reserves. The Fed has to hike this rate if it wants to tighten at any point in the future. So it is making the plan to do just that.
Biggest Banks Face Moody’s Cuts as U.S. Support Ebbs – Bloomberg
“Moody’s and Standard & Poor’s have said downgrades may be needed because the federal government has new tools to wind down banks instead of rescuing them with taxpayer money. Those plans can include forcing debtholders to incur losses or convert stakes to equity. The policies also may have an impact on ratings of the companies’ deposit-taking subsidiaries. “
Airline to sue Argentinian government over eviction | World news | The Guardian
“Latam airlines vows to take action after it is forced to vacate a hangar at Aeroparque airport in Buenos Aires”
U.S. dealers expected $15 billion reduction in QE3 in September: survey | Reuters
“Primary dealers surveyed before the Federal Reserve’s July policy meeting said they expected the U.S. central bank to trim its asset purchases by $15 billion starting in September.”
Steve Jobs’ Narcissism: Do the Ends Justify the Means? | Psychology Today
“Steve Jobs is a fascinating case study in leadership, because he was a phenomenal innovator and marketer while at the same time being visionary and vicious. He is a star in some EI competencies, but he devastated others on the way to success. Do his ends and accomplishments justify his means?”
Was Steve Jobs’ Narcissism Justified? | Psychology Today
“as a clinical psychologist (and a secure, even-tempered family man), I felt more than a touch of condemnation of and pity for Jobs and his narcissistic personality structure. Along with some fellow Psych Today Bloggers, there is no doubt in my professional judgment that Jobs met criteria for a Narcissistic Personality Disorder (NPD). He was preoccupied with his sense of importance and his brilliance, he consistently damaged others by exploiting and bullying them and could be completely unempathetic to their feelings, he was envious of other’s attention, he was arrogant and haughty, and he was controlling and manipulative.”
Why Narcissistic CEOs Kill Their Companies – Forbes
” The study showed that more narcissistic CEOs spent more on advertising as a percentage of their sales, spent more on R&D as a percentage of their sales, ran up costs more (measured as SG&A as percentage of sales), and took on more debt
– More narcissistic CEOs also tended to do more acquisitions and pay much higher premiums for the companies they bought
– More narcissistic CEOs led companies that had more extreme performance results — sometimes they’d do well and other times they’d do terribly
– They also found more narcissistic CEOs were linked to big performance fluctuations for the companies — for a few years they would do really well but this would usually be followed by several years where they did very poorly”
“Former Treasury Secretary Larry Summers, who has been hanging out in Cape Cod all summer, did not want to campaign for Federal Reserve chair at first. According to The Washington Post’s Zachary A. Goldfarb, Summers told his friends “no lobbying” when his name was first batted around to replace Ben Bernanke. Now, Summers has decided to “take off the gloves,” and has instructed friends and former colleagues to counter attacks against him.”
Lavabit founder: ‘My own tax dollars are being used to spy on me’ | World news | theguardian.com
“Since shuttering his email service, which was used by NSA whistleblower Edward Snowden, Ladar Levison has been stuck in a Kafkaesque legal battle – and that’s about all he can say”
“emember, a big mandate for this committee is not to review the programs to see if we can make them more privacy-protective, but simply to increase our trust in them. Which goes to the core of what Sunstein was talking about in his paper: using covert government propaganda to, in this case, better sell covert government spying.”
Economic history: What was mercantilism? | The Economist
“MERCANTILISM is one of the great whipping boys in the history of economics. The school, which dominated European thought between the 16th and 18th centuries, is now considered no more than a historical artefact—and no self-respecting economist would describe themselves as mercantilist. The dispatching of mercantilist doctrine is one of the foundation stones of modern economics. Yet its defeat has been less total than an introductory economics course might suggest.”
German economy grows at strongest pace in a year – Telegraph
“Stronger domestic demand drove the strongest German quarterly expansion in more than a year in the second quarter, fuelling optimism Europe’s largest economy will outperform in 2013 and support the nascent eurozone recovery. “
Wolfgang Schaeuble: third Greek package will be ‘much smaller’ – Telegraph
“Wolfgang Schaeuble has repeated his warning that Greece will need a third bail-out, but said that any fresh rescue would not involve a second debt writedown that could “destabilise” the whole of the eurozone. “
UK economy expanding faster than first thought, GDP revision shows | Business | theguardian.com
“ONS raises second-quarter growth estimate from 0.6% to 0.7% – the strongest figures since the Olympic boost”
Fed Burned Once Over Taper Now Twice Shy on QE3 – Bloomberg
““They want to get back to a neutral balance-sheet policy but that doesn’t mean they want rates to skyrocket here,” said McCarthy, a former Richmond Fed economist. “The market is hypersensitive,” and the taper represents “the beginning of the end” of unprecedented monetary stimulus. “
Canon clicks onto surveillance opportunities as camera sales slump – Independent.ie
“”A major focus for the next phase is increasing our business-to-business (B2B) sales, and of course security cameras – which is a huge market – is part of that,” Canon President and CEO Fujio Mitarai said in an interview.
Canon is looking beyond digital cameras – the last consumer gadget industry still dominated by Japan Inc – and targeting industrial and corporate clients, much like Japanese peers such as Panasonic Corp which fell prey to foreign competition in TVs and other consumer electronics.”
NSA paid millions to cover Prism compliance costs for tech companies | World news | theguardian.com
“The National Security Agency paid millions of dollars to cover the costs of major internet companies involved in the Prism surveillance program after a court ruled that some of the agency’s activities were unconstitutional, according to top-secret material passed to the Guardian.
The technology companies, which the NSA says includes Google, Yahoo, Microsoft and Facebook, incurred the costs to meet new certification demands in the wake of the ruling from the Foreign Intelligence Surveillance (Fisa) court. “
The financial unraveling of southeast Asia
“I am puzzled by Krugman’s take on the rupee. I would not argue that the weaker rupee is bad per se, but rather it is a symptom that an earlier overvaluation of India’s economic prospects is now over. The country is, sorry to say, the “sick man of Asia,” economically speaking that is. (Or more literally in terms of public health, for that matter.) Here is my May 2012 column on India, which I think has held up very well. One can only hope that this financial crisis will bring reforms comparable to those of the early 1990s; otherwise the momentum for better policies appears to have been exhausted. Right now the country has about the worst legal system in the world (North Korea and a few other outliers aside) and the ten-year yield has been popping over ten percent. It is shifting from a better multiple equilibrium to a worse one and foreigners are having second and third thoughts about further investing.
I don’t expect these crises to have serious “knock on” problems for the developed nations, but hundreds of millions of vulnerable individuals now face a much worse economic future, at least in the short to medium term.”
Factory Jobs Still Pay Better – Real Time Economics – WSJ
“Economists at the Commerce Department, studying data from 34 state unemployment insurance systems that gives a detailed picture of what people earn in different sectors of the economy, found that the average monthly earnings of newly hired factory workers was 38% higher than for new workers in other industries as of the end of 2011. That’s the latest data available.”
“Upon joining a group, extroverts are perceived as having high status. But in an online experiment involving imagined scenarios, extroverts’ perceived status slipped from 4.37 to 3.87 on a 7-point scale as the group came to consider their assertiveness and talkativeness less valuable and to suspect that they were motivated by self-interest, say Corinne Bendersky of UCLA and Neha Parikh Shah of Rutgers. To retain their status, extroverts must contribute at especially high levels to counter growing negative perceptions of them, the researchers say.”
Why Do So Many Incompetent Men Become Leaders? – Tomas Chamorro-Premuzic – Harvard Business Review
This is the main thrust of this interesting piece on leadership and gender:
“In my view, the main reason for the uneven management sex ratio is our inability to discern between confidence and competence.”
Leaning Out: Number of Women in Finance Declines | Institutional Investor
Here, this article states that women are OVER-represented in finance in the US at 56.1% of workers but the skew is toward the bottom with fewer women at the top and the level of female participation at the top declining. Hat tip Sallie Krawcheck
NSA broke privacy rules thousands of times per year, audit finds – The Washington Post
“The NSA audit obtained by The Post, dated May 2012, counted 2,776 incidents in the preceding 12 months of unauthorized collection, storage, access to or distribution of legally protected communications. Most were unintended. Many involved failures of due diligence or violations of standard operating procedure. The most serious incidents included a violation of a court order and unauthorized use of data about more than 3,000 Americans and green-card holders. “
IP Cloaking Violates Computer Fraud and Abuse Act, Judge Rules | Threat Level | Wired.com
“A federal judge has ruled that circumventing an IP address blockade to connect to a website is a breach of the Computer Fraud and Abuse Act, the same law that was used to prosecute Aaron Swartz before he committed suicide earlier this year.
The decision (.pdf) by U.S. District Judge Charles Breyer marks the first time a court has offered this interpretation of a highly controversial law that affords both criminal and civil penalties. Congress passed the law in 1984 to combat hackers.”
Declassified Documents Prove NSA Is Tapping the Internet | Threat Level | Wired.com
“One function of the court is to ensure the NSA’s activities target communications of those “reasonably believed to be located outside the United States.” The surveillance must also be designed to “prevent the intentional acquisition of any communication as to which the sender and all intended recipients are known at the time of the acquisition to be located in the United States.”
In the 81-page highly redacted opinion declassified today, Bates chided the government for misrepresenting the reach of the “upstream” internet surveillance program between 2008 and 2011.”
Guillermo Calvo on Austrian business cycle theory
“Once you cut through the free market (or anti-market rhetoric), the Austrian theory is not as different from Minsky’s as it sounds at first. And both sides hate it when you say this.”
Banks and the Monetary Base – A Friendly Response to Paul Krugman | PRAGMATIC CAPITALISM
“in order to understand why QE didn’t cause high inflation you need to view the monetary system differently. And the IS/LM model wasn’t going to get you to the right conclusion because it doesn’t actually apply (rather, it might get you there, but not for the right reasons). Stick with me here if you’re a non-economist. This will be a little wonky, but you’ll get it.”
Japan manufacturers’ optimism hits three-year high: Reuters Tankan | Reuters
“The index of sentiment derived from a monthly Reuters survey of manufacturers rose by 3 points to plus 16 in August, which matched the level it was at in November 2010. A positive readings shows optimists outnumbered pessimists.
The index is expected to rise again to plus 18 in November in the Reuters survey, which is strongly correlated with a closely watched quarterly Bank of Japan tankan survey.”
Microsoft Bribe Probe Touches Russia, Pakistan Deals – WSJ.com
“A U.S. investigation into Microsoft Corp.’s relationships with business partners that allegedly bribed foreign officials in return for contracts includes activity in Russia and Pakistan, a sign that the probe is wider reaching than previously known, according to people familiar with the matter.”
Secret Court Faulted NSA for Collecting Domestic Data – WSJ.com
“The National Security Agency violated the Constitution for three years by collecting tens of thousands of purely domestic communications without sufficient privacy protection, according to a secret national-security court ruling.
In the strongly worded 2011 ruling, released Wednesday by the Obama administration, the court criticized the NSA for misrepresenting its practices to the court. It noted that the illegal collection was the third instance in less than three years in which the government made a “substantial misrepresentation regarding the scope of a major collection program,” specifically how the NSA collected Internet communications and phone data.
The court ruling includes estimates suggesting the NSA collected as many as 56,000 purely domestic communications a year.”
China Manufacturing Expands – WSJ.com
“The initial reading on the HSBC Purchasing Managers’ Index climbed to 50.1 from 47.7 in July, when it was at an 11-month low. A reading above 50 indicates expansion from the previous month, while a reading below 50 indicates contraction.
Following evidence of stronger growth in industrial output and exports in July, the latest data suggest China’s economy may have bottomed out in the second quarter, with slightly brighter prospects for the second half of the year. “
The Abandoned Dogs That Roam the Streets of Detroit: – Bloomberg
“Detroit, once the powerful engine of the American economy, has seen its population dwindle to about 700,000 from 1.8 million. The poverty-stricken city has as many as 50,000 abandoned dogs left to fend for themselves, taking shelter in some of the estimated 70,000 vacant homes. There are only four City of Detroit Animal Control officers trying to cover a 139-square-mile city seven days a week, taking in as many as 15,000 animals a year.”
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