Friday Reads

Good Morning!!

I’ve spent the last few days editing tables, proofreading, and formatting bibliography, cross checking table of contents and lists of tables to make sure page numbers match.  It’s the kind of work that makes you want to pull out every last thread of hair on your head.  I’m hopefully at the end of the road to chasing down about a dozen signatures for forms too.  It’s driving me nuts!!  I’m going to be so glad when this stupid dissertation gets published and I don’t have to mess with the thing ever again!

Given that I”m doing this mind numbing frustrating detail work, it’s probably contributing to some things that are making me really mad.  I cannot–for one–imagine any one having any reasons to defend a football coach who didn’t report horrible instances of child sexual assault.  I don’t understand the riots on campus that occurred the other night.  I certainly don’t understand glib tweets defending said coach sent out to millions of fans by celebrities either.  How many little boys were assaulted and how many people around them will be hurt as they spend their lives trying to overcome the trauma?  How on earth do you defend some who who was covering up and not reporting a series of heinous felonies?

Demonstrators tore down two lampposts, one falling into a crowd. They also threw rocks and fireworks at the police, who responded with pepper spray. The crowd undulated like an accordion, with the students crowding the police and the officers pushing them back.

“We got rowdy, and we got Maced,” said Jeff Heim, 19, rubbing his red, teary eyes. “But make no mistake, the board started this riot by firing our coach. They tarnished a legend.”

An orderly crowd first filled the lawn in front of Old Main when news of Mr. Paterno’s firing came via students’ cellphones. When the crowd took to the downtown streets, its anger and intensity swelled. Students shouted, “We are Penn State.”

Some blew vuvuzelas, others air horns. One young man sounded reveille on a trumpet. Four girls in heels danced on the roof of a parked sport utility vehicle and dented it when they fell after a group of men shook the vehicle. A few, like Justin Muir, 20, a junior studying hotel and restaurant management, threw rolls of toilet paper into the trees.

“It’s not fair,” said Mr. Muir, hurling a white ribbon. “The board is an embarrassment to our school and a disservice to the student population.”

Just before midnight, the police lost control of the crowd. Chanting, “Tip the van,” the students toppled the news vehicle and then brought down a nearby lamppost. When the police opened up with pepper spray, some in the crowd responded by hurling rocks, cans of soda and flares. They also tore down street signs, tipped over trash cans and newspaper vending boxes and shattered car windows.

The irony of all this is that the right wing noise machine has less to say about this violence and mayhem than it ever has about the Occupy Protests.  Most disappointing is that Assistant Coach Mike McQueary will not be attending the game because he’s gotten death threats for doing the right thing after witnessing the sodomy of an approximately ten year old boy by then Assistant Coach Sandusky.

Raw Story has an interesting piece up about Romney who seems to have an itchy missile finger trained on Iran.  Just what we need; more entanglements in the Middle East.

Accusing President Barack Obama of naivete on Iran, Republican presidential challenger Mitt Romney promised Thursday that if elected president he would “prepare for war” with the Islamic republic.

In a commentary published in the Wall Street Journal, Romney said he would back up US diplomacy “with a very real and very credible military option,” deploying carrier battle groups to the Gulf and boosting military aid to Israel.

“These actions will send an unequivocal signal to Iran that the United States, acting in concert with allies, will never permit Iran to obtain nuclear weapons,” he wrote.

Nouriel Roubini has some interesting choices to lay at the feet of European Community leaders.  It’s really worth a read.  For some reason leaders here and in the US are obsessed with austerity.  They should be obsessed with way promoting economic growth.

First of all, without economic growth, you have a dual problem: a) The socio-political backlash against fiscal austerity and reforms becomes overwhelming as no society can accept year after year of economic contraction to deal with its imbalances; b) more importantly, to attain sustainability, flow deficits (fiscal and current account) and excessive debt stocks (private and public, domestic and foreign) need to be stabilized and reduced, but if output keeps on falling, such deficit and debt ratios keep on rising to unsustainable levels.

Second, restoring growth is also important because, without growth, absolute fiscal deficits become larger rather than smaller (given automatic stabilizers). Third, restoring external competitiveness is key as that loss of competitiveness led—in the first place—to current account deficits and the accumulation of foreign debt and to lower economic growth as the trade balance detracts from GDP growth when it is in a large and growing deficit. So, unless growth and external competitiveness are restored, flow imbalances (fiscal and current account deficits) persist and stabilizing domestic and external deficits becomes “mission impossible.” Finally, note that, unless growth and competitiveness are restored, even dealing with stock problems via debt reduction will not work as flow deficits (fiscal and current account) will continue and, eventually, even reduced debt ratios will rise again if the denominator of the debt ratio (debt to GDP), i.e. GDP, keeps on falling. Growth also matters as credit risk—measured by real interest rates on public, private and external debt, which measures the default risk—will be higher the lower the economic growth rate. So, for any given debt level, a lower GDP growth rate that leads to a higher credit spread makes those debt dynamics more unsustainable (as sustainability depends on the differential between real interest rates and growth rates times the initial debt ratio).

Switching to US problems, Morgan Stanley has its knickers in a knot about potential failure of the super committee. They anticipate more downgrades of US soverign debt.

Now Morgan Stanley is weighing in on this question, as part of a broder note about the impact of the super-committee on the economy.

From MS’ Christine Tan:

S&P reminded market observers in October that the US remains on negative watch due to its unsustainable fiscal outlook, which implies a 1 in 3 chance of further downgrade from its current
AA+ rating. If the Super Committee fails to reach a $1.2trn deficit reduction deal, if such a deal relies more upon accounting changes than real deficit reduction, or if Congressional action lessens the impact of the $1.2trn automatic trigger, we believe this could potentially provide S&P with a pretext to downgrade the US further from AA+ to AA. The initial S&P downgrade of the US’s AAA rating on
August 5, 2011 roiled the markets into severe risk-aversion mode and the GRDI, Morgan Stanley’s proprietary risk appetite indicator fell to an all-time low of  -5.13.

So it’s important to bear in mind that the consequence of a downgrade would be an economic slowdown, not anything on the cost of borrowing side.

It sure is a crazy mixed-up world.  What is on your reading and blogging list today?