Saturday assorted links


#4 "Care" is a fickle term. if you read the federal papers, one pervasive idea is that our states our united but also experimental playgrounds to test new ideas. Federalism has significantly risen since the 1800's, but the idea still has significance. States have a bit of power on how to spend money, generate money, and borrow money. If the federal government bails out a state government, it necessarily has more power in the purse strings. Puerto Rico doesn't want to be a state yet, but the constitution gives the states the power to rise and fall and doesn't explicit give the federal government the power of the bail out, not matter how much they "care" about Puerto Rico.

The constitution allows the Feds to help Rwanda & Israel but not Puerto Rico? Can't they just label it foreign aid


"The constitution allows the Feds to help Rwanda & Israel but not Puerto Rico? Can’t they just label it foreign aid"

Of course, the Constitution allows for aid to Puerto Rico. The Constitutional ban on Bills of Attainder, applies to people, not states. Over the years, Congress has passed numerous bills specific to Puerto Rico. For example, Section 936 of the tax code was written specifically for Puerto Rico ( Read the actual text if you have any doubts.

The real problem is more complex. Greece is much bigger relative to Germany the PR is to the U.S. (check the population ratios). Beyond that, the German government owns much of Greece's debt (at this point). The Federal government doesn't own much (if any) PR debt. A PR bankruptcy doesn't threaten the existence of the dollar. A Greek bankruptcy is a very real threat to Euro (in the medium and long term, but probably not the short term).

A hypothetical PR bankruptcy would be like the fall of Enron, WorldCom, Health South, PG&E, CIT Group, etc. In other words a bunch of bondholders would take (large) losses and the country would move on (including PR). To put this in perspective, the CIT Group bankruptcy was larger than the proposed PR bankruptcy. Have you ever even heard of the CIT bankruptcy?

PR should be allowed to file for bankruptcy under the Federal bankruptcy code (which will have to be amended to allow for this). It should be treated as a standard corporate bankruptcy (which it is in many respects) and a Federal judge should work to straighten the situation out.

Of course, PR will have to stop selling bond to pay its bills. See Greece for a comparison.

"The Constitutional ban on Bills of Attainder, applies to people, not states": are those actual people, or corporations too?


"are those actual people, or corporations too?"

I am not a lawyer. However, I have frequently read about legislation written to benefit just one corporation. However, because of the Constitutional restriction, convoluted language is used so that in theory anyone might benefit, but in practice only company actually benefits.

Note that this Constitutional restriction has no bearing on PR. Laws can and do apply only to PR. The same statement applies to the rest of the U.S. as well. Congress can fund levies in New Orleans or man made harbors in California without running afoul of the Constitution. Congress probably could not exempt just one state from the income tax. However, it could (and did) exempt PR.

I was merely addressing William's comment about the Constitutional allow-ability of a bailout.

Advisability is a different can of worms.


Once again I am not a lawyer. However, the Federal government could easily find a Constitutional mechanism for baling out PR (or so I think). Should it? No. Bankruptcy court is a better course.

Oh yeah for sure my radical idea of no implied powers died with the Whig party. The fed can do what it wills.

A Greek bankruptcy is a very real threat to Euro (in the medium and long term, but probably not the short term)

About 98% of their production and trade is elsewhere and most of the Greek debt is held by public agencies.

This "essay over multiple tweets" trend is getting really obnoxious.

This. Write the damn essay, post it, and then tweet it. Once. Please. Cory Doctorow and Noah Smith do this quite well.

Agreed. It has something narcissistic about it, having to see the writers name and ironic picture after every clipped supposedly profound sentence.

Blogging. It gives thoughts some room.

And stay off my lawn too!!

#4: Greeks are closer chromatically to White than Latinos?

Puerto Rico has very little visibility in America period, even in New York and Florida outside ethnic enclaves. It cuts both ways - Americans are never going to demand a referendum on kicking out the island as Steve Sailer fantasizes about. The island is small enough to maintain its status in purgatory along with America's Pacific territories for the foreseeable future. A somewhat similar situation pertains with France and her island possessions in the Pacific and Indian Oceans

Those in the Philippines were never granted American citizenship. So, when the Philippines were juridically detached, you did not have a seven digit mass of people therein with a franchise to settle in the United States. Puerto Ricans were granted citizenship. Question, could that citizenship be revoked by ejecting the territory in question?

Also, there is no constitutional provision for federal lawmaking via referenda.

At this point, of course, we have no constitution to speak of, if by that you mean a body of law superodinate to statutory acts. What we have is portfolio of excuses for judges to annul legislative acts. We could, of course, simply declare the Congress analogous to the British Parliament and pass the necessary legislation anyway, along with a contingent bill of attainder which says that if Madame Justice Ginsburg objects, she leaves the world one head shorter the next day.

"could that citizenship be revoked by ejecting the territory in question?"

The Brit's did this ubiquitously when the divested their dominions. There's a strong precedent.

There's some consent among scholars that that was possible only because the UK did not have a written constitution and their highest court could simply chose to refuse to hear that case. Hey, wait...

Depends on the Latino. I don' t see that much difference between Michelle Bachelet and Angela Merkel or between Pope Francis and Pope Emeritus Benedict XVI. Alejandro Padilla could swap places with Donald Trump, and none of them would be the wiser.

2. (the second 2. not the first 2.). Of course, it's to Andreessen's benefit to be the pied piper of irrational investor behavior. He is the Glenn W. Turner of the 21st century.

I think you are envious.

It also appears the Germany cares about their bank losses a lot more than the US does in 2015. If Greece had bankruptcy court and negotiated a 20 - 30% write-off with Merkel's interference, it might have wrapped a lot quicker here. Now, I forsee Greece voting "Yes", the government changes, and no real economic improvement to which Germany and Merkel will be fully blamed in the future.

In reality, isn't Puerto Rico problem that until 2012 they tended to support their 'territory' status over being a state? (Or is Puerto Rico never had a majority over 50% with the three choices, independence, Territory or state?) Anyway, I would support a debt bankruptcy debt write off and then the US accepts Puerto Rico as a state. (Although I know it will happen in today environment.)

o Hercules, born of good parents, work in this way and you shall achieve the most blessed happiness.

As an investment banker, I agree with 2 (b) completely. People use financials to justify their preconceived notions of what something should be worth, not vice versa. Sell side broker research analysts are the absolute worst at this (since they are essentially worthless), while buy side hedge fund analysts do this the least (since they're looking for value). It's still a psychological thing though, so it will never be completely eliminated. If everyone is saying something is red, while you swear you see it as blue, you're the one who's going to, more often that not, change your mind

Andreesen: "the challenge of actually standing outside of herd is brutally hard."

It is easier if you are old, rich, and indifferent to the number of readers that your blog has. So I recommend sour, old, and rich analysts.

6. Seems pretty accurate.

7. Interfluidity on Greece:

Young put out a blues band recording with unconventional tunings. Interesting but way too long.

#6: 308 graduates from the top 15 schools? My goodness that's a lot!

I don't think finance and accounting PhDs combined, for all schools...produce that many a year. Combined, top 15 schools might only produce 30 finance or accounting PhDs a year. And of course they work at business schools, which are generally much larger than econ schools (10 times as big usually in terms of students). Same story with strategy and marketing.

Seems to me to be a bit of over-production. Unless the private or policy markets are so big as to eat up most of these graduates.

Correlation is not causation. Even us non-econ PhDs know that :p

Econ has always produced way too many people, good times or bad times.

As opposed to sociology, literature, or formal training in art?

There aren't 308 graduates from top 15 programs annually, its closer to 100 a year. 308 probably is all the current students regardless of cohort year, minus those who haven't chosen a field yet.

Possibly. I was going with what the link said: final year students in 2014. Maybe not all of them will make it to the job market, but they're "final year", whatever that means.

Both #2s were good. Sampras sounds like a pretty good guy.

Yeah but we really need a special category of "Letters to our 15 year old selves that we know our Mothers aren't reading". I expect most of them would say some variation on "More Groupies! They will disappear before you know it, so hit on them while you can".

On the other hand, what letter would you write to the 15 year old Sampras? I don't think I would have much to say. The 15 year old Michael Jordan? Well, maybe. Something like "Look, everyone loves you and wants you to succeed, show some class, OK?". How about the 15 year old Shaq? "Get and stay on your diet Dude, you could be the greatest if you showed any self discipline". The 15 year old Tiger Woods? Well, there would be a story.

Personally I would like to write to the 15 year old Ty Cobb.

Sounded like kind of a douche, actually. And because of that, I couldn't stand to get through the whole thing. Maybe he redeems himself in the end.

The tone of his letter is "You are incredibly awesome and here are some details about just how awesome you are. You will be the best ever. There is only one guy who even comes close and you will beat him 4 out of 5 times -- and I feel compelled to mention this twice. Your only faults are going to come from things like not embracing new technologies -- beware of that because new technologies are the only way others will beat someone as awesome as you."

I feel sorry for a man who writes to his teenage self, and this is all he can come up with.

1. No and "dedicated beard sink" ?? WTF

La Monte Young is difficult for an outsider to assess--he's recorded little and rarely performs. The world is full of people who will tell you how great he is, but so much of it seems to boil down to "you had to be there, I guess." This may make him more a consequential composer than a great one, exactly. I find him interesting to listen to--what little there is available to listen to--but I rarely go back to him, as I do to Philip Glass, John Adams, Terry Riley, Steve Reich...or even Harry Partch or Glenn Branca, for that matter.

I like Lamonte Young. Weird guy, though.

2(a). Seems like a congratulatory note as much as anything. Not a bad guy, though.

2b: the much larger problem is when the herd is convinced that valuations are wrong and comes up with theories to confirm that (eg. Housing since 2001).

You can carry all the English text of Wikipedia if you have an Android device with 12GB free space. So instead of $500K, the price is 4 orders of magnitude lower, the weight is 5 orders of magnitude lighter, and you get hyperlinking and article title search. Throw in a solar charger and you can reboot civilization, at least until you drop or wet the device...

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