nobel prize Archives - Where Is The Outrage?

Wednesday Evening News Roundup

Yesterday, I mentioned that last year was the second warmest year on record. Australia is simply baking this year.

I would like to spend a little time talking about an idea that was floated over at Pragmatic Capitalism over a year ago. As you recall, about a year ago we had the showdown at the OK Corral (well, it was really Congress) over the debt ceiling. The Republicans were determined to cut spending at all costs. If it meant taking the economy, so be it. If it meant taking the world economy, that was a price that many Republicans thought was worth paying. So, another debt ceiling is looming on the horizon. We have the treasury secretary telling us when we’re going to run out of money (basically within weeks if Congress does not act). Now, comes this idea, which has been talked about on several blogs (here and here). Why doesn’t the treasury print a $1 trillion coin and then march that coin over to the Federal Reserve and deposit the coin? The treasury doesn’t need Congress’s permission to print the coin. Since our money is not tethered to something tangible like gold, there’s no reason we can’t do this. The idea sounded half-baked until Nobel prize-winning economist Paul Krugman said it wasn’t a bad idea. In my opinion, we need to avoid the constant threat of government shutdown and default. We need for all members of Congress to begin to act like adults instead of spoiled brats. Governing is about compromise. Governing is not about jumping up and down and stomping your feet like a four-year-old in the middle of a massive tantrum. I am for any solution that avoids economic uncertainty and promotes job growth here in the United States. If that solution means we need to print a $1 trillion coin then I’m all for it. (Oh, don’t get distracted by some of the craziness that I’ve heard from conservatives over the last 24 hours. Someone has decided to confuse the American public by saying we have to print a coin that is actually worth $1 trillion and would therefore have to be the size of an ocean liner. The logic is stupid. Currently we print coins and money that are clearly not worth their face value. A $100 bill is not made up of a hundred dollars’ worth of paper. A $1000 bill is clearly not made up worth of a thousand dollars’ worth of paper and ink. Ignore this bit of stupidity.) (more…)

By ecthompsonmd|2013-11-03T18:18:47-04:00January 9th, 2013|Budget, Environment, Foreign Affairs|Comments Off

LTCM – how to raise $1 billion, without breaking a sweat

(Much of the following information comes from the book When Genius Failed – The Rise and Fall of Long-Term Capital Management)

John Meriwether was the heart, soul and brains of LTCM (Long-Term Capital Management). He was an extremely successful trader, arbitrage trader, at Salomon Brothers. Then, a funny thing happened, he was caught up in a scandal in falsifying U.S. Treasury auctions. Although he was never accused, a top bond trader who worked under him admitted to the allegations. John Meriwether was forced to resign. That was 1991. He decided that he was going to start his own hedge fund. This is not to be just any old hedge fund. This was can be a hedge fund that was the home to the “best and the brightest.” He cultivated a close knit group that work together at Salomon Brothers. These weren’t the typical cigar chomping, hard drinking Wall Street types. He cultivated college professors. College professors like Eric Rosenfeld who was a Harvard business school assistant professor and Lawrence Hilibrand who had two degrees from MIT.

John Meriwether did have a reputation for making money on Wall Street. Because of his reputation, he should’ve been able to raise $100 million without much trouble. He wanted to raise an astonishing $2.5 billion. In order to do this, you have to do something special. You just can’t walk into Merrill Lynch, Goldman Sachs or some other Wall Street firm with your resume and a smile. There’s no way even to get $2.5 billion. On the other hand, if you walked in to one of these firms with Robert C Merton a prominent finance professor at Harvard whose theories were well known to all on Wall Street. If you’re able to walk in with Prof. Merton that would turn heads. What if you could walk in with Myron Scholes (half of the Black-Scholes model) who was somewhat of a rock star/financial guru on Wall Street. (Not only were these guys economic gurus, they both ended up winning the Nobel Prize in Economics while employees at LTCM.) Finally, if you were not buying the pure star power of Myron Scholes and Robert Merton and what about David Mullins? David Mullins was a former Vice Chairman of the Federal Reserve. John Meriwether had put together what must be called the Dream Team of Wall Street.

John Meriwether and his team collected large checks from around the world and from Wall Street. Italy central bank invested on $100 million. A large Japanese bank signed up for another hundred million dollars. The largest investment bank in Brazil ponied up $65 million. PaineWebber invested $100 million. The pension of Black & Decker invested $5 million. When the dust had settled, John Meriwether had raised $1.25 billion. This may not of been the $2.5 billion that he wanted to raise. It may have been far short of his goal but it was still the largest amount of money raised to start a hedge fund… Ever.

These guys could not lose. That was the feeling on Wall Street. It seems that everybody wanted to be a part of LTCM. Everybody put in money and almost as important everyone wanted in. What did everybody really know about LTCM? The truthful answer is, in spite of everybody putting up as much money as they could, they really didn’t know much. John Meriwether never explained his investment strategy. He basically walked into Wall Street executives offices and said, “we are smart and we are going to make money.” It was that easy.

By ecthompsonmd|2010-09-28T07:00:28-04:00September 28th, 2010|Books, Economy|2 Comments

Hannity makes "sense" out of the Nobel prize

Now, this is priceless.

From TP:

Last night, Fox News host Sean Hannity hosted a panel that debated the merits of President Barack Obama’s Nobel Peace Prize. After complaining about Obama’s goal of eliminating nuclear weapons and claiming that the Nobel is undesirable because Palestinian leader Yasser Arafat receieved it, Hannity suggested an alternative recipient for the award — former President George W. Bush:

HANNITY: [Yasser Arafat] got the Nobel peace prize. Excuse me, a terrorist got the Nobel peace prize. Some people deservedly so. You know who else deserved it? Ronald Reagan. And frankly, I would’ve given it to George Bush.

As many commentators have noted, the Nobel Prize appears to have been motivated in part by anti-Bush sentiment, which makes Hannity’s suggestion particularly absurd. After all, George W. Bush engaged in the torture of detainees, waged an unprovoked and illegal war, and brought about the largest protests in history against U.S. policies — hardly behavior that is fitting for a Nobel Peace Prize.

By ecthompsonmd|2009-10-14T21:33:16-04:00October 14th, 2009|Obama administration, Party Politics|Comments Off