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China is a symptom, not the problem

Suppose that I have some AAA rated government securities with 1 year to maturity, a coupon rate of 4% payable semi-annually, and a stated par value of $1,000. Quickly now: how much would you pay for them? What if I would sell them to you for 75? OK. Just keep that in mind. So… what about those nay-sayers who worry about China dumping dollar-denominated securities on the world market? Well, I’m at a loss to explain the doom-and-gloom scenario they paint for us. A few things come to mind, though: Working against China’s hypothetical machinations, is the fact that, in order to sell more and more securities, they would have to accept a smaller and smaller price. Which means that the value of China’s portfolio would be decimated by … Read entire article »

Filed under: Economic Fallacies

Sticking it to “The Man.” “The Man” is Granholm.

Well, I’m sure there was a bit more diplomacy than that. But I’d like to believe that a not-so-small part of Comerica Bank’s (NYSE: CMA) relocation decision has to do with Michigan’s unfriendly-to-business policies, including a forthcoming 2% tax on services (like banking). Yesterday morning, Michigan Governeror Jennifer Granholm had the following to say about Comerica Bank’s announcement that it would be relocating its headquarters, from Michigan, to Texas: In a world where these major corporations are making decisions on the basis of shareholders rather than on the basis of community, it makes me mad, frankly. Leaving aside the fact that Granholm routinely and hypocritically advocates “community”-oriented policy, with negligent disregard for the economic incentives (or, usually disincentives) such policies create for businesses – most of whom are having a rough … Read entire article »

Filed under: Potpourri

Next, They Will Come For the Jews…

I really, really thought we were past the point of banning books, but it’s not the first time I’ve been wrong, and it probably won’t be the last. If a handfull of wackos in Howell, MI get their way, the school board will be forced to ban certain books, including Kurt Vonnegut’s Slaughterhouse Five (which is the only book on the list that I’ve personally read). Ok, so the whole Jew thing was a teaser, but it’s really not that far off the mark, considering Howell is generally considered the KKK capital of Michigan. The issue has split the community. “If you feel that strongly about it put your kids in private school,” said Susan Kley, a member of Friends of Howell Public Schools. Right. And continue to be forced … Read entire article »

Filed under: Potpourri