Remember Mark Rich? The Republicans should have fellated him.

A typical Marc Rich & Co trade involved Iran (under the Shah), Israel, Communist Albania and Fascist Spain. The Shah needed a path to export oil probably produced in excess of OPEC quotas and one which was unaudited and hence could be skimmed to support the Shah’s personal fortune. Israel - a pariah state in the Middle East - wanted oil. Spain had rising oil demand and limited foreign currency but was happy to buy oil (slightly) on the cheap. Spain however did not recognise Israel and hence would not buy oil from Israel - so it needed to be washed through a third country. Albania openly traded with both Israel and Spain. Oh, and there is an old oil pipeline which goes from Iran through Israel to the sea.

So what is the deal? The Shah sells his non-quota oil down the pipeline through Israel and skims his take of the proceeds. Israel skim their take of the oil. Someone doing lading and unlading in Albania gets their take and hence make it - from the Spanish perspective - Albanian, not Israeli oil. The Spanish ask few questions. The margins are mouth-watering - and they all come from giving people what they really want rather than what they say they want. We know what the Shah wanted (folding stuff). We know what Israel wanted (oil). We know what Spain wanted (cheap oil). Who cares that Spain was publicly spouting anti-Israel rhetoric. [Similar trades allowed South Africa to break the anti-Apartheid trade embargoes.]

It also helped that Marc Rich & Co was a (highly) multilingual firm. Rich is fluent in Spanish (it is the language he talks to his children in). He speaks English, German, Yiddish and presumably Hebrew. His business partner (Pincus Green - pardoned the same day as Rich) speaks Farsi amongst many other languages. They could do this deal because they could negotiate it and - deep in their heart they hold the Ayn Rand view that trade is a moral virtue and hence they do not need to be concerned with other morality. [The only line that matters is the law - and then it might not be the law of his adopted country - Switzerland - rather than the United States where he was resident.]

Update on Corp. Boards

Many of the boards we have come across are populated by individuals who rely on the stipends they receive from numerous corporate boards and thus appear motivated primarily to ensure continuing board fees, first-class air travel and accommodations, and a steady diet of free corned beef sandwiches until they reach their mandatory retirement age. We are therefore encouraged by the recently finalized proxy rules, which will ease the nomination and election of directors by shareholders.

Sentence of the day

By the time a cake-mix jingle writer is giving Don a hummer while humming “The Star Spangled Banner,” we know we’re in for a cynical riff on the secrets of American success.
-NYMAG

Business Update

And this:

In a recent survey of more than three hundred big companies a few years ago, eighty per cent described themselves as delivering “superior” service, but consumers put that figure at just eight per cent.

China Fact of the Day

China has an extremely high investment rate, perhaps the highest ever recorded for a medium or large economy. Countries with high investment rates should normally run trade deficits, since there is so little left over of their production for them to consume that they must import the balance. This is what happened, for example, to the US during most of the 19th Century.

But China has probably the highest trade surplus ever recorded. This means that an extraordinarily large portion of its production is invested, and another extraordinarily large portion is exported. So what about consumption? The only way a country can run an extraordinarily high investment rate and an extraordinarily high trade surplus is if consumption is extraordinarily low.

MPettis

This

China Fact of the Day

Chinese consumers, when asked, will detail how household expenses have changed in the past decade. Medical costs are the No. 1 concern for 84 percent of China’s rural residents, according to a recent survey by the Economist Intelligence Unit. Officially, medical prices are only up 2.8 percent so far this year. That number does not include the cost of gifts to hospital doctors and administrators to ensure adequate care.

...One-year deposit rates at 2.25 percent have not been changed since November 2008, which means Chinese savers are actually losing money now that inflation has passed 3 percent

This is the way back japan

Dear Masanori and Kiyoko,

Even though you can't see me, I'll always be watching you. When you grow up, follow the path you like and become a fine Japanese man and woman. Do not envy the fathers of others. Your father will become a god and watch you two closely. Both of you, study hard and help out your mother with work. I can't be your horse to ride, but you two be good friends. I am a cheerful person who flew a large bomber and finished off all the enemy. Please be an unbeatable person like your father and avenge my death.

From Father

Sure

Venezuela is struggling with a decade-long surge in homicides, with about 118,541 since President Hugo Chávez took office in 1999, according to the Venezuelan Violence Observatory, a group that compiles figures based on police files.
-NYT

Thank a farmer

Each pound of wheat contains about 1500 food calories (i.e., kilo calories), and a person needs about 2500 calories per day. A year’s supply of calories for a person is in the neighborhood of 900,000, which in wheat units is 600 lbs. In simple terms, during a day of work Clint can supply the annual food needs of 100 people. Of course he and his dad Mike also spent days prepping and sowing the field, and there are hours planning, maintaining equipment, and marketing, etc., but in total the amount of time actually spent with machines on that 25 acres is probably only a week or so. And since Clint and his family manage to farm several hundred acres it all works out to about 100 people fed by one guy like Clint, which is typical for the US food system.

Let's Go!

“What is so exciting about yams? Everything!” Zobi, a taxi-driving muppet, shouts in a Nigerian lilt to anyone who will listen. “I can fry the yam. I can toast it. I can boil it. I love yams!”
-Nigeria

True again.

That said, my main problem with the piece was simply the fact that there wasn't much of an attempt at making class distinctions. It delves into the "extended adolescence" of relatively sheltered graduates from major universities, but what about the mass of 20-somethings who either didn't go to college or pursued degrees at community colleges and local universities? I graduated from a high school of roughly 2,400 people in 2005, and judging from the Facebook profiles of those I graduated with, many of my former classmates have built fairly adult lives for themselves. Most have jobs and live independently of their parents. Some have spouses or long-term partners, a few have children. For those who do live with their parents, it has less to do with maturity and more to do with the terrible job market. Obviously, anecdotes can't substitute for statistical data, but I'd wager that the above is true for many 20-somethings of modest means.

One last point: I'm not convinced there is an extended adolescence, but insofar as there is, I think we should consider it the product of economic changes decades-long in the making. A generation or two ago, you didn't need luck and a college degree to get a job with decent pay and benefits; with a high school education -- or less -- you could get a union job or learn a trade. You wouldn't be rich, but you could start a family and a build a stable life. The absence of those jobs goes a long way toward explaining the purported rise of late-onset adulthood.

True

The book value of the stock market — the value of its assets minus the value of its liabilities — has, on this view, been declining steadily of late, as the size of America’s liabilities has steadily risen. This is why people lump Spain in with Greece: while Spain’s liabilities are largely in the private sector and Greece’s liabilities are largely in the public sector, ultimately it’s the economy as a whole which is responsible for them.

The German Will Fear Us

Photos of Pre-War German Cities:


Did you know that the National Socialists wanted to build a skyscraper in Hamburg taller than the Empire State Building with a gigantic neon swastika on top to serve as a beacon for ships at sea?

Radioshack College

Let me make this more concrete. Perry notes that, in 1964, Radio Shack sold a stereo system nobody today would want for $379.95. 1964 also happens to be the year my parents started college at the University of Michigan. According to Michigan's Bentley Library, in-state tuition that year for freshmen and sophomores was $140 ($155 for juniors and seniors.) So, a stereo cost more than a year of college in Ann Arbor. Is life so much better now? Yes if you're a middle-class person who wants a stereo. No, if you're a middle-class person who wants a college degree. Now, most people today would consider a college education overwhelmingly more valuable than a stereo, and find it hard to believe that there was a time when the latter was comparably priced eith the former.

America the NYT pg1. photo

So sad now

Books I have enjoyed more after reading Wikipedia plot sumaries

HP

On the other hand, putting up dazzling short-term numbers that have the effect of enriching himself while robbing H.P.’s future — isn’t that what a C.E.O. should be fired for? Firing Mr. Hurd for that reason, however, would have taken courage, something that has always been in short supply on the H.P. board.

May 21 2001

Commentary: Sorry, Steve: Here's Why Apple Stores Won't Work
New retail outlets aren't going to fix Apple's sales

Rated R

...a vaguely sensual, mid-tempo, falsetto-chorused burner that Homme occasionally introduced in concert by pointing at some dude in the crowd who was displeasing him and announcing, "This is a song about fucking that guy's girlfriend.

Arcade Fire Alpharetta 8/11

“Ready To Start”
“Neigborhood #2 (Laika)”
“No Cars Go”
“Haiti”
“Half Light II (No Celebration)”
“Empty Room”
“The Suburbs”
“Ocean of Noise”
“Keep the Car Running”
“We Used To Wait”
“Neigborhood #3 (Power Out)”
“Rebellion (Lies)”
“Month of May”
“Neighborhood #1 (Tunnels)”

Encore:
“Intervention”
“Sprawl II (Mountains Beyond Mountains)”
“Wake Up”

Observations
-I observed three black people
-Lots of high school kids which is great
-Lots of asians which is bad
-Concert ended at 11:15 I got home at 11:30

Nerd blogger and socialist discuss current events

KABUL, AFGHANISTAN—As members of the international press looked on, Secretary of State Hillary Clinton rode on horseback through the streets of Kabul Monday, dragging the mutilated remains of Taliban leader Mullah Abdul Jalil through the dirt behind her. "Graaaaaggghh!" Clinton shouted as a frenzied crowd of supporters shot AK-47s into the air. Earlier in the day, Clinton had led a band of mercenaries through rugged mountain terrain to hunt down Jalil, whom the former senator eviscerated with a single stroke of her gleaming scimitar. U.S. soldiers marched alongside the triumphant, blood-soaked Clinton to the center of Kabul, where she ordered the Taliban leader's gutted body be hung from the town's tallest spire, where "all may behold it." White House sources confirmed that upon returning to Washington, Secretary Clinton burst into the Oval Office, threw Jalil's head down on the president's desk, and let out a deafening war cry

Major plot holes in movies

Independence Day: not only can Jeff Goldblum's Mac manage to connect to the alien systems, it can also bring the entire fleet to it's knees (and display a lovely animated GIF on their monitors).

Considering they're supposed to be thousands of years ahead of us, that's akin to bringing down the internet using a virus written on stone tablets.

Answer:

There was a scene cut out of the movie that explains it. All of human computer technology is based off of the OS found in the ship in Area 51.

The Dutch on Quants

The acceleration of addictiveness

You can probably take it as a rule of thumb from now on that if people don't think you're weird, you're living badly.

Sigh

There were just 25 U.S. noncombatant fatalities from terrorism worldwide. (The US government definition of terrorism excludes attacks on U.S. military personnel). While we don't have the figures at hand, undoubtedly more American citizens died overseas from traffic accidents or intestinal illnesses than from terrorism.

Lawyerings

BRK

Buffett has accumulated losses for Berkshire on equity derivatives since the 2008 financial crisis. The contracts, which mature starting in 2018, lose value when stock indexes decline. Berkshire’s second-quarter profit plunged 40 percent after the derivative bets on equity markets accounted for a $1.8 billion paper loss in the period.

Berkshire’s counterparties on the deals paid $4.9 billion in premiums, and Buffett arranged the contracts to minimize the collateral requirements his company could face. Liabilities tied to the equity contracts and the firm’s portfolio of credit- default swaps were about $10.5 billion at June 30. The company’s collateral provisions at that date were $173 million.

and...

By my calculations, Berkshire are short a staggering $280m vega marked now at an average vol in the low 30s. That is to say each 1% move in implied volatility impacts their portfolio by $280 million.

Excellent Sentences

"He was fun," Patrizia says about the fucking of the Presidente. "If it weren't for the videos I had to watch and the songs we had to sing. And the girls. The girls offering themselves to him. That I didn't care for."

"...In his bedroom, there was an enormous bed ringed in curtains, bigger than any bed D'Addario had ever seen. This is Putin's bed, he said. It was given to me by Vladimir Putin. They are close friends. The fall after this episode comes to light, he'll join Putin in St. Petersburg to celebrate Putin's fifty-seventh birthday. People like to guess what it is that Putin finds so companionable about Berlusconi, or if whatever it is can be deduced from the fact that Putin gave him a five-person bed as a gift."

-GQ

Yes!

I will be far away from any internet connection on August 10th, when the next Fed policy decision is announced. (I am assuming that the internet has not yet reached western Wyoming.) Thus I thought I would give you my reaction to the decision right now, before I left.

So here’s my reaction to the decision:

Very bad: The Fed does nothing significant. Maybe just a slight change in wording. The Dow falls several hundred points.

Bad: The Fed does something minor. Perhaps it promises to maintain the monetary base at current levels by purchasing T-bonds as the more unconventional assets are gradually sold off. The Dow falls slightly. (Actually, people are now so discouraged that this might be viewed as good news.)

Good: The Fed promises additional QE. The Dow rises significantly.

Outstanding: Fed announces both QE and an end to interest on reserves. The Dow soars by 500 points.

Inception: Leonardo DiCaprio penetrates three layers into the dreams of Hoenig, Fisher and Plosser. Inserts 500 posts from TheMoneyIllusion.com. Convinces the three that these are actually their own ideas. The Fed does QE, ends interest on reserves, and sets an explicit NGDP target, level targeting. The Dow soars 1000 points. We get a 1983/84-style recovery. Obama re-elected and strikes a grand bargain with the GOP to replace the income tax with progressive consumption tax.

-Money Illusion

These people don't want jobs!

The job market itself also has changed. During the crisis, companies slashed millions of middle-skill, middle-wage jobs. That has created a glut of people who can't qualify for highly skilled jobs but have a hard time adjusting to low-pay, unskilled work like the food servers that Pilot Flying J seeks for its truck stops.

Companies offering middle-skilled jobs can be flooded with applicants. Laquita Stribling, a senior area vice president in Nashville for staffing firm Randstad, says she received several hundred applications for a branch manager job that might have attracted a few dozen candidates before the recession.

But other employers with lots of applicants say the pool of qualified workers is small for specialized jobs. Carolyn Henn, head of hiring at environmental consultancy Apex Companies, says she recently received about 150 applications for an industrial hygienist job paying as much as $47,000 a year, which requires special certifications and expertise to oversee projects such as asbestos cleanups. That is about three times the amount she received for similar jobs before the recession. But she says the number of qualified applicants—about five—is less than she got before.

a 52-year-old mechanic in Lumberton, N.C., says he turned down more than a dozen offers during the 59 weeks he was unemployed, because they didn't pay more than the $450 a week he was collecting in benefits. One auto-parts store, he says, offered him $7.75 an hour, which amounts to only $310 a week for 40 hours.

"I was not going to put myself in a situation where I was making that small of a wage," says Mr. Hatchell. He has since found a better-paying job at a different auto-parts dealer.

At Emirates, four cabin-crew job fairs the airline held in Miami, Houston, San Francisco and Seattle attracted an average of about 50 people each, compared to a global average of about 150 and as many as 1,000 at some events in Europe and Asia. "I would have liked to have seen more and would have expected to see more," says Rick Helliwell, vice president of recruitment.

The jobs require little more than a high-school diploma and fluency in English. They include free accommodation and medical care, and starting pay of about $30,000 a year. Mr. Helliwell speculates that Americans might be hesitant TO MOVE TO DUBAI, where the jobs are based. "Maybe they have less of an adventurous spirit" given the uncertainties they face at home, he said.

-WSJ, Some Firms Struggle to Fill Jobs with assholes who probably voted for Obama and should have their benefits cut

Oh.

A memo sent to the panel Thursday night by the New York company included an analysis of derivatives-based revenue at Goldman from 2006 through 2009, said the person familiar with the matter. Based on the percentages provided by Goldman, such businesses generated $11.3 billion to $15.9 billion of the company's $45.17 billion in net revenue for 2009.

Add this to my high school time machine required reading list

Our findings confirm previous research indicating that overweight or obese girls are less likely to be sexually active than other girls. The authors also found that as a result of being less sexually active, overweight or obese girls are less likely to have vaginal intercourse without a condom. However, overweight or obese girls are not less likely to have sex under the influence of alcohol, and once they have had vaginal intercourse, their consistency of condom use is no different from that of their recommended-weight peers. Our most striking finding however, is that overweight or obese girls are at least 15% more likely than their recommended-weight peers to have had anal intercourse.

These findings make clear the importance of going beyond the question of just any sexual intercourse when characterising the sexual behaviour of teenage girls. Our findings also illustrate the benefits of using multifaceted and contemporary measures of risky sexual behaviour. If we had only considered outcomes related to vaginal intercourse, we would have concluded that overweight and obese girls are less likely than their recommended-weight peers to engage in risky sexual behaviour.

-VOXEU

I learn much.

What they do is rather than have 200 different computers throughout their business they have maybe one, at most three different models in use at any time. These computers are essentially identical and they have – sitting on the IT guys desk – three exact clones. When new software arrives (say for example a Microsoft update) the software is thoroughly tested on the three clone computers to make sure it produces no glitches. If the software (or hardware upgrade for that matter) causes no problems they roll it out across the network with all the computers being changed when staff power them up in the morning. The system works because the IT specialist controls “what is in the box”. By controlling what is in the box (often restricting the right of staff to load their own software) they get Apple levels of reliability but the ability to buy Wintel priced hardware. They do however pay a price on hardware – which is that they often get tied to exact specifications for computers. If their business expands they can either (a) get a new computer specification in or (b) order more computers under the old specification. When they do the latter (which would be most the time) the hardware maker has leverage – and selling old computers to business at old prices can be surprisingly profitable. [After computers should fall in cost by about a percent per week – so selling an old computer at an old price is a massive winner for the vendor... and is an important part of Hewlett Packard’s business.] Big business – through standardization – are – in this view – trying to emulate the advantage of being Apple.

Bronte Capital

Yes.

"There is nothing more annoying than Conceptual Artists/Bands who have allegedly garnered mainstream praise," Carles goes on. "I think the main gimmick behind these bands is convincing yourself that their 'product' stands for something more than music."

Pause and let the Dipset reference sink in. We've reached another ass to ass moment. There is nothing more annoying than people liking music for the wrong reasons? Not to pull a Chuck Eddy, but are there wrong reasons for listening to music? If blasting DMX out your Wrangler as you're pulling into some high school girl's driveway makes you feel awesome, makes you feel like a fucking bad-ass, is that wrong? If listening to metal makes you feel tougher, less insecure, is it my job to tell you that you are an idiot? You know when some people say "music is like a drug for me", this is what they're talking about: the simple act of listening to music makes them feel good. Imagine someone saying "You're enjoying heroin for all the wrong reasons." Are there right reasons? Is ‘empirical knowledge as to the effects heroin has on my body’ the right reason? I don't think so! Regardless of the myriad horrible reasons that might lead them to it, people probably do heroin because it makes them feel good.

In the Hipster Runoff universe, the only acceptable worldview is blowing up the hospital. HRO needs rugs, and people to stand on them, so that it can pull it out from them and show how stupid they were for thinking they were safe, for “pretending” they knew who they were. Just like Gawker, HRO won't stop until we're all too afraid to do anything, to step on the rug and take a fucking chance, to give a shit. Until we're all crippled by self-consciousness, and the worry of making a mistake. The targets will get younger and softer until we're laughing at thirteen year olds and ten year olds and five year olds, how stupid they are, how they embarrass themselves, how they believe they can do things it's so obvious to the rest of us they just can't do--so fucking obvious because we know so fucking much.

And thus a great sentence was born

“But please understand, sexual concerns are far from being the dominant concerns in space. It’s down here on the list.” With his hand, he indicates a level down by his knee. “It would just be a nice supplement. But when we talk about five hundred days, it’s true, this problem starts to grow higher on the list.” He believes a Mars crew should be made up of couples, to help ease the tension that builds during a long mission. According to NASA’s Norbert Kraft, the agency has considered sending married couples into space. When they asked his opinion on the matter, he discouraged it. His reasoning was that an astronaut might find himself with an untenable choice: jeopardizing his spouse or jeopardizing the mission. Astronaut Andy Thomas, who is married to astronaut Shannon Walker, told me another reason NASA shies away from flying married couples. In the event of a crash or explosion, they don’t want one family to have to endure a double loss, particularly if the couple has children.

Laveikin listens, then amends his statement: “Not necessarily married.”

“That’s right,“ says Lena. “There would be a different ethic there. When you come back to Earth, your wife should understand that at that time it was like different dimension, different rules, different you.”

Laveikin concurs. “My wife is a clever person. She would understand. She’d say, ‘You’re not completely faithful even on Earth. Let it be in space as well.’”

-Cosmonauts on a future Mars mission

Famous Actors Cut from Movies

Billy Bob Thornton, Martin Sheen, Gary Oldman, Bill Pullman, Lukas Haas, Viggo Mortensen, and Mickey Rourke, The Thin Red Line (1998)

For his first film since 1978’s Days Of Heaven, famed writer-director Terrence Malick brought together seemingly every male star in Hollywood, including Sean Penn, George Clooney, John Cusack, Woody Harrelson, Nick Nolte, John C. Reilly, John Travolta, Thomas Jane, and many, many more. But a cavalcade of big names fell victim to his unusual working methods and 20th Century Fox’s understandable reluctance to release a five-hour-plus movie. Billy Bob Thornton, Martin Sheen, Gary Oldman, Bill Pullman, Lukas Haas, Viggo Mortensen, and Mickey Rourke were all eventually cut from Malick’s loose, largely improvised adaptation of James Jones’ anti-war novel. Malick began with a script that served only as a loose outline, then shot enough material for his five-hour cut. When The Thin Red Line was shortened considerably, plenty of heavyweight thespians ended up on the cutting-room floor. Malick has hinted that he might someday release a director’s cut restoring their roles and greatly expanding the roles of actors who did make it into the film, but given the pace at which he works, cultists shouldn’t hold their breath waiting.

-AV Club

????

From the NYT:
Quantifying just how much taxpayer money will have been wasted on the hastily developed Volt is no easy feat. Start with the $50 billion bailout (without which none of this would have been necessary), add $240 million in Energy Department grants doled out to G.M. last summer, $150 million in federal money to the Volt’s Korean battery supplier, up to $1.5 billion in tax breaks for purchasers and other consumer incentives, and some significant portion of the $14 billion loan G.M. got in 2008 for “retooling” its plants, and you’ve got some idea of how much taxpayer cash is built into every Volt.

From MR:
Big new programs to create jobs need not be expensive. Suppose the cost of hiring a single employee were as high as $30,000 a year, several times typical AmeriCorps living allowances. Hiring a million people would cost $30 billion a year. That’s only 4 percent of the entire federal stimulus program, and 0.2 percent of the national debt.