Mish's Global Economic Trend Analysis |
- Italian PM Under Fire; Italy's 3rd Largest Bank Hid Derivative Losses: ECB Says "Matter for the Italian Authorities" (To Sweep Under the Rug)
- Walmart Explores Offering Private Health Insurance for Small Businesses; In Praise of Walmart
- Gallup Poll on Obama's Proposals to Address Gun Violence; Republicans and Democrats Agree on 7 of 9 Items; Is Now the Time?
Posted: 24 Jan 2013 04:06 PM PST When Mario Draghi (now ECB President), had oversight of the Italian bank system as Bank of Italy Governor, the Italian bank Monte dei Paschi di Siena (Italy's third largest bank) hid information on the derivatives transactions between 2006 and 2009. This information is just now out, and shares of the bank have plunged 22% in a few days. Mario Draghi ought to be under fire, but he says it's a "Matter for the Italian Authorities". The Mish translation is "It's a Matter for the Italian Authorities, to Sweep Under the Rug". With that backdrop, let's take a look at the other Super-Mario (Mario Monti) who is Under Fire Over bank Crisis. Mario Monti, Italy's prime minister, was forced to offer to recall parliament on Thursday amid questions about his government's handling of the financial crisis at Monte dei Paschi di Siena and the role of the central bank.Sweeping Efforts Underway Note the curious statement by Giorgio Napolitano, Italy's head of state (a largely ceremonial post): "If the situation is serious we are right to be concerned but I have full confidence in the operations of the Bank of Italy." IF the situation is serious? Is there a question here? I think not. And I wonder what Mario Draghi actually knew. Efforts are probably underway to determine if Draghi actually said anything about this in writing. Meanwhile, there is a good chance Italy's third largest bank may be nationalized, and an even larger chance this will affect national elections coming up in February. However, Please don't worry. Apparently it's not serious. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
Walmart Explores Offering Private Health Insurance for Small Businesses; In Praise of Walmart Posted: 24 Jan 2013 09:07 AM PST Once again I am here to sing the praises of Walmart. Over the years I have done so on many occasions. Many misguided souls take the other side. They blame Walmart for ruining mom and pop grocery stores, mom and pop hardware stores, etc. Not me, I praise cheaper prices. Moreover, it's what consumers voted for with their hard-earned dollars. If anyone wants to pay more for stuff, all they have to do is shop at a mom and pop hardware store, grocery store, or pharmacy. Most don't because they want a bargain. Today, I have good news. Walmart-style competition may be on the way in the healthcare business. The Orlando Business Journal writes Wal-Mart exploring private health insurance exchange for small biz. Wal-Mart is exploring the idea of building a private health insurance exchange tailored to offer cheaper health insurance to small businesses, a vice president told Orlando Business Journal Jan. 11.In Praise of Walmart Obamacare is going to raise the cost of healthcare. Walmart will lower costs. I have been waiting for this since Summer of 2008. Flashback June 22, 2008: Trade Wars, Health Care, and Wal-Mart This post is about trade wars, tariffs, health care, and Wal-Mart. I will tie these themes together starting with a look at Wal-Mart and health care.Hopefully a good idea, long overdue, is about to happen. I repeat what I said in 2008: "We do not need higher wages or higher prices. We need lower prices and a dollar that buys more". Walmart-style competition would do just that. My primary fear is regulators will kill the idea based on trumped up charges of some sort (or bribes from healthcare providers who fear competition) before the idea takes hold. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
Posted: 23 Jan 2013 11:45 PM PST Gallup has an interesting poll on Gun control. Republicans, Independents, and Democrats are in agreement far more than one might have thought. Of course I am talking about the population in general, not the extremists on both sides of the aisle in Congress. Poll questions were specifically worded by Gallup to follow President Obama's "Now is the Time" gun control agenda. The results are in: Americans Back Obama's Proposals to Address Gun Violence. Most Proposals Have Bipartisan SupportSupport for Proposals by Political Affiliation click on table for sharper image Discussion My personal check list is sure to disappoint some Republicans, some Democrats, some Independents, and some Libertarians. So be it.
Cost Effective Analysis From a cost-effective standpoint, the items that would likely do the most good, at the least cost, were the items that had the least support. Items 7, 8, 9, and 4 would not cost a dime. I solidly support all four. I support preparing emergency plans (item 6), but that should not cost a dime either. As worded, I have to vote no. I am fearful that the most supported idea (item 1) will end up costing too much in relation to the benefit. I voted yes, for now, but I need to see details of the plan as well as realistic measures of the cost. As it stands, I am solidly in favor of 4 things that will not cost a dime. Those 4 items will not trudge on any conceivable rights either. I support an additional item, with reservations. Once again, if Gallup asked taxpayers if they support increasing taxes to pay for these programs, I bet the answers would be different and the order of priorities would be different. How Helpful Are Concealed Weapons? Inquiring minds may be interested in a post by Barry Ritholtz How Helpful Are Concealed Weapons? Click on the link to see a couple of interesting videos. Note that Barry took a lot of flak for his post. Read the comments and see for yourself. I side with Barry. The most sensible comments came from Disinfectant and GreenTom. Disinfectant says ... It is amazing, but not at all surprising, that so many watch these videos and utterly fail to understand the message. The point is simple and should be uncontroversial – unless you are well trained, defending yourself with a gun in a live scenario is very difficult; your body and mind are not prepared for this. It doesn't matter how often you go to the gun range or how heroic you imagine yourself to be. Going through the motions of protecting yourself, getting the gun out, then firing at the target (and ONLY at the target) does not happen naturally.GreenTom says ... I'd agree this is kind of staged, but more rigorous studies show the same thing. Study below reports that people carrying weapons are about 5 times more likely to be shot than those who don't carry. It's funny, I predict a lot of negative reactions to this comment, but does anyone really claim that escalating a robbery to a gunfight isn't a risky move?Investigating the Link Between Gun Possession and Gun Assault Here is the study cited by GreenTom: Investigating the Link Between Gun Possession and Gun Assault ...Individuals in possession of a gun were 4.46 times more likely to be shot in an assault than those not in possession. Among gun assaults where the victim had at least some chance to resist, this adjusted odds ratio increased to 5.45.I commend Barry for taking a controversial stand on a controversial topic. Most bloggers stay away from controversial subjects, generally out of fear of offending readership. As my readers know full well, I will not shy away from controversial topics either. By the way, gun control may not seem like an economic topic but it is. Many of Obama's proposals will require significant expenses to implement down the road (even if hidden initially). Reflections on Libertarianism I am certain to be charged by some of violating Libertarian beliefs. However, libertarianism is not anarchy. Rules exist to protect property. Reasonable legislation will prevent some of these incidents, and no amount of legislation will stop all of them. Moreover, common sense says that encouraging average citizens or teachers to walk around with assault weapons or concealed guns (the actual remedy proposed by some gun advocates) would cause a lot of needless deaths and property damage as a result would-be John Wayne types trying to be heroes, but accidentally killing innocent bystenders. Reflections on the Constitution As passed by Congress, the Second Amendment reads "A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed." As ratified by the states, the Second Amendment reads "A well regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed." Notice the dispute over commas. Also note how the concept of a "well regulated militia" is completely dropped by gun advocates. The Supreme Court did rule the Second Amendment protects an individual's right to possess a firearm, unconnected to service in a militia. Regardless, the rights to bear arms to protect oneself certainly can and should have limits. To clarify that its ruling does not invalidate a broad range of existing firearm laws, the majority opinion, written by Justice Antonin Scalia, said: "Although we do not undertake an exhaustive historical analysis today of the full scope of the Second Amendment, nothing in our opinion should be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons and the mentally ill, or laws forbidding the carrying of firearms in sensitive places such as schools and government buildings, or laws imposing conditions and qualifications on the commercial sale of arms." One does not need bazookas, hand grenades, missiles, assault weapons, armor-piercing bullets, or 10-clip magazines to defend one's person or one's house. Those items all need to be outlawed. Gun advocates argue we need to enforce existing laws, while arguing against every law on the books. Meanwhile, state-to-state variations in laws make enforcement a nightmare, at best. Now Is The Time Obama says "now is the time". I agree but only where costs are low and benefits high. There are four (perhaps five) items out of nine on the president's agenda that meet that criteria. My top three ideas are 7, 9, and 8 (pretty much in that order, but possibly 9 ahead of 7 which I will leave to the experts). Unfortunately, Republicans are likely to fight 7 and 9 (if not 7, 8, 9, and 1). Given the sad state of Congressional compromises, Republicans may even agree to waste taxpayer money on programs simply to appease voters who clearly want something done. Unfortunately, the end result is highly likely to be a combination of the most money spent for the least benefit. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com "Wine Country" Economic Conference Hosted By Mish I am hosting an economic conference in April, in Sonoma, California. Please consider attending. Click on Image to Learn More |
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