Investing: That Sinking Feeling
Time International
Thursday, Jul. 17, 2008 By Nouriel Roubini and Rachel Ziemba
Early last winter, when the west was suffering the first casualties of the credit crisis, sovereign wealth funds (SWFs) rode to the rescue, providing over $40 billion in capital to some of the largest of the faltering U.S. and European banks. The U.S. government — reluctant to bail out banks directly — welcomed this infusion, even though SWFs are investment arms of foreign governments and American politicians are often suspicious of outsiders acquiring stakes in key domestic assets. So instead of a bailout of financial institutions by American taxpayers, we saw a foreign-funded bailout.
As mortgage losses continued to mount and the credit-crisis snowball rolled on, private equity, with some SWF support, took on the role of recapitalizing regional banks. Yet there's still no end to the crisis in sight. On July 11, U.S. regulators shut down IndyMac Bank, the second-largest largest financial institution to close in U.S. history. If current estimates are right and more losses are coming — Goldman Sachs says U.S. and European banks may need another $200 billion — where's the money going to come from to keep the financial system functioning?

Find the rest of the article here:
http://www.rgemonitor.com/roubini-monitor/253111/who_is_going_to_rescue_the_hundreds_of_busted_us_banks_dont_count_on_suckering_again_the_foreign_governments_the_sovereign_wealth_funds_and_the_biggest_fire_sale_in_the_history_of_humanity

Oil market bill's future dim despite vote

WASHINGTON (AP) — The Senate voted 94-0 Tuesday to move ahead on legislation to curb speculation in oil markets. But any hope of bipartisanship to pass the bill is likely a mirage.
The Senate bill would require the Commodity Futures Trading Commission to set limits on trading in oil markets by investors and speculators and close a loophole that allows speculators trading on the London oil market to escape scrutiny by U.S. regulators

http://www.usatoday.com/money/industries/energy/2008-07-22-oilmarketbill_N.htm


This is an update on where some of the legislation stands for oil spectators, in addition to news on general energy legislation.

Honestly, it doesn't bother me there are some hold ups on legislation, at least this is preventing immediate restrictive policy from being implemented. My only concern is it creates risk not natural to the market.

Op-Ed Contributors
Futures Imperfect
By DWIGHT R. SANDERS and SCOTT H. IRWIN
Published: July 20, 2008
There is no historical evidence that curbing speculation has been effective at lowering commodity prices.

http://www.nytimes.com/2008/07/20/opinion/20irwinsanders.html?ex=1374206400&en=28e47116b01da28b&ei=5124&partner=permalink&exprod=permalink

Freddie Mac and Fannie Mae
The muddle-through approach
Jul 14th 2008From Economist.com
America’s government tries a quick fix for the intractable problems of Fannie Mae and Freddie Mac

http://www.economist.com/daily/news/displaystory.cfm?story_id=11735141&fsrc=nwl

I am curious to hear people's thoughts on how serious the situation is concerning Freddie and Fannie. What will the companies look like in a year out, do you think that the government should have created the situation coined today as "private profits, socalized lossess"?

Cutting Out the Middlemen, Shoppers Buy Slices of Farms
By SUSAN SAULNY
Published: July 10, 2008
A growing number of people are skipping out on grocery stores and instead going right to the source by buying shares of farms — in essence hiring personal farmers.

http://www.nytimes.com/2008/07/10/us/10farms.html?ex=1373428800&en=b190a7c178e98540&ei=5124&partner=permalink&exprod=permalink

Fading Reciprocity: Challenges to Global Rules

Fading Reciprocity: Challenges to Global Rules
Rolf Langhammer5 July 2008

Multilateral trade talks are stagnating while bilateral agreements being signed daily. This column considers why reciprocity seems to have lost its appeal.

http://www.voxeu.org/index.php?q=node/1376

Internalizing the negative spillovers of global warming

While working in the Communications department at The Bush School there was a lot of attention paid to one of our professors , Dr. Vedlitz. He and his team published an article, which was later picked up by the press, that essentially says: the more people know about global warming, the less likely they are to feel concerned about it or do something about it. Clearly, there are a variety of reasons why the survey produced these results, but one is that people feel less responsible the more general or common the problem is. In other words, moral hazard-- global warming is something that is very hard to directly link to individuals and thus people don't personally feel responsible for it.

My question then becomes, how do we get people to act against global warming (assuming this is something you want)? What mechanism would make people feel or want to do something about global warming. Currenlty, it seems that because its "cool" to be green, people are at least attempting to appear green (not using plastic bags, buying at local markets, eating organic, etc-- though these aren't necessarly better activities for the environment). However, I am curious to what other incentive strategies might get people more motivated to actually do things to make them behave more green. My first thoughts are that it must cost more for people to do activities that are not "green" verse those that are. Hence, why for some reasons, I am all about higher gas prices- you are already seeing more people switching car types, and car companies responding. What I would like to see however, in a better effort to interalize the negative spillovers of pollution, but how do you do this? Who pays for the climate changes, and their subsquent costs. Any ideas-- could there be greater efforts to interalize global warming costs, or are the biggest contributors to global warming (the China's and India's) under systems which can stll not afford or are unwilling to afford to do this?

Just thought I stir some thoughts.

The link to a media piece about Dr. Vedlitz article is attached-- I no longer have access to the orginal report.

http://www.usatoday.com/weather/climate/globalwarming/2008-04-07-climate_N.htm