Quotes of the day

What so proudly we watched at the twilight’s last reaming.--Christina Aguilera

Let our government be like that of the solar system. Let the general government be like the sun and the states the planets, repelled yet attracted, and the whole moving regularly and harmoniously in their several orbits.--Delaware’s John Dickinson, to the Constitutional Convention

Let me bring the Great Stagnation, the biosciences revolution, and evidence-based medicine into a single framework.--Mike Mandel

So should Secretary Geithner have called China a currency manipulator? I am ambivalent. It is pretty clear to me that domestic policies within China are at the source of the huge imbalance between production and consumption. High savings rates rarely have to do with culture or personal preferences, as is widely assumed, and a lot to do with policies that affect the balance between production and consumption. After all a nation’s savings is simply its total production minus its total consumption, and to the extent that there are explicit policies aimed at constraining consumption and boosting production, they inevitably affect the savings rate. These policies also inevitably force a rising trade surplus onto the rest of the world.--Michael Pettis

[Meredith Whitney's] summary of a 600-page report to clients prompted a National League of Cities analyst to say she possessed a “stunning lack of understanding.” Other critics called her prediction “ludicrous,” “irresponsible,” “damaging,” and “overreaching.” There’s a huge gap between these descriptions and Whitney’s track record as an analyst. The chasm is so big that it is worth exploring. Something interesting is going unexamined or unexplained. Many of Whitney’s critics have a vested interest in tearing her down. They include competing municipal bond analysts, fund managers who run muni portfolios, financial advisers who sell the tax-exempt securities, and above all, the borrowers who depend on munis to finance their whopping deficits. To all of them she is a big-mouthed, larger-than-life nightmare.--Alice Schroeder

To the extent that complexity is an endemic part of modern financial systems it’s likely that intellectual hazard is also inevitable because it’s also essential that we allocate risk to those most capable of bearing it.--timarr

What is particularly remarkable is that Eugene Fama who might be considered as the high priest of the efficient markets hypothesis had, as his thesis adviser, Benoit Mandelbrot! Indeed, Mandelbrot lamented the fact that his best students decided to overlook the basic weaknesses of the Gaussian foundations of financial theory and became more interested in making money than in seeking the truth.--Alan Kirman

I do love you, but love isn't enough to get me here [to teach this class]. I have to be paid, too.--David Henderson

I had hoped for something better from the new UK government, which had seemed like an improvement over the Blair and Brown (“We know the answers, just double aid”) team.--William Easterly

... investment banks' businesses can be characterized in one of two ways: agency businesses, where the bank acts on behalf of a client to execute a transaction and earns a fee for doing so, and principal businesses, where the investment bank acts as a counterparty to its customer, and earns a profit or loss on a trade. ... But there are hybrid businesses within investment banking, as you might expect from an industry which never discovered a profit-making opportunity it didn't like. One of the most important of these is structured products, in which banks take off-the-shelf and proprietary securities and derivatives and slice, dice, and recombine them into customized instruments that they can then sell to corporations or investors. ... Remember the first time you went to look at houses or apartments with a real estate broker, and he or she called you a valued client? Do you also remember how soon you discovered that real estate brokers work for the seller or landlord, who are their real clients, and that you were just a sucker patsy customer? But no matter the particular circumstances, the economic and transactional roles are clear: if someone is selling you a product or a "solution," you are not a client. You are a customer. ... Some clients are indeed very sophisticated, and those tend to get the best terms and the best price. Most customers are not; they are price takers. But that is true of any market. ... Ladies and Gentlemen, and this is not something that doesn't happen a million times a day in almost every other manufacturing industry around the globe. This is not even capitalism. This is buying and selling, as it has been done since the first caveman traded his extra spear for a cooking pot.--Epicurean Dealmaker

With 13 NFL championships, the Packers—and [Warren] Buffett’s titan [Berkshire Hathaway]—just go to show that on the NFL gridiron and in the business world, teams’ ability to place the right individuals in the right situation—at every link in the chain—is crucial in determining success. This would make Washington Redskins owner Daniel Snyder the Steve Case of the NFL. They pursued goals with relentless ambition armed with a war chest of capital, but failed to employ adequate foresight and discipline, leading to a series of flops. Neither has many highlights to point to over the last decade; it is likely that given the opportunity, each would make different decisions. Maybe not Snyder, though. On the other hand, the New England Patriots’ leadership can only be compared to the Goldman Sachs machine. With unrivaled success throughout the boom years of the last decade, both have approached media with unequaled aloofness. And, between a Pats assistant taping opponents in violation of league policy and Goldman’s obvious penchant to milk both sides of a deal, each has had their accountability and ethics brought into question over and over. Now—with intense scrutiny on banker pay, and Tom Brady approaching the latter portion of his career—it remains to be seen whether either will be able to maintain their competitive stranglehold. The Minnesota Vikings? Enron.--Jonathan Marino