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Tuesday, December 11, 2012

Media-Whore D'Oeuvres



"Politico editors Jim VandeHei and Mike Allen today have published what may be the most revealing piece I have ever read about the Washington power elite. The value of the piece is almost entirely anthropological. That is to say, read at face value, it tells the reader almost nothing new. But examined as a cultural specimen, it offers profound insight. The piece reads as if it were written by Upton Sinclair, if he were taken prisoner and trying to smuggle messages out to the world past a particularly literal-minded group of censors. The subject of the piece is Allen and VandeHei’s report that broad agreement exists on the correct policy agenda, as revealed to them through 'conversations we have had over the past three months with top lawmakers, officials, their senior aides and the CEOs who advise and lobby all of them.' The story proceeds to describe the obviously sensible agenda agreed upon by these sources: It is vital to reduce the deficit through tax reform and stingier entitlements, along with more free trade, resource extraction, and liberalized immigration. This is far from the Randian paranoia that has spread among so many millionaires in the Obama agenda. Indeed, I find most of it fairly sensible as policy. What makes the consensus so astonishing, and even nauseating, is the degree to which those who share it show no awareness of their own insularity. Their shared sense of a smart economic growth strategy excludes any monetary or fiscal plan to bring down unemployment through higher consumer demand, a position that commands strong support among economists. Their list of ailments also excludes skyrocketing income inequality and out-of-control carbon emissions. (Though, at the end of a passage extolling the glorious possibility that American oil production will exceed that of Saudi Arabia within a decade, VandeHei and Allen do note, 'No doubt, there are environmental concerns, especially for drinking water.' Well, yes. Also for the future of the human race.) Obviously, the CEOs, lawmakers, and top aides have a shared economic interest in defining the agenda this way. Mass unemployment doesn’t hurt them, and rising inequality helps them." (Jonathan Chait)


"(Nicholas) TALEB: Let me -- first define what fragile is and well, that's fragile is. Fragile is something that doesn't like disorder. It doesn't like volatility, it doesn't like variability. If something happens, it breaks. So probably a very fragile place, needless to say, would be Saudi Arabia or as an example I gave, before the Arab Spring, was Egypt. OK? It has the same regime for 40 years. Something robust doesn't break, doesn't care. And something antifragile never wastes -- has a lot of political volatility. It never wastes an error. Improves -- error -- from error to error. (Fareed) ZAKARIA: So, that's important. So there's -- there's fragile systems, as you say, that are kind of rigid, brittle. TALEB: Exactly. ZAKARIA: Like Saudi Arabia, Egypt before the crisis. Then those robust systems ... TALEB: Exactly. ZAKARIA: ... which are better than fragile, but anti-fragile for you are those that actually view change and volatility as an opportunity.  TALEB: As fuel. Use disorder as fuel. Exactly. So, it's sort of like hydra is the antifragile, symbol of antifragility. Hydra -- you cut one head, two grow back. So, the last thing it needs is for you to harm it. So, we have these three, you know, three categories, visibly. ZAKARIA: Right. Nicholas TALEB: And we know what fragilizes. Top down, Soviet style fragilizes. Bottom up, like Switzerland, guess you are close towards antifragile. ZAKARIA: So, Switzerland is good because it's this commune- based, decentralized political system ... TALEB: Yes. ZAKARIA: Where there's a lot of experimentation?TALEB: Exactly." (CNN GPS)


"The intractability of the problem in Egypt is caused by the presence of three, not two, parties to the current dispute. The first of these parties is the protesters: those demanding a civil state and a proper constitution guaranteeing human rights for all, which the current draft does not. They are women and men, old and young, Christian and Muslim, poor and rich. The second is the state, represented by the three-headed hydra of Morsy, Badie, and Shater. President Mohammed Morsy is the public face of the beast. Mohammed Badie is the Brotherhood's Supreme Guide, whose words address the members of the Brotherhood. Kairat al-Shater is the organization's most powerful man and its most prominent strategist. The panic of these three men introduced the third party into the current dispute. This third party is the hordes of Muslim Brotherhood supporters. They are columns of men -- almost always men -- who are bussed into Cairo from outlying neighborhoods and cities for use as the Brotherhood's foot soldiers. They serve as protesters at one moment, as hired guns at another. The reasons they so obediently follow orders is twofold: First, the Muslim Brotherhood indoctrination method requires absolute faith in the group's hierarchical leadership. Second, those in charge are force-feeding them with hatred of the protesters, and they are correspondingly convinced that those who oppose Morsy's decisions are in fact godless heathens who are also paid foreign agents who want to ruin Egypt and allow men to marry men. (There's a very strange fixation on the matter of gay matrimony within Muslim Brotherhood propaganda I find very puzzling.)  And this is where the problem becomes intractable." (ForeignPolicy)



"In English: you can hold on to your bonds and hope to get paid out in full, if you want — rather than accepting 33 cents on the dollar right now. But be aware: Greece has to do what its official-sector paymasters tell it to do. And if it takes “further steps to put its debt on a sustainable path”, who knows how much money you might end up with when it’s all over. Are you sure you don’t want to just take those 33 cents? Joseph Cotterill makes a good point: with the Greek banks now having been taken out of their bonds, the low-lying fruit for any future restructuring offer is now gone, which means that in any future restructuring, Greece is going to be dealing with hard-nosed hedge funds rather than complaisant domestic banks. That said, Greece might conceivably now have a nuclear option in its back pocket: the comments to Cotterill’s post are full of speculation that Greece might be able to find a way not to cancel the bonds its buying back. In which case it could use its new supermajority vote to cram down a very bad deal indeed on any holdouts. All of which is to say that this buyback deal is increasingly feeling a lot like a second default, just months after the first one. It’s good for the optics of Greece’s debt-to-GDP ratio, and it doesn’t seem to be triggering any CDS. But it’s a useful lesson for any other European countries (Ireland and Portugal are the obvious next candidates) who are thinking about restructuring their private debts. You don’t necessarily need to do the whole deal at once: especially if you are clever in your use of collective action clauses, you can start with a small and insufficient haircut, and then follow it up with a second restructuring a bit further down the road. If your creditors are largely domestic banks, that could work out much better than socking them with one-off monster losses." (Felix Salmon)


"I was having lunch last week at La Grenouille. My lunch guest and I were seated next to two women I know, one a friend. When the other woman went to the powder room, my friend leaned over on the banquette, with a big smile as if she were about to laugh from shock, and said: 'I’m hearing so much gossip.' I told her that lately I'd been hearing a lot of stories about the neighbors too. I said it must be in the air. Or the water. 'So tell us,' I urged my friend who is not what you’d call a gossip, or anything but amazed when she hears about the webs we weave when it comes to deceive. She said, 'She said I could,' referring to her lunch partner who was off powdering her nose. It so happened I knew the couple in the story. I met them when I came back to New York in the early '90s. She was the very wealthy widow of an heir to a famous American manufacturing fortune. With two small children. Forty-ish; and he, mid-twenties. She is a very nice woman, down-to-earth, empathic, simpatico, intelligent, a welcoming hostess, easy to talk to, a good listener and obviously liked people.  I knew about her financial background the way most of her friends knew. Rich husband, the land of eternal trust funds. She handled her widowhood by getting out there and participating in the community. She was active in the charity circuit and a committed philanthropist. She had a big house in town, with a river view, and an estate in Southampton. Nothing pretentious about her, however; nothing. He was ... a kid to these eyes. A proper young man, yes; neatly buttoned up and tied-out, hair slicked back, well-groomed. Maybe in a training program downtown? A bank? An investment bank? I didn’t know, I was guessing and I never asked. At that first dinner party at her (their) house, he stood up after the main course, at one end of the table (for twelve), and gave a long toast to her at the other end. How wonderful and loving she was, he shared; what a great friend, so generous, so kind. And how beautiful, and courteous, and a good mother, and a great friend and the most wonderful woman a man could ever be so lucky to meet. Every time he looked at her over his glass of champagne, he sighed ... She beamed when he spoke, and her lady friends seemed to be pleased to hear of his thrill ... A few years ago, I heard that they’d 'separated,' and that he’d got his real estate license, no doubt planning to use all the 'connections' he’d made in her world to get into high end private residential market in Manhattan. It sounded almost like Junior had grown up and moved out of the house. He also, I was told (not by her), had a new interest: a boyfriend." (NYSocialDiary)


"Sales topped an amazing $1.5 billion at Art Basel, with many wealthy stars lining up alongside the world’s top art collectors to snap up pieces. Former Giants star Jeremy Shockey bought two fiberglass tigers painted by Domingo Zapata for $100,000 each. Zapata was honored at a Hublot event at the SLS Hotel on Friday, and among the 2,000 guests was famed artist Damien Hirst — who was spotted giving Zapata a kiss on the lips. Beyoncé and Jay-Z were also seen perusing the works on show at America’s hippest art fair. We’re told Jay snapped up a $20,000 painting titled 'Everyone’s Scared' by 31-year-old Chicagoan Hebru Brantley, who won the Basel showing as a finalist in the Bombay Sapphire Artisan Series produced with Russell Simmons’ Rush Foundation. We’re told Miami Heat superstar LeBron James’ manager Maverick Carter caught sight of the piece on Sunday and sent a digital message to Jay, who asked Brantley to deliver the work directly to his hotel room later that evening. Sean 'Diddy' Combs took home an Iván Navarro sculpture with the word 'Scream' reflected in a mirrored tunnel for approximately $65,000 from the Paul Kasmin Gallery. Rick Ross bought a $20,000 photo by Richard Mosse called 'Love Is the Drug' Dennis Rodman bought a mixed-media piece by Gym Class Heroes frontman Travie McCoy created from Nike Air Force 1 sneakers. Mega collector Peter Brant was seen escorting Owen Wilson around. Edward Tyler Nahem’s booth, featuring a stunning large Sam Francis painting, drew such notables as Diddy, Kellan Lutz, Donna Karan, Calvin Klein, Tommy Hilfiger, Marcia Cross and Jane Seymour. Over at Jack Shainman Gallery, meanwhile, Will Smith dropped in with seven bodyguards, who sealed off the booth until he was done viewing." (PageSix)


"However understandable his decision, Mario Monti’s announcement of his intention to resign as prime minister will inflict serious, short-term damage. It means his government will come to an end in a premature, probably disorderly and possibly chaotic fashion. Mr Monti told Giorgio Napolitano, the president, on December 8th that he would step down as soon as the 2013 budget was passed. But it looks as if much else his government had been working on in recent months will now not be approved (or, in the case of measures introduced by decree, confirmed) in parliament. Legislation doomed or in jeopardy includes bills on competition, taxation and the simplification of bureaucracy. Another would have put into effect the new constitutional requirement for a balanced budget. Perhaps most importantly, a package of measures to stimulate economic growth is vulnerable – and particularly so because its ministerial sponsor Corrado Passera, the economic development minister, dared to criticise Silvio Berlusconi’s decision to run for prime minister and has become a hate figure for Mr Berlusconi’s followers. Mr Monti’s unexpected move has also dispelled what faint hopes remained of a new electoral law. So Italians will again vote under the same, deplorable arrangements that rob them of meaningful local representation. (Lawmakers are being chosen from closed lists for multi-seat constituencies.) Compounding the atmosphere of uncertainty, it is highly likely Mr Napolitano will himself resign soon. His mandate does not expire until May, but he has said on more than one occasion that it would not be right for him to appoint the next prime minister and then leave his successor to deal with the consequences." (TheEconomist)

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