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A meme popular in many circles, both left and right, is that Chinese holdings of US Treasury debt are a problem for the USA. Expressions include "the Chinese own us and our children" and "The Chicoms can ruin us any time."

I'm not saying that it's not a problem (heck, excessive debt is always a problem), but how exactly are these specific holdings a problem? So I'd like to play a doomsday scenario or two. I'll be the Fed/Tresury, and you be the Chinese Politburo/Central Bank. You have $1 trillion in T-bonds. Make yourself a problem.
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Pensions for all in UK market’s big DC shift

Now that automatic enrolment has become the centrepiece of UK pension reform, decent retirement incomes should no longer be exclusive to company veterans and the well-off.

New Law Authorizes Changes to the TSP

Back in June, the President signed a new law — the Thrift Savings Plan Enhancement Act of 2009
(P.L. 111-31, Division B, Title I) — which brings new benefits to many TSP participants and their
heirs. [...]

Automatic enrollment. Starting next spring, new Federal civilian employees will automatically
make payroll contributions of 3% to the TSP. Their agencies will send their contributions to
the TSP along with an additional 4% of their pay (Agency Automatic (1%) and 3% Matching
Contributions) each pay period, unless the employee opts out of contributing or elects to contribute
more or less. This will give new employees a chance to start saving early, receive agency
contributions (if FERS), and achieve potentially greater retirement savings.
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James Taranto blogs at WSJ:
One of the advantages of a market-based medical system is that countervailing interests keep one another honest. Sure, the insurance companies want to cut costs, but providers of medical goods and services have incentives that militate in the opposite direction--and, one hopes, disinterested government regulators keep everyone honest. In a socialized health-care system, by contrast, the government is all those special interests, and you can forget about counting on it to keep itself honest.

Speaking of which, check out this report in the Los Angeles Times:

Congressional Democrats' intensifying efforts to pay for their healthcare overhaul and provide more relief for consumers are threatening to unravel a White House deal with the pharmaceutical industry and turn one of Washington's most powerful lobbies against the legislation. Drug makers, which have already spent $110 million lobbying Congress this year, are preparing to make a stand in the Senate, where Majority Leader Harry Reid (D-Nev.) is working to unveil a healthcare bill this week. And senior administration officials, including White House Chief of Staff Rahm Emanuel, are warning members of Congress not to antagonize the deep-pocketed industry at a time when a major victory appears to be within reach, according to Democratic aides.

Do you trust your health to the Obama administration? To the drug companies? If you answered "yes" to both these questions, you're even crazier than if you answered "yes" to one of them.
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So this is not news, but it was to me. Like most large retailers, Costco Wholesale has its own private label - Kirkland Signature. We've been buying KS batteries and the like for years. But the last time I visited Costco , I dropped by their wine & spirits section, and was surprised to see Kirkland Signature Single Malt Scotch Whisky.

What a concept.

Well, normally you can't tell the manufacturer of a generic item - if it's a branded manufacturer, they omit their name because they don't want to dilute the brand, and if it's a non-branded manufacturer (like American Home Products, the largest producer of dozens of staple consumer goods), they don't put their name on the products either, because it won't tell anyone anything. But on closer inspection, the KS Single Malt bottle does say "18 years old, by Macallan / Sherry casks". For $60, it's not a bad deal, either.

At home I looked at another KS item, a large bag of chips, and it turned out that this was also a brand-name item. Curious - Costco is remaking the generics business.
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A new report finds that medical innovation boosts life expectancy, but doesn't cost more

"About half of all growth in health care spending in the past several decades was associated with changes in medical care made possible by advances in technology," declared a Congressional Budget Office (CBO) report last year. "Health care economists attribute about 50 percent of the annual increase of health costs to new technologies or to the intensified use of old ones," writes bioethicist Daniel Callahan in his new book, Taming the Beloved Beast: How Medical Technology Costs Are Destroying Our Health Care System. Conventional wisdom holds that the nation is facing a massive health care bill thanks to our use (and potential overuse) of pricey new treatments and technology.

But is it true that expensive high-tech medicine is to blame for rising health care costs? Read more... )

Cost cop Callahan has a solution to the alleged problem of escalating technological costs: Adopt the methods used by European universal government-funded health care systems:"They use—among other tools—price controls, negotiated physician fees, hospital budgets with limits on expenditures, and stringent policies on the adoption and diffusion of new technologies." In other words, stifle innovation.

"Cutting the use of technology will seem wrong—even immoral—to many," Callahan admits. Well, yes. And if Lichtenberg is right, slowing technological progress in medicine wouldn't save money, but it definitely would kill more people.

Ronald Bailey is Reason magazine's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is now available from Prometheus Books.

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One of the greatest benefactors of humanity ever, Dr. Norman Borlaug, is dead at 95 (cancer complications).

Norman Ernest Borlaug (March 25, 1914 – September 12, 2009) was an American agronomist, humanitarian, and Nobel laureate, and has been called the father of the Green Revolution. Borlaug was one of only five people to have won the Nobel Peace Prize, the Presidential Medal of Freedom and the Congressional Gold Medal. He was also a recipient of the Padma Vibhushan, India's second-highest civilian honor.

Borlaug's discoveries have been estimated to have saved over 245 million lives worldwide.

http://en.wikipedia.org/wiki/Norman_Borlaug

Billions Served
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Global Economy Gains Steam

Jobs Still a Worry, but Factory Output Rises in U.S., China, France; Markets Falter

Manufacturing gains in the U.S., Europe and Asia added to evidence the global economy is improving at a faster pace than was widely anticipated a few months ago. For the first time since January 2008, an index based on a survey of U.S. manufacturing purchasing managers crossed a threshold indicating factory output grew. Manufacturing activity in China, France and Australia, among other countries, also expanded in August, separate surveys showed. The pace of contraction in Germany and some other nations slowed markedly.

Stocks pulled back Tuesday, but financial markets in much of the world have been rallying in recent months. Businesses and households have been regaining confidence, and economists have revised forecasts upward.
Read more... )
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Sept. 2 (Bloomberg) -- BP Plc, Europe’s second-largest oil company, reported a “giant” discovery at the Tiber Prospect in the U.S. Gulf of Mexico that may contain more than 3 billion barrels, after drilling the world’s deepest exploration well.

The well is located about 250 miles (400 kilometers) southeast of Houston, the London-based company said today in a statement. It was drilled to approximately 35,055 feet (10,685 meters), greater than the height of Mount Everest.

The latest discovery will help BP, already the biggest producer in the Gulf of Mexico, boost output in the region by 50 percent to 600,000 barrels of oil equivalent a day after 2020. It’s equal to about a year’s output from Saudi Arabia, the biggest exporter in the Organization of Petroleum Exporting Countries, as well as coming close to matching the U.K.’s entire proven reserves.

Entire article here.

They are close to waking the unnamed evil slumbering deep...
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Но соль и спички пока вроде вне опасности :-)
Economic news:

Food Firms Warn Of Sugar Shortage

8/13/09
Food companies warned of a severe shortage of sugar if the Obama administration doesn't ease import restrictions, and threatened price increases and layoffs.

Electricity Prices Plummet

8/12/09
Slack demand for electricity across the U.S. is leading to some of the sharpest reductions in power prices in recent years, offering a break for consumers and businesses.

Fed admits recession is all but over, but employment may take up to 10 years to return to 6%
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The Next Fannie Mae

Ginnie Mae and FHA are becoming $1 trillion subprime guarantors.

Much to their dismay, Americans learned last year that they “owned” Fannie Mae and Freddie Mac. Well, meet their cousin, Ginnie Mae or the Government National Mortgage Association, which will soon join them as a trillion-dollar packager of subprime mortgages. Taxpayers own Ginnie too.

Only last week, Ginnie announced that it issued a monthly record of $43 billion in mortgage-backed securities in June. Ginnie Mae President Joseph Murin sounded almost giddy as he cheered this “phenomenal growth.” Ginnie Mae’s mortgage exposure is expected to top $1 trillion by the end of next year—or far more than double the dollar amount of 2007. (See the nearby table.) Earlier this summer, Reuters quoted Anthony Medici of the Housing Department’s Inspector General’s office as saying, “Who would have predicted that Ginnie Mae and Fannie Mae would have swapped positions” in loan volume?

Ginnie’s mission is to bundle, guarantee and then sell mortgages insured by the Federal Housing Administration, which is Uncle Sam’s home mortgage shop. Ginnie’s growth is a by-product of the FHA’s spectacular growth. The FHA now insures $560 billion of mortgages—quadruple the amount in 2006. Among the FHA, Ginnie, Fannie and Freddie, nearly nine of every 10 new mortgages in America now carry a federal taxpayer guarantee.
Read more... )
The housing lobby, which gets rich off FHA insurance, has long blocked these due-diligence reforms, saying there’s no threat to taxpayers. That’s what they also said about Fan and Fred—$400 billion ago.
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How Green Is Your Crystal Ball?

The National Academy of Sciences tries to predict America's energy future. Again.

The National Academy of Sciences (NAS) recently dusted off its 30-year-old crystal ball and gazed into the future of American energy use. Its findings were released last week in report titled America's Energy Future: Technology and Transformation. The experts on the panel are slightly stoic and guardedly optimistic. In 10 to 25 years—"with a sustained national commitment"—they say, the U.S. will be able to achieve "energy-efficiency improvements, new sources of energy, and reductions in greenhouse gas emissions through the accelerated deployment of existing and emerging energy-supply and end-use technologies." 

This particular mode of divination harks back to a similar effort back in 1980, when the NAS issued a similarly ballyhooed report, Energy in Transition, 1985 to 2010. That report took four years to assemble and involved 350 of America's smartest energy researchers, engineers, and economists. Before we take the new findings too seriously, let's see how 1980's experts have fared three decades on.

Read more... )

As we now know 30 years later, energy prices remained essentially flat and the economy grew at 3 percent. The 1980 report noted that "more rapid economic growth...implies higher energy consumption." Had the assumptions behind the 1980 NAS scenarios been accurate, Americans should be using far more than 130 quads of primary energy by now.

What actually happened? According to the EIA, the U.S. uses just 98 quads of energy today up from around 80 quads in 1980.

The rest at http://www.reason.com/news/show/135213.html
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That lethargic patient known as the American capital market showed signs of life this week. Washington's decision to put away the defibrillator paddles and let nature take its course at CIT Group means that, finally, Beltway physicians have done no more harm. More good news came from Credit Suisse, which sold mortgage-backed securities with no government guarantees and no opinions from the credit-ratings agencies.

That's right, someone has managed to finance mortgages without putting taxpayers at risk. Just as encouraging, it turns out that investors really can analyze bonds not rated by the government-anointed geniuses at Standard & Poor's, Moody's and Fitch. We'll get to the caveats in a moment, but first let's savor that Washington is willing to consider a new course of treatment that includes the freedom to fail, while Wall Street is showing that markets can solve the problem of opaque securities.

Full article at http://online.wsj.com/article/SB124779737373155801.html

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Yisroel Markov

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