If my tone betrays a certain disdain for this account, that is because, in my view, central bankers have used it to harm people and blame the victims. The policy regime that we have crowed over from Volcker through Bernanke and Trichet “naturally” led to the conclusion that (1) central banks should stabilize inflation, so that predictable price adjustments are mostly sufficient to keep things in equilibrium; and (2) that central banks ought to focus especially on stabilizing the stickiest prices, leading to distinctions between overall and “core” inflation. Among the stickiest prices, of course, is the wage rate. In practice, from the mid 1980s right up through 2008, the one thing modern central bankers absolutely positively refused to tolerate was “inflation” of wages. God forbid there be an upcreep in unit labor costs, implying that a shift in the income share away from capital and towards workers. Central banks jack up interest rates right away, because what if the change in relative prices is a mistake? We wouldn’t want that to stick, oh no no no no no. But when the capital’s share of income shifted skyward while deunionization and globalization sapped worker bargaining power? Well, we learned the meaning of an asymmetric policy response.

So many of the typical finance/econ blogs that I read are worrying too much about politics and not enough about the economy. The paragraph above is from a blog that presents intelligent ideas from a perspective that I feel is underrepresented lately.

It has been so long since I have written anything here that I almost forgot the username for this blog.

Earlier today, I read The Market Ticker about credit cards attempting to add new annual fees for people who pay off their bills every month without conducting a certain number of transactions.

Once I read the article that Denninger linked, it was even worse than I thought because one of the examples of "good" credit cards was an offer that I received last week. Essentially Fidelity says they are giving you 2% cash back. The fine print on that says you get $0 in cash back until you have conducted $2500 worth of transactions.

While fees and interest rates have gone up to keep credit card companies a float, the rewards programs have gone way down. The other week, I was reading a blog set up by Discover Card so people could talk about how much they enjoyed their 5% cash back program that you have to opt-in to every three months. While there, I learned that the 5% rewards will be cut to 2% as of next year, and you get some very low cash back on other purchases. I had missed that earlier this year they had increased their cash-out amount from $20 to $50. The Discover Card blog was very educational and made me realize that I was not a particularly satisfied customer.

Anyway, this is just a warning to everyone else to look at your credit card bills and re-read the fine print because changes are going on before the new credit rules that Congress passed take effect.

Here are more details on the changes to Discover Card and the CARD act that is going into effect. If you are a person who does carry a balance on your card, these changes will likely be good for you.

When I woke up this morning, everyone seemed upset about AIG giving out retention bonuses that will keep the best and brightest from walking away from a zombie a corporation.

Forbes released its list of billionaires which got a lot of people upset because a Mexican drug lord by the name of Joaquin "El Chapo" Guzman Loera joined its list. How do you estimate the wealth of a drug lord? Other interesting things about the list of billionaires is that it shrank to 793 from last year's 1125 after last year's financial crisis. Russia was particularly hard hit because of its dependence on oil for its wealth. The number of billionaires under 40 shrank from 50 to 18. Last year's youngest billionaire, the 24-year-old founder of social-networking website Facebook, Mark Zuckerberg, did not make this year's list.

Here is a long article about AIG being a black hole. If in accounting, black means that you are profitable and red means you are not, should it be a red hole?

I found this article interesting. It is about Laura Pendergest-Holt who was arrested for lying about Stanford. What I find most interesting is that she was at the Mississippi University for Women and graduated in 1995. I interacted with some of the students at the university at the time, and they seemed like a strange sad lot, girls who had to settle for Social Clubs because they couldn't have sororities. I am not sure if this was because the college was so small or because it was historically a women's college (accepting men since 1983(?))

Okay, I understand that most of the financial bloggers are male and as such they will do (foolish), manly things. One thing that has been bothering me for a while has been the comparison of the behavior of the government or the actions in the economy to rape. Both Karl Denninger and Mish Shedlock have done this in the past couple of days. This is both highly offensive and intellectually lazy. Seriously guys, there should be a Godwin's law for rape.

In having an online discussion, if you have to resort to comparing your opponent or his ideas to Hitler you lose. If you have to compare something to slavery or rape you also lose. It is not that hard. In no way is the economic collapse or anything the government does comparable to rape. We are not talking about the acts of specific government employees or political officials here.

Here is Shedlock misusing rape.

Denninger is a repeat offender.
Here, here, and most offensively here.

In the last one, Denninger is asking "Are you tired of your children being raped?" Maybe I find this most offensive because recently I had to learn about all the potential negative consequences of children being raped. Recently, there was a study about the brains of victims of abuse physically changing. The test was conducted on the brains of various people who had committed suicide. Children who have been raped may experience eneuresis or encopresis in addition to various other psychological issues. In short, nothing that Denninger is talking about merits this type of comparison.

This cartoon explains why the market reacted to Tim Geithner's economic plan the way it did.

In other words, I agree with commonreader. The DABA Girls are fake.

I should have written this when everyone was getting laid off a month or two ago.

1. You should organize your spices and your socks.
2. Eat healthier.
3. You should watch many seasons of Law and Order.
4. You should get some form of exercise.

Today, the dentist was telling me that it seemed that most people were laid off in the past couple of months, and things are starting to look up. I hope she is right.