Desiderata

The Value of the Dollar

– It’s nice to see something on this topic that clearly highlights the relevance of this issue. A piece in the NYTimes contrasts two companies with different outlooks on the value of the dollar versus the remnimbi. PS Brands, an importer of socks from China, wants the dollar to stay high so they can continue to import socks cheaply. Staco Systems, a manufacturer of aerospace electronics, wants the dollar to go lower so their products are more attractive to Chinese buyers. What’s better: an artificially low remnimbi which helps import cheap socks for people without jobs or a higher dollar that supports exports and high-value manufacturing jobs? Hmmmmmm.

Champerty

– That’s a strange old word from the common law. It is the act of an attorney footing the bill for the cost of a lawsuit and taking part of the settlement in return. Champerty was forbidden because – you guessed it – it encouraged lawsuits. There’s a place in the world for contingency agreements (the modern word for legalized champerty), but surely things have gone too far when hedge funds are investing in lawsuits. There’s actually a company called Ardec Funding whose business is to fund lawsuits for a cut of the award. Ardec, in turn, is bankrolled by a hedge fund. God only knows which one. I’m sure they’ve funded some cases with wonderful plaintiffs, but this has got to be the ultimate example of bottom feeding lawyers.

QE2

– This is the cheeky nickname given by the business press to the Fed’s second round of quantitative easing. For the most part the business press said QE2 would lead to the END OF THE FUCKING WORLD in the form of rampant inflation and a swoon in the value of the dollar. So far: “QE2 was supposed to send the dollar down. Instead it’s going up. Interest rates were supposed to go down. Instead they’ve gone up.”

Another example of the business press pushing its own agenda thinly disguised as analysis. But this is an even better example of the fact that economists are making well informed guesses. Keep that in mind the next time you hear an economist saying this or that policy is terrible and will have horrible results, or is great an will have terrific results. They’re just guessing (see our earlier post where they admit that they’re just guest).

Foreclosure Update

– Maybe champerty ain’t so bad after all! Banks are being hit with class action suits targeting their foreclosure processing: you know, robo-signing, bad documents, botched evictions, the usual. The icing on the cake is the RICO suits. Yes, RICO suits against the banks. Couldn’t happen to a better group of people. RICO is a statute that was designed to go after the mob, but was twisted into a way to go after everyone. Why? Because it lets the plaintiff ask for treble (TRIPLED) damages. RICO stands for Racketeering Influenced and Corrupt Organizations, so using it against banks in this instance probably isn’t too much of a stretch.

Remember, the business press is there to support big business so don’t be afraid to question it!