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    Daily Digest – May 11

    by Davos

    Monday, May 11, 2009, 3:01 PM

  • Struggling Americans Forced To Work Extra-Dimensional 4th Shift (H/T PineCarr)
  • Broke Movie Posters, with super quotes. One, two and three
  • Broke, Movie Trailer
  • Smart Grid City (Video)
  • What If It Doesn’t Work?
  • Average Hourly Earnings Growth (Chart)
  • Obama begging Saudia Arabia for help! In Secret meeting
  • ABC News, Elderly (Video)
  • A Case Of Gangster Government? (Video)
  • Office of Management and Budget (Link found on Peter Peterson’s blog)
  •  Enormous Settlement Failures In The ETF Market (H/T PineCarr)
  • "Rats Outperform Humans in Interpreting Data"
  •  A few A(H1N1) Links Dr. Henry Niman’s Map 3,204 U.S. Cases as of this wrtitng, A(H1N1) Current Timeline, CDC Cases


Struggling Americans Forced To Work Extra-Dimensional 4th Shift (H/T PineCarr)

CINCINNATI—According to a report released Monday by the U.S. Department of Labor, skyrocketing consumer prices coupled with stagnant wages have forced many Americans to work a fourth shift in another dimension in order to make ends meet.

The extra-dimensional shift, which occurs on a time axis at right angles to that of normal reality, allows American workers to supplement their incomes, while still maintaining the morning, afternoon, and overnight shifts they need in order to stave off bankruptcy.

"The maximum 24 hours of possible work time offered by our plane of existence is simply not enough to provide a living wage in the current economic climate," Labor Secretary Elaine Chao wrote in a letter introducing the report. "These difficult circumstances have compelled 76 percent of the American workforce to seek additional hours in an alternate space-time dimension, where more competitive pay can help them to avoid years of crippling debt."

Many cash-strapped citizens such as Glenn Vernacini, a master welder at the GE aviation plant in Evendale, OH, have welcomed the opportunity to pad their income by working extra shifts in lateral time, only to return at the exact same moment they left. Vernacini, however, admitted that his regular trips to the alternate universe have taken their toll.

"It’s hard, but what other option do I have?" Vernacini said. "Having every atom in my body split and retranslated into a different form of matter just to make a few extra bucks isn’t exactly my idea of fun, but my family needs to eat."

"I age an extra eight hours every time I work the fourth shift, and it’s really starting to wear me down," Vernacini continued. "And having to buy a new shirt every time my body is flattened out to 4,000 times its usual surface area is one more strain on my budget that I don’t need."

Some businesses have already installed a rip in the space-time continuum in their break-room areas so that employees can report for work in the other dimension as soon as their Earth shifts end. People who regularly work the fourth shift have reported that the tasks they perform are more or less exactly the same as during their other shifts, though they have to contend with frequent plasma storms and occasionally meet themselves leaving for one shift as they arrive for another, which can be demoralizing.

"The worst part about my job in the other dimension is trying to digest the silica-based food product they serve in the cafeteria," said Thomas Kinney, a line inspector who takes on a fourth shift three days a week at the Coca-Cola bottling plant in alternate Atlanta, GA. "It’s probably the most painful part of working a fourth shift. That, and not getting to see my kids grow up." 

Broke Movie Posters, with super quotes. Onetwo and three

Broke, Movie Trailer

Smart Grid City (Video)


What If It Doesn’t Work?

To begin with, the powers-that-be are trying to keep the sinking ship afloat until a) the economy somehow manages to turn around of its own volition; b) the vast array of ailing businesses figures out some other way of plugging the holes in their balance sheets and overcoming the breakdowns in their business models; or, b) the whole mess can be dumped into somebody else’s (e.g., the next Administration’s) lap.

Those pulling — yanking? — the strings are also trying to make use of programming techniques that have long been advocated and employed by "personal development" gurus and neuro-linguistic programming (NLP) experts — that is, get people feeling better about themselves and believing in the vision of good times ahead, and they will act in such a way as to make it happen.

The problem, of course, is if things don’t work out according to plan, and all that time, money, and energy turns out to have been for nought. In "What Keeps Me Awake At Night: Economy Edition," Information Arbitrage addresses this very issue.

Average Hourly Earnings Growth (Chart)

Obama begging Saudia Arabia for help! In Secret meeting

A secret American delegation was sent by US President Barack Obama this week to solicit Saudi Arabian and other Gulf rulers for hundreds of billions of petro-dollars for investment in US and global economic stimulus plans, DEBKAfile’s exclusive Gulf sources report. They came away empty-handed.The chilly welcome received by the delegation, which met finance ministers and the heads of banks in Riyadh and the five emirates, was generated by wide disapproval of the US president’s policy of engagement with Iran. Two other US missions had just been and gone, headed by defense secretary Robert Gates and special adviser to the US secretary of state for South Asia and Gulf affairs, Dennis Ross. Both failed to allay Gulf anger and trepidation over this policy.

Our Gulf sources report that the third delegation, which unlike the first two was unannounced, argued that since US economic recovery was not expected to turn the corner before 2011, Gulf investors still had a unique opportunity to partner the US in helping the world economy out of its doldrums. The general message was that if they Gulf rulers fail to invest in US and international markets at this point, they would miss out on the rewards of the recovery.

Not all the data presented to the Gulf officials matched the figures published in Washington and other western countries. They were informed on the quiet that Federal Reserve Governor Ben Benanke had been "premature" in his optimistic forecast of "slightly positive" growth in the second half of this year, particularly in the fields of banking and construction, and a recovery that will "strengthen" next year – even though US Treasury Secretary Timothy Geithner said Wednesday, May 6, it was "a good, independent, credible forecast."

The Gulf states were urged to help the global economic back on its feet because, according to US data, the Gulf Cooperation Council (GCC) would by the year 2018 rank as the world’s fifth-largest economy after the US, China, Japan and the EU. “As major players in the world economy, you cannot stand on the sidelines,” they were told.

President Obama’s discreet approach figured in general terms at the GCC meeting of heads of state and finance ministers meeting in Riyadh Wednesday, May 6, which was convened to establish a regional central bank. But no decisions were taken.According to our sources, the negative vibes between the Gulf and Washington over the Obama administration’s policy of favoring Tehran have made these Arab rulers doubly wary of responding to the US president’s appeal for a Gulf stake in US and global economic recovery


ABC News, Elderly (Video)

$34,000,000,000,000.00 obligations and not a cent in Medicare.

A Case Of Gangster Government? (Video)

Office of Management and Budget (Link found on Peter G. Peterson’s blog)

Enormous Settlement Failures In The ETF Market (H/T PineCarr) 

Dear Ms. Morris:

Here are my comments on the proposed rule to reduce regulatory burdens on the issuance of ETFs. In general, the proposal to simplify the process for issuing ETFs is a great step forward and such reform is long overdue. However, there is a serious problem in the ETF market that the Commission should address as it standardizes procedures for creating new ETFs. The large and protracted settlement failures in the trading of ETFs indicate that there is something wrong, either in the design of the ETF product or in the structure of secondary market trading.

The Commission should address the enormous settlement failures in the ETF Market.

When a seller fails to deliver a security on the normal settlement date, an owner of the security is effectively forced into making an involuntary stock loan to the seller [Nice way of explaining it]. This violates one of the basic property rights of an owner, the ability to exclude others from the use of the property. In addition, it may deprive the buyer of the ability to earn stock lending revenue, as well as voting rights. The buyer may even have to pay higher tax rates on substitute dividend payments, which are taxed differently than normal dividends.

In response to numerous complaints, the Commission adopted Regulation SHO to reduce settlement failures. Under Regulation SHO, the Commission mandates special rules for securities in which failures to deliver exceed a certain "threshold" of size and length of failure.

As of this writing, over 100 ETFs and ETNs are on the Regulation SHO Threshold List.1 These settlement failures affect some of the largest ETFs as well as the smallest. For example, the iShares Russell 2000 Index (IWM) experienced over 30 trading days in the year 2007 in which over 10 million shares failed. These failures were for over $1 billion worth of shares each day. Similarly, the original SPDR Trust (SPY) experienced at least 10 trading days in 2007 with settlement failures of over a billion dollars per day.

Inclusion on the Regulation SHO Threshold List often makes it hard for investors, particularly retail investors, to engage in short sales. Many brokers will not take the effort to locate shares in order to execute short transactions in Threshold stocks. I have been personally told by my broker that shares were unavailable for shorting some ETFs on the Threshold List. Ease of short selling is one of the attractive features of ETFs, and thus the large settlement failures diminish one of the important features of this important product class.


Respectfully submitted,

James J. Angel
Georgetown University
McDonough School of Business
Washington DC 20057
(202) 687-3765

"Rats Outperform Humans in Interpreting Data"

Maybe we should put rats in charge of foreign aid research, by William Easterly: Laboratory experiments show that rats outperform humans in interpreting data… The amazing finding on rats is described in an equally amazing book by Leonard Mlodinow. The experiment consists of drawing green and red balls at random, with the probabilities rigged so that greens occur 75 percent of the time. The subject is asked to watch for a while and then predict whether the next ball will be green or red. The rats followed the optimal strategy of always predicting green (I am a little unclear how the rats communicated, but never mind). But the human subjects did not always predict green, they usually want to do better and predict when red will come up too, engaging in reasoning like “after three straight greens, we are due for a red.” As Mlodinow says, “humans usually try to guess the pattern, and in the process we allow ourselves to be outperformed by a rat.”

Unfortunately, spurious patterns show up in some important real world settings, like research on the effect of foreign aid on growth. Without going into any unnecessary technical detail, research looks for an association between economic growth and some measure of foreign aid, controlling for other likely determinants of economic growth. Of course, since there is some random variation in both growth and aid, there is always the possibility that an association appears by pure chance. The usual statistical procedures are designed to keep this possibility small. The convention is that we believe a result if there is only a 1 in 20 chance that the result arose at random. So if a researcher does a study that finds a positive effect of aid on growth and it passes this “1 in 20” test (referred to as a “statistically significant” result), we are fine, right?


 A few A(H1N1) Links Dr. Henry Niman’s Map 3,204 U.S. Cases as of this wrtitng, A(H1N1) Current TimelineCDC Cases

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