Mercury Rising 鳯女

Politics, life, and other things that matter

Archive for December 8th, 2009

MEC will like this one

Posted by Charles II on December 8, 2009

(Image from I Can Has Cheezburger)

Posted in guest cats | 3 Comments »

Honduras Coup, Act VI, Day 9

Posted by Charles II on December 8, 2009

In yet another example of the gross hypocrisy going on, the president and council secretary of CONATEL (who are presumably appointed by the coup) refused to obey the orders the Juzgado de lo Contencioso (court of torts), according to pro-coup El Heraldo. Based on comments by Sandra Ponce, Channel 36 says (in stentorian tones) that Miguel Angel Rodas is hours away from going to jail. Unlikely, but they’re having fun saying it.

The US lifted the travel advisory it had placed on Honduras, according to Tiempo. All that crime and narcotrafficking, not to mention the social tension, just vanished!

Channel 36 is on the air.

Human rights leader and head of the Civic Council of Popular and Indigenous Organizations, Berta Cáceres says that the coup was part of a US strategy of domination.

According to Tiempo, the head of the anti-narcotraffic agency, retired General Julián Arístides González was killed in a hail of lead. He was linked to illicit enrichment by the Superior Accounting Court. In a separate incident, Colonel Osiris OConnor was also slain on the highway from Peña Blanca to the Lago de Yojoa. He was a “consultant” for “Security and Cultural Promotion” to Myrna Castro, Pretend Minister of Culture.

Signaling the North-South split that is developing, Tiempo says that Mercosur refused to recognize the elections. Mexico may be trying to edge toward the exits.

Via Adrienne, there is a call for an independent human rights investigation by Amnesty International. S’funny: I thought that’s what Amnesty was supposed to do. In my view, they have left a very heavy burden on the Honduran human rights organizations.

Posted in Honduras, Latin America | Comments Off

The link between easy money and bad investments

Posted by Charles II on December 8, 2009

The following (via Roubini Monitor) paper by Ioannidou et al. might be of interest to those who wonder whether the low interest rates of today might not be creating problems for tomorrow:

We analyze the impact of monetary policy rates on loan risk-taking and pricing. An excellent setting for identification is Bolivia between 1999 and 2003, where the US federal funds rate is the appropriate measure of monetary policy and exogenous to Bolivian economic conditions. We find robust evidence that a decrease in the funds rate spurs the granting of new loans: (1) with a higher probability of default, (2) to non-performing or lowly rated borrowers, (3) at a lower interest rate spread, and (4) especially by banks with more agency problems, suggesting a link from low policy rates to excessive risk-taking.

There are some differences, of course. “Agency problems” in Bolivia might include lending to the bank president’s brother-in-law, which hopefully is not too much of a problem in the US. Also, at present, bank lending to individuals and small businesses is tight because of restrictive bank internal regulation (lending standards). And, as the Grameen Bank has showed, even people who might not look like good risks can be excellent at repayment with proper oversight. But as a general principle, tight money generally means that loans are scrutinized more closely.

Posted in financial crisis | Comments Off

 
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