Must-Reads

While I grade midterms:

• Bruce Bartlett says he'd do it again.

• Yves Smith decomposes Alan Blinder (and provides a much better-than-avaerage account of "nationalization" in the bargain).

Holiday

We're off to San Francisco for a bit of opera and to catch up with some friends. We planned this months ago but it couldn't be more convenient: here on the flat of the Sacramento Valley floor, we are under an inversion layer of smoke for an unexampled ring of forest fires in the foothills and mountains that surround us on three sides--and we are only at the beginning of the fire season. We've mostly stayed hunkered down inside the air conditioning for the last couple of days. I did venture forth to the super market last night, where I saw a couple of people wearing breather masks. So, a good time to go gaze at the Pacific. Probably no more posting until Monday but meanwhile, you can follow the fires here. Thanks for the pointer to a somewhat ambivalent Yves Smith.

Still Around and Making a Lot of Sense

Back when bankers were riding high, Martin (is that guy still around) Mayer looked pretty much like an old fuddy duddy. Not that banks are imploding, Martin (is that guy still around?) may be coming back into fashion. Via Yves Smith, here’s a wonderful interview of Mayer from Institutional Risk Analytics, in which he is sober and tactful enough not to say “I told you so”—but to give the reader plenty of leeway to figure it out for himself. Here’s a money quote:

… there are a certain number of tested Wall Street scams that have been forbidden by regulation. If you can find a way to use technology to revive one of these scams, then you are an innovator and you get paid extremely well for the five years these techniques work, and then you go away.

Makes me remember my friend Bernie who said there were two ways to make partner at his hubba hubba Wall Street firm in the old days: one was to invent a new security, and nobody remembered what the other one was.