Ecuador Plays Bond ‘Market for Fools,’ Aberdeen Says

Ecuador Plays Bond ‘Market for Fools,’ Aberdeen Says

June 16 (Bloomberg) -- Ecuador President Rafael Correa “played the market for fools” by defaulting on $3.2 billion of debt six months ago and then repurchasing the bonds at less than 40 cents on the dollar, Aberdeen Asset Management Plc said.

The government’s bonds due in 2015, the only of three global notes Correa kept servicing, rose to an eight-month high today, a day after Standard & Poor’s raised the country’s rating to CCC+, two levels higher than when he defaulted in December. Ecuador has bought back 91 percent of the defaulted bonds due in 2012 and 2030, Finance Minister Maria Elsa Viteri said June 11.

“Ecuador won,” Edwin Gutierrez, who manages $5 billion at Aberdeen and sold his Ecuador holdings before the default, said in a telephone interview from London. Correa’s government “played the market for fools. Remind me never to play poker with that guy,” he said...

http://www.bloomberg.com/apps/news?pid=20601013&sid=aQ7ZViOQQ4mI

How rigged was that election?

http://www.pollster.com/blogs/roundup_analyses_of_fraud_in_i.php

On Happiness

"Tis nothing good or bad
But thinking makes it so"

-Shakespeare

"The great source of both the misery and disorders of human life, seems to arise from over-rating the difference between one permanent situation and another. Avarice over-rates the difference between poverty and riches: ambition, that between a private and a public station: vain-glory, that between obscurity and extensive reputation. The person under the influence of any of those extravagant passions, is not only miserable in his actual situation, but is often disposed to disturb the peace of society, in order to arrive at that which he so foolishly admires. The slightest observation, however, might satisfy him, that, in all the ordinary situations of human life, a well-disposed mind may be equally calm, equally cheerful, and equally contented. Some of those situations may, no doubt, deserve to be preferred to others: but none of them can deserve to be pursued with that passionate ardour which drives us to violate the rules either of prudence or of justice; or to corrupt the future tranquillity of our minds, either by shame from the remembrance of our own folly, or by remorse from the horror of our own injustice."


-Adam Smith

Tied up

One of those things that I hear about all the time but rarely see actual numbers for is tied aid. This is a policy that forces aid recipients to spend their new found money on donor-country goods and services. For USAID tied aid is the law!

Check out this report.

"Under the Foreign Assistance Act of 1961, if a USAID mission wants to purchase goods or services locally, it
must request a waiver of the law on a case-by-case basis."

Typical US dastardlyness.



source: cgdev.org

Rawlsian Justice and Jurgen Habermas

Since Sala-i-Martin insists on teaching us morality during our growth class and does so, in particular, through the teachings of John Rawls, I thought this link might prove interesting. It provides a good overview of Rawls' arguments, including his famous "original position" and "veil ignorance," which are considered the conceptual cornerstones of contemprorary liberal-democratic theory. Moreover, this overview of Rawls is written by another very famous philosopher, Jurgen Habermas. Enjoy...

Trucks

If, like me, you have been wondering how Detroit/The Big Three got into all this mess here is a post for you.

It always struck me as hardly believable that tastes (or environment) in the US were so completely different from the rest of the world that The Big Three would focus production on such monstrosities like the Hummer H1 H2 H3, the Ford F-150, or the Dodge Ram. Sure there is more space and there are wider roads in the US, but come on, these trucks are ridiculous! People must have been buying these things to make up for some sort of genital deficiency!?

This post by Robert Lawrence makes it all quite clear. By utilizing the "what you lack in other stuff, you can make up for with a truck" method of advertising, the clear message of "this truck has balls, so don't worry if you don't", as well as a 25% import tariff on imported trucks to keep the incentive to innovate shrunken, The Big Three penetrated the American machismo psyche with big limp trucks! They simply couldn't keep it up it when oil/credit hit the fan (but now I'm just mixing metaphors).

Great YouTube Source

The Khan Academy on YouTube is a great source of amazingly clear presentations explaining everything from the Geithner Plan to Venture Capital and Capital Markets.

Check it out!!!




They also have great videos on math!


(source: baselinescenario.com)