The web site, The Baseline Scenario, provides resources to understand the current global financial and economic crisis.

The first item on the web site, Global Crisis Orientation, suggests four ways for getting the most out of the site.

Today there was a webcast of Simon Johnson’s class on the global crisis at the Sloan School of Management at MIT.  A recording will be available to download later in the week, probably on Thursday.

There was some tutorial information at the beginning of the class to explain some of the issues in the crisis.  In particular, I learned some facts about CDOs (collateralized debt obligations) that I wish I had understood months ago.

The members of the class had diverse backgrounds in industry, finance, real-estate, and government from many countries around the world. The information and points of view  that they contributed to the discussion was most enlightening.

Thanks to RichardH for letting me know about the webcast in time for me to view it live.

In the description for the Senate Budget Committee hearing at which he was supposed to testify today, the listing is Dr. Simon Johnson — Senior Fellow at the Peterson Institute for International Economics.

According to the book Obama’s Challenge: America’s Economic Crisis and the Power of a Transformative Presidency by Robert Kuttner,

Peter G. Peterson, the onetime secretary of commerce under Richard Nixon and billionaire former partner of the Blackstone Group, a private  equity firm, has written four books over the past two decades bemoaning the cost of entitlements and forecasting disaster.  Peterson recently endowed the Peter G. Peterson Foundation with a personal gift of a billion dollars, about half of his windfall from his sale of Blackstone just before the markets crashed

Kuttner finds Peterson’s view on entitlements profoundly naive and misleading.

I do not know how this association affects the Peterson Institute for International Economics.

As I was posting this, I was imagining my feelings if the discussion had been about a think tank funded by George Soros.  Maybe I am over-reacting to Pete Peterson.

Finally someone was present on This Week to correct George Will’s misreading of history.  One of the reasons I stopped watching This Week was the presence of Sam Donaldson to pretend he had knowledge of the economy when in fact he was a complete ignoramus.  Cokie Roberts doesn’t add anything to the “mix”.

If it hadn’t been for Huffington Post, I never would have known about this episode of This Week. A comment on Huffington Post led me to Brad DeLong’s posts.

Brad DeLong in his post, Lessons from the Great Depression Blogging, provides some nice backup for Krugman’s position.

In the above DeLong post he has a link to his original post, What a Change! “The Week” Gives Airtime to an Expert, about the Krugman appearance on This Week.

The New York Times has a story Deregulator Looks Back, Unswayed.  You can see comments on this story on Huffington Post.

He just can’t seem to understand why every American doesn’t have a PhD in economics so that they could be on an equal footing with him.

I can see him as one of those mortgage brokers.

Customer:

I can’t afford a mortgage with those high interest rates.

Gramm the broker

Have I got a deal for you. Half the standard interest rate for the first few years.
It’s called an ARM mortgage.

Customer:

What happens after that?

Gramm the broker

The interest rate triples, but you’ll be able to refinance with a new ARM mortgage.

Customer:

I don’t know, it sounds too risky to me.

Gramm the broker

Trust me, I have a PhD in economics. Would I steer you wrong?

Now he is blaming predatory borrowers for the problems that occurred. He had no idea it would come to this.

Apparently the reporters on this story were cowed by Gramm’s credentials and his domineering personality.  All they can do is report it as a one side says this and the other side says that.  They haven’t got a clue as to what may be true and what may be more snake oil from the master snake oil salesman.  (Is that too many metaphors in one post?)

As long as I am asking who people are, I thought I would add this one about Rahm Emanuel.

Rahm Emanuel and Arab Perceptions is an article by an Arab-American about his experience of Rahm Emanuel. I think it says a lot about Emanuel’s style and a lot about the author of the article.

The Hussman Funds founder, John P. Hussman, Ph.D., has an article on the funds’ website about the current stock market. Its title is How Low, How Bad, How Long?

This interesting article was brought to my attention by the Investment Quality Trends newsletter.

The article gives you lots of numbers to ponder to describe the assumptions that are safe to make about the market’s future without predicting exactly any of the elements in the title.

The other topic that I found interesting in this article was the last paragraph about how to and how not to handle the home mortgage foreclosure crisis.  This paragraph discusses an idea similar to what I described in a previous post, Greenberg et. al. Solution to Real Estate Bubble.

The following sentence is from Hussman’s article:

Any solution that provides for a reduction in mortgage principal, without tying that reduction to some amount of surrender of future property appreciation – will immediately encourage mass delinquencies and foreclosures, as homeowners compete for what would, in effect, be free money.

I suppose this post could have been made in my Investing Forum, but I thought it of enough general interest to post here.

According to a story on Huffington Post, Obama Names Valerie Jarrett Senior White House Advisor. The story on HuffPo is rather brief but the links in the story and in the comments more than make up for the brevity.

Particularly enlightening is the DailyKos article So just who is Valerie Jarrett?

The DailyKos article had a link to an interview with Jarrett conducted by Katie Kouric.

The intellectual depth that Obama and his advisors would bring to the executive branch is one of the things that attracted me to Obama in the beginning. So far there have been few, if any, disappointments along these lines.

There are more videos at parodyandson.blogspot.com.

Andy Borowitz has written a piece called Bush in Race Against Time to Wreck Country.

Since this article is on Huffington Post’s Politics section instead of their 23/6 Humor section, then we should evaluate this as serious commentary.  Looking at Bush’s actions of late, it certainly seems like Borowitz has it figured out.

Can the economy last until January 20? When you are in a nightmare, it is sometimes hard to realize that things will be better when you wake up.

The Washington Post has a story, Bailout Lacks Oversight Despite Billions Pledged, which I suppose has many interpretations depending on your world view.

For the true conservatives among us, I suppose the lesson could be about the pitfalls of letting the government do economic things.

For the anti-Bush among us, I suppose the lesson could be that competence in the executive branch still matters.  I had mixed feelings about writing that last sentence, but here is how I came to justify it in my own mind. Congress imposed some very difficult deadlines to set up the oversight operation.  It might be ok to let these deadlines slip a little if one could trust in the competence of the executive branch.  So while Congess has not yet lived up to its obligation to keep a watch on the executive, it wouldn’t be such an issue if it were an executive branch run by someone who has shown he is trustworthy and competent.

Reading the Huffington Post web site comments on this story makes me wish I had known about the C-SPAN coverage of the hearings.

In my previous post Obama’s Challenge: A Transformative Opportunity, I extolled the interview with Robert Kuttner. I said:

Robert Kuttner provides the facts and figures that dispel the notion that we don’t have the resources to solve these problems.

Well, I stumbled across a post on another blog called The Only Winning Move written by Joshua Herring. I was stunned at how someone could hear the same interview that I did, and yet come up with such a different reaction. I post the link to the blog just so you too can see how one’s prior convictions can blind you to information (I am sure that is true of me too). I hope that Joshua does a better job of looking for the truth in his PhD studies than he does in the political/economic realm.

Joshua is so sure of his own set of facts, that he couldn’t believe anything that Kuttner said.  If Joshua had to mis-hear what Kuttner said to reconcile with his own inner demons, then that is apparently what Joshua did.

When Joshua says such things about Kuttner as

He happens to know off the top of his head that the debt is $5.6trillion

then you know he is clutching at straws.  Kuttner is being interviewed about a book that he has just written.  Joshua is sure that numbers that Kuttner is using just came into his mind and were not the product of research for the book.