:LPE:

Mary Walsh of the NYT reports on new accoutning rules for financial statement disclosure of pension and benefit funds in the US. These rules require more accurate recognition of future costs of pension, health and welfare plans. This serves to increase liabilities on the balance sheet, which makes a company look less valuable (well, which accurately represents how much less valuable the company is than it previously looked).

It is important for accurate valuation, but you can be sure that this will put more pressure on companues to reneg on their pension promises. As stated before in this space, the typical reaction is to cut pension and benefit plans, which is the equivalent of a massive reduction in wages. Link.

Carlitos a caballo

Originally uploaded by Simon Archer.

More in the life of Abuelo posts. This one recovered from his late father Don Beto’s home, on a recent trip. This is Abuelo as child gaucho, a caballo.

From a friend with too much time on his hands at Hahvahd. These kinds of spatial representations can be so much fun.

Exxon Secrets

This is a fun one. Link.

A comment on same by a Guardian writer Daniel Davies. His argument is that, while goods markets may benefit from trade liberalization, capital markets don’t. It’s an interesting position for those who are defending national corporate ownership. It fits part of the work I’m doing on the role of securities markets in influencing the political economy of corporate decision-making. If capital markets in general are weak influences on that decision-making, and liberalized ones no more, then there are stronger reasons to insist upon national ownership (that is, private or public ownership but with requirements that ownership be national in character). Link. See previous posts on economic nationalism (Link) and several on the hollowing out of corporate Canada.

So, John Allemang of the Globe has been trying to read a book and write a review a day. I’m not sure why, but it is difficult to believe. Link.

ECRI - Economic Cycle Research Institute

Another attempt at estimating the business cycle…for which, to my knowledge, no accurate predictor exists. Always fun to speculate, however.

From a friend who tracks worker-owned sources. The Working World.

So, in a wierdly-timed announcement, the US Federal Reserve says it will no longer track the M3 — the widest measurement of the money supply that they track (the others are M1 and M2: for a basic description of each see money supply).

The reason? The M3 does not say anything that the M2 doesn’t already tell them, so why go to the extra expense? Maybe so, maybe no. The M2 and M3 have diverged at times. More likely, this reflects a shift in focus, from watching money supplies to watching only inflation indicators (the European Central Bank watches both). Funnily enough, the inflation indicators that cause significant anxiety at the Fed are wages and employment. So overseas holdings of US investors (one of the components not in the M2) are not something the Fed wants to track.

The timing is funny because the U.S. has once again seen a massive expansion in credit the past five years and on reliance on foreign capital to finance a trade deficit (which is larger than the public account deficit).

Link.

Barlos

Originally uploaded by Simon Archer.

Abuelo, quein hay choros.