“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.
Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.
Follow us on Twitter @StarsHollowGzt
New York Times Editorial Baord: Betting on Default
Imagine a lender demanding that you miss a payment. That is the situation described in a recent article in The Wall Street Journal. In 2013, GSO Capital Partners, the debt-investing arm of the private equity firm the Blackstone Group, refused to renew a $122.3 million loan to the Spanish gambling company Codere unless it delayed paying interest on other existing debt. Why? It turns out that GSO had placed a bet that Codere’s existing debt would not be paid on time. When, lo and behold, the payment was late, GSO collected on its bet. [..]
The Dodd-Frank financial reform law was supposed to curb speculation in swaps. But as The Journal has reported, hedge funds are increasingly using swaps to wager on whether weak firms will live or die. RadioShack, the troubled consumer electronics retailer, is one of several prominent examples. In December, RadioShack’s total debt came to about $1.4 billion, but swaps outstanding on the performance of the debt totaled $23.5 billion. Similarly, J.C. Penney, the ailing department store chain, had total debt of some $8.7 billion, but swaps outstanding on the debt totaled $19.3 billion. [..]
The next crisis will differ from the last crisis in its origins and effects. But it is probably safe to assume that sooner or later, poorly regulated credit derivatives will again play a role in damaging the economy.
Edward D. Kleinbeard: A Republican Ruse to Make Tax Cuts Look Good
As Republicans take control of Congress this month, at the top of their to-do list is changing how the government measures the impact of tax cuts on federal revenue: namely, to switch from so-called static scoring to “dynamic” scoring. While seemingly arcane, the change could have significant, negative consequences for enacting sustainable, long-term fiscal policies.
Whenever new tax legislation is proposed, the nonpartisan Congressional Budget Office “scores” it, to estimate whether the bill would raise more or less revenue than existing law would. [..]
The Republicans’ interest in dynamic scoring is not the result of a million-economist march on Washington; it comes from political factions convinced that tax cuts are the panacea for all economic ills. They will use dynamic scoring to justify a tax cut that, under conventional scorekeeping, loses revenue.
When revenues do in fact decline and deficits rise, those same proponents will push for steep cuts in government insurance or investment programs, because they will claim that the models demand it. That is what lies inside the Trojan horse of dynamic scoring.
It has been just over 50 years since U.S. Surgeon General Luther Terry released the groundbreaking report, “Smoking and Health.” The report concluded, “Cigarette smoking is a health hazard of sufficient importance in the United States to warrant appropriate remedial action.” The tobacco industry intensified its campaign to defend smoking, funding bogus groups and junk science. Now, a similar war on the truth is being waged by the fossil-fuel industry to deny the science of climate change.
“Doubt is our product,” states a 1969 memo from the tobacco giant Brown and Williamson, “since it is the best means of competing with the ‘body of fact’ that exists in the mind of the general public.” Brown and Williamson was a member of “Big Tobacco,” along with Philip Morris USA, R.J. Reynolds, Lorillard Tobacco Company, U.S. Tobacco, Liggett Group, and American Tobacco. In 1994, the CEOs of these seven companies lied before Congress, claiming that nicotine was not addictive-even though secret research conducted by their corporations proved they knew otherwise. The image of the seven executives with their right hands in the air, swearing an oath to tell the truth, became an iconic image of a deceitful, deadly industry.
Joe Conason: GOP, Stop Making Excuses for Scalise
The unsavory story of Rep. Steve Scalise, Louisiana Republican and House majority whip, should serve as a clear warning to the leaders of the Republican Party. They need to ask why their message attracts some of the most despicable elements in American society-and why they can’t effectively reject those extremists.
Despite many fervent vows of “outreach” and “inclusion” by top Republicans, they keep making the wrong choices. Both House Speaker John Boehner and House Majority Leader Kevin McCarthy have expressed their confidence in Scalise despite his “mistake.” And the excuses they now offer on behalf of the man chosen for the third-highest position in their congressional caucus are rapidly eroding.
Michael Brenner: Know When to Fold ‘Em
Barack Obama reportedly takes pride in his skill as a card player. Poker is the prime game of politics and politicians. The president’s record suggests that he is something less than its master. The list of those who have fleeced him is a long and varied one. It includes: the Republican Congressional leadership (habitually); the Wall Street barons; Big Pharma; the Intelligence chiefs; Robert Gates; David Petraeus; Leon Panetta; Bibi Netanyahu (numerous occasions); King Abdullah (Saudi Arabia); Hamid Karzai; General Abdel Fattah el-Sisi; Recep Tayyip Erdogan; and Bashar Assad. Indeed, there is only one group of players whom he beats regularly — the “liberals” whose gambling instincts have been honed in endless games of rainy-day Scrabble.
So, some advice on how to raise his game is in order. The popular country-and-western ballad The Gambler can serve as a rich source of pithy poker axioms. [..]
Barack Obama reportedly takes pride in his skill as a card player. Poker is the prime game of politics and politicians. The president’s record suggests that he is something less than its master. The list of those who have fleeced him is a long and varied one. It includes: the Republican Congressional leadership (habitually); the Wall Street barons; Big Pharma; the Intelligence chiefs; Robert Gates; David Petraeus; Leon Panetta; Bibi Netanyahu (numerous occasions); King Abdullah (Saudi Arabia); Hamid Karzai; General Abdel Fattah el-Sisi; Recep Tayyip Erdogan; and Bashar Assad. Indeed, there is only one group of players whom he beats regularly — the “liberals” whose gambling instincts have been honed in endless games of rainy-day Scrabble.
So, some advice on how to raise his game is in order. The popular country-and-western ballad The Gambler can serve as a rich source of pithy poker axioms.
Recent Comments