Links of the day

Should Americans Worry About Foreign-Government Holdings of Dollar-Denominated Assets?...nice discussion re China's massive holdings of US debt...the short answer is "no"...

Corruption in pictures

"An Integrity Department investigator visited this school where children were still attending lessons in an overcrowded, thatched hut, while their new Bank-funded schoolhouse - just a few hundred meters away - was being used by a local official to store onions"...check the first link for a photo of the hut...This is why all of Bono's efforts will achieve far less than he thinks. Developed countries have been pouring aid into Africa for decades, and the greater part of that aid has been going to line the pockets of corrupt officials.
I recommend that anyone read "Dark Star Safari" by Paul Theroux. This book is a narrative of his travels through Africa, in large part through countries where he worked as a volunteer in the sixties. His conclusion was that the outlook for Africa is not good, in large part precisely because of the corruption that has taken hold.

Ranieri on the MBS Market: It's Broke...Calculated Risk's summary of a meeting concludes with "Securitization of loans did not, actually, eliminate the risks inherent in property markets; it seems to be capable, in fact, of magnifying those risks"...the key point is that with securitization, the spreading of risk among a large number of stakeholders makes it difficult to get agreement among the stakeholders on how to resolve a default because of conflicting interests and the large number of stakeholders...


Private Equity's Polonius..."Increasingly, activists and private equity have become at odds. This is particularly so in going private transactions. Activists have begun to ask serious questions about auction processes as well as the prices being paid for publicly held firms. "Why," the question goes, "should we sell you this firm cheaply today so you and your private equity partners can make hundreds of millions later when you re-offer it publicly? We are leaving a lot of value on the table. We, and the other public shareholders (activism can be a highly populist pursuit, but only when the institutional shares are already a tight proxy race) are being cheated"...

U.S. Office Vacancy Rates Rise..."if office vacancy rates continue to rise, combined with a significant increase in supply coming this year and next, a further reduction in business investment (especially for structures) is probable"...