His face, a journalist wrote, “recalls almost startlingly one of the portraits of Abraham Lincoln,” a face imbued with “a kind of sad mysticism.”

NYT

Housing has been the sector of the economy with the largest multiplier effect. Whether buying new homes or existing homes, people tend to fill them up with things: new furniture, new appliances, new window coverings.

David Berson, former chief economist at Fannie Mae, current chief economist of PMI Group

I’m right in there with the rest of the cheerleaders, but there are no historical anecdotes, no historical data points to use for this

Lewis Ranieri, the 62-year-old mortgage- bond pioneer who is chairman of New York-based Hyperion Partners LP.

China and a few other central banks have grumbled about the dollar but they don’t have many other alternatives so they keep buying.

Michael Atkin, head of sovereign research at Putnam Investments in Boston, $12b in fixed-income assets

The end of the world appears to have been postponed.

The trouble is, we really have no road maps. The only model is the Great Depression itself. [That] was ended by a very large spending program known as World War II and we don’t really want to repeat that.

Paul Krugman in Helsinki

And that is my case, too. The world is positioned for disappointment. But, in economic and financial matters, the world rarely gets what it expects. Pigou had humanity’s number. The “error of pessimism” is born the size of a full-grown man—the size of the average adult economist, for example.

—James Grant in the WSJ, the editor of Grant’s Interest Rate Observer

George Will rightly takes Yosi Sergant, the NEA, and an August 10th conference call to task for politicizing the NEA. It perhaps signals an exhaustion with the Bush Administration’s attempts to do the same throughout the judicial system and provides an example to be avoided. Will, however, hitches to his complaint one unlikely carriage – a plea for no state funding of art.

Will’s argument goes something like this. Because “art is whatever an artist says it is, and an artist is whoever produces art,” Will imagines the Obama Administration certifying individuals artists on the basis of their politics and, more important, their ability to convey a political message. The NEA would be the ultimate propaganda vehicle. Its directors could recruit an army of “taste-makers” and “artists” to advance Obama’s politics on American culture under the banner of art. Will’s solution: no more art.

Would it were so easy.

There are several problems with Will’s argument, starting with his definition of art. Will is right to point out the controversy around defining art, but does it therefore follow that “almost everything” is art, just as a matter of one saying so? No. I might say something is art, and it may be hard to change my mind, but that doesn’t mean I have changed the mind of anyone else. And so, an artist might say something is art, but they might suffer a similar inability to convince anyone. Likewise, does that mean the NEA can come forward and decree what art is and art is not? It certainly could, but would it matter? Not at all, and it doesn’t mean art is “a classification so capacious it does not classify.” It just means that art is sometimes hard to pin down.

The Justice Potter test provides a simple and more meaningful alternative to defining art. Potter was asked for the definition of pornography – not exactly art, but a concept faced with a similarly perplexing resistance to definition. Potter avoided a specific answer and responded, “I know it when I see it.” Applied to art, Potter’s test claims that in many cases there is a clear distinction between what is art and what is not, but one should expect to be surprised. Somethings that look like art are not, and somethings that look like they couldn’t be art are. In most cases, it’s clear, but on the margin, it can get pretty controversial. And by the way, this isn’t unique to art. We find this phenomenon throughout any subject of judgement, such as the application of law. Will mistakes these controversies on the margin for the whole enterprise.

Administering NEA grants, therefore, is necessarily controversial, but it’s not a vehicle for propaganda manned by lobbyists directed by a political class. The NEA awards grants for art. In many cases, it’s clear what qualifies as art, but in some, on the margin, it’s just plain surprising. And there’s nothing wrong, let alone political, with that. Sometimes they’ll get it wrong, and sometimes they’ll find they’ve gotten right. We have to accept that it will be, at times, controversial, but that doesn’t mean there’s a conspiracy.

Which leaves Will’s final point: why are we even subsidizing art? Our only rationale, according to Will, is “art is a Good Thing, therefore public spending on it is a Good Deed.” He goes on to suggest that one realize the absurdity by replacing the word art with “surfing” or “religion” and recognize that subsidizing art is not much different than subsidizing corn, but “at least we know what that is.”

But is this ad-libs approach to reasoning appropriate? We’re not talking about surfing or religion or corn. We’re talking about culture, civilization, and our enlightened ambition to advance humanity. We’re talking about art, though perhaps, on the margin, surfing and corn.

We need to find ways to bring down that trading friction cost, we need to make sure we’re not being taken advantage of.  Hopefully our counterparties, our dealers, will make less money from us and our clients are going to make more return…There’s no question, you have seen huge profitability in some of these institutions. The widest bid-ask spreads are in fixed income — the more opaque the market, the more money the market makers are making.

Larry Fink on crossing trades internally and cutting brokers out of the loop

China has decided that clean-tech is going to be the next great global industry and is now creating a massive domestic market for solar and wind, which will give it a great export platform.

In October, Applied will be opening the world’s largest solar research center — in Xian, China. Gotta go where the customers are. So, if you like importing oil from Saudi Arabia, you’re going to love importing solar panels from China.

Thomas Friedman

Two handed approach to pay-walls

Spacewar – Video Games in 1972

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