Misery loves company

As you probably know, Mexican President Enrique Peña Nieto has invited Donald Trump to a meeting today in Mexico City.  It’s hard to fathom Peña Nieto’s motives for this invitation, except maybe to distract attention away from his plagiarism scandal.  The Twitter-verse has been having a field day with the news.  Here are some of my favorites from this morning (I’m sure there will be more):

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Central Banking Round-up

A couple of interesting papers on the evolution of central banking as well as a fun WSJ piece on how bombastic metaphors have taken over discussions of CB actions.

Calomiris, Charles ; Flandreau, Marc ; Laeven, Luc, “Political Foundations of the Lender of Last Resort: A Global Historical Narrative.” 

“This paper offers a historical perspective on the evolution of central banks as lenders of last resort (LOLR). LOLRs established prior to World War II, with few exceptions, followed policies that can be broadly characterized as implementing “Bagehot’s Principles” : seeking to preserve systemic financial stability rather than preventing the failure of particular banks, and limiting the amount of risk absorbed by the LOLR as much as possible when providing financial assistance. After World War II, and especially after the 1970s, generous deposit insurance and ad hoc bank bailouts became the norm. The focus of bank safety net policy changed from targeting systemic stability to preventing depositor loss and the failure of banks. Statutory powers of central banks do not change much over time, or correlate with country characteristics, instead reflecting idiosyncratic political histories.”


Anne Murphy, “The Bank of England and the genesis of modern management.”

“This paper focuses on the Bank as a site of precocious managerial development. It first establishes that the Bank, by the latter part of the eighteenth century, encompassed the complexities of a large-scale industrial enterprise. It employed a workforce of several hundred. Its workers operated in specialised and coordinated capacities. Its managerial hierarchy was diffuse and dependent on employed men, rather than the elected directorate.  It [the paper] will demonstrate that, although not always applied effectively, the Bank’s senior men did show managerial innovation and skill in training and organising the workforce and were able to make informed decisions which had the potential to improve some of the Bank’s processes.”


Jon Sindreu and Riva Gold, “Bazookas! Sinks! Aggressive Doves! Nobody Loves Silly Metaphors More Than Central Bankers,” WSJ, August 29, 2016.

“Since the crisis, an analysis of the Factiva media database shows, references in monetary-policy articles and blogs to artillery-related words—including bazookas, powder and firing blanks—rose to 7,300 in 2015 from 4,600 in 2010, although that’s down from more than 11,000 in 2011.” 


Time to find a new Tourism Minister

If I were the Ugandan Minister of Tourism, I would have little trouble advertising the country to tourists.  Kevin and I went there several years ago and for anyone who is a fan of wildlife, it is a true paradise.  We saw lions climbing trees, we trekked with chimps, we saw gorillas in the (awesomely and correctly named) Bwindi Impenetrable Forest, we saw an amazing diversity of birds and animals cruising the Kazinga channel.

One thing we didn’t see (thank goodness) was unhygienic mass circumcision of teenage boys.  That is the Ministry of Tourism’s great plan of how to lure more tourists to the country!  Seriously! Lions, no; chimps, no; gorillas, no; adolescent abuse, yes!

Here’s more information:

“The Uganda and Kenya Tourism boards are looking to turn the tradition into an attraction. They have agreed to jointly promote Embalu circumcision ceremonies in Eastern Uganda and Western Kenya. President Yoweri Museveni himself has encouraged this ritual. He said it fits in well with today’s modern society where all men are encouraged to get circumcised for health purposes.”

This might be my favorite line: “Tourism experts intend to market the Embalu festivals across the world using Ugandan embassies in the hope that the ceremonies will bring in additional tourists.”

My take: time to find some new tourism experts!

Here’s a photo we took of our time there:


That would be a lot better for tourism promotion than the following:




Mexican education reform should start at the top

ABC, in a news article yesterday, quoted Trump from January saying about Mexico “We send them practically nothing and Mexico is the new China. I hate to say it. The Mexican leaders are so much smarter than our leaders.” There is so much wrong with that statement that it’s hard to know where to start.  But it’s even more ironic given the recent news out of Mexico about President Peña Nieto plagiarizing almost one-third of his law thesis.

Here’s the Huffington Post on the scandal, “Of the 682 paragraphs that made up the 200-page thesis, titled ‘Mexican Presidentialism and Alvaro Obregon,’ 197, or 28.9 percent, were found to be plagiarized. In a statement, government spokesman Eduardo Sanchez sought to play down the accusation of plagiarism, instead calling the omissions “style errors.” He added that Peña Nieto met all the requirements needed to graduate as a lawyer from Panamerican University.”

I love the government spokesman’s excuse.*  I’ve only seen bits and pieces but as a professor with a lot of experience (unfortunately) of spotting plagiarism, I can assure you that we are not talking about “style errors.”  Nice try though.  I wonder what the higher-up at Panamerican University think about Sanchez’s last statement now that the plagiarism has been revealed!

Compare that to Obama’s educational pedigree (from Wikipedia): “Obama is a graduate of Columbia University and Harvard Law School, where he was president of the Harvard Law Review. He was a community organizer in Chicago before earning his law degree. He worked as a civil rights attorney and taught constitutional law at the University of Chicago Law School between 1992 and 2004.”

Now education does not necessarily equal smarts, but Peña Nieto was not exactly very smart in hiding his plagiarism**, so I’d have to give Obama the big advantage between the two.

*To his credit, he has had a lot to deal with lately (click here for the most recent corruption scandal that EPN is facing)

*See this story in the Atlantic for some examples.  Perhaps my favorite part is the fact that EPN plagiarized a former Mexican president, Miguel de la Madrid.  lol you can’t make this stuff up.


The bureaucratic Olympic creed

First there was the news that Pakistan was sending more officials than athletes to the Olympics: “‘Pakistan contingent will include seven athletes and 17 officials,’ a Pakistan Olympic Association (POA) official told APP.”

and now there is this awesome story about Indian officials behaving badly at the Olympics.   It is aptly titled “India’s Olympians deserve a medal just for putting up with their country’s officials.”  You could probably delete the word Olympians from that title (and replace Indians for India’s) and still have an accurate sentence.

Here are some of the best details:

a. India’s sports minister, Vijay Goel, has been in Rio and has been so rude that he was almost banned from attending events.  Here’s a quote: “‘We have had multiple reports of your Minister for Sports trying to enter accredited areas at venues with unaccredited individuals. When the staff try to explain that this is not allowed, they report that the people with the Minister have become aggressive and rude and sometimes push past our staff.'”  Goel of course was unapologetic and said it was a mere misunderstanding.  Way to represent your country  Mr. Goel.

b. “A nine-member team representing the state of Haryana arrived in Rio ‘to encourage the Haryana players.’ However, the group, led by the state sports minister Anil Vij, has been noticeably absent at key events—even those involving their state’s athletes. Instead they were found sight-seeing and frolicking on Rio’s beaches.”   In addition, many of the Indian delegates flew business class while athletes were relegated to coach.

c. Frugality seemed to be saved only for the athletes, not the officials. Dipa Karmakar, who came in 4th in the vault finals, was not allowed to bring her physiotherapist with her because it was “dubbed wasteful.”  Only when she qualified for the finals did officials react: “the physiotherapist was rushed to Brazil soon after.”  



With friends like this…Philippine edition

Philippines’ President Rodrigo Duterte apparently isn’t too fond of our diplomatic staff. A recent Guardian article notes that Duterte “first came into conflict with US envoy Goldberg on the campaign trail, after he said he wanted to rape a ‘beautiful’ Australian missionary who was sexually assaulted and murdered in a 1989 prison riot in Davao, the city he ran for two decades.”  Wow! Not surprisingly Goldberg and the Australian ambassador were vocal in their criticism of Duterte’s comment.

And now, Duterte has started a fresh row with the US envoy, stating “As you know, I’m fighting with (US Secretary of State John Kerry’s) ambassador. His gay ambassador, the son of a whore. He pissed me off.”

Holy cow, and this is one of our allies!  Washington is apparently asking for clarification of the comment!  Really?  Do they really want that spelled out?

US:  So President  Duterte, when you said a “gay son of a whore” what did you mean exactly?

PD:  Well, let me go into some detail so you can better understand my intention…


Irony Fail 2: Mugabe does it again

President Mugabe of Zimbabwe never fails to provide material for our Irony Fail series.  Yesterday he admonished the Zimbabwean people to respect democracy and not try to overthrow his government with violent means.  Ha!  How did he manage to talk about democracy with a straight face?  Here is his statement:

‘‘If you want to remove the government, wait for elections, not violent demonstrations, that is what democracy dictates.”

Yep, that’s Mugabe alright–advocate of peace and democracy! As Abdul Nassir (@abdulnassir21) tweeted in response, “Hilarious times to be alive.”

Macro Finance, Cochrane style!

John has a fun survey piece up now called Macro Finance where he reviews and evaluates several contending theories for cleaning up problems in the basic Consumption CAPM framework.

The theories are:

  1. Habits (Campbell and Cochrane1999a,1999b).
  2. Recursive utility (Epstein and Zin1989).
  3. Long run risks (BansalandYaron2004;Bansal,Kiku,andYaron2012).
  4. Idiosyncratic risk (ConstantinidesandDuffie1996).
  5. Heterogeneous preferences (Gaˆrleanu and Panageas 2015).
  6. Rare Disasters (Reitz1988;Barro2006).
  7. Utility nonseparable across goods(Piazzesi,Schneider,andTuzel2007).
  8. Leverage; balance sheet; “institutional finance” (Brunnermeier 2009, Krishnamurthy and He 2013, many others).
  9. Ambiguity aversion, min-max preferences,(HansenandSargent2001).
  10. Behavioral finance; probability mistakes(Shiller1981,2014).


I will use this in my PhD macro class this fall as a nice extension to the asset pricing stuff in Romer’s text. Thanks, JC!


habit move




Mrs. Diego Rivera, the dabbler

From Maria Popover’s BrainPickings, I found this gem of a headline from a 1933 newspaper:


I’m not sure the writer could be more patronizing if he tried. Love the word “dabble.”

And in more recent Frida Kahlo news, the Guardian reports that you can have the famous painter herself cook you an enchilada in a Mexico City market stall.  Ok, perhaps not the actual Frida Kahlo, who (1) is long dead, and (2) was not a cook. Now if you wanted someone to criticize an ugly, cheating husband, she would have been your woman!