Regulatory risk

Megan blogs Berkshire Hathaway:

Does Warren expect to take cramdowns on his financial services investments? Buffett replies that these things are institution-specific, and there's quite a lot of underlying common equity left in his holdings, so there's no reason to worry about a cramdown. But this whole line of question highlights something for me: regulatory risk is a gigantic concern this year. Every third question seems to be about some major government project, and what sort of havoc it might wreak on his business. Last night, I went to dinner with some investors, where a long conversation about the difference between investment in gambling ensued. Warren Buffett followers aim to invest, not gamble. But when the government is involved, it's all gambling--none of the people I've spoken to, and (I'd wager) virtually none of the people in the arena, have any particular insight into the workings of the government processes. Hell, these days, the people I speak to at Treasury and the Fed don't seem all that certain about what they're going to do next. An investment in Goldman Sachs and Wells Fargo is a bet that, first, the world economy won't really collapse, and second, the government won't get mad and take your money

Uncertainty is awful for capital markets—and it's difficult to place bets with any certainty when politicians are choosing winners and losers.

Could we please fire the UAW, too?

(meme) GM CEO resigns at Obama's behest

Everything I've read from economists (as well as everyone's favorite or most hated MBA blogger) points to the UAW stifling innovation at GM, Ford, Chrysler vis a vis other companies with plants in right to work states.

In principle I'm fine with workers organizing, but the sad reality is that they often do so very poorly. Instead of pitting management vs. labor, why not give all employees equity options? Then they can have some ownership in the company and work hard to make it better, instead of just seeking to leech ever-costlier health benefits off it once they retire.

The saddest thing about unions like the UAW is that they allow retired workers to vote in contract negotiations, thus turning once stellar companies like GM into giant health care and pension providers with a side business in building crappy cars.

By contrast, you simply can't blame auto executives for much if any of their problems. Do you think they wanted to run the company into the ground? Bollocks, their hands have long been tied by forced unionization contracts.

For instance smaller fuel-efficient cards like the Ford Focus are actually built and sold at a loss. These small cars are more labor-intensive than larger vehicles, which places these unionized companies at a serious competitive disadvantage. That's why the Big 3's most profitable business has been building SUVs and trucks like the F-150 — these models use relatively more parts than labor.

Fetal foreclosure

Slate:

If you stop paying a surrogate mother, what happens to the fetus? [...] Through in vitro fertilization, a fetus can have two mothers: a genetic one and a gestational one.

[...] the companies were supposed to pay the surrogates. Now, the Times reports, payments have stopped. In fact, the New York Times adds, "SurroGenesis told clients on March 13 via e-mail that their money was gone. Lawyers say that as much as $2 million may be missing, with some couples losing as much as $90,000."

[...] Surrogates aren't mercenaries. But they do need to be paid for their sacrifices. With every week that passes, they endure more of pregnancy's burdens. They submit to exams, tests, and other procedures. They take on serious medical risks. They forgo activities that might harm the fetus. They lose the ability to commute to and work at other jobs. They have bills to pay. At least one abandoned surrogate says she has received an eviction notice.

If you stop paying your surrogate, she needs to quit and find another job, just like any other worker. But surrogacy isn't like any other job. The only way to quit a pregnancy is to abort it.

Vorzimer says none of the surrogates are quitting. Many "will not be reimbursed for their out-of-pocket expenses lost wages or even have their medical bills paid," he reports, but "every single one of them has committed to moving forward."

Annals of anti-abortion fundamentalism

NYT:

A 9-year-old girl who was carrying twins, and whose stepfather is suspected of raping her, underwent an abortion on Wednesday despite complaints from Brazil’s Roman Catholic Church. The stepfather has been jailed since last week, the police said. Abortion is illegal in Brazil, the country with the most Roman Catholics, but judges can make exceptions if the mother’s life is in danger or the fetus has no chance of survival. Fatima Maia, director of the public university hospital where the abortion was performed, said the pregnancy, which was in its 15th week, posed a serious risk to the girl, who weighs 80 pounds. But Marcio Miranda, a lawyer for the Archdiocese of Olinda and Recife in northeastern Brazil, said the girl should have carried the twins to term and had a Caesarean section. “It’s the law of God: Do not kill,” he said in comments reported by the newspaper O Globo.

Megan, "Worst Story Ever"

The friend who twittered this nailed it when he said that this story is so revolting, it's hard to know which bit of revoltingness to blog. I don't think I can improve on that, so offered without further comment.

Update, UNRR:

The case [..] has taken another turn. Not content with merely condemning the abortion, the Catholic Church in Brazil is now excommunicating the doctors involved and the girl's mother. According to the BBC, the situation has "has attracted criticism from women's rights groups in Brazil." Only from women's groups? If so, that's pretty sad.

Feisty as ever

From Yes, Andrew, Sarah Palin is a disaster:

Andrew may not have heard, but there have been a few interesting developments in the financial markets over the last few weeks. As an economics blogger, I was regretfully forced to forgo full time devotion to the vice presidential race and turn to more trivial matters.

Touché...go read the whole post.