Apple and Slavery

Apple presents this as a positive story:

Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.

“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”

You can’t wake prisoners up at midnight and demand they work for 12 hours in the US. In China this is apparently just another day.

Greece default official

Both Fitch and S&P have now publicly stated that Greece will default:

Rating agency Fitch said on Tuesday that Greece would default on its debt, although it said that such a default was likely to take place in an orderly manner.

“It is going to happen. Greece is insolvent so it will default,” Edward Parker, Managing Director for Fitch’s Sovereign and Supranational Group in Europe, the Middle East and Africa told Reuters on the sidelines of a conference in the Swedish capital. “So in that sense it shouldn’t be a surprise to anyone.”

The Fitch comments come after Moritz Kraemer, head of Standard & Poor’s rating agency’s European sovereign ratings unit, said on Monday Greece would default shortly on its debt obligations.

Fitch may be convinced that the default will be orderly. There is no one on earth that can know what the actual outcome will be. AIG was the very picture of strength while all the monolines were getting killed in 2008. The simple fact that a Western sovereign is defaulting will have unknown ramifications for years to come.

Bil Gross and US Treasury “Risk Free” status

New disclaimer on PIMCO site:

A “risk free” asset refers to an asset which in theory has a certain future return. U.S. Treasuries are typically perceived to be the “risk free” asset because they are backed by the U.S. government. All investments contain risk and may lose value.

Idiot of The Year: Matthew Yglesias

In a stirring buzzer beating performance, Matthew Yglesias has turned in the year’s dumbest article: Happy Days Are Here Again!Don’t believe the naysayers: An economic recovery is right around the corner.

What will this recovery look like in concrete terms? Total bank credit, which collapsed during the crisis, is growing again and will keep growing. That will make it easier for Americans to buy new cars and reverse the four years of growth in the average age of America’s passenger vehicles. Families will also invest in other kinds of durable goods—refrigerators, washing machines, etc.—that they’ve been hesitant to upgrade or replace. The housing bust, meanwhile, has been followed by an epic construction slump that’s actually left us with a shortage of homes. But every downward tick in the unemployment rate is another twentysomething moving out of his parents’ basement, stimulating a return to a more normal level of construction. Multifamily housing starts are already up 80 percent over the past year to accommodate the likely coming flood of renters, and there’ll be more to come once people have more cash in their pockets.

This increase in economic activity will boost state and local tax revenue and end the already slowing cycle of public sector layoffs. Re-employment in the construction, durable goods, and related transportation and warehousing functions will bolster income and push up spending on nondurables, restaurants, leisure and hospitality, and all the rest. Happy days, in other words, will be here again.

To rebut this we will simply point out the line “left us with a shortage of homes”. 

European Economic Policy

“The economic policy of all countries in the European Union seems to be based on the plan that they give loans to each other and then live off the interest.”

Source unknown.

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