Germany has to decide what to do with Spain -- and soon.
I've got some shocking news for you. Things are going badly in Europe.
The big story is Spain's borrowing costs. On Thursday yields on 10-year Spanish bonds touched the dreaded 7 percent level -- which they have continued to flirt with on Friday. What's so important about 7 percent? Two things. First, banks have to post more margin -- i.e., cash -- if yields cross that threshold when they use bonds as collateral. A downward spiral awaits. Banks might sell the bonds off because they aren't as useful -- leading to higher yields and worse margin requirements. And so on, and so on. But it doesn't even really matter. Borrowing costs of 7 percent are already ruinous for Spain. As Brad Plumer pointed out, inflation is so low in Spain that its economy would have to grow at a 4-5 percent clip to not fall into a debt trap with yields that high. But Spain isn't growing at 4 or 5 percent. Spain is in a recession.
So yes, it's fair to call the week-old bailout of Spain's banks afailout. The putative bailout has 1) Added to Spain's public debt, 2) Made that debt riskier, and 3) Likely made it harder for Spain to pay back its debt. The euro zone can hardly take any more such successes.
But the financial apocalypse isn't here yet. Just close. Spain relies on a lot of shorter duration debt to fund itself too. The borrowing costs on those bonds are still semi-manageable -- for 2-year bonds, if not 5-year bonds. Still, Spain is far too close to insolvency for comfort. Unless the European Central Bank (ECB) pushes down yields, Spain will need another bailout. And soon.
That brings us to the most interesting euro development of the past week. German bonds started to sell off -- before rallying recently. This was ... odd. German bonds never sell off when things look bad in euroland. The opposite. There's usually a flight to safety to them. If there's one euro zone country that won't go bankrupt, it's Germany. But things are getting so bad in Spain that Germany might have to cross the financial Rubicon it's so far been unwilling to countenance: joint debt.
Spain is too big to save. But that's almost irrelevant. The bailout status quo is toxic. It hasn't solved anything for Greece, Portugal or Ireland. It won't for Spain either. Southern Europe needs to reduce its debt and reduce the interest it pays. Bailouts do the latter, but not the former. But mutual debt -- so-called "eurobonds" -- would work. There's a problem. Germany doesn't want to give southern Europe a credit card with no limit. Germany wants there to be a very specific limit. That's where the so-called "sinking fund" comes in. The idea here is that each country would dump all of its debt in excess of 60 percent of GDP into a single fund. Each country would have to pay its own portion back over 20 years, but Europe would issue debt jointly.
This isn't a fiscal union. It's not an open-ended bailout of Spain by Germany. It's a one-time bailout of Spain by Germany. It's not perfect, but it could work. And it would cost Germany a good chunk of change. That's why Germany's borrowing costs surged at the beginning of the week. Of course, Angela Merkel gave her best Herman Cain impersonation later -- Nein, nein, nein! -- which is when German borrowing costs receded.
Germany will have to make up its mind soon. Markets don't have much patience for its Hamlet act. Time to decide whether the euro will be or not be.
The long-running cartoon’s representation of Judaism was one of the first on television.
Growing up in south London, and then in the largely Catholic town of Manhasset on Long Island, I didn’t encounter many families who looked, sounded, or behaved like mine. In England, my experiences were limited to either my mother’s family, who were all Orthodox Jews, strictly observing the Sabbath and keeping kosher, and to the families of my classmates, who were invariably all gentiles. In Manhasset, I didn’t even have the Orthodox to relate to. So one of my main comforts in both places came from the Pickles family, who—with its big-haired, neurotic, doting mother and its old-world, Yiddish-mumbling grandparents—instantly made me feel at home. It also helped that I could spend time with the Pickles family whenever I wanted; after all, they were on TV.
It’s a paradox: Shouldn’t the most accomplished be well equipped to make choices that maximize life satisfaction?
There are three things, once one’s basic needs are satisfied, that academic literature points to as the ingredients for happiness: having meaningful social relationships, being good at whatever it is one spends one’s days doing, and having the freedom to make life decisions independently.
But research into happiness has also yielded something a little less obvious: Being better educated, richer, or more accomplished doesn’t do much to predict whether someone will be happy. In fact, it might mean someone is less likely to be satisfied with life.
That second finding is the puzzle that Raj Raghunathan, a professor of marketing at The University of Texas at Austin’s McCombs School of Business, tries to make sense of in his recent book, If You’re So Smart, Why Aren’t You Happy?Raghunathan’s writing does fall under the category of self-help (with all of the pep talks and progress worksheets that that entails), but his commitment to scientific research serves as ballast for the genre’s more glib tendencies.
The president’s unique approach to the White House Correspondents’ Dinner will surely be missed.
No U.S. President has been a better comedian than Barack Obama. It’s really that simple.
Now that doesn’t mean that some modern-day presidents couldn’t tell a joke. John F. Kennedy, Ronald Reagan, and Bill Clinton excelled at it. But Obama has transformed the way presidents use comedy—not just engaging in self-deprecation or playfully teasing his rivals, but turning his barbed wit on his opponents.
He puts that approach on display every year at the White House Correspondents’ Dinner. This annual tradition, which began in 1921 when 50 journalists (all men) gathered in Washington D.C., has become a showcase for each president’s comedy chops. Some presidents have been bad, some have been good. Obama has been the best. He’s truly the killer comedian in chief.
A professor of cognitive science argues that the world is nothing like the one we experience through our senses.
As we go about our daily lives, we tend to assume that our perceptions—sights, sounds, textures, tastes—are an accurate portrayal of the real world. Sure, when we stop and think about it—or when we find ourselves fooled by a perceptual illusion—we realize with a jolt that what we perceive is never the world directly, but rather our brain’s best guess at what that world is like, a kind of internal simulation of an external reality. Still, we bank on the fact that our simulation is a reasonably decent one. If it wasn’t, wouldn’t evolution have weeded us out by now? The true reality might be forever beyond our reach, but surely our senses give us at least an inkling of what it’s really like.
Two scholars discuss the ups and downs of life as a right-leaning professor.
“I don’t think I can say it too strongly, but literally it just changed my life,” said a scholar, about reading the work of Ayn Rand. “It was like this awakening for me.”
Different versions of this comment appear throughout Jon A. Shields and Joshua M. Dunn Sr.’s book on conservative professors, Passing on the Right, usually about people like Milton Friedman and John Stuart Mill and Friedrich Hayek. The scholars they interviewed speak in a dreamy way about these nerdy celebrities, perhaps imagining an alternate academic universe—one where social scientists can be freely conservative.
The assumption that most college campuses lean left is so widespread in American culture that it has almost become a caricature: intellectuals in thick-rimmed glasses preaching Marxism on idyllic grassy quads; students protesting minor infractions against political correctness; raging professors trying to prove that God is, in fact, dead. Studies about professors’ political beliefs and voting behavior suggest this assumption is at least somewhat correct. But Shields and Dunn set out to investigate a more nuanced question: For the minority of professors who are cultural and political conservatives, what’s life actually like?
Nearly half of Americans would have trouble finding $400 to pay for an emergency. I’m one of them.
Since 2013,the Federal Reserve Board has conducted a survey to “monitor the financial and economic status of American consumers.” Most of the data in the latest survey, frankly, are less than earth-shattering: 49 percent of part-time workers would prefer to work more hours at their current wage; 29 percent of Americans expect to earn a higher income in the coming year; 43 percent of homeowners who have owned their home for at least a year believe its value has increased. But the answer to one question was astonishing. The Fed asked respondents how they would pay for a $400 emergency. The answer: 47 percent of respondents said that either they would cover the expense by borrowing or selling something, or they would not be able to come up with the $400 at all. Four hundred dollars! Who knew?
“A typical person is more than five times as likely to die in an extinction event as in a car crash,” says a new report.
Nuclear war. Climate change. Pandemics that kill tens of millions.
These are the most viable threats to globally organized civilization. They’re the stuff of nightmares and blockbusters—but unlike sea monsters or zombie viruses, they’re real, part of the calculus that political leaders consider everyday. And according to a new report from the U.K.-based Global Challenges Foundation, they’re much more likely than we might think.
In its annual report on “global catastrophic risk,” the nonprofit debuted a startling statistic: Across the span of their lives, the average American is more than five times likelier to die during a human-extinction event than in a car crash.
Partly that’s because the average person will probably not die in an automobile accident. Every year, one in 9,395 people die in a crash; that translates to about a 0.01 percent chance per year. But that chance compounds over the course of a lifetime. At life-long scales, one in 120 Americans die in an accident.
...isn't something that can be done on campus. It's an internship.
When I was 17, if you asked me how I planned on getting a job in the future, I think I would have said: Get into the right college. When I was 18, if you asked me the same question, I would have said: Get into the right classes. When I was 19: Get good grades.
But when employers recently named the most important elements in hiring a recent graduate, college reputation, GPA, and courses finished at the bottom of the list. At the top, according to the Chronicle of Higher Education, were experiences outside of academics: Internships, jobs, volunteering, and extracurriculars.
What Employers Want
"When employers do hire from college, the evidence suggests that academic skills are not their primary concern," says Peter Cappelli, a Wharton professor and the author of a new paper on job skills. "Work experience is the crucial attribute that employers want even for students who have yet to work full-time."
One Nashville pastor has a plan to help those without permanent shelter: building 60-square-foot houses with no bathroom, kitchen, or electricity.
NASHVILLE—Around the time that Vanderbilt University released the results of alarge-scale study outlining the most effective solutions to homelessness, Pastor Jeff Obafemi Carr was moving into a 60-square-foot house with no bathroom, kitchen, or even a sink. Carr’s idea was to temporarily leave behind his wife and five kids to live in the tiny house, which looks like a tool shed, to raise $50,000 to build more such homes for the homeless.
After two months living in the home, Carr had raised $66,967—enough to build six. The buildings are now set up, on wheels, in the backyard of the Green Street Church on Nashville’s east side, part of a sanctuary that also houses homeless people living in tents who moved from anencampment in one of Nashville’s parks that recently closed.
After the successful Allied invasions of western France, Germany gathered reserve forces and launched a massive counter-offensive in the Ardennes, which collapsed by January. At the same time, Soviet forces were closing in from the east, invading Poland and East Prussia. By March, Western Allied forces were crossing the Rhine River, capturing hundreds of thousands of troops from Germany's Army Group B. The Red Army had meanwhile entered Austria, and both fronts quickly approached Berlin. Strategic bombing campaigns by Allied aircraft were pounding German territory, sometimes destroying entire cities in a night. In the first several months of 1945, Germany put up a fierce defense, but rapidly lost territory, ran out of supplies, and exhausted its options. In April, Allied forces pushed through the German defensive line in Italy. East met West on the River Elbe on April 25, 1945, when Soviet and American troops met near Torgau, Germany. Then came the end of the Third Reich, as the Soviets took Berlin, Adolf Hitler committed suicide on April 30, and Germany surrendered unconditionally on all fronts on May 8 (May 7 on the Western Front). Hitler's planned "Thousand-Year Reich" lasted only 12 incredibly destructive years. (This entry is Part 17 of a weekly