The useless "stress test"


As the chart from Calculated Risk shows, Roubini was correct again and unemployment is already worse than the “more adverse” conditions that were supposed to represent the government’s worst case scenarios.

Marriage as investment

It’s interesting to see the various ways that women make use of their physical assets to scam men out of their financial assets. In Western divorce culture, alimony is the vehicle of choice. In Chinese male surplus culture, it’s pre-marital bride prices that serve the purpose:

With no eligible women in his village, Zhou Pin, 27 years old, thought he was lucky to find a pretty bride whom he met and married within a week, following the custom in rural China. Ten days later, Cai Niucuo vanished, leaving behind her clothes and identity papers. She did not, however, leave behind her bride price: 38,000 yuan, or about $5,500, which Mr. Zhou and his family had scrimped and borrowed to put together.

When Mr. Zhou reported his missing spouse to authorities, he found his situation wasn’t unique. In the first two months of this year, Hanzhong town saw a record number of scams designed to extract high bride prices in a region with an oversupply of bachelors.

Obviously, not all women view marriage as a cash cow. But enough women do, in enough disparate cultures, that it should serve as a warning to men to choose their wives on a far more careful basis than they usually do.

European tremors

Stratfor reports on Latvia’s failed bond auction:

On June 3, the Latvian government failed to auction any of its 50 million lati ($100.7 million) of bonds, managing to sell only about 2.75 million lati ($5.5 million) worth of 30-day bonds the following day, which is raising fears that European emerging markets will have to struggle to raise capital for their rising debt…. The Latvian economy is, to put it bluntly, in shambles. Gross domestic product (GDP) is forecast to decline by over 13 percent in 2009.

The conventional wisdom has it that Europe is belatedly being hit by the financial turmoil that struck the States last fall and that the USA has seen the worst. I suspect that what we’re seeing is more akin to water sloshing back and forth in an increasingly turbulent manner, in which case the relative calm in American markets is only temporary. And by “over 13 percent”, Stratfor actually means 18 percent.