Good morning. Here's some interesting reading to start the week.
"You have a collect call from Bernie Madoff."
New York Magazine has a long profile of Madoff, based mainly on a series of phone conversations between Madoff and the reporter. Includes audio clips.
It is a head trip. ... It feeds your ego. All of a sudden, these banks which wouldn't give you the time of day, they're willing to give you a billion dollars. ... I kept telling myself that some miracle was going to happen or that I was going to be able to work my way out of it. I just didn't know when that was.
"If we were stupid ... we were going to pay ..."
Warren Buffett's annual letter to shareholders is out. Here's what he has to say about the loans made by Berkshire's Clayton Homes division:
Our borrowers get in trouble when they lose their jobs, have health problems, get divorced, etc. The recession has hit them hard. But they want to stay in their homes, and generally they borrowed sensible amounts in relation to their income. In addition, we were keeping the originated mortgages for our own account, which means we were not securitizing or otherwise reselling them. If we were stupid in our lending, we were going to pay the price. That concentrates the mind.
"The Tyrant Tax"
The New Yorker's James Surowiecki on economic stagnation in the Middle East:
In Egypt, at least twenty-five per cent of young workers are jobless. Inflation, even before the recent spike in food and fuel prices, has been a persistent problem throughout the region, and corruption is endemic. The autocracies of the Arab world have been as economically destructive as they've been politically repressive. ...
What the region needs is less crony capitalism and more competition. What it may get is political reform accompanied by economic stasis. When it comes to solving people's economic woes, toppling the tyrants could turn out to be the easy part.
For more:Listen to our podcasts "The Difference Between Egypt And Libya" and "Egypt's Military, Inc."