AT a recent news conference, Ben S. Bernanke, the Federal Reserve chairman, was asked about the falling dollar. He parried the question, saying that the Treasury secretary was the government’s spokesman on the exchange rate — and, of course, that the United States favors a strong dollar.

Listening to that statement, I flashed back to one of my first experiences as an adviser to Barack Obama. In November 2008, I was sharing a cab in Chicago with Larry Summers, the former Treasury secretary and a fellow economic adviser to the president-elect. To help prepare me for the interviews and the hearings to come, Larry graciously asked me questions and critiqued my answers.

When he asked about the exchange rate for the dollar, I began: “The exchange rate is a price much like any other price, and is determined by market forces.”

“Wrong!” Larry boomed. “The exchange rate is the purview of the Treasury. The United States is in favor of a strong dollar.”

For the record, my initial answer was much more reasonable. Our exchange rate is just a price — the price of the dollar in terms of other currencies. It is not controlled by anyone. And a high price for the dollar, which is what we mean by a strong dollar, is not always desirable.

A massive explosion ripped through a cafe popular among tourists in the Moroccan city of Marrakech on Thursday, killing 14 people including foreigners and wounding 20 in what the government called a criminal act.

If confirmed as terrorism, the blast in the iconic Djemma el-Fna square would be Morocco's deadliest bombing in eight years.

17.59 Code name trivia. It has been widely reported in the world’s Sunday papers that the military operation to enforce UN resolution 1973 is called “Odyssey Dawn”. But as a (slightly piqued?) British defence official said on Sunday, that’s only the US name for the operation:

“The UK Armed Forces are operating under the name Operation ELLAMY. This is the UK operational name; other allies may operate under a different operational name; for example, the US have called this operation Odyssey Dawn.”

Other countries have come with more imaginative code names for the operation. The French have gone for “Harmattan” (a dry dusty wind that blows across West Africa from the Sahara). The Canadian operation is uninterestingly called “MOBILE“, but, following the wind theme, Ottawa has named its air task force enforcing the no-fly zone “Libeccio” after the strong southwesterly wind that blows all year in the Mediterranean.

But in return for this “solidarity,” the Germans say they want “solidity” on limiting benefits and accepting monitoring. Among the measures it is pressing is an agreement to raise retirement ages closer to Germany’s, where access to government pensions begins at age 67, well above the European average. Germany would also like others to stop pegging wage increases automatically to inflation. That is a necessary step if wages are to shrink in absolute terms, which some economists argue is necessary if bitter medicine to inject some competitiveness into the economies of Europe’s southern tier.

The Germans would also force private bondholders who bought the high-yielding debt of the most troubled euro-zone countries to bear part of the burden if countries defaulted or needed to restructure their debt — and not be protected by taxpayers.

But some opponents in Congress who are not committee members chose to warn those who are, notably Representative Keith Ellison, Democrat of Minnesota, who is one of two Muslims in Congress. Mr. Ellison, who spoke as a witness, tearfully described the sacrifice of Mohammed Salman Hamdani, a volunteer medical technician who died trying to help rescue victims in the World Trade Center on Sept. 11, 2001 — pointing out that Mr. Hamdani was wrongly suspected of being part of the plot until his remains were discovered. After he spoke, Mr. Ellison pulled his statement up in front of his face to compose himself.

"designed to be easy to use, yet powerful and flexible, GnuCash allows you to track bank accounts, stocks, income and expenses. As quick and intuitive to use as a checkbook register, it is based on professional accounting principles to ensure balanced books and accurate reports."

Representative Peter T. King, Republican of New York, said he would rely on Muslims to make his case that American Muslim leaders have failed to cooperate with law enforcement officials in the effort to disrupt terrorist plots — a claim that was rebutted in recent reports by counterterrorism experts and in a forum on Capitol Hill on Monday

[HMM getting errors trying to post this from Scribefire. But not with Aqoul main.

Cameron tries to shield BP over Megrahi release

By George Parker and Ed Luce in Washington


David Cameron on Tuesday tried to shield BP from growing anger in Washington over the oil company’s alleged role in the release of the Lockerbie bomber, arguing that the blame lay with Scottish ministers.

Speaking ahead of his first visit to the White House as prime minister, Mr Cameron rejected suggestions that BP’s lobbying over oil contracts in Libya played any part in the release of Abdel Basset al-Megrahi from a Scottish jail last year.

He said the “misguided” decision to release the bomber was taken by ministers in the devolved Scottish Executive on compassionate grounds. “He should have died in jail,” the prime minister said.

But speaking on National Public Radio, he said: “Let’s be clear over who released Megrahi. It was not a decision of BP – it was a decision of Scottish ministers.”

Jul 17 2010, 10:15 AM ET | Comment

As economists continue to sort through the causes of the financial crisis (even though Congress already fixed the problem), there's one cause you don't hear very often: income inequality. Economist Raghuram Rajan explains this point in a recent article at Project Syndicate. He says that income inequality was growing prior to the housing bubble, which is part of what drove policymakers to champion subprime mortgages. Since these individuals couldn't actually afford as much as more affluent Americans, they could now tap into credit to feel just as wealthy. The corollary to his point is what too much credit can do: help to mask income inequality and cause it to further grow.

Fueling the tensions is a change of economic fortune and a long grudge match between the Flemish and the French. Belgium, a relatively new country, declared its independence in 1830. At first, the country’s aristocracy spoke French and the country’s French-speaking regions — rich from iron and coal manufacturing — were often contemptuous of the largely agricultural north. During World War I, most Belgian officers were French-speaking and made little effort to translate for Flemish soldiers.

These days, however, the French part of Belgium — population about four million — is poorer, while Flanders, population about six million, has grown wealthy with a diverse economy. Many Flemish voters resent their taxes’ flowing south.

In some parts of Wallonia, the unemployment rate is close to 20 percent. Nonetheless, Mr. Desmet said the Walloons can refuse a job if it is more than 15 miles from their homes, and collect unemployment. “In the north, there are jobs that could be filled,” he said. “That really annoys a lot of the Flemish.”

Almost everyone, including MSCI, puts Nigeria in the frontier category. “I get people asking, ‘Who’s the next Brazil?’ ” said Adam J. Kutas, manager of the Fidelity Emerging Europe, Middle East and Africa fund. “I answer without hesitation that it’s Nigeria,” because it also has a large population and a huge base of natural resources.

Over on the All About Finance blog, Mary Hallward-Driemeier has an excellent post on the "deals" that firms have to make in countries with excessive regulations. Money quote:

For countries with lengthy requirements...almost no firm actually faces the formal burdens on the books.

This does not mean that lengthy formal practices are costless. Rather, firms ‘pay’ through other channels. This variation in implementation is associated with greater activities on the part of firms to influence the actions of officials (e.g. paying bribes or spending time with officials). Rather than coping with the application of (more or less favorable) rules, firms face deals. And the larger the gap between the de jure and de facto outcomes, the greater the potential space for deals, and indeed, the more prevalent are bribes.