One of the nice thing about being an amateur blogger is that, as soon as I’m five feet away from the computer, none of it matters anymore. Would that all troubles were this simple.

I’m sure that I speak for everyone at Crooked Timber in extending our best wishes to Glenn Reynolds and his wife. May her recovery be speedy, and may they spend many more happy years together.

I don’t know if we have any readers who don’t also read Fafblog; if there are any out there, they should check out his “intervention”:http://fafblog.blogspot.com/2005_02_13_fafblog_archive.html#110870213550100400 in the recent “blogospheric debate”:http://yglesias.typepad.com/matthew/2005/02/power_line_spea.html on treason.

bq. Treason isn’t just providin aid an comfort to the enemy. It’s providin not-aid an discomfort to America. Treason is hurting America’s feelings.

bq. Now you may think “oh well Fafnir America’s a big country it can take care a itself” but in fact it is very sensitive. When you say its mom’s ugly or criticize its foreign policy or kick sand on its face at the beach it is just as hurt as if you’d sold its state secrets. Like every emotional young superpower America needs love and care from its citizens. We’ve put together a brief guide to treason so you can understand it a little better.

bq. Q: Which of the following is treason?
1. Not wishing the President a happy birthday even when he is clearly wearing a party hat and a “Kiss The Birthday Boy” shirt
2. Questioning the progress, purpose, or justification of the Iraq war
3. Providing material aid to a hostile enemy of the United States
4. Telling America “Hey America yo mama’s so fat by the time she bends over it’s Daylight Savings Time.”

bq. Answer: All of them are treason but number four is the worst treason of all on account of America is real sensitive about the fatness of its mama.

I just came across some beautiful pictures [link to PowerPoint slides] of synagogues in Budapest most of which I have never seen despite it being my hometown. You will notice that they are tucked away with quite some care in several cases, which makes it easy to miss them. The photographer has many other slideshows available on his Web site.

I have also posted some photos of the main synagogue and my high school, but mostly of communist era statues gathered up in a Statue Park on the outskirts of the city.

Social scientists looking for a conference excuse to see these sights may want to consider submitting an abstract to the annual meetings of the Society for the Advancement of Socio-Economics to be held this summer in Budapest. Abstracts are due March 1, 2005.

There’s a wonderful passage in Colm Toibin’s ‘The Master’, a fictional biography of Henry James, where the hero is on his way to see the house in Rye where he’ll spend the rest of his life. It came to mind when I sat down to list my favourite cookery books.

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My friend “Pierre-Olivier Gourinchas”:http://ist-socrates.berkeley.edu/~pog/ has co-authored a “very interesting paper”:http://ist-socrates.berkeley.edu/~pog/academic/IFA/ with “Hélène Rey”:http://www.princeton.edu/~hrey/ called “International Financial Adjustment.” (Here’s the “PDF version”:http://ist-socrates.berkeley.edu/~pog/academic/IFA/ifa.pdf.) You might think that’s not a title to set the world on fire, but don’t be fooled. A more appealing — though perhaps less responsible — alternative would be something like “Dude! We can predict exchange rates!” Here’s the abstract:

bq. The paper proposes a unified framework to study the dynamics of net foreign assets and exchange rate movements. We show that deteriorations in a country’s net exports or net foreign asset position have to be matched either by future net export growth (trade adjustment channel) or by future increases in the returns of the net foreign asset portfolio (hitherto unexplored financial adjustment channel). Using a newly constructed data set on US gross foreign positions, we find that stabilizing valuation effects contribute as much as 31% of the external adjustment. Our theory also has asset pricing implications. Deviations from trend of the ratio of net exports to net foreign assets predict net foreign asset portfolio returns one quarter to two years ahead and net exports at longer horizons. The exchange rate affects the trade balance and the valuation of net foreign assets. It is forecastable in and out of sample at one quarter and beyond. A one standard deviation decrease of the ratio of net exports to net foreign assets predicts an annualized 4% depreciation of the exchange rate over the next quarter.

Now, I am not a macroeconomist so I should leave further discussion to Daniel and John. The guts of the paper are really beyond my competence to evaluate. But this is a blog, so naturally I will carry on regardless and make three points anyway.

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From the Washington Post, “Blinding Flash of the Obvious” Department:

The insurgency in Iraq continues to baffle the U.S. military and intelligence communities, and the U.S. occupation has become a potent recruiting tool for al Qaeda and other terrorist groups, top U.S. national security officials told Congress yesterday.

“Islamic extremists are exploiting the Iraqi conflict to recruit new anti-U.S. jihadists,” CIA Director Porter J. Goss told the Senate Select Committee on Intelligence.

“These jihadists who survive will leave Iraq experienced and focused on acts of urban terrorism,” he said. “They represent a potential pool of contacts to build transnational terrorist cells, groups and networks in Saudi Arabia, Jordan and other countries.”

On a day when the top half-dozen U.S. national security and intelligence officials went to Capitol Hill to talk about the continued determination of terrorists to strike the United States, their statements underscored the unintended consequences of the war in Iraq.

“The Iraq conflict, while not a cause of extremism, has become a cause for extremists,” Goss said in his first public testimony since taking over the CIA. Goss said Abu Musab Zarqawi, a Jordanian terrorist who has joined al Qaeda since the U.S. invasion, “hopes to establish a safe haven in Iraq” from which he could operate against Western nations and moderate Muslim governments.

“Our policies in the Middle East fuel Islamic resentment,” Vice Adm. Lowell E. Jacoby, director of the Defense Intelligence Agency, told the Senate panel. “Overwhelming majorities in Morocco, Jordan and Saudi Arabia believe the U.S. has a negative policy toward the Arab world.”

How long before our doughty friends at Power Line realize that Porter Goss and Vice Admiral Jacoby are…ON THE OTHER SIDE!!!!