Twilight

"twilight is the crack between the worlds, the door to the unknown" -- Carlos Castaneda

From blogstuff

From blogstuff

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© 2005-2009 Stephen Clarke-Willson, Ph.D. - All Rights Reserved.

The Attack Comes from Below

I think it was Bill Gates who said "The attack always comes from below." He meant (I think) that microprocessors kill minicomputers kill mainframes. Likewise a small OS kills off a larger OS. Likewise the browser as a platform is killing off Windows. Laptops are killing off desktops. Cell phones are killing off laptops.

Anyway, innocent little Javascript is making it's move to kill off Flash and Java.


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NPR: Blaming Glass-Steagall

NPR: Blaming Glass-Steagall:

''I think we will look back in 10 years' time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930's is true in 2010,'' said Senator Byron L. Dorgan, Democrat of North Dakota. ''I wasn't around during the 1930's or the debate over Glass-Steagall. But I was here in the early 1980's when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness.''

That was written ... 10 years ago!
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Apparently that means "fuck you"

Offset Time Zones - An Overview of Offset Time Zones:

"India, the world's second most populous country utilizes an offset time zone. India is a half-hour ahead of Pakistan to the west and a half-hour behind Bangladesh to the east. Iran is a half-hour ahead of its western neighbor Iraq while Afghanistan, just east of Iran, is an hour ahead of Iran but is a half-hour behind neighboring countries such as Turkmenistan and Pakistan."

Apparently a country gives itself a half-hour timezone offset as a way of saying "fuck you" to its evil neighbor.
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© 2005-2009 Stephen Clarke-Willson, Ph.D. - All Rights Reserved.

Goodbye, cruel commodities business

Op-Ed Contributor - Dear A.I.G., I Quit! - NYTimes.com:

"It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:

I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage."

I suspect Mr. Jake DeSantis made more money than he would have otherwise because of the cash thrown off from the CDS business at AIG.

But if you read the whole letter, you'll see that a promise to reward that dude for hanging around was broken. It's kind of like a big insurance company issuing credit insurance with no intention to pay it. What are the odds of something like that happening?

I'd like to feel sorry for Jake DeSantis. But it's very hard to do!
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Obama Plan Seeks Private Investors to Buy Risky Assets - NYTimes.com

Obama Plan Seeks Private Investors to Buy Risky Assets - NYTimes.com:

One institutional investor said he was surprised that the government was lending so much of the money, saying that private investors have been willing to buy up pools of mortgage-backed securities with less “leverage” or outside borrowing than the Treasury proposed on Monday.

I can imagine being angry but not surprised. The government is embarking on the greatest market distortion exercise in the history of mankind. What's surprising about that?
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Even Krugman thinks it's nuts!

Despair over financial policy - Paul Krugman Blog - NYTimes.com:

Treasury will be creating — deliberately! — the functional equivalent of Texas S&Ls in the 1980s: financial operations with very little capital but lots of government-guaranteed liabilities. For the private investors, this is an open invitation to play heads I win, tails the taxpayers lose. So sure, these investors will be ready to pay high prices for toxic waste. After all, the stuff might be worth something; and if it isn’t, that’s someone else’s problem.

I think they (Geithner et.al.) know these assets are "toxic" but what choice do they have? (Obviously they should have let all those bozos declare bankruptcy - I mean to say - what choice do they have, based on their erroneous world view?)

The only choice is to create the bad bank. And to avoid too much screaming, they are doing it via a trick: by guaranteeing the bad assets rather than just buying them outright; that keeps a huge amount of debt off the books. (Sounds like Enron, doesn't it?)

Elliot Spitzer has been questioning, in is writing at Slate.com, whether the alleged crisis was real, or bullshit.

I think there's hope for America. In the old days - even 10 or 20 years ago - there wasn't enough realtime communication for enough people to call bullshit on this kind of crap. But now ... there's hope.
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What happens when a bank fails?

What happens when a bank fails?:

If a bank fails the FDIC sells it as quickly as possible to another bank. Since it's a firesale sometimes the FDIC has to kick in some cash from its insurance fund. If a buyer can't be found, the FDIC will mail you a check for the insured portion of your deposit. That takes a while so you don't have access to your money - your checks are returned marked 'bank closed'. You have to scramble to make sure your bills are paid.

On the other hand, apparently, if the bank fails, you should continue to make your loan payments. You, apparently, can't mark 'bank closed' on your mortgage slip.

Bankrate: What happens to mortgages, car loans and the like?

Barr: We try to sell as many of the loans to the assuming institution as possible. They leave the dogs, but sometimes they'll leave us with good loans. If an assuming bank doesn't make car loans, for instance, they'll most likely leave those behind with us. Customers should continue to make their payments as usual until notified to do differently.

Hmm. You have to pay ... but they don't. If the deposits (over the insurance amount) are declared null and void and inaccessible, why isn't your loan declared null and void?

I don't understand that.

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Dictator

The Big Takeover : Rolling Stone:

"While the rest of America, and most of Congress, have been bugging out about the $700 billion bailout program called TARP, all of these newly created organisms in the Federal Reserve zoo have quietly been pumping not billions but trillions of dollars into the hands of private companies (at least $3 trillion so far in loans, with as much as $5.7 trillion more in guarantees of private investments). Although this technically isn't taxpayer money, it still affects taxpayers directly, because the activities of the Fed impact the economy as a whole. And this new, secretive activity by the Fed completely eclipses the TARP program in terms of its influence on the economy."

and ...

None other than disgraced senator Ted Stevens was the poor sap who made the unpleasant discovery that if Congress didn't like the Fed handing trillions of dollars to banks without any oversight, Congress could apparently go fuck itself — or so said the law. When Stevens asked the GAO about what authority Congress has to monitor the Fed, he got back a letter citing an obscure statute that nobody had ever heard of before: the Accounting and Auditing Act of 1950. The relevant section, 31 USC 714(b), dictated that congressional audits of the Federal Reserve may not include "deliberations, decisions and actions on monetary policy matters." The exemption, as Foss notes, "basically includes everything." According to the law, in other words, the Fed simply cannot be audited by Congress. Or by anyone else, for that matter.

Not to get too inflammatory, but that pretty much makes Fed Chairman Bernanke a dictator.

That doesn't seem like a good idea to me.

It's strange... we have central management of our economy. That used to be known as Communism, I think.

... oh wait ... reading further ...

When one considers the comparatively extensive system of congressional checks and balances that goes into the spending of every dollar in the budget via the normal appropriations process, what's happening in the Fed amounts to something truly revolutionary — a kind of shadow government with a budget many times the size of the normal federal outlay, administered dictatorially by one man, Fed chairman Ben Bernanke. "We spend hours and hours and hours arguing over $10 million amendments on the floor of the Senate, but there has been no discussion about who has been receiving this $3 trillion," says Sen. Bernie Sanders. "It is beyond comprehension."

 But maybe Rolling Stone has it all wrong?

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AIG a pass-thru for more bailout money

The real scandal at AIG is the not the bonuses. It's the payments to counterparties. - By Eliot Spitzer - Slate Magazine:

Workers around the country are being asked to take pay cuts and accept shorter work weeks so that colleagues won't be laid off. Why can't Wall Street royalty shoulder some of the burden? Why did Goldman have to get back 100 cents on the dollar? Didn't we already give Goldman a $25 billion capital infusion, and aren't they sitting on more than $100 billion in cash? Haven't we been told recently that they are beginning to come back to fiscal stability? If that is so, couldn't they have accepted a discount, and couldn't they have agreed to certain conditions before the AIG dollars—that is, our dollars—flowed?

The appearance that this was all an inside job is overwhelming. AIG was nothing more than a conduit for huge capital flows to the same old suspects, with no reason or explanation.

Bankers, who have the most to gain by manipulating the money supply, should not be in charge of the money supply.
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Understatement

Taxes and Bonuses - Floyd Norris Blog - NYTimes.com:

The current power of the banking lobby is amazing. I have not been able to analyze the changes the Financial Accounting Standards Board is proposing to mark-to-market rules, but some people I respect think the board caved to political pressure. The banks whose excesses got us into this mess somehow have the ears of legislators, with the likely result being official sanction for the banks to fudge their books. As I wrote last week, I think the banks deserve some regulatory forbearance, but they should not be allowed to deceive investors.

Speaking of bonuses, the bank lobbyists have more than earned theirs for this year.

You know, people argue capitalism vs. socialism, freedom vs. state control, and so on. But I think the real issue underlying all social degradation is simply control over money. The political positions are just a smokescreen. It's all about controlling the money.

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Fed Planning 15-Fold Increase In US Monetary Base

Market Skeptics: *****Fed Planning 15-Fold Increase In US Monetary Base*****

Read the full article, if you dare. It will make you sick to your stomach, if you can persist and get through it call.

The author, Eric deCarbonnel, is a bit of a nutjob sometimes about the collapse of the dollar, but this is one of his best written blog posts.

Good luck!

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Henry Paulson and Goldman Sachs

Market Skeptics: *****AIG pays 58 Billion to foreign firms since receiving taxpayer bailout*****:

"My reaction: Seems like AIG bailout overwhelmingly benefited:

A) Foreign firms (58 Billion)
B) Goldman Sachs ($12.9 Billion)

While I am sure that the German, Swiss, French and British readers of this blog are happy that the US taxpayer is subsidizing their financial system, I am not too happy about it. However, I am even less happy about the 13 billion received by Goldman Sachs. In fact, I am pretty upset.

The government official who led the charge to bailout out AIG with taxpayer money was US Treasury Secretary and former Goldman Sachs CEO Henry Paulson. Now what do we find out? Goldman Sachs is the single biggest recipient of AIG/taxpayer funds."

That's our boy, Henry Paulson, one of my least favorite people in the world.

He was probably inspired by Paul Bremer, who somehow misplaced billions of dollars in Iraq.

2010 07 27: The money drain in Iraq continues.

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AIG Bonuses

Cuomo Offers Some Details on A.I.G. Bonuses - NYTimes.com: "Seventy-three employees were paid more than $1 million in the latest bonuses at the insurance giant American International Group, according to the New York attorney general, Andrew M. Cuomo."

I'm thinking they should be paid in reduced prison sentences.

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Buy-n-Hold Rhapsody

Must See: Buy-n-Hold Rhapsody | The Disciplined Investor

Andrew Horowitz says "buy and hold" stock management is for losers.

He might be right - but who wants to buy and sell stocks all day?

The following ditty is extremely well done, regardless of your position on holding stocks.



My own view these days is that all stock brokers are liars because they want to sell you stock. Or get you to sell stock. Either way, they want your money, and in my opinion, all of the "mathematical" analysis is wrong and designed for one purpose: to help the broker get control of your money.

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Ben Bernanke gives himself an F

Ben Bernanke's Greatest Challenge - CBS News: "'You know Mr. Chairman I think the Federal Reserve, for most people, is a mystery,' Pelley remarked.

'Well, it's an institution that people don't hear so much about but it's a very important one. It manages monetary policy for the country. It's one of the main tools we have for stabilizing our economy and keeping prices stable,' Bernanke said."

Well, I guess the fed hasn't been doing a very good job of managing monetary policy since the economy is not stable.

Why aren't these assholes ever fired?

(I know the answer - nobody has the courage to stand up to the "expert" except bloggers. Bloggers FTW!)

Asked if it's tax money the Fed is spending, Bernanke said, "It's not tax money. The banks have accounts with the Fed, much the same way that you have an account in a commercial bank. So, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed. It's much more akin to printing money than it is to borrowing."

"You've been printing money?" Pelley asked.

"Well, effectively," Bernanke said. "And we need to do that, because our economy is very weak and inflation is very low. When the economy begins to recover, that will be the time that we need to unwind those programs, raise interest rates, reduce the money supply, and make sure that we have a recovery that does not involve inflation."

That's what they all say, Ben. We'll just print some money for now, and later we'll fix it. Right Ben, right.

And that makes it all the more outrageous when he hears of financial firms handing out perks and bonuses after they've taken bailout money. "The era of this high living, this is over now. And that they need to be responsible and use the money constructively," he said.

You know, I think he's right about this. And I think Henry Paulson should give back the $250 million he made as head of Goldman Sachs. That seems right to me. I think I'm going to go start a Facebook group called "Henry Paulson should return the $250 million he made fleecing America." I like that idea.

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The Bad Bank

Sounds like the title of Lemony Snicket book, doesn't it?

Toxic Assets: Obama Plan for Bad Bank Assets Could Come This Week - Financials * US * News * Story - CNBC.com: "Several competing funds will be established with capital from both public and private sources. The hope is to have these funds bid on the assets weighing down the balance sheets of the nation's banks and create a market price through the competition.

The administration plans to begin the program, to be overseen by the Treasury, the Federal Deposit Insurance Corporation and the Federal Reserve, with purchases of up to $500 billion in assets. It could be expanded to $1 trillion.

The bidders will be offered low-cost government financing to buy the assets and some form of insurance to protect them against downside risk. Taxpayers, in turn, will also have a way of profiting on the upside if the assets appreciate."

Well, another trillion committed to bailing out the nutjobs. And check it out! You can get insurance in case your investment tanks! I guess those guys at AIG had it right all along, except they could not print enough money to cover their asses - a problem Tim Geithner apparently does not have.
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China is concerned ... and perhaps we should be too

China is concerned ...

Some specialists say that China’s investment in American debt is now so vast that it would be impossible for Beijing to unload its Treasury securities without flooding the market and driving down their price.

Still, it is rare for any world leader to raise questions about the safety of United States Treasuries. Both the White House and Treasury Department issued reassuring statements.Robert Gibbs, the White House press secretary, said, “There’s no safer investment in the world than in the United States.” Foreign investors would be reassured if Congress adopted the president’s budget plan, he said, because it would put “us on that path to fiscal responsibility.”

On the other hand China might decide not to buy the $800 billion that will be floated to pay for the stimulus.

If that happens, the only alternative is to print money, which will cause inflation, which, although this is hard to grasp at first, will devalue the US dollar, which will devalue the treasuries that China already owns, and that will potentially cause everyone else to lose faith.  If China loses faith, it could start a chain reaction, just like the one we're going through internally now.

After that, hyperinflation!

But you never know, maybe the Chinese are just fucking with us.

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Cramer - or is that Kramer?

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Don't sugar coat it

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Capitalism is stressful

Schumpeter vs. Keynes - Doug French - Mises Institute:

"Back in 1983, the hundredth anniversary of Keynes's birth, Forbes magazine declared that it was not Keynes who knew the way, but another economist who shared the same birth year as Keynes — Joseph Schumpeter. Instead of the government intervention that Keynesians demand to prop up the economy and failed businesses of all types, Schumpeter believed that capitalism is driven by entrepreneurs whose innovations replace old worn-out business models in a process he called 'creative destruction.'"

Capitalism is stressful. Here's a guy promoting 'creative destruction.' I'm sure the people at GM are thrilled by that description.

I'm not saying that capitalism isn't the best system for increasing everyone's standard of living and solving the associated problems ... I'm just saying it is stressful. GM should go out of business - as soon as possible - but that doesn't take away the stress of the situation for GM car owners, investors, bond holders, dealers, suppliers, and yes, union workers.

I'm not sure captialism needs to be as stressful as it is. I think it's as stressful as it is because of fractional reserve banking. Basically that means everyone is in debt all the time. Bankers think that's great because they are in the business of loaning money (especially money they don't even have!). But I don't think it is so good for everyone else. I think it stresses everyone out and we end up in a situation where the Austrian type economic folks end up sounding like assholes because they advocate things like 'creative destruction' and the joys of deflation.

Again - deflation can be a very good thing. Creative destruction - businesses that don't make sense going out of business - is good.

But who's going to win over the public view? The people arguing in favor of unemployment, in favor of businesses and banks failing, in favor of 'creative destruction'? Or the bailout people?

(Reduce your stress: read my novel Nano-Plasm and have some fun! Visit http://NanoPlasmbook.com.)
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Netflix

Netflix

"Netflix, Inc., reserves the right, from time to time, with or without notice to you, to change these Terms of Use in our sole and absolute discretion."

And people wonder why businesses aren't always trusted.

Surely, Netflix should at least try to tell you if they are raising their rates to a million dollars a month. Don't you think?
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Lew Rockwell, Jr.

I can't remember the details, but a friend once said something along the lines that if you want to convince someone of the truth of your position it's best not to tell them they are an idiot before you explain your idea.

This is a PR problem for Austrian Economics. Lew Rockwell, founder of The Mises Institute, illustrates the problem well with this recent article:

Beating Back Obamanomics - Llewellyn H. Rockwell, Jr. - Mises Institute:

"It's raining, pouring, economic fallacies by the hour, followed by a flood of horrible policy that is driving us ever further into economic depression. The regime in charge has really gone nuts, revealing itself as both deeply ignorant and horribly evil.

We find ourselves facing the horror of what has always been the Achilles heel of the left wing: its abysmal ignorance of economic science. The ideological tendency has gone from Keynesianism to outright socialism in a matter of a few weeks."

To be fair, many of the articles published by The Mises Institute sound rational. But if you listen to Lew's podcasts you'll see he can't help but call our government leaders words like "fascist" "criminals" and their behavior "looting."

I mean, I agree with him, but if he wants to get his point across, he's going to have to figure out a better way.

If you study Austrian Economics, as I have recently started to do, pretty soon you'll be calling Fed Chairman Bernanke an idiot, a nutjob, a lunatic, the worst Fed Chairman in history, and so on.

But while doing so (and this applies to me too) you yourself start to sound like a nutjob.

I think this is our basic problem: economics - specifically macro-economics - is so poorly understood by so many people, and the results of actions are so far into the future, that just about anyone sounds like a nutjob.

I'm encouraged by the many blog posts I read or people I meet who say, "Why does going further into debt help us get out of debt?" That's a good question, and it doesn't call anyone an idiot right at the start.

The simple fact is that no one person - or even a committee - should be controlling the money supply. Even if the people controlling the money supply were super-geniuses the fact is that the information they get is poorly collected and subject to political manipulation. The continuous redefinition of the money supply is a prime (heh) example.

The other problem with Austrian Economics - and get this - I agree with just about everything they say - is that whenever freedom has been tried it has devolved into central government and central planning. Can you point to an existing society of truly free individuals? I'd like to see it.

I agree that education helps and I'm encouraged that more and more people are becoming aware of how the government prints money and how that affects them.

But there must be some other solution that will stave off centralism. Or perhaps some kind of inoculation a person could take that would keep centralism from controlling them.

I mean, if I was completely self-sufficient, I wouldn't give a rat's ass how much money the government printed.

It's an interesting problem.

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The Daily Show Rips CNBC a new one

The Daily Show With Jon StewartM - Th 11p / 10c

CNBC Gives Financial Advice

Daily Show Full Episodes
Important Things With Demetri Martin

Political Humor
Joke of the Day

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