Results Empathy

While analyzing the predicament of Spain, so difficult, the conclusion of the report stands out:

Governments have failed on one crucial issue: saving their citizens from economic excesses which carried off their savings, their jobs and their prosperity. It is a failure that must be learned for the future and for making appropriate accountability.

Sovereign Default

Europe is at far greater risk than the US. Much of Europe could fall further into what would feel like a depression, the stuff of public revolt.

“The euro-region treaties don’t foresee any help for insolvent states, but in reality the others would have to rescue those running into difficulty.”

The longer bar reveals greater difficulty.

How widespread is risk of sovereign default?

Aiming and blaming

For starters, see Time’s 25 People to Blame for the Financial Crisis.

Be cautious when hearing moral assertions that homeowners with faulty credit brought us down.

The overall percentage of problem loans is small — delinquencies rose from 1.45% to 1.55% of 40 million mortgages through January: just 18% of these carried by credit scores under 688, but 7% and rising of FICO ratings above 752.

These are not the percentages that have crushed the global economy.

“We witnessed the collapse of the financial system,” says George Soros. “It was placed on life support, and it’s still on life support. There’s no sign that we are anywhere near a bottom.”

The Crisis & What to Do About It

… Bubbles always involve the expansion and contraction of credit and they tend to have catastrophic consequences. Since financial markets are prone to produce bubbles and bubbles cause trouble, financial markets have become regulated by the financial authorities.

… It is important to recognize that regulators base their decisions on a distorted view of reality just as much as market participants—perhaps even more so because regulators are not only human but also bureaucratic and subject to political influences.

… In contrast to bubbles, which occur only infrequently, the cat-and-mouse game between regulators and markets goes on continuously. [and is] ultimately responsible for the severity of the current crisis.

So much to understand.

Michael Hudson, who holds a strong view on who got us into this mess, is also gaining traction on this:

Calling the $12 trillion giveaway to bankers a “subprime crisis” makes it appear that bleeding-heart liberals got Fannie Mae and Freddie Mac into trouble by insisting that these public-private institutions make irresponsible loans to the poor. The party line is, “Blame the victim.” But we know this is false.

One would think that politicians would be willing to do the math and realize that debts that can’t be paid, won’t be. But the debts are being kept on the books, continuing to extract interest to pay the creditors that have made the bad loans. The resulting debt deflation threatens to keep the economy in depression until a radical shift in policy occurs – a shift to save the “real” economy, not just the financial sector and the wealthiest 10 per cent of American families.

… despite what Milton Friedman said, the economy today is increasingly about how to get a free lunch – how to get the government to avoid taxing it, and shift the tax onto labor and industry instead.

(Incidentally, as one reviewer has said, “Anyone who senses that behind the comforting rhetoric of Free World and Democracy, an aggressive empire lurks with contours and mechanisms unlike previous ones”, should check out Michael Anderson. Although I’m utterly fed up with Socialism vs. Capitalism and a’ that, most major and common economic explanations are rubbish too.)

The CEO of USBancorp, critical of Paulson’s TARP and worried about new D.C. regulation, is also asking us to remain encouraged: “Perhaps what we should do is check ourselves and say, ‘OK, it is tough. What can we — any two of us, any five of us, any 200 of us — do to improve the outcome of this difficult circumstance?'”

We cannot postpone

“This crisis has turned out to be much broader than anything I could have imagined.”

We citizens, firms and governments owe at least $350 for every $100 of goods or services we put in every year.

“I made a mistake in presuming that the self-interest of organizations, specifically banks and others, was such that they were best capable of protecting their own shareholders.”

Alan Greenspan has some explaining to do. The maestro could never be wrong, could he?Not long ago he said the economy was strong and “also the financial system as a whole has become more resilient”. We believed the maestro could never be wrong, but after nearly 20 years as head of the nation’s monetary policy, Alan Greenspan’s effort to explain continues and continues.

It all started with Reagan and spiked under Bush, with Democrats too: a favoring of capital flow as panacea while running a poor and global game theory. It’s become extreme debt.

An era of much activity, yes, but distorted. It’s hid major flaws in our economy. We have put up with ineffectual and arrogant elite, stubborn and trivial politics, forceful and petty committees, intrusive and weak programs, institutionalized war, of all things, bloated and tricked budgets, ignored regions and deferred maintenance, tethered and restrained innovation, chaotic trade and employment, open pilfering and raw usury. We accept injustice and poverty. We’ve kept old technology where costs are high while consuming style as a first resort. We are left so utterly confused about four-square values that we’re vulnerable to the ranting of blatant superstition flamed by aggrandized and hateful media personalities. We’ve let bullies and ignorance remain human nature.

Oh yes, there’s much we’ve done extremely well. Our nation may be far better than it seems while we sweep away error. We can do that. There’s much to gain offering new and needed solutions to the world again, boosting true prosperity again, repairing exploited services and tramped education, and fixing our governing.

We are climbing a higher mountain now. The map is below.

Debt compared to GDP

Thief On Top

George W. Bush used tricks to make his deficits look smaller, hiding more than $2.7 trillion!!

Obama has banned accounting gimmicks. “The president prefers to tell the truth rather than make the numbers look better by pretending.”

“For too long, our budget process in Washington has been an exercise in deception — a series of accounting tricks to hide the extent of our spending and the shortfalls in our revenue and hope that the American people won’t notice…. budgeting zero dollars for the Iraq war — zero — for future years, even when we knew the war would continue; budgeting no money for natural disasters, as if we would ever go 12 months without a single flood, fire, hurricane or earthquake.”

“We do ourselves no favors by hiding the truth about what we spend,” the President said. “In order to address our fiscal crisis, we’re going to have to be candid about its scope.”

Weak Powers

After a three-year global study, the International Commission of Jurists said many states had used the public’s fear of terrorism to introduce detention without trial, illegal disappearance and torture.

It said the framework of international law that existed before the 9/11 attacks was robust and effective, but had been actively undermined by the US and the UK.

Tom Ridge, the first homeland security secretary, admits “We were wrong to torture“.

It’s over before you know it

0 milliseconds – An external object touches the driver’s door.

1 ms – The car’s door pressure sensor detects a pressure wave.

2 ms – An acceleration sensor in the rear door pillar also detects a crash event.

2.5 ms – A sensor in the car’s center detects crash vibrations.

5 ms – Car’s crash computer checks for insignificant crash events, such as a shopping cart or incidental contact. It is still working out the severity of the crash. Door intrusion structure begins to absorb energy.

6.5 ms – Door pressure sensor registers peak pressures.

7 ms – Crash computer confirms a serious crash and calculates its actions.

8 ms – Computer sends a “fire” signal to side airbag. Meanwhile, B-pillar begins to crumple inwards and energy begins to transfer into cross-car load path beneath the occupant.

8.5 ms – Side airbag system fires.

15 ms – Roof begins to absorb part of the impact. Airbag bursts through seat foam and begins to fill.

17 ms – Cross-car load path and structure under rear seat reach maximum load. Airbag covers occupant’s chest and begins to push the shoulder away from impact zone.

20 ms – Door and B-pillar begin to push on front seat. Airbag begins to push occupant’s chest away from the impact.

27 ms – Impact velocity has halved from 30mph to 15mph. A “pusher block” in the seat moves occupant’s pelvis away from impact zone. Airbag starts controlled deflation.

30 ms – The vehicle has absorbed all crash energy. Airbag remains in place. For a brief moment, occupant experiences maximum force equal to 12 times the force of gravity.

45 ms – Occupant and airbag move together with deforming side structure.

Car crash is over before you know it50 ms – Crash computer unlocks car’s doors. Passenger safety cell begins to rebound, pushing doors away from occupant.

70 ms – Airbag continues to deflate. Occupant moves back towards middle of car. Engineers classify crash as “complete”.

150-300 ms – Occupant becomes aware of collision.

Dismantle Libya

Naw. Do ya think?

Muammar GaddafiLibyan leader Muammar Gaddafi on Saturday called on Libyans to endorse his proposal to dismantle the government and give the oil wealth directly to the country’s 5 million people.

The speech was broadcast on state television.

“Do not be afraid to take directly the oil money and the responsibility to create the right government structures that further the interests of the people.”

“The administration has failed and the state economy has failed.

“Enough is enough.”

Gaddafi would hand out all earnings from oil directly to the masses.

Gaddafi will dismantle all ministries except Foreign Affairs, Defense, Security and Justice.

Each of Libya’s five million citizens would get his or her own share of the more than $30 billion earned from oil sales per year. [article two]

“Libyans, this is your historic opportunity to take over your oil wealth, power and full freedom. Why do you want the chance to slip away from you?”

Shift Happens

A good read during wartime, and all that.

One of al-Qaeda’s leaders is blaming Osama bin Laden for “every drop” of blood.

Sayyid Imam al-Sharif blames Osama bin Ladin for deathsSayyid Imam al-Sharif established the idea of a global jihad against the West and was part of the tight circle which founded al-Qaeda in 1988.

Today he’s saying murder of innocent people is both contrary to Islam and a strategic error; the terrorist attacks on September 11 were both immoral and counterproductive.

“Every drop of blood that was shed or is being shed in Afghanistan and Iraq is the responsibility of bin Laden and Zawahiri and their followers.”

80% Blame

So slow to comprehend. So quick to judge her. Yet fewer than 20 percent of U.S. clinics follow professional guidelines on how many embryos should be used.

Extra tidbit: Long before she gave birth to her octuplets, Nadya Suleman delivered for her fertility specialist. Like clockwork, she had babies every year but one between 2001 and 2006. The six children she had during that period accounted for a big share of the success stories at Dr. Michael Kamrava’s clinic.

Left the building

An Alaskan GOP legislator calls Sarah Palin “Dan Quayle with a ponytail”.

Washington Post updates Sarah here.

She said to the Republican Alaska Senate, “I feel like you guys are always trying to put me on the spot.” The room became silent.

Banks rob jobless

Washington – For hundreds of thousands of workers losing their jobs during the recession, there’s a new twist to their financial pain: Even as they’re collecting unemployment benefits, they’re paying bank fees just to get access to their money.

Thirty states have struck such deals with banks that include Citigroup Inc. Bank of America Corp. JP Morgan Chase and US Bancorp an Associated Press review of the agreements found. All the programs carry fees.

Citigroup’s bill to the state: zero. The bank collects fees paid by merchants and the unemployed.

“It’s a racket. It’s a scam,” said Rachel Davis, a 38-year-old dental technician from St. Louis who was laid off in October. Davis was given a MasterCard issued through Central Bank of Jefferson City and recently paid $6 to make two $40 withdrawals.

link link link link

The market of bank-issued unemployment cards is booming, and the millions of recently unemployed are footing the bill.

In 2003, states paid only $4 million of unemployment insurance through debit cards. By 2007, it had ballooned to $2.8 billion, and by 2010 it will likely rise to $10.5 billion.

Complaining costs 50 cents!

It’s not Right or Left

Elizabeth Warren is the head of the Congressional oversight panel on TARP.

Elizabeth Warren: But the mortgage crisis presents a somewhat different problem.

The problem there is much more a one of who’s going to bear these losses?

We’ve got houses that are now worth $100,000, let’s say. But they have mortgages against them for $140,000. And the mortgage on that house has been sold and sliced and diced and moving out–

Dan Rather: Bundled–

Elizabeth Warren: Bundled and all the fancy things that have happened. And now you’ve got a family living there.

And because of the crazy terms in this mortgage, they– they can’t pay the $140,000 mortgage. There’s no possible way.

If this house gets foreclosed, they’re gonna be out of a house. And ultimately, here’s the ironic part, the investors way on down the line, $100,000 house, they’re likely to get somewhere between $40,000 and $50,000 by the time you work through the process.

Lose, lose for both groups.

What we have to do is we have to find the mechanism to get ‘em together and say, look, let’s be realistic. Can you pay $100,000 for the house? Can you get yourself in a level mortgage? If you can, let’s do it.

This-you know-in a funny sort of sense, this isn’t about bankruptcy, this is about reality.

You can beat on this family all you want. But they’re not gonna produce $140,000 for this house. They just can’t do it anymore.

And the day we finally get realistic, we recognize the losses, we write down what we have to write down, we let some businesses go away and we begin to count on the fact that those that are left really do have their feet on the ground, you know, that the– it– it’s solid all the way down, then we start to rebuild an economy.

LibertyStreet blog found the PDF transcript here, Episode 407.

Recession’s Lament

By Alexander Brome [ link ] who died in 1666.

Let 'um plague us until they be weary.

We must flatter and fear
Those that over us are,
And make 'um believe that we love 'um,
When their tyranny's past,
We will serve them at last,
As they serv'd those that have been above 'um.

But we gotta keep ’em

The British government will turn you away at the border if you have engaged in unacceptable behavior by inciting hatred.

“The Government has made it clear it opposes extremism in all its forms.

“We will continue to stop those who want to spread extremism, hatred and violent messages in our communities from coming to our country.

“The exclusions policy is targeted at all those who seek to stir up tension and provoke others to violence regardless of their origins and beliefs.”

Hate Preachers Turned AwayThat’s why anti-gay preachers are banned from Britain. This group, for example, was refused entry.

They’re the sect that pickets US soldiers’ funerals, holding up banners with phrases such as “God Hates Fags”.

Any similar church members who try to enter Britain are also likely to be stopped.

One silly commenter at The Times article posted: “I’d like to see a consistent God. He used to make it clear what He hated – nuking Sodom, flooding, pestilence, mixing up people’s languages. He could sort this whole thing out in a jiffy by doing a bit of honest smiting like in the Old Days – and it would settle any arguments over his existence.”


Scott Dikkers, Editor at The Onion, says about beliefs:

To me, as a writer, what’s worse is that most people don’t even make up a fantasy for themselves. They actually take something someone else made up and believe that as absolute truth. I really don’t understand that. If you’re going to make up a reality out of whole cloth, at least be original.

You can’t just take someone else’s idea and accept it wholesale as your cherished personal belief. That’s like stealing someone else’s Halloween costume idea and showing up at the same party.

Bankers lack a sense of decency

Habituated to coddling power, our media has brought us tiny crumbs from CEO and managers that brought down our house. But Germany’s Spiegel interviewed the leader of the largest reinsurer in the world, a firm large enough to insure insurance companies, and he’s not happy with bankers.

Spiegel OnlineThese days many managers are acting as if the economic crisis were a force of nature that has struck the world.

Bomhard: The staggering dimensions of this crisis were in fact surprising for everyone, but it was — in contrast to an earthquake — created by people.

Spiegel: Greedy people.

Bomhard: People, in any case, whose actions are far more difficult to calculate than something like the probability of a tsunami in a certain region.

Spiegel: Calculating probabilities of all kinds is what you do for a living.

Bomhard: We reach our limits with such complex situations. But it was clear that something was brewing. It was merely a question of when the storm would hit.

Spiegel: The high bonuses are now being questioned in many countries — in the United States as well as in Great Britain and Switzerland.

Bomhard: And with very good reason. I very often hear from bankers the argument that they only pay bonuses because the competition does so as well. I think that with another business philosophy and corporate culture you can also pay people differently. If I offer exorbitant sums as a reward …

Spiegel: … I want mercenaries …

Bomhard: … and that’s usually what I get. And of course large, short-term bonuses basically accelerated the crisis.

While FOX News blathers mud in the eye and major networks fluff, the Euro and Asia press more often press:

Spiegel: Many bankers lack understanding, sensibility — or let’s call it a sense of decency.

Bomhard: It is regrettable, but also part of human nature, that assuming high-ranking positions involves a certain amount of distancing from normal life.

Not like television

WASHINGTON, (UPI) — Innocent people are sent to prison because forensics used in police stations and courtrooms rely on faulty science.

‘Badly Fragmented’ Forensic Science System Needs Overhaul
The U.S. National Academy of Sciences finds serious deficiencies in the nation’s forensic science system and calls for major reforms.

Most forensics don’t meet even minimal scientific standards but forensic scientists confidently assert the reliability of their findings when they testify in court.

Efficiency is greenest fuel

Utility Efficiency GapOver the years, ten states (in dark red) have pressured their utilities to increase efficiency and conservation.

Most state governments and utilities have achieved very little.

Amory Lovin’s Rocky Mountain Institute found that the USA would use 30% less electricity if laggard states would catch up.

Wasted electricity is a premier resource.

Energy efficiency is surely the lowest hanging fruit in the quest to satisfy our national energy hunger (and to cure our addiction to oil)—household energy use totals about 22 percent of our nation’s total energy consumption, much of which is senselessly wasted through poor design and construction.

And of the easy to reach fruits of efficiency, the very easiest to pluck might well be the weatherization of homes, which Amory Lovins, efficiency guru and founder of the Rocky Mountain Institute, once called the “oil field in our attics”.

The study has alarmed politicians and engineers as each state makes various claims and excuses. Yes but my state has more factories. Yes but my state has older power plants. Yes but my state has poorly insulated older homes. Exactly.