Month: September 2009

Wealthcare.
We have not resolved wealth and virtue:

Ayn Rand’s arguments are against pure communism, which has been demonstrated by her fictional world. A good writer, but a bizarre philosophy that she could not see an oligarchy or aristocracy being birthed of unregulated, malicious side of capitalism, as are all inherent evils in every aspect of society. The concept is as utopian as Marxism.

Brookings Institution and Pew Charitable Trusts reported, the United States ranks near the bottom of advanced countries in its economic mobility.

It expresses its opposition to redistribution not in practical terms–that taking from the rich harms the economy–but in moral absolutes, that taking from the rich is wrong. It likewise glorifies selfishness as a virtue. It denies any basis, other than raw force, for using government to reduce economic inequality. It holds people completely responsible for their own success or failure, and thus concludes that when government helps the disadvantaged, it consequently punishes virtue and rewards sloth. And it indulges the hopeful prospect that the rich will revolt against their ill treatment by going on strike, simultaneously punishing the inferiors who have exploited them while teaching them the folly of their ways.

It’s a billion pound book. To read it all it would take 57,000 years.

Keio University has developed a small robot that folds laundry on a big table.

For t-shirts or pants.

Easy chair and TV remote not included.

Video at Youtube.

Inside Sarah Palin’s church: A radical Pentecostal, God began to speak to her about politics.

Rooted in an explicitly anti-intellectual creation myth where Satan had sex with Eve and gave birth to Cain—the so-called ‘Serpent Seed’, through Cain came all the smart, educated people—the intellectuals.

“We come against that python spirit. We come against that spirit of witchcraft as the body of Christ. Right now in the name of Jesus!

“Ooooh-raba-saka-ta-la. Come on, pray, pray!

“Raba-sandalalala-bebebebekalabebe. Shanda-la-bebebeka-lelebebe. That’s why we come against all forms of witchcraft. All the python spirits that are released against the body of Christ . . . and bring this nation into the Kingdom.”

Onward for an anointing:

We will put our feet against the head of the enemy and crush the python spirit by stepping on the enemy’s neck.

That’s because the institution itself is fatally flawed.

If the American or European central bank broke down, and investigations were held into the relationships, all holy hell would likely break loose.

How can it be otherwise?

These central banks are run by small groups of (mostly) men, who grow up with each other and go to the same clubs and run in the same social circles and have the same interests.

For all of the wrong reasons:

1. Nobel prize winning economist Joseph Stiglitz said yesterday that the U.S. government is wary of challenging the financial industry…
2. Economic historian Niall Ferguson asks, “Guess which institutions are among the biggest lobbyists and campaign-finance contributors?”
3. Manhattan Institute senior fellow Nicole Gelinas agrees, “The too-big-to-fail financial industry has been good to elected officials and former elected officials…”
4. Investment analyst and financial writer Yves Smith says, “Major financial players [have gained] control…”
5. William K. Black – the senior regulator during the S&L crisis, and an Associate Professor of both Economics and Law at the University of Missouri – says, “There has been no honest examination of the crisis because it would embarrass CEOs and politicians…”
6. Harvard professor of government Jeffry A. Frieden says, “Regulatory agencies are often sympathetic to the industries they regulate. This pattern is so well known among scholars that it has a name: regulatory capture.”

Dana Blankenhorn:

The idea of reporters as truth-tellers is an important part of democracy.

It keeps people on their toes — in business, in sports, in entertainment, in politics. Sure, a lot of reporters cross ethical lines. Sure, there are gazillionaires who use their control of media outlets for their personal advantage. Such corruption is routine.

But this lesson has not been driven home. There are enormous long-term benefits in accepting the role of reporters as truth-tellers.

To insisting on it.

Charles Hughes Smith asked himself how much of his money goes to cartels and monopolies. The answer: most of it.

1. Mortgage: Most mortgages are processed and serviced by a mere handful of big players, so regardless of who owns your mortgage now, the mortgage/banking cartel is more than likely collecting a nice piece of it, and a chunk of the origination fees as well.
2. Utilities: For heat, water and electricity, your money likely goes to a monopoly.
3. Telecom: Phone, Internet and mobile services are divvied up amongst a handful of major providers.
4. Food: A handful of corporations dominate the supermarket business, a handful of businesses dominate food distribution, a handful dominate the market for bulk grain and commodities like sugar, and a handful of global food giants manufacture most of the packaged food in the supermarkets.
5. Eating out: A huge percentage of meals-away-from-home are served by a handful of firms.
6. Media: News and entertainment industries are dominated by a handful of global corporations, so whatever money you spend on media and entertainment flows to a cartel.
7. Cars: A handful of global auto manufacturers also handle the majority of auto financing.
8. Retail: Most discretionary and consumer spending is to a few chains.
9. Medical: The big bucks flow through a handful of HMOs or insurers to a handful of hospital chains, and the vast majority of all those funny little pills you get by the boatload every month are manufactured and marketed by a handful of global pharmaceutical giants.
10. Garbage: Waste Management dominates the trash-service market.

Your state and local governments are behaving like a cartel too. As are political parties.

Playing in the Presidium.
Yay for Ronald Reagan!
What free market?!

“I criticized Bernanke for many of the mistakes he made before the crisis,” Roubini said. “But I give him credit for his actions that led to the avoidance of another Great Depression.”

It was 24,992 people making money and eight guys losing it.

A respected vice-president says the private elevator to the 31st Floor purposely hid the incompetence of Lehman leadership from its 25,000 employees.

A very small number had direct exposure and what they witnessed was staggering.

In the four years McDonald worked for the company he never once saw Fuld. Top management never saw Fuld either.

This lack of interaction meant that warning calls from traders on the frontline were not heard, and certainly not heeded, in the years leading to the collapse.

“The most important players were Mike Gelband, managing director and global head of fixed income; Alex Kirk, managing director and global head of high-yield and leveraged loans; and my immediate boss and best friend, Larry McCarthy, managing director and global head of distressed bond trading. Then there was Richard Gatward, managing director and global head of convertible securities trading; Christine Daley, managing director and head of distressed debt research; Madelyn Antoncic, managing director and chief risk officer; and myself.

“Most of these brave leaders implored the chairman, and our president Joe Gregory, to change course.”

They turned their backs on many warnings. They were betting the ranch.

Larry McDonald called the sub-prime bubble early and started to short mortgage lenders such as Countrywide, Fannie Mae and Freddie Mac. All the while Lehman was increasing its exposure to the very same products.

“For every dollar I was making, they were losing six. I was making money betting against the edicts that were coming out of the 31st floor.”

He believes jealousy played a part in the board’s insatiable desire for the toxic assets that would ultimately sink it.

“They were chasing all of this real estate stuff because Blackstone, which was founded by former Lehman guys, was doing it and there’s always been this intense rivalry between the two. Goldman Sachs was big in it too. It was Goldman-envy and Blackstone-envy.”

Instead of reviewing the bank’s risk management systems, the executive directors would have endless meetings discussing the corporate dress code as Fuld was a stickler for appearances.

A dangerous lack of awareness about the technical financial products the bank was playing with didn’t help matters.

I think the board was afraid of interacting with the people who genuinely understood things like credit derivatives because they might get caught out.

“The management team was from a different era, they weren’t 21st century financial people.”

McDonald’s book ‘A Colossal Failure of Common Sense: The Incredible Inside Story of the Collapse of Lehman Brothers‘ points the finger of blame at Fuld and his board, accusing them of taking dangerous risks in pursuit of short-term profits.

Lawrence McDonald at New Statesman, “We all knew it was coming.“

Summary link at The Times.

Naked Capitalism:

It is simply not true that we need the mega-banks.

Now that the economy has crashed, the big banks are making very few loans to consumers or small businesses because they still have trillions in bad derivatives gambling debts to pay off, and so they are only loaning to the biggest players and those who don’t really need credit in the first place.

In fact, as many top economists and financial analysts have said, the “too big to fails” are actually stifling competition from smaller lenders and credit unions, and dragging the entire economy down into a black hole.

In a nutshell this is what happened:

Bernard L. Madoff’s massive fraud stunned some of the wealthy denizens of Malibu Colony, especially when a couple devastated by the scheme surrendered their oceanfront home to Wells Fargo Bank.

But some neighbors say the real shocker came when they saw one of the bank’s top executives spending weekends in the $12-million beach house and hosting eye-catching parties there. What’s more, Wells Fargo spurned offers to show the property to prospective buyers, a real estate agent said.

“It’s outrageous to take over a property like that, not make it available and then put someone from the bank in it,” said Phillip Roman, an 18-year Colony resident who lives a few homes away from the property.

Residents identified the house’s occupant as Cheronda Guyton, a Wells Fargo senior vice president who is responsible for foreclosed commercial properties.

Update 9/15 – Wells Fargo fires executive who partied at repossessed Malibu mansion

“For an executive at the US bank Wells Fargo, a repossessed $12m beach house in southern California proved just too tempting.

The financial institution has fired a top loans officer for using a luxurious Malibu property for a series of family getaways, culminating in a summer party at which guests arrived by yacht.”

The Atlantic:

On every major measurement, the Census Bureau report shows that the country lost ground during Bush’s two terms.

While Bush was in office, the median household income declined, poverty increased, childhood poverty increased even more, and the number of Americans without health insurance spiked.

That ain’t the half of it.

Bruce Hood, Bristol University:

Our research shows children have a natural, intuitive way of reasoning that leads them to all kinds of supernatural beliefs about how the world works.

As they grow up they overlay these beliefs with more rational approaches but the tendency to illogical supernatural beliefs remains as religion.

NYTimes:

Nationwide, polluters have violated the Clean Water Act more than 500,000 times. “How is this still happening today?” she asked.

IMF Managing Director Dominique Strauss-Khan:

He argued that global economic growth can no longer be expected to come from such macro-economic imbalances as US indebtedness.

In the United States, hard-hit by recession, “the household savings rate, which was practically zero, is now at 5.0 percent … Good news for the deficits. But who will replace the US consumer to power global growth?”

He recalled that the United States accounts for 25 percent of global output.

“The question of new sources of growth must be considered.”

1. Both theory and empirical facts do tend to show that, on the financial markets, the Invisible Hand does not always lead to welfare-improving general outcomes.
2. Traditional economics has failed to grasp the complexity and dynamism of financial markets.
3. A first step toward rectifying this problem would be to create a global risk observatory.

Guy Sorman on Wild Randomness:

The reason: grain or corn prices may at any point in time be driven more by speculation than by actual harvests. The rule applies to all transactions on financial markets, including oil, stocks, and derivatives.

In the short term—which can mean several years in practice—the connection can be tenuous at best and difficult to model.

Finance itself is a relatively young field of research in which data have been available in large quantities only over the last 20 years.

This book teaches you about ‘marketing weasels’ and how they get your money.

After reading it Jeff Atwood said, “We human beings are a selfish bunch, so it’s all the more surprising to see how easily we can be manipulated to behave in ways that run counter to our own self-interest.”

Williams-Sonoma couldn’t sell their first bread machine until they added a ‘deluxe’ model. Customers soon rushed to buy the cheaper original.

We are all nuts.

As matters now stand, the insurance companies claim $450 billion a year of our health-care dollars. They will fight hard to hold on to this bonanza.

This is a major reason Americans pay more for health care per capita than any other people in the world. The insurance executives didn’t cry “socialism” when their buddies in banking and finance were bailed out. But to them it is socialism if the government underwrites the cost of health care.

George McGovern:

I don’t feel as though the government is meddling in my life when it pays my doctor and hospital fees. There are some things the government does that I don’t like — most notably getting us into needless wars that cost many times what health care for all Americans would cost. Investing in the health of our citizens will enhance the well-being and security of the nation.

We know that Medicare has worked well for half a century for those of us over 65. Why does it become “socialized medicine” when we extend it to younger Americans?

Mike Stathis:

In the end, the mainstream media won’t win because it’s always been about content; not lies and spins. But they will only lose if you wake up and realize how you’re being fooled.

There’s a table of sixteen:

The roulade of wild boar and açaí is already on the slates, the yuzu-confit crocodile is being laid down and topped with perfect quenelles of bullfrog & wild eucalyptus mousse and tarantula tempura are being carefully scattered across the bed of smoked bamboo shoots. At this precise moment the forest caterpillar and manzanilla jus should appear at your left elbow… but… the chef responsible is nowhere to be found.

Naw. He’s jes’ pullin’ yer leg.

Stathis:

It’s time to wake up and realize the facts. America has only one political party. And they plan to keep it that way. This is how all mafias operate.

So stop poisoning your mind with the propaganda and start doing your own research. Find out the truth for yourself because I can guarantee you that you won’t get it from the media. The media’s mission is not to deliver accurate news or valuable insight. Their mission is to maximize profits. The best way to do that is to serve the interests of their financial sponsors. Figure it out.

And stop wasting your time at these useless stupid tea parties. Many of these events are headed by radio talking head propagandists. These are the same lying idiots using rudimentary psychological tactics to seize control over your mind. They position themselves on the side of the people when this simply isn’t the case. You’ve been fooled. Figure it out.

These are the same scumbags who bitch about bailouts and government control, yet they advocate billions of dollars in Wall Street bonuses and criminal CEO compensation. They connect with your “sense of patriotism,” then hijack your mind with lies and manipulation. This is the same tactic they used when pushing for the war in Iraq. This is the same tactic parents use on toddlers.

Are you really that stupid to not see how you have been fooled? You are a kid being fooled by adult idiots and liars.

Most of the participants of these tea parties are mad as Hell, but they have been fooled into blaming Obama and the Democratic Party for the mess America finds itself in, when the fact is that it’s a Washington problem. Where were these tea parties last year when the Bush administration got the bailout ball rolling?

Most Americans not only have very short memories, they simply aren’t that bright.

Tom Konrad, PhD:

To massively oversimplify one of Taleb’s major points, we tend to place too much weight on likely and easily imagined events, and not nearly enough weight on unlikely, difficult to imagine events.

So far my change in strategy has served me well since the market has been going up when I expected it to head down.

Lost a job?

The detached tail of the gecko continues to leap, lurch and lunge, sometimes in intricate patterns never before detected….

If I was a packrat I would ratpack these.

Our nearby Heirloom Tomato crowd is hoping tomato vines are another wine biz. Speaking of wine. Didya believe the studies showing blindfolded wine connoisseurs are fooled by cheaper wines? Is buying prestige “getting a placebo effect from a drug when you know it’s a placebo“?

Fair Examination at Vanity Fair:

As the Bush administration waned, the Treasury shoveled more than a quarter of a trillion dollars in tarp funds into the financial system—without restrictions, accountability, or even common sense.

Some measure of scrutiny and control has since been imposed by the Obama administration, but even today it’s hard to walk back the cat and trace the money.