Friday, April 30, 2010

Happy Friday

Government officials said the blown-out well 40 miles offshore is spewing five times as much oil into the water as originally estimated – about 5,000 barrels, or 200,000 gallons, a day.
At that rate, the spill could eclipse the worst oil spill in U.S. history – the 11 million gallons that leaked from the grounded tanker Exxon Valdez in Alaska's Prince William Sound in 1989 – in the three months it could take to drill a relief well and plug the gushing well 5,000 feet underwater on the sea floor.
Ultimately, the spill could grow much larger than the Valdez because Gulf of Mexico wells tap deposits that hold many times more oil than a single tanker.
As if the folks in the delta needed any more pain in their lives...

Monday, April 19, 2010

Not Quite Hyperbole

but it is the guardian

still - the conclusion raises a fair point...
what are banks for... why do we have them... and if taxpayers and directors of federal reserves are busy backstopping the loans and controlling the economy through managing the rates of investment... why not cut out the middleman?

There will still be a role for banks in the world - but lets get them away from the day to day things that actually put the world economy at risk... they're obviously willing to burn the place down for a few bucks...

Nanny Continent

So BA is complaining about how airspace has been closed all over europe because of the volcanic ash...
You'd think they'd understand the problem but i guess not... they're just executives.
I'm sure there are a million americans just as upset over the prospect of the government telling them when they can and cant fly a 600,000 lb box of aluminum and titanium through clouds of debris. What we need is a NYTimes article on 'why it's not safe to fly' so they can cement their belief that it's all lies, a freeper article to stoke the flames of anti-factualism, and an airline made for failing. Hey - those goldman boys made a couple billion - we could even collateralize the debt with companies that want to build Hindenburg II and Titanic Reborn, then buy insurance against it failing at 100x the actual debt - who cares if the insurer isnt solvent to begin with - the feds will pick up the tab!!!11!1 Everybody wins!!!

in the mean time - goldman payed out 5b in bonuses last quarter - half of it to those in the group responsible for the SEC suit... happy monday.

Saturday, April 17, 2010


What happened with that Goldman thing...

the short version

Goldman knew for months it was the subject of an investigation here. The gist of it is that someone who was responsible for picking the securities in a collateralized debt obligation (CDO) had a vested interest, through goldman, of it failing. The theory is you're supposed to put all this sort of stuff in a prospectus... but those aren't generated until after the sale anyway (welcome to idiotland for regulation). So they're going after Goldman for this - in a way it's not much different than what they were doing with Greek debt, only writ much smaller.

It's a speeding ticket.

In the mean time, knowing that with a couple of flabbergasted statements and angry uncomfortable looks they could spook the market... and knowing that it was options experation day... the thing is - if you come to the last day and know the market is going to move a LOT - you get an unbelievable amount of leverage... And they played that hand BIG yesterday - betting that the news of the assault on them would drive the S&P down and then feeding into it. They made tens of millions - on paper in public - something that wouldn't have been possible if the SEC had done this on a day other than options expiration day... and that's in the above the board world. Imagine what such a substantial movement of options contracts does to the trillions and trillions of off balance sheet derivatives.

What's going to happen?
No one will change the fact that CDS is gambling backed by the US Treasury implicitly through the fact that we, the taxpayers, will always be left with the bag if they fail.
Fabulous Fab will be prosecuted...
Goldman will agree that there's the 'perception of fraud' without agreeing that they did anything illegal...
They'll pay a record fine (much less than they made shorting yesterday)...
and Fabulous Fab will be out in a couple years running his own hedge fund (with money drawn from those who profited by all of this).

The politicians will get nice fat contributions...
the lawyers will get nice new cars...
and the country will be one step closer to the bottom of the drain.

There's no 'fixing' this. It's a cancer that's spread too far.

Tuesday, April 13, 2010

New Old Ideas

I know.. i'm sure others have long since made the connection here... but i was reading about rats in a prisoner's dilemma test and the piece that struck me wasn't that rats are crafty bastards that played the game the way people do... it was the bit about what happens to the results when they're hungry.
If it's true that amongst rats, the drive to work out the 'everyone wins' cooperation is better than screwing people over solutions is adversely affected by the need for the reward... i wonder if that isnt also true amongst people. So the worse the economy gets, the less able people are to think through consequences clearly and just grab at whatever seems like the best thing in front of them.
This seems to me to be a behavior that would be easy to exploit to economic advantage... imposing stress on a collective would tend to make them far less productive - as they stop working together to solve problems. As I think back to the TED spread mess a year ago - and forward to the impending commercial real estate collapse - i think i see a lot of rat-like behavior.

Friday, April 09, 2010

As I was saying...

I have no problem with the concept of war as an absolute as detailed by Clausewitz... it's a sound philosophical argument that refuses to back off the fact that, sometimes, the only way to solve a problem is to kill the other guy (and everything that helps the other guy). I get it - and our german friend made it pretty clear that when you've gotten to that point - you really need to stop worrying about who you're killing until such time as you decide that it's over.

But if that's how we're going to fight wars - we need to be a LOT more careful about whether we get into them. If the rule is 'war means everyone over there can die at any time' - ok... but you have to SELL it that way to the American people. Don't tell them we're careful - we only kill bad guys - and then tell US Army Snipers to "shoot all the taxi drivers". You can't have it both ways.

Monday, April 05, 2010

The next time...

someone tells you 'they hate us for our freedoms' i hope you remember this video that wikileaks released today:

There are a lot of reasons to dislike america... but the fact that we're able to see something like this and realize how corrupt and evil our government can be is one of the reasons to love the place (even though it means we see truly awful crap like this).

Dont tell me 'it was war - shit like this happens in war'... what we had was a bunch of kids playing video games, lying about what they saw - saying what were clearly civilians were carrying weapons (a camera is not a gun... it's not an RPG) - claiming they were in a hostile situation - shooting them up - then spending years covering it up so they didnt have to admit it.

Oh sure - in the past massacres have been worse - i was, afterall, a history major... but for every video like this, how many hundreds if not thousands of others happened just like it? How many more atrocities were committed by US troops that DIDNT get a leaked video... i've heard anecdotes from some who've been over there, who've said it was much worse than we've been told, who've said they couldnt talk about it... is this aberrant? or is it, as i believe, systemic?

Asking a soldier to 'think' about what they're doing before they do it makes their jobs a lot harder... it's dangerous... if there's a camera watching, and they have to worry about repercussions, then they'll hesitate and that might cost them their lives. But if they DON'T hesitate, and consider what the fuck they're doing, then you're going to get THIS - over and over and over. It turns out that that our leaders are all very aware of this calculation - ie it IS systemic... and 'we the people' dont want to be reminded that our hands are bloody. Afterall - the lead story on CNN? Tiger Woods playing a practice round of golf...