Archive for February 26th, 2008


Another off-balance sheet time bomb: VIEs

As if there weren’t already enough toxic “investments” like CDOs and SIVs to crater the balance sheets of investment banks and hedge funds, here comes the VIEs (variable interest entities) and they could make subprime writedowns and carnage look small by comparison.

VIEs were designed to keep investments off balance sheets. But that may no longer be possible

Citigroup, which has incurred $22.1 billion in losses from the subprime crisis, has $320 billion in “significant unconsolidated VIEs,” according to a Feb. 22 filing by the New York-based bank.

The securities in the VIEs may be worth as little as 27 cents on the dollar once they’re put back on balance sheet.

That would mean a writedown of $233bn. Can’t see how any bank on the planet could take a hit like that and survive.

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Fear, uncertainty and doubt in the UK


Adam Curry blogs
and podcasts about the new Orwellian “fear mongering campaign” in Britain, with the government running ads encouraging people to report those who, are you ready for this, take too many photos of buildings, behave suspiciously, or have too many cell phones.

You don’t have to know if they are doing any thing wrong, just call the anti-terrorism hotline
and we’ll determine that for you, they say.

Scary stuff. Britain already has way more surveillance cameras than other nations too.

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The Air Car

Minicat Air Car
Coming to the US by 2010. It runs on compressed air. Seriously.

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Marxist groups, organizing, and clowning

clown
(This is the first of a series of posts in the wake of my post, “I got purged” from a far left grouplet.)

Among the socialist Left exists a multitude of little Marxist groups and parties. Too often, they secretly (or even not so secretly) believe they have the “correct program.” Thus, they see their task as convincing everyone else of the errors of their ways and then recruiting them into their faction.

Such groups are, of course, most often vexed by the little Marxist grouplet next to them whose program deviates ever so microscopically from theirs. Too often the result is lunatic infighting and splinter groups breaking away from other splinter groups.

The problem is not only are their parties microscopic in size, they also only recruit from those already on the hard left, and not from the masses at large. Thus they aren’t representative of the working class nor are they leading it, even though they claim to be.

Lenin, who they frequently quote (if not worship), recruited and attracted people from all levels and segments of the populace. Tens of thousands were members. His party, at least in the beginning, had competing newspapers (and thus apparently felt no need to have a “correct program.”)

The idea that a group of a few hundred people who are not in the leadership of any mass movement, much less integrally involved in leading the working class as a social force, can be referred to as a Leninist party and having a “correct program” would never have crossed Lenin’s mind. In 1918 Lenin would refer to such an idea as clowning.

By the 1940s, however, within the Trotskyist movement a conception had taken root that no matter how small or disconnected from the workers movement a group might be, if it had the “correct” program and a cadre, it was a Leninist Party and would eventually “win”.

This was the “proven” Leninist way. What the Trotskyist movement did as a whole was drop the direct involvement with the living mass movement as a prerequisite for the development of a party. Thus “program” was separated from its social roots.

Thus, they aren’t even trying to build a mass party, but rather assume the rightness of their ideas will somehow, someday, win them mass followers who will then rise up and smash capitalism with a mighty blow (with them in charge, of course.)

Lenin’s argument was that the discipline and unity required of a party that can lead a revolution is only built up politically through the class consciousness of the vanguard of the working class, its ability to link up with the broadest masses and ability to exercise political leadership over the masses. He said: “Without these conditions all attempts to establish discipline inevitably fall flat and end up in phrase-mongering and clowning.”

The ability to “link up with the broadest masses” is precisely what many such parties are incapable of doing. Often because they have no clue how to do so. Nor do they want to. Organizing on a mass level means there will be factions and disagreements within the group (this is a healthy thing and quite normal.) But groups that believe in their own inerrancy and “correct program” can’t allow competing ideas. So they, by dint of their own self-limiting agenda, can never become large and thus doom themselves to remain tiny as well as irrelevant to the working class at large that they pretend to represent.

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Google founders climate change conversation w. Tom Friedman


Taped at Davos 2008. Google is in the forefront of working to remediate global warming and is spending lots of money to do so, including their nonprofit, Google.org, which targets other issues like poverty too. One of their primary goals is to make renewable energy cheaper than coal, with an initial emphasis on solar thermal, deep geothermal, and high altitude wind.

36 minutes and worth listening to.

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FDIC bracing for bank failures

The Federal Deposit Insurance Corp expects there will be over 100 bank failures in the next year or two, especially in the Rust Belt, California, Florida, and Georgia. Yikes.

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A trend that will never reverse itself

People now spend twice as much time on the internet as watching TV.

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World’s first positive energy mixed-use building

Masdar headquarters
This 1.4 million sf building for Masdar City in Abu Dhabi will the first mixed use building to create more energy than it uses. Which is certainly impressive. Another building, a Russian tower will be the tallest in Europe and will have natural ventilation.

Not sure where all the ultra green US buildings are. Are any being built? Huge buildings like these can certainly be used to create new green technologies that eventually will benefit all. But they are also really just for the ultra wealthy and no doubt will have Robocop security with hundreds of surveillance cameras, etc. No “affordable condos” will be available inside them either, I’m guessing. The areas around them will be empty, with no vibrant street life, perhaps just parks that might as well have signs that say Poor People Stay Out.

While the greentech in these building is certainly laudable and breathtaking indeed, I wonder about the model of having mega-buildings plopped in the middle of cities, eliminating all other buildings for blocks and blocks around. Parts of L.A. are like that, around the Disney Hall and MOCA. Spectacular buildings, but hardly any pedestrians on the streets.

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