Bob Morris @ Sep 30th 2008 22:22 - Category: Election 2008 Tags: Palin;
Xeni Jardin of BoingBoing twitters BB comments on Palin
BB commenter describes the would-be VP’s “dinosaurs and men once coexisted” fundamentalist beliefs as “Palintology”
“Don’t be silly. Their candidacy is crystalline evidence that a dinosaur and a primitive human can coexist.”
Bob Morris @ Sep 30th 2008 18:09 - Category: Unfiled ;
This innovative concept combines the bus and train into one. By switching wheels, it can drive on a highway or on train tracks, thus getting people to destinations faster and easier. Sounds fascinating but I wonder, how long does it take to change the wheels?
Bob Morris @ Sep 30th 2008 14:48 - Category: Unfiled ;
This chart shows the final hour of trading in Google today. It is off-the-charts weird.
Clusterstock has a not even slightly safe for workplace post of quotes from traders who jumped on the bizarre swings in Google stock in the closing minutes only to have all their trades killed. They think one of the big firms screwed up, placing an order for 10 million shares when they meant 10 thousand. But they got the trade killed, something that would never happened to a small trader.
Please note that one of the rants is by a trader who risked $1 million here (yeah, that’s a small trader), and would have had a huge profit, only to have the trades killed probably because someone way more powerful had their blunder forgiven.
Let’s see, they’ve temporarily banned short selling to prop up the financials and now apparently routinely kill trades to protect major players who screwed up. And this is supposed to be a free market with a level playing field?
PS TechCrunch quotes a hedgie who says it was a “data glitch.” Gee, that would be a mighy big glitch, wouldn’t it? Among other things, I’m a database programmer. When someone says a huge error was caused by a glitch, trust me, it is almost always human error instead.
And if it was a data glitch, then something is seriously wrong with the software.
Bob Morris @ Sep 30th 2008 14:18 - Category: Credit crisis ;
Fenian Rising says ” we need an alternative to this barbaric system” while Angry Bears opines that the wealthy are maybe dangerously clueless.
The Wealthy are poor Class War strategists. They are self defeating in such a way that they remove all ability for either side to win the Class War. The Wealthy must let the Enemy win the war in order for the Wealthy to win. I would caution that any approach toward a treaty by the Enemy to the Wealthy must be taken with care. It is not certain as to whether the Wealthy have the strength of character to accept that they are failures. By evidence of their tactics in the face of the data, forming a treaty with the Wealthy who act irrationally will be met with great frustration by the Enemy.
As the economy worsens, and it will, class distinctions will become even more pronounced. Judging from financial blogs I read, more than a few wealthy investor types really don’t get it about how angry people are getting. And we’re just seeing the leading wave of the anger now, it’s a populist upsurge coming out of seemingly nowhere. Of course, it’s been building for years. Now it’s in the open.
Populism can be a powerful force for the good, like the kind that Jim Hightower preaches. But it can also get ugly, as in the blaming of immigrants and foreigners for the problems or stoning the limos of the wealthy (or worse.) Actions like that just increase the ugliness and division and lessen the chance of real solutions. I hope we don’t go that route.
Bob Morris @ Sep 30th 2008 06:24 - Category: Energy conservation ;
Once again, our little friends from the algae kingdom show they can do astonishing things!
Right now, this pilot project at an Oregon coal plant is minuscule, but when it goes commercial, it could reduce emissions as much as 60% during the day and produce 20 million gallons of biodiesel per year.
Bob Morris @ Sep 30th 2008 03:23 - Category: Unfiled ;
Bob Morris @ Sep 30th 2008 00:21 - Category: Election 2008 ;
Doc Searl’s sister tells why.
Bob Morris @ Sep 29th 2008 22:21 - Category: Renewable energy Tags: tidal power;
ScottishPower Renewables plans to build tidal turbine farms in the Pentland Firth area of the Orkneys, which has been called “the Saudi Arabia of marine energy” because of its powerful tides. The tidal farms could provide power for as many as 40,000 homes.
Bob Morris @ Sep 29th 2008 14:12 - Category: Unfiled Tags: gas shortages;
Much of the Southeast is facing severe gas shortages.
Bob Morris @ Sep 29th 2008 10:58 - Category: Credit crisis ;
Good. At least some members of the House are listened to their constituents and rejected the bailout and the doublespeak idiocy of Speaker Pelosi who said ” it wasn’t a bailout but a ‘buy-in’ for taxpayers to rescue the economy.
The populist uprising in the country continues to surge.
Bob Morris @ Sep 29th 2008 09:21 - Category: Credit crisis Tags: bailout, Cindy Sheehan;
Today Mon. Sept. 29th 4 pm
San Francisco Federal Reserve
101 Market (at Stearns. Embarcadero BART.)
From Cindy Sheehan’s listserv:
In response to the bipartisan “done deal” of the Wall Street bailout plan, Cindy for Congress is calling for another non-partisan protest in front of the Federal Reserve Bank: 101 Market (corner of Market and Stearns) at 4pm on Monday, September 29th.
This could be sizable. Sue and I will be there.
Bob Morris @ Sep 29th 2008 08:38 - Category: Credit crisis ;
From the financial pages of the Telegraph UK. It’s gently mocking, not harsh. But still mocking.
Bob Morris @ Sep 29th 2008 05:20 - Category: Unfiled ;
“Has Sarah Palin been picked as the titular head of the coming police state?”, asks Naomi Wolf.
My answer: No.
Journalists were arrested [at the RNC] — for reporting. Amy Goodman and ABC producers were arrested. Jane Hamsher of Firedoglake and others were forced to lie face down as armed agents tied their hands behind their backs.
This is not new. It happened repeatedly in the 60’s. We survived.
The riot police wore the black S&M gear of the Rovian fantasy life and carried the four foot batons cops carry in North Korea. All this is not John McCain’s imagery or strategy: it is Karl Rove’s.
How can she possibly know what Rove’s fantasy life is? Just wondering. Saying that the militarization of police is a Rovian plot grants way too much power to one person in addition to being more than a little Black Helicopter-ish. . Some perspective, southern cops in the 50’s did much worse things to nonviolent civil rights demonstrators than just cuff them on the ground. And - don’t forget - we eventually won that battle, against what at the time often seemed insurmountable odds.
Back in the 60’s-early 70’s, like now, there were dark rumors that the president (Nixon) was secretly setting up concentration camps for dissidents, would cancel elections, roll in the tanks, and that a police state was just ’round the corner. Didn’t happen, did it?
Wolf has done many important things, but if you posit the opponent as all-powerful and all-controlling, then you can paralyze yourself into inaction. Maybe it’s more like the Wizard of Oz. A little man with some machinery. Seems to me if you take that view, you will then be more optimistic and thus have a better chance of accomplishing your goals.
“Paranoia strikes deep / Into your life it will creep / Starts when you’re always afraid.”
Bob Morris @ Sep 29th 2008 04:15 - Category: Credit crisis Tags: bailout;
More from Sue:
Dear Congressmember
Please vote “no” on the revised bailout package, because it contains toothless safeguards for preventing abuses in the billions of dollars.
First: What good is a law that prohibits the Treasury from buying assets at a cost above what companies actually paid for them? The problem is that those assets are near worthless, and the financial institutions know it — which is why the credit markets have seized up. The CDO’s were “only paper” and therefore fraudulent from the beginning and massively overpriced. If you can’t reach through an agreement and seize the collateral in satisfaction upon a default, then the agreement is not “collateralized” in any meaningful sense. Credit default swaps, which are insurance contracts issued by companies without the necessary capital to back them up, are also by definition fraudulent.
There is no difference, philosophically, between CDOs and credit default swaps and the securities issued in 1919-21 by Charles Ponzi vis-a-vis purported international postal reply coupon arbitrage. There is no difference between these sham paper transactions and tulip bulb mania of 1636-37.
If the Treasury buys these securities for any more than pennies on the dollar, the American people will be cheated.
Second: Supposed restrictions on executive compensation are no more strict than current tax laws. There is no law capping executive compensation. Under Internal Revenue Code section 162(m) no tax deduction is allowed for corporations related to a CEO’s compensation above $1,000,000. But of course there’s a loophole, which is: It doesn’t apply to compensation the employee *actually earned* — by which they mean the payment of commissions, and payment for meeting performance goals preapproved by the BoD and shareholders. Performance goals can be as meager as you want them to be.
Under IRC 280G, no tax deduction is allowed for an “excess parachute payments” in connection with a “change in control” in the ownership of a corporation’s stock. The excess parachute amount is defined as the “excess amount” over a “base amount.” The base amount is the average of compensation for the last five years (however high the amount). There is no “excess golden parachute” unless the payment is equal to or more than 3 times the 5-year average. The law applies to all employees in highest paid 1% of employees of the corporation or, if less, the highest paid 250 employees of the corporation.
I can’t see that there is any difference between the law proposed and those already on the books. Also please consider that a tax penalty on a company that is already doing poorly (and therefore does not really need the deduction) isn’t a meaningful penalty.
Third and most alarming: The SEC will now be able to suspend “mark-to-market” rules? Isn’t this the same as telling companies they can now lie on their financial statements with impunity? Isn’t lack of transparency a main reason that financial companies got us into this mess in the first place? Isn’t this a primary cause of Japan’s “lost decade” – allowing banks to keep worthless securities on their books for years, without marking them down to their actual value? This is a horrible provision that should be opposed with all of your might.
Sincerely,
Bob Morris @ Sep 29th 2008 03:32 - Category: Credit crisis ;
From Sue, a CPA
There are already limitations on executive compensation, and they already take the form of disallowing tax deductions and a tax penalty on the person receiving the compensation. There is no law capping executive compensation (yet).
First, there is no tax deduction allowed to corporations for compensation above $1,000,000. But of course there’s a loophole, which is: It doesn’t apply to compensation the employee *actually earned* — by which they mean the payment of commissions, and payment for meeting performance goals preapproved by the BoD and shareholders. These rules are under Internal Revenue Code section 162(m).
Second, there is no tax deduction allowed for “excess parachute payments” in connection with a “change in control” in the ownership of a corporation’s stock. The excess parachute amount is defined as the “excess amount” over a “base amount.” The base amount is the average of compensation for the last five years (whatever the amount). There is no “golden parachute” unless the payment is equal to or more than 3 times the 5-year average. The law applies to all employees in highest paid 1% of employees of the corporation or, if less, the highest paid 250 employees of the corporation. These rules are under Internal Revenue Code section 280G.
There appears to be no difference between the laws already on the books and those proposed in the Wall Street Executive Full Compensation Guarantee Act (aka Bailout Package)
Bob Morris @ Sep 29th 2008 00:18 - Category: Unfiled ;
California Governor Arnold Schwarzenegger — one of the first civilians to own a Hummer — told car manufacturers in Detroit to “get off your butt” and stop living in the past of huge SUVs and cheap oil prices.
Bob Morris @ Sep 28th 2008 21:13 - Category: Credit crisis ;
Clusterstock has the gory details. Here’s their rundown of two of the most loathsome provisions.
“Preventing Unjust Enrichment”: Treasury can’t pay more for the crap assets than the banks bought them for (a horrifying possibility, given that most of the securities have already been written way down). This provision, however, doesn’t apply to banks who acquired the assets via mergers or to banks in bankruptcy or conservatorship. It also means that the Treasury can and will pay far more than market value for this garbage (and, thus, go against the advice of Warren Buffett and Bill Gross, among others, who recommend paying market prices).
Executive compensation at bailed-out companies. Toothless: The plan ostensibly prohibits golden parachute payments to CEOs and other “C-level” execs at bailed-out companies. However, it really only prevents payments on severance deals that are struck AFTER the bailout.
Congress has now almost completely ignored the will of the people, who are strongly opposed to the plan. They said they would stop the most obnoxious parts of the plan but for the most part have done nothing of the sort except to pretend they have by tossing up a few transparent fig leafs.
Bob Morris @ Sep 28th 2008 18:38 - Category: Credit crisis ;
Tip: Dealbreaker
For those who may not know, Paulson is a past CEO of Goldman and the government did not deem this a crisis until Goldman stock start getting hammered and was dropping precipitously. It was only then that they swung into full damage control mode.
Bob Morris @ Sep 28th 2008 18:18 - Category: Unfiled Tags: homelessness, HUD;
Department of Housing and Urban Development (HUD) says homelessness is down. Yup, their statistics show that there is less homelessness now not more. What, you think that’s odd, given the slowing economy, that maybe HUD fudged their figures?
Well, you’d be correct. Except it’s more like an entire fudge factory than just one piece of fudge. HUD redefined what is meant to be homeless, thus removing many who had previously been counted.
HUD says they’re doing this to put on a happy face, because if the numbers were big, then people might get all frowny and despondent and not want to help. So, HUD is making the numbers smaller on purpose in hopes that this will motivate people to help. No, I am not making this up.
Of course, given the huge numbers of lies the Bush Adminstration has told over they years, do you suppose maybe that homelessness is actually way up and neocon HUD flacks are deliberately are falsifying the numbers?
Bob Morris @ Sep 28th 2008 10:45 - Category: Unfiled ;
First were subprime mortages. Bankers and the real estate industry were making zillions selling subprime, then pacakaging them into investment vehicles. so, it behooved everyone to pump out as many mortgages as possible because, after all, prices will never fall again.
The mortgages were assembled into CDOs
A CDO is a corporate entity constructed to hold assets as collateral and to sell packages of cash flows to investors.
Then, everyone bought and sold CDS on them. These are a form of insurance, but couldn’t be called insurance because that would be illegal. besides, nothing could ever go wrong, so why worry about defaults.
A credit default swap (CDS) is a credit derivative contract between two counterparties, whereby the “buyer” or “fixed rate payer” pays periodic payments to the “seller” or “floating rate payer” in exchange for the right to a payoff if there is a default.
This means mortgages were packaged into bonds that were sliced and diced by risk levels into CDOs, and then everyone bought and sold pseudo-insurance on them, further fattening their cash flow. Yes, it’s all air, nothing of value that created jobs or companies (except to a tiny few) was accomplished by any of this. The robber barons of a previous era may have been pirates, but at least they created stuff, like railroads, steel companies, the oil industry, etc. These arcane financial instruments created nothing of lasting value.
Unlike stocks that can be bought on the open market, CDOs and CDSs are private, unregulated transactions. Their notational amount is in the many, many trillions. All manner of banks, pensions funds, etc. hold them.
Everyone partied for a long time of this, making enormous profits. The functioning of these markets depended primarily on two things, 1) real estate had to keep going up in value. 2) Since most these debt instruments were funded by borrowing cheap short-term money and “investing” it long-term, it was essential that the spigot of cheap short-term money continue. Alan “Greed is Good because Ayn Rand said so” made sure this was true for a long time.
However, the inevitable happened, housing prices fell and the cheap money went away. Hence the debt instruments tanked in value. But, unlike a listed stock, you can’t just sell them. In many cases, there are no buyers.
That’s when the financial markets began to lock up. Worse, everything is interlocked. Lehman goes bankrupt. How many CDSs do they have that they can no longer make good on? Will, say, a bank in Britain or a pension fund in Florida suffer big losses because of this? The point is that the shadow banking system, as it is called, is so murky and opaque, that no one knows how many icebergs are out there waiting to sink financial ships or even where they are.
Right now, credit markets are frozen. Hedge funds are facing massive redemptions and are dumping whatever they can. Lots of normal businesses that routinely borrow short-term money to make payroll then repay quickly out of A/R are finding interest rates are much higher or the money just isn’t available. So, this is having serious, real-world effects.
Jason Calacanis, who founded weblogs.com and sold it to AOL, on the current situation (via his listserv)
It’s my believe that the economic downturn will be much worse than it is today, and that 50-80% of the venture-backed startups currently operating will shut down or go on life-support (i.e. 3-4 folks working on them) within the next 18 months.
To conclude - yes, the whole system was insane, unworkable, doomed to fail, based on greed, and too many got wealthy by plundering the system and destroying companies in the process. Yup, that’s all true. And we need to fix things so greedfests like this can’t happen again.
But this isn’t some made up crisis designed to benefit the fat cats. No, it’s a real, looking into the abyss, worldwide financial crisis.
Bob Morris @ Sep 28th 2008 05:36 - Category: Credit crisis ;
This is part of an email response Sen. Dianne Feinstein (D-CA) is sending to constituents who contacted her opposing the bailout.
Californians are frosted by the absence of controls on executive compensation. Virtually all of the 50,000 phone calls and letters mentioned this one way or another. There must be limits. I am told that the reason the Treasury Secretary does not want limits on executive compensation is because he believes that an executive then will not bring his company in to partake in any program that is set up. Here is my response to that: We can put that executive on his boat, take that boat out in the ocean, and set it on fire.
This is extraordinarily blunt language for a senator to use.
Bob Morris @ Sep 28th 2008 00:37 - Category: Credit crisis ;
From Naked Capitalism (and indeed, it doesn’t get much more naked, greedy, and self-serving than this.)
Gretchen Morgenson in the New York Times reports that Goldman and no other Wall Street firm was involved in the AIG rescue talks and an AIG failure would have created a hole as big as $20 billion in Goldman’s balance sheet.
This is special dealing, pure and simple. Even if AIG needed to be salvaged (there was considerable agreement on this point), having Goldman deeply involved in the process is cronyism. But that’s been a staple of this Administration.
Indeed. the government only really got concerned about the crisis when Goldman stock started getting hammered hard and was dropping like a stone. That’s when they intervened.
Bob Morris @ Sep 27th 2008 21:15 - Category: Unfiled ;
The long lines and closed pumps seen across the South this week are a warning: inventories are way too low.
The problem is that Hurricane Gustav and Ike knocked out refinery production that is still not back online, and supply was already barely keeping up with demand. So, the possibility of continued, severe shortages is quite real, especially in the South.
Hmm, and if this should happen in the South right before the election, well, that would be a nightmare for Republicans, as voters tend to blame the incumbent party for such things.
Bob Morris @ Sep 27th 2008 17:32 - Category: Credit crisis ;
John Robb says local communities need to act now to delay or eliminate foreclosures, else the coming tsunami of foreclosures triggered by the financial crisis will create crime-ridden ghost towns and the collapse of local governments.
He cites a Philadelphia program that could be a model here. They require get borrowers and lenders to enter a conciliation process. Surprisingly, banks like the idea, because renegotiating terms is cheaper than foreclosure.
Robb’s main thesis now is that we need to build “resilient communities.” Now. As the federal government hollows out, they will be less able to provide assistance. Thus, much more can and should be done at the local level.
Bob Morris @ Sep 27th 2008 13:16 - Category: Unfiled Tags: Led Zeppelin;
Led Zepplin is doing a reunion tour!
People who were at the one-off show they did in December said Zep knocked the ball out of the stadium, that it went beyond great and into the realms of historic.
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