Friday, October 31, 2008

Thus spake Sarahthustra

From here: "If the media convince enough voters that that is negative campaigning, for me to call Barack Obama out on his associations, then I don't know what the future of our country would be in terms of First Amendment rights and our ability to ask questions without fear of attacks by the mainstream media."

Except that the First Amendment is supportive of free speech. When the press asks questions, it means that they are enjoying the benefits offered by the First Amendment. When Gov. Palin asks questions of Barack Obama on his associations, she is exercising First Amendment rights... The future of the country is bright when the press can call out on negative campaigning and Gov. Palin can call out on 'made up' associations... I am not too sure if she has a fair idea of the implications of what she says when she seems to shoot from the hip impromptu... For an individual who has lived most of his life in a 'third world' country, pronouncements that are part of the First Amendment are synonymous with liberty...

The First Amendment: Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

Pumpkins inspired

Carved pumpkins... (via Kottke)

Friday Quotable

“Prostitution is the last sexual territory owned by men. Men are in control of pleasure and have the right to buy it. Women do not. A lot of my friends are alone, lonely, divorced. They can’t always reinvent themselves with another man and a new family. So I decided to show a female client of a male escort. She’s not a victim. She is a woman who is in control of her life, her feelings, her sexual pleasure."

- Josiane Balasko, 58, the director, author and actress in the new movie 'Cliente', about a 51-year-old television shopping-channel anchor and director who, after her marriage falls apart, wants good sex without strings and is willing to pay handsomely for it.

Thursday, October 30, 2008

Faux news of the web

I was just scanning Mr. Drudge's eponymous site for wingnut headlines and I was not really surprised to find out that the site has morphed into the fox news channel of the web. Here are a couple of entertaining selections from today.

Nettlesome numbers


Even if numbers bore most people, it is important to get ones head around some of the taxpayer money wasted by the quagmire in Iraq.

A report by the Government Accountability Office (GAO) estimates that Iraq will generate $86 billion this year from oil revenues.

The box on the left shows the amounts allocated in the budgets for stabilization, electricity, security and water resource development in Iraq. It is indeed striking that while similar amounts were allocated (~$30 billion) by both Iraq and America, we have managed to spend 70% of our taxpayer money on Iraqi infrastructural development while Iraq (who is already flush with $86 billion this year from oil revenues) has spent only a little over 10% of its own money. Why are we even financing their reconstruction when they have the money to do this?

A final bit of sobering news is that the Iraq war is costing approximately 12 billion taxpayer dollars a month according to Nobel laureate Joseph E. Stiglitz.

Image from the today's New York Times newspaper.

Barack Bashing Chronicles

Why is the Los Angeles Times withholding a video of Barack Obama meeting a Columbia University professor (Rashid Khalidi) five years ago. OK, Rashid is known to be a Palestinian rights advocate. So what?
Even if this is meeting was known to all in the media for the last six months, we know the McCain camp will dredge the last drop of s*** in trying to slime Obama. The LA Times should just release the video. Of course, five days before the election might not be the greatest timing, but then opportunism is what the McCain camp is all about...

From here: The video shows a gathering in Chicago for Rashid Khalidi, a teacher, writer and Obama friend who is critical of Israel. Mr. Obama spoke at the dinner, where other speakers likened Israel and Israelis to terrorists. The McCain campaign said the tape could show how Mr. Obama reacted to anti-Israel remarks. Mr. Khalidi, now a professor of Arab studies at Columbia University, opposes Israel’s occupation of territory it seized in the 1967 war and has defended Palestinian resistance to the occupation. He advised a Palestinian delegation at a 1991 peace conference and has written several books on the Middle East.

Of course, the conditions under which this newspaper obtained the video is also important to consider: The LA Times obtained it from a source on the express condition that the video itself not be released. The LA Times did run a story disclosing the contents of the video, presumably with the permission of the source, but they have stated that "the Times keeps its promises to sources."

Update: A Reader points out the following (source here):

John McCain served as Chairman of the International Republican Institute (IRI), hich gave out grants to different organizations including the Palestinian Research enter, which was headed by, wait for it, wait for it - Rashid Khalidi. In 1998, a tax filing from IRI shows $448,873 that went to Khalaidi’s group. The relationship existed for at least 5 years as in 1993 IRI funded several of Khalidi’s studies on “sociopolitical attitudes.” No one is calling John McCain a terrorist. No in is calling into question John McCain’s patriotism. And the same should be true for Barack Obama.

Wednesday, October 29, 2008

Wednesday's Quotable

Obama on the trail today in NC:

I'm sorry to see my opponent sink so low. Lately, he's called me a socialist... By the end of the week, he'll be accusing me of being a secret communist because I shared my toys in Kindergarten.

via TPM

Socially conservative teenage sex

New Yorker has a helpful piece on the reasons behind the high incidence of unwed teenage evangelical women becoming pregnant and the naive nonchalance that evangelicals display to this phenomenon. Helps also understand why socially conservative Christian families like Bristol Palin's seem to be OK with what seemed like devastating news to others...

Like other American teens, young evangelicals live in a world of Internet porn, celebrity sex scandals, and raunchy reality TV, and they have the same hormonal urges that their peers have. Yet they come from families and communities in which sexual life is supposed to be forestalled until the first night of a transcendent honeymoon. Regnerus writes, “In such an atmosphere, attitudes about sex may formally remain unchanged (and restrictive) while sexual activity becomes increasingly common. This clash of cultures and norms is felt most poignantly in the so-called Bible Belt.” Evangelical Protestant teen-agers are significantly less likely than other groups to use contraception. This could be because evangelicals are also among the most likely to believe that using contraception will send the message that they are looking for sex. It could also be because many evangelicals are steeped in the abstinence movement’s warnings that condoms won’t actually protect them from pregnancy or venereal disease.

Sharon Sprung, 'P in Red', Oil on panel, 40" X 44". A photograph that I had taken while at her exhibition at Gallery Henoch earlier this year.

Themeless pictures





Tuesday, October 28, 2008

Socialism reigns... Looks like all four are!

Obama the socialist (from here):

On October of 2008, in conversation with a voter forever to be known as Joe the Plumber, Obama gave one of his fullest summaries of his tax plan. After explaining how Joe could benefit from it, whether or not he achieves his dream of owning his own plumbing business, Obama added casually, “I think that when you spread the wealth around, it’s good for everybody.”
McCain the socialist:

During the 2000 campaign, on MSNBC’s “Hardball,” a young woman asked him why her father, a doctor, should be “penalized” by being “in a huge tax bracket.” McCain
replied that “wealthy people can afford more” and that “the very wealthy, because they can afford tax lawyers and all kinds of loopholes, really don’t pay nearly as much as you think they do.”
YOUNG WOMAN: Are we getting closer and closer to, like, socialism and stuff?. . .
MCCAIN: Here’s what I really believe: That when you reach a certain level of omfort, there’s nothing wrong with paying somewhat more.
Palin the socialist:

A few weeks before she was nominated for Vice-President, she told a visiting journalist—Philip Gourevitch, of the New Yorker — that "we’re set up, unlike other states in the union, where it’s collectively Alaskans own the resources.
So we share in the wealth when the development of these resources occurs."
Biden the socialist:
"We want to take money and put it back in the pocket of middle-class people," Biden said in an interview on ABC's "Good Morning America." Noting that wealthier Americans would indeed pay more, Biden said: "It's time to be patriotic ... time to jump in, time to be part of the deal, time to help get America out of the rut."

Brain activity peaks at 39 - downhill after that...

For those of us over 39 years of age, I am not too sure if you want to carry on reading this post after this point… Researchers at UCLA have concluded that neuronal myelination (the formation of myelin sheath around a neuron fostering fast signaling bursts in the brain) peaks at the age of 39 and then goes downhill after that.
The myelination of brain circuits follows an inverted U-shaped trajectory, peaking in middle age. Bartzokis and others have long argued that brain aging may be primarily related to the process of myelin breakdown.
The test they used was a little strange sounding to the layperson, but I guess it makes perfect sense in neuroscience circles...
To test their hypothesis, they used one of the simplest and best understood tests of central nervous system processing speed: how fast an individual can tap their index finger. The results supported what the researcher had suspected, that finger-tapping speed and myelin integrity measurements were correlated and "had lifespan trajectories that were virtually indistinguishable," according to Bartzokis. And yes, they both peaked at 39 years of age and declined with an accelerating trajectory thereafter.
Looks like we have downhill trajectory after 39:
After middle age, we start to lose the battle to repair the myelin in our brain, and our motor and cognitive functions begin a long, slow downhill slide.. Beginning in middle age, the process of age-related myelin breakdown slowly erodes myelin's ability to support the very highest frequency AP bursts. That may well be why, besides achy joints and arthritis, even the fittest athletes retire and all older people move slower than they did when they were younger.
All hope should not be lost though...
Since in healthy individuals brain myelin breakdown begins to occur in middle age, there is a decades-long period during which therapeutic interventions could alter the course of brain aging and possibly delay age-driven degenerative brain disorders such as Alzheimer's
My opinion: Finger tapping and intelligence are two completely different things. While on the one hand, finger tapping denotes physical dexterity and to some extent can be correlated to neuronal firing frequencies, intelligence (as yet qualitatively or quantitatively immeasurable) in many cases is not a measure of physical dexterity, but an amalgam of experience, environment and neuronal activity. This study certainly excludes the first two factors – life experiences and the effects of ones environment… Again, my humble opinion…

Taliban Talisman

I did not make up this headline: U.S. Mulls Talks With Taliban in Bid to Quell Afghan Unrest. It appears in todays Wall Street Journal.
The U.S. is actively considering talks with elements of the Taliban, the armed Islamist group that once ruled Afghanistan and sheltered al Qaeda, in a major policy shift that would have been unthinkable a few months ago. Current and former officials attributed the White House's policy shift to the influence of Gen. Petraeus. "I do think you have to talk to enemies," he said Oct. 8 during a speech to the Heritage Foundation, a conservative think tank. "You want to try to reconcile with as many of those as possible while then identifying those who truly are irreconcilable."

It is funny, Sen. Obama has been saying what Gen. Petraeus said on Oct 8th for a long, long time. Of course, that was spun by the wrinkle and the wink as talking and pallin' with terrorists.

Monday, October 27, 2008

Maybe we need some spreading of the wealth - II

Recession or not, Wall Street bonuses for this year tell us the usual story - it is a fixture that remains in spite of the turmoils and the bailouts.
  • Goldman Sachs has set aside about $6.85 billion for bonuses, or an average of $210,300 for each employee.
  • Morgan Stanley has $6.44 billion for bonuses, or $138,700 per person
  • Merrill Lynch has $6.7 billion for bonuses and set aside an average $110,000 for each employee.
What is especially egregious is that these very same banks were given taxpayer money to shore up their finances a couple of weeks back - part of the bailout package put together by Sec. Paulson.

Just as reminder, the mean annual wage for the average U.S. employee is about $40,690. (according to the May 2007 Bureau of Labor Statistics report). Time here has an article today on how the bailout will actually boost Wall Street bonuses.

We could use some distribution of wealth here...

Maybe, we need some spreading of the wealth...

I was out of the news cycle yesterday, but reading the Times this morning, I found some truth and candor from Sen. McCain - a rapidly dwindling commodity... Apparently Sen. McCain has publicly stated that he and President Bush do share a 'common philosophy'.

This is what Sen. Obama had to say and I think he is spot on:

It's a philosophy that says we should give more and more to folks at the top, to millionaires and billionaires, to the wealthiest among us, and that somehow it's all going to trickle down on the rest of us.

It's a philosophy that justifies spending $10 billion a month in Iraq while the Iraqi government sits on a huge surplus and our economy is in crisis.


Of course, McCain is also the individual who defined "middle class" as making as much as $5,000,000 per year. Yes, that is five million dollars. This sure is an interesting but useless philosophy as far as the common man/woman is concerned.

What is wrong with spreading some of that wealth around - pdf report highlighting income disparities? If one looks to the chart below (from the report), it is clear that the only thing that has remained stagnant was the ‘average wage incomes’. The disparity is so extreme that the axes scales have to be logarithmic such that the report could compare on the same page the disparities between CEO pay and the meager handouts that common working men/women take home. And, they have the audacity to say spreading the wealth around is a bad thing...

Sunday, October 26, 2008

Alaska's biggest newspaper, the Anchorage Daily News endorses Sen. Obama for president.

Photo/Poem




My god is a short god. My god wears jeans.
When he swims, he has a lazy breaststroke.
When he gardens, he uses his bare hands.
My god watches reruns of late night talk shows.
My god could levitate but prefers the stairs
and if available, the fireman’s pole. My god
loves bacon. My god’s afraid of sharks.
My god thinks the only way to define a country
is with water. My god thinks eventually,
we will come around on ear candling. My god
spits chaw. My god never flosses.
My god reads Proust. My god never
graduated. He smiles when astronauts reach
zero gravity and say My god, My god.
My god is knitting one very big sweater.
My god is teaching his terrier to beg.
My god didn’t mean for icebergs. My god
didn’t mean for machetes. Sometimes
a sparrow lands in the hands of my god
and he cups it, gently. It never wants to leave
and so, it never notices that even if it tried
my god has too good a grip, my god, my god.

(from Granta)

Barack Bashing Chronicles

Hilzoy is not too happy with the latest salvo... But this latest reference goes way, way below the belt...
An e-mail was sent to Jewish voters that likens a vote for Democratic presidential candidate Barack Obama to events that led up to the Holocaust. "Jewish Americans cannot afford to make the wrong decision on Tuesday, November 4th, 2008," the e-mail reads. "Many of our ancestors ignored the warning signs in the 1930s and 1940s and made a tragic mistake. Let's not make a similar one this year!"

Saturday, October 25, 2008

Saturday Photo


From a New Yorker review of the book Death with Interruptions by Jose Saramago that talks about eternal life in a country blessed (or cursed) with no death.

A country in which no one dies inevitably becomes a Malthusian zoo. Old people who were on the brink of death on New Year’s Eve simply remain on the brink, frozen in their desuetude. Undertakers, those selling life-insurance policies, and the directors of hospitals and old people’s homes are variously threatened with unemployment or overactivity. The state will soon be unable to pay for the maintenance of its citizens. And although this sudden utopia may now be the very best of all possible worlds, humans can always be relied upon to wreck utopias. Families with aged, infirm members realize that they need death to save them from an eternity of bedside care. Since death has not been suspended in neighboring countries, the obvious solution is to transport ailing Grandpa over the border, where death will do its business. A Mafia-like organization takes over these death runs, an operation secretly connived in by the government, since no state can afford infinite expansion. As the Prime Minister warns the King, “If we don’t start dying again, we have no future.”

Friday, October 24, 2008

Rhyme time



Thanks to Andrew Sullivan for the link.
Looks like this artist is making some money off the credit crisis. His blog here.

Indian street art

Portfolio of Parisian street/stencil artist C215 in the streets of India.

Full portfolio here. Thanks to Sepia for the link.

What we see is not what we are getting

I have not tried applying lipstick on a pit-bull. Or a pig for that matter. For one thing, it is difficult to get these animals to stay still as you try and get the pigment on them and the other problem is that it is a dangerous job. Besides, it is only well known that the resulting gloss that the lipstick radiates is but a transitory phenomenon.

I just read the news that Sarah Palin’s makeup stylist was lucky to be singled out as the highest salary earner in the McCain campaign. Amy Strozzi, identified as Gov. Sarah Palin’s traveling makeup artist, was paid $22,800 for the first two weeks of October alone.

It is bad behavior to nitpick to this level of detail, but when one starts to see Gov Palin pirouetting as the politically naive hockey mom from a small town out to change Washington, one needs to frame revelations like the above in its right context: Are the election of leaders such as Jonah McPalin really good for our country? What will an individual who tries so hard to project the small town gal image who in reality can be a shoo-in for a high priced supermodel bring in terms of governance to the country?

There is a reason for this blog going political over the last couple of months. THIS ELECTION IS IMPORTANT FOR US AND FOR OUR CHILDREN. It is important that we understand who the real individuals are who are vying to be leaders of this country. I believe in this country and the values it represents very ardently and it is difficult to see it being given away to scheming charlatans. The next time one is assailed by robo calls linking candidates to terrorists and artfully twisted charges that the country will be treading down a socialist path, one will need to think hard and smoke out real liars in this endeavor.

Voting day idiosyncrasy

On why voting on Tuesday made sense in mid 1800's and does not make sense now...
The reason we vote on Tuesday makes perfect sense — at least it did in 1845. To understand the decision Congress made that year, let’s imagine ourselves as members of early agrarian American society. Saturday was for farming, Sunday was the Lord’s day, Monday was required for travel to the county seat where the polling places were, Tuesday you voted, Wednesday you returned home, and Thursday it was back to work. It’s a safe bet that today most Americans don’t follow the same schedule as our farming forefathers. In fact, for many, Tuesday is one of the most inconvenient days to hold an election. One in four people who didn’t vote in 2006 said that they were “too busy” or had “conflicting work or school schedules.”
Michelle Malkin - fair and balanced... at times...

Thursday, October 23, 2008

Has the right wing leaning Matthew Drudge now been reduced to a 'frustrated sidekick heckler'? Remember, he was the one who pushed the swift boat agenda that sunk Sen. Kerry.

Greenspan scam

Looks like the guy who gave us terms like 'irrational exuberance' is finally conceding. Yes, in addition to contributing towards the annals of linguistic gymnastics, he also managed to screw up the markets as a result of his policies while lording over as the Fed Chairman. Greenspan has an interesting term for these times - credit tsunami.

In a statement yesterday that reveals the absurdly obvious, he also said: "Investors, chastened, will be exceptionally cautious".

It is revealing to see what this seer had to say about markets and risk in the go-go days of 2004: “Not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient.”

Perceptions

Conversation between Mr. Kristof, a Times columnist and his friend in Beijing, China... Reminds me of similar perceptions that some in India harbor - and how they are slowly being changed...

She: Obama? But he’s the black man, isn’t he?

Me: Yes, exactly.

She: But surely a black man couldn’t become president of the United States?

Me: It looks as if he’ll be elected.

She: But president? That’s such an important job! In America, I thought blacks were janitors and laborers.

Me: No, blacks have all kinds of jobs.

She: What do white people think about that, about getting a black president? Are they upset? Are they angry?

Me: No, of course not! If Obama is elected, it’ll be because white people voted for him.

[Long pause.]

She: Really? Unbelievable! What an amazing country!


Full column here.

Art market still remains immune...

Looks like the art market is still untouched by the global financial crisis. My question is: How long are the good times going to last? In an interconnected global economy, it is only a matter of time before the turbulence fans itself out into wider waters.
In the art market, there are no signs of panic just yet. Some insiders insist that the arrival of blue-chip collectors from eastern Europe, India and China will cushion the top end against recession, citing as evidence the recent Damien Hirst auction at Sotheby's, and steady trading at last week's Frieze art fair. There is also a lot of anxiety about "the death of the middle", where artworks trade for between £5,000 and £50,000. The over-arching prediction seems to be something serious, but not drastic: a pronounced slowdown rather than a crash.

Tip of the iceberg slowly thaws...

Finally, signs that something might be happening in the secretive, tony world of executive compensation...
American International Group Inc. agreed Wednesday to freeze some $19 million in payments to its former chief executive, Martin Sullivan, while New York Attorney General Andrew Cuomo reviews executive compensation and other expenditures aid out as the company neared collapse earlier this year.
About time... Of course, one can't be too sure if Cuomo is trying another Spitzer...

Wednesday, October 22, 2008

Culture watch

This month’s Harpers carried instructions issued by a Muslim cleric on methods men may use to to discipline their wives. The instructions were aired on a television program last year in Saudi Arabia and Kuwait. Full text here.
A husband should not beat his wife like he would a child, slapping it right and left. Unfortunately, many husbands beat their wives only when they get angry, and when they start the beating, they use both hands and sometimes their feet, as if they are punching a wall. Remember, brother, this is forbidden; your wife is a human being.

Tooting horn

I was happy to hear about India's successful moon rocket launch attempt. I must say that I consider myself lucky to have designed minor portions of that rocket when I worked as an engineer for the Indian Space Research Organization ten years ago and it sure was heartening to hear this news today. The mission seems to have a couple of stated objectives - firstly, to create a three dimensional surface topology map of the moon and secondly to find and map uranium/thorium deposits under the lunar surface... The former makes perfect sense, the latter none.
Even if Gen. Colin Powell lied to us about Iraq, his sense of American identity and what it represents is strong as ever... Here, he is talking about the smearing tactic of painting Sen. Obama as belonging to the Muslim faith...
Well, the correct answer is, he is not a Muslim. He’s a Christian. He’s always been a Christian. But the really right answer is, what if he is? Is there something wrong with being a Muslim in this country? The answer’s no. That’s not America. Is something wrong with some 7-year-old Muslim-American kid believing that he or she could be president?”

Binge buying

Politico details the gory details of how Gov. Sarah Palin managed to spend $150,000 on fashion accessories and clothes since her nomination six weeks back... I am not sure how one can say 'small town values', spend that much on fashion and still maintain a straight face.

Tuesday, October 21, 2008

Voices on the election

The New York Review of Books asked some of their contributors for their views on the upcoming Presidential election. Bit of a long read, but very important. Some excerpts below...

Mark Danner
It is no accident that the largest single polling disparity between McCain and Obama voters, apart from race itself, is age. Obama's candidacy is in large part a rebellion of the young, for whom race has much less saliency, and one of the great indeterminacies of the election is how many young people will turn out to vote. Another is whether the increase in those who will vote for Obama in part because of his race—most notably, African-Americans, who are registering in large numbers—will offset or exceed those who will vote against him in part for the same reason. This immensely complex question, which goes far beyond the debate over the so-called "Bradley Effect"
Andrew Delbanco
My daughter, who teaches in a charter school in Harlem, had a similar but more significant experience. Last spring, she felt a surge of excitement among her mostly African-American first-graders, whose young lives are terribly short on hope and shadowed by fear. Suddenly, their sense of the future was enlarged by an eloquent black man whom they saw on TV and whom they heard adults talking about all the time. The grandmother of one six-year-old said to her grandchild, "this time the White House will be the Black House." She didn't mean it as a threat of usurpation. She meant that now the American promise might be extended through a black president to black children who could look up to him with pride and a new sense of possibility.

Timothy Garton Ash
That someone from Obama's modest migrant background can make it this far also revives a potent, positive image of the United States as a land of opportunity—an American self-image which much of the world has internalized, however little it corresponds with the statistically recorded facts of limited social mobility.
Joseph Lelyveld
He was patronized as inexperienced and naive when more than a year ago he started calling for cross-border raids into Pakistan on al-Qaeda targets if there was "actionable intelligence" and our supposed ally declined to act. The idea may yet backfire but it recently became Bush administration policy. Ditto for his calls for a shift of forces from Iraq to Afghanistan. John McCain pays him the highest compliment by stealing his campaign themes. McCain is now the candidate of "change" who wants to reform the financial system and its legions of K Street lobbyists, which is where the supposedly inexperienced Obama began. I'm not contending that Obama is a seer, only that he seems to have read our time and the country's mood more intelligently than any of his rivals. We'll now see how well the country has read him.

On the slow death of Libertarian financial principles

Finally, I ran into an essay today that seemed to confirm my suspicions about libertarianism. Libertarianism is dying a slow death and the current financial meltdown further cements this movement’s distorted world view. Many think it is fairly fashionable to state that they are libertarian - little realizing that the current economic meltdown was clearly facilitated by libertarian philosophies dressed up in a conservative costume.

I remember reading Fountainhead when I was in engineering school and naively thought that this philosophy might be just the answer to problems and inequalities that I saw growing up in India. On graduating and finding real jobs in the real world, I slowly came to realize that libertarian principles espoused by its cheerleader Ayn Rand (she seems to call it Objectivism - sounds polished, but similar principles), was nothing short of a collection of washed up, puerile ideas that sound great in an utopian world of ones imagination but has little basis in a real world peopled with actual human beings who bring with them feelings, emotions, pleasure and pain. It is now clear that the economic meltdown was precipitated by libertarian principles like 'self regulating financial markets', 'let the markets decide what is best for the public', 'the markets can't be wrong' and 'government is the problem, not the solution' (among the many such slogans that one hears). It is time to clear the decks and ensure that this flawed movement dies a speedy, much-needed death.

The best thing you can say about libertarians is that because their views derive from abstract theory, they tend to be highly principled and rigorous in their logic. Those outside of government at places like the Cato Institute and Reason magazine are just as consistent in their opposition to government bailouts as to the kind of regulation that might have prevented one from being necessary. "Let failed banks fail" is the purist line. This approach would deliver a wonderful lesson in personal responsibility, creating thousands of new jobs in the soup-kitchen and food-pantry industries.

The worst thing you can say about libertarians is that they are intellectually immature, frozen in the worldview many of them absorbed from reading Ayn Rand novels in high school. Like other ideologues, libertarians react to the world's failing to conform to their model by asking where the world went wrong. Their heroic view of capitalism makes it difficult for them to accept that markets can be irrational, misunderstand risk, and misallocate resources or that financial systems without vigorous government oversight and the capacity for pragmatic intervention constitute a recipe for disaster. They are bankrupt, and this time, there will be no bailout.

A great review of Henry Hitchings book, The Secret Life of Words and a brief historical walk through the development of the English language...

English is a mallard because the common duck's indiscriminate interbreeding threatens indigenous duck breeds all over the world. In the same way, modern English infiltrates diverse languages everywhere. Today, English is spoken by billions of people all over the globe. Mandarin may have more native speakers, and Spanish and Hindi-Urdu have about the same number, but English claims a special distinction: It is so popular among language learners that there are more speakers of English as a second language than there are native speakers. English is now the language of urbanization and globalization.

Compensation alert - yet again

Peter Kraus, the head of strategy at Merrill Lynch is leaving the company and in the process will net $25 million in compensation. This resulted due to the takeover of Merrill by Bank of America.

Here is the stunner:
Peter Kraus joined Merrill in September. A month back!

And the McCain camp has issues with redistributing wealth.

Monday, October 20, 2008

Investment Banker in an organic compound

After sharks in formaldehyde, it is indeed fitting that 'artist' Damien Hirst has decided to put an investment banker in this embalming fluid... It sold for an investment bank type sum too (nearly $4 billion). For some reason I don't believe that, but that is what the internets say...
Among the other creatures that fall into the same league that he could throw into formaldehyde and make his zillions include hyenas and vultures.
The banker happens to be from Merrill - not too sure why this company was the 'chosen' one. After closely studying the price for which this was sold for, I think Sec. Paulson might consider recruiting Mr Hirst into the investment bank bailout team. He seems to have the ability to easily muster ungodly amounts of cash by artfully distorting ninth grade science experiments/exhibits... We need the money - you know...

UPDATE: The Hirst investment banker thing looks like a spoof - like I said above, I did not believe the price, though formaldehyde might be a good medium to put most of the bankers in...

On Powell for Obama

Today the media is drunk on the fact that Gen. Colin Powell has endorsed Sen. Barack Obama's candidacy for the presidency of the U.S. I am not sure if this is that much of a big deal.

Here was one man who could single handedly have prevented the Iraq fiasco. Here was one man who could have asked tougher questions to his boss and his direct reports before he lied to the United Nations (full transcript here) about the State of Iraq amassing WMDs. I remember watching that speech and actually believing him. I had a funny feeling that a highly decorated military man would not stand up in front of the United Nations and spew lies. At the end of that speech, I was thinking that it might be the right move after all - Iraq and Saddam Hussein must indeed be stopped in their tracks.

I also remember a feeling of betrayal that swept across the nation when it was conclusively proved that all the talk of finding stockpiles of yellow cake uranium, WMDs and chemical weapons turned out to be a complete fabrication. Remember vividly…
I am not so sure if this endorsement is such a big deal especially when Sen. Barack Obama actually voted against going to war in Iraq.


Detail from a painting by Winslow Homer (1836 - 1910), 'Sounding Reveille', oil on canvas, 13" X 19", 1865 (image from a Christie's book)

A cartoon from The Harpers magazine...


More of this artist's cartoons here...

Sunday, October 19, 2008

Reposting: AFL-CIO's Richard Trumka on Racism and Obama

Poem/Photo

Rider by Mark Irwin

As I carried my mother from the hospital bed
across the room toward the chair by the window,
she played with my gold watch as if it were a toy,
flipping the strap up and down, then singing Giddyup,
Giddyup, but as I looked at her she did not smile
so I nodded my head, snorted, then put a pencil
in my mouth, as bit, and cantered about the room
till I was out of breath, puffing, and she patted me, saying,
Good boy, Good boy, so I pawed the carpet, slobbering a little
like her, as she waved and I nodded my mane
until this was how we said goodbye one spring
while the sun shrank to a white-hot bb among a thousand
others receding in the jeweled, black sky as the rivers
galloped away with her breath through the dark green land.

-- From the current issue of Georgia Review

Details of an orgy

Maureen Dowd on why heads must roll in the orgy of executive excesses that is being played out even as the mortage meltdown unfolds...
Just when we thought executives of A.I.G., the insurance giant bailed out by taxpayers for $123 billion, had been shamed into stopping their post-bailout Marie Antoinette spa treatments, luxury sports suites, Vegas and California posh resort retreats, we were dumbfounded to learn that some A.I.G. execs were cavorting at a lavish shooting party at a British country manor. London’s News of the World sent undercover reporters to hunt down the feckless financiers on their $86,000 partridge hunt as they tromped through the countryside in tweed knickers, and then later as they “slurped fine wine” and feasted on pigeon breast and halibut.
The paper reported that the A.I.G. revelers stayed at Plumber Manor — not the ancestral home of Joe the Plumber, a 17th-century country house in Dorset — and spent $17,500 for food and rooms. The private jet to get there cost another $17,500, and the limos added up to $8,000 more. In an astonishing let-them-eat-cake moment, the A.I.G. big shot Sebastian Preil held court at the bar and told an undercover reporter, “The recession will go on until about 2011, but the shooting was great today and we are relaxing fine.”

Saturday, October 18, 2008

On robocalling and smearing your opponent

As Sen. McCain tries 'last ditch' efforts at smearing Sen. Obama through automated robocalls that aim to tie Obama to Ayers, it is instructive to look back to the year 2000 when McCain was running against sitting POTUS George Bush in the primaries and they used automated calls in a vicious campaign to smear each other.

An article from Feb 2000 in the Times here:

Supporters of Mr. McCain reported receiving automated telephone calls in which the recorded voice of the evangelist Pat Robertson urged them to ''protect unborn babies and restore religious freedom'' by opposing Mr. McCain. As he has on his cable television program, Mr. Robertson, a supporter of Mr. Bush, accuses Mr. McCain of having chosen as his national chairman ''a vicious bigot who wrote that conservative Christians in politics are anti-abortion zealots, homophobes and would-be censors.''

Adrienne Karns, who lives in the Detroit suburb of Birmingham, said she received a call at 5:30 this afternoon that issued a ''Catholic voters alert.'' Then, she said, the anonymous voice told her ''that George Bush had gone to Bob Jones University, and Bob Jones University was anti-Catholic, and George Bush was anti-Catholic.'' Then, she continued, ''It said John McCain was pro-Catholic and I should vote for John McCain.''
It is clear that McCain is using the same trashy tactics from 2000 which the Republican vote machine seems to have perfected then. Of course, this time around it does not look like it might work that well (according to this study). Thanks to Marc Ambinder for the link...

Friday, October 17, 2008

Sucker Punch

Andrew Lahde, a hedge fund manager found that his 1 year old fund returned 866% betting against subprime. He quit soon after and this was his goodbye letter. Worth a read.
I will no longer manage money for other people or institutions. I have enough of my own wealth to manage. Some people, who think they have arrived at a reasonable estimate of my net worth, might be surprised that I would call it quits with such a small war chest. That is fine; I am content with my rewards. Moreover, I will let others try to amass nine, ten or eleven figure net worths. Meanwhile, their lives suck. Appointments back to back, booked solid for the next three months, they look forward to their two week vacation in January during which they will likely be glued to their Blackberries or other such devices. What is the point? They will all be forgotten in fifty years anyway. Steve Balmer, Steven Cohen, and Larry Ellison will all be forgotten. I do not understand the legacy thing. Nearly everyone will be forgotten. Give up on leaving your mark. Throw the Blackberry away and enjoy life.

Mulling the Kohut/Bradley lacunae

Here, I found a poll telling us that Obama has a 14 point lead over McCain. Yesterday I was driving around our predominantly blue collar town and came across no less than 15 McCain/Palin signs conspicuously stuck in the front lawns. I managed to count exactly 0 Obama/Biden signs. All this in the state of New Jersey which is supposed to be a solidly democratic state. This is a phenomenon that I noticed not just in our town, but towns all over this state. Often times, in the course of this election, we see the overwhelming lead in all the polls mentioned but little enthusiasm in the suburbs and homesteads… I guess it could be that a lot of people actually (inherently) support Barack Obama, but are actually not too happy with wearing it out on their front lawns. They are not too sure what their white neighbors over on the other side might think about them and hence plan to play it by ear. They are just content with going up to the polling booth and expressing their desires in secret.

Or maybe we are all wrong about this thing – the whole lead in the polls… Are these polls actually right? Are people telling us the truth? In this regard, we need to understand two factors that have been poorly quantified into the statistical engines that drive final tallies coming out of these polls: The Bradley effect and the Kohut Lacuna…

The Bradley Effect:

Bradley Effect, named for the black mayor of Los Angeles, Tom Bradley, who lost the California governorship in 1982 despite polls that had showed him in the lead, apparently because a small percentage of respondents would rather lie to a pollster than admit to opposing a candidate on the ground of his race.

The Kohut Lacuna:

Andrew Kohut, of the Pew Research Center, published an Op-Ed in the Times about the failure of polls to predict the outcome of a primary in New Hampshire between Clinton and Obama. He had a theory: undetected racism among working-class whites. Clinton, he noted, beat Obama among whites with family incomes under fifty thousand dollars and also among those who hadn’t attended college. “Poorer, less well-educated white people refuse surveys more often than affluent, better-educated whites,” Kohut wrote. “Polls generally adjust their samples for this tendency. But here’s the problem: these whites who do not respond to surveys tend to have more unfavorable views of blacks than respondents who do the interviews.”
On top of the effects of respondents lying to pollsters, it also looks like poorer, less well-educated voters are less likely to agree to answer the questions posed.

Looking at these polls and hearing the chest thumping from various democratic leaning blogs, I fervently hope that people are not lying to the pollster and poorer, less educated people know that they need to vote with their interests of self preservation at heart.

Look, I know that Obama is a politician and there is only so much we could actually expect from politicians. Remember the adage, politics makes for strange bedfellows… But the effort and the sincerity behind Obama’s ideas for propping up the middle class and the fact that he actually mentions that health care is a right to be enjoyed by all citizens should make the poorer, less educated whites think again and disprove the Kohuts and Bradley’s.


The pictures above depict the watercolor paintings of dead birds by artist Noel Grunwaldt. She is currently on with her first solo show at the Stellan Holm Gallery in Chelsea. The show runs from Sept 12 - Oct 25. She has an MA in Studio Arts from SUNY Albany and lives and works in upstate NY.

A Kafkaesque plumbing problem

After all the brouhaha about Joe the plumber, we find out that he is not a plumber, is behind on his taxes, is not an undecided voter, is not properly registered to vote and to cap it off, is not even named Joe! If this does not illustrate the thin ice the McCain presidential campaign is skating on, nothing more will.

Thursday, October 16, 2008

Shameless self promotion

I am very excited to tell you that some of my most recent paintings made it through a peer review process over at UGallery and are on sale at their site here.

You have to click on the paintings to get to the details. So, all of you with the greenbacks to buy some good art, this is your chance to contribute generously... Go on and buy. Don't be shy. ;-)

Plumbing the depths using Joe the Plumber

Yesterday, Sen. McCain mentioned ‘Joe the Plumber’ 21 times at the debates. Apparently, Joe is some rich plumber in Ohio who happened to tell Obama that his plumbing business is set to make more than $250,000 a year and Obama’s tax policies might hit the business hard.

Big deal! Maybe Joe Plumber needs to get a couple of facts straight.

Only 2% of all households in these United States make more than $250,000 a year. That leaves 98% of all households below the $250,000 limit. The median income of all households in the United States is about $50,000. The tax policy proposed by Obama will only hit people making more than five times the median income = 2% of the population!

So, yesterday it was clear that Sen. McCain was speaking to the richest 2% of the people in the United States.

My response is this: If Joe the Plumber was asked to pay a little more taxes, suck it up and pay. You owe it to the people. The BS about trickle down or free market or laissez faire have not worked. A quick look at executive compensation and income disparities in the United States will tell you that. We need sensible policies that will give the 98% a chance.

Well, the machinations of the Jonah McPalin campaign have produced a motley cast of characters. Last week Gov. Palin gave us Joe Six-pack, this week Sen. McCain introduced us to Joe Plumber. Who know, next week we might need to get ready for Joe the Lyncher.


This ad from the Obama campaign tells us of the percentage of times McCain voted with Bush. In McCain's own words!!

Debate reaction

Yesterday's debate followed the same format as the last two McCain/Obama debates. So much so that I will use the same words that I used to describe the last debate - because it fit the bill this time too...
Watching the debates yesterday, I noticed a wheezing, breathless, cantankerous old man barely managing to latch onto questions and mounting vapid combative responses at the debate yesterday.

No doubts, Obama won. Of course, this time, McCain anger and frustration were on full display. Say it ain't so, Joe Plumber...

Wednesday, October 15, 2008

Jon Stewart sums up the continuously spinning McCain conundrum with this hilarious take on last weeks events.
The TED spread is moving up and the 3 month US treasury's are lower this morning... Not a good thing...

Poem/Photo

You'er Alone the Swift Cried

You'er alone the swift cried
wringing out a wonderful dive
on the azure coast
remember it for yourself
like a cork shot
from a champagne bottle
you're someone important
the violin sang
someone like me
only bady tuned
you're silent
and dry
whispered the letter
the paper
you have to beware
of fireworks.

--- Translated from the Polish by Wayne Miller and Katarzyna Komorowska. From Volume 25 Number 1, 2005 edition of the Pleiades magazine

Stark white chronicles

The stark whiteness of the McCain campaign is undeniable. Every once in a while it spills its creamy guts out in public… This bit is both sad and funny from the weekend Times…
There are indeed so few people of color at McCain events that a black senior writer from The Tallahassee Democrat was mistakenly ejected by the Secret Service from a campaign rally in Panama City in August, even though he was standing with other reporters and showed his credentials. His only apparent infraction was to look glaringly out of place.
Jay Leno featured Wanda Sykes recently and she had this to say on the bailout. She tells it like it is – a bailout for the rich and a sucker punch for the rest of us.

Tuesday, October 14, 2008

What the repackaged bailout really means...

Yesterday, Mr. Paulson in his infinite wisdom decided that we are going to scrap the original plan to buy distressed, toxic assets from banks and instead decided to invest about 250 billion directly into some select banks and financial institutions. The plan is to take an equity stake in the banks thus guaranteeing the taxpayer that we will see some kind of a return on the investment. In case none of these banks fail, the taxpayer will see a return on the investment. What was conspicuously absent in the plan was any form of regulatory framework, compensation ceilings or change in management teams.

If I were to explain in laymans terms what this kabuki play of a handout from the Treasury's perspective, this is what it might look like:


"Banks, here is an investment of taxpayer money that Secretary Paulson would like to make in your company. You were singled out just because of the fact that I know some of the CEO’s personally, you are a 'leading financial institution' and if I may use euphemistic phrases, ‘you are too big to fail’. You may take this money and do what you like. If you profit from our investment, the taxpayer gets a part of the profits. If you go under, I will just count this as a bad investment gone awry. Either way, you are free to do exactly what you did for the last 10 years leading up to the bubble and you are free to carry on doing the same thing - we really do not care. What this really means to the bottom line is that way you will be able to continue your high risk bets in overleveraged financial instruments that has become your de-facto business model, your stupendous compensation packages that the CEO's and the board have gotten used to and you get to keep your current management board that got us into this mess. Go ahead, let the good times roll!!"

This looks increasingly like a very wealthy investor indulging in high stakes investments in large blue chip companies.

OK, all this sounds very, very interesting, but what about that homeowner who is being foreclosed?

Oh, that individual. Hmm… Well, they need to fend for themselves. Hey, this is the free market.

Monday, October 13, 2008

Subconcious associations

A study about how people might subconsciously link being American with being white...
On a conscious level, the participants had no trouble identifying Obama and Clinton as American, and Blair as a foreigner. But Devos and Ma found that the subconscious associations mattered: People who were slower to see Obama as American on a subconscious level were less likely to be willing to vote for the senator from Illinois than people who more easily associated him with American symbols. This was true of both Republicans and Democrats.

You could take an implicit association test here.
I am happy for Paul Krugman on winning the Nobel. Here is a little bit of a writeup on how he works (little bit of philosophy thrown in)...
Simplify, simplify: Fortunately, there is a strategy that does double duty: it both helps you keep control of your own insights, and makes those insights accessible to others. The strategy is: always try to express your ideas in the simplest possible model. The act of stripping down to this minimalist model will force you to get to the essence of what you are trying to say (and will also make obvious to you those situations in which you actually have nothing to say). And this minimalist model will then be easy to explain to other economists as well.

Sunday, October 12, 2008

Weekend Pictures






Martin Luther King recalling when he first became painfully aware of prejudice:

When I was 14, I had travelled from Atlanta to Dublin, Georgia, with a dear teacher of mine, Mrs. Bradley; she's dead now. I had participated there in a oratorial contest sponsored by the Negro Elks. It turned out to be a memorable day, for I had succeeded in winning the contest. My subject, I recall, ironically enough, was "The Negro and the Constitution." Anyway, that night Mrs. Bradley and I were on a bus returning to Atlanta, and at a small town along the way some white passengers boarded the bus, and the white driver ordered us to get up and give the whites our seats. We didn't move quickly enough to suit him; so began cursing us, calling us "black sons of bitches." I intended to stay right in the seat, but Mrs. Bradley finally urged me up, saying we had to obey the law. And so we stood up in the aisle for the 90 miles to Atlanta. That night will never leave my memory. It was the angriest I have ever been in my life.
- published in a Jan 65' Playboy interview with Martin Luther King.

Saturday, October 11, 2008

Readers,

This blog turned two years old today. I wanted to take this opportunity and thank each one of you who come here on a daily basis (numbering about 300 a day) and make it worth my while. Please keep coming. Thank you once again.
An Alaska state investigation concluded yesterday that Gov. Sarah Palin abused her power as Alaska's governor and violated state ethics laws. Full report here (pdf).

McCain's family values...

The real story of John McCain III here in this month's Rolling Stone magazine...

On the reasons behind going on a 'study' trip to Rio:

On the grounds between the two brick colleges, the chitchat between the scion of four-star admirals and the son of a prizefighter turns to their academic travels; both colleges sponsor a trip abroad for young officers to network with military and political leaders in a distant corner of the globe.

"I'm going to the Middle East," Dramesi says. "Turkey, Kuwait, Lebanon, Iran."

"Why are you going to the Middle East?" McCain asks, dismissively.

"It's a place we're probably going to have some problems," Dramesi says."Why? Where are you going to, John?"

"Oh, I'm going to Rio."

"What the hell are you going to Rio for?"

McCain, a married father of three, shrugs."I got a better chance of getting laid.".


On how he met his second wife:
In the spring of 1979, while conducting official business for the Navy, the still-married McCain encountered Cindy Lou Hensley, a willowy former cheerleader for USC. Mutually smitten, the two lied to each other about their ages. The 24-year-old Hensley became 27; the 42-year-old McCain became 38. For nearly a year the two carried on a cross-country romance while McCain was still living with Carol: Court documents filed with their divorce proceeding indicate that they "cohabitated as husband and wife" for the first nine months of the affair.

On his anger:
During his 1992 campaign, at the end of a long day, McCain's wife, Cindy, mussed his receding hair and needled him playfully that he was "getting a little thin up there." McCain reportedly blew his top, cutting his wife down with the kind of language that had gotten him hauled into court as a high schooler: "At least I don't plaster on the makeup like a trollop, you cunt." Even though the incident was witnessed by three reporters, the McCain campaign denies it took place.
Edward Winkleman unloads on the McCain/Palin race baiting.

Friday, October 10, 2008

Buckley buckles

I was at lunch today and a colleague told me over the cutlery clashing din on Stone Street that Christopher Buckley, son of the super-arch conservative William F. Buckley endorsed Obama. I really did not believe him, but I got back into work and indeed, there it was...

"This campaign has changed John McCain. It has made him inauthentic. A once-first class temperament has become irascible and snarly; his positions change, and lack coherence; he makes unrealistic promises, such as balancing the federal budget “by the end of my first term.” Who, really, believes that? Then there was the self-dramatizing and feckless suspension of his campaign over the financial crisis. His ninth-inning attack ads are mean-spirited and pointless. And finally, not to belabor it, there was the Palin nomination. What on earth can he have been thinking?"

Black Friday?

I sincerely hope today's selloff will not result in Black Friday.

U.S. stocks shed $872,000,000,000.00 in market value yesterday, $2,500,000,000,000.00 over the last seven days, and $8,400,000,000,000.00 since all-time highs exactly one year ago.
This video on communication techniques that one can learn from Gov. Sarah Palin's style is hilarious. It may not be suitable for viewing at work though...

Friday poem/photo

What Beauty Knows About Itself by Chard deNiord

That it is a genius in its diversity and therefore ruthless.
That it is not enough in the end to hold the beloved,
although it seems to be at first, more than seems.
That it hosts a worm that is capable of consuming the heart in a day.
That it is perishable, like fruit, if left out too long.
That it needs a sister, like Antigone, to add something essential
to its otherwise cowardly character.
That it is transcendent form, criminal catalyst.
That it might as well be motherless since death is its mother.
That it fades much quicker than it appears.

From the Antioch Review Fall 2007 Volume 65, Number 4


Sorry, could not resist ripping this from the latest New Yorker...

Strangely, the government might be the solution...

On reading the following piece of news, that the next time the mavericky people tell me that government is the problem and not the solution, I might have to politely tell them that they suffer from an extreme state of delusion and might need checking into the nearest mental institution...

Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to try to restore confidence in the financial system, according to government officials. Treasury officials say the just-passed $700 billion bailout bill gives them the authority to inject cash directly into banks that request it. Such a move would quickly strengthen banks’ balance sheets and, officials hope, persuade them to resume lending. In return, the law gives the Treasury the right to take ownership positions in banks, including healthy ones.

First, they tried bailing out individual companies, then they tried a large scale 700 billion dollar bailout, then they tied lending to the banks directly, then they tried buying up short term commercial paper. The latest today is to take up ownership stakes in large banks directly. This might just work. This will give the taxpayers a larger stake in the game, might actually produce return on taxpayer monies invested rather than the previous ideas that were designed purely with the private enterprise in mind. Yes, the ownership stakes idea put out by the Treasury might work, but the downstream effects of locked up credit markets will be long drawn.

The caller on NPR this morning had a term for the current crisis where one is witnessing stocks, wealth and capital simply vanish into thin air so quickly: He called it ‘evaporational exuberance’.

Thursday, October 09, 2008

Below the belt

First they tried the elitist track, then the inexperienced track - neither really seemed to stick to Obama's public perceptions. This was especially when his opponent, Sen. McCain was seen to be the ultimate elitist and the years of McCain's experience in the Senate seems to have come to nought. Now desperate, they are trying the terrorist track.

In this video here, Obama says it like it is and explains the facts (in his words). Essentially, he tells us that he sat on the same school board with an individual who did some bad things when Obama was 8 years old. Yes, when Obama was 8 years old.


Ayers is a guy who engaged in some despicable acts forty years ago when I was 8 years old. By the time I met him 10 or 15 years ago he was a college Professor of Education at the University of Illinois and we served on a school reform board together. A board by the way that was funded by Walter Annenberg who had been an ambassador and close friend of Ronald Regan's. So, I have talked to him about school reform issues, and the notion that somehow he has been involved in my campaign, that he has been advisor of mine, that I have palled around with a terrorist, all these statements are made simply to try to score cheap political points. You know, look, I can handle these attacks with the remaining four weeks, but it is certainly not serving our democracy. We need to be having a debate about how we are going to yank ourselves out of a very difficult situation and that is what I am going to spend my time talking about...

Gail Collins of the Times analyzes the Ayers connection to Obama and warns us of the slippery slope the nation will go down as the McCain camp rolls out the 'guilt by perceived association' strategy.

When I was a teenager, Charles Keating came to my Catholic girls high school in Cincinnati in his capacity as the founder of Citizens for Decent Literature, an anti-pornography group. His theme was the evil of wearing shorts in the summertime. Keating said he knew a young mother who took her child for a walk while wearing Bermuda shorts. A motorist, overwhelmed with lust at the sight of the back of her uncovered calves, lost control of his car and slammed into them. Everybody was killed, and it was all her fault. We were then asked to sign pledge cards promising to conform to standards of modesty that would have satisfied the Taliban.
If Barack Obama is responsible for the Weather Underground, and if the mother in Bermuda shorts was responsible for the car crash, I am pretty sure that I am on the hook as well.

Not good

The dow dropped 600 today. Not a good sign...

The quadrillion dollar derivative market and how one woman tried unsuccessfully to regulate it

The Times had a great article about how a lady chairing the Commodity Futures Trading Commission (CFTC) ten years ago was thwarted by the all knowing Mr. Greenspan in her attempts at bringing greater regulatory authority over options, swaps and futures (derivative instruments). These are the very instruments that led to our current global financial meltdown. The value of these instruments have ballooned from about $100 trillion six years ago to $0.5 quadrillion dollars (yes, quadrillion – I did not make it up). When people say that the bailout amounts ($700 billion) proposed is just a drop in the bucket, they are absolutely right...


In 1997, the CFTC, a federal agency that regulates options and futures trading, began exploring derivatives regulation. The commission, then led by a lawyer named Brooksley Born, invited comments about how best to oversee certain derivatives. Born was concerned that unfettered, opaque trading could "threaten our regulated markets or, indeed, our economy without any federal agency knowing about it," she said in Congressional testimony. She called for greater disclosure of trades and reserves to cushion against losses.

Born's views incited fierce opposition from Greenspan and Robert Rubin, the Treasury secretary then. Treasury lawyers concluded that merely discussing new rules threatened the derivatives market. Greenspan warned that too many rules would damage Wall Street, prompting traders to take their business overseas.

"Greenspan told Brooksley that she essentially didn't know what she was doing and she'd cause a financial crisis," said Michael Greenberger, who was a senior director at the commission. "Brooksley was this woman who was not playing tennis with these guys and not having lunch with these guys. There was a little bit of the feeling that this woman was not of Wall Street."

This summer, the Bank for International Settlements, estimated that the face value of derivatives floating around the world is $1.14 quadrillion. That is $1,140,000,000,000,000.00. The breakup was distributed between $548 trillion in listed derivatives or traded on organized exchanges and $596 trillion under over-the-counter derivatives that were basically unregulated and unmonitored.

Maybe Mr. Greenspan should have listened to that little lady warning him then in 1997. Maybe, but hey, she would not play tennis with the guys nor have lunch with the guys... How can such a lady give credible advice? It also does not help that Greenspan was an avid follower of that libertarian cheerleader Ms. Ayn Rand.

Meanwhile, the National Debt Clock in midtown Manhattan has run out of digits to record the growing debt.

Wednesday, October 08, 2008

Lighter note

A video library of Gov. Palin's greatest hits that feature a witch doctor blessing her to visions of Putin rearing his head over the US airspace. The potential for this kind of stuff from the wrinkle/wink team is astounding considering that the wrinkle and the wink were anointed as a team just a couple of months ago...

Will the real McCain please stand up?

About a year back, McCain said that homeowners were responsible for their own futures and they were primarily to blame for bad investment decisions taken during the purchase of their homes. Yesterday, McCain proposed a $300 billion bailout for homeowners and a sketchy plan for buying up distressed mortgages. So, he is now for government backed spending before he was against it?

A couple of weeks back McCain said that the fundamentals of the economy were strong. That same day in the afternoon he said that the economy is on the brink of a collapse. He flip flopped from being a believer in the strength of our economy before he came against it in the same day! All of his life, McCain has been a deregulator and believer in the fundamentally flawed assumption that the free markets know best. Now he is an ardent supporter of tightly regulated markets. Which one does he really believe in? I think there is a clear credibility problem.

While he is busy abandoning the 'free markets know best' principle by the wayside as it starts to become an inappropriate calling card, he is planning on reviving the same failed principles to our health care. He plans on forking out $2500 to individual Americans per year hoping that this is going to cover the rising individual healthcare costs. Added to the healthcare proposal are plans on deregulating the entire health care industry. Now that we have failed utterly with the deregulation of the financial services industry, let us try and apply the same failed deregulation policies to our health. Will the real McCain please stand up?

Watching the debates yesterday, I noticed a wheezing, breathless, cantankerous old man barely managing to latch onto questions and mounting vapid combative responses at the debate yesterday. Maybe this is the real McCain.

Oh, I forgot to add. It was clear that Obama won the debate.

Tuesday, October 07, 2008

Quick reaction to the debates

Knee jerk reaction to the second debate between would be Presidents:
McCain refers to Barack Obama as 'That one'. It is borderline racist! As far as I know, 'that' refers to inanimate objects/things. Andrew Sullivan has it here. As is his style, McCain seemed to come off as condescending and uppity (multiple times).



Image ripped from here.

Pitiful Pitbull

Keith Olberman’s on-screen kinetic energy is a bit too much for me to handle, but his convincing rebuttal yesterday of Gov. Sarah 'pitbull' Palin’s insinuation that Sen. Obama is pallin’ around with terrorists (it does not get more desperate that that) is worth the ten minutes.

How we got here.

Link that explains how we got into this financial mess.

Meanwhile, we might see an emergency rate cut. Desperate measures, but pumping more money into the system may be a recipe towards postponing disaster.

Mavericky behavior alert!

The Federal Reserve Board announced today the creation of the Commercial Paper Funding Facility (CPFF), to help provide money to large corporations and companies. Fed officials didn't say how much commercial paper, which hundreds of companies use to finance payrolls and meet other cash needs, it plans to purchase. The program will continue to run till April 30, 2009.

A bottomless cash withdrawal mechanism, I betcha'.

The Federal Reserve said yesterday that it would start to pay interest on bank deposits for the first time and double its auctions of cash to banks to as much as $900 billion by year-end.

These two moves are over and above the $700,000,000,000.00 bailout.

Say it ain't so, but 1 million Joe six-pack Americans lost homes over the last two years and another million will lose their homes over the next 12 months. I am yet to see a single coordinated initiative on their behalf.

Meanwhile, life goes on as usual for the million dollar bonus CEO's as is evident from this report:
Less than a week after the federal government offered an $85 billion bailout to insurance giant AIG, the company held a week-long retreat for its executives at the luxury St. Regis Resort in Monarch Beach, Calif., running up a tab of $440,000. The executives spent $200,000 for rooms, $150,000 for meals and $23,000 for the spa.

Flawed on many levels

Below are four news snippets that have hidden issues associated with the $700,000,000,000.00 bailout in the papers today: The first smacks of 'inbred nepotism', the second an instance of 'the fox guarding the henhouse', the third reeks of 'siphoning public cash to the CEOs' whilst the fourth talks about 'a clear conflict of interest'.

  • The Treasury Department said that it would soon post help-wanted ads on its Web site for asset managers to run the bailout program and that because of the urgency, the hiring may be “through other than full and open competition.”
  • Former Goldman Sachs employee, Neel Kashkari has been appointed the bailout czar and will lead the bailout. By the way, a useful way to pronounce this Indian last name is ‘Cash Carry’ per Michelle. Fitting indeed.
  • Under a proposal being discussed with the Treasury Department, the Fed could buy vast amounts of the unsecured short-term debt that companies rely on to finance their day-to-day activities. The move would put more taxpayer dollars at risk. Buying commercial paper could open the Fed to difficult conflicts of interest, because it would be juggling the goals of protecting its investment portfolio with its traditional goals of promoting stable prices and low unemployment.
  • Administration officials plan to outsource almost the entire bailout effort, which will largely rely on “reverse auctions” in which the government accepts bids from financial institutions that want to sell their troubled assets. The Treasury is accepting bids only from experienced investment managers, almost all of which are likely to be either sellers or buyers of mortgage-backed securities.
Is it any wonder that the economy is in shambles? Meanwhile, the presidential candidates seem to be busy launching personal attacks at each other. Nero fiddles while... The bailout looks more and more like a big 'up yours' neon sign out of D.C.





Photos of Kwang-Young Chun's mulberry paper on small polystyrene form sculptures at the Robert Miller Gallery (exhibition on from Sept 4 - Oct 11)