Saturday, November 27, 2010

Vladimir Ulyanov

I used to check Lenin's Tomb regularly, but somehow lost the habit, much to my regret. A friend sent me his latest posts, on-the-ground coverage of the student protests in the UK , reminding us of what kind of function blogging journalism can accomplish.

His claim that the UK protests were primarily spontaneous and organized through social media underlines my longstanding view that these forms of digital networks are the organizing tool of our time. But the fact that most of these technologies are corporate-driven and server-based is an Achilles heel. If Mark Zuckerberg, or Mr Tweet, or Eric Schmidt, or Langley decide that enough is enough, and the networks go dark, what's the alternative?

If anyone knows of a peer-to-peer social networking system, let me know.

Scrolling down further at Lenin's Tomb, some Irish analysis:

This breakdown of Fianna Fail's support hasn't yet benefited the Left in a big way, but it can do so. Labour is the main centre-left opposition party, and has made serious gains in the polls as a result of Fianna Fail's difficulties, rising to 27%, an increase of 10% since last year. The radical left has previously demonstrated its ability to make surprising break-throughs, and is probably represented in the 8% support that 'independents' get. The Greens are worried about their own position, and they're right to be worried. They gambled on collusion with the government's austerity measures, justifying every betrayal on similar grounds to those offered by the Liberals - because we're in government, we can implement some of the beneficial policies that we want to see. But they now know they face the wrath of the voters and are trying to limit the damage. They certainly have no ability to channel any protest, as they've made themselves the objects of protest: they garner a miserable 3% in the polls. As yet, it still looks like the right-wing Fine Gael will be the main beneficiary of the protest vote, with 33% support.

I wasn't aware that the Green Party there had signed up for austerity. Such an idiotic position could only come out of the political stupor induced by years and years of fake prosperity and stability induced by the credit bubble. (and not just in Ireland).

And I see that there is a re-release of that masterpiece of cinematography, the Conformist, just in time.

Thursday, November 25, 2010

Matt Taibbi Before He Was Discovered

Five years ago I was siting in a felafel joint on the upper west side when I picked up a local free newspaper expecting to waste some time. A review of Tom Friedman's "The World is Flat" caught my eye and gave me a jolt of sheer delight. I'd never heard of the author, but that reading experience in a by-the-way throwaway left an indelible engram...(and confirmed once more that NYC is just way cool)

So today while perusing's list of the "Hack 30" (where Friedman comes in at Number 3) I discover that the author was none other than Matt Taibbi:

An excerpt from the review:

I'll give you an example, drawn at random from The World Is Flat. On page 174, Friedman is describing a flight he took on Southwest Airlines from Baltimore to Hartford, Connecticut. (Friedman never forgets to name the company or the brand name; if he had written The Metamorphosis, Gregor Samsa would have awoken from uneasy dreams in a Sealy Posturepedic.) Here's what he says:
I stomped off, went through security, bought a Cinnabon, and glumly sat at the back of the B line, waiting to be herded on board so that I could hunt for space in the overhead bins.
Forget the Cinnabon. Name me a herd animal that hunts. Name me one.

Now I get the pleasure of reading a relatively recent one, a review of the environmentalist Tom.

Can another era of tumbrils be far behind?

Some details on Mukesh Ambani's new "house".

If India is not incubating a million madames Defarge by now, I would doubt we'll remain a single species for long.

Imagine a boot......

Wednesday, November 24, 2010

A counter example for the Irish

From the Spectator:

In many ways, Iceland is in better shape than Ireland or Greece, both of which may well be stuck in recession for a decade. It may even be in better shape than Britain: we still don’t have much idea how much RBS or Lloyds-HBOS will end up costing us, or when we will be rid of them. There is an important lesson in that experience. Almost every government in the world has accepted the idea that they have to bail out their banks if they run into trouble. But Iceland suggests that isn’t necessarily true. In fact, governments could simply protect domestic deposits. After that, they could say they were very sorry, but there simply wasn’t enough money to pay back all the debts the bankers had run up.

It might be better financially. Bad debts would get written off immediately, rather than remaining a millstone around the neck of the country for years to come. More importantly, it would be better morally. Reckless, irresponsible behaviour would not be rewarded. Bankers would have to think a lot harder about what risks they were taking, and what their consequences might be. And depositors would have to be a lot more careful about where they put their money, rather than just lazily assuming the government would pick up the tab for any losses.

If Britain followed Iceland’s example, it’s possible the economy would survive and bounce back fairly quickly. Perhaps we could even put the prime minister who presided over the reckless expansion of the banks on trial for negligence, just as the Icelanders have. Come to think of it, that might not be a bad idea.

The question of the hour

Will the Irish people accept crucifixion? This panel discussion on mainstream television, with mainstream people is sobering.

Tuesday, November 23, 2010

Americans are not stupid -- just their leadership

This map shows the most trusted newscaster now that Cronkite is dead.

While I'm pleased to see Massachusetts' results, I'm most surprised by Utah, Idaho and Arkansas....

The Balkans of the East

This article alarms me, though I suppose I shouldn't be surprised. The issue distills to the question: Who owns Pakistan?

An excerpt:

However, a clash of interests between the Pakistani military establishment and Washington now appears likely. Washington understands that during winter, fighting in Afghanistan slows down and a major chunk of insurgents goes to Pakistan's cities to see their families, especially in places like Quetta, the provincial capital of Balochistan. The Americans want to take action during this period, but the Pakistani military establishment cannot allow this to happen.

Whether Pakistan is ready to pay the cost if it tries to impede American operations is another matter as the US is already upset with Islamabad's refusal to launch operations against the powerful Haqqani network in the North Waziristan tribal area. That is, is the loss of military and economic aid an affordable option?

Pakistan has already expanded its arms procurement base, notably with China, with which it is negotiating a submarine purchase deal, beside several air-defense system deals. These military ties are expected to deepen as an alternative to American military support.

Germany aims to take Europe's reins

A big picture article on European econo-geo-politics from the Guardian.

Given the scale of the Chinese, Indian, American (and potentially) Russian economies, it does seem hard to imagine France leaving its German embrace.

Saturday, November 13, 2010

"The political system is disintegrating"

This interview with Tom Ferguson states fairly crisply what we all know:

People who were hailing Obama as a new FDR were viewing American politics through the wrong lens. They were treating public policy as the result of the will of voters. But in fact, American political parties are mostly bank accounts. What you are told is the voice of the people is usually the sound of money talking.

Friday, November 12, 2010

Irish 2 year yields approaching 7%


Nemo, who comments regularly at Calculated Risk has a post on the Irish situation here.

Starting line:

Note to self: Never lend money to a country where happy hour starts at 9 A.M.

A nice synopsis of the current investing climate

(Unless you are a hedge fund guy)

A 30 min video goes well over a good cup o' tea

Sunday, November 7, 2010

Neo-feudalism: the beat goes on

Alleged hit-and-run driver may not face felony
Victim, attorneys furious with misdemeanor deal

EAGLE, Colorado — A financial manager for wealthy clients will not face felony charges for a hit-and-run because it could jeopardize his job, prosecutors said Thursday.

Friday, November 5, 2010

Wednesday, November 3, 2010

The key attribute of any successful ideology is that people don’t recognize it is an ideology.

An interview with James Kwak from the Straddler via Yves Smith:

It's interesting to consider in the context of the housing crisis. On the one hand, you had condemnation of the poor for buying houses that were too big, which has at least two roots in American thinking. One is this Puritan work ethic—you’re supposed to work for a living, not gamble on housing going up. Secondly, it has a class component, which is basically that the working class shouldn’t aspire beyond its station. "Who is this poor person with the gall to buy a nice house in a subdivision when he can’t afford it?" Both of those dictate that you should be critical of the poor person who buys a big house. But we have this other strain of thinking which says, (a) it’s a free market and you should maximize your profits, and (b) individual initiative is good, and you should go and do what is good for you. We don’t, however, apply those to the poor person who buys a big house; we apply those to traders on Wall Street. So, for some reason, we apply different elements of our national ideology to different sets of people.

As I say, you could see it in the housing crisis, where a lot of the right-wing think tanks blamed the individual and the government for the collapse. Now, even though there were people who were taking out mortgages that they couldn’t afford, or taking out lots of home equity in order to buy big, flat-screen TVs—everyone always says flat-screen TVs—I think that, this is just a guess, but for every person who was drawing down his home equity to buy a flat-screen TV, or an SUV, there were two people who were drawing it down to pay medical bills or college bills, basically trying to make ends meet. Middle class wages have been declining for ten years and stagnant for thirty years, and if you have a financial system that allows people making $15,000 a year to take out $400,000 mortgages, I don’t think that’s the fault of the guy making $15,000. I think it’s the fault of the financial system.

But, let’s say I’m a guy who makes $15,000 a year. I realize, wow, I can get a $400,000 mortgage and I can live in this house for a few years, and if housing prices go up, I can flip it and I can actually make a couple hundred thousand dollars. And let’s say I’m really clever, and I say, if housing prices go down, I’ll just walk away and I will have gotten to live in a really nice house for three years at no cost to myself. I mean, that’s the worst, most cynical spin you can put on it, right? But this is exactly what people on Wall Street do. The person who is criticizing the janitor for doing this is the same person who thinks that businesses should exploit every legal opportunity to make profits. So even if you attribute the worst possible state of mind to the guy making $15,000, he’s still just doing what any businessman should do under the circumstances. But our national ideology somehow doesn't allow us to think about it in those terms.


In one transaction that ProPublica talks about, JPMorgan did this deal, they got $20 million in fees, they created a CDO whose total value was about a billion dollars, and for whatever reason, instead of selling it to other investors, they held onto it. The next year, when the crisis hit, they booked a loss of about $880 million and Magnetar made about $1 billion.

So there are two possibilities here. One is that the people at JPMorgan really thought that the CDO wouldn’t collapse, even though these are people who should have known more about this market than anybody else. The other possibility is that they knew there was a fair chance it would collapse, but the $20 million in fees—half of that went into the bonus pool, most of it went into their bonuses, and they knew that if the collapsed, as long as it didn’t collapse this year, the losses would be borne by other people, which is exactly what happened. So it’s hard to say, were they clever and exploiting their own bank, or were they so caught up in how much money they were making that they were blind to the fact that it was going to collapse?

You know, there is a famous saying of Balzac that behind every great fortune there is a great crime—we certainly do not believe that in this country. The people on Wall Street are a kind of aristocracy, and I think a lot of Americans have deeply mixed feelings about whether they really want to overthrow their aristocracy.

Tuesday, November 2, 2010

Rally for Sedating Sanity

Chris Hedges' has a critique of Jon Stewart which rings true. Nice to see Guy Debord resurrected as well. It suggests that the emerging coalition of the reasonable is just a front group for Comedy Central and Huffington Post. The era in which the big media outfits are organizing our political speech seems to have firmed up.