Friday, January 28, 2011
Financial Crisis Was Avoidable, Inquiry Finds
The report, which was heavily shaped by the commission’s chairman, Phil Angelides, is dotted with literary flourishes. It calls credit-rating agencies “cogs in the wheel of financial destruction.” Paraphrasing Shakespeare’s “Julius Caesar,” it states, “The fault lies not in the stars, but in us.”Yahoo News Story Panel cites roots of meltdown, but does it matter?
Of the banks that bought, created, packaged and sold trillions of dollars in mortgage-related securities, it says: “Like Icarus, they never feared flying ever closer to the sun.”
We all know that the crisis was avoidable, and we generally agree on why it happened. You may wonder why I have I remained so pissed off about this particular topic. Sometimes I wonder myself. Who really gives a rat's ass? Well, perhaps a rat's ass is all that I care to give.
One of the primary but generally undiscussed causes of the "crisis" is the very response which occurred. The expectation of and reliance on the bailout caused the true crisis. Every time there has been a bailout of "too big to fails," it has gotten progressively worse. Read Lowenstein's When Genius Failed about the LTCM bailout.
In a 2000 review of When Genius Failed, Ron Feldman, Asst VP to Minneapolis Fed, predicted;
Unlike the banking crises of the 1980s and 1990s, where regulators allowed insured institutions to double up their losses after they became insolvent, the markets were proving themselves unrelenting in trying to shut down LTCM. Lowenstein correctly notes that by halting that process and encouraging protection, the Fed's behavior could have long-term costs.
By sparing creditors, equity holders and managers some of the pain of loss, we are more likely to see a repeat of the behavior that produced the LTCM crisis in the first place. Indeed, the expectation of future bailouts could have played a subtle role in the growth of LTCM in the first place. Did the favorable financing of LTCM go beyond reliance on the LTCM brand name and reflect the brand name and potential support of the U.S. government? Will LTCM's resolution make the too-big-to-fail problem even worse? Perhaps with time we will have a clearer sense if the benefits of the Fed's role in the LTCM resolution outweigh potential costs. For now, enjoy Lowenstein's fable but come up with your own more satisfying moral.
Investment banks and hedge funds learned the lesson. They bet, correctly, that they would not be permitted to lose.
If the financial system had seized, counterparties had defaulted, and gamblers suffered their losses, they would have had to start the machine anew. I fail to see how that could have taken more than hours let alone months. We would all use the same contracts and many of the same players would be at the table, just with very different relative positions. Some players would have fallen out of the game. Some very large players. And the players who bet right would have won.
Communism, that old hated system which we were raised to despise, sought to socialize the profits and losses of business activity. That will never work, that will destroy incentives, and that is not fair, we were all taught.
So, what have we done? We have socialized the losses but left the profits in the hands of those "businesses" which are intricately plugged into the government. How stupid are we? This is even worse than communism. We have not even bothered with the facade of logical redistribution of the profits. We have not even bothered with the facade of free markets. In the name of saving the free-market capitalist banking system, we have completely abandoned it. Why isn't that mentioned by this little commission?
Now, has anyone seen my baby?
Friday, January 21, 2011
Granted, I've done a lot of stupid things in my life. You are talking to someone who, on more than one occasion, has poured gasoline onto a burning fire. The memory of a summer spent with painful red ankles and no leg hair did not even cause me to pause before attempting it again. The next time that I was "inspired" to make the fire more interesting, out came the gasoline.
Interesting is the point. Pouring gasoline onto a fire may be a tremendously bad idea. However, when it works right, you have a wonderful and awe-inspiring explosion. When it doesn't work right, it is even better. Worst case scenario, your friends have a great story to tell the paramedics.
It is like jumping from boulder to boulder on the edge of a cliff. Sure it recklessly exposes you to unnecessary harm, but, no matter what happens, you will not have wasted your time. Either you make it or you don't. Either outcome is significant and glorious.
Not like those damn underwear. Who gives a flying jock-strap whether the underwear get folded? Folded, unfolded, blah blah blah.
I don't have time to fold underwear right now, honey. I know you think I am an idiot, but I can hardly believe that you think I am dumb enough to fold underwear. Plus, I've almost completed my latest potato cannon. How about if I just shove the underwear into a drawer and then we all agree to pretend that they are folded in there. Oh, and do you have any hair spray or lighter fluid?
#1 - Legalize it.
#2 - End the Fed. This cancer has turned malignant.
#3 - Downsize defense. Every foreign crisis which causes US investor loss does not implicate the "common defense."
#3 - Outlaw public unions. They are oxymoronic.
#4 -Flat tax (or possibly Fair tax).
#5 -Make Dept of Ed simply a funding mechanism that enforces simple workable criteria - eg. Year around school, 8 hour school day including rec/sports and extracurriculars, 80% graduation rate = $5k/student.
#6 - Phase out all Ag subsidies. If you want to support corn growers, buy corn.
#7 - Reform Medicare. Vouchers used in conjunction with co-pay can encourage competition and remove central planning and wasteful fraud-ridden bureaucracy. Ditto with Medicaid.
#8 - Permit private gambling enterprises. Why has this revenue been diverted offshores and to tribes?
#9 - Remove federal business subsidies and/or simply abolish the Department of Commerce. This political pork breeds corruption and stymies legitimate business.
#10 - Modify the Bureau of Alcohol, Tobacco and Firearms. More of each.
Saturday, January 08, 2011
In today's "Bible school without all of the mess" lesson, I would like to explore a different topic. We just completed another bout of Christmas where an entire society celebrates, with straight faces, the "virgin birth."
You see this young lass named Mary was pregnant, but she and her main man Joseph were said to be "not fuckingeth." The only logical explanation was that Mary's baby was the son of God. An invisible angel confirmed this.
Yes, history's first recorded "Holy Fuck" would explain the situation. There being no other contenders, we had a winner. But wait. Aren't there other explanations for the unexpected pregnancy of an unwed woman 2000 years ago?
Perhaps she was visited by an alien species using some type of cloaking device. He could have entered her tent while she was sleeping for a little "Uncle Ear's special hug." I'm kidding. Jesus Christ don't get so concerned.
He could have impersonated an angel when she awoke. "If you get pregnant, don't bother trying to find me. Your baby-daddy is an omnipotent, omniscient, but cranky God who created the entire vast universe but needed your uterus for this little project."
Or, maybe Mary was a fully-functional hermaphrodite. The text is conspicuously silent on this subject. I'm sure this relevation would cause concern to those who worship Mother Mary but would likewise turn on its head the import of the phrase, "Go fuck yourself!"
Or, perhaps Mary was actually twins, one of whom engaged in sexual intercourse just like the rest of us mammals. The mammalian Terry might have gotten stuck living the life of Mary when she pretended to be Mary while Mary went to see a concert. Hilarity ensued when Mary, pretending to be Terry, was called up on stage and had to pretend that she was the one who was not a virgin. You know, Madonna.
Good times. So, I hope you've learned something while I've gotten this off of my mind. You know, you really have helped your old Uncle jack off.
Friday, January 07, 2011
And with age comes wisdom. And with wisdom comes wisdom teeth. And with teeth come chickens.
Which brings us to the response to a reader inquiry: "Please apply your incompatible wisdom, unparallel knowledge, and unique incisors to elucidate how one might expand the concept of a turducken ." (Or words to that effect).
If I am not mistaken, and how not mistaken could I be, it is now 2011. Yet here we are eating the same old turducken as we were eating 20 years ago. As everyone knows, the turducken is a de-boned chicken stuffed inside of a de-boned duck stuffed inside of a de-boned turkey. We have all considered stuffing that thing inside of a de-boned hog stuffed inside of a de-boned cow. So 20th century.
Let's get postmillenial. Why don't we resurrect some of the larger extinct species to continue this out to a bigger and therefore better conclusion. Recreating a mastodon should be no problem. I seem to recall, although I don't feel like spending 45 seconds on Google to confirm, that a frozen mastodon complete with viable DNA was found in the ice somewhere (probably somewhere cold).
OK, so grow one of those in a buffalo mama or whatever, and we will stuff the beef, pork, turkey, duck chicken thing into a de-boned mastodon. Now let's get creative. If them damn scientists can stop dicking around with chicken's teeth and watching us masturbate long enough to get some work done, they should be able to reverse engineer some other species like the T-Rex and the Apatosauraus.
What I am proposing, my culinary colleagues, is nothing short of the Apatyranomastobeebacoturducken (drizzled with reduction of dodo).
Tuesday, January 04, 2011
Can scientists turn a chicken into a dinosaur?
In other words, it is as if birds still have the molecular capability to grow teeth, but just aren't doing so anymore. Even though it hadn't been switched on in 150 million years, Chuong wanted to identify and reconnect that molecular pathway in order to re-active teeth-building processes.
By studying the genes, molecules and chemicals responsible for the growth of mouth and teeth structures in other organisms, Chuong was able to stir together a mix of molecules that might trigger the "dormant" circuitry into action. He then placed tiny beads of this concoction in the mouths of the chicken embryos. It worked. Through the microscope, he and his colleagues watched the embryos growing, as if the chickens had, all along, the genetic instructions to grow the beak. They may have had the ancient circuits to do so, but they needed just the right ingredients to be properly switched on.
Can your damn science do something worthwhile or not?
I don't want chickens with teeth, I want broiled T-Rex drizzled with reduction of Dodo. Or maybe extend the turducken concept out a few levels. Remember the big rack of ribs foretold by the Flintstones. You know, something useful.
If I didn't want to eat previously extinct animals, then I would have lived in the not-too-distant past.
Monday, January 03, 2011
Work like you don't need the money, love like you've never been hurt, dance like no one is watching, sing like no one is listening, and live like it's heaven on Earth.
It was attributed to "anon." A quick search reveals that this quote has been attributed to Randall G. Leighton, Mark Twain and Satchel Paige (three of America's greatest Presidents).Regardless of the identity of the wisdomer who imparted this wisdom, there are a few obvious omissions:
Dress like you don't have a mirror
Watch like the TV is interesting
Write like anyone gives a shit
Drive like you won't see tomorrow
Stalk like the restraining order has been lifted
Screw like your friends are all watching
Speak like no one understands you, and
Spend like no one is hungry
Saturday, January 01, 2011
1) Why are there no simquaolas? Nobody has the initiative to invent them?
2) Have you ever noticed how perfectly the Christmas carol can be performed:
Fu uh uh uh uh
Uh Uh Uh
3) Have you ever noticed that the guy who prefaces his question with "have you ever noticed that" doesn't really and truthfully want your answer?
4) Have you ever noticed that this is turning into a Seinfeld rant? Not that I'm in needed of gassing.
5) Have you ever noticed that we can never really escape the sins of our forefathers?
6) I suggest that we smelt the clouds (in order to extract and condense their silver).
7) My nieces are visiting, and I have now listened to the Justin Beaver album 4,648 times. Here is how his song(s) goes:
I'm gonna tell ya one timeI'm gonna tell ya one timeI'm gonna tell ya one timeI'm gonna tell ya one timeI'm gonna tell ya one timeI'm gonna tell ya one timeI'm gonna tell ya one timeI'm gonna tell ya one timeI'm gonna tell ya one timeI'm gonna tell ya one timeI'm gonna tell ya one timeI'm gonna tell ya one timeI'm gonna tell ya one time
(Parenthetically, I think we should expend more resources on teaching mathematics including basic counting).
I'm gonna tell ya one time, You're the only one (although my counting skills are suspect) and I only want to be with the one ("one" in the scientific notation sense meaning that you are one of 10 or fewer, or lets just round to the nearest one hundred), and I say this to you baby, one more time, I'm gonna tell ya one time..."