Nobody Asked Me, But...

1) North America enjoyed its warmest April on record. This is after the northeast suffered through its rainiest March on record, and the continent enjoyed its warmest January on record. Weather extremes...I'd say it's a sign of global warming, but that's not "settled science", according to the little fraidycats of the right wing. Hope they enjoy drowning in their own hubris. Pity they have to take the rest of us down with them. By the way, that Oregon Petition, that supposedly has 20,000 scientists signed on for? Only 9, count 'em, nine of those scientists have advanced degrees in anything close to climatology and all nine of those are on advisory boards to Big Oil companies.

 

2) It's good that Hillary Clinton reaffirmed this. It's important that Israel understand that the relationship between us and them is more like a parent to an obnoxious teenager than equal partners. We won't abandon them, but we will make them grow up a little.

 

3) Charlie Crist comes out....as an independent.

 

4) I'll be curious to see how many in his party and in the Teabaggers call him a RINO...cuz, you know, The Terminator and all that. It's intriguing to see that even for deeply partisan political hacks, celebrity cuts you an awful lot of slack.

 

5) Would you want to know your entire genome for $1,000? I've registered with a few places that will, as discoveries are made, alert you to whether you should be concerned about a particular genetic disorder or predisposition (along with several deep genetic studies), so my answer would probably be yes.

 

6) Life. It's out there. For real.

 

7) GDP was up 3.2% in the first quarter of 2010.

 

8) Warren Buffett holds his annual BurningStock stockholders meeting for Berkshire Hathaway this weekend. Truly, this is like Burning Man and Woodstock for investors. By the way, don't blame Buffett for Ben Nelson's idiotic stance on financial reform. It turns out Nelson was more self-interested than protecting his largest teat.

 

9) The unintelligible praises the, um, unintelligent. It's not so much that Beck is an idiot. He is. But it's that he's completely uninterested in learning anything and passing it along to his audience that most offends me. Broadcast media, by dint of their entree into our most private spaces, have a duty to not only entertain us, but to inform us with facts and logic. Beck, along with most of FOX News, does neither. If I was president, I'd make 'em fix that.

 

10) If you're in a hit-and-run with a car, and you're driving a plane, you might want to stick around next time, if only for the press coverage.

Surrender, Dorothies!

It seems to me that the "good news" Republicans were having poured into their ears earlier this year about the mid-term elections is quickly turning into Gonzago's poison.

 

Item 1 - Unemployment claims at lowest level in months.

 

Item 2 - Republicans fold like cheap suitcase.

 

Item 3 - Rising star says no way.

 

Item 4 - Arizona law is splitting party.

 

Item 5 - "Drill, baby, drill" backfires-- literally!

 

Of these five items, item number one is most important, followed by item 2. The other three pretty much are current blips on the radar but have potential impact down the road.

 

The key to a Democratic hold on Congress is jobs, pure and simple. When people work, they're happy. When they're forced out of work, they're mad. When they are forced out of work and look down the road and see no prospects, they're terrified.

 

Republican election strategy since 1994 and the Contract On...I mean, "With" America, has been to prey on the terrorising of Americans. The more fear, the more likely Americans will vote Republican. Their strategy has been divide, conquer, and destabilize, but never govern. 

 

The logic is warped, of course. Americans always do better under Democratic presidents. Even in this current recession, American workers have found a haven with Obama that they did not have with Bush. Republicans have run this country with a curious attitude of enriching those that have, a sentiment that should have gone out with the overthrow of the various European colonial empires. Once upon a time, government was for the protection of power for the elite. No longer.

 

Couple the fear over lost jobs with the classist anger over the financial bailouts Bush impressed upon the country and Obama continued, and you see a boiling over of anger, which the Democrats have worked hard to focus on the GOPartisans.

 

Has it been successful? It seems so, but there's plenty of time before November and politics is the art of the possible. It's feasible that the Republicans can come up with a successful midterm strategy that somehow dents this armor that seems to be forming around the Democrats.

 

Surely, however, the Democrats will not lose as badly as many hand-rubbing gleeful rightwingers had forecast even in March when healthcare reform was on the ropes. A few seats? Probably. Lose the Senate majority? Not very likely at this point. Lose the House majority? Hell, no.

 

What the Democrats will have to face come January 2011 is a more radicalized Republican minority, one with more Teabagger support and a more militant agenda.

 

To quote a moron: Bring it on.

The Jaded Monkey Is In The Glove Box

Apparently, Goldman Sachs doesn't get it about both the financial crisis and the Senate hearings:

Goldman Sachs Chief Executive Lloyd Blankfein told legislators Tuesday that when clients approach the investment bank as a market maker to buy or sell securities, they don't care what the firm thinks of the securities or whether it's betting against them.

Now, for some investors, that might be true.  Jaded monkeys like me who have spent 30 years in the underbelly of the financial markets dealing with the cowboys have learned how to read between the lines and focus on specific words and phrases in offerings and private placement memoranda would have hedged the Goldman Sachs offering, asking to get in on the other side of the deal.

 

Similarly, if I was offering to bundle my holdings and have GS place them, I'd want them to minimize my risk and play down the potential for loss. It's just good business sense, if by "business sense" you mean leaving the suckers holding the bag while I sail to Bimini.

 

Which, unfortunately, is precisely what "good business sense has come to mean in America in the 21st century.

 

But, to borrow from another set of hucksters, wait! There's more!

Sen. Carl Levin, chairman of the Permanent Subcommittee on Investigations, lashed out at Blankfein, claiming that Goldman creates conflicts of interest when it underwrites securities while betting against them.

Levin cited examples where Goldman employees described collateralized debt obligations the firm was selling, or assets backing those deals, as "shitty (corrected for impact)," "crap," "junk" and "lemons."

You'd think these morons would have learned from the Enron debacle. Worse still, as an employee of a FINRA registered firm, my e-mails are subject to storage and archiving for possible use in any investigation of my firm's practices.

Let's tie these two together: It's one thing to sell a risky security to an investor and make the blanket disclaimer that it could conceivably go belly up faster than fish after dynamite. It's another thing to know an investment is shitty and still try to pump out a sale. Markets demand perfect information and if your brokers are proudly boasting of selling a pig in a poke, that same braggadocio ought to be shared with the investment community, and not covered up in order to maximize your profit on betting against the very instruments you've sold.

Derivatives serve some purpose, it's true. An airline that hedges its fuel costs by purchasing futures on its fuel is doing right by its shareholders. Further, if it goes out and places a bet that the price will go down below the future contract price, it is mitigating its loss on the contract.

And vice versa for the firm selling the fuel futures contract. It's an entire other thing, tho, for the broker selling the futures contract to place a side bet based on knowledge he or she has with respect to the price of crude, say, that either party or both is not savvy to.

And still, Goldman Sachs are not getting it! As a "market-maker," Goldman Sachs has an obligation to set the ground rules for the market it is creating. It has what's called a fiduciary responsibility (a responsibility not unlike the one a doctor has to a patient or a lawyer to a client) to perform up to certain standards that exceed the expectations of investors. And it has a well-earned reputation to protect.

In one fell swoop, in one release of e-mails about a series of "shitty deals," Goldman has destroyed its credibility, the markets' credibilities, and rejected its fiduciary responsibility. Rather than admit this, however, Goldman has basically gone on the record as saying they acted in accordance with what some fly-by-night shyster would have done: fleeced investors.

There was a time in this country when an investment bank-- Merrill Lynch, Smith Barney, Goldman Sachs-- would have competed for clients based on its reputation and the trust its investors and clients placed in them.

Now, I'll admit one thing: the Internet and the rise of discount brokerage houses has made that aspect of their business moot. After all, why pay 2% of your assets and 20% of any trades to Goldman or Bear Stearns when you can commit the same trade at TD Ameritrade for $9.99? You keep more of your money, and it's the same damned shares.

This forced Wall Street houses to find new and more innovative ways of fleecing people so they can afford to drive their Beamers and fly their Falcon 50s to their beach house on Bermuda. But that same technology that defeated one aspect of their business made this other aspect of their business wildly profitable.

Powerful computers, advanced mathematics, and the ability to sift through mounds of information well-ahead of investors has given the Wall Streeters a powerful leverage over not only investors, but the American marketplace. Wal-Mart no longer sets prices as much as Wall Street does, by forcing Main Street to dig deeper and deeper into its bottom lines and come up with more and more income and dividends.

And this, this is the great tragedy of Goldman's blind spot. They aren't just stiffing investors and clients, they're stiffing the poor shnooks who bought houses and now have lost value in them, and opened shops and had to close those, and tried to keep hold of a job that was terminated because the company lost money directly or indirectly to Goldman's coffers.

 

 

 

All Hands On Debt!

When your national debt is $14 trillion dollars, you want to bring it down quickly but safely. You want to avoid unduly burdening your citizenry for past mistakes (*koffkoff*warofchoice*koffkoff*) but you have to balance that with the simple fact that a $14 trilion dollar deficit already burdens your citizenry for those mistakes.

 

That's why I endorse Erskine Bowles' position: All cards are on the table.

 

Half of our debt is owned by foreign nations. In effect, given that our debt rivals our gross domestic product--- roughly 87%-- we're working for the Chinese, British, Japanese and Saudis.

Half of those nations don't have good redundancy schemes.

 

As recently as 1990, our public debt was around $4 trillion dollars. Bill Clinton was able to shift the tax burden from the middle class to the rich and made significant strides in cutting the national debt. Our debt-to-GDP ratio has not been this high since just after World War II, which saw an enormous expansion of the economy as the wars wound down, and the GI Bill was enacted, which encouraged home ownership and college education, among other benefits for the returning veteran.

 

Roosevelt raised taxes. Rather, he expanded the tax base to include all income, not just wage income, proposed taxes on corporate earnings, and instituted the payroll tax that funded Social Security. And he raised the top marginal tax rate to 91% (!!!). He squarely put the burden of economic recovery on the shoulders of those who both brought the nation to its knees in the Great Depression as well as those who benefited from the increase in economic activity most.

 

In fact, consistently, with the exception of Eisenhower (who these days would probably be a Democrat), every Republican president since World War II has raised the percentage of debt to GDP, and every Democrat (Obama is an incomplete grade) has lowered it.

 

Democrats are rightly called the party of tax and spend. Republicans just spend. Democrats can afford what they buy, Republicans put it on a massive credit card and the bill is now coming due.

 

This is why Obama had to create a debt commission, to correct the mistakes of yet another Bush Presidency. And the solutions are not pretty. There's only so much personal income to be had from the middle class, which has seen its wages stagnate since 1980 and after adjusting for inflation, decline. Yes, more families now have two incomes so there's more income coming in the door, but there's also more debt going out the door: payments for a second car, for example, or disproportionate taxes on that second income (the "marriage penalty"), child care payments, increased spending on clothes and food, and so on.

 

The gap in income between the rich and the poor does give some material for increases in income taxes, its true, but it's not as much as many would think, and certainly not fourteen trillion dollars worth. It may be time for more effective revenue enhancements, to use a cliche: a national sales tax, for example, that exempts staples and necessities, scaled so that the more expensive an item in a class of goods is, the more taxes will be thrown off.

 

If you buy a Hyundai, in other words, you won't pay as much as a Camry, and nowhere near what a Lexus buyer would pay.

 

In addition to raising taxes on the wealthier, I'd like to see some tax cuts that make sense. For one thing, cut taxes on bank accounts, savings accounts, to encourage people to put their money into the bank.

 

Which would encourage lending by the banks. Which would encourage economic activity. Which would generate more jobs and income. Which would raise the GDP. Which would make us a healthier nation once again.

They're Coming To Take Me Away, Ha Ha!

I'm really rather upset with this:

Renowned physicist Stephen Hawking has repeated his long-held belief that intelligent aliens are likely to exist, and that a visit by them to present-day humanity would probably have unfortunate consequences for us.

Publicising a new documentary he has made for the Discovery Channel, the legendary boffin told the Times at the weekend:

“To my mathematical brain, the numbers alone make thinking about aliens perfectly rational... If aliens ever visit us, I think the outcome would be much as when Christopher Columbus first landed in America, which didn’t turn out very well for the Native Americans.”

I'm not upset because I want to quibble with Dr. Hawking with the usual rebuttal that it's a long way from whatever planet they'd originate from and why would they come all this way to get into our faces?

 

He's right. It's a distinct possibility.

 

I'm upset because, dammit, this is the third piece of science I've read or seen this weekend/week that has anticipated a four novel trilogy I'm doing research on! ThumbPer must be reading my notes and getting in touch with people!

 

Back to the story at hand: Mankind has always had an exploratory nature. If there's a cave, we'll enter it; An ocean, we'll cross it; a moon, we'll visit it.

 

With the exception of the moon so far, none of this has turned out well for the visited. Not the bear in the cave, not the native across the ocean, not the pristine environment we've seeded with our trash and illness.

 

Now, one could make the quibble, which I would, that as we advance as a civilization and grasp a larger understanding of the world around us, we've learned that it's important to co-exist with those around us. We have not learned the lessons perfectly, to be sure, but it is a learned lesson nonetheless. We've learned, because we've recognized the resources are limited and people have a right to be treated as equals.

 

Other societies might view such an attitude as immature at best, and as weak at worst. In America, we've never really come to grips with the historical nature of our more savage side, choosing instead to sanitize our history to show the "Injuns" as at best, our helpmeets and at worst, brutal savages who needed to be tamed and civilized.

 

Echoes of those hegemonic harmonics echo to this day in Arizona, where anyone can be stopped on the street and asked for identification, pending deportation back to Mexico for being an undocumented alien.

 

One wonders how Arizona would handle a full-blown invasion from Alpha Centauri, but I digress...

 

While there's no guarantee that aliens would be peaceful, there is reason to suspect that they'd be more interested in learning what they can from us, and teaching us what they can. The question is, would it be something we'd want to learn? Look at the second and third waves of colonization in human history: it's all about training natives to be more "like us".

 

Just like the more Cro-Magnon element of the United States rails against cultural diversity and tolerance, so would many aliens insist that their way is the right way, no matter how peaceably and palatably they'd offer it to us "in the spirit of intergalactic good will."

 

I don't think the first contact we have with an alien society will be a full-blown invasion, as some movies have suggested. On the other hand, I do think any alien visitation will be made with an eye towards the benefits the aliens can take from our resources. Resources unavailable from easier sources. If they needed metal ores, the asteroid belt would make a whole lot more sense than dropping into a steep gravity well. If they needed water, comets would be much easier to corrall and melt.

 

Which really doesn't leave us much to bargain with. Finished products, manufactured goods, and scientific discoveries are possibilities.

 

After all, even tho physics is the same in this galaxy as any other galaxy, the creative mind demands that we will have made discoveries that they have not. For every nuclear power system they can offer us, we might be able to offer them the Slinky. It's not unheard of for natives to bilk the pioneers, even tho historically it's worked the other way around.

 

It will be interesting, when the day comes, to measure value systems, and to see what the universe has hidden from us on this lonely marble.