LILA RAJIVA: The Mind-Body Politic
Individuals Not Ideologies
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Archive for November, 2009
Philanthropic Versus Misanthropic Libertarianism
Mad props to Humble Libertarian for coming up with this:
“Libertarian thought often starts with “me” and says to others “you shouldn’t violate my rights,” which is certainly true, but somewhat off-putting because it’s egocentric. Aside from being off-putting, it’s the moral low-ground. It’s moral and true, but it pushes the moral imperatives of libertarian thought off on someone else. The moral high-ground is to accept and practice the moral imperative for yourself. Libertarians would always do better to say, “I shouldn’t violate your rights- I won’t violate your rights.” In practice this makes a world of difference. On the issue of welfare and property redistribution, for example, the first approach would sound like this: “Who are you to take my hard-earned money and give it away to the poor? Even if I should give it to them, you have no right to confiscate my property from me.” The second approach is a sharp contrast to the first in both tone and content: “Who am I to take your hard-earned money and give it away to the poor when I’m likely not even giving enough myself? Even if you should give it to them, I have no right to force you to, especially when I’m not giving enough myself. How hypocritical of me would that be?” See how much more humble that is and sounds?
The first example is a challange. Its tone is antagonistic and its premise is egocentric. The second example is an invitation and a catalyst for conversation. Its tone is humble and its premise is philanthropic- motivated by love and concern for other human beings and their rights. The distinction here can ultimately boil down to these alternatives, egocentric libertarianism on the one hand, and philanthropic libertarianism on the other.“
Dubai Government Thumbs Its Nose at Creditors
After tentatively implying that there would be a back-stop to Dubai World´s debt problems, the Dubai Government on Monday disowned any legal obligation to Dubai World and told creditors that they needed to take responsibility for their loans.
“Creditors need to take part of the responsibility for their decision to lend to the companies,” said Abdulrahman al-Saleh, director general of Dubai’s department of finance. “They think Dubai World is part of the goverment, which is not correct.”
My Comment:
What´s going on here? The back and forth isn´t recent, but has been going on the whole year, with Dubai implying at one time that its debt load was taken care of, and at another, that it still had more problems; and in this instance, first seeming to back up Dubai World and then, backing-off from its backup….
The timing and vacillation seem to suggest that the government is testing the market and the reaction of investors before making its move. Not good.
And it leaves open the possibility, already raised by UBS in a recent Bloomberg piece, that the problems exceed the $80 billions of government liabilities and might extend to off-book structures that are not presently known.
Update:
After weekend assurances from Dubai that its much richer fellow-emirate Abu Dhabi, seat of the UAE federal government, would help, and that liquidity would be assured for local and international banks that needed it (through a “special additional liquidity facility”), Asian markets recovered this morning from their sell-off last week. But this morning, the local stock exchanges have been hit hard and this new announcement could provoke a second sell-off in world markets, especially in the UK FTSE, since British banks, especially Royal Bank of Scotland, have loan exposure to Dubai World.
Then, there´s also the exposure that UK banks have to other investments where Dubai World holds a stake.
And there´s the indirect exposure US banks have to Dubai through ties with UK banks.
Pollution, Not Global Warming, Is Biggest Environmental Threat
Mark Sircus. from Globalresearch, via Lew Rockwell:
“Meanwhile despite the international financial crisis pollution is still increasing as we continue to blanket the planet with mercury from coal fired electrical plants around the world. Mercury and thousands of other chemicals continue to be released in staggering tonnages and this is the real threat that we and our children face. Again they had most people worrying about the wrong thing – our old friend CO2.
Should we count the huge tonnage of Coke and Pepsi into our calculations of poisons released on earth directly into peoples’ guts?
Things are quite a bit different today than in 1918 when the last pandemic (first large experimental vaccine program) happened. Today people and our children are walking chemical time bombs. Diseases are accidents only waiting to happen and the triggers that will set us off get more fine-haired every year. The global catastrophe with chronic diseases like cancer, diabetes, heart and neurological diseases has more to do with chemical poisoning running head on into nutritional deficiencies; and the fact that too many have lost their souls and don’t know truth from untruth anymore than anything else.”
India Fears Effects of Dubai Meltdown
After earlier assurances that the Dubai meltdown wouldn´t impact the Indian market much, top officials now admit in published reports that the Indian labor market could be affected.
“Annual remittances to India from UAE is about 2 billion US dollars, out of the $52 billion sent by Indian expats from across the world.Two-thirds of the six million people living in Dubai are Indians, more than 60 per cent of them Malayalis, much to the worry of Kerala’s Finance Minister T M Thomas Isaac.“One main fear,” he notes, “is that the credit to realty sector in Dubai would be frozen for some time. It could seriously affect the construction sector, thereby our workers.” There is also concern about the fate of Kochi’s Smart City project as the Dubai-based real estate giant TECOM is already alleged to be in a bad shape.Most of the Indians employed in the UAE, according to recruitment agencies, are in the real estate sector, financial services and retail.“The Middle East meltdown,” says E Balaji of Chennai-based headhunting firm Ma Foi Management Consultants, “will lead to at least 25 per cent contraction in the job market. It can have a ripple effect.”
My Comment:
I´m assuming that the job market refered to is the job market for Indians in the Middle East….
Meanwhile, the rupee has come under pressure as the Indian stock market sold off on the events in Dubai.
Rothschild Helps Dubai Put Assets On Auction Block
From The Daily Telegraph:
“Paul Reynolds, head of Rothschild’s advisory operations in the Middle East, was this week asked to work for the Dubai government’s chief restructuring officer alongside Aidan Birkett of Deloitte, who was appointed on Wednesday.
The team is tasked with assessing the group’s assets, which is likely to result in a large scale sell-off of assets as varied as the QE2 cruise liner; Turnberry, the golf course that hosted this year’s Open Championship; and a raft of properties.”
My Comment:
This was the first I´d read about Rothschild´s involvement in Dubai, but it turns out Rothschild has been advising Dubai about the potential bankruptcy of Dubai World and its subsidiary Nakheel for a while. The advice is in connection with the bond issue to funnel money to Nakheel through something called the FSF (Financial Support Fund), which will apply certain tests (equivalent to the US “stress” tests) to pick and choose which of Dubai World´s operations will qualify.
“Those seeking FSF cash will have to demonstrate they have a long-term plan for financial and commercial viability, not least because the cash will have to be repaid, probably within a three- to five-year time frame. …..
It is worth noting, too, that the Dubai financial sector appears to fall outside the Rothschild guideline of FSF eligibility. Although they are obviously a key part of ongoing economic development, the emirate’s banks are generally regarded as being in a comparatively healthy condition, well-capitalised and with acceptable levels of non-performing loans. But whether the Rothschild strategy would allow a big financial institution with a high real-estate exposure to qualify for FSF funding is open to debate.”
More at Global Reearch.
What´s interesting is that Dubai World´s real estate assets wouldn´t qualify, which means that a lot of expensive real estate, some of it in New York and London, is likely to be on sale for cheap, although Dubai itself is stating that it will not allow itself to be forced to sell its prize assets at what it considers unfair prices.
Now with Dubai´s own property prices already down 50-60% from their 2008 peaks (with another 20% to go), what´s a firesale in London or New York property going to do to prices already showing signs of entering the famous second dip?
The Culture of “Da Boyz”
In a piece on Pamela Martens, the former Wall Street whistle blower, who last year unearthed the black box of Markit, as well as the Primex dark pool, Stephen Metcalf discloses the culture of “da boyz.”
Whistle-blower´s Grim Tale, Stephen Metcalf, The Observer, December 1, 2002
“The secret to Wall Street’s systemic chauvinism is simple: The Street is insulated against litigation and bad publicity. All employees at the major investment banks must sign a mandatory arbitration clause, effectively giving away their right to sue their employer. Claims are adjudicated in what amounts to an industry-controlled private justice system, by arbitration panels staffed overwhelmingly by white males in their 50’s and 60’s. In mandatory arbitration, no depositions are made public, and awards have ironclad gag provisions. So Wall Street can continue to smile, and smile, and be a villain. One anecdote in particular conveys the full horror of the situation. When two female Smith Barney employees complained of strikingly similar episodes involving a male co-worker, in which the man forced himself on them physically, the firm waited four years before conducting a hearing. “A week before the hearing,” Ms. Antilla writes, Smith Barney “forced the two women to undergo examinations by a psychiatrist of the brokerage firm’s choosing.” One of the women was subjected to a Gulag-quality interrogation. The grilling included “questions about her sex life, the opening of her gynecological records, and queries about her menstrual periods, her marital counseling, and her divorce. The psychiatrist even had copies of her therapy records.” The woman finally broke down when the psychiatrist asked her to recite in reverse order the names of the U.S. Presidents.”
Mark to “Markit” Manipulation
From Deep Capture:
“Another line of inquiry has not been pursued, however, though it is of equal, and perhaps greater, significance. That line of inquiry concerns the way in which the prices of credit default swaps effect [sic] the perceived value of all forms of debt — corporate bonds, commercial mortgages, home mortgages, and collateralized debt obligations — and as a result, the ability of hedge funds manipulators to use credit default swaps to enhance their bear raids on public companies.
If short sellers can manipulate the price of credit default swaps, they can disrupt those companies whose debt is insured by the credit default swaps whose prices are manipulated. The game plan runs as follows: find a company that relies on a layer of debt that is both permanent, and which rolls over frequently (most financial firms fit this description). Short sell that company’s stock. Then manipulate the price of the CDS upwards, preferably into a spike, as you spread the news of the skyrocketing CDS price (perhaps with the cooperation of compliant journalists at, say, CNBC).
Because the CDS is, in essence, an insurance policy on the debt of the company, the spiking CDS pricing will cause the company’s lenders to panic and cut off access to credit. As this happens, the company’s stock will nosedive, thereby cutting off access to equity capital. Thus suddenly deprived of credit and equity, the firm collapses, and the hedge fund collects on its short bets.
Moreover, credit default swap prices are the primary inputs for important indices (such as the CMBX and the ABX) measuring the movement of the overall market for commercial and home mortgages. In the months leading up to the financial crisis of 2008, short sellers pointed to these indices in order to argue that investment banks – most notably Bear Stearns and Lehman Brothers – had overvalued the mortgage debt and property on their books. Meanwhile, several hedge funds made billions in profits betting that those indexes would drop.
It should therefore be a matter of some concern that credit default swap “prices” and the indexes derived from them are determined almost entirely by a little company with zero transparency and, it appears probable, a high exposure to influence from market manipulators. The company is called Markit Group, and there is every reason to believe that its CDS-driven indices (the CMBX, the ABX, and several others) are inaccurate, while the credit default swap “prices” that they publish and which rock the market are in fact nowhere close to the prices at which credit default swaps actually trade.
Last year, the media reported that New York Attorney General Andrew Cuomo had sent subpoenas to Markit Group as part of an investigation into possible manipulation of credit default swap prices by short sellers. This investigation, like Mr. Cuomo’s other investigations into market manipulation, have yielded no prosecutions.
The Department of Justice is reportedly investigating Markit Group for anti-trust violations. This investigation (which is reportedly focused on how Markit Group packages and sells its information) seems to acknowledge that Market Group has near-monopolistic control of information about credit default swap prices. However, if the press reports are correct, the DOJ has not considered the possible appeal of this monopolistic control to market manipulation.
“
My Comment
This isn’t the first time that Markit has been fingered. Pam Martens wrote a detailed piece last year at Counterpunch called “How Wall Street Blew Itself Up” that blew Markit´s cover.
Now I´ve always suspected the indices (including Libor) are manipulated. The fundamental problem in our markets is corruption..and that´s directly related to size and monopoly. That´s why you do need certain kinds of “level playing field” or procedural types of regulation (not substantive regulation) to take care of the problem. I think this should also take care of Olagues’ caveat. The Deep Capture team isn’t confining its investigation to simply naked shortselling in the technical sense, but is expanding its work to the entire range of strategies involved in rigging the markets - insider trading, short-selling of all kinds, and the manipulation of indices. (Correction: I am referring to uncovered short sales, where there is no intent to deliver)
Deadbeat Expats Flee Sharia Crackdown on Debtors
Foreign workers lured by the promise of easy living and credit are turning tail and choosing to leg it, rather than face Dubai´s tough Sharia law which mandates prison for debtors [not a bad idea in some cases...]:
“Now, faced with crippling debts as a result of their high living and Dubai’s fading fortunes, many expatriates are abandoning their cars at the airport and fleeing home rather than risk jail for defaulting on loans.
Police have found more than 3,000 cars outside Dubai’s international airport in recent months. Most of the cars – four-wheel drives, saloons and “a few” Mercedes – had keys left in the ignition.
Some had used-to-the-limit credit cards in the glove box. Others had notes of apology attached to the windscreen.”
Dubai Debt Taken Out in Islamic Bonds
“To complicate matters further, the debts were taken out as Islamic bonds, known as sukuks, and the rules about what happens if the borrower fails to pay them back are hazy.”
My Comment
Add to this the earlier announcement that Abu Dhabi would treat the debts selectively, and you begin to wonder. If the selectivity is based on the degree of interconnection with the government, that would be one thing. But if the selectivity is based on discriminating between domestic and foreign creditors, Islamic and non Islamic, I suspect this would cause problems.
Now a bit of information on the sukuk.
Islamic banking has five pillars, as noted in this Times piece :
1. a ban on interest
2. a ban on speculation
3. a ban on haram (forbidden) investments, such as pork or gambling
4. the requirement of partnership or sharing of profit and loss
5. the requirement of asset backing.
What´s interesting is that while several Islamic funds have defaulted, the sukuk itself has never been tested in court, giving rise to uncertainty about how creditors would be treated in an insolvency….how they would be ranked in preference…and whether they would be competing against each other rather than for the underlying assets…..
Psychic Income Versus Real Income (Updated)
John Mauldin in Frontline Thoughts on one off balance sheet vehicle that might get us out of this crisis faster than we think: psychic income, our dreams for our future…
“Every night we go to sleep on our psychic income, and every day we get up and try to figure out how to turn it into real income……The future is never easy for all but a few of us, at least not for long. But we figure it out. And that is why in 20 years we will be better off than we are today. Each of us, all over the world, by working out our own visions of psychic income, will make the real world a better place.”
My Comment:
In response to RobertinDC, my loyal reader, who politely calls this a “crock,” I should add the context of Mauldin´s note, which is technological change.
Mauldin argues that even if the market stays flat or depressed in real terms, even if unemployment increases and the standard of living falls, none of us can know for sure what the future holds. In ten years time, the world may very well be a better place.. in terms of possibilities… than it is today because of technological innovation.
Is this implausibly “feel good” stuff?
Well, yes.
Of course.
It takes no great courage or imagination to imagine plausible scenarios.
Imagination is the ability…the very creative and fundamentally life-giving ability..to imagine implausible..even unbelievable scenarios and then make them not only plausible but inevitable.
And, again in a fundamental sense, that is how creativity in all fields works. Focusing solely on the negative is itself a form of delusion.
I don´t mean by this that you can wish yourself into any outcome you want. There are also physical laws at work that you have to accept. You cannot wish away a contraction of the economy because of overspending, for instance. The economy has to correct.
But the effects of the contraction, the extent, and its resolution can in fact be ameliorated by a change in attitude.
And by staying alert to every possibilty, we can also sense when deterministic interpretations - such as, “this is the way capitalism is“ — are being used to cover up what is in truth a very manipulated reality.
In that case, what we should focus on is an imagined ideal, the way capitalism should be, which may be implausible or even a crock, in some views, but is our only true guide to a way out of this debacle.
This is why I wrote, in 2007, that the economy didn´t have to crash. It was in a PR piece for the book.This wasn´t because I lacked a healthy sense of reality. But reality in the sense that physicists understand it is a very different thing from the “common sense” understanding of reality. The physicists´view is actually closer to what might be called implausible or even unbelievable. But it´s none theless true. The same divergence between common sense perception and underying reality exists in the economy. Cynicism is often right. But not always. Pessimism is often warranted. But not always.
There were fundamental problems in the economy in 2006-2007, but the way the crash occured struck me then as very strange.
I suspected at the time that some of the indices were manipulated…and now the deepcapture team (and others like Pam Martens) have shown how they could have been (see prior posts).
In time, you are going to find that this is true of many of the indicators we use to read the mood of the investing public. Markets are driven by emotions. And smart crooks with the ability to manipulate that emotion can make big money from the manipulation….
And if they can, it stands to reason they will.
What is surprising is only why it took so long for supposedly tough minded financial reporters to figure that out.
In any case, whether manipulation is proved or not, what ordinary people can do is to take for their model the good trader. Good traders are people who can “keep their heads when all around you are losing theirs and blaming it on you”..as Kipling said.
The hall mark of expert trading is to control the emotions and rein them in from succumbing to mass moods. What does that mean in practical terms?
It means when everyone is panicking, look for silver linings, and when everyone is complacent, learn to worry…
Abu Dhabi Agrees to Selective Bail Out
“We will look at Dubai’s commitments and approach them on a case-by-case basis,” the official told the Reuters news agency by telephone, adding: “It does not mean that Abu Dhabi will underwrite all of their debt.” Al Jazeera, November 28, 2009
An unnamed Abu Dhabi official has said that the rich UAE [United Arab Republic] emirate will help its spendthrift neigbour Dubai on a case by case basis.
This gets pretty interesting for all the other countries out there with sovereign debt problems .. even though, as I blogged earlier, Dubai´s is not a sovereign debt problem. It´s a problem for Dubai World.
However, there seems to be a perception issue involved, which is causing credit default swaps for Irish banks to rise dramatically.
What´s going on?
This isn´t the first time the Dubai story has caused jitters in the market. Ten months ago, Dubai CDS´s rose to record levels on fears that neighboring and much richer Abu Dhabi wouldn¨t ride in to the rescue.
But that was Dubai CDS. Now it´s Irish CDS´s that are up.Over at the Baseline Scenario, Simon Johnson has an explanation. He says the Irish tremors are caused by the perception that as Dubai goes, so go the other sovereign debt crises around the world:
1. If Dubai can effectively default or reschedule its debts without disrupting the global economy, then others can do the same.
2. If Abu Dhabi takes a tough line and doesn’t destabilize markets, others (e.g., the EU) will be tempted to do the same (i.e., for Ireland and Greece). “No more unconditional bailouts” is an appealing refrain in many capitals.
3. If the US supports some creditor losses for Dubai (e.g., because of its connections with Iran), this makes it easier to impose losses on creditors elsewhere (even perhaps where IMF programs are in place, such as Eastern Europe).I´m not sure I follow this reasoning at all. Nor do I understand why Mr. Johnson seems to think this adds up to strengthening Ben Bernanke´s hand…..
Let´s see. Is Mr. Johnson saying that if picking and choosing whom to rescue is OK for an Arab sheikh, it should be good enough for Ben Bernanke?
Frankly, that sounds less like an explanation and more like advance PR for the Fed to engage in arbitrary treatment - bailouts - of banks and other companies..
[Update: And lo, it turns out that Ben Bernanke does need all the help he can get. He wants his power, dammit...see this oped at the Washington Post, hat tip to EconomicPolicyJournal]
A more convincing explanation of the Irish reaction than Johnson´s is Irish exposure via investment and employment to the Dubai economy.
“The Emirate was a Mecca for the Irish glitterati during the Celtic Tiger years, with many would-be investors taking a gamble. Ireland captain O’Driscoll bought an apartment in the e389million Tiara Residence in 2006 off the plans. However, the property may now be worth much less than the €500,000 he paid for it.
But thousands of Irish investors are facing the prospect of their Dubai prop-erties plunging in price. Price drops in Dubai have been severe. According to Knight Frank Global House Price Survey, prices dropped by 40%.
It’s all a long way from the glittering heights of the middle of the decade - and from the 1980s, before the ruling Al-Maktoum family decided to turn their dusty emirates into a leading city.
The Irish have shaped the landscape of Dubai like few other nationalities, with Irish builders, engineers and architects prominent in building up the city state.
But now, question marks hang over the fate of hundreds of Irish who escaped the slump at home for jobs with companies under Dubai’s control.”
More here.
Henry Hazlitt On Keynesian Economics
“The bad economist sees only what immediately strikes the eye; the good economist also looks beyond. The bad economist sees only the direct consequences of a proposed course; the good economist looks also at the longer and indirect consequences. The bad economist sees only what the effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups.
The distinction may seem obvious. The precaution of looking for all the consequences of a given policy to everyone may seem elementary. Doesn’t everybody know, in his personal life, that there are all sorts of indulgences delightful at the moment but disastrous in the end? Doesn’t every little boy know that if he eats enough candy he will get sick? Doesn’t the fellow who gets drunk know that he will wake up next morning with a ghastly stomach and a horrible head? Doesn’t the dipsomaniac know that he is ruining his liver and shortening his life? Doesn’t the Don Juan know that he is letting himself in for every sort of risk, from blackmail to disease? Finally, to bring it to the economic though still personal realm, do not the idler and the spendthrift know, even in the midst of their glorious fling, that they are heading for a future of debt and poverty?
Yet when we enter the field of public economics, these elementary truths are ignored. There are men regarded today as brilliant economists, who deprecate saving and recommend squandering on a national scale as the way of economic salvation; and when anyone points to what the consequences of these policies will be in the long run, they reply flippantly, as might the prodigal son of a warning father: “In the long run we are all dead.” And such shallow wisecracks pass as devastating epigrams and the ripest wisdom.”
– Henry Hazlitt. Economic In One Lesson
John Olagues on Naked Short Selling
John Olagues, the options market-maker who first analyzed the collapse of Bear Stearns and Lehman as the result of a concerted attack, has a new piece at Investopedia criticizing the ¨naked short selling¨critics:
Naked short selling is often in the news today, and is criticized by journalists and other pundits who claim that naked short sellers allied with “rumor mongers” caused the collapse of Bear Stearns and Lehman Brothers. They cite the large “failure to deliver” for a stock as evidence of naked short sales days after the stock had dropped. Although the naked short sales happened after the collapse event, they still hold onto the idea that those after-the-event naked short sales caused the collapses. (To learn more, see Case Study: The Collapse Of Lehman Brothers.)
In my opinion, those who believe that naked short sales caused the collapse of Bear Stearns and Lehman Brothers are misdirecting the attention from the illegal inside traders and their allied manipulators.
The large volumes of “fail to deliver” stock and the naked short sales after the collapses of Bear Stearns and Lehman Brothers leads me to believe there is an explanation for those large volumes. However, that strategy did not cause the collapse of those companies. (For more, check out our Short Selling Tutorial.)
The Bottom Line
Selling short can be done in a myriad of ways. And, although naked short selling is often given a bad reputation in the media because it is frequently abused, it is not as nefarious as its critics suggest.
My Comment:
I´ve gone back and forth about this with Olagues, as well as with the most prominent figure in the naked short-selling campaign, Patrick Byrne…and it occurs to me that a lot of the problem lies in language - as is the case in other areas of political debate too.
Distinguishing between naked shortselling and other forms of shortselling where the shares fail to deliver seems to the source of the problem. NSS should include within it all forms of shortselling that do not cost the seller.
When the seller does not pay the actual price for his transaction, his activity is no longer adding information to the market. There is no price discovery, because the cost of the shortselling has been arbitrarily shifted elsewhere and in fact miscues the market. So what market-makers do in the course of their legitimate activities and also when they´re trying to exploit their position for their own benefit would come under the NSS rubric..
Aside:
I would go on..but I have had computer problems for the past two weeks…the keys type whatever they want to …I cant use the apostrophe, the parentheses have vanished, and when I type a dash, out comes an equals sign….which is why I keep using dots..and there are no contractions.Fall-Out from Dubai World (Update)
I´ll try rounding up the reaction in the market and the punditry to Dubai World´s threat of default.
Two clarifications.
First: Dubai World´s problem is being referred to as a sovereign debt problem, but as far as I can understand, it´s not. The Dubai government is the 100% owner of Dubai World, which is itself a holding company. But, as William Buiter points out in the Financial Times, the Dubai government has only limited liability, just like any other limited liability company.
It wouldn´t have to reach into its pockets to make good any obligation unmet by Dubai World or its subsidiary Nakheel.
Second. The debt crisis is being referred to as a Black Swan. Again, this is inaccurate. A black swan is an unexpected event that doesn´t fit (and in fact upends) the prevailing paradigm. This debt crisis has been on the horizon for a while. And the announcement of the standstill in payment was obviously calculated to roil the markets as little as possible - being made during the Thanksgiving holidays, when the market is partially shut, and also at the start of Eid which lasts until December 6.
Update: With those caveats, I was going to try and list the banks and sectors that might be affected…but I found that Bob Wenzel´s site had already got a chart of Dubai World´s obligations to Nakheel Holdings from Izabella Kaminska at the Financial Times. You definitely need your coffee before you read this one.
However, the text below the chart, although just as abstruse, does make it clear that investors are not going to be able to get any blood out of the Dubai government.
“Investors should note, however, that the Government of Dubai does not guarantee any indebtedness or any other liability of Dubai World.”
Update: I should add here that while technically the government of Dubai is not responsible for the debt, it is implied everywhere that the safety of the debt derives from its backstopping by the government. The reaction of furious investors that Dubai would never be able to raise a penny again implies that default would taint the government and not simply the company.
Global Warming Crusade Hits Indigenous People
From Lew Rockwell:
“Survival Director Stephen Corry said today, ‘This report highlights ‘the most inconvenient truth of all’ – that the world’s tribal people, who have done the least to cause climate change and are most affected by it, are now having their rights violated and land devastated in the name of attempts to stop it. Hiding behind the global push to prevent climate change, governments and companies are mounting a massive land grab. As usual, where money and vast profits are at stake, the world’s indigenous people are being shamefully swept aside.’
Dubai Govt. Unable to Pay Debt
“The government of Dubai is in major financial trouble.
The government late Wednesday said it would restructure Dubai World and announced a six-month “standstill” on repayments of the state-run wide-ranging conglomerate’s debt.
Government-owned Dubai World is a conglomerate with interests in real estate, ports and the leisure industry. The firm carries around $60 billion in liabilities. Credit agencies Moody’s Investors Service and Standard & Poor’s downgraded the debt of a range of government-related firms, including DP World, after the restructuring announcement.
The dollar amounts involved with Dubai are relatively small in this tranche (compared to the real estate debacle0, but this continues to indicate the shortage of dollars to support the current capital structure.
As one would expect, markets are reacting negatively. International stock markets are down across the board. The dollar is climbing.”
More at The Telegraph.
My Comment
We´ve been watching this story since we first read it via Peter Cooper, who has some other insightful comments on his blog, Arabian Money.net.
“The Private Equity World Middle East 2009 conference this week attracted a good crowd and many sponsors. However, the gloom and despondency among delegates and speakers is tangible. Why are these canny business operators so depressed?
Basically they do not believe in the recovery and see a double-dip in the global economy as stimulus packages are withdrawn. The current uptick has left businesses too highly priced and their owners overconfident in the opinion of private equity firms.”
Cooper has also noted that gold sales in Dubai have crashed, although with the increase in general investor interest, he thinks this won´t have a major impact on the world gold market. Cooper also thinks the China boom is driven mostly by government stimulus money and is very vulnerable to a collapse.
His opinion comes with regional expertise behind it, while mine is simply based on my sense that the 2008 crash was only a preview of coming attractions…but still, I´m wary of the move in gold. My sense is that speculative money is pushing up the price and it could go down fast short-term. Long-term fundamentals remain good, of course.
Now, this is Thanksgiving and trading is thinner that usual, so market fluctuations do get amplified. Also, the move down in gold shouldn´t be taken out of context. It´s only to be expected, given its strong performance recently. But nonetheless, the strengthening of the dollar and the sell-off in the markets is significant.
Also significant is the fact that the Dubai government made the announcement after the local stock market had closed and on the eve of the Eid holiday that runs upto December 6.
Here are the numbers:
[(Note: the Asian markets sold off on Thursday, the other figures are opening figures in Europe and America.]
Update: there was some recovery in the markets by the close of Friday.
[Note also: First set of figures is from AP, Friday, November 27, 5:34 AM.]
Figures in brackets are from IBNLive.
Japanese Nikkei 225 down 3.2% (2.28%)
Australia down 2.9%
Shanghai down 2.4% (1.82%)
(India´s Sensex down 2.67%, Nifty down 2.8%)
Hang Seng (Hong Kong) down 4.8% (3.45%)
Kospi in S. Korea down 4.7% (4.01%)
Europe, down over 3% on Thursday, slid further:
FTSE 100 (UK) (down 3.2% on Thursday) 0.3%
DAX (Germ) (down 3.25% on Thursday) 0.4%
CAC-40 (France) (down 3.4% on Thursday) 0.6%
The Canadia market (TSX) dropped over 200 points.
On Wall Street, the Dow is down this morning by 2% and the S&P by 2.5%
Oil down by $4.17 to $73. 79 a barrel in Europe ($72.39 in Asia).
The dollar climbed back up from a 14 yr low of 84.81 yen to 86.33 and moved above parity to the Swissie.
Gold fell from a high above $1192 on Thursday to as low as $1136 (a move of $52 $56, which isn´t that big a deal for it, but nonetheless could be an indication of future downside volatility)
Looks like in a market sell-off, as before, the dollar gains..
This is why price-chasing is a danger.
Lysander Spooner on the Housing Bust
Lysander Spooner (”Poverty: Its illegal Causes and Legal Cures”):
“The principle, that a debt is obligatory only to the extent of the debtor’s means when the debt becomes due, would nearly, if not wholly, put an end to a class of contracts, that are immoral and fraudulent, in intent, if not in law, on the part of the creditors, and which ought never to be enforced against debtors. These contracts are of this kind. An old and experienced man takes advantage of the inexperience and the sanguine anticipations of a young man, to sell him property at enormous prices, giving him credit for the whole, or a part, but well knowing, from his own superior judgment and experience, that the young man will not at all realize his anticipations, or even realize enough from the property to cancel his liability. But he sells the property to him on the calculation that the latter will be able to pay at least the real value of the property; and that, as for the balance, he is a young man, he will be able to work it out; or his friends will pay it for him; or the possession of this property will enable him to get credit of others, and thus he will be enabled to pay this debt by throwing an equivalent amount of loss upon somebody else. Such contracts are plainly immoral and fraudulent, on the part of the creditor, both towards the debtor, and towards others*2-although their immorality and fraud are of a character not susceptible of being legally proved and defeated in particular cases. The only way of defeating them seems to be, to adopt the principle that no contract is binding beyond the limits of the debtor’s means.”
Royal Canadian Mint Gold Mystery Solved?
Accounting for missing gold at the Royal Canadian Mint:
“Mint officials double-counted some gold bullion they sold, and also underestimated the shrinkage of the gold during processing.
The federal government had withheld bonuses for mint executives until the mystery was solved. It’s unclear whether those bonuses will still be paid out.
Junior Transport Minister Rob Merrifield, who’s responsible for the mint, called in the RCMP on June 9 after he learned that an audit would not “rectify the problem” of the missing gold. That’s about 10 weeks after the government first learned of the missiing gold.”
CTV.
Book Business Takes Another Hit..from Walmart
“The giant retailer’s shot-across-the-bow – offering the top ten best-sellers for $10 — came just in time to devastate book stores during the holiday shopping season. Stores of every size will be vulnerable — from independents who have been savvy enough to survive competition from Amazon, to the largest vendors, including Borders, Barnes & Noble, Target, and even Amazon itself. No seller will make money at that price, not even publishers, but that is of little concern to Wal-Mart, which seeks only to demonstrate in as brutal a manner as possible that it will not be undersold. Nor can independent booksellers simply buy copies from Wal-Mart to resell, since $10 best sellers are being limited to just a few copies per buyer. The predictable result six to twelve months down the road is that many book stores both big and small will be closing, adding hugely to a retail vacancy rate that is already approaching depressionary levels.
Wal-Mart is all good cheer in promoting its everyday values, but there is no longer any denying that its primary goal is to drive all of its competitors into the ground. This strategy will no doubt be abetted by Chinese manufacturers eager to unload goods into a weak U.S. market at any cost. When Wal-Mart eventually succeeds at it, we can be certain that “everyday low prices” will be superseded in practice by prices reflecting whatever the traffic will bear. Wal-Mart has the reach, the naked ambition and the pricing power to bankrupt nearly any competitor in any business, from consumer electronics, to Halloween costumes, to funeral services, to pharmaceuticals, to lawn furniture. A decade ago, a grassroots movement to hold the line against Wal-Mart’s relentless expansion died after the retailer won some local skirmishes. Now the company is too big to oppose, a vital appendage of nearly every town in which it operates. America has paid a huge price for those everyday values.”
Speculation Drives Metal Prices
Geologist Brent Cook at Mineweb explores the speculative frenzy behind metal prices:
“Now I do not know if Paul’s [Van Eeden] thesis on gold is accurate or not: if it is it could still take many years to play out. Likewise, I do not know how or when the base metal prices will re-equilibrate to the reality of end demand-whatever that is. What is obvious is that gold and now base metals have become speculative investments that in addition to being bought as hedges against inflation and a falling US dollar are the latest get rich quick scheme. The end result is that absent the faith that metals and markets are all headed higher, we here at Exploration Insights are finding it difficult, although not impossible, to find value in junior mining and exploration companies.
Hot money on the other hand is not.
Over the past few months we have witnessed bought-deal equity financings for individual mid- to junior tier gold companies in the 10’s to 100’s of million dollars. These are being bought at nearly the absolute 52-week highs by funds that I know have not looked into the mining, metallurgical, social or political intricacies that make or break a mine. This fearless hot money jumping into the sector worries me. It always precedes a market bubble and correction: sometimes serious, sometimes temporary- sometimes by weeks, sometimes by years.
Adding to the absence of fear and proper due diligence in the market, my recent discussions with corporate financiers confirm that both large and mid-sized gold companies are being offered substantial unsolicited bought-deal financings-no questions asked. At the same time, some of the very same companies being offered the quick money are being hit with heavy selling when a fund manager becomes “concerned” because there has been no news for a couple of weeks or gold backed off $15.
Hand in hand with heavy fund demand for new metals investment ideas most of the major research firms have increased their commodity price assumptions to reflect the “new reality”. The primary advantage afforded by the commodity price revisions is that previously overvalued mining companies can instantly become “Buys”. Recall that the last major upward revisions from many of these same research firms came as the new reality of higher prices set in 2008.
The problem is that greed is driving the market and so any small hiccup or change in sentiment and the hot money tends to bolt. As last year taught us (remember last year?) when the fast money going in is the liquidity, there ain’t no liquidity getting out.
I remain cautious and somewhat concerned by what appears to be hot and fickle money jumping into a sector that is apparently taking its cue from pig farmers”.
Monbiot On the Real Global Warming Conspiracy
From George Monbiot, the real global warming conspiracy revealed:
“The capture of George W. Bush, a late convert to the cause of Communist World Government, was made possible only by the threatened release of footage filmed by a knight at Yale, showing the future president engaged in coitus with a Ford Mustang. Most ostensibly-capitalist governments remain apprised of where their real interests lie, though I note with disappointment that we have so far failed to eliminate Vaclav Klaus. Through the offices of compliant states, the Master’s third grand law has been accepted: world government will be established under the guise of controlling manmade emissions of greenhouse gases.
Keeping the scientific community in line remains a challenge. The national academies are becoming ever more querulous and greedy, and require higher pay-offs each year. The inexplicable events of the past month, in which the windows of all the leading scientific institutions were broken and a horse’s head turned up in James Hansen’s bed, appear to have staved off the immediate crisis, but for how much longer can we maintain the consensus?
Knights Carbonic, now that the hour of our triumph is at hand, I urge you all to redouble your efforts. In the name of the Master, go forth and terrify.
Professor Ernst Kattweizel, University of Redcar. 21st Grand Warden of the Temple of the Knights Carbonic.”
My Comment:
That´s from prominent environmentalist George Monbiot. I hope the emails were the work of a whistle-blower, as I think that will make the evidence that much harder to dismiss. But, even if they were, it´s quite easy for the global warming advocates to spin this whole business.
Leaked Emails May Be Whistle-Blower´s Work
“One theory says that a malicious hacker slipped into East Anglia’s network and snatched thousands of documents. Another says that the files had already been assembled in response to a Freedom of Information request and, immediately after it was denied, a whistleblower decided to disclose them. (Lending credence to that theory is the fact that no personal e-mail messages unrelated to climate change appear to have been leaked.)”
Here´s hoping….
Secy of IMF - Siddharth Tiwari
On November 21 an Indian was named Secretary of the IMF, according to Press Trust of India:
“With a proven track record in managing complex work programmes, Indian economist Siddharth Tiwari has been named as the Secretary of the IMF by its Managing Director Dominique Strauss-Kahn.
Tiwari, currently Director of the Office of Budget and Planning, is set to assume the position, which was held by Shailendra Anjaria before his retirement from the IMF earlier this year.
“Mr Tiwari has the experience and skills” to promote consensus building, which is a critical goal of the IMF Board and Management, Strauss-Kahn said in a statement.”
Sen, Rothschild Back Obama’s New New Deal
Prominent development economist Amartya Sen (formerly of Cambridge, now at Harvard) attended President Obama´s state dinner in honor of Manmohan Singh, with third wife, Emma Rothschild (of the banking family of the Rothschilds).
Sen is best known for offering a Human Development index as a counterpoint to the World Bank´s GDP calculations. Once considered fluffy, the index is now increasingly influential. Here´s a profile of Sen in 2001 from the socialist UK paper Guardian :
“Richard Jolly, while being an enormous admirer, says: “On the issue of liberalisation and the opening up of economies, Amartya has been rather mainstream. He hasn’t raised very deep questions about the whole process and of globalisation in general….
.…TN Srinavasan, economics professor at Yale and a long-time colleague, says: “Many of us were trained in the 50s to believe that states should be active in planning the economy. Sen did not give up that idea until later than some others. He still hasn’t added his voice to the call for more privatisation of the Indian economy and the removal of the old Gandhian protection of small-scale producers.”
…He [Sen] supports the “themes” raised by anti-capitalist and environmental protesters at Seattle, Prague and Davos, but not their “theses”, which he finds too simple. He says the problem is not free trade, but the inequality of global power. He strongly welcomes the rise of the NGO movement, which combines with media coverage to produce the beginning of some “countervailing power” to the larger corporations and the traditional policies of first world governments.
But he also attaches blame to many third-world governments for not undertaking domestic reform. He argues that the United Nations has to be saved from insolvency and given a greater leadership role [my emphasis] which escapes from the asymmetry caused by the veto power of the five richest and/or largest countries. “There needs to be a watchdog institution which is concerned with inequality and fair trade, asks why the USA and Europe are so restrictive to products from the third world, and raises questions about the pricing policy of the drug companies,” he says.
For the past 10 years, Sen has been married to the economic historian, Emma Rothschild, an expert on Adam Smith and Fellow of King’s…”
Rothschild, for her part, looks for a new deal that will go beyond cap-and-trade and transform the automotive industry, the urban landscape, and public transportation,according to this piece in the New York Review of
Books:“A new deal in which the bailout of the automobile industry was one component of a program of investment in the transformation of the auto-industrial society would connect economic, environmental, and energy policies. It would be a commitment to current as well as capital expenditures; to a Transportation Security Agency, for example, composed not only of people who search passengers in airports but of people who drive electric buses in inner cities. Like the “Economic Security” programs of the New Deal of the 1930s, a new New Deal would be an effort to change the distant future of the United States—in this case the future use of space—by government expenditure and more open regulation.[31]
Israeli National Airline a Front for Israeli Secret Police?
Jonathan Cook in Dissident Voice:
“South Africa deported an Israeli airline official last week following allegations that Israel’s secret police, the Shin Bet, had infiltrated Johannesburg international airport in an effort to gather information on South African citizens, particularly black and Muslim travellers.
The move by the South African government followed an investigation by local TV showing an undercover reporter being illegally interrogated by an official with El Al, Israel’s national carrier, in a public area of Johannesburg’s OR Tambo airport.
The programme also featured testimony from Jonathan Garb, a former El Al guard, who claimed that the airline company had been a front for the Shin Bet in South Africa for many years.
Of the footage of the undercover reporter’s questioning, he commented: “Here is a secret service operating above the law in South Africa. We pull the wool over everyone’s eyes. We do exactly what we want. The local authorities do not know what we are doing.”
Ramana Maharshi On Wearing Shoes
“Wanting to reform the world without discovering your true self is like trying to cover the whole world with leather to avoid the pain of walking on stones and thorns. It is simpler to wear shoes.”
– Ramana MaharshiHexagram 12: P’i - Stand still, Stagnation
12 - Hexagram Twelve: P’i
StagnationHeaven and Earth move away from each other.
In the ensuing void, the small invade where the great have departed.
There is no common meeting ground, so the Superior Person must fall back on his inner worth and decline the rewards offered by the inferior invaders.
Difficult trials as you hold to your course.
ANALYSIS
It is natural to assume that, if Earth above Heaven forms the hexagram for Peace and Paradise, then the opposite configuration, with Heaven over Earth would represent the antithesis of Paradise, Hell.
Not so.This hexagram is actually the Dark side of Peace, its unsavory byproduct, Stagnation.
In a time when most of our wants are provided, there is little need for the heroes, the artists, the great thinkers and innovators.As they recede into the shadows, Idleness, Apathy, and Lassitude come to the forefront.
Peace has become boring, bland, unchallenging — Stagnant.
Now our attention turns to the quick fix, the instant celebrity, the fad, the one-nighter, the current buzz.There is no room for depth.
If you are a passionate soul, you must wait for a better time to find kindred spirits. In these times, they are only curious legends, bas-relief, dead poets.
A Question for Off-Gridders
A reader asks a question about off-grid living:
“I read with abiding interest your article, “Getting off the Grid.” It
was a very nice piece. Presently, I am living in Madison, WI with my kids but I would like to lead my retired life in or near Abbottabad, Pakistan. In fact there is a nice village about 8 kilometers from there which at the end of the mountain (where it is located) it has water, electricity, and
gas. So can I rely on the city for providing me with these utilities on a continued basis or should I dig my own well and use UPS for power supplemental power supply, or maybe a gas generator or both? By the way, how much does a wind turbine cost?”
Khalid.My Comment:
I’ll post any answers I come across, but meanwhile, feel free to chip in with any advice for reader Khalid..
Yamashita’s Gold and the London Market “Fix”
Analyst Paul Mylchreest speculates on what happened to Asian gold stolen by the Japanese during World War II and secreted in the Philippines. Could it have been laundered through the London gold exchange in the 1990s? And is that what accounts for the sudden ‘take-downs’ in the gold price?
“In the light of the story of Yamashita’s Gold have another look at the chart of Gibson’s Paradox. There are actually two periods when the relationship breaks down in a major way and the gold price falls sharply when the correlation suggests that it should have risen:
BB The obvious one is in the mid/late 1990s which coincided with massive volume reported by the LBMA, the likes of which have never been seen since, even though we’ve been in a gold bull market for the last eight years and gold, as an asset, has become “investible” again in western financial markets.
BB The slightly less obvious one, but have a closer look, is 1986-1990. Now we don’t have any LBMA volume data for those years, but remember the story of Yamashita’s Gold – Ferdinand Marcos, who eyewitnesses testified had recovered enormous amounts of gold which he was holding in Manila, was DEPOSED in 1986.
If Alternative 2 is correct, and there is far more gold in existence than is generally understood, a strong
case can be made that the unusual behaviour of the gold price and the huge volumes of gold traded
through the LBMA in a major bear market for gold suggests that looted gold was being laundered through the London market - during these periods in particular and most likely others given the frequent counterintuitive movements in the gold price for more than a decade. The question for my friends at the Gold Anti-Trust Action Committee is whether the gold price suppression has been the result of covert sales of central bank gold or from the Yamashita hoard?Finally, if Alternative 2 is correct, what are the implications from an investment standpoint? If it is true
then the periodic laundering of clandestine or “black” gold into the London market has been a feature of the gold market since the end of the Second World War so going forward what’s chagned? One of the key themes of Thunder Road has been the inevitable approach of a dollar crisis (and a Sterling crisis) hence the need to own gold and silver. Alternative 2 doesn’t change the technical insolvency of the US. At the same time, nations like China and Russia are buyers of gold. My lateral thought on China is that much of the gold allegedly stolen by the Japanese is believed to come from the Middle Kingdom. Not only has China announced that it has doubled its official gold reserves, but it has started to promote the ownership of gold and silver to its people. Is China actively trying to reverse events which began more than a century ago and reclaim its gold?From a tactical perspective, if there are still quantities of clandestine gold which can be dumped into the market periodically, short-term pull backs in the price will remain a feature in the gold market but, once again, that’s no different from what we’ve been experiencing anyway. Let’s not forget, the gold price on 15 January 2009 was US$810/oz compared with US$995/oz on the day before Bear Stearns collapsed in March 2008. In the intervening 10 months, the world economy had been decimated and governments around the world, especially in the US, had spent or pledged many trillions of US dollars created out of thin air.
Counter-intuitive anybody?
A final thought is: why did the LBMA suddenly surprise everybody by starting to publish data on the volume of gold trade going through London in January 1997? If Alternative 2 is correct, was somebody high up in the LBMA suspicious about the heavy selling of bullion which was pushing the gold price down? Was it their way of letting us know? Here is an posting on the internet from 31 January 1997 from “CMAX”. The only changes I have made are to improve the English without restraining some of his (slight?) hyperbole!
“HOW HOW HOW…in this enlightened age of information, did something exist so large as loco London??
It has been hidden all this time not by government mandate…but by private enterprise. The discovery
of loco London is akin to discovery of the New World by Columbus…these are the numbers of a GOLDEN
ALTERNATIVE CURRENCY, here and NOW.”Stealing from Ordinary People…and Fawning on the Thieves
The One-handed Economist, via Goldseek.
“Mr. Krugman, the whole New York Times and the rest of the nation’s media supported Henry Paulson’s program to openly steal $750 billion from the American people and give it to Goldman Sachs. Paulson didn’t even pretend to be helping the poor. He was just stealing from the average American to benefit the rich. Also, the character of the rich has changed. The Robber Barons of the late 19th century were great, productive geniuses. They got rich by increasing production, and they made the rest of the country wealthier with them. Henry Ford made himself rich by making a car so inexpensive that the average guy could afford to buy it. But today’s rich get rich by having the government (via the central bank) manipulate stock prices up and thus bring them $billions in stock options. Socialists of yesterday, who violently hated the old rich, do not have any problem with today’s rich, who are nothing but a bunch of parasites.
Well, people, this is the world into which you were born. Your “education” has consisted of an onion of lies, and all of these lies were designed to steal your money and make you a serf of the new rich. The original government of America was set up to protect the right of property. Now the government robs from the poor and gives to the rich. All the “economists” you read in the news papers or magazines are charlatans and crackpots who tell us that the Federal Government does not have to balance its budget and that creating money out of nothing does not depreciate its value.”
My Comment
Strong, good, true words.
Don’t be fooled by anyone who tells you ordinary people “deserved” this for being stupid. Or, as Mr. Blankfein puts it, he was doing “god’s work.”
Most ordinary people were busy doing what they were supposed to be doing, while behind a smoke-screen of propaganda the predator class was conniving with various useful idiots to snooker the country.
Totalitarianism: The Total Domination of Man
From “Evil: The Crime Against Humanity,” by Jerome Kohn
The “total domination of man” was radically evil, in Arendt’s eyes, not only because it was unprecedented but because it did not make sense. She asked: Why should lust for power, which from the beginning of recorded history has been considered the political and social sin par excellence, suddenly transcend all previously known limitations of self-interest and utility and attempt not simply to dominate men as they are but to change their very nature; not only to kill whoever is in the way of further power accumulation but also innocent and harmless bystanders, and this even when such murder is an obstacle, rather than an advantage, for the accumulation of power?
(see “Ideology and Propaganda”)There is no ready answer to that question. In Hitler’s case it is well known that his unrelenting dehumanization and destruction of those who presented no threat to him hindered his ability to fight effectively against his real enemies at the end of World War II. What is the point of dominating men at any cost, not as they are but in order “to change their very nature”? If it is for the sake of “the consistency of a lying world order,” as she went on to suggest, what is the point of a system that even if it succeeded in destroying the human world would not end in the creation of a “thousand-year Reich” or “Messianic Age” but only in self-destruction? Arendt, to be sure, never thought the suicidal “victory” of totalitarianism likely. That would first require global rule by one totalitarian power, and in that regard she believed that Hitler’s invasion of Russia in 1941 was symbolically significant in spite of his pact with Stalin two years earlier and in spite of the two leaders’ mutual admiration which she emphasized. Moreover, she saw that “no system has ever been less capable [than totalitarianism] of gradually expanding its sphere of influence and holding on to its conquests.” Most important of all, because plurality is the inescapable condition of human existence–”not Man but men inhabit this planet”–Arendt increasingly came to consider farfetched the notion that a single totalitarian regime could ever destroy the entire world.”
Sauce For the Gander
From Men’s News Daily:
“Why do women and feminists seem to care more about the so-called pay-gap (which is a myth) than the female-dominated spending gap? Why do some women expect to spend most of the money that the man made?
*Why are there seemingly so many more chivalrous male feminists than female masculists [sic]?
*Why do many men treat women as “queens” when many women treat men as “worker bees”?
*Why are so many men “took to the cleaners” after a divorce? Don’t men have feelings like women do?
*How many women are willing to support a stay-at-home husband (and let him spend a large portion of her money)?
*Why do “tomboys” and “daddys girls” seem to be considered charming or cute while “mama’s boys” and “jill girls” seem to elicit images of laughing stocks that still live with their parents and are too “unmanly” or “lazy” to deserve a girlfriend?”
My Comment:
Obviously, I post this somewhat tongue-in-cheek. Women do experience discrimination and difficulties in certain areas of the work-place, beyond what might be expected by an equally skilled male.
And while it’s true that men, more than women, are expected to perform in the workplace…it’s also true that women, more than men, are expected to perform outside the workplace - in the family. The author forgets the expectations placed on women in the area of physical looks….and housework (for most of the world, at any rate)…in maintaining the family and its relationships..
Climate-Gate: Whistleblower Data Sets Blogosphere on Fire (Wiki/Updates/Corrections)
Note wiki manipulation below
Note also: I have changed the heading of this post from Climate-Gate: Hacked emails set blogosphere on fire (my early and mistaken impression of the story) to Climate- Gate Whistleblower data sets blogosphere on fire, which I believe now to be accurate.
Updates:
http://mindbodypolitic.com/2009/12/10/climate-gate-is-the-work-of-a-whistle-blower/
http://mindbodypolitic.com/2009/12/07/danish-climate-gate/
http://mindbodypolitic.com/2009/12/07/climategate-wiki-distortion-and-censorship/
http://mindbodypolitic.com/2009/12/07/climate-gate-summary/
http://mindbodypolitic.com/2009/12/06/gordon-brown-calls-climate-skeptics-flat-earthers/
http://mindbodypolitic.com/2009/12/06/climate-gate-media-muffles-scientists-back-tracking-on-warming/
http://mindbodypolitic.com/2009/12/05/climate-voodoo-chief-jones-steps-down/
http://mindbodypolitic.com/2009/12/03/freakonomics-says-funding-drives-climate-models/
http://mindbodypolitic.com/2009/12/03/un-funds-missing-billion-plus-in-climate-change-donations/
http://mindbodypolitic.com/2009/12/02/monbiot-suggest-jones-%C2%A8guilty-as-charged-should-go/
http://mindbodypolitic.com/2009/11/30/pollution-not-global-warming-is-biggest-environmental-threat/In recent news, hackers apparently got into the prestigious Climate Research Unit (CRU) at the University of East Anglia. They found that supposedly scientific researchers were plotting to shut out dissenting editors from peer-reviewed journal boards, cook evidence, and manipulate the submission of papers, according to Climate Depot blog. The evidence runs to more than 1000 emails and 3000 documents
Correction: The evidence was culled from a trove of more than 1000 emails and 3000 documents.
The scientists include some of the best-known proponents of anthropogenic global warming (AGW) and their language is decidedly political. They nurse fantasies of beating up opponents, warn of colleagues who might be “unpredictable,” suggest deleting emails demanded by FOIA requests, and even want to cancel the decades-old dissertation of a global warming skeptic on the basis of a minor mistake. From the emails, it’s clear these are true believers, zealots, with a distinctly socialist mindset. Here’s a good round up of the details. Climateaudit.org has a detailed analysis of the most notable (so far) manipulation of data - the famous “hockey stick” graph apparently showing rising temperatures.
Now, I’m all for skepticism about climate change (AGW). But I’m also a strong advocate of privacy. This is a violation of the privacy of the researchers.
If hacking the email of political figures (Governor Sanford, or Sarah Palin) is wrong, if government monitoring of personal emails and telephone calls, or bending of banking privacy laws is wrong, so is hacking the emails of research scientists, even if what they’re doing is wrong. So, I’m not linking the emails.
Here’s Ms. Palin’s response to her hacking experience:
“I was horrified to realize that millions of people could read my personal messages, including the thoughts of a friend who had written of her heartbreak over her pending divorce,” Palin writes, adding: “What kind of responsible press outfit would broadcast stolen private correspondence?’”
Ny Comment
[Correction: I should note that there's a big moral difference between hacking personal information irrelevant, or marginally relevant, to public policy, and hacking emails that are crucial - as these are - to understanding how policy is being reached.
Morally, the two are quite different.... so perhaps I shouldn't have brought in the personal attacks on Palin and Sanford as a comparison. Still, whose property those mails are remains an issue. More below on that...]
You don’t really need to play “gotcha” to come to the right conclusions about things. Good analysis, according to studies of intelligence, beats “spy-versus-spy,” or James Bond-type games. Journalists can use public information alone to come to the right conclusion.
Should “Global warming” (AGW) skeptics of a libertarian disposition be celebrating a triumph for libertarianism in one area (economic and intellectual free markets) that sets back libertarianism in another area (privacy rights)?
I know some libertarians don’t even believe that there is a right to privacy. However, according to the Constitution, rights “not enumerated” are reserved to the people. Privacy, as I see it, is a right that “emanates” (yes, that controversial word from the Roe versus Wade debate) from our ownership of our bodies and our property.
There’s a lot of scare-mongering going on now to get us from where we are to world government.
“Global warming” has been enlisted in that effort. That’s clear enough if you study the people and institutions promoting it. I’m not sure there’s any need to stoop to data theft to know that.
As to the other pertinent point:
Can CRU be treated as a government entity?
A reader comments that the hacking was justified in this case, because government employees don’t deserve any privacy. My response (in the comment section) can be summarised as follows:
1. The University of East Anglia is not directly under the British government (so far as I know)
2. Even if it were, it would be upto a government review panel or some form of legitimate investigation to keep track of what’s going on. Vigilante hacking isn’t the best way.Still, when I went back to check whether the CRU was government-run, I found that indeed, it receives an overwhelming proportion of its funding from government agencies.
Admittedly, that makes it more justifiable to monitor its work
Here is an incomplete list of the funders:
“The European Commission of the European Union (EU) provides the largest fraction of our research income under the Environment and Climate Change Programme. Since the mid-1990s, CRU has co-ordinated 9 EU research projects and been a partner on 16 others within the 4th, 5th and 6th Framework Programmes. Although EU funding is very important, we also endeavour to maintain the diverse pattern of funding reflected by the research described in this “history of CRU” and in the list of Acknowledgements below….”
and
“British Council, British Petroleum, Broom’s Barn Sugar Beet Research Centre, Central Electricity Generating Board, Centre for Environment, Fisheries and Aquaculture Science (CEFAS), Commercial Union, Commission of European Communities (CEC, often referred to now as EU), Council for the Central Laboratory of the Research Councils (CCLRC), Department of Energy, Department of the Environment (DETR, now DEFRA), Department of Health, Department of Trade and Industry (DTI), Eastern Electricity, Engineering and Physical Sciences Research Council (EPSRC), Environment Agency, Forestry Commission, Greenpeace International, International Institute of Environmental Development (IIED), Irish Electricity Supply Board, KFA Germany, Leverhulme Trust, Ministry of Agriculture, Fisheries and Food (MAFF), National Power, National Rivers Authority, Natural Environmental Research Council (NERC), Norwich Union, Nuclear Installations Inspectorate, Overseas Development Administration (ODA), Reinsurance Underwriters and Syndicates, Royal Society, Scientific Consultants, Science and Engineering Research Council (SERC), Scottish and Northern Ireland Forum for Environmental Research, Shell, Stockholm Environment Agency, Sultanate of Oman, Tate and Lyle, UK Met. Office, UK Nirex Ltd., United Nations Environment Plan (UNEP), United States Department of Energy, United States Environmental Protection Agency, Wolfson Foundation and the World Wildlife Fund for Nature (WWF).”
Hiding Your “Assets” Off-Shore
Aha!. More vindication for arguments I made in 2004 and 2005:
“[I]ncreasingly, after years of issuing denials, Lithuania’s leaders are no longer ruling out the possibility that the CIA operated a secret prison in this northern European country of 3.5 million people, and that its government will have to deal with the fallout.
Last month, newly elected President Dalia Grybauskaite said she had “indirect suspicions” that the CIA reports might be true, and urged Parliament to investigate more thoroughly.”
Hat-tip to Glenn Greenwald for the link (http://www.salon.com/news/opinion/glenn_greenwald/).
Check out some of my articles from 2004 and 2005:
“The Torture Go-Round,” Counterpunch, December 5, 2005, (http://www.counterpunch.org/rajiva12052005.html)
“Hiding Off-shore Assets,” Dissident Voice, November 7, 2005
Note: The CIA has always called its operatives “assets,” even before the business model was actively adopted by the Agency.
(http://dissidentvoice.org/Nov05/Rajiva1107.htm)
Charles Goyette: Put 25% of Your Money Into Gold, Silver
“To combat the wealth-destroying effects of runaway inflation, Goyette recommends you put 25% of your portfolio into gold and silver, ideally physically held. He offers expert, detailed advice on how and where to buy it. Goyette’s chapter on buying gold is one of the most cohesive and useful chapters in his book. His expertise in the field shines through.
Subsequent chapters aren’t as well-defined, but do offer detailed background information on each recommended investment. The next chapter talks about silver. Chapters on investing in oil, natural resources, commodities, bonds (using a long inverse strategy), and foreign currencies follow.”
That’s from a review of libertarian media man Charles Goyette’s ”The Dollar Meltdown,” reviewed by Business Pundit, via Lew Rockwell.
Goyette’s book debuted at Number 10 on the New York Times best-sellers and has been getting rave reviews everywhere. I’ve been interviewed by Goyette a couple of times, and his views then were as unflinchingly honest as they are in this book. For those of you who’ve been asking me about gold, this might be a place to start..
China Bubble, China Trouble
Dominique Strauss-Kahn, the IMF’s Managing Director ended a 6-day trip in Asia by telling Chinese authorities to continue with their stimulus program.
“The main goal is to help with public demand, weak private demand. And the reason why we have to continue with stimulus is because a self-sustaining private demand is not yet visible,” he said.”
He also called for
1) Asian countries to rebalance their economies by becoming less export oriented and fostering internal demand
2) for the renminbi to strengthen to raise household purchasing power and labor’s share of income
Strauss-Kahn said he anticipated Asian growth of nearly 6% for next year (double the forecast for the global economy) and called for Asian leadership in the global financial crisis.
What does this mean?
Let’s start with Eclectica Fund Manager, Hugh Hendry, cited in “Outside the Box” (JohnMauldin@InvestorsInsight.com). Hendry writes:
“Now, if we repeat the Japanese experience then it is possible that nominal US GDP will rise from $14trn today to perhaps just $16trn in ten years time….. The Chinese are building capacity to meet a world where US nominal GDP is $25trn in ten years time. I fear they could be in for a nasty shock.”
That is, the IMF is banking on the remninbi strengthening so that domestic household expenditure can pick up the slack from weakening US consumer demand because there’s huge overcapacity in China.
Serendipitously, just as Strauss-Kahn and the Chinese premier Hu Jintao agreed that domestic demand has to be stimulated, along comes this Bloomberg report that quotes China International Capital Corp. as predicting that Chinese steel demand will rise 12% rather than the 5% predicted by the World Steel Association.
Now, where will the steel go? To a boom in housing construction and auto manufacture.
I blogged earlier that Jim Chanos, the dark prince of short-selling, has declared China a bubble set to burst, on the strength of these mysterious auto purchases that seem to be entirely production driven. One one hand, the government is using its dollars to manufacture cars, demand be damned. But the government has also committed to stimulate demand by social spending (on education and health) that’s intended eventually to make the Chinese loosen up…. and spend on those big-ticket items, like cars and houses.
But there’s an irony in thinking about China’s demand as affecting the commodity market. The irony, says Hendry, is that China is the commodity market.
“Huge demand and numerous small players are a perfect setup for price increases by the Big Three miners, which often cite high spot prices as the reason for jagging up contract prices. But the spot market is relatively small, and mines can easily manipulate spot prices by reducing supply. On the other hand, numerous Chinese steel mills simultaneously want to buy ore to sustain production so their governments can report higher GDP rates, even if higher GDP is money-losing. China’s steel industry is structured to hurt China’s best interests.
The Chinese government is very much wedded to it’s 8% growth target and will do whatever it takes to come close to that target – including flooding the domestic banks with a wall of cheap money to lend as economic stimulus. However, preventing a downturn with easy money is a dangerous way to reflate the economy.
As profitability for the businesses that serve the real economy remain weak, there has been of shift of investment in the first half of 2009 disproportionately into property, stock and commodity markets rather than private sector capital formation. This shift in the medium term threatens to undermine China’s financial stability. Thus, China is experiencing a relatively weak real economy and red hot asset markets.
The Chinese imports that revived the bulk carrier market this year were mostly for speculative inventories. Bank loans were so cheap and easy to get that many commodity distributors used financing for speculation……
Even more foreboding is a looming real estate bubble. The real estate sector in China is especially critical to the bulk carrier market because approximately 50% of Chinese demand for steel is generated by the construction industry. Most Western shipping forecasts are based on unlimited future need in China for new construction. The reality is quite different. China’s urban living space is 28 square meters per person, quite high by international standard. China’s urbanization is about 50%. It could rise to 70-75%. Afterwards the rural population would decline on its own due to its high average age.
So China’s urban population may rise by another 300 million people. If we assume they all can afford property (a laughable notion at today’s price), Chinese cities may need an additional 8.4 billion square meters. China’s work-in-progress is over 2 billion square meters. There is enough land out there for another 2. The construction industry has production capacity of about 1.5 billion square meters per annum. Absolute oversupply, i.e., there are not enough people for all the buildings, could happen quite soon.
…..The nationwide average price [of housing] is about three months of salary per square meter, probably the highest in the world! Consequently, a lot of properties can’t be rented out at all. Those that can bring in 3% yield, barely compensating for depreciation……
Some argue that China’s property is always like this: appreciation is the return. This is not true. The property market dropped dramatically from 1995-2001 during a strong dollar period. Property prices could drop like Japan has experienced in the past two decades, which would destroy the banking system.
Sarah, the Runner
Nice piece here about Sarah Palin, as a runner.
I’ve never been a fan of the governor. But reading this, and seeing her take all the bashing in the press, I’m a beginning to have more-than-sneaking admiration for her spunk.
Apparently photographer Nina Berman isn’t so impressed. She skips Palin’s five children and marathons in 20 below zero to rave instead over Newsweek’s recycling of a picture from the article into a not-so-subtle cheese-cake cover.
“Brilliant” she calls it, because it demeans Sarah, while giving Newsweek an out:
“The Newsweek cover is a shrewd strategic maneuver to demean Palin without having to take responsibility for it. I think it’s brilliant. They take an inelegantly, even laughably propped photo where Palin is an obvious participant as opposed to being a manipulated subject, and recontextualize it to show how far out she is willing to travel on the road of self promotion. They beat her at her own game and in the process shield themselves from what would have been the inevitable criticism if they had dolled her up themselves and posed her the same way.”
The strange moods of some feminists…
You’d think there was a surplus of women in office to treat them so cavalierly.
All we need now is some stripping down and greasing up to holler, “cat-fight!”Ladies, please.… your motivation’s showing.
Eduardo Galeano on the Nobodies
Fleas dream of buying themselves a dog, and nobodies dream of escaping poverty: that, one magical day, good luck will suddenly rain down on them - will rain down in buckets. But good luck doesn’t rain down, yesterday, today, tomorrow or ever. Good luck doesn’t even fall in a fine drizzle, no matter how hard the nobodies summon it, even if their left hand is tickling, or if they begin the new day on their right foot, or start the new year with a change of brooms. The nobodies: nobody’s children, owners of nothing. The nobodies: the no-ones, the nobodied, running like rabbits, dying through life, screwed every which way. Who are not, but could be. Who don’t speak languages, but dialects. Who don’t have religions, but superstitions. Who don’t create art, but handicrafts. Who don’t have culture, but folklore. Who are not human beings, but human resources. Who do not have faces, but arms. Who do not have names, but numbers. Who do not appear in the history of the world, but in the crime reports of the local paper. The nobodies, who are not worth the bullet that kills them.”
– Eduardo Galeano, “The Nobodies”
Blame for the Drought
“Any party which takes credit for the rain must not be surprised if its opponents blame it for the drought.”
- Dwight Morrow
Privacy Watchdog Criticizes Canadian Financial Data Gathering
In the news, privacy in Canada is on the retreat:
“In her annual report, Privacy Commissioner Jennifer Stoddart says the little-known Financial Transactions and Reports Analysis Centre of Canada must scale back its data gathering. The centre zeros in on cash linked to money laundering, terrorism and other crimes. Stoddart’s report also raises concerns about Transport Canada’s no-fly list - a controversial program she has cast a wary eye upon for years.”
One Minute Guide to the Southern Cone
So for libertarians looking for a home away from home, what would I advise after three months wandering around the southern parts of Latin American?
1. Banking secrecy is on its way out everywhere, no matter what you’re told by expensive “relocation specialists,” escribanos, and lawyers.
2. Chile and Uruguay are the least corrupt countries. Argentina and Paraguay the most. Brazil is corrupt but not to the same degree.
3. If you’re looking for cheap, Bolivia or Paraguay fit the bill; none of the others really do. You can probably live as cheaply in some parts of America if you try.
4. Chile and Brazil are the best bets for investment and business. For the rest, it’s touch and go.
5. There are strong social movements in Latin America - and a good thing too. But that means there are also squatters’ rights and very tenant protective laws.
6. Monsanto and genetically modified food are everywhere. There’s not much of an organic movement, though it’s growing. It has to contend with soil depletion, agrifunds, asbentee landlords and tenant farmers who care only about making their quick buck and moving on.
7. Brazil is the best place to invest in housing. There are few other residential markets that are all that liquid, except in yuppie neighborhoods.
8. There’s no where in the world you can get away from vainglorious speculators, idiot marketers, shady operatives, the war on terror, Wall Street agitprop, and imperial sleaze-bucketry, all beating their drums, drooling and sneering, boasting, and stealing simultaneously.
9. I give the innocent, tranquil places of Latin America 4-5 years before the vultures descend to leave their soil raped, the beaches over-built with Miami style condos, drugs, marketing hype, porn, neg am loans, and all the rest of the barbaric vulgarity of so-called advanced civilization that profits only the very wealthy.
10. The best place to call home is the place where you have friends and family. Apart from a handful of dedicated humanists and activists, only people who share your race culture or faith will support you ultimately, not partisans - this much I’ve learned in the last ten years.
Back Home..
This is the first time I’ve flown directly from Latin America to Asia, without going through London or Miami or Los Angeles. The flight was Buenos Aires direct to Singapore, and then a change of flight to Bangalore. Long, but not nearly as bad as some trips I’ve made. I’m told several airlines will be flying this route, often with a stop at Cape Town. South to South, eliminating London, New York, or Los Angeles. A sign of the times..
It’s good to be back home after several years..
Major Hasan - Terrorist or Traumatized?
From Alexander Cockburn:
“This indulgent posture towards the omens offered by Hasan’s political and psychic profile stretched from the FBI - which saw no excessive cause for alarm in his emails to the radical Imam Anwar al Awlaki, now based in Yemen, and a vocal enthusiast for jihad in its most violent forms – to his medical colleagues who in early 2008 they discussed Hasan’s indifferent performance and, in the words of an AP report, “saw no signs of mental problems, no risk factors that would predict violent behavior.” They seized on “other factors” that suggested Hasan would continue to thrive in the military.”
“Don’t ask, don’t tell”, the famous summation of the Clinton-sponsored Army posture on gays seems to have become a more general maxim , whether it concerned the phone intercepted emails to the Imam, the praise for suicide bombers, the business card announcing him cryptically to be “a soldier of Allah”, or even the Arabic bumper sticker (“Allah is love”) which got his car scored with a key by a vet fresh back from the Crusades.
Talking of “Don’t ask”, it does seem reasonably clear that somewhat akin to some members of the Hamburg cell carrying out the 9/11 attack, if Hasan was hoping – a vulgar myth, to be sure - for the reward of virgins in the aftermath of martyrdom, their sex might have been an issue. No girlfriend; local virgins not pious enough for marriage; fainted while watching childbirth during medical training; at Walter Reed would not allow his photo to be taken with female co-workers; killed a pregnant woman in his lethal rampage (her dead embryo may constitute the fourteenth charge of homicide in the string for which he faces the death penalty); mentored 18-year old Duane Reasoner, a convert to Islam he met at the local mosque and with whom he seems to have cemented ties of loyalty and affection. Reasoner, who was with Hasan at his apartment not long before the major’s lethal excursion, declines to condemn him, saying fiercely in his BBC interview that Hasan’s victims “were troops who were going to Afghanistan and Iraq to kill Muslims.”
It’s the rationale most respectful to Hasan. No kook he, but indeed a Soldier of Allah. Of course, amid the thunderings of the Right about the army’s hospitality to a gay Palestinian terrorist General Casey retreats into the well-mannered sanctuary of “diversity”, even if there are no doubt enlisted men in Afghanistan saying right now , “No Muslims in my foxhole.” In Fort Hood the war came home with a vengeance, as it has been doing there at regular intervals with the suicides and savage domestic violence of vets driven crazy by what they’ve done in the service of Empire.”
My Comment:
The psychological profile is again oddly similar to the profile of Virginia Tech shooter, Cho. But aside from that, why does the army invite this sort of thing? If you’re planning to launch a global war on Muslim majority countries, you’d think common sense would tell that it might not be best to hire Muslims to prosecute it.
What Creates Jobs?
I was reading through Ellen Brown’s “Web of Debt” site, which I first discovered when I saw that she - like me - had been the target of a rant by the same individual.
I like a lot of what Ellen is doing. I’m in favor of networks of individuals forming credit pools for investment or to create businesses. That already exists at higher economic levels - Angel Investing, for instance. And at the lower level there are organizations like the Grameen Bank. Or versions thereof, like Grama Vidiyal, Opportunity International, Islamic banking, and others mentioned in this piece.
[Note: Grameen Bank has come in for criticism on a number of grounds.]
Browsing through the comments on the site, you realize that many people sense there’s something fundamentally wrong with the system.
Which there is.
And that they sense that language has been taken out of our mouths and used for propaganda.
Which it has.
But after that initial perception, the logic sometimes falls apart….
Here’s one comment, broken down line by line, with my response in brackets.
Comment:
“Just because everyone believes rich people create jobs, doesn’t make it true.”
LR:
1. False.
Rich is a relative term. American working class people are much richer than people sleeping on roads and railway stations in Asia. When an American (even a working class American) goes to a poor country and sets up a business, he does create jobs. He is rich relatively speaking and his capital (such as it is) enables him to start a business. In that sense, riches (rather than rich people) can indeed create jobs.
Of course, they need not. Riches can also stagnate uneconomically if they’re not deployed correctly.2. False
Everyone doesn’t believe rich people create jobs. A much larger group of people world-over believes that the government creates jobs. That’s why governments everywhere are tasked with that function - which is unfortunate, because they don’t do it very successfully, usually.
What’s the only truth in the comment then? The statement that because every one believes something, that doesn’t make it true.
But the problem is that this truism should be applied not to the “rich people don’t create jobs” assertion, but to the much more common assumption behind the assertion - the assumption that the government creates jobs.
Comment: “Rich people don’t create jobs. Rich people can’t create jobs.”
LR:
1. The first part of this is a half-truth.
Rich people may (or may not) create jobs. It depends on their entrepreneurial ability.
The second part is just false. Rich people can and do create jobs.
Comment:
“Only DEMAND creates jobs. No demand = no production, period. Only demand can create and does create jobs.”
LR:
1. This would be hilarious if it weren’t so sad. Demand creates jobs? Obviously, the writer’s never been anywhere where there’s demand all year round for things that can’t be found on the shelves of the stores. There’s plenty of demand, but where is the production?
2. The existence of demand is not necessary to genuine economic activity, but it’s sufficient to create it. You can, on the contrary, have production without demand (for instance, state-mandated production in China). This is entirely wasteful and a dislocation, but it exists. And it exists because China has money..riches…not because it has people (Africa has people too).
Comment:
“Which means, as any rational person can see with a moment’s thought, that it is the people who create their own jobs. We create our own jobs.”
LR:
1. Another half-truth. People…some people… create jobs.
People with access to money, entrepreneurial ability, and supported by structures that defend economic activity and ownership. Without all that, production declines.
2. Half-truth again. “We” is used to invoke emotion - populist emotion. But the populism obviously excludes “rich people.”
Whom does “we” represent then? Isn’t it the people who are “have-nots” - i.e. lack money, or credit, or skills? If so, aren’t these just the people who do not create jobs, emotional appeals notwithstanding?
Comment:
“Fight the fog.”
Lila: Indeed. Starting at home.
Comment:
“Fact: capital formation is highest in the most egalitarian countries.”
Lila:
Not true. Capital formation is high in China (as high as 50% according to this report in 2007)* and India (savings rate of about 25-30%, with 29.2% in 2004-5 ). Both are highly unequal societies (India more so than China) where households save a far greater percentage of their income than in America (about 2%).
Correction: the numbers above were rough averages computed from over the last several years. To be more specific, the US savings rate rose to 6.9% in May 2009 to from zero in April 2008 and less than 1% in 2005 (negative 0.5%), 2006, and 2007.
Other studies also measure the Chinese savings rate differently and return a figure of around 22% for the 2000-2004 period. and 30% in 2006.
America is also unequal - though less so - but it has a much lower rate of capital formation.
This isn’t an endorsement of inequality. It’s merely a recitation of the facts.
Comment:
“We do not have to give away our money to wealthpower giants, to make it work for commerce.”
Lila:
I presume what the person is trying to say is that you don’t have to keep your money in banks owned by the banking conglomerates in order for business to flourish.
That’s perfectly true. Solution: don’t keep your money in the banks.
Keep it in the form of businesses, or farms, or bullion in vaults, or in guns, or in commodities or whatever else will retain some value during a time of universal monetary debasement.
But when you do that you are, by definition, a rich person (i.e. an asset-owning person). And it’s your riches - husbanded - that will create jobs.
Will Rogers On The Great Depression
It’s almost worth the Great Depression to learn how little our big men know.”
- Will Rogers14 Named in Galleon Insider Trading Case
On November 5, 2009, 14 more money managers and lawyers were named in the Galleon Insider Trading case:
1.STEVEN FORTUNA, formerly a Managing Director of S2 Capital LLC (”S2 Capital”), a hedge fund based in Boston, Massachusetts
2. ALI FAR, founder of Spherix Capital LLC (”Spherix”), a hedge fund based in California
3. RICHARD CHOO-BENG LEE, former President of Spherix
4. ROOMY KHAN, a California trader who served at certain times as a paid consultant to a hedge fund based in New York, New York and
5. GAUTHAM SHANKAR, a proprietary trader at Schottenfeld in New York, New York.
6. ZVI GOFFER (pictured here), who formerly worked at The Schottenfeld Group LLC (”Schottenfeld”), a broker dealer in New York, New York, and currently operates a trading firm called Incremental Capital (”Incremental”), in New York, New York
7. ARTHUR CUTILLO, an attorney at the law firm of Ropes & Gray LLP in New York, New York
8. JASON GOLDFARB, an attorney in New York, New York
9. CRAIG DRIMAL, who worked in the offices of the Galleon Group in New York, New York, but is not employed by Galleon
10. EMANUEL GOFFER, who formerly worked at Spectrum Trading LLC, a trading firm in New York, New York, and currently is associated with Incremental in New York, New York
11. MICHAEL KIMELMAN, currently associated with Incremental in New York, New York
12. DAVID PLATE, formerly employed by Schottenfeld, and currently associated with Incremental in New York, New York and
13. ALI HARIRI, a Vice President of Atheros Communications, Inc. (”Atheros”) in California
14. DEEP SHAH, who was formerly employed by Moody’s Investors Service, Inc. (”Moody’s”), in New York, New York, remains at large.
My Comment:
Glee at anyone’s misfortune, however deserved, is unseemly. But can I indulge in a little satisfaction that at least once the high and the mighty didn’t get away with it.
A second note. Khans, Shankars, Shahs. Never let it be said that Asians cannot steal with the best of them. And if this is what’s being dredged up from the capital markets in New York, I’d just love to know what’s going on in Mumbai, Shanghai, and the rest of the globe…
The Collectivist “Private” Sector
From Hell Survivor’s Reality Check:
“Collectivizing investments into Wall Street maximizes fees, involves vast geographical distances, minimizes transparency, operates in an asymmetric knowledge market that always favors the insiders, the sophisticated investors, and maximizes opportunities for corruption.
German emphasis on local and regional investments minimizes these negative elements. Re-injecting the money back into the economy aggravates the already intensely collectivized private sector of the U.S. economy in the form of chain fast food outlets, chain restaurants, chain hotels, chain stores in sharp contrast to the German economy which still maintains highly attractive family owned restaurants and family owned hotels. It is not surprising that Wal-Mart has become, in the last 20 years, the largest corporation. It tried to export its disease to Germany but was rebuffed.
It must be understood that in sharp contrast to popular myths, the private sector of the U.S. economy is, in fact, intensely collectivistic/socialistic. A parasitic cost shifting pulsates intensely throughout the U.S. economy far more than in Germany. It is exemplified in the broadcasting industry and even in free restrooms. Rush Limbaugh’s 50 million annual income causes the products of his corporate sponsors to rise and the cost to be passed on to those not in the market, those who receive no benefit, who had no choice and who have no transparency.”
Trader Psych: Brent Steenbarger: Getting On Tilt
“Tilt” is frustrated, reactive behavior that sends a rush of blood to activate our instinctual behavior - fueling “flight or fight” response (fear/anger). Symptoms of “on tilt” behavior include over-trading, continually increasing position sizes, inability to understand why you made certain trades when you look back. Since we want the logical, rational parts of our mind to be in charge instead, here’s a quick summary of trading psychologist Brent Steenbarger’s remedies for “on tilt” behavior:
1. Focus on breathing slowly and on body movements that center and connect the mind and body (such as moving hands up and down in front of you).
2. Focus on process, not on outcome or expectation. Focus on making each trade a good one and on being a good trader, not on the money.
3. Build up “self-efficacy” (confidence in yourself as a person who can reach your goals) by not reacting to the market, but being proactiveFort Hood’s Real Hero Overlooked
In the news, myth making at the Fort Hood shootings:
“Though the official version of events won’t be available until the military releases the results of its investigation, Todd told the New York Times in an interview Thursday that it was indeed he who fired the shots that brought down Hasan. He said that he and Munley both pulled up to the scene at the same time and, after receiving fire from Hasan when they ordered him to drop his weapon, each broke in different directions. After aborting an attempt to circle the building, Todd said he headed back to the front of the building where he saw Munley wounded on the ground. He said that he then ordered Hasan to drop his weapon a second time, which again prompted the gunman to fire upon him. It was at this point that Todd told the Times that he “neutralized him and secured him.”
In the aftermath of the week-long confusion over who brought down Hasan, some are not holding back in criticizing the media and the military for their roles in the chaos — the media for not not digging deeper and thus performing their jobs properly, and the military for being too secretive. Some have even questioned whether or not there might have been a racial component involved with crediting a white woman over a black man as the day’s hero.”
My Comment:
“Might have been”?
Ah.
No one usually would intentionally write out the role of a heroic black man to give it to a white woman. Probably not. But unintentionally they often do. That’s a form of unconscious racism that becomes institutional, to use the in-vogue word.
People “just assume” that it wasn’t the black man who did it…..if they even saw him as a subject… and not just background.
This isn’t exaggeration. It’s the way the contributions of most people in the world is appropriated.
We just assume that non-white people do menial things in between tribal wars, and that the heroic, the creative, the original, the value-producing things are done by non-tribal whites.
We assume this not because we’re racists but because empire blinds us.
Having your thumb on the scales to fix the game so that you always come out the winner tends to make you swallow your own mythology and believe that you really are always the winner. Which on its face is absurd, since intelligence and creativity are found much more widely distributed.Again, it’s not intentional racism. It’s the underlying arrogance of empire. It’s the distortion in morality produced by the distortion in markets. Which is ultimately caused by the state.
Lao Tzu On Libertarian Living
Knowing others is wisdom;
Knowing the self is enlightenment.
Mastering others requires force;
Mastering the self needs strength.See simplicity in the complicated,
Achieve greatness in little things.Lao-Tzu
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