Who do you want to spend your money? A woman who needs $150,000 in make overs and travel expenses or a guy who makes a pair of shoes go the distance (and into the White House)?
In case you McCain people wondered, this is what it means to walk the walk.
In February of 2000 Hank Paulson, then CEO of Goldman Sachs, testified to the Senate Banking committee requesting that they reduce restrictions on the financial services industry, allowing investment banks like Goldman Sachs, Morgan Stanley, Merill Lynch, Bear Stearns, and Lehman Brothers, to leverage themselves upward of 20 to 1 — to risk more than 20 times what they could bare to lose.
The request went denied then in 2000 by a regulating body still containing many members appointed by Clinton but was approved only four years later by the regulating body installed with the Bush administration.
Now, Secretary of Treasury Hank Paulson, a Bush appointee himself, asks the American people to pay for the results of those misguided and destructive business decisions and the ineptitude of officials, who realized too late the danger approval posed.
America confused, bewildered and driven by fear, agrees begrudingly to a 700 billion dollar bailout plan for financial institutions — the death of Socrates all over again.
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If I told you these circumstances were all that were neccessary to undo the great promise of America, you would likely have doubts. You, stubborn and loving of America, would with all that you were say “No. America is greater than that.” But my friends, there can be no doubt now, that we have traded all we once were away — we have become all we had ever hoped to avoid: Rooted in corruption; heartless and descrimitive; deluded beyond perhaps all sense of hope for a future.
We have given the Doctor Frankenstein’s of this particular American monster absolution. Whats more we have placed them back in control of the laboratory to further ruin the great experiment that is the American dream.
They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety; Benjamin Franklin saw the soul of America and understood its fragility — our most recent actions will serve to prove him right. It is not what we have bought with these banks full of debt, but instead what we have had to sell of ourselves first in order to ever take ownership.
Its shaping up to be another memorable October for people working in, or who report on, the Financial sector. The last 12 months have shown that anything is possible in financial markets. Credit spreads have widened to never before seen levels. Any short-term lending mechanics, but especially Commercial Paper, are frozen stiff. “Easy Money” is anything but.
This time just last year — on October 5th, 2007, the Dow Jones Industrial Average closed at a price of 14,066.01 on a volume of 29,190,300. To put things into perspective, today — October 3rd, 2008 — the Dow Jones Industrial Average opened at 10,483.96 on 264,270,000 average volume.
The next 12 months prove to be interesting for those who find themselves in the boundaries of what remains of Wall St. The coming earnings seasons will expose with certainty, the fact that we are (and have been) in a recession. Between dwindling credit, falling consumer confidence and spending, and growing unemployment statistics, there are few reasons to expect that companies will turn anything like the profits to which Wall St. is accustomed. In fact, it will be intriguing to see what innovation and consolidation take place in order that many major players are able to survive.
Today I had an argument with a scarecrow.
A scarecrow is the name I’ve given to the majority of today’s Republicans — those who even though they are not neo-conservative, follow as blindly as they do the church, the Republican party talking-points.
I call them scarecrows because they are empty-headed and rely largely on fear.
The credit markets have pretty much frozen as banks are unwilling to lend to consumers or each other in a deafening reduction of confidence.
Many banks made mortgage loans with impossible terms or to unqualified borrowers. These banks then invested in securities backed by these now failing loans. It is this hidden potential for toxic holdings that reduces bank-to-bank confidence. And even a banks own self-confidence in consumer lending, if the bank itself relies on borrowing.
The reaction from the US government to this problem has been to provide liquidity to reinflate confidence. This has been unsuccessful, largely because, its dependent upon setting a floor on the US mortgage market and/or mortgage-backed securities market despite a natural state of correction in both. Price-fixing will not help lending between banks nor free-markets. Since inter-bank lending is immediately crucial to the economy, I present my own idea for solving this problem with our banking system.
Two important points; first, lending is both in the near-term costly and risky. Second, the current rash of government backstop-lending is no different with few exceptions (since the government controls the rules of the market). This is the more important power of the government, not its ‘infinite’ supply funds, but its ability to control the rules.
What if the Federal Reserve in coordination with the FDIC opens a new window. This window will help banks lend to each other without lending them a thing. For a smartly set (perhaps percentage based) premium to the bank borrowing, the US government would — like a bank certifying a check — hold in escrow the amount of some bank-to-bank loan. Then, on at least these occasions, US banks could ensure transactions with each other through the help of their shared regulators and assistance providers. Obviously, when and where these banks felt more comfortable, they could go back to working together directly. The impact of the premium is disincentive to using the window.
This would be self-sustaining through premium collection and would not be harmful to the banking system or US tax-payer. I believe something as simple as this could help form an insurance for slowly winding down the operations of other windows at the Federal Reserve. The windows could then help to support each other until varying crisis are resolved.
One of the most observable yet understudied socioeconomic changes in the US over the last century, has been the integration of a credit system whose sum value while virtual, has been forcibly bloated to equal that which was actual. It is a structure which has inflated the value of American currency, the appetite of the American consumer, and made less visible the need for mindful economic discipline — discpline in general. It is a structure that popularized passive budgeting, over-spending, and the carrot-on-a-stick philosophy that comes from keeping up with the Jones’. More importantly and obviously more general, this is a structure that changed our society.
The change has created a set of conditions that poise the US for a dangerous and likely disastrous economic retraction — leaving us the same old questions we had when we set-out. And yet these conditions will give birth to newer, deeper questions about the future (and who we are). For while it is arguable that this explosion of virtual wealth may have incited some social mobility or led to some amount of social progression, I fear both those advances however great, have also been as equally virtual.
Certain ultimate questions take shape upon the horizon: What social or cultural changes will lead Americans to the discipline needed to excel with the changes ahead? And: Is this generation ready for a world where it must pick between dinner or a movie?
For years people have learned from hacking — its the most ancient human art. But, it seems the US has slid so far from its foundation, that now the sheer construction and presentation of information can within itself be considered in some way criminal.
A judge acting as thought-cop told 3 MIT students they were not to discuss their latest hack. Since the halt order, the availability of the information in the presentation has fluctuated. Decius makes mention of the evolving legal manifestation on Memestreams.
I believe information like this ought to be free, and so: a complete form of the content of the halted Defcon presentation is right here (in PDF format). Enjoy.
Below, the cover of The New Yorker this month, showing a candid shot of our President in the oval office, “chilling” with one of his better friends — capturing the President, a man at work.
God. Religion. And all those poor, witless dupes taken in — these are a few of my favorite things! I’m kidding. While I do despise organized religion, that does not automatically mean I have a problem faith. I make this clarification because people will likely assume I believe faith — along with religion — is useless. When the fact is, such a characterization could not be further from the truth.
Its important to make clear that, I’m not saying anything about faith when I talk about religion. That those are two entirely different things. And though its somewhere in the really boring middle, that the Bible covers this particular topic.
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