Stocks Surge After Central Banks’ Action on Debt Crisis - NYTimes.com

Sounds like another big bank bailout to me! Let's see what all the talking heads have to say.

 "“They are trying to prevent them from seizing up global liquidity and capital flows and impacting banks and financial institutions throughout the world,” he said.
Burt White, the chief investment officer for LPL Financial, called the liquidity move “a Band-Aid.”
“It helps to prop up the banks for a while, which is going to buy time for Europe to fix the problem,” he said.
The jump in stocks was also an extension of the turmoil and volatility that have weighed on global markets for more than a year."

'via Blog this'

Radio Interview with a High School Classmate

A fascinating radio interview with a high school friend, Michael Manoogian, who went to the RI School of Design then moved to LA to become a first rate logo designer.

Listen to internet radio with Help 2 Succeed on Blog Talk Radio

U.S.Now a Net Exporter of Oil-Based Fuels

[This story is behind the WSJ paywall, so access may be limited]

An interesting and potent development for the U.S., a net importer of refined oil-based products for more than 60 years. I wonder about the economics of this. We are still a huge importer of crude oil at 9 million barrels per day. Yet, after refining, we turn an increasingly larger portion of that into exported products like gasoline and diesel fuel.

Does it make economic sense to ship crude oil here and then turn around and ship refined products abroad? If the prices remain high for refined products, transportation costs must be of less consequence than previously with efficient and massive supertankers. The exports to developing economies must be priced high enough to turn a profit or companies would not do it . Intuitively it seems to make more sense to build and operate refineries closer to the source of the crude oil supplies and the customers for refined products, for maximum efficiency and profitability.

"U.S. exports of gasoline, diesel and other oil-based fuels are soaring, putting the nation on track to be a net exporter of petroleum products in 2011 for the first time in 62 years.
A combination of booming demand from emerging markets and faltering domestic activity means the U.S. is exporting more fuel than it imports, upending the historical norm.
According to data released by the U.S. Energy Information Administration on Tuesday, the U.S. sent abroad 753.4 million barrels of everything from gasoline to jet fuel in the first nine months of this year, while it imported 689.4 million barrels.
That the U.S. is shipping out more fuel than it brings in is significant because the nation has for decades been a voracious energy consumer. It took in huge quantities of not only crude oil from the Middle East but also refined fuels from Europe, Latin America and elsewhere to help run its factories and cars."
"As recently as 2005, the U.S. imported nearly 900 million barrels more of petroleum products than it exported. Since then the deficit has been steadily shrinking until finally disappearing last fall, and analysts say the country will not lose its "net exporter" tag anytime soon."

Secret Fed Loans Helped Banks Net $13B - Bloomberg

A fascinating, well researched story by Bloomberg of the massive bailout of banks during the 2008-2009 financial crisis and the secrecy surrounding it. Kudos to Bloomberg and their authors and editors for doing this. Clearly, the financial system was in jeopardy at the time and bold action was necessary. It's the secrecy that surrounded it that we find so egregious along with the fact that far too many bankers and the industry in general benefited to an unwarranted degree.


I'm no financial expert, but it seems to me that the finance industry and the Fed were in cahoots to keep Congress in the dark and, for the most part, impotent during this crisis. One could argue that haste was necessary and a dysfunctional Congress could not be trusted to do the right thing in a speedy fashion. Yet, what does it say about the resiliency of our democracy in time of crisis?


Sadly, these world-rattling events have further relegated Congress to irrelevancy in a time of financial crisis. We continue to see more of it with failure of the Super Committee to rationally rein in the deficits and debt, part of which arose from the frantic efforts to save the big banks and the financial system from collapse.

 "The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.
The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue."

'via Blog this'

Banks Build Contingencies for Euro Zone Breakup - NYTimes.com

Markets rule, not Governments!

 "On Friday, Standard & Poor’s downgraded Belgium’s credit standing to AA from AA+, saying it might not be able to cut its towering debt load any time soon. Ratings agencies this week cautioned that France could lose its AAA rating if the crisis grew. On Thursday, agencies lowered the ratings of Portugal and Hungary to junk.
While European leaders still say there is no need to draw up a Plan B, some of the world’s biggest banks, and their supervisors, are doing just that."

'via Blog this'

The Two Moons - NYTimes.com

David Brooks provides a clear explanation of the political funk we're in, but fails to to offer a way out, except via a fiscal calamity.

 "...Ronald Brownstein summarized the underlying typography recently in The National Journal: “In Allstate/National Journal Heartland Monitor polls over the past two years, up to 40 percent of Americans have consistently expressed support for the conservative view that government is more the problem than the solution for the nation’s challenges; about another 30 percent have backed the Democratic view that government must take an active role in the economy; and the remaining 30 percent are agnostic. They are open to government activism in theory but skeptical it will help them in practice.”

In these circumstances, both parties have developed minority mentalities. The Republicans feel oppressed by the cultural establishment, and Democrats feel oppressed by the corporate establishment. They embrace the mental habits that have always been adopted by those who feel themselves resisting the onslaught of a dominant culture..."

'via Blog this'

xkcd: Money Chart

xkcd: Money Chart:

A hat tip to The Big Picture for this massive money chart. Check out xkcd.com website to see various comical stuff if you enjoy their humor.

How Do You Spell Dysfunctional?

BULLSHIT  is the proper noun for this statement from the co-chairs of the Select/Special/Super Committee charged with finding $1.2 trillion in deficit reduction in the next 10 years as reported in the WSJ (see below).

Obama is the easy target, but it's our Congress that has failed us. No visible leadership will stand up and vote what must be done to correct our fiscal path. The only credible voice, IMHO, is Paul Ryan in the House of Representatives. He speaks truth. Most of he rest speak nothing but empty partisan rhetoric. Will the real leaders please stand up?

Deficit Panel Leaders Fail to Reach Deal

"WASHINGTON — After one last bout of fitful but futile talks, Congressional negotiators conceded the obvious: that the joint Congressional committee charged with drafting a deficit reduction package would miss its deadline this week. But they did not quite give up the ghost of a chance that a solution might be found later.

“After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline,” said a statement issued late in the afternoon by Representative Jeb Hensarling of Texas and Senator Patty Murray of Washington, the panel’s Republican and Democratic co-chairs.

“Despite our inability to bridge the committee’s significant differences, we end this process united in our belief that the nation’s fiscal crisis must be addressed and that we cannot leave it for the next generation to solve,” they said. “We remain hopeful that Congress can build on this committee’s work and can find a way to tackle this issue in a way that works for the American people and our economy.”"

VJ Day Video in Hawaii

A special thank-you to my childhood friend, Mike, now an accomplished graphics artist, for sharing this superb video of the spontaneous celebration when the news broke in August 1945 that Japan had surrendered after years of of bitter warfare in the Pacific region.

As a child, I distinctly remember my father celebrating by blasting the leaves off a tree in the yard with his shotgun. America was ecstatic after so much bloodshed and sacrifice by the 'Greatest Generation' in WWII.

VJ Day, Honolulu Hawaii, August 14, 1945 from Richard Sullivan on Vimeo.

Search can't scale without social, and Bing has Facebook and Twitter on its side | TechRepublic

The massive amount of information that humankind creates is becoming evermore difficult for search engines to master. This story examines what Bing and Google are up to to.

" throughout all of human history up until 2003 we created 5 exabytes of data (five billion gigabytes). We now create that much every day. In 2011, we’ll create 1.8 zettabytes of data (a zettabyte is a 1000 exabytes). That’s up from 1.2 zettabytes in 2010, and we’ll be creating over 20 times that by 2020."

'via Blog this'

Face Recognition Moves From Sci-Fi to Social Media - NYTimes.com

People have no inherent right to anonymity that I can find in our Constitution. Nevertheless, we all hope that we can have it in this electronic age. In my view, our anonymity evaporated the day we ordered Caller ID or began participating on the Internet. You can pretend to be anonymous, but that's a pipe dream given today's data mining technology.

 "...As SceneTap suggests, techniques like facial detection, which perceives human faces but does not identify specific individuals, and facial recognition, which does identify individuals, are poised to become the next big thing for personalized marketing and smart phones. That is great news for companies that want to tailor services to customers, and not so great news for people who cherish their privacy. The spread of such technology — essentially, the democratization of surveillance — may herald the end of anonymity..."

Facial recognition is but one more tool available, now to the masses of cell phone camera users, that drives the nail in coffin of Mr. and Ms Anonymity. Or I suppose we could all wear masks or burkas.

'via Blog this'

A Gold Rush of Subsidies in Clean Energy Search - NYTimes.com

Corporate welfare based more on ideology than realistic economics is not good for America's fiscal health. Any policy that builds in a no-fail parameter is simply bad public policy, except for projects that are for the military, or health, or the environment, or... pick your favorite.

"...The government support — which includes loan guarantees, cash grants and contracts that require electric customers to pay higher rates — largely eliminated the risk to the private investors and almost guaranteed them large profits for years to come. The beneficiaries include financial firms like Goldman Sachs and Morgan Stanley, conglomerates like General Electric, utilities like Exelon and NRG — even Google..."

'via Blog this'

Scuffer Syndrome Ends

Our male Airedale Terrier, Scuffer (age 9), several years ago was infected with Lyme Disease. The primary symptom was an inability to walk normally. His rear end would not function properly and he would drag himself along with mostly his fore legs. This 2006 video shows how it affects him.He also will sometimes cry in pain when he moves. He had a few episodes of this starting in 2005, but for the past 2-3 years he showed no symptoms.

For the past few days, the 'Scuffer Syndrome' reappeared. Today, he's normal again. We remain puzzled as to what causes this and the vets are baffled, too. Even an MRI shows no abnormalities that would cause this behavior. I think it may be neurological triggered by episodic infections somehow associated with the Lyme disease.

But we are so thankful that he seems to have returned to normal. I took him for a short walk on leash this afternoon and he was the normal Airedale we love.

Italy Struggles with Austerity, Growth, Debt and New Leadership

http://www.nytimes.com/2011/11/13/world/europe/silvio-berlusconi-resign-italy-austerity-measures.html

Italy's politics are far more complicated than ours. This brief summary of the austerity and stimulus measures shows how deeply ingrained is patronage and spending. Italy would benefit enormously if people just paid their legitimate taxes. It's estimated that tax avoidance/evasion in the 'shadow economy' is 22.3% of Italy's GDP.( From this link: "According to a 2007 paper by Austrian economist Friedrich Schneider, the shadow economy in Italy accounted for 22.3% of gross domestic product (GDP), that of Spain 19.3%; Portugal 19.2% and Greece a staggering 25.1%. By comparison, the U.S. shadow economy was 7.2% of GDP. A recent European Union report came up with similar figures.")

"...The measures are aimed at reducing Italy’s $2.6 trillion public debt and increasing growth by selling $21 billion worth of state assets and increasing the retirement age to 67 from 65 by 2026. It also would loosen the power of professional guilds, liberalize municipal services and offer tax breaks for infrastructure and companies that hire young workers..."

Click here for more details of the various changes that are being voted by the Italian parliament.

The Inequality Map - NYTimes.com

I had never experienced the humorous side of David Brooks. This is hilarious AND poignant.

 "Foreign tourists are coming up to me on the streets and asking, “David, you have so many different kinds of inequality in your country. How can I tell which are socially acceptable and which are not?”"

'via Blog this'

Obama Administration Delays Decision on Keystone XL Pipeline - NYTimes.com

TeamObama punts an important decision, seemingly for political reasons. Will the real leaders please stand up?

"“I support the State Department’s announcement today regarding the need to seek additional information about the Keystone XL pipeline proposal,” the president said in a statement. “Because this permit decision could affect the health and safety of the American people as well as the environment, and because a number of concerns have been raised through a public process, we should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood.”"

'via Blog this'

European economies: Europe's deepening crisis | The Economist

European economies: Europe's deepening crisis | The Economist:

Contains a map of Europe including the Euro zone and how other countries' currencies are connected ...or not. Norway, Switzerland and Great Britain seem less affected.

'via Blog this'

Google Buys Contextual Rich News Browsing Startup Apture To Beef Up Chrome | TechCrunch

My blog incorporates Apture. Highlight a word or phrase and Apture will enable you to click on other media sources to increase the richness of the content. It's a really robust service. Google is wise to buy them and incorporate their technology.

 "Apture Highlights allows you to highlight any word or phrase on a page and instantly bring up search results in a window. The startup brings results from 60-plus sources including YouTube, Twitter, Wikipedia, Google and more for extra context around content. The browser add-on is available for Chrome, Firefox and Apple’s Safari browsers. In fact, more than a billion pages a month are enhanced with Apture, says Harris.
Apture’s business model also offered publishers a white-label version of Apture Highlights, which is being used by Scribd, The Financial Times, Reuters, Economist.com, ScientificAmerican, BleacherReport.com, and Times of India. Publisher simply insert a line of Javascript code, and readers can then access an HTML-based overlay that acts like a minitiature browser that enables readers to find and explore related multimedia content without leaving the original page"

'via Blog this'

The Affordable Housing Scam - Reason Magazine

The Affordable Housing Scam - Reason Magazine:

John McClaughry's excellent review of the recent book, Reckless Endangerment, provides a realistic appraisal of the leaders, groups and  and policies that moved the appealing notion of expanding home ownership as a part of the American Dream to the near-collapse of the banking system and the economy. This is well worth reading for a thumbnail sketch of how the mess unfolded. Good work, John.

 "The thesis of Reckless Endangerment is simple: In a rush to orchestrate affordable home ownership—and generate enormous profits—politicians, government-sponsored enterprises, pusillanimous regulators, greedy mortgage brokers, and profit-chasing Wall Street investment bankers combined to drive the American economy into its worst crisis in 70 years, saddling taxpayers with trillions of dollars of debt and leaving the financial landscape littered with the wreckage of ruined lenders, borrowers, and taxpayers."

'via Blog this'

Taking Aim at Internet Rules - NYTimes.com

The New York Times supports more regulation of the Internet pathways that are provided by private companies. Thankfully, they are not owned by the Government. These are not monopolies and the heavy hand of regulation is not needed. The term  'telecommunications services' that they argue includes the Internet is an artifact of a bygone age when voice communications were essentially a monopoly, thus needed regulation.
To bring back this anachronism and support regulation of the Internet is an unnecessary impediment. Should I be surprised given that the NY Times essentially has become a mouthpiece for TeamObama?

 "The Republican approach goes back to 2002, when the F.C.C., under the Bush administration, made the bizarre decision that broadband Internet communications were not, in fact, telecommunication services under the law. Last year, the F.C.C. had the opportunity to redefine broadband as a telecommunications service, which would allow greater regulatory oversight. Regrettably, it chose not to, and instead passed a limited set of rules that did not ban the practice of paying to move content faster and largely exempted wireless broadband services."

'via Blog this'

Bailey: Are Super PACs to political parties as asteroids were to dinosaurs?

The fundamental truth in all this is that ‘money is the mother’s milk of politics.’ Always has been and will continue to be. The present system of political parties adds great comfort to the politicians and voters who embrace them. Politicians have a source of ideological and financial support and too many voters are relieved of the responsibility of thinking for themselves.

When information and money are no longer the exclusive domain of the traditional political parties, over time maybe we’ll see the end of partisan and ideological gridlock. Perhaps a new paradigm will emerge truly based on free speech and the money to distribute ideas and positions unhindered by antiquated party machinery. Such an unintended consequence may indeed benefit the Republic.

"We are all aware of the theory of unintended consequences. Most, if not all of us, have had a direct experience with this concept. Generally speaking, unintended consequences can be grouped into three categories:

• Unexpected benefit.
• Unexpected detriment occurring in addition to the desired effect of the policy.
• A perverse effect contrary to what was originally intended.

Depending on your perspective, each of the three may be happening due to the 2010 Supreme Court decision known as Citizens United. In short, this decision allows unlimited spending during campaigns as long as that spending is done completely outside of an individual candidate’s campaign or in coordination with the political party that he/she is affiliated with."

'via Blog this'

End Bonuses for Bankers - NYTimes.com

I favor less regulation rather than more for most business activity, but the Wall Street bailouts by the Federal government have persuaded me that this has led to yet more severe excesses in the finance sector.


Taleb's simple proposal makes eminently good sense. The bonus excesses, particularly in 2010, simply are not warranted given the bailout these bankers received during the collapse of the risk markets in 2008/2009. 

 "The promise of “no more bailouts,” enshrined in last year’s Wall Street reform law, is just that — a promise. The financiers (and their lawyers) will always stay one step ahead of the regulators. No one really knows what will happen the next time a giant bank goes bust because of its misunderstanding of risk.
Instead, it’s time for a fundamental reform: Any person who works for a company that, regardless of its current financial health, would require a taxpayer-financed bailout if it failed, should not get a bonus, ever. In fact, all pay at systemically important financial institutions — big banks, but also some insurance companies and even huge hedge funds — should be strictly regulated."

'via Blog this'

Excerpt: Mike Mayo's Exile on Wall Street - WSJ.com

A recently popular opinion from one of the few analysts who early on called out the banking sector for too-risky investments/activities and was chastised for it before the bottom fell out of bank stocks and the financial crisis precipitated by their house of cards.

"To fix the banking sector, should we rely more on government regulation and oversight or let the market figure it out? Tougher rules or more capitalism? Right now, we have the worst of both worlds. We have a purportedly capitalistic system with a lot of rules that are not strictly enforced, and when things go wrong, the government steps in to protect banks from the market consequences of their own worst decisions. To me, that's not capitalism."

'via Blog this'

Milton Friedman on Capitalism and the Nature of Man

Milton Friedman understood the fundamental nature of man and his arguments for the economic/political system they should live under...capitalism... is only rebutted by idealists, who wish for something different, not realists. The argument is really about which worldview one embraces: a.) man is inherently good and with the proper governance, can become better; or b.) man is fundamentally wired to pursue his own self interest.


If the latter, then capitalism is the correct approach (as Russia and China have discovered). If the former, as present Europe situation portrays and the failed Russian and Chinese models have shown (socialism, communism), failure is inevitable, because it (the socialist state) is not affordable and, as history has shown, is doomed to fail.

United States Headed for Massive Decline in Carbon Emissions

This would appear to be good news, but how much of the carbon reduction is from the economic slowdown vs. serious efforts to reduce emissions?

"For a country where oil and coal use have been growing for more than a century, the fall since 2007 is startling. In 2008, oil use dropped 5 percent, coal 1 percent, and carbon emissions by 3 percent. Estimates for 2009, based on U.S. Department of Energy (DOE) data for the first nine months, show oil use down by another 5 percent. Coal is set to fall by 10 percent. Carbon emissions from burning all fossil fuels dropped 9 percent over the two years."

'via Blog this'

Growing-Gap-Between-Contributions-and-Benefits-for-Social-Security-and-Medicare-August-2011.jpg (809×452)

Despite the facts shown on the chart below, our Vermont Senator Bernie ('Outrageous') Sanders makes outlandish statements like this: "...The truth is that the Social Security Trust Fund has run surpluses for the last quarter century. Today’s $2.5 trillion cushion is projected to grow to $4 trillion in 2023. The nonpartisan Congressional Budget Office, experts in this area, say Social Security will be able to pay every nickel owed to every eligible beneficiary until 2039...."

He implies that the 'Trust Fund' is in good shape neglecting to say that the assets have been loaned to the Government and used for other purposes. The assets are mostly IOUs from the Government. Unless spending is controlled in all areas of Government, the risk increases that these IOUs may not be paid in full because the country may not be able to meet all its obligations. The 'full faith and credit' of the U.S. is not as rock-solid as it was.

Much more here. Sen. Sanders' rhetoric does a disservice to reality.

Here's a link to a great chart on SS prospects in the years ahead from the Washington Post.

State officials say Irene transportation repairs will cost less than half what they anticipated

I have long maintained that Vermont's very high 'transaction costs' (the overheads including regulatory and environmental compliance, permitting, administrative and judicial delays for reviews, appeals, etc.) that are incurred to build anything of consequence in this state add unnecessary delays, expense and increase the costs of doing business here.

The exceptional work done recovering from Irene's damage shows that Vermont could be far more efficient in using tax and private dollars. A wise Legislature would revamp how Vermont does business and set the state on a path of economic growth by reducing the wasteful burden created by a ponderous and expensive process that adds little value to our investments.

"...The dramatic shift brings the overall estimate of Irene damage built into state estimates well below the roughly $900 million mark state officials were citing in mid-October. The new grand total is about $500 million and includes $250 million for new emergency and long-term highway repair costs, $50 million to construct a new Vermont State Hospital, $50 million for stabilizing the old state office complex and renovating or building new space, about $19 million in individual assistance and $140 million in repairs to town roads, bridges and public facilities..."

"...The state also saved millions of dollars by taking short cuts during the post-Irene emergency that normally would be prohibited under state and federal laws. The standard pre-construction procedures for road and bridge repair were abandoned in order to expedite the process, according to Sue Minter, deputy commissioner of the Agency of Transportation. The processes that are normally followed for transportation projects — federal and state permitting, environmental mitigation, design review, planning, right-of-way purchases – went by the wayside..." 

'via Blog this'