Month: February 2010

Matt Taibbi Nails it Again

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He discusses the fact that John Thain, the man who spent over a million dollars rehabbing his office at Merrill Lynch while conspiring to conceal losses from Bank of America shareholders has now been appointed CEO of troubled business lender CIT.

Matt Taibbi asks the question that this raises, “Man, exactly what do you have to do to become unhirable in this country? Eat Christian babies on CNN?“

It’s true. As Mr. Taibbi notes, the “Genius” behind the LTCM fiasco is still getting to make his money playing with other people’s money.

This is all about corruption and nepotism.

Economics Update

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Normally, I don’t talk stock prices, particularly the Dow, which is an arbitrary and not particularly accurate metric of the stock market, but the fact that the DJIA closed below 10,000 today has a significant effect on the thinking of the markets, or at least on the thinking of the financial journalists.

On the other hand we do have some good signs, most notably that the interest rate premoum on junk bonds appears to be falling, which generally implies that financing is becoming more available.

Additionally, it appears that some sort of deal is in the offing with the EU to bail out Greece, which has driven voth the Yen and the dollar lower, because investors are not looking so hard for safe havens.

As is the norm, the falling dollar has driven oil higher.

A Good Start

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H/t War is Boring

How do you know if a government policy is disastrous?

Well, there are any number of indicators, but the one that has a 100% record on predicting f%$#ed up policy is if it’s Dick Cheney’s idea.

Well, one of his ideas, back when he was Secretary of Defense was that “non core” military functions, like cargo transport, feeding the troops, and maintenance, should be outsourced to the private sector.

We all know how well that works. It’s so bad that even the US Air Force, the poster child for letting contractors run wild, is bringing its sustainment activities in house: (paid subscription required)

The U.S. Air Force is beginning to reclaim government management over upkeep of its large fighter, transport and, eventually, unmanned aircraft fleets, a move that could stunt efforts from companies looking to reap high profits from the maintenance business.

The Air Force is moving away from the contractor logistics support arrangements , popular in the 1990s, in which the government paid a premium for industry to handle product support duties, including oversight of touch labor and supply-chain management. During this post-Cold War period, the Pentagon downsized the workforce equipped with these skills in hopes that industry could oversee these tasks at lower costs and more efficiently. However, under Defense Secretary Robert Gates, this trend is reversing, and the government is now insourcing jobs in acquisition and sustainment; top Air Force officials say they expect savings.

If the policy has proved to be a disaster of such epic proportions that even the boyz from Colorado Springs* have decided that the possibility of plush jobs after they retire as generals cannot excuse it, then you just know that Cheney was part of the original decision.

Of course, the private contractors maintain that they will be cheaper (they aren’t), and that the government will find it tough to attract talent (Nope, once you take this in house, you get the people who previously worked for the government, then went to work for LockMartBoeinThrup, but have now been laid off), but mostly, they are screaming that they want their money.

Sorry, but you had your chance, and you f%$#ed it up. You’re fired.

*I mean the USAF, not Focus on the Family, though sometimes it is hard to tell them apart.

Big Surprise

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Former Liberian President, and mass murderer, Charles Taylor is saying that he did mining deals with Pat Robertson in exchange for his lobbying Bush and His Evil Minions™ for support:

Former Liberian president Charles Taylor, testifying in his war crimes trial in The Hague on Thursday, said that his government had awarded American televangelist Pat Robertson a gold mining concession in 1999 and that Robertson later offered to lobby the Bush administration on the government’s behalf.

The revelations came in the midst of Taylor’s U.N.-backed trial on 11 counts of committing war crimes and crimes against humanity during Sierra Leone’s 1990s civil war. Taylor is accused of directing a Sierra Leonean rebel group, the United Revolutionary Front, in a campaign aimed at securing access to the country’s diamond mines. The rebel movement stands accused of committing mass atrocities in the West African country in the late 1990s, including the mutilation of thousands of civilians.

Here’s hoping that the war crimes tribunal comes after Pat Robertson, whose association with Taylor has been common knowledge for at least a decade.

Of course, Robertson will never see the inside of a court room, because the United States won’t turn over anyone for war crimes, because we’re big enough not to play by the rules, so all that we will hear from him on this is his spokesman’s denial.

Our Financial Crisis, Brought to You by the WTO

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There are a lot of people out there who think that free trade will always do all kinds of good things: It creates peace, it creates democracy, it keeps your daughter from dating the guy with the tattoos and piercings.

I’m not one of these people.

First, I think that we have yet to see an economy becoming a developed economy with a large middle class in a free trade environment, and second, I think that a bad free trade deal is worse than no, or a more limited, free trade deal.

Well it appears that on March 1, 1999, the United States signed onto a free trade deal that mandated the sort of reckless deregulation that has nearly destroyed out economy:

But the U.S. is not being sold out in a vacuum.

On March 1, 1999, countries accounting for more than 90 per cent of the global financial services market signed onto the World Trade Organization’s Financial Services Agreement (FSA). By signing the FSA, they committed to deregulate their financial markets.

For example, by signing the FSA, the U.S. agreed not to break up too big to fails. The U.S. also promised to repeal Glass-Steagall, and did so 8 months after signing the FSA.

Indeed, in signing the FSA and other WTO agreements, the U.S. has legally bound itself as follows:

  • No new regulation: The United States agreed to a “standstill provision” that requires that we not create new regulations (or reverse liberalization) for the list of financial services bound to comply with WTO rules. Given that the United States has made broad WTO financial services commitments – and thus is forbidden by this provision from imposing new regulations in these many areas – this provision seriously limits the policy [options] available to address the current crisis.
  • Removal of regulation: The United States even agreed to try to even eliminate domestic financial service regulatory policies that meet GATS [i.e. General Agreement on Trade in Services] rules, but that may still “adversely affect the ability of financial service suppliers of any other (WTO) Member to operate, compete, or enter” the market.
  • No bans on new financial service “products”: The United States is also bound to ensure that foreign financial service suppliers are permitted “to offer in its territory any new financial service,” a direct conflict with the various proposals to limit various risky investment instruments, such as certain types of derivatives.
  • Certain forms of regulation banned outright: The United States agreed that it would not set limits on the size, corporate form or other characteristics of foreign firms in the broad array of financial services it signed up to WTO strictures …
  • Treating foreign and domestic firms alike is not sufficient: The GATS market-access limits on U.S. domestic regulation apply in absolute terms; that is to say, even if a policy applies to domestic and foreign firms alike, if it goes beyond what WTO rules permit, it is forbidden. And, forms of regulation not outright banned by the market-access requirements must not inadvertently “modify the conditions of competition in favor of services or service suppliers” of the United States, even if they apply identically to foreign and domestic firms.

In other words, the problem isn’t just that Congress and the White House have sold out to the Wall Street giants.

The problem is also that the U.S. has signed WTO agreements that have given the keys to the too big to fails, and have neutered their regulators. Even if some politicians tried to stand up to Wall Street – or even if we “throw out all of the bums” currently in political roles – the U.S. would still be locked into the WTO’s scheme for helping the financial giants to grow ever bigger and to take ever-bigger and ever-riskier gambles.

Yet another reason to oppose the so-called “Doha” round, which promises to deregulate financial services even further.

What has gone on at the WTO is that it has been functioned as a prostitute for elements in our economy which do not produce tangible goods, finance, insurance, entertainment, patent holders, etc. at the expense of absolutely everything else in the economy.

It’s killing us.

AESA Radar Enters Flight Test on F-16

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Northrop Grumman is now flying its Scalable Agile Beam Radar (SABR) on a USAF F-16.

The interesting question here is how much this will influence current F-16 operators who are currently considering purchasing the F-35.

I think that it is likely that the capabilities of an avionics suite installed on an F-16 can come close to that installed in a JSF: Even with an advanced sensor suite, it’s clear that the F-16 will be less than ½ the price, and less than ½ the direct operating costs.

Additionally, any avionics package is far more open to the development of national systems and upgrades, and the ability to operate 2-3 times as many aircraft, particularly if the nation expects to operate largely in coalition action or counter-insurgency scenarios, might very well deliver superior results on the battlefield.

Have I Mentioned that I Love Alan Grayson*

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He lays into Pat Robertson’s comment on Haiti and the devil, and further notes that the religious right, and particularly Pat Robertson’s supporters have achieved none of their goals, specifically a constitutional amendment against gay marriage, and a ban of abortion, and he asks, “What about your own pact with the Devil? How’s that worked out for you?” (3:07)

I don’t think that everyone should be like Alan Grayson, but I think that it’s essential that the Democrats have a few of these sorts of firebrands to describe the wrong that the Republicans do in stark and moralistic terms.

*In a 110% purely heterosexual kind of way, of course, as the General would say.

Signs of the Apocalypse

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First, and most visibly, it’s the fact that the New Orleans Saints are now the world champions, having won the Super Bowl.

Secondly is that fact that David Stockman, one of the young Turks at the core of the “Reagan revolution,” he was Budget Director during Reagan’s first term, is arguing that the government should tax the financial sector to shrink its size:

While supply-side catechism insists that lower taxes are a growth tonic, the theory also argues that if you want less of something, tax it more. The economy desperately needs less of our bloated, unproductive and increasingly parasitic banking system. In this respect, the White House appears to have gone over to the supply side with its proposed tax on big banks, as it scores populist points against the banksters, too.

Not surprisingly, the bankers are already whining, even though the tax would amount to a financial pinprick — a levy of only 0.15 percent on the debts (other than deposits) of the big financial conglomerates. Their objections are evidence that the administration is on the right track.

Make no mistake. The banking system has become an agent of destruction for the gross domestic product and of impoverishment for the middle class. To be sure, it was lured into these unsavory missions by a truly insane monetary policy under which, most recently, the Federal Reserve purchased $1.5 trillion of longer-dated Treasury bonds and housing agency securities in less than a year. It was an unprecedented exercise in market-rigging with printing-press money, and it gave a sharp boost to the price of bonds and other securities held by banks, permitting them to book huge revenues from trading and bookkeeping gains.

Stockman is suggesting that people who he saw in the 1980s as the epitome of the heroes in Ayn Rand’s fiction should be taxed with the explicit aim of shrinking their size, because the business they do does not serve the public good.

This is a refutation of the “Objectivist” philosophy at the core of much of Mr. Stockman’s public life, which saw the glorification of greed as a force for good, and a legitimate basis for public policy decisions.

People Who Don’t Get It

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He’s smiling because he’s taking your money.

About 4 weeks ago, Segway, the folks who make the geeky little scooter, was sold to a British investor, and as a result, the earlier investors will lose their money, to the tune of something over $150 million dollars.

Well, Mercury News Columnist Chris O’Brien looked at what happened, and waxed poetic:

In this case, though, what’s fascinating is not just the money, but who gave it. Jeff Bezos of Amazon chipped in. And closer to home, so did venture capitalist Doerr and Kleiner Perkins Caufield & Byers.

I’m not gloating over their failure. Their successes have made them legends, and for good reason. It turns out, though, that despite their foresight and immense personal fortunes, they remain human and fallible. Just like the rest of us.

You see, they didn’t just think the Segway would be successful.

They expected it to change the world. In a hype-filled month such as this, during the lull between the Google Nexus One and the Apple iSlate, it’s good to be reminded how rare it is for such lofty expectations to be met.

Why did people believe this? Because Dean Kamen was a “Genius”.

He had at the time designed the AutoSyringe, an automated injection/infusion device, a mobile dialysis machine which was highly commercially successful, along with the iBot, an all-terrain wheel chair.

I remember when the Segway was called “It”, and later it was called “Ginger”, and when people like Steve Jobs and Jeff Bezos were saying that it was going to change the world.

Then “It” came out, and it was just an electric scooter, and kind of a dorky one at that.

The turn of events with the Segway, where it is largely reduced to punchline (see Paul Blart: Mall Cop) is not surprising.

What is surprising is not that a bunch of people thought that it would be a commercial success, which didn’t happen, or the initial investors would have gotten their money back, but rather that somehow or other people came to believe that it would literally change the world.

If there is a lesson to all this it is that the folks who are giants in Silicon Valley and related industries are not any more likely to see the next big thing than anyone else, and that they are where they are because they got lucky.

I Lived There

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Middletown, Connecticut, that is.

I lived there for a year when I designed equipment to, among other things, cut new assholes on dead things (see bottom video), and now I’ve heard that there has been a massive explosion at a Kleen Energy Systems power plant under construction there, and there have been fatalities.

It appears that they were purging gas lines in an enclosed building, and the gas ignited.

News report is the top video.


Accident


“Bung Dropper,” which will be used on my daughter’s prospective suitors.

Sometimes, I Just Don’t Give a Sh%$

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I do this for shopping lists all the time!

And it aggravates me no end when the liberal blogosphere sends me marching orders* to talk about something that I really don’t give a sh%$ about.

Case in point, Sarah Palin’s use of notes scribbled on the palm of her hand for the softball Q&A following her speech at the Teabagger convention.

People make notes. People make notes in the palms of their hands, yours truly included.

Even if Sarah Palin were to memorize the Congressional Record, she would still be a moron with narcissistic personality disorder.

Yes, it reinforces the meme, but it really means very little.

*There are no actual marching orders, it’s satire. I am making fun over the entire tempest in a teapot aspect of this. There is so much wrong with Sarah Palin, it seems to me to be shooting fish in a barrel.

Stephen Andrew Wakefield Acted Unethically

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Medical regulators in the UK have now ruled that Stephen Andrew Wakefield acted unethically in the conduct of his study linking vaccinations and autism.

The doctor who first suggested a link between MMR vaccinations and autism acted unethically, the official medical regulator has found.

Dr Andrew Wakefield’s 1998 Lancet study caused vaccination rates to plummet, resulting in a rise in measles – but the findings were later discredited.

The General Medical Council ruled he had acted “dishonestly and irresponsibly” in doing his research.

, Dr Wakefield said the claims were “unfounded and unjust”.

The GMC case did not investigate whether Dr Wakefield’s findings were right or wrong, instead it was focused on the methods of research.

During the two-and-a-half years of hearings – one of the longest in the regulator’s history – he was accused of a series of charges.

‘Callous disregard’

The verdict, read out by panel chairman Dr Surendra Kumar, criticised Dr Wakefield for the invasive tests, such as spinal taps, that were carried out on children and which were found to be against their best clinical interests.

The panel said Dr Wakefield, who was working at London’s Royal Free Hospital as a gastroenterologist at the time, did not have the ethical approval or relevant qualifications for such tests.

The GMC also took exception with the way he gathered blood samples. Dr Wakefield paid children £5 for the samples at his son’s birthday party.

Dr Kumar said he had acted with “callous disregard for the distress and pain the children might suffer”.

(emphasis original)

It’s likely that they will pull his certification to practice medicine, though this might not mean much, as Wakefield left the UK, and now practices in the United States.

His research, which was not merely bad, but corrupt, had sickened thousands of children who were either not vaccinated, or caught disease from their unvaccinated friends. (vaccines are not 100%, and the loss of herd immunity is a serious issue)

Additionally, Lancet has already rescinded the original article.

One hopes that he ends his life in jail, because he wasn’t just wrong, he pushed forward his bogus study in the hopes of making money from an equally bogus therapy that he had patented.

[on edit]
A sharp eyed reader noticed that I got his name wrong. I have corrected, but have left the original strike through to show what a complete prat I am.

Brazil Fighter Competition Update

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We have a report from the Brazilian Newspaper Folha de S. Paulo reporting that there will be 36 Dassault Rafales purchased at $175 million each, ($6.2 billion) and this constitutes a $2 billion price cut in the deal.

On the other hand, the Brazil defense ministry had denied that any formal decision has yet been made.

$175 million each? Great googly moogly, for a few bucks more they could buy the F-22, if it could be sold, and if the production tooling still existed.