In trying to wrap my head around the financial crisis I stumbled on this series of YouTube videos that describe exactly what money is. (It’s basically debt…) It’s a bit pedantic and school-house rock-ey, but I was pretty fuzzy about what exactly money represented post-gold standard and this address that question:
http://video.google.com/videoplay?docid=-9050474362583451279
Tuesday, September 30, 2008
Thursday, September 25, 2008
The blunders that led to the banking crisis
I always like to see what NewScientist has to says about different issues. Because of this, I was happy to stumble across The blunders that led to the banking crisis.
The article talks about the way that banks and/or financial institutions go about measuring their risk. It also talks about how their models completely failed to represent complex financial instruments such as bundled home loans.
Anyway, I thought it was a good read.
The article talks about the way that banks and/or financial institutions go about measuring their risk. It also talks about how their models completely failed to represent complex financial instruments such as bundled home loans.
Anyway, I thought it was a good read.
Wednesday, September 24, 2008
Can it really be that bad? Seriously?
Someone at the call asked if I really thought these investment banks were only backed 5% by actual assets. My answer is "yes," and to understand why, I point to a rather long but easy-to-understand article over here. But here's the start:
In any pyramid scheme, the last buyer is the one who loses the most. That shouldn't be the US Tax-payer. It's one thing for a private bank to welsh on it's debt. It's something else when it's all been transferred to the US Treasury and it has to welsh on its obligations. I say, let a few more banks go under and then get a good price for the actual assets. Find some way to inject liquidity into the system without just paying off the banks. (Is this one serious?)
That's my $.02.
1. People like buying safe investments.The article goes on to describe how this gets tied into insurance and how that helped people convince investors that this big steaming pile of crap was really a "safe" investment. I will concede that at the bottom is still a bunch of actual assets, but the amount of money promised far exceeds a responsible broker's limit. By an order of magnitude or so. Buying up all those obligations frees up the broker to lend money again, but doesn't fix the underlying problem: the assets are still overvalued and backing too many unpayable debts.
2. Historically, mortgages are very safe investments: people will go to incredible lengths not to lose their homes.
3. Banks realized that they could make lots of money by taking groups of mortgages, and turning them into bonds that they could sell, earning a commission, and passing the risk to whoever bought the bonds.
4. These bonds became incredibly popular. Lots and lots of people and organizations wanted to buy them.
5. There aren't enough good mortgages to put together the number of bonds that people wanted to buy.
6. So banks started giving out mortgages to people who couldn't repay them, using elaborate and dishonest schemes to pretend that they were actually not bad mortgages.
7. The people who got mortgages that they couldn't repay didn't repay them.
8. The banks act surprised: "My god, no one could have predicted that so many loans would default! Whine, whinge, moan, someone come help us!
In any pyramid scheme, the last buyer is the one who loses the most. That shouldn't be the US Tax-payer. It's one thing for a private bank to welsh on it's debt. It's something else when it's all been transferred to the US Treasury and it has to welsh on its obligations. I say, let a few more banks go under and then get a good price for the actual assets. Find some way to inject liquidity into the system without just paying off the banks. (Is this one serious?)
That's my $.02.
More on fun and games
A post I've been wanting to send for a while ...
www.kongregate.com
A website to play and rate games from independant developers, offering monthly prizes to the top played and rated games, and a simple badge and point pased reward system for players to keep them coming back for more.
Looks like Time magazine recently cited it as one of their top 50 websites for 2008 ... so much for passign you guys a scoop.
http://www.time.com/time/specials/2007/article/0,28804,1809858_1809954_1811334,00.html
www.kongregate.com
A website to play and rate games from independant developers, offering monthly prizes to the top played and rated games, and a simple badge and point pased reward system for players to keep them coming back for more.
Looks like Time magazine recently cited it as one of their top 50 websites for 2008 ... so much for passign you guys a scoop.
http://www.time.com/time/specials/2007/article/0,28804,1809858_1809954_1811334,00.html
Tuesday, September 23, 2008
What good is Chrome?
Google made an announcement a couple weeks ago that they were developing and releasing a new web browser. Considering that they've been pretty active in Firefox development, I wasn't really sure what to make of Chrome, the name they're giving it. Also, the fact that they only have a windows beta, while I've been using my mac exclusively, left me uninterested.
I finally gave it another look this week though, and my opinion has shifted into the "maybe-this-isn't-such-a-bad-idea" category.
After going through a number of the new features, many (but not all) requiring deep architectural considerations, I remembered the reason Microsoft got into the browser war to begin with: there was a risk that Netscape would become the new platform, and the OS would become a much less-important commodity. Application developers (and not just web applications) would target the browser as a solid and flexible base instead of needing to learn how to port to different OS'es and machines. That vision has stalled for a few years (I think) because MS won the browser war, and stopped pushing. But with AJAX, flash, JavaFX, Silverlight, etc all promising full rich content applications using the browser as a base, I think there's an updated showdown brewing.
And the thing I like about Chrome is that it does a lot of things to give the user control over the browser as a platform. Between the builtin javascript debugger, the ability to start and stop running scripts, inspect variables, and even tell me which pages and scripts are hogging all the memory or CPU cycles, it gives the user the most control over the pages they view since GreaseMonkey*
Interesting side note, it looks like Google commissioned Scott McCloud to summarize the major changes going into Chrome, which he does in 5 chapters. He's a fairly well known cartoonist on the web who's blogged about micro-payments and comic theory. Michael should recognize him.
So I finally fired up a virtual windows machine and installed it, and it seems to run just fine. But with a 400+ MB source tree, I'm still hesitant to try and help with the mac port... :(
*Greasemonkey is a really cool plugin for Firefox that lets you rewrite pages before they get rendered. People have used this to, say, block (delete) the really noisy ads, or skip the scripts that want to send up pop-ups. Others have written greasemonkey scripts to add subdirectories in gmail, or mashup gmail and gcal. You can inspect the script before you install it and control which scripts run on which pages.
I finally gave it another look this week though, and my opinion has shifted into the "maybe-this-isn't-such-a-bad-idea" category.
After going through a number of the new features, many (but not all) requiring deep architectural considerations, I remembered the reason Microsoft got into the browser war to begin with: there was a risk that Netscape would become the new platform, and the OS would become a much less-important commodity. Application developers (and not just web applications) would target the browser as a solid and flexible base instead of needing to learn how to port to different OS'es and machines. That vision has stalled for a few years (I think) because MS won the browser war, and stopped pushing. But with AJAX, flash, JavaFX, Silverlight, etc all promising full rich content applications using the browser as a base, I think there's an updated showdown brewing.
And the thing I like about Chrome is that it does a lot of things to give the user control over the browser as a platform. Between the builtin javascript debugger, the ability to start and stop running scripts, inspect variables, and even tell me which pages and scripts are hogging all the memory or CPU cycles, it gives the user the most control over the pages they view since GreaseMonkey*
Interesting side note, it looks like Google commissioned Scott McCloud to summarize the major changes going into Chrome, which he does in 5 chapters. He's a fairly well known cartoonist on the web who's blogged about micro-payments and comic theory. Michael should recognize him.
So I finally fired up a virtual windows machine and installed it, and it seems to run just fine. But with a 400+ MB source tree, I'm still hesitant to try and help with the mac port... :(
*Greasemonkey is a really cool plugin for Firefox that lets you rewrite pages before they get rendered. People have used this to, say, block (delete) the really noisy ads, or skip the scripts that want to send up pop-ups. Others have written greasemonkey scripts to add subdirectories in gmail, or mashup gmail and gcal. You can inspect the script before you install it and control which scripts run on which pages.
Tuesday, September 16, 2008
easterbrook and the miles per gallon debate
One of my favorite columnists, Greg Easterbrook, who wrote that semi-scathing review of Friedman's book last week, had this to say about Congress' latest vacillation on fuel efficiency mandates:
Last fall, after 20 years of strident inaction, Congress finally passed a bill to increase the fuel efficiency of cars, SUVs and pickup trucks. There was a lot self-congratulation on Capitol Hill. The law seemed to mandate roughly a one-third increase in new-vehicle MPG by 2020 - enough to eliminate the oil the United States imports from the Persian Gulf. Sounds great! But as your columnist wrote in December 2007, "TMQ is hugely suspicious … [there is] a waiver provision that says that if the new standards prove too onerous, automakers can ask they be waived. That is a formula for what Washington specializes in: the appearance of dramatic action while nothing actually happens." So what's going on in Washington right now? Pleading poormouth, the big three automakers are already asking for a waiver from the 2015 interim standard, which requires roughly a 15 percent improvement in fuel efficiency. That standard does not take effect for seven years, and already Detroit automakers are saying they can't meet it.
Or perhaps, they don't want to try. Lee Hyun-Soon, president of Hyundai, told the Wall Street Journal last week his company will meet the entire 2020 standard by 2015, and will do so entirely with conventional vehicles -- no complex plug-in hybrids, just sensible engineering using existing technology. Whenever Washington seems to get serious about oil waste, Toyota, Honda, Hyundai and Subaru put their engineers to work -- then build, at American factories staffed by American workers, vehicles that comply with MPG rules. Whenever Washington seems to get serious about oil waste, Chrysler, Ford and General Motors put their lobbyists at work to dilute or evade the standards. There are only 535 people in the United States so gullible they would believe Korean engineers can meet a technical standard, yet American engineers cannot. Unfortunately, those 535 people are the members of the United States Congress.
Are they the 535 most gullible people in America?
Has anyone from the mainstream media followed up on how last year's seemingly strict MPG bill is being watered down? As Eric Patashnik of the University of Virginia details in his powerful and timely new book "Reforms at Risk," reporters are often present when "dramatic" legislation passes, then treat the enactment as the end of the story -- paying no attention as lobbyists later water down a bill. As Thomas Friedman points out in his important new book "Hot, Flat and Crowded," the refusal of Congress and the White House to take any real action against oil waste has had the effect of transferring hundreds of billions of dollars to Moscow, and to the oil sheiks who support anti-Western and anti-Israel terrorism. If MPG standards were higher, oil demand would fall. Instead, high demand holds up barrel prices, enriching Persian Gulf dictatorships and Vladimir Putin. Why, Friedman asks, is Russia suddenly confrontational? Because in the past two years, Russian elites have gotten super-rich, owing to rising oil prices brought on at least in part by U.S. stupidity regarding petroleum waste. If Congress grants Detroit the MPG waivers it seeks, the stupidity will march on.
Meanwhile, back at the federal budget: In 1976, the entire U.S. national debt was about $800 billion, converted to today's dollars. Last summer, Congress without debate and with barely any notice added $800 billion to the national debt ceiling -- raising that ceiling by an amount equal to the entire debt a generation ago. With no debate! The U.S. national debt was $5 trillion in 1997, and has doubled to almost $10 trillion since. Why aren't the young outraged? The old are acting irresponsibly -- spending like crazy but unwilling to tax themselves, then handing the bill to the young. If the young were spending borrowed money like crazy, the old would be lecturing them. How come in Washington, the old can get away with behavior that would be called reckless for the young?
At any rate, the moment another $800 billion worth of borrowing was authorized, supposedly for "emergency" purposes, lobbyists got to work trying to seize every penny now. The big three automakers are now asking Congress for $50 billion of that $800 billion, supposedly to retool to build the fuel-efficient vehicles they had no way -- just no way on Earth -- of knowing they would ever be required to build. As Paul Ingrassia pointed out in last week's Wall Street Journal, when Congress bailed out Chrysler in 1980, the deal was structured so that if the company recovered, taxpayers got most of their money back. But what's being asked for now is pure subsidy -- money taxpayers will never see again, and that will be used in part to fund the bonuses of overpaid auto executives who got their companies into trouble in the first place. (The Journal opposes the bailout, though the $50 billion would go to Corporate America.) Ingrassia further notes that when Chrysler's Lee Iacocca tried to weasel out of the deal and keep the money that was promised back to taxpayers, Ronald Reagan stood firm and would not budge. Contrast Reagan's sense of civic responsibility to the current president and Congress, both of which just cannot wait to give away other people's money.
Now connect the dots! The automakers are asking for $50 billion in handouts to meet new fuel economy requirements -- at the very time they are also asking for waivers from those requirements. If the past is any guide, they will get both the subsidies and the waivers. The net will be zero progress, more billions of dollars for oil shipped to anti-American forces in the Persian Gulf, and more debt handed to everyone under the age of 30.
Last fall, after 20 years of strident inaction, Congress finally passed a bill to increase the fuel efficiency of cars, SUVs and pickup trucks. There was a lot self-congratulation on Capitol Hill. The law seemed to mandate roughly a one-third increase in new-vehicle MPG by 2020 - enough to eliminate the oil the United States imports from the Persian Gulf. Sounds great! But as your columnist wrote in December 2007, "TMQ is hugely suspicious … [there is] a waiver provision that says that if the new standards prove too onerous, automakers can ask they be waived. That is a formula for what Washington specializes in: the appearance of dramatic action while nothing actually happens." So what's going on in Washington right now? Pleading poormouth, the big three automakers are already asking for a waiver from the 2015 interim standard, which requires roughly a 15 percent improvement in fuel efficiency. That standard does not take effect for seven years, and already Detroit automakers are saying they can't meet it.
Or perhaps, they don't want to try. Lee Hyun-Soon, president of Hyundai, told the Wall Street Journal last week his company will meet the entire 2020 standard by 2015, and will do so entirely with conventional vehicles -- no complex plug-in hybrids, just sensible engineering using existing technology. Whenever Washington seems to get serious about oil waste, Toyota, Honda, Hyundai and Subaru put their engineers to work -- then build, at American factories staffed by American workers, vehicles that comply with MPG rules. Whenever Washington seems to get serious about oil waste, Chrysler, Ford and General Motors put their lobbyists at work to dilute or evade the standards. There are only 535 people in the United States so gullible they would believe Korean engineers can meet a technical standard, yet American engineers cannot. Unfortunately, those 535 people are the members of the United States Congress.
Are they the 535 most gullible people in America?
Has anyone from the mainstream media followed up on how last year's seemingly strict MPG bill is being watered down? As Eric Patashnik of the University of Virginia details in his powerful and timely new book "Reforms at Risk," reporters are often present when "dramatic" legislation passes, then treat the enactment as the end of the story -- paying no attention as lobbyists later water down a bill. As Thomas Friedman points out in his important new book "Hot, Flat and Crowded," the refusal of Congress and the White House to take any real action against oil waste has had the effect of transferring hundreds of billions of dollars to Moscow, and to the oil sheiks who support anti-Western and anti-Israel terrorism. If MPG standards were higher, oil demand would fall. Instead, high demand holds up barrel prices, enriching Persian Gulf dictatorships and Vladimir Putin. Why, Friedman asks, is Russia suddenly confrontational? Because in the past two years, Russian elites have gotten super-rich, owing to rising oil prices brought on at least in part by U.S. stupidity regarding petroleum waste. If Congress grants Detroit the MPG waivers it seeks, the stupidity will march on.
Meanwhile, back at the federal budget: In 1976, the entire U.S. national debt was about $800 billion, converted to today's dollars. Last summer, Congress without debate and with barely any notice added $800 billion to the national debt ceiling -- raising that ceiling by an amount equal to the entire debt a generation ago. With no debate! The U.S. national debt was $5 trillion in 1997, and has doubled to almost $10 trillion since. Why aren't the young outraged? The old are acting irresponsibly -- spending like crazy but unwilling to tax themselves, then handing the bill to the young. If the young were spending borrowed money like crazy, the old would be lecturing them. How come in Washington, the old can get away with behavior that would be called reckless for the young?
At any rate, the moment another $800 billion worth of borrowing was authorized, supposedly for "emergency" purposes, lobbyists got to work trying to seize every penny now. The big three automakers are now asking Congress for $50 billion of that $800 billion, supposedly to retool to build the fuel-efficient vehicles they had no way -- just no way on Earth -- of knowing they would ever be required to build. As Paul Ingrassia pointed out in last week's Wall Street Journal, when Congress bailed out Chrysler in 1980, the deal was structured so that if the company recovered, taxpayers got most of their money back. But what's being asked for now is pure subsidy -- money taxpayers will never see again, and that will be used in part to fund the bonuses of overpaid auto executives who got their companies into trouble in the first place. (The Journal opposes the bailout, though the $50 billion would go to Corporate America.) Ingrassia further notes that when Chrysler's Lee Iacocca tried to weasel out of the deal and keep the money that was promised back to taxpayers, Ronald Reagan stood firm and would not budge. Contrast Reagan's sense of civic responsibility to the current president and Congress, both of which just cannot wait to give away other people's money.
Now connect the dots! The automakers are asking for $50 billion in handouts to meet new fuel economy requirements -- at the very time they are also asking for waivers from those requirements. If the past is any guide, they will get both the subsidies and the waivers. The net will be zero progress, more billions of dollars for oil shipped to anti-American forces in the Persian Gulf, and more debt handed to everyone under the age of 30.
Thursday, September 4, 2008
Google now in yer FACE!
Picasa 3 was just released and supports "automatically tagging" your photos when it recognizes your face in them. View the video with all the features on youtube:
Can't help but think of a recent fail blog post about google and face recognition:
Can't help but think of a recent fail blog post about google and face recognition:
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