Monday, October 13, 2008

[current meltdown] target the real criminals in this

Oddson and Bush in accord - wonder what about

My question is about the CBI:

The Icelandic banks were highly leveraged and large relative to the domestic economy. So are those of the UK and Switzerland. None has been immune to the devastating effects of the crisis. And there may be significant contagion from Iceland to countries vulnerable to capital flow reversals.

Glitnir had to request a short-term loan from the Central Bank of Iceland, which refused. Rather than taking Glitnir into administration, the CBI enforced nationalisation on punitive terms.

Most eyes are on the over-leveraging and the stark greed in operation at High Street bank level. Few question the role of the CB in this. After all, the one who bails out is not the criminal, right?

This blog has always gone straight for the jugular, rather than for the bleeding hands. In the U.S., it aims straight for the heart of the Morgan empire. In other countries the very first question is about the CB or Reserve Bank. Regulators know full well what is going down at all stages, they conduct a hands-off approach in one sense but the bottom line is that they know what is happening and are interwoven with the whole banking system.

This over-leveraging, the hedge funds, the whole mismanagement – all that was known about in the interconnected banking world. I keep coming back to the FOMC report of October, 2006, [admittedly the last one I read in full], in which predictions were made for the future up to 2011. The Fed’s pronouncements and the data they utilize can have a profound effect, e.g. in this assessment by an analyst of that report in the context of mortgages:

However, by specifically naming the sector in their press release, the Fed may have just shifted undue focus to Housing … Housing data is notoriously misleading for one very simple reason -- it measures new contracts but does not account for actual closings …

The Fed's stance on housing is consistent with Bernanke's prior remarks that the housing slowdown will shave 1.00% off growth and markets were ready for that. What makes me uneasy, though, is that markets may be forced to use misleading housing data to reshape their expectations of inflation.

Sackerson writes:

If everyone can handle the the cash call when it comes, good; if not, maybe a domino effect - one failure unbalancing another in a chain reaction. In particular, will hedge funds, who tend to play with borrowed money, be able to honour their contracts, or will they be the weak link in the chain?

If this is even obvious to amateurs like myself, then why would it not have been obvious to Bernanke and Co., professionals in the sphere? We come back to the same old question – was the “hands-off” at significant moments a known-known and therefore deliberate or was it mere arrogant incompetence?

If it was deliberate incompetence, then the reason for it is social destabilization and there is a body of data which supports the contention that the phoenix from the ashes is a quiet scenario envisaged by a greater influence than just the FOMC and world CBs.

That's a path most don't wish to explore so they opt instead, to stumble about blindly like the rest of us.


Sunday, October 12, 2008

[gestures] things which can mean the world

Isn't this grand? Isn't it a lovely way to sign off on this Sunday evening? On top of the decision by the courts to allow the gurkhas residency in the UK, the army has written to the residents of Wooton Basset for their support in commemorating the war dead:

In a letter to the town thanking the residents for the gesture, the head of the British Army, Sir Richard Dannatt, said: "I am writing to express my sincere gratitude.

"In many respects, it is the things that cost nothing that are the ones that are the most important - a friendly greeting in the street, a prayer in church... But the gestures shown by the people of Wootton Bassett surpass these at every level."

The things that cost nothing but which mean everything.

Have a lovely night.

[councils] ratepayers want their money back

Look, I know I've already run this about a week ago but am I missing the point here? Why is no one kicking up a fuss about the council money in Icelandic banks?

Why are people just rolling their eyes to the sky and saying, "No way are you getting a bailout," when what they should be doing is going en masse to council offices and asking why the money was not used on:

1. meals on wheels which have been curtailed and tough to the pensioners;
2. extra rubbish collections and insisting the rubbish men come to you to empty the bin, not having to walk half a mile;
3. extra council jobs for a range of workplace sectors?

"Oh, we were making your council tax money work for you." No you weren't - bollocks! You were being clever clever with someone else's money, weren't you?

Now you've lost it and you're liable for every last pound being returned to the ratepayers who paid through the nose for your smartarse actions. You have not used the money on what you were duty bound to do, so just like every other citizen who loses someone's money, you are liable for it.

Oh and by the way, what about this one?

[new feudalism] the nanny state and the new barons


To get back to reality, Debacle commented on the earlier Iceland post:
"Just that it all sounds so extremely dire, like we have a total wipe out on the way."

My reply was, with one addition:
It's the old story of whether you look ahead and see the natural consequences of what is happening now at state, local governmental and societal level. It helps if there are two or three generations to judge by as well. Plus a lot of reading. Plus a centre right or left political stance.

I think the way it is shaping up, it is not so much a matter of living frugally in Britain [in the manner of the Icelander] but becoming increasingly dependent on the Nanny state for what we need, to the point that they can switch it on and off.

This confers power to the central regime and which regime does not wish for this?
The prevailing point of view is that we will pull out of this thing economically and we may well do. However, a lot of societal changes, irreversible ones, will have occurred by then. My eyes are not on the money, which many seem to be focused on but on the societal changes. The noose is inexorably tightening.

There is some support for this point of view. It largely depends whom you read and listen to so I tried to find reasonably rational people who are writing on this, even if one of the publications below is leftist by reputation.

First, a recap of the Common Purpose business here and here, the regionalization which makes the fragmented British regions part of a small sector on the outer rim of Europe, also the citizen jury thing.

Secondly, a Wiki definition of the New Feudalism:

Among the issues claimed to be associated with the idea of neofeudalism in contemporary society are class stratification, globalization, mass immigration/illegal immigration, open borders policies, multinational corporations, and "neo-corporatism."
[The New Feudalism] mimics many of the effects of the old feudalism: an entrenched, fabulously wealthy elite, held in place by low taxes on capital and no taxes on estates; and a large and growing class of uneducated, unskilled labor brought in by unchecked immigration (both legal and illegal), and kept in check by high levels of personal debt, and high taxes on earned income (payroll, income, sales, property, etc.)

Property


Former state Senator John McClaughry, Vermont, an advocate for free enterprise, noted the following at the Second Annual N. Y. Conf. on Private Property Rights (PRFA, 1996):

Today, however, feudalism is coming back in a different guise. A growing body of legal theorists, allied with activist organizations and congenial political leaders, has been working very hard to replace the long-cherished concept of freehold property and land with the old feudal concept of social property. The ancient maxim, sic utere tuo ut alienum non laedas, “use your own so as not to injure that of another,” is now held to be insufficient as a maxim for the proper use of land.


In England [the old feudalism] provided, for perhaps three centuries, protection, order, and social stability. It frustrated and discouraged trade, commerce, mobility and individual freedom. By creating a hierarchical economic, military and political order under the king, feudalism invited the abuses associated with centralized power and was, in turn, subject to the disintegrating forces that inevitably undermine centralized systems.


The system was inflexible and in the face of changing circumstances and, of course, technology changes such as the longbow and gun powder which made armed cavalry obsolete, removing the military base that had given rise to the system, feudalism declined.


The story of how [the new feudalism] came about begins probably in the 1930’s but it came to a great fruition in the 1970’s. In the 1970’s we saw legal articles expanding the power of regulation to areas of critical state concern, to wetlands, endangered species, coastlines, and an expansion of the zoning power to limit the actions of individuals.

We saw ingenious new legal doctrines developed, the public trust doctrine, the natural state preservation doctrine and even the idea, never actually litigated, of rights inherent in natural objects, which can be protected by a self-appointed guardian, in the courts.

You have to recognize who the enemy actually are. Organizations like WWF, the NWF and the Sierra club have been pushing, through environmental legislation, for what is ostensibly the rights of wildlife:

The lawyers in the audience will recognize immediately that either of these constitutional amendments would afford tremendous opportunities for creating litigation to stop any person — any landowner, any corporation, any business — from doing virtually anything that could in any way be construed to affect the environment.

Peter Shawn Taylor, in the Financial Post [June 23, 2006], said of the Canadian property situation:

The Ontario government last week announced dramatic new controls over where citizens of Toronto and its satellite cities will be able to live in the next 25 years. It is a deliberate strategy to curb suburban growth and force more people into downtown high-rise apartments -- thus frustrating the hopes and dreams of many young potential homebuyers across Southern Ontario.

There are also strict density targets of up to 400 people or jobs per hectare for urban areas, which appear wildly unrealistic. Building on previous New Feudalism planning tenets such as the Greenbelt legislation that expropriated the development potential of great swaths of farmland and the construction of massive taxpayer-subsidized public transit monuments, Queen's Park will now dictate where residents can live as well.


The steep density targets will also result in living spaces that are far less egalitarian, in keeping with our feudal theme. Australian New Urbanism critic and academic Patrick Troy (who coined the term New Feudalism in 1992) has argued convincingly that putting limits on suburban growth and creating higher-density downtowns will create greater income stratification in housing.

The workplace
and the migrant

David Nicholson-Lord, in the New Statesman [yes, I know], writes of the new workplace:

Since the 1960s work has been dematerialised - turned into a quality rather than a quantity. In the UK, we no longer make things so much as do things - for other people. The rise of the service sector is one of the big stories of the late 20th century. Nine out of every ten new jobs created in the US - and more than 70 per cent of British employment - is in services. In Britain's mid-19th-century manufacturing heyday, by contrast, the figure was less than a third.

Economic power and value, like money itself, is etherealising towards a state of pure information - so services such as IT, education and media are booming. Proliferating regulation, legislation and social complexity produce a proliferation of lawyers, accountants, expert advisers.
Studies by the Institute of Manpower Studies in the 1990s demonstrated the insecurity and inequality of the "new economy" of flexible labour markets, outsourcing, contract working and self-employment.

Self-employment, the institute found, was characterised by extremes of high and low pay, with the better-off over-represented in banking, finance and business, and the poorest in personal and domestic services such as hairdressing and cleaning.
It was not only exacerbating wider social inequality, according to the institute; the economic penalties it carried persisted into old age. And for many "flexibly employed" people, the new economy was not an invigorating world of economic freedom and dynamism - the picture new Labour likes to portray.

[Things formerly unacceptable] ... the soaring prison population, the excesses of executive pay - the world has found it can tolerate them and moved on.
Feminism has brought emancipation for some women - and subjugation for others. For both sexes, the challenge of "having it all" - a plausible theory, a not ignoble ideal - has turned into a series of empty gestures, tasks performed by surrogates in which one's only exertion is the wielding of a credit card.

Here were most of the storylines of the new feudalism: the obsession with appearances, the retinue of retainers, the narcissistic New Age-ism.

Barbara Franz says:

The proposed guest worker program will transform American citizenship from an institution based on civic membership to one based on residence rights and socio-economic status. The United States will create a permanently disadvantaged category of guest workers and further reduce the competitiveness of low-skilled minimum wage American workers.

The concept of immigration has begun to change from an inclusive notion granting equal rights to immigrants and citizens to a more ambivalent model emphasizing obligations and responsibilities of newcomers while withholding social, political, and legal rights.

Down on the farm


Robert Schubert, at Bnet, says:

The privatization of seed is but one part of the steady consolidation of economic power throughout agriculture. Large agro-industrial and retail corporations have now secured toeholds in every phase of the farming cycle: they own seed and seed patents, they control processing facilities, they dominate the retail sector, and they have even moved into financing farmers' operations.

It's as if the barons have arisen from the grave and brought the old feudal system back with them.

The corporations that control poultry and hog farming have already reduced many livestock farmers to contract labor, and grain farmers ... seem headed for the same fate.
Scientific advances in the 1970s and '80s heralded a new era in agriculture. To boost flat sales, Monsanto and other agrichemical companies ventured into genetic engineering and transformed themselves into the biotechnology industry.

They bought out traditional seed companies and engineered their herbicide-resistant genes into the newly acquired seed lines. Although the lower-cost, traditional seed lines simultaneously became less available, to maximize profits the industry needed farmers to buy new seed every year instead of saving it.

David Barboza, in the NYT, says, of the new agricultural thrust:
Many farmers are worried about being squeezed by giant agricultural companies. ''There's a fear this will turn into 14th-century feudalism,'' Agriculture Secretary Dan Glickman said. ''Those farmers will become serfs. We're not there yet, but it may be coming.''
''The issue for many farmers is not just about the current financial situation and their income,'' said Michael Boehlje, a professor of agricultural economics at Purdue University in West Lafayette, Ind. ''In the back of their minds, there's a set of concerns about the long term. They want to know how they are going to participate in the new agriculture.''

To wind this up before it becomes any longer than it is, the whole thrust is towards oligopoly where the corporations which survive [the Morgans et al], become the dictators within their diversified fields of monopoly, stronger than the nominal government which is further weakened by moves like the EU and the NAU. These are the new barons.

There are distinct characteristics of the new feudalism, as listed above and the overriding one for us is loss of property rights and bodily sustenance [water and food are dictated by the new barons]. The relatively free middle class now contracts and we return to the serf class, the landed worker [repossessions etc.], the military and the ruling class.

Collapse of the economy, as Debacle mentioned is neither here nor there. If it serves its purpose, it is there. If it is time for recovery in a new social order, that will occur. It's in the hands of the new barons.

[sanity] and a sunday morning laugh

Sometimes you just have to laugh.

Top blogger William Gruff, in the last post, has just lambasted me for "losing the plot". Yeah right, William. As this appears to be a reference to me calling people out for their behind the scenes hatchet jobs, perhaps you'd prefer a dose of real sanity.

Howabout the Undersexed Space Pilot you guys seem to be so impressed with these last months, masquerading as "one of the boys"? Click the link and try his account of Life on Mars for starters.

Sheesh! You prefer your reality from that source? Give me a break.

[suicide] and the golden gate bridge


In an attempt to circumvent suicide, the Golden Gate Bridge authority has voted to install nets twenty feet below the deck to prevent deaths:

The Golden Gate Bridge is a frequent site for suicides and is sometimes reported to be the most popular place to commit suicide in the world. The deck is approximately 245 feet (75 m) above the water. After a fall of approximately four seconds, jumpers hit the water at some 88 miles per hour (142 km/h), which is nearly always fatal. Most of those who survive the impact die in the cold water.

Currents beneath the bridge are very strong, and some jumpers have undoubtedly been washed out to sea without ever being seen. The water may be as cold as 47 °F (8 °C), and great white sharks, which tend to congregate around the Farallon Islands, are sometimes seen under the bridge.

The photo below shows how the stainless steel netting would look:



There are three questions I'd like to ask:

1. What is the maximum height a person can fall from, into water?

Here is one answer. Here is another. Olympic divers leap from a ten metre tower. Seems to me, all things being equal, that around 30 metres would be maximum if the intention was to survive.

2. Why, if a person jumped and hit the net, could he/she not jump again off the net and suicide that way? Seems a bit of a waste of money to put the net so high. Then again, there is the shipping to consider below and the aesthetics.

3. Should consideration be given to potential suicides, at taxpayers' expense? Jury's out on this one. Personally, suicide is no way out as it is a one way trip to the nether regions and I don't mean the water below.

You know, I'd advise them to make that call, after all: