Saturday, October 29, 2011

This should give us pause as we contemplate life on a warmer planet. Extremes in weather are almost always a bad thing, and the prospect on those extremes getting even wilder is not happy.

Climate Change and the End of Australia

What is likely to vanish – or be transformed beyond recognition – are many of the things we think of when we think of Australia: the barrier reef, the koalas, the sense of the country as a land of almost limitless natural resources. Instead, Australia is likely to become hotter, drier and poorer, fractured by increasing tensions over access to water, food and energy as its major cities are engulfed by the rising seas.
To climate scientists, it's no surprise that Australia would feel the effects of climate change so strongly, in part because it has one of the world's most variable climates. "One effect of increasing greenhouse-gas levels in the atmosphere is to amplify existing climate signals," says Karoly. "Regions that are dry get drier, and regions that are wet get wetter. If you have a place like Australia that is already extreme, those extremes just get more pronounced."

Thursday, October 27, 2011

Matt Taibbi's  Wall St Isn't Winning, It's Cheating

These inequities are what drive the OWS protests. People don't want handouts. It's not a class uprising and they don't want civil war -- they want just the opposite. They want everyone to live in the same country, and live by the same rules. It's amazing that some people think that that's asking a lot.

Been thinking about Steve Jobs and his place in the tech ecosphere. The products he's best known for (Mac, iPod, iPhone, iPad) were not great leaps in technology. Apple didn't invent the mouse, and the Mac wasn't even the first Apple computer to feature one. Apple didn't invent the smartphone, the portable music player, or the touchscreen tablet.

What Steve Jobs did was make these innovations into something that people really wanted to use, and he did it through perfecting the interface. He understood that most people didn't want to learn all about the machines they were using. Jobs made it so people didn't about to think about the computer while using it and people loved him for it. What people loved about the Mac was the mouse and the way it interacted with the desktop (something which no popular computer even had before the Mac came along). What people love about the iPad is the touchscreen. They don't even have to know about what's going on underneath, and most of them didn't even remember a time when it would have been expected. And that's the beauty of what Steve Jobs wrought.

Wednesday, October 26, 2011

Turns out that Rubio in Florida lied about his family fleeing communism in Cuba (they actually left before Castro even returned from Mexico). Easy way to score some street cred with the still-powerful exile community, I guess. It's not as romantic to say your family moved here for economic opportunity just like most immigrants (awkward too, with all the hate directed towards immigrants by todays GOP).

I don't really see this as that big a deal. It's pretty standard  for politicians to stretch their own accomplishments and outright lie about their ancestors'. Of course, Gore got crucified by the media for a lot less.
Just saw some idiot on CNBC insisting that for-profit schools were focused on the "educational experience" and comparing them favorably to normal colleges because they don't have basketball teams. At first I thought he was joking.

Tuesday, October 25, 2011

The AIG bailout (now up to about $182 billion) is the perfect case of what should never have happened. AIG was essentially two companies under one roof: a giant boring insurance company that was quite solvent and a giant speculative hedge fund that lost hundreds of billions. The two should never have been allowed to coexist (we regulate insurance companies to make sure they don't blow all the premiums they're paid on stupid gambles) and once AIG became insolvent it was not necessary to bail out the hedge fund operation to keep the insurer going.

Being the biggest insurance company in the world, AIG collapsing would likely have caused a mass panic and set off a bad chain of events. The collapse of the hedge fund which made giant bets with other hedge funds and financial entities wouldn't have done so. It would have screwed over the fund's counterparties (a "counterparty" in this instance being who the hedge fund was making bets with), but it wouldn't have caused a massive chain reaction.

A lot of this is due to the kind of bets AIG's hedge fund was making. In many instances, it was taking relatively small amounts of money on the chance that very very large CDOs (collateralized debt obligations, the massive bundles of mortgages that set of the entire debt crisis) would stop paying off. In some cases this was billed as "insuring" the CDOs, but they were pretty much straight up bets since the people buying the "insurance" weren't the owners of those CDOs, they were just betting on them failing (kind of like taking out fire insurance on someone else's property then cheering for the arsonists). Being willing to take these giant bets with a huge downside was mostly due to the way the hedge fund people were compensated. If they made a risky bet that was calculated to make money over an extended period of time (like taking huge bets on the health of poorly understood CDOs), the hedge fund people got paid for the entire estimated profit right away. They didn't have to wait until the deal had run its course. They didn't even have to wait until the deal had made any money at all. They got paid right away. This obviously created a massive conflict of interest, giving the hedge fund guys incentive to make any deal they could "estimate" would make money regardless of the risk.

When the CDOs started going under and AIG suddenly didn't have the money to pay off their bets; the Federal government didn't need to step in and start shoveling money into the furnace. The could have forced AIG into chapter 11, fired all the management, then spun off the giant insurance company we'd decided was essential to the global economy. The insolvent hedge fund could then have been wound down. There would not have been enough money to pay off all the bets AIG had lost, but so what? It's not the taxpayers' responsibility to bail out every company that makes bad bets and goes under. And, as stated, in many cases the counterparties had only paid out relatively small amounts of money getting some truly sick odds on their bets (up to 100:1). However, between the money they did have, the bets they'd made that didn't actually lose, and any money they could've clawed back from what was paid to hedge fund guys based on phantom profits; there likely would have been enough to pay back the money the counterparties had put up to make those bets. The counterparties wouldn't have been happy, but that's what happens when you make giants bets with a company that'll never be able to pay them off if they lose.

So, in the end, no one would have been out of pocket any money and the incompetents running AIG would have been out on the streets. Instead, we spent billions bailing out not the insurance side (which was not insolvent) but the hedge fund side which never should have been bailed out.

Monday, October 24, 2011

Just finished reading Bailout Nation, with New Post-Crisis Update: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy and it made me feel ill. Sure, the author overstated a few things to make his point. But even the raw numbers are pretty brutal, and I learned a few things I hadn't known. Draws a pretty bleak picture of how deregulation, lack of oversight, distorted reward structures, and historically low interest rates combined to melt the entire financial system. His emphasis in on the Fed and how normally sedate banks and insurance companies went wild with speculative greed.

I liked Michael Lewis'  The Big Short: Inside the Doomsday Machine a lot better for an inside look at how the mess got started and how it played out. For obvious reasons, the guys who made a killing betting against the real estate market could be candid with Lewis in a way the guys who lost billions of their investors' money never will be.

Sunday, October 23, 2011

Found this Glenn Greenwald article from a couple years ago about the root of the Tea Party anger and how it was misdirected towards minorities instead of the truly rich and powerful rigging the system. He ties it into the anger misdirected towards Clinton by Gingrich's Contract with America crowd.

Just as was true for the 1994 crime bill, the right-wing fury over health care reform is motivated by the fear that middle-class Americans will have their money taken away by Obama while — all together now, euphemistically — “having someone else benefit.”  And this “someone else” are, as always, the poor minorities and other undeserving deadbeats who, in right-wing lore, somehow (despite their sorry state) exert immensely powerful influence over the U.S. Government and are thus the beneficiaries of endless, undeserved largesse:  people too lazy to work, illegal immigrants, those living below the poverty line.....

 .....The premise of these citizen protests is not wrong:  Washington politicians are in thrall to special interests and are, in essence, corruptly stealing the country’s economic security in order to provide increasing benefits to a small and undeserving minority.  But the “minority” here isn’t what Fox News means by that term, but is the tiny sliver of corporate power which literally writes our laws and, in every case, ends up benefiting.