Filed under: Emergency, Failure, Government, Politics, Predictions, Preparedness, Society
Forget what I said two weeks ago – we’re now up to $7.7 Trillion:
Nov. 24 (Bloomberg) — The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago.
The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.
That comes out to something like $24,000 from every man, woman, and child in the country.
Wave bye-bye to your money.
Jim Downey
(Cross posted to UTI.)
Filed under: Emergency, Failure, General Musings, Government, Politics, Predictions, Preparedness, Society
I have a friend who complains that when he goes to check his usual blogs on Monday mornings, he has to brace himself about the bad economic news I’ve written about on Sunday. I hadn’t really realized that I had this weekly schedule, but what the hell. In that spirit, if you want another insight into just how f*cked-up the Wall Street financial crisis really is, spend some time with a long piece by Michael Lewis, author of Liar’s Poker. Here’s an excerpt from The End:
To this day, the willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grownups remains a mystery to me. I was 24 years old, with no experience of, or particular interest in, guessing which stocks and bonds would rise and which would fall. The essential function of Wall Street is to allocate capital—to decide who should get it and who should not. Believe me when I tell you that I hadn’t the first clue.
I’d never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous—which is one of the reasons the money was so easy to walk away from. I figured the situation was unsustainable. Sooner rather than later, someone was going to identify me, along with a lot of people more or less like me, as a fraud. Sooner rather than later, there would come a Great Reckoning when Wall Street would wake up and hundreds if not thousands of young people like me, who had no business making huge bets with other people’s money, would be expelled from finance.
He’s talking about his experience on Wall Street over 20 years ago.
It’s long. It’s fairly dense in places. But it does a phenomenal job of explaining how we got to the point we have, and how the situation is actually much more grim than most people realize.
OK, I’ll try and post a nice cheery travelogue later.
Jim Downey
Filed under: Emergency, Failure, General Musings, Government, Politics, Predictions, Preparedness, Society
Why, yes I did!
OK, this is basically S&L Crisis, Part II: Revenge of the Greedoids. You, and me, and every other US taxpayer are now on the hook for trillions of dollars of bailout money. Why? Deregulation and unwise real estate lending.
That was Sept. 7. And someone in the comments at UTI called me on it, saying that I was grossly overstating the case.
$2 Trillion
Total Fed lending topped $2 trillion for the first time last week and has risen by 140 percent, or $1.172 trillion, in the seven weeks since Fed governors relaxed the collateral standards on Sept. 14. The difference includes a $788 billion increase in loans to banks through the Fed and $474 billion in other lending, mostly through the central bank’s purchase of Fannie Mae and Freddie Mac bonds.
OK, I’m not just posting this because I want to say “I told you so.” Rather, take a look at this opening passage from a long piece in today’s Washington Post:
The financial world was fixated on Capitol Hill as Congress battled over the Bush administration’s request for a $700 billion bailout of the banking industry. In the midst of this late-September drama, the Treasury Department issued a five-sentence notice that attracted almost no public attention.
But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion.
The sweeping change to two decades of tax policy escaped the notice of lawmakers for several days, as they remained consumed with the controversial bailout bill. When they found out, some legislators were furious. Some congressional staff members have privately concluded that the notice was illegal. But they have worried that saying so publicly could unravel several recent bank mergers made possible by the change and send the economy into an even deeper tailspin.
“Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no,” said George K. Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartisan congressional authority on taxes. “They basically repealed a 22-year-old law that Congress passed as a backdoor way of providing aid to banks.”
OK, it’s a long piece, so let me summarize: This provision of the tax law limited tax shelters which would arise during a merger of large banks. For over two decades conservative economists and lobbyists for the banks wanted to repeal this law, which would make mergers more attractive (and thereby push consolidation of the banking/financial industry). But Congress – even a number of Republican stalwarts such as Sen. Chuck Grassley of Iowa – refused to budge on this. So, under cover of the financial crisis, Sec. Paulson just got rid of it by fiat – had it murdered quietly in the night. The result was to make a number of the mergers which occurred in September and October more likely, because the tax liabilities for the resulting larger banks would be much smaller.
This may have actually been a good move in terms of helping to save the financial industry, but it was very bad governance. And that gets me to the point of this post: when I said that the US taxpayer was on the hook for trillions of dollars of our tax money, I was saying so because I understood all too well the prevailing attitude of the Bush administration: “Ignore the law. Trust us, we know what is best. And yes, you will pay for it, whether you like it or not.”
When we have seen the actions and behaviour of the Bush administration in action for almost 8 years, it was fairly easy to conclude that they would use the panic in the financial markets to do just whatever the hell they wanted, and that the initial sums being talked about were likely just the tip of the spear about to skewer the American taxpayer. As I said, these actions may actually have been the right ones – when you come across a car crash, you don’t worry about breaking into someone’s vehicle, you just get the people away from the burning car. But given the ineptitude and crass violation of law demonstrated by the current administration, it was also fairly easy to predict that even if they got through the crisis there would be all kinds of extraneous extra-legal stuff happening to further their own goals and please their friends.
Damn, sometimes I just hate being right.
Jim Downey
(Cross posted to UTI.)
Filed under: 2nd Amendment, Civil Rights, Constitution, Government, Humor, Preparedness, RKBA, Society, Terrorism
Couple of weeks ago I got my notice from the state that it was time to renew my CCW permit. The whole process was fairly straight forward: go to the sheriff’s office, hand over my driver’s license and other ID, have them renew the paperwork on their end (checking to make sure I hadn’t done anything which would warrant losing my permit); then over to the Driver’s License center for a new ID.
I use a non-driver’s ID for my CCW permit. It costs me an extra couple of bucks to have a separate ID, but that way if I have to hand over my DL to someone, they don’t know that I have a permit to carry. It’s not an issue for the police, should I get pulled over or something, since the CCW info is tied into the driver’s license database. And this way, I always have a second photo ID.
So, I got to the Driver’s License center. Light crowd, and it only took me a minute to get to a clerk. Who took my paperwork, pulled up the info on her computer, and said that since none of my information had changed, the simple thing to do was just to issue a renewal with the updated CCW expiration date. Cool.
Then she asked if I had a birth certificate or passport.
Yeah, the Real ID Act.
Now, think about this for a moment. I was getting a renewal of my CCW permit. Said permit requires initially a fairly thorough background check by the State Highway Patrol, along with plenty of ID and documentation about competency. The renewal paperwork had to be processed by the local sheriff’s office, and then an additional form issued requiring me to get the new ID endorsement within a week. Nothing had changed in my file since the original ID was issued three years ago – all they were going to do was just change the date of the CCW expiration. And yet they did not trust their own system to confirm that I was who I was.
Yeah, I had my passport with me. I knew not to underestimate the stupidity of the bureaucracy. I handed it over, and the clerk scanned it for just a moment before pushing the final key on her computer that spat out my new ID. But boy, I’m sure I’d have been in trouble had I not brought it.
Jim Downey
(Cross posted to UTI.)
Filed under: Blade Runner, BoingBoing, Bruce Schneier, Civil Rights, Constitution, Cory Doctorow, Emergency, Expert systems, General Musings, Government, Guns, movies, Philip K. Dick, Politics, Predictions, Preparedness, Privacy, Ridley Scott, Science, Science Fiction, Society, tech, Terrorism, Violence
So, according to FOX News, our friends at the Department of Homeland Security will soon have a new trick up their sleeve: MALINTENT.
Homeland Security Detects Terrorist Threats by Reading Your Mind
Baggage searches are SOOOOOO early-21st century. Homeland Security is now testing the next generation of security screening — a body scanner that can read your mind.Most preventive screening looks for explosives or metals that pose a threat. But a new system called MALINTENT turns the old school approach on its head. This Orwellian-sounding machine detects the person — not the device — set to wreak havoc and terror.
MALINTENT, the brainchild of the cutting-edge Human Factors division in Homeland Security’s directorate for Science and Technology, searches your body for non-verbal cues that predict whether you mean harm to your fellow passengers.
I’m . . . sceptical. Let me put it like this: if this thing actually, dependably, reliably works the way they tout it in the article (go read the whole thing, even if it is from FOX), then the TSA would be perfectly fine with allowing me to carry a gun onto a plane. After all, I have a legitimate CCW permit, have been vetted by a background check and accuracy test, have had the permit for three years, and have never demonstrated the slightest inclination to use my weapon inappropriately. If I could pass their MALINTENT scanners as well, they should be completely willing to let me (and anyone else who had a similar background and permit) carry a weapon on board.
Just how likely do you think that is?
Right. Because this sort of technology does not, will not, demonstrate reliability to the degree they claim. There will be far too many “false positives”, as there always are with any kind of lie detector. That’s why multiple questions are asked when a lie detector is used, and even then many jurisdictions do not allow the results of a lie detector to be admitted into courts of law.
Furthermore, the risk of a “false negative” would be far too high. Someone who was trained/drugged/unaware/elated with being a terrorist and slipped by the scanners would still be a threat. As Bruce Schneier just posted about Two Classes of Airport Contraband:
This is why articles about how screeners don’t catch every — or even a majority — of guns and bombs that go through the checkpoints don’t bother me. The screeners don’t have to be perfect; they just have to be good enough. No terrorist is going to base his plot on getting a gun through airport security if there’s decent chance of getting caught, because the consequences of getting caught are too great.
Contrast that with a terrorist plot that requires a 12-ounce bottle of liquid. There’s no evidence that the London liquid bombers actually had a workable plot, but assume for the moment they did. If some copycat terrorists try to bring their liquid bomb through airport security and the screeners catch them — like they caught me with my bottle of pasta sauce — the terrorists can simply try again. They can try again and again. They can keep trying until they succeed. Because there are no consequences to trying and failing, the screeners have to be 100 percent effective. Even if they slip up one in a hundred times, the plot can succeed.
OK, so then why do it? Why introduce these scanners at all? Why intrude on the privacy of people wanting to get on an airplane?
Control. As I noted earlier this year, about the news that the US military was deploying hand-held ‘lie detectors’ for use in Iraq:
The device is being tested by the military. They just don’t know it. And once it is in use, some version of the technology will be adapted for more generalized police use. Just consider how it will be promoted to the law enforcement community: as a way of screening suspects. Then, as a way of finding suspects. Then, as a way of checking anyone who wants access to some critical facility. Then, as a way of checking anyone who wants access to an airplane, train, or bus.
Just how long do you think it will be before you have to pass a test by one of these types of devices in your day-to-day life? I give it maybe ten years. But I worry that I am an optimist.
An optimist, indeed. Because here’s another bit from the FOXNews article:
And because FAST is a mobile screening laboratory, it could be set up at entrances to stadiums, malls and in airports, making it ever more difficult for terrorists to live and work among us.
This is about scanning the public, making people *afraid*. Afraid not just of being a terrorist, but of being thought to be a terrorist by others, of being an outsider. Of being a critic of the government in power. The first step is to get you afraid of terrorists, because then they could use that fear, and build on it, to slowly, methodically, destroy your privacy. Sure, the DHS claims that they will not keep the information gathered from such scanners. And you’re a fool if you think you can trust that.
Jim Downey
Via BoingBoing. Cross posted to UTI.
Filed under: Emergency, Failure, Government, Predictions, Preparedness, Society
I’m not real big on conspiracies. I don’t think that the US government was behind the 9-11 attacks, or that the UN has an agreement with extra-terrestrials to reveal their presence and influence in our world in 2017. While the Warren Commission had problems, I don’t think that Oliver Stone was right about the JFK assassination.
But maybe – just maybe – the International Banking Conspiracy nuts have a point. I’ve never really thought so, despite the growth in power and scope of multinational corporations, the increasing symbiosis between politics and industry, et cetera. I just figured that normal political & economic forces were at work.
But the Big Bailout Debacle(tm) has me wondering. From the AP:
US to ‘press’ countries to forge financial bailouts: Paulson
WASHINGTON (AFP) – The United States will press other countries to forge bailout plans for financial institutions where needed, US Treasury Secretary Henry Paulson said Sunday.
Paulson said the Treasury’s proposal to Congress for authority to spend 700 billion dollars to buy toxic mortgage-related assets from financial institution could serve as a blueprint for foreign authorities facing similar problems.
* * *
Asked whether the plan provides for government purchases of tainted assets owned by foreign institutions, Paulson said that would occur as long as they have operations in the US.
“Obviously, we’d want to buy from financial institutions that are employing people, and are an important part of our economy. Because to the American people, if an institution is doing business here is clogged, and can’t perform the role they need to do, it’s a distinction without a difference — whether it’s a foreign or a US owned.”
“Remember, our system is a global one,” he said.
But don’t worry, he feels really bad about the whole thing. No, seriously:
Paulson said that “it pains me tremendously to have the American taxpayer put in this position but it is better than the alternative.”
Yeah, right now the thought of some vast, shadowy, international conspiracy that actually knows WTF it is doing being behind all of this is actually kind of comforting.
Jim Downey
(Cross posted to UTI.)
Filed under: Emergency, Failure, General Musings, Government, Politics, Predictions, Preparedness, Society
I wanted to follow up this post with a note about what has happened in the two weeks since. Particularly over on UTI there was some discussion about my assessment of the true scope of the situation being wildly overblown:
Trillions? Really? Do you have a source for this prediction other than “I have a degree in economics”? You’re predicting that 10% or more of these loans will go bad, or that interest rates on these mortgage backed securities will go up after the government starts guaranteeing them. Both of these outcomes seem unlikely.
Well, guess where we are just two weeks later:
WASHINGTON – The Bush administration is asking Congress to let the government buy $700 billion in toxic mortgages in the largest financial bailout since the Great Depression, according to a draft of the plan obtained Saturday by The Associated Press.
The plan would give the government broad power to buy the bad debt of any U.S. financial institution for the next two years. It would raise the statutory limit on the national debt from $10.6 trillion to $11.3 trillion to make room for the massive rescue. The proposal does not specify what the government would get in return from financial companies for the federal assistance.
And:
Nearly one-in-10 American mortgages is delinquent or in foreclosure. The government would be buying debt backstopped by the U.S. home values that have been falling in value for eight consecutive quarters, according to the S&P Case-Shiller U.S. Home Price Index.
And there is still more to come.
9/21EDIT TO ADD: for an excellent summation of how we got to where we are, how bad it really is, and who is primarily responsible, take a look at this post on Daily Kos.
Jim Downey
(Cross posted to UTI.)
Filed under: Alzheimer's, Health, Hospice, Preparedness, Sleep, Survival
I mentioned in a comment on UTI yesterday that I had a doctor’s appointment, and expected to find there that I had a respiratory infection that needed treatment. Well, I did, and I do, and now I’ve started a 10-day regimen of antibiotics.
But that’s not the reason why I made the appointment two weeks ago.
* * * * * * *
Almost a year ago I wrote a very raw and painful post titled “Beats having a heart attack.” Here’s the crucial passage:
And as I stood there at the sink, washing the dishes, thinking favorably on the option of having a heart attack, it sunk in that I was done. I mean, I’d been considering that a heart attack might be the best solution to my problems. Yeah, a heart attack. Hell, at 49, I’d probably survive it. It’d come as no surprise to anyone, given the kind of physiological and psychological stress I’m under. No one could blame me for no longer being a care-provider for someone with Alzheimer’s.
Well, I didn’t have a heart attack. And I wasn’t done. We made it through six months of hospice care for Martha Sr – easily the most demanding period of care providing. But that doesn’t mean that there wasn’t a cost to me, physically.
* * * * * * *
I sat in the exam room, waiting to meet the new doctor. My face was flushed, my heart racing. I was having a low-grade anxiety attack.
No big deal, right? Lots of people get nervous around doctors.
But I don’t. Hell, I put myself through grad school working in an outpatient surgery unit. Because it was a remote location far from the central supply facility for the hospital, they had established a large sterile storage area adjacent to the 8 surgical theatres. For five years I manned that storage area, keeping the surgical teams supplied. And I was in an out of operations constantly, bringing necessary sterile supplies to the surgical teams. Even my designated break room was shared with the surgical staff. In that five years I got to see and know a lot of doctors in almost every imaginable medical situation, as well as personally. I’ve never been nervous around doctors since.
The doctor knocked and then came into the room. I was sitting on the exam table, still fully clothed. I hadn’t been told to undress or anything by the aide who had parked me there half an hour earlier, so there was no modesty issue connected with my anxiety.
“Hi, I’m Dr —.”
“Jim Downey. Pleased to meet you.”
She held out a hand, relaxed. “Likewise. What can we help you with today?”
I shook her hand, then passed to her a book I had been browsing through. One I had seen on the shelf there in the exam room. “This was my life for the last 5 years.”
* * * * * * *
I’ve talked about the stress of care-giving before, and how I am now in a detox period from a prolonged norepinephrine saturation. As I wrote in June:
The problem is, those stress hormones come with a price – they exact a toll on the body. For most people, occasional jolts of this stuff isn’t really dangerous, but for someone with a heart condition or an aneurysm waiting blow, such an event can kill. That’s why you see those warning signs on roller coasters.
And consider what happens to someone who slowly ramps up their stress hormone levels over a prolonged period. That’s me. My formerly excellent blood pressure and heart rate is now scary bad, and has been for a while. I’m lucky that I started this in good condition – but think back to this episode last year, and you’ll see what kind of effect the excessive stress hormone levels had. In the final year of care giving, my system became saturated with stress hormones – my ‘fight or flight’ reflex changed from being related to a sudden threat to being an ongoing condition. I adapted.
That was why I made the doctor’s appointment. And the reason I was nervous was because I was afraid of what the cost I had imposed on my body actually was.
* * * * * * *
Dr — took the book, looked at it. She nodded, then looked at me. “Tell me about it.”
We talked.
We talked about the care-giving, when it ended, what I had tried to do to care for myself during and since. She looked over my records, asked a few questions, did a few of the typical exam things doctors do to confirm their innate understanding.
“Well, let’s treat this respiratory infection.” She paused, looked at me. “You know, your blood pressure is quite high.”
Actually, my blood pressure was scary bad. When the aide took it earlier, she was startled by how high it was. Let’s put it this way – it’s in the range where if it were just a bit higher, hospitalization would be indicated in most cases. If I walked into an ER with that blood pressure, people would start rushing around.
“Yeah, I’m not surprised.” I told the doctor what I’ve said in those post cited above.
She nodded, realized that I knew what I was talking about. “How would you feel about starting a drug therapy to get it under control?”
“What did you have in mind?”
“Beta blocker.” She looked at me. “You may not need to be on it forever. The other things you are doing and recovery from the care providing might be sufficient – later. But for now, I think it would be wise.”
It was the right call. Beta blockers act specifically to counter the effects of stress hormones, especially norepinephrine.
“Sure. Let’s do it.”
* * * * * * *
So, that’s part of the cost of care-providing, documented by medical authority. It’s too early to say whether this drug therapy will be sufficient. I do still need to shed weight (though I’m now only about 20 pounds over what was my ‘normal’ weight about ten years ago), and keep an eye on diet and exercise, control stress, get plenty of sleep. And there’s no way to say how much long-term damage I did to my system by my period of high blood pressure (which increases the risk of stroke, dementia, heart disease and kidney damage). There’s no indication yet that there’s been any long-term damage, but . . .
I’m still glad I did it.
Jim Downey
Filed under: Bruce Schneier, Emergency, Failure, Government, Preparedness, Society, Terrorism, Uncategorized
That’s the closing line of yesterday’s post by Bruce Schneier. Of course, Schneier has thought this for a long time. But what is he going on about? This:
Are the fire hydrants in your neighborhood turned on?
ROCKWALL COUNTY – A North Texas homeowner wants you to learn from his family’s tragedy.
The fire hydrants in his neighborhood are turned off.
Now, why are the hydrants turned off?
You guessed it: terrorism.
More from the news story:
Clay Hodges is the general manager of Cash Special Utility District.
He explains all the district’s hydrants, including those in Alexander Ranch, have had their water turned off since just after 9/11 – something a trade association spokesman tells us is common practice for rural systems.
“These hydrants need to be cut off in a way to prevent vandalism or any kind of terrorist activity, including something in the water lines,” Hodges said.
But Hodges says fire departments know, or should have known, the water valves can be turned back on with a tool.
Insane. Just bloody insane. As Schneier says:
One, fires are much more common than terrorism — keeping fire hydrants on makes much more sense than turning them off. Two, what sort of terrorism is possible using working fire hydrants? Three, if the water valves can be “turned back on with a tool,” how does turning them off prevent fire-hydrant-related terrorism?
Yes, this is insane.
Jim Downey
(Cross posted to UTI.)
Communion Of Dreams 