October 31, 2011, 11:46 am
Filed under: Uncategorized

I think I’m afraid of people whose ‘favorite holiday is Halloween’.

It’s okay to like Halloween and all, but there’s a certain class of person which just loves it as against all other holidays, and gets all into it, because it’s ‘the one time of the year when’ [something weird, usually].

These people creep me out. Which, in a way, is appropriate, I guess.

Don’t Be Clear
October 30, 2011, 9:47 am
Filed under: Uncategorized

Rule of thumb: when someone in public life says ‘I want to be clear’ or ‘let me be clear’ about something, chances are I will find whatever he’s about to say to be incorrect, unsupported, or downright offensive.

If you want me to take you seriously, don’t ‘be clear’. Be right.

Dear Texas Rangers Fans
October 29, 2011, 12:33 pm
Filed under: Uncategorized

Welcome to Game 6 Hell. Don’t worry, maybe things will turn around in like 8 years when you assemble a team of brilliant young starting pitchers + almost zero offense that magically goes all the way.


San Francisco Giants Fans

On Buying And Selling
October 25, 2011, 11:00 pm
Filed under: Uncategorized

Some basics on buying and selling for folks still confusedly angry about that Goldman/Abacus deal. I’m going to go as slow as possible:

  • In finance/investing, when you buy a thing, you have gone long that thing. Long means, if the thing does well, you do well, and vice versa.
  • When you buy a thing, it stands to reason that someone sold it to you. I mean, you can’t very well have bought it if no one sold it to you, now can you?
  • So we agree that somewhere out there is a person who sold the thing you just bought. Well. Just as you got long(er) when you bought the thing, the person that sold it to you got short(er). Automatically. See how that works?
  • Short means: if the thing does well, they do badly (they might think: golly, should have kept it!), but if it does badly, they do well (they might think: thank goodness I sold it before it went down!).
  • In other words: selling is shorting. Anyone who sells you anything, is going short that thing, by definition. It’s the same thing.
  • All of the preceding is true whether we are talking about selling securities one already owns, naked shorting of securities one doesn’t own, or shorting via derivatives created out of thin air. In every such sale, the seller (of risk) gets shorter, and the buyer (of risk) gets longer, than they were at the start of the day. That’s what buying/selling means and, equivalently/interchangeably, that’s what going long/short means. There is simply no such thing as buying a financial instrument without making somebody somewhere shorter. If you bought it, someone else got shorter the same thing you just bought.

If you have read and absorbed the above, then you will understand how fundamentally stupid are criticisms such as, “But Goldman sold them something they were going short!” or “didn’t tell them someone was going short on the other side!” These complaints make about as much sense as complaining that a restaurant serving you an egg omelet “didn’t tell you” that eggs were used in the process. You should just kinda know from the fact that, at the end of the transaction, you ended up with an omelet, and because you’re not a moron. Are you?

10 Things I’ve Noticed About Non-Americans
October 25, 2011, 7:43 pm
Filed under: Uncategorized

A response to this list of “10 things I’ve noticed about Americans”, seen via Andrea Harris:

  • They hate ice. It could be 105 degrees outside and their Coke could be served out of a lukewarm plastic 2L bottle that spent the last 3 hours in the back seat of a car parked in the Walmart parking lot. Nope. Don’t want ice. Don’t you DARE put ice in their drink. To be fair, some non-Americans are from extremely poor, backward countries (like France) and so perhaps being pathologically conscious the amount-of-fluid they are getting for their 75 cents, and zealously maximizing its volume (i.e. becoming frantic at the thought of some of it being displaced by frozen water), is just what comes naturally to them, given their deprived upbringing, etc. I shouldn’t judge.
  • They think all Americans have guns and that it’s “easy” to get guns in America, despite never having actually seen an actual American with a gun. The principle at work here is, essentially, extrapolation from TV and movies. Just look how easy it was for Magnum P.I. to get a gun, for example. He had it right there in the opening credits.
  • They are fascinated by Americans, and love to learn about them, talk about them, and collect facts about them. There is no end to the list of things that non-Americans could rattle off about Americans.
  • hmm
  • (crickets)
  • Sorry I’m gonna have to cut the list short. Couldn’t think of anything else I’ve noticed about non-Americans. I’m sure there’s something. Maybe I should have spent more time researching this post.

What Europe Is Discussing
October 25, 2011, 7:17 pm
Filed under: Uncategorized

They are haggling over how much money to pretend to have.

-excerpted from Sonic Charmer’s Early 21st-Century Emails to Pastorius, Cambridge University Press, 2057

October 24, 2011, 11:34 pm
Filed under: Uncategorized

Like the rest of you, I wake up daily with bated breath in anticipation of whether Europe will Technocratically Solve Its Financial Problems by sneaking through just the right clever accounting trick in a Summit With Important European People. Each and every day, the headlines coming in over the tape tell the topsy-turvy, roller-coaster story of the accounting trick. Can Merkel trick the German Parliament into accepting the accounting trick? Does Sarkozy want the same accounting trick as Merkel? What about European banks, does the accounting trick they need correspond to the accounting trick that the ECB needs? Can they construct the accounting trick so that it doesn’t trigger CDS payouts? Like all technocratic endeavors, it’s all so exciting and exhilirating to follow!

They do seem to be taking a long time coming to some sort of underhanded back-room agreement as to which accounting trick they’re going to sneak past the productive portion of the European public however, which is why I thought I’d chime in with my two cents as to the ideal accounting trick. And having thunk on it for the last 45 minutes and made several diagrams, I think I’ve got it, in an easy 2-step process:

  1. The EFSF (European Financial Stability Fund) guarantees all of Greece’s debts, and those of all other European countries, in arbitrary size, for unlimited time.
  2. European countries jointly guarantee all the obligations of the EFSF in arbitrary size, for unlimited time.

Problem solved, I think. Someone call Merkel.

The Lesson Of Libya
October 23, 2011, 4:18 pm
Filed under: Uncategorized

Conservative hawks and anti-Obama commentators who feel ambivalent about the Libya outcome (such as myself) need to ask themselves a question:

All-in, which experience was better for the U.S.: Libya, or Iraq?

The answer seems pretty obvious to me.

In terms of importance end outcomes, they are roughly the same: In each case the main reason to support the warfare – with apologies to ‘neocons’ – was that the regime was a declared enemy of the U.S. who had shed U.S. blood in the past. In each case, the autocrat was ousted and lynched. In each case, the regime was atomized and replaced by a new one of dubious allegiance, competence, and corruption, under which tribal vendettas and a fundamental lack of security & rule of law are likely to be the norm. And now in each case, the average American no longer knows the name of the ‘leader’ of either country, nor (thankfully!) has any reason to for the foreseeable future. Both endeavors left a taint of suspect motives and legality on the part of those already inclined to doubt such things. And now, we hope, life goes on (for us).

The differences seem to boil down to various costs: Iraq took a lot longer, cost a lot more, and got tens of thousands of U.S. soldiers killed in the process. This is something of an unfair comparison (after all, unlike Iraq, the Libya ouster started with an actual uprising and evidently it was sufficient for us to just help it by bombing from the air), but leaving that aside, if we could replay Iraq but only making it more Libya-like, I know I’d take that deal in a heartbeat.

What is the lesson? That future Presidents should follow the lead of President Obama in their geopolitical strategy and warfare? That seems like a strange, bitter pill to swallow, almost unbelievable. But if that’s not the lesson of Libya, I don’t know what is, so I welcome being convinced otherwise.

October 23, 2011, 10:45 am
Filed under: Uncategorized

Sheila O’Malley has been writing about Elvis. Impossible to excerpt, summarize, or recommend highly enough. Just go there and start reading.

President Obama Did Not End “The Iraq War”
October 23, 2011, 10:15 am
Filed under: Uncategorized

Notwithstanding the previous post, I would like to point out that the removal of our garrison there will not end “The Iraq War”, because The Iraq War actually ended in late 2003. I wish I understood why people have continued to refer to the subsequent occupation of and garrison in Iraq as “The Iraq War” but at least now maybe people will stop.

Iraq, For the Record
October 22, 2011, 5:45 pm
Filed under: Uncategorized

I am glad that U.S. soldiers will be removed from Iraq (assuming we can believe President Obama’s announcement to that effect), and applaud the decision, which I have been advocating for some time. Now let us remove our garrison from Afghanistan too and cease all related expenditures.

Presidential Campaigns Are Not Referenda On Everything
October 22, 2011, 10:31 am
Filed under: Uncategorized

Everyone knows that Herman Cain, in the process of campaigning for President, has proposed a “9-9-9″ tax system. Everyone also knows that if you like the idea of such a system in all its particulars, you’re ok to vote for Herman Cain, but if you see anything wrong with this system, you can’t vote for Herman Cain. After all, a vote for Herman Cain is a vote for “9-9-9″!

This strikes me as an extremely dumb and annoying feature of Presidential campaigns: people treat them as referenda on whatever proposal the candidates make, about whatever.

Some basic Civics 101: U.S. Presidents do not dictate the tax system in the U.S. That is not part of the job description or powers. If Herman Cain assumes office in January 2013, it is simply not the case that the “9-9-9″ tax system triggers itself into effect automatically, or at the stroke of his pen. Yet, people treat his candidacy and campaign as if precisely that would happen.

If you just sit down to make a realistic assessment of “9-9-9″ in the context of modern U.S. political life you will fairly quickly and inescapably come to the conclusion that it is DOA. Congress would never vote such a thing through as-is. The permanent bureaucracy would not allow it and it is too radical a change to simply ‘implement’. Or at the very least, a massive political shift would have to occur to prep the way, over the course of many years, before it was even thinkable.

So, no, a vote for Herman Cain is not a vote for “9-9-9″. It is a vote for a guy to whom “9-9-9″ seems like a good idea. That is a very different thing, because in reality, Congress is just not going to send the President a “9-9-9″ bill in January 2013. However, a President will be sent this or that tax revision or change, and maybe you think Cain’s tax ideas give you some clue as to which directions he’ll accept and which he’ll veto. Or not. But this has nothing to do with whether you like “9-9-9″ in particular. Again: “9-9-9″ is not on the table and not destined to be anytime in the near future.

This defect of President campaigns shows up when it comes to other issues as well. Just to give a well-worn example, allow me to remind you that Whether Or Not Abortions Are Legal is not a facet of American life that a U.S. President dictates.

October 19, 2011, 12:00 am
Filed under: Uncategorized

In economic news of the day:

The credit markets had been going wider, and then some headline appeared on Bloomberg saying that France and Germany were going to agree to a 2-trillion-Euro something-or-other vis-a-vis the EFSF. (I didn’t figure out what the story meant but I’m guessing their plan is just, instead of recapitalizing their banks directly, which would inflate currency and harm their credit ratings, what they were planning to do instead was to launder the exact same liability through the EFSF – or in other words, become swap counterparties to the EFSF, which is a giant CDO – and hope no one noticed the new giant CDO on their balance sheets.) Anyway, it doesn’t really matter what the details are. What matters is that traders saw ‘2 trillion’ on their screens and the markets rallied considerably within 10 minutes. Nor did it matter about an hour or two later when cold water was thrown on the whole ‘2 trillion’ story which, in the end, doesn’t seem to have really meant anything at all. Markets finished up.

The other thing that happened came at the end of the day, when Apple reported earnings and missed. ‘Missed’, in this context, means that the earnings-per-share number they announced was smaller than some other number (the estimate/forecast/prediction) that traders had seen on their screens. Where did this other number come from? What is it based on? Is it valid? Nobody knows and nobody cares. The estimate was X but the announced EPS was Y<X. So traders said sell and AAPL stock declined.

This is closely related to the weekly and monthly rituals when economic data (e.g., non-farm payrolls) are announced. Say the non-farm payrolls estimate was 260k and it turns out to be 230k. People will groan and the market will go down. Say the estimate was 210k and it turns out to be 230k. People will cheer and the market will go up. Where does this estimate come from? No one knows. It's the estimate. Actual less than estimate = bad.

You know maybe the OWS people have it correct after all, markets just don't work.

Poor “Homeowners” II
October 18, 2011, 9:27 pm
Filed under: Uncategorized

Matt Taibbi in Rolling Stone complains,

These gigantic institutions [too-big-to-fail banks] have put millions of ordinary people out of their homes thanks to a massive fraud scheme for which they were not punished, owing to their enormous influence with government and their capture of the regulators.

Now let’s take this slowly. Suppose I ask the following innocent question:

How on earth could a bank ‘put’ a person out of his home? How, exactly, could that happen?

Not every institution in every situation can ‘put’ a person out of his home, after all. Wal-Mart can’t ‘put’ you out of your home. Major League Baseball can’t ‘put’ you out of your home. These things are just not possible. When you think about it, an institution ‘putting’ someone out of his home is a rare thing, only possible under a certain very well-defined and specific set of conditions.

But Taibbi is, of course, correct that banks have put people out of their homes. So how then? How were they able to do that?

Could it be…because the bank was the one who paid for the damn home in the first place?

Why yes it could. In fact, that’s pretty much the only circumstance under which a bank, or anyone else, can put you out of your home as Taibbi describes.

So why does Taibbi skip that part and start the story in the middle? Why not, instead, relate the following chain of events:

  • The banks gave millions of individuals half a million dollars each (give or take) to use to move into nice big comfy houses.
  • The individuals lived in those houses for a while.
  • Later, for one reason or another they stopped making the payments they had promised to pay.
  • The banks tried to take the house back as collateral to sell and recoup some of their losses, and in some cases (say 12+ months later), succeeded.


Well, blown away by Taibbi’s impeccable logic and critique of banks’ behavior, once again I’m forced to agree that banks should not have done any of this. Most of these people should have been renting apartments in the first place.

Occupy Wall Street Is An Incipient Fascist Movement
October 18, 2011, 12:28 am
Filed under: Uncategorized

You heard it here first. Let’s run down some of the bullets.

  • Inchoate demands and lack of concrete proposals, justified by declaring that ideology and policies are less important than unity and the act itself of protesting.
  • Emphasis on ‘action’ and organization over reason, deliberation, open debate, democratic institutions.
  • Pedestalization of youth. Young voices (regardless of whether they have anything to say) must be heard, they can’t be wrong, their actions are self-justifying expressions of axiomatically-valid griefs.
  • Scapegoating of a hated subgroup, who don’t count as ‘real’ members of the nation, painted as parasites.
  • Everpresent undercurrent of appropriation; I want what I want because I want it, so give it to me.

All of the above are well documented in the videos we have all seen.

What is still (mostly) missing is the overt violence, the actual broken glass. But as explained below, I think that’s almost inevitable.

I guess there’s still the possibility though that this just peters out in the next three weeks, implodes out of its own pointlessness, the sheer boredom. Boredom and weather may indeed be our best hope against this incipient fascist movement. Ridicule certainly isn’t going to work, if it hasn’t worked already.

Poor “Homeowners”
October 17, 2011, 10:06 pm
Filed under: Uncategorized

I just thought I’d recap what is usually one of the main grievances cited against Wall Street, and indeed often mentioned as a prominent justification for Occupy Wall Street. The following is what seems to have happened to a lot of Americans who seem to be (as a result) highly P.O.’ed. Now, you’ll notice that the way I tell the story is not how you usually hear it.

But, I think it’s more accurate.

What May Have Happened To You, The Aggrieved, Downtrodden American “Homeowner” (1990s-present):

1. Some Chinese or German people used their savings to buy you a large, relatively-newly-constructed house. 4-5 bedrooms. 2-car garage. Nice yard. Granite countertops. Nice neighborhood. Nice schools. Sure, you chipped in a small portion of the purchase price (maybe), but it was mostly bought by the Chinese and/or Germans and given to you to live in with your family.

2. In return for having them buy you a house, you signed a contract. It promised to pay such-and-such interest on such-and-such schedule, and so forth.

3. Some time later, around 2007-2009, you decided to stop paying. Maybe you checked Zillow, decided you were ‘underwater’, got really depressed and convinced yourself there was ‘no point’ in continuing to pay. Or maybe you lost your job and became cash poor, genuinely unable to meet the payments laid out by the principal/interest schedule you’d agreed to. Maybe something in between.

4. You stayed in the house, not paying either mortgage or rent. But the bank has such a backlog of REOs that it hasn’t been able to kick you out yet.

5. Meanwhile, you got mad, AT THE BANK. For, like, bothering you about paying stuff, and not letting you not pay stuff (I guess). And now you go out and ‘occupy’ your nearest urban center, because well hey, the banks are so greedy and have wronged you so much. You know, by funneling money to you from other people, so as to buy you a house (step 1) that you would have never afforded on your own, but which you’ve been living in (step 4) ever since.

Evil banks for getting you a house! And poor you! Poor, poor you. The banks, the greedy people of the world, and everyone else have really wronged you. (The totally, supposedly, non-greedy person, who got a nice large new house to live in, one they couldn’t really afford.) I mean after all, all you wanted to do was to “buy” a house with other peoples’ money and not pay them back, with no consequences. You totally have the right to do that.


I do not own (or “own”) a house, and I keep up on my rent. But yes, you people with McMansions you “bought” who have stopped paying mortgages, go on complaining and whining and bitching and moaning about how tough you have it and how everyone else has wronged you with their greed. You’re really earning my sympathy.

Only A Matter Of Time
October 17, 2011, 9:47 pm
Filed under: Uncategorized

If you take note of the following:

Occupy Wall Street has been hanging out in that square for weeks now.

They still don’t have any concrete goals. They have not articulated any, they have no one they are addressing any goals to.

Hence, they are no closer to achieving anything than when they started, and are not getting any closer.

New York weather will not stay tolerable for much longer, meaning there will inevitably be natural attrition among their ranks. (You won’t see hippy moms bringing their babies out there to hang out and listen to folk songs.)

It’s only a short leap to the conclusion that:

Sensing a ticking clock on their self-perceived political momentum, some among them will get increasingly desperate/frustrated and turn violent.

Stay tuned.

The Ghost Of Tom Joad
October 16, 2011, 6:25 pm
Filed under: Uncategorized

You will probably have seen this video making the rounds:

One thing that’s clear is that this guy (and the girl holding the camera) is really mad. Not just mad, but upset. Now, I listened to (most of) his rant, and as far as I can tell, the main thing he could articulate being mad about is that there exist some people who own yachts.

If there’s a more grounded or concrete thing he was able to put forth for being so mad about, I couldn’t detect it.

If there is some gigantic hardship in his (or her) life, something harming the lives of these two people who were hanging out in safety in a square in New York making a video, something that was caused by someone else, some justifiable grievance, some grievance caused by someone who merited such anger from him, it is not apparent. He certainly did not articulate it.

A comment on the Youtube link suggests that he is a Columbia graduate student (UPDATE: with a “trust fund”…an honest-to-goodness, actual trust fund. Not making this up, just telling you what I read.)

Is this getting repetitive? Will it be redundant if I say I told you so?

Bolshoi Is Back: The People Of The Lie
October 16, 2011, 4:38 pm
Filed under: Uncategorized

A lot of commentators, even some who otherwise have criticisms of them, have praised the Occupy Wall Street movement for the (apparently hugely impressive to some minds) tactic of calling themselves “the 99%”.

Or, to put it another way, for lying.

Great lie!, they say. Their baldfaced lying is very strategically shrewd!, say all the ‘progressives’. You have to hand it to them for all the lying. Great idea to just come out and lie like that! You will be hard-pressed to find a newspaper whose Sunday edition editorials don’t contain effusive praise of the inherent genius represented by OWS’s clever lying.

I understand this praise full well. ‘Progressives’, after all, do love a good lie. What could be more noble than to lie about who you are and what you represent in the interest of the Greater Good? What I don’t understand is why no one (besides me) has pointed out the obvious fact that this “the 99%” lie isn’t original in the slightest. It traces back to Lenin & co. back when they decided to call themselves ‘Bolsheviks’ (implying ‘greater’ or majority) as against the Kerensky supporters who were supposedly ‘Mensheviks’ (‘lesser’/minority). This is the same exact type of lie, for the exact same sorts of craven reasons, that impresses exactly the same sorts of minds. They can’t even be original in their lying.

Which is not to say that this sort of lying can’t or won’t pay off. Lying has a long history of paying off in political disputes. Certain political factions are built almost entirely about lying about who they are, and what they want. The current occupant of the White House would be nowhere without it. And so it’s no surprise that these factions are well-represented at OWS. What is slightly more surprising is that they don’t seem to have thought of any new tricks in over ninety years.

On Agreement
October 16, 2011, 9:53 am
Filed under: Uncategorized

I was asked whether I agree with the Occupy Wall Street people.

Who knows?

Wouldn’t they have to be saying something coherent in order to agree (or, for that matter, disagree) with them?

I still don’t know what their point is, other than the implicit point that they have leisure time.


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