06/19/09 thoughts

Urban Survival...

Coping: Street Level Economics

Every so often I get some grand emails from folks out and about who have a great person-to-person look at the world which is often vastly different that what comes over corpgov teevee. Take this one from Iraq, just for instance:

"Jorge! Thought I’d use the Spanish version as I’m soon to relocate (long with 80% of my expat co-workers) to Costa Rica. If you recall, I was the one giving you the intel scene from Kuwait a time back, and have since November come back “Up North” to Iraq as the $$$ scene in Kuwait had pretty much flat lined when the economy took a big dump last fall. Big dump in that the majority of contracts weren’t being renewed, (individuals that is… the Corporations had the same amount of work, they just started doing the ‘more with less’ thing again and saving $$$ on personnel.) Thing is, once one is addicted to the 86K +/- tax free, it’s damned hard to go back to “Dilbert’s World” in the cubes, and especially harder seeing that there just ain’t no jobs out there for a former soldier to have.

Tinfoil moment makes me think that’s part of the reason we keep in wars left right and centre… the CorpGov can’t afford to unleash a quarter million heavily trained troops into the workforce… think what happened after Gulf One (1990) when Haich Dub the First riff’ed about 3 divisions back into civvies… I was one of them back then and spent two years almost dying to get back in uniform. Nowadays, the troops have BT-DT (been there done that) and most if not ALL of them have ‘trigger time’ and face time killing the enemy. Scary concept to try and close down the wars and get it into a “Dogs and Soldiers Keep Off The Grass” eh? Unlike the wars of times past, this ‘Columbine Generation’ doesn’t fear anyone in power, and are so well trained that it makes me wonder that if the Lefties in the Obama world realize that they HAVE to keep these kids busy, lest we see what you and Cliff have been charting vis-à-vis the revolution meme.

Otherwise, Iraq is no less dangerous than Detroit. Actually, I drive downtown in my unarmored Chevy regularly, unarmored myself and no weapon either. I wouldn’t in Detroit. Baghdad hosted its first tourist group in like 30 years a few months ago, and besides the occasional flare up of the retards who think it’s fun to shoot mortars at the FOBs, the amount of violence is negligible. This stated, it means I’ll probably have someone trying to nab me and cut my casaba off on YouTube but eh… realistically, its mellowed… and I speak this as a ‘homeboy’ as I’ve been here off and on since the end of 03, and if it wasn’t for the heat and lack of decent water, I’d stay longer.

My hopes however, is that we got to war with, oh say Turks and Caicos… or even Jamaica… I heard them Ire-Boys been giving Florida some eeeeevil looks… I say we invade, and I’ll help secure the crops…. Er… the beaches… yeah that’s it… Toke… er… Talk to you later!

Ah, some fine economic and political content to gnaw through here. First off, you're absolutely right about the Columbine generation now defending the country. A goodly number have figured out that the reason the Obama administration is still signing war spending measures (and the latest one is in process of being rubber-stamped) is that there's no way that any of the powers that be want a well-trained - let alone fearless group of Constitution defenders showing up. Why, that's about the worst nightmare that could come along.

The answer, is, as Orwell put it so well thirty-odd years back, is 'permanent war for permanent peace..." Except'in of course, there ain't no peace because no profit in that.

If you think the world is facing a pandemic of swine flu this fall (we are) and that when the second leg down of Depression Two begins, that will be the most serious threat to the nation ever, then think again.

I'd offer that the most serious threat to America is that people are starting to think and no matter how many wars, how much fluoride in the water, no many how many people Big Pharma can get addicted toi pain pills, no matter how many former soldiers will be put on 'can't own a gun list' because of 'combat stress', and no matter that within a year the free expression on the internet wi9ll disappear as a last-gasp attempt by the current ruling paradigm to buy self-preservation by tearing up the rights of free speech, there will still be a few folks who will 'get it'.

06/18/09 thoughts

An email from a friend

In light of Obama's recent statements on his intentions to expand and accelerate spending in order to accelerate recovery I felt the following quote was appropriate:

Insanity: doing the same thing over and over again and expecting different results.
Albert Einstein

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Urban Survival...

Memories of Monopoly

As I was contemplating my navel Wednesday, along with the fine print of the 'financial reform' proposals from the Obama administration, which seem to boil down to more government - and in particular more power for the Fed - I was struck by something: Why not bust up the Fed? Or at least bust up the problematic banks and paper-slinging outfits?

We already have a prototype for monopoly busting in America - in the break-up of AT&T - a move which arguably was a pretty good one, if you can remember at the back to 1974.

The country's present financial condition is indeed precarious, and as our predictive linguistics pals reassure us, they're about to get a whole order of magnitude worse when commercial real estate and Derivatives Crisis II show up in a month or three, so what's the structural solution to what ails us?

When I read about the trillions of dollars worth of bailouts, TARP'ing and so on, I keep coming back to the fundamental design pattern at the root of where we are: The whole notion of too big to fail.

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The engineering concept is well known and well documented: It's under "single point of failure". Look up SPOF and you'll find all kinds of good science on mean time between failures and so on.

You want the answer to the nation's financial crisis - both now and going forward? It's right there in Wikipedia...but too many of the so-called 'economists' who believe in Keynesian horse pooty and that inflation is somehow acceptable (e.g. trashing purchasing power to pay those who demand interest/rent on money) have never studied outside of their own inbred boxes. So here's the lesson...ready?

The strategy to prevent total system failure is

Reduced Complexity

Complex systems shall be designed according to principles decomposing complexity to the required level.

Redundancy

Redundant systems include a double instance for any critical component with an automatic and robust switch or handle to turn control over to the other well functioning unit (failover)

Diversity

Diversity design is a special redundancy concept that cares for the doubling of functionality in completely different design setups of components to decrease the probability that redundant components might fail both at the same time under identical conditions.

Transparency

Whatever systems design will deliver, long term reliability is based on transparent and comprehensive documentation.

Next time you hear about a company that is "too big to fail" - remember, there is an alternative to printing up a whole bushel basket of money and laying the debt involved off on our kids and grand kids: Simple bust up the "too big" operation into a series of smaller ones that are NOT too big to fail. And then stand back and let the market forces work things out as they will. Failure is both episodic and necessary...it's the humus on the forest floor of economics. Has everyone forgotten that?

Seemed to work for the regional Bell operating companies after the AT&T break-up, no?

It's like Harold Geneen - once CEO of ITT - said: "The only unforgivable sin in business is to run out of cash." We have a whole country right there, right now.

Absent a little new thinking (which is laughably absent) where we're going is horrifically clear...although the train coming down that track will be another month or three before it runs us over. That gives you just time to read "Hyperinflation: The story of 9 Failed Currencies".

What both the Fed and the White House seem to miss is that no matter how much Tarp & Talk goes on TV, where the rubber meets the road, credit card companies are still in the tightening mode, as this NY Times article points out.

You saw the latest May traffic stats out of the Port of Los Angeles? Imports down 18%.

Gee, here's a startling thought: No money, no room on the credit cards means no import demand. Radical, huh? When future history is written look for something that says "One of the dumbest moves was to cut credit card limits at exactly the moment people needed additional purchasing power to propel the country out of recession and to hang onto their homes."

We either break up banker cartels, or we write off America via hyperinflation. It's this latter course that's now baked in the cake seemingly.

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Why we're not applying established monopoly-busting as was applied to AT&T to these financial outfits that have America by the financial nuts is plain crazy. Here lately I'm becoming convinced that crazy, with a strong minor in denial psychology and complete ignorance of design patterns and interdisciplinary studies, is a mandatory prerequisite to holding office or being a mainstream sell-out economist.

06/17/09 thoughts

Good thought...

The New Boom-Bust Cycle (Slate - The Net)

By Daniel Gross

If you're waiting on housing and finance to get us out of the mess they caused, then you better pull up a comfortable chair and a bag of popcorn, because it's going to be a long wait. Just as regulators always fight the last battle--regulating accounting after the dot-com meltdown, promising to regulate derivatives now--analysts always look to the last boom to cause the next one. The new reality is that the sector that dragged the economy down is never the one to lead the recovery. (...)

Go to the source

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Another good article...

The recession tracks the Great Depression (Financial Times - U.K.)

By Martin Wolf

Green shoots are bursting out. Or so we are told. But before concluding that the recession will soon be over, we must ask what history tells us. It is one of the guides we have to our present predicament. Fortunately, we do have the data. Unfortunately, the story they tell is an unhappy one.(...)

Go to the source

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Urban Survival...

At some point, I rather expect a series of mega disasters. Why? The crooks who orchestrate things behind the scenes in the financial markets will need something BIG to cover their crimes and put the public off their scent.

What they don't want leaking out is the notion that printing up paper with nothing more than ink and a promise doesn't work very well as a long-term store of value. Which is why a steak dinner in the days before the Federal Reserve cost $1 dollar. today, it's 20-times that which means the purchasing power of money has been watered down twenty-times-over since 1913. Well, more actually, but it's all hidden in plain sight behind the big lie "Prices Go Up!"

Truth is that "Money is being watered down." Irwin Allen couldn't cook up a bigger disaster movie. titles like "The Poseidon Derivative", or "Towering Bankferno" rush to mind.