Author Les Leopold sums it up nicely, including the fact that TARP is only the tip of iceberg regarding taxpayer money being poured into Wall Street coffers. Merry Christmas to the big Wall Street banks, who work hard to . . . someone please remind me how these big banks to make the world a better place--what do they do for the economy or for productivity? Please tell me something more convincing than free market fundamentalism.
For those of you who read this shocker that the worldwide oil reserves are dwindling much faster than official reports have been coyly indicating, don't get too cozy with the concept that we can always move on over to coal. At least that is the opinion of Richard Heinberg of the Post Carbon Institute. He claims that cheap coal is running out quickly too, and that we will have hit peak coal by 2025. There are a lot of good reasons for avoiding coal. It's a dirty fuel that has spawned dozens of massive ecological disasters, including this one in Tennessee. Another reason to not depend on coal is that there might not be enough of it to consider it to be a long-term solution. And please tell me: why is "conservation" still such a dirty word to so many people out there when it is the cleanest and easiest why to even out energy input and outgo?
Dan Solin at Huffpo has repeatedly pointed out the folly of paying an investment "expert" to manage a securities fund. His advice goes against the grain; innumerable books, magazines and websites pretend that if you want to grow your investments, you need to pay someone to actively manage them. As Dan Points out in this post, the great majority of fund managers hyperactively stir your investments (which costs you money for all these transactions) and the fund typically does less well than passively managed index funds that cost a fraction of the cost of actively managed funds to maintain. Vanguard, for example, is a prominent company offering many passively managed funds that cost less than 1/10 as much to maintain as actively managed funds. After pointing out new statistics showing the follow of active management, Dan offers this hypothetical conversation that you should have with the next investment professional who offers to help your funds "grow," for a fee, by wheeling and dealing securities for you:
Broker: I recommend this [hyperactively managed] stock [or bond] fund. You: You get a commission if I follow your recommendation, right? Broker: Of course. You: Based on data from both Morningstar and S&P, your recommended fund is likely to underperform a low cost index fund of comparable risk, right? Broker: Yes. You: Is this a farce or a con? Then hang up.
In this month's Rolling Stone, Matt Taibbi once again takes on Wall Street with an article entitled "Wall Street's Naked Swindle." This article is not yet available online. Taibbi's focus this time is naked short selling. Taibbi has proven to be an excellent teacher of abstruse financial concepts, including the concept of short selling, and also including the insidious practice of naked short selling. With this technique (and others) Wall Street has turned the economy into "a giant asset-stripping scheme, one whose purpose is to suck up the last bits of meat from the carcass of the middle class." Taibbi's article is an excellent read, which is not at all surprising given Taibbi's track record. The bottom line is that naked short selling is a "flat-out counterfeiting scheme." How bad is the widespread use of this technique?
That this particular scam played such a prominent role in the demise of [Bear and Lehman] was supremely ironic. After all, the boom that had ballooned both companies to fantastic heights was basically a counterfeit economy, a mountain of paste that Wall Street had built to replace the legitimate business it no longer had. By the middle of the Bush years, the great investment banks like Bear and Lehman no longer made their money financing real businesses and creating jobs.
As Taibbi then reminds us, there is more than one way to counterfeit. Consider credit default swaps:If you squint hard enough, you can see that the derivative-driven economy of the past decade has always, in a way, been about counterfeiting. At their most basic level, innovations like the ones that triggered the global collapse-credit default swaps and the collateralized debt obligations-were employed for the primary purpose of synthesizing out of thin air those revenue flows that are dying industrial economy was no longer pumping into the financial bloodstream. The basic concept in almost every case with the same: replacing hard assets with complex formulas that, once unwound, would prove to be backed by promises and IOUs instead of real stuff.
In this related piece, Taibbi further discusses "naked short selling":Again, a lot of this stuff is complicated and not only hard for people outside the finance world to follow, but kind of, well, boring as well. But it’s through these tiny regulatory loopholes, these little nooks and crannies, that the economy gets manipulated. The effect of all of these regulatory gaps has been to transform Wall Street from a means of connecting capital to good business ideas into a giant casino, where the object of the game is shaving little slices off the great flows of money as you push them back and forth using a great big toolbox of manipulative techniques. This is one of the tools.
Have you ever wondered why so many Americans wear clothing when it's warm outside? Are they really covering up for sexual propriety—because of shame? Or could it be that they are wearing clothes to cover up their animal-ness-- their mortality? I'm intrigued by this issue, as you can tell from my previous writings, including my posts about "terror management theory," and nipples. This issue came to mind again recently when I found a website that allows you to completely undress people. The site has nothing to do with sex, I can assure you, but it has a powerful set of images that raise interesting questions about human nakedness. To get the full experience, go to the website and select an image of a fully clothed person. These are absolutely ordinary looking people, as you will see. Then click on the images of any of these men or women and watch their clothes disappear. If you are like me, when their clothing disappears, this will not cause you to any think sexual thoughts. If you are like me, you will find yourself thinking that these people looked more "attractive" with their clothes on. For me, the effect is dramatic and immediate, and it reminded me of a comment by Sigmund Freud (I wasn't able to dig out the quote), something to the effect that we are constantly and intensely attracted to the idea of sex (duh!), but that sex organs themselves often look rather strange to our eyes--sex organs are not necessarily sexy. I think the same thing can be said for our entire bodies. Nakedness isn’t the same thing as sexuality or else nudist colonies would tend to be orgies (which, from what I’ve read, they are not). Rather, sexual feelings are triggered by the way we use our bodies. We do many things that are sexual, and most of these things take some effort. Simply being naked is not an effective way to be sexy. In America, people constantly confound nudity with sexuality. I admit that the media presents us with many ravishing image of sexy naked people, but the sexiness of such images is not due to the mere nakedness. There’s always a lot more going on than mere nakedness. Consider also, that when people actually mate, they often bring the lights down low, further hiding their bodies. Then why do Westerners cover up with clothing to be "proper"? I suspect that anxiety about death (not so much anxiety about sex) contributes to our widespread practice of hiding those naturally furry parts of our bodies—those parts associated with critically "animal" functions relating to reproduction and excretion of body wastes. [More . . .]