Humor Backed Obligations

2007, Q4, UK's 60 million TV sets (not homes, ...

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The Mortgage Crisis – There is nothing funny about it.

You just cant sell this kind of sophisticated humor in the domestic market. Maybe we could package up an offering of British TV, and sell it as a HBDO (Humor Backed Debt Obligation), and get a credit on each HA HA!

If the humor failed to tickle the American funny bone (Due to most of us Yanks being, you know, stupid and unsophisticated), we could underwrite a HDS (Humor Default Swap), whereby we ship all of the stupid Americans who took bad paper, wrote bad paper, regulated, and defaulted…..send them all to the Kamchatka peninsula (That’s Russia).

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Too Big to Fail, too stupid to succeed.

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I would direct America’s small business owners, the bulwarks of our economy of whom most have never taken a dime of government money, to consider my hero, Tom Kloza’s article. Read it, and notice the last line. He is being polite.

Now, our Federal Bank, just as the Reichsbank in 1936, is nationalizing a private insurance behemoth because, ahem, ‘it is too big and important to fail. The US Government’s 79% stake in AIG signals an unprecedented nationalization of private capital – stupid capital that could not succeed on it’s own merits.

You, the now teetering or already gone mid-range American manufacturer of specialized, technical durable goods, are shit out of luck. You were not helped when the government subsidized and deregulated the financial industry, overlooked dirty deeds, and directed capital towards do nothing instruments, rather than incentivizing and strengthening the industries that really create things. You dumb stiffs, you salt of the earth family business that saw the greatest expansion of post WWII wealth. Gone.

You can go out of business, and many of you are long gone and will never read this missive. America was the lender to the world, now we are the debtor. America was the world’s manufacturer, now we mostly have all manufacturing outsourced. Rather than investment and R&D tax credits for streamlining manufacturing for mid-range specialized high-end goods, we pished the incentives away by deregulating and letting the financial industry take all the air out of the market.

Good night America; we have privatized gain, and socialized debt and failure while the base of American small business is burdened, while engineering universities are priced beyond all but the wealthy and the impoverished (one or the other).

Get ready for the breadlines, read, “The Grapes of Wrath”, and get your mind right.

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Bush and Georgia: A Useless Conservative Plays the Wounded Hawk

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President Bush has been, in so many ways, a disaster in his handling of the economy and of our country’s military blunders. The man is a scandal and a virus, as far as I’m concerned. And, he is a chip off the old block as far as selling out our allies and standing idly by as our enemies crush our friends under their boot heels.

His father did this in the first Iraq war, calling for the Shiites to rise up against the Hussein Regime as the USA wound up its cleanup of the Kuwait invasion. The Southern Shiites, Marsh Arabs, and Kurds all did as Bush the senior asked, and were promptly slaughtered. It was a great shame to be an American in those post Gulf War times. The Bastard, Elder Bush; oh, the people who died for your inept misuse of power. We came, shortly thereafter, to help the Kurds rebuild – but we left the Shiites to fester in their hatred of us. They might have been our greatest ally in the current, manufactured Iraq tragedy, but the Bush family made sure that was not to be. Good going.

Now, we have built up the goodwill, yet again, of a former Soviet Satellite, and told them that we would be at their side when the shit hit the proverbial fan – and again, we are hanging them out to dry. Who, pray tell, is this new friend of Democracy, you ask?

Why, it’s the Democratic Republic of Georgia,

Georgia is now being crushed by the newly reconstituted Soviet state – the selfsame New Soviet run by Mr. Vladimir Putin, of whom Mr. Bush (the coward butt-hole Jr.) said, “I have looked into his (Putin’s) eyes, and I saw his soul”, – hows that going now, Mr. President? How do you like Putin now?

Just like his dad, Bush junior is selling out a tiny country that took him up on a pledge to hold to and support democracy. Do this and the USA will be with you. They must feel pretty stupid now, trusting us.

Of all the disadvantages of having this moron in office, I would think the one advantage is that he would at minimum protect the small and fledgling democratic allies that he personally gestated. Send in a few Aegis Missile Cruisers to give them cover for the capital of Tbilisi. Knock a few Russian fighters out of the sky.

Georgia sent 500 or so troops to Iraq to help us in a genuine misadventure that they had every right to beg off from; yet they stood firmly with us. A symbolic gesture, for sure, but a bold move of their brave president. They should have stayed home for all th good it did them.

Mr. Bush, arrrrgh, send the fleet into the Black Sea for heaven’s sake! Save our Friends that you gave hope to – give them air cover! You have done everything wrong in your eight years in office – ruined a great economy, waged a stupid needless war in Iraq, did not finish or adequately provision the real war we needed to win, ruined America’s international standing, etc.

Etc. indeed. Please, do the one right thing that a REAL CONSERVATIVE President should do – protect our weakest allies. Do that.

Then go away.

Failing this, maybe Israel might help.

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Empty and vacuous: iPhone line people

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A writer at the Washington Post has a piece on the wisdom of waiting a week or so to get your iPhone, due to the inevitable activation snafus of the new in store process.

I will do him one better: What’s wrong with you! Standing in line, for hours, for a crappy gadget. I’m ashamed of myself for even taking time to shame you. Are you empty, void of purpose, stupid? Don’t you work or contribute to the economy or some civic activity? Who can afford to sit around like that? And for what? It’s not like a sporting event or concert seat with a limited run – it’s a device, they are slated to make 50 million of them.

Stop it now, get out of line, go home. Collect your old clothes and donate them, volunteer, or just go back to the job that you called in sick for – argh. Get a life.

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The Quick Answer to the Problem of Crude Oil Futures Speculation

If you know about how most crude is put on contract, and how that crude gets to our shores (discounting domestic, Canadian, and other non-OPEC sources) you would see the following:

  1. The same bulk oil carriers (supertankers) going back and forth from the Straights of Hormuz to the various storage facilities on the east and west coast of the USA. Same bulk transporters, same tankers, same terminals, same refiners.
  2. The domestic storage and refining capacity has not changed substantially for decades. Our usage has increased, which has put pressure in the tempo of the rate of transport and distillation. Overall, USA consumption has increased 20% since the 90’s, and we have the same refiners and storage.
  3. What has changed is the amount of money available to place on futures contracts. There is more money on paper to promise a certain price of delivery on a future date. So much money in fact, that these contracts exceed the available oil stock by 2 or 3 times the physical inventory controlled.

This has caused a tremendous surge in oil above the actual dynamics of supply and demand. If you and I stand around a grain silo and keep bidding up the price amid a climate of scarcity, and we have no hope of ever taking delivery of the wheat…..and we are joined by 1000’s of other speculators that are doing the same thing?

That’s a good picture of the trading pit at the NYMEX.  How can we fix this?

Well, I suggest that we we hire a SWAT team to tear gas or pepper spray the Pit for a few days to clear out the most egregious offenders. Barring that, possibly Marlon Perkins could be brought out of cryogenic suspension in order to shoot a round of tranquilizer darts at the floor traders in the NYMEX and Chcago MERC pits. That ought to bring the price of crude down and fast.

Then we can limit trading to those that can take delivery of the product – period. Futures contracts on paper for dry barrels could be allocated to professional options boards adhering to stringent margins requirements.

The worst take on all this, of course, is the liars that frequent CNBC, mostly investment analysts that are paid to say that no amount of dry contract speculation can affect the price of oil. They are liars, they are stealing from you, and they must be dealt with, in the parking lot of the NYMEX, if need be…..maybe a slap, maybe a baseball bat, maybe a decent shaming.

Something has to be done bring conscience back to the futures business.

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CNBC and a Crude Discussion – talking fast and saying nothing

Before you read me, please read Tom Kloza, who is a real authority:

CNBC and a Crude Discussion – talking fast and saying nothing

Maria Bartiromo

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Have you ever noticed that the anchors and analysts on CNBC talk very fast. Especially the ‘money bunnies’, Maria Bartiromo and Erin Burnett, they talk really fast. One reason for this rapid repartee is that they have no idea what they are talking about, and they don’t want you to notice.

While this can be forgiven when applied to a financial news anchor, it is unforgivable when dished up by a sector analyst. Specifically, the energy sector experts on CNBC should be beaten with a pipe.

A horrible lie is being circulated (via CNBC in particular), stating that the current price of crude oil could be due to any number of factors; it is just not known precisely what is causing the constant rise in the price of oil. Some analysts featured by CNBC say demand is the cause, some say speculation; they are both correct, but the role that speculation via crude futures trading plays in the price of crude is being deliberately hidden from public discussion, until now. I will enlighten you.

While there is no doubt that demand has played its part, we are seeing a new dynamic in the old commodity trader’s bag of dirty tricks – this is the trading of ‘dry contracts’.

Read on, babes, you are being had. Continue reading