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Wednesday Morning News Roundup

Wednesday Morning News Roundup

I was listening to the Bill Press Show on the way home (I was on call last night) and he had three topics for discussion. Black Friday: should we really be out shopping? Do you avoid politics over Thanksgiving dinner? Looking for peace in the Middle East. Black Friday is not about Christmas or the spirit of giving. It’s about large corporations figuring out a way to make huge sums of money. That’s it. The insanity of waking up and standing in line at 4 o’clock in the morning in order to get a deal on a Cabbage Patch doll or a G.I. Joe with a kung fu grip (from Trading Places) is ridiculous. I’ve seen people making $15,000 a year spending nearly 10% of their annual income on Christmas gifts. That’s not sustainable. When my siblings and I get together over the holidays, we will talk about everything. If my in-laws are there, that’s a little bit different. Let’s just say that my brother-in-law (well, all of my in-laws), up until recently thought that Glenn Beck was speaking the truth. My brother-in-law is a very smart guy. He longs for a time when things were simpler and easier to understand – the 1950s. As a rule, I avoid talking politics with him, but he has to bring up the subject. Then I approach it thoughtfully, carefully and in a nonconfrontational way. I only talk about subject where I know the facts. Finally, the Middle East. I don’t know what to say about that. I find the whole thing so disheartening.

The one thing that the General Petraeus scandal has told us is that all of your email is retrievable. If you’re saying things that you probably don’t want to read in court, then you probably need to take some sort of precautions.

When you don’t believe in government, it is really, really hard for you to make government work correctly. When you believe that government is the problem and never the solution, it is nearly impossible for government to work efficiently. A case in point is South Carolina. The government in South Carolina just got hacked. 3.8 million Social Security numbers were stolen. Why? The State Department of Revenue had crummy security.

Maybe South Carolina should have gotten some tips from Israel. As soon as hostilities increased, the state of Israel got hit by massive cyber attacks, 44 million separate cyber attacks. The government of Israel is still standing and the computers are still running.

Former Senator Warren Rudman has died.

Senator John McCain, who has led the charge in the Senate against the administration’s handling of Benghazi, is now flabbergasted, dumbstruck and stupefied. The Director of National Intelligence has stated that he removed the references to Al Qaeda in the initial reports as they were communicated by UN Ambassador Susan Rice. Here’s the problem. As I see it, who cares what it was called? It doesn’t matter whether within moments, days or even weeks we call these terrorist attacks or exuberant celebrations. What were the security protocols? Were they followed? I’ve yet to read anything significant or substantial on whether extra security was asked for in Benghazi. Was it? What was the administration’s response if there was such a request? As far as I’m concerned, this is a complete and total failure of the media. The media’s running around following Senator Lindsey Graham and Senator John McCain instead of giving us the background information that we truly need. They need to do some legwork.

Why is asking a simple question about science looked upon as a gotcha question? Senator Marco Rubio decided that he could not or should not answer the simple question concerning the age of the earth. This is a no-brainer, even if you are not a scientist. Biblical scholars thought that Galileo was a heretic in suggesting that the earth revolves around the sun. Now, Marco Rubio thinks that he would commit some sort of religious faux pas by stating that the earth is at least 4.5 billion years old. This underscores the stupidity of our political system. We’ve got to do better. We deserve better.

By |2013-11-03T18:16:22-04:00November 21st, 2012|Domestic Issues, Religion, Science|Comments Off on Wednesday Morning News Roundup

600 trillion reasons why we need more regulation of the financial markets

A year ago, we were all waiting for the other shoe to drop. The financial giant Bear Stearns had tanked. The stock market was jumping up and down like a Mexican jumping bean. The talking heads on the financial channels had no good news. They also had no good answers. It seemed clear that the one thing that was going to occur was the regulation of the financial markets. We were gonna do something about these cowboys who were taking enormous risks with our money.

I would like to think that I’m somewhat of a smart guy but I don’t get derivatives. Whether it is mortgage-backed derivatives or whatever, I’m not sure why it is legal to slice up debt and wrap it in other securities and call that a AAA bond rating. To me it is the reverse Osmond theory: one bad apple, if it’s big and stinky enough, does spoil the whole bunch. Derivatives, through some magical mechanism, help business manage risk. It seems to me that businesses were managing risk before derivatives were invented and seemed to do quite well at it.

I foolishly thought that there was very little warning when the financial meltdown hit. It was like a fast approaching meteor from out of the sky, I thought, but I was wrong. Years ago, in medicine, when gastrointestinal bleeding from the stomach was very common, physicians talked about a sentinel bleed, a small bleed before the patient really started bleeding. In the financial district, we had Long-Term Capital Management. This was our sentinel event. Back in the summer of 1998, Long-Term Capital Management was ground zero. The story is now very familiar. The executives who ran this hedge fund were thought of as the smartest people in the room. They were heavily invested in derivatives and in overseas markets. This was the go-go ’90s, so returns of 30 and 35% were not cause for alarm but cause for celebration. Everybody wanted to get in until the Russian market began to collapse. The credit markets froze up. Long-term Capital Management did not have enough assets to cover their debt. Because they were a hedge fund, they were basically unregulated. Because they dealt in derivatives, they were almost completely unregulated. Because of their ties to other financial institutions, it seemed that this relatively small company was going to bring down a financial sector. The company was hemorrhaging $500 million a day.

The Secretary of the Treasury, Robert Rubin, called in 14 banks. They were supposed to shore up this dying hedge fund. Larry Summers, he was there. Alan Greenspan was there. Timothy Geithner was there. We’ve seen all these players before. Robert Rubin convinced 13 of the 14 banks to put up $3.65 billion. (This is almost exactly what Secretary Paulson did when Merrill Lynch was drowning in debt. He asked (told) Bank of America to bail out Merrill Lynch. I still want to know why Bear Sterns and Lehman were allowed to go belly up and Merrill wasn’t.)

So, here’s my question. After the meltdown in the summer of 1998, why didn’t Congress begin to regulate hedge funds and derivatives trading? I guess we can forgive Congress for their lack of foresight and vision (even though that’s what we pay them for). We had the financial geniuses that were telling members of Congress that the financial sector didn’t need any regulation. We had lobbyists, tons of them, telling Congressmen that regulation simply wasn’t needed. “The market would regulate itself.” Remember that? This must of been some version of the Jedi mind trick. Well, it is a decade later and it turns out that the market cannot regulate itself. We learned this lesson back in 1929 and we learned it again in 2008. Can Congress gather their strength and willpower to enact thoughtful regulation? Will Congress be steamrolled by financial gurus who really don’t know squat? To be honest, I don’t mind if a bunch of Wall Street executives go belly up every 10 years or so. I do mind if hard working Americans see their pensions go up in flames because of the shenanigans of these knuckleheads. These guys have created a $600 trillion unregulated market. Al Capone couldn’t have done any better.

Frontline has a GREAT documentary on this subject. Brooksley Born was a heroine. She tried to warn us.

By |2009-10-21T09:04:07-04:00October 21st, 2009|Business, Economy|Comments Off on 600 trillion reasons why we need more regulation of the financial markets

Smart men do it with knowledge

Smart men do it with knowledge. I always wanted to make that into a bumper sticker. 🙂 This was just my opinion since I like to think of myself as a smart guy. Now there is proof.

From LiveScience:

Smart men rejoice:

Turns out that intelligent people are generally healthier than their less-clever peers – studies have shown that brainiacs are, for instance, less likely to suffer from heart disease and Alzheimer’s. Scientists have suggested that smart people may score less stressful jobs in safer places and that they may make better lifestyle choices, for instance by exercising more and eating better. In other words, maybe bright people actually listen to the Surgeon General.

But these newest findings, to be published in an upcoming issue of the journal Intelligence, found that negative habits had little effect on sperm quality, so they don’t support that theory.

The researchers instead speculate that intelligence might be passed down as part of a larger package of good attributes. One gene can influence multiple traits, so the genes involved in smarts may somehow improve sperm quality – and perhaps other characteristics as well. (more… )

By |2009-01-09T14:55:29-04:00January 9th, 2009|General|Comments Off on Smart men do it with knowledge
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