Archive for December 7, 2008

Chronicles Of Depression 2.0: #466: Taleb #2

December 7, 2008

This next video is of Nassim Nicholas Taleb.

He’s a frikkin genius.

His first book, Fooled by Randomness, is one of the Immortal Works. And if you haven’t read it, you are walking around blind and intellectually malnourished. Correct that ASAP.

I’ve been screaming Doom for nearly twelve months.

And now I have to confess that this video scares the living shit out of me. Moreso than anything else I’ve posted here.

— from Great Moment in Journalism: “Thud”

Previously here:

What Thing Will Happen To Us?
Chronicles Of Depression 2.0: #346: Taleb

Chronicles Of Depression 2.0: #465: 1M/Month

December 7, 2008

Fears of a million layoffs a month in corporate America

As many as a million American jobs could be lost every month by next spring as businesses struggle to raise capital in financial markets consumed by fear, according to a new analysis.

November was the worst month in the US labour market since the oil crisis of 1974, as more than 500,000 US workers were laid off, according to official figures released on Friday.

But Graham Turner, of consultancy GFC Economics, says the rising cost of corporate debt is now flashing a red warning signal that far worse is to come over the next few months and job losses are heading for levels last seen in the 1930s Great Depression.

Emphasis added by me.

Oh yeah, that scares even me.

The one thing I’d not considered in my near-twelve months of screaming about this issue was the ongoing rate of unemployment; that is, the pace at which jobs would be destroyed.

I knew it would add up to a large number, but being a math retard, I never stopped to consider what that would look like on a daily, weekly, and monthly basis.

One million a month is a very frightening number.

And I want you to notice one other thing. The headline says corporate layoffs. Will it go even higher due to local and neighborhood businesses?

Chronicles Of Depression 2.0: #464: Unfluence

December 7, 2008

End of Work, End of Affluence

I can’t give a direct link to the above item. He seems to do one monster post each week or so. So go to the site and search for it.

Let me show you how good things used to be in this country:

[. . .] even minimum wage ($1.60/hour in the late 60s, I know because my wage stub recorded it) bought far more goods (purchasing power) then than minimum wage does now.

Emphasis added by me.

$1.60 an hour. And you could rent a good apartment for that. You could not only rent a good apartment, you could:

– pay for electricity
– pay for cooking gas
– pay for food
– buy clothes for work and leisure
– put away some for savings

Yes: savings! You’d wind up with money left over after simply maintaining your life!

You could in fact work part-time and still have an apartment and meet basic life-support requirements.

Today, working part-time can’t even afford homelessness!

Here’s a question for all of you to consider:

Meanwhile, in TLCIA circa 2008, obscene “compensation packages” are defended as “free enterprise.” Well, what did we have in 1969? Unfree enterprise?

None of you yet understand that the monster levels of compensation we’ve seen since the 1980s would have been seen as obscene and abnormal before then.

Sure, there had always been stars — movie, radio, and a few TV ones — who made money. But in general those people had actual class and didn’t flaunt their luck and by and large behaved in accordance with the traditional values of the larger society. For one, they gave generously to charity. Second, they encouraged others to do so too.

Dick Fuld, who pocketed four hundred million dollars in one year — quick, tell me the charities he recommended and volunteered time to!

Michael Milkin got all charitable and fuzzy-hearted once his prostate came under attack. Before then, he was all puff-chested and the Junk Bond King of Fuck You All.

Society used to work for everyone.

The above post goes into detail how it might devolve to work for no one.

Who wants a society like that?

Welcome To Our Bad American Future

December 7, 2008

Your philosophy question for 2009 or 2010. Or maybe both years!


Microsoft: The GM Of Software

December 7, 2008

Look what Vista has done to the usually very good-natured Stephen Fry!


You wouldn’t want to listen to what I say out loud daily to this piece of shit PC — which runs XP.

For just one single twenty-four hour period, I pray for every Microsoft employee and programming contractor to break out in Job’s skin disease.

Those smug code-bloating bastards would get the message and quickly start fixing and slimming everything down afterwards!

Quote: Barry Ritholtz

December 7, 2008

Blaming Moody’s

All of these motherfuckers need to be thrown in prison, where they will be sodomized on a daily basis for the rest of their lives.

Chronicles Of Depression 2.0: #463: The Ws

December 7, 2008

You Can Only Bury Your Head In The Sand For So Long

People don’t seem to understand, or maybe they just don’t want to understand, or maybe the talking heads are trying to keep them from understanding, how bad this is, this crisis, this financial crisis, this “slowdown”, this “contraction”.

Let me help. The U.S. is broke. States and municipalities are in debt up to their eyeballs. Trillions of “dollars” are being spent by government agents in a desperate attempt to hold back the flood of bankruptcies and liquidations — bankruptcies and liquidations that MUST eventually occur — for another month or two. The international banking system teeters on the brink of implosion. In the eyes of Henry Paulson and Ben Bernanke, everyone has become too big to fail, because these guys know that failure of one could mean a collapse of all. The entire human web of interdependence — not simply in the financial realm of Collateralized Debt Obligations and Mortgage Backed Securities and Credit Default Swaps and Futures and Options and Bonds and the like, but of tangible infrastructure, like food and water and power and fuel and all of things we need to survive — it is all hanging together by a thread. And in some parts of the world the thread has already frayed away to nothing, exposing people to the real-life horrors of collapse.

Emphasis added by me.

This is a post many of you will note in passing right now and then come back to later in panic. He goes over the Ws:


You’ll be repeating those to others at some point in 2009.

Or having people on TV reciting them to your face.

That’s if you still have electricity.

For those of you who mocked my term “micro-terrorism,” especially note this:

Terrorists in countries such as Colombia frequently attack the power-grid infrastructure, often leaving homes and businesses without power for weeks at a time. The power-grid infrastructure in the United States is virtually unprotected and remains an exceptionally soft target for both domestic and foreign-based terrorists.

Previously here:


Chronicles Of Depression 2.0: #462: I, Minority

December 7, 2008

Deflation virus is moving the policy test beyond the 1930s extremes

We are beyond the extremes of the 1930s. The frontiers of monetary policy are being pushed to limits that may now test viability of paper currencies and modern central banking.

You cannot drop below zero. So what next if the credit markets refuse to thaw? Yes, Japan visited and survived this policy Hell during its lost decade, but that was a local affair in an otherwise booming global economy. It tells us nothing.

This time we are all going down together. There is no deus ex machina to lift us out. Certainly not China, which is the most vulnerable of all.

Emphasis added by me.

All Sink or All Swim.

Pay attention:

As the risk grows, officials at the highest level of the British Government have begun to circulate a six-year-old speech by Ben Bernanke – at the time of its writing, a garrulous kid governor at the US Federal Reserve. Entitled Deflation: Making Sure It Doesn’t Happen Here, it is the manual of guerrilla tactics for defeating slumps by monetary means.

“The US government has a technology, called a printing press, that allows it to produce as many US dollars as it wishes at essentially no cost,” he said.

Critics had great fun with this when Bernanke later became Fed chief. But the speech is best seen as a thought experiment by a Princeton professor thinking aloud during the deflation mini-scare of 2002.

His point was that central banks never run out of ammunition. They have an inexhaustible arsenal. The world’s fate now hangs on whether he was right (which is probable), or wrong (which is possible).

As a scholar of the Great Depression, Bernanke does not think that sliding prices can safely be allowed to run their course. “Sustained deflation can be highly destructive to a modern economy,” he said.

Once the killer virus becomes lodged in the system, it leads to a self-reinforcing debt trap – the real burden of mortgages rises, year after year, house prices falling, year after year. The noose tightens until you choke. Subtly, it shifts wealth from workers to bondholders. It is reactionary poison. Ultimately, it leads to civic revolt. Democracies do not tolerate such social upheaval for long. They change the rules.

Emphasis added by me.

They change the rules — we are they.

Pay closer attention to this:

The Fed can acquire houses, stocks, or a herd of Texas Longhorn cattle if it wants. It can even scatter $100 bills from helicopters. (Actually, Japan is about to do this with shopping coupons).

All the Fed needs is emergency powers under Article 13 (3) of its code. This “unusual and exigent circumstances” clause was indeed invoked – very quietly – in March to save the US investment bank Bear Stearns.

There has been no looking back since. Last week the Fed began printing money to buy mortgage debt directly. The aim is to drive down the long-term interest rates used for most US home loans. The Bernanke speech is being put into practice, almost to the letter.

No doubt, such reflation a l’outrance can “work”, but what is the exit strategy? The policy leaves behind a liquidity lake. The risk is that this will flood the system once the credit pipes are unblocked. The economy could flip abruptly from deflation to hyper-inflation.

Nobel Laureate Robert Mundell warned last week that America faces disaster unless the Bernanke policy is reversed immediately. This is a minority view, but one held by a disturbingly large number of theorists. History will judge.

Emphasis added by me.

1) Tell me where that Fed helicopter dropping 100s is going to be. I want a fat handful.

2) “A minority view.” Let me tell you what else was the “minority view” just a short year ago:

– we had massive fraud in mortgages
– we had massive fraud in finance
– major banks would topple
– investment banks would go under
– the word “depression” would be widely used
– unemployment would explode
– the Big 3 would beg for handouts
– investing in gold was foolish
– oil would never hit $100/barrel

Do I need to list any more?

Now sudden hyperinflation is the “minority view.”

When that comes to pass and you’re starving and suffering in USA-Zimbabwe, I want all of you to remember the new “minority view” — there is only one way out of this.

John Scalzi eBooks

December 7, 2008

In Various Book Things, 12/5/08, writer John Scalzi alerts the world to Baen offering two of his books as glorious eBooks!

This is the one you want to buy right now:


And what price is it? A wonderful impulse-buy price of just $6.00!

While you’re there, also pick up You’re Not Fooling Anyone When You Take Your Laptop to a Coffee Shop for the same fantabulistic impulse-buy price of $6.00!

Go buy!

Free eBooks From Baen Books

December 7, 2008


Baen has been doing this for quite a while, but the population of eBook reading devices is now larger, so a reminder is in order.

Free Library

Introducing the Baen Free Library
by Eric Flint

Baen Books is now making available — for free — a number of its titles in electronic format. We’re calling it the Baen Free Library. Anyone who wishes can read these titles online — no conditions, no strings attached. (Later we may ask for an extremely simple, name & email only, registration.) Or, if you prefer, you can download the books in one of several formats. Again, with no conditions or strings attached. (URLs to sites which offer the readers for these format are also listed.)

These are the file formats available:
* Ebookwise/Rocket Format
* Mobipocket/Palm/Kindle Format
* Microsoft Reader Format
* Sony Digital Reader Format
* RTF Format

See the long list of free eBooks!