Malefaction
Dear <Federal Representative of Congress Allegedly Representing Your Interests>,
I pray to sweet Jesus above that you and your brethren in Congress don’t pound me in the ass with a broom handle. I’m not a high school football player, you know.
Faced with the most pivotal moment in your career (a career at least on the surface dedicated to serving the best interests of the country), you have the opportunity not only to bring hope for the aversion of a tragedy to your American people, but also to all your fellow human beings who lay claim to membership in the modern global community. All you have to do is swallow your politics and ignore the taste of bile and your general dislike for what is happening.
Or, instead, you could piss it all away like a screaming brat in the grocery store check out lane. You don’t like the bailout. Your dear mortal frenemies across the isle don’t like the bailout. It’s the bloody definition of a compromise as it is! Let’s take care of business already (so to speak)!
Oh, sure, hold on. We’ve got to mug for the cameras. The senior suits have decided that they need some face time with the thrice damned legislation so that they can carve it up like a back alley Hollywood boob job and slap a name on it (the X – Y Financial Rescue and Reform Bill… think Sarbanes-Oxley, aka SOX in the finance world [or SUX, depending on who you talk to], McCain-Kennedy, etc.).
Let’s not forget this isn’t a game. You can’t play “just the tip, just for a little bit” with this. Not only is it not a game, it’s not even an intern. If there was ever a time to over react, this is it. The fine Mr. Dodd’s suggestion of starting out with $150B and the working out the rest later is runner up for “Worst Crisis Mitigation Idea of the Year” only to the plan of doing nothing at all… which apparently some of the more “red” of your colleagues would support.
I’d like to think that as you are, nominally, a servant of the people, I could be certain of your commitment to work the long hours and work out a deal as fast as the limits of your physical life force would permit. The world loses faith in our chances to execute this maneuver properly by the minute. If we tasked a group of media cameras to follow each of you around at all times, would you consider working through the night?
At the root of things, getting the details right isn’t so important as how quickly it takes place and how much monetary force the government puts behind it. $700B is great. $1 trillion would be better. The taxpayer will get most of that money back in the end anyway, especially if the government modifies all the mortgages it buys. If you’re worried about losses, require the companies to issue you $1 of perpetual cumulative preferred stock for each $1 of losses (I recommend staying away from common stock… much touchier issue.).
This is not politics, I probably don’t need to remind you. This is the shaken foundation of the world’s economy. If you do not act, it will quite probably fail, and it will pull the framework of our modern society down around you while you watch and dither. Should that happen, I would certainly write you a letter informing you that I prayed that you not receive the sudden and greatly prejudiced justice you would certainly richly deserve.
The country, and Congress is faced with two (metaphorical) choices: the first is to be executed with a single round to the back of the head, and the second is to play Russian Roulette with a single round and five empty chambers. It ought to be an easy choice, so let’s not worry about if the bullet is hollow point or full jacket. Please?
Sincerely,
<Your subservient semi tax paying plebe>
Malevolence
The Bailout and the Abyss, a bed time story.
I’m not so sure that the Post is all that renowned as a financial source of record, and 500 trades strikes me as a gross exaggeration in a market system that will process millions or billions of transactions a day.
Regardless of any exaggerations, the basics of the article are true. The most important item, for me anyway, is the note that the commercial paper(CP) markets failed. It’s worth accessing Wisdom to learn a little about one of the world’s most fluid. liquid, and safest debt markets.
Until last week. The doors closed. The liquid dried. Almost no entity was deemed credit worthy. Money markets supply most of the funds for this market, but they took their ball and went home in fear of “breaking the buck” which is the money market equivalent of guest starring on Dateline with Chris Hanson.
Danger? Only the gaping maw of darkness opening wide.
Melodramatic? How about requiring a retitling of the Great Depression to the First Depression, like the Great War was retitled the First World War.
With the CP markets dry, many companies then turn to “backstop” credit lines, taken for just this sort of situation. Banks give them out expecting that they would never be used, charge nominal fees for the unused portion of the lines, and frequently the credit lines carry interest rates very unfavorable to the bank.
Exactly the sort of thing many banks can’t afford these days. The sort of thing that when lenders and finance guys gather around a table these days and hear that a backstop is being drawn for $X million dollars, be it 5, 20, or 100, renders the room totally silent. Then, with an echo of terror in his eyes, the managing lender comments, “You make sure they know we can’t afford to keep funding this… this line was never supposed to be used.” The threat implied that the client needs to figure out a different way to get their financing or face having the credit line pulled out from under them, and damn the legal commitment.
And should the CP markets remain dry, banks would be run under. Eventually a bank would be forced to cancel a credit facility or refuse to fund a client. That’s not the sort of thing that stays quiet in the financial world. That bank itself would likely find it difficult to get funding on the CP market… and then, as rumors of liquidity problems spread, more of the bank’s own creditors would being to deny funding. Then you’d get the inevitable bank run.
And nothing kills a bank faster than a good bank run. If it’s just one bank (IndyMac), then fine. It’s a good headline. The CP markets could bring down many banks, and not just your corner community bank. Second and third tier banks. If you’re in Texas, I offer Frost Bank, the Midwest I could go with Harris (even though Harris is backed by Bank of Montreal, but something of that size)… how about National City. It’s already on the rocks anyway. Bank of the West for those in the Rockies. I can’t think of anything on the east coast. Such a situation could even bring down a top tier institution such as B of A, Citi, JPM Chase, Wachovia, or Wells Fargo. A couple years ago I might have tossed WaMu into that list, but, well…. And these are just names of banks for examples… don’t read too much into this.
And so what if some banks fail? Just some banks, some fat cats with outsized bonuses they get by outsourcing jobs.
Some credit for businesses large and small. Payrolls would come in late, capital expansion projects delayed, cancelled, or abandoned in process. Well… I think you can pick up the thread of the story from here by cracking the cover on the Great Depression.
The bailout? All but required. It makes no sense to exclude “foreign” banks that have significant operations in the US. Back to Harris Bank… it’s owned by Bank of Montreal, yet in the US Harris employs thousands and has some $40 billion in assets. Should Harris not qualify? Why should UBS’s American operations not qualify?
And the bailout is needed sooner rather than later. It’s not so much the timing as a need to “show me the money” and prove that the bailout is real and not a tease. If it drags, the CP markets (which function for now) may run dry again, although extending gov’t protection to money market funds helps to a great extent.
The further question being how the world is going to react to $700B of new Treasury bills. Despite having crowned China as the world’s most powerful economy, that doesn’t mean the US can’t still taken the world down with it… but China can save us. And the Oil states. Vested interests to see us through things. Weaker dollar is probable, but the strength the dollar has shown the last couple months gives us a little cushion.
The UK is apparently not considering such a bailout as feasible citing budget deficit problems.
We stand at multiple cross roads. At one, the choice between principle and ruin on the one hand and moral defeat and the chance of economic salvation on the other. A different cross road at the same location gives us the choice between the chill of chaos and the warmth of growth which we have enjoyed the benefits of for nigh thirty years in one direction and the other direction being sure certainty in safety and the drag of stagnation.
Lessons learned? Statistical models are amazing, sophisticated, elaborate and yet the numbers never capture the whole story… or if they do the human discounts the downside while emphasizing the upside. Quantitative finance has allowed the banking world to operate on a razors edge, always at the limit. This drives progress all over the economy and in people’s lives (see: Mortgages, Housing Boom Driven by) and for every boom and bust, the bust never takes us as far back as we were before the boom. However, I suspect the human side of the equation fancied itself too invulnerable in its quant armor and subordinated the flesh and blood judgement of intuition and reason to the cold numbers of a model.
Chaos is the way. The right way, rather. For now, I believe that the country is had its fill of fear and stress. The US just wants to sit down and rest… make all the wories go away. We will not choose the warm embrace of growth for the fear of the chaos that comes with it.
And the mantle of economic leader is awful heavy these days. Mayhaps someone else could lug it around for a while. Ah, here’s China with its government managed economy, so strong and bright. No doubt we’ll follow their lead now.
As to the other cross roads… well, faced with the choice between certain doom and possible salvation, the choice is clear. Not even Congress is that dumb. Not that the situation won’t be seen as the opportunity to arm twist another economic stimulus out… for Main Street, you see. We can only hope the deed is done before the current spark of hope fades again… it may be harder to relight it later.
Fear drains the soul, and I am so tired. I see uncertainty, resignation, and even sometimes despair all around me… and why not? We’ve done everything we can, and now we dust our hands and say que sera, sera?
What will be, will be indeed.
Keepin’ it surreal,
Tommy Lasorda
No Place to Stay
Biden. So… to really attract the middle of the road and the apathetic, the machine at the DNC thinks: Hey! Let’s pick an old white liberal senator from the northeast! Well, we can’t pick a democratic governor from a republican state, because then we might lose that office in the replacement race. Also, we should pick someone who is a real Washington insider (their words not mine) and strong on foreign policy… since (apparently) Obama’s weakness in economic policy doesn’t matter since we’re going to assume we’ve got a slam dunk on the economy.
What a bad pick. What a typical party pick. Either Obama’s not a smart as I thought, or he had to bow to the party line. A senator with a long voting record to target? Someone who embodies party politics? How does that fit in with the campaign?
Also, I noted NPR running a promo for a segment on how the DNC convention was seeking to define Obama better. Why? Can’t they see that Obama’s campaign to date, the one that has energized people and attracted the middle of the road and the uncommitted right is built on being undefined?
Hope! Change! This concepts are best lest formless so that they can take the shape most appealing to whoever receives the message! You can’t even attack the issue, because then you’re just being a mean politician attacking hope and change.
Once you define hope and change it becomes just a list of social programs, taxes, and/or spending cuts that turn off republicans and moderates and project a “politics as usual” air that deflates the enthusiasm of the apathetic voters. Lists of programs etc is an easy target to attack as well.
Bloomberg would have been awesome for Obama. Epic. Biden is epic. Epic fail.
So Bloomberg is a possibility for McCain, but I think Romney works better for him. Bloomberg has had too much of a public love affair with Obama, and Romney would still give McCain the economic expert that Obama lacks (while McCain has his own foreign relations cred).
Speaking of foreign relations cred, Biden has such a strong base:
- Declared that the US had “no choice” but to remove Hussein in Iraq, and voted for the war.
- Was described by the UN Weapon’s Inspector Ritter as having ignored Ritter’s arguments against WMDs in Iraq while seeking to support his own conclusion that Hussein not only had Bio and Chem weapons, but was attempting to gain nuclear weapons.
- He supports a “third way” in Iraq, which sounds good on paper (and makes all Bill Clinton fans horny), but is doomed to total failure simply because not only are the majority of Iraqis not on board, the surrounding Arab states wouldn’t support it either (notably Turkey).
- It’s worth noting that he also co-sponsored a non binding resolution against the troop surge in Iraq and joined in referring to the move as the “McCain Doctrine” (actually John Edwards’ words). Don’t hear much of that talk these days.
- Was/Is? a BIG supporter of the PATRIOT ACT, even going so far as to claim he had introduced an almost identical bill years earlier.
- He does cover Obama’s Jewish sore spot by being a staunch backer of Israel, so clearly that endears him to those other countries we might need to deal with… like Iran.
I’ll grant that I agree with his more lenient stance on immigration and like that he’s against ethanol, not that he’s view on ethanol will do much good with corn fueled Obama around. Throw in his views on guns, and he’s pretty much a disaster.
Will he help the Dems win Pennsylvania? No. So he’s big in Philly? Ahh… Philly has been a democratic stronghold for long time, no? He’ll certainly NOT help in any of ther southern states.
It’s amazing how often the DNC can’t get out of it’s own way.
I’ve got your rings right here
Back for more Olympics.
This was the end of Olympic softball and baseball until at least 2016 for reasons not really explained by the IOC. While I’m OK with the end of softball (despite the US loss to Japan, it’s still not really a competitive global sport), I’m not very on board with the elimination of Baseball. At least 10 countries could, if they wanted to, field very competitive teams and 4 or 5 more teams could, and have, fielded competent if not competitive teams in the past (including China). Further, the champions have been fairly evenly distributed… unlike, say, badminton where China has won 11 out of 24 golds and 30 out of 76 total medals.
Badminton, however, as goofy as it sounds, is an awesome sport to watch and I will not be the one to suggest it’s elimination.
Let’s look at some other places worthy off being cut out of the games tough:
1) Equestrian, All: The games are about human people showing off their skill and athleticism, no? Equestrian is about animals. Oh, sure, if you put me on one of the gold medal winning horses not only would I manage to kill the horse, but I’d also manage to kill myself. I don’t deny that it takes a good rider… and trainer. However, you take the same rider (and trainer) and put them on a braying donkey, and they won’t win either. I don’t see the Westminster dog show at the Olympics. I don’t see the frisbee catch at the Olympics. I don’t see horses sprinting a mile and a quarter at the Olympics. Further, this ”sport” might be among the LEAST accessible to the poor nations and people of the world. Equestrian needs to be on the very short list of sports heading out the door at the games. Also, 6 medals? 6? Really?
2) Synchronized Diving: Stupid. It’s hard enough to get a good competition where judges are involved, especially one where the judges are as far away as they are in diving and for an action that is so fast in its completion. Adding a second person to judge complicates the judging and compounds judging errors, not to mention being a totally unnecessary addition to the games. 4 medals? Out.
3) Rhythmic Gymnastics. Hard? Yes. Requiring intense practice, athletic ability, and fine skills. Check. Olympic level competition? No. Just because every failed ballerina and artistic gymnast needs an activity to keep their dreams alive doesn’t mean the IOC has to subsidize failure by continuing to sponsor this travesty of yet another judged competition. Sure, it’s cool to watch and impossible for a common person to do, but it’s not up to Par for my Olympics. 2 medals? Out.
4) Badminton: what? I just said that this was safe? Well, it is, but the gold medal for mixed doubles isn’t. Tennis and freaking ping pong (which misses this list my the narrowest of margins) don’t see the need for “mixed” doubles, and neither do I. Badminton should be grateful it gets the same number of medals as the actually globally competitive sport of tennis and accept the loss of its mixed gold with dignity. 1 medal? Out.
5) Trampoline: See Rhythmic. It’s not the IOC’s place to sponsor dreams for failed gymnasts just because Trampoline is also hard. 2 medals? Out.
6) Shooting. I’m a big fan of a little bang bang on the range, and even of shooting targets (hey-o!), but I’ve got to admit some of the shooting is being a little generous. 10 meter shooting? With a rifle? Shit. Take out the 10 meter competitions totally. I’d like to see them bring back the 800 and 1,000 meter competitions, though. 4 medals? Out.
I’ve eliminated 19 medals, while still retaining the suspect ping-pong (oh, I’m sorry, “table tennis”) and synchronized swimming. Given that I’d like to investigate the following additions:
1) Baseball: bring it back, fools. +1 Medal
2) 800M and 1,000M shooting: at least 2 medals, maybe 4 if the girls want to play.
3) Cricket: it’s a huge and important sport in no less than 5 countries on 4 continents including the second most populous nation on earth. It’s more than you can say for badminton or ping pong. +1 medal (do women play cricket?)
4) Rugby: Bring this shit back already. And no, it’s not just Britain and New Zealand asking to bring it back. How the IOC can pass over rugby for squash and karate bottles the mind, especially when they can’t even judge the martial arts they’ve got without sparking controversity and roundhouse kicks to the face. +1 medal.
5) Golf: I know, not very athletic, but loads of skill and a world wide sport. +2 medals.
So I don’t replace all the medals and that’s fine. You can add a couple medals to golf for national team events if you want, or have room to add truly worthy competitions later. None of the sports I’ve put back in are purely judged events, which is good. There is rules enforcement in Cricket, Rugby, and Baseball, but the impact is usually minimal. 800M and 1,000M shooting is a big upgrade over 10M shooting because it requires all the same discipline over muscles and breathing as 10M but also a mastery over the shooters environment (wind, humidity, temperature).
Sports!
I am an Olympic freak. For 1444 days every four years, I will not even think about a wide range of sports, and yet for 17 days I’ll follow (or try) every minute of tons of obscure competitions. This doesn’t count my companion obsession with the winter games as well that led to being the treasurer of a curling club in Texas.
So now the summer games are over and the question becomes, “Who won?” Well, China had the most gold medals with 51. Does that mean China won? The US countered by winning the most medals overall, which ought to count for something. So did the US win?
From an athlete’s perspective, getting a gold medal is the pinnacle of acheivement (for most sports, at least). However, most athletes would also be estatic to win a silver or a bronze. I like to gauge the medal count by a somewhat common points system: Gold is the pinnacle and gets 10 points, Silver is great and gets 6 points, and bronze is superb and gets 4 points. If you were a competitor, would you rather have 1 gold or 3 bronze medals? It’d be a close call, I’d think… or if you’d rather, would you rather have 1 gold and three bronze or 2 gold (thus eliminating the competitive desire to be best at at least one thing)? This point system usually carries down through 6th place, but since that data isn’t really collected at the olympics (or even determined at all in some cases), we have to discard points 3,2,and 1.
In the end, I declare China the winner of the 2008 games with 748 points over the USA’s 732 points.
The rest of the top 10:
Russia with 468
Britain with 328
Australia with 298
Germany with 280
France with 234
South Korea with 222
Italy with 180
and Japan with 166.
For the most part it follows the raw medal count except where Japan passes by Ukraine (and China passing the US of course). UN Security Council represent!
In 2012 look for China to maybe pull back a little in the medal count based on the fact that many of China’s medals came from judged events and a home crowd DOES impact the judging. I’m not implying that the judges don’t try to do their unbiased best, I’m just saying it’s next to impossible to have a human subjective opinion influenced to some degree by the reaction of a crowd.
Regardless, 2012 will likely be the last time there is any debate about the medal count winner as in 2016 and beyond China’s population and government backed programs will certainly overwhelm the US. I saw a good suggestion that instead of donating $3 of your taxes to the damn presidential campaign fund, we should have the option to donate it to the Olympic program. Probably be a much more popular option.
Rock My Rack
Company: Rackspace Hosting, Inc.
Symbol: RAX
Current Price: ~$10.40
Summary (per yahoo): Rackspace Hosting, Inc. provides information technology systems and computing as a service for businesses worldwide. It delivers enterprise-level managed services, such as Websites and Web-based information technology systems. The company’s portfolio of hosted services includes managed hosting, email hosting, cloud hosting, and platform hosting. It offers hosting solutions comprising virtualization, security services, email services, database services, storage and backup, reporting and administration, and professional services for small businesses, medium to large businesses, software as a service providers, and Web designers and developers. The company was founded in 1998 and is headquartered in San Antonio, Texas.
2007 Net Income: $17.8M
A profitable tech? More specific, a profitable *IPO* tech? Shocking. I’ve never paid big money for a rack, but everything I hear says it’s a booming business (bada bing?). Seriously though, it IS a growing industry and there is no real reason for RAX to suddenly become a money losing business.
RAX has to be MORE than a money making business though. It has to be an exploding business, one that continues to grow at 60%/yr over the next four years or so. An influx of over $100M from the IPO is certainly going to help reach that goal by aiding in capital investments for new capacity (either directly or through debt reduction). Asking any business to do this is always a risky proposition, although some do manage to succeed.
You may remember that I steered away from a different company (Intuitive Surgical) for similar reasons, but there are some differences:
- Known competition: No surprises in this industry as far as competition. RAX has several established competitors and knows that it must constantly increase the value of its product for its customer to survival. RAX is certainly at no risk of resting on its laurels at this time.
- Customer Savings: Unlike an expensive medical tool, RAX’s product is easily marketable in both down times and up times. Every potential client is looking for ways to cut costs while maintaining/enhancing their technical abilities, which are both things that RAX offers. It’s one thing to pitch a million dollar machine based on superior surgical results for the patient and long term revenue enhancements, it’s another to pitch immediate cost savings to a profit seeking corporation.
Sounds good, but there is also the regulation tech industry draw back: over-build. My brief in-depth research suggests that there has been significant expansion in the hosting industry and therefore greater than normal opportunity for some rough times should demand for services not continue to increase at the expected rate (think hi-speed internet infrastructure build out in the late 90’s that collapsed in the dot com bust). The strong rise stronger for the shake out, but it’s not something you want to be a shareholder for.
So what’s RAX worth? After the IPO there are about 115.4 million shares outstanding. Yahoo tells you that there are 101 million shares outstandings, but Yahoo is essentially retarded and never gets an IPO’s shares count right. I’m right. Check it with the man.
Heck, that document in the link has all the numbers.
Anyway, so 115.4M at about $10.40 a share amounts to about $1.2 billion dollars. That’s fairly steep for a company that pulled in $17 million in profit last year, but if it can achieve 60% growth, then it’s worth it.
But wait! There’s more.
22.8 million extra shares in existing options and warrants and an extra 6.8 million shares “available for grant” under employee incentive plans. Wicked! So YOU think there’s 115.4 million shares, but really there’s 145 million shares. The “strike price” on the options are all either significantly below the current stock price (making at least a handful of employees instant millionaires) or about what it’s trading for right now. As a shareholder you would HAVE to hope these options get exercised, because if they don’t that means that stock price has never gone up any.
So 145 million shares at $10.40 = $1.5 billion! WOW! After all that, I can admit that if RAX holds the 60% line, it’s still fairly valued. Still maybe even undervalued even. If you could promise me 60% growth, it could be worth $30 in five years or so. If you only get 50% though, it drops to more like $22. And if it’s just a puny 40%/year, well, I’d probably only give you about $12 for that.
So there’s definitely some range here. What would I recommend?
Hell, I don’t know. How much more can the Western market for this product grow? Let’s not talk about China… if you think an American company is going to bust into the dragon’s lair and storm the nacent hosting sector their, I’ve got a Georgian military offensive to sell you. If you want, let’s consider stateside demand for the service by Chinese firms. Let’s not worry about India, as I’m fairly confident that they’ll take care of their needs in house. I hear they have some tech labor over there.
You figure out how much room is left in the US, Canada, Europe… maybe even South America and Africa. Then you’ll have a better idea how long RAX can keep up the growth. I couldn’t even begin to claim to have the beginnings of an idea, though.
I would, however, recommend waiting 6 months before buying into RAX. Use it to research the stock if you want. Why 6 months?
That’s when pre-ipo shareholders can begin to sell their stock. It might not hurt the price, but it won’t help it either.
Playing With Pain
Life lessons from the Journal of Wisdom According to Awesome:
Form your hand into a straight, rigid flipper as though you were about to power chop your way through a cinder block or a 2×4 plank.
Now take careful aim at your cat. Any other nearby life form will do as a substitute.
Lunge at said cat/lifeform and feint an mega death blow attack by thrusting the tips of your flipper fingers in the direction on the target with all undue velocity available to your particular combination of body mass and muscular build.
Realize that due to an oversight in your scouting report on the local terrain (perhaps, say, your bedroom) you have now speared your hand into the door frame.
QED: Pain.
Aleve takes the edge off, so good times for only being in uncomfortable pain. I’m told it’s most likely a muscular/tendon injury, so it’ll be about a month before it’s completely better, and there’s no point to x-rays because if it were a small fracture, there’s nothing that could be done for it.
May 8th
May 8th is an underrated day. Probably not too hot, probably not too cold. A fair chance that it might be raining, but not a certainty. School is not yet out (which is good for everyone NOT in school), but neither are the mosquitoes (the insects… the kids are still in school, remember), or at least not in full force.
It’s also the day of the year that Robert Heinlein died in 1988. I’m not to suggest we should celebrate his death, of course. I just think its underrated as an opportunity to remember one of the foundation authors of modern science fiction. One of those rare breed of writers that can combine a good story with thought provoking social commentary and a technological prescience that can, from time to time, make your skin crawl. Not everything he wrote fits in to all three categories. Not everything he wrote is guaranteed to even fit into one category. The ones that do, though…
Yeah, he grew to be a very cranky, very horny old man. Who doesn’t? I fit that category right now and I’m under 30. Give me a wheel chair, a plaid blanket, and some nurses to bother and we’ll see how well I fit into an old folks ranch. I even play bridge.
Did he have some hot sports opinions? The hottest. Political systems, political thought, social behaviors, social conventions, social structures, economics, personal liberty v. social welfare, polyamory, polygamy, polygynandry. Oh, did he like the last three.
Hey, the guy went from being a (not so) closet communist to supporting Barry Goldwater in his lifetime. He covered the spectrum. He also described the idea of a waterbed in such detail, and so often, that decades after he wrote about it as US Court ruled that the waterbed was not a patentable invention.
I’m about to finish his book Friday. Certainly a controversial work, as pretty much all his later books are. Some people hate it, some people love it. I’ve thought that, so far, it’s been an enjoyable read that hasn’t really gone anywhere yet… at least not where I expected it to. It’s made some points about society that are worth thought… but that’s Heinlein. What is perhaps more worth note is the stunning degree to which characters use a communications network to research all manner of topics and can find information on anything.. even watch a live concert years after it finished. He also goes so far as to state in his book that once you put data into this system, it lives forever and can always be found somewhere.
Sound like anything you know? Sound like anything from 1982, when the book was published? The answers are yes and no, of course. While the internet did exist, it was essentially unheard of outside of military uses, and you’d have to be a sci-fi author to… ah.
Of course, he also includes flying anti-grav cars, interstellar travel at 18x the speed of light, super-ultra batteries that can power a house for forever, and a some crazy intercontinental travel system, so maybe 1 out of 6 isn’t all that great. Oh, and genetic engineering/design of human babies and partially human creatures… but maybe we don’t write that one off just yet.
Heinlein also does have some relevant commentary on energy supplies that, along with his depiction of the interweb, fits right in with today (Shipstone is the name of the guy who invented these super ultra batteries):
…Shipstone saw at once that the problem was not a shortage of energy but lay in the transporting of energy…. Those who spoke of “energy scarcity” and of “conserving energy” simply did not understand the situation. The sky was “raining soup”; what was need was a bucket in which to carry it.
It doesn’t take a sci-fi author to make this statement, but it does put it in a frame that most people do not (or can not) put it in. There is nothing special about the energy of oil. It has merely been congealed into a form easy to transport and convenient to burn. Same for coal, although you can’t push it through a pipeline. Natural gas is harder to transport… because its a gas and it takes up so much damn room. You can pressurize it and liquefy it, but that’s less convenient… less safe. The energy is the same in all of it, in the end.
By the way, Sandworms of Dune? Come on! Did Herbert die in the middle of that book and have a couple hacks finish it for him?
What’s that?
I was so disappointed by the palpable give up exhibited in the last 1/3 of that book it made me want to dig up an earthworm, mutate it until it became a sand trout and started turning earth into Dune, then wait until a sand worm grew and capture it, torture it and send the pieces encased in a giant bucket of water to Anderson and baby Herbert for their role in that farce.
Herbert and Heinlein… two cranky old sci fi authors with big opinions that are fun to read.
Poly want a cracker?
Stephanie Seymour
Six String
The Labor Department reported that consumer prices jumped 1.1 percent last month, much worse than had been expected. Energy prices rocketed upward by 6.6 percent, reflecting big gains for gasoline, home heating oil and natural gas.
Bernanke’s comments underscored the bind the central bank is in, caught between a faltering economy that is struggling to overcome a prolonged housing slump and a severe credit squeeze, and the risk that inflation would move higher.
Many analysts believe that the central bank is likely to leave interest rates unchanged for the rest of the year out of concern that any tightening of credit policy could send the economy into an even worse tailspin.
Over the past 12 months, consumer inflation is up by 5 percent, the largest year-over-year gain since a similar 5 percent rise in May 1991.
Yes, and 1991 was a grand time in the economy.
Core inflation, which excludes energy and food, showed rising pressures too with an increase of 0.3 percent in June, up from a 0.2 percent gain in May and the biggest one-month rise since January.
This increase reflected a 4.5 percent jump in airline ticket prices, the biggest one-month rise for airline fares since March 2000.
Airline tickets? Really? Good lord, talk about discretionary spending.
Some good points from this and other stuff.
A) The media is focusing on the total inflation number now, trumpeting the 1.1% increase in June instead of giving center stage to the “core” inflation number. While I’m still TOTALLY baffled why airline tickets would be included in anything “core”, I take comfort in knowing that the media is almost never ahead of the curve, or even on the curve. If they are focusing on something terrible, the worst is already past.
B) I saw on the news last night (while on the treadmill) a graphic that 81% of Americans have negative feelings about the economy now, up from 61% a few months ago. This is a great sign because, sorry for the offense, the public is generally clueless when it comes to the economy and its opinion really only reflects what has happened in the last 3 to 6 months. Now that it’s a general concensus that the economy is terrible and doomed, it’s probably a signal that the worst is over.
For informational purposes:
1 month rankings for discussed or relevant stocks:
DRYS
ISRG (still not crazy about this one, so suck it)
UNP
*SP 500 Index*
BNI
NATI
USG
BAC
Strummin,
Jesse Jane
Technically Directing
Despite the relatively good showing on the market yesterday, I still do not see anything good in the near to medium term future. The Dow is at just under 12,000 before open today, but I believe we’re much more likely to see 11 or even 10,000 before we see 13,000 again.
Technically, I admit defeat because the DOW did make it back to 13,000, if only for a few days. In my heart, though…
I fucking told you so. I hell damn god told you so. Shit.
Also on that day nearly 4 months ago, I mentioned the falling dollar. Today we’re about in the same arena as we were back then as far as the strength of the dollar goes, but we’ve lost more ground against the Euro: they’ve taken a harder stance on interest rates and inflation and their currency has appreciated as a result.
AND on that day I congratulated myself for pinning down National City as “bank most likely to fail”. Well, Indymac failed first (although I doubt I would have thought about that one if you’d given me 6 hours and a blank sheet of paper), but if you bought NCCstock 4 months ago, I doubt you’re really pleased with the result. (You’ve lost 64% of your money as of right now and NCC actually had to release a press statement denying that they were experiencing a bank run yesterday.)
I’d still stay away from NCC. And Fannie Mae (FNM) and Freddie Mac (FRE).
If you’ve gotten into Dryships, and you’re wondering about the wisdom or you’re not sure you can handle the volatility, I say: patience. Wait for it. I wish I could have timed my investments better and jumped in at $68 instead of 85. And 105. And 85. And 85. And 79. And 77. And 68. And 75.
Yet Dryships has STILL outperformed the Dow, NASDAQ, and SP 500 over the last month, last 3 months, and last 6 months. So, you haven’t lost as much money as you could have.
Have faith in DRYS. By the way, the acquisition of Ocean Rig is officially complete, if trivia like that is important.
Where’s the market heading now? I no longer have the deep feeling of gloom that I did four months ago, and even though I questioned my gut feeling as the market rode back up to 13K it never felt right. Bank failures are lagging indicators of the economy. Banks that have failed or will fail were mortally wounded months ago (although a bank run, senator inspired or not, is still the most lethal thing to a bank).
I think we’re near the bottom. Are good times ahead? Let’s not start the party yet. The DOW could still touch 10K, but I think a return to 12 thousand is more likely than 10, and there is still plenty of turmoil ahead.
Kneel before boats,
Rembrandt
