Thursday, April 03, 2008
Error Message of the Day
An error occurred sending mail: Unable to connect to SMTP server server name. The server may be down or may be incorrectly configured. Please verify that your Mail/News account settings are correct and try again. —Thunderbird error message
The Mozillazine Knowledge Base helpfully explains—
This error is never caused by the server being down or incorrectly configured.
Scandal of the Day
Max Mosley, the president of the FIA [Fédération Internationale de l'Automobile], has said that he spoke in German during a sado-masochistic orgy with five prostitutes not because he was fantasising about being a Nazi but because several of the prostitutes involved were German speakers.
I'm glad that Mosley cleared that up. Gorman goes on to write—
The News of the World alleged that Mosley, who is facing calls to resign from one of the most powerful jobs in motor sport, spanked at least one prostitute with a leather strap and counted out the strokes in German as he did so. The paper claimed that this was evidence of a Nazi-style fantasy on the part of Mosley and it also alleged that the FIA president engaged in role play as a concentration camp inmate during the five-hour orgy in a West London flat last Friday.
Damn! Why are British sex scandals always so entertaining? I feel almost embarrassed by America's lack of innovation in the field.
What will it take for us to catch up? Some feel the effort may require a rigid class system and private school education. The Republicans have been working on it.
Wednesday, April 02, 2008
Headline of the Day
USA 2008: The Great Depression —The Independent
While American economists and politicians declare that it's too soon to tell if the economy has entered a recession, Britain's Independent appears to have tired of the bullshit—
Dismal projections by the Congressional Budget Office in Washington suggest that in the fiscal year starting in October, 28 million people in the US will be using government food stamps to buy essential groceries, the highest level since the food assistance programme was introduced in the 1960s.
Forty states are reporting increases in applications for the stamps, actually electronic cards that are filled automatically once a month by the government and are swiped by shoppers at the till, in the 12 months from December 2006. At least six states, including Florida, Arizona and Maryland, have had a 10 per cent increase in the past year.
In Rhode Island, the segment of the population on food stamps has risen by 18 per cent in two years.
And as the dollar continues to fall, so does the relative value of food stamps—
The US Department of Agriculture says the cost of feeding a low-income family of four has risen 6 per cent in 12 months. "The amount of food stamps per household hasn't gone up with the food costs," says Dayna Ballantyne, who runs a food bank in Des Moines, Iowa. "Our clients are finding they aren't able to purchase food like they used to."
Tuesday, April 01, 2008
Make the most from your catastrophes!
(And WIN valuable prizes!)
Yesterday I declined to review the consequences to American society (and to the rest of the world) of an economic meltdown that is in all likelihood unstoppable. Some features of the economic madness may be reversible and at least some of the consequences may be postponed in the short term. But what the pundits are now referring to as a "crisis" or a "crunch" of one form or another is quite a bit more than that.
A psychological trick I always play on myself to resolve anxiety is to picture the worst-case scenario in any anxiety producing situation. If I can survive that it relaxes me because I realise things aren't all that bad.
I don't know if the Altucher Anxiety Alleviator was suggested by his therapist or if it came to him independently as he was climbing the guardrail of London Bridge.
While the Altucher method may not work for absolutely everyone, I know that readers of Simply Appalling need to relax a bit, so I thought I'd pass along Altucher's catastrophes for you to contemplate and transcend—
• Meteor hits the world. What are the odds of a meteor hitting? When have we come close? How big does the meteor have to be? What would happen?
• World financial collapse triggered by a bank collapse. Thank you Bear Stearns (NYSE:BSC) for this one. If the human race loses faith in the dollar it might plunge us back into caveman times. How can it happen? What happens if nobody knows how to value the $200,000bn in derivative bets out there?
• We run out of oil. Super investors T. Boone Pickens and Peter Thiel are on top of this one and placing their bets accordingly. The Middle East would plunge into chaos, industry would grind to a halt etc.
• We run out of clean water. This is the only one that will probably happen within the next 30 years. Only 0.001 per cent of the world's water is drinkable. The supply is never going to change but the demand is rocketing thanks to the modernisation of the developing world. More than half of all hospital stays in the world are due to water-related diseases.
• Flu pandemic.
• Terrorism. It's pretty easy to build a dirty bomb, or stage a bioterror attack on our water or air supply.
• Alien invasion. OK, this is somewhat tongue in cheek, but let's assume there's at least one civilisation out there more sophisticated than ours.
• All the bees die. Bees have been mysteriously disappearing, and Albert Einstein is often mistakenly quoted as saying that if bees suddenly disappeared, people would die out.
• The oceans collapse (all the species in them die). The oceans are eroding and species of fish are disappearing.
• The Amazon rain forest dies.
• Nanotechnology goes awry. Once cellular computers can replicate themselves, what if there's a bug and they sweep over the planet via superfast replication?
• Major particle accelerator accident.
• Biotech experiment unleashes disease.
• Ozone layer disappears.
• Everyone gets depressed. One in five people are clinically depressed and almost 50 per cent of people have some mental disorder. The situation is getting worse with global economic development. What if we all lose the will to live?
• Encounter with a rogue black hole. What happens if Earth runs into one?
• Giant solar flare.
• Global warming.
• Nuclear war.
• Robot takeover.
• Biblical apocalypse.
• Major earthquake.
• Category-five hurricanes on New York and other cities.
• Everyone moves to a virtual reality.
• Massive tsunamis.
• Evolution wipes out the human race. We simply start getting age-related diseases earlier.
• Cosmic-ray blast from a nearby exploding star.
• Volcano spreads ash all over the planet.
If after going through this list you find that you're still experiencing anxiety, please advise me at once so that I can provide you with additional material.
Altucher, ever the entrepreneur, hopes to turn his catastrophes into a book and go on the talkshow circuit, which is probably wise when you consider the state of the hedge funds. For my part, I'm hoping to have my bomb-shelter completed and stocked by summer.
1There's little wonder that Altucher has been having deep thoughts. He manages a fund of hedge funds and has authored three books, the latest (2006) entitled SuperCash: The New Hedge Fund Capitalism.
One reviewer wrote—
Altucher describes in easy-to-understand terms the strategies used by the smartest managers in the world—those who are running the hottest hedge funds—to show how they are making money today. SuperCa$h is a great primer for those who are looking to trade like the pros. And it helps that Altucher writes in a clear and fun style!
And another reviewer, unidentified (Altucher, we wonder), has concluded—
As hedge funds have become more mainstream, some of their strategies are less capable of producing extraordinary returns. In response, hedge fund managers and other sophisticated investors have found new ways to turn cash into supercash. Examine these new ways with hedge fund manager James Altucher and supersize your returns.
Monday, March 31, 2008
Good news about the economy
I've been meaning to write a comprehensive post on the fallout to expect from the U.S. economic situation. But aside from the fact that I'm lazy and that even a cursory description would run on for pages, I doubt that readers would have the stomach to read it. So let's look at the upside, which is considerably briefer.
The greatest short-term benefit of this debacle may be an end to the Iraq war. At the Presidential level, I hold no hope that Barack Obama will bring the occupation of Iraq to a swift end1—and that's ditto for Hillary. John McCain's prescription for ending the occupation is to intensify it. The House and Senate, many of whose members were (or will be) elected to end the war, will find the money from the defense industry irresistible.
The truth is that we did not have the money to go to war in the first place. But like home owners who took out loans and mortgages on the expectation that the value of their assets would rise to cover the debt, the Bush administration believed that the costs would be more than offset by the profits to be reaped from gaining control of the world's second largest oil reserve. From a longer perspective, it was hoped that establishment of permanent military bases in the heart of the Middle East would consolidate U.S.–Israeli hegemony in the region and guarantee the flow of even greater profits. Fortunately or unfortunately, the anticipated gusher did not come in. Recently the cost of the war has been conservatively estimated by Nobel economist Joseph Stiglitz to be around $3 trillion.
It will be increasingly difficult for politicians to explain to the baby-boomer generation that their Social Security and Medicare are in peril because the money to fix the problem has been wasted on a useless war. In fact, this indisputable fact may come as a saving grace to the Democrats, who in addition to their own propensity for graft simply cannot allow themselves to be called "defeatists" and pussies. They will have a firm economic ground for ending the war, and that ground will not shift no matter how much name-calling the Republicans engage in.
Have you been driving less lately? If so, you're not alone. People are beginning to consolidate errands to save gasoline, walk or bicycle where possible and avail themselves of that socialist vehicle known as public transportation. These trends will continue.
A recent auto show found that people were far more interested in increasing their mileage than in upping their tonnage. SUVs are becoming déclassé, and if you own a pick-up, you'd better keep some hay in the back of it. The deal just announced by India's Tata Motors to buy the gas-guzzlers Jaguar and Land Rover from Ford proves that you don't have to be an American executive to be stupid. The immediate result has been a drop in the company's credit rating. (Don't be surprised if the deal falls through.)
These are exactly the same consequences—including less profit for American automakers—that would have resulted if the government had taxed gasoline to approximate the environmental cost. But the money will now go to petroleum megacorporations or overseas. While the opportunity to bolster government coffers has been lost, the reduction in the American "carbon footprint" should be tangible. Maybe Bush was right—we didn't need Kyoto after all.
Then there's food. The diesel used by truckers now costs more than gasoline, and transportation is said to account for 10% of food costs. Grocery chains will be "incentivized" to buy food produced closer to home, and the farming industry will find itself suddenly attracted to the benefits of organic production, since the cost of petroleum-based fertilizers can be expected to rise. In addition to its doctors, Cuba may find itself with another valuable export—organic agriculturalists. And finally we may see a renaissance in home gardening reminiscent of the "Victory Gardens" of World War II.
The trade treaties signed with Latin America may in the end have less impact than we feared. For instance, asparagus coming to the U.S. from Chile could be speared with a hefty price tag. Many consumers may decide to wait until spring when they can buy it at the local market.
In February a "milestone" was announced. According to the Pew Center on the States,
For the first time in history more than one in every 100 adults in America are in jail or prison—a fact that significantly impacts state budgets without delivering a clear return on public safety....
As prison populations expand, costs to states are on the rise. Last year alone, states spent more than $49 billion on corrections, up from $11 billion 20 years before. However, the national recidivism rate remains virtually unchanged, with about half of released inmates returning to jail or prison within three years. And while violent criminals and other serious offenders account for some of the growth, many inmates are low-level offenders or people who have violated the terms of their probation or parole.
With state budgets in freefall the attraction of locking up more and more citizens is beginning to pale. Even Texas, which is the leading incarcerator among the States, countenanced a miniscule "dip" in its prison population last year. There's a substantial possibility that the U.S. will cede its preeminence as the world's leading incarcerator to one of those other bastions of freedom, the Russian Federation and China, which have plenty of cash on hand.
I do not know, from a sociologist's perspective, all the reasons that the citizens have remained torporous in the face of the appalling facts cited above. But one reason does not require a study to ferret out—they're too busy working. In fact they're working too hard to stay even minimally informed. But take away their homes and their jobs and they'll be looking for some answers.
We've had a taste of this in the past few weeks. I was quite surprised to see a demonstration at the Bear Stearns headquarters after the announcement of the government bailout. Not only did this protest receive wide coverage, but unlike antiwar protests, the stories were quite friendly. Take, for instance, this NY Daily News account—
About 150 seething homeowners forced their way into Bear Stearns' midtown headquarters Wednesday - furious that tax dollars were used to bail out the beleaguered investment firm.
Chanting "Help Main Street, not Wall Street!" the protesters poured into the E. 47th St. building, pushing passed two burly security guards who tried to keep them from barreling through the revolving doors.
Inside, the raucous but orderly demonstrators chanted, waved signs and blew horns as a crowd of stunned bankers looked on.
The demonstrators shuffled out of the lobby at about 1 p.m. after a phalanx of cops gathered outside. No arrests were made.
Bruce Marks, founder of the homeownership organization, called the protest an extraordinary success.
"The security guards couldn't stop us," he said. "We took over their house."
Wow! No description of what the people were wearing. No implications that the group consisted of the idle homeless. And no "balance" at the end of the story to show how pointless it all was.
Or take the independent truckers. They're talking about a one-day strike tomorrow to protest the price of diesel. And just talking about an unorganized strike is big news in the United States.
When my story from last week about plans for a truckers’ strike appeared Monday on the high-traffic Drudge Report Web site, the calls and e-mails poured in.
I heard from CNN in Atlanta as well as small-time radio stations across the nation. I hung up the phone after listening to a dozen new messages and had four more come in during the few minutes I was tying up the line.
The potential impact of this thing is tremendous, and people are beginning to notice.
The call for a drivers’ shutdown started small — with an owner/operator who hauls cattle in Missouri. The trucker, Dan Little, posted his plans to shut down on his Web site, and someone brought it to our attention at the Times.
Now it’s been brought to the attention of thousands, and Little’s plan to park his rig, beginning April 1, has truckers lining up across the nation to join him.
Several non-truckers wanted to know how they could help the drivers, and some people said they would park their passenger vehicles in a show of solidarity.
A clear majority of the people I heard from were sympathetic to the drivers....
Little has said that the last thing he wants to do is hurt the country that he loves. Truck drivers are some patriotic folks, he pointed out. But many feel backed into a corner by the threat of bankruptcy.
“All I know is that I have to take a stand,” he said. “My livelihood is at stake.”
As I was finishing this column, Betty Cornette called from Louisville, Ky., and said that her truck-driving brother has had to call it quits because of fuel and insurance costs.
She made this prediction: “Everybody’s going to have to suffer before they understand what’s happening to these truckers.”
"Show of solidarity" with the truckers? It's all quite cheering.
We're not talking about liberals here. Aside from the neocons, who could be more pro-war than the independent truckers? Will they get the message that a major cause for the rise in their fuel prices is the war? And which will they prefer—the war or their livelihoods?
And an investment tip
Readers who were around to enjoy the Sixties will undoubtedly remember this famous bit of dialog from The Graduate—
Mr. McGuire: I want to say one word to you. Just one word.
Benjamin: Yes, sir.
Mr. McGuire: Are you listening?
Benjamin: Yes, I am.
Mr. McGuire: Plastics.
It's time to adjust your portfolio. You can forget plastics—they're petroleum-based. To paraphrase Mr. McGuire, I have just one word for you—SOUP. We're going to be eating a lot of it.
1You may remember last month's brouhaha about Barack's campaign advisor Samantha Powers calling Hillary "a monster." But she revealed something far more important in her interview with Stephen Sackur—
Sackur: So what the American public thinks is a commitment to get combat forces out in 16 months isn't a commitment, eh?
Powers: It’s a best-case scenario.