Disqus - Latest Comments for mikkel

Re: Sniper Execution

mikkel — Tue, 10 Nov 2009 17:06:18 -0000

I don't get your point, what's it have to do with anything about being for the death penalty? The arguments against are that innocent people get killed, it is applied unevenly, it costs more than life in prison and there is no deterrent effect. What aspect of this is an argument against any of those points?

Re: Goldman Sachs CEO: “I’m Doing God’s Work”

mikkel — Mon, 09 Nov 2009 13:52:26 -0000

Here is an interesting take on how the US has become like post-communist Eastern Europe.

Re: Fort Hood Twitter Atrocity

mikkel — Sun, 08 Nov 2009 14:20:58 -0000

I think there is a false equivalence here. The Iranian protests were fundamentally about a mass political movement and getting sympathy/riling up support was absolutely crucial. That said, at the time I thought the whole "Twitter will save us" was vastly overrated, and started to write a post called "Why The Iranian Revolution Marks The Apex Of Twitter" that would have argued the reasons why instant social web networking is not effective for mass political movements...however I got busy and by the time I got around to it the issue wasn't that topical. However that argument was more about the ease that authorities can use it to spread false information making the signal to noise ratio drop to zero and causing a lack of faith in any reports.

The Fort Hood thing was entirely different. It was not a political moment, no one that wasn't involved could do anything to help and there was no reason why people had to know now except for the next of kin, etc. That usage was entirely inappropriate. To make matters worse, correct information had no utility value, but misinformation could potentially have had (has had?) grave consequences. That's because it creates a highly emotional reaction in the consumers that cannot necessarily be corrected with facts later on (see Greenwald's point).

There is also the general (and growing problem) of how that approach to life cuts people off from fully experiencing their surroundings and how it disrupts empathy formation during conversations, but that's a slightly different issue.

Re: Steele: GOP “Transcendent”

mikkel — Wed, 04 Nov 2009 14:47:40 -0000

I was going to offer the stage to anyone that had their own additions so feel free.

Re: Steele: GOP “Transcendent”

mikkel — Wed, 04 Nov 2009 14:47:02 -0000

Oh so it's Steele that is the issue? I thought it was more about the puns on allusions to 150 year old literature.

Re: The man who predicted the financial crisis, Part I

mikkel — Wed, 04 Nov 2009 10:54:54 -0000

"And so he did. In hindsight, we logically conclude that Paulson is brilliant. But who was saying that three years ago?"

The entire economic blogosphere...

I wanted to do this back then but I didn't have access to the CDS market. I spent a long time trying to figure out whether there was anything a normal person could use to tap into it but never found anything.

Re: Too Smart To Succeed

mikkel — Wed, 04 Nov 2009 10:12:29 -0000

Uh Austin, did you think that the Soviets were dumb? Michael's entire point is the primary rallying cry of conservatism and non-centralization of power...

He's entirely correct. The people in charge of the economy (regardless of party) are insanely intelligent, far too much for their own good because you have to be that smart to justify their BS outlook. Intelligence without wisdom is nothing.

Re: Goldman Sachs’ Stolen Umbrellas

mikkel — Mon, 02 Nov 2009 11:31:43 -0000

Warren Buffett called exotic derivatives "weapons of financial mass destruction" with the reasoning that even if you made the correct call by doing what GS did you would still lose money. The reason is because in a crash the counterparty (e.g. AIG) would fail from having too much to pay out and so your hedges will collapse.

Of course GS got around this by being the government "advisor" on what to do about AIG and recommended (with the approval of Geithner) that the government pay out at full. Thus they helped contribute to the downfall of the system and got around the inevitable downfall by getting the government to make them whole.

Socialize the losses, privatize the profits, indeed.

Re: Update About “Most Mortgages Are Probably Invalid”

mikkel — Fri, 30 Oct 2009 00:57:58 -0000

Yes I was putting together a post on that sometime tomorrow. I don't want it to just be a quick driveby post but a more detailed post that draws the parallels between what they are doing and what Bush did regarding torture. While both operated to various degrees over the last (especially 30) years, I find the formalization of them into the legal structure to be highly disturbing and a threat to law and order and our government on a core level.

Just as I said with Bush and his programs...even if you did think Obama had the best judgement, the fact is that it gives a dictatorial amount of power to the Executive in a formal way, and that opens the gates for problems down the line.

Re: The GDP Number Is A Good Start, But…

mikkel — Thu, 29 Oct 2009 16:24:22 -0000

As long as people keep buying our debt that's not a bad strategy...we're exporting a hell of a lot of inflation to emerging markets, and they are helping to keep the dollar artificially propped up...so you'd get the upside from the inflation raising asset values there and don't get the downside of depreciation killing you.

You just have to hope you don't get caught in another flow of funds reversal.

Re: Animals and Humans

mikkel — Thu, 29 Oct 2009 13:48:32 -0000

You can teach a cat to be toilet trained, but I've read it's not advisable to train them how to actually flush the toilet because most cats are mesmerized with running water and will flush it for hours on end.

Still, most of the stuff I've read about how to train them takes the cat perspective and how you have to coopt their natural impulses to channel it into a human oriented appliance.

Re: Animals and Humans

mikkel — Thu, 29 Oct 2009 11:12:59 -0000

Yes, chimps and gorillas have complex social rules that really come out when there is a death, but for my money I'd say the most amazing display is amongst elephants. Not only are the important elephants given "funerals" but they send out the call over hundreds of miles and elephants from other groups come to "give condolences" and leave while the host herd waits for days. That is incredible to me.

It also highlights another point that has been long overlooked but is starting to get more attention, and that is how important social mores are for trying to infer intelligence. Elephants have the most complex death rites I know of, and given that it'd be tempting to say that they were really intelligent.

While they are fairly intelligent, it's hard to judge how much. That's because most intelligent creatures are predators and are either solitary or based on small groups, while elephants have scalable herds and social structures that are completely dependent on the distribution of food available. You'd never see a chimp or gorilla give respect to a different clan because their social structure would forbid it. Similarly, the great apes are really touchy about the dominance of the alpha male and the amount of display shown seems to be related somehow to his acquiescence. Elephants have a more distributed social power structure.

Re: Animals and Humans

mikkel — Wed, 28 Oct 2009 19:21:11 -0000

People seem to have a hard time hitting the right balance between appreciating animal capabilities for intelligence, emotion and even "morality" while not over anthropomorphizing them. In the past we (well scientifically speaking) have treated animals as more like machines that are preprogrammed and have nothing in common with us, but all too often I hear people that object to that going overboard in assuming that animals do things for the same reason.

When I heard about the Dog Whisperer I thought he would just be along the same lines (like so many pet psychologists that analyze behavior as they were furry people) but he does the best job I've seen of respecting ability while also making it clear that motivations and communication are entirely different in dogs and that by not being aware of that, it makes a lot of dogs upset.

Re: 2009=1933?

mikkel — Wed, 28 Oct 2009 12:26:24 -0000

I should have been more specific. I was referring explicitly to propping up asset prices, which they think is the #1 most important thing for some reason.

It is amazing how fast consumer debt is contracting, and it's picking up speed, with the credit card companies committing suicide by changing APR to 30%, charging fees for not carrying a balance, etc. There seems to be near full on revolt.

I shudder to think what state budgets will look like next year. They were projected to be far worse than this year even with a return to above average growth. Needless to say that won't happen and even with "surprising" growth in the last quarter, their budgets for this year have already fallen out of whack again.

That said, the banks do have nearly $1 trillion in excess reserves saved up, the government is still funneling billions of dollars into any company that claims to be important and we are back to bubble levels in many markets.

I think it'll come down to chicken. Will people have the political will to stand up against entities that are stealing from current and future prosperity...which will surely lead to a severe and instant shock, or will they give in to propaganda and malaise and let there be prolonged (at least until the chinese stop buying bonds) misery?

Re: 2009=1933?

mikkel — Wed, 28 Oct 2009 11:37:32 -0000

"After the crash of 1929, the country’s GDP dropped sharply, but again reached 1929 levels by the end of 1933."

Uh, that's not true. It did start rising from the trough then.

For my money I think we're more like 1930-31 still...although it may be quite protracted. By that I mean I don't think we've hit bottom. I thought that we were going to start the descent two months ago, but all the stimulus worked better than I imagined, so maybe I'm wrong, but the underlying fundamentals are still decreasing.

That's why the current situation index for consumer confidence is continuing to decrease.

Re: Texas, the Eyes of Justice Are Upon You (Guest Voice)

mikkel — Mon, 26 Oct 2009 18:02:27 -0000

The "experts" purportedly used logic that had been disproven a few years earlier and operated more on cultural superstition than scientific fact. I don't blame the original investigation because it did happen only after the field started to become more scientifically standardized and I could see why they wouldn't have known. However, it is unconscionable that the facts weren't reexamined and that the original experts didn't know about the prior test cases years later.

Re: Most Mortgages Are Probably Invalid And Courts Are Starting To Notice

mikkel — Mon, 26 Oct 2009 15:44:25 -0000

Yes, it's unfathomable to think about the consequences if this started to become standard practice, yet there appears to be no way to resolve the issue.

In the comments of the Naked Capitalism post there are people that say that in the beginning of securitization this wasn't a problem because they followed the law, but during the last decade they cut corners for more profit and more flexibility.

Re: Most Mortgages Are Probably Invalid And Courts Are Starting To Notice

mikkel — Mon, 26 Oct 2009 15:14:24 -0000

What do you mean by that? I didn't follow that one too closely other than wondering about other parts suppliers.

Re: Can Someone Explain This Math?

mikkel — Sun, 25 Oct 2009 21:41:10 -0000

Did you know that GS was shorting cdos that it was simultaneously selling in another department? How it's not fraudulent to sell "nearly risk free" securities and collecting fees while at the same time opening a major short position is amazing.

Re: Can Someone Explain This Math?

mikkel — Sun, 25 Oct 2009 21:36:51 -0000

Well I don't point the finger at Goldman, I point it at our elected representatives and the populace more generally for allowing them to operate like they have.

Former IMF chiefs, regulators that cleaned up the S&L and sitting Fed governors have all said that there has been complete regulatory capture and the best description of our current system is an oligarchy where every single regulation and law is written to benefit the most powerful entities at the expense of the populace and regional entities.

I'm also kind of surprised you haven't heard about the things that michaelD was referring to (I'd add one, which is temporarily getting rid of mark to market so the Fed could step in and start buying all these "AAA" rated bonds to monetize them). The Dec 2008 thing was that their fiscal year ended in November but the new one started in January. December was just "lost" to history.

Not to mention how Goldman has ripped off the taxpayers indirectly. For instance they were funneled $18 billion through AIG by the government...after they were hired (and thus paid) to determine how to handle AIG cds! Or cit, which was considered a too-moderate-to-fail company since it is responsible for so much mid-tier credit. A few months ago when it was close to bankruptcy, they managed to get $2.3 billion from the government as part of a "deal" with creditors that was supposed to restructure. The main creditor was Goldman which a) made a loan to them at prohibitive interest rates with insane terms and b) was the firm that led new stock issuance to take advantage of the "restructuring."

Of course a few months later it turns out that cit has to due another restructuring or else go into bankruptcy. Well it's going poorly because there is no way that it can last, and if they do declare Goldman will net a profit of $1 billion that they will get in front of creditors (including the government which is expected to lost its entire position since it is in preferred shares).

wfc is also definitely crippled due to its wachovia purchase, which is having outrageous default rates (in part because large parts of their portfolio was actually outright fraudulent). Of course because they are allowed to lie about their current position then they are "adequately capitalized" but in a few weeks mark to market is supposed to start again and -- if it's not delayed -- then instantly all banks will need another bailout or run afoul of regulations. And that's not even talking about current off the book stuff which is supposed to be merged onto the book next year if there is evidence of supporting of the securities (which is true for most credit card securitization according to naked capitalism).

That's why the banks have been saving all the money its being funneled and keeping them as excess reserves (to the tune of nearly $1 trillion).

I could write 10 pages of stuff about how these major banks are front running the government in order to profit and then collect on the backend too, and dozens upon dozens of articles from major regulators and international monetary experts that back all this up and call it "looting" at best.

I believe it was Geithner (but may have been Bernanke) that said that currently the entire banking system was dependent on the government continuing its policy of implicit backing and that if they stopped their MBS purchases and ended that backing (i.e. going back to pre crisis state) then everything would most likely fall apart again.

We have bent over backwards to give them everything they asked for and there are no thanks, available credit is decreasing faster than ever and they are getting record bonuses. The whole "they paid back so they can do what they want" is completely BS because they couldn't do anything without hte government having policies that every single person that foresaw the crisis says is making it worse.

Re: Rape Victims’ Hobson’s Choice

mikkel — Fri, 23 Oct 2009 15:25:17 -0000

Yes I agree with this fully. I am not really making policy arguments as much as moral ones because I have come to the conclusion that the current state of our moral bearings makes it impossible to come up with good policy. That said, I am sympathetic to the argument that extreme centralization of power (both in business and politics) has led to people depersonalizing things which in turn gives them more power which then causes more depersonalizing -- a vicious feedback loop -- and politically speaking that suggests the need to go to more localized power structures.

I will write about this more explicitly at some point as I am kicking around how to phrase things.

Re: Rape Victims’ Hobson’s Choice

mikkel — Fri, 23 Oct 2009 15:11:50 -0000

Yes I'm definitely not in disagreement with you about needing to innovate how to pay for costs. I am merely looking at the system wide level and arguing it should be possible in some form. The way to get there obviously is up for argument.

While it's true end of life decisions should be individual, there is a systemic bias to keep people alive as long as possible, and that greatly influences patient/family decisions. And I agree that there is no way to have an empirical formula, but a lot of cases it's just insane. I bet I could spend a week talking just to my immediate contacts and get three dozen of examples of current cases with multiple organ failure and in need of organ transplant or suffering from something that will kill them in the next few months anyway that are shuttled around from department to department ot get $100k surgery after surgery and go into more and more pain (to the point where they have to be kept unconscious basically the whole time). I do think it's an injustice that this is occurring although I have no idea how to address it. I guess addressing it at all -- without screaming death panels -- would be a start.

It goes back into my general problem with societal egoism, which in this case I think manifests as an unhealthy focus on being alive as opposed to living. I'm not saying this should be addressed politically, I'm talking about a deeper more individual and spiritual argument.

Re: Rape Victims’ Hobson’s Choice

mikkel — Fri, 23 Oct 2009 14:52:38 -0000

I don't know, when people talk about the past they sound like they think they used to be different (inaccurate nostalgia? I'm not old enough to say, but it's rather broad consensus) and when I talk to foreigners they have A LOT different expectation of what corporations should do. I also felt I was too harsh in that comment in blaming corporations as a source. I think it's more that consumers have rewarded the ones that do things merely based on spreadsheets, and that what we have is largely of our own design.

The foreigners I talk to (primarily from India and Europe) are adamant that companies that try to be faceless amoral spreadsheeters lose business in the long term either because people won't frequent them as much or (perhaps more often) they make bad long term decisions for short term gain, and when they mess up there is no sympathy and they go away.

Re: Rape Victims’ Hobson’s Choice

mikkel — Fri, 23 Oct 2009 14:30:42 -0000

I have some numbers but no time to gather them for a couple days as I am leaving.

The short answer is yes..but with caveats. It would have to include systemic changes that people don't want to talk about (such as how much money is wasted on people with very poor quality of life in their final days) and the like.

That's what I meant about the process instead of the outcome, I was just scattered. There is no way to do it currently and the insurance companies can't do much about it as it is so systemic, but there is also the feeling that there is no attempt to try, and talk about what could change in order to make it possible.

I don't mind arguments like "well we can't cover people that are a high cost to insure because of this and this and this and this, that's where we should focus on seeing what is possible." I just am tired of arguments that dehumanize the people involved and suggest they use complex loopholes or not leave their drink around or accept that their financial life is destroyed because they weren't lucky and anyway, tough because I got mine [obviously you're not that type].

Re: Rape Victims’ Hobson’s Choice

mikkel — Fri, 23 Oct 2009 14:02:22 -0000

cs I object more to the process instead of the outcome. I totally disagree that adding everyone will increase costs by definition. I was going to list the ways it could be cut but I see you did it for me.

I would also add to that that there is currently no attempt to control costs at the different levels of the supply chain, which is another issue, and that Rand has projected that if we have a mere 4% annual efficiency increase in productivity (primarily due to better IT infrastructure) then it would save $500 billion-$1 trillion annually in 10 years. That is more than enough to insure everyone that isn't currently. In fact on a prior post I pointed out a Kaiser study that says it will only cost $80 billion more than what is current spent (so in 10 year dollars plus overshoot, let's say $150 billion...still far below the savings projected by Rand).

Now you may argue that insurance companies aren't responsible for all that and can't fix it all, and I agree. But they do have an extremely major part to do, both in moving towards that direction and patient education.

I don't think that for profit companies should be forced to do charity (although I do think that critical areas like this need lots of nonprofit competition) but I also believe that they have a moral social obligation to try to be as upstanding as they can be. At the very least, that is developing a personal relationship with a patient or prospective and making decisions based on that, instead of looking at them as an actuary would. It's not just in this, banks that did the former turned out alright, even lending subprime, while those that did the latter are in awful shape.

A good amount of stories that get people upset are based on stupidity that I will call sociopathic because it shows no empathy. I love the definition of empathy that it's being emotional enough to put yourself in another person's shoes while being objective enough to analyze the situation. A lot of times their behavior isn't empathetic in that they don't care, and they are either going back on their word or they are denying something for a reason that is no good.

If they started being more empathetic and explained how they can't afford to take on high risk people due to systemic factors, explained those and tried to be leaders in changing it, then I believe that vast majority of people would understand their position. However the current feeling (which is correct) is that they are just out to screw you over and it's only when they are legally forced to do something -- or someone has reams of time and knowledge to fight them on their footing -- that they begrudgingly cough up.

And God forbid you don't qualify for HIPAA for whatever reason. You're basically at their mercy then.

This isn't just health care, but corporations in general I'd add.