Bad Debt, Good Property

Two stories, confirming the unsustainability of the debt based economic shell game that the globalized banking sector has been advancing the past several years. They both involve about the same amount of money, 15 or 16 billion USD. There are two problems: one is the bank’s wet dream of a massive pile of debt running headlong into the realities of democratic institutions, where the debt is just canceled, en masse:


India cancels small farmers’ debt

The Indian government is to cancel the entire debt of the country’s small farmers in a giant scheme that will cost 600bn rupees ($15bn; £7.6bn).
The move is a centrepiece of India’s latest budget, with the government also increasing education spending by 20% and health funding by 15%.

Of course, debt canceled gets paid by someone, in this case the Indian Govt, but let’s see how long their commitment lasts… And the other problem is the mounting fallout from the sub-prime mess, first reported here in April of last year:

HSBC ‘to unveil $16bn writedown’

The UK’s largest bank HSBC is expected to unveil about $16bn (£8.1bn) of losses for 2007, but will still make an annual profit, reports suggest.

The firm’s annual results out on Monday will show that the bad debt charge is mostly related to the crumbling US housing market and consumer blues.

Reminds me of the famous line: “When you owe the bank ten thousand dollars, you have a problem, when you owe the bank ten million dollars, the bank has a problem…” Recall Hillary’s promise of a moratorium on repossessions, and that’s just the tip of the populist iceberg. Bottom line: that debt is all about to collapse. See this great post from the blog Sudden Debt:

The People’s Bank of the USA

As the credit crisis expands like ripples in a pond, politicians are waking up to the fact that they “must do something”. Homeowners upside-down on their mortgages (i.e. they owe more than their homes are worth) are their current focus. The New York Times reports that as many as 8.8 million homeowners may be under water. As I have said in previous posts, the chief driver of mortgage defaults is exactly such a condition, leading to “jingle mail”.

Panicked bankers are now all over Washington suggesting (“imploring” describes it better) that the federal government should buy and guarantee their risky mortgages, effectively turning Uncle Sam into the Peoples’ Bank of The United States.

Don’t you just love it? When times are good, bankers are all for invisible hands, laissez faire and Friedmanite free markets; but let Mr. Market give them a bit of the stick and they turn bolshier than Rosa and Leon (that’s Luxembourg and Trotsky, for those less versed in communist hagiography).

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Bad Debt, Good Property

Tim Lee suddenly trusts big government?

Over at TLF, Tim Lee posts about the InfraGard brouhaha, which started with an article by Matt Rothschild over at the Progressive, and also generated a post over at the Future of Freedom Foundation, a libertarian think tank. When the Progressive and a libertarian think tank both agree something is dangerous, it’s got to be interesting to find out why two so very different groups agree.

I find Tim Lee strangely trusting in his post which says:

Is InfraGard a Privacy Threat?

Gary D. Barnett at the Libertarian Future of Freedom Foundation sounds the alarm about InfraGard, a collaboration between the FBI and private-sector people interested in security. Barnett paints InfraGard as a sinister effort by the FBI to get private information about American citizens.

Jim Lippard has a different perspective, explaining in some detail what InfraGard does, and convincing me, at least, that there’s nothing especially sinister going on. It’s perfectly legitimate for law enforcement to cooperate with the private sector to inform one another of potential security threats. Obviously, companies shouldn’t disclose their customers’ private information without a warrant, but Barnett offers no evidence that companies do that as part of InfraGard. It’s great that Barnett is working to ferret out potential threats to Americans’ privacy, but it looks like he might have raised the alarm prematurely in this case.

I’m surprised Tim seems to trust big government, giving them a ‘free pass’ to create an entity that’s designed to avoid oversight, and is potentially very powerful. And so my response (edited for grammar and clarity) is:

Continue reading “Tim Lee suddenly trusts big government?”

Tim Lee suddenly trusts big government?

The ’09 F9 effect’ strikes (another) clueless corporation…

Well, it took a whole day for wikileaks to be mirrored and redistributed, and now thousands of people are redistributing the wikileaks content. I am happy to say that I am one of them (using peer to peer technology). It would be immoral not to redistribute that content, especially since Julius Baer has tried to suppress the content. the entire site, to get their content taken down.

In any case here is a link to the wikileaks site: http://88.80.13.160/wiki/Wikileaks

There is a big stink here. There is no reason for the judge to put a lock-down on the whole site. In addition, the DNS attack that has been reported by Wired Magazine seems strange–would a bank pay for a DNS attack? And the fire…?

Continue reading “The ’09 F9 effect’ strikes (another) clueless corporation…”

The ’09 F9 effect’ strikes (another) clueless corporation…

Where is wikileaks? It will be back soon, courtesy of the ’09 F9 effect’ (updated December 4th, 2010)

As of this evening (December 4th 2010)I could still get wikileaks here: http://wikileaks.nl/

It seems Julius Baer, the venerable Swiss Bank, has managed to suppress the site wikileaks. The site was a magnet for whistle blowers of all kinds, but now has been taken off-line in USA. The site in India is still on-line, and can be found with a little googling. In any case, just as we’ve observed with the 09 F9 thing, it is nearly impossible to take some piece of information down, and the act of trying to take it down creates a will to replicate that information. Let’s call that the ’09 F9 effect.’ Notice that the Bank does not allege that the documents showing tax evasion and money laundering are forgeries, just that they are confidential. So are there protections for whistle-blowers or not? More later.

Continue reading “Where is wikileaks? It will be back soon, courtesy of the ’09 F9 effect’ (updated December 4th, 2010)”

Where is wikileaks? It will be back soon, courtesy of the ’09 F9 effect’ (updated December 4th, 2010)

Now we know the Mall owners are scared, really scared, of new competition (revised 15 November 2007)

Here’s an interesting and important legal decision that will have some very real urban design/architectural implications. It’s yet another example of small, local and very particularized developments eclipsing centralized, consolidated, and homogenized ones.

It’s also interesting from another point of view: what information we get from this lawsuit. Lawsuits are actually very efficient ways of distributing information, as each lawsuit reveals things through the adversarial process that wouldn’t always come out. In this case the information is clear: Caruso’s development model is such a threat that his competition thought the legal risk they placed themselves in was worth it. That gives an insight as to how dangerous they thought this competition is, and what means they have to counter it. They think this competition is dangerous, and they don’t have a clear way of adapting to this threat.

And we see the theme of competition between things of different scales that was discussed here. The quote from Schumpeter (I’ll get to it in just a bit) that I just love also talks about changing scales. (I hadn’t noticed that before! How could I miss that?)

Continue reading “Now we know the Mall owners are scared, really scared, of new competition (revised 15 November 2007)”

Now we know the Mall owners are scared, really scared, of new competition (revised 15 November 2007)