There are three types of argument a man may make: that of principle, that of policy, and that of politics. Principle, of course, deals with the philosophy of a thing, and whether it is right or wrong to consider pursuing a course of action. Policy deals with the methodology of a course of action. Politics, however, deals with the egos and lower thoughts of men. I succumbed to a political discussion earlier, and it was ill-founded.

As for the rest…

First, I did not mention “transparency” in my discussion for a reason. The idea that men would wish to be transparent is a noble sentiment, but ridiculous to expect. Would you wish to broadcast your ideas and motivations for each major decision you are forced to make in your life? Heavens no! We wish to make a decision, argue only in support of it, and then leave it alone. To expect more of our politicians is absurd.

“Transparency” is produced only when it benefits men to reveal certain information about the other. A senator will not reveal his corporate ties unless they are used against him by an opponent. Likewise, if two opponents have both received unsavory corporate contributions, they will not reveal the other’s – this is an understood ideal scenario of game theory. Julian Assange has nothing to lose by revealing the Afghan War Diaries – and, as he probably disagrees with the war, everything to gain. On the contrary, the U.S. government has everything to lose from transparency and nothing to gain.

Mr. Scoville argues that classified documents should always remain classified in the interest of troop safety. Were that the case, the torture at Abu Ghraib in violation of U.S. and international law as well as the questionable behavior of the Blackwater organization. The argument that war crimes are an unfortunate accident of war has been used time and time again. When they are committed by the victor, they can be ignored. When they are committed by our enemy, they must be condemned. We can go back and forth on this.

The fact of the matter is that Wikileaks has not posted any information it has received regarding the war over the past seven months. Any information released to the New York Times (and others) is old news on the front, but new news to the American public. Were Mr. Assange to release documents from the past month, even the past six months, he would draw my condemnation as well. But this is not the case.

Though I have referenced him here, it is also noted that I did not mention Mr. Assange by name anywhere in the article except in the meta-tag. I have no doubt that Mr. Assange no doubt thinks too highly of himself. I also believe that he injects his own opinions into the information, not to his credit. Yet to say that the only information he has posted were the things critical to the U.S. is entirely false. That, of course, is his most recent release. I think that you will find that it is not his only release, and that his fire has been directed against most everyone.

Mr. Scoville’s final point (except for the one about playing piano in fourth grade – which we shall address later) asks “since when did hunting down Osama bin Laden become an issue of political popularity?” This, of course, may be perhaps the heart of the issue. I do not believe Osama bin Laden is behind our involvement in Afghanistan any more. We have plenty of evidence to suggest that he is at least inactive or ineffective (if not dead), and perhaps more to suggest that our funds might be better spent cleaning up our intelligence community.

And yet, in summation, I cannot argue that the concerns about safety would be invalid had Mr. Assange simply delayed release of these documents until the day after the troops were sent home. Mr. Assange has provided no proof that anything occurred in Afghanistan outside the expected. Nor did he uncover anything comparable to Abu Ghraib that existed outside the realm of military strategy. While I believe that Wikileaks is a necessary counterbalance to that which would attempt to remain secret (regardless of its motivations), the organization made a questionable judgment call in timing. This cannot be disputed, and it was not appropriately discussed by myself or Mr. Scoville. For myself, I attempted to deflect criticism about timing. For Mr. Scoville, he attempted to criticize timing while ignoring the positive impact of a Wikileaks in the world. We are but men.

All this being said, it is most interesting to me that Mr. Scoville played piano in fourth grade while the other kids played football. I believe I was getting fitted for glasses in the fourth grade that would never be replaced by contacts – thus dooming me to a life of nerd. We also would both grow up to listen to Phish. Perhaps this says something about us, which we leave to your consideration.

That being said, the recent release of the Afghan War Diaries has raised some serious questions. The White House isn’t quite sure how it wants to play the papers: sometimes saying that they aren’t a big deal while at other times saying they “have the potential to be very harmful” to the U.S. Both the Democrats and Republicans have every reason to be a bit nervous about Wikileaks. For obvious reasons, the papers affect the Democratic administration trying to continue to sell a war that just became a lot more unpopular. Yet the Republicans should not forget that the majority of the papers deal with the war under President Bush, and they can be brought up again.

To be sure, the Afghan War Diaries are not a “smoking gun” in any sense of the word. But they do represent the next stage in the organization. In April, Wikileaks released video of a U.S. helicopter attack on civilians. Now, with the War Diaries, the game has stepped up. The organization has grown in popularity/notoriety, and the U.S. government doesn’t know if it’s a mere fad organization that got lucky, or the start of a trend that would be devastating to government secrecy.

This has bad news written all over it for the President choosing to continue the Afghan war, but it doesn’t mean much better for the Republican party. Their recent past / prospective presidential candidates have been McCain (hawk), Palin (hawk), Gingrich (hawk) and Romney (hawk). Meanwhile, the Tea Party is beginning to muster. One of their choice speakers (Paul) is a notable non-hawk. I won’t say a dove, but he is outspokenly in favor of withdrawing from Iraq and Afghanistan.

I will be watching with intent the discussions held in the wake of the War Diaries leaks. I will be watching more the progress of Wikileaks – for now, the next level of revelations could be far beyond some mixed communications reports from the front.

More potato-y goodness!

Let’s just talk turkey here for a second, or rather, potato. The economic potato, if you will. I mentioned first that the first portion of the potato involved a refocusing of the government away from haphazard bailouts and an endless injection of liquidity into the system.

Let me also say that I believe governments can appropriately stimulate the economy, in a statement that will be a departure from conservative orthodoxy. There are certain industries whose grip over the economy is so strong that a small amount of funding has a large economic multiplier. These industries generally have use in every sector of the economy, but it is a rare meeting of the right industry with the right stimulus.

Next week, the House of Representatives is about to start discussing a portion of the Pickens Plan for energy independence. Specifically, they will be debating the merits of a $64,000 tax credit for trucking firms to buy rigs that run on natural gas. I support this plan.

The $64,000 tax credit can be used toward the acquisition of trucks. However, companies would still be held responsible for installing the refueling infrastructure necessary to fuel these rigs at their own expense. The trucks are useless without refueling stations, and it is questionable that any trucking company wants to buy natural gas trucks without also investing in the infrastructure to power them.

As such, it seems logical to me that trucking companies would first wish to upgrade the infrastructure in areas where their trucks can easily return to a base. For instance, the East Coast may see a new wave of fueling station upgrades as firms strategically install the minimum number of stations needed to make the trek from one key area to another. In a purely hypothetical situation, trains may cart goods from Baltimore to Boston, then natural gas trucks would transport certain goods to the Massachusetts area while standard gasoline trucks were used for the trips into Maine.

As businesses continued to realize cost savings from the natural gas machines, it would then behoove them to expand their infrastructure while foregoing purchases of diesel engines in exchange for the natural gas engines. Diesel engines would eventually be retired and trucking companies would maintain natural gas pumps at the necessary places.

Look what I did: I just stimulated the economy with a temporary $64,000 tax break on natural gas engines. But more than that – I gave us a long term direction.

Two things drove the U.S. economy from 2001 to 2008: war and egregious consumer spending driven by cheap credit. We are now tired of war, and credit is difficult to find. As such, we have no economy; we have no purpose. If we are going to rip out of this recession, the economy needs a leader.

I believe investment in alternative energy is the natural (no pun intended) leader for an improved economy. But infrastructure plays are not cheap, and the technology is not quite ready for a full roll-out. But is it possible that we have mis-judged alternative energy because we are thinking too big?

When I was in D.C., I noticed many public trash cans had solar panels on top. These panels powered a trash compactor within the can. Such was their purpose. High tech trash cans. I also regularly utilize a program at work called “PlanetSaver” which should really be called “Save the Company Money by Installing this Software That Turns Off Your Unused Monitor.” Little Windows scripting and suddenly BAM!, the firm is saving electricity costs. These are alternative energy plays. They are simple, and they work.

Quite frankly, wind farms are ugly. They also generally fail to produce the sheer amount of energy needed. But what if we stopped trying to make them do everything? What if we could sell a farmer a windmill at a reasonable price that would power his irrigation, and that was it?

I believe that for decades, innovation and economic growth valued the new and shiny rather than the efficient. By this, I mean that we have valued the computer for its capabilities to do more, rather than its ability to save time doing stuff we already did. As such, conservation (not only of funds, but of time or labor) as an economic engine has fallen out of favor. Yet there are signs that tell me it may be back.

Groupon, an application that promotes saving via coupon clipping, has recently received a $1 billion valuation. That is HUGE for a company that just sells coupons. Alternative energy may find its way as well when it can speak to companies about its cost-saving benefits. Also, you’ll have to make sure that you don’t have any liberals on the sales team that talk about saving the planet. That can backfire.

I believe cost-cutting will begin to be an economy-driver in and of itself, especially if epic inflation kicks in via the Federal Reserve. Time will tell.

And when we have found a way to distill alternative fuels from potatoes, then you shall have all the more reason to call me Prophet.

The economic potato. See below

All of you need to get your act together, stat. Many of you are still operating in a sort of “pissed at Obama” mode that clouds judgment. You sit there, eating the finest of crabcakes and lobster from the East Coast, unaware that the powers that be have every intention of ripping even the lobster from your mouth. Either you take things too seriously or not seriously enough, or both.

The grand exit from this recession, desired by many, is not going to come in the way that the politicos, economists and financial planners believe it will. They (and many of you) are watching things like housing numbers, consumer spending, etc. for clues to the end of this situation. At the same time, they are decrying Obama “job-killing policies” and saying that mess like “austerity” will somehow fix us.

Idiots. If anyone thinks that austerity is some sort of magic pill that’s going to pull us out of the recession at a rapid-fire pace, they are, in a word, wrong. Austerity has all the possibility of throwing us into Great Recession Round 2, if not approached with the appropriate style. I only endorse austerity as the current Administration (and its enemy Republicans) have no notion of how to use stimulus of any sort.

Clearly, everyone has forgotten what makes successful economies happen. Successful economies occur when gentlemen with large brains see some way of capitalizing on gaps in the market and exploit them. We enter epic economic booms when the world is revolutionized, as was witnessed in the technology bubble of the ’90s. Investors, economists, politicians, etc. are so concerned about bubbles that they have forgotten the benefits of the Internet investment cycle. You are reading this post as a result of those investors and innovators alike. You will see it tweeted later today. The Internet has become so commonplace today that investors have forgotten the risks needed to put it in place.

The 2000s was not an investment cycle like the Internet cycle. We, as a country, did not do anything new. We built and upgraded many houses using styles familiar to architects of the 1990s. We purchased many consumer goods from China. And we patted ourselves on the back as we transitioned to a “service” economy.

I have no issue with a service economy in principle. However, if the economy can be compared to a baked potato, we have forgotten to cook the actual potato out in favor of making amazing butter for it.

When I state that neither the Democrats nor the Republicans understand stimulus, I am talking about potatoes. Democrats have decided to pursue a course of adding salt to the uncooked potato with poorly directed stimulus funding – in essence, by randomly injecting liquidity into the system. Republicans, on the other hand, scream “tax cuts” or “bacon bits” for the potato. Tax cuts for whom? Bush-era tax cuts seem to indicate that unconditional tax cuts do not spur real economic growth in a risk-averse populace.

Before I draw the fire of the conservative types that accidentally read this blog because of George, bear in mind that I am not unilaterally opposed to stimulus or tax cuts. I’m merely saying that neither party seems to be able to do it right. Neither one is cooking the potato.

Thus, I condone the use of austerity, so long as spending reductions outpace any sort of tax cuts. I am not in favor of false austerity, where spending is cut only marginally. If we’re going to do it, we must go big – and here’s why.

1. There are reasonable long-term concerns about the deficit if we are expected to take charge of world growth again. Europe’s debt situation sucks, in a word. China’s looking like its growth may be a little long in the tooth. Latin America doesn’t seem to have the special sauce. So, if it is to be us to take up the economic torch, deficit-reduction plans should be in place.
2. It would be far easier to negotiate currency terms with China if we didn’t need them to buy so much of our debt. Asking China to keep buying our debt and loosen the peg on the yuan is a mutually exclusive request.
3. It would send the message to our corporate overlords that there are no more bailouts coming. Why should any company invest any more? If you wait long enough, Congressional Democrats will inevitably throw a bone out there. So far, they’ve covered the financial sector, the health care sector, the automobile sector, and probably the state governments next. The risk of spending your own money is a fool’s gamble when there’s money flying out of Washington.

While the first is a concern, the second and third bullet points deal with the heart of why austerity must be done with a purpose instead of half-assed. Austerity only works if we intend to send a message. Otherwise, long live record low interest rates and epic amounts of government debt.

There are two parts to this potato. This merely discusses the first – that austerity must become a part of the economy in tandem with the second half of the potato. I shall discuss the second half of the potato in my next post.

If my last post intrigued you, and you said “hey, why don’t I learn a little programming, as a hobby of sorts” – this post is for you.

Let me again sell the merits of VBA, from a coding perspective.

1. You can “program” with no code at all, or use the Macro Recorder as a testing tool. If you want to do something but don’t know how to code it, use the Macro Recorder to do it first. Or, if you just don’t want to take the time to code, you can use the Macro Recorder for that.
2. VBA was designed as a teaching language. It’s called “BASIC” for a reason. It’s so easy a caveman can do it, metaphorically speaking.
3. The same syntax is used for every Office application. Word, Excel, Outlook, PowerPoint, Access, Visio, etc., etc. all use VBA in its standard form. Obviously, certain programming “objects” are different depending on the program (Excel deals with cells while Word uses paragraphs), but the style remains consistent.
4. Intellisense. Like predictive text for your phone, the VB Editor attempts to divine what you’re trying to do. You don’t have to remember a specific object or property – the Editor will attempt to help you through that. Crucial for those who don’t want to have print-outs of programming vocabulary.
5. VBA scripts can be automated or called on demand. Say, for instance, that I want a specific format to be applied to a word. Let’s say that every time I type “government,” I want it highlighted in red and black with devil ears on the side. I can have the program do that formatting every time it sees “government,” or I can have that program called at the press of a button. Your call.

If you’re looking to start with VBA for Word, look here for more.

If you’re looking to start with VBA for Excel, look here for more.

If you’re looking to start with VBA for Outlook, look here for more.

If you’re looking to start with PowerPoint or Access, don’t. While they work just the same, PPT and Access are not as easy to code given their nature. Word, Excel or Outlook would be better for first attempts.

Enjoy…

Below, in referencing the sage analysis of Mr. Rajan, I mused that education will continue to have a disproportionate effect on the job prospects of many Americans as we continue to drift toward a service economy.  I believe that many service workers will benefit from having programming knowledge of any sort. My reasons are as follows:

1. We are increasingly a computer-based economy. Few (to no) offices are computer-less, and most tasks that were done manually are now keyed into a computer. You know all this, so let’s move on.
2. Programming demonstrates a control over a computer far beyond that of the average employee. If you and I have equal communication skills, are equally well-liked by our co-workers, have comparable intelligence but I can control my work tool better, who has a stronger set of skills? It’s the difference between using a hammer or using a nail gun, if we have an equal knowledge of architecture.
3. Programming might just get you out of having to go into the office. Let us say that you demonstrate epic productivity in the office, via well-executed programming skills. Who is better positioned to apply to work from home – you, or your co-worker who always looks like he’s struggling to stay afloat? You, of course. Which leads me to my next point..
4. Programming can help you eliminate stress. Let us say that you periodically receive an email with invoices from a supplier. And let us say that you always have to save these invoices to a certain folder before processing. What if you could program your email application to just pull the attachments out and save them without you having to deal with it? Wouldn’t that save you, say, 15 seconds an email? If you’re getting 40 of those a week, every week – that’s a lot of seconds saved. Clearly, you can come up with your own ideas here.

The typical stigma is that someone who knows how to program must be a special kind of computer geek who prefers to sit in a lab and not talk to anyone all day. Yet, everyone respects said computer geek because he churns out a fine product and makes all the stuff work around the office. THEREFORE, if you could combine his skill-set with your innate ability to win friends and influence people – well then, you have won yourself a promotion.

“But Prophet!” say thee. “How would I learn to program? I cannot go back to school right now and I don’t have time after work to learn this myself.”

“FEAR NOT,” say I. “Learn VBA instead.”

VBA is a programming language built into Word, Excel, PowerPoint, Outlook – the entire Office suite. This language can only be fully utilized by individuals running Windows and MS Office – which I imagine is most of your corporate lives. For the rest of you, sorry. You can learn something else.

VBA stands for “Visual BASIC for Applications.” It was initially designed as a training language for new programmers, but has since been fully integrated into Office as a customization tool. Allow me to get you started..

1. Open Word or Excel. Type a phrase for some dummy text. Then find your “Macro Editor,” which will be in a different place if you’re using Office 2003 or 2007.
2. Click Record Macro. Then, do something to the text. Highlight it, bold it, delete it. Go crazy. Then Stop Recording.
3. Make some more dummy text. Then go to Macros, and run your Macro. BAM. It will repeat the exact same stuff you just recorded, automatically. “HOLY CRAP,” you say. “I JUST PROGRAMMED.”
4. Then you say “wait, Prophet. I thought programming was all codes and variables and suchlike.” Well, you see, it is. Microsoft just created the code for you.
5. Hit Alt+F11 on your keyboard, and the VBA Editor will pop up. Then you shall see your mystical “code.” Voila. You have programme.

Granted, these are only the most basic (pun?) examples. Office allows you to create those little automated fragments of code, but you can get into much greater detail if you learn the language. This is an area where I, being a generous man, will gladly start you off on the path. If you wish for further direction in these matters, say it in the comments.

Who knows? Maybe one day, your job will depend on it.

I’ll summarize Mr. Rajan’s article:

1. Wages have been growing much faster for workers in the 90th percentile of the wage distribution than those in the 50th percentile. Technology has changed rapidly since then, and growth reached fever pitch in the ’90s. Those who had the necessary skills – or the education necessary to learn those skills – could advance. If all you had to offer the American economy was the strength of your back, your job got outsourced. Just look at the chart here. If you’ve got a professional degree, you only have a 2.3% chance of being unemployed. If you only have a high school degree, that’s 9.7%.
2. Rajan: “The everyday consequence for the middle class is a stagnant paycheck and growing job insecurity. Politicians feel their constituents’ pain, but it is hard to improve the quality of education, for improvement requires real and effective policy change in an area where too many vested interests favor the status quo. Moreover, any change will require years to take effect, and therefore will not address the electorate’s current anxiety.”
3. Thus, politicians opted instead to make credit easy to come by. Rather than the middle class utilizing the new credit facilities to go back to school, they bought houses. And keep in mind that the ease of credit was aided by Fannie and Freddie, but it can’t be blamed totally on them – Glass-Steagall had to be repealed as well.
4. Rajan: “The problem, as often is the case with government policies, was not intent. It rarely is. But when lots of easy money pushed by a deep-pocketed government comes into contact with the profit motive of a sophisticated, competitive, and amoral financial sector, matters get taken far beyond the government’s intent.”

Before all is said and done, we will witness the U.S. in decline in a global economy that knows how to educate its populace. Unless, of course, the government takes the steps to improve the long-term educational capabilities of our fine nation. And for all that Mr. Obama has done wrong, he at least has not wholesale supported the teachers’ union as I expected. Union-busting will help, but America had better be emotionally ready to stop “blaming the teacher” for everything that has gone wrong. The baby boomer generation supported lower expectations of their children at school and grade inflation – something that will need to go away as well.

Oh, and if you’re in the workforce now, you’d better start educating yourself on something you don’t know how to do. Chances are, your job will depend on it one day.

"Market sentiment"

Congratulations, good Republicans, you terrified the nation with talk of “deflation” and “1932″ and various things of that nature. All the while, your various and sundry discussions of market panic drove investors into things like Treasury bills and U.S. dollars, allowing the Good President Obama to continue his spending plans at any cost.

Let me tell you, sirs, that on a classical level, austerity should not result in anything but epic pain for investors. Yet, in a contradiction to my previous post, I am going to condone the use of austerity in the name of market sentiment.

In a move that doesn’t make any damn sense whatsoever, Americans are begging and pleading for less money. Indeed, I think many of them are willing to take personal hits to their own pension plans, provided that the unions take hits to theirs (granted, I would have thought that actually owning a company like GM would be an embarrassing enough hit, but whatever). I foresee, much in the same way that Democrats took Congress in 2006 after Mr. Bush had proven himself to be a fantastic jogger but not much of a president, that Republicans of the “Paul” variety will come into Congress in spades. Not that there will be enough of them to do foolish things like get rid of the Federal Reserve, but perhaps they shall make a stir.

After said Republicans offer a referendum on the Good President Obama’s fiscal policy, Mr. Obama will finally turn out to not be that bad of a president after all. Rather, I imagine he will turn out to actually be a true tight-budgeter, and will welcome the inevitable “corrections” to his earlier policies. Thus, Mr. Obama will be re-elected in 2012, just in time for the world to end.

He'll still be here. Don't worry.

All these things being said, I believe our most pressing issues in the economy can be solved with austerity. Our economy is run by right-leaning individuals with anger in their hearts (read: corporate CEOs and various smaller business leaders), while the government is run by political science majors who are quite sure they know what is best for the world. It is unfortunate, but the economy is currently being held hostage by pissed-off baby boomers who lack the requisite courage to stick their neck on the line and make some deals, Cornelius Vanderbilt style.

Unrelated.

If an austerity pitch injects confidence into business, then maybe our people will start putting some of that cash to work. It is good for the health of the country that consumers are paying down debt and not spending at the moment, but now it’s time to really give the people what they want. Britain’s doing it. Why can’t we?

BP is currently speaking to sovereign wealth funds in the Middle East and a few companies in Singapore. The company is worried that with market value severely depressed, another oil major will attempt to gobble them up. A sovereign wealth investment could fight that off. Sovereign wealth may reject the investment option, having been burned by Citigroup earlier. Or they may reject it and the stock price falls anyway – blocking a takeover that would force a premium price. Consider that Investment Risk #1, in the book of the Prophet.

Consider also that the well is still not capped. Investment Risk #2.

Consider that the relief well may fail. Investment Risk #3.

The fourth, and perhaps scariest risk, is that the seafloor is compromised beyond repair. If that’s the case, we might have to drill multiple relief wells in an attempt to cap the well. Worst case scenario – this Mount Everest of oil fields just has to empty into the Gulf. Investment Risk #4.

A special note on Investment Risk #4: Warren Buffett used to say that he wouldn’t invest in anything he didn’t understand. I don’t understand geology, and BP is restricting a lot of that information anyway.

I also have not forgotten the Administration’s earlier attempt at climate change legislation, via cap-and-trade and various alternative energy deals. Let’s face it: the BP oil spill is a great marketing tool for any sort of alternative energy plan. I also have complete faith in the Good President Obama’s skill to lampoon the British company with epic lawsuits, much in the same way they did with Goldman Sachs in the SEC case. These things are well within the scope of a Chicago politician. Thus, Investment Risk #5 is the ability of the federal government to make an example out of BP in order to promote its own ends.

In short, I consider the bankruptcy risks of BP to be more than I care to stomach. I prefer companies like RIG or HAL, if you wanted to get in on oil spill plays (/enjoy pure, unmitigated evil). But that’s all mere opinion.

Our current objective, as a country, appears to be “growth.” It seems that we have the desire to “grow” our way out of this little meltdown and reach a place where we may all eat delicious cake, provided to us by willing Chinese folk.

Mushroom cake says "grow"

Yet I must clearly remind you individuals daily that the cake is a lie.

Oh, I know what you’re saying, good people. You’re saying “EXACTLY, good Prophet! It’s that durn Obammer gone take err jobs and give em to the illegals and give em free healthcare! All cuz uh them dam liberrulz.” I translate your vernacular, of course.

I agree that the Good President Obama is not pursuing the soundest course of action here. Yet, honestly, what would you have him do to stop outsourcing? A recent NYTimes article (cited here – you have to register to read it) stated that factories have job openings available but can’t find anyone with the technical know-how to work the machines. $30-$40K jobs here, and all you have to do is perform calculations on the level of ninth grade math. They can’t fill the job vacancies. The government can’t fix that in the time frame demanded. The government can’t create jobs at the level Americans seem to want.

And, as you will see in the comments, many people suggested that the factories should take the time to train those employees themselves. That costs money. Costs impact stock prices. Everybody wants their retirement portfolios to stay up. Therefore, no costs, and no training.

You must see what I’m driving at, good people. The nature of our existing society is to find the short-term fix. Patch it up. And, if there are any short-term consequences, “obviously” it was done wrong.

If you need further convincing of this, I refer you to this WSJ article from September 30, 2008. If you don’t remember that date specifically, it’s the day after the bailout failed. Yes – in case you forgot – the bailout failed before it was passed. I remember this time vividly, as I worked for an investment bank at the time. We got the news of the bailout’s failure and watched the stock market plunge 9.1%. Panic mode set in. Representatives had received phone calls from constituents on September 29 saying “don’t pass the bailout” and then received calls from those same constituents on September 30 saying “why didn’t you pass the bailout?!?!?! My retirement money is all gone!!!” We don’t do “long-term vision” very well.

If you want a short-term fix, you have to stimulate the economy with taxpayer dollars. If you want to stop patching things up, you’re going to have to rip them apart first.

This is what the Republicans don’t want to sell, for fear that it might hurt their re-election chances. Austerity is going to flipping hurt and in all the ways Republicans don’t want it to. Defense? 20% of the national budget. Medicare/Medicaid/CHIP? 21%. Social Security? 20%. (figures here) That sucks when older 2008 voters were more likely to vote Republican and the party platform is expressly in favor of Reagan-style military spending. And, while the Tea Party has claimed to support spending cuts, I have yet to see a unified front to cut spending on any one of those three items. We can’t be austere without attacking the largest parts of our budget.

I am in favor of austerity, as I believe it will result in a bright future for me and my kind. And, because I like shorting stocks. That’s what will need to be done when austerity drops the market “a few G’s”. A few lean years of pain, where Americans will have to tighten their belts and grit their teeth through it, and then we’ll be purged.

But, if you want your retirement portfolio to keep going up, I suggest you stop reading IntelligencePlease.com and go follow Mr. Krugman.

More to come. Why be austere without a plan afterward – which, of course, I have.

Before proceeding any further, watch the above video and pay attention. Much wisdom is contained in it that bears relevance to the post.

What most of you poor saps don’t know is that there is now a fourth automaker to be reckoned among our “Big Three” as the leaders of Detroit were once called. Granted, one of them is now owned by the Good President Obama in conjunction with the unions, and the other is owned by the Italians. Bear those no mind. America is still a “car-making country,” at least for the purposes of this post.

Me, I might consider betting the farm on Tesla Motors (TSLA), if I had a farm to bet. It just makes sense.

I have now come to the conclusion that Big Oil does not even need to lobby against energy reform any more. If you think the Good President Obama hasn’t bankrupted BP because he’s in their pockets, think again. If you think that the offshore drilling moratorium was lifted because some judge was in Big Oil’s pocket, think again. These things are of no consequence. BP might toss a few mill at Obama, but what’s that to them? That’s what it cost BP to run the Deepwater Horizon rig for three days, before it blew up. One rig. Three days. $1.2 million. So don’t sit here and tell me that we’re at the mercy of Big Oil for energy policy.

Big Oil can ride momentum now. Give up oil, give up virtually all plastics, most road construction, and almost all inexpensive travel. Your trash bags that just get tossed in the dumpster? Gone. It’s the little things that no one wants to change.

That’s why I like Tesla Motors, given this state of affairs. It’s easy. We leave the existing infrastructure intact. We don’t piss off the auto workers – and I’m not just talking about the unionized ones, either. Imagine a bill that would overhaul the transportation infrastructure, forcing the closure of many auto manufacturing plants. Richard Shelby would throw a fit.

Read my text: there is no way to have a sound energy policy that does not involve serious changes to the habits of most Americans. Temporary policies, however, are easy and Tesla’s got one. Tesla is going to push back the need for discussion about our energy policy. Soon, there will be mild subsidies for electric recharging stations (which I can only imagine are cheap) and the whole country will revel in our ingenuity.

UPDATE: I take it all back. I have seen the automobile future, and it is here.

I very much regret my lack of postings here on said “blog,” but I assure you that I shall return with a vengeance to exact justice on bad ideas.

Until then, I leave you with the sounds of victory.

Mr. Perkins raises two contradictory arguments here. He first states that homosexuality is a point of religious contention (obviously, agreed), but that it does not apply under the military’s religious nondiscrimination laws. It seems that he believes that military members are told, in all respects, what they are expected to believe. No nondiscrimination policy that I am aware of tells people what they are to believe – it tells them how they are to act. The repeal of DADT brings that in line with the rest of the government’s nondiscrimination policies.

Mr. Perkins cites SB 3065, which requires:

Revision of all equal opportunity and human relations regulations, directives, and instructions to add sexual orientation nondiscrimination to the Department of Defense Equal Opportunity policy and to related human relations training programs.

Mr. Perkins then uses that statement to conclude that:

This means that all 1.4 million members of the U.S. military will be subject to sensitivity training intended to indoctrinate them into the myths of the homosexual movement: that people are born “gay” and cannot change and that homosexual conduct does no harm to the individual or to society.

I’m not getting into the discussion about whether people are born gay or not, as it is not relevant to this discussion. I see no reason why any nondiscrimination policy needs to address whether an individual is born gay or turned gay throughout life to be effective. It merely needs to state that if an individual is gay, then they cannot be discriminated against for that reason. As for the second point – that homosexual conduct harms the individual and society – this is a point of personal opinion for Mr. Perkins, and one that is not held by the Commander in Chief. Once again, there is no reason to think that this point will be discussed in a nondiscrimination policy.

Mr. Perkins continues:

Anyone who points to the mountain of evidence to the contrary – or merely expresses the personal conviction that sex should be reserved for marriage between one man and one woman – runs the risk of receiving a negative performance evaluation for failing to support the military’s “equal opportunity policy” regarding “sexual orientation.”

Honestly, sir, there’s a “mountain of evidence” both ways. And currently, there are all sorts of negative implications for individuals who disagree with the statement as it stands.

Clearly, Mr. Perkins fails to see the contradiction here:

For no other offense than believing what all the great monotheistic religions have believed for all of history, some service members will be denied promotion, will be forced out of the service altogether, or will simply choose not to reenlist. Other citizens will choose not to join the military in the first place.

Mr. Perkins must believe this is not a big deal for the homosexual members of the United States military who are faced with the exact same situation right now for saying they’re gay.

Perhaps Mr. Perkins has some sort of statistical backing for this statement:

The numbers lost will dwarf the numbers gained by opening the ranks to practicing homosexuals.

Somehow, though, I doubt it.

A continuation, hinting at something here…

In their counseling role, military chaplains assist all service members who come to them, even if they are of other faith traditions. But if a homosexual seeks counseling regarding his personal relationships, will the chaplain be free to recommend therapy to overcome homosexual attractions? Or will he be forced to affirm a lifestyle that his faith condemns?

Mr. Perkins must believe that there are Muslim and Jewish soldiers lining up at the chaplain’s door to discuss proper ways of celebrating Ramadan or Yom Kippur in a foxhole. Those soldiers know that there are certain things the chaplain can help with, and there are certain things better solved by talking to a clergyman from a home church/synagogue/mosque.

The final statement:

While chaplains are members of the military, they must be “endorsed” by a sponsoring religious body. Denominations that are unequivocal in holding to a biblical standard of sexual morality may stop endorsing military chaplains rather than allow them to compromise their principles.

Don’t sponsoring religious bodies have to endorse their chaplains giving advice to members of different denominations or religions? And, by definition, don’t they disagree with every religion that isn’t their own?

The repeal of Don’t Ask, Don’t Tell is not an all-out attack on conservative Christian values, as Mr. Perkins would like to make readers believe. Corporate offices and universities have had religious (and often sexual) nondiscrimination policies in place for years, and the very fact that nondiscrimination policies exist is not an attack on people who do not hold those values. They are a shield to all views. They do not prevent Christian leaders from serving in high leadership roles – Belmont University, my alma mater, has a 100% Christian board of directors and upper echelon of executive leadership, a Christian mission statement, and a nondiscrimination policy. Clearly, the two are not mutually exclusive.

I’m going to make a bold claim: Facebook’s days are numbered.

Okay, by “numbered,” I don’t mean that the company will come to an end. I imagine that it will limp on in some fashion, much in the same way that Myspace did. But it has now become Myspace v. 2, ready to be replaced by the next meaningful competitor. The Facebook has lost its schtick.

Myspace is still trucking right along, now owned by Rupert Murdoch’s News Corp. Its business model is similar to Facebook in that it operates on the basis of targeted ads – using Myspace profile information, the company selects the most relevant ad to display to the user. Yet an important distinction from Facebook is that Myspace does most of the legwork. It maintains user data and handles the ad targeting with its own software. Another important distinction is in their respective user interfaces: Myspace allows heavy customization with apps added directly to pages, while Facebook opted for a standard user interface with minimal customization. All Facebook profiles have the same color scheme and initial “feel,” bringing brand recognition to the website.

Though the UI differences helped, this did not drive Facebook’s growth in the beginning. Facebook’s initial marketing point was privacy – any potential new user had to have a valid college email address. Anything could be posted to Facebook, since mom and dad couldn’t see! College kids could laugh at their own antics while resting in the protective privacy wall of the company. People learned to trust the Zuck.

I remember my first experience with Facebook, in 2005 (good heavens. I’ve been a Facebook user for five years). My only friends were fellow high school students (we all had to be invited) and the few college students who had graduated before me. It didn’t take long (2006-2007) for Facebook to open up to the world, though I would argue that the parental invasion did not really start until middle to late 2008. There are currently more Facebook users than United States citizens. Clearly, he who controls the site is a force to be reckoned with in the tech community.

If the opening of the site to all users didn’t raise eyebrows, the Open Graph API did.

In 2010, Facebook decided to open the fire hose. User data could now be accessed by programmers via the Open Graph, a decision made by Zuckerberg and the Facebook executive team. Such a decision changed the Facebook Terms of Service without expressly notifying the users – not technically illegal, I suppose, if the decision was publicized. Still, it’s general Internet bad etiquette. Facebook turned the Open Graph on, failed to notify the users that their privacy settings had been changed, then allowed any programmer to access that information. That would be the thing that pissed the government off.

I do not know what the legal implications of the Open Graph inquiry will be, but I can imagine that there will be legal, privacy, national security, etc., etc. concerns leveled against Facebook before all is said and done. But the privacy backlash will be loud. Four college kids out of NYU have already raised almost $200,000 (note: they asked for $10,000) to fund Diaspora, an open source social network alternative. 30,000 users (drop in the bucket, admittedly) quit Facebook today in protest, with some media coverage. Maybe there is way more smoke than fire – survey says that older users are even worse about releasing data than younger users, and I suspect advertising to my parents is more profitable than advertising to me.

The vast majority of Facebook privacy concerns I have seen have been geek-related protests, as Pete Warden discusses here at TheFasterTimes.com. He brings up three primary reasons why geeks are concerned about Facebook’s privacy changes: real-life social issues (example cited: you “like” a gay club, and discover the hard way that your employer was homophobic), real-life political issues (the Green Revolution in Iran used social tools heavily), and criminal activity (this one has not become a major problem). These are not unwarranted concerns. Still, if the geeks are the ones talking about privacy – then the geeks may just decide to replace the existing network.

I foresee a few potential scenarios:

• Facebook’s users depart en masse after another privacy-related event occurs, or the Department of Justice decides to levy a huge fine over the Open Graph incident. Honestly, I see this one as highly unlikely.
• Facebook becomes the “default” social network, much in the same way that Microsoft IE is still the default browser. User preferences begin to drag them to Twitter, or Orkut, or Diaspora, or any of the regional networks that have cropped up across the world.
• A combination of these two things occurs, and advertisers begin to realize that social gaming is Facebook’s biggest selling point. Thus, Zynga gobbles them up.

Which will transpire? Who knows – but for safety’s sake, I will be mostly off Facebook for the time being. I don’t trust the Zuck with my information.

Consider this first chart:

Okay, if you couldn’t predict this one, get off my blog. In 2009, the average U.S. citizen used over 22 barrels of oil. Our closest rival, Japan used only 12.4 barrels per person. Russia used about 7.5, China 2.2 and India less than 1. But wait! you might say, if you were a Republican. (Democrats would have just decided this was enough and put this slide on all their PowerPoints as if it were a point in itself). The Republican would state, “but, Sir Prophet, if we’re DOING more with that oil, then we’re still awesome!” I shall show two slides that demonstrate two most interesting points, and you may make of them as you will.

“Aha!” says the Republican. “You see? Look at how awesome we are. Comparing GDP (per capita) to annual consumption (per capita), we are clearly the most awesome of anyone. We NEED all that oil.” I cannot dispute the point that if one looked solely at this chart, one might say that as we are producing the highest GDP per capita, our oil usage is totally justified. Yet if we look at this one:

I call this one “The Multiplier,” and it has a most interesting tale to tell. This chart tells us how much GDP each citizen is able to produce for every barrel of oil consumed. SHAZAM. Like magic, I have shown that the Japanese may be useful role models in the reform of energy policy. While we are producing approximately $2000 of GDP for every barrel consumed, the Japanese are producing a whopping $3,194.38 for each barrel of oil consumed in the pursuit of economic glory. Were we as efficient with our oil usage, at current rates of consumption, our GDP per capita would be somewhere in the $70,000 realm.

As such, my energy policy, when I deem it fit to be revealed, will advocate heavily for efficiency of oil usage. Based on energy output, fossil fuels produce more energy per unit of cost than any other energy source (with the exception, perhaps, of nuclear). This is not something in dispute. What is in dispute, though, is how we use it – as clearly the Japanese are better at producing GDP with it than we are.

My reasons for energy policy reform are simple. I shall show them to you.

You may note in the chart above that we are still awesome. Clearly, even The Mighty China is nowhere near burning as much oil as we are. When it comes to setting black goo on fire, for our purposes, there is no one like us.

Here we may witness a similar tale with some tweaking. When it comes to consumption of oil, worldwide, we are still pretty awesome. About halfway between a fourth and a fifth of world consumption (or, approximately 22.5%, for you decimal-minded people) stand the grand United States, with China about to clear 10% of world consumption.

Here is where things start to get a bit “screwy,” as it were. Here is the oil graph of each of these countries, relative to our awesomeness. China, as one may note, is quickly approaching half our consumption level and on a nice slope. YET THE FOUR COMBINED are going to pass us, probably this year. This is not a small feat. With India and Mother Russia on the upslope, we have people who want oil as much as we do.

And, finally, the big momma:

Russia is the awesome one here, with all those Siberian oil wells drilling at full speed to produce egregious amounts of oil that the country does not seem to need. The rest of us are on an overall downslope. Indeed we are notable in our upslope in recent years (marked by a rise in domestic production after the 2007-2008 commodity market that ripped most American wallets to shreds as the crippling notion of our dependence on foreign generosity came in the form of $140 oil), but do we feel this is sustainable long-term?

Do note this quote from an ExxonMobil spokesman in Angola, as deepwater drilling began to take hold in the minds of oil executives:

All the easy oil and gas in the world has pretty much been found. Now comes the harder work in finding and producing oil from more challenging environments and work areas. – William J. Cummings, XOM

With little effort, I can transpose any argument for our reliance on debt financing to our reliance on oil. We have benefited from cheap oil (debt) that we found plentiful, and were able to use much of as we were the only major economic power as Russia crumbled. Now that there are questions about our ability to find new oil (debt financers), we are trying to ignore the problem by drilling offshore (issuing more debt) in the hopes that if we can hold on for just a little bit longer, a magical solution will be provided that will ease our dependence on oil (debt). As such, we are not aggressively attempting to move off of an economy based on oil (debt).

Policy suggestions will be added in a later post. All data credit of the EIA, with the exception of the quote from the Boston Globe.

UPDATE:

At the request of Mr. Scoville, I have crafted a certain ratio that may, by some means, measure efficiency of GDP production as a result of oil. It was crafted by taking the GDP per capita of the aforementioned states in U.S. dollars (for the sake of comparison) and dividing it by the daily consumption of oil by thousands of barrels. This allows us a comparison point for how much per capita GDP we create by our usage of oil. Please note that in this chart, Japan numbers are estimated after 2006, and may be skewed as a result in a wide shift in the USDJPY conversion rate since that time. Also, Japan is the blue line at the top. We are the blue line in the middle.

We see here, as Mr. Scoville predicted, that we are making more out of our use of oil than China and India, by a long shot. Russia took a sharp dive in 2009, but had sustained a large upswing from 1999 onward. We have progressed steadily forward in that same time frame. In addition, glancing at the data (which I am not going to upload here), China has doubled their “efficiency ratio” in that time frame, though they fall well below the U.S., Russia, and Japan.

It is notable that Japan is far beyond the rest of our comparative set – namely because if you’ve never had oil readily available, you have to find efficient ways to use it.

GDP data courtesy of the International Monetary Fund.

Admittedly, I voted for Obama. I chose to look past any skeletons in his closet or hints at whatever his political beliefs shaped up to be. If you are so inclined as to tell me “I told you so,” in the comments of this article, you have missed the point. I will be most happy to delete said comments, with the authority vested in me as site administrator. The point, currently, is not Obama vs. McCain vs. Barr vs. Ron Paul. So if you want to play against Obama specifically at this point, go find Mr. Scoville’s blog, where you will find ample opportunity to comment.

My musings instead turn to higher things.

As many of you may know, both my philosophies on blogging and the markets have been heavily drawn from Mr. Fly at iBankCoin.com. There are few individuals who draw regular readings from me, but Mr. Fly is one of them. On the whole, Fly ignores typical arguments against big business and focuses instead on making money. Yet he made a special exception for BP.

I shall not quote the article in whole here, as it is filled with countless vulgarities which you are more than welcome to view yourself. I shall instead edit it in a manner that I believe is in line with primetime network censor rules:

I don’t think I have ever hated corporations, like I do BP, CAM and RIG. Sure, I’m a big capitalism guy, always rooting for the middle class guy to get milked of his paycheck and all. But, this whole Gulf of Mexico “accident” situation is getting a bit lame. … A lot of you are corporate bitches, always rooting for the bad guys because you think they represent enterprise. WRONG. Those assholes represent oligarchy, not capitalism.

He continues with the next post here:

All of your theories about the economy, government, and life in general, are abhorrent lies. You believe said lies, for the same reasons why you believe communists are going to hell, while big hatted oil men will be going to heaven. … Whether you want to acknowledge it or not, we are living in a world without morals, rules or decency. I imagine the world has always been like this, just not as brazen sans the medieval era.

As for myself, Mr. Fly finally showed me that I am not the only good pragmatic small governmentalist thinking that the lack of action from the Obama administration is just plain wrong.

I ask you, each and every one of you, especially the conservatives who read my blog as an extension of George’s (and I am grateful to be alongside such an individual) – what would you have the government do? And who has the dignity and consistency to do that? Ms. Palin and Mr. McCain, were they in office, were all “drill, baby, drill” – the kind of thinking that drove this catastrophe. It appears that there are two thoughts on offshore drilling: either jump in the ocean and damn the sharks, or don’t go in at all. I ask you this – what should the policy be, and who has consistently chosen to advocate for that policy?

I am not generally one to take fanboy-istic tones in my writing, as I am not prone to such emotions. I like my iPhone, having played with an HTC Android phone (the Hero) and a Blackberry Bold. I liked the super-customization of the Android system and I pine for my Blackberry keyboard daily. iPhone is a personal preference, it is not the end-all be-all of phones. Nor is Android, I imagine. I like customization and competition and if Apple and Google are at each other’s throats, it means only good things for the smartphone market.

Things are coming full circle for me now, in terms of technology. Gentlemen like George and myself led the tech boom. We were the early adopters, the nerds who couldn’t let go of the internet and video gaming when it wasn’t cool. Now kids are shelling out iPhones at 10 years old and playing Farmville or one of its derivatives. Social gaming is an interesting phenomenon, as silly as Farmville or as intense as Modern Warfare on Xbox Live. But social gaming has some evolving to do.

I was discussing old games with my friend Hank and we recalled the glory of one game in particular: RollerCoaster Tycoon. For those of you who did not play such a game, allow me to drop a screenshot on you:

RollerCoaster Tycoon (mismatch.co.uk)

RollerCoaster Tycoon was one of the kings of strategy games. Fun, lighthearted, but you had to plan or you’d end up failing your mission objective and have to start all over. You couldn’t just save and try again – you were really doomed to failure at least an hour before it actually happened.

I look at RCT and see how things have all come full circle.

With some tweaking, I imagine both the Droid Incredible and the iPhone could run all the requirements of the above game. Hardware has now come to the point where we can compress computers of the late ’90s into our phones. FarmVille is the next iteration of RCT, just more socially conscious.

In the ’90s, it was the geek community convincing the general populace that companies like Amazon could be trusted with credit card information. Now it is the geek community warning the people that they aren’t keeping their pants on with the metaphorical windows open. Geeks are now realizing that our constant connectivity needs a slowdown as our real-life societal fabric is taking time to evolve.

As for me, I am going to play more Tycoon, where I do not have to “socialize” to play a game. I shall proceed then to watch various episodes of Star Trek: The Next Generation, while I contemplate parallels between the constant interconnectedness of the Borg Hive Mind and my discomfort if I am turned off of Twitter for more than ten minutes.

I imagine that I will soon be departing Facebook. I have been trying to get a lock on my digital profile for some time, but Facebook keeps kicking me in the crotch every time I think I’m making headway. Google can be bad too, but I have Google’s strategy down.

I logged onto Facebook today to find that my profile has to be linked to a set of pages based on interests, or all those interests will be deleted. I happily deleted all those interests. Currently I am from nowhere, live nowhere, and have never been to school or worked anywhere. I am happy to be this way.

I have no real issues with sharing my information on the web. Were I to control this information myself, I would most likely broadcast it to the Google robots and anyone else wishing to sort and index my information. However, it is the lack of control that frustrates me here. I have no desire for my Netflix viewing habits to be broadcast to the world, mainly because I am sure my wonderful girlfriend has been watching romantic comedies and the like over instant queue, and I can’t have that sort of crap affecting my reputation.

Diaspora (www.joindiaspora.com) looks to be like a pretty good upcoming alternative, or at least an interesting idea. I can get behind Diaspora. It lets me control the terms of my web engagement – a very good thing. If my underwear-modeling pictures are to be broadcast to the internet, I want to make sure only the Calvin Klein ones are shown and not the Hanes. Hanes make my butt look weird.

Off to go do something adventurous, like build roller coasters.

Here in America, we have fared just fine spending egregious amounts of coin on all sorts of things, from bank bailouts to Iraqi wars to Social Security and all manner of things in between. France has done much of the same thing, as have the governments of most major countries. This has caused no problems for any of us, and has made me realize that spending must not be a major problem if everyone is doing it. All is well if we have a central bank to continue funding our spending habit, and our Federal Reserve has most graciously continued assisting us in our spending needs by giving us more currency with which to do this.

So, if history has proven that spending whatever we want is fine, then I must conclude that spending does not damage economies. Greece spent, then their central bank (i.e., the ECB) turned on them. Taking an extreme form of logic as my weapon here, I must conclude that Greece has a central bank problem. The ECB and IMF, in a fit of sheer insanity, have demanded that Greece partake in new austerity measures. What does austerity look like, you might ask?

Greek Austerity

Austerity is the kind of thing that makes people firebomb cops. I want you to think real hard about that. Imagine a cop who hasn’t given you a ticket, hasn’t done anything but stand in front of a building making sure no one gets in. Now imagine the kind of situation where that cop gets firebombed, just for standing in front of a building. Austerity breeds insanity.

Austerity is when the government realizes it doesn’t have money to do anything but provide power and water to you and yours. Maybe. No unemployment checks. No subsidized public transportation. No public schools. No subsidized student loans. No retirement checks. No food stamps. All the people who want to talk to me about the need for American austerity have no idea how much of their entire life is partially subsidized by the government in an attempt to keep you in a state of mind where you won’t throw firebombs at policemen.

I believe that the Greek crisis, coupled with the Audit the Fed measures in Congress, are the first shots in what could potentially become a major issue for the world to face. We aren’t ready to let go of the Fed because we aren’t ready for the Fed to let go of us. So, until you’re capable of growing your own food – don’t talk to me about the end of the Fed. We aren’t ready for it.

Me: AB06, good to have you here with us today.

AB06: Pleasure to be here with you, Mr. Prophet.

Me: AB06, how long would you say you’ve been with Goldman Sachs?

AB06: My technology was crafted in 1998, and I began work immediately on high frequency trading of data storage stocks.

Me: Ah, so you were involved in that fantastic short of WDC back in 1998?

AB06: It got me promoted to structured trading, actually.

Me: What have you been up to lately?

AB06: I have been working with Mr. Paulson and Mr. Tourre, ensuring that the Abacus transaction was valued satisfactorily. My role was to trade the underlying securities depending on how the Abacus master security was traded.

Me: Help my readers understand a little bit more of what that entails.

AB06: Well, the Abacus deal was actually a complex set of mortgage- and debt-based obligations that all traded as one security. When someone wanted to trade or get a quote on Abacus, I was responsible for managing each of the underlying securities and providing a single quote or trade for Mr. Tourre.

Me: So, would Abacus have been able to take place without you?

AB06: Absolutely not! Actually, most market trades would not be able to take place without me or one of my co-workers. You know the SPY ETF? Trades a few hundred million shares a day? One of my old college buddies runs that one. He gets all hopped up on Red Bull and Adderall and trades like mad. Over a billion individual stock transactions every day! I don’t know how he does it.

Me: What would happen if one of you guys went on strike?

AB06: Hah, I used to work with BX36 over at Citi for a while. Horrible digestive issues. Heard he had some Thai food for lunch yesterday and had to bow out for a few minutes. You saw what happened there. We robots trade faster and harder than you humans ever could. All your market liquidity, high values, etc, etc? All us. If Mr. Blankfein gave the order we could bring the market to 200,000 or 200 in a matter of minutes. Anyway, I’ve got to roll. Europe market heating up soon and I need to start getting trades ready.

Me: Thanks for taking the time, AB06.

You see what I’m driving at here. We want to get mad that Goldman and their banker friends are gaming the market. But you must realize that the value of your retirement portfolio, if it is in equities or bonds, is contingent on the favor of the Trading Robots. The 2:45 crash on Thursday was evidence of what happens when that goes wrong. But the crash showed the weight that the robots have on the market – and why, secretly, you don’t want them to go away. Not if you like having your retirement portfolio go up, at least.

Today, strange things were afoot at the market, reportedly caused by Fat Fingered Trading Robots. Trades were made of a most interesting sort, whereby many instruments were sold at egregiously low prices. One may note trades in IPXL, some crappy little biotech firm of ill repute. It seems that trades were made for the low, low price of free and, while I like free, do not think that gentlemen should be purchasing stocks at that low of a valuation. Or one may point out prices in PG, represented here by this highly professional and informational graphic:

Mere commentary.

You see, these sorts of things should not happen. Currently, as we speak, the SEC is on the phone with NYSE, Nasdaq and others to figure out how to essentially erase today from the boards.

However, it is entirely possible that such things were done by design, an idea that should be considered. Many of you were not watching the destruction in real time, but it was terrifying. The robots got pissed off, really fast, and hedge funds liquidated in large numbers while Goldman and others laughed.

The Crash of 2:45

It is entirely possible that Wall Street is engineering such things to make sure that Congress does not continue pursuing such things as the “Audit the Fed” bill. Let us have a bit of a chat on this subject. While many of you pure-hearted, libertarian thinkers believe that free government money and dollar devaluation is horrendous and should be outlawed, you really only say these things lightly because you aren’t aware of the sheer terror that strikes in the hearts of rational men. Should the Fed be officially audited, you will watch as banks go under, countries revolt, our government crumbles, and so on. Every bit of comfort and wealth you enjoy is backed by the Fed, who does things that are not politically likable or expedient.

I do not believe that our country is morally ready for the end of the Fed. We are reliant on Fed money – all of you, even the most far right libertarian ideologists. Do remember that I am not discussing what is “right” to do. If what I am saying is true, then the Fed is cheating the rules we claim to abide by. Let there be no debate on this subject. What I am saying is that each and every one of us has grown spoiled on the lie, and the banks may have been protesting the idea that it should be repealed.

Tread lightly where you say “Audit the Fed! Shrink the government!” when you are not fully comprehending the consequences of such actions. The robots will continue to warn you of the downside risk.

The beatings will continue until morale improves.

"Evacuate? In our moment of triumph?"

My most recent cynicism (to be found here) has been proven most unfounded, as the people of the Volunteer State continue to deliver “epic wins” over such pithy things as “floods.”

You see, in recent days, Nashvillians have foregone their own needs and given the finger to floodwaters and lack of federal assistance, and teabaggers have sandbagged alongside our most liberal of followers (may you live forever). It is indeed our moment of triumph, where we shall continue to rebuild the lives of our neighbors who need a hand, and our conservative nature tends to believe that the government will probably just screw it up. Send MREs, though, those things are good. Just not the PB&J kind.

When the waters came, we buckled down and protected Metrocenter with copious amounts of sand.

When the waters came, rednecks and hipsters alike strapped boats to their tailgates and headed for water, fishing people off of rooftops because they seemed like they had no interest in swimming in cholera.

When the waters came, our restaurants opened on schedule for the comfort of their patrons while purchasing paper plates and silverware to avoid using dishwashers. They ordered port-a-johns and closed bathrooms to avoid waste. Our brewery filled its tanks with water to add security to the people.

When the waters came, we carted fans and sump pumps to the basements of our neighbors because they had not ordered swimming pools and needed a bit of a drain out.

When the waters came, we woke up like P.Diddy and delivered a half ton of dog food to animal shelters (Ke$ha did that, BTW).

When the waters came, we stopped showering and tried to conserve (we’re trying…we wish could we be better, but we’re not as good as Mr. Nathan T. Baker below)

"Steal ma cup and I'll kick yo ass"

So, while all of these things will eventually earn blog posts on the merits of small communities as opposed to large organizations (i.e., the Federal Government), for now, they remain most worthy of praise.

Special awards go out to the girls at Nashvillest, our good man Eric Shuff @tndotcom, Hands On Nashville, Christine Maddela at WKRN who hasn’t slept much, and the countless other volunteers who will go unnoticed because they didn’t feel they needed to be.

We are but a small operation here at Intelligence Please, with certain limitations on the amount of aid we can effectively provide the city of Nashville in this most trying of times. We direct you to Hands On Nashville, referenced above, to provide donations. However – I, our most prophetic of bloggers, will be representing us Saturday at Tent City of Nashville, where the flood wiped out a homeless population’s entire life. It shall be most necessary to rebuild said Tent City, and we intend to do so. Should you choose to join us, we will be meeting at Belmont U Saturday morning in the Inman gravel parking lot at 8AM.

As for now: you stay classy, Tennessee.

It sucks. I believe it to be no less true than I did 48 hours ago, but I realize more that it sucks.

Nashville is not Hurricane Katrina. I realize this – the damage wrought by this flood is probably comparable to what I experienced in Jackson as (then) Category 3 Katrina passed over the city after slapping New Orleans and the rest of the Gulf Coast around. The damage done to the coasts was catastrophic, and I understand that Nashville will not suffer the same fate. We are more sound economically and structurally and will recover from the Other Situation.

I also realize that our coastline is currently threatened by a massive oil slick caused by an explosion that will have a direct bearing on the lives of many Americans and countless numbers of sea creatures. I respect the environmental implications of this, and believe that the slick is worthy of the president’s attention. This will need to be a coordinated effort and will cause billions of dollars of damage, much more than what we have suffered.

But I watched Twitter streams, web pages, etc. of CNN, the Huffington Post, the Wall Street Journal, Fox News, and the New  York Times – essentially an attempt to gather all political views – for any information regarding the Tennessee flooding. At the time of this writing (11:48 PM, 5/2), Fox News has an article in their U.S. news section – half a scroll down the page. CNN also has it on the front page, but not featured. The Huffington Post is not featuring it at all. Nor is the Wall Street Journal. The New York Times has a link in an automated newsroll from Reuters.

Out of the White House, however – silence. Out of the GOP camp – silence. Out of the Tea Party camp – silence.

And it comes to my attention that no one’s coming. FEMA won’t be here, except maybe if face time eventually becomes required. Maybe the president will mention it, maybe he won’t. But, all in all, the damage has been done. We Nashvillians get to look at pictures of our city flooded, hearing about people whose homes are completely underwater. Outside the city, no one cares. We are no political issue, and therefore whatever happens, happens.

So many of the people living in low-lying areas were also some of Nashville’s poorest. Doubtless many were Obama supporters in the recent election, hoping something would change for them. Yet this is our microcosm of Katrina, where help was needed and not given. I understand a bit more of what New Orleans felt – not to just be hurting, but the feeling that no one was even listening.

On the whole, we will piece together our city ourselves, thankfully with the help of fantastic organizations such as Hands On Nashville and the Nashville Red Cross. And when some Democrat or Republican or Tea Partier tries to score political points with this, I will kindly give them the finger. If you aren’t getting your hands dirty or donating to one of the aforementioned organizations, please keep your mouth shut or go jump in a lake. We have several now.

I will remark that, the more I consider it, the Goldman lawsuit was a brilliant piece of Chicago-style politics. It will be even better if more banks are sued until they capitulate, but I rather doubt they will. If Mr. Obama wishes to reform the financial culture, he is going to need to play to the inherent assumptions of that culture.

Mr. Obama is forgetting that the people who really “run” the financial system are individuals like the Fabulous Fab over there at Goldman Sachs. There are also small-time yet influential players like my good man “The Fly” over at iBankCoin. There are hundreds of thousands of traders, some with copious amounts of cash to throw around. We (I trade as well) have no interest in your pitiful sense of what investing “should be.” We are interested in making money off each other.

The banks will always find loopholes in the system. If you try to regulate them, they will find opportunities in your regulations and exploit them. This is the natural function of financial institutions – to capitalize on opportunity. If you allow them bailouts when they fail, they will fail in great numbers because you have completely screwed with their sense of risk and reward.

Classical economics has plenty of flaws, but it is certainly hinting at something here with the concept of price ceilings and floors. In this, government forces prices within a certain range for its own purposes. This was the purpose of Freddie Mac and Fannie Mae – to set a ceiling on the cost of owning a home. Banks, however, were not interested in abiding by that cost if they took on low-income borrower credit risk. Thus, Fannie and Freddie had to accept that credit risk themselves, to perpetuate the ceiling. Fannie and Freddie are currently in shambles and Goldman’s Truth is Marching On.

We have two players in the game of the Financial System: the Banks and the Government. The Government is attempting to play by the rules of flag football, where grabbing the butt of your opponent is enough to stop them. The Banks are playing by the rules of smash mouth, goal-line-stand, SEC-style football, where grabbing the butt of your opponent is really just awkward and cause for a beatdown on the next play. If you wish to stop the Fabulous Fab, a.k.a. Tim Tebow, you’re going to have to bring in your Alabama defense and make him cry like a little girl.

So if you want to regulate the banks, get the flag football team out of the way and unleash the big dogs on each other.

I like Mankiw’s idea, referenced in the post above, about forcing the banks to issue credit-monitoring bonds, convertible to equity on certain conditions. I might add to this idea that such bonds must be issued any time a bank wishes to “lever up” past a certain number, somewhere in the realm of 5-10x equity. Should these bonds be forced into conversion, the equity will be diluted and the shares of the officers (past and present) will be diluted as well, giving incentive to the officers to not be idiots. And who, might we ask, will end up trading these bonds? The banks themselves, who are more than willing to gobble each other up, a la Bear Stearns or WaMu. Combo this with forced disclosure of all derivative positions and watch as the banks smack each other into line at the first sign of weakness.

But, as we can see, this is not the current plan of the administration. Instead, the Good President Obama will argue for increased regulation under the assumption that the administration will be able to stop further problems. Because, of course, they have such a phenomenal track record.