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Tuesday, July 15th, 2008

Subject:how to fix Fannie and Freddie
Time:11:33 pm.
Mood: accomplished.
Music:"For the love of a princess", Myleene Klass; "Whiter Shade of Pale", David Lanz.

good thoughts from Joshua Rosner in the Financial Times:
There is another option in relation to Freddie Mac and Fannie Mae. Rather than making the taxpayer liable for debts the debts of the government-sponsored enterprises, it would be more sensible to effect a smooth, prepackaged reorganisation plan. This could be done quite simply and would strengthen the GSEs’ ability to meet their congressionally mandated purpose of supporting liquidity in the secondary mortgage market.

The core of the GSEs’ mission is to purchase mortgages from mortgage originators, charge a guarantee fee to issuers to protect their ability to stand behind these loans, and securitise these mortgage-backed securities with assurances to MBS holders they would receive 100 per cent of their anticipated returns. To this end the GSEs have guaranteed $3,500bn in mortgage-backed securities These securities are backed by real housing assets and there is little question that, assuming they are well serviced, there will be relatively little loss over a longer period.

As part of a prepackaged reorganisation the government could explicitly assure MBS investors they will receive all of their guaranteed interest payments. Instead of giving ineffective management a line of credit, Treasury could provide the GSEs’ regulator with a line of credit used to assure timely payments on these obligations. This is the tool that Treasury provides the Federal Deposit Insurance Corporation with to sort out failed banks. Over time that line will be repaid by the running-off of the portfolios, active servicing of mortgages and through payment of claims by private mortgage insurers who guaranteed first losses on GSE mortgages. Because these debts are core to the GSEs’ social mission and real assets back these debts, this would be an appropriate resolution.

The next step would create approximately $150bn in new equity capital and enable to GSEs, without governmental support, to achieve more fully their chartered mission.

Over the past decade the GSEs have increasingly used their portfolios to speculate in aircraft leasing, manufactured housing, interest-only mortgages and other securities they are specifically prohibited from buying as part of their mission. In recent years, through these portfolios they funded nearly 50 per cent of the riskier private label Alt-A mortgage market, invested in aircraft lease securities, manufactured housing and other assets that leveraged them into trouble. To achieve this speculative, hedge fund-like growth they issued almost $1,500bn of senior corporate debt. By their investments, debt buyers supported speculation in non-mission-related activities and did so with a clear understanding they were funding non-mission-related activities. They also knew GSE debt was explicitly not an obligation of the US taxpayer and that was repeated constantly by the government and the companies.

In exchange for their current debt, these holders should receive 90 cents on the dollar of new, long-dated, senior debt in the companies and 10 cents of new subordinated debt. The companies would then have enough capital to support their core, chartered mission and could increase the social returns and financial returns of investors in their core mission. This approach would send a very strong signal, from the government, that investors fully consider the risks of bad asset allocation. It would almost certainly strengthen the dollar. Though it would cause pain for equity and subordinated debt investors, those investors received the majority of returns over the past several years and, in our great system, they are supposed to be subordinated.
Mr Rosner was discussing capping Fannie Mae's and Freddie Mac's portfolios back in 2005. Mr Rosner was also recently interview on PBS the subprime crisis.

Comments: Add Your Own.

Sunday, July 13th, 2008

Subject:aye, Tavarisch Ivanoff, 'tis merely a bit o' confidence bolstering for ruddy Freddie and Fannie
Time:10:20 pm.
Mood: amused.
Music:"Almost a Whisper", Yanni.

so Paulson and crew are handing Freddie and Fannie a 'get of jail free' card. Willem Buiter is not happy:
There are many forms of socialism. The version practiced in the US is the most deceitful one I know. An honest, courageous socialist government would say: this is a worthwhile social purpose (financing home ownership, helping my friends on Wall Street); therefore I am going to subsidize it; and here are the additional taxes (or cuts in other public spending) to finance it.

Instead the dishonest, spineless socialist policy makers in successive Democratic and Republican admininstrations have systematically tried to hide both the subsidies and size and distribution of the incremental fiscal burden associated with the provision of these subsidies, behind an endless array of opaque arrangements and institutions. Off-balance-sheet vehicles and off-budget financing were the bread and butter of the US federal government long before they became popular in Wall Street and the City of London.

.
.
.

So let’s call a spade a bloody shovel: nationalise Freddie Mac and Fannie May. They should never have been privatised in the first place. Cost the exercise. Increase taxes or cut other public spending to finance the exercise. But stop pretending. Stop lying about the financial viability of institutions designed to hand out subsidies to favoured constituencies. These GSEs were designed to make losses. They are expected to make losses. If they don’t make losses they are not serving their political purpose.

So I call on Secretary Paulson, Chairman Bernanke and Director Lockhart to drop the market-friendly fig-leaf. Be a socialist and proud of it. Come out of the red closet. The Soviet Union may have collapsed, but the cause of socialism is alive and well in the USA. Granted, the US version of socialism is imperfect thus far. The federal authorities have mainly intervened to socialise the losses in the financial sector while allowing the profits to continue to be drained off into selected private pockets. But that is bound to be an oversight. It surely cannot be the intention of such committed Marxists to target taxpayer-funded largesse solely at the very rich and at a few favoured, electorally sensitive constituencies. Fannie and Freddie are, or will be, safe in the hands of comrades Paulson, Bernanke and Lockhart.
of course they are hypocrites: they are in an exquisitely hypocritical Republican administration, one which has made deception its key calling card.

Comments: Add Your Own.

Saturday, July 12th, 2008

Subject:stop the whining folks!
Time:4:01 pm.
Mood: amused.
Music:"Adagio in G Minor", Dominic Miller, on guitar.

i did want a word for what seems to be happening with government officials concerned with the economy. after all, rather than Tell Things As They Are, they seem to be acting as if they feel that All You Need Is Love and that to bring the world out of the looming big recession is for everyone to Think Positively.

well, Economist's View has come to the rescue. it's Campaign Econ, that's what it is. apparently, it's current assessment is that Americans are whining needlessly and all our problems would go away if they didn't. that's all there is to it, folks! hmmmmmmmmmmmmmmm....

anyway, i expect we'll see titles including "Campaign Econ" showing up in the self-help aisles of Borders and B&N next. all you apparently need to do to satisfy the banker about to foreclose on your house is that they are whining needlessly.

Comments: Add Your Own.

Wednesday, July 9th, 2008

Subject:on a propensity to miscalculate
Time:11:09 pm.
Mood: disappointed.
Music:"Flight of Fantasy", Yanni.

Error! Error!

Danger Will Robinson! Danger!

See the possible calamity.

Comments: Add Your Own.

Thursday, July 3rd, 2008

Subject:who won the Cold War?
Time:1:21 am.
Mood: sad.
Music:"We'll Meet Again", from "Dr Strangelove".

so Medvedev is saying, like his Chinese counterpart, that the United States is in no position to give or offer advice, having made a shambles of itself. worse, Paulson is begging for Russia to invest in the United States, as if the USA were a developing country needing investment.

so who exactly won the Cold War?

and is this the supposed Greatness the Republican Party and the Bush administration has brought us?

(end titles from "Dr Strangelove")

"Laugh while you can, Monkey Boy!"

Comments: Read 4 or Add Your Own.

Tuesday, July 1st, 2008

Subject:reason to worry
Time:11:01 pm.
Mood: worried.
Music:"River's Perception--Saffron", from "Firefly", Greg Edmonson.

that Chinese premier Wen Jiabao raised the issue of the low dollar value and the subprime crisis with Secretary of State Condoleezza Rice raised some eyebrows. economic issues aren't usually treated as matters of state. by raising it, Wen Jiabao made it one.

i'm no expert on China or Chinese matters. i do know that the Chinese seem to place a lot on decorum, and upon the appropriateness of actions and words in situations. thus, by breaking with expectations, i think the premier was officially saying something. i only hope those in government can hear. i hope they can do something, but i have my doubts.

what i think China, through Wen Jiabao, is saying it something like: Ms Secretary, the low trading dollar and the loss of confidence in our investment in the United States through the subprime crisis are hurting China. They are doing damage. You need to stop them. Ms Secretary, China wants harmony and cooperation and teamwork. But China must take care of China. China cannot take care of anyone else if it does not take care of China. the United States must take care of itself.

if that indeed is what the premier meant, then it is chilling. for China could be saying that, should this continue, it will have no choice but to abandon the dollar and dump it, for its own protection. the day that happens we'll be looking at US$20 per gallon of gasoline and its consequences, as well as many other effects.

that's a day to dread.

Listen, strange women lying in ponds, distributing swords is no basis for a system of government... You can't expect to wield extreme executive power just because a watery tart threw a sword at you!

-- Monty Python

Comments: Read 4 or Add Your Own.

Sunday, June 29th, 2008

Subject:one good picture
Time:12:38 pm.
Mood: pensive.
Music:"South Rim", Nicholas Gunn.


Kevin Kelly at KK's Technium argues for applying the "gods' eye view" to scientific method. i am oversimplifying, but the notion is why not make up for the need for all that messy logic and inference by just applying simple queries to collections of Truly Huge datasets and replying upon the computational techniques we have to come up with suitable answers. quoting from the start of his blog post:
There's a dawning sense that extremely large databases of information, starting in the petabyte level, could change how we learn things. The traditional way of doing science entails constructing a hypothesis to match observed data or to solicit new data. Here's a bunch of observations; what theory explains the data sufficiently so that we can predict the next observation?

It may turn out that tremendously large volumes of data are sufficient to skip the theory part in order to make a predicted observation. Google was one of the first to notice this. For instance, take Google's spell checker. When you misspell a word when googling, Google suggests the proper spelling. How does it know this? How does it predict the correctly spelled word? It is not because it has a theory of good spelling, or has mastered spelling rules. In fact Google knows nothing about spelling rules at all.

Instead Google operates a very large dataset of observations which show that for any given spelling of a word, x number of people say "yes" when asked if they meant to spell word "y." Google's spelling engine consists entirely of these datapoints, rather than any notion of what correct English spelling is. That is why the same system can correct spelling in any language.

here's my comment to the post there:
Datasets alone, no matter how massive, aren't enough to produce and use hypotheses. Sure a "gods' eye view" can be very helpful and allow synoptic insights not possible any other way. But far more important than quantity of data is quality of data. Big datasets are often Just There. More often than not, there aren't ways of drilling down on a case and seeing where and how it was collected. Sometimes the case isn't informative at all. Sometimes the case is biased because of instrumental or measurement error. Sometimes the case is informative, but knowing something about the measurement could make it more so.

The idea that you can just throw away bad cases because you have so many good ones presumes the ones that are "bad" are known. In experimental work, much new stuff is found by eliminating or ruling out or correcting out biases and effects one layer at a time, and looking at the residuals. It's not like getting a big set of points and plotting them, or doing a regression on them. It's more like having a conversation with them.

A good example of this can be found in the 13th June 2008 issue of Science, D Purves, S Pacala, "Predictive Models of Forest Dynamics". There are many other examples from the LHC's detectors to geophysical prospecting and climate work.

Professor Marvin Minsky once said "Too much information is worse than too little". Professor Harold "Doc" Edgarton once observed on a project which proposed to take movies of fuel spray nozzles that it was "measuring more and more and seeing less and less".

sometimes all you want, all you need is one good picture.

update 20080630 00:18 EDT: apparently, Kevin Kelly wasn't the source for this idea, not even very recently. the notion erupted in the pages of Wired, with chief eruptrix being one Chris Anderson, editor-in-chief. the sheer media girth of that publication has already gained some significant response, including a piece by Three-Toed Sloth and a quite respectable assault by Fernando Pereira.

some of the comments on the article at Wired are pretty good.


Comments: Add Your Own.

Thursday, June 26th, 2008

Subject:that about says it
Time:10:33 pm.
Mood: discontent.
Music:"'Independence Day' End Title Suite", City of Prague Philharmonic.

from today's Financial Times, excerpted in part:
First, America’s political leaders must recognise that, unless recent improvements in the country’s trade balance can be sustained and accelerated, and domestic savings rise sharply, the US will remain heavily dependent on foreign capital in the form of purchases of government or corporate bonds, stocks and direct investment. US policymakers will need to find ways to increase domestic savings, shrink the federal deficit, reduce the heavy reliance of American consumers on credit and curb oil imports. Without these measures, massive amounts of foreign capital will be needed for years to come. This is not a matter of politics, but of arithmetic. In such circumstances, the US must remain attractive to foreign capital or suffer adverse consequences. Sound finances, enabling the US to borrow on reasonable terms, will remain an important factor in national strength. Frequent financial crises, large trade imbalances, a series of outsized budget deficits and failure to put Social Security and Medicare on a more sound financial footing could undermine investor confidence. That would discourage overseas investments and the willingness of central banks to hold dollar reserves, causing a plunge in US financial markets and the dollar, thereby jeopardising America’s growth.

Second, with foreign competition intensifying, robust growth taking place in many parts of the world and large numbers of US jobs and corporate profits dependent on expanding exports, the US needs to boost its own competitiveness and further open foreign markets for its goods and services.

A robust response requires vastly improved training and education, especially in mathematics, engineering, physics and science. More than ever this must benefit minorities and immigrants, the fastest-growing portion of the US workforce. Critical also is acceleration of government and private-sector investment in research and development to create competitive new jobs, products and industries. This is especially true in energy, where a variety of new sources and new technologies are urgently needed: such measures can produce increased employment opportunities, reduce oil dependence and the attendant massive outflows of funds, and sharply curb greenhouse gas emissions. The financial system and tax code must encourage greater domestic savings and investment, and channel funds to the most productive sectors.

these aren't some liberal commie pinko folks recommending this. these are major capitalist, free market folks from Goldman-Sachs International, Messrs Robert Hormats and Jim O'Neill.

fellow dudes and dudettes in the US of A, when are you gonna get with it and realize you gotta elect a Congress (first!) and a President that dig it, eh?

Comments: Read 1 or Add Your Own.

Wednesday, June 25th, 2008

Subject:silly dangerous games
Time:9:34 pm.
Mood: angry.
Music:"Bread and Wine", Peter Gabriel.


silly, dangerous, stupid games.

Comments: Read 1 or Add Your Own.

Subject:a little strange
Time:9:16 pm.
Mood: mellow.
Music:"The Spaghetti Western Theme", Enya.

i dunno, i found this thing about Dobson telling his minions to vote for Obama more than just a little strange. i mean, it's pretty cynical and Machiavellian. i mean, like, if you're gonna participate in representative democracy in the States, there's some basic need -- I THINK -- to believe in the magic of the process. to me, it's not a rational, self-optimizing or self-aggrandizing thing, it's more emotional than that.

the tone in this article goes against the grain of that. it's more of "Our side is great!" and "Your side sucks!"

where's the interest of the Collective Country in all that?

Comments: Read 1 or Add Your Own.

Subject:i agree ...
Time:9:10 pm.
Mood: mellow.
Music:"Moonday Live in Tokyo", Andreas Vollenweider.

i agree, universal, fast Internet and Web access is now critical for proper citizenship in the United States.

Comments: Add Your Own.

Sunday, June 22nd, 2008

Subject:let's come home
Time:8:03 pm.
Mood: rushed.
Music:"Schajah Saretosh", Andreas Vollenweider; "Resolution", Thievery Corporation.

Frank Rich has a point. if, indeed, it is so, as some Iraqi war apologists have claimed, that "we are winning on every front" and have championed, it is only logical to now set a timetable for withdrawing troops from Iraq. if we cannot do that, because of some unspecified risk of resurgence or deterioration, then the claim that "we've won" cannot be correct, can it now? one might say that claim of "winning" is, um, hot air.

Comments: Add Your Own.

Saturday, June 21st, 2008

Subject:Barack Obama
Time:10:56 pm.
Mood: frustrated.
Music:"Crimea II", Bodhi.

*sigh* yeahhhhhhhhhhh, i pretty much agree with Kathy G at The G Spot.

the thing is, these moves to the center won't clinch the Presidency. the Dems could still blow the biggest opportunity in a generation. and i even think they could do it.

(Hat tip to Economist's View.)

Comments: Add Your Own.

Subject:interesting article on women at war
Time:10:33 pm.
Mood: curious.
Music:"The Quest", Nova Era.

from the UK Times Online, an interesting article about women fighting in wars, playing key roles.
Comments: Read 1 or Add Your Own.

Subject:yeah, Riggghhhhhhhhhhhhhht ...
Time:9:31 pm.
Mood: irritated.

Andrew Roberts of (presumably) the UK Telegraph defines what is coming to be the Case for the Bush Administration, that they are badly misunderstood, that their strategy is working, and that history will prove them correct.

of course, they have had hundreds of competing and conflicting strategies. how are we to know they did not just get lucky? moreover, they have been able to mine the war for numbers and facts that are positive, putting the spin on them as they wish. even if they drove terrorist foreignors out of Iraq and brought a tyrant to account, they did it at a tremendous price, primarily for the people of Iraq.

i note Mr Roberts does not count their costs and he is selective in citing American ones.

the war in Iraq, however it is judged, may also be seen as the moment when America ceased being the Great Force for Good it once was, and ceded history to younger and more vibrant powers. and the cause of that dramatic ending could well be the failure to guarantee America's own future by avoiding the "entangling alliances" as its first President urged, and prolonging an addictive dependence upon an energy supply controlled primarily through such alliances.

the cause of its toppling most certainly will be seen as America's failure to realize the debt it owes and owed from its championship in the Cold War, then piling on more with this additional misadventure. recall the failures of the Hundred Years War.

Mr Roberts is, of course, defending his own positions on this matter as well. i'm sure nothing can convince him he was and is wrong, as apparently nothing can the sitting President and his own apologists.
Comments: Add Your Own.

Subject:a mashed mish of a post
Time:6:25 pm.
Mood: irritated.
Music:"Almost a Whisper", Yanni.

this post will go all over the place. i warn, not apologize.

so yesterday was my birthday, and i got calls from kids, a nice evening with Helen, call from my Mom today. it was otherwise an ordinary work day, to the extent any are ordinary. we had a good project technical meeting at 11 a.m. Monday will be early and busy preparing for a customer meeting. Helen and i went to dinner at Casablanca in Harvard Square, one of my favorites. it's themed after the movie, with large murals of Bogey, Bacall, on scene and in set. we then watched Neil Diamond's The Jazz Singer late into the night.

today, after a run around neighborhood and shower, i put together the few parts of our new gas grill, and we visited a nearby Home Depot to get some accessories.

i have a collected of things to write quick notes about.

in my readings, as usual i'm going in 5 directions at once. however, i have more what might be called fun readings than technical:
  • Danny Dreyer, Chi Running (finally reading the thing, rather than sampling)
  • Carl Sagan, The Demon-Haunted World: Science as a Candle in the Dark
  • Ross Garrett, The Symmetry of Sailing
  • B Efron, R J Tibshirani, An Introduction to the Bootstrap
  • Anne Framakides, A Manual of Modern Greek, which i'm trying to work alongside an online-supported byki program in Greek
i'm using a new music streaming service, one Pandora.com which apparently uses the recommender system technique i've written about to choose songs like those a listener chooses to offer as additionals. i rather like it, although i don't quite get what and why these offers to "take ownership" of "shared stations" means.

i rather liked a quote from George Bernard Shaw i read in a book review in Science:
Do not do unto others as you would that they should do unto you. Their tastes may not be the same.
this was from a book review of Donald Pfaff's The Neuroscience of Fair Play.

there is what i consider to be a really great analytical article by James Saft of Reuters about the contradictions and convenience of blaming high oil and gasoline prices on speculators. personally, i'm amazed and disappointed with George Soros who keeps making that mistaken point. i've written here on Martin Wolfe's take.

update 200806212315 EDT: This stuff gets complicated really quickly. Here's Mark Thoma struggling to follow the discussion. They don't friggin' know WHAT'S going on or, therefore, what they are doin'!

there's a reposted piece at at favorite ezine of mine, Cape Cod Today, about the hate-filled teachings high oil and gas prices are subsidizing. this is originally from the Seattle Post Intelligencer, but should not be news to regular readers of the New York Times thomas Friedman. he's long made the point that oil money supports and breeds despots and that a strong push by the United States government for independence from oil would not only cut us free of oil tyrrany, but would create freedom for peoples around the world.

update 200806221122 EDT:
  • Saudis ready to pump more oil, but convinced that "crude oil production levels are not the primary drivers of the current market situation and that markets are already well-supplied"
  • oil from Iraq? or is it giving the U.S. an excuse to re-intervene or retain troops longer once employees of oil companies from the United States start getting attacked, blown up, and decapitated? how much oil can Iraq contribute to us anyway? or is this another charade designed to make the blaming-it-on-insufficient-oil plausible? or is it the other way around? BushCo wants to hog tie the next Presidency into remaining in Iraq?
  • Thomas Friedman's take on continuing the addiction, his renewed opinion of BushCo, with specifics.

finally, Cape Wind won a major victory against opponents of its Nantucket Sound wind farm when a Barnstable Court rules that an environmental review of the project by the Commonwealth of Massachusetts was legally correct. it's about friggin' time, i say.

update 200806221122 EDT: because the country has the shakes from oil withdrawal, an array of wind turbines in Nantucket Sound aren't the only things opponents of Cape Wind have to worry about. how about a few oil drilling platforms?

this post has become a ball of mud!

update 200806282030 EDT: so, the Democrats of Congress have taken up the plebeian, populist drumbeat blaming those nasty speculators for Congress' collective irresponsible management of United States energy policy. says Democratic House Speaker Nancy Pelosi:
The American people should not be punished at the pump for the actions of oil speculators.
who's pandering to the public now?


Comments: Read 2 or Add Your Own.

Friday, June 20th, 2008

Subject:Jabber and Pidgin
Time:6:36 pm.
Mood: accomplished.
in an attempt to get connectivity throughout the IM universe, i've recently discovered Jabber. i did try Psi, but found configuring it for AIM problematic. so, now there's Pidgin, and life is better.

you can even post blog posts from it here, although i've set my blog posting settings to a conservative "Just For Me" as a default as a result. they can be made public later. also, it's not as easy to edit a blog post remotely. you don't get to preview it.
Comments: Read 2 or Add Your Own.

Subject:Mars on the rocks
Time:12:03 am.
Mood: happy.
Music:"Liftoff", from the movie, "The Rocketeer", James Horner.

it's ICE, dudes!

[blink photograph of ice subliming on Mars surface]

yeah, looks like water ice. kudos to the Mars Phoenix Lander team.

Comments: Read 3 or Add Your Own.

Thursday, June 19th, 2008

Subject:not a good day for N-news
Time:10:36 pm.
Mood: discontent.
Music:"Bolero", Cirque du Soleil.

y'can't say today was a good day for the diminishment of our collective liking to do bomb-like things with nuclear energy. worse, we have met the enemy, and he is us. while Israel might be getting nervous about losing their local monopoly on Big Things That Go Bang, organizations in the Good Ole USA are doing their best to supply Nuclear Shopping Bazaars for the world's leading terrorists.

first, it seems that not only were a few nuclear munition parts accidently shipped to Korea, resulting in the figurative loss of a few heads, but now hundreds of sensitive U.S. nuclear missile components are astray, possibly more than a thousand. it makes you wonder if the misdirection to Taiwan is just one that made it to headlines.

second, most nuclear weapons sites in Europe don't meet U.S. security requirements. in too much of a hurry or can't be bothered to build your own nuke? get one there!

one of the casualties of the late Cold War (in 1986) was loss of strict civilian oversight of nuclear weapons, something which was instituted in the early days of the United States nuclear program. not wanting to trust military folks and channels with nuclear weapons, the U.S. (wisely, in my view) gave primary control over these to the Department of Energy ("DOE"). they owned the weapons, and the military were at most custodians. DOE could audit them at any time, and paperwork regarding transfers went back to DOE. alas, the USAF and others chafed at this hindrance and interference in their domain, complained loudly to Congress about this interfering with the execution of their nuclear mission, and so the requirements were greatly loosened, although not eliminated. this change had unfortunate consequences, including and apparently the curious notion that only assembled and operational nuclear weapons deserve the highest level of guarding. in a world where the have-nots are eagerly pursuing advanced nuclear explosives, provision of a key item, by theft or diversion, could be a great boon. it should be noted, however, that the complicated permissive action links ("PALs") of modern U.S., Russian, and (presumably) Chinese nuclear weapons make the wholesale theft of such devices hardly a Hollywood-style slam bang.

finally, McCain said he'd push to build 45 more nuclear reactors by 2030, presumably in an effort to supply the energy needs of the United States when fossil fuel sources are becoming rarer and more expensive. there's nothing wrong with nuclear power, if it's done well and safe, and if a means of disposing waste cheaply and safely, including considerations of terrorist interception, especially the costs of preventing this. it would have been far more reassuring to hear a candidate speak of backing a massive new start on Thorium-based fission reactors, with research and underwriting development. Thorium is a cleaner nuclear fuel, and cannot itself or once used, be turned into an explosive weapon. these benefits are well known, and in fact a company exists intending to develop and exploit this nuclear source. but the nuclear energy complex of the United States retains a commitment to Uranium and Plutonium, despite their risks of waste and proliferation, although they are pursuing efforts to design reactors which use these nuclear fuels more completely, reducing the severity of their waste stream.

a candidate could show some imagination.

Comments: Read 2 or Add Your Own.

Tuesday, June 17th, 2008

Subject:just rubbish!
Time:11:44 pm.
Mood: pleased.

former CEO or not, Carly Fiorina's rubbish about a McCain strong dollar policy is pathetic, unrealistic, delusional, and disingenuous. it is more of the all it takes is optimistic thinking approach to severe economic imbalances we've heard of from Bush, Paulson, and Bernanke.

want to wake up?

read Martin Wolfe in the Financial Times today. some highlights:
Yet how can we have an incipient global inflationary process when the US economy and those of other significant high-income countries are slowing down? The proximate reason is that they matter far less than they used to. The underlying explanation lies in the forces driving both global demand and supply. ... Charles Dumas of London-based Lombard Street Research notes that, at purchasing power parity, China now generates a little over a quarter of world economic growth in a normal year, while emerging and developing countries together generate 70 per cent. Even at market exchange rates, the growth of China’s gross domestic product is as big as that of the US in normal years for both countries.

The emerging countries are also in a good position to keep on growing, largely because they have such strong external positions. Many emerging economies have intervened in currency markets on a huge scale, principally in order to keep export competitiveness up and current account deficits down. Over the seven years to March 2008, global foreign currency reserves jumped by $4,900bn (€3,175bn, £2,505bn), with China’s reserves alone up by $1,500bn. Indeed, as much as 70 per cent of today’s reserves have been accumulated over this period. "Never again," said the emerging countries hit by crises in the 1980s and 1990s; "not even once," said China. ...

Most of these reserves were accumulated by countries more or less explicitly targeting the US dollar and accumulating US liabilities. The resulting capital flow financed the US trade and current account deficits. But a trade deficit is contractionary: for any given level of domestic demand, it lowers domestic output. Thus, the US needed to expand domestic demand, in order to offset the contractionary effect of the external deficits. Some groups within the economy needed to spend more than their incomes. The most important such group turned out to be households. Thus the growth in US household indebtedness that led to today’s “credit crunch” is a direct result of the global imbalances.

Today, the hapless Federal Reserve is trying to re-expand demand in a post-bubble US economy. The principal impact of its monetary policy comes, however, via a weakening of the US dollar and an expansion of those overheating economies linked to it. To simplify, Ben Bernanke is running the monetary policy of the People’s Bank of China. But the policy appropriate to the US is wildly inappropriate for China and indeed almost all the other countries tied together in the informal dollar zone or, as some economists call it, "Bretton Woods II".

Thus, not only have the imbalances proved hugely destabilising in the past, but they are going to prove even more destabilising now that the US bubble has burst. When most emerging economies need much tighter monetary policy, they are forced to loosen still further.
it is good to read that Paulson is urging and agreeing to a China-United States energy pact, one of a number of possible joint initiatives pursued by China.

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