Tuesday, April 28, 2009

Sea Fever

One of the best sailing poems ever:


I must down to the seas again, to the lonely sea and the sky,
And all I ask is a tall ship and a star to steer her by,
And the wheel's kick and the wind's song and the white sail's shaking,
And a grey mist on the sea's face, and a grey dawn breaking.

I must down to the seas again, for the call of the running tide
Is a wild call and a clear call that may not be denied;
And all I ask is a windy day with the white clouds flying,
And the flung spray and the blown spume, and the sea-gulls crying.

I must down to the seas again, to the vagrant gypsy life,
To the gull's way and the whale's way where the wind's like a whetted knife;
And all I ask is a merry yarn from a laughing fellow-rover
And quiet sleep and a sweet dream when the long trick's over.

By John Masefield (1878-1967).
(English Poet Laureate, 1930-1967.)

Sailing to Byzantium

Well this is an announcement to any friends, Roamans(spelled correctly) countrymen and relations that this will be the blog for our Cal 48 sailing blog instead of the previously posted URL which for reasons unbeknownst to me I cannot edit or add to any more. Perhaps it is too old and so this will be the sailing blog, the rant and rave blog, the politically incorrect blog, etc etc. I thought this would be a good time to post one of my favorite poems by William Butler Yeats and I will have to include John Masfield soon as well just for the sake of completeness. Mexico has become a bit swinish as you may have noticed and despite the advice of Janet Napolitano, we are planning on sashaying forth into battle to load up old koho with frijoles and avocados and heading over to Hilo on the big Island. Crew will be daughter Heidi and cousin Hal who have offered to crew over. From there we will lick our wounds, restock and head up the middle of the N Pacific to Alaska and try to link up with sister Shelley. We plan to do a little work on her bush cabin and wife Karlene will fly up sometime in August for our 25th and we plan a reunion voyage into Glacier Bay. I will try to post pics and commentary as I am able in Mexico, Hawaii and Alaska. Ladies and gentlemen, I give you William Butler Yeats:

Sailing to Byzantium

That is no country for old men. The young
In one another's arms, birds in the trees
- Those dying generations - at their song,
The salmon-falls, the mackerel-crowded seas,
Fish, flesh, or fowl, commend all summer long
Whatever is begotten, born, and dies.
Caught in that sensual music all neglect
Monuments of unageing intellect.

An aged man is but a paltry thing,
A tattered coat upon a stick, unless
Soul clap its hands and sing, and louder sing
For every tatter in its mortal dress,
Nor is there singing school but studying
Monuments of its own magnificence;
And therefore I have sailed the seas and come
To the holy city of Byzantium.

O sages standing in God's holy fire
As in the gold mosaic of a wall,
Come from the holy fire, perne in a gyre,
And be the singing-masters of my soul.
Consume my heart away; sick with desire
And fastened to a dying animal
It knows not what it is; and gather me
Into the artifice of eternity.

Once out of nature I shall never take
My bodily form from any natural thing,
But such a form as Grecian goldsmiths make
Of hammered gold and gold enamelling
To keep a drowsy Emperor awake;
Or set upon a golden bough to sing
To lords and ladies of Byzantium
Of what is past, or passing, or to come.

Monday, April 20, 2009

Changes to My Blog

I am using this post to announce that I am working full time for the next few weeks finalizing preparations for a trip back to our sailboat which will be "splashed" shortly for a circuitous trip around the Pacific to Alaska this summer via Hawaii in order to take advantage of favorable winds. My crew will be my daughter and my first cousin and our progress will be cataloged on my other blogsite svkoho.blogspot.com.
In one sense I will be happy to stop analyzing for a while the cultural and financial changes being wrought upon our society by the Obama administration which in the financial and business arena marks almost no change from the previous two administrations. Barak Obama and his advisers are obviously fully in the pocket of the corporate and financial power elite every bit as much as was bush#43 and any lingering hope I had for a political leader who would lead this country down a path of building a new America which respects the sovereignty of other nations and a new America which will lead the way to develop a new economy based on reorganizing our economy around rebuilding our manufacturing base to produce items of quality, building an energy base of sustainable energy and conserving scarce resources for my children......is largely gone. The power of this wall street financial power elite aided by the Treasury and The Federal Reserve with the acquiescence of this president to control the economic destiny of this nation bypassing the Congress and the people is at the moment unchallenged. If the Congress does not act soon to review or repeal the new powers of Treasury and the Fed, then our democracy, our economy, our currency and the future of our country looks bleak indeed. This president and his advisers are astoundingly stupid if they think that reigniting a debt and credit bubble will lead us back to prosperity if it was that same over expansion of debt and credit that led to this collapse. But this is apparently what they think. They do not understand that you cannot make chicken salad out of chickenshit. The Republican party operatives made no pretense of concealing their allegiance to this elite. The Democrats pretend to care about the common man and the middle class while embracing policies indistinguishable from the Republicans. Neither of these parties are seeing that this century will be the beginning of a deindustrial civilization as the virtually free fossil energy resources dwindle and eventually disappear taking down a world economy of ever expanding growth which was only made possible because of that free energy. Our clueless leaders and the sheep they are herding see the future as an extrapolation of the past and the present. They do not see that the immediate past and the present were made possible precisely because of the discovery and utilization of a magical source of energy which fueled expansive economic and population growth. Like today's generals, our leaders are fighting yesterdays wars using outdated assumptions and tactics. Some of Obama's ideas have merit of course but so many are misguided and unaffordable. An example is high speed rail which requires an entirely new rail system 5X as expensive as just simply expanding existing rail capacity. The Obama administration has had some limited success trying to patch up old alliances destroyed by his imbecile predecessor by kissyface overtures and a demonstrated willingness to listen but his failures on the economy are simply horrendous primarily because being a lawyer instead of a doctor, he has not the slightest understanding of the principle of triage: You ignore the mortally wounded and the wounded who will survive without help and you concentrate your resources on those who can only survive with aid. But this administration lacking good judgement about what sectors of our society are important and what are not is trying to save everyone with money we don't have.. Barak Obama so far is a perfect example why a smart person with bad judgement is a stupid person. Bush43 was a stupid person with bad judgement who has been replaced by a smart person with bad judgement. Either way we are screwed.
And as I mentioned in the beginning of this post, for the next several months I plan to inhale fragrant trade winds and gaze at a galactic night canopy deliciously oblivious to the collapse taking place back home. In this case, no news will be good news. Ciao.

Thursday, April 9, 2009


Our dear leader Larry being interupted by some protestors recently.

Iceland and the Law of Fraudulent Conveyance

As readers of this site may know, I am an keen observer of the ongoing drama in Iceland. What is going on in Iceland mirrors the drama in a good deal of Eastern Europe as well. There are people who would lead you to believe that the recently concluded G20 meeting in London achieved positive results for the world economy. If you believe what Dr Michael Hudson wrote in a recent article on the G20 and the IMF,nothing could be further from the truth. G20 nations offered to contribute about one Trillion in funds to the IMF to loan to these strapped emerging nations who are already loaned out and cash strapped. Dr Hudson, if I understand his conclusions, has said that these loans if they are accepted will just prolong the debt agony of these countries and have the true surreptitious purpose of returning these loans to the European banks that foolishly and perhaps fraudulently loaned them money in the first place, in effect a giveback to the banks by imposing onerous conditions on the workers and economies of these struggling nations. This is a serious charge but the most interesting part of his article was his explanation of a law in the state of NY called the Law of Fraudulent Conveyance. This was a law passed before the American Revolution to deal with a predatory practice of British speculators at the time. These brit speculators would loan money to upstate farmers and then demand payment before the crops came in and obviously before the farmers could get paid for their harvest. These creditors could then foreclose on these farms. And so this law was passed establishing the legal precedent " that if a creditor makes a loan without having a clear and reasonable understanding of how the debtor can repay the money in the normal course of doing business, the loan is deemed to be predatory and therefore null and void." Whoa partner! If this principle were to applied to many of the Iceland or Eastern European loans, the lending banks could find themselves out of luck. But I'm not holding my breath. The IMF has the same stranglehold on emerging market countries that the US finance and Insurance executives have over the American people. The IMF must know that there is almost no way for these countries to pay off these loans in much the same way that money loaned to emerging African countries decades ago was paid off. I think one can make the case that these loans were predatory and deceptive and therefore null and void and should be defaulted upon. I would think that the strategy should be for these countries to approach the IMF as a group rather than letting the IMF pick them off individually with sanctions. Dr Hudson makes the statement that no country has ever paid off its national debt and the IMF is demanding repayment of these loans on the backs of the labor of its citizens and by trading sovereignty and valuable national resources for this debt. If Dr Hudson is correct, these countries should either demand terms that are fair to their citizens or walk away and say "Enough!"

Terminal Keynesian Psychosis

I was listening to NPR on my way back from my morning workout when I heard that Ben Bernanke and Larry Summers had said that they saw evidence of "green sprouts" starting to appear in the economy. This is the same deluded Bernanke who recently said the recession would bottom by mid year with recovery late this year and into 2010.This is the same guy who professes to be an expert on the great depression. In medicine we call people who who create their own reality "psychotic" when their reality does not conform to the generally accepted perception of the bulk of humanity. And Larry Summers said much the same thing. Now people, keep in mind, these our your national economic leaders. It is possible that Larry and Ben believe what they say.. It is even possible they might be correct.But I think it is also possible they are suffering from TKP syndrome, or Terminal Keynesian Psychosis and folks who suffer from this terrible disease for which there is no known treatment must be treated with compassion and bundled up and led away to the Potomac State Home for the Economically Confused. Ilargi on the excellent site Automaticearth a few days back ran some graphs comparing the Great Depression looking at today's recession or depression from a world wide perspective. I will not reproduce the graphs here. They are stunning. The graphs compare world industrial production, world trade and world equity markets. The drops we are experiencing today are steeper and more severe than the period starting in 1929. I am willing to believe that there is a possibility that Larry and Tim and Ben and Alan and Neil and all the other economic keystone cops in DC are correct but looking at the data I have dredged up, I certainly cannot see any green shoots pushing up through the rubble.

Wednesday, April 8, 2009

Pitchforks and Torches

This post image reflects a recent comment by President Obama addressing bankers in which he used the phrase of "pitchforks" being wielded by unhappy citizens.It's a surprising image harking back perhaps to the 1931 film Frankenstein when the villagers came at Dr Frankenstein's villa looking for the monster. It gives me a glimmer of hope that the president is at least tuned in to America's increasing rage at the financial establishment who has destroyed their world. Of course torches and pitchforks are just a metaphor. How many Americans own pitchforks and how do you make a torch? I took part in massed demonstrations in Washington DC against the Vietnam War years ago and despite the hundreds of thousands outside the white house expressing displeasure at our pursuit of a futile war, I never felt any real rage was apparent then, but I think the first stirrings of rage against the financial establishment in and out of government could be gathering strength. I personally do not think mob action is the way to run a democracy because mobs can get out of hand in a hurry but democracy in America is more of an illusion than a reality. We have a financial corporate power base which has hijacked the American democracy. Finance has become so powerful that it can bypass the congress and the will of the people. Has there been a referendum put before the people asking them if they want to mortgage their financial future and pay for the mistakes of these financial plutocrats? No. Of course not. Treasury and the Federal Reserve don't need to ask permission to loot the taxpayer's wallets. They just do it and will keep doing it until the taxpayer says "ENOUGH!
I hope that we will see a popular uprising against the Influence of what has been called the FIRE economy(Finance, Insurance, Real Estate). In fact today the Insurance industry has come hat in hand for more federal bailout money. It is past time for Americans of all persuasions to write congress and the president demanding change we can believe in. This president has been blundering forward using advisers tied to finance. In the meanwhile we have lost our manufacturing capability to these looters. The president fired a manufacturing CEO at GM but the criminal incompetent CEOs at AIG,Citi, JPM and GS live on with still huge pay packages plundering the people who are fast on their way to serfdom. I think that finance is now analogous to 19th century robber barons and thank god that America had a fair minded conservative president Teddy Roosevelt who engineered anti trust legislation which reduced their power. The same thing needs to happen now. I hope it can happen peacefully but Barak has shown no willingness to even consider or discuss the seriousness of this issue.Many Americans have weapons at home far more lethal than pitchforks and once enough of them have nothing left to lose, watching corrupt corporate bankers receive another bailout could be the straw that finally breaks their back.

Monday, April 6, 2009

Woman Power

If you don't know these women by now, you should! That is Professor and author Elizabeth Warren of Harvard to the left who is overseeing the TARP program and who has been increasingly vocal demanding accountability from the wall street bankers who have probably caused the next great depression. The woman above is Brooksley Born who ran the CFTC in the late 90's and who is now famous for questioning the morons to her left about the risk of the then new financial derivatives. Now we know that she was right and they were stupid. Old Larry Summers even questioned the female brain's limited ability to understand math and science. He was fired from Harvard for those remarks but thinks worked out for him as he went over to the $33 Billion Wall Street hedge firm DE Shaw on for a much better salary(millions). As for Brooksley, well let's just say that they did not appreciate her remarks and they proceeded to shun her and run her out of the beltway on a rail. The reason I mention these fine women is that I had a friend ask me recently who I would replace the current unindicted economic co conspirators in Barak's economic cabinet if not with more corrupt minions from GS, JPM and Citi. The problems we have were caused by these Wall Street financial miscreants and the problems will not be fixed by them. These two women, BB and EW popped immediately into my head as women who were knowledgeable in economics, law and government and uncorrupted by same. And so it got me to thinking about why is it that all these greedy financial weapons of mass depression have been men? And as Michael Lewis in the April Vanity Fair article"Wall Street on the Tundra" pointed out, the main political party in Iceland was virtually 100% male as were all the perps in that poor country's financial meltdown.So my modest proposal is that as a country we should make sure that women are involved in decision making at the highest levels in government and finance. It is possible they could make the same stupid mistakes as old misogynist Larry but I think women have a perspective that has been ignored and in the case of Brooksley Born ridiculed. I have no doubt that if Brooksley's warnings were heeded at the time, we would not be in this mess to the depth that we are today. Every new pronouncement from Tiny Tim and slinking Larry just makes me want to rend more of my garments in despair.And Barak Obama shows no sign of getting it. His latest appointee Gary Gensler to head Brooksley's old job at the CFTC is insult upon injury. This guy was a protege of Senator Phill Gramm, Bob Rubin and Greenspan in the 90's and is himself another Goldman Sachs partner. He is another horrible nominee from the same fraternity who destroyed the world. These people should be pilloried, ridiculed and in some cases indicted for the damage they have done and instead the have been offered positions as foxes in charge of the hen house.

Wednesday, April 1, 2009

April Fools

These two fellas pictured to the left are the most prominent members of my Rogues Gallery of Perps who destroyed the world's economy and as you may have noticed, they are nowhere near done. Oh by the way, That is Tim Geithner nibbling the ear of Larry Summers. Why am I being so harsh to old Larry and Timmy? Well, because they are the most visible and incompetent rogues currently in vogue. They both are nibbling on the ear of the president and have the potential to fatally derail his presidency. The list of rogues is long and in one of my future blogs I hope to try to compile a list for induction into my Great Depression Hall of Fame or perhaps my Great Depression Hall of Shame. I have been studying the history and causes of this Great Depression for 8 or 9 months trying to tease out the villains and their responsibility or culpability in this mess here in the land of Absurdistan and Larry Summers and his protege Tim Geithner play a prominent role. Larry was an economics professor at Harvard and a former chief economist at the world bank. He took over from Robert Rubin who was a Co Chairman at Goldman Sachs. As you may know Bob went through the swinging door between banking and government to Citigroup Vice Chairman. Larry Summers before assuming the Treasury Post had been working behind the scenes with Republican banking interests led by Senator Phill Gramm which led to sweeping changes in banking deregulation and the passage of laws that have led to this Depression today. Rubin and Summers worked hard with the Goldman Sachs bankers and others to repeal the Glass-Steagall depression era act which had separated banking from investment banking, insurance and brokerage.Now a bank like Goldman Sachs could move everything under one roof and Bill Clinton in a foolish action far worse than Monica, signed it into law. It would turn into a disaster. The next act by Larry Summers in terms of its ultimate impact on this depression is probably far worse. He and his boy in the office Tim Geithner, were instrumental in passing the Commodity Futures Modernization Act of 2000 which abrogated any oversight from Federal Agencies such as the CFTC on financial derivatives such as Credit Default Swaps(CDS), interest rate, currency swaps and other financial "vehicles" which Warren Buffet has called Weapons of mass financial destruction. The exposure of US banks to the downside risk of exposure to CDS was recently released by the Comptroller of the Currency in its quarterly Report:
It is a 33 pg pdf and amazingly readable but take a look at which banks have the greatest exposure and make sure you are sitting down. These CDS are why Paulson and Summers and Co. forced the US taxpayer into owning AIG by the way. Turn to pg 13 and look at the numbers: JP Morgan Chase holds $88 Trillion, BOA $38 Trillion, Citibank $32 Trillion, Goldman Sachs $30 Trillion and Wells Fargo $5 Trillion. Just 5 of the biggest US banks hold $193 TRILLION in derivative exposure! It was these banks who received a large share of the $170 Billion sent to AIG. These CDS are indeed toxic assets dwarfing sub prime CDOs. Is it any wonder that the banks and the Obama economic team want to hide horrific numbers like this from the taxpayers and the rest of the world? If I am reading this report correctly there is no way in hell to remotely pay off these bad unbacked bets.
I'm sure Larry Summers and Tim Geithner had no idea that their actions had the potential to bring down the world economy when they pushed through this disastrous deregulation 10 years ago. They were foolish, stupid and clueless then. So please explain to me why Barak Obama chose these rogues to head his economic brain trust?
As I point out time and again, the Financial interests have hijacked our government and are furiously lobbying the Fed , the Treasury and the Congress to bail them out by tapping the taxpayer with their immoral and unfair privatization of profits and socialization of risk. They must be stopped and our only faint hope is the education of the taxpayer and our representatives. Simon Johnson who was the chief economist of the IMF in 2007-08 has an article in the latest Atlantic which lays out in great detail the magnitude of the current unfolding disaster. A must read:
And finally I have a humble proposal. One of the history's great bubbles was the South Sea Bubble in the 18th century in which bankers conned the British government into buying bonds which eventually were defaulted upon. A resolution was introduced in Parliament asking that the British bankers should be stuffed into a sack with a hundred angry snakes and tossed into the Thames. I think it is a resolution we should reactivate in our congress.