Archive for April, 2007|Monthly archive page

Subprime Mortage Meltdown and Consumer Demand

Greenspan, Alan and James E. Kennedy. 2005. “Estimates of Home Mortgage Originations, Repayments, and Debt on One-to-Four-Family Residences.” FEDS Paper No. 2005-41 (September).

Table 1: They estimate that by 2004, that net equity extraction (subtracting closing costs) represented 6.92% of disposable income.

How to be Sophisticated

Everyone wants to be sophisticated, but only the rich can decide what constitutes sophistication. Rich people are stylish, but designers for the rich scour the haunts of the poor to find inspiration for new styles. What follows suggests that the rich can even decide what words to use & when the non-rich catch on, the rich change the rules again. Continue reading

Visitor to our campus????

we got this warning today:

Sutter County Sheriff’s Department has issued a press release regarding a subject who has made a threat of “suicide by cop.” All local law enforcement agencies from Sutter, Yuba, and Butte counties are working together to locate Jeffery Thomas Carney, 28 years of age, 6’1″, 190 lbs, Brown Hair, Brown Eyes. Subject, Carney, claims to have weapons and that he was wanting to commit suicide by cop. Carney is known to drive a 1990’s Honda, red with black hood.

This subject has made no specific threat towards anyone or any place. However, in the importance of public safety, we want our campus community to be aware. If you have any information on the whereabouts of Jeffery Thomas Carney, please call our department at 898-5555.

If any additional information comes available, we will update the campus community. Refer to our website for a photo of Jeffery Thomas Carney. <;

Frederick “Eric” Reichel
Interim Chief of Police
CSU, Chico PD
(530)898-6313 fax

“providing a safe environment for our campus community through proactive, progressive, and professional law enforcement services”

The End of the Internet

I don’t know how reliable this is, but if it’s true, it is truly scary.
Federally Funded Boffins Want To Scrap The Internet

Researchers funded by the federal government want to shut down the internet and start over, citing the fact that at the moment there are loopholes in the system whereby users cannot be tracked and traced all the time.
Time magazine has reported that several foundations and universities including Rutgers, Stanford, Princeton, Carnegie Mellon and the Massachusetts Institute of Technology are pursuing individual projects, along with the Defense Department, in order to wipe out the current internet and replace it with a new network which will satisfy big business and government:
One challenge in any reconstruction, though, will be balancing the interests of various constituencies. The first time around, researchers were able to toil away in their labs quietly. Industry is playing a bigger role this time, and law enforcement is bound to make its needs for wiretapping known.

There’s no evidence they are meddling yet, but once any research looks promising, “a number of people (will) want to be in the drawing room,” said Jonathan Zittrain, a law professor affiliated with Oxford and Harvard universities. “They’ll be wearing coats and ties and spilling out of the venue.” Continue reading

Fictitious value, fictitious profits

Accounting has always been mysterious to me. A private equity firm takes over some large corporation, saddling it with a huge amount of debt or using workers’ pension funds to pay off stockholders. In the process, the private equity firm takes out exorbitant sums as payment for its efforts and then continues to take out exorbitant sums as a management fee.

Much of this money appears to be profit.

Eventually, the debt proves to be too much. The company fails. The workers lose their pension funds. Overly optimistic investors find themselves holding worthless stock. Their losses do not appear as a subtraction from profits.

Some of the company’s value will disappear in bankruptcy, but much of it is already disappeared in the form of debt which it has taken over.

What am I missing?

Kidney Donations for Freedom

The Chinese have been criticized for harvesting organs of executed prisoners. If this accusation is correct, then the criticism is well deserved.

In United States, we believe in voluntarism — well, sort of — and stand as a beacon for freedom that the Chinese should emulate. The state of South Carolina is working on legislation to allow prisoners to voluntarily give up a kidney in return for shortening their prison sentence by six months. Unfortunately, as the article below notes, irrational regulations make it illegal to trade an organ for valuable considerations. This law probably does not apply since the state no doubt considers to prisoners to be creatures without value, so six months of freedom could not be deemed valuable. Continue reading

Sallie Mae, Freddie Mac, and Fannie Mae

Does anybody know of any public good that has come from the privatization or these previous financial arms of the government? Now I read that Sallie Mae, which is about to be taken over by another company, has been bribing universities to make low cost government loans available to students.

Would the other two companies have been involved in their financial shenanigans if they were not reengineered to be profit oriented?

Is China This Bad

Holz, Carsten A. 2007. “Have China Scholars All Been Bought?” Far Eastern Economic Review (April).

“… of the 3,220 Chinese citizens with a personal wealth of 100 million yuan ($13 million) or more, 2, 932 are children of high-level cadres. Of the key positions in the five industrial sectors — finance, foreign trade, land development, large-scale engineering and securities — 85% to 90% are held by children of high-level cadres.”

Pointer from the Marginal Revolution Web Site

Elsie McClean Got a Hole in One

This news is not particularly interesting except that Elsie, a Chico resident, is 102.

Raining on Start Wars

Star Wars might work, but not not when it rains — at least according to this story.

Sieff, Martin. 2007. “BMD Focus: Rain Downed U.S. BMD Shield.” UPI (29 March).

The Project on Government Oversight, or POGO — a non-government U.S. watchdog body founded in 1981 — reported that several of the key interceptors could never even have been launched last July when North Korea fired its missile, not because of North Korea sabotage, or sabotage by anyone else, but because of rain. Continue reading