Keyser Söze's Lair: The Canary Just Died, So Watch Out!

The Lair Has Moved!

2009-04-22T12:12:00.005-06:00

As we all know, enough assholes pressed the "I'm a Humorless Asshole and am Getting Back at Keyser in a Cowardly Way" button up there and get the lazy shits at Blogger to deem the tasteful and informative Lair "objectionable." Well, Keyser finds that objectionable, and so has created his own site! You can now find the Lair at:

http://keysersozeslair.com

You know, the Blogger experience was pretty good up till now. It lets you post without too much hastle and it's easy enough for any idiot to set up his idiot site. Too bad it also allows idiots to complain about things that aren't worth complaining about, and that the people who run Blogger are too lazy to find out the truth. (Keyser's charitably assuming that they just go by the number of complaints and don't actually check themselves. If Blogger actually thinks the Lair is objectionable, they too are idiots.)

Eventually, Keyser will figure out how to transfer the old archive to the new site. In the meanwhile:

Toodles, Blogger!

The World's Full of Meddlesome Assholes: Fuck Them Edition

2009-04-21T20:05:00.003-06:00

Loyal readers of the Lair, and drive-by readers, are aware that the Lair has been deemed "objectionable" by the assholes that be at Blogger HQ. Presumably, those wearisome, malicious hags who hate Vixen (and your humble Pannonian) have probably been pushing the "flag" button up there like crazy (as is appropriate in their case). Or maybe it was just idle idiots who washed ashore here and are deeply offended by the idle "artsy" picture with an exposed breast. Because the world is full of meddlesome fools who are all anxious about what will happen to the "kids" if they see human anatomy, as some old lady in England recently found out:

Householder Sandra Smith has been ordered to cover up her garden gnomes after complaints that the naked ornaments were upsetting local children.

The gnomes, one male and two female, have stood in Mrs Smith's front garden for around 15 years in Hunnington in the West Midlands.
The grandmother has been forced to put clothes on the ornaments after a neighbour complained to Bromsgrove District Council and an officer phoned her.

"I've got grandchildren and they all love the gnomes," said 64-year-old Mrs Smith.

"They have been here for around 15 years and everyone who visits me finds them funny and a bit harmless fun.

"They're proper cheeky chappies with their little smiley faces looking up at you."

Now the gnomes have been dressed in miniature t-shirts to preserve their modesty.

...

The offended neighbour confirmed she had made the complaint. The woman, who did not wish to be named, said she thought the gnomes were "pathetic".

"I don't think they should be in a garden with my young kids running around nearby," she said.

Stupid bitch. Yeah, lady, the worst thing that could happen to your kids is that they'll see naked garden gnomes next door.

Anyway, Keyser is grateful for the kind words from both the "usual suspects" (ha!) and also from one of the "lurkers" (hi, Ken!). Keyser's glad that his effusions find favor with readers.

But, perhaps more pertinently, so do the pictures. You know, this blog consists entirely of things that strike Keyser's fancy and that he thinks other people might like too, and this includes the "artsy" photos. Back in the day, various members of the Department of the Classics of Harvard University had to troop down to some court to argue about whether the movie Caligula was pornographic. Oddly enough, they were in a good position to do so not only because they were aware of the historical subject matter but because one of the professors, Zeph Stewart, was the brother of Potter Stewart, the Supreme Court justice who famously claimed that he couldn't define pornography, but he knew it when he saw it. And Keyser is morally certain that Justice Stewart would not see it on the Lair. And some of the good professors claimed that the movie was a valid "artistic interpretation" of the topic, whereas others said it was just smut. (It certainly had a lot of sex in it, which isn't surprising as Penthouse publisher Bob Guccione was behind the production. Tangentially, Keyser Sr. had business dealings with the man, who he referred to as "that scumbag Guccione, but that's neither here nor there. Anyway, whenever Keyser posts a photograph of a naked woman it's because the image struck him as remarkable as an image. Sometimes, this is no more than something incongruous or silly in the image, which gives rise to a joke. Sometimes he just likes the image itself or it serves as a sort of commentary on the content of the post. But in no way could a reasonable person consider this pornography. Except no doubt for the asshole living next door to the gnomes.

So, what to do? There seems to be little point in continuing to post behind this curtain of disapproval - so Google/Blogger can go fuck themselves, as one of our commenters says. Given the reaction from readers, Keyser won't say "fuck it" (and the continued existence of the Lair is the best way of telling everyone who "flagged" the blog to go fuck themselves too.

But what to do? Just going to another "public access host" like WordPress.com may simply lead to the same problems over again. Getting an independent host may be the easiest route, but that entails a fair amount of investigation of stuff that Keyser doesn't really know much about right now. Which in turn means time, the one thing Keyser is short on. Not to bore you with the travails of Keyser's life, but he has one book to proof, another to revise (almost done), and a third to finish plush he foolishly agreed to review a book that Yale University Press needs an assessment of in regards to whether they should buy the publication rights in another country from Random House. And now that Keyser thinks about it, he agreed to write a bit of the intro of another book, and that's due by some time in June. Oych!

But Keyser will persevere, and whatever his failings in other regards, no one could accuse him of indolence (except maybe Keyser Sr., but his no longer in a position to carp). So the Lair will reappear triumphant like the reappearance of the phoenix in AD 139, which marked the epoch-making coincidence of the heliacal rising of the star Sothis with the start of the Egyptian civil calendar (but that's the subject for another post!).

You know, yesterday Keyser made fun of the god Tezcatlipoca, who is reputed for fucking with people. So learn from Keyser's mistakes and don't provoke the Aztec gods!

Mother of Mercy, Can This Be the End of Keyser?

2009-04-21T09:33:00.005-06:00

For Keyser's hipster readers (probably the only one's his got left now that the Lair has become NC-17), that's a reference to a famous line from the movie Little Caesar.

Now, Keyser's always maintained that his objective in writing on the Lair was fundamentally personal and he didn't much care about readership. That's still more or less true, but if you know from the start that pretty much nobody is going to read what you write, what's the point? Keyser could just as well scribble on the toilet paper in the bathroom for his own amusement.

Oh, sorry, did that offend some asshole who's going to press the "Oh, that's just so naught!" button? Too late, that's already been done.

Keyser's thinking of shifting over to another platform, like WordPress. The cost would be comparatively minor, but transferring all 1400+ items in the archive would be a bitch. This has not come at an all convenient moment, as Keyser is swamped with shit to do. So much to do, so little time.

But let's face it. Blogger sucks.

Keyser's Been "Flagged"!

2009-04-20T23:19:00.006-06:00

As you no doubt know, the Lair has been "flagged" as having objectionable content. This means some asshole(s) pressed the stupid little button up at the top. This retarded feature is Blogger's way of dealing with content problems, which is basically no solution at all. If there enough "flags," they just stick that page in front where you have to press "Yeah, I want porn" to see it.

Obviously, this is total bullshit. The grounds for objection are violations of the terms of service under one of the following rubrics:

PORNOGRAPHY AND OBSCENITY:
Pornography and Obscenity: Image and video content that contains nudity, sexually graphic material, or material that is otherwise deemed explicit by Google should be made private. Otherwise, we may put such content behind an interstitial.

Pedophilia, Incest and Bestiality: Users may not publish written, image or video content that promotes pedophilia, incest and bestiality.

Commercial Pornography: We do not allow content that exists for the primary purpose of monetizing porn content or driving traffic to a monetized pornography site.

Child Pornography: Google has a zero-tolerance policy against child pornography, and we will terminate and report to the appropriate authorities any user who publishes or distributes child pornography.

HATEFUL CONTENT: Users may not publish material that promotes hate toward groups based on race or ethnic origin, religion, disability, gender, age, veteran status, and sexual orientation/gender identity.

VIOLENT CONTENT: Users may not publish direct threats of violence against any person or group of people.

COPYRIGHT: It is our policy to respond to clear notices of alleged copyright infringement. More information about our copyright procedures can be found here.

PRIVATE AND CONFIDENTIAL INFORMATION: We do not allow the unauthorized publishing of people's private and confidential information, such as credit card numbers, Social Security Numbers, and driver's and other license numbers.

IMPERSONATION: We do not allow impersonation of others through our services in a manner that is intended to or does mislead or confuse others.

UNLAWFUL USE OF SERVICES: Our products and services should not be used for unlawful purposes or for promotion of dangerous and illegal activities. Your account may be terminated and you may be reported to the appropriate authorities.

SPAM, MALICIOUS CODES AND VIRUSES: We do not allow spamming or transmitting malware and viruses.

The vast majority of this is clearly irrelevant. There's no violence or copyright violation here. As for "pornography," that's horseshit too. In the blurb under that heading, they do use the word "nudity," but even Potter Stewart wouldn't call the Lair pornography. Far from it.

No. It's clearly an act of malice on the part of assholes, and the most obvious cowards to do that are the humorless old hags who persecuted Vixen and could dish it out but not take it.

Well, since they've gotten that "interstice" (as it's called) stuck up in front of the Lair - seemingly there's no resource - they can't do any worse can they? Keyser will continue to post here for his select band of readers, but maybe the Lair will set up elsewhere in a setting that's not so liable to interference from meddlesome assholes

And you know what? Now that Keyser's been flagged, it doesn't matter what he posts!

Ah, For a Peaceful Day in the Serglio!

2009-04-20T13:00:00.003-06:00

Sadly, Keyser's stuck in the salt mines...

When It Rains It Pours Page Proofs

2009-04-20T12:41:00.006-06:00

Earlier today Keyser pretty much challenged Tezcatlipoca (the Aztec god of being a jerk) to mess with him, and true to fashion, he came through.

Keyser lamented being distracted from the Lair by revisions to a book, and to try and get it done, he was actually going through chapter thirty-four while stationarily biking (now there's dedication for you!). Keyser comes upstairs and sees a FedEx truck outside. "Oh, boy, a book!" thinks Keyser. Turns out to be true, though not exactly in the way he had hoped (thanks a lot, Tezcatlipoca!).

Frigging page proofs for the next book! (Actually, it's the next, next book. One should be out in May, this one in August.)

It's not quite as bad as it looks. On the left is the copy-edited text with Keyser's corrections. The piles in the center and on the right are two copies of the first page proofs - 445 pages with the index but not counting the 17 illustrations (with big captions). You have to correct the proofs against the copy edited text, and then you send one copy back to them and keep the other for later consultation. Believe you Keyser, the thought of reading all that yet again is not too appealing.

Interestingly enough, the proofs are from Thiruvanmiyur, Chennai in India. Type-setting (or whatever they call it these days) is yet another job that's been "out-sourced" abroad. Good thing Americans are still good at manufacturing and exporting synthetic derivates or the US would be in trouble.

Oh, shit!

Vote NDP and You Get What You Deserve

2009-04-20T09:38:00.007-06:00

Keyser's high-tech StatsThingee informs him that something like 70% of his readership comes from the US, so most readers may not be that conversant with Canadian politics. Hence, this post comes prefaced with the information that the socialist party in Canada is called the NDP. Sort of like KFC, they're a bit embarrassed by the party's actual name (the Naughty and Deranged Party), so they just go by their initials. They get something like 10-15% of the vote in national elections, but in British Columbia (sort of the California of Canada) they actually get to form governments at times. The results are pretty predictable, which is why they haven't been in charge for a few years. That, and the sort of people they attract as candidates.

Seems NDP candidate David Lam has had to resign because pictures that he posted on Facebook were leaked over the weekend. Keyser's not entirely sure what the big deal is. So this guy's a young hipster who likes groping babes and having them fondle his not-quite-exposed putz (see below, appropriately enough). Sounds pretty much par for the NDP course to Keyser, but seemingly this is considered by some spoil-sports to be "indecorous" in a member of the provincial parliament. Presumably, their boning activities are supposed to be carried out only on the taxpayers, and babes are off limits.

Or maybe it's the fact that he showed bad judgment in selecting his friends in that one of his FB buddies must have done the leaking (as FB accounts aren't accessible to anybody but people you've approved as "friends"). Some friends! Then again, as Keyser understands it, young hipsters on FB are rather promiscuous in calling people their "friends," having many hundreds of the things (FWIW, Keyser has 39).

Choose your friends (and your MP's) wisely!

Keyser's Distracted

2009-04-20T09:03:00.006-06:00

This hasn't been too much of a problem in the recent past, but Keyser has been known to be monomanical. At the present time, he's revising a textbook, and this has taken over his life. It has thirty-five chapters, and Keyser's been hell-bent and determined to finish revising the thing (it's a joint project, and the coauthor has to give the manuscript a look-over once Keyser's done). So Keyser's been doing at least two and sometimes three chapters a day. Might not seem like much, but believe you Keyser, it's hard (mental) work, and Keyser's brain has been engaged rather fixedly on this project (Mrs. S. might say "obsessed," but as she's sick with a spring cold, she hasn't noticed too much). Keyser was up till 4 am last night (or was it this morning?) fiddling around with the thing.

So, you may be wondering to yourselves, why is Keyser telling us this? The point is that Keyser actually has some fairly long posts in mind, but hasn't had the spare time to free up a few synapses for it. You may be of the impression that these posts just write themselves, and to some extent that's true. The posts are sort of "forming themselves" in Keyser's mind. As a matter of fact, Keyser sometimes "composes" in his head things that don't actually get written down until months later (this is speaking of books). But the act of actually writing the posts takes a certain amount of mental concentration and Keyser's mind is fixed on other matters.

But we're practically done with chapter thirty-three, so the end is in sight. (In addition to thirty five regular chapters there are a few appendices, including one on the Aztec calendar. Boy, talk about your crazy way to count years! Thank God they could only afford The Idiot's Guide to the Maya Calendar, so they don't have any of that "long year count" wackiness.)

The point of all this being that to those who can't start their day without a brimming cup of Lair madness, Keyser is cognizant of having fallen down on the job - after all, Customer Satisfaction is Inic Centlamantli Tequitl here at the Lair! - so hopefully things will get back to normal soon.

Let's hope Tezcatlipoca's in a good mood (you can never tell with him)!

Modern-Day Cledon: Subprime Edition

2009-04-19T13:02:00.004-06:00

The ancients deluded themselves with notion that people could inadvertently make prophetic statements. Only problem was, no one knew it was a prophecy until after the fact, but at least it was comforting to know that one was part of some sort of divine "plan." For instance, the Harpies are pissed off with Aeneas, so they tell him his toils won't end until he and his companions wind up eating their tables. Sounds pretty grim, no? Well, eventually they wind up in Italy and drop in to some local trattoria for subs. Aeneas's son Jullus (or Ascanius, take your pick) idly remarks, "Hey, look, we're eating the tables." Pretty lame, but what do you expect from Trojans who'd never seen a sandwich before. But Aeneas wasn't your average plaything of the gods, so he says, "Hey, kid, do you realize what you just said? So, fuck you, Harpies, and you too Juno, you bitch!" And the rest is (mythological) history, as they say.

Now, Keyser has mentioned before his puerile delight in the Gremlins movies, and as it happens, Gremlins 2: As Much In Need of Discipline as the First One provided the distraction for this morning callisthenics. For readers not as conversant with the franchise as Keyser is, the movies are about those gremlins who take over some place though human carelessness until they're destroyed by our heroes, some guy and his girlfriend (played respectively by some guy and the cute Phoebe Cates). Well, in this morning's outing, the gremlins take over the Clamp Tower, a parody of the effect of modern corporate culture on society as represented by everyone's favorite plutocrat, Donald Trump (who actually doesn't come off too badly in the movie). Anyway, there's (rather implausible) a genetic engineering lab in the building, and one of the gremlins drinks some gunk that makes him articulate (unlike the buffoonish regular gremlins). There also happens to be a has-been actor turned kiddie-horror show host (reminiscent of Grampa on The Munsters), who realizes his dreams of a better job by interviewing the smart gremlin.

Grampa Munster asks the gremlin what the gremlins want, and he replies, "Civilizaton." After various jokes about what a gremlin's idea of civilization would consist of, he gives a list of things they aspire to, and one is: "Convenient credit even if we've been turned down before."

The penny drops (as the English say)! We all know that a major part of the recent financial meltdown has to do with a) "subprime" lending (also known as "giving loans to unemployed black men in vests") and b) turning these worthless loans into "collateralized mortgage obligations." Both cooking up and managing these CMO's and the related (and even more retarded) "credit default swaps" and "synthetic derivates" involves mind-numbingly complicated math formulas that allowed the unscrupulous to claim that they had brought risk management to levels of exactitude previously inconceivable and the foolhardy to believe that securities based on shit were "triple A." Only problem being that the sort of "pinpoint accuracy" they had in mind was the kind that made it possible to obliterate every city and town in Germany in the hopes of hitting something useful in the process.

So, the more charitable interpretation of the recent financial meltdown is that it was caused by math geeks who were trying to bring to life their favorite movie. The hostile interpretation is that the jackals on Wall St. are actually a bunch of demonic gremlins intentionally bent on destroying life as we know it.

"Fun yes, but hardly civilization," as the smart gremlins says.

To Tuva and Beyond!

2009-04-18T09:15:00.004-06:00

Keyser just glanced at the "Feedjit" thingee on the left and happened to see someone who'd arrived on the Lair from Bashkortostan. Keyser's first thought

Keyser generally thinks of himself as a geographically well-versed Pannonian, but even he can lose track of things in more obscure corner's of the globe. Case in point. Keyser was in a hotel in Nafplio Greece about twenty years ago, and they had on the wall in the lobby a poster with the flags of countries from all over the world. As Keyser was looking over them, his eyes fell on the pennant of Burkina Faso. "What the fuck?" quoth Keyser to himself. "Never heard of it." Turned out that in what used to be called "Upper Volta" a PC urge to stop implicitly denigrating the folks in Lower Volta had led them to rename the joint (thought this prove to be something of a local joke in that the new name actually means "May you contract worms that eat through the back of your eyes, you Lower Voltian curs" in Dioula, the national lingo.)

Anyhoo, Keyser googled "Bashkortostan" and Wikipedia proved its usual disappointing worth. Seems that that's just some fancy new name for Bashkiria, a region of Russia in the north Caucasus. Why didn't they just say so? Anyway, welcome to everyone in Bashkiria/Bashkortostan (though to be honest that new name sounds like some sort of cream you apply to cuts and abrasions "Bashkortostan! Available in fine drugstores everywhere.")!

Speaking of cream, it turns out that our Bashkortostani friend wound up on the Lair from the post "Porn for Dwarves." One of the amusements of blogging the way that Keyser does is to keep an eye on what leads people to the Lair, and that post is one of the Interwebz' favorite Lair posts. There's actually an intriguing trend going on regarding the images that attract googlers to the Lair, but Keyser won't spoil your fun of finding out for yourselves which old post has suddenly taken on a life of its own. Let's just say that it pertains to the opening of this paragraph and has a "homoerotic" theme (yes, yes, you don't get that much on the Lair, but there was a good reason!).

As an aside, obscure parts of the ex-Soviet Union reminds Keyser of a story that he's always liked. The famous physicist Richard Feynman had a friend who was a high school teacher, and one day (back in the early '70s, if memory serves), they had a discussion about postage stamp collecting. Feynman mentions that as a child he'd collected the full set from Tuva, and the teacher friend said (not unreasonably), "Ain't no such place." Feinman replies, "Yes, there is," and describes its history.

Tuva is a distant region of Russian being populated by speakers of an anomalous Turkic dialect and wedged between Russia and Mongolia (the place is also "famous" for the bizarre Tuvan throat singing). During the the chaos that broke out after the last Czar's abdication, the place became independent, and during the '30s issued not only a (small) emission of its own coins but also some triangular postage stamps, which was pretty bold back then. Unfortunately for the Tuvans, the place also sits on a big supply of uranium, and after learning from his commie traitor friends in the West that you could make a cool bomb out of the stuff, Stalin annexed the place in 1944 before much of anyone outside of stamp collectors could notice its existence.

So Feynman and his friend decide to go visit this obscure piece of property. This proved to be easier said than done, and the quest to gain permission to visit turned into a sort of quixotic quest for the holy grail. The attempt to get a visa became all the more pressing once Feynman was diagnosed with some sort of terminal cancer - who would reach their destination first, Feynman in Tuva or Death in Feynman? Anyway, because of Tuva's strategic importance, you couldn't just wander in with a tourist visa ("Western spy, why you take camera to important military location?"). But you could get a special visa if you could get an invitation from a local for some supposedly legitimate reason. Back in the day, you couldn't go online and visit the "Tuvan Federation of Soviet Socialist Teachers' Association" website. In fact, finding a copy of the Tuva white pages in Berkeley CA (where Feinman worked) was pretty much impossible. But eventually the intrepid would-be visitors got the address of some sort of education official, and wrote him a letter ("What's it cost to mail a letter to Tuva?" "To where?"). The mail between California and Tuva wasn't the swiftest, and the Soviet bureaucracy wasn't too interested in expediting such a visit, but nonetheless they got their visas. Only trouble was they showed up the day after Feynman died. (This is all by memory, but Keyser thinks that's actually how it worked out. There's a whole book on the quest, if you're curious.) Keyser's always like that story. The redoubtable human spirit, and all that. It's the sort of thing that makes a person translate the entire Bible into German even though he thinks the world's about to come to an end. Keyser thinks of it as the "fuck it!" spirit. Damn the torpedoes, full speed ahead!

So the next time you think you have a quest that seems impossible to you, like finding porn for dwarves, just remember that it is in fact possible to get a visa to visit Tuva, as long as you persevere.

Per ardua ad astra!

Commies Don't Know How to Shake Hands Like Adults

2009-04-18T09:05:00.004-06:00

Must be their version of a masonic handshake.

"Yo, dude. Let's subvert the dominant paradigm."

"Book, homey."

Who Says You Can't Judge a Book by Its Cover?

2009-04-17T20:03:00.007-06:00

As readers may know, George Will has gotten himself into all sorts of trouble with a recent piece in which he dumps on the nation for its lack of sartorial splendor:

A 10-year-old boy is walking with his father, whose development was evidently arrested when he was that age, judging by his clothes. Father and son are dressed identically -- running shoes, T-shirts. And jeans, always jeans.

We all known that Keyser thinks Will a pompous ass, and this piece is full of the usual Will-ful bombast (references to Edmund Burke and St. Paul, no less). Seems the Republic has gone to hell since people stopped dressing Fred Astaire and Gene Kelly (no, really!), or some such thing.

But even a broken clock is right twice a day (as long as it's analogue). As Jörg Regel famously said to Ulrich Zwingli in his letter of May 15, 1527:

Surely even if the Devil speaks the truth, it will still be the truth.

And regardless of whether credit default swaps and retarded economic policy can be laid at the feet of Levi Strauss, Will is right that the slovenliness with which most people dress today is say of indifference toward the opinion of others simply signifies an adult who has no sense of self-respect or propriety.

Denim is the carefully calculated costume of people eager to communicate indifference to appearances. But the appearances that people choose to present in public are cues from which we make inferences about their maturity and respect for those to whom they are presenting themselves.

The Will piece has met with pretty much uniform opprobrium from right-wing types. Jeans are practical. They don't cost much and you don't have to worry about changing fashions (presumably since lack of fashion is timeless). Implicitly, only a pack of homos or effect yacht owners would care about such matters. Oh, and jeans are so comfortable.

What? Jeans are stiff, and hot and uncomfortable. So from a practical point of view, Keyser doesn't buy the argument. But regardless of that, they lock casual. Which of course is exactly what they are. Keyser's always struck by pictures of crowds from the '20s and '30s, with all the men dressed in some variety of a suit and practically everyone above the level of workmen wearing a tie. What's the matter with that?

Keyser will tell you a story. Keyser's first job was working at Carson, Pierie Scott (a now defunct department store in Chicago), and after work on one hot, sticky Friday afternoon in July, Keyser had to take the Chicago, South Shore and South Bend Railroad to Michigan City IN. The cars back then were these big heavy things that had been built in the '20s, and naturally they were hot. Keyser was dressed in a light blue three-piece suit, and that too was hot. (Oddly enough, Keyser still owns the garment, though he doubts he'd fit in it any more.) On the car were a group of accountant-looking types who'd brought along with them a six-pack of cold beer (like to see them try that these days!). They took off their ties and jackets and were enjoying their brewskies, and Keyser asked himself whether he too should take off his jacket or at least loosen his tie. And the answer? No, if you've got a suit on, you should wear it properly, heat be damned. Those guys could look like slobs if they wanted, but Keyser for one was going to keep up appearances.

And a fortiori, you should dress in a dignified way in the first place, and not go out looking like a slob from the get-go.

Another story. On Keyser's last visit visit to Keyser Sr. before he had to shuffle off this mortal coil and repay his due to Mephistopheles, Keyser showed up after traveling in a t-shirt. For this he was soundly rebuked by Keyser Sr. for looking like a slob. Jörg Regel's dictate once more comes into lay, and Keyser had to admit to the justice of this censure. Apart from his daily bike ride in the summer, Keyser's never worn a t-shirt again. Keyser sometimes thinks this too bad when he sees a funny t-shirt that he'd like to wear. But no. Keyser could no more wear a t-shirt than that light-blue suit in the basement.

Given the troubles that our lackidaisical attitude to attire has landed us in these days of credit default swaps and synthetic derivates cooked up no doubt by computer geeks without ties (even the scum in charge like Kenny Blankenship, the CEO of Goldman Sachs do wear ties), it's worthwhile to listen to the words of Nicholas Antongiavanni, author of The Suit: A Machiavellian Approach to Men's Style:

...in times of prosperity, customs and mores always slacken, as success makes men insolent and riches make them idle. But in times of trouble they become circumspect, fretting that their prior conduct has caused their present ruin. They begin to respect those whose habits remained firm even in the boom years. This happens no less in matters of dress, which are an outward sign of our inner spirit. "Business casual" said to the world that making money is so easy, any slob can do it. But now that it has been proved difficult, men are less willing to trust their money to those who do not dress with care and respect. Thus by attiring your company smartly, you would attract all the capital, and overwhelm your competition.

Sage words indeed, shown to be all the more prescient in that the book was published back in 2006.

Is it any wonder, then, that when Keyser first read about the Will article, his first reaction was to think that he should go to a men's store and buy a nice light-weight suit that would be appropriate for the summer.

After all, appearances to have to be kept up, by somebody at any rate.

Citigroup Returns to "Profitability"

2009-04-17T08:18:00.003-06:00

Readers may recollect, that just the other day the boys in Chicago who manage Keyser's meager patrimony bought up a bunch of shares of Citigroup, somewhat to Keyser's astonishment as Keyser took a hosing on the previous shares that he owned. (Keyser mentioned that he'd inquire after the reasoning. It was pretty much what you'd expect. They think that the government has pretty much guaranteed that the big banks won't go under, so the stock's likely to rebound from its present value of about $4 per share, though they don't expect it to hit even $20 any time soon.)

Well, all this is premised on the banks returning to profitability, no? And that seems be the case with the jackals at Goldman Sachs posting some big earning the other day, and now that seems to be the case with Citigroup. AFter five quarters of losses, Citigroup claimed a $1.6 billion dollar profit for the first quarter. But get this:

Citigroup posted a $2.5 billion gain from accounting rules that allows companies to profit when their own creditworthiness declines. The rules reflect the possibility that a company could buy back its own liabilities at a discount, which under traditional accounting methods would result in a profit.

Read that over again carefully. They made $1.6 billion profit in total by an "accounting rule" that lets them profit from their own bad credit. As explained by Denninger, in 2007 the accounting rules were changed, so that if the value of your bonds decline, you count as "profit" the difference between what you as the company owe in redemption of the bonds at face value in the future and their current value in the bond market if the lack of credit worthiness has resulted in a decline of trading value (the bonds being discounted on account of the risk of default). Why? Because you (the company) might be able to buy your bonds back at a discount, thus saving money. And you're allowed to "book" this difference whether you actually buy them back or not! In effect, your business problems have hosed the value of your bonds and you're allowed to post a theoretical earning from your own ineptitude as if you could benefit from this, despite the fact that the whole reason you're bonds are in trouble should preclude you from having the money to benefit from it (by buying back the bonds at a discount), and in any event until you actually do buy them back, you've made no real profit at all, since you still owe face-value redemption. Basically, such "profit" is totally meaningless.

So, $2.5 billion of Citigroup's $1.6 billion profit is actually at best an accounting charade (if not an outright fraud in the broad, if not legal, sense). Granted Keyser doesn't have one of those high-power whizmatrons that allows you to calculate the value of synthetic derivate to the penny with scientific precision, but that sounds like just on this score, Citigroup has a net loss of at lest $900 million.

Remember the words from the Trillion Dollar Bore:

The transparency and integrity of American financial markets has always been a magnet for global financial flows. Much of that trust has now been squandered and will be even more sorely tested in the years ahead. To restore credibility, American officials and financial leaders must forthrightly admit the scale of the problem and proceed to purge the absurd valuations, the phony triple-A ratings, and the inflated balance sheets that are marbled through financial balance sheets. The cost of not doing so - the loss of faith in American markets - will be far greater than a one-time trillion dollar asset writedown, painful though that may seem.

But course we've got the big "stress tests" come up (if our termite overlords deign to let us know what those are - since the taxpayers aren't owed an accounting of who got the $665 billion of TARP money that's been spent so far, one wonders why anyone should think they need to know the no doubt "cooked" results of those tests), so no one could doubt that "transparency" is coming to a bank near you, right? After all, they've sorted their problems out in a forthright way, and have proved this with Citigroup's regained profitability.

Yeah, right.

People Who Hate Vixen Are Insane

2009-04-16T22:05:00.005-06:00

Some Vixen hater left an anonymous comment, which Keyser deleted for cowardice. The coward who wrote that had the effrontery to mail Keyser directly:

What a cowardly piece of shit YOU are! Won't even post the truth about your bff, that's best fucking fox for you Keyser. Well, well, what do you have to say now that everyone knows she has a record and a conviction for threatening people: a former boyfriend and an attorney. Poe widdle Keyser! Can't take the truth much less post it!

Gosh, when you start talking about the fantasies these people have of wanting to blow David Caruso, they sure get testy, don't they? Keyser has no idea what this coward is talking about. Unlike her, Keyser doesn't really care much about the matter, as anyone who actually reads the Lair would know. He just doesn't like them and has fun fucking with them.

Presumably, this means that Vixen threatened someone else. So what? Keyser never defended her actions.

And what a low-life this person is. She accuses Keyser of being a coward, when she posts anonymously and then sends an email from an account called "keyser lostandfound@gmail.com"? Talk about hypocrisy of the highest order.

You people are really tiresome. Get a life. One that doesn't involve a desire to fellate third-rate hacks like David Caruso.

So, you want to use a real identity, coward? Didn't think so. Until you do, stay under your rock with the other slugs.

"You Have Made My Uncle Sam's House a Den of Thieves"

2009-04-16T18:52:00.005-06:00

Keyser's gotten tired of ragging off on AIG these days and has turned his glare in the direction of Goldman Sachs, intimating that they've bought themselves the services of the Federal government to bail themselves out the unfortunate consequences of their reckless, self-serving greed. Lest readers imagine that Keyser is just turning into some sort of multi-syllable version of Glen Beck, Keyser just read a piece from the Atlantic that pretty much says in more measured terms what Keyser has been suggesting in his inimitable Pannonian fashion.

The author is at present a professor at MIT but was an economic consultant at the IMF. He starts out by discussing what it's like when a country comes to the IMF to ask for a bailout. It's always a less advanced country, and the trouble is often caused by the "oligarchy" of senior business types who get in over their heads and come to financial grief. At first, they use their pull with the government to get favorable treatment for themselves (a "bailout") at the expense of the general public. The government is unwilling to act against the interest of the oligarchy, and if things get really bad, the whole thing becomes untenable, at which point the IMF's aid is solicited.

As you read along, it's hard not to think, "Gee, that's just what they're doing in the US." And that is, of course, the point. But worse than the immediate economic comparison is the similarity of the political situation:

But there’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.

Keyser's mentioned before that in his opinion there's an overlap between the jackals on Wall St. and the political elites in Washington, so that it's impossible for scum like Barney Frank to bitch too much lest their own (and their friends') overly chummy relationship with Wall St. would come to light. Well, he's not the only one to think this:

One channel of influence was, of course, the flow of individuals between Wall Street and Washington. Robert Rubin, once the co-chairman of Goldman Sachs, served in Washington as Treasury secretary under Clinton, and later became chairman of Citigroup’s executive committee. Henry Paulson, CEO of Goldman Sachs during the long boom, became Treasury secretary under George W.Bush. John Snow, Paulson’s predecessor, left to become chairman of Cerberus Capital Management, a large private-equity firm that also counts Dan Quayle among its executives. Alan Greenspan, after leaving the Federal Reserve, became a consultant to Pimco, perhaps the biggest player in international bond markets.

These personal connections were multiplied many times over at the lower levels of the past three presidential administrations, strengthening the ties between Washington and Wall Street. It has become something of a tradition for Goldman Sachs employees to go into public service after they leave the firm. The flow of Goldman alumni—including Jon Corzine, now the governor of New Jersey, along with Rubin and Paulson—not only placed people with Wall Street’s worldview in the halls of power; it also helped create an image of Goldman (inside the Beltway, at least) as an institution that was itself almost a form of public service.

You thought Keyser was exaggerating the influence of Goldman Sachs, did you? To paraphrase Rudolf Hess, "Wall St. is Washington, just as Washington is Wall St." (In the image above, Larry Summers, one-time Treasury Secretary under Clinton and present-day consigliere of Pres. Barry, is telling his real bosses how he's doing in orchestrating the ~~plundering of the treasury~~ ongoing bailout.)

The IMF guy goes on to describe how the feeling has arisen since the '80s that the interests of Wall St. and the country were identical, and (not surprisingly), the interests of the former increasingly came to define the latter. At the same time, the idea arose that the jackals on Wall St. actually knew what they were doing, whereas the meltdown of the past year or more has demonstrated that their policies were completely reckless and doomed for failure, but they couldn't resist making the huge profits in the short term, while the government in Washington was like some prey hypnotized by the stare of a cobra and unable to act independently (that is, by reining the manifest lunacy in and exercising the modicum of regulation that is the excuse for the government in the first place).

Despite the disaster that's unfolded and is unfolding, the elites in Washington are so far in the thrall of Wall St. that it's apparently inconceivable to come up with any solution that involves the slightest bit of inconvenience for the jackals.

The response so far is perhaps best described as “policy by deal”: when a major financial institution gets into trouble, the Treasury Department and the Federal Reserve engineer a bailout over the weekend and announce on Monday that everything is fine. In March 2008, Bear Stearns was sold to JP Morgan Chase in what looked to many like a gift to JP Morgan. (Jamie Dimon, JP Morgan’s CEO, sits on the board of directors of the Federal Reserve Bank of New York, which, along with the Treasury Department, brokered the deal.) In September, we saw the sale of Merrill Lynch to Bank of America, the first bailout of AIG, and the takeover and immediate sale of Washington Mutual to JP Morgan—all of which were brokered by the government. In October, nine large banks were recapitalized on the same day behind closed doors in Washington. This, in turn, was followed by additional bailouts for Citigroup, AIG, Bank of America, Citigroup (again), and AIG (again).

Some of these deals may have been reasonable responses to the immediate situation. But it was never clear (and still isn’t) what combination of interests was being served, and how. Treasury and the Fed did not act according to any publicly articulated principles, but just worked out a transaction and claimed it was the best that could be done under the circumstances. This was late-night, backroom dealing, pure and simple.

Throughout the crisis, the government has taken extreme care not to upset the interests of the financial institutions, or to question the basic outlines of the system that got us here. In September 2008, Henry Paulson asked Congress for $700 billion to buy toxic assets from banks, with no strings attached and no judicial review of his purchase decisions. Many observers suspected that the purpose was to overpay for those assets and thereby take the problem off the banks’ hands—indeed, that is the only way that buying toxic assets would have helped anything. Perhaps because there was no way to make such a blatant subsidy politically acceptable, that plan was shelved.

Instead, the money was used to recapitalize banks, buying shares in them on terms that were grossly favorable to the banks themselves. As the crisis has deepened and financial institutions have needed more help, the government has gotten more and more creative in figuring out ways to provide banks with subsidies that are too complex for the general public to understand. The first AIG bailout, which was on relatively good terms for the taxpayer, was supplemented by three further bailouts whose terms were more AIG-friendly. The second Citigroup bailout and the Bank of America bailout included complex asset guarantees that provided the banks with insurance at below-market rates. The third Citigroup bailout, in late February, converted government-owned preferred stock to common stock at a price significantly higher than the market price—a subsidy that probably even most Wall Street Journal readers would miss on first reading. And the convertible preferred shares that the Treasury will buy under the new Financial Stability Plan give the conversion option (and thus the upside) to the banks, not the government.

This latest plan—which is likely to provide cheap loans to hedge funds and others so that they can buy distressed bank assets at relatively high prices—has been heavily influenced by the financial sector, and Treasury has made no secret of that. As Neel Kashkari, a senior Treasury official under both Henry Paulson and Tim Geithner (and a Goldman alum) told Congress in March, “We had received inbound unsolicited proposals from people in the private sector saying, ‘We have capital on the sidelines; we want to go after [distressed bank] assets.’” And the plan lets them do just that: “By marrying government capital—taxpayer capital—with private-sector capital and providing financing, you can enable those investors to then go after those assets at a price that makes sense for the investors and at a price that makes sense for the banks.” Kashkari didn’t mention anything about what makes sense for the third group involved: the taxpayers.

So, what is the upshot of this? That the banks have been left in a damaged state because from their own perspective it's better to limp along in the hope that something will come along, and in any event, fessing up to the truth can only harm them, so fuck it. And naturally their stooges in Washington are only too happy to comply.

What then is this guy's solution?

The government needs to inspect the balance sheets and identify the banks that cannot survive a severe recession. These banks should face a choice: write down your assets to their true value and raise private capital within 30 days, or be taken over by the government. The government would write down the toxic assets of banks taken into receivership—recognizing reality—and transfer those assets to a separate government entity, which would attempt to salvage whatever value is possible for the taxpayer (as the Resolution Trust Corporation did after the savings-and-loan debacle of the 1980s). The rump banks—cleansed and able to lend safely, and hence trusted again by other lenders and investors—could then be sold off.

Cleaning up the megabanks will be complex. And it will be expensive for the taxpayer; according to the latest IMF numbers, the cleanup of the banking system would probably cost close to $1.5 trillion (or 10 percent of our GDP) in the long term. But only decisive government action—exposing the full extent of the financial rot and restoring some set of banks to publicly verifiable health—can cure the financial sector as a whole.

Attentive readers will see that a lot of this is what Keyser's been saying all along. Washington is doing the bidding of its masters on The Street, and what they're trying to do is prevent at all costs a clear and transparent assessment of the costs and a reckoning of who's responsible. Instead, we get a shell game in which $700 billion has been given away to those fuckers, literally without anyone apart from the unindicted co-conspirators in the Treasury having the least notion of who got all that money (and they act as if it's none of our fucking business). And even at that, the losses are still there and have just been papered over (can anyone say "zombies"?).

Readers may recollect that Keyser cited earlier this month a book claiming back in 2007 that it was imperative for the US to sort out its financial house in a prompt and transparent manner:

The transparency and integrity of American financial markets has always been a magnet for global financial flows. Much of that trust has now been squandered and will be even more sorely tested in the years ahead. To restore credibility, American officials and financial leaders must forthrightly admit the scale of the problem and proceed to purge the absurd valuations, the phony triple-A ratings, and the inflated balance sheets that are marbled through financial balance sheets. The cost of not doing so - the loss of faith in American markets - will be far greater than a one-time trillion dollar asset writedown, painful though that may seem.

It's obvious by now that this is never going to happen, as it's not in the interest of the oligarchy that works out of Goldman Sachs' boardroom and controls the US government. If that's the case, what options does the IMF guy see:

In my view, the U.S. faces two plausible scenarios. The first involves complicated bank-by-bank deals and a continual drumbeat of (repeated) bailouts, like the ones we saw in February with Citigroup and AIG. The administration will try to muddle through, and confusion will reign.

...

Our future could be one in which continued tumult feeds the looting of the financial system, and we talk more and more about exactly how our oligarchs became bandits and how the economy just can’t seem to get into gear.

The second scenario begins more bleakly, and might end that way too. But it does provide at least some hope that we’ll be shaken out of our torpor. It goes like this: the global economy continues to deteriorate, the banking system in east-central Europe collapses, and—because eastern Europe’s banks are mostly owned by western European banks—justifiable fears of government insolvency spread throughout the Continent. Creditors take further hits and confidence falls further. The Asian economies that export manufactured goods are devastated, and the commodity producers in Latin America and Africa are not much better off. A dramatic worsening of the global environment forces the U.S. economy, already staggering, down onto both knees. The baseline growth rates used in the administration’s current budget are increasingly seen as unrealistic, and the rosy “stress scenario” that the U.S. Treasury is currently using to evaluate banks’ balance sheets becomes a source of great embarrassment.

Under this kind of pressure, and faced with the prospect of a national and global collapse, minds may become more concentrated.

Oh, great. We have to wait for "national and global collapse" to make the "elected representatives" break free of the death grip of people like Kenny Blankenship (CEO of Goldman Sachs) and Timmy Geithner (his grocery boy).

God's blood, if Keyser weren't so busy, he thinks he'd apoplectic. As it is, he can only shake his head in despair. Read the whole thing yourself if you want to drink deep from the same dregs.

h/t to percipient Lair reader Dr. Anton Phibes

Not Enough Time!

2009-04-16T16:47:00.004-06:00

You know, if Keyser has inculcated anything worthwhile in the next generation of Söze's (a debatable proposition), it's the idea that the most valuable commodity on earth is time. You can't buy any more than what you've got, and once you've wasted it, you can't get it back. When you're young, you think you have all the time in the world, but sadly that's not true. So much to do, so little time!

You may be asking yourself, "What is he going on about now?" It's that Keyser is feeling sort of harried now, and feels bad about not posting more. There are all sorts of ideas bouncing around in his cranium, but - time, time, time! Actually, Keyser's in the middle of finishing one book, but is taking out about a month to finish a separate book, and is feeling (internal) pressure to get it all done.

Anyway, Keyser will try to write more later, but after the current chapter is revised, he'd like to do another one this evening. And play a board game with Mrs. S. and the Smallest Keyserling. And, and, and...

You know, someone once sad that the saddest phrase in the English language was "if only." Keyser thinks it's "and..."

Sign of the Times?

2009-04-16T10:18:00.006-06:00

The new phone books showed up today, and here's what they chose to have printed across the bottom edge of the white pages (presumably on the assumption that it would generally be laid on its back cover, with the bottom sticking out towards the viewer - and you've got a naughty mind given the image that was created in your mind by that description!).

Not a very optimistic message.

Hey, Keyser, We Out of the Woods Yet?

2009-04-16T09:04:00.007-06:00

Damned if Keyser knows. The stock market is certainly up, which seems to be driven mainly by the heartening news that the banking system isn't going to explode. And why's that? Well, they've been given hundreds of billions of dollars, haven't they? If that's the case why shouldn't they?

But what happened to all those bad mortgages that started the mess? Are the foreclosures down? Well, they were temporarily, because of a moratorium on foreclosing. Everybody was holding their breath to see how Obama would bail out the improvident. Now that everyone knows (with the US treasury giving a "down payment" of $10 billion to banks for the purpose of deadbeast with their mortgages via fabricated funds ), the banks can go back to foreclosing on those ineligible for the scam. And those threatened with foreclosure in March were up 46% compared to the same period a year earlier. So how does that relate to the big profitability of the banks? Perhaps their profitability has something to do with the fact that they can borrow money from the Fed at basically negative interest rates and get back a lot higher than that on their performing loans (how much does anyone who keeps out a balance on a credit pay? It sure ain't .25%.).

So, loose interest rates and a failure to look too carefully at the books means the bad loans are ignored and the short term money makes the banks look okay and prevent the improvident from paying any penalty for their malfeasance. Want to know why no one really noticed the bursting of the dot com bubble back in 2000/1? Because the Fed flooded the market with made-up money to paper over the losses. And what was the result of that? Why, the bubble that burst back in 2007 and caused such distress. Even if they've bought their way out of trouble in the short term, you can't return to prosperity on a sustainable way with borrowed or (even worse) printed money. So, if want to make money on the sucker's bull market, go for it. But this can't last forever.

Even in the immediate frame of reference, there's still problematical news out there. We've already noted the continued distress among mortgage holders. The problem with the banks was that a lot of their shitty loans were based on inflated prices, so that if the property was sold now, it wouldn't be sold for a price equal to the amount loaned. The banks claimed that in the long run it would, and have been holding off having to mark down these losses. Despite the profits the banks have been posting, is there a real hope that these mortgages will be fully recoverable through the increase in housing prices? Housing starts in March were the second lowest recorded in recent history (behind only February for the record). And apparently out in California, ground zero for lending, the defaulting are now spreading to the tonier neighborhoods." Doesn't sound like a booming housing market is in the offing, does it? And we haven't heard much in the general news about commercial property, but things are bad there too. They plan to rebuild the WTC seems to be going on hold because (apart from general incompetence in that it's more than eight years after the destruction, and they still have their head up their asses), there isn't demand for the space. Speaking of space, a huge holding company of malls has filed for bankruptcy.

Okay, you're saying to youself, this is just a lot of bullshit relating to speculative prices. The real economy of producing stuff is okay, right, regardless of how much stocks and houses and stuff like that costs. Uh, not so much.

The output of the nation's factories, mines and utilities fell 1.5% in March despite higher production of motor vehicles and boost from utilities, the Federal Reserve reported Wednesday. Industrial production is down 13.3% since the recession began in December 2007, the largest percentage decline since the end of World War II. Output fell at a 20% annual rate in the first quarter, and is now at the same level as December 1998. Factory production fell 1.7% in March. Factory output has fallen 15.7% during the recession, also the largest decline since 1945-1946. Capacity utilization fell by a full percentage point to 69.3%, the lowest since the data series begins in 1967.

Keyser's said it before, and he'll say it again. The stock market is often driven by immediate concerns that have little to nothing to do with the broad picture. The big drop since the start of the year (that is, the decline from a DJIA of around 8000 down to 6500) was driven by concerns about the banks. (A bear in mind that that's just a recouping of this year's losses, and has nothing to do with the massive downturn last fall.) The banks have been "saved" by having vast amounts of cash thrown at them courtesy of Goldman Sachs' minions in the Federal Reserve and US Treasury. They'd have to be in massive trouble not to make money under those circumstances. But that's not necessarily a sign of actual turn around.

As noted above, the "fundamentals" are not at all healthy. And even if there is some upturn, it's fundamentally based on papering over the real losses suffered in the heated speculative expansion of the early part of the decade. What led to that excess? Lax fiscal and monetary policy. What's easing the situation now? Even laxer fiscal and monetary policy.

The bottom line is: you cannot become prosperous through printing yourself new "money." Money is merely a claim on output, and means nothing in and of itself. More "money" in the absence of more production simply means higher prices, and inflation itself is destructive of investment. So, what we have here is a repeat of the failed policies of the 1930s and of the Japan in the 1990s. Creating lots of money out of thin air in the effort to keep prices up. Declining prices are simply a sign of economic readjustment after a period of economic "malinvestment" caused by artificially low prices and this readjustment is good overall (though bad for the jackals like Goldman Sachs who caused and profited from the malinvestment).

The quasi-property of today (as well as the continued racketeering of Goldman Sachs) will come at the price of either another, and perhaps bigger, down turn in the future (as happened in 1937 and 2007-8) or a period of ongoing stagnation (Japan since the 1990s).

This is what comes of turning over control of US economic policy to the boardroom of Goldman Sachs.

Keyser's Rooting for the Thieves!

2009-04-15T17:21:00.005-06:00

So, since things have calmed down a bit on Wall St., Keyser hasn't been paying too much attention to the stocks he owns. Keyser checked out the account today, and his jaw dropped in astonishment.

Guess who's added another 250 shares of Citigroup to the 205 that he already owns? Well, smack Keyser's ass and call him a jackal! Only difference being that whereas Keyser paid $40 a piece for the old ones, the new ones were acquired for the princely sum of $4.17 yesterday. Quite a difference a few years and a few hundred billion dollars in subprime loans make, huh?

Presumably, the boys in Chicago think things are on the way up. Keyser's not so sure, but now he's made a bet on the up side. The stuff's already sunk to $3.97. Great going.

Updates as warranted...

Keyser's Got Nothing: If They'd Had the Rest of His Penis Edition

2009-04-15T16:03:00.004-06:00

Sorry, loyal Lair readers, but a) Keyser's busy and b) he's got nothing to talk about right now.

And it seems that the world manages to go about its crazy business without Keyser:

A Polish man was rushed to hospital after his best friend bit off his penis and swallowed it.

Marian Milczarek, 53, had a huge argument with his best friend, about a car trailer he had asked to borrow.

According to Marian, his friend, Wojciech Sowinski, then knocked his to the floor of his garage.

Marian, from Lesna said: "He began hitting me with a chain and then pulled down my trousers and started biting. It was agony."

Marian's wife found him coiled in pain and immediately called an ambulance. Although he was treated neither police or medics could find any trace of his penis and believe Wojciech swallowed it.

Dr Adam Domanasiewicz from the hospital where Marian is being treated said: "If we'd had the other bit of his penis we could have sewn it back on."

So if you have a Polish friend, whatever you do, don't ask to borrow his car trailer!

What Keyser Has to Put Up With

2009-04-14T19:04:00.004-06:00

No, Keyser doesn't mean the world's most tedious ~~commenter~~ troll Emmoloch, who continues to pile up the most preternaturally lame, obtuse and long comments on this post (due diligence demands the following warning: lasciate ogni speranza voi che entrate; for Emmoloch's benefit, as she appears to be a bit "challenged" when it comes to words of more than two syllables, that's Italian for: "In the name of God, woman, can you make yourself look any more foolish? No, wait! Forget I said that!").

No, what Keyser means is the weather. Here is the scene of horror that greeted Keyser this morning. It's April 14 for pity's sake! The snow's pretty much gone now, but still. Enough already (words that Emmoloch should heed).

That's Lucius at the end, despondent at his ongoing inability to go hunt mice out by the compost bins.

Vixen Verurteilt

2009-04-14T14:26:00.008-06:00

Since the Loonatic Persecutors of erstwhile Lair commenter Vixen don't know German and rely on the biased reporting of some unreliable hack in Austria who happens to write in (bad) English, Keyser decided to check out some Austrian online papers to see what actually happened in court today at Vixen's hearing. (The Community Organizer-in-Chief of the United States is of the opinion that folks there speak "Austrian," but since that language bears a startling resemblance to German, Keyser can read it without too much trouble, though sometimes he isn't conversant with the legalisms and psychobabble.)

Here's information from a report in the Tiroler Tageszeitung.

Sieben Monate unbedingte Haft und die Einweisung in eine Anstalt für abnorme Rechtsbrecher. So lautet das Urteil im Prozess gegen eine 41-jährige Tirolerin, die den Serien-Star David Caruso bedrohte.

Die Frau hat dem Darsteller rund 120 Briefe geschrieben. "Ich wollte nur ein Autogramm. Mehr wollte ich wirklich nicht", beteuerte die Angeklagte.

Nachdem sie keine Antwort auf ihr Schreiben erhielt, schrieb sie dem Darsteller eine Morddrohung mit folgenden Worten: "I'm going to kill you and your ugly latina whore. It'll take some time - but i'll find you ... maybe i should start with you daughter."

Seven months unconditional confinement and commitment to an institution for the abnormal criminals. That the sentence in the proceedings against a 41-year-old Tyrolean woman who threatened series star David Caruso.

The woman wrote the actor about 120 letters. "All I wanted was an autograph. I didn't actually want anything more," declared the accused.

After receiving no answer to her letters, she wrote the actor a death threat in the following words: "..."

After a bit more detail about her flight and arrest, we get this:

Gutachterin Karin Treichl attestierte der 41-Jährigen eine kombinierte Persönlichkeitsstörung. Bei der Frau liege eine seelische Abartigkeit schweren Grades mit stark narzisstischen und dissozialen Merkmalen vor. Mit ihrer Umgebung sei sie teilweise "manipulativ umgegangen und habe einen parasitären Lebensstil" gepflegt. Außerdem bagatellisiere sie ihre Taten und die Vorfälle in der Vergangenheit. "Nach wie vor ist zu befürchten, dass sie weitere Straftaten insbesondere das Delikt der gefährlichen Drohung begeht", erklärte Treichl. Jeder, über den sie Informationen erhält - sei es aus ihrem Umfeld oder aus den Medien -, könnte ein potenzielles Opfer sein.

Expert Karin Treichl attested to a combined personality disorder in the 41-year-old. The woman suffers from a mental deviance of a severe degree with strongly narcissistic and anti-social [so?] traits. She "partly treated those in her surroundings in a manipulative way and practiced a parasitical life style." [ed: what's that supposed to mean and when did that become a crime?] In any event, according to the expert, she trivialized her deeds and incidents in the past. "Now as ever, it is to be feared that she will commit further misdeeds, especially the offense of making dangerous threats," explained Treichl. Everyone about whom he receives information - whether from her surroundings or from the media - could be a potential victim. [ed: surely everyone at all is a potential victim]

Here's the justification for the sentence:

"Sie haben Caruso in einem Brief mit dem Tod bedroht und ihn dadurch in Furcht versetzt", sagte Richter Günther Böhler. Mildernd sei die geringe Dispositionsfähigkeit und das Geständnis, den Brief verfasst zu haben. Erschwerende sei hingegen die Flucht nach Mexiko und das Fortführen der Angriffe im Internet gewesen. Die Einweisung sei dadurch gerechtfertigt, dass ohne eine längerfristige Psychotherapie weitere Straftaten zu erwarten seien.

"You have threatened Caruso with death in a letter and thereby placed him in fear," said Judge Günther Böhler. He said that mitigating factors were her diminished capacity and her confession that she composed the letter. On the other hand, aggravating circumstances were the flight to Mexico and the continuation of attacks on the internet. The commitment was, he said, justified by the fact that further misdeeds were to be expected without long-term psychotherapy.

The hack that the Loons rely on interprets the sentence along these lines: "[she is to be] relocated to an institution for mentally deranged delinquents after having served her sentence." That's not how Keyser interprets the words here. The opening of the Tiroler Tageszeitung article is ambiguous, but surely the sense is that the confinement will take the form of commitment to a mental institution. First off, Einweisung doesn't mean "relocation," as this guy implies, but "allocation." That is, it simply refers to the institutionalization, not to a shift in location. In any event, what enlightened justice system would sentence someone who's mentally unbalanced to seven months regular incarceration and then move them to a mental institution after their sentence is finished? If the accused is so unbalanced as to need compulsory mental treatment, they can't be held legally responsible (as is implied by mindere Dispositionsfähigkeit "diminished capacity"), and how could anyone expect someone that troubled to be improved by regular incarceration? Until it's demonstrably proven otherwise, Keyser prefers to think that this hack is an idiot rather than the judge.

One final point. The article here calls the sentence "unconditional" (unbedingt), whereas another one Keyser saw called it the exact opposite (bedingt). Not sure what "conditional" means in terms of the Austrian legal system. Given the rest of the circumstances, Keyser's inclined to think that it means she has to stay in the mental institution for the full seven months, but that's just a guess.

When you think about it, how much trouble would everyone have been spared if that asshole Caruso had simply sent an infatuated fan a fucking autograph? What a jerk.

Anyway, Keyser wishes Vixen the best. (And as for you Caruso fans who lurk on the Lair, why don't you just go fuck off and dream the impossible dream of giving your idol a blow job? Keyser's sick and tired of you.)

[Post Scriptum. To gauge by the latest AP report, Keyser's interpretation was right: "An Austrian court has convicted a woman of threatening "CSI: Miami" star David Caruso and sentenced her to seven months in jail in a secure psychiatric unit, officials said Wednesday." Note, however, that whoever wrote this is a bit confused about converting German terminology to English. If the German quoted above is an accurate indication of the legal terminology, what generated "jail" in the English is Haft, which properly speaking is simply "confinement" rather than the punitive-sounding "jail."

So basically, Vixen is being compulsorily confined to a mental institution intended for the treatment of those who commit criminal acts but are mentally unbalanced. Keyser sometimes is a bit dubious about European sensibilities, but this attitude is certainly better than the US madness of actually executing criminals who are clearly insane. In any event, for the Karuso Krazies who want Vixen punished, your wish in this regard has gone as unrequited as your fantasies about fellating Horatio Kane.]

Berny Bernanke: Idiot for All Seasons

2009-04-14T13:00:00.005-06:00

So, it's big news that Bernard Bernanke, double agent for Goldman Sachs and figurehead of their wholly owned subsidiary, the Federal Reserve system says that the unicorns are about to start shitting rainbows all over Main St. American any minute now.

U.S. Federal Reserve Chairman Ben Bernanke said on Tuesday the latest figures on housing and consumer spending suggest a rapid contraction in the economy could be easing.

"Recently we have seen tentative signs that the sharp decline in economic activity may be slowing, for example, in data on home sales, homebuilding and consumer spending, including sales of new motor vehicles," Bernanke said in remarks prepared for delivery at Morehouse College in Atlanta.

This fits in with a more specific prediction made last month on national television:

Bernanke, in a rare interview with CBS programme “60 minutes”, largely upheld the Fed’s view that there was a reasonable prospect the recession that took hold in December 2007 would end this year and that 2010 would be a year of recovery.

“We’ll see the recession coming to an end probably this year,” Bernanke said.

“We’ll see recovery beginning next year.”

Okay, if one is to assess the prognostications of a supposed expert, it would behoove us to check the success of past forecasts against the actual result, would it not. Here's Berny talking before Congress on October 27, 2005 at the time of his appointment as ~~Goldman Sachs' points man~~ chairman of the Federal Reserve:

Ben S. Bernanke does not think the national housing boom is a bubble that is about to burst, he indicated to Congress last week, just a few days before President Bush nominated him to become the next chairman of the Federal Reserve.

U.S. house prices have risen by nearly 25 percent over the past two years, noted Bernanke, currently chairman of the president's Council of Economic Advisers, in testimony to Congress's Joint Economic Committee. But these increases, he said, "largely reflect strong economic fundamentals," such as strong growth in jobs, incomes and the number of new households.

Bernanke's thinking on the housing market did not attract much attention before Bush tapped him for the Fed job Monday but will likely be among the key topics explored by members of the Senate Banking Committee during upcoming hearings on his nomination.

Many economists argue that house prices have risen too far too fast in many markets, forming a bubble that could rapidly collapse and trigger an economic downturn, as overinflated stock prices did at the turn of the century. Some analysts have warned that even a flattening of house prices might cause a slump -- posing the first serious challenge to whoever succeeds Fed Chairman Alan Greenspan after he steps down Jan. 31.

Bernanke's testimony suggests that he does not share such concerns, and that he believes the economy could weather a housing slowdown.

"House prices are unlikely to continue rising at current rates," said Bernanke, who served on the Fed board from 2002 until June. However, he added, "a moderate cooling in the housing market, should one occur, would not be inconsistent with the economy continuing to grow at or near its potential next year."

"Should one occur," huh?

Here's a guy who's at the front of the crowd on Fifth Avenue watching the Macy's Thanksgiving Parade, and he solemnly intones: "I don't see no stinking balloons." It's clear from the article that there was a sense that housing prices were already spiraling out of control a good two years before the disastrous burst of the bubble started in mid 2007. But did Bernie see it? Of course not. Reining the bubble in would not have been in the interest of Goldman Sachs, AIG, Fannie Mae, CItigroup and the other Jackals he serves. We've got two choices. Either he's a complete idiot or a lying sack of shit. Take your pick and judge his prognosis accordingly.

And Keyser's supposed to get all giddy because this buffoon thinks everything's hunky dory? Uh, no.

Given this clown's history, you'd be better off checking the entrails of the first banker you can lay your hands on. The predictions of the haruspices are at least as reliable as Bernanke's.

The Greenwich Meridian Is In the Fold

2009-04-14T12:23:00.003-06:00

Keyser hates it when they don't put a break in the middle of a map that's spread across two pages, so some of the information disappears down the crack if the binding is tight.

Ergonometrics: Optimal Stroke Speed Edition

2009-04-13T21:06:00.005-06:00

Back in the nineteenth century, they had a charming faith in the ability of human reason to solve the world's problems. This was, of course, before the Soviet Union and movies like Frankenstein showed the dangers of trying to coerce the world into being a better place.

One of the leading lights of the pre-Bolshevik version of letting pinheads excogitate for us a brave new world was Harvard grad and all-round charlatan Frederick Winslow Taylor. He claimed to be able to determine with scientific precision the most efficient way to carry out any task, including the optimal length of time to do it. Not surprisingly, that pinhead-di-tutti-pinheads and enthusiastic murderer for the greater good of mankind, Vladimir Ulyanov (better known by the WWF name "Lenin the Kulak Krusher") was a keen follower of Taylor's theories (though typically the Soviet Union couldn't actually manage to put its theories ino practice).

This foolishness is known as "ergonometrics" (also known by the less threatening sounding "work measurement"). Of course, the very notion that there was a single way to do a given task that was applicable to every single worker, regardless of differences of size, strength etc. is such self-evident foolishness that it's wonder that anyone could have believe such nonsense (though of course Marxism and synthetic derivates show that the propensity for self-delusion in the human race is virtually boundless). Regardless of the theoretical qualms, Taylor just made his "statistics" up, so it was all a lot of horseshit.

Anyway, this drive to find out the "right way to do it" seems to continue apace:

A team, including scientists from the Unilever company, have identified a class of nerve fibres in the skin which specifically send pleasure messages.

And people had to be stroked at a certain speed - 4-5cm per second - to activate the pleasure sensation.

This research, which also involved experts at the University of Gothenburg in Sweden and at the University of North Carolina, recorded nerve responses in 20 people.

They then tested how people responded to having their forearm skin stroked at a range of different speeds.

They identified "C-tactile" nerve fibres as those stimulated when people said a touch had been pleasant.

If the stroke was faster or slower than the optimum speed, the touch was not pleasurable and the nerve fibres were not activated.

The scientists also discovered that the C-tactile nerve fibres are only present on hairy skin, and are not found on the hand.

So, if Keyser gets this right, you've got to stroke people on the arm at exactly the right speed, no more, no less (4-5 cm per second) to get them to feel pleasure.

Keyser's not entirely sure how to interpret the last bit. The stroke speed scientists claim that these "c-tactile nerve fibres" appear only on hairy skin, and seemingly contrast this with the hand. Does that mean that the only other place they only checked for these c-things is the hand and came up empty (so to speak)? And what happens if you wind up with hair on your palms? Does that mean you get c-fibres there too?

And let's face facts. If you're interested in finding out the optimal "stroke speed" for making the pleasure nerves start firing, surely the arm is not the first appendage to come to mind, is it? You think these Swedes made any tests to see if 4-5 cps was enough to get the old Wankel engine spinning properly? It should be obvious that if the frig speed is too slow, you'll never get it "on," whereas an excessive piston speed will outstrip the capacity of the available lubricant and result in (very unpleasant) fusion of the engine block, so perhaps there is a scientifically determinable efficiency rate of stroke.

Apparently, Frederick W. wasn't a jerk off after all. Or perhaps he was, and had the exact statistics for the most efficient way to grease the sprocket.

Brings a whole new meaning to the phase "mental masturbation," doesn't it?

Borrowing From Yourself: FRB Edition

2009-04-13T16:30:00.004-06:00

Maybe Keyser's missing something here, but this sounds like lunacy to him:

Treasuries rose after the Federal Reserve completed the first of three buybacks of government debt slated for this week in an effort to lower borrowing costs and revive the world’s largest economy.

Yields on 10-year notes fell the most since March 18, when policy makers announced the $300 billion program, as the central bank bought $7.37 billion in two- and three-year securities. The Fed has acquired $43.9 billion of Treasuries since beginning the purchases on March 25.

“The U.S. government is the 800-pound gorilla in the bond market,” Andrew Brenner, co-head of structured products and emerging markets in New York at MF Global Inc., the world’s largest broker of exchange-traded futures and options contracts, wrote in a note to clients. “Bond markets acted in accordance with the liquidity provided and traded up.”

The yield on the 10-year note fell seven basis points, or 0.07 percentage point, to 2.86 percent at 4:47 p.m. in New York, according to BGCantor Market Data. The price of the 2.75 percent security due February 2019 rose 18/32, or $5.63 per $1,000 face amount, to 99 2/32.

Ten-year yields have traded in a range between 2.45 percent and 3.05 percent since late January as concerns about record Treasury supply were offset by the Fed’s purchase program.

If 10-year yields rise above 3.05 percent, “the Fed will step up its purchase operations, so we look for good support below the market,” said Martin Mitchell, head of government bond trading at the Baltimore unit of Stifel Nicolaus & Co. “On the other hand, the price action will continue to struggle under the weight of the supply.”

The U.S. needs to borrow $3.25 trillion this fiscal year, according to Goldman Sachs Group Inc. President Barack Obama is asking Congress to approve a $3.55 trillion budget for 2010. The nonpartisan Congressional Budget Office estimated the deficit at $1.38 trillion, higher than the White House’s $1.17 trillion projection.

First, let's get the general scheme straight first. A bond is a financial instrument that basically pays a fixed rate of return until the face value of the bond is paid to the owner at some fixed date in the future. A bond's face value is discounted because it is paid off in the future, though if the likelihood of the bond being paid off is pretty secure (as with US treasury bonds), then it tends to stay close to face value (the investor being rewarded only with the interest paid by the bond in the interim). Since the payment rate is fixed (so much percent of face value per annum), then the "yield" (how well it's paid) is determined by dividing the fixed amount of return by the current market value of the bond. Therefore, the more the bond is worth, the lower the yield.

So what is going on here? As the story says, Bernanke wants to lower the yield on US treasury bonds. Why? Because the yield of such bonds (which are supposedly golden since they're based on the credit worthiness of the US government) is the benchmark against which other forms of credit are based. Therefore, lowering the yield of US treasuries is a way of reducing the overall cost of credit throughout the economy. As a student of the Depression, Bernanke is of the opinion that it was a dearth of credit that made things so bad in the early '30s, and he'll be damned if he'll let that happen. We've pointed out here on the Lair before that the attempt to cure the affects of the collapse of a speculative bubble by reinflating that bubble is both doomed to failure and counterproductive. We've recently learned about how the Austrian school of economics blames not just such bubbles but also business downturns (the so-called business cycle) on artificially low interests rates brought about by central banks, such low rates serving as incentives for "malinvestment" in capital projects. Clearly, Benny doesn't buy that interpretation, as he's going about doing exactly the opposite of what the Austrians would advise.

Anyway, it's obvious that the policy adopted involves driving up the price of treasury by having the Federal Reserve System become a (very) active participant in the bond market. The article says that they plan on buying up $300 billion worth of the things, and since just the end of March have already bought $44 billion. Seemingly, this hasn't made much of a dent in yields, though it is driving up the "balance sheet" of the Fed.

But what exactly is this "balance sheet"? Well, it consists of a lot of US treasury bonds certainly. But what exactly has Bernie used to buy these things with. If you or Keyser wanted a shiny new $1000 treasury bond, we'd have to pony $1000 (or thereabouts) of our hard-earned money. Which in turn would mean that we had $1000 less to spend on other junk. What about Bernie? Well, he basically gives the US treasury (or the bond market) billions of "dollars." But what purchase is he forgoring in this transaction? Nothing, of course, because he just makes up the money, whether directly in the form of the bank notes that are printed at his behest or by simply adding a whole lot of zeros at the end of an account with the US treasury's name on it.

"Money" is simply a claim on productive value (what you can persuade someone else to give you in return for your money), and the money you gave for your bond means you have that much less to spend. Benny's money, on the other hand, is a self-created claim on productive without giving anything of his own in return.

It has to be obvious that this can only result in inflation.

Fed Chairman Ben S. Bernanke’s programs may result in a higher cost of living, said Allan Meltzer, the central bank historian and professor of political economy at Carnegie Mellon University in Pittsburgh. Rising costs erode the value of the fixed payments from bonds.

Inflation “will get higher than it was in the 1970s,” Meltzer said. At the end of that decade, consumer prices rose at a year-over-year rate of 13.3 percent.

God almighty, are the financial genii who are in charge of the system criminals or morons? Or both? In the first place, decreasing the yield on treasury bonds will make them less attractive to investors at the very time when the US government needs to borrow $3.25 trillion. That's trillion. So how can such a policy be productive in the long term? It can't. In any event, since a dollar bill is basically a form of IOU, and the Fed, which is just a government mandated entity with special privileges enshrined by Federal law, is basically an arm of the Federal government (yeah, it's about as independent as the FDIC and Fannie Mae), how can one part of the government "lend" money to another? It obviously can't.

If a big chunk of the US debt winds up in the hands of the Federal Reserve system, it's perfectly clear that sooner or later (and probably the former) it's going to spill out into the economy in the form of extra dollars chasing a fixed amount of production value. If Bernie's short term goal is the lower of interest rates to raise up the old price level and (in particular) to restorethe unhealthy and unsustainable price levels of the old bubble, then he's on a fool's errand in immediate terms. But regardless of that, the fact remains that such a policy will in the long term hurt debtors because higher inflation inevitably results in higher interest rates. There's no way to avoid that. And who's the biggest debtor around? Why, the Federal government with its current total debt of $11 trillion and counting (per second!). The US will keep having to roll over its massive debt (meaning as old bonds are retired, you have to persuade someone to lend you more money to maintain the level of debt), and this retarded effort at reviving the economy now through "creating" money is simply a form of "kicking the can down the road," as higher interest payments will be imposed on people in the future.

Of course, there is one way that inflation benefits debtors. If inflation is high and no new debt is incurred, then the debtor gets to fuck the creditor by paying him the valuable dollars he lent in the past with much-reduced dollars (that is, ones that are "worth" less since the inflated prices mean that a dollar of today entitles its bearer to a lesser claim on production).

But there's not a chance in hell that the US won't go on with its massively irresponsible binge of buying on credit, thereby increasing US indebtedness. The upshot down the road is that there will have to be a massive cutback in US government expenditures (just when the retirement of the baby-boom generation will be driving the Social Security system to insolvency), or there will be a massive breakdown in the value of the US dollar. Or both.

This does not look pretty at all. It seems that in Washington they must be monumentally obtuse or suicidal. Or is it both?

Doing It Au Naturel: Sky Diving Edition

2009-04-13T16:25:00.001-06:00

You can't say you weren't warned...

Truth Will Out: Financial Edition

2009-04-13T14:14:00.003-06:00

Even as the Federal government, in its ongoing effort to conceal the fraud its committing in bailing out the greedy swine on Wall St. by pretending to be a "careful guardian" of the public purse, is going through the motions of putting the big banks to a faux "stress test" to demonstrate how sound the financial system is (despite the huge and unaccounted losses suffered through the absurdities of lending huge amounts of money to people who could never be expected to pay it back in expectation that housing prices will go up forever and compounding the idiocy with their "credit default swaps" and "derivative securities," there's one thing that they should bear in mind.

The truth will out in the end, whether you want it to or not. Concealing things doesn't make them go away.

Federal "Stress Test": Not Too Stressful Edition

2009-04-13T13:02:00.003-06:00

Since there has been occasional talk here about the big "stress test" that the Feds are supposedly subjecting the banks to, here's a bit of analysis about how useful these are going to be:

But if you look at the actual data today macro data for Q1 on the three variables used in the stress tests – growth rate, unemployment rate, and home price depreciation – are already worse than those in FDIC baseline scenario for 2009 AND even worse than those for the more adverse stressed scenario for 2009. Thus, the stress test results are meaningless as actual data are already running worse than the worst case scenario.

The FDIC and Treasury used assumptions for the macro variables in 2009 and 2010 both the baseline and more adverse scenarios that are so optimistic that actual data for 2009 are already worse than the adverse scenario. And for some crucial variables such as the unemployment rate – that is key to proper estimates of default rates and recovery rates (given default) for residential mortgages, commercial mortgages, credit cards, auto loans, student loans and other banks loans – current trend show that by the end of 2009 the unemployment rate will be higher than the average unemployment rate assumed in the more adverse scenario for 2010, not for 2009! In other terms, the results of the stress test – even before they are published – are not worth the paper they are written on as they make assumptions on the economy that are much more optimistic –even in the worst scenarios that the FDIC has designed - than the actual figures for Q1 of 2009.

Gosh. So the tests are really no sound indicator about the health of the banking system and are seemingly just a bunch of smoke and mirrors designed to fool everyone into thinking that everything is hunky-dory, for the purpose of either kicking the can further down the road or bailing out those unconscionable (and Satanic) fuckers at Goldman Sachs? Imagine that, who'd a thunk.

The analysis above is by Nouriel Roubini, who used to be an advisor to the Treasury in the last Clinton year, and seems to be in a snit for not being asked to join Pres. Barry's Brain Trust, so he's taken to pointing out that the emperor (or president) is wearing no clothes.

Unfortunately, you have to sign up (and, more importantly, pay) to read the whole thing, but fortunately, some other guy lays out Roubini's analysis for us:

I've noted before that the baseline case is no longer useful, and that the more adverse case is the new baseline. Roubini is taking this a step further and saying the more more adverse is also meaningless. I think this is premature - although I agree with Roubini that there is no real stress test.

So, this guy agrees that the so-called "stress test" is nothing of the kind, but thinks that Roubini's assumption that the worse case scenario is actually the baseline is premature. Not wrong, just premature. Click the link if you want the full story.

What struck Keyser was this quote from Bloomberg that the second guy has:

“The bottom line is if the unemployment rate peaks at 10 percent these banks can make it through,” FBR’s Miller [an analyst at FBR Capital Markets in Arlington, Virginia] said. “But if it peaks closer to 12 percent, nobody makes it. Or very few people make it.”

Who knew 2% could make such a difference? Hold onto you hats as the news comes in...

Something You Don't See Here in Iglooland

2009-04-13T11:02:00.003-06:00

Goldman Sachs: The Investment House of Satan

2009-04-13T09:28:00.003-06:00

While Keyser believes that a special seat in hell (a hot one) is reserved for the fuckers at AIG (Grs), it would appear that the real puppet master in all this was the "investment" firm of Goldman Sachs. In the midst of the bubble they had the perspicacity to get an ex-CEO appointed by that cretin Bush, so when the shit inevitably hit the fan, that lying fraud-master Henry "I am here to do they bidding, my master" Paulson could dupe the Congress into giving him $700 billion dollars under entirely false pretenses to "bailout" - Goldman Sachs! Since they replaced America's first socialist president with America's first Community-Organizer-in-Chief, the cabal at GS has decided to be a bit more subtle. Instead of having their CEO Kenny Blankenship take over the helm at the Treasury Department (a wholly owned subsidiary of Goldman Sachs), they snuck another one of their stooges in the form of Timmy "Duh, Tell Me 'Bout dah Rabbits, George, Uh, Tell Me 'Bout dah Rabbits" Geithner. Geither, of course, was their man over at the Federal Reserve Bank of New York, who the height of the speculative excesses and criminal irresponsibility on the Street had done a bang-up job ~~maintaining the integrity of the financial system~~ doing absolutely nothing to rein in the fraud. Seemingly, the success at selling the TARP bullshit back in the fall had so dulled the sensibilities of the general public that the argument that a man too stupid to figure out whether to push "yes" or "no" on a TurboTax program was indispensable to saving the banking system.

And if the sole goal of "saving the financial system" is keeping the scum at Goldman Sachs from having to foot the bill for their crimes, they're probably right about Timmy's "indispensability." After all, Timmy's been kept busy with the menial task of hauling staggering sums of money in the front door of AIG (Grs), so it can go out the backdoor in unmarked trucks that wind up at Goldman Sachs. (Truth be told, Timmy's kind of glad that the boys at Goldman Sachs take the money away themselves. You ever tried moving a hundred billion dollars in a wheelbarrow? Timmy's arms were killing him after the third time he did that!) Indeed, we all know that AIG is really a zombie that's been kept "alive" so that it can continue to bring back a feast of fresh meat torn from the flesh of treasury to its voodoo master, GS.

So, there's some retired investment advisor in Flordia who's onto the truth about Goldman Sachs and started a website to spread the "Bad Word." His point of view is pretty clearly indicated in the URL: "goldmansachs666.com." Takes a lot of balls to point out that America's premier ~~organized crime family~~ ~~investment bank~~ commercial bank (as they have become to become eligible to ~~steal~~ borrow from the US Treasury [a wholly owned subsidiary of Goldman Sachs]) is in fact a front for the Prince of Darkness.

Well, it appears that the PoD isn't too keen when his evil machinations are brought to the light of day.

The bank has instructed Wall Street law firm Chadbourne & Parke to pursue blogger Mike Morgan, warning him in a recent cease-and-desist letter that he may face legal action if he does not close down his website.

Florida-based Mr Morgan began a blog entitled "Facts about Goldman Sachs" – the web address for which is goldmansachs666.com – just a few weeks ago.

In that time Mr Morgan, a registered investment adviser, has added a number of posts to the site, including one entitled "Does Goldman Sachs run the world?". However, many of the posts relate to other Wall Street firms and issues.

According to Chadbourne & Parke's letter, dated April 8, the bank is rattled because the site "violates several of Goldman Sachs' intellectual property rights" and also "implies a relationship" with the bank itself.

Unsurprisingly for a man who has conjoined the bank's name with the Number of the Beast – although he jokingly points out that 666 was also the S&P500's bear-market bottom – Mr Morgan is unlikely to go down without a fight.

Keyser thinks that GS has made a major tactical mistake here. They claim that the website violates their "technical property rights" and "implies a special relationship with them." Presumably, those property rights being violated refers to this guy revealing how they're plundering the US treasury, and as for "a special relationship" with the bank, well, doesn't that ipso facto mean that they admit that they are in fact a front for Satan? After all, why else would you associate a site whose URL includes the "number of the beast" with Beelzebub unless the CEO of GS had horns and talons, sulfurous breath, and an unnerving habit of sodomizing virgins during conference calls?

So, our prayers go out to Mr. Morgan in his tilting at Satanic windmills. But given how long the ~~the blazing pits of hell~~ the firm of Goldman Sachs has weathered such ~~exorcisms~~ attacks on its integrity, Keyser's inclined to imagine that GS will go on ~~raping the general public through its fraudulent schemes~~ perpetuating and perpetrating its unscrupulous business practices through its ~~self-serving control of the political system~~ savvy ways of dealing with Washington.

h/t to esteemed Lair reader and avenger of wrong Dr. Anton Phibes

Life Imitates Art

2009-04-12T19:22:00.000-06:00

Herons Take Keyser's Breath Away

2009-04-12T19:01:00.006-06:00

Keyser's meant to put up these images for a few days, and got distracted. The recent unpleasantness brought here by the Vixen haters is a suitable occasion for washing away that ugliness with something beautiful.

The following images come from a guy called land.nick on Flickr. Apparently, he's an architect in Brazil. He's got many hundreds of images there, and since herons were prominent, Keyser typed in "heron" on the search feature and found that the guy has 360 images just of them. So hard to choose from! Keyser has his virtues no doubt, but these run more to the analytical, and Keyser has such admiration for those with real artistic talent. Kudos to you, land.nick! And if there were a God, he should be very pleased with his creation of herons.

"Christ, It's Hard to Walk in These Things"

2009-04-12T18:42:00.003-06:00

Sometimes a Banana with a Strawberry and Milk

2009-04-12T16:27:00.003-06:00

...is just a banana with a strawberry and milk.

Sometimes not.

Hey, Don't Turn Away!

2009-04-12T14:27:00.005-06:00

Great photo by Czech photographer Silvie Valouskova. Keyser likes all the different contours. On the photographer's second page you can find a lot of different shots from the same session, some color, some b/w. It's intersting to compare the different effects.

What Went Wrong: Austrian Version

2009-04-12T11:48:00.004-06:00

As noted a while ago, Keyser's been flipping through Meltdown: A Free-Market Look at What Went Wrong etc., etc.. It's been a bit slow going, as Keyser has work to (the readings been doing on during morning exercises). Since today is Resurrection Day, it seemed appropriate to note something that Keyser found interesting (re reviving the economy).

A lot of the book reflects the general line here, namely that you can't buy your way back to prosperity, and that government action in bailing out failed companies will simply cause the ultimate cost to be greater and is a drag on the functioning part of the economy. But the bit that came as news to Keyser was the elaborate description of the "Austrian school's" take on the business cycle. Since the Trillion Dollar Bore blames everything on "Chicago-School" economics, it seems only fair to give another school a try.

When Keyser was growing up, there would be repeated "recessions," which were said to be a "normal" part of the business cycle. Supposedly, the economy had a natural tendency to expand too far, and a recession was a way of sorting this out. Not so, according to our Austrians (Ludwig von Mises and F.A. Hayek). The cause is government interference with interest rates.

Basically, money is a "good" like any other commodity in the market. If you want to "acquire" someone else's money for your own use, instead of buying it the way you would with a regular item, you borrow it, the interest being the "price" of using someone else's money. This amount of this interest should be determined by the regular market forces: supply and demand. If companies want to borrow more money, they have to offer higher interest, and if more people choose to save, this lowers interest.

So how does this relationship affect businesses? Capital investment depends on the ability to borrow, and interest rates allow the market to bring such investment in line with demand. If people prefer to spend rather than save, this indicates that there aren't so many resources available for capital investment, which is reduced through higher interest rates. If, on the other hand, people save a lot, this indicates a willingness to defer consumption in favor of long-term accumulation of wealth, which is passed along to business in the form of lower borrowing rates.

But interest rates aren't set by the market. Instead, central banks manipulate the rate in the effort of "regulating" the economy. In the old days, this meant "free credit" at times of economic downturn, and tightened credit at moments of supposedly excessive expansion. But according to our Austrian friends, it is precisely the manipulation of interest rates that causes the business cycle in the first place.

Business is encouraged/discouraged to make investments through interest rates, but artificially low rates set by the central bank give an erroneous message about available resources. In effect, such rates suggest that there is a larger pool of actual wealth (as opposed to money, which is merely a claim on wealth) that can be used for capital purposes. This misdirection of activity is called "malinvestment." There is an extended analogy to illustrate the effects this in the form of a house builder.

Let's say someone's building a house, and the main material for this is bricks. If you misinform him about the number of bricks available, he'll plan a bigger house than is justified. Eventually, reality will rear its nasty head, and at that point the house-builder realizes that he's screwed. Since he now understands that his original intent can't be brought to fruition, the builder tears down parts of the unfinished house to complete the project in line with the available resources. The more he's been misled, the greater the destruction necessary to redirect the bricks to the rest of the project that can completed. Note in particular that in light of overly optimist initial estimate of bricks, the whole design of the house would be mis-shaped. That is, it may not be possible simply to drop out the plan for adding one specific room, and instead the overall layout of the whole house needs reconfiguration. This destructive process if, of course, the recession, which was brought about by the effect of artificially low interest rates (the report of the supply of bricks) causing the builder to imagine that a grander house was to be built than a realistic estimate of the resources would have justified.

So, once the shortage of bricks is realized, what do the central bankers (and other policy makers) do? Naturally, they want to lower interest rates again, which is of course what started the whole mess in the first place. And they also bailout insolvent companies and "create" jobs out of thin air (the so-called stimulus. But of course the government has no funds of its own to "spend" and instead reallocates already existing funds via taxation or borrowing (which of course diverts present investment by taking funds that would otherwise be available to the economy and/or by stealing from future generations, who have to repay the principle or continue to pay interest).

The standard image for this process of reallocation is to imagine that someone can cause the water level in a pool to rise by drawing a bucket from one end and pouring it in the other. But let's stick with the house building image. The government pulls bricks out of the completed front end of the house in order to allow the unfinished projects at the back to go on, even though this weakens the front end and doesn't do anything to make good the overall shortage of bricks for the whole project. Japan spent mind-boggling sums in the '90s to prevent the demise of businesses that were insolvent or unsustainable because of the speculative bubble of the '80s, and all they achieved with this binge was a huge ballooning of the public debt. Guess which policy they're planning on following in Washington?

As Keyser noted, the Trillion Dollar Bore laid a lot of blame around without explaining any causality. The Austrian school not only has an internal logic, but it has the ability to explain something that's always puzzled Keyser. The Great Depression is always said to have started by the collapse of the stock market bubble in October 1929, but Keyser's never understood why that event should have triggered a general business collapse throughout the rest of the economy. After all, if the increases in stock values were "paper" increases, then what difference does it take away "paper" value. That is, if the increases were notional in the first place, what's the harm of notionally erasing them. Similarly, how did the fall of stock values last year cause the overall drop in business activity?

The answer is that in neither case did the bursting of the speculative bubble cause the business downturn. Instead, they're both similar but independent reflections of the same cause, namely artificially low interest rates. When money is readily available, there is no particular determination of what people do with it. One thing they do is expand business through capital investment. The Austrian school claims to explain two peculiarities of the purported business cycle. First, even if we grant that businesses have a natural tendency to overexpand, why do so many fail at once? The answer is that they have been encouraged by low interest rates to engage in excessive capital expansion at the same time by a single cause, namely the low interest rates. It's the artificial introduction of excess money at the same time that eventually leads to the simultaneous failure of so many businesses. Second, downturns supposedly affect capital intensive sectors of the economy most, and direct consumer services least, again an effect of the "malinvestment" caused by low interest rates. (Keyser has no way of knowing if this part of the story is true.)

So, the next time Paul Krugman or Timmy Geithner talk about stimulus packages or bailouts, you'll know why they're ten bricks short of a load.

Happy Easter to Everyone!

2009-04-12T10:12:00.007-06:00

Crucifixus etiam pro nobis sub Pontio Pilato, passus et sepultus est. Et resurrexit tertia die secundum scripturas et ascendit in caelum: sedet ad dexteram patris.

May today's egg hunt yield you exactly the sort of tasty morsels that set your salivary glands a-watering!

U Been Reading Keyser?

2009-04-11T17:27:00.018-06:00

You know, Keyser's a busy person, and when he considered the idea of whether to put up a post in the style of the esteemed David Caruso slagger Vixen, pretty much for the sole purpose of pissing off the humorless old hags that persecuted her, he thought it might become a bit of a distraction. We got one tedious commenter on the post (that girl of mystery Emma of Homewood Illinois), and Keyser saw that some of his "guests" were coming to the Lair from the great practitioner of Jungian psycho-analysis Dr. Dodo. Keyser again wondered whether it would be worth the effort to wander over there.

Oh, indeed, it was! Comedy gold of the highest order. Keyser was laughing to the point of tears. Apart from the hilarious photo above (a bit lame since the same photo was used by Dr. Dodo before, but the text is very amusing in its retarded formulation), we get this:

Without missing a beat, eh, Keyser?

Several of our readers have commented they were thankful Heidemarie Schnitzer, David Caruso's psychotic stalker currently awaiting sentencing in Innsbruck, isn't online to make a federal case for Liza Marquez and her limelight-seeking attorney, Debra Opri.

Never fear. Her replacement, that pseudo-intellectual, Keyser Soze, is doing an outstanding job..........................

Remember several months back, when we brashly referred to Keyser's ramblings as mindless drivel, later retracting it (in a manner of speaking)? As is usually the case, the first impression was evidently the most acccurate. No reversion necessary.

An excellent example why these despicable sites, now abandoned but still accessible, should be permanently deleted.

Where to begin, where to begin? "Pseudo-intellectual." Ouch. Coming from one of the towering intellects of the modern world, that really hurts. Oh, wait a minute. That was just some old hag who's mad that VIxen beat her to the punch (as it were) in offering to blow David Caruso, so her disparagements of Keyser's intellectual activities are of no concern to Keyser. (For the record, Keyser prefers "bien-pensant, and for the semi-literates who come over here from "Dodo Babbles," or whatever her site is called, that means "Keyser's smarter than you" in French.)

Okay, let's start with a little English lesson for those who choose to characterize others as being "pseudo-intellectuals." First, Dr. D means "rashly," not "brashly." In any event, if (by her own reckoning) she was correct in characterizing Keyser's "ramblings as mindless drivel," as she claims to have eventually realized, then what was rash/brash in saying so in the first place? Second, she has so far given not the least indiction of any posting on the Lair that could be considered rambling, much less drivel. Those are merely emotive words. If she can back up what she says, then let her do so. Otherwise, she should shut the fuck up. And how you can you retract something "in a manner of speaking"? You either retract it or you don't. Anyway, she now claims to have changed changing her mind, and so "no reversion necessary." Apparently, multi-syllable words should be kept out of the hands of those unqualified to use them (such people could harm themselves). "Reversion" means "going back." Since she changed her mind twice, perhaps no reversion is necessary, but God knows to what. It's clear enough that this "pseudo-English speaking" bloggeress actually meant "revision." (Say, do they have a Special Olympics for Blogging? Maybe one of your other Karuso Krazies reading this could enter the Good Doktor in the category "Best Attempt at Blogging by the Developmentally Challenged").

And what is the conclusion that this Special Olympiette reaches? That Vixen's blogs should be deleted. What has that got to do with anything? Keyser hardly needed to see the blogs to remember how Vixen would have handled the material (though of course the Good Doctoress may be erroneously judging Keyser by her own limited abilities). On the other hand, Keyser has realized how tedious it is to replicate her habit of changing font all the time. But you know what? Dr. Dodo and the other Loon-in-Chief use exactly the same style (compare the multi-color extravaganza up there with Keyser's version of Vixen, or with Vixen's own sites). Maybe there really is a Heidimarie Schnitzer, but Keyser's getting the vibe that this whole Vixen/Dodo/SarahCaine "feud" is just a publicity stunt by the CBS or Jerry Bruckheimer. ("Hey, get a load of this. Those idiots out there actually think this stuff is real!")

Rest assured, people, that Keyser doesn't need Vixen's blogs to slag that Icon of Idiocy or make fun of his Simpleton Sycophants ("Oh, Christ, he's at it again. Where's my fucking dictionary?") But bear in mind that Keyser is not Vixen's "successor." You people got fantasies of sucking off Caruso? Have no fear, Keyser has no intention of elbowing in (as it were) on that fun. But you're so totally humorless and wrapped up in your delusional world of hack adoration that Keyser can't resist the urge to poke you lot in the ribs now and again. If you're dumb enough to take the bait, more the fool you!

And naturally the comments on Dr. Dodo's post don't fail to live up to Keyser's expectations. The first one claims:

The early signs of madness are encroaching. Next Keyser will be telling internet buddies about failed conquests and then wonder why they report it publicly after total madness has descended.

Encroaching on what? Sanity? If you people are what passes for sane in your world, Keyser's sticking to crazy. Sorry, people, you losers have been totally pwned, as the young crowd has it. Every time you react with horror and outrage to what he says, you're just digging yourselves in deeper by proving that you're completely clueless about being mocked. Anyway, what the hell is this woman talking about? To Keyser's knowledge, Vixen never spoke of "failed conquests" (whatever that means - how can it be a conquest if it failed?). Instead, she constantly denied online that she was HMS. Regardless, this may come as a bit of a surprise to the mentally challenged, but making fun of pack of dried-up prunes who only get wet at the thought of a talentless old hack on a poorly written television show is hardly a sign of insanity. Dr. Dodo is, of course, a certified professional, so let her cite the APA guide to blogging for that diagnosis. Oh, sorry, that's "certifiable," not "certified."

Another member (Melissa) of the Karuso Korps chimes in as follows:

What a bunch of mindless babble from Keyser! One would think he would have realized the error of his ways, but I just read his blog and see he's becoming a Heidi clone of sorts. It makes me glad you're still here Dojo, to point to the truth. Lets hope Heidi's sites get shut down soon. It's one thing to discuss what's going on, and have an opinion, quite another to be judge and jury and condemn someone and be vicious about it.

Oh, yes, anyone who reads the Lair would certainly think it mindless babble compared to the pinnacle of intellectual discussion that goes on over at Dr. Dodo's Dimwiteries. And what kind of imbecile would say that Keyser is a "Heidi clone"? In fact, Keyser isn't at all like Vixen, except to the extent that he too likes to make fun of those sour old hags. (To be fair, Melissa's "of sorts" indicates that she realizes that what she says its bullshit, though of course that doesn't stop her from saying it anyway.)

But the last bit is hilarious. Apparently, you can have an opinion and "discuss what's going on," but God forbid you should form a negative opinion and "be judge and jury and condemn someone." Oh, like, um, say, judging and condemning Vixen, you stupid, hypocritical asshole? Jesus, these people are beyond belief. The whole world is supposed to revolve around their condemnation of a seemingly mentally unstable woman that they've never even set eyes on? This will come as a shock to you idiots, but you should realize that you in fact know nothing substantive about this situation that you've decided to get so worked up about. You want to know why Keyser likes mocking you? Because he hates your sanctimonious and self-righteous outrage about something you really don't understand at all. Why don't you lot start worrying about the beams in your own eyes before worrying about the motes in other people's?

Finally, another idiot chimes adds this:

UGH! Keyser's sicker than Heidi!

Judge not that ye be not judged. But since you've decided to judge others, then don't be surprised if Judge Keyser throws the book at you.

And since Dr. Dodo's minions aren't too bright, that book will be a dictionary.

God Damn It, Yahoo, Stop That!

2009-04-11T13:11:00.004-06:00

Keyser gets notified of comments on the Lair via his yahoo email account. The top of the browser window for the account notes the number of unread emails, and Keyser puts it in the "dock" to keep it out of the way. If you check under "window," it helpfully says "(# unread) Yahoo Mail."

Which is very unhelpful if Yahoo automatically signs you out and wants you to reenter your password. Because the stupid heading doesn't change, and as Keyser dutifully checks to see if there are any notifications, he is oblivious to fact that there are, since the stupid thing goes on say "no" when in fact it means "not that I know since you've been signed out."

As it turned out, Keyser has been misinformed since Thursday night and only now called up the window to find out that he was being misinformed and that there in fact eleven unnoticed comments posted on the Lair. Keyser generally responds to comments, so sorry! Keyser was not ignoring you on purpose. (The reason Keyser checked was that he was pretty sure that the recent Vixen-esque post on Icon of Idiocy David Caruso would generate some comment, and he was surprised at there being none. Little did he know! Oh, and while we're on the subject, boy, is it a drag to mimic Vixen's style with all those changes in font she was so fond of. Keyser hopes that the Vixen haters get over it quickly and don't provoke Keyser some more, as he'd really hate to have to slag DC on a regular basis on principle. Keyser has no idea how Vixen could expend so much energy on such an unworthy target.)

So, here's a polite suggestion from Keyser to Yahoo. Stop fucking well signing people out and making it look as if they're still sign in! So aggravating...

Oh, and as for the image, that one turned up during Keyser's Google for an image of "oblivious." Made Keyser laugh (and you can interpret it as you wish!).

The HuffPo: Steer Clear in Case It's Contagious

2009-04-11T12:00:00.004-06:00

Whenever Keyser sees someone who is apparently otherwise sane cite the HuffPo, he invariably urges the person in question to stay away from that place. Nothing good will come of visiting it, and you never knew, the insanity over there may give off some visual miasma that infests those who read it.

Well, Keyser should have taken his own advice. He followed a link to a piece over there written by a notorious leftard television type (sort of a redundant expression), and here's what he got for his rashness:

So there it stands: a naked, pigeon-chested old man, random strands of white hair on its boney shoulders; its swollen-knuckled hands clasped over its dead genitals, looking at once forlorn and menacing, shivering with self-loathing and xenophobia, raging pathetically at its timely and appropriate defeat at the hands of Reason.

Ladies and gentlemen: The Republican Party.

With every passing day, the people who stubbornly, maddeningly cling to an obsolete ideal and who stand in the way of the cultural advancement of this country, this America, spew the base reality of their caustic ideology into the air.

The Republican Party is like a dying tyrant, mad with syphilis, ironically like that very Stalin they would accuse their enemies of associating with. How else to account for their desperation to resurrect the wraith of Joseph McCarthy; the hammy and baffling utterances from high level party officials like Boehner and McConnell; the blatant desire on their part to let the country fail out of sheer resentment; the wanton sedition of Conservative shit-stirrers ranging from the quasi Madame Defarge Michele Bachmann to the porcine, pill-popping porcine propagandist Rush Limbaugh?

It is an all out assault on reason, on progress, on truth. What is the difference between the Republican Party and, say, the Taliban? A rogue by any other name would smell as rank. Their frantic accusations all churned out in a futile effort to explain their current pariah status is as pathetic and draconian as stoning a woman in the street.

Guess this is how leftards interpret the new era of "bipartisanship" unleased by the election of America's first Community-Organizer-in-Chief. How else to account for the hammy and baffling utterances of your opponents indeed. Keyser could easily make fun of the absurdity of this effusion (what the fuck is "swollen-knuckled hands clasping dead genitals" suppose to mean except that whoever wrote that can't piece together a coherent thought, much less make a logical argument?) But dwelling on this sort of thing in detail is exactly the situation in which the miasma might have its deleterious effects on the mental facilities, so it's best not to look too closely.

Even this spewer of incoherent hate grants its "unseemliness," only to excuse this on the grounds that it's justified by the vileness of the foe:

I feel I must apologize for my own particularly febrile anger. It's unseemly and ugly. But finally, the enemy is clearly outlined. We can see it for what it is and what it always has been. It exists not in myth but in a reality which has plagued humanity for millennia: utter, hateful ignorance born from a fear of truth, indeed a fear of life itself; a mad and impotent pursuit of some long-forgotten ecstasy having spawned generations of paranoid power addicts who chase the past at the expense of the future, cloaking their real intentions in perfumed patriotism and the seductive swoon of religion.

Only of course (as is so often the case with leftards' conceptions of the world), this deranged fantacist has everything back to front. The "febrile" picture concocted by his perverted preconceptions and prejudices exists not in reality but in his (and every leftartd's) deluded imagination.

Serves Keyser right for breaking his own injunction. Ever more he'll cleave to words of Byron, who so appositely foresaw the inherent dangers of reading screeds like that:

And all who heard the madness there,
They all should cry, Beware! Beware!
His flashing eyes, his rabid glare!
All show the madman to a tee.
So close your eyes with holy dread,
For he the HuffyPo hath read,
And drunk the bile of Lunacy.

Take Your Kid to Work Day: Executioner Edition

2009-04-10T20:23:00.003-06:00

We've had occasion in the past to speak of the severity of justice in the Islamic world. Well, here are some executioners from Allah's country talking about their jobs on some sort of Arab news show. First we get two from Saudi Arabia, then (after some talking heads) we finish with one from Egypt.

The SA fellows are rather more forthcoming, talking about methods and (heart-warmingly) about how one took his kid to work with him. Nice to know that modern notions of father-son bonding can be applied in any field of work. Talk about the universal nature of the human spirit! And this guy (or maybe it's the other one) also talks a bit about beheading women. Seems they're covered from head to foot, so you have to aim for a little gap at the neck. Nice to know that Islamic justice maintains a proper sense of decorum in these matters!

David Caruso - Bigger Asshole Than Vixen Imagined

2009-04-10T18:31:00.005-06:00

Long time Lair readers doubtless need no reminding, but since you never know what circuitous routes through the interwebz might lead people to wash ashore here, let's recount briefly that Keyser made the acquaintance of reader Vixen because he happened to find her blog Caruso and Me totally by accident when searching for an image once via Google and made a post about it. Keyser found it very amusing that someone should have an entirely blog devoted to slagging hack "emoter" David Caruso, star of the self-parody show CSI Miami: Retirement Home for Bad Actors. Vixen became a frequent commenter here at the Lair, and her on-going feud with a whole posse of menopausal Caruso groupies spilled over into the Lair.

Vixen now finds herself in an Austrian hoosegow awaiting her upcoming trial for stalking. Accordingly, she's in no position to comment on the latest unseemliness coming from Caruso, but no doubt she would have made much hoopla about it if she were able to. In honor of Vixen, we've decided to channel her and report the news as she would. Vixen was always pleasant on the Lair, but her own blog had a heavy dose of bitterness and extreme hostility. Her internet persecutors claim that Vixen offered Caruso a blow job and her hostility came from his rejection of this. How'd they know that is beyond Keyser, and he imagines it's just their projection onto Vixen of their own desire to get on their knees and worship at the altar that is Caruso's crotch. Well, it turns out that one girl who took communion in "both kinds" found out too late that his grace may be amazing, but it isn't eternal.

So here goes a Vixen-style recounting of this sad tale:

We always know that Icon of Idiocy David Caruso couldn't act, but it turns out he can act --like a total asshole. His previous sperm receptacle Liza Marquez has belatedly discovered that he's not just a lousy terrible boyfriend but an awful father too. This must have come as a major surprise to ex-hooker Liza, who was the cause of the break-up of Caruso's third marriage. At least Caruso learned his lesson, not marrying Liza despite knocking her up twice. But Liza found out that she'd gotten a lot less than she'd bargained for:

Lisa Marquez sued Caruso in Los Angeles Superior Court, claiming he reneged on his promise to support her even after their nearly four-year relationship ended. She is seeking $1.2 million, as well as a house from Caruso, with whom she has two children.

In her complaint, Marquez paints Caruso as a possessive, jealous boyfriend who was a reluctant father. The suit claims Caruso, 53, was verbally abusive to Marquez on several occasions and told her that he envisioned himself on a yacht in the French Riviera, not as a father.

Marquez said the actor asked that she terminate her first pregnancy and then referred to her as "a birthing cow" when she started to "lose her shape" during the pregnancy.

She also made claims that Caruso "jilted her" while she was pregnant with their second child, berating and abusing her until she vomited.

Caruso allegedly inflicted a great deal of "emotional distress and psychological trauma" throughout the duration of their relationship, such as telling her that her pregnancy contractions were just a sign of "mental illness."

Marquez's suit states she and Caruso started dating in April 2004 while she was working as a travel coordinator. The couple moved in together later that year, and Marquez claims she quit her job at Caruso's request. The suit states Caruso told Marquez that he would "always be there" to support her financially and in other ways.

Caruso was affectionate and caring in public, but withdrew from Marquez to a second home as the relationship deteriorated, the lawsuit states. She claims Caruso would “among other things seclude himself and watch Seinfeld television reruns, isolating [Marquez] from him."

The lawsuit states Caruso ended their relationship two days after she gave birth to their second child in October 2007. It claims the couple later reached an agreement that that actor would pay Marquez $1 million and $200,000 in attorney's fees, and give her a home in the San Fernando Valley.

Ouch. So he complained that the bitch was getting fat because she had his spawn growing in her belly, and dumped her for reruns of Seinfeld. That's gotta hurt. Almost must as much as becoming the discarded leftovers of a (very) serial monogamist. But she can't say she had no idea, since she was the cause of him dumping wife three, just the way he's now dumped her. David Caruso: Icon of Idiocy with all the loyalty and parental concern of a horny alley cat. But at least her heartache is nothing that a ton of cash can't cure.

Skank, meet asshole. Asshole, meet skank.

source: http://www.foxnews.com/story/0,2933,514029,00.html

Always Dress Your Best, Wherever You Go

2009-04-10T09:42:00.004-06:00

As someone who spends his life among academics, who make a fetish of dressing badly (Keyser still has nightmares about presiding over an MA defense and watching a full professor raise his hands above his head and stretch vigorously, which had the effect of making his big fat paunch emerge from under the t-shirt he wore to this solemn occasion), Keyser appreciates it when people dress well.

Case in point:

They say that some mothers advise that you should always wear clean underwear in case you get run over by a bus. Keyser's always been of the opinion that if that's your frame of reference, it would make more sense to be fastidious about your outer garments. Like the guy in the photo. Maybe someone will have to scrape his remains off the road bed below, but at least they'll say, "Boy, that guy came down in style."

"You Say Atonal, I Say Twelve-Tonal, Let's Just Call It Awful."

2009-04-10T08:38:00.003-06:00

Classical music lovers know that serial ear-rapist Anton Webern was accidentally shot in September 1945 during the allied occupation of Austria, when he stepped outside to smoke a stogie. Keyser's always harbored the suspicion that that explanation is a bit too "convenient," and wonders if there isn't more to it than that. And here's an album that shows why.

Supposedly,"the soldier responsible, army cook Pfc. Raymond Norwood Bell, was overcome by remorse and died of alcoholism in 1955." Well, maybe he was overcome with remorse. But only because he wasn't able to get Schönberg and Weber too.

Crafty Duck Outsmarts Eagles

2009-04-09T13:58:00.004-06:00

Some guy is out with his camera and seems some birds action. He starts taking fast shots and only figures out when he looks at them later what exactly was going on.

First some benighted duck is milling around minding his own busy, when a bald eagles decides the duck would make a nice lunch. The eagle swoops on the duck repeatedly, but he manages to dive just in time. The eagle would then resume the attack when the duck surfaced. The splash here is the disappearing duck:

Another eagle joins in, but two bald heads are no better than one:

In their frustration at not nailing the duck, the eagles turn on each other. They swoop at one another, playing chicken. Bad idea. Here they crash into each other at full speed. Ouch!

One of them flew away, but the other flopped into the water. He was really "winded" and almost drown. Here he is all bedraggled after extracting himself from the water.

The dinged-up eagle eventually recovered. Here he is ready to fly off. Keyser's always thought that those heraldic eagles you see on things like 19-century coins and the seal of the State of Illinois (it's on the flag) holding arrows and stuff in their claws as they spread their wings look totally fake, but this eagle is striking exactly that pose.

The duck, of course, got off scot-free. He was last heard chucking to himself, "Suckas!"

Be sure to click the link for the full series (and a bit more commentary).

How Would Jesus Spend the Easter Weekend?

2009-04-09T13:53:00.002-06:00

Would've been funnier if it said "Brews" instead of "Beers" (though granted "King of Beers" is the slogan).

How Not to Restore Confidence: US Treasury Edition

2009-04-08T14:12:00.005-06:00

So, the Treasury Dept. has run a "stress test' on banks, and the results are about to come in. Only problem is, some of the results we might not want to hear. Or rather, the US Treasury doesn't want you to hear them.

The U.S. Treasury Department is planning to delay the release of any completed bank stress test results until after the first-quarter earnings season to avoid complicating stock market reaction, a source familiar with Treasury's discussions said on Tuesday.

The Treasury is still talking about how results of the regulatory stress tests on the 19 largest U.S. banks will be released, and may disclose them as summary results that are not institution-specific, the source said.

The government is testing how the largest banks would fare under more adverse economic conditions than are expected in an attempt to assess the firms' capital needs. The tests are due to be completed by the end of April, but Treasury has said they may be finished before then.

Oh, sure, great. You guys have run the tests, and some of the results aren't good, so you just release it (or not) as you see fit in order not to "scare" us with the real news.

What do you think the reaction would be if the doctor runs some tests on you and he says, "Well, I'll just keep this to myself. Wouldn't want to upset you."

Or better yet. There's a group of patients awaiting their results and the doctor says, "Well, the results will be upsetting to some of you, so we'll just not tell any of you." What do you think the reaction would be among the patients? And (perhaps more importantly) among anyone thinking of lending them money when it turns out that the news about some of the patients is so bad that the doctor won't reveal it, but he also won't reveal which ones are terminal and which healthy?

This is total bullshit on any number of levels. First, concealing the truth has never made it "better" or made it "go away." In fact, if remedial action is needed, then not knowing the truth just delays and exacerbates the problem (making the cure that much less likely to succeed).

Second, the market works by knowing the truth. If you can't be sure of what's going on, you can't make rational decisions, and if that's the case, then it's best not to invest. God knows Keyser's not pissing any more of his money into "investing" until he's certain the system is "clean," and it's anything but that.

Third, so they're upset about not messing with the quarterly results, huh? If a private accountant withheld material information in order to influence the price of shares, he'd be guilty of fraud.

Fourth (related to third), presumably the fuckers on the Street have some idea of who's going to be hit once the news eventually comes out. Sounds like a prescription for a stock swindle (how 'bout some shorting?). Think those unethical swine wouldn't take advantage of the situation?

Fifth, there's every reason to imagine that the people who'd get hit through the release of this information are the very fuckers who started this problem at banks like Citigroup, and this is just further confirmation of the increasingly blatant subordination of the US Treasury to the interests of Goldman Sachs and the other criminal scum who are responsible for this disaster.

Sixth, in case anyone's forgotten, the US Treasury has a very large financial interest in a number of these banks, having "loaned" them vast sums and in return taken equity in some (particularly the worse offenders in the recent financial meltdown, the very banks most likely to come out badly in these tests). Accordingly, the US Treasury has zero credibility in its operation as an even-handed regulator, since the regulator now is a participant in the activities being regulated.

Then again, perhaps Keyser's being unfair. After all, it's not too easy to tell the truth when the CEO of Goldman Sachs' dick is halfway down your throat (pictured above is Lloyd Blankfein, left, getting ready for a "special informational session" with his "best boy" Timmy).

The US Treasury shouldn't "own" banks, and the fucking banks shouldn't "own" the government.

Fuck. This. Continuing. Bullshit.

Vixen Legal Proceedings Impending

2009-04-08T12:57:00.003-06:00

Keyser's been busy with lots of things recently (hence the comparatively light posting of late), but the legal travails of our friend Vixen ("die mutmaßliche David-Caruso Stalkerin," as they say in German) have recently been brought to our attention. Truth be told, Keyser hasn't given the matter much thought in a while, but it seems that her misbegotten persecutors still have nothing better to do with their vacuous lives than go on about it. Indeed, one of them still must be stalking Keyser to gauge by the "followers" over on the left. (In fact, Die Keyesr-Stalkerin describes herself as follows: "A she-ox with a cane. My loyalty exceeds the limits of the human imagination." Not too sure what that means. The first bit sounds like some sort of BDSM cum bestiality thing that exceeds the limit of Keyser's imagination - maximas deo gratias!.)

Anyway, the crazies helpfully direct readers to some Austrian guy who writes about the case. He's the one who uses the phrase "mutmaßliche Stalkerin." Whereas we tend on this side of the Atlantic to speak of "alleged" criminals before conviction, the word "mutmaßlich" means "presumptive," which presumptively gives a sense of where this guy is coming from. In any event, he says one thing that puzzles Keyser. :

Ein aktuelles psychiatrisches Gutachten wird nicht mehr gemacht. Das vorliegende Gutachten von Dr. Karin Treichl aus Mils wurde laut kurzer telefonischer Rücksprache bei ihr heute morgen bereits in der ersten Verhandlung 2008 mündlich erörtert. Es dient weiterhin als Grundlage für den Prozess.

An actual psychiatric examination is not being made. The previous examination by Dr. Karin Treichl of Mils was already delivered orally in 2008 during the first proceedings, according to a brief phone conversation with her this morning, and this continues serve as the basis of the trail.

What? In the first place, what business does the court-appointed psychiatrist have in talking to this guy? No doubt they do things differently in Austria, but you'd think patient confidentially would apply even there. In any case, if this is true, are these people crazy? If the issue is the mental health of the defendant, you'd think that having an up-to-date assessment might be a good idea, wouldn't you? The year "2008" is wrong. Unless Keyser's been misinformed, Vixen fled Austria in 2007, so this assessment is nearly two years old. One might say that the legal issue is solely the death threat made prior to 2007, so only her prior state of mind is relevant. But how does an assessment made so long ago serve to indicate the overall mental state of the accused, which surely is a fundamental element in evaluating the situation?

Anyway, Keyser will take a loopy Vixen over a pack of vindictive old hags any day.

Porn For Bibliophiles

2009-04-07T19:41:00.003-06:00

Woman's Work Is Never Done

2009-04-07T19:40:00.002-06:00

Don't Look Down!: Norway Edition

2009-04-07T19:11:00.003-06:00

Keyser will let you in on a secret. He doesn't like heights. So it would seem that Lysefjord in Norway is not at the top (so to speak) of his "must see" list. Be sure to click the link for lots more pictures.

Offensive Ad?

2009-04-07T19:03:00.003-06:00

Here's one of fifteen ads rejected as being offensive etc.

Good thing Keyser isn't on one of these ad review boards. All of them struck Keyser as funny, and he actually LOLed at this one. Truth be told, Keyser's always thought that the idea of kissing someone with a mouth that smells like an ashtray was less than appealing. But while "Kiss" may be an inappropriate name for a cigaret, the ad was rejected on the grounds of "obscenity and ressemblance of human beings," and Keyser supposes that under the circumstances, having breath that smells like tobacco won't really get in the way of the activity in the ad.

Spring Is Here!

2009-04-07T18:44:00.004-06:00

Since Keyser has been bitching for some time about the seemingly relentless hold of winter, it's only fair to mention the festival arrival of the balmy Zephyr.

Here's Max the Cat (he's seventeen - abducted years ago from some Haitian kids who were neglecting him in Somerville MA) enjoying being able to sit outside without risk of freezing to death.

Here's Lucius pretending to hunt in the dead plants from last summer.

Here's the mess leftover from the Bohemian waxwings eating the crap apples. If it stays warm, maybe Keyser will get out the rake and wheelbarrow to scrap them up and dump them in the compost.

Still a certain amount of snow in the backyard, but it was sunny and in the low teens centigrade (that's the low to mid 50s Fahrenheit), so maybe it will go soon. It's so nice to be able to expose your arm again to the air after all these months!

Welcome, spring!

Iam uer egelidos refert tepores,
iam caeli furor aequinoctialis
iucundis Zephyri silescit aureis.
linquantur Phrygii, Catulle, campi
Nicaeaeque ager uber aestuosae:
ad claras Asiae uolemus urbes.
iam mens praetrepidans auet uagari,
iam laeti studio pedes uigescunt.
o dulces comitum ualete coetus,
longe quos simul a domo profectos
diuersae uarie uiae reportant.

The Trillion Dollar Bore

2009-04-07T17:18:00.004-06:00

Greetings to Lair readers. Some have wondered where Keyser went to. Actually, the news was just boring, and Keyser was busy correcting the draft of a book on a dead language. In part, Keyser wanted to finish off his analysis of the Trillion Dollar Meltdown but it turned out to be a bore, and the unengaging task of talk about the book stood in the way of other posts.

You know, Keyser reads a lot of books, and sometimes thinks he should share his thoughts, but if the book is a "meh," what's the point (same goes for movies)? For instance, Hitler's Empire turned out to be not exactly spell-binding. Hitler was an asshole. Who knew? He cut a deal with the folks in western Europe that if they provided him with Jews to be killed and guns for his army, he'd like them alone. The Untermenschen in the east were just to be killed at a later date, and they weren't too thrilled at the prospect. The Poles couldn't do much about it, but the Ukrainians wound up having no choice but to support the USSR, even though they'd have been happy to help out Hitler if he hadn't been such an asshole. Also, the author was lacking in discipline, and didn't really have any interest in economics.

Speaking of which, that's a good segue back to the Trillion Dollar Meltdown. As Keyser noted before, the book was written in late 2007 in anticipation of a disastrous meltdown in the financial sector. The author was right about that, and his analysis of what was wrong (CDO's and securitized bullshit) and of what the immediate cause of the meltdown would be has been verified. Beyond that, not so much.

As already noted, the guy thinks that the US will have to deal with the bad decisions forthrightly. Har har har de har har, as Ralph Kramden might have said. The IMF is "guessing." that "toxic" debt held by banks may amount to $3.1 trillion in the US plus another $900 billion in Europe. As Denninger notes, the only why they're still guessing two whole years after the house of cards started collapsing is that everyone on Wall St. and their stooges in Washington are doing their damnedest to conceal the extent of the losses and to make it possible for them to limp along without coming clear as a result of the vast infusion of public funds to make up for their gross malfeasance.

So what does our intrepid author make of it all? Well, according to him, it's all the result of "Chicago-style" economic theory. He never explains what exactly this school is, or how it's tenets "caused" the problem. And apparently there are only two options: either this "Chicago-style" free for all or some happy land of peace and prosperity that is the result of government regulation. What exact regulations aren't stated.

This tedious (lack of) analysis is just an example of how people's political judgments have little to do with the actual facts and far more to do with one's "paradigm" of how the world works. This guy is clearly an old-fashioned Democrat (the dusk jacket shows him to be well into his 60s). They only politician mentioned is John Boehner of all people, and it would appear that Christopher Dod and Barney Frank had nothing to do with this situation at all. His basic outlook is provided by an anecdote. He was driving south from San Francisco to Silicon Valley one day along Route 1 instead of the usual Route 101. Here he received his "road to Damascus" revelation that the road isn't covered by "Arby's, the motels, the condos, the strip malls" of the other route because "there used to be a government here." He actually admits that "even the fine California government eventually grew into such a state of bloat and inefficiency as to prompt an epoch-making tax-payer revolt," but still. If they could halt the building of Arby's and condos with a mere wave of their legislative wand, well, surely they could solve this problem.

Of course, the government played no role at all in the debacle, except for its supposed "Chicago-style" belief in unbridled markets. Public policy in Washington that encouraged the abandonment of traditional lending standards for political reasons, the willful misuse of Fannie Mae and Freddie Mac as the conduits through which those loans were larded like a slow-release poison through the financial system of the world, and the setting of interest rates at artificially low levels by the Federal Reserve - all political decisions that materially contributed to the disaster - is entirely left out of the picture. After all, that might undermine the vague but certain belief that somehow the same people who conspired in creating the problem would play a useful role in solving it.

The book throws in all sorts of irrelevant crap, like student loans, the supposed increase in wealth inequity, and the lack of a national health system. None of that has anything to do with the problem. The guy seems to be yearning for some supposed Golden Age of the 1950s, when people with little education could enter the "middle class" via high-paying union jobs. Gosh, let's go back to those days. In fact, the perfect solution would be to make the US more like - France. No, really!

The French middle classes have smaller houses and cars than their American peers, but better diets, considerably more leisure time, and much more economic security, while the distance between the top and bottom is not nearly so wide as here. (pp. 168-169)

How exactly, eating more croissants, being lazy and having less risk of being fired is supposed to solve the financial crisis is not clear.

Coincidentally, Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Makes Things Worse just showed up in the mail. It's actually got a laudatory foreword by Ron Paul, so it promises to give a rather different analysis. Oddly enough, it's pretty much exactly the same length (about 170 pages), so we'll see if he does a better job with a prescription for the future.

Virgil is Singing Arms and a Man on Facebook

2009-04-05T16:44:00.003-06:00

Seems even Rome's greatest poet has an account on Facebook (click the image for the full image, it's pretty funny if you know your Aeneid). h/t to Mrs. S.

The Gods Speak to Keyser: Financial Edition

2009-04-05T13:27:00.004-06:00

Last night, Keyser read a bit in bed before surrendering himself to the embrace of seductive Morpheus. First, a chapter in the somewhat disappointing Trillion Dollar Meltdown. Then, after Keyser could stomach no more of synthetic derivates and monoline insurers and other such stuff, he indulged in a cheery chapter of Gothic grammar. Seems the combination doesn't go well together (in Morpheus' opinion at any rate). Keyser woke up several times dreaming about being puzzled by exercsies in Gothic that involved synthetic derivates and monoline insurers and stuff like that, which is woundrous strange in that the only thing written in the language (preserved at any rate) are the remnants of translations of the New Testament (with a few bits of commentary thrown in for good measure.

Well. As you know doubt know, in Book Nine of Herodotus' account of the Persian invasion of Greece a dream plays a significant role. At a counsel, Xerxes informs his advisors of his resolve to invade Greece (for reasons of revenge not worth going into). His uncle Artabanus holds the view that nothing good will come of it, and urges Xerxes to give up the plan. Xerxes looses his temper and tells Uncle Artie that he should be glad he's Xerxes' blood relative, because otherwise he'd be in deep shit for raining on the royal parade like that. The invasion's on, and that's that! But afterwards, Xerxes has second thoughts, thinking that Uncle A might be on to something after all. But during his sleep Xerxes sees a vision that tells him to keep on with the invasion. The next morning Xerxes says that Uncle A should sleep in his, Xerxes', bed (apparently on the grounds that the gods are too stupid to pay much attention when they send a nocturnal telegrap - it does to the royal bed, no matter who's in it). Uncle's a bit leery of this course of action, and he expresses the view that dreams are just a lot of nonsense that reflects what we've been occupied with during the day. Xerxes insists, Artabanos sleeps in the regal bed - and has exactly the same dream! Somehow, Artabanos now entirely forgets his own analysis of dreams, which would serve perfectly well to explain this turn of events, and so he too concludes that the gods are hell-bent on the invasion going forward, so he tells Xerxes to have at the Greeks. As well all know, nothing good comes of this, just as Artabanos had predicted in the first place. From this we conclude two things. First, Persian Uncles aren't very good at sticking to their secular-humanist views when the supernatural seems to intervene. Second, the gods are assholes.

So much for Herodotus. The point of all this was the original argument of Artabanos. Dreams are just a lot of rubbish based on what you've been thinking about. Seemingly, the system in your skull needs a bit of "vacation time," and when that happens in the form of sleep, part of the process involves letting the stuff that's "on your mind" bounce around a bit. And the fact that these meaningless thoughts pertain to stuff that's been occupying your thoughts makes it all the more likely that people think that these silly thoughts actually signify anything.

But maybe these silly thoughts are of some broader use, even if they don't really signify anything in and of themselves. It seems that Keyser at any rate thinks during the course of these nighttime distractions. It's been the case in the past that when he was bothered for some time by some intellectual problem, he would wake up in the morning with the solution ready packaged. Seemingly, the brain continues to chug away even during sleep under such circumstances. And the bizarre ruminations about Gothic exercises involving the absurdities of high finance would seem to be a reflection of this quirk of the human mind (or Keyser's specific manifestation of grey matter, at any rate).

So, after reading all sorts of mind-numbing stuff about CMO's and CLO's and CDO's and credit default swaps and synthetic derivates and the such like, Keyser thinks he came to a nocturnal realization of the elusive "big picture"! So here goes with the explanation of why Timmy "Dammit, Jim, I'm a stooge of Goldman Sacks, not Secretary of the Treasury!" Geithner's long-awaited and much-ballyhooed Private/Public Investment Plot is destined for failure (at least in terms of its ostensible purposes, though as we shall see, that's perhaps not the point).

So, in the last few years leading up to 2007, the jackals on Wall St. began lending increasingly large sums of money to increasingly bad credit risks for the purpose of buying increasingly overpriced houses. Why? Because they'd package these things into increasingly risky securities, which they would sell to making increasingly criminal profits on the deals. That is, they weren't making money from actually making money but from making deals (whose true nature they coincidentally obscured because no one would buy the shit if they actually knew what was going on, as we've discovered in the interim). Now, these CMO's were heavily leveraged. That means that the actual money put into buying these "securities" by the hedge funds etc. was comparatively small, and the rest was borrowed, with the purchased securities themselves as the collateral. That means, that it doesn't take much loss of value to wipe out the actual equity behind them on the part of the purchaser, in which case the security passes to the lender. And as we learned, it doesn't take much loss on the part of the pool that underlies these securities for the riskier lower "tranches" to be wiped out, and the losses caused by the defaulting of the lousy credit risks ("unemployed black men in string vests") to whom the mortgages were given means that the losses were far higher than anyone expected. What this means is that whereas the heavy leveraging meant very high profits when the system worked, it also means very heavy losses when things go wrong. Which they have.

Okay, so far, so bad. But the jackals made the situation even worse by making up ways to make money by peddling securities that actually signify anything. These are called "synthetic" derivatives. Truth be told, at this point the cleverness is beyond Keyser's aversion to math:

With powerful computers and lots of brainpower, a CDO [collateralized debt obligation] manager can create a synthetic CDO, that is, an array of swaps with a risk structure l just like a normal "cash-flow" CDO that is built from real securities. The manager must carefully build a reference CDO portfolio, mirroring thousands of real market instruments, and then model its performance under stress. When he is satisfied with the structure, he creates the family of credit default swaps that will return the same profits and losses as the bonds on an identical cash-flow CDO. What makes syntethics attractive for CDO managers is that they avoid the logistics and financial risk of buying in and warehousing securities while a CDO is being constructed and sold. In 2006 and the first part of 2007, the volume of new synthetics outstripped the volume of new cash-flow CDOs. (pp. 75-76)

Seemingly, the point is not to go to the trouble of actually buying securities, and instead to set up wagers on how the real things work in the form of "credit default swaps" (CDS's) that cover a theoretical investor in the case that the securities in question go bust. Apparently when it came to credit default swaps on real CDO's, AIG sold far more of these things than it had reserves to pay for them, but purchasing "insurance" via CDS's allowed the buying of risky CDO's to pretend that they risk wasn't actually there. But the stroke of "genius" appears to have taken the form of making up securities that don't actually have anything to do with real crappy mortgages given to real unemployed black men in string vests, but simply parallel the behavior of such things. That way, if the packager of these things makes money through the "cut" that he takes for his troubles, then the amount of money available for them to take a "cut" from is greatly increased. And if the opportunity for risky profit goes up, then so does the risk of corresponding loss, and since the losses are, as we've seen, leveraged, than this "leveraged" loss is multiplied even more through the creation of multiple mimickers of loss via synthetic derivatives.

So, how bad exactly is this "synthetic" disaster?

The total of global financial assets, which essentially are claims on GDP, was about the same as world GDP in the early 1980s. At the end of 2005, according to a recent International Monetary Fund analysis, global financial assets were about 3.7 times as high as global GDP. In other words, outstanding financial claims not only cover this year's GDP, but the next several years' as well. Financial derivatives, which represent claims on financial instruments, were a relatively rudimentary market in the 1980s. Their notional value by the end of 2005, however, was three times higher than the total of all financial instruments, and more than ten times higher than total global GDP. When those numbers are totted up for 2007, we undoubtedly find that they have ratcheted up much higher still, with the upward curve tilting more toward the vertical. (pp. 134-135)

Whoa! If that's correct, it would seem that the losses caused by the "real" defaults in those crappy mortgages not only have a leveraged effect on the owners of the "real" CDO's, but these synthetic things multiply the damage by a factor like ten.

Okay, so what do we do? In the bottom analysis, this multiplier effect rests on the value of those mortgages. If the homeowners (the people who took out the loans) default, which seems inevitable when loans are given to people who can't afford them, and the property is worth less than the mortgage, then there's no way to stop the bomb so long as the synthetic derivates and the credit default swaps that they're based on are upheld. It is clear that since Wall St. has bought itself the operations of the US Treasury, the Federal Reserve System, and the Congress, there is no way that they're going to cut the Gordian knot by abrogating these criminally fraudulent "securities" since that will take away all the "wealth" that the motherfuckers who constructed this financial madness for their own benefit have piled up. So the only other option is to restore the inflated values of the property underlying the loans so these can be sold off to maintain the CDO's and prevent the concatenation of leveraged losses that will destroy the whole financial sector (and, more importantly, wipe out the "wealth" of the jackals).

So what exactly determines the value of real estate? It goes up and down, but there are basic principles involved in lending money for mortgages, which is the ultimate determiner since most people take out a mortgage for a loan. The traditional standard is the so-called 28/36 ratio. That is, the total payments for the housing shouldn't exceed 28% of gross income, and total debt (including everything outside the mortgage) shouldn't exceed 36% of total income. Now, the ratio of housing price to income is also influenced by the interest rate and the down payment (both of which have been fiddled with in recent years via "teaser" rates that reduce the rate for the first few years and lowering the down payment down to nothing in some cases). The upshot is that manageable housing prices are something like three to four times income. It's not exactly "rocket science" (whatever that may be). Now, take a look at this page from June 2005(!). It indicates that already at that stage price in San Diego were nine times median income, and those in LA were eight times higher. (The guy who wrote the page actually advocates something like five times median income as being sustainable, but he cites an analyst as saying that the traditional ratio was as low as 2.7.) So, Keyser doesn't know exactly what the situation is now, but he's read that at least 10% more reduction is necessary, while some people exactly a further 30% decline.

But as a wholly owned subsidiary of Goldman Sacks, the US Treasury cannot allow that to happen. As we've seen, there's no reason to expect the homeowners who should never have received loans in the first place will suddenly become credit worthy. So the only way to prevent the CDS bomb from exploding in the faces of our deeply esteemed financier fuckers is to maintain the previous prices. In the real world, that is fundamentally impossible. Prices reached those levels as the result of lax monetary policy combined with lax lending standards. In effect, money was lent to bad credit risks to bid up the value of property, and the bursting of the bubble in 2007 shows the impossibility of that situation going on forever. So how do we square this circle?

Look at it this way. There's normally a situation where housing prices are three to four times median income, and the value of the property goes up or down according to income. But now we've boxed ourselves into a corner where the reduction of the prices will result in the ruination of the jackal financiers, which must be prevented at all costs because a) the country couldn't function without geniuses like this and b) they control the US government. So if the excess prices for housing can't be allowed to collapse, then the relationship has to be inverted. That is, instead of income determining housing prices, housing prices have to determine income. Income is normally the result of a share of productivity, and real income can only go up if productivity goes up. And with the recession we're in, there's no reason to expect productivity to increase, and every reason to expect that layoffs will result in a lessening of median income. But what we care about is not value but price, and the original prices are fixed. So as long as prices rises overall, then the proportional readjustment can take place.

Put a different way, if housing prices stand still in money terms but other prices rise, then old housing prices that these CDO's are dependent upon for solvency (that is, to prevent the leveraged losses that set off the CDS chain bomb) can be upheld. In effect, the losses will be spread throughout the economy by stealing from anyone who has wealth in the form of money.

And how exactly can this plan be implemented? This is where the jackals prove that they're worth every billion they've stolen. First, we pretend that the meltdown wasn't really the fault of their own criminal activity. Instead, we say that there's a "liquidity" crisis that can only be cured by a massive infusion of public money. So first Henry "Sky's the Limit" Paulson and then his successor Timmy "On My Knees Worshipping the Idol of Mammon" Geithner have shoveled hundreds of billions of dollars into financial first, like Citigroup, Fannie Mae, and the loathesome AIG. This has the short-term result of mitigating the effect of the initial CDS explosion. The ghost of AIG is kept alive simply as a conduit for bailing out swap holders.

But does the treasury actually have any money to give? Of course not! The US government has been running a large deficit for years, and it has two ways to "create" money. It borrows it through issuing bonds, and it prints money. And of course the former boils down to the same thing, as the Federal Reserve is now in the process of buying US treasuries - with money it's printed.

No one in his right mind can imagine that in the absence of increased productivity, this kind of money can be dumped into the system without causing inflation. Ben "I Don't Swallow, What Kind of Girl Do You Take Me For" Bernanke has recently spoken about the need for an "exit' plan so that the Fed can all of a sudden cut off the spigot at just the right moment. In the first place, since the Fed had no conception of what the problem was in the lead up to the debacle, why would anyone think that they'll know when to stop? In any event, this presupposes that they really do want to stop. Keyser's guess is that they haven't got the least desire to stop. Since they're stuck with the fixed prices of these CDO's and CDS's, and they can't get out of them without imposing severe losses on the fuckers who caused this problem through their greed (which of course is out of the question), the only alternative is to force up all prices through inflation, so that the fixed prices of the property underlying the old securities finally reaches a sustainable level.

Of course, that runs the risk of ruining the finances of the US government and the destroying the value of the dollar, but no doubt the jackals will find a way to profit from that too. They made their billions in previous years through fraud, so what's the harm in stealing from every single person with a dollar bill in his or her pocket? If anything, a coup like that is even greater proof of their financial genius.

This analysis must be true. The gods told it to Keyser while he was sleeping.

Beauty Amidst the Ruins

2009-04-03T21:25:00.000-06:00

Sports Photography: Pervert Edition

2009-04-03T21:22:00.004-06:00

How many shots did this guy go through before finally getting what he wanted?

Ever Wonder What Makes Someone Decide to Become a Dentist?

2009-04-03T21:19:00.001-06:00

World's Biggest Freestanding Structures: Toronto Edition

2009-04-03T21:15:00.004-06:00

World's Tallest Lightning Rod

2009-04-03T21:11:00.002-06:00

Human Sexuality: Rubber Edition

2009-04-03T18:41:00.006-06:00

"Jesus, do I get turned on by middle aged Chinamen in wetsuits!"

[Horrifying Update. Esteemed Lair reader Dr. Anton Phibes reports in the comments that these are in fact middle aged China women! As always, Keyser defers to the good Doctor in all matters both medical and oriental. Update caption accordingly... Funny, she doesn't look like she swings that way.]

Sullen Girls Have Faux Sex: Kama Sutra Edition

2009-04-03T16:47:00.009-06:00

In his aimless wanderings through the virtual bullshit known as the Intranet, Keyser came across these "artsy" images of two girls sort of mimicking the positions for sex advocated by the famous Indian chiropractical handbook, The Kome-On-Sue-Try.

[Reader advisory. These positions are being imitated by trained professionals. Do not try these antics at home. Or at least not without the participation of a trained professional. Rates may vary.]

This one is known as "Christ, the throbbing in my head is distracting."

The "What are you looking at, bitch?"

The "Wheel barrow" or "My elbow's killing me." (This one is particularly dangerous due to the risk of the garter belt snapping. Eyes have been known to be lost.)

The "Hey, you're the wrong way around again!"

Keyser's favorite, the "Oh, God, I think my back's about to snap!"

Economists Suck at Predicting the Future

2009-04-03T11:16:00.005-06:00

As previously noted, Keyser is reading the book Trillion Dollar Meltdown, and it just goes to show how economics isn't a dismal science at all. It may be dismal, but it isn't science. In science, you have to be able to make verifiable predictions about the future. But while there are principles to economics that let explain why something happened in the past, these can't really tell you anything about the future, because the phenomena under examination pertain to human behavior. There are no doubt economic constraints on what's possible, but the history of the Soviet Union should show that such constraints operate only over the course of decades, and humans can convince themselves of the most seemingly patent idiocy and apply themselves to operating according to completely uneconomic absurdities.

All this by way of introduction to a bit in this book that made Keyser laugh. Remember, the book was written in late 2007 as a prognostication of why the financial markets were ready to explode, as in fact they did. (A bit about the reasoning behind this analysis may turn up in another post later today). But it also talks about the future course of events, and this is what shows that the predictive possibilities of economics are dicey at best.

There's a whole chapter on how since the '90s foreign countries have taken on huge US dollar surpluses. The author blames this on "a quarter century of diligent sacrifice to the gods of the free market" without indicating at all what the underlying causes were (apart from the lack of savings in the US) or how whatever the opposite of idolatry of the free market gods would have led to a different outcome. In any event, he argues that the US will now be in the thrall of all sorts of nasty foreigners like Arab oil sheikhs, Russian autocrats and Chinese whatevers. He goes on about how the "sovereign wealth funds" will eventually dump their dollar surpluses or buy up US assets. This is all rather funny, as the economic meltdown has led to disaster among the oil producers (like the Russians), and everyone (especially the Chinese) seems to have no choice but to increase their dollar holdings as a form of protection - at least in the short term (Lair readers will know that Keyser agrees that the foreign holdings are a recipe for long-term disaster, but it's pretty clear that in the short term, foreigners are piling in to dollars).

So, the chapter ends with this conclusion based on the huge foreign holdings of dollars:

The recent woes of the dollar [i.e, drop in value against other currencies in late 2007] are important for our story because they effectively take the Fed off the board. As the credit crunch works its way through banks and investment funds over the next year or so, there will be no soothing fountains of new dollars coming out of Washington. The days of a universal put to the Federal Reserve are finally over.

Good lord almighty, the tears of laughter course down Keyser's cheeks like vast streams of dollar bills coming off the presses in the Bureau of Engraving and Printing! This very morning, we hear news that Congress has in outline passed Barry's proposal for $3.5 trillion budget with a mind boggling deficit in of $1.2 trillion, and we learn that the Federal government is on course for racking up a deficit of $9.3 trillion dollars over the next decade.

Money may not grow in trees, but it does grow just as freely on printing presses. The perceived need to dump a ton on money on Wall St., ostensibly to keep the financial world from coming to an end, but in reality to bailout Wall St. via its controlling interest in "The Federal Government" (a wholly owned subsidiary of Goldman Sacks), has resulted in a sort of happy-go-lucky spending spree by the drunken sailors in charge (known more "soberly" as the Democrat Party).

Hope they enjoy the party while it lasts. The clean up is going to be a bitch.

The Bail-Out Binge: Student Loan Edition

2009-04-02T19:18:00.004-06:00

Seems some girl who's a producer over CNN is not happy that she isn't getting bailed out of her financial irresponsibility the way Timmy Geithner's buddies at Goldman Sacks are:

I am 23-years-old, two years out of college and I am sitting on $115,000 of student debt. And based on my lender’s loan terms, I only have roughly 12 years to pay it off. How much does that make my monthly payment, you ask? A whopping $1,200 a month. And let’s just say my lifelong dream career in television doesn’t lend itself to that. The only option my bank is giving me is to go on “graduated repayment plan.” That means that for four years I will only be paying off the interest every month. How much is that? Well, $115,000 with interest rates between 4-8%… that’s about $600 a month and that doesn’t even touch the principal amount. People don’t pay off houses in 12 years and I am expected to pay off this student loan in an entry level position?

...

And why do I have such a short amount of time to pay off my loans? Because of the current financial crisis. Due to the economic downturn, my lender isn’t consolidating loans. If I were able to consolidate, my repayment time would extend to 30 years…just like a home mortgage. Now that wouldn’t necessarily solve the problem, in that I would still owe more than $500 a month with the principal and interest, but it would buy me a bit more time and stretches out the money.

Here is my question: why aren’t student loans receiving the same attention, same care and forgiveness as every other loan in America? I have to say that I am lucky to have a job right now and was especially lucky to get a job right out of college. Can you imagine what kind of pressure and stress the 2009 graduates are feeling in this time of uncertainty? Veterans of the workforce can’t find work right now. What about the recent college grads with no work experience and tens of thousands of dollars of unforgivable debt underneath them?

...

I chose to go to a private school and I chose to work in a field where the starting salaries are low. Does that mean that I chose to live a life of struggle, wondering how I am going to pay my rent, afford the basics of living and still stay in my chosen career field…all while putting up with high interest rates and an amount of debt that brings me to tears?

Well, to be blunt, yeah. You chose to go to some fancy school you couldn't afford (and given the coyness about the school, Keyser suspects it's not a big name, but still expensive, like, say, Bryn Mawr) to get some crappy degree with which you can't get a job to pay off the debts. It's not as if they're aren't public schools available at lesser cost.

To judge by the comments on this page (700!), there are a lot of people in the same absurd boat. Probably less than a quarter are of the "you took out the money, so suck it up" variety. The rest are all a bunch of "yeah, I've got $150,000 of student loan debt and I just had to eat the hamster" sort.

It appears that the US as a whole has turned into a bunch of whining malingerers who think that they can buy stuff they can't afford on credit and get someone else to pay off the bill when it comes due. Small wonder that's the plan in Washington for dealing with the financial crisis as a whole. Good thing the Chinese are willing to buy US debt, no matter how much they crank out in DC.

Right?

What the Fuck is a Collaterialized Mortgage Obligation Anyway?

2009-04-02T10:52:00.006-06:00

Keyser has noted in the past that he doesn't even play a financial expert on the interwebz, and his comments on matters pertaining to the economy are merely those of a reasonably intelligent person who reads a lot and tries to make sense of it. (If we're going to talk credentials, Keyser is a certified expert in the history of an empire that hasn't been around in quite a while, a number of dead languages, and demonology. Harvard says so! Outside of that, though, Keyser is something of a dilettante.) Keyser has remarked in the past that he doesn't really remember clearly why he started the Lair in the first place, but come to think of it, part of the purpose was the catharsis of simply setting down thoughts and disseminating them through the virtual ether of the intranets as a way of getting them out of Keyser's head (the noise they make bouncing off the inside of his cranium can at times be distracting). So Keyser hereby gives his understanding of one of the key elements in the meltdown as explained in the book. Perhaps they'll be more such posts, depending on how the rest of the book goes.

You know, Keyser is under the impression that some (most?) of his loyal readers are well versed in matters economic, and they may be shocked at the simplicity of the thoughts here ("Good lord, I've been reading that stuff as if he knew something. Turns out he's a halfwit!"). Then again, perhaps these posts may prove useful to others as well....

As Keyser posted yesterday, the book he's reading (The Trillion Dollar Meltdown) claims to explain the whole debacle (as of late 2007) in a mere 170 pages. Some of this explanation is perhaps a bit too short:

[The people discussed in this part] were relative-value traders. They tracked price relationships between comparable instruments, looking for price divergences that their models said were unjustified. A standard example is the trading spread between on-the-run and off-the-run Treasury bonds. On-the-runs are the most recently issued bonds, and since they have more trading activity, they usually trade at slight premiums to older bonds. But the premium will disappear with time. So the trader shorts the on-the-run issue (sells bonds he doesn't own) and buys off-the-runs with the proceeds. By the time he closes out the transaction, prices normally will have moved back together, and he will make a small profit.

What? Keyser gets it that new ones a worth slightly more than old ones (though this fact alone makes no sense to Keyser: if the return is the same, what difference does the issue date - or the "trading activity" - make?). "Selling short" he also understands. You think the price will go down, so you borrow someone else's bonds in the short term with an agreement to return them on some future date, expecting that you can sell them now for a greater price than it will take to buy the same number of bonds at the later date to return them to the loaner of the ones you just sold. But doesn't everyone know of the decline in value of these things over time if it's a matter of the (slight) depreciation of older bonds compared to new ones? And in any event, what does "prices normally will have moved back together" mean? That seems to imply that the prices were originally the same, but the whole premise was that the new ones have a slight premium over the older ones. Does this really mean simply that the once new ones have "converged" in price with the old ones now that they themselves have become older?

Probably just as well that Keyser spends his time belaboring the exact meaning of the words of long dead poets. Anyway, the explanation of CMO's was a bit "terse" too, but with a little bit of rumination, and the addition of knowledge picked up along the way elsewhere, Keyser thinks he understands these things. Since they played a major role in fucking up the financial system, it seems a good idea to understand exactly how they worked and what their purpose was.

A CMO is a "collateralized mortage obligation." That's a fancy term for a bond that pays a fixed rate of return that is generated by the payments made by homeowners who have bought their houses with money lent to them by a bank (in the broad sense of the word; could a savings and loan or the like) in the form of a mortgage. By the normal principles of the language, you'd think that "collateralized" would mean that the obligations had been turned into collateral. But, no. The sense is that the houses for which the mortgages were lent are collateral for the bonds. That is, even if the mortgage holder defaults on the loan, the bonds have the houses for which the money was lent as collateral, and the sale of any foreclosed-on houses goes to bond holders. Thus, the bond holders either get paid via the mortgage payments or the sale of houses. If the value of the assets keeps going up, what could go wrong?

So here's how the CMO's work. They were cooked up in the early '80s at a bank in Boston, and the original concept went like this. Previously, banks themselves kept the mortgage loans they made. Investors didn't like taking them over, because the maturity (usually thirty years) was longer than the horizon they preferred, and who the hell wants to actually deal with frigging homeowners? What the genii in Boston came up with was a way to turn the individual loans into a big homogenous blob that could be flogged as a security no different from a bond issued by GMC or the US treasury. You take a whole bunch of mortgages and lump them together in a group called a pool. These mortgages would as a totality produce a stream of income, which then become the percent return given to the bondholder (6% of the value of the pool, or whatever).

Now, if you simply divided the value of the pool equally among all the bonds issued on the basis of that pool, then you'd have a sort of boring, homogenous financial instrument. The key to understanding these things is the way that the risk of failure among the mortgage holders is distributed among the bold holders. Obviously, some people will always default on their loans, so that has to be worked in to the value of the pool. That is, you can guess on the basis of historical information what percentage will default, and work that into the value of the future income stream. But what the boys in Boston did was decide to divvy up the losses in an unequal way among the holders of different bonds. That is, there would be a varying exposure to loss.

In the early days of this stuff, the distribution of loss was pretty simple. You'd divide the bonds into three groups, which we'll call A, B and C. (Pretty clever, eh? As it turns out, these groups are called "tranches," a term presumably decided upon because it doesn't really mean anything. We'll avoid it for the time being.) Group A consists of the best bonds, and they're 70% of the total. Group B is (not surprisingly) the second best, and they're 20% of the total, while the dud bonds are the remaining 10% in Group C. The way the losses in the pool are assigned is not on a pro-rated basis. That is, they're not assigned proportionate among the three groups, so that A, B, and C get respectively 70%, 20% and 10% of the losses generated in the pool of mortgages. Instead, all the losses go first to Group C, and only if the losses exceed 10% does Group B begin to take a hit. And Group A is sitting there happy in the thought that it get hit only if 30% of the mortgages go into default. Not too likely, huh?

So what does this mean for the prices of the bonds? Well, Group A is pretty much golden. They're never going to take a hit, especially not with the value of the collateral housing going up all the time. What of Group B? Well, unless more than 10% of the mortgages become non-functional they're in the clear, and again, for them to take a hit, the value of the collateral back the number of defaulting loans that exceed 10% of the total has to be less than the value of loan, so Group B is pretty close to golden. Therefore, on the expectation that these bonds (both groups) will always receive their share of the income stream, we can price them on a pretty solid expectation of what they'll pay out over the years (with a slight discount for Group B on account of the slight expose to loss in the case of major trouble in the pool, but only after Group C takes the first 10% of the losses).

Then we get to Group C. They're exposed to all losses, so the question is, how many losses can we reasonably expect? By traditional standards, let's say that a 5% overall default rate is a reasonable expectation. After all, no matter how carefully you screen people, we're talking about humans, so some fuck-ups are inevitable (nasty divorces, suicide, a latent flaw in the homeowner as an employee, whatever). Actually, Keyser heard a little while ago about a small bank in the Boston area that had adhered to old-fashioned lending standards and even in the present crisis had only a 3% default rate (and the bank was in the news for getting into trouble with the FDIC for not publicizing its rates enough, which is less outrageous way of saying that they weren't lending to deadbeats - seems that some Federal agencies aren't able to learn a lesson, quelle surprise!).

Anyway, if we posit a 5% assumed default rate, then we guess at the value of Group C bonds. In effect, we estimate the likely future losses as 5% of the total, a figure that we Group C bondholders have to absorb in its entirely. That is, only 50% of the theoretical value of our portion of the loans (as gauged on the basis of the total value of the pool and the rate of return) will accrue, so we discount the value accordingly.

But what if the real rate is not in fact 5%? If the rate is 6% of the total, then our expected loss actually increases by 20%. And if the market tanks, and the actual rate of loss is double (10% instead of the expected 5%), then we're wiped out. Of course, if the default rate comes in at less than 5%, then our exposure is reduced by a correspondingly large amount. And once again, if the value of the assets goes up, then we too are pretty much protected against loss. The upshot is that these things have heavy exposure to loss if things turn out to be worse than expected, and so these bonds have to have a higher rate of return, which in turn makes them look like good investment. This is especially true given an expectation of a rising real estate market. The increase in value of the assets should cover the bad mortgages anyway, so you get the best of both worlds: a high rate of return at minimal risk. What could go wrong?

At this point we intrude into the analysis a point from an entirely different book: Nature's Metropolis: Chicago and the Great West by William Cronon. Keyser read this a few years ago, and it's one of those books that makes you go, "Oh, my God, I had no idea!" That is, a book that gives you an entirely new perspective on a topic, analyzing the material in ways you'd never imagined. Basically, the story is how nineteenth-century developments in transportation (most obviously railroads, but also water transport via a system of canals) allowed for entirely new ways of exploiting the natural world (agricultural products, lumber, domestic animals) through a network of production, transportation and distribution that covered the Midwest and Great Plains and connected them to the east coast and the rest of the world.

What's that got to do with CMO's, you may be wondering? Well, one of the major elements in the story is the "commodicization" (Keyser's neologism) of grain by the 1850s. Before that time, a farmer would send his grain to market in a sack that belonged to him. That is, he had to arrange the transportation of his grain, and would suffer the loss if something happened on the way to wherever he was sending it (and so needed insurance if he could afford it). Economies of scale meant it was a good idea to come up with a centralized collection area, and the transportation grid (the expanding railroad lines) made Chicago a logical place, and they began dumping the stuff into big silos there. What eventually happened over the years (starting in the 1840's, it would seem) was that Farmer Jones no longer had to worry about "his" grain all the way, but instead shipped in bulk to Chicago, where it would go into different hoppers on the basis of its quality. There were basically three grades, and at this point speculation in "futures" began. In effect, you could deal in large amounts of grain in the same way that you could deal with money. A given quantity of "No. 2 Spring Wheat" was identical to any other quantity, so you buy and sell the stuff without worrying about any particular sack of the stuff. In effect, a previously distinguishable item of trade now became an abstract unit of value.

And that's what happened to mortgages. But the problem is that while the assessment of grain into three grades on the basis of various criteria is pretty much objective and immutable (the stuff either is good enough for a given grade or it isn't, and it stays in that category until affected by some disaster like fire or bugs), the value of the pool of mortgages is dependent on very human variables.

The first variable is how well the mortgage recipients will pay back their loans. In the old days, the requirements of a 20% down payment and monthly payments not exceeding a third of income pretty much guaranteed the traditional default rates. But for assorted reasons, the old requirements were abandoned in the '90s. In part, the Federal government decided that it would be a good idea to get minorities into home owing, and pressured banks into making loans in violation of the old requirements. The banks in turn were happy to go along, because the development of CMO's meant that they could make a lot of money in short order at little risk to themselves. The mortgages were lumped together in these "commodicized" CMO's and sold off to investors who had little idea of what was actually in the pool. This lack of opacity was heightened by making CMO's a lot more complicated than the three-tier model laid out above. Remember how our "groups" are really called "tranches"? Well, supposedly, they eventually would divide the pool into as many as 125 separate transches, presumably to make it all the less clear what the hell was in them. But the basic math remained theoretically valid, and if asset prices kept increasing, then the exposure of the lowliest tranche (note the cool French "e" on the end of the word!) wasn't really that great, was it?

So these things were bought on premises involving traditional default rates, but the mortgages were not being given out on the basis of the traditional requirements. Keyser read something a while ago that suggested that 50% of loans made in the five years or so before the meltdown in the "sand states" (California, Arizona, Nevada and Florida, where greatest rise in housing prices took place) were in default. Holy shit! That means that in our old arrangement, Groups B and C were entirely wiped out, and even Golden Group A lost 20 percentage points of its 70% of the total. That is, even the best group lost 28% of its value, while the bottom two are worth nothing. Keyser also read that 50% of the mortgages in the US are "under water" (that is, worth less than the mortgage).

Small wonder that they're trying so desperately in Washington to reinflate that housing bubble! If they can push the price of house back up to the unreasonable levels caused by lax lending, then all these CMO's will stop destroying the institutions that bought them. Lots of luck with that.

The second variable was "agency." That is, the notion that people you get to act on your behalf (as your "agent") would actually act in your interest and not theirs. In the old days, when the local bank gave out mortgages, they tended to keep them (for the reasons noted above, they weren't too attractive to outside investors). The "commodiciaztion" process has meant that the people giving out the mortgages could readily unload them to somebody else (often via the criminal institutions known as Fannie Mae and Freddie Mac), so it was no longer of much interest to them if the loans would blow up in the face of some pension fund or foreign bank. Give out the loan to some idiot, hope for the best (all evidence to the contrary notwithstanding), and pass it along as a quality security. Great idea, as long as 50% of the loans don't go bad.

And finally, while the price of No. 2 Spring Wheat may vary at the whimsy of the market, it's still grain of a given quality that can be eaten. A house, on the other hand, has no inherent value, and is worth simply what someone is willing to pay for it. The idea that the market value will constantly go up is a mathematical impossibility. At some point, speculation will lead prices to an unsustainable level and a decline in price becomes inevitable. Furthermore, a market doesn't move in nice, smooth trends. Just as the rise was precipitous, so too will the fall be that way. Anyway security whose "security" is premised on the guarantee of value by market value is bound for failure, especially as the entry of money into the housing market facilitated by the marketing of such securities itself feeds the unsustainable speculative rise in values. In effect, the initial success of the system would in the long term guarantee its failure.

So, what's the upshot of this? As the chart above shows, there are huge quantities of these things out there, and their long-term value is up in the air. Maybe the immediate downturn caused by the bursting of the housing bubble has been halted, but flushing these things out will be a huge problem for years to come. Remember our friends Fannie Mae and Freddie Mac? They both went bankrupt last fall as a result of their involvement in this bullshit, and were taken over by the Federal government (the bankruptcy of the former costing Keyser over $5000). Well, they haven't been in the news lately, but are back with a vengeance. it seems that they needed an emergency infusion of $46 billion yesterday, and they say that the $400 billion that they have so far received from the treasury isn't enough and they'll need more.

CMO's: the gift that keeps on giving.

Loss of US Financial Credibility

2009-04-01T23:02:00.003-06:00

So, in the mail today there arrived the book The Trillion Dollar Meltdown by Charles Morris, which was written in 2007 (and published in early 2008) in expectation that the credit market was grossly overextended and would face a meltdown "by mid-2008 or so" (pretty close!). The author was involved in coming up with all those collateralized debt obligations and whatnot, and claims he'll explain all that stuff in less than 170 pages. Sounds promising.

Given what we've seen in the interim, Keyser was struck by this passage from the foreward:

The transparency and integrity of American financial markets has always been a magnet for global financial flows. Much of that trust has now been squandered and will be even more sorely tested in the years ahead. To restore credibility, American officials and financial leaders must forthrightly admit the scale of the problem and proceed to purge the absurd valuations, the phony triple-A ratings, and the inflated balance sheets that are marbled through financial balance sheets. The cost of not doing so - the loss of faith in American markets - will be far greater than a one-time trillion dollar asset writedown, painful though that may seem.

Well, as any reader of the Lair will appreciate, the past six months or so of reaction by "officials and financial leaders" has been anything but "forthright," as they strive to deny the "scale of the problem" and resolutely refuse to "admit the scale of the problem," preferring to shovel vast sums of money into AIG to keep the other fucking banks that hold credit default swaps written with gross irresponsibility by AIG from having to suffer the consequences of making those stupid "bets" in the first place.

The author claims that the situation is comparable to the popping of the big Japanese bubble in the early '90s.

But the tight network of Japanese government and financial executives chose instead to deny and to conceal, and almost twenty years later Japan still has not recovered.

Do you know how to say "We're doomed" in Japanese? No, Keyser doesn't either (though he's sure that at least one Lair reader does). But Keyser can say it in English, which is good enough.

Or should that be "bad enough"?

Keyser to Geithner: Sorry, Dude!

2009-04-01T11:29:00.004-06:00

You know, it takes a real Pannonian to admit it when he was wrong, and it appears that Keyser was wrong about one on-going meme here on the Lair. Keyser made fun of Secretary of Goldman Sacks Timothy Geithner for claiming that his bout of obvious tax evasion was the result of a pure inadvertence caused by the mind-boggling complexity of poorly designed TurboTax software ("Used by the highest-raking politicians everywhere!").

Dammit, Jim, I'm a genius, not a computer geek. How'm I supposed to know whether to press "yes" or "no"?

Well, turns out that even with the help of every single calculator owned by the Federal government, Timmy still can't do math:

On "This Week" Sunday, Treasury Secretary Tim Geithner told me [one-time gameshow host and present-day ABC hack George Stephanopoulos] that there were about $135 billion of uncommitted funds left in the TARP, the government's financial rescue package.

But the Government Accountability Office, a non-partisan federal agency, reports that the figure is closer to $32 billion, which is what ABC News and other independent analysts thought.

Well, smack Keyser's ass and call him a stooge of the Wall St./Washington conspiracy! Turns out that maybe Timmy really is that dumb.

You know the old adage: never ascribe to malice what can be ascribed to incompetence. But the adage doesn't say anything about malfeasance, does it?

Anyway, in the photo above, Timmy appears (rather inappropriately) on the far right with his crack staff of Treasury accountants (they're all ex-employees of Lehman Bros. and AIG, so they know what they're doing!). In the center is the top-secret fisco-whizmatron, a calculating device that keeps track of every single penny used for a loan or equity purchase or guarantee or whatever for each and every financial sector recipient of TARP funds to make sure that the Treasury doesn't lose a cent in paying off Deutsche Bank and Citigroup.

Give or take a few hundred billion. After all, what's money when it comes to friends?

It's Hard to Get Worked Up by the Ongoing Disaster

2009-03-31T20:55:00.003-06:00

In response to Keyser's recent post on being somewhat numbed by the whole economic situation and his feeling a bit apathetic in the face of it all now that the complete meltdown seems to have been halted, long-time Lair reader "she said" suggested that perhaps everyone is feeling a bit of sensory overload. That may well be. You can't go around screaming, "Oh, my God! The world's coming to an end!" all the time. (Well, you can, but it gets a bit tiresome after a while.)

But just because the system has stopped its seemingly inexorable list to starboard doesn't necessarily mean that she's righting herself. Get a load of this:

US house prices have fallen 29pc from their peak and are still tumbling at the fastest rate on record, according the closely watched Case-Shiller index.

The latest figures dash hopes that emergency action by the US Federal Reserve over the winter would at least slow the pace of decline.

Prices dropped 19pc in the 20 largest cities in the year to January, with an accelerating downward lurch during the first weeks of 2009.

There was a flicker of life last week when the National Association of Realtors reported a 5.1pc rise in sales of existing homes in February, a sign that overhang of foreclosed houses is slowly starting to clear – especially on the West Coast.

Anecdotal reports hint at a burst of sales in March, helped by an $8,000 tax credit for first-time buyers.

Chris Whalen, from Institutional Risk Analytics, said the crisis is spreading from bubble zones such as Arizona and Florida into rock-solid neighbourhoods in the East. It is also climbing up the credit ladder.

"Sub-prime has peaked in terms of loss rates but the problem now is prime property, and commercial real estate is falling off the table," he said.

There is concern that delayed time bombs on Alt-A (one notch above sub-prime) and Option-ARM "teaser" mortgages offered in the final phase of the boom have yet to detonate. The upward resets are heavily clustered in 2009 to 2010, although Fed policy should cushion the blow.

So what does this all mean? Well, there's a some hint that things might be getting better, but seemingly that's just a temporary phenomenon, and there are even further declines in property values in the offing. Which in turn means continuing bank problems, especially since the old sub-prime disasters and the concomitant credit default swap problems have merely been concealed through vast infusions of TARP funds into the damaged banks via AIG rather than actually solving the problem. And remember that the big Geithner "public/private" partnership that involves bribing hedge funds to use public funds to buy crappy mortgages has to be premised on the notion that the prices for the properties will rise to old levels. Otherwise, what's the point?

Keyser still feels apathetic. But anxiously apathetic, sort of like when you're on an airliner heading headfirst into the ground. There's not much you can do about it, so what's the point of screaming, "Oh, my God! The world's coming to an end!"?

Circle of Life: Waxwing Edition

2009-03-31T17:05:00.004-06:00

It seemed to be a sign of the approach of spring when the Bohemian waxwings arrived. But it turned into a sign of winters refusal to release its grip on the refrigerator that Keyser calls home when the waxwings decided not to move on as they usually do, and instead stuck around, so that Keyser was eventually able to film them (technical lapse notwithstanding).

Well, Keyser looks out the basement window yesterday, and does he espy? This:

Oh no. Could have been one of the cats, but since the waxwings stay up in the trees and there are no signs of trauma, the bird seems to have met a less violent death. Perhaps he just inadvertently ran into the kitchen window.

The perverse ruminations of certain "philosophers" notwithstanding, it's death that makes life worth living. And since, as you're happily flying through life, you never know when you might accidentally fly into a kitchen window, always have clean underwear on.

Post equitem sedet atra cura.

Bummer

2009-03-30T22:31:00.000-06:00

Keyser's Muse...

The Muse is Playing Coy

2009-03-30T22:23:00.004-06:00

For those of you who care that Keyser hasn't been posting much recently, here's a bit of an explanation. There was a visiting speaker all last week whom Keyser had to look after, and this rather distracting. But now that he's gone, Keyser again finds that the economic stuff just isn't doing it for him (or his Muse). Seems that Obama changed the head of GM and told them to try again with their big restructuring. Could be that Obama can't just dump a ton of money at them after the big AIG outrage. Maybe he's also decided that the UAW types are hardly going to turn to Sarah Palin next election, and it's a long way off, so fuck GM. Who knows, who cares?

Then again, probably most people don't really care much what Keyser thinks one way or the other, so it doesn't really matter.

But after spending so much time in the past few months writing a lot for the Lair, it seems odd not to be writing much now. Even a bit of a dereliction of duty. Keyser wishes the Muse would return...

Can They Really Be This Irresponsible In Washington?

2009-03-29T19:02:00.004-06:00

As Keyser just noted, the economic news has been pretty bland recent, though it would appear that the rise in the market recently, which was in large part driven by the rise in value in financial equities, was perhaps a massive scam engineered by the Treasury. In any event, even if it seems that the explosion of banks that threatened last fall is at the least postponed, they're taking advantage of the "crisis" in Washington to indulge in a monumental expansion of spending, ramping up future deficits in ways that would have been unthinkable less than a year ago. Here's a pretty daunting analysis of what will happen if the Three Horseasses of the Apocalypse (Barry, Harry and Nancy) get their way:

Then last week the Democrats' own Congressional Budget Office found that the ten-year deficits of the Obama plan will be about $2.3 trillion higher than the $6.97 trillion the White House is projecting. This is the policy of the party that was swept back into power in 2006 and 2008 promising a return to an era of fiscal responsibility.

Welcome to the Obama doctrine. It is built on the high stakes economic gamble that the public and the bond markets will tolerate trillions of dollars of borrowing to pay for massive expansions in government spending on popular income transfer programs. The corollary to this doctrine is that the left will create a political imperative to jack up tax rates to pay for higher spending commitments made today.

But the news on the red ink front is much worse than the president or even the CBO's budget report suggests. If all of Obama's "transformational" policy objectives--from global warming taxes to universal health care to doubling the Department of Energy's budget--are enacted, the debt is likely to increase from about 40 percent of GDP today to close to 100 percent of GDP by 2018. The ten-year debt is likely to be at least $6 trillion higher--or more than one-half trillion of higher deficits a year from now until forever--than the Obama budget projects.

These are uncharted levels of debt for the United States--though not for such high-flying nations as Argentina, Bolivia, and Mexico. This hemorrhaging of U.S. government debt will be happening at precisely the time when, in a rational world, the government would be running surpluses, in anticipation of the retirement of some 80 million baby boomers who will soon collect multiple trillions of dollars of government benefits from Medicare and Social Security.

...

Here are the unhappy totals: the debt is $6 trillion higher from 2010 to 2019 than Obama's forecast. In no single year over the next decade, even when counting the Social Security trust fund surpluses, does the budget deficit fall below $800 billion. The interest on the national debt rises to $850 billion a year by the middle of the next decade, which will be the largest single expenditure item in the budget--eight times more than we now spend on education and four times more than we spend on homeland security. Federal spending remains well over 25 percent of GDP and in some years creeps closer to 28 percent of GDP under the Obama budget, which ironically enough is entitled "A New Era of Responsibility."

Let's put this into perspective. In fiscal year 2002 (Bush's first), the Federal government's debt was $6 trillion. Last October the rose above $10 trillion first time. Only about ten days ago, it passed $11 trillion. That is, Bush added about $4 trillion in eight years. Under the CBO's estimate, another $10 trillion will be added in the next decade, making it something like $20 trillion.

Does anyone in his right mind imagine that this sort of increase in deficit spending is sustainable? In the first place, this is based on the CBO being correct in its predictions. But if this sort of spending goes on, it will crowd out private borrowing, which will undoubtedly delay/reduce any economic recovery (can anyone say "lost decade"? see Japan). And it will be possible to roll over this sort of borrowing only at the price of higher interest rates, which again will be damaging to economic recovery.

Exactly this sort of long-term deficit spending to fund expensive social policies was engaged in by Canada. By the late '80s this policy resulted in very high interest rates. So high in fact that it was necessary to end the cycle in the early '90s with high tax increases and the cutting of government spending. It was not fun at all. We'll see if the US will be able to straighten out its fiscal house without such wrenching corrections.

If the budget proposed by BHO is approved by the Congress, the answer will be a very decisive no.

AIG: Greatest Scam of All Time?

2009-03-29T18:39:00.005-06:00

The economic news has been sort of calm these days. The market's gone back up a bit, and no big company's announced imminent bankruptcy in a while. Well, you read stuff and you have no real idea whether it's true or not (after all, Keyser's a professional demonologist, not a frigging banker), but if the following is true, the "good" news is just another monumental scam, courtesy of the US treasury:

AIG, knowing it would need to ask for much more capital from the Treasury imminently, decided to throw in the towel, and gifted major bank counter-parties with trades which were egregiously profitable to the banks, and even more egregiously money losing to the U.S. taxpayers, who had to dump more and more cash into AIG, without having the U.S. Treasury Secretary Tim Geithner disclose the real extent of this, for lack of a better word, fraudulent scam.

In simple terms think of it as an auto dealer, which knows that U.S. taxpayers will provide for an infinite amount of money to fund its ongoing sales of horrendous vehicles (think Pontiac Azteks): the company decides to sell all the cars currently in contract, to lessors at far below the amortized market value, thereby generating huge profits for these lessors, as these turn around and sell the cars at a major profit, funded exclusively by U.S. taxpayers (readers should feel free to provide more gripping allegories).

What this all means is that the statements by major banks, i.e. JPM, Citi, and BofA, regarding abnormal profitability in January and February were true, however these profits were a) one-time in nature due to wholesale unwinds of AIG portfolios, b) entirely at the expense of AIG, and thus taxpayers, c) executed with Tim Geithner's (and thus the administration's) full knowledge and intent, d) were basically a transfer of money from taxpayers to banks (in yet another form) using AIG as an intermediary.

For banks to proclaim their profitability in January and February is about as close to criminal hypocrisy as is possible. And again, the taxpayers fund this "one time profit", which causes a market rally, thus allowing the banks to promptly turn around and start selling more expensive equity (soon coming to a prospectus near you), also funded by taxpayers' money flows into the market. If the administration is truly aware of all these events (and if Zero Hedge knows about it, it is safe to say Tim Geithner also got the memo), then the potential fallout would be staggering once this information makes the light of day.

We've known for a while that AIG (Grs) was a conduit for the treasury to siphon vast sums of money to banks. But we didn't know that the purpose was not so much to keep the system from falling apart if those stupid credit default swaps were themselves defaulted on by AIG (Grs) as to pump up the banks' profitability artificially and thereby cause the market to rise (and perhaps coincidentally relieve the pressure on Geithner to fess up about what he's doing).

You know, apart from anything else, it makes one wonder who exactly would have been "in" on this on the street and could they have made money by buying up equities on the cheap in the expectation that they would rise once these supposed "profits" courtesy of Geithner's largesse were made public.

Famously, William F. Buckley once said something to the effect that he'd prefer to elect to public office anyone selected at random from the first two hundred names in the Cambridge MA phone book than a Harvard professor. Keyser's coming to believe that it would be safer to put in charge of the Treasury Department pretty much anyone rather than some fucker from the "big boys'" club on Wall St. (like Paulson or Geithner) as it would seem that those swine will do anything they can to protect their buddies on the Street at the (massive) expense of the public purse.

Fuck. Them. All.

Darwin Awards: Canadian Entry

2009-03-27T18:17:00.004-06:00

One wouldn't want to be accused of being "insensitive" about someone's death, but really, this is a pretty embarrassing way to go:

A pedestrian talking on her cellphone while crossing the street is dead after being struck by a delivery truck last night.

The 28-year-old woman was crossing Front St. at the crosswalk around 9:30 p.m. when the truck, making a right turn from Blue Jays Way, struck her.

Toronto Police said the woman was talking on her cellphone at the time and walked into the side of the truck. She fell to the ground and the rear wheels of the truck ran over her.

She was pronounced dead at the scene.

Apparently, not only was this woman absent in kindergarten when the class was instructed to "look both ways before crossing the street," but she also missed the lesson about "don't run into moving trucks, as you might fall under the rear wheels and get killed." Or maybe she was too engrossed in a cell phone conversation to pay attention.

Okay, maybe Keyser does want to be accused of being insensitive.

Is the Mob Finally Getting the Pitchforks Ready?

2009-03-26T13:39:00.004-06:00

Things have calmed down a bit on Wall St., as the fact that Timmy "On My Knees and Ready to Blow" Geithner has shown himself to be happy to write out checks for untold hundreds of billions of dollars to help out his deserving buddies back at Goldman Sacks has gotten everyone on the street relieved. The fact that there are signs that already not everyone's too keen on buying the treasury bonds needed to keep this charitable exercise going is rather a bit of a concern when a deficit of nearly $2 trillion seems to be in the offing, but that problem may not turn really ugly until the fall.

Now, Keyser was totally vexed about the whole situation while it was going on back in the fall, and he remarked upon the equanimity with which the "average Joe" was getting fucked in this whole bail-out thing for the benefit of the fuckers who not only made out like bandits in the good old days, but proved to have been actual bandits in that the money they made was the result of a monumental fraud, which is what got us into this mess in the first place. It would appear that the "average Joe" was just a bit slow on the uptake, needing a few months for the staggering proportions of this bail-out and the outrageous nature of its recipients to sink it.

Seemingly, the AIG (Grs) payments were the last straw. First, the outrage caused the House to pass a tax trying to get the money back. Then some guy over at AIG (Grs) wrote a letter (it's in the fucking Mew York Times, so you'll have to find it yourself) bellyaching that he didn't cause the problem and he's been promised this bonus in return for helping sort out the problems there - courtesy of something like $180 billion of public money. Well, get a load of the following response:

Dear Wall Street, Choke to Death on Your Mom's Bloody Cunt Rag, You Miserable Shits!

Whoa! Even at his most extreme, Keyser doesn't sound like that!

What a bunch of whiny fucking babies. John Galt would be puking blood for 200-pages over this load of shit, you bunch of sobbing welfare queens. You fucked up. You ruined everything. You broke it, and we fucking bought it, because big baby was too big baby to fail.

We get it all ways from you motherfuckers. You're robbing us of our present and future now, but first you stepped on our throats on your way to the top. You raked in the money with a bunch of made up fantasyland bullshit that wouldn't fool a counting horse on America's Funniest Home Videos, but somehow suckered in every major bank in the world.

Credit default swaps.

Those things are so fucking dumb that when you explain them to somebody and they laugh about how dumb they are you've got to act like ooooh they're so magical and complicated. Far too complex for the plebes to get. No! Wrong! Go into OTB and put fifty dollars on Rambo's Beautiful Blood. You just bought a credit default swap. Whoaaa you're blowing my simple pea brain with your fancy Wall Street talkin'. You sadsack fuckers.

So everybody bought into your big scheme, even when they didn't know they were playing, and now the whole thing has come crashing down because too many people won the fucking unbelievably obvious bet that a million illegal immigrants were going to default on million dollar home loans. Suddenly all your stupid fake money is gone, but if it's gone the whole system of bullshit lies collapses and you look like dickheads. So whoopty-doo, now we gotta make the fake money turn real or else the house of shitty cunt cards comes crashing down, only there isn't enough real money to cover all the fake money, so we're making more real money.

Then there's A.I.G., the bad seed, the carbuncle on our anus, the weeping wound in our tit, the sorry source of all our misery and woe. This is the monster garage full of miscreants that dreamed up the fire-breathing nitro-gulping predicament we're in right fucking now. Their financial products division created the derivatives market from lies and their executives raked in billions in bonuses and easy money. While they were peddling bad bets, median wages in the US stagnated and poor working schmucks leaned increasingly on credit to get by. Prices on everything were going up, but credit was easy to come by what with all that bullshit money to throw around.

And then the good days ended, for the poor shithead in the middle class anyway. While you assholes on Wall Street were lining up for your first round at the government trough, the poor fuckers that had been using credit cards to maintain their standard of living from the 1990s were beginning to lose everything. Their houses, cars, health care, and even their jobs were disappearing. Fuckers at Merrill-Lynch, A.I.G., Citi Group, Bank of America, and on, and on, and fucking on were taking huge bonuses or executive compensation packages. They were "retiring" to third world countries where their fortunes would set them up like kings.

And listen up motherfuckers, because we fucking paid for it. Us. The fucking taxpaying public. The dudes you have been grinding beneath your heels since you first read Ayn Rand and sociopathed your way through econ 101. We're your paymasters now, fuckers. And yeah, your tools in the government and in the press are between you and us for now, but we've got one trick up our sleeve. One and only recourse while you're raping us for our last fucking dollars.

We can get pissed. We can let the hate take over and form a fucking mob. When you take home bonuses from our money, when you get our bailouts and have your lobster luncheons or your strippers and coke parties at the Mirage, we'll be there with our torches and our fucking pitchforks. And just because you got your little crybaby letter in the New York Times, just because "the media narrative" is turning back in your favor, doesn't mean we have forgotten. We're pissed and we know what you did.

Jake DeSantis, you fucking narcissist, don't give me that bullshit self-pitying resignation letter. Don't tell me you weren't the dick that has been fucking this country, just the hand on its throat. Don't make me laugh with your charity donation lesson in life. Let me give you a life lesson. We'll go through the Red Cross and the March of Dimes to get to you. We'll leave Jerry's Kids mewling and thrashing in the gutters and overturn the Salvation Army Kettle to get our fucking money back.

You're all scum. Villains. And before this is through blood will be shed. Human blood that doesn't come out of a gigantic fucking vagina like yours, DeSantis. It's not a threat, it's a promise you're making to us.

"Come get us," you're sneering.

"I hope you like to eat turds from a human butt," we're sneering right back.

Your offices will be lit from within by the fires of a thousand burning evil motherfuckers and their evil personal assistants. There will be chaos. Triple chaos. Saigon all over again. They'll be pushing G5s off the deck of an aircraft carrier to make room for the next private jet escaping New York. We'll string the filth of the NYSE from lamp posts and Rick Santelli's empty sockets will look out on the streets, choked with useless paper and cars torched for insurance money.

The orgy of our outrage will be legendary. We'll cut off hands and feet and gouge out tender parts. We'll feed chopped up guts to dogs and rotting carcasses can fertilize urban gardens. Remember that tree they put Conan on? No, that's not for you, that's for your wives! You should be so lucky!

The last of you, the scarred remnants of your horrible tribe, can read this to a congressional hearing, your voices quivering with indignation while pale fists hammer on the glass and cry to see your blood spill out in a red gush across the steps of the Capitol.

You motherfuckers had better be afraid. You haven't learned your lesson yet, but we have.

The boys on Wall St. better hope this effusion is anomalous. Because if it represents some real sentiment out there, then the Street's in trouble. And it would seem that the trouble is going to make a visit in DC too.

Count Keyser in! He's had his pitchfork and torch ready for a long time!

Cognitive Dissonance: Spring Edition

2009-03-26T12:14:00.005-06:00

In the expansive backyard of Casa Söze there's a crabapple tree. Why people cultivate crabapple trees is a mystery to Keyser. If you're going to have an apple tree, why not a real one, with fruit you can actually eat? Back in the day, the first Mrs. S.'s brother used to live nearby, and he had a) a decent apple tree and b) one of those old-fashioned presses that crush apples to make juice come spurting out. This was great because apart from the fun of heaving the apples in and turning the crank to grind them, you could mix his apples and ours to get twice the amount of really good apple cider. Sadly, he moved some years ago, taking his apples and his press with him. Since then, the crabapples mostly get left on the tree.

This is not an entire waste, however, as one of the signs of spring around here is the arrival of the Bohemian waxwings. Keyser had never heard of them before moving here, but they appear all of a sudden in huge numbers in February or March. They take over entire trees, and large numbers of them descend on the frozen crabapples for food. (Maybe the juice has fermented and they view the apples as a bit of avian happy hour.) They have a pretty grey coloring with bright underwings, and they're pretty loud too. Anyway, they noisy appearance normally marks the arrival of spring. It also makes a mess, as they knock of a lot of the apples onto the ground.

Well, they showed up last Saturday. We don't have a proper video camera, but the digital camera makes movies. We've seen one here before courtesy of the smallest Keyserling, but Keyser himself has never used it for that purpose. Keyser thinks it would be cool to take a movie of the swarming birds, so he asks Mrs. S. how to make the camera take movies. She says, "You turn the setting wheel to the end where there's a picture of a movie camera." Seems easy enough, so Keyser braves the cold in the back entry way to stick the camera out the doorway without disturbing the birds. The little moving picture you look at when getting ready to take a regular picture shows the birds all chirping away and bingeing on apples, so all must be well.

Plug the thing into the computer to download the images, and there's nothing there. WTF? Well, after a bit of to-ing and fro-ing, it turns out you have to hold down the button that you press once to make a regular photo.

Keyser: Why didn't you tell Keyser that?

Mrs. S: I didn't think I was dealing with an imbecile.

K: Well, more the fool you.

MS: What?

K: Yeah, Keyser's point exactly.

Things went downhill from there. Fortunately, it didn't take too much self-abasement to restore peace and harmony to Casa K. But since the waxwings only visit once, there'd be no pictures of them this year.

So, Keyser's at home this morning, and when he goes into the kitchen, what does he hear but the tittering sound of swarms of Bohemian waxwings, once again partaking of the open bar! (Guess the place they usually move on to is even colder than here, which is a pretty grim thought.) So Keyser grabs the camera, and this time being armed with the latest instructions for using cutting-edge technology manages to take some film of them.

Bear in mind that today is March 26, which puts the official arrival of spring some days ago. Ha! No spring around here. There's still snow all over the place, and it was -9ªC (that's something like 15ºF) at 11 in the morning. Anyway, enjoy the birds!

Out the back door:

Through the kitchen window screen:

Demeter's Daughter is Embarrassed

2009-03-25T23:19:00.004-06:00

As Keyser eagerly awaits the return of Persephone from her long sojourn in the underworld, he came across this photo. Small wonder she's in no hurry if this is what the next few months hold in store for her.

Keyser would probably have the same expression on his face if he had all that stuff on his head too.

Fuck You, Kelly Clarkson, and Your Goddamned Ads for Triscuits

2009-03-25T22:26:00.005-06:00

Normally, Keyser embeds videos from YouTube because that's the easiest way to do it, but sometimes embedding is disabled at the request of whoever posts the thing. Well, the other day we had a post about a Kelly Clarkson song, and because her official posting of the video on YouTube had embedding disabled, we resorted to Meta Cafe. The thing came with a thirty-second ad at the beginning, but that was tolerable.

Then this afternoon at the university, Keyser's computer started playing audio ads for Triscuit crackers. Triscuits are fine in Keyser's estimation, but he had no desire to hear an ad about them. There was a bunch of stuff open on the computer, including a lot of internet pages, so who knew where that annoying noise was coming from? But it stopped soon enough, so Keyser forgot about it.

Then a few minutes ago, esteemed Lair reader Dr. Anton Phibes sent your humble Pannonian an email asking, "Yo, dude. Are you aware that your site is flogging Triscuits? Have you sold out to The Man or what?"

The penny instantly dropped (as the British say), and Keyser knew he'd been infested with some sort of InterScam. But where? The most likely candidate (as pointed out already by the Good Dr.) was the latest CatShit video, as that was the only new one of the day. But that was a run of the mill YouTube video, and the source code for the site revealed no obvious "spy ware." Keyser cut the video out, reloaded the page - and there was that goddamned song! Scratch that explanation.

Meanwhile, Mrs. S. used her first-rate google skills to discover this post:

I have no idea why, but ever since I checked out the site this morning, some audio advertisement telling me to go buy Triscuits and Kraft cheese has popped up as soon as the page loads. It's not a pop-up window, so I guessing one of the embedded videos has that at the beginning of it, but I can't for the life of me figure out which one it is...there's no Triscuits video loading when I quickly scroll down the page.

Sounds familiar, no? Well, this guy's site has several videos, some YouTube, some not. Obviously, since it wasn't the Cat Shit video, there must be some other explanation. Keyser scanned the Lair, and the only video that wasn't from YouTube was - you guessed it - Kelly Clarkson. So Keyser cut it out, and lo and behold, no song.

Keyser then went to the original page for the video at Meta Cafe, and if you click on the video, what's the first thing to turn up? Why, an ad for fucking Triscuits!

That has to be the most obnoxious advertising ploy Keyser's come across since the last Oatmeal Crisp commercial. Having to put up with a short ad when you play the video is one thing, but taking over the page so that every time it loads you force people who have no interest in viewing the Clarkson video and may not even know it's there to listen to some stupid commercial is completely unacceptable. So fuck you, Kraft, fuck you, Meta Cafe, and fuck you, Kelly Clarkson. Keyser's certainly not using his site to help you out with your revenue stream.

And judging by the image above, it seems that Kelly C is rather fond of Triscuits herself.

Cat Shit One: The Trailer

2009-03-25T14:31:00.003-06:00

No, really, that's what it's called. This gets filed under the rubric "The Japanese are so weird." Seemingly, some CGI thing about rabbit soldiers fighting cat terrorists in Iraq. Or something.

This Is What Comes of Putting a Guy Named Sir Jim In Charge of Education Policy

2009-03-25T14:14:00.006-06:00

Just yesterday we had a post indicating some people at least still get a decent education in the UK. Seems that should have been "used to get, " to judge by the new curriculum being proposed in Britain.

Primary schools will be told to tear up traditional lessons in favour of teaching about social causes and social networking sites in the biggest education shake-up for 20 years, it emerged today.

They will no longer have to teach the Romans, Vikings, Tudors, Victorians or the Second World War but must help pupils master websites such as Twitter and Wikipedia, as well as blogging and podcasting.

Compulsory sex education will start from five and children as young as nine will be taught to make 'informed decisions' about taking drugs and drinking alcohol.

As swathes of prescribed knowledge in science, history and geography are stripped back, schools will be encouraged to put a big emphasis on internet skills, environmental education, healthy eating and well-being.

The blueprint for a new primary curriculum was drawn up by former Ofsted chief Sir Jim Rose following a request from Children's Secretary Ed Balls.

Guess it takes a lot of Balls to propose something like this. Or maybe that's Balls and Jims. Or perhaps Bollocks, as the Brits say.

Oh, well. Perhaps the new motto of the UK will be "don't know much about histor-ee," but at least the kiddies will know about sex and Twitter. And when you get down to it, these are busy times, and maybe it's best to concentrate on the important things in life.

British Awesomeness

2009-03-24T19:22:00.004-06:00

You know, people are always going on about what a great orator Barack Obama is supposed to be. Keyser doesn't really see it. The man goes blathering on, for sure, but so far as Keyser can see, he never really says much substantive, and in any event is happy enough to disregard what he said in a speech once he gets into office. And the approval for all this supposed rhetorical excellence is all the more striking in that in the US, a well-prepared speech is generally taken to reflect a sort of contrived insincerity, while inarticulateness is a sign of that useless virtue, "genuineness." Keyser's never really seen what's so good about that quality by itself. After all, being a "genuine" idiot is hardly much of a recommendation. (And when you get down to it, it turns out that "change" for its own sake without consideration of what sort of change one is talking about is not necessarily a good thing.)

Which is all by way an introduction to the following video, wherein a British (English, actually) MEP (Member of the European Parliament) dresses down the British Prime Minister (the one BHO totally blew off the other day), after he's addressed the European Parliament. We've actually seen this guy before, and whatever one thinks about the content of his speech (and truth be told, he description of the ailments of the UK economy could certainly be said of the US too), it's so refreshing (from a Transatlantic perspective) to hear someone speak so vigorously and coherently at length like this. (One might also note that while he seems to have notes, he nonetheless is speaking basically off the cuff, unlike BHO, who seemingly is totally at sea if he isn't reading his words mechanically off a teleprompter screen.) Speaking of being "at sea," note the extended ship imagery in the middle of the denunciation. Now there's a well controlled ability to express oneself!

Anyhow, hear the speech yourself. Quo usque tandem abutere, Catilina, paientia nostra? indeed.

Infernal Interludes

2009-03-23T20:01:00.002-06:00

Seems that even in hell, they get days off - for bad behavior?

Amber Waves of Grain

2009-03-23T19:55:00.002-06:00

Three days into "spring" and there's still snow on the ground. Keyser's sick of winter!

Geithner: Genius or Lying Scum?

2009-03-23T18:56:00.007-06:00

First off, let Keyser say that while this may come as a surprise to some readers, he actually has a job of sorts, and since last Saturday he's been busy looking after a visiting speaker. This occupation will go on through the weekend. Hence, the light posting. Keyser even solipsistically feels bad about leaving Lair readers with little to read, though no doubt they have lives of their own that can functionally well enough (if not optimally) without Keyser.

Anyhoo, some people seem to think that Keyser actually knows what he's talking about when it comes to the economy. Or at least he talks as if he does. In the real world, however, he doesn't even affect any great knowledge in this regard. He's just someone who's probably a bit more intelligent than most people (though not, of course, the select readership of the Lair!), applying his grey matter and his fairly retentive memory to his readings about the economy (and other stuff), which he then conveys to you.

All this by way of introduction to a short discussion of the announcement (finally!) of the Big Treasury Toxic Buyout Plan. Obviously, the stock market was pleased, going up nearly 500 points. Now, Keyser has had occasion to remark in the past that the market is often swayed by transient considerations that ignore the "big picture." Furthermore, one of the major drags on the market is the problem with banks, which have tons of dubious loans on the books (or more worryingly off the books) that aren't "worth" as much as the banks paid out, so they're unwilling to sell the stuff at the market rate, which heavily discounts the value of these loans. Uncertainty about the future has pushed down the value of financial equities, and the plan indicates that the banks will get the shit off their backs. So that's good for the banks. But what's good for the banks isn't necessarily good for the economy, or necessarily worth the vast expense.

And here's where Keyser's original caveats come into play. He's read a certain amount of talk that indicates that there are big problems with Geithner's plan. Is this just biased interpretation coming from Obama foes? Actually, that doesn't seem to be the origin of the negative interpretations (though they are then given "play time" by people who do in fact dislike the present administration and are glad to pass on congenial views). In any event, this is the point where it would be helpful to have a solid understanding of the underlying realities. That is, not just an understanding of basic economic principles, but of the nitty-gritty of banking at the level of many billions of dollars. (Truth be told, Keyser is still astonished on the few occasions when he writes checks with five digits before the decimal point.)

So what is the problem? First, it would seem that the amount of equity to be put up by the private investors is very small - as little as 3%, it would seem, of the amount tendered for this stuff, with the Treasury loaning them the rest. These are apparently "non recourse" loans, which means that if the loan goes bad, the investor isn't liable for anything more than the original investment (only 3%, remember). That means (seemingly) that it doesn't take much increase in value for the investor to do okay, and the huge risk if the stuff tuns out to be worth a lot less than the price paid for it is on the Treasury. Keyser's not sure why under these circumstances, it's necessary to get these investors in the action at all, and Keyser's always suspicion when people do things that aren't readily explicable, and tends to suspect some sort of bad motive.

Furthermore, who's going to buy this stuff? Now, whether this possibility is a substantive threat Keyser can't say, but he hears tell that it would be in the interests of the banks to lend money to people to push up the value of this stuff when it's sold off, because any private investment money provided by the banks is then leveraged many times over by the matching money from the Treasury. So what? you might ask. The so what is that at comparatively little risk to themselves in terms of losing the 3% private investment that they've loaned to the buyers, the banks get the shit taken off their hands, and put into the hands of - the Treasury if things go bad. That is, the banks will try to get people to use their comparatively small (borrowed) investment to push up the sale value of the "toxic assets" and get as much cash for their own books, and if the stuff turns out not to be worth that much, well, it's the Treasury that gets fucked. Basically, the return from the total sale would far outweigh the amount that might be lost in lending for the purpose of the starting the buy-out with the small "private" investment.

Well, you might ask, what would be the point of Geithner doing such a thing, which would shift the shit from the banks to the Treasury, in effect nationalizing the debt and leaving the banks unburdened? Well, since Hanky "Never Met a Banker I didn't Want to Bailout" Paulson spent the months after the meltdown in September trying to bail out his buddies on the Street, it may simply be that Timmy's up to the same game. It's also conceivable that he thinks that getting the banks functioning again is all that's necessary to go back to the good old days, perhaps with the additional idea that functioning banks will lead to a return to the higher, pre-meltdown asset values. And the two intentions are not mutually exclusive.

But even if Timmy's plan is a go in the narrow sense, will that actually solve the "problem"? Depends on what exactly the "problem" is. Even if banks go back to lending, one would hope that they'd have learned that lending to deadbeats who don't have a down payment and can't in any event keep up with the monthly payments is a bad idea. Which in turn ought to mean that if getting housing prices back up to their previous levels is an aim, then getting the banks to "function" won't pull prices back to the old unsustainable levels.

Furthermore, a second major problem was that whatever the source (home equity loans, credit card debt etc.), Americans were going into excessive debt for unnecessary consumption. People have gotten the message, and they're responding in two rational ways: 1) no longer buying shit they don't really need and 2) paying down their debts. Both of these processes involve capital formation (long-term good) and the contraction of sections of the economy geared towards consumption (long-term good, but painful in the short term). So this aspect of the present down-turn won't be solved by Timmy bailing out his irresponsible buddies at great expense to the Treasury.

So, there's the pessimistic view of the big toxic binge. We'll have to see how it pans out. And as for investing on the basis of Keyser's analysis - well, Keyser wouldn't invest on the basis of his views, so act accordingly!