Thursday, December 24, 2009

Goldman Sachs statement about why it sold short against bundled mortgages it was selling.

They miss the fundamental point- these instruments (and the government programs that licensed but did not regulate them) were based on artificial prosperity and a selling of America at prices based on that illusion. We were (and are) in a deflationary period since 2000; housing and its price inflation and mortgage fraud was based on easy Fed money and sales and application fraud from bottom to top in real estate (customers, sales brokers, mortgage companies, IBankers and Traders), not on anything the markets were doing to create real value increases. 

As Goldman says, selling short was smart and the responsible activity (unless the traders had knowledge of the ongoing fraud- what do you think? I have my opinion on that one...:)).  The real fraud is in the development and sale of the prosperity illusion that led to the short selling opportunity.  The real story is in the application of the illusion strategy across all markets, not just "Synthetic" CDOs.  Wall Street cannot escape that reality with a one page explanation.  It is why the Street's anti-competitive license from Washington must go.  

Time to allow open source technology and information in multiple online trading markets with no regulation and no advantages based on licenses.  Let the participants create and manage the regulatory process (like we do so well online).   If there is fraud, let's be democratic about it and let everyone participate, not just the same old robber barons!

Saturday, December 12, 2009

Arrival of the Trading Class

Like it or not, the last ten years of no productivity followed by the "almost depression" were the start of a new direction for America that mirrors post-Industrial Revolution events in Britain and Germany that resulted in the creation of two tiered societies that function only to reward the "Trading" or Merchant Class.

Riches earned from Trading are the wealth of the Crown in a land where few do much that is good for underprivileged around the World. Protecting its Merchant Class and their ever more sophisticated and risky financial adventures is what England is all about.  In Germany the rise of the Trading Class led to the rise of the Third Reich.

In the US, Obama missed an opportunity to avoid that direction for the US and follow Roosevelt's lead of building and investing in communities and people. Had Obama studied FDR or the other two great Democratic Presidents- Jefferson and Jackson, he would have understood the risk of calamity that serving the Merchant Class brings on a once free society. Jefferson's ardent opposition to Hamilton's financial adventures are a great read for those wanting a quick understanding of this principle.

At a time when Roosevelt would have invested in the poor and created jobs and reigned in financial misadventures, Obama gave us TARP solutions that protect the very markets and people that caused our economic  downturn.  That catastrophic decision sets the direction for the last "American" century and entrenches a Wall Street led "Trading Class" at the helm of all US decisions.

It is ugly and about to get worse.  When the modest recovery stalls, Traders will follow the path they always take when they can no longer rely on the productivity and resources of their own society.  They will look overseas and try to take on wealth rightfully belonging to others.  They and the government they control will renege on financial obligations to other societies as well.  These two paths will require military support.

We are now well positioned in Afghanistan with an army whose imperative is unclear and whose brass has been looking for a path to success.  We must be careful to watch the interests of the Trading Class as it pushes and confuses our President to use that army to support trading programs.  If he wakes up and opposes them with a sharp progressive, populist stance it will be a miracle and maybe America's only chance to avoid real demise, as Obama's successor is likely to be a populist tool of the trading class who can inspire millions of uneducated people to take action directly contrary to their personal interests.

Sound familiar?  It should; that is what happened in Germany after WWI.

Saturday, December 5, 2009

Afghanistan- Why not Kick Ass Quickly and Leave?

Struggling to make sense of more troops in Afghanistan and find myself longing for the articulated, but abandoned Powell doctrine (Colin Powell circa 1992 after correctly turning back on the 'Road to Death' in the first war in Iraq)- only send troops if you intend to unleash their full fury (and accept the result)- bring them home asap and NEVER occupy anything- let the chips fall where may after you leave.  

What scares me about Afghanistan is that we are already occupying, we show no intent to really kickass and we are setting a timetable based on our western desire of a future for Afghanistan. I don't see any prospect for success and that makes me sad for our boys.

I hear this may be part of a grand regional strategy to contain Pakistan and India. I would love to understand that better and think that may be the product of too much Starbucks in the morning, too much Georgetown at night by State Department intellectuals pushing an overused army into its tenth year of war; close to the stretched out and failed war in Viet Nam.

Time to kickass and leave.

Monday, September 21, 2009

Next Agenda Clean Energy Challenge

On Thursday, Sept 17 at the Golden Gate Club at the Presidio in San Francisco, 200 incredibly innovative and brilliant people came together to launch an effort to find a solution or set of solutions that might get the US electric grid onto carbon free energy by 2020.  The proposal was to start a facilitated process that can provide clear direction to a workable solution during the next 6 months!

So what happened? First, some amazing people showed up.  Next, they engaged in a day long process that included talks and lots of breakouts with facilitation at every step of the way to be sure that good ideas, many of them would come out!  And they did.  Next Agenda shot the entire day, all aspects all angles all 200!  Video will show up at the Next Agenda website soon.

The event developed two very important areas of inquiry- technical and social.  On the technical side, there is so much going on it is almost like an avalanche of great ideas.  Two things are clear...not one answer is right and every answer is right.  So, we need a combination of use abatement, new efficiency in development and transportation and new technology for carbon capture and energy production.

On the social side, we need a movement that rivals the anti-war movement in the 1960's or the labor movement of the 1930's.  But this is much harder because by the time we see this "enemy", it will be too late.  So, Next Agenda proposes to use the web like Barack Obama did to get elected and use TV like American Idol does.  Starting when?  As soon as the video from the Presidio is ready to go.

Don't wait. Join Next Agenda now! 

Wednesday, September 9, 2009

Obama Health Care Speech

As always, Obama rocked the House!  The man can speak, no doubt.  He also showed toughness, memorably staring down the Republicans as he called them on their efforts to mislead America on his positions.  All good.

The Plan itself is rock solid, but only if adopted in the form as presented.  Any tweaks and changes may make the whole thing unworkable.  This is signature too complicated legislation.  But this kind of thing has worked in the past- Medicare, Social security, every tax bill.

Lastly, what I missed (and as a Universal Single Payer Health Care advocate, I was looking for it) was whether the Plan will cover people who have no money and no insurance.  I see all kinds of options for people with jobs and money.  Just did not hear this all too important element.

Tuesday, September 8, 2009

A Different Take

Saw Phaedra Ellis-Lamkin, successor to Van Jones at Green for All.  She spoke at the Tides Momentum conference today and shed some light on the Van Jones affair (Van's resignation after being pressed by the idiots at Fox).

Phaedra said:
1. Don't waste any time feeling bad for Van Jones or angry at Fox.
2. Van and Obama got what they wanted.

If you read between Phaedra's lines it is easy to come to a different, more hopeful conclusion from Obama's non-reaction and Jones' quiet departure than that many of us reached over the weekend.

How about this- Obama had/has a master plan with Jones, dating way back to December-

First, bring him in TEMPORARILY to lead the way and show the way on the Green for All provisions. He single handedly won over 100% support from the Black and Hispanic Caucuses which held up the Stimulus Bill for the Green Jobs provisions.

Second, let Jones take the ire of the right wing on the Green jobs issues (a form of communism, acc Fox), deflect it from Obama.

Third, leak some crazy info on Jones to the right wingers and let them lynch our man Van, very publicly.
Then have him resign, get the left all fired up (worked!) and get the right complacent about its ability to push Obama around just before the Health Care fist fight!

Last, put Jones back in the saddle at Green for All where he is most valuable, an incredible populist progressive who can really get shit done!

Far fetched?  I would think so if I had not heard the "top line" from Phaedra.  Makes me a bit more hopeful....

Sunday, September 6, 2009

Obama is a P****!

Obama has allowed the reactionaries to kill Van Jones, perhaps the only real "get it done" progressive populist on his team.  If you missed it, Jones resigned yesterday after coming under fire for remarks about Bush, Glen Beck and others.

The resignation is just the scratch of the surface on this one!  Obama uttered not one protective word to the world about the amazing things Van Jones has accomplished in his career as a civil rights leader and environmentalist; gave him no affirming send off; did not honor this amazing individual in any way.

Even worse is that while he was in the White House they did not use him to make things happen like he did at Green for All!

Jones has proven AUDACITY.  Appears Obama does not even have HOPE.

Embarrassing, shortsighted and weak.

There is very little to say in defense of our WEAK President.  Pathetic.

Saturday, August 29, 2009

Since Wall Street is Now a Casino, We Need a CA Solution for Forming Capital

If you know me well you know I have been preaching about the need to find new ways to form capital ever since Wall Street  abandoned its role of supporting growth in favor of the "Trader's" model during the Internet Crash of 2000.  My view is that this makes Wall Street a Casino and playing in that Casino is a fool's paradise.

Think about it- Wall Street lures in billions through 401K and other consumer and corporate investment programs that are set up to be about buying and holding. They pay their sages to speak to America about the value of long term investing...they hire brokers who spend all of their time telling customers to stay in the market!

Then they build these trading rooms that short every stock the 401K folks are holding as soon as there is any kind of bad news about any stock.  The cool thing (if you are a trader or making profits with traders) is that in this age of information, all one needs to do stay tuned to the computer screen to know who your friends are shorting.  In the old days (think Boesky/Miliken) you had to use the phone and form a conspiracy to get that kind of information and you ended up in jail.

So, what better business to be in?  I have friends making fortunes doing this and God Bless 'em because they are very generous with the millions they make shorting your 401K investment program.

But, if you are like me and your heart and soul and wallet are invested in developing cool new things with entrepreneurs and small companies, you feel a strong need for a capital formation system other than the big casino in NY since it does not help new companies any more.

Ironically those companies in need of growth capital are mostly in CA, so solving this is a CA issue of the first order.

I'll write more on this later, but the essence of the idea is for CA to pass legislation that supports its growth engine and does not rely on Wall Street.  We need to look to Asia and the Mideast for support from countries and organizations that appreciate product and service development and invest carefully for the long haul and based on revenues and revenue driven equity appreciation.

It all starts with the creation of a market and we have that.  It continues with freedom to make deals and minimal restrictions that support careful, deserved liquidity.  My ideas on this next time.

Friday, August 28, 2009

California Independence!

It is time for California to take matters into it own hands.  Again.  And this time for good.

I'll explain.  California is home to the three most important industries in the United States, arguably the only innovative industries developed in the US in the last 75 years- Entertainment, Information Technology and Life Sciences.  The rest of the US rides the waves set off in CA and poorly at that.

US Innovation happens in the Golden State because it is the only place with a 'prove yourself' culture that accepts all people based on what they are thinking and doing rather than where they have been and who they know. That culture saved the US through the Depression and WWII with the emergence of Hollywood Entertainment, the presentation of new ways and places. CA brought the US out of the backward culture of social serfdom and into the opportunities and upbeat outlooks of Camelot, the Sixties, Outdoor Sports and Sunshine- in short a culture of possibility. Later, the economic breakthroughs of  Internet technology and the delivery of new ways of using materials, physics, biology and chemistry saved US in the eighties, nineties and will do so again in this new century.

The East coast is parasitic, sucking on sweet CA success with bloated Government and Wall Street Casinos that add no value and prevent the development of new generations through a culture of entitlement, spendthrift habits and riverboat gambles on old ways of doing things.  Middle and South USA is plain ignorant, an abused sector with no imagination and little understanding of the power of possibility.

So it is up to CA to drag the US out of the economic mire again, but first there is some tie cutting to be done and some reorganization.  Each time we have inspired the world with innovation, the inevitable down cycle has hit US hard because of abuses in the financial sector and incompetence in the government sector.  The latest RECESSION is no exception.  We cannot call CA a center of innovation and intelligence if we continue to allow the thieves and incompetents to drag us down.

175 years ago I'd be calling for secession.  Today we don't have to.  Instead we can innovate and elevate. We innovate by developing a CA based financial system for feeding our engines of innovation- declare our financial independence from Wall Street.  We elevate by delivering a homegrown, progressive, populist, libertarian government that solves CA issues but is agile and intelligent AND comfortable to fade into the background when times are good.  Most importantly, we ignore the US government- yes, pay taxes and observe US laws, but stop counting on the US to do anything that is good and helpful; those categories will only happen in CA, so we must take care of things like health care and the other elements of the social contract.

Big thoughts and challenges I know, but this is easy when compared to doing what Google or Genentech or Tesla are doing.

So, What the Frac!   Let's get this done.  Now!

More on how in the coming days.

Tuesday, August 25, 2009

If you think paying $ to the Middle East to support our oil habits was bad, wait until the #s are in on what the current direction in solar panel conversion will do to us. With the low cost of manufacturing in China driving the market, we are about set to convert- Europe is way ahead of us- but the financial wins are are headed to Beijing.  Check out this article in today's NY Times.

Michael Shellenberger  of the Breakthrough Institute has been warning us of this direction and the need for the US govt. to enable the market for low cost solar and wind technologies with aggressive purchases from US energy providers. It's time to follow this direction.  See below:

Sunday, August 23, 2009

A friend asked my opinion on Obama's Presidency to date.

It is a terrible domestic start:

1. He has not done a single thing to advance the cause of the populist base that elected him.
2. He has been snookered over and again by Wall Street in a very embarrassing way. Worse, the financial result is the strengthening of nonproductive financial institutions and a system that abuses poor and middle class people and enhances a culture of entitlement. His revelling in that culture (trips to NY for a play and Martha's Vineyard) is embarrassing.
3. His health care initiative fails to take a fundamental position (to wit, a premise- government provided health care for everyone not currently covered) and the destruction and likelihood that nothing gets done is reminiscent of the failures of Clinton on this very issue (not surprising given that Clintonites are running the show)
4. He has allowed the conservatives to steal the populist initiative; something that will be hard to recover
5. He has allowed his most potent weapon,, to atrophy, an inexcusable error.

Obama has had some success- stimulus package, Sotomayor, foreign policy- but the high profile failures and lack of understanding who got him elected and not advancing critical initiatives on their behalf is mind boggling.

I hope he wakes up in time, but I am afraid we misunderstood what he meant by Change. We thought he meant to Change some terrible policies and restore the American Dream. Apparently, HE meant to Change the system to a more cordial bipartisan one...he has tried and the other side only views this as weakness and an opportunity.

Obama's need to be liked is crushing his every initiative.

Hopefully his desire to be like Lincoln will allow him to (eventually) be like Lincoln who floundered before he woke up and steamrollered everything in the path of his initiatives. Unfortunately BO does not have a John Hay- strong young patriotic intellectual - around to urge him to do this.