|
Written by L. M. Lloyd
|
|
Friday, 20 May 2011 05:35 |
|
Ok, I've been doing a lot of research on the financial sector, and what caused the financial collapse a couple years ago, and I think there is something I need to explain, because people seem to have a fundamental misunderstanding about what really happened, and what caused it. Now, this is all pretty complicated, so to try and make it clear, I'm instead going to create a hypothetical situation, which illustrates the problem, instead of going into details about Credit Default Swaps, Collateralized Debt Obligations, and all that sort of thing.
So, say you are really hungry, but you don't have any money until payday a week from now. So, you get an idea that you will go to one of those restaurants that will give you the meal on the house, if you can finish their giant steak. Of course, you don't want to get in trouble if you can't finish it, so you ask a friend of yours to loan you the money for the dinner, just for the night, and promise you will give it back to him tomorrow, plus another buck on payday, just for the trouble of loaning you the money. You are pretty sure you can eat the whole steak, at which point the meal will be free, and you can give your friend his money back, and even if you can't the worst that happens, is you pay him back everything on payday. Still, to put his mind at ease, you tell him that if for some reason you can't pay it tomorrow, then you will give him a dollar for every day you don't pay him back. So far, so good, right? Your friend likes the deal, because no matter what, he gets extra money, and if you keep his money longer than you promised, he actually makes more than if you pay it when you say you are going to. As long as you don't lose your job, or welsh on the deal, then everything is good. Nothing too complicated.
So, you go to the restaurant, you eat your meal, and let's say you don't actually finish it, and have to take a little longer paying your friend back. No big deal. You pay him back, and he is happy with the money he got. Normally, this would be the end of it. However, he happens to have a friend who is a natural born trader, who notices that he got a pretty good return on investment, and thinks there has to be a way to turn this into a real revenue stream. So, he starts taking out ads in papers, offering to provide this same service to anyone. He quickly learns that he needs to be careful who he offers to do this for, but on the whole, he makes money at it. Enough money, in fact, that he sets up a company to do this, and starts hiring people. Pretty soon, there are competitors, and several companies vying for this business of making loans to people to cover their meals, for an interest rate. Problem is, there is plenty of demand, after all everybody needs to eat, and everybody is short of cash once in a while, but there are a limited number of people who are a safe-enough bet, that you aren't going to lose your shirt. Because unlike a friend, they have a lot less reason to actually pay the business back. So, all the companies trying to do it, are basically trying to go after the same safe customers.
|
|
Last Updated ( Friday, 20 May 2011 05:46 )
|
|
Read more...
|
|
Written by L. M. Lloyd
|
|
Thursday, 07 April 2011 02:15 |
|
When I was a teenager, and the Soviet Union was still around, I used to regale people with hyperbolic tales of a dystopian future, which I was sure was what lay down the path for America. I would plead with people to recognize the little things, which were the first baby steps toward a society that was the antithesis of everything people said set America apart from the "evil empire" of the USSR. I talked a lot about slippery slopes, and unintended consequences to well meaning laws. I carried predictable trends to absurd extremes, to try and illustrate a point. Yet never did I actually expect those dark scare tactics to be so oddly prophetic. I never actually expected that America would become a country with tens of thousands of state video surveillance cameras at intersection, or where the state would charge you fines for not living a 'healthy-enough lifestyle', or where smoking a cigarette was illegal. Sure, I might have told people they could look forward to a future where they couldn't board a plane, train or bus without presenting their papers, but I didn't actually expect it to happen. I certainly never seriously predicted that America would become a secure Homeland, where citizens were denied the right to travel because their name was on a suspicious persons list, or where women are required to be felt up before they are allowed to get on a plane. Even in my most elaborate Kafkaesque vision, I never expected the state to issue software for handheld computers to aid citizens in informing on their neighbors. I never even imagined that the US would have more of its citizens incarcerated than any other nation on Earth. It never occurred to me that people would be arrested for exercising their first amendment rights without a permit, or that American citizens would only be able to gather, under the watchful eye of armed troops in full body armor. No, I never actually expected the bleak reality of my imagination, to become the world I actually lived in. The reason I never expected it to actually happen, even though I could see the writing on the wall, was because deep down, I really believed that once it became blatant enough for the average American to notice, they wouldn't stand for it. I believed that Americans were, by nature, freedom-loving people, with a healthy mistrust of authority. The very reason for all my dreary prognostications of doom and gloom, was because I honestly believed that if you could just shock people into seeing the disconnect between the rhetoric of freedom, and the developing reality, then they would snap out of it, and choose liberty over oppression. I thought that ingrained in the American psyche, was the idea that it was better for a hundred criminals to go free, than for one innocent man to be imprisoned. I had always taken it as a comforting article of faith, that Americans were the ones who would purposely do the stupid thing they knew was bad for them, rather than submit to to someone telling them they had to do what was good for them. I had never questioned that Americans were the people who would die to protect your right to say the most offensive shit imaginable, no matter how much they hated you for saying it. In my imagination, Americans were the type of people who would go back to a barter economy, before they would stand for businesses reporting their cash transactions to the FBI. In short, I apparently completely misjudged the culture in which I grew up. |
|
Last Updated ( Friday, 08 April 2011 10:43 )
|
|
Read more...
|
|
Written by L. M. Lloyd
|
|
Saturday, 12 June 2010 01:23 |
|
I finally got around to watching Michael Moore's anti-capitalist screed "Capitalism: A Love Story," and it left me unbelievably pissed off! Now, before you jump to any conclusions about what I mean, based on the language I use, let me just explain myself, and save you the trouble of trying to guess. Michael Moore is, first and foremost, a brilliant and successful producer of pure AgitProp, plain and simple. I recognize his work as such, and that is why I rightly call it a screed. Most of the time, I don't agree with Moore's view or point, but I always deeply respect the skill and talent with which his movies are made. The man is a master of getting his view of the world across in an entertaining and evocative manner, and no matter how wrong or right I might think he is, I have to acknowledge the brilliance of his work. None of this has anything to do with my anger, however. I am angry, because for over a decade I have ranted about how this country has become an undemocratic corporate feudal state. I have ranted, but I have also kept an open ear, and mind, as people who, supposedly, know far more than I do about the financial system, have explained to me that my view is naive, uninformed, simplistic, romantic, and just plain wrong. I have always kept at the forefront of my mind, that perhaps I am really not as clever as I think I am. Perhaps my post-punk sensibilities, and peculiar life experience, have left me with a skewed view, which causes me to latch onto statistics that seem to prove my case, yet means something quite different to someone who has more than my, admittedly limited, knowledge of the inner workings of the financial world. Perhaps in my zeal to rage against what I see as one of the greatest injustices in the history of humanity, I lost the perspective to coolly evaluate the motives and actions of the people I excoriate. Maybe, just maybe, I was ascribing evil intent, and a willful subversion of everything I think America once stood for, where there was nothing but business as usual, and the status quo. The reason this angers me, is because in Moore's film, he mentioned a single document. Nothing else in the film really mattered to me, but this one document set my mind on fire. I had to find it, and find it I did. It is called Plutonomy: Buying Luxury, Explaining Global Imbalances, and put quite simply, it is a product of Citigroup Research that not just proves every single argument I have made over the past decade, but glorifies it as a wondrous new opportunity for the rich. More to the point though, and thus the source of my anger, it clearly shows that every single one of the people who has lectured me about my unsophisticated naivete, was either less informed than myself, less intelligent than I am, or purposely attempting to mislead me, knowing full well that some of the brightest minds in the financial world (at least if we are to believe the financial sector model of intelligence, where the biggest earner must be the smartest person in the room), not only had come to the same conclusion I had, but were actively advising clients on how to capitalize on the situation. |
|
Last Updated ( Sunday, 23 January 2011 03:56 )
|
|
Read more...
|
|
Written by L. M. Lloyd
|
|
Friday, 06 November 2009 03:28 |
|
So, a while back I talked about how the very nature of the role of government had changed, and we no longer found ourselves in a democracy, but a corporate feudal state, ruled completely by a fiscal aristocracy. I didn't get much response from that, and no one seems to really believe it has really gotten to that point, so I guess it is time to rouse some rabble. Luckily, all I ever have to do is turn on the news, and I am provided with plenty of grist for the mill. I could go on about the $23 trillion we are giving the Wall Street crowd, but honestly I think people have become so desensitized to massive corporate welfare that numbers like that just cause them to shrug. Their health and well-being though, that is something people still seem to care at least a little about, which is why the latest story so jumps out at me. Now, everyone knows that Swine Flu vaccine is in short supply, but what most people don't know is that the reason your grandmother, child or half the state of California can't get any, is because the big firms on Wall Street are more important than you. Here's how it works. While the government is having a hard time getting enough of the vaccine that they paid to develop for the normal citizenry, and the Center for Disease Control is advising that only those at risk should be vaccinated, Goldman Sachs was given 200 doses, Morgan Stanley received 1,000 doses and Citigroup has received 1,200 doses, before the vaccine had even made it to hospitals! What is even more incredible, is that these doses were given to them by their state government. Of course, everyone has become so inured at this point to the idea that in modern society that you are either rich or you are garbage that I doubt even this will shock some. However, stop and think about this for a moment. Your tax dollars went to fund the development of a vaccine, which by the way is actually owned by a private company, even though you paid for it to be researched, and then when they finally start producing it, they can't keep up with demand. Since they can't keep up with demand, the federal government gives an allotment to each state, with instructions that it only be given to at risk patients. When those doses get to New York, the state government decides that the richest financial institutions are more 'at risk' than the patients of hospitals, pediatricians, and geriatrics specialist, all on your dime. |
|
Last Updated ( Friday, 26 March 2010 11:50 )
|
|
Read more...
|
|
Written by L. M. Lloyd
|
|
Friday, 11 September 2009 11:56 |
|
As I wake up today to a torrent of emails, articles and status updates along the lines of "today we remember the heroes who gave their lives for freedom" or some other such jingoistic crap, I find my self asking if we are really going to buy this Patriot Day® nonsense? Apparently, the answer is yes. So, I guess it falls to me to be the asshole who points out that the the emperor is butt ass naked. Now before you immediately close the page, or start writing that furious email about how I am trampling on the memories of the 'heroes of 9/11' let me assure you, this post will include no conspiracy theories, no kooky attempts to deny the official story, and no denigration of those who tragically died. This is about you and me, not the people who died, or the people who killed them. So on this day, eight years ago, something like 2,993 people died when some planes were purposely flown into a few buildings, and one crashed into the ground. In response to these 2,993 deaths, we passed the Patriot Act, threw any previous concept of civil liberty or privacy out the window, tore up what little remained of the constitution, invaded two countries in a war that continues to this day (and has killed at least 110,000 people), pissed off the world community, destroyed our economy, oh and formed this wonderful day of remembrance we celebrate today, with the almost humorously jingoistic name Patriot Day. What I want to know is, was there anything rational, sane, or even remotely appropriate about our reaction to 2,993 people dying? |
|
Last Updated ( Saturday, 12 June 2010 04:18 )
|
|
Read more...
|
|
|