QuickReaction, Tuesday-2

Dell bonds are toxic asset: When I first saw the news about Dell going private I assumed this was just another sad story of how the private equity vultures would loot yet another company, and this time one I care about since I’m a customer. But, no, this is really a story about the banks. Since the Fed is providing free money to the banks and saying, “Go for it, take down any debt you can find with a high rate since we’ve got the risk” this is a terrible deal that could only happen with the free money from the Fed. So all the gamblers can take a wild bet even if it’s 100:1 longshot because it’s not their money. But meanwhile what does any of this have to do with “fixing” Dell? Nothing. As usual it’s just the rearranging of deck chairs on the Titanic that Wall Street loves so much, a zero sum game with nothing of economic value created (though lots is being lost). It’s just playing games with money so a few people can get huge bonuses. But Dell is important. Millions of servers running massive parts of the Internet. Now with HP in the dumps and Dell goes down too! The most important infrastructure of the 21st century and there are no reliable suppliers any more. Do we really want to build all the U.S. IT infrastructure on Lenovo servers with Chinese malware built in? Finance is a disease, it is like the DNA virus, something that only exists because no one has figured out a way to stop it. It is destructive but also inevitable. Privatizing companies is the ultimate virus. The company is sick, so we make it sicker, but strip whatever meat is still left on its bones to make a handful of people rich. We destroy jobs and valuable products all on the altar of “capitalism” which is itself an inherently self-destructive system. But we all suffer just so a few rich people can have another yacht. Now where will I get my next PC? (And don’t tell I don’t need one because I can use a POS tablet instead (I have tablets, nope, won’t do it)). ADDED: As this story has evolved during the day the spin is that Dell needs room to maneuver and it can’t do that as a public company under short-term earnings pressure. Good spin, but really it doesn’t quite add up. What daring moves could they do that would look bad short-term? No, they will loot their future and they don’t want anyone seeing that, esp. the lenders who have been suckered into writing the bad paper on this.

Don’t blame robots: The anemic job growth in the U.S. has the doom-and-gloom set worrying about why we can’t buster a better recovery. Obviously the U.S. labor market is being pounded by many factors, robots being one of them. I actually believe the robots are an issue since from my perspective in the industry I believe 9/11 vastly accelerated robotic AI and now it’s having an impact. But this is a question that takes data and I don’t have any. The article claims that the U.S. is still far behind on the implementation of robotics compared to other economies and therefore robotics is not really the problem. OK, in the absence of any data, I have to accept that. But everyone who looks at jobs continues to see the classical Keynesian issue, not enough macro-demand. Gosh, that’s a hard one. Everybody gets it (except the Fed who still thinks cheap money can fix recessions when it really only leads to stupid Wall Street deals (above)). But why is there a shortage of demand? Simple, consumers have no money. Why don’t they have any money? Well after decades of wealth transfer to the rich and whatever “trickle down” there is happening somewhere else in the world (how many of the rich’s yachts are built here, how many Detroit cars do they buy, even their nicest mansion is somewhere else). The idle rich just take a slice out of every transaction and so they’re reducing the velocity of money. Unless they re-inject that money back into the economy they’re starving the economy. Enter the tax cuts. The rich don’t give their money away, it has to be taken, recycled, and then they get back even more. It’s just like any ecosystem – no recycling, no growth. So blaming robots probably is foolish and I suspect it’s mostly the liberal economists since they can’t accept the idea that it’s impossible to stimulate economies any more since no one wants to accept the truth, that the rich are looting the country and just like private equity they’re making money off failure and death and decay.

New Age woo: If right-wingers are suckers for the right wing entertainment complex (Beck, Rush, Ann, FauxNews) then left wingers are suckers for the New Age woo peddlers, like Deepak. Why does anyone listen to this conman. I guess lefties are just more sad and, unlike Repugs, assume things can be better with just a little woo. Now not everything on this list is stupid – it’s just the woo-ish way so reasonable things are dealt with. And it’s the idea that some list from some bookseller named Deepak is going to do anything for your life. No magic, folks, you’ve got to do it yourself.

Gold from biology: For once it appears a popular press article may have gotten it right. The bacterium extracts gold because soluble gold is toxic to the bacterium and it’s just protecting itself. While only a mention here’s the more scientific paper. Cool, let’s get that gold.

Repug governors should manage their state’s issues, not grab FauxNews headlines: I’m so sick of these stupid governors just trying to get their name in the news to show how they support Repug extremism. Simultaneously various Repug governors have listened to the medical industry constituency (which mostly votes Repug) and heard that denying them a huge new boost in income is insane. Then the governor backs down when hospital owners start calling, both the complain about having the eat the ER costs without the expansion and missing the huge new profits with the expansion. As a blue state resident you should be happy; now you don’t have to be taxed to subsidize Pennsylvania or Nebraska or Louisiana. But if you’re a stockholder in a corporate owner of hospitals in these states you should be outraged. Plus the Pennsylvania governor is wildly unpopular, has done a pile of stupid things and almost certainly will lose his job, so in addition to glory grabbing it’s just more of the nasty revenge politics the Repugs are playing today because they are the stupid party and the public is gradually figuring that out.

I’m sorry Pakistan, I don’t buy it: I can appreciate how insulting it is for another country to come in and start shooting up people in your territory – point taken. But your intelligence service is so preoccupied with India that you end up supporting these guys and messing around in Afghanistan. You kill ‘em first and we won’t have to.

Can the prosecution bust them? I hope they use the tactics they use against the mob, go after the little fish and work their way up. There is ample testimony before the two investigations, plus a huge amount of anecdotal evidence, that analysts were forced to lie about the ratings. Threaten a few of the little fish with jail and maybe they’ll rate out their bosses until you get to somebody to really toss in jail. And perp walk and then toss people in jail, not just pansy-ass fines that won’t touch the people who actually did the deed. Somebody needs to spend some time at Club Fed (even some restraint on their lifestyle, a super-max would be even better) so these guys on Wall Street don’t think the worst can happen is a little embarrassment and slap on the wrist.

Amazon coins: At least somebody is doing something a bit interesting with tablets. Micro-payment schemes have been needed for years. Let’s hope this works. Then maybe Amazon can start badgering content providers to do this. Amazon, for its own selfish reasons, is the only one on the side of the consumer in the whole publishing industry. Their offensive against over-priced textbooks is admirable. But the battle won’t really be won until we reach the point where we rent books, not buy them.


About dmill96

old fat (but now getting trim and fit) guy, who used to create software in Silicon Valley (almost before it was called that), who used to go backpacking and bicycling and cross-country skiing and now geodashes, drives AWD in Wyoming, takes pictures, and writes long blog posts and does xizquvjyk.
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