There Is No Plan

Cool it, Cassandra.

So let me get this straight.

The President and a bunch o’ pundits said that if we defaulted on the debt ceiling we would have been downgraded, and cried catastophe whenever they got the chance, with Geithner,  Goldman Sachs’ favorite bagman, leading the chorus of Cassandras.

Putting aside the fact that the debt ceiling was a technicality and that our bills would have continued to be paid over time, we didn’t miss out on the debt ceiling – and we were still downgraded.

So the President’s Debtageddon scenario came to pass.

And what happened?

The markets plummeted – mainly because of some bad economic numbers and the Euro Debt Crisis – and then bounced right up again. Stocks are pretty much where they were. And most importantly – the yield on a 10 year note hit its lowest point in history, as everyone flooded into ‘downgraded’ treasuries.

Moody’s and Fitch’s Rating Agencies ‘shrugged off’ what their buddies at S+Poorhouse decided to do, which is bad news for S+P, who now look like outliers (with the accent on the ‘liars’).

It’s becoming increasingly clear that there would have been no debtageddon, and the President’s use of the threat totally backfired. Read the rest of this entry »

With an accent on the "poors".

Who The Fuck Do You Think You Are!?

Let me get this straight, Moody’s, Fitch’s, Standard and Poors, etc. Back in 2006-8, you were the guys who gave AAA ratings to toxic mortgage junk because you were paid handsomely to do so by the very institutions that, at the same time, were hawking these time-bombs to investors.

Pardon little old me for suggesting that perhaps being paid was – I don’t know – a conflict of interest. That maybe, just maybe, you let the dough go to your heads and chose to make this shit smell good to please the piper. No? Not possible, right?  Clients pay for ‘independent’ advice, right? At the time you rated those securities they were strong and the fundamentals were good, right?  I get it.  I mean, why rate multi-year bonds, you know, over the long term. Silly idea. Silly, silly, silly.

Thereisnoplan is thoroughly convinced. The ratings agencies would clearly never let that new cash smell get in the way of their bona-fides, even if downgrading those ratings on the mortgages securities would mean that the guys holding them would shop around for a better rating to pump the sticker price and your competitors would get rich on your back.  Of course, not!  Never!  Perish the thought! Read the rest of this entry »

The real threat that Google Plus represents for Facebook is not that it’ll outsize it anytime soon, but that it outclasses it in short order. At a billion minus users, Facebook is the internet equivalent of Shanghai (with its puny real life population of thirty million), a shiny, boosterist, creation which is mostly facade (pardon the pun). Google Plus represents something that – in the short term at least seems to have more, dare one say it, integrity. Certainly Facebook’s apparent amorality doesn’t help. It seems too bent on exploiting its users. G+ doesn’t appear to be so brazen.

Last year Myspace was the wrong side of the tracks and FB was the high-rent district. But now the tracks have shifted ever so subtly. Myspace is now the internet version of the municipal dump. FB is the formerly wealthy neighborhood that’s now getting a little seedy at the edges, and G+ is the shiny new district on the hill, full of hope, and definitely less gaudy (i.e. no ads as yet). If Google can maintain the shine on it’s brand upgrade (born of a new cohesion and better leadership), it might just solidify its long term better than anyone could have anticipated.

I’m probably digging myself an even deeper hole here, but hear me out.

Look at the fluctuations in 10 year bond rates in this chart from Krugman’s blog, and note that interest rates on those bonds are at historic lows. Remember, Krugs is always banging on about mythological “bond vigilantes”.  And you have to wonder, if things were so bad in the US, wouldn’t the interest rates on these bonds have spiked by now?

Now consider Bruce Bartlett’s Armageddon scenario if we miss the debt ceiling cut off on August 2.

The bond-rating agencies have repeatedly warned that any failure to pay interest or principal on a Treasury security exactly when due could cause the U.S. credit rating to be downgraded, which would push interest rates up as investors demand higher rates to compensate for the increased risk.

J.P. Morgan recently surveyed its clients and asked how much rates would rise if there was a delay in payments, even a very brief one. Domestic investors thought they would go up by 0.37 percentage points, but foreign buyers — who own close to half the publicly held debt — predicted an increase of more than half a percentage point. Any increase in this range would raise Treasury’s borrowing costs by tens of billions of dollars per year.

Now add in Dean Baker’s analysis that the people who will really get pounded by a market run on crossing the debt ceiling will be Wall Street, and it all adds up to some food for thought to temper the Armageddon scenario.

While the country will still be left standing after a debt default, there is one important sector that will not be standing: Wall Street. A debt default would almost certainly make all the major banks insolvent as they would have to mark down the value of U.S. government debt, which had been held as a completely safe asset. The loss of value would also apply to all the assets backed by the government, such as the mortgage backed securities issued by Fannie Mae and Freddie Mac.

Even when the economy revived, the U.S. financial sector would never hold the same place in the world as it does today. Without the ironclad financial backing of the U.S. government standing behind them, the Wall Street gang could never again be the dominant actor in international financial markets.

In short, Krugman’s chart says interest rates on 10 year bonds fluctuate wildly and are all time lows. Bartlett says that 0.5% would be a decent place to start in determining the price we’d pay for missing the deadline – which seems like a blip on Krugman’s chart, and Baker’s analysis tells us that Wall Street may not like the idea of trashing their own safest assets just because the Government delays a few payments.

Again, I’m a debt ceiling dumbass who don’t know nothing, but I just can’t help thinking that maybe the President is working the debt ceiling card so much the meltdown might just become a self-fulfilling prophecy.

So I ain't book smart, but that don't stop me shootin' my mouth off.

So I just read this and it got me thinking.

Maybe I’m just an economically-challenged idiot, but it seems to Thereisnoplan in all his utter naivite, that the “markets” have spent most of the last 2 years making out like gangbusters while the rest of us just get by if we’re lucky.

And before they doubled their money, they predicted that the housing market was as solid as the triple A mortgage securities they’d all jumped into during the housing boom. We know how well that one went, and yet we still trust the “markets”?

Cut to: we don’t meet the supposed deadline to raise the debt ceiling on August 2, a hitherto technicality, and now the sky is going to fall in, not because America isn’t fundamentally strong, which it is, and not because it’s debt isn’t sustainable because it is, and not because of anything on that day at that hour gets worse, but because the “markets” decide the United States is no longer a good bet.

If that happens, sure, we’re all going straight to hell. America first, followed by Europe and China and Japan and everyone else.  But the people who’ll have to send us there, and suffer the consequences will be – you’ve guessed it – the bond markets, who in their rating agency wisdom that the joint which drives 25% of the world’s GDP is busted no-goodnik that can’t pay its bills.

And what happens then?

Well, them’s what’s in the “markets” with their expensive suits and hand-made shoes lose all their ill-gotten gains of the last two years, as they suck the last shreds of demand out of the world economy by trashing its main generator – here in the good old US of A.

Will they do it?

I dunno, but if I was in the markets with my bespoke shoes and bottles of Cristal at lunchtime, I’d be doing my damnedest to pump up the US economy and keep buying its debt. Because if the Wall Street suits don’t, those bonus checks go bye-bye and it’s 2008 all over again, except way, way, worse.

Now, the “markets” have shown in the past they have all the savvy of a bunch of meerkats on meth, but in the unlikely event that they go a little cold turkey, it’s just possible that maybe, just maybe they’ll be smart enough to jump over the cliff – again.

But then again, they clearly have no plan, so we’re probably fucked for that reason alone. Which is another good reason for the President and Geithner not to whip them into a frenzy by suggesting that a deal has to be done or else.

Like I said, I’m a dunce. Feel free to explain why I’m wrong.

Can't you nerds get anything right?

Ah, the charming uselessness of Google. They promise us the world but can never quite deliver.

Today is supposed to be the great unveiling of the Chromebook, an impressive idea if ever there was one. A simple netbook with a stripped down operating system that does one thing and one thing only – it connects you to Chrome via your Google ID. It boots in seconds, works real fast (because it doesn’t have all the other OS baggage to contend with) and is blessedly free of unwanted features.

There’s only one problem.

Even though today is supposed to be C-Day, you can’t actually see one unless you buy it online via Amazon and Bestbuy.com. Thereisnoplan was so keen on the idea of this wonderfully genericized web-book that I actually arrived at BestBuy in West LA the moment it opened, only to find that nobody knew much about them. There were none in stock, none on sale, no colorful bunting, no knowledgeable nerds in Google t-shirts wowing us with what they could do.

Nothing. Read the rest of this entry »

Make My Day

It’s official. Thereisnoplan has declared Little Taco-Dog Poops a menace to decent society.

The basic problem is simple. Tiny little dark stringy dog poops that nestle in the sidewalk grass. But the real issue goes deeper – indeed right to the heart of civic responsibility. Were the owners of those obnoxious little Yorkies and Chihuahuas just lazy or incapable physically of stooping down to scoop up the poop? Or did they justify that laziness or incapacity by rationalizing that nobody would notice such a tiny stool? Or worse still, did they think that the small size of those poops made them any less of a health hazard? The answer almost certainly has to be one of the above.

In a very small and stringy way, this problem sums up America. “It’s no big deal” says the owner of the dog, proprietor of the plastics factory, or the administration that starts the dumb-ass war.  They figure they’ll get away with it and avoid sieve-like regulation, often with the help of bare-faced lies or hare-brained politics, or both.

That works find until someone steps in the poop.

Or on top of the land mine.

I'm with a bevy of hot babes. Facial Recognition rocks.

It’s your face. Don’t let Facebook tell you otherwise.

Perhaps it was always about creating a big book of people’s faces.  But it certainly seems like Facebook’s latest attempt to control the ‘social graph’ of the entire planet is the ultimate emblem of its profoundly amoral, conscience-free, pursuit-of-profit megalomania. The idea that you can post a picture and that everyone in it is tagged for future ‘sharing purposes’ crosses the line in a way none of its past transgressions has even approached. But like all the others, it’s pretty clever; incremental and insidious, rather than explosive and egregious. As with all efficiently spreading viruses, Facebook is stealthy and surreptitious in it encroachment and colonization. It feeds on that very human social impulse that we all to a greater or lesser extent share (no pun intended).  And as such, its parasitic reach is almost universal. Read the rest of this entry »

I ain't no Commie

Today, Tim Who-Lenty made a stirring speech documenting the glories of trickle-down economics, that wonderful myth put about by the rich and favored, that if only they got richer – so would all the little people. And after he’d jabbed us with that, he swung a nasty upper-cut accusing Obama of waging class warfare.

Let’s put aside the obvious irony of Pawlenty waging class warfare on behalf of the rich while lambasting Obama for waging it – horror of horrors – for the poor, and focus on something else that makes Thereisnoplan really, really sad.

If only it were true. If only Obama really was the class warrior Who-lenty said he was. Read the rest of this entry »

One of the marketing tricks that Wall Street likes to pull these days is that they’re “experts”. The ballooning banks, ratings agency scumbags, and hedge fun hyenas front their operations with learned economists, know-it-all analysts and other sundry eggheads who ponce around on radio and TV just to give the world the impression that their company’s greed is backed up by, you know, hard facts.

Of course, it’s all just marketing BS. 99% of them don’t know shit from shinola.

After the debacle that was the ’08 financial meltdown you’d think we’d have got the message that they’re nothing but pump and dump guys in decent suits. But we haven’t.

Now Thereisnoplan doesn’t pretend to be an expert in IPOs and all that jazz but it seems to me that there’s something decidedly fishy about all these fabulous valuations that are flying around for tech companies these days. Read the rest of this entry »