U.S. Criminal Probe Rattles $2 Trillion Municipal Bond Market
December 9th, 2006Uhh…
Via: Bloomberg:
The first-ever antitrust probe of the municipal bond market is roiling an industry that states and cities depend on to finance everything from garbage trucks to schools.
U.S. Justice Department prosecutors subpoenaed more than a dozen banks and insurers three weeks ago, seizing documents from three brokers in a search for evidence of bid rigging. Lawyers say it’s the biggest criminal investigation of the almost 200- year-old market, where municipalities have more than $2 trillion of debt outstanding.
U.S. Subprime Loans Face Trouble
December 9th, 2006Via: Yahoo:
The failure of a small Californian mortgage lender on Thursrday increased nervousness in the credit derivatives market about the large number of US “subprime” mortgages extended this year.
The cost of insuring against default on securities backed by subprime mortgages rose after Ownit Mortgage Solutions, in which Merrill Lynch has a 15 per cent stake, closed its doors.
Its failure is the latest in a series of ominous developments in the market for subprime mortgages – higher interest loans made to borrowers who are seen as risky because of payment problems or large debt burdens.
There has been a sharp rise in the number of borrowers behind on their payments. The loans are often packaged into securities and sold to investors to help lenders reduce risk.
In recent years, this area has been one of the fastest-growing parts of the market for mortgage-backed bonds. So far in 2006, $437bn of such securities have been issued in the US.
The securities have been big business for investment banks which have been buying up mortgage lenders to ensure a continued supply of loans. Merrill last year bought a stake in Ownit, which made $5.5bn of loans in the first half of 2006. Ownit closed down this week after JPMorgan Chase, its main lender, cut off its funding.
Related: Inside a Wall Street Chop Shop
Cryptogon Reader Contributes $3
December 9th, 2006KB contributed $3 to Cryptogon, and wrote:
Hi there,
Great publications! Keep up the good work. Sorry so little money but I only have $13 to my name at this time. Still trying to find work, since accident…not easy, but you deserve much much more in donations for the brave and informational website you put on here. I hope people with lots of money see this place and help you!
Sincerely, K
Guys, if you like Cryptogon and/or Farmlet, Becky and I appreciate any support you can offer, but if you are facing financial difficulty, please, PLEASE use the money to help yourself. We’ll be here if you feel like helping out later, when times are better for you.
Now, I’ve always believed that when you give, the universe will return the favor back to you many times over. I don’t know if KB can afford to wait for the universe to notice, so I’m going to bounce back $20 in her direction.
Thanks for reading, KB, and for your kind action.
European Union Heading for Soviet Style Dictatorship
December 9th, 2006Via The Brussels Journal:
Vladimir Bukovksy, the 63-year old former Soviet dissident, fears that the European Union is on its way to becoming another Soviet Union. In a speech he delivered in Brussels last week Mr Bukovsky called the EU a “monster†that must be destroyed, the sooner the better, before it develops into a fullfledged totalitarian state.
Orlov: Closing the ‘Collapse Gap’
December 9th, 2006Dmitry Orlov’s, Closing the ‘Collapse Gap’: The USSR Was Better Prepared for Peak Oil than the US, is probably the finest meditation on what America is facing that I have ever read. Orlov stresses themes that are axiomatic on Cryptogon:
It’s not that bad, it’s worse.
Political activism is a joke and a waste of time.
On politicians: Don’t believe them. Don’t fear them. Don’t ask anything of them.
Orlov’s tone and sense of humor reminded me of an old professor of mine. I took a comparative politics class (early 1990s) that was taught by a Russian defector who had worked in Soviet Military Intelligence (GRU) during the 1970s and 1980s. He did not elaborate on how he reached the U.S. or what he did for the U.S. government when he got here…
His summary of the key difference between the U.S. and the Soviet Union:
“Here, you can buy shoes that don’t fall apart by the time you walk out of the store, even though they are made mostly by America’s child slave ‘comrades’ in China. I never run out of cigarettes here, which is very good. I own an automobile, Nissan 280Z! Zoom!” He made a swoosh motion with his hand.
His PhD was in International Relations from a top U.S. university. He spoke Russian, Arabic and English. Obviously, a very smart guy. Where were the references to the “free” and “open” political and economic systems in the West? I don’t remember the exact words, but it was very close to this:
“Sure, I’m free to pay lots of taxes and what do I get in return for these payments? [pause] I’m free to vote. [laughter] But we voted in the Soviet Union, too. American politicians smile more than Russian politicians, but they rip us off in a similar manner. America doesn’t have ‘ministries’ but rather quasi private corporations. Ahhh, ‘capitalism’ I think they’re calling it? Having worked with these corporations, I felt like I was back in the Soviet Union. [uncomfortable laughter] I’m free to talk about these things in America because it’s cheaper to let me do that than to lock me up. Gulags in the Soviet Union were full of dissidents. How many people are in prison in America… Something has gone very wrong with all the freedom here.”
These weren’t the words of someone who longed for his homeland. Far from it. Rather, they represented the sadness of a guy who wound up seeing more similarities between America and the Soviet Union, than differences. They represented the disappointment from seeing the same fascism dressed up with dazzling sideshows and more things to watch on television; “Mostly worthless to the viewer,” he added, “but a more effective propaganda product than the Soviet Union ever managed to produce.” I laughed. Some people looked frightened. Most students didn’t seem to care, one way or the other. If it had been a few years later, the point would have been accentuated by a cell phone chirp, or two.
Dmitry Orlov shows us that the situation is actually much worse.
He makes a convincing argument that the Soviet Union was far better prepared to handle collapse than the U.S. is, or ever could be. I found this interesting because that professor of mine, when asked to comment on the then recent collapse of the Soviet Union, chuckled, “Recent collapse? USSR had been in a state of collapse for twenty years before it was finally admitted at the highest levels. The mob is now overtly in control, whereas it just ran much of the economy before the breakup.” Like Orlov, my professor said that Russians had been improvising, and dealing with black market economies and criminals for decades. It was the only way to survive. When the formal system finally came down, meet the new boss, same as the old boss.
Via: Energy Bulletin:
My talk tonight is about the lack of collapse-preparedness here in the United States. I will compare it with the situation in the Soviet Union, prior to its collapse. The rhetorical device I am going to use is the “Collapse Gap” – to go along with the Nuclear Gap, and the Space Gap, and various other superpower gaps that were fashionable during the Cold War.
Note: At the end of the piece is a comment from someone at Energy Bulletin that says:
Orlov’s cynicism about the possibility of intelligent government action was probably justified in the case of the Soviet Union, but I think it would be a tragic mistake to abandon efforts to change the direction of the U.S. The Soviets had little chance to make democratic institutions work. We do have that chance.
I couldn’t disagree more with this comment. The tragic mistake would be to cling any longer to the same faith based and worthless programs of political activism that have delivered us to the brink of oblivion. I’ve said it repeatedly, and I’ll say it again: The more you keep grasping for glimmers of hope within the political system, the worse off you will be. Get into a situation that eliminates your reliance on luck and minimizes the impact of factors that are completely beyond your control. Do this immediately.
Research Credit: Ran Prieur
Georgia Foreclosures Jump 99%
December 7th, 2006We have just lost cabin pressure.
Via: Atlanta Journal-Constitution:
Hundreds of Georgians lost their homes Tuesday.
The houses, taken from debt-laden homeowners, were sold to bidders on courthouse steps statewide.
The increasingly busy monthly auctions show that not all of the residential market is in decline.
Foreclosures are rising.
More than 115,000 properties across the country were in the foreclosure process in October — up 42 percent from the same month a year earlier, according to RealtyTrac, a California company that tracks foreclosures.
Foreclosures in Georgia are up a stunning 99 percent in the past year.
Survival Acres Continues Sponsorship of Cryptogon
December 7th, 2006Survival Acres has opted to sponsor Cryptogon for another month.
Survival Acres offers a vast selection of dehydrated, freeze dried and bulk storable food. Guys, please take advantage of the opportunity to get prepared (for who knows what?) while supplies are plentiful. Thanks, Survival Acres, for supporting Cryptogon, and making all of these products available to people at such affordable prices.
On The Edge of Blade Runner
December 7th, 2006I couldn’t resist posting this. It’s a documentary that came out in 2000 about Blade Runner, probably my all time favorite film (along with Apocalypse Now, Jacob’s Ladder, Fight Club and Pi). Since Cryptogon probably has a higher percentage of Blade Runner freaks as readers than most other sites, I figured, why not!?
On the Edge of Blade Runner
Channel 4
Research Credit: The Big Picture
America’s Robot Army
December 6th, 2006Recently, I wrote, “In the early battles of the Rise of the Machines, victory will go to the side with the monkey wrenches, not the side with the terminator robots. The bad news? The bad news will be the result of another couple of decades worth of autonomous weapons research and design. You won’t want that thing to knock on your door late at night.”
Well, unless a major crash takes out the present system, get ready to experience “military omniscience.”
Via: New Statesman:
War is about to change, in terrifying ways. America’s next wars, the ones the Pentagon is now planning, will be nothing like the conflicts that have gone before them.
In just a few years, US forces will be able to deal out death, not at the squeeze of a trigger or even the push of a button, but with no human intervention whatsoever. Many fighting soldiers – those GIs in tin hats who are dying two a day in Iraq – will be replaced by machines backed up by surveillance technology so penetrating and pervasive that it is referred to as “military omniscience”. Any Americans involved will be less likely to carry rifles than PlayStation-style consoles and monitors that display simulated streetscapes of the kind familiar to players of Grand Theft Auto – and they may be miles from where the killing takes place.
…
This is no geeky fantasy. Much of the hardware and software already exists and the race to produce the rest is on such a scale that US officials are calling it the “new Manhattan Project”. Hundreds of research projects are under way at American universities and defence companies, backed by billions of dollars, and Donald Rumsfeld’s department of defence is determined to deliver as soon as possible. The momentum is coming not only from the relentless humiliation of US forces at the hands of some determined insurgents on the streets of Baghdad, but also from a realisation in Washington that this is the shape of things to come. Future wars, they believe, will be fought in the dirty, mazy streets of big cities in the “global south”, and if the US is to prevail it needs radically new strategies and equipment.
…
Tether drew this moral: “We need a network, or web, of sensors to better map a city and the activities in it, including inside buildings, to sort adversaries and their equipment from civilians and their equipment, including in crowds, and to spot snipers, suicide bombers or IEDs [improvised explosive devices] . . . This is not just a matter of more and better sensors, but, just as important, the systems needed to make actionable intelligence out of all the data.”
Darpa has a host of projects working to meet those needs, often in surprising ways. One, called Combat Zones That See, aims to scatter across cities thousands of tiny CCTV cameras, each equipped with wireless communication software that will make it possible to link their data and track the movements of every vehicle on the streets. The cameras themselves will not be that different from those found in modern mobile phones.
…
Darpa’s VisiBuilding programme, meanwhile, is making “X-ray eye” sensors that can see through concrete, locating people and weapons inside buildings. And Human ID at a Distance is working on software that can identify individual people from scans of their faces, their manner of walking or even their smell, and then track them anywhere they go.
Closely related to this drive are projects involving compu-ter simulations of urban landscapes and entire cities, which will provide backdrops essential for using the data gathered by cameras and sensors. The biggest is Urban Resolve, a simulated war against a full-scale insurgency in the Indonesian capital, Jakarta, in the year 2015.
…
Gordon Johnson, a team leader on Project Alpha, which is developing robots for the US army, predicts that, if the robot’s gun can return fire automatically and instantly to within a metre of a location from which its sensors have detected a gunshot, it will always kill the person who has fired. “Anyone who would shoot at our forces would die,” says Johnson. “Before he can drop that weapon and run, he’s probably already dead. Well now, these cowards in Baghdad would have to pay with blood and guts every time they shoot at one of our folks. The costs of poker went up significantly. The enemy, are they going to give up blood and guts to kill machines? I’m guessing not.”
U.S. Department of Energy: Concentrator Solar Cell at 40% Efficiency
December 6th, 2006This is a big, BIG deal.
I’ve always thought that: A) They have not one, but several solutions; and B) They’ve had these solutions for decades. When I suggested these things in the past, some of you wrote to me and told me to get my head examined, take off the tinfoil, etc.
Well, how does 40% solar/electric conversion efficiency grab ya!? The efficiency barriers that have stood for decades with solar are now gone. And this is just what They decided to admit to having… as the energy situation is starting to hit the wall. What do They really have?
Via U.S. Department of Energy:
U.S. Department of Energy (DOE) Assistant Secretary for Energy Efficiency and Renewable Energy Alexander Karsner today announced that with DOE funding, a concentrator solar cell produced by Boeing-Spectrolab has recently achieved a world-record conversion efficiency of 40.7 percent, establishing a new milestone in sunlight-to-electricity performance. This breakthrough may lead to systems with an installation cost of only $3 per watt, producing electricity at a cost of 8-10 cents per kilowatt/hour, making solar electricity a more cost-competitive and integral part of our nation’s energy mix.
“Reaching this milestone heralds a great achievement for the Department of Energy and for solar energy engineering worldwide,†Assistant Secretary Karsner said. “We are eager to see this accomplishment translate into the marketplace as soon as possible, which has the potential to help reduce our nation’s reliance on imported oil and increase our energy security.â€
Attaining a 40 percent efficient concentrating solar cell means having another technology pathway for producing cost-effective solar electricity. Almost all of today’s solar cell modules do not concentrate sunlight but use only what the sun produces naturally, what researchers call “one sun insolation,†which achieves an efficiency of 12 to 18 percent. However, by using an optical concentrator, sunlight intensity can be increased, squeezing more electricity out of a single solar cell.
