Month: April 2021

Headline of the Day

Will “Goldman Penis Envy” Crash the Economy Again?

Matt Taibbi

The point of his article is that there are a lot of actors in Wall Street like Lehman, who are small enough that they feel that they have to massively over-leverage to compete with the Vampire Squid, but large enough to crash the system.

“We called it ‘Goldman Penis Envy,’” says Lawrence McDonald, former Lehman trader and author of A Colossal Failure of Common Sense. In telling the Gelband story, he explains that Fuld and Gregory were so desperate to beat out Goldman and become the richest men on Wall Street, they chased every bad deal at the peak of the speculative bubble.

“These tertiary financial institutions, in order to win business away from the big players, they have to continually juice their offerings, offer more leverage, more goodies,” says McDonald. “Dick and Joe, they wanted to do these banking deals, to steal Goldman’s business by offering more.”

He’s suggesting that the collapse of Archegos Capital Management is a taste of things to come.

He’s probably right.

Adventures in Google™ Adsense™

I don’t pay a whole bunch of the attention that Google™ Adsense™ serves on my blog, but occasionally,I see somethng truly odd:

I don’t understand how Google™ Adsense™, given the enormous amount of data that they have on me, would think that I care one whit about intestinal parasites in horses.

Please note: once again, that I do not vet, nor do I endorse any ad that appears on my site, and I reserve the right to mock both the ads that appear on my site, as well as the advertisers.

Also, please note, this should be in no way construed as an inducement or a request for my reader(s) to click on any ad that they would not otherwise be inclined to investigate further. This would be a violation of the terms of service for Google Adsense.

Deep Thought

Only Psychopaths and True Believers Are Willing to Put Up with the Bullshit in Politics, Because There Are More Psychopaths Than True Believers, So the Psychopaths Make the Rules.

It was a throw away line by me at the Stellar Parthenon BBS, in a more general discussion of dysfunctional politics, but it was well received, so I thought that I would share it here.

Biden’s Speech

I didn’t watch it, I prefer to read the transcript.

The only thing close to the surprise was his pre-K childcare/education proposals, which are a good idea from both a policy and a political standpoint.

On the other hand, he is the first President who I can bear to listen to in at least 20 years.

I Could Walk There

Magnificent Desolation

Less than 5 miles from my house, there are exposed chunks of the mantle, at Soldiers Delight.

Because of the unique chemistry of the area, very low calcium and very high magnesium in the soil, we have what can be called a, “Barrens”.

Standing among patches of muddy snow on the outskirts of Baltimore, Maryland, I bent down to pick up a piece of the planet that should have been hidden miles below my feet.

On that chilly February day, I was out with a pair of geologists to see an exposed section of Earth’s mantle. While this layer of rock is usually found between the planet’s crust and core, a segment peeks out of the scrubby Maryland forest, offering scientists a rare chance to study Earth’s innards up close.

ven more intriguing, the rock’s unusual chemical makeup suggests that this piece of mantle, along with chunks of lower crust scattered around Baltimore, was once part of the seafloor of a now-vanished ocean.

Over the roughly 490 million years since their formation, these hunks of Earth were smashed by shifting tectonic plates and broiled by searing hot fluids rushing through cracks, altering both their composition and sheen. Mantle rock is generally full of sparkly green crystals of the mineral olivine, but the rock in my hand was surprisingly unremarkable to look at: mottled yellow-brown stone occasionally flecked with black.

“Those rocks have had a tough life,” says George Guice, a mineralogist at the Smithsonian’s National Museum of Natural History.

Because of this geologic clobbering, scientists have struggled for more than a century to determine the precise origins of this series of rocks. Now, Guice and his colleagues have applied a fresh eye and state-of-the-art chemical analyses to the set of rocky exposures in Baltimore. Their work shows that the seemingly bland series of stones once lurked underneath the ancient Iapetus Ocean. 

More than half a billion years ago, this ocean spanned some 3,000 to 5,000 miles, cutting through what is now the United States’ eastern seaboard. Much of the land where the Appalachian mountains now stand was on one side of the ocean, and parts of the modern East Coast were on the other.

This is wicked cool.

Did Not Expect This

It should come as no surprise that the Department of Justice planned to indict all 4 officers involved in George Floyd’s murder on Civil Rights charges

What does surprise me is that the DoJ planned to arrest Derek Chauvin in the court house in the event of a not-guilty verdict or a mistrial.

Leading up to Derek Chauvin’s murder trial, Justice Department officials had spent months gathering evidence to indict the ex-Minneapolis police officer on federal police brutality charges, but they feared the publicity frenzy could disrupt the state’s case.

So they came up with a contingency plan: If Chauvin were found not guilty on all counts or the case ended in a mistrial, they would arrest him at the courthouse, according to sources familiar with the planning discussions.

(emphasis mine)

These folks were sh%$ting their pants over the possibility that a bigot on the jury would blow everything up.

A Stopped Clock Moment

The 2nd worst Democrat in the Senate, Joe Manchin, has announced his support for IP waivers for generic Covid vaccines.

Of course, this might have something to do with his Kid’s business, as Heather Bresch probably still has outstanding stock options with the now a part of  Upjohn, Mylan.

Mylan is/was a generic drug manufacturer :

Sen. Joe Manchin expressed support for the World Trade Organization proposal to temporarily suspend enforcement of patent and intellectual property enforcement for Covid-19 medical treatments.

The waiver request, led by India and South Africa and backed by a coalition of countries, would allow more widespread global production and distribution of generic coronavirus vaccines, tests, and treatments.

Asked about the waiver proposal on Thursday, Manchin said it sounded like a good idea.

“I’ve always been a supporter of generics coming on,” said Manchin, speaking to The Intercept on Capitol Hill.

I really don’t care what his motivation is, it lends a some “Centrist” cred to the effort to place limits on the reach of IP.

The West Virginia Democrat referenced the fact that the U.S. government financed the research, development, and domestic deployment of coronavirus vaccines. He noted that the drug companies “shouldn’t” generate profits from a product sponsored by taxpayers.

This qualifier applies to every major pharmaceutical development over the past few decades.

Big pharma has devolved into an orgy of rent-seeking.  (Which seems to be my theme for tonight)

I See the Problem

 Look at this graph:

It might not look like much, but it shows how our economy has been taken over  by rent seekers.

IP, which only makes money to the degree that it is subsidized through government action, has increased by a factor of 5.

Even considering the rise in software as a product, it’s clear that an increasing portion of our economy has been diverted to unproductive rent seeking.

It’s a drag on our economy, and contributes to inequality.

Their Tears Will Salt My Soup

When I see a headline like this:

Richest Americans Face Biden’s Tax Hike With Anger, Denial, Grief

I smile.

It seems that many of these folks, who were born on 3rd base and thought that they had hit a triple, are so personally offended to be made pay their fair share.

They are losing their sh%$ over the lower tax rate for capital gains going away.

They keep saying things like, “Over-taxing success is un-American.”

Oh, you poor delicate snowflake.  Your subsidy is going away, and your feelings are hurt.

F%$# you with Cheney’s dick.

“Insanely Cheap,” Huh?

It turns out that photovoltaic solar energy has gone from one of the most expensive electricity sources to one of the cheapest in the the past few years.

Rather unsurprisingly, there has been no such drop in the cost of nuclear power. 

Increasingly, fossil fuel generators are not competitive, which should help with our climate change problem:

In the year 2000, the International Energy Agency (IEA) made a prediction that would come back to haunt it: by 2020, the world would have installed a grand total of 18 gigawatts of photovoltaic solar capacity. Seven years later, the forecast would be proven spectacularly wrong when roughly 18 gigawatts of solar capacity were installed in a single year alone.


“When I got this job in 2005, I thought maybe one day solar will supply 1% of the world’s electricity. Now it’s 3%. Our official forecast is that it will be 23% by 2050, but that’s completely underestimated,” Chase says.

“We’ve got to the point where solar is the cheapest source of energy in the world in most places. This means we’ve been trying to model a situation where the grid looks totally different today.”


“The International Energy Agency now says solar is providing the cheapest energy the world has ever seen. But we’re headed towards a future of insanely cheap energy.

“Inanely cheap energy.”

I like the sound of that.

Lock Him UP!! Lock Him UP!! Lock Him UP!!

The FBI just raided Rudolph Giuliani’s apartment in connection with his unregistered lobbying for the Ukraine.

Federal investigators on Wednesday seized cellphones and computers from Rudolph W. Giuliani, the former mayor of New York City who became President Donald J. Trump’s personal lawyer, stepping up a criminal investigation into Mr. Giuliani’s dealings in Ukraine, three people with knowledge of the investigation said.

F.B.I. agents executed search warrants around 6 a.m. at Mr. Giuliani’s apartment on Madison Avenue and his Park Avenue office in Manhattan, carting away the electronic devices, Mr. Giuliani confirmed in a statement.

The execution of search warrants is an extraordinary action for prosecutors to take against a lawyer, let alone a lawyer for a former president. The move marked a major development in the long-running investigation into Mr. Giuliani, which examines some of the same people and conduct that were at the center of Mr. Trump’s first impeachment trial.


The investigative actions on Wednesday were expansive, with agents also serving a grand jury subpoena on Mr. Giuliani’s executive assistant, two people with knowledge of the matter said.

One of the warrants for Mr. Giuliani’s devices indicated that the federal investigators were searching for communications between him and several Ukrainian officials, including the former president, Petro Poroshenko, and two former prosecutors who had helped Mr. Giuliani collect information about the Bidens in Ukraine, one of the people said.

F.B.I. agents also executed a search warrant on Wednesday morning at the Washington-area home of Victoria Toensing, a lawyer close to Mr. Giuliani who had dealings with several Ukrainians involved in the hunt for information on the Bidens, according to people with knowledge of that warrant. The warrant was for her cellphone.


The federal authorities have largely focused on whether Mr. Giuliani illegally lobbied the Trump administration in 2019 on behalf of Ukrainian officials and oligarchs, who were helping Mr. Giuliani’s dirt-digging campaign. At the time, Mr. Biden was a leading contender for the Democratic presidential nomination.

The United States attorney’s office in Manhattan and the F.B.I. had sought for months to secure Justice Department approval to request search warrants for Mr. Giuliani’s phones and electronic devices.

And William Barr almost certainly corruptly intervened to quash those subpoenas while he was still Attorney General

Even more than Giuliani, Barr needs to face consequences for his actions, because the Attorney General of the United States of America needs to meet a higher standard.

The culture of impunity in Washington, DC needs to end.


Unleash the Free Market

New: This is a stunning chart.

The amount it costs to provide health care to people with employer insurance rises steadily with age.

Then, people turn 65 and go on Medicare, and the cost of health care drops precipitously. @jcubanski

— Larry Levitt (@larry_levitt) April 27, 2021

This graph explains how the American healthacre system is failing.

If the market worked, healthcare costs would continue to increase, but they don’t.

Referring to the linked article, here are the money quotes:

  • Average health care spending per person per month for enrollees ages 60-64 in large employer plans ($1,061) is 38% higher than average monthly spending for traditional Medicare beneficiaries ages 65-69 ($770) (Figure 1). This comparison understates the savings that could be realized by shifting 60-64 year olds to Medicare, since one would expect 65-69 year olds to have roughly 20-25% higher spending, because health needs rise with age.
  • Average monthly health care spending for large employer plan enrollees ages 60-64 is similar to that of traditional Medicare beneficiaries in their early 70s, who tend to use more health care services than people in the younger age cohort.

New Amazon Union Drive in Staten Island

What the song says

Following the union election loss at the Amazon Bessemer, Alabama warehouse, a union drive has been started at their Staten Island facility.

Hopefully, the union should learn lessons from what happened in Bessemer.

Specifically, don’t run a “Hot shop” effort, contact people out of work, and get in management’s face from the start of the campaign:

In some ways, Amazon workers’ more than yearlong struggle for adequate COVID-19 protections and against corporate retaliation at the company’s Staten Island facility in New York City helped pave the way for this month’s unionization attempt at the Bessemer, Alabama, warehouse.

Now, as the Retail, Wholesale, and Department Store Union (RWDSU) seeks a second election through the National Labor Relations Board (NLRB), filing official objections Friday charging Amazon with engaging in illegal interference to defeat the union, Staten Island “JFK8” warehouse workers with The Congress of Essential Workers (TCOEW) tell Truthout they aren’t deterred by the outcome. Rather, their on-the-ground experiences in Alabama, where the unionization effort gained national attention but ultimately failed, have taught them hard lessons that will inform their own approach to unionizing JFK8.


TCOEW organizers say one thing they’ve learned is to take a slower, more cautious approach in order to build enough internal support within the large warehouse for an independent union. “We’re just trying to get all the pieces in order so that we do it effectively rather than just rushing into it,” Palmer says.

JFK8 has several advantages over Bessemer, they say. For one thing, the warehouse has been around longer, and TCOEW organizers have more direct experience at the facility and a good reputation and influence among the workforce. Moreover, New York is a union-friendly state.

Please, make Jeff Bezos’ life a living hell. 

Also, pass the PRO act.  It is good policy and good politics.

This is a Feature, Not a Bug

Given the education policies of Obama Administration, and its support for the most rapacious of the chrter school looters, it should be no surprise that  Seth Andrew, former, “Senior advisor and superintendent-in-residence at the U.S. Department of Education, ” and , “enior advisor in the Office of Educational Technology,” was charged with stealing from the charter school that he founded.

It is a perfect metaphor for the increasingly corrupt and increasingly segregated world of  charter schools:

A former senior adviser in the Obama administration was arrested Tuesday on charges that he stole more than $200,000 from a network of charter schools that he founded and used the money to get a lower interest rate on a mortgage for a Manhattan apartment, federal prosecutors said.

The founder, Seth Andrew, 42, is accused of taking money from bank accounts controlled by Democracy Prep Public Schools, which teaches mostly low-income students of color in New York and other states, and using it for the purchase of a $2 million apartment, prosecutors said.

Mr. Andrew is charged with one count each of wire fraud, money laundering and making a false statement to a bank. The first two charges both carry a maximum sentence of 20 years in prison, and the third carries a maximum sentence of 30 years in prison, according to a statement on Tuesday from Audrey Strauss, the U.S. attorney for the Southern District of New York, and William F. Sweeney Jr., the assistant director-in-charge of the New York field office of the Federal Bureau of Investigation.

“Today Andrew himself is learning one of life’s most basic lessons — what doesn’t belong to you is not yours for the taking,” Mr. Sweeney said in the statement.

Don’t you know the first rule of charter schools, “The only crime is to get caught.”

This guy got caught.

Poor Messaging

Yale academics have written a study showing that Democratic Party anti-racism messaging harmed the party politically.

Obviously, some of the this can be ascribed to the racism of a portion of the electorate, but there is also the issue that anti-racism messaging has been offered as an alternative to basic issues of social justice, labor rights, and inequality.

That’s why Hillary Clinton’s, “Basket of Deplorables,” quote was so damaging.

The subtext was, “If you did not have the talent and initiative to get a post-graduate degree at an elite institution, screw you.”

The Democratic Party establishment (There is no Democratic Party establishment) has completely eschewed issues of socioeconomic class, because they are creatures of the top 1%, and racial reductionist statements allow them to check the various “social justice” text box while continue to serve the agenda of the economic elites.

The is the exact opposite of the answer that Jesse Jackson gave during his 1988 Presidential campaign when he was asked, “How you are going to get the support of the white steelworker?” and he replied, “By making him aware he has more in common with the black steel workers by being a worker, than with the boss by being white.”

Bernie Sanders message in 2016 and 2020 was very similar, and (thankfully) Biden appears to be governing more toward the Jackson end of the Democratic Party ideological spectrum than he is toward the Clinton/Obama side of the spectrum, even if he did not campaign that way:

Beginning about a decade ago, the Democratic Party went through two important changes related to racism. The first is that the backlash against Barack Obama made far more white liberals aware of how deeply racial resentment inspired American conservatism. (Black people had by and large realized this all along.)

The second is that the party, which in previous years had painstakingly avoided the impression its agenda was mainly designed to help minorities, began emphasizing this very point. That change occurred in 2016, when Hillary Clinton started infusing her rhetoric with conscious appeals to racial equity. And it continued in 2020 — even though Joe Biden employed less race-conscious rhetoric than his more progressive rivals, he still cast some of his plans as explicitly anti-racist.

But is it working? Yale political scientists Micah English and Josh Kalla have found that adding explicitly race-conscious ideas to Democratic messages reduces their support. English and Kalla’s experiment borrows real-world messages from Democratic politicians and tests them with both a race-conscious component and a mix of race and class messaging. In either instance, telling subjects that a proposal would reduce racial inequity makes them less likely to support it:


Bigotry is evil, and it needs to be fought on every level, but using anti-racist virtue signaling as an alternative to meaningful change in a profoundly dysfunctional society, ends up harming both the progressive project and the ability to fight racism, because it reduces every government action to a zero sum game where the only determinant is ethnicity.

It’s the Fraud, Stupid

woah exhibit 16. more Facebook docs quietly unsealed yesterday – it gets worse. A full, damning senior execs’ email thread (CFO, COO) unsealed. Facebook slowed unsealings in this fraud case and spun it as “cherrypicking.”
Top marketing exec, Carolyn Everson, weighs in here. /1

— Jason Kint (@jason_kint) April 25, 2021

It’s Called Fraud

As I have noted a few times, any in depth examination of Facebook would reveal systematic fraud

Recently revealed emails uncovered in the fraud lawsuit against the social media network show Facebook was deeply aware that it was providing false information to advertisers, which seems to be a slam-dunk case of fraud.

Both Mark Zuckerberg or Sheryl Sandburg are famously “Hands On”, and this is at the core of their business.

They knew that they were defrauding advertisers, and they took their money anyway:

Carolyn Everson, one of Facebook’s most senior advertising executives, said the company had to “prepare for the worst” over claims that it overstated the potential reach of its advertisements, according to newly released court filings.

The world’s largest social network has been fighting a class-action lawsuit in California since 2018 over claims that its figure for its “potential reach”, which told advertisers how many people saw their ads, included duplicate and fake accounts.

Facebook has argued that the numbers were only estimates and that advertisers are charged for actual clicks and impressions, rather than for the potential reach of an ad.

But according to filings in the lawsuit that were unredacted over the weekend, Everson, the vice-president of Facebook’s global business group, wrote an email in 2017 that said the metric “clearly impacted [advertisers’] planning”.

“We are going to get really criticized for that (and justifiably so),” she said. “If we overstated how many actual real people we have in certain demos, there is no question that impacted budget allocations. We have to prepare for the worst here.”


The lawsuit, which was filed in northern California in 2018 by a small-business owner, alleges that Facebook executives knew the potential reach figure was “misleading” and took no action to correct it in order to “preserve its own bottom line”.

It points to research showing Facebook had suggested potential reach in certain US states and demographics that was greater than the actual populations in those geographies.
A Financial Times investigation in 2019 found similar discrepancies in Facebook’s ads manager, an online tool to help advertisers build campaigns, even though the company made some changes to its potential reach definition earlier that year.

They knew that the metrics were complete crap, and they tried to bury the information and continued to use the bad data to get paid.

Break out the cuffs, Ponch.

From the Department of About F%$#ing Time

It looks like members of Congress are getting sick and tired of skyrocketing operational costs and fiscal obfuscation by the Department of Defense, and will be pushing back against any increase in acquisition.

Unfortunately, the excessive costs of the program has been baked into the program, with the DoD signing off a model that is clearly intended to maximize rent seeking by Lockheed-Martin: (Paid subscription required)

In response to new delays to the F-35 fighter program, senior House Democrats are threatening to limit aircraft production and end the practice of adding funding for aircraft the Pentagon never requested.

The laundry list of program problems includes cost overruns, a large engine backlog at the depots, funding cuts to an already temperamental predictive maintenance system and delays to essential upgrades.

“If this program continues to fail to significantly control and reduce actual projected sustainment costs, we may need to invest in other affordable programs and backfill an operational shortfall of potentially over 800 tactical fighters,” Rep. Donald Norcross (D-N.J.), House Armed Services Committee (HASC) tactical air and land forces subcommittee chairman, said during a hearing on the F-35 program.


Now that Democrats control the Senate, Garamendi and Norcross may turn the tide and prevent lawmakers from increasing the F-35 quantity in future budget requests. During the fiscal 2021 budget cycle, the HASC failed to convince the other defense committees not to add extra F-35s.


F-35 Program Executive Officer Lt. Gen. Eric Fick, agrees with Abba’s assessment. Delays in delivering required support equipment and technical data, along with the increased work scope for F135 power module repairs, are driving the depot shortfalls, he said.

The Government Accountability Office (GAO) acknowledges that the Pentagon is taking steps to increase depot repair capacity for the F135 power module, but the GAO says the number of capable aircraft will remain an issue in the near term.


Along with those delays, the cost of the engine is growing. The increase, likely 3% for the 15th production lot, is the result of Turkey being removed from the program after Turkish President Recep Tayyip Erdogan opted to purchase the Russian-manufactured S-400 anti-aircraft weapon system.


Meanwhile, the F-35’s logistics system is experiencing yet another round of upheaval. The Pentagon was in the process of transitioning its Autonomic Logistics Information System (ALIS) to a new cloud-based network, the Operational Data Integrated Network (ODIN), by 2022. But the Pentagon has directed a “strategic pause” for the move to ODIN because of a 42% funding cut in fiscal 2021.


Other delays plaguing the program include the slowdown of Technology Refresh 3 (TR-3) and Block 4 development. Lockheed Martin waived $60 million in fees because of the delays to TR-3, the hardware providing the F-35 additive processing power, memory and open-systems architecture. The company says the delays were caused by supplier challenges related to the spread of the novel coronavirus.

Lockheed knows that they have the DoD, and particularly the USAF by the short hairs, and the “Mistake-Jet” continues to eat the operational capabilities of the USAF. 

The tail, now controlled by the contractors, is devouring the teeth.