Top priorities of corrupt Biden administration is not to prevent financial scandals but to try to make sure that the DNC/CIA scam of the century -- the Russia-gate hoax -- will NOT / will NEVER be fully acknowledged.
Team Biden Flogs Russian 'Interference' in U.S. Vote, No Matter What Its Intel Agencies Say
By Paul Sperry, RealClearInvestigations May 07, 2021
In his big speech last week, President Biden complained about “Russia's interference in our elections” but his intelligence community, led by his appointee Avril Haines, right, says there wasn't any.
Team Biden Flogs Russian 'Interference' in U.S. Vote, No Matter What Its Intel Agencies Say | RealClearInvestigations
The Biden administration is misquoting its own intelligence findings on Russia in what some former U.S. intelligence officials say is a subtle but significant effort to continue to delegitimize the Trump presidency.
Dear Ethan, I am so far away of anything "Trumpian" that you can't even imagine -- so you are barking at completely wrong tree.
However, I am equally disgusted by the scam of the century -- Obama-Biden-Hillary concoction of the Russia-gate hoax - the hoax that still continues !! As illustrated by Biden still pushing it - as instructed by his DNC oligarch handlers.
Poor you, Ethan, obviously still don't see and understand this -- now that incompetent and imbecilic Trump is gone -- will DNC and Biden family corruption (Hunter's laptops, Ukraine, China) still remain taboo or not?
“The hysterical Trump-as-despot script was all melodrama, a ploy for profits and ratings, and, most of all, a potent instrument to distract from the neoliberal ideology that gave rise to Trump in the first place by causing so much wreckage. Positing Trump as a grand aberration from U.S. politics and as the prime author of America’s woes — rather than what he was: a perfectly predictable extension of U.S politics and a symptom of preexisting pathologies — enabled those who have so much blood and economic destruction on their hands not only to evade responsibility for what they did, but to rehabilitate themselves as the guardians of freedom and prosperity and, ultimately, catapult themselves back into power. As of January 20, that is exactly where they will reside.” --- Glenn Greenwald on authoritarianism in the US – Dec. 28, 2020
The US administrations are sadistic regimes - irrespective if under Bushes, Obama, Trump, or Biden -- that thrive on the misery of nations. Syria, for example, was once a self-sufficient country -- before America decided (remember 17 years ago !!) that secular socialist Syria needs “democracy and freedom”.
CIA aligned itself “patriotically” with Al Qaeda for regime change -- which country, for years, has been weekly bombing Syria -- without hardly being even mentioned in the US corporate media..... But – there is a “genocide”, this time CIA fabrication is in China – playing all of us like a violin but you, Ethan, probably believe your master's propaganda -- correct? ;-))
Just because you cloak yourself in a bit of copy & pasted Glenn Greenwald's excellent prose, does not imply that his candor and wisdom are thereby absorbed in your screed.
Your rant, which does aptly describe that which you chose to rant about, does not address my query at all. Allow me to try again?
"Might I inquire, of either you or your numerous click-bait fans, as to what this parroting of trumpian BS has to do with Matt's clearly denoted topic?"
Oh, please take note of the fact that I did not capitalize the term "trumpian", it was simply used to characterize an opinion. Would you have been less offended had trollian been used in better stead?
Dear poor Ethan -- "my comments supposedly have nothing to do with Matt Taibbi's subject"...
Although, top priorities of corrupt Biden administration and the corrupt Janet Yellen Treasury Secretary are not to prevent financial scandals --- their TOP priorities are to try to make sure that the DNC/CIA scam of the century -- the Russia-gate hoax -- will NOT / will NEVER be fully acknowledged. Team Biden Still Flogs Russian 'Interference' in U.S. Vote, No Matter What Its Intel Agencies Say -- ;-))
No much difference - except that incompetent and imbecilic Trump is finally gone. Remember he didn't pardon his strongest ally in debunking the scam of the century -- the Russia-gate hoax by Obama-Biden-Hillary -- he didn't pardon Julian Assange.
a 1% War party - with two right wings, DNC and GOP. I repeat that OVER and OVER. We live in a fascist country. You must be new in the group... Best wishes
Both parties are equally corrupt -- ruled by War party oligarchs. Why don't you agitate for freedom and democracy in -- USA? China raised 800 million of its citizens - from periodic mass starvation into middle class -- an unprecedented success -- while DNC and GOP oligarchs essentially eliminated middle class in the US.
"53K US contractors in the Middle East versus -- for 35K troops" !!! What a lucrative business and worth unlimited donations to both DNC and GOP politicians. Highlighting just that "detail" -- tells it all....
A 1%-er War party with two right (DNC and GOP) wings -- gay marriage, abortion, "woke", etc. topics are just distractions to divide 99% of population into "red" and "blue" camps. But brainwashed US citizen agitate "freeing" China and increasing hate of Moslems, Russians, Chinese, Martians - just to avoid thinking about our own beloved country.
Destabilizing China and its New Silk Road (it starts and goes through Xinjiang) is a decade long US objective and action plan. In foreign policy, as many predicted, Biden is worse than Trump -- the US War party is in full swing, including in Ukraine, Syria, China, etc. The US arms industry must have "enemies" -- very profitable, including for US politicians and their "donations" from US arms industry.
Hence -- how about freeing US population from oligarchs' corporatism rule, known in less "polite" expression as - fascism.
Lies and crimes against humanity everywhere -- where is the US anti-War movement? -- The US worsened the suffering of Syrians by backing Jihadist terrorists against them, burning their wheat fields and looting their oil and gas. Now the US wants to “help” the Syrians by suffocating them with brutal sanctions! -- Queues all over Syria for bread and fuel after the US and NATO looted Syria’s oil and burned its wheat. -- All (read ALL) chemical attacks in Syria were staged by CIA in collaboration with Al Qaeda, including “White Helmets” Al Qaeda/CIA theater of horrors. The US is a sadistic regime - under Obama, Trump, and Biden -- that thrives on the misery of nations. Syria, for example, was once a self-sufficient country -- before America decided (remember 17 years ago !!) that secular socialist Syria needs “democracy and freedom”. We should ALL say – No more wars, regime changes and sanctions !! -- loudly and clearly...
Sadly, but incontrovertibly *true ! I have a close friend who went to college as a Microbiology Major. Upon her graduation, she showed me her transcripts. ALL courses in nothing BUT hard sciences. NONE in humanities of *any kind. This was clearly not a "College Education", it was a high-powered *trade school. Nothing more.
Similar to the off-Broadway gigs and "undiscovered artist" Tuesday-night exhibitions of old, the economic justification of the NCAA scholar-athlete cartel has been to aggregate years of metric and market research from undercapitalized properties, i.e. kids working for free, all to the greater benefit of the throwing/kicking industry and associated sports-media commerce thereafter.
In my lifetime it's been hard to ignore how other departments (STEM or not) want to copy the NCAA plantation approach
Academia turned into Hoop Dreams decades ago, in many college departments. I saw it happening with grad student TAs and community college "adjunct professors" that I knew. It's a Star System- with an inside track for nonwhites, women, and LGBTc. Although I understand the rationale for that, and basically support it. The wider context is that even if all white males were to be excluded entirely (which is not the case) in many departments there are still many more candidates for tenure track than there are available jobs, especially given the declining demographics of the youth population providing most of the students.
Not only that, education is a field where Automation has yet to really kick in; the Covid era has given us an inkling of its potential (and its limitations, as well.)
Ironically, a whole lot of low to mid-level STEM courses could probably be taught entirely by machines more cheaply and efficiently than by humans. You'd want humans around for hands-on practical courses and lab sessions. But the math foundation can probably be taught directly by a nice, neat, impassive and impartial AI program. On Youtube. To a class of a million. Who is it that's doing that stuff already? I forgot the name of the person, and his Youtube channel. Brilliant use of the Internet. In contrast to a lot of the other ways it gets used, that make people millionaires and billionaires.
I don't think there's anything wrong with a "high-powered trade school", per se. If that's what it takes to get microbiologists, so be it. No different than HVAC electricians.
But everyone involved in the endeavor needs to own up about it, and stop pretending that they have the REAL degrees, and that humanities and social science courses are merely superfluous fluff.
I fully concur. When they are charging you for a "College Education", potential employers have certain expectations that are no longer being met. By "no humanities", I mean not even the standard bloc of English 101 forward. No English Comp. No Logic 101. They are creating Scientists without training them in the simple arts of Critical Thinking.
I watched this young woman applying for work following graduation. One interviewer asked her, if things got slow in the Biology Lab, whether she was prepared to fill in with some clerical duties. After said interview, (and I am *not making this up) the young lady under discussion with the very expensive degree from Colorado State asked me "What's 'Clerical' " ?
So, I fully agree with your comment above. Let us *send them to "Trade Schools" as an option, but let us then require "Trade Schools" to charge for what they are actually providing.
My only personal caveat is that I would prefer that my personal physicians have had a *full education. But I'm just picky that way.
Yes, I think medicine practiced on humans- or other animals, for that matter- has dimensions missing from lab science. The qualities that make someone a healer are of a different order than mere professional certification.
I do think that there's one reform in the humanity/social science/arts & letters departments of American universities that would provide a massive upgrade: require proficiency in at least one language other than English in order to graduate.
Perhaps my biggest academic regret is that I remain monolingual. In every other nation I can think of (with the possible exception of the UK) that's practically unheard of for a college graduate. In more than few large nations, that incapacity is uncommon even for high school graduates. The US has really been coasting in that regard. It's false security.
I sympathize with your thinking, especially now that we live in *such an International World ! However, that language will not be as useful if we only begin the study at College age. I live in Santa Fe, NM, where we have so many Europeans both visiting and in residence, that some of our Green Interstate Mileage Markers are listed in Kilometers. I am astounded by how well-educated young Europeans are compared to most young Americans.
A young German National woman here speaks *impeccable English. Far better than all but the best educated Americans. However, in Germany, the training in English begins in First Grade and does not end until graduation from High School. Learning their English from the Brits, of course, does give the Germans a lovely British Accent, but you can still hear the "bounce", or rhythm, in their speech that comes from the Native German language cadence.
Only a short time ago, Americans did not perceive a *need to be bi-lingual, much less multi-lingual, because, of course, we can drive 3000 miles coast to coast without *ever hitting a language change, or being stopped and asked for "our papers". We can go North to Canada and still be understood as long as we stay out of the French-Speaking areas of Eastern Canada.
When I first when to Europe, I was stunned at the fact that, what *seemed to be "every Fifty miles" or so to an American, you hit a complete language change, and you used to spend much time at borders presenting your "papers".
It is not uncommon for Europeans to speak as many as five different languages, simply because they are required by their very geography to do so. Good thing that many of the languages are very similar. Spanish, Portuguese, Italian, French and Romanian are all "Regional Dialects" based upon Ancient Roman Latin.
English has a *lot of French based words in the language ever since "William the Conqueror", a French-speaking Norman, invaded and conquered England in 1066. French became the official language of his court, and that French eventually blended with the local Anglo-Saxon, producing modern English.
Now that we *are so International, your point becomes even *more important ! Scientists working on International projects will often speak *only in German during the course of the project. They find that German as a language, suffers the *least from ambiguity and potential for misunderstanding. (That is also the reason that German humor is often *very different from the humor of "other" languages.) ;-D
In fact, there can be *no question that much-improved Public Education is an integral aspect of American Infrastructure.
So 'Right-On!' Matt. You have already compiled and shared so much that is of immediate and long term value to your readers over the years and your ability to parse and dissect Wall Street and its politicians in particular has no doubt saved many from foolish mistakes.
This newest project here on TK reflects your values and abilities to unmask these Wall Street hemorrhoids masquerading as human beings for what they are.
The same goes for the conscienceless marketeers of Russiagate and all of their reckless endangerment of life on this planet solely for their pecuniary and power-quest brand of gainful madness they dish up as fodder for their self-edification.
Keep bringing it!
Thanks a thousand times for keeping it---this American life---real.
I worked in financial services for many decades. The last several years I was a risk officer - principally for our offshore funds, where regulators require a risk officer independent of the investment chain of command. Prior to the financial crisis, there were many straws in the wind. While I can claim no clairvoyance I did consult with the two managers in charge of the funds that invested in mortgage securities. They confirmed that the storm was coming. Their dilemma was their funds needed to be fully invested, so I asked what they were doing to prepare. "Well, we scrutinize each security and avoid the ones with NINJA loans in them." NINJA as in "No Income, No Job, Applications". When the yogurt hit the fan, everyone was affected, but the funds run by these two gentlemen did relatively much better than our competitors.
I am retired now and teach part time in a local business school: a course in Ethics and Regulatory Compliance and one on Risk Management. I use the financial crisis as a major case study and this year spent a lot of time on the Archegos debacle to illustrate some key principles of risk management.
The financial crisis was a product of political corruption and chicanery, bad or nonexistent regulation (the Commodities Futures Trading Modernization Act of 2000 forbade the SEC and CFTC from regulating the Swaps market), disintermediation of risk and the consequent green light for rampant greed.
AIG is a great case study in and of itself. Not only were they selling Credit Default Swaps as hedges for risky securities, they were marketing them to bank - especially some European banks - as a form of regulatory arbitrage. Use our CDS's to improve the risk ranking of your portfolio assets and this will help you with your capital adequacy ratios. So, many banks began "improving" their risk profiles by taking on huge exposures to a single dubious American company. AIG in their frenzy to rake in more profits was dilatory about posting collateral for the deals they were making. When the credit rating agencies and regulators started pulling them up short, the demands for collateral outstanding and additional collateral were enough to threaten bankruptcy. When the regulators sat down to contemplate what to do, the opaqueness of the CDS market left them with no idea of what an AIG bankruptcy would do the global economy. Hence the bailout.
There is a lot wrong with the Dodd Frank bill, but one thing it did do was call for regulation and central clearing of Swaps. Oh, and Archegos and the pickle they got into with Total Return Swaps - well the SEC hasn't gotten around to writing rules for those instruments yet.
Was it political corruption or just good lobbying by industry insiders ? When you follow the money it seems to all end up back in the same place after the bail outs got handed out.
I wonder if it's a play towards a one world currency. Ruining the credibility of this system gives incentive to sell the new system.
There's an established history in the US of business writing and interpreting the regulation that govern their own conduct.
No question the financial crisis (both the most recent and those that proceeded it) showed "political corruption and chicanery," but when those "politicians" like the 75th treasuring secretary Tim Geitner, who later moves to Warburg Pincus, a private equity firm who previously worked as a flunky for Robert Rubin, who himself became the 70th Treasury Secretary after 26 years at Goldman Sachs and after the Clinton administration moved to Citigroup, a company that tanked in 2008 despite Rubin providing political connections.... I mean outstanding leadership, how can you expect the American people to describe the political and the financial as two separate entities?
Our entire government-business system in the US would fall under both "Big Store" and "Ponzi Scheme" on the chart above.
«The “Rumanian box” ended up being a perfect clarifying metaphor for the mortgage securities scam. Originators and banks were taking the mortgages of underemployed, under-credentialed homeowners»
That happened too, but it is a bit of a myth: the real issue was well employed, credentialed middle and upper-middle class people buying as big a chunk of real estate using as much debt as possible in the expectation that it would endlessly rise in price. If a middle class prosperous family can afford a $300,000 house that is expected to zoom in price to $600,000 in under 10 years, why not stretch to buy a $400,000 or a $500,000 house to maximize the gain?
«feeding them into the “machine” of the securitization process (which pooled the mortgages and used a “tranching” process to create different levels of investment products), then spitting them out the other end as securities. In this way, a junk-rated mortgage could be turned into AAA-rated debt.»
This is also a bit inaccurate: because while the eventual crash of the price of middle class houses caused large losses, the total losses in 2008 were much bigger than the fall in price of housing, and that was because Wall Street had created a lot of "synthetic mortgages", that is derivatives, securities indexed by mortgages instead of backed by mortgages, because there was a big demand for securities related to mortgages, in the expectation that given always rising house prices, they were totally safe.
To refer to Matt's "racket key": there was always an element of the Kansas City Shuffle in the mortgage boom of the early 2000s. Some of the borrowers had to have known at some level that what was on offer was too good to be true, either because their income only permitted them to afford the low monthly payment indicated by the opening rate that applied for the first couple of years of the mortgage (i.e., a sum equivalent to the housing costs they were already paying as rent- the bedrock sales pitch was always "Buy and Own for what you currently pay in Rent!"), or because (in the vast majority of cases) the notion of home prices increasing across the board without a "correction" violates ordinary good sense. But the banks- that Cornerstone Institution of American Civilization- were obviously eager to lend the money; so even those borrowers who suspected that the game might be a scam figured it to be a scam where they were accredited partners. So the banks would figure out a way to take care of everything- including the debts of the borrowers- when the bill came due.
Not quite.
It's also practically certain that some of the borrowers were persuaded that the entire game must be legit, despite the obvious tipoffs that it was too good to be true. Because- Banks! The experts of finance were outright advertising no down payment, no closing costs, absurdly easy eligibility requirements...now, would the Banks really do that, if they hadn't concluded that it was sound loan policy? (And don't even give me the nonsense about "Fannie and Freddie"...most of the mortgages with those crazy easy terms were private, and the push to tap into that vulnerable sector of borrowers preceded any FNMA and FHFA involvement.)
As for Collateralized Debt Obligations comprising the bundled securities that provided the grist for Credit Default Swaps and insurance hedges associated with them, the tranche structuring of CDOs turned out to partake of another racket described in the key: Salting. "You think you're buying a gold mine, but actually you're buying an altered dirt sample." It isn't quite that simple in the case of po-mo financial instruments like credit default swaps, which involve buying insurance against the possibility that the gold mine might not be as secure an investment as promised. But the "altered dirt sample" part is relevant. Especially given the nature of credit default swaps:
"...Credit default swaps are also used to structure synthetic collateralized debt obligations (CDOs). Instead of owning bonds or loans, a synthetic CDO gets credit exposure to a portfolio of fixed income assets without owning those assets through the use of CDS.[9] CDOs are viewed as complex and opaque financial instruments. An example of a synthetic CDO is Abacus 2007-AC1, which is the subject of the civil suit for fraud brought by the SEC against Goldman Sachs in April 2010.[32] Abacus is a synthetic CDO consisting of credit default swaps referencing a variety of mortgage-backed securities.
Critics assert that naked CDSs should be banned, comparing them to buying fire insurance on your neighbor's house, which creates a huge incentive for arson. Analogizing to the concept of insurable interest, critics say you should not be able to buy a CDS—insurance against default—when you do not own the bond..." https://en.wikipedia.org/wiki/Credit_default_swap
HUD underwrites bank loans for Reverse mortgages. When default occurs banks toss it back to HUD which outsources it to Reverse Mortgage Solutions. My neighborhood has one where guy committed suicide more than year ago. There it sits rotting away and depreciating nearby properties. RMS won't return calls. I got suspicion this will be next big real estate crash
«HUD underwrites bank loans for Reverse mortgages. When default occurs banks toss it back to HUD»
In that there is a hint of critical and little known detail about 2008 and why BH Obama did not prosecute the big fish: in derivatives contracts there is always a reversion clause, where the buyer of the derivative can return the security to the seller for a full 100% refund in case it is tainted by fraud.
Successful fraud prosecutions about mortgage related securities would have triggered a massive reversion of those securities from the gullible buyers to the originators, that is to all the major USA bank, which would have to take all the losses, and the entire USA banking system would have to be liquidated. So they got away with it, and they will do it again and again and again.
All cryptocurrency is a pyramid scheme. There is nothing there except a huge energy burning system polluting the world. Bitcon, cryptocurrency is an out of control self-con.
Not exactly, political economists have a category for that, called "collectibles", that is commodities that have little to intrinsic usefulness and produce nothing, like old stamps, but have a much higher price because for whatever reason some people want to collect them, to hoard them. Gold is one of those "collectibles", because even if it has some usefulness in various industries, almost all gold is held as a collectible, and that is the base for most of its price. If gold were not also a collectible, its price as a metal would be a lot lower.
There is nothing there except a huge energy burning system polluting the world.
Cryptocurrency cannot continue to exist without massive consumption of energy - as in, the amount of energy required to power an average US home for 18 days per transaction. It's vaunted distributed design forces uncontrollable inefficiency. If it is a collectible, it is one that ceases to exist when the music stops. It exists as a software algorithm in code that very few actually understand. Huge amounts have been lost because someone forgot or lost the key to a "wallet". It can be stolen and used by someone while the holder still believes they have it. A strange collectible. I think that's a stretch that snaps.
«A strange collectible. I think that's a stretch that snaps.»
Here "collectible" is just a technical terms that you are unfamiliar with.
«If it is a collectible, it is one that ceases to exist when the music stops. It exists as a software algorithm in code that very few actually understand.»
Actually a bitcoin is a *number* (with a lot of digits). Numbers don't cease to exist when the computers are powered off. The blockchain stops being usable if the computers are powered off, but it does not cease to exist: it can be, and it is permanently recorded. The argument above is based on a series of confusions and misunderstandings...
Consider a comparison with a movie, for example "Titanic" or "Shrek": movies have prices, but they are as immaterial as bitcoins, and producing them also consumes a lot of energy, for both physical and computer generated movies, and displaying them also consumes a lot of energy (travelling to a movie theatre, the Netflix computers).
But they have an intrinsic usefulness as entertainment: movies result in many hours of entertainment. Bitcoins have no usefulness, they are just "tokens", pure collectibles.
And as to collectibles, many collectibles eventually disappear or their value shrinks down a lot, famously cabbage patch dolls, but so many other collectible fads.
"Actually a bitcoin is a *number* (with a lot of digits)." It is a binary representation of the outcome of a hashing algorithm. You can call it a number, but what it is, is a pattern of 1's and 0's, typically represented in hexadecimal form as 64 hex characters, which is 32 bytes.
Yes, a hexadecimal string does not cease to exist as long as the media it is written to exists and it is not erased. But, without the software to interpret it, and communicate with others about it, which "understands" what it is, a bitcoin is no more meaningful than any random string of 64 hexadecimal characters that you type. You literally could not tell the difference.
I think that you are quite making my point. Like the BTC buyer above, you repeat some marketing/PR material about BTC. And you can converse with a lot of other people who now speak the same lingo. But you don't really understand it any better than a 1 year old understands how the cell phone works.
As a BTC buyer, I disagree. Bitcoins are basically answers to math riddles, fitting tokens of value in our information society. Fiat currencies OTOH are always eventually devalued to nothingness. The current asset price inflation makes it clear that devaluation is expected.
Good comment. One added point. The metal coins for currencies will always have some value. The U.S. switched from silver in the 1960s because the amount of silver in, say, a quarter, was worth more than 25 cents. The nickel, copper, manganese and other metals in current coins will have value, even if the dollar doesn't. https://www.usmint.gov/learn/coin-and-medal-programs/coin-specifications
Of course you disagree. You haven't' noticed, apparently, that Bitcoin is only valued in fiat curency terms. Without that, it is meaningless. Yes, I am quite used to talking to the rainbarrel dwellers who plow their fiat money into bitcoin. It's a self-annealing hermetically sealed intaglio of mental pretzels world they live in. They repeat things as you do like, "basically answers to math riddles" as if they actually understood what it is. Mostly incapable of dealing with Bitcoin (or any other crypto) through anything except Coinbase, people like yourself watch the "valuation" in fiat currency, congratulating themselves for eschewing fiat. They don't pay attention to the quite thin trading - proportionally not so far from the $100 million Deli above. They never pay attention to the fact that the whole Bitcoin/Crypto system runs because of the flow of fiat currencies of many nations through the system. The "miners" do it to get fiat currency. The exchanges do it to get fiat currency. The buyers of stock in exchanges do it to make fiat currency. And, these same people, universally (so far) to a man (it's always men) flat out refuse to read anything that might penetrate their dream-world. If one sentence appears that conflicts with their fantasy of "Endless money for me!" they stop reading and say, "Ya lost me at _____." But, one must try to educate even though it's quite like talking to people who imprinted on LSD about the invisible aliens fighting over the earth.
Don't worry, my friend, this is a common attainment that ails you, sharing features with religion. Because it sounds so good, you must continue to believe it. I do recommend you study this paper. It takes thought though, which is clearly not your forte. Your mind appears to have been formed in the forge of soundbites strung together, not logic and critical thinking.
So much anger because of a little speculation. Bitcoin was a brilliant idea and some of us still value brilliance. We also consider cryptography to be more reliable than politics.
Ah. You didn't bother reading. And you won't. I told you so. I wish I was wrong once in a while. Cryptocurrency was and is a castle in the sky, designed by bright, arrogant and utterly ignorant people. It is founded on absurd errors about money, about how a bank works, and commits ludicrous mistakes such as "expansion by deflation".
:-D First, do you put yourself in a league with mainstream economists like Krugman? Is that why you won't touch it? FYI - Krugman thinks bitcoin is ludicrous too. But he thinks it's so ludicrous it's not worth wasting time deconstructing it. Second, many papers, including the famous Black-Scholes paper, are pre-prints, which economists prefer to call "working papers". It's how the field operates. Third, it's true, I only have two peer reviewed economics papers in journals. One is in banking/monetary, the other on MMT issues. Just in case you didn't realize, it is a lot of work to get econ papers published. It's even harder than reading them - which you continue to do - not read. I plug away at a set that interest me. This Bitcoin stuff is a public service.
I can say this I've had good reception at Stanford recently. Oh, well. I don't suppose you care. Do go on.
«There is nothing there except a huge energy burning system»
Prophetically the "Hitchhiker's Guide to the galaxy" series of novels has a very similar scenario: on arriving on Earth the space travelling Golgafrinchan ancestors of humanity adopted leaves as currency and burned down the forest they lived in to make leaves scarce to prevent leaf inflation.
“A year after crashing on prehistoric Earth the Golgafrinchan Colonization Committee have met 573 times. The committee includes the Captain of the 'B' Ark and his two officers, a management consultant, a hairdresser and a marketing girl.
It is very important to the management consultant that the colonization committee maintains order and works along the lines of a traditional committee structure, complete with a chair (rock) and an agenda (agenda rock). His main concern is fiscal policy. Inflation has occurred since they decided to adopt the leaf as legal tender and he suggests that they can effectively revalue the leaf by burning down all the forests.”
Ethereum is moving to proof of stake in the next year or two which, unlike BTC's proof of work, doesn't require the energy consumption of a small nation state.
Bitcoin is crypto-gold & is as pyramid-like as gold is: maybe a little but not much. Meanwhile, Ethereum is crypto-wallstreet & provides real financial services with real utility that, in a decade or two, will replace large swaths of traditional wallstreet with perfectly auditable, transparent, and corruption-free alternatives.
That said, my views on what cryptocurrency really means is that it's fundamentally a social phenomenon. The younger generations have been colonized by the 0.1%, and their assets creation has been collectively torn away. So, it makes sense that they created this as a way to create money for themselves. In the broadest sense, this is similar to what Benjamin Franklin did. Most people are unaware that Benjamin Franklin printed debt instruments for the colonies that acted like money. He provide this to governments that had the power to tax, and they would accept payment for their local taxes in these notes. He and the other founding fathers understood money pretty well, and did it correctly.
In the modern (ie traditional finance) world, all money is indeed debt based. But not all money is debt based, and crypto has much more in common with commodity money than Franklin's debt-based notes. A better analogy would be some new mineral being discovered & people deciding to use it as commodity money.
One of the most outstanding characteristics of crypto on the blockchain, is that it is uniquely designed to enable theft. This is the only security representation a person can hold that can be stolen while you still have it, made off with (spent/transferred), and you may be none the wiser until you try to transfer it. You can still have your flash drives, or whatever, in your safe, and yet the real contents of your vault isn't there. A huge amount of crypto has been stolen already.
This applies to ETH as well. The idea that anybody in their right mind would use such a mechanism to buy and hold stocks, is ludicrous. Only someone blithely ignorant would do so.
Crypto has a very hard, rigid and inflexible security model while fiat's security models is much softer, flexible, and open to a subjective interpretation of the authorities. Each has it's own benefits and downfalls, neither is outright better or worse.
- It's very easy to fraudulently initiate a fiat transfer, all you need is the account number. It's impossible to initiate a crypto transfer without the key.
- If I fraudulently initiate a fiat transfer, authorities can slow that tx down, ask for confirmations and, within a certain time-frame, reverse it. If I fraudulent initiate a crypto transfer, there's nothing anybody can do about it.
- In (digital) fiat theft, given KYC, it's usually pretty easy to find the individual responsible and punish them. In crypto thefts, given no KYC, it's usually impossible to find the individual responsible.
Given an trustworthy authority, fiat is probably safer for most people. Given an untrustworthy authority (eg Venezuela's gov), crypto is probably safer for most people.
I hold nearly 100% of my life savings on Ethereum and feel perfectly safe doing so, despite having a bit of crypto stolen from me back when I was still learning. I've worked in the crypto industry for a few years so I'm grown very familiar with the technical details of safe key storage at this point. See my guide to key storage & digital self-defence for more info :) bohendo.com/opsec
You can have your savings ripped off without knowing about it as well. Some of the banksters really like to draw away attention to their own theft by pointing out the crypto short comings. The MSM likes to make it sound as if crypto is the main source of criminal payment.
Excellent. This is what you're best at, and what no one else does. Really looking forward to this series.
Top priorities of corrupt Biden administration is not to prevent financial scandals but to try to make sure that the DNC/CIA scam of the century -- the Russia-gate hoax -- will NOT / will NEVER be fully acknowledged.
Team Biden Flogs Russian 'Interference' in U.S. Vote, No Matter What Its Intel Agencies Say
By Paul Sperry, RealClearInvestigations May 07, 2021
In his big speech last week, President Biden complained about “Russia's interference in our elections” but his intelligence community, led by his appointee Avril Haines, right, says there wasn't any.
Team Biden Flogs Russian 'Interference' in U.S. Vote, No Matter What Its Intel Agencies Say | RealClearInvestigations
The Biden administration is misquoting its own intelligence findings on Russia in what some former U.S. intelligence officials say is a subtle but significant effort to continue to delegitimize the Trump presidency.
@Boris Petrov on May 8 11AM PCT
Might I inquire, of either you or your numerous click-bait fans, as to what this parroting of trumpian BS has to do with Matt's clearly denoted topic?
As Usual,
EA
Dear Ethan, I am so far away of anything "Trumpian" that you can't even imagine -- so you are barking at completely wrong tree.
However, I am equally disgusted by the scam of the century -- Obama-Biden-Hillary concoction of the Russia-gate hoax - the hoax that still continues !! As illustrated by Biden still pushing it - as instructed by his DNC oligarch handlers.
Poor you, Ethan, obviously still don't see and understand this -- now that incompetent and imbecilic Trump is gone -- will DNC and Biden family corruption (Hunter's laptops, Ukraine, China) still remain taboo or not?
“The hysterical Trump-as-despot script was all melodrama, a ploy for profits and ratings, and, most of all, a potent instrument to distract from the neoliberal ideology that gave rise to Trump in the first place by causing so much wreckage. Positing Trump as a grand aberration from U.S. politics and as the prime author of America’s woes — rather than what he was: a perfectly predictable extension of U.S politics and a symptom of preexisting pathologies — enabled those who have so much blood and economic destruction on their hands not only to evade responsibility for what they did, but to rehabilitate themselves as the guardians of freedom and prosperity and, ultimately, catapult themselves back into power. As of January 20, that is exactly where they will reside.” --- Glenn Greenwald on authoritarianism in the US – Dec. 28, 2020
The US administrations are sadistic regimes - irrespective if under Bushes, Obama, Trump, or Biden -- that thrive on the misery of nations. Syria, for example, was once a self-sufficient country -- before America decided (remember 17 years ago !!) that secular socialist Syria needs “democracy and freedom”.
CIA aligned itself “patriotically” with Al Qaeda for regime change -- which country, for years, has been weekly bombing Syria -- without hardly being even mentioned in the US corporate media..... But – there is a “genocide”, this time CIA fabrication is in China – playing all of us like a violin but you, Ethan, probably believe your master's propaganda -- correct? ;-))
Dear Boris,
Just because you cloak yourself in a bit of copy & pasted Glenn Greenwald's excellent prose, does not imply that his candor and wisdom are thereby absorbed in your screed.
Your rant, which does aptly describe that which you chose to rant about, does not address my query at all. Allow me to try again?
"Might I inquire, of either you or your numerous click-bait fans, as to what this parroting of trumpian BS has to do with Matt's clearly denoted topic?"
Oh, please take note of the fact that I did not capitalize the term "trumpian", it was simply used to characterize an opinion. Would you have been less offended had trollian been used in better stead?
As Usual,
EA
Dear poor Ethan -- "my comments supposedly have nothing to do with Matt Taibbi's subject"...
Although, top priorities of corrupt Biden administration and the corrupt Janet Yellen Treasury Secretary are not to prevent financial scandals --- their TOP priorities are to try to make sure that the DNC/CIA scam of the century -- the Russia-gate hoax -- will NOT / will NEVER be fully acknowledged. Team Biden Still Flogs Russian 'Interference' in U.S. Vote, No Matter What Its Intel Agencies Say -- ;-))
So how is that any different than the last administration Boris ?
No much difference - except that incompetent and imbecilic Trump is finally gone. Remember he didn't pardon his strongest ally in debunking the scam of the century -- the Russia-gate hoax by Obama-Biden-Hillary -- he didn't pardon Julian Assange.
a 1% War party - with two right wings, DNC and GOP. I repeat that OVER and OVER. We live in a fascist country. You must be new in the group... Best wishes
You conveniently "forgot" to mention the equally corrupt RNC AGAIN Boris. I guess whoever hired you to post here didn't do their homework very well.
Both parties are equally corrupt -- ruled by War party oligarchs. Why don't you agitate for freedom and democracy in -- USA? China raised 800 million of its citizens - from periodic mass starvation into middle class -- an unprecedented success -- while DNC and GOP oligarchs essentially eliminated middle class in the US.
"53K US contractors in the Middle East versus -- for 35K troops" !!! What a lucrative business and worth unlimited donations to both DNC and GOP politicians. Highlighting just that "detail" -- tells it all....
A 1%-er War party with two right (DNC and GOP) wings -- gay marriage, abortion, "woke", etc. topics are just distractions to divide 99% of population into "red" and "blue" camps. But brainwashed US citizen agitate "freeing" China and increasing hate of Moslems, Russians, Chinese, Martians - just to avoid thinking about our own beloved country.
Destabilizing China and its New Silk Road (it starts and goes through Xinjiang) is a decade long US objective and action plan. In foreign policy, as many predicted, Biden is worse than Trump -- the US War party is in full swing, including in Ukraine, Syria, China, etc. The US arms industry must have "enemies" -- very profitable, including for US politicians and their "donations" from US arms industry.
Hence -- how about freeing US population from oligarchs' corporatism rule, known in less "polite" expression as - fascism.
Here is a bit on CIA's decade long anti-China strategy and Uyghurs.... for brainwashed who have been "freeing" the Earth with US "democracy and freedom"... https://thegrayzone.com/2021/02/18/us-media-reports-chinese-genocide-relied-on-fraudulent-far-right-researcher/ https://thegrayzone.com/2021/03/17/report-uyghur-genocide-sham-university-neocon-punish-china/ https://thegrayzone.com/2021/03/31/china-uyghur-gun-soldiers-empire/
Lies and crimes against humanity everywhere -- where is the US anti-War movement? -- The US worsened the suffering of Syrians by backing Jihadist terrorists against them, burning their wheat fields and looting their oil and gas. Now the US wants to “help” the Syrians by suffocating them with brutal sanctions! -- Queues all over Syria for bread and fuel after the US and NATO looted Syria’s oil and burned its wheat. -- All (read ALL) chemical attacks in Syria were staged by CIA in collaboration with Al Qaeda, including “White Helmets” Al Qaeda/CIA theater of horrors. The US is a sadistic regime - under Obama, Trump, and Biden -- that thrives on the misery of nations. Syria, for example, was once a self-sufficient country -- before America decided (remember 17 years ago !!) that secular socialist Syria needs “democracy and freedom”. We should ALL say – No more wars, regime changes and sanctions !! -- loudly and clearly...
It doesn't and hasn't mattered what we say for a very long time now when it comes to foreign and economic policy.
It doesn't matter how many times you prove the owners wrong, corrupt, or incompetent either. At least no so far.
On that we fully agree. Socialism is a future for humanity but -- one has to fight for it... ;-))
Any system that does away with the class structure which allows for royal families and covert agencies would be a winner for me.
Humans have not evolved very far when it comes to character. We tend to still worship flim flam artist with loads of money.
Love the graphic, you are doing a great job educating us rubes.
University education has become a hybrid of Big Store, Diploma Mill, and Pig in a Poke.
@Mostly disagreeable
Sadly, but incontrovertibly *true ! I have a close friend who went to college as a Microbiology Major. Upon her graduation, she showed me her transcripts. ALL courses in nothing BUT hard sciences. NONE in humanities of *any kind. This was clearly not a "College Education", it was a high-powered *trade school. Nothing more.
Similar to the off-Broadway gigs and "undiscovered artist" Tuesday-night exhibitions of old, the economic justification of the NCAA scholar-athlete cartel has been to aggregate years of metric and market research from undercapitalized properties, i.e. kids working for free, all to the greater benefit of the throwing/kicking industry and associated sports-media commerce thereafter.
In my lifetime it's been hard to ignore how other departments (STEM or not) want to copy the NCAA plantation approach
Academia turned into Hoop Dreams decades ago, in many college departments. I saw it happening with grad student TAs and community college "adjunct professors" that I knew. It's a Star System- with an inside track for nonwhites, women, and LGBTc. Although I understand the rationale for that, and basically support it. The wider context is that even if all white males were to be excluded entirely (which is not the case) in many departments there are still many more candidates for tenure track than there are available jobs, especially given the declining demographics of the youth population providing most of the students.
Not only that, education is a field where Automation has yet to really kick in; the Covid era has given us an inkling of its potential (and its limitations, as well.)
Ironically, a whole lot of low to mid-level STEM courses could probably be taught entirely by machines more cheaply and efficiently than by humans. You'd want humans around for hands-on practical courses and lab sessions. But the math foundation can probably be taught directly by a nice, neat, impassive and impartial AI program. On Youtube. To a class of a million. Who is it that's doing that stuff already? I forgot the name of the person, and his Youtube channel. Brilliant use of the Internet. In contrast to a lot of the other ways it gets used, that make people millionaires and billionaires.
I don't think there's anything wrong with a "high-powered trade school", per se. If that's what it takes to get microbiologists, so be it. No different than HVAC electricians.
But everyone involved in the endeavor needs to own up about it, and stop pretending that they have the REAL degrees, and that humanities and social science courses are merely superfluous fluff.
@Mascot
I fully concur. When they are charging you for a "College Education", potential employers have certain expectations that are no longer being met. By "no humanities", I mean not even the standard bloc of English 101 forward. No English Comp. No Logic 101. They are creating Scientists without training them in the simple arts of Critical Thinking.
I watched this young woman applying for work following graduation. One interviewer asked her, if things got slow in the Biology Lab, whether she was prepared to fill in with some clerical duties. After said interview, (and I am *not making this up) the young lady under discussion with the very expensive degree from Colorado State asked me "What's 'Clerical' " ?
So, I fully agree with your comment above. Let us *send them to "Trade Schools" as an option, but let us then require "Trade Schools" to charge for what they are actually providing.
My only personal caveat is that I would prefer that my personal physicians have had a *full education. But I'm just picky that way.
Yes, I think medicine practiced on humans- or other animals, for that matter- has dimensions missing from lab science. The qualities that make someone a healer are of a different order than mere professional certification.
@ Mascot
Superlative and incontrovertible observation !
Thank you for that !
I do think that there's one reform in the humanity/social science/arts & letters departments of American universities that would provide a massive upgrade: require proficiency in at least one language other than English in order to graduate.
Perhaps my biggest academic regret is that I remain monolingual. In every other nation I can think of (with the possible exception of the UK) that's practically unheard of for a college graduate. In more than few large nations, that incapacity is uncommon even for high school graduates. The US has really been coasting in that regard. It's false security.
@ Mascot
I sympathize with your thinking, especially now that we live in *such an International World ! However, that language will not be as useful if we only begin the study at College age. I live in Santa Fe, NM, where we have so many Europeans both visiting and in residence, that some of our Green Interstate Mileage Markers are listed in Kilometers. I am astounded by how well-educated young Europeans are compared to most young Americans.
A young German National woman here speaks *impeccable English. Far better than all but the best educated Americans. However, in Germany, the training in English begins in First Grade and does not end until graduation from High School. Learning their English from the Brits, of course, does give the Germans a lovely British Accent, but you can still hear the "bounce", or rhythm, in their speech that comes from the Native German language cadence.
Only a short time ago, Americans did not perceive a *need to be bi-lingual, much less multi-lingual, because, of course, we can drive 3000 miles coast to coast without *ever hitting a language change, or being stopped and asked for "our papers". We can go North to Canada and still be understood as long as we stay out of the French-Speaking areas of Eastern Canada.
When I first when to Europe, I was stunned at the fact that, what *seemed to be "every Fifty miles" or so to an American, you hit a complete language change, and you used to spend much time at borders presenting your "papers".
It is not uncommon for Europeans to speak as many as five different languages, simply because they are required by their very geography to do so. Good thing that many of the languages are very similar. Spanish, Portuguese, Italian, French and Romanian are all "Regional Dialects" based upon Ancient Roman Latin.
English has a *lot of French based words in the language ever since "William the Conqueror", a French-speaking Norman, invaded and conquered England in 1066. French became the official language of his court, and that French eventually blended with the local Anglo-Saxon, producing modern English.
Now that we *are so International, your point becomes even *more important ! Scientists working on International projects will often speak *only in German during the course of the project. They find that German as a language, suffers the *least from ambiguity and potential for misunderstanding. (That is also the reason that German humor is often *very different from the humor of "other" languages.) ;-D
In fact, there can be *no question that much-improved Public Education is an integral aspect of American Infrastructure.
"However, that language will not be as useful if we only begin the study at College age."
That's beyond dispute.
OMG, you're hitting the jackpot with this one.
Your Racket Key is brilliant!
So 'Right-On!' Matt. You have already compiled and shared so much that is of immediate and long term value to your readers over the years and your ability to parse and dissect Wall Street and its politicians in particular has no doubt saved many from foolish mistakes.
This newest project here on TK reflects your values and abilities to unmask these Wall Street hemorrhoids masquerading as human beings for what they are.
The same goes for the conscienceless marketeers of Russiagate and all of their reckless endangerment of life on this planet solely for their pecuniary and power-quest brand of gainful madness they dish up as fodder for their self-edification.
Keep bringing it!
Thanks a thousand times for keeping it---this American life---real.
Re on location reports, any way you could get into those White House press briefings? Might be interesting and funny.
Love this as a feature, Matt. The graphic is really well done, too. Keep it up, hoss!
Golly. The $5 monthly subscrition doesn't include Useful Idiots? Talk about racket of the week..!
LOL :) :)
I worked in financial services for many decades. The last several years I was a risk officer - principally for our offshore funds, where regulators require a risk officer independent of the investment chain of command. Prior to the financial crisis, there were many straws in the wind. While I can claim no clairvoyance I did consult with the two managers in charge of the funds that invested in mortgage securities. They confirmed that the storm was coming. Their dilemma was their funds needed to be fully invested, so I asked what they were doing to prepare. "Well, we scrutinize each security and avoid the ones with NINJA loans in them." NINJA as in "No Income, No Job, Applications". When the yogurt hit the fan, everyone was affected, but the funds run by these two gentlemen did relatively much better than our competitors.
I am retired now and teach part time in a local business school: a course in Ethics and Regulatory Compliance and one on Risk Management. I use the financial crisis as a major case study and this year spent a lot of time on the Archegos debacle to illustrate some key principles of risk management.
The financial crisis was a product of political corruption and chicanery, bad or nonexistent regulation (the Commodities Futures Trading Modernization Act of 2000 forbade the SEC and CFTC from regulating the Swaps market), disintermediation of risk and the consequent green light for rampant greed.
AIG is a great case study in and of itself. Not only were they selling Credit Default Swaps as hedges for risky securities, they were marketing them to bank - especially some European banks - as a form of regulatory arbitrage. Use our CDS's to improve the risk ranking of your portfolio assets and this will help you with your capital adequacy ratios. So, many banks began "improving" their risk profiles by taking on huge exposures to a single dubious American company. AIG in their frenzy to rake in more profits was dilatory about posting collateral for the deals they were making. When the credit rating agencies and regulators started pulling them up short, the demands for collateral outstanding and additional collateral were enough to threaten bankruptcy. When the regulators sat down to contemplate what to do, the opaqueness of the CDS market left them with no idea of what an AIG bankruptcy would do the global economy. Hence the bailout.
There is a lot wrong with the Dodd Frank bill, but one thing it did do was call for regulation and central clearing of Swaps. Oh, and Archegos and the pickle they got into with Total Return Swaps - well the SEC hasn't gotten around to writing rules for those instruments yet.
Was it political corruption or just good lobbying by industry insiders ? When you follow the money it seems to all end up back in the same place after the bail outs got handed out.
I wonder if it's a play towards a one world currency. Ruining the credibility of this system gives incentive to sell the new system.
There's an established history in the US of business writing and interpreting the regulation that govern their own conduct.
No question the financial crisis (both the most recent and those that proceeded it) showed "political corruption and chicanery," but when those "politicians" like the 75th treasuring secretary Tim Geitner, who later moves to Warburg Pincus, a private equity firm who previously worked as a flunky for Robert Rubin, who himself became the 70th Treasury Secretary after 26 years at Goldman Sachs and after the Clinton administration moved to Citigroup, a company that tanked in 2008 despite Rubin providing political connections.... I mean outstanding leadership, how can you expect the American people to describe the political and the financial as two separate entities?
Our entire government-business system in the US would fall under both "Big Store" and "Ponzi Scheme" on the chart above.
@Mark Weinburg
good summary.
@Mark Weinburg on May 8 11:30 AM PCT
Thank you for sharing your informed observations.
Was there some affiliation between AIG and JPMC regarding the creation, marketing and insuring of CDS; or any other similar instruments?
As Usual,
EA
"Racket of the Week" looks good-- I'm sure you'll have no problem finding rackets to cover-- so many rackets, so little time...
«The “Rumanian box” ended up being a perfect clarifying metaphor for the mortgage securities scam. Originators and banks were taking the mortgages of underemployed, under-credentialed homeowners»
That happened too, but it is a bit of a myth: the real issue was well employed, credentialed middle and upper-middle class people buying as big a chunk of real estate using as much debt as possible in the expectation that it would endlessly rise in price. If a middle class prosperous family can afford a $300,000 house that is expected to zoom in price to $600,000 in under 10 years, why not stretch to buy a $400,000 or a $500,000 house to maximize the gain?
«feeding them into the “machine” of the securitization process (which pooled the mortgages and used a “tranching” process to create different levels of investment products), then spitting them out the other end as securities. In this way, a junk-rated mortgage could be turned into AAA-rated debt.»
This is also a bit inaccurate: because while the eventual crash of the price of middle class houses caused large losses, the total losses in 2008 were much bigger than the fall in price of housing, and that was because Wall Street had created a lot of "synthetic mortgages", that is derivatives, securities indexed by mortgages instead of backed by mortgages, because there was a big demand for securities related to mortgages, in the expectation that given always rising house prices, they were totally safe.
To refer to Matt's "racket key": there was always an element of the Kansas City Shuffle in the mortgage boom of the early 2000s. Some of the borrowers had to have known at some level that what was on offer was too good to be true, either because their income only permitted them to afford the low monthly payment indicated by the opening rate that applied for the first couple of years of the mortgage (i.e., a sum equivalent to the housing costs they were already paying as rent- the bedrock sales pitch was always "Buy and Own for what you currently pay in Rent!"), or because (in the vast majority of cases) the notion of home prices increasing across the board without a "correction" violates ordinary good sense. But the banks- that Cornerstone Institution of American Civilization- were obviously eager to lend the money; so even those borrowers who suspected that the game might be a scam figured it to be a scam where they were accredited partners. So the banks would figure out a way to take care of everything- including the debts of the borrowers- when the bill came due.
Not quite.
It's also practically certain that some of the borrowers were persuaded that the entire game must be legit, despite the obvious tipoffs that it was too good to be true. Because- Banks! The experts of finance were outright advertising no down payment, no closing costs, absurdly easy eligibility requirements...now, would the Banks really do that, if they hadn't concluded that it was sound loan policy? (And don't even give me the nonsense about "Fannie and Freddie"...most of the mortgages with those crazy easy terms were private, and the push to tap into that vulnerable sector of borrowers preceded any FNMA and FHFA involvement.)
As for Collateralized Debt Obligations comprising the bundled securities that provided the grist for Credit Default Swaps and insurance hedges associated with them, the tranche structuring of CDOs turned out to partake of another racket described in the key: Salting. "You think you're buying a gold mine, but actually you're buying an altered dirt sample." It isn't quite that simple in the case of po-mo financial instruments like credit default swaps, which involve buying insurance against the possibility that the gold mine might not be as secure an investment as promised. But the "altered dirt sample" part is relevant. Especially given the nature of credit default swaps:
"...Credit default swaps are also used to structure synthetic collateralized debt obligations (CDOs). Instead of owning bonds or loans, a synthetic CDO gets credit exposure to a portfolio of fixed income assets without owning those assets through the use of CDS.[9] CDOs are viewed as complex and opaque financial instruments. An example of a synthetic CDO is Abacus 2007-AC1, which is the subject of the civil suit for fraud brought by the SEC against Goldman Sachs in April 2010.[32] Abacus is a synthetic CDO consisting of credit default swaps referencing a variety of mortgage-backed securities.
Critics assert that naked CDSs should be banned, comparing them to buying fire insurance on your neighbor's house, which creates a huge incentive for arson. Analogizing to the concept of insurable interest, critics say you should not be able to buy a CDS—insurance against default—when you do not own the bond..." https://en.wikipedia.org/wiki/Credit_default_swap
The best account of the elaborate fraud that is American capitalism was penned by Herman Melville in his novel The Confidence Man- His Masquerade.
HUD underwrites bank loans for Reverse mortgages. When default occurs banks toss it back to HUD which outsources it to Reverse Mortgage Solutions. My neighborhood has one where guy committed suicide more than year ago. There it sits rotting away and depreciating nearby properties. RMS won't return calls. I got suspicion this will be next big real estate crash
«HUD underwrites bank loans for Reverse mortgages. When default occurs banks toss it back to HUD»
In that there is a hint of critical and little known detail about 2008 and why BH Obama did not prosecute the big fish: in derivatives contracts there is always a reversion clause, where the buyer of the derivative can return the security to the seller for a full 100% refund in case it is tainted by fraud.
Successful fraud prosecutions about mortgage related securities would have triggered a massive reversion of those securities from the gullible buyers to the originators, that is to all the major USA bank, which would have to take all the losses, and the entire USA banking system would have to be liquidated. So they got away with it, and they will do it again and again and again.
All cryptocurrency is a pyramid scheme. There is nothing there except a huge energy burning system polluting the world. Bitcon, cryptocurrency is an out of control self-con.
«All cryptocurrency is a pyramid scheme»
Not exactly, political economists have a category for that, called "collectibles", that is commodities that have little to intrinsic usefulness and produce nothing, like old stamps, but have a much higher price because for whatever reason some people want to collect them, to hoard them. Gold is one of those "collectibles", because even if it has some usefulness in various industries, almost all gold is held as a collectible, and that is the base for most of its price. If gold were not also a collectible, its price as a metal would be a lot lower.
There is nothing there except a huge energy burning system polluting the world.
Cryptocurrency cannot continue to exist without massive consumption of energy - as in, the amount of energy required to power an average US home for 18 days per transaction. It's vaunted distributed design forces uncontrollable inefficiency. If it is a collectible, it is one that ceases to exist when the music stops. It exists as a software algorithm in code that very few actually understand. Huge amounts have been lost because someone forgot or lost the key to a "wallet". It can be stolen and used by someone while the holder still believes they have it. A strange collectible. I think that's a stretch that snaps.
«A strange collectible. I think that's a stretch that snaps.»
Here "collectible" is just a technical terms that you are unfamiliar with.
«If it is a collectible, it is one that ceases to exist when the music stops. It exists as a software algorithm in code that very few actually understand.»
Actually a bitcoin is a *number* (with a lot of digits). Numbers don't cease to exist when the computers are powered off. The blockchain stops being usable if the computers are powered off, but it does not cease to exist: it can be, and it is permanently recorded. The argument above is based on a series of confusions and misunderstandings...
Consider a comparison with a movie, for example "Titanic" or "Shrek": movies have prices, but they are as immaterial as bitcoins, and producing them also consumes a lot of energy, for both physical and computer generated movies, and displaying them also consumes a lot of energy (travelling to a movie theatre, the Netflix computers).
But they have an intrinsic usefulness as entertainment: movies result in many hours of entertainment. Bitcoins have no usefulness, they are just "tokens", pure collectibles.
And as to collectibles, many collectibles eventually disappear or their value shrinks down a lot, famously cabbage patch dolls, but so many other collectible fads.
Beanie babies. Tulip bulbs... Indeed.
"Actually a bitcoin is a *number* (with a lot of digits)." It is a binary representation of the outcome of a hashing algorithm. You can call it a number, but what it is, is a pattern of 1's and 0's, typically represented in hexadecimal form as 64 hex characters, which is 32 bytes.
https://www.blockchain.com/btc/block/0000000000000000000268b6790309099831fbae2b865d085732de4e57448706
Yes, a hexadecimal string does not cease to exist as long as the media it is written to exists and it is not erased. But, without the software to interpret it, and communicate with others about it, which "understands" what it is, a bitcoin is no more meaningful than any random string of 64 hexadecimal characters that you type. You literally could not tell the difference.
I think that you are quite making my point. Like the BTC buyer above, you repeat some marketing/PR material about BTC. And you can converse with a lot of other people who now speak the same lingo. But you don't really understand it any better than a 1 year old understands how the cell phone works.
I will agree to call it an uncollectible. ;-)
Michael Hudson rips crypto quite effectively in this May 5, 2021 interview on The Gray Zone:
"Economist Michael Hudson on new cold war, Super Imperialism, China & Russia, dedollarization"
https://www.youtube.com/watch?v=S-ZGdAi8Ji0&t=2169s
As a BTC buyer, I disagree. Bitcoins are basically answers to math riddles, fitting tokens of value in our information society. Fiat currencies OTOH are always eventually devalued to nothingness. The current asset price inflation makes it clear that devaluation is expected.
Good comment. One added point. The metal coins for currencies will always have some value. The U.S. switched from silver in the 1960s because the amount of silver in, say, a quarter, was worth more than 25 cents. The nickel, copper, manganese and other metals in current coins will have value, even if the dollar doesn't. https://www.usmint.gov/learn/coin-and-medal-programs/coin-specifications
This estimates the value of the metal content:
https://www.coinflation.com/coins/basemetal_calc.php
Of course you disagree. You haven't' noticed, apparently, that Bitcoin is only valued in fiat curency terms. Without that, it is meaningless. Yes, I am quite used to talking to the rainbarrel dwellers who plow their fiat money into bitcoin. It's a self-annealing hermetically sealed intaglio of mental pretzels world they live in. They repeat things as you do like, "basically answers to math riddles" as if they actually understood what it is. Mostly incapable of dealing with Bitcoin (or any other crypto) through anything except Coinbase, people like yourself watch the "valuation" in fiat currency, congratulating themselves for eschewing fiat. They don't pay attention to the quite thin trading - proportionally not so far from the $100 million Deli above. They never pay attention to the fact that the whole Bitcoin/Crypto system runs because of the flow of fiat currencies of many nations through the system. The "miners" do it to get fiat currency. The exchanges do it to get fiat currency. The buyers of stock in exchanges do it to make fiat currency. And, these same people, universally (so far) to a man (it's always men) flat out refuse to read anything that might penetrate their dream-world. If one sentence appears that conflicts with their fantasy of "Endless money for me!" they stop reading and say, "Ya lost me at _____." But, one must try to educate even though it's quite like talking to people who imprinted on LSD about the invisible aliens fighting over the earth.
Don't worry, my friend, this is a common attainment that ails you, sharing features with religion. Because it sounds so good, you must continue to believe it. I do recommend you study this paper. It takes thought though, which is clearly not your forte. Your mind appears to have been formed in the forge of soundbites strung together, not logic and critical thinking.
https://arxiv.org/pdf/1312.2048 The False Premises and Promises of Bitcoin.
" even though it's quite like talking to people who imprinted on LSD about the invisible aliens fighting over the earth."
So you're saying it ain't so ? I knew that dose looked iffy............
So much anger because of a little speculation. Bitcoin was a brilliant idea and some of us still value brilliance. We also consider cryptography to be more reliable than politics.
Ah. You didn't bother reading. And you won't. I told you so. I wish I was wrong once in a while. Cryptocurrency was and is a castle in the sky, designed by bright, arrogant and utterly ignorant people. It is founded on absurd errors about money, about how a bank works, and commits ludicrous mistakes such as "expansion by deflation".
Funny that mainstream economists, the issuers of fake Nobel Prizes, won't even touch the pre-print.
:-D First, do you put yourself in a league with mainstream economists like Krugman? Is that why you won't touch it? FYI - Krugman thinks bitcoin is ludicrous too. But he thinks it's so ludicrous it's not worth wasting time deconstructing it. Second, many papers, including the famous Black-Scholes paper, are pre-prints, which economists prefer to call "working papers". It's how the field operates. Third, it's true, I only have two peer reviewed economics papers in journals. One is in banking/monetary, the other on MMT issues. Just in case you didn't realize, it is a lot of work to get econ papers published. It's even harder than reading them - which you continue to do - not read. I plug away at a set that interest me. This Bitcoin stuff is a public service.
I can say this I've had good reception at Stanford recently. Oh, well. I don't suppose you care. Do go on.
Hmmm. I suppose the American dollar is completely legit??
«There is nothing there except a huge energy burning system»
Prophetically the "Hitchhiker's Guide to the galaxy" series of novels has a very similar scenario: on arriving on Earth the space travelling Golgafrinchan ancestors of humanity adopted leaves as currency and burned down the forest they lived in to make leaves scarce to prevent leaf inflation.
https://www.bbc.co.uk/programmes/profiles/2gHNc8pLB70dCKlF72qmT1x/golgafrinchans
“A year after crashing on prehistoric Earth the Golgafrinchan Colonization Committee have met 573 times. The committee includes the Captain of the 'B' Ark and his two officers, a management consultant, a hairdresser and a marketing girl.
It is very important to the management consultant that the colonization committee maintains order and works along the lines of a traditional committee structure, complete with a chair (rock) and an agenda (agenda rock). His main concern is fiscal policy. Inflation has occurred since they decided to adopt the leaf as legal tender and he suggests that they can effectively revalue the leaf by burning down all the forests.”
Ethereum is moving to proof of stake in the next year or two which, unlike BTC's proof of work, doesn't require the energy consumption of a small nation state.
Bitcoin is crypto-gold & is as pyramid-like as gold is: maybe a little but not much. Meanwhile, Ethereum is crypto-wallstreet & provides real financial services with real utility that, in a decade or two, will replace large swaths of traditional wallstreet with perfectly auditable, transparent, and corruption-free alternatives.
That said, my views on what cryptocurrency really means is that it's fundamentally a social phenomenon. The younger generations have been colonized by the 0.1%, and their assets creation has been collectively torn away. So, it makes sense that they created this as a way to create money for themselves. In the broadest sense, this is similar to what Benjamin Franklin did. Most people are unaware that Benjamin Franklin printed debt instruments for the colonies that acted like money. He provide this to governments that had the power to tax, and they would accept payment for their local taxes in these notes. He and the other founding fathers understood money pretty well, and did it correctly.
https://brianhanley.medium.com/the-real-meaning-of-cryptocurrency-is-the-same-one-that-drove-ben-franklin-to-print-money-for-the-7dd2aae9cd28
In the modern (ie traditional finance) world, all money is indeed debt based. But not all money is debt based, and crypto has much more in common with commodity money than Franklin's debt-based notes. A better analogy would be some new mineral being discovered & people deciding to use it as commodity money.
One of the most outstanding characteristics of crypto on the blockchain, is that it is uniquely designed to enable theft. This is the only security representation a person can hold that can be stolen while you still have it, made off with (spent/transferred), and you may be none the wiser until you try to transfer it. You can still have your flash drives, or whatever, in your safe, and yet the real contents of your vault isn't there. A huge amount of crypto has been stolen already.
This applies to ETH as well. The idea that anybody in their right mind would use such a mechanism to buy and hold stocks, is ludicrous. Only someone blithely ignorant would do so.
Crypto has a very hard, rigid and inflexible security model while fiat's security models is much softer, flexible, and open to a subjective interpretation of the authorities. Each has it's own benefits and downfalls, neither is outright better or worse.
- It's very easy to fraudulently initiate a fiat transfer, all you need is the account number. It's impossible to initiate a crypto transfer without the key.
- If I fraudulently initiate a fiat transfer, authorities can slow that tx down, ask for confirmations and, within a certain time-frame, reverse it. If I fraudulent initiate a crypto transfer, there's nothing anybody can do about it.
- In (digital) fiat theft, given KYC, it's usually pretty easy to find the individual responsible and punish them. In crypto thefts, given no KYC, it's usually impossible to find the individual responsible.
Given an trustworthy authority, fiat is probably safer for most people. Given an untrustworthy authority (eg Venezuela's gov), crypto is probably safer for most people.
I hold nearly 100% of my life savings on Ethereum and feel perfectly safe doing so, despite having a bit of crypto stolen from me back when I was still learning. I've worked in the crypto industry for a few years so I'm grown very familiar with the technical details of safe key storage at this point. See my guide to key storage & digital self-defence for more info :) bohendo.com/opsec
You can have your savings ripped off without knowing about it as well. Some of the banksters really like to draw away attention to their own theft by pointing out the crypto short comings. The MSM likes to make it sound as if crypto is the main source of criminal payment.