Saturday, May 12, 2012

What's really scary

I stole the title from Paul Krugman. He's really scary smart, he has a Nobel Prize (and deserves it). If you read his column today, you know what I'm alluding to. In my opinion, it's down to this, maybe some of us survive, or maybe none of us do and giant intelligent cockroaches study our bones. The right-wing makes fun of people with an IQ above room temperature as they edge us closer to extinction. From related news, the worldwide temperature took a dramatic jump upward in the past year, far more the predicted in the worst case scenario of global warming theory. More on this later.

Thursday, May 10, 2012

You could worry about the banks, or not

JP Morgan Chase that is the largest of the monster banks admitted this afternoon in taking 2 billion in losses on “trading” over the past six weeks, and may take “additional losses” of another billion (or more) according to CEO Jamie Dimon. He called it stupid mistakes, I really wish he wasn’t lying.

The thing is that the “trading” wasn’t in stocks, bonds or even oil futures. They were trading in derivatives, perhaps Credit Default Swaps (CDS) but reports are sketchy so far. For CDS contracts to be activated on that scale would require somebody to default on a lot of debt, or at least have their credit rating downgraded. We haven’t heard about anything like that, so where did this come from?

The most likely explanation is that they’ve been inflating the value of their portfolio by churning trillions in derivative contracts based on god knows what. These vampire banks do skim off the economy in general by selling CDS contracts to other people with money to “protect” them from wild swings in the markets, or from the volatility in a particular sector like oil, or the economy in general. These banks are of course the people who are really responsible for the wild swings in the markets they are willing to insure you against.

The scary thing is that JP Morgan was supposed be run by the smart guys who were able to stay above the fray. The thing about crashes is that they usually start with something nobody was expecting, and this could turn out to be the mother of all bank crashes.

If you don’t have your canned goods, why are you still sitting here reading this…. Good, you’re back, something else you really need to get is drinking water, a few gallons of bleach, coffee filters and a shovel. Actually this has nothing to do with the banks, this is about 5th grade science. Remember learning that if you pass a wire through a magnetic field it will generate electricity? Take my word for it, you really did learn that.

When they talk about the all the sun spot activity on the news you might want to pay attention. It seems that the ancients had the right idea about the sun being god, our sun seems to be PO’d at us. (maybe we could sacrifice some Republicans) When the sun goes through an “active” period it throws big chunks of itself out into space. These are multi billion ton gobs of ionized gas many times the size of the earth and when one hits us it produces the so-called Northern Lights. You see our planet’s magnetic field shields us from all this ionized gas and the accompanying radiation.

The problem is that it sometimes throws out really, really big ones, and it seems to be doing that lately and won’t even peak in this cycle until next year. If “the big one” hits us when the earth is turned at the right angle so that charge of the ion cloud and the charge of our earth’s magnetic field line up, this pushes the magnetic field down to ground level. This is where the 5th grade science comes in, we would then have lots of wire passing through a very intense magnetic field as the earth rotates through it at 1000 mph.

This has happened quite a few times over the past century, knocking out localized power grids, but we had a really big one in 1859. The only long line “grid” in those days was the telegraph system, and the show down at the Western Union office was quite spectacular, we almost went back to Pony Express. The National Academy of Sciences estimates that if such an occurrence on the same scale were to happen today, it has the potential of taking out the long line electrical grids of the entire planet.

We’re not talking about just blowing the fuses. The real potential threat is that it could take out all the big substation transformers. It has happened before on a local basis. They estimate the recovery time, depending on how many transformers were actually destroyed from days or weeks to ten years.  (let that sink in) The problem is that these transformers are designed to last decades and there aren’t that many on hand. Nor do we have the ability ramp up production quickly, even if we had electricity. BTW, all of ours are made in China anymore. (strategic planners those Republicans)

The immediate threat to the public would be that many large municipalities don’t have diesel backups for their water systems, they depend on gravity fed tanks to keep things going in an ordinary power outage. Even if the local power plant survives, without substation transformers there is no way to get electricity to the pumps.

This is where the bleach comes in, a couple of drops will sterilize a gallon of pretty much any water, but run it through the coffee filter first to take the chunks out. The shovel? Sewer systems won’t be working either. Also handy for burying the people who drink the bad water. Bet you aren’t worried about the banks anymore.

Wednesday, May 9, 2012

Checkmate, within the Margin of Error

Obama has said his position on Marriage Equality has been evolving, probably not. Public opinion however, has been evolving, as has the demographics. The old, rigid, fearful of gays, generation of voters has been dying off. They’re being replaced by a generation that began voting right after Y2K. Remember the computer panic by that name? It was a real threat, and not just a hoax, but not the end of the world the way the same people who have lately been selling gold made it out to be. (BTW, gold dropped under $1600/oz today, it could be on the way down to $700)

Computers have come along way since Y2K, and they know what you think, literally. Maybe better than you do. Obama’s campaign planners are using computer power that is running algorithms on data sets that were unimagined back when we worried that the year turning over zero would crash the entire world. All the small but trackable moves that Obama’s people have made over the past couple of weeks, and the predictable but also trackable moves that Republicans made in response gave them the numbers they wanted to see.

I know it sounds like voodoo, but it really does work. The computers have a pretty good idea within the margin of error (of course) exactly how many votes are to be gained and lost by the President’s announcement, right down to the city block. They know how many people will be motivated to go out to knock on doors and how big their donations will be. They also know how many Republicans will be affected, as more and more them discover that their own families are rife with gay folk. Just how much does it affect them having a candidate they really don’t like to begin with reflexively behaving like a 19th century bigot.

This whole individual rights thing could even brings Libertarian voters into play. Soundly rejected on all points by the Republicans, they might, or might not vote for Obama (you’d have to ask the Big Computer in Chicago). But, you can bet their potential support for Romney is diminished still further.

Obama making a move on equality this early in the year also gives the far right Republican candidates an advantage in the primaries. If they beat more moderate Republicans (it’s a relative term), it gives an opening for Democrats in the Fall who will be facing off against Republican Taliban candidates.

In case this all seems familiar, Obama worked the very same number on them over Women’s privacy issues, forcing them to respond him in a way he could control. This is where I could use the comparison between chess and checkers. Chess is child’s play for computers. The Republicans have the advantage with billionaires pushing their message, controlling the news feeds and such. The Republicans have the muscle, and their own strength is defeating them. Obama’s people have become skilled at getting the Republicans to promote Obama’s message. All they have to do is get the Republicans to reveal who they (the Republicans) really are in a way that enough people will pay attention to.

The Millennium generation is the largest demographic, even out numbering baby boomers. They are probably the most socially and politically engaged generation since the Progressives of a hundred years ago. Obama is successfully portraying himself as the 21st century candidate they want to support, and the Republicans’ reflexive response to Obama’s moves betray themselves as from 19th century and the enemies of everything the Millenniums care about. I’ll use the old chess analogy anyway, the Republicans will checkmate themselves.