Friday, November 28, 2008

Zeitgeist

I was totally verklempt, dahlink...

A friend asked me to watch Zeitgeist, the viral YouTube documentary of sorts; I did and here's my response.

Well, I watched most of it while cooking yesterday...

Now, first a bit more background on moi, since it has bearing on my comments that follow: I have to say that, more than being "Churched" or having "Religion" as folks seem to like to say, I'd define myself as being a spiritual person with a fairly active spiritual life. I chose the Episcopal Church, FYI, not because my family has been Episcopal since the 17th Century, but because in my life it has been a bastion of acceptance - We acknowledge almost all baptized Christians, acknowledge that Buddhism, or Islam or most anything else likely has merit as a theology, and the faith has been tolerant if not downright progressive on women's ordination, non-white ordination, and acceptance of gay and lesbian folk - Until recently, that is - I don't know that you're aware of the watershed split the church is experiencing right now, but it's pretty nasty and very discouraging - While our parish stays true to the national church, the acrimony and politics has almost driven me away a few times now..

Anyway, I say all that because I am an open minded spiritual being before I am a Christian: If that sounds odd, it simply means to me that I don't claim to know answers and am open to other interpretations and beliefs... The so called legs of Episcopalianism are tradition, reason, and scripture; this implies a need for an individual to interpret their own faith, rather than letting someone else do it for them. My take on it says we are called to study, reason, and acknowledge the past for what it was to the best of our ability. As to whether or not there is a higher power, I just can't even fathom how there could not be - To much complexity, too amazing, too wow for there not to be, for my heart and mind...

Now, all that said, here's where the flick struck me: Over all, this was done by folks with a burning agenda who fundamentally believe in conspiracy theories: That's not to say that there aren't conspiracies, but it does say to me that the persons who produced this is VERY convinced of such in many facets of life today, to the point of being somewhat paranoid about 'em, for my mind... Personally, I think we're always called on to be healthy skeptics and to say no to what shouldn't be allowed - I think you and everyone else knows what I think of government and big business - Frankly, many churches could be lumped in the same vein there - Many of them are here to line their pockets, exert control and maintain their existences, just like the worst of the former entities I just mentioned...

Now, first to the faith shredding section and the contention of the film that all modern religions are basically just derivations of astrologically based mythology from earlier days, well... Yes and no - Let's face it, the heavens are powerful, and as long as man has been about to ponder what's there, the perceived vastness and majesty of space has held quite a sway over us. Secondly, I might go so far as to say that if there are other beings out there, (I find it quite arrogant and unlikely to assume that there are not, frankly), if we've gotten anything right, mathematics might just be the universal language, the tower of babel if you will. To posit that all this stuff comes about simply because of base astrological predilections among the majority of humans, and specifically among those who founded modern religion is not only arrogant, it's as obfuscatory a point as the one they're trying to make about religion: I mean, yeah, I'm aware of all the parallels that are laid out equating Christianity with earlier religions, and frankly, my response is, "No shit, Sherlock?" Of course our current organized faith has roots in what came before; good lord, if it didn't, I'd question whether anyone has any of it right or ever did! I mean, duh, guys...

As for the Jesus 'myth', well, here's my take: I believe there was indeed a prophet who said and did some amazing things back when. I don't think anybody can "prove" much more than that, or disprove it convincingly either, frankly. Now Jesus may indeed have been the Son of God; for all I know he may not have been - But the guy had something going for him, big time, and the fact that it survives to this day speaks loudly to that; to be able to instill in folks for thousands of years the basic tenet of, "Love one another as I have loved you," and for caring for those least fortunate, that';s powerful and a good thing, regardless of the source. If more folks took to heart such a message and acted on it, where would the world be now? What'd Ronnie Rayguns say back in '80, "Are you better off now than you were?" Honestly, with the dogma stripped away and the words taken to heart, I can't fathom how anyone could find fault in the beauty of that advise... Bottom line to me is this; myth or reality and no matter who and what he was, his message has survived pretty well, despite the ministrations of the Catholic church and tens of thousands of other posers over the millennium: Oh, and remember, he warned us about that shit too, ya know...

The flick's summary quote in this regard; "Christianity, along with all other theistic belief systems empowers those who know the truth, but uses the myth to manipulate and control societies. It reduces human responsibility to the effect that "God" controls everything, and in turn awful crimes can be justified in the name of Divine Pursuit. The religious myth is the most powerful device ever created, and serves as the psychological soil upon which other myths can flourish." Again, yes and no - As for the first line, I would contend that good faiths, (And yes, there are some whether these guys like it or not), seek for everyone to know the truth, and to use it for the good of humankind and our planet; by the same token, there are also undoubtedly those who steer as this quote suggests and they are without question rotten. Ok, second point; have horrid things been done and continue to be done in the name of faith? yes, no doubt, but I'd tell ya that is the fault of the weakness of humans and our shitty predilections whenever we incorporate to any significant degree, more so than it is the fault of faith itself. Fact is, the more I am around even a good church day to day, and see how much politics and subterfuge and ego and arrogance and greed and power seeking rear their ugly heads, the less I like churches, too! My Senior Warden told me about her Uncle, who was a Senior Warden before her, in her home town: He went to his Doc who examined him and said "Frank, you're stressed, what's stressing you?" Her uncle told the doc it was his job as Senior Warden. The doc's response was classic; "First off, change churches, and secondly, don't get there until Sunday service, and when that's done, don't go back until the next Sunday." Sage advice, that... In all fairness, and in direct response to that statement, though, my church has never said that God controls everything and that we are helpless; on the contrary, it has always spoken of the need for people to develop a personal relationship with God, and that we are in fact called to perceive God's will in our lives and act accordingly - We must help ourselves and one another and our planet, or nothing will get done... Doesn't sound way manipulative to me... As for that third quote, well, that line may be true, but in the context in which it is delivered, it is presumptuous, derivative and quite simply out of context...

Part 2, dealing with 9-11, ahhh, OK... Well, I am not a conspiracy theorist, but I have read and thought about this quite a bit, and I have to tell you that I would not be surprised in the least if the majority of assertions herein were not true to some degree. In fact, I've read quite a bit more of the technical, tactical and strategic considerations of that day, and it stinks, to be honest - Something was rotten in Denmark, I just don't know what...

Part III, sheesh - Well, these targets are some of my favorites, but I gotta tell ya, if you held a Conspiracy Whack-o-Meter up to the film makers, it would peg its needle way out there in left field... I've read more military history than anything, and more 20th century than any other age - To the majority of contentions made therein, I say Bullshit with a capital B! Thins happen and folks respond to take advantage, no doubt about it, but anyone trying to build a case showing that the U.S. wanted in to WW II saw three other conspirators on the grassy knoll in Dallas... Now the SPP does indeed stink to high heaven, but it reeks of profit making;, the whole third section tries to make something exist that doesn't, for my mind - The fact is, government and big business have always been in it to make huge profits for themselves and have always been whores in that regard; they care not where and how their dough comes as long as it keeps coming, this we know. But to try and make a National Treasure style Grand Conspiracy plan outta the whole thing strikes me like the hunt for a Unified Field Theory; yes, it would be cool, and maybe it does exist, but don't hold your breath or the next generation's waitin' for it to come to light, OK?

So overall, I gotta say this - The flick strikes me like a Michael Moore work; some good stuff, thought provoking, interesting, coupled with great silliness and off the deep end supposition.

In the end run, zealots of any stripe make me nervous, 'cause they's still first and foremost zealots, ya know?

Tuesday, November 25, 2008

Fun with Leveraged Hedge Funds

My Pop was an Economist; Harvard and MIT trained, and taught there in fact… Purty prestigious, huh? So, that said, it is telling to me that Dad, when explaining things economic, he used pretty plain English. His Doctoral dissertation at Harvard was entitled, ‘Some Economic Implications of Modern Personnel Management and the Situational Approach.’ Now, we might not understand the intricacies of the concepts, but what that was about is perfectly evident, ain’t it?

So, it was with some disdain I listened to a story on NPR this morning wherein economic pundits tried to explain why the market is tubing, even after the greatest two day rise in twenty one years. I heard analysts explain that the market “Was in liar phase,” and “Decoupled from the economic environment.” Now I don’t know about you, but that sounds more like a bunch of idiots trying to emulate Greenspan’s semantic gymnastics than somebody honestly trying to explain the situation to the masses…

The gist of the report focused on the supposition that the market was largely being pushed by the vagaries of “Huge multi-billion dollar hedge funds.” Bemoaning “forced sales” and margin calls, the pundits stated that “Perfectly good stocks were being sold to pay for other stuff.” Now I don’t know about you, but this kind of obfuscation genuinely pisses me off; as such, I’d like to take just a moment to go ahead and call a spade a fucking shovel…

“Liar phase,” and “Decoupled” are akin to using the word ‘Parse’ to mean ‘explain’; The fact is, ‘parse’ has a specific meaning pertaining to language usage, to dissect a phrase into its components and describe them grammatically; it is not a generic term for ‘describe’. ‘Liar phase’ means nothing, but it is a very dangerous throw away solipsism;it implies that times when the market reflects nothing but its own lack of fecundity are de rigueur and perfectly OK; fact is, they’re not, and it’s not OK. ‘Decoupled’ shouldn’t be used when one means ‘dislocated’. Decoupling implies the elimination of a relationship, not a temporary displacement; if one is implying the entire economy is in the toilet, one should say so and not employ doublespeak. The fact is, the last time the market did not reflect reality this badly was in ’29, and that’s not good, but if that is in fact the case then let’s bloody say so and get after it; being cute analyzes and explains nothing…

Now as for hedge funds; do you know what they are? If you say yes, I think you’re fooling yourself; what we know is what the media tells us they are. Most folks think of a hedge fund as a little exclusive club of the super-rich, designed to make them more so. Yet if these analysts are firing off statements about “Multi-billion dollar hedge funds,” messing up the whole market, how small and exclusive are they? Forbes magazine alternately described hedge funds as, “The sleaziest show on earth… A business rife with exorbitant fees, phony numbers and outright thievery.” Now that floats my boat higher than that other balderdash… Mark my words, friends and neighbors; something that’s only been around for maybe a dozen years that has such a pervasive reach is to be feared and squashed, not admired and encouraged.

The fact is that there ain’t no clear cut definition of what a hedge fund is: They are generally speaking, some kind of business entity that manages investments, but the key component thereof seems to be the fact that they are almost always highly leveraged entities. Now, it is real important to understand what ‘leveraged’ means in this context, and it’s real simple: ‘Leveraged’ means ‘borrowed money’ plain out and simple. Now where that concept began I don’t know, but it was somewhere around selling swamp land and bridges to carnival goers, I can guarantee you that… You see how this works? I am a financial wizard, but I don’t have shitloads of money, (Yet, I’m gonna soon though, and it’ll be yours by the way), but you do, so loan it to me and I’ll make you one hell of a return!!! Whether the investment is equity, debt, foreign exchange or derivations thereof, this is what these jokers do, fundamentally.

Now, do they do this out of altruism, just to make their investors more dough? I don’t think so… They get paid, in fact, at both ends of each transaction. Up front, there’s the matter of a Management fee; see, I’m the expert, remember, so you gotta pay papa, right? And of course after my alchemy turns your lead into gold, I get a cut, ‘cause that’s only fair, right? So the Incentive Fee comes into play at the back end to cover that. And down the middle, there might be some Administrative fees here and there, all par for the course of course… All told, I will easily skate with 20% to 30% of your money before it’s all through; pretty good return, huh? Wow, you think, those guys rake it in, huh? Well yeah, but to protect your interests, they’ll likely have a Hurdle rate built into the deal too.. Huh, you say, a what rate? A hurdle rate means I gotta perform at a certain level, or I don’t get the full Incentive fee, which is where the lion’s share of my dough is gonna come from. That’s a good protection for you, huh? Sure, except that the hurdle rate’s gonna be tied to some conservative measure of success, like the LIBOR fer instance, the London Interbank Offered Rate; today’s read on the 1 year LIBOR rate is 2.74%: If I can’t make you 2.74% on your money, uhhhh, I’m in the wrong business, or you’re really fucking dumb, or some viable combination thereof, ya know? Oh sure, there are other safeguards, like High Water marks, which are quite common, and are tracked for each investor individually; basically, that just says I only get full fees for what I make above and beyond the high point that existed when you got in, as opposed to the full fund value… Hoopty doo! I mean, if that wasn’t there, they wouldn’t be called Hedge Funds, they’d be called Wall Street Muggings and we’d all know how things really work, right?

OK, let’s get back to that one little word, ‘leveraged’ AKA borrowed. So, you ask, what’s so bad about that? I do that shit too, I mean, I bought a house and I owe $100,000 on it and I only put $5,000 down? Well sure you did and when times are good, you’re good too; that house might be worth $150,000 then and if you sold it, you’d pay off the bank, pocket $40,000 and be an arrogant ass at the bar: But campers, times ain’t good… What if the house is only worth $75,000 and your friendly bank ain’t so friendly anymore and they want to make sure their full investment is covered; what happens then? Well, frankly, you’re gonna hear a knock on the door and Guido and Vinny are gonna be there looking for their twenty five large, capice? And when your house is a “Multi-billion dollar leveraged hedge fund,” there ain’t enough muscle to collect on that shit, dig?

While the concept of the hedge fund has been around quite a while, (This is basically what A. W. Jones & Co did in the 70s), they’ve modernized, AKA obfuscated their concepts and strategies appropriately for the 21st century: Clearly, they don’t want this stuff to be simply explained, because if it was, the smoke and mirrors would be set aside and folks would no longer pay any attention to the dudes behind the screens. They call their schemes things like ‘Directional Strategies,’ AKA betting on big picture market trends and investing accordingly; ‘Market Neutral Strategies,’ AKA picking a specific market and trying to take advantage of specific changes therein while avoiding being steamrollered by the big picture; and ‘Event Driven Strategies,’ AKA taking advantage of a single companies fortune or demise by betting on the aftermath of a merger or divestiture, that sorta thing: Notice all of these are basically betting on stuff and hoping you’re right? You can have all the computers and models and heuristics you want, but the fact is, Texas Hold ‘em is still poker gang… Now the way all this bullshit really works is much simpler yet; what these funds do is infuse massive amounts of liquidity, AKA cash, into the market. And of course, the market likes that a great deal and therefore respects said funds in the morning, if you catch my drift… Now that’s all nice and good, but just providing bucks to the market and getting a spread therefore ain’t gonna make me a billionaire, so there’s gotta be more to it, and there is, and that is… Leverage again.

And that, friends and neighbors is the essence of how these funds make ridiculous money: They get dough for providing dough, and then they leverage all of that, all of it, and make more dough. Sounds easy, right? Well in fact, it’s not rocket science; it’s pretty basic stuff for folks that know what they’re doing. The problem is that this doesn’t work so great when overlaid on the Big Picture Boom and Bust cycles that we all know too well. I used to sell mortgages; the fact is, trained weasels can sell mortgages when a boom’s on. What’s not so easy is selling them when times suck. I know, I did it through a couple of those cycles too… The problem with this hedge fund Ponzi scheme is that doing this stuff is very, very risky indeed. When the shit hits the fan, you are hanging out a mile and a half: When it all goes to hell, you in fact are the one left holding the bag, and everybody wants theirs back, now… Now go back to what I just said about mortgages. In the booms, anyone can sell and believe you me, they do… You get fucking arrogant idiots with a GED who don’t give a flying rats ass about their clients, they just know you can make shitloads of money doing this and they want in: So Citi and Countrywide and Ralph’s Pretty Good Mortgages hires these morons and off they all go… And then the wind changes, and lo and behold, things suck, bad, really bad. Welcome to today… It is not unusual at all for these funds to lose everything, and I mean everything they had; and remember gang, it ain’t my money, it’s yours! This has in fact happened to large funds throughout the time they have existed; there is case after case to be cited. We notice now because this is a big down and they’s all circling the big drain.

Now there’s one more concern you need to be aware of before we’re done and it has to do with the folks running these things; remember what I said about folks selling mortgages in the good times? Welcome to the GED boys… There’s also fraud, you see, just like Forbes warned us about. From plain ol’ greed to amazing personal excess and outright criminal stupidity, amazing wealth can and does lead to amazing wrongdoing. From Lipper to Beacon Hill, and Lancer to Maricopa, billions have been lost and more will follow…

Most recently, hedge funds figured out that they could market themselves to somebody other than wealthy individuals; they began to go after institutional clients, like state retirement systems and educational entities. So tell me, as I wind this up; with that last point in mind, they’re only doing that out of altruism, right, to help those kinds of clients make bigger bucks, right?

I mean, it couldn’t have anything to do with deeper pockets and more suckers, could it?

Monday, November 24, 2008

Ahhhhh, Fall...

I am torn as to which is my favorite season, it’s a tossup between fall and winter.

Here in Texas, I’ve leaned toward fall, simply because it and spring are the seasons where you can actually see sustained and distinct seasonal change.

Summer is just plain freaking hot, and winter is a crap shoot, but as fall rolls through, you can feel the crisp mornings, watch the leaves change and know that stuff is happening…

It’s also the second growth season for goodies, a benefit of the relatively mild climate here. Spring is basically storm season, and that can and does trump growth when it feels like it. Tomatoes and peppers and herbs don’t take kindly to having the snot knocked out of them by hail, and neither do our trees.

Where we live, west of Fort Worth, is the place during Storm Season where big nasty storms roll in from the west. If you watch the radar, you see deep red commonly, and even pink, purple and white headed right toward us. The colors represent dBZ, or “A non-dimensional unit of radar reflectivity which represents a logarithmic power ratio (in decibels, or dB) with respect to radar reflectivity factor, Z; the Z is best expressed in the ratio Z/R, or “An empirical relationship between radar reflectivity factor z (in mm^6 / m^3 ) and rain rate ( in mm / hr ):” All that aside, if you ever watch the weather radar and live in tornado alley, colors like deep red, pink, purple, and white are very, very, very bad; they mean that deep shit is headed your way and regardless of how that manifests, it’s going to be an ugly ride…

In all the years we’ve lived here, every single storm that looked like that has waited until it was dang near on top of us and then split neatly into and roared off northeast and southwest, leaving us fine and dandy and knocking the crap out of those less fortunate: But not last April… That storm came on and roared dead overhead, packing maximum hail of roughly baseball size, common hail of ping pong ball size, and winds in excess of 80 mph. Now ping bong balls falling from the heavens wouldn’t hurt ya, and might even be kinda cool; ping pong ball sized hail might crack your skull and is definitely not cool. I have been out in storms in the mogollons at 9000 feet, and all over the western US, but I have never been through anything inside a structure like that storm. I thought the house was coming down, ‘cause it sounded that way, but it wasn’t that bad.

After it passed, hail lay several inches deep and the roads ran like rivers. Our trees and plants got the shit knocked out of ‘em, as did our roof, greenhouse, shed, cars, and grill. An insurance claim later, all that was settled, but the plants didn’t forget…

And it took ‘em until fall to catch their stride, but boy did they; we’ve been blessed with incredible crops of tomatoes and peppers, “Pretty enough for a Burpee catalog,” according to mom. The trees had bit harder time, but they’ll be OK by next year and the only recollection of that storm will be a skinny growth ring many years down the pike.

Wednesday, November 05, 2008

I Can See Clearly Now The Rain Is Gone

Wow…

We went to bed before the results came in, as much excited as maybe still a wee bit scared. About 2 am, it got the better of us and we opened up Monica’s laptop in bed and had a look, and…

We smoked ‘em!
Oh my Lord say your prayers or thanks or sighs of relief, leaps of joy whatever you got let it fly!

I almost can’t believe it. I heard an NPR interview with a 109 year old black woman, daughter of an emancipated slaves saying, “It’s a blessing, it’s a miracle…” Indeed it is my dear, and I am so thrilled you were alive to see it, let alone me. I wish Obama’s Gramma could have lasted another day, but I am sure she’s swinging her legs on the edge of a cloud and grinning from ear to ear as I am today.

Rosa sat so that Martin could walk; Martin walked so Obama could run; Obama is running so that our children can fly.
I am told a black, 19 year old single mother texted this to a friend; whoever said it, it is prophetic and touching.

And how about McCain’s gracious and poignant concession speech? Thank God he wasn’t so heartfelt throughout the campaign or he might just have won! I kid, I kid because I love… In any case, his request for all Americans to join him in pulling together with our new President-elect, was, to my ear, sincere and the perfect thing to say.

Obama's acceptance speech, strong and equally gracious, credited the work of many for his success. He noted, gravely and honestly, that the work that lies ahead is arduous; “The road ahead will be long. Our climb will be steep. We may not get there in one year or even in one term. But, America, I have never been more hopeful than I am tonight that we will get there. I promise you, we as a people will get there.”

I believe you, Sir. I believe in you and that’s why I voted for you. Your voice is a comfort to me, as is your strength and your resolve. May God protect you and yours and keep you safe always, so that these qualities, your energy and drive, may go to work on our behalf.

I can see clearly now the rain is gone. I can see all obstacles in my way. Gone are the dark clouds that had me down, gonna be a bright, bright sunshiny day.

Gonna be a bright, bright sunshiny day.