Browsing Category: "Rants"
Banks - the next Enron?
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I wonder what size a financial collapse has to be before people learn their lesson from it. Enron investors incurred losses of over $50 billion. Thousands of employees lost their job and the market lost faith in many other energy companies. Most of the losses were hidden in off-balance sheet investment vehicles or Special Investment Vehicles (SIV) until they were uncovered in 2001.
Fast forward 6 years and now we have banks in a situation with subprime losses. Citigroup has upped their total writeoff to somewhere in the neighborhood of $14-19 billion. HSBC, one of Europe’s largest banks announced losses of $11 billion.
Financial Voodoo - SIV’s
Their solution? The big banks are pushing a $100 plan to avert a credit crunch. Led by Citigroup, the group will create a colossal SIV to deal with the mess. SIV’s aren’t exactly what Enron used, but they bare a very striking resemblance, allowing the damage to stay off the balance sheets of the respective banks.
SIV’s enable the banks to make money from risky deals without actually assuming the risk. They’re legally seperate entities that issue their own debt and use the proceeds to buy high-yield investments. They are merely paper entries. SIV’s are independent on paper, but the banks control them allowing them to keep the risk off their books.
The Power of Lobbying
So you must be thinking by now. Didn’t the government close this off-balance sheet accounting? Of course, but they excluded banks. Our current Treasury Secretary Henry Paulson came from Citigroup, one of the big players in Enron SIV’s and they have problems with subprime. Paulson is pushing for SIV’s as the solution to the current situation. This time the banks that setup the SIV’s will skim a profit off the top for managing the super-SIV which will show up on their balance sheets while keeping the losses off.
The SIV’s are leaking and we have a plumber named Henry Paulson ready to help the speculators once again. I’m a free-marketer, but you can’t allow this sort of irresponsible behavior to go unpunished. You screwed up Citigroup. Pay the consequences ON YOUR BALANCE SHEET. Your investors will vote with their pocketbooks (as the market intended) and you will change your ways.
The Nigerian Scam Part 2
Ok it isn’t the Nigerian scam that I’ve been receiving since time began, but a new twist using (fairly) current news… the Russian Oil Barron scam.
It promises a 20% cut for “helping to free the money”.
Check it out. Keep a lookout. Leave a comment if you’ve received this. I’m curious how pervasive this new twist on an old scam is.
Also you can check out the FTC spam scam website regarding emails such as this.
Dear Partner,
I am writing you this mail which I know will get to you as a surprise, but since I am a desperate situation, I know the internet in general is not a safe place considering what is happening around the world today; however, l had no other choice other than to contact you in this manner of approach. My name is Aachal Dandan, i am the financial adviser to the former personal chief financial treasurer to Mr. Mikhail Khodorkovsky the Richest man in Russia and owner of the following companies: Chairman CEO: YUKOS OIL (Russian Largest Oil Company) Chairman CEO: Menatep SBP Bank (A well reputable financial institution with its branches all over the world). Before Mr. Mikhail Khodorkovsky was arrested by the Russian authorities over pol itics by fin ancing the leading and opposing political parties (the Union of Right Forces, led by Boris Nemtsov, and Yabloko, a liberal/social democratic party Led by Gregor Yavlinsky) which poses treat to President Vladimir Putin Second Tenure as Russian president, there was a huge sum of money that was giving to me and my entire family which we seek your partnership in accommodating for us. You will be rewarded with twenty percent of the total sum for your partnership. Can you be our partner on this?
Already the funds have left the shore of Russia through diplomatic means to a European holding firm where the final crediting is expected to be carried out. All we need from you is to stand as the beneficiary of the above quoted sum and once your acceptance is received, the funds will be re-profiled to your name to enable the holding firm release the funds to you as the present beneficiary. Please note that all legal documents backing the claims of these funds will be pr ovided once your interest is shown. My family and I have decided to use this sum to relocate to your country if you can help us secure them and never to be connected to any of Mikhail khodorkovsky conglomerates. The transaction has to be concluded within 5 to 10 working days as soon as I confirm your readiness to conclude the transaction with me.
Contact me via my private box: aachda002@yahoo.com.cn so that I can furnish you with more details.
Thank you very much.
Regards,Mr. Aachal Dandan.
Sorry Big Bird: Bush cuts PBS budget by 25%
$114 of the $460 million budget for the Corporation for Public Broadcasting has been cut in the 2007 budget. We live in a world of 24×7 TV with most of that content not wholesome. Of course you have your cartoons. Coked up-looking animals that attack each other, Power Rangers (more violence), and then there’s good old fashioned degenerate cartoons.
I grew up on Electric Company and Sesame Street. Even if I didn’t learn my alphabet from TV, I learned that there is such a thing as calm stimuli-free TV. Now that seems counter-intuitive. How can TV be stimuli-free. Well it doesn’t cause me to start jittering, jump up and smack my brother, or otherwise act a fool. That’s what I mean. So yes, it did stimulate but in a positive way.
If there’s any public entity that I’d support it would be PBS. Sure X-Men was cool, but Wolverine never taught me how to connect C with A with T to form the word cat. If there was some mangling to be done, I’d give Wolverine a buzz. If I needed a terror camp destroyed, G.I. Joe was never too far away. I always came back to PBS at some point though.
It greatly hurts to see a great institution, a worthwhile investment seeing its budget cut. What message does this make? Education is not that important? Education is important in all its forms: the classroom, peer-to-peer social interactions, as well as entertainment.
Generations from now it will become even easier to cut education. A generation taught by example that it is not that important will learn to lose value for it. While other nations begin to Prosper on the backbone of education, knowledge, and open communication others will decay in its absence.
How Iraq Trillion could have been Spent
For Comparison:
- Annual budget for Department of Education is about $55 billion
- Annual budget for National Science Foundation is $6 billion
- Annual budget for National Cancer Institute is $5 billion
- Annual budget for Homeland Security is $35 billion
For $2 Trillion, the U.S. Treasury could:
- Mail a $6,000 check to every person in the United State or
- Mail a check for $300 to every human on earth (consider some nations per capita income is less than $300 imagine the Christmas lil Timmy would have that one).
We’ve got a new General out there now. Let’s see if he uses our money wisely. Our wallets are with you General.
