By the way, the concluding move in the IMF-centered escape routine that Hudson describes**, the attack on the currency of the nation in crisis after local and foreign elites have off-shored their funds under the support of the IMF, is a version of the “speculative attack” model of balance of payments crises. Unless one is an economist, the model itself might not be of much interest, but it’s notable that economists are in fact aware of such behavior and have tried to make models that take it into account. And that in fact it was the Shrill One (PDF) who was among the first to call the phenomenon out in formal literature.

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** The first relevant passage in Hudson begins:

The new twist is a variant on the IMF “stabilization” plans that lend money to central banks to support their currencies – for long enough to enable local oligarchs and foreign investors to move their savings and investments offshore at a good exchange rate. The currency then is permitted to collapse, enabling currency speculators to rake in enough gains to empty out the central bank’s reserves.

I completely agree with you. The only way that I see out is building a green economy, and I don’t say that just as a left idealist. I think it’s the only practical method and I also believe we’re approaching (and have the early phases of) the engineering to build it.

I think that’s as good a place as any to start (I can think of at least 1/2 dozen others). Thing is, BO’s stimulus barely includes enough for seed money there, same w/stimulus’ $$ commitments to grid infrastructure. Problem is, our R&D on really effective long term grid is way behind. In every stage… engineering, materials, generalized modular generator/consumption hookups… the work is in infantile stages.

Just one example: if implemented w/current silicone technology we’re locked in w/materials guaranteed to be archaic before the whole thing’s built. Just +/- 8 yrs ago research was promising a functional light-based-cpu in 7 yrs. I presume people understand what this means economically (not just “smart” grid, but that’s a good example). From a 9/06 summary of Intel’s research:

Two years ago, the fastest modulation in silicon was about 20 – 30 MHz. We went public in ’04 with 1 GHz modulation in silicon, a year later we demonstrated 10 Gbps, and since then, others have demonstrated around the world. These are three orders of magnitude improvement in performance in less than two years, and people are now talking about 40 and 100 Gbps, potentially, in silicon. These are fundamental changes, leaps in performance.”

Problem is, in last 8 years public research (Universities) has largely dried up on this front… slowed to a crawl. Reasons are complicated, but it’s been a consequence of “free market” (eg: corp. $$ dictating immediate need research in public universities… MS & Intel have made many of our best narrow focused subcontractors) from Universities at cost of developing long term “stuff”. Currently we are likely still at least 10 yrs away from a viable light based CPU.

This is true for grid technology across the board.

Obama has chosen to allow his Wall Street guys to dictate where these “stimulus” $$ go, and the people on front lines of R&D for this stuff have had, literally, no voice. To put it another way: he’s directing this massive investment through a totally broken Wall Street model which puts the businessmen/suits in position to choose winners/losers… seemingly ignoring massive evidence this model (extended to unbelievably lopsided dysfunction under Bush: eg. rewarding the suits and leaving worker’s pockets empty) is broken, not to mention consideration of ways to directly involve all the knowledge/expertise that exists (not just here but world wide) to try and get this right.

An apt analogy: current stimulus model akin to assigning management of the Manhattan Project to Haliburton. In such a scenario, where do you think priority decisions for profit & purpose will go? What would have happened if retired generals getting $m consulting fees were hired to direct the Manhattan project?

Obama is committing public money… tons of public money, to balance sheet of future generations. Therefore, the public… eg. the US citizenry should be involved in all this. In his “plans”, they are not… just more of the same: bailing out & financing the suits while putting best of our best on the sidelines waiting for the crumbs to fall.

Anyway, for BO’s expenditures there’s no wiggle room… eg. those $$s spent need to hit the bulls eye. Which for me cuts to the heart of my disappointment w/this guy: eg. not only has Obama not explained clearly the depth of US econ black hole, he’s relying on broken bureaucracies and banking/investment structures to implement it. Refusing to nationalize banks one indication, but only a surface one.

I don’t understand this at all.

Willem Buiter has strong critique of this mortgage relief proposal, and generally I agree w/most of what he says. Beyond Buiter’s comments, there’s nothing in this proposal… nothing, which addresses the gross excesses (countrywide and subsequent CDS/O geometric expansion of fraud) that got us here. That… I really don’t understand.

Only thing I come up with: Obama has taken suggestions from his Treasury Sec that tenacles of this mess have been intertwined so closely w/$USD and US Gov international obligations that there is no way to pull those tenacles out cold turkey w/out further exacerbating an already dire situation.

I’m damn sure he’s wrong in that premise, but it doesn’t matter as clearly Obama has chosen his path.

Eric Schmidt of Google gave a policy speech in Nov and the way that he wove some key issues together was, IMHO, quite persuasive, coherent, and refreshing: http://www.newamerica.net/events/2008/eric_schmidt

I agree w/him to significant extent, but stimulus package doesn’t even come close to doing what he talks about there… not even close. Beyond that, Obama hasn’t engaged public (as Schmidt advocates) on any of it, whether planning/implementation/destination for $$s spent etc. etc. If anything, Obama has disengaged public while giving photo-op events suggesting stimulus/mortgage relief will accomplish what it can’t.

Cruel joke IMO.

It’s been my sense that much more of the early framework has occurred via non-profits and cities

Regrettably, the best frameworks and implementations have occurred in (mostly) Europe… they’re way ahead of us. Some strong evidence that Bushies used NSA intercepts to steal some of their technology as well (I’ll have to dig up links later, getting ready for travel this morning).

Chu has made some promising statements, but stimulus package does not seem to back him up.

Obama’s statments on Japan’s “lost years” make no sense whatsoever, on any level.

Currently, I have -0- hope in this guy and am way past point of lamenting it all. More or less I’m looking for best ways to “go it alone” for foreseeable future, and whole lot of smartest people I know are telling me the same thing. Which, IMO, is destination he’s heading us towards: each for himself.

He’s just missed the boat entirely.

so, mortgages are a legal morass if one wants to contest the validity of lienholder rights.

what really needs to happen is for a group of good, pro bono attorneys versed in contract law to defend mortgagees who refuse to submit to foreclosure proceedings.

There’s a ton of lawyers and legal advocates who are not lawyers offering to defend such mortgages– for a price. Good luck finding one pro bono. My lawyer brother suggests basing the lawyer’s fee on the final settlement, not on up front or monthly fees. My wife’s currently involved in one such temptation and I’m trying to help her avoid falling into traps.

Bob in HI

In response to Mary @ 44 (show text)

(…)may be a triggering event for defaults of all kinds of Credit default swaps – which would cause huge banking and credit insdustry ripples – that exposure is bigger than mortage exposure and almost off the books and hard to predict where it will hit and in what degree.

(my bold)

Exactly. Personally, I’m as disappointed that there’s no talk of investigation/prosecution of those bubble blowers as I am about the lack of initiative against Junior’s torturers and enablers. And not only have these guys gotten a complete pass, they’ve been hired to fix the mess they made… on their own slow-walk time frame… geezus.

I’m beginning to think that these credit default swaps & all are like a Ponzi scheme on steroids, and for a while, so many people were involved that it will take years to sort out, plus of course the will to do so. I think that’s one reason why Geithner is slow-walking this. I also suspect that there are some very big names involved who participated in one way or another. Geithner is walking a tightrope: Confidence will probably not be restored until Geithner cleans out the fraud, because too many people know about it. But he can’t do it roughly, either, or there will be a run on certain very large banks, and chaos will ensue. That’s my SWAG, anyway.

Bob in HI

Drink a lot, especially margaritas, and eat mexican food.

That didn’t work too well for that Japanese Treasury Dept head, did it?
If you’re going to drink a lot, especially margaritas, and eat mexican food, do NOT get on the TV machine!

Bob in HI

One problem with compelling the adjustment of the mortgages is the mortgage backed securities and credit default swaps. That kind of activity – a forced restructure of the mortgage, may be a triggering event for defaults of all kinds of Credit default swaps – which would cause huge banking and credit insdustry ripples – that exposure is bigger than mortage exposure and almost off the books and hard to predict where it will hit and in what degree.

I’ve also heard that there are legal problems regarding contractual obligations on these mortgages that have been sold and resold. The Feds would have to nullify all those contracts, and they can’t do that without Congress passing a law, can they? Lawyers please help me out here– I haven’t stated the matter quite right, have I?

Bob in HI

do you really think that covering a desert with solar panels is an environmentally friendly act?

more to the point, if the energy produced cannot be immediately transmitted into the electrical grid, how do you propose to store it? for future use. vast facilities of lead-acid batteries?

this is one of the quandaries of residential photovoltaic solar. a residence using those panels must have a battery room to store the excess energy.

do you think that batteries are an environmentally friendly component? i think that batteries have lots of environmentally unfriendly aspects.

do you know of a coherent scheme to recycle, dispose of, played-out batteries?

do you know of a residential solar scheme that factors in the battery room?

what do you think the capital cost is for a 1kW residential solar installation[including batteries and battery room]?

how many square feet of solar panels will be required for this 1kW electricity production?

i ask these questions to see if you really know what you are talking about.

If you have time to put this on in another browser window, you might find it interesting. Eric Schmidt of Google gave a policy speech in Nov and the way that he wove some key issues together was, IMHO, quite persuasive, coherent, and refreshing: http://www.newamerica.net/events/2008/eric_schmidt

IMHO, he makes a reasonable case that this is not only do-able, but necessary.
It’s been my sense that much more of the early framework has occurred via non-profits and cities because the federal government was so despicably incapable under BushCheney. So there’s more in the pipeline than he speaks to in this presentation, but one of the key points that I think he makes is the potential for the desert regions to support solar collection and then redistribute it. (The buildout for the new grid will take about 15 years I understand.)

Don’t know about you, but I sure value having reliable, affordable electricity.
I’ve put time into getting my local power utility officers elected, partly because we came so close to getting totally screwed by Enron. What Schmidt describes is much needed if we’re going to keep all the servers humming that we seem to want.

in many instances, each tranche had different terms. go talk to a mortgage banker about how all this was done. and about the various terms. my old college roommate was such a banker and he would tell you that there is no way that anyone could isolate individual mortages from those tranches. without lots of litigation. so, was barack obombya just doing a 3 card monte act? gulling the fools?

and then it gets even more complicated. there were these side bets[aka derivatives] that were/are linked to these mortgage securitizations. call them cdo, call them siv, call them bets on bets. but the long and the short of it is that all the securitizations of mortgage lending are linked to another raft of casino tranches….and these bets have their own population of investors. i concede that it is probably very difficult for most individuals to get their brains to wrap around the the reality that there really is not mortgage chain of custody.

this was revealed in northern ohio some months ago when national city bank of cleveland[virtually insolvent] attempted to foreclose on some residential mortgages. in this instance, the homeowner[s] had the presence of mind to hire an attorney and to contest the foreclosure[unlike most who acquiesce, take the hit, and become homeless].

most mortgagees attempt to defend themselves pro se. not a good idea. pro se defendants almost always lose.

but in this instance, the mortgagees’ attorney asked national city for the proof of a mortgage lien. and they didn’t have that paperwork. oh, they tried to assert to the federal district judge that they did. but they didn’t.

here is the story that the foreclosers don’t want those about to be foreclosed upon to know….when these mortgages were securitized, lots of lien paperwork was discarded. the banks were only interested in selling the paper. and the way the tranches were done, no investor asked for proof of lien when they bought the security.

so, mortgages are a legal morass if one wants to contest the validity of lienholder rights.

what really needs to happen is for a group of good, pro bono attorneys versed in contract law to defend mortgagees who refuse to submit to foreclosure proceedings.

barack obombya’s program is a vile scam. pure public relations. he makes george walker bush more benign every day. and that is the harshest of all judgments.

I hope you have some good barrimundi on your trip.