You Are So Full of It

(Via Felix Salmon again)

Cracked has published a list of the 6 most statistically full of sh!t professions.

Here's just a sample:

#5. Wine Tasters

One thing we all can be sure about is that people that make their living writing about wine must be able to sniff out differences between wines much better than us plain ordinary folk.

Sure, Joe Consumer actually likes cheaper wines better, but that's because Joe Consumer is a stupid Philistine. The experts can tell the difference between a 2006 and 2007 Stag's Leap Cabernet Sauvignon in their sleep because everyone knows 2006 was a pedestrian year for Napa Valley reds.

Hell, they are so good they can tell the difference between two bottles of the same wine. In one experiment, wine experts were given two bottles of the same wine, only one was labeled a "vin de table" (France's version of "Night Train") and one was labeled a "grand cru" (top-rated vineyard since 1855). Want to guess what happened?

According to the article: "Whereas the tasters found the wine from the first bottle 'simple,' 'unbalanced,' and 'weak,' they found the wine from the second 'complex,' 'balanced,' and 'full.'" Not only were their tasting skills put to shame, it didn't even occur to them that nobody buys a $40-plus bottle of wine for a university experiment.

Not only can professional wine tasters be convinced that the same bottle of wine was both award-winning and hobo juice, but they could even be convinced that the same bottle was both red and white with the cunning use of food coloring.

Hilarious. The other listings (while not completely discredited) richly deserve the beating they get.

I Pay You Nothing

(Via Felix Salmon)

I love this.

5th Pillar...has a unique initiative to mobilize citizens to fight corruption. In India, petty corruption is pervasive – people often face situations where they are asked to pay bribes for public services that should be provided free. 5th Pillar distributes zero rupee notes in the hopes that ordinary Indians can use these notes as a means to protest demands for bribes by public officials.

In other words, if an official asks you to pay a bribe - you give them this:

Brilliant!

Yet another novel way to fight corruption.

Emails From a Nut

If you've ever seen Letters From a Nut, you'll appreciate this email wind up of BlockBuster, courtesy of David Thorne.

It begins with a letter:

...and just gets better from there.

Safe, Expensive & Stupid

FRI's babatim has a new post about Jalalabad's current status as a "white," or dangerous, city.

babatim doesn't have a lot of faith in the idea of locking down a city - and even less in the reasons for why the city was locked down. Here's his awesome run down of why this was a bad idea:

So today Jalalabad was on lock down to the international community. Declared a “white city” by [the United Nations Department of Safety & Security] due to two factors; a report of “five female BBIED (Body Borne Improvised Explosive Device) bombers who are looking to strike important targets” and reporting by various international security agencies of “spectacular attacks,” while President Karzai is in London attending an international conference. There has never been a female suicide bomber in Afghanistan to the best of my knowledge and there is no historical correlation to President Karzai attending international meetings and “spectacular” attacks. The (smart) military intelligence analysts dismissed the female suicide bomber story out of hand – they had seen similar reporting weeks ago and found nothing to substantiate them.

The smaller reconstruction projects which The Bot and I consult for ignored the White City and carried on with our daily routine. International reconstruction specialists cost the taxpayers of America over $1000 per day, so locking them down for no reason is a very expensive mistake. The military knew the principal threat spooking the UN security people was bogus, but they don’t talk to each other much. Both the UN and the military are operating inside huge bureaucratic closed loops – neither organization has the capacity to get into the local environment to conduct real time assessments. Only the small fries in the reconstruction business: JICA, CADG, CHF, etc… pay attention to White Information because they have to in order to operate. The large bureaucracies react to bogus intel which flows around the closed, insulated loops – their analysts deal with emails not people. They have the money which allows them to spend day after day on “lockdown” due to “threat warnings” generated by people who lack local access and situational awareness.

The military is even worse – everyday several times a day they fly people between the Jalalabad PRT and the army base at the Jalalabad airport. That is a trip of no more than 400 meters. You could walk it in 15 minutes – you could run shuttle buses between the camps all day every day for maybe 50 dollars a day. Do you know how much it costs for one flight hour in a military helicopter? Does the military honestly believe that the 200 meters of route one separating their bases is so dangerous that it warrants flying helicopters between them? Of course not – but flying in helicopters is easier than running four vehicle MRAP convoys and every time a soldier drives outside the front gate of a base he has to be in a four vehicle convoy with at least 16 riflemen. Who the hell can afford to spend money this way? Helicopter crashes in Afghanistan routinely kill two to three times more military members than the Taliban has ever been able to kill even when they mass their best fighters against isolated positions held by only a handful of Americans. Why is flying in a helicopter safer than a 15 minute walk or 5 minute bus ride? In large bureaucracies cost efficiency and common sense are not part of the operational paradigm.

Murder is Murder

...and thankfully, the law doesn't recognize a political exception.

From the Philadelphia Inquirer:

WICHITA, Kan. - The judge in the trial of a man accused of murdering an abortion doctor dealt the defense a severe setback yesterday, ruling that the jury cannot consider a lesser charge of manslaughter.

The ruling came hours after Scott Roeder took the stand in his defense and admitted killing Dr. George Tiller, saying he acted to save the lives of unborn children.

...

Roeder testified that he considered elaborate schemes to stop the doctor, including chopping off his hands, crashing a car into him, or sneaking into his home to kill him.

But in the end, Roeder told jurors, the easiest way was to walk into Tiller's church, put a gun to the man's forehead, and pull the trigger.

Roeder calmly repeated his public admission of months ago - that he killed Tiller to save unborn children.

...

After Roeder's testimony, District Judge Warren Wilbert ruled that the jury would not be permitted to consider the manslaughter charge because abortion, including late-term abortion, is legal in Kansas and because Tiller did not pose an imminent threat.

"There is no immediate danger in the back of a church," the judge said. He also ruled out a second-degree murder conviction, which does not involve premeditation, because it was clear Roeder planned the killing.

Late edit: Guilty on all counts. Damn right.

The Vampire Squid Connection

(Via CJR's Ryan Chittum)

Oh, this is too precious. Gawker's John Cook proves you can't say Goldman Sachs doesn't take care of their own:

Wall Street is cutting back on cash bonuses, which means paper-rich banksters are forced to choose between preschool tuition and new wine cellars until their restricted shares mature. Goldman Sachs is lending a hand by offering mortgages to its staff.

According to the Journal, Goldman Sachs has let "a small number of employees" take out loans, but the bank claims that they carry normal interest rates and must be paid back. We took a look at New York City property records to see if, like Condé Nast, Goldman ever sweetens its compensation packages with no-hassle mortgages for employees. The answer is yes, for a few people at least. And from what we can tell, it seems that Goldman began the practice right around the time the economy began collapsing and nobody in the world could get a mortgage.

The home run element of this story was their turning up mortgage papers for one Rodney O. Martin. Goldman provided a sweetheart mortgage on a $4 million dollar Central Park apartment - at 4.8% (sweet!). Goldman's chief credit officer executed the mortgage.

That's kinda special treatment, but then Rodney's a special guy:

He's the COO of AIG's life insurance unit.

Zing!

Kick Them When They're Down - Then Run Them Over

If you've recovered from learning about banks making loan mods that increase homeowner debt, here's more proof that banks are unaffected by inhibiting factors like decency - or shame:

Jan. 28 (Bloomberg) -- When John King stopped making payments on his home in Coral Gables, Florida, two years ago, he assumed the foreclosure ended his mortgage contract, he said. Last month, a Miami-Dade County court gave collectors permission to pursue him for $44,000 stemming from the default.

King is among a rising number of borrowers who are learning that they can be on the hook for years after losing their homes. Amid a crisis that stripped $6.4 trillion, or 28 percent, from the value of U.S. residential real estate since the 2006 peak, lenders are exercising their rights to pursue unpaid mortgage balances. To get their money, they can seize wages, tap bank accounts and put liens on other assets held by debtors.

So people who have been foreclosed on, are being pursued for back payments by the banks. You're average homeowner is going to think the bank taking the house closes the deal -but it doesn't have to. The banks aren't using new law - but their use of them now stems from the changed economic landscape. Used to be, a bank could expect to sell the foreclosed house for more money than the original loan. With more homes underwater - banks are dusting off the brass knuckles to get every last dime they can.

That's not the worst of it:

It’s not just foreclosures that can trigger debt collections. Short sales also may lead to deficiency judgments years after former homeowners have moved on, according to Hillard, the attorney in Largo. In a short sale, lenders agree to let borrowers sell a home for less than the mortgage balance.

“Banks are being very careful to preserve their rights, either outright in the short sale agreement or by using vague language that leaves that door open,” Hillard said. About 90 percent of people who do a short sale think they are “off the hook.”

That was the case when two of his clients, Brigitte and John Howard, sold their home in New Port Richey, Florida, almost two years ago without using a lawyer to check the bank’s short- sale agreement.

“We got a call out of the blue saying we owed $20,000,” said Brigitte Howard, 45. “It was a shock. There was no mention in the short-sale contract that the bank might come after us for the difference.”

This, from an industry that is blowing their budget on payroll. Nice.

(H/t CJR, natch)

Yes, Your Loan Has Been Modified, But...

...not in the way you might have wanted.

Here's Mike Konczal of Rortybomb describing something I can scarcely believe.

You'll recall that foreclosures in the country are up. That a staggering number of American homeowners are underwater in their loans. There's this idea that banks are being pressured/incentivized/begged to modify loans so that foreclosures are reduced. Banks keep getting paid, homeowners stay in their homes - this is something that is, arguably a good goal.

You'll also recall that attempts to make banks actually modify loans have been less than successful. Pres. Obama's target of millions of homeowwners has yet to affect even one hundred thousand.

But here's the kicker: Most of the loan modifications are actually increasing the total amount owed to the banks.

Here's Konczal:

I’ve seen a lot of bad things during this financial crisis, but this is the most disgusting thing I’ve seen so far. At a time when one out of four homeowners are underwater, banks are using a mortgage modification program to pile on more debt on these loans. They do this even when it’s well known the correlation between the level of being underwater and default.

How? From the report: “Servicers routinely capitalize delinquent interest, corporate advances, escrow advances and attorney fees and other foreclosure-related fees and expenses into the loan balance when completing a loan modification.” So fees allow them to make it look like they are doing their clients a favor, while all they are really doing is running them in a big circle.

...

These are [homeowners] who, instead of walking away from their responsibilities, are burning time, money and energy to credible signal to the bank: “I’m in over my head with this mortgage but I want to do right by it because it’s an obligation I made to you. Instead of simply walking away or trying to short sell, is there any way we can work this out so I can still pay you whatever I can? I gave you my word and that means something to me.” And the bank uses their signal that they want to do the right thing to fuck these borrowers the hardest, piling on as much debt as possible on these guys as they can get away with. The borrowers are trying to come up from the pool to get a breath of air, and the bank grabs them by the head and pushes them as far underwater as they can get them. And we are subsidizing this.

(H/t Felix Salmon)

Oh...You Mean THIS Schedule A!

(Via CJR)

Remember the AIG backdoor bailout?

This would be the bailout where AIG promised to pay a bunch of banks billions if their investments tanked.
Then the investments tanked, hard, and AIG didn't have the money.
So the Fed stepped into save AIG, which in turn saved a bunch of banks - with the public attention focused on bad, bad, AIG.

Over and above the billions in direct and indirect cash payments to AIG and the banks - they benefitted by having the Fed's newly created entity, Maiden Lane III solve all their problems.

Maiden Lane bought the bank's crap CDOs, so the banks were off the hook.
And the now all-but-nationalized AIG held IOUs for bad investments held by the Fed's Maiden Lane III.
AIG then cancelled the IOUs (the credit default swaps) and now it was off the hook.

All the crap CDOs were now on the Fed's hook.

Everybody was happy, even taxpayers, since they weren't allowed to know the details of the deal.

Until now.

AIG's formerly secret Schedule A has been released - and it shows a few interesting facts:

• AIG was selling credit default swaps after 2005.
• Goldman and Societe General got most of the swaps, and therefore the lion's share of the money funneled through AIG. (More of a confirmation rather than a revelation)
• The securities involved were not A rated (average rating of a high C), yet the Fed accepted them as collateral on loans. As Zero hedge puts it 'Bernanke will allow any toxic crap to be eligible collateral, likely at par'

Wiser heads are still pouring through the document - so perhaps more will be revealed.

Reuters has a great quote from a derivatives consultant: “If all of this had come out in the public domain in late 2008, Goldman Sachs and Merrill would have been deeply embarassed and the Federal Reserve wou[ld] have been questioned."

Lawful Stupid

(Via Above The Law)

This just in - the U.S. Seventh Circuit Court of Appeals has ruled that prisoners can be barred from playing role playing games while in prison.

For security reasons. Because role-playing-games promote an alternate hierarchy that competes with the established order of the prison. They (and I'm quoting here) 'mimic the organization of gangs' in that they have a Dungeon Master in a leadership position.

I about fell off my chair laughing when I read that. But I thought, no- that cannot be their position. There's some legal nuance that does not translate well. So I read the decision (Singer v Raemisch, No. 07-3400 PDF)-

-and that's really what they are saying:

The sole evidence the prison officials have submitted on this point is the affidavit of Captain Muraski, the gang specialist. Muraski testified that Waupun’s prohibition on role-playing and fantasy games was intended to serve two purposes.

The first aim Muraski cited was the maintenance of prison security. He explained that the policy was intended to promote prison security because co-operative games can mimic the organization of gangs and lead to the actual development thereof.

Muraski elaborated that during D&D games, one player is denoted the “Dungeon Master.” The Dungeon Master is tasked with giving directions to other players, which Muraski testified mimics the organization of a gang. At bottom, his testimony about this policy aim highlighted Waupun’s worries about cooperative activity among inmates, particularly that carried out in an organized, hierarchical fashion. Muraski’s second asserted governmental interest in the D&D ban was inmate rehabilitation.

He testified that D&D can “foster an inmate’s obsession with escaping from the real life, correctional environment, fostering hostility, violence and escape behavior,” which in turn “can compromise not only the inmate’s rehabilitation and effects of positive programming but also endanger the public and jeopardize the safety and security of the institution."

Speaking as an experience game master, allow me to respond:

Captain Muraski, you may know a lot about prison security - but when it comes to D&D - you have a lot to learn. The DM, or GM doesn't give directions - they provide a setting and enforce the rules. There may be legitimate reasons you might want to prevent inmates from gathering (or prevent particular inmates from gathering) in a social setting - but those reasons are pastime neutral. The idea that D&D somehow adds a new element of risk to inmate behavior is just comical.

Grown men sitting around a table rolling dice and telling stories... ye gods.

Elie Mystal nails it. This isn't about D&D at all...

...this is about...punishment. It’s not about rehabilitation, it’s not about security, it’s about old-school vengeance carried out by state actors. He killed somebody, and we as a society found something else he liked that we can take away. So we’re going to take it away. It’s Christopher Lloyd ...telling Kirk he won’t beam up Spock “because you wish it.”

So, to all of those reading this who participated in one of my games, I must apologize for my lackadaisical leadership over this past decade. I will now re-assert my natural rights and powers invested in me as your gang leader. In turn, I will forgive your lackluster performance as my willing minions over this same period. The past is the past.

Without further ado... ahem....

     *cue melodramatic music*

Go now! Rise up and cast aside those who cling to the establishment! Arise in fire and earthquake! Lay waste to the land, slay all who oppose you! This... your GM commands!!!!

     *sound of a needle scratching a record*

Aw, hey....c'mon now... do us a favor....just a little uprising? Old times..?

     *sounds of malevolent hand gestures*

Don't be like that... I just... How about spotting me some pizza money?-No? How about saying you would...?

     *door slamming*

Nah, it's cool... I... I'm...ah... still full from lunch anyway.

iPads for $499

Like I needed to see that...

Cripes.

(My inner UI-guy wonders how the touchpad typing compares to the real thing. People are used to schlock with those tiny pads - but give them a full size keyboard and they'll make the obvious comparison.)

Still - the price point is impressive. The $1000 estimates going around in the press miss the obvious goal of getting more than one device in a single household.

Add to that: month to month pricing from AT&T for data transfer. Anything close to consumer freedom when your dealing with a Telco is nothing short of jaw-dropping.

(H/t endgadget)

A.I.G. Deal = (NY Fed + S.E.C) - Transparency

(Via CJR and Barry)

The AP is reporting that while filing the paperwork for the A.I.G. bailout, the NY Fed asked the S.E.C. to keep the documents secret.

The S.E.C., in its role as defender of the people's market, tried to accomodate the request - and buried the AIG paperwork.

Then journalists started filing Freedom of Information Act requests. Here's CJR's Ryan Chittum:

...the Geithner New York Fed reacted to a FOIA not by releasing the information, but by making more information secret—in order to prevent other meddlesome reporters (or lawyers) from filing FOIAs!

Nice. Yet another reason to believe that the Fed should be entrusted with regulatory powers to protect consumers.

Wide Open

The NYT has a jaw dropping article about fatal mistakes in radiation treatment.

Mr. Jerome-Parks died...in 2007. He was 43.

A New York City hospital treating him for tongue cancer had failed to detect a computer error that directed a linear accelerator to blast his brain stem and neck with errant beams of radiation. Not once, but on three consecutive days.

The accompanying graphics do a first rate job of laying out the situation and resulting mistakes.

I won't even try to summarize - it's worth a read.

Crayola's Law

Okay, this is one of the more amusing proofs that pictures speak louder than words.

The number of Crayola crayon colors doubles every 28 years:

(H/t Marginal Revolution)

Tyson vs. UFOs

Great video showing Dr. Neil deGrasse Tyson answering (off the cuff) the question "Do you believe in UFOs?"



I especially like his comments about what to do if you are abducted by aliens.

(H/t Good Experience)

Earthquake? Yeah, There's an App For That

(Via Wired's Gadget Blog)

You can't buy press this good:

Man Buried in Haiti Rubble Uses iPhone to Treat Wounds, Survive

After being crushed by a pile of rubble, Woolley used his digital SLR [camera] to illuminate his surroundings and snap photos of the wreckage in search of a safe place to dwell. He took refuge in an elevator shaft, where he followed instructions from an iPhone first-aid app to fashion a bandage and tourniquet for his leg and to stop the bleeding from his head wound,

The app even warned Woolley not to fall asleep if he felt he was going into shock, so he set his cellphone’s alarm clock to go off every 20 minutes. Sixty-five hours later, a French rescue team saved him.

And You Didn't Like His Hair?

John Edwards just keeps on imploding, long after we're all tired of knowing he was running for president. So, not only was he lying when he said hadn't fathered a love-child during an extramarital affair - he's only coming out to admit it because a former staffer, Andrew Young is about to release a book that would expose his lie.

Mr. Young would be the married father of three who Edwards somehow convinced to pretend that he, not Edwards, fathered the child in question.

Like they say - the politician is always willing to admit any sin at which have been caught red handed.

I remember thinking an Obama/Edwards ticket would have been a good one.

What a douchebag.

What a Difference 0.3% Makes

"It wasn't 100%, it was only 99.7%"

That's the New York Fed trying to minimize the revelation that (contrary to its earlier statements) it did not have to pay foreign banks 100% of their investments.

As in:

Bloomberg: You paid French banks 100% of the value of their investments when you bailed them out with our money. Why did you do this?

NY Fed: Because French banks were barred by French law from accepting less.

Bloomberg: No they weren't. In fact one of them, Societe Generale, accepted a 30% settlement on a separate deal with Ambac in the same month you bailed out SG's trades at 100%.

NY Fed: Well, our bailout only paid the French banks 99.7%

Bloomberg: That's less than 100% and it directly contradicts your previous statement.

NY Fed: Well... shut up.

Bravo Bloomberg! Nail these idiots to the wall. I hope Geithner gets eviscerated on the hill.

(Via CJR)

Oh Sh!t

Corporations are not people - and are not invested with rights.

But they have something better: money. Corporate money can buy rights.
And it just did.

The Supremes have decided that restricting corporate financed issue ads bribery is unconstitutional.

That sound you hear? It's the sound of corporate cash flooding into Washington.

Glass-Steagall II?

Okay, I certainly didn't see this coming:

Obama to Propose New Rules on Banks’ Size, Trading

Smart politically, not like you're going to get a lot of people angry going after banks these days. We'll just see what the weak-kneed and paid-for members of Congress do with this.

Here's Ryan Chittum's take:

Make no mistake about, this is a massive story. ...this is a major switcheroo by the administration and a throwing down of the gauntlet at Wall Street, which has so far shown the ability to block or water down any real change it doesn’t like—with the aquiescence of Obama and Co.

The lobbying battles to come over this will make the skirmishes we’ve seen so far look petty.

I'll just bet. But if the Dems fold vs. the Health Care lobby now - what chance do they have against the banking lobby?

Admitting a Bias

Yes, I am willing to believe bad things about large banks.

There, I've said it.

So when I read accusations of big banks asking for under the table payments to allow short sales of homes - I'm willing to believe that.

Since many second lien holders are getting very little, they are now allegedly requesting money on the side from either real estate agents or the buyers in the short sale. When I say "on the side," I mean in cash, off the HUD settlement statements, so the first lien holder doesn't see it.

"They are pretty clear and pretty upfront about the fact that if the first lender knows they are getting paid, the first lender will kill the short sale," says Brandt. "So these second lenders are asking for the payments off the closing documents, off the HUD statement, usually in a cashiers check prior to closing. Once they receive that payment, they will allow the short sale to go through, which according to RESPA laws and the lawyers that we have spoken to on the topic is not legal."

Reading Citi's lukewarm response doesn't go far to undermind that belief either.

(H/t to The Big Picture)

My New Favorite Travel Mug

For Christmas, thorn gave us a Contigo travel mug.

Can I just say... Yum?

It's pretty, but the real home run is the interface. Like every other travel mug, it has a cover with a sealable opening. Unlike most travel mugs - this is a mug you can fill with hot coffee, cover and then fling into your car like you don't give a damn. Not only does it seal perfectly, it does so easily in a quarter turn - with a satisfying amount of friction.

The button to open it is stylish, ambidextrous - and ergonomic as hell. Great heft, feels natural in your hand - solid. Dishwasher safe body and lid (although they recommend hand washing).

Finally, a travel mug I'll remember to bring. Thorn? You so rock.

E? I bought another one - because the uncertainty of who would use the one we had was killing me.

Truism

Every few years we hear the pundits declare that one political party or the other is dead and gone. Fortunately for both Republicans and Democrats, they have each other.
-Paul Soglin

Brownout

I'm not informed enough to add to the analysis of the Scott Brown election - but I can't help but agree with Glenn Greenwald's splenetic rebuttal of those who would blame the far left for this setback:

In what universe must someone be living to believe that the Democratic Party is controlled by "the Left," let alone "the furthest left elements" of the Party? As Ezra Klein says, the Left "ha[s] gotten exactly nothing they wanted in recent months." The Left wanted a single-payer system, then settled for a public option, then an opt-out public option, then Medicare expansion -- only to get none of it, instead being handed a bill that forces every American to buy health insurance from the private insurance industry. Nor was it "the Left" -- but rather corporatist Democrats like Evan Bayh and Lanny Davis -- who cheered for the hated Wall Street bailout; blocked drug re-importation; are stopping genuine reform of the financial industry; prevented a larger stimulus package to lower unemployment; refuse to allow programs to help Americans with foreclosures; supported escalation in Afghanistan (twice); and favor the same Bush/Cheney terrorism policies of indefinite detention, military commissions, and state secrets.

The very idea that an administration run by Barack Obama and Rahm Emanuel and staffed with centrists, Wall Street mavens, and former Bush officials -- and a Congress beholden to Blue Dogs and Lieberdems -- has been captive "to the Left" is so patently false that everyone should be too embarrassed to utter it. For better or worse, the Democratic strategy has long been and still is to steer clear of their leftist base and instead govern as "pragmatists" and centrists -- which means keeping the permanent Washington factions pleased. That strategy may or not be politically shrewd, but it is just a fact that the dreaded "Left" has gotten very little of what it wanted the entire year. Is there anyone who actually believes that "The Left" is in control of anything, let alone the Democratic Party?

Nate Silver has a rapid breakdown of the numbers that created Brown as Senator-Elect - and I'm sure more analysis will follow.

The idea that some far left wing has led the Dems to defeat is too stupid for words. We've grown too accustom to the attack rhetoric from the right - which only speaks of the Dems in terms of far left ("socialist" "Marxist") but the straw man conservative pundits owe their incomes to has yet to leave a tangible mark on this administration.

We're on Crack

...at least with regards to our belief in the stock market, that is.

Here's the WSJ's Intelligent Investor laying it out:

What are we smoking, and when will we stop?

A nationwide survey last year found that investors expect the U.S. stock market to return an annual average of 13.7% over the next 10 years.

Robert Veres, editor of the Inside Information financial-planning newsletter, recently asked his subscribers to estimate long-term future stock returns after inflation, expenses and taxes, what I call a "net-net-net" return. Several dozen leading financial advisers responded. Although some didn't subtract taxes, the average answer was 6%. A few went as high as 9%.

...in order to earn 6% for clients after inflation, fees and taxes, these financial planners will somehow have to pick investments that generate 11% or 13% a year before costs. Where will they find such huge gains? Since 1926, according to Ibbotson Associates, U.S. stocks have earned an annual average of 9.8%. Their long-term, net-net-net return is under 4%.

All other major assets earned even less. If, like most people, you mix in some bonds and cash, your net-net-net is likely to be more like 2%.

Read the whole thing. I don't think anyone's terribly bullish these days - but as we dig out, it's good to think in realistic terms.

(H/t to Felix Salmon)

Netbooks Are Unlike Smart Phones (And Thank God)

Coding Horror is all up in a twist defending the concept of a NetBook computer against the likes of Joey DeVilla.

It's an interesting rant either way. I can't say I'm without an opinion - I got E a NetBook for Christmas & so far, so good. I don't know that they are revolutionary, but I have to agree with this observation by Dave Winer:

But the netbook is not just a new product. It exposes something pretty ugly about the computer industry. They've been controlling prices. There must have been price collusion before netbooks came out. It's clearly possible to build notebooks for much less than they manufacturers are charging.

I don't want to come off all conspiratorial, and I hardly think the revolution is nigh - but the stats speak for themselves. I bought a new netbook with better stats than many full size laptops out there for well under $300.

Yes, it does not have a disk drive. And the screen is only 10".

But it was less than $300. Smaller size used to come with a premium price - not so much these days.

It will be interesting to see what emerges from the initial market confusion - but I have to say, if I was going to get another machine - I'd seriously consider getting another netbook and an external drive.

-------------------

Another gem that came out of drilling into this post was this quote:

Space scientist says texting is four times more expensive than receiving scientific data from space

“The maximum size for a text message is 160 characters, which takes 140 bytes because there are only 7 bits per character in the text messaging system, and we assume the average price for a text message is 5p. There are 1,048,576 bytes in a megabyte, so that's 1 million/140 = 7490 text messages to transmit one megabyte. At 5p each, that's £374.49 per MB - or about 4.4 times more expensive than the ‘most pessimistic’ estimate for Hubble Space Telescope transmission costs.”

Love that.

I mean, I've griped about text messages rates before - but it's nice to have a home run anecdote like this one.

I could send text messages to space for less!!!

I am a Barnes & Noble Franchise of One

This past Christmas, mom gave all the grownups in the family the Barnes & Noble Nook.

Yeah. Pretty cool.

So having mucked around with it since Christmas, here's what I have to say about it.

The good:

Its easy to read. Easy on the eyes to a surprising degree. People concerned about getting eye strain from staring at a screen should relax. It's no more difficult to read than a printed page. Plus, you can change the font size when you do get tired.

It uses exactly the same E Ink technology as the Kindle. If you like that, you will like the Nook's reading screen. It's been reviewed to death by more demanding critics than I - so I'll leave it at that.

It makes the impulse buy ridiculously easy. I used to think of e-readers as personal media devices aimed at text. After using the Nook, I now look at them as a Barnes & Noble store you buy so you can invite it into your home. The Nook connects to the interweb cellularly or by WiFi. Translation: your personal B&N franchise is always waiting to capitalize on your next moment of weakness.

It's very pretty. Clean lines and it comes with attractive pre-loaded wallpapers like cityscapes and nature.

It allows you to change the battery and add memory. The merest hint that an ebook seller would allow its customers to (y'know) maintain the device is a good step. It's a very small step, but a good one.

It uses the ePub file format. Meaning content producers do not have to put their publications into a proprietary format. This is good for lots of reason - but unfortunately, this is a benefit that takes a long time to realize.

If you boil all that down - what's right with the Nook is what's right with all eReaders: A convenient way to buy, store and read publications.

The ePub format is a step up - but will not wow any new user because the immediate result looks identical to what you see on other eReaders.

Being able to access WiFi and cellular internet is a plus - but since the cellular access is free (and your average ePub file is not terribly large) there's not a big wow factor there either.

WiFi access will allow the Nook to do cool things that it couldn't do otherwise - but those features don't exist yet. I doubt you'll end up with actual web browsing - but in theory, you could.

Much is made of the Nook's lending ability - but the ability to lend a book to another user for 14 days (once) is unimpressive. When you realize publishers have veto power over this ability (publishers can designate their books as "non-lendable") you realize this feature isn't just limited, it's endangered.

Here's what's wrong with the Nook:

1. The Touchpad The response time for the controls is sluggish. Users can double click in the time it takes for a single click to register. This may be by design - but anyone used to the iPhone's screen will be underwhelmed by the Nook's performance. The scrolling function does a nice job except the visual cue is the opposite of most UI. You don't drag the current screen towards the offscreen content, you drag the offscreen content towards your current screen. Workable, but odd.

2. Search Users familiar with advanced search features on the web will be mystified by the search experience of the Nook.

For example. I typed in

fred anderson

into the search - and here are the first items displayed:

Life of Frederick Marrat Free
John Parker Anderson and d... From Google Books

Life of Frederick Marrat Free
John Parker Anderson and d... From Google Books

Life of Frederick Marrat Free
John Parker Anderson and d... From Google Books

Life of Frederick Marrat Free
John Parker Anderson and d... From Google Books

Life of Frederick Marrat Free
John Parker Anderson and d... From Google Books

Life of Frederick Marrat Free
John Parker Anderson and d... From Google Books

Life of Frederick Marrat Free
John Parker Anderson and d... From Google Books

The Book of Fred $21.95
Abby Bardi

The Dominion of War $9.99
Fred Anderson

Adventures of the infallible Godahl Free
Frederick Irving Anderson From Google Books

There are so many things going wrong here:

a) "The Book of Fred" This tells me that all searches appear to be global. Meaning if you type in an author's name, their name will be used to search book titles, keywords, even summaries. I should be able to isolate a search to a subset of fields.

b) "Life of Frederick Marrat" x7 Why does this book appear seven times in my search results? I should see a single search item:

Life of Frederick Marrat (7 different versions) Free

John Parker Anderson and d... From Google Books

Selecting that line item would give me the ability to select the specific version I want. As it is now - I don't know if those versions are identical, but given the sluggish display, I'm not eager to select each in turn to find out.

c) You cannot filter a search by category. Those search results you see above? You will get them if you search "fred anderson" at the root of the bookstore, in US History, in Asian History or presumably anywhere else. Having drilled down to the the category I'm interested in, the search will include items I've already told B&N I don't want.

3. Bookmarks are cumbersome and unintuitively labeled. I'm reading Tony Horwitz's A Voyage Long and Strange. Like most history books - there are maps that you like to refer back to as you go through the text. In a printed book, this is easy - you leave a finger on that page and flip back and forth. With an eReader - you need to bookmark the page.

So, I'm on page 239 where the book shows a map of De Soto's 1540 route through Alabama and Georgia.

I select Bookmarks>Add Bookmark

So far so good. But here's the label that's added to my bookmark list:

17,OPS/xhtml/part02chapter09.html#point(/1/4/38/3)

Seriously. That's the label of the bookmark I just created.

If I create more than a few bookmarks, I'll forget which is which and the automatically generated label is absolutely no help.

Here's what a useful bookmark label could have been

Page 239 "...(Image)..."

If the ePub had bothered to put something like an ALT tag, you could expand that to

Page 239 "De Soto's route (2 of 3)"

That would be useful. Not some URL gobbletygook.

The good news is that these are all solvable issues that don't require physical changes to the device. firmware upgrades and database refinements can correct them without the user having to be part of the solution.

But they need to be fixed.

No, You Haven't Paid Us Back

Not that you'd know it from the current meme push of "Wall Street has paid us back with interest."

Slate does us a solid and points out other federal payouts are still outstanding.

ZeroHedge put together a chart for the Temporary Liquidity Guarantee Program back in 2008, showing outstanding federal loans to everybody's favorite free market capitalists.

See any names you recognize?

(Amounts are in thousands).

These are low interest loans by the government to corporations to get them through a rough patch. The missing piece is what this chart looks like now. I'd be very impressed if Citi, BoA or Goldman have paid in full as of today.

Somehow I think they've been putting the money to other uses.

Then there was the Home Affordable Modification Program, where according to Slate's Daniel Gross:

...the government writes checks to lenders who made reckless loans so that they can modify them and keep people in their homes. Funds issued under the HAMP are not expected to be paid back.

Wells Fargo's gotten over $3 billion under that program, CitiMortgage (of CitiGroup) just over $2 billion, and BoA's subsidiary CountryWide tops the list with a revised cap of over $6 billion.

That money by design, is never coming back.

CJR's Ryan Chittum points out the missing part of the public dialog about banks:

I’d like to see from the press is a full accounting (as much as is possible) of the total direct and indirect subsidies the banks have received from taxpayers. Let’s see those numbers.

Yes, lets. Bloomberg? ProPublica? Anybody?

What's was the tab and where are we really at now?

Aerial Views of Haiti

(Via Danger Room)

National Cathedral in Port-au-Prince

Presidential Palace in Port-au-Prince

The AIG Deal Keeps Smelling Worse

(Via CJR and RealClearMarkets)

The Goldman Sachs-AIG scandal may be worse than we think. Former New York Fed President and current Treasury Secretary Timothy Geithner is being castigated for paying off AIG's counterparties - Goldman foremost among them - 100 cents on the dollar and then keeping these payments secret. But it seems likely that Goldman actually got much more than 100%. What is worse, Goldman may have received this windfall by trading on information that was deliberately withheld from the public.

The short version of the story is that Goldman Sachs had a 2.5 billion dollar I.O.U. from A.I.G. Being careful trading types, they had bought insurance (via a Credit Default Swap) on this I.O.U. with other banks - meaning Goldman pays these other banks so that if A.I.G. went under, the other banks would pay Goldman 2.5 billion dollars.

James Keller is saying that when the government announced it's A.I.G. loan - it was giving off all the signals that A.I.G. was going to be liquidated. And liquidation = default on Goldman's I.O.U.

In that scenario, A.I.G. can't pay - so the other banks will cough up $2.5 billion to Goldman.

But Keller alleges that Goldman was part of a very select circle that knew that the government wasn't going to liquidate AIG. In that scenario, the Government props up A.I.G., so A.I.G. pays Goldman $2.5 billion of taxpayer money.

But here's the bonus round:

Goldman is paying for insurance on that $2.5 billion - this is money that Goldman now knows is wasted. They cannot collect on the CDS "insurance policy" because the A.I.G. is going to survive.

But the rest of the world thinks A.I.G. is going to default, so the market for CDS insurance against AIG is skyrockting. The prevailing wisdom is (if you can get somebody dumb enough to sell you their swap) is that you would make a few payments, A.I.G. would go under, and you'd get paid the full value of the swap.

In this market, (again, according to Keller) Goldman offers to sell their $2.5 billion dollar swap at a whopping markup. They don't tell their prospective buyers what they know (that the CDS "policy" is worthless), they just charge as much as they can and sell.

Keller's estimating that the CDS rates for AIG between September 2008 and March 2009 (when Goldman sold their protection) would net Goldman another $1.5 billion dollars.

So, not only are Goldman getting federal dollars directly - not only are they getting their A.I.G. bets covered to the tune of 100 cents on the dollar by taxpayers, but they are using their inside access to federal officials to pull another $1.5 billion out of customers, without disclosing what they know.

That Goldman works for itself is no surprise, but the extent to which Treasury works for Goldman is just mind-boggling.

Lies His Teacher Told Him

(H/t to Bad Astronomy)

I wish I had a professor in college that was as unbelievably brilliant as the one Kai Peter Chang had:

“Now I know some of you have already heard of me, but for the benefit of those who are unfamiliar, let me explain how I teach. Between today until the class right before finals, it is my intention to work into each of my lectures … one lie. Your job, as students, among other things, is to try and catch me in the Lie of the Day.”

...

This was an insidiously brilliant technique to focus our attention – by offering an open invitation for students to challenge his statements, he transmitted lessons that lasted far beyond the immediate subject matter and taught us to constantly check new statements and claims with what we already accept as fact.

But the technique only gets better as it goes on, read the whole post from Zen Moments.

Speed to Market vs. End User Needs: Homeland Security Edition

(Via Good Experience)

I remember Sen. Trent Lott once crowing about bringing federal dollars to a Mississippi military base. With the money, the military would be able to build two new buildings and Sen. Lott was there for the ribbon cutting.

I remember wondering what the buildings were for. And none of the news accounts went into a lot of detail. I assumed it was something classified or at least for general consuption. Mississippi has communications units on the coast - and it doesn't take a lot for that kind of gear to be something that is kept out of press releases.

The truth was considerably less impressive. The military had no idea what to do with the buildings. They hadn't asked for them, they didn't want them - but an act of congress had ordered them to build two buildings. The order was duly followed and the base was going to relocate some operations there to keep the buildings occupied and maintained - but they had no pressing need for additional structures.

Nobody had asked them, and yet a few million dollars of taxpayer money went into unnecessary buildings. Then the base had to absorb the additional cost of maintaining them.

If the military had been asked, they would have told congress to spend the money somewhere else. In fact, the military would likely have told congress to close the base in question - or at least dramatically scale back its function.

But Sen. Lott and congress knew better.

60 Minutes tops this story in spades with a discussion of how the US/Mexican border is supposedly being secured with an "electronic fence." Some brainiac had the idea that existing security equipment could be mounted in the desert and still be reliable.

It can't.

They also had the great idea that border agents could carry laptops around and connect to border surveillance feeds via cellular modem.

But the border is 1,200 miles long and doesn't get good cellular reception. Not only that, but the border agents have pointed out that operating laptops in hot cars in the dusty desert ensures that equipment will fail and fail often.

The parallels to I/S development are classic. The vendor (Boeing) promised that it could meet the specifications and the timeline easily.

Then their assumptions about their system were proven horribly wrong. Then their initial 28 mile setup was delayed by years. Then the costs went up.

It's too much of a simplification to say that end user research would have solved the current mess, but when the man in charge of the project is saying they should have done iterations and refined it based on what they learned.

But the client wanted it fast - so they've lost billions and years.

Go figure.

Ukelele Smile

So this morning - I'm in a foul mood. I was working yesterday until 9pm. I'm up to my eyes in work, having been utterly screwed by my Outlook refusing to send my email for two days - meaning half my clients think I've skipped out on them

- and I'm about halfway to a migrane.

Enter my team leader.

They plop down their iPhone on my desk and say they are going to YouTube bomb me.

*incoming bomb whistle*



The song he's singing is Jason Mraz's, I'm Yours. Say what you like, the boy's got stage presence.

(Yeah, I know - it's ridiculous, but this morning I needed a grin... and I suspect other people out there do, too.)

Road Trip, Congo = Bad Idea

(Via the BBC)

File under WTF: Togo's World Cup team endured 20 minutes of machine gun fire shortly after entering the Republic of the Congo.

Gunmen have fired on a bus carrying Togo's football team to the Africa Cup of Nations in Angola, wounding players and reportedly killing the driver.

The attackers machine-gunned the vehicle in Angola's oil-rich territory of Cabinda, where rebels have been fighting for independence.

The main rebel group, the Front for the Liberation of the Enclave of Cabinda (Flec), said it carried out the attack.

The government called the incident an "act of terrorism".

There are reports of serious injuries.

Togo is due to play its first cup game in Cabinda on Monday.

Manchester City striker Emmanuel Adebayor was on the bus but is unhurt. In a statement, Manchester City said Adebayor had been "shaken by the terrible events" but was "unharmed".

Togo is reportedly not going to go ahead with their scheduled match.

I'm not sure who had the bright idea to drive to Angola, but I'm betting they're buying plane tickets next time.

Ye Gods.

The Dow You Thought You Knew

(Via CJR)

Here's a great parallax:

That's the Dow Jones Average adjusted for inflation.

Audit Reader Edwin Hamilton also notes that the Dow has performed miserably over long investment horizons. He calculates that a dollar invested in the stock market in January of 1966 was worth—you guessed it—a dollar in real terms in September of 1995. Worse, that dollar invested in 1966 was worth only about 33 cents in real terms if you happened to cash out in October 1982, just before the great bull market began.

Of course, that (like the WSJ’s 1929 to 2009 number) is measuring from a peak to a trough, which isn’t exactly fair. But even if you measure from the very nadir of the Depression-era Dow, which hit 651 in 1932 (in 2009 dollars. The nominal number was 41.22), you still end up with a real annual return of just 3.7 percent over the last seventy-seven years. You’re not going to get rich on those kind of returns.

Yow.

AIG, OMFG (yet again)

(Via CJR)

This time, it's the Fed.

They redact references in a public filing to conceal AIG's payment to big banks like Goldmann Sachs and SG.

Then they (apparently) got AIG to slowroll their disclosures to the SEC.

And it gets worse.

1,100% Interest

Seriously. From a New Mexico payday loan company.

Maybe We Do Want To Be Like Iceland...

(Via the BBC)

Iceland's president has refused to sign a controversial bill to repay $5bn (£3.1bn) to the UK and the Netherlands.

President Olafur Ragnar Grimsson said he would instead hold a referendum on the bill, following public protests.

The legislation was designed to compensate governments forced to bail out their savers with Icesave accounts following Iceland's banking crisis.

Landsbanki, which ran the Icesave accounts, collapsed and was nationalised in 2008.

Legislation to repay the money was approved by Iceland's parliament in December, but the approval of the president is also required before it can be passed into law.

...

On Saturday, the president received a petition calling for the bill to be vetoed, signed by almost a quarter of the country's population.

Campaigners against the bill say that the Icelandic public are being forced to pay for the mistakes of banks.

Witness the idiocy of John R. Guardiano

In a brilliantly stupid post, TAS contributor John Guardiano trots out the GOP's greatest hits on the subject of terrorism:

• Has the Obama administration's ban on enhanced interrogations, and its pledge to investigate and prosecute past enhanced interrogations, resulted in lax counterterrorism efforts, which might otherwise have prevented Abdulmutallab from boarding the plane?

• Did the Obama administration opt to cede Abdulmutallab to the courts and his ACLU-loving lawyers vice interrogating him about his terrorist connections and knowledge?

• How much actionable intelligence was lost -- and how many terror plots might have been averted -- because the Obama administration opted to treat the Christmas Day terrorist attack as a law enforcement matter rather than an incident of war?

• Does the Obama administration truly recognize that America is at war with al-Qaeda and the terror masters; or does it still view terrorism as an issue best delegated to the courts and the criminal justice system?

Yes, those are deep and probing questions - let's dive into them a bit.

The ban on torture - has it led to lax counterterrorism efforts? I don't know - but neither does Guardiano. He offers nothing in support of this question, he just waves it around in the hopes his readers will uncritically accept his speculation as fact.

Think of the breadth of information you would need to even begin supporting that hypothesis - and then recall that torture has been repudiated by professional interrogators many, many times as ineffective - even counter productive.

This is my favorite though:

How much actionable intelligence was lost -- and how many terror plots might have been averted -- because the Obama administration opted to treat the Christmas Day terrorist attack as a law enforcement matter rather than an incident of war?

Exactly how does one treat the underwear bomber as an act of war? Invade Nigeria? The idea that we cannot use our criminal justice system to dispose of this man has been so thoroughly debunked you wonder if Guardiano spent the last week living under a rock.

Or that we somehow lost intelligence because AbdulMutallab is in the custody of civilian courts instead of the military. Is there any doubt that the man will be interrogated while in custody? More importantly, Is there any liklihood that Al Qaeda in the Arabian Penninsula entrusted this man with their deepest secrets? We're talking about a young man depressed enough to literally blow his balls off.

Yes, Abdul, we should tell this one everything. Give him Usama's home number. What could it hurt?

Please.

"Does the Obama administration truly recognize that America is at war with al-Qaeda and the terror masters?"

Yes, I believe they do. Not only do they know there's a war going on, they know where it is happening better than the previous administration did.

The C.I.A. has launched 53 [Predator] strikes in Obama’s first year in office, more than during Bush’s entire presidency, according to data compiled by Peter Bergen and Katherine Tiedemann at the New America Foundation. In part, that strategy owes to increasingly precise technology that has made it easier in the last couple of years to hit a desired target with fewer civilian casualties. And in part, it underscores the ability to redirect resources away from Iraq now that the war has subsided there; when the Obama administration came into office, it learned that dozens of drones were devoted to operations in Iraq and Afghanistan but just five or six in the tribal areas of Pakistan where Al Qaeda’s leadership is mainly holed up, according to officials who declined to be identified discussing a classified program. Obama has authorized doubling the number of drones in the Pakistani border area, as well as increasing the presence over Yemen and Somalia, officials said.

You can doubt the efficacy of such strikes - or the moral costs incurred by them - but their intent is plain. We are now trying very hard to kill high value targets along the Afghanistan and Pakistan border.

The idea that we cannot simultaneously pursue war on a battlefield and prosecute crime as crime is one of those ideas that seem to incubate only in morons.

I have an inconvenient question for Guardiano: Do you really believe what you are saying? or are you just saying what your audience will buy?"