Iceland Launches New "Piece Corps"

Iceland today has announced that they are sending aid to both the European Union and the USA, in the form of a new "Piece Corps".

Finding themselves with hundreds of unemployed well educated and reasonably well behaved youth, it dawned on them that Iceland is uniquely well placed to be providing desperately needed help and advice to other countries suffering from financial collapse.

Icelandic couch-potato youngsters have by now watched countless hours of financial pundits explaining what happened to them, and having nothing better to do, and wanting to "getoffadisrock" as they say in Icelandic; they have proven eager to volunteer for this new humanitarian adventure.

"Look", Ingrid Ingridsdottir explained, "We've, like, survived it. And when we read the financial news coming out of the ashes of the European Union, and from behind the barricades at the US Federal Reserve - any one of us obviously has a much clearer idea of what's actually going on than any of those dimdims. We just hate to see them suffer."

Starting in mid-April, flotillas of geo-thermal powered kayaks will begin carrying hundreds of eager, blond, idealistic semi-virgin volunteers to the financial centers of the Big 8. The first group is expected to reach New York by April 22, and a second wave is being launched to arrive in Washington DC just a few days later. London and Belfast are on the list, but dates are uncertain.

The volunteers heading for Washington include a second kind of Piece Corps volunteer; engineering students. "As everyone knows, Iceland is the center of the world for real geo-thermal power development." said Ingridsdatsun Ingridsdottirdottirson. "We've been monitoring the thermal signatures of the entire Earth for some years now. The satellite data is absolutely clear; somewhere in the vicinity of Washington DC there is a new volcano erupting. The signature is much hotter than Kilauea in Hawai'i. True, all we can see so far is the immense atmospheric upwellings from the heated air; but that much hot air has to mean a real geothermal source someplace. With our Icelandic expertise, we're sure we can find the source, and tap it. Judging from the satellite data, there's enough energy there to power the entire USA for the entire foreseeable future- no nukes needed."

The entire world wishes these modern saints good luck.

And- I don't know how I missed this when it first came out; but it's an appropriate follow-up to everything else.

The Plumber Parable Proliferates

Yesterday much ado was generated by Thomas Friedman; the NYT econ-astrology (trying that out, feonix; thanx...) columnist.   Friedman has gotten lots of attention in the past year or so by advocating that we can, basically "grow" our way out of our economic maelstrom by investing in "green" technologies.  He's even written a book about it, the title of which is sometimes parodied as "Flat, Overheated, and Vacuous".  Some of his first toutings were in the NYT, and I responded to what was being called "muscular green" way back then, in some detail.

Reception by environmental thinkers of his book, and his basic "green industrialization" concept, has not been all that great.  Pretty clearly, he still was not "getting" the basic need for some limits here, somewhere.  Like all neo-classical economists, buried in his essential assumptions is the one about "perpetual growth" (it's "good", and "necessary", in order to make the models work.)

Yesterday he printed a column that many folks greeted enthusiastically - it looked, indeed, as if Friedman had "gotten religion".   And it did kinda look that way-

"We have created a system for growth that depended on our building more and more stores to sell more and more stuff made in more and more factories in China, powered by more and more coal that would cause more and more climate change but earn China more and more dollars to buy more and more U.S. T-bills so America would have more and more money to build more and more stores and sell more and more stuff that would employ more and more Chinese ...

We can’t do this anymore"

Golly jeepers!  His eyes have opened!  Hope!  Sharon, over at Casubon's Book, was downright enthusiastic.  In her special way.  :-)  

I however, wound up focusing on his later paragraphs; where- he lapsed into:

"We must have growth, but we must grow in a different way. ... Let’s grow by creating flows rather than plundering more stocks."

Semantics should not be the problem here- to an econ-astrologer, "growth" means- my factory will get bigger each year- forever.  More employees.  More profits.  More customers.

Friedman is playing with changing that definition; but I don't think he's managed, really.  I'm just not buying what he's selling.  Crank that I am.

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So; today- he's got another column out.  Announcing to the world that, officially! - we have a real, serious problem with the economy.  "This is not a test.  This is not a test."  He says.

Yay!  He noticed.  That's good.

Alas... and hooray... he goes on to illustrate that my Parable Of The Poor Plumber has broad applicability.

Here is his answer to all our problems:

"All this will require leadership of the highest order — bold decisions, persistence and persuasion. There is a huge amount of money on the sidelines eager to bet again on America. But right now, there is too much uncertainty; no one knows what will be the new rules governing investments in our biggest financial institutions. If President Obama can produce and sell that plan, private investors, big and small, will give us a stimulus like you’ve never seen.

Which is why I wake up every morning hoping to read this story: 'President Obama announced today that he had invited the country’s 20 leading bankers, 20 leading industrialists, 20 top market economists and the Democratic and Republican leaders in the House and Senate to join him and his team at Camp David. ‘We will not come down from the mountain until we have forged a common, transparent strategy for getting us out of this banking crisis,’ the president said, as he boarded his helicopter.' "

The Answer- will come from... hold your breath, now...

#1- Leading Bankers!!

#2- Leading Industrialists! 

#3- Top! Market! Econ-Astrologers!

#4- Leading Politicians!

 Are we all rolling on the floor in helpless laughter?  Um.  Aren't these exactly the same plumbers that busted the sink in the first place- and have had no idea how to fix it?

Way to think outside the box!!   Sorry, Charlie; we need tuna that - isn't rotten?  Knee-jerks are just not going to get us out of this whirlpool.

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Not to mention Friedman apparently hasn't heard of that (apocryphal) study by the Rand Corporation on the most effective size of committees.

He wants 20 Bankers.  20 Industrialists.  20 Econ-astrologers.  And leading donkeys and elephants from both houses of Congress- not sure how you decide how many, but obviously parity is needed - so at least another 20.  Hopefully not 20 each...

So now you have a good decision making body of at least - 80 Leading! individuals.  Who are not coming down off the mountain until they have it ALL figured out.

Hm.  On second thought.  Maybe that's a good idea.  We could put all those Leading! people up there- and never have to listen to them again.  They ain't never coming down.

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According to the story.  After years of acquiring data.  Data analysis.  Theorizing.  Etc.

The Rand Corporation put together a well-tested equation, for the optimum function of a "committee".

Optimum number of members in a committee for best decision making?  

"Less than one."  Says so, right on the graph.

oh, yeah, and CitiBank was up- another 9¢ today!  

I'm thinking about painting the gallows in polka-dots.

overload

Once again I find myself looking at way too many urgent things; both to write about here, and to do on the farm.  Winter really really has arrived; we've got 5 inches of snow, and the temperature dropped to -3°F last night (-20°C).

So, firewood probably being more urgent than theoretical discussions about Life, The Universe, and Everything, I'm going to just do a quickie here and try to get out and get in some fuel, before the snow gets deeper.  Back seems to be essentially functional, and not feeling fragile, usually a reliable indication.

I have two cartoons for you here, and hope I am not breaking any copyright laws.  These are from "Tom the Dancing Bug" by Reuben Bolling.

They are so exactly spot on as to be scary.  How is it our humorists have more solid understanding of economics than our economists?  Really?  Don't you think that should tell us something?

The first one here predated the announcement that the Federal Reserve Bank was going to start - buying US Treasury Bonds... to prop up the market- by a full week, I think.  (click on pic for full size, if it's working.)

And this second one is from this week, and illustrates what to me is an obvious truth; that "economics" is a religion; not a science.  Really- not kidding.

Just good stuff to chew on for a while.

Coming soon:  "The Walls of The Erlenmyer Flask", and "Why 30 years is not forever."

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Update 12/3; just a little more quick fun; Stuart Carlson today.  Read the banner on the bottom...

On the road

ok, knock off the Willie Nelson.

Lots of excuses for being pretty quiet here for a while- like, lack of sleep for a couple days while Delilah got used to being downstairs alone.  Wow, she was a howler for a while.

Harvest.  Still going on; still behind.

Sniffles.  Well, more than sniffles; Spice has been on antibiotics for hyper-sniffles for more than a week now; Smidgen has a gorgeous cough in the mornings, but the doctor says it's not the hyper-sniffles, just a yucky cold.

Then there's this trip I've got to go on; out of state for 4 days, and they want me to say something interesting and significant, at length.  Spice and Smidgen get to hold down the fort and milk the chickens, between coughs.

Kind of hard to focus on a new powerpoint while all the world's handbaskets are on greased, 60° inclined, straight railroad tracks to hell.

So, I've been preoccupied.  I'm out of time to ponder now; have to get on the plane in the morning.

ok, knock off the Mamas and Poppas thing.

Gon out, bisy, backson.

Financial Tooth Fairies, Ex Machina!!

Zooming out to work on the guinea run before the sun gets hot, still I couldn't resist sharing this bit of astonishing fiscal humor with you before I go.  From the New York Times: "A New Tool Announced To Support Home Loans."

The boys in The New York Stock Casino have come up with a new game!!  (that's what a "tool" is-)  it's called- "covered bonds".

Oh, be still my heart!  Finally, the magic wand is waved, and the mortgage collapses all go away.  If you're not cackling and rolling on the floor in helpless laughter yet, you really should be.

They're all chanting "I DO believe in "tools"! I DO! I DO!"- and hoping, praying, the rest of the world will join them.  Puffing new hot air into the housing bubbles- which just don't hold air anymore.  There's no such thing as housing expansion.

It's a short article.  If you can see anything besides smoke and mirrors in these "covered" bonds, by all means, let me know.  It's pure, pure, puerile fantasy.  This is what our financial leadership has been reduced to.  What they're really showing us is that their entire system of air castle builders has no idea- none- what real wealth is; or real value.  All they know is: money; and if I sell you my pile of money, and charge you interest on it, you can sell me the same pile of money back, and charge ME interest on it; then I have a big pile of money again, and I can sell it back to YOU, and charge YOU interest on it; and we all get bonuses at the end of the year!  Forever!  Really!

Then, look at the list of who's going to be selling these new covered bonds "secured by pools of assets like home loans" - and then read this little bit in the article: "Unlike mortgage securities, which pass all the risk to investors, covered bonds collateralized with mortgages would continue to perform even if the mortgages backing them default — as long as the bank remains solvent."

ROTFLMAO!!!!

I'm going to run right out, and bet that Wells Fargo is going to remain solvent!!  Sure I am.

oh, dear, tears of helpless laughter in my eyes.

What fools these mortals be.

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Update-  OMG!!!  And it just gets better and better!  A followup article, NYT- has a little more discussion about what the heck a covered bond is, and what it might do-  and contains this gem:

"Covered bond markets exist in many European countries. In some of them, laws make the legal standing of such bonds clear, but Mr. Paulson and the other agencies concluded that no legislation was needed, and that policy statements by regulators would suffice."

My god, why aren't these guys writing for Saturday Night Live! ???  I mean- just look where running our entire financial system based on "policy statements by regulators" has gotten us so far!  By all means- we need more of that!  

Tears in my eyes!!

You can see it: in "Blazing Finances" --  "Legislation?  We don' need no stinkin' legislation!"  Mel Brooks, I hope you're taking notes.  Or Broadway could really use "Springtime For Paulson"; coming soon.

"Springtime, for Paulson, and Bernanke.  Winter, for Congress, and hope."  It even scans.

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And the Washington Post chimes in! "Executives from four banks -- Bank of America, J.P. Morgan Chase, Citigroup and Wells Fargo -- stood shoulder to shoulder with Paulson at the news conference and issued a joint statement saying they would consider issuing covered bonds, although they were not specific about their plans."

Guys, you're killing me!!  "Shoulder to shoulder!!!"  forsooth!!  Our brave, brave little soldiers in pinstripes!!! - and all committing to- oh, wait, they didn't actually commit to anything at all.

I'm gasping for breath here!!!

Thank god the "Financial Sector"  (gasp!  choke!  cackle!)  is good for something these days; I haven't laughed this hard in years!