25 August 2009
To the Editor
The Economist
Dear Sir,
This is with regard to the review of my book Listening to Grasshoppers that appeared in The Economist. If this letter is long, ironically it is because the factual errors in the review are so many. In an attempt to highlight my "flawed reporting and incorrect analysis" the reviewer makes some extraordinary errors and leaps of logic:
1. "Ms Roy cites a massacre of perhaps 2,000 Muslims in Gujarat in 2002, in which the state's Hindu-nationalist government was allegedly complicit. Almost no senior official or Hinduist agitator has been prosecuted over the atrocity. And Narendra Modi, Gujarat's chief minister then and now, is currently vying to take over the leadership of the main opposition Bharatiya Janata Party, and one day India. Many of the country's industrialists would approve of that; even Ratan Tata, the gentlemanly head of the vast Tata Group which prides itself on its ethical dealings, has praised Mr Modi's business-friendly policies. Nothing annoys Ms Roy more."
Mr Tata did not merely praise Modi's business policies, he endorsed him warmly and publicly as a future candidate for prime minister. In India the said Mr Modi is still being investigated for his role in the 2002 pogrom. In his successful election campaigns after the pogrom, Modi brazenly cultivated communal hatred. He is a member of the RSS (Rashtriya Swayam Sevak Sangh), an organization that is proud of its fascist origins and counts both Hitler and Mussolini as its heroes. In addition to the massacres about 150,000 Muslims were driven from their homes during the carnage. Even today, under Mr Modi's administration, most continue to live in ghettos, socially and economically boycotted in a brutal system of communal apartheid, while the killers continue to live as free, respectable citizens. Incidentally, after considering the available information, the US government has denied Mr Modi a visa. A handicap, wouldn't you say, for a potential prime minister? Incidentally, for more on the Tata's "ethical dealings" you could google "Kalinganagar" or "Singur".
2. ". . . she is not always a reliable witness. Her claim that in Kashmir last summer protesters were as likely to call for union with Pakistan as freedom from India is probably wrong; most seemed to want to be shot of both countries."
I have never made such a claim. Nobody with an even passing acquaintance with Kashmir would (or should) say something so ridiculous. Given the intensity and violence of the fratricidal wars that Kashmiris have fought, and the thousands that have lost their lives over the Pakistan vs Freedom issue, and given that Kashmiri leadership is still unresolved about the question, it's extraordinary that the reviewer can so casually and so glibly claim to know what the majority of people of Kashmir want. My essay on Kashmir is actually titled "Azadi", which in Urdu means "Freedom". Perhaps the reviewer is unfamiliar with the language?
3. "More typically, she appears to gather her facts from newspapers (her articles strike the reader rather as 'lounge notes'), before selectively arranging and then exaggerating them to suit her own ends. For example, about 25% of India's territory is alleged to be affected by a Maoist insurgency, but that does not make it, as Ms Roy writes, 'out of government control'."
If the reviewer had cared to read the book instead of ransacking it, he/she would have come across a sentence that clarifies that several of the essays are "responses to the responses" about certain events. Given that much of my book is a critique of the disturbing role that a section of the corporate media has played in these events, is it surprising that media reports are frequently referred to? Most of the time this is in order to expose them for being false and motivated. To conclude from this that my "facts are gathered from newspapers" and that the articles are "lounge notes" is laughable.
The figure of 25 % of India's territory being under Maoist insurgency is a figure advanced by the Indian security establishment and is probably a slight exaggeration. However, it is a fact that vast swathes of India's territory are out of government control. It is for this reason that the Government has announced that in October, after the rains, there will be a military operation in states like Chhattisgarh, Orissa and Jharkhand in which ground troops will be backed up with helicopter gunships and satellite mapping. A brigade headquarters is being established in Raipur (Chhattisgarh), and 26,000 paramilitary troops (the same Rashtriya Rifles who are deployed in Kashmir, and similar to the Assam Rifles deployed in Assam, Manipur and Nagaland) are being raised for this war. This is in addition the thousands of security personnel who are already deployed in these areas. Perhaps the reviewer has never visited Dantewara , seen the burned, empty villages, or crossed the Indravati into the territory that is called "Pakistan", where police and security forces do not venture? Perhaps he/she hasn't heard of Abujmaad?
4. "Beyond India, her grasp of her subject-matter gets looser. If Ms Roy believes, as she writes, that a good portion of Africa's 'contemporary horrors' are caused by America's 'new colonial interests', she would do well to pay a visit to the continent."
My book is about India, not Africa, but yes, there is a paragraph about Africa. Here's the sentence the reviewer refers to: "The battle to control Africa's mineral wealth rages on -- scratch the surface of contemporary horrors in Africa, in Rwanda, the Congo, Nigeria, pick your country and chances are that you will be able to trace the story back to the old colonial interests of Europe and the new colonial interests of the United States." My mistake here is that I didn't mention the new colonial interests of countries like China and India as well. Does your reviewer not know about the legacy of Shell Oil in Nigeria? Or the politics that surrounds the mining of a mineral called coltan? Or of how Belgium's colonial regime structured the barriers of hatred between the Tutsis and the Hutus in Rwanda with their racist profiling and social engineering? As for the recommendation that I pay a visit to the continent . . . it's a grand idea, but how does one visit an entire continent? I have visited parts of it. Plenty of times. But the reviewer should know that it is possible to know things about places even if you haven't been to them, like historians know things about history without traveling back in time.
5. "For a more measured analysis, Ms Roy should perhaps turn to the finance ministry's recently published Economic Survey. There she would read that, 'High growth is critical to generate the revenues needed for meeting our social welfare objectives.' Ms Roy should take note."
Am I really being waved back into my seat with the finance ministry's Economic Survey? I thought everybody knew that the cut back on public spending (social welfare objectives) is almost in direct proportion to the growth rate? It's often a pre-requisite when loans from the World Bank, the ADB and the IMF are negotiated. Isn't that what structural adjustment is all about? Or is this the old Trickle Down theory being re-cycled? I've always wondered about this. Sometimes they say the Free Market provides a level playing field -- but then when questioned, they ask us to wait for Trickle Down. But things only Trickle Down slopes don't they? Anyway, there is a school of thought which believes that people actually do have rights. The right, for instance, to resist the Government taking away their land and their livelihoods, often at gunpoint, and then ordering them to wait for the leftovers (if the gentlemen leave any) to trickle down after the feast.
Regardless of our obvious ideological differences I hope you agree that errors and innuendo of this nature undermine the real debate.
With best wishes,
Arundhati Roy
“Blessed is the nation that doesn’t need heroes" Goethe. “Hero-worship is strongest where there is least regard for human freedom.” Herbert Spencer
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Tuesday 8 September 2009
The Ten Best Seduction Techniques
Sticky Eyes
When you are talking to your quarry, let your eyes stay glued to his or hers a little longer than necessary - even during silences. A gaze that lingers awakens primal, slightly disturbing feelings. It induces the same "fight or flight" chemicals that race through our veins when we feel infatuation. When you must look away, do so reluctantly. Drag your eyes away slowly. This is a particularly good technique for men to use, as women always want to feel that a man is absolutely fascinated by them.
The Visual Voyage
As you and your date are chatting, let your eyes do some traveling - but only on safe ground at first. Take a visual voyage all over his or her face, concentrating on their eyes. If he or she seems to be enjoying your expedition, take small side trips to the neck, shoulders and torso. For girls, take sneak peeks at his body - and when he sees you pretend you are a little embarrassed. This should really get his juices flowing and is a great way to get a friend to think of you sexually. For the man this technique is a little more dangerous, so be wary. If your eyes travel too far south for too long you'll be in trouble.
Expensive Dining
This is good for a gentleman who intends to pick up the bill on the first date. Make sure you take your date to an expensive restaurant with an atmosphere like the one you wish to project - be it elegant, upbeat, cool or arty. Atmosphere is important because she will transfer her feelings about the room to you. It may be superficial, but women tend to judge a man on the first place he takes them.
Dress to Impress
Even when seeking only a casual liaison, do not go out dressed like an unmade bed. Dress as though you were auditioning to be his or her husband or wife. Men must make sure they are coordinated and dress affluently: women love good quality clothes on men. Women need to dress alluringly but not in a cheap way. He is going to mentally undress you anyway, so there is no need for that short skirt. However, you might want to try a slightly more revealing second layer of clothes so that you can, at the right moment, take off that jacket and reveal some wonderful cleavage.
Give First Date Butterflies
When planning your first date, find out what pulls your date's strings, and then plan an arousing, emotional adventure. You don't have to go sky-diving, but a little shared danger is a proven aphrodisiac. A scary movie is an easy way to achieve this - or perhaps ice-skating, where the woman may be nervous and might have to hold on tight. Afterwards, go out for dinner or a drink to discuss your shared experience.
Co-react
To capture your quarry's heart, you need to share his or her convictions and show that you feel them deeply. Watch his or her reactions to outside stimuli, then show the same emotions - shock, disgust, humour, compassion, etc. This is particularly important for men, who are more inclined to misjudge situations. Make sure your reactions suit the mood.
Smile
A simple but crucial technique. A smile is the most effective form of body language and a great way to let somebody know that you are interested in them. As you are looking at or talking to a member of the opposite sex whom you wish to seduce, let a soft smile of acceptance frame your lips. Don't give too quick a smile: just let a slow one float over your face. This will seem much more genuine - while making your romantic intentions obvious.
How do you feel about that?
A good tip for men: pluck up some courage and, whatever your quarry is discussing, simply ask her, "How do you feel about that?" It might seem awkward at first, but woman love to talk about how they feel and will nearly always respond enthusiastically. Women, on the other hand, should wait until a relationship is on stable ground before asking a man much about his feelings - otherwise there is a danger of rocking the boat before it is launched.
Let Your Quarry Pass an 'Audition'
Men should not ask a woman out too soon, lest she think you are interested only in her looks. The ideal time to ask a woman for a date is when she has said something relevant to her personality. For example, if she says something spiritual, say that you'd love to hear more about that, perhaps over dinner. A woman values interest all the more if she feels that you appreciate her inner qualities. Women, meanwhile, can move faster, as men are less afraid of being treated as sex objects.
Have the First Laugh
Another obvious but important technique. Women: make sure you laugh at your quarry's jokes and, when in a group, be the first to laugh. It brings you closer together. Men should try and introduce cute private jokes to create a bond between the two of you. This will help to make you seem like long-time lovers rather than first-date strangers.
'How to Make Anyone Fall in Love With You: 85 Proven Techniques for Success' - £8.99, by Leil Lowndes, is published by Element
When you are talking to your quarry, let your eyes stay glued to his or hers a little longer than necessary - even during silences. A gaze that lingers awakens primal, slightly disturbing feelings. It induces the same "fight or flight" chemicals that race through our veins when we feel infatuation. When you must look away, do so reluctantly. Drag your eyes away slowly. This is a particularly good technique for men to use, as women always want to feel that a man is absolutely fascinated by them.
The Visual Voyage
As you and your date are chatting, let your eyes do some traveling - but only on safe ground at first. Take a visual voyage all over his or her face, concentrating on their eyes. If he or she seems to be enjoying your expedition, take small side trips to the neck, shoulders and torso. For girls, take sneak peeks at his body - and when he sees you pretend you are a little embarrassed. This should really get his juices flowing and is a great way to get a friend to think of you sexually. For the man this technique is a little more dangerous, so be wary. If your eyes travel too far south for too long you'll be in trouble.
Expensive Dining
This is good for a gentleman who intends to pick up the bill on the first date. Make sure you take your date to an expensive restaurant with an atmosphere like the one you wish to project - be it elegant, upbeat, cool or arty. Atmosphere is important because she will transfer her feelings about the room to you. It may be superficial, but women tend to judge a man on the first place he takes them.
Dress to Impress
Even when seeking only a casual liaison, do not go out dressed like an unmade bed. Dress as though you were auditioning to be his or her husband or wife. Men must make sure they are coordinated and dress affluently: women love good quality clothes on men. Women need to dress alluringly but not in a cheap way. He is going to mentally undress you anyway, so there is no need for that short skirt. However, you might want to try a slightly more revealing second layer of clothes so that you can, at the right moment, take off that jacket and reveal some wonderful cleavage.
Give First Date Butterflies
When planning your first date, find out what pulls your date's strings, and then plan an arousing, emotional adventure. You don't have to go sky-diving, but a little shared danger is a proven aphrodisiac. A scary movie is an easy way to achieve this - or perhaps ice-skating, where the woman may be nervous and might have to hold on tight. Afterwards, go out for dinner or a drink to discuss your shared experience.
Co-react
To capture your quarry's heart, you need to share his or her convictions and show that you feel them deeply. Watch his or her reactions to outside stimuli, then show the same emotions - shock, disgust, humour, compassion, etc. This is particularly important for men, who are more inclined to misjudge situations. Make sure your reactions suit the mood.
Smile
A simple but crucial technique. A smile is the most effective form of body language and a great way to let somebody know that you are interested in them. As you are looking at or talking to a member of the opposite sex whom you wish to seduce, let a soft smile of acceptance frame your lips. Don't give too quick a smile: just let a slow one float over your face. This will seem much more genuine - while making your romantic intentions obvious.
How do you feel about that?
A good tip for men: pluck up some courage and, whatever your quarry is discussing, simply ask her, "How do you feel about that?" It might seem awkward at first, but woman love to talk about how they feel and will nearly always respond enthusiastically. Women, on the other hand, should wait until a relationship is on stable ground before asking a man much about his feelings - otherwise there is a danger of rocking the boat before it is launched.
Let Your Quarry Pass an 'Audition'
Men should not ask a woman out too soon, lest she think you are interested only in her looks. The ideal time to ask a woman for a date is when she has said something relevant to her personality. For example, if she says something spiritual, say that you'd love to hear more about that, perhaps over dinner. A woman values interest all the more if she feels that you appreciate her inner qualities. Women, meanwhile, can move faster, as men are less afraid of being treated as sex objects.
Have the First Laugh
Another obvious but important technique. Women: make sure you laugh at your quarry's jokes and, when in a group, be the first to laugh. It brings you closer together. Men should try and introduce cute private jokes to create a bond between the two of you. This will help to make you seem like long-time lovers rather than first-date strangers.
'How to Make Anyone Fall in Love With You: 85 Proven Techniques for Success' - £8.99, by Leil Lowndes, is published by Element
Friday 4 September 2009
Experts never learn
By Peter Schiff
There is an inexplicable, but somehow widely held, belief that stock market movements are predictive of economic conditions. As such, the present rally in US stock prices has caused many people to conclude that the recession is nearing an end.
The widespread optimism is not confined to Wall Street, as even President Barack Obama has pointed to the bubbly markets to vindicate his economic policies. However, reality is clearly at odds with these optimistic assumptions.
In the first place, stock markets have been taken by surprise throughout history. In the present cycle, neither the market nor its cheerleaders saw this recession coming, so why should anyone believe that these fonts of wisdom have suddenly become clairvoyant?
According to government statistics, the recession began in December 2007. Two months earlier, in October, the Dow Jones Industrial Average and S&P 500 both hit all-time record highs. Exactly what foresight did this run-up provide? Obviously markets were completely blind-sided by the biggest recession since the Great Depression. In fact, the main reason why the markets sold off so violently in 2008, after the severity of the recession became impossible to ignore, was that they had so completely misread the economy in the preceding years.
Furthermore, throughout most of 2008, even as the economy was contracting, academic economists and stock market strategists were still confident that a recession would be avoided. If they could not even forecast a recession that had already started, how can they possibly predict when it will end? In contrast, on a Fox News appearance on December 31, 2007, I endured the gibes of optimistic co-panelists when I clearly proclaimed that a recession was underway.
Rising US stock prices, particularly following a 50% decline, mean nothing regarding the health of the US economy or the prospects for a recovery. In fact, relative to the meteoric rise of foreign stock markets over the past six months, US stocks are standing still. If anything, it is the strength in overseas markets that is dragging US stocks along for the ride.
In late 2008 and early 2009, the "experts" proclaimed that a strengthening US dollar and the relative outperformance of US stocks during the worldwide market sell-off meant that the US would lead the global recovery. At the time, they argued that since we were the first economy to go into recession, we would be the first to come out. They claimed that as bad as things were domestically, they were even worse internationally, and that the bold and "stimulative" actions of our policymakers would lead to a far better outcome here than the much more "timid" responses pursued by other leading industrial economies.
At the time, I dismissed these claims as nonsensical. The data are once again proving my case. The brief period of relative outperformance by US stocks in late 2008 has come to an end, and, after rising for most of last year, the dollar has resumed its long-term descent. If the US economy really were improving, the dollar would be strengthening - not weakening.
The economic data would also show greater improvement at home than abroad. Instead, foreign stocks have resumed the meteoric rise that has characterized their past decade. The rebound in global stocks reflects the global economic train decoupling from the American caboose, which the "experts" said was impossible.
Though the worst of the global financial crisis may have passed, the real impact of the much more fundamental US economic crisis has yet to be fully felt. For America, genuine recovery will not begin until current government policies are mitigated. Most urgently, we need a Federal Reserve chairman willing to administer the tough love that our economy so badly needs. That fact that Ben Bernanke remains so popular both on Wall Street and Capitol Hill is indicative of just how badly he has handled his job.
Contrast Bernanke's popularity to the contempt that many had for Fed chairman Paul Volcker in the early days of Ronald Reagan's first term. There were numerous bills and congressional resolutions demanding his impeachment, and even conservative congressman Jack Kemp called for Volcker to resign.
Had it not been for the unconditional support of a very popular president, efforts to oust Volcker likely would have succeeded. Though he was widely vilified initially, he eventually won near unanimous praise for his courageous economic stewardship, which eventually broke the back of inflation, restored confidence in the dollar and set the stage for a vibrant recovery. Conversely, Bernanke's reputation will be shattered as history reveals the full extent of his incompetence and cowardice.
As Congress and the president consider the best policies to right our economic ship, it is my hope that they will pursue a strategy first developed by Seinfeld character George Costanza. After wisely recognizing that every instinct he had had up unto that point had ended in failure, George decided that to be successful, he had to do the exact opposite of whatever his instincts told him. I suggest our policymakers give this approach a try.
Peter Schiff is president of Euro Pacific Capital and author of The Little Book of Bull Moves in Bear Markets.
There is an inexplicable, but somehow widely held, belief that stock market movements are predictive of economic conditions. As such, the present rally in US stock prices has caused many people to conclude that the recession is nearing an end.
The widespread optimism is not confined to Wall Street, as even President Barack Obama has pointed to the bubbly markets to vindicate his economic policies. However, reality is clearly at odds with these optimistic assumptions.
In the first place, stock markets have been taken by surprise throughout history. In the present cycle, neither the market nor its cheerleaders saw this recession coming, so why should anyone believe that these fonts of wisdom have suddenly become clairvoyant?
According to government statistics, the recession began in December 2007. Two months earlier, in October, the Dow Jones Industrial Average and S&P 500 both hit all-time record highs. Exactly what foresight did this run-up provide? Obviously markets were completely blind-sided by the biggest recession since the Great Depression. In fact, the main reason why the markets sold off so violently in 2008, after the severity of the recession became impossible to ignore, was that they had so completely misread the economy in the preceding years.
Furthermore, throughout most of 2008, even as the economy was contracting, academic economists and stock market strategists were still confident that a recession would be avoided. If they could not even forecast a recession that had already started, how can they possibly predict when it will end? In contrast, on a Fox News appearance on December 31, 2007, I endured the gibes of optimistic co-panelists when I clearly proclaimed that a recession was underway.
Rising US stock prices, particularly following a 50% decline, mean nothing regarding the health of the US economy or the prospects for a recovery. In fact, relative to the meteoric rise of foreign stock markets over the past six months, US stocks are standing still. If anything, it is the strength in overseas markets that is dragging US stocks along for the ride.
In late 2008 and early 2009, the "experts" proclaimed that a strengthening US dollar and the relative outperformance of US stocks during the worldwide market sell-off meant that the US would lead the global recovery. At the time, they argued that since we were the first economy to go into recession, we would be the first to come out. They claimed that as bad as things were domestically, they were even worse internationally, and that the bold and "stimulative" actions of our policymakers would lead to a far better outcome here than the much more "timid" responses pursued by other leading industrial economies.
At the time, I dismissed these claims as nonsensical. The data are once again proving my case. The brief period of relative outperformance by US stocks in late 2008 has come to an end, and, after rising for most of last year, the dollar has resumed its long-term descent. If the US economy really were improving, the dollar would be strengthening - not weakening.
The economic data would also show greater improvement at home than abroad. Instead, foreign stocks have resumed the meteoric rise that has characterized their past decade. The rebound in global stocks reflects the global economic train decoupling from the American caboose, which the "experts" said was impossible.
Though the worst of the global financial crisis may have passed, the real impact of the much more fundamental US economic crisis has yet to be fully felt. For America, genuine recovery will not begin until current government policies are mitigated. Most urgently, we need a Federal Reserve chairman willing to administer the tough love that our economy so badly needs. That fact that Ben Bernanke remains so popular both on Wall Street and Capitol Hill is indicative of just how badly he has handled his job.
Contrast Bernanke's popularity to the contempt that many had for Fed chairman Paul Volcker in the early days of Ronald Reagan's first term. There were numerous bills and congressional resolutions demanding his impeachment, and even conservative congressman Jack Kemp called for Volcker to resign.
Had it not been for the unconditional support of a very popular president, efforts to oust Volcker likely would have succeeded. Though he was widely vilified initially, he eventually won near unanimous praise for his courageous economic stewardship, which eventually broke the back of inflation, restored confidence in the dollar and set the stage for a vibrant recovery. Conversely, Bernanke's reputation will be shattered as history reveals the full extent of his incompetence and cowardice.
As Congress and the president consider the best policies to right our economic ship, it is my hope that they will pursue a strategy first developed by Seinfeld character George Costanza. After wisely recognizing that every instinct he had had up unto that point had ended in failure, George decided that to be successful, he had to do the exact opposite of whatever his instincts told him. I suggest our policymakers give this approach a try.
Peter Schiff is president of Euro Pacific Capital and author of The Little Book of Bull Moves in Bear Markets.
Moron capitalism
tr
By Julian Delasantellis
Former top gun Fidelity Investments stock picker Peter Lynch used to advise investors to "invest in what you know" as the key to picking potentially profitable equities. Thus, instead of analyzing endless investment arcana such as price/earnings ratios or momentum oscillators, he said that the amateur stock picker could do just as well by finding good products, be they laundry detergents or instant coffee, and just buy the stocks of these companies.
One of Lynch's best picks, that of Reebok far before it got hot, was not the result of diligent, MBA-level financial analysis; it came into mind when he saw all the teenagers at what he had been told were the cool local hangouts wearing Reeboks.
But what if it were the other way around? What if, instead of providing a nice snug fit, a person who put on a new pair of Reeboks had their foot lacerated by ground glass purposely sewn into the innersole, and still the stock rose? What if a hot new instant coffee seeing its stock rally every day had on its jar a warning to "consult your physician before using if overly sensitive to arsenic?"
What if the proprietor of Monty Python's famed Whizzo Chocolate Company saw his company's shares skyrocketing, even though prominent among the firm's product line were confections such as "ram's bladder cup", "garnished with lark's vomit", "cockroach cluster", "anthrax ripple", "crunchy frog", made with "only the finest baby frogs, dew picked and flown from Iraq, cleansed in finest quality spring water, lightly killed, and then sealed in a succulent Swiss quintuple smooth treble cream milk chocolate envelope and lovingly frosted with glucose ," and "Spring Surprise", the surprise in that treat being that it features, after you put in your mouth, "steel bolts spring out and plunge straight through both cheeks".
If you think that investors would never reward corporate performance such as this, you haven't seen what's been going on in the share prices of some big US banks and financial institutions lately.
A common moniker used to describe government infrastructure spending projects ready to be funded is that the projects are affirmed to be "shovel ready", but no project is more ready and eagerly awaited than to have the world's stockmarkets dig and climb out of the deep ditches they threw themselves into last September.
Much has been accomplished since most world markets bottomed out in early March; the Dow Jones Industrial Average is up by more than 3,000 points, or over 50%, but for most of August the rescuers seem to have taken a break, with the benchmark index only rising 4% up to August 28, as opposed to an over 8.5% rise in July. The rescuers probably needed a break; there's just so much more further to go.
But like all the serious denizens of Bacchus know, that there's always a party going on somewhere, so it was with stocks in August. That revelry was quite surprising, for it happened to be located at what many informed observers quite correctly assume to be American finance's most fulsome foundation of feculence, the stocks of its major financial institutions.
Yes, you would have done a lot better than the general averages in August with the BIX, the nationwide banking stock index that purposely excludes the shares of the big New York "money center" banks - it was up about 20% for the month. The banking index that dares to take a bite of the big apple, and its big stocks, the KBW, struggled by with only about a 3% rise in share value.
So was that the moneymaking secret for August, banks and financial stocks, just not very big ones? Was the market still punishing the big money-center banks for their wanton and callous profligacy in tranching, bundling and selling all those worthless mortgage-backed collateralized debt obligations? In pushing capital towards smaller, even small town, American finance, was the market finally offering up a belated mea culpa for being so disastrously wrong in following the siren songs of those glittering metropolis lotharios into worldwide catastrophe?
Not on your life. In the same way that St Augustine once pleaded to the Lord to "make me good, but not just yet", American capital, reaching again for the brass ring, is apparently out for another spin with Mr Danger.
Almost all August US stock averages, especially the ones that deal in finance, are grossly distorted by the performance of just five singular names, Citigroup, which was up almost 65% for the month to August 28, Bank of America, up 21.5%, Fannie Mae, up 251%, Freddie Mac, up 287%.
In much the same way that the Yiddish word chutzpah is defined as a man who kills his parents and then begs the court for leniency because he is an orphan, investors in the stock of American International Group, the company whose over-enthusiastic embrace of credit default swaps torpedoed the economy of the entire planet when the company failed, actually had the chutzpah to enjoy its now ward-of-the-state's 282% rise in August. (For an account of credit default swaps see Jaws close in on Bernanke, Asia Times Online, July 16, 2008.)
For the sake of comparison, Goldman Sachs, a bank now making so much money that no one really knows or understands how, had to settle for a paltry, puny August rise in its stock of under 1%.
Not only are these five delinquents August's best show in town, it's almost that they were the only show in town. According to Matt Phillips in the Wall Street Journal, for most of the month, trading in just these five stocks alone has represented just under a third of the total volume on the New York Stock Exchange. Last Monday, August 24, it was over 43% of total; NYSE volume being accounted for by just these stocks.
Phillips has rounded up a now usual suspect for the extraordinary price and volume moves - the "high frequency" flash trading I discussed last month in relation to Goldman Sachs. (See Goldman Sachs - the lords of time, Asia Times Online, August 5, 2009.)
I have my doubts as to whether these rallies result from flash/high-frequency trading; for one thing, most of the exchanges banned flash trading following its existence becoming public knowledge. I'm not sure that Goldman, or anyone for that matter, would want to be rubbing the regulators' noses in the dirt so soon after essentially promising to be forever more on their best behavior.
Also, high-frequency trading does not usually influence the trend, or direction, of stock prices in the manner that something is doing with these shares - unless Goldman Sachs is pulling a new rabbit through a very new hat, high-frequency trading seems to be a stretch here.
Finally, if it is high-frequency/flash trading, it's not rewarding, as judged by the becalmed stock price of the acknowledged sensei in the practice, Goldman Sachs. There's not much fun in being a master of the universe like Goldman if little peons can blow your ears off while leaving you behind the dust.
On CNBC, Charles Gasparino suggests that this is all just small-time shorts finally throwing in the towel with purchases to close out their positions; if enough do that in a short period of time, it can have dramatic effects on a company's stock price. Still, since most of these stocks had already bottomed in the spring, the Gasparino hypothesis seems to imply that the shorts had held onto these positions long after they had reached their maximum profitability and were content to sit there and lose money with them from March until August.
So what was it that lit the fires under, in an American universe of about 6,000 traded stocks, these particular five stocks? What lit the new guns of August?
In the files that police agencies keep on criminals are detailed listings of who or what are the other criminals or gangs the socially undesirables hang out with; an analysis of the associations of the five here goes a long way to crack the case.
Fannie Mae, Freddie Mac, American International Group, Citigroup and Bank of America - these were all Paulson's Plunderers, the trigger men for the caper that brought the world economy down to its knees starting in the summer of 2008, when Henry Paulson was still Treasury secretary.
After Bear Stearns fell in March last year, there were a few brief months of peace that allowed laissez faire sycophants the opportunity to bleat on that the entire financial crisis was a lion with more roar than bite. Now we know that the actual economy had by then already entered the worst economic pullback since the Great Depression, even as promises were made that the skies were to be forever bright as long as the upper incomes were further fattened with tax cuts from out of re-elected conservative administrations.
Then, in July, Fannie Mae and Freddie Mac began to stumble under the crushing weight of the collapsing US housing market. At first, Paulson's US Treasury thought that all these two government-sponsored enterprises needed was just making the implicit guarantees of the pair a little bit more explicit, but this tourniquet did very little to staunch the bleeding. On September 7, it was announced that the two were being placed under "receivership", defined in this circumstance as what professed free-market conservatives call nationalizing a company when their ideology prevents them from admitting that they're nationalizing it.
Lehman fell early on the following Monday, AIG the following day. By October, the barbarians were well past the gate and were assaulting the throne, causing an electronic "run" at Citigroup, then the world's largest private financial institution. Citigroup necessitated a few successive US government rescue packages before the stock stabilized early this year. Bank of America, this August's stock-price laggard among the fabulous five, never seems to have been in much of the imminent danger of collapse that the other four went through, but it still walked away with US$45 billion of US government financial system support/TARP money.
Adding that to the estimated $400 billion both the US government and Federal Reserve spent to refloat the GSEs, the $150 billion bailout of AIG, Citigroup's pocketing of $45 billion in TARP as well as its receipt of a government guarantee of up to $272 billion of its potentially diciest mortgage derivative debt, and you come to the conclusion that, in under one year, the US government has either pledged or proffered about $900 billion just to these five companies alone - roughly the low end of the range for the 10-year total cost of President Barack Obama's health plan.
All these emergency system rescues and developments were the bastardized orphans of the braying hounds of crisis; nobody, least of all former Goldman Sachs Golden God Paulson, would have in calmer times adopted a plan to react to a financial crisis in these peripatetic fashions. Indeed, just prior to the Lehman catastrophe, there was speculation that Paulson was going to turn away the next supplicant pleading for more government porridge, and, in doing so, reaffirm to the markets that, indeed, no one was too big to fail.
Late last August, three weeks before the failure of Lehman and AIG, I expounded on some of this thinking in that last, glorious summer of faux prosperity. (See, Tough love's fatal attraction, Asia Times Online, August 27, 2008).
The question then becomes, have all these factors, particularly the diverse, sometimes inchoate opposition to the manner in which the government financial elite has recruited from the private sector is reaching back to save their buddies (and their future jobs) in the private sector sufficient to stop any further rescues of the financial sector? Is the next supplicant, maybe Lehman Brothers, maybe once again Fannie and Freddie, to knock on the door of Paulson, [Federal Reserve chairman Ben] Bernanke and [Securities and Exchange Commission chairman Christopher] Cox saying that they're too big to fail going to be told that, in actuality, they're not?
It's not hard to imagine the consequences of such a denial. However soothing such a stand on free-market principle would undoubtedly sound to those seduced down the Pied Piper's road by ideology, for the rest of us the results would be catastrophic.
Then Lehman and AIG fell, then the deluge - it was catastrophic. In the three weeks following, the Dow Jones Industrial Average lost 3,700 points, about a third of its value.
Paulson's sentiments changed very quickly, as I described they would in that August 27 article. As in John Lennon's 1969 song of the misery of drug withdrawal, Cold Turkey, Paulson desperately wanted to once again start feeding the financial system's addiction to the government needle - "Oh, I'll be a good boy, please, make me well. I promise you anything, get me out of this hell."
How Paulson, followed by Obama Treasury Secretary Timothy Geithner, got out of his hell was to affirm, in statement and in very expensive deed, that most major American financial institutions were, indeed, too big too fail. The establishment of what blogger Barry Ritholtz calls "Bailout Nation" has sent the US federal budget deficit and debt numbers spinning to record highs like Las Vegas slot machines, and provided the seed for the gaseous inchoate populism of the teabag movement currently savaging Democratic solons at their town halls - but, as of yet, it has kept the US and much of the rest of the world's financial system intact, something that was thought to be not at all that certain back on Lehman weekend last year.
And a year later, on the stock market, the first are last and the last first. Why?
For the answer to that, you can look to your own behavior. What prevents you from doing really, really stupid things? If your $5,000 mortgage payment is due, what prevents you from using that money to instead cover the two hectares of the town's football pitch with 50 centimeters of cotton candy? What prevents you, should you see your surgeon in the cafeteria prior to your scheduled surgery, from slipping him some Scotch in his coffee when he's not looking? If you're on an airplane that you see is passing over your neighborhood, what stops you from opening the door, jumping out, and thus bypassing the terrible luggage carrel lines?
The answer is that there would be substantial negative costs, in terms of your health and wealth, to all that behavior. You would lose your home with the candy stunt, an internal organ or worse with your surgeon's mickey, probably your life leaving the airplane.
But what if this was not true, what if you were protected from the consequences of your worst decisions? You blow $5,000, but someone is there to give you another big check; you've got another surgeon to operate on you, or a parachute to put on as you leave the plane.
In other words, if you were continually bailed out of your worst, most risky decisions, wouldn't you do a lot more of them?
What is "too big to fail" but a government promise to bail out the banks come what may? As investors come to realize the influence and motivations of this now huge new market-influencing player, relationships and previously established market practices are changing, and that's what we are seeing in the outsized performances of Paulson's plunderers this month.
If "too big to fail" is no longer seen as a policy result to be avoided, but as a free ticket for a bank or other financial institution to receive nearly lifetime government protection, then it's not all that surprising that banks that now see themselves as too skinny to receive the government protection are trying to fatten up a bit.
Just in 2008, Wells Fargo's combined assets grew by 43% after swallowing up Wachovia; JP Morgan Chase's increased by 53%, after it assumed control of Bear Stearns and Washington Mutual. The Washington Post recently reported an unintended consequence of the rush from the huge to the gargantuan; the bigger banks, operating under the presumed guarantee of the government, are borrowing cheaper than smaller banks in the money markets - lenders apparently, with very good reason, feel that their loans to institutions that the government will be forced to stand behind are a safer bet than loans to smaller banks and financial institutions that the government might let fail.
As a result, local competition for customers among banks in America's small towns and communities is becoming a thing of the past; America's vaunted small-bank centered financial system, significant in the dynamism of the country's small-business-based economy, may soon, in a manner reminiscent of local retailers being put out of business and replaced by such national competitors as Wal-Mart and Target, be signified by, from sea to shining sea, just having a Chase or JP Morgan on one corner, and a Bank of America or Wells Fargo on the opposite.
If both the banks and their investors feel that the negative consequences of excessive risk, loan default and insolvency, are being handled by the government, it can't be all that surprising that both the banks and their investors are hungry to whet their palette with more of it. Some reports have it that the big banks are wading back into the market for highly leveraged mortgage-backed securities, the same type of instrument that sunk them the first time.
But at that time they didn't have the implied government guarantee. That frees the banks to make relatively risk-free decisions to take on more risk, and it frees the bank investors to engage in the mad bidding for big bank shares we are now seeing.
Mind you, this is in no way a prediction for endlessly sunny skies in the financial sector as a whole; on the other side of the banks being protected by the government camp's barbed-wire fence things are pretty lousy. Twenty percent of US banks lost money in the first quarter, and these days not a Friday goes by without the Federal Deposit Insurance Corporation's commissioner, Sheila Barr's bank closure team being dispatched into the heartland to put more financial institutions out of their misery - last week three banks, in California, Maryland and Minnesota, met their fate as their doors closed for the last time.
Already, 84 US banks have been seized by the FDIC this year, and its list of "problem banks" has swollen to 416. Since it is highly doubtful to more likely absolutely impossible that Obama will be sending out Geithner's cavalry to save this bunch, as one wag put it recently in the Huffington Post, perhaps the best operating investment philosophy for these curious times might be to "sell the FDIC [small banks] and buy the TARP" (big banks).
It's not as if the Obama administration does not see the inherent dangers of allowing the big financial institutions to plunder the countryside with too big to fail, but, during the current moment, Obama can ill-afford the poll-busting consequences of another Lehman shock, just as George W Bush and Paulson couldn't.
The Obama financial reform plan, released in June, did not call on the big banks to be broken or split up into more of a regulation-friendly size (the now trademark Obama/Geithner caution in dealing with the financial system was once again on obvious display there), but it did call for extra auditing, extra "stress tests" for the biggies, presumably to steer them in the right direction before they sail right off over another precipice.
Still, the entire financial reform effort has degenerated into one big semi-public sniping match between Geithner and Barr; besides, one wonders just how many more fights Obama will have the stomach for once he emerges bloodied, battered and bruised - whether he wins or loses - with healthcare.
All these things are undoubtedly seen by the players bidding up the big banks' stocks. Why not? This is probably as close to a sure thing as you're ever going to get in investing. Heads, the extra risk pays off, tails it doesn't, but you still get bailed out by the government.
As for Peter Lynch's dictum to "invest in what you know", well I know that this system, one that rewards the corpulent incompetents of the banking system over those who display innovation and entrepreneurialism, is just about the most dysfunctional thing I've ever seen; it's a virtual plea for foreign scavengers to come in and buy up the system's assets on the cheap.
Perhaps a future economics teacher, after lecturing on the previous historical epochs of agricultural capitalism, feudal capitalism, industrial capitalism and finance capitalism, will look down into his textbook to see the chapter heading that covers our current era - "moron capitalism".
Julian Delasantellis is a management consultant, private investor and educator in international business in the US state of Washington. He can be reached at juliandelasantellis@yahoo.com.
By Julian Delasantellis
Former top gun Fidelity Investments stock picker Peter Lynch used to advise investors to "invest in what you know" as the key to picking potentially profitable equities. Thus, instead of analyzing endless investment arcana such as price/earnings ratios or momentum oscillators, he said that the amateur stock picker could do just as well by finding good products, be they laundry detergents or instant coffee, and just buy the stocks of these companies.
One of Lynch's best picks, that of Reebok far before it got hot, was not the result of diligent, MBA-level financial analysis; it came into mind when he saw all the teenagers at what he had been told were the cool local hangouts wearing Reeboks.
But what if it were the other way around? What if, instead of providing a nice snug fit, a person who put on a new pair of Reeboks had their foot lacerated by ground glass purposely sewn into the innersole, and still the stock rose? What if a hot new instant coffee seeing its stock rally every day had on its jar a warning to "consult your physician before using if overly sensitive to arsenic?"
What if the proprietor of Monty Python's famed Whizzo Chocolate Company saw his company's shares skyrocketing, even though prominent among the firm's product line were confections such as "ram's bladder cup", "garnished with lark's vomit", "cockroach cluster", "anthrax ripple", "crunchy frog", made with "only the finest baby frogs, dew picked and flown from Iraq, cleansed in finest quality spring water, lightly killed, and then sealed in a succulent Swiss quintuple smooth treble cream milk chocolate envelope and lovingly frosted with glucose ," and "Spring Surprise", the surprise in that treat being that it features, after you put in your mouth, "steel bolts spring out and plunge straight through both cheeks".
If you think that investors would never reward corporate performance such as this, you haven't seen what's been going on in the share prices of some big US banks and financial institutions lately.
A common moniker used to describe government infrastructure spending projects ready to be funded is that the projects are affirmed to be "shovel ready", but no project is more ready and eagerly awaited than to have the world's stockmarkets dig and climb out of the deep ditches they threw themselves into last September.
Much has been accomplished since most world markets bottomed out in early March; the Dow Jones Industrial Average is up by more than 3,000 points, or over 50%, but for most of August the rescuers seem to have taken a break, with the benchmark index only rising 4% up to August 28, as opposed to an over 8.5% rise in July. The rescuers probably needed a break; there's just so much more further to go.
But like all the serious denizens of Bacchus know, that there's always a party going on somewhere, so it was with stocks in August. That revelry was quite surprising, for it happened to be located at what many informed observers quite correctly assume to be American finance's most fulsome foundation of feculence, the stocks of its major financial institutions.
Yes, you would have done a lot better than the general averages in August with the BIX, the nationwide banking stock index that purposely excludes the shares of the big New York "money center" banks - it was up about 20% for the month. The banking index that dares to take a bite of the big apple, and its big stocks, the KBW, struggled by with only about a 3% rise in share value.
So was that the moneymaking secret for August, banks and financial stocks, just not very big ones? Was the market still punishing the big money-center banks for their wanton and callous profligacy in tranching, bundling and selling all those worthless mortgage-backed collateralized debt obligations? In pushing capital towards smaller, even small town, American finance, was the market finally offering up a belated mea culpa for being so disastrously wrong in following the siren songs of those glittering metropolis lotharios into worldwide catastrophe?
Not on your life. In the same way that St Augustine once pleaded to the Lord to "make me good, but not just yet", American capital, reaching again for the brass ring, is apparently out for another spin with Mr Danger.
Almost all August US stock averages, especially the ones that deal in finance, are grossly distorted by the performance of just five singular names, Citigroup, which was up almost 65% for the month to August 28, Bank of America, up 21.5%, Fannie Mae, up 251%, Freddie Mac, up 287%.
In much the same way that the Yiddish word chutzpah is defined as a man who kills his parents and then begs the court for leniency because he is an orphan, investors in the stock of American International Group, the company whose over-enthusiastic embrace of credit default swaps torpedoed the economy of the entire planet when the company failed, actually had the chutzpah to enjoy its now ward-of-the-state's 282% rise in August. (For an account of credit default swaps see Jaws close in on Bernanke, Asia Times Online, July 16, 2008.)
For the sake of comparison, Goldman Sachs, a bank now making so much money that no one really knows or understands how, had to settle for a paltry, puny August rise in its stock of under 1%.
Not only are these five delinquents August's best show in town, it's almost that they were the only show in town. According to Matt Phillips in the Wall Street Journal, for most of the month, trading in just these five stocks alone has represented just under a third of the total volume on the New York Stock Exchange. Last Monday, August 24, it was over 43% of total; NYSE volume being accounted for by just these stocks.
Phillips has rounded up a now usual suspect for the extraordinary price and volume moves - the "high frequency" flash trading I discussed last month in relation to Goldman Sachs. (See Goldman Sachs - the lords of time, Asia Times Online, August 5, 2009.)
I have my doubts as to whether these rallies result from flash/high-frequency trading; for one thing, most of the exchanges banned flash trading following its existence becoming public knowledge. I'm not sure that Goldman, or anyone for that matter, would want to be rubbing the regulators' noses in the dirt so soon after essentially promising to be forever more on their best behavior.
Also, high-frequency trading does not usually influence the trend, or direction, of stock prices in the manner that something is doing with these shares - unless Goldman Sachs is pulling a new rabbit through a very new hat, high-frequency trading seems to be a stretch here.
Finally, if it is high-frequency/flash trading, it's not rewarding, as judged by the becalmed stock price of the acknowledged sensei in the practice, Goldman Sachs. There's not much fun in being a master of the universe like Goldman if little peons can blow your ears off while leaving you behind the dust.
On CNBC, Charles Gasparino suggests that this is all just small-time shorts finally throwing in the towel with purchases to close out their positions; if enough do that in a short period of time, it can have dramatic effects on a company's stock price. Still, since most of these stocks had already bottomed in the spring, the Gasparino hypothesis seems to imply that the shorts had held onto these positions long after they had reached their maximum profitability and were content to sit there and lose money with them from March until August.
So what was it that lit the fires under, in an American universe of about 6,000 traded stocks, these particular five stocks? What lit the new guns of August?
In the files that police agencies keep on criminals are detailed listings of who or what are the other criminals or gangs the socially undesirables hang out with; an analysis of the associations of the five here goes a long way to crack the case.
Fannie Mae, Freddie Mac, American International Group, Citigroup and Bank of America - these were all Paulson's Plunderers, the trigger men for the caper that brought the world economy down to its knees starting in the summer of 2008, when Henry Paulson was still Treasury secretary.
After Bear Stearns fell in March last year, there were a few brief months of peace that allowed laissez faire sycophants the opportunity to bleat on that the entire financial crisis was a lion with more roar than bite. Now we know that the actual economy had by then already entered the worst economic pullback since the Great Depression, even as promises were made that the skies were to be forever bright as long as the upper incomes were further fattened with tax cuts from out of re-elected conservative administrations.
Then, in July, Fannie Mae and Freddie Mac began to stumble under the crushing weight of the collapsing US housing market. At first, Paulson's US Treasury thought that all these two government-sponsored enterprises needed was just making the implicit guarantees of the pair a little bit more explicit, but this tourniquet did very little to staunch the bleeding. On September 7, it was announced that the two were being placed under "receivership", defined in this circumstance as what professed free-market conservatives call nationalizing a company when their ideology prevents them from admitting that they're nationalizing it.
Lehman fell early on the following Monday, AIG the following day. By October, the barbarians were well past the gate and were assaulting the throne, causing an electronic "run" at Citigroup, then the world's largest private financial institution. Citigroup necessitated a few successive US government rescue packages before the stock stabilized early this year. Bank of America, this August's stock-price laggard among the fabulous five, never seems to have been in much of the imminent danger of collapse that the other four went through, but it still walked away with US$45 billion of US government financial system support/TARP money.
Adding that to the estimated $400 billion both the US government and Federal Reserve spent to refloat the GSEs, the $150 billion bailout of AIG, Citigroup's pocketing of $45 billion in TARP as well as its receipt of a government guarantee of up to $272 billion of its potentially diciest mortgage derivative debt, and you come to the conclusion that, in under one year, the US government has either pledged or proffered about $900 billion just to these five companies alone - roughly the low end of the range for the 10-year total cost of President Barack Obama's health plan.
All these emergency system rescues and developments were the bastardized orphans of the braying hounds of crisis; nobody, least of all former Goldman Sachs Golden God Paulson, would have in calmer times adopted a plan to react to a financial crisis in these peripatetic fashions. Indeed, just prior to the Lehman catastrophe, there was speculation that Paulson was going to turn away the next supplicant pleading for more government porridge, and, in doing so, reaffirm to the markets that, indeed, no one was too big to fail.
Late last August, three weeks before the failure of Lehman and AIG, I expounded on some of this thinking in that last, glorious summer of faux prosperity. (See, Tough love's fatal attraction, Asia Times Online, August 27, 2008).
The question then becomes, have all these factors, particularly the diverse, sometimes inchoate opposition to the manner in which the government financial elite has recruited from the private sector is reaching back to save their buddies (and their future jobs) in the private sector sufficient to stop any further rescues of the financial sector? Is the next supplicant, maybe Lehman Brothers, maybe once again Fannie and Freddie, to knock on the door of Paulson, [Federal Reserve chairman Ben] Bernanke and [Securities and Exchange Commission chairman Christopher] Cox saying that they're too big to fail going to be told that, in actuality, they're not?
It's not hard to imagine the consequences of such a denial. However soothing such a stand on free-market principle would undoubtedly sound to those seduced down the Pied Piper's road by ideology, for the rest of us the results would be catastrophic.
Then Lehman and AIG fell, then the deluge - it was catastrophic. In the three weeks following, the Dow Jones Industrial Average lost 3,700 points, about a third of its value.
Paulson's sentiments changed very quickly, as I described they would in that August 27 article. As in John Lennon's 1969 song of the misery of drug withdrawal, Cold Turkey, Paulson desperately wanted to once again start feeding the financial system's addiction to the government needle - "Oh, I'll be a good boy, please, make me well. I promise you anything, get me out of this hell."
How Paulson, followed by Obama Treasury Secretary Timothy Geithner, got out of his hell was to affirm, in statement and in very expensive deed, that most major American financial institutions were, indeed, too big too fail. The establishment of what blogger Barry Ritholtz calls "Bailout Nation" has sent the US federal budget deficit and debt numbers spinning to record highs like Las Vegas slot machines, and provided the seed for the gaseous inchoate populism of the teabag movement currently savaging Democratic solons at their town halls - but, as of yet, it has kept the US and much of the rest of the world's financial system intact, something that was thought to be not at all that certain back on Lehman weekend last year.
And a year later, on the stock market, the first are last and the last first. Why?
For the answer to that, you can look to your own behavior. What prevents you from doing really, really stupid things? If your $5,000 mortgage payment is due, what prevents you from using that money to instead cover the two hectares of the town's football pitch with 50 centimeters of cotton candy? What prevents you, should you see your surgeon in the cafeteria prior to your scheduled surgery, from slipping him some Scotch in his coffee when he's not looking? If you're on an airplane that you see is passing over your neighborhood, what stops you from opening the door, jumping out, and thus bypassing the terrible luggage carrel lines?
The answer is that there would be substantial negative costs, in terms of your health and wealth, to all that behavior. You would lose your home with the candy stunt, an internal organ or worse with your surgeon's mickey, probably your life leaving the airplane.
But what if this was not true, what if you were protected from the consequences of your worst decisions? You blow $5,000, but someone is there to give you another big check; you've got another surgeon to operate on you, or a parachute to put on as you leave the plane.
In other words, if you were continually bailed out of your worst, most risky decisions, wouldn't you do a lot more of them?
What is "too big to fail" but a government promise to bail out the banks come what may? As investors come to realize the influence and motivations of this now huge new market-influencing player, relationships and previously established market practices are changing, and that's what we are seeing in the outsized performances of Paulson's plunderers this month.
If "too big to fail" is no longer seen as a policy result to be avoided, but as a free ticket for a bank or other financial institution to receive nearly lifetime government protection, then it's not all that surprising that banks that now see themselves as too skinny to receive the government protection are trying to fatten up a bit.
Just in 2008, Wells Fargo's combined assets grew by 43% after swallowing up Wachovia; JP Morgan Chase's increased by 53%, after it assumed control of Bear Stearns and Washington Mutual. The Washington Post recently reported an unintended consequence of the rush from the huge to the gargantuan; the bigger banks, operating under the presumed guarantee of the government, are borrowing cheaper than smaller banks in the money markets - lenders apparently, with very good reason, feel that their loans to institutions that the government will be forced to stand behind are a safer bet than loans to smaller banks and financial institutions that the government might let fail.
As a result, local competition for customers among banks in America's small towns and communities is becoming a thing of the past; America's vaunted small-bank centered financial system, significant in the dynamism of the country's small-business-based economy, may soon, in a manner reminiscent of local retailers being put out of business and replaced by such national competitors as Wal-Mart and Target, be signified by, from sea to shining sea, just having a Chase or JP Morgan on one corner, and a Bank of America or Wells Fargo on the opposite.
If both the banks and their investors feel that the negative consequences of excessive risk, loan default and insolvency, are being handled by the government, it can't be all that surprising that both the banks and their investors are hungry to whet their palette with more of it. Some reports have it that the big banks are wading back into the market for highly leveraged mortgage-backed securities, the same type of instrument that sunk them the first time.
But at that time they didn't have the implied government guarantee. That frees the banks to make relatively risk-free decisions to take on more risk, and it frees the bank investors to engage in the mad bidding for big bank shares we are now seeing.
Mind you, this is in no way a prediction for endlessly sunny skies in the financial sector as a whole; on the other side of the banks being protected by the government camp's barbed-wire fence things are pretty lousy. Twenty percent of US banks lost money in the first quarter, and these days not a Friday goes by without the Federal Deposit Insurance Corporation's commissioner, Sheila Barr's bank closure team being dispatched into the heartland to put more financial institutions out of their misery - last week three banks, in California, Maryland and Minnesota, met their fate as their doors closed for the last time.
Already, 84 US banks have been seized by the FDIC this year, and its list of "problem banks" has swollen to 416. Since it is highly doubtful to more likely absolutely impossible that Obama will be sending out Geithner's cavalry to save this bunch, as one wag put it recently in the Huffington Post, perhaps the best operating investment philosophy for these curious times might be to "sell the FDIC [small banks] and buy the TARP" (big banks).
It's not as if the Obama administration does not see the inherent dangers of allowing the big financial institutions to plunder the countryside with too big to fail, but, during the current moment, Obama can ill-afford the poll-busting consequences of another Lehman shock, just as George W Bush and Paulson couldn't.
The Obama financial reform plan, released in June, did not call on the big banks to be broken or split up into more of a regulation-friendly size (the now trademark Obama/Geithner caution in dealing with the financial system was once again on obvious display there), but it did call for extra auditing, extra "stress tests" for the biggies, presumably to steer them in the right direction before they sail right off over another precipice.
Still, the entire financial reform effort has degenerated into one big semi-public sniping match between Geithner and Barr; besides, one wonders just how many more fights Obama will have the stomach for once he emerges bloodied, battered and bruised - whether he wins or loses - with healthcare.
All these things are undoubtedly seen by the players bidding up the big banks' stocks. Why not? This is probably as close to a sure thing as you're ever going to get in investing. Heads, the extra risk pays off, tails it doesn't, but you still get bailed out by the government.
As for Peter Lynch's dictum to "invest in what you know", well I know that this system, one that rewards the corpulent incompetents of the banking system over those who display innovation and entrepreneurialism, is just about the most dysfunctional thing I've ever seen; it's a virtual plea for foreign scavengers to come in and buy up the system's assets on the cheap.
Perhaps a future economics teacher, after lecturing on the previous historical epochs of agricultural capitalism, feudal capitalism, industrial capitalism and finance capitalism, will look down into his textbook to see the chapter heading that covers our current era - "moron capitalism".
Julian Delasantellis is a management consultant, private investor and educator in international business in the US state of Washington. He can be reached at juliandelasantellis@yahoo.com.
Om's best cricket season so far as a bowler
Bowling Statistics - Granta Under 11a/ 2009 summer
| Name | Overs | Maidens | Runs | Wkts | Best Bowling | 5WH | Econ | S-R | Ave | Bowled (%) | Caught (%) | LBW (%) | Stumped (%) | %Team Wkts |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Om Menon | 23 | 3 | 81 | 16 | 4/3 | 0 | 3.52 | 8.63 | 5.06 | 6 (37.5) | 5 (31.25) | 1 (6.25) | 4 (25) | 31.37 |
| Mihir Chandraker | 23 | 4 | 72 | 7 | 3/13 | 0 | 3.13 | 19.71 | 10.29 | 4 (57.14) | 0 | 0 | 3 (42.86) | 20.59 |
| Jonah Omitowoju | 11 | 1 | 44 | 4 | 2/6 | 0 | 4 | 16.5 | 11 | 2 (50) | 2 (50) | 0 | 0 | 18.18 |
| Thomas Cox | 24 | 7 | 51 | 4 | 2/10 | 0 | 2.13 | 36 | 12.75 | 2 (50) | 1 (25) | 1 (25) | 0 | 7.84 |
| Ben Taylor | 13 | 3 | 37 | 4 | 2/10 | 0 | 2.85 | 19.5 | 9.25 | 2 (50) | 2 (50) | 0 | 0 | 7.84 |
| Hugh Barker | 3 | 0 | 14 | 3 | 2/13 | 0 | 4.67 | 6 | 4.67 | 3 (100) | 0 | 0 | 0 | 17.65 |
| Michael Cowdrey | 5 | 0 | 16 | 2 | 2/12 | 0 | 3.2 | 15 | 8 | 0 | 1 (50) | 0 | 1 (50) | 11.11 |
| Blaise Mann | 25 | 4 | 95 | 2 | 1/3 | 0 | 3.8 | 75 | 47.5 | 2 (100) | 0 | 0 | 0 | 3.77 |
| Charlie Lewis | 7 | 1 | 13 | 2 | 2/3 | 0 | 1.86 | 21 | 6.5 | 1 (50) | 1 (50) | 0 | 0 | 8 |
| Robert Marmion | 9.5 | 0 | 44 | 2 | 1/2 | 0 | 4.49 | 29.4 | 22 | 1 (50) | 0 | 1 (50) | 0 | 16.67 |
| Lewis Evans | 10 | 0 | 34 | 1 | 1/11 | 0 | 3.4 | 60 | 34 | 0 | 1 (100) | 0 | 0 | 2.78 |
| Blaise Mann | 2 | 1 | 2 | 1 | 1/2 | 0 | 1 | 12 | 2 | 1 (100) | 0 | 0 | 0 | 12.5 |
| Robbie Sewell | 2 | 0 | 13 | 0 | 0/13 | 0 | 6.5 | 0 () | 0 () | 0 () | 0 () | 0 | ||
| Edward Hyde | 2 | 0 | 7 | 0 | 0/7 | 0 | 3.5 | 0 () | 0 () | 0 () | 0 () | 0 | ||
| Theo Pow | 9 | 5 | 16 | 0 | 0/0 | 0 | 1.78 | 0 () | 0 () | 0 () | 0 () | 0 |
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Bowling Statistics 2009 for entire Granta
Name Overs Maidens Runs Wkts Best Bowling 5WH Econ S-R Ave Bowled (%) Caught (%) LBW (%) Stumped (%) %Team Wkts
Om Menon 23 3 81 16 4/3 0 3.52 8.63 5.06 6 (37.5) 5 (31.25) 1 (6.25) 4 (25) 31.37
Matthew Cooksey 31.3 5 103 16 6/17 2 3.27 11.81 6.44 3 (18.75) 10 (62.5) 2 (12.5) 1 (6.25) 48.48
Sam Inglis 99.4 23 243 28 4/15 0 2.44 21.36 8.68 13 (46.43) 12 (42.86) 1 (3.57) 0 23.93
James Brooklyn 133.1 55 422 41 7/15 3 3.17 19.48 10.29 21 (51.22) 15 (36.59) 2 (4.88) 2 (4.88) 29.71
Hussain Biplob 35 2 105 10 3/22 0 3 21 10.5 5 (50) 5 (50) 0 0 24.39
Duncan Howells 112 27 369 28 5/14 1 3.29 24 13.18 7 (25) 18 (64.29) 3 (10.71) 0 22.76
John Naylor 46.5 5 136 10 3/14 0 2.91 28.08 13.6 5 (50) 2 (20) 2 (20) 0 17.24
Neil Mckeown 51 9 222 15 5/41 1 4.35 20.4 14.8 8 (53.33) 5 (33.33) 2 (13.33) 0 26.32
Mark Coteman 58.4 4 223 15 3/32 0 3.8 23.48 14.87 6 (40) 4 (26.67) 3 (20) 0 15.96
Matthew Winter 67.5 13 205 13 3/25 0 3.02 31.29 15.77 5 (38.46) 7 (53.85) 1 (7.69) 0 15.66
Joe Heather 75.2 17 259 16 5/55 1 3.44 28.24 16.19 6 (37.5) 6 (37.5) 4 (25) 0 30.77
Lewys Hill 248.5 41 747 46 5/40 1 3 32.45 16.24 12 (26.09) 21 (45.65) 9 (19.57) 4 (8.7) 24.08
Jack Upton 50.4 8 195 12 4/33 0 3.85 25.35 16.25 3 (25) 8 (66.67) 1 (8.33) 0 15.79
Jamie Jones 53.2 14 163 10 5/27 1 3.06 31.98 16.3 6 (60) 4 (40) 0 0 15.15
Tom Elmslie 72.2 4 349 21 5/23 1 4.82 20.69 16.62 5 (23.81) 5 (23.81) 1 (4.76) 3 (14.29) 22.58
Paul Scott 66 7 204 12 3/29 0 3.09 33 17 8 (66.67) 3 (25) 0 1 (8.33) 16.9
Joseph White 118.3 25 364 20 4/35 0 3.07 35.55 18.2 7 (35) 9 (45) 3 (15) 1 (5) 17.24
Thomas Faulkener 54 8 225 12 3/25 0 4.17 27 18.75 3 (25) 7 (58.33) 1 (8.33) 1 (8.33) 17.65
Sean Park 117.2 14 444 22 5/19 2 3.79 31.99 20.18 0 16 (72.73) 5 (22.73) 1 (4.55) 18.49
Jason Coleman 277.4 54 853 42 5/17 1 3.07 39.67 20.31 10 (23.81) 20 (47.62) 12 (28.57) 0 19.35
Jonathan carpenter 113 26 355 16 4/49 0 3.14 42.38 22.19 7 (43.75) 8 (50) 1 (6.25) 0 13.22
Mark Nunn 83.2 10 282 12 4/19 0 3.39 41.65 23.5 6 (50) 6 (50) 0 0 13.19
Alex Fullarton 79.1 6 329 14 4/17 0 4.15 33.94 23.5 0 11 (78.57) 1 (7.14) 2 (14.29) 14.29
Freddie Clamp 79.3 8 307 13 5/61 1 3.86 36.69 23.62 4 (30.77) 5 (38.46) 3 (23.08) 1 (7.69) 26.53
Rajan Singh 149.3 24 636 26 4/32 0 4.25 34.5 24.46 16 (61.54) 10 (38.46) 0 0 15.2
Craig Park 166 26 566 23 3/22 0 3.41 43.3 24.61 6 (26.09) 11 (47.83) 6 (26.09) 0 11.5
Matthew Friedlander 83 13 326 13 4/43 0 3.93 38.31 25.08 3 (23.08) 10 (76.92) 0 0 14.29
Jonathan Atkinson 66 2 345 13 4/46 0 5.23 30.46 26.54 1 (7.69) 9 (69.23) 0 3 (23.08) 14.13
Tim O'Connell 111.5 19 425 15 4/25 0 3.8 44.72 28.33 1 (6.67) 11 (73.33) 2 (13.33) 1 (6.67) 13.51
John Kay 80 7 410 11 4/73 0 5.13 43.64 37.27 5 (45.45) 3 (27.27) 2 (18.18) 1 (9.09) 13.58
Thursday 3 September 2009
Prada to Pravda
Prada to Pravda
By Chan Akya
"Do we have to suffer through this transparently manipulative pseudo-reality again?" - Dr Sheldon Cooper, Big Bang Theory, Series 2. [1]
Yes Dr Cooper, apparently we do.
As we approach the 20th anniversary of the fall of the Berlin Wall, the decline of the Soviet Union is being mirrored by a parallel decline of the United States. What passes as reality on the pages and screens of the financial media today is so far removed from ground realities as to suggest a renewed version of the Pravda economy that the Soviet Union tried to build and failed. A "then and now" comparison isn't just stark but also quite scary for anyone with common sense (that excludes today's stock market investors right away).
Then (or, a long time ago in the Soviet Union):
The Soviet Union controlled a vast array of vassal states using far-flung military bases that were all steadily declining.
The army was mired in Afghanistan, 10 years after the beginning of a "just" liberation that proved anything but.
The government owned car companies that made sub-standard products no one really wanted.
There were long queues for bread and vodka across the nation.
A deep recession was in place, caused by the decline in demand from poorer countries and falling oil prices.
The actions of president Mikhail Gorbachev, a political reformer, were characteristic of those of a person who wanted change to ensure his place in history.
The fall of the Berlin Wall fatally weakened Soviet authority across the satellites.
Poor distribution led to massive food waste.
The rouble became worthless after the pseudo-reality holding it up (namely parity with the US dollar) was exposed as a cruel hoax.
Now (or, as things stand in the new Soviet Union):
America's allies are in dangerous decline - be it Turkey, Egypt or worst of all, Pakistan.
The military is mired in Afghanistan - almost eight years of incessant activity haven't yielded the simple result of finding Osama Bin Laden or Taliban leader Mullah Omar. (For good measure, America is also mired in another Islamic country, Iraq ... just in case the challenge of getting one's behind spanked in one country wasn't enough).
The American government is the proud owner of General Motors, a car company that apparently doesn't know how to make cars and, even less, profitable cars; Citibank, a bank that apparently doesn't know how to make loans and, even less, profitable loans; Fannie Mae ... okay, you get the picture.
The US economy is in recession, and will permanently remain in this state.
There are long queues for dole payments, food stamps and the like. Prescription drugs, mainly antidepressants, are the new normal for the country.
President Barack Obama is increasingly being seen as a politician who would do pretty much anything - ranging from limitless economic intervention to throwing Israel to the Arab wolves - to ensure his place in history.
Mainly thanks to the continued American fascination with burgers and other fast food - that deliver calories without the nutrients - the level of food waste in the US today exceeds the total food production of many European countries.
The US dollar is, well, worth less (that's two words - for now at least) with respect to its purchasing power; and is being held up by the pseudo-reality of a consumer economy.
Creating the pseudo-reality: Ignore the important and the obvious
Ignoring abject reality is the key process of governance. In the Soviet Union, this was achieved through the simple medium of a complete news blackout for citizens, other than state-sponsored propaganda through various channels. In the case of the US, much the same has been achieved, but by using the opposite tactic of selective reinterpretation of news that helps cast it in much better light.
For example, consider what is going on in Afghanistan. The Soviet Union denied to its citizens that the occupation was going badly, and indeed did not publish any figures for personnel losses. Right up to the day that Soviet troops pulled out of the country, bled dry by the insurgents who had been sponsored by the Americans, citizens of the USSR did not even know how bad the situation was.
When the then-Afghan president Mohammad Najibullah was stripped and hanged in public by the Taliban in 1996, the news media finally should have taken cognizance of the monster that had been unleashed in the form of militants whose answer to a "higher calling" was to do some pretty awful things in their temporal existence. Instead, the American and European media extolled the "freedom fighters" while quietly praying that the chaps would turn in their unused Stinger missiles. Well, we all know how that went.
Fast forward to now, and the steady erosion of North Atlantic Treaty Organization (NATO) authority across Afghanistan isn't fully understood by viewers of American television, nor perhaps by the average newspaper reader. To wit, the rapid increase in the deaths of British soldiers that could well spiral into their complete withdrawal from the country at the drop of a terrorist hat (the British will only be following the course of the Spanish, who left Iraq in response to the terrorist bombing of trains in Madrid in 2004), a course of action that will soon be adopted by all other components of NATO in Afghanistan.
Where that will leave the US, I do not know. However, the trend is quite clear and Obama's addition of a few thousand troops will prove about as significant as throwing a water balloon at a California wildfire.
Now, most readers of this publication will already be familiar with all of this. The point to note is that the Afghan situation hasn't been seriously discussed on US networks because of fear of where the conversation will lead. The point isn't so much whether the country is Obama's Vietnam (technically speaking, it will have to be characterized as that of president George W Bush), but what the actual end game is that's being played out here.
Does the US think that staying in the country for the next 20 years is feasible? Would Americans expect a reduction or an increase in the production of opium? Is there an ethnic allocation plan in place (think Iraq, but with real bloodthirst and guns) - because the notion of a single country is quite laughable? How are the terrorists and the Taliban to be dealt with - through education and modernization as per the NATO dream or through continued bombings as per the current plan?
Most of all, what is the actual definition of success in Afghanistan for NATO and the US?
For the Soviet Union, there were no real answers to the questions I pose above. It actually wouldn't really have known even if victory had passed it on the high road to Kabul a couple of times, mainly because there was no actual definition of victory. It was basically occupation for its own sake.
You might ask why any of this is relevant to the broader issues raised at the beginning of the article. From my viewpoint, Afghanistan is an important issue because understanding the end game may well offer a vignette of the thinking on all other radical measures being planned and executed by the US government - ranging from the Keynesian economy of zombie companies and individuals to the next steps on medical services reform.
Drugs and reality
In the Soviet Union, there was an appropriate saying, "The government pretends to pay the workers, and workers pretend to work." The downside of that trade-off was that Russians (and other nationalities contained within the Soviet Union) did not believe in the possibility of any improvements in their life quality and behaved with the nihilism appropriate to that observation.
This seemingly harsh statement has within it the notion of truth wrought by the idea of what separated a successful Russia from an unsuccessful one in that era: getting ahead in the ration queue, or getting to drive the plush version of the Lada. Gee, what an improvement over being a few places behind in the same queue for stale bread and spoilt meat; or driving a smaller Lada.
No surprise then that Russians took to vodka. As a society, Russians looked at the queues as unfairness of the system towards them as individuals (because some people were able to leapfrog the system), rather than recognize that they were victims of an unsustainable economic system.
Being unable to distinguish between secular and cyclical decline is the actual problem for developed nations today - Americans and Europeans think of equity market declines and the house-price falls of 2006-08 as the key issue, rather than as a necessary correction after years of excess. So now traditions and social mores are sacrificed at the altar of recovering wealth lost over the past two years.
How intelligent people reconcile the obvious areas of cognitive dissonance - many people you know are not only bankrupt but also unemployed and unlikely to rebound any time soon, yet you are asked to believe that the "economy is growing again" - is a matter not so much of anthropological interest but one that determines the course of global developments.
It's interesting to me then that pretty much no one appears bothered that the rising scourge of prescription drugs, particularly antidepressants, could well prove to be the key problem for these societies down the road; if anything, some in the media appear to believe that drugs are helping to "contain" social problems. Much like alcoholism cured Russian violence, I'm sure.
History may choose not to repeat itself. But if it does, watch for results that aren't vastly dissimilar to the declines that we saw in the case of the Soviet Union. In the interim, the number of people who do not want to hear the truth will likely rise, as denial becomes one of the cornerstones of happiness.
Eat a burger, drink some beer and pop some pills, dude. Then switch on the telly and have the cable news ladies tell you how good things are going to be.
Have more than one Hotmail account? Link them together to easily access both.
By Chan Akya
"Do we have to suffer through this transparently manipulative pseudo-reality again?" - Dr Sheldon Cooper, Big Bang Theory, Series 2. [1]
Yes Dr Cooper, apparently we do.
As we approach the 20th anniversary of the fall of the Berlin Wall, the decline of the Soviet Union is being mirrored by a parallel decline of the United States. What passes as reality on the pages and screens of the financial media today is so far removed from ground realities as to suggest a renewed version of the Pravda economy that the Soviet Union tried to build and failed. A "then and now" comparison isn't just stark but also quite scary for anyone with common sense (that excludes today's stock market investors right away).
Then (or, a long time ago in the Soviet Union):
Now (or, as things stand in the new Soviet Union):
Creating the pseudo-reality: Ignore the important and the obvious
Ignoring abject reality is the key process of governance. In the Soviet Union, this was achieved through the simple medium of a complete news blackout for citizens, other than state-sponsored propaganda through various channels. In the case of the US, much the same has been achieved, but by using the opposite tactic of selective reinterpretation of news that helps cast it in much better light.
For example, consider what is going on in Afghanistan. The Soviet Union denied to its citizens that the occupation was going badly, and indeed did not publish any figures for personnel losses. Right up to the day that Soviet troops pulled out of the country, bled dry by the insurgents who had been sponsored by the Americans, citizens of the USSR did not even know how bad the situation was.
When the then-Afghan president Mohammad Najibullah was stripped and hanged in public by the Taliban in 1996, the news media finally should have taken cognizance of the monster that had been unleashed in the form of militants whose answer to a "higher calling" was to do some pretty awful things in their temporal existence. Instead, the American and European media extolled the "freedom fighters" while quietly praying that the chaps would turn in their unused Stinger missiles. Well, we all know how that went.
Fast forward to now, and the steady erosion of North Atlantic Treaty Organization (NATO) authority across Afghanistan isn't fully understood by viewers of American television, nor perhaps by the average newspaper reader. To wit, the rapid increase in the deaths of British soldiers that could well spiral into their complete withdrawal from the country at the drop of a terrorist hat (the British will only be following the course of the Spanish, who left Iraq in response to the terrorist bombing of trains in Madrid in 2004), a course of action that will soon be adopted by all other components of NATO in Afghanistan.
Where that will leave the US, I do not know. However, the trend is quite clear and Obama's addition of a few thousand troops will prove about as significant as throwing a water balloon at a California wildfire.
Now, most readers of this publication will already be familiar with all of this. The point to note is that the Afghan situation hasn't been seriously discussed on US networks because of fear of where the conversation will lead. The point isn't so much whether the country is Obama's Vietnam (technically speaking, it will have to be characterized as that of president George W Bush), but what the actual end game is that's being played out here.
Does the US think that staying in the country for the next 20 years is feasible? Would Americans expect a reduction or an increase in the production of opium? Is there an ethnic allocation plan in place (think Iraq, but with real bloodthirst and guns) - because the notion of a single country is quite laughable? How are the terrorists and the Taliban to be dealt with - through education and modernization as per the NATO dream or through continued bombings as per the current plan?
Most of all, what is the actual definition of success in Afghanistan for NATO and the US?
For the Soviet Union, there were no real answers to the questions I pose above. It actually wouldn't really have known even if victory had passed it on the high road to Kabul a couple of times, mainly because there was no actual definition of victory. It was basically occupation for its own sake.
You might ask why any of this is relevant to the broader issues raised at the beginning of the article. From my viewpoint, Afghanistan is an important issue because understanding the end game may well offer a vignette of the thinking on all other radical measures being planned and executed by the US government - ranging from the Keynesian economy of zombie companies and individuals to the next steps on medical services reform.
Drugs and reality
In the Soviet Union, there was an appropriate saying, "The government pretends to pay the workers, and workers pretend to work." The downside of that trade-off was that Russians (and other nationalities contained within the Soviet Union) did not believe in the possibility of any improvements in their life quality and behaved with the nihilism appropriate to that observation.
This seemingly harsh statement has within it the notion of truth wrought by the idea of what separated a successful Russia from an unsuccessful one in that era: getting ahead in the ration queue, or getting to drive the plush version of the Lada. Gee, what an improvement over being a few places behind in the same queue for stale bread and spoilt meat; or driving a smaller Lada.
No surprise then that Russians took to vodka. As a society, Russians looked at the queues as unfairness of the system towards them as individuals (because some people were able to leapfrog the system), rather than recognize that they were victims of an unsustainable economic system.
Being unable to distinguish between secular and cyclical decline is the actual problem for developed nations today - Americans and Europeans think of equity market declines and the house-price falls of 2006-08 as the key issue, rather than as a necessary correction after years of excess. So now traditions and social mores are sacrificed at the altar of recovering wealth lost over the past two years.
How intelligent people reconcile the obvious areas of cognitive dissonance - many people you know are not only bankrupt but also unemployed and unlikely to rebound any time soon, yet you are asked to believe that the "economy is growing again" - is a matter not so much of anthropological interest but one that determines the course of global developments.
It's interesting to me then that pretty much no one appears bothered that the rising scourge of prescription drugs, particularly antidepressants, could well prove to be the key problem for these societies down the road; if anything, some in the media appear to believe that drugs are helping to "contain" social problems. Much like alcoholism cured Russian violence, I'm sure.
History may choose not to repeat itself. But if it does, watch for results that aren't vastly dissimilar to the declines that we saw in the case of the Soviet Union. In the interim, the number of people who do not want to hear the truth will likely rise, as denial becomes one of the cornerstones of happiness.
Eat a burger, drink some beer and pop some pills, dude. Then switch on the telly and have the cable news ladies tell you how good things are going to be.
Have more than one Hotmail account? Link them together to easily access both.
Tuesday 1 September 2009
Jihadis luring Kerala college girls for love
Ananthakrishnan G, TNN 1 September 2009, 08:05am IST
THIRUVANANTHAPURAM: Kerala police has constituted a special team to probe charges that jihadis are running an organized racket in the state's colleges to lure gullible girls in the name of love and then convert them for subsequent use in anti-national activities.
"We are investigating if there is any such design,'' DGP Jacob Punnoose told TOI. What jolted the sleuths into action was a habeus corpus petition in the Kerala high court from the parents of two MBA students. The students were staying in the same hostel at St John's College in Pathanamthitta district when they met a senior and grew fond of him.
But the boy proved to be a nuisance to the authorities and was expelled from the college some years ago. "He still managed to retain contact with four junior students, including the two MBA students and feigned love for them. The boy wanted them to get converted to Islam. But one of them suspected his intentions and withdrew while another developed psychiatric problems. The other two fell for him and eloped,'' college principal Sreekumaran Nair said.
When there was no news of their wards, the parents approached the high court with habeus corpus petitions. The girls were subsequently produced in court which allowed the parents the custody of their children for a week. When they appeared in court next, the girls stated they had been trapped and did not want to go back with the boy. In the period they were with him, one of them had already married the boy and the other was "forced to marry'' his friend, a bus conductor. In their statements given to police, the students claimed that they were shown jihadi videos and literature by the boy. Expressing concern over the development, the high court asked the police to probe deeper.
"When we searched the hostel, we found provocative literature given by the boy from the rooms of the two girls,'' the principal said. This was seized by the police who have now extended the probe to other campuses as well they feel this was not an isolated incident. Similar reports have been emerging for quite some time now but were mostly ignored for political reasons, police sources added.
THIRUVANANTHAPURAM: Kerala police has constituted a special team to probe charges that jihadis are running an organized racket in the state's colleges to lure gullible girls in the name of love and then convert them for subsequent use in anti-national activities.
"We are investigating if there is any such design,'' DGP Jacob Punnoose told TOI. What jolted the sleuths into action was a habeus corpus petition in the Kerala high court from the parents of two MBA students. The students were staying in the same hostel at St John's College in Pathanamthitta district when they met a senior and grew fond of him.
But the boy proved to be a nuisance to the authorities and was expelled from the college some years ago. "He still managed to retain contact with four junior students, including the two MBA students and feigned love for them. The boy wanted them to get converted to Islam. But one of them suspected his intentions and withdrew while another developed psychiatric problems. The other two fell for him and eloped,'' college principal Sreekumaran Nair said.
When there was no news of their wards, the parents approached the high court with habeus corpus petitions. The girls were subsequently produced in court which allowed the parents the custody of their children for a week. When they appeared in court next, the girls stated they had been trapped and did not want to go back with the boy. In the period they were with him, one of them had already married the boy and the other was "forced to marry'' his friend, a bus conductor. In their statements given to police, the students claimed that they were shown jihadi videos and literature by the boy. Expressing concern over the development, the high court asked the police to probe deeper.
"When we searched the hostel, we found provocative literature given by the boy from the rooms of the two girls,'' the principal said. This was seized by the police who have now extended the probe to other campuses as well they feel this was not an isolated incident. Similar reports have been emerging for quite some time now but were mostly ignored for political reasons, police sources added.
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