Tuesday, September 30, 2008

The Black Swan

Since we seem to be headed into the Black lagoon, I am reminded of the Black Swan. If you don't know what a Black Swan event is, here is some background from the Observer:

The New Sage of Wall Street
The trader turned author has emerged as the guru of the global financial meltdown. Not only is he riding high in the bestseller lists, his theory of black swan events has become the most seductive guide to our uncertain times
The Observer,
Sunday September 28 2008
Edward Helmore

On Friday afternoon, Nassim Nicholas Taleb could be found on the veranda of a hotel bar in Louisville, Kentucky, knocking back bourbon in the warm afternoon sunlight. No wonder the Lebanese-born trader turned author feels like relaxing: his book, The Black Swan: The Impact of the Highly Improbable, has become a huge success. A book of economics and philosophy, it's found a vast audience, speaks to its time and has become something of a key text to help understand the crisis in market capitalism. (clip)

Taleb's central thesis is that a small number of unexpected events - the black swans - explains much of import that goes on in the world. We need to understand just how much we will never understand is the line. 'The world we live in,' he likes to say, 'is vastly different from the world we think we live in.'

The title refers to the medieval belief that all swans were white, hence black swan was a metaphor for something that could not exist, a metaphor that shifted into a perceived impossibility that came to pass when black swans were discovered in the 17th century. (clip)

We are, he believes, suckers. 'The tools we have to understand what's happening on Wall Street were developed over the last couple of centuries,' he told the audience at Kentucky's Idea Festival last week. 'We need new tools. We will have to finance the losses because of a huge misunderstanding.'

That misunderstanding, he explains in his book, is partly based on our belief that bankers and financial analysts are somehow blessed with superior knowledge. While 'peasants know they can't predict the future', Wall Street bankers believe they can.

In his estimation of the scale of the disaster: 'The banking system, betting against black swans, has lost more than $1 trillion - more than was ever made in the history of banking.' (clip)

In Taleb's coinages, most people live in 'Mediocristan,' a fake model of reality where no rare events occur, and not in 'Extremistan', the complex real world where unpredictable and devastating events can dictate the outcome.

One of Taleb's favourite allegorical tales is the story of the turkey and the butcher. As previously described by Bertrand Russell, a turkey may get used to the idea of being fed but when, the day before Christmas, it is slaughtered, it will incur 'a revision of belief'. (clip)

To establish his credentials as sage of our current predicament, Taleb frequently refers to an August 2003 article in the New York Times in which he correctly predicted the quasi-governmental US insurance giant Fannie Mae had underestimated the risk of a rise in interest rates that would destroy the value of their portfolios. 'The fact that they have not blown up in the past doesn't mean that they're not going to blow up in the future,' he said. 'The math is bogus.' (clip)

'Economics is a tragedy for me. Because look at how the whole world now is designed according to some ideas that have not proved adequate. The whole financial system. We don't understand economic policy, do you realise that? (clip)

In other words, while most human thought has focused us on how to turn knowledge into decisions, Taleb is interested in how to live in a world we don't understand very well, how to turn lack of information, lack of understanding, and lack of "knowledge" into decisions."

How not to be a "turkey",

When the Black Swan lands on your pond.

Then again, some might say this is no black swan.
No, it is more like a rooster that has come home.

It's a predictable natural result of risky loans and easy money,

and the kind of deregulated wild west banking environment

that pretty much always leads to disaster.

It's what you should expect from a banking industry

that drops lending standards,

securitises bad loans without transparency

and sells them on to massively leveraged institutions and hedge funds.

No wonder no one wants to vote for this icky bail out.

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Saturday, September 27, 2008

Lies, Damn Lies, and Statistics

I've always been a bit of a numbers man. (no, not those numbers) Using simple algebra I used to prove to my math students that 1 equals 2.

Using facts and statistics you can get away with a lot. And there is good reason why there is an old saying that says "Liars figure and figures lie". Mark Twain said it differently, “There are three kinds of lies: lies, damned lies, and statistics."

Much like people, if you torture numbers, they will confess to anything.

Here's a simple example:

"Let’s look at a typical scenario of statistical lying. Say that you live in an area where the housing market has taken a beating to the point that no one is building homes and no one is buying any existing housing, and to make matters worse, asking prices are down some 50% off of their peak.

Just when you thought things were totally down for the count, some fool falls off of the turnip truck and decides to build a new house. Since there had been no other building permits issued thus far in 2008, the headlines would appear as; Building Permits Rise by a 100%; as a home building craze returns to Mayberry."

But sometimes the numbers lie in much more sublime way. Here's a good example:

What reduces emissions more?

A. Someone swapping their old SUV (which gets 12 miles per gallon) for a hybrid version (18 mpg) or

B. someone upgrading their 25 mpg compact to a new 46 mpg Prius?
(ignore for a minute manufacturing issues or driving habits and assume the miles driven are the same).

The surprising answer (for those who don't work it out) is A.

It's easy enough to see why this is the case. If the driving distance is 100 miles, then for case A the saving in fuel used (and hence emissions) is 100/12-100/18 = 2.8 gallons, while for B, you have 100/25-100/46 = 1.8 gallons.

The confusion arises because people like to think linearly about numbers, not inversely, and so tend to assume that a similar change in mpg has a similar impact on fuel usage. This is not however the case - improvements in efficiency at the low end of the scale are much more useful at reducing emissions.

This is actually a very general point - when trying to raise efficiency it is always sensible to start with the least efficient processes."

Of course, you could also make the point that the SUV driver should buy the Prius instead.

Numbers are remarkably subject to shaping. If you came in second in a two man race you were also last. The difference I suppose is your mood and your subjective view of things.

Last night's debate numbers are apparently showing that Obama did better than McCain. I didn't see it that way as I watched it. But, today, after seeing that McCain never once looked at Obama, that he withheld that gentlemanly courtesy in some kind of weird psyche-out ploy, I now see why so many CNN viewers saw it differently.

McCain looked mad and angry.

Obama looked competent and unruffled.

Obama's numbers are looking better and better.

Let's hope they are, but

Let's do every thing we can to make sure,

that the Liars, and the Damn Liars,

don't have an opportunity

to make him a statistic.

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Thursday, September 25, 2008

Is It Safe Yet?

I guess in the really big picture, 700 billion dollars isn't that much. It's probably only half of the costs of the Iraq War (including legacy costs). It's just an extra year of Pentagon funding ( including the off budget wars). It's only about a third of what we spend on health care.

And, its only about $2,333.00 for each man, woman, and child in the good old PRUS. ( People's Republic of the United States) I could pay my share today I suppose.

Besides, it is going to such a good cause. Who doesn't want to keep our economic Barons, Dukes, and Princes making 150 million a year? Considering, at my present salary it will only take me 1500 years to earn that much, or in reversed time, back to the fall of Rome, why wouldn't I want to pitch in to keep our aristocratic classes in Lexuses (or is the plural Lexi?). And let's be practical, if we lose these folks, who is going to watch baseball games from those fabulously expensive sky boxes in the New Yankee stadium?

Yes, in a time when we should be talking about demonstrating in the streets to keep these folks from building any more coal plants and nuclear reactors, we can barely get it up to tell our congressman to think this through.

With one whacked out nut job already talking about holding the political process hostage until we fork over all the dough to his pals, all of Washington working together to foist this big one on those of us who actually pay their salaries, and the market signficantly up today, one can safely assume that once again, the markets have been made safe. (For now)

Obama's statement is probably as good as it gets.

"Let me be clear: it’s outrageous that we find ourselves in a position where taxpayers must bear the burden for the greed and irresponsibility of Wall Street and Washington. But we also know that a failure to act would have grave consequences for the jobs, and savings, and retirement of the American people.

Over the last few days, I’ve been in close contact with Secretary Paulson and leaders in Congress. I’ve also had the opportunity to speak directly to the American people about what we need to do moving forward. I’ve laid out several clear principles that I believe must be a part of our response to this crisis.

First, we need to set up an independent board, selected by Democrats and Republicans, to provide oversight and accountability for how and where this money is spent at every step of the way.

Second, if American taxpayers finance this solution, they should be treated like investors. That means Wall Street and Washington should give every penny of taxpayers’ money back once this economy recovers.

Third, we cannot and will not simply bailout Wall Street without helping the millions of innocent homeowners who are struggling to stay in their homes. They deserve a plan too.

Finally – and this is important – the American people should not be spending one dime to reward the same Wall Street CEOs whose greed and irresponsibility got us into this mess." more
Meanwhile, our allies in Pakistan are shooting at the violators of their airspace (us), the North Pole icecap has entered into a death spiral, and Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions .

In my social circle, I know a couple who pulled their money out of money market funds this week, several smart folks who have been buying silver coins for a while now, another someone who is probably going to get out of the market completely, a businessman who pulled 10,000 in cash from his bank account, and someone else who is thinking of doing the same thing once his new super dooper secret safe is installed. I think I'm going to open an account in a nice local credit union too.

Cause believe me,

It's not safe yet.

Not even close.

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Tuesday, September 23, 2008

The Capitalist Oligarchy

I actually had trouble sleeping last night. And not because of the late dinner I almost always have. No, I actually had dreams, or perhaps more accurately, visions of an economic collapse. In my hypnogogic stream, I could see a long train of events and the ride of a hurricane hunter.

As Congress debates the biggest single expenditure of any bill that I can remember, the politics are palpable. The "R"s bring this bread to our table with their penchant for deregulation, while the most conservative among them bail out of the bail out in the name of conservative values and in fear of interfering in their precious markets, which have failed to regulate themselves.

It's a bit like expecting a gaggle of six year olds to stay out of trouble on the Fourth of July after you've given them a box of fireworks. Someone is going to get burned.

Meanwhile, the "D"s will democratize the Administration's plan to make the Treasury Secretary the Mortgage Tzar, getting some oversight in the bill, as well as a few other improvements. The bill was so bad, it reminds me of the old mill guard trick. If you know the inspector is coming, remove the guard on the crimper and give the inspector something to write you up on. That way he doesn't notice the area in the back where the rats are getting in and crapping in the food supply.

McCain was so all over the map with his comments yesterday, he sounded like a cigarette lobbyist, able to leap tall tales with a single bound, changing positions faster than a speeding train wreck. Obama was more tranquil, perhaps even more presidential. Still, no one is saying what needs to be said in my view.

Most everyone doesn't really understand what has happened anyway. The right wingers will try to blame poor people and people of color who should be ashamed of themselves for buying a nice home. Meanwhile the "D"s will carry the ball over the goal line for the New York Streeters and the conservative "R"s will slam them for it in some future election cycle.

Last night, I watched Bill Moyer's friday show. His interview with Kevin Phillips might have been the cause of my disturbed dream world.

But what concerns me is not the 700 billion. (or whatever it might be)

What concerns me is that this is not going to work. Sure, it will kick the can down the road at the expense of our own shoe leather, and sure, it will revive markets for the time being and certainly deliver us through the election cycle.

But, this is not the end of it. This is structural.

But it will work in other ways. It will drain the public coffers so well that any meaningful discussion on social issues will immediately be trumped by the claim that this commitment to save our financial sector has made any other commitment to ourselves unaffordable. It will suck the air out of the debate for new infrastructure, for moving towards a post carbon economy, and for dealing with climate change.

It will weaken the dollar and increase the price of a barrel of oil.

The Neo-Communists have sucked the money from Social Security, from the surpluses of Clinton-Gore, and from the Peace Dividend of the 90s. And they have brought us to a defining moment that will be debated and studied by the cultures that will follow us.
There is the well known phrase that "Everyone wants to go to Heaven, but nobody want to die"

And so it is with the Capitalist Oligarchy.

But even as it ravages the strength of our commons,

and our combined social wealth,

it too will fall into the earth.

And a new world will emerge.

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Sunday, September 21, 2008

The October Surprise

The big topic this morning at breakfast was Paulson and his 700 billion dollar bailout for his cronies on Wall Street. He, of course, wants a blank check and he wants it now. Once again the shock doctrine is employed by this administration.

Sept. 20 (Bloomberg) -- The Bush administration asked Congress for unchecked power to buy $700 billion in bad mortgage investments from U.S. financial companies in what would be an unprecedented government intrusion into the markets.

The plan, designed by Treasury Secretary Henry Paulson, is aimed at averting a credit freeze that would bring the financial system and economic growth to a standstill. The bill would bar courts from reviewing actions taken under its authority.

"It sounds like Paulson is asking to be a financial dictator, for a limited period of time,'' said historian John Steele Gordon, author of "Hamilton's Blessing,'' a chronicle of the national debt.

"This is a much-needed declaration of power for the Treasury secretary. We can't wait until the next administration in January.''
These guys are relentless

And the "D"s need to get out in front of their relentlessness, not just come up with conditions after the emergency plan is dropped in their laps. That said, here is a good start on those conditions from TPM:

Principles to Guide the Bailout

1) Financial institutions should be forced to endure the bulk of the losses with taxpayer funds only used where absolutely necessary to sustain the orderly operation of the financial system.

2) The bailout must be designed to minimize the opportunity for gaming.

3) The bailout should be designed to minimize moral hazard.

4) In the case of delinquent mortgages that come into the government's possession, there should be an effort to work out an arrangement that allows the homeowner to remain in her house as owner. If this proves impossible, then former homeowners should be allowed to remain in their homes as renters paying the market rent. This should be done even if it leads to losses to the government.

5) There should be serious efforts to severely restrict executive compensation at any companies that directly benefit from the bailout.

Principles for Restructuring the Financial System

1) Combating asset bubbles must be one of the Fed's key responsibilities.

2) The government should impose a modest financial transactions tax, comparable to the one in the United Kingdom. This can both restrain excessive trading and raise more than $100 billion a year in revenue.

3) Regulatory agencies should require that potentially tradable assets (e.g. credit default swaps) actually be traded on exchanges.

4) There should be strict limits on leverage for all regulated financial institutions.

5) Fannie and Freddie should remain fully public institutions, returning them to a status comparable to Fannie's prior to its privatization in 1968.

6) The Fed should be restructured so that all the key decision makers (e.g. the open market committee) are appointed by democratically elected officials. Its responsibility is to manage the economy in the interest of the general public, not the financial sector. more

As Obama said today, there is a big difference between allowing the market to run , and allowing it to run wild.

These "R"s are wild and relentless.

And if the "D"s don't go along,

they will be blamed for not taking decisive action.

Is this the October surprise?

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Wednesday, September 17, 2008

The Final Slipper Falls

Earlier today, I met with a colleague who works as a wind land man. We talked about several sites and chatted about the old days when we worked together. In those days, landowners didn't quite know what to think about you when you contacted them and told them that you were quite possibly going to make them a lot of money from the wind that flowed over their lands.

I think a lot of them didn't quite believe it.

Now, with perhaps 9,000 MW of wind installed in Texas alone, that is no longer the case. Sure, most Landowners still want the money, but now, some of them also don't want to look at every hill top and ridge covered with turbines, and resistance to wind development has grown in certain circles where wind is derided much like it was in Waterworld by Dennis Hopper.

That brought me to say that folks need to understand that these turbines won't be there that long, perhaps just another 20 or 30 years. The period of giant wind turbines on every Texas hill top will last about as long as the period of wooden oil derricks covering the old oil fields.


Because, as we move to advanced photon to electron devices, third generation PVs that actually are printed using nano based semiconducting inks, everything, (and I mean everything) will be powered by these advanced materials. And all of this energy will be stored in a vast fleet of plug-in cars and in a new generation of advanced storage devices.

And with these advanced solid state storage devices, all of our energy, whether from the sun, the wind, or from the sea will be stored by the electric utility for use when it is needed. The storage may be in the form of distributed devices much like the transformers we see on most electric poles today, or they may be centralized around substations .

Problem is, advanced electric storage systems are still in development. And even though Lockheed-Martin, Kleiner-Perkins, and an electric car company called Zenn have all invested in the game changing ceramic technology of EESTOR, no working models have yet to be demonstrated. (however recent announcements from EESTOR are encouraging)

After the meeting,I went to the office and reviewed my e mail where I found this new announcement:

Breakthrough In Energy Storage:
New Carbon Material Shows Promise Of Storing
Large Quantities Of Renewable Electrical Energy

Sep. 17, 2008

Engineers and scientists at The University of Texas at Austin have achieved a breakthrough in the use of a one-atom thick structure called "graphene" as a new carbon-based material for storing electrical charge in ultracapacitor devices, perhaps paving the way for the massive installation of renewable energies such as wind and solar power.

University of Texas at Austin researchers said today recent data suggest a one-atom thick carbon-based material shows remarkable promise for storing electrical charge in ultracapacitor devices.

The researchers believe their breakthrough shows promise that graphene (a form of carbon) could eventually double the capacity of existing ultracapacitors, which are manufactured using an entirely different form of carbon.

"Through such a device, electrical charge can be rapidly stored on the graphene sheets, and released from them as well for the delivery of electrical current and, thus, electrical power," says Rod Ruoff, a mechanical engineering professor and a physical chemist.

"There are reasons to think that the ability to store electrical charge can be about double that of current commercially used materials. We are working to see if that prediction will be borne out in the laboratory." more

And there are other exciting solid state storage technologies on the horizon.

Advanced third generation printable photon to electron materials and inks coupled with advanced solid state storage devices can lead to an advanced world where energy moves from the outside of our walls to the inside of our computers, from our bodies to our lamps, from the the roof to your car, from your car to your utility, from the utility to your office.

But perhaps before we can move boldly towards a new world where energy moves through our own creations much as it does in the creation itself, we must watch the old world of oil and fiat money cave in on itself in the financial meltdown we are presently witnessing.

And now that the People's Republic of the United States owns Fannie Mae, Freddie Mac , AIG, and surely soon enough the car manufacturers, and the airlines, the final slipper falls.

The Communists turn into Capitalists, and the Capitalists become Neo-Communists as they are forced to socialize their losses.

It's a good time to reinvent ourselves, the world, and the way we view it.

It's doing it anyway.

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The Final Slipper Falls (r)

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Tuesday, September 16, 2008

The Grito

Today is Mexican Independence Day. If you don't know why, here's the story from MEXonline and Wikipedia:

Shortly before dawn on September 16, 1810, Miguel Hidalgo y Costilla made a monumentous decision that revolutionized the course of Mexican history. Hidalgo and several educated criollos were involved in a planned revolt against the Spanish colonial government, and when the plotters were betrayed, Hidalgo, a Catholic priest in the village of Dolores, ordered the arrest of Dolores' native Spaniards.

Then Hidalgo rang the church bell as he customarily did to call the indians to mass.

The message that Hidalgo gave to the indians and mestizos,( the Grito of Dolores) called them to retaliate against the hated Gachupines, or native Spaniards, who had exploited and oppressed Mexicans for ten generations.

Although a movement toward Mexican independence had already been in progress since Napoleon's conquest of Spain, Hidalgo's passionate declaration was a swift, unpremeditated decision on his part. (clip)

He urged the exploited and embittered Mexicans to recover the lands that was stolen from their forefathers. (clip)

Approaching sixty years of age, Hidalgo was beloved and greatly respected by Mexicans. Once the dean of the College of San Nicolas at Valladolid in Michoacan (now Morelia), Hidalgo was a well-educated, courageous humanitarian.

He was sympathetic to the Indians, which was unusual amongst Mexican clergymen. Against Gachupin law, Hidalgo taught Indians to plant olives, mulberries and grapevines and to manufacture pottery and leather.

His actions irritated the Spanish viceroy who, as a punitive measure, cut down Hidalgo's trees and vines.

Hidalgo later regretted the bloodbath he had incited with his fateful "Cry of Dolores." When he made his hasty decision in the pre-dawn hours of September 16, he had not foreseen the mass slaughter of Spaniards.

Before the revolutionary troops descended upon Mexico City, Hidalgo retreated with only a few associates to Dolores, where he would be executed by the Gachupines only a year later.

Despite his ambiguity toward the violent class struggle that was the Mexican revolution, Hidalgo is still revered as the father of Mexican independence."

After eleven years of war, Mexico's independence was recognized by the Spanish viceroy on September 27, 1821. Every year at midnight on September 15, Mexicans led by the president of Mexico shout "the Grito", honoring the crucial and impulsive action that was the catalyst for the country's bloody struggle for independence from Spain."

Meanwhile, Wall Street is crumbling as surely as the Spanish Empire slowly crumbled. Here's The Journal.

Landscape Shifts As Pillars Crumble

The financial world begins today in a situation of profound upset, as two pillars of Wall Street effectively crumbled overnight and the solidity of at least one more is in question. Washington, meanwhile, signaled that it won't provide unlimited scaffolding at taxpayers' expense. (clip)

Taken together with this year's absorption of Bear Stearns by J.P. Morgan Chase, the weekend's developments mean that three of Wall Street's five major independent brokers are effectively disappearing, leaving only Goldman Sachs Group and Morgan Stanley. But the survivors are unlikely to have an easy time of it. "The economy is slowing, markets are tumultuous and deal making is lethargic. (clip)

With Merrill's fate all but sealed and Lehman on a path to liquidation, all eyes this morning will be on American International Group, which last night was scrambling to put together its own survival plan. Ratings agencies threatened to downgrade the insurer's credit rating if it didn't raise $40 billion by this morning, "a step that would cripple the company," as the New York Times reports. " more

AIG is trading right now at over three dollars. It was down to a dollar a few hours ago.

And as yesterday becomes known as Black Monday, McCain says that the fundamentals of the economy are sound.

Definitely a Howard Beale moment.
It's enough to make us shout

our own Grito.


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Friday, September 12, 2008

Yikes it's Ike

Like I said two days ago.

We won't like this Ike. Here's Dr. Jeff Master's blog:

Hurricane Ike is closing in on Texas, and stands poised to become one of the most damaging hurricanes of all time. Despite Ike's rated Category 2 strength, the hurricane is much larger and more powerful than Category 5 Katrina or Category 5 Rita. The storm surge from Ike could rival Katrina's, inundating a 200-mile stretch of coast from Galveston to Cameron, Louisiana with waters over 15 feet high.

This massive storm surge is due to the exceptional size of Ike. According to the latest wind field estimate (Figure 1), the diameter of Ike's tropical storm and hurricane force winds are 550 and 240 miles, respectively. For comparison, Katrina numbers at landfall were 440 and 210 miles, respectively. As I discussed in yesterday's blog entry, a good measure of the storm surge potential is Integrated Kinetic Energy (IKE). Ike continues to grow larger and has intensified slightly since yesterday, and the hurricane's Integrated Kinetic Energy has increased from 134 to 149 Terajoules.

This is 30% higher than Katrina's total energy at landfall.

All this extra energy has gone into piling up a vast storm surge that will probably be higher than anything in recorded history along the Texas coast. Storm surge heights of 20-25 feet are possible from Galveston northwards to the Louisiana border.

The Texas storm surge record is held by Hurricane Carla of 1961. Carla was a Category 4 hurricane with 145 mph winds at landfall, and drove a 10 foot or higher storm surge to a 180-mile stretch of Texas coast. A maximum storm surge of 22 feet was recorded at Port Lavaca, Texas. (more)

Folks in Houston are hunkering down. I think I would dump my food in the frig and the freezer and get the heck out of dodge right now.

But a lot of other folks are going to get hit with a giant surge tonight. Galveston is likely going under water.

Yikes, it's Ike

and we won't like it.

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oz note: surge was under 14 feet in most places. Galveston and surrounding areas did not receive the 20 foot wall of water that was predicted


Thursday, September 11, 2008

The Real Ground Zero

It's rather amazing how strong fear is. I mean, haven't you ever wondered how roaches scurry when you turn on the light? How they run like crazy the more you try to smash them? Exactly, how do they know you've got their personal extermination in mind?

Think about it. Roaches, flys, mice, snakes, chickens, virtually every creature there is, feels fear.
Cut off the head of a chicken and let it go, and it will run around in fear in circles until all of its blood spurts out of its severed arteries.

So fear is not something in your brain, something that you think through. Fear is somewhere in your reptile brain and your muscle system. If a car comes from your blind side and surprises you, you jump, your heart hops, and the adrelenine shoots into your blood stream. And you scream four letter words at the driver. You don't make a rational decision to do that, it just happens.

And in humans, our fears arise not just from threats to our actual survival. Our fears and our flight or fight mechanism can be set off by all kinds of stimuli.

Here's one doctors description:

When our fight or flight response is activated, sequences of nerve cell firing occur and chemicals like adrenaline, noradrenaline and cortisol are released into our bloodstream. These patterns of nerve cell firing and chemical release cause our body to undergo a series of very dramatic changes.

Our respiratory rate increases.

Blood is shunted away from our digestive tract and directed into our muscles and limbs, which require extra energy and fuel for running and fighting.

Our pupils dilate. Our awareness intensifies. Our sight sharpens. Our impulses quicken. Our perception of pain diminishes. Our immune system mobilizes with increased activation. We become prepared—physically and psychologically—for fight or flight.

We scan and search our environment, "looking for the enemy."

When our fight or flight system is activated, we tend to perceive everything in our environment as a possible threat to our survival. By its very nature, the fight or flight system bypasses our rational mind—where our more well thought out beliefs exist—and moves us into "attack" mode.
This state of alert causes us to perceive almost everything in our world as a possible threat to our survival. As such, we tend to see everyone and everything as a possible enemy. Like airport security during a terrorist threat, we are on the look out for every possible danger.

We may overreact to the slightest comment. Our fear is exaggerated. Our thinking is distorted. We see everything through the filter of possible danger. We narrow our focus to those things that can harm us. Fear becomes the lens through which we see the world.

We can begin to see how it is almost impossible to cultivate positive attitudes and beliefs when we are stuck in survival mode. Our heart is not open. Our rational mind is disengaged. Our consciousness is focused on fear, not love.

Making clear choices and recognizing the consequences of those choices is unfeasible."

Seven years ago, a lot of people got really scared by an event that will be remembered long after our short life times. And those who would rule us by fear were given the ultimate weapon.

A people who cannot cultivate positive attitudes and beliefs, whose rational minds are disengaged, whose consciousness is focused on fear, and not love are destined to make their fears, their reality.

And here is Palin in her ABC interview:

GIBSON: And under the NATO treaty, wouldn't we then have to go to war if Russia went into Georgia?

PALIN: Perhaps so. I mean, that is the agreement when you are a NATO ally.

War with Russia?

That's the real Ground Zero.

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Wednesday, September 10, 2008

Lipstick on a Pig

You don't have to be coming back from the mountains of Mexico to realize that there is a heck of a lot of really weird news out there.

Obama is trying to say that the McCain/Palin campaign is a fraud, so he uses one of Ann Richards' favorite phrases as the metaphor.

And it really is a pretty good metaphor. The McCain folks decided to counter-attack by calling it sexist. The main stream press, in another supreme example of steering an issue down the Republican talking point lane, focused on the sexist charge all day, not the fraud. Most are calling it a gaffe.

They haven't really given the truth of Obama's remarks the attention they deserve. But the event is getting attention. Instead of letting this go though, I think the Obama crowd should embrace the image, because in the biz, as they say, I would say this one has legs. (hooves.)

Here's Talking Points Memo:

Embrace it.

"Let's face it. Lipstick on a pig is a classic American phrase. And there's just no better way to describe the McCain-Palin ticket. The 'Reformer' whose whole campaign and senate office is run by a crew of high-rolling DC lobbyists?

The earmark slayer whose state this year got ten times more earmarks than any other state in the country?

Whose city when she was mayor got twenty times as many?

The whole operation is just one big bamboozling lie. And lipstick on a pig is just using good American English to explain it. If McCain and Palin don't like it they should have thought of that before they decided to run as frauds."

"R"s are not very good at metaphor. Their specialty is using code words that awaken hate, division, and fear. So you can see why they might think that Obama was calling someone a pig. Fact is, the pig is the McCain policy of embracing the policies of the Bush Administration and the disasters that we have experienced in the last eight years.

Palin then, with her swirl of rhetoric and lies , would actually be the lipstick.

Meanwhile, another huge investment bank is going up in smoke, and the government is taking over the housing corporations that just three weeks ago probably "would not need" the money that Congress approved to shore them up. All this seems like a last ditch effort to shore up the economy during the last few months of the campaign. Whether it is bottoming out, or just on another ledge of deep, deep descent into the economic abyss should certainly be enough to put a slight dent in our collective eco-narco tranquility.

And just to add a little spice to this kettle of uncertainty, another powerful hurricane is in the gulf and headed right towards my neck of the woods. I don't think we will like this Ike.

But it does make me remember how far our system has fallen.

The "R's of yesteryear were pretty decent folks. They had a philosophy, and they had morals and integrity. Remember, it was Ike who warned of the military industrial complex that has taken over our democracy. This bunch just tells lie after lie on a daily basis, and the press just repeats them, all the while pimping and obfuscating for that same military/ industrial/oil/corporate/media complex that Ike warned us about. (watch).
Problem is. They've got more lipstick than Revlon.
And they put it on better than the Joker.
And a lot of honest folks who liked Ike,
find it hard to believe that the party of Lincoln
has seemingly tranformed itself into the party of Goebbels.
And that didn't turn out so well.
For anybody.


Sunday, September 07, 2008

Simplicity, Patience, and Compassion

For the last couple of days, I have been reading from the Tao. Here are some snippits from Stephen Mitchell's translation of the Tao te Ching:


Governing a large country
is like frying a small fish.
You spoil it with too much poking.

Center your country in the Tao

and evil will have no power.

Not that it isn't there,

but you'll be able to step out of its way.

Give evil nothing to oppose

and it will disappear by itself.


A great nation is like a great man:
When he makes a mistake, he realizes it

Having realized it, he admits it

Having admitted it, he corrects it

He considers those who point out his faults

as his most benevolent teachers.

He thinks of his enemy
as the shadow that he himself casts.

If a nation is centered in the Tao,

if it nourishes its own people
and doesn't meddle in the affairs of others,

it will be a light to all nations in the world.


I have just three things to teach;
simplicity, patience, compassion.
These three are your greatest treasures.
Simple in actions and in thoughts,
you return to the source of being.
Patient with both friends and enemies,

you accord with way things are.
Compassionate toward yourself,

you reconcile all beings in the world.


There is no greater misfortune
than underestimating your enemy.
Underestimating your enemy
means thinking that he is evil.
Thus you destroy your three treasures

and become an enemy yourself.

When two great forces oppose each other,

the victory will go

to the one that knows how to yield.


When they lose their sense of awe,
people turn to religion.
When they no longer trust themselves,

they begin to depend upon authority.


Trying to control the future
is like trying to take the master carpenter's place.
When you handle the master carpenter's tools,

chances are that you'll cut yourself.


Those who try to control,
who use force to protect their power,
go against the direction of the Tao.
They take from those who don't have enough

and give to those who have far too much.


Nothing in the world
is as soft and yielding as water

Yet for dissolving the hard and inflexible,

nothing can surpass it.

The soft overcomes the hard;

the gentle overcomes the rigid.

Everyone knows this is true,

but few can put it into practice.

Therefore the Master remains

serene in the midst of sorrow

Evil cannot enter his heart.



Friday, September 05, 2008

Liberty and Justice for All

This is going to be my first post with my new macbook. I'm in the mountains again.

The drive yesterday was marvelous. The entire drive was as green as I have ever seen it. The desert areas are blooming and the grass on the side of the road is 18 inches tall. The purple sage is turning the desert landscape into a electric landscape of color that would make "the riders" proud.

On the last leg of the trip coming up the cobblestone road, the grass is actually growing between the stones giving the road a green hue.

After I got into my house and settled in a little with the safe crossing toast and the cuerta aerial fireworks announcement bomb, I went down to the Cafe Azul to get a crepe. (yes they have crepes in Mexico) In a few moments, the sky let loose and rain poured down again on this mountain town.

In a half an hour or so, it slowed down enough to make it to the new bar up above the cathedral named Amor y Paz. Here, I met with the architects from Switzerland who are designing the new market, and with Marty, the owner of the internet cafe which has a live web cam looking out over the village.

Soon, We were joined by Humberto, the don of the pueblito. He and his lovely Swiss partner and his three daughters run the place.(along with several other hotels and businesses in town)

I drank don Julio and the others drank mojitos and the local mescal.

I tried to communicate the ridiculous situation in the United States where the new "R" nominee for VP is purported to have said that "if the pledge of allegiance with under god was good enough for the founding fathers it should be good enough for us."

Of course, the pledge was not even written until the late 1800's, and it wasn't adopted until 1942. The words "under god"were added in the 1950s.

It reminded me very much of another woman politician.

Ma Ferguson, a governor of Texas, once said in defense to her denial of bilingual education that, ," if English was good enough for Jesus it's good enough for our Mexicans".

At breakfast this morning, Charlie Tomorrow (a Berlin born painter now in R 14) said that the election of Obama would be a great global event... that peoples from all over the world will celebrate the return of America to a more sane foreign policy and more importantly, to the role of providing the global leadership to provide peace and justice and prosperity for all.

And that is exactly what the pledge says,



Thursday, September 04, 2008

Speech to Nowhere

* The video is from a tv station in Alaska and tracks the Trooper Wooten investigation into whether or not she abused executive power by firing someone because they wouldn't fire her ex-brother-in-law. The article by Will Bunch came in earlier from Truth Out.

by: Will Bunch, The Philadelphia Daily News

Sarah Palin delivered a great speech tonight -- for her party, for John McCain, for herself, for what she set out to accomplish. This was America's first real glimpse at the Alaska governor, and what we saw was a boffo politician who speaks in a plaintive prairie voice that channels America's Heartland like a chilling breeze rippling a field of wheat, who knows how to tell a joke, how to bring down the house and bring a tear to a few eyes. She is proud of her family, as she should be, and there is much to admire in her own "personal journey of discovery" (don't we all have these, by the way?) including her efforts to raise her son Trig. It is indeed nice to think that there would be an advocate for such children inside the corridors of the White House, although I'd surely like to hear what -- if anything -- she's done for special needs kids as governor of Alaska.

But...it was a great speech -- written for someone else, a male in fact, days before the Palin selection was even a gleam in John McCain's eye, but a great speech nonetheless. The pundits are fawning over it as I write this -- Tom Brokaw said she could not have been "more winning and more engaging" -- and in a world that is dominated by horse race journalism I can understand why, because I agree that Palin's one-of-a-kind story has given her long shot running mate a decent chance now of pulling this one out at the finish line.

It's a good metaphor, a horse race, because in the end it finishes right near where it started -- just as it will be for America if John McCain and Sarah Palin are sworn in on Jan. 20, 2009. Yes, it was a great speech politically, and a great night for her family, but an empty speech for America -- and for America's families. It was defined by its lowest moment, Palin's shameless lie about "the Bridge to Nowhere."

This was a Speech to Nowhere.

It was a Speech to Nowhere when Palin said that "I told the Congress 'Thanks but no thanks' on that Bridge to Nowhere," because that was a lie, and the worst kind of lie in American politics, a blatant falsehood that showed utter contempt for the American people that Palin pledged to serve, assuming we are too stupid to look up or know that truth, that she pushed for those funds in Congress and while she got great political mileage out of announcing that she was killing the project, she still has not returned the funds to American people.

It was a Speech to Nowhere because Palin also boasted seconds before her lie of fighting against wasteful earmarks in Congress, even though she pushed for and accepted $27 million of such grants when she was mayor of Wasilla.

It was a Speech to Nowhere because Palin said that "we've got lots" of oil and gas this country, and while one supposes that all depends upon what you definition of the words "lots" is, the production of oil in the United States has been irrevocably on the decline since 1970, and with her words she showed this nation that she and John McCain will perpetrate the dangerous myths that began with Ronald Reagan at his acceptance speech in 1980, that sunny optimism is the solution to all our energy woes, and not a posture that put energy research on a war footing, or requires moral leadership on conservation, mass transit, or any other common sense answers whatsoever.

It was a Speech to Nowhere because Palin boasted that "I stood up to the special interests, and the lobbyists, and the Big Oil companies," and the audience cheered -- after eight brutal years of the same crowd's cheering two oilmen in the White House who fiddled while $4-a-gallon gas burned and while American men and women died in a needless war fought on top of an oilfield, and while lobbyist friends like Jack Abramoff and Ralph Reed got rich at the same time.

It was a Speech to Nowhere because Palin had the nerve to talk at length about John McCain's "torturous interrogations" in the very same speech when she all but condoned the continuation of similar, abhorrent practices that have been directed for eight years by our own U.S. leaders, when she stated that Democrats are "worried that someone won't read them [terrorism suspects] their rights."

It was a Speech to Nowhere because Palin belittled "community organizers" -- thousands of Americans who work long hours for little pay in some of the toughest neighborhoods, trying to assist the American Dream that even the poorest among us can pull themselves out of the muck with a helping hand. Palin and other GOP speakers have turned a noble job into a dirty word tonight -- shame on you! Listen to what CNN's Roland Martin said after Palin's speech was over.

My two parents are sitting home in Houston, Texas and they are both community organizers and the GOP and Sarah Palin might have well have said "being community organizers doesn't matter" to my parents face. I'm disgusted. Community organizers keep people in their homes, keep their lights on, keep food in the fridge.

It was a Speech to Nowhere because it made no mention of the men that Sarah Palin and John McCain are running to replace -- their names are Dick Cheney and George W. Bush, in case you've forgotten this week -- and no acknowledgment that as many 80 percent of Americans believe this country is on the wrong track, or that you can't solve a nation's problems when you deny they exist.

It was a Speech to Nowhere because...well, I urge everyone to read the text, without Palin's sharp delivery or her adoring fans in the crowd and in the press box, and tell me where there is any kind of policy at all -- except for the short boilerplate passage on energy -- or any mention of the issues that concern everyday Americans, including the No. 1 issue of the economy. Show me the part where this "grand slam" of speech touches on how citizens can afford health care or sending their kids to college.

But more than anything else, it was a Speech to Nowhere because for all the acclaim, the great bulk of it was devoted to one thing, and that is the one thing that millions of Americans are talking about in 2008 when we talk about "change" -- to the ugliest kind of "pit bull" politics, to use Palin's words, that tear down the other side with cheap ad hominem attacks, surrounded by a cloud of half-truths (uh, those "Greek columns"...did you actually even watch Obama's speech? Because there weren't any) and ridiculous innuendo about "parting the waters" which means nothing but fires up a big hockey rink full of Dittoheads. These kind of vicious attacks -- without having the grace to acknowledge that, despite some real differences on issues with Obama, that he has already accomplished something impressive that says something positive about America and the progress we've made -- were utterly lacking in class. And this is what Tom Brokaw considers "winning" -- have we really sunk that low as a nation?. The people of America want and deserve a real debate, now trash talk from the basketball point guard who was once called "Sarah Barracuda."

I hope America wakes up tomorrow and realizes that Sarah Palin's words were rousing -- and completely empty, that they offered no road map (let alone bridge) for America other than more of the bogus partisan name-calling that has gotten us into the mess that we're in now.

Actually, let me rephrase that.

I hope America wakes up tomorrow.

Thanks to TruthOut, click to see GOP pundits telling the truth about her "bullshit" (their words) via a mic they didn't realize was live.

*Here is some info MoveOn.org sent out suggesting we write to our local papers so people will know where Palin really stands on important issues.

One of the best ways to get the word out about Palin is to write a letter to the editor of your local paper. Today's a great day to write because this is very relevant—it just happened last night. Plus, our online tool makes it easy and has great tips. Please take a few minutes to write a quick letter to the editor now:

Palin's speech and the reaction to it also made clear why McCain picked her. It wasn't a decision about who's most qualified to serve a heart-beat away from the presidency—it was a political decision about pleasing the far-right base of the Republican party.

Writing a letter to your local paper is a great way to make sure voters understand that. The opinion pages are the most widely-read pages of the newspaper. Write today, and your letter's a lot more likely to get published because it's so topical. It'll help sway the editorial board too.

Here are a bunch of points you might want to include in your letter:

*Palin recently said that the war in Iraq is "God's task." She's even admitted she hasn't thought about the war much—just last year she was quoted saying, "I've been so focused on state government, I haven't really focused much on the war in Iraq." 1, 2 (footnotes below)

*Palin has actively sought the support of the fringe Alaska Independence Party. Six months ago, Palin told members of the group—who advocate for a vote on secession from the union—to "keep up the good work" and "wished the party luck on what she called its 'inspiring convention.'" 3

*Palin wants to teach creationism in public schools. She hasn't made clear whether she thinks evolution is a fact.4

*Palin doesn't believe that humans contribute to global warming. Speaking about climate change, she said, "I'm not one though who would attribute it to being manmade." 5

*Palin has close ties to Big Oil. Her inauguration was even sponsored by BP. 6
Palin is extremely anti-choice. She doesn't even support abortion in the case of rape or incest. 7

*Palin opposes comprehensive sex-ed in public schools. She's said she will only support abstinence-only approaches. 8

*As mayor, Palin tried to ban books from the library. Palin asked the library how she might go about banning books because some had inappropriate language in them—shocking the librarian, Mary Ellen Baker. According to Time, "news reports from the time show that Palin had threatened to fire Baker for not giving "full support" to the mayor." 9

*She DID support the Bridge to Nowhere (before she opposed it). Palin claimed that she said "thanks, but no thanks" to the infamous Bridge to Nowhere. But in 2006, Palin supported the project repeatedly, saying that Alaska should take advantage of earmarks "while our congressional delegation is in a strong position to assist." 10

The plain fact of the matter is that Sarah Palin did a bang-up job delivering a Karl Rove-style political attack speech last night. That makes her a skilled politician but it doesn't make her views any more palatable for voters. Americans don't really want another far-right, anti-science ideologue in the White House.

P.S. If you haven't seen it, check out the Daily Show clip on Palin. It's worth a watch

1. "Palin: Iraq war 'a task that is from God'," Associated Press, September 3, 2008

2. "Palin wasn't 'really focused much' on the Iraq war," ThinkProgress, August 30, 2008

3. "The Sarah Palin Digest," ThinkProgress, September 4, 2008

4. "McCain and Palin differ on issues," Associated Press, September 3, 2008

5. Ibid

6. The Sarah Palin Digest," ThinkProgress, September 4, 2008

7. Ibid

8. Ibid.

9. "Mayor Palin: A Rough Record," Time, September 2, 2008

10. The Sarah Palin Digest," ThinkProgress, September 4, 2008


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