Part of a print series produced for Tokyo Fixed at the Hyper Japan event. It is inspired from Japanese ukiyo-e prints using a Risograph printing process to create a similar woodblock effect. The Samurai is riding a track frame based on the legendary Japanese frame builder Nagasawa.
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Current Events: Shell Game

[ed. “If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.” -- Warren Buffett]

by Yves Smith, Naked Capitalism

If you have any doubt that Bank of America is in trouble, this development should settle it. I’m late to this important story broken this morning by Bob Ivry of Bloomberg, but both Bill Black (who I interviewed just now) and I see this as a desperate (or at the very best, remarkably inept) move by Bank of America’s management.

The short form via Bloomberg:

Bank of America Corp. (BAC), hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits, according to people with direct knowledge of the situation…

Bank of America’s holding company — the parent of both the retail bank and the Merrill Lynch securities unit — held almost $75 trillion of derivatives at the end of June, according to data compiled by the OCC. About $53 trillion, or 71 percent, were within Bank of America NA, according to the data, which represent the notional values of the trades.

That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show.

Now you would expect this move to be driven by adverse selection, that BofA would move its WORST derivatives, that is, the ones that were riskiest or otherwise had high collateral posting requirements, to the sub. Bill Black confirmed that even though the details were sketchy, this is precisely what took place.  (...)

This changes the picture completely. This move reflects either criminal incompetence or abject corruption by the Fed. Even though I’ve expressed my doubts as to whether Dodd Frank resolutions will work, dumping derivatives into depositaries pretty much guarantees a Dodd Frank resolution will fail. Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs. So this move amounts to a direct transfer from derivatives counterparties of Merrill to the taxpayer, via the FDIC, which would have to make depositors whole after derivatives counterparties grabbed collateral. It’s well nigh impossible to have an orderly wind down in this scenario. You have a derivatives counterparty land grab and an abrupt insolvency. Lehman failed over a weekend after JP Morgan grabbed collateral.

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[ed.  Everybody get those throw away lines?  $75 trillion in derivatives at BoA, $79 trillion at JPMorgan?]

by Mark Fredrickson
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The 99 Percent Declaration

[ed.  Since the Occupy movement has been somewhat of an organic process, which now includes other groups throughout the world, it's hard to know whether this is a legitimate representation of the movement in general or some faction trying to exert control.  Who delegated this group to speak for everyone and how did that happen?  Still, it's interesting to consider the full plate of grievances represented here.]

WHEREAS THE FIRST AMENDMENT TO THE UNITED STATES CONSTITUTION PROVIDES:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

BE IT RESOLVED THAT:

WE, THE NINETY-NINE PERCENT OF THE PEOPLE of the UNITED STATES OF AMERICA, in order to form a more perfect Union, by, for and of the PEOPLE, shall elect and convene a NATIONAL GENERAL ASSEMBLY beginning on July 4, 2012 in the City Of Philadelphia.  (...)

At the NATIONAL GENERAL ASSEMBLY, the 870 Delegates shall set forth, consider and vote upon a PETITION OF GRIEVANCES to be submitted to all members of Congress, The Supreme Court and President and each of the political candidates running in the nationwide Congressional and Presidential election in November 2012.  The Delegates of the National General Assembly shall vote upon and implement their own agenda, propagate their own rules and elect or appoint committee members as the Delegates see fit to accomplish their goal of presenting a PETITION OF GRIEVANCES from the 99% of Americans before the 2012 elections.

III. Proposed Petition for the Redress of Grievances:

The PETITION OF GRIEVANCES shall be non-partisan and address the critical issues now confronting the People of the United States. The Delegates shall deliberate and vote upon proposals for the PETITION OF GRIEVANCES in consultation with the People as the delegates to the first two Continental Congresses did. Below is a suggested list of grievances respectfully submitted by the OWS Working Group on the 99% Declaration. The final version of the PETITION OF GRIEVANCES voted upon by the Delegates of the National General Assembly MAY or MAY NOT include the following suggested issues: 

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Airlines Battle Back to Profit

[ed.  Bad news flight fans, seating is getting tighter and those additional fees everyone loves to hate?  They're not going anywhere.]

by Jad Mouawad, NY Times

The same things making many air travelers grumble these days — rising fares with more and more fees, fewer flights, planes filled to the brim — are the things giving airline executives a reason to smile.

After a decade of losing money because of cutthroat competition, slumping traveler demand and volatile fuel prices, the industry has found a way to regain control of its fortunes — and make money — by shelving its 1990s strategy of aggressive growth. Despite the weak economy, most domestic airlines will have their second consecutive profitable year in 2011, after losing $55 billion since 2001.  (...)

In 1990, tickets accounted for 88 percent of the airlines’ passenger revenue. In 2010, that share dropped to 71 percent. The new revenue accounted for most of the difference. Bag fees alone brought in revenue of more than $784 million in the first quarter — out of total revenue for the industry of $43 billion.

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photo: Brian Kersey/Associated Press

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Is Turbulence Dangerous?

by Patrick Smith, Salon

“As we cruised toward Portland, a thousand or so feet above the cottony peaks, the slamming came on with a vengeance. We requested a climb, but not soon enough. When the worst of the pummeling hit, it was like being stuck in an upside-down avalanche. Even with a shoulder harness pulled snug, I remember holding up one hand to brace myself, afraid my head might hit the ceiling.”

Turbulence: spiller of coffee, jostler of luggage, filler of barf bags, rattler of nerves. But is it a crasher of planes?

Judging by the reactions of many airline passengers, one would assume so. I’d been a commercial pilot for the better part of 10 years, a job that requires its share of impromptu coaching sessions with white-knucklers, and figured I had a pretty good grasp of the fearful flier mind-set. I didn’t. Not until I began writing for this magazine, and fielding questions from the public, did I realize how upsetting, if you’ll grant the pun, turbulence is for tens of thousands of travelers.

“Turbulence is the issue,” says Tom Bunn, a retired captain and licensed therapist. Bunn founded the nation’s most popular fearful flier program, SOAR. “It is far and away the No. 1 concern among my clients.”

Intuitively this makes sense. Everybody who steps on a plane is on some level uneasy, and there’s not a more poignant reminder of flying’s innate precariousness, and all its potential complications, than a good walloping at 37,000 feet. It’s easy to picture the airplane as a helpless dinghy caught unawares in a stormy sea. Boats are occasionally swamped, capsized or dashed into reefs by swells, are they not? Everything about it seems dangerous.

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Bob Dylan

[ed.  No video, but this is the best audio I could find.  A good song for the times.  And maybe a good slogan for the OWS movement. addendum: hmmm...seems like this video has has been deleted. Here's R.L Burnside's cover instead.]

Everything is Broken
by Bob Dylan

Broken lines, broken strings, broken threads, broken springs
Broken idols, broken heads, people sleeping in broken beds
Aint no use jivin, aint no use jokin
Everything is broken

Broken bottles, broken plates, broken switches, broken gates
Broken dishes, broken parts, streets are filled with broken hearts
Broken words never meant to be spoken
Everything is broken

Seems like every time you stop and turn around
Someone else has just hit the ground

Broken cutters, broken saws, broken buckles, broken laws
Broken bodies, broken bones, broken voices on broken phones
Take a deep breath, feel like youre chokin
Everything is broken

Every time you leave and go off some place
Things fall to pieces in my face

Broken hands on broken plows, broken treaties, broken vows
Broken pipes, broken tools, people bending broken rules
Hound dog howlin, bullfrog croakin
Everything is broken

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Frank Lloyd Wright, 1946 | Source
A sheet of architect Frank Lloyd Wright’s personal stationery; a much larger version of which is here.
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The Difference Between Bird Watching and Birding

by Jonathan Rosen, The New Yorker

Birding is the opposite of being at the movies—you’re outside, not sitting in a windowless box; you’re stalking wild animals, not looking at pictures of them. You’re dependent on weather, geography, time of day—if you miss the prothonotary warbler, there isn’t a midnight showing. On the other hand, birding, like moviegoing, is at heart voyeuristic, and you can’t do it without technology—to bring birds closer you must interpose binoculars between yourself and the wild world. To find them in the wild, you need planes, trains, automobiles, and motorboats. Birds are natural; birders aren’t.

And some birders are less natural than others, like the three characters at the heart of “The Big Year,” who are driven to see as many North American species as possible. They are genial caricatures of normal people, partly because they’re in a Hollywood movie, but mostly because they are birders. As a birder myself, I recognize the symptoms: I’ve travelled great distances to see birds; I’ve totted up the names of birds on lists and felt weirdly comforted, as if they guarded me against oblivion; I’ve listened, like Jack Black’s character, to birdcalls on my iPod. But I have to admit that at bottom I’m an indifferent birder, despite having written a book called “The Life of the Skies: Birding at the End of the Nature.” At the end of the day I am a bird-watcher, not a birder.

This may seem like a pedantic distinction in an already marginal world, but it matters—though the two terms bleed into each other. Crudely put, bird-watchers look at birds; birders look for them. Ahab wasn’t fishing, and the guys in “The Big Year” aren’t watching birds, they’re scouring North America in a ruthless bid to tick off more species than anyone else. They don’t even have to see them—hearing their call is enough.

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Joni Mitchell

Urge for Going
by Joni Mitchell

I awoke today and found
the frost perched on the town
It hovered in a frozen sky
then it gobbled summer down
When the sun turns traitor cold
and all the trees are shivering in a naked row

I get the urge for going
But I never seem to go
I get the urge for going
When the meadow grass is turning brown
Summertime is falling down and winter is closing in

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The Great Tech War Of 2012

by Farhad Manjoo, Fast Company

To state this as clearly as possible: The four American companies that have come to define 21st-century information technology and entertainment are on the verge of war. Over the next two years, Amazon, Apple, Facebook, and Google will increasingly collide in the markets for mobile phones and tablets, mobile apps, social networking, and more. This competition will be intense. Each of the four has shown competitive excellence, strategic genius, and superb execution that have left the rest of the world in the dust. HP, for example, tried to take a run at Apple head-on, with its TouchPad, the product of its $1.2 billion acquisition of Palm. HP bailed out after an embarrassingly short 49-day run, and it cost CEO Léo Apotheker his job. Microsoft's every move must be viewed as a reaction to the initiatives of these smarter, nimbler, and now, in the case of Apple, richer companies. When a company like Hulu goes on the block, these four companies are immediately seen as possible acquirers, and why not? They have the best weapons--weapons that will now be turned on one another as they seek more room to grow.

There was a time, not long ago, when you could sum up each company quite neatly: Apple made consumer electronics, Google ran a search engine, Amazon was a web store, and Facebook was a social network. How quaint that assessment seems today.  (...)

Amazon, Apple, Facebook, and Google don't recognize any borders; they feel no qualms about marching beyond the walls of tech into retailing, advertising, publishing, movies, TV, communications, and even finance. Across the economy, these four companies are increasingly setting the agenda. Bezos, Jobs, Zuckerberg, and Page look at the business world and justifiably imagine all of it funneling through their servers. Why not go for everything? And in their competition, each combatant is getting stronger, separating the quartet further from the rest of the pack.

Everyone reading this article is a customer of Amazon, Apple, Facebook, or Google, and most probably count on all four. This passion for the Fab Four of business is reflected in the blogosphere's panting coverage of their every move. ExxonMobil may sometimes be the world's most valuable company, but can you name its CEO? Do you scour the Internet for rumors about its next product? As the four companies encroach further and further into one another's space, consumers look forward to cooler and cooler products. The coming years will be fascinating to watch because this is a competition that might reinvent our daily lives even more than the four have changed our habits in the past decade. And that, dear reader, is why you need a program guide to the battle ahead.

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Image: From left: The late Apple cofounder Steve Jobs, Facebook CEO Mark Zuckerberg, Google CEO Larry Page, and Amazon CEO Jeff Bezos. | Photos courtesy of David Paul Morris/Getty Images (Jobs); Justin Sullivan/Getty Images (Zuckerberg); Chip East/Reuters (Page); Mario Tama/Getty Images (Bezos).

Quantum Levitation

[ed. For Nate.]

Article:  Were hoverboards real?

Slow Club

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DVA

[ed.  As I understand it: suppose the equity in your house declined by 25 percent, you then turn around and claim you actually made a 25 percent profit because now you can buy it back at a 25 percent discount (some time in the future).  Bankers..].

by Joe Weisenthal, Business Insider

JPMorgan Q3 earnings have come in better than expected, at $1.02.

But it's a bank report, so were going to need to look deeper to see if it's good.

The first red flag is the Debt Valuation Adjustment: The company booked a big gain BECAUSE its bonds worsened significantly, meaning technically on an accounting basis, the company's equity jumped. Read an explanation here.

Here's their commentary

Jamie Dimon, Chairman and Chief Executive Officer, commented: “The Firm reported third-quarter net income of $4.3 billion, representing a 13% return on tangible common equity¹. It is notable that these results included several significant items^(*), including a $542 million pretax loss in Private Equity, $1.0 billion pretax of additional litigation expense in Corporate and a $1.9 billion pretax DVA gain. The DVA gain reflects an adjustment for the widening of the Firm’s credit spreads which could reverse in future periods and does not relate to the underlying operations of the company. All things considered, we believe the Firm’s returns were reasonable given the current environment.”

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Back to School, Ryan Conners
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The Right to Die

by Alex Lickerman, M.D., Psychology Today

The notion that dying is a right seems nonsensical to argue: death is given to all of us equally without the need of anyone's sanction. The right to die well, on the other hand—well, that's another matter entirely. A good death is, in many cases, something our fellow human beings have great power to grant or deny, and is therefore, sadly, a right for which we must indeed fight.

The notion that we'd even need to fight for the right to die well has only come to make sense relatively recently, within the last forty years or so. Prior to that, our ability to prolong dying—meaning, keep extremely ill people going in hopes that they might overcome whatever health problem threatens even when the likelihood is vanishingly small—was actually fairly limited. But with the advent of modern intensive care units and all the amazing technology that's emerged in the last four decades, we can now stretch the quantity of out our last days often to weeks or even months. Unfortunately, a similar stretching of quality hasn't yet occurred; if anything, we see the opposite (to be fair, the same technology also stretches some lives to years and even decades, meaning it's enabled some people to recover from insults that in the past would have undoubtedly killed them).

Health providers don't wield this technology to prolong suffering intentionally. As I argued in a previous post, Knowing When To Stop, it's quite difficult to predict the timing of death, even in the terminally ill. In one sense, then, the horrific deaths many patients experience at the hands of modern medicine reflects our species' profound optimism bias. Even when in our hearts we know it's time to stop, we often don't.

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#128 11-09-10 by lee kaloidis
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