The Facebook bubble

Posted on February 2, 2012 by oddmanout215

A massive con job may be in progress in the form of the coming Facebook IPO, which will supposedly value the company somewhere in the vicinity of $75 billion to $100 billion.

From DJ Pangburn of Death and Taxes:

… As I noted in early 2011, all of this smells exactly like another tech bubble to replace the burst housing bubble. The Great Facebook Bubble‘s inflation is absurd. Wall Street banks and investors, as well as Facebook’s numerous stockholders—many of whom are looking to cash out their stocks with the IPO—stand to benefit if they can create the illusion that Facebook is actually worth $100 billion.

The goal is to spread the belief in the illusion such that the valuation reaches its apogee, then falls over time (as all stocks do), by which point the wise investors will have already laughed all the way to the bank. As initial investors that is their right, of course, but it doesn’t mean they didn’t create and sell an illusion in the process…

Posted in Wall Street, world-wide economy | Tagged , , | 2 Comments

Poe at the billionaires’ bash

Posted on February 1, 2012 by oddmanout215

Bill Moyers and William Winship commenting on the arrogance of “imperial swells” who throw grand parties to congratulate themselves on their great wealth:

This one occurred here in Manhattan at the annual black-tie dinner and induction ceremony for Kappa Beta Phi. That’s the very exclusive Wall Street fraternity of billionaire bankers, and private equity and hedge fund predators. People like Wilbur Ross, the vulture capitalist; Robert Benmosche, the CEO of AIG, the insurance giant that received tens of billions in bailout money; and Alan “Ace” Greenberg, former chairman of Bear Stearns, the failed investment bank bought by JPMorgan Chase.

They got together at the St. Regis Hotel off Fifth Avenue to eat rack of lamb, drink and haze their newest members, who are made to dress in drag, sing and perform skits while braving the insults, wine-soaked napkins and petit fours – those fancy little frosted cakes – hurled at them by the old guard. In other words, a gilt-edged Animal House, food fight and all.

This year, the butt of many a joke were the protesters of Occupy Wall Street… The whole affair’s reminiscent of the wingdings the robber barons used to throw during America’s…Gilded Age a century and a half ago, when great wealth amassed at the top, far from the squalor and misery of working stiffs…

It’s also reminiscent of “The Masque of the Red Death,” the Edgar Allan Poe short story in which a thousand royals in an unnamed territory hole up in a walled abbey to protect themselves against a disease that’s killing off the common people. At some point the royals grow bored and throw a masquerade party. A mysterious figure in a blood-stained robe and a death mask disturbs the mood of the revelers. They attack the offending figure but discover there’s no form under the costume, just the dread disease:

…And one by one dropped the revelers in the blood-bedewed halls of their revel, and died each in the despairing posture of his fall. And the life of the ebony clock went out with that of the last of the gay. And the flames of the tripods expired. And Darkness and Decay and the Red Death held illimitable dominion over all.

Poe may or may not have meant the story as an allegory, but I sure as hell like reading it that way. The revelers at the St. Regis — “the winners in our winner-take-all economy,” Moyers calls them — are the revelers in Poe’s abbey. The only thing lacking in the modern version of the story is a similarly satisfying ending.

Footnote: I’m picturing vulture capitalist Wilbur Ross trying to make a deal with Mr. Death: “I just bought the Bank of Ireland. Take my euros, please…”

Posted in economic collapse, fiction, Goldman Sachs, history, humor, New York Times, Occupy Wall Street, Wall Street | Tagged , , , , , , , , | 1 Comment

Dirtballs face off in Florida

Posted on January 30, 2012 by oddmanout215

Background on Mitt Romney’s “you’re as big a dirtball as I am” line of attack:

A recent newspaper story detailed at great length how campaign strategists for Romney and Newt Gingrich are battling to secure a win for the their respective candidates in the Florida primary. Multimillions are being spent on attack ads, mostly by Mitt, who also hired a new debating coach and “fearsome researchers.” Newt accused Mitt of having mutual funds invested in Freddie Mac and Fannie Mae, mortgage lenders backed by (gasp!) big government. Mitt counterattacked with the same charge when he learned Newt also had invested in Freddie and Fannie.

Mitt made his fortune destroying companies and putting people out of work. Newt, a former influence peddler for Freddie Mac, has been fronting since the 1980s for those who want to eliminate social services. Mitt is by far the wealthier of the two, but both candidates are up to their ears in dirty money, and ultimately answerable to the big banks, corporations and individual billionaires (Newt is Sheldon Adelson’s boy) that back their campaigns.

It’s as if John Dillinger and “Pretty Boy” Floyd were arguing who was the bigger criminal, except that Dillinger and Floyd weren’t hypocrites and front men for The Guys Who Really Run the Show, and didn’t harm nearly as many people.

In a just world, all those millions being spent on the primary would go to the huge number of Floridians who have lost their jobs and/or homes in the so-called Great Recession, but I think it’s safe to assume the fate of poor people doesn’t figure into the campaign strategies of these candidates.

In fact, who but a rich person or an imbecile would vote for either of them?

Oh, now I remember — “low information” voters.

Posted in campaign finance reform, economic collapse, Great Recession, mainstream media, Mitt Romney, Politics, The New Depression, unemployment, Wall Street | Tagged , , , | 2 Comments

‘Job creator’ myth debunked

Posted on January 28, 2012 by oddmanout215

NYT reporters don’t seem to have access to the same facts as NYT columnist Paul Krugman, maybe because he doesn’t have an intranet connection to the newsroom. I’m kidding, but who knows? On Friday, Krugman lit into Indiana Gov. Mitch Daniels for misleadingly referring to Steve Jobs, the late CEO of Apple, as a job creator, even though Apple employs only 43,000 people in the U.S. while indirectly employing 700,000 people in other countries.

Yes, the Times did report those figures in a piece that helped explain why Apple does so much work in totalitarian China — the Chinese government subsidizes huge manufacturing centers with reliable supply chains and ultra-cheap labor — and so little in the U.S.

However, a more thorough investigative piece would have put Chinese manufacturing efficiency in perspective by including the sometimes startling information in Krugman’s Friday column:

…Germany remains a highly successful exporter even with workers who cost, on average, $44 an hour — much more than the average cost of American workers. And this success has a lot to do with the support its small and medium-sized companies — the famed Mittelstand — provide to each other via shared suppliers and the maintenance of a skilled work force.

The point is that successful companies — or, at any rate, companies that make a large contribution to a nation’s economy — don’t exist in isolation. Prosperity depends on the synergy between companies, on the cluster, not the individual entrepreneur.

But the current Republican worldview has no room for such considerations. From the G.O.P.’s perspective, it’s all about the heroic entrepreneur, the John Galt, I mean Steve Jobs-type “job creator” who showers benefits on the rest of us and who must, of course, be rewarded with tax rates lower than those paid by many middle-class workers…

I think Krugman’s larger, implicit point is that American corporations do what they do — off-shore millions of jobs while being treated to gigantic tax breaks — only because our corrupt political system allows them to do so. We could be Germany, a democracy with strong unions, good wages and universal health care, if we had laws that reined in the Ayn Rand disciples who sell out American workers but are portrayed as heroes by the American media.

Posted in campaign finance reform, economic collapse, globalization, Great Recession, mainstream media, New York Times, The New Depression, unemployment | Tagged , , , , , | 5 Comments

Newt promises the moon

Posted on January 28, 2012 by oddmanout215

Newt Gingrich was in Florida the other day, speaking of plans to build a colony on the moon.

This is funny, but cruel. Florida’s economy collapsed when the housing bubble burst. There will be no more housing booms in Florida, and only a looney would believe there will be a new aerospace boom. Gingrich isn’t looney — he’s just another corrupt hack trying to convince desperate people he can make their lives more bearable. To the moon, Newt!

Footnote: “Rope Ladder to the Moon” is from Songs For a Tailor, Jack Bruce’s first release after Cream broke up, and a good example of the boldly eccentric style he cultivated throughout most of his solo career. His lyricist, Pete Brown, often went over the top, but how could he not, working with someone who wrote such off-the-wall melodies?

Posted in arts, economic collapse, humor, pop music | Tagged , , , , , | Leave a comment

A life-affirming little theft

Posted on January 27, 2012 by oddmanout215

Call Jennifer Egan’s A Visit From the Goon Squad a collection of interrelated short stories. Or call it a novel, if you like. The book has won several prestigious awards, so Egan might not care what you call it. She read Wednesday night at Rutgers-Camden from the book’s opening story, or chapter, called “Found Objects,” about a New York City woman named Sasha who has a one-night stand with a man named Alex. Sasha finds time to indulge her ruling compulsion, kleptomania, when Alex uses her bathroom, and this is where Egan conjures up the sort of little surprise that makes short fiction worth reading:

… She knelt on the floor and slipped his wallet from his pants pocket and opened it, her heart firing with a sudden pressure. It was a plain black wallet, worn to gray along the edges. Rapidly she flicked among its contents: a debit card, a work ID, a gym card. In a side pocket, a faded picture of two boys and a girl in braces, squinting on a beach. A sports team in yellow uniforms, heads so small she couldn’t tell if one of them belonged to Alex. From among these dog-eared photos, a scrap of binder paper dropped into Sasha’s lap. It looked very old, the edges torn, the pale-blue lines rubbed almost away. Sasha unfolded it and saw written, in blunt pencil, “I BELIEVE IN YOU.” She froze, staring at the words. They seemed to tunnel toward her from their meagre scrap, bringing a flush of embarrassment for Alex, who’d kept this disintegrating tribute in his disintegrating wallet, and then shame at herself for having looked at it. She was faintly aware of the faucet being turned on, and of the need to move quickly. Hastily, mechanically, she reassembled the wallet, keeping the slip of paper in her hand. I’m just going to hold this, she was aware of telling herself as she tucked the wallet back into Alex’s pocket. I’ll put it back later; he probably doesn’t remember it’s in there. I’ll actually be doing him a favor by getting it out of the way before someone finds it. I’ll say, Hey, I noticed this on the rug, is it yours? And he’ll say, That? I’ve never seen it before—it must be yours, Sasha. And maybe that’s true. Maybe someone gave it to me years ago, and I forgot…

Buy the book. Support the arts. Support fiction writers!

Posted in arts, fiction | Tagged , , | 1 Comment

Natural-born faux populists

Posted on January 26, 2012 by oddmanout215

Watching Barack Obama’s speech the other night, my mood swung from bemusement to grudging admiration to laugh-out-loud disbelief. I wrote a post yesterday that focused on the president’s innate acting ability. Today, Robert Scheer noted that Obama’s gift is strongly reminiscent of Bill Clinton’s:

I’ll admit it: Listening to Barack Obama, I am ready to enlist in his campaign against the feed-the-rich Republicans … until I recall that I once responded in the same way to Bill Clinton’s faux populism. And then I get angry because betrayal by the “good guys” for whom I have ended up voting has become the norm.

Yes, betrayal, because if Obama meant what he said in Tuesday’s State of the Union address about holding the financial industry responsible for its scams, why did he appoint the old Clinton crowd that had legalized those scams to the top economic posts in his administration? Why did he hire Timothy Geithner, who has turned the Treasury Department into a concierge service for Wall Street tycoons?

Why hasn’t he pushed for a restoration of the Glass-Steagall Act, which Clinton’s deregulation reversed? Does the president really believe that the Dodd-Frank slap-on-the-wrist sellout represents “new rules to hold Wall Street accountable, so a crisis like this never happens again”? Can he name one single too-big-to-fail banking monstrosity that has been reduced in size on his watch instead of encouraged to grow ever larger by Treasury and Fed bailouts and interest-free money..?

Footnote: Thank God that Mitt “Carried Interest” Romney is such a bad actor. Imagine if he were able to fake concern for people who work for a living.

Posted in Goldman Sachs, Great Recession, humor, mainstream media, movies, Obama | Tagged , , , , | 1 Comment

Barack Obama, prince of players

Posted on January 26, 2012 by oddmanout215

Listening to Barack Obama’s State of the Union address in 2012 was like listening to his campaign speeches in 2008. Every issue he’d placed in deep freeze during his first three years as president was brought out to thaw. His newly acquired disdain for companies that move jobs overseas and financial institutions that engage in crooked business practices was unambiguously voiced. His empathy with the working class was on full display, and expressed with such earnest vigor that it seemed I must have been an idiot to conclude he was on the side of the one percent.

At one point, emphasizing the importance of closing the gap between the haves and have-nots, Obama said, “You can call this class warfare all you want. Most Americans would call that common sense.”

So succinct. So impassioned. So bogus.

Read the speech and tell me if most of the the text, minus Obama’s brilliant delivery of it, amounts to anything more than variations on promises he made four years ago that remain unfulfilled, partly because he thought it wouldn’t be prudent to offend Wall Street or the mythical mass of independent voters who are turned off by populist ideas and programs.

But give Obama his due. Watching him speak, I thought of the ideal leader — someone like Henry V as played by Lawrence Olivier, rousing the English troops before the battle of Agincourt. I believed Obama’s speech as he delivered it, just as I believed Olivier’s, but I knew both men were going home to bed after their performances, not into battle.

At one point in the speech, Obama did promise something that sounded substantive:

Tonight, I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.

Obama announced that the unit will be co-chaired by New York Attorney General Eric Schneiderman, one of the few high-level prosecutors whose actions have demonstrated a commitment to bringing down the banksters. But how much power will Schneiderman actually wield?

Posted in Congress, economic collapse, globalization, Obama, Politics, Wall Street | Tagged , , , , | 3 Comments

Slave labor is good for business

Posted on January 24, 2012 by oddmanout215

A depressing piece in the Sunday New York Times re-explained why the U.S. is losing huge numbers of manufacturing jobs, but it didn’t mention how we can hope to reverse this trend if our biggest corporations continue to work with governments that stop at nothing to steal those jobs.

The writers described how the late Steve Jobs of Apple, in a tizzy over the possibility that its iPhone might not appear in stores on schedule, turned to a Chinese factory. This is how the job began to get done:

A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the [Apple] executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.

“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”

The writers gloss over the fact that the “speed and flexibility” of production is only possible because manufacturing centers in China receive unlimited support from the Chinese government and treat workers only slightly better than Nazis treated the slave laborers who built their V2 rockets.

No light is shed in the NYT on strategies for fighting back against totalitarian countries that subsidize production centers and mistreatment of workers. (For more on mistreatment, see “Apple and Unbridled Capitalism” in Daily Kos.)

Similarly, Robert Reich offers no solutions in an article today regarding the migration of jobs to Southeast Asia. He writes:

GE’s CEO Jeffrey Immelt chairs Obama’s council on work and competitiveness. I’d wager that as an American citizen, Immelt is concerned about working Americans. But as CEO of GE, Immelt’s job is to be concerned about GE’s shareholders. They aren’t the same.

GE has also been creating more jobs outside the United States than in it. A decade ago, fewer than half of GE’s employees were non-American; today, 54 percent are.

“Concerned”? Reich notes the need for more investment in education, R&D and infrastructure, and that the American government isn’t working on these problems, largely because of the lobbying power of the large corporations, many of which pay virtually no taxes.

Reich and the NYT ignore the hypocrisy of corporate chiefs and their stooges in Congress. These people don’t like “big government” in America because they don’t want to pay taxes, abide by environmental and safety regulations, or treat workers decently, but they love gigantic, oppressive government in China, because that’s where their profit margins are highest.

Will Barack Obama address the problem of lost jobs caused by greedy corporations in a genuinely substantive way in his State of the Union address tonight? I hope you don’t think that’s a serious question.

Posted in economic collapse, environmentalism, globalization, mainstream media, New York Times, Obama, unemployment, world-wide economy | Tagged , , | 1 Comment

A masterpiece, exclusively for you

Posted on January 24, 2012 by oddmanout215

The office of my new literary agent

I like Betsy Lerner’s blog, about the craft and business of writing. Here’s her response to someone who asked how long a writer should wait for a response from an agent to whom the writer has offered an “exclusive submission”:

You are assuming that the agent cares that you made an exclusive submission. If the agent asked you for an exclusive or makes exclusivity a condition of submission then he or she should get back to you in a timely fashion. What is a timely fashion? This is up for debate. I would say 3-6 weeks for a full length manuscript. But if there is no relationship between you and the agent, then there is no need to make the submission exclusive, or to think that by making it exclusive the manuscript will be attended to more quickly. This should be filed under magical thinking…

Right. This is one of the dangers of trying to make money as a writer — especially as a writer of novels. You create your little world, invent crises and dilemmas that demand the intervention of a higher power, which happens to be you.

The more time you spend in this self-created world, the more likely you are not only to fumble relationships with intimates, but also to make bad assumptions about how agents and publishers and the reading public will react to your work. This isn’t true for all writers, of course, but it is for many.

Offering an exclusive to an agent you don’t know indicates lack of perspective, perhaps caused by too much solitude. An agent evaluates your work on the basis of whether or not she thinks she can sell it. You have gone around the bend if you offer an exclusive and imagine the agent will react by sweating over whether your manuscript will become a bestseller if he/she rejects it.

Do some research. Query agents who seem to handle the genre of fiction in which you write. Life, is short, so query more than a few agents at a time.

One of these days I’m going to take my own advice.

Posted in arts, fiction, humor | Tagged , , | 1 Comment