Friday, December 30, 2005

Time to raise the debt ceiling

Snow urges Congress to raise debt limit:

WASHINGTON (Reuters) - U.S. Treasury Secretary
John Snow warned lawmakers on Thursday that a legally set limit on the government's ability to borrow will be hit in mid-February and urged Congress to raise it quickly.

Failure to do so potentially risks throwing the country into its first default in history, Snow warned in what has become virtually an annual rite as U.S. borrowing needs spiral.

"The administration now projects that the statutory debt limit, currently $8.184 trillion, will be reached in mid-February 2006," Snow said in a letter to 21 members of the U.S. House of Representatives and Senate released by Treasury after financial markets had closed.

Time to print more monopoly money. It's a good thing the Fed will stop reporting M3 next year.

When faced with a record high in computer security problems

Cut the budget:

The Treasury Department says that cyber crime has now outgrown illegal drug sales in annual proceeds, netting an estimated $105 billion in 2004, the report said.

At the same time, the Department of Homeland Security's 2005 research budget for cybersecurity programs was cut 7% to $16 million.

Computer security is now more profitable than illegal drugs, yet the budget for fighting cybercrime is a fraction of the budget for the War on Drugs. Not only is the budget a fraction, it has been cut. Nice priorities.

Thursday, December 29, 2005

Iran studies Russian nuclear proposal

Things heat up:

Iran is studying a Russian proposal for the Islamic republic to enrich uranium on Russian soil, a top national security official said, although commentators urged caution over a possible breakthrough.
He said that the Russian proposal was based on the establishment of a "joint Iran-Russia company on Russian soil" for the enrichment of uranium, a key component of the nuclear fuel cycle.

Wednesday, December 28, 2005

Mmmm, government cookies

Via Boing Boing:

The Web site is bugged! Apparently the Webmaster for the site has hired Webtrends to track visitors around the site using Web bugs and permanent cookies. Here's the Web bug that I found on the home page of the Web site (...) Similar Web bugs can be found on other Web pages at the Whitehouse Web site.

Before 9/11, the Clinton administration said this kind of Web tracking is a no-no for U.S. government Web sites [Link]. Because of the unique laws and traditions about government access to citizens' personal information, the presumption should be that "cookies" will not be used at Federal web sites. Under this new Federal policy, "cookies" should not be used at Federal web sites, or by contractors when operating web sites on behalf of agencies, unless, in addition to clear and conspicuous notice, the following conditions are met: a compelling need to gather the data on the site.

More info for TIA?

Stupid litigation

aka, How to make money by doing nothing:

Rates Technology says that two patents they hold (awarded in 1995, 2001) for minimizing the cost of long distance calls using the Internet are being infringed upon by Google Talk. Copies of these two patents along with one more mentioned in the filing are included in the complaint.

Rates Technology is asking for a jury trial along with:
+ Enforcement of the patents
+ Damages including the loss of profits so provide a royalty
+ A preliminary injuction against Google
+ Attorney's fees

So who is Rates Technology? That's a good question. Finding substanative material on the open web is a challenge. However, a web search did turn up this excellent this blog post from TMCnet publisher Rich Tehrani, that Rates Technology, a company Tehrani says, exists, "to collect revenue from other companies" has also sued Nortel, Sharp Electronics and others over patents it holds. The post also includes has a blurb from a December 7, 1998 WSJ story about the company and recent comments (April 2005) from Rates Technology CEO, Jerry Weinberger.

When you can't innovate, sue. For some reason I don't think this is what the founding fathers meant when they wrote:

To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;

Lawsuits like these -- and there are plenty -- is one of the reasons why the entire "intellectual property" system needs to be scrapped. A new kind of company has emerged, filled with bottom feeders, who's only business model is to buy technology patents and wait for a company to develop a possibly related system that infringes on their "idea".

These scumbags won't be the first ones against the wall, but they'll be in the top ten.

Tuesday, December 27, 2005

Treasury yield curve inverts

But this time it's different™:

The yield on the benchmark 10-year Treasury fell below that of two-year notes early Tuesday, inverting the yield curve for the first time since December 2000.

At 6:23 am ET. the 10-year note yielded 4.393 percent while the two-year note yielded 4.396 percent.

The inversion of the yield curve is rare because investors tend to demand higher yields on longer-dated bonds to compensate for the risk of higher inflation later.

"This clearly suggests we are very close to the end of the tightening cycle...and is not an indication of a recession," said Michael Rottmann, strategist at Hypovereinsbank.

Covering the political fall out

A former SIGINT officer with the NSA says they were probably doing illegal things:

Under the provisions of the Intelligence Community Whistleblower Protection Act (ICWPA), I intend to report to Congress probable unlawful and unconstitutional acts conducted while I was an intelligence officer with the National Security Agency (NSA) and with the Defense Intelligence Agency (DIA). These acts involve the Director of the National Security Agency, the Deputies Chief of Staff for Air and Space Operations, and the U.S. Secretary of Defense.

These probable unlawful and unconstitutional acts were conducted via very highly sensitive intelligence programs and operations known as Special Access Programs (SAP)s. I was a technical intelligence specialist dealing almost exclusively with SAP programs and operations at both NSA and DIA.

The surveillance was broader than first admitted:

The NSA, with help from American telecommunications companies, obtained access to streams of domestic and international communications, said the Times in the report late Friday, citing unidentified current and former government officials.

And Gov. Richardson (D - NM) may have been one of the people monitored under the looser rules:

Gov. Bill Richardson is concerned that some of his phone calls were monitored by a U.S. spy agency and transcripts of them were given to the president's nominee for ambassador to the United Nations, John Bolton.

Sunday, December 25, 2005

More bad news for those of us that value privacy

Saturday, December 24, 2005

Want to know if the NSA is looking at you?

Here's a good idea.

Friday, December 23, 2005

More on ARDA

While ARDA's site may be down, it is easy to find information on some of their programs.

Aquaint doesn't ask questions. It wants to model the information seeking activity. In terms of TIA, this seems to be part of the processes of "Structured argumentation and evidential reasoning" and "Story telling".

VACE is the another easily recognizable project in the TIA program that has been moved over to ARDA. It's a combination of "Biometric signatures of humans" and possibly "Human network analysis and behavior model building engines". The project aims to monitor foreign news casts and "automatically detect, extract, and report high interest people, patterns, and trends in visual content".

ENVIE is another project being pursued by ARDA. ENVIE tries to overcome some of the "Foreign language machine translation and speech recognition" problems by using visual cues to link together relevant information.

Wednesday, December 21, 2005



Tuesday, December 20, 2005

Ars Technica has a handle on it

This is rapidly becoming a hot topic again. Over at Ars Technica is a good article about what the NSA might be doing. The follow up explains why a large data collection and processing system is a bad idea.

More on the missing TIA

Another place where some of the TIA initiatives may have moved is the aforementioned ARDA (links to So what is ARDA?

The Advanced Research and Development Activity (ARDA) is an Intelligence Community (IC) center for conducting advanced research and development related to information technology (IT) (information stored, transmitted, or manipulated by electronic means). ARDA sponsors high risk, high payoff research designed to produce new technology to address some of the most important and challenging IT problems faced by the intelligence community. The research is currently organized into four technology thrusts, Information Exploitation, Quantum Information Science, Global Infosystems Access and Novel Intelligence from Massive Data.

Although the site is down, more information on what ARDA does can be found in their Call for 2005 Challenge Workshop Proposals:

The 2005 Challenge Problems will focus on the following technical areas of interest, although ARDA may also consider compelling proposals that fall outside these areas:
1. Information Exploitation (Info-X, in particular the VACE and AQUAINT programs.
2. Novel Intelligence from Massive Data (NIMD)
3. Advanced Capabilities for Intelligence Analysis (ACIA)
4. Information Assurance (IA)
5. Advanced Imaging (as a seedling workshop)
6. Nanoelectronics for High Performance Computing (as a seedling workshop)

More bleeding edge IT work.

So where did TIA go?

One obvious continuation on the TIA is the National Visualization and Analytics Center. So what does NVAC™ do?

From the about page:

In the fight on terrorism, analysts are bombarded with enormous volumes of data coming from a variety of sources: documents, emails, measurements, images, numbers and even sounds. Often, this information is incomplete, fuzzy, disjointed, or out of context.

Recognizing that humans have a keen ability to process visual information, researchers are creating computer tools—known as visual analytics—that can interpret and analyze vast amounts of data. Visual analytics is the science of analytical reasoning facilitated by interactive visual interfaces. People use visual analytics tools and techniques to:

  • Synthesize information and derive insight from massive, dynamic, ambiguous, and often conflicting data.

  • Detect the expected and discover the unexpected.

  • Provide timely, defensible, and understandable assessments.

  • Communicate assessment effectively for action.

That list sounds very familiar. It seems to be a synthesis of the stated goals of the former TIA. Probably the most telling part is:

By uncovering hidden associations and relationships, analysts glean insight and knowledge to assess terrorist threats to detect the expected and discover the unexpected.

Does "Human network analysis and behavior model building engines" ring a bell?

DefenseTech talks about TIA

Tim F. just posted a link at Balloon Juice about DefenseTech's coverage of TIA. TIA was officially abandonded, but the projects have been moved to new places like the Advanced Research and Development Activity. Before delving into the the specific TIA mission goals, it will be interesting to see where former TIA projects have been moved to. More on that later.

Monday, December 19, 2005

Further thoughts on TIA 2: FISA Boogaloo

The President "was so desperate to kill The New York Times’ eavesdropping story, he summoned the paper’s editor and publisher to the Oval Office." Other people are dealing with the legal aspects of this case and they are, like, real lawyers 'n' stuff. So I'll stick to technical ideas.

TIA is an interesting program from a technological perspective. I've only offered a possible explanation on how a system could safely operate outside the confines of the FISA statute. Stalky was mentioning earlier that analyzing only the patterns of communications wouldn't be nearly as useful as analyzing the content too. And he's right.

In previous examples I used telephone calls as the example of what this theoretical TIA system could do. But in the Information Age, the NSA would not limit itself to telephone calls. A more total TIA system would collect and analyze not only traffic patterns of emails, chat rooms, web traffic, and phone calls, ideally it would also parse the content.

For telephone conversations, off the shelf voice recognition software is already very good. I'm sure what the NSA uses is much, much more advanced. So let's turn back to the bullet list of TIA goodies and look at a few:

Collaboration and sharing over TCP/IP networks across agency boundaries

This one is not really TIA specific, but does address a big problem with government systems. Integration. I would imagine the "former" IAO was tasked with integrating inter and intra-agency communications in order to share intelligence more effectively. That's a pretty big task on its own.

Large, distributed repositories with dynamic schemas that can be changed interactively by users

I'm guessing this refers to creating a semantic web of information where analysts can define the taxonomy to suit a particular situation. Pure speculation though.

Foreign language machine translation and speech recognition

The NSA probably has the recognition part pretty well covered, but machine translation is still pretty tricky. Keyword recognition is probably more important than contextual analysis.

Biometric signatures of humans

Facial recognition? Voice recognition? :shrug:

Real time learning, pattern matching and anomalous pattern detection

Machine learning. Check the link. Wikipedia can explain it better than any short description I can offer.

Entity extraction from natural language text

This also refers to the semantic web and more importantly, contextual analysis. If I'm not mistaken, this is pretty cutting edge stuff, e.g. cool. Who knew government work could be fun?

Human network analysis and behavior model building engines

This was touched on previously.

Event prediction and capability development model building engines

There was a spectacular PR failure by the administration regarding a real world implementation of this idea. I'll search for the link later. It was amusing.

Structured argumentation and evidential reasoning

More AI goodies.

Story telling, change detection, and truth maintenance

Sounds AI-ish, maybe 1984ish. This one will require some research.

Business rules sub-systems for access control and process management

That sounds more like government work...

Biologically inspired algorithms for agent control

Genetic algorithms for AIs -- data mining stuff.

Other aids for human cognition and human reasoning

Sounds like more AI training/research.

If my predictions prove correct, I'll probably cover these topics one by one, in the future. Perhaps Stalky will join me, as my knowledge is shallow in some of these areas, and he'll be able to fill in alot of the gaps.



Jeez I hate Drudge.

So I'll make a prediction now: The system in question involves automated data collection that has a volume that would overwhelm the FISC. I'm also predicting that FISA doesn't apply to the data gathering due to the definitions in § 1801. (f).

Small world networks and the NSA

Let's say you get ahold of a foreign phone number that belongs to someone that's a terrorist or a known associate of a terrorist. Of course the NSA is going to tap that phone and that wiretap will not require a warrant. But what other information can you get from that one number? You get a list of all of the numbers that are dialed out of the phone and the numbers that dial into the phone.

What if some of those numbers are in the US? The NSA is not allowed to monitor the contents of those communications without a warrant. But the NSA can monitor if those US phones call overseas. The contents of the call require a warrant, but the act of calling does not.

So why not get a warrant for each time you want to see where a US number dials an overseas number? Scope. This would be an automated system that acts in a very quick fashion. Each call to a foreign number would then peg that number as another watch number, then the process would start again. Such a system would quickly overwhelm the FISC with requests and most of the requests would, rightfully, be denied.

So what purpose does all of this to and from traffic monitoring serve? That's where the former TIA program comes in. While a huge list of cross-referenced numbers may not mean much for you or me, we are really having computers find patterns. Using the theories behind small world networks you can cull and correlate that information and begin to develop a better picture of how terrorist networks interact. The earlier post about LiveJournal is a simpler example of the scale the NSA would operate on.

Senator Rockefeller's letter to Cheney

Over at Talking Points Memo:

As I reflected on the meeting today, and the future we face, John Poindexter's TIA project sprung to mind, exacerbating my concerns regarding the direction the Administration is moving with regards to security, technology, and surveillance.

TIA you say? I have some thoughts about what the system may do and why warrants may be cumbersome.

Sallie Mae ups the ante

To drive growth, the education-lending giant is socking students with rates of up to 28%.

Ira Rheingold, executive director of the National Association of Consumer Advocates, decries Sallie's growing presence in the ugly business of collecting on defaulted debt. Pennsylvania state representative Doug Reichley alleges that Sallie is engaging in "predatory lending."

Indeed, Sallie uses high interest rates and fees to charge students as much as 28 percent annual interest on loans. As a result, some have seen their school-loan debt balloon into six-figure delinquencies that they can't hope to pay when the collection agency (which nowadays may be owned by Sallie) comes calling.

Jacking those interest rates seems like a great idea. Scumbags.

About TIA

Total Information Awareness "was" a program based out of the Information Awareness Office. The DARPA site has been pulled since the program was officially discontinued, but you can find the archived site at In one of the iterations of the site, they discuss what TIA consists of:

  • Collaboration and sharing over TCP/IP networks across agency boundaries

  • Large, distributed repositories with dynamic schemas that can be changed interactively by users

  • Foreign language machine translation and speech recognition

  • Biometric signatures of humans

  • Real time learning, pattern matching and anomalous pattern detection

  • Entity extraction from natural language text

  • Human network analysis and behavior model building engines

  • Event prediction and capability development model building engines

  • Structured argumentation and evidential reasoning

  • Story telling, change detection, and truth maintenance

  • Business rules sub-systems for access control and process management

  • Biologically inspired algorithms for agent control

  • Other aids for human cognition and human reasoning

Of specific interest in regards to the NSA leak and FISA would be "Human network analysis and behavior model building engines". Think of human network analysis as something like monitoring LiveJournal. If you were trying to model a social network, you could do so by checking a friends list. You could check the link density and comments to model how "close" of a relationship two LiveJournal users have. The human network analysis does not need to monitor the contents of the links, nor the contents of any comments between users. In order to analyze the human network, you just need to see the where and how often.

Applying the same network analysis to suspected terrorist communications, you can create a list of targets for further scrutiny. If this is what the NSA is doing, do FISA regulations really apply?

More on data mining, FISA and TIA

The idea I'm offering up is that collecting information on where a communication is to and from may not fall under FISA requirements. Looking at § 1801. Definitions

(f) "Electronic surveillance" means --
(1) the acquisition by an electronic, mechanical, or other surveillance device of the contents of any wire or radio communication sent by or intended to be received by a particular, known United States person who is in the United States, if the contents are acquired by intentionally targeting that United States person, under circumstances in which a person has a reasonable expectation of privacy and a warrant would be required for law enforcement purposes;
(2) the acquisition by an electronic, mechanical, or other surveillance device of the contents of any wire communication to or from a person in the United States, without the consent of any party thereto, if such acquisition occurs in the United States, but does not include the acquisition of those communications of computer trespassers that would be permissible under section 2511 (2)(i) of title 18;
(3) the intentional acquisition by an electronic, mechanical, or other surveillance device of the contents of any radio communication, under circumstances in which a person has a reasonable expectation of privacy and a warrant would be required for law enforcement purposes, and if both the sender and all intended recipients are located within the United States; or
(4) the installation or use of an electronic, mechanical, or other surveillance device in the United States for monitoring to acquire information, other than from a wire or radio communication, under circumstances in which a person has a reasonable expectation of privacy and a warrant would be required for law enforcement purposes.

The first three would only apply to "...the contents of..." a communication. (4) is more interesting, but the phrases "other than from a wire or radio communication" and "warrant would be required for law enforcement purposes."

Since the NSA would not be interested in the contents, the communication would be over a wire (telco) and the information would not be used for law enforcement purposes, I think there may be a loophole.


There have been rumblings on the internets that the reason FISA was bypassed was that the request process takes too long. I can think of a scenario where this actually makes sense, and President Bush’s language at the press conference this morning reinforces the idea.

TIA. Total Information Awareness was a program that was started sometime after 9/11 and headed by Admiral Poindexter. The goal was to gather all data in order to predict patterns and the like. The President said that they were still using FISA, but they also went around FISA to “detect” communications. The choice of the word “detect” puts a new spin on what may be going on.

If you are data mining for patterns that are trying to map out terrorist networks, you may not need to necessarily eavesdrop on the communication itself. What you can do is come up with some statistical probability that a series of communications fits a terrorist pattern. The President was clear to say that we need the ability to move faster than the FISA process allows. If you are mapping where the communications are going, in this instance from the US to someplace that is not the US, but you are not actually monitoring the contents of the communication, it makes no sense applying for a FISA warrant.

In fact, considering the amount of data that would need to be gathered to create something statistically significant, FISA warrants would be a hinderance due to the massive number that would need to be applied for.

Linkage after more research.


Bidding war chills U.S. plan to import natural gas

Even with natural-gas prices surging to new heights and heating bills soaring across the U.S., much of the nation's import capacity remains idle.

The nation has four onshore terminals for receiving and processing imported gas, and they are importing only about half the volume they can handle. The reason: U.S. buyers are being aggressively outbid by Europeans and Asians for the limited number of cargoes available.

The supply crunch means imports won't cool the U.S. market and natural-gas prices could stay high -- and sensitive to weather changes -- for years to come, even as the U.S. builds more terminals to handle overseas gas.

"There will be continued competition for supply, certainly through the end of the decade," says Martin Houston, president of North American operations for BG Group PLC, the largest importer of liquefied natural gas into the U.S.

First they came for your hole

And you wondered "wth is an analog hole?"

A frightening bit of legislation was introduced to the US House Judiciary Committee on Friday. The Digital Transition Content Security Act of 2005 (PDF) is sponsored by Rep. Jim Sensenbrenner (R-WI) and Rep. John Conyers (D-MI) (PDF) and would close that pesky analog hole that poses such a dire threat to the survival of the music and movie industries. The bill was originally planned for introduction in early November, but was tabled after hearings held by the House Subcomittee on Courts, the Internet, and Intellectual Property.

Calling the ability to convert analog video content to a digital format a "significant technical weakness in content protection," H.R. 4569 would require all consumer electronics video devices manufactured more than 12 months after the DTCSA is passed to be able to detect and obey a "rights signaling system" that would be used to limit how content is viewed and used. That rights signaling system would consist of two DRM technologies, Video Encoded Invisible Light (VEIL) and Content Generation Management System—Analog (CGMS-A), which would be embedded in broadcasts and other analog video content.

Under the legislation, all devices sold in the US would fall under the auspices of the DTCSA: it would be illegal to "manufacture, import, offer to the public, provide or otherwise traffic" in such products. It's a dream-come-true for Hollywood, and in combination with a new broadcast flag legislation (not yet introduced) would strike a near-fatal blow to the long-established right of Fair Use.

An important documentary

Sunday, December 18, 2005

More secrecy is a Good Thing™

In light of the recent revelations about the danger of Quakers and the need for warrantless wiretaps, this is interesting:

Suit Decries New Secrecy in Government

Breaking a tradition of openness that began in 1816, the Bush administration has without explanation withheld the names and work locations of about 900,000 of its civilian workers, according to a lawsuit filed Tuesday.

``Citizens have a right to know who is working for the government,'' said Adina Rosenbaum, attorney for the co-directors of the Transactional Records Access Clearinghouse, a research group at Syracuse University, who sued under the Freedom of Information act to get the data.

Since 1989, TRAC has been posting on the Internet a database with the name, work location, salary and job category of all 2.7 million federal civilian workers except those in some law enforcement agencies. The data are often used by reporters and government watchdog groups to monitor policies and detect waste or abuse.

Idiotic nanny state posturing

Courts Lift Curbs On Kids Buying Violent Games

The legislation, unveiled at a press conference by Democratic senators Hillary Rodham Clinton of New York, Joe Lieberman of Connecticut and Evan Bayh of Indiana, would essentially codify the industry's current voluntary rating system. It assigns games letters from "EC," meaning appropriate for early childhood, to "AO" for "adults only." Retailers who sell games rated "mature," "adults only" or "ratings pending" to children under 17 could face fines of $5,000 per violation.

Saturday, December 17, 2005

Bad news

U.S. Trade Deficit Reaches All-Time High

WASHINGTON - A surge in oil imports and a flood of Chinese televisions, toys and computers helped to drive the U.S. trade deficit to an all-time high in October.

The Commerce Department reported Wednesday that the gap between what America sells overseas and what it imports rose by 4.4 percent to $68.9 billion, surpassing the record of $66 billion set in September.

The United States incurred record deficits in October with most of its major trading partners including China, the 25-nation
European Union, Canada and Mexico. This development is certain to increase protectionist pressures in Congress, with many lawmakers already unhappy with the Bush administration's trade policies.

Friday, December 16, 2005

Good news!


WASHINGTON - America's deficit in the broadest measure of international trade showed a slight improvement in the July-September quarter although it was still at the third highest level in history.

The Commerce Department reported that the deficit in the U.S. current account totaled $195.8 billion in the third quarter. That was down 1 percent from the deficit in the April-June quarter of $197.8 billion, which had been a 0.4 percent improvement from the record deficit of $198.7 billion set in the first three months of the year.

The third quarter figure was below the $205 billion imbalance that had been forecast. Analysts said payments by foreign insurance firms to settle damage claims stemming from hurricanes Katrina and Rita accounted for most of the improvement.

Fun coin site

Tuesday, December 13, 2005

Around the world, around the world

'Dangerous' level of debt used to fund acquisitions

FEARS that the private equity bubble could burst heightened yesterday after 95 per cent of the industry’s key practitioners gave warning that the amount of debt being used to finance leveraged buyouts had reached “dangerous and unsustainable levels”.

The warning, contained in a Financial News survey, is the most stark signal yet that private equity firms have borrowed too heavily to finance acquisitions in the past 18 months. Jon Moulton, the founder of Alchemy Partners, said: “If there is any kind of a downward turn in the economy we will see a spectacular level of failure. The debt levels are without precedent.

The Rainwater Prophecy

Stock up on your tinfoil!

The next blowup, however, looms so large that it scares and confuses him. For the past few months he's been holed up in hard-core research mode—reading books, academic studies, and, yes, blogs. Every morning he rises before dawn at one of his houses in Texas or South Carolina or California (he actually owns a piece of Pebble Beach Resorts) and spends four or five hours reading sites like or, obsessively following links and sifting through data. How worried is he? He has some $500 million of his $2.5 billion fortune in cash, more than ever before. "I'm long oil and I'm liquid," he says. "I've put myself in a position that if the end of the world came tomorrow I'd kind of be prepared." He's also ready to move fast if he spots an opening.

Monday, December 12, 2005

This has potential...

Dangerous potential, but potential nonetheless.

Saturday, December 10, 2005

Shell Lacks Oil Sources

Dec. 10 (Bloomberg)

Royal Dutch Shell Plc isn't succeeding in finding enough new sources of oil, according to Robin Batchelor, a fund manager at Merrill Lynch & Co., De Telegraaf newspaper reported.

Batchelor, who heads the $3.7 billion World Energy Fund, sold all of his shares in Shell last year after the company overstated its oil reserves, the newspaper said.

The Coming Bernanke Bust

The incoming Fed chairman is going to suffer a housing slump and a recession.

The place not to be: those now-hot foreign stocks.
Federal reserve chairman Alan Greenspan leaves the job on Jan. 31 with godlike status. His adoring fans call him the Maestro. Even the normally staid British got swept up in the Greenspan worship and gave him an honorary knighthood. Succeeding such an acclaimed figure would be tough for any mere mortal. For the next chairman, Ben S. Bernanke, it will be especially hard, since Bernanke lacks many of Greenspan's advantages.

Greenspan is a master politician, while Bernanke has a lot to learn about surviving and thriving in the Washington jungle. Greenspan stayed on for so long because he skillfully avoided fights with Congress and the White House. His public statements are masterpieces of obfuscation; he can't be pinned down. His ad hoc approach to monetary policy is indefinable, allowing him to foster the notion he is clairvoyant. He sagely refuses to name an inflation target, thus giving himself wide leeway when statistics jump around.

Bernanke, though certainly smart, has served only three years as a Fed governor and six months as President Bush's chief economist. The academic politics he faced as chairman of Princeton's economics department pales before the challenges he will encounter as Fed boss. What evidence has emerged from his brief time on the national scene is revealing. In a jarring November 2002 speech he suggested that the Fed could drop money out of helicopters to stop deflation. That comment has now created news coverage that no central banker wants.

Come on helicopter Ben. Show us what you've got.

Friday, December 09, 2005

It ain't UPS

But from time to time, some big players may actually buy or deliver physical gold at a COMEX warehouse. Something surprising has been happening recently: long speculators are taking delivery in much larger numbers than in the past. Warehouse supplies of gold bullion are still large, but deliveries show a different character of the investors.

Not sure what to make of it, but there it is.

Thursday, December 08, 2005

Funds Blowing Foreign Bubbles?

From WaPo:

"I worry that there's this perfect storm coming for emerging markets," said Kristin J. Forbes, a Massachusetts Institute of Technology economics professor who served until early this year on President Bush's Council of Economic Advisers.
"You remember what happened after 1996," Rhodes said. "We had 1997. We had 1998. We had the default by Russia, and we had Long-Term Capital Management" -- a Connecticut hedge fund whose collapse in 1998 triggered a nosedive in U.S. stock and bond markets.

Peak debt?


U.S. consumer credit unexpectedly slid by a record $7.20 billion in October, on a big drop in loans taken for cars and boats, a Federal Reserve report showed on Wednesday.

The central bank said total consumer debt outstanding fell 4 percent to a seasonally adjusted $2.157 trillion from a revised $2.164 trillion in September. The rate of decline was the steepest since December 1990, and the dollar drop was the largest fall on record, the Fed told reporters.

Wall Street analysts polled by Reuters had expected a rise of $5.0 billion in consumer credit in October.

Wednesday, December 07, 2005

Oh the weather outside is frightful

The fire would be delightful, but...

An energy consultant warned Tuesday that "sudden extremely cold weather" could cause power outages in New England this winter.
"In the event of really cold weather, gas supplies to power generators could be curtailed if the available gas is redirected to meet residential heating load or if higher prices bid gas away from power generation uses," CERA said in a news release.


Tuesday, December 06, 2005

That sound you are about to hear is "POP!"

In the U.S. bond market, the housing bubble has burst.

Bonds backed by home loans to the riskiest borrowers, the fastest growing part of the $7.6 trillion mortgage market, have lost about 2.5 percent since September on concern an 18-month rise in interest rates may force more than 150,000 consumers to default.

``We've been hearing about risks of a house price bubble, easy credit and loans to borrowers that really don't qualify, and now in the last couple of months we're starting to see things turn for the worse,'' said Joseph Auth, a bond fund manager who helps oversee $135 billion at Standish Mellon Asset Management in Boston. ``We don't know if it's going to be a hard or soft landing.''

Next year roughly one trillion dollars of ARM mortgages are going to rollover. People have been using their homes as ATM machines for the last few years thanks to the enormous real estate appreciation. Equity? Savings? What are those? Easy credit has been the two dollar whore putting out a dollar day special for the US economy. Considering real estate assets have reached 150% of GDP, maybe it's a good time to buy!

Iraq is seeking a nuke, natch, s/q/n/

Iran is building a second nuclear power plant and that is causing some fears about their nuclear ambitions. Israel has given Iran until the end of March to stop their nuclear weapons program:

"If by the end of March 2006 the international community will have failed to halt Iran's nuclear-weapons program, diplomatic efforts will be pointless,"

Now Russia has complicated this Cold War Jr. standoff by selling Iran $1 billion in advanced weapon systems, namely the TOR M-1 SAMs.

Sitting quietly in the background is the announcement that Iran's oil bourse will trade in Euros instead of Dollars. When will the oil bourse come online? In March of course.

2005 Weblog Awards

The 2005 Weblog Awards are now in the voting stage and somehow neither Ninjas, Robots, nor Monkeys were nominated. This has made one Ninja Robot Monkey in particular slightly perturbed (yes, this blog was just started today, however they could have done a pre-emptive nomination in anticipation).

Due to this slight I will offer up a suggestion to the Weblog Awards for next year. Don't use a client side md5 hash and Flash SOs for your security. Ninja magic could thwart them at any time.

Frist Post!

Record consumer debt combined with record low savings. In the immortal words of Guns N Roses, "Where do we go now?"