Thursday, October 1, 2009
印尼‧蘇島7.9級強震‧摧毀建築物引發火警
（印尼‧雅加達）印尼蘇門答臘週三（9月30日）下午發生里氏7.9級強烈地震，摧毀巴東許多建築物，並在多處引發火警。
印尼地質及氣象局主任拉末說：“巴東一些酒店也被摧毀。”他說：“通訊已被切斷。”
地震發生在當天下午5時16分（大馬時間6時16分），震央位於西蘇門答臘省首府巴東市西北方53公里處，約87公里深的海底，當局最初將震度列為里氏7.6級，後調升至7.9級。
儘管印尼當局沒有即時發佈海嘯警報，但太平洋海嘯預警中心隨後卻向印尼、大馬、泰國及印度4國發佈了海嘯警報，不過，2個小時後，此中心宣佈解除海嘯警報。
地震發生後，不但印尼首都雅加達感覺到一陣天搖地撼，連遠在數百公里外的大馬和新加坡，許多待在高樓大廈內的人，也感覺到震動和搖晃。
新加坡一些高樓的居民表示，他們感到震動足足維持了2至3分鐘。
震央巴東市建築物橋樑倒塌
震央巴東市有數百間房屋和橋樑在地震中倒塌，包括高樓和酒店，並在多處引發火警，驚慌失措的民眾紛紛從住家和建築物逃到街上或空曠處避難。
印尼地質局技術主任蘇哈祖諾說，巴東一些酒店如Minang酒店也倒塌，但這些消息仍需證實。
路透社引述目擊者稱：“沿路可以看到數百間房屋嚴重損毀，一些地方發生火災，橋樑中斷，人們極度恐慌，可能是因為有水管爆裂，街上到處都有淹水。”
巴東市民在接受當地電視台訪問時，心有餘悸地說：“人們十分恐慌，他們紛紛跑出建築物……有很多建築物都倒塌了。”當地電話線也已經中斷。
地質專家之前曾多次警告，擁有90萬人口巴東，位處地震和火山爆發頻密的太平洋地震帶上，終有一日會毀於一場地震。
2004年，距離巴東市西北方約600公里外的海底發生里氏9.15級地震後，引發世紀大海嘯，橫掃印度洋，在12個國家奪走逾23萬條人命。
外交部：印尼地震
沒接大馬人傷亡報告
另一方面，大馬外交部發言人指出，截至週三（9月30日）晚9時30分，當局沒在印尼發生的地震中，接獲任何大馬人的傷亡報告。
他說，外交部正和大馬駐印尼北干峇魯及棉蘭領事館保持緊密聯繫，監督大馬人在災區的情況。
中國‧無人命傷亡‧四川9月地震16次
（中國‧四川）在去年發生嚴重大地震的中國四川省，在9月總共發生了16次震級在3級以上的地震，當中最大地震為5.1級。
四川省地震局週三（9月30日）發佈了9月全省地震信息。這些地震均未造成人命傷亡和財產損失。
英國《自然‧地球科學》雜志上報告說，通過份析衛星大地測量數據，發現去年汶川大地震的能量釋放主要來自3個斷層破裂極大區，相關地區再發生類似大地震的週期約為4000年。
印尼‧雅城機場柜位遭襲擊
（印尼‧雅加達）印尼首都雅加達國際機場週三（9月30日）發生鎗擊事件。一班持鎗男子襲擊機場內一航空公司柜位，促使機場保安開鎗還擊，暫時未知事件中是否有人死傷。
蘇卡諾國際機場運作負責人塔霍馬表向路透社表示：“我掌握的情報顯示，有3輛汽車駛至機場，一班乘客從車裡跳出，進入機場襲擊室利佛逝航空公司（Sriwijaya Air）柜位後逃走”。
塔霍馬指出：“機場保安見狀，馬上上前追截，警告他們棄械投降，但他們並未就範，登車逃走，警員遂向3輛汽車開火。”警方未就襲擊以及事件傷亡人數發表進一步詳情。襲擊動機暫不詳。
美國‧和美女聊天‧男人更健康
（美國‧華盛頓）如果你的丈夫或男友喜歡跟美女聊天，為了他的健康，請不要阻止。
最新研究發現，和美女聊天互動，可提高2項男性賀爾蒙分泌，有益健康。
美國加州大學對149名年齡在18歲到24歲男學生進行研究，其中三分之一參與者與男性研究人員互動，其它則安排與18歲到22歲的女大學生互動。
研究人員對參與者進行唾液採樣，發現和女學生交談的男同學，睪酮（testosterone） 分泌量提高14%，而有抗壓功能的賀爾蒙可體松（cortisol）則激增48%。相對之下，和男研究員聊天的人，睪酮和可體松分泌量分別減少2%和7 %。負責這項研究的羅尼博士說，研究顯示，和女性交談提高了男性分泌睪酮和可體松，可以緩和緊張情緒，健康效果佳。
新加坡‧風水師：1天3起大災難‧9月30日大兇特兇
（新加坡）有風水師指出，週三（9月30日）的日子大兇特兇，一天內，有海嘯、有地震、有颱風。
週三一天內，接連發生了至少3起大災難，包括印尼蘇門答臘發生里氏7.6級大地震，罹難人數超過千人、南太平洋薩摩亞群島發生8級強烈地震並引發大海嘯，上百人可能已經不幸遇難，以及颱風“凱薩娜”在越南和柬埔寨分別造成74人和11人喪命。
“解神”極具破壞性
風水命理師魏錦文受訪時就表示，從黃歷看，週三的星宿之一是“解神”，而這個星宿極具破壞性，有“解除神明力量”的含義。
“這個星宿的出現，使得其他星宿神明失去凝聚的力量，天災也比較容易發生。”
魏錦文也指出，從科學的角度來看，這一切天災和地心吸力、地球運轉的氣流有關，但古代人迷信認為，在“解神”出現的那一天，因為神明失去了力量，促使煞星增加力量，沒辦法保護他們，所以才會出現天災人禍。
風水命理師陳軍榮說，2009年是“地牛翻身”年，容易出現地震，而這樣的年份每3年就會出現1次。
“2000年、2003年和2006年都屬於這樣的年份，因此容易出現地震。”
不過，陳軍榮認為，今年的情況會更加嚴重，因為今年是“雙土年”。
他解釋，“地牛翻身”中的牛，五行屬“土”，而今日的天干又是“己土”，因此出現“雙土”現象，容易發生地震。
10月情況料更嚴重
他指出，這次的地震只是一個前奏，預料10月的情況會更嚴重。
“農歷9月是‘虎´月，一般上比較會發生地震。”
風水命理師洪維良認為，若從九星運行來看，這個農歷8月，“二黑兇星”飛到南方，因此，天災會發生在南邊。
巧的是，地震就發生在蘇門答臘島，即印尼的西邊，而蘇門答臘島也正在新加坡的西邊。
法國‧大地震影響地球另一端‧震帶變弱‧地震更頻密
（法國‧巴黎）美國加利福尼亞州科學家週三（9月30日）表示，大地震可以使地球另一端的地震帶變弱，使地震更輕易發生。
以平貴昭為首的加州大學地震學家發現，蘇門答臘島西部2004年12月發生的9.1級大地震，使8000公里外加州的聖安德烈亞斯地震帶變弱了。
他們是根據加州帕克菲爾德區22年的資料進行研究。這個地區滿佈井下地震儀等其他測量儀器，被喻為“世上地震首都”。
監視人發現，含液体裂縫區位於這個斷層帶。
他們認為，在地震的壓力下，液體在大理岩層中如斷層帶般的眾多裂縫中流動，並充當潤滑劑，讓震動得以撬開岩石。
他們發現，在液體流動期間，震動將益發軟弱，換句話說，在斷層帶變弱後，無需太大動力也能形成地震，並證明了上述論據。
加州蘭德斯鎮附近1992年的7.3級地震，以及2004年的蘇門答臘大地震，這兩次發生在地球兩端的大地震引起的意外影響，尤其讓研究員有非凡發現。
在蘇門案臘大地震過後近5天，測量儀測到帕克菲爾德區地底5公里處出現動應力。
研究結果刊登在《天然》科學期刊，提供了讓人信服的理由，支持一部小說的論調：大地震可以在其他地方引起串聯效應，效應有時會在數個月後才出現。
中國‧胡錦濤：為世界貢獻‧中國人有信心建設國家
（中國‧北京）中國國家主席胡錦濤說，中國人民有信心、有能力建設好自己的國家，也有信心、有能力為世界作出自己應有的貢獻。
他今日（週四，10月1日）在天安門廣場舉行的慶祝新中國成立60週年大會上發表講話時表示：“全國各族人民週四都會對中國60年來的發展感到無比自豪，對國家富強充滿信心。”
巾幗不讓須眉，英姿颯爽的中國“娘子軍”在國慶60週年的閱兵儀式出場，成為了矚目的焦點。（圖：法新社）
他補充，60年前今天，新中國成立後，中國人民從此站起來，60年來，經歷全國人民同心同德，艱難奮鬥，中國將面向現代化，面向世界，巍然屹立在世界東方。
他強調，新中國60年的發展進步充份證明，只有社會主義才能救中國，只有改革開放才能發展中國、發展社會主義、發展馬克思主義。
他表示，中國將堅定不移堅持中國特色社會主義道路，全面貫徹執行中共黨的基本理論、路線、綱領和經驗，同時繼續解放思想，堅持改革開放等。
推動兩岸和平發展
在兩岸關係方面，胡錦濤表示，中國將推動海峽兩岸關係“和平”發展，繼續為實現祖國完全統一這一中華民族的共同心願而奮鬥。
他說：“我們將堅定不移堅持‘和平統一、一國兩制´的方針，保持香港、澳門長期繁榮穩定。”
他表示，中國將堅定不移堅持獨立自主的和平外交政策，堅持和平發展道路，奉行互利共贏的開放戰略，在和平共處5項原則基礎上同所有國家發展友好合作。
曾蔭權國慶典禮上拍照
香港行政長官曾蔭權週三（9月30日）早上在城樓上觀看國慶閱兵和群眾遊行，並手持相機，拍攝慶典的情況。
曾蔭權在典禮完畢後，與澳門行政長官何厚鏵觀看完國慶慶典之後返回入住的酒店，曾蔭權返回酒店時面露笑容，但沒有回答記者的問題，入酒店時仍手持配備了長鏡的相機。
筵開500席國宴四菜一湯
人民大會堂週三晚舉行新中國建國60週年的國宴，筵開近500席，宴請國內嘉賓，場面盛大。但國宴並沒有九大簋，只是簡單四菜一湯：干貝銀絲湯、清炒蝦球、醬燒小牛排、茭白鮮蔬、檸香銀鱈魚、揚州炒飯，席上還配有冷盤、月餅等點心及粉紅的大蟠桃，樸素中盡見雅致。
在果盤方面，更是別出心裁地選用6個蟠桃，寓意向祖國獻壽。
據首次國宴服務工作總負責人，有“開國第一宴”宴會設計師之譽的鄭連福透露，1949年的“開國第一宴”是淮揚菜餚當家。
採“人海戰術”
140萬人維安創紀錄
中國週四在空前嚴密保安下在天安門廣場舉行國慶60週年慶祝大會，向世界展示強盛國力。
官方消息稱，週三出動的公安、武警、保安和治安義工多達140萬人，較國慶50週年的保安人數多一倍，比去年京奧時亦多，以“人海戰術”保障首都安全。
消息人士透露，全國各地國慶活動的總投資亦超過北京奧運會，藉以顯示大國盛世的非凡氣象，其慶典規格、設計水平、演出規模及參閱武器等，皆創下60年之最。
據瞭解，這次安保的“人海戰術”創下了歷史紀錄，除了公安、武警等專業保安人員外，紅袖章、紅帽子等治安人員全部上街，奧運會期間北京市的“一條街、一片紅”場景再次出現。
三軍女兵方隊最靚麗
皮膚被驕陽曬得黝黑、褪去了往日的嬌貴身姿，風吹雨淋都能站得正、走得穩，她們沒有把自己定義為“花木蘭”的角色，但一定要像男人那樣去戰鬥。三軍女兵方隊成了一道最靚麗的風景線。
三軍女兵方隊由總後勤部第4軍醫大學白求恩軍醫學院負責抽組由陸軍、海軍、空軍和第二炮兵部隊組成。
90%的幹部執行過1999年國慶閱兵、小湯山抗擊沙斯、赴川抗震救災等重大軍事任務，3位中隊長全部為1999年閱兵隊員，隊員最高學歷博士生，平均年齡22歲，平均身高169公分。
把女兵當做男人訓練
三軍女兵方隊政委於維國說，把這些女兵們當做男人訓練，一點都不誇張。“長時間封閉式訓練，讓追求時尚的女兵們沒有了同齡人花前月下的浪漫，沒有了時尚新潮的著裝，更沒有了撒嬌受寵的待遇，有的只是單調重複的隊列訓練。女兵隊員，在訓練中練隊列、練作風、練意志，訓練場堅硬的水泥地上，被她們踩出了一條條筆直的‘斑馬線´。”
三軍女兵方隊不僅是世界近代閱兵史上最大的徒步方隊，而且是徒手方隊，訓練難度比劈鎗、掛鎗方隊大了許多，為此付出了常人難以想像的艱辛。
慶典聚焦：亮點頻出
締造許多“第一次”
新中國60週年國慶大典中，從空中到地上，從武器到彩車，從台前到幕後，亮點頻出，頗具新意，湧現諸多“第一次”。當中最具特色、最受關注的當屬以下各項。
胡錦濤畫像第一次出現在天安門
中國國家主席胡錦濤的巨幅畫像首次出現在天安門廣場。在《江山》的背景音樂中，“為奪取全面建設小康社會新勝利，譜寫人民美好生活新篇章而努力奮鬥！”的聲音再度響起。毛澤東、鄧小平和江澤民等3位領導人的畫像同時出現在遊行隊伍中。
三軍女兵第一次混編受閱
陸海空三軍女兵在今年的閱兵式首次“勝利會師”，成為新中國閱兵史上除儀仗隊之外第二個以三軍形式受閱的方隊。
這些英姿颯爽的女兵們還創下世界近代閱兵史徒步方隊人數之最——總人數達378人，比其他徒步方隊多一個排面和一個領隊。
第二炮兵第一次組成徒步方隊
除了在裝備方隊壓軸出場外，第二炮兵今年還首次組成了徒步方隊受閱。
第二炮兵是中國戰略威懾的核心力量，被稱為共和國“掌劍人”。今次參閱的第二炮兵學員方隊由“80後”、“90後”的新生代組成，全部具有專科以上學歷，超過60%具有本科以上學歷，當中還有23名碩士研究生。
武警第一次帶裝受閱
武警今年首次組織裝備方隊參閱。
18輛白色的08式武警裝備車在受閱方陣中相當醒目。該方隊由武警北京總隊特戰大隊編成，胡錦濤在2007年將其命名為“雪豹突擊隊”。
“雪豹突擊隊”是中國處突、反恐、維穩的突擊力量，在奧運安保等重大行動中都曾出現他們的身影。
坦克方隊第一次“變形”
第一個受閱的坦克方隊，一改以往閱兵時的隊形，以“箭形”全新亮相——第一排一輛，第二排兩輛，第3排三輛，第4排至第6排各四輛。
這是中國歷次國慶閱兵車輛方隊的首創隊形。軍方稱，此隊形寓意解放軍是“打贏之箭、勝利之箭”。
後勤裝備第一次亮相天安門
首次受閱的後勤裝備方隊由野戰手術車、主食加工車、進水車、加油站車、重型站台車等編成，代表了中國後勤裝備建設最新成果。
如野戰主食車能在一個小時內完成800人份的主副食加工；新型手術車安裝了遠程衛星系統，可在數千公里外進行遠程專家視頻會診。通信兵、機動雷達等方陣今年也首次參閱。
外國人第一次參加國慶遊行
外國人參加國慶群眾遊行在新中國歷史上尚屬首次。
“同一個世界”方陣中的100多名外國人共同為中國慶生。這些外國人均是自願報名，當中既有留學生、外企代表，也有在華專家學者等，年齡最大的逾七旬，最小的不過六歲。
第一次使用新能源汽車
新能源汽車的加盟，凸顯了本次慶典的“綠色”特徵。電動車和混合動力車等新能源車輛的運用，成為本次彩車遊行最大亮點之一。
國徽彩車便是在電動車平台上搭建而成，而體現生態環保主題等的多部彩車則是混合動力車。在低碳經濟時代，中國國慶大典也緊跟時代步伐。
第一次用“飛貓”實況轉播
在此次慶典電視直播中，首次採用“飛貓”系統（高空懸掛滑軌攝像機）、直升機航拍、高清設備等多種先進拍攝轉播技術，令慶典的“大景”“小事”一覽無餘。首次高清直播則更使電視機前的民眾有了身臨其境之感。
第一次實現現場聯合指揮
為了近20萬群眾“定時定點”集結和疏散，慶典指揮部門首次實現了現場聯合指揮。他們將組織系統、指揮系統、技術系統和應急系統整合在一個專門的平台上，每輛運輸車和遊行隊伍的骨幹人員都裝上GPS衛星定位系統。
指揮人員通過平台對所有人和物都“瞭如指掌”，可隨時發號施令。
四代領導人建政慶典比一比
毛澤東（1893年－1976年）
開國大典：1/10/1949
特點：中共初奪大陸，戰亂未平，慶典較簡樸，僅閱兵，無聯歡活動；30萬人參加。
閱兵特色：毛澤東只在天安門城樓上閱兵；受閱軍人2萬4200人，主要為陸軍，武器多繳自國民黨軍；17架戰機中部份戰機帶彈升空，為防國民黨軍突然空襲。
鄧小平（1904年－1997年）
建政35週年：1/10/1984
特點：經歷多次政治動亂後，重返政壇的鄧小平進行改革開放後的首次慶典閱兵；大學生在巡遊時自發打出“小平你好”，而成為經典；50多萬人參與。
閱兵特色：鄧小平乘敞篷紅旗車檢閱部隊；受閱軍人1萬370人；為時56分鐘；海陸空各兵種齊全，受閱武器裝備全部國產化，戰略導彈首度曝光。
江澤民（1926年－）
建政50週年：1/10/1999
特點：正在國際舞台上冒起的中國，耗資逾千億元人民幣大搞慶典；91輛花車參加巡遊；逾30多萬人參與。
閱兵特色：江澤民閱兵；受閱軍人1萬1000人；為時60分鐘；參閱軍兵種最齊全，17個徒步方隊，25個車輛隊，10個空中梯隊共24架戰機受閱；被喻為中共軍隊史上現代化程度最高的慶典閱兵。
胡錦濤（1942年－）
建政60週年：1/10/2009
特點：自喻為盛世中的慶典，但為保慶典安全反恐防襲，搞到草木皆兵，緊張氣氛前所未見；20萬人參加。
閱兵特色：胡錦濤閱兵；受閱軍人8000人；為時66分鐘；參閱裝備全部國產最先進，共14個徒步方隊、30個裝備方隊和12個空中梯隊152架戰機，其中有90%武器首次曝光。
Sumatra quake: Indonesia seeks help from Malaysia, others
JAKARTA: Indonesian President Susilo Bambang Yudhoyono welcomes Malaysia and other countries to help provide emergency aid to victims of the 7.6 magnitude earthquake which hit the western Sumatra province yesterday.
He hoped that in the spirit of Asean cooperation, the neighbouring countries could provide immediate aid to areas affected by the disaster.
He said this on arrival at the Halim Perdanakusumah Airport here on his return from a working visit to the United States of America and meeting with his cabinet ministers.
A report by detikcom quoted Susilo as saying that Indonesia appreciated the offer of assistance from neighbouring countries.
He said when an earthquake of 7.2 on the Richter scale hit West Java last month, the Indonesia government rejected foreign assistance because the incident was not serious.
Meanwhile, National Defence Forces (TNI) Chief Gen Joko Santoso said several countries had offered to send their soldiers to help find victims still trapped in the rubble.
The armed forces in Malaysia, Australia, Singapore and America had offered assistance for evacuation process, he added.
Meanwhile, the death toll in the earthquake has yet to be ascertained with reports giving the figures at 215 to almost 500 people as at noon today while the search and rescue mission is still in progress.
The Indonesia government, however, estimated the death toll to be in thousands as many of the victims were still trapped under the rubble of more than 1,000 buildings, including hotels and houses, which were damaged in the incident.
As at noon today, the local authority estimated more than 100 people to be still trapped in Hotel Ambacang, when the building collapsed, and more than 60 students, in a three-storey building which housed their tuition classes.
Information released by the disaster centre at the west Sumatra governor's office confirmed 215 people were killed in three locations worst hit by the quake -- Kota Padang (139), Padang Pariaman (62) and Kota Pariaman (14).
This morning, several tremors of between 5.1 and 7.0 on the Richter scale in several location in Sumatra.
The Indonesian authority has declared an emergency in the western Sumatra province and various assistance, include medicine, food and beverages, had been sent to the area. - Bernama
State Tax Revenues Plummet 17%
Wall Street Journal, Falling Tax Revenues Slam States, by Conor Dougherty:
State tax revenues in the second quarter plunged 17% from a year earlier as rising unemployment and reduced spending hurt sales- and income-tax collections, according to Census Bureau figures released Tuesday.
The decline was the sharpest since at least the 1960s. The biggest drop among major revenue sources was in state income taxes, which were down 28% from a year ago. Sales-tax revenues fell 9%. About two-thirds of state revenues are derived from sales and income taxes. The numbers aren't adjusted for inflation or changes in tax rates. ...
States across the country saw big declines in personal income taxes, the largest single source of state funding, representing about a third of states' overall revenues. Eleven states -- including California, New York and Wisconsin -- saw personal income taxes fall more than 30%.
Option ARMs in Financial Pain: 900,000 Mortgages and 1 out of 4 either Seriously Delinquent or in Foreclosure. OCC and OTS Report Shows Foreclosures S
It is interesting to see new data being published regarding Option ARMs in the new OCC and OTS report. According to the recently released report, there were 900,000 active Payment Option ARMs in the United States. What is troubling about the current report is the performance of these loans. Many of these loans are located in the depressed states of California and Florida that have dealt with record breaking budget problems. These loans have the potential to once again destabilize the housing markets in these regions.
What is interesting to note about this report is that 1 out of 4 of the option ARMs are either in foreclosure or in serious delinquency. The vast majority of these loans will not hit recast dates until 2010 yet the performance of these loans is already disastrous. The difference between a recast and a reset is that a recast is a change in payment irrespective of a low interest rate. Let us first look at their geographic location:
For the most part this mortgage problem will hit certain regions disproportionately. 75 percent of these loans are located in California, Florida, Nevada, and Arizona. The data reported in the OCC and OTS report out on Wednesday falls in line with data provided by Fitch last month:
These loans are going bad and the problem with these loans is they do not qualify (in most cases) for the HAMP program for modifications. The debt-to-income levels are too high and many of these loans are severely underwater. What the data at times fails to acknowledge is the fact that many of these loans were piggybacked with second mortgages of equal repute. For example, someone may have gotten an 80% loan-to-value option ARM but on top of that, took a 10 year ARM second mortgage to cover the other 20%. This was extremely common during the bubble in California.
So let us look at this new option ARM data, the first time ever reported in the OCC and OTS data:
Let us examine the above. In one year, you have seem problems for these loans double. In June of 2008 6% of option ARMs were seriously delinquent and 4.5% were in foreclosure. In June of 2009 15.2% of these loans are seriously delinquent and 10% are in some form of foreclosure. Keep in mind that the vast majority of these loans don’t hit recast dates until 2010 to 2012! That is, the inherent structural problems of these loans are still part of the future terms and these problems are occurring more because homeowners over stretched. Add in recasts and you have a recipe for further disaster.
What can we take from the above data? That the vast majority of these option ARMs will become foreclosures. This will further depress housing prices in states like California. It is an interesting mix as well. Many of these option ARMs were made to so-called prime borrowers:
“New to this report are performance data on Payment Option ARMs. Although Payment Option ARMs were made to prime borrowers in nearly the same percentage as the overall portfolio (64% versus 68% overall), the added risk characteristics and geographical concentration of these loans cause them to perform significantly worse than the overall portfolio.”
Now isn’t that something? In terms of the proportion of prime borrowers, there isn’t much of a difference in terms of credit score but the overall risk is vastly different. That is why we have seen the rise of the strategic default where homeowners who can make their payment purposely stop paying on their home.
Option ARMs fall under the Alt-A category. Let us look at how loans are performing in the current market:
Every type of loan category is seeing delinquencies rise. Why? This is on top of loan modifications and trillions backing the banking system. The problem as we all know is that a loan modification has little significance if someone is dealing with job loss and rampant unemployment. We are focusing on the wrong things. Instead of looking at loan modifications and other programs that are failing miserably, we should spend the same considerable time examining new sectors of employment for the average American. Yet the tunnel vision focus on helping mortgages is based on the reality that the banking sector relies on this as their cash flow stream. They don’t care how the average American pays their mortgage or even if they have the job. They don’t mind getting taxpayer bailouts or handouts as long as they get paid.
The option ARM is a toxic pariah on the system. These loans never had any right of being in the market. What we need to do is institute claw backs where those who made profits on this criminal product should have all their funds confiscated and property taken back. It is funny how those on Wall Street raise their right hand and say, “I promise never to do that again” and get away with a decade of fraud. This is like a bank robber being allowed to keep his stolen money after promising he will never be able to do it again. We need to gut the system and claw back what was got in a criminal way. Look at what is happening with Bernard Madoff. What is not being said is how many people actually made money with his scheme. Those early in the game made billions. Lawyers are now going to claw back those gains. We should apply the same to the banking and Wall Street sectors. The fact that we have no strong movement on this front is troubling but also tells you who is running the show.
US relaxes grip on the internet
The US government has relaxed its control over how the internet is run.
It has signed a four-page "affirmation of commitments" with the net regulator Icann, giving the body autonomy for the first time.
Previous agreements gave the US close oversight of Icann - drawing criticism from other countries and groups.
The new agreement comes into effect on 1 October, exactly 40 years since the first two computers were connected on the prototype of the net.
"It's a beautifully historic day," Rod Beckstrom, Icann's head, told BBC News.
The European Commission, which has long been critical of Icann's alliance with the US government, welcomed the new deal.
"Internet users worldwide can now anticipate that Icann's decisions...will be more independent and more accountable, taking into account everyone's interests," said Viviane Reding, European Commissioner for information society and media.
'Global system'
The Internet Corporation for Assigned Names and Numbers (Icann) is a not-for-profit private sector corporation - set up by the US government - to oversee critical parts of the internet, such as the top-level domain (TLD) name system. Top level domains include .com and .uk.
Since its inception in 1998, it has periodically signed accords - known collectively as the Joint Project Agreement (JPA) - with the US Commerce Department's National Telecommunications and Information Administration.
These papers meant that the US government was responsible for reviewing the work of the body.
These have now been abandoned in favour of the new "affirmation of commitments", a brief document which turns the review process over to the global "internet community".
"Under the JPA, Icann staff would conduct reviews and hand them over to the US government," explained Mr Beckstrom.
"Now we submit those reviews to the world and post them publically for all to comment."
In addition, independent review panels - including representatives of foreign governments - would specifically oversee Icann's work in three specific areas: security, competition and accountability.
The US will retain a permanent seat on the accountability panel.
Mr Beckstrom said the decision to break away from the US government in all other areas had been made "over the last year and a half".
"Stakeholders told us that the JPA should not be renewed and that it wasn't appropriate for it to be renewed," he told BBC News.
"It is also recognition by the US government that the internet is a global system."
The internet began as a research project by the US military, known as Arpanet.
On 1 October 1969, the second computer was connected to the network, said Mr Beckstrom. Ever since, the US has paid close attention to the workings and growth of the net.
"Today's announcement bolsters the long-term viability of the internet as a force for innovation, economic growth, and freedom of expression," said US Assistant Secretary for communications and information Lawrence Strickling.
"This framework puts the public interest front and centre."
Businesses have also welcomed the change of direction by the US.
"Google and its users depend every day on a vibrant and expanding internet; we endorse this affirmation and applaud the maturing of Icann's role in the provision of internet stability," said Eric Schmidt, CEO of Google.
However, the new agreement does not totally sever the links between the US government and Icann entirely.
In addition, Icann also has a separate agreement with the US - to run the Internet Assigned Numbers Authority (IANA) - that expires in 2011.
The IANA oversees the net's addressing system.
Technology reporter, BBC News
Media Pundits Back Away From 9/11 Debate With Sheen
Initial interest waned after Sheen insisted discussion must be moderated fairly
Charlie Sheen’s challenge to media pundits to debate him on the issues brought up in his “20 Minutes With The President” letter has not been met after several news outlets expressed interest in taking part but later backed off when it became clear that the discussion would have to be fairly moderated.
Bill O’Reilly was the only pundit to express an interest in debating Sheen but all has gone quiet on that front following Sheen’s request that the debate be properly presented with each side having equal time.
Earlier this month, appearing on The Alex Jones Show, Sheen responded to personal attacks by Meghan McCain, Rush Limbaugh, Sean Hannity and Bill O’Reilly, by challenging them all to a debate on neutral ground regarding the unanswered questions surrounding 9/11.
Initially, CNN’s Larry King Live show was eager to host the debate but was shocked that it could find no one who would agree to go toe to toe with Sheen and his 20 bullet points on 9/11.
E mails forwarded to us by Sheen indicate that Bill O’Reilly was initially interested and that ABC’s Good Morning America was keen to broadcast the debate.
However, as soon as Sheen outlined rules that would ensure a fair environment to discuss the issues, O’Reilly and his representatives went cold and backed away from the challenge, according to Sheen.
But at least O’Reilly had the courage to respond, unlike every other debunker who attacked Sheen yet skulked away in a cowardly fashion when they were challenged.
“We’re not naked shouting from the top of a building ‘come debate us’, we’re just issuing a very calm and reasonable offer to just sit down in an open and fair debate forum and hash this thing out,” Sheen told The Alex Jones Show yesterday.
Sheen characterized O’Reilly’s brief interest in the debate as a “nibble” and added that an agreement has not been reached on the terms that were presented to the Fox News host’s representatives.
Sheen said that the reaction to his challenge was, “Inkeeping with how this very deceptive and dangerous machine operates.”
“As long as they’ve got the media under their control then this is the mountain that we must continue to climb,” he added.
Watch Sheen’s appearance on The Alex Jones Show yesterday below. E mails exchanged between Sheen, his representative, and Bill O’Reilly’s representative are reprinted at the end.
RELATED: Charlie Sheen’s Video Message to President Obama
RELATED: Twenty Minutes With The President
Why They Call It Fall
So now it turns out that the whole Troubled Assets Relief Program (TARP) was a flop or more likely a scam. Remember Bush Treasury Secretary Henry Paulson telling us last September that credit markets had locked up, and then, after half of the $750 billion that he extorted out of Congress was handed out to Wall Street firms, new President Barack Obama justifying the spending of the second half of the money because we needed to “get the banks lending again”?
Well, now Neil Barofsky, the special inspector general for TARP, is telling us that all that money, and another more than $2 trillion in loans, accomplished nothing. In an interview with Lagan Sebert, published in Huffington Post, Barofsky says, “We were told by Treasury that the purpose of the TARP fund was to increase lending. But we haven’t increased lending.”
Well yeah, that’s true. Just ask any ordinary working stiff. My little bank, the Harleysville National Bank here in eastern Pennsylvania, far from expanding lending, has been shutting down customer credit lines. As a bank manager told me, they were “reviewing all our equity lines” in light of declining property values (actually, property values in our area north of Philadelphia have remained pretty stable). In general, banks across the country have been canceling credit lines, closing credit card accounts on customers deemed risky—including small businesses—and making it very hard to get a new mortgage. (They’ve also been raising all kinds of fees, ripping customers off in other ways, but that’s another story.)
And that goes for the biggest banks that got billions of dollars in taxpayer bailout funds.
Barofsky has been trying doggedly to find out whatever happened to all that money of ours that was shoveled out to the banks, and as he reports, he’s been working not just without any help from the Treasury Department, but actually against the active resistance of Treasury, which he accuses of having tried to dissuade him from even looking into it.
“My biggest surprise,” he says, “is when we announced an audit (of TARP), Treasury went out of their way to say…it would be a big waste of time.” He says Treasury officials including Treasury Secretary Tim Geithner, claimed that it would be impossible to find out where the money went, on the argument that money is “fungible”—that is to say all money is the same. Of course this is a cynical and ridiculous assertion. If it were true, there would be no job for auditors, since all auditors do is look to find out where money went. (Imagine telling an IRS auditor that it is a waste of time auditing your books, because money is fungible!)
In any event, Barofsky has gone about his work, with or without the backing of the Obama Treasury Department, and what he found is that instead of lending out the money that they were provided with by taxpayers, the banks have been “acquiring other institutions, sitting on it, paying down credit lines,” and, of course, paying out obscene bonuses to executives.
The one thing the banks are not doing is lending.
But then, as I wrote last February, it was silly to think that by shoveling money into banks during a record recession, the banks would then lend it out. First of all, there was the awkward reality that good companies were and still are not looking to borrow money. Rather, they are trying to pay down debt and get their balance sheets on more solid ground to survive a period of low or declining sales and earnings. The only companies that would be trying to borrow right now would be the ones that were on the rocks, and wanted money just to stay afloat. And what banker would lend to them? And second, if the banks could make more money by investing their new cash instead of making risky loans with it, why would they lend? So most of them just used the money to invest in Treasury Bonds.
The long and the short of it is that we’ve been taken for a very big and costly ride by banks that created a huge crisis and that then got the government to bail them out of it with our money, and by two administrations, one Republican and now one Democratic, that have been submissive and willing servants of the big banks.
The big surprise to me has been Paul Volcker, who I mistakenly took to be an over-the-hill relic and Wall Street patsy. The former Carter and Reagan-era Federal Reserve Board chairman, currently chair of President Obama’s economic advisory panel, is publicly warning that the president’s bank policies are preserving a system of giant banks that are “too big to fail,” and are risking further, even larger bailouts.
Barofsky agrees, saying that since the bailout, under Obama’s bank policies, big banks already deemed “too big to fail” have become even bigger, and he concludes, “We may be in a far more dangerous place today than we were in a year ago,” for having told certain financial companies that we will not let them fail.
Little wonder that the smart money—that would be the insiders in corporate boardrooms and executive suites—is reportedly selling shares as fast as they can be sold, with the experts reporting that insider sales of company stock are running 31:1 on the sell side. The explanation: with layoffs still running at over 500,000 a month, and nobody hiring, these executives don’t see anything in the year ahead or even longer that is likely to put the economy on a renewed growth path.
Putting these bits of news together doesn’t paint a pretty picture: We’ve got an economy that appears headed for at best a long period of stagnation and, more likely, for a second downturn, once the effect of last March’s stimulus package wears off. We’ve got a financial system that has been propped up artificially, its balance sheets soggy with underwater mortgages and worthless derivatives, and its executives holding assurances that they can count on the government bailing them out no matter what stupid or self-serving decisions they make. We’ve got an economy that is 70% based upon consumer spending, in which one in five people is unemployed or involuntarily underemployed. We’ve got a nation that hardly makes anything, at the same time that its currency is sinking like a stone, making imports increasingly expensive, And we have a stock market that has been inflated into a giant bubble, just waiting to pop.
October should be an interesting month this year.
FAA Manager Mangled, Cut, Destroyed 9/11 Tapes
Information provided to the commission investigating the U.S. government's response to terrorist threats prior to September 11, 2001, names an FAA quality manager in the destruction of an audiotape made in the aftermath of the 9/11 hijackings. Each of at least six air traffic controllers and some ten other employees who were on the job at the New York Air Route Traffic Control Center (ARTCC) in Ronkonkoma, N.Y., during the World Trade Center attacks gathered several hours after to recall their version of events. But that tape, which could have helped determine how the agency responded to clues that four planes had been hijacked, was destroyed before it was ever heard. In fact, officials at the ARTCC were never even told of the tape's existence. According to the report given to the 9/11 Commission by Department of Transportation Inspector General Kenneth Mead, the audiotape was crushed in the hand of the unnamed FAA employee, then cut into small pieces and tossed into different trash cans around the ARTCC building. Despite the fact that the quality assurance officer had been told to retain all records pertaining to 9/11, he told inspector general investigators he destroyed the tape because he felt making it was contrary to FAA policy, which calls for written statements. He is also quoted to have said the controllers "were not in the correct frame of mind to have properly consented to the taping" because of the stress of the day, and told investigators that faced with a similar situation, he would repeat his actions.
Inspector General Mead told the 9/11 commission the employee showed "poor judgment," and in calling for administrative action, said the employee's attitude about the destruction was "especially troubling." The FAA confirms disciplinary action has been taken against the employee, but will not say what that action was, or identify the employee. Senator John McCain (R-Ariz.) says the matter could be investigated further..
By Liz Swaine, Newswriter, EditorEmpire State Building Goes Red for Communist China, Sparking Protest
NEW YORK — New York is seeing red over the decision to turn the city's highest beacon — and one of America's symbols for free enterprise — into a shining monument honoring China's communist revolution Wednesday night.
The Empire State Building shone in red and yellow lights over New York City on Wednesday night to celebrate the 60th anniversary of the bloody communist takeover.
The tower is lit in white most nights, but nearly every week gets splashed with color to honor holidays and heroes — red, white and blue for Independence Day, green for St. Patrick's Day, true blue for New York's Finest.
The building's managers say they have honored a host of countries, including Canada, India and Australia, but as of Wednesday that list of honorees now includes one of the world's last great authoritarian regimes.
Tourists were squirming as the city's 102-story landmark — which gained a special significance for New Yorker's after 9/11, when it again became Manhattan's tallest building — was being converted into a shining red beacon for Chinese communism.
"I think it's a bad idea," said Dick Paasch, 69, from Billings, Montana. "The Chinese Revolution ... in the years 1958-1960, there were something like 26 million people starved to death. Why would we want to celebrate something like that?
"I think the Chinese have come a long way since then, but I certainly wouldn't celebrate the revolution," he said.
Representatives for the building say it won't incur any extra costs to use the colored floodlights, so taxpayers won't have to pay a dime. But tourists thought it would have been better if the building would have stayed white this Wednesday.
"It seems a little out of place in New York City, an American city, having communist colors," said Cathy Crismore of Lancaster, California. "That doesn't seem right."
New York politicians have paid notice as well, and say they are let down by the light-up. Rep. Anthony Weiner, D-N.Y., said it was a mistake to pay tribute to what he called "a nation with a shameful history on human rights."
Historians of the revolution noted the unimaginable — and often forgotten — toll of the revolution and China's communist rule, which has taken tens of millions of lives through years of war, famine, reeducation and wholesale slaughter.
"China gets treatment that other dictatorships can only dream of — a free pass on human rights," said Arthur Waldron, a history professor at the University of Pennsylvania.
The revolution and its aftermath may have been deadlier than any world war: though estimates vary, research from the historian Chang Jung shows that as many as 72 million people died as a result.
During one five-year period alone, the Great Famine of 1958-1962, 36 million Chinese are believed to have starved as a result of Mao's Great Leap Forward, a government policy meant to industrialize the nation.
During those years of ruin, peasants ate bark, maggots, bird droppings, human flesh — anything to survive — as government storehouses stood full with grain and other cereals, neither the first nor last in China's troubled line of violations of human rights.
"China remains strongly oppressive — but we make a lot of money, and we have a tendency to romanticize the country, confusing her brilliant cultural heritage with the current communist regime," said Waldron. "Will we light it in honor of Tibet?"
About 40 protesters massed outside the Empire State Building Wednesday morning as China's New York consul attended a ceremony the building's managers said was to honor "the 1.3 billion Chinese people and the 60th anniversary of their country."
"Because the Empire State Building is such a cultural icon ... this touches a chord close to home for people," said Lhadon Tethong, a leader of the demonstrators from Students for a Free Tibet.
Tethong said that the lights on the building "are a symbol of support for the Chinese state — for a totalitarian state," which ignores the country's "abominable record on human rights, on liberty."
Waldron, of the University of Pennsylvania, said he thought there would be an outcry if another brutal regime were so honored by the tower.
"Would we have lit the Empire State Building for the USSR knowing what we do about the Gulag?"
By Joseph Abrams
Closing the 'Collapse Gap': the USSR was better prepared for collapse than the US
Good evening, ladies and gentlemen. I am not an expert or a scholar or an activist. I am more of an eye-witness. I watched the Soviet Union collapse, and I have tried to put my observations into a concise message. I will leave it up to you to decide just how urgent a message it is.
My talk tonight is about the lack of collapse-preparedness here in the United States. I will compare it with the situation in the Soviet Union, prior to its collapse. The rhetorical device I am going to use is the "Collapse Gap" – to go along with the Nuclear Gap, and the Space Gap, and various other superpower gaps that were fashionable during the Cold War.
Slide [2] The subject of economic collapse is generally a sad one. But I am an optimistic, cheerful sort of person, and I believe that, with a bit of preparation, such events can be taken in stride. As you can probably surmise, I am actually rather keen on observing economic collapses. Perhaps when I am really old, all collapses will start looking the same to me, but I am not at that point yet.
And this next one certainly has me intrigued. From what I've seen and read, it seems that there is a fair chance that the U.S. economy will collapse sometime within the foreseeable future. It also would seem that we won't be particularly well-prepared for it. As things stand, the U.S. economy is poised to perform something like a disappearing act. And so I am eager to put my observations of the Soviet collapse to good use.
Slide [3] I anticipate that some people will react rather badly to having their country compared to the USSR. I would like to assure you that the Soviet people would have reacted similarly, had the United States collapsed first. Feelings aside, here are two 20th century superpowers, who wanted more or less the same things – things like technological progress, economic growth, full employment, and world domination – but they disagreed about the methods. And they obtained similar results – each had a good run, intimidated the whole planet, and kept the other scared. Each eventually went bankrupt.
Slide [4] The USA and the USSR were evenly matched in many categories, but let me just mention four.
The Soviet manned space program is alive and well under Russian management, and now offers first-ever space charters. The Americans have been hitching rides on the Soyuz while their remaining spaceships sit in the shop.
The arms race has not produced a clear winner, and that is excellent news, because Mutual Assured Destruction remains in effect. Russia still has more nuclear warheads than the US, and has supersonic cruise missile technology that can penetrate any missile shield, especially a nonexistent one.
The Jails Race once showed the Soviets with a decisive lead, thanks to their innovative GULAG program. But they gradually fell behind, and in the end the Jails Race has been won by the Americans, with the highest percentage of people in jail ever.
The Hated Evil Empire Race is also finally being won by the Americans. It's easy now that they don't have anyone to compete against.
Slide [5] Continuing with our list of superpower similarities, many of the problems that sunk the Soviet Union are now endangering the United States as well. Such as a huge, well-equipped, very expensive military, with no clear mission, bogged down in fighting Muslim insurgents. Such as energy shortfalls linked to peaking oil production. Such as a persistently unfavorable trade balance, resulting in runaway foreign debt. Add to that a delusional self-image, an inflexible ideology, and an unresponsive political system.
Slide [6] An economic collapse is amazing to observe, and very interesting if described accurately and in detail. A general description tends to fall short of the mark, but let me try. An economic arrangement can continue for quite some time after it becomes untenable, through sheer inertia. But at some point a tide of broken promises and invalidated assumptions sweeps it all out to sea. One such untenable arrangement rests on the notion that it is possible to perpetually borrow more and more money from abroad, to pay for more and more energy imports, while the price of these imports continues to double every few years. Free money with which to buy energy equals free energy, and free energy does not occur in nature. This must therefore be a transient condition. When the flow of energy snaps back toward equilibrium, much of the US economy will be forced to shut down.
Slide [7] I've described what happened to Russia in some detail in one of my articles, which is available on SurvivingPeakOil.com. I don't see why what happens to the United States should be entirely dissimilar, at least in general terms. The specifics will be different, and we will get to them in a moment. We should certainly expect shortages of fuel, food, medicine, and countless consumer items, outages of electricity, gas, and water, breakdowns in transportation systems and other infrastructure, hyperinflation, widespread shutdowns and mass layoffs, along with a lot of despair, confusion, violence, and lawlessness. We definitely should not expect any grand rescue plans, innovative technology programs, or miracles of social cohesion.
Slide [8] When faced with such developments, some people are quick to realize what it is they have to do to survive, and start doing these things, generally without anyone's permission. A sort of economy emerges, completely informal, and often semi-criminal. It revolves around liquidating, and recycling, the remains of the old economy. It is based on direct access to resources, and the threat of force, rather than ownership or legal authority. People who have a problem with this way of doing things, quickly find themselves out of the game.
These are the generalities. Now let's look at some specifics.
Slide [9] One important element of collapse-preparedness is making sure that you don't need a functioning economy to keep a roof over your head. In the Soviet Union, all housing belonged to the government, which made it available directly to the people. Since all housing was also built by the government, it was only built in places that the government could service using public transportation. After the collapse, almost everyone managed to keep their place.
In the United States, very few people own their place of residence free and clear, and even they need an income to pay real estate taxes. People without an income face homelessness. When the economy collapses, very few people will continue to have an income, so homelessness will become rampant. Add to that the car-dependent nature of most suburbs, and what you will get is mass migrations of homeless people toward city centers.
Slide [10] Soviet public transportation was more or less all there was, but there was plenty of it. There were also a few private cars, but so few that gasoline rationing and shortages were mostly inconsequential. All of this public infrastructure was designed to be almost infinitely maintainable, and continued to run even as the rest of the economy collapsed.
The population of the United States is almost entirely car-dependent, and relies on markets that control oil import, refining, and distribution. They also rely on continuous public investment in road construction and repair. The cars themselves require a steady stream of imported parts, and are not designed to last very long. When these intricately interconnected systems stop functioning, much of the population will find itself stranded.
Slide [11] Economic collapse affects public sector employment almost as much as private sector employment, eventually. Because government bureaucracies tend to be slow to act, they collapse more slowly. Also, because state-owned enterprises tend to be inefficient, and stockpile inventory, there is plenty of it left over, for the employees to take home, and use in barter. Most Soviet employment was in the public sector, and this gave people some time to think of what to do next.
Private enterprises tend to be much more efficient at many things. Such laying off their people, shutting their doors, and liquidating their assets. Since most employment in the United States is in the private sector, we should expect the transition to permanent unemployment to be quite abrupt for most people.
Slide [12] When confronting hardship, people usually fall back on their families for support. The Soviet Union experienced chronic housing shortages, which often resulted in three generations living together under one roof. This didn't make them happy, but at least they were used to each other. The usual expectation was that they would stick it out together, come what may.
In the United States, families tend to be atomized, spread out over several states. They sometimes have trouble tolerating each other when they come together for Thanksgiving, or Christmas, even during the best of times. They might find it difficult to get along, in bad times. There is already too much loneliness in this country, and I doubt that economic collapse will cure it.
Slide [13] To keep evil at bay, Americans require money. In an economic collapse, there is usually hyperinflation, which wipes out savings. There is also rampant unemployment, which wipes out incomes. The result is a population that is largely penniless.
In the Soviet Union, very little could be obtained for money. It was treated as tokens rather than as wealth, and was shared among friends. Many things – housing and transportation among them – were either free or almost free.
Slide [14] Soviet consumer products were always an object of derision – refrigerators that kept the house warm – and the food, and so on. You'd be lucky if you got one at all, and it would be up to you to make it work once you got it home. But once you got it to work, it would become a priceless family heirloom, handed down from generation to generation, sturdy, and almost infinitely maintainable.
In the United States, you often hear that something "is not worth fixing." This is enough to make a Russian see red. I once heard of an elderly Russian who became irate when a hardware store in Boston wouldn't sell him replacement bedsprings: "People are throwing away perfectly good mattresses, how am I supposed to fix them?"
Economic collapse tends to shut down both local production and imports, and so it is vitally important that anything you own wears out slowly, and that you can fix it yourself if it breaks. Soviet-made stuff generally wore incredibly hard. The Chinese-made stuff you can get around here – much less so.
Slide [15] The Soviet agricultural sector was notoriously inefficient. Many people grew and gathered their own food even in relatively prosperous times. There were food warehouses in every city, stocked according to a government allocation scheme. There were very few restaurants, and most families cooked and ate at home. Shopping was rather labor-intensive, and involved carrying heavy loads. Sometimes it resembled hunting – stalking that elusive piece of meat lurking behind some store counter. So the people were well-prepared for what came next.
In the United States, most people get their food from a supermarket, which is supplied from far away using refrigerated diesel trucks. Many people don't even bother to shop and just eat fast food. When people do cook, they rarely cook from scratch. This is all very unhealthy, and the effect on the nation's girth, is visible, clear across the parking lot. A lot of the people, who just waddle to and from their cars, seem unprepared for what comes next. If they suddenly had to start living like the Russians, they would blow out their knees.
Slide [16] The Soviet government threw resources at immunization programs, infectious disease control, and basic care. It directly operated a system of state-owned clinics, hospitals, and sanatoriums. People with fatal ailments or chronic conditions often had reason to complain, and had to pay for private care – if they had the money.
In the United States, medicine is for profit. People seems to think nothing of this fact. There are really very few fields of endeavor to which Americans would deny the profit motive. The problem is, once the economy is removed, so is the profit, along with the services it once helped to motivate.
Slide [17] The Soviet education system was generally quite excellent. It produced an overwhelmingly literate population and many great specialists. The education was free at all levels, but higher education sometimes paid a stipend, and often provided room and board. The educational system held together quite well after the economy collapsed. The problem was that the graduates had no jobs to look forward to upon graduation. Many of them lost their way.
The higher education system in the United States is good at many things – government and industrial research, team sports, vocational training... Primary and secondary education fails to achieve in 12 years what Soviet schools generally achieved in 8. The massive scale and expense of maintaining these institutions is likely to prove too much for the post-collapse environment. Illiteracy is already a problem in the United States, and we should expect it to get a lot worse.
Slide [18] The Soviet Union did not need to import energy. The production and distribution system faltered, but never collapsed. Price controls kept the lights on even as hyperinflation raged.
The term "market failure" seems to fit the energy situation in the United States. Free markets develop some pernicious characteristics when there are shortages of key commodities. During World War II, the United States government understood this, and successfully rationed many things, from gasoline to bicycle parts. But that was a long time ago. Since then, the inviolability of free markets has become an article of faith.
Slide [19] My conclusion is that the Soviet Union was much better-prepared for economic collapse than the United States is.
I have left out two important superpower asymmetries, because they don't have anything to do with collapse-preparedness. Some countries are simply luckier than others. But I will mention them, for the sake of completeness.
In terms of racial and ethnic composition, the United States resembles Yugoslavia more than it resembles Russia, so we shouldn't expect it to be as peaceful as Russia was, following the collapse. Ethnically mixed societies are fragile and have a tendency to explode.
In terms of religion, the Soviet Union was relatively free of apocalyptic doomsday cults. Very few people there wished for a planet-sized atomic fireball to herald the second coming of their savior. This was indeed a blessing.
Slide [20] One area in which I cannot discern any Collapse Gap is national politics. The ideologies may be different, but the blind adherence to them couldn't be more similar.
It is certainly more fun to watch two Capitalist parties go at each other than just having the one Communist party to vote for. The things they fight over in public are generally symbolic little tokens of social policy, chosen for ease of public posturing. The Communist party offered just one bitter pill. The two Capitalist parties offer a choice of two placebos. The latest innovation is the photo finish election, where each party buys 50% of the vote, and the result is pulled out of statistical noise, like a rabbit out of a hat.
The American way of dealing with dissent and with protest is certainly more advanced: why imprison dissidents when you can just let them shout into the wind to their heart's content?
The American approach to bookkeeping is more subtle and nuanced than the Soviet. Why make a state secret of some statistic, when you can just distort it, in obscure ways? Here's a simple example: inflation is "controlled" by substituting hamburger for steak, in order to minimize increases to Social Security payments.
Slide [21] Many people expend a lot of energy protesting against their irresponsible, unresponsive government. It seems like a terrible waste of time, considering how ineffectual their protests are. Is it enough of a consolation for them to be able to read about their efforts in the foreign press? I think that they would feel better if they tuned out the politicians, the way the politicians tune them out. It's as easy as turning off the television set. If they try it, they will probably observe that nothing about their lives has changed, nothing at all, except maybe their mood has improved. They might also find that they have more time and energy to devote to more important things.
Slide [22] I will now sketch out some approaches, realistic and otherwise, to closing the Collapse Gap. My little list of approaches might seem a bit glib, but keep in mind that this is a very difficult problem. In fact, it's important to keep in mind that not all problems have solutions. I can promise you that we will not solve this problem tonight. What I will try to do is to shed some light on it from several angles.
Slide [23] Many people rail against the unresponsiveness and irresponsibility of the government. They often say things like "What is needed is..." plus the name of some big, successful government project from the glorious past – the Marshall Plan, the Manhattan Project, the Apollo program. But there is nothing in the history books about a government preparing for collapse. Gorbachev's "Perestroika" is an example of a government trying to avert or delay collapse. It probably helped speed it along.
Slide [24] There are some things that I would like the government to take care of in preparation for collapse. I am particularly concerned about all the radioactive and toxic installations, stockpiles, and dumps. Future generations are unlikely to able to control them, especially if global warming puts them underwater. There is enough of this muck sitting around to kill off most of us. I am also worried about soldiers getting stranded overseas – abandoning one's soldiers is among the most shameful things a country can do. Overseas military bases should be dismantled, and the troops repatriated. I'd like to see the huge prison population whittled away in a controlled manner, ahead of time, instead of in a chaotic general amnesty. Lastly, I think that this farce with debts that will never be repaid, has gone on long enough. Wiping the slate clean will give society time to readjust. So, you see, I am not asking for any miracles. Although, if any of these things do get done, I would consider it a miracle.
Slide [25] A private sector solution is not impossible; just very, very unlikely. Certain Soviet state enterprises were basically states within states. They controlled what amounted to an entire economic system, and could go on even without the larger economy. They kept to this arrangement even after they were privatized. They drove Western management consultants mad, with their endless kindergartens, retirement homes, laundries, and free clinics. These weren't part of their core competency, you see. They needed to divest and to streamline their operations. The Western management gurus overlooked the most important thing: the core competency of these enterprises lay in their ability to survive economic collapse. Maybe the young geniuses at Google can wrap their heads around this one, but I doubt that their stockholders will.
Slide [26] It's important to understand that the Soviet Union achieved collapse-preparedness inadvertently, and not because of the success of some crash program. Economic collapse has a way of turning economic negatives into positives. The last thing we want is a perfectly functioning, growing, prosperous economy that suddenly collapses one day, and leaves everybody in the lurch. It is not necessary for us to embrace the tenets of command economy and central planning to match the Soviet lackluster performance in this area. We have our own methods, that are working almost as well. I call them "boondoggles." They are solutions to problems that cause more problems than they solve.
Just look around you, and you will see boondoggles sprouting up everywhere, in every field of endeavor: we have military boondoggles like Iraq, financial boondoggles like the doomed retirement system, medical boondoggles like private health insurance, legal boondoggles like the intellectual property system. The combined weight of all these boondoggles is slowly but surely pushing us all down. If it pushes us down far enough, then economic collapse, when it arrives, will be like falling out of a ground floor window. We just have to help this process along, or at least not interfere with it. So if somebody comes to you and says "I want to make a boondoggle that runs on hydrogen" – by all means encourage him! It's not as good as a boondoggle that burns money directly, but it's a step in the right direction.
Slide [27] Certain types of mainstream economic behavior are not prudent on a personal level, and are also counterproductive to bridging the Collapse Gap. Any behavior that might result in continued economic growth and prosperity is counterproductive: the higher you jump, the harder you land. It is traumatic to go from having a big retirement fund to having no retirement fund because of a market crash. It is also traumatic to go from a high income to little or no income. If, on top of that, you have kept yourself incredibly busy, and suddenly have nothing to do, then you will really be in rough shape.
Economic collapse is about the worst possible time for someone to suffer a nervous breakdown, yet this is what often happens. The people who are most at risk psychologically are successful middle-aged men. When their career is suddenly over, their savings are gone, and their property worthless, much of their sense of self-worth is gone as well. They tend to drink themselves to death and commit suicide in disproportionate numbers. Since they tend to be the most experienced and capable people, this is a staggering loss to society.
If the economy, and your place within it, is really important to you, you will be really hurt when it goes away. You can cultivate an attitude of studied indifference, but it has to be more than just a conceit. You have to develop the lifestyle and the habits and the physical stamina to back it up. It takes a lot of creativity and effort to put together a fulfilling existence on the margins of society. After the collapse, these margins may turn out to be some of the best places to live.
Slide [28] I hope that I didn't make it sound as if the Soviet collapse was a walk in the park, because it was really quite awful in many ways. The point that I do want to stress is that when this economy collapses, it is bound to be much worse. Another point I would like to stress is that collapse here is likely to be permanent. The factors that allowed Russia and the other former Soviet republics to recover are not present here.
In spite of all this, I believe that in every age and circumstance, people can sometimes find not just a means and a reason to survive, but enlightenment, fulfillment, and freedom. If we can find them even after the economy collapses, then why not start looking for them now?
Thank you.
~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~
Energy Bulletin published an excerpt from this talk yesterday (Dec 3), and Dmitry reported that his small webserver was overwhelmed with requests. Although it's good news that his writing has such a following, PLEASE don't access the document on his web server (Club Orlov). The same content is here, on Energy Bulletin's heavier duty webserver.
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Orlov has many penetrating insights, couched in his dark humor. Particularly striking is the strong case he makes that the peoples of the USSR were actually better prepared for a collapse because
- they had learned to be more self-reliant
- many crucial functions (like housing and transportation) were taken care of by the state sector which was more stable than a private sector would have been.
Orlov's cynicism about the possibility of intelligent government action was probably justified in the case of the Soviet Union, but I think it would be a tragic mistake to abandon efforts to change the direction of the U.S. The Soviets had little chance to make democratic institutions work. We do have that chance.
-BA
UPDATE: Dmitri Orlov writes on March 4, 2007:
You wrote that "The Soviets had little chance to make democratic institutions work." That's not entirely true. Perestroika and Glasnost were all about democracy, and in my opinion it had the same chance of success as the hopelessly gerrymandered system that passes for democracy in the US, (although much less than any proper, modern democracy, in which the Bush regime would have been put out of power quite a while ago, after a simple parliamentary vote of no confidence and early elections). The problem is that, in a collapse scenario, democracy is the least effective system of government one can possibly think of (think Weimar, or the Russian Interim Government) - a topic I cover in Post-Soviet Lessons.
Lastly, I don't think calling me a cynic is exactly accurate: I've been in the US a long time, watching the system become progressively more dysfunctional with each passing political season. It seems to me that it is not necessarily cynical to be able to spot a solid trend, but that it could be simply observant.
UPDATE (October 30, 2007):
We've noticed an influx of visitors to Dmitry Orlov's article, since its mention on several websites. Dmitry writes that his new book, "Reinventing Collapse," is due from New Society Publishers in the springtime.
CIT 'Hanging by Their Fingernails': Source
Remember CIT? The major lender to small and medium-sized businesses that came back from the brink of bankruptcy in July? Now, CIT Group Inc. is back on the brink.
The company is furiously trying to work out a deal with bondholders that would wipe out around 30 to 40 percent of its more than $30 billion in debt, a source in the financial industry told ABC News, confirming a story in today's Wall Street Journal. If the bondholder deal falls through, the company will likely have to file for bankruptcy.
At this point, the source told ABC News, the century-old company is "hanging by their fingernails."
CIT had no comment.
The last-ditch effort to avoid bankruptcy is the latest chapter in a saga that has gone on for months. CIT accounts for around 60 to 70 percent of financing for small and medium-sized businesses such as Dillard's department stores and Dunkin' Donuts. But the company ran into problems after diving into subprime mortgage lending and student lending. In late July, CIT secured a $3 billion agreement with bondholders to stave off bankruptcy.
On July 15, the Treasury said, "Even during periods of financial stress, we believe that there is a very high threshold for exceptional government assistance to individual companies."
The government's decision was a testament to the improvements in the financial system in the past year. If CIT had failed last fall or last winter, its collapse could have been catastrophic. But, this year, even though a CIT bankruptcy could be one of the biggest Chapter 11 filings in the country's history, the government was no longer compelled to help.
By MATTHEW JAFFECarphone Warehouse threatens legal action over file-sharing plans
Carphone Warehouse chief executive Charles Dunstone has threatened to take the Government to court if his company is forced to disconnect file-sharers.
Carphone Warehouse owns TalkTalk, the UK's biggest broadband provider with 4.25 million customers, and Dunstone said the company would "continue to resist any attempts to make it impose technical measures on its customers (unless directed to do so by a court or recognised tribunal).
"The approach proposed by Lord Mandelson is based on the principle of guilty until proven innocent and substitutes proper judicial process for a kangaroo court," he said.
The UK government's stance seems to have shifted significantly from persuasion to coercion in relation to consumer behaviour
"In the event that we are instructed to impose extra judicial technical measures we will refuse to do so and challenge the instruction in the courts," Dunstone argued at a Government forum dedicated to tackling illegal filesharing.
Indeed, Dunstone claimed the Government's proposal could escalate incidents of Wi-Fi hijacking. "What is being proposed is wrong in principle and it won’t work in practice. The unintended consequence of Mandelson’s plan will be to encourage more Wi-Fi and PC hijacking and expose more innocent people to being penalised wrongfully."
It was sentiment echoed by BT, which claimed the measures could force it to add £2 per month to customer's broadband bills.
"The UK government's stance seems to have shifted significantly from persuasion to coercion in relation to consumer behaviour," BT said.
Magnitude 6.6 - SOUTHERN SUMATRA, INDONESIA
2009 October 01 01:52:29 UTC
Earthquake Details
| Magnitude | 6.6 |
|---|---|
| Date-Time |
|
| Location | 2.497°S, 101.540°E |
| Depth | 15 km (9.3 miles) set by location program |
| Region | SOUTHERN SUMATRA, INDONESIA |
| Distances | 160 km (100 miles) NNW of Bengkulu, Sumatra, Indonesia 215 km (135 miles) SE of Padang, Sumatra, Indonesia 490 km (305 miles) SSW of SINGAPORE 705 km (435 miles) NW of JAKARTA, Java, Indonesia |
| Location Uncertainty | horizontal +/- 7.7 km (4.8 miles); depth fixed by location program |
| Parameters | NST=211, Nph=211, Dmin=784.6 km, Rmss=1.45 sec, Gp= 32°, M-type=teleseismic moment magnitude (Mw), Version=9 |
| Source |
|
| Event ID | us2009mfaf |
- This event has been reviewed by a seismologist.
Banking Trojan steals money from under your nose
Researchers at security firm Finjan have discovered details of a new type of banking Trojan horse that doesn't just steal your bank log-in credentials but actually steals money from your account while you are logged in and displays a fake balance.
The bank Trojan, dubbed URLZone, has features designed to thwart fraud detection systems which are triggered by unusual transactions, Yuval Ben-Itzhak, chief technology officer at Finjan, said in an interview Tuesday. For instance, the software is programmed to calculate on-the-fly how much money to steal from an account based on how much money is available.
It exploits a hole in Firefox, Internet Explorer 6, IE7, IE8, and Opera, and it is different from previously reported banking Trojans, said Ben-Itzhak. The Trojan runs an executable only on Windows systems, he said. The executable can come via a number of avenues, including malicious JavaScript or an Adobe PDF, he added.
The specific Trojan Finjan researchers analyzed targeted customers of unnamed German banks, according to the latest Finjan report. It was linked back to a command-and-control server in Ukraine that was used to send instructions to the Trojan software sitting inside infected PCs. Finjan has notified German law enforcement, Ben-Itzhak said.
"It's a next generation bank Trojan," he said. "This is part of a new trend of more sophisticated Trojans designed to evade antifraud systems."
Finjan researchers were able to trace the communications from the code on an infected machine back to the command-and-control server, which was left unsecured, according to Ben-Itzhak. On that server, they saw the LuckySploit administration console and were able to see exactly what types of rules the Trojan was written to follow and statistics on victims.
About 90,000 computers visited the sites housing the malware and 6,400 of them were infected, a 7.5 percent success rate, he said. Of those whose computers installed the Trojan, a few hundred had money stolen from their bank accounts, he said.
During the span of 22 days in mid-August, the criminals behind the Trojan stole the euro equivalent of nearly $438,000.
The Trojan code includes detailed instructions on how the Trojan should calculate the amount to steal from a victim's bank account.
(Credit: Finjan)Here's how the Trojan works:
Potential victims get their computers infected either by opening an e-mail and clicking on a link to a Web site created to distribute malware or by visiting a site that has been compromised and malware hidden on it.
In this case the malware, a toolkit called LuckySploit, exploits a known security hole in the browser, and installs the Trojan on the computer. When the Trojan notices the computer user visiting the site of a targeted bank it springs into action.
While the computer user goes about his or her business on the site, the Trojan looks at the available balance and figures out how much money to steal. The Trojan is given a minimum and a maximum range that is below the amount that triggers antifraud systems and to leave a certain percentage in the account, Ben-Itzhak said.
After performing the calculation, the Trojan then makes the transaction, communicating with the bank site through the browser without the computer user knowing.
"The Trojan is sending requests to the bank and getting replies that your browser doesn't display," Ben-Itzhak said. "You are looking at your account and you don't see any of it."
A Finjan blog post describes it like this:
URLZone is a Trojan Kit that allows the attacker with the use of the 'URLZone Builder' to create a configuration file. This file contains precise orders to the bot, enabling the attacker to target any bank he wants...The URLZone successfully managed to bypass the German banks' protection using 'One Time Password.' This is a technique used to enable the user to get a new password every time he logs into his account. Its goal is to make the theft of usernames and passwords worthless. In order to be successful, the malware must execute itself on the browser to change the parameters and fool the the user to approve a fraudulent money transaction from his account...So far the malware behavior is similar to many other Trojans. However, URLZone uses the delivered configuration file to manipulate the user.
The Trojan has the money sent to the bank account of a money mule, someone who has an account set up to receive the funds. Money mules are typically people recruited online as "independent contractors" or "financial managers" whose sole purpose is to wire the money placed into their account to someone else, typically out of the country, in exchange for a commission. Because their accounts are used only once or twice, they often do not realize the ruse immediately, Ben-Itzhak said.
Meanwhile, the Trojan hides the theft by erasing it from the report of account activity displayed to the computer user and shows a fake balance--what the amount would be if not for the theft. The victim will not notice something is wrong until a different, uncompromised computer is used to access the account, an ATM is used, or a transaction is denied because of insufficient funds.
The Trojan also keeps a log of the victim's bank account log in credentials, takes screenshots, and snoops on the user's other Web accounts, such as PayPal, Facebook, and Gmail, according to the Finjan report.
This is the first Trojan Finjan has come across that hijacks a victim's browser session, steals the money while the victim is doing online banking, and then covers its tracks by modifying information displayed to the victim, all in real time, Ben-Itzhak said.
People should keep their antivirus, operating system, browser and other software up to date to protect against this type of attack, he said.
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