Decius wrote:

noteworthy wrote:
Things that make you go "hmmm..."

This is an advance notification of an out-of-band security bulletin that Microsoft is intending to release on October 23, 2008.

If you haven't seen it, Microsoft has just recently started publishing an immense amount of technical detail about these vulnerabilities. Look here and here.

Good reverse here:

http://www.dontstuffbeansupyournose.com/?p=35

RE: Microsoft Security Bulletin Advance Notification for October 2008

Related to the article you linked about the death of Libertarianism. Counterpoint.

The point being that regulators do not have a magic wand that makes their beliefs 100% accurate. But, the problem is that regulators will direct regulation in the direction of what they believe and not, "Opposing Views". Thus, any crashes under heavy regulation become greater, because regulators have driven ALL market participants in that direction.

Regulators aren't gods. As we learn today in a WSJ report even the FDIC got caught up in the sub prime madness:

It turns out that the U.S. government itself was one of the lenders giving out high-interest, subprime mortgages, some of them predatory, according to government documents filed in federal court.

The unusual situation, which is still bedeviling bank regulators, stems from the 2001 seizure by federal officials of Superior Bank FSB, then a national subprime lender based in Hinsdale, Ill. Rather than immediately shuttering or selling Superior, as it normally does with failed banks, the Federal Deposit Insurance Corp. continued to run the bank's subprime-mortgage business for months as it looked for a buyer. With FDIC people supervising day-to-day operations, Superior funded more than 6,700 new subprime loans worth more than $550 million, according to federal mortgage data.

The FDIC then sold a big chunk of the loans to another bank. That loan pool was afflicted by the same problems for which regulators have faulted the industry: lending to unqualified borrowers, inflated appraisals and poor verification of borrowers' incomes, according to a written report from a government-hired expert. The report said that many of the loans never should have been made in the first place.

Hundreds of borrowers who took out Superior subprime loans on the FDIC's watch -- some with initial interest rates higher than 12% -- have lost their homes to foreclosure, data on the loans indicate...

Government Isn't God: FDIC Sticks Banks With Bad Loans and Sticks Borrowers With Subprime Junk

Decius wrote:
To the core point, these loan originators took advantage of a loop hole in contracts written by brokers and created loan products that were doomed to fail, and a whole bunch of housing speculators got in on the deal. Wall Street shouldn't have offered that deal, but it did. Regulators should have been allowed to act, but were not. The idea that the market will always forsee these things is wrong. Sometimes the market drives off a cliff.

Who forced people to buy these securities? Anyone who had done their homework would have known the proposition was unsustainable.

RE: How the financial collapse killed libertarianism. - By Jacob Weisberg - Slate Magazine

Decius wrote:

This is not due to a lack of money available to lend, Ms. Schwartz says, but to a lack of faith in the ability of borrowers to repay their debts. "The Fed," she argues, "has gone about as if the problem is a shortage of liquidity. That is not the basic problem. The basic problem for the markets is that [uncertainty] that the balance sheets of financial firms are credible."

...

"They're toxic because you cannot sell them, you don't know what they're worth, your balance sheet is not credible and the whole market freezes up. We don't know whom to lend to because we don't know who is sound. So if you could get rid of them, that would be an improvement." The only way to "get rid of them" is to sell them, which is why Ms. Schwartz thought that Treasury Secretary Hank Paulson's original proposal to buy these assets from the banks was "a step in the right direction."

The problem with that idea was, and is, how to price "toxic" assets that nobody wants. And lurking beneath that problem is another, stickier problem: If they are priced at current market levels, selling them would be a recipe for instant insolvency at many institutions. The fears that are locking up the credit markets would be realized, and a number of banks would probably fail.

Ms. Schwartz won't say so, but this is the dirty little secret that led Secretary Paulson to shift from buying bank assets to recapitalizing them directly, as the Treasury did this week. But in doing so, he's shifted from trying to save the banking system to trying to save banks. These are not, Ms. Schwartz argues, the same thing. In fact, by keeping otherwise insolvent banks afloat, the Federal Reserve and the Treasury have actually prolonged the crisis. "They should not be recapitalizing firms that should be shut down."

Paulson's shift in strategy received a lot of praise. Here is Ritholtz arguing for the shift pre-shift. But, apparently there are critics out there.

You should be reading economicpolicyjournal.com.

He was on this from day one.

RE: The Weekend Interview - WSJ.com

Please sit down before you read this. If you have high blood pressure or heart trouble don't even try to read this, find a decent sports page instead, this is not for you.

Half of the first $250 billion tranche of money approved by Congress for the mortgage crisis will end up in the hands of the "healthy" big banks.

"For the good of the American financial system," Treasury Secretary Paulson has told the big banks they must take his $125 billion dollar handout, reports NYT.

Citigroup and JPMorgan Chase were told they would each get $25 billion; Bank of America and Wells Fargo, $20 billion each (plus an additional $5 billion for their recent acquisitions); Goldman Sachs and Morgan Stanley, $10 billion each, with Bank of New York Mellon and State Street each receiving $2 to 3 billion. Wells Fargo will get $5 billion for its acquisition of Wachovia, and Bank of America the same for amount for its purchase of Merrill Lynch. So much for bailing out the mortgage market.

Here's the kicker: The shares will not be dilutive to current shareholders, a concern to banking chief executives, because perpetual preferred stock holders are paid a dividend, not a portion of earnings. In other words, all current shareholders are protected, unlike Lehman, Bear Stearns, Fannie Mae and Freddie Mac shareholders.

No matter how they frame this,the truth is this is a $125 Billion going away gift from the Bush Administration.

Big Banks Get $125 Billion Cash Going Away Gift From Paulson and the Bush Administration

ubernoir wrote:

American academic Paul Krugman has won this year's Nobel economics prize, it has been announced.

Not everyone is happy with this.

RE: BBC NEWS | World | Americas | Krugman wins Nobel for economics

From PEU (Private Equity Underwriter) Report:

The G-7 group of nations formulated a plan to address the faltering global economy in Washington, D.C. Halfway across the globe, private equity underwriters (PEUs) gather in Dubai for the SuperReturn Conference. In case anyone forgot, pursuit of super returns by Wall Street investment houses helped get us into our current pickle. The Scotsman reported on the G-7 meeting:

The wider, five-point G7 plan is:

• Take decisive action and use all available tools to support important financial institutions and prevent their failure.
• Take all steps to unfreeze credit and money markets.
• Ensure banks can raise capital via public and private sources.
• Ensure national deposit guarantee programs are robust.
• Take action, where appropriate, to restart the "secondary markets" for mortgages and other assets.

However, there was no further detail last night. In a surprisingly brief statement after their meeting, the G7 also stopped short of backing a UK plan to guarantee lending between banks – a move many on Wall Street saw as vital.

"The G7 agrees the current situation calls for urgent and exceptional action," the statement by US, Canada, Britain, France, Italy, Germany and Japan said.

Finance leaders are to continue meeting this weekend to agree a global solution. Analysts said the summits, which involve the G7 and G20 nations, as well as the International Monetary Fund and World Bank, are of "truly monumental importance".

The Gulf Daily News reported on SuperReturn:

A top private equity conference, SuperReturn, has a strong line-up of global thought-leaders speaking at its second Middle East conference taking place next week in Dubai.
SuperReturn Middle East will be held from tomorrow to Wednesday at the Intercontinental Hotel, Festival City, Dubai.

Headlining speakers at the event will include eminent and powerful global private equity figures, such as Investcorp's president and chief operating officer Gary Long, Carlyle Group chairman David Rubenstein and Blackstone Group chief executive officer and co-founder of Steve Schwarzman.

"We are delighted to be a principal partner of such a prestigious event," said Mr Long. "SuperReturn is the definitive private equity forum. Its success and standing in Europe is now being replicated here in the Middle East at a time of increasing excitement and opportunity for the local private equity industry."

The Middle East is full of dollar stuffed sovereign wealth funds. They have $2.5 trillion in assets. They're front and center as U.S. banks look for new capital. World Bank President Bob Zoellick already had them on the agenda. What luck!

"You will also see the sovereign wealth funds – and they have already been doing this – play a role in recapitalising financial institutions. You've already seen some ... [ Read More (0.1k in body) ]

A Tale of Two Meetings

Was trying to get my head around how anycast works, found a great PDF at CMU.

Deploying IP Anycast

First there was The Spinning Cube of Potential Doom. Then, there was the GPL Cube of Potential Doom. Someone else has a much more improved version now:

InetVis has several features to explore network traffic and assist the formation of insight. A set of key features are listed below:

* Adjustable replay position to seek through the traffic capture files.
* Variable playback speed (time scaling), from as slow as 0.001x (1 ms/s), or as fast as 86400x (1 day/s).
* Variable time frame/window to view events for the past 100 ms up to 5 years.
* Transparent decay of events - points fade as they age (with respect to the time window).
* New events are highlighted by pulsing once (a momentarily bulge of the point).
* Filtering capability via BPF filter expressions (as used in libpcap and tcpdump).
* Various colour schemes for colouring points and adjustable point size.
* Setting the data ranges and scaling down into sub-domain IP addresses (destination and source) as well as port ranges to view a subset of the traffic data.
* Adjustable logarithmic plot for stretching out lower port range where, in general, most TCP/UDP traffic occurs.
* Various reference frame controls, i.e. toggling visibility of axes, markers, transparent grid lines, labels, and background colour.
* Orthographic and perspective projection modes.
* Immersive navigation - scaling (zooming), translating (moving) and rotating.
* Record single snapshot image, or dump all image frames (useful for manually encoding video clips).
* Record output back to pcap binary file format, for further detailed analysis with other applications (e.g. tcpdump, Ethereal and Snort).

InetVis -- 3-D scatter-plot visualization for network traffic

A woman stopped by U.S. Customs and Border Protection officers at the border, over a drawing of an SUV in her notebook. They thought the artist and college professor was an industrial spy and copyright infringer.

U.S. Customs and Border Protection officers told Zempel they suspected her of copyright infringement.

She was released after more than an hour in custody at the Houlton, Maine, port of entry from New Brunswick, Canada.

Her release came only after she persuaded border guards she was an artist doing a project that involved a crocheted SUV as a statement against America's dependence on oil and love for big vehicles.

And these are the rocket-scientists we want to give clones of our hard-drives to? As Cardinal Richelieu said, "If you give me six lines written by the most honest man, I will find something in them to hang him."

US Customs: Sketching an SUV makes you a copyright infringer