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Dubai expose : Lessons still not learned

Saturday, November 28th, 2009 at 6:19 pm  
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$60 billion. That is a drop in the bucket as compared to the $10 trillion we have. Yet the doom of Dubai, seemed to have echoed around that world and got the markets panicking. What we can tell you is that we have not learned our lessons yet and this demonstrates the power house economy that US really is.

$60 billion. That is more than you and I would ever make in our lifetimes. But as a corporation, it really is not that much. Microsoft is worth more than $200 billion, Apple are Google, each, are worth more than $150 billion; so how is it that a city state that owes the world $60 billion could shake the world like it did?

The answer : silly risk taking. What caused creditors to be so afraid was that lots of the debts that we see today would be increased many times over due to the manipulation of risk. Let me give you a very much simplified example.

Lets say Company A had some formula to turn water to Gold. Company A goes to Bank A to get a loan, and Bank A approved a loan of $10 million. Bank B does not believe that Company A’s plan. So it does something called a Credit Default Swap. They would give Bank A the money for the loan. Should Company A default on her payments to Bank A, Bank A would pay Bank B $100 million.

The example that I gave above is what I call a 10:1 (100 million to 10 million) bet scenario. There are other examples in real life with methods ranging from short selling to derivatives which have a 30 : 1 bet ratio. Now that is what the EU terms as casino banking.

The same thing happened with Dubai. Should Dubai not be able to pay her debts off, the amount lost by her creditors would not be $60 billion, but in the trillions. That is what the entire pandemonium and panic is all about.

When are we going to learn our lessons? Why can’t we go back to the tried and tested system of a bank putting in capital should they believe in the business plan that they receive. Why must there be what I call sucker capitalism? When are we going to end such practices? Would the next attack be too late to save America? America and the world must wake up to this problem or we would face lots of problems in the future.

Dubai goes $60 billion in the red, and the world panics. Does anybody realize that the world is not that bothered with the trillions of dollars worth of debt when it came to the debt of countries like US, Japan and the UK? This is because the world, as of today, is still very confident in these economies.

I really hope that Dubai bring back the attention of bad banking, as what the economic crash did. It is essential that we get this back in order…

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Net Neutrality : Hell Yeah!

Saturday, October 24th, 2009 at 7:59 am  
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Senator John McCain is coming up with a bill called the Internet Freedom Act. It is something that I vehemently oppose. This is one bill that could affect us right away. The Internet should not be the playground of the corporations, it should be the network of knowledge!

The Internet Freedom Act is actually a block measure intended for the Federal Communications Commission (FCC) who are trying to formulate net neutrality guidelines. What is net neutrality? What it means is that there would be regulations in Internet Service Providers to allow, slow down or outright ban sites for their customers. In simple terms, it means that you can surf to any site that you like if you pay your Internet bills and your ISPs cannot slow down your service.

E.g. Lets say Verizon suddenly hates Slashing Tongue and have become our bitter rivals (so untrue, would never happen). Based on that grudge, they can ban our site outright and Verizon customers would not be able to come to our site. Another thing they could do is to slow down access to our site, so even though you have a 100 Mbs broadband, you would be only surfing 10kbs when visiting our site but would be able to surf up to 100Mbs on other “Verizon-friendly” sites.. With net neutrality, Verizon would be forced to allow her customers to visit our site at 100Mbs. It is as simple as that!

Think about this. What would happen if a mega company like Google, or Microsoft buys over ISPs, and ban all from visiting non Yahoo or make the Internet inaccessible to Linux users? What if AOL Time Warner bans all news but CNN online? Would it be so free market then?

The free market is the free market. If the FCC is going to socialize all the ISPs under state control and make it assets of the state, then we would have a problem. That is not making the market free. Just in the same manner, it is also not part of the free market if the ISPs can slow down our Internet connection for visiting sites that they do not like. That is simple too much!

This is yet another thing that should be a no brainer but politics can screw anything up. Anybody that has Internet at home or in the office can understand what this bill is about. Can you imagine how frustrating it would surfing for knowledge when many sites are banned?. What if political agendas take over ISPs and we can only get liberal/conservative views online? What do you think the outcome of that would be? We already have that in television stations like FOX and MSNBC.

Lastly, I would say that my respect for Senator McCain is still there. Even though he has come up in negative light in the last two articles, I still think he would have been a better President than Senator Hillary Clinton should she have won the nomination. I think is stance on the Rape bill was outright disgraceful, and he is very wrong on this bill, but I think that his heart is at the right place.

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DoD rape tragedy

Thursday, October 22nd, 2009 at 4:51 pm  
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This is the saddest thing that the Obama administration has done. The US Department of Defense, the people that are supposed to be defending us, thinks that it is okay for rape to happen within their body via their contractors and the accused company be going away scott free.

James Leigh Jones, who was working for Haliburton, was gang raped by her colleagues. She was then locked up in a container to prevent her from reporting the attack. This rape occurred outside US jurisdiction. So when she wanted to sue KBR (which took over from Haliburton but essentially the same employer), they said that it should be in private arbitration.

For those that do not know what arbitration is, it is an outside of court body to settle disputes usually in commercial matters. If you feel that you were not given enough medical leave as it is your entitlement, you usually go to arbitration rather than the courts. It is also the best place to fight out patent, stockbrokers, partnership and employee pay disputes. The arbitrators, the “judges and the jury” in the arbitration are usually subject matter experts in the case matter.

This is not such an example. Rape is rape. It is not an issue that arbitration should handle. It is about a woman’s dignity and loss. Yes, this is not a rape case, but neither is it a case about the clauses of a contract. Any clause in civil contracts should not be about rape. I feel the same way about murder. We cannot have clauses in contracts that say that , “ If you are raped, you cannot go to the courts.” No! It is the right of the victim to take the company to court. These clauses are outright wrong, and now illegal!

Can you imagine if this was done in another company other than the company that Vice President Dick Cheney use to run? Can you imagine a lady being denied a right to sue Microsoft or Apple when she is raped by their employees and told to shut up about it (Arbritation is usually not public)? No way! There would be protests in the streets. If the Haliburton people feel that they are innocent, fight it out in courts!

I would like to ask Senator McCain, if Meghan McCain was in such a predicament, do you think you would be acting in the same manner? I would like to ask President Obama if Sasha or Malia were in this situation, do you think you would be shutting up about this like you are right now. If James Leigh Jones was related to someone of power, do you think we would be having this discussion now?

What has our country gone down to? Are we really sold to the corporations and the lobbyist? Have we lost our marbles? How can some sections claim that homosexuality is immoral but not think twice about preventing a rape victim from having her day in court to seek compensation?

Shame on you, the 30 Republican Senators who think that rape is just another clause in the contract! Shame on the defense contractors, who would cover the rape up and not fight it out in courts! Shame on the Department of Defense, who actually want to suckle off the tits of their contractor and corporations rather than to protect the dignity of a citizen! Shame on President Obama for allowing all of this to happen!

I think this is an unforgivable mistake by the US Department of Defense and the Republican Senators that voted for it. President Obama should not be forgiven too, if he just keeps mum about it. Because in this case, silence can only mean consent.

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