The Blue Brain project was launched in 2005 and aims to reverse engineer the mammalian brain from laboratory data.
In particular, his team has focused on the neocortical column – repetitive units of the mammalian brain known as the neocortex.
“It’s a new brain,” he explained. “The mammals needed it because they had to cope with parenthood, social interactions complex cognitive functions.
“It was so successful an evolution from mouse to man it expanded about a thousand fold in terms of the numbers of units to produce this almost frightening organ.”
And that evolution continues, he said. “It is evolving at an enormous speed.”
Over the last 15 years, Professor Markram and his team have picked apart the structure of the neocortical column.
“It’s a bit like going and cataloguing a bit of the rainforest – how may trees does it have, what shape are the trees, how many of each type of tree do we have, what is the position of the trees,” he said.
“But it is a bit more than cataloguing because you have to describe and discover all the rules of communication, the rules of connectivity.”
The project now has a software model of “tens of thousands” of neurons – each one of which is different – which has allowed them to digitally construct an artificial neocortical column.
Although each neuron is unique, the team has found the patterns of circuitry in different brains have common patterns.
“Even though your brain may be smaller, bigger, may have different morphologies of neurons – we do actually share the same fabric,” he said.
“And we think this is species specific, which could explain why we can’t communicate across species.”
World view
To make the model come alive, the team feeds the models and a few algorithms into a supercomputer.
“You need one laptop to do all the calculations for one neuron,” he said. “So you need ten thousand laptops.”
Instead, he uses an IBM Blue Gene machine with 10,000 processors.
Simulations have started to give the researchers clues about how the brain works.
For example, they can show the brain a picture – say, of a flower – and follow the electrical activity in the machine.
“You excite the system and it actually creates its own representation,” he said.
Ultimately, the aim would be to extract that representation and project it so that researchers could see directly how a brain perceives the world.
But as well as advancing neuroscience and philosophy, the Blue Brain project has other practical applications.
For example, by pooling all the world’s neuroscience data on animals – to create a “Noah’s Ark”, researchers may be able to build animal models.
“We cannot keep on doing animal experiments forever,” said Professor Markram.
It may also give researchers new insights into diseases of the brain.
“There are two billion people on the planet affected by mental disorder,” he told the audience.
The project may give insights into new treatments, he said.
The TED Global conference runs from 21 to 24 July in Oxford, UK.
Not only is the English language one of the most complex languages on the planet; it is also one of the most verbose, awkward, and contradictory. That being said, here are the five most commonly misspelled expressions in the English Language.
Pored Over Texts, NOT Poured Over Texts
This one probably stuck with me the longest in terms of misspelled expressions but among the public it’s also one of the most misspelled expressions as well. Want to know what “pouring” over texts has to do with water. Absolutely nothing. While it’s easy to assume that one might pore over a document the way water pours over a surface, the two have nothing in common. In this case, “pore” means “to read or study with steady attention or application“.
Just Deserts, NOT Just Desserts
A lot of people think that when you say to someone they will get their just deserts, it somehow relates to a giant sundae you will get to eat and the other person won’t, but actually the expression “just deserts” relates to the way you’d spell an arid piece of sandy land. “Deserts”, however, can also mean “‘that which is deserved” from the Latin desiree meaning to get one’s come uppance. Don’t fall into this common trap.
When spelt “wreck” (pronounced reek) the general public believes to wreak havoc is synonymous with taking your car out on the highway and wreaking havoc on the road, and while “wreck” means to destroy or cause chaos it is used completely out of context. Havoc itself as a noun means chaos, destruction, and general disorder, but so does wreck when used as a verb. To be used beside one another would be a double negative, for example, to cause destruction to chaos, meaning in the wrong sense, to cause order. In the correct version, “wreak havoc” means “to inflict or execute (punishment, vengeance, etc.)“.
Free Rein, NOT Free Reign
“Free rein” is commonly misspelled because the term “reign” brings up several connotations of authority, rule, and power and thus giving someone free reign would be to give up one’s power. However, this expression is incorrect. The correct phrase lends itself to the old horse and buggie transportation. When naviagting a tricky slope drivers would give the horses “free rein” (as in the reins of a horse) to navigate the roads if the terrain were to become suddenly too tracherous, allowing the horses to circumnavigate the unweildy paths on their own accord and not the driver’s.
Moot Point, NOT Mute Point
Typically, a “moot point” is a point “of little or no practical value or meaning“, however, for many it’s become an argument raised that doesn’t go anywhere, so that it doesn’t support or go against the debate to the point where it doesn’t get heard at all, in other words, it becomes mute. However, the above is the actual correct term of the phrase.
During the July 15 edition of his radio program, CNN host Lou Dobbs devoted substantial airtime to the issue of President Obama’s birth certificate, asserting repeatedly that the president needs to “produce” it. Dobbs said that the birth certificate posted online by FactCheck.org “purporting to validate the president” has “some issues … I mean, it’s peculiar,” and stated that he wants to see a “long form” birth certificate, which he called “the real deal.” By contrast, Dobbs’ CNN colleagues have repeatedly debunked claims that Obama has yet to produce a valid birth certificate, calling them “total bull” and “a whack-job project,” and have characterized those who make these claims as “conspiracy theorists” who wear “tin foil hat[s].”
Dobbs also mentioned the issue of Obama’s birth certificate on the July 15 edition of his CNN television show. Referring to the document that FactCheck.org posted, Dobbs said, “It is, in fact, the so-called short form, not the original document. It is really a document saying that the state of Hawaii has the real document in its possession.”
Media Matters for America has noted that Dobbs has a history of pushing conspiracy theories and numerous falsehoods and distortions.
Dobbs’ radio show
During his radio program, Dobbs stated: “[S]hould he produce his birth certificate — the long form, the real deal? Should he be a little more forthcoming? … What is the deal here? I’m starting to think we have a — we have a document issue. Do you suppose he’s un — no, I won’t even use the word undocumented. It wouldn’t be right.”
Dobbs later stated that when examining the birth certificate issue, at first he “thought, ‘Here we go with the lunatic fringe. This is a bunch of quackeroos going after him.’ ” However, Dobbs said he now believes that there are “some issues here that should be really resolved” with Obama’s birth certificate.
During his program, Dobbs repeatedly faulted Obama for what he said was Obama’s failure to definitively answer questions raised about his birth certificate:
* Dobbs stated: “The first thing is to determine whether or not his birth certificate is valid. And what I don’t understand is why that has not been released and given over to the public record.”
* After a caller said “something doesn’t smell right” with Obama, Dobbs said that the “way to get rid of those odors is always just open the windows and let the sun shine in. And all we need here is a doggone document, but for some reason the president doesn’t want to release that.”
* Dobbs said that in contrast to efforts undertaken by Sen. John McCain “to determine that he met the standard of natural-born citizen,” there is “absolutely, you know, no effort to do so on the part of Barack H. Obama. Nor, as also our callers have pointed out, this president would not release his medical records. And the national media seemed to be fine with that, whereas they probably would have eviscerated John McCain for failing to do so.”
* After a caller theorized that Obama is rushing through programs because Obama “knows what’s coming” with regard to the birth certificate lawsuits, Dobbs said: “Certainly your view can’t be discounted at this point, because this president refused to provide the documentation that would settle all of the controversy here.”
* After a caller said she initially thought the birth certificate controversy was “the dumbest thing ever,” Dobbs replied:
DOBBS: Well, it is a dumb thing. I think we have to all admit this is a dumb thing either way, because, I mean, I can’t understand why the president wouldn’t just move to get this stuff out of the way. Show the documents, get it done — I mean, he — think about it.
Dobbs also claimed that a soldier questioning Obama’s citizenship “should be taken seriously. There are real questions here that need to be answered” and “reasonable people should be interested” in the birth certificate issue:
DOBBS: I mean, because I got to be honest with everybody. When I started looking at this and the lawsuit — Orly Taitz his attorney, for Major Cook, when he — you know, I thought this is kind of peculiar. But I thought we should find out what’s going on because, you know, it’s a lawsuit — a major who is — he is, by the way, a combat veteran. Some people in the media have called him a coward; they are fools for doing so. But they’re fools, anyway; it isn’t this one instance that makes them fools.
This is a man who should be taken seriously. There are real questions here that need to be answered. And people talk about, quote-unquote, the lunatic fringe are the only ones interested in this, and it turns out that reasonable people should be interested, and reasonable — excuse me — reasonable minds have to understand what’s going on. And this can be dismissed with one — the production of one simple little document, and that’s a birth certificate. It’s extraordinary.
During the show, Dobbs also repeatedly cast doubt on Obama’s birth certificate posted online by FactCheck.org, saying that it is a “peculiar little document” that has “some issues.” In the first hour, Dobbs hosted Temple Law School professor Peter J. Spiro, who said that there’s “absolutely no doubt that [Obama is] eligible to be president of the United States.” Dobbs replied to Spiro that he has “got the problem that other people looking at the only document that’s available say, ‘Wait a minute,’ ” to which Spiro replied:
SPIRO: I’m not sure what the “wait a minute” is about. I think what’s fueling these theories is the counter-factual of if he had been born in Kenya, under the citizenship statute as it was then written, he would not have been a citizen at birth.
DOBBS: Right.
SPIRO: So that gives these theorists something to work with.
DOBBS: Right.
SPIRO: Even though at the threshold there’s a basic factual problem with the theory.
Dobbs also said: “We have a certification of live birth that doesn’t have a signature or an attestment of any kind attached to it.” Spiro replied:
SPIRO: You know, I’m not an expert on Hawaii documents, but my understanding is that this is the real thing.
DOBBS: Right. No, no, I understand the same thing, too –
SPIRO: And that, you know, at this point, the claims are fringy enough that, again, in the absence –
DOBBS: My word exactly.
SPIRO: — in the absence of any proof to the contrary, he’s satisfied any burden of proof here.
Dobbs later said of Spiro to a caller skeptical of Obama’s citizenship: “I was sort of taken by the fact he declares President Obama to be a natural-born citizen without having looked at any of the real documentation that would make it so.” Another caller also asked Dobbs if he had seen the birth certificate online, and Dobbs replied that it is a “peculiar little document, this certification of life birth that everyone is purporting to validate the president” and “there’s some issues with this.”
Dobbs also dismissed the “certification of live birth” because it says “that this is evidence that another document exists somewhere at some place at some time”:
DOBBS: There’s some reason — there’s some reason that they don’t want to do this. I mean, I don’t know what the heck it is. But this whole — you and I agree no matter what you believe about this other stuff — we agree, do we not, [caller], that if we just looked down at a certificate of birth that had the signature of the doctor, the testament of the hospital, the name of the hospital, the seal, whatever, you know, that would be sufficient.
But what we’ve got here is a certification of live birth that says that this is evidence that another document exists somewhere at some place at some time.
Dobbs also hosted former presidential and Illinois senatorial candidate Alan Keyes and lawyer Orly Taitz. The Orange County Weekly described Taitz as the “queen bee of people obsessed with Barack Obama’s birth certificate” and the “the most controversial figure in the effort to prove that President Barack Obama is foreign-born.” Keyes has filed a lawsuit against Obama.
On the July 16 edition of his radio show, Dobbs was asked by a caller why Obama is “refusing to show his real birth certificate. What has he got to hide?” Dobbs replied:
DOBBS: Well, you know, that is the real question, isn’t it? I mean, why not just get this silly, you know, nonsense out of the way? I mean, let’s just say you put your birth certificate out there. You know, you have to present a birth certificate to get a passport. You’ve got to have a birth certificate drivers licenses in some places. We use birth certificates all the time. Why is there such a special need to keep that birth certificate out of the public eye?
Kathy, I think you’re asking a very important question. It gives the appearance he’s hiding something. I personally don’t think he is, but I also think it’s so silly of the Obama administration and this president not to just put it out there, get all the nonsense out of the way. It’s the smartest thing he could do.
Dobbs’ CNN television show
Dobbs discussed the Obama birth certificate issue on the July 15 edition of his CNN program, noting the remarks about the birth certificate by Cook, FactCheck.org, and the White House:
DOBBS: Well, new questions are raised about the president’s eligibility to be president. The latest from U.S. Army Reserve Major Stefan Cook, who refused deployment to Afghanistan. Cook claimed his orders were illegal because President Obama wasn’t born in United States, which makes him ineligible to be president and commander in chief. The major’s orders for deployment to Afghanistan were rescinded. An Army spokeswoman told us the major volunteered to go to Afghanistan for one year and could rescind his request at any time right up to his deployment. This is what the Army said: “Based on the fact that he no longer wished to serve on active duty and at the request of central command his orders were revoked on July 14.”
Now the major’s attorney is challenging the legitimacy of the Obama presidency in court. She joins a lawsuit by former presidential candidate Alan Keyes, who wants documentary proof the president was born in the United States. President Obama was born in Hawaii, according to state officials, and copies of his certification of birth — FactCheck.org, investigating those circumstances prior to the election, and they have a copy of what they say is the original birth certificate posted on their website. It is, in fact, the so-called short form, not the original document. It is really a document saying that the state of Hawaii has the real document in its possession. White House press secretary Robert Gibbs in May said Hawaii provided a copy of the birth certificate with the state seal that’s posted on the Internet.
Documentary proof needed to run by office, by the way, varies from state to state. The Federal Election Commission — you may be surprised to learn — does not require any kind of certification or proof of citizenship in running for president. They leave that to the states. And in the state of Illinois, for example, where President Obama first ran for office, proof of citizenship is not required for either the state Legislature or to run for Congress or for the United States Senate.
Dobbs’ CNN colleagues have debunked claims that Obama has not released a valid birth certificate
On December 9, 2008, CNN host Kiran Chetry said: “A New Jersey man claimed that Obama could not be sworn in because his father was from Kenya, therefore, a British subject. He claimed that because of that Obama is not a natural born citizen. Obama’s birth certificate shows he was born in Hawaii.”
In a June 11 article, CNN.com reported that “online postings attributed to James von Brunn promoted the claim that Obama has no valid U.S. birth certificate, a debunked theory rejected by U.S. courts and refuted by a certified copy of his birth certificate from the Hawaii Department of Health.”
During the December 8, 2008, edition of CNN’s Campbell Brown: No Bias, No Bull, CNN contributor Dana Milbank said: “Now, for all those conspiracy theorists out there, do not lose hope. They’re plenty more cases in the pipeline. My favorite says that Obama himself was actually born in Kenya, adopted in Indonesia, and has a forged birth certificate. Now, the independent group factcheck.org, suggested if you’re going to pursue these theories, you might want to do so wearing a tin foil hat.”
On the December 5, 2008, edition of No Bias, No Bull, CNN senior legal analyst Jeffrey Toobin criticized the merits of a lawsuit questioning Obama’s citizenship:
BROWN: So, before we get into the I guess how on earth this ended up potentially going before the Supreme Court, just explain the merits of the case, if there are any in your view. Is there any evidence at all to support this?
TOOBIN: Well, you know, I’m a lawyer. So, I have got to be a little cautious in responding to this. So, this much I will say. This is a joke. This is ridiculous.
BROWN: OK.
TOOBIN: This is absurd.
BROWN: Don’t hold back.
TOOBIN: This is a whack-job project. And the reason there are lots of lawsuits is, they all keep losing appropriately and they are now winding up before the Supreme Court.
Look, there are two — let’s look at two documents. One is his birth certificate, which shows that he was born in Hawaii, in the United States.
BROWN: OK. Right. Which we have all known, right.
TOOBIN: And end of story. That’s it. He is eligible to be president.
And if you are not convinced by that, there is a newspaper announcement of his birth in — there it is — in Hawaii on — in August 1961. There is no merit to this lawsuit at all.
BROWN: So, if it’s total bull, which is what you are saying –
TOOBIN: Total bull.
PolitiFact.com and FactCheck.org have also debunked claims that Obama has not released a valid birth certificate or needs to release additional documents.
From the July 15 edition of United Stations Radio Networks’ The Lou Dobbs Show:
DOBBS: Well, later this hour I’ll be talking about the Alan Keyes lawsuit. Folks, this is something — I have to tell you. When David — when Major Cook, Stefan Cook — decided to resist his deployment to Afghanistan — we learned of it yesterday — on the basis that Barack Obama is not legitimately president of the United States because he’s not a natural-born citizen, I thought, “Here we go with the lunatic fringe. This is a bunch of quackeroos going after him.”
It turns out that the Army just rescinded the deployment order to Afghanistan for the major. Alan Keyes — we talked with his attorney — Major Cook’s, and Alan Keyes’ attorney, Orly Taitz — I mean, I’ve learned more here in the last day about natural-born citizenship, what documents are available for the president of the United States,and what aren’t — I mean, it’s truly crazy. And I decided we’d do something on this, you know, on this show, just to get it out of the way.
But you know what? This isn’t one of those things that goes away quite as easily as I — at least I thought. I thought we were talking about a bunch of folks that were on the left, or on the right, you know, the fringe that gets a little excited about, you know, tinfoil on their heads and that sort of thing. Well, guess what, folks? There are some issues here that should be really resolved. What’s really crazy about this is all the president of the United States has to do is produce a birth certificate. That’s all that has to be done, and it would be over. So, we’re going to be talking about that this hour. We’re going to be talking with you.
As a matter of fact, I want to go to the phones right now. I want to talk to Jay in Reno, Nevada. Jay, good to have you with us on The Lou Dobbs Show.
CALLER: Hey, Lou, it’s great to hear you. The reason — there’s a whole bunch of points that the media has overlooked. The only thing that the Obama people have is ridicule; they don’t have answers, they just make fun of anybody who asks a question. But, you know, his birthday is coming up — I’ll point out a few things nobody mentions. His birthday is coming up in a few weeks, and everybody in the media is going to be telling us he’s 48 years old. I would like to know how they know that.
DOBBS: Well, because it says that on the certification of live birth, which I have in my hands right in front of me, Jay. I have the actual document that says that this is a document certifying that there is another document.
CALLER: Shown to be fraudulent, but I’ll get to that in a minute. Orly Taitz’s going to tell you about that.
DOBBS: All right, but you don’t have a whole bunch of time now, partner. I’m not contracted with you for a long run here. Just gotta — gotta get to the point, if you will, Jay.
CALLER: What could be more personal than somebody’s tax return? Barack Obama gladly showed his tax return on April 15, but he won’t show his birth certificate. I would like to know the very simple question. Why is he spending millions of dollars in court cases all over America to prevent anyone from seeing it? His lawyers have even threatened people for even asking to see his birth certificate, not to mention all the other records that he refused to show.
DOBBS: Well, if they want to sue The Lou Dobbs Show here, if they want to sue me personally, come on down. But we’re going to keep talking about this until we get some straight answers. You know, I can afford a lawyer or two myself, you know. But I really want to know what’s going on. I have no idea what the real — what the reality is here, but I’m one of those morons who, when I look at something that says “certification of live birth” on FactCheck.org, I assume it’s certification of live birth, not — you know, that’s it.
FactCheck.org is a terrific website, and they do a wonderful job. But when I’m looking at a certificate of live birth that is certified to be a certification that there is another document that I haven’t seen, I get a little annoyed. Especially when John McCain, born in Panama, went to all of the trouble to make certain that the solicitor general rendered an opinion and a determination that he was a natural-born citizen, so why not do the same thing for President Obama? Produce a doggone long — so-called — I don’t even know what it a long-form birth certificate looks like — but just produce it and be done with it. I mean, that’d satisfy you, wouldn’t it, Jay?
CALLER: It certainly would, but he is going out of his way not to show that there’s a reason why he won’t show it. American people have a right — the people –
DOBBS: One of our callers, Jay, by the way, pointed out a lot of people in states all over the country have to produce their birth certificates to get a driver’s license, for crying out loud.
CALLER: Every single thing he’s done as president, if he is not eligible, will be deemed illegal and have to be undone. What a catastrophe.
DOBBS: Yeah, well that would be a little annoying, wouldn’t it?
CALLER: From spending us into oblivion with trillions of dollars that nobody should have ever spent –
DOBBS: Now, wait a minute. You know what I would really like to find out is that George Bush wasn’t a natural-born citizen, because that means we could get back about $12 trillion under his authorization that went into the economy. What do you think?
CALLER: I agree, but he would show his — you — George Bush, me, you, and everybody else would show a birth certificate.
DOBBS: Yeah.
CALLER: This guy refuses.
DOBBS: You got it. Well, I appreciate the call, Jay, there in Reno, Nevada. We’re going to take a quick break; we’re going to be taking your calls, we want to hear you. What do you think? Is President Obama — should he produce his birth certificate — the long form, the real deal? Should he be a little more forthcoming?
One of our callers, by the way, pointed out that he didn’t release — he didn’t release his medical records, either. Now isn’t that interesting? And hasn’t produced some other documents. What’s the deal? What is the deal here? I’m starting to think we have a — we have a document issue. Do you suppose he’s un — no, I won’t even use the word undocumented. It wouldn’t be right. We’ll be right back.
[...]
DOBBS: Professor, I have to be honest. When we started this, going — following the lawsuit by Major Cook, I thought, “My gosh, you know, this is crazy stuff. Let’s get this, you know, get into it and get out of it, and we’ll get the truth and we’ll be done.” This is not quite that easy, is it?
SPIRO: Well, I think it is pretty easy, actually.
DOBBS: All right.
SPIRO: I don’t think there’s much of a case here.
DOBBS: All right.
SPIRO: It’s pretty clear that Barack Obama was born in Hawaii in 1961.
DOBBS: Right.
SPIRO: And there’s absolutely no doubt that he is eligible to be president of the United States on that basis.
DOBBS: All right.
SPIRO: Now what’s –
DOBBS: Now you’ve done that, but you know what? I’ve got the problem that other people looking at the only document that’s available say, “Wait a minute.”
SPIRO: I’m not sure what the “wait a minute” is about. I think what’s fueling these theories is the counter-factual of if he had been born in Kenya, under the citizenship statute as it was then written, he would not have been a citizen at birth.
DOBBS: Right.
SPIRO: So that gives these theorists something to work with.
DOBBS: Right.
SPIRO: Even though at the threshold there’s a basic factual problem with the theory.
DOBBS: All right, here’s my problem as I look at it. And I respect very much the fact that, you know, you’ve declared him to be a, you know, a natural-born citizen. But my question is: Are you making such a judgment based on his birth certificate that we see on the Web?
SPIRO: Well, as far as I know, nobody has offered up any evidence to the contrary.
DOBBS: Correct.
SPIRO: So there’s no evidence that he was born in Kenya.
DOBBS: Right.
SPIRO: And so the best evidence we have is the birth certificate, which has been attested to by various state officials and others with knowledge of what birth certificates from Hawaii look like.
DOBBS: Right.
SPIRO: So there’s no reason to believe that he wasn’t born in Hawaii.
DOBBS: So, you — what you’re saying is then the burden of proof rests not with the individual or the statement that he is or is not a natural-born citizen, but rather on those who would disprove that he or she is?
SPIRO: Well, I think he’s supplied adequate evidence for his birth in the United States, that the burden has certainly shifted to others to prove otherwise.
DOBBS: All right. And here is part of — you know, I’m not sure how one does that. In this case, we’re talking about disproving a negative. But rather than going to the merits of this, I want to get back — well, first of all –
SPIRO: It’s not proving the negative; it’s proving an allegation that he was born in Kenya.
DOBBS: No, I understand what you’re saying, but I’m actually not saying that that would be the problem here. The first thing is to determine whether or not his birth certificate is valid.
SPIRO: Right.
DOBBS: And what I don’t understand is why that has not been released and given over to the public record. We have a certification of live birth that doesn’t have a signature or an attestment of any kind attached to it.
SPIRO: You know, I’m not an expert on Hawaiian documents, but my understanding is that this is the real thing.
DOBBS: Right. No, no, I understand the same thing, too –
SPIRO: And that, you know, at this point, the claims are fringy enough that, again, in the absence –
DOBBS: My word exactly.
SPIRO: — in the absence of any proof to the contrary, he’s satisfied any burden of proof here.
[...]
CALLER: The professor who was on is like a mouthpiece for the Obama administration.
DOBBS: Yeah, I agree –[caller] — I gotta say. Peter Spiro, he is the foremost authority on citizenship, but I was sort of taken by the fact he declares President Obama to be a natural-born citizen without having looked at any of the real documentation that would make it so.
CALLER: That’s correct. And the other thing is there have been lawsuits that have — that they have been attempted to force the legislators and the Electoral College to validate his eligibility. And it’s like you have said, there have been millions and millions of dollars spent to quash all of these lawsuits in every legitimate inquiry.
DOBBS: Yeah.
CALLER: And, you know, if it smells like a skunk, it probably is a skunk, and something doesn’t smell right with all of this.
DOBBS: Well — and the way to get rid of those odors is always just open the windows and let the sun shine in. And all we need here is a doggone document, but for some reason the president doesn’t want to release that.
[...]
DOBBS: First of all, we got to figure out what’s going on. You know, we heard Professor Peter Spiro, who’s a professor of law at Temple. He’s the foremost — one of the country’s foremost experts on citizenship. He says in his judgment that the president is a natural-born citizen. I think most of us would say, as a matter of fact, that he is a natural-born citizen until proved otherwise.
David [caller], we have no proof that he isn’t a natural-born citizen, and what’s really frustrating here is that he seems to be resistant to the idea of proving that he is — that is, providing the full-form birth certificate. Why, I don’t know. What do you think?
CALLER: Well, all the lawsuits that he’s squashing — it’s possible, and probable, I think, that the president knows what’s coming.
DOBBS: Well, you know, the way you frame that — it is possible to say it’s probable, you know, as a matter of your opinion or mine, it doesn’t matter. You know, I think it’s improbable, you think it’s probable. The issue is we’re talking about it. Wouldn’t it be helpful if the president would simply set this aside? Because there’s a number of callers have said on this broadcast — you know, here is John McCain, 72 years old, running for president of the United States. He knows he was born in Panama, because his father was in the Navy and his mother was with his father in Panama, and he was born there. He sought out a ruling by the solicitor general to determine that he met the standard of natural-born citizen.
Absolutely, you know, no effort to do so on the part of Barack H. Obama. Nor, as also our callers have pointed out, this president would not release his medical records. And the national media seemed to be fine with that, whereas they probably would have eviscerated John McCain for failing to do so.
CALLER: Well, I think it’s probable. And I think that he’s rushing through all these programs through by whatever means because he knows, by virtue of all the lawsuits that are generated, that we the public, we the citizens of the United States, have a mission, and we don’t have to wait until the votes — the voting for 2010.
DOBBS: Well, you obviously are intent upon that. And, David, you know, we’ll see if you’re right. Certainly your view can’t be discounted at this point, because this president refused to provide the documentation that would settle all of the controversy here. David, thank you a lot for the call from Freeport, New York.
[...]
DOBBS: There’s some reason — there’s some reason that they don’t want to do this. I mean, I don’t know what the heck it is. But this whole — you and I agree no matter what you believe about this other stuff — we agree, do we not, [caller], that if we just looked down at a certificate of birth that had the signature of the doctor, the testament of the hospital, the name of the hospital, the seal, whatever, you know, that would be sufficient.
But what we’ve got here is a certification of live birth that says that this is evidence that another document exists somewhere at some place at some time.
[...]
CALLER: Good to hear you, Lou. I DVR your show every day; I watch it on television. I just found out you had this on your air, and I’m — this has been an issue on the blogs for over a year now.
DOBBS: Right.
CALLER: When I first heard about it, I thought, “Oh, come on, leave this guy alone. This is the dumbest thing ever.”
DOBBS: Well, it is a dumb thing. I think we have to all admit this is a dumb thing either way, because, I mean, I can’t understand why the president wouldn’t just move to get this stuff out of the way. Show the documents, get it done — I mean, he — think about it. Well, actually, when I sit here thinking about it, he did not release his medical records, did he?
CALLER: No medical records.
DOBBS: That’s right.
CALLER: He spent over a billion — million dollars to fight this. Why? McCain has shown his birth certificate. Do you realize to get my license renewed in Oregon I have to show my birth certificate?
DOBBS: You know what? This is really very interesting, isn’t it? I mean, because I got to be honest with everybody. When I started looking at this and the lawsuit — Orly Taitz his attorney, for Major Cook, when he — you know, I thought this is kind of peculiar. But I thought we should find out what’s going on because, you know, it’s a lawsuit — a major who is — he is, by the way, a combat veteran. Some people in the media have called him a coward; they are fools for doing so. But they’re fools, anyway; it isn’t this one instance that makes them fools.
This is a man who should be taken seriously. There are real questions here that need to be answered. And people talk about, quote-unquote, the lunatic fringe are the only ones interested in this, and it turns out that reasonable people should be interested, and reasonable — excuse me — reasonable minds have to understand what’s going on. And this can be dismissed with one — the production of one simple little document, and that’s a birth certificate. It’s extraordinary.
CALLER: That’s all we’re asking for. And have you looked at the birth certificate that is online?
DOBBS: Yes, I have. I’ve got it in front of me, as a matter of fact.
CALLER: Look at the verbiage. Does that look like ’60s verbiage for a birth certificate?
DOBBS: Sixties verbiage?
CALLER: The nationality of his father.
DOBBS: OK, under race?
CALLER: Yes.
DOBBS: Yes, African. Mother’s race: Caucasian. It’s peculiar, I have to say. But, you know, hell, I can tell you this, in a career in journalism and broadcasting, I’ve seen a lot of peculiar things that turned out to be just as true as they can be. And things that seemed as true as they ought to be were the phoniest son-of-a-guns in the world, so we’ll find out. We appreciate the call, [caller]. Thank you very much.
But this is a peculiar little document, this certification of life birth that everyone is purporting to validate the president. I think there’s some issues with this. I mean, it’s peculiar.
From the July 16 edition of United Stations Radio Networks’ The Lou Dobbs Show:
CALLER: I have a question; it has to do with why Obama is refusing to show his real birth certificate. What has he got to hide?
DOBBS: Well, you know, that is the real question, isn’t it? I mean, why not just get this silly, you know, nonsense out of the way? I mean, let’s just say you put your birth certificate out there. You know, you have to present a birth certificate to get a passport. You’ve got to have a birth certificate drivers licenses in some places. We use birth certificates all the time. Why is there such a special need to keep that birth certificate out of the public eye?
Kathy, I think you’re asking a very important question. It gives the appearance he’s hiding something. I personally don’t think he is, but I also think it’s so silly of the Obama administration and this president not to just put it out there, get all the nonsense out of the way. It’s the smartest thing he could do.
A few weeks back, American forces in Iraq pulled out from Iraq’s cities. There are still 130,000 U.S. troops in the country, but the move was seen as the first step towards a full withdrawal at the end of 2011. A friend of mine in Iraq, a 22 year old dental student named Saif, sent me an email today about how his country (and he) feels about the American decision.
I first met Saif in the summer of 2006 in the streets of Ghazalyia, a Baghdad neighborhood that had been devastated by sectarian violence. In April of 2007, during the worst of the civil war, his school was attacked by a sniper. The next morning, the bridge he usually walked over to get to school was blown up. Since that time, he and and his family have had to move to other neighborhoods on four separate occasions because of death threats.
Amazingly, he persevered in his studies, graduated from college, and entered dental school. He’s now in his second year of training. He’s managed to keep up his high spirits and sense of humor– and, as you’ll see, he also has something of a romantic inside him. He writes pretty good poetry, too. His email, which he said I could share, is below.*
Dear Mike,
The American pull-out from the Iraqi cities was a very hectic matter of discussion almost everywhere inside Iraq. Colleges, houses, streets, the simple coffee shops and even the barber shops were very busy analyzing the events of the pull-out and the way it will effect the Iraqi future.
The most common thing the one will hear most of the Iraqis saying is that the pull-out is just a showoff business, just for show. Most of the Iraqis believe that nothing will really change after it and everything will just remain the same. One of my friends said that he would never believe that the Americans will stay out of our cities for long . “You will see,” he said. “Soon we will see them crossing the roads and waving to us. ‘Viva the pull-out, they will say.”‘ I remembered what my friend said when I heard in the news that the Americans appeared in the city of Dialya last week.
The other day I was talking to my senior dental instructor about the American pull-out from the cities. I asked him if he has one specific word that may describe his feeling about it. “Bye” was the word. I wasn’t surprised that he didn’t say “Thank You.” Damien Rice was singing “Rootless Tree” in my MP3 music player that day. “Let me out … let me out … of this hell when you’re around,” Damien sang. The senior dentist smiled and said that he wanted to sing that song to all the American soldiers in Iraq.
I’m not sure if any of the people I know are nervous about the pull-out news, but what I’m very sure about is that my brother was very nervous when he heard that it would be a curfew on that day. “My friend’s birthday” he said, “Damn it . We were planning to celebrate it in a restuarant near Karradah…”.
Talking about that pull-out thing, the girl I used to love and write romantic poems to her decided to make a complete pull-out from my life. Her pull-out didn’t want me to take the full responsibility of my security! “ A good guy with a new fast car” is what she wanted, not a poem from Saif!
Now as a rotatory dentist in Al-Nasiriya city “130 Km south of Baghdad,” I have a few goals in my life. Some of them might be effected by the whole situation in Iraq… The worries about another period of sectarian fight… The worries about the coming elections and the effect of the results on my country… But it’s not something new. Iraq has always lived in a series of worries. Iraqi people are used to fitting their lives around that worried life. As soon as those worries came true, goals changed.
“The life here is anything but stable,” a taxi driver said.
Best regards,
Saif
*I edited the email slightly, mainly to formalize the punctuation.
Just six years ago, the web was dominated by one browser: Internet Explorer (), specifically Internet Explorer 6. Without Netscape to compete against it and the ability to bundle its browser with Windows XP, Microsoft experienced superior market share – up to 95% at the peak. Today though, we have far superior browsers like Firefox (), Safari (), Opera (), and Chrome (), as well as Internet Explorer 8.
So why is 15 to 25 percent of the world’s browsing still done in a browser created in the digital Stone Age (aka 2001)? As a coder, designer, and UI guy, it’s difficult to put into words how many extra man hours I and others have dedicated to make websites compatible with the outdated browser.
Despite the difficulty presented by IE6 though, the web’s done alright. But with the coming release of HTML 5, we’re about to hit a breaking point where innovation will be stifled if websites must continue to cater to this browser. Here’s what’s happening in the next few months and, more importantly, why we must force ourselves off IE6 if the web is to grow.
The Issue with Internet Explorer 6
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Yeah…Facebook doesn’t like IE6…You might be asking yourself two questions right about now: What’s so bad about IE6? And why do so many people still use it? The answer to the first question is relatively simple: Internet Explorer 6 is outdated technology in a rapidly-changing Internet landscape. Imagine trying to use the social web, Microsoft Office, iTunes, IM, your video games, and all of your desktop apps…with a computer from 2001 (20 GB of space, 256 MB of RAM, anyone?). It’s the same thing: a great deal of new web technology is simply incompatible with IE6. A short list of things IE6 does not support, of which coders probably know them all:
- CSS v2 (Cascading Style Sheets): This is the code that enables almost all design on the web. In other words, designers have to hack up websites just to make them load in IE6.
- PNG Transparency: A great deal of .png images don’t display correctly in IE6. It basically kills using them in design work.
- General Security: Just like not updating your virus software can get you riddled with spyware, not updating your browser can be a gateway to attacks. There are even code snippets that will shut down IE6. I won’t tell you what they are, but you can find them on Wikipedia. It’s unstable.
- Digg (), Facebook (), and YouTube () (soon): Both Digg and YouTube have announced that they’re cutting back on IE6 support. Facebook already gives you suggestions for better browsers if you try to log in with IE6. You won’t be able to Digg articles or browse YouTube via IE6 in the near future.
Other companies have cited IE6 as holding them back as well. 37Signals, the maker of some of the most popular web-based business apps around (i.e. Basecamp ()) very publicly cut support for IE6 because according to them, “continued support of IE 6 means that we can’t optimize our interfaces or provide an enhanced customer experience in our apps.”
Now, if you’re wondering why people still use the outdated IE6 browser, there are two primary reasons most people point to: the fact that it is the standard browser of Windows XP (which is still the most used operating system around), and the fact that many corporate IT departments don’t see the need to upgrade – and find upgrading to be too much of a hassle. Without a significant event like Google not loading in IE6, people have stayed content with their current browser.
Still, the web has somehow gotten by with these IE6-imposed limitations. However, there’s a new technology that will take over the web. It’s also one that IE6 will not be able to handle at all: HTML 5.
The Next Step: HTML 5
HTML (hypertext markup language) is the code that helps shape the world wide web – you’ve all probably used an HTML tag (especially if you blog) or played with HTML at some point. HTML 5 is the next revision of the HTML language, and the features that are coming with it are a doozy, especially since its core spec editors (Ian Hickson and Dave Hyatt) are from Google () and Apple respectively.
Google in particular is pushing it because it can really enhance the usability and possibilities of web development. At this year’s Google I/O conference, they presented some of the things it will be able to do. Some of the coolest:
- Video Tag: By tagging a video with < video >, you can embed a video straight through HTML. Because of this, you can really control the look and feel of the video.
- Audio Tag: The same thing as video, audio embedding becomes a lot easier.
- Time: The tag will help browsers recognize time in HTML pages. There’s also < meter > for numeric values.
- Drag and Drop: While there’s still wrangling on this point, with HTML 5 you will eventually be able to drag and drop files right on the browser. This is most notable for Google’s upcoming communication product, Google Wave (), a big reason why Google’s pushing hard for this.
- Local Storage: Web apps work just like desktop apps nowadays, except they can’t easily save work right to your computer. HTML 5 fixes that problem.
- Geolocation: With HTML 5, you should be able to make web apps that can determine your location and provide you more relevant information. With the rise of location-based mobile services, this is important.
- Canvas: The canvas HTML element allows for scriptable bitmaps. What that means is that you can create beautiful graphics or imagery on the fly within HTML, meaning the interface of many web apps can become a lot more dynamic and richer. Mozilla Bespin is a big project for code editing using HTML 5, one that – you guessed it – won’t work in IE6.
Like any good language, more functionality will be added to HTML 5 as time goes on. If you want to have a more complete overview of HTML 5, I suggest reading the IBM Technical Library, but the point is this: while old browsers will still work with websites in HTML 5, they will simply not get anywhere near the same functionality. And with more and more companies dropping support for IE6, its users are going to be left out.
IE6 Has Stifled Innovation Long Enough
We’ve sputtered on with the dead weight of IE6 since 2001, but we’re just now reaching a breaking point, and companies are starting to feel it. YouTube and Digg clearly believe that it’s not in their best interests to continue supporting the outdated browser and thus have put the word out about their plans to phase out support. More and more companies will take their lead as it becomes harder and harder to justify the cost of keeping a site running correctly in Microsoft’s old browser.
But looking forward, HTML 5 standards will enable the building of richer web applications. More and more of our lives are on the web, and our use of web apps like Facebook has skyrocketed. Google’s even announced Google Chrome OS, an operating system that will run web apps instantaneously because it is built on the browser. But projects as rich as Google Wave will not realize their full potential (or run at all) if they must cater to a browser that runs on outdated standards.
IE6 was fine enough for use in 2001, but for web apps to evolve and grow into tools that run just as seamlessly as desktop apps, the browser that requires the most hacks, time, and energy to make things work must be set aside. The only way at this point that people will upgrade is if their favorite web tools don’t work in IE6 and for new technologies to look forward to HTML 5, and not backwards to outdated technologies.
In short, we’re at a crossroads, and for us to get past them, IE6 must go away as a browser and as a concern for developers and users everywhere.
WASHINGTON (AP) — When it brokered the restructuring of Chrysler and General Motors, President Barack Obama’s auto task force repeatedly pledged that it would steer clear of running a car company.
But with both companies exiting bankruptcy with the federal government as a major shareholder, that promise will be put to the test as the task force shifts roles from negotiator to owner.
The government could face a number of pitfalls: It could be tempted to insert itself into the day-to-day operations or sway management if auto sales continue to slide and carmakers’ financial woes continue. Lawmakers may try to use the government’s ownership as a way to push their own interests, such as making more fuel efficient cars. And the administration will need to sell its stake as quickly as possible.
“I take them at their word that they don’t want to run an auto company, the question is whether they will get dragged into it,” said Martin Zimmerman, a University of Michigan business professor who studies the auto industry. “There is a significant chance that will happen.”
Appointed by Obama in February, the task force includes representatives of cabinet members and economic advisers. It is officially headed by Treasury Secretary Timothy Geithner and Lawrence Summers, the director of the National Economic Council. But much of the work was overseen by two senior advisers, Steven Rattner and Ron Bloom. Rattner stepped down last week, leaving Bloom as the leader.
Wielding power in public companies once thought unimaginable, the government panel’s efforts laid the groundwork for quick bankruptcies that helped Chrysler and GM emerge with smaller debt loads, reduced work forces and streamlined brands and dealer networks.
In the process, roughly $65 billion in government loans and aid was sunk into the two companies. Under the restructuring plans, the government now owns about 8 percent of Chrysler and 61 percent of GM.
Rattner stressed again last week that the task force plans to take a hands-off approach, saying that it wasn’t interested in “picking colors of cars.” But he noted that with such a large financial interest, the government would take a role similar to a large institutional investor.
“We have fiduciary responsibilities to the taxpayers to ensure that investment is well looked after. We will interact with GM, its management and board,” Rattner said.
Both companies face a brutal car market and numerous competitors seeking buyers in a depleted market. Auto companies are on pace to sell about 9.7 million vehicles in the U.S. this year compared with sales of more than 16 million vehicles in 2007. If the bleak conditions persist, it could increase pressure on the government to play a more active role.
Some supporters of the auto industry expect the task force to maintain its arms-length distance, crediting it with giving the two companies new life without inserting itself too much into the way Chrysler and GM conduct their business.
“They have the job to improve the foundations for restructuring without making decisions that require expertise about how you make a car,” said Rep. Sander Levin, D-Mich. “That’s the difference. How you manage is different than how you make a car.”
But critics worry that the task force has wielded too much influence and may do so again.
The plight of hundreds of shuttered auto dealers offers a window into the pressures the administration could face. GM and Chrysler are closing nearly 3,000 dealerships, moves supported by the administration. Key lawmakers including House Majority Leader Steny Hoyer, D-Md., oppose the action, saying it evades state franchise laws and will lead to the loss of tens of thousands of jobs.
“This whole notion is that some brainiac down at the task force came up with the idea that Toyota sells a lot of cars and they have less dealers and therefore we should make GM and Chrysler look like Toyota. It’s stupid,” said Rep. Steven LaTourette, R-Ohio.
The White House said Wednesday it opposed the attempts to restore the GM and Chrysler franchise agreements.
Gerald Meyers, former chairman of American Motors Corp., said the temptation to meddle with the type of cars the companies make, where factories are located, and who runs the automakers, may be too great for the Obama administration and Congress to resist.
“It isn’t in the DNA of the government to stay out,” he said.
For example, House Republicans have questioned GM CEO Fritz Henderson about the company’s decision to maintain a parts distribution center in the district of Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee. Frank had urged Henderson to keep the facility open. And the administration’s firing of GM CEO Rick Wagoner also looms large.
Administration officials said they want to dispose of the government’s ownership interests as soon as practicable. While the U.S. stake is much smaller in Chrysler — the company is now aligned with Italian automaker Fiat — there will be intense scrutiny on the government’s share of GM.
GM is expected to conduct in initial public offering in 2010 and its shares would need to grow in value for the government to break-even or make money.
“We are not trying to be Warren Buffett here. We are not trying to squeeze every last dollar out,” Rattner said before his departure. “We do want to do well for the taxpayers but the most important thing is to get the government out of the car business.”
The Congressional Budget Office has provided a pessimistic outlook for a full refund, estimating last month that only about $15 billion of the initial $55 billion to GM, Chrysler, its financing arms and suppliers would be repaid. The analysis did not include the $30 billion GM received to help it navigate bankruptcy.
Also unclear is how long the task force will continue to exist. Some lawmakers, such as Rep. Gary Peters, D-Mich., want it to tackle lingering problems of other segments of the auto sector, such as extending loans to auto parts suppliers that are struggling as GM and Chrysler cut back.
Rattner said that the task force will “inevitably get smaller” as it shifts to monitoring the federal government’s investment in Chrysler and GM.
Bloom was an adviser for the United Steelworkers union before coming to Washington, helping guide it through a similar restructuring of the steel industry. His former boss, union vice president Tom Conway, said he has a firm grasp of manufacturing issues. But he wondered how long Bloom would stay with the task force, especially now that most of the difficult negotiating is over.
“You get this thing done and signed off on, you get a new management team in there and you move on,” he said of restructuring deals.
John Cannon has been financing big real estate loans for $25 billion-asset Capmark Finance Inc. of Horsham and its predecessors since 1985, and he’s never seen business this slow.
“There’s nothing being bought and sold,” Cannon told me by phone from the vast Virginia headquarters of government-controlled home lender Freddie Mac, one of the few outfits still pumping millions into buildings.
Capmark financed $1.5 billion in apartment deals during the first half of the year, down by half since early 2008. Almost all this year’s lending was refinancing loans, funded by Freddie and Fannie Mae, and the U.S. Department of Housing and Urban Development.
“They’re the only viable lenders in U.S. commercial real estate right now,” and all they do is residential real estate, not offices or industry, Cannon said.
He’s seen slow markets before. The early 1990s, when the savings banks failed. But that “was a supply issue. You saw a lot of empty buildings. Now it’s a liquidity issue.” Banks aren’t lending.
He’s hoping things have hit bottom. Fannie and Freddie tightened credit sharply last year. Lately, they aren’t requiring quite so many escrow payments, Cannon said hopefully. “Terms are getting looser. Spreads are coming down.”
It’s not that loan rates have fallen. It’s the spread between what money costs and what Fannie and Freddie charge that tells the story, according to Cannon:
Back in the mid-2000s, loans were approved at less than 1 percent above the benchmark 10-year Treasury rate. That zoomed to 3.5 to 4 percent above the benchmark during last fall’s credit crisis, after the Bush administration took control of Fannie and Freddie. Now it’s around 2 percent, Cannon says.
But banks still aren’t coming back into the market. It’s not just that they’re shy. There’s also “the disconnect between buyers’ and sellers’ expectations,” Cannon told me. “Guys bought a building five years ago for $10 million. They don’t want to sell for $8 million.”
NJ to PA
Archer Daniels Midland Co., Decatur, Ill., says it’s closing its Glassboro cocoa plant and ending jobs for 53 workers there. The work is moving to ADM’s new 500,000-square foot plant in Hazleton, says spokesman Roman Blahoski.
Bernanke or Summers?
Democrats in Congress and the Obama White House are plotting to remove Federal Reserve Chairman Benjamin Bernanke and replace him with Obama’s chief economic adviser, Larry Summers, at the end of his term next year, writes veteran bank analyst Richard X. Bove of Connecticut-based Rochdale Securities.
Summers is the brainy Main Line native, Harvard economist, and ex-Treasury Secretary who’s trying to re-regulate the financial institutions he helped deregulate under President Bill Clinton, setting the stage for the current mess.
Bernanke or Summers – what’s the difference? “Mr. Bernanke has demonstrated a willingness to act to defend both the economy and the financial system. Conversely, Mr. Summers has written the bulk of the proposals to regulate the financial industry,” which Bove says “would dramatically restrict fund flow to the economy” and kill the recovery like the government did when it tightened credit rules too soon in 1937. (But when’s the right time?)
Bove credits Bernanke, ex-Treasury Secretary Henry Paulson, and FDIC chief Sheila Bair with “bold, innovative action” that salvaged the banks and prevented a full U.S. takeover. Bush and Obama at that time “did nothing.” Congress was “the proverbial deer in the headlights.”
Yet “the same people who were incapable of acting when there was a clear need for action will now make the decision as to whether the man who helped save the system should be removed.”
Bernanke is set to testify before the House banking committee next Tuesday. Expect Fed critics to ask how he’ll reverse the scary growth in the money supply without stalling the economy.
How the Wall Street giant used your money to make $3.4 billion in profits.
They will never admit to this at Goldman Sachs (they don’t really fess up to much over there at the Big G) but in the fall of 2008, just after the Lehman Brothers bankruptcy gave the world a lesson in systemic risk, Goldman, the world’s greatest risk taker, was finished too.
That’s right, it was toast. Finished. Kaput. Until, that is, the firm that was built on wheeling and dealing in some of the most esoteric investments the world of high finance had ever seen, needed a government bailout to stay afloat, which included $10 billion in cash from the Treasury Department (granted by its former CEO, then-Treasury Secretary Hank Paulson) and more importantly, full access to the Federal Reserve’s discount window to be a commercial bank.
Goldman Sachs, which was bailed out by the federal government, is now using the bailout to resume some of the same risk-taking activity that got it in trouble in the first place.
Goldman, of course, is a commercial bank like no other. You won’t confuse Goldman with the ol’ Bailey Building & Loan. It has no customer deposits—which are what the access to the discount window was first set up to protect—and you won’t be getting a toaster or a debit card from Goldman Sachs anytime soon.
But being a bank has its rewards. With full access to the discount window, Goldman can now borrow cheaply and massively from the Fed in a pinch, and because of that access, it can borrow more cheaply in the credit markets. It’s a loophole that has allowed Goldman to turn back the clock and once again resume much of its risk-taking activities, only this time it’s being financed by the American taxpayer.
There are, of course, many urban legends about Goldman and how it uses its clout in Washington and in the financial business (both Paulson and another former CEO, Robert Rubin held the Treasury secretary post) to advance its allegedly nefarious corporate agenda.
Recent reports have the firm gaming the energy markets, creating the dot-com bubble, and the subprime-debt crisis that took down Wall Street, and then for a time benefitting from its implosion when it “shorted” subprime-related investments, a trade that allowed the bank to profit from the downward spiral. (Hell, I’m sure there are people who also believe Goldman was somehow behind the swine-flu epidemic to corner the market on drug stocks.)
Some of these stories have a basis in fact and some don’t—I’ll leave it up to the reader to figure this out—but what is true is equally disturbing: Goldman Sachs, which was bailed out by the federal government, is now using the bailout to resume the many of the same risk-taking activities that got it in trouble in the first place.
The question I have, of course, is why is the Obama administration, which has decried corporate greed whenever it’s politically feasible, allowed Goldman all the advantages of a bank, when it is really a big hedge fund?
The Treasury Department won’t say and it’s obvious why Goldman is doing what it is doing: Money, and lots of it. The firm announced Tuesday morning that net income for the second quarter was $3.44 billion, while its biggest rival, Morgan Stanley, is likely to announce a quarterly loss.
And it all comes down to risk, or to be more precise, how much risk Morgan is willing to take on the taxpayers’ dime compared to what Goldman Sachs is now taking. Morgan Stanley’s CEO John Mack, chastened by the firm’s own near-implosion last year when it too was forced to become a bank, has radically reduced the amount of borrowing, or “leverage,” Morgan is taking in trading. People inside the firm say it’s difficult to meet client demands without borrowing money.
“We just can’t get anything done,” said one senior Morgan Stanley executive, speaking on the condition of anonymity. Borrowing to finance trades amplifies gains, but it also amplifies losses when trades go bad. During the first quarter of 2009, Morgan borrowed just $11 for every dollar it had in capital (by comparison during the Wall Street boom, firms borrowed as much as $35 for every dollar in capital), while Goldman borrowed a significantly higher amount—close to $15 for every dollar it has in capital. “Our leverage is the result of risk-taking on behalf of our clients,” Goldman spokesman Lucas van Praag says about the strategy.
And keep in mind this is only for the first quarter. Goldman’s second-quarter leverage is likely much higher given the fact that interest rates have remained remarkably low. Those low interest rates have had another benefit—it has allowed Goldman to make winning bets in the bond markets (bond prices rise when interest rates fall), the same place that decimated Wall Street in 2007 and 2008.
Of course, there are lots of reasons for Goldman’s success. The firm has amazing intellectual capital; some of the smartest people in the world of finance work there. It also knows how to game the system better than any firm on the face of the earth. Case in point: In mid-September 2008, when the world was crashing following Lehman’s bankruptcy, Goldman held $13 billion in highly risky mortgage bonds known as collateralized debt obligations. These bonds were insured by American International Group, which itself was about to go bankrupt.
Without that insurance, Goldman itself would have imploded because the bonds would have been marked down to just pennies on the dollar. The rescue of AIG was supposed to prevent a large-scale crash of the financial system, but it also prevented a crash of Goldman Sachs, which bought those crappy CDOs from Merrill Lynch, which was forced to find a buyer (Bank of America) because it too held the same sludge.
The Goldman purchase of the Merrill CDOs is proof positive that the geniuses at Goldman screw up like everyone else. And I don’t buy van Praag’s spin on the firm’s famous hedges that minimized its losses because the smart money in the markets didn’t at the time. Goldman’s shares were in a freefall, bottoming out at around $50 in the fall of 2008, compared to close to $235 just a year earlier.
Now with all the government help, Goldman is marching its way back up to $235 a share—trading at around $150 Monday—by embracing much of the same risk that nearly led to its demise. It would be nice, though, if the next time Goldman losses money taxpayers didn’t foot the bill.
WASHINGTON – Nine months into the fiscal year, the federal deficit has topped $1 trillion for the first time.
The imbalance is intensifying fears about higher interest rates and inflation, and already pressuring the value of the dollar. There’s also concern about trying to reverse the deficit — by reducing government spending or raising taxes — in the midst of a harsh recession.
The Treasury Department said Monday that the deficit in June totaled $94.3 billion, pushing the total since the budget year started in October to nearly $1.1 trillion.
The deficit has been propelled by the huge sum the government has spent to combat the recession and financial crisis, combined with a sharp decline in tax revenues. Paying for wars in Iraq and Afghanistan also is a major factor.
The country’s soaring deficits are making Chinese and other foreign buyers of U.S. debt nervous, which could make them reluctant lenders down the road. It could force the Treasury Department to pay higher interest rates to make U.S. debt attractive longer-term.
“These are mind boggling numbers,” said Sung Won Sohn, an economist at the Smith School of Business at California State University. “Our foreign investors from China and elsewhere are starting to have concerns about not only the value of the dollar but how safe their investments will be in the long run.”
Government spending is on the rise to address the worst financial crisis since the Great Depression and an unemployment rate that has climbed to 9.5 percent.
Congress already approved a $700 billion financial bailout and a $787 billion economic stimulus package to try and jump-start a recovery, and there is growing talk among some Obama administration officials that a second round of stimulus may be necessary.
This has many Republicans and deficit hawks worried that the U.S. could be setting itself up for more financial pain down the road if interest rates and inflation surge. They also are raising alarms about additional spending the administration is proposing, including its plan to reform health care.
President Barack Obama and other administration officials, including Treasury Secretary Timothy Geithner, have said the U.S. is committed to bringing down the deficits once the country has emerged from the current recession and financial crisis.
This one probably stuck with me the longest in terms of misspelled expressions but among the public it’s also one of the most misspelled expressions as well. Want to know what “pouring” over texts has to do with water. Absolutely nothing. While it’s easy to assume that one might pore over a document the way water pours over a surface, the two have nothing in common. In this case, “pore” means “to read or study with steady attention or application“.
A lot of people think that when you say to someone they will get their just deserts, it somehow relates to a giant sundae you will get to eat and the other person won’t, but actually the expression “just deserts” relates to the way you’d spell an arid piece of sandy land. “Deserts”, however, can also mean “‘that which is deserved” from the Latin desiree meaning to get one’s come uppance. Don’t fall into this common trap.
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We’ve sputtered on with the dead weight of IE6 since 2001, but we’re just now reaching a breaking point, and companies are starting to feel it. YouTube and Digg clearly believe that it’s not in their best interests to continue supporting the outdated browser and thus have put the word out about their plans to phase out support. More and more companies will take their lead as it becomes harder and harder to justify the cost of keeping a site running correctly in Microsoft’s old browser.
