Market Meltdown

Like most citizens of the world who have the luxury to contemplate their country's economy, I've been wondering where all of the money went. I feel that I have at least a basic understanding of who is losing money and why. I understand why the mortgage market is broken. I understand why the banks are not lending. I understand why Federal Reserve Chairman Ben Bernanke and Secretary of the Treasury Henry Paulson's bailout plan is not working (and why it can't work). What I don't understand is where all of this money that has been lost has gone.
Or do I?
At every step of the loan process, someone was taking a cut. In most cases the money was quickly turned into bonuses for employees and management at the mortgage companies, investment banks and even the regular banks. Dividends were paid out to shareholders and invstors holding premium stock. But can trillions really been paid out? Probably not, but certainly several hundred billion dollars were.
So where is the rest?
I started thinking about a question that may be as important as where the money went, where did the money come from? The answer to this question might shed some light on the first question.
A lot of the money, hundreds of billions to trillions of dollars, was float between companies and individuals as credit. That's right, they just made it up. There wasn't any money being exchanged, there were only promises of money in the future.
The Federal Reserve system has put hundreds of billions of dollars into this part of the economy, this is also money that was just created out of thin air, though in some case government bonds were sold.
The third place that was funding the bubble (sub-prime, housing, stock market) was market speculation. Didn't you ever wonder how a barrel of oil that can be turned into a set number of gallons of gas lets say, that will function to move automobiles roughly the same amount of miles, can be worth $70 one day, eight months later $150 and six months after that $40? The same amount of gas comes from the oil. Cars using the gas can drive roughly the same amount of miles. The price fluctuation is all speculation. While this doesn't necessarily create money out of thin air, it does provide great motivation for the first two reasons I give to do it.
Now market speculation is not reserved to the oil industry, but occurs in every industry, with every agricultural crop and in most service oriented areas of the economy.
Who was it deciding that your house should double in value every ten years? That would be the speculators.

So, the money went to the fat cats and the businesses they run to be distributed to shareholders of premium stock certificates that were eligible for dividends. But, most of the money that has "been lost" was never there in the first place.
If people knew this, they might be more likely to stop panicking, so why wouldn't the Federal Reserve or any other part of the government, or any of the businesses involved tell them this? It would help the market settle out now, wouldn't it? Probably not. I think it would lead to a (greater) distrust of the above mentioned entities and individuals associated with them. It might even lead to people losing their jobs and companies going out of business, maybe even to reforms to keep this from happening again in the future.
Well, we can't have that, now can we?

Net Neutrality

"Net Neutrality" is probably the biggest issue facing the internet today. It is also one of the biggest issues facing free speech. But, most people don't know anything about it.
Net neutrality means that there is an even playing field for everyone in the online world. No one thing or type of thing (such as email) gets priority over anything else. For the most part, the internet has operated like this since the beginning and continues to up until the present day (though there are some slips already occurring). The greatest danger to net neutrality is two-fold, it is the large companies who own the infrastructure (companies with recognizable names like AT&T) wanting to create a tiered system of users and providers with those who pay premium prices getting their info shipped/received first; and the federal government who is doing little stop the erosion of net neutrality and in some cases is helping it along (we'll see that below).
Most people aren't quite sure what to make of net neutrality. It seems to be large companies arguing with other large companies about who should control the internet. In a recent article in the Oregonian (here), the reporter relates how a woman recently had her internet "capped" for excessive downloading. The thing is that the company (Comcast) will not tell here what the limit is, how close she is to the limit or how long she will have to go without internet as a punishment. And mind, she's a paying customer with an account in good standing.
The U.S. Congress has done little to address net neutrality. When it has come up for a vote, it can't get out of Senatorial committees. (here and here)
This is not to say that the federal government is ignorant on the topic of net neutrality. The Justice Department has weighed in on the issue. Why, you ask? They claim net neutrality will hamper development and prevent service providers from upgrading. (here) The Justice Dept rationalizes it's okay to have different classes of users because the U.S. Post Office does. (here) They have even gone so far as to tell the FCC to "not listen to consumer groups and companies like Google. (here) It's not like anybody can Alberto Gonzalez that he's doing a worse job, or that this might cost him that job.
Seeing how AT&T, Verizon et al, are Fortune 500 companies, I fail to see how they are being harmed currently by the tacit net neutrality that we currently enjoy. Heaven forbid that they can't get any larger - hmmm, shouldn't the Justice Department be more concerned about the telecom giants and whether or not they are violating anti-trust laws, than whether they will increase their profit margins by 10 or more percent? Oh, that's right, President Bush and his White House are buddies with the telecom industry. (here)

Wrestlers suspended for steroids

Yesterday, the only wrestling show in town, the WWE, suspended 10 as yet unnamed wrestlers for testing positive for steroids. (See this AP story.) Wow! I guess the only surprise here is that it was only 10 wrestlers. Had one of their own not just murdered his wife and child, the surprise would have been that they suspended anybody at all.
I've been watching wrestling off and on for over 20 years. (My wife is glad it's more off than on now.) As I've gotten older the wrestlers have gotten bigger and more physically defineed. I watched a relatively skinny little wrestler by the name of Hunter Hearst Helmsley, go from thin with a big nose, to being humungous, and dare I say, "buff". Is it any wonder that these guys are mad all of the time?
I want to know when they are going to suspend Vince McMahon? He's pretty cut- and he spends all of his time around wrestlers who are getting busted for steroids, and he uses the same doctors that have plead guilty to charges of supplying the steroids. As my mama always said, "If it walks like a duck, and talks like a duck..." Okay, so maybe my mom never said that - I might be confusing her with Groucho Marx, but you get my point.

Dear Richard Cranium

Dear Richard Cranium,

I saw you in your car today. You were so cool! You probably didn't notice me because you were thinking cool thoughts. I was the guy in the crosswalk. I just wanted to thank you for pulling your car right in front of me into the crosswalk so that I could see up close how cool it was. And that gesture I made as you pulled away, spinning your wheels so fast that they squealed and left black marks across the white lines, that was my decidedly uncool thumbs up. Being that I am not used to dealing with people as cool as you, I got my digits mixed up and didn't put my thumb up at all.
By the way, and this is rather bold of me to say, I am sure you have a very large penis. I can just tell by how cool you are and by how super-cool your car is.

I'm not worthy,
-Eric

Senate non-debate

It seems to me that this whole affair of whether or not to debate a non-binding resolution of disagreement with the President's planned 'Surge' of troops into Iraq is a bunch of hoowey. There, I've said it. Hooey.
The Republicans, love 'em or leave 'em, are very good at framind discussions. They have framed the proposed Senate resolutions announcing displeasure with the President's tactics as an issue of supporting our troops. As long as they continue to do this, they have the upper hand. Who could, or would want to, argue against the troops?
The key Democratic Party players are so caught up with the feeding frenzy that the 2008 Presidential race has already become that they have dropped the ball, pretty much across the board. Clinton, Obama, Byden, they are all too busy saying how they could do a better job to be able to do anything about the horrible situation that we are in. Throw in John Edwards calling for a complete withdrawal by the end of the year and Joe Lieberman (when did he become a Republican?) saying back the President at all costs, and it is one convoluted mess.
Here's an idea, instead of worrying about getting (re)elected, do something about the people dying in Iraq. Seriously. Get over yourselves.