frankilin roosevelt

It's not about being liberal or conservative anymore y'all. That is a hype offered by the fascist whores who want to confuse the people with lies while they turn this country into an aristocratic police state. Some people will say anything to attain power and money. There is no such thing as the Liberal Media, but the Corporate media is very real.

Check out my old  Voice of the People page.

Gino Napoli
San Francisco, California
High School Math Teacher

Loyalty without truth
is a trail to tyranny.

a middle-aged
George Washington

1571 POSTS

January 2023
December 2022
November 2022
October 2022
September 2022
August 2022
July 2022
May 2022
April 2022
February 2022
January 2022
November 2021
October 2021
September 2021
August 2021
July 2021
June 2021
May 2021
April 2021
March 2021
February 2021
January 2021
November 2020
October 2020
September 2020
August 2020
July 2020
June 2020
May 2020
April 2020
March 2020
February 2020
January 2020
December 2019
November 2019
October 2019
September 2019
August 2019
July 2019
June 2019
May 2019
April 2019
March 2019
February 2019
January 2019
December 2018
November 2018
October 2018
August 2018
July 2018
June 2018
May 2018
April 2018
December 2017
November 2017
October 2017
September 2017
June 2017
May 2017
April 2017
March 2017
February 2017
January 2017
December 2016
November 2016
September 2016
August 2016
May 2015
March 2015
February 2015
January 2015
December 2014
September 2014
August 2014
May 2014
March 2014
December 2013
November 2013
October 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
August 2012
July 2012
April 2012
March 2012
January 2012
December 2011
November 2011
October 2011
August 2011
July 2011
June 2011
January 2011
December 2010
November 2010
October 2010
August 2010
July 2010
March 2010
January 2010
December 2009
November 2009
August 2009
July 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
June 2006
April 2006
March 2006
February 2006
January 2006
December 2005
November 2005
October 2005
September 2005
August 2005
June 2005
May 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004
September 2004
August 2004

Tuesday, 27 January 2009 at 2h 51m 14s

Woodward assesses the Bush Presidency

This comes from Bob Woodward, one of the 2 Washington Post reporters infamous from the Nixon Watergate years. One week ago, Mr. Woodward assessed the lessons learned from the Bush Presidency.

  1. Presidents set the tone. Don’t be passive or tolerate virulent divisions.

  2. The president must insist that everyone speak out loud in front of the others, even — or especially — when there are vehement disagreements.

  3. A president must do the homework to master the fundamental ideas and concepts behind his policies.

  4. Presidents need to draw people out and make sure that bad news makes it to the Oval Office.

  5. Presidents need to foster a culture of skepticism and doubt.

  6. Presidents get contradictory data, and they need a rigorous way to sort it out.

  7. Presidents must tell the public the hard truth, even if that means delivering very bad news.

  8. Righteous motives are not enough for effective policy.

  9. Presidents must insist on strategic thinking.

  10. The president should embrace transparency.

[SOURCE: Bob Woodward | Washington Post | 18 January 2009]

Hat-tip to Barry Ritholtz.

Wednesday, 21 January 2009 at 1h 16m 45s

The coming decade long downtrend

If History is any indicator, we are looking at 15 to 18 years of a downturn from now, the worst of which will be the first 8 or 9 years. So if we presume the beginning to be 2007, that means another 6 or 7 years hence before the unwinding completely unravels.

And notice that the recent dramatic rise over the last 17 years completely dwarfs the previous historical rises since 1871, by a factor of 2. This means the unwinding and longevity will be longer, hopefully not by a factor of 2. Or else, we are looking at potentially a full 12 to 15 years before the economy stabilizes.

Yes. It is really that bad. California is soon going to be out of money, unless money starts growing on trees or federal subsidization begins in another 2 months. The State Comptroller John Chiang has said California will run out of money by March or April if nothing is done. This is the guy who signs my paychecks.

Friday, 16 January 2009 at 2h 19m 36s

3 false notions

1) supply-side economics only allows financiers more money with which to make foolish investments

2) tax rates alone are not an effective tool to “spur economic growth”, and do not diminish or limit the available investment opportunities

3) throughout all of history there has never been such a thing as a market that existed without government setting the boundaries and regulating the transactions … because no one wants the alternative

I think the sad permissiveness of these false notions limits the scope of our economic understanding, inhibits our ability to comprehend our nation’s economy, and restricts or distorts the available policy choices.

Wednesday, 14 January 2009 at 1h 49m 5s

Another dollop of specious gobble-dee-goop

The following is the beginning of an opinion in the UK Telegraph by Rob Arnott (founder and chairman of Research Affiliates) and John Tamny (editor of RealClearMarkets). Both men are ideologues and charlatan's of economic theology.

Back in the dark economic days of the late 1970s and early 1980s, truly revolutionary change on taxation improved the economic outlook in both Great Britain and the United States.

With demand-driven Keynesian thinking having proved ineffective as an economic stimulant, classical thinkers possessing a greater affinity for the works of Adam Smith and John Stuart Mill successfully filled the gaping policy void. Nigel Lawson perhaps articulated the new/old thinking best when he noted Britain's fundamental economic defect "was not a shortage of demand but a failure of supply."

[SOURCE: Rob Arnott & John Tamny | UK Telegraph | 12 January 2009]

This is a high level statement of opinion. Yet it is an opinion that erroneously equates coincidental events without understanding or even acknowledging macro-economic developments. Raising or lowering taxes alone do not all by themselves stimulate the broad crescendo of economic developments that occur in any age: especially, in the absence of legitimate new investment opportunities (except buying and selling paper) or when self-interest demands forms of investment that are narrow-minded and monopolistic.

For instance, no increase or decrease of taxation would have changed the economic outlooks in 1252. Or 1811. Or 1888. Or 1935.

During the 1970s and 1980s, massive changes in consumer goods, consumer entertainment, electronic devices, and computer technology opened up a tremendous amount of investment opportunity. Videos created a video production industry, video stores, and VCR recorders. Ditto the cassette tape and the CD industry. Cable tv required electronic boxes that had to be installed, and cable programming boomed from 3 to 5 stations, to 30, 40, 80, and more than 100. Consumer goods created half of the food industry at the supermarket, and the aluminum can changed the the way soft drinks were distributed. Computers went from the size of a desk to sitting on a corner of the desk, and computers intervened everywhere in every single line of industry and service, from the assembly line of factories to the registers at retail outlets to the desks of accountants and journalists and college students.

Lax taxation did not create this historical situation, and high taxation levels would not have restricted what occurred at all. The changes to human culture was too tremendous.

If you buy something for $8 and sell it for $14 under the given tax conditions, raising taxes will increase the cost to $9, but then you can sell for $15. Notice that the increase gets factored into the cost. The resulting revenue is thus increased, and all salaries come out of revenue. Since the difference between sale and cost is still $6, nothing has occurred which changes the incentive of the business. This is true within a range of percentage rates. I am using a simple analogy as a metaphor for how taxation alone does not "open up", "release", or "create" investment opportunities.

This was known by John Stuart Mill during the 1800s. The same John Stuart Mill for whom (according to the Telegraph opinion) "classical thinkers" have a greater "affinity" by making insinuations quite antithetical to the original thinker's reality based ideas.

The median income since 1970 however has not changed, while larger and larger percentages of wealth accumulated to the top 0.5%. Like the galleons of Spanish gold, there was so much money and investment opportunity that no one paid attention to the unequal distribution of economic gains. Social costs increased on those who worked hard but earned less value from their wages. The rate of poverty has also increased. Government meanwhile created deficit spending and downsized investments in social and economic infrastructure.

Here's another silly statement.

But history says tax increases are rarely the revenue generators that they're presumed to be. As Adam Smith wrote, high taxes "frequently afford a smaller revenue to government than what might be drawn from more moderate taxes".

More importantly, history in both the UK and the US shows that the best way to increase tax revenue from top earners is paradoxically to tax them less. The percentage of federal revenues paid by the top 1pc of US earners rocketed (from 15 to 35pc) when the rate of taxation fell.


Notice how the putative "fact" at the end does not have a date, or a context. It's just rounded-off numbers. The ACTUAL history is that if you have a lot of loopholes and a higher tax rate, you can cut out the loopholes and decrease the tax rate a small amount (from 90 to 70 for instance) and raise more money through taxation. This is true even while the opinion's quoting of Adam Smith is akin to finding a passage in the bible that justifies your favored predilection. The statement is anecdotal.

But the silliness continues throughout the "opinion". Here is the last statement in the Telegraph "opinion" piece.

When all's said and done, there is no company formation and there are no wages without capital. Rather than creating false growth through wealth redistribution, the better, more-proven path would be to reduce penalties on work and investment for all. If this were done, the UK economy would boom due to increased productivity and any lack of consumption would quickly become an afterthought


The cycle of investment opportunity is fickle. It's occurrence is due to historical timing. All taxes do is distribute the burdens of society and economic infrastructure as a cost to government, because making social and economic costs as an individual burden is exploitative and (more importantly) terribly inefficient. We tax ourselves and pay the costs because the alternative will cost too much and tend to focus on short-term profit at the expense of long term development, when a long term horizon of 20 or so years is necessary. Private investors can't wait 20 years before showing a 2 or 3 % gain.

This is the real lesson, if there be one to learn, by Mr. Obama.

But the authors of the opinion in the telegraph article only presume a specious policy decision, and then use it to attempt limitations on the issue of government involvement and government investment spending. This is like presuming that flushing the toilet will inhibit free-thinking, so the discussion gets focused on how to contain the smell, and everyone wonders why the pile of smelly shit just won't go away. Sooner or later someone will have the courage to admit the need to flush the toilet. Instantly the false prophets will raise a howler about the ramifications. Free-thinking will go away, they will say, but not everyone will be intimidated by the backward stupidity.

Free-thinking can't go away. Flushing or not flushing the toilet is not going to inhibit or promote free-thinking, but it will create a pile of stinky manure. Likewise, investment opportunity or the lack thereof is not a function of taxation.

This notion of taxation being able to create investment opportunity in absence of the context and the economic conditions is, like the toilet example, inhibiting the understanding of how we function as a healthy, creative, effective society. Similar to the above analogy, if you apply the wrong solution to a misunderstood problem, all you get is a bigger mess.

Friday, 26 December 2008 at 17h 48m 40s

A pertinent anecdote

I didn't come up with this analogy, but the story is a relevant parallel to the economic situation between the United States and the Asian exporters that manufacture more than 95% of everything Americans buy.

7 people crash on a desert island, 6 Asians and one American. The 6 Asians are assigned jobs, one fishes, one hunts food, one collects firewood, one grows vegetables, one makes clothes and another builders shelter. The American’s job is to live in the shelter and consume the food and clothes. He feels good about himself - after all, the 6 Asians only have jobs because of him, he gives their day some purpose.

How long before the 6 realize they are better off kicking him off the island?

Sunday, 14 December 2008 at 16h 0m 40s

Math at work

Proof once again that math is an architecture built upon assumptions. If the assumptions are wrong, so is the math.

For instance, 2+2 = 4 and 2 * 2 = 4 are both equal to 4. But that is because multiplying by 2 means adding the same number twice. If however we built an entire theory upon this happy coincidence we might start thinking 10 + 10 = 10 * 10 , and be wrong by 80 digits.

Wednesday, 26 November 2008 at 1h 17m 53s

Financial crisis made easy

Click here for the webpage.


picture courtesy of Barry Ritholz at

Saturday, 22 November 2008 at 17h 48m 40s

GM corn related to Infertility

Dr. Jurgen Zentek, a professor at the University of Veterinary Medicine Vienna, reported that he fed one group of laboratory mice traditional corn and another group GE corn made by the Monsanto Company. The GE crop is bred to survive being sprayed by herbicide and to produce its own insecticide. The mice maintained their diets for 20 weeks, long enough to produce four litters of offspring.

Zentek found that the mice who dined on modified corn had fewer litters, fewer offspring, and more instances of complete infertility than those receiving a conventional diet. Not only that, but the infertility of the GM-corn-fed rodents became more pronounced with each passing litter.

I'll source it later.

Anything that uses a GM corn product, or a derivative of corn, is tainted. This includes the infamous High Fructose Corn Syrup. Quite possibly the modified proteins that the DNA produce to credit its own insecticide is having a negative effect on the hormonal systems of the mice. Now ask yourself, what are the long term implications upon the human hormonal systems from something humans ingest every single day for 40 years?

This could easily be determined with more research and study. I wonder how much of the "Breast Cancer" and "Prostate Cancer" research is doing here. Or is that well-advertised fund merely creating drugs for the drug companies to sell?

It is my belief that the rise in cancer rates due to hormonal dysfunctions is related to diet : eating quantities of processed food, of which for most processed foods (soda included) is nearly 90% composed of GM corn or GM corn derived products.

Thursday, 20 November 2008 at 2h 42m 3s

Comments from Stock traders

These are a series of quotes from the blog of Barry Ritholtz.

Thank you Barry.

No one can argue that the trend has been down. Volatility often signals a trend change. For how long, i don’t know.

~ ~ ~ ~ ~

It means that I can’t hold on to a position for a decent gain, and it means I get to practice trading through drawdowns. I hope this choppy period is over soon, but I’ll keep taking my setups as they come no matter what. All I know is that streaks happen, they’re unpredictable, and I sure like them better when they’re the winning kind!

~ ~ ~ ~ ~

I think nasty choppy trade like this indicates lighter volumes and itchy trigger fingers. There isn’t much conviction out there in terms of market direction. We are clearly waiting for some significant macroeconomic event to drive the market in one direction or the other. Of course I think that this will be some kind of reflationary event.

It’s hard to know what might be the trigger but it is clear that the $ will not go to the sky, and treasury yields will not go to zero. I have been seeing quite a lot of volatility in the long bonds, and that often presages a fall in price, whatever the instrument.

~ ~ ~ ~ ~

This is, in my experience, typical as markets progress toward capitulation. The tempo increases, as do the violence of the oscillations, until even the most dedicated traders are “thrown” from the horse or wisely decide to step back to the sidelines and let others’ blood be shed instead of their own.

Kinda like playing Space Invaders, or musical chairs.

We’re some time away from the end of this game, IMHO. We’re not seeing swings increasing in size … yet.

~ ~ ~ ~ ~

today the Dow was up 150, but the Nasdaq was flat, the Philly semiconductor index was down 2%, and the XLF was down nearly 1.5%. This baby’s going lower; however, I’d rather not initiate a new short position unless we get a significant rally (at least 8%).

~ ~ ~ ~ ~

The short interest data I have looked at recently tells me that hedge funds are not providing the liquidity they have in the past by shorting stocks. They are deleveraging and are basically hamstrung. They will get creamed with redemptions, as who will pay 2 and 20 for mutual fund type returns? The result is a market that has lower than capitulation volume with choppy trading. Also a market where no short squeezing can take place on a macro basis.

~ ~ ~ ~ ~

As leverage leaves, paper stays, creating relatively light volume. Programs are moving levels quickly, as correlation rises. Arbs can’t hold positions.

~ ~ ~ ~ ~

It’s bigger trouble than that because as equities continue to fall banks have less to loan. Why banks are all invested in each other I have no idea but it’s going to be part of what will cause the total collapse. The Asian banks are now taking it from falling housing. Each bank will take out the next. Who’s the next Lehman I have no idea. Puts are too expensive on banks.

~ ~ ~ ~ ~

Well, the market will go lower. It is simple. “Leverage” is another word for “Margin Financing”. When the “outsourcing” of computer risk modeling is allowed…. the end result is extreme leverage on the non-fundamentally sound derivative CD “Swaps” or “Insurance” if you prefer. You have to admit a great “Marketing” job was done all-around. Question(Thinking)…. If there were less people around (Population) when the Great Depression occured (Industrial Economy, People with the means/mindset to survive)……. Since there are alot more people now (Financial Economy) would it stand to reason that with a low unemployment level say @10 to 15% and our special American social system (Unemployment Benefits and the like) in place could this lower rate now be just as financially devestating as the Great Depression rate of @25%?? I think it might be. I think an economic belief is dying. Monatary policy has its uses, but, when the pendulum swings further in one direction(Forced by a belief) it will swing back harder in the other. (Chicago School). Heterodox is the only way to go. Understand the systems as if it were a living, breathing entity.

~ ~ ~ ~ ~

What I see in this is analogous to the screech when a mike gets too close to the speaker. Sometimes it is just unpleasant but it is sometimes destructive of the speaker cone or amplifier components if it is allowed to grow too loud or go on unchecked for too long. Even if not destructive, it is usually beneficial to stop the ringing so that the sound system can return to “normal” function (even thought the ringing is also a normal characteristic of such systems).

To correct the deafening screech, one must either move the mike away from the speaker (reduce the feedback coupling) or turn down the amplifier (increase the loss in the feedback loop) or change the time response (add delay) in the system.

If the analogy of amplifier feedback system analysis holds, in the economic feedback system of the stock market, to correct this ringing (price volatility), the system must have a loss and or delay introduced to prevent excessive instability. This solution is simple in concept but it is very difficult in the complexity of real world politics to make such an adjustment.

Thursday, 20 November 2008 at 1h 38m 23s

Grateful Dead quote

The wheel is turning and you can’t slow down,
You can’t let go and you can’t hold on,
You can’t go back and you can’t stand still,
If the thunder don’t get you then the lightning will.

-–The Grateful Dead , The Wheel