Just to Summarize To This Point

In the last few days, relatively straight-forward thought has brought this writer to an interesting set of thoughts to have in one mind:

  • In digital security, attack beats defense pretty much every time, eventually.  Secrets are liabilities if they can’t be kept.  They can’t be kept.
  • Organizations that can’t protect secrets, every bit of our government beginning with NSA, most likely won’t tell us they have lost the crown jewels.  You did notice that it was Snowden who told us?
  • We already knew they couldn’t predict anything at all.
  • S&P says 60% of sovereigns will default. Global financial system is leveraged 37-1.  Sovereigns are the base.
  • A serious financial downturn will cause much hardship. Plans to handle those hardships must be far advanced?  If any, such plans are not mentioned.
  • Huge flows of money through the government organizes ecosystems to capture them.  Those change government, institutions and people.  Those change citizens.
  • The magic of transforming Putin from ex-KGB apparatchik to devil shows that forces completely independent of formal Constitutional-government power now control matters of war and enemies in the US.  Citizens have no say in those areas. Our military-sector needed an enemy to justify the F-35, quick it was such a lemon.  Presto, the enemy, cloven-hooven.
  • MSM doesn’t cover obvious questions, like why does NSA still exist?  It can’t read traffic if people take intelligent precautions and it can’t keep our secrets from the enemy.  Tell me again what use those incompetents are?  Big bad Chinese kids just ran off with another one of their databases.  Can NSA point to a single database in any government facility which they can KNOW has not been copied away?  Not, I think, if it has been connected to a network and allows any connections to be made to it.
  • If they are no defense of anything, of what use are they? NSA is a large net liability to the United States of America unless economic espionage and blackmail material are its actual use, with government-vs-government espionage the keyfabe for rube voters.
  • MSM doesn’t cover obvious questions about much of anything.  If bonds go to 5%, what happens to the budget of the United States?  What plans are being made to handle that budget problem?  What priorities will be spared, what functions cut?  Is that a possible reason the military needs a new enemy, the high probability of budget cuts?
  • Wonder how we suggest questions to MSM?  You would think we would all know that, if MSM was interested in what people here in the 99% thought.
  • Notice how only the strange Presidential candidate even comes close to addressing anything real?  MSM carefully doesn’t get the message that people are perfectly well able to separate out all the messages and are saying ‘Yeah, bits of reality.  Give us more.’ How many ordinary people would a reporter have to talk to before understanding that point?
  • Our military threatens war : General Breedlove, military head of NATO.
  • So the world is falling into a Greater Depression at the same time as the planet’s premier professional military, with a budget larger than the next 20 or so combined, escapes its constitutional control via achieving critical mass of spending.
  • If it was the old USSR, they could both pretend to have a Cold War for fun and profit.  Putin is probably too smart to trust at that kind of thing, so it is as real as our side can make it.  They are being idiots, risking our civilization for their stupid ideologies and fantasies of world domination. Have they ever been asked to justify world domination as a foreign policy goal?
  • That is not a positive sum game, why are we playing stupid games, that is not the way to build civilization.  What do they think their job is? Who gave those idiots permission to use high-risk, low-return strategies like that?
  • 2016, the world is threatened by another bunch of militaristic thugs.  Who evolved from the highest civilization on earth, just like the last few times. I wonder how many lifetimes this recovery will take?
  • Notice how you never hear the name Jesse Ventura, the one person with the stature, brains and experience to actually be an effective President.  He speaks like Ron Paul, has 7 NYTimes best sellers.  People like the guy, he works at being honest. If he got near the debates, nobody else would have a chance, and they know it.  So you haven’t heard his name in a long time, and won’t.
  • Wonder about how much we miss.  All of that is right out in the open, and is never discussed.  We cannot know how much is hidden, only that Snowdon’s revelations say it is big and important.
  • You say ‘fantasy’.  Your hypothesis, you defend it.  Meanwhile, consider the obvious evidence that NSA can’t keep secrets.  That is not a fantasy, the implications are quite profound, but never discussed.  Complete incompetents in every minor respect except the great technical achievement of having bugged all of the world’s networks.  Can’t use all of that information for anything useful, and can’t keep their own secrets.  But not a single one of NSA’s new powers have been curtailed in the slightest.  Its hold on American political culture grows with every phone call by anyone to a prostitute or bookie or girl-friend or boy-friend. Its hold on the world’s political operations grow with its databases.
  • Our supposedly-civilian CIA, FBI and other federal agencies are incestuous with the military.  That is happening via the military -> police transfers.  Wonder who initiated that?  We have a general command for our continental US of A, now.
  • 9-11 was America’s Reichstag Fire seems a good comparison to me.
  • All right out in the open, hardly a murmur from our ever-watchful MSM.  Magicians laughing at our wonder.
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3 thoughts on “Just to Summarize To This Point

  1. Thinkpatriot,

    I too was interested in the purported 37-to-1 leverage and 60% default estimates of S&P. Spending some time searching, I could not find those figures, however I did find an interesting paper regarding historic sovereign default rates: “Empirical Research on Sovereign Debt and Default” by Michael Tomz and Mark L. J. Wright (2012; 42pp). [Link at bottom]

    The paper is well written and information is clearly presented. There are a number of interesting sections including effect of gold standard on borrowing costs, attitudes of citizenry towards default, and access to debt market following default. Related to sovereign default figure 2 is particular interesting.

    “Figure 2 documents the occurrence of sovereign default through history. The solid line (left-hand scale) plots the proportion of borrowing countries that were in default on their debts to commercial creditors from the end of the Napoleonic Wars to the present… and reveals four episodes in which at least 30% of the worlds’ debtors (by number) have been in default, giving rise to the notion of a global default crisis. The first episode began in the 1820s, when a number of newly independent countries issued debt and immediately defaulted. The second episode, occurring in the 1870s, was associated with wars in Central and South America, followed by a fall in commodity prices. The third episode centers on the Great Depression, and the fourth is the global debt crisis of the 1980s.

    “The frequency of default is sensitive to the sample being analyzed. In our database, the unconditional probability of a borrower entering a default is 1.8% per year. This is similar to the 2% default probability that is a target for many calibrated models of sovereign default. However, this estimate averages over all countries, including many developed countries that have never defaulted. It also averages over time periods in which there was little borrowing and hence little incentive to default (for example, the Bretton-Woods system of restricted capital flows). If we restrict attention to countries that defaulted at least once, or look across all countries but exclude the years 1945-1980, the probability of default rises to 2.2%. The frequency of default also depends on how one aggregates events. Our method of aggregation produces a fewer number of longer defaults. Other methods generate much higher default probabilities. For example, Arteta and Hale (2008) record 100 restructuring episodes with commercial creditors by 30 countries over a 25 year period, resulting in a 13% default probability per year.

    “The fact that this moment of the data is sensitive to reasonable changes in the definition of default suggests that an alternative moment – one more robust to changes in definition – should be used to calibrate models of default. One possibility is the fraction of time debtors spend in default. Across the entire sample, debtors spend almost 19% of the time in default.”

    PDF download from the Chicago Fed:
    https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCAQFjAAahUKEwiYysXdxZPHAhUMgA0KHelbDuc&url=https%3A%2F%2Fwww.chicagofed.org%2F~%2Fmedia%2Fpublications%2Fworking-papers%2F2012%2Fwp2012-06-pdf.pdf&ei=etjCVZilF4yANum3ubgO&usg=AFQjCNG3xWPn0Yk7O2MF99yHuQGTxmDnPg&cad=rja

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    1. Bill,
      Thanks, good data.

      37-1 was my memory, but I am confident that I saw those numbers and much higher at a time when the Fed and other authorities were concerned about bank capital, this is an example : https://hbr.org/2013/10/culture-not-leverage-made-wall-street-riskier

      As for the 60%, I also didn’t see a link. I believe the world has not seen these levels of indebtedness, so projecting those rates forward may be low, things are nonlinear? 20% interest used to be normal, from what I read of medieval history. That alone isn’t the problem. It is the amount of debt that is rational to accumulate at near-zero rates vs the amount that can be handled later. Sorry, I restate the obvious often to be sure I still understand it. Once in a while a new thought emerges in the stream when doing so, but not this time.

      Lew

      Later, I find another :
      http://www.zerohedge.com/news/2015-08-18/only-date-unknown

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    2. I got back to thinking about this. I think it is easy to justify any number for the default rate of sovereigns by the connectedness of the world’s financial systems and interdependence of their manufacturing and business systems. Very many things have to work very well every minute of every day for the world to live in this system. The opportunities for interactions are literally infinite, and thus cannot be anticipated, only responded to. Failing systems do not maintain themselves well.

      Another blog topic, of which I have far too many, is a list of the very many things that are new to us as a civilization, nations, peoples, individuals. I think we have many traps around us, maybe we should have root-caused our epidemic of obesity, of young men going insane and shooting as many people as they can, our suicide rates, … We have no idea what is causing changes like that, nicotinoid insecticide problem with bees should have taught us about interactions, again and again interactions are key. So many chemicals, etc.

      We do not do those because they would reveal our institutions to have been coopted by hidden links and motives, that our political system scams citizens as a primary function, whatever good it does.

      Like

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