Is The iPad Becoming a Computer?

45 U.S. Military Bases Surrounding Iran

How Has The U.S. Exercised Its U.N. Veto Power Over The Years?

Paul Krugman On Charles Murray's "Coming Apart"

http://www.nytimes.com/2012/02/10/opinion/krugman-money-and-morals.html?_r=1&nl=todaysheadlines&emc=tha212

David Frum Debunks An "Important" New Conservative Book (can a book be bunked?)

This is a link to part 1 of a 4-part article by David Frum in The Daily Beast entitled Is the White Working Class Coming Apart?

http://www.thedailybeast.com/articles/2012/02/06/charles-murray-book-review.html

Frum and Murray have had some mutual animosity in the past, as Frum explains. But unfortunately, I think Murray's book, Coming Apart - The State of White America, 1960-2010, is going to be a conservative touchstone in years to come. David Brooks has written a column hailing it as the most important book of 2012 -- in early February. You may not have heard of Coming Apart before, but I think you will, from Randite conservatives deploring the liberals' destruction of "American values."

Wall Street: "They've Been Selling Air. To Each Other."

I couldn't get this article to link, so here it is, by digby at Hullabaloo:

Death rattle of the MOUS

by digby

I have no idea if this piece in New York Magazine about the Master of the Universe finally being brought down to earth is true (or temporarily true) but it's a fun, fun read, nonetheless:

With all the major banks unable to wager their own funds on big bets, there’s a growing sense that the money that was being made during the Bush boom won’t be back. “The government has strangled the financial system,” banking analyst Dick Bove told me recently. “We’ve basically castrated these companies. They can’t borrow as much as they used to borrow.”

Of course, described a little less colorfully, reducing the risk in the system at a cost of a certain amount of the banks’ profits was precisely what the government was striving for. All this has meant that Wall Street’s traders have found themselves on the wrong end of the market—a predicament that many of them have never seen before. Before the crash, when compensation slid, the banks risked seeing their top talent run for the doors to rival firms or hedge funds. Now, with a glut of hedge funds and an industrywide belt-tightening, bank chiefs are calling their star traders’ bluffs. “If you’re really unhappy, just leave,” Morgan Stanley CEO James Gorman bluntly told Bloomberg TV a few days after his bank announced its meager bonus numbers.

The article features lots and lots of boo-hooing about how hard they work and threats to move to Silicon Valley and be the next Zuckerberg. But this article makes the case that Wall Street itself is in a very serious retrenchment the likes of which have never been seen before. The insane compensation structure is over and the industry is facing the unpleasant task of figuring out how to make money legitimately again. Part of it stems from Dodd-Frank, which everyone knows was inadequate, but is potent enough to have made the banks change their structure in anticipation of the presumed effects. But the bigger factor is that it finally dawned on these guys that their model was unsustainable --- they were basically selling air. To each other.

And they don't really have anywhere to go:

Just a couple of years ago, traders faced with hardships like this would simply have jumped over to a hedge fund, and made more money with less hassle. In the boom years, banks had to keep star traders happy or they’d bolt to make even bigger money at a fund.

But recently, hedge funds have fared just as poorly as the banks. The bad economy plays a role in this, of course. But just as important is the fact the hedge-fund industry is almost as overbuilt as the housing and credit markets that drove its profits. In 1990, there were 610 hedge funds in the world. In 2000, there were 3,873; in 2011, there were 9,553, according to a report by Hedge Fund Research. All these funds are chasing fewer surefire trades. “When markets are panicked and there’s global risk fear, the markets move in the same direction,” one analyst at a Manhattan hedge fund says. “It’s just a lot harder to make money.” The easy, obvious plays are oversubscribed, which shrinks margins.

The rising tide of the real-estate and credit markets lifted all boats. But nowadays, while some hedge funds will still make ridiculous money, just as many will lose. One Leon Cooperman fund was down 12 percent over the first three quarters of last year, while a Bill Ackman fund was off 16 percent—not the kind of returns investors pay the hedge-fund premium for.

And as the world becomes deleveraged, money has been pouring out. In October 2011 alone, hedge funds saw $9 billion go out the door. The London-based Man Group, the largest publicly traded hedge fund in the world, saw its stock dive 25 percent over the course of one day in September, when it shocked the market by announcing that $2.6 billion had been redeemed by clients over a three-month span.

“We used to rely on the public making dumb investing decisions,” one well-known Manhattan hedge-fund manager told me. “but with the advent of the public leaving the market, it’s just hedge funds trading against hedge funds. At the end of the day, it’s a zero-sum game.” Based on these numbers—too many funds with fewer dollars chasing too few trades—many have predicted a hedge-fund shakeout, and it seems to have started. Over 1,000 funds have closed in the past year and a half.

Sounds like the party's over. And it rings true to me that the great howls of outrage at the alleged injustice of the nation treating these banksters with disdain were the screams of a dying breed. It never made sense to me. These were smart guys. Hugely successful, vastly wealthy. If they thought their scam had any life left in it they would have done a few mea culpas and laid low.

People will still get rich on Wall Street and before too long we'll see some fancy new financial tricks being brought into the market. They'll regroup. But not every frat boy with an Ivy league diploma will be getting a high six figure bonus for a while. And maybe they've figured out that treating the financial system like the Belaggio casino might not be the smartest move:

“Since 2008, what the financial community has done is kick the can down the road,” the senior banker added.“ ‘Let’s just buy us one more quarter and hope it gets better.’ Well, we’re now seeing cracks in that ability to continue operating with the structures that had been built up.”

Reality bites, even on Wall Street.

American Decline?

Not Fade Away - The Myth of American Decline, by Robert Kagan in The New Republic. Brought out from behind the NPR paywall by Brookings.

Computer Technology Meets Classical Music