September 2008 Archives

GovTrack has a very cool map of Congressmen who voted "nay" on the bailout, projected so that all districts are equal in size.

A very even mix of red and blue, Central and Coastal.

The Corner quotes sources from Congressional offices who say that a huge majority of constituent letters are against the bailout.

Despite the announcement on Sunday that a bailout deal had been reached, I was pleased to see yesterday that the deal fell through. Good. The markets were down because people realized that the government wasn't about to pay $1 for assets that are probably only worth 50 cents. That's bad for the people who own those assets, but good for the taxpayers who were about to buy them at inflated prices.

Harvard professor Jeffrey A. Miron has written the best prescription that I've seen so far: the solution is bankruptcy, not bailout. I've been saying the exact same thing for weeks. Maybe I should be an economics professor?

The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company.

Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable.

In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. This "moral hazard" generates enormous distortions in an economy's allocation of its financial resources.

Thoughtful advocates of the bailout might concede this perspective, but they argue that a bailout is necessary to prevent economic collapse. According to this view, lenders are not making loans, even for worthy projects, because they cannot get capital. This view has a grain of truth; if the bailout does not occur, more bankruptcies are possible and credit conditions may worsen for a time.

Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen.

Further, the current credit freeze is likely due to Wall Street's hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents.

Just go read the whole thing. It's concise and exactly right on every point.

I think perhaps Barack Obama doesn't understand what the idiom means: "dying in vain".

Overall I thought Friday's debate was rather milquetoast. Both did fine, and neither had any major embarrassments. I agree with McCain's positions far more than Obama's, and I think he elucidated them well. I felt like Obama was deceptive and was trying his best to appear far more moderate than he actually is.

But anyway, "dying in vain". After they both whipped out their bracelets from mothers-of-fallen-soldiers Obama said this:

Sen. Obama responded saying, "I've got a bracelet, too, from Sergeant - from the mother of Sergeant Ryan David Jopek, given to me in Green Bay. She asked me, 'Can you please make sure another mother is not going through what I'm going through?' No U.S. soldier ever dies in vain because they're carrying out the missions of their commander in chief. And we honor all the service that they've provided. Our troops have performed brilliantly. The question is for the next president: 'Are we making good judgments about how to keep America safe? Precisely because sending our military into battle is such an enormous step."

If I were McCain, I would have jumped in and said something like this:

"Senator Obama, you just said that none of our solders has died in vain. If you don't think their deaths were in vain, then that means you think our men and women have sacrificed their lives for some good and noble cause. You think their deaths have accomplished something of immense value for our country. Would you please explain what you think that is? What have our soldiers accomplished that makes their deaths worthwhile?"

That question would have won McCain the presidency on the spot.

Once again our government finds a way to screw over people who acted wisely and followed the rules, reaching into our pockets to hand our money over to fools who borrowed or lent more than they should have.

Congressional leaders and the Bush administration reached a tentative deal early Sunday on a landmark bailout of imperiled financial markets whose collapse could plunge the nation into a deep recession. ...

The plan calls for the Treasury Department to buy deeply distressed mortgage-backed securities and other bad debts held by banks and other investors. The money should help troubled lenders make new loans and keep credit lines open. The government would later try to sell the discounted loan packages at the best possible price. ...

To help struggling homeowners, the plan would require the government to try renegotiating the bad mortgages it acquires with the aim of lowering borrowers' monthly payments so they can keep their homes.

So taxpayers, responsible homeowners, and people who were sitting out the bubble because they knew prices were too high get screwed.

The government buys up the bad loans and sells them cheaper than the banks were willing to, thereby transferring wealth to these failing companies to prop them up. Does anyone honestly believe that we're going to make a profit from these loans or the equity stake we get in these companies? Please. That's ridiculous. The loans are probably worth fifty cents on the dollar, so there's a lot of ground to make up before there's any profit.

Not only that, but people who bought houses they couldn't afford will now get their mortgages "renegotiated", so there's some free money for them, too. People who bought houses they could afford have to shell out money to help the idiots. Again.

My family works hard, lives frugally, any we deny ourselves many immediate pleasures to provide for our financial security. And the government just spits in our faces.

Way at the end of this excellent Politico article about the political logjam over the financial logjam is a nugget of good news that I haven't read anywhere else.

The cost debate illustrates just how nuanced the massive intervention will be. Paulson has often stumbled this week when trying to describe its intent, and the clearest voice has been Bernanke, a former college professor who casts the whole effort as an unprecedented experiment in “price discovery” that will add not just capital but also precious knowledge to jump-start the credit markets.

With the bursting of the U.S. housing bubble, mortgage-related securities are caught in a vicious downward cycle, commanding only “fire sale” prices, Bernanke says. The government purchases, through a series of novel auction mechanisms, will help the market value these assets, he says. And this could be the spark needed to get markets working and the economy’s engine turning over again.

This explanation is very different from the “bailout” imagery that surrounds the debate. And the great challenge for both sides has been to find some path in between these two poles — able to satisfy the anger voters feel toward Wall Street but also leaving enough room for Bernanke’s experiment to function.

"Bailout" makes me cringe, but I'd really like to learn more about this auction experiment. Reading these few paragraphs makes me much more optimistic. Why aren't the details of the plan being reported accurately?

"If we hit that bull's eye, the rest of the dominoes will fall like a house of cards. Checkmate."

- Zapp Brannigan

In case the casual observer of the world wasn't aware, the media in China is completely owned and operated by the Chinese government. As much as we Americans complain about the bias and shortcomings of our journalists, at least their reports aren't completely fabricated like this story about a "successful" space flight that launched before the rocket did.

BEIJING - A news story describing a successful launch of China's long-awaited space mission and including detailed dialogue between astronauts launched on the Internet Thursday, hours before the rocket had even left the ground.

The country's official news agency Xinhua posted the article on its Web site Thursday, and remained there for much of the day before it was taken down.

A staffer from the Xinhuanet.com Web site who answered the phone Thursday said the posting of the article was a "technical error" by a technician. The staffer refused to give his name as is common among Chinese officials.

Although, I hear that our media also pre-writes a lot of stories, like obituaries for old and important people. I guess just reporting the news is too old-fashioned.

With Alcee Hastings in the news again for attempting to rally blacks and Jews against Sarah Palin with some offensive rhetoric, it's worth remembering this Congressman's history.

ABC News' Teddy Davis Reports: Florida Democratic Congressman Alcee Hastings pointed to Sarah Palin on Wednesday to rally Jews to Obama.

"If Sarah Palin isn’t enough of a reason for you to get over whatever your problem is with Barack Obama, then you damn well had better pay attention," said Hastings. "Anybody toting guns and stripping moose don’t care too much about what they do with Jews and blacks. So, you just think this through."

Is Hastings comparing Jews and blacks to mooses? (Meese?) You decide for yourself what the heck he means.

While you're pondering it, don't forget that Hastings used to be a federal judge until he was impeached for bribery and perjury by a Democrat-controlled Congress. Yeah, and then the Democrats decided to put him in Congress (and on the House Permanent Select Committee on Intelligence!). Is it any surprise that Congress is a continual embarrassment to our country?

DEAR AMERICAN:

I NEED TO ASK YOU TO SUPPORT AN URGENT SECRET BUSINESS RELATIONSHIP WITH A TRANSFER OF FUNDS OF GREAT MAGNITUDE.

I AM MINISTRY OF THE TREASURY OF THE REPUBLIC OF AMERICA. MY COUNTRY HAS HAD CRISIS THAT HAS CAUSED THE NEED FOR LARGE TRANSFER OF FUNDS OF 800 BILLION DOLLARS US. IF YOU WOULD ASSIST ME IN THIS TRANSFER, IT WOULD BE MOST PROFITABLE TO YOU.

I AM WORKING WITH MR. PHIL GRAM, LOBBYIST FOR UBS, WHO WILL BE MY REPLACEMENT AS MINISTRY OF THE TREASURY IN JANUARY. AS A SENATOR, YOU MAY KNOW HIM AS THE LEADER OF THE AMERICAN BANKING DEREGULATION MOVEMENT IN THE 1990S. THIS TRANSACTIN IS 100% SAFE.

THIS IS A MATTER OF GREAT URGENCY. WE NEED A BLANK CHECK. WE NEED THE FUNDS AS QUICKLY AS POSSIBLE. WE CANNOT DIRECTLY TRANSFER THESE FUNDS IN THE NAMES OF OUR CLOSE FRIENDS BECAUSE WE ARE CONSTANTLY UNDER SURVEILLANCE. MY FAMILY LAWYER ADVISED ME THAT I SHOULD LOOK FOR A RELIABLE AND TRUSTWORTHY PERSON WHO WILL ACT AS A NEXT OF KIN SO THE FUNDS CAN BE TRANSFERRED.

PLEASE REPLY WITH ALL OF YOUR BANK ACCOUNT, IRA AND COLLEGE FUND ACCOUNT NUMBERS AND THOSE OF YOUR CHILDREN AND GRANDCHILDREN TO WALLSTREETBAILOUT@TREASURY.GOV
SO THAT WE MAY TRANSFER YOUR COMMISSION FOR THIS TRANSACTION. AFTER I RECEIVE THAT INFORMATION, I WILL RESPOND WITH DETAILED INFORMATION ABOUT SAFEGUARDS THAT WILL BE USED TO PROTECT THE FUNDS.

YOURS FAITHFULLY MINISTER OF TREASURY PAULSON

(HT: Randy Barnett.)

Bryan Wildenthal has the best proposal I've seen yet for federal intervention in the ongoing mortgage crisis. If there must be intervention, why not use taxpayer money to bail out homeowners instead of investment banks?

So, instead of the massive moral hazard -- and general unseemliness -- of putting taxpayer money on the line to bail out Wall Street banks and brokers at the top end of the pyramid, why not aim at the broad BASE of the pyramid?

The money is there. I mean really, isn't it funny how when political leaders and powerful interests like Wall Street REALLY need cash, they somehow find a way to pull it out of the federal government's [ahem]?
To put it more politely: They just stick taxpayers with the bill. ...

America's population is about 300 million. Divide by 4 (typical household size) and you get maybe 75 million households. Even that doubtless overstates the number of owner-occupied homes covered by bank mortgages, with a value less than, say, $1 million or so (we should exclude the very wealthy -- if the $5 million La Jolla mansion is about to be foreclosed, I say tough luck -- John McCain, of course, would make $5 million the cutoff, having suggested that anyone under that is middle class -- whatever). And remember, you have to exclude the homeless, renters, nursing home residents, all the dependents who live in each mortgaged home, etc.

So, maybe 50 million owner-occupied homes, of middle-class or lower value, with mortgages? Close enough for government work.

Divide $1 trillion by 50 million and you get $20,000 -- not to be sneezed at! Over two years, that could cut almost $1,000 off every single monthly mortgage check in America! That amount of mortgage relief targeted directly at the millions of American taxpayers and homeowners of middle incomes and modest means would be an ENORMOUS shot in the arm to the economy (dwarfing the piddly recent "economic stimulus" checks). And it SHOULD mostly solve a crisis supposedly rooted in overextended mortgage lending, and securities built shakily on same.

I like the idea because I'm a homeowner/taxpayer that didn't borrow more than I could afford to pay. Why should I have to bail out idiots who lost their risky gambles without getting anything for myself? Plus, it makes more sense to feed the money into the bottom of the system rather than the top.

I'm not sure how this recommendation will come across, but let me state it the way it popped into my head: if you want to sound smart and also discover a new way to approach every aspect of life, read everything you can by Nassim Nicholas Taleb. Start with his take on black swans in the financial industry.

Here's a neat new system for creating digital 3D models and textures from the real world using a simple flash camera (plus some neat software).

Creating 3D maps and worlds can be extremely labor intensive and time consuming. And ultimately the final result might not survive the close scrutiny of those expecting real-world emulations. A new technique developed by scientists at The University of Manchester's School of Computer Science and Dolby Canada, however, might make capturing depth and textures for 3D surfaces as simple as shooting two pictures with a digital camera--one with flash and one without. ...

First an image of a surface is captured without flash. Portions of the surface that are higher appear brighter, and portions that are deeper appear darker. The problem is that the different colors of a surface also reflect light differently, making it difficult to determine if the brightness difference is a function of depth or color. By taking a second photo with flash, however, the accurate colors of all visible portions of the surface can be captured. The two captured images essentially become a reflectance map (albedo) and a depth map (height field).

Pretty neat! Soon we'll have robots that roam the land, image everything, and build a stronger-better-faster-virtualer world for us all to enjoy in complete serenity.

(HT: NC.)

I hate being on hold, but even more than that I hate hold music. I like to leave the speakerphone on while I'm waiting, and hold music is distracting and irritating. It always puts me in a worse mood when I finally get through to an operator. I'd prefer it to be silent, with periodic beeps of some sort to let me know I'm still connected.

For a fascinating read, check out the reactions of primarily Jewish readers to the disinvitation of Sarah Palin from the anti-Iran rally. The rally organizers decided to disinvite Palin after Hillary Clinton refused to share a stage with her, and the reaction from Jewish rally supporters is almost uniformly against the disinvitation.

I've asked before and wondered for a long time why American Jews almost monolithically support the Democrats, but maybe that's changing.

The California housing market is finally regaining some liquidity as banks drop their unrealistic expectations and home prices fall.

Home sales in California surged 13.6 percent in August as a flood of foreclosures drove down prices.

The figures released Thursday by MDA DataQuick showed 37,988 new and preowned homes were sold statewide last month, up 13.6 percent from August 2007 but down 3.8 percent from July.

The firm said 46.9 percent of all homes sold last month were foreclosed properties.

That helped send the statewide median home price plunging 35.3 percent to $301,000 during the year ended in August.

A lot of banks were holding onto foreclosed properties because they didn't want to have to account for the loss by selling the house. As long as they held the property, they could imagine that it was worth the full value of the foreclosed mortgage. That made the banks' holdings appear larger than they really were.

Banks have apparently realized that these houses were never going to regain their past value and decided that they were tired of losing money on them each month, so they're starting to unload the properties at market rates. That will put downward price pressure on individual homeowners, but aspiring homeowners will come out as big winners as prices fall.

Happy Talk Like a Pirate Day!

Arrrrrrrrrrrrrrrrr!

Todd Zywicki, one of my favorite economists, has written a damning indictment of Congress. It makes me squirm.

One interesting aspect of the recent government bailouts has been the complete irrelevance of Congress. The operation and decision-making seems to be run almost entirely by the Secretary of Treasury and Federal Reserve. Congress appears to lack the ability, the will, and the decisiveness to play any role except spectator, as a handful of senior executive branch officials have nationalized major portions of Wall Street.

What is further interesting is that Congress is not missed in the slightest. No one is clamoring for a greater role for our elected representatives in dealing with these problems. I haven't heard anyone saying, "We really need to get Congress more involved in this. They'll know what to do." ...

Put more generally, Congress's ridiculousness has increasingly caused it to forfeit its status a co-equal branch of government. 40 or 50 years ago it might have been plausible to imagine Congress addressing important public policy issues like entitlement reform or health care reform (I'm not saying they would have done it, but it seems like it was more plausible then). Serious people were in the Senate then--Taft, Johnson, etc. Today, however, the idea that serious solutions to pressing social problems might originate in Congress is hard to suggest with a straight face.

Also fascinating: the People know that Congress is useless... that's why the branch's approval ratings are in the single digits. Zywicki doesn't suggest a way to fix it, but I think a good place to start would be to repeal the 17th Amendment.

(HT: Instapundit.)

Bill Hibbard grapples with transhumanity and the social contract and raises some provocative challenges. I especially like his attempt to define what greater-than-human intelligence would look like:

The most familiar measure of intelligence is IQ, but it is difficult to understand what a machine IQ of a million or a billion would mean. As is often pointed out, intelligence cannot be measured by a single number. But one measure of a mind’s intelligence, relevant to power in the human world, is the number of humans the mind is capable of knowing well. This will become a A practical measure of intelligence, as we develop machines much more intelligent than humans., is the number of people that a mind can know well. Humans evolved an ability to know about 200 other people well, driven by the selective advantage of working in groups (Bownds 1999). Now Google is working hard to develop intelligence in its their enormous servers, which already keep records of the search histories of hundreds of millions of users. As these servers develop the ability to converse in human languages, these search histories will evolve into detailed simulation models of our minds. Ultimately, large servers will know billions of people well. This will give them enormous power to predict and influence economics and politics; rather than relying on population statistics, such a mind will know the political and economic behavior of almost everyone in detail.

I hadn't considered such a social definition of intelligence before.

(HT: Nick.)

Michelle Malkin quotes a correspondent who explains the technical details behind the "hacking" of Sarah Palin's Yahoo email account. I think it's fascinating that the political crowd is now technically sophisticated enough to be interested in such an explanation.

Are we in the middle of a "Great Crash"? Better the middle than the beginning.

It is easy to change the financial system, I argued in my May 20 essay. The central banks can assemble on any Tuesday morning and announce tougher lending standards. But it is impossible to fix the financial problems that arise from Europe's senescence. Thanks to the one-child policy, moreover, China has a relatively young population that is aging faster than any other, and China's appetite for savings vastly exceeds what its own financial market can offer.

There is nothing complicated about finance. It is based on old people lending to young people. Young people invest in homes and businesses; aging people save to acquire assets on which to retire. The new generation supports the old one, and retirement systems simply apportion rights to income between the generations. Never before in human history, though, has a new generation simply failed to appear.

The world kept shipping capital to the United States over the past 10 years, however, because no other market could absorb the savings of Europe and Asia. The financial markets, in turn, found ways to persuade Americans to borrow more and more money. If there weren't enough young Americans to borrow money on a sound basis, the banks arranged for a smaller number of Americans to borrow more money on an unsound basis. That is why subprime, interest-only, no-money-down and other mortgages waxed great in bank portfolios.

As always, proper understanding seems to hinge on demographics.

Also note that Spengler wrote this a couple of days ago, presciently predicting the collapse of AIG.

Good morning, fellow AIG shareholders! If you're an American, you now own a chunk of the country's "largest" insurance company... not counting the debt obligations that make it insolvent.

The U.S. government seized control of American International Group Inc. -- one of the world's biggest insurers -- in an $85 billion deal that signaled the intensity of its concerns about the danger a collapse could pose to the financial system.

The step marks a dramatic turnabout for the federal government, which had been strongly resisting overtures from AIG for an emergency loan or some intervention that would prevent the insurer from falling into bankruptcy. Just last weekend, the government essentially pulled the plug on Lehman Brothers Holdings Inc., allowing the big investment bank to go under instead of giving it financial support. This time, the government decided AIG truly was too big to fail.

The U.S. negotiators drove a hard bargain. Under terms hammered out Tuesday night, the Fed will lend up to $85 billion to AIG, and the U.S. government will effectively get a 79.9% equity stake in the insurer in the form of warrants called equity participation notes. The two-year loan will carry an interest rate of Libor plus 8.5 percentage points. (Libor, the London interbank offered rate, is a common short-term lending benchmark.)

First, I say let these companies fail. Oh, I know, it'll be the end of the world! Really? One day after Lehman Brothers went bust Barclays wants to buy them. The financial system won't go poof if these companies fail... but a lot of our elites will be out on the street.

Second, that's exactly what should happen. Here's my suggestion for a bailout law: if your company is SO important that we have to bail you out to avoid a total collapse of the world economy (*cough*), then when we do so the top 1% of all earners go to jail. The CEOs get life sentences, and we can work our way down from there.

As you know, Jessica and I are having a baby in a few months, so we've been thinking about how we're going to invest in our kids' futures. Everyone at work is horrified when I tell them that we're not going to pay for our kids' collage. I know such a stance is evil and unAmerican, but hear me out.

1. People line up to loan money to college students; no one will loan Jessica and I money for our retirement. College loans are cheap, easy money with low interest rates and undemanding repayment schedules.

2. Our kids will probably be sick of my meddling by the time they leave the house.

3. There may be more efficient ways to invest in your kids... ways that most people don't think about but that can make an even bigger difference in their lives. For example, Jessica is planning to be a stay-at-home mom; there's an opportunity cost to that decision, and in the long run it will certainly be more expensive than paying college tuition.

When it comes to launching missiles in the Mommy Wars, Sarah Palin has nothing on Christopher Ruhm. On Thursday, the University of North Carolina, Greenboro, economist published a study showing that kids from high-socioeconomic-status families take a long-term hit when their moms work outside the home—at ages 10 and 11, they perform more poorly on cognitive tests and are also more likely to be overweight than those whose high-status mothers leave the workforce. ... "This comes down to a fundamental principle of economics: something has to give. We can't have it all," he says.

That's right. We think having a stay-at-home mom will be a bigger advantage for our kids than a stack of money would be when they turn 18.

If you can't clearly see the details, walking men appear to be coming, and walking women appear to be going.

Even when the team added some perspective cues to the models, to suggest a direction of gait, the perceived gender of the model still had a significant effect on the direction judged by the observers.

The team speculates that there might be evolutionary explanations for their results.

"If you see a male, but you don't have quite enough information to be sure if they're facing towards you or away from you," says van der Zwan, "it's probably safer to assume they're facing you, so you can get ready to fight, or for flight."

However, it might be more important for young children or infants not to misinterpret a female figure as facing them when in fact she's moving away.

"If you're young and you're not quite sure if your mother or female carer is facing you or not and she's walking, it's probably safer to assume she's leaving, because then you can get ready to follow her if you need to," he says.

(HT: MG.)

Video of the world's fastest firing gun, the Dillon M134.

Specifications and More Dillon M134 videos.

(HT: TP.)

Working in an office is so much fun!!!

EepyBird's Sticky Note experiment from Eepybird on Vimeo.

(HT: TechEBlog and RB.)

Jeremy Walker knows the Galveston area, worked in the Katrina recovery effort, and speculates about the impact of Ike.

There's no real doubt about how fast carbon-13 decays into carbon-12, but if you're going to use radiocarbon dating to estimate the age of dead biological matter than you need to know how much carbon-13 there was in the organism when it died. Apparently the carbon-13 estimates were wrong.

The principal indicator of the amount of organic carbon produced by biological activity traditionally used is the ratio of the less abundant isotope of carbon, 13C, to the more abundant isotope, 12C. As plants preferentially incorporate 12C, during periods of high production of organic material the 13C/12C ratio of carbonate material becomes elevated. Using this principle, the history of organic material has been interpreted by geologists using the 13C/12C ratio of carbonates and organics, wherever these materials can be sampled and dated.

While this idea appears to be sound over the last 150 million years or so, prior to this time there are no open oceanic sediment records which record the 13C/12C ratio, and therefore, geologists are forced to use materials associated with carbonate platforms or epicontinental seas. ...

It appears that records related to carbonate platforms which are often used throughout the early history of the Earth are not good recorders of the 13C/12C ratio in the open oceans. Hence, the work presented suggests that assumptions made previously about changes in the 13C/12C ratios of carbonate sediments in the geological record are incorrect.

"This study is a major step in terms of rethinking how geologists interpret variations in the 13C/12C ratio throughout Earth's history. If the approach does not work over the past 10 million years, then why would it work during older time periods?" said Swart. "As a consequence of our findings, changes in 13C/12C records need to be reevaluated, conclusions regarding changes in the reservoirs of carbon will have to be reassessed, and some of the widely-held ideas regarding the elevation of CO2 during specific periods of the Earth's geological history will have to be adjusted."

Unless I'm misreading the results (I'm no expert in this field) it appears that the new understanding of ancient carbon-13 levels means that much of the biological remains being measured are younger than previously thought.

It's hard to write robust software: computer programs are notoriously incapable of handling new, unforeseen situations. One of the primary purposes of artificial intelligence is to develop techniques that allow software to be as flexible as the human brain, to be able to make reasonable decisions in confusing circumstances with incomplete information. There are few more complex and confusing domains than financial markets, so it's not surprising that there are glitches in financial AI programs.

NEW YORK (Reuters) - Computers, unable to see the mold on an outdated UAL Corp (UAUA.O: Quote, Profile, Research, Stock Buzz) article, sparked confusion, a mass sell-off, and an emergency trading halt earlier this week that highlights the pitfalls of increasingly automated financial markets.

Shares in the parent of United Airlines plunged about 76 percent after a nearly 6-year-old news story on its 2002 bankruptcy filing appeared online on Monday.

UAL, which is no longer in bankruptcy, scrambled for a retraction and its stock later bounced back -- but for some investors, especially frequent traders, the damage was done.

The use of algorithms -- which allow computers to make decisions in fractions of a second -- appears to be a main culprit in the UAL case.

Experts said the automated programs were applied to both the reading of the outdated news story and the trading of shares based on that information.

Humans can make disastrously bad decisions too, of course, so we shouldn't be too quick to judge our artificial counterparts! The more intelligent our software becomes, the more prone it will be to human-like errors. Even if we do ever achieve human-level intelligence in a machine, there's no reason to believe it will be any more perfect or rational than our own intelligence.

(HT: Nick.)

I don't know where it will close, but this is the first time I've seen Intrade bettors give McCain a greater than 50% chance of winning the Presidency.

Tom Spaulding has the best take on the Obama-pigs-lipstick scandal.

Obama poked fun of McCain and Palin's new "change" mantra.

"You can put lipstick on a pig," he said as the crowd cheered. "It's still a pig."

"You can wrap an old fish in a piece of paper called change. It's still gonna stink."

"We've had enough of the same old thing."

... BTW, If McCain had characterized Obama's secretiveness regarding Ayers and Wright as "Trying to get the fried chicken recipe from Colonel Sanders", or described Obama's Marxist environmental programs as "Like watermelons...Green on the outside, Red on the inside", would that be simply using a "turn of the phrase" and would McCain not be attacked by libs?

But I think the McCain camp could have handled this smarter by not asking for an apology. Why not say something like "If Obama wants to call Sarah Palin a pig in lipstick then that's up to him. We don't think that's the kind of change that voters are looking for."

I'm not Catholic, but I'm very please to see that Catholic bishops are holding firm on the matter of abortion and not allowing it to be dismissed as a "private" matter.

The statement from Cardinal Justin Rigali and Bishop William Lori said Biden, who appeared Sunday on NBC's "Meet the Press," is the latest case of the U.S. Catholic hierarchy correcting a Catholic politician.

Asked on the program about when life begins, Biden said: "Look, I know when it begins for me. It's a personal and private issue. For me, as a Roman Catholic, I am prepared to accept the teachings in my church."

He added that while he believes life begins "at the moment of conception," it would inappropriate to impose that view on others in a pluralistic society.

The bishops said Biden was right to say human life begins at conception. But the church "does not teach this as matter of faith; it acknowledges it as a matter of objective fact," they said.

Abortion is no more a private matter than is any other homicide. Some may be justified by self-defense considerations (which the bishops would probably disagree with), but acting as if protecting a baby is a mere "imposition" of morals is absurd.

And David Harsanyi knows what pisses me off:

The feds will rescue anyone, it seems, except those suckers who dutifully mail their mortgage checks in on time every month.

I go to work every day, whether I feel like it or not. I paid my way through school. I take care of my own problems. Stupid me.

These reliable citizens, in fact, soon will be propping up the for-profit businesses of Fannie Mae and Freddie Mac (not to mention Bear Stearns) in the de facto nationalization of a huge chunk of the mortgage industry.

Stockholders of Fannie and Freddie, for decades, have profited from an implicit taxpayer guarantee on their business, while pretending that such a pledge didn't exist.

Well, it does. We know this because as a reward for a feeble job done, executives may walk away with $15 million in severance pay.

You? The bailout allegedly will cost taxpayers approximately $200 billion. And, as you know, federal projections are always on target.

I say: screw them. Let Fannie Mae and Freddie Mac collapse. Would the bottom fall out of the economy? Good. We'd recover in a few years, and we'd be wiser for it. What's more, the people who made such dumb decisions would never be trusted with anyone else's money again.

Instead, the government grabs a shovel and scoops money from my pocket and gives it to idiots.

The Left has completely lost it. Stick a fork in 'em.

Why is Obama sinking in the polls? Because the media is biased towards Republicans.

So what is this house advantage the Republicans have? It's the press. There is no more fourth estate. Wait, hold on...I'm not going down some esoteric path with theories on the deregulation of the media and corporate bias and CNN versus Fox...I mean it: there is no more functioning press in this country. And without a real press the corporate and religious Republicans can lie all they want and get away with it. And that's the 51% advantage. ...

But most importantly we should bring up re-regulating the media and who owns it and what that conflict of interest is a lot more. By pretending there's no conflict of interest we're failing to alert the public that they're being lied to or given a looking at a coin at the bottom of a pool slanted truth. Every time a pundit or elected official is on any TV news program it should be a polite formality to mention that GE has made such and such billions off the war in Iraq by selling arms or that Murdoch is a right-wing activist with a clear stake in who wins and who taxes his profits the least. Disney, GE, Viacom, and Murdoch -- all want profits and the candidate and agenda that will get in their way the least.

I mean, seriously. Seriously. There are people on the Left who actually believe that the media is biased in favor of Republicans.

That's insane enough, but just in case you aren't yet convinced we're in Bizarro-world don't miss the fact that self-described "liberals" see only one solution to this perceived bias: clamp down on free speech!

It's kinda sad, like watching a possum twitch after it's hit by a car. I can only hope that the remaining fragments of the Democrat party can regroup after November and come back in a few years with a newly rational political philosophy that doesn't depend on the lunatics that are their current base.

(HT: Gateway Pundit.)

VDH is right on the money! Good grief, please, stop nominating lawyers!

In the Democratic primary, winner Obama, runner-up Hillary Clinton and third-place finisher John Edwards were all lawyers. In 2004, both Democratic nominees, John Kerry and Edwards, were lawyers. Al Gore, who ran in 2000, left law school without a degree and went into politics. His running mate, Joe Lieberman, was a Yale-trained lawyer. Mike Dukakis, the 1988 Democratic presidential nominee, was a Harvard-trained lawyer and ran with lawyer Lloyd Bentsen.

In fact, every Democratic presidential nominee for president and vice president in the last seven elections -- except Gore who dropped out of law school to run for Congress -- has been a lawyer. ...

So, what's wrong with the Democratic nominee once again being a lawyer? After all, legal minds are trained to think precisely and evaluate both sides of an issue.

The problem is that lawyers usually do not run companies, defend the country, lead people, build things, grow food or create capital.

If this year Democrats were looking for populist candidates from diverse backgrounds and training who talked and thought differently from those of the past, then why didn't they nominate someone who was not trained in writing legalese and working the government legal labyrinth?

Lawyers are great when they're needed, but at this point they certainly don't bring a "fresh perspective" to Washington! The District of Columbia (277 lawyers per 10k residents) has almost 15 times as many lawyers per capita as New York, the most-lawyered state (20 lawyers per resident).

So yeah, skin color and genitalia are one dimension of diversity, but maybe it's time to think outside the lawyer-box. I guess when your only goal is to run for office so you can boss people around fix our broken country, it's hard to imagine any other path.

The gist of this article is that engineers are underpaid (who can argue?), but the salary statistics for dozens of other jobs are also quite interesting.

Milton Seidel -- or as I know him, Uncle Milt -- passed away a few days ago after stuggling with cancer and treatment for a couple of years. He was a great man, and not just because he was a grandfather-figure in our family but also because of the tremendous contributions he made to our country over his decades of service.

Much of what Milton accomplished is public record: husband, father, uncle, distinguished Korean War veteran, Assistant Director of the Treasury, world traveler. Among many other responsibilities, Milton was in charge of printing all paper money for the United States, and he was one of only a handful of engineers who knew the printing process from start to finish and could rebuild the system in case of disaster.

Beyond all that, he taught me to shoot. He taught me about conservatism. He demonstrated to me and everyone who knew him a tireless, uncomplaining work ethic. He took his responsibilities seriously and met them.

Which is not to say that Milton was humorless -- far from it! He was serious in business, no doubt, but he didn't take himself too seriously and was always quick to laugh at the vagaries of life. We laughed about politics, sports, whatever was in the news. He took joy in his family and in sharing his wealth of knowledge and experience.

My wife and I grew a great deal by observing his marriage to my Auth Katherine. They love each other deeply and without reservation. They've always been best friends, confidants, partners-in-crime, and a tremendous example of marriage to everyone around them. They've been an inspiration to Jessica and I that the joys we find in the early years of our marriage can last a lifetime.

So farewell Uncle Milt! Not forever but for a little while. I'm sure they've got tulips in Heaven.

Until McCain's selection of Palin I didn't think the 2008 presidential elections could get even more fun and exciting, but man, I was wrong! Even aside from the strong possibility of a Republican victory in November, this election season has been hands-down the most entertaining, fascinating, and brilliant that I can remember. That said, here's my recollection of past elections -- straight from my probably-faulty memory.

1988: I have a vague memory of seeing Dukakis in a tank, but my most vivid recollection is of a joke: Don't park your Bentson under a Bush or Quayle might Dukakis on it. This was the height of comedy for a politically engaged 10-year-old.

1992: I was completely shocked that Bill Clinton was able to defeat Bush the Elder, and even as I watch the results on election night I was sure that somehow whatever mistakes had been made would be rectified by morning. I mean, c'mon, Bush had just won a wildly popular war! I don't remember thinking about the breakage of "read my lips, no new taxes" at the time.

1996: I seriously thought Dole could win, but by about a month before the election I knew he wouldn't. Pretty boring election season. I remember liking Kemp as Dole's running mate, but now I don't know why. I also remember thinking that Dole's experience as a ski trooper made me think of James Bond, and that Dole should have been given more acclaim for that, because it was awesome.

2000: I never thought Gore had a chance. I really liked George W. Bush in 2000, and I was excited to vote for him. Al Gore was a robot, and I knew people were sick of Clinton and the Democrats.

2004: Howard Dean was amusing, but the election season was otherwise pretty boring. Bush cruised to victory once Kerry was nominated.

2008: The. Best. Ever. I wasn't excited about McCain or any of the other Republican prospects until Palin came on the scene. Now it's fair to say that I'm "energized".

I'm going to steal a letter written to Jay Nordlinger with a tale of Christian compassion.

Dear Jay,

I have an out-of-wedlock child. Unfortunately, the father of my son did not step up to the plate, as Levi seems to be doing. All but one member of my family were so ashamed of my situation that they ignored me for the entirety of my pregnancy and during the first few months of my son’s life.

I found acceptance and comfort where I never expected it. I’m not a particularly religious person, and at the time I attended a Baptist church only occasionally. But the members of this church took it upon themselves to take care of me. By “taking care of me,” I mean that they had a baby shower, called to check up on me, and, after my son was born, brought meals to my house. Stuff like that.

Not once did I feel I was being judged. I might not have the deep faith that those Christians do and sometimes am puzzled by some of the things they say they believe — but I become deeply uncomfortable any time I hear Christian-bashing. With them, there was (as you said) no shame, agony, or hiding under the couch.

Had to grab the letter, because, hey, I'm a Baptist! And yes, we do believe in right and wrong, but in my experience we throw a lot fewer stones than the Left does.

Once she got into it, Sarah Palin's speech was fantastic. She was funny without being catty, and strong without being screechy -- the anti-Hillary. There were several great lines in her speech, particularly the bit about how being a mayor is kinda like being a "community organizer" but with actual responsibilities, and she delivered her lines with confidence and power. I was grinning the whole time.

Hillary must be losing sleep over the possibility of running against Sarah Palin in 2012....

Additionally, Rudy Giuliani set her up brilliantly. His speech was spot-on, and it was evident that he was having a lot of fun with the crowd. Nice job, Rudy. Putting "America's Mayor" on right before Palin was a stroke of genius.

Half the time when I read one of Spengler's articles I think he's taken a good idea too far to be actually correct, but oftentimes he turns out to be right anyway. Here he argues that Barack Obama's insecurity has lost him the election.

Obama will spend the rest of his life wondering why he rejected the obvious road to victory, that is, choosing Hillary Clinton as his vice presidential nominee. However reluctantly, Clinton would have had to accept. McCain's choice of vice presidential candidate made obvious after the fact what the party professionals felt in their fingertips at the stadium extravaganza yesterday: rejecting Clinton in favor of the colorless, unpopular, tangle-tongued Washington perennial Joe Biden was a statement of weakness. McCain's selection was a statement of strength. America's voters will forgive many things in a politician, including sexual misconduct, but they will not forgive weakness.

That is why McCain will win in November, and by a landslide, barring some unforeseen event. Obama is the most talented and persuasive politician of his generation, the intellectual superior of all his competitors, but a fatally insecure personality. American voters are not intellectual, but they are shrewd, like animals. They can smell insecurity, and the convention stank of it. Obama's prospective defeat is entirely of its own making. No one is more surprised than Republican strategists, who were convinced just weeks ago that a weakening economy ensured a Democratic victory.

Spengler attributes the decision to deny Hillary the VP slot to Michelle Obama's hatred for the former First Lady -- a hatred Barack Obama could not resist given his own insecurity and his devotion to his wife. Perhaps. And perhaps the choice of Biden will indirectly cost Obama the election. We'll have to wait and see.

But, as always, Spengler's perspective is worth reading and pondering.

Along the same lines, Obama wouldn't go on Fox News because he was afraid of "unfair" coverage.

At a secret meeting with Barack Obama three months ago, Fox News Chairman Roger Ailes says, he tried to clear the air with the Democratic senator by saying that his organization was determined to be fair but would not be "in the tank" for Obama's campaign.

During the sit-down in a Waldorf-Astoria hotel suite in Manhattan that included Rupert Murdoch, the network's owner, Obama expressed concern about the way Fox was covering him. "I just wanted to know if I'm going to get a fair shake from Fox News Channel," Ailes recalled him saying.

"Senator, you're the one who boycotted us," Ailes says he replied. "We're not the ones who boycotted you. Nor did we retaliate for your boycott."

If Obama gets elected maybe he can carry around a giant hanky just in case Ahmadinejad or Putin is unfair to him.

(HT: Kiddington Oh! and JW.)

Looks like I was wrong, because the end of the world is obviously near.

I wrote my concerns about Sarah Palin as McCain's VP candidate earlier, but it's going to take a few weeks for the public to really get a feel for her as a person. Excitement is running high right now, but will the experience issue sink her like it failed to do for Barack Obama? We'll have to wait and see.

I believe that Kleinheider is correct in asserting that the Left doesn't understand the Christian conservative mind and is aggressively playing a losing hand by focusing attention on the unborn child of Palin's unmarried 17-year-old daughter (Bristol).

The Left will fight this battle as a political debate. They will argue that Bristol Palin proves their assertions about traditionalism. They will lay it out point by point. The evidence will be solid. And their case will make sense — in theory.

But this is not theory, and to a certain extent its not even politics, this is life. Steve Schmidt is not wrong when in reaction to the news he says, “Life happens.”

Life does happen. It happens again and again to people in rural America who go to church, work and pray hard. Everyday life happens. Despite their prayers, it happens.

The Left simply misunderstands the Cultural War because they believe that social and religious conservatives think they are perfect people. Rural, working class people know exactly who they are. The Left seems to think that they are somehow breaking the news to social conservatives that sometimes, even often, kids will have sex and get pregnant. Social conservatives know these things. They are not as divorced from reality as they sometimes get painted. ...

Conservatives know they are imperfect. Instead of embracing the imperfection and “giving up” they instead prefer to strive for something better.

The Left essentially "gives up" on morality by refusing to affirm standards that cannot be met. That's a critical difference between Christians and secular people. Rabid secularists crow when they catch a Christian in "hypocrisy" -- that is, failing to live up to the standards we espouse -- but they fail to comprehend that one of the core principles of Christianity is the certainty that we will fail. All of us. Frequently. But rather than doing what secularists do and lowering the bar so we can jump it more easily, we reaffirm the high standards and trust in God to help us leap higher next time.

As for the attitude towards Governor Palin, the early comments on this TalkLeft post asking when she'll drop out are fascinating. TalkLeft is a leftwing site with a primarily leftist readership, yet the first several responses to this post are incredibly supportive of Palin. Here are a few excerpts responding to the question "when will Sarah Palin drop out?":

I'm kinda thinking that she doesn't

I agree: not gonna happen

agreed- she will end up being a net plus

and all of the attacks on her and her family by the left are going to backfire. I am a liberal Dem and I am astonished that anyone is playing the experience card, when we have just nominatd the most inexperieced prez. candidate in 150 years. i can see the commercials alreay.

Right! Because even if Palin has far right views - she is REAL. And there is a HUGE shortage of real in politics today. And she has accomplished things, she has a lovely family - especially with the problems (because every family has problems), and she is strong. Obama isn't strong. He doesn't have passionate views on things. What are his opinions on things? Who knows? (Please don't tell me to go to his website to find out!) Neither does Biden or even McCain have stong opinions. They have been in Washington too long. Palin knows who she is. You may not agree, but she believes - and you have to respect that. Her views are not political, they are her life.

Palin won't ever drop out if Obama keeps this up..

Obama didn'd do himself any favors here.

Obama smiled and said Palin's town of Wasilia, Alaska had 50 employees. His campaign has 2500. The town's budget is about $12 million a year. His budget is 3 times that per month.

This is a level of excess which a seasoned politician, with any common sense, would keep to himself. But Obama sits there, and witlessly touts his CAMPAIGN'S superior manpower and financial prowess in relation to a small TOWN.

This episode of utterly tone-deaf braggadocio will, no doubt, end up in a GOP attack ad. Obama just doesn't get it.

And so on. It's quite amazing. Is the public impression of Palin already solidifying into "new and exciting" rather than "inexperienced token female"? If so, the elites in the media and both parties haven't gotten the memo yet.