And Still I Persist

CNet in the UK picked Vista as one of its ‘Top Ten Terrible Tech Products‘ — and the products on this list stretch back many years:

Any operating system that provokes a campaign for its predecessor’s reintroduction deserves to be classed as terrible technology. Any operating system that quietly has a downgrade-to- previous-edition option introduced for PC makers deserves to be classed as terrible technology. Any operating system that takes six years of development but is instantly hated by hordes of PC professionals and enthusiasts deserves to be classed as terrible technology.

Here’s how dead on these comments are: I’m in the market for one or two new computers (including possibly a new laptop), but I will not buy anything that comes with Vista pre-installed. At this point, I will likely delay any purchase until I can afford higher-end Apple hardware and set up dual-boot systems with WinXP (which I have several legal copies of).

I suspect I’m not the only one who feels that way.  Hat tip to Slashdot.  ..bruce w..

I could spend a lot of time talking about all the things wrong with the BCS football system — the death of traditional bowls, the constant changes and tweaks to the ranking algorithm, and the usually arbitrary and frequently unfair (if not insane) bowl matchups — but let’s let a professional sportswriter take it on:

The BCS works as well as Kim Kardashian in the lead role of “The Eleanor Roosevelt Story.” It is the Kim Jong Il of college football: dictatorial and isolationist. BCS cheerleaders figure if they ignore the logic of a playoff system long enough, maybe it will all just go away.

The truth is, the BCS is held together by rolls of duct tape and stubbornness. First the well-intentioned Bowl Coalition, then the Bowl Alliance, and now the Bowl Championship Series. And they still can’t get it right.

Just last week BCS administrators had to tweak their “system” for about the billionth time. The latest bandage was applied after it became apparent that the BCS might not have enough eligible at-large teams for its five games. Oops. The BCS works so well that the only undefeated team in the country, Hawaii, could finish the regular season 12-0 and still get squeezed out of a BCS bowl game. Meanwhile, two-loss Georgia, which didn’t even win its conference division or qualify for its league championship game, could conceivably play in a national title game. Huh?

Read the whole thing, and weep. The whole BCS system has done more to wreck college football than anything else I’ve seen in 30 years of watching it.

And by the way, I also agree with his comments about the Heisman Trophy. ..bruce..

Second post today about the SIV mess. To sum up what has happened so far, HSBC (one of the largest UK banks) has decided to move some of its funky SIVs onto the balance sheets in an attempt to build investor confidence. In response, Citigroup, who has many times more exposure to this garbage than HSBC, is starting to get pressure from investors to do the same.

From Yahoo News: HSBC Fund Bailout Raises Citi Questions

Citigroup said it has no plans to mimic HSBC’s move. So far, Citi has committed $10 billion in liquidity to the seven structured investment vehicles it manages on an “arm’s length” basis, and has kept them off its balance sheet — meaning Citi has not been counting the SIVs’ debt as its own.

That strategy may end up backfiring, though, some industry watchers say, because shareholders, fed up with remaining in the dark about how much risk the largest U.S. bank holds, are selling off.

“Citi is in what I’ll call a reputation race,” said Ed Ketz, associate professor of accounting at the Smeal College of Business at Pennsylvania State University and co-author of a new book called “Fair Value Measurements.” “It is competing with HSBC and others in terms of who can be trusted.”

If Citi changes its mind and put its SIVs on its balance sheet, it may be forced to take even bigger writedowns than the $8 billion to $11 billion it projected for the fourth quarter. The seven SIVs have, in total, about $83 billion in assets.

But if Citi doesn’t put its SIVs on its balance sheets and other banks do, it risks looking as if it is deliberately obscuring its holdings. Other companies that manage SIVs besides Citi and HSBC include MBIA, Rabobank, Standard Chartered Bank, Bank of Montreal and Societe Generale.

HSBC’s move also complicates Citi’s plans for a “super fund” to buy up hard-to-sell securities — an arrangement that does not appear to be attracting as many participants as Wall Street hoped. So far, only Wachovia Corp. has officially agreed to participate in the plan, after Citi, JPMorgan Chase & Co. and Bank of America Corp. announced the project seven weeks ago.

We have posted before on this blog about Citi and the Super Conduit. Amazing the pace at which things are now accelerating. The press and the government have worked hard to convince folks the problems of this summer were a bump in the road now well behind us. Indications are that things are now as bad or worse and trending down. More news about what 2008 will likely bring later this week.

Recessions are interesting things, the most interesting part of which is just how the world financial powers have been able to avoid any significant ones for quite some time. The minor one just after September 11th, 2001 was avoided by the central banks opening up the flood gates and swamping the economies with easy money. It may come to be proven later that this action laid the foundation for the mess we are entering now.

Today we are going to talk about Conduits and SIVs - Structured Investment Vehicles. If you are a normal person you don’t know about these things and probably could (and should) care less. But SIVs and Conduits are going to be shown at the end of the day to have been one of the prime movers in what could be a very nasty financial down turn.

SIVs are complex “deals” where a financial institution creates a “Structured Investment Vehicle” (SIV) that gathers up large amounts of investment money. In recent years many of these were formed to purchase bonds that were backed up by mortgages. They were held off the balance sheets, so gains and losses never appeared on the company profit reports. This means companies like Citi and Merrill are able to have these huge funds and never have to report the shareholders the liability they involve.

Let me shine a light on a nasty corner of this strange, opaque instrument: Moody’s says some SIV NAVs have fallen below 50%

What this strangely worded article means - many of these SIVs, that are not being reported to shareholders or the federal government, are now worth less than 100% of the money that was put in them.

Moody’s yesterday said that the average NAV across the SIV sector has fallen from 101% at the beginning of July to 71% at the beginning of November, and the shut-down of the CP market has led to realised losses in some cases.

What that means - $100 invested in these SIVs was worth $101 in July. Today that same $100 is worth $71, in some funds it is now worth less than $50. Now you may think it’s just fat cats losing some of their walking around money, and I am sure there is some of that going on. But we will come to find out as this unfolds that money from your insurance company, your pension plan, the bank that you have your checking account with and even your state government put huge sums of money into these looking to make some “easy money”. This is not a US problem, banks and investment firms across the world were in on these deals.

What is happening is money is evaporating out of the economy. When that happens there is less to invest in new projects, or maintaining old. This is the beginning of deflation in the money supply, and it’s one of the things that scares the US Federal Reserve, the Bank of England and the EU Central Bank the most. At present they are trying everything they can to slow its velocity. In spite of their best efforts, it is at present accelerating.

Why does deflation matter? Put it in personal terms. Let’s say you bring home about $2000 every 2 weeks as pay from your job. You find out this morning that you have to take a pay cut, and now only bring home $1500 every 2 weeks. For most people this would be cause for serious round of “what can we do without to make ends meet”? As a result your family would pull back even harder, worrying that you may have to endure another cutback sometime in the future. Your friends and relatives start to worry the same might happen to them, so they start cutting back and stockpiling ready cash - taking it out of the economy. As money either real or expected is removed from the economy, it hurts everyone eventually.

Freighters with sails — or, in this case, one very large sail that flies like a kite:

A kite the size of a football field will provide most of the power for a German heavy freight ship set to launch in December.

The Beluga shipping company that owns the 460-foot Beluga said it expects the kites to decrease fuel consumption by up to 50% in optimal cases as well as a cutback of the emission of greenhouse gases on sea by 10 to 20%. Interestingly, the ship will be hauling windmills from Esbjerg, Denmark to Houston, Texas.

The company that makes the kite for the German transport, SkySails, has made kites for large yachts but is targeting commercial ships with new, larger kites. And it has the ambitious goal of equipping 1,500 ships with kites by 2015.

The SkySails system consists of a towing kite with rope, a launch and recovery system and a control system for the whole operation. The control system acts like the autopitot systems on an aircraft, the company says. Autopilot software sends and receives data about the sail etc to make sure the sail is set at its optimal position.

Hat tip to Slashdot.  ..bruce w..