Google needs customer service

Google is too important now to run without customer service:

Gordon's Tech: Reconsidering Google

... Kudos to this journalist for noting that anyone who fears losing their account won't use Google's obscenely inane security question, but if you don't answer the question then you have no hope of account recovery. (I've gone to my Gmail account and answered the question with a password-like string I now store with in my backed-up password database.)

I might upgrade our family domain just to get support services. That's not an option for my personal gmail account though. Google should offer a support service with enhanced user authentication procedures for a fee of $25 a year, and bundle it with an extra 5-10GB of storage.

If they don't do that, I'm going to have to reevaluate my Google relationship."

Charge for it, but provide the option. Bundle it with enhanced security (certificate stores? two factor identification options) and storage. $25 per single account, $40 for a family account, $50 (as now) for enhanced Google Apps.

Sarah Peron Cheney. America could do it.

The comparison to Eva Peron is inescapable. Now add Cheney ...

Dick Cheney, Role Model - Editorial - NYTimes.com

.... In Thursday night’s debate, Ms. Palin was asked about the vice president’s role in government. She said she agreed with Dick Cheney that “we have a lot of flexibility in there” under the Constitution. And she declared that she was “thankful that the Constitution would allow a bit more authority given to the vice president also, if that vice president so chose to exert it.”...

It's a walking nightmare that McCain/Palin are polling above 10%.

If I were running China's trillion dollar investments in America I'd be moving my family to Switzerland.

Palin "Eva Peron" - 78,000 hits

When Emily noted that Palin is the Eva Peron of American politics I knew I had to write a post about it. I'd not read the comparison anywhere else.

We've feared for years that America was becoming 20th century Argentina writ large -- a vast nation destroyed by its own people. Now, with Sarah Palin, we're completing the circle.

Turns out, Emily's not the only one to notice. Palin "eva peron" - Google Search has 77,900 hits this morning.

Zeitgeist.

We are so screwed.

Damn. The good guys blinked.

In the end, the good guys did their duty. The Dems passed the bailout, the House GOP barely shifted

172 Democrats in favour and 63 against. A majority of Republicans still opposed the bill - 91 voted for it and 108 against.

Yes, it's the right thing.

Yes, it's the grown-up thing.

Yes, the GOP has effectively joined bin Laden's "destroy America" campaign.

There's only one problem ...

Gordon's Notes: The GOP's game of chicken - let's crash

....We've seen this game before. It usually involves a financial crisis of one sort or another.

In past episodes the grown-ups turn the car aside. The crisis is averted. The GOP then savages the grown-ups.

That would be fine, except for what happens next.

It works. The GOP win, and once they win they create more crises. For the grown-ups to solve. In the long run, being grown-up only makes things worse.

Being grown-up doesn't work when a large chunk of the electorate is clueless.

Better to crash and burn now, because if the GOP isn't reformed we'll only crash harder next time.

If McCain wins, the next wreck will be even worse.

The 21st century has been educational

Emily and I were talking TED Spreads and LIBOR while chatting about how Chrisopher Cox and Henry Paulson (then CEO of Goldman Sachs) covertly opened the gates of Hell four years ago.

So now we know the language of international finance. Derivatives and credit swaps are second nature now.

It's been such an educational century. We learned about how to weaponize anthrax, and the diverse religious cultures of Afghanistan. We learned of Sunni and Shia, and fundamentalist Saudis. We've learned of counterinurgency and so much more.

The educational century.

I wish we weren't about to learn about economic depressions ....

Paulson and the Net Capital Rule set up the crash of '08

It's one of history's great ironies. Henry Paulson presides over the crash he helped create. The starring role though goes to the GOP's religion of the market; Bush devotees removed the the firewalls grown-ups had put in place.

Emphases mine. Great reporting from the NYT. The meat of the article is in the middle, I've pulled that forward here.

The Reckoning - Agency’s ’04 Rule Let Banks Pile Up New Debt - Series - NYTimes.com

October 3, 2008
By STEPHEN LABATON

... Many events in Washington, on Wall Street and elsewhere around the country have led to what has been called the most serious financial crisis since the 1930s. But decisions made at a brief meeting on April 28, 2004, explain why the problems could spin out of control. The agency’s failure to follow through on those decisions also explains why Washington regulators did not see what was coming.

On that bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.

They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.

The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary...

One commissioner, Harvey J. Goldschmid, questioned the staff...

... “Do we feel secure if there are these drops in capital we really will have investor protection?” Mr. Goldschmid asked. A senior staff member said the commission would hire the best minds, including people with strong quantitative skills to parse the banks’ balance sheets...

... The proceeding was sparsely attended. None of the major media outlets, including The New York Times, covered it.

After 55 minutes of discussion, which can now be heard on the Web sites of the agency and The Times, the chairman, William H. Donaldson, a veteran Wall Street executive, called for a vote. It was unanimous. The decision, changing what was known as the net capital rule, was completed and published in The Federal Register a few months later.

With that, the five big independent investment firms were unleashed.

In loosening the capital rules, which are supposed to provide a buffer in turbulent times, the agency also decided to rely on the firms’ own computer models for determining the riskiness of investments, essentially outsourcing the job of monitoring risk to the banks themselves.

Over the following months and years, each of the firms would take advantage of the looser rules. At Bear Stearns, the leverage ratio — a measurement of how much the firm was borrowing compared to its total assets — rose sharply, to 33 to 1. In other words, for every dollar in equity, it had $33 of debt. The ratios at the other firms also rose significantly....

... The supervisory program under Mr. Cox, who arrived at the agency a year later, was a low priority....

The commission assigned seven people to examine the parent companies — which last year controlled financial empires with combined assets of more than $4 trillion. Since March 2007, the office has not had a director. And as of last month, the office had not completed a single inspection since it was reshuffled by Mr. Cox more than a year and a half ago.

The few problems the examiners preliminarily uncovered about the riskiness of the firms’ investments and their increased reliance on debt — clear signs of trouble — were all but ignored....

... The commission’s decision effectively to outsource its oversight to the firms themselves fit squarely in the broader Washington culture of the last eight years under President Bush.

A similar closeness to industry and laissez-faire philosophy has driven a push for deregulation throughout the government, from the Consumer Product Safety Commission and the Environmental Protection Agency to worker safety and transportation agencies.

“It’s a fair criticism of the Bush administration that regulators have relied on many voluntary regulatory programs,” said Roderick M. Hills, a Republican who was chairman of the S.E.C. under President Gerald R. Ford. “The problem with such voluntary programs is that, as we’ve seen throughout history, they often don’t work.”...

... The 2004 decision also reflected a faith that Wall Street’s financial interests coincided with Washington’s regulatory interests.

“We foolishly believed that the firms had a strong culture of self-preservation and responsibility and would have the discipline not to be excessively borrowing,” said Professor James D. Cox, an expert on securities law and accounting at Duke School of Law (and no relationship to Christopher Cox).

“Letting the firms police themselves made sense to me because I didn’t think the S.E.C. had the staff and wherewithal to impose its own standards and I foolishly thought the market would impose its own self-discipline. We’ve all learned a terrible lesson,” he added.

... A lone voice of dissent in the 2004 proceeding came from a software consultant from Valparaiso, Ind., who said the computer models run by the firms — which the regulators would be relying on — could not anticipate moments of severe market turbulence.

“With the stroke of a pen, capital requirements are removed!” the consultant, Leonard D. Bole, wrote to the commission on Jan. 22, 2004. “Has the trading environment changed sufficiently since 1997, when the current requirements were enacted, that the commission is confident that current requirements in examples such as these can be disregarded?”

He said that similar computer standards had failed to protect Long-Term Capital Management, the hedge fund that collapsed in 1998, and could not protect companies from the market plunge of October 1987.

A once-proud agency with a rich history at the intersection of Washington and Wall Street, the Securities and Exchange Commission was created during the Great Depression..

The commission’s most public role in policing Wall Street is its enforcement efforts. But critics say that in recent years it has failed to deter market problems....

... Christopher Cox had been a close ally of business groups in his 17 years as a House member from one of the most conservative districts in Southern California. Mr. Cox had led the effort to rewrite securities laws to make investor lawsuits harder to file. He also fought against accounting rules that would give less favorable treatment to executive stock options.

Under Mr. Cox, the commission responded to complaints by some businesses by making it more difficult for the enforcement staff to investigate and bring cases against companies. The commission has repeatedly reversed or reduced proposed settlements that companies had tentatively agreed upon. While the number of enforcement cases has risen, the number of cases involving significant players or large amounts of money has declined.

Mr. Cox dismantled a risk management office created by Mr. Donaldson that was assigned to watch for future problems. While other financial regulatory agencies criticized a blueprint by Mr. Paulson, the Treasury secretary, that proposed to reduce their stature — and that of the S.E.C. — Mr. Cox did not challenge the plan, leaving it to three former Democratic and Republican commission chairmen to complain that the blueprint would neuter the agency.

In the process, Mr. Cox has surrounded himself with conservative lawyers, economists and accountants who, before the market turmoil of recent months, had embraced a far more limited vision for the commission than many of his predecessors...

... “The last six months have made it abundantly clear that voluntary regulation does not work,” Mr. Cox said.

The decision to shutter the program came after Mr. Cox was blamed by Senator John McCain, the Republican presidential candidate, for the crisis. Mr. McCain has demanded Mr. Cox’s resignation.

Mr. Cox has said that the 2004 program was flawed from its inception. But former officials as well as the inspector general’s report have suggested that a major reason for its failure was Mr. Cox’s use of it.

“In retrospect, the tragedy is that the 2004 rule making gave us the ability to get information that would have been critical to sensible monitoring, and yet the S.E.C. didn’t oversee well enough,” Mr. Goldschmid said in an interview. He and Mr. Donaldson left the commission in 2005...

I recall McCain got a hard time for saying Cox should be fired. What, people said, could Cox have had to do with a banking crisis?

I hate go give McCain credit for anything, but I might make an exception here. He may have had some inside knowledge.

I like that Mr Labaton connects the "market is wise and good" irrationality of the SEC to the neutering of the FDA and product safety agency.

In the end, it's Bush and the GOP. Again.

PS. If you Google on Leonard D. Bole you'll find his published comments. Maybe he'll appear on Oprah.

Olmert exits with a surprise

I'm surprised, anyway.

Shrillblog: October 2008

... Prime Minister Ehud Olmert said in an interview published on Monday that Israel must withdraw from nearly all of the West Bank as well as East Jerusalem to attain peace with the Palestinians and that any occupied land it held onto would have to be exchanged for the same quantity of Israeli territory.

He also dismissed as “megalomania” any thought that Israel would or should attack Iran on its own to stop it from developing nuclear weapons, saying the international community and not Israel alone was charged with handling the issue.

In an unusually frank and soul-searching interview granted after he resigned to fight corruption charges — he remains interim prime minister until a new government is sworn in — Mr. Olmert discarded longstanding Israeli defense doctrine and called for radical new thinking, in words that are sure to stir controversy as his expected successor, Foreign Minister Tzipi Livni, tries to build a coalition.

“What I am saying to you now has not been said by any Israeli leader before me,” Mr. Olmert told the newspaper Yediot Aharonot in the interview on the occasion of the Jewish new year, observed from Monday evening till Wednesday evening. “The time has come to say these things.”...

Wheeee.

A grim morning - Paul Krugman: "We are going over the edge."

Changing Apple -- the feedback page

Apple responds to customer feedback.

It doesn't seem that way, but the track record is good. If a LOT of people complain, they do something.

This page is the key to giving feedback:
Apple - Feedback.

For App Store feedback I think the iPhone page is the best bet.

So after you read John Gruber's essay on the app store, leave some feedback.

Paul Newman - the most generous individual of the 20th century

The Obits are the best part of the modern Economist ...

Paul Newman, actor and philanthropist | Paul Newman | The Economist

... In the end, the only self-reinvention that completely pleased him was the grinning man on the label of “Newman’s Own” balsamic dressing. His sauces and snacks, sold for charity from 1982 onwards (“shameless exploitation in pursuit of the common good”), turned him into the most generous individual, relative to his income, in the 20th-century history of the United States....

Now that's one hell of an obit line. Nice work Mr. Newman.

Fascinating explanations of how the bank crisis unfolded

Bankruptcy freezes assets. In world of high velocity transactions that's devastating ... 36 Hours of Alarm and Action as Crisis Spiraled - NYTimes.com.

Great story. I imagine an immense engine where the oil has run out. In a few moments it blows.

I wrote earlier about firewalls. This is one. We ran too close the edge, sacrificing safety for efficiency and speed.

Just like a race car.

A little too far ... blow the engine.

Our core financial system should be a Honda Accord, not a race car.

Kristof's happy thought of the day

Imagine how much more fun this would be if social security had been privatized...

Kristof - Save the Fat Cats - NYTimes.com

....For those of you accustomed to bull markets, who think we’re sure to come out of this quickly, remember this: Japan’s main stock index is still less than one-third of its level of 19 years ago...

Lovely. Of course our market has been basically flatline since about 2000, so maybe there's hope.

Something I didn't know:

....A starting point would be to remove tax subsidies on executive pay .... The Institute for Policy Studies in Washington estimates that U.S. taxpayers every year provide more than $20 billion in tax subsidies for executive pay....

So why didn't I know this? Is it common knowledge? What else don't I know?

The key part of the bailout bill

Sausage, politics, etc.

Stockholm Syndrome - Paul Krugman - Op-Ed Columnist - New York Times Blog

...SEC. 503. EXEMPTION FROM EXCISE TAX FOR CERTAIN WOODEN ARROWS DESIGNED FOR USE BY CHILDREN...

The fault is in us, really.

The best of Sarah Palin -- all the clips, assembled

A gift from Talking Points ....

Talking Points Memo | Queen of Youtube!

... as we get ready for the big event tomorrow night, Palin's historic confrontation with Joe Biden in St. Louis, we thought we'd pull together all of Palin's greatest interview moments in one boffo Sarah-mania clip reel ...

I tried watching it, but it's too sad. I had to stop at the third clip.

All we need now is for the Wall Street Journal's OpEd article praising Palin's victory over Biden to appear before the debate.

That would be perfect.

She can't possibly do worse than she's already done. Biden will be very genteel even as Palin will be gunning hard, so I think it won't be so bad for her.

She's not going to do any more real media encounters though.

Bipartisanship at last …

I personally think bipartisanship is overrated – particularly if it involves today’s GOP. (Maybe tomorrow’s GOP will be different.)

Some people still celebrate it though. Sort of …

Morford: What's your poison, citizen? / New game! Which toxic news story is most insulting? Play now!

… At last! Here is your bipartisanship, America. All the years of acrimony and fiery spittle, finally we have a grand issue around which both parties can rally: George W. Bush is dead! A pariah! Banished from the kingdom forevermore! Undeniably, it took the near-complete implosion of the nation to get us there, but hey, at least we can finally agree on something. Isn't that wonderful? Who wants pie? …

I’m sure TIME and Newsweek will still find a way to give Bush a good sendoff. It will be noted that Iraq is, apparently, a more hopeful place now than it’s been since before Gulf War I -- though the price was terrible and too high, and the future is fragile.

I suspect Bush will leave office with a better approval rating than he has now.

More’s the pity.