Michael goes crypto...

...well, not quite, but he does what he rarely does, he reproduces an entire piece from the NYT (last time he did that it was with a column from Ross Douthat about Obama's victory in the 2012 elections). Enjoy: 

Going for Broke in Cryptoland -- By David Segal

Some hype coins mint instant millionaires. Others go bust. Why not take a chance?

They have names that make them sound delicious, like Cookie Coin. Or headed for outer space, like Pluto Coin. Or space-bound and delicious, like AstroCake, which was described this way: “Created 5 minutes ago. SAFE.”

Hype coins, as they’re known, sit squarely on the flashy, speculative end of the cryptocurrency business. Every day, dozens of them are created around the world by developers promising fortunes to would-be investors. It usually ends poorly. The vast majority of these tokens are worthless within a couple of weeks. The developers, on the other hand, can make tens of thousands of dollars, sometimes a lot more.

Despite this track record, hype coins have become the investment of choice for millions of people, most of them men in their 30s, or younger, and convinced that the economy writ large is rigged against them. Some are the same traders who have been leaping into stocks like GameStop and AMC Entertainment. To them, crypto is both a source of hope (in imminent riches) and fellowship (many coins have chats on Telegram, an encrypted messaging app, that can sound like faith-based support groups).

It’s hard to think of another financial craze in which so many people poured so much into entities with so little intrinsic value. Few hype coins have any utility as currency. Good luck buying lunch with one. Many are minted in numbers rarely seen outside astronomy books — trillions, quadrillions — which dooms them to vanishingly tiny prices.

From the outside, the hype coin party is a mystery. To understand it, you have to join it.

Which is surprisingly easy. You may have heard that Bitcoin, the granddaddy of crypto, is “mined” by power-gobbling supercomputers, a process that verges on the utterly incomprehensible. Making a hype coin, by contrast, is more like ordering a pizza online. The entire process is automated and speedy. The fixings — in this case, what to call it, how many coins to make and so on — are up to you.

So one day in May, I created my own cryptocurrency. I did it on a Zoom call with an excitable 36-year-old in Taiwan, Dan Arreola, who had posted a tutorial on YouTube about how to make, and promote, a “scam coin.” It has more than 240,000 views.

French for beginners --- Ikea

(Maud sends us this cartoon:)

Our friend Glenn sends this cri de coeur:

Not exactly a cri de coeur, but you get the gist.

Anything the GREEN EYES have to add to this? We have a billionaire, Neill Palmer, sure, and he dies a suspicious darkroom death in Part II. But we have nothing really funny. Well, okay, here, from Part I, John meeting Palmer at Godehart's party/orgy (the thing about the web site is true, actually, and the guy's name really was Neill, but he wasn't wealthy). Here goes:

The network next to me consists of two elderly men, and two youngish rent boys. Love is in the air. The men are much older than me. I recognize one of them from the distant past, when I was still a young regular at the Blue Moon. He was running a place off the Coastal Highway, on Route 24, a large Thai place with an upper, more secluded, floor above the main restaurant, awful food, and willful oriental boys, who were waiting on tables in the meantime. Patrons came from all over the place, even from Atlanta, to taste one or more of his waiters. Yes, now I remember his name, Neill Palmer. He kept a website back in those days that was quite revolutionary, poorly aligned text in colorful, meandering hues and pictures of his staff, ranked according to their state of sexual arousal, the apex being the climax, boys caught with their cum coming in flagrante. I remember that he had never managed to externalize the moment of the squirt (white ropes flying from the penis), his cum-shots were always a bit off, the cum caught already dispersed into milky drops in the empty, or not so empty, space in front of his oriental masturbators.

This is funny...(Sacha)

...for a while. In fact, it took us a few years to understand that "bonjour" is more important than "s'il vous plait." We've commented on this before, here.

Why have they stopped wearing white collars? (reposted)

Like everybody else, we're getting these letters from Nigeria. Here's the latest (from .pl, actually, that's Poland, I think, the full email address is: mrzacom@gazeta.pl --- in case you feel the need to reply):

Dear MICHAEL

Please pardon me for not having the liberty of knowing your mindset before writing you this letter without any formal introduction.My name is Mr. Zaco Mohammed I am the present branch Manager in one of the Barclay's Bank here in London I write to solicit for your partnership in claiming of $15.million usd from an account at our Head Office .

The aforementioned fund $15.million usd is my share percentage from a Gold Mining project that i helped financed, influentially.

Furthermore, as a Manager in the bank, I am not allowed to be part of such a deal, because it's against my company's professional practice policy. So I am compelled to ask that you stand on my behalf and receive this fund into

any account that is solely controlled by you. I will compensate you with 35% of the total amount involved as gratification for being my partner in the transfer.

Please contact me immediately you received this mail

Yours Truly,

Mr.Zaco Mohammed

Do we have to point out what's wrong with this letter---besides the ploy? Everything is off, style ("MICHAEL"), spelling (the first person pronoun is not capitalized), interpunction (spaces between the last letter and a dot, for example), grammar ("that i helped financed"), idiomatic usage  ("for not having the liberty of knowing your mindset") etc. And it's always thus.

Who is writing these letters? In my days, we were told with great fanfare of highly intelligent---that was always the qualifier: "highly intelligent"---individuals that were cheating unsuspecting victims out of their money by means of wit, deception, guile, and other nonviolent forms of behavior, all this while the perpetrators were wearing white collars.

Lol

Pure speculation (Swiss for beginners)

Philipp Hildebrand, the CEO of the Swiss National Bank,  had traded on the foreign exchange markets a few days before his bank had forced a peg of the Swiss Frank with the EUR that would guarantee an enormous profit to himself personally. No, wrong. It turns out, it was only his wife Kashya  --- nice name, boobs, attractive, a former model perhaps, no, just a former foreign exchange (FOREX) trader, running an art gallery now, Kashya, who knew nothing of her husband's plans to peg the Swiss Frank to the EUR at 1.20, and who, by exchanging enormous amounts of Swiss Franc at the right time, would make an enormous trading profit. Note that we don't use the word "speculation", the word "speculation" has been defenestrated, even here in France it's "trading" now (imagine the French pronunciation), since "speculation" triggers the wrong instincts --- instincts that were already abrogated by Queen Victoria, her of the Victorian age, the woman who famously informed her cabinet that a "wife knows everything her husband knows." So it was only Kashya, and it was only a matter of convenience that she did use her husband's account since the poor thing did not have a trading account in her own name, but it's clear that it was her, and not Hildebrand, who did the trade, since she, as a FOREX trader, knows the future.

Kashya and Philipp Hildebrand, note the plant in the background

And the press of the Free World is eating this up as if it were Yorkshire pudding.

Imagine you're writing a movie script. What's next?

A missing email perchance, that one particular email mysteriously absent from the records that the Swiss National Bank supplied to some thorough investigator who had been instituted to go to the bottom of this and who went there, and could not see anything wrong since the missing email was missing? Or was it somebody else, a highly-payed person (he/she) from a worldwide accountant firm with an interminable name? Like PriceWaterhouseCoopers? Yes, that's it, PwC. PwC, which failed to spot an accounting error of 54.5 billion EUR in the accounts of the Deutsche Hypobank only 6 weeks ago?  The largest accounting error in the history of the planet? That's the ticket if we need somebody to go Santorum.

And now what? Somebody's dropping a glass, it shatters, and Colombo has a heureka moment? Somebody's whispering in the dark? Somebody's impersonating the dog that didn't bark in the dark?

We don't know. What we do know, however, is that the missing email resurfaces, reappears as mysteriously as the account of Hildebrand's trading account itself had resurfaced (which it should not have, since there's the Swiss banking secret, and furthermore, it was sheer coincidence that Hildebrand's wife did trade in her favor on the FOREX market etc etc, it's so unfair).

Queen Victoria

Now, it is now that the script writer reaches the delicate point where he has to go into the finer points of the matter, for which he has the internet here.

You get the gist. Everything is OK. Hildebrand's story is consistent. There's just one minor problem. There was another email, or phone call, or whatever, from Hildebrand, to his bank, to the effect that the last trade was OK (it will never happen again, but the last trade was OK), and that it was OK to "augment" this trade (so as to enlarge the position that led to the profit).

Sarcasm is the lowest form of wit, some wit once observed, but that's the best we can do. Hildebrand stepped down yesterday. Life's unfair.

 Relax. Here's a picture from a better Swiss scene:

View of the Valais (Wallis) valley, Switzerland, 2012

Why banks have become dysfunctional

James Saft, the Reuters' columnist, has a piece in the IHT about a talk by Andrew Haldane, the executive director for financial stability of the Bank of England. Once in a while, somebody writes a few lines we ("we") really should read, and here they are:

The purchaser of a portfolio of global banking stocks in the early 1990s is today sitting on a real loss. So who exactly is it extracting value from today's banks? The answer is twofold: shorter-term investors and bank management. Because banks have, over the past two centuries, migrated to a limited liability, shareholder-owned model, there is a natural tendency for owners to make riskier loans and trades and to increase the bank's assets.

Andrew Haldane

A bigger, riskier balance sheet with more leverage produces terribly volatile results, with many good-size profits mixed in with the occasional catastrophic loss. But with limited liability, executives and shareholders can simply walk away from the smoking wreckage, having pocketed the gains when times were good.

Bank of England

Banks then have a built-in incentive always to increase leverage, and the tyranny of quarterly earnings places huge pressure on them to enlarge their asset books, even if there is no one creditworthy left to lend to.
That was one of the main causes of the subprime episode. Faced with the prospect of not increasing earnings, banks simply began to manufacture borrowers where none really should have existed.
The situation is exacerbated by the fact that debt is tax-deductible while equity is not, giving banks even more incentive to borrow. While the typical leverage of an American or British bank in 1900 was five or six times equity, that figure peaked at about 30 times before the crisis, and is higher still now for many euro zone banks.
Bank bondholders have been unwilling to play their role as vigilantes, in part because they quite rightly expect to be bailed out by governments if banks go to the wall.
In the past 30 years, many banks have moved to measure their performance -and set their bonuses -on the basis of a measure called return on equity, which measures profit compared with equity. What return on equity does not adjust for, of course, is risk, and it looks as if return-on-equity targets in a leverage driven business have produced a lot of risk in the form of extreme bank earnings volatility, and badly compensated volatility at that.

PS: Conspiracy, conspiracy. If you search for James Saft on IHT's web site, it comes back with " 'James Saft' did not match any documents under Past 30 Days." If you search for the column's title "Why banks take such huge risks," it comes back with all sorts of articles (about Berlusconi, among others), but not with Saft's column. However, if your search for the same title on Google, it comes back with a mirror site of the column as first result. (Lol)

Bible Studies (4)

Help me, help me (washed-up script writer)

We haven't heard from the washed-up scriptwriter in quite some time. He was washed up in Kazakhstan, and wrote some poems for President Brftzerk, the guy from the rotating golden statue, and then Brftzerk got arrested or something, and Sacha, who was supposed to keep him company, is back in Europe.

Finally, finally, we have some new news from the washed up scriptwriter.

"For obvious reasons," he writes, "I am setting my next script in the realm of financial stability. And here is my first try. A brief soliloquy (we want our soliloquies short these day's, don't we), that I put into the mouth of this Trichet person, you know who I mean, the president of this European Bank:

Reporter:

What is your answer to German people and economists who want the return of the DM? Trichet: You want answers?
Reporter: I think the Germans are entitled.
Trichet: You want answers? (SHOUTING)
Reporter: Germans want the truth! (SHOUTING)
Trichet: *You can’t handle the truth!* (SHOUTING) [pauses]…
Trichet: Son, we live in a world that has prices, and those prices have to be guarded by men with bonds. Who’s gonna do it? You? You, Sylvia Wadhwa? I have a greater responsibility than you could possibly fathom. You weep for Lehman Brothers, and you curse Ben Bernanke. You have that luxury. You have the luxury of not knowing what I know. That Lehman’s collapse, while tragic, probably saved banks. And my existence, while grotesque and incomprehensible to you, saves banks. You don’t want the truth because deep down in places you don’t talk about at parties, you want me on that committee, you need me on that committee. We use words like rate, target, expectation. We use these words as the backbone of a life spent defending something. You use them as a profitline. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of price stability that I provide, and then questions the manner in which I provide it. I would rather you just said congratulations and went on your way. Otherwise I suggest you pick up a Greek bond, and suffer a haircut. Either way, I don’t give a damn what you think you are entitled to!

And you know what? I didn't make this up. Heres what Trichet really said:

“We have delivered price stability over the first 12 years and 13 years of the euro — impeccably, impeccably!” Trichet said, his voice rising. “I would like very much to hear the ‘congratulations’ for an institution that has delivered price stability in Germany for … almost 13 years at an annual inflation rate of around 1.55%. It was not by chance; it was because we decided very frequently to do things that were not recommended by the various governments. Our independence is inflexible… We are in the worst crisis since World War II. We do our job. It is not an easy job.”

Let's bring back the gold standard (Dirk) (reposted)

A lesson in bureaucratology (Sacha)

Senior moment - A 98 year old woman in the UK wrote this to her bank:

Dear Sir,

I am writing to thank you for bouncing my cheque with which I endeavoured to pay my plumber last month. By my calculations, three nanoseconds must have elapsed between his presenting the cheque and the arrival in my account of the funds needed to honour it. I refer, of course, to the automatic monthly deposit of my Pension, an arrangement, which, I admit, has been in place for only thirty eight years. You are to be commended for seizing that brief window of opportunity, and also for debiting my account £30 by way of penalty for the inconvenience caused to your bank.

My thankfulness springs from the manner in which this incident has caused me to rethink my errant financial ways. I noticed that whereas I personally attend to your telephone calls and letters, but when I try to contact you, I am confronted by the impersonal, overcharging, pre-recorded, faceless entity which your bank has become. From now on, I, like you, choose only to deal with a flesh-and-blood person. My mortgage and loan payments will therefore and hereafter no longer be automatic, but will arrive at your bank by cheque, addressed personally and confidentially to an employee at your bank whom you must nominate. Be aware that it is an offence under the Postal Act for any other person to open such an envelope.

Please find attached an Application Contact Status which I require your chosen employee to complete. I am sorry it runs to eight pages, but in order that I know as much about him or her as your bank knows about me, there is no alternative. Please note that all copies of his or her medical history must be countersigned by a Solicitor, and the mandatory details of his/her financial situation (income, debts, assets and liabilities) must be accompanied by documented proof. In due course, I will issue your employee with PIN number which he/she must quote in dealings with me. I regret that it cannot be shorter than 28 digits but, again, I have modelled it on the number of button presses required of me to access my account balance on your phone bank service. As they say, imitation is the sincerest form of flattery. Let me level the playing field even further. When you call me, press buttons as follows:

1. To make an appointment to see me.
2. To query a missing payment.
3. To transfer the call to my living room in case I am there.
4. To transfer the call to my bedroom in case I am sleeping.
5. To transfer the call to my toilet in case I am attending to nature.
6. To transfer the call to my mobile phone if I am not at home.
7. To leave a message on my computer (a password to access my computer is required.
A password will be communicated to you at a later date to the Authorized Contact.)
8. To return to the main menu and to listen to options 1 through to 8.
9. To make a general complaint or inquiry, the contact will then be put on hold, pending the attention of my automated answering service. While this may, on occasion, involve a lengthy wait, uplifting music will play for the duration of the call.

Regrettably, but again following your example, I must also levy an establishment fee to cover the setting up of this new arrangement.

May I wish you a happy, if ever so slightly less prosperous, New Year.

Your Humble Client

Prince Charles and Camilla in mortal danger (2)

We've posted on this before. FF's position is unambiguous: a Rolls Royce is the only proper car for an evening out at the opera, in particular if it's a Phantom Mark IV from 1976. And while the Waleses are on their way, properly attired (how does one call the fact that one is properly be-car-ed?), the students---who are so blind-sighted not to understand that the tripling of tuition fees is in their own best interest since the bonuses of the Financial Sector have also tripled---the students are making threatening gestures towards the future sovereign and his consort, and we are appalled, and the Metropolitan Police (Scotland Yard) has now identified two or more anonymous terrorists, and asks for your help, as the British Telegraph reports. If you have any clues, please contact Buckingham Palace at +44 (0)20 7766 7300

This brings to mind a report in the Dutch Telegraaf (a Dutch down-market imitation of the Telegraph) from a long time ago, I would say late 70's (this is all from memory, no internet backup) as to the adventures of the Dutch Princess Christina, who had married the Cuban Jorge Guillermo a few years earlier, and was now chauffeured by him in a Rolls Royce into downtown Salzburg, Austria, during the Salzburg Festival, in order to attend the opera, and the police stops them because downtown Salzburg is closed to cars during the festival, and we (the Telegraaf) are shocked, shocked, how a Dutch Princess could be encumbered by the police in her operatic pursuits while being chauffeured  in a Rolls Royce by her consort, and he, stopped  by the police now, is forced to explain that we are a Dutch Princess, and it's all so embarrassing, especially for the cops, to learn that they've just encumbered a princely couple in their operatic pursuits, and one officer drops dead out of pure shame, and the Princess is also embarrassed but keeps her cool and says, "let them eat cake," and the Austrian Minister of the Interior (responsible for the police) apologizes to the Dutch Crown, and the Dutch Queen gracefully acknowledges the apology.

Princess Christina

A second officer drops dead after having been force-fed some Austrian cakes that Marie-Antoinette had left behind when moving to France to wed Louis XVI (we know how that ended), but eventually everything is forgotten, until we learn 20 years later that the Princess and her consort are no longer on speaking terms, and he grabs the behinds of the catering ladies, and chides her for her awkwardness in public (she is practically blind since her mother had contracted German measles during the pregnancy), and the whole nation feels terrible about it, and they sleep in separate bedrooms, and even highbrow broadsheets like the NRC (don't ask) now allude to the suspicion that he married her for her money,* and a divorce is eventually arranged, and he gets a huge settlement, perhaps more than Guy Richie, and no reference is ever made to the Salzburg event 20 years earlier. And, oh yes, we love monarchy.

* which, as we are learning now, she is prudently keeping out of reach of the Dutch taxman in the offshore jurisdiction of Guernsey.