March 23, 2009

About US Unemployment Non-Security

Robert Eshelman writes in, under headline “The Other War on Workers”:
Under unemployment eligibility requirements, an employer must certify whether an employee committed a "fault" on the job and was therefore terminated. If an employer indicates that no fault was committed and the employee meets several other requirements, including being physically able to work, states grant an unemployment claim. In other words, Chris's former employer granted him a small concession, while otherwise turning his life upside down amid the worst job market since 1983.
Is this really the situation in the US? No wonder people are scared of their employers. Record crime rates, here we come! Americans really have to rethink about their social safety nets.

In a later paragraph:

Someone I interviewed prior to my job center visit described her reaction when she heard that her company had recently closed a plant in the Midwest: "The first thing I thought, and I felt bad for thinking it," she recalled, somewhat sheepishly, "was that means more work for us -- at least for the time being."

Her comment speaks volumes, as does her request not to be identified. Who needs union busters, patrolling shop-stewards, or legions of high-paid lawyers fighting wage and hours claims when a worker is so anxious about job security that she responds positively to the laying off of those she imagines as potential competitors? When employees police their own behavior for fear of the axe -- monitoring their time checking email or using the bathroom -- bad times distinctly have an upside for management.


A look at corporate opposition to the Employee Free Choice Act (EFCA), whose passage in Congress is a central demand of organized labor, offers a glimpse of how persistently companies seek to disadvantage their workers. EFCA would allow workers to form a union when a majority of them sign union cards in a given workplace. "Card check," as it is frequently called, enables them to organize unions without the need for an election. In a November column surveying the business elite's response to the Act, Wall Street Journal op-ed columnist Thomas Frank wrote: "Card check is about power. Management has it, workers don't, and business doesn't want that to change."

Trying to prevent workers from setting up a trade union should be declared illegal as a violation of the workers' freedom of assembly.

March 22, 2009

Thomas Friedman: "We Must Have Growth"

Thomas Friedman states the obvious:
Let’s today step out of the normal boundaries of analysis of our economic crisis and ask a radical question: What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said: “No more.”
What on earth is so radical about this view? It is a perfectly acceptable possibility. It is truly sad that he feels the need to explicitly step out of the “normal boundaries” to even contemplate such an idea.

Later on he gets to his policy descriptions:
We must have growth, but we must grow in a different way. For starters, economies need to transition to the concept of net-zero, whereby buildings, cars, factories and homes are designed not only to generate as much energy as they use but to be infinitely recyclable in as many parts as possible.
Yes. Let's abolish the second law of thermodynamics. That will solve all our energy needs.

While greater efficiency is a good goal, what is it with the “we must have growth” meme? It is absolutely not true. We could very well go on with a lot less than we have, after all, our grandparents certainly did. We could produce less, we could consume less, we could travel less.

The only thing that necessitates growth (beyond population growth) is the current state of the banking system, which is built to withstand total collapse only in the presence of continuous growth. If the economy was not based on such huge amounts of debt, there would be no need for continuous growth.

US FDIC Covering Bond Holders?

Something doesn't quite sound right here: The Federal Deposit Insurance Corp. said late Thursday that it has completed the sale of IndyMac Federal Bank FSB, the firm it took over last year, and that it took a $10.7 billion loss on the deal, far more than originally expected.

The FDIC said OneWest Bank, FSB, a newly formed Pasadena, California-based federal savings bank organized by IMB HoldCo LLC, would assume IndyMac's deposits.

"As of January 31, 2009, IndyMac Federal had total assets of $23.5 billion and total deposits of $6.4 billion. OneWest has agreed to purchase all deposits and approximately $20.7 billion in assets at a discount of $4.7 billion. The FDIC will retain the remaining assets for later disposition," the FDIC said in a press release.
How can the FDIC accumulate $10.7 billion in losses while covering $6.4 billion of deposits? Sounds like the FDIC is taking a fall for other creditors of IndyMac as well. Is this really the purpose of FDIC? I thought it was only supposed to be for deposit insurance.

March 16, 2009

Lawrence Summers is a Grand Hypocrite

Lawrence Summers, former World Bank chief economics, Clinton Treasury secretary and Harvard president, has completely turn his convictions around. This would be good, if he didn't maintain that this apparent conversion is somehow 'temporary': reports (ht to Emmanuel):
Widely seen as being among the most pro-market voices in the White House, having been Bill Clinton’s last Treasury secretary in the 1990s, Mr Summers said the view that the market was inherently self-stabilising had been “dealt a fatal blow”. At a time when the Republican critique of Washington’s aggressive response to the crisis is growing more trenchant, Mr Summers made an unapologetic case for government intervention.

“This notion that the economy is self-stabilising is usually right but it is wrong a few times a century. And this is one of those times . . . there’s a need for extraordinary public action at those times...”
What a load of crap. Summers has it almost exactly backwards. The 30 years or so that this credit bubble has been constantly growing have been the time that the market has not been self-correcting. This crisis is the much awaited self-correction.

Funny that he didn't feel this way when the Asian financial bubble burst in 1997. Then he was all for harsh austerity measures. The current global phenomenon is only different in its scope and size. There is no fundamental difference.

Not that I'm at all for letting this crisis run its course without any remedial measures. But if we are going to let the unquestionably unstable credit machine churn out bubble after freaking bubble, we should device a comprehensive safety net that covers all and every part of the world economy, not just a select set of G-7 nations.

Naturally, it would have been much more fruitful to keep the lid on the credit machine that was unleashed by the Reagan and Thatcher governments in the early 1980's. Unregulated issuance of credit has always and everywhere been the source of financial bubbles.

March 3, 2009

India's Growing Supercomputing Market

Signs of the rise of India as a growing player in the world of research and development: Cray Inc. has established a presence in New Delhi. (ht Global supercomputer leader Cray Inc. (NASDAQ: CRAY) has formed a new wholly-owned subsidiary in India aimed at strengthening its presence in that country's growing High Performance Computing (HPC) marketplace.

"The senior management at Cray has felt for some time that the company needed to expand its footprint in India to provide a strong, local presence for our customers," said Andrew Wyatt, vice president, Cray Asia Pacific. "The country's HPC market is of rising importance, and establishing a new subsidiary allows us to seamlessly deliver our supercomputing expertise to both new and existing Cray customers in India."

HPC utilization is an important bellwether of high-tech, high-value added research and development.

Elsewhere, SGI has announced further layoffs of 9% of its workforce, even at the face of a big order of the US DoD:

The Register: Supercomputer maker Silicon Graphics has let go 120 more employees, nine per cent of its workforce, in an effort to cut costs as its revenues decline.

These cuts come hot on the heels of a 15 per cent layoff announced in mid-December, when SGI slashed 15 per cent of its 1,500-strong workforce, eliminating 225 positions. After the latest rounds of cuts, SGI has approximately 1,155 employees. That latest round cost the company about $3m in severance and related charges, according to the 8K filing, and SGI expects the layoffs to be completed by March 27.

March 2, 2009

Ferrari's Mobile IT Needs

This is not your average mobile IT solution (hat tip insideHPC):
Somehow this just doesn't make much sense. Why would the servers actually have to be on location at the race tracks? One would think that remote operation would be enough.