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Generational Dynamics Web Log for 9-Feb-2013
9-Feb-13 World View -- Comments and questions on the Libor-rigging scandal

Web Log - February, 2013

9-Feb-13 World View -- Comments and questions on the Libor-rigging scandal

Panetta: A cyber attack may be the next Pearl Harbor

This morning's key headlines from GenerationalDynamics.com

Hong Kong's poor people live in metal cages
Panetta: A cyber attack may be the next Pearl Harbor
Comments and questions on the Libor-rigging scandal
Generation-Xers versus Boomers
Egypt's PM warns women to clean their breasts

Hong Kong's poor people live in metal cages

62-year-old Cheng Man Wai lies in his home, 16 sq. ft. cage (AP)

62-year-old Cheng Man Wai lies in his home, 16 sq. ft. cage (AP)

Hong Kong is one of Asia's wealthiest cities, but real estate prices have surged 25% in the last year alone, with rental prices following suit, putting a decent home out of reach of hundreds of thousands of the poorest. For many of them, this means living in a small metal cage in an apartment that's been subdivided with as many metal cages as can be made to fit. Cage homes originally sprang up in the 1950s to cater to single men coming in from mainland China. AP

Panetta: A cyber attack may be the next Pearl Harbor

Defense Secretary Leon E. Panetta is warning that cyber attacks are a primary threat to U.S. national security, with a potential "crippling" effect on government, financial and commercial networks. According to Panetta,

"The developments that have taken place in the cyber arena have been incredible over these last 10 years. ... I believe that it is very possible the next Pearl Harbor could be a cyber attack ... [that] would have one hell of an impact on the United States of America. That is something we have to worry about and protect against."

U.S. Dept of Defense

Comments and questions on the Libor-rigging scandal

I received a lot of comments on yesterday's article, "8-Feb-13 World View -- Libor-rigging scandal and lying on Wall Street".

"Thank you for all your hard work on your site. I really enjoy it. I have a quick thought on the lawsuit against S&P. It is my belief that the prosecution is politically motivated rather than generationally motivated. I understand that the two are not mutually exclusive but remember that S&P was the first firm to downgrade US debt. This may be payback for do so before the elections or in defiance of an order from this administration. From what I've seen; if you make friends with the administration, then all your legal troubles seem to go away. On the contrary, when you fight the administration, your legal troubles seem to compound. Did Putin teach our administration how to use the law for political advantage?"

Apparently a lot of people believe that the administration brought charges against S&P Financial Services (as opposed to Moody's or Fitch) for purely political reasons, because S&P lowered the U.S. credit rating during President Obama's reelection campaign. Apparently even Democrats agree that this is a possibility (though they're willing to forgive it, while Republicans are not). It's a reflection of how the Administration seems willing to break any law that the public is so willing to believe something like this.

However, there have been a number of news stories suggesting that the Administration is close to bringing a similar charge against Moody's, which did exactly the same thing. If no such charge is forthcoming, then suspicion will grow that the charges against S&P were indeed politically motivated. We'll see.

"Standard & Poors is not a Bank. No person is being prosecuted. No corporation is being prosecuted. No serious criminal investigation of the fraud has been announced... And it has been more than six years since the whistle blowers came forward with documentation. A civil suit does not carry the threat of 30 years in jail, that causes little fish to tell all and expand the investigations to other corporations and bigger fish."

I had suggested that perhaps things were changing, and that now that the election was over, bankers that had committed fraud, causing the financial crisis, would finally be prosecuted. However, it's true that the S&P charges don't really change anything. It's still true today that nobody has been criminally charged, and no American banker has even been civilly charged.

When I suggested that things were changing, I was referring to a trend. Let me put this into context:

In 2002-3, I started talking about a big stock market bubble.
In 2004, I started talking about a real estate bubble.
In 2005, I started talking about a credit bubble.
In 2006, I started talking about a deflating real estate bubble.
In 2007, I started talking about apparent fraud by investment banks.

In each of these cases, I was referring to an apparent trend that wasn't being recognized by the public in general. For example, it was only in 2010 that mainstream economists finally started admitting that there was a real estate bubble in 2006.

So that's what I'm talking about now. A year ago, there was no sign at all of bringing charges for the financial crisis. But the Libor-rigging scandal was so egregious that it's no longer possible for the Administration to avoid bringing charges. They may still be loathe to charge their banker pals with anything, but I'm seeing a trend where they're going to be increasingly forced to do so, whether they want to or not.

Generation-Xers versus Boomers

"I notice that you rant very hard against the GenXers as a category but seem to leave the Boomers off the hook as a category. Ron Baron is clearly a Boomer as were all the principal propagandists for the legitimacy of the scams. After all, abstract rhetorical arguments are what Boomers excel in. The GenXer desperado/nihilistic/self-destructive ruthlessness is definitely a key component, but so too is the narcissistic air-headedness of the Boomers coupled with their bogus, anti-historical, anti-mathematical rhetorical flourishes. In fact, the Boomers were the ones in charge during the ascent of the GenXers. It is true that the GenXers would play on the messianism, greed and ego of the Boomers in advancing their schemes. But the Boomers were where the buck stopped; and still where the buck stops today. So to only blame the devious Xers is to imply that the Boomers were innocent just because they were naive idiots who just happened to be egomaniacal and greedy."

I didn't go into the subject of Boomers versus Gen-Xers in yesterday's article, but I've written many times in the past that the Boomers are just as criminal as the Xers. Also, I suggested that Baron was a liar or a crook in the full knowledge that he was a Boomer.

I've been writing about generational theory for over ten years now, and today I have few doubts left about the relationship between the Boomers and Xers. The key to understanding is the difference between the 1990s tech bubble and the 2000s credit bubble. The Boomers brought about the 1990s tech bubble by making incredibly stupid investments, because the Silents were no longer around to tell them to be risk averse. However, the tech bubble was caused by stupidity, not by fraud. The Gen-Xers brought about the disastrous credit bubble by purposely defrauding investors. The Boomers went along with it, because they used to do what the Silents told them to do, and now they do what the Xers tell them to do. The Boomers are amoral, while the Xers are immoral.

In the past ten years, I've personally seen one incredibly stupid and destructive decision after another made by Gen-Xers in the computer industry, simply because the Xers hate the Boomers. And perhaps theoretically "the buck stops here" with the Boomers, but in actual practice what I've seen is that the Boomers do nothing except to go along with these incredibly destructive decisions. (After all, the Boomers just want to be loved by the Xers -- or laid.)

And the same is true in politics in Washington, and in finance on Wall Street. The Gen-Xers in the Administration and the Congress make incredibly destructive decisions, and the senior politicians just go along with them. If I'm not mistaken, all the people on Wall Street whom I've called crooks and liars have been Boomers, but they all get their fallacious data from their Gen-X staffers.

Last year, I wrote about the "The Metastasis of Corruption" -- how the corruption and fraud began with the Gen-Xers in the early 2000s because of their hatred of Boomers, and how it metastasized to the point where almost everyone in Washington and on Wall Street appears to be corrupt. I compared this to 1930s Germany, where corruption began with Germany's Lost Generation because of their hatred of the "Missionary Generation," but then it metastasized into hatred of the Jews, as representatives of the Missionaries, and into a full-fledged Holocaust.

This is exactly the kind of process that's going on today in Washington and in Beijing, and the result is going to be calamitous for everyone.

Egypt's PM warns women to clean their breasts

Egypt's Prime Minister Hisham Qandil is warning women about the dangers of "unclean" breasts. In a speech, he referred emotionally to rural areas of the country where he saw the suffering of newborns having to deal with diarrhea after being breast fed. The prime minister claimed that the reason behind the diarrhea epidemic in rural Egypt is that some female villagers are too ignorant to clean their breasts before feeding their babies. Al-Bawaba (Jordan)

(Comments: For reader comments, questions and discussion, see the 9-Feb-13 World View -- Comments and questions on the Libor-rigging scandal thread of the Generational Dynamics forum. Comments may be posted anonymously.) (9-Feb-2013) Permanent Link
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Generational Dynamics Web Log for 9-Feb-2013 9-Feb-13 World View -- Comments and questions on the Libor-rigging scandal

Hong Kong's poor people live in metal cages

Panetta: A cyber attack may be the next Pearl Harbor

Comments and questions on the Libor-rigging scandal

Generation-Xers versus Boomers

Egypt's PM warns women to clean their breasts

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Generational Dynamics Web Log for 9-Feb-2013
9-Feb-13 World View -- Comments and questions on the Libor-rigging scandal