Archive for January, 2011

Excellent Davos recap by Simon Johnson. In a nutshell: The world’s largest Banks and Corporations expect governments to slash public spending so that these governments can better absorb the crises that the Financial sector is busy setting up in the wake of the 2007-2009 credit crunch that they themselves created. This is the World we live in folks!


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Or something like that. Didn’t really know much about anything when I made this short in 2001. It sprang whole from my subconscious in the form of a storyboard.


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It’s taken awhile but here’s “Hawaii” a short film I wrote, produced, directed and edited in 2005. I worked very hard to get it on the festival circuit but to no avail. I did get it into a France/Quebec short film festival in Trouville, France where it won the prize of Best Quebec short, the first and only time in the festival’s 10 year history that an English language short won that distinction.

I also received a call from one of three Toronto International Film Festival programmers, two weeks before the 2006 edition, to explain to me how much they LOVED the film but alas could not fit it into their festival’s program. That was a hard blow as any film that makes it into TIFF is more than likely to be invited to a dozen festivals around the globe which is very helpful in getting a film career started. I did, however, manage to license it to Moviola, a short film tv network in Canada which has broadcast it a number of times.

Anyway, hopefully posting it to my blog and occasionally reminding people to swing by and have a look will get it seen by a few more eyeballs. If you like it please feel free to pass it on to any producers you know that are looking for fresh talent.

And without further ado: “Hawaii”.

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Modern Money Theory is something that I’ve just come across recently. The main tenant of #MMT is that trade surpluses and deficits don’t matter if inflation is measured accurately and government’s are trusted to increase or decrease the money supply directly through equity based money creation as opposed to debt-based money creation. I encourage anyone is who is as perplexed about the nature of money as I am to check out the following post and to research Modern Money Theory further. I don’t know if it really offers all the solutions, I don’t think any system ever will, but the idea of eliminating deposit insurance and allowing private banks to fail while creating government backed banks that offer 100% reserve digital cash storage (i.e. deposited cash is stored and NOT lent out) is compelling. The idea of governments increasing or decreasing the cash supply directly via depositor accounts is counterintuitive but in the context of a system that aims for stable purchasing power (no inflation or deflation) I understand how it would work. It’s not clear to me, however, where interest rates would come into play…If the time value of money is stable how is the cost of money measured for capital investments? Anyway, check this blog out. It’s a nice change from the usual Austrian/Keynsian dialectic which is like a train without wheels and very soon going nowhere.


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What do you mean there aren’t enough for everyone? http://goo.gl/39S0Q

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I’m SORRY. But it’s true. Wish it were not. Read the following re-posted from the excellent www.nakedcapitalism.com and then explain to me why I’m wrong! “Barclay’s Bob Diamond to Non-Bankers: Drop Dead”.

Banks are net extractors of wealth. You know: the fees, the interest rates, the bailouts, the bonuses, the austerity, the union breaking, the China to Walmart conveyor belt, the exporting of jobs… Even in Canada they soak up a lot of resources that would be more useful elsewhere and believe me with the helping hand of the right government they will eventually be allowed to merge and expand and catch up with the Banking Leviathans that are doing everything in their might to keep the World gorging on a mountain of debt. I have no solutions to offer except that being aware of it and being right fucking pissed off about it is a good start.

Have a great day everyone!

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European Death Spiral – End Games – by Santyajit Das
http://bit.ly/icSRVf. (a very sober review).

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Christ Almighty if the Internet is such a wonderful tool of education HOW IS IT that the utter madness that is going on right now in the world of finance is allowed to continue? I have rarely felt as helpless and sick to the stomach as I do today… the facts are out there and nobody is facing up to the music and the fact that it WILL STOP again. Nothing has been fixed. NOTHING! Multiple trillion dollar compress bandages have been applied to the debt-clogged crater that once held the heart of the world economy and people are dancing around the maypole thanking the Lord for his miraculous bounty while the patient continues to hemorrhage internally. And all poor sods like me can do is tweet it and facebook it at whoever will listen like some apeshit crazy prophet of doom in neo-biblical times (because there will be another book of warning for future generations, most likely long after the Face has been ripped off this era of profligate insanity).

Rant off. Here’s what triggered it:

Why Is The US Taxpayer Subsidizing Facebook – And The Next Bubble?

Goldman Sachs … has effectively become a new form of Government Sponsored Enterprise. Goldman is not a venture capital fund or primarily an equity-financed investment fund. It is a highly leveraged bank, meaning that it borrows through the capital markets most of the money that it puts to work.

As Anat Admati (of Stanford University) and her colleagues tirelessly point out, the central vulnerability in our modern financial system is excessive reliance on borrowed money, particularly by the biggest players.

Goldman Sachs is a perfect example. Most of this firm’s operations could be funded with equity – after all, it is not in the retail deposit business. But issuing debt is attractive to shareholders because of the subsidies associated with debt funding for banks, and compelling to bank executives whose compensation is based on return on equity – as measured, this increases with leverage. If they have more debt relative to equity, that increases the potential upside for investors. It also increases the probability that the firm could fail – unless you believe, as the market does, that Goldman is too big to fail.

Social networking firms should be able to attract risk capital and compete intensely. They do not need subsidies in the form of cheaper funding (seen today as a more favorable valuation for Facebook) or in any other form.

Social networking is a bubble in the sense that email was a bubble. The technology will without doubt change forever how we communicate with each other, and this may have profound effects on the nature of our society. But investors will get carried away, valuations will become too high, and some people will lose a lot of money.

If those losses are entirely equity-financed, there may be negative effects but they will likely be small – in the revised data after the 2001 dotcom crash, there isn’t even a recession (i.e., there were not two consecutive negative quarters for GDP).

But if the losses follow the broader Goldman Sachs structure and are largely debt-financed, then the US taxpayer will have helped create another major financial crisis.

And if you think that sophisticated investors at the heart of our financial system can’t get carried away and lose money on Internet-related investments, read up on Webvan:

“During the dot-com bubble, Goldman invested about $100 million in Webvan, the online grocer that never got off the ground and eventually collapsed in bankruptcy.”

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Love him or hate him Niall Fergueson has a vastly better understanding of financial history than most… Definitely worth spending an hour and a bit with him to broaden your understanding of the historical background of fallen empires from the past and why the case for America will likely be no different, and much sooner and faster than most optimists would care to admit.

Niall Ferguson Empires on the Edge of Chaos

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