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“A credit default swap (CDS) is a credit derivative contract between two counterparties, whereby the “buyer” or “fixed rate payer” pays periodic payments to the “seller” or “floating rate payer” in exchange for the right to a payoff if there is a default or “credit event” in respect of a third party or “reference entity”.”

…Riiiight, that clears up a lot??? The monumental complexity of the current financial system has thrust itself upon the country, delivering blow after blow as banks plummet into failure. So what are we to take from this, those of us who have no idea what the derivative market is, and don’t have millions invested?

So, simply put, a CDS is an insurance on (bad) investments – they pay in the event of a default on a debt or loan (credit event). This CDS market is not visible to the public, has no “real value”, and is largely untracked. The estimated value of all outstandnig CDS’s is to the tune of $60 trillion. Perhaps most important; they are not guaranteed. That means that every party trading CDS’s is essentially married to every other in an uncomprehensibly complicated web of trades.

American Investment Group’s (AIG) CDS portfolio is estimated at $400 billion – estimated because there is no clear market value. Also unclear is who exactly is tied to this portfolio; corporations, banks, hedge funds, even sovereign wealth funds, and many more. That is what they mean when they say, “shockwaves throughout the financial system”. When one of these players defaults big time, everyone is at risk.

What caused the meltdown? AIG basically has a credit rating. When their credit rating falls, they have to put up more money – kind of like a down payment on a loan. When AIG started going bad on some of its CDS’s, undoubtedly due to the “shockwaves” from the likes of Lehman Brothers, there credit rating dropped. This is where the $85 billion dollar credit line came from. AIG had to come up with around $80 billion to avoid going under – so, despite claimes to the contrary, the Fed provided the funds in an attempt to contain the meltdown.

Finally, what does this mean for you and me? Why does this matter at all? Shouldn’t these greedy companies be allowed to fail? Unfortunately, due to grossly unregulated financial markets, that would drag the rest of the system, indeed the whole country or world, into serious depression. Make no mistake, this is the worst state of the global economy since the 1930’s. In the near term, it means that lenders are less inclined to loan money, as the current climate necessarily means greater risk. Small business loans, car loans, school loans, everything.

Consider this; you got a loan for, say, $25 grand two months ago to rent shop space and renovate it to start a bakery. You’ve done all the decorating and preparing, now you need a business loan to buy all of the equipment and to start paying employees. No, you don’t have $15 grand to put down, no you don’t have great credit, or much credit at all – but 2 months ago the bank assured you it would be no problem. Now, given the economic climate, your loan just seems way to risky. So you are stuck with an empty shop space and $25 grand in debt. Now you default on that original loan, furthering the crisis.

So what is next? The government will be executing a massive, massive buyout to rescue the economy. I hate to say it, but it is a good thing. Well, it is the only thing really. The question remaining is whether or not they are going to do it well. $300 rebate checks just ain’t gonna cut it. Treasury, Fed, and politicians are working feverishly to find a solution – not very reassuring. My biggest hope is that this stimulus will reach the hands of the innocent. While it is imperative that banks stay afloat, the likes of AIG CEO Robert Willumstad – expected to receive a smooth $7 million payout for his 3 months at AIG, during which the company’s worth fell 97% – clearly deserve no tax dollars. My fear is that the massive buyout will be along the lines of the various and sundry (failed) attempts to save the economy, this time at a risk far to high to fail.


Humanistic Particularism Part 1 – An Identity Essay

I have resigned myself, to a large extent, to the inevitability of such spiraling phenomena as the whole of globalization and the many dimensions it encompasses. Emanating from this resignation is the realization that we might steer this in some way, to extract some heightened understanding, to infiltrate the walls of those which have so shamelessly gained from the definition of fortune on the lines of difference. Behind those walls are the beneficiaries of biological hierarchies, but also the peripheral fruits thereof. This is not the familiar call to regard sexes and races equally, but a call, as Gilroy defined, “to change the conceptual scale on which essential human attributes are being calculated.” Various movements stand firmly in the way of giving up the fight for equality, the action of these groups is less than stagnant, but apparently ignored is the decided lack of substantive effect. I argue to forfeit that fight sets the stage for undeniable reasoning. It is no longer valid to argue as distinct, disparate bodies, often turning on each other, losing sight of the real goal. In this type of system the politics often supersede the motivating identity and the goal is diluted, muddled, forgotten. The only logical step given the evidence available to us is to articulate our sameness, to actively leverage our likeness. The ivory towers have long defined these differences, have long divided and conquered. Those same towers now provide insight into a new realization, to irrevocable proof that the concept of identity is wholly constructed by and for society, and thus can equally be dismantled.

Among these facets is the very concept of identity. As the institutions upon which we rely for definition of self are compromised we react with varying, often monumental degrees of protest, reverting to smaller levels of identity or lashing out along the lines of that conceptual self. Unfortunately such action is perpetually marginalizing to involved groups rather than attacking the source of their fragmentation. The cycle commences, the sources of fragmentation divide, and let those divisions conquer themselves. Political behavior is increasingly being exercised along the lines of identity, to the detriment of disillusioned movements.

I have considerable difficulty reconciling my opposition to the homogenization of culture with my belief in the urgency to abandon movement, be it social, political, or otherwise, on the basis of difference in identity. But these views can be reconciled, and I seek to define their difference, realizing their relevance to the current nature of political thought. Culture may be the vital solution, transcending identity based upon difference. Culture is a unique identifier in the very absence of biological exclusivity. Culture may similarly be based on social constructs but defines itself on definable and livable lines, rather than wholly societal, and scientifically dis-proven ones. This concept is easily contested, but equally defendable. A likely argument lies on the foundation that culture be defined by its leaders; more specifically, by the physical or biological properties of its representatives and their power to assert them.

Cultures, and their respective value cores, are being absolutely compromised and endangered by the encroaching monolith of globalization. This places culture in an inimitable position – potentially catastrophic or opportune alike. Whether we base further movement on these lines will determine the fate. If we can respect these concentrations of centuries of experience, wisdom, and intellect as different but not necessarily in disagreement, if we can realize the cross-cutting reality of cultures existence and redefine our idea of self not as a single entity but a combination of loosely connected pieces, we might save it from the common fate of self-identifiers.


this house is a bass drum

response to “never in step,” below


We are always drawn to ponder circumstances that differ from our present situation.  It is somehow fundamental, in this historical moment, to imagine other existences, to wonder how the world–or one’s own life–might have been different, or might someday be.  Sometimes the thought even reveals its meta-imaginary character:  it comes as the blatant realization of a new a priori, that what is was never meant to be, it only just happens to be.  Only upon reflection does it appear that the universe has a “plan” for any of us; this idea is imposed on our perception of “the future” only after it has had its historical genesis in the minds of humans, not the other way around.  Freed of this basic constraint upon imagination–namely, the tendency to fail to imagine the world differently–we arrive at what philosophers call arbitrariness, which is at the heart of all fiction in that it allows the mind to identify, reduce and manipulate basic components of everyday-reality-as-perceived-by-human-beings.  Civilization itself, in all of its constituent dimensions–material, infrastructural, political, relational, mythological–is free to be designed from the ground up (or the top down, or both, or in some other possible manner of architecture).  Once mind has the building blocks of the world at its creative disposal, imagination comes to be defined by its pregnancy with other, possible, worlds.  This is why, for example, so much of (what I’d call) the truly exciting philosophical thinking of the twentieth century occurred in the primarily “literary” genre of science fiction.

But I digress…

Continue reading ‘this house is a bass drum’


Blogging “1984”

I went to my roommate’s bookshelf the other day looking for some good fiction.  I walked away with George Orwell’s “1984.”

I’ll admit, it didn’t hit me right away; but by the time I got to the door, I was laughing so hard I had to hold on to the wall for support.  Fiction…1984…oh, Cosmo, you kill me!

At this point, I must offer a confession, and ask that the high priests of political philosophy and liberalism forgive me my transgression:  truth be told, I’ve never read 1984 cover-to-cover.  Continue reading ‘Blogging “1984”’


Economic Behavior towards Oil

I have long contended that the artificially low cost of fuel in the US lends itself to its’ inappropriate and irresponsible usage. While it is ultimately the responsibility of the citizen/consumer to consider his/her actions and the long-term (environmental) effects thereof, other factors are at play.

Some recent research, summarized here, calls into question the extent to which higher prices, reflecting “real” costs, alter the behavior of consumers. An often-missed aspect is the fact that a considerable amount of driving is to-and-from work. This does not change the fact that commuting tens of miles to work suggests the need to reassess your living / work location(s). Nor does it justify the number of SUV’s or other inefficient vehicles, especially in the US. But it does bring up a real obstacle in the way of reducing dependence on driving, and ultimately on fuel. There remain few alternatives for most Americans to driving to work.

And as the non-reaction to higher fuel costs in the study are in European locations, it is hard to extract trends applicable to the comparatively-dismal state of sustainable transportation in the US. That is, for example, places like England boast twice the average MPG than the US. Alternatives such as hybrids are widely used and “conventional” vehicles are often subjected to taxes in metropolitan areas. Therefore, the capacity to “react” to higher prices is relatively lower than that of the US.

But the fact remains, vast rural areas, non bike/pedestrian-friendly cities, little public transportation infrastructure, and the lack of a real alternative vehicle fleet make it more difficult for Americans to curb old habits. Unfortunately, this is inherently speculative in nature, as gas prices are being artifically lowered and the current political campaign is flooding media outlets with misinformation on the state of oil geopolitics. The available avenues – vehicle purchases, use of public transit, and other measures – are showing measurable changes, but full reaction to high fuel prices are yet to be realized, pending (unlikely) equilibration of gas prices.


Polarity Rising

I’ve been thinking a lot about the concept of gentrification and upscale development; gated golfing communities, new “green” neighborhoods and condo complexes, etc.

If change didn’t occur, a flower would be but a seed in the ground waiting to bloom. Change is a new beginning…

I recently stayed in a condo at a monstrosity of a golfing community on the South end of NC’s coast. St. James plantation is its own town, incorporated in 1999. After passing the security gate I spotted the sign containing the message above. The irony struck me – as though changing 4,000 acres of woods and wetlands in this fashion enabled any seed to realize their flowering potential. Aside from that confusing message, the development doesn’t claim to shepherd the land in any noticeable way. Newly constructed homes of predictable style litter the landscape. Young pines shoot straight up like the long skinny needles they deposit on the ground – the pines are perhaps the sole floral beneficiaries of clear-cutting. The grass lawns are soaking wet, certainly not from rain; the drought remains treacherous. The water pumps up from underground irrigation systems, spewing out onto the driveways and roads. I was surprised by the absence of wildlife. The chemical-treated lawns undoubtedly detract the squirrels and birds, but the absence even of mosquitoes in the humid August air was a bit eerie. Golf courses are well-known to be some of the worst soil and water contaminants; I suppose if I golfed I’d have noticed its bug-zapping qualities previously. The geographical location of this development, directly along North Carolina’s intra-coastal waterway, is a bit worrisome.

Beyond the environmentally-devastating effects, the self-perpetuating social atmosphere is further troubling.  Some would applaud this bit – containing the super-conservative super-wealthy behind gates, limiting their interaction with the outside world. These golf-playing, Lexus-driving martini-sippers are free to discuss their $30,000 membership dues or $50,000 boat slips or…whatever… without bothering anyone. This view is held by many of my more-radical acquaintances, and I sometimes find myself agreeing. But upon further contemplation I have to disagree. It can’t be healthy for these people to think that their “quality” of life is normal. I imagine the children growing up there, attending schools exclusively populated by citizens of St. James. This flawless upbringing would undoubtedly give rise to proteges of the uber-rich, unaware of the realities of the other 99% of the world and thus unprepared to deal with it.

This troubles me greatly – what will these kids be like? What does this mean at the macro level? Will America become increasingly socioeconomically stratified to such an extent that each extreme is all but unaware of the other?

Just as the ridiculously affluent must be aware of the abjectly poor to understand the extent of their fortune – like the fact that their membership dues to the country club exceed the average annual income in this country. Similarly, the impoverished must be exposed to the rich to develop ambitions to overcome these injustices. Don’t mistake this for an argument that the “poor” are somehow at fault, or in need of aspiring to affluence. Rather,  the visibility and acknowledgement of economic disparity is a vital component to social change. The greatest and most incremental progressions in human history have resulted from the tendency of the oppressed to rise against (perceived) injustices. Neither extremes are acceptable at current levels, and nor should they be segregated in ghettos and gated communities, respectively.


A place designed to inhabit the land without inhibiting its true nature, revealing its wonder gradually, intentionally.

So reads the motto on the site of Briar Chapel, located west of Carrboro, just across the Chatham county line. Similar to its coastal counterpart, this town of a development spans thousands of acres – now clear cut to accommodate quick and predictable construction.  Unlike St. James, Briar Chapel (pro)claims to be “green”. Employing “green” builders and heralding fashionably environmental propaganda, Briar Chapel is clearly catering to the liberal affluence of the Chapel Hill area.

Recalling St. James’ welcoming message, I am struck by the contradiction. How, exactly, is the clear-cutting of countless acres — drastically and as quickly as possible it seems, paving and building — not inhibiting its “true nature”. Perhaps its true nature is a development, to be gradually and intentionally revealed via a massive-scale spec home project…  At any rate, they are constructing parks, schools (as per legal necessity), and leaving about 1000 acres of “natural” space. They claim to have an environmentally astounding stormwater management plan in place, high density housing, and sundry other environmental best practices. While I congratulate these efforts, I am a bit appalled at the inference that such construction, “…not only respects the land but creates a healthier environment for residents”. How have we come to allow, and indeed believe these messages portraying new home construction as the way to reduce our degradation of the natural environment?

I won’t dive too deep into my philosophy on the appropriate manner in which to develop, but suffice it to say the following: The point at which the reconstruction, renovation, or recycling of existing structures and their footprint, or the materials thereof is bypassed, the boundaries of green building have been irrevocably crossed. There is nothing green about clearing land. In fact, the environmental effects of building create an exponentially worsened atmosphere for the natural outplay of events (blatantly). At best, green building is better than constructing the mcmansions found in St. James-esque developments, but both must be categorized as some of the most destructve projects in the modern world of home construction.

It is dismally unfortunate that these well-intentioned volvo-driving, birkenstock wearings liberals are dupped into self-congratulation by these projects. Green has become one of the most lucrative endeavors; one of the deepest emerging markets across industries.


Members of such self-decribed progressive neighborhoods as Briar Chapel are quick to criticize developments like St. James for their lack of energy star compliance, green space, etc. To some extent they are correct, the comparative energy-savings are probably considerable. The amount of chemicals leaching into the groundwater in Briar Chapel is probably dwarfed by the golf courses of St. James, and the use of natural, local foods at their restaurants is a great step. But how have these two types of developments come to be considered two ends of a spectrum? In reality, they are quite similar.

The folks in Briar Chapel, while perhaps slightly less-wealthy than the St. Jamesers, are probably not too far from that top income bracket. And while they may not have affected as many as a more urban gentrification project, the displacement of the previosu occupants of the land (farmers, undoubtedly) is mitigated little by the construction of green buildings…

The fact remains that the relative footprint of these developments is very similar. In both cases we’ve created enclaves of affluence displacing farmland and woods while countless homes sit for sale, manufacturing a growing surplus in the midst of a housing crisis.  I try to adhere to the “to each their own” mantra, but at some point it becomes maddening – green has outsmarted itself. Further, the economic disparity has full fledgedly contaminated the physical realm.

As I drive through downtown Carrboro, NC – close to my place of residence – a giant crater of a grading operation envelops about a square block.  A massive skyscraping crane stretches across the horizon, casting a skeletal shadow along a town now well-accustomed to the concept and practice of gentrification. To emerge from this barren hole will be multi-use complex. A shiny sign along the fenced perimeter reads, “Greenbridge”…


bumper stickers i would sport

A friend and I, oozing over Obama’s acceptance speech, mused that we might actually rock a bumper sticker that said, “Barack Obama Is From The Future.”  So I hopped on over to a design-your-own bumper sticker website and lifted the images of some of the designs I came up with.  Enjoy.

(that one’s an inside joke among Boonies.  bet you can get it too, though…)

…and perhaps my favorite…