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Sit down, shut up, and take responsibility for your life as the adult you are.

There.  I said it right up front.

To whom?

Sharon Gochenour.

Who is that?  The crazy chick who wrote this diatribe:

The first thing—the reason I'm writing this article, and the reason I find it almost impossible to write this article—is that I went to the Massachusetts Institute of Technology for my bachelor's, starting in September 2006 and graduating with a degree in "Art and Design" (that means architecture) in June 2010. I usually tell people who ask that I went to school in Boston. This, besides being a factual inaccuracy, adroitly captures my ambivalence about the whole experience.

Oy.  First, Sharon is upset because MIT is, well, competitive.  Guess what darling?  So is the real world.  If you don't like that then you have options.  You can flip hamburgers or spin pizzas.  You can mop floors.  You can do all sorts of things.

But what you can't do is expect world-class opportunities to be dumped in your ****ing lap because the world is not your oyster!  It is, like it or not, filled with other people who are kinda interested in eating the same lunch you want to gobble down.

Now you can take the scraps or the caviar.  But to get the caviar you might have to whack other people over the head -- or stomp on their heads.  Did your parents not tell you this?  Go bitch at them if not.

Incidentally, it's perfectly fine for you to say "No!" to all of that.

But then you don't go to MIT!

Yes, I am bitter.

I am bitter that forty-eight hours of class and study per week was the official minimum expected of us, and that sixty hours of coursework was totally unremarkable.

I am bitter that when I had personal crises -- I got dumped by my freshman-year boyfriend, my family's home and business were flooded, I felt abandoned and directionless in my major -- I had so little energy left for coping that my life slipped out of control.

What the hell do you think is going to happen in the real world?

Let's say you go get a job tomorrow drawing, well, how about buildings?  You know, what you went to study?  Yes, architecture.  Let's also say you're really good at it.

You get hired to draw a building.  A very expensive building that costs millions of dollars.  It has a schedule to be built and the guys and dolls who put that together start selling the space in it.  Space that doesn't exist yet, because, well, you have to design it so they can build it.

You know, that job you have?  Yes.  You are under quite a bit of pressure to perform, yes?

Now, something bad happens.  Your Dad dies.  That's something that happens. All people die. Your father will eventually die.  Mine recently did.  It sucked.  I'm not going to tell you it didn't, because it did.  It will suck when your father dies too, if you have any sort of relationship with him at all.

There are lots of other bad things that happen to people too.  You might get married (real good, right) but then your spouse might decide to file for divorce.  They might make your divorce into a nearly 2 year hell complete with all sorts of false claims you have to defend yourself against, never mind the crazy amount of money you will spend in the process.

That's just an example, by the way.  There are dozens of others, all of them hypothetical but all of them very real risks.  We all face them every day; that's part of life.  It's not all roses darling; there are lots of thorns along the way!

If you think that studying 60 hours a week was hard, wait until something like that happens and you have to discharge your duties at a job at the same time you're dealing with a very personal and serious issue that is consuming your mind (and possibly your wallet as well!)  

Oh, and if you don't deal with it and get fired?  Now you've got more and very-pressing issues to deal with that go far beyond psychological pressure -- like buying food, shelter and the other necessities of life!

That's real life.  That's how it works.  And yeah, it sucks real bad but this is commonly called "adulthood" and whether you like it or not it's part and parcel of being an adult.

Indeed, this is arguably the defining difference between childhood and adulthood.  When you're a child these challenges are someone else's to deal with, at least the really big ones.  Sure, you still have to handle the emotional issues but you have others who are responsible for making sure the water bill is paid so you can take a shower -- and a crap, never mind having heat in the building (or a place to sleep!)  With adulthood comes the responsibility to manage these things on your own even when life really, really sucks.

What I want to see is an educational environment where there is not so much pressure, both subtle and not-so-subtle, to cut yourself loose from your support networks to go to a school like MIT. I want for students to respect their own needs for sleep, good food, and social interaction, instead of seeing those as some sort of "concession" to their weaker human natures.

Moreover -- though this would require change in the entire American system -- a strong educational environment needs to be free of the overhanging shadow of debt. Debt forces people into untenable and unproductive situations, like taking seventy hours of coursework rather than registering for another semester, or dropping activities they love rather than risking their grades over a scholarship.

Well, you got one thing right -- get the damn debt monster out of education.  You know how you do that?  You get the government out of it.  You stop treating student loans as "special" and instead treat them as unsecured credit cards as they were before the 1980s and beyond.  

Now lenders won't loan you crazy amounts of money because if you blow up they lose it instead of being able to hound you for it.

I suspect you had a basic economics class at MIT.  If you did you probably heard of this thing called "supply and demand."  It works everywhere it's allowed to.  We destroyed it in the 1970s and 80s by creating the ability to borrow money to go to school through various vehicles, all of them backed in some form by government force.  This of course created a lot of people who showed up waving money at colleges and they responded by ratcheting up the price.

Like every financialized thing we ever do the colleges and lenders got together and figured out how to take all but one dime of the value of their education out of your ass right up front.  This is why your "education" was so damned expensive and why, on balance, it's usually not worth it if you have to go for more than four years -- and often even if you can manage to get out on the original plan!



Well, guess what?  It was rainbow-chasing bull****!

Now I understand being bitter that you were deceived.  But you should be bitter at the college, at your High School which probably pimped this path to you in exactly that fashion emotionally if not financially and you probably ought to be really*****ed at your parents who probably did the same because their first and foremost job as parents is to give you the tools, emotionally and otherwise, to be able to deal with life (including detecting and calling "BS" on those who run this sort of exploitive crap) as an adult.

Students (even very smart ones!) are people, not tools needing to be ground into their proper shapes. They need to be encouraged and allowed to grow. 

You're an adult, Sharon.

Yes, you were hoodwinked.  I'll give you that without seeing your evidence, because I'm damn near sure it's true.  I've been writing about this very point for years; indeed, it's part and parcel of the book you can find advertised to the right of this article.

But there are two options available to you when this sort of realization visits you as an adult.  

One is constructive and one is destructive.

The destructive (to yourself) choice is to bitch, whine, and blame other people, while putting forward vague claims that others have a "duty" to "encourage and allow you to grow."  That's self-destructive because you are refusing to recognize the part of the scheme that you willingly participated in and, in addition, you're not altering your behavior and evaluation of others -- which played a major part in how this happened to you.

The constructive choice (for yourself and others) is to make damn sure the people responsible are held to account to the extent you were lied to or misled, take responsibility for the part of it that was your unrealistic expectations and the chasing of claims that you should have known with even a basic understanding of mathematics were impossible to achieve and do your level best to change things so those who follow you cannot be similarly hoodwinked as you were.

Your choice Sharon.

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Gee, I wonder how many people simply won't look -- but damn well should.

I've used both an iPhone and a BlackBerry for more than five years — and the Z30 impressed me so much that my iPhone 5S lost its appeal. I've stopped using my iPhone and now use the BlackBerry Z30 exclusively.

Uh, yep.

It's interesting seeing this coming from CIO.  And what's not even brought up is that if you have infrastructure at your company behind it you can partition the device so that it has two workspaces -- one in which the company has control and the second in which you do, and the two are distinct and secure from one another.

Another nice feature -- auto-connect of VPN service on any desired WiFi hotspot.  Open WiFi is nice for its performance and convenience (never mind not hitting your data quota on your cell connection.)  It's horrible from a security point of view, however, in that literally everything you send or receive can be seen by anyone within a couple hundred feet!  Most people don't think this is such a big deal but they should as anyone else in that nice cafe you're sitting in (or, for that matter, in their parking lot!) may have their laptop in "promiscuous" mode and be silently capturing everything you do!

The auto-VPN connection setting eliminates this problem; when you connect to said saved open WiFi hotspot the phone will automatically bring up the VPN connection back to your home or corporate gateway thereby encrypting all traffic over the open WiFi network and securing it.  Now you can have your cake and eat it too.  Once it's set up you don't have to remember to do anything and the enabling of this mode is shown with a little key on the top info bar of the screen.

Finally, the other feature that is mentioned is the "picture password."  I've had a great deal of fun with this when out drinking with my friends.  A couple of times I have described how it works (the number I selected must be at the place on the picture I previously selected) unlocked the phone while they are studying me do it in full view of the screen, then locked it and handed it to them.

You'd never let someone study you putting in your password on either Android or IOS (whether numeric or the "drawing" one on Android) because with any close observation at all there's a very good chance you just gave them your code.  While I'm sure that if you were to video record a BlackBerry user unlocking the device a sufficient number of times you could determine what it is, the expected risk through casual even if intentional and studious observation can be classified as "slim and none, and Slim just went home."

The other advantage to this mode of unlocking is that in addition to being quite secure it's fast; long alphanumeric passwords are secure but slow.

Sometimes you really can have it all.

H/t: stcm

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Oh my, this is amusing.... but predictable.

Drawn by the virtual currency’s jump in value last year, digital prospectors have turned the mining industry into an arms race as they buy expensive computing equipment and gobble up electricity. While that worked well as long as bitcoin’s value kept rising, smaller players are now being crowded out by bigger competition, high utility bills and declining prices.

“If you mine at the moment, you have to be very lucky to get anything,” said Mehmet Vatansever, who bought $16,000 worth of mining computers in February to chase after new bitcoins. “It’s a very difficult business.”

Right, because unlike physical mining in which your choice to dig into the ground in a given place doesn't impact whether someone else's choice to dig somewhere else wins or loses, in this game you're all trying to solve the same problem and the first guy to do so "wins."

This means that an "arms race" mentality is what you need to adopt if you want to try to make money.

However, the nature of the algorithm is that it gets harder over time (exponentially so) to solve the problem which means you expend more energy per unit of reward.

And that in turn leads to a new problem -- the price of the thing you "mine" must continually rise at a faster rate than the per-solution cost of solving does or you're destined to lose your shirt.

Now it is true that historically computing power has gotten cheaper over time.  However, the unfortunate reality is that you buy the gear in the here and now and then the next generation is faster and cheaper.  This means that if you wish to "mine" you must continually replace on a cycle that is probably quite short.

I had a problem of this general sort when I ran MCSNet.  We were continually replacing hardware that worked perfectly well but no longer could meet the demand; what is allegedly (according to the IRS) a capital asset and thus subject to depreciation schedules was in fact essentially a consumable!  Needless to say this makes for an interesting cash flow problem as the booked depreciation is nice in the future but you're no longer producing revenue with the equipment long before that gets recognized.

In this case the problem is at least as bad and quite-possibly worse since it is entirely possible to wind up with a negative rate of return simply on the power consumption, ignoring the capital cost.  That's a wall that is already being run into, incidentally, and is one of the reasons that one large "mining" complex is in Iceland.

You see, with computer gear you get to pay twice for the power.  First you pay to run the computer, and then you pay again to get the heat out of the room before it melts.  If you happen to be somewhere that has a lot of things that are very cold around then the second part is much cheaper than it is where the environment is warmer.

Nonetheless this was one of the original problems I identified with the protocol, including the fact that the integrity of the block chain requires that someone verify all the calculations and this transaction cost has to be eaten by someone.  The "someone" has historically been the miners, since they have to do the work anyway to do the mining.  

What happens when that cost is no longer an inherent part of someone else's "business venture" because solving these math problems has become uneconomic?

Tulips I tell you, tulips.

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In the coming months, the environmentally minded can go to Mosaic’s site and invest in portfolio of 20-year loans made to homeowners. (Each individual loan will be scrubbed of identifying information.) Mosaic is offering the loans through a partnership with solar installer RGS Energy.

The interest rate is 4.99 percent as long as homeowners pay down the loan with a 30 percent federal tax credit they’ll receive for installing a solar system. If they keep the tax credit, the rate jumps to 10 percent after 18 months.

“We think a solar loan if structured right can open up the market and make solar more affordable and accessible for more homeowners,” Mosaic co-founder Billy Parish told The Atlantic.

Ah, I see.

So if you spend the money and do not take the tax credit personally the interest rate is 5%, which is still quite high for a secured credit facility (secured by you getting tossed on your ass from your house!) in a world of zero rates and a 10 year that trades at 2.6%.

If, on the other hand, you don't do that and finance the entire amount the interest rate looks like a damned credit card.

Now let's look at the total payments.  Let's assume your "system" costs $20,000.  Note that the "tax credit" (1) may not be able to be carried forward after 2016 and (2) has to be used to pay down the principal.  So let's assume you don't cap out on the tax credit (and thus lose it) and do pay it down (and thus your effective financed amount is $14,000); the total payments would be $22,062.50.  This is probably why it looks attractive; over the 20 years you are only "paying" an effective $2,000 for the financing -- because you stole the rest of the principal from everyone else.

Now let's assume you can't manage to meet your tax bill while doing that.  Then you're ****ed as the system now costs $45,938.22.

That's assuming you don't default, by the way.

If you do you lose your house.

Explodo-loans, irrespective of how they're wrapped and presented to people, ought to be against the law.

H/t: Dmj, who alerted me to this one.

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2014-04-16 08:08 by Karl Denninger
in Editorial , 328 references

Let's cut the ****, shall we?

At Dow 16,000 we still are only 13% higher, peak-to-peak, than where we were before the collapse of 2008.  A full six-and-a-half years later.  Yet the economy, both locally and globally, is in vastly better shape than it was when we took that terrible tumble, down to Dow 6,800 in March 2009.

Americans have cut back on debt, and so have companies.


2013/Q4, 13105115.7, a level last seen in 2006/Q4.  "Cut back"?  Really?  Worse, ex mortgages this is not true at any level; there is $3,733.5 billion in non-mortgage consumer debt outstanding.  That is an all-time high; in Q4/2006 (just before the crash, remember?) that stood at $3,047.2 billion or nearly $700 billion less.

An awful lot of that increase since 2007, incidentally, is student loans -- exactly where it cannot be for sustainable economic progress since the younger generation has to eventually take the reins from us older folks.  This is nothing more than an economic Ponzi scheme with its cheering section led by people like Dennis who refuse to look at and argue from facts.

As for corporate debt it never decreased at all.  It now stands at $1.362 trillion, an all-time high.  In 2007/Q4, when the bubble started to pop, it was $1.098 trillion or approximately 19% less.

 Corporate debt has been refinanced at the lowest rates in 40 years.

True.  But since the truth is that corporations do not pay off their debts in aggregate (just as do not governments, when you look at the Fed Z1) a rate of an effective zero will not go lower; it will eventually, at some point, rise.

When it does how do you refinance an ever-growing debt without going bankrupt?

For businesses, the Internet of Things augurs a new wave of productivity increases.  Imagine the meter man (alright fine, or meter-woman) no longer having to visit each home to check the electric readings when the gadgets themselves zap their results to the utility’s computers.

That's nice.

How does the former meter reader buy his groceries?  

Oh, and before you tell me that deflation is so horrible, would you care to discuss that with Henry Ford's ghost?  He seems to have caused a massive deflation in the price of cars, but by doing so led to a literal explosion in the number of them on the road and the people who could afford to drive them.  

If deflation is so bad how come it did so much good in that instance?  Should you think this is an isolated incident or not applicable to the common economy as a whole perhaps you'd like to talk about computers, The Internet and the deflation in pricing there as well?

So what’s to worry?  This bull is getting old, that’s true, but it’s still a bull, and I’m thinking it still has room to run.

It may.  After all it most-certainly did in house prices in 2006 and in Internet stocks in 1999 and the first few months of 2000.

But you don't make a cogent argument for such a claim when your underlying alleged "facts" are flat-out lies, and determining that you are misrepresenting these facts takes nothing more than a cursory examination of the canonical statement of debt in the economy, that being the Fed's quarterly Z1 report.

Sunlight is an amazing disinfectant.

Update: I give Dennis credit for seeing the light on debt and coming clean on that.  As I like to say, "It is what it is."

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