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Archive for May, 2010

In my previous posts where I examined the Big Picture I had formulated several principles to underpin my theories. Conjugation principle,Inversion Principle,Uncertainty Principle,Cluster Principle and so on. There is one principle of which I had till now held back. What is Clean Slate principle? In order to explain it let me point out from the night sky.

There are several billions of stars, light of  which when added up must make the sky bright. Yet it does not. Supernovae of star sends materials helter-skelter across space creating new stars in its wake. Background radiation of the Big Bang still reaches us. With such persistence cosmic events leave their signature around. This being the case why we see the night still dark as though the light sent forth from stars is blotted out by an unseen hand? The sky, in a manner of speaking has become a clean slate.

Science explains this  as due to the nature of universe expanding at a rate that starlight shall not make the night seen as day. The nature of Day is as distinct as Night is the exclusion of light is. Day and Night are distinctly apart.  Nature of Truth as distinct from Falsehood is. In  short we have to see in the Objective Lessons of Nature, what makes them valid. Nature as a mirror to Truth. Man makes truth of Nature, truth of Experience, and Truth of Action  to justify himself. Absolute Value of Truth is not what he can demonstrate. Even so it is in context of Truth.

The Clean Slate Principle refers to Absolute certainties against which every finite value has to come up against. Thus we use our free will to explain the nature of evil. Do we not use sophistry to explain that God as Omniscient Being must have known evil beforehand?  If He knows evil He cannot be Good? We weave our own ropes of reason to hang ourselves with.

In the analogy of night sky light supplied by various sources is still rendered as though these were null owing to the expanding sky. Similarly in the run off of march of events supplied by good and evil motives, consciousness of evil on God’s part is negated by power and wisdom of God. He is not the conscience keeper of the evil one. Bad motives come from a different source than good motives that a man keeps and acts upon are in keeping with His commandments. So man who suffers like a wrongdoer for the good that he did out of good conscience is in His keeping.   Clean Slate principle makes God free from any unfairness or partiality .

Is God partial? I may sound contradictory.God or Truth being absolute is impartial. Then if the righteous I mean those washed by the blood of Christ,-the manifestation of Love as collateral with Truth or Just draw from the Nature of Things and from the interplay of Wisdom and power do we say that God was unjust? Nature as mirror of God in wisdom and power creates what may seem to us miracles. Shall we accuse God of favoritism? Can eye accuse the body ‘why I see evil?’ Ear of the person has already lent itself to hear  what smacks of evil, and the eye is drawn along. Had the body renewed itself to weigh things as they are and not be swayed to the side of evil around the person, ear and the eye would have had saved themselves from the bother. The existing order of Nature is like the body. A miracle is nature on an improbable mode from our rational point of view. God is not stooping Himself to be partial but wisdom and power operating in Nature manifest as a miracle.That is all.

Here is the mystery of Born Again experience and miracle in a nutshell. Though born again a believer,-who had tasted His lovingkindness in the way he could have a renewal it is in the ways things operate.Such a person may still backslide and sink deeper into sin. God was not fooled by his fall. God is freed from what one does with good motives or  actively fall into sin on another occasion.

The Clean Slate principle states that we create evil, result of our finite nature. According to Cluster principle evil creates much more:  misery is another byproduct. The Clean Slate Principle states that evil resulting from man’s free will remains at finite level. Absolute value of Truth is undimmed by finiteness of truth we demonstrate.

God remains inviolate because of this principle.

God as Truth is not made any whit less because of truth as demonstrated by man.

It is in the nature of God, because God is  Love, to exercise this principle. Though our sins be as scarlet the Clean Principle can render as white as snow, to use a Biblical expression. This principle is in conformity with conjugation principle.

PS. Day is distinct from Night. Light of the Sun makes Day and Night though littered with stars and visible to us, is still Night. In this connection let me point out some men due to some accidents in their biology may be effeminate or genetically feminine. Has God gone wrong? In His eyes they are as distinct as man from woman is. God looks at the soul that is according to the Clean Slate Principle makes man and woman, distinct and clean. To God there is no confusion as we may have.(this is an amplified version of my previous post dated 18Feruary,2010)

benny

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Great Britain was interested in charting the Northwest Passage and there was some 500 kilometres left unexplored so the British Admiralty sent a well equipped Arctic expedition to complete it. Sir John Franklin received the command HMS Erebus on 7 February 1845. Captain Francis Crozier in command of HMS Terror accompanied him. The crew were mostly Englishmen and the ships were fitted with steam engines and carried three years’ worth of conventionally preserved or tinned preserved food supplies. Unfortunately, the latter was supplied from a cut-rate provisioner who was awarded the contract only a few months before the ships were to sail. He had canned using his own process that led to sloppily-applied beads of solder on the cans’ interior edges and allowed lead to leach into the food.The expedition was last seen by Europeans on 26 July 1845, when Captain Dannett of a whaling ship Prince of Wales encountered Terror and Erebus moored to an iceberg in Lancaster Sound.

It is now believed that the expedition wintered in 1845–46 on Beechey Island. The ships became trapped in ice off King William Island in September 1846 and never sailed again. According to a note later found on that island, Franklin died there on 11 June 1847. To date, the exact location of his grave is unknown.

After two years and no word from the expedition, Lady Franklin urged the Admiralty to send a search party. Because the crew carried supplies for three years, the Admiralty waited another year before launching a search. Eventually, more ships and men were lost looking for Franklin than in the expedition itself.

In 1854, Dr.John Rae while surveying the Boothia Peninsula for Hudson Bay Company discovered the true fate of the Franklin party from talking to Inuit. He was told both ships had become icebound, the men had tried to reach safety on foot but had succumbed to cold and some had resorted to cannibalism. Rae’s report to the Admiralty, in a letter headed “Repulse Bay, July 29, 1854,” was published in The Times the day after his arrival back in London on 22 October 1854. This report to the Admirality somehow leaked to the press, which led to widespread revulsion in Victorian society, enraged Franklin’s widow and condemned Rae to ignominy. One of the most eloquent and outspoken critics was the novelist Charles Dickens. It was inconvenient truth. The British Establishment wanted a hero and they made Sir John Franklin one and as the discoverer of Northwest Passage. In the process Dr. Rae the hero of Orkeny was denied the fame due to him.

Reasons why a man is wrongly euologized as the discoverer of North West Passage on insufficient grounds and a man who was entitled to it on patent merits are diffuse: that officers and men of the Royal Navy should be accused of cannibalism or word of Inuit could be trusted as Dr.Rae did was unthinkable in the prevailing mindset of Victorian England. Rae was criticized because he had not gone to the scene of the tragedy to confirm the story, and he was accused of having rushed home to collect the 10,000pounds offered by the British government to anyone who ascertained the fate of Franklin and his party. Rae defended the credibility of the Inuit accounts, and insisted he had not received sufficient information to locate the site of the tragedy until it was too late in the season to continue the search.( Despite the protests of Franklin’s widow, the government’s reward of 10,000pounds for discovering the fate of the missing officers and men was finally granted to Rae and his men.)His adoption of native methods of travel in the Arctic was disapproved of by the Royal Navy.He was, however, accepted as a friend by the Inuit, for whom he had great admiration. Dr. Rae did not softpedal when he found the British naval officers and others who formed snap judgements after spending only a short time in the Hudson Bay company’s territories: “These self-sufficient donkeys come into this country, see the Indians sometimes miserably clad and half-starved, the causes of which they never think of enquiring into, but place it all to the credit of the Company.”

After long and fruitless search it fell to Lady Franklin to send an expedition by her own means. The Fox (177 tons), a three-masted schooner with auxiliary steam power, was purchased, and she put Francis Leopold M’Clintock, who had been promoted to captain in charge.His charge was to recover any survivors, retrieve relics, and to confirm that her husband’s expedition had discovered the Northwest Passage. Money was raised by subscription; the British Admiralty generously contributed many of the supplies. Refitted and strengthened, carrying twenty-eight months of provisions, the Fox left Aberdeen, Scotland, at the end of June 1857.

Tailspin: In his lifetime Rae was a controversial figure. In the 20th century Rae has been recognized as an innovator in techniques of survival in the north, and as the forerunner of the great Arctic explorers Roald Amundsen and Vilhjalmur Stefansson, both of whom acknowledged their debt to him.

I owe this post to BBC- Ray Mears’ Extreme Survival series

( Ack: wikipedia,libweb5.princeton.edu;www.biographi,ca-R.L Richards)

benny

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Smartest Crooks Know Law is on Their Side

Enron scandal did not happen by itself. It was made to happen by some crooks with lots of help from other agencies. For example Arthur Andersen one of the largest audit and accountancy partnership went out of business by playing along. Where did Enron get such a clout so suddenly and so authoritatively? It could not have been coincidence that natural gases were deregulated in 1985 and also marked the founding of Enron. How much politicians in office or outside (but with power to help the company along the way) shall be a debatable point. Remember the company’s television commercial of not so long ago, ending with the reverberating phrase, “Ask why, why, why?” That question we may phrase it as Ask Who,who,who,who?

Enron was formed in 1985 by Kenneth Lay after merging Houston Natural gas and InterNorth. With the coming of Jeffrey Skilling it was time to set special purpose entities, and it took care of accounting loopholes to hide billions in debt from failed deals and projects. Chief Financial Officer Andrew Fastow and other executives were able to mislead Enron’s board of directors and audit committee as well as pressurize Andersen from looking closely at high-risk accounting issues.

Stock prices of Enron at US$90 per share in mid-2000 caused shareholders to lose nearly $11 billion when it plummeted to less than $1 by the end of Nov.2001.On Dec.2 2001 Enron filed for bankruptcy. It was the largest corporate bankruptcy in U.S. History and also largest auditing failure. Employees and shareholders received limited returns in lawsuits, despite losing billions in pensions and stock prices. As a consequence of the scandal, new regulations and legislation were enacted to expand the reliability of financial reporting for public companies.

On looking back what was really the compelling reason for the United States Congress to pass legislation deregulating the sale of natural gas? It was all too plain that it was to give traders such as Enron to sell energy at higher prices, allowing them to thrive. After producers and local governments decried the resultant price volatility and pushed for increased regulation, strong lobbying on the part of Enron and others, was able to keep thefree market system in place.

McLean and Elkid in their book The Smartest Guys in the Room, “The Enron scandal grew out of a steady accumulation of habits and values and actions that began years before and finally spiraled out of control.”Risk takers ought to be awarded for their guts. It is an American quality’ In the end it proved crooks jumped and the spectator applauded bravely watching their motions calculated to deceive there was no hoop to begin with. When some express outrage at government controls think of Enron. It was fraud perpetrated on unsuspecting nation by people who were responsible to set checks and balances and defend the man on the street who voted them to office.(ack:wikipedia)

Free market shall allow such entities as Enron to exploit the public with the same ease as raising prices in commodities artificially by vested interests. In the case of state intervening there can be failures as mentioned in Gulf Oil Spill.

Pity that democracy is earmarked for humans withtheir faults:poor judgment greed, malice and lack of opportunites in their youth or neglected.

benny

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Gulf Oil Spill

A blowout on April 20 led to huge fire and sinking of the Deepwater Horizon drilling rig in the Gulf of Mexico.

blowouts (explosions, followed by fire) are possible when wells are being drilled. The oil industry depends on technologically advanced equipments to deal with such eventualities. One way they do is to study with computer simulations. ‘If one tweaks one part of the equipment to make it stronger (to deal with the higher pressures, and greater temperature differential between the hot oil and the cold water), it can cause unforeseen problems with another system that interacts with it. In short technology is merely groping in the dark hoping the ground realities ever remain true to computer model.It is like a blind shooter who is the fastest draw may yet find his mark because of his speed. What we need to concern ourselves is that where one gets the problem licked it is more likely something else could go wrong from an area least expected.

The earliest oil wells in the Gulf of Mexico were in shallow waters near the coast. But as these wells have become depleted, it has been necessary to drill in ever-deeper waters. When one drills in deeper water, the challenges are greater–the pressures are greater, the temperature of the oil is higher, and the stresses on the metals involved are greater.

With such likely ‘environmental disaster scenario ‘one expects government agencies would be more vigilant to protect their green wealth,flora and fauna that could be wiped out by disasters.

In this case the government regulator downplayed environmental impact of spill.

In a 2007 the Interior Department’s Minerals Management Service presented environmental impact statement for the Western and Central Planning Area Sales, which includes the Macondo Prospect where the Deepwater Horizon rig exploded In the document which covers oil drilling leases from 2007-2012

Offshore oil spills resulting from a proposed action are not expected to damage significantly any wetlands along the Gulf Coast… Overall, impacts to wetland habitats from an oil spill associated with activities related to a proposed action would be expected to be low and temporary.” (emphases are provided by the writer of the Huffington Post. Ack:The Huffington Post-May 3,The Oil Drum report of April 28,2010 by Gail the Actuary)

benny thomas



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In recognizing a person there are certain features of the person that is peculiar to the person. Gait recognition is as unique as his voice. A person’s finger print or blood group adds to his individual characteristic. Visual clues we rely for such recognition one may say is basic for a appreciating caricature. In the pre War days cartoonists had a field day using tooth brush moustache, an umbrella or a cigar that gave the reader a clue to the identity. Toothbrush moustache was the trademark of Hitler as an umbralla characterized Chamberlain. Churchill’s cigar and his baby face were as easily identifiable as the profile of Hitchcock was later.

A face may be drawn and many details of it may be left out and still one may recognize it. Suppose one goes on removing features there comes a point the face is no longer identifiable. This point where such a change occures is Point of Recognizable Limit PRL

Let us apply the same principle to economics. Equilibrium is the word.

The term equilibrium is used to suggest a state of “balance” between supply forces and demand forces. For example, an increase in supply will disrupt the equilibrium, leading to lower prices. Eventually, a new equilibrium will be attained in most markets. Then, there will be no change in price or the amount of output bought and sold — until there is an exogenous(1) shift in supply or demand.

Not all economic equilibria are stable. if a movement out of supply/demand equilibrium leads to an excess supply (glut) that induces price declines till the quantity demanded equals the quantity supplied.

(1)Exogeny:a change in consumer tastes or preferences works from outside. Dress from animal skins, fur for example alligator shoes may go out of fashion since people are conscious of conservation, ethical living.Naturally it shall lead also changes within(endogenous) till equilibrium price is arrived.

benny

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Economics for Dummies

In trying to understand the economic meltdown of 2008 what we need to accept is a simple truth no single cause shall ever be found(1). Scholarly hairsplitting on the Great Depression of 1929 has not yet settled what caused it.The school of Milton Friedman and of Joseph Maynard Keynes have their adherents and their positions are deeply entrenched so any of these more or less expresses itself in the economic thinking of nations. Those who believe in a large role for the state in the economy believe it was mostly a failure of the free markets and those who believe in free markets believe it was mostly a failure of government that compounded the problem. This being the case one cannot rest assured a single cause made it happen. Such inexactness rules the market forces just as supply- demand can never match without pricing coming into the play. Thus there are many factors that caused the meltdown of 2008 or depression of 29..

One law was set in place as a result of the Depression of 29.

Glass- Steagall Law of 1933 divided banks into commercial and investment banking. This law resulted in Federal Deposit Insurance Corporation for insuring bank deposits.Rediscounting is a way of providing financing to a bank or other financial institution. Especially in the 1800s and early 1900s, banks made loans to their customers by “discounting” their customer’s notes.

Such a note is a paper document, in a specified form, in which the borrower promises to pay a certain amount at a specified, future date. For example, assume that a customer wants to borrow $1000 for one year. In exchange for giving him $1000 today, the bank might ask him to sign a note promising to pay $1100 one year from now. The bank is “discounting” the note by giving the customer less than the note’s $1100 face value. The extra $100 is the bank’s compensation for providing the $1000 to the customer before the note matures,The Federal Reserve System in turn provided financing to the bank by rediscounting this note by giving the bank $1050 in exchange for this note. This Federal Reserve System was the bugbear for certain financiers who vilified it as state intervening in the free market.

Why should these financiers castigate FRS if they were set in place to oversee an orderly transaction between supply and demand factions across the counter?

Naturally for those who wanted to take risks and self aggrandize the law was an obstacle. Gramm-Leach Bliley act of 1999 was enacted precisely to cut the ground from under the feet of FRS from effectively functioning. This was done to give unfair advantage to Citicorp a commercial bank holding company.

Citicorp-a commercial bank holding company merged with an insurance company in 1998 to form Citigroup, a corporation combining banking, securities and insurance services.This combination, announced in 1998, would have violated the Glass-Steagall Act and the Bank Holding Company act of 1956 by combining securities insurance and banking. The law was passed to legalize these mergers on a permanent basis.

Also note the curious fact: the Gramm-Leach-Bliley Act was passed in November 1999, repealing portions of the BHCA and the Glass-Steagall Act, allowing banks, brokerages, and insurance companies to merge, thus making the Citigroup/Traveler Group merger legal.Top Citigroup officials were allowed to review and approve drafts of the legislation before it was formally introduced.

Also noteworthy is this:After resigning as Treasury Secretary and while secretly in negotiations to head Citigroup, Robert Rubin helped broker the final deal to pass the bill. He later became one of three CEOs that headed up CitiCorp.

Was Citigroup for serving the nation or for serving the vested interests?

2

Two years ago (2007)Citigroup was worth $273bn. Now it is worth just 20bn. This loss was not incurred in the pursuit of giving service to the clients fairly and responsibly as was expected of a commercial bank according to its original avowed principles. In the climate of reaganomics and unfettered risk taking to give heavy profits to a chosen few, the CitiCorp outplayed itself. The citiCorp was in trouble It tried to cover its credit crisis by brazenly trying to do just the opposite:Citigroup suffered a significant setback at the end of September, when its deal to buy regional bank Wachovia was trumped by an offer from rival Wells Fargo.(If the deal had gone through, it would have given Citigroup billions in additional deposits, boosting investors’ confidence and possibly preventing the steep share price sell-off.)

It has been battered by the meltdown in sub-prime mortgages – made to people on low incomes or poor credit ratings.

Citi has lost heavily, and its share price has fallen from over $55 in 2006 to less than $4, on par with lows last seen in late November when the US Treasury announced a $45bn rescue plan accompanied by a $306bn guarantee for Citi’s most risky loans.

If the bank had been allowed to collapse, it could have caused financial havoc around the globe, seizing up fragile lending markets and causing untold losses among institutions holding debt and financial products backed by the company.

Citigroup’s operations stretch around the globe with 200 million personal bank accounts in more than 100 countries.

In 2007, the bank’s total revenues topped $159bn, not far off the GDP of Chile.

Recent creation

Citigroup itself as a unified institution is relatively new. It was formed in 1998 through the $140bn merger of the bank Citicorp and the financial conglomerate and insurance firm Travelers Group.

However, the history of the bank dates back to the earliest years of the United States, with the foundation of the City Bank of New York in 1812.

Ever since, the bank has played a central role in the financial history of the US.

By 1895 the National City Bank of New York, as it had become, was the largest bank in America.

In 1918 it was the first American bank with more than $1bn in assets, and by 1929 had become the world’s biggest commercial bank.

In 1955 the bank altered its name to the First National City Bank of New York, and then in 1976 became Citibank – while its holding company changed its name to Citicorp.

In the 1970s, the bank was one of the first to pioneer the use of ATM machines, and by the 1990s it had become the world’s largest issuer of credit cards and charge cards.

Mergers

Through a series of big mergers, Citi then built itself into a financial giant – offering customers everything from personal bank accounts and credit cards, to investment banking and wealth management.

The idea behind these mergers, with banks such as Mexico’s Banamex and Poland’s Bank Handlowy, was to create a financial group which would be big enough to deal with any crisis.

However, critics say that crucially Citi failed to control its expenses, and as it grew it became unwieldy and unfocused.

The losses that Citigroup built up as as result of the credit crisis have exposed some of the bank’s problems that critics claim had been hidden by profits during the years of booming house prices.

Group profit soared from $17.8bn in 2003 to $21.5 billion in 2006.

But as the crisis intensified, Citigroup’s fall has been equally dramatic, culminating in the $8.29bn loss during the October to December quarter in 2008.

Without such a deal, Citigroup had few options but to go cap in hand to the US government.

Ack: wikipedia, BBC News16 January 2009 -tim bowler- business reporter/ citigroup)

benny

(1)In relation to the 1929 downturn, historians emphasize structural factors like massive bank failures and the stock market crash, while economists (such as Barry Eichengreen, Milton Friedman and Peter Temin) point to monetary factors such as actions by the US Federal Reserve that contracted the money supply, and Britain’s decision to return to the Gold Standard at pre-World War I parities (US$4.86:£1).

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Tiger by the Tail

Economists think many of the 8.4 million jobs lost during the recession are gone for good. Ordinary Americans one fine morning got up from their beds and found reality was a nightmare. Their American dream always were in technicolor but incompatible with those who made their home with one dollar a day.

American workers now compete with cheap foreign labor. How come the foreign labor has come to be part of the American dream?

Profit, profit for some happy few determines market economy. Some may call it social market economy or free enterprise. Against the mirror of profit American worker will take a look. Land of the free or home of the brave are what he shall not see therein.

Sadly an average American for all his sense of fair play and decency is sold down the river so cheaply. Outsourcing work to Africa or in India may not be patriotism as an idea but economy in practice.

2.

Lately we heard lot of brouhaha about global village and free enterprise. Didn’t we? Dreams when put on the global market are like moving targets in a shooting gallery. Anyone who has a two cents or dinars will try their pot luck. Consider the kind of trash China dumps on other nations? Their medicine, toys have a disconcerting way of becoming lethal when distributed in other parts of the world. Their milk products and baby food were not free from taint, either abroad or at home. It is against those who hold life cheap and no better than a mindless robot, an average American must compete. In the final analysis in the matter of profits those big czars do not give a damn for their social obligations either to their fellow men or to their country. Economy is a tiger that we have lovingly fed and nourished and we have the option of ending as cyphers or in its belly.

Benny

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