Highly recommended current fun stuff in the nation's smallest capitol below the fold.

 
1.  Juno at the Savoy Theatre

2.  Myra Flynn at Black Door.  This pic, as noted by WDH3, is from the really incredible Langdon St. Cafe where there's live music every night of the week!  Myra fans please note she will be in Waitsfield Jan 5.

3.  Mad Dub at Positive Pie. 

4.  A short walk to see our Capitol Building illuminated at night.

Pakistan, as you all know, is in a terrible moment right now.  Here's today's report from Strategic Forecasting, Inc., below the fold.

Update 3: List of Riots in Pakistan by City, Dec. 29 December 29, 2007 |

1603 GMT NOTE: The report below consists of new information about the riots in Pakistan first reported here. Details on the scale and method of arson in instances mentioned below has been limited. Updates will be made when more information becomes available.

Karachi

• Four people were killed Dec. 29 in shootings in Karachi in Pakistan’s Sindh province, and two of the deaths are confirmed, Stratfor sources in the country said. Twenty-six people were wounded in shootings, and some were looters shot by the paramilitary Pakistan Rangers.
• Stores in the Zamzama shopping district near Defense were looted and damaged.
• Seven large fires were reported, one at a stadium close to the U.S. Consulate, and one large tire fire in the Korangi area that can be seen from at least 4 miles away and is producing significant smoke.
• The Port of Qasim has been closed since the news of former Prime Minister Benazir Bhutto’s death.
• Residents are afraid to leave their homes during the three-day mourning period after Bhutto’s death.
• International flights and some domestic flights are operating in Karachi, and the route to the airport is secure during the day. The U.S. Embassy has prohibited its employees from taking domestic flights over the next few days.
• Several shops tried to open Dec. 29, but angry crowds forced them to close.
• The situation is “uncomfortable” for residents who do not have stockpiles of food.

Sindh province

• The National Highway in Sindh remains closed, and mobs are attacking and burning any vehicles traveling on that road, Stratfor sources in Pakistan said.
• A shutterdown strike continues, enforced by mobs armed with Kalashnikov weapons.
• Pakistan’s Civil Aviation Authority said some domestic flights will resume in the near future, and Pakistan International Airlines has resumed international flights to and from Karachi.
• No city in Sindh has a curfew, although curfews remain an option, police said.
• The army is present in the streets in the cities of Sukkur, Larkana, Badin, and Hyderabad. In Karachi, the army is only present in two neighborhoods. 

Naushahero Feroz

• On the National Highway, 150 vehicles were torched.

Hyderabad

• Gun battles took place between the Sindhi and Mohajir communities, wounding eight people. The clashes occurred despite army presence in the streets.

Khairpur

• Police and protesters clashed, at least 50 people were arrested, and one truck was torched.

Tech stuff isn't political — unless you're talking about blogs, real-time political gossip, data mining, research, etc. So with that in mind, Check out PC Mag Tim Bajarin's predictions for 2008.

For the full version here's the article.  Otherwise, here's the skinny.  My own comments in italics.

1. Smartphones Get Smarter and Gain Market Share. 

Think, iPhone copycats everywhere you look.  Except maybe not here in Vermont.  Heck, I'm still waiting for the $99 Palm Centro to become available here.

2. Flash-Based Laptops Arrive.

The 7 inch Asus EEE PC is pictured above.  The $299 model has 2GB flash, while the $399 model offers 8GB.  This is 2007's tech darling, a huge step up from the One Laptop for Every Child XO-1 and a new market leader in ultra portable PC market, with prior models running at $1200.

In the full article, Bajarin whines about 2008 models with 64 GB of flash memory not being enough compared to what can easily be considered overbuilt 160 GB desktops more appropriate for movie making than standard usage.  The introduction of flash-based laptops this year are coming out with mean and clean running Linux operating systems, which run just like Windows.  My desktop is a Dell 4400 with 768RAM and 16GB hard drive.  When Windows XP and all of the crud with Norton System Works  amped out my hard drive, I swiched to SimplyMepis (download locations listed here) and reduced hard drive consumption from 95% to 32%.  And this includes tons of free software, including OpenOffice, a high end graphics program called GIMP, and lots of games for the kids.

3. The Introduction of the “Basic PC.” Next year we will see a real push to create “basic PCs,” bare-bones computers priced around $275 to $350 and targeted at emerging markets. We've already seen similar products, such as the XO-1 laptop by the One Laptop per Child (OLPC) initiative and the ASUS Eee PC 4G, but they represent the tip of the iceberg in this category. And don't be surprised if this type of PC gets serious attention as a second, third, or even fourth PC for consumer homes. 

Ok, this is the whole quote and not the skinny.  It's actually a bit redundant since the type of Basic PC's he's referring to are the same flash-based laptops he just spoke of in Prediction #2.  The real opportunity offered by these types of laptops isn't about every home having 4 computers; it's about the new pricing availabiltiy to educational institutions. 

4. Social Networks Are Targeted by Botnets. As social networks gain in popularity, I expect them to become the next major target for security threats. 

It looks like you better pull down your MySpace/Friendster accounts. 

5.  Smartphones Become Targets for Viruses and Identity Theft.  

Wait, I thought smartphones were getting smarter? 

<!– start ziffarticle //–>

This is less of a diary and more of a question.

With Bush’s recent complaints of pork spending, I’m wondering if anyone has compared the 6 years of Republican pork spending against the last year of Democratic pork spending.

Does anyone have some data on this?

With a master's degree in diplomacy from the Fletcher School at Tuft's, Bill Richardson has batted in the .300's in international negotiations. 

With international affairs perhaps the leading concern for our next president, I welcome other GMDers to point to any other candidate who's batting average comes close.

Did I hear anyone say Bill Clinton who may ascend to First Laddie?  I might question his success.  NAFTA isn't turning out to be the greatest plan invented.

But even if you like Bill, it's quite a trade-off voting for Hillary.

Am I hearing “Richardson for vice president” or “Richardson for Secretary of State”   or “Richardson for Energy Secretary” (again)?  I can go there with you.  

But even after the long haul of this summer's primary run-up, I'm wondering what exactly is it that the breezy, GQ Edwards offers that is frankly more substatial in experience than Bill Richardson. 

I welcome your thoughts, and will refrain from responding — since you know where I stand.

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( – promoted by Jack McCullough)

Having grown up in Northfield, ostensibly one of the most conservative towns in Vermont, it’s been interesting to see a change in demographic over the last several years toward a more balanced political position.  And taking a leading role in our political life, Christopher Curtis is leading the charge.

Part of the demographic change is due to lower than average home values in a compact, high infrastructure, quality of life town.  First-time homeowners are delighted to discover an Olympic-sized public swimming pool,good broadband connections, and an excellent sidewalk system in the downtown area, and easy accessibility to entertainment and restaurants in Montpelier/Barre area.  Northfield also has easy access to I-89, Sugarbush, and the Chandler Opera House in Randolph.  Even in our own community, things are moving in a great direction with small eateries, along with top quality chocolate and coffee at Vermont Chocolatiers.

Another, more significant impact to demographic change is a result of developments at Norwich University.  The oldest private military college in America — and also the most progressive of its kind — is hiring a new round of young educators while it grows its campus.  As a general rule, Norwich professors do not participate or talk about politics.  But as educators (and friends) it’s pretty clear that these aren’t typical old-guard military folk.  In social circles, the atmosphere is changing.

And with all of this, the local Democratic Party has taken on new vibrancy under the leadership of Christopher Curtis, son of the late David W. Curtis who the VT Dems honor annually at the David W. Curtis awards banquet.

Christoper and his wife Abbey moved to Northfield in mid-2006 and are now raising their first-born son here.  Last fall he approached me with the idea of organizing the Dem party in this conservative haven.  To be clear, Northfield already had a local Dem organization led by Joe O’Brien.  But the party wasn’t very active, meeting once a year to appoint officers and delegates to Washington County.  Christopher shared an opinion that I immediately agreed with:  in order to advance the liberal cause, Democrats need to advance into traditional conservative geographical territories.  This was something that crossed my mind following the outcome of the 2004 election.  While some of my friends were so bummed that they began to talk about moving to New Zealand, I countered that they might consider moving to key counties in Ohio.

So Christopher, a Dem party family member, knew exactly how to transition the existing local party into a new, more vibrant effort.  Key existing members were contacted and brought into the transition.  A small house party led off the change.  And regular monthly meetings were organized.  

This month, Christopher included a food gathering effort to help the local food shelf, along with an interesting presentation.  The people coming out are young, engaged, and informed.  

So a big thank you to Christopher Curtis from Northfield, Vermont and beyond.  Happy Christmas to you and your family, and well wishes for all that comes ahead!

GMD readers, please join me in this token of gratitude by clicking “Thanks for your work, Christopher” below.  Let’s see how many numbers we can get to honor a bold, effective leader in the so-called home of Conservative, Vermont.

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From this evening's WaPo:

 Joseph Lieberman (Conn.), the 2000 Democratic vice-presidential nominee who currently lists his party affiliation as “Independent Democrat,” will break party ranks today to endorse Sen. John McCain's presidential bid, according to sources close to the Arizona Republican The announcement will be made Monday in New Hampshire where Lieberman's moderate credentials may well help convince influential independent voters to support McCain.

Maybe we should just call him Darth Lieberman. 

“It's a wholly rational panic.” 

In today's NYTimes OP-Ed, Krugman informs us that the Fed on Wednesday attempted to rescue the financial system for the fourth time in five months via a $40 billion loan to US banks.

4 rescue attempts in 5 months?  This is starting to look like a polar bear trying to find another melting chunk of ice to rest it's limbs on.

Reading Paul Krugman's ongoing assesments of the mortgage crisis can be a lot like watching “An Inconvenient Truth”, minus the package appeal.  Krugman pens an evolving, complicated, abstract story of high finance in the form of a serial op/ed in the New York Times.  Conversely, AIT's 90 minute Hollywood docu-drama about imminent climate change is accesible from a fold-down theatre seat with buttered popcorn readily available.

While it just isn't practical to eat popcorn while purusing Krugman on line, it might be a good idea to replace your cup of regular Joe with a good strong soup-bowl of Dark Magic Espresso Blend — hold the cream and sugar — 'cause it looks like it's gonna take some hoo-doo dark magic from the inner workings of the Fed, Wall Street, and foreign backers to kick our economy back in gear.

Everything — even complicated things — are easier to comprehend from the perspective of history.  Here's how I hope the story is told:  “How 13 million suburban home defaults ALMOST knocked over the US financial system — and how American fortune survived a staggering financial crisis.

Even if you're not an Econ 101 kinda person, this is something we all need to pay attention to — because it's not just about homeowner defaults.  The evolving financial crisis is on the cusp of evolving from a “mortgage crisis” to a large-scale banking meltdown. For those of us who are thinking about growing Vermont's economy, don't count on lending liquidity anytime soon.

“After the Money's Gone” is well worth the time it takes to read.  But just in case you don't click the link, here's the crux of the essay, minus Krugman's  easy-to-understand lead-in regarding investor confidence, the consequence of handing out bad loans, and the dynamic of a good 'ol run on the bank.

Enjoy.  And maybe you better get the popcorn after all.

It’s easy to get lost in the details of subprime mortgages, resets, collateralized debt obligations, and so on. But there are two important facts that may give you a sense of just how big the problem is.

First, we had an enormous housing bubble in the middle of this decade. To restore a historically normal ratio of housing prices to rents or incomes, average home prices would have to fall about 30 percent from their current levels.

Second, there was a tremendous amount of borrowing into the bubble, as new home buyers purchased houses with little or no money down, and as people who already owned houses refinanced their mortgages as a way of converting rising home prices into cash.

As home prices come back down to earth, many of these borrowers will find themselves with negative equity — owing more than their houses are worth. Negative equity, in turn, often leads to foreclosures and big losses for lenders.

And the numbers are huge. The financial blog Calculated Risk, using data from First American CoreLogic, estimates that if home prices fall 20 percent there will be 13.7 million homeowners with negative equity. If prices fall 30 percent, that number would rise to more than 20 million.

That translates into a lot of losses, and explains why liquidity has dried up. What’s going on in the markets isn’t an irrational panic. It’s a wholly rational panic, because there’s a lot of bad debt out there, and you don’t know how much of that bad debt is held by the guy who wants to borrow your money.

How will it all end? Markets won’t start functioning normally until investors are reasonably sure that they know where the bodies — I mean, the bad debts — are buried. And that probably won’t happen until house prices have finished falling and financial institutions have come clean about all their losses. All of this will probably take years.

By now I'm sure you all heard that Peter Welch will be voting against the funding bill. 

So perhaps a letter of thanks is in order for our Congressman.  It appears that his office is beginning to listen to Vermonters' opinions on his campaign issue.

Credit where credit is due, right? 

Nate Freeman 

For those who still think the government should not intervene in the mortgage crisis, consider this:

1.  Chrysler Corporation’s bailout in 1979;

2.  S&L bailout in 1989;

3.  Long-Term Capital Fund bailout in 1998;

4.  Airline bailout in 2001; and

5.  Not mentioned below, the Asian bailout by the IMF in 1997.

A fresh perspective from Robert Reich below the fold.

Moral Hazard Is for Suckers

People tend to be less cautious when they know they’ll be bailed out. But even when they’re careful, people cannot always assess risks accurately.

Robert B. Reich | September 24, 2007

Last summer, while sitting on a beach, I overheard a father tussle with his young son about whether the child was old enough to take out a small sailboat. The father finally relented. “Go ahead, but I’m not gonna save you,” he said, picking up his newspaper. A while later, the sailboat tipped over and the child began yelling for help, but his father didn’t budge. I put down my book, walked over to the man, and delicately told him his son was in trouble. “That’s okay,” he said. “That boy’s gonna learn a lesson he’ll never forget.” I walked down the beach to notify a lifeguard, who promptly went into action.

Letting children bear the consequences of their risky behavior — what some parents call “tough love” — can be applied to adults as well, and conservatives have made a virtual fetish of it. A few weeks ago, as George W. announced a paltry plan to help out a few of the millions of homeowners who got caught in the sub-prime loan mess, he reiterated the credo: “It’s not government’s job to bail out … those who made the decision to buy a home they knew they could never afford.”

People do tend to be less cautious when they know they’ll be bailed out. Economists call this “moral hazard.” But even when they’re careful, people cannot always assess risks accurately. Many of the mostly poor home buyers who got into trouble did not know they couldn’t afford the mortgage payments they agreed to. The banks and mortgage lenders that pulled out all the stops to persuade those home buyers to the contrary were in a far better position to know. So were the credit-rating agencies that gave these loans solid credit ratings, as did the financiers who bundled them with less-risky loans and sold them to other financial institutions.

The real moral hazard in this saga started when Federal Reserve Chairman Ben Bernanke cut the Fed’s discount rate (charged on direct federal loans to banks) and announced that the Fed would take whatever action was needed to “promote the orderly functioning of markets.” Translated, this means that lenders, credit-rating agencies, financial intermediaries, and hedge funds will be bailed out, one way or another, because they’re simply too big to fail. Note that behind every one of these institutions lurk thousands of well-paid executives who would have lost big if the Fed hadn’t come to their rescue. Even though they had more information and experience at risk-taking than the suckers who borrowed their money, moral hazard doesn’t apply to them.

When big entrepreneurs take big risks that fail, it’s amazing how often they get bailed out. The history of modern American business is littered with federal bailouts, loan guarantees, and no-questions-asked reorganizations: the Chrysler bailout of 1979, the savings and loan bailout of 1989, the airline bailout of 2001. Most bailouts, however, occur in the relative dark, such as the 1998 rescue of giant hedge fund Long-Term Capital Management, the not infrequent bailouts of under-funded corporate pension plans by the government’s Pension Benefit Guarantee Corporation, price supports for big agribusinesses facing market downturns, or the current bailout of Wall Street being engineered by Bernanke’s Fed.

CEOs get away with stupid mistakes all the time. Some, like Robert Nardelli, the former CEO of Home Depot, drive their company’s stock so low that their boards eventually oust them. But they leave with eye-popping going-away presents nonetheless. (Nardelli got a $210 million severance package.) If you’re an average American who gets canned from your job, even through no fault of your own, you probably won’t even get unemployment insurance (only 40 percent of job losers qualify these days). Conservatives tell us that unemployment insurance reduces workers’ incentive to find a new job quickly. In other words, moral hazard.

Some CEOs use bankruptcy as a means of getting out from under pesky labor contracts. Others use it as a cushion against bad bets. Donald (“You’re fired!”) Trump’s casino empire has gone into bankruptcy twice with no apparent diminution of the Donald’s passion for risky, if not foolish, endeavor. After all, his personal fortune is protected behind a wall of limited liability. But if you’re an ordinary person who has fallen on hard times, just try declaring bankruptcy to wipe the slate clean. A new law governing personal bankruptcy makes that route harder than ever. Its sponsors argued — you guessed it — moral hazard.

The little guys get tough love. The big guys get forgiveness.