A fellow named Sergey Aleynikov (who was interestingly a colleague of mine at another company) has been nabbed at Newark Airport, and stands accused of stealing software from Goldman Sachs where he was employed until recently, at the hefty remuneration of $400,000 p.a. Now 400k is the sort of thing that might make you and me call up an financial advisor and get the retirement plan going. Serge, a man of more robust ambitions, saw this salary as a mere stepping stone to a $1+ million new job with Teza Technologies in Chicago. And on the way to the exit at Goldman Sachs, perhaps inadvertently, Serge might have uploaded a few million bytes of Goldman’s proprietary trading algorithm software to a German site, no doubt for safekeeping and backup.

The FBI may be slow on the uptake when it comes to terrorists flying aeroplanes into towers, but here they acted swift as the wind, and apprehended young Serge, accusing him of stealing trade software.

Speaking with suitable righteousness, Assistant Attorney Joseph Facciponti has proclaimed:

“The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Facciponti said, according to a recording of the hearing made public today.

Someone who knows how to use this program could use it to manipulate markets in unfair ways, claims the bank via Facciponti. Hmm… don’t we know someone who knows how to use this program, and has been using it for these many years until young Serge decided to share it with the rest of humanity? Namely, Goldman Sachs?

Larry Tabb at the TABB group breaks down the unfairness of it, for us:

“Someone stealing that code is basically stealing the way that Goldman Sachs makes money in the equity marketplace,” said Larry Tabb, founder of TABB Group, a financial-market research and advisory firm. “The more sophisticated market makers — and Goldman is one of them — spend significant amounts of money developing software that’s extremely fast and can analyze different execution strategies so they can be the first one to make a decision.”

Someone could use the code “to implement the same strategies and maybe on certain stocks they can be faster and, in effect, take away money that would normally be Goldman’s,” Tabb said today in a phone interview. “The second thing that they can do is actually analyze the code so that they know what Goldman’s going to do before Goldman does it and kind of reverse engineer Goldman’s strategies and make money basically at the expense of Goldman.”

Now that explains Goldman’s pique: Serge’s actions allow everyone else to also manipulate the market, eating into their record-setting $11.6 billion earning (2007). Clearly the Federal Government needs to do something about it. Like arrest Sergey.

(via Bloomberg)

The Roma found themselves among the first victims of Nazi policies.

They were sent to die in the gas vans of Chelmno, and were subjected to gruesome experiments in the extermination camps. Up to 500,000 Roma are believed to have been killed under fascist rule.

Yet post-war European governments on both sides of the Iron Curtain denied the Roma Holocaust survivors any recognition or aid.

For denial of the Roma Holocaust, see Downplaying the Porrajmos: The Trend to Minimize the Romani Holocaust”:

A widespread interpretation of its meaning is found at “Holocaust” on the Anti-Defamation League’s website, where it states:

The Holocaust was the systematic persecution and annihilation of more than six million Jews as a central act of state by Nazi Germany and its collaborators between 1933 and 1945. Although millions of others, such as Romani, Sinti (sic), homosexuals, the disabled and political opponents of the Nazi regime were also victims of persecution and murder, only the Jews were singled out for total extermination (ADL, 2000).

A more scholarly interpretation, and one which names Romanies correctly, is found in the German government’s handbook on Holocaust education: 

Recent historical research in the United States and Germany does not support the conventional argument that the Jews were the only victims of Nazi genocide.  True, the murder of Jews by the Nazis differed from the Nazis’ killing of political prisoners and foreign opponents because it was based on the genetic origin of the victims and not on their behavior.  The Nazi regime applied a consistent and inclusive policy of extermination-based on heredity-only against three groups of human beings: the handicapped, Jews, and Sinti and Roma (“Gypsies”).  The Nazis killed multitudes, including political and religious opponents, members of the resistance, elites of conquered nations, and homosexuals, but always based these murders on the belief, actions and status of those victims.  Different criteria applied only to the murder of the handicapped, Jews, and “Gypsies.”  Members of these groups could not escape their fate by changing their behavior or belief.  They were selected because they existed (Milton, 2000:14)

The second aspect of the book-and the one which concerns me most-is the tone in which it is written. This is a book about Romani people written by someone who does not know any Romani people, and who admits to deliberately not seeking their input in its compilation.  No Romanies are credited in the acknowledgments.  Lewy has no expertise in Romani Studies, and apart from a couple of recent articles excerpted from the same book, he has never published anything on Romanies before this. It reflects one facet of a disturbing trend which seems to be emerging in Holocaust studies, most recently expressed on an Australian-based Holocaust website which proclaims that “just mentioning Gypsies in the same breath as the Jewish victims is an insult to their memory! (David, 2000).”  This statement differs hardly at all from that made by the Darmstadt city mayor who, in an address to the municipal Sinti and Roma Council, said that their request for recognition “insults the honor of the memory of the Holocaust victims” by aspiring to be associated with them (Anon., 1986), evidence that this kind of antigypsyism extends well beyond the confines of Holocaust scholarship. The motive for writing this book, therefore, was evidently not to add to our knowledge of Roma, but to support the Jewish “uniquist” position, Lewy’s swan-song upon his retirement from The University of Massachusetts.

Niall Ferguson is a man with tremendous qualifications. He is a Fellow of this and that prestigious institution (e.g: Hoover at Stanford), teaches at Harvard, not just History but also in the school of Business Administration, is in some way associated with Oxford, informs the public via the BBC, and so on. It is unsurprising that he is a regular on various expert discussions, interviews and so on. One such is the recent symposium on the economic crisis at the Met Museum. Present were our Scottish friend, along with ex-Senator and basketball star Bill Bradley, George Soros, doomsday man Nouriel Roubini, Robin Wells and Nobel Laureate and ever-left-tending economist Paul Krugman. Not one to tarry, Ferguson comes out swinging, voicing his approval for Milton Friedmanesque monetarism:

Now we’re in the therapy phase. And what therapy are we using? Well, it’s very interesting because we’re using two quite contradictory courses of therapy. One is the prescription of Dr. Friedman—Milton Friedman, that is—which is being administered by the Federal Reserve: massive injections of liquidity to avert the kind of banking crisis that caused the Great Depression of the early 1930s. I’m fine with that. That’s the right thing to do. But there is another course of therapy that is simultaneously being administered, which is the therapy prescribed by Dr. Keynes—John Maynard Keynes—and that therapy involves the running of massive fiscal deficits in excess of 12 percent of gross domestic product this year, and the issuance therefore of vast quantities of freshly minted bonds.

There is a clear contradiction between these two policies, and we’re trying to have it both ways.

It is appropriate to pause for a moment to admire the balls of a man willing, at this stage, to promote a monetarist-only approach and criticise Keynesianism. But moving from balls to brains, things get less admirable, in Krugman’s view (in response to Ferguson):

One way to think about the global crisis is a vast excess of desired savings over willing investment. We have a global savings glut. Another way to say it is we have a global shortage of demand. Those are equivalent ways of saying the same thing. So we have this global savings glut, which is why there is, in fact, no upward pressure on interest rates. There are more savings than we know what to do with. If we ask the question “Where will the savings come from to finance the large US government deficits?,” the answer is “From ourselves.” The Chinese are not contributing at all.

Those extra savings are, in effect, the savings that America has wanted to make anyway, but that US business is not willing to invest under current conditions. That is the way Keynesian policy works in the short run. It takes excess desired savings and translates them into some kind of spending. If the private sector won’t do it, the government will. There is actually no contradiction between the Federal Reserve’s actions and the actions of the US government with a fiscal stimulus. It’s very much necessary to do both. By buying a lot of private securities, the Federal Reserve is essentially going out there and playing the role that the private banking system is no longer playing properly; by engaging in investment, the federal government is playing the role that businesses are not now willing to play. All that debt-financed spending on infrastructure by the Obama administration is basically filling the hole left by the collapse in business investment in the United States. There is not an excess demand for savings that is going to drive up interest rates. The only thing that might drive up interest rates—and this is a real concern—is that people may grow dubious about the financial solvency of governments.

A real monetarist–like Milton Friedman’s teacher Jacob Viner, say–would argue (in fact, did argue during the Great Depression) that when the interest rate is near zero monetary expansion and deficit spending do not offset but reinforce each other, for essentially the reasons set out by Krugman. As Paul said in rebuttal to Ferguson: “There is… no contradiction between the Federal Reserve’s actions and… fiscal stimulus. It is very much necessary to do both…”

Normally the banking system buys bonds from corporations which then spend the money investing in plant and equipment. Right now that process has broken down, and until the banking system gets fixed the second-best is to have the government step into the role. As Krugman writes:

By buying a lot of private securities, the Federal Reserve is… playing the role the private banking system is no longer playing properly… debt-financed spending on infrastructure by the Obama administraiton is filling the hole left by the collapse in business investment….

Conclusion? Once again:

There is not an excess demand for savings that is going to drive up interest rates…

Niall Ferguson does indeed know a lot less than economists knew in the 1920s.

And in case there is doubt on the nature of the water that Ferguson is carrying, he offers this revealing passage:

Well, I tell you what, I feel depressed after what I’ve heard tonight. We are now contemplating a massive expansion of the state to substitute for the private sector because that’s the only thing Paul thinks will deliver growth. We’re going to reregulate the markets, we’re going to go back to those good old days. Where were you in the 1970s when all these wonderful regulations were in place? I don’t remember that going too smoothly. But what else are we going to do? We’re going to print money. Almost limitlessly we’ll print money. That’s going to be fine, too. And when we’re done with that, we’re going to raise taxes. What a fabulous package we have in store for us. You know, back in late 2007, I was asked what my big concern was, and I said, “My concern is that we’re going to get the 1970s for fear of the 1930s.” It’s very easy to forget, in your iron indignation at the failure of the market, where the true mainsprings of economic growth lie. The lesson of economic history is very clear. Economic growth does not come from state-led infrastructure investment. It comes from technological innovation, and gains in productivity, and these things come from the private sector, not from the state.

Water-carrying is a mild term for the proclivities of our tireless historian, whose apologia for colonialism was reviewed in the Boston Review by Vivek Chibber:

Ferguson’s defense of liberal empire has made him into something of a media celebrity: he is featured prominently on national radio and television, a much sought-after speaker on the lecture circuit, and even the star narrator of two television series. Although the attention is unusual for a professional historian, it is not entirely surprising. Here we have views that were, until recently, associated with the crackpot Right now being defended by a rising academic star who comes with all the status of Oxford (his previous employer) and Harvard. More surprising is the reception that his book has received in established academic journals and magazines. One might have thought that, in the most respectable organs of the liberal intelligentsia, a book calling for the resuscitation of colonial rule would have met with at least a few raised eyebrows. Instead, it has been given a surprisingly warm welcome. John Lewis Gaddis goes so far as to single out for special praise the call for the United States to colonize parts of the world to save them from their infirmities; in fact, Gaddis worries that the book’s other shortcomings might prevent a more serious consideration of the need for American “tutelage” of these deserving states. Further to the right, Charles Krauthammer has echoed Ferguson’s fond remembrance of the British Empire. In the fall 2004 issue of The National Interest he offers that the United States “could use a colonial office in the state department—a direct reference to British institutions.

 In reality, the Victorian era witnessed perhaps the worst famines in Indian history. Their severity, and the role of colonial authorities in this pattern of disaster, has been brought to light by Mike Davis in his stunning book Late Victorian Holocausts. Even before the onset of the Victorian famines, warning signals were in place: C. Walford showed in 1878 that the number of famines in the first century of British rule had already exceeded the total recorded cases in the previous two thousand years. But the grim reality behind claims to “good governance” truly came to light in the very decades that Ferguson trumpets. According to the most reliable estimates, the deaths from the 1876–1878 famine were in the range of six to eight million, and in the double-barreled famine of 1896–1897 and 1899–1900, they probably totaled somewhere in the range of 17 to 20 million. So in the quarter century that marks the pinnacle of colonial good governance, famine deaths average at least a million per year.

The below is the latest ad from Palm for its Pre smartphone:

A woman climbing a rock, with people in saffron robes dancing all around her, uplifting music in the background, as the voice intones: My life, like all of our lives, is made up of so many other lives…”.

Below is a collection of iPhone ads:

Notice a difference? One of them is full of vapid imagery, the other shows you in concrete terms what you can do with the device and why the device can do it better. Is this so difficult to grasp? That the user (consumer) is not an idiot looking for some sort of spiritual uplifting experience from a phone?