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Number of times in 2008 that the S&P 500 closed up or down 5 percent in a single day: 17

Number of times between 1956 and 2007 it did this: 17

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U.S. House Financial Services Committee Chairman Barney Frank said he wants to see people prosecuted for wrongdoing related to the financial crisis as lawmakers overhaul regulation of Wall Street.

Frank will call on attorneys general, bank regulators and officials from the U.S. Securities and Exchange Commission to outline plans for prosecuting and recovering funds from those responsible for the crisis, he said today at a news conference in Washington.

I guess he’s going to turn himself in by the end of the week…

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#include <stdio.h>
void main() {
int j = 0;

int k = 0;

printf(“%d, %d\n“, j, j++);

printf(“%d, %d\n“, k++, k);
}

Output:

1, 0
0, 0

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Next week ministers from around the world gather in Vienna to set international drug policy for the next decade. Like first-world-war generals, many will claim that all that is needed is more of the same. In fact the war on drugs has been a disaster, creating failed states in the developing world even as addiction has flourished in the rich world. By any sensible measure, this 100-year struggle has been illiberal, murderous and pointless. That is why The Economist continues to believe that the least bad policy is to legalise drugs.

“Least bad” does not mean good. Legalisation, though clearly better for producer countries, would bring (different) risks to consumer countries. As we outline below, many vulnerable drug-takers would suffer. But in our view, more would gain.

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In the 1990s a physicist called Lucien Hardy proposed a thought experiment that makes nonsense of the famous interaction between matter and antimatter—that when a particle meets its antiparticle, the pair always annihilate one another in a burst of energy. Dr Hardy’s scheme left open the possibility that in some cases when their interaction is not observed a particle and an antiparticle could interact with one another and survive. Of course, since the interaction has to remain unseen, no one should ever notice this happening, which is why the result is known as Hardy’s paradox.

This week Kazuhiro Yokota of Osaka University in Japan and his colleagues demonstrated that Hardy’s paradox is, in fact, correct.

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A Roman Catholic archbishop says the abortion of twins carried by a 9-year-old girl who allegedly was raped by her stepfather means excommunication for the girl’s mother and her doctors.

Good. The fewer members his fucked up church has, the better.

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By law, the Fed isn’t allowed to buy assets — it can only lend, as lender of last resort. That was a problem for the Bear Stearns bailout, because JP Morgan said it would only buy Bear if someone else assumed responsibility for the crap. Fed came up with this idea to start a shadow company, called a special purpose vehicle (SPVs were how Enron operated, creating “Chewco” and the like named after Chewbacca – the New York Fed called their SPV “Maiden Lane LLC” for name of the street the NY Fed is located on in southern Manhattan). The deal then was JP Morgan put $1 billion into Maiden Lane, the Fed put $29 billion in cash into it. Maiden Lane paid Bear Stearns $30 billion, which went straight back to JP Morgan as this deal happened simultaneously to JP’s purchase of Bear. So Morgan got $30 billion in cash ($29 billion net) and the Fed got stuck owning the crap, but was legally only making a loan to Maiden Lane, who was the legal owner (Maiden Lane was incorporated not in NYC, but in Delaware to avoid paying taxes). By the Fed’s own accounting – which is very different from a real company’s accounting – Maiden Lane has lost $5 billion between its creation and today.

The same problem happened in AIG, but this time there was no buyer. In Sept, the Fed bought AIG (80%) in exchange for an $85 bill loan. By Oct, it was clear AIG was still dying, so the Fed lent it another $40 billion. This $40 billion was restructured in November when the Treasury put in $40 billion of TARP funds, which was needed to bail out the Fed’s loan which had by this time gone bad. But essentially AIG had 2 problems: it had lent out safe securities with real values and used that money to buy shit mortgage backed securities — this was called ‘Secured Lending Facility’ which was done right under the nose of the state insurance commissioners. It was in the hole $20 billion. The other problem was the crappy insurance that AIG’s financial products company had written on other people’s shit mortgage backed securities – the credit default swaps (CDS). When the bad mortgages that AIG insured went bad, the insurance had to pay-up — but because it wasn’t called insurance, but rather derivatives, AIG hadn’t reserved any money against it. This had lost about $25 billion.

Using the loophole it had learned during Bear Stearns, the Fed set up two new companies: Maiden Lane II and Maiden Lane III. Two dealt with the secured lending and Three the shitty credit default swaps. The Fed lent each Maiden Lane $20 billion and $25 billion and then Maiden Lane paid off the investors that had either lent AIG the money to buy the shitty mortgage backed securities (ML II) and those who had the shitty mortgages and the corresponding insurance (ML III). To avoid booking a loss on the Fed’s balance sheet, because the Fed had some legal problems if either of these Maiden Lanes lost money, and because of a reporting requirement that Dodd had put into TARP which actually required the Fed to report to the Congress and the public about the cost to taxpayers from ML I, the Fed did some creative accounting. They still paid all of the investors off at full value (par), so that they didn’t lose anything. But they booked the loss on AIG’s balance sheet and kept Maiden Lane clean. This is the hidden story behind how AIG went from losing $38 billion during the first 9 months of 2008 to losing $61 billion in the 4th quarter.

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World War One, France: a radiographer wearing protective clothing and headpiece. Photograph by H. J. Hickman, ca. 1918. Credit: Wellcome Library, London

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After three months of investigation, California’s secretary of state has released a report examining why a voting system made by Premier Election Solutions (formerly known as Diebold) lost about 200 ballots in Humboldt County during November’s presidential election.

But the most startling information in the state’s 13-page report (.pdf) is not  why the system lost votes, which Wired.com previously covered in detail, but that some versions of Diebold’s vote tabulation system, known as the Global Election Management System (Gems), include a button that allows someone to delete audit logs from the system.

But to defend Diebold here: there is no evidence that the evidence-erasing button was used to steal an election.

sufficiently advanced incompetency is indistinguishable from malice, to mix some quotes…

[Quote:]

Palm Inc.’s new Pre smart phone will lure customers away from Apple Inc.’s iPhone when subscribers’ contracts start expiring in June, Palm investor Roger McNamee said.

“You know the beautiful thing: June 29, 2009, is the two- year anniversary of the first shipment of the iPhone,” McNamee said today in an interview in San Francisco. “Not one of those people will still be using an iPhone a month later.”

Sure. And I’ve got this bridge for sale as well…