Saturday, February 28, 2009

No astronomy for average Americans!

Someone apparently showed John McCain -- and by "John McCain", I mean, "one of his aides" -- how to twitter. So we've been treated to a list of his Top 10 Porkiest Projects in the 2009 Omnibus Spending Bill. Most of them are science projects, but nothing makes me more irate than his #2 pick:
#2. $2 million “for the promotion of astronomy” in Hawaii - because nothing says new jobs for average Americans like investing in astronomy

I love the elitism here, that average Americans shouldn't bother with any interest in astronomy or any other science. For a variety of reasons, astronomy is a field that gets people excited about science. It's a great gateway to get people interested in other, related sciences, such as physics, chemistry, and biology. It's great motivation for the relevance of math classes. From here, we can get more people in STEM careers, and so on. What good comes from mocking science outreach to average Americans?

Is McCain bitter about this -- and, as we heard during the debates, the planetarium projector at Adler Planetarium [PDF] -- because it's astronomy money that's not going to Arizona? Or did he fail an astronomy class at some point in his life? Either way, I am so tired of the persistent anti-science attitude from the Republicans.

(I realize this was all over the blogs yesterday, but I have only just now calmed down enough to post without flailing about in all caps.)

Sunday, February 15, 2009

Ponzi Scheming on the Beach

The other day there was a new report on an investigation into a possible Ponzi scheme, this one run by R. Allen Stanford, a "flamboyant Texas billionaire" who claims to be related to Leland Stanford (Jr.) (but that also seems to be a fraud). The key point which has led to this investigation is:
Several federal agencies, including the Securities and Exchange Commission, the F.B.I. and the Internal Revenue Service, have spent “many months” looking into the business activities of the Stanford Financial Group, which is based in Houston, and Mr. Stanford’s bank based in Antigua, which issues high-yielding certificates of deposit, according to two individuals briefed on the investigations who were not authorized to speak publicly.

The focus of the investigations appears to be how the bank could issue C.D.’s that pay interest rates that are more than twice the national average.

This story reminded me of a conversation I had with a guy sitting next to me on an airplane, back in 1999 or 2000 (pre tech-bubble crash). This guy told me about a fantastic investment opportunity he had gotten involved in in the Caribbean at one of these off-shore tax havens such as Antigua. He went down there on one of these investment/timeshare type cruises where you get a couple of free nights as long as you listen to the hard sell (which he bought). Apparently, there's a shadowy international banking cabal that controls all of international finance. Most importantly, they control the Federal Reserve, whose sole duty is to sabotage the US economy and take all our profits. (We didn't need the Fed for that, although Greenspan certainly didn't hurt!) (For a summary of the conspiracy theorist myths and rebuttals, see this link, although I found this through google, and can even google be trusted...?)

So what these people were selling was a way to invest outside the US and get much better interest rates than were available in the US, because you weren't at the mercy of the manipulations of the Fed. And all this guaranteed with no risk, of course! But there was an interesting catch. In order to access his money, he had a regular ATM card attached to some bank account somewhere. And (a) all ATM cards have per-session and per-day withdrawal limits and (b) they warned him if he brought too much money back into the US, the IRS would find out and take all the money away, because we can't have people thwarting the shady banking cabal, can we?

But what a fantastic way to run a Ponzi scheme! Ponzi schemes are of course even more susceptible than real banks to runs...and if you can ensure that people can't withdraw their paper profits, then you can keep dancing a hell of a lot longer. Also, as Madoff showed, if you keep the promised returns modest then you can keep these running for years. This scheme also ties into the same sort of greed that leads people to fall for the Nigerian schemes, in that you need to do this offshore to avoid taxes, but with an interesting twist that the IRS are now fully corrupted, so avoiding taxes is a patriotic duty of sorts.

I'm not sure if this has anything to do with J. Allen Stanford's investments. Or if his investments are truly fraudulent. But there's certainly been some Ponzi scheming on the beach.

Monday, February 2, 2009

Thank God I was wrong!

Back in June, after the Lakers lost in the NBA finals, I said:
I can tell you right now that the Dodgers will make it to the World Series and lose in six games, Michigan football will finally beat Ohio State only to suffer (another) embarrassing loss to USC in the Rose Bowl, and the Steelers will lose in the Super Bowl after some sort of epic third-quarter collapse.

OH MY GOD I was way too close to getting that right with the Steelers. But! They pulled out the win after a nearly-epic fourth-quarter collapse. GO STEELERS!

James Harrison joins me in needing oxygen.

(Hey, don't you all love how optimistic I was about Michigan's season? That's so adorable.)