austindefender

Art. 12, Texas Code of Criminal Procedure:

Murder, aggravated sexual assault: None

Sexual assault/ indecency with a child: None

Leaving the scene of an accident resulting in death: None

10 Years:

Theft of estate by a guardian/trustee

Theft by a public servant

Forgery

First degree injury to a child/disabled/elderly person

Non-aggravated sexual assault/ no DNA

Arson

7 Years:

Misapplication of fiduciary property

Securing execution of document by deception

5 Years:

Theft

Robbery

Kidnapping

Burglary

Injury to child/disabled/elderly person, non-first degree

Insurance fraud

Three Years:

All other felonies

For a complete list of all limitations, see Art. 12.01, Texas Code of Criminal Procedure.

Ok, so I’ve been very lazy, and I haven’t made any categories. So log on today, intending to make at least two categories (law & economics)… and assign all my posts to one or the other. Only, there doesn’t seem to be any way to do that. So I pull up my trusted friend “Google” and do a search, and here’s what I find:

HOW TO BULK ASSIGN UNASSIGNED POSTS TO A CATEGORY IN WORDPRESS

First, we need to generate a list of all of the post IDs that correspond to posts that have no category. To do this, we are going to combine individual columns from two tables: the ‘ID‘ column of wp_posts, and the ‘object_id‘ column of wp_term_relationships. With each of those tables, I clicked the Export tab and used the ‘CSV for MS Excel’ format. I clicked the ‘Save as File’ checkbox and downloaded the resulting files to my computer.

There are about 73 more paragraphs following this one, but my brain died after wp_term_relationships.  So I had to stop reading.

Bear in mind, we

When banks “lose” money, where does it go?

Does it disappear? Or does it just change hands?

I’ve heard this question before, but I’ve never heard a good answer.

Here’s my go at it.

To figure out where the money goes, you have to consider bank accounting.

A bank’s balance sheet is a list of all its assets (money lent out to others), and liabilities (money owed to others).

The difference between the two is a bank’s net worth, or equity.

A simple version might look like this:

Assets					        Liabilities

Mortgages:	         $1 billion		Deposits:		$1 billion
Consumer loans: 	 $1 billion		Short term finance:	$1 billion
Business loans:	         $1 billion		Long term finance:	$1 billion
Cash & reserves:	 $150 million
						Equity: 		$150 million

Equity is critical because it’s what tells you if a bank is solvent.

In this case, the bank is solvent. It’s worth $150 million. That’s what’s left if the bank sells all its assets, and pays off all its debts. It’s what’s owed to the shareholders.

But suppose there’s a recession. The housing market tanks, businesses go out of business, and consumers, some of them, stop paying their bills.

When that happens – when loans go bad – they’re worth less. In some cases, they’re worth nothing at all.

The bank must write down the value of its portfolio of loans. It must estimate how much less they’re worth now than they were before people stopped sending them checks. In some cases, this is pretty straightforward. In others, less so. In this case let’s say everyone agrees only 90% of the loans are going to get paid back, meaning the value of the bank’s assets have declined by 10%.

Now the balance sheet looks like this:

Assets						Liabilities			

Mortgages:               $900 million		Deposits:		$1 billion
Consumer loans:          $900 million		Short term finance:	$1 billion
Business loans:          $900 million		Long term finance:	$1 billion
Cash & reserves:         $150 million
					        Equity: 		-$150 million

What’s interesting about this is that the bank has lost $300 million without losing a dollar of cash. The only thing that has changed is the accountants’ estimation of what the banks loans are worth.

If they’re correct (and let’s say that they are), this bank is insolvent. If it were closed up today, the shareholders would lose $150 million (they’d lose everything). In addition, somebody would have to take another $150 million loss on top of that. In the race to see who has to take that loss, the loser would be whoever got there last (which is where the ‘run’ in bank run comes in).

The interesting thing is that the accountants did all this with the stroke of a pen.

The other interesting thing is that should the accountants take a more optimistic view, the bank can disguise its insolvency for quite a while. (Eventually, it will show up as a cash flow problem, but that’s another story.)

So the answer to the question, “Where does the money go?” is

When people don’t pay their debts to banks, the losses show up as “write-downs” on the value of the bank’s assets. Those losses come first from shareholders, and next from the bank’s creditors (which means you and me, and everybody who has a checking account).

In the short term, it’s up to the bank’s accountants to decide whether the bank is solvent. But in the long term, the bank’s ability to stay in business(to pay its obligations) depends on cash flow, not accountants. If the bank’s debtors can’t pay pay the bank, then the bank can’t pay you or me.

In the long term, the only way for an insolvent bank to survive is by hoovering up government money.

In which case, the losses are still paid by you and me – in the form of higher taxes.

Your money’s in Joe’s house!

It’s a Wonderful Life is a hugely underappreciated film.  It’s one of my favorites.  (Thanks to Richard Green for reminding me.)

As a bonus, George Bailey explains bank runs, and what the bank really does with your money.

I always think of this scene, when people talk about the banking economy, and about how banks create money.

Fun fact: the FDIC deposit insurance fund has about $45 billion, as of last summer. Citibank alone owes its customers almost $800 billion in deposits.

Alberto Mora, the former Navy general counsel who protested the abuses, told the Senate committee that “there are serving U.S. flag-rank officers who maintain that the first and second identifiable causes of U.S. combat deaths in Iraq — as judged by their effectiveness in recruiting insurgent fighters into combat — are, respectively, the symbols of Abu Ghraib and Guantánamo.”

-NYT 12/17/08

I don’t suppose any of this is all that controversial anymore, but there was a time, not that long ago, when serious people spent a lot of time talking about when it was, and when it wasn’t ok to torture people.

Usually the “ticking time bomb” was invoked – that fictional situation where the only way to stop a terrorist attack is to torture the terrorist into telling you.

Completely aside from the real-world impossibilities of the scenario (has it ever happened, anywhere in the world, other than in Hollywood?), there’s another problem with torture.

You can get someone to say anything you want them to say, but you can never know if what they told you was the truth.

The problem with torture isn’t just that it’s immoral, it’s that it’s unreliable.

That, fundamentally, is why it isn’t allowed in court.

Robert Waldman has an article on Angry Bear on the credit rating agencies – The Tragedy of the Ratings.

The synopsis is that S&P sold out because they weren’t paid enough.

What went wrong with the ratings agencies ?

I think the central problem is that the ratings agencies long provided a service of immense value to society, and were paid a tiny fraction of that value to do so. The loss of credibility of the ratings is one of the causes of a terrible recession. This loss is more likely to cost the world trillions in lost output than mere hundreds of billions. Sure seems that the credibility of the ratings agencies was worth, at least, hundreds of billions to the world economy. That dwarfs the market capitalization of the ratings agencies.

We lost that because we collectively decided to take it from them rather than paying them what their credible ratings were worth. For decades they provided messages of one to three letters which were collectively worth hundreds of billions per year. They were paid their costs plus a normal profit margin, just as if it wasn’t a miracle that so much value could be created with so little effort.

Waldman is badly wrong here. Here’s why:

Any project that requires multiple actors, or multiple inputs, fails if any one of them is missing.

For example, New York City depends on its janitors to take out the trash, and clean up its buildings, after everyone else has gone home for the night.

If those janitors stopped doing their job, or did it very badly, Manhattan’s office towers would quickly become uninhabitable, costing the city hundreds of millions, or perhaps billions of dollars.

By Waldmann’s logic, janitors’ contribution is therefore worth the economic output of NYC – because without them, the city doesn’t work.

Any complicated system requires the contribution of many different parts for the system to function as a whole.  That doesn’t mean that the lug nuts that hold your wheels on deserve the credit for your car.

The media makes the same stupid mistake when they randomly give the credit – or the blame – for the result of some election to one specific group.  Mormons, (CA) for example, or blacks, or “soccer moms,” or gay Latino bartenders between the ages of 24 and 33.  Or whatever.

In any close election, any group, of sufficient size, is to blame as much as any other group, if you don’t like what happened.  (Or deserves the credit, if you do.)  Picking one in particular… is arbitrary.

On a side note, I don’t understand why anybody ever trusted S&P in the first place.

I mean, I don’t buy a TV, based on ratings paid for by Toshiba.

Why anyone would buy a few hundred million dollars worth of bonds based on rating paid for by the company selling the bonds is beyond me.

Hasn’t Wall Street ever heard of Consumer Reports?

A couple of the most common questions folks ask defense attorneys are, “Should I take the breath test?” and “What should I say if I’m going to refuse?”

I heard about the best response to the second question the other day.

(Paraphrased.)

Officer: “I am now requesting a specimen of breath and/or blood.”

Driver: “What will happen if I pass the test?  Will you let me go?”

Officer: “No.  You’re going to jail whether you pass the test or not.”

Driver: “Then I refuse.”

Most folks think that if they can pass the test, they won’t have to go to jail.  The truth is, you’re going to jail no matter what.  Once they ask for that specimen, you’re already past the point where they might let you get back in your car and drive yourself home.

So if you’re not going to take the test (more on that later), the best thing you can do for yourself is to make it absolutely clear why it is you’ve decided to decline.

(Props, by the way, to Jamie Spencer, who’s the original source.)

After Obama famously ducked the “Are you still smoking” question, lots of folks inferred he was, at least some of the time.

Ron Rosenbaum argues that’s not necessarily a bad thing.

Give the Guy a Butt!

“Do you want to die because President Obama is dying for a smoke?” Rosenbaum writes.  “Even secondhand smoke is deadly, we’re told. But how about secondhand radioactive plutonium?”

Good question, I think.  I prefer the second-hand smoke.

Besides, as Rosenbaum writes, what’s wrong with having a president who’s human?

He’s not on Mt. Rushmore yet.

At least according to this article.

The bonds issued by the US government are now more expensive to insure than the bonds of the people who make Campbell Soup.

Dec. 10 (Bloomberg) — The cost to hedge against losses on U.S. Treasuries surpassed the price of default protection on bonds from Campbell Soup Co. and drugmaker Baxter International Inc. as government spending on stimulus packages grows.

Insurers are now charging an extra $17,000 per contract to insure US Government debt, over and above what they charge to insure loans to the soup-maker.