Monthly Archives: November 2011

Test Driven Development Personality Analysis

I went on a couple of interviews where the interviewer said “We use test-driven development.”

Even my sister thinks that test-driven development is stupid.  How can you write tests before you write the program?

I try to be polite, even when the interviewer says “I’m a retard.  Do you like working for idiots?”  I express polite skepticism, over whether it’s a good idea.

The reaction of the interviewer is interesting.

When someone disagrees with me, I try to convince them.  If someone is completely hopeless I give up, but I try to answer reasonable questions.

For example, many people express skepticism about agorism and really free markets.  I answer any reasonable questions.  However, wasting time on pro-State trolls is stupid.  I wonder if the interviewer sees me as a troll who hasn’t drunk the “test driven development” Kool-Aid.

That is a subtle distinction.  “I don’t waste time on stupid people who disagree with me, because I’ll never convince them.” and “I don’t waste time on people who disagree with me, because I’m stubborn and don’t want my false beliefs challenged.”  I’m pretty sure that I do the former and “test driven development” idiots do the latter.  The psychopath behavior mimics the behavior of a real leader.  A real leader won’t waste time on fools.  A psychopath won’t talk to people who question his leadership.

Here is the amazing part.  No interviewer has tried to convince me that “test driven development” is a good idea!  If it really is awesome, then the interviewer should be trying to explain to me why it’s a good idea!

When the interviewer is insane, interviewing for a job is like trying to join a religious cult.  If I say “I’m not sure this is awesome!”, then the interviewer says “I’m not hiring FSK!” rather than “I’m going to try and convince FSK that this is a good technique!”

That is strong evidence that “test driven development” is a fad with no merit.  If it really was awesome, the interviewer would try to explain the merits to me.  Instead, they reject me because I don’t already think that test driven development is awesome.

In case you are confused, I do favor automated test scripts.  I question the wisdom of writing the tests first.  If I’m QAing someone else’s code, I look at the code and try to pick tests that use every bit of code.  At my last job, they had really sloppy QA, even though they were a huge financial institution.

When an intelligent person disagrees with me, I try to convince them.  I really am openminded.  However, the people who advocate for “test driven development” don’t try to convince me, when I express polite skepticism.  That is evidence that it’s hype-based and not merit-based.

There is one situation where “test driven development” is useful.  If you and your subordinates are unqualified twits, then “test driven development” helps you wring some productivity out of clueless people.

As someone on the high end of the ability scale, I would be shackling myself, if I were forced to write a ton of tests before writing the code.  Most of these “frameworks” and “development methodologies” are really methods for maximizing productivity from unqualified losers.  It’s silly for me to shackle myself like that.  I really can be 10x or 100x more productive than most people.

Oscar Ramiro Ortega-Hernandez

This story is interesting.  A guy fired a gun a the White House.

It’s pretty obvious what happened.  At some point, he met some politicians, saw they had evil personality tendencies, and became obsessed.

That’s the reason “mentally unbalanced” people (i.e. mentally aware people) become obsessed with politicians.  They see that they’re the most evil people they’ve met, even though they’re the leaders.  It’s very disturbing.

If you’ve partially cracked your pro-State brainwashing, but not fully, then you may do something stupid.

Stories like this are a type of evil fnord.  “If you’re disgruntled, violence is the only solution.”

Whenever I hear a story like this, I think “If only I had a chance to explain my philosophy to him, maybe I could have convinced him to pursue more productive resistance, rather than do something stupid.”

Employed Again!

I have a job again!

It’s actually in the productive sector of the economy.  I’m writing software for tracking construction documents.  There is only one semi-parasitic aspect, which is the paperwork that gets filed with the State.  Most of the documents are handled by builders and architects and construction businesses.

It’s kind of amusing.  Of all the interviews I went on, this was the one where they had a tangible useful product.  That forces the interviewers to be less insane.

The rest of the interviews were for financial software and for web startups, where it doesn’t matter if you have good software or not.  The financial industry thrives off the firehose of free State money, and merit is mostly irrelevant.  For web startups, it’s more important to find a VC to finance your stupid idea, than it is to actually be able to execute on that idea.

It’s nice to be working again.  They seemed decent, but you don’t know until you’re there awhile.  They had a disaster where they hired a big tech team that produced nothing, so they should appreciate me.  I’ll probably get more done by myself in a few months, than their team did in 2 years.

That’s the benefit of going on job interviews, rather than wasting time protesting.  It helps that I have useful skills.

Occupy Wall Street Gets Stupid

Some protesters are angry that they were kicked out of Zuccotti park.  Now, they’re blocking traffic and transportation.

When you start blocking traffic and the subways, that’s when it starts getting out of hand.  If you’re preventing people from getting to work, then it’s time for the police to crack down.

Are the protesters stupid?  Did “agent provocateurs” do a good job?  It’s hard to be sure.  At this point, most of the reasonable people have left the protests.

That’s why I don’t like protesting.  It’s just a waste of time.  If you’re blocking traffic, then most people will be rooting for the police to arrest them.

Wall Street is a cesspool of corruption.  However, having a riot or protest doesn’t accomplish anything.  The police arrest the protesters, and everyone else has business as usual.  When you’re blocking traffic, most people want the police to do something about it.

A protest is a waste of time.  Agorism is still the best strategy for fighting bankster corruption.

Added GrowMap Anti Spam Plugin

I took Anonymous’ advice and installed the growmap anti spam plugin.

You now need to enable javascript to leave a comment, so you can convince the plugin that you aren’t a spammer.

Let me know via E-Mail (fsk2006 gmail) if you have any problems leaving comments.

NBA Players Union Decertifies, Files Antitrust Lawsuit

The NBA Players’ Union decertified and filed an antitrust lawsuit against the NBA.

This illustrates a flaw in the State legal system.  The NBA players have a simple yes/no question, “Is the lockout legal or not?”  However, it’s going to take months for a trial.

The delay in the legal system favors the owners.  The owners have deeper pockets than the players, and can afford to hold out for longer.  If you can borrow at 5% when inflation is 20%-30%+, that gives you the ability to wait.

It isn’t clear who will win in a full trial.  A full trial and appeals will take a year or longer.  A settlement is practically certain before then.

The NFL players won at the district level, but the league won on appeal.  However, that was only ruling on a preliminary injunction and not a full trial.  There is no binding precedent, whether or not a sports league can lock out its players after the union decertifies.  All the other trials were settled, before a final verdict.

There is another difference between the NFL and the NBA.  In the NFL, contracts are typically not guaranteed.  In the NBA, contracts are usually 100% guaranteed.  Does the NBA have to pay those guaranteed contracts anyway?  That is unclear.

When/if the union does settle and recertify, they probably should fire the leader, Billy Hunter.  The union’s behavior was logically inconsistent.  Why did they first agree to 50% and an owner-friendly-deal, and then refuse to ratify it?  That makes no sense.

Either they should have put the agreement as-is to a players’ vote, or never made so many concessions in the first place.  What they actually did makes no sense.

Why didn’t they put the owners’ final offer to a vote of the full union?  Suppose that 60% voted against and 40% voted for the deal.  Then, the owners might make only a little more concessions to get another 11%.  What’s wrong with that?  It seems unfair, that the deal wasn’t put to the full union vote.  That’s why representative democracy doesn’t work.

Also, the union may not have a good plan.  Suppose the entire season is cancelled.  The lawsuit isn’t finished yet, or they lose, and it’s next year.  Then what do the players do?  Do they accept 47% or 50% after waiting a year?  If they do that, then they gave up a years’ salary for nothing.  The owners probably already decided that, if there’s a full lost season, then they’ll make their 47% or 50% offer again.

The owners were too greedy.  If they had conceded another 1%, they might have closed the deal.  If they didn’t insist on limiting the mid-level cap exemption, they might have closed the deal.  They demanded too much.

The NBA is never going to have full competitive balance like the NFL.  In the NBA, a superstar player is 1/5 of the team.  That’s a huge advantage, and every team can’t have a superstar.  In the NFL, a superstar quarterback is only 1/20 of the team.  That make it easier to have competitive balance.

The owners may be angry, about how LeBron James and his friends all played for Miami.  The salary cap system actually promotes that.  Consider an extreme example.  If the maximum salary were only $1M, then all the superstars might go to the same team so they could win easily.  When your salary is capped, other considerations start to be more important.

Antitrust law attempts to solve a State-created problem.  The State gives businesses a monopoly, by restricting competition.  Then, the State declares it to be illegal to abuse your monopoly.  The real problem is that the players can’t easily start their own league.  The players don’t seem to be seriously trying that.

The most frustrating part of the antitrust lawsuit is the delay.  It’s a simple yes/no question, “Is the lockout legal?”  Why does it take the State legal system so long, to answer a simple yes/no question?

Another Fannie Mae Bailout – $5 Trillion And Counting

This story was interesting.  Fannie Mae received another direct bailout from the government.  They got another $7.8 billion.

If you count just the Fannie Mae and Freddie Mac bailout, the total bill comes out to $5 trillion.  Yes, that’s right, 5 TRILLION DOLLARS.

To put that into perspective, $5T divided by 300M Americans is $16,000 each.  In other words, the Federal government could have bailed out Fannie Mae and Freddie Mac *OR* given each American a check for $16,000.

At this point, a pro-State troll objects.  “FSK, you’re counting it wrong.  The total bailout was only $220 billion and not $5T.”

Taxpayers have spent about $169 billion to rescue Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates that figure could reach up $220 billion to support the companies through 2014 after subtracting dividend payments.

No.  I’m counting it right.  $220 billion is just the bailout required so that Fannie Mae and Freddie Mac can make interest payments on their debt.  $220 billion is the amount of bailout required to prevent a technical default by Fannie Mae and Freddie Mac.

The fallacy is that the Federal government is guaranteeing *ALL* of Fannie Mae’s and Freddie Mac’s debt.  If you account honestly, the bailout amount is the *ENTIRE* balance sheet, and not just the bailout required to make current payments.

If you account honestly, *ALL* of Fannie Mae’s and Freddie Mac’s debt should be counted as part of the national debt.

With the $220 billion cashflow injection, Fannie Mae and Freddie Mac can stay in business, wait for inflation, and eventually profit.  If there is sufficient inflation, then those underwater mortgages have collateral that’s worth more.  Eventually, if the State inflates enough, housing prices will start rising again.  Then, Fannie Mae and Freddie Mac will start making riskless profits again.

Fannie Mae and Freddie Mac borrow at the Treasury rate and buy higher-yielding mortgages.  It’s pure illicit interest arbitrage.

This Yahoo finance page has Fannie Mae’s debt.  This page has Freddie Mac’s debt.

Fannie Mae has more than $3T in debt.  Freddie Mac has more than $2T in debt.  The total bailout is more than $5T.

Fannie Mae and Freddie Mac are a direct creation of the State.  They are pure corruption capitalism.

Fannie Mae and Freddie Mac get one perk that no other business gets.  Their debt is backed by the Federal government, provided they use that money to buy mortgages or mortgage bonds.

Instead of shutting down Fannie Mae and Freddie Mac, they are bailed out and they continue operating.  Once housing prices start rising again due to inflation, Fannie Mae and Freddie Mac will start making huge profits again.  Then, the CEO and executives will pay themselves a huge bonus for their “brilliant leadership”.

A pro-State troll says “Fannie Mae and Freddie Mac help people buy houses by providing cheap loans.”  That is false.  People get a cheaper loan, but due to cheap credit, the price of a home is greater.  It’s a net loss, because Fannie Mae and Freddie Mac make profits and their workers earn a salary, even though they do nothing useful.

Look at it this way.  If you have “economy right now” vs. “economy without Fannie and Freddie”, the latter is preferable.  The profits and salary for Fannie and Freddie would be better used elsewhere.  Fannie Mae and Freddie Mac are a drain on the rest of economy.  Even if I don’t have a home or mortgage, I’m indirectly subsidizing Fannie and Freddie via inflation.  They get a bailout.  They earn salaries and bonuses, even though they produce nothing useful. They get risk-free profits.  I get higher inflation.

Fannie Mae and Freddie Mac spend money lobbying.  It is pure corruption, when you receive a direct or indirect State subsidy, and then spend some of that money lobbying.

Fannie Mae and Freddie Mac are an abomination.  They are an example of corruption capitalism.  They only exist because of an explicit State-backed perk, that their debts are backed by the State.  The bailout is not just the $220B that they were given.  The value of the bailout is their entire balance sheet, $5 trillion.  All their debt should count as part of their bailout.  All their debt should be counted as part of the national debt.

Fannie Mae and Freddie Mac can’t be shut down, because their executives will always lobby against it.  Fannie and Freddie spend the money stolen via the State to keep the corruption flowing.  That’s the reason the economy is collapsing.

MF Global And Repo-To-Maturity

MF Global went bankrupt. $600M of customer funds were missing.  Even though most accounts were transferred, any equity may be lost and tied up in bankruptcy court.  For example, if you owned 1 gold future and had $20k of equity, you may have been able to move the future, but not the $20k equity.

Will prosecutors go after Jon Corzine, MF Global’s CEO? Will they prosecute MF Global’s CFO? Given the large anti-bankster sentiment, I don’t see how they can avoid it. After declining to prosecute Lehman Brothers for accounting fraud, it would be embarrassing if they also declined to prosecute Corzine.

I thought that it would be a slam-dunk easy conviction, to convict Dick Fuld for the Repo 105 accounting fraud.  However, the correct bribes were paid, and there was no prosecution.

If I had 5 minutes to explain it to a jury, I could easily convince them to convict Jon Corzine.  Here’s all a prosecutor needs to tell a jury, to get them to vote “guilty”.

MF Global was both acting as broker for customers, and gambling in the markets. Customer money is supposed to be segregated. That law goes back to the Great Depression. Corzine stole $600M of customer money, and used it to make losing bets in European bonds.

MF Global committed accounting fraud in the months leading to bankruptcy. They used “window dressing” to make their balance sheet look good at the end of each quarter. They used the “repo-to-maturity” accounting trick to hide losing bets on European bonds. Therefore, you should find Corzine guilty of violating Sarbanes-Oxley.

Here is a source for the law that says “customer accounts must be segregated”.

Investigators are also still trying to track down $600 million in missing customer money that should have been placed in segregated accounts – another potential avenue for criminal charges if the money was misused. The Commodities Exchange Act, 7 U.S.C. § 13(a)(1), makes it a crime punishable by up to 10 years imprisonment for anyone associated with a commodities dealer

to embezzle, steal, purloin, or with criminal intent convert to such person’s use or to the use of another, any money, securities, or property having a value in excess of $100, which was received by such person or any employee or agent thereof to margin, guarantee, or secure the trades or contracts of any customer or accruing to such customer as a result of such trades or contracts or which otherwise was received from any customer, client, or pool participant in connection with the business of such person.

That article also pointed out that MF Global sold $325M in bonds in August 2011, shortly before declaring bankruptcy.  Did Jon Corzine lie about the state of MF Global’s books, when he sold those bonds?

“Window dressing” is when a corporation does accounting tricks, to present a favorable end-of-quarter balance sheet snapshot. One example is Lehman Brothers’ “Repo 105″ trick, used to hide losses.  Another example is repo-to-maturity, which is Corzine’s spin on the usual off-balance-sheet accounting tricks.

Here’s where Jon Corzine and Dick Fuld say “Every big bank uses accounting tricks.  We only got caught because we filed for bankruptcy.”  Just because every big bank is committing fraud, doesn’t excuse you for doing it.

This is a defect in the accounting rules. A corporation should be required to report daily cashflow, rather than merely an end-of-quarter snapshot. There is no chance that rule will be changed. CEOs and banksters love accounting rules that have exploitable loopholes.

Corporations only provide an end-of-quarter snapshot, and not a daily cashflow report.  That encourages CEOs and CFOs to play accounting tricks.  At the end of each quarter, you do some tricks to make your balance sheet snapshot look good.

MF Global made “repo-to-maturity” trades. These trades are almost identical to the “Repo 105″ trades that Lehman Brothers made.  Here is another explanation.

A “repo-to-maturity” trade has no economic value. The only “benefit” is that assets are moved off-balance-sheet, enabling the CEO and CFO to hide losses.

In a regular repo trade, a bank borrows money for a few days. Rather than sell assets and incur a transaction fee, the bank does a repo. The bank sells $1.03B of bonds for $1B, and agrees to buy the bonds back a few days later for $1B plus interest. Typically, Treasury debt is used as collateral, but any asset can be used. This trade is virtually risk-free for the lender, because the lender has collateral that can be sold in the event of a default.

In a repo-to-maturity trade, the repo lasts until the bond matures.

Here is an example.  MFG buys $1B of Italian bonds, yielding 5%.  MFG does a repo-to-maturity trade with Y, at a rate of 1%.  MFG gives Y the $1B bonds, and Y gives MFG $1B cash.  MFG pays Y 1%, and Y pays MFG the coupon on the Italian bonds.  When the bond matures, MFG gives Y the $1B back, and Y gives MFG back the bonds.

Isn’t that silly?  What’s the benefit?  Why should MF pay the fee of 1% to Y?

The “benefit” of repo-to-maturity is that the Italian bonds are now on Y’s balance sheet instead of MF Global’s balance sheet.  It’s a pure accounting gimmick.  The repo-to-maturity trade has no economic value.  It only lets MF Global lie about its balance sheet.

Another “benefit” is that repo-to-maturity lets MF Global load up on leverage and profit.  It can use the $1B proceeds from the repo trade to finance other bets.  If all goes well, MF scalps a profit of 4% times a huge leverage ratio.

Also, MF Global was a Primary Dealer.  This gave MF Global an incentive to load up on leverage and buy European bonds.  MF Global borrows at the Fed Funds Rate, and buys higher-yielding European bonds, making a practically guaranteed profit.

Even after the repo-to-maturity trade, MF Global is still on the hook for losses, if the bond defaults.  Also, MF Global is on the hook for margin calls, if the market value fo the bonds declines.  That’s what sunk MF Global, the margin calls on the repo-to-maturity trades, as European bond prices crashed.

That’s how this repo-to-maturity trade ended in diaster.  MF Global was hit with margin calls, as the market value of the European bonds declined.

Also, once MF Global’s credit rating was decreased, its cost of borrowing increased.  It was so bad that nobody wanted to lend MF Global money anymore, and the whole scam unraveled.

For a regular repo, it only lasts a few days.  There’s usually no need for margin calls.

For repo-to-maturity, the trade can last years.  The counterparty to the repo (Y in the above example), gets to demand extra margin calls, if the value of the collateral declined.

The European bonds did not technically default (yet), but their market value declined.  MF Global had to make margin calls on the repo-to-maturity trades.  At some point, MF Global ran out of cash and stole $600M of customer money.  This eventually led to bankruptcy.

If MF Global could have avoided bankruptcy *AND* the bonds didn’t default, then MF Global would have made a huge profit and Corzine would have paid himself a huge bonus for his brilliant leadership.  They would have made a lot of money from high leverage, borrowing cheaply from the Federal Reserve and buying higher-yielding European bonds.

The “repo-to-maturity” trick enabled Jon Corzine to lie to investors and regulators.  It enabled him to present a better-looking balance sheet than it actually was.

The scam unraveled when MF Global couldn’t make margin calls, as the value of the European bonds declined.  If the bonds were directly on MF Global’s balance sheet, they would have been forced to mark-to-market as the bonds declined.  With repo-to-maturity, there was no mark-to-market loss *BUT* there were margin calls on the repo-to-maturity trade.

MF Global was a Primary Dealer.  This gave them an incentive to load up on leverage and buy higher-yielding bonds.  The Federal Reserve is responsible for the MF Global disaster.  By keeping interest rates negative, they give the banksters an incentive to load up on as much leverage as they can.

If prosecutors want to nail Jon Corzine, they should be able to win easily.  Jon Corzine was a high-ranking bankster, which might give him some immunity.  On the other hand, a lot of people are angry, which may force a prosecution.

The MF Global disaster is *NEARLY THE EXACT SAME THING AS LEHMAN BROTHERS*.  It’s a couple of years later, trillions of dollars in bailouts, and the banksters are pulling the same scam.  Why not keep stealing, if you keep getting bailed out and keep getting away with it?

There are two specific bad things that MF Global did.  First, they stole $600M in customer money, to pay for gambling on European bonds.  Second, they used repo-to-maturity and other accounting tricks to hide losses.  MF Global sold $325M in bonds while they were lying about their balance sheet.

Joe Paterno Fired

There was one interesting bit on the Joe Paterno firing, that nobody else mentioned.

Why did the trustees fire Joe Paterno?  For the past 5-10 years, the conversation in Penn State was:

Joe Paterno is getting pretty old.  He should retire.

We can’t force Joe Paterno to retire.  His reputation is too great.

The trustees did what they wanted to do anyway.  A lot of people thought he was too old and should retire.  The scandal gave them an excuse to do it.

Another interesting bit is that the person involved in the scandal (Sandusky) was Joe Paterno’s hand-picked successor.  Someone observed Sandusky with a young boy, and reported it to Paterno.  Joe Paterno did tell his boss, which means he can’t be charged with a crime, but didn’t more aggressively pursue the issue.  That’s an interesting law.  If you work for a school, you have a positive obligation to report it to the police or your boss, if you suspect child abuse.