The Chinese are net buyers of T-bills again, but what choice do they have WRT euro?

WSJ story.

For the first time in six months, China is back to being a net buyer of USG debt, "boosting its position as the top foreign holder."

China soldoff a bunch of T-bills near the end of 2009, spooking a lot of American observers.  For a while, it seemed like Japan was back to being #1 by default, but a revision of the data ended that notion.

Because of Greece and the EU's woes, everybody seems to find US T-bills once again the most attractive option--especially among the Europeans themselves.  While an imprecise measure, this suggest that America's prospects for floating future debt are improved.

The "flash crash" and its parallels to 1987

WSJ story.

Investigators looking into the "flash crash" of 5/6/10 see a lot of similarities to the famous "black monday" crash of 10/19/87, the first one I ever really paid attention to.

The key bit:

On Oct. 19, 1987, the Dow Jones Industrial Average tumbled more than 20%, and the swoon extended into the following day, before a rebound. Floor traders, working by telephone, dominated the action and computer-generated trading was still in its infancy. Dark pools and high-frequency trading were the stuff of science fiction. Trading reached 600 million shares, according to the SEC.

Fast forward to May 6, 2010: The worst part of the lightning descent lasted roughly 10 minutes and the decline hit 9.8% at its worst. Trades, many executed in milliseconds, reached 19 billion shares.

In both cases, troubles first appeared in the stock futures market, which precipitated a decline in the regular "cash" market. The two created a feedback loop, dragging both markets lower.

Perhaps the most concerning parallel was how professionals abandoned the market. In 1987, some human market-makers on the floor of the exchange stopped providing bids for certain stocks.

Two decades later, in a market dominated by technology, high-speed traders who often provide liquidity for the market, just switched off their computers. Other big players, including fast-trading hedge funds, also pulled out of the market, according to traders and exchange officials.

We are told that the trigger for 5/6 remains unclear. 

Percentage-wise, 10/19/87 was a much larger final drop of 23%. The 5/6/10 drop was only 9% at the low point (points-wise, the 999-point drop was bigger than the 508 lost in 1987, but the market's much higher now) and ended up only 3% down at close.

The big scare this time was all the electronic trading that made most of the plunge happen in 10 minutes.

Major lesson seems to be (for now):

 Technological advances have been widely touted as having made the market more efficient--and more resilient.  Instead, the May 6 plunge showed that technology mainly served to speed up trading and magnify the market moves.

Short answer:  human behavior is still the big driver (the pull-out mentality that is natural enough), but when combined with electronic millisecond trading, the emotion is turbo-charged, suggesting that whatever we've got for circuit-breakers now isn't enough.

India-US car makers: warming up to each other's markets

Mahindra & Mahindra aims to become the first company to sell an Indian-made truck in the U.S.  (factory pic-->).

Meanwhile, GM is doing boffo business in India:

Sparks fly and robotic machines buzz and hum. Assembly-line workers in coveralls, the sons of peanut and rice farmers, seal windshields and weld doors. They're making zippy little cars called Beat and Spark in the gleaming new General Motors plant here -- and they're making boatloads of money.

The iconic American carmaker went bankrupt last year, but its Indian operations have never been busier, evidence of India'sbooming economic growth and the rising prosperity of middle classes that are increasingly demanding first-world trappings in one of the fastest-rising countries.

"The new generation wants to hold the steering wheel in their hands," said Prabhjot Singh, manager of a driving school who said young Indians who used to go to him to learn how to drive scooters are now flooding in to learn how to drive cars.

GM builds for Indians in India.  Mahindra plans on doing the same as soon as possible.

I like GM's chances better.  America's truck market is stuffed, while there is only 10 cars per 1,000 Indians (America's numbers are more like 830-40).

But great to see the connectivity and ambition moving in both directions.

Chart of the day: Where government control of banks is for real

From an Economist special report on banking in emerging markets.

To paraphrase Crocodile Dundee:  That's not a state-dominated banking sector, THIS is a state-dominated banking sector!

Now, I realize that the following is not a popular thing to say, but I like our chances a helluva lot better with private banks than that of these states with their state-owned banks.

Doesn't mean it doesn't make sense for the BRICs to have a large state banking sector.  When you've got all those rural poor, you want that state-directed counter-business-cyclical capacity built into your system (i.e., you can command banks to keep lending during a down cycle).  Plus, you've got more political muscle when it comes to all the infrastructure building your country needs to catch up with the West.

All that is fine and good and we don't want to do anything to discourage such development, because we sure as hell don't want to own those problems.

But remember this: catching-up ain't the same thing as vaulting ahead, so take all those fabulous linear projections with a great big grain of salt.  Once you head into the intensive growth (more innovation, less the simply adding of more resources), having a big state banking sector isn't a plus--as Japan's government-cozy banking sector has proven.  You want a little more ruthlessness built into the system.

Still, some wonderful perspective for those who imagine that our government now owns the financial sector.

The Politics Blog: 5 Ways to Get Help on the North Korean Mess (from China)

Is Kim Jong-Il mad or what? As if this weekend's Eastern diplomatic swing to ease tensions over the sinking of a South Korean warship didn't seem fruitless or frustrating enough, now the world's least-favorite despot is really screaming to respect his authorit-ah by freezing ties with Seoul this morning.

Having long ago reversed its own "sunshine policy" toward its evil twin, South Korea now seems truly fed up. President Lee Myung-bak checked all the usual boxes over the weekend (cut remaining trade, block sea lanes, resume pysops, seek UN Security Council resolution, etc.), then pointedly added a call for regime change, vowing that North Korea "will pay a price." But before you go screaming World War III on today's developments, take heart: The solution, as Secretary of State Hillary Clinton remains in "intensive consultations" with Beijing over both NorKo and Iran's nuclear program, remains in China. And the time for tough choices seems to have arrived, both for Beijing and the Obama administration.

I have long argued — and since persisted, with regard to both Pyongyang and Tehran — that the U.S. should punt on Iran's nukes (there's nothing undeterrable about a Shia bomb) and target North Korea for regime change. I still believe that. Engaging with Iran serves tangible, near-term purpose (e.g., Afghanistan, Iraq, Israel-vs.-Hamas/Hezbollah), while toying with Kim serves none. And I still believe that China is in the driver's seat, whether we're talking Beijing's $80-billion investment in Iran's energy sector or its dreams of lifting $6-trillion worth of NorKo's mineral reserves (at bargain basement prices). Understanding that China must save face as well as sunk costs, here's my plan for making everyone — save Israel and Kim — more, shall we say, respectf-ah in the short run.

Read the full post at Esquire's The Politics Blog

Podcast of my recent appearance on "The Black Fridays"

Hosts are Stacy Lowery and Wes Owsley, the latter of whom latched on to my stuff when he caught the 3-hour "New Map" broadcast on CSPAN back around Labor Day 2004 (due to a 3am feeding of his new baby).  The interview ran about 45 mins.

We did it via Skype, so the sound is great.

These guys ran me through the canon--so PNM forward.  They are enthusiastic, and I was pretty good--considering the pollen right now.

Find the podcast here.

Turnabout is fair play: now it's the dropping euro's turn to hurt China--and by extension US

"Put that Chinese product back, Mr. Euro, as of 20 minutes ago, it costs too much!"

Back when it was the surging dollar, along with pegged yuan, Europe complained that it was being abused.

Now, thanks to the PIIGS weakness, the euro's decline means a lot of previously signed deals between Europe and China are being cancelled because the margin has evaporated.  

Upshot?  A China now made more nervous about its ability to export is less likely to go through with its promised revaluation of the yuan, hurting our exports in turn.

This 3-way ain't going away any time soon; it's like watching an old Three Stooges routine.  Eventually, the interlocking dynamic works it way around the horn, and then it's your turn to get poked in the eye.

Nyuk nyuk nyuk!

The Taliban, in gearing up their attacks, keep us in Leviathan mode as much as possible

The preview from Marjah, a former insurgent stronghold, does not bode well for the far larger and more seminal effort in Kandahar, where the persistent attacks against NATO base hubs suggests the Taliban will not simply wait out our latest surging COIN effort but will aim to keep us in combat mode as much as possible so as to crowd out the nation-building stuff.

Going into Marjah, we promised tens of millions of dollars for serious SysAdmin reconstruction efforts, only to so far spend $1.5M--a bit short of the projected $19M.  The Taliban has simply kept up the sort of harmonic attacks that keep the situation just unstable enough to prevent recovery--the usual kidnapping of Western workers on key projects and the beheading of pro-gov locals and "night letters" threatening retaliation.  Classic example:  USAID buys irrigation gear, but no local farmers will accept after one of the first to do so was killed by Taliban.  

To date, the whole telegraphing our punch by saying up front Kandahar would be the big proving ground seems to be backfiring.  The Taliban have geared up and gone toe-to-toe every step of the way.  We have our set level of effort, and the Taliban are effectively calculating just enough counter-effort to prevent any lasting impact.

This is where our go-it-alone-with-NATO package looks weak.  Everyone knows we make little effort to regionalize a serious long-term solution beyond Pakistan's cynical buy-in, and that reality encourages the Taliban to play hard for the anticipated short-duration--by their standards--effort the Westerners are likely to make.  Their threshold for critical mass is being met; ours is not.

Asia: it's not just intensive growth, but inclusive growth that's required

Banyan piece in The Economist.

Nice start:

SHINY Asia’s rapid economic growth over the past two decades, driven by cheap land and labour, technological change and the play of globalisation, has had a spectacularly improving effect on the lives of hundreds of millions. Since 1990 the number of those in extreme poverty, defined as earning less than $1 a day, has been halved, to under a fifth of developing Asia’s people.

So far so miraculous. Yet the shiny face has a tarnished flip side. Poverty and the vulnerabilities associated with it remain entrenched. Further, inequalities are rising fast. The realisation is spurring a rethink among development experts. Until recently, economic growth and social policy were thought of separately. Inequalities and social exclusion, as Sarah Cook of the United Nations Research Institute for Social Development puts it, were viewed as a residual outcome of necessary market-led growth. The development response was to get markets right first and then deal with any remaining pockets of the poor. Persistent poverty and growing social exclusion call the approach into question.

When you move up to the $2-day threshold, about half of Asia is still impoverished.

As for villains, many in the region still point fingers at the IMF for its harsh adjustment programs after the "flu" of 1998.  China here is given high marks for expanding its healthcare and low marks for treating as invisible the illegal rural folk now living in cities.

Most crucially, the advice is to "get your political house in order":

In China, with mounting inequalities and disparate interests that need accommodating, it is not clear that the country’s political system, top-heavy and authoritarian, is up to the task. Not that democracies have fared much better: witness India, Indonesia and the Philippines, where the presidential election this week underscored how power and wealth lie in the hands of a few families.

They do, however, offer the poor a better chance of genuine electoral retribution; unlike, for example, most Central Asian countries. Until April’s coup in abject Kyrgyzstan, the ruling clan attempted to commandeer almost the entire state economy. 

In short, Banyan is not buying any inherent superiority of the Chinese model.  The easy growth is done.  Now comes the hard part.

You knew this was coming: NBC sitcom about Indian call center

Thursday night slot for show about a call center in India: "A comedy where cultural differences are a novelty."

Like the cheesehead, goes well with the sacred cow.

America, at its best, has always been a if-you-can't-beat-'em,join-'em mindset when it comes to economics. The first best step in revitalization is de-demonizing your competitors and learning from them in the process.

More on "assertive Turkey" being a good thing

map here

David Gardner in the FT (column "Global Insight").

The EU ambivalently delays any serious negotiations on Turkey's admission, and meanwhile, the Turk's, with their "zero problems with neighbors" foreign policy, seem to be outshining everyone in the region in terms of diplomatic zing.  So Gardner asks, does Turkey care about the EU any more?

Is Turkey playing "hard to get" with this "neo-Ottomanism" under foreign minister Ahmet Davutoglu and prime minister Erdogan?

A local academic says, "AKP people feel more comfortable in Damascus than Rome.  The new elites want the best of both worlds."

Good for them, I say, and good for the Core as a whole for Turkey to come into its own as a frontier integrator and globalization networker.  Even if it means we don't always get out way on things.

Gardner's point is apt here:  no longer the Western bulwark against the hordes, now Turkey is the prime bridge, whether the EU rewards it or not.  Turkey has opening 30 new embassies in Africa and Latin America. Bravo!  I say.

Gardner:

This is not the return of the Ottomans but a commercial comeback--timed to pickup the slack from the recession in the EU.

Turkey ses itself as a regional power as well, and is determined to show the EU two things: that it has options; and that, unlike the EU, it knows how to deploy "soft power" in Europe's Middle Eastern backyard.  In short, that is is an asset.  "Turkey is using the transformative power of the European Union, which the EU itself appears to have lost," says Ayhan Kaya of Istanbul's Bilgi University.

Germany and France have told too-big, too-Muslim and too-poor Turkey to f--k off.  And Turkey took that advice to heart.

We are all better off for that ambition unleashed.

The Kevin Bacons of emerging markets: still HK and Singapore

chart from here

Played this game in one of my NewRuleSets.Project "economic security exercises" (sorry, but I haven't yet reconstructed those pages on the new site--soon!) atop World Trade Center 1 back in 2001 with Asia, using the example of the Kevin Bacon game.   The KBG says you can link anyone in the world to Kevin Bacon in six steps or less (six degrees of separation notion I demonstrated in Great Powers (between me and John Adams--as in me to my grandpa to TR to John Hay to Abe Lincoln to John Quincy Adams to John Adams).  The chart above links Indiana U alumni to Bacon in five steps.  

We presented all the players with a list of every emerging market in Asia and then had them rank-order their top picks for desirable free-trade agreement groupings from the perspective of the US, EU and Japan.  The winner, or most often top ranked, was Singapore.  All three sides wanted it in any FTA they could access.  On that basis, we dubbed Singapore the Kevin Bacon of foreign direct investment in Asia, meaning you wanted to put your money there because it presented the tightest possible financial connectivity to the most amount of regional emerging markets.

Now, in our exercise, we didn't break HK out from China, something we skipped in deference to several prospective Chinese guests at the request of Cantor Fitzgerald.  In the end, they didn't show up anyway because their visas were rejected (right after the EP-3 spy plane incident).  It was a bad choice on my part to give in on that, because virtually all of our players told me later that Hong Kong would have been right up their with Singapore for the same reasons--a highly desirable third-party on any investment deal because they brought local knowledge and the best local rules.

Anyway, check out the tables from a recent FT full-pager on emerging markets:

China is clearly the biggest overall magnet/deal-maker, but note the high numbers of deals for HK and Singapore--way out of proportion to their size.  That's because they're supreme pass-through FDI conduits, both into and out of Asia.

That's why, whenever I hear of small states in the PG or around Africa (like Mauritius) expressing the ambition to position themselves as the next Singapore or Hong Kong, I spot a player that's looking to get in front of a big money flow--like Asia into Africa.

In fact, that's one of my mantras shared with Steve DeAngelis:  whatever the globalization trend, you want to "get in front of the money"!

Chavez is being forced to reveal his rule for what it is

No doubt Chavez originally won free elections, and no doubt he's made them increasingly unfree ever since, in typical fascist mode (intimidating voters and opponents and any independent voices).  But after 11 years of rule bought primarily with social spending largesse fueled by high oil prices, Venezuela is a shambles of its former self.  If truly free elections were held today, with Chavez's popularity so low (down from the heights to a mere 40%), he could easily lose.

Thing is, democracy will not be allowed to do its thing and throw this bum out--finally.

The Economist describes the Chavez/Iran/Russia/Zimbabwe/Sudan model as:

• touted democratic mandate (elections are held)
• populist socialism
• anti-Americanism
• resource nationalism
• calibrated repression of opponents.

I consider this a thoroughly unimpressive model that cannot thrive absent high oil/commodity prices, so not much to fear since it cannot really be exported effectively.

Doesn't mean Chavez can't make his mischief, as in Colombia with his support of the narco-insurgency FARC (with whom he cooperates on drug running into the US), but as the first piece points out, Chavez's influence peaked in the region a couple of years ago.

And since the oil price drop of 08-09, the economy in Venezuela has gone dramatically downhill, to the point where Chavez recently nationalized grocery stores, which is truly pathetic.  From GDP growth of roughly 10% in 05-06, Venezuela has dropped to negative growth last year and is predicted to hold that pattern this year and maybe breaking even next).  The diagnosis?  Stagflation (low growth and high inflation).

Upcoming:  legislative election in Sept and presidential one in 2012. Since Chavez can't allow true democracy, the only question left, says the mag, is whether his rule ends peacefully or not.

I don't see him going any time soon.  He's got his military and his $200B cash-up-front deal with China.

He'll just get nastier as time goes on.

Chart of the day: US nuclear weapon stockpile

From a DoD fact sheet (linked in reference).

What you see:  shortly after the Cuban Missile Crisis convinces us we need a new model, the MAD (mutually-assured destruction) paradigm allows us to start tapering off and then reverse our astronomical climb.  Arms control treaties across the 1970s and 80s reduce it a bit more, while slowing the USSR's phenomenal climb. Then big drop at end of Cold War, plateau until mid-200s, and then another significant fall.

Point:  notion that we have too many nukes or haven't done enough to cut numbers is wrong.  We have less than 15% of the warhead total we had at the Cold War's scary peak in the early 1960s, meaning an 85% decline.

Why Obama thinks this is the big issue of our day is beyond me, as is the notion that we should reduce the role of nukes to somehow convince Iran not to reach for them.

WPR's The New Rules: For U.S. and World, Obama Spells Relief, not Cure

As somebody who voted for President Barack Obama, I am surprised to find myself believing that he is slated to be -- and more so, should be -- a one-term president, a possibility that Obama himself has already broached publicly. It's not any one thing he has or hasn't done that has led me to this admittedly premature conclusion. Rather, it's a growing realization that everything Obama brings to the table in terms of both deeds and vision suggests that history will judge him to be a transitional figure. He is a much-needed leveling-off from Bush-Cheney's nosebleed-inducing foreign policy trajectory, no doubt. But he is not "the One," in whom so much hope was invested for the revitalization of this clearly disoriented superpower.

Read more at World Politics Review

Trying to drive a wedge between Gates and Obama

Arthur Herman column in NYPost via James Riley.

Per my "Awakening of Robert Gates" piece in Esquire earlier this year, you start to see the right going after Gates obliquely while trying to keep the bulk of the blame on Obama (Obama is purposefully condemning America to losing its superpower status and Gates is letting him do it).

Everyone and his brother has long predicted the end of the post-9/11 defense "gusher" that saw plenty of spending for both the Leviathan and SysAdmin sides of the house, meaning we kept buying the Big War platforms and used the small wars force like crazy in Iraq and Afghanistan.  So long as Bush-Cheney set no spending limits, all was fine.

Then the financial crisis hits, Obama does his stimulus/bail-out spending there, and we're back, to no one's surprise, talking most about debts and deficits and reining in spending.

So Gates goes around telling the military, like in the recent "Ike" Kansas speech, that the same old approach to force structure (same big platforms, just more pimped out and supremely costlier) cannot continue, and too many in the audience sit there, mouths agape, wondering what hit them.

What this signals?  The Committee on the Present Danger is reforming and will seek to paint Obama as the second coming of Jimmy Carter.  I don't think this is a bad thing, per se, and I truly believe Obama needs to offer a strong defense against the charge. But what comes next, in terms of a progressive revitalization of the military post-Iraq, cannot be some mindless return to the Leviathan force structure of the past.

So we need more than brain-dead whining like this.

AQIM as an organizing principle for West African security cooperation

Theme of mine going back to Blueprint: You squeeze al-Qaeda out of the Middle East progressively (thanks in large part to the middle-aging of the population and globalization's penetration and whatever success in democratization out of the Big Bang beyond Iraq) and it naturally gravitates in two directions (paths of least resistance--namely to the NE and Central Asia via Af-Pak or to Africa.  These two regions provide the bulk of Paul Collier's "bottom billion," and many are, in my vernacular, "fake states" created by outsiders (Europeans in Africa, Brits and Stalin in SW/Central Asia).

So you get two similar strategic flanking maneuvers by great powers:  Shanghai Cooperation Organization in Central Asia (Russia and China lead) and America's Africom in Africa.

For a long time, even the precursor US effort in Africa (Combined Joint Task Force-Horn of Africa, which I wrote about in Esquire (see "The Americans have landed")) was considered a bit of overkill.  Simply put, there weren't hardly any terrorists to work, outside of the foreign fighters in Somalia by way of Yemen.

This Economist article suggests that a critical mass is appearing in West Africa, or at least enough activity to become an organizing impetus for regional cooperation--naturally with Africom involved:

OPERATION Flintlock has begun. American special forces have been descending on Burkina Faso, Mali, Mauritania and Senegal in a joint exercise, expected to last another week or so, to combat Islamist terrorism in the region. It is the latest stage of an evolving partnership between America and much of west Africa. Over several years, Americans have been training their counterparts in these countries in everything from marksmanship and parachuting to the more touchy-feely stuff of winning over hearts and minds.

When the Americans first started talking about al-Qaeda’s threat in the Sahara, many were sceptical. But a sharp increase in the rate of attacks in the past 18 months by what the jihadists call “al-Qaeda in the Islamic Maghreb”, usually abbreviated to AQIM, have convinced even cynics that a threat of sorts does exist.

When AQIM emerged three years ago out of a ruthless Algerian guerrilla outfit called the Salafist Group for Preaching and Combat, better known by its French abbreviation GSPC, it seemed intent on uniting north African jihadists to wage war on Europe. It has largely failed on that score, having been squeezed by Algeria’s security forces, who have broken up many of its cells. Instead, the group is now concentrating on softer targets in a belt of countries farther south.

Armies in the Sahel, that wide stretch of land just south of the Sahara, have increasingly often clashed with Islamist fighters.

A lot of AQIM activity is typically banal, as in, kidnapping Westerners for ransom (not exactly a new trick for the neighborhood), so we already see some obvious devolution into organized crime.  Then there's the usual drug trade.

What AQIM brings to the table beyond criminality is the playing on local grievances (there is never a shortage of causes "celebre").

To be monitored.

How goes democracy in Africa?

Map comes from Freedom House 2010.  Legend is green for free, purple for unfree and yellow for partly free.

Subject is Cato Institute report on state of liberal democracy in Africa by Tony Leon.

Gist:  Economic reforms are what will drive the emergence of liberal democracies on the continent.  Why?  All liberal democracies are also market-oriented economies.

Recent positive trends include (from Daniel Posner and Daniel Young, UCLA):

• Democracy is increasingly seen as only legit form of government in Africa (What?  No Beijing Consensus?)
• Elections are now the norm, not the exception
• Elections are now increasingly contested, often vigorously
• Lifetime rule is disappearing (since 2000 we see longtime leaders gone in Malawi, Ghana, Kenya, Nigeria and ten others).
• Of the 18 presidents who bumped up against two-term limits in recent years, not one went extra-constitutional, 9 stepped down, three tried and failed to change constitution, and the six who were successful all got their 3rd terms.

Still, the report concludes, "presidential power remains a key impediment to democratic deepening."

Best short-term fix:  governments eliminate current restrictions on media.

No mention of China's impact, but I come away from the piece more optimistic about Africa's future.

South Africa: how big the soccer bounce?

Half a million out-of-country soccer fans are expected to show up for the World Cup, along with me for the Time/CNN/Fortune Global Forum (check out the site and the participants bar on the right:  Bill Clinton on top and Tom Barnett at #9 . . . okay, it's Bill Clinton as #1 and three other heavies and the rest are alphabetical).

Anyway, this is a bit of a travelogue piece in Bloomberg BusinessWeek that previews the country you'll find there when you come for the Cup:

What visitors will find is a nation of First World amenities and infrastructure, and a place where optimism is perennially tested by unresolved Third World issues of poverty, crime, inflation, and racial tension. Already the undisputed economic engine of Africa—it accounts for 39 percent of sub-Saharan Africa's gross domestic product—South Africa still labors with plenty of fiscal shortcomings. One of them is that the recession did bite at least a little. Unemployment, which had been trending downward since 2006, rose in 2009 to 24 percent from 22 percent in 2008, throwing tens of thousands of mostly poor and middle-class black South Africans out of work.

On the positive side, South Africa (pop. 49 million) has proven resilient. While it saw a negative GDP of 1.8 percent last year, the economy began growing again at the end of 2009, aided by the vital, $27 billion-a-year tourism industry that saw a slight uptick in visitors in an otherwise down year. Moreover, South Africa has weathered a recent bout of tension sparked by incendiary remarks made by an upstart African National Congress (ANC) politician and the murder of a notorious white supremacist. Predictions by pundits here and abroad of race riots didn't pan out.

Sounds like a country on globalization's frontier alright.

Until last year, South Africa recorded positive growth in GDP every year since true democracy arrived in 1994, defying a lot of predictions.

Innovating faster than your customers can accept, otherwise known as . . .

Facebook consistently pushes the privacy envelope, and Chuck Schumer is gearing up.  The whole, letting companies know your brand loyalties strikes me more as reverse advertising that a huge loss in privacy, especially in a culture where everybody now wears their labels on the outside of their clothes (big damn change from my youth), but I get the angst too.

Zuckerman's quote disturbs a bit though:

There's always a challenge of innovating faster than your users understand or accept.

And there's a reason why, Mark.  When companies "innovate" at that stealthy speed, rule-breaking tends to follow--and fraud, and stealing, and . . ..