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Re: I wish I had been wrong

On Sep 21, 7:44 pm, Matt <m...@xxxxxxxxxxxxxxxxxxxxxxx> wrote:
> Roy Schestowitz wrote:
> >http://groups.google.com/group/comp.os.linux.advocacy/msg/2a10e11ef9c...
> >> While I was focused on Bush's handling of Microsoft, it seems that
> >> Bush was also turning a blind eye to lots of other companies' illegal
> >> business practices. In other cases, they were just unethical or
> >> unsound.

> > Well, this way he could fight 'them' without
> > having the American 'folks' worry
> > about the huge debt. The SEC must have taken
> > a trip to Maui. They failed to
> > spot the issues in SCO just months before bankruptcy.

More likely, they did know what was going on.  Wasn't one of the SCO
lawyers in the case Trent Lott's son?  The SEC seems to be asleep at
the wheel, and letting lots of book juggling go by, even though it
makes the company look more successful than it really is.

Microsoft has been reporting higher revenue, and high profits, yet
their huge cash hoard is going fast.  Appearantly Accounting 101 no
longer applies.  Appearantly decreases in assets and/or increases in
liabilities is no longer part of the valuation of capital - since
profit is supposed to be the increase of capital over a period of
time.

Some of this has been the shift from cash to receivables - in effect
funding their revenue stream, then writing down the receivables.

> SCO is peanuts except WRT the copyright/IP issue, which unless I'm wrong
> is outside SEC's realm.  I think they had something like a few hundred
> employees.  Anyway, it's not clear what you would have had SEC do WRT SCO.

The SCO case was an attempt to set a multibillion dollar court
settlement.  Had IBM settled, it would have implied that Linux was
"fair game" for IP "poachers" (people claiming patent rights or
copyrights over OSS code).

IBM was acutely aware, more aware than most, that OSS was published
and available for review, and if there was a claim on the IP rights,
other alternatives could easily be substituted.  When IBM contributed
their scheduler, they were in competition with 5 other schedulers, and
the
Kernel team was very rigorous with all the candidates, making sure
that there was written verification that the code was original, that
it was
not a derivative of other proprietary products owned by some other
company, and that the offering authors would not assert patent or
copyright claims against Linux users.

The irony is that OSS producers - the people who organize and
coordinate OSS contributors, tend to be more fanatical about
copyrights and intellectual property than proprietary publishers,
BECAUSE the code is so public.

IBM not only got almost all of the claims summarily dismissed, but the
claims they did not ask to have dismissed, they are prepared to prove
that they, not SCO, owned.  IBM can trace the code they gave to Linux
back to systems developed in the late 1960s, long before SCO even
existed, and before K&R had published their kernel, possibly even
before they started their kernel.  Furthermore, IBM can prove - using
the Version 6 kernel, that AT&T had nothing like what IBM offered as
prior art.

> I think most people would be happier if SEC had ignored a hundred
> companies the size of SCO and instead focused on the practices that led
> to the current crisis, which could involve amounts comparable to the US
> annual budget.

The SEC has to walk a very fine line.  They have to maintain a very
low profile, because even the slightest public leak of an SEC
investigation into irregularities can trigger a sell-off that drops
the price disproportionally to the actual irregularities.  Enron's
numbers were only off by about 5% but the public nature of the
investigation triggered a 99% drop.  WorldCom was only off by 2% but
the public investigation dropped it 99.9%.  Investors, including
pension funds, 401K funds, and IRA mutual funds were hammered, many
watching their savings cut by half, and then by half again.

On the other hand, they still have to conduct the investigations as
discretely as possible, but they do have to conduct them.  However,
much of the mortgage quality was outside their regulatory domain.

The treasury department is responsible for reviewing bank loans and
making sure that standard risk assessment standards are followed.
Until 1999, when the Republican Congress reversed the laws put in
place in the 1930s to prevent another Great Depression, these
guidelines were the law of the land.  Deregulation let the banks
"fudge the numbers", doubling and even tripling the amount of mortgage
debt (and unsecured debt) that a family could borrow based on their
income and after-tax take-home pay.

The treasury department also has to walk that fine line between
diligence and discression.  A leak about an investigation could
trigger a "run on the bank" with depositors and creditors shutting off
the bank's cash flow, making the problem exponentially worse than it
already is.

One of the reasons we had to go in and rescue these big banks was
because a run on those banks would have had the same effect as every
depositor going to every bank and demanding cash settlements
immediately, then declaring bankruptcy.  It could have triggered a
loss of all assets for about 30 million families, including assets
used to pay pensions, assets used to pay annuities, and even assets
used to pay federal and state entitlements.

Imagine what would happen if 30 million people suddenly had no income,
had no home, and no credit.  It would only be a matter of weeks before
they were trying to get themselves arrested by breaking store windows,
just so that they could eat.

Younger people would turn to crime, using guns and incendiaries to
create diversions and raid the homes of the middle class, or anyone
else who still had resources such as food, money, fuel, or even a warm
home.

There would also be a huge surge in "White Collar" crime, with hackers
going "full criminal", pulling huge quantities of cash from credit
card rubbings and other bank accounts.

Tax evasion would escalate, as people raid their 401K savings to
survive, and then disappear from the IRS radar for several years.  Not
because they want to break the law, but because they have no funds to
pay the taxes.

As the cities were drained of resources, city dwellers would turn to
rural areas, stealing from farmers, burning them out, even killing the
farmers to get their crops.  Imagine 80% of the population suddenly
using guns and automatic weapons against small towns and farmers,
first to get the grain stored in silos, then to get the seed grain, as
food.

Eventually, the survivors would end up in national forests, shooting
game and fishing, and killing any people they see as well, even
canabalizing them.

As they ran out of ammunition, survivors would turn to more primitive
weapons, including knives, bow and arrow, and eventually to stone-age
tools.

It would be be like the fall of the Roman Empire that eventually
devolved into the Viking raiders.  But instead of taking several
hundred years, it might only take 10-15 years.

This is what the government is now trying to prevent.  The biggest
problem is that the international community could still "pull the
plug", refusing to sell us key resources like Oil, food, and other
things we've come to depend on, and with no cash-flow to fund
solutions, it could still happen.



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