Nobody Could Have Predicted …

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Once again, banking’s Best and Brightest piss away your tax dollars!

You could hardly blame Kenneth D. Lewis, the embattled leader of the Bank of America Corporation, for feeling a bit of buyer’s remorse.

His audacious acquisition of Merrill Lynch, the giant brokerage, looks so disastrous that many on Wall Street wonder if he can keep his job.

Four months ago, as turmoil swept Wall Street, Mr. Lewis’s bank bought the foundering brokerage for $50 billion in stock. Today, the two companies are worth $40 billion combined.

Of course, no one could have predicted this would happen:

Some of Mr. Lewis’s shareholders are angry, and the lawsuits are flying.

Many initially questioned whether Mr. Lewis paid too much for Merrill. But now the conversation has turned to whether he adequately disclosed the risks of the acquisition to his shareholders. After Mr. Lewis clinched his deal, Merrill lost a staggering $15.3 billion during the fourth quarter. Bank of America went ahead with the purchase anyway.

A billion here, a billion there …

Now, Mr. Lewis is struggling to fix Merrill while integrating his bank with yet another company, the Countrywide Financial Corporation, which his bank bought also last year.

Countrywide?  What could possibly go wrong?

Price Paid for Merrill is Rising [NYT]
63 Comments

At this point, I’m sure I have a better understanding of basic economics than these fuckos.

So, where do I line up to get my golden parachute?

Risk? What risk? Their disclosure statement probably said something like “Paulson will be there.”

Those who neglect reality are doomed to be bitten in the ass by it.

@Dodgerblue: After the bottom line the bank has a ‘Continental Illinois Forgiveness of All Sins Card’ applicable at any time BoA’s fuckwitted grow-at-all costs strategy fails. It’s beyond a shabby bank. It is reckless and violent to its own retail customers. Senior management should be thrown out of a helicopter at sea.

@FlyingChainSaw:
Isn’t that most if not all banks management?

BTW, did you write the screenplay for soon-to-be-released movie The International?

@ManchuCandidate: No. It’s actually a fairly recent phenomenon that banks regard their customers as targets for random theft. After 1992 I ended up in a state-chartered credit union that rates 5/4 in the US risk assessment system. They’re fine. Zero fees, except for incoming wire transfers at $10.

No. My knowledge of movies comes from randomly watching them on hotel room cable while I am grinding email. What’s it about? Financial crime? I am digging on Cagney & Lacey now in German.

@FlyingChainSaw: Since you seem to know a bit about the diplomatic corps, any advice for breaking into the business? I’ve just missed registration for the February foreign service exam, which could be a blessing in disguise, assuming that all the Obama acolytes with a newfound interest in serving their country flood that test window, making the competition for the next go-round less fierce. In the meantime, it also means more time to prepare, insofar as that’s possible, and more time to look at other options (USAID among them), so that can’t be all bad.

@mellbell: Way back a while ago when I was fresh outta law school, I took the Foreign Service exam and missed making the cut by one point (in English, ironically enough for a former journalist). Being of the minority persuasion, they were gonna cut me some slack and let me slide in to the next level of whatever they do to check you out, but having met diplomats from elsewhere and being aware of the lack of fully qualified FSOs out there for US America, I said that’s OK , I’ll do it when I can actually make the grade on my own.

@mellbell: I passed the written Foreign Service exam with flying colors (it was like being on Policy Wonk Jeopardy mixed with the English section of the GRE) and bombed the oral part when I was sent off with a bunch of arrogant douchebag white boys from Georgetown’s School of Foreign Service.

Did we have this discussion at the Brickskellar? I can’t remember..

Anyhow…I have a few friends who unlike me passed the second part of the FS exam, which is actually harder for people like us. Gmail me in the back of class and I’ll put you in touch with them for their secret tips on how to pass the oral part of the exam. I have no doubt you will do well on the written exam.

Hopey threadjack time. Here’s a nice story. My last year in college, 84-85, I became close friends with my next door neighbor in the efficiency apartment complex I lived in. We were close, but lost touch after graduation. 20 some years later, about a year ago, he contacted me out of the blue, and told me this story. He has a son, his son was born with severe nuerological problems, I don’t recall specifics, almost blind, I think some other major issues, too. So he has a son with severe problems. But when the kid was about 3, he just started playing with the piano they had in the house, and to my friend’s astonishment, he was making music, so they started him on lessons.

He’s become a blues music prodigy, the boy, Conrad Oberg, has recorded with some legendary blues artists. At first he mostly played piano, but he has taken to the guitar,

Here is a recent Youtube: http://www.youtube.com/watch?v=hmBtI0HpYWk&feature=channel

Isn’t that amazing?

@Promnight: I’ve heard about that guy. I just saw a video of him doing Voodoo Chile, unfortunately marred by bad sound. I love how he does the oscillating dive bombing runs with the pickup switch, a trick also used by Tom Morello of Rage Against the Machine.

@redmanlaw: Its a funny thing, you go through your life, you get to know so many people, some friends, so many acquaintances, classmates, people you work with, it gets into the thousands. And I used to wonder, of all these thousands of people, will any achieve anything noteworthy, become president, a captain of industry, an artist, musician, or actor.

This is it, for me. A law school classmate is now governor Corzine’s COS, which would make him about one of the most poweful people in the state. And my old friend’s son, who is something of an inspiring and amazing story.

@ManchuCandidate: “Those who ignore reality are doomed to be bitten in the ass by it.”

Have I got that right? If only Republicans heeded this simple truth, they’d be (I was gonna say Democrats, but no, pragmatists, a la the Unicorn: “You can’t just listen to Rush Limbaugh and get things done.”).

Update: No, I didn’t have it right. Manchu’s verb is much better: “Those who neglect reality are doomed to be bitten in the ass by it.” I’m a mother, you’d think I’d have picked up on that difference at once.

The care and feeding of reality is the first priority of realists.

@redmanlaw: Congrats! You missed out on “the deepest and most depressingly profound disillusionment by prolonged exposure to fundie assholes” that America as suborned by Bush-Cheney-Rove devised (as regards federal jobs, that is). If ever there had been proof that politics matters, we have been here for it. [I’m fond of the subjunctive mood, which is dying, like all of us, polar bears included.]

@Promnight: And a shout-out to Promnight, here’s hoping I correctly understand the term “shout-out.” When John Lennon was killed, it took me a couple of months to acknowledge just how profound my grief was. “Better recognize your brothers, everyone you meet.” “Yes, we all shine on, like the moon and the stars and the sun, come on, every one.”

Well, now, I want to talk about the words “ignore” and “neglect,” with regard to “reality.” Need I say more. Prod a neo-con and he or she will tell you a fable or a fantasy in which persons whose relatives or loved ones who are now dead or horribly wounded or in jail or in deep mourning or deep debt or all of the above are grateful for the armaments raining down on them. Let us not forget our sons and daughters (and everyone else’s sons and daughters). When I was a young woman (born in 1942, talkin’ 1964), the young man I was necking with was flunking out of Harvard (for the second time) and my half-brother was flunking out of Indiana University, and the best I could do for anybody was trade on my knowing Robert Cole (ts wasnt’t a trade, Bob just hated war, for
the most of impeccable of reasons: “War. What it is it good for?= Absolutely nothing,”
So, I interviewed with R. Cole, who gained my half-brother a whatever and I married Paul m show also I’ not ure withe of my.

@mellbell: Befriend people already working in State and get them to coach you. I know people who’ve passed and they’ve ranged from deeply knowledgeable in world affairs to ohfuckhowdidyougetinhere. The commercial legates I’ve met in South America and Europe and Japan were flat out stupid, shockingly out of touch. Also know that Commerce has overseas desks and sends people abroad to represent the states. One guy I met from the Japan desk was very sharp and loved his gig, though when he finally got assigned overseas, they sent him to like Vietnam, reducing a lot of the value of his Japan work. SFL’s should be able to give you the best view of the mechanics of State’s exam. Do check out what Commerce can do for you, at the same time, if your larger interest is in traveling the world representing the US-as-normal-country.

@FlyingChainSaw:
It’s about a bank that has become it’s own crime syndicate.

Kinda silly, but the bank in question somewhat describes BoA or Credit Suisse. I guess the script writer had more than a few bad experiences with the banks.

@Promnight: A friend’s little sister was the costume designer for X-Men and the recent Superman movie. Went to law school with Mike Judge’s sister, which makes her the aunt of Bevis and Butthead.

@lynnlightfoot: One of my friends was telling me “don’t do it R – they’re gonna make you a spy.” At the time I was worried that I might win a Pulitzer Prize and have peaked out in journalism at 30 or whatever. It was an odd thing to contemplate while eating fajitas with a friend on a bench on the Santa Fe plaza.

@FlyingChainSaw: Banking. Reading your post turned on a light. I use BoA for most of my banking. Remember, we live in a small town albeit a fairly sophisticated one. So I deal with the local bank staff who are decent and the branches are handy. However, the company worries me and I don’t like the way it’s run. I do belong to a credit union through Actors’ Equity and checked out their rates which are significantly better than BoA. I’ll now go check out their rating before doing anything else but I’m thinking of switching what saving I have to my credit union.

So thanks for making me think this early on a Sunday morning.

A.P.Giannini has been spinning like a top for several years now.

@Benedick: The big commercial banks hate the credit unions and started their attack during the Reagan Administration, rolling back Regulation Q which eliminated the credit unions’ interest rate on deposits advantage. As late as 1993 I heard the president of the Credit Union Executive Society vocally opine that the commercial banks want total deregulation and total elimination of credit unions. Guy looked like Bill Buckley and raved like a You may see that your credit union pays lower nominal rates on NOW and deposits but without the fees and a little planning of term deposits you will end up ahead. (Are the rates you checked for term or all interest-bearing accounts?) BofA is a dangerously incompetent bank. They outsource their tax payment servicing on notes to Transamerica which has fucked it up on a number of notes of which I am aware of. In every instance, the bank just shrugged and the consumer had to parse their contractors’ fuck up. One guy I know, been consulting in and around the banking industry since like 1983 said when he called, he had everything parsed and was going through the list of remediation the bank needed to complete and the lady on the phone just broke down into tears. All she did all day was listen to people shriek at her and she was under pressure to ‘resolve’ stuff ASAP and was virtually powerless to do anything. Basically, people’s lives were being destroyed and it was her job to shoo them away. The local people can be nice but they can’t stop the sloppy operational profile from casting your life to the wind.

@ManchuCandidate: BCCI? Where characters like the Bin Ladens and the Bushes meet. The script is already written in that bank’s story.

@FlyingChainSaw: Cui Bono? Is there an upside to this downturn, for the ultra-elite, that I am not seeing? I mean beyond the looting of the various governments’ treasuries, is there some structural change this will bring about that benefits them?

One thing I suspect, is that its a desperate, last minute attempt to do away with social programs, national health, social security, using the same plan as the “drown it in the bathtub” strategy, which didn’t work because the people like their social programs. Have they decided to bankrupt government, all governments, through this crisis, with the added bonus that the money is going to them, too.

They are third-worlding the major industrial states, making even the greatest powers go into levels of debt that will make all nations peons to the world bank? I understand there is civil unrest in Iceland of all places, because, having taken money from the IMF, the government is being pressured by the IMF to do away with national health. Its what the big banks did to the south american countries in the 70s and 80s, isn’t it?

The amazing thing is that with the money we have literally thrown away in the last 6 months, we could have made Social Security perpetually solvent, created a single payor national health insurance system, gone to mars, and invented a car that runs on water. Now we won’t be able to afford shit for 50 years. Or, how long was it between the fall of Rome and the Renaissance?

@FlyingChainSaw: BTW, now that we have a vague idea of what you do, and the circles you run in, and knowing that you are one of the keenest minds any of us has ever encountered, brilliant, unbelievably knowledgeable, not tied down by cant or ideology, independant minded and forceful, what I am asking, FCS, is, how can you stand it. I imagine you are the clearest thinker and sharpest mind going, not many can possibly exceed you, and you are passionately moral, and you have an amazingly broad, worldly, historical perspective. How can you possibly not feel like you are surrounded by idiots or blind idealogues all the time?

@Benedick: Go to the credit union. I’ve belonged to the same credit union as my parents since I was 11. It is awesome. I can run a balance as low as $3 and they don’t care. I get paid interest on my checking account.

@FlyingChainSaw: BTW, thought of you (and Prommie’s ark) when I read this today on the elliptical at the gym. Any chance you live in Saratoga Springs or run a blog called “Clusterfuck Nation” on the side?

@SanFranLefty: I can’t use the credit union for day-to-day banking because it’s too far away. At least, I don’t think I can.

@FlyingChainSaw: Reading this – and SFL’s comment – makes me think about moving any savings I can to my credit union. I’m calling them first thing. And I’m very grateful that you made me think. It doesn’t happen often.

@Benedick: My credit union is in Texas. It takes a day or two to mail in hard checks for deposits, but my paychecks are direct deposited with no delay. And ATMs are plentiful wherever I go in the world (except for Cuba). I haven’t really lived in Texas for a significant period of time in almost 20 years but I haven’t had any problems living 2000 miles from my credit union.

@SanFranLefty: You, you YOU. I want you to know, If I were King of the World, I would appoint you the Anne Landers of the world, except that your advice and decisions would have the force of law. You are a peacemaker with an innate ability to see how to reconcile conflict and get people on the same page. You are judicious, and diplomatic, kind and fair, and wise, unnatureally so.

Where did that come from? Were you the peacemaker in your family? Did that combine with a calm and level-headed disposition, honesty, and intelligence, to produce this incredible calming wisdom? I am sure I am not the only person here who feels so relieved and comforted to hear from you and to hear that you also think the same way I do on some complicated difficult issue? I cannot be the only one, who will also trust you so much that I will change my mind, if you disagree with me.

Where did that all come from? I know I am not the only one who sees it, everyone, its true, isn’t it? SFL defines wisdom, moderation, cool-headedness, in almost every situation? Anyone, who else thinks so?

@FlyingChainSaw:
Sort of, BCCI meets BoA.

@Promnight:
I have to agree. FCS’ insight and knowledge into the murky world of Finanz has opened my eyes and helped tie together all the stuff I’ve read about the various financial disasters and scandals like the Savings & Loan mess.

I scoffed openly and laughed bitterly at friends who told me that 2009 would show a recovery. Especially when the toxin is in the much much more vast bond market not equities.

I’ve basically shut down watching any MSM bidnez anal cysts aka analysts because they really piss me off. Hard to expect brown nosing cheerleaders who never worked in bidniz or ecnomiks background to know anything they’re reporting.

@ManchuCandidate: I feel like I am through the looking glass, when I look at the MSM reporting on the economy. And not because I know its BullShit. Its because I know that its necessary. Yes, its necessary.

Because public mood DOES matter. It really does. People would panic if the truth of it were put to them in plain words.

And I do not even think its deceptive to report in this way, trying to encourage hope, confidence. Because, well, nothing is either good or bad but thinking makes it so, as the bard said, and you know, How people think about the economy, their level of optimism, is in fact a “reality” which has a real effect ON the economy, and when perception truly is reality, then messages of perception cannot really be either true or false, whats needed, believe it or not, is faith, and encouraging faith is not encouraging a falsehood, its just encouraging a real economic factor to exist.

But thats kinda beyond the looking glass, because the logical mind likes to think there is never any value in the subjective, that there is an objective reality. But sometimes, subjectivity becomes objective, when intangible ideas and moods cause real world actions that do affect the world.

Like when a freind of yours announces he’s getting married, to that horrible woman, and you think “what the fuck, she’s fucking horrible,” but he loves her and marries her and they are happy and raise a happy family. His completely irrational, subjective belief, his intangible emotional response to this woman, LOVE, has a real physical effect on the world, and produces real things to happen, a happy family, productive kids, its crazy, you know?

But its real, its not good to provoke despair.

@Promnight:
Point taken. Been there. Bit my tongue and kept my mouth shut.

However, there comes a point where you might as well just tell the truth and let the cards fall where they may instead of trying to build false optimism. Better to explain why and what has happened. I point to what happened psychologically to the UN (er mostly US) Army in Korea Dec 1950 when MacArthur pronounced that the troops would be home by Xmas while ignoring the Chinese infiltrating 300000 troops across the Yalu. They did not recover from that shock till about Feb 1951. Or what happened to the troops who landed on Omaha Beach June 6, 1944 who were told that they would be facing off against old men/boys, not the combat veterans of the 352 Infantry and were psychologically broken if not for the few leaders who kept their heads and ignored the G-2 BS.

…there comes a point where you might as well just tell the truth and let the cards fall where they may instead of trying to build false optimism. Better to explain why and what has happened… -MC

okaaay… but I would not recommend watching this before bedtime.

@SanFranLefty: My work in-box is full of rumors. Could be a good day for people who breathe.

@Promnight:
You are a dear. Peacemaker? Ha ha ha, you have no idea.

Daughter of an alcoholic and schizophrenic, with a psychotic entitled adopted manic depressive sister thrown in for shits and grins. Yes, you might become a peacemaker -slash – above her grade level reader if you were in my shoes.

@Promnight: It’s not clear to me who is going to win from this. So much capital has disappeared that I’m not sure those who have any left will have much to do with it. You can’t eat it. The Saudis can’t drink their oil.

@Hose Manikin:
I’ve actually seen that at a club I was at about a month ago. I’m scared, but not surprised about the information either.

@Promnight: Oh, yes, some of the same gangsters that sold a turbocharged S&L debable to the world, will no doubt prosper as businesses go into debt to weather the Great Trough of the Naughts or sell off non-core divisions to slightly less fucked industrial contemporaries in E. Asia, Europe and Latin America. And you’re right, they’re IMFing the United States which pulls away a capital cushion that once allowed other parts of world in financial crises, Argentina and Mexico in contemporary history, to rebound in relatively short order. The states has committed itself to deep government debt before but what we’re into now is truly an order of magnitude larger than anything before. The smart-assed elites may well end up provoking Eisenhower Era levels of taxation and more regulation than they ever imagined to extend what will be, at best, a long deep trough of falling GDP. Oh, yeah, don’t you know – all that and more. The technologies that would have matured and developed around interplanetary flight and a market-ready self-fueling hydrogen car running on water (there’s one prototype running in Japan; shocker) would have greated booms to make the Internet look like the Chia Pet. In the end, the fanatical pursuit of a marginal advantage in tax rates, they will have nuked all manner of opportunities for new growth.

@Hose Manikin: I get personally insulted by shit like that, putting together a presentation like that, and not using constant dollars, just using nominal dollars, as opposed to something more meaningful, like percentage of GDP. Its what a propagandist for some idiotic idea like a return to the gold standard would do.

@Promnight: Thanks. I just read the manuals most everyone ignores and call up the authors when I have questions and remember what they tell me. My daily experience is that I am in contact with and surrounded by incredibly well informed benificiently oriented people in the US and abroad along a number of government and industrial axes every day for my work, in informal fora like this and another, completely private, that I’ve been corresponding with since 1983 when it was a general-service BBS, mostly made up of folks from academia, US diplomatic corps members past and present and a number of non-fiction authors. I never turn on the TV or the radio except for my beloved university sponsored FM stations that fill my workday with glorious music. Work puts me in contact with all manner of software and network artisan for some very stange and interesting projects with hairy technical and diplomatic dimensions to manage. When I get out, it’s for music (participartory and otherwise; La Forza del Destino at the state opera house in Vienna was a recent treat you’d have appreciated) or poker nights with a bunch of auld software designers and network engineers who are passionate about their work as all fine artisans are. My experience is that I am always hard pressed to keep up with the brilliance and industry of people I find myself around. It would be easy to turn on reality TV shows and blanche at the hateful mindlessness of it, listen to Limbaugh and go into suburban bars and get in fruitless arguments with the victims of the last 50 years’ tragedies of gangsterocracy run wild and despair that we’ve descending into a new dark age. Maybe we have. Still, I can’t despair. I can locate the abbies like Stinque.com and those I have to visit for my work and defy the murk of ignorance and fear that envelopes us all. At least until we descend into full blown canninal anarchy.

@Benedick: @ManchuCandidate: @SanFranLefty:

CU’s can be safer and, when you figure in all the fees and exceptions written into their rules, a whole lot more advantageous to the consumer. They can be family run tyrannies and sweat shops. It is always a good idea to check out their present day safety and soundness ratings at the legendary Bob Eddy’s Bank Rate Monitor – which is now online.

http://www.bankrate.com/brm/safesound/ss_home.asp

High SS ratings may not mean high deposit rates, however, and in fact the highest rates are paid by the institutions in the worst shape in a desperate bid for capital to shore up creaking loan portfolios.

Also check to see if your state-chartered instution is insured by FDIC or a state agency which may or may not cover all deposit losses.

@FlyingChainSaw: I am glad to see that my perception of the world, that there are few who are intelligent and well-meaning, is only the result of my cynicism and my surroundings, and that there are many like you out there. Good. Thats a hopeful thought. Thank you.

@Prommie: Few? No like all over the place and everwhere. And that in the murkiest place and time, there is enormous potential. The most famous poet I know personally is from Atlantic City and, like, not the good side, from a time when it didn’t have one, if it has one now. (My only visit to the place featured hookers screaming at cars in the rain, standing across the street from casinos that wouldn’t allow them to ply their trade on their sidewalks.)

@FlyingChainSaw: No, you just described AC today in all its glory. I am always amused by the Pimp traffic jam on the AC Expressway in mid-afternoon, as the pimps drive their hos to work, you can just tell, nasty looking person in big car, with 1, 2, or 3 very young over-made-up women in the back seat. All heading east to go to work for the night.

@FlyingChainSaw:

market-ready self-fueling hydrogen car running on water (there’s one prototype running in Japan; shocker)

Bzzzt! Fail. Splitting hydrogen and oxygen out of water takes a fair whack of energy. If you’ve got all that energy built into your car, why not just use it to drive the wheels? Converting energy states is comparatively very inefficient.

Hydrogen is not an energy source. Hydrogen is an energy storage medium. Unless, of course, someone’s skimming it from Jupiter’s outer atmosphere, and that’d obviously be a super efficient way to retrieve energy…

If anyone tries to sell you a “self-fuelling hydrogen car running on water,” you might as well be buying coastline property in Kansas.

Sorry, I can’t let that kind of thing pass silently by.

@Prommie:
I hate to see you take personal umbrage and get your panties in a bunch over something like a presentation, so here is the same chart in constant CPI dollars. Doesn’t change the story one iota. What the Fed is doing now swamps everything that has gone before – including inflation adjusted dollars.

If you want the story in a meatier (but a bit more dated) format than this presentation – the guy behind the iTulip site is Eric Janszen, and he wrote this prescient cover story article for Harpers last year – before we went completely off the cliff.

You don’t need to invoke a “gold standard” or even be an economist to have a common sense understanding of what is going on here and the risk it entails. The easiest way to destroy a currency is very well understood. You just keep printing money. If you print enough of it, the currency is destroyed. Pretty simple really. The real question is – Do you have confidence that the central bankers and Bernanke know when to stop and whether they will have the political courage to do so?

@IanJ: True. I saw it running on a news program while I was traveling in Europe. Here’s the You Tube-ed clip: http://www.youtube.com/watch?v=CrxfMz2eDME

@FlyingChainSaw: Thanks for not taking that comment personally — it wasn’t intended that way, but re-reading it, it sounds kind of harsh.

ADD: Just watched the YouTube clip. That reporter has got to be the most credulous idiot in all of Reuters. A car that runs on water with no further energy input? Bull-fucking-shit. There’s no technology known to man that will liberate hydrogen from water without external energy input. You can do it with chemistry (and need a constant supply of whatever catalyst you choose — and I’m not sure it’s feasible to use water, compared to cracking something more hydrogen-rich, like natural gas) or you can do it with electricity (and need a constant supply of electricity).

Reuters should be ashamed of that story. They got completely suckered.

@mellbell: poke me on FB or better yet email me at my IRL address. I’ve got orals in March.

@IanJ: Not at all. I should pay better attention to the details of these report. I saw it on the TV news traveling somewhere and remembered it as gospel. (I pig out on cable TV when I travel as I only get Basic rebroadcast service from the scum-sucking dogs at Comcast.) Not with water alone. Could the fuel cell be composed of reaction rich chemistry that is activated by water? (Could be the play is for expensible consumables that have to replaced on a regular basis.) That is if it not a complete hoax by a guy looking to rob credulous investors.

@Hose Manikin: Oh its true what he’s saying, so far as it goes, but putting the presentation on without adjusting for inflation is a cheesy tactic. Such as. Also it make me distrustful.

@FlyingChainSaw: I’d lean more toward complete hoax — at least, the reporter said they claim “no other inputs,” which means to me you don’t pour in any mysterious powders or plug into any wall sockets.

Water is pretty goddamn stable, so it takes some serious energy to split it apart.

That’s the problem with anything that burns hydrogen split from water — you lose energy when you convert from water to H2, and you lose energy when you convert from H2 to either heat + H2O (as you would in a piston engine burning H2), or from H2 to electricity via a fuel cell. Why not use 100% of the energy you started with and turn the wheels with that?

If you’re talking about a “hydrogen car” (and there are plenty of these which aren’t hoaxes), that’s cool and all, but where does the hydrogen come from? About the only situation that makes sense is when you can more easily store hydrogen than electricity — for instance, if you had a remote wind or solar power station and didn’t want to deal with chemical batteries, you could use that power to split water and store the H2. Then you use the H2 to power your car however often you go there to fill up. But H2 storage is big and heavy, or energy-intensive and expensive.

Hydrogen is also the smallest particle we know of, and it slips right around the structure of, say, steel, embrittling it in the process. So a steel storage tank can expect to lose hydrogen over time (the loss rate will obviously vary by design, and I don’t have any hard numbers handy), plus it gets more likely to develop fractures from repeated or heavy stress.

Hydrogen sounds cool, but it suffers from these two key problems: how do you get it (cracking water? splitting natural gas? why not use the NG in the first place?), and how do you store/transport it. They’re real problems that have to be conquered before H2 can become a viable fuel, and the trend I’ve seen is that we’re more likely to improve batteries before we’re likely to solve these problems from H2.

Now, all that said, there’s nothing to stop someone from discovering that mixing up mercury and cat fur with a bit of unicorn dust causes H2 to leap apart from H2O like magic, or coming up with the latest polymer that’s completely impervious to H2 for transmission lines. There may be a breakthrough any time, and lots of people are working on it, but it won’t be put into production by a Japanese shyster in a car, it’ll be a ripple in the pond that turns into a tidal wave and rocks the scientific community, probably taking 10-15 years from first announcement to the majority of scientists reluctantly agreeing that their experiment came out the same way. This is because it’s going to involve rewriting some major chunks of what we believe the rules of the world to be.

Et voila, now you know what sets off IanJ. ;)

@Prommie: Me too. Too didactic. And since I’m two thirds of the way through The Ascent of Money I now qualify as an expert.

@FlyingChainSaw: Thanks again for jog regarding Credit Unions. I followed your link and the Actors’ Federal CU does very well. I’m switching to them for important stuff and will leave residual account where I live for local stuff. I feel a great sense of relief. Oh, and the business account is much, much cheaper: as in no fees.

@IanJ: There’s a lovely play by D Mamet on the subject: The Water Engine. That however is a fantasy. I’m surprised it hasn’t been revived.

@Benedick: Mamet annoys me. It’s one of those things where I’m glad you people over there (for whichever value of “you people over there” you prefer) can do it, and have a great time, but don’t make me watch/participate.

@IanJ: And in case you want a more thoroughly-researched argument, the Wikipedia entry on water-fuelled cars makes the same points but with impressive chemistry and numerical data. It also mentions the Japanese car in question, which may actually be electrolyte-fuelled as FCS speculated (but that would violate their claim of “no external inputs except water”).

@Benedick: That’s easy as BofA criminally overcharges for everything in its commercial accounts. International wire – $45? (Last outbound one I sent, the kid at the bank mis-keyed the account number and it got stuck in the receiving bank’s system – which refuses amendment messages and therefore dead-ended BofA’s attempt to fix it. (I had to parse the screw-up with SunTrust and manage BofA’s shithead’s fuck-up remotely while on the road. Not fun, and all you get out of BofA are shrugs and complaints the company that was missing payment was rude for having a manager call trying to find out what got fucked up.) Get this, if you want the meta-data for incoming wires income to your BofA account, you have to call and they don’t publish the number to get you directly to personnel with wire room transaction data. You have to scream and yell at 100 people until one gives it to you – every single one of which will try to sell you a service that puts that data online for you with your other account information for 19 bucks a month. One company/client for which I am a director, almost all of its large transactions come in as wires – and about half bury the sender data in fields that aren’t visible in the account management console. The accountant has to call the secret number to resolve them with invoices. No reason for it except they are trying to hammer another 19 bucks a month from businesses they are already screwing. The upside of the collapse is that now, for safety sake, I have convinced the directors to allow me to move part of the accounts out of BofA. HSBC, here I come. They know about commercial banking and answer their phones and their whole service platform isn’t a series of interlocking scams fee masquerading as commercial banking services.

@FlyingChainSaw: Darling, I have no idea what any of that means. Though I am no end impressed by the contempt displayed for BofA. Don’t forget that I spend much of my working day worrying about downstage turns (no!) and jazz hands (NO!). I do recognize HSBC. We have it here. But Actors’ Federal are my people. They understand rejection in a deep, primal way. They understand that working eight weeks in a year is being fully employed. I have come home!

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