Friday, January 22, 2010

Terminal Velocity

Ben and Timmy (and Bo), there is this thing called "terminal velocity", beyond which a falling object does not fall any faster.

Suddenly Ben Bernanke's re-confirmation is "in doubt", various news outlets say. After seeing the stunning upset in the Massachusetts special election on Tuesday, some rats are deserting the ship. Here's one.

(Good for Barbara Boxer to suddenly see the light, but I for one hope I won't see her come November. I'd rather see Tom Campbell.)

Obama vs 'Evil Banks', But Who Buys His Government's Debt?

Treasury Secretary Tim Geithner seems to have doubts about the latest bank regulation proposal by his boss. Other lawmakers are cautious in commenting on the proposal to ban proprietary trading and investing in hedge funds.

Aside from the questions like "Does proprietary trading matter?" (or for many lawmakers, "What is proprietary trading?") and "Did it cause the market turmoil and crash in 2008?", I'm thinking about the consequences of openly declaring "war" on the nation's banks, fake or not.

One of them that occurred to me is this: Who is going to buy all the debt that the president and his administration is going to incur?

The nation's big banks happen to be the primary dealers of the Federal Reserve, who are required to bid at the Treasury auctions. Goldman Sachs, J.P.Morgan Chase, Morgan Stanley, Citigroup, Bank of America all bid in every single Treasury auction. Every week, Treasury Department sells short-maturity bills to the tune of $50 billion or more. Longer-maturity notes and bonds are sold every other week, often exceeding $100 billion.

Would the administration risk totally pissing off these banks who buy and arrange others to buy the government debt that is set to increase even bigger? The administration needs to fund $1 trillion-plus deficit, plus $1.5 trillion debt rollover.

The answer is rather obvious.

The president is striking a populist image of fighting the 'evil banksters' by focusing on the secondary or tertiary issues that need to be addressed in a real financial reform but which probably didn't cause the market melt-down in 2008. Is he talking about regulating OTC derivatives like CDS? Is he talking about rating agencies? Is he talking about securitization of illiquid and potentially risky assets like mortgages and credit card debts? No, he isn't.

Instead, he focuses on what the average Americans can understand - big bonuses.

The stock market is tanking for the third straight day. Since Wednesday, Dow Jones Industrial Average has lost over 500 points, or 4.6%. A panic will break out if Dow dips back below 10,000 again, which is only 200 points or so away, as it may feel like the nightmarish days of October 2008 are returning.

On October 2, 2008, Dow started the plunge after the bank bailout bill passed. In three trading days, it lost 870 points. In seven trading days, it lost 2,375 points, or 22%.

Thursday, January 21, 2010

Obama's Bank Proposal: Back to Good (or Bad) Old Days?

President Obama launched a fresh attack on the nation's large banks today, as anticipated, in which he is proposing a ban on the banks' proprietary trading and investment in hedge funds. The tongues are wagging that it was Paul Volcker, not Timmy Geithner, who was standing next to Obama.

Paul Volcker was the chairman of the Federal Reserve from 1979 to 1987.

Options started to be publicly traded in 1973, with the creation of the Chicago Board of Option Exchange (CBOE) and the Option Clearing Corporation (OCC). "For the first time, the general public is able to trade call options under the performance guarantee of the OCC and the liquidity provided by the market maker system." (

Put options were introduced in 1977.

Hedge funds, the first of which is said to have been created in 1948 by Alfred Jones, operated under the radar until late 1980s. The industry's explosive growth came in 1990s and 2000s. One of the most successful hedge funds to date, John Paulson's Paulson & Co., Inc. was founded in 1994.

Individual investors and traders started to use discount brokers when the Internet became widely accessible and easier to use with the graphic user interface - Internet browsers (Mosaic, quickly followed by Netscape) running on Windows 3.1, in mid 1990s.

Financial markets with fully electronic execution and similar electronic communication networks developed in the late 1980s and 1990s, the birth of the current quant (or algo) trading.

Algo trading and high frequency trading have been used increasingly since 2007 both by buy side (eg. mutual funds, pension funds, investor-driven institutional investors) and sell side (eg. market makers, hedge funds). Currently, 70 to 80% of the stock trading volume in the U.S. is attributable to the algo/high frequency trading.

Direct Edge, which rules in high frequency trading and flash trading, was founded in 2005. Its current owners are ICE, Knight Capital, Citadel, Goldman Sachs, and J.P. Morgan Chase. SEC's call to ban flash trading has gone nowhere.

No offense to Mr. Volcker, but I have this feeling that he just wants everything financial to be back to when he was the Fed chairman, back to what he knew best. I don't know what will happen to these big banks targeted by Obama, but I don't think small retail investors and traders necessarily want to see the return of the 70s and 80s.

The whole idea of "punishing the banks" into smaller, lower-risk entities also fits well with other financial proposals that have surfaced under the Obama administration. These proposals have emphasis on safety or security, low risk, but are likely to end up with high cost to the taxpayers.

Stuffing at least part of 401K and IRA with special Treasury bonds that would serve as "annuities" is one such proposal. The government wants to make sure that our retirement investment is safe. These days I wouldn't call U.S. Treasury bonds safe, but again, this "safety" is not for us; it is for the government who will be able to thus secure the captive buyers of its $1 trillion-plus debt year after year.

Another one is the trading tax being proposed by an Oregon Democrat and supported by the labor union. It is supposed to somehow reduce the risk by discouraging investors from buying and selling securities, but all it would do is to raise the cost of trades by several hundred percent for ordinary investors.

Outside the financial proposals, how about the whole-body scan at the nation's airports so that the passengers are safe? Equivalent of taking off everything you have on you, without actually taking anything off. But if you have nothing to hide, why would you protest? By the way these scanners are pricey, and one of the manufacturers is represented by the former Homeland Security chief Michael Chertoff.

The government will do whatever they want to do, because they can. Just don't get suckered into their antics simply because they say "it is to protect the American taxpayers." They always say that.

Ron Paul State of the Republic Address

Obama Wants to Ban Proprietary Trading

as expected. But wait, there's more. He also wants to ban investment in hedge funds by the banks. The stock market dives. Thank you Mr. President.

In the statement released by the White House this morning:

The proposal would:

1. Limit the Scope - The President and his economic team will work with Congress to ensure that no bank or financial institution that contains a bank will own, invest in or sponsor a hedge fund or a private equity fund, or proprietary trading operations unrelated to serving customers for its own profit.

2. Limit the Size - The President also announced a new proposal to limit the consolidation of our financial sector. The President’s proposal will place broader limits on the excessive growth of the market share of liabilities at the largest financial firms, to supplement existing caps on the market share of deposits.

The number 2 item is interesting. I'd love to see the detailed proposal. How is he going to limit the size of liabilities, other than levying a 0.15% tax which he already proposed this month? When does a growth become "excessive"? Who's to decide? Paul Volcker?

If Obama really wants to "put an end to the risky practices that contributed significantly to the financial crisis", he should first fire Ben Bernanke and Timmy Geithner, shut down Fannie and Freddie, stop making subprime loans via FHA, and reign in his runaway spending.

Cynics are saying that Obama wouldn't do anything that would anger one of his biggest sponsors (financial industry, particularly Wall Street banks), and this proposal was already agreed to by Wall Street.

I am not so sure. If Obama had gone to Larry Summers or Timmy Geithner and come with the proposal, that's one thing. But he went to Paul Volcker, whom he hadn't bothered to consult much till this issue. Volcker may genuinely believe that banks should go back to the ways he knew when he was the Fed chairman (1979 to 1987), before all the innovations (like algo trading) and proliferation of hedge funds took place (more later).

Currently, Dow Jones Industrial is down more than 220 points (over 2%) to 10,384 at 2:24 PM EST. Many of the same cynics are saying this is just Wall Street's way of scaring investors and scaring the government so that this proposal won't be enacted, just like Wall Street supposedly did (as they say) in September 2008. Back then, the banks deliberately tanked the market during the TARP discussion in Congress so that Congress would be scared into passing the bailout bill.

One thing these cynics seem to ignore: the market tanked in earnest AFTER the bailout bill was passed.

Scott Brown Won Because GOP Stayed Out

This cartoon on Boston Globe cannot be more inaccurate.

One, GOP didn't do much at all to have Scott Brown elected. And two, it is a wish by many liberals and progressives to portray the so-called "tea party" as controlled by the extreme right wing of GOP. It's amusing how they spit the word "teabaggers", usually with a snear, at anyone who opposes their dear leader, but it is just their wish nonetheless.

(And remember, the Red Coats and loyalists threw the word "Yankee Doodle" at the rag-tag army who dared defy their dear leader, the British Crown.)

11.4% of the registered voters in Massachusetts are Republicans and 37% Democrats. The majority, 51% believe or not, of registered voters are not affiliated with either party - in other words, independents. (Read this pre-election Boston Globe article.) Scott Brown won by winning them.

Republican National Committee didn't even bother campaigning for the guy because until about a week ago he was no doubt considered by the Committee to be a lost cause. A Republican taking the seat that was occupied by Ted Kennedy for over 4 decades? Not a chance.

Scott Brown won because GOP stayed out of the race. Let that be a lesson for the GOP leadership. He ran, as far as I gather, on a libertarian platform: smaller government and fiscal responsibility. GOP didn't bother to spend money on him until the last week, when the turn of the tide became noticeable even for the party leadership.Then it scrambled to claim Brown as their champion. That was funny to watch.

Many of Ron Paul supporters seem to be dismayed, with one supporter saying "Scott Brown is a pro-Torture, pro-War, pro-PoliceState, pro-ForeignOccupation, pro-DroneAttack, pro-CIA Neocon shill and hack."

That may be, I do not know, frankly. Those discriptions equally apply to the defeated Democratic candidate, as she embraces Obama's policies.

But that's not really the point. The point is that Brown has proven that someone can be elected to office without the traditional party apparatus. Brown was supported by the grass-roots "tea party" people. As Christian Science Monitor called it, it was "the tea party's first electoral victory", a party that is not even a party, really. That should scare Nancy Pelosi and Harry Reid.

Wednesday, January 20, 2010

Now Obama Wants to Limit Bank Proprietary Trading

Taxing the liabilities on the bank balance sheet is not enough for him. He wants a bigger show-down with the nation's bankers to show to the American people how he is fighting with evil, greedy bankers everyday so that our financial well-being is "secure". (Just like our physical well-being has been "secure" because of Patriot Act, I suppose.)

Obama to put limits on bank trading (1/21/2010 Financial Times)

"President Barack Obama is set to toughen his approach to Wall Street regulation on Thursday, announcing limits on the size of proprietary trading operations in the second broadside against banks this month.

"Mr Obama will make his remarks after a meeting with Paul Volcker, the White House advisor and former Federal Reserve chairman, whose more far-reaching vision of curbing banks’ riskier activities has been sidelined until now in favour of reforms drafted in the Treasury

"“A couple of months ago the president began discussing with his economic team the need to include in financial reform more specific and stronger provisions to limit the size and scope of financial institutions to cut down on excessive risk taking,” said an administration official on Wednesday.

"“The proposal will include size and complexity limits specifically on proprietary trading and the White House will work closely with [the House of Representatives] and Senate to work this into legislation moving on the Hill.”" (The article continues.)


Major U.S. banks, particularly Wall Street banks like Goldman Sachs (who is announcing the earnings on Thursday premarket, by the way) and J.P. Morgan Chase have large proprietary trading operation where they risk their own money (as opposed to customers' money) and trade in various financial markets - stocks, bonds, options, commodities, futures and other derivatives.

Does Obama want to become a trader, on top of being a car salesman, residential mortgage broker, and insurance agent? Good luck with that. How about being the President of the United States, whose responsibilities are clearly stated in the old document that he swore to uphold (in a mangled oath, if I remember from a year ago).

(If you dare limit the size and complexity of proprietary trading by Goldman Sachs or J.P. Morgan by some kind of bureaucratic, arbitrary decree, I have a feeling that that's when the stock market will lose much of its liquidity and .... splat! In this ugly social mood, I wouldn't dare do that, Mr. President, as the stock market going higher in the last 10 months is one of the few good things that have happened in recent memory of many average Americans who have 401K and IRA. For many, that may be the only good thing.)

Obama Supporter Buffett Is Against Obama Bank Tax

Warren Buffett agrees with me. (But he is invested in Goldman Sachs and Wells Fargo, so he is not impartial, I guess.)

Buffett Says He Can't See Rationale for Bank Levy (1/20/2010 Bloomberg)

"Jan. 20 (Bloomberg) -- Warren Buffett opposes President Barack Obama’s proposed levy on financial institutions because firms including Goldman Sachs Group Inc. and Wells Fargo & Co. already repaid bailout funds.

"“I don’t see any reason why they should be paying a special tax,” said Buffett, the chairman and chief executive officer of Berkshire Hathaway Inc., in an interview on Bloomberg Television today. Supporters of the plan to tax the banks “are trying to punish people,” he said. “I don’t see the rationale for it.”

"“Look at the damage Fannie and Freddie caused, and they were run by the Congress,” said Buffett. “Should they have a special tax on congressmen because they let this thing happen to Freddie and Fannie? I don’t think so.”"

I am all for the idea of creating a special tax on Congress for their incompetency and injury they inflict on Americans, intended or unintended.

Buffett also asserts that the rescue was unnecessary for most of the banks that received the TARP money, even though he was on record saying he decided to invest in Goldman Sachs because he expected the government to help financial firms.

If the banks didn't need TARP money, why didn't they say no when they met with then-Treasury Secretary Hank Paulson on October 13, 2008, you might ask? For one, they were closeted in a room at the Treasury Department and were told they couldn't leave the room without first signing a one-page document that stated the amount of "help". It was not like Paulson was holding a gun against their head (although we don't know for certain), but I wish someone (like Wells Fargo CEO) had called the bluff and stayed in that room. I am curious to know what would have happened.

If Obama wants to punish a bank whose bloated ($2 trillion) balance sheet is loaded with assets with dubious quality (agency bonds, mortgage backed securities, even a piece of real estate), who continues to provide loans to bankrupt or near-bankrupt companies (AIG) and who uses those assets to back the liability (US dollar) that many, many people around the world count on as their assets, he doesn't need to go no further than at the door of the Federal Reserve.

Tuesday, January 19, 2010

Boston Tea Party

says Drudge headline.

Martha Coakley conceded the election to Scott Brown.

Scott Brown: 52%
Martha Coakley: 47%

with 79% of precincts open.

Intrade Update on Massachusetts Election

Brown increasing the lead....

(By the way, there will be no exit polls for this election.)

Massachusetts Senate Race: Voting Has Begun

And finger-pointing has already started among Democrats over this special election for the Senate seat. Some pollsters are even expecting a double-digit loss, while the Democratic supporters are hoping their candidate will somehow pull through.

Finger-pointing begins for Democratic insiders (1/19/2010 Politico)

"CAMBRIDGE, Mass. — As voters head to the polls in Massachusetts, nervous Democrats have already begun to blame one another for putting at risk the Senate seat Ted Kennedy held for more than 40 years.

"Many angry Democrats blame their candidate, state Attorney General Martha Coakley, for running a sluggish campaign that let Republican Scott Brown set the contours of the race.
Some Democratic strategists lay the fault at the feet of President Barack Obama, saying he should have done more to sell the party’s agenda. [I'm not so sure it would have helped. It may have further backfired.]

"And in private conversations, Hill sources say White House chief of staff Rahm Emanuel has blamed Coakley, the Democratic Senatorial Campaign Committee and Democratic pollster Celinda Lake for failing to see Brown’s surge in time to stop it." (The article continues.)

Should Democrats lose Massachusetts in today's election, it will have been because of independent voters, just like the governor races in Virginia and New Jersey:

"“We lost independents in Virginia, we lost independents in New Jersey and we’re losing independents in Massachusetts,” said one Democratic campaign strategist. “The only thing those three states have in common is Obama.”"

Boston's Democratic machine, just as entrenched as that of Chicago, could still produce miracles. We'll see. It seems the entire country is watching, including traders on the stock exchanges...

Battle of Tech Titans: Apple, Google, Amazon

Two weeks ago Google (ticker symbol: GOOG) introduced its high-end smart phone Nexus One, in competition with Apple Inc.'s iPhone.

Now, Apple Inc. (AAPL) is getting ready to introduce its long-rumoured color tablet device, in direct competition with (AMZN)'s Kindle.

Apple, HarperCollins seen in tablet talks
(1/19/2010 San Jose Business Journal)

"Apple Inc. could be getting ready to give and its Kindle significant new competition with the introduction of color and multi-media features for e-books.

"The Cupertino company is in talks with giant publisher HarperCollins Publishers Inc. about bringing such features to its titles on the tablet computing device that is expected to be introduced next week, the Wall Street Journal reported.

"Apple (NASDAQ:AAPL) has yet to officially confirm that a tablet exists but invited the press to an event in San Francisco next week to "Come see our latest creation."" (The article continues.)

What is the big deal about companies offering competing products, you ask? That's the way it is for almost all industries. But I don't think that happened before among Nasdaq high-beta tech companies with high PE ratio like Apple, Google, and Amazon.

In the past, they tended to stay out of each other's turf, so to speak.

Google's phone has so far received a mixed review from the users, who complain about poor service and poor connectivity. But so did Apple's iPhone when it was first introduced, along with some incredulous scream from analysts "A cell phone? What is Steve Jobs thinking?? Apple had better stick to its core business (i.e. making computers)."

When Amazon's Jeff Bezos first introduced Kindle, he was roundly ridiculed. "E-book? We know how the previous attempts turned out." In the last quarter, Amazon announced that it sold more books for Kindle than the physical books.

Now Google wants to take a bite out of Apple, and Apple out of Amazon.

(Where are the erstwhile gadget makers of the world, the Japanese? Sony? Casio?)

Judging solely by how the shares of these companies are behaving today, the perceived winner so far seems to be Apple, up $6.54 to $212 (10:50 AM EST). Google is up $1.66 to $581.66, Amazon down $1.24 to $125.88.

Monday, January 18, 2010

Not Thrilled With Banks, But Against Obama's Bank Tax

I am.

President Obama, in his effort to appear as if he sides with the populace and to capitalize on the popular anger and resentment toward Wall Street bankers, has proposed a 0.15% tax on the liabilities of the nation's big banks (about 50 of them) to help fill his budget shortfall. He declared, "We want our money back."

Now that's my first problem right there. Who are "we"? That seems to be "we" in the government. Whose money is it? The money is our, i.e. taxpayers' money which the government, both under George Bush and under Obama, has squandered on companies like AIG, GM, Chrysler, Fannie and Freddie against a significant opposition from the U.S. taxpayers (who, alas, don't count in politics).

Obama wants to use this selective taxation as a form of punishment for supposedly causing the financial crisis and getting large bonuses and as a deterrent for future risky behavior. Since bankers, particularly Wall Street bankers, are the people everyone seems to love to hate, he can't lose for singling them out, can he?

The proposed tax, which requires Congressional approval, would be applied to financial institutions whose liabilities exceed $50 billion. Not only the banks who already repaid TARP would be taxed, but those firms who never received a penny from the government would be taxed. $50 billion balance sheet is puny these days: big Wall Street banks have their balance sheet in $1 to 2 trillion, and many well-run regional banks in tens of billions.

Why should Obama confine "financial institutions" to banks and insurance companies anyway? Remember in September 2008 when SEC first banned the shorting of "financial institutions"? It was just banks at first, but the banned short list quickly grew to include any company that had a lending arm. Auto companies got included, so were some of the high tech companies like IBM. Many manufacturing companies issued bonds guaranteed by FDIC, including GE and Deer, exposing the taxpayers to potential loss. What about them?

Speaking of tech companies, many cash-rich techs actively manage (or at least they used to) their cash/cash equivalent in various financial instruments - derivatives, swaps, futures, options. What about them? Motorola, for instance, used to have their net profit solely derived from financial income.

Speaking of risky behavior, what about huge hedge funds and private equity firms? Like those select hedge funds who were let in on the shorting opportunities by the Vampire Squid (aka Goldman Sachs)? Or endowments at nation's top universities which bet on derivatives only to spectacularly lose, contributing to the financial chaos in 2008?

What about people who took out home loans or borrowed on their credit cards? Would Obama tax the liabilities of these borrowers for their risky behavior of taking on a large debt?

Lastly, who defines what's "risky"? And why should it be punished? If he believes what the financial institutions did was criminal in nature and therefore should be punished, why doesn't Obama instruct his Attorney General to indict the banks and prosecute them?

The arbitrary and punitive nature of this proposed tax is what irks me. It shows this administration may be quite willing to devise any scheme to arbitrarily target any industry, company, or individual. Why single out only the banks and insurance companies? There are whole bunch of other entities with equally risky behavior, and they are not confined to the private sector either. Actually, the public sector has even riskier players. Here's two that come to my mind immediately:

The Federal Reserve: for having pursued the low interest policy that created the speculative frenzy in various asset classes; recklessly expanding the balance sheet over $2 trillion with toxic junks that no one wants as it assists the federal government's fiscal policies; and

State and local governments: for having created their budgets year after year on the assumption that the housing prices will go up forever; for having invested millions of taxpayers money in highly sophisticated and risky financial derivatives without even knowing what they are.

However, the riskiest and most reckless of all is Obama's own government that is taking on an unmanageably large debt that cannot possibly be paid back.

Now how should we punish this risky behavior?

Massachusetts Senate Race, A Landslide?

If you look at the numbers at Intrade, it sure feels like it...

However the administration and the Democratic leaders want to spin it or downplay it, this special election is being perceived by many to be the referendum on the 1-year old administration's policies, particularly the health care so-called "reform".

Should Mr. Brown win, you can expect the vote counting process to be so slow, and certification process protracted, while the Senate frantically try to pass the health care bill, whether by 60 (interim Senator from Massachusetts is Democrat, of course) or by mere 51 using reconciliation.

What should worry for people predicting or hoping for Brown's win may be Jim Cramer, whom many retail traders and investors consider to be a counter-indicator. Mr. Cramer is hoping for a massive stock market rally resulting from Mr. Brown's win. (But then, the proverbial broken clock is right twice a day.)

Sunday, January 17, 2010

More on 'Googlegate' and 'Climategate'

I knew something didn't smell right with the article by Lawrence Solomon (my yesterday's post).

Here's a better searched article on the issue by Danny Sullivan in December 2009, which I got from a LRC Blog post by Walter Block:

Of Climategate, Googlegate & When Stories Got Too Long
(12/1/2009, Search Engine Land)

Reading the article, I know now that:

1. It all started with U.K. Telegraph's James Delingpole when he found out that his colleague's article on 'climategate' disappeared from Google. Lawrence Solomon's article didn't even mention any of that.

2. If you search with +climategate to eliminate possible synonyms and alternative spellings, the result is different (see below for more).

3. The particular article by Delingpole's colleague got too long (1.3MB in HTML in December - that's huge for HTML) because of the rapidly expanding comment section that it was automatically dropped from Google News.

4. U.K. Telegraph had attacked Google in the past for showing its stories.

5. If you type the article title in Google regular search, it does show up.

6. As to 'climategate' not suggested with Google Suggest, it may be that, if not enough people are searching the term on that particular day or hour, Google Suggest doesn't suggest 'climategate' when you type in 'cli' or 'clima' or whatever. (Or it may be more personal; if you don't search that term often enough, Google Search won't suggest. More later.)

Now, let us try the qualified search +climategate (the entire word) on Google and Microsoft's Bing, and Yahoo and compare the results:

Google: 9,270,000
Bing: 286,000
Yahoo: 21,900,000

Or using the exact phrase search "climategate":

Google: 9,270,000
Bing: 57,400,000
Yahoo: 6,520,000

The winner, if just look at the search result numbers, is actually Google. Exact phrase or the entire word as is, in this case, shouldn't make any difference.

The articles that come to the top today:

Google: (top) Climatic Research Unit hacking incident - wikipedia; (2nd) Climategate: the final nail in the coffin.. - Telegraph U.K.
Bing: (top) Climategate Document Database; (2nd) Climategate: the final nail in the coffin... - Telegraph U.K.
Yahoo: (top) Climategate| Anthropogenic Global Warming, history's .... (2nd) Climatic Research Unit hacking incident - wikipedia

As to Bing's high number (57 million) when you search with "climategate", my guess is that the search engine picks up any article, any site out there that contains "climate" and/or "gate", whereas Google may pick up only "climategate" the scandal. Who knows. I don't. As I said in my previous post, I don't use Bing for my daily search.

Top 3 search suggestions that come up when I type "cli" today:

Google: clip art, cliff note, climategate
Bing:, clip art, clint eastwood (now that's funny)
Yahoo: clip art, kim clijsters, clinique

Top 3 search suggeestions that come up when I type "clim" today:

Google: climategate, climate change, climate
Bing: climbing gyms, climategate, climate change
Yahoo: clima, climate change, climb

So much for Solomon's article that I posted yesterday, which now looks to me like a rather uninformed smear piece on Google. His conclusion, "The bottom line? Google is as inscrutable as the Chinese, and perhaps no less corrupt. For safe searches, you’re best off with Bing", is simply absurd. There is no bottom line here, but his own flimsy conclusion from cursory observation or from emails from his readers. I am happy to know Mr. Solomon finds Bing excellent for his search, but no thank you, not for me.

How he can say Microsoft's Bing is safe, I have no idea. If the search engine is safe because it returns all the results that contains 'climate' or 'gate or both when you look up 'climategate', I have to infer that "safe" means "useless".

And shame on me for not researching further first.