This is an ad. I have never seen a more powerful video ad. It merely promotes a web site. How it promotes it!This
video drives home a point: we have entered a new era. We have just
barely entered it. Our world will not be the same for much longer.This
is what a home-brew video can do. After seeing it, you may have doubts
about the financial media. They never explained things this way.If you know someone who could benefit from this, email this page. I am opening this to the public. It is that important.

The Telegraph's lead economic writer, Ambrose Evans-Pritchard, has an interesting article arguing that we are in 1931-like conditions:

• A big crash has already happened

• Things are very gloomy

• But we haven't been hit by the biggest crash, the "second leg down" which didn't end for a couple of years
  

What's he talking about?

Well, look at this chart:






(click here to see full image).

As you can see, the 1929 crash was actually very small compared to the "second leg down" crash which didn't end up 1932 or 1933.

According to Elliot Wave and other chartists, a second - bigger - crash is on its way, just like Evans-Pritchard is warning.

..I'm
not talking about openssl, PHP, or even the Linux kernel but all the
above plus every other program or bit of code on a Linux system. It's
vulnerable. It's hackable. It can be changed at will by anyone because
the source is open and freely available (the definition of open
source).

In 1930, there were 123 million Americans.
At the height of the Depression in 1933, 24.9% of the total work force or 11,385,000 people, were unemployed.

Will unemployment reach 25% during this current crisis?

I don't know. But the number of people unemployed will be higher than during the Depression.

Specifically, there are currently some 300 million Americans, 154.4 million of whom are in the work force.

Unemployment is expected to exceed 10% by many economists, and Obama "has warned that the unemployment rate will explode to at least 10% in 2009".

10 percent of 154 million is 15 million people out of work - more than during the Great Depression.

Got Linux??

There hasn’t been a viral outbreak of this scale for quite some time, Conficker or Downadup as it’s known was only fairly recently discovered (Oct 2008) and has already infected an estimated 9 million machines!

It’s spreading fast though and it auto-updates itself via downloads from random domains making it almost impossible to stop as whatever countermeasures come out, it can just download itself the latest version and bypass them.

It also has multiple infection vectors including travelling via USB drives.

...... .. ..

Infections of a worm that spreads through low security networks, memory sticks, and PCs without the latest security updates is “skyrocketing”.

The malicious program, known as Conficker, Downadup, or Kido was first discovered in October 2008. Anti-virus firm F-Secure estimates there are now 8.9m machines infected. Experts warn this figure could be far higher and say users should have up-to-date anti-virus software and install Microsoft’s MS08-067 patch. In its security blog, F-Secure said that the number of infections based on its calculations was “skyrocketing” and that the situation was “getting worse”.

Speaking to the BBC, Graham Cluley, senior technology consultant with anti-virus firm Sophos, said the outbreak was of a scale they had not seen for some time.

The virus targets the services.exe process (Server service) by exploiting the vulnerability associated with the MS08-067 patch.

This was a serious remote execution flaw carried out by making a malformed RPC request, apparently it was reported ‘privately’. But now it seems that perhaps the details of the exploit weren’t that private after all.

...... .. ..

According to Microsoft, the worm works by searching for a Windows executable file called “services.exe” and then becomes part of that code.

It then copies itself into the Windows system folder as a random file of a type known as a “dll”. It gives itself a 5-8 character name, such as piftoc.dll, and then modifies the Registry, which lists key Windows settings, to run the infected dll file as a service.

Once the worm is up and running, it creates an HTTP server, resets a machine’s System Restore point (making it far harder to recover the infected system) and then downloads files from the hacker’s web site. Most malware uses one of a handful of sites to download files from, making them fairly easy to locate, target, and shut down. But Conficker does things differently.

It quite advanced even taking system restore out of the picture and downloading new files to update itself and to infect the machine further. It’s sneaky as it downloads from a bunch of seemingly randomly generated URLs making it very difficult to track and stop.

Many machines are infected in China, Brazil, Russia, and India - personally I think this is because piracy is rife in these areas and Microsoft doesn’t allow pirated copies of Windows to use Windows Update (especially with the WGA tool or Windows Genuine Advantage).

Mark Shuttleworth is looking forward to a good, clean netbook fight with Microsoft following the release of Windows 7.

Written by Nancy Atkinson

Using data from the Very Large Telescope's powerful near-infrared eyes, astronomers have created a movie that takes you across 13 million light-years to galaxy NGC 253, an active galaxy filled with young, massive and dusty stellar nurseries. "We now think that these are probably very active nurseries that contain many stars bursting from their dusty cocoons," says Jose Antonio Acosta-Pulido, a member of the team from Instituto de Astrofísica de Canarias in Spain. NGC 253 is known as a starburst galaxy, after its very intense star formation activity. Each bright region could contain as many as one hundred thousand young, massive stars. And in the center of this galaxy appears a strikingly familiar sight: a virtual twin of our own Milky Way's supermassive black hole.

Watch the movie. (For different viewing options, click here).

The astronomers used NACO, a sharp-eyed adaptive optics instrument on the VLT to study the fine detail in NGC 253, one of the brightest and dustiest spiral galaxies in the sky. Adaptive Optics (AO) corrects for the blurring effect introduced by the Earth's atmosphere. This turbulence causes the stars to twinkle in a way that delights poets, but frustrates astronomers, since it smears out the images. With AO in action the telescope can produce images that are as sharp as is theoretically possible, as if the telescope were in space.

NACO revealed features in the galaxy that were only 11 light-years across. "Our observations provide us with so much spatially resolved detail that we can, for the first time, compare them with the finest radio maps for this galaxy — maps that have existed for more than a decade," says Juan Antonio Fernández-Ontiveros, the lead author of the paper reporting the results.

Astronomers identified 37 distinct bright regions packed into a tiny region at the core of the galaxy, comprising just one percent of the galaxy's total size. This is three times more than seen previously. The astronomers combined their NACO images with data from the infrared instrument on VLT, the VISIR, as well as with images from the NASA/ESA Hubble Space Telescope and radio observations made by the Very Large Array and the Very Large Baseline Interferometer. Combining these observations, taken in different wavelength regimes, provided a clue to the nature of these regions.

In looking at all the data together, astronomers concluded that the center of NGC 253 hosts a scaled-up version of Sagittarius A*, the bright radio source that lies at the core of the Milky Way and which we know harbors a massive black hole. "We have thus discovered what could be a twin of our Galaxy's Centre," says co-author Almudena Prieto.

Source: ESO

Obamanomics, the economic program of the Obama administration, will fail to help the U.S. economy. Instead it will undermine the economy. It will fail to help the American people as a whole, although it will benefit some. It will succeed in augmenting the government.

The depression is causing and threatening to cause many failures of banks, companies, whole states like California, localities, pension funds, federal home loan banks, and so on. Unemployment is rising. The Obama administration, following the Bush administration and the roadmap laid down by the New Deal and the Employment Act of 1946, will try to stop these failures and the unemployment using government action. This will fail. The system is too large for the government to bail out without destroying any semblance of free markets. Even if the system were not so large, government action would still fail, as will be explained in some detail.

The largest banks in the banking system have failed or will soon fail. They are insolvent and the system as a whole is insolvent. It is a virtue of the American system that both the Fed and the government are trying to act like responsible lenders and not simply nationalizing the banks and failing companies outright. Although these loans have stiff terms, they are haphazard and far inferior to outright bankruptcy. These loans should never have been made. The government cannot maintain its purported stance of neutral financier under the influence of politics and expediency. More importantly, when government introduces itself into the capital markets as it has done, it changes them in irreversible ways. There will be no going back to what was. The capital markets have been greatly harmed already.

The only practicable remedy within the existing system is bankruptcy and re-organization. All the bailout programs are circumventing this remedy. They have made hash out of the bankruptcy laws. That is underscored when the Big 3 automakers seek aid from Washington. There are many other companies, states, investment funds, and localities also lining up.

The bankruptcy procedures balance the interests of various parties to contracts under court supervision. There are long-established priorities, plans, and valuation procedures that at least form a stable framework within which to proceed. All of this has been discarded in the last twelve months. The political enactments under the Bush administration, endorsed and to be expanded under the Obama administration, ignore and replace these procedures with political measures. This marks a major turn of events. The nation abandons an established and workable accounting-finance-legal framework. It replaces it in an ad hoc way with a misguided economics framework and with a thin patina of legality that actually is a large expansion of unconstitutional power. If kept in place, this replacement has extremely long-term serious effects on American capital markets.

There are a limited number of paths by which large aggregations of capital can be transferred to borrowers. One is via the banking system. The other is through the capital markets. The capital markets supply most capital to business borrowers. They would probably provide even more capital if banks were not being subsidized by central bank reserve creation.

The bailouts have the effect of undermining capital markets. Lenders in capital markets understand and rely on bankruptcy procedures in pricing and issuing credit to borrowers. Lenders can impel or not impel bankruptcy by how they treat the violation of lending provisions, as sometimes re-negotiation is in order or other measures short of demanding payments. The government bailouts upset the priorities of the various classes of capital-suppliers to corporations. They introduce a new and uncertain element. The option of bankruptcy no longer is clear. The outcomes are no longer as clear: the bailouts arbitrarily discriminate among suppliers of capital. This interferes with contracting in capital markets, but free contracting is the heart of capital markets. The use of government power to settle matters in markets always harms those markets. Capital markets are no exception. If anything, the processes of financing are even more sensitive to government interference than are product markets. Suppliers of capital are less likely to supply capital when the contractual terms of doing so are open to continual government interference.

The Obama administration plans to continue the government attempts to create full employment by government programs. This too will fail in its purpose. Like the bailouts, it too will fail. It too will make matters worse. After providing the background for government policies on employment, I will explain in detail why they will fail.

Government programs augment government. That is their purpose. Officials always provide plausible rationales for programs. Nevertheless, in general, officials do not approve programs unless they augment the government.

Programs in general transfer control of resources from private hands to government hands. That is what makes them fail.

On occasion, government decides to undo some program. The U.S. government undid some energy regulation in the 1980s. However, the Department of Energy remained. The power over energy decisions has since ramped up. Over time, the government merely replaced one set of energy regulations with another. The control over energy is increasing.

For quite a long time, the government has made economic programs its business. This became especially evident during the New Deal in the 1930s. After World War II, the federal government codified its control over the economy in the Employment Act of 1946. See here for some code. Congress added to this measure with the Full Employment and Balanced Growth Act of 1978.

Reaganomics, Clintonomics, and Obamanomics only vary in detail. They all are birds of a feather. They all exercise government control over the U.S. economy. The same goes for all the other presidents whose names may not have been linked to the suffix -omics. Every administration since 1946 has had and exercised power based on the Employment Act of 1946.

In general, all of this government activity has failed the American people as a body. That is because the Employment Act of 1946 and its 1978 follow-up stem from faulty economic ideas. Any economic progress that has occurred since 1946 has happened because the private economy caused it to happen, not the government. The progress in the private economy has happened in spite of what the government did. The government dragged the economy down.

Whenever the government failure becomes prominent, the government blames the private economy for having failed. It always blames someone else, never its own policies. It blames industry. It blames businessmen. It blames greed. It blames speculation. It blames the consumer. It blames foreigners. It blames Nature. It never blames itself.

Almost every part of these national economic laws fails in implementation or else is deeply flawed in theory. Different sections of the code fail in different ways. Some sections provide goals. These goals usually should not be government goals in the first place. Given that they are goals, however, the government has failed to achieve them and achieved the very opposite. For example, Section (h) declares one purpose to be a balanced Federal budget, but the deficit has grown to great heights. Section (f) calls for the maximization of private employment, but the government share of economic activity has shown a strong upward trend. Section (g) says that trade deficits are a major national problem, but the trade deficits have grown and today are huge. Section (c) says that inflation is a major national problem, but the dollar is worth only a fraction of what it was in 1946. Several sections call for full employment, but the U.S. has periodically experienced unemployment. Section (a) calls for growth in real income, but real income growth has slowed compared with other eras in American history. Section (a) also calls for enhanced self-employment opportunities, but the tax laws impede this objective. Section (j) calls for the private sector to generate growth and for government fiscal policies that make federal government a low fraction of total product. The private sector has generated growth, but the share of federal government has grown.

Section (i) recognizes the "investment needs of private enterprise." Investment needs is a term that means the accumulation of capital in the private sector. Austrian economics, alone among various strains of economic theory, treats capital with the subtlety that it deserves. One central failure of laws like the employment acts, both in theory and when they are put into practice, is the over-simplified treatment of capital. Government economists who advise politicians treat capital as something homogeneous, when it is not. They think that capital will be accumulated by business if government provides make-work for people or prints money to provide make-work. This is not so. Business only invests in capital when it foresees demand for the goods that this capital will help produce. A business has to foresee a return on capital commensurate with the risk of investment. When these returns can be foreseen, business creates employment. The employment is sustainable when the demand for the products materializes as expected. The businesses that survive in a free market do so because the returns cover their costs, which include the labor costs and the costs of capital.

The government creates make-work jobs. Unlike business, the jobs are not based on returns that pay for their costs. There is no such thing as jump-starting an economy by make-work jobs. Obama and his economists are making the same false analogy that Bush and his economists made. The economy is not a motor with a low battery. It is a fact that make-work jobs stimulate investment in the activities related to the make-work, but since the basic activity does not pay for itself, neither do the related activities. They are basically subsidized. All these jobs are low-paying jobs in that they do not create product that can be sold for more than the costs. All these jobs are financed by absorbing resources from other sectors of the economy. That happens because the government has no resources of its own. It can only draw from Peter to pay Paul. Capital accumulation in these other and more productive sectors then declines.

Everyone can be employed in jobs. We can all build pyramids. If the government builds pyramids, there is full employment but real income falls, growth of real income falls, and the general welfare falls. The pyramid building stimulates the brick-making and clay industries and it employs labor at the related chores, but the society uses up its productive capital stock to feed, clothe, and house us. When the government builds pyramids, it transfers capital from productive and potentially productive uses to unproductive uses. The product being produced, the pyramids, is not really in demand, and that is why it is unproductive. The return on the capital, the payback in the form of income, is insufficient to pay back the costs of capital that are being incurred. Hence, the pyramid building destroys wealth. The government may think it is creating wealth because it sees or measures employment and product, but these measures are illusory measures of overall wealth and value creation. There are many pyramids to see, but fewer loaves of bread to eat.

The banking system and the economy continue to deteriorate. A series of bankruptcies is the only solution within the current system. The depression and these bankruptcies are the remedy for the previous collection of economic mis-calculations and mal-investments of capital made during the boom. Supervening them by bailouts and providing make-work only retard the adjustment process. They make it worse by destroying capital and labor markets. They make it worse by preventing a stabilization of expectations among those who have private capital to deploy. It is that capital that creates employment on sustainable terms. The greater the uncertainty concerning future demands and costs, the higher the capital costs and the less likely that capital is to be deployed and put to productive use. When government deploys capital that it borrows, taxes, or prints up, it chills the private sector.

Obama and his economists are facing a worse situation than existed three months ago. The government actions up to now have made matters worse. The Obama $825 billion spending program will not turn the economy around. It is a Christmas tree going to various interest groups: $142 billion to state education, $111 billion to health care, $102 billion to relief, $90 billion to infrastructure, and $58 billion to energy subsidies. A lot of this is pyramid-building or pyramid-maintenance. $275 billion is payroll tax cuts is also slated. What should be done is to cut government spending by a trillion dollars and simultaneously lower tax rates on capital. Ending the estate tax, cutting marginal rates, and cutting tax rates on dividends and capital gains will all stimulate smaller businesses to form and add employment. They are a major source of new employment in the economy. Ending subsidies to various industries, cutting tariffs, and ending various quotas will also benefit the economy. These should all be done while at the same time cutting the budget.

I predict that none of this will happen. Obama is an economic illiterate. He would maintain high capital gains taxes even if by reducing them, they would bring more revenue to the government. It doesn’t get much more irrational than maintaining a tax at a high level out of a concern for fairness when the overall pie will go up by reducing that tax. Obama and his team will be back asking Congress for another trillion quite soon and probably another trillion after that. They will not know what to do when more big banks fail and when many regional banks start to fail. I predict that they will do as was done with the S & Ls in the 1980s. There will be a policy of "forbearance" when regulatory guidelines are violated. They will not want to have to appropriate money for the FDIC. If they form a Resolution Trust kind of entity to receive and sell off bad bank loans, this again subverts the bankruptcy option. It socks the taxpayers with the losses.

There is an outside chance that Obama will show some flexibility as matters do not improve. He may replace his current advisers with new ones. By some miracle, someone might be appointed who can influence him toward more enlightened policies. This did not happen under FDR. It did not happen in Japan’s recent episode of boom and extended bust. Another possibility is increasing militarism. This occurred in the late 1920s in Japan after a long period of stagnation, in Germany in the 1930s, and in the U.S. for an extended period after the 1930s. Bush’s war on Iraq came after the recession and slow recovery of 2000–2003.

The overall result of continuing along the lines laid down by Bush and the prior Congress will likely be stagnation of the American economy and a longer-lasting depression of business activity and economic growth. It could last 4–7 years or longer. The attempts to revive the economy will produce inflation during the depression.

January 21, 2009

Michael S. Rozeff is a retired Professor of Finance living in East Amherst, New York.

President Barack Obama and his economic team will soon attempt to convince Congress that spending upwards of $1 trillion tax dollars (more or less) will shorten the recession. A good part of the spending will be on public works and infrastructure projects that aim to create (or save) many millions of jobs. Some of the spending will be in the form of grants to state governments to prevent cutbacks in education and medical services. And a smaller (and laudable) part of the program provides tax relief to some individuals and corporations.

Although some economists supported the bank and auto bailouts and although many more support a major federal stimulus package, this economist holds that both measures are counter-productive. Both are likely to prolong the economic slump and not shorten it.

This may seem harsh but the ultimate cure for a recession is recession. Economic booms "malinvest" labor and capital and recessions are necessary to "clean out" these malinvestments. Declining prices allow consumers to more easily purchase products (homes, autos) in excess supply; inventories are reduced and supply and demand are brought into balance. And declining profits weed out business organizations and their managers that have invested poorly during the boom; bankruptcy allows resources to flow to more profitable areas of the economy. A sustainable recovery is now possible.

It should be obvious that random bailouts can short-circuit the recovery process by propping up poorly performing companies and slowing resource reallocation. With tens of billions in lost profits, General Motors and Chrysler have demonstrated vast inefficiency; yet taxpayer bailouts will preserve their poor management and high-cost union jobs. Worse, other more efficient automobile suppliers will lose sales to these Detroit’s dinosaurs and may, themselves, require subsidies. It just never ends.

The case for bailing out spendthrift state governments or for additional infrastructure spending is equally flawed. Supporters constantly argue that "since consumers won’t spend, governments must spend (to create more jobs)." And since it’s claimed that there are vast unmet public sector needs, what better time to undertake major road construction or help state governments fund programs such as Medicaid.

Some public policies are wrong in both theory and practice; infrastructure spending and bailing out state governments to shorten recessions are examples. In theory, the money to fund the stimulus will have to come from either massive federal borrowing, substantial tax hikes, or pure money inflation by the Federal Reserve. But none of this can remotely promote recovery in the private sector of the economy. All it will do is substitute some private/public sector jobs in one part of the economy for other private/public sector jobs in another part of the economy.

Public spending on major infrastructure projects to fight recession is especially problematic. (Think "Big Dig" in Boston.) Which programs will be undertaken? In which congressional districts? And where will the labor resources come from? Supporters of public works automatically assume that the current increase in unemployment provides a vast army of workers to fill new jobs. Not so fast.

Unemployed workers with vastly different skill levels are scattered unevenly throughout the economy. It is simply unimaginable that even a tiny percentage of them would have the proper skill requirements or would relocate to the politically determined infrastructure projects. In addition, these projects require extremely long lead times (sometimes many years of permits and planning) and are unlikely to begin soon enough to have any near-term effect.

The experience in the 1930’s is instructive. Even though federal government spending increased from $9.8 billion in 1934 to $14.2 billion in 1940, the unemployment rate in 1940 was still a staggering 14.6%. A 45% increase in New Deal spending in 6 years did not end the Depression.

Contrary to economist Paul Krugman and others, the federal government cannot spend us out of our economic quagmire. The best that the government can do is not make things worse. We don’t need more corporate or state bailouts and we don’t need vast public works programs costing many hundreds of billions. We do need more prudent private and public spending, lower taxes on income and investment, and a responsible monetary policy from the Federal Reserve. And we still need lower prices and bankruptcies to finally correct the mistakes of the boom.

January 21, 2009

Dom Armentano is Professor Emeritus at the University of Hartford (CT) and the author of Antitrust and Monopoly (Independent Institute, 1998) and Antitrust: The Case for Repeal (Mises Institute, 1999). He has published articles, op/eds and reviews in The New York Times, Wall Street Journal, London Financial Times, Financial Post, Hartford Courant, National Review, Antitrust Bulletin and many other journals.

Via: SnagFilms:

Twenty-Five miles from town, a million miles from mainstream society, a loose-knit community of eco-pioneers, teenage runaways, war veterans and drop-outs, live on the fringe and off the grid, struggling to survive with little food, less water and no electricity, as they cling to their unique vision of the American dream…

January 21st, 2009 ..

Large gallery on EnglishRussia.

Comment: Even today in chic St Petersburg, many people still live in one bed miniscule binary apartments, with a communal kitchen and toilet shared between each pair of flats. The people are rude and often drunk. When you enter a shop, the assumption is that the vendor is reluctantly providing you with a service and therefore the vendor, not the customer, is always right; if you don’t like it, they will tell you to foxtrot oscar - this actually happened to me! Even the dogs on the street are grumpy. And yet many people pine for a return to the “good old days” of the USSR.

January 21st, 2009 ..

Is Britain using the Euro yet? Nope. Not yet. Just wait…

I’m not so convinced that this is incompetence, like the article implies. National currencies are the enemy. And Gordon Brown is such a tool (yes, tool, not fool). What do you expect from a crook who sold half of the British people’s public treasure at the bottom of the market?

Via: Telegraph:

They don’t know what they’re doing, do they? With every step taken by the Government as it tries frantically to prop up the British banking system, this central truth becomes ever more obvious.

Yesterday marked a new low for all involved, even by the standards of this crisis. Britons woke to news of the enormity of the fresh horrors in store. Despite all the sophistry and outdated boom-era terminology from experts, I think a far greater number of people than is imagined grasp at root what is happening here.

The country stands on the precipice. We are at risk of utter humiliation, of London becoming a Reykjavik on Thames and Britain going under. Thanks to the arrogance, hubristic strutting and serial incompetence of the Government and a group of bankers, the possibility of national bankruptcy is not unrealistic.

The political impact will be seismic; anger will rage. The haunted looks on the faces of those in supporting roles, such as the Chancellor, suggest they have worked out that a tragedy is unfolding here. Gordon Brown is engaged no longer in a standard battle for re-election; instead he is fighting to avoid going down in history disgraced completely.

This catastrophe happened on his watch, no matter how much he now opportunistically beats up on bankers. He turned on the fountain of cheap money and encouraged the country to swim in it. House prices rose, debt went through the roof and the illusion won elections. Throughout, Brown boasted of the beauty of his regulatory structure, when those in charge of it were failing to ask the most basic questions of financial institutions. The same bankers Brown now claims to be angry with, he once wooed, travelling to the City to give speeches praising their “financial innovation”.

Does the Prime Minister realise the likely implications when the country joins the dots? He has never been wild on shouldering blame, so I doubt it. But Brown is a historian. He should know that when a nation has put all its chips on red and the ball lands on black, the person who made the call is responsible. Neville Chamberlain discovered this in May 1940 with the German invasion of France.

We’re some way from a similar event. But do not underestimate the gravity of the emergency and potential for disgrace.

The Government’s bail-out of the banks in October with £37 billion of taxpayers’ money was supposed to have “saved the world”, according to the PM, but now it is clear that it has not even saved the banks. Our money kept the show on the road for only three months.

As the Liberal Democrats’ Treasury spokesman Vince Cable asks: where has the £37 billion gone? The answer, as Cable knows, is that it has disappeared down the plug hole.

It is finally dawning on the Government that the liabilities of the British banks grew to be so vast in the boom years that they now eclipse the entire economy. Unfortunately, the Treasury is pledged to honour those
liabilities because it has guaranteed not to let a British bank go down. RBS has liabilities of £1.8 trillion, three times annual UK government spending, against assets of £1.9 trillion. But after the events of the past year, I wager most taxpayers will believe the true picture is worse.

Meanwhile, the assets are falling in value. This matters, because post-nationalisation these liabilities are now yours and
mine.

And they come piled on top of the rocketing national debt, charitably put at £630 billion, or 43 per cent of GDP. The true figure is much higher because the Government has used off-balance sheet accounting to hide commitments such as PFI projects.

Add to that record consumer indebtedness and Britain becomes extremely vulnerable. The markets have worked this out ahead of the politicians, as usual, and are wondering what to do next. If they decide our nation is a basket case, they will make it so.

The PM and the Chancellor , both looking a year older every day, tell us that for their next trick they will buy more bank shares, create a giant insurance scheme for bad debt, pledge to honour liabilities without limit, cross their fingers and hope it all works. The phrase “bottomless pit” springs to mind for a reason: that is what they have designed.

In this gloom, the Prime Minister has but one slender hope: that somehow, by force of personality, the new President Obama engineers a rapid American recovery restoring global confidence, energising the markets and making us all forget this bad dream.

Obama is talented but he is not a magician. Instead, Gordon Brown’s nightmare, in which we are all trapped, is going to get much worse.

OVER at IDG, one popular columnist believes at Vista will continue to slide into the shade while another new writer who arrived from CNET says that “Vista and Office Could Be the Downfall of Microsoft” and here is what he expects to happen next:

When the time comes that Windows XP can no longer be pre-installed on new computers, Macs and Linux will both benefit, of course. How much? I can’t wait to see. If someone has to learn a new operating system, they may as well do it on a system that’s immune to most malicious software. I hear that the tech support from Apple is terrific, certainly the price on Linux can’t be beat. And they can both run Open Office.

Vista is not the last among Microsoft’s headaches. Its successor, Vista 7, already contains embarrassing bugs that are quite severe, not just cosmetic.

Following the availability of Windows 7 client Beta and Windows Server 2008 R2 Beta, Microsoft revealed that neither of the next versions of its Windows operating systems were able to join domains with names exceeding 15 characters in length. Any attempt to join Windows 7 client Beta or Windows Server 2008 R2 Beta machines to a Domain Name System (DNS) with a 15+ character domain name would result in an error message, the company informed - “The attempt to join this computer to the << domain_name >>.com domain failed. The parameter is incorrect.”

And this is what they call “beta”? A couple of years ago, Microsoft fanalysts said that Microsoft was “Chang[ing the] Meaning Of ‘Release Candidate’.” They were referring to Vista.

Joe Wilcox, an analyst with JupiterResearch, said that Microsoft’s corrupted the term.

“‘Release candidate’ is a long-standing term, it has meaning behind it,” said Wilcox. “The name says it all. This should be code that’s ready to release.” It’s not, said Wilcox. And Microsoft told him so.

“I was told that Microsoft recognizes that it has plenty of work still to do on Windows Vista and that Release Candidate 1 is not a near-final version,” Wilcox went on. “I was told that Microsoft’s approach, perhaps, definition, of a release candidate had ‘evolved.’ I countered that Microsoft had changed the definition.”

Michael Cherry of Kirkland, Wash.-based Directions on Microsoft agreed that Microsoft’s misused ‘release candidate.’

“They’ve completely messed up the vocabulary,” he said. “What exactly is a pre-release candidate?” he asked, referring to the term Microsoft used last week to describe a publicly-available build of Vista that immediately preceded RC1. “What they released [as RC1] would in the old vocabulary be a Beta 3.”

Cherry said he had installed RC1, but immediately had several bugs to report. “Someone like me shouldn’t be submitting four new bugs on a build called ‘release candidate,’” he said.

So history appears to be repeating itself. The Vista 7 BSOD saga is reaching new heights (yes, “beta” means fatal BSODs, by Microsoft’s standards). We gave examples some days ago [1, 2] and this just does not stop.

BSOD at start-up:

[…]

BSOD after logging in:

[…]

BSOD while looking at themes:

[…]

So there you go. Nothing much has changed really, and even the error message is presented the same way as some of the previous versions of Windows. Still counting on Windows 7?

Watch the videos, which make compelling proof. Thanks to Juna for collecting this pictorial evidence. █

Truths about Vista 7:

• Microsoft Polices Coverage of Vista 7 by 'Kicking Out' Disobedient Journalist
• Microsoft is Bribing Bloggers Again... for Vista 7 Raves
• Vista 7 Truths and Sins
• Quote of the Day: Vista 7 Actually Worse than Vista
• Verdict of 7 Reviews: Anti-Competitive, Disappointing