My primary suggestions were:

1. That Steve Ballmer share an Office of the President with Ray Ozzie and Craig Mundie;

2. That Microsoft decide whether or not the company wants to be a force in the consumer markets, and, if so, how it should go about doing this; and

3. A new charter for Microsoft product design that might give it more lift based on existing corporate skill sets and markets.

I hope everyone inside and outside the company finds these points worth discussing; please feel free to post here.

You can hear the interview here: www.kplu.org

This all presupposes that learning is, in some way, going on. But I don’t think the people who personally put us here – and there is a rather clear group of them – have been punished. In fact, I’d challenge our readers to name a SINGLE person involved in the real crises who has been identified and punished for his misbehaviors.

On the other hand, there are many of these folk who got bonuses, continued to collect CEO pay, and so on. If they have learned anything, it is that there was no downside to blowing up the local and world economy, other than a short respite before they have a chance to start all over again.

And this is the real question: Who, exactly, is learning lessons? We know from his current interview series, a pathetic attempt orchestrated by Karl Rove to re-define the Bush Legacy, that the Decider has not learned a thing from his countless mistakes, but he was learning-averse from the beginning.

In fact, given the roles of all those, including the Bush administration miscreants, are there any perps at all who have seen the light? Who now recognize the error of their ways, for creating trillions of dollars of damage to the global economic system? Why are we treating this like some kind of victimless crime, when their actions have had more victims than any past economic debacle, perhaps shy of the Great Depression?

Why are we acting as though no one caused these problems?

I guarantee you, once a group of hands-on bundlers and schemers, corrupt regulators and paid-for politicos are put in front of the public, not a single one will show not only remorse, but any sense of learning, at all.

And so the question comes to my mind: if the people who brought on this catastrophe have not learned by it, why should those wno didn’t cause it have to go through the learning process? The answer is simple: so that we can identify people like this ahead of time, next time, and prevent them from getting anywhere near their current seats of power. Self-dealing presidents, incurious regulators, power-hungry sycophants in top jobs, incompetent or unethical corporate leaders; we will need to identify the types much earllier, next time around, and make sure they don’t take us down this path again.

That’s the lesson, more than which bonds to regulate and how, which we should all be focused upon now.

A day earlier, a US investment expert (in London at the moment) exhorted the US audience at MSNBC to reinstate the “uptick rule”, one of the many regulations cleared away in the last few years, which prevented shorts from just piling on without an interim uptick.  Citibank asked for the same assist today.

Finally, John Bogle (Vanguard co-founder) has now come out strongly against what I’ve been calling Vampire Investors; he figures they take about $600B a year out of the US financial system, without adding value.  He actually says they subtract value.

One of these classes of Vampires are a certain category of shorts.

One view of shorts is that they are the other half of a natural balance: long vs. short.  Simple, eh?

Another is that they form a necessary part of any arbitrage play, and so provide natural risk aversion and stabilization to — to what?   To individuals, hedge funds, or the market?

I would suggest that the natural balance of things is represented not by long vs. short, but by buy vs. sell.

Shorts operate in various ways, but the most insidious, I think, is the Jackal Trade, where you see a whole bunch of jackals pick a target (in the last few weeks, we’ve seen a long list of examples in the financial sector), and then attack it in concert, driving the price down even as they make money on the decline.

Does this add value?  No.  Does this stabilize the market?  Just the opposite: it is perhaps the primary danger equities markets face today.  Can we count on the self-interest of shorts to stop doing it when it endangers otherwise-healthy companies, or even whole market segments?  Obviously not; they won’t stop as long as there is money to be made – and why should they?

Australia outlawed shorts in September.

I think it is time for serious consideration to be given not just to stopping shorts in the financial sector, but in the markets.  Perhaps there is some alternative way to provide some hedging range of offlaying risk, without allowing shorts to drive global banking stocks down 40% in a day.  If so, fine.

But the SEC and friends have to bring this carnage to a stop.  It has nothing to do with capitalism, everything to do with market manipulation, and it is wreaking incredible damage at a time when we need serious repairs.

That’s right: speculation is as old as the hills. Everyone does it. But what if a few very large players realized that, simply by the fact of speculating, they could create a new landscape for making profits? What if, for instance, just by creating volatility, they could increase their profits ?

Well, I think not only, can they, but they are.

It is likely that prices for stocks, bonds and commodities have always carried a veneer of this, a small premium in speculation costs just for being an open market. How much? Maybe a few percent in calm markets, maybe as much as 5-10% in very active markets.

Members know I have long been convinced that consumers are being gamed in both the gas and oil markets. We’ll now use the oil market as an example.

Senator Maria Cantwell (D, WA) opened hearings this morning on the price of oil. While I’ve yet to see an investigation properly done into this question, Maria and her staff are coming about as close as one can get. She mentioned Enron’s gaming of California for all those troglodytes who think we can’t or wouldn’t be gamed by energy companies.

Two of her witnesses made estimates of how much of today’s oil price is due purely to speculation. Last time I checked this out, the figure out of Wall St. was about 20% – a record in this market, where the same figure used to be in the 10% or less range.

Today’s witnesses put the fraction of today’s oil price caused by speculation at 25% (a retail expert) or 50% (an oil commodity expert). I’m fairly sure the second figure is closer to the truth.

What good comes from those who drive prices up and take their profits from the froth? Other than paying their bar bills and mortgages, I’d say no good at all. Clearly, consumers are harmed, as are all legitimate players in the fuel supply chain.

Are these hyenas in wheat, too? And rice? And —

I expect they are in every market naive or thin enough to be manipulated with large investment sums. Perhaps vampires are a better name for these players, since they weaken others while filling their appetites for ill-gotten gains.

Can the world afford this new vampire investor class? The news is rife with stories of companies bankrupting, people going unfed, car companies suffering, consumers no longer traveling, inflation running out of control — no, we can’t afford them.

Would someone please drive a wooden stake through their collective hearts, and soon?

My heartfelt thanks to Maria Cantwell.