An anonymous commenter asked me to look at this article (warning - PDF file) - specifically the paragraph highlighted above.
Click to enlarge if needed. The other thing you can do is hit "(Control) ++" on you computer. That enlarges the screen. "CTRL" followed by minuses "---" will bring you back to normalcy.
So as for the content, I disagree whole-heartedly with the first-sentence premise, with the idea that the educational system has *worked well* for anybody.
Just because the academic creme of the crop is smarter than their peers (or financially successful) it doesn't imply that they are ABSOLUTELY learned.
Yeah smart people can (by definition) and have overcome to an extent the horribly stunting effects of mass schooling, BUT that doesn't mean they couldn't have accomplished so much more in an educational vehicle other than the *system*.
Hint: a more liberal, er liberated, homeschooling curriculum.
You should see my 3.85 year old son do addition and subtraction. All kids have 10 fingers, do they not? Today we started "super adding"; we started *multiplication*, the simple adding of *groups*.
Meanwhile, at the local community center we send him to twice a week...
They made such a big deal about a "counting book" the kids were constructing.
It went all the way up to number 5!
All kids, hardly just mine, are capable of so much more than society and their parents expect of them. I talk to *educated* people all the time who don't do anything with their young children in the way of reading, writing, math, etc. The reasons they give me are all hogwash, all the same - they believe that learning will happen soon enough; it will be shepherded by *someone else* in a mass educational environment. "Let the kids have fun and enjoy their childhood", they say, er self-justify.
Why are adult minds so closed?
We can thank the very *system* that caponized them.
As a society we desperately need to break this regenerating cycle of outsourced thought.
There's still meat on these bones but I'm reluctant to chase them, down.
Note also Wells Fargo is taking it on the chin today, -3.77 now, for a change. I needed that. I can't wait until their earnings call next week; I can't wait to hear their NEW ACCOUNTING LIES.
Surprise, surprise. Looks like the feckless manipulators allowed the *short sale ban* to end today without extension.
The Philadelphia Phillies are only four wins from the World Series.
Don't long-suffering Philly fans deserve a break? It's been 25 years (Sixers) since they've won a title in any sport. I say let them win something. They're as loyal as any fans and not nearly are Moronic as the Boston fans who've been so spoiled recently (six titles in the past six years).
I have a lot of affection for the City of Brotherly Love. I spent the raucous ages of 18 to 27 stumbling around Center City, West Philly, and South Philly. Perhaps I idealize the city because everyone cherishes *the best years of their life* no matter where they happened to live. Heck, I meet people all the time who rave about their college+ years in Boston.
And when I do, I am always dumbfounded; and I pity them.
Even better is the next one. Check out the unmasculine hugging behind the glass.
Nothing like being outed in a full page Sports Illustrated spread!
Someone made a great little YouTube video (though you'll have to have some Philly - or anti-Philly - in you to fully appreciate it) titled Philadelphia Sports Horrors set most appropriately to Bruce Hornsby's "The Way It Is":
I can't believe it only has 4,700 hits!
Go Phillies! (Don't expect me to watch a game though.)
Neither time nor inclination today to write about this financial disaster myself.
If you need something cheerful to read, click here.
Today, I tried to buy TBT - the Ultrashort long term Treasury ETF at 56.50 and at 58.65 today but just missed it both times. It closed at 59.01. Hopefully I won't have to chase it much higher.
Yes, I am trying to ease back into my horrible Treasury short.
Here's Bank of America's CEO discussing his firm's announced massive earnings shortfall, dividend cut, and issuance of yet more dilutive stock.
"It’s a damn disaster," Chief Executive Officer Kenneth Lewis told analysts, when asked about lending conditions. "We are making every good loan we can find" but "it’s not going to be pretty for awhile." (link)
But they seem to BUYING up every bad loan they can find! See CountryWide and Merrill Lynch.
The stock cratered 8.45 yesterday to 23.77. And it's trading at 21.50 in the pre-market right now.
Click the chart to enlarge.
So share prices are at a 12 year low and Ken Lewis still hasn't been fired. It's absolutely unbelievable. Apparently there are no standards for his job performance. Read my prior post on Bank Of America's derelict Board of Directors. And then read my other Lewis screed from three months ago. If you're too shiftless to bother, here's the money quote:
Bank Of America Corp's CEO Ken Lewis said something last month that might render insight into his derangement. Via the Bank's spokesperson Robert Stickler:
"Mr. Lewis went through a number of scenarios and indicated that we feel the most likely scenario is one in which the economy does not deteriorate significantly," said Stickler, who attended the meeting with Whitney. "In that scenario, we wouldn't have to cut the dividend."
Okay, the dividend has been cut. AND the economy has deteriorated significantly. Well done Nostradamus!
If the board had fired Ken earlier this year - instead of taking solace in a phantom, fraudulent stock bounce from $18 a share - if they had removed Lewis earlier they might not be embroiled in this misguided takeover of Merrill Lynch.
This Merrill deal stinks for BoA shareholders. Elaboration will be forthcoming. (unless I forget)
It's a joke that in many states one is legally drunk from 2.5 drinks. God forbid, a driver has had three beers after work and some kid runs out in front of his car. This is the type of stuff that I - if I slept - would surely have nightmares about.
What they should do is offer a Certified Drunk Driving License.
They can have a test that's obviously taken under *legally drunk* conditions. Nanny Statists can assess a fee tax for the privilege. Insurance companies can charge higher premiums if they wish....whatever.
If lunatics think legalizing and taxing marijuana and cocaine would be a *solution*, then why not drunk driving?
I would certainly go for, and pay up for, the highest license for intoxication. I am - er was - an excellent drunk driver.
Since I've gotten married and had kids....I never will drive around after more than two beers - NOT because I don't thoroughly appreciate the amnesia of alcohol, but because the risk totally eclipses the reward. If I felt like turning the clock back and binging I'd do what every other miserable wretch does up here - sit a home alone, watch the Red Sox on a color TV, and pound cans cases of domestic beer.
Speaking of binging, I am going down to Manhattan this weekend to see a friend and celebrate his engagement. Normally these are near 12 hour romps (4pm to 4am) but this time my Mrs. C-Nut is joining us.
And NO, the engaged friend is not Perry Eidelbus. Perry's out of town at a Star Trek convention this weekend.
I am seemingly always victimized by the upfront tip.
This is when the counter girl rings you up and you conspicuously jam a bill or two and change into the "college fund" jar or whatever.
Invariably, whenever I do this they botch my order or forget about it. I get really pissed off and quite frankly am itching to reach back in and repossess the propina.
It happened again last week at the airport. I parked my car at Thrify's long-term parking; they shuttled me to the AirTran gate - or so I thought. The guy was nice and helped me with my bags...I handed him $5 before he sped away.
The problem was, he dropped me off at baggage claim. Sure I wss able to go in and, after an elevator and quite a hike, I could check in at the Airtran ticket counter. BUT I was hoping to do curbside. This haul really did a number on my fragile back - at the start of a lengthy golf trip, mind you. There's a reason why I printed out my boarding passes the night before (and there's another). The driver really screwed me. I'll bet it was probably a heck of a lot more convenient for him to drop me where he did in terms of getting his butt back to Thrifty. More experience air travelers are probably laughing at me here.
From now on, at least with food, I am going to put the money next to the tip jar in a state of advertised abeyance!
I worked for tips when I was an addled youth and people were extremely generous to me - and I am talking working class people. So I've been making a point to remind myself of this and be an even better tipper than already I am. But the problem is, when I was in the service biz I was FAST, COURTEOUS, and THOROUGHLY COMPETENT. Today, at least in Boston, you're lucky if you get a smile from a server. Make no mistake, they're doing you a favor by LETTING YOU BUY FROM THEM - or so they believe up in the dour and sour Northeast.
Not long ago some handsome lad promptly filled up my Suburban with 40 gallons or so of gas. I signed the credit card receipt and handed it to him with $3. He looked at it askance and tried to just peel the receipt from my hand. I said, "That's a tip." He was dumbfounded. "What, you don't get many tips here?".
"Never," he enlightened me.
It's a chicken-and-egg question then.
What came first in Boston: the I'm-doing-you-a-favor-when-I-feel-like-it service or the miserly gratuities???
I just wish I could expect good service and tip well automatically. Because of this local obtuseness I forever have to pay attention to whether or not they really earned a bonus. It sucks.
The only thing worse than the premature tip is the premature over-tip, on account of not having the appropriate small bills!
George becomes Steinbrenner's pet, when he shares an eggplant calzone with him. Steinbrenner then has George bring him a calzone for lunch everyday. One day, when George throws his money into the tip jar unnoticed, he attempts to grab it to place it back when someone was looking. Just as he is grabbing the money the guy turns and, under the impression that George is stealing money from the jar, refuses to sell him any more calzones.
There were no fewer than 1,000 similarly crazy incidents when I worked with a tip jar in front of me. As a cashier, you can't stare at the tip jar, or linger there glaring while the customer has to decide *whether or not* and *how much* to tip. I'd give them the change and run away much like the greaseball at Paisano's.
Then they'd be hollerin' "HERE YOU GO, CUZ...AIGHT!"
I loved Philly.
(The most memorable incident involved a pubescent who tried, unsuccessfully, to abscond with my tip jar. I nearly choked him to death over the $15 or so.)
I just now saw that the market was at one time down 800pts this afternoon. I'm sure many of you think that on a day like today I would cancel all plans and be trading away.
Wrong. I am checked out on trading - especially considering the short-selling ban. I can't short any of the house-of-cards financials and I am afraid to cover any of my extant shorts because I don't know if I will EVER be allowed to re-establish them.
Today I did my normal routine with the kids. We did some workbook pages, some math, and some coloring with my little one. Went out to eat lunch and then it was off to soccer. I didn't get home from the park until near 6pm and will sleep like a baby tonight - as I am now a long-term passive disinvestor.
It seems Pope Benedict XVI may have been reading Marginalizing Morons. In a speech today he echoed my summary judgment from the end of yesterday's post Open Season On Morons...
"He who builds only on visible and tangible things like success, career and money builds the house of his life on sand."
"We are now seeing, in the collapse of major banks, that money vanishes, it is nothing. All these things that appear to be real are in fact secondary. Only God's words are a solid reality."
Pope B has IM'ed me a couple of times over the years but I wasn't aware he had time for my blog.
When Vaughan Lazar and Michael Gordon opened their organic pizza joint in 2006, it seemed like a gutsy attempt to snatch a piece of the pie from the top dogs. But the fraternity buddies were just catering to a different set of taste buds. Says Lazar, "We found a huge void in the restaurant industry for people eating organically."
Pizza Fusion not only serves up pizza, but it also delivers passion--starting with organic, gluten-free, vegetarian and vegan toppings and extending to the stores' recycled blue jeans insulation, potato starch utensils and countertops made out of recycled glass soda bottles from other Pizza Fusion stores. "Everything can be reused or recycled, so our stores leave literally zero footprints," says Gordon, who adds that they often buy local products to cut down on transportation waste.
Go check out their website with its *SAVING THE EARTH one pizza at a time* bull excrement.
Yeah every one of their delivery cars is a Prius; I've already rendered my fact-based opinion on them.
So that means their pizza delivery vehicles are about 20-30 times what the average clunker from Domino's costs. How would you like to be in the highly competitive food business with high operational costs in this lethargic economy???
I wish Pizza Fusion were public so I could short it.
Then again, I'll bet Congress soon enough bans the short-selling of eco-pagan companies!
The above is disgraced Lehman Brothers CEO Richard Fuld who was at the helm when the ship sank this past September.
So apparently one of his employees(?) came up to him in the company gym shortly after the official bankruptcy announcement and "knocked him out cold". (link)
Haha. I told you these Wall Street guys were meatheads!
Unlike Dick Fuld, Josh Weintraub at least had the foresight to prepare his body for shareholder and minion retaliation.
Though I am quite sure with my regimen of low carb organic foodstuffs, Hip Hop Abs, and yoga I could easily kick his arse!
ASIDE - I've noticed a massive uptick in female readership ever since I updated my profile with that pic of my ravishing bod.
I just came across a story about a LARGE couple that was split up on a plane. They sent one of them to the front for *weight distribution*. The pair also had a previous problem when their collective corpulence tipped a boat and embarassed the sh*t out of their kids. But the plane incident got them motivated and they went out and lost a ton of weight. Good for them!
I submit the real problem of *when-pigs-fly* is not aeronautical, it's personal.
Last week, on my connecting flight from Baltimore to Fort Meyers I got onto the plane and a quick glance down towards my prospective aisle got me worried. I had the aisle seat in row 18; it's always hard to figure how far down you have to go - as the rows fly by rather quickly. There was a ginormous woman - whom I recognized from the waiting area - hanging out into the aisle in what looked potentially like my row.
But I had chosen an aisle seat over the web the night before. Looking at the empty row in front of her and one behind I assuaged my fear with, "she must be in the wrong aisle...or I am seated in an adjacent row."
Of course when I got down there, she was in fact in my seat. I politely mentioned:
"I think I have the aisle seat"
ObeseBaltimoreWoman - NO. YOU'RE IN THERE. YOU'RE ON THE WINDOW.
I doubled checked my ticket and the indication above the seat. I calmly pointed out that the aisle seat was mine. She went ballistic.
ObesseBaltimoreWoman - I HAVE MEDICAL REASONS....I asked for an AISLE SEAT....I'm not moving.
Now this was a full flight and while the lady gesticulated and clutched her seat belt extension(s) the line of boarding passengers was piling up behind me.
The gentlemen behind me had presciently already waved down the stewardess.
"Good luck," he whispered to me as he scooted past.
So the stewardess came and eventually got the non-skinny lady to slide over to the window. The only problem was, her booty was co-opting a full 1/3 of my seat. You couldn't even put the armrest down. Didn't I pay for a full seat? I told the stewardess I wasn't sitting there and she left to speak with the agent in the terminal.
Now this was the climax. The chunk-a-doo eventually threw herself against the window and was just able to get the armrest down. I sat in MY SEAT and got as comfortable as I could under the circumstances.
ObeseBaltimoreWoman - I have to keep my leg under your seat...there's no room....for medical reasons.
For the whole flight I had to hang out into the aisle - getting smacked by every other small-bladdered fat-ass that came by. It figures that this flight's stewardesses were also far from skinny. Who's ever seen that before?
According to this advice I found on AOL, I did the right thing by refusing to sit down.
Only they say you should make the airline put a "school age" child in that seat!
They've got measuring sticks in front of rollercoasters and they've got those little displays at the gates indicating the maximum size for carry-on luggage.
So why don't they construct something similar to snag *piggy* passengers who rightfully should be buying two tickets?
This stuff happens to me - all the time. At least when my wife is traveling with me I can make her switch seats and take one for Team C-Nut.
Apparently Bill O'Reilly is *for the bailout* and isn't tolerant of rich guys on "right wing conservative talk radio" who dare stand against it. According to him they are "Kool-Aid drinking idiots", "liars", "right wing liars", and "they're not looking out for you".
Okay.
Then Mark Levin comes on and fires back, "Moron", "you jerk", "you paid more in hush money for your little phone sex than I've ever earned.", "the Non-Factor who doesn't know crapola about economics, history, or law", "another mainstream Moron phony journalist", and "jealous like hell of Rush Limbaugh".
Levin's final shots: "Your ratings suck" and "you'll be gone soon".
Okay, he can bust on the guy's radio ratings, but c'mon, Bill O'Reilly has knocked the cover off the ball on television.
Anyway, I wanted to point out what's really going on here. Yeah, Bill O'Reilly may genuinely think his opinion on the *bailout* is unimpeachable gospel; and there may be more than a little bit of professional jealousy.
BUT, anyone who's ever studied Bill's tack would know that he considers himself, or markets himself a populist - a basher of the elites on *both sides*. Frankly, I can't stand this dichotomized construct but admit that is does have a rough basis in fact - if only because so few people today can think for themselves that everyone has decided to self-pigeonhole. For years Bill has been exposing so-called left wing loons on his show: would-be marijuana legalizers, San Francisco inverts, *restorative justice* advocates, etc. But he's always strained to find marketable wackos from the other *constructed* pole. Usually he's been reduced to bringing in some obscure Protestant clergymen; or non-orthodox Catholic priests in favor of Amnesty for illegal immigrants; and making very much ado about them. The fact is, in this country, 90% of the clowns are on one side; and that's because that side dominates our culture: the media, the courts, government, education, etc. These *LLL* Morons are allowed to act out with absolute impunity; heck they're encouraged.
In other periods of history - say when a hidebound Catholic Church reigned supreme - the polar balance of wackos was completely reversed. It is simply empirical history that:
Cuius regio ejus religio - "whose region, his or her religion" or "the religion of the ruled must be that of the ruler."
Bill HAS to blow up at *right wingers* on any particular issue he can in order to keep (transparently) chiseling his image as a moderate, as an independent. This is his MO and he's sticking to it!
Now, to speak more generally on this *bailout* that everyone and their mother has a fanatical opinion of:
A friend of mine yesterday tried to frame his *pro bailout* perspective thusly - he said that "when the extreme right and the extreme left are against it....you know it's the correct, practical thing to do."
"Okay," I said conceding that specious premise, "but will it in fact 'work'??? Will it stimulate the economy in any meaningful, sustainable fashion???"
Of course it won't. The government has already spent $700 billion to date on ailing financial institutions and various real estate bubble-exposed entities. Home prices have kept dropping and will continue to do so for another 20%-30% - until they equalize with personal incomes. Look at that chart again from my recent post - and the other one where I put the bailout cost of higher gasoline alone at $109.5 billion already.
Now again, I don't care for the puerile dichotomized framing of issues; and I haven't done any real research on which *categories* of people voted for or against the DOA *bailout*. BUT, I will say this:
If it's the diehard communists and the diehard libertarians who voted against a taxpayer funded extension of this Ponzi scheme, I have to say, IMNSHO, they are both correct and true to their ideologies.
This bailout is a complete boondoggle, a complete *bailout* of Wall Street, of wealthy investors, and of foreign governments. Any clear-headed, consistent socialist could see that. Hardly a soul on Wall Street has had to return a bonus or been charged with a crime. Not a single official from the SEC or from government has had to resign or admit blame. Apparently this tide of bankruptcies following a tremendous (if fleeting) boom is absolutely no one's fault - at least in the quadrants of finance and a government (which seems perpetually staffed by Goldman Sachs partners). If it weren't for bogeymen, there'd be hardly a soul to blame. Heck, Fannie Mae's head crooks are paid advisers to the frontrunning presidential candidate!
Furthermore, there is no way that anyone with a bona fide understanding of and appreciation for the free exchange of goods and services could ever endorse the overnight nationalization of the banking industry (and housing, and insurance). This *bailout* is the culmination of decades of statist economic meddling, of voter apathy, and the nationwide epidemic of econo-illiteracy. Even supposed capitalists like Steve Forbes and Don Luskin have forsaken their principles for the fantasy of hope; for the pipe dream that even though government can't teach kids to read, manage the retirement money of Americans, efficiently build roads, deliver universal healthcare, enforce the law, protect us from terrorists and hurricanes...that this fumbling entity can indefinitely suspend *prices* above *economic value*. You see, as the air departs this credit bubble, reality is torturing the souls of perma-optimsts and paper-wealth tigers. The fact that extremely wealthy people losing a mere 15% of their net-worth are going ape-sh*t is a frank admission of ignorance and impiety; it's proof they have an unhealthy, idolatrous lust for a currency *they can't take with them*.
True believers in free-market capitalism would be relishing this *buying opportunity*; they'd be celebrating the pruning of weak industry; and would be unshakably confident in the economy's ability innovate and regenerate its way back to prosperity.
But no. People with soft assets - real estate (YES), stocks, and bonds - are petrified because deep-down inside (since apparently not upstairs) they know they've built their livelihood upon a house of cards,
THEY'VE TAKEN AN ADJUSTABLE MORTGAGE ON IT, AND ALL OF A SUDDEN THEIR BONUS AND THEIR WAGE SLAVE PAY ISN'T SO SECURE...
The idea that a bunch of bought-and-sold, ignorant lawyers in Washington can wave a wand and convert popular self-delusion into reality, well...
In that case the *bailout* bill may as well commence:
Devil's Advocate - You just want the market to tank and the bailout to fail so you can profit from your shorts and perhaps scoop up a house on the cheap...You're as biased as anyone.
Wrong. I made my bets AFTER assessing the future. The others placed theirs BEFOREHAND. Go read my last 700 or so posts!
By the way, I'll NEVER buy a house - if I can. I would say that based on the flux in my wife's firm, there's at least a 20% chance now we'll have to move, AGAIN, back to the NYC/NJ area. Notwithstanding the six month winter I happen to really like this oasis of Boston's South Shore. Regardless, I've grown too BIG to ever be defined or confined by geography.
Sorry to have condescended to *politics*; but I was taking heat from Taylor for too much "social commentary". This anti-social post was for him.
"To protect the taxpayers, we insisted on tough oversight and accountability. To further protect the taxpayers, we wanted to make sure that as we bought this illiquid paper that Mr. Paulson was talking about, and as we invested capital into these companies that we are helping to make healthy, that the American taxpayer would profit."
"There's no need for the Federal Reserve to monetize any of this borrowing....I do not expect additional inflationary consequences from this." - Ben Bernanke
If anyone has additional and/or better clips worth highlighting please let me know. This stuff should be preserved and posted for at least the benefit of future voters and tractable Morons.
"This isn't about a bailout of Wall Street, it's a buy-in, so that we can turn our economy around," said House Speaker Nancy Pelosi, D-Calif.
The advertised value of the "Bailout" that was just passed by Congress (and will be signed by quite possibly the worst President of all-time) is anywhere between $700 and $850 billion.
That's total BS - because it will cost many multiples of that when it's all said and done.
But that figure also ignores the money ALREADY squandered.
Consider just the price of gasoline. In the past 12 months, gasoline is up roughly 75 cents per gallon since the Federal Reserve started *bailing out* the banking/mortgage market. DON'T EVEN TRY TO SUGGEST THERE'S NO CAUSALITY.
Continuing on. As a nation we consumer roughly 400 million gallons of gasoline per day. So, thanks to the 12 month failed *lower-interest-rate bailout*, we have been spending $300 million PER DAY more on gasoline. Multiply that by 365 days and you'll realize that, already, the bailout has cost....
$109.5 billion smackeroos and counting.
Then you have to add in higher electricity bills, higher home heating bills, higher costs for transported goods - LIKE FOOD, higher air and rail travel costs,....
Oh and don't forget the all the people whose incomes are down or GONE because their industry was leveraged to $2.50 gasoline - retailers, the boating industry, restaurants, etc.
And the cost of Bear Stearns, AIG, Fannie Mae,...
All of these bailouts will fail precisely for the reason that they are endeavors to divorce *prices* from *intrinsic value*.
Economic forces are some of the most powerful on Earth; good luck to any Moron trying to fight them.
One thing I WILL NOT DO is watch or listen to my kids' shows and songs. Next thing you know, you're singing Dora the Explorer in the shower!
Plus those shows and tunes erode your IQ.
Last night I got in big trouble. My wife was whistling something and then went ballistic. She got in my face and tried to blow it out - "DO YOU KNOW WHAT SONG THAT IS???!!!"
I couldn't decipher it.
It was supposed to be "I Touch Myself" and the *earworm* was all my fault. Remember I made that song my ringback AND ringtone back in January. For months Mrs. C-Nut has been threatening to "kill me" if I didn't get rid of that "(bleeping) song!" Just think how many times she's had to endure the Divinyls whilst waiting for me to answer my cell over the past 9 months.
Everyone occasionally gets songs stuck in their head. Some nerd PhD has actually researched it. Back in 2003, he came up with a list of the most stuck-in-the-head songs of young adults. Here were his results:
1) Other. Everyone has his or her own worst earworm. 2) Chili' s "Baby Back Ribs" jingle. 3) "Who Let the Dogs Out" 4) "We Will Rock You" 5) Kit-Kat candy-bar jingle ("Gimme a Break ...") 6) "Mission Impossible" theme 7) "YMCA" 8) "Whoomp, There It Is" 9) "The Lion Sleeps Tonight" 10) "It's a Small World After All"
Twice George Constanza (of Seinfeld) had songs stuck in HIS head. One was Master of the House from Les Miserables. Can you guess the other one?
What is my opinion about all this? I am of two minds about the complex situation we find ourselves in.
On the one hand, I share many of the concerns of the letter signers and other critics of the Treasury plan.
On the other hand, I know Ben Bernanke well. Ben is at least as smart as any of the economists who signed that letter or are complaining on blogs and editorial pages about the proposed policy. Moreover, Ben is far better informed than the critics. The Fed staff includes some of the best policy economists around. In his capacity as Fed chair, Ben understands the situation, as well as the pros, cons, and feasibility of the alternative policy options, better than any professor sitting alone in his office possibly could.
I were a member of Congress, I would sit down with Ben, privately, to get his candid view. If he thinks this is the right thing to do, I would put my qualms aside and follow his advice. (link)
Now I understand full well that Hahhhvaaard buffon Greg Mankiw is ALWAYS angling for a cushy policy job; he's always out there bootlicking the *candidates*.
Nevertheless it's tragic that someone so allegedly learned would defer expertise to Bernanke simply because Helicopter Ben *understands the situation* better. Precisely what in the past several months - with bankruptcies, bailouts, bank-runs, etc - has bespoken of Federal Reserve omniscience???
This country was founded on the very principle that the people are wiser than the government.
And when Greg Mankiw is properly lumped in with the socialists running the country the above still holds true.
So the other day I was at the playground (WITH MY KIDS!) and got to talking with a grandmother minding her extended brood. Turns out, she was in from out of town; she informed me that she lived in New Canaan, Connecticut.
Hmmmmm. Dispassionately I asked, "Isn't that where they filmed that movie The Ice Storm?"
She gritted her teeth - very gracefully I might add:
NewCanaanGranny - You know, that's not....I'll bet we haven't got but 7 Democrats in the whole town.
CaptiousNut - (digesting the innuendo) You mean it's not a *swingin' town*???
NewCanaanGranny - I don't mean to get political but that's just not at all accurate. That stuff never went on in New Canaan!
Okay. For those of you in the dark, The Ice Storm was a star-studded film released in 1997 that was based in 1973, New Canaan, Connecticut - the last stop on the train from NYC.
The gist of the movie was town-wide sexual perversion, er experimentation, from the pre-teenagers up to the bored Desperate Housewives. The *key party*, first pic above, was this film's defining moment.
I guess according to Grandma, apparently only "Democrats" have ever wife swapped (or "gone camping"). Who knew?
Well that contradicts my local rumor mill. Let's just say the tony town I live in south of Boston has the same *profile* as New Canaan, Connecticut. There are maybe five bars in town and supposedly one of them turns into *swing night* once a month.
I just found it hilarious how hard and how fast Grandma got defensive. Obviously, New Canaanites get this stereotype thrown in their face all the time. Remember, I wasn't assuming anything about her hood, just making innocent conversation. After all, just about every town, city, state, and nation gets unfairly labeled one way or another.
Maybe Ang Lee is a total communist and hates the town of New Canaan? Maybe there's not a kernel of historical truth in his movie? If he in fact set out to sully the town's reputation and achieved it, I'd have to take my hat off to him.
Though if you look at the ridiculous real estate prices in New Canaan today, it'd be hard to see a *swinger* discount. Perhaps it's only this particular grandmother who's aware and/or offended.
Or perhaps, it's rep has dealt local home prices a premium!
Here's the movie trailer:
In my google image searching for the pics above I came across one blogger who admits to seeing The Ice Storm five or six times.
I too must confess that I've probably seen it as much, if not more. It's one of these movies (like Wall Street or St. Elmo's Fire) that I'll always stay up and watch if I come across it on the dial.
Masten said she turned around and saw Albert wearing panties and a garter belt. The scene shocked Masten. Albert allegedly approached Masten, pushed her head towards his crotch and bit her on the side of the neck. Masten then said that she when she tried to push Albert off of her, she grabbed his hairpiece and accidentally lifted it off his head. After fleeing Albert's room, Masten testified that she reported the incident immediately to her supervisor.
Morale of the Story - A rug is never the EXTENT of the deception. Think of it this way - anyone Moronic enough to think they can beguile others with a hairpiece, won't stop at that.
They're like people *who don't drink*; people who are afraid of uninhibitedness.
The one homeowner said he paid $399,000 for his place merely three years ago. Today it's down to $189,000. So why should he continue making his $3,000 monthly payments when he could foreclose and re-buy his house for $1,000 a month???
Yes, this might very well happen to the Northeast as well. Adjustable mortgages and gasoline did in California. It'll probably be home heating bills, taxes, demographics, and recession that clobber us here.
One of the greatest ordeals on planet Earth is doing things in *groups*.
What can be more exasperating than trying to decide on appetizers when out with 12 people? Or trying to figure out the bill, where you either do an even split or have everyone ante up WHAT THEY THINK THEY OWE? Heck, it's hard enough just to agree on a restaurant and a time!
The golf trips I go on have always been either 8, 12, or 16 guys. The bigger the group, the harder it is to bear. Having learned my lesson, I ALWAYS rent my own car when going to Myrtle Beach, Naples, or wherever the golf is to be played.
Dinner alone is hard enough in groups. But a trip will cover 3 square meals a day, travel arrangements, shower and toilet shifts, differing sleep schedules, cigarette smoke, which TV station should be on, etc. The actual golf is almost never a problem....provided you can agree on teams, the rules, which group goes out first, and how much ca$h you're playing for!
One other prominent feature of the group dynamic is the *cheap veto*. Every clique has at least one or two short-armed constituents that infect all financial decisions. The guys I just went to Naples with all have plenty of money; yet they vetoed Fiddler's Creek because when we showed up they wanted $90 to play. Now all the other courses we played were about half that but this was besides the point (note it's still the off-season in Florida). We're at a course at 10:30am which, as far as I am concerned is already late, walking out would force us to arrange a new tee time AND drive to another course. I say suck it up and just eat the extra $45. I even started an investigation into exactly who wanted to leave but nobody would incriminate themself to my face.
Other stuff that has to be dealt with in *group*:
One guy forgot his prescription medicine. But he didn't have a cell phone ('old coot') or even realize that a new script could be faxed down to Walgreens for retrieval. The next thing you know, 3-4 guys are involved in this mission; I ended being forced to wait at the pharamacy for 45 minutes while they tried to sort of a snafu. This is the problem with renting a car that has passenger space!
Guys lose sunglasses. Others lose clubs. Hunting safaris are seemingly always setting out to retrieve an item or tackle a problem. We all have idiosyncrasies in our personal lives, but when on a group trip we suddenly get a window into each other's.
I say avert your eyes and take the necessary precautions.
My buddy Forbes editor Rich Karlgaard busted on the lumpen masses today. He wrote about that email floating around (we've all gotten it) whose essence is this:
"I'm against the $85,000,000,000 bailout of AIG. Instead, I'm in favor of giving $85,000,000,000 to America in a 'We Deserve It Dividend.' To make the math simple, let's assume there are 200,000,000 bona fide U.S. Citizens 18+. Our population is about 301,000,000 +/-, counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up. So divide 200 million adults 18+ into $85 billion. That equals $425,000. My plan is to give $425,000 to every person 18+ as a 'We Deserve It Dividend.'"
Rich points out that mathematically, the correct quotient only amounts to $425 per person. He then goes on to rail about *innumeracy* in our society; how the Chinese are laughing at us; and so on.
But concentrate here. Why were the lumpen masses so eager to believe the bailout would cost 400k per adult?
Well maybe they are aware of the per-pupil costs of their local public schools. (New Jersey's $15,000 per year exceeds the poverty line for income!)
Maybe they remembered that 'old coots' get $27,289 in ANNUAL government benefits.
Or maybe the rubes, buffoons, and Joe6Packs recalled that Katrina Relief alone amounted to $425,000 (or higher) per New Orleans resident.
The taxpaying public KNOWS it's getting screwed by the proposed bank bailout - I'd hesitate to discount their view solely on inarticulation.
Plus, from where I sit, a simple mathematical error is at least on par with the illogic of:
1) Being for a blank check, no-oversight $700 billion+ bailout for Wall Street. 2) And being for a "strong dollar".
The two are completely irreconcilable. See Rich's other post.
"Criticizing others is a dishonest way of praising ourselves." - Will Durant
"TODAY, MANAGEMENT HAS NO STAKE IN THE COMPANY!!!"
That was the general case in the 1980s.
But in the 1990s, companies, tech in particular, started lavishing stock options on their employees. It was a way to get everyone's interests aligned with those of the shareholder. Then came the tech bubble with a few accounting frauds and the resultant backlash. All of a sudden employees had too many stock options; they were incented to *pump* up share prices at any cost; or so the argument went. The next thing you know, Congress is forcing companies to expense stock option compensation. This all but neutered what had recently been, a progressive way to structure a public company. Mrs. C-Nut used to get stock options annually - but for the past 5 years she's been handed *restricted stock* instead. The same goes for almost all employees of large public companies now.
Now these things always cycle back, and forth.
Today's analogy would be the desperate plea to suspend mark-to-market accounting. Read what alleged capitalist Steve Forbes wrote a few weeks ago:
Also of immediate urgency is for regulators to suspend any mark-to-market rules for long-term assets. Short-term assets should not be given arbitrary values unless there are actual losses. The mark-to-market mania of regulators and accountants is utterly destructive. It is like fighting a fire with gasoline.
Think of the mark-to-market madness this way: You buy a house for $350,000 and take out a $250,000 30-year fixed-rate mortgage. Your income is more than adequate to make the monthly payments. But under mark-to-market rules the bank could call up and say that if your house had to be sold immediately, it would fetch maybe $200,000 in such a distressed sale. The bank would then tell you that you owe $250,000 on a house worth only $200,000 and to please fork over the $50,000 immediately or else lose the house.
Absurd? Obviously. But that's what, in effect, is happening today. Thus institutions with long-term assets are having to drastically reprice them downward. And so the crisis feeds on itself.
Wasn't it just a eight years ago that Regulation FD was thrust upon public companies?
How the heck have we gone from wanting to know everything about a company to today's idea that they should have full license to mark their *assets* at whatever value they want AND in the face of current prices? How did this fundamental transformation of sentiment happen in such a short span?
Steve Forbes wants Mark-to-Market replaced with Mark-to-Myth accounting. (Though it's euphemized as *Mark-to-Model*.)
What kind of economy, what kind of country are we living in today that has politicians COLLUDING with banking executives to defraud the public???
Besides all that, Steve Forbes has no freakin' clue what he's talking about. He throws out this ridiculous strawman, this example of a homeowner making their payments but gets *called* by the bank for more cash. This is garbage.
The fact is, the large banks NEVER INTENDED TO HOLD THE JUNK on their books. Much of it they were stuck with when they could no longer dump (i.e. securitize) it on investors and taxpayers (Fannie Mae and FHA) at the prices they desired. Across the board, the large banks Wells Fargo, JP Morgan, and Bank of America have been relabeling these *assets* as Level Three - meaning they intend to hold them to maturity. But this is a flat out misrepresentation, a flat-out lie.
This would be like me buying Google at $400 this morning hoping to flip it at $405 by the end of the day. BUT, unfortunately the stock dumped and closed at $350. So now I tell everyone that my *trade* was actually an *investment* which I want to hold on to indefinitely. Us traders indulge in this self-delusion, and suffer greatly from it,....all the time. I know what I am talking about here!
So in the past few years, while bond prices screamed, credit spreads evaporated, and investment banks leveraged up their balance sheets 30 and 40 to 1, how many times did Steve Forbes clamor for the suspension of Mark-to-Market? How many times did he call for more *reasonable* accounting from the big banks?
The answer, of course, is zero.
Fair weather capitalists, all of them over there at Forbes.
How bad is it when the Associated Press has a better handle on economic reality than Steve Forbes?
This chick (last name "Buckley) is a local girl whom I videoed singing at a local *Heritage Day* or something.
Tell me her version of "Suds In The Bucket" isn't as sweet as the Sarah Evans original - though without that country twang.
I just spoke to her music teacher. He lamented that she was pursuing a "college track" instead of pushing her "professional talent". Note that he won't be famous UNTIL SHE IS.
So there you go West Coast Tom, there's a quality college girl for you to stalk!
The McDonalds Southwestern Salad. Get it with "crispy chicken".
It's one of these things that I would never have even contemplated ordering if some young lady hadn't told me to. I am so glad she did because with my two small kids I certainly will be *doing time* at McDonalds for the foreseeable future. The least I can do is pass on the suggestion.
Oh, and thank God they carry *sweet tea* at the McDonalds in the Northeast now. Sweet tea is one of these things you can't get anywhere up here. The tea is unsweetened just about everywhere. I have to make my own. When I go to Florida I buy boxes of Luzianne tea bags and tote them home because stores up here don't even carry it. Boo Weekley would never last in New England.
Right now Congress and the pandering Presidential candidates are proposing to increase the FDIC secured deposit limit from $100,000 to $250,000 per account (or is it per Social Security number listed?).
They are proposing this DESPITE the fact that the FDIC has no money; and DESPITE the fact that there are hundreds of banks out there teetering on the edge of failure.
This is a rhetorical, political ruse. It's an intentional misdirection designed to get the public focused on *intentions* rather that *capabilities*. The fact is, the government doesn't have enough money or oversight to protect the cash deposits of everyone. (Unless, of course, they prime up the printing presses.)
Increasing the limit to $250,000 is a laughably transparent gesture.
Here's the apropos analogy - remember when Fannie Mae increased the size limit on loans it would write from $417,000 to $729,750?
That was passed only last year - that is one year BEFORE the Agencies bankruptcy/bailout.
They said that raising the conforming-loan limit would reduce jumbo mortgage rates and help the housing market. Yeah, didn't happen. Mark my words - this jawboning to increase the FDIC limit is a sign of WEAKNESS, as sign of desperation, not an indication of strength.
Alright, so I did a google image search of bravado and all that came up was "Bravado Maternity Underwear".
Don't bust my chops; even Will Durant ranked *mom* as the highest form of female beauty. That's right, the M-I-L-F is hardly a trendy fetish - just like the other one I blogged about.
According to this chart (click to enlarge) real estate in Charlotte, North Carolina is only down 2% from its peak.
That will certainly change with the demise of Wachovia Bank - which traded $1.26 a share yesterday and was swallowed up by Citibank for nothin'.
Everyone associates Charlotte with Bank of America but it's Wachovia that's the largest employer in the area with 20,000 workers to BoA's 13,960. (link)
Those stats don't quite tell the whole story as there are untold numbers of unofficial employees of the big banks down there. These are the *consultants*; and all the people I've met in this line of work do pretty darn well. Expect them to take healthy hourly pay cuts. And expect Charlotte real estate to join the nationwide downward spiral. Not only is the *end* of this real estate collapse *not in sight*; it's downright unimaginable.
I mean really, what's the landscape going to look like when NYC drops 30% from its peak? What's going to happen to our banking sector when nominal mortgage rates jump a couple of points to 8.5%?
Ready your bunker! UPDATE - Today Wells Fargo has entered approximately a $7 per share bid for Wachovia.
