Monday, March 30, 2009

Paging Bart Simpson

I hate to admit it, but I laughed (and laughed and laughed and laughed). Mom, if you checked out the blog today, please don't click through.

Upside of a Downturn

I can't say I would be sorry to see the Hummer die. Granted, this means more than a handful of good, American jobs tossed to the wayside, but that's nothing new. Let's hope when bust turns to boom again, sound ecological thinking trumps over-consumption.

They probably aren't too upset about it, but these folks might be in the market for another pet peeve.

Thursday, March 26, 2009

Recession Weiners

Economy going to shit? Get rid of that second mortgage, shelve the landscaping project you've been planning and prevent future liabilities.

Strangely, I grew up in Madison Park. The author is either a high school classmate with a sense of humor (which narrows things down considerably) or a spoiled Korean girl. Could be both, I suppose.

The Ramp House

This is fantastic. In a former/future life, I was/will be an architect.

Wednesday, March 25, 2009

The Bigger Picture

Since this economic crisis began, I have argued that we need to look beyond the exorbitant bonuses and outrage. Rather, we should be focusing on deregulation and the pro-Wall Street culture that has reigned supreme in Washington since Reagan entered office in 1981. Even the trillions of dollars that American taxpayers have funneled into the nation's banking system are small potatoes compared to the political power that financiers have amassed over the course of the last half century or so.

It's as simple as this: Instead of being blinded by dollar signs, look at who's in the driver's seat. By electing not to nationalize banks, the federal government has empowered the people who got us into this mess. Granted, this is an extremely complex situation, and I see many drawbacks to nationalization. Matt Taibbi has a fantastic article detailing this aspect of the current crisis. I particularly like how he addresses the role of financial language in the crisis and our economy as a whole. Money quote:

In the age of the CDS and CDO, most of us are financial illiterates. By making an already too-complex economy even more complex, Wall Street has used the crisis to effect a historic, revolutionary change in our political system — transforming a democracy into a two-tiered state, one with plugged-in financial bureaucrats above and clueless customers below.

Tuesday, March 24, 2009

Krugman v. Geithner et al.

Krugman has a decent op-ed in the Times this week. Unsurprisingly, he hits the nail on the head at one point. Noting that Geither's plan is a good deal for financial institutions, he writes:

If asset values go up, the investors profit, but if they go down, the investors can walk away from their debt. So this isn’t really about letting markets work. It’s just an indirect, disguised way to subsidize purchases of bad assets.

However, I think this conclusion might be missing the point. After all, we can all agree that the taxpayer is getting screwed here. (Even my redneck, Limbaugh-loving grandfather agrees with Krugman on this.) Therefore, if we move beyond the outrage of it all, what are we left with? Here is where the good professor loses me. He writes:

But the Obama administration, like the Bush administration, apparently wants an easier way out. The common element to the Paulson and Geithner plans is the insistence that the bad assets on banks’ books are really worth much, much more than anyone is currently willing to pay for them. In fact, their true value is so high that if they were properly priced, banks wouldn’t be in trouble.

Is that such a crazy concept? I absolutely believe those assets are worth more than the market is willing to pay. Financial markets, as complex as they may be, are driven by psychology. Anyone who has money to invest has to be at best wary (and certainly weary). I for one think Krugman is overstating the negative impact of Geithner's plan. Roubini is in the same camp.

Krugman is fantastic most of the time, but these days he is mixing the Kool-Aid. And everyone is drinking.

About that Nano . . .

Tata has unveiled the world's cheapest car, priced at about $2.5K. Looking at this machine, I can't help but conclude that this economic downturn is a blip on the screen. Clearly, consumption is still in fashion.

If every soon-to-be-middle-class family in India gets one of these, I think Al Gore's speaking revenues have a good chance of skyrocketing. The peak oil folks have to be loving this. But hey, it does 0 to 60 in less than a half a minute, although with the air conditioning on that might be tough. God knows we all need air conditioning.

Monday, March 23, 2009

Market Mayhem

Most major world indices finished up around 7% today. I think the rally was deserved. As a good friend points out, we are still lower than we were after the Geithner/Treasury no show earlier this month. This was really a drawing-in-between-the-lines rally.

Briefly, my thoughts on this mess: the monetary policies the US and other governments have implemented are unprecedented. I'm not saying they will work and I'm not saying they won't. If I were a betting man, I would wage on the former; however (and as is often the case), these short term solutions might create or extended more fundamental problems. I guess we will all have to stay tuned. In the meantime, learn from the professor.

(thanks Turner)

Friday, March 20, 2009

Worst of Both Worlds

Despite its overwhelming support in Congress, this AIG bill is giving me a little heartburn. Josh Marshall makes an excellent case against the legislation. However, he neglects to address a major component of the bill: its impact on the economy and financial markets.

"Debating the 90% tax bill has the potential to kill TALF (and any public/private partnership for that matter) and irrevocably damage TARP. It’s a problem for TARP because recipients will repay as soon as possible even if it means massively restricting capital access and which is precisely what lawmakers have attempted to avoid so far and is what could send the country into a depression."

It gets worse:

"It’s potentially a substantially bigger problem for TALF because if you’re considering participating in the TALF you now definitively HAVE to look at the Government’s willingness to tax your profits on your TALF participation if they deem them to be outsized at any point."

As Marshall notes in his post, this bill could represent the "worst of both worlds." Don't get me wrong, I'm no fan of AIG execs walking off with taxpayer money. I simply believe that complex problems demand complex solutions. This bill is pure politics. Let's hope the Senate steps up.

Note: I have purposefully elected not to cite a source for the passages above.

Thursday, March 19, 2009

He who controls your breadbasket controls your destiny

I loved this NY Times article about the Obamas breaking ground on a vegetable garden in DC and was fascinated by this piece about chickens in the Bronx.

I am also a big fan of Roosevelt/Obama parallels. Turns out Franklin and Eleanor were the last folks to have an edible garden at 1600 Pennsylvania.

Regarding the chickens: they may be just about perfect for urban living. Eggs are delicious and nutritious; chickens make great city dwellers; and, perhaps best of all, they are extremely annoying and cook up nicely (negating the guilt factor and pleasing the palette).

Wednesday, March 18, 2009


In the 2004 presidential election, George W. Bush defeated John Kerry in North Carolina, Indiana, Virginia, Florida and Ohio. In 2008, Obama won all five states, coasting to a 365 to 173 electoral victory over John McCain.

As multiple media sources have noted, Obama has spent some time in these states since entering office. In fact, the president has visited eight states that went red in 2004 and blue in 2008 since late January. This should come as no surprise. After all, paraphrasing Dick Cheney, the primary goal of every first term administration is winning a second term. Is it therefore surprising that Obama's recently released NCAA bracket seems to reflect the political status quo?

Taking a closer look, Obama's upset picks are notable. For example, he is opting for Indiana's Butler over LSU in the first round. Not a huge shocker there, as that game could go either way. More suspiciously, Barack's bracket has #11 Temple over the Sun Devils, who are a six seed. Similarly, Barack is favoring Richmond's VCU over UCLA, who made it to the Final Four each of the last three seasons. In a swing state showdown, the President also has Florida St. ahead of Xavier; granted, Florida's 27 electoral votes compare favorably vs. Ohio's 20.

Most suspicious of all, at least in my mind, is that the President has #2 Duke (overrated) going far into the tourney and the #1 seed Tar Heels winning it all. Granted, these are solid teams and storied organizations. Still, Obama is likely sitting pretty with basketball fans in North Carolina, a state he won by about one percentage point in 2008. Conversely, he is likely not making any friends in the Pac-10. Not that that's a problem. Dems already own the West Coast.