National Debt

The Suspense is Over

The only real detail Obama has given regarding his policies.

Sign of the Times

A man's unfortunate accident.

Women Rescue Iceland

The 2nd paragraph is where it gets interesting.

George Mason Homecoming Queen

Get it Girl/Guy.

Nutrition Update

This is why you're fat.

Market Economy

Perfect example of the substitution effect. Goodbye morning coffee.

Madoff Commentary 2007

Then vs. Now

Flight 1549 Update

BAC employees can keep flight 1549 refunds.

Not until after BAC asked for the refund back.

How The World Almost Came to an End

LiveLeak has caught a scary moment of previously undisclosed insight by Paul Kanjorski where he reveals some facts that have not been captured by the media previously. At 2 minutes and 20 seconds in the video below, Democratic Representative Kanjorski explains how the Federal Reserve told Congress members about a "tremendous draw-down of money market accounts in the United States, to the tune of $550 billion dollars." According to Kanjorski, this electronic transfer occurred over the period of an hour or two. And it gets worse. Kanjorski paraphrases the following disclosure by Bernanke and Paulson:

On Thursday (Sept 18), at 11am the Federal Reserve noticed a tremendous draw-down of money market accounts in the U.S., to the tune of $550 billion was being drawn out in the matter of an hour or two. The Treasury opened up its window to help and pumped a $105 billion in the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks. They decided to close the operation, close down the money accounts and announce a guarantee of $250,000 per account so there wouldn't be further panic out there.

If they had not done that, their estimation is that by 2pm that afternoon, $5.5 trillion would have been drawn out of the money market system of the U.S., would have collapsed the entire economy of the U.S., and within 24 hours the world economy would have collapsed. It would have been the end of our economic system and our political system as we know it.

We are no better off today than we were 3 months ago because we have a decrease in the equity positions of banks because other assets are going sour by the moment.

Interestingly, Kanjorski, and likely more and more Democrats, are starting to shift to the camp that more time is needed to make a correct decision this time (which may explain Geithner's decision to postpone the "bank-rescue" announcement by one day to Tuesday), instead of rushing into another half-baked plan. Very scary stuff.

A Happy Banking Tale

Interesting piece here by Washington Post columnist Steven Pearlstein about a relatively small North Carolina bank called Citizens South, which avoided bad loans, has remained profitable, and then applied for and won $20.5 million in TARP bailout funds.

A few weeks ago, while reading a newspaper article, Price came up with an ingenious plan for how to use it.

The article was about the reluctance of people to buy a house in the current market, and what kinds of incentives had been used successfully by builders and bankers to get them to close a deal. Two stood out: lower rates and the waiving of closing costs. And that got Price to thinking: What if Citizens were to use its federal bailout money to offer below-market mortgage rates with no closing costs to consumers who would buy a house, or a house lot, from builders and developers who had borrowed money from Citizens?

Price asked some of his loan officers to check with the builders and developers, who not surprisingly were excited enough about the project to be willing to chip in some money to help cover a portion of the forgone closing costs. So last week, Citizens launched its marketing campaign for the $20.5 million program, in collaboration with its builder-developer customers, offering 30-year loans with an initial teaser rate of 3.5 percent for the first two years, rising to a fixed 5.5 percent rate (the current market rate) for the balance of the loan.

“As we see it, it’s a win-win-win situation all round,” Price explained to me.

Pearlstein is particularly impressed that Price’s total pay package last year was just $456,146, a rounding error for most of the eight banking kings who came to talk to Congress. This leads Pearlstein to deliver a zesty kicker to his column:

So here’s a question the House Financial Services Committee might put to the Titans of Finance: How is it that Kim Price, a community banker with an undergraduate degree from Appalachian State University, a tiny executive staff, and a pay package that you would consider insulting, somehow managed to come up with a more creative use for his government bailout money than any of you?

Michael Lewis Commentary

"...We’ve all been hearing a lot lately about the dangers of testosterone. A preposterous idea is gaining traction: that the problem with Wall Street is that it is run exclusively by men. News flash: Wall Street always has been run exclusively by men. If this crisis is worse than previous ones it may be because, for the first time in financial history, women were let in. Remember Erin Callan, Zoe Cruz, Sallie Krawcheck?"

Source: Bloomberg

Historical Perspective

Irving Fisher: from The Economist

Quote of the Day

How would Adam Smith fix the present mess? Sorry, but it is fixed already. The answer to a decline in the value of speculative assets is to pay less for them. Job done.

~P.J. O'Rourke

Cartoons

Clean Your Computer Screen

Excellent and very efficient way to clean your computer screen.

True Hollywood Stories: The Muppets

Top 20 Muppet Stories.

Louis CK

The Flu Mystery

Why the flu flourishes in the Winter.

In Defense of Wall St.

1. Stop Being So Mean To Bankers.
2. Gretchen Morgenson, Please Step Down From Your High Horse.
   

Madoff Client List

If you invested in Bernie Madoff's funds, you probably already know you've lost pretty much all of your money. However, by the grace of God, the client list for Madoff's has been made public for your viewing pleasure.

Anticipating Future Correlations

Interview with Nobel Prize winner and Economist at NYU Robert Engle.

Stimulus Broken Down

Source: Washington Post

How Much Does it Cost to Apologize for Porn?

Despite NBC banning sexually explicit ad content from the Super Bowl broadcast, Comcast customers in parts of Tuscon were exposed to about 30 seconds of a pornographic film which interrupted Comcast’s Super Bowl coverage on Sunday.

The company is paying each of its affected customer a $10 refund.

This begs the question: How did they decide $10 was the correct amount?

Furthermore, if $10 is Comcast’s estimation of the damage 30 seconds of porn incurred on the average viewer, should it have paid more to families watching the game with small children, or since the porn clip interrupted the game right after Larry Fitzgerald’s last touchdown in the game, Cardinals Fans?

And most important, what about the people who enjoy porn? Should they send back the refund, or perhaps with an extra dollar or two?

Been There

The "Man-Cession"

According to today's BLS Labor Report, the gap between the male jobless rate (8.3%) and female jobless rate (6.7%) widened to 1.6%, which is the largest male-female jobless rate gap in BLS history (back to 1948).

Say Hello to My Little Friend

Record Breaking Mammary Glands.

Google Earth's Impact

In case you were wondering, it was a van that hit the deer.

Cartoons

Too Big to Fail

The Magic of Financial Engineering

From the Depths of the Internet

1. Cattle that are named and treated with a "more personal touch" can increase milk yields by up to 500 pints a year.
2. Extremely interesting look into the American consumer. (If you haven't heard of Mint.com, check it out. A very easy, informative, and secure way to maintain your personal finances.)
3. Top 10 most worthless currencies of all time.
   

The More You Know...

The IRS hold music is main stream classical. I was blessed with pieces from Mozart and Tchaikovsky. It really did help to keep me call for the upcoming battle for information with an IRS representative.

*Update*: Virginia Tax Office had the instrumental Pretty Ricky beat, Yes Sirrr.

Virginia Tax > IRS

Whammy

It puts the lotion in the basket.

Unfounded Rumor

BofA is [supposedly] asking the 22 BofA employees that were traveling on biz down to Charlotte when their US Air flight went down into the Hudson River to repay the ticket price that US Air is refunding to them.

So, go down in a plane on biz and you owe your firm the $450 ticket refund check. Nice to know.

Winter Bites Mayor Bloomberg

A Staten Island groundhog "inexplicably" started noshin' on Mayor Bloomberg.

And You Thought Your 401k Was Losing Value

Can I reverse this process with my bank account's zeros?

Capital One: What's In Your Wallet

Customized credit cards, not exactly true.

Cruel & Unusual

Defining Cruel & Unusual When Offender is 13

According to court papers and a report from the Equal Justice Initiative, which now represents Mr. Sullivan, there are only eight people in the world who are serving sentences of life without parole for crimes they committed when they were 13. All are in the United States.

And there are only two people in that group whose crimes did not involve a killing. Both are in Flo-rida.

Menstrual Site for Men

That’s how PMSBuddy.com pitches itself. To wit:

PMSBuddy.com is a free service created with a single goal in mind: to keep you aware of when your wife, girlfriend, mother, sister, daughter, or any other women in your life are closing in on “that time of the month” - when things can get intense for what may seem to be no reason at all.

Note that they are smart enough to not include “employees” in the list of women to keep an eye on.

The Eureka Hunt

Why do good ideas come to us when they do?
The New Yorker: July 28, 2008

"...The resulting studies, published in 2004 and 2006, found that people who solved puzzles with insight activated a specific subset of cortical areas. Although the answer seemed to appear out of nowhere, the mind was carefully preparing itself for the breakthrough. The suddenness of the insight is preceded by a burst of brain activity. A small fold of tissue on the surface of the right hemisphere, the anterior superior temporal gyrus (aSTG), becomes unusually active in the second before the insight. Once the brain is sufficiently focused on the problem, the cortex needs to relax, to seek out the more remote association in the right hemisphere that will provide the insight. As Kounios sees it, the insight process is an act of cognitive deliberation transformed by accidental, serendipitous connections..."

Mortgage Meltdown V2

Negative Equity Properties & the Risk of Foreclosure:

Will Borrowers Walk Away or Wait for Appreciation to Return?

• In Massachusetts only 6% did so in a 1992-2007 study
• But the situation is far worse today with 18% of all loans having negative equity and another 23% are nearly so
• LTV (loan to value) averages 66% nationally with 10 states at 75% plus
  
• Nevada and Michigan, negative equity borrowers exceed 80%

Coming Wave of Option ARMs (adjustable rate mortgages):

From 2009-2011, an estimated $1.88b in option ARMs will recast

Breakdown

• $80mm in Q4 2008
• $575mm total for 2008
• $804mm total for 2009

Specific Cases:

Countrywide

• 72% of borrowers were making lest than full interest payments
• 83% received loans with little or no documentation

Wachovia

• 45% of $122b in their loan portfolio consist of option ARM loans

Mortgage Payments Will Rise by 50% in 2010 and Double by 2011:

Fall 2008 in Pictures

FlowingData

Probably one of the more interesting ways to convey data.

1. Watching the Growth of Wal-Mart.
2. Watching the Growth of Target.
3. Why do Freeways Come to a Stop?
4. Guess Which State Searches for "poo" the Most.
5. Stock Market Visualization.

*Top 5 Best Visualizations of the Year*

What Brought US Airways Flight 1549 Down???

US Airways Flight 1549 passengers are not happy with the "coveted" Chairman's Preferred status CEO Doug Parker has offered them through March 2010. They want it for life, and death to all things geese.

Crime Watch

I don't have to tell you that times are extremely tough. With so many individuals and institutions taking it up the A, it should come as no surprise that even the once most successful among us are cutting corners, where they think they can get away with it. So Blackstone founder Steve Schwarzman probably didn't think it was a big deal when he (or one of his deputies) decided to try and scam the FT, in a cost cutting effort. But Schwarzman THOUGHT WRONG. Cityfile reports that SS, I shit you not, is being sued by the FT for allowing employees to all share one log-in, rather than pay for separate online subscriptions.

Ctrl-A then Delete

My comrades out at Fannie are "doin' their thang."

Fed Alleges Plot to Destroy Fannie Mae Data.

Wall St. Execs Shouldn't "Make" More Than The President

On further reflection, I am not so opposed to "fairing up" executive compensation to be more in line with our national executive. Senator Claire McCaskill might be on to something here.

Let's see here...

Cash Compensation:
Salary: $400,000

Cash Subtotal: $400,000

Room and Board:
55,000 square foot mansion, in historic Washington, D.C.: @ $100/sqft: $5,500,000/yr
Personal Chef / Kitchen Staff: $300,000 / year
Other Servants / Attendants: $500,000 / year

Subtotal: $6,300,000

Discretionary Use Of Private Aircraft:
(One of 2 Boeing 747-200Bs "Air Force One"):
Annual Costs: 120 hours @ $65,000/hr: $7,800,000
Annual Costs: 700 hours @ $65,000/hr: $45,500,000

Helicopter Fleet:
Annual Costs: 50 hours @ $5200/hr: $260,000

Aircraft Subtotal: $8,060,000
Aircraft Subtotal: $45,760,000

Other Personnel:
Personal Driver On Retainer (Defensive Tactical Driving Trained) @ $300/day $109,500
Personal Body Guards 35 @ $500/day $6,387,500
Use Of Personal Car 60 days @ $2000/day $120,000

Personnel Subtotal: $6,617,000

Annual Benefits Total: $59,077,000

Four Years of Same: $236,308,000

Pension And Related Benefits:
Present value of Pension Benefits ($200,000 per year): $2,251,556

Total Benefits: $238,559,556

Average Annual Benefits: $59,639,889

The Bailout Game: Be Beard for a Day

Great waste of time.

Calvin & Hobbs circa 1994

Though published 15 years ago, this comic strip hits the nail on the head with today's bailouts.

Links

From the depths of the internet:

1. Amazon Listing: read the book description followed by the comments; "some people chide this epic for being "too commercial," calling it the "Harry Potter of Chemical Shifts and Coupling Constants for Silicon-29."
2. Why Wall Street needs corporate jets
3. Football Economics: the need to change NFL overtime protocol.
   

Symbolism