Monday, September 29, 2008

Thanks To Our Flexible Lending Standards

Dear US Taxpayer: Prepare to be hit with bowling balls and scalded with coffee.

Digital Rights Management: Still Terrible

Hey, did you buy music on line from Wal-Mart? Well guess what? After October 9, you lose your music.

Had you downloaded that music from limewire, you'd be totally ok. Perhaps it's best to just download music and then send your favorite band a check.

Bailout Needs Bailing Out

It looks like the "bail out bill" has failed.

I'm a bit ambivalent on this. Duncan Black (AKA Atrios) is against it. On the other hand, Paul Krugman is for it. I have been an avid follower of the business pages and the general mortgage paper mess but one thing I'm sure of is that I don't know enough to know if this is a good idea or not, so my best option is to look to the opinions of those who know more than I.

Fundamentally I'm not convinced that this is necessary. Look, there's a really big problem, but it isn't a short term cash problem, it's a "people borrowed lots of money and made terrible investment decisions with it" problem. If the government rescue plan pays market rates for all this bad debt, the banks will still fail. If the government pays enough to actually rescue the banks, the treasury department (i.e. us) loses billions. Because of this, a bail out without government equity (government buying or taking over the stock rather than only buying bad debt) is going to have problems any way you slice it. We may be better off just taking the banks as they fail.

The other major problem with this whole thing is that it will be implemented by people chosen by George W. Bush. Every major policy created or administered by people chosen by George W. Bush has been at best a failure and at worst a disaster beyond what anyone would have thought possible. I don't trust people chosen by George W. Bush with $700 Billion dollars.

I like Brad Delong's plan here.

Happy New Year

This sundown is the start of Rosh Hashanah, the Jewish New Year.

Party like it's 5769.

Saturday, September 27, 2008

Creative Use Of Censorship

New Fatboy Slim video "Toe Jam" featuring David Byrne of the Talking Heads.

I love the look of this video too. They did a great job on the hairstyles and clothes, but the best part is the film (or the post treatment digital ... shrug) they shot it on. The texture of the image really captures 70's porn film.

Silly Poo Pants Predicts Market Crash

Taking Off Mortal Coil Here Boss

RIP Paul Newman. Here he is boxing the guy from the Breath Assure commercials.

Nature Editorial, Advertising Depts Need To Talk

Check it out here.

Activate The Bat Signal

Friday, September 26, 2008



Really? Both candidates seem stiff and stumbling for words. Both seem like ill prepared lecturers.

McCain seems condescending. Wonder how that will play.

Thursday, September 25, 2008

No Time

John McCain hasn't had time to read the bail out proposal:

You can read the treasury's proposed bill here. 12 sections, maybe 2-3 printed pages.

You can read Dodd's counter proposal here is 43 pages.

Cats Pro/Con

Pro: Sleeping on your tummy while you watch TV.

Con: Wiping out native bird species.

Wednesday, September 24, 2008

What He Said

Matt Y. and DeLong combine in this post.

Let's Play Wall Street Bailout!

Rep. Kaptur (OH-9) explains the rules.

Tuesday, September 23, 2008

Bailout In Brief

The Treasury Department came out with a plan over the weekend: Give me $700 Billion to spend any way I like and nobody can review my decisions. Today Bernanke and Paulson were busy telling Congress that if this didn't happen RIGHT NOW then the sky would fall by Friday.

This is a complicated issue, but let's make it simple: If George Bush was your neighbor and he wanted to borrow $400 and said he needed it by the end of the week or he'd be evicted, but he needed it in cash and he didn't want you to give it to his landlord yourself and could you just give it to him right now thanks, would you trust him?

Sen. Chris Dodd (D-Awesome Town) has a plan that's better here. Explanation by Paul Krugman here.

(Both links to Berkley Economics Professor Brad Delong's blog)

UPDATE: Dow closed down about 162 points, below 11,000 today. On the whole this doesn't mean much given the insane volatility over the last week. There's no point in worrying about the day-to-day but I take it generally as a good sign that it's below 11,000. Not that I think people deserve to lose money, but just that it feels like it should stabilize there for a bit. Yeah, that's as scientific as it sounds.

One Thousand Words

(FYI that's Treasury Secretary Henry Paulson on the left and Fed Chairman Ben Bernanke on the right)

Wednesday, September 17, 2008

Who Is TED And What Is This Spread?

Go here or here for info about the "TED Spread."

Basically, the TED Spread is the difference "spread" between the London Inter Bank Offered Rate (The LIBOR - the rate at which banks charge when they lend to each other) and the rate on the 3 month treasury bill. It's sort of a measure of economic stability. If there is very little chance that banks will go under, the difference between the rate for a short term loan to a bank will only be a little higher than the rate you would get from lending the government a similar amount of money (a Tbill being essentially that). But, if there is a higher chance that a banks will go under, lending banks will want a higher interest rate to compensate for a higher risk they're taking. To put it the other way around: if there's instability, you would MUCH rather lend money to the government (a relatively safe loan) than lending to a bank (which would not repay you if it went bankrupt).

Therefore, the fact that the TED spread is very big (in historical terms) means that the future of banks generally is very unsure.


AIG has the "Strength to Be There."

They just don't mention the $85 Billion of tax payer "strength" required.

Via consumerist.

Now That Makes Sense

After yesterdays 142 point gain in the face of horrible economic news and no interest rate cut, I was very confused.

Today, though, the Dow is back to cratering. It's down more than 300 points as of right now. So, while this is sort of bad news, at least it makes sense.

UPDATE: Closed down almost 450 points.

Not To Be Pessimistic But...

The FDIC is running out of cash. Current fund: $45.2 Billion.

A certain bank that rhymes with Worthington Musial is basically insolvent. It has about $180 Billion in deposits.

So... yeah, that's bad.

UPDATE: Say, what does that writing say on the wall there?

Meanwhile, Osama Bin Laden Still At Large

US Embassy in Yemen was attacked today.

Looks very similar to the Kenyan Embassy attack which was linked to Bin Laden. Sure would be nice to have him behind bars...

My Dad: Slave To The Sun Scare Industry

In response to criticism arising out of the fact that Sarah Palin had a tanning bed installed in the Alaskan Governor's mansion, the Indoor Tanning Association issued a press release.

"While partisan bloggers and the sun scare industry will use this as an opportunity to undermine Gov. Palin and demonize the indoor tanning industry, the fact is that Governor Palin's decision to get UV light from a tanning bed positively impacts her health."

Dunno who the Sun Scare industry is, but my Dad has a future with them I'm pretty sure.

Tuesday, September 16, 2008

Something Light

Serious news day. So here's Sarah Palin baby name generator.

I'm Torpedo Vindicator Palin.

What The Hell Is Happening?

I have no idea what's going on. The Dow is up 80 points today on news that AIG is going bankrupt tomorrow and the Fed won't reduce interest rates.

I don't get it.

Update: The Dow closed up 142 points. This is me not understanding something.

Update 2: Well this should cheer you up.

Update 3: AIG apparently will give up control to the Federal Government in exchange for an $85 Billion dollar loan.

Monday, September 15, 2008

War Or Car Update

We could have bought every panda a stealth bomber! How cool is that?!

Photo by Flickr user used under creative commons license.


As of the close of marked today the DOW is down more than 500 points (4.4%) and down below 11,000.

This is of course on news that the fourth largest investment bank, Lehman Brothers just asploded, and Merrill Lynch sold itself to Bank of America. The sale of Merrill was the financial equivalent of becoming bubba's prison boyfriend. At least that way the beatings stop and you know who's going to screw you.

Goldman Sachs and Morgan Stanley should probably be feeling a bit nervous right now. They are the only two IB/Brokerage houses that are still independent.

In other news, big mortgage debt holders AIG and Washington Mutual were hammered. If you bank at WaMu, um, make sure your account is under the 100,000 FDIC insurance cap eh? Actually, same is true for Wachovia.

What we're seeing here is all that bad debt coming to the surface. This is the same problem again, just with different players. All these CDOs/SIVs/MBSs are different ways to package the same shitty loans. Everyone made these products, sold these products, and bought these products because everyone (by this I mean all the banks and especially the bankers themselves) made lots of short term money in salary, bonuses (for people) or fees (for the banks). Once the proverbial feces-fan interaction started, the first reaction has been to try and prop up some, let others fall, but still pretend that the stuff in their vault is different. But it isn't. Eventually they're all going to come due.

Picture courtesy of the Library of Congress via Flickr.

[Note: had to change the picture, noticed it was all rights reserved.]

Tuesday, September 9, 2008

Kim Jong Ill?

According to Christian Science Monitor here, Kim Jong Il failed to show up at DPRK's "Tanks, Missiles and Troops Spectacular" in celebration of their 60th anniversary. It is rumored that he has fallen ill, and it may cause complications with the deal for North Korea to shut down it's nuclear research.

What's Wrong With The Media Ch. 2345

Excellent post over at the Washington Monthly here explaining a central flaw in political coverage/discussion as it exists today. Here it's about the fact (note, fact) that Sarah Polin lied about turning down the "Bridge to Nowhere." But the same pattern occurs often enough that it's maddening. When one side is lying and one side is telling the truth, the fiction that a reporter must be "balanced" winds up confusing or misleading the viewers instead of informing them.

See a great This Modern World featuring the inimitable Donald Rumsfeld here.

So Long And Thanks For All The Fish

Just in case you are startled out of sleep tomorrow by the total annihilation of the Earth into a singularity, here is an explanation for what happened.

The Large Hadron Collider will be switched on at about 3:30AM Eastern Time. Actually, the first head on collision between two proton beams will not be for 6 to 8 weeks, and even then it will not be at full power. The beam/beam collisions are what could theoretically create micro black holes. So doom has been postponed for another month and a half.

Besides, all the stuff that might happen almost certainly would not destroy the earth. Almost certainly. Sleep well.

(NOTE: All kidding aside, even if a micro black hole was created, the singularity would be extremely small, quantum small. like smaller than an atom. sure it could suck more matter in but on a quantum scale matter is ... well mostly nothing. See here for a scale model of the smallest and simplest atom, the hydrogen atom. Now imagine a black hole maybe slightly bigger than the one-pixel electron. What are the odds it would hit anything? Also, due to Hawking Radiation any such micro black holes would evaporate practically instantaneously. So, in all seriousness, there's no risk here. almost... :-)