Breakin tha law, Westchester style

For some reason the Village of Larchmont sees fit to lock up its tennis courts in winter, vexing Rob and me to no end. Yesterday, we got even. We arrived at the courts "across the tracks" by Murray Ave at 3 or so, and found them locked, but another pair of bold lads, dressed in black, one with a full red beard, had scaled the 12 foot fence and were playing. Enboldened, we chucked out racquets over and followed suit. I sustained a light gash in my calf from one of the sharp fence ends at the top, but reasoned that any rust had not penetrated deep enough to warrant a tetanus shot.

At some point in time a cop came by and checked us out. Security was probably extra tight, since we were within a few blocks of Timothy Geithner's crib up on Maple Hill Drive. But once they had cased us, and despite my New Jersey plates and ancient Outback wagon, they left us in peace. Whereupon I let loose a display of deft, well-angled shots.

Big weekend

With a four days of weekend to work with coming up -- and spared any routine FDIC Friday related tasks -- doesn't it seem like maybe Paulson and his team should be able to roll up their sleeves and come up with some even bigger bailouts?

Grey day

An almost grizzly day of boredom in New Jersey, with faint flickers of life only in the budget sushi I found on my plate at lunch.

Also, come to think of it, I must say that I'm pleasantly surprised by the first bit of Simon Schama's Landscape and Memory. I saw Schama on the BBC commenting on the credit crunch in October and he was all handwaving freneticism, and though you sometimes have to bushwack through the virtuosity of his dense prose, the dude is clearly loaded with deep and broad thinkings.



This is a guy, mind you, that Columbia recruited from Harvard and gave a University Professorship, meaning he could teach whatever the hell he wanted (Edward Said was another), as a deal-sweetener to bring his wife to Columbia's medical school! It's rather mind-boggling. Apparently she's astoundingly good at splicing mice genes or some such.

So I'll keep reading, heavy though it is.

Back to the Motor City

A commenter a couple of days back asked why I was advocating a package for Detroit, why not just split $25 billion dollars over 500,000 workers and call it a day? I think many of the neo-Schumpeterians out there discount the value of organizations. There's real economic value in being able to pick up the phone and call Jimmy in Finance or Xia-Li in the Shanghai office. Just think how hard people work to develop a strong rolodex, and then multiply it by whatever. Policies, procedures, physical infrastructure, culture... there are values in corporations which shouldn't be tossed aside lightly.

This is not to say that Detroit doesn't suck and suck mightily. It should be allowed to die a sorry death in its own due time, but it shouldn't be forced into the arms of the grim reaper because of greivous bullshit on the part of Wall St, Washington, and, yes Virginia, Main Street, and not right now.

Ira & Abbey

At first it seemed as if this movie wasn't gonna get going, but after a while it found its gear and became a delightful little farce, really the best Woody Allen movie in years, despite the fact that Woody wasn't involved.

The trouble with Detroit

So our house was broken into and my car keys were stolen, and we don't have another spare for the Volvo. So I called up the Volvo dealer figuring he ought to be able to take my VIN number and make a key and clicker and mail it to me (and he should be able to!).

But no. Not only do I have to go to the dealer and have them make a physical dupe of the key, they have to download and install software so the key will talk to my ignition. And it takes an hour to install @ $125. So for the key and the clicker together the total bill is around $350. And for what? Protection against somebody stealing my key and making a copy? If they have my key for long enough to make a copy, they're gonna take my car.

This is a great example of the Detroit (Ford, in this case) business model, which is largely shared with the world. Push merch out the door at low margins and make money on financing and parts and service. Which is why I'll never buy a car that has a warranty on it.

This needs to be fixed. But not this year. I dunno why the Republicans are busting Detroit's balls over $25 billion. It costs that much for AIG to fart. They're just in a bad mood. $25 billion to Detroit is a good and cheap stimulus package. It's like administering an epipen to someone in anaphylactic shock while waiting for the ambulance to get there. It carries the patient through to when real medical care can be provided.

The Year of Magical Thinking

This book had been staring at me for a while. I knew what it was about, and I knew who had written it, so I knew what I was in for. In fact, I was looking for it, another mile along the road towards coming to grips with my lamentable mortality, a follow-up to Eugene O'Neil's Chasing Daylight, which I see that I read almost exactly two years ago.

And so, the book, in which Joan Didion watches her husband John Gregory Dunne keel over and die at the dinner table, even as their daughter Quintana Roo is in the hospital in a coma from some freakish illness. No fun.

Didion, true to form, and like a good WASP, chronicles her disbelief at and distancing from the events in her trademarked neo-Hemingway style. She tells us more of quasi-catatonia than of thrashing and gnashing, which, it would seem, she skipped. She gives us a pretty solid survey of the available literature on grief.

The book succeeds as a portrait of a marriage. She loved him, their lives were deeply intertwined, this she pulls off. She also does a good job telling about waiting not once but twice at the bedside of her gravely ill only child. This is some heavy shit. But I have no idea why she leaves us hanging about the final disposition of her daughter, after telling us earlier that there was like an 8% chance of her recuperating and being mentally all there. I, for one, thought that was important and was hoping for a little closure.

But Didion was too busy reminiscing about going to Paris or some sandwich they ate in Honolulu or room service at the Beverly Wilshire. In the end, there's a little too much name-dropping and display of privilege for me to really care much. I would rather have heard about her daughter.

Next T Sec

Intrade points to Tim Geithner as the preemptive favorite for the post, which is kinda sad. Cramer is full on hopping mad about the idea, but then again what isn't he hopping mad about? That's his shtick. Larry Summers would piss too many people off. My sentimental favorite would be Paul Volcker, but if you watch a bit of the video below with "I hit my face when I fell to protect my new Iphone"-vintage Charlie Rose, you see he's probably not got the vigor to stand in front of the mike that much and do battle with Henry Waxman. But, hey, Robert Rubin may be fully unemployed after this week, if Citi continues its current trend.

Paulson futures

Hank Paulson is nothing if not amusing. Think of how far he's come in recent months:

• Lets fire up some covered bonds, like the Europeans do. Keep risk on banks' books.
• (Chaos ensues)
  
• Lets buy up those toxic assets! I'll have my friend shiny Neel figure it out.
• No wait. Lets inject liquidity directly into banks. Like the Brits did, except with no preconditions.
• OK. I've done enough of that, lets concentrate on consumers: mortgage relief, student loans, auto loans, etc.
• Uhh, actually, lets leave some money for Obama, he's the man with the plan
• We'll fart out 85, 37.8, even 25 more on better terms for AIG, but 25 is much too much for Detroit
  

Intrade should open futures markets day to day on what he's going to suggest. I'll bet tomorrow he'll change his mind about Detroit. Or maybe he'll take money back from the banks, since capitalism is working just fine, thank you.

Deflation in the Fall, again

Deflation is one of the big words of the month. It's freaky, but lets recall that the deflation trumpets were sounded vigorously as recently as the Fall of 2002. The Economist wrote, at that time:

"America's recovery is stalling, as consumers tighten their belts. In the euro area, consumer and business confidence are both on the wane. Although euro-area inflation is above the 2% ceiling set by the ECB, weak demand will push inflation down next year. The case for interest-rate cuts in both America and the euro area was strong, even though the ECB has not yet moved. But will rate cuts work?

Most policymakers in America and Europe blame Japan's slump on mistakes—which they can avoid. An alternative view is that much of Japan's economic sickness is the inevitable after-effect of its bubble in the 1980s. Asset-price bubbles tend to be followed by periods of weak growth, as financial excesses are unwound. The table attempts, in unscientific fashion, to assess the risks of America and Germany catching the Japanese disease."

The big difference is today, much more ammo has been expended, and fears are much larger. Indeed, the tech bubble seems relatively quaint by now. In the Fall of 2002 housing prices were plugging along quite nicely, shielding the body blow of equity markets, and we were doing battle with the Axis of Evil*, affording us a rare moral certitude.

*A name inexplicably unclaimed by an enterprising metal band.

Precinct House, Northeast Philly, 5 pm

Northeast Philly is a place all its own, straight out of Archie Bunker. One of those rare places where you can still find a substantial population of urban working class white people, Irish, Italian, Polish. Long blocks of forlorn brick and stone row houses, with lone retail establishments at the end of the block. Lots of haircutting place ("Cuts for $7") with the odd deli or lawyer thrown in.

We went there today to claim the property stolen from our house last week, what little of it had not been hocked. The precinct house, as you can imagine, had lots of character. At once down at the heels and institutional, dating perhaps to the immediate post-war period, it was straight from central casting for some verite movie no one would ever fund or shoot. We were let in through a Maxwell Smart-like series of doors to the realm of the detectives, including out detective Crum. In the antechamber to detective land, three disgusting chairs with stained light fabric seats.

Detective Crum sat in a claustrophic cubical across the hall from ancient lockers and had an old desktop machine that I had the feeling wasn't even connected to the internet. Like many of his colleagues, he had a severe buzzcut -- in his case tapering up to a Vanilla Ice like flourish, and went laboriously through all the loot he had snagged from the car of the malefactor (Oleg Namur). He took pride in his work, telling us that the perp had known Crum was on his tale in Philly and therefore had set out to bag some loot in Jersey, but in doing so had made a fatal mistake: "See, Philly here is the home of the Declaration of Independence and all that, so crooks and everybody got rights in the court. New Jersey ain't like that, they wrote laws of their own." Indeed we have.

Traffic Report

I used to have to work for every hit I got, either by writing something insightful, amusing or (yetter bet) degrading, or by trying to convey market-related wit and then sidle up to Felix Salmon for traffic (see the big spikes at left). Of late, however, my numbers have been elevated due to some insight I offered into Joe Biden's hair back in September, which many readers have happened upon via Google images. Other popular paths in include Google searches on "ACC Football Rankings", for which searchers are surely sadly disappointed by my grumpy laconicity.

I must say that all this cheap traffic, while driving my numbers up, really does nothing for me, and probably I should just yank these two posts. But I don't, because somehow I suspect that the one or a few of the random perusers brought in so cheaply might be converted in time into a real reader. But it's hard to tell. Ain't seeing it yet.

From the Annals of Crime

My wife's family has lived in Larchmont, New York, for forty years or so, and during this time they have contracted to have the New York Times delivered to their home by a certain Manor News Service, which has invoiced them regularly. As has the Times itself. If you're not suspicious already, may I suggest that you become so: the New York Times certainly employs external contractors to deliver its papers, but they don't present two invoices. This was a classic rip-off.

When my father-in-law discovered this dastardly scheme, he called up the New York Times, which had no record of him as a subscriber, despite the fact that it was billing him. The Times is, however, launching an investigation. He then called up Manor News Service, which lists its address as a Yonkers PO Box, where he questioned the bills and suggested litigation might be appropriate, the guy cursed him for being a lawyer and hung up on him. The paper came no more from them, with delivery ceasing, ironically, on the day of Obama's election.

We will be monitoring this situation as it develops and will keep our readers apprised of developments.

SAT words in motion

Here on the train home, a woman gives the conductor a used ticket: "Maam, I cannot accept a defiled ticket from New York.". She argued a bit, and he kept repeating the word "defiled," as if he were quite pleased to know it.

Ah youth! Ah consumption!

This afternoon I went in to get a haircut to get away from the drab curriculum stuff I'm dragging myself through. When I got there, I heard news from the market (which I had successfully ignored all day). And then I heard this young lady barber telling her buddy (who was sweeping the floor) that an Uggzz (sp?) outlet had opened near her sister's house: "But I can't go because I have no money! So I say, lets go Monday after I get paid!"

That's the spirit. This after I read this morning in the New York Times article about food banks and soup kitchens that "tax data show that 55 percent of Americans have no interest-bearing savings accounts to draw on during hard times. Among the bottom half of taxpayers, who make less than $30,000, two-thirds have no interest income." On the one hand, a little outlet shopping shows consumer confidence and is perfectly in line with the old "Stimulus" rationale. On the other hand, a person who has "no money" is part of the at risk portion of the populus. Hair cuts may be a cyclical commodity, but they are eminently discretionary.

"Bettering" RAM

I've been doing a little work helping a company coordinate its learning objectives for its employees with a shrink-wrapped curriculum from a vendor. I can assure you it's fun. At least I don't have to commute. Here's a highlight: "Though geared toward bettering communication and listening in a business setting, the seminar environment is casual, offering a safe and stress-free forum for self-evaluation and interaction."

So, you can imagine my delight when, at around four, I walked out of my house into a crisp, cool fall day, the leaves just right, and walked up to the corner for a cup of joe.

It was almost enough to offset the fact that our house was broken into while we were out of town. The guy took this:

• One Dell Inspiron 1000 laptop, a piece of crap I couldn't even install Windows after some guy put in a new hard drive
• One Sharp 17" flat panel TV/Monitor, which we got free from Verizon for signing up for the FIOS triple play. Unfortunately, my Dell Inspiron 710m has a hardware limitation which won't let me use an external monitor to extend my desktop, so this monitor is useless to me.
• One Skagen watch, for which I paid $100, which was so broke the watch guy at the shopping center declared it unfixable
• One Russian army (Raketa) watch, for which I paid $10 in 1998, the date mechanism of which is broken. He was undoubtedly pissed when he saw what he had (see below)
  
• A bunch of credit cards we never use (cancelled before he could use them)
• Some costume jewelry
• Keys to both our cars and the house (this sucks, but luckily my car was at the train station)

The Philly cops snagged the guy, 22 year old Russian junky, with all the credit cards on him, but no electronics. If I'm lucky, insurance will pay to replace a bunch of worthless junk.

Eddy Murphy, White Like Me

Perhaps the first historic instance of the "no doc" loan.

Saturday Night Live - White Like Me

My picks

Inaugural ball
Aretha Franklin
Pfunk
Bob Dylan
Dave Chappelle

Cabinet
David Gergen, somewhere

Back in the saddle

I had been on the verge of tears in the weeks leading up the election, knowing full well what it meant. But I was not really prepared to see that everybody would be crying. The polls told us what was going to happen, but it was hard to accept it. In my mind's eye I saw a thousand Karl Roves somewhere sneaking around in a minivans picking up some forgotten exurban demographic. As the evening progressed and the numbers played out, we knew what was going to happen, and yet...

When it did, it was still quite a moment. And there was Roland Martin on CNN, adding a little soft commentary as he battled with his tears. And there was the reverend Jesse Jackson, and Oprah, and Steven Colbert, and (it turns out) Condoleeza, and Colin Powell, and seas of people at Grant Park, bawling in shock and trying to comprehend it. And us on our couch with a box of tissues, keeping pace.

He's not just the first black President, in fact, unless I've missed something, he is the first post-colonial subject to take the helm of an imperial power, and our ability to elect him arguably puts America back in the driver's seat of history, even as China finds itself in position to depose us economically. And yes, the grassrootsness and crowdsourcing of the campaign sweeten the deal, and are what make this so special. He didn't just get elected, people really went out of their way to get him elected.

Anyhow, inspiration really peters out here. The Dow dropped almost 500 today and that bounces right off, for now. It's a special day.

The North Carolina Red State Myth

As national focus has turned to North Carolina, I've grown increasingly sick of people describing it as a red state. Yes, the dominant political figure on the national scene has been Jesse Helms, a figure once both odious and quixotic, who brought tobacco and Pentagon money to the rural areas of our state in a way that foreshadowed Krugman's analysis of the Red-Blue state divide in terms of per capita federal subsidies. Which is to say that Helms blazed a path in combining incendiary and hateful racist rhetoric with federal "earmarks", if you will, to keep a rural populace in his pocket.

I didn't grow up in that North Carolina. For us the epochal political figure was the Democrat Terry Sanford, a contemporary and peer of JFK, who as governor in the early sixties laid the groundwork for North Carolina to become a state of knowledge work by greenfielding Research Triangle Park, and driving the development of our highly regarded system of community colleges and the University of North Carolina. Later, as President of Duke University, he did fine work to raise that institution into the ranks of national leaders and, more importantly, allowed them to develop into an almost worthy rival for UNC's Tar Heels on the basketball court. He also served in the Senate for a term late in his career, but he was unable to fully emerge from the shadow of our state's bespectacled bete noire.

When people ask me why I'm not a Republican if I'm from North Carolina, I tell I'm not from that North Carolina. I'm from the other one.

The gold coast

Big article in the Wall Street Journal today over the guru who designed the risk management framework around AIG's book of CDS swaps, for which we've now extended $123 billion in credit, of which $83 bln has taken drawn. The guy's name is Gary Gorton, and he now teaches at Yale.

One big lesson is that the keys to the castle shouldn't be entrusted to academic quants who have not historically shown that they really care about earning money. The article tells us about his Gorton's collection of jazz records and other eccentricities, and how he fell into earning a million a year. Someone who's not concerned about earning money really doesn't have the instinct to be realistic about protecting it.

Certainly you shouldn't combine this type of guy with a couple of sharks from Drexel and stick them in a cozy Connecticut suburb. We have seen the havoc that region may wreak.

On the campaign trail in Pennsylvania

Steve and I rode out today to canvas for Obama in PA, since we've been effectively disenfranchised by consensus here in NJ. At the Montgomery County HQ in Lansdale, things were kicking when we got there: maybe 70-80 people either sitting at tables dialing on cellphones, organizing, or getting maps and lists and getting trained to get the hell out the door and spread the word.

On my first walkabout tour of the day, in a 90s subdivision, I caught a few people in, including a Thai guy who said he was down with Obama and a Nigerian guy who promised he was gonna call his whole family and thanked me for my good work. Five minutes later I'm walking past the yard of this big brawny guy with a porno mustache and a handyman sign in his yard, who was out on his riding mower taking care of an already clinically neat yard, which contained lots of McCain/Palin and other Republican stuff. As I walked past his yard (btw, 2100 Rittenhouse Road, on the corner of Old Forty Yard Road), he pulled over and asked me: "Can I ask you a question?" I took a couple of steps towards him, onto his lawn, and he said: "Don't step on my property." So I retreated to the sidewalk, and he asks angrily: "Let me ask you this. How can you support that scumbag?" He then spews invective for a while and then says "You need to get your car (parked 100 feet away) off of my street or I'm not going to be responsible for anything that happens to it."

By now -- heart racing a bit, for sure, palms a touch sweaty -- have calculated that he doesn't really want me to call the cops and get him arrested, so I continue around the corner to the two last houses I have on my beat. As I walk around the guy's lawn he hops back on his lawn mower (to intimidate with its manly noise?) and yells at me as I walk, but I can't hear him because his mower is too loud.

After I was done with my rounds, I came back by the guy's house. He came stomping across the lawn with me with a rake, and then set to raking an area which looked well raked while spewing expletives and insults at me some more. As I drove off he was moving his lawn signs closer to the street demonstratively. I should have taken a picture of him with my cell phone, but didn't.

Whitepages.com lists the owner of the property as one Joseph Isabella.

Fundrace.org does not list any contributions to political candidates by this name or from this address, which would seem to imply that the occupant's political expressions might be limited to lawn signs and verbal intimidation.

Zillow estimates its current value to be $369,500, down about 8% from its peak, but somewhat lower than the newer homes in adjacent subdivision, including those occupied by the Thai and Nigerian immigrant families who were enthusiastic Obama supporters. The house was last sold in late 1996 for $180,000, implying an annualized appreciation in excess of 6%. Not bad, considering. Hard to track whether equity was taken out, though.

Later in the day I had a great conversation with a young pharma exec who was leaning 51/49 for McCain. I don't know if I changed his mind, but I do know that that's how the process is supposed to work.