Winner takes all, or the Mouse Folk

Through the 90s and the first decade of the century, it has become common to explain the vast and growing gap between the top decile of the populace and everybody else in terms of a "Winner takes all" economy, in which globalization and the scale of media and distribution networks make it possible to drive network effects and sales volume. Not just survival, but dominance of the "fittest", from Stephen Cohen to Lebron James to Julia Roberts.

But, as the list of Madoff victims grows from Spielberg to Wiesel to (I love this one) Marketwatch's very own Irwin Kellner to Kevin Bacon to any number of banking nitwits, the bottom falls out of this winner takes all thing. There appears to be only one "winner," and he's under house arrest. The rest take not, but rather get took.

So we're back to the Kafka scenario, where Josephine, the winner, attracts adulation from the other mice for her scarcely differentiable piping, until she's weak. Then she does not.

Lonely nights in Redmondland

Freud and his ilk have long delighted in the identity of primordial opposites. The good doctor's unpacking of how heimlich and unheimlich came to mean roughly the same thing is perhaps the most famous instance of this parlor game.

But one that slipped past him is the likening of blessing and curse, which springs most readily to mind in relation to our faithful and constant companion, Microsoft Office. There are few things which we have seen flourish and blossom in the last two decades, sprouting new features like so much pubic hair, but much more useful. And yet, there are equally few things that make us cuss so often, almost daily, which frustrate us to the verge of pathology. Especially Office 2007.

But somehow we soldier through together because, after all, Microsoft has a lock on proprietary file formats that everybody uses. Really that's all there is to it. We do it because we have to.

Whatchamacallit

Here's my brother-in-law Rob in a candy ad from the 70s. He's the smartassed one with a candy bar.

Starbucks, Mamaroneck, Boston Post Road, 4:21

The same crazy hyper-social guy is in here as last time I was here, asking everybody how their holiday was, making jokes. Even tapped me on the shoulder. Much like my dad, but closer to having a diagnosis.

Master DJ Starbux spinning milquetoast pop same as ever, in this case crooner John Legend, who has lifted a well-known Mark Knofler lick and sings like Sting on top of it, and acts like he should be given a biscuit for it.

Meanwhile, on Facebook, I trailed Michael Morand through what looks to be a cool Gilbert and George show at the Brooklyn Museum.Gotta love 2.0.

Speaking of, I was moved by the personal appeal from Jimmy Wales to donote money to Wikipedia. They've been slow to raise $6 mln Obama style, and if anybody deserves a little donation, Wikipedia does. Where would we be if we had to go back to Googling things to do basic queries? That's a donation that will pay for itself lickety split.

Yule love it

After a calm day of work with no one
else in the office, Metro North
almost has me to my holiday home,
where I will not need to feign
surprise when my children open their
presents: I have absolutely no idea
what Santa has gotten them, though I
can make certain predictions:

* There will be plastic
* Some will be made in China
* I will have to assemble and

figure our packaging
Let's check back on Friday.

Tunnel Vision

Despite the holiday coming up, am living in MS World, from Word to Powerpoint to Excel to freakin Outlook, bullets, tables, bold, italics.... the whole nine. Boring as hell.

And our little document keeps right on growing. Soon it will be marked up with the blood of unsuspecting holiday readers, and then we will compile the bitch, print it, bind it, and send it on its merry way. The great cycle of nature will continue... for another paycheck, at least.

Out on the Turnpike today nothing of note. Traffic, but what do you expect?

In the markets, I'm encouraged by the continued progress of the Ted spread (the spread between 3-month Libor and 3-month T-bills), which everybody was treating like something to take seriously back in October and now only a few bloggers seem to care. Banks are getting more and more willing to lend to each other, it's just that the generalized arm-waving and hair-rending of every freakin talking head in the world has got it to where nobody will buy anything, not even a shake to go with that burger and fries.

Suburban man lost

I went downstairs at 12:05 to get a sandwich and the crabby guy who works the sandwich line in the deli next to Deutsche Bank was like: "Sorry, man, we're not open for lunch yet." Did I mention it was 12:05? So I went outside to the schwarma cart and the guy is hard at work grilling up a batch of instalamb. Finally a guy down the street had some schwarma going on, but I had to walk around and it was cold as the dickens, I tell you.

Is this what they mean when they say Wall St scorns the retail investor? Seems like it might be.

NJ Transit, NE Corridor, 5:43 outbound

Today on this rush hour train I was in a car that was maybe 20% full. Now, lots of people stayed out because of snow (and the scarcity of transactions) and I had to walk back a car to get to the one I was in, but all that notwithstanding, that's an empty car. In general, the trains are hauling fewer people. Today on the 7:43 inbound I had the seat next to me free for my bag and papers. On the 6:46 inbound earlier in the week, same deal. For either of those trains in 2004-2007, you woulda had to have been queued up precisely and asserted your way into the boarding passenger flow to get a seat at all.

No doubt about it, macroeconomic shit is fucked up here in the metro area.

At the Olive Mays market on Nassau St, shelves are freakishly bare. OK, the store kind of sucks, but they've got a buit in walkable customer base, it shouldn't be hard to make money there, and here they are unable to fund inventory. That's just not good.

Back to East Setauket

My luxuriously speculative post on Renaissance Technologies, the meat of which is below, got some attention quick. In fact, about an hour after I posted it, it got its first hit from a server in East Setauket, Long Island belonging to a certain... Renaissance Technologies. Which means that RenTech is running a proprietary bot to scan the web or just the blogosphere. It found my blog long before a Google bot from Mountain View trolled by. Most corporations -- for example our old friends TIAA-CREF -- outsource this kind of brand vigilance to other firms, but quant funds like to develop and manage their own technology.

So who's next? Who's another big fund that's opaque, has an incredible mystique and is hard to get into, and gets unbelievably consistent results. How about Renaissance Technologies? What, everyone will say, Jim Simons is a genius and he hires only quant nerds (a syllogism if ever there was one), who are incapable of guile, right? Where Madoff acted smooth by appearing to charge no fees, only collecting commissions on the brokerage side, Simons' fees -- an incredible 5 and 44 -- could just be another way of projecting specialness and uniqueness.

Felix Salmon points out that Fairfield Greenwich is a feeder fund for RenTech as well as Madoff, which certainly doesn’t convey a rigorous stamp of household approval, given the laxity of Fairfield Greenwich’s "due diligence."

As to the other affinities between quant funds and Madoff, consider this. Quant funds, while not necessarily inclined to criminality, are intensely secretive (IP, indeed). I remember talking to a guy from one quant fund who said that the place was so tight lipped that two guys worked on a desk together, developed strategies together, yet one of them got married and didn't tell the other one until he let it slip eight months after the fact because his partner "had no need to know".

The actual probability of RenTech being fake, despite my fanciful conjurings, is negligible. But the probability is less low that there will be fraud turned up at a seemingly pure black box quant shop. Unless there’s already been one that I missed because I was too busy working.

Crowdsourcing Obama security

Reading about preparations for the inauguration and how hard it is to do interagency coordination, makes me think about how blogs and wikis could be used to enhance awareness of threats.

There could also be a risk of spreading disinformation, but presumably a wiki could mitigate that.


In other news, got an Alaska quarter today and put it in Natalie's quarter map. Now all we need is Hawaii and we'll have the nifty fifty. Which is huge.

Who's next?

I don't know why I'm surprised that Bernard Madoff lacked the decency and integrity it would have taken to kill himself. Clearly he's not Japanese.

So who's next? Who's another big fund that's opaque, has an incredible mystique and is hard to get into, and gets unbelievably consistent results. How about Renaissance Technologies? What, everyone will say, Jim Simons is a genius and he hires only quant nerds (a syllogism if ever there was one), who are incapable of guile, right? Where Madoff acted smooth by appearing to charge no fees, only collecting commissions on the brokerage side, Simons' fees -- an incredible 5 and 44 -- could just be another way of projecting specialness and uniqueness.

OK. RenTech files 13fs. Could they not be faked? I dunno.

Dance revolution

What can I say. This came to my attention via the New York Times Magazine, somebody remarking on having found it on their 14-year old's desktop or bookmark list. The song is cool, you can tell immediately the band, Tomboyfriend, is Canadian because they're so beholden to The Arcade Fire. But then, on Myspace, they don't cite their Montreal predecessors as influences. And their other songs suck. So how did the editor find this gem?

In any case, all these clips of teenagers frolicking around takes you back pretty good. It's rather unartificed and heartening.

Gaps in the big fabric

Just when you think the internet and YouTube have everything you'd ever want to see, you find gaps. This evening, I found myself wanting to sample Bill Russell hosting SNL back in what turns out to be 1979, where he did a skit called "The Black Shadow" parodying Ken Howard's The White Shadow. Howard plays a liberal white coach who comes to an inner-city (pre hip-hop) high school and coaches a team to an understanding of discipline, manners, and not getting chicks pregnant. He bails them out and plays the father figure.

In the Bill Russell segment, Russell plays a black coach who comes to a suburban high school, where his players teach him the value of discipline, manners, and not getting drunk on cheap ripple. Russell will hear none of it and blames it all on racism. In the classic climactic scene, he turns to his mom -- also black -- and says that she doesn't love him because he's black. It verges on being Chappelle-like.

Hanging the lights

Graham and I have just put the lights on the tree.  As I always have, from days growing up in NC, I hung them counterclockwise.  This year, I noticed a suspicious tendency of the lights to bend inwards and the clips of these strands (from some Arkansas-based retailer whose name I can't recall), to be on the outside.  I recalled this phenomenon from years past, as we've had these strands since we've been in NJ.  And it occurred to me that they were, in fact, designed to be hung clockwise.  Too frickin late for this year, I'll tell you that, as Graham and Natalie are all revved up to do ornaments.

Tales of Moscow

Reading the Economist's survey of Russia on the country's demographic troubles -- high alcoholism and low life expectancy and birth rates -- reminded me of Katya, friend of my roommate Oleg on Ulitsa Vavilova back in the day of my dissertation. Katya was rail thin, maybe 26, a student at a theological seminary (like they would ever let her be a priest), mother of four with a junkie rock and roller husband. In the afternoons she would often come by the apartment just to sit around and smoke. It was kind of a pain in the ass, but I understood -- it was the only place she got any rest in that smoky, dusty, chaotic capital that was not so long ago likened to a big village.

One day Oleg and I went out to the "suburb" where she lived to get something, maybe an old TV they needed to get rid of because it was taking up too much space in the "one room" apartment. That is, one room plus kitchen and bathroom, for a family of six. So we took the subway to the end of the line, got on a rickety old bus, walked half a mile to a typical Brezhnev era building, wrapped a television in some stout wine, drank tea with Katya and her mother and maybe bought her husband some cigarettes or something, and reversed those steps to get the TV back home. Good livin.

Wall Street acrumblin down

So we were low on paper at the office the other day, and Alan headed out to the nearby Staples on to buy paper. Then he calls back up to the office, confused about the location. Turns out, it's gone. Staples axed the branch for whatever reason, same store sales are down, it's got another location 8-10 blocks away. Point is, Wall St can't support two Staples stores. Chew on that.

Take him out back and shoot him

That's what needs to be done with Blagoevich.

As time drags on the threat of armed insurrection in the United States feels less and less distant. People have been buying a lot of guns, theoretically at least to outrun changes in gun law under Obama. From what I see out in the comment boards of news sites, that's not what a certain portion of the populace has its mind on.

Ill tidings

My firm has a meeting monthly where we wow one another with our powerpoint skills and witty repartee, and it's always held in the same place, a conference center and restaurant right nearby, the Bull Run. Imagine our dismay to learn that, on minimal notice, we weren't meeting there because the place had filed for bankrupcy. Gives a whole new meaning to "breaking the glass".

Which is actually fine because I was pretty much sick of their food, though the sliders were OK and the chicken quesadillas perfectly edible, and last month they even broke out crab cakes, by gum! And the french fries were, by repute at least, quite tasty. Alright, I suppose it could have been worse. It could yet prove to be.

The Rabbit of Seville

Pulling that martian Bugs bunny footage the other day inspired me to dig into the YouTube archives for Looney Tunes and show it to the kids. The cartoon below, whose title is above, is far and away the favorite for them, particularly for Graham, who can scarcely sit still when he watches, running instead across the room and banging into the wall. Admittedly, he does that for lots of videos.

You heard it here first

So NBC wants to move Jay Leno to a 10pm slot, we're told. There are lots of reasons to do this, including, importantly, that it's cheaper to do live TV than to do dramatic serieses. But just as much of a driver has got to be that the population is aging. The baby boomers are starting to retire, and why should they have to stay up till 11:30 or whenever he's on to watch his rapier-like zingers? I think they should move him till 9.

What if Blogger goes down?

A good day in the markets, I'll take it. But still, these days I find myself looking around at aspects of my life and thinking: is it bubble, or is it not?

It is disquieting at times to think how the contours of my for-profit career conform with those of the bubble: starting in April, 2000, weeks before the first big down day of that correction (last one in the door), ending... well, hopefully not soon.

Through the housing bubble we all looked at house prices and said "this doesn't seem right." It was standard dinner party fair, giddy with disbelief over how paper rich we all were. So we knew it had to end, we just didn't want to be right.

And now, when I think of the things that seem bubblelicious, the first thing I think of is social networking: Blogger, Facebook, MySpace, LinkedIn, Wikipedia, YouTube all this great stuff we get for free and take for granted. Where are the business models? We have to look at 2.0, with its largely unfounded business models, and say it also doesn't seem right, though it feels so right. Mark Zuckerberg at Facebook wanted to let employees cash out a little stock at a valuation of a quarter of what Microsoft bought a stake for last year, but he had to cancel it because even at that level he couldn't find buyers. Facebook offers Twitter $500 million but Twitter says no because it has a secret business model? Please. LinkedIn stands on its own, and maybe blog engines cost nothing. Wikipedia has been slowly trying to crowdsource $6 mln for weeks, and it's coming together step by step.

Seriously, where would we be without this stuff? I'd be hurtin.

What else could go?
Municipal yard waste pick-up?
Address stickers from charities?

Seriously, we get a lot of free stuff now.

Very angry

So this is my first post using Mary's sleek new Mac, which replaces the piece of shit Dell that we bought 2-3 years ago and then froze up and died for no good reason whatsoever, save for the fact that it was a piece of shit Dell.  This thing is nice.  It looks nice.  It sounds nice.  I even think they might have injected it with new car smell.

But I am quite angry with how ornery it's being about hooking up the native email client to Verizon.  It made me angry, very angry.  When I found the instructions at Verizon (placement was not intuitive), they were pretty simple and straightforward.  Servers should be incoming.verizon.net and outgoing.verizon.net.   Not rocket science.  But the program doesn't want to talk to the server.

I mean, I've got a connection, right?  I'm typing over it right now.  It should work.  What do I have to do, go out and snag a freeware email client right off the bat?

For an explanation of what I mean when I say that I'm "very angry," watch the classic bugs piece below starting at about 6:15, if you can't watch the whole thing.

Things fall apart

Deferred maintenance, that one time bugaboo of university campuses, has set in in the office hotels of Wall St. At least ours, that is. As 2008 has dragged on, the place has been slowly depopulated, dropping from maybe 85% occupancy to perhaps 55. So revenue is scarce, and the 2nd law of thermodynamics has kicked into gear.

For some time now, the sensor that you walk under when exiting the secure area into the elevator and rest room lobby has been broken. You have to press the button on the wall. And you have to really press it right.

The carpet by the leatherette sofa is worn and rent in one spot.

But what beats all get out is the bathroom stall enclosure on the floor below ours that was ripped from the wall up by its upper hinge and leaning precariously. The nice young lady at the front desk was not aware of this, but she smiled and dialed when I told her it was a lawsuit waiting to happen.

And yet, there are signs of life in the old hotel. This afternoon a happy lot of polycultural folk took occupancy of a couple of vacant offices near us, and I saw other prospective tenants being given the tour. Have they had to dramatically reprice? Not unlikely. But it's good to see new faces in there, even if they're going to compete for space with us. I may just make them a casserole.

In the trenches of the credit wars

My cell phone rang this afternoon and I picked it up, surprised to see a 202 area code. Imagine my surprise when -- after hearing a few beard follicles brush roughly against the mouthpiece at the other end -- a distinguish male voice introduced its owner: "Hi Graham, this is Ben Bernanke, do you have a minute?"

"Why... sure," I said, not really knowing what was next.
He continued "I just wanted to reach out to you this afternoon to see if you had any credit needs that I or the Federal Reserve might be of service with. Is everything OK with your mortgage?"
"Um.. yeah"
"How about your Home Equity Line of Credit, your car financing, your student loans, your credit cards, is everything ship shape?"
"Pretty much, considering"
"Spot on! Glad to hear it. Let us know if we can in any way facilitate any uncrunching, you know, any tools you need to leverage to deleverage, alright?"
"You know I will, yes sirree"

A Profession of Faith

The other day it was snowing lightly early in the morning and Natalie stood by the window bursting with energy and excitement: "It's snowing for the second time and it's only November, and this time it's real snow, unlike the snow in October."
Perplexed, I asked "What do you mean?"
"Well," she says, "In October the flakes were to big and wet, but these are small and snowy." As she bounced along in seventh heaven, it occurred to me that she had absolutely no idea that the financial world was imploding around her, and that this was entirely as it should be and it meant I was doing my job right.

Nor did I understand much, when I was her age and even much older. I remember lines along Airport Road to get gas back during the gas crisis in '74, but I thought that was normal. I remember in 1979-1980 reading about how American competitiveness was suffering next to Japanese and German industry, but it was all very abstract and didn't really concern me. I vaguely remember Son of Sam, but I fully remember Fernwood Tonight and David Letterman's daytime show.

It is only now that the economics of the late 70s and early 80s have come into focus for me. And so, in 1981, in the midst of a recession, after her business was destroyed by the Reagan election, with a husband who'd sooner pull into the driveway in a surprise sports car than contribute to paying the bills, it seemed entirely natural to me that my mom should send both her kids to England, then Switzerland, including the Diana-Charles wedding. And only now do I understand what it took to pull the trigger and assume the cost of sending us over there, and what it meant from an "asset allocation" perspective.

Chew Your Grouse

Eat your pineapples, Chew your grouse, Your last day is coming, You bourgeois louse. -Mayakovsky, 1913

I wrote my senior essay in college on Mayakovsky (with Esenin thrown in on the side). At that time -- rattled by my parents' divorce, disillusioned with Reaganism and the absence of a good path of resistance, threatened by AIDS, terrified of the prospect of getting a job, entranced by the ladies -- the boisterous eschatological vision of Russia's most energetic, all-embracing and snazzy avant-garde poet held a lot of appeal. And much of his early work, like the "chew your grouse" poem, focused on arresting the cycles of bourgeois being, on bucking against continuity. Another famous line was "I love watching children die." I thought that was a little strong, but that's what he was like.

And when, after the Revolution, Mayakovsky channeled his dynamism into an inferior body of work that nonetheless captured the real excitement of the era, that was cool too. Here's a passage from his 1928 poem "The Story of the Pipe-Fitter Ivan Kozyrev, Upon Moving into his New Apartment"

Vse khorosho. No bol'she vsego mne ponravilos' -- eto: eto belee lunnogo sveta, udobnej, chem zemlia obetovannaia, eto -- da chto govorit' ob etom, eto -- vannaia.

It's all good. But what pleased me most of all is -- that: that whiter then the light of the moon, cozier, than the promised land that -- and what more is there to say about it, that -- bathroom

The bolded parts of the Russian text show that, with a characteristic virtuoso turn, Mayakovsky had rhymed "bathroom" with "promised land" because that was really the deal: for Russian peasants who had lived in huts with outhouses for all too long, indoor plumbing and heating was huge, it was in fact the promise of the Revolution. And so, Mayakovsky came back around to touting the virtues of certain basic bourgeois comforts, and recognized there was almost transcendent value in them.


However, the Revolution was not going all that well on all fronts and, on April 14, 1930, Mayakovsky blew his brains out.
2008

At the other end of the spectrum, America came over the course of recent decades to believe that Granite countertops and manifest destiny were in their own way interchangeable. The chicken in every pot had to be free-range and the pot Williams Sonoma.

And yet, if I look back to 1981 and compare how we live now to how we lived then, in every way we live better, and no matter what the indices do in coming weeks and months, all of that's unlikely to evaporate. We will still have the internet, and netflix, and extra virgin olive oil, and sriracha, and cars that hardly ever break down, and better math instruction, and so on. With good leadership in the White House, there's hope for progress of some sort, if not immediate economic solutions.

And so I find myself at peace in the land of Cheever, and find that the perpetuation of the middle class -- what was called "reproduction of the social means of production" during my Marxist phase -- is as high a calling as you'll find.

But it's also a pain in the ass.

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.

The Race speech

When the whole brouhaha with Reverend Wright happened back in the spring, I was kind of caught up in the whole Bear Stearns thing -- which seemed at the time to be shocking -- and commuting to Manhattan and all that, so I missed the race speech. Now, as we come down the to the wire and I'm going to canvas tomorrow in PA, I thought I'd watch it during Trick or Treating time.

Pretty astonishing. Politicians just don't speak like this. Obama is an oracle. He stands up there and says stuff the rest of us dare not say, and he does it while running for the Presidency. That speech wasn't vetted by numbers crunchers, there was a lot of risk in there. He's smart, he's rhetorically strong but wonky too, and he speaks from the heart. The only thing I figure he can't do, since he's kinda bony, is box out. It's exciting to have someone who's really worth voting for.

Palin's First Amendment Rights

I don't usually like to recycle things from the mainstream blogosphere here at the Grouse, but this weekend, at this juncture in history, it's hnrd not to. The Huffington Post reports that her highness Palin is complaining that her First Amendment rights are threatened by the press's objection to her ads about Bill Ayers and Jeremiah Wright.

Say no more. It's embarassing to live in a country where people think that someone so utterly bereft of anything commendible could be veep and perhaps prez. Long may she live in Wasilla.

Race baiting

By race I mean political race, not race race, and the bait, this time is ExxonMobile's record profit announcement: $14.8 bln in Q3. Obama broke populist this summer -- in a move I did not approve though it doesn't dissuade me from supporting him this weekend by going door to door in Pennsylvania -- and proposed in the middle of the oil price run up that we tax oil companies aggressively on their record profits.

I think it's a bad idea for a number of reasons that I don't have time to talk about (it's like taxation market timing, does not guide future economic activity rationally), but right now, in the middle of an economic hysteria, those big fat numbers are just dangling there like grapes. Lets hope Obama lets them wither on the vine. Of all the things that freak people out about Obama: he's black, he has funny names, etc., the one thing that could be pushed successfully in skillful hands is that he's a "redistributionist." That charge legitimately invokes a set of core values that have been successfully marketed to the American populace for the last 50 years. Never mind that these values contradict other core values that have been prevalent at other times in our history. Reconciling that contradiction is a longer term task, and one Obama is ideally suited to. He doesn't need to jump on ExxonMobil, and lets hope he won't.

In the elevator

At 10 am I was in an elevator at 32nd and Broadway, and there were 8 people in there and none of them was speaking English. All Spanish and Korean. On a blustery October day, in a rinky dink elevator in a building full of costume jewelry wholesalers. Now that's America for you, that's what I'm talking about.

From Motown to Nashville

As we gear ourselves up to next Tuesday and an opportunity to pound a stake into the feeble heart of Reaganism's cultural legacy, it's worth looking back to think about what we're killing. Back in the 60s and 70s the gulf between black and white culture wasn't nearly what it is today. In 1979-1980, as many white people will remember, rap songs featured lyrics like: "He was roly was poly and I said holy moly, you got a lot of whispers on your chinny chin chin" or "and since kindergarten I acquired the knowledge, that after twelfth grade I went straight to college."

But the two cuts below speak volumes. First here's James Carr performing "The Dark End of the Street", a song he wrote in 1967.


Flash forward to 1968, and here's Porter Wagoner and Dolly Parton covering the song.


A couple of things are noteworthy here:

1. Look how close the cover is to the original, it's not drastically changed. The difference between country and soul wasn't huge, just like Motown and Nashville are only 500 miles apart, even if Brown vs. Board of Education and the Voting Rights Act were really just taking hold.
2. As an addendum, listen to what Porter and Dolly are singing about. Stealing away to the dark end of the street? That's acknowledging physical desire out of wedlock (just like Palin's daughter). The Christian right would not be down with this, and I don't know where either of them would stand on it today.

My point is, if I haven't hammered it home forcefully enough, that black and white America used to have a whole lot more in common. The divisive "let them eat jellybeans" attitude of Reaganism drove a wedge through popular culture and popular consciousness, and now with a little focus and effort, we may hope to return to a time where more black and white Americans see each other as something like humans.

In lieue of something substantial

I had planned a substantial post today, but was interrupted when my buddy Dwight skyped me from Rio, so we'll make due with three cheers for Charles Barkley declaring his intent to become governor of Alabama (why wait till 2014, I ask) and the bagatelle below, sent in from Katherine Davis (now Williams). Note how close Whitney's phrasing is to Dolly's below on the chorus.

I Will Always Love You

Gloom, Despair and Agony on Me

A new theme song? Seriously, Hee Haw came to mind while listening to this new Porter Wagoner CD (some good songs, generally trying to slipstream off the later Johnny Cash stuff)I got Mary for her birthday. But seriously, after Nascar Democrats, Sarah the Hairstyle, and Joe the Plumber, it's easy to see how a remake of Hee Haw might make business sense in 2008:

• It has a ready toolkit of folksy rejoinders to economic downturn
• It's as cheap as reality TV
• It has a history of T & A in skimpy costumes
• You could do it at the Grand Old Opry and get box office revenues, or even build another Grand Old Opry in Vegas or Branson
  

Official Endorsement of Barack Obama

At this point in time, for no better reason than that I forgot, I would like to convey my official endorsement of one Barack Obama for the office of President of these great United States of ours in the upcoming election.

Though he is occasionally too wonky and pauses more perhaps than he should when speaking, and though he has never quite hit the rhetorical home run that he did as the "skinny kid with a funny name" that he hit in 2004, the guy rocks. Finally, a Democratic candidate we can actually both trust and be excited about. It's been a while. Compare the Grouse's second post, four years and change ago on the occasion of a Kerry / Bush debate.

No no, Obama is the real deal. I plan to canvas in Pennsylvania the weekend before to make sure we stick a nail in the W coffin. And maybe we can purge the Christian conservatives wholesale and get back some Republicans worth arguing with.

Cold winds a blowin

Was at a small hedge fund industry do where the panel droned on and on about the credit crisis and how bad it was gonna get and finally somebody asked an obvious question: where's the alpha these days? Where can profit be made? And of course, nobody had an answer, though one of the guys on the panel was actually buying up loans and helping homeowners restructure and refinance them within an FHA program, which is actually the kind of thing you like to hear.

But really, there are few good answers out there, and in the absence of good answers the question is: what about those fees? How can hedge funds charge the fable "2 and 20"? Who wants to pay Steven Cohen 3% to sit in cash? And indeed, we're hearing more and more about pressure on hedge fund fees. One guy I was talking to was talking about doing away with incentive fee altogether in a fund of funds, with a 1% fee. Which starts to sound mutual fund like.

I think the hedge fund industry is going to pull back from $1.9 trillion under management to $1-1.2 trillion, and a third to a half of the funds will shut down. When its assets go down far enough, new strategies will emerge and they won't be so crowded. The money that gets pulled from hedge funds will flow back to equity markets in indices, or to fixed income, or to real estate, or to Subway franchises, but the fee layer will be taken out.

A little smug

I must confess that, although I keep watching it, I am beginning to tire of MSNBC's evening line-up, Rachel Maddow and Keith Olberman. They are, perhaps, a little too smug right now, too delighted with Obama's lead. I consider it a little jinxie.

But I do kind of love Rachel Maddow. She has a winning smile and she don't take no lip. She just talks right over mofos. Though Pat Buchanan gave her a taste of her talk down medicine this evening, no lie.

School Pride

At Natalie's school they're having a contest to come up with school slogans. Natalie's was one of the two selected by her class to go on to the schoolwide competition:

"A gem of paradise"

The other winner -- collecting one more vote only because Natalie wouldn't vote for her own -- was Evan's "Up to bat, cuz that's the place that we're at", or something like that.

I'll leave it to my fair readers to determine which is the true winner.

In the woods

We don't have much of this in our neighborhood, unlike Glen Heights. So it's kinda cool to get Graham in the woods.

Singing in the shower

Natalie at times can become quite growly when directed to shower. Once there, however, she stays for a while, and she sings happily.

When questioned, she denies singing, though she hums the same thing at the dinner table.

Soccer in fall

Out on the soccer field today, with the leaves turning off on the edge of the field, was as close to being back in the glory days of high school as it gets. Except for the inflammation in my knee which made me slow and gimpy. Or the fact that I kept launching shots over the cross bar and the Chinese guys were totally making fun of me and I had to run shag the ball. One thing's for sure, it was a graphic reminder that being in tennis shape and being in soccer shape have almost nothing to do with one another.

Later, we started watching 4 Months, 3 Weeks, 2 Days, yet another Rumanian new wave flick. I was hoping it would match the others that preceded it, The Death of Mr. Lazarescu and 12:30 West of Bucharest, but it doesn't. Or rather, it is good, in its hyper-naturalist way, it's just so tension-provoking it's hard to watch. We stopped just before the abortion scene, lacking the guts for all that pain and blood, but after the blonde friend has sex with the abortionist to make up for the fact that they're short on cash.

My new investment strategy

After years of investing like a buy-and-holder but spending my days like a day trader -- checking market status intraday by having Marketwatch as my home page and looking at it from time to time -- I have embarked upon an ambitious new program of intraday ignorance.

Yesterday someone mentioned at lunch that the Dow was down 400, but I can't be faulted for that. By day's end it was off 733, but I'm sure I was more productive by having stayed in the dark. Today, I rationalized and let myself check at 11ish, and it was down 300. I didn't check again till 4, and it was up 400.

I think I actually did get more work done, but in the last hour or so I have allowed myself a few blogs. In general, I know that it times of such volatility as we're having, ignorance is bliss.

Graham can read?

I've been suspecting that Graham can read for some time, particularly after he seemed to be sounding out the words in the 100 Trucks book in Larchmont this weekend. Today he actually picked up Mary's grocery list and read it. So I guess he's reading now (Mary's actually not sure he hasn't somehow memorized it)

He also had a very cute word tonight. He was hungry before dinner and said that he needed to be fed "more quickerly." That's a keeper.

Flatlining out of the gates

McCain is tripping... over himself. "They're hurt and they're angry, they're hurting and they're angry blah blah blah Fannie Mae Freddy Mac caused this subprime mess..." He's totally knocked off whatever kilter he may have had, I'd call it stream of consciousness if he had consciousness to stream. He's flatlining, politically.

And he's blinking uncontrollably too. What's up with that?

Moreover, who gave the green light for McCain to indiscriminately interrupt Obama and speak under his breath "to the American people" while Obama had the mike. That wasn't a real winning move.

And who dressed McCain tonight? A black tie with a black suit for this cadaverous white-haired guy. Isn't that setting him up to play Nixon to Obama's Kennedy?

Recessionary indicators

Five weeks back I wrote that the presence of samples in the supermarket and the relative low frequency of local ads on cable television were not indicative of a recession. Now, although I had some nice crab dip samples in the Super Stop N Shop in Larchmont over the weekend, but there were no cookie or muffin chunx in the baked goods area. And I must say that I'm seeing a lot of local ads on Verizon Fios out here in Jersey, and during John Stewart, no less. Some cardiac surgery center out in Doylestown, PA, Rutgers Football. During John Stewart, I tell you.

5:43 Northeast Corridor Express

The woman sitting in front of me talked on the telephone non-stop for 35 minutes. Usually that would annoy me. This evening it did not, because she was a bank lawyer working with an associate back at the office on putting together a short-term line of credit or somesuch, saying things like: "We're not gonna fund them for more than 60 days and we're not gonna even put that in writing, we're gonna structure it as an overnight...." and then a lot more mumbo jumbo, but clearly credit was being extended. Which is good, for now. We can tax it back later.

Ghost town

At the end of another historic day on Wall St (one we could like, for once), the street is a ghost town at 4pm, when your constant correspondent stepped out for fresh air, a seltzer and dental floss. At lunch, the schwarma cart guy told me how slow it was. At 4, all the carts were atypically gone, and the sidewalk down past Deutsche Bank was uncommonly clear.

Could be that a bunch of people have Columbus day off (JP Morgan Chase commercial bank people, for instance). Or it could be that people are sitting at their desks, humbled, thinking about how their enthusiasm for whizmo gadgets (in this case, derivatives) quite nearly brought the world to a standstill, and how we may just live to tell the tale.

So we can get back to fighting the real problem, which is global warming.

Nobel for Krugman

I saw the guy in the tunnel beneath the 2/3 at Penn Station wearing goofy shorts a few weeks back.

Who knew he was still working as an economist? I thought he had gone over almost entirely to writing tendentious pro-Democrat op-ed pieces in the New York Times.

It's not that I don't agree with most of what he says, I just think there are other people who can write that stuff while he has demonstrated, from the time I first read him when he had a column on Slate in the mid-90s, a singular ability to articulate complex economic issues in a way which is accessible to the non-specialist reader, and to not prejudge the issues. In short, he can present questions, positions on them, and contradictions within them, without force-feeding answers. He is rare in his ability to do so, and he debases himself as a continual purveyor of certitude.

Congratulations, in any event, are in order. He's a good guy.

Wall Street

With the exception of the sledgehammers and construction equipment and reporters, Wall St is rather a quiet place these days. Today, insofar as the time-space continuum did not implode, there was relative relaxation out on the street come Miller time, where until recently people have seemed amped up enough to pull out other peoples' hair along with their own.

Yesterday, in a sign of perhaps a new era dawning here in the estwhile capital of finance, there was a new truck on the corner on Wall and Williams Streets, a shiny red track, selling dumplings. This is indeed a new and welcome addition to the legions of schwarma carts ("white sauce, hot sauce, boss?") which grace the nabe. I have not yet had the dumplings, but you know I'm gonna.

There have been more tourists than ever here recently. If this drama follows the path of 9/11 and we end up with a big hole in the ground, perhaps people will come from MittelAmerika and gape at that crater and throw roses and American flags at it, with tears in their eyes and mustard on their pretzels.

Demons

I will confess...

that I have roamed the blogosphere, and the financial press, seeking to understand just what the hell is going on out there, and that in the course of so doing I have come to haunt the comment boards of Marketwatch. And there I have been exposed to all manner of yahoo freemarketier neo-anarchist lunacy, Joe Sixpacks who have bashed one too many cans against their skulls and revel in the financial chaos that may soon deprive them of their paycheck if not more. People are so very angry out there, angry at the fat cats and weasels that they're happy to see the whole economy come crumbling down just to see the Gucci befooted get their comeuppance. Which is crazy.

...and, ever the rosey-eyed optimist, I have tried to argue rationally with them, and have thrown out the blue state plaints that nobody dares voice in public, but resistance is as quixotic a task as I could be picked, and I find myself progressively warn down and inured to visions of financiak armageddon, to the accompaniment of Brooks & Dunn.

Greek television

While I was in Greece I watched some TV in the hotel room, as I am oft want to do. A couple of highlights:

• JLo was in town and being interviewed by some older sleazy dude in a black silk shirt on something like the Greek "Sabado Gigante!" She was telling him all about her recent triathlon, about swimming in the ocean and how it was a bit freaky and he goes: "So you were concerned about the sharks, eh? I bet they know just where to bite you, just where the tender places are..." Larry King would not have broke it out like that.
• A Greek band doing a rap cover of "Smells Like Teen Spirit", in some other "Sabado Gigante!" like context.

Other than that, very little going on.

Steve Forbes on CNBC

Steve Forbes is such a weasel. Why does CNBC have him on at all? First he's up there crying for Mark to Market accounting to be suspended so bankers will be more comfortable, then he and Jack Bogle of Vanguard are going back and forth in a predictable manner, and Forbes asks Bogle something like: "If equity markets are like this, and the economy is like that, what can we do for the (he stopped himself from calling them "poor bankers") who are huddled scared over here in Treasuries? What can we do to make them start lending again?" Portraying the bankers as the victims now. Now, I don't demonize the financial community, I think we've all been overconsuming together, but bankers are by no stretch of the imagination victims, and there's no reason to evoke pity for them.

McCain's stoop

What is up with McCain's shoulders? He looks like he's got something stuffed in there to make him look more thuggish. In general McCain is looking less and less plastic every time I see him. He has the appearance of someone's malevolent grandfather. At this stage is the game, I'd say we need a President who can give us eight good years. Not a good bet.

Anyway, with this thing getting boring it's time to flick over to one of the few good things Fox ever gave us: the Fox Soccer Channel and a game from deep in the Premier League Archives, Nottingham Forrest vs. Queens Park Rangers from October, '94. Rock and roll, lots of good goals.

What I've been doing with my portfolio

These days are truly stressful, with the whole financial world going berserk, and I am not immune to the emotional backing and forthing of the markets. I promised myself I'd buy at 10,500 but couldn't bring myself to do it, and then I look over today and we're below 9600 and still I can't pull the trigger, though I've upped my allocation to equities in my 401k to 70% from 40% since, perforce, my cash and fixed income allocation has risen recently.

But I haven't sold a share since last October. What I have done is this:

• Put a roof on our house (this was our stimulus money plus a bunch more)
  
• Am getting the trim painted
  
• Redid the bathroom (that was back in March, back when Bear went down, which seems cute in the rearview)
• Donated $500 to the Trenton Area Soup Kitchen. This was when I was concerned about my job and wanted to force my employer to make a matching contribution (which they did)
• Donated an undisclosed amount to Josh Stein for NC State Senate, and some to Barack Obama too, I'm pretty sure
  
• Got outbid for a flannel shirt on Ebay
• Put 19k of my 401k in a Russian mutual fund, which makes sense given my background, but has turned ugly. This I regret.
  
• Cleaned out our closets and took clothes down to donation boxes.
• Continued to feed my compost pile with as much good brown and green matter as I can find
  

Down the block from us multiple households have been doing a lot of work on their houses, including the drab green house owned by the crazy Chinese guy which moldered empty throughout the boom period.

Up in Minnesota, a high school classmate of mine is a little concerned because she's building a house and needs to sell the one she's in in the spring, recognizing that, though she bought it 10 years ago, she still might take a loss. She takes comfort, however, in the fact that she is employing the people who are building the house.

One of these days this idiocy will end.

Sarbanes-Oxley

Right about now I'd love it if some enterprising reporter would raise his hand in a meeting and ask Paulson if he still thinks Sarbanes-Oxley is negatively impacting US capital markets' competitiveness. Though it does seem like Europe is keeping up with us just fine.

Invisible wires

Yesterday David and I were riding our bikes to play tennis at the high school. There was a Princeton Tiger football game going on (vs. Trenton), and various other white people were gathered in the parking lot to tailgate with what looked to be turkey arugula havarti wraps. Pussies.

As I got through the parking lot and prepared to pull the front wheel of my ancient mountain bike up over the wee curb, I passed to the left of a cheap plastic barricade...

...all of a sudden I found the crooks of my arms gripping a plastic-encased wire as I was suspended in mid-air, my bicycle continuing on in front of me. Turns out, there was a wire going across the entrance to the sidewalk, but it visually blended into the sidewalk. There was a "Keep Off" or somesuch sign attached to it which I would have seen, but it was obscured by the barricade thingie. So I ran straight into that bitch going 12-14mph, and now have thin horizontal bruises on my lower biceps, and got a little chunk taken off of my calf by my bike, to boot. And you know I was cussing up a storm.

For all that, I still whumped David good.

Thank God I didn't hit my head, or our wives would have tried to make us start wearing helmets.

Cassandra's Dream

It's hard to figure out what Woody Allen was thinking when he made this movie, though there are young women and young breasts in it, so he hasn't strayed too far from the tried and true. In many ways he's returning to Love and Death and his youthful enthusiasm for Russian Literature, this being his take on Crime and Punishment. If it weren't Woody Allen, we would have stopped watching it some time ago. As it is, we went to bed before the "climactic" scene, such as it is. Climaxes, I reckon, get less compelling at Woody Allen's age.

A heartbeat away from the Presidency

What's all this about Joe Biden being a heartbeat away from the Oval Office. Sarah Palin is a heartbeat away. Joe Biden is a gunshot away. Barack Obama's a young and healthy man. He ain't having no heart attack.

To drive a point home

I may have stated this in brief earlier, but let me come back to this. Leading up to the passage of the Paulson bill there's been all this uproar over executive pay, and measures were added to the bill to curtail executive pay in companies getting help from the government. So people have been in an uproar over your Chuck Princes and Stan O'Neals. But they've been getting paid chump change compared to the heros of 2006, hedge fund managers like John Paulson, Steven Cohen, Jim Simons, David Shaw, people who bring home a billion or so in a good year. Or private equity heros like Steven Schwartzman and Henry Kravis. These people haul coin.

So once the shakeout of existing hedge funds gets done -- and lots of trained mid-level hedge fund people are sitting around, all the truly ambitious prop traders and bankers will cut loose and form new hedge funds. The only thing that might stop them is if institutional investors get cold feet from getting burned (horrible mixed metaphor -- I like) in the most recent generation of alternative investments.

In any case, unless the SEC or some other more robust regulator steps up and institutes more rigorous regulation, a new order of unencumbered but well-capitalized hedge funds will emerge. Not that that's all bad, but it's an unintended consequence at best.

A draw?

I'm sorry, but all the commentary about the veep debate out there that claims it was a draw just doesn't jibe with the half an hour I saw, where Palin tripped all over herself and sounded like an idiot and Biden sounded like a well-informed wonk and a politician. Hmmm, which is more suited for the job?

Check out time

Running to check out of Europamperdom after a very positive meeting yesterday. 11 hour flight back to New York, not even supported by the blessed cover of night.

Yesterday strolled around the nabe here and saw much wierdness, including derelict old houses and lots amidst densely packed high-end housing, 6 story buildings going in with 8 foot setbacks next to single family homes, primitive construction methods, immense piles of clippings piled up on disintegrating sidewalks, and a 2500 square foot supermarket which was BY FAR the largest food store I had seen in town. Everyone must drive to Hypermarkets on the freeways and/or old school bazaars somewhere. Hence the maddening traffic everywhere.

Real estate markets in the United States may be messed up, but they are largely transparent and comprehensible.

From the cloisters

So last night the Best Western Zinon. When I arrived that part of the city was consumed by something like a Sunday market, and it was pretty intense, thronged with people from different parts of the world. I got a room up on the 8th floor with a big balcony but no furniture on it, and across the way there was an old dude who had a bed set up out on his covered porch area, sitting on the side of the bed reading, partially obscured by his laundry hanging there. It was pretty good living, though this morning I saw his son and realized the al fresco sleeping may have been motivated by space constraints too.

After the crowds died back, the neighborhood was pretty cool, with a variety of restaurants and bars (including Kurdish, though they were out of everything good). Sick of grilled meat and tourist menus, I had Chinese, then I watched Inter play Milan through the window of a bar with 6 seats. There were cheap, old school internet cafes everywhere, where people from Africa and the Middle East were busy keeping in touch with home.

By now I have been transported to the five star Hotel Pentelikon in the leafy (but still chaotic) suburb of Kifasia, where I prepare for tomorrow's meeting while trying to ignore the chaos in the markets and the freakish escalation of histrionics from various representatives of the enraged masses, eager for the head of Henry Paulson and anyone else who would take their hard-earned dollars. I.e. the blogosphere and message boards which I shouldn't read, but which are nonetheless so interesting as a window into the abyss of the long-pampered American soul.

Athens, day 1

Most importantly, I got some sleep on the plane with some pharmacological help, which is a new one for me. That's how I've been able to survive the day.

Took the bus in from the airport and had a good look at how it unrolls. It's surprising to think that Athens and Greece have been populated continuously for millenia, because so very little looks like it's been planned. It has all just happened.

Once in my hotel I discovered that it is indeed in a touristy area but also that, in Greece, it's either touristy and cute or it ain't neither. At least from what I've seen thus far. What's touristy has reason to be. The Acropolis is an intensely commanding space. I hadn't picture it as being such a fortress, way up there on the fortifications. It's easy to imagine why they thought in terms of gods living up on the hills around here.

But the hotel, despite their having told me it was quiet when I called from the States, concerned that the hostel atmosphere might be a bit much, is anything but quiet. They have a big flat panel TV in the courtyard onto which my room faces playing music videos (songs from Grease, no pun intended) for the amusement of American 2osomethings (why aren't they in college). Amstel is sold from the drink machine in the courtyard, and there's a liquor store across the way, so the kids sit in there and drink and smoke. I am quickly being cured of nostalgia for the days of my youth. Tomorrow I move to the Best Western and get a AAA discount. And the early bird special, for good measure.

An allegory

Lets imagine that a water utility, as a cost-saving measure, shortened a water-filtering cycle and started pumping out water that was harmful to downstream users. At the same time, homebuilders and homeowners decided to build more cheaply and leave a filter out of household plumbing. People start getting sick. An uproar ensues.

What should be done? Is culpability the big question here? Government should move right in and assure that people have clean water, by assuming the expense of doing so and figuring out a way to get paid back. It's not a moral question, but a practical one.

People have been getting really worked up about the moral side of the current crisis. The investment banks are easy to point fingers at, because they're opaque and mysterious, but at the end of the day people are mad at them because they earn a bunch of money.

There's a fair amount of anti-Semitism mixed in here too, especially when you start talking about Goldman Sachs. How many messageboard references have I seen to "throwing out the moneylenders from the temple."

Anybody to took out an aggressive loan or did a cash-out refi and got in over their heads was playing the same game as the investment bankers. And/or maxed out credit card debt and snatched up an F150.

I have a 30-year fixed mortgage, and 1996 car with 175000 miles on it, and a portfolio all in registered product, hostage to ERISA. I'm getting raped in this deal, and I ain't bitching. It is what it is.

What have I done with my money through all of this? I put a roof on my house, donated to a soup kitchen, and am getting my windows painted, and I'm tired of listening to red state day traders whine about freedom and taxes.

I'm going to Greece.

When it rains pennies from heaven, it pours

This morning, for the first time, Graham wiped his own butt after taking a dump. And then he said to Mary: "Thank you for letting me ride the bus." How bout them apples.

Tomorrow I head off for Athens, Greece for a weekend of jet lag and dragging my sorry ass around a bunch of archaeological sites and purveyors of grilled lamb in preparation for a meeting on Tuesday. If all goes, well, I'll be returning to the Balkans for further reconnoitering.

For the first couple of nights (the ones on my nickel) I will be staying in this backpacker's dive and will resist the temptation to be lured back to the room of a pair Norwegian-Australian girls to smoke clove cigarettes and drink home-brewed Ouzo bought in a ditch on the south shore of Corfu.

I have sewed a Canadian flag on my bag as subterfuge.

A big day

This morning the school bus came and got Graham for the first time. He didn't freak out at all. He liked it. After school, the bus brought him home.

Also after school, Graham went to the allergist, where the doctor informed him and Mary that he was outgrowing his allergy to dairy, and faster than expected. This means we will be able to go to restaurants and travel like normal people. If we can force ourselves to spend the money, that is.

Natalie, for her part, went with Vivian to the shelter to help her pick out a cat. Two cats.

And Natalie's Iowa test scores came back, and they were better than I am prepared to admit here on the blog. She is rather clever, it would seem.

Somebody help me out here

The Housing and Economic Recovery Act of 2008, signed into law in July, which authorized the recent takeover of Fannie and Freddy, also provided for the merger of the Office of Federal Housing Enterprise Oversight (OFHEO) with the Federal Housing Finance Board (FHFB) to join a new Federal Housing Finance Authority (FHFA). The new organization will have oversight over the 14 GSEs, which is to say F & F and the twelve Federal Home Loan Banks (FHLBs).

The FHFA will be run by the former head of OFHEO, which used to supervise F & F, during the period in which they brought lots of crap onto their balance sheets and ran themselves into the ground in an effort not to cede market share to the investment banks in the exciting new frontiers of mortgage risk.

The FHFB, chartered in 1989 during the S & L party as a successor to the Federal Home Loan Bank Board, formerly oversaw the FHLBs, which have remained a crucial lifeline of liquidity to mortgage lenders throughout the crisis.

In short, the reorg of regulatory agencies gives empowers management of the agency that failed at the expense of the one that succeeded.

What's all the fuss about?

Paulson and Bernanke are of one mind that they need $700 bln NOW. Like they'll be positioned to use it once they've got it. Dodd and the rest of the Main St. advocates hem and haw and burnish their populist credentials (Christopher Dodd? Trying to cleanse himself from the perceived taint of Arthur Anderson and Enron?) while providing some reasonable due diligence.

But we know we're gonna give Hank'n'Ben something, and it won't be less than $450-500 bln. Why not $150-200 bln up front to get RTC2 up and running while the rest of the package gets hammered out?