A word about the bonuses

All the rancor over the Wall Street compensation system misses some crucial points. If we injected capital into the banks in the fall, it was because we believe that the banks are worth keeping. And what are the banks? Commercial banks have branches, real estate, ATMs, a bunch of stuff, but investment banks have people, culture, and a little technology here and there. That's it.

Cap the comp of the banks at $400k, as some wizard Senator from Missouri has suggested, and the legal entities we know as the former investment banks will disappear, poof... like Kaiser Tsoze. And the Evercores and Greenhills and Wasserstein Perellas will rise up to take their place. And then all those TARP injections would really, literally, have gone to waste.

And it will take time for new firms to form, and the ecosystems that made the things work, knowing you could call up Wendy in munis and get an answer or whatever, will be gone. So nobody will be able to raise money to get new ideas funded.

That's a key value of a corporation, knowing who's where and what they can do. Same deal in Detroit. Blow up GM and a lot of valuable relationships are gone.

Not that I know the answer, but posturing punitive is not it.

Shopping day

The other day the raincoat I bought to go to Moscow to work on my dissertation in 1997 and which I have since then thought of as my "new raincoat" sprung a new rip, so I decided to throw it away. I would run right out to Eastern Mountain Sports and buy myself a new Goretex thingie, if only I had the time.

I always say I hate shopping, but the fact is, I don't. I just don't like taking the time to do it, when I could be taking care of kids or working or doing sports or something more pressing.

But I'm an example of pent up demand. I'm 30-year fixed and I have cash on the side that I know could be allocated well right now to "durable" goods like Goretex. If I had more time, I'd go out and avail myself of the bargains that are out there, right now. A few of them, at least. And I doubt that I'm alone. So maybe, as a form of stimulus, the government should through soem tax code tweak encourage employers to give employees "shopping days", or half shopping days, on top of vacation benefits. Maybe stipulate that employees have to go out and spend n dollars and return receipts.

I'm sure it would be a trivial way to stimulate sales, but every basis point counts.

Bedtime update

After fighting each step of being put to bed with a range of delaying tactics, Graham like clockwork gets out of bed 10-15 minutes after lights out, goes to the top of the stairs (while I'm in reading with Natalie) and shouts down at 3/4 voice "Mom. I gotta go to the bathroom #2 really really badly." And then waits for a response, which inevitably comes only from me. And finally he goes and does it, and then calls out when he wants his royal butt wiped. We need to work on that latter part.

Snow day

Another day of dust bunnies and conference calls, punctuated with Y Thai (from the Thai restaurant at the Princeton Y, which rules) at Ted and Kirsten's.

Of late have been posting lots of old photos on Facebook in the evenings, rather than blogging. The rather louche one shown at left was taken of a lad who shall go unnamed on Flatbush Ave in Brooklyn, cerca 1987. You gotta love the archives.

Music in lieue of thought

At my desk all day sparring with clever admin people ("what do you want to talk to him about?"), reviewing ambitious plans for software to take imploding markets by storm, and admiring my ambitious collection of dust bunnies under the desk. Towards the end, at least, Pandora Radio (try it if you haven't) delivers up some lovely -- if pretentios -- music.

Michael Cashmore with Antony

Synapse loss?

I will confess I got nothing going on in the old skull these days. Coping with reality. Work. Cold. New York City.

Today it was much like being back in the 70s. The morning train lurched and crept into Penn Station. In the evening, the 3 train was so full that people had their game face on pushing in, taking pride in being in New York because, it's New York, goddammit.

Talked to a guy from Booz Allen who's been shipped out to frickin Abu Dhabi for six months and then will come home and get transferred to DC, where all the action is at.

Fun with geeks

This guy's pretty wonky, but he has a neat toy.

Run Fatboy Run

This should be a stupid and formulaic movie, but Simon Pegg is really some kind of comic genius. Just technically. Great timing, great physical comedy. And Dylan Moran is equally good. And Thandi Newton is OK but does look plenty good. So all in all it's a fine rent, much mirth to be had.

Parsons at Citi

There have been persistent if unconfirmed rumors that Richard Parsons has been installed as Chairman of Citigroup in an effort to try to provoke a raid from Carl Icahn. I will keep you posted as more details emerge.

Day one

The first day of the Obama administration... I actually worked. And here I am, bleary from HTML, of all things, pleased by UNC's crushing of Clemson, equally excited to learn that the freakish lump in my shoulder is a mere cebaceous cyst or lipoma, am going to bed.

More on South Korea and Treasuries

Went back and checked into the earlier story about the South Korean pension fund getting out of Treasuries. It is, to be sure, not a joke, and as the world's 5th largest pension fund ($166 bln recently), to be taken seriously. But the fund's manager has been a Treasury hawk throughout 2008, so it's not really news that he might want to sell. What doesn't make sense is why he'd want to talk it up if he's gonna sell.

And maybe, if we have to work harder to sell our debt, it will be a good thing. It will pressure the government to actually cut fat and become a more effective steward of it's debtholders' borrowed assets.

He had me back at "skinny kid with a funny name"

Amidst all the attention paid to the fact that Barack Obama is black, I think people at times lose sight of the fact that he flat out rocks. There's never been another politician in our lifetimes worth being excited about, and now there both is one and he's President to boot. Which means we all (substantially) agree on something. So I'm in a good mood, despite the fact that I have to go back to work.

An uncommon day

Today is a day like few others, with the inauguration reminding us how fortunate we are in the long term, and the South Korea pension fund manager getting bearish on Treasuries letting us know how utterly fucked we are in the short term. Stimulus package? Could be Obama will need to get Viagra on the internet.

Maybe Bush and Cheney will get some hunting in down in Crawford.

Concert on the mall

Obama's concert on the mall had high points and low points too. But there were notable omissions in the programming.

First off, Bob Dylan. There was a meme afloat back in '07 that he was supporting Ron Paul, but I haven't seen it confirmed anywhere. Most likely they were afraid he would flake out and so mangle one of his songs so badly as to make it unrecognizable. But, after all, he did open for Reverend King back at the March on Washington.



Secondly, P-Funk. "One Nation Under a Groove" should have been the theme song for the campaign, really.

The abstract child

At RDU, waiting for flight. An Asian dad in his 30s bounces his 3-year old girl in a very pink outfit on his knee. She giggles and gurgles uncontrollably, all the more so as her bounces her higher.

In some ways I feel like we skipped or truncated this stage with Graham, but not with Natalie, which raises the question: is it a first child thing? Does the first child evoke in the parent an urge for the abstraction of childhood that is to some extent slaked by the time the second comes along?

Could this be reflected in the slew of research on birth order issues? (Larry Sullivan et al) Only the shadow knows.

Artisans

Have been belatedly (as is oft my wont) reading the November 24^th  New Yorker, the food issue, and have particularly enjoyed the articles on the best barbeque in Texas and also the one on this Seattle knifemaker named Kramer, who is on a quest to make knifes that cut through bolts and floating silk and lamb bones.  On rare occasions, the old New Yorker shines through, the New Yorker from the days before Tina, when a journalist heads off into some weird realm of human experience and rides shotgun for a while.  This is the secret recipe of what’s his name on This American Life and the best of the blogosphere too:  capture the exotic individual down the block.

 

And it is also, in some ways, the hope of the American economy down the road.  Obama/Keynes can stimulate all he wants to, but if there aren’t reasons to hit the road, go to the mall, etc, people won’t bother.   There have to be ideas worth pursuing both as producer and consumer.

 

Niklaus was speculating the other night about the thing that supercedes Facebook, and, though I resisted the idea, he may be right.  After all, 2.0 blossomed from the dot com crash, and I’m speculating now that a big chunk of 2.0 (Facebook, Linkedin, Gmail/Yahoomail/Hotmail, MySpace, YouTube) won’t prove economical through 2010.  A new form may arise, and we may hope that it will grow from the great American garage and not from some faceless Hyderabad or Shenzen apartment complex.  In this regard, our surfeit of cheap real estate (once more, “wide open spaces”) may be our salvation, as entrepreneurial activity is much easier when one has A Room of One’s Own.

Another day, another desk

After working Thursday afternoon at the Carrboro Coworking space, which was pleasant if somehow sedater than I expected, today I sat in my mom's house and worked. Very quiet, the kind of quiet we rarely get in the north. Then went to Niklaus's house and ate barbeque, again.

Other than that, nothing happened, and did not think.

A coronation

Today in the historic North Carolina State Capital the Grouse's very own Josh Stein was sworn in. In an old-school chamber filled with people in both dresses and suits, depending on their gender, Josh was introduced by father Adam, preceded by this guy Basnight who is the head poobah of the Senate, and then sworn in by this woman who called him "Joshua H. Stein," which meant that he went almost a full electoral cycle without anyone noting that his middle name was Harold. Josh then grabbed the mike and spoke truth to power. Sadly, there was no open-mike portion to the ceremony.

Afterwards, lunch was served over in the State Legislature office building, which I totally remembered going to on elementary school field trips, and which hearkens back to the days of Jody, Biffy, Uncle Bill and Mr. French on Family Affair.

Niklaus, my mom showed up, but Adam had to go to Vegas, sending wife and child in his stead.

In transit

Forgot to post. All I can say is that the Jet Blue terminal at JFK rocks. Good food service, delivery to the gate if you like, free internet, it's all good. And I'm coming more and more to love the JFK train to the plane.

The Replacements

These guys might have been great live if they weren't always so fucking drunk.

Mercer County Park Ice Rink, 1/11/09, 2pm

Graham surprised me by wanting to go skating, and even more by putting on those uncomfortable skates. But he made it around the rink with me twice, holding my hand and leaning on me seriously.

Natalie -- with Margaret -- hung by the sides of the rink for a while but eventually found her feet and started skating around quite reasonably. During the apres hot chocolate, she declared that this was precisely her 5th time skating, which I do not doubt.

The rink quite the place, right out of Robert Moses with its rough-hewn concrete clubhouse and fireplace. I'm not used to hearing country radio blasted in fairly urban New Jersey areas, and the the only break from white people was a small handful of Asians, right next to where they have the Indian fair in summer. I guess it's a cracker pastime.

But it was plenty fun, with numerous pairs of "substantially identical" (as the wash sale rule says) teenage girls skating around arm and arm, and the skating guard nerds, and the kids clustered round to watch the Zamboni during the break, it was all good.

Dispatches from the new frontiers of finance

A series of stunning developments

• Bear/Lehman Joint Venture for Private Wealth Management
  In response to growing aggregation in the brokerage space, Bear Stearns and Lehman Brothers today announced a joint venture which will combine and house the two firms' private wealth management units. A Bear Stearns spokesperson said: "Due to Lehman's well-established brand and robust network of proven producers, we see great and synergistic opportunities to realize economies of scale and leverage a best of breed solution to return value to our clients and shareholders."
  
  
• Federal League Tables
  To encourage competition and entrepreneurship amongst government agencies, Rahm Emanuel, Chief-of-Staff-Select for the President-Elect announced the established of League Tables for M & A deals, equity transactions, and debt underwriting by federal agencies. An informal poll of 2008:
  
  
• M & A -- The Fed, for it's role in Bear/JP Morgan and Wamu/JPMorgan. Honorable Mention to the FDIC for Wells Fargo/Wachovia and the very profitable Indy Mac flip.
• Debt Issuance -- The Treasury, honorable mention to Fannie and Freddy
• Equity Transactions -- The Treasury, for the TARP injections that so warmed hearts from coast to coast

• New "F-bills" to be issued
  Tiring of watching its cousins over at the Treasury have all the auctioning fun with its "T-bills", and mindful of the outsized gains in Treasuries in 2008, the Fed will issue it's own bonds starting in 2009, to be known as "F-bills." To simultaneously maximize principle protection, total return, and yield, F-bills will be continuously inverted variable products arbitraging variances in the ratios between a synthetic non-capitalization weighted versions of the preliminary and month-end Michigan Consumer Sentiment Indices. Chairman Bernanke stated that: "We really want a product that's transparent and robust and returns value to key stakeholders."
  

Ohh, it's late

Once more it's gotten late and I haven't posted. In some ways that's good. It means I'm busy, and I'm not overly fixated on anything.

I will say this. After getting Mary Linda Thompson's recent Versatile Heart, which is quite a good record, I got her more, older Linda Thompson records for Christmas. And I've discovered that she, while a good singer, really is at a disadvantage without a good guitarist beside her, which means her ex-husband Richard back in the day and her son Teddy more recently. And I think it's a pretty observable trend that folksy singer chicks really need a good guitarist accompanying them, whether it's Gillian Welch with David Rawlings or Joni Mitchell with... Joni Mitchell. You listen to Carol King now and it's all flat, lame strumming and simple finger-picking, not in the same frickin ballpark with Joni.

That's all I've got to say.

Dreams of my Father

So I've been reading Obama's book, after Beth was cooing about it, and find it to be good. By no means great, but plenty good. The guy's earnestly trying to think through his evolution, and that's cool enough. Mostly I'm excited that I want to read a book by the President-Elect, something that would have been inconceivable ever before in my lifetime.

And you gotta love the fact that he's upfront about his drug use: pot, cocaine, cigarettes, booze, it's all there. Not because any of that is particularly cool, but it is real and honest and it does make him a regular guy. Mostly, I'm proud to live in a country that can elect as it's President somebody who can come clean in print about having had a normal adolescence. Not so long ago we were splitting hairs about inhaling, which led to splitting hairs over the definition of "is". This is a better way.

What's going on?

Forgive me if I'm a little confused. A significant plurality of Wall Street prognosticators are falling all over themselves to issue more and more bullish pronouncements for the first and more so the second half of the year, excluding your permabears, naturally.

Meanwhile, economists, pliers of the dismal science, after all, are competing too be more and more pessimistic, and not just gloom-n-doomers like Nouriel Roubini (just back from a lovely vacation in St. Barth's with leggy socialites, to judge by Facebook), are fighting to be the most pessimistic, witness Paul Krugman's frightfest on the Time op-ed page yesterday trying to bully Republicans into supporting Obama's aggressive government spending plan.*

So who's a girl to believe? Hard to say. But I can say that, anecdotally, I'm hearing about people getting jobs without looking for them. I see people I know looking to hire. I see some vendors being too busy to get a meeting with them.

Mark Hulbert's Wednesday piece on the bearishness of too much bullishness feels right, incidentally.

*Earth to Krugman, Nobel or no, the Right has been reading your op-ed work for years and are pointedly not listening. Get a co-signer from Chicago next time

Cut out

Was at the Duane Reade (that’s a drug store, for you non New Yorkers) at William and Pine a few minutes back. Near the door was a cut out of the buff and dream James Blake, swinging that racket of his, advertising some bottled water (turns out Evian). Next to him were the words “James Blake, American tennis star.” Now, I ask you, if you need to write the guys name and description, is he really a star? And if he’s not, why do you have a nearly life-size cut out of him advertising your product. What benefit do you derive?

Just Like Heaven

Dinosaur Jr.

To the mall

Took a carload of kids stuff to the thrift store, then went to, thinking to replace perhaps my half rotten manclogs, perhaps the "sack jacket" I got from J Crew in 1991 and then gotten tooth marks on from a Moscow escalator in 1996. No luck. I'll never replace that jacket.

But I got to see the mall. A scene in desolation. In Lord & Taylor's, the men's shoe section had three whole racks with nothing on 'em. The suit section was distinctly underpopulated. It was like they weren't bothering to restock. There was plenty of foot traffic, but I know I for one didn't by shit (and it wasn't just because I had forgotten to bring coupons). The bathroom in JC Penney stank and there was garbage on the floors at Macy's. They weren't stocking, and they weren't staffing.

If, as some are predicting, as many as 25% of retailers file for bankrupcy in 2009-10, and gas prices creep back up, there's going to be a lot of fallow real estate out there. Lets hope it reverts to greenspace and the now fully borne costs of getting to the store result in a whole new mode of retail, a return to main street and a new generation of convenience stores serving better foodstuffs, and a defetishization of cost control by buying in bulk.

L'Iceberg

I didn't expect much from this movie, and it wallowed in the drawer where the Netflix go for a month and change, but when we did watch it, it was a pleasant surprise.  The Tilda Swinton-looking woman, who turns out to be one of the directors, locks herself in a freezer overnight, and her borg-like family fails to notice.  She becomes obsessed -- like Richard Dreyfus with mashed potatoes -- with icebergs and cold stuff, so she strikes out for the north.  Hilarious hijinx ensue. 

The sensibility is equal parts Jacques Tati and Aki Kaurismaki.  Great physical comedy, spare settings and dialogue.  It's well worth renting.  I may check out more of the flicks this Fiona Gordon has made with with Dominique Abel, who plays her husband.  From the looks of it, they are a rare pare of talents.