Monday, September 29, 2008

What Will It Take?

What will it take to get the bill passed?

Today, is an historic day, a day that will go down in history as of course all days due. This will be a day that they will write about long after it seems to pass into an old man's memory bank. Of course, by a long time, I mean it will it be remembered a long time only applies until the next crisis and then this will be an obscure minor blip on the long path of America's downward spiral.

Today, what was it? Oh, yeah, the Congressional House voted "NO" to the proposed Bail-Out. A another major insult to the man who no insult could be big enough to balance against his "I Am Trying Hard to Be The Worst President Ever" approach to governance. Not only did the Gang of 228 no voters spit in the face of Mr. Bush but they also insulted Ms. Nancy Pelosi, the grandmother who is the first woman Speaker of the House ... how could you do it to her?

Yes, the Gang of 228 say no thank you to the golden opportunity to bail-out the gamblers of Wall Street and save them from doing what Congress ordered them to do ... yes, Congress encouraged and smiled while Wall Street gave all those sub prime mortgages, yes, Congress cheered them on as they created new ways to leverage themselves to give even more questionable mortgages. Oh, did I mention Congress had no trouble taking the campaign contributions from the Wall Streeters doing Congress' bidding?

Well, I have an suggestion in how to get the Gang of 288 to change their votes. First, tell them that they can just stay in Washington D.C. until they get the job done. Correct, no going home to campaign for re-election, no taking a month off for Thanksgiving followed by a month off for Christmas and then a long week for the inauguration. That's right, Congress will have to keep working, earning their paycheck, they tell us is too small until they actually do some work.

This is not a new idea. Did you ever notice how many bills finally get passed in the days before vacation? Count them up. Its like back in the day when winter break was coming, you had tests to take and papers to submit because for the previous weeks you were doing what? Not much. Yes, you can say quite clearly that Congress waits until the last minute to do its work.

Look at the papers they write in the final days of any session. Secretary Paulson submitted a three page plan to bail-out Wall Street. Three pages double spaced, 16 point font wide margins. In less than a week, which in Congress time is an hour (they take a week to get done what most people get done in an hour ... does that explain it), they expanded the report to a 110 page single spaced 10 point font with narrow margins with footnotes. Oh, it is missing some major points and glossed over most of the details but that is for next semester when there will be a few weeks before the two week St. Valentine's vacation which must be taken before the two week St. Patrick's Day retreat.

You want Congress to actually do some work? Cut out their vacations.

If that does not work, reduce their allowance.

Thursday, September 25, 2008

Bail Me Out Please

I am curious where I can apply for a government bail out? Is there an application that I can get?

I understand the qualifications.

I must have a really big company run by oh so smart people who made multi-million dollar compensation packages because they were so smart. These same "oh so smart" people have made very bad decisions. But don't worry we will reward them with substantial bonuses. These geniuses gave hundreds billions of dollars in mortgages to people who did not could not normally qualify, then borrowed more money to give more sub prime mortgages, and by sub prime we mean less than qualified mortgages, then sell that questionable paper to other very highly paid people.

This brilliant banking team then bought insurance from a company that had no idea what they were insuring (AIG) who borrowed money to provide more insurance, then the brilliant banking team borrowed more money to give more sub prime loans (read: unqualifed borrowers). It was okay they kept their quality rating because they were rating was being rated by companies the government gave a monopoly to rate the banks with no understanding that they were going where no man had gone before.

Or maybe I could run an automotive manufacturing company producing cars that no one wanted. I could do this for twenty plus years as my foreign competition produced better quality cars that were more fuel efficient. Then, when it became a "crisis" that I could not produce the fuel efficient, quality car that people wanted, I could ask Congress for a $50 Billion loan so I could do it right ... maybe.

One definition of insanity is doing the same thing over and over expecting a different result. When you makes a mistake you try to change the circumstances so you don't do it again.

When we bail out these companies, which of course we will do because they are "too big to fail" what will be different? Will we require new management instead of leaving in place the same people who made the decisions which got them into this position? Will we require the executives to limit their total compensation to only 100 times more than the lowest paid employee instead of the 250 they currently do? Will we require them to actually not take risks with our money? Will require the regulators to actually do their job? Will we require our elected officials, read Congress, to actually do their job?

What will be different when we give them $700 Billion or $50 Billion?

Wednesday, September 24, 2008

Can You Give Me A Little Help Too

It seems that the President and Congress recently woke up. I only wonder how long there nap was this time?

Amazingly enough, they recently discovered and by recently I mean that back in March and April and May and June they had no idea what was coming down the pike. The Secretary of the Treasury was telling the public how strong our financial system is / was. The Chairman of the Federal Reserve was worried about inflation. Who knew there was Armageddon was just around the corner.

So, since I have written some excessively long pieces of late and particularly on this topic, I will cut to the chase.

The Secretary of Treasury presented a plan to Congress. It was written on three pages. Three pages, double spaced, wide margins, 16 point font. A plan that was so well thought out that it took maybe twenty minutes to type and not much longer to actually think out.

The "plan" give the Secretary of Treasury unlimited power, to make any decision about almost anything without any possible second guessing, no judicial review, no Congressional oversight and by the way $700 Billion dollars for whatever.

Mr. Secretary could go shopping for any bad debt or questionable debt from anyone he chooses under any terms he decides to agree. The debt does not even have to be mortgages about to be foreclosed.

Now, of course the actual plan that gets passed by the 535 ding dongs also known as Congress will be totally incomprehensible, impossible to manage, take an excessive amount of time to implement and the outcome ... beyond anyone's imagination.

So, what do I want? Well, I have some credit card debt and a mortgage that I would like Mr. Secretary to purchase and then rewrite. I was thinking he could easily lower my mortgage by 50% and extend the payment terms to one payment every two months and allow me 80 years to pay the remaining principal at an interest rate of maybe 1%, eliminate my credit card debt because I might think about not paying it. Plus, I would like him to throw in a toaster or some cutlery as a signing bonus.

I am not be greedy. I just believe the Government owes it to me. If necessary, I could throw in the mortgages of my neighbors, maybe my relatives so we would be large enough for the Government to notice and recognize we are too big to let fail. If you interested in being part of this group applications are being accepted but hurry.

Oh Please Can We Go For A Plane Ride

Airline travel is not what it used to be in the old days. By old days I mean pre 9/11. You know 9/11 that is the national Rudy Guilliani I Am America’s Mayor Day. September 10th New York is ready to run his sorry three timing sorry dear but I found a new love butt out of town and along come two planes into the twin towers. Suddenly, Rudy is America’s Mayor.

Well, before that date, air travel was pleasant. The family looked forward to going somewhere on an airplane. It was a treat, except maybe for that part of the trip where Lumpy decided to stay on the plane and not visit San Francisco … oh that is such a story. No sound deadening earphones necessary. It was a nice experience. No security lines. Just show up and people wanted to help you.

You could even park at the curb and wait for your family to get their luggage. The police officer would say okay but don’t wait too long. Stewards offered you a meal on long flights.

Now what do we have?

We got a nightmare.

It all starts with the online experience. Choose one of ninety three web sites. From “formerly cheap tickets” or “I have no money but must visit my in-laws quick” or as a last resort – “I fly any time to go anywhere now”. Enter your dates of travel and your cost goes up. Enter your travel destination and your cost goes up. Want a real seat on said plane and your cost goes up. Want to take any piece of luggage and your cost goes up. Want to carry your luggage on to reduce the airlines labor cost and they will only charge you slightly more money.

So you get a subprime mortgage and buy tickets.

So its travel date, you want curb side check in to avoid the long lines … that will be $5 per piece of luggage, before it was a voluntary tip, now it is a fee and we will take credit cards. Checking our luggage inside for free, priceless but only an extra hour of time but what is time after all but a series of endless hours waiting for the pain to end.

Now we move to the security line. This is a line of people who are carrying every piece of crap they own to avoid paying that $25 first piece of luggage or the $50 overweight fee or the ugly bag with the orange string to distinguish it from all the other orange stringed black suitcases.

Remember these are highly trained TSA agents. Where do they get that training, Disneyland? Previously, I would attempt to handle the paperwork for family members … gather up the driver licenses, boarding passes and blood samples. This week I had a major run in. I thought my flying privileges were going to permanently canceled. Mr. 90 Year Old Karate Kid Security Man says to me with his entire 5 foot 5 power stance … each member of your party must carry their own identification and boarding pass. What I did not understand and I did try to explain to Mr. 90 … the woman is my wife and I am the male figure. Mr 90 says with all his winey authority … each traveler must carry their own documents. But Sir, she woman, me man. Mr. 90 growls “if you want to get through security release the documents and step back from the podium”.

Okay, Mr. 90 … you win this round but I will be back with reinforcements.

We will forget that the group in front of you all have 6 ounce bottles of mystery liquid that needs to be analyzed, and the guy with the extra wide cowboy belt buckle having to go through the security merry-go-round three times.

Now the easy part … oh you travel novice. Boarding the plane:

Ladies and male companions, we will begin boarding the airplane in 30 minutes. We will board by sections which you will find on your board pass. Take the number on the boarding pass over the Code Board to translate your number into the proper number being used for this flight. These precautions are being implemented to protect you from the terrorist threat which is currently at level magenta. We will board in prime number sequence so you if you have a non prime number for your boarding group you will be directed to gate 22 for the alternative flight.

You are moving to the plane now.

The aisle is very narrow … what with eight seats across. It’s going to be a fight for overhead bin space to put your oversize drag on luggage out of the way. What? Is that a 4 foot woman trying to boost her 110 lbs oversized bag up over her head and then boost it another 2 feet to get it into the bin? Is she holding up the entire plane from loading because she is in row 5? Why yes, welcome to the friendly skies. When she bought this brick could the sales person offered to sell her a step ladder to get it up into the overhead bin? Maybe the six gentlemen behind her could offer to help her rather that just watching and giggling like school girls … no offense intended to the school girls.

Well, she struggles and gets the hunk of plastic up into the bin plus another five minutes to get in all the way in. Alas, the line begins to move.

This is excruciating but the plane gets loaded.

Loaded yes, but moving? Oh you are an overly optimistic soul. We pull away from the gate right on time so as to avoid the FAA’s wrath of leaving late. Unfortunately, the statistic is for leaving the gate not leaving the ground. We pull back and stop. Five minutes, ten minutes and now we are moving to get in line to take off. Seems the airport didn’t know we would actually want to take off so they have over scheduled the take off slot and we are now number 18 in line. Eighteen! What numskull thought that you could have 18 planes take off in a period of 3 minutes when they allowed all these planes to schedule their departure? Didn’t they realize that those same runways are used for landings?

We are fortunate. There are horror stories of sitting on the runway for hours without air conditioning. Remember, all of time waiting for take off … you are not allowed to use electronic gear because your iPod will send signals to the pilot who will get confused and dazed when Stairway to Heaven starts coming out of the control panel.

Sitting there is a pleasure. I have negative three inches to put my not so long legs. What, how can there be negative space? It is simple. My legs when normally at the end of seat take up so much space. I now have to bring them back three inches so they are not inside the seat in front of me. Cross your legs … I think not. Reach down to scratch that itch on your ankle … only if you can go over the seat in front of you, reach underneath and scratch quickly before that 300 lb guy comes back from the John.

Thank Hashem for sound deadening headphones. If only I would have checked to see if the batteries were good or brought extra ones. Well, it might have mattered if I had charged my iPod. So, I guess it’s listening to Mr. I Know How To Make a Mint in Real Estate Despite The Current Economic Conditions … or Miss I Really Miss White Bread … or is it that baby crying in row 23 B.

While the flight only takes 32 minutes longer than scheduled but then we know about schedules.

Circling the airport is fun. You go around in a big circle and don’t even get dizzy. Well, the airport didn’t know we were coming so of course they overbooked the airways.

46 minutes later … one more time around with a little more clapping this time.

Going in for a landing … wee! Bump, bump, bump, bump … rattle, rattle, bump … we are on the ground. We are going to actually arrive. Oh, did I mention that there needs to be an open gate for us to actually get off the plane? See, the airport once again forgot we took off with the intention of coming to this very city, did they not notice we were circling above? I guess not because we got another 30 minute wait for a gate.

Unloading the plane! Reverse the loading process except everyone wants to get off at once to run the three concourses, take the train, fly to the very last gate to catch the connecting flight which is leaving in … oh, 12 minutes.

Enough already … please I just want to get my luggage, find my car and go home.

I will not bore you want with getting the luggage … there is only so much fun in one excessively long post.

Tuesday, September 23, 2008

How To Conduct A Proper Interview

Normally I do not sink so low as to comment on sports but this issue cries out for justice.

This last Sunday the hapless Miami Dolphins upset the Golden New England Patriots … the invincible Patriots. The lowly Dolphins who could not spell the word “win” stopped the 21 consecutive regular season victory string by the Patriots and miraculously avoided being number 22 not to say they weren’t a significant number of the other numbers.

Bill Belichick, the famed cheater coach of the New England Patriots was forced by custom to give an interview after this embarrassing loss. The only thing more embarrassing than being surprised by the Dolphins non-NFL normal tactics was to have been one of the reporters asking questions. This demonstration of total lack of brain power is normally only seen when asking politicians to explain their position on any controversial topic but we were forced to see the presentation by one of the dumbest set of reporters known to mankind. The real responses by Coach were not reported by these knuckle heads because in hindsight they were embarrassed by the dumbness of their questions. The only good news for these reporters was that there are definite openings for them to apply for positions as either political or financial reporters since they also do not know how to ask a real question.

Here’s a transcript of his news conference after the game – the questions are substantially the actual questions asked … the answer are primarily what Bill said out loud and plus what he was saying in his head:

Q: Bill, how come you lost to the team that had lost 17 of their last 18 games? Could you give us an analysis of the game?

Bill Belichick: Listen you dimwit … weren’t you watching the game … did you just sleep through the last 60 minutes of football? Well, there is not too much to say here. I thought that Miami played a real good football game. They did everything a lot better than we did. The outplayed us. They out coached us. They certainly dominated on offense and defense. I thought we were competitive in the kicking game but that was about it, not on the offensive or defensive sides of the ball. They obviously deserved to win. They were the better team and they did everything a lot better than we did today. Not too much to say … we sucked. By the way, isn’t that a job your paid to do … analyze the game, will you pay me to do your job?

Q: Can you talk about the recognition of the Ronnie Brown and shotgun play?

BB: Duh! Since we didn’t stop him which you didn’t seem to notice because you were too busy focusing on the cheerleaders and that hot chick in Section 202 … you know the one who kept pulling her shirt up, we had trouble with a lot of things. That was one of them. We had trouble a lot and you should have actually watched the game instead of masturbating in the men’s room you dipshit.

Q: Was that a play they had shown on film before?

BB: Of course, as your fellow reporters from DDD (dumb, dumber and dumbest) reported it was available on YouTube from an open Dolphin practice session. How was your pregame analysis? Did you see this coming? But certainly, your pregame analysis forgot to mention the possibility of these plays so where were your heads?

We had trouble with their new stuff that is why they call it “new stuff”. We had trouble with their old stuff because we spent most of last week in the spa relaxing because you told us we were vastly superior and 12 point favorites. We didn’t play very well on defense which if you ask me again about our defense I will shoot you … look at the score board, you blind bastard, they scored more that we did … so how did our defense do?. We didn’t coach very well because we didn’t video their coaching signals because you told us the Dolphins suck. We didn’t play very well across the board and they did a good job, so give them credit. We’ve got a lot of work to do. I know we are better than that.

Q: What do you attribute to that – coming in with the difference in records?

BB: Ding dong … is there anyone home in your head? If we had the answer to that, we would have fixed it. But no… you must think we like to loose which we try to avoid and then listen to your stupid questions which show clearly that you have no concept of football, coaching … and reporting. Do you have short term memory problems? Didn’t I just answer this question with different words? We will get back to work tomorrow and work to correct and improve it.

Q: Can you talk about the play of Matt Cassel?

BB: Who gives a shit about Cassel? Our team did not show up … these are all substitute players. We couldn’t move the ball on offense … you may have noticed we didn’t score many points, we missed some opportunities because we just didn’t want to catch the ball and we couldn’t stop them on defense which would explain one more time why they had more points than we did. I don’t know what else to say. They did a lot better job than we did on offense and defense ergo they won … we lost … do you understand that?.

Q: Could you see anything of this coming from a preparation standpoint? Did you have a good week at practice?

BB: If we could have seen it coming, we would have prepared for it … or do you think we knew about it and ignored it? Of course genius, the next time we play a team that uses these set-ups which no one else has used in the Pros we will react differently. Could you tell us who is considering using these plays? It doesn’t matter because you may have noticed this game is over. What kind of question is that? Every week in practice you always work on things that is why they call it practice. You improve them and correct them as you go through the week. The bottom line is, they came out to play on Sunday and we didn’t. We didn’t do a very good job today and that includes everybody.

Q: Are you concerned that if you get behind by 10 or 12, which when Tom Brady was quarterback was not a big deal, is it a much bigger deal than it was before?

BB: Are you a total moron? Is there any coach whose game plan is to spot their opponents 10 or 12 points? That was never the game plan – to get behind by 10 or 12. We always want to go out and play well and, as the game goes on, play the situations that come up. We always played it that way, I’m sure that’s the way we will continue to play it.

Q: Is it difficult for Matt [Cassel] because he has so little experience?

BB: Please note one more time … they scored more than we did … Matt does not play defense but then you wouldn’t know that because your main job is monitoring Tony Romo’s love life. Whatever the situation is, we have to play it. So, it doesn’t make any difference – that goes for everybody.

Q: Have they shown the split out of [Chad] Pennington before?

BB: That hasn’t been a big thing for them. You’re a complete idiot with the attention span of a 3 month old baby. These were new plays. They have never used them in a game. What part of “new” don’t you understand? We know that getting those two guys in the game is something that we expected them to do but you certainly did not anticipate it when you made us 12 point favorites. We just didn’t do a good job with it, or a lot of other things for that matter.

Q: Is it worse that you have two weeks to dwell on it or better that you have two weeks to make corrections?

BB: There isn’t anything we can do about the schedule. But the best part is that next Sunday, I will not have to answer any of your stupid repetitive questions … so praise the Lord for that gift. So, what it is we work with, try to make the best out of it and do the best that we can to improve our football team during that time. When the games are scheduled we will play them … you of course don’t understand that the schedule is made up in advance … we did not elect after loosing this game to take an extra week off. We will try to use the time the best we can – same as we always do.

Q: How concerned do you get about a game like this?

BB: What happened today is a reflection of the way they played and the way we played – the way they coached and the way we coached. Every game is its own entity [and] we know that. And of course, I can get rid of my 19-0 in 08/09 shirts along with my 22 games in a row shirts and.

Q: You did have a regular season record winning streak. Do you take any pride in that?

BB: No of course we did not take any pride in winning 21 regular season games in a row. A record that you reporters have now said will stand for 50 years. Why would we have any pride in that?

I think right now all we were concentrated on was the Miami game. That’s what we will do. We will take a look at that, make some adjustments, corrections, go forward and start getting ready for San Francisco. That really is what our mindset is for this week and the next two weeks.

Q: Any particular reason the direct snap continued to give you trouble?

BB: Yeah, because we didn’t see it coming and we were asleep out on the field. Is there any reason you didn’t see it coming? They did a good job with it and we didn’t.

Q: Has Ronnie Brown ever thrown the ball in the NFL that you know of?

BB: No, has never throw a football even as a joke so of course we were surprised that he could even lift a football. Have you ever seen him throw a football in his life? Is there any film you can show us of him throwing a football anywhere? You do have 50 guys in your research department don’t you? What are they doing? Could they see if he ever threw a football since he was born? Yes. He’s left handed, he’s right handed. Believe me there were a lot of other problems besides that.

So, we say to aspiring journalist students … the competition is not so tough for those prestigious jobs all you have to do is what they have done … sleep with you boss, shine a lot of shoes and mow all the executives lawns because obviously brain power is not a job qualification.

Monday, September 22, 2008

Pointing Out The Truth.

Read the Wall Street Journal?

Probably not because you are one of those excessively liberal left wing government should solve all my problems, pure communism is really not such a bad approach to civilization and you know that the U.S.S.R. was not really a “true” communistic state … big government properly staffed with good liberal thinking people would make life better for the “real people”.

So, I guess you don’t read the Wall Street Journal. Well, I do.

There was a recent op-ed piece that really got my hackles up. I am not sure what hackles are but if I did know what they were I am sure they would be up and taking umbrage. Don’t ask me where my umbrage would be taken. You are just trying to distract me from my anger and outrage and yes, I know what those words mean and that is what I feel.

Don’t let me forget air travel or family events …

So, there was an op-ed piece by William M. Issac former head of the Federal Deposit Insurance Corporation from 1981 – 1985 and currently chairman of the Washington financial services consulting firm of The Government Should Stay Out of My Way Except to Bail Me Out When My Greed Exceeds My Ability, Inc.”.

Well, Mr. Issac’s piece entitled “How to Save the Financial System” slurred the accounting profession. Now, I don’t often run right out and protect my profession even when a TV show routinely makes the accountant the nerd and not even the nerd that gets the hot, smart woman. I mean there is a mathematician nerd who gets his own show and the beautiful mathematician female professor and he is even Jewish … see Numbers on Friday night … oops you don’t watch TV on Friday nights … Thanks Hashem for digital recording devices. Maybe next season we will have Forensic Accounting – NYC staring Edward Norton as the lead accountant. Remember, these were the guys that brought down Al Capone.

So, back to Mr. Issac and the solution for the financial mess or how I solved all problems for the masses while protecting my customer’s ten million bonus. He gave three major actions which have caused the current financial crisis. Rather than bore you with all three reasons and why he is among the dumbest people allowed to write a half page op-ed piece for the Wall Street Journal, we will just concentrate on my issue.

Now, he does not find fault with the bankers who gave mortgages to people with no money to buy property that was appraised by drunken, stoned appraisers for twice its real value and then to be fair make that mortgage for 105% of the purchase price so the buyer could leave the closing a little better off and money in his pocket. Those same banker people then told themselves they could write crappy mortgages and sell them to other greedy, drunken, stoned fools for a profit who would be happy to buy crap and then do it again maybe 100,000,000 times more because that is how many greedy, drunken stoned-out fools in the world if not more, These people were not at fault. Of course not they were only keeping the economy growing. How about the regulators that watched this going on, were they at fault? No, because they were busy buying property to flip for a substantial profit before construction was even completed.

What does this genius give us for something which brought the house of cards down?

Warning: Here comes the boring shit … you could skip the next three paragraphs and not hurt my feelings.

Well years ago, the accounting profession decided that balance sheets that merely presented the assets (stuff bought like building, land, equipment or investment like mortgages) at cost might be misleading when the value of those assets were permanently impaired (go down in value) and no longer worth their cost. What the heck does that mean in English? Well, company buys a building for $10 million dollars in 1980, it carries that $10 million dollars as an asset, something of value, making the company worth a million dollars more (less of course the mortgage but for this example they paid cash so no debt). Nice purchase. Well now ten years later, that neighborhood has gone down the tubes, and the company could not give that building away for only $1 million. A drunk sailor, no offense to the sailors out there but a drunk one has more brains than a banker or a mortgage lender or a politician trying to solve problems, would not take the building.

So, the evil accounting profession instituted fair value rules and the company needs to present the fact that their multi-million dollar building is only worth one million. So what? Well, the illiterate banker looks at that financial package and says … oops, the loan we gave you where you used that building as collateral is not worth what we thought and therefore either you don’t get any more money or we want our money back … pay the loan because your collateral is worth less than the loan. Company has a major problem. Have I lost you?

Let’s try this company’s total assets minus what they owe is $1,000,000. They go to bank and borrow $500,000 or 50% of their net assets. Okay? Now, the assets drop in value because they were in Galveston and Ike put them under water. The real value of those assets now drops to $600,000 and according to bank agreement … can only borrow $300,000. So, Mr. Banker comes along and says very politely … I would like my $200,000 back ($500,000 less $300,000). Well, he does not do it so politely but rather you have one week to pay up or else we will take your trophy wife that you put up as additional collateral. Crap, I really like trophy wife and if I don’t have any money it will be hard to get a replacement. So, you can see that fair value accounting could be a real problem. Life sucks when you have to interject reality.

Now bring this to our current financial crisis, see all those financial institutions have hundreds of billions of dollars of mortgages given to Mr. I Got No Money and Property I Can Not Afford If I Had to Finance It With a Normal Mortgage and I Just Lost My Job. So, what is that mortgage worth now that Mr. I Got No Money decides to stop paying? Not so much. So, financial companies having to comply with the rules of the game have to write down the value of their mortgages to what they are really worth. Merrill Lynch takes a $10 Billion hit, Lehman takes Billions in loss, Freddie and Fannie take Billions and Billions in loss, AIG Insurance Company went so far as to insure against this kind of loss and wrote a Trillion Dollars worth of insurance. Oh, my Lord in Heaven how drunk and stoned was I when I signed that agreement? Okay, its only paper losses but CNN can not understand that so it sounds like real money.

By the way, this huge number of bad mortgages, is just over 3% of all mortgages and only slightly higher than the historical average for bad mortgages. Problem is they are mostly in Florida, California, Arizona and Las Vegas, the same places where housing costs were going through the roof but that is really another post.

So, Mr. Issac says the greedy stupid men and women who screwed up royally were not brought down by their own greed and excessive stupidity. It was the accounting profession who made them write the shit down to what its worth. Accountants suck … they really messed up.

But, don’t worry. The Government just announced they are going to use your money to buy that shit so the greedy, stupid, drunken bankers and insurance guys can get the shit off their balance sheets. The GSDB (greedy, stupid, drunken bankers) can then collect their multi million dollar bonuses for solving the problem they got themselves into and also fire the accountants.

So, on behalf of my accounting profession, I apologize for pointing out the truth.

Wednesday, September 17, 2008

Can You Find Someone To Ask The Question?

Please make the bad men and one woman stop ... make the elections go away!

Why is it that the people that get paid to actually listen to all the nonsense spewed forth from both political parties never ask a meaningful question? Why do they only regurgitate what each side retches up for the world to slop up?

Back in the day, when you wrote an opinion essay for English class, all the meaningless words were circled in red with a question ... what does this mean. A sixth grade English teacher would not let you get away with the complete ducking of a question or using words which did not really mean anything concrete.

The last couple of weeks the economy as defined by the Press and been going farther in the toilet. Now, the fact that this is not true which we will explain is not important. What is important is that you think it is going down the slippery slope to Depression is all that matters. The second thing that you must accept as fact is that your vote, while very important, will help one side or the other get into office and stop it from getting worse. Oh the fairy tales we tell ourselves are so wonderful in a magical sort of way.

First, is this the end of civilization as we know it? Not by a long shot. Why you ask with a look of disbelief on your face. Now of course that is not the same face you made when you heard that Heroes season was being cut short, or when you read that 24 was going to skip a whole year while Keifer Sutherland was trying to escape from a real jail or that Jennifer Garner was not coming back to star in Alias. No, those were major calamities which there is no recovery.

The current mess is a mess because a bunch of people decided that home values would only continue there upward march and do it at an every increasing double digit rate. The home bought in March for $300,000 would certainly be worth at least $350,000 by October of the same year. How difficult is that to imagine. Then those same geniuses calculated with super computer models that if you give a mortgage to someone with no money down and no real payments to make for say three to five years ... well that would certainly work out fine for everyone. It would not even be important if that borrower had any real income to make a meaningful payment. Why you ask? Well, the mortgage broker and real estate agent told Mr. I Have No Money or Assets Besides This Overpriced Home that is was okay because in three to five years the house would be worth at least $600,000 or more and he could refinance or sell and move to an even bigger home. Maybe this was not even going to be a primary residence ... well you could flip it for a large profit before it even finished being built, so no worry about making any payments.

So, to make a long story short ... everyone over leveraged themselves ... people at the top got multi-million dollar bonuses for their genius of taking their companies out on limb and a saw to cut it off behind themselves. More people were hired to get more mortgages like these. More bankers were hired to give these mortgages. Investment vehicles were created for more banks, insurance companies, state governments, foreign countries and wealthy individuals so they could get in on the over leveraged highly speculative mortgages. Then along comes a little breeze and the house of cards comes down.

More on collective stupidly later.

So, what would Senator Obama or Senator McCain have done differently? What specifically would they as President done different? All of the necessary regulations to have stopped this are on the books. More than enough government agencies exist to deal with this issue. Tell me what would you have got Congress who sucks the tit of the Finance Industry to do differently? What would you have done to States and Municipalities to stop them from enjoying the economic boom as the value of their real estate was escalating producing higher tax revenues?

Senator Obama -- more regulation? Exactly what does that mean and how would it have stopped anything? How would you get the 535 members of Congress to produce any effective regulations even if you knew what it was? How will you pay for this new regulations, all of your promises while only taxing the super rich, make the economy grow to produce more jobs while reducing the incentive to earn more money and become one of the rich? Please show us a detailed map of your road to Hope and Change. Could you show us one bill you introduced into Congress during your long tenure to have stopped this disaster? How about one bill introduced in the Illinois legislature? Oh, none ... so its all talk and no action ... how exciting ... what will the future hold?

Senator McCain -- reverse the trend of deregulation and accomplish what? Strike out at the greedy people on Wall Street ... but what about the greedy real estate agents and mortgage brokers in Arizona where a significant portion of the greed actually took place. Would these be the same greedy people that you helped bail out of the Savings and Loan debacle? Besides a 9/11 Commission, how would you actually penalize those Greedy Wall Street Mongrels and their Washington Supporters?

Could you please direct me to one person who gets to ask questions to the candidates and have them ask on TV anything like these.

Please save me from more of the Change / Hope / Believe in Me / Details to follow after you elect me.

Tuesday, September 16, 2008

Please Help Me - You Need To

So, while I am a roll.

With all of the financial mess going on, as the world's financial geniuses melt down, I am wondering what a good course of action might be for the Government to take now.

For those of you living on another planet, lets review quickly. In this last couple of years, someone discovered that the boom in house values was being fueled by sub prime mortgages.

What is a sub prime mortgage? Simple. It is a mortgage given to an individual with no verifiable income to purchase a property that twelve months ago was worth half its now appraised value. Mortgage Giver makes this "sound" investment by charging "Mr. I Have No Money Only Hope That No One Ever Asks Me To Pay This Dumb Mortgage Before I Can Dump This Stupid Property At A Profit" a high interest that is also not being paid but being "amortized" into the mortgage creating a larger mortgage that is not getting paid. Mortgage Giver doesn't care because he is only going to sell it to Mr. I Must Have High Interest Earning Investments to prove to my shareholders that I am worth my large fee. Now this all works because the bankers hire accountants who understand accrual accounting. Now we will not bore you with that definition, suffice to say it does not mean cash in the bank only promise to pay.

Well, the bubble bursts, as they always do. Banks don't stop collecting most of the mortgage money only a normal amount except of course in Florida, Nevada, California and Arizona but those nasty accountants now make them write down many of those mortgages to their real value. Look out ... tens of billions of paper losses. Watch out for the crash.

So, that is the background to my story. If your really interested, please write and I can really bore you with more details.

Now, this brings me to my latest idea.

The Government bailed out Bear Stearns after they were greedy and chased the gold of was only a dream.

Fannie and Freddie liked make believe high earnings, so they bet your money. In fact, they got banks to led them money as "subordinated debt" to make more silly mortgages while promising those banks a high return on paper. So the Government had to step in a bail out the Fannie and Freddie, and of course screw the little investors but save those sophisticated banks who made dumb investments in Fannie and Freddie subordinated debt. This bail out should only cost you, 100's of Billions or more but whose counting.

Detroit has for years made fuel inefficient cars. Detroit has not been watching while Japan , Korea, and Germany made reliable cars and many of them fuel efficient. Congress somehow actually decided that Detroit must meet a reasonable miles per gallon in ten years. Well, Detroit decided in this election year to ask the Government for $50 Billion dollars in low interest loans so they can make the kind of cars that Japan and Korea are already making.

AIG, an extremely large insurance company, made some very bad bets on sub prime mortgages and real estate and well everything. So, the answer, ask the Government for a $40 Billion loan to cover their mistakes.

We will not complain about the excessively large salaries the executives at these companies get to lead their companies into disaster, that is for another day.

I have decided that the Government should give me a long term loan interest rate for say ... $10 Billion. Peanuts, you say. I say very necessary. See, if my friends think I can not afford to take my family on a suitable vacation every six months, buy a new car every two years, expand my house, buy new furniture, send my children to exotic schools, well they will be worried about the economy. If they do not see me buying things and spending money, they will decide that I might know something and start to cut back. The ripple effect could be disastrous. For every dollar, I don't spend it could cost the economy thousands of dollars or more.

So, Mr. Government ... loaning me money is in the economy's best interest. If I have more to spend then the economy will grow and you, the Government will collect more taxes to cover more stupid mistakes by people who make a lot of money to make better decisions.

Or you could let us all suffer the results of our bad decisions. You decide.

Monday, September 15, 2008

Its Been So Long

I have to apologize to my theoretical readership. If you are really there or to that part of my brain that thinks we are two, you may be wondering where I went. You may have thought I abandoned you. How could I do that to such a loyal following.

Well, no.

Procrastination, embrace it.

It is such a wonderful habit. If you can jump and look at the big picture, view the long term aspect of this approach to life which gets such a bum rap. Think about it. If you are one of those individuals who have an idea and just go and do it. If you are the guy who gets an assignment, school work or job related, and does it a week before it is due. Well, what do you have to look forward to?

Yes, that's right. You, I must do it now, person. You eliminate the joy of having a prize to anticipate. The feeling of anticipation that comes from a job completed. Yes, you do-it-now person, have now created a significant problem for yourself. Right after you made that check mark on your to-do list, which of course never gets very long, you have to look for a new task.

Tasks are not easy to find, not that there isn't always something to do. I mean you can make your bed every morning, take the garbage out, walk that stupid dog. You can do your tax return. You can balance your checkbook, sort your CD's alphabetically, arrange your books by subject by author by year published, or arrange your closet by color and topic. The problem you create by doing it now, is that you constantly have to be looking for that new task, and not just any task but one that needs doing right away.

But Procrastination allows the sweetness of having a task and being able to savor it, allowing that task to ferment into a fine brew. Let a task hang around for an extended period and you can make friends with it. You give it a name. You could share it with friends, let them take a stab it and then give it back.

So, all this time I have been writing this blog in my head. My head is now stuffed with topics and issues that need addressing. Problem is I never wrote them down, so I am stuck writing about procrastination.

Thanks for waiting for me.