Search The Web
Friday, April 30, 2010
More on the Oil Spill Catastrophe from The Daily Beast. And my two cents.
Can there be any further question ? If we cannot drill offshore safely, we should not drill at all. And it is clear that current drilling regs -- and perhaps technology -- do not adequately protect the environment. And we're not talking snail-darters here either, but fragile marine ecologies that sustain vital fishing stocks.
Thursday, April 29, 2010
Wednesday, April 28, 2010
Another enlightening article on the PIIGS' debt crisis.
The world economy cannot afford a contagion of sovereign debt defaults amongst the PIIGS nations, who, all told owe > 1.2T Euro !
Why would anyone root for Greek default ? Read the linked article...
Not sure if I agree with the author of this article, who seems innocent of the severe problems the Greek governments have typically encountered collecting taxes.
Enlightening article on Greece's deteriorating debt situation...
Interesting that the French and Germans are opposed to a Greek bailout, considering that German Banks and French Banks, between them, hold over 100B Euro in Greek debt...
Friday, April 23, 2010
How the movie " Cowboys and Aliens " was born...
The upcoming feature film Cowboys and Aliens ( I kid you not ) started out not as a book or even a graphic novel, but as a "one-sheet" - little more than a mocked-up movie poster - as shown in the linked timeline, courtesy of Variety.
True Conservatism and Conservation aren't totally at odds...
...and Environmentalists who fail to comprehend this fact will forfeit valuable allies in the fight to save the planet.
The collapse of empires does not always proceed at a glacial pace...
Niall Ferguson presents an intriguing thesis in this Foreign Affairs article.
A modest proposal to fix the financial system, from the Motley Fool... Sounds reasonable to me...
OK, I'll admit it. I've been pretty darn negative lately when it comes to financial reform. I've knocked the Dodd bill, criticized Krugman, and dismissed Geithner.
Am I just a grump who enjoys shooting down everyone else's ideas? I'd like to think not. I just want our government to put forth a comprehensive set of reforms that will actually help defuse the volatile financial system.
So what does that look like? I don't pretend to have an answer for everything, but I think the following are the most important areas that need to be addressed.
1. Regulate shadow banking
The "shadow" banking system is basically an off-the-grid financial market that sprung up so that financial institutions could make far more money than they could within the highly regulated traditional banking system. Troublingly, it was through the shadow market that companies like Lehman Brothers, Goldman Sachs, Morgan Stanley (NYSE: MS), Merrill Lynch, and Bear Stearns borrowed money to leverage themselves to untold heights.
The key here is to turn on the lights in the shadow markets and start regulating what goes on in these areas, particularly when it comes to participants' ability to lever up their balance sheets. As Walter Sobchak said in The Big Lebowski, "This isn't 'Nam ... There are rules." Or at least, there need to be.
2. Too big to fail
Though there's been plenty of jawboning about reducing "too big to fail," all we've seen so far is the opposite. JPMorgan Chase (NYSE: JPM) absorbed Bear Stearns and Washington Mutual, Bank of America (NYSE: BAC) took over Countrywide and Merrill Lynch, and Wells Fargo (NYSE: WFC) acquired Wachovia.
These banks were all too big to fail before, and now they're just too bigger to fail.
Regulators need to put hard limits on how large banks get, so that we don't have them holding a gun to the financial system's head when their bets go wrong. Sen. Sherrod Brown, D-Ohio, has proposed an amendment to a Senate bill that would require bank holding companies to limit nondeposit liabilities to 3% of annual U.S. GDP. And the calculation would include off-balance-sheet liabilities.
The specifics of Brown's amendment could be debated, but what's notable is that he's proposed a clear, specific measure to limit the size of banks.
3. Make banking boring
Thanks to deposit guarantees from the FDIC and dealings with the Federal Reserve, it's hard to call banks truly private institutions. For that reason, they should be focused solely on their primary objective -- taking deposits and making loans.
For a long time banks were prohibited from taking part in riskier activities, and it's time to resurrect that prohibition. Investing in banks should have the boring but dependable feel of investing in a utility, not the gut-churning excitement of a tech stock.
4. Crack down on derivatives
Keeping derivatives trading behind closed doors -- or operating "over the counter," as the insiders like to say -- makes for a fabulously profitable business for big investment banks like Goldman and JPMorgan, but it's often bad news for customers and risky for the financial system as a whole.
Putting derivatives on open exchanges is a huge step in the right direction. Another big issue -- particularly if we want to avoid another AIG (NYSE: AIG) disaster -- is to standardize and enforce the reserves that derivatives issuers hold to cushion against losses.
5. Eliminate stupid lending
Government types like to label this area "consumer protection." The way I see it, though, the banks have suffered just as much as consumers in most cases, as their own stupidity in lending money that shouldn't have been lent has come back to haunt them.
The reform solution here is simple: eliminate stupid loans. If you need 100% financing to buy a house, you probably shouldn't be buying a house. If you need a "teaser" interest rate to be able to afford your mortgage payment, you probably shouldn't be buying a house. And this includes the government's ill-conceived low-down-payment lending programs.
6. Discard Fannie and Freddie
While we're slapping at the government's overreaching hand, let's go ahead and put Fannie Mae (NYSE: FNM) and Freddie Mac out of their misery. Unfortunately, this can't happen particularly quickly because of their size and entrenchment in the system, but setting a timetable of a decade or so to defuse these financial nukes seems like it would be a big positive.
7. Reform the ratings agencies
If you have read Michael Lewis' The Big Short, you're probably acutely aware of how big a part Moody's (NYSE: MCO) and Standard & Poor's played in the buildup to the financial crisis. If nothing else, ratings agencies' businesses need to be realigned so that they are no longer paid by the companies that issue the bonds they are rating.
Join in
Think I've missed something important here? Join in the discussion by scrolling down to the comments section and sharing your thoughts on what needs to be done to reform the U.S. financial system.
We can no longer count on banks to pay steady dividends. Luckily, Fool Jordan DiPietro has found what he thinks is the best dividend stock out there.
Am I just a grump who enjoys shooting down everyone else's ideas? I'd like to think not. I just want our government to put forth a comprehensive set of reforms that will actually help defuse the volatile financial system.
So what does that look like? I don't pretend to have an answer for everything, but I think the following are the most important areas that need to be addressed.
1. Regulate shadow banking
The "shadow" banking system is basically an off-the-grid financial market that sprung up so that financial institutions could make far more money than they could within the highly regulated traditional banking system. Troublingly, it was through the shadow market that companies like Lehman Brothers, Goldman Sachs, Morgan Stanley (NYSE: MS), Merrill Lynch, and Bear Stearns borrowed money to leverage themselves to untold heights.
The key here is to turn on the lights in the shadow markets and start regulating what goes on in these areas, particularly when it comes to participants' ability to lever up their balance sheets. As Walter Sobchak said in The Big Lebowski, "This isn't 'Nam ... There are rules." Or at least, there need to be.
2. Too big to fail
Though there's been plenty of jawboning about reducing "too big to fail," all we've seen so far is the opposite. JPMorgan Chase (NYSE: JPM) absorbed Bear Stearns and Washington Mutual, Bank of America (NYSE: BAC) took over Countrywide and Merrill Lynch, and Wells Fargo (NYSE: WFC) acquired Wachovia.
These banks were all too big to fail before, and now they're just too bigger to fail.
Regulators need to put hard limits on how large banks get, so that we don't have them holding a gun to the financial system's head when their bets go wrong. Sen. Sherrod Brown, D-Ohio, has proposed an amendment to a Senate bill that would require bank holding companies to limit nondeposit liabilities to 3% of annual U.S. GDP. And the calculation would include off-balance-sheet liabilities.
The specifics of Brown's amendment could be debated, but what's notable is that he's proposed a clear, specific measure to limit the size of banks.
3. Make banking boring
Thanks to deposit guarantees from the FDIC and dealings with the Federal Reserve, it's hard to call banks truly private institutions. For that reason, they should be focused solely on their primary objective -- taking deposits and making loans.
For a long time banks were prohibited from taking part in riskier activities, and it's time to resurrect that prohibition. Investing in banks should have the boring but dependable feel of investing in a utility, not the gut-churning excitement of a tech stock.
4. Crack down on derivatives
Keeping derivatives trading behind closed doors -- or operating "over the counter," as the insiders like to say -- makes for a fabulously profitable business for big investment banks like Goldman and JPMorgan, but it's often bad news for customers and risky for the financial system as a whole.
Putting derivatives on open exchanges is a huge step in the right direction. Another big issue -- particularly if we want to avoid another AIG (NYSE: AIG) disaster -- is to standardize and enforce the reserves that derivatives issuers hold to cushion against losses.
5. Eliminate stupid lending
Government types like to label this area "consumer protection." The way I see it, though, the banks have suffered just as much as consumers in most cases, as their own stupidity in lending money that shouldn't have been lent has come back to haunt them.
The reform solution here is simple: eliminate stupid loans. If you need 100% financing to buy a house, you probably shouldn't be buying a house. If you need a "teaser" interest rate to be able to afford your mortgage payment, you probably shouldn't be buying a house. And this includes the government's ill-conceived low-down-payment lending programs.
6. Discard Fannie and Freddie
While we're slapping at the government's overreaching hand, let's go ahead and put Fannie Mae (NYSE: FNM) and Freddie Mac out of their misery. Unfortunately, this can't happen particularly quickly because of their size and entrenchment in the system, but setting a timetable of a decade or so to defuse these financial nukes seems like it would be a big positive.
7. Reform the ratings agencies
If you have read Michael Lewis' The Big Short, you're probably acutely aware of how big a part Moody's (NYSE: MCO) and Standard & Poor's played in the buildup to the financial crisis. If nothing else, ratings agencies' businesses need to be realigned so that they are no longer paid by the companies that issue the bonds they are rating.
Join in
Think I've missed something important here? Join in the discussion by scrolling down to the comments section and sharing your thoughts on what needs to be done to reform the U.S. financial system.
We can no longer count on banks to pay steady dividends. Luckily, Fool Jordan DiPietro has found what he thinks is the best dividend stock out there.
Ron Borges on Pats' 1st Round Draft Pick
Borges is if nothing else a consistent critic of the Pats. Sad to say I agree with his article, Patriots pick shows past shortcomings
Wednesday, April 21, 2010
Remembering Lou Clinton's 1962 Red Sox Season
Darnell McDonald's heroics last night - his game-tying home run and game-winning single - for some reason brought to my mind the 1962 Red Sox season and the heroics of little-known (today) Sox outfielder Lou Clinton.
For me, the highlight of that season was the Sox's doubleheader sweep of the Yankees, 9-3 and 5-4, at Yankee Stadium on September 9, 1962, in which both Clinton and indomitable reliever Dick Radatz played key roles.
In the first game, Clinton singled, tripled, homered, and made several excellent defensive plays, including, if I recall correctly, a sparkling skidding catch of a sinking Elston Howard liner. In the second, fireballer Dick Radatz picked up the win after pitching nine innings of relief !
For me, the highlight of that season was the Sox's doubleheader sweep of the Yankees, 9-3 and 5-4, at Yankee Stadium on September 9, 1962, in which both Clinton and indomitable reliever Dick Radatz played key roles.
In the first game, Clinton singled, tripled, homered, and made several excellent defensive plays, including, if I recall correctly, a sparkling skidding catch of a sinking Elston Howard liner. In the second, fireballer Dick Radatz picked up the win after pitching nine innings of relief !
Tuesday, April 20, 2010
A poem for tonight : a bit of Robbie Burns...
Schmalz has a place in the universe, well honored and deserved. Deny it at your own peril.
Monday, April 19, 2010
How long will Theo keep re-arranging deck chairs on the SS Dead Sox ?
Will Theo wait until Mid-May to make a move ? How long will he leave Tito hamstrung re: the bench, which features two pure DH's (Ortiz, Lowell), two infielders (Hall, Youkilis) as reserve outfielders, and no speed.
What to do ? IMHO...
1. Release Ortiz immediately and eat his salary. Make Lowell the DH.
2. Promote Josh Reddick from the minors and install him as the everyday left-fielder until Ellsbury's back.
3. Once he's healthy, put Ellsbury in center and let Cameron ride the pine.
4. Next time Drew's hang-nail acts up, put Ellsbury in left, Cameron in center, and Reddick in right.
What to do ? IMHO...
1. Release Ortiz immediately and eat his salary. Make Lowell the DH.
2. Promote Josh Reddick from the minors and install him as the everyday left-fielder until Ellsbury's back.
3. Once he's healthy, put Ellsbury in center and let Cameron ride the pine.
4. Next time Drew's hang-nail acts up, put Ellsbury in left, Cameron in center, and Reddick in right.
The real story of Paul Revere's Ride, courtesy of David Hackett Fischer
The eminently readable and informative account of Revere's Ride and the British retreat would be reason enough to purchase David Hackett Fischer's book, but there is so much more to this work, such as the portrait of Revere's upbringing, of the social history of Boston in the eighteenth century, and of the organization of the Minutemen.
Sunday, April 18, 2010
Early season Sox hard to watch...
Have to agree with Steve Buckley of the Herald. So far this season the Sox have shown precious little pitching and porous defense. Add a lack of timely or even professional hitting, plus questionable managerial or coaching judgment, and you have all the ingredients for a third-place finish in the AL East.
There's no excuse for not scoring with the bases loaded and no outs. None. And the blame for that has to be shared between the batters who stranded those runners and the manager. When you're not scoring runs--and this Sox edition is really challenged in that department--you need to change the game plan. Of course, it's hard when you have a depleted or limited bench. Or when you have guys who can't bunt to save their lives.
One likely consequence of perisisting with the current game-plan is that by the all-star break the Sox bullpen will be burned out, except maybe for Manny Delcarmen, who for years now has been channeling Eric Gagne...
There's no excuse for not scoring with the bases loaded and no outs. None. And the blame for that has to be shared between the batters who stranded those runners and the manager. When you're not scoring runs--and this Sox edition is really challenged in that department--you need to change the game plan. Of course, it's hard when you have a depleted or limited bench. Or when you have guys who can't bunt to save their lives.
One likely consequence of perisisting with the current game-plan is that by the all-star break the Sox bullpen will be burned out, except maybe for Manny Delcarmen, who for years now has been channeling Eric Gagne...
Saturday, April 17, 2010
Vladimir Nabokov on Fiction
From Nabokov's essay on Lolita...
"There are gentle souls who would pronounce Lolita meaningless because it does not teach them anything. I am neither a reader nor a writer of didactic fiction, and despite John Ray's assertion, Lolita has no moral in tow. For me a work of fiction exists only insofar as it affords me what I call aesthetic bliss, that is to say a sense of being somehow, somewhere, connected with other states of being where art (curiosity, tenderness, kindness, ecstasy) is the norm. There are not many such books."
"There are gentle souls who would pronounce Lolita meaningless because it does not teach them anything. I am neither a reader nor a writer of didactic fiction, and despite John Ray's assertion, Lolita has no moral in tow. For me a work of fiction exists only insofar as it affords me what I call aesthetic bliss, that is to say a sense of being somehow, somewhere, connected with other states of being where art (curiosity, tenderness, kindness, ecstasy) is the norm. There are not many such books."
William Goldman on The New Yorker
In the Foreword to the anthology “The First Time I Got Paid for It : Writers' Tales from the Holywood Trenches “, William Goldman describes how enthused and inspired he was, upon reading a collection of stories by Irwin Shaw, especially one entitled ‘The Eighty Yard Run’ :
“Well, ‘The Eighty Yard Run‘ is about a football player. Shit, I remember thinking, can you do that ? Can you write about stuff I [sic] care about ? The New Yorker, at the time, had begun its endless publishing of bloodless stories about, say, an American couple, unhappily married, and they go to Europe maybe to change things and they end up in the Piazza San Marco where in the last paragraph a fly would walk across the table, and the story would always end like this : ‘and she understood.’ "
“Well, ‘The Eighty Yard Run‘ is about a football player. Shit, I remember thinking, can you do that ? Can you write about stuff I [sic] care about ? The New Yorker, at the time, had begun its endless publishing of bloodless stories about, say, an American couple, unhappily married, and they go to Europe maybe to change things and they end up in the Piazza San Marco where in the last paragraph a fly would walk across the table, and the story would always end like this : ‘and she understood.’ "
Friday, April 16, 2010
Welcome to Cafe Minerve
This blog's title is an homage to the old Cafe Minerva in Boston. Since that particular name was already in use at Blogger, I settled on an alternative which, to some, may seem all too appropriate. As for the Cafe Minerve's eclectic carte du jour, the Management makes no apology, and encourages those consumers susceptible to indigestion to look elsewhere.
Subscribe to:
Posts (Atom)