Brigham's Almanack

Eyecatchers 29 November - 5 December 2010

2010-12-04T07:53:00.000-08:00

LEADING THE WEEK:

Without a doubt, the story underpinning all the other stories this week was WIKILEAKS. It started at the beginning of the week, with the release of hundreds of thousands of secret government documents and cables.

The mass release left media outlets all over the world asking themselves what guidelines to use when deciding to publish or not to publish.

Amongst the most entertaining leaks were the revelations of American diplomats' thoughts of leaders around the world. My favorites:

Nicolas Sarkozy: "Has a thin-skinned and authoritarian personal style" and is "an emperor with no clothes."
Silvio Berlusconi: "Feckless, vain, and ineffective as a modern European leader."
Dmitry Medvedev: "Plays Robin to Putin's Batman" and is "pale and hesitant."
Mahmoud Ahmadinejad: "Like Hitler."

While these highlights were entertaining at first glance, their release sparked a global diplomatic crisis for the United States.

As Hilary Clinton seethed over the leaks, the Economist's Democracy in America blog saw the upside of the leaks.

On top of the current batch of leaks, WikiLeaks' next target is widely expected to be a major US bank.

Of course, that new round of leaks might be delayed while WikiLeaks founder Julian Assange runs from Interpol, who announced a "red notice" this week for his arrest in connection to an ongoing rape investigation.

Interesting.....I didn't know Interpol got involved in Scandinavian rape cases.

And then the site came crashing down. Allegedly, patriotic American hackers attacked the site so many times that its web host could no longer keep it running. So now WikiLeaks is in a fight to survive.

IN OTHER ONLINE NEWS

Twitter is looking to raise $3bn to fuel its drive to become a profitable business.

Meanwhile, the ever-profitable Google attempted to buy Groupon for $6bn. However, the latest word has it that Groupon are rejecting Google's offer.

THE DEFICIT BATTLE CONTINUES

Each day this week brought us closer to Friday's highly anticipated release of the final Simpson-Bowles deficit reduction plan (below):

DeficitPanelReport_120110

Momentum for an actionable deficit plan finally began to emerge, with the release of several alternative plans. Paul Krugman pointed out the Progressive Deficit Plan on his blog. Ezra Klein spoke with commissioner Andy Stern, who has his own plan, which tackles not just America's budget deficit but also its long-term government investment deficit. As he points out, with the short-term incentives offered by elections, it's tough for elected officials to vote for investment in the future at the expense of voters in the present. Klein's story also has links to plans from Rep. Jan Schakowsky and Alice Rivlin. And of course, there's always Paul Ryan's Roadmap for America's Future, which one could argue opened up the debate in the first place.

Speaking of Paul Ryan, he wrote in Investor's Business Daily this week that the Fed should refocus on its original mission of ensuring price stability rather than its more recent goal of promoting "maximum employment."

On the other hand, Paul Krugman argues that if Republicans force the Fed to focus only on a stable dollar we'll be locking ourselves into the same "prison" the Spanish have found themselves in as a result of being trapped by the Euro.

THE REST OF THE ECONOMY....

...is still grinding along slowly. Friday's payrolls numbers and unemployment rate disappointed massively, with global markets dropping on news that unemployment had risen again to 9.8%.

And while it's not new news (in fact, it was out last month and I just didn't notice), a whopping 14% of the US population is using food stamps.

COMINGS AND GOINGS...

Former White House budget director Peter Orszag is widely expected to take a senior role at Citi. As a protege of Robert Rubin, who joined Citi after serving as Treasury Secretary in the Clinton administration, his choice comes as no surprise.

On the Senate floor, Sen. John McCain saluted Russ Feingold, who lost his re-election campaign last month. And Chris Dodd yielded the floor for the last time.

FOR THOSE STILL ON THE POLITICAL SCENE

Obama froze pay for federal employees. Speaking of trimming the expenses, even new Congressmen will be sleeping in their offices.

Joe Scarborough tells the GOP that they should take on Palin. The not-so-secret secret? He's right. Here's hoping they listen.

Boehner and McConnell told Obama to heed the voters. And then their earmark ban failed. (Quiz for Wisconsin voters: guess which of your senators was one of only seven Democrats to vote for the ban?)

On the other hand, food safety reform passed in the Senate but may be blocked in the House due to a technicality.

OUTSIDE THE STATES

The rise of emerging markets is the world's biggest trend. That must be why The Economist examined the dangers of a rising China.

The US and South Korea just agreed on a new trade agreement, making it the biggest trade pact since NAFTA.

And Ireland is for sale? (The page is a tad old, but still classic).

OTHER GOOD STUFF

Bill Gates discusses trade, optimism, and aid in Africa. Which is timely, as he (along with Warren Buffett) top Foreign Policy magazine's list of the Top 100 Thinkers.

Drew Brees was selected Sports Illustrated's Sportsman of the Year. Meanwhile, Derek Jeter's been negotiating with the Yankees for more money.

Russia trounced England (represented by the ultimate triumvirate: David Cameron, Prince William, and David Beckham) in the race to host the World Cup in 2018.

In an even bigger (and more confusing) upset, Qatar beat the US and Australia for the right to host in 2022.

Qatar? Are you serious? Nate Silver's 538 blog looks at just HOW RIDICULOUS that choice is.

HAPPY HOLIDAYS

It's that time of the year. Obama celebrated Hannukah this week and the White House Christmas tree is up. Check out the time lapse video here.

This Week's Eyecatchers (22 - 28 October)

2010-11-29T12:07:00.000-08:00

The Hot Button Issue? Air Security Meets Holiday Travel

Scientists finally resolved the TSA scanner objections. Now if only they could figure out how to prevent delayed flights around the holidays, we'd really be getting somewhere.

But would you look at how pretty the flight patterns are. The New York Times' Revkin shares one of his favorite animations, which tracks our airborne movements.

Other Cool Stuff

The History Channel attempts to translate Top Gear into American. But can it be done? As the article points out: The genius of the enterprise, however, lies in the byplay and interaction of the hosts, Jeremy Clarkson, Richard Hammond and James May. They are smart, talented middle-age men obsessed with mutual ego destruction, adolescent antics and cars. And they pursue those obsessions so amusingly that, because of the BBC’s worldwide distribution, a generous budget and hundreds of clips on YouTube, a large chunk of the world’s population loves them. Let's face it. No matter how hard you try, you just can't replace Jeremy Clarkson's ridiculousness. Like that time he drove a Rolls Royce into a swimming pool. Or raced a rock climber up a mountain.

Or how about that time they raced a Bugatti Veyron against a fighter jet? Or chased an SUV with a pack of foxhounds? (Part 1 and Part 2.)

Weigh in: What's your favo(u)rite Top Gear moment?

Looking for a job? Goldman Sachs offers some crucial interview tips.

And the game everyone was playing over the holiday? Fix the US budget deficit! It's fun for the whole family!
What would you cut? What would you save?

This is probably the best NYTimes graphic since their '09 Thanksgiving food search graphic. Which of those recipes did you Google this year?

But back to the deficit.....Ezra Klein says the numbers add up, but not the votes. And the Washington Post points out five myths about cutting the deficit.

Consensus finally begins to form around deficit fixes. And Greg Mankiw writes why the Simpson-Bowles plan works.

In other economic news:

The Fed projects elevated joblessness through the 2012 elections. Let's see what the Tea Party thinks of that. But don't make the Fed itself a political football.....Tim Geithner warns the GOP not to politicize the Fed.

Sad news of the week: Velma Hart, the woman who confessed her financial fears directly to Obama in a town hall meeting lost her job. And the business community says Obama's economic outreach is not enough.

Meanwhile, Meredith Whitney found a new job, starting her own rating agency. Wonder what she'll give the US government to begin with. And good luck to all those companies out there vying for a AAA rating. Think she'll be pretty stingy with those.

On the global scene.... ... it was all about Ireland.

First they didn't want a bailout. Then they applied for one. Which was probably a good thing, since even Mohamed El-Erian thinks they're screwed. “What you advise your sister in Ireland now is that you’d say take your money out of an Irish bank and put it in another bank headquartered elsewhere,” El-Erian said. “That’s what happened in Argentina and in emerging economies. People worry about their savings."

Some other great quotes about Ireland: from politicians, officials, and commentators:

1. Spain is not Greece - Elena Salgado, Spanish Finance
Minister, ~February, 2010.
2. Portugal is not Greece - The Economist, 22nd April, 2010.
3. Greece is not Ireland - George Papaconstantinou, Greek
Finance Minister, 8th November 2010.
4. Spain is neither Ireland nor Portugal - Elena Salgado,
Spanish Finance Minister, 16th November, 2010.
5. Neither Spain nor Portugal is Ireland - Angel Gurria,
secretary-general of the Organization for Economic Cooperation
and Development (OECD), 18th November, 2010.

But after proposing a four year austerity plan, the Irish finally got their bailout.

But Spain will be the biggie!!!

Back in the US....

The Republican dark horse still has no name. Unless you count Chris Christie?

And Al Gore finally conceded that corn ethanol was not a good policy. Thank you for coming around, Mr. Gore.

Other people changing their stripes? The pope himself! Finally the Vatican shows signs of softening its hardline stance on condoms.

And if you were really off the grid this past week,

I can't wrap this post up without mentioning KOREA.

The North shelled the South, killing and injuring several people and sparking an international uproar.

Perhaps they'll finally sit down at a table and negotiate an effective peace accord. Or perhaps they'll stay like the ANGRY BIRDS, who distract the rest of the world day in and day out and never seem to be able to make peace.

What's on tap this week?

More WikiLeaks. The New York Times has the war logs. The Guardian has the US Embassy cables. Wikipedia's co-founder, Larry Sanger, considers WikiLeaks an enemy not just of the American government, but also of the American people. Perhaps military and diplomatic secrets should remain secret after all?

Other things to look forward to:

December arrives, Chanukah begins, and back in DC the Republicans will meet with Obama.

This Week's Eyecatchers (14 - 20 November)

2010-11-21T04:58:00.000-08:00

The two most overdue news items of the week:

Apple adds the Beatles to the iTunes catalog.

Will and Kate are getting married! Watch their first interview here. Will you be at the wedding?

In other news:

Ted Koppel strikes out at Olbermann, O'Reilly, and the death of real news. View Olbermann's response here.

Plus, MSNBC suspends Joe Scarborough, proving that they are not only more nonpartisan but also even more stupid than we all thought. C'mon guys..... Haven't we had enough of this?

Economically speaking:

WIRED Magazine shows how the global economy was networked for failure. Sounds roughly similar to one of former Secretary of the Treasury Robert Rubin's conclusions from the Mexican financial crisis, Asian financial crisis, and the tech bubble.

The FT's Lex thinks Californians are dreaming.

Quantitative Easing takes the stage for an encore:

Nouriel Roubini says it's not inflationary. The conservative folks at E21 (including Cliff Asness, James Chanos, Niall Ferguson, Claremont McKenna's Greg Hess, and William Kristol) tell Ben Bernanke why it's bad.

YouTube tells us what it is: http://www.youtube.com/watch?v=PTUY16CkS-k
(if you click on only one link from this post, this is the one to choose)

The New York Fed's Bill Dudley says it's not intended to weaken the dollar.

Bernanke supports Obama and criticizes China.

The Economist blogs: Does monetary protectionism lead to trade protectionism? And Nick Kristof asks asks if we’re in a Banana Republic or a Hedge Fund Republic.

Budgeting Away

Fareed Zakaria says it's time for the US to face up to the deficit. Joe Klein says we're ignoring everything else.

The Economist lays out the budget mess and tells the newly elected government how to "Confront the Monster." Which brings us to...

...The New Freshman Class of the 112th Congress...

...who arrived this week in DC to learn how to be Congresspeople. And finally saw firsthand the lack of professionalism and general poor form of the Tea Party Patriots, who inundated certain members' new Blackberries with a flood of voicemails.

I'm sure they all paid attention close attention to their ethics classes as Charles Rangel was formally censured.

And don't forget: Lisa Murkowski (did I spell it right?) won her write-in campaign in Alaska.

Who's the coolest new member? Could be ex-reality-TV-star and new Wisconsin representative Sean Duffy, who even got to take a front-line role in the crackdown on earmarks, as did Obama, McConnell, and hopefully the rest of our government. (Perhaps this item should have been in the overdue news stories at the top of the post.)

What else happened this week?

Everyone bitched about airport security. Roger Ailes bitched about everything else, particularly Obama's failures, NPR's "Nazis", and Jon Stewart's craziness.

Looking forward to 2012 yet?

Sarah Palin is. Take a look at the team hoping to put her in front of the GOP pack for 2012. Or take a look at the GQ profile of her Democratic counterpart in 2008, Joe Biden.

Could it be Bloomberg/Scarborough in 2012? Wouldn't that be fun? However there's still no Bloomberg or Scarborough for Prez contract on inTrade. While they'd probably opt for the Independent ticket, tn the race to be the GOP nominee, both are trading at just about zero.

Fancy taking a punt? The contract on whether or not Bloomberg will announce trades at an unimaginably wide spread, implying anywhere froma 10 - 85% chance of him doing so.

Other contracts for 2012:
Romney's down from 24.8 last week to 22.6 this week.
Dems have a 56% implied probability of holding the Presidency.
Trump for President 2012? Please, God, no! Thankfully it's not really trading and only implies a tiiiiiny probability for the "The Donald."

In Europe

The big story was the potential Irish bailout. To bail, or not to bail, that is the question? Whether 'tis nobler....

The trusted folks at the Economist show how they got into this mess and provide their opinion on how to get out while saving the euro.

Shameless plug of the week

Take a quick gander at the current state of the European property market, in an article by my former flatmate Steve.

And finally something that does some good in this world.....Microfinance

The question of the week: is microfinance in India becoming like the subprime market in the US?
And should there be a cap on the interest rates microlenders charge?

Looking forward to the next week?

Thanksgiving in the US means lots of food for everyone. And are you ready for some football? New England at Detroit at 12:30 ET, New Orleans at Dallas at 4:15 ET, and Cincinnati at NY Jets at 8:20 ET.

Go to bed early or stay up all night so you can be the first one at the store on Black Friday.

See you next week,
Chris

Weekly Update -- 14 November 2010

2010-11-14T03:51:00.001-08:00

This weeks' eyecatchers:

Zoellick thinks the gold standard should be re-examined? Joy for all the gold bugs and would-be Fed-enders. Roubini thinks fixed exchange rates are crap (and for once I agree with him). The Economist picks up the question and asks if there's a better way to organize the world's currencies.

Alan Greenspan weighs in.

Jim Rogers says Ben Bernanke doesn't understand economics.

Tax cut compromise? Erskine Bowles and Alan Simpson have a way to save the fiscal day. And economists in Europe suggest a more optimal tax system.

Obama and Cameron go East! China goes into "Oil Overdrive." And the Economist looks at the future of Chinese takeovers in general.

High frequency trading finally gets its own lobby in Washington DC.

Nate Silver has an intriguing analysis of California's failed Prop 19. And Andrew Ferguson discusses "Amerijuana." Is it finally time for an honest analysis of drug use in America (and perhaps elsewhere as well)?

InTrade says Dems win the presidency in 2012. In the market for a GOP nominee? Romney trades at 24.8. Palin at 18.2. John Thune surprises at 13.6, topping the Iowa-and-NH-trotting Pawlenty at 7.7. Another surprise as Wisconsin's Rep. Paul Ryan trades ahead of Eric Cantor and Rudy Giuliani.

And George W. Bush reflects on his Decision Points. Reviews here, here, and here.

Back to the Badger State

2010-09-15T15:07:00.000-07:00

Even though I've been away from home for awhile, politics back in Wisconsin still feel like my "local politics." Because of that, and despite the fact that all the big papers and bloggers nationwide are focusing their attention on the Tea Party Express and the impending disaster it appears to be causing in New York and Delaware, I thought I'd focus on a smaller race, one off most peoples' radar screens.

My attention was focused on Chad Lee, the winner of the WI-2 GOP primary. With 99% of precincts reporting, he won 53% to 47%, taking 24,882 votes (vs. 22,378 for Peter Theron, who looked like he was barely campaigning).

Assuming all 47,260 GOP primary voters show up and vote for him in the general election, he'll have to bring out a LOT more of the base and convert some middle-of-the roaders. While I don't have any data on the district's historical voter turnout, the 2000 census put the population at 670,457, so even in a mid-term election, it's probably safe to assume at least 125,000 voters will show up on November 2nd.

He'll also have to get over the lack of name recognition, especially when compared to Tammy Baldwin, a widely known incumbent who's been in office since 1999 and took 70% of the vote in 2008 (when running against Theron). This may be difficult given he's still only raised $53,663 through Aug. 25th vs. Baldwin's $931,147 and has only $4,081 on hand to fight her $775,775 war chest.

The odds don't look too good for Mr. Lee right now. But you never know. After all, Paladino took the GOP gubernatorial nod in NY, O'Donnell came from nowhere to win the GOP Senate nomination in Delaware, and a former MTV Real World star is the GOP candidate for Dave Obey's well-worn seat in Congress. Strange things are happening this year. Maybe we shouldn't count out the underdogs going into the general elections.

Importing Our Way to Lower Growth: Five Thirty Eight on GDP

2010-09-14T12:19:00.000-07:00

Nate Silver at the Five Thirty Eight blog must be getting bored by all the election statistics because now he's turning his attention to economic statistics. Obviously, economic data is waaaaaaay more interesting that polling data.

Using his data-crunching skills, he offers an intriguing analysis of the US second quarter GDP figure released the other week. Rather than seeing the weaker-than-expected figure as all bad, he breaks it down by category and shows that it really demonstrates the ability of one factor to skew the calculations.

As he writes (along with the authors of countless macroeconomics textbooks), GDP can be broken into four distinct categories:

1. Personal consumption expenditures, which account for 70.52 percent of G.D.P.
2. Gross domestic investment, which accounts for 12.61 percent of G.D.P.
3. Exports net of imports, which subtracts from G.D.P. because the United States imports more than it exports
4. Government spending, which accounts for 20.53 percent of total G.D.P.

Interestingly, he shows that consumers are increasing their spending (although not at a "barn-burning rate"), that government spending was responsible for over half of last quarter's growth, and that private domestic investment grew as well.

However, due to a significant increase in imports relative to exports, the net imports factor reduced 2Q GDP by 3.37%. "This is the largest decrease caused by the netting of exports and imports going back to the first quarter of 1980. In addition, a quarter-to-quarter increase in imports this large has not occurred since the first quarter of 1984, when imports increased 36.2 percent from the previous quarter. Obviously, this means it’s a fairly rare event...and shouldn't be counted on to have the same effect in the third quarter calculation."

Now doesn't that make you feel just a bit more bullish on the economy?

Salman Rushdie Weighs in on NYC Mosque

2010-09-14T11:11:00.000-07:00

Renowned novelist Sir Salman Rushdie, no stranger to controversy, has finally offered his thoughts on the "Ground Zero Mosque" debate. The AP reports that while Rushdie "is not a great fan of organized worship [he] believes an Islamic center and mosque should be permitted two blocks from ground zero."

Having personally been a target of the extremist version of Islam that brought down the World Trade Center nine years ago, Rushdie's opinion displays a dedication to freedom and a faith in reason that we should all share.

Likewise, the UK's Daily Mail quotes Rushdie as opposing the burning of Korans. Ever the author, he said simply: "I'm not in favour of burning books."

If I may add my own thoughts to his, the same commitment to preserving the freedoms of religion and expression that are immortalized in our Constitution protects both those who would choose to build a mosque in New York and those who would choose to burn the Koran. However, while religious tolerance should prevent anyone from burning a holy book of any sort, be it a Bible, a Torah, or a Koran, neither prejudice nor grudge should prevent worshipers from being able to build a church, a synagogue, or indeed, a mosque in the location of their choosing. Of course, if local zoning were to prevent the construction of all of these in that location and did not discriminate by religion, that would be another story. However, that's certainly not the case here. I would be astonished if you could argue why a church or synagogue should not be built in the exact location in question. And if you cannot make that case, then the root of your argument, no matter how much it tries to be sensitive to the memories of New Yorkers, is still based on discrimination.

As for Donald Trump's recent offer to buy the property from investors for 25% more than they paid, on the condition that they wouldn't build their Islamic center and mosque within five blocks of Ground Zero, while I appreciate his reported motives, the logic is nonetheless faulty. If two blocks or five blocks are both off limits, who is to say that twenty blocks or fifty blocks shouldn't be off limits as well? While we're at it, why don't we "protect" the entire island of Manhattan, or all five boroughs of New York City? Why not New York state? Or why not disallow construction of new mosques anywhere in the nation? You simply can't begin to draw lines around this issue without blurring the lines of the Constitution.

I feel compelled to share Christopher Hitchens' reaction to the Ayatollah Khomeini's fatwah against Rushdie following the publication his novel, The Satanic Verses. Hitchens summarizes his initial thoughts on the matter in his recent memoirs, Hitch-22. "I felt at once that here was something that completely committed me. It was, if I can phrase it like this, a matter of everything I hated versus everything I loved. In the hate column: dictatorship, religion, stupidity, demagogy, censorship, bullying, and intimidation. In the love column: literature, irony, humor, the individual, and the defense of free expression."

As Americans, we should ask ourselves which of those traits we want to have characterize our nation and our lives. While I would personally argue for removing religion from the "hate" column, I think we should align ourselves with Mr. Hitchens and Mr. Rushdie, who though they may have been been born outside our shores, embody the values that the star spangled banner is meant to symbolize.

All You Want for Christmas is IPAD

2010-09-13T12:03:00.001-07:00

Tech geeks around the world are abuzz over the possibility that Steve Jobs' Apple may break from tradition and release a next-gen iPad just before the holiday season. As a massive fan of the first version, I confess to having mixed feelings. On the one hand, I was hoping to be ahead of the tech curve for at least a year. On the other, I recognize the shortcomings in the current iPad and (while I won't be upgrading quite so soon) can't wait to see an iPad complete with more memory, FaceTime, and who knows what else.

For more, check out CrunchGear.com 's take on it.

Dodd, Frank and Financial Reform: A Different Record

2010-09-13T11:23:00.000-07:00

I recently finished reading Karl Rove's Courage and Consequence. Among other interesting revelations was the back story of the would-be-rescuers of our financial system, Congressman Barney Frank and Senator Chris Dodd.

One bill would have subjected Fannie Mae and Freddie Mac to the kinds of federal regulation that banks, credit unions, and savings and loans have to comply with. No Democrat supported it and, most importantly of all, Senator Chris Dodd threatened to filibuster if Banking Committee chairman Richard Shelby, Alabama's senior senator, attempted to bring it to the floor. Dodd got his way--and thus helped pave the way to the largest financial crisis since the Great Depression
....
the leading reform opponents--this tale's true villains--were Democratic congressman Barney Frank of Massachusetts and Connecticut senator Chris Dodd. Frank first dismissed our fiscal warnings, suggesting administration officials would "exaggerate a threat of safety and goodness [to] conjure up the possibility of serious financial losses to the Treasury, which I do not see" and called Fannie and Freddie "fundamentally sound financially." Later, Frank went so far as to argue that this "is an artificial issue created by the administration. . . . I don't think we are in any remote danger here." Even as Fannie and Freddie collapsed and helped drive the financial crisis of 2008, Frank labeled Bush's call for reform "inane." Dodd was less angry than Frank--though this could be said of virtually everyone on Capitol hill--but he was just as wrong in his diagnosis of the problem and his opposition to reform, saying in 2004 that these companies were "one of the great success stories of all time." As Fannie and Freddie spiraled downward, Dodd suggested Bush "immediately reconsider his ill-advised" call for reform. Dodd had received preferential treatment on his mortgages from one of the biggest bad actors in the lending business, Countrywide. Despite this--and proving there is nothing as brazen as a politician with a sweetheart mortgage deal and no conscience--Dodd went on after Fannie and Freddie were rescued with taxpayer dollars to attack the Bush administration for not recognizing that they were in trouble. "Why weren't we doing more . . . I have a lot of questions about where was the administration over the last eight years." Once the problem helped spark a crisis, Frank and Dodd voted in 2008 for the Bush administration's reform bill, which they had opposed in 2005. It was perhaps the most blatant case of hypocrisy I have witnessed in Washington, where hypocrisy is common currency
....
Among those Democrats who backed Dodd's filibuster and opposed reform was the freshman senator from Illinois, Barack Obama. He was the third-largest recipient of campaign gifts from Fannie and Freddie employees in 2004. Since winning the White House, he has pointed to the economic problems he "inherited," but he has never owned up to his role in creating them.

For more insights from the inside, I highly recommend picking up your own copy of Rove's book.

Back to the Future

2010-09-11T09:56:00.001-07:00

Quote from Time magazine in September 1992... sound familiar?

"The US economy remains almost comatose. The slump already ranks as the longest period of sustained weakness since the Depression. The economy is staggering under many “structural” burdens, as opposed to familiar “cyclical” problems. The structural faults represent once-in-a-lifetime dislocations that will take years to work out. Among them: the job drought; the debt hangover; the banking collapse; the real estate depression; the health care cost explosion and the runaway federal deficit."

Something to Remember on the 2nd of November

2010-09-11T09:44:00.000-07:00

A Congressman was seated next to a little girl on an airplane so he turned to her and said, "Do you want to talk? Flights go quicker if you strike up a conversation with your fellow passenger." The little girl, who had just started to read her book, replied to the total stranger, "What would you want to talk about?" "Oh, I don't know," said the congressman. "How about global warming, universal health care, or stimulus packages?" as he smiled smugly. "OK," she said. "Those could be interesting topics but let me ask you a question first. A horse, a cow, and a deer all eat the same stuff - grass. Yet a deer excretes little pellets, while a cow turns out a flat patty, but a horse produces clumps. Why do you suppose that is?" The legislator, visibly surprised by the little girl's intelligence, thinks about it and says, "Hmmm, I have no idea." To which the little girl replied, "Do you really feel qualified to discuss global warming, universal health care, or the economy, when you don't know $&#%?" and, then she went back to reading her book.

Gartman on Central Bankers

2010-09-11T09:28:00.000-07:00

I've been going through some old articles and quotes I sent to myself over the course of the past year, intending to post them here. While I work my way through the others, here's a great comment from Dennis Gartman, editor of the Gartman Letter, from early June, when European central bankers were truly trapped between a rock and a hard place by the issue of a potential European sovereign default.

We see the position that the European monetary authorities find themselves in at present to be quite an impossible one, for if they take the actions that most would take,… i.e., to tighten monetary policy…. It will serve only to weaken the economy there and bring out more, rather than less selling of the currency. Or if they move to ease monetary policy, the effect would be even more severely bearish, for those who’d bought the EUR predicated upon a belief that the authorities were “Bundesbanker-esque” would have no choice but to abandon their thesis, sell the EUR and turn elsewhere for investment. Or if the authorities chose to do nothing, the market will attack them for their inactivity. They are damned if they do; damned if they don’t and damned if they’ve no idea what to do. We do not envy them their position, for they lose at every turn.

A Nod to the Well-Dressed

2010-09-11T08:55:00.000-07:00

It's not every day I get to brag about how fashionable and stylish my friends are. After all, the banking crew are a pretty simple group when it comes to all things sartorial. All the more reason to salute Valerie Whitacre, appropriately singled out by the Vogue blog on London Fashion's Night Out. Hopefully they won't be too upset that I've borrowed their photo and put it here. Congrats Valerie!

Time Flies: 8 Years in 3 Minutes

2010-06-01T14:20:00.000-07:00

There are certain things online which can only be described as "cool." This is one of them.

Living My Life Faster - 8 years of JK's Daily Photo Project from JK Keller on Vimeo.

What I find most impressive is the fact that this guy actually had the dedication to keep this project going for so long.

Something Special for President's Day

2010-02-15T13:24:00.001-08:00

Finally the presidential countdown everyone's been waiting over 220 years for. The folks at nerve.com put together this list of The Top 43 Sexiest US Presidents of All Time. I don't want to spoil the fun, but let's just say that the number one spot came as something of a surprise. Enjoy.

In addition, lest we forget the history behind the holiday, you may find it refreshing to reflect on George Washington's first inaugural address. I admit I hadn't looked at it since my freshman government class, but two parts are especially nice:

"No people can be bound to acknowledge and adore the Invisible Hand which conducts the affairs of men more than those of the United States. Every step by which they have advanced to the character of an independent nation seems to have been distinguished by some token of providential agency; and in the important revolution just accomplished in the system of their united government the tranquil deliberations and voluntary consent of so many distinct communities from which the event has resulted can not be compared with the means by which most governments have been established without some return of pious gratitude, along with an humble anticipation of the future blessings which the past seem to presage."
"There is no truth more thoroughly established than that there exists in the economy and course of nature an indissoluble union between virtue and happiness; between duty and advantage; between the genuine maxims of an honest and magnanimous policy and the solid rewards of public prosperity and felicity."

Of course, should you want something a little more current, here's Obama's inaugural address from last winter. You have to admit, the guy sure knows how to give a good speech. (Audio quality's a bit weak, but it's from C-SPAN. I would have included the AP version, but they decided to split it into too many parts.)

Happy Valentine's Day

2010-02-15T12:22:00.000-08:00

Last week, a prudish headmaster at a primary school here in the UK found his actions at the center of global headlines when he and his administration banned the sending of Valentine's Day cards on the school's premises. His argument for it was simple. Children are not capable of understanding relationships. He seems to have missed two key points. First, looking at the "adults" that surround me on a daily basis, sometimes I have to wonder how well even they understand relationships. And second, primary school is when kids are supposed to learn about the birds and the bees. Try to imagine life without the pre-adolescent aches and pains of your first crush. Would you rather that came when you were 20? Then again, I suppose sometimes those pains continue long into adulthood.

Giles Coren, of the Times of London, writes in this Saturday's edition that "sendin' Valentine cards learns kidz 'ow to rite," a skill that seems neglected enough in schools without banning the sending of sweet heart-shaped cards.

Deficit or Unemployment? That Is Not the Question

2010-02-09T11:30:00.000-08:00

In the face of sovereign debt worries making waves in global financial markets and an extraordinarily imbalanced budget (recognized even by the folks at Moody's, who have a bit of a tendency to underestimate risk) from President Obama, Paul Krugman suggests that the current fear-mongering over the US budget is reminiscent of "the groupthink that took hold during the run-up to the Iraq war." His carefully-considered opinion is that the government should focus on tackling that which, based on recent writings, he regards to be the greatest dilemma of the current recession--unemployment.

Despite Krugman's dismissal of budget concerns, given the insanely high projected debt-to-GDP ratio, the government should ABSOLUTELY be focusing on the matter. Nonetheless Krugman is right that unemployment has significant short- and long-term consequences as well. So perhaps our policymakers can act like economists, make a bit of a trade-off, and try to deal with both problems at the same time. There's no reason to focus entirely on problem X, unemployment, while ignoring problem Y, the deficit. Of course, the remedies for one could hinder progress toward solving the other. Then again, that's a challenge macroeconomists and policymakers must always face. There is no reason for them to shirk now, when it is critical that we deal with both issues.

Porker of the Year

2010-02-09T11:21:00.000-08:00

It's official--Barney Frank has won the dubious distinction of being "Porker of the Year" in the US Congress. This annual award, chosen by Citizens Against Government Waste could not have gone to a better politician.

In related but sadder news, former "King of Pork," John Murtha died earlier this week. A decorated Vietnam veteran, he became most famous for passing out the pork and being amongst the first senior Democrats to turn against the Iraq war. His now-open seat could continue to shift political momentum should a Republican take it, although it will not dramatically tip the balance of power in the House.

Putting the "Pork" back in "Pork Spending"

2010-01-30T00:32:00.000-08:00

Here's a new reason for a not-so-new play on agricultural commodities.

Argentina's president, Cristina Fernandez, has emerged as a leading spokesperson for the global pork industry. In a piece of truly in-depth journalism, the Associated Press reports that she "thinks eating pig meat is really sexy." Who knew pork could be better than Viagra? According to her, though, she and her husband both sing its praises.

Although "there is no study showing that pork meat significantly improves sexual activity," she approved subsidies for the pork industry, explicitly putting the "pork" in "pork spending.

So how can the average person benefit from this? Perhaps by having homemade "romantic apple pork chops" and an evening with someone special. And perhaps you can pay for dinner with the killer profits you'll reap from going long lean hog futures (which after all, are much sexier than pork bellies).

A Couple of Things

2010-01-27T12:38:00.000-08:00

I realize that quite a lot has happened since the last real post on this blog. The past few months of living in the real world have allowed me significantly less time than I'd have liked to peruse my favorite blogs, to find and collect interesting stories, and most notably, to post them here. Not making this online project of mine much of a priority probably didn't help either.

Nonetheless, in my few free moments at the office, I've forwarded certain stories to myself to post to this site when the opportunity arose. Today, that opportunity has finally come.

The stories and sites that have most caught my eye ranged from politics to climate change to dollar inflation and, last but not least, to the unending fight between Keynes and Hayek. Obviously, one could also not miss the Brown victory in Massachussetts or the earthquake in Haiti, but too much has already been said on those matters for now. Here are a few bits to start, with more regular (and timely) postings to follow.

While I missed out on Climate-gate and don't feel the need to weigh in on one side or the other, this story in the UK's Daily Mail caught my eye as providing an intriguing alternative hypothesis to global warming. Despite a long-lasting commitment to the environment (sparked when I read The Berenstain Bears "Don't Pollute (Anymore)" in 1st or 2nd grade), I don't know whether to accept global warming as gospel or to be more of a skeptic. Expect more on the topic of climate change in the future.

In addition, two good pieces highlighted recently on Greg Mankiw's blog. The first, his piece for the New York Times on the potential inflationary picture facing the United States. Ordinarily, I'd offer my two cents on his analysis, but suffice it to say that I agree. Concise though it is, this piece sums things up quite neatly. The main inflationary risk right now appears to be the inevitably slow response from the Fed when the inflation mechanism (as Wall Street research calls it) gets back into place. The second piece, written for the Wall Street Journal by Martin Feldstein, discusses the recession, the response/stimulus, and the ongoing budget problems facing the United States.

Paul Krugman also offered a short note on the current state of the economy, which is worth taking a look at (being sure to follow the links).

AND OF COURSE, THERE'S THE BEST NEW ECON VIDEO OUT THERE, pitting archrivals John Maynard Keynes and Friedrich von Hayek against each other in what could be THEIR GREATEST BATTLE OF ALL TIME:

Back Online

2009-11-09T14:04:00.001-08:00

After nearly six months of inactivity on this blog and three months without internet access at home, I am happy to announce (to nobody at this point, I would expect) that Brigham's Almanack will finally be back up and running this week.

Sophomore slump? Or comeback of the year?

Is Obama Toeing the Bush Line on Terrorism?

2009-05-28T07:33:00.000-07:00

Clive Crook of the Financial Times points out many of the ways in which Barack Obama's national security policy has disappointed and infuriated those both to his left and to his right. Recognizing the seemingly obvious--that there must be a tradeoff between security and liberty and that one cannot completely trump the other--we must accept both that the Bush administration was not completely evil and that civil liberties must be protected. The answer is, like the golden mean, somewhere in between.

Wordle: The Effect of Stress and Relaxation on Financial Decision Making

2009-05-12T20:37:00.000-07:00

My senior thesis in graphic form:

(Thanks to Wordle.com)

SOBEaR

2009-05-09T09:27:00.000-07:00

If the recession is driving you to drink, you may need one of these...

SOBEaR v02 :: the responsible robot bartender from j saavedra on Vimeo.

Negative Interest Rates?

2009-05-08T00:16:00.000-07:00

London School of Economics professor and former central banker William Buiter expands upon Greg Mankiw's "proposal" that central banks should no longer consider zero the floor for nominal interest rates. It's an intriguing suggestion, though as Mankiw notes, much easier for professors to theorize about than for central bankers to implement.

The Perils of Optimism?

2009-05-02T23:38:00.000-07:00

Joe Nocera had a great column in yesterday's New York Times examining the conflicting economic forecasts coming out of Wall Street and Washington.

Future Financial Centers

2009-04-29T14:12:00.001-07:00

Thankfully, the nightmare that was senior thesis has finally come to an end. Strangely enough, it was a rather enjoyable experience, benefiting from the fact that my question not only was but still is genuinely interesting. Look forward to hearing the results in an upcoming post; I'm too sick of everything thesis-related to talk more about it now.

In the meantime, here's an article from Bloomberg that a friend sent to me regarding London's future as a financial center. Maybe I won't be staying in the City as long as I'm planning to after all...

Guy Kawasaki on Becoming a Venture Capitalist

2009-04-18T22:04:00.000-07:00

Venture capitalist Guy Kawasaki presents his opinion on the best way to learn the lessons necessary to become an entrepreneur or a venture capitalist.

Personally, I just love his discussion of "Morgan Stanley Disease." To quote: "Now you're giving all these young entrepreneurs advice based on your zero years of having run a company....I would never start my career as a venture capitalist or investment banker because it will fundamentally corrupt you, it will just eat your brain out."

Silence is Golden

2009-04-16T08:58:00.000-07:00

My apologies for not updating the blog in a week or two. We're in the home stretch of thesis season here at Claremont McKenna and I've been toiling away for the past several weeks, conducting experiments and revising drafts of my paper on the role of emotion and mood in financial risk taking.

I'll still try to add a couple of things per week, but with thesis due on April 27th, my focus is elsewhere right now. Stay tuned April 28th for the rapid return to form. After all, once thesis is turned in, what else am I going to do between now and graduation?

In the meantime, compare these two takes on the current state of the economy. The first comes from Dr. Doom himself, Nouriel Roubini, who, true to form, tears down all hope of a recovery. The second comes from Investor's Business Daily, who argue that "Recovery's Coming."

Now, sit back, read up, and ponder what the world will be like in a future without John Madden's bizarre doodles on slow-mo replays, without his random utterances, and without his incredible knack for stating the obvious.

The Foundation for Entrepreneurship

2009-04-05T14:56:00.000-07:00

For many years, the Kauffman Foundation has sought to understand the impact of entrepreneurship on communities and to foster the entrepreneurial spirit amongst young and old alike.

The president of the Foundation, Carl Schramm, sat down with The Wall Street Journal and discussed how, as in past recessions, entrepreneurship will be the driving force to pull our economy out of this recession.

Damn It Feels Good to Be a Banker

2009-04-04T10:39:00.000-07:00

For all the future I-bankers out there. Most of you have probably seen this, but if not, you should know that it's already a classic.

From the Leveraged Sellout:

Damn It Feels Good To Be A Banker: The Musical - watch more funny videos

Facebook CFO Leaves Suddenly

2009-03-31T21:54:00.001-07:00

In a surprising move today, the Chief Financial Officer of Facebook, Gideon Yu, will be leaving the company. Although the departure appears to be some form of an ouster, Facebook does not currently have anybody to fill the CFO slot, raising the question: Why did he leave? The company has retained Spencer Stuart to lead the search for a replacement.

Reported by the Wall Street Journal, the former Yahoo! and Youtube executive either left or was forced out without providing a public reason.

This has led to speculation that Facebook is "stepping up plans for a public offering," although that may be inadvisable in the current economy. Unless investors like Microsoft, who bought a preferred 1.6% stake at a valuation of $15 billion, are willing to take a haircut, that strategy would seem unlikely anytime soon.

Like many other users/addicts of Facebook, I think the company has a great product, but will have serious trouble emerging as a profitable enterprise. Whoever replaces Yu will have a challenge regardless of any IPO plans.

David Brooks Weighs in on GM

2009-03-31T21:49:00.000-07:00

"Some companies are in the steel business, some are in the cookie business, but General Motors is in the restructuring business. For 30 years, G.M. has been restructuring itself toward long-term viability. "

David Brooks of the New York Times offers his take on the debacle in Detroit...

The Two Cows Theory

2009-03-30T22:30:00.000-07:00

All you need to know about international economics...

SOCIALISM: You have 2 cows. You give one to your neighbour.
COMMUNISM: You have 2 cows. The State takes both and gives you some milk.
FASCISM: You have 2 cows. The State takes both and sells you some milk.
NAZISM: You have 2 cows. The State takes both and shoots you.
BUREAUCRATISM: You have 2 cows. The State takes both, shoots one, milks the other, and then throws the milk away.
TRADITIONAL CAPITALISM: You have two cows. You sell one and buy a bull. Your herd multiplies, and the economy grows.You sell them and retire on the income.
SURREALISM: You have two giraffes. The government requires you to take harmonica lessons.
AN AMERICAN CORPORATION: You have two cows. You sell one, and force the other to produce the milk of four cows. Later, you hire a consultant to analyze why the cow has dropped dead.
ROYAL BANK OF SCOTLAND VENTURE CAPITALISM: You have two cows. You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows. The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company. The annual report says the company owns eight cows, with an option on one more. You sell one cow to buy a new president of the United States, leaving you with nine cows. No balance sheet provided with the release. The public then buys your bull.
A FRENCH CORPORATION: You have two cows. You go on strike, organize a riot, and block the roads, because you want three cows.
A JAPANESE CORPORATION: You have two cows. You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk. You then create a clever cow cartoon image called 'Cowkimon' and market it worldwide.
A GERMAN CORPORATION: You have two cows. You re-engineer them so they live for 100 years, eat once a month, and milk themselves.
AN ITALIAN CORPORATION: You have two cows, but you don't know where they are. You decide to have lunch.
A RUSSIAN CORPORATION: You have two cows. You count them and learn you have five cows. You count them again and learn you have 42 cows. You count them again and learn you have 2 cows. You stop counting cows and open another bottle of vodka.
A SWISS CORPORATION: You have 5000 cows. None of them belong to you. You charge the owners for storing them.
A CHINESE CORPORATION: You have two cows. You have 300 people milking them. You claim that you have full employment, and high bovine productivity. You arrest the newsman who reports the real situation.
AN INDIAN CORPORATION: You have two cows. You worship them.
A BRITISH CORPORATION: You have two cows. Both are mad.
AN IRAQI CORPORATION: Everyone thinks you have lots of cows. You tell them that you have none. No-one believes you, so they bomb the crap out of you and invade your country. You still have no cows, but at least you are now a Democracy.
AN AUSTRALIAN CORPORATION: You have two cows. Business seems pretty good. You close the office and go for a few beers to celebrate.
A NEW ZEALAND CORPORATION: You have two cows. The one on the left looks very attractive

Miss Universe on Guantanamo Bay

2009-03-30T18:40:00.000-07:00

I shit you not. This is from the Miss Universe blog. I swear I did not make this up.

March 27, 2009
Guantanamo Bay

This week, Guantanamo!!! It was an incredible experience.We arrived in Gitmo on Friday and stared going around the town, everybody knew Crystle and I were coming so the first thing we did was attend a big lunch and then we visited one of the bars they have in the base. We talked about Gitmo and what is was like living there. The next days we had a wonderful time, this truly was a memorable trip! We hung out with the guys from the East Coast and they showed us the boat inside and out, how they work and what they do, we took a ride around the land and it was a loooot of fun!We also met the Military dogs, and they did a very nice demonstration of their skills. All the guys from the Army were amazing with us.We visited the Detainees camps and we saw the jails, where they shower, how the recreate themselves with movies, classes of art, books. It was very interesting.We took a ride with the Marines around the land to see the division of Gitmo and Cuba while they were informed us with a little bit of history.The water in Guantanamo Bay is soooo beautiful! It was unbelievable, we were able to enjoy it for at least an hour. We went to the glass beach, and realized the name of it comes from the little pieces of broken glass from hundred of years ago. It is pretty to see all the colors shining with the sun. That day we met a beautiful lady named Rebeca who does wonders with the glasses from the beach. She creates jewelry with it and of course I bought a necklace from her that will remind me off Guantanamo Bay :)I didn't want to leave, it was such a relaxing place, so calm and beautiful.

And I thought Miss South Carolina took the cake for stupid pageant people...

Soros Spreads Gloom and Doom in London

2009-03-28T09:34:00.001-07:00

In an interview with the Times of London, George Soros describes the ongoing problems in the global financial system, gives the G20 a chance to do more than talk, and discusses the possibility that Britain may have to get a loan from the International Monetary Fund.

Taking Apart the Stimulus Package

2009-03-26T17:04:00.001-07:00

My friend Helena Bottemiller showed this to me last night. The Washington Post ran this great graphic dissecting the stimulus package by type and time.

We're pumping $525 billion into the economy within the first year and a half--64% of the total spending.

The three biggest areas swallowing the spending are Health, Labor & Education; Housing & Transport; and State Stabilization.

I'm still as stunned by this bill as I would have been if I'd been slapped in the face with all 1,100 pages.

An Argument for Intelligent Conservatism (And Against Rush Limbaugh)

2009-03-16T22:01:00.000-07:00

When it comes to politics, I like to think of myself as a moderate. As an economics major, I find conservative economic policy to be both logical and appealing. At the same time, having spent 18 years in Madison, Wisconsin, I recognize the importance of social programs and civil liberties.

Even though I was unable to vote in 2000, I thought John McCain was the best candidate in the final four. Fast-forward eight years, and I would have been equally happy (or unhappy) with him or Barack Obama. But, among other things that cemented my opinion in the end, Obama didn't have Sarah Palin on his ticket.

Perhaps because I have no party affiliation (currently), I would like to see both parties at their best. In an ideal world, these opposing factions would prevent the poor legislation from being passed while agreeing and compromising to bring effective policy to the people. That's how our founders envisioned our government and that is how it functions in its finest hours.

However, right now, the Republican Party is weak. As such, it is in our nation's interest for their party to get their act together.

In a great piece for Newsweek entitled "Why Rush is Wrong for the Right," David Frum, a speechwriter for George W. Bush, makes the case that the Republican Party must face the simple fact that the world has changed in the last 30 years. He argues for an intelligent and rational conservatism rather than the populist garbage emanating from talk radio behemoth, Rush Limbaugh.

Why target Rush? As Mr. Frum puts it:

As for the leader of the Republicans? A man who is aggressive and bombastic, cutting and sarcastic, who dismisses the concerned citizens in network news focus groups as "losers." With his private plane and his cigars, his history of drug dependency and his personal bulk, not to mention his tangled marital history, Rush is a walking stereotype of self-indulgence—exactly the image that Barack Obama most wants to affix to our philosophy and our party.

But what is the solution?

Look at America's public-policy problems, look at voting trends, and it's inescapably obvious that the Republican Party needs to evolve. We need to put free-market health-care reform, not tax cuts, at the core of our economic message. It's health-care costs that are crushing middle-class incomes. Between 2000 and 2006, the amount that employers paid for labor rose substantially. Employees got none of that money; all of it was absorbed by rising health-care costs. Meanwhile, the income-tax cuts offered by Republicans interest fewer and fewer people: before the recession, two thirds of American workers paid more in payroll taxes than in income taxes.

We need an environmental message. You don't have to accept Al Gore's predictions of imminent gloom to accept that it cannot be healthy to pump gigatons of carbon dioxide into the atmosphere. We are rightly mistrustful of liberal environmentalist disrespect for property rights. But property owners also care about property values, about conservation, and as a party of property owners we should be taking those values more seriously.

Above all, we need to take governing seriously again. Voters have long associated Democrats with corrupt urban machines, Republicans with personal integrity and fiscal responsibility. Even ultraliberal states like Massachusetts would elect Republican governors like Frank Sargent, Leverett Saltonstall, William Weld and Mitt Romney precisely to keep an austere eye on the depredations of Democratic legislators. After Iraq, Katrina and Harriet Miers, Democrats surged to a five-to-three advantage on the competence and ethics questions. And that was before we put Sarah Palin on our national ticket.

Among those in the party, his message is controversial. Yet I agree wholeheartedly. To regain its strength, the Republican Party must return to its conservative intellectual roots. It needs to focus on solving the problems of our day. It needs to listen to the George Wills and Andrew Sullivans out there (even if they don't always get along with each other). And it needs a leader as dynamic and inspiring as Barack Obama.

Will the Republicans get their act together? For all our sakes, I hope so.

Barack Obama Wishes You a Happy St. Pat's

2009-03-16T21:45:00.001-07:00

In honor of St. Patrick's Day, one of my all-time favorite Youtube videos:

Barry Ritholtz is "Monkey Boy"

2009-03-14T08:18:00.000-07:00

Barry Ritholtz, one of my favorite bloggers, was interviewed by Steve Forbes about intelligent investing. Mr. Ritholtz reminds investors of the limitations of our psychological and cognitive abilities in this single-question excerpt from his blog:

What is the greatest financial lesson you’ve ever learned?

You’re a monkey. It all comes down to that. You are a slightly clever, pants-wearing primate. If you forget that you’re nothing more than a monkey who has been fashioned by eons on the plains, being chased by tigers, you shouldn’t invest. You have to be aware of how your own psychology effects what you do. This is why we as investors sell at the bottom, get panicked. All the other lessons I’ve learned have come out of that. As has the field of behavioral economics.
Wall Street clichés, like “cut your losses and let your winners run” come back to prevent the monkey part of your brain from doing what it does. There’s a banana–I want it. That’s how chimps behave. Us humans react to greed and fear in predictable ways. We are predictably irrational. If you understand that you can take steps to prevent that–we don’t own anything in the office that doesn’t have a stop-loss on it. In 2008, we watched the market go down 40%. We figured out we’re chimps, and don’t let the chimp inside us make those chimp-like decisions.

Every good financial decision I’ve made comes from, “Wait a second, monkey boy, step back, don’t do that.” Once you realize how your own brain chemistry works against you, it gives you a chance to not panic at the bottom.

Forbes has the full story here.

Larry Summers on Obamanomics

2009-03-14T08:05:00.000-07:00

President Obama's Chief Economic Guru, Larry Summers, offered his perspective on the Administration's (read as "his") response to the economic crisis at the Brookings Institution.

This follows the presentation earlier this week by the Chair of Obama's Council of Economic Advisers, Christina Romer.

The text of Summers' presentation is available from the Brookings Institution.

The Daily Show Takes on CNBC

2009-03-13T11:24:00.000-07:00

This is for those of you who have been out of the country, don't watch the Daily Show (the best damned news program out there), or have avoided CNBC since Cramer "went five bid for a half a million shares of Citigroup and got hit back in 1990. (PS--if you're out of the country, the Hulu clips below won't work. Sorry. Blame the copyright people who want you to be surprised when our re-runs air in your country a year later.)

You may remember my post about Rick Santelli's Chicago Tea Party a couple of weeks ago. Well, it turns out I wasn't the only one who thought that clip was pretty entertaining. Unfortunately for Mr. Santelli, the Daily Show found it to be a hilarious case of populism on cable news.

As you may remember from Jon Stewart's destruction of the bow-tied Tucker Carlson, the Daily Show takes a dislike to what they consider to be real journalists not doing their jobs. In that vein, they aired this clip attacking the quality of CNBC:

This launched the "week-long feud of the century" as commentators, journalists, and bloggers defended the side of their choice. All of this led up to JIM CRAMER......ON THE DAILY SHOW:

My personal favorite quotes:

3) "I want the Jim Cramer on CNBC to protect me from that Jim Cramer."

2) "I understand you want to make finance entertaining, but it’s not a fucking game."

...and of course....

1) 'These guys at these companies were on a Sherman’s march through their companies, financed by our 401ks. And all the incentives of their companies were for short-term profit. And they burned the fucking house down with our money and walked around rich as hell. And you guys knew that was going on!"

What astounds me the most is that Cramer sits back and takes it all calmly. How did that happen?

Amartya Sen on "New Capitalism"

2009-03-13T11:09:00.000-07:00

Nobel Prize winning economist Amartya Sen examines the current drive to create a "new capitalism" and finds its origins in the classic work of Adam Smith.

It is often overlooked that Smith did not take the pure market mechanism to be a free-standing performer of excellence, nor did he take the profit motive to be all that is needed.

The economic difficulties of today do not, I would argue, call for some “new capitalism”, but they do demand an open-minded understanding of older ideas about the reach and limits of the market economy. What is needed above all is a clear-headed appreciation of how different institutions work, along with an understanding of how a variety of organisations – from the market to the institutions of state – can together contribute to producing a more decent economic world.

For the full text of Dr. Sen's analysis, check out the original New York Review of Books version or the shorter Financial Times version.

SportsCenter's Top Fits

2009-03-13T10:56:00.000-07:00

"Helmets, bases, putters, benches, chairs, phones. They're all airborne here. So ... who threw SC's top fits?"

The Little Red Hen

2009-03-11T08:28:00.001-07:00

Here's a fun joke that's been circulating via e-mail. Thanks to my dad for passing it on to me. Do you remember the little red hen story from when you were a kid? This is it, updated:

"Not I," said the cow.

"Not I," said the duck.

"Not I," said the pig.

"Not I," said the goose.

"Then I will do it by myself," said the little red hen, and so she did. She planted her crop, and the wheat grew very tall and ripened into golden grain.

"Who will help me reap my wheat?" asked the little red hen.

"Not I," said the duck..

"Out of my classification," said the pig.

"I'd lose my seniority," said the cow.

"I'd lose my unemployment compensation," said the goose.

"Then I will do it by myself," said the little red hen, and so she did.

At last it came time to bake the bread. "Who will help me bake the bread?" asked the little red hen.

"That would be overtime for me," said the cow.

"I'd lose my welfare benefits," said the duck.

"I'm a dropout and never learned how," said the pig.

"If I'm to be the only helper, that's discrimination," said the goose.

"Then I will do it by myself," said the little red hen.

She baked five loaves and held them up for all of her neighbors to see. They wanted some and, in fact, demanded a share. But the little red hen said, "No, I shall eat all five loaves."

"Excess profits!" cried the cow. (Nancy Pelosi)

"Capitalist leech!" screamed the duck. (Barbara Boxer)

"I demand equal rights!" yelled the goose. (Jesse Jackson)

The pig just grunted in disdain. (Ted Kennedy)

And they all painted 'Unfair!' picket signs and marched around and around the little red hen, shouting obscenities.

Then the farmer (Obama) came. He said to the little red hen, "You must not be so greedy."

"But I earned the bread," said the little red hen.

"Exactly," said Barack the farmer. "That is what makes our free enterprise system so wonderful. Anyone in the barnyard can earn as much as he wants. But under our modern government regulations, the productive workers must divide the fruits of their labor with those who are lazy and idle."

And they all lived happily ever after, including the little red hen, who smiled and clucked, "I am grateful, for now I truly understand."

But her neighbors became quite disappointed in her. She never again baked bread because she joined the 'party' and got her bread free. And all the Democrats smiled. 'Fairness' had been established.

Individual initiative had died, but nobody noticed; perhaps no one cared...so long as there was free bread that 'the rich' were paying for.

IS THIS A GREAT BARNYARD OR WHAT?

Entertaining and sound as the moral may be, the details are a little twisted. For instance, while Senators Pelosi and Boxer do push for overtime pay and welfare benefits (part of the standard Democratic agenda), they are both salaried and obviously neither receives welfare. And while Ted Kennedy, after getting caught cheating on a Spanish test, was kicked out of Harvard, he re-entered under the the college's policies two years later. He graduated from Harvard in 1956 with a B.A. in history and government and graduated from U-VA's law school in 1959.

You just have to love our "modern" free enterprise system.

Christina Romer on The Great Depression

2009-03-10T17:19:00.000-07:00

Christina Romer, the chair of President Obama's Council of Economic Advisers, yesterday presented lessons from the Great Depression for economic recovery in 2009 at the Brookings Institution in Washington, D.C.

Her lessons serve as the basis for the Obama Administration's reaction to the credit crisis and their plans to encourage a recovery. They are well-considered, however in some cases, critically flawed.

I will respond directly to some of the sections that caught my attention the most.

This similarity of causes between the Depression and today’s recession means that President Obama begins his presidency and his drive for recovery with many of the same challenges that Franklin Roosevelt faced in 1933.

This is certainly true, and the Administration is clearly acting to prevent another Depression. By attacking the credit crisis with enormous "shock and awe" tactics and spending, the Administration hopes to cut off the crisis before it spirals downward any further. However, as I have mentioned before, spending trillions of dollars alone will not get us out of this mess.

Of course, Roosevelt's New Deal did eventually work, after a decade of misery and a World War.

As for the uses of fiscal policy, she is correct in asserting that fiscal policy did not work to solve the Great Depression:

My argument paralleled E. Cary Brown’s famous conclusion that in the Great Depression, fiscal policy failed to generate recovery “not because it does not work, but because it was not tried.

That the Obama Administration is attempting to use fiscal policy to further economic recovery is noble. However, instead of stimulative tax cuts, they are taking the opposite course and raising taxes, a decision that will most likely be questioned if the recovery takes more time than they anticipate (which is not an unlikely scenario).

On the other side of the equation, the Administration certainly is spending enough. The emergency spending that Roosevelt did was precedent-breaking—balanced budgets had certainly been the norm up to that point. But, it was quite small. The deficit rose by about one and a half percent of GDP in 1934....The American Recovery and Reinvestment Act, passed less than thirty days after the Inauguration, is simply the biggest and boldest countercyclical fiscal action in history. The nearly $800 billion fiscal stimulus is roughly equally divided between tax cuts, direct government investment spending, and aid to the states and people directly hurt by the recession....The fiscal stimulus package was designed to create jobs quickly. But answer me this: how does giving hundreds of millions of dollars to Amtrak and the Smithsonian create jobs? How were they "directly hurt by the recession?"

Of course, now that the tap has been opened, everyone wants more money from the government. Romer warns of another lesson from the Depression: beware of cutting back on stimulus too soon (bold text hers).

I sincerely hope that she doesn't expect the government to pony up trillions of dollars per year in stimulus for the next few years. Because, quite frankly, we don't have the money. Anything we spend, we have to raise in taxes and loans. Let me make this clear: raising taxes does not get you out of a recession. And increasing demand for funds, all else equal, means higher interest rates. A mini-lesson in economics: when the cost of borrowing goes up for the US government, the cost of borrowing goes up for everyone.

Romer is correct in her assessment of the plan to stablize our banking system.

The Financial Stabilization Plan, which involves evaluating the capital needs of financial institutions, as well as crucial programs to directly increase lending, is central to putting the financial system back to work for American industry and households.

As a panel of CMC professors pointed out, the number one issue the government has to deal with to get out of this crisis is stabilizing and expanding the banks' lending capacities. If we cannot do that, then all other stimulatory measures will not flow through the financial system.

Of course, there's Romer's final lesson from the 1930s:
A key feature of the Great Depression is that it did eventually end.

Personally, I'd prefer to see this recession end sooner rather than later. As Romer makes clear, immediate action is necessary. However, if by ending the recession with imprudent actions now, we force ourselves to pay unforeseen consequences in the future, her response may not be a solution at all.

What Happens to Your Passwords When You Die?

2009-03-10T17:12:00.001-07:00

Last semester, a member of my graduating class who lived in my dorm died tragically in the LA Metrolink crash. A week and a half ago, one of my classmates lost another good friend who was killed on Interstate 10 while returning from a visit to a graduate program in Texas.

Until today, I'd never thought about what happened to their computers, their e-mail accounts, and their Facebook profiles. As a couple of other blogs are reporting, Legacy Locker, a company offering a will-like service for your online presence, will begin taking customers in a couple of weeks.

Whether you're interested in the service or just think it's interesting, VentureBeat has the full story.

Two WSJ Op-Eds You Must Read

2009-03-09T23:32:00.000-07:00

Today's Wall Street Journal contained two key op-ed pieces for understanding the current economic situation. The first, from Bank of America CEO Ken Lewis, clarifies just what is and is not occuring in the banking industry. The second, by Professor Laura D'Andrea Tyson, a former chairman of the Clinton's Council of Economic Advisers and current member of President Obama's Economic Recovery Advisory Board, defends the stimulus plan and budget proposal.

In response to Ken Lewis' piece, he is perfectly positioned to see the reality emerging in the banking industry. His analysis makes sense and I believe his facts to be accurate. Then again, upon graduation, he's going to be my boss, so I may be slightly biased. Nonetheless, he is correct that banks are in fact lending, that very few banks are actually insolvent, that TARP is working, that those who caused this mess are now unemployed and/or bankrupt, that the US taxpayers are receiving high real interest rates on TARP funds, and that, as Ben Bernanke has said, nationalization of banks is unnecessary to stabilize the banking system.

Regarding Tyson's article, the arguments against the stimulus and the viewpoints of other prominent economists are pretty persuasive. The budget, as she describes, is "faithful to the progressive vision he articulated during his campaign." I do like the idea of investing in health care, education, energy, and the environment, but wonder where we're going to get the money for all this given that we already have the LARGEST BUDGET DEFICIT AS A PERCENTAGE OF GDP SINCE WORLD WAR II. Perhaps I'm not making myself clear, but this hardly seems the time to be adding even more projects and government bureaucracy to the mix. President Obama promised to sharpen his pencil and cut the weak programs from the budget. Like many others, I was hoping he'd follow through on that plan. Perhaps I was praying for a moment like the scene in Dave in which a reluctant citizen goes through the federal budget with his accountant friend and trims off enough money from wasteful projects to salvage a program that actually makes a difference in people's lives. Alas, the pencil sharpener appears to be broken.

Instead, we get "a shift of wealth through higher taxes on the rich to pay for healthcare...and social programs." The last time I checked, that was a hallmark of socialism. Nonetheless, I wasn't a fan of the Bush tax cuts originally and do not mind seeing them expire. Besides, by the time I make that much money, the Republicans will probably be in power again.

After visiting Walker Foods, a California-based food company with international distribution, last Friday, I realized the vital role of small businesses in the economy. The proposition that "97% of small businesses will see their rates unchanged or enjoy additional tax benefits under the Obama plan" doesn't sound bad at all.

As for the claims that the size of government will not explode, I do not expect it to triple in size or anything. However, the government will have to create an infrastructure to run its ambitious proposals and that will add to the already annoying layers of bureaucracy.

Perhaps Dave's accountant best sums up the American budget: "Who does these books? If I ran my office this way, I'd be out of business."

Warren Buffett on CNBC

2009-03-09T21:06:00.000-07:00

Warren Buffett appeared for several hours on CNBC today to discuss the current state of the economy. Here are all 7 clips of the video, in order from CNBC.com. For a full transcript, check out CNBC's Warren Buffett Watch.

Part 1

Part 2

Part 3

Part 4

Part 5

Part 6

Part 7

A Lesson on Statesmanship

2009-03-09T20:46:00.000-07:00

Barack Obama is off to a turbulent start in his first term as US president. If he wants to ensure a second term, he will have to prove that he has the diplomatic skills necessary to be the leader of the free world.

After welcoming British Prime Minister Gordon Brown to Washington in an unremarkable fashion, President Obama will make his first visit to the UK since his election. There he will do his best to ensure that the special relationship between the US and its strongest ally continues.

Whenever I think of that relationship, I can't help but think of the scene in Love Actually when Hugh Grant's usually-diffident Prime Minister summons the courage to stand up for his country's pride in the face of an American president with a superiority complex:

"I love that word 'relationship.' Covers all manner of sins, doesn't it? I fear that this has become a bad relationship; a relationship based on the President taking exactly what he wants and casually ignoring all those things that really matter to, erm... Britain. We may be a small country, but we're a great one, too. The country of Shakespeare, Churchill, the Beatles, Sean Connery, Harry Potter. David Beckham's right foot. David Beckham's left foot, come to that. And a friend who bullies us is no longer a friend. And since bullies only respond to strength, from now onward I will be prepared to be much stronger. And the President should be prepared for that."

President Obama's visit to London and Strasbourg will be anything but. With the rest of the world still questioning his backbone and America's role in international affairs, Mr. Obama must set the record straight.

For the British perspective (albeit a conservative, Thatcherian one), check out Nile Gardiner's analysis of Obama's slights against our nation's top supporters in today's Daily Telegraph.

Kindle-ing A New Flame?

2009-02-25T08:38:00.000-08:00

Anyone who has been on Amazon.com lately has probably heard about the all-new Kindle 2 e-book, the latest technology to emerge in the evolution of reading. Of course, if you're overseas, you'll have to wait a little longer; it looks like the Kindle 2 will make it to the UK by Christmas.

(Source: Amazon.com)

I've never been a big fan of e-books. The idea, I admit, is intriguing. Carrying a mini-library that weighs less than a pound would be pretty awesome. However, despite this new blogging project I've undertaken, reading just doesn't feel right on a computer screen. Fortunately, the new Kindle has the same type of e-Ink screen as the original, which apparently looks amazingly like ink on paper. As the New York Times review points out, "Unlike a laptop or an iPhoone, the screen is not illuminated, so there’s no glare, no eyestrain — and no battery consumption. You use power only when you actually turn the page, causing millions of black particles to realign. The rest of the time, the ink pattern remains on the screen without power. You can set it on your bedside table without worrying about turning it off."

Also, thanks to a deal with Sprint to encourage more people to download Kindle books, you can access the internet and download a new book to your Kindle from anywhere. Amazon pays for the service, hoping that it will pay off as people download more e-books. Also, the Kindle has a browser that works well when searching Wikipedia or browsing your favorite blogs.

Perhaps my favorite feature is the availability of the most popular newspapers for only $10-$14 per month. An ad-, comic-, and crossword-free version will be wirelessly beamed to you every morning before you wake up. Now you can have the New York Times, Wall Street Journal, USA Today, The Financial Times, or The Washington Post, International Herald Tribune, Le Monde, The Times of London, or The Independent instantly. You probably won't want all of them (especially Le Monde, if you don't speak French), but the choice is yours.

One of the more interesting features is the Kindle's audio-reading capabilities. Although suffering from "peculiar inflections and pronunciations" which may result in a voice that sounds oddly Scandinavian, it is a pretty sweet feature.

Of course, aside from the $359 price tag, the Kindle does have some drawbacks. "As traditionalists always point out, an e-book reader is a delicate piece of electronics. It can be lost, DROPPED (emphasis added, see here), or fried in the tub. You’d have to buy an awful lot of $10 best sellers to recoup the purchase price. If Amazon goes under or abandons the Kindle, you lose your entire library. And you can’t pass on or sell an e-book after you’ve read it."

If nothing else, the Kindle 2 is a great new gadget. If knowledge is power, just imagine how powerful (and nerdy) you'll be with a Kindle of your own.

President Obama's Address to Congress

2009-02-24T16:45:00.000-08:00

(Update: Video changed from live feed via Hulu to C-Span footage from YouTube YouTube at 8:30 am Pacific Time on 25 February.)

Tonight, in his first address to a joint session of Congress, President Obama will describe the current state of affairs in the United States and outline his vision for the future.

Some fun and exciting quotes to be on the lookout for:

While our economy may be weakened and our confidence shaken; though we are living through difficult and uncertain times, tonight I want every American to know this: We will rebuild, we will recover, and the United States of America will emerge stronger than before.

My budget does not attempt to solve every problem or address every issue. It reflects the stark reality of what we’ve inherited – a trillion dollar deficit, a financial crisis, and a costly recession.

Can't wait to see what he has in store for us. If nothing else, it should be a great speech. Also, hats off to his speechwriters for finishing it enough in advance that excerpts could be pre-released.

Let's hear your thoughts on Obama's speech....

The Financial Model that Broke the System

2009-02-24T12:54:00.000-08:00

Lots of investors, journalists, businesspeople, and politicians have mentioned the fact that the financial industry's models failed to appropriately price the risk in the system and that the failure to do so contributed hugely to the current credit crisis.

However, that failure was not any single individual's fault. Wall Street's models were designed to do just that, to model the real world, using a set of assumptions that may or may not hold up in the face of reality. Somehow, though, these models became touted as manna from the financial gods, feeding the frenzy of "sophisticated" investment and risk-management strategies.

Until today, it had never occurred to me to look more closely at the actual models used by Wall Street. Why would any non-mathematician intentionally attempt to decipher a formula like this? (Source: wired.com)

It looks ridiculous, right? What on earth is this mess of Greek characters supposed to mean? Perhaps that hesitation to peer through the looking glass is what caused investors to miss the shortcomings inherent in their models to see the real risks they faced.

In a new article for Wired Magazine, Felix Salmon tells the story of that formula, David X. Lee's "Gaussian Copula Function," and makes it not only understandable to a layperson, but also as entertaining as an article about a mathematical model can ever be. I highly recommend it to anyone interested in learning more about what went wrong and how we arrived at our current economic crisis.

At the end of the day, John Maynard Keynes' wisdom on economic models lives on. "It is better to be roughly right than precisely wrong." Many people on Wall Street forgot that essential edict and now we are all paying the price.

We Are Too Big To Fail

2009-02-24T11:47:00.001-08:00

The new six-word motto for the United States, submitted and selected by the readers of the Freakonomics blog, is "We Are Too Big to Fail."

Can we get a big "WOOT" for that? Let's hear it for good ol' U-S-of-A!

Personally, I was a big fan of "Consumption's the Cure That Ails Us" After all, overconsumption got us into this mess, and by God, increasing consumption is going to get us out.

Also, major congratulations to the folks at Cash-4-Gold, whose commercials finally made their way from the midnight-5 am timeslot on cable TV all the way to the Super Bowl! Those efforts finally paid off with permanent recognition in motto #4: "The Streets Are Paved With CASH4GOLD.COM."

Let me know which ones you like, and definitely post any ideas of your own.

DeLong: The Stimulus Will Work!

2009-02-24T10:47:00.000-08:00

While many right-wing economists have been arguing against the stimulus, many on the left believe that it will "probably" work. Brad DeLong, a political economist at the University of California--Berkeley, presents why he thinks the stimulus will improve our economic situation.

The general principle he cites is that "each major business cycle expansion we have seen has been driven by a leading wave of spending—by some group that becomes enthusiastic about their prospects and decides to greatly up its spending. And that pulls employment and production up."

However, one still has to approach this situation looking at the potential benefits and the potential costs. Whether we will be better or worse off in the future than we are now is not the issue. What matters is whether we will be better off than we otherwise would in the future.

DeLong is aware of that concern, asking "Will there be some sort of a hangover after this Obama spending binge—and if there is a hangover how bad will it be?" And with that, he leaves the reader hanging. Hopefully, this stimulus won't leave the US economy in a similar situation.

Is There Any Faith Left in Detroit?

2009-02-23T23:18:00.000-08:00

Apparently, the Presidential Task Force assigned to solve Detroit's car crisis are not particularly fond of the American automobile--not if their personal car choices are to be believed.

Between the eight members of the Task Force, their 10 senior aides, and the newly added Steve Rattner, who was originally slated to be America's Car Czar, there are a grand total of three American auto owners. Maybe that should be enough of a hint that we've been making horrible excuses for cars for too long and that the rest of the world has surpassed us in automobile design and production.

Steve Rattner, a private equity investor whose auto investing experience seems to consist of owning four cars, was just added to the roster. Apparently, his private equity background is supposed to complement the experience of Ron Bloom, the union-friendly Man of Steel. Fortunately, both of these titans of industry own American cars--Bloom owns an aging Ford Taurus and Rattner owns a 2005 Lincoln Town Car (along with a 2008 Lexus sedan, 2007 Audi convertible, and 2006 Mercedes SUV).

As for the co-chairs of the task force, Treasury Secretary Geithner and White House Economic Guru (unofficial title), neither owns an American car.

For the car choices of more task force members, check out The Detroit News. For more on the addition of Mr. Rattner, check out the Wall Street Journal.

Worst Case Scenario Survival Guide to International Relations

2009-02-23T17:19:00.000-08:00

A new book by "military futurist" Andrew F. Krepinevich illustrates seven detailed examples of possible worst case scenarios in US diplomacy and international geopolitics.

One of my friends sent me the link to the Wall Street Journal's review of "7 Deadly Scenarios," which details accounts of potential situations that the US could face in the next decade. Some of them are more plausible than others; although whether terrorists attacking the global oil supply (and daring to face the wrath of those in the Middle East whose finances and lives depend on a sound oil market) is more feasible than nuclear weapons being detonated in American cities, I can't begin to guess.

Call it fear-mongering, call it fantasy, call it whatever you will. But is it at least worth a read? Probably. If you've read it, or if you plan to, let me know what you think.

Speaking of Nationalization

2009-02-23T00:05:00.001-08:00

Citi (C) was speaking to government officials today about the US government taking between a 25 and 40% stake in the bank's common stock. Perhaps Nouriel Roubini's nationalization plan isn't so far-fetched after all. I wonder what Robert Rubin would think of all this.

As for the Bank of America spokesman saying that BofA will not be pursuing a similar strategy, time will tell. As someone whose job depends on the well-being of BofA (since their acquisition of Merrill Lynch), I'll be keeping a close eye on this story. Perhaps, I'll even wake up early tomorrow, just so I can watch the fireworks in the financial sector. Bank of America (BAC) stock could plummet precipitously on the open. Then again, this could be perceived as good news for the banking sector as a whole.

I'm off to bed. We'll see what happens when the market opens...

Bank Nationalization Imminent?

2009-02-21T19:35:00.001-08:00

According to "Dr. Doom," Nouriel Roubini, nationalization is exactly what our economy needs. Based on the Swedish model, he proposes a temporary nationalization of the financial system. He discusses it in the Wall Street Journal with Tunku Varadarajan.

Having been right in calling the crash of 2008, and having successfully predicted many of the specific ripples that have played out in the last two years, Dr. Roubini has plenty of credibility with the general public and with politicians. Even Lindsay Graham and Alan Greenspan agree with him to some degree.

Nonetheless, I can't help but think of the Gawker article that describes Roubini as something of a Facebook stalker. Creepy though he may seem in that article, something does have to be done about our financial system. With comparisons ranging from the Depression to Japan's Lost Decade and to Sweden's crisis, one thing is certain: we must act. That comes with a caveat, though. We cannot simply act. We must act with sound judgment.

Why is Obama Giving John McCain the Finger?

2009-02-20T01:18:00.000-08:00

I was just watching one of my new favorite shows, Lie to Me, today and found this scene especially entertaining. Dr. Cal Lightman, the show's main character, is an expert in decoding microexpressions and body language. In this clip, he points out an interesting "gestural emblem" used by now-President Obama while he was on the campaign trail.

Had a Bad Day?

2009-02-19T17:58:00.000-08:00

It's a long, ugly-sounding German word. It's wonderful. It's Schadenfreude, aka taking pleasure in someone else's pain.

For some bizarre reason, few things make people feel better than hearing about other people's misery. With that in mind, someone had the genius idea of collecting up-to-the-minute accounts of just how much other people's lives suck. A friend of mine showed it to me awhile ago, but I didn't think to put it up until I saw someone use it as their Facebook status.

If you think your life sucks, your day is about to get better: http://www.fmylife.com/.

The Gimme Society

2009-02-19T17:37:00.000-08:00

Michelle Malkin puts together a great collection of pictures of people who want their share of the stimulus package: http://michellemalkin.com/2009/02/19/gimme-gimme-gimme-more-scenes-from-the-anti-obama-backlash/

Personally, I'm with the guy who wants free beer for his horses. Coincidentally, I was just telling my friends at lunch yesterday that my horses really do love beer. Maybe that's a Wisconsin thing, though...

"Santelli's Chicago Tea Party"

2009-02-19T17:01:00.000-08:00

Rick Santelli goes off on the the economic solutions coming out of Washington and rallies support from a group of pit traders at the Chicago Mercantile Exchange.

From CNBC.com. This might be the most entertaining rant I've seen on CNBC since Jim Cramer's about the pending financial apocalypse back in August 2007. It also presents a unique, interesting, and somewhat feasible idea for some form of immediate online referendum. As for his notion that the pit traders in Chicago make a fair cross-section of America.

Thanks both to Byron Koay and Ryder Todd Smith for posting this link.

Meg Whitman for Governor?

2009-02-18T21:44:00.000-08:00

Some of you may have already heard that Meg Whitman, the former CEO of eBay, has thrown her hat into the ring as a hopeful gubernatorial contender in California. I had the pleasure this evening (only a couple hours ago, actually) of hearing her speak at the school just across the street, Scripps College.

During her tenure at eBay, Ms. Whitman led the company from a small startup with $4 million in revenue to the world-class enterprise it is today. She emphasized doing the right thing, even if it cost the company money in the short run, as well as building trust and relationships. She raised an important question for all entrepreneurs and senior managers: what kind of company do you want to run?

Now I'm not sure that I'd endorse her quite yet, although I was as impressed by her as by anyone who I've ever seen speak. Her experience, intelligence, and poise appear almost peerless. Her name was previously mentioned as a possible running mate for John McCain. Let me tell you as a former eBay shareholder (through the CMC Student Investment Fund), if she had been on the ticket, I would certainly not have written him off. She was also mentioned as a potential Secretary of the Treasury, a position for which she may have lacked some of the complex financial experience. As a manager and leader, she's world class, but I'm not completely sold on her understanding of the intricacies and nuances of the capital markets. Whether she is the right person to lead California out of its current mess, I'm still not sure. But she is an astoundingly impressive person.

Perhaps most importantly to me, she reminded me what type of leader I hope to be someday...

Great Coaches on Discipline

2009-02-18T08:35:00.000-08:00

"Discipline is doing what has to be done, doing it as well as you can do it, doing it when it has to be done, and doing it that way all the time."

-Bobby Knight

"Discipline is doing what you are supposed to do in the best possible manner at the time you are supposed to do it."

-Mike Kryzewski

Buffett on Financial Derivatives

2009-02-18T07:08:00.000-08:00

I was studying for my financial derivatives exam this morning and liked the following quote from Warren Buffett. He's talking about the financial derivatives business, but the quote applies to our current economic crisis (which derivatives helped fuel).

In fact, the reinsurance and derivatives businesses are similar: Like Hell, both are easy to enter and almost impossible to exit. In either industry, once you write a contract--which may require a large payment decades later--you are usually stuck with it.

For more, read Buffett's 2003 letter to shareholders.

He also nailed the "daisy-chain" effect that led the crisis to its present magnitude:

A participant may see himself as prudent, believing his large credit exposures to be diversified and therefore not dangerous. Under certain circumstances, though, an exogenous event that causes the receivable from Company A to go bad will also affect those from Companies B through Z. History teaches us that a crisis often causes problems to correlate in a manner undreamed of in more tranquil times.

Perhaps there's a reason he's called the Oracle of Omaha.

A Little Pork

2009-02-17T20:11:00.001-08:00

So I thought I knew what a ton of pork looked like when John Boehner dropped his copy of the 1100 page stimulus package during his Senate floor speech last week.

Apparently though, this is what a ton of pork looks like:

(Warning: may be photoshopped)

7 Broken Promises?

2009-02-17T10:57:00.000-08:00

On YouTube: 7 Supposedly Broken Promises:

1. Make Government Open and Transparent--I'll give Obama this one. There's no way to overhaul the transparency of the government in your first three weeks in office. However, in passing the stimulus, we could have seen a bit more of what was promised.

2. Make it "Impossible" for Congressmen to slip in Pork Barrel Projects--seriously? You fail..........Big time.

3. Meetings where laws are written will be more open to the public--didn't the Republicans even have a hard time getting into these meetings?

4. No more secrecy--uh-huh? Riiiiiiiiiiight....

5. Public will have 5 days to look at a Bill--Saturday (weekend), Sunday (weekend), Monday (oh wait, that's a national holiday), Tuesday. Maybe I lost count...

6. You'll know what's in it--Have you seen how thick the stimulus bill is? I don't think anyone knows everything that's in it.

7. We will put every pork barrel project online--B U L L S H I T. Have you seen the amount of pork in the stimulus bill?!?!!

Check out the video and let me know if you think Obama's standing by his campaign promises...

No Car Czar?

2009-02-16T07:49:00.000-08:00

Apparently, Barack Obama has dropped the idea of a car czar after all. Instead, the automakers will have the pleasure of working with a "presidential task force" including Treasury Secretary Tim Geithner, whose lack of detailed plans for the banking industry last week sent the markets into freefall for a day, and Larry Summers, who I hear is going to make sure that no female engineers work for the auto companies. Teaming up with those two is Ron Bloom, a former investment banker who has worked with the United Steelmakers union for many years and who has had success getting better deals for employees. At Harvard Business School, he apparently found employee buyouts particularly fascinating. It should be interesting to see how he deals with Detroit.

Yet nowhere to be seen in this task force on autos is anyone with any auto experience. Then again, given how Detroit auto execs have run America's car industry into the ground, maybe that's not a bad thing.

If You Want To Understand The Financial Crisis...

2009-02-15T12:13:00.000-08:00

...read this.

I forgot to post this when it came out last week even though I forwarded and recommended it to the other members of the Claremont McKenna College Student Investment Fund. Maria Lohner, a junior at CMC who will undoubtedly become a great economist or investor (or anything else she puts her mind to), mentioned it at our macro trends group meeting last week and in my opinion, it is the best summation of what led investors and financial institutions into the current credit crisis.

Lloyd Blankfein, the CEO of Goldman Sachs lays out the major factors that contributed to the downfall of our financial system and offers a cautioned prescription for the changes that must be made to prevent future crises without sacrificing economic growth in the long-run. If you have trouble accessing the story, it was published in the opinion section of the Financial Times on February 8th.

Through the Lens

2009-02-15T10:30:00.001-08:00

Taken on February 14th, 2009 at the Claremont Cougars lacrosse game against the #1 ranked Chapman Panthers.

In case you missed it...

2009-02-15T10:17:00.000-08:00

...the House and Senate signed off on the $787 billion stimulus package on Friday. The Wall Street Journal has the details. As a member of the generation who will will actually be paying for this over the years, I just want to thank the old guys who made this bill possible.

In other news, President Obama is shifting his focus to the budget deficit. Well, I'm glad we're finally getting around to that. Now that we've pumped over a trillion dollars into the economy, let's go figure out how we can reduce our spending.

Rampant Spending Does Not Fix an Economy

2009-02-15T09:54:00.000-08:00

I was checking out some stories that friends had put up on Facebook, and thought that Dominic Lawson neatly sums up the flaws in Obama's new deal in today's Sunday Times. We tried this whole spending spree idea once before and it left us in a state of depression/recession for over a decade.

As for the open letter to President Obama in the New York Times, it is signed by over 200 economists, including Nobel laureates Vernon Smith, James Buchanan, and Edward Prescott as well as CMC professors Richard Burdekin and Marc Weidenmier (two professors whose opinions I personally take very seriously). Even Eugene Fama, who will probably join the ranks of Nobel winners, has put his signature on the letter.

Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we the undersigned do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan's "lost decade" in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policymakers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.

For the whole letter, click here.

Through the Lens

2009-02-12T10:28:00.001-08:00

The view of the San Gabriel Mountains from Claremont Mckenna College. Taken on Tuesday, February 10th, 2009.

A View of the Stimulus from Chicago

2009-02-12T09:49:00.000-08:00

For those of you who have never heard of the "Chicago School of Economics," let me first clarify that it is not the Midwest's version of the London School of Economics. The Chicago School is not an institution, although it does have its roots at the University of Chicago, which is home to one of the world's top economics departments. The school is recognized for its monetarist, rational, and libertarian viewpoint. Although I don't agree with all of the theories that have come out of Chicago (and am hoping to make a living by defying their efficient markets hypothesis), it is home to some of the brightest minds and soundest ideas in economics.

Returning to the point, two Chicago professors co-wrote a piece in today's WSJ which summarizes the biggest problems with the stimulus package. While this represents a clearly conservative perspective, I agree with their premises and arguments. As I've said before, the stimulus is far from perfect. However, if you disagree, I'd love to hear your thoughts.

Mr. Market

2009-02-11T08:58:00.000-08:00

"In the short run, the market is a voting machine but in the long run it is a weighing machine."

--Benjamin Graham

After a huge one-day decline in the stock market, like the one that occured yesterday, it is too easy for investors to lose sight of their long term investment plans. On days like that, there's a section of Warren Buffett's 1987 chairman's letter to Berkshire Hathaway shareholders that I like to revisit. He describes Mr. Market, a character first created by Buffett's mentor, Ben Graham:

Ben Graham, my friend and teacher, long ago described the mental attitude toward market fluctuations that I believe to be most conducive to investment success. He said that you should imagine market quotations as coming from a remarkably accommodating fellow named Mr. Market who is your partner in a private business. Without fail, Mr. Market appears daily and names a price at which he will either buy your interest or sell you his.

Even though the business that the two of you own may have economic characteristics that are stable, Mr. Market's quotations will be anything but. For, sad to say, the poor fellow has incurable emotional problems. At times he feels euphoric and can see only the favorable factors affecting the business. When in that mood, he names a very high buy-sell price because he fears that you will snap up his interest and rob him of imminent gains. At other times he is depressed and can see nothing but trouble ahead for both the business and the world. On these occasions he will name a very low price, since he is terrified that you will unload your interest on him.

Mr. Market has another endearing characteristic: He doesn't mind being ignored. If his quotation is uninteresting to you today, he will be back with a new one tomorrow. Transactions are strictly at your option. Under these conditions, the more manic-depressive his behavior, the better for you.

But, like Cinderella at the ball, you must heed one warning or everything will turn into pumpkins and mice: Mr. Market is there to serve you, not to guide you. It is his pocketbook, not his wisdom, that you will find useful. If he shows up some day in a particularly foolish mood, you are free to either ignore him or to take advantage of him, but it will be disastrous if you fall under his influence. Indeed, if you aren't certain that you understand and can value your business far better than Mr. Market, you don't belong in the game. As they say in poker, "If you've been in the game 30 minutes and you don't know who the patsy is, you're the patsy."

Ben's Mr. Market allegory may seem out-of-date in today's investment world, in which most professionals and academicians talk of efficient markets, dynamic hedging and betas. Their interest in such matters is understandable, since techniques shrouded in mystery clearly have value to the purveyor of investment advice. After all, what witch doctor has ever achieved fame and fortune by simply advising "Take two aspirins"?

The value of market esoterica to the consumer of investment advice is a different story. In my opinion, investment success will not be produced by arcane formulae, computer programs or signals flashed by the price behavior of stocks and markets. Rather an investor will succeed by coupling good business judgment with an ability to insulate his thoughts and behavior from the super-contagious emotions that swirl about the marketplace. In my own efforts to stay insulated, I have found it highly useful to keep Ben's Mr. Market concept firmly in mind.

Following Ben's teachings, Charlie and I let our marketable equities tell us by their operating results - not by their daily, or even yearly, price quotations - whether our investments are successful. The market may ignore business success for a while, but eventually will confirm it. As Ben said: "In the short run, the market is a voting machine but in the long run it is a weighing machine." The speed at which a business's success is recognized, furthermore, is not that important as long as the company's intrinsic value is increasing at a satisfactory rate. In fact, delayed recognition can be an advantage: It may give us the chance to buy more of a good thing at a bargain price.

Mr. Market is perhaps the best and most enduring allegory for the market tides. It helps to keep him in mind when the market becomes especially turbulent.

(PS--the name of this blog pays homage to the book, Poor Charlie's Almanack, a collection of talks, lectures, and public commentaries by Charlie Munger. As Buffett's partner for the past several decades, his role in the success of Berkshire Hathaway is frequently overlooked. However, his unique blend of intelligence, common sense, and humor has made him one of my role models.)

What Really Affects Investor Risk-Taking?

2009-02-10T22:28:00.000-08:00

Due to my overwhelmingly exciting research proposal writing in the past few days, I wasn't able to post this story right away. Strangely enough, it actually relates to my senior thesis topic, which examines the role of emotions in financial decision-making and risk-taking, a subject most people might want to familiarize themselves with given recent market turmoils. Nicholas Kristof of the New York Times ponders a question which only recently took on new meaning: should there be more women in corporate boardrooms? Apparently, this was one of the many discussions at the World Economic Forum in Davos, Switzerland last week. Thankfully, they also debated issues that most people would consider more relevant, but new research does shed some light on this particular matter. Most management consultants would tell you that having a diverse range of opinions allows a group to make better decisions (until you simply have too many people and can no longer make decisions--see "Congress"). Also, research shows that men take more financial risks than women (shocking, huh?). Thus, a simple recommendation emerges. All we need are more women in high-ranking positions at banks to reduce the risk in the financial system. Voila!

Feel free to comment on this as is, but I'll follow up with more interesting facts I found while researching my thesis...

Wisconsin Politics

2009-02-10T21:05:00.000-08:00

Although I've only spent about one month out of the past eighteen in my home state of Wisconsin, I still pay some attention to Badger State politics. (Yes, we're the badger state....it wasn't my idea, but a distinction I'll still wear with pride.) Unlike California, Wisconsin politics are usually pretty cut and dry. There hasn't been a Wisconsin version of Prop 8--no referenda that garner national or global attention. Yet, with a population of around 5.5 million people, Wisconsin politics are by no means inconsequential.

One of my friends from home, who returned to Madison for law school, has apparently begun blogging for the DailyKos and focuses his first diary piece on our beloved state politics.

Check it out and let him know what you think. Especially if you're a Wisconsinite....

"Entrepreneurship" in Zimbabwe

2009-02-07T14:43:00.000-08:00

For all our high-brow talk about economic growth models and our theories connecting GDP, unemployment, inequality, nutrition, access to credit markets, land rights, and informal insurance networks, we "students" of development economics turn a blind eye to the reality on the ground. If you want to know what real entrepreneurship looks like in developing economies, take a peek at "Dave Mphele," who the Christian Science Monitor characterizes as a "one-man NGO, a mafia king, a doting father, [and] a shrewd businessman."

While I don't know how moral some of his activities may be, he's doing what he can to improve his lot in one of the world's worst economies. He represents the best (and possibly the worst) of the brand of capitalism unleashed when government and markets fail.

A Disastrous Stimulus?

2009-02-06T20:20:00.000-08:00

Just prior to the Senate's decision today to move forward on a $780 billion stimulus package, The Wall Street Journal featured a wonderful opinion piece by by George Melloan that takes the time to look at the consequences of adding even more government spending. The idea that all government spending will always translate into economic stimulus in not just naive, it's downright stupid. This piece looks at the potential long-term consequences of the stimulus package, most notably either the unlikely increasing of tax rates, a seemingly ugly inflationary picture, and/or a weaker dollar stemming from low interest rates (and high inflation).

But perhaps the stimulus packages is somewhat necessary. Maybe there are components that will help grow the US economy and our standard of living in the long run. However, the stimulus appears to be filled with even more pork-barrel spending than typical legislation.

Is the stimulus package perfect? No legislation ever is.
Is the stimulus package necessary? In some form, sure, it might help.
Is this the type of stimulus our economy needs right now? Probably not.

The Evolution of an Idea

2009-02-06T19:19:00.000-08:00

As I clicked through the interesting stories on RealClearMarkets today, one article in the LA Times stood out. Written by leading economist Niall Ferguson, it laid out a plan to bring about recover in the US (and, with a little luck, the world as well). Critical of neo-Keynesians, it suggests that insolvent banks be restructured rather than reorganized, to avoid the bureaucratic nightmare that would be government-run financial institutions. Then it prescribes a conversion of mortgages to lower interest rates and longer maturities, reducing the clamp on spending and saving that high interest payments are making on the American people.

These are seemingly good ideas, but that's not what got my attention. Only a few days ago, the FT ran an almost identical column by Ferguson. The fact that it was slightly different, but with the same general facts, figures, and ideas intrigued me. Searching more, I found the original article, "Beyond the Age of Leverage: Alternative Cures for the Global Financial Crisis," a combination of the other two articles. It's interesting to note the minor editorial changes made to target different audiences, but if you're mostly focused on his ideas, this is the one to read. As for Ferguson's suggestions to improve the economy, his arguments make a lot of sense in a world that seems to be operating in a lesser-of-two-evils mode.

Good Parenting

2009-02-06T14:42:00.000-08:00

One of my friends sent this video to me and it made me laugh. Hopefully it'll make you laugh, too. I can't wait till this kid gets older and his dad has the "Don't Do Drugs" talk with him.

(As an interesting side note, the video was taken on one of the Flip video cameras, which are really cheap, but provide high quality video with an easy-to-use format.)

The Edge You Need

2009-02-05T09:56:00.001-08:00

As I and every other graduating senior can attest, the job market right now is godawful. What that means to us, and perhaps to you, is that we need an edge, a leg up on the competition. And thanks to my friend Max Davison, I think I've found that edge:

I present to you: Barney Stinson's video resume.

It's awesome.

Life Update

2009-02-04T19:16:00.001-08:00

So I just realized that in my, er, "hiatus," I completely forgot to mention a major fact. Since that bizarre "Who Am I?" post a year and a half ago, in which I briefly and unglamourously introduced myself, I have finished my studies at the London School of Economics, returned home to the United States, and am currently halfway through my senior year at Claremont McKenna College. In the past 18 months, I have learned quite a bit about myself and the world in which we live. All of this means that I now bring to you a somewhat-revamped and more-frequently-updated blog, with (hopefully) briefer thoughts and a wider range of links to other, more interesting stories.

To what do you, the reader, owe this development? To my favorite bloggers, of course. Besides Drudge, RealClearMarkets, RealClearPolitics, Long or Short Capital, Greg Mankiw, and The Big Picture, my new addition is Andrew Sullivan's Daily Dish.

Mr. Sullivan joined an excited room full of Claremont McKenna Students last week at the Marian Miner Cook Athenaeum and I was so inspired while eating dinner with him and listening to him present his ideas that I decided to give the blogging thing another shot. So if my blog becomes more entertaining, send your thanks to him. And if instead it sucks, well, that's still my fault.

Pay Your Freaking Taxes

2009-02-03T11:09:00.000-08:00

First they hit Al Capone. Then they got Heidi Fleiss. And now, as the new Obama administration tries to hit the ground running, unpaid taxes look ready to undermine the whole shebang. The new Treasury Secretary, Tim Geithner faced a rough confirmation after failing to pay $43,000 in taxes. Now Obama loses his choice for health czar/Health Secretary, Tom Daschle, after the revelation that he failed to pay a staggering $146,000 in taxes. As a point of reference, that's almost three times the median US household income! And lest we forget, Nancy Killefer, who seemed destined to become the federal government's first chief performance officer, withdrew her nomination a month ago also due to tax complications. Maybe those calls for tax reform and a more transparent and understandable tax code won't fall on deaf ears anymore!

For the full story: Daschle withdraws as nominee for HHS secretary

This Ain't Kosher

2009-02-03T10:03:00.001-08:00

I love bacon. More than the next guy. In fact my love for bacon has even become a factor in my religious beliefs, as I love bacon and other pork products too much to ever be a strict Muslim or Jew. But even I have to admit when someone outdoes me. And the Bacon Explosion guys certainly do that. So much so, that even the New York Times has picked up on their passion for pork. I'd say this definitely gives new meaning to "rolling a fattie."

The American Automobile

2009-02-02T23:53:00.000-08:00

A sad development in the saga of my new favorite American car brand, Tesla. With unheard of power for an electric car and unbelievably fresh styling, the Tesla Roadster seemed poised for greatness. Unfortunately, the business isn't running as smoothly as the car.

http://www.engadget.com/2009/02/02/tesla-cant-get-funding-postpones-plans-to-build-new-factory/

Fishing in Mexico

2009-01-10T23:28:00.000-08:00

I found this joke on Michael Covel's blog and it's just too good not to share:

A New York businessman was on holiday at a swanky hotel in Mexico. He decided to go down to the local fisherman’s bar to get a flavour of the town. On arriving at the bar he saw the fishermen drinking wine, singing and dancing with their wives and playing guitar. It was a magical, happy scene.

After a few drinks the businessman got talking to one of the locals. He asked him what he did for a living. The guy replied:

“I am a simple fisherman. I go out every day in my small boat and catch a few fish. I keep what I need to feed my family and sell the rest in the market. I live a good life. In the evenings I come down to the bar, meet my friends, drink some wine, sing and dance with my wife and play a little guitar.”

The New Yorker thought about this and said to the fisherman:

“What happens if you borrowed a little money and bought a bigger boat to catch more fish?”

The fisherman looked puzzled.

“If you catch more fish you will earn more money. Once you have more money you can borrow some more to buy another boat. After paying the interest you will have vastly more money than you have now.”

“Then what will I do?” replied the fisherman.

“Well, you can use that extra money to buy more boats and when the revenue is coming in from all your boats you can sell them and buy a big fishing vessel, which you can use to catch the really big fish in huge numbers far from shore. You will be rich beyond your wildest dreams!”

“And what will I do with all this money?” asked the simple fisherman.

“You’ll be able to move to New York and set up a company, using finance from the big New York banks and increase your fleet. You could be the biggest fishing operation in Mexico within a few years!” replied the New Yorker rather excitedly. “It is going to be very stressful however. You are going to have to work very hard and manage hundreds of employees and your ships and distribution networks, but you’ll be rich and living in a huge house in Greenwich!”

“Wow! New York! Greenwich!” said the fisherman, “I’ve never been out of my province!”

“Yes, and the best bit is that you’ll then have such a huge and profitable company after 10 or 20 years that you can sell it on the NYSE for millions of dollars! Just imagine…!”

“And what will I do with all this money?” asked the fisherman keenly.

“Well, once you pay off the debts you can retire to a small fishing village in Mexico without a care in the world and go to the local bar every night, drink some wine, sing and dance with your wife and friends and play a little guitar.”

The fisherman walked away shaking his head in dismay.

Cipolla on Stupidity

2008-11-10T10:42:00.000-08:00

Quotes Entirely Relevant to Something

"Human affairs are admittedly in a deplorable state. This, however, is no novelty. As far back as we can see, human affairs have always been in a deplorable state."

--Carlo Cipolla, The Basic Laws of Human Stupidity

Keynes on Education

2008-04-06T04:55:00.000-07:00

Quotes Entirely Relevant to Something

Education is the inculcation of the incomprehensible into the indifferent by the incompetent.

--John Maynard Keynes

On John Wayne

2008-04-05T11:13:00.001-07:00

You have to love classic Western movies. There's just something so perfect about the scenic settings, the less-than-fully developed characters, and the tales of honor among men. I'd nearly forgotten all that, having been over here in London for so long. As if it weren't bad enough that I haven't been on a horse in six months, I haven't seen any Westerns aside from McClintock in that time either. At least until today, that is. Apparently the Brits have some fascination with American Westerns. This afternoon, they aired one I'd never seen before--a standard John Wayne Western called Chisum . Maybe because I grew up watching John Wayne movies with my dad or maybe because I feel drawn to the characters that brought order to the West, I've always loved John Wayne movies. The thing that strikes me these days more than ever before is just how principled his characters tended to be. From McClintock to Chisum to The Quiet Man (which admittedly isn't a Western), he always tried to avoid violence and take the high road until ultimately being pushed over the edge by the dishonorable tactics of his foe. And of course, then, being John Wayne, he kicked someone's ass.

But this got me thinking. That kind of honor, which used to be the stuff of legend, barely seems to make it into the movies these days. Maybe we as a society are less focused on honor or maybe movies are becoming more realistic, documenting the lack of honor that seems to surround us. But there is something distinctive about honor that has enabled it to weather the test of time, spanning ages and cultures. And while every age and culture has established its own unique code of honor, the concept never fades. It always has been and always will be something to strive for.

Strangely (or not so strangely given the fact that I Google everything these days), I checked out the Wikipedia page on honor (or honour--see spelling differences) and found an interesting section on cultures of honor and cultures of law. Now while most developed countries and cultures today are ruled by law, there used to many and still are a few cultures which have no recourse to law enforcement or government. Rule of Law requires some sort of social contract between the people and the government. The people give up the right to take matters into their own hands, knowing that transgressors will all be subject to punishment by laws that govern everyone equally. In other cultures, such as the old American West, many nomadic peoples, those who are for some reason "above the law" (like the rich and famous), or those whose activities do not lend themselves to seeking assistance from law enforcement agencies (such as the Mafia and other gangs), there must be rule by a code of honor. Frequently, this is a simple matter of vengeance, retaliation, vendetta, et cetera. According to Wikipedia, the two types of rule cannot coexist. Friedrich von Hayek, in The Road to Serfdom, highlights the need for Rule of Law in a society to ensure that everyone is subject to the same treatment under law and that consistent systems are in place to prevent abuse of power or seizure of control. While I agree with him that establishing the Rule of Law is essential to the development of a sound society, the romantic in me is still drawn to the nobility found in such honorable characters as those played by John Wayne. Even under Hayek's Rule of Law, it is not enough to act in a legal way; we must still strive to act with the honor that distinguished our forefathers. Play nicely for as long as possible, but if pushed too far, do as the Duke did and kick a pilgrim's ass.

Now I could take this to another level--that of foreign policy. It's pretty clear from both historical and current events that the Rule of Law doesn't exist at an international level (as nice as it would be if it did). At the present moment, countries can only be governed by a code of honor, not by a code of laws. The US has had incredibly poor foreign policy recently. Now there are many reasons for this, but one that really stands out is that our leaders (even if they are characterized as cowboys) have forgotten the code of honor that we like to imagine ruled the West in the absence of laws. In fact, there were probably as few men with John Wayne-like honor back then as there are now. But that makes it all the more important to act like the ideal that he portrays. We should play nicely for as long as possible, be honest with other countries, talk to "vermin" only when necessary, and only if pushed too far, fight back with all the intensity of John Wayne and all the strength of the US armed forces.

That said, I'm still not hawkish overall and think that there is no good reason for the US to spend as much money on its armed forces as the next six countries combined. Overall, I'm long honor and short retarded allocation of resources (especially when they're paid for with my money).

Thai Thoughts

2008-04-04T01:15:00.000-07:00

I've just returned to London after a week travelling around Thailand with some of my closest friends. The country was incredibly beautiful and the people were unbelievably friendly (especially the hookers and ping-pong show promoters--as if we really wanted to see a ping pong ball get shot out of a woman's genitals at five in the morning). Got exposed to a bit of the culture while wandering night markets, riding around in the back of pickup truck taxis, eating fried grasshoppers, roasted roaches (if you're wondering, yes, there's video footage), and something that really seemed like a rat on a stick. We also checked out several Buddhist temples, the ruins of ancient Sukhothai, and of course, the white sand beaches. For the first tme in my life, I went swimming in the ocean. Yes, I know, I've been deprived.

One of the most remarkable things about the country (and, I guess, of the entire region) is the fact that almost all prices are negotiable to some extent. Unfortunately, in a lot of places, natural monopolies have emerged and mini-cartels have been set up to lock in above-market prices. Fortunately, my friend Ben is an expert price negotiator, having honed his skills in the streets of Beijing. Bargaining at the street markets and with cabbies was actually really fun. Hopefully, I'll get to do some more of that this summer while interning for Merrill Lynch. At the end of the day, though, I find that I enjoy finding bargains by recognizing something underpriced more than I enjoy negotiating the price down to a level where it's a bargain. Of course, should I ever enter the world of real estate investment, both will be essential skills. In the next few weeks, I'm cramming for exams, visiting some companies in Dubai, and actually updating this blog. Expect several randomly relevant quotes, tales from Dubai, and a couple of essays that might actually interest someone (maybe even you).

Other good news is that it looks like Robert Mugabe has finally lost control over Zimbabwe. Hopefully, his successor can bring the country around. As always, I'm short African dictators.

Which brings us to my buy recommendation of the day--long relaxing walks on the beach in Thailand.

Long Time, No See

2008-01-18T13:37:00.000-08:00

As you can clearly tell if you've been keeping up with this blog (and obviously, I haven't), the whole daily entry thing is more than I can handle. Now, I am not going to change that and begin making daily entries. But, in the absence of truly original writing, I will be making various recommendations every few days. Should that be too difficult a task (which will probably be the case in the next week or two since I'm catching up on work that I didn't do while traveling over the Christmas Holiday), I will be posting random quotes and things that just generally seem interesting to me. If you like them, that's cool. If not, it's not my fault you lack class. In that vein, let me present to you what will surely be one of many

Quotes Entirely Relevant to Something.

The word "politics" comes from the Greek "poly-" meaning "many" and "tics," which are, of course, small blood-sucking parasites.

--a paraphrase of Ken Fisher in The Only Three Questions That Count and originally, 1992 Libertarian presidential candidate Andre Marrou.

Why English Men Actually Wear Pink

2007-11-02T08:52:00.000-07:00

Since coming to England, I have noticed one thing nearly everywhere I go. Whether I'm walking to school, taking the tube across town, chilling out at the campus coffee shop, zoning out in lecture, or out partying with friends, it's there. If you've been here, you know what I'm talking about. There's always some dude in a suit wearing a pink or lavender shirt. Now, those close to me are probably thinking, "Wow, you really are a hypocrite, aren't you?" And yes, I'll admit, I do wear pink from time to time. But while I've never had a good excuse in the past, I do now. Because there is another pink thing that has followed me around everywhere I've gone in this city--the Financial Times. That's right, the FT. As much as I love wearing blue, white, and other masculine colors, nothing coordinates with the Financial Times as well as a pink shirt and a dark suit. Think about it. Nothing looks smarter than a man who can not only coordinate his wardrobe, but who can also accessorize with the Financial Times. If you're in the States and reading the Wall Street Journal, fine, go with the white shirt and dark tie. Be boring, traditional, and
conservative--just like the WSJ. But if you're in London, remember that it's got to be pink.

On that note, I have to recommend an article from the Comments page of today's FT that I read on the tube home from school. As current events go, it seems to be a pretty good outsider's take on the role of the good ol' USA.

Finally, in the spirit of the Long or Short Capital guys (who seem to be taking the day off), I'll make my call. It's a full portfolio play--long the FT; short the WSJ (which you should be doing anyway since Rupert Murdoch's buying Dow Jones); stock up on pink shirts; and get yourself some put options on ROYGBIV.

Beer List: The First Five Weeks (22 September- 29 October)

2007-10-29T15:01:00.000-07:00

The following is the true story of my first five weeks in London, condensed into those periods of time in which I happened to have a beer (or scotch...or wine...or shitty gin) in one hand and my BlackBerry in the other. It is a faithful representation of most of my drinking, at least the parts I can remember (and no, I have not blacked out yet). I apologize for any weird abbreviations, shorthand, or typos. I originally meant to use this only as a personal reference and didn't pay any attention to spelling or to clarifying meaningless names and abbreviations for outside readers. All I have to say is that among the most important lessons I have learned here are (1) open container laws suck all the fun out of drinking and (2) variety is the spice of life. I now present to you the Beer List, unedited and unabridged, presented with no commercials by Stella Artois, the top-selling premium lager in the United Kingdom:

Carling-british lager. Very tasty. Great brew for my first day in London. So good that I had two pints for lunch...and nothing else.

San Miguel-tasty beverage with my first meal of fish and chips. Don't remember the restaurant, but I think it was near Leicester square.

Heineken-just Heineken. Had it late at night at a beach-style bar with Eric Ren during my first night in town.

Some kind of cider at the Wellington. Need to go back to remember its name. (29 sept-think it was Magners, an irish cider).

Strongbow cider with chicken kiev sunday night (aka the last night before I begin cooking for myself). I could get used to this hard cider thing. After dinner, returned to Trinity and had a single of Glenlivet with the cool bartenders (Nic and Rocky) and an entertaining customer (Frank). Closed the place down and Frank took me to a nice local pub around the corner. Turns out he's a licensee, so he unlocked the pub, turned on the lights, and poured me a drink of Laphroaig, which was really amazing and smoky. London is amazing.

Bottle of white wine (Isla Negra Chardonnay) with salmon dinner. Great day and great dinner with Helena L.

Some cheap-ass gin with the grad-student partiers. Tasted like pine-sol, but whatever...I needed to have a drink.

Beer at Nando's (need to rememmber name) with eric and emily.

Asahi, Japanese beer at a cheap little place with the SWers on Russell Square. Great with sushi.

Adsnes Broadside, a great dark beer, with Chris and Helena after Love's Labour's Lost (Globe Theatre version)at the pub I had dinner at on Sunday.

Finally tried the Vina Concha y Toro Casillero del Diablo cabernet sauvignon after dinner with Helena. Made even better by her singing along with herself and her Stanford Harmonics(a capella group).

Pimm's with a few folks from Sidney Webb while floating the Thames to Greenwich. Classy.

Oh guiness. Finished off the Diablo with a small dinner, then hurried to quiz night to meet the SW guys and kick some Bankside ass. Brought my 6 pack of Carling so Helena, Antony, and I wouldn't be too far behind the others. At quiz night, had a Grolsch, then 2 Guinesses. After that, hit up a bar on Borough High Street with everyone. Overall, had a great night.

Bottle of ok chilean cab at an Indian restaurant above the blue-eyed maid on BHS with dinner. After, went out with Helena and the Union gang to Vinopolis. Had a great but overpriced Californian and a decent Chilean. Walked along the Thames with Helena.

Ministry of sound night? Okocim to start things off with a foreign twist. 2nd okocim and 2 shots of vodka. Party foul opening kirsten's stella resulted in a double of smirnoff and a single of "high commissioner" whisky. Forced to down the rest of the 2nd okocim due to peer pressure (who could resist?). I believe that I have had an extra shot of Smirnoff thanks to chris and joe cox.

First night w/ everyone in Sidney Webb (30-9....aka September 30th). Headed to Atlas and mingled. Stella, then Beck's, then Guiness.

Picked up a cider with a sandwich at lunch. Bumler's or something like that. Pretty good. Had a guinness at the three tuns after listening to Greenspan.

With fish and chips, ordered a London Pride. Very tasty. On general course boat trip, received two free drink tickets. First went to a Kronenbourg 1664, which, quite honestly sucked. Too lemony, light, and metallic. Second should have been for one drink, but ended up better. Ordered a Strongbow, but the keg crapped out 3/4 way through the cup. Asked if I should give 3/4 a ticket (politely, of course) and ended up getting a full pint of Foster's out of the "negotiation." In the words of McDonald's, "I'm loving it." Must dine and drink at Skinker's on Tooley Street for their kindly allowing me to use their toilet without consuming anything.

Tiger beer was a great way to get out of an awkward situation.

Drank Coke at Lehman networking event. Better for a good impression. Came back and had a stella and a strongbow at quiz night and a celebratory champagne for best group name.

Had a bottle of red wine (---) over one of Helena's amazing chicken and soup concoctions. Wine left much to be desired; company was wonderfil as always. Grabbed another bottle of rose (---) that we drank while walking up to meet Cynthia.

Decided to do fish and chips at the Anchor. Went for an Anchor standard, Greene King IPA, which was really tasty.

Had a strongbow while walking up to Hyde Park. Wonderful place. Simply gorgeous. The cider was nice, too.

After an interesting day (getting my projector and bike, having a city careers forum, my first LSE lecture, and a business society meeting (at which I lost the treasurer vote by only a handful votes out of over 100), then getting fucked over by Merrill's waiting list), I went to the Trinity for a good beer and meal. Tom Woods Bomber County with dinner, which is a tasty dark beer, although it's a little weak. Next up, see about writing a defense of the Day $200 million grant or getting sloshed on Jameson. Fun times, either way.

So that last entry was about a week ago. Have gone to two operas since then and had lots of fun with the beginning of school and all. Drink-wise, I finally tried Carlsberg at the 3 Tuns and liked it. Mainly stuck to Strongbow and previously mentioned beers over the course of the week (although I did have several glasses of LSE's special red wine at the Gen Course/BSc econ reception and a couple drinks of Jack at the Atlas and 3 Tuns). Today, met up with the Loesch twins and enjoyed a wonderful afternoon picnic in Hyde Park complete with a bottle of Casillero del Diablo 2006 shiraz rose. Stopped at the Chaplin restaurant by Leicester Square and enjoyed sausage and mash (delicious) and a pint of Timothy Taylor Landlord beer. Not my fave in London, but good.

Monday night, the 15th. Just now walking home from a Bain presentation in Westminster. Enjoyed several glasses of "something Vega" red wine at the networking reception. Really liked the firm; wish they had undergraduate internships in their London ofice.

The best sushi I've ever had only a block away from LSE. Delicious lunch w/ Jessica and Emily, washed down with tasty Asahi.

Had a Beck's at the Citi presentation, as I gave serious thought to becoming a trader. Bumped into Nathan Vazquez randomly in the lobby after the event. Quite strange, given that we hadn't seen each other for the better part of a decade. At home, had more Beck's with a self-cooked pasta dinner.

Nothing like a big, tasty bottle of Tiger beer to wash down an Indian dinner and a hard day. Followed by a Strongbow and double of Jameson at the Atlas and some white wine and baklava with three crazy girls.

So I wanted to try all 6 of the scotches at Cumberland Lodge, but failed. You know what Alex Combs says, though: "Shoot for the stars. Even if you miss, you'll land on her face." In that spirit, even though I did not achieve my goal, I did manage some success. I was able to "sample" 5 of the 6. The ones I got were Laphroaig, Glenfiddich, Glenlivet, Macallan, and Balvenie. I don't remember all the ages, but they were all at least 10 yrs old. Only missed The Famous Grouse, which means I didn't miss much.

In the week since that last entry, I've tried some good stuff, including Caffrey's, which I vaguely recall being quite tasty. Unfortunately, I wasn't keeping track of my booze-ups, so we'll never know exactly what was what. If I do remember in the future, I'll jot them down, but don't count on it.

Sent from my BlackBerry® wireless device

Who Am I?

2007-07-23T18:27:00.001-07:00

Since everybody else seems to have blogs these days, I figured I'd follow my herd instincts and do the same. Which leads me to my first disclaimer. It's not my fault that I've got a blog. It's everyone else's. Yep, you heard that right. The blame rests squarely on your shoulders. Yes, you, with your overly philosophical-sounding blog like "The Smartest Fool" or your well-intentioned, slightly-oxymoronic (or maybe just actually-moronic) title like "The Positive Negativist" or the "The Cynical Optimist." Now that we've established that it's not my fault that I'm keeping a blog, let's cut to the heart of the matter.

Who am I?
Well, that is the question on your mind, isn't it? A) It's the question that we've all been asking in one way or another since we were able ask pointless questions and B) if you don't know me, you're probably wondering "Who the fuck is this guy and should I listen to any of the crap he says?" Well, I'm going to avoid the glib or philosophical answer and go with the basic, "Hi my name is..." response. I'm Chris Brigham, currently a 20-year old college student at Claremont McKenna College. As of October, I'll be studying abroad at the London School of Economics in (you guessed it!) London, England. As far as the crap that comes out of my mouth, I take full credit for it. Most of it's even original. If you like it, that's awesome, if you don't, well, I don't know. . . I'm sorry?

What's my blog about?
This one's rather obvious, isn't it. This blog is about my life and all the minutiae and idiotic opinions that fill it. It's about the adventure I'm hoping to have defending America's reputation as the undisputed drinking champion of the world. In addition to that, and since I spend most of my time relaxing on the fence when it comes to political stuff, this will be the sounding board where I make fun of both parties at once. Every so often, just for kicks, I might even make fun of some new, ridiculous policy that they're trying to push through. Then again, I can only make fun of politicians and politics for so long. Therefore, to give this blog even more flavor, I'll venture into my favorite realm: economics (you can see already just how exciting this is going to be. Oh boy, politics, econ, and Chris Brigham's ego--I'll bet you're just drooling in anticipation). Econ-wise, I might give you my take on the market, the state of the economy as a whole, a particular company or executive, or something else entirely. Now, keep in mind that if I say it, it's probably either so obvious that everyone already knows it or so wrong that you should believe the exact opposite. If I say go long this-and-that, it could very well be in your best interest to go short. If I say a certain policy sucks, it could very well be the policy that saves the world. Then again, I could always get lucky and be right. And of course to round it all out, I'll link you to my favorite blogs, websites, and celebrity-gossip stories. This could be pretty cool. Or it could be a complete disaster. Either way, it should be interesting. Hope you enjoy it.