Kindle-ing A New Flame?

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

(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

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

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!

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?

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

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

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?

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?

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?

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

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"

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?

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

"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

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

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?

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?

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...

...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

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

In case you missed it...

...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

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

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

A View of the Stimulus from Chicago

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

"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?

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

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

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?

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

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

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

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

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

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

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

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/