Okay, so I’ve seen this weird commercial like a thousand times now (I watch a LOT of late night re-run TV), and there are a few questions I have.
1) did this guy really feel it was necessary to burn 3 loaves of bread so that he can feed his woman a sandwich? and couldn’t he find some, like, at least some whole-grain bread, not cheap grocery store bread if he’s going to use this as a seduction technique?
2) that house seems really big for a young couple that’s just starting a family — unless he’s a dot-com millionaire, and if so, would she be coming home from a needless job, or was she just out to run an errand?
3) does anyone find the second version (which I’ve only seen online), with the different soundtrack, a little bit creepy, like something very, very bad is going to be at the end of the bread trail?

Version 2:

Palmyra atoll, in 2000

I was watching the Clint Eastwood Iwo Jima film when I decided to look up where dad served during World War II, a tiny island that he referred to as something like  hell in a poem he dug out of his scrapbook and gave me some years ago (another story I won’t go into).

Found some interesting links, using the Google, and now I know why he generally does not speak highly of his time there.  You would think being stationed on a tropical island would be great, but one story talks about how the beaches are beautiful but useless because they are a breeding ground for sharks, and this story notes how remote the island is, even in modern times, not only because of location, but because its airport runway is coral and can only be used by certain types of planes:

http://military.rightpundits.com/2008/04/23/researchers-stranded-on-palmyra-island/

Apparently, a lot of the WW2 era buildings are still there and being used — it’s considered a “research outpost”, so being stationed there was kind of like being on Deep Space Nine back in 1943 or early 1944, which is when I think Dad first arrived (underage because he lied in order to volunteer for duty).  Imagine if you spent your high-school junior year in someplace that remote.  The whole island looks to be about as big as the Logan Square neighborhood in Chicago (literally), and I seem to remember dad saying that the Japanese were staked out on one side of the island and the U.S. on the other.  It is 6 feet above sea level at its highest point, although the trees get up to 15 feet at some points.

Another bit of interesting trivia at:
http://www.nola.com/news/index.ssf/2008/04/local_couples_stranded_on_paci.html

“Palmyra is, technically, an atoll, not an island, Martin said,
explaining that an atoll is a ring-shaped coral reef or a string of
closely spaced small coral islands. Generally, an atoll is what remains after the center of a volcanic island sinks, producing an interior lagoon. Palmyra has 56 islets, he said, and its highest point is 6 feet above sea level.
The journey to Palmyra was one of several the Nature Conservancy offers regularly to donors, board members and companies that support the private organization’s preservation work, Martin said.
The conservancy owns Palmyra, which no humans have inhabited except for sailors during World War II, Timmons said. Because it’s on the equator, he said, Palmyra is an ideal spot for studying global warming and the El Nino phenomenon.”

Seems like that would be a pretty cool trip to make, almost worth making the donation to the Nature Conservancy just to see where Dad served.  It’s 1,000 miles southwest of Honolulu, and would definitely be the farthest south I’ve ever been, despite trips to the southernmost points of Mexico (which is already sometimes unbearably hot).

Also found this:
http://www.janesoceania.com/palmyra_images/index.htm

I wondered if Dad knew any of these guys, there were only about 5000 guys who were stationed there during the whole war, and probably not nearly that

Marines on Palmyra, WWII

many at one time.   Not enough ground to stand ’em all on!

Also a brief history of the island, which apparently was “owned” by a family, who let the U.S. use it during the war, and then filed suit and got it back only after a Supreme Court ruling:

http://www.janeresture.com/palmyra/

It’s also surrounded by one of the few remaining pristine coral reefs in the world, due to its remote location, and has long had a reputation for being haunted or the location of strange paranormal activity.  Many planes have crashed there, and pirate ships wrecked there (not a surprise, due to the topology of the area and the fact that it is at the meeting point for the west and south jet streams, making it difficult to judge wind conditions).

You can only visit there with the approval of the Nature Conservancy, which now owns the island.  There apparently is a recent initiative to make this a protected national park akin to the Grand Canyon.

Quite an interesting diversion, meant to be a moment’s map check which turned into a little more than that, giving a little more life to the many war stories I’ve heard my dad tell over the years about his time there — stories which actually got better over the years, and which helped me as a writer learn how to tell stories in an engaging way.

I’ll have to ask him about some of this next time we talk, Palmyra always had a sort of mystical aura about it, the far-away place where Dad did his war duty, but now it has even more mysticism, now that I know it’s a legendarily obscure and isolated base — even by today’s always-connected standards — with a reputation to rival that of the Bermuda Triangle.

You gotta love this discussion on the mouthpiece for the financial industry, CNBC. First, one of then panelists makes the ever-popular “there isn’t political will” argument regarding breaking up banks which are “too big to fail” — I’d like to see the polling data that he’s basing his opinion on (oh, sorry, there is none, he’s basing his opinion on the other bankers he’s been talking with over drinks). Then, as each of the panelists discusses their suggested regulatory schema (surprise, surprise, the banker wants no new regulations at all), the debate shifts to whether there should be a larger, all-ecompassing regulatory agency, similar to the one in the UK. This of course is a convenient way to frame the argument, because it puts the “blame” for the current — and, yes, it is a current crisis, despite the panel’s insistence that it’s all over now and the markets have stabilized — the blame is all on the regulators who somehow didn’t do enough to stop these companies from taking dangerous actions that were, and continue to be, entirely legal.

What is entirely missing from this discussion is that the crisis — and if you put the focus where it belongs, on balance sheets instead of the Dow Jones Average, it continues to be a crisis — the crisis was caused by innumerable actions by innumerable people who were simply doing what they were incentivized to do.

When briefly during the same discussion it is suggested that perhaps bonuses should be based upon the long-term equity of firms rather than short-term profits, this is dismissed as unworkable, with the nonsensical retort that Wall Street workers would flee to foreign firms, as if, in some Galtian revolt, people with homes and kids will just uproot their families and move en masse if they are asked to be responsible.

The discussion keeps circling around increasing capital requirements as the silver bullet that will solve everything, even though later in the same discussion, increasing capital requirements is derided as a move that would make most of those “too big to fail” financial behemoths unrprofitable.

So, let’s add this all up:

1. Reasonable capital requirements are the only way to fix the system;
2. Reasonable capital requirements would be enough to overwhelm the advantages of scale which are the reason for being of the largest banks;
3. Increasing the regulatory power of the government will not help;
4. Writing regulations which address the underlying causes of the current crisis will not prevent the next one, which is certain to be different;
5. Thus, there is no point in doing anything, including incentivizing safer investment practices through changing bonus structures.

So, essentially, CNBC just wasted your time by presenting a panel whose purpose was to determine how to do the impossible. The only solution is to just let businesses fail, because no one on Wall Street will really suffer, their huge bonuses already tucked away, and who really cares if the rest of the economy (and all those unimportant non-bankers) are thrown in financial ruin and economic chaos?

Let’s get real: one change, and one change only, would have more impact than any of those discussed here: change the tax policy applied to Wall St. bonuses. No need to limit the size of the bonuses legislatively or to regulate the structure. Simply tax the bonuses as income, not as capital gains, and use the funds generated as the basis for a “bailout” fund when banks crash again — i.e., let the people who are causing the problem pay for the problem, and directly assume the risk that they have passed on to all of us.

There are precedents for individual investors, who are disincentivized from “flipping” stocks rather than holding them, because short-term gains are taxed at a punitive rate. While this doesn’t stop all speculative behavior, it does slow the train down a bit.

Let the John Galts of the world take all the risks they want, in a truly “free market”, and let them also pay to clean up the mess that they create through foolhardy actions.

The New York Times recently anecdotally explores just who is being foreclosed upon right now, and who is doing the foreclosing, when banks fail and the loans are auctioned off, noting that it’s mostly small-business owners being squeezed by debt-collectors, since most single-family homeowners are at least temporarily exempted by law from foreclosure.

http://www.nytimes.com/2009/04/17/business/smallbusiness/17debt.html

I hate to say I find myself siding more with the debt-collectors on this one, although if some of the tactics outlined are true, the debtors should be made aware of their rights and of their ability to report unethical or illegal tactics — they also should be aware that formal bankruptcy reorganization might be their best option to avoid these unethical practices. As the old r&b tune goes, “no pain, no gain”.

Most interesting part of this story however, is the chart in the sidebar:

http://www.nytimes.com/imagepages/2009/04/16/business/20090417_DEBT.html

If you do the math, essentially they are giving away the loans which have missed any payments at all. The “performing” loans represent 57% of the total book value, which is “57 cents on the dollar”, what they have received in toto.

So they are assuming that the only way to get rid of loans which have missed any payments at all is to essentially give them away. It’s kind of bullshit, and to call the guys buying these loans “risk takers” is nonsense. These are collateralized loans, so there is some value to them. In other words, we should be getting more than the “cash value” of the “good loans”, even if we’re packaging them with bad loans, which isn’t clear from the numbers. A very small percentage have been sold at a premium of 1% above book value, but most “good loans” are apparently being sold for the cash value, perhaps a factor of the “fire-sale” nature of these auctions.

This is the same crap that happened with the RTC, they sold the bad loans back to some of the same people who originated them in the first place (note that one of the “example” buyers is a former mortgage broker — they simply shifted business as that business tanked, and became ‘debt collectors’).

I would be interested in knowing if anyone has analyzed TALF in this light — is the government trying to recoup on their “investment” in toxic assets by partnering with hedge funds so that the taxpayers at least receive some portion of any upside to these assets? While it still would probably represent a loss, it does seem that it would be less of a loss than the bank-closure process is creating. (The FDIC still needs to cover through deposit insurance and transfer credits –T-bills — all the “assets” the failed banks were showing on their books, when the deposits are moved to another, healthier, FDIC-insured bank, so 57 cents on the dollar still means the taxpayers, at least temporarily, are covering something under 43 percent of the deposits in these failed banks).

Since the TALF program is being 90% financed by the government, and the assets under consideration would fall into the “not paying” or “some payments” categories, at worst the FDIC auctions are providing a market value of those at between 27 and 50 percent of book value, so are they trying to essentially squeeze another 25 to 45% of recoup out of the process, in aggregate?

In addition, you have to assume also that any profits made by hedge fund operators on these risks will eventually result in some increased tax revenues to the government, but the outright sale of bank assets would as well.

These numbers suggest that in the end, the taxpayers will be on the hook for an amount comparable percentage-wise (but much, much larger in raw numbers) to the Resolution Trust Corporation in the 90s — at least 33% of the funds issued via TARP and TALF will not be recouped by the process. (Unless the government decides to keep an equity stake in banks well beyond the time period when loans are paid back, a politically unpalatable notion).

An improvement on outright liquidation of the banks, I suppose, but isn’t there also an aggregate “opportunity cost” to the economy of dragging this out over 5 years or more, while the increased debt and money-supply cause rising inflation and the contracting GDP causes rising unemployment? In the end, we’re going the route of South America and the International Monetary Fund, a policy which mitigates pain for the wealthiest (investor) classes while severely punishing the poorest (working) classes.

Unless tax policy is adjusted to heavily tax the government-orchestrated windfalls for so-called “high-risk” investors in this scheme, this is basically a shell game which further redistributes wealth upward and further concentrates capital in the hands of the wealthiest segments of society. Is tax policy really likely to be adjusted in that way, or is this going to be another “trade-off” that never happens — like ‘welfare reform in return for universal health care’?

Stephen Colbert has found an outlet for our righteous anti-banker anger, and it also might be a good Fox-network replacement program for “Hole In The Wall”.

I heard about it in USA Today, they said it’s the latest thing, along with “e-lancing” and something called “MySpace”.  Apparently people use “blogs” to write “diaries” on the “intenet”.  It appears that people write about all sorts of things that are important to them, so I guess I will be writing mostly about myself, if I get this right.

I don’t know how long or idea-based these things are supposed to be, but “bloggers” apparently were a “big influence” on the elections somehow.  Maybe I can influence elections, I need a job, maybe I can get elected alderman or something like that.   Well, that’s about all I have right now, but I’m really impressed with the ‘instant communication’ of the internet.  Apparently I already have some ‘comments’ posted by TexasOnlinePoker and ViagraForSale.   Feel free to join in the discussion, glad to know that I have avid readers, even if they don’t appear to be commenting on my “blog”.  That’s the beauty of the internet, the ‘free market’ of ideas, buzzing around like horseflies circling my pile of “blogs’.