Thursday, July 31, 2008
They's out to label us, y'all. They's got these here categories that we all fit. Gotta fit. They's got this here meat axe to help us fit if'n some part of us happens to -- you know -- poke out a bit. A surgical strike on the categorically offending bits 'n' chunks is all it takes to preserve they's ontologically sound categoies.
Take a look at this. It's an essay in The American Conservative by a doctoral candidate in philosophy at UC Berkeley name of John Schwenkler. The topic is food. Food as an economic object. Food as an expression of politics. Food as an integral part of our connection to the earth and to each other.
Food is a portion of the earth which we select with care, ritually purify with fire and take into our bodies. Okay, I added that part myself, but it's not altogether alien from the author's statement that "Leanring to regard a meal as not merely something that fills our bellies and helps us grow, but as the consummate exercise of being carnal and earthbound yet upwardly and outwardly drawn, is a crucial step in the restoration of culture." Not for nothing does the Christian sacrament of communion involve eating. Not for nothing does the Seder revolve around a meal. Not for nothing do the laws of Halal require that each animal slaughtered for food be a sacrifice to God, offered with a prayer. I'm just not altogether certain about the restoration of culture part. Maybe that's just me.
But Schwenkler has other fish to fry. He's looking at the slow food movement and what have come to be called "locavores" and so-called "crunchy conservatives" through the lens of American conservatism. And lo! Alice Waters and Michael Pollan might have some worthwhile things to offer. In fact, except for some "elitist" and "Marxist" lapses in their choice of language, the darlings are actually conservatives!
I'm here to suggest that the labels are less than helpful.
Not far from my home in exurban NE Texas lives a family of evangelicals who home school their too numerous children and raise chickens and lambs. Their farm is beyond organic. No herbicides. No pesticides. No hormones. No antibiotics. No certification of organic status, even (it's not meaningful to their project). They do so for reasons they've derived from their religious practice. They live according to the laws of their faith, as they understand them.
I do not live according to those laws. Lord knows I do not. And yet I've eaten their chicken and the meat of their lambs. I bought those things from them because of my desire to resist factory food. Also because it was delicious. This has nothing to do with the agenda of any political party or with being liberal or conservative. Those are hollow ideas. Empty categories into which we need not fit. Indeed, they are caricatures.
Schwenkler, in fact, exhibits an intelligence which is capable of taking "a closer look" at the pronouncements and stated beliefs of many of the food folk he examines. Looking closer is exactly what is needed, not ideology. What is needed is not a willingness to stuff ideas into an ideologically acceptable Procrustean bed, but a pragmatic approach to specific situations, and he says as much. For too long big corporations and big governmental agencies have made big decisions about our food supply. When I bought half a hog from a local farmer last fall, it came from the slaughter house wrapped in plastic bearing the legend "not for sale." That was because the folks who raised it and the folks who processed it were not big enough for USDA certification. Is my concern about that liberal (don't like big corporations) or is it conservative (don't like big government)?
What difference does it make?
My teacher Joe Barnhardt, who was shot last Sunday because he's a liberal said in a taped interview this week that most liberals he knows are just like most conservatives he knows in that they don't shoot each other about it. He's heir to the great American Pragmatist tradition in philosophy. We need to see what will work. And when it stops working as well as it should, we need to see what else works. We don't really need much by way of names and labels for ideas. Especially not when it leads to ossified thinking.
Worrying about elitists an fuzzy-headed Marxists and whether big government or big business started the agribusiness mess first is supremely unhelpful.
John McCain's presidential campaign intends to release an ad in the coming 24 hours establishing a connection between Barack Obama and tomorrow's total eclipse of the sun. "I told you he was bad," averred a McCain aid on condition of anonymity. "The bastard can steal the light of our sun -- what evil scheme he'll use it for is anybody's guess. But one thing's for sure: he wants us in the dark."
Wednesday, July 30, 2008
It's obvious he's on the mend. It's obvious he's heartbroken over the loss of his dear friend Linda Kraeger. She and her husband lived in a two-story house they shared with the Barnhardts -- separate living quarters upstairs and down. They had moved to Knoxville last year to help care for his two granddaughters.
Over the course of the interview, Joe talks about capital punishment, about thinking he was dying, about religious tolerance, about civil society, about the injuries sustained by other members of his family, and about the daily routines of their lives. Quoting Roger Williams, he says people of different beliefs can live together "so long as you keep the civil peace."
He speaks of having the common sense to know that you can learn from people whose beliefs you do not share. Common sense is what he embodies throughout. That and love for his family.
Monday, July 28, 2008
I just learned that Prof. Barnhardt was one of the victims of the shooting Sunday at the Tennessee Valley Unitarian Universalist Church in Knoxville, TN. Linda Kraeger, who co-wrote Trust and Treachery (a historical novel about Roger Williams, an American leader in the cause of religious tolerance) and an examination of first century Christianity with Barnhardt, was killed in the attack. From what I've been able to learn, she was sitting next to him at the children's play they were attending. When she slumped over, Barnhardt leaned down to help her and was shot. Because he had moved, the shotgun blast hit him off target. Reports tonight indicate he is expected to recover, although his condition is not reported in any of the news items I've scanned online. He is 76 years old. His brother Jack was also shot and is in critical condition. Joe Barnhardt's daughter Linda Chavez is also in critical condition. Her daughter was performing in the play.
The man accused in the shooting is said to have been motivated by a hatred of liberals. It seems he despised their tolerance of gay and lesbian people in particular. Published reports state that police found copies of The O'Rielly Factor, Michael Savage's Liberalism is a Mental Disorder, and Sean Hannity's Let Freedom Ring in his house. The Unitarians who were attacked Sunday belonged to a church that sponsored support groups for area gays.
Once while we were talking after class, Prof. Barnhardt told me "I believe in God, but sometimes I wish nobody else did." He was talking about the terrible crimes committed by people, institutions and governments in the name of God. He was talking about the stupid intolerance that demonizes people who disagree with dogma. Sunday morning, his granddaughter watched as an armed man critically wounded her mother in the name of intolerance.
Friday, July 25, 2008
We got our biscuits as previously advertised. Yum. Sausage gravy, bacon, fresh fruit -- all good things. But lordy, those biscuits.
After that we did the Alamo City gallery crawl. A modest show of small colored pencil drawings at Joan Grona Gallery by Bill Amundson -- a smart caustic take on suburbia and market-driven real estate consumption -- won my heart. Also at Grona were works by Min-Tse Chen (post-manga obscure narratives, mostly in ink on paper) and an installation by Jason Jay Stevens about something. Maybe it was Schroedinger's particle/wave voodoo. Maybe not.
It was too early to get into the Blue Star Contemporary Center, so we drove up to the San Antonio Museum of Art, which is located in a rambling old 19th century brewery. It was good to see works by Bill Davenport (a lumpen little crocheted beer bottle coozy) and Ed Blackburn in their collection. The whole contemporary art exhibit was rather densely installed, though. Everything wanted more air and space, especially the Stella.
Back at Blue Star, we saw a show featuring artworks that dealt with time -- duration, passage, past, future, etc. Joey Fauerso, who exhibited a watercolor and a video at SAMA as part of their recent acquisitions show, presented a video at Blue Star, too. While the didactic label's references to spiritual transcendence fell a bit flat, the lovely imagery of watercolor figures dissolving and being washed away left me both satisfied and ready for more. Also most informative was seeing an assemblage by the late Linda Pace in this context. It was Pace (of picante sauce) funding that led to one of San Antonio's more celebrated art venues: Artpace, which was our next stop.
The current show at Artpace features their four international artists in residence: Marcos Ramirez ERRE (don't know why he usees all caps in that last bit), Mark Bradford, William Cordova, and OLiver Lutz. All were expansive and assertive. Automobiles figured prominently. So did the dynamics of majority/minority social group relations. And the individual's position relative to the social surround. Lutz's Paint it Black at first appeared to be a room of monochrome black paintings with an inexplicable NASCAR race soundtrack, but an adjacent room held video monitors playing surveillance tapes of people (me included) looking at the paintings which -- through the magic of video -- had been transformed to images of a race and its spectators. Sketches for the installation, also in the video room, prove Lutz can draw like a trooper.
There was more, but I've hit the highlights.
Tomorrow, we're off to Austin. There's a video show opening tomorrow night at Art Palace Gallery I need to see. Also dinner at a place my daughter recommended to us.
Thursday, July 24, 2008
We're in the Alamo City tonight, having driven down from Commerce through the insane traffic in Austin and the torrential rains of Hurricane Dolly's periphery. I have to say that the Prius proved its mettle in Austin's stop-and-go Interstate traffic. We got over 48 miles to the gallon, with some five-minute stretches tallying 100 miles to a gallon (according to the car's computerized energy monitoring system) because we were running mostly on batteries.
But Dolly brought us more than downpours and traffic. The cheap motel I booked for us here is also occupied by scores of evacuees from Brownsville and other hard hit areas of the lower Rio Grande Valley. Many of them are badly behaved, unsupervised children, but then some of the adults aren't exactly Miss Manners either. The stairwell smells like the dumpster behind a KFC franchise, and empty cigarrette packs and crushed styrofoam drink cups litter the halls.
And the TV is broken.
Note to self: look out for evacuees. They aren't especially invested in their temporary digs. But these are easy complaints for me to make. Brownsville got hit with a category 2 storm that messed it up pretty badly. Large portions of the Valley are without power and significantly damaged tonight. Still I sure wish the guy who just knocked on my door by mistake hadn't done that. My gun is back in Commerce with the house sitter.
On the upside, we had a good meal at the Blue Star Brewing Co. just down the road from motel hell, and tomorrow I'm going to hit a few art spots in the same business-cum-art complex. Not all will be stellar, but perhaps a few won't suck. I really don't know what to expect. It's been a long time since I was last in San Antonio.
We've decided that our day will begin with biscuits at the Pioneer Flour mill's restaurant, however, and I know that'll be very good indeed. Those guys have been working on their biscuit recipe for almost 150 years. Crap, they may not be open for breakfast.
My hopes are pinned on brunch.
Wednesday, July 23, 2008
One of the derivatives instruments that LTCM used was total-return swaps, contracts that facilitate 100% leverage in various markets, including stocks. For example, Party A to a contract, usually a bank, puts up all of the money for the purchase of a stock while Party B, without putting up any capital, agrees that at a future date it will receive any gain or pay any loss that the bank realizes.LTCM was Long Term Capital Management, a hedge fund whose collapse was so huge the Fed had to step in with gubment bucks to save the financial system from disaster. You can't tell what a financial institution is actually worth in certain circumstances because its "investments" include financial instruments whose value cannot be determined and whose downside is not comprehensible to the "Oracle of Omaha," the most celebrated investor in the country, the man who steered his company to an increase totaling more than 60% of its value over the past five years. Because of their potential to really screw up the entire financial system, Buffett called derivatives "financial weapons of mass destruction. They're so "toxic" (Buffett's word) his company set about selling off the derivatives-based part of an enormous insurance company that forms part of the Berkshire Hathaway empire. They're so complicated they were still working on the divestment according to his shareholder letter in 2003:
Total-return swaps of this type make a joke of margin requirements. Beyond that, other types of derivatives severely curtail the ability of regulators to curb leverage and generally get their arms around the risk profiles of banks, insurers and other financial institutions. Similarly, even experienced investors and analysts encounter major problems in analyzing the financial condition of firms that are heavily involved with derivatives contracts. When Charlie and I finish reading the long footnotes detailing the derivatives activities of major banks, the only thing we understand is that we don’t understand how much risk the institution is running.
And yet so-called over-the-counter trade in derivatives is largely unregulated by anybody. Hell, it may not be possible to regulate them.
The shrinking of this business has been costly. We’ve had pre-tax losses of $173 million in 2002 and $99 million in 2003. These losses, it should be noted, came from a portfolio of contracts that – in full compliance with GAAP – had been regularly marked-to-market with standard allowances for future credit-loss and administrative costs. Moreover, our liquidation has taken place both in a benign market – we’ve had no credit losses of significance – and in an orderly manner. This is just the opposite of what might be expected if a financial crisis forced a number of derivatives dealers to cease operations simultaneously.
If our derivatives experience – and the Freddie Mac shenanigans of mind-blowing size and audacity that were revealed last year – makes you suspicious of accounting in this arena, consider yourself wised up. No matter how financially sophisticated you are, you can’t possibly learn from reading the disclosure documents of a derivatives-intensive company what risks lurk in its positions. Indeed, the more you know about derivatives, the less you will feel you can learn from the disclosures normally proffered you. In
’s words, “Ignorance more frequently begets confidence than does knowledge.” Darwin
However, look at this from an article by Paul De Grauwe in the Financial Times:
The credit crisis has destroyed the idea that unregulated financial markets always efficiently channel savings to the most promising investment projects. Millions of US citizens took on unsustainable debts, pushed around by bankers and other “debt merchants” who made a quick buck by disregarding risks. While this happened, the
monetary authorities marvelled at the creativity of financial capitalism. When the bust came, a large number of Americans who had been promised a new life in their beautiful homes were told to move out. This boom and bust cycle cannot have been an example of efficient channelling of savings into the most promising investment projects. US
In the current clusterfuck of a financial meltdown, with funds and banks and related industries scrambling to cover their lost billions and the Fed pouring billions into the financial industry to keep things afloat, a litle regulation is going to be necessary. The other day, Bush said the money boys had gotten drunk and now had a hangover. It's time to hire a bartender willing to cut the drunks off when they get sloppy.
There is a second idea that is likely to become the victim of the financial crisis. This is the idea found in macroeconomic models, that individuals are supremely well-informed creatures. In these models that are now being used in central banks and universities, individuals understand the most complex intricacies of the world in which they live and they have no disagreement about this. All these individuals understand the same “truth”.
If we have learnt one thing from the credit crisis it is that individuals did not understand the “truth” and, it must be admitted, neither did economists. Individuals who sold the new financial instruments did not understand the risk embedded in these instruments, nor did the buyers. When the bubble started many interpreted the happy turn of affairs as permanent and took on massive levels of debt that turned out to be unsustainable. When the bubble burst, they did not understand what had happened and nor did most experts. Our world is one of a fundamental lack of understanding of the “truth”.
Tuesday, July 22, 2008
Sunday, July 20, 2008
The film features disarming drawings by the man himself which somebody animated in a simple, Web GIF animation way, and they were just about perfect. I saw a documentary about Henry Darger a couple of years ago that used an analogous animation technique with his work. But the Darger film was a mistake. Nothing was added to old Darger's hallucinatory visions of child hell by making the odd Vivian girl twitch and wink. A punk rocker's pictures by their nature must twitch and wink. Twitching and winking in hell is just about the whole point.
The Strummer film contains snippets of early bands like the Vultures and most especially the 101ers. But of course it's the Clash that makes the story compelling. The film begins with some decidedly not ironic footage of Strummer laying on the voice track of "White Riot" in the studio. He's mesmerizing. Like the opening sequence of Greil Marcus' Lipstick Traces which describes the last Sex Pistols' concert with the incredulous assertion "This is really happening." Incredulous because the writer truly can't believe what he is reporting. Strummer's intensity and passion are bare. There is no "you've been cheated" moment in anything that follows.
"London Calling" has been used to sell Jaguar automobiles in recent times, but once it was a raging anthem of fierce resistance against any such shit. So has punk rock's power to shock been domesticated. The Ramones' "Blitzkrieg Bop" sells cell phone contracts and Iggy Pop's drummer entices us to take a Caribbean cruise. The movie follows approximately the same progression from clanging garage band through modest commercial success to stadium rocker status and the inevitable disillusionment of becoming only another part of what the Situationist International used to call the Spectacle.
Spectacle be damned. Strummer remains a man who meant it when he made those harsh noises some may call singing. It was more and less than a commodity he offered his audience.
As Strummer's (and the Clash's) fame grows during the movie, the talking heads commenting on the story get more famous. Early on, it's all ex girlfriends and former bandmates. But soon enough John Cusack, Jim Jarmusch, Martin Scorsese even Johnny Depp offer their stellar judgments on Strummer's cultural bona fides. Who could argue with that lineup? Okay I can argue with Johnny Depp sittin' by a camp fire at the base of the Brooklyn Bridge, but who's counting shit like that?
The emergence of the Mescaleros, Strummer's last real band, is a treat for all of us Joe fans. And throughout it all we are treated to snippets of Joe's regular BBC radio show of world music which ranged from Detriot's MC5 to Elvis (on crawfish) to the Clash and the Mescaleros.
Strummer's voiceover as the film comes to an end urges us all to remember that we are all just people and we can change things. People made it so; people can make it not so.
Anybody want to figure out why I persist in cultural work like painting and art criticism? See this movie. If you don't, fuck off.
Saturday, July 19, 2008
But of late, Pickens has turned into a political independent and an odd sort of bidnessman/environmentalist -- one guided by finance, not concern for the natural world. Check this out. Because the US uses 25% of the world's oil and imports approxiately 70% of what it consumes, Pickens reasons that the country is fixin' to really screw the economic pooch. He estimates that oil imports cost us $700 billion a year.
The answer, Pickens says is wind power. Since burning natural gas contributes to generating about 20% of current electric power nationally, replacing the gas with wind will free up that gas (much of it domestically produced) for fuelling cars. And he's begun building a 4,000 megawatt wind farm up in the Texas panhandle. It'll cost billions, and he's convinced he'll make a profit on the enterprise.
The man is not a tree-hugger. Environmentalism moves him not.
He's also buying up water rights in the already strapped Ogallala Aquifer up in the Panhandle, too. In fact, Pickens owns more water than any other American. And he'll make a killing on it, too. The suburban sprawl surrounding Dallas and Fort Worth is a huge consumer of water, and the local supply is at its limit. Lots of grassy lawns need lots of sprinklers which need lots of water. Never mind that suburbia's water use patterns are indefensible and unsustainable, he's gonna have lots of water to sell the suckers.
Pickens' aggressive move into the water market represents a shrewd bidness maneuver. As water gets less abundant, the price will rise. At a price tag of $100 million, it's a classic buy-low-sell-high trick.
He's betting the same with his wind farm.
Wednesday, July 16, 2008
The New York Times reports that the inflation rate in June was 1.1%, due largely to rising oil costs which have impacted everything that is transported. That means everything.
AP reports today that the markets are up, due in part to a decline in the price of oil. The article reasons that the decline (a tiny one) is due to "concerns that a slowing economy will damp demand." And I'm certain that is true. But there is another spice in the stew worth noticing: The Bush administration announced yesterday that they will send William J. Burns, the under secretary of state for political affairs, to a meeting in Geneva to discuss Iran's nuclear program with representatives of the European Union and Iran. After seven years of saber-rattling tough talk, the Bushies have decided to take a play from the Obama playbook and sit down with an opponent for a chat.
I mention this in the context of the price of a barrel of oil because of a New Yorker column by James Surowieki I read last year. The column discussed the impact of the "risk premium" on the global price of a barrel of oil. Basically, when traders perceive a potential for disruption in the supply of oil, they bid the price up. Concerns about supply disruption can involve the weather -- a Gulf of Mexico hurricane, say -- or in this case threats of military action against a major supplier. Instability in Iraq is another source for the oil risk premiun. Surowieki's point was that threats to kick Iranian ass over meddling in Iraq served to make Iran's oil more expensive for everybody and so actually enriched Ahmadinejad to the tune of about $2o million a day back in 2007. I'd suggest that the same scenario holds true in the case of the international tensions over Iran's nuclear efforts. No wonder they launched all those photoshopped missiles. Each one had the power to make oil traders more jittery and so more willing to shell out big bucks for their precious black gold. (There are plenty of other sources of upward pressure on oil, of course. Emerging consumerism in China and India doubtless accounts for a great deal of the current price.) There is reason to agree that oil declined this morning because a slumping economy is likely to lead to less consumption, but it's not unreasonable to conclude that the faint hope for a peaceful resolution to the nuclear stalemate with Iran was also a contributing factor.
I wonder what effect McCain's "bomb bomb bomb/ bomb bomb Iran" joke had on the risk premium? Actually, it's a serious question. To the extent oil traders believed he had a chance of winning the White House in November, I'd imagine there was some movement upwards. Bush and Co. certainly have contributed to the unease in the world market for oil, but everybody knows that by now. Talk about a psychological effect. This morning I read through yet another benighted mutual fund report -- this one dated April 30, 2008. A statement from the fund's managers said that they expected oil to reach a high of $65 a barrel by the end of the year. As of right now, it's at a bit over $134, even with today's decline.
Retreat in the value of America's biggest 500 corporations to levels below what they were two years ago plus a one-month 1.1% jump in prices because of the astronomical cost of oil. That's stagflation. And it didn't happen by itself.
Tuesday, July 15, 2008
The film does a fine job of examining the emotions and identity politics that arise while the project is debated by the community. Latinos, Anglos, and Native Americans find themselves at odds about what it means to celebrate and memorialize the past. Sometimes about what the past actually was. Further complicating the disputes are carefully observed indicators of social class: kids in a barrio playing with a discarded mattress on the remaining floor of a torn-down rowhouse, well-coiffed women writing checks at a sale of small replicas of the sculpture to help fund the project.
Throughout, there's an extraordinary evenness to the filmmakers' tone. They show the anger and the reasons, but they do not choose sides. I chose sides, but that was a viewer's response. Valdez and Ibarra just told the story.
A young city councilman looks into the lens at one point and asks what he should do -- he's part Spaniard and part Indian, as are almost all Mexicans. He is eventually convinced to change his position and oppose the sculpture.
Gradually, Houser comes to understand, that his intention to celebrate Oñate was too simple and that those who oppose his project have valid points. But he has worked for ten years on his sculpture. In an extraordinary scene, Houser visits his ophthalmologist -- he has glaucoma and is in danger of losing his sight. While we see the doctor examine him and snap digital images of his retina, we hear his voice admitting he had been blind to interpretations of his work from the point of view of a whole segment of the population. The word "blind" was his. We see the doctor gesture to a shadow on his retina.
I do not like what I have seen of his sculpture. It's too literal and unpoetic except for its enormous size. I gotta hand it to him on the scale of the thing. But the film convinced me to admire him as a decent man. And his child-like joy at seeing the bronze parts at the foundry was infectious. As an artist, I know a little of the feeling.
The best joke in the film comes from a Native American man who is helping sweep piles of dust off the flat roof of an adobe house: "I'm going to a Halloween party; my wife says I should go as a white man wannbe."
Despite protests and contentious meetings, the sculpture is installed. The city councilman loses his bid for reelection. Houser begins another monumental project -- this one celebrating pre-Columbian traders in the region.
I hope it goes well for him.
With apologies to both Dr. Mayer, my art history teacher, and the great Caspar David Friedrich.
Bush's press conference today offered this ditty: "I'm not an economist, but I do believe we're growing," he said. "I'm an optimist. I believe there's a lot of positive things for the economy."
He's proclaimed his sunny optimism at various junctures in the past. Just how a happy disposition has any effect on reality I don't know, but I'm reminded of the time years ago when a young man tried to convince me that solipsism was a legitimate metaphysical idea. When I offered to bust him in the head by way of rebuttal, he grew very quiet.
Saturday, July 12, 2008
Investors in the red-hot Chinese markets are feeling especially cursed. Oberweis
China Opportunities with +80% and +60% returns in the last two years has rewarded shareholders with a 35% loss so far in 2008. Several dozen funds have fared even worse...
Ultra-the-wrong-sector funds: It turns out that owning a leveraged financial sector fund is twice as horrible right now as owning a financial sector fund. But not nearly so horribly as owning . . .
India funds: These latest bright ideas from the fund marketers have been whacked for losses of between 35-45% so far this year.
While we may not technically be in a recession as the dismal scientists define such things, the situation for us middle class types ain't at all rosy. In fact, I've been more than a little tempted to swear (not whine, mind you) as I've watched significant chunks of savings disappear from our retirement accounts in recent months. Here's a guy who plays by the rules. Saves and invests. Does what financial gurus say is smart. Actually researches his options so he can make an informed choice. Weighs the relative merits of growth, value, and dividends. Reads up on NAV's, ROA's, EBITDA's, P/E ratios, and a buncha shit like that.
And SPLAT. The financiers juggling CDOs and CMOs and what the business pages of the NY Times persist in calling "complex derivatives and mortgage-based financial instruments" outsmart themselves causing a general miasma to descend on the market while gubment regulators and bond rating corporations sit on their thumbs and hum ditties about the wisdom of the markets and letting the market run its course and regulation is bad for the economy and de-doo-do-do de-daa-da-da in the immortal words of the Police.
Here's a good one: A synthetic collateralized debt obligation. Here's the Forbes-sponsored Investopedia's explanation:
Got that? It's a financial instrument based on financial instruments based on financial instruments based on a bundle of loans. (I don't think I left a layer out.) These guys were selling shit like that to each other as a matter of course. The trouble was it turned out a lot of it was backed by lousy loans. Turns out a "credit event" occurred. In fact, LOTS of credit events occurred. Gotta love those credit events. Now there are a passel of CDOs out there (synthetic or otherwise) that nobody knows how to value.
A form of collateralized debt obligation (CDO) that invests in credit default swaps (CDSs) or other non-cash assets to gain exposure to a portfolio of fixed income assets. Synthetic CDOs are typically divided into credit tranches based on the level of credit risk assumed. Initial investments into the CDO are made by the lower tranches, while the senior tranches may not have to make an initial investment.
All tranches will receive periodic payments based on the cash flows from the credit default swaps. If a credit event occurs in the fixed income portfolio, the synthetic CDO and its investors become responsible for the losses, starting from the lowest rated tranches and working its way up. Synthetic CDOs are a modern advance in structured finance that can offer extremely high yields to investors. However, investors can be on the hook for much more than their initial investments if several credit events occur in the reference portfolio.
Synthetic CDOs were first created in the late 1990s as a way for large holders of commercial loans to protect their balance sheets without actually selling the loans and potentially harming client relationships. They have become increasingly popular because they tend to have shorter life spans than cash flow CDOs and there is no extended ramp-up period for earnings investment. Synthetic CDOs are also highly customizable between the underwriter and investors. into the CDO are made by the lower tranches, while the senior tranches may not have to make an initial investment.
And I lose money.
McCain said in an interview today that his presidential role model is Teddy Roosevelt. It was TR, during his trust-busting period, who spoke of "malefactors of great wealth." Allowing the unregulated -- or barely regulated -- financial system to continue to operate as it has operated will guarantee more of the same. More malefactors of great wealth. There is a reason for regulation in the market. That's why Dr. Phil's dumbass comments the other day were so amazingly off pitch. Deregulation made this happen.
His era has come to an end.
I don’t have any data for the period between May 1, 2008 and today, but dollars to donuts (and what’s the difference anyway?) if the declines haven’t continued or even accelerated, I’ll kiss Phil Gramm’s ass on
I can’t begin to pretend to understand the causes of the current economic troubles, but I’m pretty sure that mental recessions and one lone nation of whiners isn’t at the root.
To my way of thinking, a better target might be a gaggle irresponsibly managed financial institutions that led to a culture of unsustainable credit buoyed by the illusion of ever rising real estate values. Set them loose in a nation with a crushing and inflationary national debt because of a stupid, unjustifiable war. Toss in some smart guys with wacky-but-so-very-clever financial instruments based on said real estate valuations. Mix in a toxic dose of failed deregulation. Add a dollop of over-leveraged lenders for good measure. And guess what? The smart guys suddenly discover they’ve lost the crown jewels. They can’t tell what their debt obligations and mortgage-based securities are worth anymore. Nobody can. Not Wendy Gramm. Not even Dr. Phil himself. It’s not collateral if you can’t place a market value on it. If you ain’t got collateral, you ain’t gonna borrow money from the smart guys.
So credit starts to shrivel here and abroad. And markets need credit like cars need oil. It keeps things sliding along with little or no friction.Hey Dr. Phil, you and yours conjured this little mind game of a recession for all of us with your anti-regulation ideology. And, of course, your numbskull trust in the virtue of capital to get it right. Capital intoxicates people and makes them act irrationally. That's why Bear Sterns found itself with $30 of debt for every $1 it held when the fat lady started singing. Now you want to blame us for the mess? The pity is that anybody at all believes you.
Thursday, July 10, 2008
For folks who may be interested in such things, here are a couple of search engines which specialize in locating purveyors of sustainably produced meats and vegetables within a reasonable distance of your home.
Eat Well Guide
Entering you zip code and hitting "search" returns information from their databases on sources for pastured meats, free range eggs, organic produce, etc. within a specified radius.
As Joe Bob Briggs used to say: "Check it out."
Tuesday, July 8, 2008
Our house was built in 1952 by an architect for his family. The scion of a locally prominent family (they owned the ice house), he graduated from MIT in 1948 and returned home to practice his trade. I've found blueprints for the house dated 1948. Likely it was a senior thesis project. He had very good teachers. Wasn't Isamu Noguchi at MIT then?
The design is elegant and very smart. It faces east and utilizes a series of parallel north/south-oriented planes of increasing visual and physical density to establish an east-to-west progression that connects the inside to the outside. A breezeway in the front slices off a portion of the yard to create an empty courtyard (still outside, but contained). Behind that, is a screened in porch (both inside and outside). The plane of the easternmost wall of the house proper is interrupted by a double sliding glass door (solid, but transparent). Lastly, the rear (western) wall is standard construction: drywall inside and redwood planks outside. (The whole building is clad in redwood.)
Throughout the house I've found numerous instances of his use of the Golden Ratio--a/b=b/a+b -- from the aspect ratio of the rectangles in the porch screen's grid to the position of a low stone wall that divides the livingroom from the dining area. Someday I'll buy a lottery ticket with 1618 among its numbers, just for the proportionality of it.
It's a beautiful building. Living here is like inhabiting a sculpture.
The architect had very good teachers. But I've concluded that the design reflects much more of them than him. And they were not here in exurban NE Texas to supervise the construction. The number of downright dumb mistakes in the building is alarming. The glass doors were installed backwards and can't be adequately locked. The sewer lines were so messed up we speculated they were a collaboration between Dr. Seuss and Rube Goldberg, and they were drinking heavily at the time. There are two vent hoods in the kitchen -- one over the stove, the other inexplicably over a counter across the room. The light switch in one bedroom doesn't control anything so far as we can tell. Several other switches also appear to be merely decorative, but the one in the bedroom is particularly irksome. The interior finish in several rooms is cheap, fake paneling. The list goes on.
I'm left to conclude that God is no longer in the details.
When we bought the house, we also bought the architect's office next door. It's my studio, and it's a victim of the same sort of dumb mistakes and screwy slips in planning and execution.
I spent all day yesterday trying to make the front exterior lights work. I've failed so far. The knucklehead installed interior recessed lighting fixtures out there and did it in such a way that you have to tear out a section of the soffit to replace them.
I'm not teaching anymore. But the designer of my house and studio makes me wonder about what students learn from their teachers. What do they actually learn? Here's a guy who had a fantastic education, but who installed sliding glass doors backwards in a house that reflects a rarefied and subtle understanding of space and how geometric planes and materials of varying densities can divide it and maintain its continuity. Obviously he had very good teachers. But what did he learn?
What did my students learn?
Thursday, July 3, 2008
Another review has passed through the final edit and has been approved for publication here. A third, destined for publication here is still in the rewriting stage. Writing for an online journal like Glasstire is a real pleasure. Fast turnarounds = instant gratification.
Happy Fourth of July. Let us now contemplate the Fat Man.