"You should be more conscious when you are sleeping"
-Isabella Hatkoff (June 2010) on the breaking a pinky promise by her dad who was a sleeping
"You can't solve a problem with the same kind of thinking that created it." -Albert Einstein (1879 - 1955)
"Give a dog a fish, feed him for a day. Teach a dog to fish, feed him for a lifetime."
- Walter the Farting Dog
"Wouldn't it make more sense to read the legislation before approve you it?It's like asking the architect to design the house after it is already built."
-Paris Hilton
Coming Soon
COMING SOON
STICKMAN VIDEO COMPETITION
We're looking for good voices. Email us if your interested:
Presidential Spokesman Agrees to Meet; Wants to Serve Decaf at the Tea Party
Dead Men Talking Weigh In
My oh my Georgie boy!! What great fun. This is exactly what we had in mind when we framed the constitution- a free press, rigorous debate with checks and balances.
Alex, its exactly what we had in mind for checks and balances. Santelli should check his meds because he seems a bit off balance. But he clearly prefers tea!
The Butterfly Effect: Did David Brooks Failure to Hotlink to Youtube Video Result in New York Times Dividend Suspension?
David Brooks opinion piece "Money for Idiots" today refers to the famous collapse of the Tacoma Narrows Bridge in 1940 caught on film. The collapse of suspension bridge eeirly mirrors the suspension of the dividend at the New York Time today. The closing price of the Times was under $4.00 ($3.77). David failed to embed or link to the youtube video which I have done as an accommodation for the benefit of our lazier readers. The video is pretty wild and offers a pretty horrifying visualization of why we better get this damn global financial system glued back together. Perhaps if David would take the time (or learn) to hotlink to his references then the New York Times could sell subscriptions for which I would gladly pay and then perhaps the Times could undue the suspension of its dividend. No such luck for the bridge that was however rebuilt later on using a different engineering techology. Farewell Sweet Prince!
Our moral and economic system is based on individual responsibility. It’s based on the idea that people have to live with the consequences of their decisions. This makes them more careful deciders. This means that society tends toward justice — people get what they deserve as much as possible
Over the last few months, we’ve made a hash of all that. The Bush and Obama administrations have compensated foolishness and irresponsibility. The financial bailouts reward bankers who took insane risks. The auto bailouts subsidize companies and unions that made self-indulgent decisions a few decades ago that drove their industry into the ground.
The stimulus package handed tens of billions of dollars to states that spent profligately during the prosperity years. The Obama housing plan will force people who bought sensible homes to subsidize the mortgages of people who bought houses they could not afford. It will almost certainly force people who were honest on their loan forms to subsidize people who were dishonest on theirs.
These injustices are stoking anger across the country, lustily expressed by Rick Santelli on CNBC Thursday morning. “The government is promoting bad behavior!” Santelli cried as Chicago traders cheered him on. “The president ... should put up a Web site ... to have people vote ... to see if they want to subsidize losers’ mortgages!”
Well, in some cases we probably do. That’s because government isn’t fundamentally in the Last Judgment business, making sure everybody serves penance for their sins. In times like these, government is fundamentally in the business of stabilizing the economic system as a whole.
Let me put it this way: Psychologists have a saying that when a couple comes in for marriage therapy, there are three patients in the room — the husband, the wife and the marriage itself. The marriage is the living history of all the things that have happened between husband and wife. Once the patterns are set, the marriage itself begins to shape their individual behavior. Though it exists in the space between them, it has an influence all its own.
In the same way, an economy has an economic culture. Out of billions of individual decisions, a common economic landscape emerges, which frames and influences the decisions everybody makes.
Right now, the economic landscape looks like that movie of the swaying Tacoma Narrows Bridge you might have seen in a high school science class. It started swinging in small ways and then the oscillations built on one another until the whole thing was freakishly alive and the pavement looked like liquid.
A few years ago, the global economic culture began swaying. The government enabled people to buy homes they couldn’t afford. The Fed provided easy money. The Chinese sloshed in oceans of capital. The giddy upward sway produced a crushing ride down.
These oscillations are the real moral hazard. Individual responsibility doesn’t mean much in an economy like this one. We all know people who have been laid off through no fault of their own. The responsible have been punished along with the profligate.
It makes sense for the government to intervene to try to reduce the oscillation. It makes sense for government to try to restore some communal order. And the sad reality is that in these circumstances government has to spend money on precisely those sectors that have been swinging most wildly — housing, finance, etc. It has to help stabilize people who have been idiots.
Actually executing this is a near-impossible task. Looking at the auto, housing and banking bailouts, we’re getting a sense of how the propeller heads around Obama operate. They try to put together programs that are bold, but without the huge interventions in the market implied by, say, nationalization. They’re balancing so many cross-pressures, they often come up with technocratic Rube Goldberg schemes that alter incentives in lots of medium and small ways. Some economists argue that the plans are too ineffectual, others that they are too opaque (estimates for the mortgage plan range from $75 billion to $275 billion and up). Personally, I hate the idea of 10 guys sitting around in the White House trying to redesign huge swaths of the U.S. economy on legal pads.
But at least they seem to be driven by a spirit of moderation and restraint. They seem to be trying to keep as many market structures in place as possible so things can return to normal relatively smoothly.
And they seem to understand the big thing. The nation’s economy is not just the sum of its individuals. It is an interwoven context that we all share. To stabilize that communal landscape, sometimes you have to shower money upon those who have been foolish or self-indulgent. The greedy idiots may be greedy idiots, but they are our countrymen. And at some level, we’re all in this together. If their lives don’t stabilize, then our lives don’t stabilize.
Brits John Bird and John Fortune Satire Routine En Route to 1 milion views; Animated Sub-Prime Prime Lags in Youtube Views But Still Reigns
A little slow and too British for my taste this 8 minute clip has attracted a lot of attention:
I much prefer this lesser-viewed (warning: a touch of foul language) stickman knock-off video known as the "Sub-prime Primer" This was a referral from my good friend and prfoessor G.A. I prefer to think of the stickman style as an homage but have a battery of lawyers checking out trademark infringement:
CNBC's Rick Santelli's Rant and the Chicago Traders Are All Fired Up and Ready To Go....Ballistic!!!!
Mortgage Bailout Proposal: The Obama-lution Begins!
Wowsa!!!!! Unlike the Boston Tea Party this revolution began on the trading floor. Led by a emotional, unfiltered and stirring live report by Rick Santelli "telling it like it is" from the exchange floor the traders who were harboring great hostility are on the mortgage revolution war path. Don't hold back and tell us how you really fellas. Time to strap on the party cactus. Thus little video is a seminal event in the Econolypse. Already claimed to be on the short list as one of the "Greatest Rants Ever"
Published Irregularly Weather or Not We Feel Like ItAny Damned Time We Please
Important Dislaimer: In case any reader doesn't quite get it, this is parody protected under the first amendment of the Constitution of United Statements of America. If you don't like the law then feel free to go try and change it. If you are interested in further information on freedom of the press we suggest you start with John Milton's masterful essay "Areopagitica" (1644) http://www.uoregon.edu/~rbear/areopagitica.htm
Breaking Story: Exasperated Stickman Loses Cool; Tells Geitner in V-Memo "Just Write Down What I Tell You and Say It. I Can't Stand Watching This Anymore"
Howard Beale Is Alive and Well
WTF? News has received from an anonymous source the remnants of highly confidential encrypted voice memo from Double Secret Financial Operative Agent Stickman to Secretary Geitner. The recording was retrieved from a zip drive left taped under the Secretary's favorite table at an undisclosed D.C. IHOP restaurant. The zip drive was intended to self-destruct Mission Impossible-style within 10 seconds of playback. Geitner apparently left the zip drive unplayed under the table inadvertently. Here is a carefully reconstructed transcription of the voice memo; the anonymous source known only as "Deep Pocket" is recovering from second degree facial burns as the the zip drive triggered a heating mechanism planted in a bottle of maple syrup that exploded after the source listened to the memo on his laptop. The IHOP was evacuated without incident.
To: DOT Secretary Geitner
From: Agent Stickman
Re: Bailout
Tim, I really am getting quite [inaudible- frustrated?] in my inability to get through to you that you are starting to make former DOT Secetary Paulson look formidable. Going forward please just write down what I say very carfully and just say it. Your credibility is sinking faster than the Titanic; Leo DeCaprio's death scene brings young girls to tears, unfortunately your performance only brings tears to the world central bankers. Here's the drill:
(1)My God! Don't give the entire banking system a stress test unless you are fully prepared to find out that all of the patients are already dead which would not be a good thing for the market to hear right now even if its true. If you listen to Nouriel Roubini who has been batting a thousand you are a good $2.5 trillion short on top of the $8 trillion you and Hank seem to have thrown around during the prior administration. That adds up to a (inaudible: boatload?] of mullah which if the Chinese balk we are toast.
(2) Change the message framing: "Our primary messaging strategy should be as follows:
"We intend to eliminate the information discount that has been embedded in asset prices due to a lack of information and a complete lack of market-based liquidity. We are currently unable to reconstruct cash flow models that underlie the so-called 'toxic securities' " but we will institute formally the guidance for alternative valuation methodologies already recommended by the SEC, FASB and the Federal Reserve for valuing hard to value assets in a non-existent market. Any party (auditors, repo lenders, new management) forcing a writedown based on mark to market will be subject to personal civil and criminal penalties (kind of like Sarbanes Oxley). It's not that complicated. We don't have the information so we can't price the assets. Doesn't mean they're good or they're bad. We just don't know. It is what it is.
(3) Most importantly you formally declare that the "market is dysfunctional therefore mark to market (FAS 157) is completely inappropriate." You instruct all market participants to follow the new rules for cash flow vaulations. Like nature abhors a vaccuum, markets abhor uncertainty. They like rules even if they are stupid at least they can be evaluated and be adhered to . We then change the rules when we have enough information and actually know what we are talking about.
There will be a s---storm about Fas 157 but that will last baout 20 minutes. The market place has already barfed all over Tarp 1 , Tarp 2, Bank Recapitalization etc. ad nauseum. Rather than buying assets under the TARP crapola or trying to bring in private investors who will charge us an arm and a leg (why pay Blackstone, Blackrock, Cerberus et al returns in the mid to hi thirties that are only being artificially by offerring non-recourse below market rate financing of up to 75%). Better to do nothing and say nothing until we have the information when we can make an informed decision as to the best course of action. It's a whole lot better than saying something and then having to admit you are wrong or didn't know what you were talking about for the umpteenth time. In the meanwhile we insist that all federally insured financial institutions extend maturities on all performing loans on a rolling 90 day basis provided borrowers are making scheduled payments (other than principal payments at maturity which will be extended). These loans should be extend on the same tems, conditions and pricing. This buys us 90 days to get some information and if we need to do this again we revisit in 90 days.
Sunday, February 22, 2009 at 01:29AM 
My oh my Georgie boy!! What great fun. This is exactly what we had in mind when we framed the constitution- a free press, rigorous debate with checks and balances.
Alex, its exactly what we had in mind for checks and balances. Santelli should check his meds because he seems a bit off balance. But he clearly prefers tea!
