Cobb

On Presidential Colorblindness

Jimi Izrael asks whether or not blackfolks should give McCain and Palin a high burden of proof that they 'get' black people.

Neither McCain or Palin have any great affinity for diversity or people of color. I mean, Jimmy Walker doesn't need to be thier campaign manager, but Palin's pale perspective gives me pause. What do you think? Is Sarah Palin colorblind?

The name of the game is politics, which can be played any number of ways. We have a problem in that lots of blackfolks, especially those who are immediately receptive to this line of inquiry, play a particular hand in politics - identity politics. It essentially means that they want their candidates to play 'get like me'. When you lead with identity politics, you live by the sword and die by the sword.

Now you could play politics by values. The person that *thinks* like me is the person I want to lead. Or you could play it by patronage. The person that *gives* the most to me is the person I want to lead. Or, my own pitch, the person who puts country first is the person I want to lead.

In one way I laugh at this. I mean it's like do you want the quarterback of your team to play harder for the black fans or the white fans? It's a dumb question. Kinda like saying Disneyland is for white people and the Apollo Theatre is for black people and you want the quarterback who wins the Super Bowl to say "I'm going to the Apollo Theatre". But there are people like that. Remember that there are people in this country who believe that any politician that appears on Fox TV is saying 'white' things for 'white' people, and that if they don't make a specific appearance in front of Tavis Smiley, or Katrina victims, or whomever is the proxy black of the moment, that they don't care about black people.

It seems to me that when you say the pledge of allegiance and you say 'liberty and justice for all' that black people are defacto included. There's nothing else you have to say. Just like there's no 'black' football or 'white' football. It's all about the game itself and how you play it. If you make it a priority to add color to the rules, where a black touchdown is different from a white touchdown, then you're just asking for trouble.

You would think that people understood that by now. Our parents fought for AMERICAN civil rights, and we got them. So why ask for something specifically black from politicians today? Aside from which, why can't black people provide that for themselves?

Today nobody questions that Barack Obama is 'black enough'. Thank God he put all that to rest. But in doing so, he slammed the lid shut on black liberation theology and all it implicates. Nobody gets to be that kind of black politician on the national scene. You want a black school in your district? That's not the President's job.

Speaking specifically about McCain, after all Palin is no Cheney, I happen to know a black man who served on the Forrestal on McCain's last combat mission. He's 100% behind him. That game, the game of national defense and military service, subordinates racial identity to other virtues. (Not saying that racial identity is a virtue). Again, how it is that people don't understand this kind of subordination demonstrates to me how they've spent too much of their lives *being* instead of *doing*.

As far as Alcee Hastings is concerned, well, he's just a dinosaur and the people of Florida would be well rid of him. People have been making excuses for him for decades. He represents the old blackfolks who are still afraid of the Klan, for whom the ghosts of lynching still causes night tremors. He needs to get a pistol, shoot Robert Byrd in the head and then turn it on himself.

Equity Warrants

Here is a good read. I have no idea nor do I care about the politics of advancing or rejecting the argument. It simply makes sense to me.

If I understand correctly, when nobody knows the real value of an asset, any agreeable price is legitimate. Letting the government be the buyer of last resort puts a real price on something nobody else can or will buy. The government, not being strapped for cash or needing to turn a profit in any short period of time, can make a price offer on an asset offer an equity warrant at the same time.

The equity warrant allows the seller some exclusive right to buy the asset back at a price fixed at the time of the sale.

So here's the example.

Let's say I have a portfolio of 100M of 'toxic assets'. It doesn't really matter what they are, I've valued them at 100M in a non- mark-to-market accounting basis. Meaning I'm stuck with them like the junk in my garage before the garage sale. Instead of actually emptying the garage and risking having to sell them at deep discounts, I sell that portfolio to the government in exchange for cash and warrants.

So lets say that the feds offer me 80M in cash and 20M in warrants. I get 80% liquidity. Boom that's great, but I also get a chance to buy 20M worth at some future date at a discount rate. The assets will have to appreciate for me to exercise those warrants - for them to be worth anything, but it's a cool deal for me because I can conceivably get the entire 100% of my non-market valuation at some point in the future. So basically I can buy some of my assets back when they are not toxic.

The problem with this entire scenario is that the government is not particularly equipped to do anything with those 'toxic assets' except sit on them until this whole mess boils over. Park them until the panic subsides. I think the issuing of warrants to the original asset-holders and to the investing public is a cool idea and it saves the feds cash.

Spending vs Investment

Some gray eminence named Polk said the following:

But a part of the answer to our growing debt is our militarism: Our current Military budget is $541 billion. That is 58 cents of every dollar spent by US Government and it is more than combined defense budgets of all other countries and more than our combined spending on education, environment protection, justice administration, veterans benefits, housing assistance, transportation, job training, agricultural support, energy and economic development assistance.

Actually it's not 58 cents of every dollar. It's more like 16 or 17 cents. The facts are here.  It's sad that the cat is so wrong, because he makes efforts at making good points elsewhere, even in the same paragraph. Aside from the point that we spend more than any other country it is because we're bigger than any other country, as a percentage of GDP we don't spend more than 4%.

But what if we spent more on environement protection, justice administration and all the other goodies that we might... Let's just make a simple distinction shall we? Let us distinguish between those monies that are spent, and those that are invested.

First of all, let us agree never to say 'invest in health care'. That is because no matter how much you spend,..well people aren't going to live that much longer than they do. Secondly, let us consider our ability to make things happen. Simply because there is money to be spent doesn't mean you generate the capability of the ends you wish to achieve.

Think of it this way. We already know how to make a car go 120mph. If you have let your car go without proper maintenance and it can barely do 80 then you can invest in a bigger engine. It's an investment that is very likely to payoff because we know how to do it. Not only that we have lots of people who know how to do build that engine, install it, test it and certify that it will make your car do 120. But even if you spend two times as much money, there is no way that you are going to get your car to go 240mph. That would be spending, or just a foolish 'investment'. It's throwing money at a problem without thinking through it.  Of course there are cars that go 240mph, but they are a fundamentally different kind of car, and the people who make these cars are fundamentally different, more expert and rare than the guys down at the local Firestone shop.

The Return of Brown

All of the big investment banks are gone, but the little ones are still around. And guess what? That's where the big brains are going. Barnett and I am on the same page when he notes:

First Boston (Steve’s old shop) was gobbled by Credit Suisse back in 1988, then Salomon Smith Barney went to Travelers, later consumed by Citicorp. In 2000, PaineWebber went to UBS, J.P. Morgan went to Chase, and Donaldson, Lufkin and Jenrette went also to Credit Suisse. AG Edwards disappears inside Wachovia in 2007, and Bear Stearns went to J.P. Morgan a few weeks back. What happened last week was the last three big independents disappeared: Merrill Lunch to Bank of America, and Goldman Sachs and Morgan Stanley convert to commercial holding banks. Lehman simply goes bankrupt. Let me be clear here: the function of investment banking does not disappear, just the large-scale independent form (meaning, separate from a commercial bank).

As Hambrecht mentioned in the video I posted not long ago, there are plenty of sectors that are doing just fine and lots of business in America that doesn't require the unique things that Goldman offered. If you want a 100 million dollar IPO, the little guys like Raymond James, Piper Jaffray and Crowell Weedon will do just fine. In fact, I heard a Crowell Weedon commercial on the radio just this morning, and I think they are going to do some crowing. Schwab's not going anywhere.

I rather like this development because I remember Brown & Company, and I dug their attitude and their animated commercials. Of course they got eaten up by E-Trade, and I'm an E-Trade guy. Well, I am now because I'm definitely getting into the market right this minute. I'm going with Warren Buffet. Of course Brown is not coming back, but the idea of being a smart investor working with a small company is. That's going to be better than ever. I'll let you know how I make out come Christmas time.

Note: There's a difference between an investment bank and a brokerage house. I think E-Trade is strictly a brokerage house, which basically means they're traders - they own seats on the exchanges. All investment banks are brokers, but not all brokers are investment bankers.

Bears

TED Spread

Nothing like a crisis to give you a reason to learn. Today I learned about the TED Spread. This from Wikipedia.

The TED spread is the difference between the interest rates on inter-bank loans and short-term U.S. government debt ("T-bills").

Initially, the TED spread was the difference between the interest rates for three-month U.S. Treasuries contracts and the three month Eurodollars contract as represented by the London Inter Bank Offered Rate (LIBOR). However, since the Chicago Mercantile Exchange dropped T-bill futures, the TED spread is now calculated as the difference between the three-month T-bill interest rate and three-month LIBOR. The TED spread is a measure of liquidity and shows the degree to which banks are willing to lend money to one another.

The TED spread is an indicator of perceived credit risk in the general economy. This is because T-bills are considered risk-free while LIBOR reflects the credit risk of lending to commercial banks. When the TED spread increases, that is a sign that lenders believe the risk of default on inter-bank loans (also known as counterparty risk) is increasing. Inter-bank lenders therefore demand a higher rate of interest, or accept lower returns on safe investments such as T-bills. When the risk of default is considered to be decreasing, the TED spread decreases.^[1]

TED is an acronym formed from T-Bill and ED, the ticker symbol for the Eurodollar futures contract. The size of the spread is usually denominated in basis points (bps). For example, if the T-Bill rate is 5.10% and ED trades at 5.50%, the TED spread is 40bps. The TED spread fluctuates over time but is often between 10 and 50 basis points (0.1% and 0.5%). A rising TED spread often foretells a downturn in the U.S. stock market as liquidity is withdrawn.

During 2007, the Subprime mortgage crisis ballooned the TED spread to a region of 150-200bps. On September 17, 2008, the record set after the Black Monday crash of 1987 was broken as the TED spread exceeded 300bps.^[2] Some higher readings for the spread were due to inability to obtain accurate LIBOR rates in the absence of a liquid unsecured lending market.^[3]

On September 29, 2008, after the bailout bill was unexpectedly voted down, the TED spread achieved a new high of just over 350bps.

I would also note that today as I was eating my chicken ceaser for lunch, everbody at the Hamburger Hamlet in Pasadena had their eyes fixed to CNBC. Sure enough as Bartriromo was interviewing some experts on the floor, they were saying exactly what I've been saying. Don't call it a bailout. It's just the government - somebody with lots of money buying assets at firesale prices because of a liquidity crisis.

The liquidity isn't 'real' but private equity cannot act in unison. Nobody has the time or patience to come up with a private consortium of buyers to shore up that which is weak, even though everybody wants it to happen. So somehow this legislation should include some kind of passthrough facility so that once the feds have stopped the blood loss, private entities can buy up what the Fed purchased.

This is essentially what JPMC and Citibank have done with WaMu and Wachovia - they've eaten about all they can eat.

Now. Understanding that the TED Spread is at some ridiculously gawdawful high number today is the key to understanding why international banks are having trouble even though they are not holders of 'toxic assets'. All highly leveraged debt holding banks are in trouble of getting reasonably cheap cash - and that's why things can grind to a melting halt. The LIBOR is too high.

As an interesting side note, I have the feeling that my company is going to get freaking rich. We happened to be one of the companies that assisted in getting Fannie Mae into the (ahem) 21C - technology wise. I always say that you'd be shocked to find out how many businesses operate their finances on spreadsheets instead of current technology. Those who cannot manage their cashflow are going to be in huge trouble over the coming months. Unless you by our products and services. Yuk Yuk.

Rush Rushes Raines

Limbaugh is a rhetorical genius. Some might say an evil genius, but he's only a Conservative. People ought not take politics so seriously, well, political rhetoric anyway. As Robin Hanson said, Politics isn't about Policy. And Limbaugh's bloviation is about as far from policy creation as it gets. As to what the people believe... that's another story.

This morning, as Prager got boring on the way to work, I dialed into Rush. He was heaping it on thick. If you didn't know any better, you would believe that the Democrats are solely responsible for supporting everything that Franklin Raines did at Fannie Mae. It's not exactly true, because OFHEO under Clinton was, well.. under Clinton. The hero of that story, as I've mentioned before, was Armando Falcon - the one name that you may not hear in all the partisan spin. But it is clear that a goodly chunk of Democrats were not interested in looking at the fundamentals. If you hear the clip of Maxine Waters, it should be obvious to anyone that Democrats were all about extending programs like 100% financing.

So basically this morning, Rush Limbaugh took to the rhetorical extreme all that I was talking about last week on S190 and the defense of Raines by the CBC. I'm not sure that it's necessary, or perhaps it is to amp up the volume on parts of this tragedy people don't seem to have time to discover for themselves. I understand why Rush is dangerous and why the Democrats hate him - because he's very good at drawing unfair and unbalanced scrutiny at things people ought to be looking at. There's nobody like him on the other side of the aisle, just folks like Maher and Jon Stewart who use their brains to mock the system rather than for partisan advantage. Concurrance: The Belmont Club

Who's Lying, Who's Dying?

Right now, as we speak, Congress is in the process of putting together a financial restructuring of some of the major banks and the GSEs. What we understand about this is limited, and there are some people whose judgments we are likely to overly depend. That's what happens in a crisis. Sooner or later, we will be blessed with the benefit of hindsight. In the meantime, we will muddle through - we meaning citizens trying to understand all of the complexities and ramifications of actions taken to remedy the problem of GSE insolvency.

McCain has taken the bold move of suspending his campaign in order to do what senior senators do, get in and hash out details in legislation and insure that certain ideas are given adequate consideration. My take is that this is a very good idea - not business as usual. Rolling up his sleeves instead of submitting himself to the narrow focus of the media spotlight. It's what we pay him to do.

As I write this, the first draft of the house resolution HR 3997 has the first vote in Congress and it has failed 228 to 205. So now it's time to get deep into the controversial provisions and see where we stand. These are going to be, with any luck, the kind of arguments that we will hear cheers or jeers about for the next several years. Let us remember this is our Congress at work.

Monday Brief

The Final Domino
This morning Wachovia was swallowed up by Citibank in a deal that appears to be quite similar to the one last week in which WaMu was eaten by JPMC. As far as the major banks to undergo being absorbed, this is the final domino which was necessitated by a risky real-estate portfolio. The rest of the major national banks are OK and things are, by and large over as far as that's concerned. However, there are many more smaller and regional banks that may have their card pulled in the days and weeks to come. This is all I know.

Kristol Trips
William Kristol is halfway right in his suggestion that McCain may ride this crisis to victory in November. By all accounts I've read so far, the deal that has emerged to be voted on this week by Congress is a better deal than Paulson's original proposal. So McCain's initiative to stop campaign business as usual (AND debate) was definitely a sign of leadership. At the very top Kristol nails it:

He has a chance. But only if he overrules those of his aides who are trapped by conventional wisdom, huddled in a defensive crouch and overcome by ideological timidity.

The conventional wisdom is that it was a mistake for McCain to go back to Washington last week to engage in the attempt to craft the financial rescue legislation, and that McCain has to move on to a new topic as quickly as possible. As one McCain adviser told The Washington Post, “you’ve got to get it [the financial crisis] over with and start having a normal campaign.”

Wrong.

Exactly. But then later he suggests that Palin go on the attack against Obama just for being a liberal and even bring Jeremiah Wright back into the picture. The only people that energizes are people who wouldn't even be close to voting for Obama. Plus it makes Palin into another ideological attack dog. If Palin has no more talent than that, well then that's what she should do, but it sounds very thin to my ears. I can't tell what independents are looking to hear, but it can't be more of that.

Sixoseven Rox

Back by popular demand, my electronic music. Now freely downloadable.

For a limited time only at http://public.me.com/mdcbowen

Back To Life (SixoMix)
This is one of my favorites and the first time I sampled somebody else's music. Of course Back To Life is one of the greatest hiphop songs ever, and I do love those beats. In sort of my traditional style I threw in some droning to make it a bit ambient. In this case horns. Then dug that Caron Wheeler and her background chorus, which is kind of signature for the song but put it in the downtempo parts on a minor key. Altogether a smooth thing.

Baldwin Hills
This was my first long composition. I had in mind something that started off clean, simple and elegant but slightly off balance. The beat is clean and elegant - very Nile Rodgers (I hope). Minimalist piano and strings over snappy beats, that was the formula. Very bourgie, like Baldwin Hills. But towards the end, I want it to decline. The feeling was that Baldwin Hills was in decline, so I put in some dissonant metal, truck beats and scratch. You can hear at the breaks as I change up the beat. Eventually the strings disappear and things start getting funky around four minutes in, bringing you back to the top theme and then down to the gutter with the second primary beat.

Bhangra Chubb
This was a cut that I just couldn't keep down. I found some bhangra vocals that worked at a high pitch and put them over a modified sample of Chubb Rock's great beat with a metal backbeat. It's definitely a high energy club dance kind of thing. If you listen carefully you can hear some Kraftwerk in there too. Everytime I hear it, I want to dance like Heavy D and the Boyz.

Groove 74
This one I wanted to be a funky kind of spy groove. A little pitch of mystery and back to my new signature which is solo acoustic guitar melody. It's got vibey piano in the back and moves rather nice. This is one of my latest compilations, and shows I've still got a little bit of skill in mixing.

Hard Blue
This was probably the second or third song I ever did. It's from back in 2001. Basically my first horns. Just a very contagious groove. This was my answer to the question way back before Kanye West, why doesn't anybody in hiphop exploit the blues?

Hard Work
This is my first work. This is fundamental Sixoseven. I still think that it says just about everything about the kind of music I like. Slammin' beats, ambient droning, sophisticated polyrhythms and percussion, melodic and smooth all at once. The fidelity isn't very good on this one, I need to remix it, but it still works very nicely in the ride, especially the final break with the Truck Beat.

Hold Me
This is a clean minimalist groove that was inspired by a Sade song. I can't remember which, and damn I need to listen to more Sade. Definitely chillout music. I especially like the timing beat on the closed hi-hat.

Holly
This is my oldest daughter's theme song. It's the third remix of it. Bright, enthusiastic, snappy. It's what I call, Happy Hiphop - the kind that just doesn't get made commercially.

Mari-iqua
There was a goofy comedy movie with Eddie Griffin and Orlando Jones. I cannot remember it for the life of me, but when it came out, nobody was doing latino hiphop on the air. Except there was one scene in that flick at a gas station out in the middle of the desert where they did it. At the time, I was big into Mana and some other Latin music (insert name of band here) and so as soon as some guitar samples were available from Sony, I put together this cut. Yeah I know the horns are a bit cheesy, but horns are damned hard to arrange and sample. At least I tried.

Mystery Theatre
This is kind of unusual for the set that you're listening to here but kind of representive of my mashup music. Obviously sampled from my old favorite CBS Radio Mystery Theatre, I liked the theme of putting some spooky organ and insidious guitar over a peppy beat with an old geezer's voice telling ghost stories. I think this one is very Art of Noise.

Smooth Bear
This is probably my favorite of all of my music. Downtempo chillout bumping groove, aetheral spectral droning and dishpan percussion lightly in the breaks. Just cool, baby!

Taxi Jam
I have no way to describe this except just dance music for kids. I have played this a million times in the car with my elementary and pre-school kids. I wonder if they still like it.

Juicy
From Mtume's classic. I added some japanese flute and some dishpan / paint can percussion. It's got a mellow thing to it with a harmonic twist. This is a track just built for a smooth rapper.

Jayboom
I also enjoy doing hard beats. This one is for the gangstas. It doesn't go anywhere but it just  begs for somebody to be screaming about damage they're going to do to suckas.

Old School Interlude
I wrote this specifically for me to roll the windows down at valet parking and blast on my way out of a cool joint where people who grew up on my side of town would say Dayam!

The Week In Review - Once Over Lightly

On Palin:
She apparently flubbed some talking points about Israel. I say anybody who expects her to be in the mold of Dick Cheney is just nuts. Bottom line is that she'll toe the foreign policy line of the McCain White House. Who's head wonk? Dunno. Wait and see. Energy in the base may be cracking this week. I think it's because some Republicans may be daunted by the Democratic line - brains matter most. She needs to focus on her strengths, and it ain't brilliant intellect.

On Rice:
Rumors that she's gay? Oy vey! McCain was reasonable to distance himself from Bushites. She's one of W's closest pals. It wouldn't have worked very well.

The Debate:
I haven't yet seen the whole thing or read the transcript. That's for today. I listened to a segment, and the single thing that stood out in my mind was Obama saying "I've got a bracelet too." Yikes.

On the 700B:
It's not a bailout, it's a smart investment by Paulson, a brilliant man who happens to have the deepest pockets in the world. The usual tax abatement and corporate welfare refrains from the Right is just stupid reactionary yammering. The rhetoric needs to be economic not partisan, pols are masking what's really going on and they need to speak to more than just the taxpayer and mortgage holder, but to the investor, the credit card holder, and the American who's still working.

On USC:
Oregon State wiped up the floor with us. The world is truly upside down.

David Foster Wallace:
Anybody who commits suicide gets absolutely no respect from me. I don't care what they did in life. Suicide is the ultimate whine and it demonstrates nothing so much as the inability to recognize the value of human society. Suicide is extreme petulance. Good riddance.

Google Android Phone:
Yeah, sorta. I think it's final proof that nobody ever needs to pay more than 200 bucks for the smartest phones you can by. It's about time these things started getting cheaper. I'll wait for the next version.

Bombing in Yemen:
I still don't understand why we put up with Yemen. I really don't.

Puede o no Puede?

All Of Your Base Are Belong To Us

It turns out that my sneaking suspicion about who's zooming who was reversed. Chances are that Paulson, that clever devil, is going to make the government a TON of money. Conversations into the evening with Mr. Jones, my neighbor and friend from Morgan Stanley were quite enlightening.

Mr Jones' kid, my son's best friend, had a birthday party last night chez lui. So I sped across the city from Pasadena to get back to the South Bay listening to Vitamin Dub without once thinking about listening to the debate scheduled for six. By the time I thought about it, they were rambling on about the importance of Afghanistan and Pakistan. You know I really hate it when they say Tal ee bahn. Whatever to the Taliban for now, we've kind of got some domestic issues. (And Oregon State beat USC!!)

Here's the thing. As I was writing yesterday, the very idea that JP Morgan Chase could scoop up Washington Mutual at fire-sale prices had be seething with envy. My guess at timing that stock was right on time, this time. But I know better than to trust my day trading instincts. Jones did exactly the same thing - bought at 1.70 but got burned during the day. Apparently what happened is that the company went belly up and the government 'bought' some part of it and then JPMorgan Chase bought the other part. The end result being this - for a couple billon that JPMC had lying around, they get to sit on possibly 100B worth of assets. It's impossible for them to go any cheaper - the thing is that JPMC had the cash. Now they can just sit on those assets until they're worth something. What are the chances that they'll be worthless forever - they're all collateralized loans, the collateral is real estate which may be undervalued but is never worth nothing.

However if you were a bondholder for WaMu, you got zilch. I mean nothing. And of course Jones' stock is now worthless. It's exactly as if George Bush via Paulson nationalized the company. All of your base are belong to us. No other claims count.

This, my fellow citizens, is not a bailout. This is a fire sale. The government is buying the assets of Fannie and Freddie just like JP Morgan Chase bought Washington Mutual. Nobody else can claim any part of it and the government stands to make, according to Mr Jones, anywhere from 1 to 1.5Trillion in profit. The thing about panic is that it tires you out after you're done with the adrenaline. Once everybody stops panicking (and they will because everybody still has jobs, and everybody is still going to celebrate Halloween, Thanksgiving and Christmas), they are going to realize that the physical assets don't go away, we just percieve them differently. And when all is said and done, it's all going to be valuable again. The government makes out.

In the mean time, nobody has credit. Private equity firms are sitting on a pile of cash they don't want to move. No deals are being done until Paulson's deal is done. The correction is still correcting, but make no mistake, there is still a huge amount of wealth out there, just not in the financial sector. Unless you're a Lehman employee, chances are you still have your job and your company is doing fine. P/E ratios are in the single digits meaning almost every stock in the market is trading at historical lows.

Jones also says that if your 401K was wiped out because of holdings in financials, then you had better prepare yourself for retirement on skid row. If your portfolio was killed in this debacle, there's nothing you can do - interest rates are way too low for anything else. Maybe you have some gold already... But we are at or very near the bottom, if you got hammered then you have to start over. If you're upside down in a house, all you can do is hang on, hope and pray - for twenty years. There is some real ruination out there.

The Paulson + deal seems to be going through this weekend. Jones said that it's going to take a while before the credit mess is sorted out. If the deal fails to satisfy, or fails to go through, there is an outside chance that nobody gets any credit. Again, it matters that people trust that mortgage backed securities - now, what 99% owned by the government - can float credit. Jones said something about the Feds 'parking them over at HUD for a few years' and then come out smelling like a rose. But there's still the outside chance that there's a dealbreaker, in which case we actually do have a nightmare scenario which is this. No credit for anyone. No credit for anyone means it takes 20 years to get our society back running like normal. That means you go back to living like you did when you were a kid using Christmas Club and layaway.

Here's what I hope.

I hope that somebody has the bright idea to allow the public to participate in the enormous profits that the Fed is going to realize once the panic is over and the markets agree that those mortgages have fungible value again. I wish the Fed would issue some new security based on the Fannie & Freddy holdings and that we could buy into the long-term value of these mortgages when they come back around.

In the meantime, I'm sitting on my cash, and I'm putting it in Bank of America. Well, some of it, the WaMu part of it that the Spousal Unit was holding is now in JP Morgan Chase. That's not going anywhere.

1979: Vintage Crossover

Was It Stan?

I've been looking for a list of names of shrewd financial geniuses who shoulda known better. Of course there's Warren Buffett. Another guy I think is super bright and gets a lot of respect is Dick Grasso, and especially when Eliot Spitzer got his ass handed to him, Grasso had the last laugh. That was an entertaining and informative episode of Squawk Box. But there have got to be more...

So Dick Grasso lead to John Thain and John Thain led to Stan O'Neal. Wait. I know that name. Isn't that the black guy? So I look a little closer. See, he was top dog at Merrill Lynch. Remember Merrill? It's about to get sucked into Bank of America. O'Neal was the bossman and got the boot back almost exactly eleven months ago. Here's what New York Magazine said: (stolen whole cloth)

Former Merrill Lynch CEO Stan O'Neal takes a beating in Portfolio's profile of his replacement John Thain in their May issue. Thain, whose past offenses include putting the little-old-man house barber at the New York Stock Exchange out on the street and allegedly eating jelly on his bagels, comes off looking like Superman compared to O'Neal's sniveling Lex Luthor. Sure, it's not exactly news that O'Neal, who was fired in October of last year, was disliked, but writer Gary Weiss paints the scorn his former colleagues feel for him vividly: The brokers there "despised" him, the subprime-mortgage ventures he presided over were "freakishly ill-advised," in particular his acquisition of subprime "monstrosity" First Republic, which was "viewed as exhibiting all the strategic wisdom of a foray into Havana real estate in 1959." Former Merrill executive VP Win Smith gives the dagger a twist: "He was a mean person, a disrespectful person, and he drove out thousands of years of experience," he told the magazine. Yeeks. You almost feel bad for him — at least until you remember that he walked away with a $160 million severance package immediately after the bank suffered the largest losses in history. Eh, well. Cry on your pile o' money, O'Neal.

A quick check of Google shows that the day O'Neal split, the stock was at 65. It basically never reached that high again. Apres O'Neal, le deluge. But he was doing then, what everybody seems to be doing now, which is trying to merge with a bank big enough to have enough assets so that all that high finance might continue. So was he precient or not? It's not like any of these hotshots are talking anyplace that I can hear, but I'll keep snooping around for backstory, not just news.

The Smartest Money

If I had cash to burn, and I'm thinking about burning cash that I actually don't have to burn, then I would start buying stock right now.

It is absolutely astonishing to me right now that there are people sitting on their hands while millions of others are running around with their hair on fire. It seems to me that right about now, and especially today, well OK Monday, is about the best time in our lifetimes to buy stock in America's financial institutions. Warren Buffet put up 5 billion this past week into Goldman Sachs. I think he got a price of 125 a share. Why would anyone not go into the tank with Buffett?

I'm a little surprised that WaMu went under this week, but not surprised at all that JPMorgan Chase picked it up for under 2 billion. Now that I'm processing that thought, I'm saying to myself, holy smokes. WaMu has that much in real-estate alone. You could liquidate the whole thing over a period of a year and make a huge profit - just let the depositors freak out and go to Wells Fargo. Which they have by the way. The day that I saw WM at 2.10 I told my wife to move her money to WFC just to make herself comfortable. The stock popped up to 4.50 within a week and then dropped to 1.10 before the takeover. I heard this morning that 17B in deposits left the bank. Millions of folks dropped it like it was hot. And now Wells Fargo's stock is up 9% JUST TODAY.

Right about now there are good banks and bad banks. The good banks are going to make out like fat rats. I'm not a trader and I'm mad that I'm not in the market right now, but I tell you here and now, just like I told you about the flexibility in the demand for oil, when this stuff blows over, people are going to be biting mad for not buying right now.

BTW. I am in agreement with the most cynical folks. The taxpayers are the stupidest investors in all of this, and as disorganized and clueless as we are, we're going to get fleeced by the smarter, more cynical investors. If anybody here is trusting political representatives to save our asses, you deserve nothing but ridicule. The average American is going to get wholly hosed. Our money is cheap, and since there is basically no way for us to get it back (unless McCain or Obama does something incredibly unprecedented and dramatic), you may as well kiss it goodbye, which of course we wouldn't have to do IF WE WEREN'T SO STUPID WITH IT IN THE FIRST PLACE.

Unbundle your financial fortunes from the fools. And as Dennis Prager said so eloquently this morning, when it comes to compromising standards, soft compassion always ends up balanced by savage cruelty.

Dodd's Bailout Pork

There are only two words I can think of. Unmitigated gall.

“[John McCain] is working the phones trying to find a way forward that would protect the taxpayer. And this deal [by Chris Dodd] that’s on the table now is not a very good deal. 20 percent of the money that should go to retire debt that will be created to solve this problem winds up in the housing organization called ACORN, that is an absolute ill-run enterprise. And I can’t believe we would take money away from debt retirement to put it in a housing program that doesn’t work.”—Senator Lindsey Graham (R-SC), “On the Record with Greta”, September 25th, 2008.

ACORN in the news:

James Terry, Chief Public Advocate for the Consumers Rights League, today testified at a joint House Administration and House Judiciary Committee oversight hearing on "Federal, State and Local Efforts to Prepare for the General 2008 Election," where he highlighted "corruption at every level of ACORN including embezzlement, cover-ups, misuse of taxpayer funds and voter fraud." An excerpt of his testimony follows: James Terry, Chief Public Advocate, Consumers Rights League:

"ACORN routinely says it will clean up its act. Yet, given its decade-long history of voter fraud, embezzlement, and misuses of taxpayer funds, ACORN's pattern of fraud can no longer be dismissed as a series of 'unfortunate events.'

"The problem of voter registration fraud raises serious questions for this committee, and the Consumers Rights League appreciates that the right questions are being asked.

"Here are the most important questions right now: We know about the thousands of potentially fraudulent voter registration cards turned in by ACORN and caught by officials. But given the size of ACORN's efforts and the fact that the abuses appear to be systemic, we believe it is fair to question how many more fraudulent registrations have not been discovered, Furthermore, as this mega organization with a decades long history of violating the law is turned to get out the vote efforts, we believe it is fair to question how many fraudulent registrations may lead to fraudulent votes or what other activities they are willing to undertake to influence the election.

I'm livid.

Choking on Chuck

My daughter was looking for lyrics to some song called The Barbie Song as she tries out for a local production of Little Shop of Horrors. I noticed that she found them and at the top of the web page was a banner ad for Choke, the new film by Chuck Palahniuk.

I happen to have seen the preview for this flick. It's porno. As far as I recall, it was the story of a man who attempts to debase himself in every way possible, which is about all anybody needs to know. It's porno. So as you might imagine, I was a little peeved about the marketing finding it's way into my poor, innocent, impressionable baby's pristinely Christian mind.

As one of those insufferable pedants who takes himself entirely too seriously, there are few things that get under my skin than the glib debauchery and devil-may-care snark and dismissiveness of those characters who make hay and money by their ability to debase themselves sufficiently to give every airhead and excuse to remain retarded. Few people represent this better than Sarah Vowel and David Sedaris. You know the drill. Oddballity made famous. It's a formula for success in Hollywood. Why?

Why? You have the nerve to ask why?

I'll tell you why. It's because we are a nation teetering on the brink of depravity. But it's difficult to tell exactly how much is going to ruin us, vs how much is a self-contained embarrassment. Hollywood profits by finding the limits of the envelope and pushing it off on us as entertainment, and then there are the 'true' artists who go even further. And so we have swelling subcultures in which it is not sufficient to merely tattoo one's arms and legs, but neck, face and even more bodily real estate. It's circus time 24/7 and the barkers of Hollywood are amping up the volume and making fortunes off their freak show. So it comes as no surprise that eventually there will be a queue of hunger artists designing ever more abstruse monstrosities to salt the pierced tongues of a public desire for bigger perversions.

Enter Chuck P. whose website asks you to 'join the cult'. Perfect.

Chuck is a transgressive from way back. Wikipedia explains:

Palahniuk would also become a member of the rebellious Cacophony Society in his adulthood. He is a regular participant in their events, including the annual Santa Rampage (a public Christmas party involving pranks and drunkenness) in Portland. His participation in the Society inspired some of the events in his writings, both fictional and non-fictional. Most notably, he used the Cacophony Society as the basis for Project Mayhem in Fight Club.

Ordinarily, I would find this sort of behavior falls under the rubric of liberty. But I'm not so sure. I'm not so sure at all. Mind you, I wouldn't really like to see any harmless shenanigans outlawed. But something tells me that this guy is not good for healthy children, and he knows it. Moreover, I'm not convinced that the sort of adults these pranks attract are entirely all there either.

So what say you and I go find Chuck P one weekend and give him a swift boot to the groin. If he laughs it off, then we'll know exactly what we need to know.

You Are Hereby Notified

Cobb comments will now be moderatedaudited. Dissent is encouraged. Evildoing will be pre-emptedremoved.

UPDATE: Moderation is a pain in the butt. I have the inclination but I don't have the time.

On Greed in Business

This morning I listened to Dan Carlin's latest podcast. In the first part, he didn't have much to say and repeated himself a number of times, dragging out the point. Fortunately it was a good point. In the second part, he lost his mind, but I won't go into the second part, rather elaborate on the first. A lot of people have been mouthing off that GREED is the reason why Wall Street is having a hard slog of it these days. A lot of people are wrong.

To use Carlin's apt analogy - saying that people who run business want to make money is like saying that people in sports like to play games. Duh. That's the point. Pitchers pitch, batters bat. Salesmen sell, investors invest. The point is not that pitchers want to pitch faster or batters want to bat further, nor is it the point that sellers want to sell even more at higher prices and buyers in the marketplace want to buy even more at lower prices. The problem is when people change the rules of the game and have no real idea where it will get them. What we are seeing in the financial securities market is not the exposure of greed, nor something fundamentally wrong with capitalism or the 'absence of pure capitalism'. We are seeing what happens when the players exceed the limits of the old rules.

I don't know how many times, in pro football, the rules for pass interference have been changed, but I would think that it has been at least four times in my lifetime. At one time you couldn't touch the reciever when he's catching the ball. Now you can have one hand on him. At one time you couldn't block the reciever off the line of scrimmage. Now you can hit him once. The rules have changed because of what we have seen with extraordinary recievers and defenders. If following these rules one day results in a touchdown the might have won the SuperBowl getting called back and destroys the credibility of the referees, it would be stupid to say that the reason the game is losing confidence of the fans is because football is just too violent, that would be ridiculous. Violence is part of the game, and it is an agreed-upon level of violence with rules and supervision that makes everybody happy and professional about it. The same thing is the case with markets.

Not long ago, Wall Street changed a rule on the ability for traders to engage in a transaction called 'naked shorts'. It was something that the heads on CNBC talked about for a couple days and then it went away. The market makers and regulators are always changing rules to adjust to reality. It makes a real difference to people who play the game, and there are never any shortage of opinions. Mark Cuban, for example had this to say:

This is not a loan that has no value to you, the shareholder. You are PAID for loaning the stock. In fact, for some stocks, you are paid quite a bit. So if you own a share a stock and you take money for it being loaned out, then you have to deal with the consequence that the person who borrowed your share may vote the share. In fact, your shares may not only be loaned to someone trying to short the stock, it may be loaned out to someone who only wants toVOTE THE STOCK.

You get paid for loaning the stock. Its your job to know what rights you have to the share of stock that has been loaned out. It is your job to discuss with your broker whether or not you want your shares loaned out. If you get paid to loan the share, and its voted in a way that goes against your interests, you can scream all you want, but you prostituted your rights. You is a corporate ho.

Now what's all this business of stock loans? I have no idea. Never done it, but somewhere there are rules governing the short sale of stocks and what market makers can do loaning and trading short options and all that complexity. The point is that there are incentives to do just about any and everything with every kind of money: stock, debit, credit, loan, asset, bond, option, strip, coupon, reit, trust, fund, debenture, commodity, adr you can imagine. You can buy them, sell them, trade them, insure them, gift them, hide them, bundle them, unbundle them, hedge against their rise, their fall, their liquidity. You can place time limits on them, or remove them. And people are probably inventing new things to do with new kinds of financial instruments every damned day, like sports coaches and players are always thinking of new ways to improve their game. All within complex sets of rules that the pros and dedicated fans know something about. How do you or I know if it's cricket? Sometimes you just have to be a player to know or even have a clue.

Now I agree with Carlin, that somebody was incented to DO MORE. Well duh. Obviously there were incentives to make more people homeowners. There were obviously incentives to keep intrest rates low. Seems like an obvious combination for financial organizations to make more home loans. Was it right to emphasize this segment of the market? Of all the things that are interesting to do in the financial world, why issue more risky loans and then try to secure it with credit swaps? Why bundle loans sideways instead of longitudinally? Because that's what the people want!

Let's talk a moment about bundling sideways. I heard this on the radio yesterday and it's something I never even thought about, I'm not even sure what the technical term is called or how often its done, but it's a very cool idea.

Lets say that you are a bank, Bank of Cobbler, and you own 100 million dollars of 30 year home loans whose total value at maturity is about 105 million. Roughly 5% is the value of that bundle 30 years out. That's a mere 300 loans with an average value of 350,000 at maturity. Roughly speaking, you get 289k of debt service every month. You with me so far? Simple math, divide 105M/360. Now let's say that looking at the actual history of cashflows over the past 36 months, you are getting an average of 285k allowing for late payments, a small default rate, overhead and being conservative. Suddenly, you need to get a million bucks, like now. So you can take your loan portfolio of that 100M and then sell the next four months of loan payments to a third party. But you make a deal based on a less conservative figure. You need a million and you should be getting 289K so you bump up your loan amount to 1.1M. Your actual collections should be anywhere between 1.140 and 1.56M for those four months, so you figure you can handle the interbank loan rate of 3%. So now you have securitized off some portion of your loan portfolio - the next four months, for 1.1 million in cash. All you have to do is collect on those 300 mortgage payments and pay $33,000 in interest.

Obviously things are a little more complicated than this because you have to make determinations on which parts of these payments are interest and which are principal and rejigger your asset base vs your cash base and treat those monies with the appropriate wisdom. But you can see how easy it is to turn this tiny fragment of you loan portfolio into cash. It seems like a relatively safe bet. The problem now becomes, what exactly are your liabilities if Joe Mortgagepayer doesn't pay two of those three months, and how do you hedge that in your language on the interbank loan? There are probably some interesting rules for that, and obviously investment bankers like Morgan Stanley and Goldman Sachs had more legal leeway than your average mortgage banker or commercial bank. I mean your average Wall Street trader does 100 million dollar deals in their sleep. What's interest on 1.1M for one quarter? Hell, they could pay that out of their pockets. Now you can imagine all the kinds of side bets that could be made with that 1.1M in cash.

The deal was that Fannie and Freddie were quasi-government guaranteed, so that a third party - say Bank of Bowen would have no problem loaning that 1.1M at 3%. Why? Because there was essentially a guarantee that the loans behind this is good money. Now I don't care what Bank of Cobbler does with that 1.1M, so long as I get my 1.133.

Anyway, I haven't come up with a way to show how that 1.1M loan leverages a way bigger amount, but it may have something to do with the way the original bundle was classified at the Bank of Cobbler. That is to say if Joe Mortgagepayer and two more of the 300 in that pile miss one payment, then Cobbler has to declare it somehow to Bowen. Let's say that during those months, that pile had to be re-graded as AA instead of AAA. Then I wouldn't have given Cobbler a 3% rate but probably 4.5%. And then I would have used the difference to buy an insurance premium. Now my insurer is on the hook for this chopped up pile of mortgage pieces in which I have an interest, and Cobbler has an interest and Fannie Mae has an interest and Joe Mortgagepayer has an interest. If I don't get my 1.133, then my insurer has to pay me, Cobbler may call Joe on his loan so he can repackage a new pile at AAA, but now I don't trust Cobbler's porfolios, and my insurer is really in the tank for the little policy premium I took against 1.133...

In all of this failure, all the players are playing by rules we may not understand because we don't get into these transactions, but they are the rules that are necessary to keep all the players interested in the game. I use the term market makers clearly here because the market is not a natural phenomenon, any more than football is a natural phenonmenon, but playing the game becomes a natural part of our culture because it is based upon innate human traits - you can call them Greed and Violence, but it's much more than that.

No Sell Out

Barry wrote:

To avoid being mistaken for a sellout, I chose my friends carefully. The more politically active black students. The foreign students. The Chicanos. The Marxist professors and structural feminists and punk-rock performance poets. We smoked cigarettes and wore leather jackets. At night, in the dorms, we discussed neocolonialism, Franz Fanon, Eurocentrism, and patriarchy. When we ground out our cigarettes in the hallway carpet or set our setereos so loud that the walls began to shake, we were resisting bourgeois society's stifling constraints. We weren't indifferent or careless or insecure. We were alienated.

But this strategy alone couldn't provide the distance I wanted, from Joyce [a former girlfriend] or my past. After all, there were thousands of so-called campus radicals, most of them white and tenured and happily tolerated. No, it remained necessary to prove which side you were on, to show your loyalty to the black masses, to strike out and name names.

Like many blackfolks in my generation who inherited no real understanding of how politics actually works, Obama spent a lot of time with academics and posers. This contributes to my theory of how his exposure to America, and particular the need any putative leader has to deal with *all* of the people tracks his positions towards the right. Obama seems much less baked to me, as time goes on, especially in light of his vacuous voting record. It definitely heralds change if he wins. The problem is that one cannot be truly sure what HE clings to. He has triangulated in a campaign which is exactly the same thing as growing wiser with a greater appreciation for the complexities, and in almost every case his flops have been towards McCain's moderate conservative positions.

Extra Credit Defaults

OK here's something I think it's going to take me a good amount of time to understand. This damnable lattice is something that describes the cascading math used to predict a default over several iterative periods. I think. Now if you want the official legal definition of a Credit Default Swap, then you have to go to this website and pay 300 bucks.

The 2003 ISDA Credit Derivatives Definitions (the "2003 Definitions") are intended for use in confirmations of individual transactions governed by agreements such as the 2002 ISDA Master Agreement or the 1992 ISDA Master Agreements published by ISDA. The 2003 Definitions update the 1999 ISDA Credit Derivatives Definitions and offer the basic framework for the documentation of privately negotiated credit derivative transactions. The 2003 Definitions update provisions in the 1999 ISDA Credit Derivatives Definitions relating to Successor and several Credit Events. In addition, the 2003 Definitions offer new provisions relating to guarantees, Sovereign credit default swaps, novation of credit derivative transactions and alternative procedures in the event the Bond or Loan specified in the Notice of Physical Settlement is not Delivered.

Now you have an idea of what we don't understand. But I can understand this: In 2001 the market for these things was 900 billion. Last year it was 62 trillion. Somewhere along the lines somebody made a killing. Why? Because its clear that the guys who were running these things believed that they could mathematically define risk away. I mean that has to be the bottom line. If somebody sold you on this kind of insurance, why wouldn't you make loans?

Slap-Droning

The Culture has no laws, anybody can do pretty much what they want to do. It would be very hard for a member of the Culture to kill someone else (it would be considered very strange to even want to) but if you did do this you would be slap-droned, which is having a drone follow you around forever, making sure you didn't do it again. Worse though would be the social reaction; no one would want to talk to you.
-- The Culture FAQ

From Bobbitt comes an essential insight. The difference between war of the 20th C and that of the 21C is that states made distinctions between strategy and law. Herein lies a problem.

..we do not sufficiently understand the symbiotic relationship between strategy and law - between what we do to protect ourselves from others, and what we do to protect ourselves from each other - and how that relationship is changing with the emergence of a new constitutional order.

Again this goes right to the heart of my calls for The Last ID. Does it matter that it's the Zodiac killer or McVeigh or a jihadi that commits the act of terrorism? In important ways it does not. Because it is not necessarily their motive that makes them particularly dangerous, it is the fact that they are unnoticed within the population of the open society. They use society against itself, they are by definition sociopathic. If we could mark these human pathogens in society, we could work more effectively against them.

A human is a human, and sooner or later they must interact with the rest of us. If they are on a mission against society, we want to isolate them, some accumulation of cues is necessary. We already know who's popular, but who is unpopular?

It seems to me that given Megan's Law it is somewhat inevitable that we will ban people in open society. We already do so in many ways. If you have a bankruptcy, a felony conviction, or a divorce, there is bad juju that attaches to you and hampers your fortunes in certain activities. What might the next step be? What goes beyond a restraining order?

BTW, has anyone seen the film 'Disturbia'?

The Population is Fixed

The enemy is fluid, but the population is fixed. OK? That's the key point. The enemy can run away. The population can't. They have houses, relatives, businesses. They live there. They can't move. And so you can't defeat an insurgency by fighting the insurgents, because they'll just run away and you chase the guy around. And it's like looking for a needle in a haystack, but you're actually destroying the haystack to find the needle. So you do this damage to the population, which alienates the population, creates a recruitment base for the insurgents, and it just creates a cycle of destruction.

The way to do it -- and you know, we've been doing this for a long time and there's a very solid body of understanding on how to do it -- is, if you like, to comb the flees out of the dog. OK? So you get in there and you work with the population. You drive the enemy off, and then you focus on the population and you try to restructure the environment so that the insurgent can't come back when you leave.

That's Megan's Law on child molesters. That's the DARE program. That's youth gang intervention. That's all counter terrorism. Now here's the somewhat scary part. Look at your kids and imagine them as adults knowing that they will not befriend you unless you have a mySpace page and at least 15 friends with pictures that they like. This is how circles of trust may expand and why slap-droning people can isolate us from criminals and terrorists in the future.

The Market State

My very first reaction to the events of 9/11 was that it was the beginning of the end of the nation-state. Not long after, Colin Powell convinced me that the nation was more important than ever. I became a neocon in recognition that America's exceptionalism was real and required some exceptional responsibilities. My conservatism deepened in recognition that amongst American nationals were the seeds of undermining Western thought. But I'm going to put a lot of that nationalism on hold as I examine Philip Bobbitt's 'Terror and Consent'.

I go into this considering The Last ID and networks of phyles - a new kind of class enabled by circles of trust in open, practically random societies.

If this book answers all of my questions, I will emerge as a libertarian.

Raphael: A Nice Kid

It Ain't Hokey Pokey

Robin Hanson sez:

Food isn't about Nutrition
Clothes aren't about Comfort
Bedrooms aren't about Sleep
Marriage isn't about Romance
Talk isn't about Info
Laughter isn't about Jokes
Charity isn't about Helping
Church isn't about God
Art isn't about Insight
Medicine isn't about Health
Consulting isn't about Advice
School isn't about Learning
Research isn't about Progress
Politics isn't about Policy

There's probably a million of these.

Plaid Flannel America

The first thing I said when Sarah Palin got the nod was that this was a huge boon to middle America and a slap across the face to yuppie domination. As you know, I can't stand yuppies, having been one in the elan of my arrogant youth. But I understand.

What I have been saying to people since then, I realize I haven't written about extensively on the blog. So I'm going to take a moment here to fill out some parts of that stream of American thought and culture that I'm going to call Plaid Flannel America. Now that I think of it, I risk a bit by putting this out there before consulting David Brooks, because he so nailed it with Patio Man. But a few things have changed since then - especially around my way.

As I've been writing, starting about two years ago in the late winter, I spent a couple months living in Philadelphia. During that time, I fell in love with The History Channel, and specifically a show called Modern Marvels. I'm sure that by now I have seen every episode. Yet even prior to that I, like millions of other Americans have been addicted to the scientific reality shows of the Discovery Channel, including and especially Mythbusters and Dirty Jobs. By the time I was living in Philly, I basically restricted all of my television watching to that, completely weaned of shows like The Sopranos, Deadwood, Rescue Me, The Shield, Six Feet Under and even finally Rome and 24.

My favorite TV show now is called America's Toughest Jobs. The premise is simple. Take a dozen office workers, white collar, urban middleclass folks and put them in a blue collar environment - see how their character stands up. Not surpisingly, the stockbroker was one of the first to hit the skids and get fired. In the end, she didn't have what it takes to drive an 18 wheeler. Back in 1977, I was a huge fan of CB radio and big rigs as a highschool junior. I remember when men with hairy chests were considered the role models. Now metrosexuals rule, like the kid who calls himself 'Mac' on the Apple commercials, not somebody you want around when a building is burning down. So like a lot of Americans, I found sweet identification when 'Mac' played his type in the big Bruce Willis film 'Live Free or Die Hard' which says a great deal about what kind of character is necessary if and when America moves from metaphoric Hell to the real thing. There's some part of me which is still a scrappy kid from the 'hood, who was four foot eight and 88 pounds as a high school freshman (not counting the 'fro). I look at America today and I see not quite enough respect for the scrappy people who don't look good when they are doing good because of the yuppie aesthetic we have inherited from two generations of cultural producers who seem to think that the perfect American life is somewhere between Seinfeld and Mad About You - and everything else is either Homicide: Life on the Streets or some retarded version of Lake Woebegone.

I stand in defense of flyover country, despite its lack of commuter airlines.

I have tried to be comprehensive in writing this up, but I'm losing the juice to do so. Not because my passion behind it is lagging, just because I have other things to do. Plaid Flannel America is the Second World, it is the aesthetic of getting dirty jobs done - the cultural ethic that enables and supports infrastructure and elbow grease of non-exportable, non-robot substitutable, skilled labor. It's about repairing telephone lines, driving skiploaders and dressing beef. Irreplaceable and unglamorous.

Second World & Internal Empire

In that post I said the following:

The Internal Empire is how I often conceptualize the hundreds of millions of people living in the US who are not among its ruling class. Among them are First Worlders, Second Worlders and a small but real contingent of Third Worlders. The First World consists of that segment of the middle and upper classes who live up to all of the modern standards of the world. Think 'Friends' and 'The Practice'.

Living in the Second World means that you live among faces that don't make the headlines or the soap operas. In Los Angeles, the Second World is where I'm making my money. It's a very different part of town than where I've lived. There are lots of trucks around here. It's Pico Rivera, Industry, La Mirada. It's industrial and warehousy over here in the Second World. But if there is any town in LA County that looks the most like the 2W to me, it must be Downey right in the neighborhood where the huge abandoned Boeing plant is. The Second World could go up or down.

When Brokaw when all gooey for the 'Greatest Generation', I think he found in that much of this ethos I'm talking about.

S190 & The Road not Taken

Back in 2004, I can remember feeling a small twinge of anxiety when one of the black captains of industry, Franklin Raines was getting his ass handed to him. You may recall that this was when Fannie Mae, of which he was the principal, was forced to restate its finances.

I'm surely not the only black man to feel the twinge - I mean what are the chances that when I do a quick look at the first two names I find defending Raines that they are both black Democrats. Hmm

Representative William Lacy Clay, Democrat of Missouri, accused the regulators of "rushing to judgment."

"This hearing is about the political lynching of Franklin Raines,'' Mr. Clay said. "We have seen this kind of action before. This is truly a witch hunt."

Representative Artur Davis, Democrat of Alabama, asked Mr. Falcon, "Is it possible that by weakening this institution, you are weakening the housing market because of the broad insinuations you have made?"

Rush to judgment? Where have we heard that language before?

The unsung hero in this appearst to be one Armando Falcon, Jr. who was a regulator at an bureacracy called OFHEO. They dropped a bomb on Fannie Mae. Falcon started his doing his job back in December of 2004. Nobody paid attention until the SEC validated his findings.

It turns out that John McCain was one of the people trying to clean up this mess proactively, but were stymied by the Democrats. Chuck Hegel's bill S.190 was going to tighten regulations on Fannie and Freddie. It was clear that Falcon was outgunned and had some explaining to do to Democrats. He ended up resigning his position.

Later the OFHEO sued Raines and Fannie Mae for $400 million.

Here's an article in Forbes giving some extended characterization by Falcon about his role in taking down Raines and what was wrong at Fannie Mae.

Forbes: You resigned under pressure from the White House after releasing your study about the risks Fannie and Freddie pose to the financial system. Now it looks as though your successor also is in trouble for speaking out. Do you see a problem with the independence at OFHEO?

Falcon: When I was director, I think the White House did respect the independence of the agency. I think there was a plan in the works before the release of my report to put their own person in place at the agency. It wasn't as much about independence, but more about me being a Clinton Administration appointee. That's why I stepped down willingly. If I thought it was because there would be a threat to the independence of the agency, I would have stuck around a little longer.

Forbes: What do you think of Congress considering legislation that would give a new regulator for Fannie Mae and Freddie Mac varying levels of authority to scale back the size of their holdings?

Falcon: It's very important that Congress pass legislation to strengthen powers of the regulatory agency. But it's not helpful for regulators to have their hands tied behind their backs on the issue of portfolio limits. I never really considered that was a final point to the legislation until the problems came up with Fannie and Freddie in accounting areas. Many of those problems arose because of the vast amount it took for the companies to manage the risk associated with the retained portfolios. (That is, the loans they keep instead of reselling in the secondary market.) Since the retained portfolios really don't contribute to the fulfillment of the mission of the companies (to promote housing and easy access to mortgages), it is time to get the companies to scale back their portfolios.

Forbes: Any specific number in mind?

Falcon: I wouldn't want to see a hard number in legislation, but the number mentioned by [Alan] Greenspan ($100 billion to $200 billion) is within the ballpark of what's necessary for the fulfillment of Fannie's and Freddie's mission.

I'm not going to spend the time reordering all this chronology. But the bottom line is that Kevin Hassett of the American Enterprise Institute has the Democrats over a barrel on this one. The more I dig following up on his story the more interesting it gets. Obviously there's a lot of blame to go around. If Raines and company had exercised sounder judgment, we wouldn't have been in this mess. If, if, if.

I didn't pay much attention to the racial noise coming out of Obama's media flacks last week about the (non)-connection between he and Raines. But as I look at this I find it very difficult to believe that Raines wasn't selling his own high tech lynching story. I heard the recording of his pleas for solidarity to the Congressional Black Caucus. That McCain is furious this week at the NYT in covering Obama's ass is now more understandable given McCain's own efforts to do something about this very issue long ago.

I think perhaps I have an answer for Hitchens when he asks why Obama hasn't made hay over the apparent political advantage he could make out of this financial crisis. The answer is this. Obama didn't do squat on this issue or anything like it. If he did, then it might have come sideways through the black door. But I doubt that. More likely he was just absent. I'm rather flabbergasted by Obama's voting record. Now that I actually get a chance to see it, it's a rather stunningly empty thing.

So add a few political stripes to the sordid history of this meltdown. I've already been fussing in principle about how crappy racial politics obliterate economic sense, and specifically the appeal to blackfolks to support Down Payment Assistance. I hope we can stick to the facts here. There's nothing racial about Obama and Raines. If there's any connection at all, its Raines trying to bamboozle Obama on a racial solidarity tip as he likely did with Clay and Davis and attempted to do with the CBC. But the legislative history against S.190 is clearly a Democrat Party responsibility and that's where Obama should take his hit. But I don't think he'll man up and do it. That would be too complicated, and this is a story I'm sure he'd hope - like so many others, will die without legs in the national media.

The Fake Rise of the Dow

This whole plan by the government to stop short selling on 700+ stocks is a real stupid move. It's a market manipulation whose unintended consequences we're going to be stuck with. Right now it's clear to me that the rise of a barrel of oil 25 bucks and the price of gold over 900 dollars is a direct result of this. The dollar is weak because everybody is wondering what the next moves are going to be by the government.

I'm really shocked that some people are looking at Bollinger bands. We are in Black Swan territory.

NYU Elections Study

I have decided that this is a legitimate and interesting exercise. Check it out.

http://www.psychsurveys.org/brietruesdell/2008elections

A research team from the Psychology Department at New York University, headed by Professor Yaacov Trope and supported by the National Science Foundation, is investigating the cognitive causes of voting behavior, political preferences, and candidate evaluations throughout the course of the 2008 U.S. Presidential election. This stage of the study focuses on the information people use to inform evaluations during the last few weeks before the election. They seek respondents of all political leanings from all over the country (and from the rest of the world) to complete a 15-minute questionnaire, the responses to which will be completely anonymous...

I'm going to do it. You should too.

What Happened in Iraq Yesterday?

I don't know and neither do you.

What I've heard is that recently the Iraqi Parliament is coming around to implementing more of the items off the 'political surge' and that GWBush has negotiated a reasonable timetable with the Iraqi government for troop withdrawals. Other than that, not much.

It's time to circle around. Apparently Dexter Filkins has confirmed what Michael Yon has been saying.

Racial Comedy 2008

The Unit has bad taste sometimes. For the five good laughs I get out of half an hour of comedy, I've been wading through a hodload of horse hockey for some snuggle time on the midnight couch of bored insomnia. I'm talking about First Amendment, the new series of standup from our Hollywood geniuses and Martin Lawrence.

It has long been my contention that there's a difference between pornography and porno, porno being good. It is a natural consequence of my appreciation for the size of this nation, and my disgust at the arrogance of social control. The nation was built for tanks, it's nice to roll our Lexi on the same tracks, but don't pretend you're important. Similarly the nation was built for Wordsworth, it's nice to have Bruce Bruce share the airwaves but...damn!

In truth, Bruce Bruce is the Lexus of the bunch. A man with true breath control, he can take his diction to a rabid pace or immediately bring the crowd to a hush. The rest the pack of rats are a level of fuck jokes I never even heard in summer camp. I keep wondering when I'm going to get through a standup routine in which the male comic does NOT do the smack that ass giddyup pantomime. That was tired in 1988, and yet it remains a staple. Where IS Paul Mooney when you need him?

On the other hand, there is a small star on the horizon - Russell Peters, from the great white north, has enough material to fill a one hour show and a good sized venue with his observations of the differences between race and culture. He has an uncanny ability with Chinglish and Englian, which would be the stereotypical accents we recognize when Chinese or Indians mangle the King's English. And so he has some refreshing hilarity on those, the two largest countries on the planet, neither of which can field a decent soccer team. He chides Jews, Deaf, Arabs, Portugese, Blacks, Whites, Latinos roughly in proportion to their representative population in the world-bourgios. It's a good show which I recommend.

--
The good thing about racial humor is that it is predictable. Peters' experience says that it translates fairly well across the West. There is that possibility that getting between Chinese and Indian will be an interesting spot for humor, if and when we get to hear it. It's a rivalry I expect we'll hear more about. So who IS the cheapest?

Talk To Me

I finally saw 'Talk To Me' and it hit me in the Bryant Gumbel zone. I had forgotten that I had it.

Once upon a time when Bryant Gumbel was the only black sophisticate on television besides the dude on Mission Impossible, I used to sit and watch him while sweating through my shirts. It took a long time as a kid before I could be comfortable that the black guy was not going to screw up in front of everyone 'and send the race backwards 100 years'.

Talk To Me, is finally the most mature look back at the stylized 60s. It picks up an angle as serious as The Spook Who Sat By the Door, with the kind of sophisticated, anachronism free portrayal of the day that we deserve. Without a lot of hokey black and white montages interspersed, Talk To Me does a good, unsentimental, yet emotional job of bringing us back to the days of porkchop sideburns and the slow burning to the ground of Jim Crow America.

It's the story of two black men, one a doer and the other a talker, both from the streets of DC who find in each other an opportunity to transcend. They are a portrait of styles and ambition in conflict, one an ex-convict, a bad man from the bad side of the tracks speaking in the ribald tones of pain and abandonment, a street guru whose rhymes you can easily imagine being the doggerel fueling a thousand black ministers' oratory. The other is a slick operator with everything to prove, a daring man with a bold plan to manage the new black voice of America into a transforming force, a man with six balls in the air, including his own. They need each other, they respect each other, they triumph together but they ultimately fail each other, each by failing to do at all what the other man does so well.

I could feel the climactic scene coming a mile away, and I could feel myself starting to sweat. It was the debut of Petey Greene, the man with the mouth and the drinking problem, on the Tonight Show. He punts, of course, which is why so few of us have heard of his name. He might have been another Redd Foxx or the successor to Dick Gregory, instead he was not.

All though the film, I felt some sympathy for Green. In his own way, he foretold the decentralization of media - ordinary people talking to ordinary people rather than communications product following the dictates of the same old means of production. The fundamental truth of Barry Gordy being a pimp might be said. Holding that fact in abeyance didn't save anything but decorum, but ultimate everyone's character flaws defeat them. If we have merely moved to a level of communication that makes all defeat public, it may not be a boon until generations have lived in that fishbowl. If everybody is a punk-ass at some level, should we all always see that level? I'm not so sure. For only a short time in all of our lives are we truly actually beautiful naked. Walking around with X-Ray Spex is sick. Yet Petey was what he was, a hustler and a drunk, a raw man not built for saying more than anyone around him could say, just ballsy enough to say it. In the end he was not a vehicle for himself or anyone else - his talent could not support him. And so he drifted back to the bottom.

A lesson.

Taking My Vitamins

The most honest song on the radio is Lets Get Retarded. That's not a problem for people who wanna, but it is for me. But I've found a solution in Vitamin Records, the Muzak for my generation.

I can't tell you the names of half of the jams I love, that's because they're mostly ambient instrumentals with some electric scratch, tabla and dub thrown in. If you know Fila Brazillia, Talvin Singh, Prefuse 73, and Squarepusher, then you know where I'm coming from. These are the cool inheritors of the beginning of the new era in electronic music started by Herbie Hancock, Thomas Dolby, Afrika Bamabattaa, Twilight 22, New Order and the Art of Noise back in my college days when I still wanted to get retarded. Oh did I forget Kraftwerk?

Sordid and Sorry

I feel myself brought to pity, and have for a long time, at the state of my political opposition. The problem is that they don't scare me. Unlike most of the airtime Righties, I have for most of my time on this side of the aisle been sympathetic to the failures of Left thought. My attitude has been one of respectful disagreement, spirited jousting and flippant dismissal. But now it is moving towards disgust and contempt. I have just about had it.

I'm going to be grumpy and caustic and see if it makes my hair fall out, as I have been warned. And now so have you.

Higher Than Politics

This morning I was listening to Dennis Prager and he was moaning and mocking respectfully as he always does. Then he said something that was interesting in trying to understand how the Left gets their drawers in a bunch, especially those who find it easy to hate the middle of America aka flyover country. He said that politics is their religion - that they have no higher comfort. He then went to say how comforting it is to know that he has a higher calling and can let politics go when it gets too crazy and mentioned that he'll be celebrating high holy days which are upcoming shortly in the Jewish calendar.

He's wrong. The opposition does have a higher calling. It's sex.

Aldous Huxley said that an intellectual is someone who has found something more interesting than sex. What then is a person who finds sex to be the most interesting thing of all? The context I'm thinking of is one that suggests that if we all agree that everything we do in politics is to secure our pursuit of happiness, what exactly is the end game? What provides happiness? If governments are instituted among men to secure such things, what things are we securing.

This is something that Prager does talk about a good deal and I remember agreeing with him as he spoke about it some time this past spring.

I haven't seen the Vagina Monologues, but I can already tell that I don't like Eve Ensler. I just caught her video on the TED website and cringed at her example-making and her illogical inversion of the notion of security, especially her terms of embracing suffering. Then again I know she's not speaking to me but at me abstractly in the third person 'omnicient' in that passive-aggressive way liberals often express their anger. The girl who wears an 'I love my vagina' T-Shirt in high school was the heroine of the day.

Without going into the details of what has gone off the rails with feminism, and what we know is wrong with multiculturalism and identity politics, it is curious to see the dovetails between those ideological movements and the pursuit of sexual happiness. I asked the question without much response in The Sybaritic Side of The Culture. Is the end of human invention and civilization result in all of us basically 'reverting' to our true natures of enjoyment of sex, drugs and rock and roll? Or perhaps a better way to put it is this? Is there something more Godlike in sacrifice?

Perhaps an unspoken yet well understood trope of our culture wars - our divisions of Left and Right, between cosmopolitan and drylongso is over the same old matter of the Puritan work ethic all over again. After all, you can't get conservatives to swoon more obsequiously than when they describe some soldier's noble sacrifice. And there's nothing liberals love to do more than mock that as an utterly meaningless waste of a life.

I'm willing to put God as a higher purpose, or more accurately to state that we find our higher purpose and therefore the most true essence of our humanity in our search for God. And while it is abundantly clear that we American Christians have a gigantic black hole where the ritualization of sacred sensuality should be, it's not so clear that non-believers have a lock on transcendent sex. That is precisely the difficulty I have with those who make no distinction between sexual restraint and sexual repression - which is where I see most feminists and their supporters coming from.

I am approaching the age at which sensuality is academic, and every year that goes by finds me less and less anxious about it. I thoroughly enjoy the privilege of married life which obviates the tremendous pressure of single life. It would take some doing for me to get back in the mindset of embedding so much meaning into sex, meaning that would come close to justifying how much of it permeates the motivations of so much of our society. I've been laughing at single people's goofball relationships almost as much as skateboard blooper videos, and now I'm to the point at which I want to derisivley smack people for their idiocy. And I warm to them in the realization that they're looking for romance to provide a purpose. I am brought to pity. Remember Cobb's Rule: There's Marriage and there's everything else; everything else doesn't count. There's a statistical industry for you social scientists... How much despair in America is not created by Bush and the Republicans, but by the fact that so many people can't find happiness? A great irony if ever there was one - you'd think that those who seek to find redemption in their personal and sexual relationships would be, like stoners with the best herb, too happy to care about the intrigues of PNACians. Alas, there is not much purpose in romance, and so they must put passion into politics.

I understand and respect anyone who fights against the repression of women. There are not enough warriors in that battle. No society that disrespects women can long survive, much less sustain liberty. But I fear that many who mock conservatives on sexual matters equate abstinance and restraint with stupidity and repression, and in their verve to liberate the naughty bits of people around the world, have mistaken profligacy with liberation. What did I hear the other night? Yesterdays sluts are today's 'empowered women' and today's sluts are all celebrities. If you could fuck your way to freedom, nobody would need armies.

Edjumacation

One of the more difficult things to grasp in dealing with what I have called my generational imperative, is the shibboleth of Education. This is an Old School thing, and by extension a black thing, but interestingly a liberal thing.

I spent a few minutes considering how I would define my political upbringing this morning on the way to work. I've called myself a Progressive for years without having been certified by any body. I started off as a Black Nationalist of course and then spent a little time dramatically adjusting that to the realities of integration and white liberalism. And then I did what comes natural in black politics, assumed the mantle of the imperatives of the Talented Tenth which is essentially what Obama says it is. Go to the good schools and use marginal middleclass advantages to crack open doors for 'the least of these', your black brothers stuck back in the ghettos you escaped.

There is no honest black man or woman in the Talented Tenth that doesn't understand first hand exactly how the uppity Negro gets bitchslapped on occasion from his uppity but beknighted cousin. The hubris of the black upper and uppermiddle classes are rigorously kept in check by a collection of kneejerk reactions deeply understood Back Home. I might be able to sum it up in one word: 'Edjumacation'. The black motherwit doesn't trust it. It's such a loud chorus in the background of black politics and culture that it almost drowns out the hallelujahs of black American success. Every generation has its crabs, and the well-worn calling card of the crabs is that they're 'keeping it real'.

There is certainly a downtrodden note in the bleak reality of many African Americans. 60+% of us are middleclass or better, but 40% of 38 million people cannot be written off. Every year the Urban League reminds us all of the sad but true story of a black America that isn't finding much to dream about in the American dream. And yet as close as we all remain together, blacks bumping heads across the borderlines of class, the solutions which work for some can never be far from the ears of others. There are equal numbers of platitudes back across the wrong side of the tracks. For every knucklehead who has his voice amplified by ghetto DJs spinning 'keep it real' there is a hard working mom who has her voice amplified by the local officials saying 'stay in school'. Say no to drugs, work twice as hard, handle your business, respect your black woman. For every Fiddy, there's a Cosby. Or more properly for every 4 Fiddys there are 6 Cosbys. The message gets across both ways.

I think that the ideological difference is permanent. This is only problematic because black people are not used to being poor. I'll say that again. Black people are not used to being poor. Being used to being poor means accepting that place in life with dignity and ease - not seeing one's life as being essentially unfair. For too many generations, the Negro has looked up for a home, not down. And today we're unhappy being anywhere below average, which is why the knuckleheads are not simply happy like rednecks. Nobody likes a poor happy black man or woman. It is a symbol for futility in the greatest nation on Earth. If black people were to be poor but happy, if they were to be comfortably settled in the lower classes of America, then the clash of ideologies between the 40% and the 60% would be merely academic - nothing to get excited about, a regular part of American life like the difference between Red and Blue states.

But no. Blacks require progress. In today's culture, black mediocrity, black weakness, black backwardsness is unacceptable. Which is why Edjumacation is so controversial, because it only gives us the appearance... well let me take a moment and explain.

Barack Obama symbolizes everything, and I do mean everything, that the overwhelming majority of blackfolks expect to be someday. He is educated at the very tippy top of the pyramid. It wasn't long ago, a mere 15 or so years, when Derrick Bell sounded off all around the country that something is radically wrong with America because he was the only black law professor at Harvard. And then he proceeded to self-destruct in a fit of pique worthy of Leonard Jeffries. Which is why Obama is happening and Bell is not. Where Bell was extraordinary and alienated at the top, Obama was supremely comfortable. Where Bell had to be blackified and defensive, Obama could be neutral and effusive. Nobody really believes that Obama is as brilliant a mind as Derrick Bell or even Clarence Thomas, he could never accomplish as much as a jurist. There'd be a big stamp across his head - UNQUALIFIED. Nobody would suggest that Obama could hold a candle to Thurgood Marshall. So what exactly was the point of him graduating from Harvard Law? He made it look easy. Obama is not about ultracompetence and fierce determination against all odds. No that was the task of another black generation. He is not about excellence, but achievement. Respectable, competent, reliable, uncontroversial, bourgeois achievement. Obama is all about black privilege. All of that starts where? Edjumacation.

Edjumacation is the middle class and upper middle class passports to American mainstream success. If you graduate from Ohio State with a bachelors degree in accounting, you are not a world class brain. But, you have a very good chance of getting a very good job and fitting in with America - no problem. This is what African Americans have come to expect, because we are not used to being poor, and being a Negro Problem is unacceptable. BUT. BUT. BUT. BUT. Black people want to own black people and 40% of us refuse this playing nice-nice with the mainstream, bourgeios, middle class , white bread, ordinary, flavorless flyover country. This is why hiphop exists instead of crossover. Blackfolks have to have their own flavor. Blackified like Derrick Bell, so you can get up and say things about Katrina that nobody else on the planet would even think about saying in the wake of human disaster. NO NASCAR! Blacknecks and rednecks don't mix. It's the same identity crisis, and the poor blacks and the poor whites are dad-blamed uncomfortable. Except that the blacks are WAY more uncomfortable. That's why everybody gives black Republicans shit. Because by and large, we are independent thinkers and don't mind being odd out of the bunch, but I digress. It has long been a fantasy of the Left to unite black and white proles, bohunks and -billies of all sorts. Whether you are an around the way girl or a coal miner's daughter, there has always been a promise of recognition and empowerment. BUT. Them ghettos don't mix.

So what I've been noticing is the extent to which a sort of disdain for the uneducated is generated out of the social context of a black educated class, which I suggest is tantamount to a first generation of collegians. The people you cannot imagine sitting in their office without putting their degree on the wall. That's where the biting edge of class and social lines is felt hardest. So I think a characteristic of the resentment of *comfortable* poor people has everything to do with the nature of striving to get an edjumacation. I think people should just chill, even though they've spent their lives achieving.

The imperative of getting an education in order to get respect in this society is tied very tightly to our notions of meritocracy, but everyone doesn't merit and all of the distinctions of merit in a society this large eventually become petty. What matters most is character and morality, dare I say, nobility and virtue - things that represent another dimension of achievement and excellence, one more equitably spread across demographics. Correctly identifying this thread of righteousness is the right priority for this or any nation, and it is something I fervently wish we would pursue more fervently than edjumacation.

A-Levels, Community Colleges and Five Point Bagruts

I was just reading up on a biography of Daniel Lewin, the late CTO of Akamai off whose stock I made a pile of money back in the day. He was a brilliant young man and may have gotten a taste of Muhammad Atta's blood on Flight AA 11 seven years ago. His personal history is fascinating, my kinda mensch.

Anyway it turns out that he attended a joint called the Technion in Israel before mesmerizing the faculty at MIT. As I have been thinking of secondary education the past few days I have been compelled to think about University based high schools. We have one at the University of Chicago that's fairly well known - I wonder if there are others notable here in California or elsewhere. Basically, I think that four years of college prep is not the best way to go - that collegians need a bit more maturity and they need to get the stupid out of their system, as in 'Lets Get Retarded' before they can truly benefit from a sterling undergraduate program.

So as I'm reading up on the Technion, I see the following.

Students attending the Mechina for new immigrants are given personal counseling which includes guidance regarding service in the Israel Defence Forces and university studies in Israel. A variety of social activities, including tours, are provided in cooperation with the Ministry of Absorption.

Whoa.

These Mechina are essentially a full academic year of preparation in which they teach technical subjects at the 5 point Bagrut level. The what? Aside from the seriousness which mandatory military service implies, evidently the Israelis have worked out a system, as it turns out roughly analagous the the British system, that includes some distinction between those who are going to college for real, and those who are going for show - which ultimately we Yanks have to admit that a good number of our colleges are.

Somebody surely has a statistic of worth that shows how many more Americans as a percentage of our national population are attending university classes. But how many of us ever really bother with calculus, eh? We already know in our culture that certain concentrations are 'joke' majors and that certain collegiate cultures are foolish in the extreme. So how did we get to this sorry state of affairs? Well, that's not as important as understanding that it remains true that many of our students and students from around the world are very well served by our universities. But we know that our public secondary ed is not pulling its weight.

As a side note, at my old high school, Loyola, I was informed that it's very difficult for the administration of the Jesuits to convince those priests and brothers who want to teach, to teach at the secondary level. They prefer to teach at universities whose schedules are less demanding.

It is absolutely true that the best thing a prep school can do is not teach material but prepare a student for the rigors of absorbing real material. So who is bothering to take that time? Obviously those private schools where the best and brightest would send their kids, and where people who are quite capable of making money from their brains actually prefer a rigorous academic environment. The rigors of serious study are what we are missing from our highschools, but the joke wouldn't be complete if there weren't complementary colleges and universities which lacked rigor as well.

My solution then would be to let high school be high school, and let a diploma be a diploma, but then let there be a rigorous machina or A-Level or Five Point Bagrut level finishing school be the necessary gateway between average competence and rigorous competence.

Women For A Dead McCain

Operation Chaos goes bi-partisan.

New Cobb Feature: Daily Obama Beatdown

Ronald Reagan once famously said, I'm not going to lie to the American people, I'll let others do that. It was interpreted by his opponents that he meant others in his administration. We knew better. In either case, there have always been better liars than Ronald Reagan, who was hated so much because he said straight out what he meant. Well I'm going to let others tell the truth about Obama because I don't really want to argue about it, but I want people to see the stuff I see. So there's a new sidebar on the right. Daily Obama Beatdown.

Read it and weep.

Iran: It's The Missiles, Stupid

Finally some UN weenies have come to their senses. This story is buried because it hurts BHO and his great white father newspapers friends in the liberal media are not going to let any bad news take any more air out of their little fantasy. Iran is redesigning its Korean missiles to carry nuclear payloads.

The U.N. nuclear agency has come to the same conclusion that many experts reached months ago: Iran is redesigning one of its missiles to accommodate a nuclear payload.

Officials at the International Atomic Energy Agency (IAEA) shared that assessment with representatives of 35 member nations on Tuesday. Analytical details were not provided, but the senior U.S. representative, Gregory Schulte, said the report shows that Iran has a weapons program.

In response, Tehran's senior emissary to the IAEA claimed that the information was "fabricated."

So has BHO updated his unconditional open hand to Crazy A? Where's that agenda of hope these days? Anybody care to guess?

You Just Know

From VDH. And the extended piece is very good too.

I am not calling for yokelism, or a proponent of false-populism. Rather, I wish to remind everyone that there are two fonts of wisdom: formal education, and the tragic world of physical challenge and ordeal. Both are necessary to be broadly educated. Familiarity with Proust or Kant is impressive, but not more impressive than the ability to wire your house or unclog the labyrinth of pipes beneath it.

In this regard, I think Palin can speak, and reason, and navigate with bureaucrats and lawyers as well as can Obama; but he surely cannot understand hunters, and mechanics and carpenters like she can. And a Putin or a Chavez or a Wall-Street speculator that runs a leverage brokerage house is more a hunter than a professor or community organizer. Harvard Law School is not as valuable  a touchstone to human nature as raising five children in Alaska while going toe-to-toe with pretty tough, hard-nose Alaskan males.

This is another touchstone for my new campaign in support of Plaid America. More later.

Panic Attack

I was staring at the ticker yesterday and it took a lot of restraint for me not to buy a load of WM at 2.10. This morning it's sitting at 2.33 and rising.

I happen not to be playing the markets, in fact I haven't for some time. I don't feel like it's gambling, more like gaming. But I don't want to game with my moola, not that I have so much. The other day I met a very well dressed gentleman in the elevator on his way home. I asked him if he had lost his shirt today and he misinterpreted my comment to be about the weather. It reminded me that most people don't play the market. Nevertheless, I've been watching very closely this week.

Every time I hear the exclamation marks about the economy going down the tubes, I think about how large the market is and how little the fundamentals of all businesses are like those which are failing. It's rather like when celebrities die. Everybody says they die in three when in fact they die by the dozen. Only the media will pick up three at a time after the first notable dies. One of these days I might begin reading the obituaries, shopping for opportunities. That's market watching too, and this kinda stuff goes on every day. I do still enjoy, though I don't trade, looking at the market heat map at Smartmoney.com

This morning I found the first generic spammy search website that had some actually useful information. It's called http://www.bankswd.com/ and it lists the names of banks that I had long forgotten. Obviously somebody hacked up a database into a halfway decent CMS and spewed out the website, but I have to say not bad. Once upon a time I worked at City National Bank - which was the 10th largest bank in California. Nobody ever heard of them because they didn't do real-estate. It made them relatively profitable. I always remember that CYN resisted the temptation. These days they're doing fine, as is Union Bank. But there are so many California banks that have gone by the wayside over the years, even banks that had their logos on the tallest buildings in the state. Security Pacific, Crocker Bank, First Interstate were all serious major banks. Those institutions have been outlived by buildings constructed since I was in high school.

It's awfully inconvenient to have to change banks. I don't. My money is in Wells Fargo and Bank of America. They're not going anywhere. But I am really gobsmacked that Morgan Stanley is on the block. That's Mr. Jones' boss. I'm fairly sure that he's going to be fine, as he has rather hand-picked his clients. Still, that's a lot of American institution changing hands. It's starting to feel like the 80s when the Japanese were buying up American real estate.

I have a sort of scientific appreciation for markets and financials. They are part of our basic understanding of society - of how we value each other's lives and work. In that regard while I know they can be very complex, the fact that we can feel them means that we are rather innately wired with them. Like a flower or a dog we understand money and that understanding is universal. So I'm not going to panic. The other day I told my new friend Dan about my theory of America - that it's not built for us, but for the rich. Like the interstate superhighway system was built so that tanks could roll from coast to coast, we get the benefit of rolling our beaters down them. The thing is that all of us know how to be rich, it's easy. How to get rich, that's hard. But Americans all think about being rich and so the overwhelming majority of us react to money the same way. We all know that somebody is going to get rich, and they'll eventually drive their tanks down our superhighways, and we'll follow along in our beaters just the same.

Welcome to the cycle.

Septeenth

I just got off the phone with the Spousal Unit who, after a few days of being rather out of it finally went through the messages on our answering machine. It turns out that George Kelly was looking out for me and I didn't realize it. You see, he left a message on my home phone that I won an award. Huh? What?

Rather like the news that the slaves were free that reached Texas on Juneteenth, I just discovered that twelve days ago I won the Aaron Hawkins Award for 2008.

The Black Blogger Achievement Award will now be known as the Aaron Hawkins Award. Aaron Hawkins, for those of you who may not be aware, was the dynamic and outspoken voice behind the blog Uppity Negro. Sadly, Aaron is no longer with us, but you may find out more information about him and his wonderful blog by visiting his about page. Special thanks to the Valerie Hawkins (Aaron’s sister) and the Hawkins family for allowing us to honor Aaron’s memory.

So when the committee gets back to me, I will proudly add the distinction to my 'stinking badges' collection. Right at the top.

Aaron Hawkins was an inspiration to me. Way back in the day, in searching for a title for my blog, I discovered he was already the Uppity Negro. Over time we tracked back and traded some threads, and he eventually gave me the nickname 'Tuvok'. The black blogosphere was a lot smaller back then and relationships between black bloggers just getting started was a lot more important, as were the links between Left and Right a lot more numerous. I owe a lot to Aaron and other pioneers like George Kelly, MacDiva, LynnLuva, MisterJT and Prometheus 6. Now that I'm an all grown up blogger, I don't check those links as often as I used to. Now is a good time for me to check back with those homefolks and pass it on.

My mission remains to be an independent voice representing my fragment of the African American scene, The Old School, and having a critical dialog on the politics, culture and current affairs of our nation. I don't know how big that Old School fragment is, and I get more and more individual every day. But I never forget where I come from and remain true to those origins. Of course the most difficult thing with that truth is that none of us expected what has come to pass - for some of us, we are larger and more complex than we dared dream we might be, and still we carry some of the same burdens. For me they are to embrace the world as it is, and take responsibility for walking through it with a sharp focus. I remain perceptive and articulate and I open up my mind in public for a true Socratic dialog, curious, skeptical and analytical.

As an award winner, I am compelled to be responsible for those who supported me, even though I was unaware that I had been nominated. That means that my mission, as I see it, has been validated without it being all about me. That is a great blessing and for that I am grateful. I very much enjoy being a bulldog, I just need energy to fuel me and a target to bite. I'd rather be strongly wrong than weakly acceptable, and so I will continue to engage the issues with passion for the sake of clarity, and to posterity, so that nobody can ever come back and say that we as a people didn't deal with the world. I've got more energy, so I get more bite.

I look forward to the day when I can contribute not only in writing and on radio to the discussion that animates thoughtful citizens in a free society, but in televised conversations and roundtables as well. I feel that I have something yet to contribute, and with this as my avocation, as my primary responsibilities give me time, I will continue to push forward to that end. Perhaps one day I might even crossover.

Special big ups to George. Thanks for the call. We're in it for the long haul.

Obama, Three Ways

Every once in a while, JB White, fellow Conservative Brotherhood blogger decides to give some extraordinary length to an important political subject. Over at Rattler Gator he has compiled a set of arguments about the weakness of Obama today in ways you hardly ever hear in the same week, much less the same essay. There are some sterling paragraphs as well.

I like this one:

I keep asking black people, and will continue to do so, have you called George W. Bush a Hitler? A chimp? Stupid? Have you laughed at the outrageous slandering of Sarah Palin? Every far left liberal who has thrown out that kind of foolishness about the Governor of Alaska (the kindest thing many of them have grudgingly said is "empty suit") has telegraphed to black people exactly what they truthfully think of your grandmother, your aunt or your cousin, etc. Especially if they step off the plantation.

Echoing something I wrote about McCain's ability to play the identity and political correctness game, White agrees:

Do the math: if America votes in racial blocs across the board, do black people win? Now, lets extend that a bit further. In the phase two analysis above I presented an opinion from a white female Democrat that said gender trumps all else for her in this election.

Read the whole thing. It gets behind Obama and brings forward the logic that has always been true, but has been defied by the polls. Now is your chance to hear and understand if you haven't bothered before.

Burn After Reading

I'm getting harder to entertain, especially in the genre of spy movies. But the Coen Brothers' latest film is still entertaining.

There's something really deeply missing in this film. The premise is great. Have a story about a farcical number of love triangles, as with the French classic 'La Ronde' (and there was an episode of Seinfeld following that too.) and mix it with a spy thriller. So you get one fired spy dude whose memoirs kick off a comedy of errors so convoluted that the CIA itself cannot figure what's going on. What a brilliant idea.

It's too bad that this film is so chock full of stars that it doesn't quite work, each of them mugging it up on the screen not being funny. Brad Pitt has maybe one funny line in the entire movie. I can't remember what it was. George Clooney plays a great character but I kept finding myself staring at his beard to see if it was real. Why the closeups in a comedy if the guy's not being funny? I wanted this movie to be a lot more hilarious than it was - it seems that the Brothers have lost their comic timing altogether. In every way that No Country was slowly paced, I can see the Coens wanting something light and rompy, but this one just falls apart.

What's missing from this film is the intelligence of the fools. What made Blood Simple and Raising Arizona so gawdafully funny, as well as Fargo when it was, had everything to do with the utter absurdity of people who were actually smarter than you might think, getting themselves into impossibly complex and desperate situations. This time, everybody in the film, well the ones we spend the most time on is played as an idiot, Pitt especially - taking up entirely too much share of the screen.

Frances McDormand and John Malkovitch save this from being a real stinker. McDormand, in a measured yet manic performance manages in a couple excellent scenes to convey a sense of female midlife desperation in an extraordinary way. Malkovitch explodes with apoplectic rage, frustration and condescention. Those two alone generate all the dramatic tension in the film.

The biggest problem with this film is that there were too many stars, and they all lived too long in the film. More dead bodies and more unknown actors would have made the deadpan required of Coen's script work better. But if you had to use big names, then Brad Pitt should have been Owen Wilson and George Clooney should have been Ben Stiller. On the other hand, maybe Burn After Reading proves once and for all that only Guy Ritchie can do Guy Ritchie, with the exception of Woody Allen's 'Small Time Crooks'.

BHO's End of History

Every once in a while, people blab stuff from O'Reilly and other pinheads as examples of the kind of thinking they think all Conservatives think. Here's Fernandez, and he's a thinker I follow with regard to geopolitics and foreign policy. Here, he bonks Obama but good. Emphasis mine.

In the years leading up to the Civil War there was the theory among those who advocated compromise that slavery would gradually fade away and that a direct confrontation was ultimately unnecessary. In a kind of inversion the Left has probably hoped since the 1960s that people would be ‘enlightened’ into voluntarily accepting their intellectual chains.

But the Culture Wars and especially the Rise of Islam have shaken that belief to the core. The Culture Wars meant the program wasn’t working. People were pushing back. And with the decline of the MSM and the growing obsolescence of the traditional university it became less obvious that a certain world view could ‘inevitably’ be imposed by cultural indoctrination alone. But I think the advent of radical Islam really told them the clock ticking. If they couldn’t make their vision happen soon, it wouldn’t happen at all. September 11 had the effect of energizing conservatism and usurping the Left self-appointed revolutionary role. The Left was caught between two fires: the conservative hold-outs and the more militant Muslims. But there was a third, largely unrecognized factor which weakened the Left. Globalization. Globalization has made not just Islam but a whole host of non-Marxist authoritarianisms competitive with their monopoly. The Confucian Chinese and the Russian crime-syndicate types of authoritarianism mean their dream of a multilateral EU-style world is far from inevitable. In fact, it means their politically correct world is unlikely to survive in the fact of such brutal competitors. Not only are the demographics and trends are against them, their silly little Fabianism simply won’t work against thugs. You can’t argue “reproductive rights” with radical Islam who will simply decapitate the staff of their abortion clinics. Nor can you blater on about human rights in Moscow, where a bullet in the head answers all arguments. About the only thing the Left is confident of beating is the relatively civilized, Bible-clinging, law-abiding soccer mom. So that’s who they’re going to beat up on. Not any Shi’ite militias or Janjaweeds. None of those. What they’ll take on is Sarah Palin or an old geezer who can’t comb his hair.

I’ve come to believe that the extraordinary rancor associated with the Obama campaign is driven more by anxiety than anything else. They’ve pulled out all the stops, dropped all the masks, dispensed with all the subtlety because this is Last Chance Saloon. They’ll run whatever media they’ve got left into the ground in the hope that if they can just get BHO into the White House, history will stop. But it won’t. BHO’s administration will be about as safe as British New Labor is against militant Islam and Russia in a world without America because the whole guiding principle of BHO is that America is part of the problem, if not the whole problem. Which is to say, that after he succeeds in sawing off the limb, he’ll wait for the tree not the branch to fall. But he’ll be in for a surprise. What’s BHO going to do after he sells both Iraq and Afghanistan down the river? What are the Kos people going to do after they’ve cancelled all advanced combat systems and made it a crime to criticize their shibboleths? What are they going to do after they’ve made every apology and paid every reparation and Hezbollah still wants more? Who’s going to bail out Chavez and Morales after they’ve Mugabeized their countries? Get money from Obama? Basically the Left is up against it and must burn their shirts for a little bit more flash.

They may get it their momentary blaze of glory, but the fire they see will be that of the house burning down. I feel sorry though, for the bystanders of their gotterdammerung.

Hambrecht on the Credit Crisis

Single Payer: Why?

One of the reputedly smartest guys I know who teaches at this little place called Harvard Medical School suggested to me the other night that one of the things we ought to seriously consider is a Single Payer system of health care financing. I'm trying to figure out why. As I look at the Wiki entry, it says what it sorta is and what it sorta is not, but it doesn't give me any indication why it is supposed to work other than to show that other countries do it, sorta.

What is fundamentally different about health care that makes it difficult to insure? I mean, nobody suggests that we have a single payer automobile insurance system or single payer home insurance. I think that's a relatively easy question. I think it's because single payer is an attempt to standardize pricing or otherwise force all the parties involved to work from the same set of assumptions.

One of the things I would like to see is a more transparent pricing mechanism and some standards, but I would rather see those standards evolve in the market. Part of the problem is that I'm not sure that insuruers or providers have any incentive to standardize.

If you're like me, you deal with this open enrollement & election benefits period once a year, in the fall. Then you probably never change your coverage unless and until you change employers. Which means you probably buy cars more often then insurance. We all understand that we can get taken if we're not accustomed to shopping for cars. So shopping insurance, being a rare thing, is something we cannot get a good sense of as consumers - not like other more frequently purchased goods. Again, I think this fact plays to the insurers resistence to standards.

I also understand that there are factors that make doctors more or less likely to practice in a state and that this plays into the quality of health care available.

Is it possible to have a Single Payer system without government monopoly control of the entire process, or are they tantamount to the same thing? Have all Single Payer proponents despaired of a private solution?

The Personal Guru Grows Political Balls

Deepak Chopra's take on Sarah Palin
From: Deepak Chopra | Posted: September 4th, 2008

Sometimes politics has the uncanny effect of mirroring the national psyche even when nobody intended to do that. This is perfectly illustrated by the rousing effect that Gov. Sarah Palin had on the Republican convention in Minneapolis this week. On the surface, she outdoes former Vice President Dan Quayle as an unlikely choice, given her negligent parochial expertise in the complex affairs of governing. Her state of Alaska has less than 700,000 residents, which reduces the job of governor to the scale of running one-tenth of New York City . By comparison, Rudy Giuliani is a towering international figure. Palin's pluck has been admired, and her fort hr ightness, but her real appeal goes deeper.

The rousing effect...
The entire point of political conventions is to have a rousing effect. The only way you can see this as a bad thing is if you are making blanket judgments about the people who have been roused. If you believe that perhaps they are evil, or being incited to evil ends, then it is fair to question the rousing effect. Chopra is starting off with an assumption that doesn't speak very highly of his capacity for tolerance.

The complex affairs of governing...
I would imagine that the constitution of the state of Alaska, it's supreme court, its legislature, its executive branch are all sufficiently complex. If Chopra had passed the bar for practicing law in the sate of Alaska, or any state, I think I would take his argument more seriously.

She is the reverse of Barack Obama, in essence his shadow, deriding his idealism and exhorting people to obey their worst impulses. In psychological terms the shadow is that part of the psyche that hides out of sight, countering our aspirations, virtue, and vision with qualities we are ashamed to face: anger, fear, revenge, violence, selfishness, and suspicion of 'the other.' For millions of Americans, Obama triggers those feelings, but they don't want to express them. He is calling for us to reach for our higher selves, and frankly, that stirs up hidden reactions of an unsavory kind. (Just to be perfectly clear, I am not making a verbal play out of the fact that Sen. Obama is black. The shadow is a metaphor widely in use before his arrival on the scene.)

Anger, fear, revenge, violence, selfishness, suspicion of the other...
Suspicion of the other indeed. Setting up Palin as the reverse of Barack Obama is Chopra's choice, not Palin's choice. For him to read all this into Palin without a shred of evidence is wholesale character assassination.

Obama triggers those feelings, but they don't want to express them.
This is is what George Orwell called 'thoughtcrime'. Nice one Chopra.

I recognize that psychological analysis of politics is usually not welcome by the public, but I believe such a perspective can be helpful here to understand Palin's message. In her acceptance speech Gov. Palin sent a rousing call to those who want to celebrate their resistance to change and a higher vision.

Look at what she stands for:

Even allowing for Chopra's immense nerve for presenting what HE thinks she stands for without any reference to how she describes herself or how she is interpreted by her supporters, he obviously is the provincial one steeped in the ghetto where he turns the meaning of the following attributes on their heads.

--Small town values -- a denial of America 's global role, a return to petty, small-minded parochialism.

Small town values: Self-reliance, lack of pretense, community spirit, yet a willingness to sacrifice in military service for causes greater than oneself.

--Ignorance of world affairs -- a repudiation of the need to repair America 's image abroad.

Ignorance of world affairs? Like what. How can these dozen words capture anything more than a stereotype?

--Family values -- a code for walling out anybody who makes a claim for social justice. Such strangers, being outside the family, don't need to be heeded.

Family values are just that. Putting value on the family. It's not a code for anything. As a policy matter it means providing a framework for the support of the family. Is this so difficult to understand?

--Rigid stands on guns and abortion -- a scornful repudiation that these issues can be negotiated with those who disagree.

What rigid stands? ack..

--Patriotism -- the usual fallback in a failed war.

This phrase is so loaded it can't even support it's own proper punctuation.

--'Reform' -- an italicized term, since=20in addition to cleaning out corruption and excessive spending, one also t hr ows out anyone who doesn't fit your ideology.

Meaning you circulate letters demonizing your political enemies by suggesting that they are psychologically unfit for public service?

Palin reinforces the overall message of the reactionary right, which has been in play since 1980, that social justice is liberal-radical, that minorities and immigrants, being different from 'us' pure American types, can be ignored, that progressivism takes too much effort and globalism is a foreign t hr eat. The radical right marches under the banners of 'I'm all right, Jack,' and 'Why change? Everything's OK as it is.' The irony, of course, is that Gov. Palin is a woman and a reactionary at the same time. She can add mom to apple pie on her resume, while blithely reversing forty years of feminist progress. The irony is superficial; there are millions of women who stand on the side of conservatism, however obviously they are voting against their own good. The Republicans have won multiple national elections by raising shadow issues based on fear, rejection, hostility to change, and narrow-mindedness.

Obviously women are voting against their own good. Didn't Chopra just say that Palin was the shadow of Obama? Anyway, this is so full of stereotypes of Republicans that I really can't go on.

Obama's call for higher ideals in politics can't be seen in a vacuum. The shadow is real; it was bound to respond. Not just conservatives possess a shadow -- we all do. So what comes next is a contest between the two forces of progress and inertia. Will the shadow win again, or has its furtive appeal become exhausted? No one can predict. The best thing about Gov. Palin is that she brought this conflict to light, which makes the upcoming debate honest. It would be a shame to elect another Reagan, whose smiling persona was a stalking horse for the reactionary forces that have brought us to the demoralized state we are in. We deserve to see what we are getting, without disguise.

This is not political analysis, it is mumbo jumbo. I'm sorry I even began to attempt a critique of it. I can only suggest that it is little more than a thinly veiled character assassination of Palin and a stereotypical assault on the character of Republicans. He speaks of this state of demoralization 'we' are in, and places blame for it on 'reactionary forces'. Is this what psychology is supposed to teach us, that if we find the external causes for our own problems and demonize people associated with them that we break through? I don't think so. I think the man has taken leave of his senses. This letter is shallow and regrettable. It shows an inability to reconcile a 'woman' and a 'reactionary' and chooses to instead cast her as a blood and soil racialist among other pejoratives.

I've never been a fan of Chopra, but I've never considered that he might abuse his reputation in this way - for the sake of partisanship. It rather reminds me of the fact that Oprah too has refused to entertain the possibility of Palin being on her show. And so, there is the element of the self-fulfilling prophesy here as the authorities on self-help define Palin as beyond help and not to be trusted.