Monday, February 18, 2008

SAR #8050

Government : those with a monopoly on force.

They Won: The terrorists have long since won. Giving up our Constitutional rights was not enough, now we are spending billions on SWAT team gear for the small towns in America while our roads and bridges and parks and healthcare fall into ruins . We give billions to subsidize impractical ethanol production at the cost of food, clothing, and shelter for our homeless. If it was about values, we surrendered.

Dumber: Housing became a Ponzi scheme when the bank and the borrower both bet the house would appreciate enough so refinancing forever would keep the loan afloat. So too did corporate bonds when their ever-rising "value" in the slice and dice pit allowed the interest due to be paid by issuing yet another bond.

Rehearsal: Harlem's 94th District is pretty black, yet Obama got zero votes there, or in 80 other polling places in the city. The proposed solution is to buy new electronic voting machines. It's November 4th; do you know where your vote is?

Econ 201: Credit Default Swaps: A way of speculating on the ability of a company to pay its bonds. There are $45.5 trillion of these bets. The total market value amount of the underlying bonds is $5.7 trillion. For example: There is $1 trillion in swaps bet on GM, yet its entire market value is $15 billion. When Delphi went bankrupt, the credit default swaps were ten times the value of the underlying bonds. If only 5% of all corporate bonds fail during this recession, nearly $3 trillion in losses will follow. Who's watching the children?

Obese : The population grows each year; our land remains the same and our resources diminish. To maintain our consumption-based society, we import 65% of our oil, borrow $3 billion a day, including $400 million to pay the interest on the national debt. Growth is the basis of our existence. More people, more consumption, more oil, more imports. How much longer can you hold your breath?

Under-served: The Grameen Bank became famous for its "microfinance" approach to helping Bangladeshi women start small shops and home-based production. The bank, which started with $27 and now has over $6 billion in assets, has opened offices in NY and so far has loaned $50,000 to immigrant women in the city. They were not Citibank customers.

Job Security: The Holy Grail turns out to be splitting the monoline insurers into 'safe' and 'disastrous' halves. The trouble is that this tramples the rights of the shareholders, of the insured, and of those stuck with the bad paper. These days, when you rob Peter to pay Paul, Peter gets a lawyer. Usual prize goes to the closest estimate, in whole years, that the litigation will last. Bonus points for the number of lawyers involved, to the closest 1,000.

Cradle of Civilization: Ten million children under age five die every year from preventable causes. Five million people were killed in the Congo over the last decade and no one noticed. People all over the planet are suffering. It's an uncaring world, and the sun will come up tomorrow.

Sunday School: After the recall of 150 million pounds of tainted beef, Hallmark's CEO said "Hallmark has never been found in violation of USDA rules." When it was pointed out that as recently as 2005 Hallmark was cited for several violations, he added "We certainly wouldn't have failed to disclose that, if we knew it was in the public record."

Fries With That? In London, Italian restaurants are warning customers that spaghetti may soon be off the menu. Blame falls on Italian farmers, who used to grow the durum wheat UK pasta was made from. Now the farmers are cashing in by selling it for biofuel.

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