AllupInyourBiz

It seems the rest of the world may be catching on to the walnut shell shuffle our economic policy has become of late.

After a speech given today at Peking University, Timothy Geithner fielded questions from an audience of university students and was greeted by laughter. “Oh, goodie”, he thought, “these students accept me and love me as one of their own. It’s just like when I studied the Chinese language here in the big 80s.”

And then he remembered who he is: 1. the U.S. Treasury Secretary during the worst crisis we ever hope to witness; 2. the former head of the Federal Reserve Bank of New York.

And who he is not: anyone funny.

I don’t know. I think that, being a member of that zany handful of current policymakers who presided over and/or actually enacted the policies that attributed to the current mess, TG should demur from making assurances to our largest investor that everything’s fine. It might damage our collective credibility. Or elicit mocking laughter from college kids.

I’m doing my best to (a) live fast, (b) die young and (c) leave a good-looking corpse. Between you and me, though, I may have exceeded the due date on (b) and I never had a chance at (c), despite what my mom and busted ex-girlfriend tell me.

Perhaps “slow and steady wins the race” is a more dependable motto by which to live. I don’t know. But at least with this motto I won’t know whether I won for a long time. Of course, some of my former fast living will no doubt shave the waiting time down a bit. Oh, goodie.

But I’m definitely thinking I could coast a while on this treadmill. Take it all in, travel a bit, settle down with a dog and a wife and a couple of ankle-biters until that sweet day I turn 65. On that bright day, I imagine myself rising from bed later than usual, lounging around in a fluffy robe and sipping on a cup of fresh joe before strutting out to the mailbox to retrieve the first of a long series of checks issued to me by the Treasury. Really, that’s my dream. And it’s yours, too. It’s what we live for, silly.

So I get a bit anxious when I pick up a newspaper and read things like the following:

“The trust funds — which exist in paper form in a filing cabinet in Parkersburg, W.Va. — are bonds that are backed by the government’s “full faith and credit” but not by any actual assets.”

Ruh-roh. Stay tuned . . .

 The shiny walls and spotless trains of the New York subway system attest to the brilliance and competence of the MTA officials who so efficiently operate those lifelines of the city (was the sarcasm in that sentence come through thickly enough?) They recently announced that since a financial bailout from the government does not appear to be forthcoming, they will be forced to raise the subway fare from $2.00 to $2.50, a 25% increase in one shot. Needless to say, the announcement has provoked plenty of outrage.

But the MTA has been buttering up subway riders for months, wasting valuable advertising space in the subway cars with silly propaganda to remind them just how good they have it. Consider the following gem, which has perplexed me for several months:

“In 1986 the subway and bus fare was $1. That’s $1.89 in 2008 dollars. Today 30-day Unlimited Ride Metrocard brings the fare down to $1.17. Believe it.”

Oh, I believe it. I just can’t see why this is something the MTA would brag about. They’re not comparing apples to apples. They are most likely trying to advertise the 30-day Unlimited Metrocard, which was not available in 1986 (began selling in June 1998). That tidbit is not widely known, though, so it really just tells us that the single-ride fare has risen faster than inflation ($1.89 in 1986 vs. $2.00 in 2008). That means if you don’t get the unlimited card, you’re getting screwed out of 11 cents with each ride!

The failure to state the assumptions on the $1.17 calculation also displays some intellectual dishonesty. To be sure, the $81 price tag for a 30-day card is a good deal for many people, but you only get down to $1.17 per ride if you use it 70 times in a month ($81/$1.17). I would think a more conservative estimate would have been 60 rides per month for most people (to work and back and some round trip on weekend days on each of the 30 days). This brings the cost to $1.35 per ride. Doesn’t look as good on the poster, though, I guess.

Yeaaaaa to Shell and Gasprom!! These backers of the Sakhalin Energy consortium agreed to suspend seismic exploration in Russian waters. Recent research shows that the noise from the gas and oil exploration scares the whales into waters too deep for their calves to feed and flourish. It is hoped that ceasing the cetacean-irritating sounds will allow the gray whales, one of the world’s most endangered species, to get it on more peacefully.

Booooo to BP, Exxon and Rosneft, who still plan to do seismic work in the area. Blubbering idiots…

The New York City Department of Education is vigorously pushing an ad campaign to raise awareness of their successes. Given recent budget cuts he ads have inspired some clever parodies. While I am not familiar enough with the NYC public school system to critique it or comment on the validity of the advertisements’ claims, some of the ads seem a bit dubious to me. For example:

“Because every voice counts, New York City surveyed parents, students, and teachers about their schools — and 800,000 responded.”

That’s wonderful that they had such a great response rate (actually, providing the actual rate as a percentage would have been more meaningful), but I would be more interested to know what the responses said. I’m no survey expert, but if people are like me, they only respond to surveys in one of the three scenarios:

1) They are rewarded for doing so (given the Department of Education’s budget constraints, something tells me those 800,000 surveys didn’t go out with dollar bills attached)

2) They are extremely pleased with something (I just can’t see 800,000 New Yorkers beaming about the public school system so much that they would jump at the opportunity to give it a glowing review)

3) They are extremely dissatisfied with something …

So it appears that 800,000 New Yorkers responded that their schools stink — but what a response rate! Way to find the silver lining, DOE.

Spam’s annual contribution of Carbon Dioxide tops 17 million tons. That’s what they say, my peeps. As you can imagine, a tsunami of sadness washed over my blood-drained face upon learning this. I LOVE Spam. AND carbon dioxide is my favorite greenhouse gas.

Upon second reading, however, my sadness lifted 50%. Apparently, the villain is not canned ham (which, as you may know, I couldn’t live without for more than a week or so – my body has become so used to elevated salt levels that homeostasis means high blood pressure). No, a far more insidious perpetrator is at work here. That’s right, buckos. You’ve guessed it: unsolicited electronic mail.

17 million tons is a whole heckload of stuff. Imagine 17 million tons of anything. Anything at all . . . it’s a lot of stuff, right? For instance, I just imagined an olympic-size pool brimming with whatever it is that momma birds chew up and spit into their chicks’ mouths. Trust me, 17 million tons is a lot.

The theory is that the time spent working on a machine while sorting through emails uses up electricity, the generation of which produces carbon dioxide emissions.

Reasons to be skeptical about this factoid:

1. Empirical evidence. How is it possibly, possibly gathered?

2. Who personally sorts through all of their emails? I don’t know about you but about 0.01 % of spam gets past the filters on just about any email client I’ve ever used. And Gmail is remarkably efficient.

3. The math necessary to convert time spent at a computer to carbon dioxide emission just seems fuzzy. Or maybe I’ve had three too many lattes again . . .

4. Last but not least, McAfee and Symantec (biggest producers of spam filtering applications) were sponsors, if not authors, of this study . . .

This PC World article highlights, better than I possibly could, the absurdity of this news item: PC World’s Take, Y’all

You may know mercury as the most villified of the metals. The metal plaquing pelagic species like tuna and swordfish and wreaking havoc on the brains of humans, as well as the theatrical acting career of Jeremy Pivens.

Or, perhaps, you know mercury as the only metal that exists in the liquid state at room temp. All other metals are solid at room temp. Right, NERD?!

If you are lucky, like me, you may even know mercury as those cool quicksilver globules that streaked from the thermometer afer you dropped it on the linoleum. It looked so cool. You just had to scoop it up and cradle it in the palm of your hand. And that’s how, at age 13, I earned the nickname “Mad Hatter.”

But have you heard about Red Mercury? You know, that mythically elusive/elusively mythical substance able to ward off evil spirits, find treasure and make nuclear weapons…

Well, recently some joker in Saudi Arabia decided: “I want to play a trick, a really good trick”. Rumors were spread on the internet (and on the streets) and next thing you know tailors’ shops are being looted and the price of an old-ass Singer sewing machine is inflated to 50 large.

It seems determining whether your granny’s sewing machine contains the miraculous red metal is as easy as firing up my trusty motorola razr and holding it close to the machine’s needle. If the line cuts out, it’s time to melt that baby down. Or smelt it. Whatever that means.

Sophisticatos like you and me can laugh at the naivete of our middle eastern buds, but it’s likely some scoundrel planted this rumor to capitalize on a a version 1.0 of the “pump and dump” scam. Some scoundrel with a stash of Singers. Victims include the more impoverished Saudis who ran through their cell phone batteries in record time. And that ruffles my feathers.

It blows my mind that in these modern times, piracy on the high seas can still be such a profitable endeavor. Apparently, however, it is. This week a Maersk freighter carrying aid to a Kenyan port, was taken hostage off the coast of Somalia. According to the NY Times, this the Sixth commercial ship this week, that has fallen prey to the Somali pirates. This year there have already been 50 ships hijacked in the area. The last such instance that gained a lot of media attention, was a Ukrainian freighter loaded with tanks and arms that was seized last year. GQ published a pretty interesting piece outlining that incident, as well as the M.O. of the Somali Pirate business.

In most cases, the crew of the ships are never injured, and the family/owner of the ship end up paying large ransoms to have the crew and ship released. The distinction in this instance is that the crew happens to be American, and the ship is registered in the United States. It will be interesting to see how this plays out.

While patronizing one of my favorite streaming web radio sites, today, I happened to see this ad for Life Lock. What the crap? Ok, lets start with the name. I can understand that you want to choose a name that denotes some type of security, and conveys that image to your clients. But I feel like “Life Lock” misses the mark by a long shot. Maybe it’s just me, but “Life Lock” sounds like a synonym for house arrest, or worse.

Next: What is up with the graphic? Some guy handing over his social security card? “Here you go, hold on to this for me. ” Sorry to get down on your ad campaign, Life Lock. I just don’t see a market for people looking to hold people’s social security cards while they are on house arrest. Although, I could be wrong. Have you solicited the Madoff Clan?

The chart above is a reminder of the good old days, before Toxic CDOs and Rumors about S&P, Moodies and Fitch running a huge scam. Before today, I was convinced that the CMBS market was all but dead. Honestly, I’m still not entirely convinced otherwise. Honestly, in the market lately that is the news that I expect to hear, day in and day out. Every once in a while there is a little blip of positivity that shows up on my radar. Yesterday when the DJIA broke the 8000 point threshold, for example. Well, today, for the second day in a row, I came across another such blip.

Commercial Mortage Alert, a weekly publication dealing with Real Estate Finance and Securitization, as you can imagine, has had nothing but doom and gloom to report for the past several months. The first article in today’s issue is titled “Treasury Plan Seen Spurring CMBS Sales.” At first, I thought that maybe I had misread, or that it was an April Fools edition.

As I made my way through the article, is was clear that author really was making a case for an upswing in CMBS activity. The article claims that

Veteran commercial MBS investors think there’s a reasonable chance that the US Treasury Department’s new toxic-assets programs will drive up prices enough to encourage institutions to unload their holdings of super-senior CMBS.

The idea is that the Treasury’s plan will offer rates enabling leveraged returns in the neighborhood of %15. The article suggests that if the analysis is correct, “the CMBS market is in line for a major rally.” Major rally? Those are not mild terms. Right or wrong, it was extremely pleasant to read this positive projection. Here’s hoping for many more of the same.