28 March 2009

New Math (A little comedy never hurt anyone)

25 March 2009

So much for Maryland NOT being the south...

For those of you who did not grow up in Maryland have to learn the words to "Maryland, My Maryland" in 3rd grade, let me give you a little crash course. It's the state song of Maryland, and it's a little, shall we say... outdated. (Not as much as the German national anthem, but that's a different story). Anyways, it makes several references to revenge on the patriotic gore that flecked the streets of Baltimore and basically challenges Virginia to a battle. Here's the kicker:

"She is not dead, nor deaf, nor dumb-
Huzza! she spurns the Northern scum!"

That's right- the Northern scum. Well, a committee of the Maryland House of Delegates thought that maybe we should make some sort of an effort to pretend that it's no longer 1861 and maybe be a little nicer to those yankee rebels and change the lyrics of the song. Well, for all of us Marylanders who have fought hard our entire lives to escape the stereotypes of being thought of as "part of the south" are out of luck- the bill was voted down and it looks like "Northern Scum" will remain a part of the Maryland state song. Wow.

Why don't they ever build the cool concept cars?

Hyundai is releasing a concept plug-in hybrid full of plant-based plastics and enough eco-crap to make a Prius look like a Hummer, and yet look at this thing. THEY'LL NEVER BUILD IT. Why? Seems like a good idea, and that would be a crazy decision.

23 March 2009

Dan Rather on Afghanistan

Dan Rather has spent three decades reporting on Afghanistan. He offers insight into the current strategy and where America can and should go in the coming years in order to create a stable Afghanistan.

$2000 Car, anyone?

Indian superconglomerate Tata released the world's least expensive car today, the Tata Nano. At 50 mpg and 33 hp this tiny little car will get your family somewhere, eventually, probably.

I kind of want one, I'm not gonna lie.

NYT Columnist Paul Krugman *Sighs*

In this morning's New York Times, Op-Ed columnist Paul Krugman hated on the Administration's toxic asset program. I suppose I can't blame him, it's way easier to make easy arguments than defend complex ones.

But when you hold a Phd. in Economics from MIT, and have been a distinguished academic at the London School of Economics and Princeton University, I expect you to use microeconomics and calculus to minimize the amount of fuel, calories and time needed to mow your own lawn, not to mention if you don't do your job, who else can the New York Times pay to tell liberals what to think.

Lets start with some basics. Lousy mortgages and other suspect financial instruments are being used to back supposedly high-quality bonds. Bond markets trade largely on information provided by bond rating agencies. A consumer will buy a mislabeled turd in a Tiffany's bag exactly one time before realizing there are better things to do with hard-earned money. Similarly, supposed "assets" have burned buyers in the marketplace, and without a source for accurate information, the market cannot correctly assign a price to these assets. Interestingly, Krugman seems to identify this, suggesting that no-one knows what the value of these assets are, but then retracting into his tortoise shell of paranoia, suggesting that no effort to pull these assets from bank balance sheets will improve the lending industry. I'll address each below.

Modern Economists believe there is a price for everything. The ability of that price to represent 'actual' value can vary according to availability of markets, clarity of property rights, or accurate information about what you are buying. Think about Ebay for a moment. You the bidder have a chance to participate in an excellent forum for developing price, and truth be told information plays a huge role on what you do or don't bid on. Suppose for a moment you would like to buy a Maserati. Two ebay listings catch your eye. One Maserati includes a real photo, mechanic's records, traffax vehicle history and the other post says one Maserati with a photo of a matchbox car labeled "artist rendering". Chances are, only one of those cars will sell for more than three years of law school tuition. Similarly, when thousands of mystery bonds are all labeled 'mystery' flavored, the market must know surely this bond tastes like something, but I'm not willing to risk ending up with black licorice again. But then, the government comes in and offers a loan guarantee and says, my boy, if you buy that bond and give it a lick, and its black licorice, I'll let you buy another one and we'll see how that one works out, all I ask, is when you score some strawberry, I get a lick. Then, the whole game changes. Moral hazard? Surely. But then again, lose your car insurance and you'll realize in 10 seconds how much moral hazard you store in your lead foot. If you don't think a distribution of risk adds marketable value to an asset, then you're probably dumb enough to think that warranty on your new car was "free" too.

So fine, lets say these assets fly off the shelves like umbrellas in Oregon, then what? Does the banking industry see any benefit? Or should we believe, as Kranky-Kurmudgeon would have us believe, that Sisyphus has a better chance of getting the boulder up the mountain? I'm not here to tell you its Oliver-the-omnipotent's terrific tonic of total market correction, but surely its worth something. For one, it ends the waterboarding of corporate balance sheets. When mark-to-market forces banks to post impossibly large losses on assets of questionable value, Banks are traded according to fear of the unknown. Fresh balance sheets will allow banks to re-enter the markets and participate as creditors backed by known value. This is exactly how the market treats you. Own a house? You can use it to access credit backed by the knowledge that you have a certain ability to pay. Own nothing and addicted to heroine? You probably have to borrow money from a loan shark who knows you can't pay, since no one else will give you money, you'll agree to anything. So unless you want Wal-Mart to post payroll by running down Johnny the Squeeler, we all have an interest in the restoration of credit markets.

Or, you know, you can just complain about stuff.

22 March 2009

Drink more, worry less

Every now and then there is a study that indicates possible severe health problems from drinking, but there are plenty of studies showing a strong causal relationship between moderate drinking and good health. Author and freelance writer Laura Fraser has done a little research on the studies and writes a short treatise in defense of her drinking habit.