Yet More Navel Gazing

There I said something judgmental.

Don't act so suprised ;) If you don't know about the details, go read some at WSJ or NYTimes. You don't get to have an opinion if you don't know what the bill is for.


My congressman, Cliff Stearns, voted against the bailout today. Why? According to the republican beauty queen who answered the phone it was because Congressman Stearns 'doesn't want the government to be in the banking business." If the government had paid more attention and been 'more in the banking business' we wouldn't be in this mess today. As it said in the New York Times:

After long favoring a hands-off approach and deregulation of the financial industry, the Bush administration has found itself in recent weeks interceding repeatedly in the private market to try to avert one calamity after another.


The bill would have opened up 350 billion dollars so that the treasury could start buying up some of the horrid foul MBS that are blocking up the credit systems. The republicans got their insure the securities idea (in spite of its cost to taxpayers) in there and got rid of much of the Main Street protections (Allowing bankruptcy judges to restructure mortgages in their courts). Executive pay was going to be capped (a concession from the administration)

Very few Republicans voted for it. Representative Darrell Issa, a Republican, said he was “resolute” in his opposition to the measure because it would betray party principles and amount to “a coffin on top of Ronald Reagan’s coffin.”


Party Principles?!? What about what's best for the American people? And who the hell cares what Ronald Reagan would think about this?

My representative voted against it because he's opposed the government fixing the mess its caused. Congressman Stearns either doesn't understand how serious this is or his worried that his constituents will view it as Wall Street welfare. Either way, he needs to man up and pass this poo sandwich.

We all have to take a bite...for years we've been so caught up in the culture wars (gay marriage, abortion, prayer in the schools) instead of how both parties have been allowing greed to go unchecked. Instead of looking for smart people to run our government we care more about their hair, what sports their kids play, and how often they go to church.

Look how well its paid off!

This financial bust thing? Maybe its not all my fault but I played a role in it.

Back when I was a grown up, I worked for prestigious financial news company. The first project I was on involved creating a database that allowed large commercial investment banks to track and package mortgage backed securities. The package was sold to Bear Stearns and Lehman Bros. when I was there.

Did you catch that phrase, “mortgage backed securities” Good, I knew you would. The short version of how they work is that an investment bank would bundle a group of mortgages together, divide the pool into strips (for example: year 1 and so on) and then sell the strips to institutional investors (like CALPERS). Strips for more recent years were considered lower risk while ones out at the 25+ year mark were thought to be higher risk (people pay off the mortgage early or sell the house and move). The database I helped develop allowed the investment banks to track and bundle all sorts of mortgages (residential and commercial).

The government placed regulations on banking institutions during the Great Depression because of the numerous bank failures. Congress passed the Glass-Steagall Act that created the FDIC (the people that insure your bank deposits up to 100K) and created strict divisions on what different types of banks can do. The big change happened long after I left said company. In 1999, the bank restrictions were largely removed and one of the areas dramatically affected was that of the mortgage backed security industry. Commercial banks could now underwrite and trade debt obligation securities (like mortgages). That meant a whole lot more players in the mortgage backed securities pool.

Money flowed into the housing industry. Because mortgage brokers and smaller banks were no longer on the hook for 30 years, people who never could get a mortgage before were signing on the dotted line for no documentation, interest only mortgages. A real estate agent friend of mine had someone buy a $500K listing with $40K income! What bank thought the buyer had a hope in hell of paying it back? What did the bank care? The mortgage was going to get bundled with others and sold anyway. Commercial banks clamored for more mortgages and local banks provided.

Kaboom! It couldn’t last. With the rising costs of food and fuel combined with ARM’s coming due, people couldn’t pay. It didn't help that there are other debt oriented securities...but peoples lives don't fall apart the same way when they lose a car as opposed to their hosue.

Deregulation caused this, people! And my little database helped it along…..Next post: Why 700 billion really isn’t that much and how the US taxpayer may end up ahead.

Registering at the NYT is free and you need to read this.

http://www.nytimes.com/2008/09/11/opinion/11Cohen.html

Last night, DH and I watched No Reservations with Anthony Burdain (sp) who was in Tokyo. If you haven't seen the show, Anthony (a former head chef) goes around a city..sees the sights and eats local food.

So, when he's in Tokyo Anthony visits places like a soba noodle house where they make their own noodles...a knife maker...the ultimate sushi guy, and a flower arranger to learn about the Japanese way of doing things.

The common thread of all of these sites was the idea that in spite of precise attention to detail, none of these people felt they had mastered their trade even after 50 years of doing so. Soba noodle guy said that after 20 years of making noodles, he's still learning. Sushi man said that there is no such thing as the perfect sushi...there is always the way to make it better.

DH and I watched this show after our dinner out where DH told me about the 'Kaizen Events' at his manufacturing employer. They throw some engineers in a room for a few days..they think up some process improvements...and they go back to their jobs. Kaizen is about ongoing incremental improvement...not throwing out ideas.

Americans don't get the concept of Kaizen. The end result is not the goal. It's the journey to the unobtainable goal of perfection that is the focus. We, Americans, focus on getting it done and moving on....so we don't have the attention to detail because the process itself is unimportant. Our leaders; military, business, or educational, teach us to take the hill any way we want to.

I'm not sure one way is always better than the other...balance almost always leads to a better result. But the concept that the journey itself is valuable is a lesson I'm trying to learn (and teach to my children)

I was trying to free up some storage area on my phone tonight and came across a setting that told me how much time I've spent on my cell phone.

Incoming? 192 hrs

Outgoing? 75 hrs

It seems that people call me more than I call them...that's because I feel strange about calling people.

That's a lot of hours but I've had the phone for 3 years

Doing our patriotic duty this weekend involved an impulse purchase of a Wii at Costco. Impulse purchases used to be cheaper (pack of gum) but this one was over $300. It had extra controllers and the packaged games were both ones we wanted...so it worked out.

The sports stuff is really fun...and I'm beat. Literally....lower back pain, right shoulder pain... I've been running but that only works the lower bits. Ben keeps kicking my rear at boxing but I can still take him out in tennis and baseball.

I bought more games (of course!) including Trauma Surgery...LOVE IT. We also got the crossbow shooter game which has unleashed a torrent of competitiveness in our household. Who knew people could get so worked up about killing the undead?