Fidorants

The interesting and arguable about current events

June 1, 2009

What's Playing at The White House Theater?

President Obama is too busy to venture out to local movie theaters, but thanks to modern Internet technology, you too can watch what the Obama family is watching!

May 26, 2009

So who needs banks anymore?

Seriously, banks aren't lending cash, they're hoarding it. (Just ask any real estate developer. Banks already own too much real estate to bother with anyone who's going to build more.) And one view of the spread between the highest and lowest rates banks charge each other (LIBOR) as of this morning is the highest it's been in a long time (http://tinyurl.com/oefcdm), which means that certain banks don't trust others. Moreover, corporations are just bypassing banks altogether by issuing their own debt securities directly to other institiutions that have money and are willing to lend it. (http://tinyurl.com/pdlvwu). Even the Fed got into that game by announcing last October that it would begin purchasing these securities (http://tinyurl.com/4oo5nl).

So we have this huge thing called the internet and some are already using it to do the heavy lifting that the banks don't want to do. For example, microcredit concepts like Kiva Microfunds (http://tinyurl.com/34jlfd) are changing the way poor and rural people in foreign countries can now fund small businesses. And Virgin Money (http://tinyurl.com/ynpofp, another brainchild of Richard Branson) has set out to let borrowers craft their own private lenders - from those who know them best: friends, family and neighbors. In fact, that's exactly how banks became banks in the first place! They lent to family, friends and neighbors - because they knew them best.

So who needs banks? It's time real web pioneers took over the banking business. And that's a project worthy of stimulus. Are you listening Uncle B?

May 26, 2009

Who is Sonia Sotomayor?

Just who is Sonia Sotomayor? And what do we know about her?

Comments? http://fidorants.blogspot.com

March 27, 2009

Is It Me? Or Are Cops Getting "Ticket Happier"?

I don't know about you, but over the last couple of months I could swear I've seen more cops on the side of the road, sitting behind their easy (and highly remunerative) prey, effortlessly as ever extracting higher and higher sums from the wallets we clutch tighter and tighter. These traffic stops aren't the high-strung, low-ride, crooked-ballcapped, shiny-wheeled "cockroaches" hyperactively dodging between lanes that infuriate the other 99.9% of us: these are the "middle-laners"...everyday moms, dads, grandpas, GRANDMAs (!), neighbors, folks we work with, or go to church with. They're the ones driving with the rest of traffic - except maybe just slightly out front of it.

Don't get me wrong. I have no ax to grind here. Knock on wood, I haven't gotten a speeding ticket in more than 10 years. My record is clean. But whereas I might have gone several weeks between traffic stop sightings a year ago, it's dawned on me that now I'm noticing one every ten minutes or so - - no matter what time of the day or week it is.

In fact, I haven't seen so many cops since I realized that Dunkin' Donuts make you fat.

But why now?

In a word (or two or three), low hanging fruit.

That's it. The local politicians need to balance their budgets and doing it this way is SO much easier than raising taxes. (Of course, your elected officials don't feel your pain. How many local pols have you seen hauled into court within their own jurisdictions? They get a simple wink and "Sorry, Mr. Mayor (or Ms. Alderman, Ms. City Council... you get the idea), I didn't realize it was you [just minding your own business, taking your kids to soccer practice, heading home from work, and so on...]. Sorry to trouble you. Have a good day." Nope, they're "Dodd-ified" (which, since you ask, is a phenomenon named after Sen. Chris Dodd of Connecticut describing the comprehensive lack of accountability elected officials come to expect [but never acknowledge] upon taking office, eventually accompanied by the selective loss of memory and/or the sudden onset of episodic amnesia).

If you don't believe me, check out this study by the Federal Reserve of St. Louis on the correlation between local financial conditions and traffic law enforcement activities. According to The Fed, "municipalities have revenue motives for enforcing traffic laws in addition to public safety motives because many traffic offenses are punished via fines and the issuing municipality often retains the revenue...Our results suggest that tickets are used as a revenue generation tool rather than solely a means to increase public safety."

Who would have thought??

In its study, the St. Louis Fed found "a statistically significant increase in number of traffic tickets issued in the year immediately following a decline in local government revenue" and cites elected officials in Milwaukee, Houston, Nashville and Washington D.C. arguing on the record for increased enforcement as the answer to their "urgent" need to tap alternative revenue sources.

Bottom line, we better like "more government"....because no matter what you call it, this is a tax. And whether it's obvious or not, more and more government is what we're getting.

March 6, 2009

Markets are predictive given the totality of existing information... so was this Bush or Obama?

February 19, 2009

"Everyone loves income redistribution...as long as it's being redistributed to them."

   - Me

So here we are. President Barack Obama's $275 billion plan to help up to 9 million families with their mortgages would apparently:

(1) remove restrictions on Fannie Mae and Freddie Mac from lending when more is owed on a home than it is worth;

(2) create incentives for lenders;

(3) keep mortgage rates artificially low using taxpayer money;

(4) pursue "reforms" and award billions of dollars in competitive grants to communities "experimenting with innovative ways"
to "promote home ownership"...

Wait a second!!! Haven't we seen this movie already??

v

February 17, 2009

Did the market begin to discount an Obama Presidency as early as 14 months before it actually happened?

This chart shows the Dow Jones Industrial Average (DJIA) against the InTrade.com futures contract on Obama NOT being elected President of the United States. Clearly, as the chances of Obama NOT being elected declined, so did the stock market. Obviously, we can't tell whether the drop in the Dow caused Obama's election, or Obama's election caused the Dow to drop. But the very high correlation (approx. 83%!) is eerie.

Questions on the methodology? Please email me at phaeidaeux@gmail.com.

v

October 29, 2008

OK, let me get this straight....How did this happen again?

v

October 29, 2008

Did your congressman cause the financial crisis?

155 current members of congress prevented the states from regulating credit default swaps in 2000. Is yours one of them?

Look it up here...

v

October 27, 2008

 

Intrade.com (where you can see what the money is saying) is a futures
market for events. Interesting... and maybe the answer for "poll overdose"!

v

October 26, 2008

Isn't anyone a little bothered about PNC-National City?

Treasury invests $7.7 billion in PNC, which turns around and buys National City for $5.6 billion - mostly in stock. So far, so good - though I'm waiting to see whether any lending liquidity eventually gets generated by the Treasury investment, or our dollars simply fund PNC's dreams for "bigness"...

But what bothers me is that certain equity investment firms will cash out hundreds of millions of dollars for investments it now appears they should never have made in the first place.

October 16, 2008

The Financial Crisis - and what it means for Technology

For roughly the last 25 years, business has focused on growth - with technology its lens. As of Friday evening, September 12 2008, that focus turned abruptly to one of “all-out corporate cost containment." Until now, decision-support technologies (known as "Business Intelligence" and "Performance Management" systems in the IT world) have largely existed for the benefit of sales and customer-related growth-oriented activities. In fact, these environments lived on quite happily despite an uneasy, almost surreal, detachment from the world of true accounting debits and credits. As long as sales kept going up, conformity and harmonization between business intelligence systems and company financial statements “would always be nice,” but not critical. However, with cost containment now the goal, technical indifference to these less familiar (to IT, at least), perhaps less approachable financial accounting systems is no longer possible.  

As this dramatic upheaval in the financial markets sets the stage, we now witness a seismic and historic transformation from...

“Technology for Growth Enablement” (R.I.P. 1982-2008)

 to...

 
“pan>Technology for Cost Containment” (2009-?)"

        - Michael Zimmerman
          Business Intelligence and Performance Management Consultant

v

October 9, 2008

FOOD FOR THOUGHT... A theory for reversing the recession

Think about it. Instead of raising taxes on the wealthy, the government could give anyone who can afford to do so a substantial tax break for DESTROYING their major assets (houses, cars, computers, yachts, anything really...) as long as they immediately replaced them with newly-made equivalents of equal or greater value.

Let's use an analogy. Over the first three decades of the last century, wheat production grew faster than the population. Wheat farmers could earn a small fortune by growing more and more of it. City dwellers fled to the country to cash in on the riches. By the 1920's, a glut of wheat existed, prices dropped and farmers grew even more just to stay afloat. By the 1930's, grain elevators were stuffed full and crops were rotting, yet the American public was going hungry. Ultimately, the oversupply was corrected when the government paid (subsidized) farmers to plow their crops under.

Could that work on a similar scale today with homes, cars, or anything else where making it again would create jobs and opportunities?

For all the whining about how a foreclosure next door impacts the value of your home and how unfair that it is - I've never heard anyone complain when the next door neighbor's home went UP in price and "therefore my home got a bounce in value"!