Some Scattered Thoughts
to wrap up the old year
Essay Posted January 1, 2008 by James E. Nelson
It’s hard to put my nose to the grindstone over the holiday break, so I’ll settle for some disconnected mental flotsam and jetsam that has washed ashore the last couple of months, none of which is long enough by itself to warrant an essay.
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We had our first ice storm in Sioux City in early December. It was a doozy.
[The audience responds: “How bad was it?”]
It was so bad that they even cancelled bingo at the river boat casino.
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Chris Mayer, a financial market analyst, was recently in India looking for investment opportunities on the subcontinent. He reports that there is an acute shortage of motels in India. So, all you Americans who can’t find work, there are fabulous opportunities in India running motels and mini-marts.
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File this under, “This is so criminal, these guys should be flogged.”
Goldman Sachs has one of the biggest exposures to the sub-prime loan vehicles called SIVs in the industry, yet they actually made money in 2007 (in contrast to Citibank, UBS, Countrywide, etc. who managed to lose billions in the debacle.) Everyone who pays attention to this stuff has been wondering how this was possible. Well, the spokes-folks over at Goldman Sachs let the cat out of the bag. As Porter Stansberry reported back on Dec. 5,
As it turns out, according to a company spokesperson, Goldman Sachs “routinely shorts the securities it underwrites.” We'll leave you to ponder the ethics of this admission. Meanwhile, we'll ask the obvious question: Why would anyone do business with these firms, under any circumstances?
Let me translate that into street language. Goldman assumed, before they ever created these exotic investment products called SIVs, that these were probably going to be worthless investments and both Goldman and Goldman’s clients were going to lose a boat-load of money, so along with creating the SIVs, they bought positions which would allow them to make huge profits if and when the SIVs lost money. Doing this is not technically illegal, but it is immoral as all get out.
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My passport sets off the metal detector at nearly every airport. The TSA officials say that’s impossible, but every time they pass the magic “terrorist-be-gone” wand over it, the wand starts squawking. I had no idea passports were so dangerous. They might be as dangerous as those little bottles of water the TSA doesn’t allow through the gate.
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Oh yeah, another thing about the subprime mess. Don’t understand it? Follow this link to a video of two Brits explaining the whole thing. It sounds utterly absurd and it is hilarious in its absurdity. Sad part is, it’s absolutely spot on. The truth of the matter is that the subprime debacle isn’t so much a financial disaster as it is a financial absurdity.
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| Photo by Brenda. |
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The two prettiest moments of the year are sunset in Autumn, when everything is cast in yellows, browns, umbers, and blacks, and sunrise on a winter morning when all the trees are coated with a layer of frost, and the world is a pale pink, blue, and glistening white.
But this does not make white-flocked aluminum Christmas trees acceptable.
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Overheard at a recent hocky game:
Notice how the kid with the snow cones always starts around the stands shortly after the Zamboni gets off the ice?
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And finally, I went to the hardware store to purchase some lead weights for a project I was doing, but I had to return them for a refund. It turns out they were made in China and they had paint all through them.
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