The End: The era that defined Wall Street is finally, officially over — A long but fascinating article. “There’s a long list of people who now say they saw it coming all along but a far shorter one of people who actually did. Of those, even fewer had the nerve to bet on their vision […] In 2000, there had been $130 billion in subprime mortgage lending, with $55 billion of that repackaged as mortgage bonds. But in 2005, there was $625 billion in subprime mortgage loans, $507 billion of which found its way into mortgage bonds. Eisman couldn’t understand who was making all these loans or why […] That’s when Eisman finally got it. Here he’d been making these side bets with Goldman Sachs and Deutsche Bank on the fate of the BBB tranche without fully understanding why those firms were so eager to make the bets. Now he saw. There weren’t enough Americans with shitty credit taking out loans to satisfy investors’ appetite for the end product. The firms used Eisman’s bet to synthesize more of them. Here, then, was the difference between fantasy finance and fantasy football: When a fantasy player drafts Peyton Manning, he doesn’t create a second Peyton Manning to inflate the league’s stats. But when Eisman bought a credit-default swap, he enabled Deutsche Bank to create another bond identical in every respect but one to the original. The only difference was that there was no actual homebuyer or borrower. The only assets backing the bonds were the side bets Eisman and others made with firms like Goldman Sachs.”
Lesson From a Crisis – When Trust Vanishes, Worry — In 1929, Meyer Mishkin owned a shop in New York that sold silk shirts to workingmen. When the stock market crashed that October, he turned to his son, then a student at City College, and offered a version of this sentiment: It serves those rich scoundrels right. A year later, as Wall Street’s problems were starting to spill into the broader economy, Mr. Mishkin’s store went out of business. He no longer had enough customers. His son had to go to work to support the family, and Mr. Mishkin never held a steady job again. “We are facing a major national crisis,” as Meyer Mishkin’s grandson says. “To do nothing right now is to do what was done during the Great Depression.”
Scientists may have cured cancer last week – more on DCA — “Here’s the big catch. Pharmaceutical companies probably won’t invest in research into DCA because they won’t profit from it. It’s easy to make, unpatented and could be added to drinking water.” That’s right, there’s no profit in curing cancer, so the Pharmaceutical industry isn’t interested. Now, what was it you were you saying about letting corporations in the marketplace handle our nation’s heath care problems, rather than the government?
The corporate free ride — “Here is a crazy idea to address the United States’ gaping fiscal deficit: Persuade corporate America to start paying taxes. […] It is a uniquely American paradox. This country’s corporate tax rates are among the highest in the industrial world, yet the taxes that corporations pay are among the lowest. With an enormous budget deficit and pressing demands for better health care and other social programs, America can no longer afford free riders.”
Most companies in US avoid federal income taxes — We The People are such suckers. “Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, according to a new report from Congress. The study by the Government Accountability Office, expected to be released Tuesday, said about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period […] More than 38,000 foreign corporations had no tax liability in 2005 and 1.2 million U.S. companies paid no income tax, the GAO said. Combined, the companies had $2.5 trillion in sales. About 25 percent of the U.S. corporations not paying corporate taxes were considered large corporations, meaning they had at least $250 million in assets or $50 million in receipts.”
Cash Struggle Continues for Clinton, Filings Show — These presidential campaigns are the largest organizations with the biggest budgets with the most important goal either of these people have ever led. It’s fair to judge them on the results: “Mr. Obama is spending 75 cents for every dollar he is taking in; Mrs. Clinton is spending $1.10,” and has about $10 million in debt compared to Obama’s $660,000.
The Secret Diary of Steve Jobs: Monkey Boy’s three-legged race — “Ballmer said he loved when his rivals merged, because whenever the also-rans in any market start teaming up they might as well be waving a white flag. Because it’s over. You’ve beaten them. You’ve driven them to despair. They haven’t been able to beat you on their own; there’s no way they’ll do it together.”
Joyent switches to Dell servers solely because Sun makes theirs so hard to buy — “We’ve talked with all sorts of Sun sales people. They put us into a special group for internet companies. We have made personal appeals to senior executives at Sun (that generally are answered … thanks for that). We’ve passed out bottles of 18-year old scotch. But the fact remains: every time Joyent engages Sun sales, they can’t really sell me something.”
Casualties of the NFL — “An exhaustive investigation — including interviews with dozens of injured vets, evaluations of their medical charts and reports from doctors selected by the league, and conversations with critics of the Players Association in the medical and legal community — reveals a pattern of conduct by the NFLPA that denies former players the money they need and to which their injuries should entitle them.”
Apple Says Your Cash Ain’t Nothin’ But Trash — “Apple no longer accepts cash for iPhone purchases…” Well, that’s insanely innovative. A US based company refuses to accept what it says on my greenbacks, “This note is legal tender for all debts, public and private.” Soon we’ll probably hear about a new promotion for something like “Leopard Bucks,” which you can purchase from Apple with cash and use them purchase an iPhone.
Why Would Anyone Use Comcast? — We’ve heard they have bandwidth limits, and though they won’t tell you what they are, lots of people have been cut off. Now, we read they are combining with Symantec to filter email, including political content, in a manner that is apparently ripe for exploitation by political opponents.
Scrybe gets venture funding from Adobe, LMKR — “I’ve been on the beta list for some time and have been very impressed with the application they’ve put together.” I have as well, but they’ve taken a pounding for not rolling out quicker. It’s a great app, and hopefully this funding and support from Adobe will allow them to move forward.
The Once and Future Prince · “As recording companies bemoan a crumbling market, Prince is demonstrating that charisma and the willingness to go out and perform are still bankable. He doesn’t have to go multiplatinum — he’s multiplatform.”
Google: You ain’t seen nothin’ yet — “They’re looking to come in and completely usurp the telcos at both the business level and the consumer level.”
5 Reasons Not to Drink Bottled Water — “Bottled water is big business. But in terms of sustainability, bottled water is a dry well. It’s costly, wasteful, and distracts from the brass ring of public health: the construction and maintenance of safe municipal water systems.”
For Pornographers, Internet’s Virtues Turn to Vices — Perhaps the ultimate evidence of how the Internet can be disruptive to established businesses, even those who first profited from it.
Strategic incompetence isn’t about having a strategy that fails, but a failure that succeeds — “The inability to grasp selective things can be very helpful in keeping your desk clear of unwanted clutter. I have developed a very agile selective memory across a wide range of nonvalue-added activities.”
Menu Foods CFO Mark Wiens Sold Half His Shares 3 Weeks Before Recall — “Here’s another horrible coincidence: Menu Foods also waited three weeks after discovering the kitty and doggy deaths before announcing the recall.” Bastards.
This is how you respond to the RIAA — “Your client take the position that my middle-aged, conservative clients should speculate regarding the identity of persons your clients’ claim used their AOL account to download pornographic-lyric gangsta rap tracks as predicate to possible case resolution. In an age of Wintel-virus created bot-farms, spoofs, and easily cracked WEP encrypted wireless home networks (among other easy hacks), the only tech-savvy response to such a request is, ‘You’ve got to be kidding.’”
Paul Palubicki ... has a resume. He’s soon ending a long career in the USAF. Their loss can be your company’s gain.
The old Arbitrary Secondary links archives (1/2003-11/2005) are still online