Sunday, November 11, 2007


That's olio as in crossword puzzlese for mixed bag, not a typo ridden effort to evoke a disease nearly eliminated by the Salk and Sabin vaccines of my youth. Standing in long lines with my family waiting for sugar cubes dosed with the Sabin vaccine is an early, and essentially happy, memory. Did this distribution system contribute to the use of LSD among my peers?

Hey Candidate, I'm All Yours - Story on odd couple endorsements of questionable value (Pat Robertson - Rudy Giuliani) doesn't go far enough. Michael Jackson - Aqua Dots. Darth Cheney - Musharraf. Musharraf - Darth Cheney. Maureen Dowd (she might be a crook but she can make small talk with a cocktail in her hand) - Benazir Bhutto. Bill Clinton (shortly after meeting his wife) - Dennis Kucinich. Alberto Gonzales (unfamiliar with the Constitution) - George W. Bush. Angelina Jolie (it was too late to adopt him) - Barack Obama. Ho Chi Minh (he's one tough mother) - John McCain. Al Gore (he's the only candidate who really understands my Internet) - Ron Paul.

The Tables Turn for Dilbert's Creator - Any truth to the rumor that Scott Adams is introducing Rachel Ray as an heroic character in Dilbert? She takes over the company cafeteria, previously the purveyor of a select line of overpriced inedibles, and turns it into a gourmet paradise. Will this desperate effort to curry favor (not to mention lamb and chicken) and get some tips (asparagus, sirloin, hot) on running a food empire hit paydirt.

As Stagehands Strike, Shows Don't Go On - Photographer Sara Krulwich and Times editors send a not so subtle message that striking stagehands are the Grinch stealing the shows from this year's Christmas. (Sorry readers, the Times on-line ran a different strike photo - look at page 1 as you walk by the Newstand.) Meanwhile, Maureen Dowd lets striking SNL writer/performer Seth Myers take over her column, A Bite of the Bagel. Union propaganda? Maybe, but it's funny propaganda.

Subprime stories rear their ugly head thrice. Banks Said to Agree on Credit Backup Fund is the umpteenth story on this special fund that fails to explain what it will do. This item reports agreement of the three sponsors, JPMorgan Chase, Citibank and Bank of America on a simplified structure and notes that the fund is not funded (it will seek contributions) and won't save the special purpose mortgage bundlers who face death from the subprime crisis. OK, but what will it do? Will this fund ever really exist and actually do something, or is it just a PR gimmick to create a long running, confidence inspiring news story without actually doing anything? Countrywide's Chief Salesman and Defender gives CEO Angelo Mozilo a platform from which he blames special pressure from minority advocates for relaxed credit standards (yes, Angelo, we're sure this was a big factor in your credit review process) and demands a bailout. Help individual mortgage borrowers with government support? Maybe, in a very focused program. Help Countrywide with tax dollars? Sorry Angelo, you are on your own. Call those Big Banks, oops, we don't know what they will do, but we already know they aren't going to save you. Ben Stein is a funny guy who knows his economics, but he seems to be getting even crankier than me. It's Time to Act Like Grownups starts out snapping at mortgage borrowers, who have gains to match the huge write-offs reported by lenders. Correct in theory Ben, the borrower who defaults when he has borrowed to the hilt and can't make the payments when his adjustable rate moves up does have a theoretical gain equal to the amount of any debt he can't repay. He also gets to lose his home, which will be sold at a foreclosure auction in a buyer's market, producing less than enough cash to pay off his mortgage loans. Unless he has a non-recourse mortgage loan, the borrower will then get to struggle with the unpaid balance while he looks for a new home. Maybe this borrower made a bad decision, maybe he even blew his home equity on lap dances during a trip to Vegas, but he is not sitting very pretty right now and those unsold homes are a problem for everyone. Ben then attacks the Big Bank Boards that slept as this crisis was created, singling out both diversity appointments, who didn't have the competence to spot the problem, and Robert Rubin for criticism. First, not every board member needs to be an expert banker, although you need some. Second, any Big Bank board member who asked questions like: why are we betting so much on collateralized debt obligations? Is the high yield on CDO's in relation to our borrowing cost telling us there is risk here that we are not evaluating properly? Are we putting too many eggs into the CDO basket? What happens to our position if interest rates move up and real estate prices fall?-- Would have been told by the CEO: We constantly evaluate all positions including simulations on rising interest and falling real estate scenarios, the risk is hedged through derivatives, understanding risk is a core competence to which we devote significant resources, blah, blah,blah. The audit committee has a better shot at getting into detail on a risk evaluation issue, but even there it is very hard for a board member to question specific decisions if he's assured by management and outside auditors that there is an effective process in place. Some of those college presidents are smart people who ask good questions. If the model board is composed soley of bank experts wouldn't you get a dozen Robert Rubins, the same guy you flay in the next paragraph? Ben, if you want to get cranky, then whine about the huge compensation packages the departing CEO gets after wrecking the bank's balance sheet - even a college dean can understand that one.

In Serfs of the Turf, Michael Lewis makes a strong case for paying college football players, a case that proves too much. Let's turn major college ball into a professional development league for the NFL and let the colleges get back to education. Notre Dame's Fighting Irish become the professional minor league team the South Bend Fighting Irish, in a league with the Columbus Buckeyes and Ann Arbor Wolverines. Universities get fees for allowing the minor league football franchises to use their nicknames, mascots and stadiums plus a lucrative no-compete payment if they promise not to start a replacement college team as part of the deal.

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