Friday, July 17, 2009
While I recognize that the financial mess was primarily an inherited one by the Obama administration, we are not addressing the toxic assets that are still haunting the books of many financial institutions. Bad mortgages and a weak real estate market persist, and unemployment continues to grow. We may have forestalled the complete seizure of the financial system, but the structural weaknesses remain, and taxpayers are underwriting a postponement of a solution, benefiting financial institutions such as Goldman.
Paul Krugman at the New York Times makes these key points about GS’ earnings and compensation plans in his column, The Joy of Sachs:
First, it tells us that Goldman is very good at what it does. Unfortunately, what it does is bad for America.
Second, it shows that Wall Street’s bad habits — above all, the system of compensation that helped cause the financial crisis — have not gone away.
Third, it shows that by rescuing the financial system without reforming it, Washington has done nothing to protect us from a new crisis, and, in fact, has made another crisis more likely.
His conclusions are must reading. Wall Street seems to be calling the shots in Washington, all of this while reported unemployment flirts with 10% and with real unemployment substantially higher as dispirited workers who have given up looking for a job, or part-timers who want a full-time job, are not even counted. Sounds like a good time for record payouts at Goldman Sachs.
As Mary Elizabeth Lease wrote in the early 1890’s, “It is no longer a government of the people, by the people, and for the people, but a government of Wall Street, by Wall Street, and for Wall Street.” Hat tip: Got Shares? (GotShares.com)
Tuesday, July 14, 2009
Zero Hedge pointed to a fascinating interview between Nassim Taleb, the mathematician, hedge fund manager, philosopher, and writer, author of The Black Swan, and Rolf Dobelli “a Swiss novelist and entrepreneur." I read Taleb’s book earlier this year and while I had my own skeptical view of applying his philosophy to the investment world, I was impressed by his intellect and in particular his theory of “naïve empiricism,” a “natural tendency to look for instances that confirm our story or our vision of the world.”
So it is not surprising that I was immediately swept into this interview with Taleb’s statement “Newspapers have officially the right facts, but their interpretations are imaginary –and their choice of facts are arbitrary. They lie with right facts; a novelist says the truth with wrong facts.” In effect, fiction is a notch above “truth.” How often have I thought that while reading the novelists I’ve mention in this blog? How often have I felt that a novel was portraying the real world, the one I know and understand? As Taleb says, “Literature belongs to the holy. You can do fiction, nonfiction, a mixture, who cares. Literature is above the distinction. It is sacred.”
Monday, July 13, 2009
I’ve mentioned other blogs before (Financial Views from the Blogosphere), but those are investment oriented. Emily’s Telecommuter Talk is subtitled “Ramblings of someone who used to be a telecommuter and who now has grand delusions of being a writer” and Matthew’s Got Shares? (GotShares.com) is subtitled “Quiet Highway: Saga of a Gentleman. A blog about finance, law, and the journey of an amateur economist.” These two blogs couldn’t be more different, but here is what they share in common besides covering some of my main interests, literature, economics, and public policy: they are written with passion, honesty, and understanding. Although I have my opinions, I realize how much I have to learn from the blogosphere, and I am thankful that there is such an alternative place to turn to for information and opinions.
This “recognition” is a reminder of how far I need to go to improve my own contributions, and my blog’s features, and I’m sort of exasperated on our boat for the next couple of months, using wireless dialup, and dealing with a petulant keyboard, the cursor jumping all over the place like a jumping frog, while Google is pulling the plug on my music links. In other words, it’s going to be a painful period – improvements I need to make as well as planned postings delayed until I return to the Halcyon land of my desktop and broadband.
Friday, July 10, 2009
No doubt the newspaper industry is under siege, and is probably the most threatened during this Great Recession. But Gladwell’s scathing dissection of the YouTube “business model” points the way to the inevitability of two universes, a subscription model such as the successful Wall Street Journal, one that offers a level of professionalism or specialization people are willing to pay for and then the free one like YouTube, a commodity aimed at a mass market, supported either by advertising or by the provider being satisfied by cornering market share/eyeballs (Google in the case of YouTube).
The New York Times had attempted a subscription model for its Op-Ed Columnists, miscalculating that this is the unique value of the Times. That value, though, as with the Washington Post, is its gestalt and by charging for a part of the paper and not all is to devalue the sum total of its parts. Pay per view is not feasible but dedicated followers will pay for access to such well established icons.
Similarly, newspapers that do not have a national standing, have an opportunity to expand their coverage of local issues – to create the specialization needed to buttress their own brands. Of course, content is not the only issue, it is the subscription model itself. Giving print subscribers nearly free access to the on line version is one approach, particularly as technology such as the iPad become ubiquitous. The pricing of an online version (only) is the more critical issue for these publications, and that will be dependent on their own distinctive market position. The devil is in the details, but Gladwell’s article is a good reading.
Wednesday, July 8, 2009
Coffee House Press, the innovative US Publisher of Firmin, saw my blog piece on their book and asked if I would like to review the author’s forthcoming novel, The Cry of the Sloth (To be published Sept. 1). Sure, I said, thinking that I might be graduating from reading about a lovable rat to an equally lovable sloth, and sloths are much cuter to begin with, sort of an upside down koala bear. The advance copy arrived as we were getting ready to leave for the summer so I looked forward to kicking off the summer reading season with Sam Savage’s new book. Not only did I love Firmin, I was more than curious about the author as he is about my age and it brings hope to us old guys; who knows, there might be a first book in each of us still.
The Cry of the Sloth is an epistolary novel, set in a Midwestern town during the 1970’s, quite a departure from Firmin written in the first person by a very literary rat. It is the first such novel I’ve read since 84 Charing Cross Road, which is actually not fiction but an exchange of letters between a New York book buyer and an antiquarian bookseller in London. The one thing all three books have in common is that they are about the literary world, although the “Sloth’s” world is faux literary.
The “action” mainly unfolds by following our protagonist, Andrew Whittaker, over a four month period, through his letters and other miscellaneous writings, including his interpretations of his correspondents’ replies (in the rare cases when he received one), as well as just about everything else he writes, including fragments of a novel (“meant to be comic [but] it has acquired an overlay of desperation”), notices to his tenants of apartments he inherited (“Do Not Throw Cigarette Butts in Flower Pots”), apartment ads (“Enjoy a Family Lifestyle!”), grocery lists (“t.p”. – toilet paper being prominent on each), fragments of ideas for stories, and notes to himself.
Mainly, his letters are to the contributing writers of his failing literary magazine, Soap, A Journal of the Arts, of which he is the Editor, his ex-wife, Jolie, to whom he owes alimony and on whom he was obviously entirely dependent for keeping his life organized when Soap began, Vikki, a contributor and perhaps Soap’s only donor, creditors who hound him for money, the Rapid Falls Current, the small town newspaper with which he is at war, and successful novelists, some old friends who obviously do not answer his pleas to participate in a spring literary festival. He obsesses on the festival as his salvation, much as Gogol’s Akaky Akakievich saw his Overcoat.
It is a lonely, solitary journey, kaleidoscopic in nature so we, the reader, see only parts of the mosaic and always through the eyes of the 43 year old Andrew Whittaker. But through that prism we witness his slow slide, progressing through various states of mind, with his ranting and ravings, paranoia, even writing letters under pseudonyms to the local newspaper praising “That Andy is a quiet, dignified, private man,” and then responding to his pseudonym under still another one.
His obsessive compulsive behavior leads him to perform all tasks, explain all his actions in minutiae and repetitively, sometimes hilariously but always to the point of sadness. He becomes fixated on why there are no photographs of him between the ages of seven and fifteen in the family album, pursuing an answer from his sister, from whom he is estranged (what else), and from his dying mother who is in a nursing home. “If everything we do not remember did not exist, where would we be?”
While packing up his books he finds an encyclopedia of mammals and it is there he comes across the “ai,” a variety of a three-toed sloth which he sees as having a head too small for its body, “something I have thought about myself” obsessing to the point of having his head measured. But, he happily reports to his friend, Harold, that he moves his “…bowels once every day with clockwork regularity. I mention this because the ai shits and pisses only once a week.”
His wife has run off with an old novelist friend on a motorcycle who he remembers saying “she would never marry anybody as ambiguous as I am.” And there is an amorphous quality to Andrew and the novel itself, leaving the reader with more questions than answers, part of Savage’s intent.
Towards the end of the novel, he writes to Vikki “I have sunk back into all my old vices – slovenliness, sloth, and gargantuan pettiness,” perhaps his most insightful introspective epiphany. In the Christian moral tradition “sloth” is also one of the seven deadly sins, characterized by wasting away and entropy, the essence of Andrew Whittaker. The punishment in hell for such a sin is to be thrown into snake pits and, interestingly, he finds a pair of snakeskin boots in his basement, ones someone had accused him of stealing.
Savage’s writing is precise and engaging, weaving satire and pathos. He portrays an inexorable path for our protagonist, a fascinating, tragicomic portrait of isolation and personal failure, in the tradition of Gogol and Kafka. “All around me things are in decay, or in revolt. If only I could walk out of myself the way one walks out of a house.”
As Andy says at the end of one very long letter: “Imagine a man in a room talking about himself, perhaps in a very boring way, while looking down at the floor. And while he goes on with his monologue, which as I said is of interest only to himself, one by one the other people in the room tiptoe away until he is all alone, the last one shutting the door silently behind him. Finally, the man looks up and sees what has happened, and of course he is overcome by feelings of ridicule and shame. Maybe this letter is now at the bottom of your wastepaper basket, a tiny trivial voice in the depths of a tin well, rattling on and on.”
Are we still in the room listening to Andy? Yes, or no, Savage has established himself, with Cry of the Sloth, and Firmin, as an important “new” literary voice at the age of 67.
Monday, July 6, 2009
Microsoft has been called the Darth Vader of the software world but watch out, Google is gaining ground. I’m pretty POed at Google as I’ve relied on Google Pages to host music links for my blog, a process which, for the non-techie, is complicated enough, without Google suddenly pulling the plug on me. For months I’ve been receiving an occasional email from Google alerting me to their intention to “move” my links to a new location, “Google Sites,” implying this will be automatic without any concerns on my part. Nuts, I thought, still another thing to learn, but OK, I’ve gone this far and I can do that.
However, this is not going to be automatic by any stretch of the imagination and, contrary to previous communications, this change will apparently render my music links inoperative. Here is their most recent email:
Dear Google Page Creator User:
As was previously announced, Google will soon be discontinuing operation of the Google Page Creator product. We will be migrating your Page Creator sites over to Google Sites so that they continue to operate with no work on your part. However, we've identified you as using Google Page Creator to host files that Sites doesn't support. We are writing to inform you that, as part of this migration, if you take no action to address this, your hosted files will likely break. If they are important then we suggest you move them to a different hosting service.
Contrary to what was posted in the blog post, the shut down and migration of Google Page Creator has been extended and will begin in a few weeks.
Thank you for your patience during this migration.
The Google Sites Team
1600 Amphitheatre Parkway
Mountain View, CA 94043
You've received this mandatory service announcement email to update you about important changes to your Google Page Creator account.
Had I understood their intent months ago, I would have sought an alternative solution when I had broadband access. We’re now living on our boat and I’m dependent on a wireless dialup with slower speeds and bandwidth limitations. Therefore, these links will fail at a certain point. Thanks Google.
I’ve identified the music and their locations and here is a list, something I have to do anyway as a first step to address the matter:
Music: Annie’s Waltz. Location: Annie’s Waltz
Music: Ol’ Man River and Oh What a Beautiful Mornin’ Location He jes' keeps rollin’ along
Music: Not A Day Goes By Location: West Palm Beach Hosts Sondheim
Music: Smile Location: Music For Our Times
Music: Love is Here to Stay and Selections from Porgy and Bess Location: Practice Sessions
Once I find a solution to the problem Google is leaving me with, I will correct the links. In the meantime, they may not work. Sorry about that!
Wednesday, June 24, 2009
It goes on to note “industrywide, total compensation is expected to rise 20 to 30 percent this year, approximately to the levels of 2005, before the crisis, according to Johnson Associates, a compensation consulting firm.” It was during that time the instruments of financial destruction began to flourish, so why not roll back the clock to then?
Having run a business in both good times and bad times, we all benefited from the former and we all had to tighten our belts during the latter. Why should the financial services industry be except from the financial laws of gravity and why does the Board of Directors approve such policies while their shareholders suffer and their businesses take government funds? Bank of America and Morgan Stanley are also raising base salaries. Guess they too are concerned about “retaining the best talent.” All of this as unemployment rises -- where does this logic end? It almost seems like a back door form of price-fixing, as isn’t it inevitable that the expense of these coordinated salary increases find their way into the cost of financial products?
Juxtapose that to an article in the same edition of the Times: Despite Recession, High Demand for Skilled Labor. Some jobs such as registered nurses, geological engineers, and welders are going unfilled, even during the recession. These are jobs that actually produce something and are critical to our society. One might as well work in the financial services industry where compensation is immune to supply and demand.