American Art Museum & Portrait Gallery, Part II

American Art Museum & Portrait Gallery, Part III

American Art Museum & Portrait Gallery, Part IV

These are pictures from the third floor of the museum. This used to house the U.S. Patent Office many years ago. This is an exhibit on champions from various fields of sports. There was also an exhibit on famous entertainers.























Here are Ed and Jennifer looking at the gallery.

The Reason People Hate the Bailout

This story about AIG is why people hate the bailout.

It seems that:

just last week, about 70 of the company's top performers were rewarded with a week-long stay at the luxury St. Regis Resort in Monarch Beach, Calif., where they ran up a tab of $440,000.

Essentially they went on this thing the American taxpayers dime.

And then there was this from a hearing in Congress:

Over and over, the committee members vented outrage at having the federal government bailout the company, referring frequently to their angry constituents. But neither of the men acknowledged making any mistakes.

"Looking back on my time as CEO, I don't believe AIG could have done anything differently," Willumstad said.

Sullivan blamed "a global financial tsunami" and the "mark-to-market" accounting rules, which require businesses to value assets at market value, even if no sale is imminent.

In other word it was everyone else fault but mine.

This is what is going to make people really pissed off about the bailout. And they should be pissed off. The problem is will this sour their views towards what the rest of the government is attempting to do to solve the crisis.

Right now it seems one of the greatest problems with this financial crisis is the psychology of the whole thing. It can become a self-fulfilling proficiency. People stop spending money because they fell like they can't afford things. They don't buy the car. They don't by the computer. They cut back on what they spend in general. This causes those companies where the products are made to cut back. It becomes a vicious cycle.

The big question right now is how to break that cycle.

We Really Need Something to Smile At

Gee I didn't want a 401k plan anyway. At least one that was worth anything.

Well another fun day. I thought we really needed something to smile at. So here's a double dose: a Peanuts cartoon and some pictures of Sam.

Bailout Blues

Or maybe it's bailout hangover. Whatever it is things are sure on the skids. I've started to receive my quarterly financial reports in the mail. Glad I'm not planning on retiring anytime soon because I couldn't. My joke is I'll be working after I'm dead which may not be that much of a joke anymore.

As wild as the stock market was today that's not as important. Something behind the scenes is a much better indicator of how the credit market is doing. It is called LIBOR. It stands for the London Interbank Offered Rate. The LIBOR is:

An interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market.

The LIBOR is the world's most widely used benchmark for short-term interest rates. It's important because it is the rate at which the world's most preferred borrowers are able to borrow money. It is also the rate upon which rates for less preferred borrowers are based.

Friday the LIBOR rate was at 4,33% a nine month high. Monday it was at 4.29%. Not much of a movement at all. If money is going to start moving again, if credit is going to start to be given again then this number needs to come down and come down a lot and come down fast. That is probably not going to happen.

There were reassurances from President Bush calling for patience. Probably the last person anyone wants to hear that from. Bush said in part:

"I believe that in the long run, this economy is going to be just fine," Bush said. In the short term, he said the Treasury Department must go about enacting its plan to buy up troubled assets from financial firms so that credit will start flowing again to consumers.

And that's something else that has to be done as quickly as possible enacting the plan or the markets are just going to fall apart.

To take a quote from All About Eve: Fasten your seatbelts, it's going to be a bumpy night! Only I think the bump is going to last a lot longer than one night.

Cleaning, Cleaning and more Cleaning

I'm cleaning like mad because Ed and Jennifer will be out here for a visit starting Wednesday afternoon. I've shampooed the carpets downstairs and in the room they will be staying in. About all I did on Sunday was clean. The house is finally shaping up but it was a struggle.

To really get a room clean especially when shampooing the carpets you have to empty it out. All the stuff of course ends up in the next room. The room you put all the stuff in then becomes a complete mess. I started cleaning in the living room. All I have to move there is the coffee table. I guess I should say all I decided to move was the coffee table. Pretty easy to do. I just moved the table into the dinning room. No problem. Vacuum, shampoo and clean the carpet. Easy.

The dinning room is another matter. There's the table and chairs and the chair for my desk. There was a small book case. There was the plant stand. I decided to just leave that in place. All these thing end up in the living room which of course now is a complete and total mess. Everything is now back in its proper place. What I've learned is to do the dinning room first.

The final task I have to tackle is the kitchen. I'm probably not going to touch that until Tuesday night. Cleaning the kitchen I've always found to be a pain. No matter what I do I never seem to be able to get the whole thing clean. And the floor in the kitchen is a huge pain. There is for lack of a better way to describe it a light brown swirl in the pattern for the floor. Many times I'm trying really hard to get out a stain which in fact turns out to the the damn tile. Thus the reason for leaving it for last.

Upstairs I need to move bike and the litter box out of the front bedroom where they will be sleeping. Then I have to inflate the bed. Sam will help me out with that. He always enjoys when I inflate the bed and put sheets on it.

After that I will declare victory and not clean another thing.

Oh yeah I have to do the bathroom too. And put away the laundry. And take out the garbage and . . . Sigh.

A Question about Mortgage Securities

I've been trying to make some sense out of the mortgage securities that the government is going to be buying up from banks. That's the reason for the bailout these mortgage securities. The idea is down the road these mortgage securities that the government buys from banks will increase in value. The government will then sell them back to the banks.

So this is what my question/questions or better put my concerns are.

Let's suppose the housing market recovers. That will probably be several years down the road. At what point in time and who decides when to start selling the mortgage securities back to the banks. Is this something that is going to be figured out now that the bailout has passed? Or is this going to happen later down the line?

The next thing is this. The government starts selling the mortgage securities back to banks. Now I'm a bank. Let's say I decided to buy some of these mortgage securities from the government. Does the fact that I've bought these mortgage securities make it more or less likely that I will be lending money to ordinary people? What I'm wondering is what does all of these mortgage securities suddenly appearing in the market due to the normal lending patterns of banks. Does this mean they lend less to ordinary people to buy more of these mortgage securities? Then don't we end up right back where we started.

Bailout Passes

By a big margin (263-171), this time around, the House passed the bailout bill. There is still the question of if this is really going to solve the credit freeze. I saw a story I believe I CNN that there was a small thaw after the bill was passed. There wasn't enough time on Friday to get a good sense of what exactly the bill will do for the credit marker. Monday will tell the story.

Bush said after signing the bill:

"While these efforts will be effective, they will also take time to implement," Bush said in his weekly radio address Saturday. "My administration will move as quickly as possible, but the benefits of this package will not all be felt immediately. The federal government will undertake this rescue plan at a careful and deliberate pace to ensure that your tax dollars are spent wisely."

And that may be the big problem people not being able to see any obvious results from the bailout. And if people don't see any results what type of reaction will people have. If they pull back from spending on big ticket items like say housing will the bailout money make any difference at all.

Also what has to happen according to a story in USA Today:

Wrong. Experts say the most important thing that needs to happen before the $700 billion bailout even has a chance of working: Home prices must stop falling. That would send a signal to banks that the worst has passed and it's safe to start doling out money again.

The article further points out that without some level of trust:

No trust means no lending; tight credit means it's harder to buy a home; the more difficult it is to buy or sell a home, the further home prices will fall; and the further prices drop, the more foreclosures there will be.

So the job of pushing the plan, of making people understand the bailout, making people feel like something positive has been done and will help the situation, has really only just begun.

The election and the debates

I have to say that I could only watch about 30 minutes of the VP debate.

I must admit I find Sarah Palin's voice and mannerisms to be unbearable. And I'm starting to see her gee whiz by gumption talk to be well a little forced and a little fake. I didn't expect she would have a melt down. If she had, well the campaign would be in a much different place.

Both she and Biden did what they had to do. No big mistakes and they essentially held their own.

The more interesting news of the day, at least to me, was the fact that McCain is pulling out of Michigan. The story in USA Today. Click here for the story from the Post. From the story:

McCain will cease airing television ads in the state, and most of his staff will be redirected to other battlegrounds, including Maine, Wisconsin and Pennsylvania, campaign officials said. Plans for direct mail in Michigan will be canceled and no new field offices will be opened as the campaign enters its final weeks.

This is not to say that Obama hasn't done some retreating on his own:

Obama has made his own strategic retreats, scaling back his initial ambitions for a "50-state" strategy by pulling out of states such as Georgia, North Dakota and Alaska after polls showed the Republican opening a wide lead in them.

But all of the states Obama has pulled out have a long history of voting Republican. Michigan was long considered one of those "battleground" states. Most of the sites I visit show Pennsylvania as favoring Obama's (of course there is still a long way to go).

I guess the a question to ask is why make such a big deal about it. Why not just slowing move people out. It would be noted by the press but it would have been a much smaller story that way.

A quick note. USA Today has an interesting page where you can make up your own scenario on the election. Also a break down of the results of each election back to 1960. Go here to see it.

What we have here is a failure to communicate

In a nod to Paul Newman in Cool Hand Luke, this is exactly what we have here in terms of the “bailout.”

I’m not sure if this arrogance on the part of the administration, Treasury, the Fed and Congress (God knows they all have arrogance in spades) or just the inability to properly articulate what is at stake if this problem is not solved. The news media has failed in its job as well. The very term Wall Street bailout is going to piss people off. It implies that the fat cats who screwed up are going to get saved for their mistakes at tax payers expense. This is in part true but what is being attempted goes far beyond Wall Street. And that is the point that just about everyone has failed to make clear to the public.

ABC News finally presented a story that illustrated what was going on. It was on last Monday’s World News broadcast. It was titled an animated look at the credit crunch. If you go to the ABC news site and look in the Watch Video listing you should be able to view it. (I’m not sure how long it will be up). This cartoon really put into perspective what will happen if something is not done.

Like I said there’s more than enough blame to go around in this failure to communicate. Now someone needs to start doing it fast before the market drops another 777 points.

Credit Mess

Wow what a mess. 777 points the Dow is down in one day. I can hardly wait to see my 401k report for this quarter. Lots to talk about but I thought I'd post something with a slightly humors take on the whole problem.

If you've ever gotten one of those e-mails supposedly from some poor destitute person from some third world country, you should recognize this:

Dear Excellent Friend:

I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion USD. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gramm, lobbyist for UBS, who (God willing) will be my replacement as Ministry of the Treasury in January. As a former U.S. congressional leader and the architect of the Palin/McCain Financial Doctrine, you may know him as the leader of the American banking deregulation movement in the 1990s. As such, you can be assured that this transaction is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.

Yours Faithfully, Henry Paulson
Minister of Treasury Department of the Treasury
1500 Pennsylvania Avenue, NW Washington, D.C. 20220

Crafty Bastards

Here are some shots from Crafty Bastards. This is an arts and crafts show sponsored by The City Paper. My friend Tina is in it.


























That's Tina above and that's the banner to her site. She has all sorts of cool stuff to sell. I got a Zombies are the new bunnies t-shirt. Follow this link to she more of her very imaginative products from cards to t-shirts to wall plaques to magnets.


































The balloons spell out Crafty Bastards.



























































One of the bands that played Crafty Bastards.

National Book Festival, 2008

I went down to the National Book Festival yesterday and saw three authors speak. Rick Atkinson, Bob Schieffer and Cokie Roberts.









































































Rick Atkinson talked about his book The Day of Battle: The War in Sicily and Italy, 1953-1944. It is part of a trilogy of books about World War II. I'm in the middle of reading it right now. It is very good. I like the way he writes. He talked about how to make history interesting and the way he says he does it is by finding characters to write about.

National Book Festival 2008, Part II

I have to say I enjoyed Bob Schieffer the best out of the three speakers. I saw him several years ago and was equally impresses. He just seems like your average joe. He seems genuinely surprised that so many have come out to see him.

He told a story of going down to a college in Louisiana and the place where he was speaking was packed. People were sitting on the sills of windows that had been opened. There were even people on trees outside the windows. He said to the audience how grateful he was so many people had showed up to hear him speak. Then someone in the audience said it was mandatory.


He talked about the general state of politics. He said that with the bailout it was one of the few stories that he had a really hard time understanding. He said the experts are saying we need to do something but he added these are the same experts that got us into this mess in the first place.

He then said some of the things he believed in for the US. We don't torture. We don't have secret prisons. That's what the other guys do. Not us. That the power of ideas are far more powerful than any of our weapons. He said the reason the Cold War ended is that the people behind the Iron Curtain were able to see through television what other counties had.

He also said how Hubert Humphrey said that the voting rights act of 1964 was one of our most powerful foreign policy weapons. It showed that we really meant all people were created equal.

He then related this story. One of his first major assignments was when James Meredith was admitted to Ole Miss in 1962. He said there were riots and several people were killed. He remembers being shot at by National Guard snipers who were trying to control the crowd. Schieffer he'd never been more scared in his life even when he was in Viet Nam. He said last night I was in Oxford Mississippi to see the presidential debate. Participating was the first African-American with the chance of being president and a real war hero. Schieffer said we have a long way to go in this country but he never believe in his life time he would see this. He said it was truly historic.





























































































This last picture is of Bob Schieffer texting and he did it for awhile before he went on stage.

Nationl Book Festival 2008, Part III

The final speaker I listened to was Cokie Roberts. She was there talking about her books Founding Mothers: The Women Who Raised Our Nation and Ladies of Liberty: The Women Who Shaped Our Nation. Both books deal with the wives and daughters of the founding fathers. And how they really had a roll in helping their husbands run for office and win elections.

She specifically talked about Dolley Madison and how she helped her husband win re-election. Madison's opponent Charles Cotesworth Pinckney said he run against James Madison and Dolley Madison but he'd prefer to only have run against Mr. Madison.





































































































This last picture is rather interesting. Cokie is waiting to be introduced. All of the speakers are filmed for the Library of Congress archives. You can just see the camera man to the right of the picture. He's turned the camera right on Cokie and she proceeds to ask what are you doing and make a series of rather funny faces. Cokie was incredibly personable in her talk and very passionate about her subject. I think I'm going to have to get the books.

Saturday Laugh

The Debate

So we had our first presidential debate. I have to say this is the first time in a long time that I actually watched one.

I will say that at the end I didn't think either candidate "won" the debate. That seems to be the general reaction from the talking heads as well. There was no big mistake on either side. I think they both sort of ducked the question on how they view the economic bailout. But then again as Obama said they don't have the final language yet so it is a little early to be commenting on it. Thankfully they both said rather loudly that something has to be done.

I did think it rather amusing when Jim Lehrer asked what program or policy they would give up because of the impact of the bailout. Neither one of them really answered that question either. And Lehrer gave them plenty of chances to do so. It might have been a little unfair because the details of final plan is not yet know.

Both of them talked about government waste. McCain especially harped on this subject. There's all this money that can be saved. I'm going to look at every single agency. We'll save billions. I'm not saying there isn't waste in government or that money can't be saved but we've been getting this line since Reagan and I've yet see any of the billions in savings they talked about.

The foreign policy aspect of the debate was pretty much what I'd expected. I think it was a good exchange of ideas. I think McCain scored some points on Obama not saying the surge is/was a success. However, I think Obama countered well by saying being in Iraq has distracted us from our real mission. Obama also avoided the McCain charge that Obama would just leave Iraq. The rest as I said was standard stuff.

A couple of points.

I don't understand why McCain needed to put in the digs. He could made the same contrasts without being so snarky. Especially since in all the media run up to the debate everywhere and everyone (at least when I watched) mentioned can McCain hold his temper and not do exactly what he did.

I think the most important thing is that Obama held his own.

And in saying that I don't think last night changed all that many opinions.

The assets

I'm trying to understand what the "bail out" would do. More to the point what's going to happen to all these "toxic" assets that the banks have.

I understand that the government is going to come along and buy the mortgage securities that the banks can't unload right now. It will keep them and then sell them when the market recovers. In all the talk about this plan or possible plans it's been pretty sketchy as to whom these assets will be sold back to. Finally tonight I found out that they'll be sold back to the banks.

So once the market is "better" has anyone given any thought what selling this mortgage securities back to the banks will do.

One of the things that bothers me in the rush to get something done (which is a tactic the Bush administration excels at; you the end is coming if you don't act now) is that down the road will be the response of what the hell did we do.

Wall Street hasn't come crashing to the ground. Maybe a couple more days of figuring out this mess is not such a bad thing especially if it leads to fewer headaches later.

Presidential/Financial Follies

McCain Grandstands

That’s the only thing I can think of to call what McCain did Wednesday by cancelling his campaigning and returning to Washington to help with the economic crisis. Gee all of a sudden this is a huge crisis which is been going on for almost a week. Now is McCain a member of any of the committees that have any impact on the legislation being considered. Well no. So I’m not exactly sure how he is helping along the process. It seems his presence rather than helping matters along has hindered the possibility of a deal.

I guess we have to wait and see.

Bush’s Speech

Bush seemed in a complete daze when he gave the speech on Wednesday night. He really needed to sell the plan. He didn’t hurt his case but he didn’t sell it either. Also the speech should have come earlier in the week.

The administration needed to be out front and explain on a big stage what the plan was for. Paulson and Bernanke did a fairly good job in Congress but most people saw these statements filtered through the news media. By the time Bush spoke all sorts of concerns had been made and McCain had pulled his stunt.

Also of interest was the fact a whole lot of blame was assigned except to the Bush administration and the Republican controlled Congress that sat by and did nothing while this crisis gathered steam. Yes, it was those foreigners who helped contribute to the problem. Not an administration that didn’t believe in any regulation of the financial industry at all. Or a compliant roll over play dead Republican controlled Congress. Nor, might I add blame for the head of the Fed or the Treasury who both said that the subprime market mess would never leak into the overall economy.

At least the debate is on.