Warren Buffett’s Freudian Slip This land is your landThis land is my(?) landFrom California to the New York islandFrom the red wood forest to the Gulf Stream watersThis land was made for you (and me?). –Lyrics, “This Land is Your Land”; Woody Guthrie (tweaked by Ross Kaplan) The first time I read “Pretty Good for...Read More
“I Gave (and Gave) at the Office” It’s awfully hard to buy the line that banks may not have — ahem — strictly complied with the letter of the law in foreclosing upon hundreds of thousands of homes because they were understaffed. Let’s see . . . Take the staggering compensation earned by guys like...Read More
Banker Arrogance, Exhibit #137 Pop quiz: who said the following, in what context? “We all benefited from the financial system. All of us.” A. President Obama, justifying using trillions in taxpayer money to fortify the nation’s too-big-to-fail banks.B. An anonymous retiree, rationalizing the .25% (as in 4 x .25% = 1%!) annual interest — before...Read More
The “Muddle-Through Strategy” What we’re really seeing here is a decision on the part of President Obama and his officials to muddle through the financial crisis, hoping that the banks can earn their way back to health . . . maybe we can let the economy fix the banks instead of the other way around....Read More
Is the U.S. Dollar a “Legacy Currency”? “China Urges New Money Reserve to Replace the Dollar”—The New York Times (3/24/09)Legacy: of, relating to, or being a previous or outdated computer system. Here’s a tip: when someone refers to something as a “legacy [blank],” it’s not a compliment (or a good omen). So it’s unnerving —...Read More
Everything Clear Now? Going short on bonds by buying a Credit Default Swap (“CDS”) contract carries limited risk but almost unlimited profit potential. By contrast, selling CDS offers limited profits but practically unlimited risks. This asymmetry encourages speculating on the short side, which in turn exerts a downward pressure on the underlying bonds. The negative...Read More
