2008-09-30 (Tuesday) by Gregory Tucker.

IMF has recently released a study of past banking crises, and how the regulators responded to them. Only in a minority of cases did they buy up the bad loans–there are other methods available too. While I am skeptical of IMF in general, this paper contains very good information.

This paper presents a new database on the timing of systemic banking crises and policy responses to resolve them. The database covers the universe of systemic banking crises for the period 1970-2007, with detailed data on crisis containment and resolution policies for 42 crisis episodes, and also includes data on the timing of currency crises and sovereign debt crises. The database extends and builds on the Caprio, Klingebiel, Laeven, and Noguera (2005) banking crisis database, and is the most complete and detailed database on banking crises to date. 

 http://www.imf.org/external/pubs/ft/wp/2008/wp08224.pdf

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2008-09-26 (Friday) by Gregory Tucker.

Recently my dad sent me this SPAM chain letter. He should have known better. I wonder how many of the other recipients are going to pass on this nonsense more more fools, then to more fools, etc.

The math is simply wrong. 85,000,000,000 divided by 200,000,000 is equivalent to 85,000 divided by 200. Simple math. Even without using a calculator, you can see that cannot possibly equal $425,000. In fact, the real number is $425 per adult citizen (I had to use a calculator for that). The author intentionally confused trillion with billion, knowing most Americans won’t understand the difference–humans have trouble comprehending large numbers. Look at the way they presented the numbers in an inconsistent and confusing manner.

The AIG bailout included warrants (basically call [buy] options associated with a bond) that dillute  80% of the shareholders value, allowing the Federal Treasury to participate in much of the upside to AIG’s liquidation. This is the correct way to do a bailout–some estimates of the banking bailout in Sweden suggest the tally of socialized costs was about nothing, meaning the bailout was entirely successful at rescuing the financial system without socializing all the costs.

By now, most of us have heard of the $85 billion bailout of AIG.

Instead, let’s consider giving that money  to Americans.

To make the math simple, let’s assume there are 200,000,000 bonafide U.S. Citizens 18+.

Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up..

So divide 200 million adults 18+ into $85 billion that equals $425,000.00.

The plan is to give $425,000 to every person 18+ as a We Deserve It Dividend.

Of course, it would NOT be tax free.  So let’s assume a tax rate of 30%.
Every individual 18+ has to pay $127,500.00 in taxes.

That sends $25,500,000,000 right back to Uncle Sam.

But it means that every adult 18+ has $297,500.00 in their pocket.  A husband and wife has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family?

. . . Pay off your mortgage - housing crisis solved.

. . . Repay college loans - what a great boost to new grads

. . . Put away money for college - it’ll be there

. . . Save in a bank - create money to loan to entrepreneurs.

. . . Buy a new car - create jobs

. . . Invest in the market - capital drives growth

. . . Pay for your parent’s medical insurance - health care improves

. . . Enable Deadbeat Dads to come clean - or else

. . . Help non-profits meet unmet needs

Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back. And of course, for those serving in our Armed Forces.

If we’re going to re-distribute wealth let’s really do it.  Instead of trickling out  $1 000 ( a ploy to buy our vote? ) economic incentive that is being proposed by one of our candidates for President.

If we’re going to do an $85 billion bailout, let’s bail out every adult U. S. Citizen 18+!

As for AIG _ liquidate it.  Sell off its parts.  Let American General go back to being American General.  Sell off the real estate.  Let the private sector bargain hunters cut it up and clean it up.

We deserve it and AIG doesn’t.

Sure it’s a crazy idea that can ‘never work’ . . . or can it?  How can we get someone with ‘power’ to even listen?

But can you imagine the Coast-To-Coast Block Party!  How do you spell Economic Boom?

I trust my fellow adult Americans to know how to use the $85 Billion.  We Deserve It Dividend more than do the geniuses at AIG or in Washington DC

And remember, The Plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.

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2008-09-26 (Friday) by Gregory Tucker.

This evening I watched the UNL May 2008 graduation commencement speech published on the UNL EN Thompson Forum Podcast. Having obtained my degree recently from an online college, I was unable to take part in the commencement ceremony in the area, due to schedulng conflicts. Anyway, here are the facts from UNESCO:

World population is about 6.7 billion people. Fewer than 1 in 20 live in the United States. Nebraska population is just 3 one-hundredths of 1%. Roughly one-third poeple in the world have no classroom experience. Four billion people have had less than a sixth grade education. Fewer than 4% have college degress–4.6 billion people have far less education than American college graduates. If the entire auditorium were the population of the world, college graduates would be only the front row.

I wonder how much that number decreases when you look at post-graduate educaiton rates. Nevertheless, it is a reminder how unique and fragile is our existence.

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2008-09-24 (Wednesday) by Gregory Tucker.

Earl Blumenauer represents Oregon’s 3rd District.

I am concerned about the bailout package proposed by the Treasury Secretary, which give his office carte blanche to hand out $700 billion of taxpayer dollars to failed companies.

Besides the morale hazard of privatizing gains while socializing losses, the proposals I have seen would give a Wall Street insider free reign to hand out rewards, with almost no accountability. We can easily envision that by the end of 2008, Wall Street executives handing themselves hundreds of millions of dollars, at the expense of taxpayers.

I understand the severity of the economic crisis, but the Administration is using a familiar tactic to pressure Congress into giving it everything it wants without restrictions. This looks like another disaster waiting to happen.

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2008-09-23 (Tuesday) by Gregory Tucker.

LinkTV’s Intelligence Report suggests Israel is planning to bomb Iran’s nuclear reactor during the month of October 2008. Israel’s air force is more than capable of achieving the objective, and political realities dictate the strike should occur sooner rather than later:

• Israel and administration officials cannot predict how Obama will react to the suggestion, but it appears it would be unfavorable, notwithstanding his commitment of continued support of the nation.
• Creating or escalating a national security threat before the election would arguably favor the White House incumbent, John McCain, over his challenger. 

The report claimed the U.S. denied Israel the rights to fly over Iraq, presumably because that would tie the administration too closely to the strike. The Administration would prefer to keep such an attack at arms length, but they can’t seriously think they are kidding anyone–everybody in the region knows Israel cannot achieve such a move without its permission plus our military intelligence.

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2008-09-23 (Tuesday) by Gregory Tucker.

This article on the bankruptcy of Renaissance Homes contained an interesting quote: 

Renaissance will be the third prominent metro-area home builder to file Chapter 11 since May. Though some in the housing industry initially insisted that the real estate bust would spare Portland due to in-migration and other factors, it now appears that the shrinking home values and stalled sales that hit much of the rest of the country in 2006 and 2007 were simply late in arriving here.  

Why does this “in-migration” myth persist? By my calculation of US Census Bureau data, Multnomah County has a 0.84% CAGR from July 2000 to July 2007–hardly the stuff of massive migration inflows.The Oregonian reports most of Portland areas growth is due to Hispanic / Latino, and more than half of that is indigenous growth, not migration. Is there YAISD (Yet Another Instance of Self Delusion) among Realtors?

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2008-09-22 (Monday) by Gregory Tucker.

While doing some research I ran across this poll by Gallup.

The data confirms what I always believed, which is the Republican Party is officially a Christian party. Whereas the Republican party punditocracy (owning half the stations on the AM radio dial) claims their beliefs represent the overall population, the data shows that on the issue of belief in God, the views of independent voters are more consistent with the Democrats.

However, independents exhibit less belief in God than either Republicans or Democrats. It really makes me wonder who are these independents, and what are their religious beliefs in general.

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2008-09-21 (Sunday) by Gregory Tucker.

I found this here. Open Disk Utility and use the New Image from Folder menu item to create an image. Ensure it is uncompressed and use the CD/DVD master option. In my experience this creates HFS+ masters which are no good in Windows. Open the Terminal. Assuming your new image is called Master.cdr type:

hdiutil makehybrid -iso -joliet -o Master.iso Master.cdr     

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2008-09-20 (Saturday) by Gregory Tucker.

I agree with this article–it is time to reinstate the Glass-Steagall Act, which banned banks from being brokerages, and vice-versa.In reality, it won’t happen. The government perceives it needs as many buyers as possible to rescue the brokerages, and those eligible suitors include Bank of America. Talk of Glass-Steagall may come back in 2 years, but not now.

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