The first 50 years is the hardest

Shane McGowan born December 25, 1957

A lump of coal in your stocking courtesy of the dismal science

Paul Krugman is a smart guy but he's no performer. He writes so lucidly on economic matters that I'm always brought up short when witnessing one of his talks. I imagine being in one of his classes at Princeton must be daunting for the student trying to follow the quicksilver coursings of his expressed ideas, which are congenitally cogent but when he speaks ex tempore rush from his mind to his his mouth unmediated by the the customary attention a public speaker pays to the formal requirements of being readily followed by a given audience.

Shifting from one stated thought to another is a tricky business in public speech, and is best attempted by any speaker only after being preceded by sufficient warning to the audience in some brief but comprehensible suggestion that now we're on to something else, accompanied by a fond farewell to the idea that's just now being left.

As he speaks, Krugman's mind seems constantly torn between saying the words coming from his mouth and evaluating the words coming from his mouth, and then instantly offering up a reformulation, emendation, verbal footnote or other bye the bye to almost anything he's just uttered, although it must be admitted that he resists as much as he can the temptation to completely drop what he was originally saying to follow along the trail of the interceding idea and its sequalia which is ever-receding end of so much of this kind of talk.

Which is not to say that this is not the way people speak. This is the way people speak. In conversation, people flit from one thing they've just said to some other whatever it may suggest as a matter of course, irrespective of the tangentiality of the suggested matter. When there's only one person speaking, this inclination can be policed, but in Krugman's case, alone there in front of his listeners, it is not.

He's worth listening to because he manages to convey, pace the disorderly delivery, real, informed alarm about the health of global financial institutions today as they grapple with the catastophic effects of the subprime mortgage meltdown.

He describes the current situation as unique, contrasting it with earlier episodes of instability — the Savings and Loan debacle of the late 80's, the economic collapses in Russia and East Asia, the bursting of the internet bubble at the turn of the millennium among the recent episodes which seemed to indicate as they played out that global financial institutions had the tools at hand to mitigate every foreseeable shock to the system. Krugman notes that the tactics used so successfully earlier simply don't seem to apply to this situation, which isn't a liquidity crisis — lenders unwilling to lend, drying up available capital, although there's a lot of that going on in an understandably skittish environment— so much as it is a solvency crisis brought on by a tidal wave of worthlessness settling in on a vast array of securities backed by subprime mortgages.

Krugman says that housing prices must fall by up to 30% if they are to return to historic costs relative to other parts of the economy. In that eventuality, housing bought at the height of the market, when customers were being shoehorned in to new homes or convinced to refinance using one of these vehicles, is now and for years to come worth less than the paper that must be paid off on it.

In a rising market, the usurious rate adjustment built in to the most liberal of these sub-prime instruments, which kicked in after a specified period of time in which the borrower paid some laughably small amount against the debt, could be easily eluded by the simple expedient of refinancing using the collateral of a house now worth more than the original loan to pay off that first loan, and rinse and repeat as needed to avoid the consequences of the unsupportable mortgage payment required when that loan's rate adjustment kicks in. The market slows, steadies, falls. Houses bought with sub-prime loans are now worth less than what is being paid for them by their owners. The chances to avoid the rate adjustment dry up. Borrowers are squeezed to pay more than than the house is worth, and at a faster rate, more's the pity. Foreclosures skyrocket.

And the market isn't really sure who owns all that bad debt, who'll be stuck with the payable bill for it all. Currently it's just sort of materializing out of the vaporous realm of serial securitizations which sought to leverage the collateral of the now thoroughly sunken value of those subprime mortgages into vaster and vaster loan arrangements, which according to best practices in business come due just as the monthly mortgage statement comes due for the homeowner, and must by the ineluctable laws of accounting properly materialize on the balance sheets of financial institutions left holding the bag, payable in full, at the end of a given reporting period.

Bear Stearns, whatever other irregularity it may have indulged in over the past 80 years, has never failed to show a profit for its investors, but this year reports a multi-billion dollar loss. Merrill Lynch, of the famous bull on Wall Street commercial, exposed itself to its first loss in almost three quarters of a century and made Bear Stearn look like it got off easy. Citigroup? … well, jayz. Who knows how far into the future they'll be paying for it? And the insurance bought by prudent investors to mitigate risk should the market go bad, as markets sometimes do, appears more and more to be worthless itself, being carried by insurers who, like the owners of those unpayable mortgages, cannot themselves meet their obligation to pay up in full for their share of the same failed investment in subprime-backed securitizations owed by Bear Sterns and Citigroup and Merrill Lynch and all.

When Paul Krugman says he's alarmed, listen.

Ho ho ho

I suppose that in the halls of academy the bright line between political scientists and those who fashion actual policy marks a well-established divide familiar to all those who care about that sort of thing. The political science people have their Department of Government at Harvard, and down the street the policy people have their Kennedy School of Government. This video crafts a sly parody of the television show "The Office" in which the Department of Government at Harvard is targeted to be absorbed by the Kennedy School.

The threatened merger is averted after a good deal of "Office"-like talk and camera work, resolved in the end by firing all the theorists. That's actually knee-slapping funny in context, as is the turn by the fellow with the William Kristol pinup in his locker.



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Happy Rohatsu

Rohatsu is what the zen tradition calls Bodhi Day, the day Buddha achieved whatever enlightenment is. In Japanese, Rohatsu means the eighth day of the twelfth month.

Hundreds of years passed and people began writing down what the Buddha might have said at that tremendous moment, just sitting there, had he in fact said anything at all.

Siddhartha looked at the planet Venus in the morning sky on the day following one week's steady samadhi, and there he was, enlightened, Buddha.

One year ago today my father celebrated his last birthday. He was 89 that day, and gone in less than a month.

For Roman Catholics like my father, December 8 marks the Feast of the Immaculate Conception of Mary, mother of God. Although this feast is often confused even in the minds of nominal Catholics with the time God had his way with Mary and they conceived Jesus, it is not that conception, but her own conception that is being celebrated here. Notwithstanding the puissance of the godfucking of Mary that made Jesus, her own parent's fucking stands as the greatest, most thoroughgoing and holy human-on-human fuck of all time, producing as it did, according Catholic dogma, by the grace of god, the unblemished vessel of Mary herself, a fuck fully worthy of yearly commemoration.

My father enjoyed reminding everyone that kids got the day off from Catholic school on his birthday.

Gearing up for the Season

Viscerally Anti-American, But Still…

You're wearing trousers with a tag on the back
and a cap with the visor turned up,
parading around Tuleto
like a lady's man trying to be seen

You're acting all American,
American, American,
listen here: who's asking you to?

You want to be all trendy,
but if you drink "whisky and soda"
you always end up sick!

You're dancing rock and roll,
and playing baseball,
but where'd you get the money
for the Camel cigarettes?
Mummy's handbag!

You're acting all American,
American, American,
but you're born in Italy, listen here:
there's nothing you can do,
O.K., Napoletano?!
You're acting all American,
American, American,

How can your loved one understand
if you're speaking half American?
When you're out loving under the moon,
where do you get a phrase like "I love you"?

You're acting all American,
American, American,
but you're born in Italy, listen here:
there's nothing you can do,
O.K., Napoletano?!
You're acting all American,
American, American,
...whisky soda & rock and roll…

—Renato Carsone - Tu' vuo' fa' l'americano

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December Weather

What I like about Weather.com is the tidy little box that shows you in big bolded numbers your temperature and in smaller type all the related info on wind and humidity and such after you enter your Zip Code.

The box has a reading for what your temperature "feels like," using some clever normalizing operation that I'm sure is a closely held trade secret taking into account the bearing of all the accumulated wind and humidity and stuff on the raw farenheit of the number. Some days in summer the box reports that Santa Cruz "feels like'" 76 degrees when the farenheit of it is only 71. Today at 8:45 am, 44 degrees farenheit "feels like" 44 degrees farenheit, according to Weather.com. So, out here in the garage today I'm simultaneously experiencing not only 44 degrees farenheit, but also at the exact same moment, what it feels like!

The forecast for today is cloudy skies, mild winds and a high of 61 degrees farenheit, whatever that may end up feeling like, more or less or equal to itself as may be. T-shirt weather Pacifica, is what I call it.

On the Scent of the Desert Sage

On their way to making another film entirely, a camera crew from Coudal Partners ran into Ed Grothus of Los Alamos, New Mexico. The result is a remarkable video called Laboratory Conditions. Give it a look.