Do I smell the next financial bubble?

There's a carbon allowance market. Simply put it permits the sale and trade of carbon allowances. Without much knowledge of the process I can see how this will get out of hand in the future. Large high carbon output corporations will buy up credits from smaller companies. Other investment companies will come into existance to trade in these allowances and like the mortgage paper that was composed of bits and pieces of loans and sold all over the world...I think you get the idea. You know they will try to sell this to the general public as the new great way of "green" investing. And just like the sub prime and option mortgages there'll be no way to value such paper. What's worse with this senerio is that when the carbon market collapses there'll be nothing of value to back up the paper. No collateral zip nada you'll have toilet paper after getting screwed on that deal. Remember you heard it here first.

Carbon allowances
The next weapon of mass financial distruction

You've just about seen it all if they air this program

Fox is going to try and air a program about people getting laid off. A new reality show called "Someone's got to go". As if we haven't seen enough suffering during this economy now they want to pipe it directly to your livingroom. Hey Fox, if I want to see the suffering all I have to do is look out my front window and see all the parked cars during working hours. I hope you'll join me in sending an email to Fox to tell them what they can do with their program. And if any corporation has the guts to be the sponser for that show it's asking for a boycott like this country has never seen.

Someones got to go and it should be the person who thought of that idea

First banks now life insurance companies?

Now the Treasury Dept. wants to bail out life insurance companies. Hmm.. I could understand the possibility and the logic with something like annuities where the monies that pay out monthly payments have been hit by a drop in the stock market. The market is down from it's once high of 14,000 Oct.2007 but the worry here is that people will start droping like flies and they'll be inundated with claims for death benefits. Are these companies concerned that by some fate we'll be invaded or maybe some grand national disaster should wipe out a large segment of the population? Have they been secretly selling subprime mortgages on the sly without our knowledge? It does make one wonder. Maybe they're concerned that some laid off worker will go postal (you remember that term from years past) and wipe out the entire company from the CEO to the mailroom guy. Here's an idea. Quite bailing out companies that do little more than sell paper and invest in some training for things like solar and wind power. Then get busy building the damn things. Why is it that they've had no problem dumping tons of money into banks who in turn laid off workers while the rest of the work force must wait for things to get going? And why is it that local government have taken a chainsaw to the safety nets that serve people when they need it the most? We now have police departments who are worried about public safety because their budgets were cut and the layoffs are hitting them as well. Maybe it wasn't such a bad idea to go out and buy a gun because by the time the cops arrive it will be just in time to call the Medical Examiner. Maybe that's why the insurance companies will need a bail out.

Bailing out the Death Insurance Companies
Hey that's what they are you know.

GM and Segway develop the P.U.M.A. personnal transport.
Looks like an over priced wheel chair if you ask me. If this is their solution. They're screwed and we're screwed. We gave them how many billions and this is their solution? Give me a couple of billion and I'll get you something that looks like a soapbox derby entry so that I can have gold faucets and fridge in my exec powderoom.

Ted Stevens
OJ must be proud. You got off on a technicality but your still guilty and you know it. Nothing like shooting the messengers. Or in this case bringing charges against them. But then again seeing how this was the Bush justice department what would you expect? Thirty boxes of evidence that wasn't turned over.

So I found a new replacment CEO for any of these companies.

CDS

Digging through the history of the financial debacale trying to do a postmortum I discover that the banks and investment houses are like a large ball of string tangled to such an extent that it makes you want to just throw it all away and get a new one. But we know that will never happen. These behemouths have grown their tentacles into every facet of American life. To pitch them aside like some sandwich wrapper would spell total ruin. The powers that be will be forced to maticulously unwind this knotted ball. Funny how we pride ourselves in being so modern always looking for new and more efficient ways of doing things yet there are some things best left alone. Just after the "great crash" of 29 laws were passed to prevent what has just happened. It was all there. Nothing complex that even an average person couldn't understand. But no, the banks and investment houses weren't satisfied with being just what they were. They just had to be something else. That glaze look of greed came over their eyes. How to make more? How can we con the government into changing the laws to our favor? That's what it was a con job. Logic and common sense were thrown out the window. It was easy but like boiling a frog it took some time. The first rule to go was the one that said a bank couldn't sell investments and investment houses couldn't be a bank. That I'm sure was an easy thing to eliminate. "Senator wouldn't it be nice if you could do your banking while you're here at our investment house." But no it didn't happen that way. It happened in the background by investment houses and big banks stretching the rules and getting into areas they had no business getting into. Like the two year old inching his way to the cookies after mom told him to stay away the financial institutions did exactly what they were told not to do.
These people were not satisfied with a set amount of return or business. They just had to have more like a drug profits and comissions could always be bigger. I've seen this in business. A company that grows to a certain point and when they reach a good percentage of market share aren't satisfied. It drives younger people in the company to look for more profit without thinking of the rules. We'll just call a product something else even if it violates the laws. We'll just make it so complex that it can't be regulated. And that's what they did. CDOs, hedges and derivatives became the savior of the time. Financial instruments so complex that I'm sure even those who sold them at times didn't understand or could value what they were selling. And the real beauty was that there were no rules, no SEC filings, no accountability. What a great playground for financial disaster.

Credit default swaps

Those wonderful little insurance policies that brought down a nation and possibly the world of banking.

( I'm not going to proof this there was just too much reading and research. So call me lazy)

Saturday Night Beaver

The Friday night beaver got pushed to Saturday this week. I guess he couldn't find a date last night and his threads were at the cleaners. Speaking of beavers it seems they were busy up here in the Northwest in early spring. One of their dams let loose and a bunch of houses were wiped out in a mud slide. Wonder if the owners will sue the state or the beavers? Unless the beavers won the state lottery it looks like that would be the state. You can't beat mother nature, she always wins.

Beaver dam collapses

A frame of reference

Something got me to thinking about our sphere of knowledge. That period of time that we grew up in. Today it seems kids need a ride to the store two blocks away. They wouldn't even consider walking if their destination was 1/2 mile. Not to sound like a grumpy old fart but in my younger days we walked everywhere. Then I consider the time frame of my grandmother. She was born before electricity and cars. They didn't pop down to the local anything because they lived at the edge of town and going anywhere at that time was an all day affair. You couldn't just pop in for a quick shower throw on some clothes jump in the car and head out back then. First you had to go out and pump the water. Bring in enough to fill a copper tub. Then there was the gathering of wood to put in the stove to heat the water and add boiling water to the cold water in the tub. G'ma never told me exactly how that worked. Once you finished using the lye soap (that's all they had then) it was time to dress. Wonderful wool ichy everything and probably stiff wool ichy chothes (there were no dryers it was all line dryed). So after the coursets and slips and other protective gear which I'm sure took a while someone had to go out and hitch up the horses to the wagon. And since there weren't any phones it was a common practice to go visiting. One custom of the time was to leave a photo card either of you or your family called a carde d vie (visiting card). I have many of these cards that grandma gave me. I have no idea who the people are since like she they're long gone but there are some dates and where they were made on the back. That was my grandma frame of reference.
Mine frame is a bit different. Born a some of years after WWII and growing up in the 50s. Remembering mom and dad always telling us of the great depression although they never used the term great. Someone under twenty has no concept of what that must be like although there is a growing population going through it right now. But back to being a kid in the fifties. For me it was the real beginning of the industrial revolution. There was at first no TVs only relegated to the rich. I seem to recall at a very young age one kids family on the block got a TV and all the kids in the neighborhood went after school to lay on the livingroom floor and watch whatever kids watched then. I was a bit young then. Some of the other things I remember - no air conditioning except at one of the corner drug stores as everybody had screens and fans to keep cool. There must have been a period of transition in heating because we had a coal storage room in the basment with a hatch at the foundation for deliveries. This was changed sometime before we moved in to gas but they left the old boiler disconnected from the water lines which we used to burn trash. Insects were killed with either a flyswatter or Black Flag with DDT in one of those weird pump sprayers.

Cars were made of real steel so heavy you could climb on the hood or hit it with a football and do no damage. We kids used to play ball in the middle of the street with only a few interuptions from traffic. There weren't as many cars back then because a bus ride was a dime one way and cars were expensive relative to income. Most people shopped at a local market a block or two away.
Computers at that time were a thing of the military or very large corporations. It wasn't until the late 50s early 60s that binary code was even mentioned in school.

You took a bath with Lifebouy soap and Breck shampoo. You put on you dungarees and PF flyers. Entertainment was going to a roller rink or a movie. There was only three network TV stations then one PBS. There was a breadman a milkman and an eggman and they all delivered once a week. The mailman delivered twice once in the morning and once in the afternoon. There were no plastic garbage bags. You put your garbage in a paper bag and into the metal garbage can which always grew flys. Sandwiches were wrapped in waxed paper and milk came either in waxed containers that usually leaked or glass bottles. The lawn was mowed with a push mower with no motor. There were no leaf blowers and few power tools.
So that's my frame of reference. I can only imagine what it will be like in 50 years but then I won't be here to see it.

April fools indeed

I wanted to put a photo of the weather out my window but I'm just to lazy to drag out the digital video camera and cut a snipet to post but let me just say that it's snowing here. Snow is something we only get about once or twice a year here usually in December or the early part of the new year. I can't think of a time we've had it in April. I guess it goes along with the GOP budget and the computer worm set to go off today. We're April Fools indeed if we buy into the GOP budget which sounds like more of the same BS they've been feeding us for the last 8+ years. You know - taxes cuts for rich = good, spending for poor = evil.

In looking at all this I can only hope that many CEOs and CFOs and any other Cs out there get laid off and must experience the stresses and suffering that their underlings have been going through. How does it feel now Mr manager now that you're just one heart attack away from loosing your house since you won't have coverage. Gee and you thought you'd have an easy time sending Jr. to college but now that his favorite university just raised tuition and froze enrollment your spawn might just have to try for the Jr college but they too are squeezed and aren't taking new bodies. Oh and I'm sure Mr. Manager will just love dealing with his local unemployment office which was outsourced to some private company with a bunch of lackies. And the number of offices were cut to save money. Good luck filing a claim. The backlog was around 4 weeks last time I checked and you'll need to push hard should some info on your claim is misread or missing. You'll have just loads of fun either sitting on hold for hours and once you get through you get to talk to sombody who barely speaks English and doesn't understand what you're trying to tell him anyway. He might just tell you to call back next week but then you of course lose this weeks' check because you didn't file on time. But don't worry he told you they might have it all straightened out in the next couple of weeks so continue to file your claims (which you've been trying to do but can't because the system is so overwhelmed and keeps telling you to try again later). Hey but don't worry you can always sign up for the food bank but oh that's right you get too much money on unemployment to qualify for that even though you might not have received a dime in the last 4 or 6 weeks. But then it wouldn't really matter because because the food banks are almost empty and all you'll get is a couple of boxes of macaroni if you get there early enough.
So you do all those wonderful networking things and call all of your old associates or at least the ones you didn't stab in the back when you did those big deals in 2006 and 2007. You find that they too aren't hiring in fact they're worring about their position but they won't tell that to you but you know it. You find that they are now working 4 day weeks and thinking about going to 3. You just know that expense accounts are cut and even the free coffee is no longer purchased.
You look at your options which aren't looking that great. You're too young to retire and too old to retrain. Who'd want to hire somebody for 6 or 7 years when they can hire a twenty something with 30 or 40 years ahead of them. You look at the lowest of options only to find that even they are all gone. The only ones that might be out there are temporary "on call" positions but since those that are working are so afraid of being replaced they'll show up near dead just to get one more day's pay. Should you be lucky enough to get some temporary work it just does wonders for your unemployment. It works something like this. Work one day and there is no effect to your claim. Two days and there usually isn't much effect. Three or four days and you're screwed. At three days you can make too much to get even a reduced check but with normal taxes and deductions on the pay check you get less than unemployment.

In all of this I could hope the those at the top of corporate America would feel the pain but then I'd only be trying to fool myself. Those at the top have their golden paraschutes and severance packages that for the rest of us could easily retire to the tropics. Here I sit playing an exersize in wasted logic so just call me your April Fool.