Archive for the ‘Money’ Category

Every day it’s these teabaggers complaining about fiscal responsibility and the money that our children and their children will be paying for our actions. I just have one question: where were they when Bill Clinton was paying off the national debt?

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You find out the most interesting things in articles detailing the fall of financial institutions. I found out this about failed bank Washington Mutual (WaMu):

“Someone in Florida had made a second-mortgage loan to O.J. Simpson, and I just about blew my top, because there was this huge judgment against him from his wife’s parents,” she recalled. Simpson had been acquitted of killing his wife Nicole and her friend but was later found liable for their deaths in a civil lawsuit; that judgment took precedence over other debts, such as if Simpson defaulted on his WaMu loan.

“When I asked how we could possibly foreclose on it, they said there was a letter in the file from O.J. Simpson saying ‘the judgment is no good, because I didn’t do it.’ “

Well you know, WaMu really got what they deserved.

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Socialism Please

The wingnuts are crazy about not increasing taxes lest we become socialist, but have they ever wondered how stuff gets done. I happened upon this great site from Seattle Public Utilities. Public indeed:

Help Prevent Flooding and Improve Water Quality

Join over 150 volunteers who are maintaining storm drains, a critical part of our utility infrastructure. During the fall months, a combination of changing weather and falling leaves creates a perfect opportunity for flooding. Unfortunately, our full time drainage crews cannot keep up with the thousands of storm drains that need extra maintenance this time of year. That’s where you come in! Removing dirt, silt and debris from the top of the drain helps prevent flooding and diverts pollutants from streams, creeks and other natural waterways.

Watch a video to learn more about adopting a drain.

God forbid you should actually pay anyone for performing this service. Especially in this economy with all sorts of people being out of work. That would be socialism. America, number one in the GDP, can’t even afford to make sure that the streets don’t flood during winter storms without enlisting the help of volunteers. And if you don’t think this is serious business, tell that to the woman who’s partner was drowned in her basement when a storm drain got clogged.

Meanwhile a dam in Washington is at risk and the Army Corps of Engineers urges homeowners to get flood insurance. I can’t imagine how that conversation will go with the insurance companies. “Hello, yes, I’m told my home is at immenent risk from a flood. Can I have flood insurance.” Click.

Infrastructure is really important. And once again, please monitor that volcano 54 miles from Seattle.

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I don’t see any clicks on my stats for the article in the post below. Which is understandable. It’s a long article and quite an undertaking to read it. But let me just say that after reading it, I am as pale as a ghost.

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I haven’t read this myself yet, but Jake highly recommends this Rolling Stone article on the Goldman Sachs influence in various bubbles in the U.S. economy.

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We demolish newly built homes that are bringing down the property prices of existing homes. What a waste. Think of how many people could have lived in that home were it being sold for a reasonably price. I much more like the idea of cities buying foreclosed homes and then offering them to low-income families. It seems to be a much more, dare I say, reasonable reaction?

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No really, don’t. Remember Nietzsche, Marx? Not a good idea.


Besides, lack of government intervention is what got us in this mess.

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There is so much going on in this story; it’s hard to keep track. An art collector is suing Louis Vitton and the Los Angeles Museum of Contemporary Art for selling him what he thought was original art, but was actually leftover material from LV handbags. If he knew that the $6,000 he paid for the art was really a $1,000 handbag he would have prudently purchased the handbag and mounted it in a frame himself.

Can we really feel sorry for a man who buys a logo mounted in a frame and then is disappointed when he finds out it isn’t “art”? Can we really feel sorry for anyone who buys an LV handbag for thousands of dollars full stop? And perhaps more importantly why on earth is the LAMoCA selling handbags mounted on frames anyway? Read about the ridiculousness here.

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The agency liquidating Bernard Madoff’s brokerage says the $2.6 billion it has on hand is enough to satisfy all legitimate claims by victims of the money manager’s $65 billion Ponzi scheme.

This is good news, right? I was flabbergasted by the following:

Some Madoff investors are up in arms about SIPC’s decision, announced by Picard at a Feb. 20 creditors’ meeting, to limit victim claims to “net equity” — cash invested minus sums taken out. That formula ignores profit reported on customer brokerage statements for the past 20 years, gains that were fictitious because Picard found no evidence Madoff had made any trades or profits going back decades.

I can’t think of any reason why the victims should be compensated with the money that never existed. Am I cold-hearted? I am not in any way saying that the Madoff victims are responsible for their victim-hood, but let’s be honest there were many people who invested and lost money in the past year from completely legitimate investment funds. Rewarding people who participated in a scheme, granted unwillingly, makes no sense. Why should they profit when many others didn’t.

A lot of people have blamed the victims of Madoff for being greedy. I think that is unfair to people who have clearly suffered quite a bit by the selfishness of this man. Now, I’m thinking that maybe they are a little greedy.

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How does such a large Ponzi scheme work without attracting attention? For insight into the inner workings of a highly functional yet dysfunctional office, this article is an amazing read detailing the Bernard Madoff scandal. I’ve worked in an office with an eccentric CEO, and I know Jake has too. What if all the weirdnesses actually add up to outright fraud? It blows my mind.

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Over the weekend I was having a lot of conversations about the “Global Financial Crisis.” I thought the Global Financial Crisis is much like Weapons of Mass Destruction — a mouthful of a phrase that surely could be shortened like WMD. The obvious answer would be GFC, but GFM was suggested with the M standing for Meltdown. We thought that was more fitting. Which will you use?

Cartoon via David Horsey.

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Slumdog Millionaire kids

Last month, it was revealed that the child stars of “Slumdog Millionaire” were still living in “grinding poverty,” despite the enormous success of the film. The Daily Mail reports today Danny Boyle and Christian Colson, the director and producer, respectively of the Oscar-winning movie, are working with a Mumbai housing association to move the children into new “bricks and mortar flats” in the coming months. They will also hire a rickshaw driver to take the kids to school. “These children are special and have won laurels for the country and we want to felicitate them,” said Amarjeet Singh Manhas, chairman of the Maharashtra Housing and Area Development Authority.

I have to say I have mixed feelings about the above. I would never suggest helping these children is a bad thing. I just don’t think the film’s producers really understand the culture of the children they are now having a transformational impact on. And I’m not referring to Indian culture but specifically to the culture of the people who live on the streets in Mumbai. For them, every day is about survival. They don’t have the luxury of social niceties like extreme gratitude, and money to them is something other people throw around.

I remember being on a chicken bus in Guatemala and looking at this adorable cute kid sitting next to us. He had one thing in mind and that was to take our bag. I saw him eyeing it the whole trip. A young kid already working to bring money home to his family. In Thailand, my relatives thought that I was rich. And to them I probably was but they had no concept that I shouldn’t share all of the money I owned in the world with them and that doing so would be detrimental to me.

These kids are living a dream life. They have now come to America to see the convenience that they may not have on the streets of Mumbai. They are living like princes and princesses. But at some point, the Hollywood elite are going to lose interest in them. What then? What happens after that? They will have expectations for a life that they cannot possibly fulfill. And of course, this is not new to American culture. We see this all the time with child stars.

As I mentioned in an earlier post, the DVD extras on the film Salaam Bombay include a documentary where the filmmakers revisit the street children who starred in the film. It is at times heartbreaking.

I’m glad to hear any comments on this, because I’m not really sure what I’m saying.

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In light of UBS’s decision to pass on data about secret Swiss bank accounts, I thought I’d post this excerpt from Jamaica Kincaid’s A Small Place, a book about Antigua. I always think of this passage when I think of Switzerland. Cuckoo clocks be damned.

(These offshore banks are popular in the West Indies. Only tourism itself is more important. Every government wants to have these banks, which are modeled on the banks in Switzerland. I have a friend who just came back from Switzerland. What a wonderful time she had. She had never seen cleaner streets anywhere, or more wonderful people anywhere. She was in such a rhapsodic state about the Swiss, and the superior life they lead, that it was hard for me not to bring up how they must pay for this superior life they lead. For almost not a day goes by that I don’t hear about some dictator, some tyrant from somewhere in the world , who has robbed his country’s treasury, stolen the aid from foreign governments, and placed it in his own personal and secret Swiss bank account; not a day goes by that I don’t hear of some criminal kingpin, some investor, who has a secret Swiss bank account. But maybe there is no connection between the wonderful life that the Swiss lead and the ill-gotten money that is resting in Swiss bank vaults; maybe it’s just a coincidence. The Swiss are famous for their banking system and for making superior timepieces. Switzerland is a neutral country, money is a neutral commodity, and time is neutral, too, being neither here nor there, one thing or another.)

The cuckoo clock scene starts at 1:35 from The Third Man.

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It seems that every female tennis player is “disappointed” that Shahar Peer was refused entry into the United Arab Emirates because she is from Israel. Well cry me a river over that disappointment. I have to say I am utterly disappointed in the character of all of these women for their refusal to stand up for their own.

Venus Williams says her fellow players had no intention of boycotting the Dubai Championships after Israeli Shahar Peer was denied a visa.

“There are so many other people involved. Sponsors are important to us,” said Williams.

“We wouldn’t be here without sponsors. We can’t let sponsors down.

“Whatever we do, we need to do as a team – players, sponsors, tour and whoever – and not all break off in one direction. We are team players.”

I’m sorry but if you’re waiting for sponsors to do the right thing you’ll be waiting a long time. They only care about money. Here’s some more of that tragic disappointment.

Olympic champion Elena Dementieva was Peer’s opponent in Auckland when a group of about 20 peace activists staged a protest outside the venue.

“I feel very sorry for her,” said the Russian.

“I played her in Auckland and there was some kind of demonstration during the match.

“I just feel sad for her. She really cares about what’s going on between Israel and Palestine and it’s just a very tough situation.”

Speaking in Dubai, former world number one Ana Ivanovic of Serbia said: “It’s very unfortunate, I feel very sorry for her.

“Shahar is a friend of mine and I feel sorry she’s not here. It’s always a pity to mix politics and sport. But the WTA is looking into it.”

The WTA. Yes. I’m not going to hold my breath seeing as this very same thing happened last year and they did nothing.

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Germany, Britain, China, and India, Spain, South Korea.

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It’s always a surprise when I travel to see American fast food restaurants in places like France and Germany. Perhaps it is even more of a surprise to find them in Asia, a place with plenty of cheap food available that is superior in taste.

I love the Asian food bar. A place where you can get good food fast, cheap and you don’t have to worry about tipping. This article shows the Chinese are losing interest in American fast food.

Reporting from Shanghai — Down an alley from a KFC, McDonald’s and Pizza Hut in Shanghai, Li Hong sat inside a dingy little storefront that serves full-course dinners for a dollar.

Her tray was filled with cabbage, carrots, potatoes, a chicken leg and rice, plus soup. A Western fast-food meal would have cost her three times that much, said the young woman, who works as a sales clerk. “Why should I go there?” she said.

In the U.S., fast-food chains often thrive in tough times. But not so in China, where Western quick-service food isn’t the cheapest stuff in town and, in target markets like Shanghai, there’s too much competition. Plus, a growing number of consumers see it as unhealthful.

“Western fast food is still not cheap enough,” said Yee Mei Chan, a group-account director at Millward Brown’s office in Beijing.

Photo via my flickr photostream. Taken in Japan.

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How is that not welfare?

I’ve been trying to ignore this ridiculous story of one Nadya Suleman who has had 14 children through in vitro fertilization, but this exchange keeps gnawing at me:

In segments of the interview that ran on the TODAY show on Monday and Tuesday, Suleman had said that she does not get welfare despite the food stamps she gets or the government payments for three children with varying disabilities — a son who is autistic, another child with ADHD and a third who is developmentally delayed in learning to speak. She also said she is able to provide for her children.

Tuesday night on Dateline, Suleman said that she is also in debt.

“How much in debt do you have now?” Curry asked.

“Probably 50. Close to 50,” she said.

“Thousand dollars?” Curry responded.

Suleman nodded.

“How is that not like welfare?” Curry pressed on.

“Oh, no,” Suleman protested. “These are student loans. You consolidate the loans, you pay it back. We don’t pay back welfare.”

This is not that uncommon of a phenomenon. A middle class person bemoans the poor and the poor’s dependence on public funds when they themselves are also are living off the public. Does Suleman outright say that she doesn’t like the poor? No, but the mere fact that she is distancing herself from them despite accepting food stamps and public assistance tells a lot. What a pathological lack of self-reflection. We have seen this earlier this year in another “pop news” story, that of Joe-he-ain’t-a-plumber.

I get angry when I read things like this because the poor get a bad rap. The same people who call them lazy, deserving of their position and bloodsuckers are the ones who wouldn’t bat an eyelid about taking public assistance if they fell on hard times. Yet even in such cases, wouldn’t dare acknowledge the similarity of their predicaments. Others are undeserving, but we are different.

Lastly, Suleman is doing herself any favors by talking about how she will get out of her financial predicament through consolidating loans. As the mortgage crisis shows, willfully getting into enormous debt that you cannot repay is not good for you or the rest of the country.

Photo via Susan Campbell’s blog.

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Has anyone interviewed him for his opinion on the tax problems with three Obama nominees. I think he have some choice words right now. I did find this column in the San Jose Mercury News interesting:

“(T)here is a completely understandable, absolutely acceptable and rational explanation for what happened here.” No, that is not motorists explaining to the CHP why they were driving 75 mph in 55 mph zone, or library patrons trying to get out of late fees, it’s Sen. John Kerry, D-Mass., explaining away Daschle’s failure to pay $120,000 in taxes. Give him a pass, right? Not so fast.

Call it “selective memory.” Daschle admitted so much in redressing his taxes during his nomination hearings. He told his accountant, in a moment of taxpaying epiphany, that there might be an earned-income issue with the free car and driver he had been “given” for those two years in question.

Yes, Sen. Daschle, large gifts are considered income, just like when you were in the Senate. Should we go back and check those years, too?

For his part, Geithner admitted signing a letter from the International Monetary Fund — his employer during his days tax-dodge days — that stated he was responsible for his Social Security withholding and other tax responsibilities even though he was working outside the country.

Funny, we don’t see IRS agents lining up to talk to these absent-minded citizens or to dig deeper in their taxpaying past.

Actor Wesley Snipes didn’t have a prayer using the defense of “poor judgment” when convicted of tax evasion and sentenced to three years in federal prison last year; nor did the first TV `Survivor’ winner Richard Hatch, who was convicted and sentenced four years in federal prison for not paying taxes on his $1 million winnings. And of course in the classic example of selective zero-tolerance from the feds when it comes to taxes, see Al Capone.

Citizens who play games with their taxes receive very little mercy from the IRS or sympathy from the public.

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Still spinning.

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Is it bad to enjoy this?

Fraudulent investor Bernie Madoff may have made his worst enemy of all when he stiffed screen legend Zsa Zsa Gabor in his $50 billion ‘Ponzi’ scam.

The National Enquirer is reporting in its new issue that the 91 year-old Gabor and her husband, 65 year-old Prince Frederic Von Anhalt, have lost a fortune.

“We’re mad as hell and we want our money back!” said Prince Frederic. “We might be forced to sell our Bel-Air home, cars, artwork and even our jewelry because of this sick man.”

He added:

“This scam artist should be dragged through the streets and flogged!”

Zsa Zsa is said to be understandably heartbroken over the loss, which amounts to roughly $4.5 million.

“I feel really bad, because Zsa Zsa shouldn’t have to worry about the financial mess I’ve gotten us into,” says Frederic. “We are taking legal action to recoup some of the money.

“I’m going to have to make back that money somehow or we’re going to face financial ruin.”

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Pure Ponzi?

This article at the Boston Globe is absolutely unbelievable. I recommend reading it in full. The two points it seems to be making are:

1. Bernard Madoff wasn’t trading.

As investigators try to untangle the scheme that Bernard L. Madoff hid from investors and regulators for a decade or more, one basic fact is emerging: He may not have been making any trades at all.

A federal agency that regulates brokerage firms says there is no record of Madoff’s investment funds placing trades through his brokerage operation. That leaves only two options – either he was placing trades only through other firms, which would be highly unusual, or he was not placing any trades.A federal agency that regulates brokerage firms says there is no record of Madoff’s investment funds placing trades through his brokerage operation. That leaves only two options – either he was placing trades only through other firms, which would be highly unusual, or he was not placing any trades.

2. His customer statements were phony.

The statement [he sent a custsomer] also says he bought and sold shares of the Fidelity Spartan US Treasury Money Market – a fund Fidelity Investments said had been renamed back in 2005.Moreover, Fidelity, the Boston investment firm, says Madoff was not a client of the firm. That is, Madoff’s firm did not interact with any part of Fidelity that deals with investment advisers and other intermediaries that ordinarily make investments for their clients through Fidelity.

I’m just a caveman lawyer and all, but this is nuts. How on earth did no one figure out this scam right away? Didn”t someone say to themselves, you know that Bernard Madoff he’s so successful but I don’t really know anyone who trades with him. If he was creating phony statements there must have been someone helping him. Why did no one say anything?

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I have Christmas money to spend and I’ve decided to use it to buy a roomba. Only a quick search on Amazon shows quite a variety. Any reader reviews of roombas? Can anyone recommend a consumer web site for reviews on roombas?


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When the story about Bernard Madoff first broke, I immediately thought of the Nineteenth Century Playwright Harley Granville Barker. His play The Voysey Inheritance begins with a son finding out from his father that the family business is no more than a Ponzi scheme. The son is asked by the father to inherit the business and perpetuate the ruse. If you have the time to read the rather long excerpt from the first act, I highly recommend it. You can find it below. If not, here is the link to Google Books. Print it out and take it home. It’s worth it and very timely. It’s a comedy, I think.

I haven’t used block quotes in order to put more text on the page. I’ve done some editing to make it easier to read than what I copied and pasted it from. The scene begins in Mr. Voysey’s office.

Just after Act I begins:

MR. VOYSEY. Good morning, my dear boy.

EDWARD has little of his father in him and that little
is undermost. It is a refined face but self-conscious-
ness takes the place in it of imagination and in
suppressing traits of brutality in his character it
looks as if the young man had suppressed his sense
of humour too. But whether or no, that would not
be much in evidence now, for EDWARD is obviously
going through some experience which is scaring
him (there is no better word). He looks not to
have slept for a night or two, and his standing there,
clutching and unclutching the bundle of papers he
carries, his eyes on his father, half appealingly but
half accusingly too, his whole being altogether so un-
strung and desperate, makes MR. VOYSEY ‘s uninter-
rupted arranging of the flowers seem very calculated
indeed. At last the little tension of silence is broken.

EDWARD. Father . .


EDWARD. I’m glad to see you.

This is a statement of fact. He doesn’t know that
the commonplace phrase sounds ridiculous at such
a moment.

MR. VOYSEY. I see you’ve the papers there.


MR. VOYSEY. You’ve been through them ?

EDWARD. As you wished me . .

MR. VOYSEY. Well ? [EDWARD doesn’t answer. Refer-
ence to the papers seems to overwhelm him with shame. MR.
VOYSEY goes on with cheerful impatience.] Come, come,
my dear boy, you mustn’t take it like this. You’re puzzled
and worried, of course. But why didn’t you come down
to me on Saturday night? I expected you . . I told you
to come. Then your mother was wondering, of course,
why you weren’t with us for dinner yesterday.

EDWARD. I went through all the papers twice. I
wanted to make quite sure.

MR. VOYSEY. Sure of what? I told you to come
to me.

EDWARD, [he is very near crying.] Oh, father.

MR. VOYSEY. Now look here, Edward, I’m going to
ring’ and dispose of these letters. Please pull yourself
together. [He pushes the little button on his table.]
EDWARD. I didn’t leave my rooms all day yesterday.

MR. VOYSEY. A pleasant Sunday! You must learn
whatever the business may be to leave it behind
you at the Office. Why, life’s not worth living else.

PEACEY comes in to find MR. VOYSEY before the fire
ostentatiously warming and rubbing his hands.

MR. VOYSEY. Oh, there isn’t much else, Peacey. Tell Simmons that if
he satisfies you about the details of this lease it’ll be all
right. Make a note for me of Mr. Grainger’s address at
Mentone. I shall have several letters to dictate to At-
kinson. I’ll whistle for him.

PEACEY. Mr. Burnett . . Burnett v Marks had just
come in, Mr. Edward.

EDWARD, [without turning.} It’s only fresh instruc-
tions. Will you take them?

PEACEY. All right.

PEACEY goes, lifting his eyebrow at the queerness of
EDWARD’S manner. This MR. VOYSEY sees, re-
turning to his table with a little scowl.

MR. VOYSEY. Now sit down. I’ve given you a bad
forty-eight hours, it seems. Well, I’ve been anxious about
you. Never mind, we’ll thresh the thing out now. Go
through the two accounts. Mrs. Murberry’s first . . how
do you find it stands?

EDWARD, [his feelings choking him.] I hoped you
were playing some trick on me.

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I want to say two words to you. Just two words. Are you listening? Postal Coupons.

Ponzi eventually found his way to get rich quick using a vagary of the postal system. At the time, it was common for letters abroad to include an international reply coupon — a voucher that could be exchanged for minimum postage back to the country from which the letter was sent.

The article is a great read.

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