Friday, October 31, 2008
New Slideshow of the Girls
Jon put up new pictures of the girls. There is a ghost in some of them; I think that we had a smudge on the lens. Oops! More later...
Friday, October 17, 2008
Chapter 2: Tour
Woo Hoo! It's a beautiful day in Southern California. No clouds or fog. Temperature is in the low 70's. I couldn't have picked a better day to visit.
I exit the rental car lot and find my way to Sepulveda and start heading south. I immediately recognize several landmarks from my past. Restaurants, strip malls, and hotels are the common sites I remember. However, in other instances what used to be no longer exists. For whatever reason, I remember the Godfather Pizza/Chuck E. Cheese (building had 2 lives) on Sepulveda. That entire building is gone and replaced with a Whole Foods. I notice many other similar instances, mainly because of the "newness" of the buildings.
Surprisingly, traffic is not as bad as I remember. I also remember the "Esplanade" runs right along the beach. I decide that would be a nice drive. Unfortunately, I have difficulty finding it. I forgot it starts south of Redondo Beach Pier. I do find it though and start wishing I had a convertible.
I roll down all the windows and I am immediately hit by the smell of the Pacific Ocean. I could smell that salt in the air (very nice) along with the rotting seaweed (not so nice). I'm cruising along and notice many parents enjoying the morning with their kids; walking or biking along the boardwalk is a popular activity. The sight reminds me how much I miss S, J, & S.
The Esplanade is not a continuous road, so by sheer luck I make it to PV Boulevard. I suddenly remember that I don't have a camera. I also have to pee. I'm also getting hungry. I remember a Vons should be around here somewhere. The Vons is right where I remembered, so I quickly relieve myself and purchase a camera and some lunch.
I finally make it to the Malaga Cove parking lot and start the trek down to Rat Beach. My first stop is the gazebo overlooking the beach, PVBRC pool (a private club), and cliffs. Not too exciting, although I notice a sign that says "No Weddings Allowed per PVE ordinance etc." I chuckle and head for the path to the beach. Funny how youth distorts your impressions. To get to Rat Beach, you have to walk down a steep, paved path then walk along an easy path at the base of the cliff before you get to the beach itself. I remember the path up/down the hill as being very, very long. This time, it wasn't quite as long as I remembered.
I hit the beach and revulsion hits my senses. I had forgotten how west coast sand is more like soil & brown than the fine, white sand at the NC beaches. It took a while to re-adjust to the clay-like, sticky feeling.
Once on the beach, I'm having a great time. I immediately walk into the water. Brrrr! The Pacific isn't nice and warm like the Atlantic either. I stroll along in the water, though, until my feet are numb. Pelicans are dive bombing for food, a few surfers are out, and some families are enjoying a nice day at the beach. I plop down in the sand and watch some pathetic surfers and call Shannon. She's out at the Philly Pops with her Dad, but I talk with Wanda for a few minutes. Otherwise, I just relax and soak up the sun and waves. I walk down to Torrance Beach, chat with a lifeguard for a few (surf was awesome the day before, he said), then head back.
I return to the Malaga Cove parking lot and notice.....1) a wedding has just started in the gazebo and 2) I stepped in tar while on the beach. You can't go to the beach in LA without stepping in tar! It must have been a speed wedding, because they finish the ceremony and snap some photos before I finish cleaning my feet.
It's now time to head for the old homestead. I cruise along Paseo Del Mar (the scenic route) as far as I can. Along the way, I feel my architectural preservationist starting to grumble. I make it to Via Estudillo, park, and begin a walking tour. So here I am being a typical tourist. Our old house looks the same as the last photo I saw. A Volvo SUV is parked at the curb and shoes are piled by the front door. I contemplate knocking on the door, but chickened out (Shannon later chastised me). Instead, I walk out to the open field that has now become a park dedicated to Grandpa Proudfoot. It's beautifully landscaped and quite pleasant. Besides walking around Rico Place and Espinoza Circle, I didn't do much else in the 'hood. I didn't see anyone either. I did notice the Kowal's house looked oddly vacant even though there was a car in the driveway. I peeked in the windows and saw no furniture in the entire house. I wonder if the estate is still in probate? If so, is someone just living in the basement apartment as a caretaker? I take several photographs then head to PVHS.
Not much happening at PVHS. For being such a rich neighborhood, PVHS is really showing its age. All the buildings need painted, the original lockers are still in use, and all the portable classrooms from the 80's are still there. They can, however, spend a ton of money building an entirely new swimming pool. Are their priorities backwards? I find my old locker (#378) and use my old "Fonz" trick to get it open. Hit the door in the right spot and the door pops right open. I never did know the combination for that locker. Nice to see the current tenant is keeping it clean and neat....must be a girl. I try a similar "Fonz" trick on a door leading to the gym. Unfortunately, all the doors are new and I can't get inside. I really would have like to see the gym. I settle for strolling around the baseball field. While walking around PVHS, I realize what was bugging me about the houses. The architecture of the older houses in PVE is really quite stunning. I noticed numerous details, ones I never noticed before, that really give the houses character. The problem is that about 1 out of 4 houses is obviously new construction. Without question, everyone new house looks like a Mexican Villa. Stone washed adobe looking exterior, lots of arches, and every window has a little veranda. At least the houses weren't over-size for the lot. Several were erected in place of cute Cape Cods that were there in the 80's.
It's getting close to 3 PM. My trip down memory lane is quickly ending. It's time to head for the hotel to rest and get cleaned up. I decided to driver over the hill to get onto Hawthorne. On the drive, I notice the distinct difference in houses in Rancho Palos Verdes compared to PVE. RPV is looking rough...almost shoddy. I guess PVE is the place to live on the "hill".
The drive to the hotel in Carson (near the Home Depot Center) is uneventful, although traffic how I remember. Very bad. It doesn't help none of the stoplights are synchronized. Some things never change.
Random facts.
1. The parking lot at Torrance Beach now costs $5 per hour, $15 per day. It used to be free. I guess LA County is desperate for cash.
2. The statue of Poseidon(?) at Malaga Plaza has been replaced. Last time I saw it, his head and an arm were gone. Alas, the new one does not have water coming from his penis. Doc will be disappointed. I remember he always found that funny.
3. The houses along the cliffs at Rat Beach have built paths down the cliff from the house to some very nice patios/terraces at beach level. These folks dropped some serious cash. One was fully landscaped, had a little cabana, outdoor grill, seating for 20, and a hot tub.
4. Lunada Bay Hardware is still in business. The Lunada Bay Grocery is now an "organic market & bakery."
5. McCain-Palin signs were everywhere in PV. Surprised? I saw one Obama-Biden sign. It was very small and in the window. Might they have been embarrassed?
I exit the rental car lot and find my way to Sepulveda and start heading south. I immediately recognize several landmarks from my past. Restaurants, strip malls, and hotels are the common sites I remember. However, in other instances what used to be no longer exists. For whatever reason, I remember the Godfather Pizza/Chuck E. Cheese (building had 2 lives) on Sepulveda. That entire building is gone and replaced with a Whole Foods. I notice many other similar instances, mainly because of the "newness" of the buildings.
Surprisingly, traffic is not as bad as I remember. I also remember the "Esplanade" runs right along the beach. I decide that would be a nice drive. Unfortunately, I have difficulty finding it. I forgot it starts south of Redondo Beach Pier. I do find it though and start wishing I had a convertible.
I roll down all the windows and I am immediately hit by the smell of the Pacific Ocean. I could smell that salt in the air (very nice) along with the rotting seaweed (not so nice). I'm cruising along and notice many parents enjoying the morning with their kids; walking or biking along the boardwalk is a popular activity. The sight reminds me how much I miss S, J, & S.
The Esplanade is not a continuous road, so by sheer luck I make it to PV Boulevard. I suddenly remember that I don't have a camera. I also have to pee. I'm also getting hungry. I remember a Vons should be around here somewhere. The Vons is right where I remembered, so I quickly relieve myself and purchase a camera and some lunch.
I finally make it to the Malaga Cove parking lot and start the trek down to Rat Beach. My first stop is the gazebo overlooking the beach, PVBRC pool (a private club), and cliffs. Not too exciting, although I notice a sign that says "No Weddings Allowed per PVE ordinance etc." I chuckle and head for the path to the beach. Funny how youth distorts your impressions. To get to Rat Beach, you have to walk down a steep, paved path then walk along an easy path at the base of the cliff before you get to the beach itself. I remember the path up/down the hill as being very, very long. This time, it wasn't quite as long as I remembered.
I hit the beach and revulsion hits my senses. I had forgotten how west coast sand is more like soil & brown than the fine, white sand at the NC beaches. It took a while to re-adjust to the clay-like, sticky feeling.
Once on the beach, I'm having a great time. I immediately walk into the water. Brrrr! The Pacific isn't nice and warm like the Atlantic either. I stroll along in the water, though, until my feet are numb. Pelicans are dive bombing for food, a few surfers are out, and some families are enjoying a nice day at the beach. I plop down in the sand and watch some pathetic surfers and call Shannon. She's out at the Philly Pops with her Dad, but I talk with Wanda for a few minutes. Otherwise, I just relax and soak up the sun and waves. I walk down to Torrance Beach, chat with a lifeguard for a few (surf was awesome the day before, he said), then head back.
I return to the Malaga Cove parking lot and notice.....1) a wedding has just started in the gazebo and 2) I stepped in tar while on the beach. You can't go to the beach in LA without stepping in tar! It must have been a speed wedding, because they finish the ceremony and snap some photos before I finish cleaning my feet.
It's now time to head for the old homestead. I cruise along Paseo Del Mar (the scenic route) as far as I can. Along the way, I feel my architectural preservationist starting to grumble. I make it to Via Estudillo, park, and begin a walking tour. So here I am being a typical tourist. Our old house looks the same as the last photo I saw. A Volvo SUV is parked at the curb and shoes are piled by the front door. I contemplate knocking on the door, but chickened out (Shannon later chastised me). Instead, I walk out to the open field that has now become a park dedicated to Grandpa Proudfoot. It's beautifully landscaped and quite pleasant. Besides walking around Rico Place and Espinoza Circle, I didn't do much else in the 'hood. I didn't see anyone either. I did notice the Kowal's house looked oddly vacant even though there was a car in the driveway. I peeked in the windows and saw no furniture in the entire house. I wonder if the estate is still in probate? If so, is someone just living in the basement apartment as a caretaker? I take several photographs then head to PVHS.
Not much happening at PVHS. For being such a rich neighborhood, PVHS is really showing its age. All the buildings need painted, the original lockers are still in use, and all the portable classrooms from the 80's are still there. They can, however, spend a ton of money building an entirely new swimming pool. Are their priorities backwards? I find my old locker (#378) and use my old "Fonz" trick to get it open. Hit the door in the right spot and the door pops right open. I never did know the combination for that locker. Nice to see the current tenant is keeping it clean and neat....must be a girl. I try a similar "Fonz" trick on a door leading to the gym. Unfortunately, all the doors are new and I can't get inside. I really would have like to see the gym. I settle for strolling around the baseball field. While walking around PVHS, I realize what was bugging me about the houses. The architecture of the older houses in PVE is really quite stunning. I noticed numerous details, ones I never noticed before, that really give the houses character. The problem is that about 1 out of 4 houses is obviously new construction. Without question, everyone new house looks like a Mexican Villa. Stone washed adobe looking exterior, lots of arches, and every window has a little veranda. At least the houses weren't over-size for the lot. Several were erected in place of cute Cape Cods that were there in the 80's.
It's getting close to 3 PM. My trip down memory lane is quickly ending. It's time to head for the hotel to rest and get cleaned up. I decided to driver over the hill to get onto Hawthorne. On the drive, I notice the distinct difference in houses in Rancho Palos Verdes compared to PVE. RPV is looking rough...almost shoddy. I guess PVE is the place to live on the "hill".
The drive to the hotel in Carson (near the Home Depot Center) is uneventful, although traffic how I remember. Very bad. It doesn't help none of the stoplights are synchronized. Some things never change.
Random facts.
1. The parking lot at Torrance Beach now costs $5 per hour, $15 per day. It used to be free. I guess LA County is desperate for cash.
2. The statue of Poseidon(?) at Malaga Plaza has been replaced. Last time I saw it, his head and an arm were gone. Alas, the new one does not have water coming from his penis. Doc will be disappointed. I remember he always found that funny.
3. The houses along the cliffs at Rat Beach have built paths down the cliff from the house to some very nice patios/terraces at beach level. These folks dropped some serious cash. One was fully landscaped, had a little cabana, outdoor grill, seating for 20, and a hot tub.
4. Lunada Bay Hardware is still in business. The Lunada Bay Grocery is now an "organic market & bakery."
5. McCain-Palin signs were everywhere in PV. Surprised? I saw one Obama-Biden sign. It was very small and in the window. Might they have been embarrassed?
Sunday, October 12, 2008
Chapter 1: Travel
I am traveling to Los Angeles today. Earlier in the week I was ambivalent about returning to Los Angeles and Palos Verdes, where I grew up. In 20 years, I haven't had the desire to see my classmates or return to the area. This morning, however, I am strangely excited.
At first, I am only eager to walk along Rat Beach and watch the surfers. The beach and surfing were the only part of life in Palos Verdes I truly enjoyed. I remember, also, that the Redondo Beach Brewing Company is somewhere nearby. I love beer. I should check it out.
The planes are completely full. It is impossible to sleep even though I am exhausted. I work until my laptop battery is dead. Over an hour remains until we land in Los Angeles. So I reflect about my high school days and the reunion later that night. There are a few people I would not mind seeing. A few classmates perform interesting research that I have read about in various technical magazines. I expect a small group of attendees. Maybe with a small group conversations will be intimate and meaningful. I won't enjoy several hours of "living in NC, wife, 2 kids, dog, 2 cats, work in research." Too superficial. My biggest worry is that the reunion will be solely attended by the clics that have remained in contact with each other over the years. I'd definitely be an outsider in that situation. If that happens, maybe I could hang out with some spouses?
What else should I do until the reunion? Will I have time to visit the old house? What about the high school? Those places will be my next stops after visiting Rat Beach. I need to nap before the reunion so hitting the brew pub becomes optional.
We are flying over the LA basin. I am disappointed I don't have a window seat. I wish I could see Disneyland, the freeways, and PV as the plane lands. Maybe I will change my seat for the flight home.
I am waiting for my luggage. I'm really excited to hit the beach. Just my luck that my bag is one of the last ones. Thank goodness getting the rental car was quick and easy.
At first, I am only eager to walk along Rat Beach and watch the surfers. The beach and surfing were the only part of life in Palos Verdes I truly enjoyed. I remember, also, that the Redondo Beach Brewing Company is somewhere nearby. I love beer. I should check it out.
The planes are completely full. It is impossible to sleep even though I am exhausted. I work until my laptop battery is dead. Over an hour remains until we land in Los Angeles. So I reflect about my high school days and the reunion later that night. There are a few people I would not mind seeing. A few classmates perform interesting research that I have read about in various technical magazines. I expect a small group of attendees. Maybe with a small group conversations will be intimate and meaningful. I won't enjoy several hours of "living in NC, wife, 2 kids, dog, 2 cats, work in research." Too superficial. My biggest worry is that the reunion will be solely attended by the clics that have remained in contact with each other over the years. I'd definitely be an outsider in that situation. If that happens, maybe I could hang out with some spouses?
What else should I do until the reunion? Will I have time to visit the old house? What about the high school? Those places will be my next stops after visiting Rat Beach. I need to nap before the reunion so hitting the brew pub becomes optional.
We are flying over the LA basin. I am disappointed I don't have a window seat. I wish I could see Disneyland, the freeways, and PV as the plane lands. Maybe I will change my seat for the flight home.
I am waiting for my luggage. I'm really excited to hit the beach. Just my luck that my bag is one of the last ones. Thank goodness getting the rental car was quick and easy.
Prologue
It's Wednesday night. I am at home. Shannon and Tara just started the drive to Pennsylvania with the three babies. It's oddly quiet in the house.
I have never enjoyed being alone for extended periods, especially at home. There is a differnce with business travel I can't explain. The Sig Tau creed begins with the line "Believing that all men are social creatures..." I believe that is true. When I was living at the Sig Tau house, the coveted room was the single in the basement of the annex. By having the highest GPA, I earned the right to that room my last semester. I eagerly moved, but after a couple days I never spent any time there except to sleep. The room was too quiet and isolated. In short, I was lonely.
After everyone departed, I distracted myself by watching some TV and then working on the computer for a few hours.
Thursday I worked late and then took Raven with me to run some errands. Simple enough. I get home around 9 PM and I fall into bed exhausted. Raven is going to the kennel Friday. I love Raz and Tweedle, but they don't fufill the comforting presence I need. I need a plan for Friday night.
Raven was not very happy to be kenneled. I'm sure she'll be fine, but she did give me that "look." The "Hey, I go everywhere with the family; what am I doing here?" 'look'. I can sympathize, Raven. I don't like being apart from my family either.
After talking with our neighbor Ms. Shirley for a few minutes, I go inside to feed the cats and prepare for my trip to Los Angeles. This weekend is my 20th reunion for the Palos Verdes High class of 1988. I'm staying in California for the remainder of the week to attend a conference. Once finished packing, it takes less than 5 minutes for me to decide I need to be with people. I want to watch the Hurricanes season opener, so I head over to Federals. It's not until after I order a beer (Stone Brewery Porter...not as good as their Arrogant Bastard) that I realize the bar is full of Red Sox fans watching the game against the Rays. No hope of watching the hockey game here. To pass time until my glass is empty, I call Mom & Dad. While on the phone, Amy calls. Isn't it funny how those coincidences occur? I return Amy's call. Amy and Mark are my salvation for the evening. They invite me over for soup and drinks. I happily accept (I can read about the hockey game). My final night alone at home will be manageable.
I have never enjoyed being alone for extended periods, especially at home. There is a differnce with business travel I can't explain. The Sig Tau creed begins with the line "Believing that all men are social creatures..." I believe that is true. When I was living at the Sig Tau house, the coveted room was the single in the basement of the annex. By having the highest GPA, I earned the right to that room my last semester. I eagerly moved, but after a couple days I never spent any time there except to sleep. The room was too quiet and isolated. In short, I was lonely.
After everyone departed, I distracted myself by watching some TV and then working on the computer for a few hours.
Thursday I worked late and then took Raven with me to run some errands. Simple enough. I get home around 9 PM and I fall into bed exhausted. Raven is going to the kennel Friday. I love Raz and Tweedle, but they don't fufill the comforting presence I need. I need a plan for Friday night.
Raven was not very happy to be kenneled. I'm sure she'll be fine, but she did give me that "look." The "Hey, I go everywhere with the family; what am I doing here?" 'look'. I can sympathize, Raven. I don't like being apart from my family either.
After talking with our neighbor Ms. Shirley for a few minutes, I go inside to feed the cats and prepare for my trip to Los Angeles. This weekend is my 20th reunion for the Palos Verdes High class of 1988. I'm staying in California for the remainder of the week to attend a conference. Once finished packing, it takes less than 5 minutes for me to decide I need to be with people. I want to watch the Hurricanes season opener, so I head over to Federals. It's not until after I order a beer (Stone Brewery Porter...not as good as their Arrogant Bastard) that I realize the bar is full of Red Sox fans watching the game against the Rays. No hope of watching the hockey game here. To pass time until my glass is empty, I call Mom & Dad. While on the phone, Amy calls. Isn't it funny how those coincidences occur? I return Amy's call. Amy and Mark are my salvation for the evening. They invite me over for soup and drinks. I happily accept (I can read about the hockey game). My final night alone at home will be manageable.
Thursday, October 2, 2008
Tonight!!!
Something a friend of mine posted on a blog recently reminded me of a conversation I had with my mom during this last visit. Specifically, we were wondering why Hillary Clinton is often referred to as a "b*tch" while Sarah Palin is simply referred to as "feisty." To me, they are both motivated people who know what they want and go after it. So, why all of this negativity about Hillary while people treat Palin with kid gloves. Is it because Palin is prettier (she is a beauty queen, after all), not as smart (how many colleges did she attend before getting a degree), was able to have more children including a developmentally disabled one and one that got herself knocked up out of wedlock (if that doesn't elicit sympathy, I don't know what does), etc.? I don't know, but I find the love affair that some have with Palin troubling. Maybe especially because Palin scares me to death despite her cutsie hockey mom claims. I am thankful that some, including those in her own party, are starting to get nervous as well. Political analysis has shown that elections are rarely decided by the vice presidential picks...I wonder if this time will be different. Tonight's debate should be very, very interesting...maybe even amusing considering that Palin avoids answering questions and fakes answers to questions she doesn't know and Biden's potential to "gaffe" on occasion. I know that I will be watching!!!
Wednesday, October 1, 2008
Jon's Thoughts on the Causes of the Financial Crisis
Everyone, or just about everyone, has heard about the credit crunch and potential major problem with the global economy. If you've listened to or read the news this week, the rejection of the first bailout by the House was partly blamed on John and Jane Q. Public's failure to understand that the unresolved credit crunch can affect individual families and "Main Street" as well as bankers and "Wall Street."
This evening while driving to dinner (side bar: supposedly the best pizza in Birmingham...okay but not great. Sauce tasted like sugar water. Toppings and whole wheat crust were excellent.), NPR was trying to put a "Mom and Pop" flavor on the financial crisis by interviewing small business owners. These owners cannot get $20,000 to $50,000 lines of credit from any bank to cover gaps created by the lag between accounts receivable and payable. As a result, the owners are 1) laying off employees or 2) not hiring new employees even though they want to.
This story was the latest one I've heard or read in the last week trying to convince the public of the need for a bailout.
I, for one, still am not convinced of the need for the bailout. I have been following the story, mainly through Baron's but also from radio and newspaper reports. I understand banks may have leveraged themselves $30 to $1 (i.e., the bank may actually have only $1, but they owe $30). But if you look back at oil and commodities prices over the last 12 to 18 months, you can see a picture as to why this occurred and why inflation is around 5%.
The simple answer is: GREED!. Artificially cheap credit drove a housing bubble that raised home prices and fueled NYSE growth. The Fed raised interest rates a few years ago to slow the ecomony to keep inflation low. ARMs readjusted at a higher rate, and a few mortgage defaults started.
At the time, I don't think anyone but the bankers knew their dollars were highly leveraged and they couldn't pay off debts. However instead of coming clean then, they looked for another investment to 1) cover their debts and 2) keep the financial growth rate elevated. Whether the banks acted jointly (criminal charges should be filed if this is proven) or one started and the others quickly deciphered their plan (most likely, IMHO), banks are guilty of the spike in oil and commodity (corn, wheat, soybean, metals, etc) prices.
Whenever, the media hyperbolized the effect of "insert natural disaster du jour or War on Terror development here" on oil or commodity prices (as appropriate), bankers artificially drove up the price of that commodity as their excuse to make more profits. The excessive volatility we have seen is the effect of bankers selling large positions in these markets to obtain cash to pay off short term debt, resulting from the housing mess, that had come due. Gullible John and Jane Q. Public accepted these price increases and volatility as 1) the new economy, 2) China's and India's fault, 3) no one knew what was happening, or 4) any other somewhat rational reason you can imagine.
Eventually, the inflation caused by the higher oil and commodities slowed the economy because John and Jane finally decreased their driving and stopped spending. "Uh Oh" say the bankers (and nephew Kendal, but he'll be a scientist or engineer when he grows up....not a banker) as oil and commodity prices fall dramatically because oil stockpiles are at record levels and the 2008 corn/wheat/soybean crop will be excellent.
With oil back at $100 per barrell (vs. $148) and corn at $4.80 per bushel (vs. $8), these bubbles have popped and bankers no longer have a mechanism to pay off their short-term debt. Hence, major defaults, bankrupt banks, and the "need" for a bailout. Note, the bankers could "short-sell" stocks, but the SEC banned short-selling recently.
So, what does bankers greed and the bailout have to do with John and Jane Q. Public's inability to get credit? In my opinion, ABSOLUTELY NOTHING.
Imagine the bailout does not occur and the economy returns to where it was in 2000 (as some experts predict). Yes, many companies will go bankrupt. Banks will not have the cash reserved to pay off their highly leveraged debt. Companies with receivables from the banks will go bankrupt because they will not get paid. I favor this type of free market cleansing of old ideas and mistakes (call it Darwinism). However, will all credit vanish? No! Because back in 2000 we easily obtained a mortgage at an obscenely low fixed rate and were able to get a loan to buy a car.
If credit and loans were easy to obtain in 2000, banks should not punish John and Jane Q. Public now by withholding credit in an effort to save themselves. If anything, banks should be giving these loans. How else do they make money than through interest on loans (okay, annoying service charges and fees don't count). Or the Feds can give the bailout money to small businesses. $700 billion dollars would give 1 million small businesses a $100,000 loan to cover expenses. Some politicians constantly preach that small businesses are the U.S. economy. Besides, the $50,000 some businesses need probably is a small fraction of the annual bonus some of these bankers received while creating this mess.
The only possible reason for the bailout is that sovereign nations (China, Thailand, etc.) will be upset because they purchased the CDOs from the banks thinking they were safe investments. That would be bad because these countries also finance our huge budget deficitis. We don't want to make them mad and they'd withhold their money. Then we'd really be in a serious mess. Who would bailout the U.S.?
This evening while driving to dinner (side bar: supposedly the best pizza in Birmingham...okay but not great. Sauce tasted like sugar water. Toppings and whole wheat crust were excellent.), NPR was trying to put a "Mom and Pop" flavor on the financial crisis by interviewing small business owners. These owners cannot get $20,000 to $50,000 lines of credit from any bank to cover gaps created by the lag between accounts receivable and payable. As a result, the owners are 1) laying off employees or 2) not hiring new employees even though they want to.
This story was the latest one I've heard or read in the last week trying to convince the public of the need for a bailout.
I, for one, still am not convinced of the need for the bailout. I have been following the story, mainly through Baron's but also from radio and newspaper reports. I understand banks may have leveraged themselves $30 to $1 (i.e., the bank may actually have only $1, but they owe $30). But if you look back at oil and commodities prices over the last 12 to 18 months, you can see a picture as to why this occurred and why inflation is around 5%.
The simple answer is: GREED!. Artificially cheap credit drove a housing bubble that raised home prices and fueled NYSE growth. The Fed raised interest rates a few years ago to slow the ecomony to keep inflation low. ARMs readjusted at a higher rate, and a few mortgage defaults started.
At the time, I don't think anyone but the bankers knew their dollars were highly leveraged and they couldn't pay off debts. However instead of coming clean then, they looked for another investment to 1) cover their debts and 2) keep the financial growth rate elevated. Whether the banks acted jointly (criminal charges should be filed if this is proven) or one started and the others quickly deciphered their plan (most likely, IMHO), banks are guilty of the spike in oil and commodity (corn, wheat, soybean, metals, etc) prices.
Whenever, the media hyperbolized the effect of "insert natural disaster du jour or War on Terror development here" on oil or commodity prices (as appropriate), bankers artificially drove up the price of that commodity as their excuse to make more profits. The excessive volatility we have seen is the effect of bankers selling large positions in these markets to obtain cash to pay off short term debt, resulting from the housing mess, that had come due. Gullible John and Jane Q. Public accepted these price increases and volatility as 1) the new economy, 2) China's and India's fault, 3) no one knew what was happening, or 4) any other somewhat rational reason you can imagine.
Eventually, the inflation caused by the higher oil and commodities slowed the economy because John and Jane finally decreased their driving and stopped spending. "Uh Oh" say the bankers (and nephew Kendal, but he'll be a scientist or engineer when he grows up....not a banker) as oil and commodity prices fall dramatically because oil stockpiles are at record levels and the 2008 corn/wheat/soybean crop will be excellent.
With oil back at $100 per barrell (vs. $148) and corn at $4.80 per bushel (vs. $8), these bubbles have popped and bankers no longer have a mechanism to pay off their short-term debt. Hence, major defaults, bankrupt banks, and the "need" for a bailout. Note, the bankers could "short-sell" stocks, but the SEC banned short-selling recently.
So, what does bankers greed and the bailout have to do with John and Jane Q. Public's inability to get credit? In my opinion, ABSOLUTELY NOTHING.
Imagine the bailout does not occur and the economy returns to where it was in 2000 (as some experts predict). Yes, many companies will go bankrupt. Banks will not have the cash reserved to pay off their highly leveraged debt. Companies with receivables from the banks will go bankrupt because they will not get paid. I favor this type of free market cleansing of old ideas and mistakes (call it Darwinism). However, will all credit vanish? No! Because back in 2000 we easily obtained a mortgage at an obscenely low fixed rate and were able to get a loan to buy a car.
If credit and loans were easy to obtain in 2000, banks should not punish John and Jane Q. Public now by withholding credit in an effort to save themselves. If anything, banks should be giving these loans. How else do they make money than through interest on loans (okay, annoying service charges and fees don't count). Or the Feds can give the bailout money to small businesses. $700 billion dollars would give 1 million small businesses a $100,000 loan to cover expenses. Some politicians constantly preach that small businesses are the U.S. economy. Besides, the $50,000 some businesses need probably is a small fraction of the annual bonus some of these bankers received while creating this mess.
The only possible reason for the bailout is that sovereign nations (China, Thailand, etc.) will be upset because they purchased the CDOs from the banks thinking they were safe investments. That would be bad because these countries also finance our huge budget deficitis. We don't want to make them mad and they'd withhold their money. Then we'd really be in a serious mess. Who would bailout the U.S.?
Sigh...
Well, it turned out that I didn't catch Jacqueline's cold! BTW, her sniffles were gone by the weekend and, all in all, it was not bad.
I thought that it was weird that nursing Sophie early Monday morning sorta hurt, but I chalked it up to being very engorged. After I got her back to sleep, I had trouble getting to sleep myself and then woke up feeling headachey, feverish, and naseous. I took my temperature, and it was 100.5 degrees. My first thought was "uh, oh!" and to take a look at my boobs. Sure enough, there was a tell-tale red patch on my right breast. Mastitis AGAIN!
My fever broke luckily before lunch, so I felt so much better and told Jon to go to work. At 2 p.m., Sophie, Jacqueline, and I went to the doctor (had to go back to Durham OB/GYN because it is after my post-partum period) so that they could evaluate me. Kind of a bummer that they just would not call in a prescription for me. I saw Dr. Duncan, who was the doctor who diagnosed the PPROM with Baby Thornburg. He did not know that I was pregnant and had twins and seemed genuinely excited and happy for us. This must be the happy side of being an OB/GYN, not what he had to do to us a little over a year and a half ago.
He took a look, confirmed my diagnosis, and gave me a script for Augmentin. I went to Costco to fill it immediately (fever came back so I felt like I was dying while I waited for it to be ready). I must have caught it very early because, after being on the antibiotics for two days and resting a bunch, I feel SO much better. I also don't seem to have any production issues because the twins still seem satiated. Breathing a sigh of relief...
In other good news, Sophie has returned to sleeping through the night. Maybe she was fighting off a cold or it was the change in routine with Babcia and Dzia-Dzio going back home or it was something different like a little acid reflux. Who knows? But, things appear to be getting back to normal. I've even gotten her to giggle a couple times more by giving her raspberries on her neck...nothing as good as that first time, which makes me wonder if it was gas issues that were waking her up in the middle of the night.
Jon is in Birmingham as of yesterday until late tomorrow night. We are all doing surprisingly well...I must be getting used to this motherhood thing! Mike, Tara, and Alina are also coming tomorrow night for a weekend visit. Then, on Wednesday, Tara, the girls, and I drive up to Pennsylvania for a week's visit while Jon is in California for his high school reunion and a work conference. We will all see each other briefly the following weekend before he leaves for work again. It is a busy time for us all!!! But, exciting!!!
I thought that it was weird that nursing Sophie early Monday morning sorta hurt, but I chalked it up to being very engorged. After I got her back to sleep, I had trouble getting to sleep myself and then woke up feeling headachey, feverish, and naseous. I took my temperature, and it was 100.5 degrees. My first thought was "uh, oh!" and to take a look at my boobs. Sure enough, there was a tell-tale red patch on my right breast. Mastitis AGAIN!
My fever broke luckily before lunch, so I felt so much better and told Jon to go to work. At 2 p.m., Sophie, Jacqueline, and I went to the doctor (had to go back to Durham OB/GYN because it is after my post-partum period) so that they could evaluate me. Kind of a bummer that they just would not call in a prescription for me. I saw Dr. Duncan, who was the doctor who diagnosed the PPROM with Baby Thornburg. He did not know that I was pregnant and had twins and seemed genuinely excited and happy for us. This must be the happy side of being an OB/GYN, not what he had to do to us a little over a year and a half ago.
He took a look, confirmed my diagnosis, and gave me a script for Augmentin. I went to Costco to fill it immediately (fever came back so I felt like I was dying while I waited for it to be ready). I must have caught it very early because, after being on the antibiotics for two days and resting a bunch, I feel SO much better. I also don't seem to have any production issues because the twins still seem satiated. Breathing a sigh of relief...
In other good news, Sophie has returned to sleeping through the night. Maybe she was fighting off a cold or it was the change in routine with Babcia and Dzia-Dzio going back home or it was something different like a little acid reflux. Who knows? But, things appear to be getting back to normal. I've even gotten her to giggle a couple times more by giving her raspberries on her neck...nothing as good as that first time, which makes me wonder if it was gas issues that were waking her up in the middle of the night.
Jon is in Birmingham as of yesterday until late tomorrow night. We are all doing surprisingly well...I must be getting used to this motherhood thing! Mike, Tara, and Alina are also coming tomorrow night for a weekend visit. Then, on Wednesday, Tara, the girls, and I drive up to Pennsylvania for a week's visit while Jon is in California for his high school reunion and a work conference. We will all see each other briefly the following weekend before he leaves for work again. It is a busy time for us all!!! But, exciting!!!
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