WALL STREET OR WAALSTRAAT?

We have heard a lot lately about securities made up of bundled mortgages (or parts thereof). This financial instrument has been characterized as a new way of distributing risk, and giving people more opportunties for profit. Of course, when it turned out that the mortgages in some of these securities turned out to be worse than average (i.e. higher default), lots of people lost lots of money.

This morning I was reading A Splendid Exchange: How Trade Shaped the World, by William J. Bernstein. It is a pretty interesting book, and does track some of the major trends in world trade from the earliest days. On pages 235 and 236 there is a discussion about the Dutch East Indies Company's effort to fill its personnel needs.

This grisly recruitment effort was run by a specialized corps, composed mostly of women, the zielverkoopers (literally, “soul sellers”). Their marks were the young foreign men, mainly from Germany, who swarmed into Dutch cities seeking their fortune. In return for a cut of their signing advance and future pay from the Company, the women advertised room, board, and the kind of entertainments usually sought by unattached young men, during the weeks and months until they sailed for Asia.

The reality fell far short of the promise. One contemporary report described three hundred men in a single attic:

where they must stay day and night, where they perform their natural functions, and where they have no proper place to sleep, but must lie higgledy-piggledy on top of each other . . . the death rate is so alarming that the owners, not daring to report the correct number of deaths, sometimes bury two bodies in one coffin.

Holland being Holland, this Faustian transaction yielded a financial instrument, in this case the transportbrief—a marketable security entitling the zielverkooper to a cut of the recruit’s wages, paid by the Company as they were earned. Other investors then bought these securities at a discount that reflected the high death rate of VOC personnel and assembled them into profitable, diverse pools of human capital. These magnates were called, naturally enough zielkoopers—buyers of souls. When, in the eighteenth century, the mortality among VOC’s soldiers and sailors soared because of lax Company procedures, many zielkoopers went bankrupt.

Wait, wait, wait. The Dutch in the seventeenth and eighteenth centuries had already created a financial instrument that bundled payments with a portion of risk and subdivided the risk among many investors. And in that same era, when the contracts making up the financial instrument were worse than average (i.e. more people than normal died) lots of people lost lots of money?

First, those asshats on Wall Street have never invented anything that the Dutch didn't do 300 years ago, have they? Second, does this mean that the outcome of the current crisis could be that we would become more Dutch? And you thought Starbucks was beneficial to the "coffeeshop culture." You ain't seen nothing yet.

SOME STAFFER JUST GOT FIRED

I did not watch the third debate. I was otherwise occupied with young mister walking pneumonia and his hilarious bedtime antics. However, I did just watch the clip below, and I have to say it: some McCain staffer just got fired. You cannot, cannot, cannot send your guy out there to spin his own hypothetical and then have him be gobsmacked like this.



My goodness, McCain blinked more times than most mammals are able to. Just think about the fact that McCain could have spun ANY story he wanted, and the one he spun turned into that. You could almost see the wind get knocked out of him.

IT'S ALL IN THE DELIVERY

I have been hearing reports about crowds, particularly at Palin events, getting a little . . . vocal. Yelling "traitor" and "liar" when Obama's name is mentioned is a little outside the mainstream (booing is more typical, although as an adult, do you REALLY react to someone's name?). Sarah Palin's speeches have probably helped to get people riled up. When she insinuates that Obama is a terrorist because he served on a board with one, or when she says "he doesn't see America like you and me" the crowd understands that this is beyond policy.

All of this makes me pine for the days of Pitchfork Pat Buchanan. Pat was all a big culture warrior. He could zing 'em like nobody's business. Remember the Culture War speech?

The agenda Clinton & Clinton would impose on America--abortion on demand, a litmus test for the Supreme Court, homosexual rights, discrimination against religious schools, women in combat units--that's change, all right. But it is not the kind of change America needs. It is not the kind of change America wants. And it is not the kind of change we can abide in a nation we still call God's country.

That speech is remembered because (a) people thought it drove moderates away from Bush I (although I think Dana Carvey did that), and (b) Pat said it all without his usual smirk. See, I always thought that Pat knew he was pulling our legs just a little bit. He always said the extra thing to get people riled up, but he'd sort of smile in a way that made me think it was part shtick. Watch Pitchfork Pat here:



I think if Sarah Palin is going to differentiate herself from a lot of other low-level rabble rousers, she needs to either tone down the rhetoric, or learn to dial it back a little, Buchanan-style.

P.S. McCain did the right thing by trying to tone this rhetoric down.

ALL THINGS TO ALL PEOPLE

Today the Nobel people awarded the Nobel in Literature to Jean-Marie Gustave Le Clezio. He's a French writer, and is apparently an author of "new departures, poetic adventure and sensual ecstasy, explorer of a humanity beyond and below the reigning civilization."

I have to admit that I have no earthly idea what the quote above means. I have not read any of le Clezio's works, so maybe that would help. However, it kind of feels like a typical Nobel literature pick. How can people possibly evaluate writers from literally everywhere in the world and then compare them to award a prize. Look at Orhan Pamuk. The Nobel people say that he was "in the quest for the melancholic soul of his native city has discovered new symbols for the clash and interlacing of cultures." That is probably a good description of the Pamuk I've read, but if you are not familiar (and I mean VERY familiar) with Istanbul, how can you evaluate Pamuk's work? I could say the same for Naguib Mahfouz and Gabriel García Márquez. Their writings are very culturally and historically specific.

This is part of why I decided to read the Pulitzer Prize winners, instead of Nobel Prize winners. To get anything more out of Mahfouz than the obvious meaning of the words I had to take a n0n-Western literature class in college. I just don't have the time to learn enough about the history and culture of these places to give these works their full value. I guess the Nobel people have that kind of time.

SHADES OF A BYGONE ERA

You might have noticed that the economy is in serious trouble right now. Forget the Dow, and try to get banks to lend to each other, and to others for a change. Sheesh. The banks seem to have gone from a bizarrely reckless disregard for loan risk to a bizarrely paranoid risk analysis.

Anyway, in a news story that seems like it is out of the Dust Bowl or something, Crain's is reporting that Cook County Sheriff Tom Dart has ordered his deputies to stop taking part in evictions where the property has been foreclosed on. In other words, if you are a bank foreclosing in Cook County, you are going to need to find someone else to be the muscle for evictions.

I can hardly believe that. Dart says that too many of these evictions have been renters who paid rent, but had the building foreclosed on from under them. That is a tough break, but the man who is theoretically the top cop in Cook County seems to have thrown his lot in with them. What is really interesting about this is that Dart is undoubtedly someone's boy (that's how it works in Cook County) and it is unlikely that he would do something like this without there being some agreement above him in the food chain.

I wonder if this sort of populism that we will see sweep the nation. You can imagine why people would be afraid for the entire system if the police start enforcing laws that are "right" instead of "the law" but it is also hard to fault Dart for thinking evictions like this are bullshit. We shall see. We shall see.

THE CONSPIRACY FILES

I have been reading a lot of Green Eggs and Ham, and Curious George Plays Baseball of late. Like, probably 20 times each in the last 10 days. Frankly, I do not have huge issues with Green Eggs and Ham. Sam-I-Am is a pain in the ass, and railroad construction in Whoville seems substandard, but otherwise, meh.

Curious George Plays Baseball, on the other hand, is rife with inconsistencies. And not just in the (extremely) poor depiction of a baseball game, either. No. Right from the beginning something is fishy. First, The Man in the Yellow Hat leaves George in the stands to go "say hello to Jimmy's mother." However, within a few pages, Jimmy's mother is in the stands, and the Man in the Yellow Hat is . . . not with her. Where is he?

Next, George (predictably) gets into trouble. SPOILER ALERT! George hits practice balls into the field of play during the game. The umpire tells the players to "get that monkey!" As the players start after George you realize that all three of them are identical! Are they triplets? Are they Adam 1 through 3 (although one of them is wearing number 8, so apparently there are at least eight of them). Is the whole blue team made up on genetically clones super mutants? That seems like it would be interesting.

The players chase George up a flag pole. The pole does not have an American flag atop it. Why not? Is this story depicting an America run by terrorists? Wasn't the author of the Curious George books born in Hamburg? Is this the kind of America the Man in the Yellow Hat and his ilk have created? Is George a symbol for the anarchist immigrants of the early 20th century? Is THAT why he's always in trouble? I'm not insinuating anything. I'm just asking a question.

Later in the book Adam 8 hits a foul ball that is about to hit Jimmy's mom in the stands. It appears that Adam 8 is the second batter of the game. The first hits a fly out to the outfield. Then George sprays line drives on to the field, then the foul ball is hit. The pitcher has thrown 1/3 of an inning. Anyway, George reaches out and snags the foul before it hits Jimmy's mom. Everyone cheers for George and they tell him to come down from the flag pole. When he does, the Man in the Yellow Hat shows up, tells George that "he's seen the whole thing" and they LEAVE.

Look, I don't want to speculate on what the Man in the Yellow Hat is really at the ball game for. I'm not saying that he didn't meet his drug connection, or have some sort of tryst in the park bathrooms, or something similar. I'm just saying that something in this book does not add up.

THURSDAY NIGHT

So, the Cubs are making me throw up in my mouth right now. Four errors in a playoff game is just bizarre. Sadly, because I am a Cub fan deep, deep down, all I can do is hope and suffer. If this were the Bulls or Bears, I could be disgusted with the play and move on. With the Cubs it hurts much deeper down. So, now I root for a huge comeback, and I hope and pray they avoid a sweep (again).

On to the debate last night. I know a lot of lefties who were sure that Palin would be an absolute train wreck. They pictured an entire debate like this, where Governor Palin literally could not name a single magazine or newspaper that she read, or this, where she can only name one Supreme Court decision that she disagrees with* (Roe v. Wade, of all cases, sheesh). They were wrong. Palin did not get elected governor of Alaska because she was a complete moron who could not answer a question. Watch the answer at 5:08 here. It is a good answer. It is political and coherent. That should have been the expectation.

So, did Palin meet that expectation? It is hard for me to say that she did. First, Palin's "say it ain't so, Joe" is another example of that campaign failing to connect with any popular culture after 1980 or so. "Say it ain't so, Joe" is in our lexicon because a young baseball fan allegedly said it to Shoeless Joe Jackson (!) after the 1919 World Series. McCain may remember that, but most of the rest of us don't. She then segued to "there you go again," which is a rip off of Reagan hammering Carter in 1980. In other words, her most memorable line was a double riff off of material 28 or more years old. This is not sending a "change" message to people who know the history of this line, and was not, in my opinion, well enough delivered to resonate with people who do not know the history. In other words, it seems to have resonated with Reagan Republicans.

Otherwise, in the parts I saw, Palin didn't do anything wrong, but she did not do anything that would really help either. At one point I was ignoring Palin's talk and just contemplating that sometimes it looks like Palin is doing a Tina Fey imitation, instead of vice versa. For God's sake, it's October 3, and McCain is abandoning Michigan to Obama. They simply do not have time to play "don't screw it up" ball. Check out this page, particularly the FAQ to see where McCain appears to stand. Today he is badly trailing in Pennsylvania, Michigan, and Iowa. He is trailing pretty substantially in Ohio, Virginia, Florida, and Colorado. Indiana, North Carolina, and Missouri appear to be in play. If McCain is spending time shoring up Indiana, North Carolina, and Missouri, he literally is not able to get to 270 electoral college votes.

Frankly, it is not clear what McCain's path to 270 is. In fact, it kind of seems like McCain has been trying to win the national vote, rather than win the right combination of the individual state elections to be president. Why else has he been in Iowa in the last week? For the down-ticket Republicans? They'd probably prefer for him to lock Virginia, North Carolina, and Florida up and ride the good news to higher popularity than have a rally in Iowa, where he seems destined to lose. Meanwhile, the Obama team has done to McCain what they did to Clinton. Understand the rules of the election game, and play to the rules. It is starting to look like the result will be the same.

* The interesting this about this answer is not that Roe is the only case she knows she disagrees with. The interesting thing is that she says she believes that there is an inherent right of privacy in the Constitution, but that states should define the scope of that right (at least with respect to abortion). Presumably she does not think that the same sort of bifurcation should be employed with respect to the right to bear arms. Or does she? Wouldn't that be interesting? How about the right to free exercise of religion? Free speech? Trial by jury? Why aren't people picking up on that? That's really a big deal. Stupid pundits.

BASEBALL PLAYOFFS

So, the Cubs start playing tonight. They have been the best team in the National League this year. They play the Dodgers, who played in the worst division in baseball, and finished 84-78, on a schedule that allowed them to play more games against the likes of the Pads, the Giants, and the Rockies. The Dodgers had 13 fewer wins than the Cubs, playing an easier schedule.

The Dodgers have Furcal, who lost his job with the Cubs to Ronnie F-ing Cedano (who lost it to Ryan Theriot within the year) and Nomar Garciaparra coming back from injuries. Nomar has not been good in five years. The Dodgers have a couple of good pitchers, but after all, they were a .500 team this year.

The Cubs have a slight tweak on Mark DeRosa's calf, and Big Z has been . . . erratic . . . of late. He got shelled, threw a no hitter, then got shelled. That's really it.

So, why have I heard Mike & Mike from ESPN radio, Peter Gammons, Peter Pascarelli, and other baseball talking heads predict that the Dodgers are the favorite in this series? Don't get me wrong. I am terrified of the ever-dreaded five game series. It is too short, and anything can happen. I would prefer that this be a seven game series. However, how did the Dodgers become the trendy pick? Is it because the Cubs crapped out against Arizona last year? You know, the playoffs that the Dodgers watched from home while Arizona, San Diego, and Colorado fought for two playoff spots. I don't get it.

So, my prediction? Cubs in 3. What the hell. I'm a homer.