
I have registered to play in the PokerStars World Blogger Championship of Online Poker!
The WBCOOP is an online Poker tournament open to all Bloggers.
Registration code: 298358

I have registered to play in the PokerStars World Blogger Championship of Online Poker!
The WBCOOP is an online Poker tournament open to all Bloggers.
Registration code: 298358
10:35 AM in Games | Permalink | Comments (0) | TrackBack (0)
29-0 at the end of the third! The aubies started leaving with five minutes left to go on the third quarter. I have already been given one half of the peace sign by some obnoxious barner! This is getting good.
05:24 PM in Sports | Permalink | Comments (2) | TrackBack (0)
03:05 PM in Sports | Permalink | Comments (0) | TrackBack (0)
Emerson was dropped off early this afternoon so her grandparents could go vote, which meant that I knocked off work early as well. Not that I was getting much done. Having gotten my essential work done this morning, I was full of nervous energy, my minding wandering in anticipation of a night of election watching.
We played together and were joined by momma in short time. Together we go to the back yard and enjoy the idyllic temperatures that this early November evening offered. Mom and Emerson went to deliver a gift we had gotten for a neighbor in need, while I sat on the hill in the back of house alone. It was quiet and still. The sun had set but light had not yet been hidden. I enjoyed the moment, I looked at the brick red leaves of our fledgling crape mrytle silhouetted against a custard colored sky. And I experienced a wave of contentment and hope. Blessed by a family I adore and can't imagine life without, surrounded by a growing number of friends that I love, who challenge me and garner my respect, buoyed by what might could happen in business, in politics, in life, I felt whole. A feeling that I rarely get to experience.
Tonight, I watched what I didn't think I would see in my lifetime. I witnessed the promise of America and was overwhelmed. Just as President-Elect Obama was beginning his speech, Emerson began to cry. Mom went and got her and the three of us sat on the couch in silence and witnessed history.
Just 60 years ago, Obama would not have been able to dine in the same area as I or drink from the same water fountain. It wasn't long ago that he would have even been able to vote, but there he stood. Speaking not of division but of unity, not of war but of working together for peace. There he spoke, elected by a majority of American's and in one night, I felt that this country was able to restore much of its reputation that we have so undermined these last eight years. I am not naive enough to think that our great challenges have been solved or that difficult days won't lie ahead, but tonight I was filled with hope that my daughter will have the opportunity to grow up in a world where people are truly judged by their character not their skin. And that alone is worth it for me.
The sun set this afternoon in the most pleasant of ways and tomorrow I will wake up to a new one. New in more ways that I think I could ever imagine.
12:12 AM in Current Affairs, Personal Reflection, Politics | Permalink | Comments (0) | TrackBack (0)
Politico is reporting that Colin Powell may be making a public endorsement for Barack Obama this Sunday on Meet the Press. It is said that Powell wanted to wait until he saw all three debates before making a decision. Apparently, Powell saw what most all of us saw. An incredibly gifted intellect with a calm, presidential demenaor. This has to hurt McCain the most, but Powell like most of us are tired of the bemeaning, sacrastic, antagonistic politics that have marked the Republican reign and have proven to utlimately undermined the McCain/Palin ticket.
Thank you again, General Poweell, for serving your country proudly.
09:55 AM | Permalink | Comments (0) | TrackBack (0)
08:35 AM in Sports | Permalink | Comments (1) | TrackBack (0)
In an effort to distract me from my card play, someone at our home poker game asked me what I thought about the "bailout" that passed last week. After the 2nd sentence of explanation, it was obvious that they either didn't really care or just enjoyed taking my chips while I tried to explain how we got here and why I felt something, "bailout" or something else had to be done. It was also obvious to me that I don't have an easy answer that connects. So for those interested in why it seems all hell has broken loose economically, I will try to give the old college try.
Everything starts during the real estate bubble. Remember that? Real estate was suppose to be where the money was to be made. You turn on a cable channel and watch, "Flip my house" or "What's my house worth?" That these shows were even green lighted, much less popular should have been symptom number one that something was going awry. When you watch a "realtor" show a house for entertainment, there is a problem..
The fact is everyone wanted part of the action. After all, you would hear of people making eye popping profits and with interest rates low, real estate going up (after all they don't make any more of it, you know), people of all financial levels were catching the American dream.
With so many people buying houses they really couldn't afford and the mortgage business being an extremely profitable venture, there was fierce competition to originate loans despite the ability of the borrower to be able to repay. That coupled with the fact that most mortgages could be sold off, there was little reason to be concerned about the risk because the agent could get his fat commission, sell the loan off for someone else to worry about. These loans were then bundled together with other loans in instruments called CMO (Collaterialized Mortgage Obligations) or CDO (Collaterized Debt Obligations). The higher the average risk of the loan in those instrument the higher the yield. Which leads us to what should have been a second harbinger of things to come. When you are getting 10-12% returns on securites that are considered "fixed income" you should know something isn't right. You don't buy fixed income securities for "return" but rather for security and income, not growth.
Okay, back to the borrower. Here is what a conversation may have sounded like in a typical mortgage office.
AGENT- "How can I help you?"
BORROWER- "Um, I want to move into a house with a better school for my kids (notice we always justify our greed with our kids."
AGENT- "Great! How's your credit?"
BORROWER- "Well, that's the thing, it isn't that great, but I think this home will be a great investment and, you know, my kids can go to this great school. I may even sell this home to fund my retirement. Can you help people with crappy credit?"
AGENT- "Oh sure, that's why we are here, to help people...."
BORROWER- "Well, I make....
AGENT- "No, no, no, don't worry about that, we can get a loan that you can afford. How much a month could you pay?"
BORROWER- "Uhhh, I don't know, maybe $800 per month, but my credit.....
AGENT- "Hey, like I said, don't worry about. I am here for you. Here's what you do. We will put you in an Adjustable Rate Mortgage, you will only pay like 4% interest for 2 years. That will keep you monthly payment at $800. By paying it, you will improve your credit, and with this great investment going up, you will be able to use the equity to refinance into a fixed rate loan and get a good interest rate because your credit will be all fixed."
BORROWER- "Wow! That's sounds great, but you said something about 2 years, what happen when...."
AGENT- "You come back to me and we will refinance! It's a win-win for everyone."
BORROWER- "Oh, thank you, thank you. This is a dream come true."
The agent gets a huge commission, the borrower get's his kid into THE school system, and some investment bank gets another mortgage to bundle up to sell to pensions, institutions, and individual investors. All is good.
The poor insurance industry however was missing out on this orgy of money, so they decided to get in on the action. They recognized that many of these bundled securities are being sold to people who like safety. So they decided to sell an insurance equivalent on those securities. The idea being that they would insure these investments should they blow up. They called these "credit default swaps." Notice the name. They will swap the risk should the credit represented in those loans default. These proved to be extremely popular (and profitable). It has been estimated that there were about 62 trillion in credit default swaps issued. That is trillion!
You will also notice that I said estimated, because no one really knows. Why? Because, notice that credit default swaps are not called what they are, insurance. Insurance in not in the name. Why? Because insurance is regulated by the states and we know that regulation is ultimate evil. If you deregulate, the free markets can rule and we do love the free market (as if it really existed).
So what you have is billions if not trillions of dollars in risky loans made with the belief that real estate would increase forever, insurance on those loan, predicated on the fact they would never have to pay a claim.
Then the bubble burst. Real Estate values fell, that home equity the borrower was planning on using to refinance was nowhere to be found. His mortgage payments went up after two years and all of a sudden his home was facing foreclosure. Again and again this happened. Which means all those CMOs and CDOs were blowing up, which meant that all those credit default swaps were being called to pay out. Since the insurance companies weren't regulated, there weren't required to keep any capital liquid to payout on the claims. Instead those used those huge profits to pay extraordinary bonuses and commissions to executives.
Hence, what we know as a credit crunch. That simply means that institutions no longer trusted other institutions to lend them money because they didn't know if they would be able to pay back those loans. Why no trust? Because no one could determine how much bad investments, or bad swaps a company held. All of sudden risk mattered again and the pipeline of credit ceased. No credit, meant that businesses couldn't continue their business, which meant, a collapse.
Hence the so called "bailout." Which essentially is the government, using taxpayer money, to buy these endangered investments, to get them off their book, so that banks and institutions will feel better about lending them money again. The idea is that this will free up the offering of credit and business can continue.
If it doesn't work, or if nothing was done, the mom and pop store on main street wouldn't be able to keep their inventory up to date, couldn't make their payroll, couldn't pay their bills. That would lead to layoffs, and layoffs would lead to rapid decrease in consumer spending which makes up 2/3rds of the the American economy. That my friends would be a depression, not a recession. It is a perfect financial storm. And that is as simply as I know how to put it.
07:33 PM in Current Affairs, Personal Finance, Politics | Permalink | Comments (2) | TrackBack (0)



