Photo

Seen on the intersection of Clove Road and Victory Blvd, Staten Island, NY

From an essay last year on what a depression might look like in today's times...

By looking at what we know about how society and commerce would slow down, and how people respond, it's possible to envision what we might face. Unlike the 1930s, when food and clothing were far more expensive, today we spend much of our money on healthcare, child care, and education, and we'd see uncomfortable changes in those parts of our lives. The lines wouldn't be outside soup kitchens but at emergency rooms, and rather than itinerant farmers we could see waves of laid-off office workers leaving homes to foreclosure and heading for areas of the country where there's more work - or just a relative with a free room over the garage. Already hollowed-out manufacturing cities could be all but deserted, and suburban neighborhoods left checkerboarded, with abandoned houses next to overcrowded ones.
And above all, a depression circa 2009 might be a less visible and more isolating experience. With the diminishing price of televisions and the proliferation of channels, it's getting easier and easier to kill time alone, and free time is one thing a 21st-century depression would create in abundance. Instead of dusty farm families, the icon of a modern-day depression might be something as subtle as the flickering glow of millions of televisions glimpsed through living room windows, as the nation's unemployed sit at home filling their days with the cheapest form of distraction available.

So true...

From the March 2nd, 2009 issue of the New Yorker.

Chronicles in the lives of clueless investment bankers

I wish more senators felt like this towards the goons from Wall Street pontificating on the Hill yesterday.. That was House Representative Michael E. Capuano representing the 8th Congressional district of Massachusetts. Loved him!



I found this factoid on his webpage: Over the course of Bush's presidency, the public debt increased by $4.9 trillion or about $19,000 per second!

Fallouts from a gilded age

An opinion on Bloomberg indicating that banker salaries will fall by 50%...

It is now obvious that a lot of the financial innovation of the last decade was a waste of everyone’s time and energy. We didn’t need all that complexity: It certainly didn’t make the world economy run any more smoothly. This past decade was the best time to be a banker. Yet the one thing we know for certain is that markets get back to normal over time. If oil is trading at $140 a barrel, it’s probably going to fall in price. If gold is trading at $200 an ounce, it will probably rise. And if bankers are paid 40 percent more than their long-term average, then -- well, you get the idea.
The era of light-touch regulation is over. State-run banks will be tightly controlled by their new shareholders. Even the banks that need no taxpayer bailout will find the authorities keeping an eye on them. We are only at the start of that process. In all likelihood, the regulations will get heavier and heavier, leaving little room for innovation because the last thing anyone wants right now is an elaborate piece of financial engineering. Yet if bankers are just doing dull familiar things in a dull familiar way, they can’t expect to be paid very well. Investment banking won’t disappear. But the compliance officer and the corporate social-responsibility executive are suddenly the most important people in the office. And that will make it a quieter, less dynamic and less profitable profession.
To get back to their sustainable long-term level, salaries will need to fall 40 percent. But, as any trader will tell you, markets always overshoot, both on the way up and the way down. So, in reality, a 50 percent drop seems more likely.

Greed is good (also addictive)

The adjustments to life made by the spouse of a Wall Street banker after the banker's bonus was reduced (noticed in comments made on the DABA blog).

We’re looking at just enough money to make our mortgage payments, paying none of the principle down. So we aren’t going to lose the house yet, but we aren’t going to think about THAT until NEXT January. Meanwhile: My own dinky-by comparison salary, which had been my own since I went back to work so I could have the company of grownups, is no longer my own. It all will be spent on family expenses. The sitter’s hours are cut, both the family and my private credit card are cut in half, and I’m switching from having my facials and massages in my earthy, yoga-and-wine serving downtown spa to a midtown been-in-business-forever place with ladies in cubbies wearing pink jackets and lots of make-up giving facials only. I know, I know, only old people and gay men go there these days, but congested skin isn’t an alternative for me, so I have to go someplace. I’ll do it once every 6 weeks instead of monthly, and it is 1/3 the price of the facials at the spa. And I remember from the 80’s that they do a good job.

It gets worse. I’ll now be doing my pilates with others, in class, on the mat instead of on the machines with my private instructor. This truly frightens me. I could hurt myself competing with you 20-30 yr-olds. Private was so much less humiliating. And yes, cooking at home. We had been enjoying the new Whole Foods to-go foods section so very much. Oh well - hello Associated Market. Did you know you can sauté’ an entire bag of frozen spinach in a large frying pan with a bit of onion and olive oil, chop a bit of domestic feta into and serve it to your whole family with a squeeze of lemon, and it’s a healthy and cheap alternative to pasta as a main dish? It is so good for you and the kids love it. And we’ll need the alternative because there will be a lot of pasta. Cooking pasta sauce on the weekends isn’t my idea of a good time, but that’s what we will be doing because I’m not ready to do something original every day. I have always been a great appreciator of other people’s cooking.

Behind the soundbites

Actual news item on Bloomberg today...

Goldman Sachs Group Inc. wants to repay the $10 billion it got from the U.S. Treasury last year to signal the firm is healthy.

What this story actually translates to:

Goldman Sachs Group Inc. would like to continue paying clueless investment bankers millions of dollars in bonuses and does not really want to be shackled by the $500K limit on executive compensation that President Obama plans to impose on firms who have been bailed out by the Federal government.Cartoon ripped from here.