September 11,2009/1

President Obama is going to Wall Street this coming Monday to make a speech. The date chosen is the first anniversary of the failure of Lehman Brothers. The speech will presumably be self-congratulatory, about how the world has been made safe for capitalism. This stinks; it smells like dancing on the grave - but presumably the President, for whom I am losing increments of trust and respect every waking day, will stick the Bush administration with the Lehman Brothers decision, which unarguably can be said to have made matters much worse than they need have been, but which did open the door for Goldman, JP Morgan Chase and others to mulct the taxpayer for upwards of a trillion dollars. In the passing twelvemonth whose anniversary the President will be marking, millions more have lost jobs, homes, self-respect, medical security. Is all this compensated for by Goldman's record profits? Is this proper cause for celebration? Not in my book.

September 10, 2009/2

Briefly, on the President's health-care speech:
The first part of the speech was necessarily complicated but was to some extent rescued by the exhortatory peroration and conclusion. The situation still looks functionally intractable to me - too many members of Congress in the pocket of insurers etc. - but I have no doubt some illusory plan will emerge. The behavior of the Republicans - Boehner, in particular, who for some reason didn't show up in full SS regalia although he was clearly dreaming of Polish villages to liquidate - was despicable.

September 10, 2009/1

" The property portfolio doomed Lehman when a rescue still seemed possible. On Saturday, Sept. 13, 2008, Timothy Geithner, then president of the Federal Reserve Bank of New York and now U.S. Treasury secretary, asked a team of the world’s top bankers to evaluate Lehman’s real estate holdings as part of an effort to facilitate a sale of the investment bank to London-based Barclays Plc.

The team, including representatives from Goldman Sachs and Credit Suisse Group AG, determined that Lehman had overvalued its real estate investments by $20 billion to $30 billion, according to people who attended meetings at the New York Fed last September."

This, from Bloomberg this morning, validates what I, virtually alone since October, have been saying with regard to Washington's decision to le Lehman go. It wasn't Fuld's arrogance, or Barclay's being held up by UK regulators (a straw man of an excuse, if ever I heard one) that doomed Lehman, it was the firm's commercial real estate book - which set it apart from other supplicants, mainly Merrill. Here's what I wrote on Forbes.com on October 7,2008, three weeks after Lehman failed:

"Think about this. Every report on Lehman that I have recently read is saying that the real toxicity on the Lehman balance sheet is in its commercial real estate holdings and investments. Of no other troubled firm does this seem to be true, only Lehman, which may also explain the Paulson team's no-bailout call."

No wonder I can't find work. There's no one the mediocrities who run American media hate worse than someone who knows what he's talking/writing about.

September 2, 2009/1

I'm trying to balance a whole bunch of things, so won't be blogging much until Labor Day. I am fascinated by the way the media is cheerleading this "recovery." Take "productivity." The late unlamented Greenspan based much of his folly on a notion called "anhedonic pricing," which basically meant that thanks to Moore's Law each month saw an increase in productivity as computer capabilities increased faster than computer prices, ie. more bang for the buck, or more "productive." It never bothered Greenspan that the more work computers take on, the less there is for humans to do. This may be more "productive" statistically, but it promises sheer hell for any political economy pretending to be a functioning free-market democracy. Another few years of this, the United States is going to be little more than a giant El Salvador.

August 30, 2009

We spent last week away, in far New England, in a place where it is always 1954. No tweeting, blogging, prose composition. Just sun,water, mountains, friends. This was the week that saw both Teddy Kennedy and Dominick Dunne shuffle off this mortal coil, so it was a good place - away from the noisy, and the froward and the vain (Dickens) - to reflect on two lives that mark, for me, the passing of an era.
The last time I spoke with Dominick, with whom I had an unevenly textured friendship going back almost forty years, was in June, perhaps nine weeks before he died. My publisher was pressing me to seek a blurb from Dominick, despite my admonitions that he was very sick, was in fact in Germany receiving treatment for his cancer, and I reluctantly sent him bound galleys. That would have been in May. I came home one day and Dominick - I never called him "Nick" any more than he would have called me "Mike" - was on my voicemail. He sounded worse than terrible. He couldn't do the blurb, just didn't have the strength, in fact, he said, "I think this may be it." I called him back immediately and got his voicemail. I left a message saying for God's sakes, all that matters is for you to get better, you must use every scintilla of energy for yourself. He called back a few minutes later; we chatted briefly; I told him I was praying for him.
The way we met was funny. It would have been around 1968-69, and I and a friend were on our way to Los Angeles for a weekend of fun and frolic. To make the flight pass more slowly, we had ingested some cookies baked in an upstate ashram that had a high cannabis content. By the time our flight was abeam Pittsburgh, we really no longer had need of an airplane. A bit later, it was suggested that he top off our exhilaration with a toke in the loo (we were upstairs in a 747.) The restroom door was locked when we got there, but a minute later it clicked open, and in a scene reminiscent of the Wizard of Oz, there was an enormous gust of marijuana snoke with a small figure in the middle. It was Dominick. We urged him to try what we had, and the three of us squeezed back into the small cabine and enjoyed a jolly puff.
As I say, ours was an uneven relationship. There was a bit of professional envy mixed in there, probably - make that certainly - more on my side than his. I didn't think much of his novels, and the world he wrote about for Vanity Fair didn't interest me. But I was also happy for him: he got the life and recognition that he craved, and he won the devoted admiration of thousands of fans and the deference of headwaiters. I think that when someone gets what they want, and get it more or less honestly, it's cause for a round of applause, even though it might not be what you want. It was a life that deserved a better ending.

August 20,2009/1

Everyone agrees that what is taking place in "town halls" and elsewhere, most notably in connection with health-care reform, is proof positive of Americans' mistrust of government. On the basis of second- and third-hand observation, I'm inclined to agree, with this rider: if I had to guess, I'd say that Americans are deeply fed up with this government, which they see - as I do - as essentially functioning as a delivery system for the money interests: Wall Street, Big Pharma, Insurance etc. And I include the White House in this indictment. Back in November, I hardly thought I was voting for the Enabler-in-Chief.
I'm in my ninth year as Medicare user, and I have nothing but satisfaction to show for it. I'm not alone. Even louder than the anti-government babble is the theme, "But don't touch my Medicare!" I've had two knees replaced on Medicare, and various other procedures. It works, and I have no sense that my doctors are gaming the system, even those who don't take Medicare but will do and submit the paperwork (not the same as those who've opted out of the system.) I can't understand why the principal thrust of health-care reform, which as it's now being argued looks to me like an absolutely unresolvable Gordian knot, with the interests of the impecunious being notionally served by the bought-off, hasn't focused on extending Medicare to the uninsured, possibly working backward by age groups (extend the program to people over 55, then 45-55 and so on.)
(Added later): The head of the Mayo Clinic checks in here.
And in counterpoint, this.

August 19,2009/2

Your stimulus dollars at work, right here.