I suspect Angela Merkel is correct

"Cheap money" is the source of our economic problems, according to Angela Merkel.

"Excessively cheap money in the US was a driver of today's crisis," the chancellor told the German parliament. "I am deeply concerned about whether we are now reinforcing this trend through measures being adopted in the US and elsewhere and whether we could find ourselves in five years facing the exact same crisis."

It does seem to me that there is a strong resistance in America to admitting that you can't go on spending more than you earn. You can't go on buying things on credit.

RTE - DAB hands at (mis)using my money

I heard on Morning Ireland today that RTE is going live with a new digital audio broadcast service. During the report the reporter admitted that commercial providers were not leaping at the chance to provide digital radio services and that Britain's Channel 4 had recently abandoned plans to launch a digital radio service because advertisers weren't interested. The reporter also all but admitted that pretty much the only people who will be able to listen to the new stations are people with access to broadband.

Okay, this begs two obvious questions. One, why is RTE going ahead with a new technology that no commercial provider wants to touch at the moment? And, two, why is my license money going to fund a new service that is for all intents and purposes aimed at those who have the unlimited choice of online radio?

I actually tried a few of the stations today and, well, the sound quality wasn't great (that could get ironed out over time). But, more importantly, the question "Why bother" leaps to mind after a few minutes. Dance music? Indie/Progressive rock? Golden Oldies? I think those audiences can find their needs are already met sufficiently well online. RTE Choice was the only one that might be interesting, but the 20 minutes I gave it this morning had me thinking otherwise.

If RTE has the resources to fund a new unwanted service why not simply give us a refund on our license?

"Setting apart one Day of publick Thanksgiving"

Despite the origins of Thanksgiving that we all know today, Thanksgiving was not celebrated throughout the colonies in pre-Revolution America. The first time it was celebrated 'nationally' was in 1777 and the breaking of bread between Pilgrims and Indians had nothing to do with it. The occasion was the defeat of the British at Saratoga.

After the victory, the Continental Congress established a Thanksgiving committee to make a recommendation for some form of national celebration of the victory.

In CONGRESS, NOVEMBER 1, 1777, Forasmuch as it is the indispensable duty of all men to adore the superintending providence of Almighty God; to acknowledge with gratitude their obligations to HIM for benefits received. . . . And it having pleased him in his abundant mercy, not only to continue to us the innumerable bounties of his common providence; but also to smile upon us, in the prosecution of a just and necessary war for the defence and establishment of our unalienable rights and liberties: Particularly in that he hath been pleased in so great a measure, to prosper the means used for the support of our troops, and to crown our arms with most signal success: It is therefore recommended to the legislative or executive powers of these United States, to set apart THURSDAY, the eighteenth day of December next for SOLEMN THANKSGIVING and PRAISE: That at one time and with one voice, the good people may express the grateful feelings of their hearts, and consecrate themselves to the service of their DIVINE BENEFACTOR.. . . That it may please him graciously to afford his blessing on the Governments of these States respectively, and prosper the PUBLIC COUNCIL of the whole. To inspire our commanders both by land and sea, and all under them. . . under the providence of Almighty God, to secure for these United States, the greatest of all human blessings, INDEPENDENCE and PEACE. That it may please him, to prosper the trade and manufactures of the people, and the labour of the husbandman. . . To take schools and seminaries of education, so necessary for cultivating the principles of true liberty, virtue and piety, under his nurturing hand: and to prosper the means of religion, for the promotion and enlargement of that kingdom which consisteth "IN RIGHTEOUSNESS, PEACE AND JOY IN THE HOLY GHOST. And it is further recommended, that service, labour, and such recreation as, though at other times innocent . . . may be omitted on so solemn an occasion.

I hope they didn't mean football, when they asked that "such recreation as, though at other times innocent . . . may be omitted". That wouldn't do at all. Nope, not at all.

It was the first national Thanksgiving, but it didn't become an annual affair until Lincoln issued his famous proclamation in 1863.

Happy Thanksgiving.

It's time for Citi to take a nap

"Citi never sleeps". That's Citibank's slogan. Or at least it used to be. Today, the banks' managers are the poster children for a driver fatigue campaign.

Yet as the bank’s C.D.O. machine accelerated, its risk controls fell further behind, according to former Citigroup traders, and risk managers lacked clear lines of reporting. At one point, for instance, risk managers in the fixed-income division reported to both Mr. Maheras and Mr. Bushnell — setting up a potential conflict because that gave Mr. Maheras influence over employees who were supposed to keep an eye on his traders.

C.D.O.’s were complex, and even experienced managers like Mr. Maheras and Mr. Barker underestimated the risks they posed, according to people with direct knowledge of Citigroup’s business. Because of that, they put blind faith in the passing grades that major credit-rating agencies bestowed on the debt.

… To make matters worse, Citigroup’s risk models never accounted for the possibility of a national housing downturn, this person said, and the prospect that millions of homeowners could default on their mortgages. Such a downturn did come, of course, with disastrous consequences for Citigroup and its rivals on Wall Street.

… In fact, when examiners from the Securities and Exchange Commission began scrutinizing Citigroup’s subprime mortgage holdings after Bear Stearns’s problems surfaced, the bank told them that the probability of those mortgages defaulting was so tiny that they excluded them from their risk analysis ...

This is the root of the whole mess. They were making tons of money and they didn't have a clue what they were doing, what they were selling or the risks involved. They really were like sleep-deprived drivers trying to keep on a straight line and not seeing the "Bridge Out" signs along the road.

“We have a simple thesis. There is going to be a calamity, and whenever there is a calamity, Merrill is there.”

This is a long and not always easy-to-understand article on the subprime mortgage debacle, but there are enough entertaining moments to make it worthwhile.

By then, Eisman was so certain that the world had been turned upside down that he just assumed this guy must know it too. “But we’re sitting there,” Daniel recalls, “and he says to us, like he actually means it, ‘I truly believe that our rating will prove accurate.’ And Steve shoots up in his chair and asks, ‘What did you just say?’ as if the guy had just uttered the most preposterous statement in the history of finance. He repeated it. And Eisman just laughed at him.”

“With all due respect, sir,” Daniel told the C.E.O. deferentially as they left the meeting, “you’re delusional.”
This wasn’t Fitch or even S&P. This was Moody’s, the aristocrats of the rating business, 20 percent owned by Warren Buffett. And the company’s C.E.O. was being told he was either a fool or a crook by one Vincent Daniel, from Queens.

Does Barack Obama think I'm a fool?

Fools fall in love in a hurry
Fools give their hearts much too soon

Okay, maybe I'm not in love with Obama, but sheesh he's sure trying hard to win my heart. Today the NY Times says that the President-elect will keep Robert Gates on at Secretary of Defense. Then I read that once the economy starts humming again he's going to cut, cut, cut!!!

“We can’t sustain a system that bleeds billions of taxpayer dollars on programs that have outlived their usefulness or exist solely because of the power of politicians, lobbyists or interest groups,” Mr. Obama said. “We simply can’t afford it.”

Again, I may be reading way too much into this, but these don't sound like the words of a man who's about to authorize a massive increase in the size of the federal government in order to implement a national health care plan.

Just put in two bars of stardust
Just hang out one silly moon
Oh! They've got their love torches burning
When they should be playing it cool
I used to laugh but now I'm the same
Take a look at a brand new fool

I missed a chance to be offended

According to today's Irish Independent "RTE has received a "significant number" of complaints after an appearance by the dance troupe, the Satanic Sluts, on Friday's 'Late Late Show'". Now, maybe I would have been offended if I'd watched the Late Late on Friday, but I gave up on that program many, many years ago. I can't believe people still watch it.

Friday & Saturday nights are dead time on RTE as far as I'm concerned. Between the Late Late and Tubridy Tonight, RTE 1 might just as well not exist. I really can't believe anyone enjoys the toe-curling, stomach-churning, cringe-making embarrassment that those two programs serve up on a weekly basis.

What offends me is that I have to hand over €160 a year to keep this stuff on the air.

I used to work for Citibank

In fact, I did two different stints at Citibank, which may explain why I found this so funny. Oh, and in case you don't know Citibank's been in the news lately because, well, let's just say that a Big Mac now costs more than a share of Citi's stock.

I have tears in my eyes. I love the Weekly World News.

"Change has come to America"

This is probably more of a stretch than my other posts on Obama, but when I heard him utter those words in his acceptance speech I thought to myself: "So, he's the change. It's come. From here on in it will be a change to better management rather than significant new policies".

Now, two things. First, when I had those thoughts I was - again - projecting on to him what I wanted to believe. However, the choice of Hillary Clinton for Secretary of State and Timothy Geithner at Treasury is pretty darn reassuring to me. I'm not sure how those who voted for Obama in the primaries feel about these selections but I'm breathing easier after today. If he opts to keep Robert Gates on at Defense then I'm definitely going to relax.

Second, I don't want to want to sound flippant. The choice of Barack Obama as President does actually represent a massive change in America even if that's a change that's been underway for quite some time. Change has indeed come to America.

"Now somewhere in the black mountain hills of dakota ..."

I was too young for Beatlemania, which when I was young I thought was merely the name of a Broadway musical. When I got a little older I acquired a lot of Beatles albums, but I don't really love most of them. My favorite, however, is the White Album, which - according to what I heard on the radio last night - was released 40 years ago. Rocky Raccoon is 40 years old.

Speaking of music from days of yore, I used to make noises about how good Roy Orbison was when I was a student. I knew he was someone I should like because everybody said so. But I never really did. It wasn't that I didn't like Orbison I simply made no effort to discover whether I would or not.

Well, recently I've been listening to some of his albums and he really was great. It seems some of those excessively earnest music lovers from my college days knew what they were talking about. In this case anyway. His last album, Mystery Girl, which was released after I'd graduated from college, is incredible. I have to admit that I'm not sure I'd have appreciated it as much then as I do today.

To the Irish Examiner?

Dear Irish Examiner,

You might want to check your distance charts to see how many British airports are within 300km of Dublin.

FLIGHTS to most British destinations will escape the full force of the new air travel tax after Finance Minister Brian Lenihan bowed to pressure from regional airports to exempt them from the top rate.

Under amended arrangements confirmed yesterday, the €10 per passenger rate, due to come into force at the end of next March, will only apply where the destination is more than 300km from Dublin Airport. Flights to nearer destinations will be taxed at the rate of €2 per passenger.

"Most British destinations"? Liverpool, Manchester and Glasgow squeaks it at exactly 300km from Dublin. That's it. I really believe that the Irish Examiner has confused its kilometers with miles.

Could politicians sit out Lisbon II?

Bill Cullen says he'd join the 'Yes' campaign if a new referendum was held. This reminds me of something I've been wondering for the past couple of months. What would happen if the government and political parties simply stayed out of the (second) campaign? What if others who favored the treaty put themselves forward as its advocates?

I would imagine that if you're a 'Yes' advocate you might figure such a strategy might be worth a try, right? Look there's been a lot of complaining about Declan Ganley, his money, etc. and the 'No' campaign. I would bet that those who want a 'Yes' could find equally deep pockets and passion among its ranks to provide the fuel and backbone the 'Yes' campaign needs.

Truthfully I don't think the talkaholics in the government/Dáil could resist. Yet if they did, I think it would be a plus for the 'Yes' side. The public has very little respect for politicians these days. Their faces on posters and the television are not a plus for the 'Yes' campaign.

No, and only No to Lisbon

Sarah Carey says we shouldn't let Rupert Murdoch decide Ireland's future. I guess I agree, if Murdoch is deciding Ireland's future. I'm not sure I believe he is, however.

What bothers me about Carey's headline grabbing thesis is that it distracts from what I think is a decent thesis in her column: that the Sunday Times should have published a pro-Lisbon column by her or by someone, but they had a policy of 'no pro-Lisbon comment' in the paper. Carey assumes that Murdoch is anti-Lisbon thanks to his "well known pro-US-hawkish views" and this is why the paper pursued such a policy.

Again, why does being pro-US mean being anti-Lisbon? Truth is, the American in me feels that the Lisbon Treaty is just what the EU deserves, but the fact that I'm an Irish citizen too and a resident of Ireland makes me more skeptical about the merits of the Lisbon Treaty.

Here's another theory on why the Sunday Times may have adopted the policy it did: it might have sold more papers. When others were selling confusion, the Sunday Times was selling clarity. And, given the level of confusion about Lisbon maybe customers were happy to get a steady diet of negative comment (propaganda?).

Other Sunday papers were providing a basically pro-Lisbon agenda, but with varying degrees of anti-Lisbon comment sprinkled in. The Sunday Times may have thought there was an opening in the market for a simpler message. I don't know, but it's possible.

Carey's column is pretty damning of the Sunday Times and Irish editor Frank Fitzgibbon, but she distracts from this by pointing the finger at every leftist's favorite media boogie man - Rupert Murdoch.

{I want to add that I don't know enough of Carey's views to know if she's a leftist or not. She should just have written the column without bringing Murdoch into it.}

UPDATE: Nov 21, 9am: Roy Greenslide agrees that Murdoch was probably not personally involved in the Sunday Times's Lisbon policy.

Felon-free Senate

Ted Stevens has lost. Hard to shed a tear when the guy's recently been convicted of lying on his financial disclosure forms. Still, the Republicans' grip on a sliver of power is now even more tenuous. All that stands between them and political insignificance is a Minnesota recount and a Georgia run-off for Senate seats.

What's good for GM is good for ...?

What's good for GM is good for America. We all learned that as kids. Now GM along with the "competition" - Ford & Chrysler - are asking for Congress to do what's good for GM. But is what they ask good for America?

No, says Mitt Romney. Romney was not my favorite Republican presidential candidate, but if any of them knows anything about the car industry and what this bailout will mean, he's the one.

Romney says that the current management must go and the unions must be brought to heel. The costs of cars produced by the big three are simply too high.

First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.

That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota's Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.

Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.

I wonder if Romney would have written those words if he was still courting Michigan's voters, but it does seem to make sense that the big three cannot keep producing cars that are too expensive.

So, what should be done if not the bailout. Again, Romney serves up a succinct plan for the Federal Government.

It is not wrong to ask for government help, but the automakers should come up with a win-win proposition. I believe the federal government should invest substantially more in basic research — on new energy sources, fuel-economy technology, materials science and the like — that will ultimately benefit the automotive industry, along with many others. I believe Washington should raise energy research spending to $20 billion a year, from the $4 billion that is spent today. The research could be done at universities, at research labs and even through public-private collaboration. The federal government should also rectify the imbedded tax penalties that favor foreign carmakers.

And what of GM? Micheal Levine writes in the Wall Street Journal that a managed bankruptcy is the best option for GM.

The social and political costs would be very large, but if GM fails after getting $50 billion or $100 billion in bailout money, it'll be just as large and there will be less money to soften the blow and even more blame to go around. The PBGC will probably need money to guarantee GM's pensions for its white- and blue-collar workers (pension support is capped at around $40,000 per year, so that won't help executives much). Unemployment insurance will have to be extended and offered to many people, perhaps millions if you include dealers, suppliers and communities dependent on GM as it exists now. A GM bankruptcy will make addressing health-care coverage more urgent, which is probably a good thing. It would require job-retraining money and community assistance to affected localities.

Okay then. Deep breaths everyone. Now pull the plug.

Bedsits

I see the government is going to ban the 'traditional' bedsit. Shame. Horror stories about the places where one has lived as a student are the kind of thing you dine out on here, particularly as the years pass.

I know I told you a little about my flat-mate, but did I ever mention the bed-sit we shared during the 1986/87 academic year? It was in Ranelagh (where else?) and was a two 'room' bedsit. One room had a kitchenette (and emphasis on the ette!) two chairs and a sort of coffee table. We had a t.v. on the table. The room was about 6' by 9'. Th other 'room' was an addition to the house and it had two single beds and about two feet of space between them The walls were nothing more than plasterboard insulated by wallpaper! It was COLD in there.

One particularly vicious night I opened the door to the bedroom and was sure my flat-mate was dead. I woke him up to make sure he wasn't dead. He was so cold he was glad to be awoken so he could go into the other room to warm up. He'd been sleeping with his toes in hands.

Anyway, I know there are few former students here who don't have similar tales. Sad to think the government is trying to eliminate this grand source of reunion chat.

Jonestown

I think it was last year, but maybe it was the year before that I stumbled onto a documentary on Jonestown. I'd forgotten all about it.

I know crazy suicidal religious cults seem a dime a dozen these days, but Jonestown was my first experience of this particular lunacy. I remember the following days in school the whole thing was as much a source of humor as horror to us teenage boys. Just the shout of "Hey, Kool Aid" was enough to start you off laughing.

Anyway, as I watched that documentary on Jonestown I remember how surprised I was that over 900 people had died that day, November 18, 1978. I guess I thought the number was in the 150 or so range. It seemed a lot more horrific to me as an adult than it had when I was 14.

Tim Reiterman's eye-witness account is worth reading.

Caution is advised

Another reason I'm not that upset by Obama's win is that I have this sense that deep down he's a naturally cautious man. And, after 16 years of guys who like to gamble and throw caution to the wind (whether sexually or politically), I'm happy to have a guy who'll think first, think again and then act.

Am I right about Obama? I don't know, but since everyone else is seeing in him what they want to see, I may as well join the crowd. Right?

Obama's win

I've been trying to write a post on Barak Obama since election day, but it just gets too long and involved. I decided to just throw out a few short posts and see how that goes.

First, as I said, I wasn't that unhappy about Obama's win. Why? I don't know, but I think it's because I couldn't help but feel happy for all those black people on the streets singing and dancing. It was their moment. How could you not be happy watching those scenes?

Don't get me wrong. I still hate losing and my happy feelings for black people did not (and do not) extend to Democrats generally and certainly not to smug, sanctimonious Europeans. Each time I hear one of them on the radio I get all tied up in knots again. I'm really, really hoping Obama disappoints them. I don't even know if I care how he does it.

It's April 15 in Ireland

That's how I always think about it, anyway. April 15 is the deadline for filing taxes in America and that deadline is just ingrained in the American psyche. That's not quite true here because apparently many (most?) people who work and pay taxes don't bother to file a return, although I'm not sure why. Regardless, today is the deadline for filing the return and paying off your tax bill for 2007.

I suspect that a lot more filers will be reporting smaller incomes/profits for 2007 than the government wants to believe and that the revenues will be lower (& refunds greater) than expected. And, additionally, the payments for preliminary taxes due on 2008 income/profits will be a lot lower. I think the recent budget forecasts will prove to have been too optimistic.