Ponzi Scheme and Mortgage Meltdown

From Wikipedia: "A Ponzi scheme is a fraudulent investment operation that involves paying abnormally high returns to investors out of the money paid in by subsequent investors, rather than from the profit from any real business. It is named after Charles Ponzi.^[1] The term "Ponzi scheme" is used primarily in the United States, while other English-speaking countries do not distinguish in colloquial speech between this scheme and other forms of pyramid scheme."

From what I can tell, this is precisely what was going on in the mortgage market from ~2000 to 2006ish. The people involved in these loans to potential homeowners were only able to make money because of the new money coming in from subsequent investors. Meaning, the only reason the scheme was functioning and generating returns for investors was because of the fresh blood coming into the market next week, willing to pay more for the same house that just sold for $30,000 less only one week ago. That kind of high turnover/short turn-around time was basically an over-glorified Ponzi Scheme. Think about it, what have these financial institutions been saying all along? We just knew the price of homes would never go down, so we'd just say, Don't worry, you can just refinance, or sell the home in a few months. So, the homeowner finds some new person entering the market (at the bottom of the pyramid), who has to pay out the most (thus far), they cash out, the bank cashes out, and New York cashes out. Meanwhile, the investment hasn't actually made anything in the process. Now read what Krugman has to say about the New York bankers and their bonuses. 

From Krugman's Op-Ed in the NYTimes: "Consider the hypothetical example of a money manager who leverages up his clients’ money with lots of debt, then invests the bulked-up total in high-yielding but risky assets, such as dubious mortgage-backed securities. For a while — say, as long as a housing bubble continues to inflate — he (it’s almost always a he) will make big profits and receive big bonuses. Then, when the bubble bursts and his investments turn into toxic waste, his investors will lose big — but he’ll keep those bonuses."

I think that I finally understand this whole mess. Yeah sure, it's interesting to consider how this spread to the money and credit markets, and yeah it's interesting to ask why the gov't didn't step in and prevent this from happening, but really...it's just another scam like anything else.

Winter Storms

It’s been a rainin’ here for the past couple of days, and now today it is freezing cold (literally there was frost on the ground this morning! The massive upside are all of these beautiful fluffy clouds everywhere. This picture was taken on my morning commute (I put the bike aside to avoid all the bad weather nastiness) and you can see the clouds trying to get over the Santa Cruz Mountains. Just after this I saw a very strong double rainbow as the sunlight caught the rain falling from this cloud.

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Frank Frazatta

 

These are some examples of the work of Frank Frazatta. I don’t know why but I’ve always been attracted to his work. It is all dark, mysterious, fantastical, and sexual- all very good adjectives. I find the slightly comic book and heavily epic feel of the art to really click with me. I mean look how evil the black knight looks, you can almost feel the agony of being suffocated by that huge anaconda, and the shadows, muscles, and butt on the third picture really takes you into that dungeon. I guess the uber-geek in me, the one that loves tearing through a fluff filled sci-fi/fantasy novel just gets all riled up when I look at these images. Good stuff Frank, RIP and I hope to own one for my wall someday.

My Special Lady Liz Dembski

 

Yes I took this picture because I like her butt. 

Liz is my girlfriend, and she is  good woman. She treats me well, is kind to all, sexy, social,  and super smart. We yell, argue, and go back and forth, but it rarely crosses the line into the realm of ugly, and when it does, we are quick to apologize and resolve the issue. Today, she helped me by calling insurance companies, the hospital, etc. to straighten out a healthcare bill that is retarded (healthcare is totally fucked man), something that I HATE to do, and makes me very very angry. She pretty much saved me like $500 today. Anyway, here is to you love, you are great, and I appreciate the times we’ve had, and the promise of more to come.

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Brian Loves Adonis

Brian was a little bit apprehensive about the cat living with him when we first moved in, as he had a rather shitty and pee-y experience with his previous furry roommate. To be honest, I was quite nervous about moving Adonis, but I think we can both say that he is a very welcome addition to our household. No matter how shit of a day I’m having, petting a very fluffy and appreciative animal whom you share you resources and life with will always calm and mellow a turbulent soul. Adonis, I look forward to caring for you as you get old my fuzzy friend.

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What You’ve Been Missing

If you haven’t checked out my new daily photoblog, here is a taste.

Jesse’s Pictures

Oh and for those of you who have been visiting, I know that things have been a bit slow to load lately, and I’ve been screwing up the linking of the pictures sometimes, but I’ve gotten most of the problems ironed out, and things should be faster and cleaner from now on. -J

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More Info on Vacation Day Comparisons

Link-PDF

From the Expedia vacation poll: 

"International Stats

-- Employed adults on average will earn the following number of vacation days in each country in 2008

(Note: based upon the mean of results including people who did not receive vacation days)

o Employed adults in the United States on average receive about 14 vacation days per year, compared to 14 days in 2007 and 2006 and 12 days in 2005.

o Employed adults in Canada on average receive about 17 vacation days per year.

o Employed adults in Great Britain on average receive about 26 vacation days per year, compared to 24 days in 2007 and 2006 and 23 days in 2005.

o Employed adults in France on average receive about 37 vacation days per year, compared to 36 days in 2007 and 39 days in 2006.

o Employed adults in Germany on average receive about 27 vacation days per year, compared to 26 days in 2007 and 27 days in 2006.

o Employed adults in Spain on average receive about 31 vacation days per year, compared to 30

vacation days in 2007.

o Employed adults in Italy on average receive about 33 vacation days per year.

o Employed adults in the Netherlands on average receive about 28 vacation days per year.

o Employed adults in Austria on average receive about 28 vacation days per year."

AND we're going into a recession- I sware if one right-wing jerk says this is the lazy poor American's fault, I'm going to lose it. 

What Can You Do with a 50mm F1.4?

 

 

I got my first Christmas present today, and it was the best kind, to myself! My 50mm F1.4 Canon lens showed up today, and I have to say, I love it. I is totally bitchin’. It has such a shallow depth of field that it is actually hard to shoot with because if you move between the autofocus and the shutter it will lose focus. However, that just makes it more fun. Also, having the fixed focus really makes the whole shooting experience feel different. Move forward, zoooom in, mooove back, zoooom out. Weird. Finally, all of these pictures are shot at 400 or 800 ISO, are hand-held, and shot in normal evening indoor lighting conditions at a nice comfortable shutter speed of ~1/25 (and of course at F1.4). This is a really nice fast lens and I can’t believe I waited this long to buy one, totally worth it and I haven’t even cut its teeth yet. 

Bikes Could Change the World: Part 2 - The Natural World

In Michigan you can safely say that Winter has arrived when you have to defrost your windows before the morning commute. However, besides that and driving more carefully, little else changes in a person's daily habits as a result of changes in the weather. As the rain has begun to fall, I have had to start carrying rain gear with me, and wear that hot uncomfortable plastic while pumping away. Not that I exactly mind as it just creates another challenge. I have found that I tend to get more flats on rainy days, which makes me sad because flats suck, especially in the rain. Also, in the morning it is rather cold, say high 40s, low 50s, and I have to get all bundled up for the cold air down Bernal Hill. Finally, as a result of the shorter days, I have to wear lights after I leave work, and when I get off the train in San Francisco. 

My point is this all translates into a greater sense of the natural world around you. Is it sunny? Is it cold? Is it cloudy? Is it rainy? Is it warm? Will the sun be up? These are things I have to think about every day before and after I go to work. It demands my attention. I have found this healthy and appreciate being more aware, apart, and present in the outside world. 

Lockheed + Defense Spending = WTF?!?

From Gizmodo- watch the video, it is worth it. This is seriously a crazy piece of technology. Imagine one of these in the nose cone of a warhead, take it up with an F22, carpet bomb with one missile...

Does this kinda remind anyone of that missile technology in Iron Man?

Good thing we have stuff like this around. I mean gosh, if they had spent that $800 billion in Defense spending on something like education, healthcare, technology, energy, or welfare we'd be in some serious trouble with the econo-wait nevermind. 

Blackwater Goes to Court- and so it begins...

I see this lawsuit as the first of a long string of prosecutions relating to what has been happening in Iraq. I think that over the next 10 years we are going to see more of this information coming to the surface. There will be movies, and expose's- documentaries, dramas, and demigods. This is really the dirtiest, nastiest, most fool-hearty things that America has done since Vietnam. Couple of things I found particuarly interesting, one is that they want to be tried on Utah to get a better jury, the second is the comments that this is a politically motivated trial.

From the NYTimes:

"Based in Moyock, N.C., Blackwater is the largest security contractor in Iraq and provides heavily armed guards for diplomats. Since last year's shooting, the company has been aflash point in the debate over how heavily the U.S. relies on contractors in war zones
The company itself was not charged in the case." (Link)

One thing I also think people should keep in mind is that in many ways these guys were taken advantage of by our government. Most of these mercaneries were sent to Iraq in the military. They get all fucked up in the head and then come back to the US. They can't deal with "normal" life anymore, so they get hooked up with these outfits for crazy money (~$15,000/week), but have about a 4 month life expectancy. And what did they do while there? They protected our own military as a sort of undocumented shield (b/c their deaths didn't get put into the troop death tolls which made things seem less bad). What happens? A fuse blows in their brains one day in Nisoor and go on a killing spree. Is that a valid excuse? No of course not, these men must answer for their own actions, and killing innocent people with their hands up is no way for anyone to behave in any situation. Reguardless, why isn't the Bush administration going on trial instead of these six men? Why isn't Blackwater Inc. going on trail for what they have help facilitate? Why are we still allowing lackies to take the fall for the big kitty cats eating their baluga and crackers? 

JMG et al

People often ask me if I’m a Junior, being that I have the same first name as my Dad. I have always felt a certain sense of identity in having my father’s father’s name, Agustin as my middle name, rather than being a Junior with Mark. Not that I have anything against Mark, it is a fine middle name, I’m just happy that I have my own.

This is my Dad, Jesse Mark Guzman. He and his family (as I said before) came out to visit me. It was really great to have them all here. I hope they have a better sense of the kind of life I lead, and that I’m not too unbearable of a hippy.  The two in the back are Donnellan, age 9, on the left, and Lonigan, age 7, on the right. In the lower picture Alicia, age 10, is the young lady on the left. Meg was also here, but I couldn’t get her picture without being sneaky, and I like to respect people’s photo wishes. I’m not in the business in capturing souls that don’t wish to be caught.

The Guzman clan got to hang out for most of the week. During the work week we met up most evenings for dinner at some places in San Francisco. The trip culminated with everyone coming over for Thanksgiving at the Dembski’s place. I hope that they all had a good time being out here, and feel like they could return anytime. It is always interesting being around kin. 

 

Rising Cost of Education

The NYTimes wrote a nice article here on the increasing cost of higher education in America. There is a rather startling graph here that I wanted to share.  I think that a key way to look at this is relative % change from ‘82-‘84 to ‘07 specifically with respect to class. Tuition increased twice as fast as health care, and FOUR times as fast as median income. Furthermore, for a four year public institute (so for a BA/BS at a relatively cost effective university) has changed by 16%, 10%, 7%, 4%, and 2% for the Lowest to Highest income categories respectively. This clearly means that the rich have been getting richer and the poor have been getting poorer. There are many signs pointing to this. The thing that keeps surprising me is that rich people still haven’t learned that the backs of the poor are their foundation. The rich won’t be able to reach those delicious money fruits if the backs of the poor break due to their own unbearable weight.

I’ll end with a quote from the article, “Last year, the net cost at a four-year public university amounted to 28 percent of the median family income, while a four-year private university cost 76 percent of the median family income.”

Thanksgiving – 2008!

I really like this picture set. I love eating turkey at Thanksgiving, and stuffing inside the bird, oh my! However, there really is something kind of gruesome about carving of flesh from bone. But what good flesh it is, yum!

Liz’s mom, Ann is a kick ass chef, and knows how to time it and everything. I watched in awe as she pulled the whole show off without even breaking a sweat. Here’s to you Ann. I made mashed potatoes, which I have now reworked into something I consider more reflective of my meager culinary skills. Katrina and Matt made the trip up from Santa Cruz, which was very fortunate or else we would have never gotten to enjoy her wonderful and amazing sweet potatoes (or yams I can' never remember). They really were the hit dish of the evening. Grandma recipes, you gotta love them.  We drank some good wines and even had some tequila during the cooking of everything.

There really is something about a day that could really be reduced to Thanks for Food Day! I love food, so I love Thanksgiving. I think it is way better than Christmas. Far less commercial (unless you count food, rather pay farmers though), far less obligatory, and far less religious.

Anyway, here’s to you turkey, I appreciate your sacrifice for our tradition.

What does government spending mean to you?

I was listening to this NPR-On Point podcast this morning. Krugman is a good speaker and very capable of clearly expressing his thoughts to an audience. I noticed something interesting in their discussion, when it comes to government spending, why does it seem that conservatives only balk at spending that helps the poor? Why don’t Republicans consider $700 billion for defense budget, government spending? Do they think that by allowing the gov’t to spend our money on death and destruction, oh wait, sorry I mean “National Defense”, that they are at the same time putting “Country First” while “Supporting Our Troops” as well? I believe the best way to support our troops is by elimination of a high probability of death/disfigurement, but that’s me. Why is this part of the budget left unscrutinized by our leaders? They talk about how the Dems are “socialists” and even the word “commie” gets thrown around from time to time. Obama got attacked for saying something along the lines of it being high time for a redistribution of wealth from the top 1/3 to the middle-bottom 1/3. You know, military spending is a redistribution from the middle-bottom 1/3 (majority of taxpayers) to the top 1/3 (majority of defense spending contractors) and it shouldn’t be given this free pass from the federal red pen…

UPDATE: Oh and here is a story about the kind of services you get for all those tax dollars.

Milan Kundera Quote

Well, I finished The Unbearable Lightness of Being today. I think this is a really good book with lots of excellent content. There is a good amount of quality thoughts, philosophy, and politics in this book. I’ve been a bit hard on it with respect to the entire lack of a story, but you get over it as you read more of the book. He does a good job of making the characters front and center, instead of having the plot be front and center. I will be peppering my posts with occasional quote from this book as there has been too many for me to post.

“And at the moment he felt pleasure suffusing his body, [he] himself disintegrated and dissolved into the infinity of his darkness, himself becoming infinite. But the larger a man grows in his own inner darkness, the more his outer form diminishes. A man with closed eyes is a wreck of a man.”

Windows Live Writer Beta = Sexy

Ok yes I am a geek. We have all established that by now. This new program is to blogging what the pen is to writing. SO much easier I cannot believe it. Feels similar to Word but more broken down as the blogging atmosphere is more broken down to begin with. 

 

Here are the links to help peoples with getting at this software. Here is the MShit download site. I recommend you pay attention because they try to get you to change your browser settings halfway through. Here is a way to load it up onto a portable drive and run it from there as to not upset the authorities in whatever way that applies to your personal life =)

So that’s kind of nice,  you will be seeing a bit more personalization from me.

Michel Gondry- Extreme Timelapse

Here is something for all of you timelapse lovers. Woah, that had to be so much work!

No Acorns

Read this article about how there have been NO (as in none, zip, ziltch) acorns produced by the oak trees in Virginia and surrounding regions. The scientists don't really understand what is going on but it is going to be a bad year to be a squirrel.