Weekly New Yorker Cartoon

Synthetic CDOs

What the hell is a synthetic CDO you ask? Well, you’re probably not asking, but it’s one of the most unbelievable, interesting and boarder line criminal vehicles that financial engineering has come up with, and one that made the subprime mortgage crisis that much worse. As such, you should at least try to wrap your head around a synthetic CDO. If nothing else, you’ll get an excellent taste of what the evil geniuses on Wall Street really put their minds to.
Before getting into synthetic CDOs, it’s probably best to explain normal CDOs. CDO, which stands for Collateralized Debt Obligation is an investment vehicle composed of bonds which are in turn composed of subprime mortgages. Let’s 10 million Joe Blows want mortgages to buy themselves and their Joe Blow families a house to watch TV in. Typically, they would find themselves eagerly welcomed by local firms that specialize not only in originating mortgages to Joe Blow, but turning around and selling that debt and its interest payments to someone else. At ground zero, things are already skewed; the originator isn’t really concerned whether Joe Blow can pay up, only making it look like he can in order to sell it off.
As one man’s debt in another man’s investment (although in the case of subprime borrowers, the adage seems tentative; it’s more like this particular kind of man’s debt is the stupidest place another man can put his money) the mortgage is quickly sold off to a more sophisticated institution. The originator pockets the difference and starts looking for another J.B. The financial firm now holding the mortgage adds it the millions of other subprime mortgages it owns and starts cutting them up, rearranging and assembling them into bonds for sale. As will remain constant, the coupon payments on these bonds are coming out Joe Blow’s pay check, if he has a job.
Next, the firm will either sell off its new patchwork bonds to another, even slicker financial institution for yet another, more complex layer of remodelling, or if they’re sophisticated enough do it themselves. Regardless, the bonds are next assembled with thousands of other subprime bonds for another round of cutting up and rearranging. Frankenstein rises and the CDO is born coupon payments and risk ratings based on mind boggling complexity and opaqueness Ready for sale, its pitched to institutional investors around the world, typically finding its home in pension funds, hedge funds and mutual funds hungry for safe investments with high returns.
What’s the point of this elaborate Wall Street paper mache project? Ideally, by combining millions of mortgages into different tranches and arrangements, the risk of the underlying assets is mitigated. Until 2007, it was thought that financial engineering was now able to turn Joe Blow, who was otherwise inaccessible and too risky for institutional investors into a AAA rated asset fit for the world.
Obviously it work didn’t quite work out. The CDO machine was a dysfunction circle jerk so systemically flawed it led to a near financial meltdown and one of the worst recessions in history. There’s a lot of different reason and factors as to why it all happened; why so many loans were given to so many Joe Blows only to have them mainlined into a addicted global banking system. But remember, we’re trying to get to synthetic CDOs, not explain the origins of the crash. Plus, synthetic CDOs are best part of the story, which is continued tomorrow.

Synthetic CDOs arose during the very peak of the subprime mortgage market, when things were getting too good to be true. With more and more institutional investors wanting CDOs in their portfolios, the companies on the front line, the ones finding Joe Blows and handing them money, where miraculously having trouble finding Joe Blows. Wall Street had used up its subprime fuel.
They’d find more in the most unlikely of places.
Not everyone was mainlining Subprime Crank. Since the mid 2000s, a variety of prescient investors had seen the light and were busy figuring out how to as make as much money as possible off its inevitable collapse. The instrument they found was a Credit Default Swap or CDS.
A CDS is essentially an insurance agreement on a debt repayment. If I loan $1 million to a Greek entrepreneur, I could buy a CDS for a small monthly of someone like AIG and if the loan goes bust, AIG covers it. In finance, everything can be securitized and traded, so buyers of Credit Default Swaps don’t have to actually own the underlying assets the instrument insures. If and when the mortgage market collapsed, those short with CDSs would make a fortune selling them off.
However, they had to wait for the crash to come, and continuously make monthly payments while they did. Enter irony and the synthetic CDO. The quicker Wall Street ran out of Joe Blows to fill institutional investors demand, the more speculators began shorting the market; but as the payments from Credit Default Swaps on CDOs grew to increasingly high numbers, Wall Street saw them not as a warning to stop selling dangerous mortgage debt but as solution to sell more securities related to the subprime market. Wall Street started assembling the revenue streams from the millions of payments from credit default swaps into packages that mirrored the coupon payments from subprime CDOS. Ignorant investors who couldn’t find a CDO to invest in could now get the same high payments from a synthetic CDO composed not of mortgages but of insurance payments against mortgages. They didn’t even need to put money down to collect the payments, all they had to do was agree to back the real CDO in the event of a default . From 2005 to 2007 over $108 billion dollars worth of synthetic CDOs were issued.
There you have it, financial engineering at its best/worst.

Weekly New Yorker Cartoon

May 6th Dive

Remember that huge dive stocks took on May 6th, when the Dow Jones Industrial Average plunged almost 1,000 points and you had your first ever anxiety-related ear bleed? It was the largest intraday decline in history and no matter what mess you made in your office that afternoon, it’s completely understandable.

But exactly what cause the ‘Flash Crash’ is still unknown. While initial rumours claimed that some fat fingered trader mistakenly put through a sell order for 16 billion shares of Procter & Gamble instead of 16 million, experts are slowly figuring out the plunge was caused by a variety of intersecting factors. Firstly, traders were very skittish that week. Like freshly beaten dogs, they hadn’t yet recovered from the pummelling they’d taken on the Greek debt fiasco and impending UK election. In an atmosphere like this, a large trade in the stock-futures market could have easily contributed to the sell-off. Watchdogs are also fingering the rise of upstart electronic-trading platforms, which now account for almost 75% of deals done on the NASDAQ as part of the problem. It’s tough for regulations to keep up with the leaps and bounds technology takes. Before the company that built the first Terminators started making stock exchange systems, exchanges like the NYSE could stem irrational sell offs like May 6th by shutting down their electronic-trading platforms and trading manually on the floor. With so many exchanges now operating digitally and independently on platforms using god knows what kind of mathematics and engineering, manual, synced trading isn’t’ really an option. The Securities and Exchange Commission is now contemplating stepping in. Look for them to enforce a more effective and co-ordinated system that allows them to force exchanges market-wide to either slow or stop during periods of extreme decline. Definitely for the better.

Weekly New Yorker Cartoon

Bail Out Band Aid, Europe is Still Bleeding

The last thing you give a junky is another hit. At least that’s what doubters of Europe’s staggering rescue package for Greece are saying. Today’s market declines and record high gold prices reflect the sentiment.

There is an understanding that while the 1.1 trillion USD plan surpassed expectations, it is still only a safety net; a reassuring agreement designed to bust up speculators and negative feedback loops. At the end of the day, lending to already over-borrowed ‘Club Med’ economies doesn’t get to the fundamentals of Europe’s problem.

The EU solution reached Sunday night was just the easy part. Agreeing to back members in a default may be a political solution to abstract financial pressures like short sellers, speculators and bond traders.

If you’re unfamiliar with negative feedback loops and the kind of situation Sunday’s package was designed to stop, here it is in very simplified form: During the recession, analysts began to view Greece as a more risky borrower because of its high debt levels and stagnant economy. Interest rates were subsequently raised. Because countries often pay existing debt off with new debt, it became increasingly expensive for Athens to service its obligations. With little cash flow, Greece suddenly looked like an even riskier investment for lenders then it did before, and interest rates went up again. Repeat the self-enforcing cycle a few times; compound it with short selling sharks pushing for disaster and nervous, herd like institutional funds, and you’ve got the sovereign version of Bear Stearns. However, if creditors know that a stable body like the EU is backing their assets (which it now is), runs are much less likely.

But again, that doesn’t solve Europe’s real problem and as a result, the Euro and its indexes are down while gold continues to soar. Many of the union’s members have used monetary unity to borrow more than they could ever hope to pay back. They’ve been able to get away with it because Euro Zone regulators have lacked in monitoring the fiscal sloppiness of its members. Sunday was a big, much needed band-aid, but stocks won’t really recover until the underlying wound is fixed.

It does look like reform is on the way, and that Europe is eventually going to come out of all this for the better; with a much more efficient and disciplined fiscal policy and protection from this ever happening again. A firm hand will be needed though. Forcing Greece to cut its deficit from 14% of GDP to 3% while simultaneously fostering a lean and productive economy will be the union’s first step. If it succeeds, look for faith in Europe to be restored. Until

The Glue that Holds the EU

While any country threatening to default on its debt causes ugly waves in the global economy, things get particularly nasty when it involves a member of the Euro Zone. So nasty in fact, it’s a wonder Europe’s leaders ever let it come to this. The situation in Greece is shedding a lot of light on who uses the Euro and whether the currency bloc is such a good thing for both the continent and the global financial system.
From its onset, the Euro Zone was fundamentally a political creation driven by motives other than perfect monetary policy.  Laymen citizens from Europe’s smaller countries were enticed by something bigger then themselves and pressured their elected officials to make it happen.  On the other side of that table sat ambitious European Union policy makers giddy to lead grandiose, history making integration. It was to be the re-emergence of Europe as a global power, this time united and stronger than ever. It was this kind of hubris that led European leaders to trump economic realities with political considerations.
When the 11 nations (Greece was excluded) locked their currencies in January 1999 in preparation for the Euro, it was already clear rules were going to be bent.
Admittance conditions stipulating budget deficits not exceed 3% of GDP and that debt must remain under 60% of GDP were not met by members Italy or Belgium. When Greece with its massive debt joined in 2001, a year before the introduction of euro notes, its path was cleared for admission by the precedent set my Italy and Belgium and fudged data.
Once through the doors, Greek hit the Euro’s low interest borrowing buffet table slathering taziki sauce of everything, vamping up spending and debt instead of cutting deficits and liberalizing the economy. By the time the recession hit, Greek’s balance sheet was bloated with debt, the economy was floundering and nation was set to tank. Unfortunately Greece’s situation isn’t unique and is endemic of how much the Euro Zone was expanded. The  are now major worries the crisis will spread to Spain, Portugal and Italy and  infect the continent’s monetary and banking system. How did this happen? Politics and emotions surpassed numbers and economics. A good lesson for any investor. 

Britain Could Use another Churchill Right Now, or Even a Thatcher

Britain wakes up Friday morning to a cup of tea, bad breakfast and the stalemate of a hung Parliament. While final results aren’t in, it’s clear that for the first time since 1974, no British party will emerge with the necessary 326 parliamentary seats needed to form government. The debt ridden country now faces days of squabbling over conditions for leadership and coalitions.

Despite the fact his reigning Labour Party now holds 47 seats less than the Conservatives; Prime Minister Gordon Brown has made it clear he won’t be stepping down without a fight. His opponent is David Cameron, whose Tories now hold the most seats at 306 and are negotiating a coalition with the Liberal Democrats.

While everyone lost in this election, the real loser is the British economy. Britain has never been in a worse position to have its partisan captains squabble over the wheel rather than actually get things done. Britain’s debt is at a rank 11% of its GDP (the largest of the G7), unemployment is at a fifteen year high, the country suffered one of the worst recessions in the western world, will have an estimated deficit of $255 billion this year (the highest level since World War II) and is recovering from the financial crisis much slower than the US, Canada and swaths of Europe. Amidst what looks like dry rot crossed with a financial hurricane, the country needs a firm government with the ability to cut budgets, run a lean, efficient economy and reign in its finances. The call is Churchillian and doesn’t seem likely in country not at all used to coalitions.

Greece has shown the world that the Euro Zone is flawed and dysfunctional. It made everyone aware of what kind of tanking markets will take on the subject of sovereign debt default. We’re in a period where countries that once seemed rock solid are crumbling. Make no mistake; Britain’s stagnant economy and enormous debt levels leave the Empire in the same leaky boat as Greece. If something isn’t done by those that govern, more crashes are on the way and another bailout in Europe might be necessary.

The market has reacted as predicted. The pound fell over 2.4% against the dollar, 10-year gilts (bonds issued by the British government) are up by 7 basis points to 3.87 percent and analysts are maintaining a negative outlook on the pound. The bright side is that Moody’s Investors Service stated that election results are not a direct threat to the nation’s AAA rating. Look for slight gains when David Cameron and Liberal Democrat leader Nick Clegg announce their coalition plans Friday afternoon.

Greek Austerity Package

It’s absolute madness that the Greeks are killing each other over the IMF/EU’s conditions reagrding the €110bn rescue package. Here they are:
Public sector pay frozen till 2014
Public sector salary bonuses - equivalent to two months' extra pay - scrapped for higher earners and capped for others
Public sector allowances cut by 20%
State pensions frozen or cut; contribution period up from 37 to 40 years
Average retirement age up from 61 to 63; early retirement restricted
VAT increased from 19% to 23%
Taxes on fuel, alcohol and tobacco up 10%
One-off tax on profits, plus new gambling, property and green taxes

Even Oil Slick’s have Bright Sides

Since the oil mishap in the Gulf of Mexico, BP stock has plunged from USD630.00 to around USD570.00. Investors are now wondering what to do with the London-based energy giant. Should they sell and salvage what they can? Or is it a perfect time to buy in?
There’s a lot of variables at this point, including whether engineers will successfully cap the well, how much environmental damage this debacle’s going to cause and what kind of lawsuits BP’s facing. Everything’s still a veritable mess and it’s too soon to know exactly what kind of hits BP’s market cap is going to take.
However, looking at stock performance in previous oil disasters does give you some perspective. The most expensive oil spill in history was the Exxon Valdez tanker in 1989. The tab for cleaning up one of the most devastating human-caused environmental disasters in history ran to about $7 billion. While liberal estimates put the cost of cleaning up the Gulf of Mexico at around $15 billion, BP has already had double that that wiped off its market value. And while the energy company doesn’t have insurance for spills, BP won’t be on the hook by itself. Transocean, Halliburton and Cameron International all had roles in the accident and are all liable.
BP also has ample liquidity and a strong balance sheet to handle a crisis of this magnitude. According to FactSet data, the energy company has $70 billion in current assets, including cash, receivables and inventory, to set against $62 billion in short-term liabilities and $24 billion in long-term debt. Income last year was $21 billion on sales of $241 billion.
Big, media frenzy disasters tend to make for exaggerated stock movements that don’t necessarily reflect balance sheets. Given BP’s figures, shares look like a deal no matter kind of cleanup bill they flip. And the irony is, if the Gulf spill leads to higher global oil prices, that’ll benefit BP’s stock as well.

Why Palm Failed

The beginning and end of Palm's failed reemergence this year makes its flagship Pre phone look like a Hail Mary, a complex all in at a poker table with players it didn't understand. Yes, in light of Palm's announcement this week that it's for sale, it does make sense to attribute at least some of Palm's strategic incompetence and ultimate fumbling of everything (except the phone itself, which was great) to a kind of dooming go big or go home pressure. Because while the Pre was never going to be the iPhone killer newspapers loved heralding it to be, the product itself certainly had enormous potential.

No, it's not the software developers and engineers who are to blame, it's those who brought the phone to market. These people, worse then fumbling the ball, caught the hike and blindly lobbed it back into the mess surrounding the line of scrimmage. The spiral that ended with Palm's flop was one of continuously horrible marketing decisions, badly implemented partnerships with network providers and a disorientated branding strategy.

For starters, the release of the Palm Pre was immediately dwarfed a week later by Apple's announcement that it would be releasing its iPhone 3GS by the end of the month. Palm then chose to initially sell the Pre exclusively on American's third largest provider, AT@T, in exchange for an investment in advertising the phone. However, the ensuing marketing campaign ended up focusing more on AT&T's own branding then it did on the Pre. When Palm finally decided to move the Pre over to Verizon, America's largest provider, the company was told it would have to wait until January. This was highly problematic because come Christmas the Verizon customer market would be saturated with the Motorola Droid, a very slick and powerful smartphone released in December and backed by a $100 million holiday advertising campaign.

Palm's next big blunder involved its second phone, the Pixi, a less powerful and cheaper smartphone then the Pre. While the phone had strong reviews, the initial marketing approach took on a slightly feminine slant that quickly left the phone with an image of exclusivity for women. With half of its buyer base alienated, sales never took off.

So come April, Palm found itself with a blown marketing budget, a stock price 70% less then its high and most of its products collecting dust on shelves across the county. The only bright side seems to be that its For Sale sign will be hung and managed by Goldman Sachs. Though even that is looking less and less like good news.

Why You Should Buy Aol Shares

Investing your money in AOL sounds about as shrewd and anachronistic as buying a VCR. This is a misconception. It's been just over five months since AOL's spin-off from the disastrous 2001 merger with Time Warner and the company is being rebuilt to thrive in the changing digital landscape. Led by its CEO Tim Armstrong, a former president of Google's Americas operations, AOL is now an advertising and content company with high ambitions.

The revamped company is hoping to thrive by tackling a problem facing advertisers and publishers alike: how to create real money, value and effect through the internet. The widespread problem stems from the fact most companies try to squeeze and reshape what worked offline into something that works online. This is wrong. Instead, they should be embracing the internet as an opportunity that necessitates completely new forms of content, marketing and advertising relationships. The kinds of things we've never seen before, not sites that are clearly awkward transpositions of paper to screen but things built specifically for today's and tomorrow's internet.

While AOL is playing its cards close, the company has made it clear it's working on doing just that. Unlike search and its obvious giants, there really isn't anyone using global scale to dominate the dynamic and emotional forms of online advertising that the web demands. This is because a lot of the material on Web 3.0 will require either intense, line blurring cooperation between content publishers and advertisers alike or companies like Youtube, Facebook or Hulu who have enough vision, clout and ingenuity to hammer out new models with their own brand of revenue streams. Alone, The New York Times can't revamp advertising just as Saatchi & Saatchi can't jump start new content. The problem has to be solved from both sides in the middle, together. And it will be, eventually. But AOL, with big, versatile assets in both advertising and content has the resources and diversity to create everything internally and beat its competitors to the punch.

If AOL can get that right and use its scale to dominate its competitors, AOL will be a soaring global brand once again and a stock you'll be happy you bought now.

Weekly New Yorker Cartoon

The Insolent Walt Mossberg pestering Steve Jobs about the IPad

The Cadbury Takeover

Cadbury is a nearly 200-year-old British confectionary, an English institution of chocolate dating back to 1824. Like baked beans, financial services and the BBC, Cadbury is important to the British as both a institutional symbol of national identity and a generator of jobs and commerce. It's thus understandable that the British people where a little concerned last week when Kraft, the American behemoth and second largest food and beverage company in the world agreed to buy Cadbury for 11.9 billion pounds.

The acquisition has grabbed a great deal of attention and has lead many Brits to ponder, in a helpless, pub stool complaining kind of way just what the ramifications of their nation's inviting policy towards foreign takeovers might be.

Since the early 1980s, when Margret Thatcher removed huge swaths of legal barriers to foreign ownership of British companies, the list of businesses the United Kingdom can call its own is dwindling. The Empire no longer houses a single major auto maker and most of London's investment banks are foreign owned. England's steel, chemical, water and electricity industries are also foreign owned and most of the nation's ports and airports are controlled from abroad.

Unlike the United Kingdom, the government's of most European countries tend to block foreign takeovers as a protectionist measure for the job security of their citizens. In the United States, where an emphasis on the efficiency of free markets reigns, the government barres whole sectors of the economy from foreign takeovers. Even in capital hungry countries like China and India, strict regulations are put on investment and ownership from abroad.

The irony is if Britain, a nation clinging to its heyday more desperately than any country in the world, doesn't fix Thatcher's mistake, the Empire will be sold piece by piece to countries it remembers well.

J.D. Salinger's Afterword

J.D. Salinger has passed away and another writer from another era is gone. Louis Menand of the New Yorker looks over the deceased's most renowned character one last time.

Christina Hendricks of Madmen Strikes a Joan Holloway Pose at Sunday's Golden Globes

The Wasted Words of Hitchens

For the ever more lost and meaningless Vanity Fair, Christopher Hitchens asks what has happened to Gore Vidal. Unfortunately, Mr. Hitchens doesn't seem to be interested in answers anymore and the entire article is nothing more than an elegant hissy fit, worth reading only to get a sense of how malicious, fanatical and good at insulting people the author has become.

There is an answer to Hitchens' impolite question, and it's simple, obvious and completely excluded from the article: Gore Vidal has gotten older, he's almost 85 years old and facing octogenarian mental deterioration while trying to write about a world where people in their 50s (Hitchens is 60) are out of the loop. Comparatively, to frame and assess the abilities of great athletes who compete long past their past their prime (Re: Michael Jordan post second-retirement) with no inclusion of the effects of age would be as shallow, stupid and deprived of judgment as what Hitchens does here.

What happened to pre 9/11 Christopher Hitchens is a much more interesting question.

Weekly New Yorker Cartoon

Cheap Feed

Watch an exclusive video of Swype, a new touch screen texting software application that offers an innovative alternative to finger pecking. Read a brilliant postmortem story by David Foster Wallace at the New Yorker. The preview for Tom Ford's A Simple Man shows an understanding that style without substance is meaningless. For Manchester bands like Delphic, computers and good clothes are enough.

Google Chrome OS

Hulu and its CEO have it Right.

Under the steward of its buzzword spouting CEO, Jason Kilar (a refreshing executive of the 'new media' industry), Hulu will be a successful and lucrative (a few years away) 'content aggregate', advertising platform(?) and business model($). Buzzwords galore. Read up at Fast Company and catch Mr. Kilar on Charlie Rose.

Steve Jobs and Apple Successfully Patent a Not-So-Cool Advertising Approach

While huge swaths of digital content need to be monetized, this just doesn't sound right. In fact it sounds irritating and completely misaligned with the Apple brand. Albeit somewhat interesting.

Weekly New Yorker Cartoon

At Bloomberg, Modest Strategy to Rule the World

As usual, the New York Times implicitly writes about its own doom, profiling the rise of Bloomberg and its growing mainstream news arm.

Tina Brown and Barry Diller Preach Optimism about the Daily Beast with Katie Couric

Motorola's Droid to Rival IPhone on Verizon?

We'll see (read up at TechCrunch). The same was said about the Palm Pre. Regardless, the commercial is clever.

Clouds Ahead for Microsoft

An excellent New York Times article discusses the future (problems) of Microsoft and its relation to the tech market. While Microsoft may no longer be the star of the party, it still has some $31.45 billion in cash and short-term investments and $10 billion committed to R&D in the next few years. With that kind of financial weight and its enormous longstanding global tentacles, Balmer and his cronies have a lot of prospects.

Canwest, Canada's Largest Media Company Goes Bust

Read about it on the Grey Lady.

Weekly New Yorker Cartoon

Boris Johnson Vs. David Cameron

The Daily Beast's Matthew D'Ancona explains why the leader of Britain's Conservative Party isn't as chummy with London's conservative mayor as he used to be. Root for Boris in this rivalry.

Website of the Day: Incredibox

Bop and smile to your own beat with Incredibox.

Malcolm Gladwell on Spaghetti Sauce

3.5% of Google Wave Explained

Rupert Murdoch: "The internet is nothing more than a series of tubes"

Like most 78 years olds, the internet is a puzzling thing for News Corp's CEO and founder Rupert Murdoch. Despite everything he's done in the media business for the past half century, he can't appreciate or immerse himself in the changing dynamics of the internet the way people who didn't grow up in the era of Citizen Kane can. Vanity Fair's Michael Wolff does a great job of explaining why. Make no mistake though, News corp will thrive under its heir apparent; Murdoch's technocrat son, James Murdoch.

Tina Brown on Anna Wintour's (Ostensible) Turn Around

Tina Brown, founder and editor of The Daily Beast writes a short quipping appraisal piece on American Vogue's editor Anna Wintour's recent 'successes'. In light of her precarious disposition of being born in the 1940s and managing a magazine that's geared to the vanity of youth and bleeding money in a medium that's undergoing unprecedented technological and distribution revolutions, I'd say that neither letting people film her at work nor organizing a night where opportunists (a few of them consumers) are attracted to stores for autographs, free booze and food are successes. Like so many of the people over sixty who work for Vogue, her fate is sealed.

Weekly New Yorker Cartoon

The Frighteningly Good Goldman Sachs

This week, New York Magazine explains why you should either love or hate the cultish Goldman Sachs.

Say Goodbye to the Kindle and Buy Apple Shares

The undertones of Nicholoson Baker's highly critical New Yorker piece on the Kindle hint that Amazon's attempts to be the front runner in the future of reading are doomed. I have to agree. Amazon just isn't equipped to build a device with the all-in-one diversity demanded of today's hand held technology and befuddled media industry. Shame, it was a valiant attempt, and the potentials of electronic ink are enormous.

Jason Scharwz of Seeking Alpha puts the nail in the Kindle's coffin and explains why Apple's next 'revolutionary' product will not only be the most sought after method of interacting with information and media but will spawn standards and business models across the web.

David Lynch's Interview Project

Fitzgerald said there are no second acts in American lives. In his free online Interview Project, David Lynch shows us the proverb certainly rings true for down and out middle-aged citizens of America's Midwest. Spanning 20,000 miles and 121 interviews, it's mostly red state America, looking destititue, lost and very human.

Artist Dash Snow Dead, Heroin Overdoes, 27

Like most of the 27 club, something burned brighter. His lifestlye was his art. Read a bit about him in a New York Magazine profile from 2007. As any good artist is worth more dead, expect a torrent of flashy magazine profiles by the end of the month.

Canadian Company Pays $1,680,300 for Lunch with Mr. Buffett

It was released yesterday that last month's winner of the annual auction for a lunch with the Oracle of Omaha was the Canadian wealth management firm Salida Capital for a whopping $1,680,300. The proceeds will go to the San Francisco Glide Foundation.

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David Foster Wallace's Kenyon Commencement Address to the Graduating Class of 2005

Read David Foster's 2005 Commencement Speech at Kenyon College, Ohio as he narrates how to say conscious and alive during the banality of day in and day out life. His tagic suicide in September of 2008 makes him no less credible.

Roger Federer as Religious Experience

In light of Mr. Federer's historic 15th Grand Slam victory, a beautifully written, perceptive and intellectually curious article on the tennis maestro by the late author David Foster Wallace is a perfect read, despite being written in 2006.

British National Party

Watch Nick Griffin, chairman of the British National Party (the UK's exclusively white, ultra far-right, anti-immigration party which last week, won it's first two seats in the European Parliament) make his way through a barrage of hurled chicken ovum, violent shoves and chants of 'Nazi Scum'.
With England's rotten economy worsted only by its sleazy parliament, the fascists and racists are getting elected out of the woodwork. Britain should be ashamed.

Weekly New Yorker Cartoon

Boris on the Heff

In the most recent of his Telegraph columns, Mayor of London Boris Johnson (left), a verbose, affable clown with Churchillian ambitions, makes a brilliant call for journalist Simon Heffer to save British politics.

Heffer (below), the staunchly conservative writer for the Telegraph is a trenchant and esteemed contrarian who's prominent for delivering lines like 'The reason we have an underclass is because we have decided to pay for one' .

Another Loss for Prime Minister Gordon Brown

With all the stinky huff surrounding these British trolls (apologies Ms. Boyle), it's truly special they look like twin siblings.

It's time for Gordon Brown to abdicate New Labour's throne. As Britain's leadership crisis kicks into high gear, the Prime Minister has hit rock bottom. Let's hope he doesn't get the drill out. 

Montreal to Get Shared Bike System

Following Paris, where shared bikes are as popular as baguettes, Montreal, Quebec gets 3000 shared bikes from a company called Bixi (Bike+Taxi) in June. Brilliant idea, though four months of snow and seasonal removal/installation/storage might make turning an annual profit a tad more difficult than its Parisian forerunner. It'd be awful to see an endeavor like this go bust. 

2009 White House Correspondents Dinner

Parts one and two of Obama's very funny speech at the 2009 White House Correspondents Dinner. 

Weekly New Yorker Comic

Collision: Christopher Hitchens VS Douglas Wilson

Watch the juxtaposed previews for Collision, a documentary and debate between Christopher Hitchens, a scornfully atheist journalist who's as debauched as he is erudite and Douglas Wilson, a robust biblical orator who's deftly straight and narrow. 

Goldman Sachs Posts Quarterly Profit

While Goldman's quarterly earnings of $1.81 billion exceeded the expectations of analysts, its not surprising of America's most sagacious and powerful investment bank. Read Charles Ellis's The Partnership: The Making of Goldman Sachs and you'll catch my drift. With plans to issue $5 billion in common shares, Goldman's on its way to paying down its $10 billion dept to the US government, possibly making it the first and fastest big bank to do so. 

However, as hinted in the WSJ article, Goldman's precocious profits and early loan repayment could prove systemically problematic.  The US government, along with loaning major investment banks copious amounts of money, shackled them and their major bread-winners with pay restrictions. As a result, the first banks to pay off their debt will be the first to freely attract talent at the natural astronomical market rate. With money-earners flocking to unrestricted banks, debt-laden companies will be subject to a growing brain-drain. The ensuing cyclical pattern isn't hard to imagine and will make loan repayment for banks with restricted compensation schemes increasingly improbable. As we know from the Lehmam experience, a bankrupt investment bank threatens the system as whole, including blue-chips like Goldman Sachs. 

For a topical lighter note, have a look at Malcolm Gladwell's New Yorker essay on the successes of Sydney Weinberg, one of Wall Street and Goldman Sach's most idiosyncratic, inspirational and influential executives of the mid 20th century.

Vanessa Grigoriadis's Do own Facebook? Or does Facebook Own You?

Despite her platitudinous choice of title, Vanessa Grigoriadis's look at Facebook in this week's New York Magazine is a worthy read. As Facebook grows as a company and social gauze, there'll be plenty of snarky journalists with more then enough to say. However, Facebook's real significance is as a potential victor in the platform war with Google, not some tacky appeal to vanity and voyeurism. 

Jonathan Jarvis's The Crisis of Credit Visualized

Jonathan Jarvis's little video The Crisis of Credit Visualized strives to be an eleven-minute epiphany regarding the current financial flop. Alas, for the layman eager to understand the headlines in the newspapers he doesn't read or why his brother-in-law was laid-off, the clip falls short. 

Yes, the essential institutions and their basic roles are there, in fine animated brevity, but how much of this nominal barrage will actually click and stick with someone who needs such a video in the first place? Despite looking like something geared for grade six, anyone enlightened by the film would be hard-pressed to recite its glossy explanation without feeling like something of a stumbling, stuttering sham. After all, who exactly are these investors that bought AAA rated debt? What is an investment bank? Or a hedge fund? What use is a block headed understanding of finance?

Without watching the clip several times, researching what these institutions actually are and finally committing it all to memory (at this point you might as well have picked up a book), Jarvis's target audience of financial moles will walk away with the same basic understanding of the debacle that they'd already gleamed from the past eight months of news. 

At its worthwhile best, the film's looping diagrams of throbbing arrows aptly illustrate how the whole affair was one big debt-lubricated circle-jerk, even if you can't remember names or seating arrangements.