Michael Lewis's latest chapter length depresso is about California and how many of the cities there are pretty royally fucked because of pension promises that will begin to come due very soon, and in some cases have already begun to cause problems. One thing I learned, the states won't ever have to bust their budgets because they can force more and more costs on to the cities. (I guess counties can do this, too, because this is exactly what happened in Topeka yesterday, where the city council voted to decriminalize domestic battery in order to force the county district attorney to start trying these cases again. He stopped last month citing budget concerns.) Anyway, we're screwed, so here's Lewis talking about a bike ride he took with Schwarzenegger.

He hauls a bike off the back of the car, hops on, and takes off down an already busy Ocean Avenue. He wears no bike helmet, runs red lights, and rips past do not enter signs without seeming to notice them and up one-way streets the wrong way. When he wants to cross three lanes of fast traffic he doesn’t so much as glance over his shoulder but just sticks out his hand and follows it, assuming that whatever is behind him will stop. His bike has at least 10 speeds, but he has just 2: zero and pedaling as fast as he can. Inside half a mile he’s moving fast enough that wind-induced tears course down his cheeks.

He’s got to be one of the world’s most recognizable people, but he doesn’t appear to worry that anyone will recognize him, and no one does. It may be that people who get out of bed at dawn to jog and Rollerblade and racewalk are too interested in what they are doing to break their trance. Or it may be that he’s taking them by surprise. He has no entourage, not even a bodyguard. His former economic adviser, David Crane, and his media adviser, Adam Mendelsohn, who came along for the ride just because it sounded fun, are now somewhere far behind him. Anyone paying attention would think, That guy might look like Arnold, but it can’t possibly be Arnold, because Arnold would never be out alone on a bike at seven in the morning, trying to commit suicide. It isn’t until he is forced to stop at a red light that he makes meaningful contact with the public. A woman pushing a baby stroller and talking on a cell phone crosses the street right in front of him and does a double take. “Oh . . . my . . . God,” she gasps into her phone. “It’s Bill Clinton!” She’s not 10 feet away, but she keeps talking to the phone, as if the man were unreal. “I’m here with Bill Clinton.”

As a bonus, here's a profile of Lewis from NY Mag.

The Federal Reserve Bank of Boston is right next to the #occupyboston campground. This was taken from the 23rd floor of the Fed's office. There's something to the fact the picture was taken from high above in the Fed, right? It's symbolic of something...



(via @timlanning and @BostonTweet)

It says here that Brad Pitt has optioned The Big Short. As loyal readers, you'll know that I've been using the platform of Unlikely Words for several years to advocate for a movie based on Liar's Poker. Actually The Big Short and Liar's Poker could be released together as a part 1 and part 2 of the financial collapse. Shia Labeouf could play a young Michael Lewis.

Pitt's Plan B productions is going full steam ahead on an adaptation of Lewis' latest, "The Big Short," about the events that led up to the current financial fiasco. They're set offer Charles Randolph ("The Interpreter," "The Life of David Gale") $750G to write a script, reported New York mag's Vulture.

Every couple months or so, I do a little Googling to see if Liar's Poker has been optioned yet. Turns out it was optioned 20 years ago. Make the fucking movie already.

A few more Michael Lewis links to round out the day:
Complete Guide To Who's Who In The CDO Scandal
Goldman Sachs Is Doomed

On Oaths

We pledge to meet and even get to know ordinary people who do not work for Goldman Sachs, so that we might better understand their irrational behavior, and exploit it only when necessary.

Which I suppose is exactly what they had in mind when they put together their master plan, but it's still a little shocking:

In the quarter ended March 31, Goldman made money on every single trading day. The firm did not record a loss of even $0.01 on even one day in the last quarter. That's 63 days profitable out of 63 trading days. The statistic probability of this event is itself statistically undefined. Goldman is now the market - or, in keeping with modern market reality, Goldman is the house, it controls the casino, and always wins. Congratulations America: you now have far, far better odds in Las Vegas that you have making money with your E-Trade account.

When they've gotten so brazen they don't even care about the optics of something like this, you know we're all in trouble.

Looks like Brad Pitt's production company is about to option another Michael Lewis book. One that hasn't even come out yet.

Plan B Entertainment, is closing on a deal to option Lewis's next book, The Big Short: Inside the Doomsday Machine, a chronicle of Wall Street greed and the swollen U.S. housing market. Pitt is also considering starring.

I swear if someone doesn't start making a movie about Liar's Poker soon, I'm going to start typing in all caps. And I'll mean it, too. The fact that it's not a movie yet makes me itchy.

Slacktivist has 16 steps Glenn Beck should take to stop being so angry.

8. Notice that the amount of your pay withheld to pay for your health insurance is a lot more than it was last year.
I won't ask you to dig up old paychecks from 2008 and 2007, but this has been going on for a long time. Every year, the amount of your paycheck withheld to pay for your health insurance goes up. A lot.

The MintLife Blog describes 4 ways Customers are Sticking it to the Big Banks in response to arduous measures banks have taken in the last year or so.
They are:

Withdrawing Money
Switching to Smaller, Local Banks
Heightened Interest in Online Banks
Outright Refusal to Pay

If this continues to happen at a higher rate, it will eventually have an impact. Or maybe that's naive.

It's come to this.



Via Andrew Sullivan

Even when HAMP works, it doesn't:

Recently, Airan-Pace secured a modification for a Miami Beach client that shrank his monthly payment from $3,700 to $1,600. But it was only a reduction in interest rate — allowed by the Home Affordable Modification Program to go as low as 2 percent.
"I called him in and he said, 'I'm not signing this,' " Airan-Pace recalled.
He owed $470,000 on a property worth less than half that.

The NY Times discusses the problems caused by rewards earning credit/debit cards for merchants and consumers alike. Visa, and to a lesser extent Mastercard, come off looking like health insurance companies. Entities who don't add significant value to the economy, but manage to skim huge profits and act as a burden anyway. One solution:

Life might be simpler and more efficient if retailers could levy a surcharge that covers their costs to accept cards and let consumers figure out whether to pay it. But the card companies don’t allow that, and Congress hasn’t yet forced their hand, though this is now how things work in Australia (where some retailers charge excessive fees, alas).

And from a few days earlier, here is the Times talking about why the fees are so high.

The banks have used interchange fees as a growing profit center and to pay for cardholder perks like rewards programs. Interchange revenue has increased to $45 billion today, from $20 billion in 2002, driven in part by the surge in debit card use.