Unlikely Words » we’re fucked

Michael Lewis on California

aaron cohen — Thu, 13 Oct 2011 14:08:54 +0000

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.

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Picture of #occupyboston…from the Fed building

aaron cohen — Mon, 03 Oct 2011 21:54:32 +0000

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)

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Brad Pitt Options Wrong Michael Lewis Book

aaron cohen — Fri, 02 Jul 2010 14:52:44 +0000

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.

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Goldman Didn’t Have A Single Day of Loss Last Quarter

aaron cohen — Wed, 12 May 2010 22:06:41 +0000

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.

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Brad Pitt Close to Optioning Another Michael Lewis Book

aaron cohen — Thu, 04 Feb 2010 20:57:40 +0000

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.

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16 Step Program

aaron cohen — Thu, 28 Jan 2010 16:07:57 +0000

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.

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Fighting Back

aaron cohen — Mon, 25 Jan 2010 21:00:05 +0000

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.

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Get Some Balls

aaron cohen — Sat, 23 Jan 2010 19:15:12 +0000

It's come to this.

Via Andrew Sullivan

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Homeowners opt to flee instead of fight as loan modifications start to lose luster

aaron cohen — Fri, 22 Jan 2010 18:18:36 +0000

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.

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The Trouble With Debit Cards

aaron cohen — Thu, 21 Jan 2010 15:48:15 +0000

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.

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Strategic Default

aaron cohen — Fri, 15 Jan 2010 21:14:25 +0000

I missed this NYTimes piece by Roger Lowenstein discussing how incongruous it is for big banks to be the main cheerleaders for the idea that people have a moral imperative to continue paying mortgages when their homes are underwater. This concept seems perilously close to a tipping point that would have disastrous results for the economy. What would the banks do then? Lowenstein, by the way, wrote the great, "Rise and Fall of Long Term Capital Management", which is as good as, "Liar's Poker" at helping to explain the genesis of this entire mess.

Think of private-equity firms that close a factory — essentially deciding that the company is worth more dead than alive. Or the New York Yankees and their World Series M.V.P. Hideki Matsui, who parted company as soon as the cheering stopped. Or money-losing hedge-fund managers: rather than try to earn back their investors’ lost capital, they start new funds so they can rake in fresh incentives. Sam Zell, a billionaire, let the Tribune Company, which he had previously acquired, file for bankruptcy. Indeed, the owners of any company that defaults on bonds and chooses to let the company fail rather than invest more capital in it are practicing “strategic default.” Banks signal their complicity with this ethos when they send new credit cards to people who failed to stay current on old ones.

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Govermental Dreams

aaron cohen — Mon, 04 Jan 2010 18:21:52 +0000

Emanuel Derman dreams:

I had a fantasy in which the Fed and the TSA (Transportation Security Administration) switched roles.

If a bank failed at 9 a.m. one morning and shut its doors, the TSA would announce that all banks henceforth begin their business day at 10 a.m.

And, if a terrorist managed to get on board a plane between Stockholm and Washington, the Fed would increase the number of flights between the cities.

Via Felix Salmon

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Cash for Your Warhol > Cats for Gold

aaron cohen — Thu, 19 Nov 2009 16:40:18 +0000

If only because Cash For Your Warhol came around many, many months (a year even?) before Cats for Gold. That is all.

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Ur Doing it Wrong!

aaron cohen — Mon, 16 Nov 2009 16:00:30 +0000

For some reason, Washington is afraid to push reform onto Wall St. It doesn't make any sense, and now probably won't happen. Incidentally, Wall St has determined they have more to gain propping up Republicans than they do donating to Democrats, who, you know, are actually nominally in charge. At least until 2010.

The big guns on Wall Street increased their political donations last month after increasing their lobbying muscle. Morgan Stanley's Political Action Committee donated $110,000 in September, for example, of which Democrats got $43,000.

It's going to be so awesome when this happens again and it's worse!

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Two Links from Two Weeks Ago

aaron cohen — Wed, 11 Nov 2009 15:54:08 +0000

Two links from two weeks ago that you may or may not have seen, but I had saved to share and not gotten around to it yet.

The Yes Men sent out a hoax press release from the US Chamber of Commerce saying they had changed their position on climate change. Obviously the media was interested in this so the Yes Men rented a room at the DC Press Club and gave a fake press conference. Then it gets really awesome when a representative of the Chamber shows up and shuts down the presser. And now, they're getting sued for it

Via TPM.

If you saw the profits made by the big banks last quarter and wondered how they were doing it, Philip Greenspun has an answer:

Because of the Collapse of 2008 financial reforms, the big investment banks are able to borrow money from the U.S. government at 0 percent interest. Then they can turn around and buy short-term bonds that pay 2 or 3 percent annual interest. Now they’re making 2 percent on whatever they borrowed. They can use leverage to increase this number, by pledging some of the bonds that they’ve already bought as collateral on additional bonds.

It's all so awesome, isn't it?

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You Don’t Need to be Right…

aaron cohen — Sat, 01 Aug 2009 14:19:41 +0000

In a new interview on HuffPo with Terrence McNally, Michael Lewis explains why it only SEEMS like all the financial firms were full of idiots (instead of actually being idiots).

As a trader inside a big Wall Street firm...you would face a decision: Do I exercise my independent judgment and bet against this market, or do I just keep going along with what my firm is doing? If you exercise your independent judgment and bet against sub-prime mortgage bonds, you not only probably run into some political conflict within your firm, but you'd never make the big score for yourself... The minute you make a bunch of money from your bet, your firm is doomed. They couldn't pay you. So the smart thing was just to go along and hope it lasted long enough for you to get rich.

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Michael Lewis vs Matt Taibbi?

aaron cohen — Tue, 28 Jul 2009 18:56:42 +0000

If you read Michael Lewis' latest Bloomberg column, Bashing Goldman Sachs Is Simply a Game for Fools, quickly, you might think it's a brutal take down of the newest Wall St muckraker (Taibbi) by the grand marshal of Wall St muckraking (Lewis). Fortunately or unfortunately, depending on how you look at it, this column seems to be satire. I can't decide which I'd prefer to see, a Lewis/Taibbi Tag Team, or a knockdown drag out between the them. In any case, a good read.

America stands at a crossroads, and Goldman Sachs now owns both of them. In choosing which road to take, ordinary Americans must not be distracted by unproductive resentment toward the toll-takers. To that end we at Goldman Sachs would like to dispel several false and insidious rumors.

Thanks, Mike.

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Matt Taibbi vs Goldman Sachs (Full Text)

aaron cohen — Mon, 13 Jul 2009 15:25:14 +0000

Matt Taibbi's recent take down of Goldman Sachs in Rolling Stone, The Great American Bubble Machine, is full of Taibbi's usual clever turns of phrase and acerbic prose. What I feel differentiates this article from his work is the high pitched response from Goldman Sachs and detractors in the media who are making tons of points about Taibbi's article, none of which are, 'It's not true.' (PDF and Full Text of article.)

Felix Salmon has a refutation by a Goldman flack.
Taibbi responds to the flack and notes why Goldman's POV is not represented in the article. They didn't want to talk.
Time Magazine steps into it in a somewhat ham handed way. Not making many points or adding much substance to the discussion.
Taibbi responds to Time, taking most issue with Time's 'everyone was doing it' defense of Goldman.
Megan McArdle somehow connects Taibbi's writing to Sarah Palin, which doesn't make much sense. Then she hangs out in the comments section saying, "I'm just not down with the idea that there's some sort of elusive "central point" to stories that permits you to write a bunch of total nonsense as long as the "central point" is good." Which, as a commenter points out, will probably be posted as a comment on every McArdle piece for the rest of time.
Here's Obsidian Wings saying the article isn't as bad as Kevin Drum said it was (though Drum then recanted his statement based on the fact that Rolling Stone confusingly posted excerpts of the article online instead of the full text).

More as it comes in.

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Michael Lewis in Vanity Fair on AIG – The Man Who Crashed the World

aaron cohen — Sat, 04 Jul 2009 17:51:03 +0000

Vanity Fair has a habit of posting stub abstracts of their bigger articles. This isn't exclusive to VF, Rolling Stone does it, too, but it is an annoying way of using the web. Barry Ritholtz takes them to task for this, and then publishes the PDF that they sent him to drum up publicity. If you can't wait until next week to read Michael Lewis' take down of Joe C and AIG that explores among other things:

How A.I.G. F.P. became the first stop for Wall Street banks looking to insure the massive amounts of debt they were buying, packaging, and selling: “We were doing every single [credit-default swap] deal with every single Wall Street firm, except Citigroup,” says one A.I.G. F.P. trader. “Citigroup decided it liked the risk and kept it on their books. We took all the rest,”

click above for the full article.

In other Michael Lewis news, you probably knew that the Siderbergh/Pitt vehicle, 'Moneyball', got axed last week. Here's an insider's version of events that doesn't make anyone at Sony look very good. Sandra Bullock's 'The Blindside' continues to truck, and still, for some reason, no one has made any moves to make 'Liar's Poker'.

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Michael Lewis vs Fareed Zakaria

aaron cohen — Wed, 10 Jun 2009 13:18:58 +0000

What's coming for the big banks?
"I think they steadily become much more boring. I think they steadily attract a lesser caliber people to work for them and they pay less."

"The people who created the problem are so powerful in deciding in what the solution to the problem will be."

I'll say it again. No one wants to make Liar's Poker into a movie? How can this be?

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