In Tip Top Type Shape....

From Tom T. of New York, the phrase for this post is "Carriage Return"

Tom and I argued about whether the carriage returns of our old manual typewriters from "Yo" Adrien Block  Intermediate School went left-to-right or right-to-left when the typist finished typing a line.  Of course I was correct (the carriage returned from left to right) and we continued about how things were done in the good old days of 1981.



Occasionally, I reminisce about the good old days when broker commissions were percentage points instead of basis points, quarters were necessary to make phone calls while on the street, Atari 2600 was the game system of choice, Queen of Hearts was on the radio, Sony Walkman on my belt, and the Glass-Steagall Act (GSA) was still in force. Many of these wonderful things have been replaced by the significant advances of technology. Of course, the younger generation has no memories of the wonderful trinkets of my adolescence.

Me: [Pantomiming typing on a manual typewriter and hitting the carriage return] Honey. what am I doing?

Precious 10-year old daughter: Typing on a computer and hitting it when it doesn't do what you want it to do.

The innocence of youth is wonderful. The innocence of policy makers is ... well... pathetic.

The only thing not replaced by new and better technology is the Glass-Steagall Act of 1933.  This brilliant piece of legislation not only created the FDIC but prevented bank holding companies from owning any other financial concerns. As an interesting historical note, Senators Glass and Steagall were from from Virginia and Alabama, respectively, and this was the last time senators from either state created good financial regulations.  The Act was castrated (see my previous blog) by the Gramm-Leach-Bliley act (Senator from Texas and Representatives from Iowa and Virginia) in 1999 and signed by that Good Ol' Boy; President Billie Bob Clinton.  The Congress in its infinitesimal wisdom gave banks the ability to take on significantly more risk without regulation or regulators to monitor it. So as a direct result, the FDIC has had to shutter more than 106 banks in the first 10 months of 2009.

So let's raise a toast to Arthur, watch Jane Fonda overact by a Golden Pond, salute Private Winger, and take a spin on the Cannonball Run. Good bye 1981, I .... nope.... I don't miss it.

Album of the Post



While listening to NPR, I heard of an album dedicated to the Brooklyn-Queens Expressway by Sufjan Stevens. I couldn't believe any sane musician would create a piece of music to a New York City throughway (Feeling Groovy notwithstanding). However, after listening to sections of the album on iTunes, it's the best new orchestral music I've heard in a long time.

I recommend it with 4.5 stars!

Next week's word of the blog is "Harangue" from Ben S.

Thanks and keep those word suggestions coming!!!

Ouch! This is gonna hurt you more than me...

It's not just for animals...

From Harold B. of Minnesota, the word for this post is "Castration".

Harold is a college friend and his suggestion makes me worry about him. I'll be calling and making sure he's all right.

Normally, I post pictures related to the subject of the blog entry but I just can't bring myself to do it.

Castration comes in many forms and happens for many reasons: The castration of Eunuchs to protect the harems, men who go through the painful and extremely expensive sexual reassignment surgery, and of course, what women have been doing to men for centuries... just without a knife (unless your name is Bobbit).

I'm fortunate enough to be married to a wonderful woman who came from a matriarchal household. After my third date, my future mother-in-law took me aside and told me in her thick Eastern European accent "If you touch my beloved daughter, you will never salute sun again..." My wife learned from her mother and to this day, I wear a metal sporran. Castration can come in many forms.

Financially speaking, I wonder why haven't corporate boards or activist shareholders haven't castrated CEOs like Zeus upon Uranus. Corporate Boards hire CEOs with iron clad contracts as if all these fine upstanding citizens are the Michael Jordans of the business world. I'll remind everyone there is only one Michael Jordan. The closest superstar in the business world is the one and only Warren Buffett. Even Bill Gates is no Warren Buffett. Why can't we just go back to the tried and true way of pay for performance?

The only CEOs who seem to have their salaries castrated are the ones from companies which received American Tax Payer bailout money. While I haven't had much positive to say about Obama's economic wonderboy (His Royal Highness Larry Summers), I'm thrilled the Pay Tzar (with the extremely spiffy title of Special Master for Executive Compensation) Kenneth Feinberg has drastically cut 25 salaries of executives in seven companies. Maybe other companies can learn this important lesson. "He who has the gold, rules."

"Socialism! Communism! Populist Government run free enterprise!" I hear from my fellow University of Chicago free market economists. To them, I reply "Codswallop!" Once the government has to bail your sorry over-leveraged balance sheets out of the fire, you've lost all right to hold your head up high and claim free-market economics! The companies and the people involved do not deserve to have their full paychecks! The poor executives who still have jobs will have to live on a mere $5,000,000 a year. Like the rest of us they'll have to learn to shop in Wall Mart, Target and (gasp!) K-Mart! Like I tell my kids, "You broke it you pay for it!"

Financial Book of the Blog

Animal Spirits: How Human Psychology Drives the Economy and Why it Matters for Global Capitalism by George Akerlog and Robert Schiller.

Ranking: 3.5 Stars

Only Professors Akerlog and Schiller can take the simple of idea that worth is in the eye of the buyer and turn it into a turgid densely written tome. Still they have some good points but only people with an economics graduate degree should read this book.

Next week "Carriage Return".

Peace.

Financial Improvisor!