The Haiku of Finance for 02/27/23

Crypto is worthless

Wonder why people own it

They all got swindled

The Haiku of Finance for 01/31/15

Dreaming is lazy
Action beats a worthless wish
Get off the lame meme

Achievement Requires Action Beyond Sharing Lame Memes

It's cute to see people spread motivational sayings around as social media memes.  Toms of Twitter feeds are devoted to squeezing out daily dozens of comforting aphorisms.  It takes zero effort to click a like button.  Unfortunately, real accomplishment always requires far more work than passing a quote around among bots.

Modern Americans have gotten fat, lazy and stupid.  Three generations of expanding middle class entitlement programs got the ball rolling.  Dumbing down public education to the lowest common denominator of what a unionized teacher finds palatable helped move it along.  Cultural worship of self-esteem over the stress of working toward a goal was the coup de grace.  Politicians and popular entertainers who pander to emotionally needy "tall adolescents" put the final nail in the coffin.

Cheap capital and energy make life easy.  Life throughout much of human history has rarely been easy.  Lazy Americans are in for a world of hurt when the the Federal Reserve can no longer accommodate their coddled lifestyles with costless credit.  I expect social media memes during the second half of this decade to reflect the bitterness of many newly impoverished Americans.  Lots of people are going to learn the hard way just how hard life can get.

Wishing on a star does take the wisher to the star.  The star does not care what a wisher thinks.  Goals are great to have.  Making a goal manifest in reality means work, focus, resilience, and perpetual repeats of a grinding cycle with no assurance of success.  Belief is not enough.  Achievement requires action.

Pure Internet Gold From The Minds Of Reddit Bitcoiners

I check out Reddit once in a while for random inspiration.  It's a jungle out there and I like cutting through it with the brute force digital machete that is Alfidi Capital.  I never know whether I'll find pearls of wisdom or juvenile ramblings.  It's usually more of the latter but that's okay.  Arrested development adolescents need to let their primal screams out somewhere.  Better that they spew to Reddit threads than deface a bathroom stall.

The Reddit community on Bitcoin must be oodles of fun for people with no lives.  It is the only corner of the financial world where overgrown infants, naive dreamers, and other cutting-edge crybabies can congratulate themselves for knowing nothing about money.  They find a worshipful audience on Reddit.  I've selected some of the best recent comments from the Bitcoin subreddit below in italics.  Errors in spelling, capitalization, and other fundamentals of intelligible communication remain as their authors intended.  I will not identify the perps because they may want to grow up someday.  My own comments always follow.

So i should recommend to my 70 year old grandma to put all her savings into bitcoin (what's the easiest way to teach her bitcoin? took me years to teach her email/skype... think she might be dead before she's able to transfer funds on her own)? How will this stop the government from taking her tax refunds which are not in bitcoin? What happens if the price drops under the current 400$? I love bitcoin and what it stands for but you needa stop drinking the Kool-aid.

Stop right there, dude.  The apple didn't fall too far from the tree if grandma's tech learning curve is indicative of this Bitcoiner's abilities.  Oh BTW, the government can and will assess the value of your Bitcoin for tax purposes since the blockchain is publicly available.  I think the easiest way to learn Bitcoin is to watch a video of 1990s teens playing with "Magic:  The Gathering" cards.  That's kind of how the Mt. Gox Bitcoin exchange got started anyway.  Kids using cards to pretend to be wizards is just like grown adults playing with digits and pretending to be bankers.  See, it's really easy for granny and her quilting bee.  

I bought about $1,000 worth just for the sake of holding on to it long term. It's a decent chunk of change for me but it's also an amount I'm comfortable losing.  But this is exactly why I'm not discouraged over "losing" almost half of my $1k investment. There will be another spike at some point and I will either hang on until that happens or until I lose it all.

What was your cost basis for tax purposes?  Can you prove it?  The IRS will want to know and federal tax returns are due in four days.  Oh, wait, I'm talking about a bunch of people who think they don't have to pay taxes.  Never mind, idiots.  Just hang on until you lose it all.  It's funny that this person conflates "long term" with some point where they may "lose it all."  This person is definitely not Warren Buffett.  

Long term speculators don't create as much instability.  

Say what?  What exactly is a "long term speculator" anyway?  That might be a conventional investor like me who performs a valuation analysis before committing to an investment, but to Bitcoiners I'm just another gambler.  Moral equivalency is great when you don't have to account for cognitive deficiencies.  

Bitcoin is way more influential than Dogecoin is. Marketing does matter, or else our dog-based coin wouldn't have gotten this far. DOGE is honestly a lot more style over substance but obviously style is important to people. I hope that Dogecoin will teach Bitcoin about style in the same way that I hope that our community looks towards Bitcoin for substance.

Dogecoin teaching style . . . means Bitcoin will need an animal mascot.  Somebody already picked the honey badger.  Bitcoin teaching substance . . . means Dogecoin will be based on nothing.  Oh, that already happened.  Maybe these Reddit people aren't as cutting-edge as I had assumed.

This sort of thing is baffling to me on the altcoins. A new business shows up and because it has an address, and an office there is immediate trust in them. We have seen large scale operations fail time and time again.  We need businesses involved in the currency but we also need healthy skepticism when it comes to verification. 

The above comment might be the all-time winner for far-out fantasy.  It deserves a prize of some sort but Alfidi Capital has no prizes to give.  Follow this one down the rabbit hole.  A business with a known physical office and identifiable employees is somehow less trustworthy than a bunch of random hashes floating through cyberspace that hackers can steal and duplicate.  Yeah, ooookaaaayyyy.  This implies that the only thing more trustworthy than Bitcoin would be something completely unverifiable, like a fantasy land of fairies and unicorns.  Wait a minute . . . that takes us right back to "Magic:  The Gathering" again!  Brilliant.  

I just can't believe people would run scams as public figures, when it's so easy to do it in the Bitcoin crowd as anonymous figures. People around here are very trusting of anonymous figures.

OMG!  OMG!  Just when I thought there was an all-time winner, another gem falls out of the sky!  Here's a Bitcoin fan admitting the ease of scamming the rest of the community.  Anonymity is some kind of holy grail on Reddit.  It allows emotional cripples and shut-ins to pretend to be knowledgeable.  Anglo-Saxon cultures have long recognized anonymous communication as a form of free speech because it can shield unpopular authors from abuse.  The downside is that the rest of us have to wade through Bitcoin garbage to find comedy.  

In the bitcoin world embezzlement is indistinguishable from a hacker attack.

Exactly.  They both come with criminal penalties in the real world.  In the Bitcoin underworld, these things confer street cred.  I expect the next crypto-coin fork to allow graffiti artist tags.  

I still believe that bitcoin is the most regulated currency in the world. Criminals are way too vulnerable when using bitcoin.

This is awesome.  Precisely one IRS decision covers Bitcoin, and that was all anyone needed to move Bitcoin into the "asset" column of a balance sheet.  Calling it the "most regulated currency" ignores the wire transfer protocols, bullion holdings, transfer pricing agreements, and other facts that govern real currencies.  Calling criminals "vulnerable" in Bitcoin insults the abilities of the thieves who busted Mt. Gox out of millions.  They still haven't been caught.  I know, Bitcoiners, facts are hard to understand.  It's so much more fun just to make things up.

The bottom line on all of these Reddit commenters is that they are dumber than dumb.  There may be some pseudo-intellectuals in there to give the Bitcoin community a natural ruling elite but they function much like wooden decoys on a duck hunt.  They make it easier to identify the fowl that respond to hunting calls.  Reddit brings out the worst in people who are too immature to be trusted with adult responsibility.  Bitcoin will never be a currency but its advocates' stupidity is pure Internet gold.  

Proof That a USF MBA Is a Poor Value

I have long been a severe critic of my MBA alma mater, the University of San Francisco.  I wasted two years and thousands of dollars of my own money (saved up from US Army active duty) on a worthless MBA.  I now have independent confirmation from a well-known data collection that confirms my opinion.

US News and World Report publishes graduate school rankings.  Check out the USNWR report on the USF MBA program for 2013.  I'll highlight the most relevant part with a screenshot below.

That starting salary of $69,353 is pathetically low.  That 51% employment figure is also extremely low.  Most MBA graduates earn far higher compensation and have a much greater chance of landing a job after two years of hard academic work.  I want that to penetrate your brains, people.  A USF MBA gives you barely a coin toss worth of luck in finding even a low-paying job.  

Consider that most USF MBA grads work in the San Francisco bay Area, unless they are international students who return to their family businesses in their home countries.  The average starting salary in San Francisco for an entry-level position that requires only a bachelor's degree and no work experience at all  is about $60,000.  It makes absolutely no sense to forgo two working years (opportunity cost $120K if you're earning that entry level compensation) and incur debt just to have a 51% chance of getting a raise of less than $10K.  The payback period of a USF MBA will extend beyond your expected life span, rendering a negative ROI for your investment.  

If you're considering applying to USF's MBA program, stop that nonsense right now.  Stay in your entry level job.  If you're in the USF MBA program right now, and your family doesn't own a business they want you to inherit, you are wasting your precious time and money.  Read my Yelp reviews of Notre Dame and USF to see how pursuing advanced education among hereditary elites is offensive to their sensibilities and a waste of your own abilities.  

American Legion District 8 in SF is Totally Worthless

The American Legion's District 8 in San Francisco is not worth the time or effort of any productive veteran.  Anyone who tries to get involved here will waste a tremendous amount of energy with no positive result.  The American Legion in San Francisco is too far gone to be responsive to a salvage effort.  I have learned this from personal experience.

District 8 has reinstated a fraudulent post and allowed that post's corrupt leadership to once again assume positions of trust and responsibility.  The District has learned nothing after seeing the good name of veterans dragged through the mud by a Stolen Valor fraud.  Other post commanders have included a convicted felon running an illegal bingo parlor and a renegade attorney who was disbarred in California.

The San Francisco veterans' community seeks to retain use of the War Memorial Veterans Building but cannot even utilize the space they are currently allotted.  The SFWMPAC Board of Trustees is charged with fully utilizing this City-owned space to deliver full value to taxpayers.  I say let the San Francisco Opera and the arts community have the entire building.  They have a solid plan to utilize every square inch of space and can commit money and expertise to fulfill that plan.

Veterans don't deserve the building anymore.  The veterans' presence inside the WMVB is nothing more than a magnet for an endless parade of addicts, vagrants, lunatics, and scam-artist "commanders" whose greatest ambition in life is to rub two government benefit checks together.  Each derelict who stumbles through the front door degrades the veterans' community and the dignity of the building.  The Trust Agreement governing use of the building grants veterans the right to use space but IMHO this commitment can be met with a minimalist allocation.  Veterans can claim a shoebox under the desk of the WMVB's Managing Director, which is all they can productively utilize anyway.  Evicted veterans' organizations can reconvene off-site in a suitable alternate locale, such as the nearest junkyard or toxic waste dump.

District 8 is a waste of everything and then some.

Full disclosure:  I am a veteran.

Blue Sphere (BLSP) Converts Farm Waste Into Nothing So Far

Prepare yourselves for another penny stock.  Trinity Investment Research sent me a mailer touting Blue Sphere (BLSP), some Israeli company that claims to be doing something in carbon credits and bio-waste.  Claims of launching projects all over the world mean nothing without operational results to back up those claims.

They haven't filed their 10-K for 2011 so it's impossible to tell how well they're doing now.  If the previous three years are any indication, there is plenty of reason to be pessimistic.  Blue Sphere has earned zero revenue since 2008.  Their massive increase in negative retained earnings came entirely from their SGA expenses.  It is unusual for a company with a claimed orientation in a high-tech sector to have such high SGA expenses while spending nothing on R&D.

It makes no sense for a bio-waste conversion startup to pursue small-scale waste sources on farms and landfills in emerging markets.  That's why Blue Sphere's approach isn't scalable.  Large-scale thermal depolymerization plants at big agribusiness installations would work.  This small-scale stuff Blue Sphere is doing is uneconomical.  They announce "discussions" with major farms in the U.S. but have no announcements of firm contracts to operate waste conversion plants.

This turkey traded at a whopping high of $0.90/share on Jan. 21, 2011 and is now at a nickel.  People who bought this stock then have seen their investment destroyed.  This is fitting for a company focused on biological waste.  I could make a joke here but Google probably wouldn't like it.  I watch out for my brand.  That's the difference between Alfidi Capital and Trinity Investment Research.

Full disclosure:  No position in BLSP, ever.

Clicker (CLKZ) Is At Zero

Let's pick on Shawn Ambrosino's M3 Profit Accelerator again.  He likes to send me mailers for so-called hot stocks that have done very poorly of late for investors.  One mailer he sent me touted Clicker (CLKZ) for its ownership of multiple advertising domains that were just poised to take off for the moon.  It's too bad this stock is in the basement.

Clicker traded at $0.00 today.  That's right.  You read that correctly.  I've never in my life seen a stock that traded at zero value.  The header on its corporate web page is hilarious: "Where one plus one equals . . . "  This is the first company I've ever seen that proves a mathematical impossibility, that "one plus one" can equal zero. 

I can't resist checking out management.  CEO Lloyd Lapidus has a pretty sparse LinkedIn profile (assuming that's him) for a guy who's supposedly a serial entrepreneur.  Maybe he can point me to his correct profile, or flesh this one out some more.  His previous claim to fame, an online shopping portal for handbags called Bag Borrow or Steal (a.k.a. Avelle Inc.), has a confusing business model.  Do they make money by renting designer handbags (seriously?) or by getting affiliates to place ordering widgets on their sites and blogs?  I don't get it. 

What I do get is that Clicker has traded at zero (despite millions in trade volume on some days!) since this summer.  It enjoyed a brief run up to over a buck in August 2010 and then spiralled down hard.  Revenue declined the last three years while annual losses got worse.  Retained earnings is massively negative. 

As far as I can tell, the company's business model has something to do with buying domain names with zero traffic and a tangential relation to online advertising.  That is suicidal in the face of competition from Google and Craigslist.  The stock is at zero because the business model adds up to zero.  Anyone who bought stock in Clicker when Shawn Ambrosino's tout mailing came out has now lost everything they invested. 

Full disclosure:  No position in CLKZ, ever. 

Giant Step Backwards Looms For Education

Here's further proof that mainstream journalism is incapable of performing even halfway decent analysis of national problems.  The Associated Press eagerly awaits education "reform" that will turn back the clock:

American parents, teachers and students would be left laboring under a burdensome set of testing guidelines and other rules that many agree are pushing standards lower instead of bringing them up.

Ahem, firm standards are precisely what's always been missing from American secondary education.  The opposition of teachers' unions to standards held back progress for decades until No Child Left Behind became law. 

Banalities in this article abound.  Focusing on "teacher performance" is impossible without the so-called onerous standards the article deplores.  "Boosting college graduation rates" is just as meaningless.  American colleges now graduate more bachelor's candidates than ever before in history and yet the ROI of a college degree is nearing zero thanks to federally-encouraged student debt. 

Our country's educational system needs a reset.  On that score, I agree with the critics of No Child Left Behind.  Unfortunately the educational establishment wants more of the same:  more money, more teachers, more student loans.  All of that will lead to more failure.  The real solution is to close schools, fire teachers, eliminate federal student aid, reorient most college students toward trade schools, and let the Internet deliver open courseware for free to anyone with a modicum of curiosity. 

Most Law Schools Are Worthless

Now it's official.  The vast majority of law degrees are no more valuable in the marketplace than the paper used to print their transcripts.  That puts most law school graduates in the same category as most MBA graduates.  The entire article is a great read.  It details one of the last bubbles left to pop in the Ponzi-laden economy of America. 

The obvious lesson is that most law school aspirants should not change careers.  Federal student loans, in a misguided attempt at promoting meritocracy, have enticed large numbers of people to surrender their prospects for a comfortable middle class existence in exchange for debt peonage.  Come to think of it, perhaps that was the plan all along.  There's only so much room at the top and the ruling class doesn't like being crowded out.

The Haiku of Finance for 06/29/10

Lazy union slob
Want to make some more money?
Quit whining and WORK!

Labor's Losers Cause Trouble In Logistics

If there's one thing you can count on hearing from union laborers, it's a never-ending stream of demands to be coddled and lionized.  That old saw is appropriate after a quick scan of today's logistics-related headlines. 

Here we have those greedy, corrupt Teamsters preparing to demand reinstatement of YRC Worldwide's pension contributions that they so wisely surrendered last year:

The Teamsters union will hold a national conference call Tuesday for its members at YRC Worldwide on the company's "re-entry" into its multiemployer pension plans. 

How and when the nation's largest trucker re-enters those plans is a critical issue for YRC as it struggles with rising operating costs and falling liquidity.

YRCW's position ought to be clear:  No reinstatements until we're clearly and sustainably (IMHO minimum three quarters) profitable, got it Teamsters?  Clueless union leaders need to wake up and realize that YRCW's avoidance of funding those pensions (along with its potential 3PL ventures) may be one of the few things keeping it out of bankruptcy.  Drivers ought to be grateful they have any jobs at all in this economy without pining for a return to the salad days of yesteryear.  If unions don't like their meager pensions and salaries, well that's just too darn bad.  I'm sure plenty of illegal immigrants would love to drive their trucks for $5 an hour under the table while they save money by living ten to a room.  Sheesh.  I have zero sympathy for these union knuckleheads. 

If that isn't enough to get me riled up, check out this dandy.  Office clerks at ports want to renew their cushy labor contracts:

The contract covering about 950 office clerical workers at the ports of Los Angeles and Long Beach expires at midnight Wednesday, and it does not appear that an agreement will be reached by the deadline.
(snip)

Office clerical workers process bookings and other documentation at marine terminals in the port complex. The OCU is affiliated with ILWU Local 63, the marine clerks division, but office clerical workers have a separate contract.

Check out how much these glorified interns make in the above article:  $80,000 per year!  That's outrageously high.  Are unions playing some kind of sick joke on businesses by demanding more pay than their skills deserve?  It is unconscionable to this writer that office clerks, secretaries, administrative assistants, coffee fetchers, and other minimally skilled drones in dead-end jobs make twice what an entry-level college graduate makes.  The Pacific Maritime Association's position ought to be clear:  If you have an entry-level skill set, you get to collect an entry-level wage.  I'll bet the PMA could find hundreds of underemployed UCLA and USC grads who'd be happy to make half what these unionized jerks make for the same menial work, so they won't have any trouble at all breaking a strike.  Go ahead and break it! 

I for one am sick and tired of reading about workers with entry-level skill sets demanding middle-class wages.  Truck drivers and secretaries simply do not add as much economic or social value as accountants or engineers, but they unfortunately think so thanks to many decades of indulgence by an entitlement culture.  These mouth-breathing slobs need to get over their greed and materialism.  They should realize that global labor arbitrage is quickly revealing the true worth of their services.  Wages in low-skill jobs are being arbitraged down and no amount of trade protectionism or union obstructionism is going to stop it. 

CEOs of the world, unite!  We have nothing to lose but that chain around our earnings known as "unionized labor."

Full disclosure:  Anthony J. Alfidi, our glorious CEO, has thankfully never belonged to a union because he has far more important ways of making a meaningful contribution to civilization. 

A Primer On Financial Career Archetypes

Careers in finance are fun and rewarding. If you want to win you have to arrive prepared and ready to roll. The specific type of job doesn't matter. You can be a banker, broker, analyst, manager, whatever, but in general you need to have "what it takes." Let's discuss the most common types of employee you'll find nowadays on Wall Street.

Here are three main types of people drawn to careers in financial services.
Type 1: The Angel. The conscientious, hardworking, intelligent person who insists on taking care of the client and delivering the highest quality service. This person is scrupulously honest and insists on strict adherence to laws, regulations, and the highest standards of ethical behavior.
Type 2: The Predator. The lying, thieving, conniving, backstabbing, manipulative, egotistical jerk. This person would sell their own mother down the river for a fast buck and epitomizes the "I'll be gone, you'll be gone" (IBG/YBG) absence of concern for the long-term effects of their actions on the health of clients and the industry.
Type 3: The Preppie. The spoiled, airheaded, condescending trust-fund baby who had their high six-figure first job handed to them after sleeping their way through four years in the Ivy League. This person is amused at anyone who has to work hard for a living as such things are so declasse for someone at their level.

Now that we've identified the three types of people you're most likely to meet in your Wall Street career, let's discuss their typical career paths.

Angels are immediately identified for eventual termination. They are given plenty of grunt work to keep them busy, the results of which will always be claimed by the other two types. They are widely viewed as weak and unfit for employment in finance, and will never earn anyone's respect with the way they do their jobs. Their honesty and devotion to detail quickly prove to be career liabilities because they pose a threat to the chicanery of their managers.

Predators are initially successful based on their ability to lie, bluff, and bully their way around clients and the office. The more successful ones will ally with a Preppie to network their way up the ladder and gang up on Angels for fun. They predominate in sales but can also be found in management if they can ride the coattails of a well-regarded Preppie. They earn the respect of others by abusing and firing Angels and by outmaneuvering other Predators.

Preppies are the most successful of the three archetypes. Their extensive family connections will steer huge amounts of business to their employer as a matter of course, with little to no effort necessary. They show up late to meetings and vacation for months at a time because they know there will be plenty of Angels back at the office to do their work for them as long a few Predators are left behind to yell at them. It's okay if they fall asleep on the job because they always have an Angel at hand to take notes for them and explain what they missed. Preppies intermarry primarily with each other to extend their bloodlines, but sometimes the more adventurous among them will deign to marry a genetically healthy Predator (based on looks and personality). They usually rise to the top on the back of work done by Angels and Predators. Preppies are the star performers of Wall Street and darlings of the social scene in major metropolitan areas.

If you are a Preppie, you don't need to read my blog. All of your career insights will come from family members. If you are a Predator, you'll probably read my blog just to claim my ideas as your own so you can score a promotion (go to hell, jackass). If you're an Angel, for Pete's sake don't spend longer than a year or two working for Predators and Preppies. Start your own business and outperform them in life.

Day Traders Never Learn

Some people just shouldn't be allowed to invest their own money. Day traders are playing games with Phoney and Fraudie:

Shares of U.S. government-controlled mortgage lenders Fannie Mae and Freddie Mac soared for a second straight day on Tuesday after attracting the attention of day-traders looking to turn a quick profit with these low-priced household names.

Attention idiots: These two stocks are worthless. Worthless. They have no assets and lost billions of dollars last quarter.

Too many otherwise productive adults are willing to bet their hard-earned money on stocks that don't deserve to exist.

Nota bene: Anthony J. Alfidi has no position in FNM or FRE.

Voices and Deaf Ears, Part 2 on Our Road to Serfdom

A few days ago I mused that i-bankers and others at the top of our society aren't really being forced to change their rapacious ways. Today's selections offer us insights on why this is so.

The Atlantic, one of the oldest Anglo-American journals of record, serves up an indictment of America's descent into Third World status:

In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets): South Korea (1997), Malaysia (1998), Russia and Argentina (time and again). In each of those cases, global investors, afraid that the country or its financial sector wouldn’t be able to pay off mountainous debt, suddenly stopped lending.
(snip)

But there’s a deeper and more disturbing similarity: elite business interests — financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.

The Atlantic's only real rival for the title of most intellectual publication in America is Harper's (and it's just as old!), whose editor emeritus Lewis Lapham has always held a rather jaundiced view of his peers in the ruling elite. His florid prose is always a joy to read (excerpted from Money and Class in America, 1988):

By abdicating their authority and responsibility, the sovereign people also relinquish their courage. Like rich old women in Palm Beach or a committee of dithering lawyers, the American electorate listens to the wisdom of its public servants as if to voices of minor oracles. Politicians and Cabinet ministers appear in the role of of the omniscient butler who finds phrases of art with which to conceal the embarrassments of the young master’s profligacy and reduced circumstances.

Finally, Rolling Stone offers us this colorful portrait of our dire straits as a result of the above:

People are pissed off about this financial crisis, and about this bailout, but they're not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.

The authors all recognize that neofeudalism is here. I've seen it coming too, probably since my days at Notre Dame when I first encountered the children of one wing (the hard-right, hypermoralistic, hypocritical Catholic wing) of our ruling class. I have spent my adult life aspiring to join the ranks of America's patricians only to find that, in the main, they won't have me among them. No matter. The turmoil now brewing will allow me and others like me to simply displace them with new wealth, like the Darwinian process that allows mutated species to survive ecological catastrophes.

There were numerous warning signs on our national road to economic annihilation. Many of my fellow Americans seem to have mistaken them for billboard advertisements. I read every sign up close, took notes, and marked their locations. I will wait patiently for the day when I will sign the deed on a San Francisco mansion. Quite a few will be vacated by people who couldn't be bothered to pay attention.

Welcome, neofeudalism. Let the jousting matches for fiefdoms begin.

Somebody Doesn't Understand Lending

This MSNBC article is a gem.

But the government may also end up paying nothing at all, largely because it received collateral in return for backing much of these debts and could recoup some money if borrowers stop making their interest payments.

And how exactly is that going to happen?! If you hold collateral, and your debtor stops making payments, then your collateral just became worth a whole lot less. You recoup no money whatsoever. Jeez louise. I didn't even have to use my MBA to figure that one out.

The article's author isn't the only one having trouble understanding what a "loss" means.

That forced him to reluctantly accept a major Democratic proposal that authorized FHA to spend up to $300 billion to help homeowners who, because of falling prices, owe more than their homes are worth. The expected cost to taxpayers of this program is $1.7 billion, the Congressional Budget Office said.

Wow. Apparently the FHA's potential spending of $300B that it doesn't have on homeowners who can't pay it back has no bearing on the cost estimate of "only" $1.7B.

The preceding non-logic is par for the course and shows us all why we are in such a mess. The lack of competence of journalists and government budget officials spills over to a mis-informed public unable to comprehend problems.