Take My Bank...Please

There has been much discussion over the past few days about the possibility that the U.S. government will attempt to nationalize (i.e. take over) troubled banking giants, such as Citigroup and Bank of America. The possibility of a nationalization has resulted in a significant decline in the price of these banks' shares, as such a move would presumably result in the banks' common shareholders being wiped out. Shareholders and free market proponents alike have raised their voices in shrill protest against the idea.

As for me, despite my belief in the free market and my natural abhorrence of anything that even smells of regulation, I actually think that we should nationalize some of these banks.

Think of it this way. Why should the taxpayers - that's you and I - pour billions of dollars into these institutions, which would otherwise fail (at least that's what they're telling us), and not even end up owning the entities?

Instead, we're handing out billions of dollars to these banks, leaving management and the shareholder base intact, and we don't even have a majority ownership interest.

How does that make any sense?

Bear in mind that these institutions are essentially insolvent. I understand that the government feels that it would be catastrophic to have these institutions go bankrupt, but we should at least deal with them as though they are actually in bankruptcy. Specifically, the shareholder base should be wiped out, and the entity that is providing future funding (in this case, the government) ends up as the owner. Why is the current shareholder base being treated any differently from the way we treat shareholders of any insolvent company?

There remains, of course, the cultural aspect of nationalization. More so than in any other developed nation, the United States has clung to the mantra of private ownership of financial and industrial companies. In other countries, Great Britain for example, where major companies were not too long ago owned either in part or entirely by the government, nationalization of the banks doesn't carry the same negative association. Here in the U.S., our long history of private institutional ownership - a good thing in "normal" times - might be serving as an impediment to doing the right thing in the current crisis.

However, a nationalization need not be permanent. I believe that the government should privatize the banks that appear set to fail, and manage them until they are ready to be sold back to the public.

However, for its part, the government doesn't appear to be in favor of nationalization. Federal Reserve Chairman Ben Bernanke stated that while he expects that the government will own increasingly larger stakes in troubled banks like Citigroup, he's against the idea of an outright nationalization, which would be, in his words "disruptive to the markets."

Disruptive to the markets?!

Hey Dr. Bernanke, I hate to break it to you, but I think that we've already experienced just a wee bit of a market disruption. What exactly is going to happen if the government seizes these banks, wiping out the shareholders in the process? Are people going to be even more reluctant to own stock? Is that even possible at this point?

Another myth that people toss around is that nationalizing some banks - thereby allowing for real control over executive compensation - will drive all of the talented managers away, leaving a huge talent vacuum.

(I'll pause now to let our readers L their respective A's O, in texting parlance).

As a special service to our readers, I'll let you in on a little secret:

Any idiot can run a bank.

(I was going to say "even a monkey could run a bank," but I was afraid that I'd be branded a racist for saying so, even if my comment wasn't accompanied by a cartoon. Perhaps such a comment would've outraged the Reverend Al Sharpton to the point where he'd go on a hunger strike until this blog was shut down. Considering that several economists have estimated that a prolonged hunger strike by the Reverend Al would single-handedly shave about half a point off of the United States' GDP, this is a risk that we just couldn't take in the current recessionary period).

As yet another added service to our readers (is this the greatest blog, or what?), I will now present "MBB's Quick N' Easy Guide to Running a Bank," featuring a simple, step-by-step set of instructions.

(1) Obtain a phone book from a town with a demographic makeup that is at least 80% white.
(2) Record the 20 most popular surnames.
(3) Put 10 of those names in one column (Column A), and 10 in another column (Column B)
(4) Pick a name from Column A. This will be your first name.
(5) Pick a name from Column B. This will be your last name.
(6) For some added "garnish," add a random middle initial, and a numbered suffix, such as III or IV.
(7) Raise capital by taking deposits from customers and paying them a certain rate of interest.
(8) Take the capital you've raised and lend it to other customers at a rate that is somewhat higher than the rate referred to in #7 above.
(9) To reduce the risk of excessive write-offs due to bad loans, perform some perfunctory eligibility screening. For example, in order to get a loan, the applicant must be able to tell you how many dimes are in a dollar. That should do the trick.
(10) Play golf.
(11) Drink scotch.

Now, I know what you're thinking. How will I manage to run a bank under an assumed name? What about the state bank regulators and the SEC? Well, let me assure you, Mr. Williamson P. Coopersmith, III, there's nothing to fear. Here's what you do when the regulators come to your office.

(1) In order to break the ice, talk about your golf game. Complain about how you've been slicing your tee shots lately.
(2) Show the regulator a picture of his backside.
(3) Show the regulator a picture of a hole in the ground.
(4) Take the pictures back, mix them up, show them to him again, and ask him to tell you which one is which.
(5) He will promptly leave your office, after offering a polite goodbye. Within three business days, you will receive a letter from the state banking regulatory authority, stating that they've received your information request, and that they will need approximately six months to "formulate a proper, written response to your inquiry." This will give you time to plot your next move. I'd recommend choosing yet another name.

Considering this, I don't see a terrible downside to temporarily nationalizing these troubled banks. If the taxpayers are going to keep them afloat, we should also have executive power.

It's something I never thought I'd ever say, but I never thought our banking system would get into its current predicament, either.

It's time to nationalize the banks.

Glove, Bat, Ball, Needle

There've been a few articles over the last few days talking about how various athletes were cheated out of MVP awards when they were given to other athletes who we now know used steroids. Huh?

I do not understand how anyone can be certain that those who DIDN'T win the award were clean the year they were robbed. (Or as the NY POST put it in their inimitable fashion: A-Robbed). Actually there is a way for us to be certain, at least for the time period in question. Release the names of the remaining 103 players who are on the list of men who tested positive for steroid use. Why should Alex Rodriguez take all the heat, as others who may be just as culpable are paraded around as victims? This annoys me greatly.

I would also like to see every sports talk guy and every sports reporter give a very loud and clear apology to Jose Canseco who named every one of the men who have either admitted or been plausibly accused of steroid use. At the time, Canseco was derided, accused of being a liar and a charlatan, and everyone said there was no way Palimero or A-Rod used steroids. The problem is that baseball takes itself so seriously because of its HISTORY! that it decided (with its idiot commissioner who is also an owner and has done as much as possible to enrich himself and his buddies at the expense of the fans)that a guy like Canseco could not possibly be right or in anyway represent the game.

Hmmm.

Only six more months til mini camp.

It Sure Ain't Karma

A month ago I wrote about my adventures with my coffee machine. At the time I subtly wondered if the gift that I loved so much, and had brought me so much joy and warm feelings towards my darling husband, had been tampered with by MBB in retaliation for his being off caffeine at my insistence.

Of course it's a theory I never fully believed, because really, why would he want to sabotage the GREATEST GIFT EVER!!!! Though, that's not the only reason I know it can't have been him.

THE FLOODGATES HAVE OPENED.


Anyone notice that there hasn't been a "no-caffeine" blog in awhile? Well, even though he made it through a deposition with FREE soda that he did not partake of because it was caffeinated, a recent trip to Houston put him over the edge. Texas, hmph. Just another thing we can blame George Bush for!

Since that time he has had at least some caffeine everyday, but to be fair it's like a smoker going from 3 packs a day down to 3 cigarettes, so I do give him credit for that. I knew he wouldn't get back on the wagon after that trip, but at least it's fairly moderate consumption. I had visions of him in a rumpled shirt (gasp!) and ear muffs (double gasp!!) pacing the sidewalk in front of 7-11 just waiting to suck the last droplets of soda out of discarded Big Gulp straws.

The weird part is while he was off caffeine I think I had some every day, which is not a usual occurrence for me. However, these last few weeks I think I may have had one cup ( and a very delicious cup of Green Mountain Golden French Toast flavored coffee, limited edition....hurry).

Imagine my dismay Monday morning when THE PROBLEM returned. MBB was "ON" caffeine at the time so he's off the hook. The brewer wouldn't brew. I kept trying, but to no avail. I called Keurig, stayed on hold for 30 minutes, until someone came back on and told me they'd have to get back to me. That was fine. This morning I went to a class, and they have a Keurig there. I brought my cup/cover/k-cup/splenda packets and hoped that it would be working. I had my delicious cup of coffee and I was happy. Until 3 o'clock today when I realized I wanted a nice hot drink and hadn't heard from anyone. I had to call back. 7-11 coffee is excellent, but I like having my own available on my counter.

Having looked up this problem on various message boards, I was pretty sure that the most they would do is offer me a new brewer at a discounted price. I declined, since I had recently received a gift card from Bed Bath and Beyond and I had a 20% off coupon which made the price of the brewer $20 less than the discount they were offering me at Keurig. Plus I didn't have to wait for them to ship it to me.

Guess who went to get me a new brewer? Yup. Mr. Wonderful himself. SIIIIGH.

Now I have my new brewer which is a little slimmer, but also a little noisier on the counter.

But I'm happy.

Glad She's Not My Wife

As I was browsing the web today, I came across a story about a YOUTUBE video that has become a huge hit. It's a story about a woman who freaked out when she missed her flight from Hong Kong to San Francisco. Freaked out is being kind. Very kind.

Anyway, I found an interesting article about this story linked from FOX NEWS. This story came from an Australian newspaper, and gave some background as to what had occurred to cause the meltdown. Basically, she shopped too much, got to the gate at the scheduled departure time (funny, she doesn't look Jewish), and was denied boarding since the doors were closed. They removed the luggage from the plane, and there was no way she was getting on. She did eventually get on a plane a few hours later, and I'm sure in the next few days we will hear more details, but until that time we can be as judgmental as possible.

Mainly, I was struck by something in the article.

The next flight took off just a few hours later, although the woman appeared not to be aware at the time of her emotional outburst that she would only face a delay of hours.

Whoa. Who hasn't done this? Of course I don't mean flail and scream on the floor of the airport bouncing around like a lunatic. No, I mean just completely overreact to a situation when the adrenaline starts pumping.

Don't know about the rest of you, but man, I hope this helps me take a step back.

Recording devices are everywhere!

Superdog or Scandalmutt?

Yesterday, at the Westminster Kennel Dog Show in New York, the coveted Best in Show award was won by a 10 year old Sussex spaniel named Stump.

This is huge news. Stump became the oldest dog ever to win Best in Show at Westminster. As Lorne Green would say, "He's 10 years old. That's 70 to you and me."

Stump's feat is amazing. Imagine a 70 year old woman winning the Miss America pageant. Okay, maybe that's overdoing it a bit. Still, it's quite an impressive feat.

Unfortunately, we live in cynical times. So, instead of celebrating Stump's unlikely victory, I find myself wondering:


Has this dog been taking performance-enhancing drugs (PEDs)?


Think about it. This dog is performing at a peak level at an age when most dogs have long since retired. He managed to win Best in Show after being off the competitive show circuit for about four years (that's 28 years to you and me).

Allegations of steroid use in the dog community are not a recent phenomenon. Several years ago, in a tell-all memoir that the canine establishment succesfully kept off the market, well-known party dog Marmaduke vividly described his own drug use, including steroid use. Marmaduke also implicated some of his colleagues. For example, he recalls several occasions when he and Scooby Doo injected each other with steroids. After one such injection, Scooby Doo flew into a " 'roid rage" so severe that he trashed the inside of the Magic Mystery Van.

Still, the possibility that a show dog had used steroids would be big news. Everyone knew that Marmaduke was completely out of control, and that drugs of all types were behind his behavior. Considering how much time Scooby Doo spent hanging out with Shaggy (aka King Stoner), it would have been shocking to learn that he hadn't used drugs. And, we all know that Clifford didn't get to be so big just by working out.

On the other hand, if Stump was juicing, it would mean that the use of steroids in the dog world is much more widespread than we had originally known.

This clearly calls for a congressional hearing. At a minimum, there should be a provision in the economic stimulus bill which sets aside funds to investigate canine steroid use (I'd say that $40 billion should do the trick). Unless, of course, it's already in the bill.

When the hearings take place, I wonder which tactics Stump will employ.

Will he refuse to "talk about the past," like Mark McGwire?

Will he claim that he doesn't speak English, a la Sammy Sosa?

Although any discovery that Stump used performance-enhancing drugs will tarnish his legacy, at least he's got plenty of company.

And, unlike Alex Rodriguez, at least he's actually won a championship.

Mid Winter Break

Things have been busy here at Chez BlogBerg. The kids have off from school for what amounts to a long weekend (they go back tomorrow), and we actual made plans. Thursday night we drove down to visit family in Baltimore. Baltimore???? Well, it holds a special place for us since MBB and I lived there for two years when we were first married. I really don't know how long I would have lasted down there without my cousins who we went to spend this weekend with. Seriously, she was a rock for me back then, and I will always be indebted to her (and her hubby). But I digress.

As we were packing up the car I explained to the five year old and the eight year old that bathrooms on the turnpike can be few and far between. Well, maybe not few, but certainly you can drive 15 minutes without access to a bathroom. Normally not a problem, but when you're five and you gottta go...So I told them that they need to let me know before they're desperate. The five year old pondered this for a moment and informed me that "well, we could go in the bushes." I informed her that it is both very cold and very dark and snowy on the side of the road, and that it wouldn't be safe to stop for that purpose. She didn't miss a beat as she responded "We could take a bag in the car!!!"

We actually did not need to stop either leg of the trip, which was great, and greatly unexpected.

We went to science museum at the inner harbor on Friday which is a really great science museum, and the kids had a super time. Of the science museums we've been to, nothing has topped The Franklin Institute in Philadelphia, but this one was really good and we were able to get a wheel chair for Hoppity.

Sunday, we came home in the early afternoon, and had a nice quiet afternoon, follwed by a lazy morning on Monday. Hoppity and the baby went to Grandma, and the rest of us went ice skating for a little over an hour. It was surprisingly empty considering the number of schools in town that have off, but it's hard to compete with $9 tickets to Florida.

Today we went to The Museum of The City of New York. The girls had a good time, but acknowledged that "older people" probably like it better. Though they did enjoy the Doll House exhibits, the Interior rooms from old New York exhibit, and much to my chagrin the "Greening of NY" exhibit. There was a great video presentation of the history of NYC, and the Eudora Welty photographs were really wonderful, though I'm partial to that sort of thing.

So a good time was had by all, and tomorrow they go back to school.

I'll miss them.

The Mother of All Stimulus Packages

As Congress and the President continue to work on economic stimulus measures, with the stated goal of having something signed by the middle of this month, I'd like to weigh in with some thoughts on the package, as it currently stands.

(1) As of now, the economic stimulus package carries a total price tag of about $900 billion. I find this to be terribly disappointing. Do our elected representatives mean to tell us that our nation is undeserving of a $1 trillion + package? At the current size, this thing isn't even a "package." It's more like a large envelope.

This is nothing short of an insult. How about offering to buy everyone in the country lunch on every other Wednesday? That should do the trick.

If I were President Obama, I'd have told Congress, "Don't even think about cluttering my desk with a bill that's got fewer than 12 zeroes in it."

C'mon, people, let's shoot for the "Thrill of the Trill." We're still a superpower, aren't we?

Can we deliver a $1 trillion + economic stimulus package? Repeat after me, people:

Yes, we can!

(2) A proposal has been made to subsidize future mortgages by capping the rate at 4.0%, regardless of where the market rate is at that time. While radical, and completely devoid of any economic rationale, that plan does not go far enough, in my opinion. After all, we've been led to believe that the housing crisis must be solved, at any cost. I recommend that the government buy every single one of the millions of new and existing homes that are currently for sale, then give them out via a huge lottery.

(3) If we don't do something soon about the environment, the planet and its inhabitants will cease to exist. However, action is not enough. We need to "think green" and "look green." Towards that end, I recommend a government subsidy on all green-colored clothing items.

(4) There needs to be a provision in this bill which forbids the use of the term "economic stimulus package" in advertising, or for other, generally corny purposes.

For example, the following should be illegal:

"Now, for a limited time, buy one Taco Bell double beef cheesy burrito for $0.99, and get a second one for free! How's that for an economic stimulus package?"

This insidious lack of creativity has already started to creep into the vernacular. It must be stopped before it spreads. The responsible parties are the same people who ended up lining Saddam Hussein's pockets with millions of dollars in royalty payments every time they referred to "the mother of all furniture sales."

(5) Of course, no lasting change can come about if we don't do something about our educational system. Specifically, I think that we need to reduce the overall level of education in our country. Think about it. Thousands of people obtained advanced degrees (MBAs, PhDs), then went to work on Wall Street, where they built incredibly complex financial models, which informed us that we could create, develop, market and invest in all sorts of exotic securities with almost no risk whatsoever. We all know how that one turned out.

As an added service to our loyal readership, here's some advice on what to do if you encounter such an individual at a cocktail party, and he informs you that he's not just a "spreadsheet jockey," he's an "empiricist." Please follow these steps closely.

1. Stare blankly at him for two seconds.
2. Distract him for a moment by pretending to look at something behind him.
3. Kick him as hard as you can between his legs.
4. While he's writhing in pain on the ground, say something snappy like, "Bet your model didn't predict that outcome."
5. Do not, I repeat, DO NOT say anything involving the words "economic," "stimulus" or "package," no matter how tempted you are to do so.

Remember, that's now illegal.

No Taxation Without a Pending Confirmation

While I have been a Republican for my entire life, I've found that my views on certain issues have moderated somewhat. I'm most definitely right-of-center, but probably to the left of people like Rush Limbaugh and Pat Buchanan.

On fiscal issues, I've definitely remained conservative, particularly when it comes to taxation. Whereas I'm usually able to at least understand - and disagree with - liberal stances on economic issues, I've never been able to understand why Democrats always seem to be in favor of higher taxes.

Over the years, I've searched for the answer, but have never found a satisfactory explanation.

Could it be that they need tax increases to fund their government spending proposals? I suppose so. However, Republican administrations, particularly the most recent one, have not shied away from spending, yet they prefer to cut taxes, even if it leads to deficits.

Perhaps Democrats like raising taxes as a form of class warfare against the rich. While that would explain a lot, and certainly seems to motivate a certain fringe of the party, I just don't think that it's a driver for most mainstream Democrats.

As you can see, for some time now, I've been at a loss when it comes to understanding why Democrats favor raising taxes, even in the face of so much overwhelming empirical (not just anecdotal) evidence that doing so actually harms the economy.

I had pretty much resigned myself to filing this in the category of "the world's greatest mysteries."

However, just when it appeared that I'd never have my answer, President Obama and his friends, like Tom Daschle and Timothy Geithner, have made things crystal clear for me:


Democrats don't mind raising taxes because...


...they don't pay them anyway.


Mystery solved.

Martha Graham She Ain't

We had a little excitement over the weekend. On Friday at about 3:30 (really, when else do these things happen???)the 11 year old was dancing around her room as she got ready to get into the shower, and came down funny on her foot. The howling that ensued could have woken not only the proverbial dead, but those who had been cremated as well. And scattered. Into the ocean.

OK, so now we have to deal with the issue. Two phones, two calls. Cell phone to brother-in-law pediatrician, house phone to brother emt. The doc was very calming and after many questions determined that there was no need to run at that late hour to the ER, and that it could wait til Saturday night if she was still in pain and could not/did not bare weight on it. EMT came over to check it out, and was also calm and collected making the patient and parents feel good.

Saturday was spent on the couch catching up with Harry Potter, and by Saturday evening her foot was hurting enough that with the blessing of BIL Doc, we went to the local pediatric urgent care. It's a very good alternative to the emergency room, the people are less skeevy, and you don't wait as long. The receptionist at our regular pediatrician's office works there on some weekends, so when you walk into a health care facility that has no appointments, and the doctors/nurses/PAs don't know you at all, it's nice to see a familiar face at the desk. It makes the whole experience less out of the ordinary.

The PA checked her foot, and then took her in for an x-ray where both she and the doctor determined there was a small fracture of the 5th proximal metatarsal. I, of course, saw nothing, but they said I should follow up with an orthopedist, and then splinted her foot and sent us out into the night.

I looked at that x-ray 50 times, and with all my extensive radiology and orthopedic knowledge I could not see any thing. But, what do I know?




Monday morning I called the orthopedist at 9 on the nose, and was told there were no appointments available, but I should come in and they'd fit me in. The earlier the better, they said. The baby bundled and trundled off to Grandma for the morning, we made the 18 minute trip to the bone doctor. Which, despite conjouring images of a guy with no shirt, a flimsy piece of cloth tied on with string around his waist and a big ring through his nose, the fellow is quite respectable.

The wait was shorter than certain offices when I have an actual appointment time, and after a series of x-rays on BOTH feet, the orthopedist determined...... that there was no break, just a bad sprain. Hmmm. A sad little girl. Though she perked up when he said she should wear a podiatry shoe, and use crutches for the next few days. Now when she would go back to school she'd have something to show for it!

We bought the shoe, we rented crutches, and then went to the dermatologist for an appointment that was made before the dance revolution. As she hobbled in there, the nurse looked at her and said "what happened to you? Cuz we don't do that here."

I hope she feels better soon, no one wants to be on crutches during school break, which is coming up at the end of this week.

So dance on my young ladies, if you feel that's what you'd like to do. Just try to stick the landing better next time.

Stumbling Out of the Gate

While it's still far too early to tell, 2009 is not exactly shaping up as a rebound year for stocks. The recently completed month of January witnessed declines in the Dow and the S&P 500 of 8.8% and 8.6%, respectively. That performance makes January 2009 the worst January for stocks on record.

Right now, some of our readers are probably thinking, "One bad month does not an entire year make." (I'm speaking specifically about any reader who happens to be a Confucian scholar. Or writes fortune cookies for a living.) They are correct. However, based upon historical data going back to 1950, a bad January tends to bode ill for the rest of the year.

According to Ned Davis research, when the S&P declines in January, the index loses an average of 2.4% in the next 11 months. When the S&P climbs in January, the index posts an average gain of 12.3% in the next period.

Despite all of this, I can't help but shake the feeling that we're nearing a bottom, valuation-wise. Before I proclaim an outright "buy" signal, I'd like to see the S&P 500 test (and bounce back from) its recent lows, in the 750-775 area. Bear in mind that the market tends to rebound prior to an economic turnaround. Therefore, while it increasingly appears that the recession will extend at least until the end of 2009, we could see a stock market rebound sometime before then. More on that in the near future. Maybe.