Chicken Nuggets

Arianna at HuffPuff: Lot of good news in banking...but the important part to extract and apply outside of banking:

Unlike the big banks, credit unions are not owned by shareholders, who are looking for maximum quarterly profits, but by members, who are looking for stability and service. Since their goal is not to maximize short-term profit, credit unions by and large steered clear of risky subprime loans. As a result, their balance sheets could pass the Geithner stress test just fine.

Critical for a few reasons, 1) to bring into question the legitimacy and/or relevance of the modus operandi of publicly traded companies, 2) in the real estate industry this confirms my opinion to some extent that the scale of individual projects will be much smaller in the architecture and real estate industry based on lending ability of smaller banks (which is good) IF the redevelopment and rebirth of our cities is done as a series of many smaller projects leading to more regionalized, incremental, and if you will, fractal growth. And lastly, 3) how is this idea of long-term interest and cooperation applicable elsewhere?

Here is potentially one answer: Organic, Local Grocery Co-Ops.

Picking Up Steam

...I wonder how long it will take for the rabble to truly be roused and force some change. Mish agrees with me that any bank or entity considered "too big to fail" is absolutely too big to exist. Why? Because it means they are SO big that they can manipulate markets and hell, even governments.

That Goldman, Citigroup, and the now defunct Bear Stearns and Lehman, etc, could ever be in a position to front run trades based on analysis they know they are going to publish, and/or to purposely make recommendations to ignite short squeezes or selloffs based on positions they hold is simply wrong.

Citibank to Investors: We Suggest You Bet Against Us

Please consider the following horrendous advice last week by Citigroup. Flashback March 31, 2009 Citibank to Investors: We Suggest You Bet Against Us.

Wow. Into the Mind of the Pirates Raiding Wall Street

Question. What is on the mind of the interviewer?

A. Holy shit! This guy is breaking the effing law and is telling me this on camera. (nope)

B. Holy shit! I'm so stupid that I believe this guy is some sort of genius and I am going to take what he's telling me and try to spend the rest of my career fleecing the world as well, and then I'll be rich and score copious amounts of tail...and nobody would find out even if the economy crashed in the mean time b/c of it. (nope)

C. What the Eff is he saying? I'm just thinking about this weekend's keg party and securing some rohypnol from my frat buddies, brah! (ding ding ding!)




For more...
http://www.dailykos.com/storyonly/2009/3/5/16720/74815/703/705113

The Real Issue with Wall Street (and your 401K)

On HuffPuff, Ann Pettitfor writes about Wall Street holding the U.S. for ransom.

JHK suggests something similar regarding the "too big to fail" myth.

The "ahha" moment I had this weekend whilst walking the mutt on another warm but blustery Downtown Dallas day, was what Wall Street's deeper issue is, beyond the credit default swaps, the ARM loans, greed, etc. All of the companies on the DOW or S&P 500 are huge corporations. They can't physically or economically get any bigger, which is what Wall Street, investors, and your 401K demand, so in turn, they all need to, and are currently shrinking (my publicly traded company included - love those stock options!)

This is the problem with growth. It was touched upon on this week's Bill Maher show with guest Cory Booker. Except that nobody really put 2 and 2 together to realize that there are different types of growth. I have mentioned exhaustively qualitative over quantitative models of growth, but I also touched upon it here:

Let me be the first to say (with thoughts for the other side of this bottoming), that instead of saving dinosaurs, how about we start thinking about saving that money to help startups on the other side of this bottoming that will be smaller, nimble, and more able to meet the needs of the 21st century.

Harvard economist Howard Glaeser echoed my sentiment:

That is how innovation works: small companies competing like crazy and trying out new things. Across cities, there is a strong connection between an abundance of small firms and local growth. The last thing that the government should be doing is propping up big declining firms. Real innovations are far more likely to come from someone’s garage, which is where Chester Carlson came up with the Xerox machine during the Great Depression.

The advantage of Wall Street and Globalization (and I'm one to point out its failings as well) is to deliver capital to companies in need of it for their own growth and economic development for all of us. Nay, this is the POINT.

Instead, it has devolved into a guessing game of who is gonna buy out whom, who will report the best 4Q sales figures, or simply who is the best at hiding their illegal ponzi schemes. Another dinosaur, a construct built entirely to pick the horse that will be standing at the end when only the biggest corporate fish is left. What then? How will our 401K improve at that point?

Well, we're essentially there already. We know that in order to maintain "growth" figures, that these corporations can now only cut costs while trying to provide the same or similar product, which has had disastrous effects on the health of our economies and our physical health.

Wall Street to have a real purpose and contribute to the rebuilding of a real economy is to find a way to deliver the engine of capital that only they can provide to the innovators of the 21st century, the inventors, the biologists, the "green" technicians.

Only then will your 401K begin to shed its sickly sallow look.