28thavenue.net

I start my week reviewing his latest predictions of economic meltdown — and while I’m usually persuaded by his arguments, part of me thinks maybe it won’t be as bad as he’s saying.

Perhaps the most imminent danger is that the financial markets, which have been driving our insane, hollowed-out economy, will soon recognize what’s in store and implode, creating a crisis of capital that will leave us with no ability to make any emergency investments, such as would be required to rebuild the railroad system. The equity markets sure blinked last week when two hedge funds based on phony-baloney collateralized debt obligations tanked. The collateral underlying this load of hallucinated “wealth” is comprised of contracts made by the insolvent for suburban houses worth far less than the value stated on the contracts — with every indication that the real value will keep dropping.

But then, I head over to the Wall Street Journal site, and read this (sub required):

The near-meltdown of two hedge funds at investment bank Bear Stearns Cos. last week underscored — and in some ways aggravated — a growing fear on Wall Street: that hard-to-trade investments may suddenly turn south and set off a broader market downturn.

The Bear Stearns funds, whose investors include wealthy individuals, other hedge funds and some of the firm’s own executives, are part of a recent boom in investment vehicles specializing in illiquid assets, such as exotic securities, highways and timber lands.

Unlike stocks or bonds listed on an exchange, such assets can’t be readily bought or sold. That makes it hard to establish an accurate price for them. Fund managers have broad discretion in attaching a value to these assets, and often don’t reveal many details of their trades.

Bear Stearns’s High-Grade Structured Credit Strategies Fund and High-Grade Structured Credit Strategies Enhanced Leverage Fund ran into trouble when a downturn in parts of the housing market hurt the funds’ bets on complex securities backed by subprime mortgages, or home loans to borrowers with troubled credit histories.

So here’s what’s happening: Just about everyone in the financial markets has put their stock in securities backed by the mortgages of suburbia. The problem is, suburbia’s twilight is upon us. These securities aren’t actually worth as much as everyone thought they would be because the McMansions aren’t actually worth as much as everyone thought they would be. With the price of gasoline marching upward (maybe not week by week, but certainly year by year), houses in far out places are simply less useful than they were with cheap gas — it doesn’t matter how great the greatroom might be.

So, Mr. and Mrs. Jones who bought that beautiful $600k ’stead with their Jumbo loan are not seeing the price rise like they might have hoped. Instead, they’re seeing for sale signs and reading about an unprecedented glut of inventory. They’re wondering if they sell too, whether they can get enough to cover what they owe. They’ll soon wonder whether it was wise to buy a house with rooms they’d never use, miles and miles from the sorts of basic places we all need to use on a daily places — grocery stores, clothing stores, and places to work.

I wonder how Mr. and Mrs. Jones are doing this summer.

Keep your eyes open. When the Wall Street Journal starts sounding like the author of The Long Emergency, things will probably get interesting.

If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you
But make allowance for their doubting too,
If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise:

If you can dream–and not make dreams your master,
If you can think–and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build ‘em up with worn-out tools:

If you can make one heap of all your winnings
And risk it all on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breath a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: “Hold on!”

If you can talk with crowds and keep your virtue,
Or walk with kings–nor lose the common touch,
If neither foes nor loving friends can hurt you;
If all men count with you, but none too much,
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run,
Yours is the Earth and everything that’s in it,
And–which is more–you’ll be a Man, my son!

–Rudyard Kipling

teh shit.

I’m on my new computer at work. It’s a Dell Optiplex 745 with an Intel Core Duo processor (dual core). This thing is sweet.

I’ve installed Ubuntu Linux 7.04 which supports, by default, Compiz. Compiz is a 3D compositing window manager that takes advantage of some of the capabilities of modern video cards. One of those — I can have multiple desktops on different faces of a cube, and switch between them by “rotating” the cube. It’s a really cool effect and makes it possible to really put stuff out of the way in order to focus on just one thing at a time.

I’m waiting for a high end video card to come in on Monday. Then I should be in pig heaven.

This is how compiz looks (not my PC)

If you have 3 years worth of returned checks, bank statements, and other troublesome documents you’d like to destroy, no paper shredder can possibly beat a Weber brand grill and Kingsford lighter fluid.