Harpo spelled backwads is Oprah!

Email sent to Oprah:

Dear Oprah, I wanted to ask for your help in a project that myself and 30+ of my friends are working on. We are developing a leadership conference for our hometown of Fort Collins, CO (voted money magazines' best place to live) that will focus on character and leadership skills in middle school kids. The whole program is based on the idea of 'paying it forward'. It's going to be a big hit and our town is a buzz with anticipation! I wanted to personally ask for your support and see if you too might be able to 'pay it forward' for our campaign. We would be happy to have you as our guest on the program days as I'm sure the kids (and me as well) would love it.
Thanks Oprah, you're the best.
~Jeff


Somber response from Oprah (her staff):

Dear Jeff,
Thank you for your e-mail! Your message is important to us. Unfortunately, due to the volume of e-mail messages we receive every day, we cannot guarantee that you'll receive a personal response. Feel free to check out our Frequently Asked Questions for additional help.
http://www.oprah.com/tows/program/tows_prog_main.jhtml
Thanks again for writing to us!
Sincerely,
The Oprah.com Staff
www.oprah.com

Next Steps:

1) Cross fingers and hope for the best.
2) Find Dr. Phil and hold him for ransom.

March Madness Goes (Sub)Primetime

March madness is in full swing. It's not the Cinderella's that are causing all the commotion however, it's sub-prime lending that's been the sleeper in there opening rounds. Sub-prime loans are financial obligations extended by lenders to borrowers with sub-prime credit worthiness. You can think of them as the 16 seeds of the credit markets. While you might bet some funny money on them, you're not going to blow you whole wad on Jackson State (Go tigers!). They are priced higher, carry steeper interest rates, and often times have an adjustable rate linked to them that can ratchet up over time and generate larger monthly payments. While these products can be a great tool to employ if you are a borrower that has less than ideal credit and understands their risk, they can also be a risky invitation to gamble with your financial stability in the future (especially during periods of rising interest rates). This posting isn't a warning cry to the consumer, to them: caveat emptor (buyer beware). What this posting is, however, is a warning cry to capitalism. The free market we all embrace is in serious jeopardy and the shot clocks' winding down.....

Let's take a magical journey along the path of a sub-prime loan. A borrower (the Smith's) walks into the office of a mortgage broker and requests funds for the purchase of a home. The American dream is financed by using an adjustable rate mortgage (ARM) that has an initial 'teaser' rate that will adjust (rise in the present environment) at a set date in the future. The Smith's are happy and the new home is theirs. The bank (continually looking to hedge their risks and exposure) bundles the Smith's loan with other loans in their portfolio and sells them on the open market. These derivatives come in a variety of shapes and sizes, but all of them are some sort of tranche or strip that carries an expected (guesstimated) return that is tied to the underlying 'packaged' loans. Investors buy these tranches to take advantage of the higher yield and cash flows that are created as the borrowers (the Smith's) pay back the interest with their monthly payments. Now, as we all know there can be no increased return without the acceptance of added risk right?. In lies our problem.....

Our current fixed income environment is such that yields are low and investors are salivating at the opportunity to get increased yield out of their investments. This demand is causing lenders to continue to write more and more of these sub-prime loans. As long as the banks know they can unload these obligations onto investors they will continue to make them. This shifts the risk onto the investor (institutional and individual alike) and away from the banks that are underwriting.....

So, what does all this mean and why has it been such a catalyst for volatility this last week plus? Well, here's why. No one understands or can quantify what the true impact would be to the credit markets and banking system if these defaults (the Smiths stop making their house payments) started to occur. Could it be the small pebble that starts the tsunami? Probably not. But could this situation be an opportunity for the federal government to play hero and bail out this market to avoid any sort of fallout. Yes! And what better move politically than to help out the poor ole Smith's who are having trouble paying their mortgage. It would be a great move for an administration that is tainted at best in the eyes of the blue collar crowd they tend not to notice. It sounds like a great plan right. Absolutely not!

A capital intervention into the markets of this country can be justified in remote circumstances (I'll let history provide the examples). We have to maintain stability and guarantee to a certain degree in our economies markets. This simple reassurance of stability is what separates developed economies from developing ones. We rely on access to credit and we have faith that our banking system will support it by remaining solvent. However, we don't require all investments to work out all the time. If pricing is such that it doesn't reflect the risk, we have to be willing to allow arbitragers to bring the sides together. If through this correction there is some fallout and loss we must bear it. What we can't do is intervene to a degree where people's behavior will rely on this type of life boat in the future. The difference between a charge and a block is a judgement call that can be decided by less than a step at times. Let's do the right thing in this game and leave it a no call......

5 Day Incubator

As a society we often reflect upon our existence by looking through windows of time. Whether it's that week in Cancun during spring break, the 4 (ok, it was 5) years of college, that two hour meeting, or a 9.5 week lust; we find comfort in assigning a time period to an experience. It helps us catalog the experience in our minds, and gives quantitative benchmarks to qualitative experiences.

Exercise A)
Your overly persistent boss 'mentions' that you have a large report due in five days. You quickly reference your library to see just how long that is to determine the magnitude of the assignment. It all happens so fast you may not notice the process.

Part 1: Let's assign some benchmarks from our common experiences to this hypothetical and slow it down so as to examine....

5 days is a traditional work week (40 hours give or take depending on your industry)
5 days is roughly the time it takes to ride a bike across the state of Iowa (100 miles a day)
5 days is exactly the incubation period of an acute flu strain that is plaguing the front range.

Part 2: Let's now evaluate each past experience to determine our feelings and relate them to present.

Work Week: Something that for most of us is no big deal. Just a part of our routine and really doesn't have a huge impact on our emotional psyche.

Bike Ride: While 5 days in the saddle may leave you chaffed and raw it could also be viewed as some r&r. An annual event RAGBRAI leads a group of cyclist across Iowa annually. It's quite the party from what I hear.

Incubation of a Pandemic: Rightfully so this event is terrifying to most. The thought of a parasite festering in one's most inner person is gut wrenching (pun intended). "Will I respond adversely and these be my final moments?" "How did it come to this?" "Who killed Jean Benoit?" These are all questions stewing in my mind at present. A friend of mine...to remain nameless....provided ample opportunity and exposure to this vial strain....as I lull through the remainder of my day this burden has taken hold. I am being forced to leave the office early to try and prevent any sort of infection from taking hold. Medication in the form of a strong martini and some London broil on baguette may be my only escape. Placebo or not it may be all I have (and tasty too!!).....

Lunch time is no time for a scare....

(Note sent to customer service department of hot pockets.)

Hello,

Today when I went to prepare my tasty lean pocket treats for lunch I opened the box of 'whole grain ham and cheese and to my wonderment no crisping sleeves! As you can imagine I searched and scanned the inner most workings of the package to see if perhaps they were hiding. After a complete disassemble of the box it dawned on me that there were no sleeves available. The unthinkable had happened. You can imagine what ran through my head... Can you microwave hot pockets without a crisping sleeve? Will the molten cheese leak from the crevasses of the pouch when warmed? Has this package been tampered with? Who would do such a thing? After some brief reassurance from my colleagues I decided to proceed with warming the pouch. Watching it turn under the rays of the microwave was a somber sight. All alone, no sheath to keep it safe, cheese struggling not to explode from the unprotected folds of the sandwich....It was quite possibly the longest minute and thirty seconds (on high) of my life. While the end result was in fact edible, (and apparently low fat) the process to get to the point of consumption was quite a burden to bear. My heavy heart and full stomach thought you should know...

Sincerely,
Jeff

Edumacation......

Well gang today was a real upliffter in the bio of my life. Spent the first 4 hours of my morning learning how underfunded the state of Colorado is with regards to public education and early childhood development. I guess the panel we were listening to was under the assumption that none of us had picked up a newspaper, turned on a TV, or listened to a radio in the past eon. Presentation after presentation describing the gross underfunding and resource limitations that are oppressing our nations youth and forcing them to a life of garbage removal and sewer maintenance (no offense to any plumbers, without you all I would have no excuse to bend over and have half my ass hang out the top of my pants on a Sunday). Yes, it was the same old story.....

My day didn't start out on such a somber note. No, I actually awoke inspired, fresh, and ready to tackle the world. Another day of our communities leadership program was in store. What I was hoping to hear during our day was how the school system was making cuts, running leaner, touching more lives with less. Instead I discovered the grim reality that the system is in fact broken......

Not such a long time ago I myself was a pupil in the district. I was a seventh grader not much different from most males in my demographic at the time. Headstrong, mischievous, a bit unruly. Today we have fancy medicines that doctors love to over prescribe to handle these 'behavioral nuances', but in my day all we had were passing periods and lunchtime detention (with all my friends) to keep us 'on task'. My most tumultuous semester came at the hands of a teacher (who for this will remain nameless) who really had no business teaching, let alone teaching junior high students, in particular junior high males. She was an English teacher. Typical by all counts. Loved to hear herself talk, prescribed books that were 'classics' and subjectively passed out grades based on the amount of time you spent with your lips on her ass. Well, I never much cared for ass, so needless to say I wasn't one of her 'favorites'....I've got the grade to prove it. Distant memory right? A bad seed in a field of blossoms?

Fast forward to March 07'. Location: Front Range Community College. In walks today's panel guest and who should be leading the charge?....you guessed it. Ms. English herself. She's no longer a teacher however, she's now on the board for the district which helps to dictate policy and direction for the entire district. Instead of hindering development in groups of 30 at a time she now can leverage her inept ability and out of touch attitude 1000 fold and get paid more to do so. She gave a shotty presentation that didn't talk of anything she was actually doing, or capable of doing. No, it was basically a report of other peoples observations and where they see deficiencies. Uplifting to the point where pro-creation seems like a total waste of energy.

So, you want to fix public education? Here's a start. The next time you hear an administrator chanting about underfunding and the detrimental effects it's having on society ask them what they're role is. If they can't give you a straight answer in 6 minutes or less (Ms. English blew 40 minutes of our panel time in which she was allotted 6 minutes. Maybe numbers are a rough thing for her, it's probably a lack of funding) it may be time to call for their resignation. I happen to know a couple of great teachers who could probably use Ms. English's salary to actually touch a life in a way that doesn't involve the instructors ass as a focal point.

Greenspan: Economic Hitman

Welcome to the aftermath. A short week ago at this time our countries favorite doomsayers were hard at work painting a Rembrandt of the market collapse that wasn't. The dow has since recovered and will be very close to making up the ground it lost by the time today's rally is over. What started in China spread like the avian bird flu across the pacific and took hold of investors causing a momentary pandemic. The dow was shedding points faster than the automated systems could keep score....100...200...300....400...when will it end!! Yes, it surely was reported to be the end of this society. 200+ years had passed since the 'buttonwood agreement' had established the NYSE in this country, and it was all collapsing at the hands of monetary tightening in China. Or was it......

Retirement can mean different things to different people...some prefer golf and martinis, others enjoy European travel and exotic cheese, for some its a time to reflect on this world and pass along tales to the future generations, others prefer economic assassination...to each their own right? There's a motto in the mob that 'once you're in, you can never get out'. Well, I think the fed is much the same. Despite the fact he's moved from his leather Herman Miller in the corner office to the lazy-boy on the front porch Greenspan still commands his army with the breath of his words and can instill fear greater than an idle threat of 'cement shoes' and a swim with the fishees in the east river. So you ask, why would he do it? Here's why....

It is no secret at present that the Chinese are manufacturing their economy. There is ample money supply available, exponential growth of speculative inflows of foreign capital, and generous income tax rates on capital gains all have led the country to YOY double digit expansion (Shanghai's leading index doubled in only a short couple of months). Oh, and did I mention they peg their currency? Yes, that seems to be a threat to fairness in the whole import/export game the world plays now doesn't it....Well, the US isn't one to play by someone else's rules. No, no, we must not let that happen. But who can we call? That's right, our ole buddy Al.....

The old saying goes, 'If the US economy sneezes, the rest of the world catches a cold'. Well no one understands this better than Greenspan himself. If the US can 'happen' to slow at an inopportune time (say a time when a country is trying to employ monetary policy of their own to help cool their overheated economy, like China was doing last week) it would pinch off resources and cast an immediate shadow across the global market place. A hint of recession as the product of tightening profit margins is all it took.....the dragon was slayed!!