Twitter update

Once again, your semi-regular update on what's going on over in the Twitterverse (@CrimsonCavalier).

• Very well-articulated open letter to Jamie Dimon (and other clueless bankers who think we resent their "success"): http://bit.ly/vVGL7B
• This is one of the ugliest shoes I've ever seen: http://deadsp.in/uNEaqh I yearn for the days of the Jordan XI http://bit.ly/rTMqsr 
• Fine art outperforms S&P 500: http://buswk.co/uT9lmh More evidence that the ranks of the super-rich are doing just fine in this economy.
• An amusing breakdown of "kicking the can", with real-world examples: http://on.wsj.com/rGRvGG I love it.
• Sigh... the top seven highest-grossing movies of 2011 were all sequels. http://huff.to/rZByeW 
• @CrimsonCavalier Oh... the Jordan XIs are back... neat. deadspin.com/5870837/babies…
• Hope all had a great Christmas. Now bring on 2012. http://youtu.be/AIUTUVVRtFA 
• Congrats to Drew Brees. Different game than when Marino played, but still impressive. But, Brees is only 5th in NFL in yards per attempt.
• Check that, Brees is 6th in NFL in yards per pass attempt (Rodgers, Brady, Schaub, Eli, Carson Palmer)... First in attempts by a mile.
• Wait, this is a parody, right? It has to be. http://bit.ly/tYOUt5 Somebody please tell me it is. #munsonedouthereinthemiddleofnowhere 
• A belated congrats to my dad for a very cool honor from the B.A.A. http://bit.ly/u8BJ6b 
• Wow... I did not know that Jim O'Brien was still coaching anywhere, let alone D-3 ball. http://b.globe.com/tE4U1g 
• Way to be, LAPD... http://lat.ms/sFFghK Hundreds of wrongful imprisonments while all celebrities/Lohans get a free pass. You're doing great.
• Celts played the Heat on TNT last night. I watched the Belk Bowl instead. I regret nothing. #nbaregularseasonsucks 
• Corn ethanol subsidies lapse... that's good news. Need many more things like this to lapse. http://bit.ly/v599bC 
• Please don't do this to me. http://es.pn/uBUsvX I'm not ready for Brian Hoyer yet... thank God for the bye.
• "Wrong turn" brings rare Asian bird to... southeast Tennessee? http://yhoo.it/sSUWXu Well this is not a mundane detail, Michael!
• Many people donating worthless homes to charity: http://usat.ly/vXkvYs I guess that's cool, but I can't help thinking about "muffin stumps".
• These charts may have a partisan slant (if charts can do that), but they're still interesting, esp. on tax policy: http://bit.ly/ryNhFa
• Amazing stat: RT @SI_PeterKing: Great note by @AdamSchefter: Bucs are 0-7 with Albert Haynesworth, Pats are 7-0 since waiving him.

Some pretty good little nuggets in there, in particular the open letter to Jamie Dimon and the tax policy charts. Have a Happy New Year, folks. Drive safely.

Who funds the fine arts (and does it matter)?

Yves Smith of the Naked Capitalism blog tipped me off to an interesting blog post regarding the funding sources of the fine arts (specifically, orchestras), and whether orchestras and other organizations should accept funding from "tainted" corporate sources. The article centers around a discussion as to whether banks are now, in the wake (eye?) of the financial crisis, affected with the same stigma as are tobacco companies. However, I think the piece may actually miss a bigger picture question, as I'll address later.

Exclusive Overgrown Path research shows that 45% of corporate sponsorship for ten leading orchestras in Europe and North America comes from the banking and financial services sector. This is more than five times greater than from any other corporate funding source. 

A second funding tier comprises companies from the automotive and media industries, with each sector accounting for around 8% of sponsorship. Below that a third tier is made up of companies from the aerospace & defence, pharmaceutical, retail, utility and law sectors. As the research analyses source rather than revenue (see explanatory note below) it is likely that the fiscal contribution of the banking and financial services corporations is considerably greater than 50%. 

A number of the corporate funders, both in the banking sector and elsewhere, have been linked to ethical issues, some of which are noted in the supporting material below. This raises the important but little-explored question of what price classical music is prepared to pay for funding.

The author goes on to cite specific examples of unethical behavior from Deutsche Bank, which largely funds both the Berlin Philharmonic and the London Philharmonic. This is all well and good, and we could easily have an extended ethical discussion over whether or not any organization should accept money from anyone who does anything unethical or illegal (Does accepting money from a criminal make you a criminal? Is everyone who attended Penn State somehow liable for the alleged actions of Jerry Sandusky, or is every Republican a sexual harasser because they share a party with Herman Cain?), but I definitely think it misses the point.

You see, down in the comments section of that post, one reader made a particularly astute observation. In noting that the blog author had neglected to consider those orchestras that received primarily state funding--focusing only on those that relied on corporate sponsorships--the commenter remarked the following:

I note your point... above, but let's not forget that all government funding is ethically compromised. 

Government money comes from tax, including that on the profits and wages earned in such industries as pornography, junk food, oil, armaments, gambling, tobacco, alcohol etc. 

The state is often an active participant in dodgy industries like armaments and gambling. For example, in the UK, the government's huge gambling operation, the National Lottery, is used to fund 'good causes'. 

Does ethically compromised money conveniently become ethically cleansed when it has passed through the hands of the state? 

In the opinions of those who are given it I suspect so.

That commenter makes some fantastic points, especially when he brings up the National Lottery. I've long been uncomfortable with the double standard that exists--both in the United States and elsewhere--whereby gambling is illegal and condemnable, unless it is explicitly sponsored by and supporting local governments. We go out of our way to pretend that our state lotteries are somehow virtuous because they are (often) used to fund public schools, while we are asked to kindly ignore the fact that this funding often comes on the backs of degenerate gamblers whose lives are compromised or ruined by their gambling addiction. Why does that double standard make sense?

In my estimation, any government is simply a reflection of all the elements of a society--both virtuous and nefarious--put together into one big bucket. If you accept money from a government agency of any kind, you are by proxy accepting money from a bank, a tobacco company, a railroad, a strip club, a sex shop, and, thanks largely to California, a medical marijuana dispensary--all of these and more, without any way of distinguishing one dollar from another. If the trend toward moral relativism with regard to state budgets continues (and it's almost certain to), this dynamic will only become more pronounced, further blurring the line between unethical companies and government agencies.

The only remaining question is, do we care? Personally, I don't. If a company takes liberties with its customers or the taxpayers, and we are all collectively naive (or stupid) enough to continue doing business with them, then we are legitimizing their business practices by proxy, and we in large part lose our right to cast moral judgment in their direction.

We may find banks and tobacco companies to be distasteful, but as a collective unit we continue to support them as customers. If they feel like re-channeling some of this "dirty money" into more virtuous areas in the name of image enhancement, I say we let them do so. That goes for corporations, governments, and individuals alike--if we don't like what they're doing, we should stop giving them our own money in the first place. Refusing to take it back from them later is simply stupid and self-defeating.

[On An Overgrown Path]  
(h/t Naked Capitalism)

Clip of the Week (New Year's Edition)

Let's send things into the new year with one last Clip of the Week, shall we?

It would probably be appropriate to end the Year of the Wide Receiver with one last ridiculous highlight, and the Bengals' Jerome Simpson definitely did plenty to earn a shout out here (even if he probably could've gotten to the endzone with a simple cutback). But I'm getting tired of these wideouts showing off, so I'm moving on... actually, I'm looking back.

No, I'm not looking back at one of the better defensive plays of the young college basketball season, or at a(nother) great clip from my favorite late-night host. Instead, I'm looking back at some of the better music from the past year, with an excellent year-in-review music mashup from over in YouTube land. This is pretty well done, so turn your volume up and enjoy some of the best tunes from 2011--because yes, Rebecca Black, there is still good music being produced out there.



Have a happy new year, people.

Way to go, Florida

The internet is clearly asleep this week, probably because nobody is actually at work (or, if they are, they're not actually doing anything, sort of like me). Far be it from me to wake up a sleeping giant, but I thought I'd pass along this fantastic article from Florida, which is seemingly hell-bent on setting a new low for state governments.

Florida school districts will be able to sell the naming rights for public school cafeterias under a bill filed this week.

Irv Slosberg, D-Boca Raton — who has also filed a bill that would allow advertising on the sides of school buses — filed the "Student Nutrition Enhancement Act" on Tuesday.

It would allow school boards to decide the details on naming rights, including where the name is displayed. It says revenue generated shall be used "to enhance the school district's school food service budget and to meet the nutritional needs of students."

In the midst of historically deep budget cuts for Florida schools, "this is a way to get private businesses to partner up with governments," Slosberg said Wednesday.

Oh my dear God. For what it's worth, Slosberg has previously called for Florida to sell the naming rights to just about everything, from state roads to beaches to--in his words--"anything the state of Florida owns that we could possibly sell". Like, you know, children.

Why not just institute a statewide public school dress code policy, and then sell advertising space on the school uniforms? That way we can raise new revenue to help pay for, I don't know, art and music classes, and our kids can all get gussied up like their favorite NASCAR drivers. I should probably shut up, before I give ol' Irv any more bright ideas.

This bill is honestly fairly inevitable, as it follows logically in the theme of moral relativism when state budgets are on the line--first it was drugs, alcohol, and gambling, and now coming soon to a state near you, whoring our kids' futures out to corporate interests.

What worries me most about this particular bill, though, is that there is a direct connection being made between the source of the revenue and the uses of said revenue. In most cases, that's a good connection to have, as taxpayers can better understand what they're paying for, and can therefore make better-informed decisions about whether or not a proposed program is a good idea.

But in this case, because it's corporations that are being considered, I worry that participating companies will make their sponsorships contingent upon certain specific uses--for example, "we, Frito-Lay, will sponsor your cafeteria, but only if you serve at least 35% Frito-Lay products in said cafeteria". In fact, such a setup is basically inevitable once you've opened up this Pandora's box. The potential for kickbacks and unintended consequences is staggering and frankly frightening.

But then, Congress has already told us in very clear terms that our school cafeterias are for sale to large corporate interests, when it openly declared that it considered pizza to be a vegetable. I probably shouldn't be so surprised to see desperate people with unfunded pensions so eager to sell out their own children's future, but I am nevertheless.

Cities, states, and countries have promised more than they can afford, but nobody wants to admit it or pay more in taxes to cover it. That leaves us with little choice but to begin chipping away at many of our once-cherished values, compromising the integrity and well-being of future generations in the process. Sad.

[Tampa Bay Times]

The Language of Food (Quote of the Week)

Tyler Cowen of the always-interesting Marginal Revolution blog tipped me off to the Language of Food blog--a creation of Stanford professor Dan Jurafsky, who teaches an occasional linguistics course under the same name (I'm a nerd, so yeah I checked the syllabus and have been trying to track down some of his assigned readings).

Jurafsky has some fascinating insights into the way we talk about, market, and derive names for the foods we eat (and the processes we use to create them). What's the difference between "roasting" and "baking"? Why do we come up with names like "Rocky Road" and "Mississippi Mud" for our ice creams? And what the hell does "all natural" mean? These are the types of questions that Jurafsky aims to tackle on his blog, and I for one found some of his posts to be fascinating (if somewhat academically wonky).

Here's an excerpt from his most recent post, which considered the language used in the marketing of potato chips:

The political season is well upon us and that means a lot of politicians talking about strugglin' and rollin' up our sleeves, especially when speaking to working class audiences. Since the pioneering work of sociolinguists like Bill Labov, linguists have studied the ways we chose variants, like "-in" to project a working class authenticity but "-ing" to project an educated or professional persona...

This use of linguistic variables to mark identity and authenticity occurs in the language of food as well. Josh Freedman, a young political researcher, was an even younger freshman in my Language of Food seminar at Stanford four years ago when he became interested in how the language of food advertising reflects socio-economic class...

Josh and I looked at 12 bags of potato chips, 6 more expensive (Boulder, Dirty, Kettle Brand, Popchips, Terra, Season's, averaging 68 cents per ounce) and 6 less expensive (Hawaiian, Herr's, Lays, Tim's, Utz, and Wise, averaging 40 cents per ounce). We coded up all the advertising text from the back of the chips and then examined how the words differed between the two classes of chips.

What factors characterized expensive chips? You may be surprised to learn that potato chips are a health food; almost all chips (expensive or not) emphasized the healthiness of their products by using phrases like "low fat", "healthier", "no cholesterol", or "lowest sodium level". But these health-related claims  occur on expensive chips 6 times as often as on inexpensive chips (6 times per bag versus once per bag). This difference in health language is not, as far as we can tell, due to actual differences in the chips. No chips in our sample contain trans fats, but only 2 out of the 6 inexpensive chips talk about it. By contrast, every one of the 6 expensive chips mentions the lack of trans fats.

Expensive chips also turn out to be much more natural. Phrases such as "natural", "real", or "nothing artificial" are 2.5 times more likely to be mentioned on expensive bags (7 times on each expensive bag but under 3 times on each inexpensive bag).

Finally, expensive chips are 5 times more likely to distinguish themselves from other chips, using comparative phrases like "less fat than other leading brands", "best in America", "in a class of their own". or "a crunchy bite you won't find in any other chip". Where text on the inexpensive chips focuses on the chips themselves, ads for expensive chips emphasize their differences from "lesser" chips...

In his famous book "Distinction", sociologist Pierre Bourdieu showed that our position in society heavily influences our tastes, whether in food, music, film, or art.  He argues that "hip" or "fashionable" tastes are just a away for the upper class to display their high status, to distinguish themselves from other classes. Taste, says Bourdieu, is "first and foremost... negation... of the tastes of others". The fact that expensive chip advertising is full of comparison (less fat, finest potatoes) and negation (not, no, never, don't) suggests that Bourdieu is right, that the notion of upper class taste in food advertising is defined by contrast with tastes of other classes; what it is to be upper class is to be not working class.  

Potato chips as a vehicle for drawing societal metaphors and understanding class distinctions? Now that's a nerdy concept I can get behind. "Taste... is first and foremost... negation... of the tastes of others". That's so simple and yet so profound. In fact... I'm going to make it my Quote of the Week. So there.

[Language of Food]  
(h/t Marginal Revolution)

Street art is awesome

Last week, the Red Cowboy shared with us some clever Calvin & Hobbes-themed street art. Good stuff. Following in his lead (and keeping things appropriately light for this completely worthless holiday tweener week), I came across this huge compilation of some of the best street art from 2011, and I figured I'd share some of my favorites.

These are clever, well-executed, and in many cases mesmerizing--even if you think it's graffiti and therefore illegal. On a related note, watch "Exit Through the Gift Shop" some time. It's a thought-provoking look into a world I know little about.

Clip of the Week

Strangely enough, there wasn't much to work with this week. I think everyone (myself included) decided to start the Christmas holiday a little early, and closed the internet without telling anyone. So be it.

They're still playing sports, so there's always those highlights to show, but all that really intrigued me was this crazy extra point and this devastating missed penalty shot. There's also the amusing Tim Tebow/Patriots sketch from SNL, but honestly Tebow-mania is getting a little played out and I just don't feel like feeding into it any further.

But hey, it's Christmas week, which gives us a whole bunch of material to work with from the archives. So with that, I'm going to give you clips from each of my four favorite animated Christmas specials from my youth. Some of them lasted a little longer than others, but they're all classics in one way or another. Enjoy, and Merry Christmas (sorry, Hanukkah people, just... listen to this, I guess).

#4: A Garfield Christmas Special



#3: How The Grinch Stole Christmas



#2: A Charlie Brown Christmas



#1: A Claymation Christmas Celebration

Twitter update

Another update in what's going on over on Twitter (@CrimsonCavalier).

• Belichick may be awful in press conferences, but he's great when he's breaking down X's & O's. http://bit.ly/sb3Svo He clearly enjoys this.
• Well-earned takedown of Obama: http://bit.ly/sEW9Ep Due process is not a quaint little idea, it's our nation's foundation. #lostfaithingov't 
• Calvin & Hobbes for the Christmas win: http://bit.ly/rqVBtO
• Love this: using Bieber as a torture technique. http://huff.to/t0hTF2 Whatever works...
• I feel like this is unnecessary: http://bbc.in/sxa5Rv If they're not close enough for pepper spray, they're probably not too dangerous.
• CNBC's Brian Sullivan just called $RIMM "one of the greatest collapses in market history"--from $60 to $13 in under a year. Um, $NFLX??
• What a fantastic concept: the "disloyalty card". http://bit.ly/sqcxzk I'm intrigued; at the very least, it's a really creative idea.
• Soon, the entire United States will be owned by "eccentric billionaires" from China and Russia. http://read.bi/w2sL6Z #thanksFed 
• 23&Me is at best a very strange phenomenon, and one that weirds me out more than a little bit. This only adds to that: http://bit.ly/uBmh5L.
• Congrats to Harvard and UVA men's basketball teams, both ranked this week (in different polls)... never thought this day would come.
• The culture that is Quebec: http://b.globe.com/sHnOgP Quebec gov't wants Canadiens coach fired because he doesn't speak French.
• Kim Jong is dead? I didn’t even know he was Il. #toosoon?
• The end of e-mail? http://on.ft.com/tv09IB In a word, no. Not sure what's dumber, this article or those that proclaim the "death of the PC".
• AT&T paying the biggest breakup fee ever http://on.wsj.com/vZtAH2 Well played, T-Mobile...
• The power of "I don't know": http://nyti.ms/sKOslK Admitting ignorance can make/save you a lot of $$$, but it won't get you airtime on CNBC.
• I shake my head every time the "FedEx Express" truck drives by... the redundancy is delicious.
• An interesting look behind the scenes at Amazon: http://bit.ly/uu69dm "Confessions of an Amazon elf". Enjoy that Michael Buble CD, people...
• Is this right? 1 in 3 Americans will be arrested by age 23: http://usat.ly/ucIhpr I assume many of these are low-level drug arrests...
• Pretty interesting article from Grantland "The Rise of the NBA Nerd". http://es.pn/u7OH7l Hip-hop/black culture has changed a lot in 20 yrs
• A fascinating article on sad recent goings-on at my alma mater: http://bit.ly/sUOd0N Open the gates back up, Harvard. It's your duty.
• Not sure how this compares to previous years, but it's still eye-opening http://bit.ly/tc1Zkg Weather definitely seems more volatile lately.
• Creepy: banks using social media to assess credit risks. http://bit.ly/v4oeXw 
• Also creepy: Monsanto threatening public health (again) http://bit.ly/rM09kR 

I'm always surprised when I post these Twitter updates to see how many tweets I've posted since the last update. If you're looking for just the best stuff, I'd recommend the last two tweets (the "creepy" tweets), as well as the "Amazon elf" article.

Oh, and the second tweet in the list, the takedown of Obama. The National Defense Authorization Act (NDAA) is an absolute travesty, and I think America has died a little bit (or a lot) with its passage. Our government simply is not on our side any more, regardless of what they say. This step by our government is terrifying, and the silence throughout the country in its wake might be even more terrifying.

China update

I've been sitting on this one for a while, but it's a pertinent update to pass along given my past rants on the topic of China and the trade wars that our incompetent lawmakers insist on instigating. Per Mish Shedlock (citing Bloomberg),

China announced plans to impose anti-dumping duties on some vehicles imported from the U.S. after failing to block a U.S. tariff on Chinese tires. 

Punitive duties will be as high as 12.9 percent for autos from General Motors Co. (GM) and 8.8 percent for Chrysler Group LLC, China’s commerce ministry said today on its website. The U.S. units of Bayerische Motoren Werke AG (BMW) and Daimler AG (DAI) will face duties of 2 percent and 2.7 percent respectively, it said. 

“The move shows that China is always capable of intervening politically in its markets,” said Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler. “The automobile industry is very dependent on China for growth, and there’s doubts about the pace of future expansion.” 

The move to increase import levies comes three months after the World Trade Organization rejected China’s appeal of a ruling backing U.S. duties on tire imports.

China has already shown us that they are more than willing to call our bluff if we insist on engaging them in a trade war, and this is the start of that process. American companies and individuals will suffer greatly from any trade war, whether instituted via direct tariffs or via wrong-headed "currency manipulator" legislation.

Let me say this one more time, with emphasis--our manufacturing industry has been outsourced to China not because of their unfair labor or currency practices, but because of massive domestic inflation caused by overly accommodative monetary policy from the Fed and fiscal policy from Congress.

When commodity and real estate prices (not to mention college tuition rates and health care costs) march inexorably higher year after year, American workers have no choice but to demand higher and higher wages from their employers. Companies therefore have a choice--cave to those demands and raise their end prices to compensate, or else take the jobs elsewhere where workers are able to work for less. They've increasingly chosen the latter, which keeps core inflation statistics down but also guts our nation's manufacturing base.

While there are certainly exceptions, the majority of American companies would prefer NOT to outsource these jobs if given the choice. For a company, outsourcing manufacturing jobs to China means giving up a significant amount of control over intellectual property and quality control, while also dramatically increasing production lead times and therefore making inventory management significantly more difficult. These are NOT GOOD THINGS from a business standpoint, and businesses will therefore only do it if they feel as though it is their only choice. Increasingly, this is the feeling they receive when assessing the potential costs of hiring an entirely American labor force.

If we want to get our manufacturing base back, we need to cut the crap with our unrealistic monetary and fiscal policies. Otherwise, any trade war will have only negative impacts on our domestic economy--recession, inflation, decreased corporate profits, you name it--there is literally no good outcome if we continue to insist on engaging in trade wars with China and other nations.

The trade war has already begun--how far are we going to let it go before addressing the real problems that plague our economy?

[Bloomberg]
(h/t Mish Shedlock)

Quote of the Week

Yeah, I've been a little M.I.A. this week, and I apologize for that. With the baby around and Christmas coming up, I've been a bit preoccupied. But I do have a Quote of the Week for you, and it's a real doozy.

As our friends over at Deadspin have pointed out, Christmas has a way of turning kids into complete and utter crazy people. Personally, I can't wait until my daughter is old enough to terrorize me around the holidays, wondering aloud why Santa was more generous to her friends than to her--should be fun times. Case in point:

This week's QUOTE OF THE WEEK

"Dear Santa,
     This Christmas, I don't ask for much, so if I don't get at least two of these things I want, I will literally KILL you! Do you understand? Oh, also, I'll hunt down your reindeers, cook them & serve their meat to homeless people on Christmas Day. Nobody wants that... so here's what I want..."
                              -British 13-year-old Mekeeda Austin

Little miss Keedy then goes on to list a series of modest requests--a visit from Justin Bieber, a Blackberry, and "Money". The full text of the letter is here, if you can read it:

Of course, I'm a bit of a jackass, so if I got this letter I'd respond by punishing her poor grammar and her lack of specificity. By not capitalizing "Blackberry", she's indicated that she doesn't want a smartphone (why would a 13-year-old need or want a Blackberry anyway?), but a single piece of fruit. And she asked for "Money", without specifying what kind or how much. Therefore, congratulations Mekeeda! Your wish has been granted--this Christmas you're getting one single blackberry and 5,000 Confederate dollars. I trust that this satisfies your requests, as you've made them, and that Santa and his reindeer (I'm sorry, "reindeers"--there you go with that poor grammar again) can therefore sleep comfortably tonight.

Obviously, this letter is a bit of a far cry from the heartbreaking Dear Santa letters that I highlighted last year, and it really makes me shake my head. Without overanalyzing the actions of a 13-year-old too much, it's pretty sad to see just how entitled some people (both young and old alike) feel these days.

As the little girl said in a follow-up interview, "I don't really believe in Santa anymore, but I was angry because I thought I was going to get all the presents I wanted this year. I want all of these things and I don't see why I shouldn't get them." Perfect. Great attitude. Hey Mekeeda, maybe you should direct your next letter to the Fed--Mr. Bernanke seems to respond well to people who think they deserve the world.

[NY Daily News]

Clip of the Week

When you don't post a Clip of the Week for a couple of weeks, you really do end up with quite a lot of material to work with. That doesn't mean I'll be skipping weeks more often in the future, but it does mean that I'll be giving you co-Clips of the Week this week (hooray!).

But first, the runners-up. From the sports world... the year of the wide receiver continues... and I can't believe I'm not giving this Clip of the Week honors, because this catch is insane. All hail Elvis Akpla! There was also a pretty crazy NFL catch, but that's nothing compared to what the college kids are doing these days.

Staying in the sports world, we had this great game-winning shootout goal from the Blackhawks' Patrick Kane, as well as this college hoops buzzer-beater that took down #1 Kentucky. And if you want to be infuriated, read about and watch this play, which drew a ridiculous penalty flag and cost a Massachusetts high school football team a championship--sportsmanship rules run amok.

Finally, we've got a great rant favoring the death of the penny, an impressive musical performance by the "Mad Violinist", and Jon Stewart doing his thing with respect to the War on Christmas.

And finally, we've got our co-Clips of the Week. First up, because this guy is awesome, a bearded dragon playing Ant Crusher (h/t @Killagroove).



And secondly, via Barry Ritholtz comes this mesmerizing pendulum wave machine. The patterns that this thing makes are crazy, and you all know by now that I'm a sucker for things that mesmerize me.

Update to SEC post

In writing my SEC rant this morning, I forgot to include a reference to a very interesting post from Naked Capitalism's Yves Smith, which pointed out a dynamic of which I wasn't yet aware. Here it is:

Alison Frankel at Reuters highlights a new New York appellate court decision where JP Morgan is being hoist on the Rakoff petard. Bear Stearns, which is now owned by JP Morgan, entered into a $250 million settlement in 2006 over allegations that it cheated customers by engaging in impermissible market timing. The agreement contained standard SEC “without admitting wrongdoing or denying” language. The payment broke down into $160 million of disgorgement and $90 million of penalties.

What may surprise many readers is that the $160 million disgorgment was covered by insurance, or at least JP Morgan thought it was. Per Frankel:

The insurance agreements said the bank was covered for damages awards and charges incurred by regulatory investigations, with one catch: The policies excluded claims “based upon or arising out of any deliberate, dishonest, fraudulent, or criminal act or omission,” if there were a final adjudication reflecting that wrongdoing.

The insurers said no dice, and JP Morgan took them to court to try to force them to pay. The lower court decided in favor of JP Morgan, but the appeals court reversed. And the logic is revealing:

But a ruling Tuesday by the New York state Appellate Division, First Department, suggests the boilerplate language that Ramos cited — and Rakoff has derided — may no longer offer defendants much benefit even without judges specifically rejecting it….

But the decision’s implications may be broader than that. In an opinion written by Justice Richard Andrias, the state judges simply didn’t pay much heed to the SEC “neither admit nor deny” boilerplate. “Read as a whole,” the decision said, “the offer of settlement, the SEC Order … and related documents are not reasonably susceptible to any interpretation other than that Bear Stearns knowingly and intentionally facilitated illegal late trading for preferred customers, and that the relief provisions of the SEC Order required disgorgement of funds gained through that illegal activity.” Moreover, in a footnote, the opinion referred explicitly to Rakoff’s criticism of SEC boilerplate in SEC v. Vitesse Semiconductor.

Putting on a public policy, rather than a legal hat, insurance that has the effect of letting companies and boards buy their way out of the economic consequences of bad conduct is a terrible idea.

While it doesn't exactly surprise me, I officially had no idea that banks held (or even had the capability to hold) insurance policies to protect them against penalties arising from SEC enforcement actions. This fact only lends credence to the concept that banks are internalizing fraud-based fines as a general cost of business, and it only makes Rakoff's ruling that much more critical. More importantly, it adds another judge--Judge Richard Andrias--to the ever-growing roster of justices who are fed up with the way that the financial watchdogs treat bank fraud.

The SEC has been played as puppets here, as the banks have simply purchased insurance against anything the SEC might do. This plan only works as long as the SEC continues to allow “without admitting wrongdoing or denying” language to be a standard part of its settlements, and this is exactly what must stop.

Judge Andrias and Judge Rakoff are onto something here, and the SEC therefore has a choice--assemble a legal team that will actually prosecute instances of bank fraud, or else assemble a similar team that will appeal every like-minded judicial ruling in the Andrias-Rakoff vein. Only one of these options is consistent with the SEC's mandate, and only one of them is an acceptable use of taxpayer dollars. I think you know which one.

[Naked Capitalism]

Twitter update

Oh, boy... looks like I haven't updated my non-Twitter followers on the goings-on over there (@CrimsonCavalier). I've been fairly busy on Twitter for the past week or so, but there's too many tweets to copy here all at once--I know you won't read them all if I do, because I wouldn't. So here's the recent "highlights" from TwitterLand.

• This year's bowl swag for the "amateur" players. http://bit.ly/unmCfc My favorite is the Idaho Potato Bowl--it's cold here boys, bundle up.
• Cool piece on the impracticality of the cheeseburger. http://bit.ly/uAHEsA I love to complain about the modern world, but I do like burgers. 
• #thismarketisbroken RT @zerohedge: Snapshot Of Pure Lunacy bit.ly/uYUH52 
• 75 years in prison for videotaping police? http://youtu.be/80DbxSZ_FB8 This raises some very serious civil liberty issues. Very serious.
• Per Gallup, "the 1%" is remarkably similar in demographics to "the 99%". http://bit.ly/sQbQot I'm not surprised.
• Swedish firm sells insurance to subway turnstile-jumpers... http://bit.ly/tpd3Dy I LOVE the concept, but I'm sure it'll get shut down soon.
• Poland getting absolutely screwed by this Euro "agreement". http://bit.ly/sxtfLn It's okay, screwing Poland has never led to anything bad...
• Holy crap... http://deadsp.in/uQtlwv These receivers are just outdoing themselves this year. Remember this? http://youtu.be/kHVArnFDjhg
• About those glowing early Black Friday sales "reports"... http://bit.ly/u7EeJY #dontbelievethehype 
• Worth a read, regardless of your political affiliations or beliefs: "My Occupy LA Arrest", by Patrick Meighan. http://bit.ly/rEnPkb
• Eric Cantor blocking legislation banning/limiting Congressional insider trading... of course he is. This guy is a joke. http://bit.ly/uw2D5B 
• I love this concept: "The Banker's Dozen". http://bit.ly/tfnITE I'm officially adopting this, and I intend to use it regularly.
• More clueless bankers: Hungarian central banker gets clobbered on currency bet. http://bit.ly/uq6aC2 But, but, but... my model says...

I particularly enjoyed reading Patrick Meighan's "My Occupy LA Arrest", and I thought the cheeseburger piece was incredibly well done (reminiscent of Thomas Thwaites' homemade toaster experiment). Always remember that as much as there may be wrong with today's world, we're also blessed with an incredible amount of conveniences that previous generations could never have imagined.

People can do a lot of awesome things, and the world is ultimately a really cool place--that's why we have to make sure we don't take it for granted.

The SEC and the politics of intimidation

Just two days ago, I posted a chart detailing the serial fraud that has been perpetrated by our largest financial firms--and allowed to continue by an apparently disinterested SEC. In my conclusion, I opined that we need "more Eric Schneidermans and Jed Rakoffs," the latter referring to the judge who threw out a proposed settlement between the SEC and Citigroup.

I had previously written that Rakoff's ruling was an incredibly important one, while noting that Rakoff had "faced a significant amount of scrutiny from people who think that the SEC 'can't afford' to prosecute cases like these, because the cases are too expensive and the banks have such amazing legal resources". Still, I was hopeful that Rakoff's rebuke might force the SEC into action, as public pressure mounted and opinion coalesced against the banks. No such luck.

Judge Rakoff got to have his insurrection when he rejected the SECs $285 million settlement with Citigroup last month.

Now it's the SECs turn. According to the Wall Street Journal, the agency is planning an insurrection too — against Judge Rakoff. The agency will expend its resources creating a five person panel to appeal the Judge's decision.

You'll recall that instead of allowing the agency to take Citi's money and be done with its mortgage-backed security suit against the bank, Judge Rakoff asked both parties to go back to the drawing board.

In doing so, Judge Rakoff bucked a practice that's been in play since the 1970s. The SEC has allowed banks to pay small sums ('pocket change," in Rakoff's words) and neither confirm nor deny their guilt in civil suits against the agency. Rakoff thinks that practice is unjust.

So given the Judge's order, you would think the SEC might prepare itself to go to trial with Citi so the bank could maintain its innocence (a scary prospect for both parties). Or that both parties, at the very least, would get their calculators out to tabulate a sum that might make the Judge happy.

Not so. The SEC would prefer to create a 5 person commission to appeal the Judge's ruling and nip this problem in the bud.

Right. So the SEC "can't afford" to prosecute cases against banks that consistently and repeatedly perpetrate fraud against the American public, but it can afford to mount appeals against judges who stand in their way. Sounds great.

What's so disheartening about this turn of events is that it's seemingly indicative of a new way of doing business in Washington, that of the politics of intimidation. The first clear example of this wave of bullying came after S&P's well-publicized downgrade of U.S. sovereign debt in August--rather than humbly taking their lumps and acknowledging some flaws in the way that they did business, Washington instead elected to turn their ire on S&P with a clearly retaliatory investigation of the agency's business practices.

The message to S&P was clear, as is the message here to Judge Rakoff--we don't care who you are, or what you think. If you disagree with the way we do business, we will do everything we can to make your life miserable, or at least marginalize your voice. That's not the America that I know and love, and I think it's a very sad turn of events for all Americans. Our political system and democratic process must be respected, even when that means that government bodies may (on occasion) face steep criticism for their actions.

While you may not agree with the assertion that "dissent is the highest form of patriotism" (or, as some have reminded us, "descent the highest form of patriotic"), you must certainly acknowledge that the politics of intimidation lead us down a very dangerous path. A government that bullies its opponents into silence is not a democracy at all--it's a thinly veiled dictatorship, with "free speech" a mere mirage.

If there is any hope for our democracy going forward, here's hoping that whichever judge hears the SEC's appeal affirms Judge Rakoff's decision. It's the only way that we can ensure that equality under the law persists (or returns) in our country--without equality under the law, there cannot be a true democracy at all.

Of course, even with an affirmation of Rakoff's ruling, the SEC can still simply begin making its settlements outside of the court system entirely, which still misses the point. I yearn for a time that government bodies treat dissent as an opportunity for soul-searching and reform, rather than as an opportunity for chest-pounding and muscle flexing. In my opinion, the tighter these agencies try to hold onto their power and preserve their existing processes, the more they lose credibility altogether. And a government without credibility cannot survive.

[Business Insider]

Quote of the Week

I don't really know what day it is any more, so I tend to forget to post things like "Quote of the Week" and "Clip of the Week" on their pre-determined days. Although let's be honest, I always forgot to do that, baby or not. At any rate, while we all really don't care about the NBA, I do still love Kevin Garnett.

This is why: angered about the condensed training camp schedule that the lockout (and Commissioner David Stern's insistence on opening the season on Christmas Day, with the Celtics tipping things off at noon) made necessary, Garnett dropped this gem...

This week's QUOTE OF THE WEEK

"Timing is everything. Chemistry is something that you don't just throw in the frying pan and mix it up with another something, then throw it on top of something, then fry it up and put it in a tortilla and put in a microwave, heat it up and give it to you and expect it to taste good. You know? For those of you who can cook, y'all know what I'm talking about. If y'all can't cook, this doesn't concern you."
                       - Celtics forward Kevin Garnett

I... what in the... what? Whatever. Garnett isn't the first sports figure to make a weird food reference this week, nor is he the first Boston sports figure to use a cooking metaphor to express his anger. But he does win some points for his efforts... because chemistry is not a chimichanga. Or something.

[Deadspin]

Ugh

If you've been reading me long, you'll know how I feel about the big banks, and you'll also know that I think the banks have been the recipient of many more government-sponsored bailouts than we could possibly imagine--TARP was just the tip of the iceberg.

Bloomberg (and, more hilariously, Jon Stewart) broke the news of one of these backdoor bailouts last week, in the form of trillions of dollars in secret loans from the Fed, many of which were then lent back to the Federal government for a profit (borrowing from the Fed, lending to the government, and taking a profit on the difference--uh yeah, that's a bailout).

But I've always been more interested in the non-financial type of bailouts--namely, the crimes that banks are allowed to perpetrate without facing anything more than a fine when the crimes are discovered. That they can internalize these fines as a cost of business only ensures that for banks, crime does indeed pay. For evidence of this dynamic, look no further than this New York Times infographic (brought to my attention by Barry Ritholtz), detailing the so-called "Wall Street Recidivists".

You'll notice that my favorite company Bank of America shows up on there multiple times, as does Merrill Lynch, which is now wholly owned by BofA. I'm absolutely shocked.

It's clear that this world needs more Eric Schneidermans and Jed Rakoffs, and fewer bankster criminals. The prevailing attitude in Washington seems to be that if we prosecute the banks fully, it will "upset the markets", or that the banks will scale back lending and devastate the economy. That line of reasoning is insulting to our intelligence. If we allow different people to have different treatment under the law, the whole nation suffers immensely. Equality under the law is the only thing keeping our democracy (and, frankly, our economy) intact. It must be preserved at all costs.

The banks have been lying, cheating, and stealing for over a decade, and it's about damn time we put a stop to it. Fines aren't enough--they're just a thinly veiled bailout. We need handcuffs and bank closures, and if the markets suffer in the time being, so be it. Anyone actually feel like stepping up and doing it?

[NY Times]
(h/t Barry Ritholtz)

The United States of Extremes

On Friday, I posted a map from the New York Times with some fun facts about a few European nations. At the end of the post, I said that I'd set to work creating a similar map with respect to the United States--I didn't disappoint. My artwork may not meet the same standards as the NY Times crew, but I still thought the stats I came up with (many of them via the U.S. Census) were interesting.

Ever wonder which U.S. state produced the fewest female lawmakers? Or which state had the most structurally deficient bridges? Are you a meth addict who wants to know where to find the highest concentration of meth lab activity? Or are you just a poor high school kid who wants to land a job in the state with the highest minimum wage?

Whichever category you fall into (come on, you know you fell into one of those), this map is for you. What's your state the best (or worst) at?

P.S.- A few states turned up several "superlatives" to choose from. I thought it would be prudent to mention some of those highlights/lowlights in a postscript. Obviously there's more out there, but these are the ones I discovered.

Alaska: Lowest percentage of population over age 65; Lowest percentage of females

Minnesota: Highest high school graduation rate (tied w/ Wyoming); Highest homeownership rate

Mississippi: Highest poverty; Highest obesity; Lowest median household income; Lowest high school graduation rate... man, let's just leave it at that, we've picked on these guys enough, haven't we?

Nevada: Highest divorce rate; Highest unemployment

New Jersey: Highest population density; Highest ratio of federal taxes paid to federal taxes received

Utah: Highest percentage of population under age 18; Most average persons per household

West Virginia: Fewest college graduates (per capita); Lowest percentage of bilingual homes

Fun facts about Europe

While I've been on hiatus, the world has kept its eyes focused on the slow-motion trainwreck that is Europe. This is essentially rubbernecking writ large, and I have to admit that I'm as hopelessly intrigued as anyone else (even if I am worried about the future financial well-being of the world, and also the potential for political bickering to turn violent).

So, once again, it's time for that old favorite Crimson Cavalier game, "Fun Facts About...". Our first installment of this game covered Greece, and the second round focused on Italy. Now, in our third attempt at "Fun Facts", we cover the entire Eurozone, with a little help from this New York Times infographic.

Did you know that only 28% of working age Portuguese have graduated from high school? Or that Finland has only reported a budget deficit in two of the last 10 years (no wonder they have very little interest in bailing out Italy and Greece)?

The major disparities between these countries underscores the difficulty in coming up with a one-size-fits-all agreement that suits all parties. And lest we in the United States think we're immune from this kind of divisiveness and bickering, I think I'll set to work on a USA version of this map--I think I'll be able to come up with some pretty amazing fun facts for many of our states.

[NY Times]

A whole new Crimson Cavalier world

Oh, hi there. You might have noticed my complete radio silence since Friday. No, I didn't fall off the face of the Earth or meet with an untimely death. Instead, the Crimson Cavalier world grew by one this weekend, with the (incredibly speedy) arrival of Eliza. She came into this world early on Sunday morning, and last night she finally let me catch up on a little bit of sleep.

I've got a lot of catching up to do around here, and my posts may still be sparse for a bit while I do so (or I may just be posting more on Twitter, less on the blog for a bit), but rest assured that the Crimson Cavalier's not going anywhere. We're just a little sleep deprived at the moment. Either way, welcome Eliza! It's gonna be fun to have a little Crimson Cavalierette (Crimson Cavaliera? Crimson Cavallerina? Man, who knows...) around the house.

Twitter update

Your latest episode of Twitter Digest, courtesy of @CrimsonCavalier...

• Fed can't save the US job market, why do we think it can save the world? Capitalism died a little (more) this morning. http://bit.ly/upWi4t 
• Well said. RT @zerohedge: Here Is What Happened After The Last Global Coordinated Central Bank Intervention http://bit.ly/u2f03p
• $MS closes up over 10% on latest Fed rescue... since July 21, it's had 29 days of 5%+ moves, 7 days of 10%+... #thismarketisbroken
• More interesting volatility stats from this increasingly manipulated market. http://bloom.bg/sum5Xu #thanksFed 
• "Hollywood accounting"--this is some seriously disgusting stuff. http://bit.ly/c66HwT Thanks @killagroove for the heads-up.
• "Genetically altered mosquito warriors"? This one has "unintended consequences" written allllll over it. http://bit.ly/sN5lOw #notthebees 
• I like some aspects of this, but I'm sure Congress will screw it up and make it just another back-door bank bailout. http://on.ft.com/sR8qoc 
• Re: last tweet: I specifically like the idea of "crowd funding", but only for a legit small biz--not as a loophole for oh, say, Facebook.
• Really great little article on comedy: http://bit.ly/t5MgOp Thought it was an interesting commentary on/ message to critics of all walks.
• The German city of Koblenz will evacuate as bomb experts gingerly defuse a massive World War II bomb in the Rhine River http://bit.ly/soAGv1 
• Pretty cool new scaffolding concept: "Urban Umbrella" http://bit.ly/uJLgCb... the Seinfeld "Urban Sombrero" reference is almost too obvious.
• Most important part of today's jobs report: participation rate keeps declining. Fewer workers=lower tax base=larger deficits=more debt
• Updated U.S. employment chart: always keep the big picture in mind. This is still not pretty. http://bit.ly/teiLfa #seeyouin2016 
• I would LOVE to know how these guys did in August: http://bit.ly/vKucb9 Article doesn't bother mentioning that 22% was "market perform"...
• In the last year, the population rose by 1,726,000. Yet the labor force fell by 67,000. Those not in the labor force rose by 1,793,000.
• Over the past year, avg hourly earnings of all employees have increased 1.8%. The consumer price index (CPI-U) is up 3.6%. #thanksFed 
• I wish I could get paid to eat Skittles: http://yhoo.it/s75Atv In case anyone is wondering, I'm currently eating Bachman pretzels.
• Someone tell Mayor Bloomberg that a police force isn't "an army". http://bit.ly/roP9b2 If that's an army, does that make citizens the enemy?
• Subway now advertising $2 6-inch subs... at what point do we start asking, "what the hell kind of meat is that?" #soylentgreenispeople 

Have a good weekend, people. Don't do anything I wouldn't do...

The un-death of Suburbia

Given how often I rant about bad journalism on this blog, I really, really, really want to turn my wrath on this incredibly misleading article from Institutional Investor, which was the subject of one of my tweets this morning. But honestly, I don't want to give this joker any more airtime than I've already given him, so let's move along.

Instead, I'll refer to what is in fact a very well-written and well-researched article (from Forbes) on the drastically over-reported death of Suburbia. In short, reports of Suburbia's demise have been greatly exaggerated.

This past weekend the New York Times devoted two big op-eds to the decline of the suburb. In one, new urban theorist Chris Leinberger said that Americans were increasingly abandoning “fringe suburbs” for dense, transit-oriented urban areas. In the other, UC Berkeley professor Louise Mozingo called for the demise of the “suburban office building” and the adoption of policies that will drive jobs away from the fringe and back to the urban core.

Perhaps no theology more grips the nation’s mainstream media — and the planning community — more than the notion of inevitable suburban decline. The Obama administration’s housing secretary, Shaun Donavan, recently claimed, “We’ve reached the limits of suburban development: People are beginning to vote with their feet and come back to the central cities.”

Yet repeating a mantra incessantly does not make it true. Indeed, any analysis of the 2010 U.S. Census would make perfectly clear that rather than heading for density, Americans are voting with their feet in the opposite direction: toward the outer sections of the metropolis and to smaller, less dense cities. During the 2000s, the Census shows, just 8.6% of the population growth in metropolitan areas with more than 1 million people took place in the core cities; the rest took place in the suburbs. That 8.6% represents a decline from the 1990s, when the figure was 15.4%.

Nor are Americans abandoning their basic attraction for single-family dwellings or automobile commuting. Over the past decade, single-family houses grew far more than either multifamily or attached homes, accounting for nearly 80% of all the new households in the 51 largest cities. And — contrary to the image of suburban desolation — detached housing retains a significantly lower vacancy rate than the multi-unit sector, which has also suffered a higher growth in vacancies even the crash.

I've definitely been on the record here before predicting that there will be a bit of a shift back to our nation's non-urban roots, as options for telecommuting make co-location of employees and their employers less and less important (and also less and less profitable--why would a company pay top dollar for commercial real estate when its employees can work just as effectively from their own homes?).

Many pundits have predicted that high gas prices will force commuters to move closer to their jobs (thus causing the shift from Suburbia back to the cities), but I argue that the opposite is more likely--their jobs will move closer to them. It doesn't make any sense for workers to move into the city to save on gas when it means they'll be paying twice as much in rent, as is often the case. In such a scenario, companies would essentially be faced with two options--pay their employees more, or allow them to work from home. Which one do you think is more likely?

I do understand that there is a certain social need (or at least preference) for living in big cities, and I fully appreciate the increased cultural options that cities provide. But the incredible density that a city like New York provides isn't necessarily... well, necessary. Over the next century or so, I definitely expect a shift away from the densest cities as telecommuting takes hold. This may lead to an increase in density in Suburbia, or it may just lead to a plethora of smaller cities around the country.

The Forbes article does admit that this very shift occurred during the pre-2007 housing boom--when cities like Phoenix, San Antonio, and Las Vegas grew rapidly--only to come crashing back in the other direction when the bubble burst. But I think this trend will revive itself in the coming decades, not because of another housing bubble but simply because the biggest cities simply aren't quite as relevant or as necessary as their huge rent price tags would suggest. Sooner or later, the people will realize this. That said, we could be waiting a while...

Either way, don't write off Suburbia just yet. The statistics show that the world outside the city limits is very much alive.

[Forbes]

Clip of the Week

This week's Clip was simply a no-brainer. The last couple of weeks, I've teased some great plays by wide receivers, but I haven't yet given Clip of the Week honors to any of them. That's clearly because I was waiting for this catch, from Marshall's Aaron Dobson. In a word (or two), holy crap.



The more you watch it (especially the slo-mo replays), the more impressive it gets. Until this play, I thought Randy Moss would forever hold the title of best one-handed catch ever. Nope. How appropriate that Moss would be displaced by a kid from his own alma mater. Let's hope for Aaron Dobson's sake that he can go on to have half the career that Randy Moss had. Even if he doesn't, that's one hell of a catch.

Honorable mention: science tricks, random cat video, NBA lockout humor. All of them a distant second.