My vintage Camaro SS!
Let me be merely the latest to post this (via Chicago boy JC and Clusterstock):
Markets and Trading
Could You Explain That To Me, In English?
I am looking forward to reading some books about the collapse of Wall Street. I am praying that Michael Lewis writes one. I was very happy to find this article written by him. If you are interested in the subject, I would make it required reading for this weekend. It is somewhat lengthy, but very entertaining. You will understand the title of this post if you read the article.
Michael Lewis is one of my favorite authors. His book Liar’s Poker: Rising Through the Wreckage on Wall Street
Cross posted at LITGM.
The Obama Bounce
The stock market is looking weak. Purely a coincidence, I am sure.
What’s Next?
Tuesday, October 21, 2008 is likely to be a decisive day in the credit crunch. That day is when credit default swaps (CDS) on Lehman Brothers debt will be settled.
Credit default swaps are sort of like insurance. One party offers, for a fee, to guarantee a certain bond against a “credit event,” usually something like a default, missed interest payment, restructuring, etc. If that happens, the insurer (seller) pays the difference between the bond’s face value and what it is worth after the event. In the case of Lehman Brothers, the company’s bankruptcy means that the sellers of the CDS will have to pay about $91 for every $100 of par value insured, since those bonds were selling for $8.65 per $100 par value at auction on October 10. Because there is no central market or clearing house for CDS trading, no one has a complete story on who will be paying and who will be trying to collect. The gross notional amount of credit default swaps on Lehman Brothers debt is believed to be approximately $300 billion to $400 billion. One hopes that the net amount is a lot less, maybe less than $10 billion after offsetting positions are netted out. One hopes, but one does not know.
(Update 10/19/2008: SEC Chairman Christopher Cox has a piece on the CDS issue in the New York Times.)
Bidding & the Fifties
The years after World War II were dynamic.  Dams and libraries, art and  state histories came out  of the depression era alphabet projects; these  were followed by the fifties’ interstate system.  Bridges, highways, infrastructure projects of broad scope connected the fast paced growth of suburbs. The first homes of many baby boomers were strange and temporary. One of my friends lived in a train depot.  We lived in a housing project that had grown up quickly during the war to house the workers for a nearby ammunition depot.  These remain, a half century later housing my aunt and other retirees in cinder block, connected homes.