Friday, July 11, 2008

Catharsis



My pics--a sunflower using Adobe CS2 to provide different filters. Taken today in the waning sunlight.

I found great beauty in the imperfection of this sunflower.












Dictionary.com defines catharsis as follows:

ca·thar·sis Purgation, especially for the digestive system.
  • A purifying or figurative cleansing of the emotions, especially pity and fear, described by Aristotle as an effect of tragic drama on its audience.
  • A release of emotional tension, as after an overwhelming experience, that restores or refreshes the spirit.
  • Psychology
    1. A technique used to relieve tension and anxiety by bringing repressed feelings and fears to consciousness.
    2. The therapeutic result of this process; abreaction.
  • ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    My family has abandoned me this evening. The men folk have gone to something that involves racing cars. My daughter is doing who knows what.

    Today is a very important day for me. Hopefully, you'll not think I'm a nut. First off I'm pissed off beyond anyone's (even my own) ability to measure. Why? Because here we are on July 11, 2008 and we've not been deprived of an honest objective opinion about the depth of this credit crisis.

    When I saw Jim Cramer on CNBC as some supposed "expert" I totally went over the edge. First, he failed to see any of this coming. He was extolling the virtues of WFC and WB for quite some time. I turned the TV off. I've so disgusted with him and his clown antics, I have no plans to renew my Real Money subscription though I adore the folks on Rev Shark's blog. Another TH, Second, Diane Swonk, who is repeatedly trotted out on CNBC (though I think that she's very smart and articulate) was positively patronizing about the breadth and depth of the credit crisis last Spring-I've still not forgiven her--and why she is still a "go-to" person despite this error is a mystery . Don't even get me started on Larry Kudlow. And Paulson and Bernanke pegged the losses at no more than $50B--I think that we'll ring the bell and go beyond at $400B. Whose got a ticker for this mess. Where is there an objective, credible opinion on any of this? (I realize that I did a first, second and become sidetracked).

    I'm outraged--spittingly, cussingly, hissingly, outraged, that a firm such as Goldman Sachs can (1) underwrite and sell these CDO's to investors with

    • donor money such as not for profits, church and educational institutions;
    • municipalities to include public works;
    • public pension plans;
    • privat pension plans; and
    • other qualified investors.
    I'm sure that there are others that I've left out, but you get my point.

    I try not to be a whiner. I find whining unattractive both physically and intellectually. Accordingly, this is the last whiney post on the matter that you will see from me. BUT.....I plan to figure out a way to devote my time and talent toward ensuring that this sort of thing is not perpetrated upon innocent investors.

    You expect the people advising you about your money--we are talking about deep fiduciary and trust issues here--to be working on YOUR behalf--NOT on the behalf of lining their filthy, bulging pockets with additional fees at YOUR expense.

    Many are shuddering about taxpayer bailouts etc. "Let them fail" is the chant. My friends, if they are allowed to fail it imperils stuff you expect to be safe: your retirement, your bank relationship, your money market, your Social Security, your Medicare.

    I can honestly say that I've NEVER been more angry nor more moved in my life. (But is that such a bad thing?!) Hence, I've entitled my post as Catharsis. I had it today. Angry, pre-menopausal women are very dangerous when provoked! (But some of you may already know that!).

    10 comments:

    nice said...

    (see link to latest Don Coxe report at bottom)

    --

    Leisa

    Isn't nature both beautiful and intelligent?

    Ever watch sunflowers as they turn and track the sun?

    The pattern of the little flowers in the head of the sunflower is a spiral which can be expressed as a mathematical formula where the angles are related by the golden ratio - Fibonacci once again!

    Everything has its pattern...

    nice

    --

    Here's Don Coxe's latest report
    (page 11) - if you or your readers are interested..

    http://tinyurl.com/58d9ye

    Anonymous said...

    WOW I can feel the heat a couple of miles away.

    V6

    It really has been nasty Leisa, but
    I think we are in for more of the same. Monday I met with a local
    bank official to bring to a close
    some past business. Before I left his office I asked the question,"when do we start to see an end to this credit crisis".
    Without any hesitation or blinking an eye he said Spring 2010 at best.

    Leisa said...

    NG--Thanks for the Don Coxe link. Tree branches and snail shells also share the secret Fib ratios. I occasionally put Fib retracements/fans on my charts, but I don't pretend to have developed a comfortable working relationship.

    V_6: 2010 would seem reasonable. If commodities can crack we might have a chance. Hope all is well. I'm a little calmer today, but no less resolved!

    Brad Baker said...

    You have to keep in mind that our news in this country no longer is free to tell the real story. If the story is too alarming to the public the FCC tells them to tone it down or suffer the results of being fined beyond belief, along with our economy has our rights also been dried up by this administration and others in Washington and else where!

    Leisa said...

    Brad I would hope so much that we do not have such muzzles on our press! I'm still and idealist (though NO idealogue).

    Anonymous said...

    Reading recently about the 1984Continental Illinois (CI) bailout, I learned something interesting.

    When the FDIC was trying to find a buyer for the bank, one of the prospect's officials asked to review any 10 CI loans at random. When they did, they reported that every single loan was so badly underwritten -- without exception, the examiners found that each represented a foolish, needless risk taken by CI - that the talks ended instantly.

    In the end, as we all know, there was no willing takeover candidates for CI. The bank was taken over by the FDIC aka as we, the humble taxpayers.

    I have discussed the following idea for solving this problem with several people. It's simple, so I'm looking for its flaws. Here goes:

    Banks' be required to have insurance protection, but by this, I mean REAL insurance protection, not government "insurance" protection: bureaucrats never have any skin in these games.

    How would it work? Lots of possible ways. Maybe the bank pays premiums to one or to several insurers. Maybe individuals buy their own insurance and several different companies compete for that business. Also, banks (or individuals) could decide the amount of coverage they want.

    Why would this work AND be better than our current no-one-is-really-accountable-and-the-taxpayers-always-pay system?

    The insurers, anxious to avoid paying claims, will be diligent, frequent, constant auditors. The banks themselves are anxious about a different matter: having good ratings with the insurers to ensure lower premiums. Thus, they would strive to act in a manner that could only be described as SSC: "super sqeaky-clean". After all, nothing would be/could be worse than an insurer announcing that a bank's underwriting standards force it to increase premiums.

    This approach keeps the government (which never manages these things well anyway) out of the picture -- and, in the end, out of our pockets. And, of course, this approach takes the moral hazard issue off the table.

    Thoughts?

    ~Nona

    Leisa said...

    Nona: think that the current bank regulatory system works pretty well. As we've seen with the private insurance industry, they've no ability to price nor manage risk.

    What makes our system appear to be strong is the government's standing behind the banking system. The current debacle in the private sector with the CDO's and CDS's proves to me that the private sector does a pretty poor job of managing this stuff. And this is a self-regulated system with a premium system that you are suggesting. We can see that quickly gets preempted by greed and graft. And if this same situation were in place (run amok) with our current banking system, there would be a run on the banks.

    So I say, no thinks to private industry in managing our country's financial system. The taxapayer ultimately pays one way or another.

    We see now that there is no REAL insurance protection. What we have not seen is how that is going to play out if the frequency and magnitude of expected claims is so far outside the model that the capital ratios gets skewered.

    Anonymous said...

    L-

    Placed a portion of my long term position Friday. I will buy this in tranches as we decline. 2010 has ALWAYS been my position as to when the secular bear reaches its lows.

    Trading account is 3% off.

    MarkM

    Leisa said...

    MarkM--How nice to see you. My forest pansy is doing beautifully! It is now a year old. Don't be a stranger!

    Anonymous said...

    I am off having my midlife crisis.:)

    I don't appreciate fast cars and don't have the energy for fast women so I have hired a vocal coach with the aim of hitting the recording studio in the fall. I sang when I was in my 20s and got the itch for it again. I sound a little bit like the lead singer for Maroon 5, if you keep up with the current stuff. Beats watching these markets.

    MarkM