« March 25, 2009 | Main | March 27, 2009 »

March 26, 2009

'Daddy, tell me, what exactly is a derivative?'

Derivatives_beast_eats_miz_libert_2

The question in the headline up top is the one I've been asking ever since the whole house of cards collapsed.

I've read explanations by many of the world's best financial writers and columnists yet I still haven't a clue.

Finally, in today's Financial Times, noted economist James Carville — yes, that James Carville — looks behind the curtain and writes, "It is impossible to break the explanation of the [banking] crisis into a sound bite or image."

"The result is that it seems to the average American that the government is simply throwing excessive sums at banks and insurance companies. Now they read that the government is buying 'toxic assets'. I do not know about you but I would rather not buy toxic anything. As someone who has prided himself on being able to reduce complex problems to simple messages, I am totally stumped by derivatives."

Here's his essay.

•••••••••••••••

Daddy, tell me, what exactly is a derivative?

If nature abhors a vacuum, politics abhors complexity. There has been much discussion and some angst in the press lately about President Barack Obama’s supposed communication breakdown during the financial crisis. The breathless reports convey the impression that he has lost his communication skills altogether. One headline admonished: "Obama struggles as communicator."

Watching the staple Sunday-morning television shows, you would have thought that the assembled pontificators had a sense of nostalgia for the days of the campaign, when they admitted to feeling “shivers” up their legs when they listened to him, or soaked up the crowds of 50,000 swaying happily to his moving speeches about change we can believe in.

Last week, for example, the Politico wrote: “To Obama’s dismay, he is learning that successful presidential communications is only in part — often a fairly small part — about personal eloquence. It requires harnessing his words to a consistent strategy of public education.” Well, yes. But has Mr Obama really lost some of his skill as a communicator? I think not. He is every bit the master communicator he was in his heyday of early 2008.

The essential problem is not how good a communicator he is but the complexity of what he has to communicate. We can argue, ad nauseam, about which forum Mr Obama should use to level with the American people. Should it be on 60 Minutes or Jay Leno? Should he do fireside chats at the White House or predictions for the college sports season on ESPN? But that does not change what he has to communicate.

Recent US presidents have had an easier time honing their message to soundbites and images. President Ronald Reagan spoke about beefing up defence spending, conveniently flanked by soldiers in uniform. When President Bill Clinton was pushing for passage of the Deficit Reduction Act in 1993, deficit reduction, inflation and interest rates were something people understood. It was tangible and could be felt by consumers. President George W. Bush effectively used the September 11 attacks to frame the push for war as a moral choice between the evil of the terrorists and the inherent goodness of the American people.

Mr Obama had a relatively easy time communicating the value of the recent economic stimulus package. After all, we know what bridges look like. We use them every day. And we know that repairing infrastructure creates jobs.

The same can be said with the trickier concept of unemployment compensation insurance/benefits. We all know someone who has lost a job and needs the extra aid. We can argue about whether the ends justify the means (i.e. deficit spending) but the public can grasp the need for such a mechanism.

The same cannot be said, however, about the banking crisis that has handcuffed the US and world economies. It is impossible to break the explanation of the crisis into a sound bite or image.

The result is that it seems to the average American that the government is simply throwing excessive sums at banks and insurance companies. Now they read that the government is buying "toxic assets". I do not know about you but I would rather not buy toxic anything. As someone who has prided himself on being able to reduce complex problems to simple messages, I am totally stumped by derivatives.

After hours of research, they seem to be something rich, greedy bankers thought up to make more money selling them to other rich, greedy bankers. They did not understand what they were selling. Buyers did not understand what they were buying and insurers did not understand what they were insuring. Now the taxpayer is stuck with these things that no one can explain. It is notable that the single most eloquent quote of the crisis by a flummoxed Mr Bush came in the first bail-out debate when he said: “If money isn’t loosened up, this sucker could go down.” The problem is compounded by the fact that the only people who can explain them are the bankers who created them. It is like relying on a criminal to tell us how he committed a crime – and paying him to do it.

To be fair, I thought Mr Obama did a good job on Jay Leno explaining the AIG situation until he used the word “leverage” (translation for laymen: financial shovel that people use to dig themselves into a deeper hole), a term that escapes 97 per cent of the public. It is not that Mr Obama is not communicating as well; it is that what he is communicating is too complex to reduce to simple words, especially when in the last 40 years, the length of a TV soundbite has dropped by 40 seconds. That being said, try this experiment. Contact an engineer and ask him what a bridge is. Or contact a doctor and ask what surgery is. Then walk into your local bank and ask your friendly banker what a derivative is.

Good luck, Mr President.

March 26, 2009 at 04:01 PM | Permalink | Comments (1) | TrackBack

World's cheapest big-screen mini projector

Hljkho

All of a sudden the walls are coming down and the low-priced Goths are at the virtual gates.

Now comes Jakks Pacific with their EyeClops Mini Projector (above), slated to go on sale any day now for $99.

When it happens you'll be the second to know (I'll be the first, having ordered one).

From websites:

"Ever wish you could watch movies on your bedroom ceiling? Play video games outside in a backyard tent? Project the football game on the side of your house so the whole party can watch the big game outdoors? Now it's possible with the EyeClops Mini Projector, a big screen TV experience that fits in the palm of your hand."

"The EyeClops Mini Projector is pocket-sized and lightweight so you can take it anywhere indoors, outdoors and on-the-go, and it uses high-powered LED illumination to project movies, television shows, video games and more up to 70 inches in size from virtually any multi-media device: Blu-ray and DVD players, MP3 and video players, video game consoles — even digital cameras. The EyeClops Mini Projector has built-in speakers and provides up to 10 hours of entertainment using D batteries or unlimited power with the included DC adapter."

It's recommended for ages 8 and up so that means almost everyone reading qualifies.

I'm stoked.

This technology is advancing so fast that by next year it'll be embedded in iPhones and BlackBerrys.

March 26, 2009 at 03:01 PM | Permalink | Comments (3) | TrackBack

Nikolas Schiller gets a haircut from Jacqui Burger

Nikolas Shiller needs no introduction so I won't give him one.

Yesterday he sent me a link to a YouTube video of his recent haircut (above), writing in his email, "This morning I published a short time-lapse video of the haircut I had last [Tuesday, March 24] night. I grew my hair for over a year, so the cut was a bit drastic! I thought you might enjoy the 'mullet moment.'"

Yeah, Nick — me and about six thousand other people around the world.

Remember, when you send me something the default assumption here is that you want me to make you famous.

Well, that's not easy to do if I hide your light under a barrel, is it?

I wonder if Nick realizes that those hair clippings on the floor are solid gold, money in the bank.

Why, the 3-inch-long strand of hair pictured below,

Uiiriytji4

said to be that of Che Guevara, sold at auction in 2007 for $119,000.

You could look it up.

Nick's description of his haircut on YouTube: "After growing my hair out for the last year, I decided to film the long-awaited haircut in my living room using my digital camera's time-lapse recording function. While the haircut was taking place a couple of my housemates come home and watched the haircut — unaware that there was a camera recording.

••••••••••••••••••

Music: "Concerto for Flute and Orchestra in F Major"
Composed by Antonio Vivaldi
Performed by the Gardner Chamber Orchestra
Audio directed by flautist Paula Robison

March 26, 2009 at 02:01 PM | Permalink | Comments (4) | TrackBack

Myto Chair — by Konstantin Grcic

Ywr6yrwu
Made in Italy.

T2t525
Green, Blue, White, Orange

Ghfhh
or Black.

E56616
$495.

March 26, 2009 at 01:01 PM | Permalink | Comments (3) | TrackBack

U.S.A. Sitcom Map

Jipi-9

Res ipsa loquitur.

[via DanMeth.com and the calve-alier]

March 26, 2009 at 12:01 PM | Permalink | Comments (2) | TrackBack

Fruity Bowl

1hjedt   

From the website:

••••••••••••••••••

Fruity Bowl

3ghgh

169 pliable FDA-approved food-grade silicone rubber fingers sensually cradle fruit.

Fruity’s fingers yield to protect the fragile fruit while providing air circulation, extending its edible life and preventing bruising.

266mm (10.5”) x 266mm (10.5”) x 85mm (3.35”).

Designed by Terence Cooke.

••••••••••••••••••

4gfhjh

"While these pictures look great, Fruity has not yet been manufactured. The funding period for Fruity will last only 16 weeks beginning from its first sale. Within this time period, Fruity needs to sell a minimum of 1500 units to be manufactured. If Fruity is not fully funded within the 16 week period, your purchase is refunded within 4 days."

What an interesting approach to "just in time."

It'll be interesting to see if it catches on.

2dfgfg

$34 CAD.

[via DesignNotes and The Letter]

March 26, 2009 at 11:01 AM | Permalink | Comments (2) | TrackBack

Today's the day: Meet Isaac Mizrahi

Hu7u753u

That is, if you happen to be in Manhattan and have time to drop by Macy's Herald Square.

Details above.

Though I've never met him, what I've seen on TV and especially in "Unzipped,"

Uoiuouo

a very entertaining documentary about his life and times, makes me think he's probably just as likeable in person as on screen.

March 26, 2009 at 10:01 AM | Permalink | Comments (0) | TrackBack

Dow Jones Hanky — 'It's OK to cry'

1qewrjhk

100% linen.

16.5" x 16.5".

"Embroidered with the graph of the Dow Jones average for the past five years."

Giugig

$28 (custom pieces also available — "For $95, we'll embroider the graph of your stock portfolio").

March 26, 2009 at 09:01 AM | Permalink | Comments (1) | TrackBack

« March 25, 2009 | Main | March 27, 2009 »