Greed is Good Isn't It?

If there's anything we've learned the past few months, it's that Gordon Gekko (aka Michael Douglas) had it wrong when he said "Greed is Good.". The real point, ladies and gentleman, is that smart regulation, competition, risk based pricing, open markets and access to capital are the basics for businesses to thrive responsibly.

What's been missing is smart regulation and risk based pricing within the credit markets, specifically the mortgage and home equity industry. The intent here is not to assign blame, although anyone who had their had in the cookie jar should be held accountable. After all, if we had risk based pricing, one could argue that the present delinquncy and default rates should have been forecasted appropriately by banking analysts.

So is it any real surprise that if such lax standards are witnessed in a highly regulated industry, like home mortgage, that other credit industries would fare worse? I'm no economist so if there's something I'm missing, do share.

President-Elect: Barack Obama

Victory is sweet...

GO TV!

It's election day in the USA and it couldn't come soon enough. After 21 months and a primary election, it'll be nice to get past partisan bickering and divisive campaign tactics by McShame and just move forward. Of course, it'll be easier to move forward if my candidate, Barack Obama, should win.

As expected, there were long lines this morning and I can only wonder if these will stretch out further for those after work voters. I cast my ballot this morning after waiting just over an hour. It was nice to connect with folks who were eager to place their votes. You could almost sense those who were voting for the first time or the first time in a really long time. And of course, you will see those who choose to walk away because they don't have "time" to wait in line; nevermind the fact we only do this once every four years.

It's going to be impossible concentrating on anything but the election over the next 12 hours. All I can say is get ready to embrace change. Regardless of your views, just Get Out the Vote today peoples!

As the Markets Crumble

To say that it's been an interesting week on Wall Street, would be an understatement. The sell off in equities and the flight to safety isn't exactly news, but the sheer volume of activity yesterday was a phenomena. We typically see institutional investors, hedge fund managers, pension planners and others mitigating losses by loading up on Treasuries as quickly as possible before the portfolios they manage deteriorate further. We've known for a while the credit crunch consumers faced would lead to slow down in economic growth, despite the stimulus package sent out by the Bush administration. And because the US consumer drives 2/3 of our economy, that's exactly what happened. But what's happening now is further cause for concern. The Dow Jones was down well over 5% in one trading day--I don't believe we've seen that since the Great Depression. We've got our government interested in protecting the lives of corporations more than consumers. We've got Fannie and Freddie, the staples of the secondary market for mortgages, lacking sufficient capital to cover losses resulting in a takeover by Paulson and the US Treasury.

The only question I have is: what happened to laissez-fair economics? The current administration, the Republican Party and Adam Smith himself said the individual, and thus a corporation itself, will pursue its own gain as if led by an invisible hand. The companies in question took actions that drove their revenues through the roof during the peak of the housing market. And now that the market is contracting, they should deal with it. But we throw this view out the window because what's at risk are companies that have been around for over a 100 years? One could even argue that it's a matter of survival of the fittest and these firms should dissolve or be acquired. As a taxpayer, as a financial consultant and as a progressive democrat, I simply can not support these actions.

Change can't come soon enough.

Beijing Olympics Telecast

It's been over a week now since the Olympics have been covered by the networks of NBC. And yet again, the West Coast has been getting the short end of the stick when it comes to "live" telecasts. As a fan of the games, I've been deeply disappointed with the events that NBC and its affiliates has broadcast but more importantly, the time that the games have been shown.
Would it really hurt NBC financially, to broadcast events at 5pm Pacific rather than 8pm? Does the network realize that some of the core audience members include school-aged kids who have to be in bed by a certain time? Or for that matter, that a large population of viewers also have to work the next morning? I wanted to stay up to watch the womens gymnastics team finals last week but the caffeine, no-doz and sugar cookies couldn't keep me awake after midnight. Not to mention that it became difficult to wake up the next day to go to work.

As the second week continues, I've decided to watch only those finals that will be televised before 11pm PST and read about the rest the next morning. One less viewer won't hurt NBC but I'm exercising my opinion as best I can.

It's the Economy, Stupid

You can tell what's happening nationally by simply looking at what's transpiring locally...

For the past two weeks, something has been amiss with casual carpool and it finally became clear this morning. Not only has the line gotten longer, but the number of drivers has noticably decreased. The result, as with this morning, was a one hour commute door-to-door. But more importantly, it means that I've been getting in past 8am for work and that's not a good thing with early morning meetings. The explanation is simple--the price of gas. Given that the bay area has generally had higher fuel prices that the rest of the state, it's become clear the effect this is having on consumers. Couple that with the increase in the price of milk, other basics at Whole Foods or even Safeway, the cost of parking/taking Bart, and it serves as evidence the squeeze many are feeling.

My number finally arrived and I got into the car with the other 'poolers. We had a chatty driver and at some point the conversation turned to housing. He shared with us a story of his friend who was having trouble making the mortgage payment. His friend "John" had an interest only arm that was scheduleded to re-set at the end of the month. John worked with a mortgage broker who didn't properly explain what an I/O ARM was--the broker merely said that it was the type of mortgage John needed to get into his first home. The story didn't have a happy ending. John, like many folks these days, decided to walk away from the house and his mortgage payments all together.

We arrive in San Francisco, exit the car and go our separate ways. After logging onto the network and dialing into the conference call, my cell phone vibrates. Looks like mum was not able to convince Mamaji(uncle)about going to the Bollywood concert. Mamaji has been unemployed for over a year and the last thing he can afford to do is spend discretionary money on a concert--even if its Ash and Amitabh and Abishehk. I decide to take his place and of course, pay for the ticket.

Inflation, unemployment, the housing market, the credit crisis, call it what you will. At the end of the day, Bill Clinton said it best to the older Bush, "It's the Economy, Stupid."

Morcheeba is Back!

Barack Obama

I woke up this morning anxious to start the day. After stepping into the warmth of the sun in this new city, in my new neighborhood, the butterflies kicked into high gear. I held firmly onto the confirmation card--proof that I was registered to vote in the California Primary election. As a democrat, I looked forward to mulling over the slate of candidates running on our ticket for the presidential election. What other party, what other country, could you have a Latino, African American, Jewish AND female candidate all on the same ballot? My decision was easy and like most bay area progressives, Obama had won me over. His line at the Democrat National Convention 4 years earlier about, "...there's not a liberal America and a conservative America - there's the United States of America." along with his his views on politics as outlined in his book, "The Audicity of Hope" drew me in. You can read his entire DNC speech here:

As excited as I was voting for Obama, I had to acknowledge the fear of a "wasted vote." After all, Hillary Clinton had much greater name recognition and was considered the candidate to beat. But with politics as with personal choices, I wanted to ensure my decision was NOT based on fear. There were several friends who expressed an interest in Barack but they were afraid (primarily because of race) that he may lose to the Republican candidate in the national election. Basically, they had no faith that our fellow Americans would make a decision based on the best candidate. Pehaps my vote will be "wasted" as my vote for Ross in 1992. But there is something to be said for a candidate who can truly inspire and motivate a generation of young folks. He, along with Benazir, both give me hope for my country.

Benazir Bhutto

Thursday December 27th, 2007. I remember this date as most of us would birthdays or any national holiday. I woke up some 3.5 hours away from home at 11am shivering from the cold and alone in large house. I headed towards the kitchen to make a pot of tea and turned on the TV as a substitute for company. The gas flames provided such much needed heat to my blue nails and cramping hands. And as my body began to warm up, i began to to hear what was echoing from CNN. Something about an assisination....someone in a hospital and Bhutto. Its funny that your mind can put the pieces together but actually accepting what your mind concludes takes much longer. I ran over towards the set and cranked up the volume because even your ears can play tricks on you. "Benzir Bhutto sucuumbs to her wounds...Benazir Bhutto has been assisinated."

Rewind 19 odd years ago to 1988-1989 in a different setting and I can remember first hearing her name on TV. First hearing of a woman who became prime minister in the country that was once part of India. The woman who was leading a Muslim nation in the same vein that Indira had led a predominatly Hindu India at the start of the decade. Here in the US, sat this young impressionable naive girl thinking to herself, "Wow, if countries like India and Pakistan can elect female leaders, its only a matter of time before my country, the USA will do so too!" I remember how excited I was at the idea. I remember hoping that she was a better woman than Indira, who had massacred thousands of Sikhs at the Golden Temple during her term. I remember wondering if there were any minority communities in Pakistan, wondering if other religions were represented in Pakistan. Wondering and hoping she would unite her country and not divide it as Indira had.

Benazir Bhutto would be in and out of the news many times with her signature chunni covering her head as I grew up. She was not my hero or my role model, she represented something more important. I will always remember that brief moment in time when she gave me hope for my own country. Hope.