So much for branch banking?

If your town is like mine, then you've watched the unbridled, almost comical expansion of bank branches on your version of Main Street over the past few years. As small shops have reluctantly given way to an ever more common set of bank branches and restaurants - which, ironically, are diametrically opposed in terms of customer traffic -- banks close early and don't retain customers in the area to go to the restaurants (with the ridiculous exception of CommerceBank that seems to be open 24x7). So in my town and its nearest neighbor have accepted a likely insane amount of rent from banks - that could afford it not long ago - to open up an ever expanding number of branches to "serve us better".

And then the banks imploded.

Now, WaMu is part of JP Morgan Chase (Bank of New York etc.); Wachovia today sold itself for $1/share to Citigroup. Who's next? Experts say the smaller banks (e.g., Hudson City, for example, which was smart enough NOT to be destroyed by greed oriented and risk ignorant lending practices) may have to sell themselves to be able to compete with the now three US majors. In either case, through bankruptcy or sale, branches will close. Redundant branches simply will not be retained. Jobs will be lost. And storefronts will once again be empty, victims of both the banking insanity and landlord greed.

I can see a branch or two closing in my town, the same (if not more) in the next town. What will replace them? Already, non-banks and non-restaurants have closed, and while Starbucks seems to be holding on, somewhat, lack of pedestrian traffic (from banks and stores) can't help and I guess we can't have more than, say, two Starbucks per block in the suburbs. More restaurants? Who can afford them (oh, several in our area are being converted to family friendly burger places since few have money to support an ongoing $100 per plate dinner out habit)? Wait! Nail salons! Nail salons seem to be immune to...oh, wait. Less expendable cash and less dinners...hmm, that doesn't bode well. Hardware stores? Less home refurbishment and less home building - nope.

Clearly, Main Street is being impacted by Wall Street. However, short-sightedness on Main Street has contributed to its own issues.

NOW I'm pissed...

Oil hits >$140 a barrel and the price at the pump nears $5...OK, I took it in stride.

They closed one of my Starbucks locations. Big deal, there are 6 more within walking distance I can get to.

The swim is cancelled at the World AG Triathlon Championships AND they screw up the results, pretty much wasting the time and effort I put into the race. Sucks, but I had another race two weeks later and moved on.

But today, the fun folks at Hasbro and Mattel have really pissed me off. They have caused the shut down of Scrabulous, a Scrabble-like application on Facebook. Apparently, this is the second time they've done this - they killed a Google maps version of Risk last year (?). They'd threatened such action against Scrabulous since a suit was filed back in January, but everyone kept playing and the Indian brothers that created Scrabulous continued to play their hands (er, tiles).

Today, I signed on to Scrabulous and found a message telling me that it has been turned off. How else am I supposed to waste time between (OK, sometimes during) phone calls and work assignments? How else am I supposed to prove (or disprove) my intellectual superiority among friends?

This is a pretty dumb move by Hasbro/Mattel and flies in the face of what most organizations have learned about social networking and the nature of the Internet. OK, the brothers generate some $25,000 per month with Scrabulous. But - BIG DEAL!! How many times did I think of Scrabble before playing Scrabulous? Um....NONE!! Not in the last 5-10 years, anyway. So brighter minds might have approached Scrabulous more openly, tried to capitalize on their success, done cross-promotion, bought them out, etc. All this does is create ill will -- and TAKES AWAY SOMETHING I LIKE WITH NO SUBSTITUTE!

Basically, this sucks. I'd tell you the point value of "sucks", but my memory isn't that good.

Review of "The Dark Knight"

Movie reviews are new for this blog, but what the heck. Since I wrote it for Fandango, I figured I might as well share it.

The Dark (and Long) Knight
It's not often a 2:30 movie can hold your attention throughout, but "The Dark Knight" delivers, largely on the purple shoulders of Heath Ledger's performance. Aaron Eckhardt (and some pretty good makeup) was surprisingly good, even Morgan Freeman and Michael Caine meshed nicely with Christian Bale's Bruce Wayne and Batman personas. OK, Batman's gravelly voice was just a bit annoying, but it was Heath Ledger's psychopathic Joker that drives this movie. Even when not on screen, you know he's lurking; you know he's going to be back and his mania pervades the way that all the characters act. The sound is edited well and while loud, punctuates the movie well; I got just a BIT tired of the "Joker" music that would accompany some psychopathic episiode of violence he would commit, but that's a nit. Physically, emotionally and vocally, Heath Ledger's Joker has to be one of THE best performed villians of all time. The good news is that the rest of the cast (even Gary Oldman) works, too.

US Olympic Committee to focus exclusively on 3-5 events

Colorado Springs, CO: To help concentrate its competitive and marketing energies more precisely for future Olympic competitions, the USOC will eliminate nearly all sports from its ranks in favor of focusing more heavily on the following events:

- Swimming: 400 IM
- Track and Field: 100M
- Gymnastics: Balance Beam (women)
- Basketball: Men

Noting that recently televised Olympic trials competitions have had pathetic TV ratings (of course, track and field is being shown between 11pm and 1am on the east coast) and that most Americanscan't sit still for more than 3 minutes at a stretch, the USOC will narrow its portfolio to three specific events it feels are "draws" plus one that is always a joy...the US Men's "Dream Team" for basketball.

"If only Michael Phelps could fence, sail or wrestle", said USOC spokesperson Mitch Desmond. "Then we'd be able to keep these events and populate them with other US athletes." Indeed, the USOC feels that there are about 3 amateur athletes that viewers can actually remember and be interested in, notwithstanding an occasional interest in beach volleyball.

Athletes in "lesser" sports that will be eliminated were said to be exploring dual citizenship or defection in order to ensure their ability to compete in Olympic games going forward.

Amy Winehouse and Nelson Mandela - What's Wrong With This Picture?

I can't be the only one that - having heard or seen the Nelson Mandela birthday concert - thinks that it is just a BIT incongruous that Amy Winehouse was one of the headliners for the man that pretty much ended Apartheid in South Africa, spent YEARS in jail because of it and then led his country and citizens forward.

OK, I realize she is an "entertainer" and I personally like her music, but after seeing 3/4 of Queen (plus a Freddie Mercury substitute - not sure whom it was - that was pretty good), Winehouse came on to lead the entire group of singers in a Nelson Mandela song. Not only could I not understand what she was saying, but her Michael Jackson-esque skirt grabbing (he grabbed something else, but you get my drift) and less than rhythmic swaying seemed just a bit...far gone.

I should feel sorry for her, you say, since she's been recently diagnosed with Emphysema, the result of smoking pretty much anything that passed near her lungs? Maybe, but not too much - it IS her own choice.

One would think, though, that a better representative could have been substituted despite her music chart leading status. I don't know...Britney wasn't available?

George "Malaprop" Bush strikes again

It's been a while between posts, but this was too rich to pass up. Here's a quote from our wonderful President today:

"No one would argue that this war has not come at a high cost in lives and treasure, but those costs are necessary when we consider the cost of a strategic victory for our enemies in Iraq," he said."

Now let's count how many strange and incorrect items there are in this short sentence:
1) "treasure"?? Was there treasure here or in Iraq? Was it gold dubloons? Is he a pirate?
2) I was stymied by that word, but then I actually read the sentence and noted that it SHOULD read that "No one would argue that this was HAS come at a high cost...", unless he feels that it has NOT come at a high cost, which could be the case if the treasure was, say, sand dollars or monopoly money and the lives lost were cartoon characters.
3) "When we consider the cost...for our enemies in Iraq"; should we not be considering the high cost of victory OVER our enemies in Iraq? Either that or he's sympathetic to how much Iraq is spending on the victory he is claiming we are approaching.

If I keep studying the sentence, I'd bet I can find a few more, though it could be a challenge given its length.

529 Plan Dichotomy

What's a 529 Plan? It's supposed to be a sheltered, equities-based investment and SAVINGS vehicle for parents to save for their kids' college educations. And that's pretty much what it is until the market sits on the precipice of disasater and you'd like to make sure that your kids' future educational dollars don't disappear. Guess what? Designed so the account holders can't wheel and deal - or trade continuously - in their accounts, 529s unfortunately also don't have any GUARANTEED savings options. You'd think that the government would allow some CDs to be mixed in to ensure that the balance can't erode, but NOOOO! EVERYTHING is at risk. And since you can only trade ONCE per year in a 529, once you make your bed, you're stuck in it, at least for that year.

Stupidity Crisis

Housing crisis?
There’s no housing crisis.
There’s a greed and stupidity crisis.
Let’s see…banks that historically were staffed by green eyeshaded guys that would scrutinize the lending of every penny that left the bank suddenly forgot how to do – or how to listen to – risk analysis and underwriting rules.
They created wonderful mortgage products that provided >100% of the value of a property, never taking into account whether the value of that property would rise or fall and severely underestimating (or ignoring) the actual ability of their clients to repay the loans.
They also created nice adjustable rate mortgages with huge rate escalations, prepayment penalties and a variety of other mechanisms to ensure that borrowers could not escape from the trap of ever-rising rates. Unfortunately, they also planned their financial well being around being able to reap the benefits of ever-increased payments.
But their clients either couldn’t understand the terms of the ARMs or they ignored them; their clients also didn’t think about what falling house prices might do to their ability to sell their properties and escape the escalation of their ARMs.
Meanwhile, brilliant investment bankers, looking for new and exciting ways to create money out of thin air, bought huge numbers of these mortgages (sub-prime mortgages, by the way, are now said to comprise 20% of all mortgages currently) and packaged them into securities based on the alleged predictable flow of money coming from the homeowners (these are called “asset-backed collateralized-debt obligations”, btw, though ironically, the assets don’t exist, the collateral is worthless and thus so is the debt, and all that’s left is the obligation).
By the way, a decent number of these ARMs were taken out by speculative investors that fully expected to be able to flip their properties before any rate increases might show up.
The bankers sold these securities to unwitting investors who also ignored the house of cards upon which they were built. Apparently, they sold quite a bit of them given the $10B write downs that several of the major investment banks have taken in the last couple quarters (we’re somewhere near $100B thus far with more exposure to go).
Meanwhile, rising interest rates and Father Time started to drive up the rates on the ARMs, and guess what? Their owners couldn’t make the payments and they began to default. Uh oh, no cash coming in to support the securitized loan packages, so their value suddenly drops precipitously (see: write downs). Meanwhile, the banking credit crisis created a need for cash, and as those who provided debt funding to the investment banks decided they wanted their cash back – suddenly – the investment banks didn’t have it.
Panic! Huge losses, overseas investment, stock markets plummeting, etc. Meanwhile, foreclosed homes are gathering dust and vermin, neighborhoods are being destroyed and people are even more poor than they were before (oh yeah, the majority of those targeted with sub-prime loans in the first place were minorities and the relatively poor; see various parts of Ohio; Detroit, Michigan; etc.).
…and we’re not out of it yet. It also appears that seemingly scrupulous bond insurers (e.g., MBIA) have also been caught with their pants down or, perhaps, their underwriting rulebooks closed. These guys insured the ridiculous securitized sub-prime loans such that the investors buying them could take comfort in their high rating. However, these guys also apparently ignored the basic reasoning for having sub-prime loans in the first place – that the people taking them out are CREDIT RISKS!! (There’s definitely a Sam Kinison routine in here somewhere.)
Now, because the investment banks have largely failed, the insurance policies come into play to the tune of roughly $500B. MBIA and company simply don’t have the cash to cover that bill, and unless the government steps in to “help”, we could all be screwed.

Epilogue...I actually wrote this about a week ago. This morning, BofA and Wachovia announced horrific financial results that caused international markets to plummet even MORE than they did yesterday; at 8 am, US Index futures were down significantly, indicating a multi-hundred point loss at the opening of the market. Great...

Dreaming of an Open Source Airplane

Today, amid the ongoing financial ruin of the country, Boeing announced that it had hit further delays in building and ultimately delivering its 787 Dreamliner, the airplane it heavily promoted to compete with Airbus' even later A350.

To (presumably) reduce risk and defray costs, Boeing outsourced the manufacture of a significant number of components to a wide range of suppliers around the globe. Unfortunately, they did not deliver. Here's what happened according to the WSJ:

"To save money, Boeing gave unprecedented control over the development of key parts of the 787 to a wide network of suppliers world-wide. In many cases, those suppliers stumbled badly, leading to months of parts shortages and technical problems. Since Sept. 2007, Boeing has twice announced delays as the schedule has slipped from the original plan to deliver the first airplane in May 2008. In October, Boeing said that first delivery had been pushed back until November or December of 2008."

So, Boeing offered a carrot to numerous suppliers, many of whom apparently either misjudged badly or lied blatantly about their ability to deliver. To me, this is the major problem inherent with open source development - not necessarily the quality, but the fact that your open source developers are not locked to work in your schedule. Also, you have little or no control over what and how quickly they produce. So when it's a commodity function or product, outsource away! When it's a complex or critical program or product, I'd suggest thinking twice.