jude folly

part 1

part 2

As far and widely as I’ve read and listened to commentary about the economic crisis the country faces, this 60 Minutes story strikes me as the best explanation of what went wrong. Take note of this strand of the narrative: investment banks that sold the ‘repackaged’ mortagages of questionable credit also offered ‘credit default swaps‘ as a means to ‘insure’ investors against loss should the underlying investment result in default.

I took a look at the NYSE and NASDAQ exchanges, specifically their trading stats for Jan. 2008. Combined for that month, they executed 442.6 million trades, which would add up to a huge heap of money extracted from the securities industry. A penny-per-trade tax strikes me as far more reasonable, but I suspect the captains of corporations at Wall Street would squeal like stuck hogs in objection, all the same. Anyway, I sent a note to the U.S. Senate Committee on Banking, Finance & Urban Affairs to make the argument as follows:

Dear Committee Members:

Over the past week I’ve paid close attention to the news headlines depicting the financial crisis the United States faces. Of all the solutions bandied about, I’ve yet to hear anyone propose a penny-per-trade tax on the execution of any equity, mutual fund, option, futures, or credit default swap transaction.

If trading has been the very mechanism that distorted the value of our assets, shouldn’t it also be the process by which Wall Street lends a hand in resolving this crisis?

Respectfully yours,

Subject: $1-per-trade tax on securities (buying and selling) 

Dear Sen. Dodd,

I write to thank you for your efforts to hold Wall Street accountable over the current financial crisis this country faces. If I may be so bold as to suggest one phase of the solution to this potential economic cataclysm: a
$1-per-trade tax on buying and selling of securities (stock, bond, mutual fund, option, futures, credit default swaps, et. al.) that can go towards defraying the cost of the much-heralded $700 billion bailout.

If the investment banking and securities industries have had a part in bringing our economy to the edge of ruin, then perhaps it is a modest proposal to expect they participate in its salvaging.

Respectfully yours,

Jude Folly

Several years ago, when I had read Richard Branson’s profile (full disclosure: I am a Virgin Mobile customer) in Esquire’s recurring feature What I’ve Learned, the statement that jabbed me between the eyes was his headmaster’s parting words upon graduation: “Congratulations, Branson, I predict you will either go to prison or become a millionaire” (further support to the wisdom that the most brilliant people are incarcerated).

Not long after, I recall his cameo appearance on “Friends” as a souvenir vendor applauding Joey’s nutty determination to walk around London sporting a Dr. Suess ‘Cat in the Hat’ topper. Thereafter, I began to notice his television appearances, whether trying to break some hot air balloon flight record or launching space tourism - no matter the venue or occasion, he’s always flashing that toothy grin and never one to betray the starchy pallor you may notice in 90% of corporate executives.

As if to spite those who take exception to his risk-oriented approach to business, his ventures succeed just as well as the rest.

I’ll wager that for its importance this is the most under-reported story of the day. A Japanese manufacturer of electricity generation technologies, Genepax, has unveiled an automobile fueled by hydrogen processed from water.

More than anything else, this story should serve as a reminder that the global economy should not carry on captive to only one source of energy (ahem, petrolium). Yes, the water-mobile alone will not rehabilitate us from our dependence on oil. It will be a diversity of alternative energy sources the moves the economy past a petrolium-dominated system. I look forward to watching that transition unfold.

(pay no attention to the voice coming out of that box…)

By now you should have heard stories about ‘food rationing’ at the big box stores and the link to the global food crisis; while I would never want to diminish the staggering depth and scope of human hunger worldwide, I find the reportage about wholesale and retail rice supplies to err on the side of exaggeration–on a technicolor scale. 

If you’ve paid attention, you’ve heard the word “ration” and phrases like “not since World War II” bandied about, which evoke times of upheaval and uncertainty. There’s no denying how startling the increase in the price of rice  has been over the past year and that rice producing nations have limited exports to hold down the staple’s cost at home. Yet the hysteria journalists seem all too willing to stir up, I find quite tactless and annoying at best. As with oil, consumers should focus their ire on the forces at play in the distribution of rice and not so much on hype about dwindling supplies.