Sunday, January 31, 2016


The Pew Research people tell us that  the 75.3 million Millennials will overtake the 74.9 million Boomers starting this year. But those born between 1981 and 1997 will experience the very same challenges as those born between 1946 and 1964.  Japan, the US, China, Greece, and Germany are all projected to have over 22% of their population aged 65 or more by 2020.

The more important question will be whether future generations learn anything from the experiences of the Boomers, because Millennials will age just like Boomers.

They too will experience vision limitations, hearing problems (probably to an even greater degree given their preferences for loud music), as well as physical disabilities.  So, will we start to put solutions into place with input from Boomers or will we stall until Millennials hit the tarmac and need these very same innovations?

Let's just look at vision issues created by our tradition print media. Magazines and newspapers are digging their own graves with both print and online versions. This day's delivery brings an alumni/ae magazine with mention of interesting innovations in brain research.  Sorry guys, Boomers can't read it.  Your editors are so cute: they think printing in an orange and yellow font on white or light grey backgrounds are "cute". It's as good as invisible.

It's like green print on a brown background to the colorblind. And by the way, there are about 8% of all men who are colorblind compared to about 1 out of 200 women. Even worse are the columns of text in white font against an orange or yellow background. Then there's the more exciting pages with a full black background and text in purple, blue, or green. What ARE you people thinking? Did you test this stuff with anyone or did you just assume that any color is good color?

Well, you're wrong. It's illegible at best and painful at worst. All of today's magazines print in Arial or Helvetica font - skinny and small at 10 or 11 point. Look at some of the research about the softening effects of serif lettering. And consider occasional emboldening.

If you are a newspaper, try to put a little more ink on the pads, cheapskates! And on the Comics, why are you putting black lettering on green or purple backgrounds? And why are you so cheap that you can't spread the comics over two pages and give a little room to each comic panel instead of cramming them all into one page?

Do you get any feedback on your print media from focus groups? Or don't you care? If you DID care, you might actually consider coming out with a large print version. At least you would stop the worst of the poor quality print display.  Please!!!

Perhaps this is a topic for a new alumni/a  magazine issue - one that recognizes the challenges of vision faced by aging populations.

Thursday, December 24, 2015

What Are You Reading?

America's Bank: The Epic Struggle to Create the Federal Reserve (October 20, 2015)
Roger Lowenstein
This tells the story of the fourth founding of the Bank of the United States, this time called the Federal Reserve System.  It tells how Sen. Nelson W. Aldrich (R-RI) organized a surreptitious meeting on Jekyl Island (Brunswick, GA) to launch the U.S. central bank after having studied counterparts in Europe and realizing how far behand the times the American economy remained.
America’s Bank by Roger Lowenstein October 2013 New York Times:
The Hush-Hush Founding of the Fed by Roger Lowenstein LA Times November 2, 2014

The End of Wall Street (March 29, 2011) Roger Lowenstein
A blow-by-blow account of the 2007-2008 collapse precipitated by the subprime lending market.
Panoramic Hindsight on Wall St. Disaster by Janet Maslin New York Times March 31, 2010

Origins of the Crash: The Great Bubble and Its Undoing (December 28, 2004) Roger Lowenstein
Story of the events leading up to the doc-com bubble and its bursting.

When Genius Failed: The Rise and Fall of Long-Term Capital Management (October 9, 2001)
Roger Lowenstein

Alexander Hamilton (March 29, 2005) Ron Chernow 
Story of the life of America’s financial founder, among many other institutions.

The Death of the Banker: The Decline and Fall of the Great Financial Dynasties and the Triumph of the Small Investor (Vintage: July 14, 1997) Ron Chernow 

Wall Street Under Oath: The Story of Our Modern Money Changers (Library of Money and Banking History) (A. M. Kelley reissue – 1973) Ferdinand Pecora
Personal memoir of Ferdinand Pecora, chief counsel of the U.S. Senate Banking and Currency Committee. His private retelling of the Senate investigation into the causes and cures of the Great Depression. The book sells for $500 on Amazon, $1,000 for a used copy.

The Pecora Report: The 1934 Report on the Practices of Stock Exchanges from the "Pecora Commission" (September 1, 2009)
Report of the U.S. Senate Committee on Banking and Currency. Available for $41.00 on Amazon.

The History of the Standard Oil Company by Ida Tarbell (1904) which appeared originally in McClure Magazine in a serialized version from 1902 through 1904.

Monday, November 30, 2015

This is Why We Need Tough Regulators

There actually IS a book called This Time is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart and Kenneth Rogoff (October 2009):

I just finished reading Roger Lowenstein’s book, The End of Wall St. (April 2010) which tells the story of the subprime mortgage meltdown, the collapse of Wall Street’s storied firms, and the bailout that saved the banks, the thrifts, and the last of the mortgage market.

For those who REALLY DO believe that “this time is different,” take a very brief look at all the dregs that were left after the combined stupidity of the subprime market fiasco of 2007-2010.  And this does not include all of the economic collapse that has persisted to date.

In 2004, the U.S. housing market peaked with homeownership at 70%. By the 4th quarter of 2005, housing prices had fallen by 40%.

During February and March 2007, more than 25 subprime lenders filed for bankruptcy. In April, well-known New Century Financial also filed for bankruptcy.

July 17, 2007 - Bear Stearns High-Grade Structured Credit Fund had lost more than 90% of its $1 billion value, while the Bear Stearns High-Grade Structured Credit Enhanced Leveraged Fund had lost virtually all of its $600 million investor capital.

July 31, 2007 – The two Bear Stearns hedge funds filed for Chapter 15 bankruptcy. Bear Stearns effectively wound down the funds and liquidated all of its holdings. Bear Stearns, an investment bank and brokerage firm, was acquired by JPMorgan Chase in March 2008.

September 6, 2008: Fannie Mae and Freddie Mac were in financial trouble, and the Federal Housing Finance Agency (FHFA) put the companies into “conservatorship”

September 15, 2008, Lehman Brothers filed for the largest bankruptcy in US history: $639 billion in assets and $619 billion in debt; 25,000 people lost their jobs. From 2003 to 2004, Lehman Brothers acquired 5 mortgage lending companies including two subprime lenders specializing in “Alt-A” loans (low documentation).

July 11, 2008 – IndyMac bank collapsed: taken over by the Office of Thrift Supervision and transferred to the Federal Deposit Insurance Corp.; the largest thrift to fail since Continental Illinois in 1984

September 14, 2008 - Merrill Lynch was sold to Bank of America

September 16, 2008 – US Federal Reserve Bank gave American Investment Group (AIG), the world’s largest insurance company, a bailout of $85 billion in exchange for nearly 80% of the firm's equity. Ultimately the Fed and the US Treasury invested over $150 billion to save AIG.

Other bailouts:

September 21, 2008: Goldman Sachs and Morgan Stanley, the last two of the major investment banks still standing, convert from investment banks to bank holding companies in order to gain bailout funding from the Federal Reserve.

September 25, 2008: After a 10-day bank run, the Federal Deposit Insurance Corporation (FDIC) seized Washington Mutual, then the nation's largest savings and loan, which had been heavily exposed to subprime mortgage debt. Its assets were transferred to JPMorgan Chase 

September 29, 2008:  Mitsubishi UFJ Financial Group, Japan's largest bank, invested $9 billion in Morgan Stanley for a 21% share of the company; Morgan Stanley borrowed $107.3 billion from the Federal Reserve – the most of any US bank.

October 3, 2008 – National Economic Stabilization Act of 2008 (a reworked TARP bailout plan) was passed by Congress, creating a pool of $700 billion authorizing the US Secretary of the Treasury to purchase distressed assets, especially mortgage-backed securities.

January 2008, Bank of America acquired Countrywide for $4 billion
All the Devils Are Here: The Hidden History of the Financial Crisis by Bethany McLean and Joe Nocera (November 2010).

May 7, 2006, Herb and Marion Sandler sold Golden West Financial and its thrift, World Savings, to Wachovia Bank
December 31, 2008 – Wachovia was acquired by Wells Fargo

In 2000, J.P. Morgan & Co. Incorporated merged with The Chase Manhattan Corp., effectively combining four of the largest and oldest money center banking institutions in New York City (J.P. Morgan, Chase, Chemical and Manufacturers Hanover) into one firm under the name of J.P. Morgan Chase & Co.

In 2008, JPMorgan Chase & Co. acquired The Bear Stearns Companies Inc.
In 2008, JPMorgan Chase & Co. acquired the deposits, assets and certain liabilities of Washington Mutual's banking operations.

Citibank received $25 billion bailout from the TARP

Goldman Sachs received $10 billion from Warren Buffet plus $10 billion from TARP; including Federal Reserve loans, Goldman Sachs received $782 billion 

September 11, 2015 - Credit default swaps lawsuit brought by the Los Angeles County Employees Retirement Association, hedge funds, university endowments and others.
Twelve defendant banks are: Bank of America Corp., Barclays PLCBNP Paribas SA, Citigroup Inc., Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., HSBC Holdings PLC, J.P. Morgan Chase & Co., Morgan Stanley, Royal Bank of Scotland Group PLC, and UBS Group AG.

Plus two industry groups: the International Swaps and Derivatives Association and data provider Markit Group Ltd. 

Agreed to $1.87 billion settlement, one of the largest antitrust settlements, over allegations that they conspired to rig the market for credit derivatives.

So, please don't point to the brilliant quants in the remaining companies or to the incredibly naive regulators who were asleep at the wheel.  These are not very bright people -- none of them.  The smartest guys/gals in the room actually are the authors of the books that tell the real story after the second shoe dropped.  This is why we need Dodd-Frank, Sarbanes-Oxley, and a Federal Reserve System that is not strangled by political hacks.