Down Jones

Dow Jones Industrial Average
Index Value: 8,273.58
Trade Time: Nov 17
Change: Down 223.73 (2.63%)
Prev Close: 8,497.31
Open: 8,494.84
Day's Range: 8246.89 - 8571.30
52wk Range: 7,773.71 - 13,850.90

The market has been up and down in daily 300 point swings for two months now, so most of those numbers don't mean much—it could be up 3% tomorrow. But that bottom row is pretty shocking though: The Dow Jones is worth HALF what it was a year ago. Half.

Michael Lewis (of Moneyball fame) has a great piece on the End of Wall Street in Portfolio. Lewis literally wrote the book on what is happening now—twenty years ago. From the article [emphasis mine]:

He called Standard & Poor’s and asked what would happen to default rates if real estate prices fell. The man at S&P couldn’t say; its model for home prices had no ability to accept a negative number. “They were just assuming home prices would keep going up,” Eisman says.

Later:

Now he saw. There weren’t enough Americans with shitty credit taking out loans to satisfy investors’ appetite for the end product. The firms used Eisman’s bet to synthesize more of them. Here, then, was the difference between fantasy finance and fantasy football: When a fantasy player drafts Peyton Manning, he doesn’t create a second Peyton Manning to inflate the league’s stats. But when Eisman bought a credit-default swap, he enabled Deutsche Bank to create another bond identical in every respect but one to the original. The only difference was that there was no actual homebuyer or borrower. The only assets backing the bonds were the side bets Eisman and others made with firms like Goldman Sachs. Eisman, in effect, was paying to Goldman the interest on a subprime mortgage. In fact, there was no mortgage at all. “They weren’t satisfied getting lots of unqualified borrowers to borrow money to buy a house they couldn’t afford,” Eisman says. “They were creating them out of whole cloth. One hundred times over! That’s why the losses are so much greater than the loans. But that’s when I realized they needed us to keep the machine running. I was like, This is allowed?”

That these fucking thieves are getting bailed out, but the auto industry is left to rot is—in context—a goddamn travesty.

[h/t Angelos for the Lewis link]

"As Good As It's Gonna Get..."

NOTE: This is a post I had 95% finished last week, that got pushed aside by my anger over the Scaife "Race Card." That has NOT subsided—there is no possible way I will EVER regain this gracious of a position regarding Hillary or her political future. But, I decided to put it up as it reflects the way I think the party honchos like Dean, Leahy and others should handle Clinton. To his credit, Obama has been more than gracious regarding Hillary continuing her run [video], and she has repaid him with nothing but lies and misrepresentations.

At Shakes last week there were a few threads (here and here) reacting to calls for Hillary Clinton to pull out of the race. By and large, I think the denizens of Shakesville are too protective of Clinton, and too reactive to everything said about her, but after some objection from me and others, they had a point about Kristoff's column last week, and Leahy's remarks a day or two later. Care should be taken with language about Hillary's "right" to remain in the race.

I wish the race were over, but I think there is no point in calling for her to drop out from party bigwigs until reassessing after PA. I think if she wins convincingly there, she has a point (however mathematically futile) about remaining at least through the conclusions of the primaries.

If Obama beats her in PA, or she wins narrowly and fails to pick up any ground on him in the overall delegate total, I think calls for unifying behind one candidate are in order. I just wish people would be a little more Dean-esque (neutral) when making those comments.

I certainly am under no obligation to be even-handed, and won't be. My respect for Clinton after the last two months has evaporated, and I have a vested interest in Obama winning. I DON'T think the campaigns have behaved comparably at all and I think any attempts to equate Clinton(Penn)'s "kitchen sink" strategy with Obama's comparatively high(er)-road response is inaccurate and irresponsible.

EXTRA CREDIT: The title and first label are a movie quote...