I Love Bill

"There's an urban legend that's gone round until no one is sure who it happened to, or if it happened at all. It was late one night, a few years ago, when a young man was walking through Union Square Park. He suddenly felt someone behind him, their hands over his eyes. When he turned in surprise, there was Bill Murray, his creased face leaning in close. Bill whispered, "No one is ever going to believe you," and then just walked away."

Why Not

Hello Michael,

Thank you for your interest in joining the Obama-Biden Administration. Within a few days, you will receive an email with a link to the more complete on-line application. Please be patient, as we are trying to respond promptly to the large number of people who are interested in working in the Administration.

Thanks.

The Obama-Biden Administration

Terms, part 2

I thought that applying to the Treasury Department's haphazard relief program as an individual, or first incorporating myself and then applying, would make for an interesting bit of humor and perhaps get me a form rejection letter as a memento, but being lazy I figured it wasn't worth the paperwork.

But lo and behold, although I've missed the deadline, the paperwork is a mere two pages. As DealBook points out, it's shorter than the average home mortgage loan application. And that's a bit of black humor in and of itself, and I don't care to try and top it.

Someone commented on the DealBook post, saying that Peter Solomon, since he's an investment banker and all, has no right to offer suggestions or critiques on the economy, and in fact has left his time-out corner without permission and will be consequently be banned from recess. In response, the government has decided to continue the trend of appointing officials with no supervision and giving them Russian-sounding titles like 'John P. Walters, Drug Czar' and 'Energy Czar' and 'Henry Paulson, Secretary of the Treasury, Dark Lord of the Troubled Asset Relief Program, Doom of Men and Elves Alike', and appoint Joe the Plumber to 'unclog America's stopped-up credit markets.'

Blame is stupid. TARP is stupid. Why a federal agency specifically tasked to deal with this hasn't been formed, as has been suggested both in Solomon's post above and by others is mindboggling.

Terms

Once upon a time I was a legal assistant for a major international law firm specializing in venture capital financings, large and small. A key element of these deals is the term sheet, a concise (relatively speaking) document containing definitions, amounts, goals, and other components of the deal. How much money, when, and under what conditions. Simple. They usually clocked in around 10 pages for an average deal, and could often be shorter. Larger deals or funds would instead have prospectuses with all sorts of research etc. But one shot investments - the term sheet is the starting point for all the other legal wrangling.

What does a short term sheet indicate? That the writer is using an economy of words? In the case of the term sheet for the Citigroup bailout, it's just another blank check. It indicates that the government either has high confidence in the value of the securities and divdends it is receiving from Citi, or, more likely, it simply doesn't want to muddy the water. It is a clear statement: 'We are rescuing you, and damn anyone who says otherwise. We also hope to receive dividends.'

What securities are being purchased? Wait, are we even purchasing distressed assets? I thought we were injecting captial now. Oh, we're doing both. Okay.

The term sheet targets assets relating to commericial and residential real estate "and their associated hedges...and other such assets" as the USG has agreed to purchase. Agreed? Where? The TARP? The only clear limit on anything is the amount, up to $306 billion. The rest of the terms are quite ordinary. There are fairly generous dividends, interest plus 300 basis points, it seems like a fair deal once you get past the part where they've done nothing to justify any of it. And comparing this to a corporate law firm is pretty pointless, given that the government has fiat power over the currency, which it is currently wielding like a broadsword in a nursery school. The government doesn't have to come up with a lot of milestones for Citi, or be specific about the executive compensation plan, because it's the government, okay?

I'll Miss the Chevy Volt

...but I don't think General Motors warrants a taxpayer (stop calling it a 'government' bailout, it's our money) rescue at this point. The tide seems to be against them. It does raise the question, if AIG was simply 'too big' to fail, why isn't GM the same? Put simply, GM has been in decline for years. It didn't get screwed by a sudden and total reversal in its credit default swaps, for which I'm still waiting to pillory someone, it got screwed by competition, declining domestic production, and not enough profit from its overseas ventures. There are many good arguments against preventing their bankruptcy, but perhaps this is the best.

Also, Baidu.com, the Chinese Google, has delisted unregistered pharma companies from its search results. Previously they had massively outranked the legit producers in most results. What does this say about Baidu? Nothing. Baidu is pretty good, even if its stock is stupidly overvalued and due for a crash. It simply goes to show what a god-awful mess the Chinese Internet is, and how easy it is for pirated goods in any industry to rise to the top. My question is, are these rankings determined purely by a Google-like algorithm, or are the fake companies paying their way to the top? Baidu has transparently allowed alteration of search results for money before, during the milk-powder scandal, so it's difficult to trust them. But I think this would be far more interesting if it was a consumer-driven trend and not Baidu being shady.

Also, CCTV doing investigative reporting? Pinch me?

Inventory, redux

This is the third incarnation of this blog, originally a slap-dash Geocities page and more recently an even less inspiring blogspot blog. I currently live in Beijing, China, where I previously have interned and worked, and currently study advanced Chinese and Chinese culture at Qinghua University. I am a 26 year old American. The rest of my resume is immaterial and quite ordinary. I am interested in American and Chinese history and literature, military history and affairs, philosophy, finance, strategy, humor and Cleveland Browns football. This blog will touch on all of those.

Eventually.