Detention center - new baby

1. I brought a book on panda bears to the detention center today. Nobody wanted to read it, but it got a good laugh. They are starting to like me.

2. Melissa and I are expecting our fourth child. Sometime around June, I think.

I'm going to run a marathon and learn how to post pictures on my blog

All right. Here is the picture. From now on, this blog is going to have lots and lots of pictures. This is the movie I'll be screening at the library this weekend.Last week I screened this

An eerie little movie, about zombies rising from the Great Salt Lake and dancing in the Saltair pavilion. I loved it. The teen sitting next to me said it was the most boring movie ever.

Now, I'll get busy running a marathon. My first act will be to eat some raisins and vanilla flavored yogurt. Then a wheat bagel.

I love Alec Baldwin

They savaged him on Team America but I don't care. I really think he is the best actor of his generation.

I especially like his most recent blog post about working with Sarah Palin on Saturday Night Live. He is a classy individual.
http://www.huffingtonpost.com/alec-baldwin/palin-on-isnli-what-did-y_b_136186.html

Did you know that he offered to voice his character on Team America? I wish the South Park guys had let him.

William Carlos Williams was a bad roommate

http://www.yankeepotroast.org/archives/2008/09/william_carlos.html

Whoops

Thought I'd written a post yesterday, but it didn't go through. Perhaps I didn't hit send. I don't know. So today's post will have to do for yesterday and today. I've said it before and I'll say it again. Vern is the best writer on the internet. Lots of cussing though, so be careful. www.geocities.com/outlawvern . Today he wrote an excellent review of 1401.

Imagine the worst smell in the world

http://blog.foreignpolicy.com/node/9949

My current obsession

is finding dvd sales on Amazon.com that I can show at the library. I just bought a set of 14 Alfred Hitchcock movies for 50 dollars. That's like 3.50 a movie or something. Next month I'm going to show Rear Window along with Duck Soup, The Band Wagon and Winchester 73. I can't wait. This weekend Melissa and I start work on the poster.

Tomorrow we watch Wait Until Dark. I hope there is a big turn out.

I can't say I 'love' my job. But I absolutely 'love' parts of it. And I tolerate the other stuff.

Eli is scared I'm going to lose my job

We haven't discussed unemployment with our children but yesterday Eli asked if I was going to get fired. Perhaps he'd heard stuff on the news or maybe kids at school were talking. I don't know.
"I don't think so," I said.
He scrunched up his forehead in thought and said, "Don't drop any books."

My friend explains the economic crisis

My friend, Brett Myers, is a professor at Purdue, has a PHD in Finance and is generally one of the smartest guys I know. Recently I asked him what was happening with the crisis. He explained it so even an economic dolt like myself could understand. No doubt someday he will publish an easy and fun to read book on finance and make a tidy sum.

With his permission, here is the e-mail he sent. Just remember, I published him first.

The financial crisis we are currently in is the result of several things:

a) People borrowed more than they could afford, and banks were willing to lend to people who not qualified. Further, banks did a lot of 100% financing.
b) These loans were packaged into bonds (called mortgage backed securities, MBS) and sold to banks, investment funds, pension funds, etc.
c) A lot of people thought they were safe investments and they sold for a high price. By "safe" I mean that most people don't default on their home loans and when they do, the lender can posess the house and sell it and get all its money back so investors didn't think they had much to worry about.
d) People *did* start to default on their homes. Further, they did so when home prices were falling dramatically. So many of these MBS securities were hit by high default rates and lower than expected recovery rates (because home values had fallen and many people didn't have much equity in their house so the lenders got hit with the full loss).
e) In all, MBS lost around 10-20% of their value (guessing here). This is not so bad.
f) However, many banks and MBS owners used leverage with their MBS positions. For example, I might have borrowed money 10:1 to buy "safe" MBS securities, or used $10 worth of MBS securities as collateral for $100 in loans (i.e., leverage), so losses were not small, but very large. Investment banks are sometimes levered 30:1 so they are particularly screwed.
g) this is like putting $10,000 down on a $100,000 house. You have a 10:1 loan, or are levered 10:1. If the house falls in value to $80,000, the house itself had a -20% return. However, you invested $10,000 in home equity, but now have -$10,000 in equity so you lost -200%.
h) So basically, banks lost a ton of money because they were being a little risky with debt.

So whose to blame?

a) Homeowners for borrowing too much
b) Lenders for lending too much
c) Traders and investment bankers for being greedy
d) Unfortunate chance; home values fell.
e) Ratings agencies that rated MBS as safe.

Take away any of the above ingredients and things would have been a lot better. Right now the govt is contemplating buying all the bad MBS so banks can get these questionable securities off their balance sheets. This is important because if banks don't trust the collateral each has, or if banks don't meet certain capital requirements, lending comes to a halt and that will screw basically everybody from farmers to doctors to engineers. Everyone can be screwed. I don't think this is the most likely outcome, but an uncomfortably high possibility.

A new Camille Paglia column

Every third column she answers readers questions. A couple of Mormons wrote in.

http://www.salon.com/opinion/paglia/2008/10/08/palin/

Eli and all the cigarette tar in his lungs

1. I started the movie program with I Walked With a Zombie. I probably should have chosen something more crowd pleasing and a little less high brow. But it went pretty good. I liked it. All the middle school aged children walked out.

2. Eli is terrified by cigarette smoke. He's been learning about it in school. Last Thursday, he walked out of school with his chin on his chest. He sat in the front seat trying not to cry. It took him several seconds to compose himself to tell me what was the problem.

It turns out the other day he'd walked near a smoker and some of the smoke got in his mouth. His lungs were now full of black stuff.

I tenderly explained to him that smoking is not all that bad. That is a message I never thought I'd have to teach my son. But there you go - he's learned it. Cigarette smoke is not that bad for you.