Clean Government

I'm pretty fond of my local dry cleaning emporium, Fifth Avenue's own Economy Cleaners. They do reasonable alterations, are fast, and have by now learned to recognise me (I think Mrs. Cutesome's volumes of dry cleaning may have something to do with this). I sometimes wish they'd accept credit cards, and this longing has only increased as Betances Grocery's hours, and thus access to its ATM, have become more erratic.

The one thing I didn't like was this biggish 8x12 picture of Brooklyn's featured embarrassment Marty Markowitz on the wall when you walk in. Marty had gathered with a group of local businessmen, among whom the cleaner's owner was presumably numbered, on the steps of what was presumably City Hall.

You probably know by now that Marty likes cameras a lot. Certainly a lot more than trying to achieve something substantive during his time in office or asking difficult questions of developers and campaign contributors. But this picture is a classic.

Our local businessmen are stood stony-faced behind the speaker looking out into what might be a crowd. Not Marty, oh no. Marty catches sight of the camera, turns ninety degrees towards the source of putative publicity, and busts out a grin that looks like its been tucking into the merde with gusto. It's utterly inappropriate, if not quite on a par with the casual attire that Marty wore to the 9-11 firefighter funerals.

Anyhow, the picture's gone, with no obvious explanation. It could be that the anti-Atlantic Yards forces, fresh from their Arena Bagels victory, are now adopting a scorched earth approach to their opponents, or maybe the owner grew tired of the disrespect. I don't know. We tend to keep our discussions to collection dates and crease types.

Small post-script here. I had previously speculated aloud that top ninja-attack author Eric Van Lustbader might have fallen on hard times to accept the job of ghost-writing dead Robert Ludlum's latest books. Not a bit of it. Apparently he really likes the gig, and was a friend of Cap'n Bob's. My bad.

Brooklyn, Where The Weak Will Be Steamed And Beaten

Should I decide to venture beyond the air conditioning, then this weekend's rock pick is the New Lou Reeds and Mondo Topless at Magnetic Field, the home of stoner rock in Brooklyn. I'm not, to be honest, 100% sure of Mrs. Cutesome's attitude to all this, though

Cheap No More

Today will be as busy as yesterday, so the main improvement on yesterday's somewhat brusque post will be that this video is embedded. Pretty!

This post is somewhat premature, but I'm going to get it out there anyway. It will also prepare me for some of the arguments I will need to unleash when discussing next month's Sugarzine column's subject matter.



I've never been able to decide whether Faith No More's song "Everything's Ruined" was a fairly clever commentary on 1992-era capitalism, which was stuck in recession and still carrying memories from the 1987 crash, or a very clever way of using it to beat the baby boomer generation over the head with the fruits of their self-absorbtion.

Either way, it will make a fairly apt soundtrack to whatever hideousness emerges from the End Of Private Equity. Never mind the metal, just feel the Alphaville headlines. I have to assume I'm not the only ex-grunge kid that ended up writing about money, right?

Sucky SCRAM

Headline of the day:

Is Lindsay Lohan the new Robert Downey, Jr.?

Now that's the kind of informed pattern recognition I can relate to.

Wanted to embed some youtube video right here, but the video I had in mind has not made it up yet. I am upset, since I had assumed that any lazy or harried blogger could find a music video up there that expressed just what he was saying, embed it in his or her site, and make it look like they had actually posted something new.

Still, I found what I needed, at MTV.com, of all places, so everything is at right with the world. You'll just have to click:

Surgery - "Off The A List"

For an explanation of why this song is so lovely, and not just droll commentary on Ms. Lohan's condition, please visit this fine blog

Hmmm... Gross

There are some amusingly unpleasant conditions in debt markets at present, and these have much more potential to create economic shocks than the dollar's decline. Not that I'm not interested in the dollar's plunge - a few weeks back I transfered money over from the UK, back in the halcyon days when it was $2.025 to the pound. Sweet! Oh wait, it's now $2.06.

Still, if you read one dense piece of writing about the workings of financial markets today, make it this month's letter from famous bond investor Bill Gross.

I'm slightly happy at the fact that corporate debt is going to start getting more expensive, because it means less work for Mrs. Cutesome, who facilitates such things, and is perennially overworked, and slightly more for the maudlin group of European bankers that constitutes my beat.

But Mr. Gross sounds positively egalitarian, a man worth $1.2 billion urging his fellow plutocrats, much as Warren Buffett has, to pay more tax. He even gets this nice little zinger in:

What pretense to assert, as did Kenneth Griffin, recipient last year of more than $1 billion in compensation as manager of the Citadel Investment Group, that "the (current) income distribution has to stand. If the tax became too high, as a matter of principle I would not be working this hard." Right. In the same breath he tells Louis Uchitelle of The New York Times that the get-rich crowd "soon discover that wealth is not a particularly satisfying outcome." The team at Citadel, he claims, "loves the problems they work on and the challenges inherent to their business." Oh what a delicate/tangled web we weave sir.

He goes on to look at the effects of the collapse in house prices, increase in mortgage defaults, difficulties with the performance of securities backed by mortgages, and the difficulties at some funds that invest in these. He thinks, as most commentators have by now decided, that it will soon become much more expensive for corporations, whether public, private or private equity, to borrow money.

He also thinks, and offers up some figures, to support the idea that it is presently too cheap for them to do so. Here are his figures:

Readers can sense the severity of the diet relative to risk by simply researching historical annual high yield default rates (5%), multiplying that by loss of principal in bankruptcy (60%), and coming up with an expected loss of 3% over the life of future loans.

He then compares this 3% expected loss, based on historical default levels, with the current margins available to these borrowers of 2% to 2.5%. Which does indeed suggest that the return to lenders on such loans is lower than the amount they might use, and my elderly investment banking grandmother once told me that risk and reward should always be prudently balanced.

The hole here, if you can see it, is that we still don't know if corporate defaults will follow their historic pattern, let alone the pattern of mortgage borrowers. Default rates were low in May, although Moody's, yes that discredited rating agency, says that they will increase.

For the moment, indicators of corporate health (profits, cash on hand, job creation) are good. Corporate borrowers will probably not struggle to service their existing cheap debt. But they will find it very hard to refinance their debt at similarly cheap rates next time it comes due. And new deals will be harder to do, as Gross suggests.

But I'm still sceptical about the "loss of principal in bankruptcy", or loss given default, number he cites. My suspicion, as I have suggested in the past, is that while loans have presently been structured in such a way that lenders do not have as much access to the cashflows of a borrower as they have in the past, they do have much greater levels of security over a borrower's assets.

A 50% loss given default brings expected loss levels much closer to 2.5%, or what borrowers were charging for high-yield debt until recently. Still Mr. Gross has probably had more bond positions go sour than I've been to uninspiring indie rock gigs, so I'll defer to his assumption that loss levels will revert to the historic mean.

But go read it. He may be a seasoned, and successful, investor in one of the less exciting forms of financial instruments, but he really does seem to be cheerful at the mess we all think is going to go down. Oh that's right, he's a bond investor. He loves it when borrowing is expensive. Caveat lector.

Gari Has Real World Friends, Will Pimp Them

Hello there, I'm back from a vacation and a moderately traumatic office move. The good news: I am exposed to natural light at work for the first time since 2001. The bad: I have so little privacy that blogging at work will be suicidal. I'll give it a go and all that, but not with too much enthusiasm. Maybe, like phone calls to my parents, I will try and migrate it to home.

Two bits of ephemera, with a longer piece to follow.

The first is that Virgin America just launched, and while its cabins may be very spiffy, its web site is very awful.

The second is that Vladimir Putin thinks his current heated rhetoric with respect to the KGB assassination squads affair is not crazy enough. His thinking is, as far as I can tell, that maybe that other noted authoritarian nutbar, Robert Mugabe, is on to something in appealing to post-colonial guilt in the United Kingdom.

He assumes possibly, that the teaching of history in the UK is in any way less slanted than it is in Russia. How adorable! Either that, or possibly he thinks that the G8 and the African Union share the same mindset. Peculiar.

The proper way to address post-colonial guilt is to read a fine new book on the inept partition of India by a viceroy whose main qualification for the job was crashing battleships and pimping his nephew to the Queen. It's called Indian Summer, I've read it, and it's the best history book named after a Beat Happening song ever.

The author, one Alex Von Tunzelmann, is indeed known to me (does a pseudonymous author need to provide such a disclosure?), and yes, the Daily Mail does not dislike it quite enough for my tastes ("Breathtaking....Von Tunzelmann handles her material with remarkable verve and an old-fashioned authority.").

But one can't help but hope that Putin, or Mugabe for that matter, could provide such a lucid and frank perspective on the colonial legacy. Hang on, did you just say that a man that dedicated the early part of his life to throwing of the racist legacy regime of colonial rule needs to match up to the historical perspective of a debut author?

Um whoops, yes I pretty much did. Let's back up. What I probably should have said is that the book is one indication that the UK is much better at confronting its colonial past than our two dictators would have you believe. And it's a ripping good yarn.

Resistance Is Fertile

So, I'd promised, in an earlier post, that I'd explore the subject of whether the inhabitants of the United States or the United Kingdom are better at being obstinate. I define here obstinate as "being uncowed by the workings of government", and suspect that there is a better synonym at hand, but I'm too lazy to look for it (actually, I'm not, and Merriam-Webster suggests that it will do). And in the interests of harmony and accuracy, I'll narrow British down to English for the purposes of this discussion.

Now this post will explore, in a rather unordered fashion, which populace is best at standing up to its government, and rests on a few recent observations. The most shallow of these is that that the two, actually make it three, most recent dystopian visions of the near future on film have been set in the United Kingdom. Children of Men, V for Vendetta, and, to a lesser extent 28 Weeks Later, have all been set in an England under the thumb of authoritarian government.

The second is the idea that the United States is slipping into a state of fascism, and while I don't necessarily agree withe many of the arguments to which the previous google page provides links, it's interesting to me that they suggest that Americans might be more inclined to submit to government power than previously.

The last is the ongoing discussion of the extent to which law and order professionals and the UK political class have usurped the UK's citizens' freedoms and the extent to which said citizens are concerned about this.

I'm fortunate that I have two imperfect and anecdotal means exploring this this. I have had the misfortune to be present when smoking bans were introduced to both New York and London, and have also experienced brutal terrorism-inspired security measures in both the United States and United Kingdom.

The smoking ban can be dealt with most quickly. The short answer is the British accept it much too meekly. Now, you might say that grudgingly complaining that you have to push said smoker onto the street suggests incomplete subjugation to the law. And the British do this very well. What the Americans tend to do is own this law, like it was their idea to ban smoking (most cheesy bars). Unless they feel like flouting the law, at which case come 2am, out come the makeshift ashtrays. But you can tell that the odds of getting caught, rather than civic duty, are the deciding factor. I was not in London late enough to sample the 2am mood there, but I'd be gobsmacked if scofflawerism reigned in the wee small hours.

Now let's take airport security. Ooh, this is a tricky one, since I know that our brave security enforcers are only trying to protect us, and that hypothetically they're most at risk from being blown up. So we'll take it as read that they're motivated by the same things, and look at the attitude they bring to their task.

Again, you could say that this is an unfair exercise. America's customs checkers have had dozens of terrorist-inspired freak-outs to hone their act since 2001, but no substantial follow-on attacks. England has had only two years, but has had as many attacks. So one might assume that the typical English bag-searcher would be at once more febrile and more gauche.

But, still, there's a certain brusque, loud, exuberant pantomime villain pride that America's TSA officials bring to their job. They give the impression that they enjoy it, that it fulfills them, even though they can't collectively bargain. Maybe they're patriotic. Weird.

in fact, at times I get the impression that the screeners don't actually like me, even before I open my mouth, which should be cause for despair, but is rather comforting, because only actual malice could explain some of the stupid regulations attached to bringing one's possessions onto an aeroplane.

My return from London seven days ago, on the other hand, was marred by multiple screenings of joyless efficiency and dubious logic. Why, then, would one be intensively searched just before passport control and duty free, and then a second time before boarding? Either the shopping area into which we've been herded is sterile, as the security jargon goes, or it is not. More importantly, the age old custom, to which only the US and UK adhere, of not demanding to see your passport on the way out of the country has been quietly ditched.

More importantly, the commands are issued in a flat, joyless monotone. It's sometimes presumptuous, occasionally baffling (I was asked to "consolidate" my luggage into one bag, presumably on the understanding that i'd just carry the rest through security in my pockets, gum up the line emptying them, and then deconsolidate them in duty free). There's not quite a sense of shame at being the vessel for these preposterous demands, but you can tell they don't like being accomplices, and that's what's so depressing about the whole charade.

So, what are my conclusions? Both the US and UK are going to 1984 hell in a handbasket, but the Americans are doing it with more panache. It's no wonder Greenwich Villagers turned down that contrived and misguided Little Britain nonsense, either because it wasn't classy, or because one already existed.

I'll be off-line for a week. Stay easy.

Does The Backwards Flat Cap Thing With A Certain Aplomb

Probably about midway in the continuum of knowledgeable writings about music, it's my latest Sugarzine column, a review of sorts of the amazingly talented yet strangely subdued Richard Thompson. Spends much too much time talking about the limits of my knowledge of, and appreciation for, his genre, but at least I was there, which makes it 50% gonzo. No gigs planned till Daft Punk at Coney Island, so lord knows what we'll give them next month.

The Death of Whimsy

Animals In War
Originally uploaded by Gringcorp.

Grabbed this shot of a war memorial during my recent, and prolonged, stay in London. This memorial, which only the British would think of putting up (subtitle: "THEY HAD NO CHOICE") is located not far from the garage where one of the recent bomb plot vehicles was parked. I caught it as I was leaving a nearby conference.

I had until fairly recently been confident that there is this obstinate cast of mind in the British that outshone the Americans' own strand of bloody-mindedness. Now I'm not so sure. I'll try and explain this at length in a later post.

No Free Pass

You might think, on first examination, that President Bush has done something rather clever by commuting the sentence of Scooter Libby, rather than giving him an outright pardon. The idea is that you pacify the right wing, but still admit that Something Wasn't Quite Right about what Libby, who has a FIFTIES CHILD'S NAME, did.

It also, apparently takes off the table a question for Republican primary candidates, viz. "Would You Pardon Scooter Libby and his stupid name?" This is true, to a point. However, what we really need is a troll-like operative to say, "well, it's all very well for him to have avoided being violated in a prison camp in Connecticut, but he has a living to make, and so forth, and being a convicted felon kind of cramps his style. Do you as a candidate think that his children, some of which are barely adults should starve as a result of this left-wing hatchet job? Won't you give him a full pardon?"

Given the fractious state of the US right these days, we may get some entertaining answers.

Fresh Greenwash

Greetings from London, where I have been detained for an additional week for family-related reasons. The weather has been reassuringly appalling, but I do not complain, because it keeps the Wimbledon Tennis Fiasco from dominating the pitiful collection of channels available to the Britons.

Interesting interview at CNET with the guy that finances renewable energy companies for GE. I say interesting because it represents a slight advance in the way that the "green energy" gnomes are doing their PR.

The interviewer snags his target, Kevin Walsh, at the Renewable Energy Finance Forum in New York, which is organised by the amusingly entrepreneurial American Council On Renewable Energy. Since he is surrounded by tubby people in suits prospering in the sector, he holds off from the whole "but I thought this environment business was all about hippies?" garbage.

Instead we get a fairly sober look at where the opportunities for GE are in the business, aside from making quite stupendous profits on the sale of its wind turbines, obviously. We learn that GE was canny enough to stay off the roller coaster that is ethanol production, less because of its dubious environmental benefits than its inability to attract cheap financing.

What we don't get is the equivalent of the old Mrs. Merton one-liner: "What first attracted you to the tax subsidy-riven renewable energy market?" We instead get this deliciously coy exchange, right at the end of the interview:

Is the financing anything special, or are they pretty standard financial instruments?
Walsh: Well, no, they are special in some instances when they are very tax-driven, in the U.S. anyway...So you need to understand how to take advantage of those features.

As if to suggest that GE, a really quite large corporation, with a really quite large tax bill, sort of stumbled on the tax subsidies while picking daisies at the bottom of a windmill. I can't help but think that the likes of GE would be best off in the long term by campaigning for subsidies to flow to producers in a more equitable and transparent fashion, rather than hoping no-one will notice how skewed the system is towards large corporations like GE and FPL.

Unfortunately, in the long term , as the market evolves, the whole tax subsidy regime is likely to be completely discredited, and creating useful subsidy regimes for other promising technologies will be that much harder. For now, what we get is this enormously secretive business tacked onto the crassest PR pitch imaginable.