Hitler on housing
The popular re-subtitled Hitler video meme has been applied to the financial crisis. The results are hilarious (for those of us that aren’t similarly situated).
Don Mecoy
Business Writer
“Liar’s Poker” author on the meltdown
Michael Lewis, author of “Liar’s Poker” (and if you don’t know what that is, go get a copy and read it), writes about the end of an era on Wall Street. He traces much of the wreckage to the decision to take the investment firm Salomon Brothers public, a move that eventually was emulated by all the large investment banks.
From that moment, though, the Wall Street firm became a black box. The shareholders who financed the risks had no real understanding of what the risk takers were doing, and as the risk-taking grew ever more complex, their understanding diminished. The moment Salomon Brothers demonstrated the potential gains to be had by the investment bank as public corporation, the psychological foundations of Wall Street shifted from trust to blind faith.
It’s a good read. Take some time and head over to Portfolio.com and check it out.
Don Mecoy
Business Writer
Government bill for economic measures already in trillions
Forbes.com has published a story that includes some interesting math about efforts to stem the financial crisis. Although the $700 billion rescue package left many aghast at the sheer amount of cash involved, the story notes that the government already has spent a good deal more than that. Like $5 trillion.
From Forbes.com:
According to CreditSights, a research firm in New York and London, the U.S. government has put itself on the hook for some $5 trillion, so far, in an attempt to arrest a collapse of the financial system.
The estimate includes many of the various solutions cooked up by Paulson and his counterparts Ben Bernanke at the Federal Reserve and Sheila Bair at the Federal Deposit Insurance Corp., as the credit crisis continues to plague banks and the broader markets.
Don Mecoy
Business Writer
Is this the bottom?
Blogger Jeff Matthews suggests a way to tell when the market has hit absolute rock bottom:
It’s when everybody is too scared to buy—and we mean everybody, including smart-alack blog writers—that the opportunity has come.
But foreign markets suggest we may already have arrived.
Don Mecoy
Business Writer
Recession George?
Halfbakery suggests we should name recessions after people like we do hurricanes.
A recession is like a hurricane in many ways: It travels a deadly path from one financial sector to another, destroying all profits in its path and affecting the health and wealth of everyone remotely near to it financially.
This also reminds us that, like hurricanes, recessions do sweep through regularly.
Don Mecoy
Business Writer
Tech night out: market meltdown edition
I was on a mission Thursday night when I raced into the conference center at the Presbyterian Health Foundation Research Park. My editor wanted a “man-on-the-street” take on the ongoing market meltdown from the crowd of technology-based entrepreneurs.
What I found is that most of the start-ups working to commercialize a technology in Oklahoma haven’t been hit with a direct impact from the market crash.
That’s because they aren’t yet in a position to seek financing directly from lending institutions, which likely have made credit much more difficult to obtain.
“I think that’s evaporated,” said Tom Francis, vice president of investment funds at i2E, the not-for-profit corporation that mentors many of the state’s tech-based start-ups. “I think the start-up companies that were just sort of marginably bankable before, now are not. It just got tighter.”
But there’s an indirect impact, said David Thomison, i2E’s vice president for Enterprise Services.
”Many of our entrepreneurial companies rely on individual wealthy angels for start-up capital,” Thomison said. “The indirect end result of it, being the drop in the stock market, will potentially over the next 12 months have an impact on our clients’ ability to raise private capital.”
Despite the crushing financial news of the past week, the mood at the networking event was upbeat. There were knots of people gathered in small groups engaged in animated conversation throughout the conference center.
When I completed the man-on-the-street interviews, I got a few minutes to relax and meet some OCU students who are planning a major assault on the 2009 Donald W. Reynolds Governor’s Cup Collegiate Business Plan competition.
I’ll write in an upcoming edition of The Oklahoman about their ambitions and the wonderful fallout the past year’s Governor’s Cup brought them.
In the photo above, Scott Rollins, l
eft, and Richard Alvarez, right, both of Selexys Pharmaceuticals, share a conversation with Max Doleh of Productive Technologies.
Business Writer
Nothing’s safer than money in the bank
I spoke to three bankers in the span of two days last week, and within the first 60 seconds of each conversation each of them made the same statement: “Nothing’s safer than money in the bank.”
Of course, it’s a media and customer education campaign, but it’s also pretty good advice. Particularly in Oklahoma, where our robust energy and agricultural sectors combined with an unusually strong housing market, have left banks in good shape.
Don Mecoy
Business Writer
Ironic vintage ad from WaMu
Washington Mutual, the biggest bank failure in American history, apparently was a little too much of a soft touch as a lender. Which makes this old TV ad more than a little ironic.
Don Mecoy
Business Writer
$700 billion package designed as investment, not bailout
There’s a good summary of the $700 billion rescue package over at the Wall Street Journal. A key aspect for taxpayers:
Protecting taxpayers:
If after five years the government has a net loss, the president will be required to submit a legislative proposal to seek reimbursement from the financial institutions that participated.
By the way, OCU Business Dean Vince Orza told me last week that while he was in New York, one of the editors of the Wall Street Journal joked that things had gotten so bad there that officials were considering changing the name of the newspaper to just The Journal.
Don Mecoy
Business Writer
Dear american: please help
Over the years the so-called “Nigerian letter” has landed in my e-mail box dozens of times, complete with the bad grammar and punctuation and awkward phrasing of someone not quite familiar with the English language who is trying to scam me out of some cash.
A parody of the letter arrived in my e-mail box this week, and I almost fell out of my chair laughing. It’s so right-on that I had to share it. Here it is, enjoy:
Dear american:
I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude. I am ministry of the treasury of the republic of america. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars us. If you would assist me in this transfer, it would be most profitable to you.
I am working with mr. Phil gram, lobbyist for ubs, who will be my replacement as ministry of the treasury in january. As a senator, you may know him as the leader of the american banking deregulation movement in the 1990s.
This transactin is 100% safe. This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance.
My family lawyer advised me that i should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred. Please reply with all of your bank account, ira and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction.
After i receive that information, i will respond with detailed information about safeguards that will be used to protect the funds.
Yours faithfully minister of treasury Paulson
Business Writer
