The Modern Art of Sub-Prime Debt



Via Peattie and Taylor

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  1. Michael Donnelly commented on Nov 20

    Have you seen the crap modern art that is all over the Philadelphia Federal Reserve ? One item in particular is a bunch of metal hanging from the ceiling. One Fed official told me that’s the largest mobile and it only cost ZZZ,ZZZ and it only cost another ZZ,zzz to hang it and another ZZZ,ZZZ to reinforce the ceiling to be able to support it.

    Is it ugly, hell ya. But it’s your seigniorage at work.


  2. dblwyo commented on Nov 20

    Marvelous, timely, accurate. Dick Armitrage recently pointed out that executive competence consists of the ability to establish a goal and communicate it, ensure execution and hold people accountable. Tell me on what part of that checklist do any of the banks (GS excepted perhaps ?) pass muster ?
    Perhaps we could arrange to have this mailed out to their board and stockholders ?

  3. VennData commented on Nov 20

    Here’s a quote from Charlie Munger which Stan O’Neal – or bored, status seekers who gamble on contemporary art – might have been better off reading a while back:

    “CBS provides an interesting example of [a] rule of psychology namely, Pavlovian association. If people tell you what you really don’t want to hear what’s unpleasant there’s an almost automatic reaction of antipathy. You have to train yourself out of it. It isn’t foredestined that you have to be this way. But you will tend to be this way if you don’t think about it.

    “Television was dominated by one network ‑ CBS in its early days. And Paley was a god. But he didn’t like to hear what he didn’t like to hear. And people soon learned that. So they told Paley only what he liked to hear. Therefore, he was soon living in a little cocoon of unreality and everything else was corrupt although it was a great business…

    “…If you take all the acquisitions that CBS made under Paley, after the acquisition of the network itself, with all his advisors his investment bankers, management consultants and so forth who were getting paid very handsomely it was absolutely terrible.

    “For example, he gave something like 20% of CBS to the Dumont Company for a television set manufacturer which was destined to go broke. I think it lasted all of two or three years or something like that. So very soon after he’d issued all of that stock, Dumont was history. You get a lot of dysfunction in a big fat, powerful place where no one will bring unwelcome reality to the boss.”

  4. kharris commented on Nov 21


    Goal of Bank: Generate income by methods similar to those used by banks of similar size and in our market segment. Produce incremental elaborations of already existing methods of income generation that can be offered to clients at higher margins than those for already existing methods.

    Based on that business plan, git income for bank officers while the gittin’ is good.

    Execution: Look at the Forbes 500 over the years. In the past decades, finance has increased its presence on the list far in excess of its growth as a share of GDP. Nuff said.

    Accountability: You’re joking, right?

  5. Alex commented on Nov 23

    No no, bankers that are so honest about their business so quickly is definitly fiction.

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