“For years I kept these memos away from anything related to politics. But more recently I began to discuss issues facing the United States, and this has required some mention of policy and thus of politics. I’ve tried very hard to be non-partisan, with a goal of not having readers know my leanings…Because I found America’s recent presidential election – and especially the results – so fascinating, I’m going to move explicitly to the field of politics, but with the same goal of non-partisan expression…If you believe the exit polls, people who were positively influenced by the handling of Sandy could have made up all or more of Obama’s 2.8% margin of victory. If it’s true that Sandy was the deciding factor for 15% of the electorate, and if it caused just a fifth of those people to switch to Obama, that means without Sandy, Romney would have won. I find it shocking that the choice of a president for four years could turn on something as fickle as the weather.” [Howard Marks]
“I have extreme problems with my office due to the hurricane and that is where I am focused,” Cooperman wrote in response to a request for comment by Absolute Return about the reelection of Barack Obama, whose rise to power Cooperman previously likened to that of Adolf Hitler and who, by the by, is still yet to send a handwritten thank you note for “Inspired: My Life (So Far) in Poems,” the self-published memoir of Cooperman’s 14 year-old granddaughter. That comes through, maybe then he has something to say about the events of last Tuesday. [AR, earlier]
As you may have heard, things are not going so well for New York City* of late. Lower Manhattan has been without power for days. A hundred or so houses that once stood in Queens are now rubble. Staten Island has been destroyed. Those living uptown and in other areas that emerged relatively unscathed are dealing with survivor’s guilt. In spite of all that, Mayor Bloomberg has declared that the Marathon, scheduled for this Sunday, will go on, a decision that has been met with major outrage by people who believe the considerable resources that go toward putting on the race should be put to more critical use elsewhere, that the city does not need the strain of putting up an additional 40,000 people, that the supposed economic benefit would be a drop in the bucket of what NYC needs, that the generators sitting in Central Park right now could be helping those sitting in darkness, and that considering dead bodies are still being pulled of the water, it’s generally “too soon.” One guy who’d beg to differ? Ed Koch. Twenty-five years out of his mayorship, he still gets these people and while the media would have you believe holding the marathon has caused an enormously heated debate, he’s here to tell you that’s bull. New Yorkers want this and if Koch were still King? He’d be throwing a parade come Sunday, with A-Rod as Grand Marshal. Read more »
I’m a little obsessed with the Depository Trust & Clearing Corp. One way to think of the financial industry is that it is basically a machine for abstracting real human activity: you buy a house made of bricks and wood and stuff, but the financial industry enters numbers in a computer to represent your mortgage, bundles it with other mortgages, slices up the risks of those mortgages – house price appreciation, credit risk, interest rate risk, prepayment risk – and sells them to different people who never need to care about what your house looks like. There you sit in your house, while the numbers spin unseen around you.
The machine, though, is built out of pretty old-timey materials. Those mortgages are mortgages, recorded on pieces of paper in county records offices somewhere; the securities are securities, scraps of paper that convey rights to whoever happens to hold them. Bonds used to be, and in some metaphorical and legalistic sense still often are, pieces of paper with coupons attached that you tear off and mail to the corporation to get them to send you a check for your interest payment. I think things like that actually happened, in the dark ages. But not for a long time.
At the core of the financial abstraction machine is the engine that turns old-timey scraps of paper and whatnot into abstractions.1 And that engine is an actual thing! It is called DTCC! It’s, like, a building downtown, and all the paper certificates come in, and out come numbers on screens that you can sum and multiply and manipulate and sell derivatives of to your friends. It’s what allows finance to be fast and computerized and high-frequency, so you can buy derivatives and indexes and deltas and exposures rather than, like, ten pieces of paper that give you ownership in Ye Olde Buggy Whips Concern.
For those of you who do not keep up with the drama in the Twitter universe, many, many people are very angry with a user who goes by the name @comfortablysmug, for spreading false information during the worst of Hurricane Sandy that included claims that ConEd workers were “trapped in a power station,” that ConEd was shutting down “ALL power in Manhattan,” and that the New York Stock Exchange was under three feet of water. These reports turned out to be complete lies and @comfortablysmug was shamed in the town square, outed, and forced to offer a “sincere apology to the people of New York,” noting that “while some would use the anonymity and instant feedback of social media as an excuse,” he would take “full responsibility” for his actions. Many in the media, however, are still quite miffed and one guy who’s really pissed? The dude who happens to have the same name (in real life) as comfortablysmug AKA Shashank Tripathi. Read more »