Monday, 29 September 2008

If the US Government Were Just Some Guy

With the heady numbers thrown around when discussing the Wall Street bailout, it helps to put these things in perspective. If the U.S. Government were just some guy managing his money, how would that look?

If America were a guy earning $50,000 a year, he would also have a debt of $19,000 (with payments of less than $900 annually).

All the 2008 buyouts would cost $5,600. Of this, only $3,170 is distributed; the rest is held as guarantees for corporate loans. Most of the $5,600 will be back in government coffers within ten years.

In other 2008 spending, the Iraq and Afghan wars together cost $655 (a total of $2,780 since 2001); the Bush tax cuts and stimulus package cost $590; the food-stamps programmes cost $137; and children's health insurance was given $25.

The deficit was $1,435.

The current crisis was caused largely by the belief that good times continue forever. People who should never have been given loans were lent huge amounts of money because of practices in place: banks sold their risk to companies like Lehman Bros. who sold it to the market; the banks took commissions on the loans they made; and market investors had no idea how shaky their securities purchases were. Mortgage borrowers speculated wildly, buying houses before they were completed, selling them without ever living in them, and pocketing the profit while ignoring the possibility of the property falling in value. Eventually there were too many houses, prices fell, people got stuck with houses they couldn't sell (and therefore mortgages they couldn't pay), they defaulted, and banks, Lehman Bros, and the market got stuck with the cheque.

America's wealth gains in the last twenty years have come largely from no longer making products, but juggling money. Flipping currency between loans on factories makes more money, faster, than owning factories. Unfortunately it also means you're competing with companies who take on more risk than you, for greater profits. So you take greater chances with more money, and more loans, and higher throughput. But when you start getting into trouble, investors trust you for shorter periods of time with their money. Lehman Bros. got a little wobbly, investors started investing by the week instead of by the month, the transaction costs massively increased, profits nosedived, credit ratings fell, investors backed out, and suddenly the biggest bankruptcy in history appears from nowhere.

$600b is six times larger than the previous largest bankruptcy, Worldcom. Because so much money flows through Lehmann Bros, letting it fail would heavily reduce liquidity in the market (the money-go-round would slow down). In a finance-centred economy like America, this would cause the current recession to deepen. People who deserved loans would have to pay more to get them. Wages increases and new job creation would slow. So the government believes the best way to prevent this is to bail out financial institutions. They are too big to fail.
(And don't get me started on Fannie Mae or Freddie Mac.)

Sunday, 14 September 2008

London photos

Bagpiper, Tower Bridge

Horse Guards horse & guard

Lunatic in Covent Garden

Winged Victory; between Buckingham Palace and St James' Park

On top of a tree, Hyde Park

Saturday, 13 September 2008

Top 10 Art Galleries in the World, again

Musee du Louvre, Paris -- Sept'08
Vatican Museums, Vatican City
Metropolitan Museum of Art, New York
J. Paul Getty Center, Los Angeles -- Sept'07
Musee d'Orsay, Paris -- Sept'08
Uffizi Gallery, Florence
Art Institute of Chicago
Tate Modern, London -- Sept'08
Prado Museum, Madrid
National Gallery of Art, Washington, D.C. -- Apr'08

That's five now. I passed through Chicago three times in April, but never had more than a few hours to string together to visit the Institute.
The Tate was big. I wasn't hugely impressed by the art until I rounded a corner and almost bumped into Boccioni's Unique Forms of Continuity in Space because I was looking at the huge Lichtenstein, Whaam!
The Musee d'Orsay was under construction, so most of the Monets it is famous for were in storage. Manet's Olympia was strangely impressive, but I was distracted by the bizarre layout of the building.
The Louvre seemed like an excuse to display all the French painters no-one's ever heard of, in room after enormous room. The Georgian statuary were a highlight for me and my favourite period, 1780-1820, was very well represented. I searched in vain for a David that I liked, and took photos of the hordes taking photos of Mona Lisa.

My next museum here will probably be in New York. Chicago maybe in early 2009, and I don't know when I'll go to Italy or Spain. This list may take a few more years to complete.

Monday, 8 September 2008

An Open Letter To Australian and American Women Aged Between 18-30 Years Old Visiting London or Paris

Stop talking. Just stop. Talking. Would you stop? Stop talking. Stop.

Paris: Traffic & Other Beasts

Just when I was getting used to the right-hand-side driving of Canada and the U.S. I visit England and it's back to front again. Suddenly I have to unlearn this binary re-wiring. Then after I week I'm in Paris and it's right-handed again.
This wouldn't be an issue if Parisian drivers weren't so hell-bent on playing the part of the bowling ball in these narrow alleys. The reason that French cars are smaller than American cars is to allow Paris-dwellers to hurtle down cobbled lanes at autobahn speeds, pedestrians be damned. A marked crossing means nothing. Before venturing out on a set of zebra stripes, I peer one way and the other, then turn my head like a gazelle, sniffing for unseen danger which might present itself only by the faint odour of burning rubber. Then, scurrying across a lane, I take refuge on concrete islands and behind traffic signs before repeating the process. The labyrinth of Parisian roads is a savannah for Citroens and Peugeots, low-slung and lunging.
The two-wheeled of the species is deadlier than the car. Scooters fly around the city like bats around Gotham, ducking, weaving, and hungry for the blood of the unwary. Unable to command respect in any other capital in the world, scooters in Paris are vituperous harpies of the inner city. First, the pitched whine of a tiny engine strained to breaking point; then the discordant beep warning peaceful citizens of an imminent challenge to the rule of law; then the pedestrian turns, alarmed, to see a bescarfed motard bearing down at a speed unknown to gods or men. Grown gentlemen faint; women swoon; dogs break briefly from their urban toilettes. The scourge of Paris is on the wing, and none are safe. After the flapping from the scarf recedes into the distance, a wary peace settles over the street. Citizens gird their moral loins and bustle across the street, glancing this way and that like pantomime villains. The street is not their home.

Sunday, 7 September 2008

Paris: pretty

Sitting outside the Pompidou Centre eating a pack of madelines, it strikes me how cheap local food has been in France and England. All the regular tropes are reversed: French wine is 4€50, Evian water is 0€70, while Coca-Cola is 2€50. In London I was delighted to find that HP Sauce was just 65p. It was the American products that were expensive. Don't know about you, but paying NZ$7 for a pack of Pringles was a little beyond reasonable.

Everything in Paris is so goddamn beautiful. You can tell the foreign girls because they don't have a tan or a scarf and weigh over 60kg. The children are likewise unbelievably well-dressed and cute, and well-behaved. It stands in stark contrast to London's squalling clusters of corn-fed hellions with haircuts that guarantee they'll be arrested for loitering with intent within the next ten years. least I thought the French were preternaturally attractive until I left the city centre. Here, in an immigrant, working-class area of the city, yoof loiter in doorways, horse teeth jut from supermarket clerks, ill-advised makeup decisions adorn teenage faces, and dollar (well, €uro) stores and laundromats are much in evidence. The children are still well-behaved, but my construct of a culturally-evolved master race has taken a major blow. I had made the mistake of judging a population the size of New Zealand by its Newmarketistas.

Paris, images

London, last day

Tuesday, 2 September 2008

London, Day 6

Touring has an anethetizing effect. Below is a list of things I have seen in six days:

Buckingham Palace
St James Palace
London Bridge
Tower of London
Tower Bridge
Wellington Arch
Hyde Park
Covent Gardens
Leicester Square
Millennium Bridge
Westminster Abbey
Big Ben
RAF Museum
Design Museum
Tate Modern
Tate Britain
Victoria & Albert Museum
National Gallery
National Portrait Gallery
British Library
National Antiquaries Society

...and the British Museum, four times.
There's a difference between experiencing great things and ticking them off a list, but the difference lessens each day. Constantly having to look is exhausting, constantly seeing things that are new. There's no chance to filter, to focus on what's important and discard the rest; all things are new.
Now I know why babies have to sleep so much.

London, Day 5

London is a collection of teapots and napkins. But the teapots are buildings, old and stained from rain and bombs and neglect, and the napkins are people. Some are fresh, crisp, newly pressed; most are crumpled, used, and bulging with partially-chewed foodstuffs.

And those are the English. Tourists to London come in three varieties: milling Americans (30-50yrs), inquisitive Europeans (25-45yrs) and honking Australians (21-22yrs). If a local Londoner was asked how they perceived Australia, it would be as a nation of fresh Communications graduates who complain ceaselessly and drink the cheapest beer they can find. Meeting an antipodean in London is like seeing a McDonald's in Manhattan; they're everywhere, they won't leave anytime soon, and their presence generates the kind of cognitive dissonance that motivates concerned citizens to write letters to their MP that Something Ought To Be Done.