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The Financial Lives Of the Poets is truly a book of the times, and one of the best books I’ve read over the last year.  The book revolves around the life of one man, and his interaction with his family (cheating wife, father and 2 sons), his bank (sub-prime mortgage holder about to foreclose on him), his new drug dealing mall friends, his former newspaper boss that laid him off, and the special police drug unit that gains control of his life.  It sounds like a lot, but the character and story development is well done, and it is very entertaining.  And for those that just haven’t had enough of the mortgage meltdown theme, here is a notable quote from the book:

the only thing that seemed rock steady was the house, so we took another chunk out of it, just to catch up, we said, to temporarily cover living expenses, and we refinanced at the peak value; like a snake eating its tail we borrowed against our house to pay the house payment of a house leveraged at forty percent more than the house was worth.

Later when everything seems hopeless, he confirms it with his financial adviser, the same financial adviser who destroyed nearly all of his non-house related assets’

You have fiscal Ebola, Matt.  You are bleeding out through your nose and your mouth and your eye sockets, from your financial asshole.

The desperate situation eventually leads to a subtle crime wave, and then more trouble and doses of reality.  But despite the busy plot, there is also quite a bit of development on the more simple theme of family affairs, and changing relationships – with Matt’s father, his wife, and his kids.  It truly is one of the best books of 2009.  Click the book below to purchase your copy.

One more note, for those wondering about the title.  I don’t want to spoil any more than I already have, but there are a few financial poems and financial haiku’s within the pages.

The Financial Lives of the Poets by Jess Walter

Here is an entertaining rap music video portraying two notable economists, Hayek and Keynes, and their opinions on how to fix the economy.

Once again, CNN misses the mark in its reporting of government finance.  Their latest story  on the supposed $52 billion profit at the Federal Reserve is misguided and irresponsible.

The Federal Reserve banks made a $52 billion profit in 2009, reaping extra income on the government securities they bought in an effort to stabilize the financial system.

But where does this nonsense come from that CNN and every other main stream media outlet reports on?  Here is the link the Federal Reserve press release.  An excerpt follows:

The Federal Reserve Board on Tuesday announced preliminary UNAUDITED results indicating that the Reserve Banks provided for payments of approximately $46.1 billion of their estimated 2009 net income of $52.1 billion to the U.S. Treasury. This represents a $14.4 billion increase over the 2008 results ($31.7 billion of $35.5 billion of net income). The increase was primarily due to increased earnings on securities holdings during 2009…

he Federal Reserve Banks’ 2009 net earnings were derived primarily from $46.1 billion in earnings on securities acquired through open market operations (U.S. Treasury securities, government-sponsored enterprise (GSE) debt securities, and federal agency and GSE mortgage-backed securities), $5.5 billion in net earnings from consolidated limited liability companies (LLCs), which were created in response to the financial crisis, and $2.9 billion in earnings on loans extended to depository institutions, primary dealers, and others. The significant increase in earnings on securities was primarily due to increased securities holdings as a result of the Federal Reserve’s response to the severe economic downturn. Net earnings from currency swap arrangements, which have been established with 14 central banks, and investments denominated in foreign currencies totaled $2.6 billion. Additional net earnings of $1.5 billion were derived primarily from fees of $0.7 billion for the provision of priced services to depository institutions.

Of course the keyword in that Fed statement is in the first line – UNAUDITED.


Why unaudited?  Because nearly every aspect of the Fed’s actions are hidden from American taxpayers, congress and even the president.  Ron Paul is the cosponsor of the HR 1207 bill that threatens to open the Fed’s book to a REAL AUDIT, but until that bill passes, and an audit is performed there is NOTHING in the Fed statemnent that can be trusted, especially false claims of profit.

From the Daily Herald on the Fed’s secrecy:

Today, nearly $13 trillion in taxpayer dollars in bailouts and loans threaten every aspect of our lives. Our constitutional principles and freedoms are being assaulted at every turn. More bailouts, trillion-dollar “stimulus” plans, huge new debt burdens for our children, simply printing money to cover our failed policies and mask our dire economic situation – I could go on and on.

You and I both know President Obama is going to keep going and going unless the proper controls are put into place.

Just think about the magnitude of our spending: The massive, outrageous amount of dollars committed to the economic bailouts in recent months totals more than the New Deal, more than the entire Iraq debacle, more than the 1980s savings and loan mess, more than the Korean War … COMBINED.

The basic premise of examining any problem is determining root cause, which means starting with the Federal Reserve. However, the Federal Reserve is shrouded in secrecy. Their meetings and inner workings are off-limits to the public. And just recently, the Federal Reserve told Congress “NO WAY” when asked to account for $2 TRILLION in taxpayer-backed loans!

Also see:

• The United States Has Not Had A Balanced Budget Since 1957!
• Total Bailout Cost Now $12.8 Trillion

Washington state, like so many other states in the union has huge budgetary problems. An OpEd opinion in the Seattle Times recently asked leaders in the state for their advice to our legislature.   There were two opinions showcased, one of which appeals to the peoples emotions with little regard for financial responsibility.  The other co written opinion was dead on the money about everything wrong with general government spending habits, and Washington state’s specifically.

Richard Davis, the president of the Washington Research Council and Kriss Sjoblom, the council’s economist and vice president of research offered up these choice words.

…What’s been called the state’s structural deficit — an enduring mismatch between revenues and spending — may be better understood as a durable legislative appetite for betting on windfall revenues to bail out overextended budgets. To a remarkable degree, budgetary gambles have paid off over the past decade, as the tech, housing and construction bubbles swelled state coffers.

In 2007, lawmakers raised the stakes, writing a two-year budget that increased spending at twice the forecast rate of revenue growth. Because of the Great Recession, however, 2007-09 revenues came in well below forecast. Only the 2009 federal stimulus windfall averted an even greater budget disaster. The federal monies will be gone in 18 months.

The National Governors Association estimates state budgets will be in the tank through at least 2014. Recent statistics from the Philadelphia Federal Reserve Bank peg Washington’s economy as the fourth-weakest in the nation at present.

It is past time for lawmakers to reset spending and focus on economic growth…

That pretty much sums up the root of our problems.  When additional spending is desired beyond the projected revenue levels, the quick and irresponsible means to achieve additional spending is to just raise the revenue projection numbers – whether achievable or not.

Also See:

• Washington state debt history – does Dino Rossi understand it?
• The United States Has Not Had A Balanced Budget Since 1957!
• The United States National Debt Limit Has Become A Joke
• California Goes Broke – Issues IOU’s
• California’s Exploding Debt Problem

John Perkins, author of Confessions of an Economic Hit Man, just released his new book – Hoodwinked: An Economic Hit Man Reveals Why the World Financial Markets Imploded–and What We Need to Do to Remake Them.

The book is comprised of two main parts – a detailed look at the root of the problem in part I, and the solution as Mr. Perkins sees it in part II.  To find out more, or purchase your copy, just click on the book image below.

Hoodwinked: An Economic Hit Man Reveals Why the World Financial Markets Imploded–and What We Need to Do to Remake Them by John Perkins

The Seattletimes just ran a story on some expensive Tokyo rents that would make a Manhattan studio look cheap.

Now, Hotel Shinjuku 510’s capsules, no larger than 6 1/2 feet long by 5 feet wide, and not tall enough to stand up in, have become an affordable option for some people with nowhere else to go as Japan endures its worst recession since World War II.

Affordable is all relative I guess.  The story goes on to say – “The rent is surprisingly high for such a small space: 59,000 yen a month, or about $640, for an upper bunk.”

There are dozens of good book on options trading theory and practice.  But there is only one I have seen that does a great job with covering the inevitable – how to manage, adjust and refine losing option trades.  And that book is just about to get better with a newly revised edition.  Click the link to pre-order your copy today.  Or if you already have a Kindle, you can access the new book immediately.

The Option Trader Handbook: Strategies and Trade Adjustments (Wiley Trading) by George Jabbour