Thursday, February 26, 2009

Banks, Water, and Writing, Oh my....

I think that Paul Krugman goes off the reservation from time to time, but on the issue of the banking crisis I think we're on the same page. I don't think this is a criticism of the Administration, but rather the teams that are in place at Treasury and at the Fed. I don't have the original post but here is what Nobel Prize winner Mr. Krugman had to say about the latest "plan: to emerge.

"I’m trying to be sympathetic to the various plans, or rumors of plans, for bank aid; but I keep not being able to understand either what the plans are, or why they’re supposed to work. And I don’t think it’s me.

So the latest is that we’re going to convert preferred stock held by the government to common stock, maybe. Here’s my stylized picture of the situation:

What Treasury now seems to be proposing is converting some of the green equity to blue equity — converting preferred to common. It’s true that preferred stock has some debt-like qualities — there are required dividend payments, etc.. But does anyone think that the reason banks are crippled is that they are tied down by their obligations to preferred stockholders, as opposed to having too much plain vanilla debt?

I just don’t get it. And my sinking feeling that the administration plan is to rearrange the deck chairs and hope the iceberg melts just keeps getting stronger."

I agree - swapping preferred stock (green) for common stock (blue) is kind of irrelevant if the debt (red) exceeds assets (black). Or maybe Mr. Krugman is just ticked that NY Times is a $4 stock and he didn't get picked for a role in the Administration :)

I think I've mentioned before that one of the great long-term industrial opportunities lies in the production of safe, affordable fresh water. It is an issue for industrialized nations for agricultural needs and it is going to be an issue in central Asia with 2.8 billion people looking to the Himalaya's for more water.

Well, this is little more than a singular data point on that trend line, but it is interesting.....

California to Stop Water Deliveries to Farms

California authorities report that most state and federal reservoirs are at their lowest levels since 1992. Therefore, the U.S. Bureau of Reclamation, which operates a massive network of dams, canals and pumps that moves water between Northern and Southern California, is stopping water deliveries to state farms for a three-week period beginning March 1st for the first time in 18 years.

It's unclear what this means for production of produce, but expect to see more and more of those little signs popping up at the grocery store that say "Due to water restrictions in California. Tomatoes will be $17.99 per lb until further notice"

This is way off-topic but I there's an interesting piece over at the BBC on the death of handwriting.

"Christmas cards, shopping lists and what else? The occasions in which we write by hand are fewer and fewer, says Neil Hallows. So is the ancient art form of handwriting dying out?
A century from now, our handwriting may only be legible to experts.

For some, that is already the case. But writer Kitty Burns Florey says the art of handwriting is declining so fast that ordinary, joined-up script may become as hard to read as a medieval manuscript.

"When your great-great-grandchildren find that letter of yours in the attic, they'll have to take it to a specialist, an old guy at the library who would decipher the strange symbols for them," says Ms Florey, author of the newly-published Script and Scribble: The Rise and Fall of Handwriting."

Every time I sit down to scribble a note to a friend or a teacher I'm reminded of the slow deterioration of my own handwriting skills. Since we're re-inventing everything else we do how about a proactive approach to handwriting. Teach kids the basic printing skills, but let's give up the hope that they'll ever have great ability to write in script. The extra 2hrs/week spent writing could be applied to actual keyboarding skills (instead of what passes for keyboarding - point/click via mouse).

Okay, I'm off my soapbox for now.

Freak the Geek out. Withdraw all your money and hide it.

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