Quote of the Day - 03.08.09

From Michael Lewis, writing about the epic implosion of the Icelandic banking bubble:

After three days in Reykjavík, I receive, more or less out of the blue, two phone calls. The first is from a producer of a leading current-events TV show. All of Iceland watches her show, she says, then asks if I’d come on and be interviewed. “About what?” I ask. “We’d like you to explain our financial crisis,” she says. “I’ve only been here three days!” I say. It doesn’t matter, she says, as no one in Iceland understands what’s happened. They’d enjoy hearing someone try to explain it, even if that person didn’t have any idea what he was talking about — which goes to show, I suppose, that not everything in Iceland is different from other places.

If you haven't already, you should read the rest.  Or, at the very least, search down to this passage and then read from there.

Oh, and one other thing: this is not actually a story about financial collape.  It's a story about gender roles.  Consider yourself forewarned.

Movie vs. Maxi Series

Matt Yglesias saw Watchmen last night and says:

All-in-all, I’m torn between immense admiration for the film and regret that it was done as a movie at all. In retrospect, I kind of wish we’d instead gotten a 12 part HBO maxi-series that was really uncompromising and didn’t leave anything out.

You could think that about a lot of movies, couldn't you? And I have! Which is a little odd since I don't subscribe to HBO and wouldn't get to see any of these maxi-series ideas if they actually got made.

Watchmen, of course, would present a challenge here. At least I think it would. The problem is that the original chapters are pretty self-contained and it really would make sense to keep them that way. So, one episode per chapter. Unfortunately, that would require a fair amount of padding. Most of the chapters just don't have enough substance to take up an hour of screen time.

So a movie it is. I haven't seen it yet, so I have no comment on how it turned out. But I'm looking forward to it even though the reviews so far have been pretty lukewarm. I don't think I'll be buying a Rorschach doll any time soon, though.

Journalistic Malpractice

The Washington Post has a big front-page story today about a sudden spike in fraudulent FHA loan activity.  Here's the nut:

With the surge in new [FHA] loans, however, comes a new threat. Many borrowers are defaulting as quickly as they take out the loans....Many industry experts attribute the jump in these instant defaults to factors that include the weak economy, lax scrutiny of prospective borrowers and most notably, foul play among unscrupulous lenders looking to make a quick buck.

If a loan "is going into default immediately, it clearly suggests impropriety and fraudulent activity," said Kenneth Donohue, the inspector general of the Department of Housing and Urban Development, which includes the FHA.

....More than 9,200 of the loans insured by the FHA in the past two years have gone into default after no or only one payment, according to the Post analysis. The pace of these instant defaults has tripled in one year. By last fall, more than two dozen FHA home loans on average were defaulting this way every day, seven days a week.

So is fraudulent activity up?  That's hard to say because the Post story goes to considerable lengths to leave out the one obvious stat that would tell us: how many loans is the FHA insuring in the first place?  Here's the answer, according to figures compiled by MortgageDataWeb: there were roughly 500,000 FHA loans originated in 2007 compared to 1.4 million in 2008.

In other words, the number of FHA loans has tripled in one year.  And the number of instant defaults has tripled too.  The amount of fraudulent activity appears to have held pretty steady at about 0.5% of all FHA loans.

Now, there's nothing wrong with running this story anyway.  If FHA loans are up, it makes sense that oversight staff should be up too, and apparently it's not.  That's a problem, so good for the Post for bringing this up.

At the same time, the Post also tries very hard to make it sound like the increase in fraudulent activity is fundamentally due to a sudden onslaught of shifty mortgage brokers and lousy supervision from the government.  But that's almost certainly not really the case, something that would be immediately apparent if the Post included the one figure that practically screams its absence.  In fact, this statistic is such an obvious one to include that it's hard not to believe that it was included in early drafts of this piece and then removed in order to juice up their story.

That's journalistic malpractice.  Unless the Post reporters who wrote this piece are incompetent, leaving out this basic information was a deliberate effort to hype their reporting and mislead their readers.  That's no way to run a newspaper.

Yesterday, Nicole McClelland pointed out that there appears to be a direct relationship between tie width and economic prosperity, as well as indications that both hemlines and lipstick sales rise when finances fall. It got me to thinking: what other cultural trends might correspond to recessions? Glancing around the iTunes Top 100, there's one recent pop music phenomenon that may be a candidate: the swing, or "shuffle" rhythm. Okay crazy, you're thinking, big band hasn't exactly taken over the pop charts. Indeed, but stay with me: I'm just talking about the meter. In swing rhythms, each beat is separated into triplets, rather than 8th or 16th notes. Most pop music falls into the latter category, but every once in a while you get a track with swing: Gary Glitter's "Rock and Roll Part 2," for instance. However, recently, there has been a barrage of straight up pop hits utilizing the swing rhythm: Katy Perry's "I Kissed a Girl," Britney Spears' "Womanizer," Pink's "So What," and the current #1 song in the U.S., Flo Rida's "Right Round," which manages to add a swing rhythm to the robotic Dead or Alive original. (Listen to these tracks below). This is in addition to alt-rock tracks by Seether and Panic at the Disco, and even a new strain of underground drum 'n' bass that uses swing time, something almost unheard of in electronic music.

Counterparty Risk

What's going on with AIG?  Just in the past few days the entire country has suddenly become outraged by the fact that much of the federal bailout money going to AIG is being used to pay off its creditors. Creditors, in this case, being people who bought insurance via credit default swaps and are now owed payment either for mortgage-backed securities that have gone bad or for increased collateral requirements caused by AIG's downgrade from AAA.  And some of these creditors are other banks!  And some of them are even foreign banks!!!

But look.  Last year "counterparty risk" was practically crowned the phrase of the year.  You couldn't swing a dead copy of the Wall Street Journal without coming across it.  It's the reason we're bailing out all these guys in the first place: if a big bank goes bust and stiffs all its creditors, then there's a chance that they'll go bust too, and before long you have a cascading series of failures that's brought down the entire world.  We tried letting Lehman Brothers — a relatively small bank in the grand scheme of things — go under, and all hell broke loose.  That's why the Fed stepped in a few days later to save AIG.

So why is everyone suddenly acting as if we just discovered yesterday that bailout money is being used to pay off AIG's counterparties?  And that this is some kind of scandal?  Help me out here.  I'm genuinely confused about why, after six months, this has suddenly become the populist outrage du jour.

Nonprofit Journalism

Newspapers have been dropping like flies recently, and because of that a lot of chatter in reporting circles these days revolves around the possibility that serious journalism in the future will mostly be done by nonprofits, funded by foundations and grants. Today the New York Times writes about a San Francisco-based magazine that's followed that model for over 30 years:

Mother Jones has become a real-life laboratory for whether nonprofit journalism — a topic of the moment in mainstream news media circles — can withstand a deep recession.

....Back in the fall, when the economic downturn intensified, and the plight of print publications became more dire, Mother Jones suffered, despite its position of not being in it for the money. Advertising plummeted, down 23 percent in 2008, and some of the big donations the magazine depends on didn’t come through.

Actually, things are better than that makes it sound.  Advertising is a pretty small chunk of our revenue, and overall fundraising has stayed pretty strong, all things considered:

[Jay] Harris, the magazine’s publisher, said the company met its fund-raising targets last year, although before the economic turmoil in the fall the magazine thought it would exceed goals.

But small-time donations and subscriptions have held steady at Mother Jones, to the surprise of its editors, who figured that the downturn would have taken more of a toll and that the election of Barack Obama would have a negative effect on raising money for liberal causes.

About half of the magazine’s yearly revenue is from major grants and donations. The magazine often seeks donations for specific projects, as it did in recent years to staff its Washington bureau at a time when many news organizations had been scaling back there. The bureau opened in late 2007 with eight people.

The Times failed to note MoJo's groundbreaking hiring of new blogging staff last year, but aside from that it's a decent piece about one possible future for investigative journalism.  Namely, us.  Check it out.

(And you should subscribe!  Only 15 bucks for the first year.  Just click here.)

Florists of Conscience

Via Andrew Sullivan, a Catholic conference on Friday came up with an anti-gay position that seems like something Saturday Night Live might have made up:

[Connecticut's] law does not require Catholic priests — or any other clergy member — to preside over same-sex weddings.

However, the church is seeking additional exemptions. For instance, it wants to ensure that a florist opposed to gay marriage on religious grounds not be forced to sell flowers to a same-sex couple.

I don't think a Catholic nurse should be required to assist at an abortion.  I don't think a Catholic charity should be required to provide benefits to same-sex couples.  But now they're suggesting, essentially, that anyone, anywhere, in any business, should be allowed to withhold their services from gay couples?  Give me a break.

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Nalini Nadkarni Speaks for the Trees

It's not like people aren't way into trees; some embrace them, others even live in them. But arguably, neither the huggers nor the Dumpster Muffins of the world do as much for the trees as Evergreen State College ecologist Nalini Nadkarni, who has made a career of defending them. On today's TEDTalk, Nadkarni tells you stuff you probably didn't know about the tree canopy (there's a whole ecosystem up there) and explains why it deserves our attention. The president of the International Canopy Network, a nonprofit she founded in 1994, she's enlisted dancers, rappers, prisoners, and churchgoers to help her spread the tree gospel. Here's a sampling of her projects (H/T TED):

  • ICAN
    Nalini is president of the International Canopy Network, a non-profit built in 1994 to support interaction between all people with a vested interest in the state of the canopy. Clearly, scientists aren't alone in the desire to preserve our environment and this project connects them with educators, activists and more.
  • Biome
    After spending time exploring the treetops at Nalini's invitation in Costa Rica, choreographers for the innovative modern dance group Capacitor created a live show and video performance about their experience. Nalini was credited as Scientific Advisor.
  • Treetop Barbie
    Showing little girls that they can be scientists and canopy researchers too, Nalini and her graduate students collect secondhand Barbie dolls and outfit them for a day in the field before distributing them to eager young minds.

The Skinny Tie Is Officially Back!

Skinny Ties Yes! Thank you, econapocalypse! Photos used under a Creative Commons license from Flickr users endlessstudio, sheenabizarre, spunkinator, goldberg, and tantek.