Betting on Bedlam

As the market continues to flush assets with the "bold look" of Kohler efficiency, I am hoping that Nate Silver revisits his post on FiveThirtyEight.com about the chances of an economic depression. Needless to say, the close of Q1 '09 is going to be ugly...

Honk If You Lack Market Confidence

Welcome back to Two Dollar Bill. I have been neglecting my blog during a whirlwind job change, but it's very good to be back.

This amusing billboard defacement occurred in Lansing, NY, just outside of my hometown of Ithaca. Serious politics aside, the gentleman above is flashing a classic "Joe Biden" smile.

Ella Holden of Lansing photographed this billboard on Route 34B. Someone altered it in the past couple of weeks from its original message against reckless driving.

TARP Goes Tropical

BailoutSleuth.com recently updated its master list of financial institutions that have either received or been approved for TARP funding: 282 companies and counting. Among the Top 50 TARP recipients are Popular, Inc. (a.k.a. Banco Popular) at #27 and First BanCorp at #33, both of which are based in San Juan, Puerto Rico. Apparently the Treasury Department has now taken it upon itself to "outsource" American taxpayer money to banks in U.S. territories. Will offshore banks in the Cayman Islands be the next vacation destination for TARP funds?

#27. Popular, Inc. (San Juan, Puerto Rico) - $935 million

#33. First BanCorp (San Juan, Puerto Rico) - $400 million

Scandalous

Governor Bill Richardson (D-NM) has withdrawn his nomination to Secretary of Commerce amid yet another developing "pay to play" scandal.

A federal grand jury in New Mexico is investigating accusations that Mr. Richardson’s administration gave substantial contracts to a California financier who contributed heavily to the governor’s political action committees, The New York Times reported last month, citing a person familiar with the grand jury proceedings.

Questions about the contracts almost certainly would have been raised in Mr. Richardson’s Senate confirmation hearings.

Since August, federal investigators have been examining how the California company, CDR Financial Products Inc., won two consulting contracts in 2004 worth about $1.4 million to advise the state on a large bond issue.

Newark Murder Rate Dropped 30 Percent in 2008

Click here for the NYT article. If you are looking for a political bull market in 2009, Cory Booker's stock is likely to continue its ascent (barring any scandals of course).

The GDP & the Insufficiency of Econometrics

Click here for "GPD: RIP?". This article appears in Cornell Enterprise, the official academic journal of The Johnson School of Management at Cornell University.

The Gross Domestic Product is one of the most closely watched and often-quoted economic statistics. But it's also among the most misleading. The GDP is supposed to measure the total output of goods and services, and yet it fails to count the multi-billion-dollar black market and the enormous economic contribution of child rearing. It registers growth even when that growth is built on an unsustainable foundation of pollution, depleted natural resources, and ruinous borrowing. It can lend the appearance of widespread economic prosperity even as the ranks of the poor expand...

Happy New Year!

Happy New Year!

Holiday Humor

Click here for Economix's 2008 year-end financial-and-economic humor round-up.

Click here for The Big Picture's review of 2008 investment forecast guides.

BusinessWeek's #3 Worst Prediction About 2008:

"I think this is a case where Freddie Mac (FRE) and Fannie Mae (FNM) are fundamentally sound. They're not in danger of going under…I think they are in good shape going forward."
—Barney Frank (D-MA), Chairman of the House Financial Services Committee, July 14, 2008

Two months later, the government forced the mortgage giants into conservatorships and pledged to invest up to $100 billion in each.