American Madness

Do you ever feel poor? Like you are just scraping together enough money each month to barely make it by?

Well, now you can see where you rank in terms of world salaries or as they put it on the GlobalRichList:

Every year we gaze enviously at the lists of the richest people in world.
Wondering what it would be like to have that sort of cash. But where
would you sit on one of those lists? Here’s your chance to find out.

Just plug in your salary (it even adjusts for Yen, Pounds, US Dollars, Canadian Dollars and Euros) and they will tell you where you where your slary falls in terms of others in the world.

Little tidbits like “Did you know MIcrosfot CEO Bill Gates has more wealth than the bottom 45 percent of American Households combined.”

Once you see where you sit on the Global Rich List you may be inclined to make a donation to a charity to help those less fortunate (and trust me, there are probably a few people less fortunate than you)
and they have it all set up for you to do so right on the website. Pretty convenient.

FinAlternatives reports:

A hedge fund dedicated to investing in the adult entertainment industry has struck a deal for iPorn, a mobile and SMS pornography provider in the works.

Beverly Hills, Calif.-based AdultVest, which claims its “online marketplace” now exceeds $7 billion in capital available for varied smutty investments, announced that its Priapus Investment Fund acquired iPorn yesterday.

I’ve no idea what the site really does (I’m not about the check it out from work!), but I’m wondering if Apple won’t sue. Wasn’t Apple planning to release the iPorn soon? I think they have it in development but have been stalled trying to get the “touch” screen to work.

(Some racy iPod gags if you search for iPorn in Google images.)

Yesterday’s Senate hearing on commodities (Real Player).

The economists and economic naval gazers at American Madness were blown away by the price JPMorgan paid for Bear Stearns this weekend. But we were more astonished at how the payment was made (with our money…yours and mine).

Well, at least the taxpayer got a good deal! Poor Jimmy Cayne walks away with about 1/100th of what his stock was worth just six months ago, and his billionaire friends have had big chunks ripped out of their wallets. Thousands will lose their jobs. It’s a sad story all around, except that it makes JPMorgan chief Jamie Dimon look like an absolute genius, all the more so because he’s managed to get the so-called financial supermarket idea to work for him, despite the failure of Chuck Prince to do the same at Citigroup (which makes great copy, since Dimon plays the role of Cordelia to Prince’s Goneril in the tale of their plutocratic father Sandy “Lear” Weill).

Many articles will say it better, but our two cents is that this bailout falls high in the moral hazard category. Some financial institutions should be allowed to fail. Some executives should have paid more attention to hedge fund blowups over the summer and less to the sporting life of cards and golf (or, for that matter, to writing movie reviews on their Myspace pages).

Is Lehman next?

In the great tradition of the conquered, much as the French built the Maginot line to protect themselves from a World War I offensive, the U.S. Government has come out with suggestions for how we can best prepare for the last economic war.

“A mortgage broker would be required by law to act in the borrower’s best interest, not his or her own interest,” suggests Uncle Sam. The only problem with this suggestion is that it would create a fiduciary relationship between the Broker and the prospective Borrower. Such a relationship would be anathema to the mortgage industry. (more…)

Filled with insight, and a joy to read!

Thrasher Funds is a mutual fund management company that that is choosing a different marketing ploy to connect with its potential investors.

Rather then targeting your traditional investor, they are looking for the non-traditional (shocking, I know) younger investor. Folks from the Gen-X and Gen-Y groups who are weary of the typical stuffed shirts down on Wall Street and don’t necessarily think that the folks at MErril Lynch hold the same values that they do.

The GendeX™ Mutual Fund was developed and is managed by young adult investors for young adult investors. A group of more than 60 million Gen X and Y’ers largely untapped by the financial market place…until now.

The idea is to capture younger investors who are typically ignored by the power brokers on Wall Street by making them aware of the benefits of investing at a younger age as well as targeting them through their interests and the mutual fund investments.

(more…)

I got an email this morning from an unfamiliar name asking me to please forgive the sender for so quickly sending a second email requesting funds for his charity.

In other words: two emails sent one after another by someone I don’t know asking me for money.

Have you ever noticed how people raising money think that their charity is the only one that matters (because it matters deeply to them) and that they are somehow doing you a favor by asking for your money (as if you don’t have any charitable causes of your own?).

Well, since I didn’t even know the guy, I asked politely how we were related. He responds: “I think you interviewed me for articles several times.” Well, that got me hot in the face. Was it true? If so, I’ve not interviewed him in at least two years (I checked my publication’s database). In the process, I remembered meeting him, at a hedge fund party back in May.

I’m pretty certain that it was the first time we’ve met. Even so, he got my business card, and so without even a “Hi, how are you” he just starts soliciting away.

This is no way to build relationships or ask for money. You’ve got to make people care about your causes, not simply bombard them with requests with no introduction. Relationships are built over time. When my friends in business ask for donations, I’m happy to do what I can.

Also note the pomposity of a highly compensated banker (in this case) asking a journalist to help him raise money. Just the same when these huge foundations boast of the millions their members donate. Don’t let them make you feel small. What little I can give each year is a larger percentage of my much smaller net worth.

When I find this guy’s card, it’s going in the circular file.

My friend and colleague Eric Baum is one of the few ambitiously moral people in this universe. Where for others caveat emptor is the watchword, Baum here notes that Wall Street’s recent failure to embrace the categorical imperative has meant inflicting an unforseen wound on itself.

Blowback
By Eric Baum

The Central Intelligence Agency has a term called ‘blowback’ to describe the unintended consequences of hostile actions. In financial jargon there is no term to describe such quid-pro-quo sequences, but the subprime debacle may prompt financial analysts to coin one (ed: payback?).

Hedge funds and other money managers that cater to institutional investors are running for cover amidst a credit meltdown that is now demolishing equity prices. Financial insiders know the sequence of events that produced multi-billion-dollar losses at hedge funds managed by Bear Stearns and Goldman Sachs. These insiders now expect more damage in the weeks to come.

(more…)

I hope Mike Bloomberg does run for President, because then we’ll get a full accounting of his progress as Mayor. It really just holds academic interest for me, but I don’t think Mike can lay claim to very much in the end. It took a true authoritarian like Rudy Giuliani to turn Times Square into Disney World. Bloomberg has been more adept at polishing the edges.

He’s stopped smoking in restaurants and bars, raised taxes on housing, raised the cost of riding in a cab, tried to foist an unwanted stadium on us, and presided over an extremely benign set of circumstances: a glut of cheap credit powering Wall Street and bringing in mammoth tax revenues, a residential real estate boom arising from said credit, and the emergence of hedge funds as a major force (helping to bump up midtown office prices as the largest aggregation of hedge fund assets are in midtown Manhattan).

I’m probably leaving out some other beneficial factors that were outside Mike’s control.

In the world of hedge funds, about which I write (and should be writing about now instead of posting this!), a good money manager is one who beats the return of the market and does so while taking on less risk than the market. In a regatta, you sail with the wind, and the boat that runs faster than the other boats, and also rocks less, is one to be emulated.

I’m not certain what Mike’s accomplishments have been outside of those we might have witnessed under any decent administrator. But maybe that’s Mike’s claim to fame: that he was decent. I just have trouble feeling a swell of pride over the competence of a billionaire who came to office with practically unlimited resources. Seems like the least he could do…