Tuesday, January 24, 2012

Sovereign Default

This is exciting; George Mason University is having a symposium on how
a sovereign default might play out in the United States.

Not everyone is playing osterich.

Monday, January 16, 2012


National Defense Authorization Act for Fiscal Year 2012

The president may now use the military to imprison anyone associated with a dangerous group, in secret, without access to an attorney.

As always, governments are the greatest danger to their citizens. I fear a government responding to a subversive message (such as this blog post) much more than I fear a religious zelot in a remote part of the world wearing a homemade explosive belt. The latter are in relatively short supply, poor, and disorganized. The former are ubiquitous, the most economically powerful entities in existence, and highly organized.

Thursday, January 12, 2012

More student loan paranoia

So the student loan asset backed securities (ABS) market is roughly one fifth the size of the home mortgage ABS market. Arguably, that means that a collapse in the student loan market would necessarily have less deleterious effects than what we saw in the mortgage crisis. However, I suspect that a large portion of the student loans issued have co-signers who have mortgages (ie, their parents). If this is true, a collapse in the student loan market should put further strain on the mortgage market, as co-signers who are legally required to pick up the slack in their co-signee's loan payments become less able to afford their mortgages. In that light, the un-expungebility of student loans takes on a new, darker tone. 

Actually, I don't know the law on that subject: if a student has a co-signer on their student loans, and the student declares bankruptcy (or even dies), does the co-signer become responsible for the loan? I would imagine that they do. What if the co-signer also declares bankruptcy? Based on the logic of student-loans, I would expect both parties are still on the hook. This hasto have already been played out in court, what has been the result? It's now that I wish I had a clan of loyal followers and commentators who would dig up the answers to such questions, as seems to happen on popular econ blogs.  

Wednesday, January 11, 2012

The Economy

Fun quote from Moody's chief economist, Mark Zandi: "I don't see anything different happening in the economy whether Romney or Obama are the next president. they're pretty much the same. If some of the other more bizarre republican candidates were elected, well then we'd have to reconsider things."So there you go: that's why you don't want to pick the "electable" guy just to get Obama out of office: he's substantively the same. Just rides to town on a different animal. On the other hand, Zandi dismissed my worries about the implosion of the student loan market, saying that "sure, a big portion of that trillion dollars worth of federally subsidized, need-based debt is going to default, but its on the books of the federal government. So it will be a big problem for tax payers, but its not going to impact the financial system like the mortgage crisis did."

I'm sorry to say, my worries were not allayed. Aside from default on government-held assets being a fairly big problem in this era of our government constantly running out of money, I'm not convinced that they're really on the government's books anyway. Sallie Mae, who I believe is the initiator of this trillion dollars of risky debt (correct me if I'm wrong), regularly issues asset backed securities. As often as twice a quarter, and they're not small issues.

I'd like to know who's holding them, because presumably the risk is on their books, not the federal government's. Their site is currently crashing as I try to investigate; awesome sign. But even then, the buyers of the ABS's likely aren't the ultimate bearers of the risk; it would be dumb of them to not buy insurance on these risky assets (ie, credit default swaps).

Zandi didn't answer my more specific question: "Has a market emerged for credit default swaps on student loan asset backed securities?" Which is unsurprising if he was unaware of the market for ABS's. I suspect the market is there, it just hasn't made the news yet.

Then again, I may be ignorantly misunderstanding the whole situation. I would invite enlightenment from anyone who's more well-versed.

Monday, January 9, 2012

Pumpkin Carving

See this? Its the trophy for the scariest pumpkin at my work contest. Damn right.

Our friends Julie and Joe invited us over for pumpkin carving before halloween. I surprised myself by carving this little bastard:

Pretty effing scary, amirite? I was just looking at picture of a skull for that one. Later, I found out there was a pumpkin carving contest at my work, and I decided to up the ante. I had visions of incredible flaming skulls, ala the famous Metallica skull:
I invited some friends from work over, had some beers, and set to work. The big pumpkin I got from work totally disintigrated in the attempt. Its the thing upside down on the bottom in the picture below.

Having not succeded with the big pumpkin, I resorted to using the one I had already made, and a smaller root vegetable. On top is one I carved out of a rutabega using a sketuchup 3d model as a guide. Its pretty awesome, but I got tired of carving radishes for the teeth so they didn't work out quite so well. I ground up some boiled beets and poured it over the top of the original skull, which, I think you'll agree, looks pretty gruesome.

I had frozen them for preservation, and after they melted this is what happened:

Even more wicked, eh?

And then, incongruously, heres a picture of Rachael and I in front of the Bahai temple in Wilmette. I've been growing a beard for like two months and I'm already weirded out by the pictures of myself without facial hair.


Pictures from San Francisco!Rachael and I at the highest point near SF, looking out at it!
Rachael and I under a big awesome dome thing!
Rachael and I on the middle of the GGB!
Rachael and I and Kim and Ben near the GGB! Kim and Ben were amazing hosts. They shared their house with us, they cooked for us, they took us around their city, they took us along the coast, they took us to a farm, they played games with us, they drank with us, and they let us play their dog. They made it an awesome trip. Thanks guys, it was you.

Rachael and I are Engaged!

I finally popped it a few weeks ago. We were on a Battlestar Galactica marathon, and in between episodes she teased me by getting down on one knee and taking my hand. I was like "Whhaaat are you doing?" She said "just showing you what its like to think something is gonna happen, and then it doesn't." (This because I had been showing her progress on the wedding bands as I made them, and I handed one to her when I got it cast... in retrospect I see why this may have been sort-of a confusing thing to do).

This cut me to the quick, and started me thinking (while the next episode was playing), "why am I delaying anyway? I've got rings, why don't I just propose now?" So at the next break, I snuck off and got them from the drawer next to our bed, got down on one knee myself, and asked her if she'd be my wife. Happily, she said yes. Well, actually she first asked how she could know that I was serious, since I'd given her the rings once before, but she was apparently satisfied with "'Cause I'm really serious."

We're thinking of getting married in mid July; its the soonest thing that works out well scheduling-wise. We'll probably do it in Cincinnati, that being the birthplace of our epic love, home to a lovely garden with waterfalls (the Campus Green on UC's campus), and locale of my favorite hangout (Baba Budans, with whom we're in negotiations with for as a reception-place). Failing that, we're gonna spend the money we'd otherwise blow on a party on a sweet honeymoon.