Emanuel Derman wins the day with this:
I had a fantasy in which the Fed and the TSA (Transportation Security Administration) switched roles.
If a bank failed at 9 a.m. one morning and shut its doors, the TSA would announce that all banks henceforth begin their business day at 10 a.m.
And, if a terrorist managed to get on board a plane between Stockholm and Washington, the Fed would increase the number of flights between the cities.
Bill Radke is some kind of genius. Whose bright idea was it that news should be delivered in prose, anyway? This poetry thing is seriously disruptive technology.
Marketplace Minute 10/16/09 from Marketplace on Vimeo.
It seems so obvious: of course John Bird and John Fortune should simply appear directly on FT.com. Go watch their latest George Parr interview, it’s fantastic:
GP: You can’t have it both ways. Everybody says that banks have got to be boring. Well, you’ve got to have an incentive to be boring.
There’s also a wonderful explanation of how securitzation works, at about 5:30.
GP: We thought we’d found a way where even if house prices didn’t go on rising forever, we wouldn’t have to worry about it.
Q: This is securitization.
GP: Securitization. You see, the problem about lending money who don’t have a glimmer of a chance of paying it back is that there’s a risk.
Q: That they won’t be able to pay it back?
GP: That’s not a risk, that’s a cast-iron certainty. No, no, the risk is that in some very complicated way the bank will lose money. Now what happens with securitization? You see before securitization, we could see the risk. It was there. We had it. And then, after securitization, what that did was, whooooo. The risk was sort of out there. Somewhere. Nobody knew. Then we looked back, and my god, it was still there after all!
Clever, that.
Via Paul comes this montage of highlights from the people who brought you the Everything is OK series. What makes it especially fabulous for me is the fact that a large chunk of it takes place right outside Reuters HQ in Canary Wharf. Obviously, you shouldn’t watch it. Do your job instead. Or go shopping. One or the other.
