Sylvia Chappell Memorial Fund at

Sylvia ChappellSeveral people have asked if there is some memorial that they could donate to in memory of Sylvia, so I have set up an account at the micro-lender in her name.

Anyone who is interested can just send a gift certificate to

I will lend the money out to third-world entrepreneurs in her name, and as the loans are repaid, will initiate new loans to new entrepreneurs.

You can track the progress of the loans initiated by the fund here.

…and isn’t this a lovely photo of Sylvia, by the way? Look at that smile!

This American Life — “Bad Bank”

Where you’ll hear a former IMF economist paraphrase a global bank’s recent strategic white paper as:

“That sure is a nice global economy you’ve got there…
…Be a shame if anything were to happen to it…”

This is the third big program on the economy from the This American Life/National Public Radio team that brought you The Giant Pool of Money and Another Frightening Show About the Economy.

Listen to the full episode by going to the Bad Bank program page at This American Life,
and hit refresh if you don’t see the Full Episode download link.

“Bad Bank”
February 27, 2009

Toxic Mall Wife

I must write up the wonderful Saturday that I had with Industry Figure Larry Helmerich, but this is…well, easier, and I really laughed at the metaphor:

Here, ladies and gentlemen, is the crux of the problem: We are reliably informed that whatever part of the economic crisis can’t be pinned on Wall Street — or on mortgage-related financial insanity — can be pinned on consumers who overspent. But personal consumption amounts to some 70 percent of the American economy. So if we don’t spend, we don’t recover. Fiscal health isn’t possible until money is again sloshing into cash registers, including those at this mall and every other retailer.

In other words, shopping was part of the problem and now it’s part of the cure. And once we’re cured, economists report, we really need to learn how to save, which suggests that we will need to quit shopping again.

So the mall we married has become the toxic spouse we can’t quit, though we really must quit, but just not any time soon. The mall, for its part, is wounded by our ambivalence and feels financially adrift.

Read the Full Story at the New York Times (while they’re still a going concern!)
“Our Love Affair With Malls Is On The Rocks”
January 31, 2009

Outstanding Article on the Financial System Failure

I especially liked this part:

…Indeed, one of the great social benefits of the Madoff scandal may be to finally reveal the S.E.C. for what it has become.

Created to protect investors from financial predators, the commission has somehow evolved into a mechanism for protecting financial predators with political clout from investors. (The task it has performed most diligently during this crisis has been to question, intimidate and impose rules on short-sellers — the only market players who have a financial incentive to expose fraud and abuse.)

…and this one:

And here’s the most incredible thing of all: 18 months into the most spectacular man-made financial calamity in modern experience, nothing has been done to change that, or any of the other bad incentives that led us here in the first place.

Read the full story in the New York Times
“The End of the Financial World as We Know It”
January 3, 2009

About the authors: Michael Lewis, a contributing editor at Vanity Fair and the author of “Liar’s Poker,” is writing a book about the collapse of Wall Street. David Einhorn is the president of Greenlight Capital, a hedge fund, and the author of “Fooling Some of the People All of the Time.”

Tanta Passes Away

From the New York Times:

The blogger Tanta, an influential voice on the mortgage collapse, died Sunday morning in Columbus, Ohio.

Tanta, who wrote for Calculated Risk, a finance and economics blog, was a pseudonym for Doris Dungey, 47, who until recently had lived in Upper Marlboro, Md. The cause of death was ovarian cancer, her sister, Cathy Stickelmaier, said.

Tanta used her extensive knowledge of the loan industry to comment, castigate and above all instruct. Her fans ranged from the Nobel laureate Paul Krugman, an Op-Ed columnist for The New York Times who cited her in his blog, to analysts at the Federal Reserve, who cited her in a paper on “Understanding the Securitization of Subprime Mortgage Credit.”

Read the Calculated Risk post about Tanta’s passing.

See an earlier post that featured Tanta in her heydey.

-55% is the new -40%

Christopher Thornberg, the most bearish of the housing experts quoted in the Los Angeles Times earlier this year (predicting in March that Southern California home prices would eventually fall 40% from their peaks), now expects that prices will keep dropping throughout 2009, until they’ve fallen 55% from their peak.

Even I found that a sobering estimate.

That would mean that the median Southern California home price will have done this:
    $505,000 (top $) July 2007
    $300,000 (-41%) October 2008
    $227,250 (-55%) Eventual Bottom

There’s also a table, showing various regions in Southern California, and along with sales and price figures compared to a year ago.

Read the full story in the Los Angeles Times
“Price of Southern California homes falls 41% from peak”
November 19, 2008

Hat Tip: Larry Helmerich

Unintended Consequences
(You Push In Here, It Pokes Out There)

From the Financial Times:

US mortgage rates have soared this week in an unexpected reaction to the latest Treasury financial rescue plan, which has prompted investors to buy bank debt and sell bonds backed by home loans.

Interest rates on 30-year fixed-rate mortgages, as measured by, rose to 6.38 per cent on Thursday from 5.87 per cent last week – before the Treasury said on Tuesday that it would take equity stakes in banks and guarantee new bank debt.

Investors responded to the new guarantee by buying existing bank debt, reckoning it could be refinanced with the new government-supported bonds. As they did so, they sold lower-yielding paper issued by Fannie Mae and Freddie Mac, the mortgage companies put into government conservatorship last month.

The sales of Fannie and Freddie paper pushed up yields on their debt, which is backed by mortgages. This, in turn, pushed mortgage rates to levels not seen since the government took over Fannie and Freddie on September 7.

Fannie and Freddie had been taken into conservatorship by their regulator to help keep mortgage rates low and – it was hoped – revive the housing market.

However, the opposite is now happening, making it more difficult for struggling homeowners to refinance their mortgages and for prospective homebuyers to get financing.

As a result, house prices may fall further before they find a bottom.

Oh yeah, baby — will they ever.

Read the Full Story in the Financial Times:
“Treasury plan pushes up US mortgage rates”, Mark 2

A previously-unknown Swiss guy, Yves Kilchenmann, contacted me out of the blue about buying my old domain,, and eventually we agreed upon a price, which is enough to put me into, for instance, a nice LEGO robotics set (actually a Danish product, but very possibly what I’m going to spend the money on).

Their building, in Switzerland:
The LiveSystems Building in Switzerland

Ooh…looks like I could have asked for more money, rats.

If you’re wondering about how strangers go about transacting a domain sale, we used, and I was extremely pleased with their service — really great, I’ll totally use them again.

Here’s a link to an automatically translated version of the new site, via beloved Google.

Calculated Risk: Why the FDIC Fears Bloggers

I’ve probably mentioned before my admiration for the great financial blog, Calculated Risk. They’ve done a terrific job of publicizing and quantifying the Doom.

There was a funny editorial cartoon referring to it, drawn by Eric G. Lewis, a freelance cartoonist living in Orange County, CA.

You need to know that Calculated Risk is written by two people: a man (a retired–and anonymous–executive of a public company), who posts as Calculated Risk, and a woman (a former bank officer), who posts as Tanta:

Why the FDIC Fears Bloggers.