Wednesday, December 31, 2008

Holy Leverage?

Is there such a thing as Holy Leverage? I don't think so.

Church debt increased along with other flavors of debt in the U.S. Being the free-marketeer that I am, I think churches should have the same access to capital markets as any other business. Hell, let 'em sell stock if they want. But let's drop the veil of holiness on these businesses, shall we? Like all businesses they should function in the world of bankruptcy, disclosure of executive compensation, hostile take-overs, independent boards, and ... taxes! Just their fair share of course.

Friday, December 26, 2008


Back in the U.S. for a few weeks, I've continued to watch the Madoff situation unfold. There's still a lot unknown here -- not just from that firm but from its feeder firms. I also won't be surprised if some unrelated but similar stories emerge from other hedge funds in the coming weeks.

I spent the first half of 2008 in the U.S. and the second half outside the country. Of course, the housing bubble popped and the credit crunch swept around the world followed by the various related stories like forclosures, bailouts, nationalizations, etc, etc, etc. The global participation was apparent from where I sat in Europe. And while much of the roots of those events were American, I didn't get the sense of widespread finger-pointing at the U.S. And that was appropriate. Sure, American firms were the primary manufacturers of sub-prime mortgages, their securitization, and distribution around the world. But, in my humble opinion, that was a buyer-beware situation. If you buy complex, high-risk securities then you should understand ... well ... the complexities and the risks. The bottom line is that the sellers were selling exactly what they said they were selling. And buyers bought 'em. Maybe it's the wild west of free markets, but personally I don't have a problem with that.

But the Madoff thing is different. This is a case of a seller flat-out lying about what he's selling and prohibiting buyers from assessing the complexities or risk levels. Buyers of shares in Madoff funds appear to have thought they were buying hard assets but, in reality, they bought monthly account statements with made-up numbers on them. And this went on for years and included SEC exams and warnings sounded by third party consultants. The scam succeeded because of lax hedge fund oversight in the U.S. And it is impacting buyers around the world.

This is a truly American export and a really bad one at that. In classic ambulance-in-the-valley-vs-fence-on-the-cliff fashion, the U.S. will implement new, reactive restrictions on hedge funds. This is appropriate but I expect an overreaction (see: Sarbanes-Oxley).

Wednesday, December 24, 2008

More Christmas Eve photos around the 1-8-5. It's good to be home.

Sunday, December 21, 2008

Not So Original

OK - So I must have seen this somewhere (I'm not naming names or households!) - even down to the Ernest Borgnine reference. Guess it got lodged in my long-term memory and popped out as a blog post. BTW - it was on earlier today but no worries ... it will be rebroadcast at Noon on Christmas day.

Saturday, December 13, 2008

Les Marchés de Noël

A few weeks ago these little temporary Christmas villages started popping up around Paris. I've personally seen four of them and my Pariscope magazine indicates that there are at least a few others scattered around the city. The first photo is the Marché de Noël at Saint-Germain-des-Prés and the second one is at Saint-Sulpice. This gives you some indication of how seriously this city takes its street markets: seasonal or otherwise. There is a huge workforce of city employees who set up the little houses, clean up afterwards, etc.

It's been a little strange to watch all the Christmas preparations. As I said to sis a few days ago, sometimes it feels like I'm living inside a Hallmark Channel movie called "A Grandpa for Christmas" (of which I am confident there are at least a half-dozen by that name in rotation on that channel as we speak). Grandpa lives alone in some far away place ... except in the made-for-TV production I will be played by an actor with more of an Ernest Borgnine quality ... wandering the streets of an ancient city - watching the locals set up Christmas trees, buy presents, etc. He long ago closed the doors of his departed wife's (well, she is!) sewing room. He makes dinner alone and consumes a demi-bouteille of Pinot Noir every night. Wait, check that. The Hallmark Channel would never go for the drinking alone part - but the sewing room thing is perfect.

And then through some mystical myrical loosely associated with the Baby Jesus - in our case it's the home leave clause written into my Letter of Assignment compensation package - Grandpa has an opportunity to be reunited with his long lost family and, importantly, the granddaughter he's never met. I mean, without that part it would hardly qualify as a Hallmark Channel vehicle.

But wait, there's a barrier for Grandpa to overcome before he sees his distant family in the new world. Every Hallmark Channel holiday movie has to include this part too. It needs to be some seemingly insurmountable problem imposed by villains wearing neckties who are completely lacking in Christmas spirit. Oh, and Grandpa has to be wearing a red or green sweater at this point (it's contractual). And it should be snowing. In my case, the role of the insurmountable barrier will be played by a transfer at O'Hare the week before Christmas (I'm actually kind of worried about that). But when we return from the final commercial break (Wilford Brimley selling insurance to seniors) a mysterious member of the airport maintenance staff - who may or may not be an angel in disguise - appears to provide sage advice and some type of moral lesson to Grandpa - possibly involving the Pinot. He just barely makes his connection to SFO.

Cut to the tearful reunion with Grandma (played by Morgan Fairchild), the loving daughter (played by Shannon Doherty), and the long-haired spandex-wearing rocker son (Kirk Cameron). Loving daughter places the grandbaby in Grandpa's arms, group hug, tears all around, cue the strings .... and, scene.

Or something like that.

Friday, December 12, 2008

Home Leave Next Week

... and I'm looking forward to seeing these people (and some others too but I don't have pictures of them ...

Saturday, December 6, 2008

Another Saturday Night in Paris ...

... in which I willingly entered a church and emerged without anger, sadness, or snark. In fact I was inspired. I've come a long way.

L'eglise Notre-Dame-du-Travail was the church and I went to hear the Concert de Noël Franco-Allemand. The church was built back in the 18-whatevers and was dedicated to the dignity of the worker (hence the "du Travail" part of the title). That plus a little inspiration from Gustav Eiffel gets you kind of an interesting, stark look. At least it's stark for a Napoleon III era building:

The music was incredible - said to be traditional Christmas music popular in Germany (Allemagne) and France. Of the 90 minutes or so, I only knew one piece: "The Holly and the Ivy" which they performed in English.

Then one shot from the walk home. Many of the Parisian streets are decked out for Christmas. This one is a few minutes walk from Chez Burnett ...