JP Morgan's Tribal Warriors: Gillian Tett's new book, Fool's Gold, brings an anthropologist's perspective... (via @thedailybeast)

"When the real-estate bubble burst in 2006, derivatives and securities tied to subprime mortgages began to lose value. As it turned out, the fact that the derivatives had spread the risks throughout the system only worsened things. Dubious debt was all over the place, and nobody knew exactly where."

[Sent from my iPhone 3GS]

Love Affair with Telecasters...

I've moved from Les Paul's to Semi-hollow body guitars (Johnny Smith and Carvin) to pointed headed super strats (Hair Metal Red Guild Aviator), custom 7 strings and finally ended up with Fenders  I first fell in love with a Strat and eventually a Tele.

The Telecaster was such a simple and straight forward guitar, but had a sound that just grabbed me.  Even though I'm a basic "classic rocker" the twang of the Tele is magnetic, and even lends an interesting flavor in a straight ahead rock environment.  Needless to say the Tele has been my main guitar for years... but every once in a while I want to try something different and move to other guitars to try new things.  I've finally decided to pickup another Tele to use as an experimentation guitar.  That new Telecaster (Transparent Crimson Red American Standard) is the one pictured here.   

I wanted to take a few pictures before I started to dig in.  I'm going to add Schaller strap locks, locking tuners and a Stetsbar  whammy bar. [Note 08/08/2009: I've opted to go with a Bigsby B5 for the Telecaster.  You can purchase springs of various tension, which will support my heavy strings (.012's).]  Then I'll take it over to The Music Box and have their tech (Mark Wybieralla) refret the guitar with jumbo stainless steel frets.   I use heavy strings and the stainless steel jumbos make bending tolerable. Mark does great fret work.  Finally I'm going to go with a modified Nashville configuration by adding a P90 as a middle pickup.  I haven't decided exactly how I'm going to wire this up, and routing out the guitar cavity is scary so I'll probably noodle this for awhile before I pull the trigger.

Let me know what you think...

Jim Rogers calls most big U.S. banks bankrupt

Jim Rogers calls most big U.S. banks bankrupt | Industry Summits | Reuters
'What is outrageous economically and is outrageous morally is that normally in times like this, people who are competent and who saw it coming and who kept their powder dry go and take over the assets from the incompetent,' he said. 'What's happening this time is that the government is taking the assets from the competent people and giving them to the incompetent people and saying, now you can compete with the competent people. It is horrible economics.'

Gas Below $3, Back to the Big Iron!

Eyes on the Road -
"Jim Ellis Chevrolet in Atlanta has about 120 leftover 2008 model trucks and SUVs to sell. Normally by Halloween, it would have almost none of last year's models lurking on the lot.

That's the bad news. The good news is that buyers are starting to come out of their fallout shelters and take a look at the deals, now that gas is back below $3 a gallon and desperate manufacturers are piling on discounts.

'The last two weeks, our truck activity has picked up,' says Mark Frost, the dealership's general manager. The dealership is promoting big discounts – as much $12,000 off a Chevy Tahoe sport-utility vehicle – and telling business owners that thanks to the economic-stimulus bill Congress passed earlier this year, they may qualify for big tax breaks on vehicles purchased for commercial use.

Even if you bought a regular Tahoe, the huge discounts on offer would offset the difference in refueling costs for about 9 years, at current gas prices."

Yen Dead Star Theory |

Yen Dead Star Theory |
"...At this point, Japan has become a kind of dead star. It’s industrial economy has collapsed. Virtually no one is employed. The country continues to take in goods, but, produces nothing. The JPY is the strongest currency in the world. It’s become a kind of uber-claim on world goods and services. However, it’s also a claim on the dead star of Japan. Which is to say it’s a claim that no one really wants, or can use. It’s likely that during this period, most of the world has panicked into the Yen, thus reversing the multi-decade short position. Up to this point that trade has been the best trade in the world. And then, it reverses...."

The Meltdown... Why?

Robert Reich's Blog: The Meltdown (Part IV)
"Why? Because the underlying problem isn't a liquidity problem. As I've noted elsewhere, the problem is that lenders and investors don't trust they'll get their money back because no one trusts that the numbers that purport to value securities are anything but wishful thinking. The trouble, in a nutshell, is that the financial entrepreneurship of recent years -- the derivatives, credit default swaps, collateralized debt instruments, and so on -- has undermined all notion of true value."

Scramble to avoid collapse - Financial Times / In depth - Scramble to avoid collapse
World leaders are scrambling to finalise rescue plans for their banking systems before stock markets open on Monday, amid fears that the global financial system is on the brink of collapse.
The extraordinary series of moves, which followed record market falls last week, came amid grave concern that investors would scramble for cash this week, threatening the implosion of financial institutions.
Dominique Strauss-Kahn, International Monetary Fund managing director, said: “Intensifying solvency concerns about a number of the largest US-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown.”
Nicolas Sarkozy, French president, said last night: “We need concrete measures, we need unity, which is what we achieved today. None of our countries acting alone could end this crisis.”

"Euthanize Weaker Banks..."

Heard on the Street -

"Injecting capital alone isn't enough. The government also needs to force banks to recognize losses they have so far ignored, require banks to provide fuller disclosure of holdings, push banks to lend to one another again, euthanize weaker banks while helping strong banks get stronger, guarantee deposits and backstop a portion of bank credit.

Above all, the government needs to tell banks that they have to take part in a systemic solution. The time for negotiation by banks is over.

Yet such a draconian approach should also include market-based solutions. The strong should be encouraged to use markets to get stronger, in some cases in conjunction with government support."