CHARLIE WILSON’S WAR
I loved this movie: a great (largely true) story, great acting, great dialog; funny, sexy, gripping, enlightening, important, relevant.
THE FARNSWORTH INVENTION
I loved this play: the story of the invention of television. Of course, seeing a play on Broadway costs about $1,000 more than seeing a movie (airfare, cabs, hotel, and the ticket). But if you’re in New York anyway, well . . . it’s still expensive.
The subhead’s in Christmas colors (though still more red than green), because we got an early gift Friday from Goldman Sachs.
Some of us originally bought First Marblehead, which makes private student loans, at around $25. We watched it go up to $56 earlier this year, at which point I ran items headlined, ‘Don’t Sell Your FMD.’ By which I meant (in case you missed the subtlety): ‘Do Sell Your FMD. And Then Buy It Back December 20 at $11.’
FMD fell as low as $11.01 Thursday. Friday, Goldman Sachs arranged to buy up to 19.99% of the company and provide a $1 billion line of credit, sending the stock up to $18.76 (and giving Goldman a one-day 66% paper gain on its investment).
If the stock ever gets back to $56 and beyond, Goldman will have looked pretty smart. The risk is that the shorts are right and Goldman is wrong and that there’s no big money to be made providing student loans – or that if there is, First Marblehead is not properly positioned to make it.
To me – with money I can truly afford to lose (and now, on paper, partially have) – the big picture is that there probably will continue to be a huge and growing market for private student loans . . . and that First Marblehead has more expertise than its competitors at underwriting those loans, so is best positioned to make it.
This is a separate disaster, down to $14 on Friday from $35 where I suggested it. I hope it, too, may one day bounce back. But it’s different. The crazy lending practices that abetted the housing bubble were real – and chickens are coming home to roost.
(By contrast, nothing specific has happened to erode the long-term value of student loans, so far as I know. Years from now, students will owe their balances; their parents, who co-signed for the loans, will still be on the hook; and, at least under current law, even bankruptcy won’t extinguish the debt. So if college grads have decent income prospects, lenders may over time be repaid – the current financial crisis notwithstanding.)
The banks won’t go under as a result of the mortgage crisis; but the current shareholders of some banks could find themselves wiped out. I hope that will not include the shareholders of Washington Mutual, because I still have my shares, but the crisis is far from being played out. As with FMD, we’ll just have to wait and see.
Our warrants closed Friday at $3.10, more than double what we paid for them. (I just figured I’d throw that in to make myself feel better.)
GREEN GUMMI BEARS
Dai: ‘I typed ‘green gummi bears’ into the firefox window and unfortunately the site that popped up was yours. Upon reading your article, I was infuriated. To put it mildly, I LOVE gummi bears, and I can go through 10 bags a week because I only eat the green and white ones. THE GREEN GUMMI BEARS ARE THE BEST. I crave them and buy bags and only eat the green ones. This Christmas I received a 5lb bag of ONLY green gummi bears, which is the best present I have ever received. I just wanted to inform you, that the REAL gummi bear makers, not the care bear but HARIBO, make green ones strawberry, which is the best brand – so before you go and make an economic statement using gummi bears as your example – please do a little more research for the gummi bear fanatics of the world. Thank you and have a happy holiday.’
☞ Well, leaving aside the fact that you opened your Christmas present early, which already calls your character into question, I refer you to the second hit that shows up when I search on ‘green gummi bears,’ which is this one, a taste-off that hardly paints Haribo’s green gummi (‘the least flavorful of them all’) in an award-winning light. ☺
(It frightens me that I inserted a smiley face, but ’tis the season and all that. I just can’t help myself. Ho, ho, ho.)
A CHRISTMAS EVE MESSAGE
All right, a two-days-before-Christmas-Eve message, when he sent it, but still:
Bob C.: ‘Indeed, it is a grand time to be rich in America, but it isn’t so bad to be poor in America, either. Consider that the poor don’t have to buy liability insurance. Who in their right mind would sue a poor person? Have you ever been involved with an accident with a person too poor to carry automobile liability insurance? No fun. The poor don’t have to have health insurance. They show up at the Emergency Room and can’t be turned away. Those of us that do have health insurance have high premiums reflecting the non-payers. Their children get preferential treatment in applying for scholarships and financial aid at educational institutions. They can get free food from food banks largely manned by ‘rich’ volunteers. I’ve been there and rarely do I see poor people working as volunteers. The poor pay little or no income tax. If they are liable for any tax, they could easily disregard it because the IRS wouldn’t pursue the debt in favor of going after the big pocket accounts. I would also guess that the poor would vote for the Democratic Party, because it is more likely to propose laws offering hand-outs and tax increases for the working, tax paying stiffs. As Grover Cleveland noted, ‘Once the coffers of the federal government are opened to the public, there will be no shutting them down.’ I suspect that I will be labeled ‘mean-spirited,’ which is getting to be trite; but I was irritated seeing the subject phrase so often in your interesting daily column.’
☞ I guess it’s a balance. You seem to feel things have swung too far in favor of the poor and working poor. Reasonable people can disagree – and obviously do.
I would point out, though, that emergency room care for your children really is not the same as having a doctor you can go to with an appointment for annual checkups and preventive care and all the rest. And lining up for free food at a food bank – while I expect we’re both pleased America doesn’t allow people to starve in the streets – isn’t so appealing that many people actually are content making this their long-term strategy. (On top of that, please note that no Democrat I know of has proposed raising middle class taxes.)
Your view IS best served by voting Republican. Mine, by voting Democrat. Thanks for your thoughtful feedback. Happy Holidays!
Quote of the Day
A veteran Massachusetts politician not so long ago was horrified at the conduct of a less savvy colleague who was indicted for bribery: 'Imagine taking money from a stranger.'~Wall Street Journal, 10/14/93
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