From his bio:

“In 1977, Chairman Cox simultaneously received an M.B.A. from Harvard Business School and a J.D. from Harvard Law School, where he was an Editor of the Harvard Law Review. He received a B.A. from the University of Southern California in 1973, graduating magna cum laude after pursuing an accelerated three-year course.”

Obviously he is so smart he can’t see what is right in front of his own face. And he is way too smart to protect anyone’s money. He’s been asleep at the wheel since he learned how to drive. I say run his ass out of Wall St. now.

But sorry guys and girls. You can’t have it both ways. Either the transition team IS an arm of the government, or it AIN’T.

If it ain’t go ahead and use whatever copyright policies you want, but don’t use a .gov domain because you gotta be a government agency to get one of those.

See: http://www.dotgov.gov/help_qualify.aspx which states,

“Domain names (such as gsa.gov) are used in websites and e-mail addresses to uniquely identify computers and networks. The domain name is the core of an organization’s or program’s Internet identity, their online brand. Managed domain names require the holder of that name to meet certain eligibility requirements. These strict authorization standards help ensure users that they are accessing an official site. Managed domain names include .gov, -NSN.gov, and .fed.US.

Eligibility for .gov
To preserve the integrity of the .gov name space, .gov domains are limited to United States government organizations at the federal, Native Sovereign Nation, state, and local level, and U.S. territories.

Registrations that qualify for a .gov domain

-U.S. Governmental departments, programs, and agencies on the federal level
-Federally recognized Indian Tribes (-NSN.gov domain)
-State governmental entities/programs
-Cities and townships represented by an elected body of officials
-Counties and parishes represented by an elected body of officials
-U.S. territories

Registrations that do not qualify for a .gov domain

-International organizations
-Commercial firms
-Privately owned organizations
-Military entities (except in special cases)
-Local (e.g., city, county, township, or parish) government programs or initiatives
-Cities, townships, counties, parishes, and other local entities that are not represented by an elected body of officials”

Oh and you might want to read this too and see if the www.change.gov is in compliance with all the policies for a .gov domain name: http://www.dotgov.gov/policies.aspx

If it is a government agency (and it almost certainly is a creature of the government, and rightly so), then copyright is entirely moot and irrelevant. Think Freedom of Information Act instead. Oh and you might want to take another look at your privacy policy just to make doubly sure that it complies with the current policies governing federal agency privacy policies on the web.

See: http://www.usa.gov/webcontent/reqs_bestpractices/laws_regs/privacy.shtml

In any case, any minor inconsistencies with Federal policy I’m sure can be easily fixed and the PTT is to be commended for its open approach and taking advantage of Internet technologies to engage with citizens and document its work!

Is it going to be enough just to lower interest rates? Will that get people buying homes again — enough homes to actually absorb all of the excess inventory or at least enough to reduce for sale inventory down to about a 90 day supply? I doubt it. I say it’s going to take something more and I’m proposing what it will take to get things accomplished.

The Way to Mop Up Excess Housing

Here’s  what I propose.

Let’s take two main categories – First Time Buyers and Second Home Buyers.

Why these two categories? Because they are the only ones that count in the home buying business.

New household formations by the children of baby boomers are the driving force in housing demand in the U.S. As they graduate from college, get jobs, gain earning and spending power, many can soon afford to buy a home. Especially those who marry and become two earner households.

Second home buyers are the “heavy users” of residential real estate “products.” They are like housing addicts and we need them.

What About Foreclosed Owners?

Well, what about them? I say no matter what you do to keep the foreclosed owner in their home, very few will succeed. The problem is not with any particuluar owner for any particular home. The home does not care who owns it. What the home needs is an owner who is financially able to pay the mortgage and maintain the home – and that’s what our economy and our credit markets need. If by some miracle of god or fate or government the foreclosed owner can somehow suddenly afford their home, more power to them. But they will be few and far between. Foreclosed homes owned by the others should be sold to owners who can afford them. Which brings us back to the two main categories of owners – first time buyers and second home owners.

For first time buyers who purchase a foreclosed home, I propose something along the line of a 200% interest deduction for the first three years of ownership and then a phase down to 100% interest deduction over the next 3 years. You should have to be otherwise qualified to purchase with at least a 10% down payment. If you stay in the home, stay current in your mortgage payments and real estate taxes and do so for 5 years, you may sell the home without recapture of any deductions. However, if you sell before 5 years, then your deductions would be recaptured in the year of the sale.

For anyone who already owns a home, I propose something similar for those who can afford to purchase an additional home provided it is a foreclosed home and provided they purchase in 2009, a 200% interest deduction for 3 years. Then, in addition, if the home is a rental property and the annual rental income is equal to or greater than 90% of the mortgage payments, you should be able to claim accelerated depreciation based on say 15 years instead of 29 years. The excess deduction and accelerated depreciation should be recapture if you sell the home sooner than, say, 5 years.

I have no idea what the revenue impact on the government would be from these ideas.  I suspect it would be positive or at worst neutral. But quite frankly I don’t care. Tax revneues will take care of themselves when homes are owned by those who can afford them and the economy and credit markets return to some form of sanity.

We might also consider creating a new type of investment company that receives favorable treatment for investing in large numbers of foreclosed homes, say 100 or more, provided they put occupants in the homes.

There are many ways to solve this problem, but I don’t observe much discussion of anything except interest rates and bank bailouts. What are your ideas?

To get this economy moving, we all have to do our part. That means spending money even if you have to borrow it. But credit is tight and there are trillions of dollars sitting on the sidelines and even more in other currencies.

Well you can be a bench player if you want (if you’re a pussy) or you can be a man and get back in the game. There is no margin in stalling or dragging your feet.

The bottom line: If you have cash, you need to spend it or lend it. It’s your patriotic duty not just to your own country, but now to the world, in other words, to humanity itself. 

That goes for individuals, companies, banks, and governments.

How do you want to be remembered? As the miser who hoarded his gold until he died, or as the one who did his part to make the economy right?

You know what to do. So what are you waiting for?

Dan Travers, Product Manager Adaptiv Analytics for SunGard Capital Markets & Investment Banking discusses the need for them in Toward Comprehensive simulation of Complex Credit structures  and advocates for affordable simulators to make them widely available. But this may be more focused on bank risk and derivatives.

And so is Misch’s great post, Monte Carlo Simulation of CDO’s.

What we actually need now, apparently, is a simulator of the entire world economy. Here’s one for the U.S. economy Microsimulation model of national economy – Dan Kozub

The web site for Nations and Firms in the Global Economy by Brakman, Garretson, van Marrewijk and van Witteloostuijn provides some excel spreadsheets that might come close.

 EconGuru has a link to Virtual Bank simulator for the relationship between banks and central banks and bank policies and their affect on the economy.

Maybe these guys at EconomySim will have one when they are finished.

And if the world is finite, this may tell the story.

Apparently there was a World Without Oil game in 2007. Do we need a World Without Credit game next?

 If banks won’t make loans, if they won’t issue letters of credit, how will the economy function? How will commerce take place without these fundamental components and tools of the trade that have enabled trade between parties who are generally unfamiliar with each other?

If the economy breaks down due to lack of trust, and the credit instruments in wide use cease to exist, does that mean we will have to rebuild the world economy and in doing so indeed finally have the “New Economy” as proclaimed, but never materialized, during the Dot Com era?

Is it possible that electronic transactions and the Internet play vital roles in actually solving the problem? Do we really need letters of credit to facilitate cross border transactions and shipment of goods or could the same type of third party escrow service Ebay buyers use come to the rescue?

All the Fed has to do is buy a few tranches of bad loans and presto! the prices they pay become the reference price. At that point, speculation becomes moot and due to draconian mark to market rules, all identical assets immediately are compelled to be revalued at the reference price. That is, all assets IN ALL PORTFOLIOS world wide. Bang! Asset values are reset and liquidity returns.

And all the Fed has to do is buy a few tranches of a carefully calibrated selection of bad loans (e.g. 30/60/90 days past due, 3/6/12 months in foreclosure, etc.) and all like assets in the market are priced accordingly. The prices the Fed paid become in effect a pricing guide to bad loans that will be referred to by all buyers and all asset appraisers.

It might cost the Fed $1 or $2 billion at most to achieve this. If the market balks, then the Fed goes back to the well and buys another $1 or $2 billion. With $700 billion at its disposal, even the shorts will capitulate even if the Fed never spends another dime more than a few billion. The mere fact that the Fed, the $700 billion gorilla, can if it wants to will be sufficient.

McCain is wedded to the government like nobody I know. He is a third generation government employee. In fact, as far as I can tell, he has never worked a day in his life or ever received a paycheck from anyone other than the federal government. Both his father and grandfather were in the military. McCain attended the Naval Academy – a government college, then entered the Navy. When he came back from Vietnam, he took a job as a liaison between the Navy and the government. Then he ran for Congress and then the Senate.

Now he wants to be President. The man will go to his grave never having worked a day in his life for any private enterprise. 

So, his granddaddy was paid by the government, his daddy was paid by the government, he attended a government college, he has only ever been paid by the government and now the government is paying for his campaign financing. No wonder he picked as a running mate the governor of the only state in the country where every citizen is paid by the government every year! The odds of him changing government are slim. He is a creature of government!

Heroics

John McCain is a war hero. But why? Because his plane was shot down and he was tortured in a POW camp for 5 years. Ok, no argument on the facts. But let’s be clear on heroes in the Vietnam War. First of all, there are more likely more heroes among the Vietnamese in that war than among Americans. But among the American heroes surely the men and women who died in the war are the real heros and those who came back – in any shape – are far better off. This does not diminish the courage and bravery that McCain demonstrated nor the torture he endured. No one would wish that on anyone. But there is a limit to the  number of Brownie points McCain gets for coming back from Vietnam.