September 27th, 2008

Hat

A software review

For those who care, I have a review of my preferred photo editor up at Terrence Karney Photography.

Mostly, I use LightZone, by Lightcrafts. I have Photoshop, and there are things I use it for (cleaning up spots, printing, and plug-ins, like Blow Up and NikEffects), but it's not my editor of choice.

Why? Because Photoshop is expensive, it's complex, it has a slew of features I don't need, it uses a lot of memory and processor time, and it hogs storage space (to avoid accidentally overwriting a file I don't want to overwrite I have to duplicate every file I open. When it's a 20mb-40mb .tif, that starts to eat a lot of storage, even without having to dupe everything.)



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Paul Newman

It took me a while to warm to him as an actor. First thing I saw him in was The Sting.

But I did, and finally came to understand the fascination with his eyes. It didn't work for me in stills (which is where I kept seeing the paeans), but in a mobile face... incredible.

Not that one can know a celebrity, but he always struck me as a fairly level-headed guy; someone who had managed to come to grips with being filthy rich, without thinking it was because of some incredible merit.

The obit in the Washington Post makes me think this was a good take on it.

Newman continued to act in recent years, notably as the stage manager in a 2002 Broadway revival of Thornton Wilder's "Our Town," but he was certain acting was not his whole life. He said that over the toilet bowl in his office bathroom he hung a letter from a fan -- of his tomato sauce. The letter ends: "My girlfriend mentioned that you were a movie star and I would be interested to know what you have made. If you act as well as you cook, your movies should be worth watching."

Even if the letter writer was pulling his chain... hanging it up, and taking it as read, shows a sense of self I'd hope to have in his shoes.
Pixel Stained

Want to understand the banking crisis?

RDF has kindly explained it all.

Joe goes to the track and bets $2 on a horse.

Two guys standing nearby get into a discussion and Fred says to Sam, “I’ll bet you $5 that Joe wins his bet.”

Next to them are Bill and Bob. Bill says: “I’ll bet you $10 that Fred welshes on his bet if he loses.”

Next to them is Sally. Sally says: “For $3 I’ll guarantee to Bill that if Bob fails to pay off, I’ll make good on the bet.”

Sally then goes to Mary and borrows the $7 needed in case she has to ever pay off and promises to pay back $8. She doesn’t expect to every have to pay since she believes Bob will always make good. So she expects to net $2 no matter what happens to Joe.

A quick calculation indicates that there is now 2+5+10+3+7 = $27 riding on the outcome of the horse race.


That, in a nutshell is what happened.

For bonus points: How much has been invested in the horse race, and by whom?

.... ready for the answer?



Answer:

$50,000 by the owner of the horse who is expecting to recoup his investment from the winnings of the horse and other future deals. Everyone else is gambling, not investing.


And that's both the problem, and part of the solution. The analogy there, isn't really an analogy. Most of the huge losses people are looking at (and the one's they are talking about bailing out) are the people who are gambling on Joe's bet.

Joe is the bank. The people who take out the Mortgage Backed Securities are the guys gambling on Joe's Bet (that the his horse will come in). Sally, Susan, et al., are playing with Credit Default Swaps and other derivatives.

The guy who took out the mortgage? He's the one who owns the horse. If he can't keep it healthy, and fed, and trained (which is what his $50,000 is being spent on), Joe will lose his bet.

So there's a whole lot riding on Joe's choices, (in this example about 13 times what Joe has put up) all so none of the middle players have to worry so much.

Joe collects up a whole buch of bets, and wants the money now. We'll assume Joe is a Great Tout when it comes to playing the ponies, and his picks usually win. They win often enough that he's living off of them (this is why those guy are willing to back his play). This whole thing works, so long as Joe stays careful, because no one will have to pay off, and money is changing hands and everyone is happy.

Once Joe's picks are off.. all those people up the chain, who were gambling; with money they didn't actually have, they are screwed.

So... (if I understand this right)... paying off the mortgages, which keeps people in their homes, lets them stay where they are; not lose their jobs, spend money in the community, buy a new(ish) car every five years or so, would actually fix the problem.

Because that would keep all those folks upstream from Joe from having to pay up; which is good, because they weren't really investing, they were speculating.

Oh yeah, it would be cheaper too; and could be done without handing huge powers over to some tin-pot guru.

Paulson, Bernanke, Greenspan and their ilk spent the last few years selling us pie in the sky about how swell, and safe these complex credit swaps were, and recommending people buy houses they could barely afford with mortgages they could never pay.

Then the creditors got the Bankruptcy Bill passed (mandating debt peonage to those who got in over their heads). Then the ads for reverse amortization loans to first time buyers started running. What a happy co-incidence. Greenspan was touting ARMs, telling the home-buyer they really ought not be so wedded to the fixed-rate loans.

Had to keep the orgy of spending going; and the stones were gonna be bled if they went bust. The Banks said it was a good deal, and banks are in the business of lending money; money which they think will be paid back.

Only they didn't have to worry about it any more, because Fred and Bill and Bob and Sally and Susan have promised them that if the guy with the horse goes tits up: they will get paid, and own the horse.

So what the fuck do they care anymore if the bets are good... they can't lose. Right. The only guy who has a sure thing is the guy running the con. That only works if the con is done right. These dumbshits couldn't even do that; they had no way to close the con down.

Well, it seems they might, and The Blow Off, is being played out in D.C. right now.

(thanks to lyorn, who tracked down the original link)
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