From January:

Every now and then I meet someone in Manhattan who has never driven a car. I used to wonder at such people, but more and more I wonder at myself.

Today:

One of the biggest boosters of the American auto industry said Tuesday that he was bailing out of his large stake in the Ford Motor Company — a stinging no-confidence vote that raised the anxiety level in this city over the deepening troubles of the Big Three car companies.

By starting to sell off his $1 billion bet on Ford, an investment that is now worth less than $300 million, the financier Kirk Kerkorian joined the growing ranks of investors who have soured on Detroit’s prospects because of plummeting sales and mounting losses.

From somewhere I can't re-find at the moment:

We used to be a car company that also sold financing. Now we're a bank that sells cars.

And also, the ever-relevant Peter Drucker:

Managers have to learn to ask every few years of every process, every product, every procedure, every policy: "If we did not do this already, would we go into it now knowing what we now know?" If the answer is no, the organization has to ask, "So what do we do now?" And it has to do something, and not say, "Let's make another study."

Kerkorian Sells Part of Ford Stake

"Drink Milk and Roll Out!"

She already knows she is overweight. There is no need for you to remind her.

This virus never leaves the body.

She acknowledged that issue would probably lead to a hornets' nest of problems.

There are two typical responses to this information.

One is that famous, barking laugh that punctuates even seemingly mundane sentences. The other is his paean to the wisdom of long-term thinking.

Governments should stop playing doctor.

It is still a sin for a Catholic to consult a witch or a necromancer.

Mr. Rockefeller, Democrat of West Virginia, called the accusations “extremely disturbing.”

The gist is that no one is innocent and that the ends justify the means.

And these cases are, of course, only the tip of the iceberg.

To some, bulletproof fashion is the logical next step.

From the heady days of a bygone era ... a glimpse of the future present.

Problem is, anyone with a camera and a cable network can broadcast a public funeral - and an 82 percent market share divided between four networks and several news channels isn't enough to attract a Bud Bowl. The answer is the F! channel, which will offer definitive coverage of famous deaths - all day and all night. Sure, reruns will attract only the faithful (or the downright weird), but when the world mourns, F! becomes must-see TV in a way NBC execs can only dream of. In much the same way that MTV branched out from videos into other aspects of the music scene, F! will offer original programming as well. F! Unplugged will feature the exploits of Dr. Kevorkian, and Mourning Becomes Eclectic will give viewers a glimpse of "alternative" burials around the globe.

Since most of F!'s programming will consist of filmed public events, costs will be low. The most significant start-up expense will be a publicity campaign aimed at convincing local cable companies to carry F!, though this outlay may be mitigated by a possible partnership with G-SPAN. The steady stream of celebrity death should ensure plenty of free promotion - elaborate outside advertising isn't necessary when the passing of even culturally marginal figures receives extensive what-does-it-all-mean metareporting in the nation's newsweeklies. Rather, the channel will produce effective but inexpensive posters that feature catchy slogans like "Imagine living in a non-funeral country," "Tragedy from 9 to 5, eulogies from 8 to 11," and "You could have talked to your wife any time."

The Pitch | Suck: Daily

Here's the Economist, this week:

A brave man would see catharsis in all this misery; a wise man would not be so hasty.

Susan Jacoby, in her latest book, The Age of American Unreason, wrote:

The greater accessibility of information through computers and the Internet serves to foster the illusion that the ability to retrieve words and numbers with the click of a mouse also confers the capacity to judge whether those words and numbers represent truth, lies, or something in between. This illusion of course is not confined to America, but its effects are especially deleterious in a culture (unlike, say, that of France or Japan) with an endemic predilection for technological answers to nontechnological questions ...

This condition is aggressively promoted by everyone, from politicians to media executives, whose livelihood depends on a public that derives its opinions from sound bites and blogs, and it is passively accepted by a public in thrall to the serpent promising effortless enjoyment from the fruit of the tree of infotainment.

Here's the Economist, again, from back in January:

In all his speeches, John McCain urges Americans to make sacrifices for a country that is both “an idea and a cause”.

He is not asking them to suffer anything he would not suffer himself.

But many voters would rather not suffer at all.

One from Adbusters:

We are the last generation, a culmination of all previous things, destroyed by the vapidity that surrounds us.

Finally, from Gertrude Himmelfarb:

To Carlyle, these legislative reforms were evidence of the incorrigibly utilitarian character of the age, mechanical attempts to cope with spiritual problems. In fact, they were brought about by the combined efforts of Evangelicals and utilitarians -- and Evangelicals perhaps more than utilitarians. The philosophy of the two could not have been more discordant. Where Evangelicalism derived its ethical and social imperatives from religion and morality (a religiously suffused morality), utilitarianism was a purely secular and pragmatic philosophy; the calculus of pleasure and pain that determined the individual's self-interest was presumed also to determine the public interest, "the greatest happiness of the greatest number." Yet this odd couple, Evangelicalism and utilitarianism, so far from operating at cross purposes, managed to cooperate in pursuit of the same social ends.

What next for financial capitalism?

The SEC issued a temporary ban on short sales of 799 financial stocks on Friday, a move against traders who have sought to profit from the financial crisis by betting against bank shares.

"The commission is committed to using every weapon in its arsenal to combat market manipulation that threatens investors and capital markets," said the S.E.C.’s chairman, Christopher Cox.

Those damned bears ...

Like sea lions snacking on Columbia River salmon, it's not the entire bear species causing problems. Bark-peeling is a learned behavior.

"One bear will teach another bear, and then that bear will do it. There are bears that peel and bears that don't peel. We target peeling bears."

Fortunately we've solved that little problem ...

Homer: Not a bear in sight. The "Bear Patrol" is working like a charm!
Lisa: That's specious reasoning, Dad.
Homer: [uncomprehendingly] Thanks, honey.
Lisa: By your logic, I could claim that this rock keeps tigers away.
Homer: Hmm. How does it work?
Lisa: It doesn't work; it's just a stupid rock!
Homer: Uh-huh.
Lisa: But I don't see any tigers around, do you?
Homer: (pause) Lisa, I want to buy your rock.

SEC Temporarily Blocks Short Sales of Financial Stocks

As Decius writes today of "the excesses of recent years", and points out that the Fed has suspended the rules prohibiting banks from using deposits to fund their investment banking subsidiaries, I think of three things:

The mindset of corporate America:

The evidence suggests that from an executive perspective, the most desirable employees may no longer necessarily be those with proven ability and judgment, but those who can be counted on to follow orders and be good "team players."

The mindset of the American public:

The dot-com crash of the early 2000s should have been followed by decades of soul-searching; instead, even before the old bubble had fully deflated, a new mania began to take hold on the foundation of our long-standing American faith that the wide expansion of home ownership can produce social harmony and national economic well-being. Spurred by the actions of the Federal Reserve, financed by exotic credit derivatives and debt securitization, an already massive real estate sales-and-marketing program expanded to include the desperate issuance of mortgages to the poor and feckless, compounding their troubles and ours.

That the Internet and housing hyperinflations transpired within a period of ten years, each creating trillions of dollars in fake wealth, is, I believe, only the beginning. There will and must be many more such booms, for without them the economy of the United States can no longer function. The bubble cycle has replaced the business cycle.

The mindset of the market:

"Soy! Soy! Soy! Soy! Soy!"

What would Peter Drucker do?

Managers have to learn to ask every few years of every process, every product, every procedure, every policy: "If we did not do this already, would we go into it now knowing what we now know?" If the answer is no, the organization has to ask, "So what do we do now?" And it has to do something, and not say, "Let's make another study."

Follow the money.

The media has played a significant role in convincing Americans that offshore drilling for oil in the United States could significantly lower the price of gasoline, according to an analysis released today by the Center for Economic and Policy Research. Even though the U.S. Department of Energy’s Energy Information Agency has stated that the benefits from such drilling would be too small to have any significant effect on oil prices, the media has overwhelmingly conveyed the impression that it could. Media coverage of the issue may have influenced public opinion, with a majority now favoring expanded drilling, as proposed by presidential candidate John McCain.

Does "Drill, baby, drill, and drill now!" really speak for itself? Consider the audience.

Myth That Offshore Drilling Would Lower Gas Prices Gets Boost from Major Media

The engineering enterprise is a pillar of U.S. national and homeland security, economic vitality, and innovation. But many engineering tasks can now be performed anywhere in the world. The emergence of offshoring the transfer of work from the United States to affiliated and unaffiliated entities abroad has raised concerns about the impacts of globalization.

The Offshoring of Engineering helps to answer many questions about the scope, composition, and motivation for offshoring and considers the implications for the future of U.S. engineering practice, labor markets, education, and research. This book examines trends and impacts from a broad perspective and in six specific industries software, semiconductors, personal computer manufacturing, construction engineering and services, automobiles, and pharmaceuticals.

The Offshoring of Engineering will be of great interest to engineers, engineering professors and deans, and policy makers, as well as people outside the engineering community who are concerned with sustaining and strengthening U.S. engineering capabilities in support of homeland security, economic vitality, and innovation.

The executive summary begins:

Spurred in part by a decades-long decline in manufacturing employment, the implications of globalization for the United States are a source of considerable debate. The emergence of "offshoring" -- the transfer of work from the United States to affiliated and unaffiliated entities abroad -- has raised additional concerns about the impacts of globalization. Among the occupations subject to offshoring are highly paid professions, including engineering, that are essential to US technological progress, economic growth, and national security.

The National Academy of Engineering recognizes that offshoring raises significant challenges not only for engineers themselves, but also for industry, educational institutions, government, and professional societies. Many engineering tasks can now be performed anywhere in the world by qualified professionals with access to appropriate connectivity. To sustain and strength US engineering capabilities in this new environment, the United States may need to consider new approaches to education, career development, management, and policy, and make changes where appropriate.

The Offshoring of Engineering: Facts, Unknowns, and Potential Implications

If someone says we're at the bottom, good luck in believing that. We've got a lot of inventory to work through and a lot of loan losses to sort out.

Quote of the week: When asked how to solve the housing crisis, Bill Gross, from PIMCO, replied: "One of the wisest men I know has this serious but admittedly impractical solution: have the government buy one million new/unoccupied homes, blow them up, and then start all over again. Absent that, he's not quite sure what to do, nor am I."

See also, another snippet from Bill Gross:

Bill Gross, bond management genius and head man at Pimco, has recently written that the total write-offs for the mortgage disaster will total $1 trillion. At most, half of that has made it though the financial system.

From the archive:

Because all asset hyperinflations revert to the mean, we can expect housing prices to decline roughly 38 percent from their peak as they return to something closer to the historical rate of monetary inflation. If the rate of decline stabilizes at between 6 and 7 percent each year, the correction has about six years to go before things stabilize, leaving the economy in need of $12 trillion. Where will that money come from?

Mortgage Market Week in Review

That’s what makes speculators a perfect target: by going after them, Congress can demonstrate to voters that it understands their pain, and at the same time avoid doing anything that might require real sacrifice from Americans. Our dependence on foreign oil, together with the fiscal fecklessness that has helped reduce the value of the dollar, means that there is no easy way out of where we are. But in an election year that’s hardly a message that anyone in Washington is going to deliver.

From the archive:

In all his speeches, John McCain urges Americans to make sacrifices for a country that is both “an idea and a cause”. He is not asking them to suffer anything he would not suffer himself. But many voters would rather not suffer at all.

More on suffering:

In the 21st century, we "shy away from death," she says, and we tend to think of a good death as a sudden one. Not so in the 19th century. Dying well meant having time to assess your spiritual state and say goodbye -- which is difficult to do if you're killed in battle.

What's more, there were so many dying: some 620,000 soldiers in four years. As a percentage of population, Faust says, that's "the equivalent of 6 million Americans today."

How could the culture not be changed?

... Her early work centered on the intellectual arguments of slavery's prewar defenders. She wanted to understand how whole classes of people can get caught up in a shared worldview, to the point that they simply can't see.

Continuing:

In the spring of 1863, Lord & Taylor in New York, down on Ladies’ Mile, opened a “mourning store,” where the new widows of the Civil War could dress their grief in suitable fashion.

According to one who was present, Churchill suddenly blurted out: "Are we animals? Are we taking this too far?"

Bush: first of all, we have said that whatever we do... will be legal.

Oily Speculations