Mortgage and credit card delinquencies  

Here a Harvard student attempts to ask Barney Frank a question about his use of TARP money,

Hawaii is the unintended loser in the Class Warfare Front. This article details that since attacking companies for conventions and travel, thousands of room nights have been cancelled in the island state. In the article even the administration admits this was an unintended consequence not aimed at companies who do not receive government money. Really, but the government will not let companies give the money back, at least not until after undergoing various stress tests.

Professor Tom Sowell  lists the books that changed his or might change your mind.  These are topics about the very change and existence of civilization. Dr. Sowell specializes in skewering conventional wisdom, with facts.

I am reading Predictably Irrational about how we make decisions. The blog follows popular culture from a socionmics point of view. Another term for the same idea is behavioral economics. Seems this is a favorite topic of the new White House.  How can they get the mass of Americans to do what they want?  One answer is to put Americans in a 'herd'  we tend to herd and avoid dropping out of the herd. For example, watch any WW II movie and you will be struck at how many people smoked cigarettes.  The health dangers were known for years but it took onerous taxes to really get people to quit. Now that the herd does not smoke cigarettes, the number that start smoking has declined.

Other titles in clude Tipping Point, Nudge, and The Wisdom of Animals. Perhaps this link will work to an article in Time  about how we behave.

USA Today reports that local communities are now printing their  own currencies.  ONe can buy $100 of the currency for say $95. It is accepted at the local shops. This is a depression era idea when communitties had to use scrip as no one had the ability to generate enough money to  use legal tender. It is interesting the idea has spread so quickly.

Were I Tim Geithner I would not be particularly enthused about this idea. As Jim Rogers observes on his trips round the world, when locals do not want their own currency it is never a good sign.

A tip of the hat to Dr. Sam Rock for this article on Behavioral Economics. 

Here in San Antonio we were treated to the first edition of the physically smaller Express News this past Sunday. Not only is the physical size of the paper smaller, the original content contained could probably all fit easily in the Parade Magazine supplement, if one does not count the classifieds as 'original content.'

This came in on our TAMUK e mail, beware Greeks bearing gifts from Washington DC! (Ahem…)

FBI: Internet Fraud Rates Rose 33% Last Year

Consumer complaints to the Internet Crime Complaint Center (IC3), a joint venture between the FBI and the National White Collar Crime Center, rose by more than 33% in 2008 over the previous year. 

The biggest cause for complaint was the non-delivery of goods and/or payments.  The average dollar loss per complaint was US $931 while the average loss from 419 Advance fee scams was US $1,650. 

Some 275,284 complaints were filed last year with the Internet Crime Complaint Center (IC3). In 2007, the IC3 received 206,844 complaints.

The report shows that the nation's capital appears to be home to the largest concentration of online con artists in the country. The District of Columbia ranks #1, just ahead of Nevada and Washington State, in terms of online fraud perpetrators per 100,000 residents, the IC3 found.

The total dollar loss from all 72,940 cases of fraud referred to federal, state and local law enforcement was $246.6 million, with a median dollar loss of $931 per complaint — up from $239.1 million in total reported losses in 2007.

Texas ranked second in the number of complaintants per state, and fourth in the number of perpetrators per state; however, Texas ranked 28^th in the number of complainants per 100,000 citizens in a state, and 26^th in the number of perpetrators per 100,000 citizens.

The full report is available at http://www.ic3.gov/media/annualreport/2008_IC3Report.pdf

( Copies of the 2007 and 2008 reports have been uploaded to the TX-ISAC Library under InfoSec Trend Surveys/ FBI Internet Crime Complaint Center.)

From the Wall Street Journal

MGM Mirage's debt woes are compounded by troubles with the City Center
project under construction on the Las Vegas Strip. MGM Mirage is being
sued by Dubai World, its partner on the project, over mismanagement and
cost overruns. Dubai World, owned by the government of Dubai, skipped
its half of a $200 million March payment that was due to contractors.
MGM Mirage received special permission from banks to make the full
payment on its own.

Well if one can't trust a bunch of oil sheiks, who can one trust?  We mentioned here a few weeks back that City Center was pressed for funding, now MGM is considering selling its Detroit and Mississppi casinos to fund the incomplete project. Good idea?  Not really.

This is the problem with tying a new project to existing successful projects, if trouble arises, one has to sell the good stuff to fund the untested.  MGM may end up selling the cash generating casinos to end up owning, if indeed the whole thing can get funded, an empty retail center. Whoops….

We study captial budgeting in accounting and finance. The reality of what can go wrong is usually glossed over in the just put it in the spreadsheet and start making assumptions textbook problems. We will continue to track City Center as an example of overlooking risk.

Professor Elam Terribly Thoughtful Observation

The 1990s saw America griped with gambling fever. Las Vegas responded with over 100,00 hotel rooms, in an ironic twist, casinos were modeled on past empires, such as the Egyptian Pyramids (Luxor)  and Renaissance Italy. The Southern Baptist Convention was lured to Vegas.  The National Rodeo Finals left Oklahoma for Vegas, everyone is in Vegas. Over thirty states got into riverboat gambling, arresting private citizens that tried to get in on the gambling fever. Convenience stores became and still are neighborhood 'crap games' as people developed lottery winning theories.  The State of Texas took out ads on television advertising the Lottery Tickets akin to country western dancing, the Texas Two Step. Individuals began to think of long term purchases of lottery tickets as akin to dollar averaging in their 401K, after all, both pay off eventually, right?

Station Casinos actually labeled its annual report a few years back using a college course system, what was it, Gambling 101. The report extrapolated their sales trend continuously into the future. The owners were so taken with this idea,they bought the company out and took it private, before the market crashed. And so the gambling fever gripped the hosts of the casinos themselves. The final gamble so to speak was City Center. And now one partner, Dubai,  has already apparently tossed in his cards. 

As Kenny Rogers observed, 

Ya gotta know when to hold 'em and know when to fold 'em.