It Was Never About Credibility

S&PThe always interesting, occasionally brilliant Matt Yglesias published one of the best headlines ever, S&P Legal Defense—No Reasonable Investor Would Take Us Seriously. (For the time, I will ignore his outrageous misuse of the em-dash; it should have been a colon.) The article is about the $5 billion civil case against Standard & Poor’s. The case against them is that they weren’t acting as a rating agency; they were just giving firms whatever ratings they asked for. Their defense is that their claims of objectivity are nothing more than “puffery.” And yes, that’s the word they use.

Yglesias argues that if this is the case, it is time to get rid of the credit rating agencies. He wrote, “That need to maintain a credible brand should give raters a financial incentive to avoid giving positive ratings to bad products even if they’re being offered money to do that. But this entire logic rests on the theory that claims to objectivity and independence aren’t puffery—that they’re actually at the core of the ratings agencies’ business model.” So let’s get rid of them. That’s his take away from this whole thing.

Ah, Grasshopper! Your naivete is charming. The credit rating agencies were never given their power because they were credible, although at one time they might well have been so. They were always given power to pronounce this or that investment good or bad because they were the right kind of people. All one really needs to reasonably assess an investment’s value is some investigators and mathematicians. Given this, ratings agencies ought to be pretty easy to start. But there are only three of them. Being accurate has nothing to do with being “credible” on Wall Street. “Credibility” is all about being one of the boys.

Clearly, we need rating agencies. If people are going to invest a lot of money, they need a way to gauge that risk. But the way the system works is exactly the opposite of the way it ought to exist. Even Yglesias seems confused on this point; he wrote, “As a theoretical matter, the business model in which the issuer of a security pays a ratings agency to evaluate it can make sense.” Really?! I would think that as an investor, I would want to hire my own firm to judge the investment. That way, I would know that I wasn’t hiring some lackey paid by the investment seller to say that I was buying a AAA investment when I was really buying junk bonds.

Yglesias is right that the rating agencies ought to go the way of the Dodo. But they won’t. In fact, the system won’t even be reformed. If S&P ends up having to pay $5 billion for their bad ratings, it won’t change its industry standing, other than making it even more “credible.” Dean Baker presented an excellent way of using the existing system in a way that didn’t facilitate corruption. Instead of allowing the bond issuers to hire whatever firm they want, have the government randomly assign a rating agency. That would be simple and efficient and fair. But the bond issuers would not like it, because it would stop them from gaming the system. And the rating agencies would not like it, because it would stop them from getting extra money by telling their employers what they want to hear. And given that, nothing will happen.

Have I told you recently that we don’t live in a democracy?

Decapitating Generals for Fun and Profit

Artemisia GentileschiFrench fabulist Jean de La Fontaine was born on this day in 1621. The inventor of Coca-Cola, John Pemberton was born in 1831. Injured in the Civil War, he became addicted to morphine. In order to cure himself, he came up with Coca-Cola. I don’t know how successful the cure was for him, but the temperance ladies just loved it. The founder of Standard Oil, John D. Rockefeller was born in 1839. And his grandson Nelson Rockefeller was born on the same day 69 years later. The great archaeologist Arthur Evans was born in 1851. And Mitt’s dad, George W. Romney was born in 1907. That was in the days when Republicans weren’t so willfully evil.

Lots of Hollywood birthdays today. Jeffrey Tambor is 69. Here he is as hilariously creepy-insecure Hank on The Larry Sanders Show:

Anjelica Huston is 62. Here she is as Maerose in Prizzi’s Honor:

Kevin Bacon is 55. I think he is rather good, but I can’t think of anything to link to. And Jaden Smith is 15. He’s the only one I don’t consider an actor. I would more characterize him as a precocious child with greedy parents who can’t allow any dollar to slip outside the family to a child actor who might be able to use the job. The entire Smith family is one of the most slappable in Hollywood.

The day, however, belongs to the great Baroque painter Artemisia Gentileschi who was born on this day in 1593. She was one of the greatest painters of her generation, and the first woman to become a member of the Accademia di Arte del Disegno in Florence. Apart from having an amazing talent, she is known for her paintings of strong (if often suffering) women. She was particularly fond of the Biblical story of Judith. Judith - Artemisia GentileschiIt is really only accepted as canonical by the Catholics and Orthodox churches, which is sad because it is a bloody good story. The rest think it is non-historical, as though that isn’t true of a huge amount of the Bible. Anyway. The Jews are at war with the Neo-Babylonian Empire. So Judith goes to their camp and gets in good with their general, promising intelligence and most likely sexual exploits. One night when the general is in a drunken stupor, she sneaks into his tent and cuts his head off. Then she brings it back to her countrymen to urge them on to victory. Gruesome, but you can see why the story would find an audience.

We can assume that Gentileschi didn’t go around decapitating sleeping men, but she must have been an extremely strong women. It isn’t just a question of her thriving during a period when women were allowed to do very little other than menial jobs and baby making. She painted strong women too. According to art historian Roberto Longhi, “There are about fifty-seven works by Artemisia Gentileschi and 94% (forty-nine works) feature women as protagonists or equal to men.”

Happy birthday Artemisia Gentileschi!

Google Space Alien Game

Space AlienI have a fair amount of respect for conspiracy theorists. But I often have big problems with specific conspiracy theories. I most hate the JFK assassination conspiracies. But a close second are the Roswell conspiracies. In fact, pretty much all UFO conspiracies are based on the belief that the military does not have equipment flying around that they would prefer not to talk about. Roswell certainly falls under this; it seems to have been some kind of equipment tethered to a balloon that crashed. And I don’t doubt that it was exactly what the authorities claim: weather monitoring equipment.

Regardless of all this, I think I could put up with a whole lot of conspiracy theories if I got as a reward the great Google Doodle celebrating the 66th anniversary of the first report of the Roswell “incident.” It is a little game and it’s a lot of fun. Sad to say, I’ve spent a lot of time playing with it. Click on this image and the app will load in a new window:

Google Doodle - Roswell 66th Anniversary

Now I’m going to tell you everything I’ve learned from my many minutes of playing the game. But just to protect your fun, I’ve put all that wisdom below the fold.

What is great about this doodle is that it is complex enough that I’m not at all sure I’ve gotten to the bottom of it. The idea of the game is that you are an alien from another planet when something goes wrong with your spacecraft and you crash land in Roswell. You spaceship breaks in three parts and you must collect them to put it back together so you can continue on your space alien way. As you crash, the game shows you where the pieces fly to, but you will have to go rather out of your way to collect them.

Fun Solution

Thus far, I’ve determined two primary ways to win the game (there are variations that I will leave to you). First, I will describe the more involved version because it is more fun. You can’t walk anywhere without running into the top of your ship, so that’s a gimme. The best plan is to move off to the left. This will lead you to a cow. Click on its leash. This will give you the rope, but also allow the cow to wander off and uncover a hole in the ground. Click on the hole in the ground. You will fall down in it where you will see a radioactive gas can and a bean stalk. Click on the gas can to store it. Then apply the gas can to the bean stock. This will cause it grow and you can climb out.

Now you are back with the cow. You don’t need to bother with the cow anymore. However, if you are a playful space alien like me, you will apply some radioactive gas on the cow. (Don’t worry: it doesn’t hurt the cow!) Now you should head to the right, either with a normal or radiated cow. You will pass by your crash site. Keep right on moving. Eventually you will come to a barn. Move to the window on the right side of the barn. Above it, you will see the middle section of your flying saucer. It’s almost within reach! Click on the window and it will open. Inside is a horse. Irradiate the horse! It will grow very big, causing the piece of your ship to fall down where you can click it.

But don’t move yet! Grab that bag of seed. There are chickens to feed. Move further on to the right until you come to the farm house. Just keep moving past the front door until you get to the back of the house. Just so you know what’s going on, climb the tree in the back yard. You can’t get anywhere, but you will see that the bottom of your ship destroyed the back of the house and now the homeowner is sleeping with it in his arms. Enough sightseeing! Go to the chicken. You don’t have to irradiate the chicken, but I’m sure it would appreciate it. You do, however, have to feed the chicken the bag of seed. It will eat and then depart, leaving you a feather. Grab that feather!

Now it is time to irradiate the tree. It will grow. Now climb the tree and tickle the man with the feather. (Sadly, the man does not grow when given radioactive gas.) This will cause him to drop the bottom of your spaceship. Pick it up and you are off in space again: you’ve won!

Simple Solution

You can win the game without ever picking up the radioactive gas can. Just go over to the cow and steal its leash. But make sure you don’t fall into the hole that will open up as a result. Now move to the barn. Climb the ladder and grab the horseshoe. The horseshoe and rope will become one thing. Use it to grab the second part of your spaceship that is on top of the barn. Then move the the farm house. Go up to the door and ring the bell eight times or so and you will hear a crash. You woke up the man enough to make him drop the last part of your ship. Go pick it up and you are on your way!

It is a cool little game. If anyone notices anything I’ve missed, please let me know. It seems like there ought to be more, but I haven’t found anything.

Odd Thomas Odd

Odd ThomasI got to watch a new film that has thus far only been making the festival rounds, Odd Thomas And this is strange, because it is a major production by Stephen Sommers, who directed The Mummy and other blockbusters. It is based upon the Dean Koontz novel of the same name. And the the film stars Anton Yelchin (the new Star Trek Chekov) and Willem Dafoe. Still, I can see why there might be problems with providing the film a wide release.

Odd Thomas is interesting without being engaging. Thomas is some kind of psychic who can talk to the dead. He’s been having dreams about the slaughter of what looks like a bowling team. He takes this to mean that some great evil is about to take place. So he investigates and manages to save the day. It helps that Thomas is not only psychic but some kind of fearless Ethan Hunt acrobat from Mission Impossible. And that all works the way that cop films usually work. The problem comes in when Thomas is interacting with living humans who he is attached to. In these scenes, otherwise fine actors come off like they are doing the dress rehearsal of the high school play. This is almost certainly the fault of Sommers who wrote, directed and produced the film all by his lonesome.

The film is also a comedy. And much of that works brilliantly. But all three parts of the film: comedy, personal, and the coming bowling apocalypse are monolithic. They rarely, if ever mesh. So as a viewer, I felt, “Here’s a horror scene; here’s a scene about Thomas’ love for that sassy Stormy Llewellyn; here’s a funny scene about a ghost haunting a tire shop.” None of this is to say that the film is bad. I think that Sommers is trying to do something new. It doesn’t seem to jell here, but he might be onto something. Regardless, at least it isn’t the same old timed tricks for a horror film.

I think the larger problem is the source material. The film is firmly based in Christian dogma without embracing it. The bad guys, for example, are satanists. That’s just laughable—one of the most tired cliches in all of literature. That isn’t to say it can’t be used to great effect as in William Hjortsberg’s excellent Falling Angel. But the film doesn’t contrast this devil worship with God the Father, but rather with a “feel good” spirituality that might be too vague for the Unitarians.

I’ll admit, Odd Thomas does rub against some very sore areas of my psyche. I just don’t believe in the cosmic struggle of Good versus Evil. If I am to except any kind of system like that, it either should be simply Good versus different Good (the kind of narrative I tend to write) or Ambiguous versus Evil. Because it is hard enough to accept that someone is simply evil; at the very least, you want to get some motivation—some justification. And we all know that there is no such thing as a person who is unarguably good.

The ultimate problem with thoroughly enjoying the film is that one is clearly expected to take the main plot of Thomas versus the satanists seriously. But it isn’t anymore serious than The Last Lovecraft: Relic of Cthulhu, a delightful film that doesn’t expect the viewer to take it anymore seriously than it does itself. And this is what makes Sommers effort worthy, but ultimately dissatisfying. It’s not clear if the serious conflict between Good and Evil can ever be effectively melded with the booger joke.

Who Cares About SFO Hotels Gouging Weekend Travelers?

SFOLast night, my sister called me. She said that on the local news, she had seen that hotels in the SFO area were raising their prices exorbitantly because of the increased demand created by the crash. Even a day afterward, departing flights were delayed by a minimum of five hours. Price gouging is an interesting phenomenon, so I thought I would look into it. Sadly, there is almost no real reporting on the issue. Michael Finney at our local ABC affiliate KGO wrote a general article about what airlines ought to do in such circumstances, Asiana 214 Crash Raises Passengers Rights Questions. But he noted near the end of the article, “There have been reports of hotels price gouging because so many passengers were stranded. ABC7 News heard reports of rooms going for twice the standard rate and more.”

Searching around, I found a screenshot from our local Fox affiliate KTVU. It is thanks to Matthew Keys Live. The prices are indeed high, but I can’t say just how high because hotel rates around SFO are always high. Based on my experiences, the prices do look to be about twice the normal prices. Super 8, for example, is $85 right now in Union Square in San Francisco, and $179 at SFO. Is that normal? I don’t know. But Union Square is one very convenient BART trip from SFO. Here’s the screen capture:

SFO Hotels Price Gouging

It probably is the case that these hotels are taking advantage of Saturday’s tragedy to jack up prices. But should we care? After all, that is how capitalism is supposed to work. When there is a increased demand for lodgings, the rich get nice rooms and the poor spend the night on hard benches, if they are lucky. The system works!

I don’t really understand what all the fuss is about. Capitalism is basically an evil system for distributing resources. But the people and businesses who take advantage of situations like this are just doing what they do every other day when it isn’t as obvious. The purpose of a business is always to maximize profits. The prices of things do not depend upon what is reasonable; they depend upon what customers will pay and that is all.

I truly wish that such events caused people to rethink their attachment to capitalism. But they don’t. The system itself is ignored and businesses who are no more evil than they are on any other day are vilified. If anyone wants to discuss what these hotel prices say about our beloved economic system, I’m eager to have that conversation.

Afterword

I’m not against the capitalist system. I think we just need to tame it. We can get rid of its worst abuses and make it work better for everyone. But I don’t really have a problem with what these hotels did. After all, the hotels can rent their rooms at the old prices to those lucky enough to be first to arrive or they can rent their rooms at the new prices for those lucky enough to afford them. It doesn’t really matter; the same number of people will not be able to get rooms. And after two people died, it is hard to feel too bad for those who suffered a bad night’s rest. But not to be too much of a killjoy, many people in the United States die everyday because of their poverty. That is a far more important problem than the minor suffering of those who are rich enough to fly out of SFO.