Fannie and Freddie

What is going on right now with regard to the Federal government and the credit industry represents possibly the single greatest realignment of the role of government in private sector finance since the Great Depression.

I, for one, am terrified of what Congress is doing and what they aren’t doing. You won’t hear this story told in the mainstream press because, as my good friend Harriet points out, it’s complicated and doesn’t explain itself graphically. Furthermore, it’s not partisan so there is no natural protagonist/antagonist to root for.

The GSEs got into an enormous mess because their special status allowed them to take an unsafe chunk of the market, its executives were rewarded for risk-taking, and its management was excessively entangled with the government, which made it hard for them to say no when the regulators asked them to take on even more loans. Congress’s plan is . . . more of the same.

[From Megan McArdle (July 23, 2008) – Neither fish nor fowl nor good red herring]

More on this topic (What's this?)
Why Investors Are Down on Fannie Mae
Solutions With Unintended Consequences
Nightmare on GSE Street
Freddie Mac to Put Shareholders First
Read more on Freddie Mac, Fannie Mae at Wikinvest

Zimbabwe “Money”

200807231327.jpg I just bought one of these on eBay, and whenever someone asks me about it I’m going to say “100 billion dollars” in a Dr. Evil voice.

LEDs, the Green Option Even if They Are Blue

For all the talk about the lowly light bulb being a primary front in the ongoing journey to becoming green, the fact is that there are few good options to replace the incandescent when it comes to light quality, cost, and environmental impact.

I have a few CFLs in the Nolan household but I simply don’t like them. They have to warm up to before outputting full power and the color of the light is hit or miss depending on the brand of bulb you are buying. Then there is that pesky mercury problem that proponents who claim to also be environmentalists selectively overlook… given the choice of mercury contamination or excessive electricity use, I’ll take the latter because mercury is serious stuff. Remember that fluorescent lighting is also a hundred year old technology.

The typical CFL has 4-6mg of mercury but the thing that should be concerning is that CFLs use elemental mercury which readily vaporizes when exposed to air, meaning a broken CFL in your home should be dealt with not simply by sweeping up and throwing away the broken glass, as you would an incandescent, but also by opening windows and allowing the air to change to decrease the mercury levels. BTW, the broken glass should not be vacuumed up, but rather collected and placed in a sealed bag to be disposed of in a certified Household Hazardous Waste facility, according to the EPA. Right…

I am a big fan of LED lighting but even here I find the solution to be a glass half empty. LEDs have a funky cold blue light, something that will no doubt be corrected over time, but the bigger problem is that LED light has to be concentrated which means it doesn’t disperse well so for area lighting it is not an option. On the plus side, LED lighting generates a lot less heat than other options and of course lasts pretty much forever.

For over one hundred years, traditional incandescent light bulbs have dominated the lighting industry. While the past belongs to these incandescent bulbs, the future belongs to light emitting diodes (LEDs), a new and efficient technology that is revolutionizing the lighting industry and ensuring it will have a smaller impact on the planet.

[From Amazon Green Scene’s Blog: Light Emitting Diodes: The New “Green Light” Permalink]

While I would call LED lighting very efficient, it’s certainly not new… the first calculators that appeared in the early 1970’s depended on two innovations, the microprocessor and LED lights.

$19 Billion Gets You All of It

Gets you what? $19 billion is the market capitalization of 10 of the major U.S. newspaper stocks. Put another way, about 1/8th the value of Google.

To be clear, this is not the valuation of the top 10 newspaper companies because Hearst, Tribune, Cox are private and Dow Jones is part of behemoth News Corp, but it does make a stark statement about the wisdom of being public ownership of media stocks. There are calls for private equity to jump in and pick up cheap newspaper stocks but I don’t see that happening because 1) The Sam Zell Experience, 2) organized labor is a hazard on the print side of newspaper operations and threatens the online side as well, and 3) we’re dealing with some fundamentally broken businesses who’s salvation is not going to be found in cost cutting and reorganizations.

Name Symbol Last price Change Mkt cap Volume Open High Low
Gannett Co., Inc. GCI 18.34 0.57 $4,194 3260344 17.83 18.74 17.61
Journal Register Company JRCO 0.09 -0.01 $4 229059 0.095 0.105 0.09
Journal Communications, Inc. JRN 5.58 0.59 $313 299080 4.9 5.97 4.9
Lee Enterprises, Incorporated LEE 4.31 0.26 $193 492527 4.57 5 4.1
Media General, Inc. MEG 13.54 -0.09 $310 71662 13.51 14.24 12.95
The McClatchy Company MNI 5.18 0.23 $426 509975 5.06 5.34 4.98
The New York Times Company NYT 13.06 0.2 $1,878 1939797 13.05 13.42 12.38
Sun-Times Media Group, Inc. SUTM 0.4 0 $32 0 0.4 0.4 0.4
The Washington Post Company WPO 610.51 10.01 $5,816 8900 598.1 613.49 598.1
Scripps Networks Interactive, Inc. SNI 39.7 0.61 $6,487 196624 40.21 40.4 38.5

BONUS: Here’s a really cool family tree chart that details who owns what in the media business.