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A La Carte (4/6)
- 04/06/09
- 2
Read to Save Your Life This is the kind of article I like to read: "Well, here is a health alert we can all understand. Researchers at the University of Sussex have determined that the very best way to relieve stress, both physical and mental, is to read a book. Got your attention?"
Making Exhibitions of Ourselves Carl Truemen offers some good food for thought in this article about the weird, exhibitionist culture we live in. Derivatives Explained We hear a lot of talk about derivatives and their impact (and yet-to-come impact) on the economy. This little parable helps explain them, at least to a point. "Heidi is the proprietor of a bar in Detroit. In order to increase sales, she decides to allow her loyal customers - most of whom are unemployed alcoholics - to drink now but pay later. She keeps track of the drinks consumed on a ledger (thereby granting the customers loans)." Dubai: How Not to Build a City This is totally random, I know, but I found this article quite interesting. It describes the rise (and potential coming fall) of Dubai. "Its vast wealth notwithstanding, the things that make Dubai liveable are those that happened when the planners weren't looking. But life will out, even in a city built by oil-fuelled hubris." An Article on Ben Zobrist Tim Ellsworth, writing for Baptist Press, has written a couple of stories on Ben Zobrist who plays professional baseball for the Tampa Bay Rays. Deal of the Day: Bookends of the Christian Life Today only, Monergism Books is selling Jerry Bridge's new book The Bookends of the Christian Life for half off the regular price. It's a good book and definitely worth that price!

Comments (2)
The following is a comment I posted on the "Derivatives Explained" blog post above. Needless to say, I find it a misleading and unhelpful post.
The story is "not completely accurate", you say? That description is so full of innuendo, oversimplification, and omission that it is more harmful than helpful. Just a couple of examples -- first, portraying derivatives dealers as exploitative sellers of alcohol to alcoholics is ridiculous. Derivatives are a perfectly legitimate product and, used properly, provide benefits to both buyer and seller. Second, saying that these securities were rated AAA is ridiculous exaggeration as only the top tranche was rated AAA. Obviously the ratings were wrong, but it was not, as portrayed in your story, an out and out fraudulent rating of worthless securities. Third, the story fails to acknowledge the significant culpability of both legislators and consumers in the current meltdown.
It's great to help people understand the nature of our current problems, but this story unfairly demonizes derivatives dealers and ratings agencies. They are not without fault, but this analogy is irresponsibly misleading.
My reply to Dan from my blog.
"I'll have to disagree with some of your comments. The story was meant to be a humorous way to help people understand how a group of toxic assets (the Fed and Treasury's description, not mine) made their way into the economy in such numbers as to cause our global meltdown.
As far as it being ridiculous to portray derivative dealers as exploitative sellers of alcoholic to alcoholics, I would say that is probably quite an accurate picture for many of them. These "legitimate" products unfortunately in many cases were not used properly, and just like alcohol in the hands of the wrong people, have had equally as devastating results.
Regarding the ratings companies... We'll see just how fraudulent these ratings were in a few years - when some of this makes its way through litigation. I will say without hesitation that before this is over, IMHO there will be high level people in the ratings agencies who will resign over the scandals that will be exposed, and some may even find themselves in jail."
Here is a better explanation of what happened, including my assertion that the ratings agencies will soon be forced to face the music.
http://www.pbs.org/moyers/journal/04032009/watch....