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Banbury Cross

a pillow for lost thoughts...

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No Flipper Left Behind

As the sun slowly sets over the prairie of the current White House administration - three landmarks are casting particularly long shadows: Iraq, Katrina and Countrywide. The last may seem bush-league for now, but as the housing industry sinks deeper into the quicksand of frivolous lending, the US largest mortgage company may soon become the new Enron, falling pray to the dark side of the housing boom that it helped to create. It wasn't always that way though.

There was a time when people were earning their living by producing something other people might need rather than pushing paper around and speculating in the Bubble Du Jour. Of course, riding the coattails of the housing mania was much easier and even advanced condo flipping didn't really require many skills beyond giving your John Hancock.

There was a time when people researched their investment. The times when due diligence entailed more than clambering onto a jolly bandwagon rolling down the street. Times when "buy low, sell high" was the first comandment of prudent financial management - the rule to be later quietly replaced by "buy high and hope there are more suckers waiting on the sidelines".

There were times you had to put money down to buy a house. You had to show that you are serious about your purchase. But as the need to lure more people into the growing Ponzi scheme arose, the lending standards were loosened, then loosened some more and finally completely abandoned.

There were times when real estate agents were knowledgeable professionals providing guidance through the legal jungle of buying a home. The times when their trade toolkit included more than a pair of faded pom-poms and their pitch wasn't reducible to a single mantra of "housing prices only go up". But arguably, it is hard not to cheer for overpriced market when your comission is the percentage of the closing price.

There were times when banks carried the risks associated with loaning money. The times when they were the primary holder of the debt, which made them think twice about who they loaned to. These days, however, they just collect a fat commission and then they package the debt into bond-like securities, which they sell around, mostly to unsuspecting foreign investors. That of course is a mighty incentive to loan money at all costs.

There were times when invisible hand of free markets weeded out business people making bad decisions. The times when men took responsibility for their bad decisions and learned from them. But these days, when the music stops, and the schemes are starting to collapse, the big investment bankers come knocking on the government's door with pleas for a bailout. Like a bunch of little boys crying "Mommy".

But make no mistake, the powers that be are listening. It's not that they want to bail out the poor homeowners who could just walk away from their $0 money down mortgages and feel very little pain. They want to bail out the Wall Street denizens and the hedge funds that hold all the toxic debt. Why? Well, there is nothing more heart wrenching than seeing a major campaign contributor in distress. Plus in deciding who will be bailed out, more red tape will be created, which means more government jobs. And if in the process an environment for corruption is created, so be it. Sure we could spend the money on Universal Health Care or educational programs, but hey - this will be well worth it. After all, nothing spells "freedom" like supporting irresponsible behavior.

Nice noise

Silence and Noise shared an apartment. Noise was very helpful around the house and did his best to be a good roommate. He drilled the holes for the bookshelves, he cut the wood logs with a chain saw and he sang country songs while washing the dishes. Silence grew restless at his acoustic output and after few months of uneasy cohabitation, she decided to leave. She packed her few belongings into a small handbag and entered the living room where Noise was watching the Airplanes Take-Off Special on a large plasma TV screen. "I cannot live with you any more", said Silence. Noise didn't seem to comprehend. His robust face was wrinkled with thinking, "I am sure we can work it out. I would like for us to get along..." Silence stopped him with an instinctive motion of her palm: "No, we can't." Noise started pouting his lips in disbelief. "But I don't understand." Silence sighed. "I know - you never do". Then she placed her keys on a glass coffee table and left.

Without slamming the door.

silence

New York, New York

There is a Chinese proverb which reads "Heaven doesn't say that it is high". And that's what I like about New York. It doesn't have to claim to be cosmopolitan, because it is. Unlike many wannabe metropolises, New York doesn't stake its claim on worldliness with nervously tapping feet, but rather with its legs kicked high on the table. It doesn't peer into the mirror to see if the worldly jackets fits right, rather it flings it non-chalantly over its shoulder and whistles a dirty French ditty as it saunters down on Broadway.

A friend of mine teaches at Cooper Union so this weekend I got to sink my teeth into the Big Apple again. For our entry point, we chose the Holland Tunnel, whose entrance, as usual, was clogged with a yawning clump of cars digesting the distance just traveled. As we approached the booth, taking a welcome visual relief from the unremitting turnpike view, I noticed a speed measuring gun that was pointed at us and a big display board that was showing our speed: 25, 24, 23,... Strangely as we came to the complete stop, the digits froze at 15. I looked down at the pavement to make sure we were standing still. We were and yet the stubborn board kept clocking us at 15 mph, which frankly is the fastest I have ever been standing. New York can be a strange place and the laws of physics don't get much respect around here.

I suspect that the city treats the laws of physics with the same casual air with which it treats its metropolitan jacket - it flings them right over its shoulder. In this borough you can see kids with tiny bronze rings in their noses selling you gutted butterflies dipped in a saucy simmering substance that you would hesitate pouring into your car's engine, you can hear languages that do not exist anywhere else on the earth, you get to walk through a green dream of a concrete jungle called the Central Park, you will have to squeeze your body into subway cars filled with passengers whose cumulative volume exceeds that of the car itself and of course if you take a long walk south, you will hit the place which has its own set of the Laws of Physics - the Wall Street. That black hole of all reason where financial cowboys saddle the jitters of greed every day and where investment bankers wear hairdos that look like expensive scaffoldings for their mental castles albeit their actual investment advice may be as useful to your financial well-being as 10 lbs of slide rules.

As we were standing at New York's tunelly threshold, still as a frozen doornail, I wondered if my friend stands to get a traffic ticket for standing over the posted speed limit. "I am sorry, Your Honor, I will never ever stand that fast again." But that's just the kind of city New York is - you are on the go even if you are standing.

Blue Cross anyone?

Michael Moore sure knows how to stir up the hornets' nest. But there was one aspect of his latest movie "Sicko" that I wished he had accentuated a bit more: Why is it that the insurance companies HAVE to make a profit?

Let's look at the simplified cash flow of the insurance companies. Ideally, they would take some money in the form of insurance premiums, keep a bit to pay for their administrative expenses (rents, salaries, office supplies) and the rest should be disbursed to providers of medical care. And if it turns out that there is a surplus of money flowing in, rather than reaping the profits, they should lower the premiums.

Now don't get me wrong. I believe in profits; they are the best incentive for innovation. McDonald's or Intel wouldn't function very well on a non-profit basis. What motivation would they have to deliver better chips? But insurance companies are not supposed to be the innovators. They should deliver specific money to specific doctors. As effectively as possible. The physicians should push the frontiers in this business. But pushing can be really difficult when some of the funds that were intended for doctors driving the medical innovation end up in pockets of bureaucrats driving expensive sports cars.

By letting the insurance companies turn up profit, even in situations when sick people are denied treatment, we are effectively saying this: "We, as a society, believe that it is more important for the insurance executives and major shareholders to get that new spiffy motor boat than it is for some person in the Middle of Nowhere to get adequate medical attention."

I find this implied attitude puzzling. Especially in a country that bills itself as predominantly Christian.

cross

Three takes

I survived the poetry phase of the writing class I am taking this summer so now I am floundering in prose. For this week assignment we were asked to choose a memory, a snippet from our past, and tell it in three ways.

1. First person - present (as if it were happening now)

Daylight is slowly streaking in. So is my consciousness. Sounds of streetcars help usher in a new day. Their ringing seems suspended in the air, like an invisible hand offered to a lady descending a stage-coach. I realize I am not at home. I see books I never read, I see unfamiliar walls at unfamiliar distances. My reasoning is slowly emerging from its nocturnal eclipse, one by one its internal circuitry comes online, the velvet curtains of slumber are pulling up. I think I just heard a voice. Was it the door that creaked? The setting is gradually coming back to me. The apartment belongs to Helen, a woman I barely know. After a great evening with my friend Theresa, she let me stay in her boyfriend's bedroom, while Theresa crashed in hers. I am also beginning to recall that she mentioned that her boyfriend might be coming back in the morning. Thank God, the world is starting to make sense. The person at the door is a male indeed.

I try to form a coherent sentence, preferably one that might have some explanatory potential. Composing a speech while looking for socks can be demanding though. My memory sputters reluctantly into functionality - his name is Robert. Then I notice something that makes me question my liberation from the dream world. The person at the door is holding a gun. I also notice that the gun is deliberately pointed at me. This guy is really protective of his girlfriend flashes through my mind. As I try to take stock of the situation, I hear a firm request for an identification. I refocus. It is the police. But the gun is just as real as it was a moment ago. They are very curious who is the owner of this apartment and who am I.

I get up. I make a brief introduction and lead them to a living room hoping to find traces of Helen. Theresa is gone, she mentioned she had an early train to catch, so it is up to my orientation sense to find Helen. Where could her bedroom be? The place looks different in the daylight. I look around like a confused monkey looking for a banana heap. I see slim wooden furniture, a rug on the wall depicting a mountain stream, a sofa with a sliding heap of fashion magazines, but no sign of bedroom doors. Time is canoeing through the scene. I try not to act too suspicious, but my obvious failure at finding Helen is enough reason for the policemen to keep their guns ready. Finally she emerges from the depths of the apartment, as if an invisible wall somehow opened. She looks as confused as I am. But somehow I feel that this is a turning point.

2. Third person - past (as if it happened to someone else)

Joe spend an entertaining evening with his friend Theresa and her friend Helen. The conversation flowed like champagne and soon they all found themselves on the a.m. side of midnight. Theresa had an early train to catch from a nearby station, so she decided to stay at Helen's place, a spacious apartment in a high rise building in one of Prague's western districts. Helen mentioned that her boyfriend Robert is out on business and Joe was offered an accommodation in his bedroom. Up to this point nothing extraordinary. A friendly meeting and makeshift sleeping arrangements. The real twist began to take shape in the morning when Theresa left for her early train.

She didn't want to wake up the whole floor so she closed the door rather timidly. As a result the bolt didn't fully engage and while she were speeding downstairs the door wafted open. It probably felt that it had the same right to yawn like everyone else. At around 7 a.m., a neighbor noticed the gaping door on her way for fresh milk. That still wouldn't be anything out of the ordinary had she simply closed it. But there is one thing which made her think twice about doing so. As luck would have it, that same high rise complex witnessed a homicide couple of weeks ago. One of its Ukraininan tenants got into a dispute with the Russian Mafia and the disagreement was settled the Soprano way. Needless to say that the gruesome murder left the tenants rattled and highly suspicious of any irregularity. The ominously open door scared the neighbor and she called the police.

Two officers arrived shortly and entered the apartment, their guns drawn and their eyes scanning the interior for trouble. Helen just moved in, so she didn't have time yet to build a reputation of a solid neighbor. The apartment looked a bit tentative and that made the policemen proceed with extreme caution. Their shoes squeaked on the hardwood floor. They searched the hallway, the kitchen, the living room - but still no sign of life. The layout of the apartment lead them to Joe's room next. Carefully they opened the door. Joe was about to have a morning of his life.

3. First person - past (as if it is recalled from memory)

Staring down the business end of a gun is quite a unique feeling. You are scared and curious at the same time. You feel like a fish released into a kitchen sink. You feel like standing naked in the middle of Times Square. You feel out of place. And you wish you could call Quentin Tarrantino and offer him a great directing opportunity. Or at least grab a video cam and preserve this moment in its dripping urgency.

That is what I experienced firsthand few years ago, when I had to crash at a place of a distant friend. Due to some wheelings and dealings of the Prague underground, which happened to take place in the same house, I was awoken by none other than the Czech police that morning. The vigilant protectors of the law were alerted to an open door to my friend's apartment and caught me in the middle of regaining my consciousness. I will never forget that wake-up call. The ring seat view of their fine weaponry. The sense of having taken a wrong turn somewhere and stubbornly continuing to drive against the flow of traffic on a busy highway. To make things worse I didn't even have a proper id on me. Since in the Czech Republic I don't usually carry my passport around, I had only my expired Czech driver's license to prove my identity. That made for an exchange of some deeply puzzled looks on the part of the officers. While they questioned me, I started wondering what kind of matresses they used in Czech jails.

Fortunately everything was explained. My friend Helen entered the scene like Deus ex Machina and saved the day. After it became clear that she is the rightful owner of the apartment, that her offer for me to stay didn't involve any extortion and that we didn't hid any dead bodies in the closet, the policemen turned the blind eye to my expired ID. When I heard the door close behind them, I thought that was the full stop after the whole story. But Helen added a little cherry on top of this tart. We were sipping coffee and exchanging our own stories of the morning when she slapped her forehead as if she just remembered something. She went to the kitchen sink and opened a little cupboard underneath it: "Good that they didn't snoop around too much - they might have found this" - and she pointed to two bags of something that looked like prepackaged hey to me. But it was marijuana. Good Lord, that was the last time I set foot in that house.

Moral of the story: Kids, it's ok to stay with your friends, but if you have to stay with friends of your friends, please, look under the kitchen sink before you brush your teeth.

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