The Warning 3

Brooksley Born's fear of a potential collapse of the unregulated derivatives market proved to be prophetic. The boom in real estate and easy credit during the 90s produced more complex forms of securities and derivatives linked now to the overstated value of millions of homes packaged as "sub-prime mortgages" or "adjustable rate mortgages" issued to borrowers who would ultimately be unable to afford them and keep up payments. This created a new chain of risk stretching from the indebted home buyers to a vast, unregulated web of global contracts.
The derivatives market appeared to provide a safety net, but had the unintended effect of encouraging more risk taking by investors, who bought huge amounts of mortgage based investments, then bought "credit-default swaps" rather than establishing cash reserves to protect themselves. If the mortgages declined in value the investors had a cushion; the sellers of the swaps, who collected substantial fees for sharing in the risk betted heavily that the mortgage market would stay healthy.
The worldwide market in derivatives topped $530 trillion in June of 2008, including $55 trillion in credit default swaps, that $530 trillion represented all contracts outstanding. The actual dollar amount at risk was much smaller, but still represented $2.7 trillion dollars according to some estimates.
To put the amount in perspective, in 2007 it was estimated that the Gross World Product of the entire planet, the market value of all final goods and services made on Earth in that year was between $54.62 and $65.61 trillion.
When the housing bubble burst and mortgages went south, the consequences seeped through the entire web. Some of those holding credit swaps wanted their money; some who owed didn't have enough in reserve to pay.
Instead of dispersing risk, derivatives had amplified it.
The following is a excerpt from Stock Market Invesrters. com:
"Back in the early 2000's, there was an excess capital globally. The world did not even imagine there would be a global financial crisis and all investment managers were concerned about was where to invest their capital in order to make it grow. Generally, the demand was for low risk investments that paid some nice return.
However, such investment options were not easy to find. This pushed a great amount of money straight into the US mortgage market thanks to the unique and wonderful (on principle) vehicle - securitization.
An individual gets a mortgage loan from a broker. Then the broker sells the mortgage to a bank, which in its turn again sells the mortgage but this time to an investment firm on Wall Street. Such firms collect thousands of mortgages in one big pile. This in fact represents thousands of mortgage checks coming every month, a monthly income that was supposed to continue for the life of the mortgages. And of course, the firm in its turn sells shares of that income to investors who are willing to buy.
Mortgage backed securities seemed like the perfect solution to the great demand of assets. After all, in the beginning they were wonderful, safe investments - built out of mortgages with big down payments, proven steady income and money in the bank.
And investors loved them - and not only US investors but investors from all over the world.
The demand for those great, safe mortgage backed securities was really high. In fact, so high, that there was a point somewhere in 2003 when everyone who qualified for a mortgage got one, and still the global pool of money wanted more.
Thus, things needed to change. And they did. The mortgage qualification guidelines did.
At first, the stated income, verified assets (SIVA) loans came out. People didn't have to prove their income any more. They just needed to "state" it and show that they had money in the bank.
Then, the no income, verified assets (NIVA) loans came out. The lender was no longer interested in what you do for a living. People just needed to show some money in their bank accounts.
This wasn't enough to satisfy the huge appetite of global investors. The qualification guidelines kept going looser in order to produce more mortgages, more securities.
NINA is an abbreviation of No Income No Assets. Basically, NINA loans are official loan products and let you borrow money without having to prove or even state anything. All you needed to have in order to get a mortgage was a credit score.
Why would a bank loosen its criteria for lending money so much? Well, banks didn't keep these mortgages. They didn't care whether they are risky and the borrower will ever pay them back simply because they sold the mortgages to Wall Street. The Wall Street then sold them to global investors ... as low risk investments.
Why would any investor consider mortgage backed securities low risk investments?
Well, investors use a special system to assess risk. Credit rating agencies, such as Standard & Poor's, Moody's, and Fitch, give ratings to every type of bond according to its risk. Letter grades mark the safety of the investments - triple A is given to the safest ones, for example US government bonds.
And in this case, the credit rating agencies blessed most of the mortgage backed securities with AAA rating.
The problem with this high rating is that agencies used the wrong data to estimate the risk. Looking back historically, what they saw was a very low rate of defaulting, a very low foreclosure rate. However, the current situation was different - with new qualification requirements, new mortgages given to people who would never have gotten them before, and of course, a big speculative housing bubble that was eventually going to pop.
Up to 2006, the housing market in the US was flourishing.
It was easy to get a home loan, so more people wanted to buy a house. The increased housing demand increased in return the prices. The increased prices attracted investors who were looking to buy houses as an investment, only to sell it later for more. This further created more demand and further increased the prices - a classic speculative housing bubble.
And because of the rising prices, the consequences from all the "bad" loans given to people who could not afford them were delayed. Whenever people experienced difficulties making their mortgage payments, they could easily take another loan against the value of their house, simply because now it was worth more.
Basically, they went into more debt in order to pay off their debts. Thus, the housing bubble made home equity loans and home equity lines of credit extremely popular.
However, in contrast to the rising house prices, the average household income didn't increase. Thus, despite all the incentives and exotic mortgage products, people just couldn't afford those high prices and it was only a matter of time for the problem to come out.
And it did. The big housing bubble burst, the property values stopped increasing and the whole thing came to a point when the mortgage lending industry started witnessing something new - many people defaulted on their very first mortgage payment.
What happened was a chain of reactions very similar to those in the housing bubble but only in the opposite direction. The number of people who defaulted on their mortgages increased more and more which in return increased the number of houses on the market. The oversupply of houses and lack of buyers pushed the house prices down till they really plunged in late 2006 and early 2007.
That was the point when people on Wall Street started to panic. They no longer wanted to buy risky mortgages. Mortgage companies, which used to sell risky loans, experienced the devastating consequences of going out of business.
Unfortunately it was already too late for everybody.
The market has already absorbed enormous amounts of these securities. All kinds of investors from all over the world - individuals and big financial institutions - basically have bought these AAA rated mortgage securities thinking that it was almost as safe as putting money in a savings account. Now that the complexity and the real risk of these securities came out, most of them are already worth less than half their initial value and all those investors lost a great deal of money.
Moreover, foreclosures keep springing up. In the past mortgages were held in the books of financial institutions such as banks, who had real interest in working with their borrowers and making sure that everything possible is done to pay back the loans. However, in the current situation, mortgages have been sold and resold and pooled together into securities and sold to investors in the financial market. It is really really hard to even find who the actual current owner of mortgage is. And it is just as hard to prevent foreclosures."

To be continued.

The Warning 2

Brooksley Born

Alan Greenspan was awarded a Ph.D in economics from New York University in 1977. In the forward to his dissertation he warned of a growing bubble in the housing market with soaring values placed on homes, and the influence this would have on consumer loans and spending habits. He even predicted that bubble bursting in 2004, stating, "There is no perpetual motion machine which generates an ever-rising path for the prices of homes."
He was right about that bubble bursting, but just off by three years.
He was first appointed Federal Reserve chairman by President Reagan in August 1987, he did not leave that position until he retired in January of 2006, serving under four Presidents. During the 1970s the executive branch and Congress gave up their powers of oversight over the country's economy by using the fiscal tools of allocated spending and targeted tax cuts, effectively giving those powers to the Federal Reserve, which through its power to raise and lower interest rates, has exercised more influence over economic growth and the level of employment than any other government entity. In his position as chairman, Alan Greenspan was often considered the most powerful man in the nation.
He was introduced to Ayn Rand in the 1950s and became a devotee of her and her Objectivism philosophy, part of which dictates that the proper moral purpose of one's life is the pursuit of one's own happiness or rational self-interest (she wrote an essay called “The Virtue of Selfishness”); that the only social system consistent with this morality is full respect for individual rights, embodied in pure laissez faire capitalism. She was also the mentor of the economist Milton Friedmen, who inspired "Reaganomics," and the "trickle-down," or "supply-side" economics that provided tax cuts or other benefits to businesses and rich individuals in the belief that this will indirectly benefit the broad population. These policies, along with massive increases in Cold War related defense spending caused large budget deficits, the U.S. trade deficit expansion, and contributed to the Savings and Loan crisis of the 80s and 90s. In order to cover new federal budget deficits, the United States borrowed heavily both domestically and abroad, raising the national debt from $700 billion to $3 trillion, and the United States moved from being the world's largest international creditor to the world's largest debtor nation, which is still the case today.
In 1993, President Bill Clinton reappointed Greenspan as Federal Reserve Chair, and kept him as a core member of his economic team, named "The Working Group," which also included Securities and Exchange Commission Chairman Arthur Levitt Jr, Treasury Secretary Robert E. Rubin and Deputy Secretary of the Treasury, Lawrence Summers (before he stated in a 2005 speech that women were too stupid to gain a representative number in higher levels in academia), all Wall Street legends, all opponents to varying degrees of tighter regulation of the financial system that had earned them wealth and power.
This is where Brooksley Born comes in. Greenspan, Rubin and Levitt reacted with alarm at her persistent interest in a fast-growing corner of the financial markets known as derivatives.
Unlike the commodity futures regulated by Born's agency (the Commodity Futures Trading Commission), newer entities called derivatives were not traded on an exchange, constituting "dark markets," that were under no regulatory provisions whatsoever. There were now millions of such private contracts, involving many of Wall Street's top firms.
Born wanted to shine a light into the dark, and after months of declaring the possible dangers that this enormous market posed to the financial system, she now wanted to open a formal discussion about whether to regulate them, and how to do it.
Greenspan, Rubin and Levitt were determined to derail her effort. Rubin agreed with Greenspan and Levitt that these newer contracts, often called "swaps," were not futures, thereby Born's agency did not have any legal authority to regulate them. These men believed that her call for a discussion had real-world consequences: It would cast doubt over the legality of trillions of dollars in existing contracts and create uncertainty over the market.
"Once she took a position, she would defend that position and go down fighting. That's what happened here," said Geoffrey Aronow, a senior CFTC staff member at the time. "When someone pushed her, she was inclined to stand there and push back."
Born's was the lone voice predicting a possible economic collapse due to the hidden multi-trillion dollar market in derivatives. But at that time, although there were troubling indications, the markets were booming. Everyone was making money hand over fist, the Friedman model of deregulation seemed to be winning the day. Anyone who thought or voiced an opposing view was derided, ignored, or ridiculed into complacency.
"We knew it was a big deal [to attempt regulation] but the feeling was that something needed to be done," said Michael Greenberger, Born's Director of Trading and Markets. "The industry had been fighting regulation for years, and in the meantime, you saw them accumulate a huge amount of stuff and it was already causing dislocations in the economy. The government was being kept blind to it."
Born testified at least 17 times to a openly hostile Congress (who had been swayed by the advice of top Clinton economic advisors to ignore the rantings of the CFTC chairwoman. Asked what it was she was trying to protect, by members of the House of Representatives and the Senate who most likely didn't even know what a derivative was, she answered, "The money of the American public.").
In the end, Greenspan, Rubin, Levitt, Summers, and the others in The Working Group not only won the argument, they cut off the larger debate of regulated markets. After Born was marginalized in 1999, she quit, and no one stepped up to take her place, and once the Bush administration arrived in 2001, the push was for less regulation, not more. Voluntary oversight became the favored approach, and even those were accepted grudgingly by Wall Street, if at all.
All of the pieces were in place for disaster.

To be continued.

Happy Birthday Veronica! 3

Near one o'clock I made my way to the Defiance Space in back of the Produce Hotel. Paul was already there trying to get the door open and had to go to the office to get a key. Beth soon arrived.

"Erin's still sick?" she asked.
"Yeah," I told her. "She was here earlier, but she went back home to rest."
"I hope she feels better."
"So do I."
Paul came back with the keys and opened up the Space. Only three of us showed up, myself, Paul, and a guy from one of the other hotels.
"Happy birthday, Rick," Paul said.
"Thank you."
"Today's your birthday?" Beth asked.
"Why yes, it is."
"Well in that case we'll have to do some traditional birthday yoga positions."
"Birthday yoga positions?"
"Yup!"
After getting our breathing normalized Beth had us jump into a series of uttanasanas, a couple of navasanas, 37 eka paada salamba sarvangasanas, the plow position, a smattering of virabhadrasanas, 4 matsyasanas which as you know can be very "challenging," 86 bhujangasanas, 22 ardha jathara parivarttanasanas, 32 ardha bhekasana parsua sarvangasanas, 9 sraddha vrischikasanas, 2 bakasanas just to cool down, and 14 cat flows. Then we meditated upon our chakras for thirty minutes.
"Wow, that was a pretty grueling yoga workout Beth," I told her. "I think I got all of my toxins removed. Thank you."
"Your welcome."
I returned to my box and took a shower. As I was getting dressed Jose appeared magically at my door.
"Are you going to Support Group?" he asked me.
"Of course. I need all the support I can get."
We went downstairs and waited for Paul to return from the Defiance Space. When he arrived he asked us what we wanted to do, considering Jose and I were the only ones there.
"Let's go get yogurt," Jose said. "We haven't done that for a while."
"Yogurt? We could do that. Sound good to you Rick?"
"Do we have enough petty cash?"
"I think so," Paul said.
He took out $15 from petty cash and we took Paul's car to Yogurtland at Second and Central, directly north from my box.
At Yogurtland you get to take a cup and fill it with any kind of yogurt and toppings that you like, then take it to the cash register where they charge by the weight of your cup with yogurt in it. It's all very scientific. I served myself three layers of vanilla, strawberry, and chocolate yogurt, with mini-M & Ms and malted milk balls on top. All three of our cups cost just over $10. We sat outside to eat, and answered questions from Erin's Book of Questions. Three female police officers were sitting nearby eating their own yogurt.
"This is your birthday yogurt," Jose said.
"That's right," said Paul.
Paul asked if we could choose a power or ability to wake up one day and have, what would it be?
"A photographic memory," I told them.
"Why?" Paul asked.
"Because then I could learn other languages fast, and remember everything easily."
"You know, I think I agree with you," Paul said.
We dropped Jose off near the hotel, then Paul and I drove to the Abby for the Writing Class.
Rachel wanted us to write poems again using the little pieces of paper, so we spent twenty minutes turning over the hundreds of pieces and Rachel didn't even show up.
Demitri did though. I asked her to Email some of the pictures she took at the Domino Tournament. She said she would. Several residents showed for the class today, and 4 interns.
They had had a book fair, or something at the Abby earlier in the day, with lots of cake, pastry, and bagels left over. I filled up a bag of birthday bagels to take home with me.
Once again I wrote haikus, like:

Cool wind force

Spell geometry
Monkey fries

Finish well

Rudiment Mountain
Sonic pie

and

The girl

Stood with direct will
Dream cuddle

Demitri wrote:

Order cold water
Smoke from the fire during sleep
yell so you can hear

Demitri is obviously very disturbed.

Paul wrote:

Miss Los Angeles

Rains her delighted ego
On a river bed
Of swarthy pizza boys
With common country eyes
Until the icy, muddy water
Leaves their hot boxes cold

And here's some from my lovely case manager, Erin, from a week ago:

Applesauce Seagull

Uranus monster
Never took a city at breakfast before

and

They told the girl

"Produce a Prince!"
But instead she made herself king

Very good one and all!

Afterwords, Paul drove me back to my box, giving Demitri a ride to Union Station as well. I made my self some birthday burritos for dinner, then got ready to go to the SOS Tuesday night meeting at the Center for Inquiry West in Hollywood. A secular 12 Step meeting, sort of.
As soon as I entered a large cry issued from those within, "Happy Birthday Rick!" At which point a large orange and white birthday cake was brought out, and everybody sang the "Happy Birthday Song," to me. I was very flustered at all of this attention. I was prompted to make a wish and blow out the appropriate number of candles. I can't tell you what my wish was because if I did it won't come true, but if you see me driving around in a Jaguar tomorrow you'll know it worked out. We began eating the cake, then the clowns arrived. Eight of them. The began their clownish activities, blowing up balloons, pantomime, acrobatics. Speaking of balloons, a switch was flipped and two hundred of them plus streamers fell from the ceiling (odd that I hadn't noticed them) and landed about us. Everyone cried out in delight! The circus animals came next. One of the elephants made a mess at the podium, but were otherwise well behaved. I began singing, "Livin' la Vida Loca," with a lamp shade on my head. Men swallowed swords and breathed fire. The bears and tigers scared me a bit. The trapeze took up the entire stage. A man was shot out of a cannon. The fireworks began. I took a ride on one of the many horses. It was definitely getting crowded and a little smoky in there. The police heard what was going on and joined us. The cake was consumed. Punch was procured. The clowns tried to lift me up in a chair 54 times but could only make it to 34 before collapsing. I got distracted by an angry mongoose, allowing the clowns to kidnap me and I haven't been heard from since.
Freaking clowns! They're always doing stuff like that.

Happy Birthday Veronica! 2

My lovely case manager, Erin, and I got into her car and drove off towards downtown. She owns a little range rover type vehicle, and the rear compartment was filled with various form of crap, including one large dresser that she had bought at some sale, and which had been in the back of her car ever since, a couple of months now.

We were going to IHop (International House of Pancakes) mainly, I think, because I had expressed an interest in taking her there a few months ago. At the time Erin was being attacked by pimples, and was deeply involved in a rigorous campaign to "eat healthy," and we foregoed our trip to IHop in favor of a local deli near our hotel which offered no food whatsoever that could be considered healthier than what could be found at the International House of Pancakes, but I believe that the choice of restaurants assuaged Erin's fears of not eating in a healthy manner enough in a psychological sense that it was okay for her to eat there. Besides, she was hungry. I paid that time.

I told her that it would be my treat at IHop, as she had paid the last two times we had bypassed our Tuesday excursion to the Hippy Kitchen, in favor of McDonalds. She would have none of that though.

Through the miracle of her IPhone GPS system we soon found our way to the IHop located at 8th Street and Flower. Neither of us had been in this particular branch of the pancake chain, although both of us were veterans of the IHop.

It was not too busy and we were escorted to a nearby booth and given menus.

"Ahh! They list the calories next to the food," Erin exclaimed.

"Not on this one," I showed her the smaller menu of specials.

We basically decided on the same breakfast, two eggs (over easy), two strips of bacon, and two sausage links. All we differed on was the side dishes. Erin opted for crepes smothered with strawberries, and I chose the pumpkin pancakes. They were good.

Our conversation was casual and easy. I really enjoyed our time together, but was concerned about Erin's persistent cough.

"I think you should go home after this and rest up. It probably would not be a good idea for you to go to yoga today and strain yourself," I told her.

"I think you may be right," she said. "Though I don't like to miss work so much."

I finished every particle of my breakfast. Erin, being Erin finished with some bacon and sausage left over. She eats like a beautiful little bird, although I was surprised that she ate what she did considering the state of her health.

She looked down a short hallway where the ladies restroom was located.

"I wonder how you get in the bathroom. Do you need a code or something?"

The door to the restroom was locked with a numerical key pad.

"I don't know, but I'll find out."

The next time our waitress came by I asked her about the restroom.

"The code is four seven eight," she said.

"Thank you," I told her.

"Here, take this," Erin said, handing the waitress her credit card.

"Hey, wait a min..."

"I want to pay for this," Erin told her, "It's his birthday."

"Oh, happy birthday," the lovely waitress said, as she walked off with Erin's card.

"Young lady..."

"I didn't really need to use the restroom," she told me. "I was just going to get up and go to the cash register and pay, but you can see the cash register from here too."

How devious of her. I like that. Reminds me of myself.

"Okay, but on your next birthday we're coming back to this very spot, and I'm paying!"

"Alright."

The waitress came back with the credit card receipt for Erin to sign, and she placed a small dish of vanilla ice cream covered with whip cream in front of me. "Happy birthday," she said.

"Wow, thank you."

"Wow, Rick. I think I will use the restroom while you eat that."

I finished my birthday ice cream, Erin returned, and we made our way back to her office where Erin presented me with the traditional birthday pie (pictured above). Unfortunately I was taking a little nap at the time.

Erin did go home after that. She told me the next day that she slept throughout the rest of the day.

I will always remember my birthday breakfast with Erin, for the rest of my life, and it is so special to me that she came to work that day so we could have it.

Thank you so much Erin. You really made my day great.

I returned to my box, feeling great, and got a little work done, looking forward to seeing my esteemed yoga teacher, Beth, at our one o'clock class.

To be continued.

Happy Birthday Veronica! 1

Veronica Hart


Kelly Osbourne



Johm Cleese



John Gotti


Nanette Fabray

Capt. James Cook

Happy Birthday!
Congratulations are in order for the lovely actress, Veronica Hart, who starred in such cinematic classics as "Deranged," Roommates," and "Foxtrot," and who celebrated her birthday yesterday.

Yesterday was also the birthday of Ozzy's lovely daughter, Kelly Osbourne, who is now the same age as my lovely case manager, Erin, who I'm sorry to say, went home early yesterday as she seems to be suffering from a bad head cold and chest congestion. Get well soon Erin!

Yesterday we also celebrated the birthdays of Monty Python founder and star, John Cleese, crime boss, John Gotti, the lovely actress and singer, Nanette Ruby Bernadette Fabray, and the British explorer, James Cook, who performed the first recorded circumnavigation of New Zealand, which at the time badly needed to be circumnavigated.

Yesterday was many other peoples birthdays as well, including some not mentioned on the Internet.

Oh yes, it was mine as well.

Well one must have a day of birth, and October 27th is as good a day as any, actually better than some. Who would want their birthday to be on, let's say, September 11th, for instance, a day that will be remembered as a national day of tragedy, or December 7th, the day the Japanese attacked Pearl Harbor? Oh, wait a minute, December 7th is my lovely sister's birthday.

Never mind.

I began my birthday celebration early, the day before on the 26th, by receiving an Email from my lovely case manager. That is not unusual in and of itself. I've received many Emails from her throughout the years, and I send her Emails as well. As a matter of fact, if the truth be known, most of the Emails I receive from Erin are in direct response to the Emails I've previously sent to her, like if I Email a question to her and she replies with an Email answer.

I'd say on average I get one reply (if I'm lucky) for every four Emails I send to her. I'm not complaining, mind you. I do realize how extremely busy Erin is, so much so that she hardly has the time to text and answer personal calls on her Iphone.

Erin, if you ever read this, please realize that we only tease you because we love you... and please don't hurt me... anymore.

The Email that Erin sent to me is historic in nature due to it not originating from her office computer. No, Erin had called in sick Monday, having been sick with the same nagging illness mentioned above for the entire weekend.

I know that all of you dear readers wish Erin a speedy and robust recovery. I certainly do.

She must have Emailed me from her home in Santa Monica on Monday afternoon, although the message was transmitted through a third party, so I could not be sure. However, I had inside information that she had quarantined herself to her bed, reading from the Twilight series of novels, watching old movies (The Lost Skeleton of Cadavra), drinking tea and eating oatmeal for four days. What discipline!

Erin had sent me a birthday present, some Fandango movie passes through the magic of the Internet. Isn't it wonderful!?

Now I can go to the movies anytime I want and my Fandango movie tickets will be waiting for me. No more long lines! Now all I need is for my sister to send me some Redenbacher popcorn passes to go with them, and I'm all set.

Sorry about that Pearl Harbor crack, Cheryl.

And thank you Erin!

Unwittingly, Erin had solved a small but difficult problem for me. Earlier that day at the Depression Group at the Veteran's Administration's downtown clinic, I had brought up the subject of my young case manager and my birthday.

My lovely psychologist, Dr. Kimberly, had returned from medical leave apparently no worse for wear, and we had been discussing different scenarios on how we were likely to respond in each instance. Like getting stuck in traffic and things of that nature. I came up with my own example.

"I have an example," I offered the group. "Tomorrow is my birthday, and I know my case manager wanted to take me out to breakfast. Now she has a big... a recurring case of Mondayitis and wasn't at work today. So what happens if she doesn't come in tomorrow, or does come in and forgets all about it? Should I remind her? I mean I don't want to just go up to her and tell her it's my birthday just to go to breakfast. On the other hand, I don't want to say nothing about it, and then later on when she remembers... I don't want her to feel bad about missing it... you know what I mean?"

"Yes," Dr. Kimberly replied, "we know exactly what you mean, but we have no answers for you."

"What, but..."

"No answers I told you. You'll have to figure this out by yourself, Joyce."

Fortunately, even while on her sickbed, my friend Erin mustered enough energy to think of me and send my Fandango passes... and confirm our breakfast the next day. I Emailed her back letting her know I would see her in her office the next morning at nine thirty.

Due to the magic Internet, by the time I saw my lovely case manager the next morning, all of my friends and family, many who I've never even met, sent their happy birthday wishes to me via Facebook. That was very gratifying, considering last year I got diddly squat, and no one wished me a happy birthday.

Erin even came to work yesterday morning, which greatly facilitated our going to breakfast. She gave me a "Happy Birthday" conical, cardboard hat to put on. She put another one on as well. They were both leftover hats I had bought for her birthday celebration last May.

Erin looked great, but sounded sick still. Her voice was` a bit hoarse, and she was prone to coughing. I felt her forehead though, and detected no sign of fever. I let her know we didn't have to go if she wasn't up for it.

"Oh no," she told me. "We're going!"

My case manager has spunk.

"My mom was mad at me for coming to work today. She wanted me to stay home, but I told her I had to see Rick on his birthday."

"She really thinks that you're that sick. And she got her medical degree from where..."

"My mom's a nurse."

"Oh. Well. You should listen to your mother. Please tell her I said that."

We discussed the merits of the classic, "The Lost Skeleton of Cadavra" ("I watched it for ten whole minutes, getting madder all of the time at the bad acting, until I realized it was a spoof!"), before we took off for my birthday breakfast, Erin, the soldier that she is, coughing away.

To be continued.

The Warning 1

"A derivative is a financial instrument that is derived from some other asset, index, event, value or condition (known as the underlying asset). Rather than trade or exchange the underlying asset itself, derivative traders enter into an agreement to exchange cash or assets over time based on the underlying asset. A simple example is a futures contract: an agreement to exchange the underlying asset at a future date. Derivatives are often leveraged, such that a small movement in the underlying value can cause a large difference in the value of the derivative. Derivatives can be used by investors to speculate and to make a profit if the value of the underlying [asset] moves the way they expect (e.g. moves in a given direction, stays in or out of a specified range, reaches a certain level). Alternatively, traders can use derivatives to hedge or mitigate risk in the underlying [asset], by entering into a derivative contract whose value moves in the opposite direction to their underlying [asset] position and cancels part or all of it."

In other words the Derivatives Market is a huge, unholy, unregulated mess.

Listen: "The use of derivatives can result in large losses because of the use of leverage, or borrowing. Derivatives allow investors to earn large returns from small movements in the underlying asset's [say, the housing market] price. However, investors could lose large amounts if the price of the underlying [asset] moves against them significantly. There have been several instances of massive losses in derivative markets, such as: The need to recapitalize insurer American International Group (AIG) with $85 billion of debt provided by the US federal government. An AIG subsidiary had lost more than $18 billion over the preceding three quarters on Credit Default Swaps (CDS) it had written."

"Groupthink is a type of thought exhibited by group members who try to minimize conflict and reach consensus without critically testing, analyzing, and evaluating ideas. Individual creativity, uniqueness, and independent thinking are lost in the pursuit of group cohesiveness, as are the advantages of reasonable balance in choice and thought that might normally be obtained by making decisions as a group. During groupthink, members of the group avoid promoting viewpoints outside the comfort zone of consensus thinking. A variety of motives for this may exist such as a desire to avoid being seen as foolish, or a desire to avoid embarrassing or angering other members of the group. Groupthink may cause groups to make hasty, irrational decisions, where individual doubts are set aside, for fear of upsetting the group’s balance. The term is frequently used pejoratively, with hindsight."
　
Brooksley Born, like me, majored in English. Unlike me, she graduated from Stanford University in 1961 (I was only six years old at the time. How could I be expected to graduate from Stanford?), and wanted to enter the field of medicine and become a doctor. Her guidance counselor thought that any woman who stated her desire to become a doctor rather than the more suitable profession of a nurse, was just in it for the bucks, and not sincere about treating patients.
Instead she entered Stanford Law School, one of only seven women in her class. She was the first woman to be named president of the Stanford Law Review, and graduated first in her class. Take that, guidance counselor!
After law school she was selected as a law clerk for Judge Henry Edgerton of the U.S. Court of Appeals for the District of Columbia Circuit. Following that she became an associate in the Washington D.C. based international law firm of Arnold and Porter, where she worked on international trade law. She became familiar with complex litigation and arbitration cases involving financial market transactions. She made partner at Arnold & Porter and eventually rose to be the head of the firm's derivatives practice.
In 1993, after President Clinton took office, she was considered for the office of Attorney General, but Clinton found her too "boring," and the more electrifying Janet Reno was selected.
Instead she was appointed chairman of the Commodity Futures Trading Commission (CFTC), a bipartisan regulatory agency of the federal government, specifically designed to prohibit fraudulent conduct in the trading of futures contracts.
The stated mission of the CFTC is to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to foster open, competitive, and financially sound futures and option markets.
From this office, the head of a little known, little listened to, backwater agency designed to pay lip service to the role of federal regulation in the financial markets of powerful Wall Street entrenched interests, Brooksley Born would come into direct conflict with the most powerful men involved with the economic policies of the United States government. Men with names like Levitt, Rubin, Summers, and Alan Greenspan, Chairman of the Federal Reserve.
To be continued.

main image copyright © michael o'neill/corbis outline

Salvation Diary 12

"Salvation" Artist: Amanda Milke
http://paintsplatters.wordpress.com/

February 16 Saturday Day 157
　
I got tired of moping and sighing, so I got up and started moving around.
My mother had called me on the evening of the fourteenth to wish me a happy Valentine's Day. That was nice of her. I had considered calling my niece in Bullhead City and wishing her and my sister a happy Valentine's Day, while asking Keri if she would be my valentine. I chickened out though. I felt a little silly asking my niece if she would be my valentine. What if she said no? I'd be shattered.
Probably start drinking.
Anyway, today turned out to be pretty normal. Good. The more normalcy I tuck away the better off I am, I guess.
I wrote for awhile, in the lobby of course, and then took a walk before I started work. Beautiful day outside. Since tomorrow is my day off, there is a 95% probability it will be overcast, or Pasadena will suffer a locust swarm. Or something.
Work was rather peaceful. I started about an hour early, basically because I had nothing better to do. I was sorry I did so later when I began to get tired.
Eddie Gillespie started early also. He kept telling people that he had to work two extra hours, but it was only one and a quarter. The reason Eddie started so early was because he was filling in for Kevin Rockoff, who was attending a big Hawaiian luau with Ed Reitz and his lovely wife (everybody's wife is lovely. I don't know why), at the Salvation Army's Western Territorial Headquarters, in Palos Verde (a very ritzy piece of real estate. Don't tell me the Salvation Army doesn't make money), along with some of the other residents. Ed had asked me if I wanted to go, but I begged off, citing my work schedule as an excuse, and that it wouldn't really be fair to Mr. Vasquez who would have to work in my place if I were to attend. I reminded Ed that Robert needed some time off before his two long work days. Ed bought it. Not that I would have minded going (I would have hated it).
All I had to do this evening was to make sure that our undefeated basketball team got a ride to the Corps, that bingo started promptly at six, that Domingo, the Pasadena 1 trailer man, locked up the trailer correctly, that the damn bar was was put up in the thrift store parking lot, that the ladies from the thrift store got a ride to the bank, that the Saturday night VCR movie began promptly at seven, that the now defeated basketball team got a ride back after the game, make sure no fires broke out, make sure everything was locked up and secured properly at the appropriate time, sell a few canteen cards, dole out some change for the telephone, and make sure everyone was in by midnight.
This was accomplished with minimal effort, believe me. I needed to save my energy for the real work at hand; finishing a library book that Vernon Smith had lent to me: "Drug Testing in the Workplace, A Guide for Employers and Employees." Now I know a lot more about how to perpetuate a false negative in a urine sample than I used to. I also copied a table citing detection duration times in urine, and one concerning cross-reactivity, over the counter prescription medicines that can call false positives. Stuff like that.
After I finished that book, I started a novel entitled "The Restaurant at the End of the
Universe." I won't go into what its about. It's too silly.
I had trouble getting to sleep, and did not drift off until after four. When I did get to sleep, I dreamt of various aspects of Christy Canyon.
　
February 17 Sunday Day 158
　
What a relaxing day.
After the monstrous inconvenience of having to get up (after only three hours of sleep) for chapel, and then actually having to go to chapel (Major and Mrs. Johnson are back from vacation), and having to wade through the Salvation Army's brand of Christian dogma (I get so tired of being told that a person who suffered with a martyr complex, and carried it out to its logical conclusion, can save me), Tom Rotsch invited me out to breakfast.
Not that he offered to pay for it, or anything. We went Dutch.
Tom is a very enterprising young fellow ( a honky, just like me), very into religion as his primary means of staying sober. An ex-painter (house, rather than picture), he now enjoys building furniture and things of that nature, over in the warehouse. He is separated (two years now from a wife and two children, but sees them occasionally), and is trying, very earnestly, to get his life together.
We had breakfast at Tiffanys. Really! Just across the street from Rose's City Diner lies a little restaurant by the name of Tiffanys. It's not a particularly good restaurant, but it's cheap. Two eggs, hashbrowns, and toast, for 99 cents.
We talked about some of our past alcohol and drug related exploits, and discussed our dreams and plans for the future.
We walked by the park on our way back. It's still there... ever present. An awful reminder of my recent past. I showed Tom the trucks I used to sleep in. He told me that he used to live under a freeway bridge. To each his own.
As we neared the residence we parted ways. I returned to the house, he continued south on Fair Oaks, toward Huntington Memorial Hospital, to visit the ex-resident manager, who was there because he was dying of cancer.
I went to my room to get my notebook, then down to the lobby to do some writing.
At two thirty I returned to my room and watched "Three Days of the Condor," with Robert Redford and Faye Dunaway on television. The film lasted until five, but at 4:03 I made a mad dash to the dinning room and gulped down some Chile Mac and Italian Sausage, then went back upstairs to finish watching the movie.
A very good episode tonight of "Star Trek, the Next Generation," concerning a missing day on the Enterprise.
I lost horribly at bingo once again. Then watched the Sunday night VCR movie, "El Diablo," with Louis Gosset Jr. I had seen part of it before while in jail. I had missed the middle of it because I went to eat jail food (Chile Mac) at lunchtime.
After the movie I watched a not quite up to par episode of "Married with Children," then read for a while before going to sleep, and continuing to explore the mysteries of Christy.
　
February 18 Monday Day 159
　
I had some SOS for breakfast today. Yummy.
Afterwards I went back upstairs, while remarking to myself (looking around at everyone preparing for a long, arduous work day), what a beautiful morning it was. My favorite kind in fact. One in which I was free to crawl right back into bed if I so desired.
Which I did desire.
And which I promptly actualized.
I turned on my television before going to sleep. I tried to catch a glimpse of Debra Norville's legs, but she wasn't showing any this morning, so I rolled around and snoozed.
At around one I decided it was probably time for me to be getting up out of bed. I went downstairs to write, which took until three thirty. I read until dinner time.
I had thought that I had the whole evening to myself to do whatever I wanted, but Kevin Rockoff let me know that I was scheduled to see a Kathy Somebody, presumably a vocational counselor.
Oh boy!
She was to be here directly after dinner, so I waited in the lobby for her, thumbing through the last pages of, "Another Chance."
She soon arrived. A very small, petite blonde, in jeans and a sweater. More youngish than middle ageish, and very pretty. I fell in love with her almost instantly.
We talked about job applications, and how to correctly fill them out. She asked me what I wanted to do. I told her that I needed to continue school. She said that was nice. She asked me what I wanted to do about a job. I told her that I wasn't really sure, that I may wind up working here after Mr. Vasquez retires. She said that was nice, what would be my second choice incase Mr. Vasquez did not retire? I told her that I didn't really know, that I might go back to work for AT&T, or that I may stay here as a beneficiary and go to school to learn all about drug and alcohol rehabilitation. She said, that was nice.
Somehow I get the feeling that nobody takes me very seriously.
If I wish not to be taken seriously all I have to do is talk to my mother.
She was a nice lady though, and trying to be helpful. She told me that if I ever needed her services to come and see her.
I felt oddly compelled to attend Ed's group counseling session at 6:30. I'm glad I did, for two reasons. First: even though I am a graduate of the program, the reason that I came to the Salvation Army, and by extension, group counseling sessions has not gone away. I'm still very much an alcoholic. Groups, although the ones provided here seem to be very superficial, can only help me. Groups are what you make of them. If I can believe something can help me I would be silly not to take advantage of it. Second: if I continue to go to Ed's group, even though it's not required of me, Jill won't think it strange that I continue to go to her group.
Why do I want to continue to go to Jill's group? The first reason I listed above basically.
The fact that Jill is the only female that I get a chance to talk to has nothing to do with it. Not one bit. Neither does the fact that I happen to be madly in love with her. Madly. That doesn't enter into it at all. My small endeavors toward self-help are very much on the up and up. Therapeutic necessities.
In group tonight we discussed change. Ed asked us what changes we found it difficult to make in recovery? The guys responded with surprising variety. It almost turned into what could be called a bitch session. When asked if I would like to participate in the discussion, I said, yeah sure. I said that it was real hard to change. But that is what recovery is all about. It was hard to change from living in the Park, to living at the Salvation Army, because I was beginning to get used to living at my bottom, and was afraid of the changes I would have to make. I put it off, resisting that attempt to change for weeks, even though I was sure that it would be a worthwhile experience and help me tremendously.
Similarly I told the group it was hard for me to even make the small changes in my routine that I needed to make just to attend this group.
Change is hard for us alcoholics and drug addict people (change is hard for everybody). Rigidity is a classic symptom of our disease. But change is what we must do. It's essential in recovery. From drinking and drugging, to learning how to live in sobriety, to learning to live with all of our crazy feelings. We don't need to learn to love change, we merely have to do it.
And maybe in time learn to accept it.
　
February 19 Tuesday Day 160
　
Up early for work. I did manage to fit some time in for writing before starting. I didn't know if I would have much time for it later.
The Major and Mrs. Johnson, Clarence and Pattie Orion, and Ed Reitz all came over for an early Advisory Board Meeting. About fifteen others also showed for the informal breakfast.
Since they were all over here, I went across the street with the morning's paperwork. I took my time about coming back, but when I did return Ed was waiting for me. He wanted to inform me that Jack Crossley had caught one of his roommates going through his night stand drawer. It turns out that it was the same guy we suspected of breaking into Jack's locker last week, and then breaking into his own to divert attention from himself.
But he kept doing it. Alcoholics and drug addicts can be clever people, but this guy wasn't one of them.
We gave him the boot. Robert told him to pack up and get out.
I wish him well. I also wish he learns how to keep his God damn hands out of other people's stuff! He'll live a lot longer.
I made a brief dorm inspection, and issued three pink warning slips for particularly unruly beds. I saw Maggie Harbottle (I don't make these last names up, folks) and Major Foote saw at 10:00. She asked me what I wanted to do, and I told her. Then she gave me a whole heck of a lot of reasons why I couldn't do what I wanted to do. Basically what she told me was that there was currently little demand for drug and alcohol counselors, and the Department of Rehabilitation could not justify putting me through school without the prospect of a firm job offer in the near future. She told me that if I were truly interested in counseling maybe another "type" might be better... as far as the Department was concerned.
I told her that I was fairly certain about what I wanted to do, and that I would most likely pursue my plans with or without the Department's help. She said she might be able to help anyway. She scheduled me for a physical, and directed me to get into contact with some acting drug and alcohol counselors, possibly connected with the V.A. (Veteran's Administration), so I could check out the job market for that kind of work. I told her that I would do this.
Next, I talked with my counselor, Richard, and told him what Maggie had told me. He offered to help me get into contact with some people he knew in the V.A. We also talked about death a little bit. Death and drugs.
By the time I finished running eight urine sample my shift had ended. After dinner, I read and wrote until Jill arrived. Adorably late, as always.
We did the same old goal routine in group tonight. I had to be reminded what my previous goals had been. I had said I would go to the dentist, which I had. I had said I would write everyday, which I do. I had said I would read two books, one by Fromm, and one by Frankl. I hadn't gotten to the Frankl book yet, and would have cited it as a new goal, but she never asked me for any new goals.
She asked everybody else. Maybe she doesn't want me in her group anymore. I have to think about this.
She did say that she wants me to continue to help Kevin Rockoff with his Forth Step. Tracy Alexander too. I told her that I would try and help them (and at the same time help myself with this difficult Step) if they wanted me to.
I think she's using me.
After group I went up to my lonely room and turned on the old T.V., and looked for any news of the war. It's still going on, you know. I haven't written very much about it because it's been pretty boring so far. We just keep pounding the shit out of occupied Kuwait and Iraq from the air. I'm genuinely surprised there's anything left to bomb.
Also, I'm not exactly sure whether the Iraqi military has inflicted any casualties to our side as of yet. Our own Air Force seems to be doing a good enough job of that.
I turned off the T.V., and read some of the Beanfield War, the Bible, and about Jesus in an historical sense, and then went to bed rather early in preparation for my big long day tomorrow.
I slept violently.
　
February 20 Wednesday Day 161
　
I got right up when Pandolfi woke me at 5:00. I even made it to the desk by 5:30. I must be sick, or going insane.
Mr. Vasquez got up early, came down to the desk and wrote up two guys, then left, not to be heard from for the rest of the day.
I managed to write a little in between dorm inspections, urine tests, and passionate requests for insulin. Oh yes, I also did my laundry. Finally.
The last three pews seem to hold some fascination for the men who sit there during chapel service. They are clearly marked as being reserved, and not for beneficiaries. The Major does not want anyone to sit there. He wants that area empty incase some V.I.P. personage shows up and needs a place to sit. But the men really like to sit there. I don't know why.
So I wrote up twelve pinks slips, one for each of the gentlemen I found sitting there this evening.
I've chased guys from there in the past. I've made numerous announcements over the P.A. I even tell individuals point blank not to sit there. They do anyway. Tonight I told Marvin Gardenshire that he would owe me a Saturday if he proceeded to sit in one of the last three pews. He told me that he already worked on Saturdays. Then I asked him what time did he get off of work on Saturdays. He said six. I asked him if instead would he enjoy working until midnight. He replied no, that he would not like that. I thought I had got my point across and walked away. When I looked back though, a short while later, he was still there! Smack dab right in the middle of the last damn pew!
So I felt entirely justified in writing those pinks slips. If I see the same guys sitting there nest week, I'll do them some physical injury.
George Plick's Transition Group was very interesting, although I must admitt I didn't understand what the hell he was talking about. Very interesting though.
I kept pretty busy for the rest of the evening, with writing pink slips and all.
Ron Collins found for me what looks like a very good book concerning Zen Buddhism, "The Three Pillars of Zen, Teaching, Practice, Enlightenment," complied and edited by Philip Kapleaw. I read the forward by Houston Smith before my shift ended.
I went to bed shortly after 12:30, and dreamed pacifist dreams.
　
February 21 Thursday Day 162
　
Today did not start out as smoothly as I would have liked. Then it got progressively worse.
Days are like that sometimes.
Victor ambushed me in the hallway as I was leaving the Sample Room. "Wasn't I sitting right in front of you in chapel yesterday?"
"Yes, you were."
"Then why didn't you just ask me to get up and move to a different seat instead of writing me up?"
"You, of all people," I explained, "should know the rules around here."
"Still, you could have just asked me to move."
"Victor, there were eleven other guys sitting in those seats. I'm not going up to everyone during the damn service, and asking them to move!"
He kept on though. "Man, I've been sitting there ever since I've got back."
"Victor, you've only been back for two weeks at most. Last week I know I announced over the P.A. system for everyone to STAY OFF THE LAST THREE ROWS OF RESERVED PEWS!"
"Man, you could have just told me."
At this point I began to get a little angry. "Victor, I don't know what your problem is. Those pink slips don't even mean anything. They're not going across the street or anything. It's just a warning... between you and me."
"You still should have just asked me."
"Yes, I could have asked you, but I choose not to. I could have wrote you a tiny, harmless, pink, warning slip, which I did choose to do. If you don't like the way I do things around here, Victor, that's just too fucking bad!" I walked off.
I shouldn't have let him get me upset. I should have merely referred him to Robert, or Ed Reitz.
When I came down to the lobby after having smoked a cigarette and calming down a tad, I saw Victor outside, angrily denouncing me to Ed Reitz, who had just drove up.
Later, as I handed him the morning paperwork, I mentioned it to Ed. "I hear Victor's a little upset with me."
He just shrugged.
We then started talking about my future and what I wanted to do with it. I got the feeling that he wasn't taking me very seriously as I spilled my guts concerning my future hopes and dreams.
Not being taken seriously, by people other than my dear sweet mother, is beginning to depress me. I wonder why I am working my ass off around here while no one takes me seriously and do not seem to appreciate my efforts.
While I was sitting in the laundry, waiting to hapless individuals trying to sneak up the back stairway during lunch time (against house rules), Curtis Carter asked me, "Why do you think Vasquez goes away on his day off now? Because he trusts you to take care of things when he's gone. He never did that when Victor was in charge."
Curtis made me feel a lot better by saying that. I also felt better after reading Frankl's A Hidden Cry for Meaning. I think Frankl cites some very valid points in this book. I'm not going to tell you what they are, but they're very valid.
On the brighter side, the hot water went off in the building, and could, and would not be fixed until tomorrow morning. Instead of listening to cries of the angry hoard, Don Erwin (the person responsible for building maintenance), wisely I think, took off and spent the night in Orange County.
I went to sleep tonight, grateful that I had once again made it through another day.
　
February 22 Friday Day 163
　
I woke up and it was lunch time, thus I got dressed and went downstairs to eat. Cheeseburgers.
Nobody volunteered to go buy me a pack of cigarettes, so I went and did it myself. Beautiful day outside. When I returned I wrote and read for awhile.
President Bush gave Saddam Hussein an ultimatum today. Either begin pulling out of Kuwait by noon tomorrow, or face a ground war invasion. No one feels it very likely Iraq will stage a retreat.
Work went very smoothly this evening, which means I got a lot of reading done. Frankl.
When he got bored, Eddie Gillespie came into my office from time to time, and told me some of his old combat stories. Quite frankly I was amazed at some of the things he has done and experienced in his life. A true American war hero, no doubt about it. Pretty soon, he tells me, with the same nonchalant attitude he uses describing getting hit by exploding shrapnel, he'll be going out again to live in the weeds (his description).
That's his choice I guess.
What a world!