Administrative

Light Blogging

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We’re going up to Michigan tonight for the weekend, for my nephew’s first communion. I may not even take a computer with me. Be back Monday afternoon.

[Friday night update]

We arrived safely, but things have been kind of hectic, including doing some nice handgun shooting practice in a gravel pit west of Ann Arbor this afternoon (0.22 long and short barrel, 0.380 and 44 Magnum). Visited with family late afternoon/evening, and more such festivities tomorrow and Sunday.

Be nice in comments. Don’t make me come in there…

Business, Economics, Media Criticism, Political Commentary, Technology and Society

The Real Cultural War

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It’s about free markets versus fascist corporatism.

[Update early afternoon]

Sorry, but yes, it is fascism. Which is not identically equal to Nazism.

[Update a few minutes later]

So much for the rule of law:

As much as anyone, we want to see Chrysler emerge from its current situation as a viable American company, and we are committed to doing what we can to help. Indeed, we have made significant concessions toward this end – although we have been systematically precluded from engaging in direct discussions or negotiations with the government; instead, we have been forced to communicate through an obviously conflicted intermediary: a group of banks that have received billions of TARP funds.

What created this much-publicized impasse? Under long recognized legal and business principles, junior creditors are ordinarily not entitled to anything until senior secured creditors like our investors are repaid in full. Nevertheless, to facilitate Chrysler’s rehabilitation, we offered to take a 40% haircut even though some groups lower down in the legal priority chain in Chrysler debt were being given recoveries of up to 50% or more and being allowed to take out billions of dollars. In contrast, over at General Motors, senior secured lenders are being left unimpaired with 100% recoveries, while even GM’s unsecured bondholders are receiving a far better recovery than we are as Chrysler’s first lien secured lenders.

Our offer has been flatly rejected or ignored. The fact is, in this process and in its earnest effort to ensure the survival of Chrysler and the well being of the company’s employees, the government has risked overturning the rule of law and practices that have governed our world-leading bankruptcy code for decades.

Hey, there are omelettes to make.

Business, Economics, Technology and Society

Airline Seats

15 Comments

Why are they so miserable?

I found this interesting:

Brauer, a former Air Force officer and mechanical engineer, still has a lot to do with our in-flight comfort. He’s been researching it almost since he started at Boeing in 1979 and consults with airlines on how seat configurations balance comfort against the bottom line. His calculations largely led to the 777’s shift to three rows of three, from the “2-5-2” configuration, which allows everyone to have a free seat next to them when the plane is 67 percent full (versus 44 percent).

I’ve kvetched about this before, I’m sure [Googling…yup, here it is, in comments), but a big reason that I don’t like wide bodies is that the window/seat ratio is much lower on them, and I’m a window man. But at least with the 3-3-3, I can get a window and still have a decent chance of an empty seat next to me. That would almost never happen with a 2-5-2. I don’t know why this should have required a calculation, though. It seems pretty intuitively obvious that 3-3-3 is superior, just because a row of three seems preferable to a row of five. It puts everyone closer to an aisle, other than windowers.

Or does it? Maybe a calculation is required…

Business, Economics, Political Commentary

More Candidates For Tea Parties

17 Comments

GM bondholders:

This is what happens when the government picks winners and losers: big unions walk away with GM and small investors get thrown by the wayside. Sooner or later, we’re going to have to return to some kind of normal economic activity, and when that happens we will need investors, large and small, to feel it’s worthwhile getting back into the market. Deals like this one are going to make that awfully difficult.

People are reeling from having their 401ks wiped out in the current market slide. And now those who had for years bought what they thought were “safe” blue-chip corporate bonds are discovering they were only safe until they were told by the government to go fly a kite because government wants to pay off the unions instead. That is deeply unfair to small bondholders, and it’s dreadful economic policy. As a friend of mine put it to me, “Who in their right mind will buy corporate bonds now? And if nobody’s buying bonds, how exactly are our debt markets going to get humming again? What a mess.”

It’s almost like they want to wreck the economy.

[Update a couple minutes later]

Apparently, Ken Lewis, head of B of A, has been fired.

The question is, who did it? The shareholders and board (you know, the old-fashioned way), or was it our new head of the economy continuing to grab more power?

[Update]

Apparently it was the board. And he’s still CEO, just not chairman.

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