Gongol.com Archives: September 2011
Brian Gongol

September 4, 2011

News No side to cheer for; everybody loses
The Federal government is suing 17 banks for selling really bad mortgages to Fannie Mae and Freddie Mac, causing the two mortgage lenders to fail. There's absolutely nobody here to cheer for: Some, if not all, of the banks quite probably did behave crookedly and misrepresented the mortgages they were selling. Fannie Mae and Freddy Mac were buying bundles of mortgages that their people clearly didn't understand well enough. The investors in Fannie Mae and Freddy Mac were trying to get away with a "risk-free" deal because the government had always promised (implicitly) that it would step in to guarantee their investments in case anything went wrong. And, of course, it's the government (under the supervision of the lawmakers American voters elected) that has spent decades trying to prop up the residential construction industry by creating tax breaks (like the mortgage interest deduction) and guarantees (like the ones for Fannie and Freddie) that created incentives for Americans to buy housese that exceeded the size and cost that we should have reasonably been buying. It's like a huge car wreck in which every single driver was caught speeding and driving drunk as they went straight into the pileup.

Business and Finance Americans hold more stocks and bonds in Britain than anywhere else in the world
Japan and Canada come in second and third, respectively, in stock holdings. According to the Treasury Department, Americans have $626 billion in UK equities, $450 billion in Japan, and $409 billion in Canada. For points of reference, Exxon Mobil has a market capitalization of $350 billion, Apple is at $347 billion, PetroChina is at $226 billion, and Microsoft is at $216 billion.

News Nebraska governor speaks up to oppose oil pipeline
The Keystone XL pipeline is supposed to pass through Nebraska, traveling over the sandhills. Nebraska Governor Dave Heineman has issued a letter to Washington saying that he opposes the route, which travels over the Ogallala Aquifer. The aquifer supplies most of the state's water for drinking and irrigation, and some concern exists that a spill could cause oil to enter the aquifer and contaminate it.

Aviation News Creative tail art
It's too bad more creative fun isn't being had with the art on the tails of passenger planes. British Airways did it for a while, and Frontier puts wildlife photos on its aircraft tails. Pan Am named many of its planes, which was a clever marketing move -- giving the airplanes a sort of identity long given to passenger ships. Nobody's saying that a passenger would deliberately pay more to fly an airplane with a special name or unusual art on its tail -- but doing creative things with the brand and de-commoditizing things like airline tickets does help create a lasting allure. Just ask the people who appear willing to buy Pan Am-themed merchandise two decades after the original incarnation of the airline stopped flying.

Iowa Interstate 29 in southern Iowa is "going to be messed up a lot longer than we want it to be"
For all the attention being paid to the hurricane on the East Coast, there are parts of Iowa -- including the main Interstate linking Sioux Falls, Omaha, and Kansas City -- that have been underwater since June. With all due respect to the people living out east, the flood damage in Iowa has gotten far less attention because it's happened in a more sparsely-populated area, and in slow-motion.

Iowa Regents need to figure out what they really want from UNI
The university gets a lot of praise for being an Iowa-focused university meeting the needs of the general-interest population from the state, but they're also being told to attrct more out-of-state students. The problem is that a lot of out-of-state recruitment efforts are either costly or require promoting individual programs in order to make it a destination school (as it already is for education and accounting, for instance). But making UNI a destination school would seem to conflict with its charter, which is to serve as the state's comprehensive university. Essentially, the school is being told to deliver one type of service, but raise revenues like one that's quite different.

Weather and Disasters Better weather forecasting behind the scenes
The National Weather Service is starting up a system called AWIPS 2 -- the main point of which appears to be delivering better-integrated information to the computers used by the Naitonal Weather Service offices so that forecasters can make better predictions. They could probably also use more radar sites, too (since there are many parts of the country 50 to 100 miles away from the nearest radar, which means that activity as much as 10,000 feet above the ground can't be seen on radar), but this appears to be a good effort to make better use of what they presently have.

Business and Finance British supermarket giant just couldn't make it work in Japan
The UK's enormous Tesco supermarket chain has been trying for almost a decade to make inroads in the Japanese grocery business, and has finally decided to pull the plug on the experiment. It's interesting to watch what happens when companies with lots of experience and success in one market try to move into a new one (whether it's a change of geography or of business) and fail. The failures make for far more interesting and instructive reading than the successes. Some say the Tesco experiment failed because it wasn't upmarket enough. Some think it's because the Japanese market is highly fragmented. Others say it's because the market is shifting in favor of convenience stores rather than full supermarkets. The company is going to keep competing in China, South Korea, and Thailand. And there was nothing said about shutting down its effort to crack the American grocery market, either.

Comments Subscribe Podcasts Twitter