Saturday, December 18, 2010

.....make the season bright........

Who knew being manipulated.................

..............would be this much fun.  Debt Management posts
ten credit card advertisements that she believes mislead the
viewer about the basic nature of credit cards.  Well, yeah.

Unless you have credit addiction issues, viewing these ads will
lighten your spirits.  They are well done.  Follow the link for all
ten.  A quick sampler here:



The perfect gift...................

.......for your favorite wood worker.  This is for you Patrick.
I couldn't identify half this stuff.























Thanks Kaching

I've never met him, but I think..........

......I'd like to have a beer with Steve Felix.  He is into institutional
real estate, making music, and thinking about life.  He blogs here.

He's been working on his goals for 2011.  Here is a sample from
his latest post (which also includes an update that he may be
playing music with a band called Maple Station Express out of
Calistoga, CA as well as an update on his company's holiday
bowling party at some lanes off of Times Square):


        Walk more slowly. Basically, don't rush.


        Keep my expectations modest. Then I'll be pleasantly
        surprised more often than disappointed.


        Keep myself open to serendipity.


        Make time to work on personal projects and not keep 
        putting them off.

       Remember "The Four Agreements": 1. Be impeccable 
       with your word; 2. Don't take anything personally; 
       3. Don't make assumptions; 4. Always do your best.


       Don't ever forget who and what are most important to
       me in my life.

When it comes to productivity, his counsel is simple:

"as someone once told me, be gentle with yourself.  And if
you want to be more productive, let's say step up the amount
of calls you make each week, remember this:  the difference
between making zero calls and making one is 100%! "

Quotable.........

"Don't fight forces, use them."
-Buckminster Fuller

"Never let the fear of striking out get in your way."
-Babe Ruth

"Always do sober what you said you'd do drunk.  That
will teach you to keep your mouth shut."
-Ernest Hemingway

"Balancing your budget is like protecting your virtue.
You have to learn to say, 'No.' "
-Michael Levine

"Be careful what you set your heart upon, for it will
surely be yours."
-James A. Baldwin

"If you can find a path with no obstacles, it probably
doesn't lead anywhere."
-Frank A. Clark

"We will either find a way, or make one."
-Hannibal

"If your ship does not come in, swim out to it!"
-Jonathan Winters

"If you are seeking creative ideas, go out walking.  Angels
whisper to a man when he goes for a walk."
-Raymond Inmon

"Beep-beep"
-Roadrunner

Friday, December 17, 2010

You better be good for goodness sake...........

A key piece to the puzzle................

"So, the financial industry eager to trade in Mortgage
Based Securities needed to find a way around those
recordation requirements, and this is how MERS was
born to replace public recordation with a private one."

The time:         Mid 1990's
The place:       Wall Street
The problem:   Massive amounts of capital are seeking
                       investments that would generate high rates of
                       return.
The solution:    Turn the secondary mortgage market into a casino
                       and a traders' paradise by creating a never-ending
                       stream of fabulous new mortgage backed security
                       products.
The problem:   Every time a mortgage was sold, the mortgage's
                       new owner's name would need to be recorded at
                       the appropriate County Recorder's office.  A
                       tedious, time consuming bit of paper work that all
                       by itself would have acted as a "governor" on
                       trading volumes.
The solution:    MERS

MERS (Mortgage Electronic Registration System) was created
in 1995.  A privately held company (their web site shows the very
interesting list of shareholders), MERS has been very busy.  If one
were to go to the Licking County Recorder's web site, one would
find over 43,713 documents recorded in the name of MERS. 

It is actually a fairly slick system.  MERS serves as a nominee
for the original lender at the closing of the loan, and then records
the mortgage under its own name.   At the same time MERS gives
the mortgage an 18 digit MIN (mortgage identification number).
Then the MIN and MERS's computers track the mortgage as it
gets securitized and traded hither and yon by the folks on Wall
Street.  There is no public record at the County Courthouse of
any owner of the mortgage but MERS.   If you call the nice
people at MERS and give them the MIN, they will tell you the
current holder of the mortgage. 

This will come as no surprise to those who looked at the share-
holders list,  MERS charges a fee at closing to the borrower,  and
is a profitable venture.

So what does it all mean.  Once MERS was established, and
high priced legal talent gave high priced opinions that it was all
on the up and up, mortgages had a personality change.  They
were no longer just pledges of property to secure a loan.  They
were now grist for the Wall Street trading mills.  The rocket
scientists became ever more inventive in creating trading vehicles
out of mortgages.  If you want to have your head spin, go here
and just scroll down and see the variety of collateralized
mortgage obligations (CMOs) they created.

The casino was open for business and business was very, very
good.  For a while.  As Warren Buffet famously opined about
derivatives, the CMOs eventually became "financial weapons of
mass destruction."

To be continued.................

Checks and balances: Use them or lose them...........

"To survive, self-government requires citizens who under-
stand that their rights are never finally secure and that their
civic duties can never be safely delegated."

Full essay here.

Mortgage Securitization made easy..........

........or not.  At least this handy chart identifies most, not
all, but most of the players.


"I'm shocked...............

Carpe Diem suggests that smuggling cigarettes is becoming a big
business in high tax states, here.  Should we be surprised?

"As you might expect, those prohibitively high taxes have
fueled a huge black market in New York, and the Post
reported that 'Illegal cigarettes are pouring into neighbor-
hood bodegas by the truckload from neighboring Indian
reservations, lower-tax states in the South and even as far
away as China.' "

Who says Americans have lost their sense of enterprise?

Too late.............

Cultural Offering presents us with the opportunity to be
ecologically more sensitive this Christmas season- a recycled
cardboard Christmas tree.

Sorry.  A  lovely ten year old cut scotch pine was selected and
purchased from our favorite tree seller.  It  now stands, all
decorated, in the living room.  Waiting on Santa.

I just love the idea that in the year 2000 some smart tree farmer
planted a scotch pine for the sole purpose of harvesting it in 2010
and selling it to me.  I imagine this time next year I'll be
decorating the 2001 model.  New growth, indeed.

Thursday, December 16, 2010

Barenaked Ladies sing a few carols..........................





Me thinks Professor Green has a valid concern........

"I worry that the extraordinary increase in unevenness in
wealth is not the result of merit, but the result of the game
being more and more rigged."

Full post here.  Short cut to the article he is commenting on- here.

The "heartland"........that's us.......

The National Real Estate Investor magazine has noticed that
the big boys have been overpaying for "trophy" properties in the
"gateway" cities again.  Here.  Will they never learn?

".....properties in markets once considered ‘flyover’ territory
offer steady income and a less volatile alternative to hyped
gateway cities."

"For much of 2010, investors have been fixated on prime
coastal or so-called gateway cities, snatching up trophy office
towers in their quest for quality properties. But rising prices
in those prime locations are sending some investors to the
nation's heartland..."

"The average cap rate in the Washington, D.C. market was
6.7% at the end of the third quarter, while the average cap
rate in tertiary markets nationwide was 9.5%, according to
RCA data."

For those unfamiliar with "cap rates", here is a quick and
simplistic primer:

The value of an investment property can be determined by
dividing the cap rate into the annual net operating income (NOI)
the investment property generates.   For example:

A $200,000 NOI at a 6.7% cap rate yields a $2,985,000 value.

A $200,000 NOI at a 9.5% cap rate yields a $2,105,000 value.

A bit of a difference.

As an investor, I know we make our money when we buy. 
Overpaying is not always fatal, but it makes the whole process
a lot harder.

It is a mystery why prudent and intelligent investors would buy
something at a 6.7% cap rate.

Come to Ohio, where you won't have to.

My toughest decision........

.....this Christmas season may be: should I ask for the new Tom
Clancy epic, Dead of Alive, or should I wait for six months and
read a copy from the library?

Clancy has been a fabulous writer.  Red Storm Rising,
Without Remorse, Sum of All Fears, and Debt of Honor
were especially good.  Clancy has also mailed it in. 
The Bear and the Dragonscreamed for the need of a strong
editor.  His next two books Red Rabbit and Eye of the Tiger
made me wonder what had happened to one of my favorite
authors.

Decisions, decisions.

If you get too cold, I'll tax the heat........



Thanks Ace

Wednesday, December 15, 2010

Beautiful in any language..............

Let's talk sub-prime mortgages.......

For an detailed, technical, scientific, and otherwise professional
review and analysis of the evolution of the sub-prime market, go
here.  For the detailed, technical, scientific, and otherwise
professional 81 page review and analysis of the history of the
sub-prime mortgage debacle, go here

For the short version of the back story, stay here.

In the old days - say 1970- when a bank (or S & L) lent a home
buyer the money to acquire a house, taking a mortgage (or pledge
of the property) in exchange, the bank had two things in mind:
        1.  Getting the money back
        2.  Earning a decent return on this investment in the
             home owner.
Since it was their money (held in trust for their depositors),
bankers tended to be shrewd judges of character and expected
the borrower not only to be "credit worthy" but also to have a
significant down payment of their own cash.

When the securitization of mortgages became Standard Operating
Procedure (when most banks packaged and sold most of their
loans), a subtle, but important, disconnect in the process occurred.

The bank's revenue stream was now derived from fees generated
by loan origination, not collection of interest over time.  While the
re-payment of the loan was expected, it was now some body
else's problem.  Character judgement became passe.

This disconnect between the lending of money and the collecting
of said lent money allowed for the creation of  sub-prime lending.

Essentially sub-prime borrowers are borrowers with a greater
than previously normal chance of defaulting.  Such borrowers
are typically identified by low credit scores, previous financial
difficulty, and minimalist down payments.

In the early days of sub-prime lending, the borrower typically
paid a significantly higher interest rate - to reflect the lending
risk - than borrowers with "good credit."

The process flowed like this:  poor credit risk borrows money
to buy a house, bank charges poor credit risk a higher than
normal interest rate, bank sells riskier mortgage with high
interest rate into the secondary mortgage market, some smart
and non-risk adverse investor buys the high yield investment
and accepts the risk of collection.  It was a win-win-win
deal.  A virtuous cycle if you will.

So where did the mega-problems arise?   That is a story for
another day, but it probably won't come as a surprise if a
finger or two gets pointed at the young rocket scientists on
Wall Street and their inability to leave well enough alone.

Laughed out loud.........

Full essay here.

Opening sentence here:

"Muslim suicide bombers in Britain are set to begin a
three-day strike on Monday in a dispute over the number
of virgins they are entitled to in the afterlife."

Thanks to Maggie's Farm for pointing the way.

Rigging the revolving door..........

The Economist questions the well worn path big government
insiders tread between the corridors of power in Washington
D.C. and temples of finance on Wall Street.  Essay here.
Excerpts here:

"LAST July Peter Orszag stepped down from his post as the
head of the Office of Management and Budget. As budget
director, Mr Orzsag helped shape the first stimulus package
and, more visibly, the health-care reform legislation.
Apparently, the market values this sort of experience. Last
week, Mr Orszag accepted a senior position at the invest-
ment-banking arm of Citigroup, an institution that exists in
its present form thanks to massive infusions of taxpayer cash.
Exactly how much Citigroup pay Mr Orszag is not public
knowledge, but swapping tweed for sharkskin should leave
him sitting pretty. Bankers who spoke to the New York Times
ballparked his yearly salary at $2-3m."


"Yet it seems that time and again market institutions find
ways to use the government's regulatory and insurer-of-last-
resort functions as countervailing forces against their
competitors and, in the end, against the very public these
functions were meant to protect."

"We are constantly exploited by the tools meant to foil
our exploitation."

Wow...................Who knew?

"Blogging sets the foundation for influence providing an
intellectual epicenter for vision and knowledge."

So says Brian Solis in his "State of the Blogosphere 2010"
post.  Here


Thanks Presurfer.

"Marci, do you know what Thomas Jefferson really meant by the pursuit of happiness?"

 
     "Stewart (Emery), the coauthor of Success Built to Last, knows many fascinating and often obscure facts.  Back in Jefferson's day, he explained, the common usage of the word 'pursue' was not to chase after.  In 1776, to pursue something meant to practice that activity, to do it regularly, to make a habit of it.

     "What a difference a definition makes!  Thomas Jefferson, our wise Founding Father, meant that we all had the right to practice happiness, not chase after it - which isn't very productive anyway."

-excerpted from Happy for No Reason by Marci Shimoff

Back by popular demand.................

Tuesday, December 14, 2010

Pat a Pan...........

Volume way up....

A matter of perspective................

Seeking Alpha is bullish on home builder stocks.  Full analysis
here.   Excerpts here:

"I think homebuilder stocks may be one of the best buys of
the next decade. Buy them now and put them away. If they go
lower, buy more. There, I said it. Now, you can either laugh
at me or listen to my simple explanation. The choice is yours.



"...housing starts over long periods of time track population
growth. "In hindsight it becomes perfectly clear that we were
massively overbuilding for the first half of this decade.

"We have now potentially UNDER BUILT in the last half of
the decade, by as much as we OVER BUILT in the first half.
"Estimates of the US population in 2020 vary, but if the past
is any indication, we will add between 25 and 30 million
people over the next ten years. And as a result, we will have
to build between 13-15mm houses by 2020. Housing starts
will need to double or triple in short order to keep up with
population growth – especially if they stay depressed in 2011.

"The population of this country is still growing and will
continue to grow. People need places to live. 

"The housing rebound and the economic rebound will be one
and the same.


"More Jobs = More Construction = More Jobs = The cycle
will continue.


"... homebuilders .... They’ve fixed their balance sheets and
are waiting. They’re profitable at the lowest starts ever, and
they’ll be REALLY profitable when housing starts move back
to track population growth and household formation. Buy
them now before everyone else figures it out."

---------------------------------

I hope he is right.  I would love it if the building industry
prospered.

One of the things I've noticed is that when people talk about
the economy getting back on track,  they assume that it will
be like 2003-2006 again.   I suspect that is the wrong frame
of reference.  Bubble business and bubble values are long
gone.  Think mid-1990's instead.

Toll Brothers is a major player in the production building
business.  In 2005 their stock was in the $50 range.  It is
now trading for a hair under $20.  During 1995 their stock
was trading in the $4.00 range.  The stock of M/I Homes,
a Columbus, Ohio based big time production builder, shows
a similar pattern.

Mine is a very superficial analysis, but before investing in
production builders you might want to consider the mid
1990's as your frame of reference, not 2003-2006.

Not to be missed............

...........for the dialogue-free Layman's guide to Qualitative Easing-
visit here.

99 Weeks.............

"As I mentioned last week, the proposed tax legislation
provides no additional help for the so-called "99ers". The
'extension of the unemployment benefits' is an extension of
the qualifying dates for the various tiers of benefits, and
not additional weeks of benefits."


Calculated Risk talks about the end of unemployment benefits
for the "99 weekers", here.  99 weeks.

The classic wisdom of Sgt. Schultz..........

Capitalism is not a theory.....................

Full essay here.  Fun excerpts here:

"Capitalism is just what humans naturally and practically do
to survive, to exchange things, and to try to thrive, when they
are left in peace by Power."

"Adam Smith did not invent capitalism (or even use the term-
yes, it was Marx who made it an "ism") - he just tried to
explain what energetic and creative people do when they can
do it peacefully, and by free choice."

"In Socialist fantasies, I sometimes think they imagine that
money and wealth come from Daddy. That's probably why
the college kids like it."

Not sure it is the right question...........

"The world needs to figure out how advanced economies can
provide for their people without relying on roaring growth
rates driven by asset bubbles."

Full, and interesting, essay about Krugman, Japan, Germany, and
the United States here

Doesn't having the world "figure out how" to do anything imply (or
maybe I infer) that there is a group of smart people somewhere
who make all sorts of decisions  for us?   Are economies supposed
to provide for their people?   Just wondering.

Monday, December 13, 2010

A little TSO to brighten the day.......

Winter Wonderland...........

I first learned of Terry Redlin at a Ducks Unlimited
dinner/auction. I love his prints, especially those featuring
sunsets. Several are hanging nearby, and several have been
given as gifts.

It just seemed appropriate to post this today.  Enjoy Winter!

Winter Wonderland

A blog................

............to nourish your soul.  Here

Let's talk mortgages..............

This is a primer for us laymen who wonder about the current
mess in our system of financing houses.  If you are up to speed
on mortgage backed securities, feel free to skip this post.  For
a more detailed look, go here.

There is no question that the pooling and securitization of
mortgages is a good thing.  It has made mortgage money
readily available, at standardized interest rates that are often
lower than otherwise available, across our country for the past
40 years.  A really good thing.

If my favorite community bank makes a home loan, it has taken
a liquid asset -  its cash, and turned it into a relatively illiquid
asset - a lien against a property that will be paid back in monthly
installments over a long period of time.  Pretty simple, pretty
straightforward.  The only problem is that, sooner of later, my
favorite community bank will not have enough liquid assets -
cash in the form of savings deposits, to keep making home loans.
That is a bad thing.

Pooling and securitization solves that problem.  My favorite
community bank can then sell the relatively illiquid mortgage
asset to an agency such as Freddie Mac, thereby recouping their
cash so that they can re-lend,  making fee income each time. 
Freddie Mac then pools a whole boat load of mortgages together
and sells the package to large investors as a security instrument.
Then the whole process starts again.  This is a good thing.

Securitization has been around a long time, since the late 1960's
for FHA and VA loans.  In the early 1980's the first mortgage-
backed securities and collateralized mortgage obligations were
issued.

Faithful readers know I love charts.  Here is one from the
Econobrowser that dramatically shows the growth of the
market for mortgage backed securities.  Notice the decline
in mortgage holdings by the Savings & Loan industry.
Changes, changes, and more changes.

















The pooling and securitization of mortgages has also brought
standardization to the real estate finance world.  As a result it has
greatly enhanced the title insurance business and  the appraisal
industry.  It also helped birth the now ubiquitous FICO credit risk
scoring system.

So, how did something so simple and so useful and so beneficial
become so malignant?    An attempt to understand that, or maybe
just a gratuitous cheap shot, occurs in the next posting.

The young rocket scientists couldn't leave well enough alone............

So how did something as useful and benign as pooling and
securitizing mortgages on American homes turn into a
malignancy that has done real damage to our economy?

Here is a clue

"So, the financial industry eager to trade in Mortgage Based
Securities needed to find a way around those recordation
 requirements, and this is how MERS was born to replace public
recordation with a private one."

For a generation, the "best and brightest" have migrated to Wall
Street after college in pursuit of the big score.  It would be nice
if we could say they did productive work while in said pursuit.

I suspect that the overwhelming evidence, and fun books like
Michael Lewis's Liar's Poker and the Big Short, would
indicate that the pursuit was the only thing.

At the hands of the "inbred products of ivy league puppy mills"
(to borrow a favorite quote of Spengler from friend Kurt),
the boring, predictable, socially useful secondary mortgage
market became a casino.  Trading volume soared as ever more
exotic mortgage-backed products generated ever more income
for Wall Street.  The fact that the quality of some of those
products was mostly theoretical was irrelevant.  The trade was
the thing.

Sooner or later, quality issues become important.  This truth
became all to apparent by 2007. 

Stay tuned.  The story is not over.

On the suspicion that you did not.............

......follow yesterday's link to Walter Russell Mead's essay on
The Crisis of the American Intellectual, here are a few more
excerpts, focused on "guild economy."

"Most intellectuals today still live in a guild economy. The
learned professions - lawyers, doctors, university professors,
the clergy of most mainline denominations, and
(aspirationally anyway) school teachers and journalists – are
organized in modern day versions of the medieval guilds."

"Membership in the guilds is restricted, and the self-regulated
guilds do their best to uphold an ideal of service and fairness
and also to defend the economic interests of the members."


"Guilds are not very good at mass production, and our need
for the services they produce has become so great that only a
much more efficient production process can serve. Health
care, education and legal services are all economic sectors
where prices have been rising more rapidly than the overall
rate of inflation. These professions must be fundamentally
restructured; a Marxist would speak at this point about the
proletarianization of the petit bourgeois intellectual
professions."


"Fortunately for the rest of society if not for the guilds,
developments in IT and telecommunications now make it
possible to reduce costs dramatically in the learned
professions."


"Ultimately one suspects that services once reserved for
elites will be available for the masses, just as the industrial
revolution enabled mass ownership of goods that had once
been the preserve of small elites. The effect will not only be to
raise living standards for most people by improving their
access to useful services. It will also be to transfer power and
authority from the provider of such services to the consumer."


"Increasingly, people will seek and acquire more control over
the decisions that shape their lives. People not only want to be
more affluent in the future than they are today; they want to
be more powerful, less beholden to the men in white suits."


"America today has many technical intellectuals – people like
doctors, engineers, and others who are able to carry out
complex tasks – and we are extraordinarily rich in specialist
intellectuals who have a deep knowledge of a particular
subject. Our educational and professional systems are set up
to train and support the large numbers of people needed to fill
these roles. We are much less effective at teaching and sup-
porting people who are able to master the essentials of many
complex subjects, integrate the insights from this kind of study
into a coherent social or political vision, and communicate
what they have learned to a broad general lay audience. The
more complex a society and the more rapidly it is changing,
the more need it has for multi-disciplinary, synthesizing
intellectuals who are focused on communicating serious ideas
to a large audience."


"There’s another, equally serious problem. In most of our
learned professions and knowledge guilds today, promotion is
linked to the needs and aspirations of the guild rather than
to society at large."


"We suffer from ‘runaway guilds’: costs skyrocket in medicine,
the civil service, education and the law in part because the
imperatives of the guilds and the interests of their members
too often triumph over the needs and interests of the wider
society."

A poem for Monday...............

A Simple, Village Undertaker put up a fabulous post titled
Do You Know What Love Is? - here

A brief excerpt here:

‘Love is what’s in the room with you at Christmas if you stop
opening presents and listen.’   -Bobby – age 7 (Wow!)

Ray closed the post with a video of Willy Porter singing his
song Unconditional.

Today's poem is an un-official version of that song.

              Unconditional

There's a woman with a babe sitting next to me
She rides the crooked train into New York City
She hold that child on her bended knee
Whispers something only he could hear
She said I will always love you no matter what will come
I carried you inside myself the two of us are one
No matter how you fall down or how it comes undone
To me you will always be shining
And he stares into her brown eyes
Into the face of unconditional love
I see a man laying in the street
He left his motorcycle at a high rate of speed
In his eyes there's a vacancy
But he seems to be, seems to be smiling
Ah maybe he was a Muslim a Christian or a Jew
I hope that he was laughing when off that bike he flew
But he struggled to believe just like me and you
As the ambulance is too late arriving
And he stares at the sky above
Into the face of unconditional love
Unconditional love
Sometimes I'm impossible sometimes a rage arose
Sometimes all the dreams are strewn across the floor
And I see myself reflected in your eyes
All the tragedy, the hope and fear
In my hour of dying the light is clear and clean
If it helps read from the bible don't hook me up to those machines
Stay by my side as I slide
Into some peace
Give me strength over what I'm afraid of
In the face of unconditional love
Unconditional Love

-Willy Porter

Sunday, December 12, 2010

A non-traditional Christmas carol

Wondering if................

..........some of the lines between science and religion have become
blurred a bit since this was written in 1952?

"Argument is unprofitable- worse than that, unintelligible-
when opponents do not share some common ground.  Between
the complete skeptic who denies reason's competence and the
philosopher or scientist who appeals to it, no common ground
exists.  Between the man who obeys the rule not to contradict
himself and the man who finds nothing repugnant in answer-
ing Yes and No to the same question, there can be no argu-
ment.  There is an issue between them, but the position each
takes renders the other to silence.

"Lack of a common measurement for judging opposed views
tends to render them incommunicable to one another.  For
men to be in this plight is the exception in science and
philosophy, but it seems to be the typical situation where
the basic issues of religion are concerned.  Of all the subjects
the most controversial, religious issues seem to be the least
capable of being settled by controversy.  No divisions
among men- certainly not those which separate philosophers
and scientists- are as unbridgeable as the chasm between
the faithful and those they call infidels......"

The preceding paragraphs are excerpted from the Introduction
to the section titled "Religion"  in Mortimer J. Adler's tome
The Great Ideas.

A mantra...................

Om Mani Padme Hum

Uh-oh..........................

Thanks Bill

A verse for Sunday........

3.  A voice is calling.
     "Clear the way for the Lord in the wilderness;
       Make smooth in the desert a highway for our God.

4.  "Let every valley be lifted up,
      And every mountain and hill be made low;
      And let the rough ground become a plain,
      And the rugged terrain a broad valley;

5.   Then the glory of the Lord will be revealed,
      And all flesh will see it together;
      For the mouth of the Lord has spoken."

Isaiah 40: 3-5
The Open Bible

The Crisis of the American Intellectual

The nice people at Maggie's Farm insisted that I read a recent
essay by Walter Russell Mead.  I did.  It is worth reading- here.
A few excerpts here:

"Regular readers of these posts know that I think that the
world is headed into a tumultuous period, and that the United
States is stuck with a social model that doesn’t work
anymore."


"Our culture of enterprise and risk-taking is still strong; a
critical mass of Americans still have the values and the
characteristics that helped us overcome the challenges of the
last two hundred years."


"Figuring out why so many of our intellectuals and experts
are so poorly equipped to play a constructive role - and
figuring out how to develop the leadership we currently lack -
may be the most important single thing Americans need to
work on right now."


 "It’s not just that some of our cultural strengths are eroding
as both the financial and intellectual elites rush to shed many
of the values that made the country great."

"But the biggest roadblock today is that so many of America’s
best-educated, best-placed people are too invested in old
social models and old visions of history to do their real job
and help society transition to the next level. Instead of
opportunities they see threats; instead of hope they see
danger; instead of the possibility of progress they see the
unraveling of everything beautiful and true."