Profitability, AIG Style

The AIG retirement and life insurance division explains profitability:

The company said that if not for those investment losses, the operations would have been profitable.

(via)

I Want To Be Just Like Bernard Madoff

If we were just like Bernard L. Madoff, we, too, could violate the law and fleece people of $50 billion and then magnanimously agree, from the confines of our sumptuous Upper East Side residence, to restrain ourselves from violating certain antifraud provisions of the federal securities laws, have our assests frozen, and, maybe at some time in the future, pay some interest and civil penalties.

But we're nowhere near as special as Mr. Madoff. Should any of us decide to engage in criminal activity and/or be grossly incompetent at our jobs it'll be off with our heads!

Sen. John Cornyn Supports Burning On Urination

Sen. John Cornyn opposes funding STD prevention. He says those funds would be better spent buying modern equipment for the National Guard and Reserve forces.

Sen. Cornyn might be a sadomasochist but people in the military are just too important (not to mention cute; see below) to entrust twits like Sen. Cornyn with their well-being.

First, people in the military are not immune to, you know, STIs. And by "not immune" I mean they have staggering STIs rates for such a controlled environment:

Of the 4 STIs, CT [chlamydia] rates have remained the highest, ranging from 95 to 1600 (per 100,000 person-years). Among the 4 military services, the Army reported the highest rates for all 4 STIs (CT rate, 2006: 1598.2; GC [gonorrhea] rate, 2006: 342.3; NGU [non-gonococcal urethritis] rate, 2006: 61.4; TP [syphilis] rate, 2006: 7.5). Annual CT and GC rates were consistently higher among women less than 25 years of age in comparison to men of the same age; NGU rates consistently higher among men; and TP rates generally higher among men. Reporting and screening requirements varied between services.

Second, super-duper military equipment is not all that effective against burning on urination and a pungent penile discharge. Education, condoms, and meds are much more effective.



(YT via)

For Poor People, No Family Planning Funds And Off With Their Heads

Women's reproductive healthcare is not important.

Evaluating the economic stimulus effect of states using Medicaid money for family planning without the need for a waiver from the Department of Health and Human Services on its merits is not serious business. It's just a sideshow.

After all, it seems our beloved politicians agree in a most harmonious bipartisan manner that providing family planning funds for the low-income is, by definition, an example of wasteful spending that would neither create jobs nor otherwise improve the economy.

Feasting on the Miami Real Estate Market

Photo by BobMacInnes

Here's one way to produce an 8% cash flow on your investment in these troubled economic times; become a vulture investor:

Across the bay, vulture investors, that other breed of migratory scavenger, are feasting. South Florida is in the throes of a truly hellish real estate bust. Home prices are down 24% in the past year, with many places changing hands for less than half their height-of-bubble values. The region has seen foreclosures on more than $14.2 billion worth of property this year—a record. Developers can't sell enough units to pay construction loans. Condo boards are trying to keep the stairwells of their half-empty buildings clear of vagrants. Landlords are renting out units at daily rates to makers of porn films.

The bleak tableau is exactly what vulture investors have been waiting for. Having sat out the bubble, they're flocking to the Magic City to make lowball, often all-cash offers for numerous properties at once. Some members of this motley assortment of foreign professionals, U.S. money managers, and retired corporate executives learned how to prey by picking through the detritus of the U.S. savings and loan bust. Others earned their stripes in emerging- market financial crises. They differ in their tactics; what unites them is their absolute insistence on paying bottom dollar.

Consider the hard bargains being driven by Beverly Hills banker Joel Heffron. On a humid October morning he ventures into Miami's Brickell Avenue financial district to meet with Peter Zalewski, principal at Condo Vultures Realty, a Miami real estate brokerage and consulting firm catering to distressed-property investors. The two are looking for real estate for Heffron's personal portfolio. They size up the luxe lobby of a waterfront high-rise that was the first building on mainland Miami to break $500 a square foot. Now it anchors what Zalewski has christened the Foreclosure District.

...

Not since a hurricane devastated Miami in 1926 has the city offered so much property at such steep discounts. "You're not going to see a new condo go up in this town for seven years, minimum," says Zalewski. "The common Joe can't get a mortgage, and a 40% downpayment is becoming the rule for anyone who can. But if you have the cash, you can feast like a king."

Especially foreign cash. Esteban, a doctor from Colombia who requested that his last name be withheld, has seen his buying power boosted by the strong Colombian peso, which he swapped for U.S. dollars this summer when it hit a decade high. On a recent Tuesday he inspects a new two-bedroom condo with a wraparound balcony overlooking the port of Miami, one of several purchases he wants to make. The unit's absentee owner paid $650,000 pre-construction, tried to sell it for $515,000, and is now asking $489,000. Esteban is confident he can close on a deal near $425,000 before Christmas, having just spied a foreclosure notice on a neighbor's door. "I don't care if they tell me to f--- off," says the Colombian. "They have to face the bank, not me."

A mile south, Frank Marrero, a snowbird from Hoboken, N.J., is three luxury bayfront condos into a campaign to buy 15 by 2010. "If you have cash down here and say you'll close in two weeks, you're golden," says the 31-year-old mortgage broker. Marrero is targeting the nonrefundable 20% cash deposits that buyers have put down on properties still in development. He offers to repay the buyers some portion of their deposit to entice them to back out. Then he plays hardball with the developers. So far he has pulled off this maneuver twice, he says. His goal is to buy places so cheaply that he can rent them out for enough to cover the entire monthly nut and still produce 8% cash flow on the investment—with the option of selling the units at a profit if the market comes back.

Capitalism, American (and British) Style

Photo via thechicentrepreneur

The latest State intervention in support of, you know, "free markets":

WASHINGTON - The Securities and Exchange Commission took the dramatic step early Friday of temporarily banning the routine practice of betting against company stocks.

The move, announced on the agency's Web site, may well be unprecedented and a reflection of regulators' concern about the widening scope of the financial crisis as entreaties come from all quarters to stem a swarm of short-selling.

In the announcement, the commission said it was acting in concert with the U.K. Financial Services Authority in taking emergency action to "prohibit short selling in financial companies" to protect the integrity of the securities market and boost investor confidence.

"The commission is committed to using every weapon in its arsenal to combat market manipulation that threatens investors and capital markets," SEC chairman Christopher Cox said in a statement. "The emergency order temporarily banning short-selling of financial stocks will restore equilibrium to markets."

The move, he said, would not be necessary in a well-functioning market and is only a temporary step that is part of the actions being taken by the Federal Reserve, the Treasury and Congress.