Colin McEnroe | To Wit

Mortgage Crisis for Dummies

Despite my nearly lifelong association with one of the most formidable business minds of this generation, I often fail to understand some of the most basic aspects of business news, and I really can't justify calling Mr. Karp all the time to ask him to explain things to me. (That process seemed to strain his patience a little when we were in college, and I was attempting to take an accounting course.)

So I was pleased, in my research last week, to discover this little primer of the mortgage crisis.  I got really curious, all of a sudden, about what happened to all those subprime loans after they were securitized. 

It's here and here and here.  The last one is really the only one you need to absorb, if you're pressed for time.

I have no way of knowing whether its true or not, but it is, at least, digestible by the likes of me.

Wha'?

I actually thought this was some kind of Onion satire piece when I first saw it.

On the other hand, people do have problems. Life is messy. This is certainly falls somewhere along the Bill Clinton-John McCain axis of domestic chaos. We should all get over our surprise about this kind of thing, I guess. It's considerably less weird than Spitzer's whole deal.

A suggestion

We need tri-state planning to coordinate gubernatorial scandals.

Today's column.

"Party On, Dudes" is a lovely sentiment and unlikely to haunt you later

To those of you about to pick your 2008 High School yearbook quotes:

try to avoid Eliot Spitzer's mistake of picking one that was highly prophetic.

Now Rise, For Verily, Thou Art a Knight of the Order of the Naughty Pussycat

This guy? Pay for it? Oh, behave.

NYC Spitzer Resignation Slo-Mo

Traffic jams!!!

This is like something out of Spinal Tap.

Who You Gonna Call?

This story is amazing, especially because it was written and published BEFORE the Spitzer meltdown. As such, it is essentially wrong in its supposition that Bruno's is running out of rope; but it is breath-takingly right about a whole lot of other things and offers an unusually prescient glimpse at the "other"  Eliot Spitzer:

Up until last week, Bruno had been beating Spitzer in a war he says he never wanted. Bruno remembers the first time they met. Spitzer was attorney general. “I liked him. He was charming. Direct. Looked me right in the eye,” he remembers. He says they talked regularly during Spitzer’s campaign and “he says we’re partners, says we’re both going to govern together.” Bruno says he was shocked when Spitzer didn’t mean it. “I never saw the other side, that the man doesn’t think straight, that the man has a quirk in his mind. There is something wrong with his mind. He doesn’t think like most. He’s two-faced. He does not tell the truth. He looks you in the eye and tells you something that is totally untrue.”

This anecdote is especially amusing, in light of who broke the Spitzer story:

When Spitzer came into office in January 2007, “most thinking people thought we were going bye-bye,” says Bruno. How could the Republicans win back any seats with their leader under investigation by the Feds for moonlighting as a consultant? Yet only one Republican senator spoke out against him. They remained loyal. Plus, many thought Spitzer was an obnoxious bully who could self-destruct. “He is our greatest ally,” Bruno says.

Bruno has an arsenal of stories about what he sees as Spitzer’s looniness. His favorite is probably the one where the governor accused him of “abusing” Senate Minority Leader Malcolm Smith through a parliamentary maneuver. “You know,” he says he told Spitzer, “Malcolm Smith has his head so far up your ass he can’t even see straight.” Spitzer “really lost it,” Bruno recalls. “He said, ‘You have just insulted the governor of the State of New York! I’m calling the New York Times! Mr. Bruno, get out of my office!’ ”

Bruno says he just sat there for a moment, then jabbed. “I tell Malcolm every day what I just told you and he laughs like hell. Call Malcolm.”

“ ‘I’m calling the New York Times!’ ”

Bruno says he just kept hitting back. “ ‘You know what your problem is? You’re a spoiled brat, an arrogant kid that never got over the fact that when you don’t get what you want you have a tantrum.’ And you know what he does next? He runs out of his own office! I’m thinking, Jesus, where the hell is he going?” When Spitzer returned, the shouting continued. Then Spitzer left again. “Now I’m thinking, Jeez, there’s something wrong with this guy. He’s shouting, screaming until he’s purple. He’s 8 years old.” Spitzer returned for a final time. Bruno remembers his orders from Spitzer: “Get out of here!”

Eliot and Silda and Jim and Dina and Larry and Suzanne and ...

Whence cometh the motif of the pissed-off wife at press conference? It seems to me to be, even from the most cynical vantage point, bad political stagecraft. It makes you hate the guy more than you would if he turned up alone, because you can see the woman he hurt and because you also know she was probably bullied into appearing with him.

The Economics of High-End Hanky Panky

One of the many odd subtexts in the Spitzer mess is the fee structure charged by the Emperor's Club. It's a little intimidating, isn't it? Who among us -- of either gender -- thinks he or she could provide another human being with an hour of sex worth $5,500?  What do you do, to be worth that much? And how wonderful do you have to be at it?

Wrong questions.

The Emperor's Club appears to have been designed -- shrewdly -- to mirror the Trumpian tastes and spending habits of very rich men. I mean, there has to be some sense in which playing $5,500 for sex is a thrill all by itself. And the sex must be great, if I'm paying $5,500 for it, right? It must be the best sex in the world.

These men live in a world where part of the satisfaction is paying $3,000 for dinner for two, $50,000 for a wristwatch. $1,200 for one dress shirt. $150,000 for a car.  Are these things worth the price, by any objective measure? Are they that much better than more sensibly priced altenratives? Of course not.  They are satisfying simply because you can afford whem while most people can't. 

The club management was smart enough to create a system with a nomenclature these men would recognize from other aspects of their lives:

The Emperors Club advertised their prostitution services in part through the use of a website that included photographs of Emperors Club prostitutes’ bodies, with their faces hidden, along with hourly rates for different categories of prostitutes. The Website ranked the prostitutes using a ranking system from one to seven diamonds, and charged hourly rates according to the assigned ranking. According to the Website, the Emperors Club charged $1,000 per hour for a three-diamond prostitute, and $3,100 per hour for a seven-diamond prostitute.

The website also offered the Emperors Club’s most valued clients “membership” in the “Icon Club,” a status which allowed the clients to access restricted areas of the Website and permitted them to schedule appointments with the most highly-ranked prostitutes, whose fees started at $5,500 per hour. According to the website, in certain circumstances, the Emperors Club also offered its clients the opportunity to exercise a “buy-out clause,” which permitted them to purchase direct access to one of the Emperors Club’s prostitutes without having to contact the agency.

So don't beat yourself up, OK? You might actually be able to charge $5,500 if you had nailed down the right market position.

Meet David Paterson

If the Spitzer story is true, New York is about to have its first African-American, legally blind governor.  Maybe by the end of the day.