FIAF – it’s HERE, it’s HERE.

This FIAF is devoted to getting some effen knowledge.

Up first? Political posturing:

G.P. Morgan lost Two BILLION dollars and, of course, our politicians want blood. Not so fast.Some perspective:

First, consider the relative magnitude of the company’s trading loss: $2 billion on a $200 billion portfolio. A 1% trading loss is hardly the stuff that should make news, particularly in Washington.

Consider two other recent episodes. The Obama administration guaranteed a $535 million loan to Solyndra, then lost everything on its bet when the solar-energy company went bankrupt last September.

Then there is the auto-industry bailout. According to the TARP inspector general’s April 25 report, taxpayers have been paid cash and securities worth $50.9 billion on the $79.7 billion extended to General Motors, General Motors Acceptance Corp. (now Ally Financial) and Chrysler. That is a $28.8 billion loss.

But pay no attention to that. Congress will hold a show trail, posturing to support financial regulation, and this and that interference.

Quick note – the CEO, Jamie Dimon, is a big Democrat contributor.

****

Here’s some more effen knowledge; Kimbery Strassel on the truth regarding GS Technologies.

Obama’s been hitting Romney hard all week, via tweets, television ads, and a website for being a “vampire capitalist” when he worked for Bain Capital, buying up companies, destroying them, and killing jobs. GST was the steel company based in Kansas City.

That’s all very sad, but it’s not exactly the entire story.

Anyone who was aware of the state of the steel business in the 80’s and 90’s should KNOW that it wasn’t the most stable industry.

When Bain bought the Kansas City mill in 1993, steel was a scene of carnage. Global players were pouring out cheap products, and America’s high-cost steel plants couldn’t compete. The industry had lost 200,000 jobs in preceding years. In 1992 alone, the six largest U.S. steel mills had lost a combined $3 billion. Armco, the company Bain would buy the plant from, would lose $641 million in 1993.

GST in Kansas City was dying. It was down to 1000 employees, when it used to have more than four times that many at it’s height in the 70’s. But Bain saw potential, and bought it for $80 million, and upgraded the plant for another $100 million. And, for a while, things were good.

And then came the tsunami. The late 1990s saw a new outpouring of cheap steel from elsewhere around the globe. The Asian financial crisis walloped the mining industry, cutting demand for GST products. The price of GST’s electricity and natural gas skyrocketed. The union dug in, refusing to make concessions. By April 1997, it was on strike, shooting bottle rockets at guards. Labor costs spiked, and by 1999 GSI was reporting $53 million in net losses.

In 2001 it would become one of 31 steel companies that went bankrupt from 1993 to 2003. (Mr. Romney left Bain in 1999.) The steel crash was the economic drama du jour, with Congress railing about “dumping.”

Not exactly the narrative the Obama campaign is pushing.

*****

My friend Beasn is always talking about this.

Recently I had to run into that store and, sizing up the three lines, chose to stand behind a woman with one item in her cart. It was one of those large ice-cream cakes. When the checkout person said “Forty-one dollars,” I wasn’t the only one who blanched. The shopper’s son, around 12, repeated it as a question: “Forty-one dollars?”

I quickly calculated that the woman’s cake was eight times more expensive than the kind I make at home to celebrate birthdays. The mother ignored her son’s question.

She took out her benefits card, swiped it through the machine, and they were off. My turn.

A $41 dollar cake paid for by you and I. When a cheap one could be made at home.

Which is what you and I, who are watching our pennies, prolly have to do.

*****
I haven’t seen The Avengers yet, but this should cover it.

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2 Comments on “FIAF – it’s HERE, it’s HERE.”

  1. Jay in Ames Says:

    Birthday cake must be more expensive than graduation cake. The cake where I went to on Sunday was only $39. But that’s in Iowa money.

  2. beasn Says:

    Average ice cream cakes are more expensive than average sheet cakes.
    For my kid’s birthdays, I still buy and make Duncan Hines. They like it better than store made.
    Unless I’m under a severe time crunch, I wouldn’t think of buying a store-made cake.


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