College Football Trophies- Famous Idaho Potato Bowl Edition

Here:

Apparently, the potatos are an add-on, as Frank Solich celebrates in an empty stadium:

Way to bring the Potato Bowl home, Bobcats.  During the game, I saw a couple of Idaho Potato ads.  While the ads featuring the landscape were entertaining, everybody knows sex sells:

Santa's Coming To Town

Will Ferrell makes me laugh:

First NFL Championship Game

December 18, 1932:

The Chicago Bears defeat the Portsmouth Spartans 9-0 in the first ever NFL Championship Game. Because of a blizzard, the game is moved from Wrigley Field to the Chicago Stadium, the field measuring 80 yards (73 m) long.
In the 1932 season, the Chicago Bears and the Portsmouth Spartans tied with the best regular-season winning percentages (although the Green Bay Packers had four more wins). To determine the champion, the league voted to hold the first official playoff game in Chicago at Wrigley Field. Because of severe winter conditions before the game, and fear of low turnout, the game was held indoors at Chicago Stadium which forced some temporary rule changes. The game was played on a modified 80-yard dirt field, and Chicago won 9–0, winning the league championship. A number of new rule changes were instituted, many inspired by the 1932 indoor championship game: the goal posts were moved forward to the goal line, every play started from between the hash marks, and forward passes could originate from anywhere behind the line of scrimmage (instead of five yards behind). The playoff game proved so popular that the league reorganized into two divisions for the 1933 season, with the winners advancing to a scheduled championship game.

More on the game here.  More on Portsmouth's NFL history here.

NASA Photo of the Day

December 18:

Hints of Higgs from the Large Hadron Collider
Credit & Copyright: Maximilien Brice, CERN Explanation: Why do objects have mass? To help find out, Europe's CERN has built the Large Hadron Collider (LHC), the most powerful particle accelerator yet created by humans. Since 2008, the LHC smashed protons into each other with unprecedented impact speeds. The LHC is exploring the leading explanation that mass arises from ordinary particles slogging through an otherwise invisible but pervasive field of virtual Higgs particles. Were high energy colliding particles to create real Higgs bosons, the Higgs mechanism for mass creation will be bolstered. Last week, two LHC groups reported on preliminary indications that the Higgs boson might exist around 120 GeV in mass. Data from the LHC collisions is also being scanned for micro black holes, magnetic monopoles, and explore the possibility that every type of fundamental particle we know about has a nearly invisible supersymmetric counterpart. You can help -- the LHC@Home project will allow anyone with a home computer to help LHC scientists search archived LHC data for these strange beasts. Pictured above, a person stands in front of the huge ATLAS detector, one of six detectors attached to the LHC.

More on the search for the Higgs Boson here.

Des Moines Register Endorses Romney

Today's endorsement:

Sobriety, wisdom and judgment.
Those are qualities Mitt Romney said he looks for in a leader. Those are qualities Romney himself has demonstrated in his career in business, public service and government. Those qualities help the former Massachusetts governor stand out as the most qualified Republican candidate competing in the Iowa caucuses.
Sobriety: While other candidates have pandered to extremes with attacks on the courts and sermons on Christian values, Romney has pointedly refrained from reckless rhetoric and moralizing. He may be accused of being too cautious, but choosing words carefully is a skill essential for anyone who could be sitting in the White House and reacting to world events.
Wisdom: Romney obviously is very smart. He graduated as valedictorian at Brigham Young University and finished in the top 5 percent in his MBA class at Harvard, where he also earned a law degree. Romney also exhibits the wisdom of a man who listened and learned from his father and his mother, from his church and from his own trials and errors in life. He does not lack self confidence, but he is not afraid to admit when he has been wrong.
Judgment: Romney disagrees with Democrats on most issues, but he offers smart and well-reasoned alternatives rather than simply proposing to swing a wrecking ball in Washington. He is a serious student of public policy who examines the data before making a decision. His detailed policy paper on the economy contains 87 pages of carefully crafted positions on taxes, energy, trade and regulatory policy, complete with 127 footnotes.

I doubt that carries much weight with today's Republican base.  The question for me is, will the endorsement weaken his support amongst the base.

Why Does Health Care Cost So Much?

Dayton Daily News:

Health care not only has surpassed manufacturing as a job provider but it also is changing the makeup of the state’s most dominant companies.

Five of the 12 largest employers in Ohio are now health care systems, including Dayton-based Premier Health Partners, which ranked 12th with more than 14,000 workers.

Part of this is because of mergers making the health care companies bigger, but part of it is in the inherent labor inefficiency of the hospital system and competing hospitals within the metropolitan areas.  Health care doesn't strike me as a place where competition improves efficiency.  Only so many people are sick at any one time, and they will only go to one hospital at a time. Yet all the hospital groups build new facilities to serve the profitable clients in the suburbs, creating additional overhead and overcapacity.

Humans Vs. the Earth

Scientific American features a slideshow of photographs capturing human impact on the environment.  Here is a photo of  Nickel tailings, waste from mining, found floating in a river in Sudbury, Ontario, Canada, from 1996:

Chart of the Day

Credit Writedowns (also via nc links):

Also, this:

The Federal Reserve issued a memo to farm bankers in late October warning that the market for cropland “may reflect overly optimistic long-term expectations” and that land values would fall if interest rates increase abruptly and farm profits shrink.

Watch out if commodity prices crater.

In-Field Portable Drones

Bloomberg Businessweek (h/t nc links):

Even as the U.S. military budget declines in the face of ballooning deficits and the wind-down of two wars, spending on unmanned systems has grown from near nothing two decades ago to a projected $6.2 billion in 2012. Not surprisingly, defense contractors have refocused their efforts. They’re preparing for warfare waged by unmanned vehicles—robots controlled by a combination of artificial intelligence and remote human input.
An unlikely industry leader of this explosion of flying robots, and maker of the Raven-B, is a small Los Angeles-area company called (AVAV)AeroVironment. It produces 85 percent of the unmanned aerial systems used by U.S. forces in Iraq and Afghanistan, according to the Defense Dept. Measured by number of units deployed, AeroVironment is America’s top maker of surveillance drones. The Army is also funding production of AeroVironment’s newest UAV, called Switchblade. Like the Raven-B and AeroVironment’s other systems, Switchblade, which is still in development, will fit in a soldier’s backpack. But rather than merely spy, this toy-size drone can kill: When its operator spots an enemy, Switchblade locks on, turns into a missile, and blows up the target. “I think Switchblade, like our other small UAVs, is going to plug a hole in [the military’s] arsenal,” says Tim Conver, chief executive of AeroVironment.
In the 12 months ended in April, AeroVironment had revenue of $292 million, and 85 percent of it came from UAV sales and services. Despite being dwarfed by (BA)Boeing or (LMT)Lockheed Martin, the company has become an important military supplier—although its executives prefer not to put it in those terms. “We think of ourselves as a technology solutions provider, not a defense contractor,” says Steve Gitlin, AeroVironment’s chief spokesman. Considering where the company came from, that reticence is understandable. AeroVironment got its start in the 1970s developing, of all things, earth-friendly pedal- and solar-powered aircraft. Its 40-year journey from free-spirited eco startup to maker of weaponized UAVs is one of the more radical transformations in corporate history.

AeroVironment was founded in 1971 by Paul MacCready, a legend in aerospace engineering and meteorology. MacCready, who died four years ago, was obsessed with unconventional planes that flew without conventional fuel. In 1977 he created the Gossamer Condor, a pedal-powered craft made of piano wire, Mylar, and old bike parts. An amateur cyclist piloted the contraption through a mile-long figure-8 course and won the $100,000 Kremer prize, awarded by the Royal Aeronautical Society for achievements in human-powered flight. (A 1978 documentary about the project, Flight of the Gossamer Condor, snagged an Oscar.) MacCready’s 1979 follow-up, the Gossamer Albatross, made it across the English Channel. Both planes hang in the Smithsonian.
While building MacCready’s human-powered aircraft on the side, AeroVironment’s engineers conducted wind-profile investigations that helped cities and states build the most efficient freeway systems and wind farms. In the ’80s, MacCready devoted himself to creating unmanned, sun-powered airplanes such as Solar Challenger, which weighed only 205 lb. and repeatedly set altitude and distance records. In 1986 he teamed up with Imax to build the first successful wing-flapping airplane—a contraption made to resemble a pterodactyl. “He certainly was a save-the-world type,” says his son, Tyler MacCready, who worked at AeroVironment and is now a consultant to the company, helping it identify new technologies to pursue. “His real concern was not wasting resources, especially with something like aerodynamic drag on a vehicle. All you needed to do was change the design of a car, and it could run on less power.”

Very interesting.

What Happened At MF Global?

Barry Ritholtz explains his understanding of the sequence of events at MF Global.  Here he is describing how it appears MF Global may have utilized weak UK regulations to circumvent U.S. regulations, and how MF Global's Canadian customers didn't lose their money because of tougher regulations:

We have two last international aspects of this debacle to mull over: Canada and Britain.
Clients of MF Global who lived in Canada lost no money in the collapse. Canada’s regulations do not allow client-segregated monies to be borrowed for speculative purposes. Further, voting and lobbying laws there do not tolerate the sort of corrupt legislative lobbying that is rampant in the United States. Hence, regulators in Canada are far more independent and less affected by lobbying than the regulators in the United States.
Across the pond in Britain, the rules were far looser regarding re-hypothecation than even here in the States. Christopher Elias reported in Thomson Reuters that the Brits allowed U.S. brokerage firms to circumvent U.S. rules. In Britain, there is no limit to the amount of leverage against borrowed collateral through re-hypothecation. Unlimited leverage? As Elias wrote, it was “as simple as having MF Global UK Limited, an English subsidiary, enter into a prime brokerage agreement with a customer, a U.S. based prime broker can immediately take advantage of the UK’s unrestricted re-hypothecation rules.”
Finally, one last disturbing bit: The shadow banking system — the alternative system existing outside of the regulatory rules — is highly dependent on derivatives and leverage. In particular, it is highly dependent on the sort of accounting and credit games like the re-hypothecation and off-balance sheet repos that led to MF Global’s demise. Its failure revealed an enormous degree of systemic risk that remains in the current banking system.
MF Global may have been the first firm that tapped into segregated client monies to speculate and lose it all. It won’t be the last.

Barry is a proponent of the rehypothecation explanation that using client accounts as collateral on proprietary trades is what MF Global did, and that it is legal under dramatically weakened CFTC regulations.  Others have said that instead, MF Global was a poorly run firm which resorted to fraud in a time of crisis, and that rehypothecation didn't have any impact on the customer accounts.  As a hick farmer in the Midwest, I think there are grains of truth in each position.  Clearly, MF Global was poorly run, as:

1) They failed, and failed spectacularly

2) They can't (or won't) explain what happened to assets in custodial accounts, which should be readily available for customers to withdraw at any time.

3) They don't have recordkeeping which shows where all these were located

As far as the rehypothecation argument goes, it seems to be all about what assets could legally be purchased using hypothecated custodial accounts as collateral.  This is more of a regulatory interpretation issue.  I would guess that if one were able to peer into the actions of the investment banks to see how they behave day-to-day, we could get an understanding of what the understood interpretation of these regulations are.  Unfortunately, if the CEOs of the investment banks were called before Congress to explain their activities related to rehypothecation, they would all claim that they never performed such transactions.  When it was discovered that indeed, their firms did act in just the same way as MF Global, the CEOs would claim ignorance.

I also get the feeling that MF Global is the AIG of this situation.  Yves Smith wrote a post on JP Morgan's push for unlimited rehypothecation, which is very informative.  I get the feeling that JP Morgan knew that MF Global was poorly run, and knew that they were making larger bets than they could support using collateral outside of the custodial accounts.  Therefore, JP Morgan felt they could make a killing by loaning to MF Global for them to continue to hold their bets on European debt, while securing the loans by taking the custodial accounts as collateral.  In this situation, MF Global played the role of AIG in 2008, while JP Morgan played the role of Goldman Sachs.  Instead of the U.S. government stepping in to pay off Goldman Sachs when AIG failed, JP Morgan just came in and cleaned out the custodial accounts, as they were apparently permitted to do under UK and U.S. regulations.  In other words, the smarter guys at JP Morgan took advantage of the more stubborn guys at MF Global. 

Unfortunately for all the financial players, the people who didn't know what was going on were the customers.  That is why nobody will come forward and explain what happened.  They fear a global run on investment banks, as customers didn't realize that if an investment bank failed, they could lose their custodial accounts.  I would speculate that all investment banks use custodial accounts as collateral on proprietary trades, just to a much lesser extent than did MF Global, and probably for only overnight repos funds.  That gives them some reasonable interest rates at low risk.  MF Global decided to step up the game, and JP Morgan went along for the ride, figuring that only the folks at MF Global would face legal issues when it didn't work out.  The coverup is to protect JP Morgan and the rest of the industry, not to protect MF Global.

Update: more here.