Tom Mangan’s home page

Times have gotten bad enough in the newspaper biz to force me to re-evaluate what I do with my non-newspaper time. I’ve had great fun combining hiking and blogging over the past three years … I even added some Google ads to my pages in hopes of picking up a few bucks. Well, the bucks are very, very few. It’s possible to make money blogging, but you’ll starve on daily hit counts in the hundreds. You don’t need millions, but you do need thousands, so you need a topic where thousands of eyeballs might reside.

Finding this audience vexed me to no end till last week, when just for the heck of it I decided to see if there’s a blog devoted to Caterpillar Inc., the tractor maker based in my hometown. Cat is a Dow 30 component with $46 billion in revenue and 100,000 employees worldwide. It’s the Microsoft of heavy equipment, so you’d think there’d be a blog or two covering the company. I looked: Nada.

Back when I lived in Peoria, the question “how’s Cat’s stock doing?” was pretty much on everybody’s mind. So this is my theory: Cat has 100k employees, all with an abiding interest in how the company’s doing. If I can get just a fifth of those people, I’ve got the 20k audience that’ll turn my $2 a day into $200 — a living wage even in the Bay Area.

I’ve started something at catstockblog.com. If nothing else, it’ll be interesting to the folks back home.

I’m running a contest over at my hiking blog.

I had another of those birthdays yesterday. My operative approach to getting old is simple and familiar: Every day above ground is a good one, or at least presumably better than the alternative.

The other day it occurred to me what an extraordinary time we’re living in. That was before Barack Obama very predictably was elected president (go back as far as you can count and you’ll find pretty much every time: the better candidate with the better campaign wins. My eyes misted up a bit at John McCain’s concession speech on election night — I figured after all he’s done for the country, he deserves better. But the whole point of an election is somebody wins and somebody loses. Good man, terrible campaign. Bob Dole had the same experience; here’s hoping the Senator from Arizona doesn’t start flogging Cialis Moments anytime soon.)

Heck, I’m getting fed up with Obamamania already and the guy isn’t even sworn in yet. It could be a long four or eight years for the news biz if Obama runs a tight-ship White House that’s anything like his gaffe-deficient campaign. We have whole departments devoted to presidential screw-ups; what if the prez doesn’t supply any? I don’t want to live in such a world (and I doubt I’ll have to).

But back to the extraordinary times. Forget about America finally getting around to electing a black (well, a half-white Harvard-educated millionaire) president. Had to happen sooner or later; Hollywood’s been preparing us for it for at least 15 years. The real deal, historywise, is the Stock Market Crash of ‘08. Guess what: we lived through it. I’m pretty sure no bankers jumped from high windows … I’d have given my eyeteeth to write this headline: Ledge-Leaper Survives by Landing on Taxpayer (mind you, I stole this gag from a cartoonist; and I don’t have any eyeteeth).

The thing about the Crash is: hard times prove what people are made of far more efficiently than times of plenty. In good times you go to work every day, do the same seven or eight things the same way you did them 14,736 times before, go home and watch the same number of hours of television and buy the same number of consumer goods. Years get wasted on repetition.

In hard times, you think about hanging around the office a bit more to keep yourself in good standing with the ol’ paymasters. If your business is getting beat up, you think less about the seven or eight old things that used to work and start thinking about the seven or eight new things that need to work. Tried-and-true is toast during tough times.

A lot of people I know lost their jobs before the crash. We’re hanging on for dear life at the paper, and every headline saying the auto industry is in a shambles or that retail sales are off by 20 percent is telling us: the money from whence our paychecks flow is getting scarce. We’re in the midst of a union contract negotiation that seems, well, counterintuitive: the whole point of a union is to pry more cash out of the greedy capitalist’s pocket. Suppose our company’s greedy capitalist owner is in hock up to his receding hairline and all the money in his pockets belongs to some bank back east, with interest? We never gave 13 seconds thought to how many Jaguars or corporate jets our owner might have to do without to keep us off the picket lines. But right now, his problems feel like our problems.

I can’t imagine things getting as bad as the Great Depression. I can imagine people getting a little more thoughtful about pinning their prosperity on borrowed money. I can see some good coming from Wall Street and the hedge fund crowd getting their come-uppance. The good times of the past 15 years had us doing everything under the sun with somebody else’s money. Now the whole country’s in hock up to its receding hairline when it needs to have something set aside to ride out the tough times.

Over the years the whole world developed an abiding interest in Americans going into debt to buy stuff they could do without in a pinch. Well, the pinch has arrived, and the world’s reacting like anybody would after a door slamming shut wakes them from a nice afternoon nap: panic first, watchfulness next, then the realization that the world has not come to an end.

It’s true that the Crash of 1929 led to the Great Depression, World War II, hydrogen bombs, the Cold War and Vietnam, all of which we’d leave off the Tourist Brochure of the 20th Century. But after all those calamities, people got a little smarter, a little more humane (nobody firebombs whole cities, leaving 100,000 dead anymore). Somehow, against all odds, the world emerges a teensy-tiny better place after these horrible episodes.

That’s the track record I’m banking on.

Right after I moved to California, I bought a sliver of the Vanguard Growth Index Fund for $33.66 a share and invested it for “the long haul” in a 401(k) rollover account. If stocks had returned their alleged 7 percent a year, shares of the fund should be trading for about $60 a share (compounded). Today, nine years and a couple weeks later, VIGRX closed at $23.20, well under half of what it “should” have earned and, most painfully for yours truly, 31 percent below what I paid for it.

I reshuffled after the tech stock crash and had a little bit of luck: after the worst week in Wall Street history, my fund balance in that 401(k) rollover is only down 19 percent — after nine years. In 2004 I launched a cautious, sensible plan to dollar-cost average that account back to health. The credit bubble that energized the most recent bull move got me back to even last fall; even after moving a third of my stake to cash last fall, I lost all the gains of four patient, sensible, diversified years in six weeks. I tried buying back into my stock funds when there was blood on the streets; in seven days the market dived another 20 percent (making half of it back on Monday, fortunately).

Of course it’s unfair to gripe about stocks’ returns after a panic sell-off of epic proportions. Everybody’s portfolio stinks at times like these; it’ll sweeten when the fear turns to greed, as it inevitably does.

What gripes me is that I never did anything greedy; I never bought individual stocks on margin, I never dived into options or futures or currencies, I stayed with sensible mutual funds from a sensible fund family. Buying and holding a single fund, as illustrated above, would have cost me a third of my stake; reshuffling cut my losses to a fifth.

I guess I should be grateful: I’ve lived through two market crashes in eight years and I’m still sitting on 80 cents on the dollar. Many have been wiped out.

Melissa and I call experiences like this “tuition”: the cost of learning how the world works. Over the years I’ve gotten richer in experience, but I’d like to be getting richer in the ol’ rollover account.

One thing I have figured out for absolute certain: The only way to make your account balance rise is to put more into it than you take out. Everything else is casino winnings.

The radio show “This American Life” profiles what’s happening on Wall Street with “Another Frightening Episode About the Economy.”

This is must listening for figuring out what’s behind the current stock market sell-off. It describes the workings of “credit default swaps,” which financiers used originally to insure their investments in corporate bonds and make sure they were covered in case the bonds ever defaulted.

Because corporations are highly motivated not to default on their bonds — their bond ratings determine whether they can borrow money to keep their doors open and the lights on — buying insurance against bond default seemed like taking out fire insurance on something that had no reasonable expectation of ever burning down. You know, risk-free.

It works like this: The bonds exist in a world of their own and anybody can buy CDS (credit default swap) as an insurance policy against these bonds never being repaid. In the regulated insurance business, the only person who can insure your house is you. Now imagine if it were possible for all your neighbors to buy fire insurance on your house as well: this is how the unregulated CDS market works.

Why on earth would your neighbors want to buy fire insurance on your house that allowed them to be paid the house’s value if it burned down? Well, say your next-door neighbor saw your toddler playing with fire in the backyard and all the sudden he knows there’s a firebug living on the premises and the fire risk is much higher than anybody else believes. He’d love to go to your insurance agent and say “I’ll pay you a thousand bucks right now if you write me a fire insurance policy so I get paid if the house burns down.”

Your insurance agent knows nothing about the firebug toddler and figures this is the easiest thousand bucks he’ll ever make. It’s so easy that he might sell the premium to somebody else down the line and pocket a commission, or just to make sure he doesn’t get burned, he buys an insurance policy from another agent agreeing to pay him if your house burns down.

This set-up would work fine — all your neighbors and their insurance agents could take out policies on the homes in your neighborhood based on their perceptions of how likely it is that your house will burn down. But imagine what happens if your home actually burns down: now all these insurance agents who’ve taken their easy thousand bucks owe all the neighbors the full value of your home. (Won’t your neighbors cash in big time? Not necessarily: they were buying and selling policies on other homes and now that a house has actually burned, nobody know what those investments are worth anymore).

Remember when Lehman Brothers, the giant investment bank, failed a few weeks back? Well, its bonds were insured by something like $400 billion worth of credit default swaps. When Lehman went bankrupt, its bonds went into default. And now, all the big banks on Wall Street and a bunch of big hedge funds are on the hook for most of that $400 billion, and that’s why they’re not lending to anybody: they’re hoarding cash because they own CDS contracts obliging them to pay anybody who bought insurance on Lehman bonds. An auction will be set up later this week to figure out who gets paid.

Later this month, another auction will settle CDS contracts on Washington Mutual’s defaulted bonds.

How did all these Wall Street wizards get themselves into this jam? Well, they wanted to hedge their risk: if they had one CDS contract requiring them to pay a million dollars if a bond defaulted, they made sure they had another CDS contract paying them the same amount if a default happened. All the Wall Street CDS players traded these CDS contracts back and forth and earned a profit or booked a loss depending on what the market thought the CDS contracts were worth.

Everybody partied like mad till the unthinkable happened: actual defaults on actual bonds. Then it was game over because all these CDS contracts were connected in a chain no stronger than its weakest link. A small number of defaults set off a chain reaction that is spreading havoc on Wall Street as people confront the obligations they’ve taken on in these CDS contracts. If you owe billions you don’t have — and can’t raise — you are insolvent.

It’s going to be a messy few months while all this gets sorted out. Hopefully there won’t be any more massive bank failures to pour gasoline on the blaze before the Fed throws enough money at the financial system to put the fire out.

We’re just about done with one of most hair-raising weeks in Wall Street history. Last night, Melissa and I joked darkly that if the House of Representatives fails to pass the credit-crisis rescue plan, something far, far worse than “black” Friday would emerge. More like: Void Friday, or Black Hole that Sucks Up Everything Friday. Fittingly, the Dow Jones Industrial Average nose-dived immediately after the Successful Vote to Prevent Financial Catastrophe.  Could be they suspect the cure will be worse than the disease — and they would know, because it’s their disease. 

The saying goes that the United States of America can be trusted to do the right thing only after all other options have been attempted. Given that the proposed bailout went from three pages and a $700 billion blank check to 400-plus pages of Congressional wish fulfillment, I’m guessing we’re still in “other options” territory. 

At a doctor’s appointment the other day, Melissa found herself explaining to the doc what the crisis is all about. The doctor said she talked to CEOs, economics professors and all sorts of educated types who were simply flummoxed on what the hell’s going on — this within a mile of Stanford University, Big Brain Central of the Bay Area. 

Melissa used to work in banking, where Doing Things Smart was carved into the industry’s granite columns and pounded into the heads of the little people who did all the grunt work. She has a hard time believing what happened, happened. People with no credit history granted mortgages on homes they could not afford. Financial wiz kids packaging these junk loans into A-graded “collateralized debt obligations” and selling them to greater fools the world over. Investment banks going under when their risky bets with borrowed money went south.

The keys to understanding what the hell’s going on are leverage and liquidity. I’ll start with leverage:

Everybody with a mortgage is already using leverage and not even realizing it: exploiting the advantages of investing with borrowed money. Say you want to buy a house that cost $200,000. Even if you had 200k lying around you wouldn’t want that much cash tied up in a single investment, so you’d take out a mortgage and put up only a small stake of your own cash: the down payment. If you put $20,000 down and sell the house later at a $20,000 profit, you’ve made a 100 percent profit on your 20k investment. If you put up your whole 200k and earn 20k, it’s only a 10 percent profit. You don’t need an MBA to see which is the smarter way to a) invest 20k and b) protect the other 180k from market risk.

Buying a 200k house on 20k is a 10-to-1 leverage ratio. Big-money investors have found that with clever computer models they can take on extravagant leverage ratios like 30-to-1 and enjoy extravagant profits by buying and selling intricate investment vehicles most commonly called derivatives. As long as they properly assessed the risks against their bets going south, they could rake in the cash. The great thing about massive leverage is how a small amount of your own money can reap a small fortune; the bad thing is that when you bet wrong, you lose money at a 30-to-1 clip and here’s the catch: even if you decide to sell to get out from under these bad bets, there are no buyers — this is where liquidity comes in.

Liquidity merely represents how easy it is to turn an asset into cash. You’ll never have any trouble cashing in your GE stock because millions of its shares trade every day. The big investment banks, meanwhile, had all these highly leveraged bets tied up in obscure financial assets with a very small pool of prospective buyers and sellers. When their bets on these assets started losing money, they couldn’t sell them even if they wanted to: there simply weren’t any buyers.

The federal rescue plan creates a buyer for these securities so financial firms can get them off their books. The securities — tied to home loans, bonds and other kinds of debt that have intrinsic value — can’t sell right now because the financial firms are in a panic spiral: they need free cash to stay alive, but selling off these assets at fire-sale prices obliges them to book huge losses that force them to put up even more cash.

The only way out of the panic spiral is to create a separate market for these securities. They’re worth plenty most of the time (bonds, loans and other stuff folks are highly motivated to pay off); right now everybody’s so focused on keeping the lights on that they can’t or won’t take on the risk. But there’s a decent chance that the feds can buy these securities cheap and sell at a tidy profit down the road.

So that’s a kinda/sorta explanation of what got us to this point. I’m hopeful because all previous predictions of the apocalypse have proved premature.

So, how good is your cat?

I suppose I could beat the cat at chess.

Newspaper copy editors need to be looking for another line of work. We don’t need worthless Knight Ridder stock certificates to figure this out; just the ability to answer this question: Will they hire somebody to replace us after we leave? If not, it means they can get by without us, and the best thing we can do for ourselves and our employers is get another job. It’s win-win: We save them the expense of our salaries and save our own financial hides by working for somebody who considers us essential.

So, who needs us? More people than you might think — the trick is having a willingness to specialize. If you like nice things like new cars and fine foods, start where the money is: Technical, medical and financial. You’ll see a lot of want ads in corporate communications or marketing — either one is a perfectly respectable way to make a living, but I suspect they’d be soul-killers for the average newspaper hack. There will be openings at universities, where the pay will be lousy, and perhaps government, where the benefits will be good but the fun quotient negligible. Don’t be lulled into online if there’s no path to profitability (exception for Bay Area folks and others who have access to venture capital-funded start-ups).

All that gets us back to following the money:

• Tech: Houses that cost $80,000 in most towns sell for $800,000 in Silicon Valley, a rough measure of the value of high-tech expertise. You won’t make 10 times more money as a technical editor, but if you can score one of these jobs it’s safe to say you’ll do better than you did at the newspaper.
• Medical: There will always be more demand for better health than modern medicine will be able to provide. Medical information providers need editors who can translate how a pancreas works into language the rest of us can understand.
• Financial: As long as there is greed, there will be work in the money industry. Newsletters and financial advisers often have a specialized (and lucrative) customer base, and your knowledge of news will be valuable.

So, where to look?

If there’s a Craigslist for your city, start at the “writing/editing” jobs link. (Here’s the one for the Bay Area). Competition will be stiff in big cities like New York and Chicago, but you might have a competitive edge in a smaller metros because there will be few qualified copy editors (except your co-workers); downside: there won’t be many opportunities. With Craigslist, you often send an e-mail directly to the hiring editor, which can give you a leg up. Impersonal forms at large corporate sites are worthless (as are, I suspect, most of the jobs).

What about JournalismJobs.com? It’s worth a look, but keep in mind everybody else in the industry is watching the same ads. The ACES job board occasionally has non-newspaper jobs and allows sending direct appeals to hiring editors.

One site I really like: Indeed.com, which aggregates openings across several major job boards and allows sorting by keyword and location so you can, say, search on all the “editor” ads in Des Moines.

Also, you can use RSS feeds to aggregate several job searches into an RSS feed reader, so you can always track a large number of openings specific to your needs without having to visit a large number of job boards.

The main thing is to keep trying, and keep trying some more. Mass-market publications like newspapers are simply going away because people don’t want them anymore. You can howl at the dark or move toward the light — the place where there’s still a market value for mastery of the English language.

Now start clicking.

Lots of cool, creative types gathered in San Mateo over the weekend for Maker Faire, a celebration of human adaptability.

My photos are here.

My take on global warming is intuitive rather than scientific, based on information readily available from my brain. It goes like this:

A) There is a fixed amount of carbon on the planet.

B) Burning stored, high-carbon materials releases carbon into the atmosphere.

C) Petroleum is basically the world’s carbon bank — compressed biomatter from jungles that existed on earth hundreds of millions of years ago.

D) In the past 100 years, a very large percentage of all the petroleum that our planet has ever produced has been burned, and ALL that carbon has been released into the atmosphere.

E) Release of that much carbon into the atmosphere has to be unprecedented in at least the last several million years.

F) It’s simply counterintuitive to believe that 100 years of heavy industrial production based on the burning of petroleum would not affect the behavior of the earth’s atmosphere.

G) The way things are going, we will easily burn up every last drop of oil on the planet in the next century or two. In the next century or three after that, historians will call us the most selfish, short-sighted humans in the planet’s history because we were borrowing all that oil from future generations — with no prospect, no plan, no earthly idea of paying it back.

H) We can adapt to life with different weather, but adapting to a world without petroleum will be the far greater challenge.

I) Given all these considerations, the mandate to save petroleum by not burning it all wastefully yields the same result: less carbon in the atmosphere and reduced global warming, and more petro-chemicals for future generations, giving us more time to develop more sustainable energy sources.

Conclusions:

• Billions of humans burning highly concentrated, carbon-based materials are bound to screw with the weather when all that carbon is released into the atmosphere.
• Petroleum is the most powerful, practical component of industrial society. It is, literally, the grease on the wheels. Without it, industry stops. We don’t want that.
• As a matter of moral principle, each of us should reduce our petroleum consumption to ensure there will be some oil left for our great-great-great-grandchildren and their great-great-great grandchildren.

Al Gore overstates the extent to which the Earth is in the Balance. If anything, Earth is looking forward to the day when we foolishly burn all the oil and resort to massive warfare and bioterror and whatever else it takes to cleanse our species from the planet’s surface. Earth gets back into balance when we’re not mucking up the place anymore.

We’re flying through resources under the mass delusion that we have a say in how things turn out, when the best we can hope for is learning to play by the planet’s rules. Cheaters get to sleep with the dinosaurs.

Doctor King mastered the art of using non-violence as a weapon to get what he wanted (and, more critically, what our country needed). A more conventional weapon killed him in Memphis 40 years ago today. It wasn’t the rifle, or the slug, or even the presumably racist motivation of the man who shot him dead on that motel walkway, that cost King’s life.

I think it was the truth — a truth self-evident and yet fundamentally counterintuitive to human nature. Which was: violence is unnecessary and even counterproductive. We’re so captive of our violent nature that the idea of being willfully non-violent — particularly for political means — doesn’t compute.

King wasn’t the first to come up with this idea: Gandhi used it to kick the British out of India; today Indian companies are buying up British carmakers. Gandhi was murdered, too, which might’ve been on King’s mind when he said he’d seen the promised land but didn’t think he’d make it there with his people.

The genius of King and Gandhi was to use non-violent civil disobedience to provoke the inner violence of so-called civilized people. It worked because it created a “shooting an unarmed man” image that exposed how unjust these supposedly just people could be.

I’ve often wondered if the Palestinians would’ve had better luck following King’s model. Can’t say because it’s never been tried (at least not explicitly), but it sure seems to me that every act of Palestinian violence against Israel convinces the Israelis they’re justified in continuing to make life miserable for the Palestinians. Strikes me that if the Palestinians tweaked the conscience of the Israeli nation without killing and maiming its children, they might have a shot at ending the oppression (though that would render the fire-eating fanatics who run things irrelevant, and who wants to be irrelevant?)

Imagine what would’ve happened to King’s followers in Alabama and Mississippi if they’d have fought back at the bigots with baseball bats and firebombs. The lynchings would probably still be going on to this day.

King’s truth exposed the lie that America was a free country in the middle of the 20th century, when skin tone determined which schools people could send their kids to, which fountains they could get a drink from.

The truth got King killed, but he breathed life into an ideal that made America a more truthful country. We all owe him a thank-you for that.

Life is what happened when the planet was busy making other plans. I’m not sure anybody knows exactly how or why non-living bits of matter became self-replicating bits of living organisms that eventually evolved into us. Whatever it was, we’re grateful.

One thing I’ve figured out since I started spending more time outdoors: we’re just one more species on a planet teeming with them. Earth has no regard for our minor hopes and petty ambitions. It’ll live on long after we’re gone.

A lot of humans fret over the damage we’re inflicting on the planet. I have a hard time getting totally worked up over our trivial contributions — it’s not like we can move continents, create mountain ranges, sprout volcanoes. The planet’s always tearing one part down and building another part up. Most of California was ocean bed a few million years ago. There were no activist organizations to protect aquatic species royally screwed by the collision of tectonic plates that created our lovely coastline and left dry land where the ocean used to be.

There’s only one problem with the “stop worrying, the planet’ll be fine” approach: Greedy short-sighted buck chasers use it as an excuse to do nothing about disappearing forests, rivers, lakes and living things that, frankly, the Earth can adapt to losing. Some kind of life will pretty much always live this planet.

The species that really needs clean water, abundant forests and thriving wild ecosystems is us. Wild places store our best hope for survival. Ruining them ruins us.

Blasting the tops off mountains to protect mining jobs or chopping down ancient redwoods to provide a few logging jobs might be good for one generation, but it’s stealing resources our grandkids and great-great grandkids and they’re great-great grandkids are going to need.

There’s no such thing as saving the environment. There’s only saving ourselves.

From this morning’s AP:

BAKERSFIELD - While authorities in two states searched for a young boy they thought had been abducted, 9-year-old Zane Newton was buried under an accidental collapse of dirt near his home. His body was found “completely covered” in dirt in a lot hours after the reported kidnapping, police said.

Newton’s playmate told police that the 9-year-old was abducted midmorning Wednesday as the two were playing outside. A masked man pulled up in a black car and opened fire on them, the boy said, adding Newton might have been wounded before the man took him.

In reality, police said, the boys were playing in a lot when Newton fell into a hole and was buried when it collapsed around him.

I guess it just made a better story.

The New York Times tries to explain the credit crisis, but can’t really, but can at least give an idea of what went wrong. This alludes to the post about leverage and hedge funds I mentioned the other day:

Investors then goosed their returns through leverage, the oldest strategy around. They made $100 million bets with only $1 million of their own money and $99 million in debt. If the value of the investment rose to just $101 million, the investors would double their money. Home buyers did the same thing, by putting little money down on new houses, notes Mark Zandi of Moody’s Economy.com. The Fed under Alan Greenspan helped make it all possible, sharply reducing interest rates, to prevent a double-dip recession after the technology bust of 2000, and then keeping them low for several years.

Joe Sixpack got into the act by borrowing more than he could afford against his house, figuring the price would go up forever. Bad idea:

The American home seemed like such a sure bet that a huge portion of the global financial system ended up owning a piece of it. Last summer, many policy makers were hoping that the crisis wouldn’t spread to traditional banks, like Citibank, because they had sold off the underlying mortgages to investors. But it turned out that many banks had also sold complex insurance policies on the mortgage debt. That left them on the hook when homeowners who had taken out a wishful-thinking mortgage could no longer get out of it by flipping their house for a profit.

Many of these bets were not huge, but were so highly leveraged that any losses became magnified. If that $100 million investment I described above were to lose just $1 million of its value, the investor who put up only $1 million would lose everything.

Hello, Bear Stearns. Well, goodbye. Read the whole thing to fill in more of the blanks.

Remember how Barack Obama said essentially from the get-go that he smoked pot as a teen-ager? Well, the new governor of New York is saying up front that he and his wife both had extra-marital affairs a few years back, but they sorted things out.

In a stunning revelation, both Paterson, 53, and his wife, Michelle, 46, acknowledged in a joint interview they each had intimate relationships with others during a rocky period in their marriage several years ago.

In the course of several interviews in the past few days, Paterson said he maintained a relationship for two or three years with “a woman other than my wife,” beginning in 1999.

The New York Daily News, recipient of this priceless scoop, thoughtfully placed the story above the one about the meltdown of one of Wall Street’s most important investment banks.  Priorities in order, I like that in a newspaper.

Paul Oberjuerge, formerly a sports columnist for a California newspaper, offers 10 suggestions for people who still have their jobs, assuming they want to keep them:

1. Embrace the web.  
2. Get a meat-and-potatoes job.  
3. Suck up.
4. Stop whining.
5. Produce.
6. Stop spending money.
7. Make sure your editor hired or promoted you.
8. Keep your head down.
9. Lose weight, tone up, get a haircut, consider cosmetic surgery.
10. Achieve excellence.

Click the link to check out his comments on each one. Pretty much spot-on.

The big investment bank folded over the weekend and got sold for pennies on the dollar. Basically, Bear was heavily involved in securities tied to the mortgage meltdown, and last week there was essentially a run on the bank. By Friday all of Wall Street was avoiding it like Superman avoids kryptonite.

To understand what killed the Bear, you have to understand — to the extent that this is possible for non-financial types — how hedge funds and derivatives speculators make money. The book about the failure of the hedge fund Long Term Capital Management explains that hedge funds make money by borrowing against securities with a leverage ratio far, far beyond anything the rest of us would ever dare to try.

To wit: if your house is worth 100,000 and you owe 100,000, that’s a 1-to-1 leverage ratio. But the assurance that you’ll pay it off — because you have a strong motivation not to default — means you could, in theory, borrow against the assurance of payback on the note, because that assurance is in essence a kind of collateral. You know, something with market value. Say you talked your bank into loaning you another $100,000, then you’d have a 2-to-1 leverage ratio.

Hedge fund managers, who have billions to play with and the best brains and computers in the business, can find ways to make money off that assurance of payback in ways that would make your head spin. A single security could have a 15-to-1 or even 30-to-1 leverage ratio. These seem like stupendously risky bets when a measly million dollars, say, has 15 million dollars borrowed against it. Thing is, in ordinary circumstances, there’s no realistic risk of having to pay back all these loans at the same time.

To visualize this, imagine the Flying Wallendas with their Human Pyramid: it had four guys on the base, two people in the middle and one on top. Now, imagine the pyramid upside down, with one very strong beefy guy on the bottom and everybody else balanced on his shoulders. Theoretically, such a balance is possible, but it’d probably take a computer and the world’s greatest acrobats to pull it off. A long as everybody keeps their balance, everything’s fine. But if anything highly unusual happens — like, perhaps, one of the biggest investment banks in the world collapsing — the pyramid falls and there’s blood under the Big Top.

Bear Stearns wasn’t a hedge fund, but it was in the hedge fund business, and it had billions in borrowings out there that it couldn’t pay off with cash on hand. Late last week, Wall Street turned on Bear with a vengeance, and everybody wanted what Bear owed them, and they wanted it now.

A bank or hedge fund can survive if it can get its hands on enough cash to survive till the panic subsides. That’s where the Fed came in, offering to stand behind $30 billion worth of Bear securities till Wall Street stops acting like cattle in full stampede mode.

Long-Term Capital Management was rescued by a deal in which the biggest investment Wall Street Banks chipped in a few billion apiece to provide a cash life line to the fund until the run on its securities ended. Bear Stearns refused to participate. Cosmic payback arrived over the weekend.

I can’t help wondering how many leveraged-to-the-hilt securities out there presume the continued existence of Bear Stearns, and what happens to them when it disappears. Then again, I’m not too sure I want to think about that.

Washington Post has the scoop:

In one of the most comprehensive explorations of cats’ origins to date, Lyons and her colleagues spent about five years collecting feline DNA, poking behind the whiskers of more than 1,100 Persians, Siamese, street cats and household tabbies around the world to swab inside their mouths. The genetic samples came from 22 breeds of fancy cats, mostly in the United States, along with an assortment of feral and pet cats in Korea, China, Kenya, Israel, Turkey, Vietnam, Singapore, Sri Lanka, Tunisia, Egypt, Italy, Finland, Germany, the United States and Brazil.

By analyzing 39 genetic signposts in the samples, the researchers were able to investigate a variety of questions, including which breeds are most closely related and where they most likely originated.

The first thing the group did was confirm a report published last June in the journal Science that the domestication of cats about 10,000 years ago appeared to have occurred in an area known as the Fertile Crescent, which stretches from Turkey to northern Africa and to modern-day Iraq and Iran.

Speaking of Iran, Persians don’t seem to be from Persia, the researchers found. So how come people and cats seem to get along so well (mostly)?

Cats probably started living close to humans when people evolved from nomadic herding to raising livestock and crops and started storing food, which attracted mice and other rodents. Cats found good hunting there, and humans surely appreciated the sly little predators’ help protecting their stocks.

“There was a mutual benefit,” Lyons said. “There was a food source of mice and rats all around the grain. So it was beneficial for both cats and humans as the cats came closer to human populations and kind of domesticated themselves.”

That is to say, the cats domesticated the people.

Remember how some folks thought we could use Iraqi oil profits to fund the war? Must’ve been a swell proposition because that’s how it’s being funded — by crooks funneling profits to the insurgents. From this morning’s New York Times:

The sea of oil under Iraq is supposed to rebuild the nation, then make it prosper. But at least one-third, and possibly much more, of the fuel from Iraq’s largest refinery here is diverted to the black market, according to American military officials. Tankers are hijacked, drivers are bribed, papers are forged and meters are manipulated — and some of the earnings go to insurgents who are still killing more than 100 Iraqis a week.

“It’s the money pit of the insurgency,” said Capt. Joe Da Silva, who commands several platoons stationed at the refinery.

You know how the saying goes, there’s no power on earth stronger than a bad idea whose time has come.

Last week a bunch more people left. A few went of their own volition, most were fired. Here’s a complete list. I still have a job, though there were many times when I longed for the nerve (and the financial resources) to walk away and leave the business of putting out a paper to more intrepid types.

While we were in the midst of stewing in our angst last week, a former Merc guy wrote the newspaper’s obituary on his blog. I still detect a pulse, but there’s no denying it’s getting fainter.

I recall thinking back in about 1996 that newspapers had about five years to get their act together before the Internet swallowed them whole. Well, our tail is sticking out of the whale’s mouth but most of our business is working its way through the leviathan’s digestive system. It doesn’t look good.

One forward-looking blogger has created a site called newspaperdeathwatch.com … mind you this guy doesn’t work in print anymore so he can marvel at watching the Titanic sink beneath the icy waves from his online lifeboat. One page at his site explains something that I knew 10 years ago: newspapers were charging higher and higher ad and subscription rates for smaller and smaller audiences, a business that was clearly unsustainable. What did they do about this? Invest billions in R&D to keep themselves relevant in the new age? If only.

What happened was newspapers kept expecting somebody to show them the way in the Internet era but failed to notice that Google and Yahoo were inventing Internet advertising. Now the technology belongs to somebody else.

All this has been hashed out in excruciating detail all over the Web, with new predictions of the newspaper industry’s demise showing up daily — tempered with forced optimism that something better is on the horizon. It’s like that “you’re going to a better place” business people feel compelled to tell the doomed on their deathbeds. The dying know it’s a lie, but it’s such bad form to correct somebody when they’re trying to cheer you up.

Here’s what I think will happen: everybody who bought newspapers in the last three or four years will go bankrupt because they bought the top of a market held aloft by the phony housing boom, and some clever operative like Warren Buffett will come in and buy them up at pennies on the dollar.

Most of us will be forced to get real jobs, like school teachers or dogcatchers.

I have this half-baked notion that I can ride this out from the inside and see how it all shakes out. People still want local news, I figure, and people still want to buy ads to promote their local businesses. Newspapers didn’t have to adapt all those years when they had markets to themselves. Now they have no choice. With our industry’s survival on the line, we’re apt to get more creative, or die trying.

There are plenty of jobs out there for writers and editors. I keep meaning to apply for them. It’s possible these days to create a blog that draws enough traffic to earn a living. I keep fixing to get ready to create one.

Back when I had my first paper route in 1974 — a job I despised, mind you — one of the first things I noticed was how the ink rubs off and blackens your hands when you deliver a hundred of the damned things in an afternoon. The ink on the outside washes off, but the ink that gets under your skin when you build a paper from scratch every day for two decades never goes away.

One thing in my favor: I’ve been a Web junkie from day one, and news and the Web go together. Maybe the newspaper I build in the future won’t be on paper at all. That can’t be a bad thing, really. Think of all the trees it would save.