Archive >  2008 >  April >  7 Previous / Next

Scripting News, the weblog started in 1997 that bootstrapped the blogging revolution.

Man I love that li'l old pig Permanent link to this item in the archive.

He sure knew what he was talking about!

A picture named sweetLittlePig.jpg

Hope he didn't get into too much trouble. ;->

Why the Bear Sterns bailout was a good thing for small investors Permanent link to this item in the archive.

First, a caveat, I am far from a financial expert, so I may have some of this wrong, if so, please set me straight.

The cable news shows didn't do a good job of covering the Fed's bailout of Bear Stearns, and as a result there's a misunderstanding about whether it's good or bad. It is, imho, an unqualified good thing because it saved us from a run on the banks, something we haven't seen since the Great Depression of the 1930s.

First to be clear, a run had already started. That's what was going on with Bear Stearns.

A run is a form of panic. You hear a rumor that your bank is in trouble, so you go down to the bank to withdraw all your savings. You tell a few of your friends, and they tell a few, and all of a sudden the bank's reserve is gone (banks don't keep all your money, they lend most of it out, that's how they make money). Meanwhile one of your neighbors who keeps her savings at a different bank gets the idea that her money might not be safe, so she goes to withdraw all her money, tells her friends and so on, and eventually their reserve is depleted and they have to refuse requests for withdrawals.

A bank run a viral thing, and once one gets going, there's no way to stop it. But the US govt did do something to prevent runs, with the FDIC, a government entity that insures deposits. This really did prevent runs, we haven't had one since.

Now here comes a new form of bank, offering better returns than the insured bank accounts, people feel safe putting their money there, but they are not insured. Like Bear Stearns, where a run started on March 11 of this year, putting the Fed in a difficult position, stop it, by backing the accounts, or let it run. Thankfully they did the right thing, and stopped it. Why? Because if they hadn't, every one with a savings account at any brokerage firm might have lost his or her savings! We came perilously close to a complete meltdown, and most people don't even know it.

I have a theory why they aren't explaining this on CNN, Fox and MSNBC -- and they may be doing the right thing -- that by explaining how close we came to an across-the-board run they might precipitate one. Now the government is acting, we hope quickly, to get FDIC-like insurance in place for brokerage accounts, and charging the companies appropriately for it, so they pay in advance (unlike Bear Stearns), so the general taxpayers of the US don't end up footing the bill, and hope that while this system is being put in place, everyone who has their savings in a brokerage feels comfortable leaving them there, at least for the time-being.

But note that Bear Stearns didn't get the bailout, the people with deposits there got it. True, the rest of the brokerage industry got a reprieve, but that didn't cost us anything, at least not yet.

PS: It's a Wonderful Life features a bank run.

Burnout in the blogosphere Permanent link to this item in the archive.

The NY Times had a story yesterday, much-written-about in the blogosphere, that said that bloggers were working themselved to death. This was one article about blogging I was glad to be left out of, even so, it could have been about me, a number of years ago, when my lifestyle almost did kill me.

In the process I learned a lot about heart disease. It seems the Times didn't take the time to check with a doctor to see if the premise of the article was reasonable or even possible. Could you work yourself into a heart attack? Perhaps. But not in a year or two, it takes decades for heart disease to become symptomatic. They did autopsies of soldiers killed in the Korean War and found that many of them already had heart disease, some of them in their teens and early twenties. They wouldn't have known until they were in their forties, fifties or sixties, maybe even later.

There were other reasons to hate the Times piece, but those were amply covered elsewhere.

Wish I had something to write about Permanent link to this item in the archive.

I had a really bad cold all last week and through the weekend, but it's better this morning, I believe the sickness is gone, but the symptoms linger. It would be great if I had fiery blog post in me -- some newly apparent truth to expose, an insight into an opportunity, but I don't have one. But I wanted to post anyway, to say hi, and hope all is well.

In any case...

I'll leave you with one good thought.

On the news this morning, a profile of the guy in the General Accounting Office who's in charge of the transition that will start later this year, as we swap the government we have for a new one. He's renting huge amounts of office space, buying computers, networking equipment, Blackberries, everything you need to instantly bootstrap a new government running in parallel with the old one. What an interesting job!

And it put me in a good mood that, even though the process drags on, eventually it will conclude, and by the end of this year (it's already April) we'll be starting the transition to a new government.

So I guess I had something to write about after all. ;->


Last update: Monday, April 07, 2008 at 9:08 PM Pacific.

I'm a California voter for Obama.

A picture named dave.jpgDave Winer, 52, pioneered the development of weblogs, syndication (RSS), podcasting, outlining, and web content management software; former contributing editor at Wired Magazine, research fellow at Harvard Law School, entrepreneur, and investor in web media companies. A native New Yorker, he received a Master's in Computer Science from the University of Wisconsin, a Bachelor's in Mathematics from Tulane University and currently lives in Berkeley, California.

"The protoblogger." - NY Times.

"The father of modern-day content distribution." - PC World.

One of BusinessWeek's 25 Most Influential People on the Web.

"Helped popularize blogging, podcasting and RSS." - Time.

"The father of blogging and RSS." - BBC.

"RSS was born in 1997 out of the confluence of Dave Winer's 'Really Simple Syndication' technology, used to push out blog updates, and Netscape's 'Rich Site Summary', which allowed users to create custom Netscape home pages with regularly updated data flows." - Tim O'Reilly.

Dave Winer Mailto icon

My most recent trivia on Twitter.

My Wish List

On This Day In: 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997.

April 2008
Mar   May

Lijit Search
Things to revisit:

1.Microsoft patent acid test.
2.What is a weblog?
3.Advertising R.I.P.
4.How to embrace & extend.
5.Bubble Burst 2.0.
6.This I Believe.
7.Most RSS readers are wrong.
8.Who is Phil Jones?
9.Send them away.
10.Negotiate with users.
11.Preserving ideas.
12.Empire of the Air.
13.NPR speech.
14.Russo & Hale.
15.Trouble at the Chronicle.
15.RSS 2.0.
16.Checkbox News.
17.Spreadsheet calls over the Internet.
18.Twitter as coral reef.
19.Mobs of the blogosphere.
20.Advice for Campaigns.
21.Social Cameras.
22.The Next Big Thing.
23.It's time to open up networking, again.
24.Am I competing?
25.Time to shake up conferences?
26.Bloggers working with journalists.

Teller: "To discover is not merely to encounter, but to comprehend and reveal, to apprehend something new and true and deliver it to the world."

Click here to see a list of recently updated OPML weblogs.

Click here to read blogs commenting on today's Scripting News.

Morning Coffee Notes, an occasional podcast by Scripting News Editor, Dave Winer.

KitchenCam 1.0

Click here to see an XML representation of the content of this weblog.

Click here to view the OPML version of Scripting News.

© Copyright 1997-2008 Dave Winer.

Previous / Next