So what is the big deal about Tuesday? Nothing like having an expert in the household to handle just such questions. Of course, our conversations do get weird.

I ask, “So what is the big deal about Tuesday?”
And, Jim Smith, economic forecaster, blithely replies, “It’s the end of the quarter.”
“Uh, so what’s that got to do with anything?”
“The banks have to produce their quarter-end statements.”
“Oh.”

Now, I can sit here and pretend I know what THAT means, or I can continue my display of ignorance and confess. Oh, what the heck.

“Uh, so what does THAT mean?”
“Banks have capital to protect themselves against losses. When they settle their accounts at the end of a quarter, if they have losses, they use their capital to cover them. However, it’s perfectly possible that on Tuesday, at least some banks will have more losses than they have capital. If that happens, they are immediately bankrupt. And when banks go bankrupt, they immediately become wards of the state with the FDIC as their new foster parent.”

“Why do they have so many losses?”
“The current regulations are written to require banks to apply “mark-to-market” prices for their assets. Banks that own mortgage-backed securities (because they invest their customer’s deposits to make money themselves) are currently required to assume that those securities have no value (because no one knows how much they are worth, they are worth nothing because no one will buy them). Therefore the market price is zero and marking their assets at market value will produce a lot of zeroes in their accounts.”

“OK, but then how would the proposed bailout fix that? Just GIVE the banks more money?”
Well, no. Instead of letting the shaky banks fail outright, the government will either insure the shaky assets or buy just those assets at a significant discount from face value–but at least then they won’t be zeroes. This will prevent a wave of bank bankruptcies which would only scare everyone even more.”

“Ah, so Tuesday IS important. Got it!”

Hurricanes Gustav and Ike are making their presence known here in western North Carolina. The area is just about totally out of gasoline. Refineries take up to 10 days to get back on line if they shut down, and that’s once power is restored, which is taking a while. (Well, power was out for 3 million people so you figure that’s gonna take a while, right?) Then, once the Colonial gas line (who knows the name of the pipeline that supplies their area?) gets fuel, the stuff travels 2-5 mph from Houston up to Spartanburg, SC. And then, once the fuel gets to Spartanburg, all the national gasoline companies and the gas stations owned by them get first dibs. Western NC is loaded with independent owners. Often a good thing, this time, not so much. So, AB Tech (the local community college) is closed until the next announcement on Sunday, and I expect more “optional” things to be closing. So it goes like this: “Honey, wanna go to the Greek Festival this weekend?” “Uh, is that the way we want to use our fuel since there’s probably no hope of getting more for 5-10 days?”

What’s amazing is what people are doing as they panic (I can only assume that this is the reason for such crazy behavior). As we were getting low on supplies, people were refilling their tanks after just using a quarter tank, and they’ve also been filling gas cans–or worse, just cans. This, of course, just exacerbated the problem.

However, in the past two days, when only an occasional gas station will get a new supply in, people start lining up and stand in lines that are 1/2 mile long in each direction waiting for gas. (So how much gas does a car use while idling in a 3-hour line?) And since gas stations are not exactly designed to accommodate such traffic, and don’t have good flow lines what with people’s tanks on one side of their car or the other, there have been multiple calls to the police to break up fights. Ahem.

And, to make it all even more wondrous, in a bad sort of way, the exact same thing happened after Katrina and Rita (we weren’t living here then). So why don’t our local tanker truck owners know they should drive to Charleston, Philadelphia or wherever to a different terminal when New Orleans or Houston get closed down? I realize that people might not want to pay for $8 gas, but then again, they’d at least HAVE gas and they could decide whether it’s worth it to them or not.

Anyway, this is temporary and we are fine since we don’t have any work obligations that make us leave the house. But, if you have any spare gas, send it along!

How could nearly two months have gone by since the last post? What the heck have I been DOING??!?!?

Hmmm…..watering the yard? Yeah, definitely that. With the exception of a 4 or 5-inch rainfall from Tropical Storm Fay, we’ve had pretty much no rain this whole summer. So, transplanted plants and new ones have required serious watering. And even though it can obviously be automated with a sprinkler, still, four or five moves of a sprinkler, trying to avoid the 10-4 time period, with the water running for 2 or three hours at each location, takes a lot of time.

But obviously that doesn’t fill up ALL my time. We did manage a few trips for speeches. Suddenly Jim has become a boat industry expert and he’s given speeches to three boat manufacturers and one motor manufacturer in the past few months. And, to be fair, he’s still not a boat industry expert, though we had a lot of fun rides on new boats that were being shown to dealers. However, he is an expert on the economy, and one that gives a speech not just about the headline news, but he includes news that doesn’t get in the headlines and that is usually positive. So, after our boaters (or any audience lately) hear my fave economist, they know the current economy is still very wobbly, but they feel better about the whole thing because they not only have a better historic perspective, but they also know that not every economic indicator is going south.

When we’re home I work out nearly every morning, and if I get up late-ish, work out, cool down and take a shower, I discover that it’s time for lunch! Again, tempus fugit!

And then, I AM the managing director of my resident economist, so there are duties involved there. Sadly, typing is one duty (the guy hand writes all his papers, blogs, letters, etc.–the only thing he does on his own is email), but there are plenty of things going on with the website, speaker’s bureaus, travel arrangements, etc.

Did someone ask about the book? I’ve been attending to that project, too, and things have changed since I last reported. The website is still web.mac.com/lmtopp but now it introduces a book that is about the dating experiences of women and not just their first dates. I’ve made a few more contacts, conducted a few interviews, and expect to have a book proposal ready by Thanksgiving (October is a heavy travel month).

So, I hope (I’d promise here, but really, would you believe me anyway?) I get to this again in the next few days. I can at least report on my take on the election…..

My best to any and all who actually occasionally check this!