Why more credit???

Time for me to get shallow, and probably expose how little I know of how finance works and the current economic mess...
It seems that much of the problem came on from banks providing loans to people who really didn't have the means to cover the loan, so that those people could buy houses that they really couldn't afford. The banks did this to get some income - they get interest and hope that the loan doesn't default (which leaves the bank with a house that it has to sell for probably less than the loan amount - causing the bank to lose money). The bank then sells those loans as securities to other people, so that the bank gets in more money that it can loan out. The people buying the loans expect to get income from the interest on the loans, at least, and maybe can sell the securities for more than the loans are worth (which seems stupid to me...).
So, the bank makes a loan, then gives away the income from the loan when it sells the loan. To keep making money, the bank has to get more loans which it can then sell. Essentially, the bank only keeps making money as long as (a) people keep making new loans and (b) they can sell the loans to investors.
So, things have broken down because people started defaulting on loans, making it a risky investment and the banks can't sell the loans anymore. I think that there is a somewhat deeper problem in this - that the whole business model is built on the bank always being able to make and sell more loans. There is a natural limitation in this - eventually we run out of people to loan money to. Even if the bank picks ever riskier people, there are only so many people in the USA, and I don't know about you, but there is a limit to how many loans I need (let alone want) to carry - I only have the mortgage right now and am working hard to save money for the next car so that I don't carry a loan for that. Another 10 years and I won't even have the mortgage.
So, a whole business is collapsing (namely the home mortgage market) because it became a silly and unsustainable business model - namely to make sure that we keep making new loans into infinity. I'm a little surprised that nobody really thought through the long-term business model. Sure, this model looks OK in the short term, but once the pool of people needing money dries up, so does the business. Seems to me that, while we need the government to bail out the banking system and shore up the loan based securities (so that people are willing to buy them again, and restore money to the market) there is a shocking lack of prosecution of the people who thought that this was a valid business model in the first place... I want to see (a) an assurance that banks are going to drop the stupid investment model, and just try to live off the interest on their loans and (b) some of the CEOs of companies following this model will get time in the clink...
So - enough ranting. I don't promise this is accurate, its just what I can see on the surface, and what doesn't seem to be showing up in any of the analysis that I see...

The joys of business travel

This week I've been in Lisbon for a weeks worth of standards meetings with the MIPI alliance - a group establishing microprocessor interfaces (terribly geeky, nerdy stuff to most of you, I'm sure...). There are some good things and some annoying things about these trips (and this one in particular).

Good -

• I get to see some new cities that I otherwise probably wouldn't for quite a while. The meetings don't take all day, so I get to spend a little bit of time looking around and playing tourist, and sometimes finding places I'd like to come back to with my family. Look here for some pictures I took in Lisbon.
• I'm not paying for the trip
• I get to keep lots of airline miles for making the trip
• The work is generally interesting and exciting

Bad -

• I'm away from my family, and never sleep as well when I'm not with my dear wife...
• Most of the time is spent in meeting rooms - the inside of one conference room is pretty much like any other, so it isn't all that glamorous...
• Lisbon does dinner like Spain - really late. Of course the meeting schedule is pretty much like a normal business day everywhere else - no time for a siesta in the afternoon. So I'm up at 6:30 to get ready for the meetings at 8:30, but awake until midnight getting dinner. I don't do well on 6 hours of sleep...
• Europe especially has some jet-lag issues for me coming over, so I'm pretty much tired and messed up for most of the time that I'm here...
  

I have at least two more trips this year, but one will be within the US. Will I be interested in coming back to Lisbon? Probably not - the city, at least what I've seen, isn't all that interesting, and it doesn't feel particularly safe - more pickpocket problems than I've heard in other cities, and more of the businesses seem to be out to rip off the tourists.

If you're interested in seeing where I've been, I have an application on my Facebook page to show the cities I've been to, so become my friend and you can see the full list. I have been to a bunch of places...

You know somethings not right when...

The ice tray in the freezer, which was full of ice cubes yesterday, is now full of water. And there is warm air blowing out of the vents in the freezer. And the refrigerator is getting warmer, even though it is running constantly.... We've been having some trouble with the freezer going through complete defrost/freeze cycles in the last months, but never trouble in the fridge - until today... Holidays are great days for things to go wrong, when they can't be quickly fixed...

So, we have a big cooler full of ice, and the former contents of the fridge, sitting in the kitchen. What was in the freezer was sent to the big chest freezer a while ago, and all we'd been trying to keep was ice... Of course, this couldn't fail in the winter, when we just put everything into the big fridge that the garage becomes...

All should be well again in a few days, depending on how quickly a repairman comes out, figure out what is broken, and gets the parts. (We already had one visit, where he cleaned the coils and said to check if things started working once all was clean...)