Home Savings RIP

I grew up in Livermore California and at some point established a bank account with a local branch of Home Savings . If Wikipedia is to be believed Home Savings maintained conservative lending standards enabling it to survive the 80s savings and loan crisis. In 1998 Home Savings was taken over by Washington Mutual (WaMu). WaMu apparently thought that only lending money to people who could pay it back was limiting their growth. Their innovative new strategy of lending to anybody didn't work out too well long term and in September 2008 WaMu became the largest bank failure in US history. FDIC seized the bank and sold it to JP Morgan Chase .

Through all this I maintained an account. But as it happens I also have accounts with Chase. Chase recently finished integrating the WaMu operations with their own converting the WaMu accounts to Chase accounts in the process. I didn't need the extra account so when I was in my Chase branch Friday I had them close it thereby bringing my long term relationship with Home Savings to an inglorious conclusion. Hopefully Chase will have better survival instincts.

Standard Oil of Indiana

It sometimes seems like you can find anything you could possibly want to know on the internet. This is not the case as I discovered a few days ago when I tried to find the stock trading symbol for Standard Oil of Indiana. Perhaps this information is actually on the internet somewhere but I was unable to find it.

On a related note this site allows you to easily look up stock prices going back to January 1, 1970. But only if the company is still in existence. If you want historical prices for a company like Standard Oil of Indiana which first changed its name to Amoco and then was bought by British Petroleum you are apparently out of luck.

This sort of memory loss can cause something called survivorship bias . If you compute average returns over a period of time only for stocks (or mutual funds) still in existence at the end of the period you may obtain a misleadingly high result as you will omit the results for all the companies that disappeared (often wiping out their shareholders in the process) during the period.

A Failure of Capitalism

As I mentioned earlier I recently read Richard Posner's book, "A Failure of Capitalism", about the financial crisis. Richard Posner is a federal judge on the Seventh Circuit Court of Appeals. He is a famously prolific and often cited jurist. Still he has somehow found time to write many books of which this is the latest.

It would be nice to be able to recommend this book but I can not. One problem is the book is not very lively. Based on this book Posner seems to be a mediocre writer. Another problem is I don't think Posner is especially qualified to be writing about the financial crisis. Posner may be more knowledgeable about economics than the average federal judge but he isn't a professional economist. Finally I don't think Posner had much of interest to say. The book is 330 pages long and a few days after finishing it I don't remember much of it.

I mostly remember points of disagreement. Posner seems heavily invested in the idea that the bankers and banks involved were acting intelligently and rationally taking reasonable risks that unluckily led to collective disaster. This is somewhat defensible in the case of individuals but I don't think it is defensible for many of the institutions. Collectively they made some very dumb decisions. There was a complete collapse of underwriting standards for home mortgages leading to among other things widespread fraud. This was not a reasonable risk that unluckily went bad. I am not sure why this is important to Posner as it doesn't affect his conclusion that more regulation is needed. This is true whether banks are intelligently or stupidly taking the risks that are collectively unacceptable for society as a whole. Either way their freedom of action needs to be restricted.

There is an unattractive tendency among some economists, overly invested in the virtues of markets, to come up with elaborate rationalizations for why obvious market failings are really for the best. Perhaps Posner is similarly over invested in economic models based on rational actors. But if such models are useful it is because they are a reasonable approximation to reality not because humans individually and collectively really are invariably rational actors.

Posner thinks most of the mistakes leading to the crisis were excusable but that the failure of the government to have contingency plans was not. This doesn't make a lot of sense to me. As Posner correctly states we don't have a good idea of how to best recover from this sort of crisis. Which makes contingency planning for recovery of very limited usefulness. Better to worry about how to stay out of trouble in the first place.

I don't want to claim this book is completely worthless but I don't think the value to length ratio is very favorable. I expect there will be better books about the financial crisis.

Astorino beats Spano

In a bit of a surprise Astorino defeated Spano (a three term incumbent) for Westchester County Executive in Tuesday's elections . The margin of victory was substantial about 58-42 which is a reversal of the results with the same candidates four years ago. I guess people thought three terms were enough.

DiFiore won easily for district attorney aided by having two opponents.

Sunny Ridge Preserve

Sunday I went walking in Sunny Ridge Preserve . This area was opened last year after some delays. It lies between Route 134 and Hawke's Avenue/Spring Valley Road. There is a small parking lot on the west side of Route 134 just north of Grace Lane. The eastern part of the preserve is relatively flat with a couple of ponds to the south. In the western part the trails climb a ridge with views of the Hudson from the far side.

It was cloudy Sunday and the fall color is past peak. Still the soft pastel colors were very pretty in spots. My new digital camera seems to handle this sort of lighting better than my film cameras which liked bright sunshine.

Westchester elections

Westchester has elections for local offices Tuesday so I was getting robocalls Monday. I suppose I will vote although I have little knowledge of or interest in local politics. Which means for many of the races I will be choosing between a bunch of people I have never heard of.

For county executive I am voting for Astorino over Spano. Spano has been in office for 12 years already which I figure means this mess is his fault.

For county district attorney I am voting for the incumbent, DiFiore. She seems to be doing a better job than her predecessor, Pirro . DiFiore authorized the DNA test which freed Jeffrey Mark Deskovic , a weird local kid who was convicted of a murder he did not commit and spent 16 years in prison.

I was in the same room as DiFiore when she briefly came by to glad hand while I was serving on a grand jury earlier this year. I was a bit surprised by how old she looked in person although she is actually slightly younger than I am.

Double vision

Friday I received two copies of the same DVD from Netflix. Apparently this happens from time to time. Mistakes happen of course but it is interesting to speculate about what is causing this error. Is their software buggy or is there a design decision to accept an occasional duplicate mailing or is some hardware like a barcode reader malfunctioning or is it just the proverbial human error? However I don't really know enough about this sort of thing to figure out what is the likeliest explanation.