The XX Factor: What women really think.

Did Women Cause Edmund Andrews' Mortgage Mess?

New York Times reporter Edmund Andrews wrote a doozy of a story in a recent issue of the paper’s magazine, about how he went from a beaming homeowner and newlywed to an anxious debtor who owed hundreds of thousands of dollars on his mortgage. He described the trials and headaches of borrowing, and throughout the story, a basic disbelief that he, a reporter *who covers economics,* could have been caught up in the same overzealous swindling and poor decision-making that he wrote about for the Times.

His story may have been cause for a lot of rubbernecking and tsk-ing among readers, but Dana Goldstein and Megan McArdle have perhaps hit on... (To read the rest of this post, visit our new website at DoubleX.com!)

Those Wily Female Reporters

In his review of the new Warren Buffet biography, Michael Lewis has a great description of how writer Alice Schroeder won over the billionaire by turning his need to be mothered by lovely brainiacs against him... (To read the rest of this post, visit our new website DoubleX.com!)

Women and the Mancession

The Seppuku Solution

Senator Chuck Grassley, Republican from the great state of Iowa, ponders the AIG bonus scandal:

I would suggest the first thing that would make me feel a little bit better toward them if they'd follow the Japanese example and come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide.

And in the case of the Japanese, they usually commit suicide before they make any apology.

Grassley, of course, voted for bailouts that were structured in such a way as to allow taxpayer dollars to go to bonuses. But he’s not the only guy calling for ritual purification. “The American people,” as Grassley puts it, obviously want to focus their animus on something less nebulous than a broken feedback loop. Jim Cramer will do; anonymous cigar-smoking yacht club members who happen to work at AIG will do as well. Thus we get round-the-clock newspaper coverage of the unremarkable fact that a massive insurance corporation cannot simply rupture its contracts at will.

Grassley has a habit of saying appalling things, but he’s not stupid enough to believe that AIG’s boardroom fatcats are the only movers in this mess. A huge swath of Americans making large numbers of small decisions contributed to our current situation, so you have to wonder how far down the chain of moral culpability Grassley is willing to go. This collapse involved Wall Street bankers hawking mortgage-backed securities based on what they may or may not have known were lousy mortgages. It involved lowly local retail bankers knowingly making sketchy loans because they could just sell them on the secondary market to Fannie and Freddie. One step further down, it involved homeowners pretending they could afford the suburban McMansions of their dreams. I would venture to guess that it even involved some Iowans. But I don’t foresee Grassley calling for the blood of his own constituents. 

Catching a Greased AIG

The New York Times reports that the Obama administration is worried that fast-rising populist fury at financial sector piggishness (post-bailout bonuses for the very people who dealt in credit-default swaps!!) may threaten its recovery plan. But I wonder if, in fact, we have the ideal recessionary spectacle to watch: call it How To Catch a Greased AIG. Just hang in there, Geithner et al., and don't let the slippery swine go. After refusing all demands for transparency in its use of the huge fall rescue loan, invoking privacy concerns, AIG squealed today: Now—for whatever it's worth—we've got the names of the trading partners who got big chunks of the money. "These are extraordinary times," an AIG spokeswoman explained to the Washington Post.

I confess utter lack of expertise here, but is there a reason not to aim for yet more public squirming by AIG, now on the bonus issue? Citing "privacy obligations," AIG refuses to name the 400 employees covered by the roughly $165 million bonus plan it claims is contractually binding. If those recipients were to get outed, is there a chance that at least a few among them—those, say, in line for more than $3 million—might be too embarrassed to collect? These are, after all, extraordinary times.

Iceland's Big Freeze

Back in 2001, as the Internet boom turned into a bust, M.I.T.'s Quarterly Journal of Economics published an intriguing paper called "Boys Will Be Boys: Gender, Overconfidence, and Common Stock Investment." The authors, Brad Barber and Terrance Odean, gained access to the trading activity in over 35,000 households, and used it to compare the habits of men and women. What they found, in a nutshell, is that men not only trade more often than women but do so from a false faith in their own financial judgment. Single men traded less sensibly than married men, and married men traded less sensibly than single women: the less the female presence, the less rational the approach to trading in the markets.

One of the distinctive traits about Iceland's disaster, and Wall Street's, is how little women had to do with it. Women worked in the banks, but not in the risktaking jobs. As far as I can tell, during Iceland's boom, there was just one woman in a senior position inside an Icelandic bank. Her name is Kristin Petursdottir, and by 2005 she had risen to become deputy C.E.O. for [Icelandic bank] Kaupthing in London.... In 2006, she quit her job. "People said I was crazy," she says, but she wanted to create a financial-services business run entirely by women. To bring, as she puts it, "more feminine values to the world of finance."

Today her firm is, among other things, one of the very few profitable financial businesses left in Iceland. After the stock exchange collapsed, the money flooded in. A few days before we met, for instance, she heard banging on the front door early one morning and opened it to discover a little old man. "I'm so fed up with this whole system," he said. "I just want some women to take care of my money."

Little McMansion on the Prairie

I'm admittedly coming very late to the lengthy, sugar-daddy exchange, but maybe for that reason, after reading all the posts at once, I think it's worth acknowledging what a privileged, upper-middle-class discussion this is. After all, these days, most people scarcely dare dream of keeping their lousy, $7-an-hour job, much less of self-actualization. The desire for nannies, private schools (and for the record, my daughter, to date, has benefited from both, so I’m not casting stones)—such accoutrements are beyond the reach of 90 percent, maybe even 95 percent, of all Americans. And I wonder if this normalization of luxury desires, which Paul Krugman has lamented as one aspect of the new (now surely passed) "Gilded Age," isn’t part of what’s gone wrong in our country over the last 30 to 40 years.

When I was growing up in Dallas, even the wealthiest families in town often drove average, American-made cars. Yes, teenagers were as fashion-conscious as today, but keeping up with the Joneses didn't cost an arm or an iPod. (I still remember when you could buy clothes on layaway at Casual Corner.) Even affluent families often saved up for years for major home purchases, such as a new sofa or dining-room table. By contrast, as the real-estate bubble expanded, shelter magazines exhorted us to change our entire look—from, say, shabby chic to ultra-cool modern—every few years, at a cost of thousands of dollars. Furniture from Ikea is almost disposable. As a kid, I don’t recall a single family (including my own) that replaced its kitchen or bathroom counters. And there were plenty of fine home cooks who somehow managed without a Viking stove or All-Clad cookware.

Yet, in recent years, many average, middle-class families often seemed to want it all—and by “all” I don’t mean work-life balance—but the German (or at least Swedish) car, the multi-thousand-square-foot home, the remodeled kitchen or bath, the beautiful Eames furnishings, the designer shoes and handbags, every foodie kitchen appliance (whether anyone in the home actually cooked or not), in addition to the scheduled kids, the nanny and "best" schools. Even for those on a budget, high design has trickled down to the masses and can now be purchased at Target. Some of that, no doubt, is all for the good: I have no problem with everyone getting to enjoy a Michael Graves teapot.

But in my own life, I yearn to be satisfied with less and struggle with how to hold on to what really matters (which typically costs surprisingly little) in the distracting, expensive clutter of American life. Recently, I was reading the Little House books to my daughter, who is now 5, and kept having this pang for a one-room log cabin with a dirt floor swept clean by a straw broom, no more clothes or furnishings than one could carry in a covered wagon and instead of the usual Christmas bonanza of plastic toys, a tin cup, a piece of candy, and a shiny new penny. That’s a fantasy, too, of course—and equally out of reach. But nowadays when I dream, that’s what I often think of, not Sugar Pa.

Tim Geithner: Just Another Chauvinistic Wall Street S.O.B.?

Not to, like, stereotype of course!

The media is instructing feminists to direct our feminist outrage at Pennsylvania Governor Ed Rendell over a wholly innocuous especially for Rendell comment he made in support of a female potential cabinet member. Normally I would file this under the category of never-clicked headlines I call "Media Doesn't Matters" in reference to the lefty media watchdog organization that kept such tiresomely relentless tabs on Chris Matthews' venal sins of sexism during the Democratic primaries as to render the cable news blowhard a viable candidate for Senate in Rendell's state. But today I worry something more insidious is at work, because the Rendell gaffe successfully diverted attention away from a far more serious charge of chauvinism in government that could have potentially deleterious consqeuences for the economy: incoming Treasury Secretary Tim Geithner's attempts to oust FDIC chairman Sheila Bair, a Republican whose sterling reputation on both sides of the aisle conservatives feared she might be appointed to Geithner's job, thus fulfilling Obama's pledge to put Republicans in his cabinet with the most liberal GOP member not to have actively campaigned for Obama. Geithner reportedly accuses Bair of not being a "team player" -- which of course also begs the question as to what the hell team Geithner is playing for, as Barney Frank points out to Bloomberg:

“I think part of the problem now, to be honest, is Sheila Bair has annoyed the ‘old boys’ club,’” Frank said today. “To some extent, bank regulation and mortgage foreclosure have made a situation where we have several regulators up in the tree house with a ‘no girls allowed’ sign -- and it’s aimed at Sheila Bair - - who’s been really good.”

Sheila Bair was the American Prospect's pick for Treasury Secretary. Sheila Bair is Barney Frank's favorite regulator.  Sheila Bair even seems to command the respect of the generally reflexively pro-Wall Street commenter population over at the blog Dealbreaker. Because Sheila Bair has been working tirelessly for years to get failed mortgage lenders and homeowners to negotiate more workable terms to save the system from the massive financial and social costs of foreclosure contagions. Her results have been mixed, which is only about 1000% better than we can say for the results of Hank and "Government Sachs" to leverage the power of Big Numbers to save the financial system from the systemic risk of the panic wreaked by the sudden system-wide acknowledgement of the Big Numbers it had squandered in the systemic risk binge of the past five or seven or ten or so years.

Tim Geithner is notable for…looking young for 47, swearing a lot, and snowboarding. Early reports added "skateboarding" to the list of pastimes, but Fed spokesmen played them down, offering that he was not an active skateboarder.

 I wanted to like Geithner. Despite the extreme sports and Kissinger/Council of Foreign Relations/elitist plutocrat cred  he does not appear to totally fit the jet-setting obnoxiously well-roundedly overachieving handbag designer marrying Type Freaking A Clinton guy mold. Like Obama (and also me) he spent formative years in Asia, and the college sweetheart he married 23 years ago is not easily findable on society party pages or anywhere that might suggest that Geithner, like Bob Rubin and Rahm Emanuel, is at heart himself not much different from the financiers whose fortunes swelled so large over the country's three decade orgy of oversightlessness he helped accelarate during his years in the department. But this is just the sort of episode I feared when the market went so irrationally exuberant over (see #5) the appointment of another straight white guy from Wall Street to make right the multitrillion dollar disaster that is Wall Street. He's one of them. That doesn't make him bad. It just means he has been a party to a lot of incredibly bad decisions made using a lot of incredibly flawed assumptions that lined the pockets of a lot of already incredibly rich people. One of them is Hank Paulson, who at least seems somewhat humbled by the catastrophe. I guess Geithner has another few decades before he has to learn what humility is.