Notes from the 25th Breeders' Cup at Santa Anita

9:15 A.M.: Feeling a little groggy as I pull back the blanket....make that sleeping bag.....from the inflatable mattress that is my nightly resting place at the Palacio de Burns.

Dan and I were going to take it easy last night and rest up for Santa Anita today. Instead we drank wine all night with two 40 year-olds that we met at a sushi bar in Manhattan Beach, one of which used to be on Days of Our Lives and dated Weird Al.

Sounds about right.

9:25 A.M.: Just stepped outside. 75 degrees. Not a cloud in the sky. This day is approximately infinity^2 nicer than last year’s Breeders' Cup, which was run in a monsoon at Monmouth Park in New Jersey.

Hopefully, the night & day comparison to last year will serve as a reminder that holding any meaningful sporting event in New Jersey is about as smart as betting on Lindsay Lohan's sobriety.

10:05 A.M.: I have a Jamba Juice in one hand, a Peet’s coffee in the other, and an 8-gallon jug of water at my feet.....and we’re off to Santa Anita (me, Dan, and his buddy Taka). It’s looking like a food optional morning as we’re determined to find the tangent line to the pari-mutuel window.

Buckle in.

10:40 A.M.: Unfortunately, we’re going to miss the first two Breeder’s Cup races due to the early start time and the time required to trek out to Santa Anita (first post was at 10:10 AM). I'd better call Pops, who is at the OTB back home, and have him make a bet or two for me. I’ve got a long-shot I like in the 2nd race.

10:55 A.M.: Still in the car, but my phone is ringing and it’s dad (a call immediately following a race is always a good sign). YEESSSSSSSSS is the answer. My horse, Desert Code, won the Turf Sprint at 36-1. Had him to win and show. The ideal start to a day with a ton of betting potential.

Anecdotally, my internal voice is thinking: “carrrrrne asada.”

11:10 A.M.: We’re walking through the parking lot at Santa Anita and immediately to our right is the ESPN/ABC TV crew of Randy Moss and Gary Stevens who have set up shop in the first turn. And oddly, there’s no barrier -- or security -- in between us and them. I could easily walk onto their makeshift set and live-air. Potentially worth it to say "muchas gracias" to the connections of Desert Code for getting my day off to a kick-ass start, but I abstain so that we’re actually allowed onto the grounds.

Next time.

11:30 A.M.: Santa Anita is a sparkling back drop for the proceedings. Not a cloud in the sky, mountains in the background, gorgeous women everywhere, and a Dos Equis stand quickly approaching (where the beer flows like wine).

Q: Why do I live in Chicago? A: I'm a moron.

11:55 A.M.: The first race we actually see is the dirt mile. I make $25 worth of wagers. I lose $25. You know what that means: it’s time for a cold one, preferably a Bud Heavy.

12:30 P.M.: Two important developments. First, the European sensation, Goldikova, just made a redonkulous acceleration, busting threw a tiny hole, and then going on to steamroll the field in the Turf Mile -- producing our first winning wager on site. One of the most impressive moves I’ve ever seen.

Second, I have found my teller for the day: a smoking brunette with a mile-wide smile. Admittedly, she’s not working at the most desirable window at the track – hers is down below the grandstand - but a geographic inconvenience is not about to prevent me from making every single wager with her from this point forward.

1:40 P.M.: The two Juvenile races have passed uneventfully. I had nada in the race on dirt. Won a little on Westphalia, who came in second, in the Juvenile Turf.

Of more relevance, I would swear I’m getting some vibe from my teller. My ad hoc flirtations, in between my $1 trifecta wheels, have garnered multiple smiles. Be on the lookout for a phone booth: I might need a red cape before this day is over.

1:45 P.M.: Having a classic flashback to last night. Dan and I were sitting at the sushi bar when I overheard the guy next to me say to his date (in a sincere tone), “we’ve all dated models; we’ve all moved on.” An unforgettable moment which produced three immediate follow-on thoughts: 1) that happens only in L.A. and 2) that guy’s picture needs to be inserted in the dictionary next to the word “impossible” and 3) I’m definitely using that line again, if only to elicit a knee-jerk reaction from someone & retell the story.

1:55 P.M.: Our posse is expanding. Two of my boys just got to the track: Sando and Derek. And two of Dan’s friends, Katie and Soley, have arrived as well. This correlates to more money for group bets and more beeeeers all around.

Only upside here.

2:20 P.M.: I just gave Dan permission to pour a beer over my head if I don’t ask the brunette teller for her number by day’s end; he’s even sensing the reciprocal vibe.

Frankly, I’ve got no qualms with the beer-over-head scenario: things are going too well with her not to give it a go. Either that or my day-long bit of strategery -- dousing beers sans food -- is starting to make me hallucinate.

Either way, positive thoughts abound.

2:30 P.M.: Check out the move that Midnight Lute made last year to win the Sprint. Now watch him do it again this year. This is definitely one of the best sprinters of all time. A big-time privilege to see this colt run.

2:35 P.M.: Picking up a girl who is working at the track is a borderline impossible feat. That being said, things could not be going any better with my teller. I’m getting numerous smiles even when I’m not at the betting window (i.e. when I’m hanging out in the stalker’s zone, studying the form).

Correlated thought: how do you say “ludicrous speed” in Spanish?

2:45 P.M.: Only two races left. Time to get serious. Luckily, they both have tremendous betting potential. I like Winchester in the Turf, who at 15-1 is going to be the key player in our trifecta wheels. Love the fact that Winchester’s owners are throwing him in the deep end of the pool for $3M with older horses (Winchester is a three year-old); that shows some serious cojones.

Plus, I saw Winchester romp the field in the Secretariat at Arlington; he might just be good enough to pull this off. Besides, I told Dan I was going to put us in a position to win thousands of dollars today; Winchester gives us that chance.

I will play $6 across the board on Conduit as well, just in case Winchester doesn’t fire. A much shorter price, but a worthwhile hedge as I think Conduit will be in the money.

2:55 P.M.: Winchester didn’t have it today, but Conduit rolled right by ‘em in the stretch, so we actually made a little dough on the race. We have approx. $85 to play with for the Classic.

On a side note, my buzz is reaching the fantastical zone.

3:15 P.M.: A woman from ABC’s The Bachelorette just walked up and give me her card, hoping I would consider coming on the show. I thanked her for the compliment but told her I’m not made out for reality TV, unless it’s on the yet-to-be-created: “Who Wants to be a Horse Racing Handicapper?”

Nonetheless, at this point my confidence is approaching stratospheric heights, and my new Ryder Cup golf shirt, which I’m wearing at the track, might have to be retired after today and placed in the vault: “moniest one-day shirt ever.”

3:30 P.M.: Regardless of the outcome in the Classic I need to send Jess Jackson, Curlin’s majority owner, a Christmas Card. Jackson, who is Jackson of Kendall-Jackson Wines, could have retired Curlin at the end of ‘07. Most owners would have done that very thing. Instead, for love of the sport, he brought him back to run again this year – a decision which would have cost him upwards of $35M (at stud) if something had happened to his superstar.

But Curlin came through ’08 injury free, and this year horse racing fans have watched in admiration as Curlin annihilated fields at Belmont, Saratoga, Churchill Downs, and in Dubai. Curlin is now North America’s all-time leader in money earnings, and we are about to watch his final race.

Thank you Jess Jackson. Our sport needs more of you.

3:35 P.M.: I consulted with the crew. No more shenanighans, no more ballyhoo – it’s all or nothing. Our remaining $85 is taking aim at a big payout.

Here’s our strategery: we’re going to play Raven’s Pass, Henrythenavigator, and Curlin on top in a trifecta, with those same three horses and Tiago to be second and third ($54). I’m also going to play $10 across the board on Raven’s Pass, who at 15-1 is absurdly underbet in my opinion. ESPECIALLY when considering the way the Euros have faired thus far on the Pro-Ride (artificial) surface at Santa Anita.

Cross your fingers.

3:44 P.M.: The horses are approaching the gate and it occurs to be me that I have exactly zero wagers with Tiago to win. Not ideal, but what are you gonna do.

3:46 P.M.: It’s 88 degrees at post-time and 53,000 fans have come to their feet to watch twelve of the best horses in the world take aim at the Breeder’s Cup Classic. It is an awesome sight. Ultra glad to be here, taking it in with my boys.

3:49 P.M.: What a race. One of the most exciting I've ever seen in person. Curlin made a HUGE move on the turn, but the Euros ran him down in the stretch. More specifically, OUR Euros ran him down, with Raven’s Pass winning and Henrythenavigator coming in second. There’s a photo for show between Curlin and Tiago, which means...HOLY SHITBALLS....we have the trifecta, REGARDLESS of who is 3rd.

3:50 P.M.: I tell the boys we have the trifecta. They are rejoicing but have no idea what we’ve just done. I turn to Dan and say as wryly as possible: “this is gonna pay a lot.”

3:52 P.M.: Tiago is 3rd. Which means -- stealing a line from my dad -- this payout is not only big, it's “gonna be a whopper.”

3:54 P.M.: The $1 trifecta pays $2400, and we have a $3 tri: $7200!!!!! Plus, we have Raven’s Pass across the board, which will pay another $400 or so.

We going to Sizzler....we going to Sizzler.

3:56 P.M.: E-U-P-H-O-R-I-A.

3:58 P.M.: More beeeeeeeeers over here.

4:02 P.M.: Euphoria has subsided. We've moved onto: J-U-B-I-L-A-T-I-O-N.

4:04 P.M.: It has been said before. I'll say it again: this is the Sport of Kings.

4:10 P.M.: The day's only downside, our payout is so large I have to report to the IRS window. If I want to cash-in the trifecta today, they are going to take 30% out in taxes (from the $7200, not the $400 on Raven’s Pass). Handing out thousand dollar allotments to my boys is a must (we are splitting the winnings 5 ways), so I take the hit from Uncle Sam, and leave the window with 55 crisp hundred dollar bills.

4:12 P.M.: Not only do I leave the window with a wad o’ dough, but my teller has just given me her number on my IRS form. And incredibly, hers is an 812 area code: THE SAME AS THE KNOBS.

Turns out, she’s originally from Evansville and just out here working for the weekend. Unfathomable.

4:20 P.M.: Derek brought a 40-inch lens to the proceedings, and he’s now taking pics of Arrrrrnold, the Guvinator, who is congratulating the connections of Raven’s Pass and encouraging attendees to come back next year, when the BC returns to Santa Anita (i.e. throwing salt in the wounds of Churchill Downs which couldn’t agree to terms with the Breeder’s Cup for ’09). Somehow, we’re only 30 or 40 feet from the podium.

This is an all-around epic day.

4:25 P.M.: We gather for a group shot by SeaBiscuit (atop). Defying gravity seems well within our reach at this point.

4:30 P.M.: We exit the gates of Santa Anita on a man-made high that comes from joint jubilation. The kind that can only be experienced when shared.

4:35 P.M.: Final thought for the day as we pile into the Acura and lay claim to the Roman Empire:

“Roads? Where we’re going we don’t need roads.”

The Monthly Stew: Bear Market Edition

20) Main Street vs. Wall Street
If I hear one more TV commentator or politician reference how the current financial crisis is now affecting Main Street, I'm gonna lose it. Anytime the stock market loses 40% of its value, it affects everyone. And Average Joe always stands to lose the most.

I'm waiting for the never-to-arrive day when a politician stands out in front of their own home modeling a foreclosure sign. I’d pay big bucks to see a politician host a press conference detailing the plight on Their Street. Big bucks.

19 The World Financial Summit
These are rough times. But never – and I’m talking never ever -- has there been a comparable coordinated effort across nation states to mend the world's systematic ills. And on November 15th the G20 (the world’s most industrious 20 countries) will meet in Washington to pump up the volume of unison some more.

If you ask me, interdependence – the old “one for all” adage – is a darn good thing when you’re sitting in a row boat with a sizable leak. If the world is flat, and we’re going to sink or swim together, doesn’t that have to be a good thing?

18) The Financial Services Modernization Act of 1999
In 1933 Senator Carter Glass and Rep. Henry Steagall worked with President Roosevelt and got Congress to pass the Glass-Steagall Act, which separated investment institutions from commercial (savings and loan, mortgage) banks. But in 1999 Citibank spent over $150M lobbying Congress to repeal the law so that they might be allowed to merge with Traveler’s Insurance.

Citi’s efforts were successful and in 1999 Congress created the Modernization Act, paving the way for investment and commercial bank mergers, which ultimately lead to the new institutions pushing subprime mortgages and other insurance and derivatives products, like credit default swaps, because these high-yielding instruments became "investments" instead of old-fashioned, financial or mortgage products.

17) Paulson’s Testimony to the Senate Banking Committee in 2000
On the heels of the Financial Services Modernization Act, Hank Paulson, who in 2000 was the CEO of investment bank Goldman Sachs, lobbied Congress to allow investment houses to increase their leverage using risk-based models, instead of cash-on-hand.

[W]e and other global firms have, for many years, urged the SEC to reform its net capital rule to allow for more efficient use of capital. This is the single most important factor in driving significant parts of our business offshore, so that our firms can remain competitive with our foreign competitors risk-based capital standards must become the norm. The SEC has made it clear that risk-based capital rules can be implemented only when the Commission is confident that firms employing value-at-risk models have robust credit and risk management policies in place.

In 2004 the government changed the risk-based capital rule, allowing investment firms like Goldman to decrease their required cash-on-hand to pay for debts and exposures. A decision which is unanimously considered to have aided the current meltdown.

16) Government Sachs
Paulson’s testimony before Congress didn’t hurt his professional career. In 2006, Paulson succeeded Paul Snow as U.S. Treasury Secretary. A position which, allowed him to bring in numerous Goldman all-stars to the Treasury department, thus earning the Treasury department the nickname: Government Sachs.

15) 35 year-old Neel Kashkari
Speaking of Paulson’s posse, don’t forget this name. Kashkari is Paulson’s protégé, and the man who has been tapped to lead the distribution of the $700 billion authorized by Congress.

Not an insubstantial piggy bank for a 35 year-old to play with.

14) 8.625 Cents on the dollar
That’s how much bonds issued by the now-bankrupt Lehman Brother were worth in last Friday’s auction. That’s right: one of the most established investment banks in the world had outstanding debt obligations more than ten times greater than assets. As to how that could happen, see #17 & 18.

13) Volatility
500 point intra-day point swings have been the norm recently on Wall St. In fact, the Chicago Board Option Exchange Volatility Index (.VIX) measured the last two weeks as the most volatile two-week period in history. Granted, that doesn’t mean a whole hell of a lot if you’re investing for the long haul, but it equates to a near term gold rush for traders.

In other words, if you know someone who trades options or futures on the floor of an exchange, mandate that they host Christmas this year. And tell them that you are expecting an oversized turducken. It’s the least they can do.

12) Dividends
Dividends are currently to stock owners as Santa Claus is to children: not to be discounted or messed with under any circumstance. And in my opinion, rightly so.

The Dow is now flat over the last decade, but that doesn’t mean you didn’t make money on stocks, even if your portfolio performed alongside the Dow. Lots of (relatively) conservative stocks pay dividends of 3 – 5% annually, which if reinvested on a quarterly basis or annual basis, is just like earning compounded interest, regardless of the performance of the stock itself.

Duke Energy and Baxter Healthcare are two company’s which pay a dividend and should be well positioned to weather a recession. Baxter happens to be sitting on $28B in cash, never a bad thing when the economy is in flux.

11) “Buy American. I am”
The man who wisely warned that derivative-based financial products were potential “weapons of mass destruction”....the same man who cautioned, “beware of geeks bearing formulas".....the Oracle of Omaha, Warren Buffet, is now advising investors to do something counterintuitive: buy American stocks.

Buffet's recent OpEd detailing his bullish perspective is here.

10) The Grape of the Month: Vodka
In times like this, an adult beverage with a measly 12 or 13% alcohol content (a typical percentage for wine) doesn't cut it. When you’re watching Wall St. crumble and the Dow sell off 1000 points in a day, something stronger is required. I prefer vodka.

Svedka, Skyy, Ketel One, and P.I.N.K. (the most awfulest naming decision in the history of spirits) all make my list of winners.

9) Domestic Auto Sales Reach 25-Year Low
How bad is the climate for auto-makers? New sales in September were a mere 9.3 million, the lowest level in twenty-five years. Related note of buggery: the number of drivers has not decreased over that interval.

Worse, the most recent Consumer Confidence Report notes that only 1.5% of Americans plan to buy a new car in the next six months – an all-time low for the survey.

Times are tough in Michigan. Muy mal indeed.

8) Kerkorian sells 7.3 million shares of Ford
Billionaire investor “Captain” Kirk Kerkorian, who amassed a 6% ownership stake in Ford, partly with hopes of facilitating a merger with Nissan, sold over seven million shares of Ford last week at a loss (on paper) of over $700M. The fact that he sold those shares with Ford trading at an ungenerous $2 per share is indicative of something.

Muy mal comes to mind again.

7) WWHD?
In the first two decades of the 20th century entrepreneurs, especially in the automotive industry, often mused: what would Henry (Ford) do? A century later, the combined market cap of Ford & GM is estimated to be 1/10 of Toyota, and bankruptcy talks are beginning to swirl for the automotive giant.

If I were a manager at Ford, I'd wonder WWHD. And then I'd pray.

6) Where is da paper?
This is arguably the tightest commercial lending market since the 1930s. Banks are not lending amongst each other, and they are certainly not lending to consumers.

A likely next step for the Fed? To guarantee intra-bank lending amongst commercial banks (in the case of default) with hopes of opening up the credit markets. A crucial step towards recovery.

5) The Bear Market Quote of the Month
Senator Jon Tester of Montana: “I am dirt farmer. Why do we have one week to determine that $700 billion has to be appropriated of this country’s financial system goes down the pipe.”

4) The Next Treasury Secretary of the United States...
Forget the VP candidates. Is anyone else more than a little curious as to who will replace Paulson? And wouldn’t you feel a little better if the candidates were throwing out names?

Doing so would allow economists and former Secretary’s to scrutinize the prospects, and it would also force the would-be heirs to detail some of their plans in advance of being selected. Truly, I see no downside here.

Instead, we will wait in suspense for an appointee post-election. Unfortunate, all the way around.

3) “Fear Castrates Soft Commodity Market”
How about the recent nose-dive in the price of oil?!?!? Prices per barrel were in the $140 range this summer, but as demand decreases and fears of a slowing global economy are factored in, the price of crude has fallen precipitously, as have the stock prices of most producers and suppliers.

Paying $3 for a gallon of gas as opposed to $4 can do a lot for the psyche. Even if your next move is looking at your $401K balance and deciding once and for all, that it’s time to sell the car.

2) Regional Banks
This is the subset of the economy that interests me the most. Most regional banks are/were sizable players in the mortgage business but not involved with risky derivatives like credit default swaps. Inasmuch, some regional banks have strong balance sheets, while others are in terrible shape.

My question: over the next decade, will we become a nation of giant banks, whose hands will be locked with the goverment? Or will regional banks see a resurgence due to their knowledge of local markets and brand loyalty with customers?

Regardless, I think more regional banks stand to be acquired -- some of which will offer a handsome return to shareholders in relation to their current stock price.

1) Watch the Dollar
When economic times are tough, international corporations and foreign governments seek haven in the U.S. dollar. And guess what, as bad as things are domestically, they're doing it again: the dollar is strengthening, particularly in relation to the Euro.

If the day ever comes when that reality changes, and the Nikkei or the Yen (for example) become the most trusted currency in the world, that will be a very telling day indeed.

Gordon Gekko Goes to Washington

In the 1987 Academy Award winning film, Wall Street, Gordon Gekko (Michael Douglass) tells the shareholders of Teldar Paper that, “Greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA.”

In the midst of an unfathomable collapse in our banking system, on the heels of the worst week in history of the Dow Jones Industrial Average, at a time when you’re more likely to find stilettos in a nunnery than a commercial loan...let’s revisit the words of Mr. Gekko and agree that greed, when unchecked, is bad.

Very bad indeed.

For the record, I’m not against corporations. Quite the contrary. Corporations hire people, and they pay huge chunks of change in payroll taxes. And in my book, offering someone a job is one of the most influential and essential things you can do for a person.

A good job -- purposeful employment -- can resurrect a life.

That point notwithstanding, let’s not sugar coat the debacle on Wall Street. It was driven by greed. And now, the taxpayers, you and me, will dish out a few dimes of life support (about seven trillion of them) to prop up Wall Streets voracious misfires.

Let the good dimes roll.

As part of the $700 billion initial bailout (I say initial because there’s more to come, in one form or another), Treasury Secretary Paulson infused $250 billion into eight of the largest banks in the world in exchange for debt and preferred shares of equity. Eight banks, which now envelope the stalwart investment players on Wall Street – are now controlled, in part, by the U.S. Government.

Don’t confuse the act with socialism. With one or two exceptions, these titans of Wall Street had no choice. That had to have the cash. Why? The investment houses of Wall St. made $60 trillion of uncollateralized sidebets on credit default swap (CDS) derivative contracts. And in the end, they couldn’t make good on their debts.

For frame of reference, there are approximately $1 trillion in outstanding sub-prime mortgage loans. Said another way: 1/60th of the outstanding obligations on credit-default swaps.

These swaps are labeled as insurance contracts, and technically they are, providing downside risk protection against potential defaults on bonds – whether the bonds are tied to large blocks of mortgages, credit cards, corporations, or municipalities. In reality, these CDS contracts have evolved into mammoth bets as to how bonds will perform. Bets that due to their labeling –- over the counter insurance products as opposed to regulated financial instruments -- require no collateral.

In other words, investment banks were able to sell and take on billions and billions in exposure, without needing to park $1 of collateral in a bank.

Worse, these CDS contracts are so complex, so leveraged, so chopped up in terms of who owns what, it makes accurate accounting of the contracts about as easy to measure as a gamma ray from Orion’s belt.

Berkshire Hathaway Chairman and famed investor, Warren Buffet, warned of the danger of these complex derivative contracts in the late 1990s, calling them “weapons of financial mass destruction.” Buffet even sold one of his portfolio companies, American Re, which was a large underwriter of derivates after assuming losses exceeding $470 million. Buffet didn’t sell because of the losses; he sold because “I couldn’t even figure out what we owned.”

If only others had followed suit.

But really, if you were a manager at a mutual or hedge fund, why would you listen to Buffet? You are paid a 2% management fee + 20% of the profits of the fund. In other words, if your fund loses money or performs at a mediocre rate, you get paid well. If it performs well in the short run, you get paid incredibly well.

And initially these swaps proved very profitable. Profitable for fund managers and profitable for brokers of the contracts, who more times than not sold a portion or all of the swaps downstream to other investors at a profit (see former reference to accounting nightmares via Orion’s Belt).

As an investment manager or broker, what’s not to like? It's the power of now invoked to the nth degree: cash in while you can. If the bonds tied to the swaps start defaulting and/or your fund goes belly up later, you will already have enough cash stockpiled from your 2 + 20% days for a lifetime (or three) in the Cayman’s.

Parody, between the retail investor and investment managers and executives, has never been part of the game. Never more noticeable than now.

It’s the foremost Gekkoian principle: greed always looks out for number one.

Looking back at the sum of the parts amidst the current meltdown -- the lack of regulation, the focus of near-term earnings to appease Wall Street, the exorbitant bonuses for executive and fund managers -- it seems eerily plausible that the investment banks on Wall Street would bet the house (literally), wanting more.

But you can only double down on black so many times. Eventually, the roulette wheel will read red.

And it did.

Bear Sterns was the first investment bank to buckle, now a part of JP Morgan. Merrill Lynch: acquired by Bank of America. Morgan Stanley, forced to take in $9B from Mitsubishi Bank. Goldman Sachs nabbed $5B from Warren Buffet, and like Morgan Stanley, became a depository bank. And then there’s Lehman Brothers.

Lehman had outstanding debts and derivate exposure so enormous, the market brought no suitors. They couldn’t raise capital; their market value, in the end, was zero. One of the most recognized names on Wall Street forced to close up shop – last week an auction on their outstanding bonds yielded owners less than ten cents on the dollar.

I also watched in disgust last week as Martin Sullivan testified before Congress. Sullivan, the former CEO of the world’s largest insurer, AIG, convinced the Board of AIG to change their company’s administrative guidelines and approve $40 million in bonuses for top executives in 2007. $40M in bonuses in a quarter when AIG posted $5 billion in losses. The same company which has since taken in $120 billion of taxpayer money.

AIG: today’s poster child, “your taxpayer dollars at work.”

In the same breath I want to laud the man who followed in Sullivan’s footsteps, Robert Willumstad, who held the top job at AIG for a mere three months before the government stepped in. When Uncle Sam bailed out AIG, they removed Willumstad from the helm.

Willumstad was due $22M in severance when he was ousted. He turned down the cash, referencing the fact that he was not given the chance to execute his turnout around plan. Willumstad said he was undeserving of the severance, especially considering AIG’s financial plight.

If only we could duplicate Willumstad. We need (thousands) more like him around Wall Street. I won’t hold my breath.

Instead, I will fasten my seatbelt and hope that, in the end, when we emerge from this recession, we end up with a better, more stable, financial system. The system is the key, needing appropriate checks and balances.

Greed will always try to one-up it.

When the dust settles, and that could be years from now, I do think our financial system will have improved immeasurably. Unfortunately, millions of people will have lost sizable portions of their pension and retirement savings in the process.

If I were in that boat, I would probably be irate.

Thankfully, I'm at the opposite end, with little-to-no money tied up in the market. Not that my days are disassociated with this debacle: my generation will pay for the current day’s gluttony, not in one form or another, but at every imaginable turn.

Americans loves a good ride, whether a .com coaster or a bungee-like mortgage boom. In the end, it’s uncanny how often history rises from the ages and whispers, “yea masses of short-term memory, greed has bested you again.”

History, that subtle voice in the distance, has always been the greatest light onto tomorrow. Some lessons we are forced to learn over, and over, and over again.

Revisit the Congressional floor in 1874 as Robert Brown Elliot, a black congressman from South Carolina remarks on the fall of the Confederacy: “The progress of events has swept away that pseudo-government which rested on greed, pride, and tyranny.”

130 odd years later, another reconstruction is upon us: our nation's pseudo-financial system is about to have its stomach stapled. History changing Hamilton’s America forever.

When the surgery is over, let’s just hope the system which provoked our insatiable, former self...is unrecognizable.