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The worlds largest particle collider passed its first test last week in Switzerland. The test was remarkable on many levels, not the least of which was the fact that two countries, France and Switzerland joined forces on this $10 billion project that has been ongoing since 1984. For physicists, this is enormous. Within a few weeks, or perhaps a couple of month, a couple of atomic particles will be sent on a collision course around the 17 mile tunnel in what the physicists believe will be a simulation of the original Big Bang, which scientists believe formed the universe as we know it. This upcoming test will go a long way towards proving that theory. It could also provide us humans with our first glimpse at new dimensions, the proof that

dark matter

does exist as theorized as well as giving us further information on the nature of anti-matter. They collision might also cause several black holes, though scientists expect them to have a life of less than a second, and not swallow the earth as some doomsday internet pundits have predicted.

I cant profess that I know all or even many of the ramifications of this discovery. The idea of curved space still eludes me, but I think it is a phenomenal achievement by other human beings. Not the least of which is the tenacity to finance and move forward with this project for over thirty years. As a financial man, I can tell you that is no mean achievement. Perhaps never before in history has so much empirical information been so close at hand. I personally cannot get enough of this seemingly science-fiction fodder, and I could fill pages with the fractions of information I do have about the upcoming test.

But I was amused at the juxtaposition of this story in my local newspaper with a story about the United States vice-presidential nominee, Sarah Palin- same day, a couple of pages apart. It seems that Mrs. Palin, possibly the future next in line

ruler of the free world.

It seems she is a Creationist. Does anyone else see the humor in this? All right, if I was an American, I might not see it as being so funny. But really, if I made this up, no one would believe me.

By Myron Gushlak

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Do you remember a few years ago when two bodies were discovered in Antarctica? The bodies were men who had died there on an expedition in the early years of the twentieth century, but their corpses were preserved as if they had died mere hours before being discovered. It was a feast for the scientific community. One of the things that the forensic scientists discovered after testing the corpses of these men was that both of them suffered from lead poisoning. Virtually all of the food brought along on the expedition was stored in lead cans, as was the norm at that time. The scientists theorized that both men, and possibly most of the expedition were insane at the time of their death because of the lead poison.

I dont know what made me think of that. Maybe it was George Bushs speech the other day where he condemned Russia for invading Georgia. No one seemed to be bothered by the incongruity of a President with an invading army in Iraq lecturing another country about an invasion. Everyone just seemed to nod in silent agreement. Not that there is any shortage of examples of mass insanity. Maybe a hundred years from now, scientists will discover that the people of the early decades of the twenty-first century were all victims of

"artificial coloring insanity"

or some similar thing. It would certainly explain a lot of what is considered to be

"normal behavior."

By Myron Gushlak

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The Federal Home Loan Mortgage Company made more news today when it declared a quarterly loss much larger than expected. It was hoped that a rebound by Freddie Mac, as it is commonly known, would indicate a bottoming out of the mortgage crisis. Apparently, more bad news is to come with an end now forecast at the end of 2009 at the earliest. Sobering stuff.

Freddie Mac is a government sponsored enterprise, created in 1970 to help the average American citizen purchase homes. What Freddie Mac does is to buy mortgages on the secondary market, and then sell them as mortgage backed securities. Their securities declined by $1 billion, it was announced today. Freddie Mac has a total worth of $4.2 billion. To start their recovery, they hope to raise $5.5 billion in new securities. Investment banker Myron Gushlak, for one, believes that the investor must believe that an end is in sight before Freddie Mac becomes an appealing investment option again. That end was not announced today despite new funds pledged by the federal government and a new law passed this week to shore up the struggling company.

According to a National Public Radio report, when Freddie Mac was established, the government pledged to keep it in operation with no end date to that pledge. Freddie Mac will, therefore, continue to exist no matter what losses might still be announced. It might not be recognizable, but it will weather this storm in one form or another. That guarantee sounds almost naive to me. Idyllic. Optimistic. I guess that is one definition of hard times – when other times seem so desirable by comparison.

By Myron Gushlak

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In case youre one of the eleven people in the United States who hasnt yet seen

Batman,The Dark Knight

, let me be brief so you can go out and buy your ticket. Okay, maybe there are more than eleven of you out there, but according to Reuters this morning, Batman became the fastest movie to make $300 million, and it has only been out for ten days.

Every now and then, a movie comes along that resonates in the viewers mind.
Certainly Heath Ledgers brilliant portrayal of The Joker is a huge part of the success, Christian Bale is convincing and the special effects are sterling. But that doesnt explain why it resonates. With apologies, then, let me point out a couple of my observations. In this movie, Batman is not quite as squeaky clean as he had been portrayed in past incarnations. He is conflicted, often coming right up to the very edge of the line that separates good from evil; right from wrong; perhaps he even crosses that line. There is no consensus of whether what he is doing (his vigilante-ism) is good for the residents of Gotham or not. The population is split, some calling

the batman

a criminal himself. Even visually, the city of Gotham itself is darker than past portrayals. Is any of this starting to sound familiar, say, perhaps, when compared to certain political leaders or situations?

But

The Joker

(Heath Ledger) steals this show. He is evil incarnate. Unlike previous villains, this Joker does not want money, or power. Those are things we have grown accustomed to. They no longer frighten us. In fact, they seem, in these early days of the twenty-first century, almost normal. In one scene, the Joker sets fire to a pile of money, the ultimate crime to most Americans. What the Joker wants is to bring down Gotham, to throw it into chaos. Americans are just coming to grips with this notion. People understand the motivations of Napoleans and Hitlers who want to take over the world. But this idea of declaring war on somebody for the sole purpose of destroying them is a relatively new one to most, say something they have had to get used to since 2001. The Joker does not want to rule Gotham, or to steal all of its money. It simply wants it destroyed.

Am I reading too much into this? Perhaps. My friends have accused me of worse. But besides the fact that it is a good movie on its own merit, The Dark Knight has managed to encapsulate our darkest fears. This movie is set in a world where good overlaps evil, and motives have changed. I wonder if a movie goer in 1950 would even get it. Sixty years ago it would have seemed preposterous that a villain would not want to take over the world. Ledgers Joker would have seemed farcical, in fact, unbelievable. That is why this movie resonates. On some level, we are confronted with this sort of Joker every day. He fills us with terror. He is truly frightening. More than any other movie I can think of, this movie is about the world in 2008.

By Myron Gushlak

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Continue reading "Still A Hundred Dollars a Barrel" »

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Last month, I wrote about Sovereign Wealth funds, the financial vehicle that countries use to invest in other countries. At that time, China had invested heavily in both Morgan Stanley and the Blackstone Group, easing considerably the negative effect of the mortgage crisis. I quoted Lawrence Sommers, the former US Treasury secretary who warned

It was far from obvious to me that this {maximizing value of shares} will be over time the only motivation of governments as shareholders.

He was essentially questioning what impact these investments would have on future government policy. His concern was theoretical. No country had ever used such leverage to mandate policy in another country.

The future is here sooner than we thought. In this weeks Sunday New York Times, David Rieff, author of

At the Point of a Gun:Democratic Dreams and Armed Intervention

was writing about the Myanmar governments refusal to allow aid after the recent cyclone, and other areas of global need. Although the article was not about sovereign wealth funds, one seemingly innocuous sentence caught my eye. In explaining the lack of meaningful response to the situation in Darfur, Rieff explains that one of the reasons for inaction was, and I quote,

Part of the reason is that China opposes such a move, and it is a lot harder for the US in 2008 to go against a country that holds so much of its government paper….

Is anybody else paying attention here? I see movie possibilities. Im seeing a 21st century Frankenstein, one who was created in a haunted house on Wall Street by massive debt and who is ultimately able to rule the world. The villagers (debted countries) will be powerless! What horror! What terror! What a mess!

By Myron Gushlak

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Voltaire called Canada

a few acres of snow

It is that sort of dismissive comment that has made us Canadians particularly proud of our musical heritage. Joni Mitchell, Leonard Cohen and Neil Young, all rock icons, hail from Canada. You might be asking yourself, what does Myron Gushlak know about music? and why should I be listening to an investment banker about what is any good? While my association with the formation of EMusic has given me cache in the financial world, it is probably not enough to get a job at Rolling Stone. So it was with no little skepticism that I listened to the Canadian group The Arcade Fire.

Though not a particularly new group, (they have been around for almost five years with two best selling CDs under their belt) they are relatively unknown outside of the Indie music scene. This is unfortunate. Not for them. Theyre doing quite well thank you, but for the masses of people who have yet to hear them. Led by Win Butler and his wife Regine Chassagine they are a vibrant tour de force of music. Besides the usual drums, guitar and bass, they incorporate such un-rock-like instruments as the accordion and the harp. Their music fills a room. I was fortunate enough to see them at Radio City Music Hall in New York, so obviously they are not unknown. Their stage act seems to incorporate a small army of versatile musicians. Violins, brass, percussion, fantastic harmonies and stunning lyrics make them a banquet both audibly and visually. I did not necessarily intend this to be a commercial for the band, but once you see them, youll understand why Im so enthusiastic about them. Their 2008 tour is over after 122 shows in 75 cities in 19 countries, so your best bet at seeing them is U-Tube. Check out the one where they’re all playing in an elevator.

And to make it all too sweet for words, theyre Canadian!!!

http://www.youtube.com/watch?v=NNfWC4Sgkcs

By Myron Gushlak

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Theres a new kid in town. Actually, hes not a new kid at all, but he seems to have caught everyones attention now that he’s grown up. Im talking about the “new” financial entity, the Sovereign Wealth Fund. A SWF is an investment tool used by countries to invest in other countries. Over the past five years, the number of new funds has spiked. The International Monetary Fund estimates that $3 trillion is currently being invested, and that amount could jump to 12 trillion by 2012. Though that number looks futuristic, it is only four years from now.

Chinas recent investment (I hesitate to use the word “bailout”) in the struggling US companies, Morgan Stanley and Blackstone Group has raised more than a few eyebrows. And Chinas SWF investments are less than a quarter of what the Abu Dhabi Investment Authority currently holds. Most sovereign funds do not disclose exactly where their money is being invested. The obvious big issue is whether these investing countries will continue to use Sovereign Wealth Funds solely as financial investments, or will they begin to use their power as political muscle. According to Lawrence Sommers, the former United States Treasury Secretary, right now the goal of these funds is

to maximize the value of their shares.

But, he cautions,

It is far from obvious that this will over time be the only motivation of governments as shareholders.

For a financial guy, this makes me giddy. This is as exciting as human g-nome developments to biologists. I wish I could fast forward a few years to see how this all plays out. The trenches of the next world war may be on the stock market floor, and the soldiers may all be wearing suits, pardon the hyperbole. Just thinking about this is like chugging a can of Red Bull. Now Ill never get to sleep.

By Myron Gushlak

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The governor of New York, Eliot Spitzer, was implicated yesterday in a prostitution ring. Allegedly, he called a prostitute. I wanted to get my two cents in before anything more specific is proven or even alleged, just so I can have an opinion unfettered by facts. When I heard the news, I smiled. I admit it. A big stupid grin came over my face. Not because I have anything against Mr. Spitzer. I know almost nothing about him. Nor do I have anything against his politics. I confess I dont know where he stands on anything. I just love the irony of a man who runs on an ethics platform, and is known as

Mr. Clean

being tied to a prostitute, no pun intended.

You can consider it a flaw in my personality if youd like. I have no defense. I also laugh when evangelist preachers are implicated in fraud or sex scandals…Priests with young boys? Yeah, I snickered a few times. I dont know why. I dont laugh when people trip and fall on the street, but I probably would if they first bragged to everyone that they were such great walkers. I agree with George Orwell who said

saints should always be judged guilty until they are proven innocent.

Ill stop smiling soon. Really. Sorry to hear of your news, Mr. Spitzer. Really. I mean it.

By Myron Gushlak

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I consider myself warned. I have launched my charitable foundation and stand prepared for an onslaught of bad will. Surprised? Havent you seen what happened to Oprah Winfrey? First, she was gracious enough to give new cars to her entire audience to celebrate an anniversary of her show. The response was a series of complaints that some of her audience could not afford the sales tax on her generous gift, or that she was merely a publicity hound. Next, she started a school for girls in Africa. She was criticized for being too exclusionary, too elite-ist, as well as being accused of being wasteful with her own money. Yes, Ive been warned.

Philanthropy is a slippery slope. It invites criticism. No matter how well intentioned, it makes people uneasy. It sometimes makes the giver look foolish. No one wants to be like John Rockefeller who became a living caricature by handing out dimes to everyone he met on the streets. The nicest thing I could find written about it was uttered by Oscar Wilde who called philanthropy

"the refuge of rich people who wish to annoy their fellow creatures."

While I admit to smiling at the quote, I embark on my new endeavor with great optimism and enthusiasm. I know what Im in for, but Im going to do it anyway.

Check out the new website at: www.myrongushlakfoundation.com

By Myron Gushlak

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