THIS summer the unvarying male uniform in the precincts of Brooklyn cool has been a pair of shorts cut at knickers length, a V-neck Hanes T-shirt, a pair of generic slip-on sneakers and a straw fedora. Add a leather cuff bracelet if the coolster is gay.

In truth this get-up was pretty much the unvarying male uniform last summer also, but this year an unexpected element has been added to the look, and that is a burgeoning potbelly one might term the Ralph Kramden.

And this “trend” – in men’s fashion, no less – no wait, men’s casual fashion – no wait, men’s casual fashion with freakin’ potbellies! – somehow warranted 750 words.

via Noticed – It’s Hip to Be Round – NYTimes.com.

Slate’s callout: The Bogus Trend Stories of Summer

And for those looking for a more typical Times kind of lifestyle story, they’ll have to settle for the Post, which explores the recessionary suffering of Westchester in a 5-page (OK, that’s Post online pages) article “Squeaking By on 300,000“  Can’t say I could drag myself to the end.

With recovery elusive, a population doddering into old age and perhaps a decade of deflation in prospect, Japan may start mulling the most radical monetary policy of all — the abolition of cash.

To fight deflation, abolish cash. Could Japan make reality of ‘science fiction’? – Times Online.

Some big banks pay 90% of this face value for credit-default-swaps (insurance) on a mortgage-backed-security they think is going to default (but they don’t own). Their counterparty (insurer) pays off the loans in the MBS and doesn’t have to pay the swap. Pockets the premiums (which were big) minus the cost of paying off the loans.

The real-life analogue to this? Your house is on fire. Your neighbors all buy fire insurance on your house from a friendly agent, promising to pay if the house on your lot is destroyed. The agent walks over to the burning hulk of your house, puts out the fire, repairs the damage, and tells your neighbors “the house isn’t destroyed” so he doesn’t have to pay out. The cost of fixing the house is less than the premiums your neighbors paid.

Before going and buying this sure thing, wouldn’t you ask yourself why in the world anyone would write insurance on a burning house/sure-t0-default MBS? Or what incentives there were if the agent wrote insurance for more than the house was worth?

via A Daring Trade Has Wall Street Seething – WSJ.com.

In 2008, overpaid bankers taking big risks with other people’s money brought the world economy to its knees. The last thing we need is to give them a chance to do it all over again.

Two further thoughts:

First, I wonder whether we actually want so many smart people on Wall Street.  Shouldn’t bankers be Babbitt-boring?

Second, it seems to me that if you pay enormous, even extravagant amounts of money, you’ll get more people whose primary motivation is money. I’ll accept that most people are moved in some fashion by financial incentives. Should any company structure compensation to attract employees/executives for whom money is the first motivation?

On this score, see the (otherwise teeth-grindingly annoying) New York magazine article on this topic, which winds up with this interchange between the reporter & an ex-Goldman banker:

I asked him what will happen if Congress succeeds in regulating compensation. “These guys will not work on Wall Street,” he says flatly. “People go to Wall Street out of greed. When I was interviewing for jobs, frequently some form of the question came up: How much do you want to make money? If my answer was something like—and it wasn’t—but if my answer was, ‘I’m here for intellectual betterment,’ their response might have been, ‘University is a great place for you.’ They want people who think ‘I’m greedy, I want to be a billionaire.’ That was viewed as a really good thing.”

You get what you pay for, I guess.

via Op-Ed Columnist – Money for Nothing – NYTimes.com, and Cutting back is hard | Free exchange | Economist.com.

Money quote for me:

In Ms. James’s case, the company that was most recently servicing her loan is now defunct. Its parent company filed for bankruptcy and dissolved. And the original bank that sold her the loan said it could not find a record of it.