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October 10, 2015

I read the following press release a few weeks ago about how a banker who worked at La Jolla Bank, FSB admitted to conspiring with other senior executives at the bank in approving bad loans to unqualified borrowers. Ms. Martinez, along with others, accepted bribes and kickbacks in return for making loans to borrowers, known as “Friends of the Bank (FOB),” who were unable to repay the loans. When FOBs defaulted on a loan, “bank executives gave them more loans so they could make payments on the initial ones.”

An audit describes what caused the bank’s failure. The bank failed due to “significant asset quality deterioration and loan losses.” Not surprisingly, the control fraud involved LJB’s CEO and CCO. Who else could defeat a bank’s internal controls easily? The bank was set up to fail due to an environment fostering a Gresham’s dynamic in which the bank grew aggressively by originating bad loans. The bank’s officers were rewarded with compensation based on fictitious earnings and by receiving bribes/kickbacks, while the taxpayers bore the costs to the tune of $1 billion. Ultimately, the bank did not have enough capital to sustain a deteriorating loan portfolio–the Ponzi scheme began to crumble.

In the end, the Office of Thrift Supervision closed the bank in 2010 and assigned the Federal Deposit Insurance Company as receiver, which sold LBJ’s deposits and assets (through a loss-share agreement) to another financial institution.

Cap’n Crunch, PhD

April 1, 2015

The Naval Academy will be honoring Horatio Magellan Crunch with an honorary PhD degree at its annual commencement ceremony this year. Just who is Horatio Magellan Crunch? You may know him better as Cap’n Crunch. Yes, that Cap’n Crunch, who has been piloting and navigating Quaker Oats’ breakfast cereal of the same name since 1963.

Mr. Crunch will receive a degree in seamanship for his iconic portrayal of a children’s breakfast cereal. When asked about how he felt receiving this honorary degree, the cap could only say he was extremely honored and happy

There was a bit of controversy regarding his rank as some have pointed out he’s technically a commander. Mr. Crunch defended himself by maintaining he is the captain of the S.S. Guppy, and it appears that the Academy is standing behind its decision.

It’s not known whether or not there will be crunch berries in attendance, but all graduating students were asked to bring their own bowls and milk.

Grapes of Wrath

January 24, 2015

Someone on Twitter shared the following article from the New York Times regarding wine and fraud. Its title is clever: In Vino Veritas. In Napa, Deceit.

It’s not hard to see why the fraud began in the first place. When expenses are greater than income, a business will suffer a net loss. If you couple the continuous losses with the loan from his wife’s aunt and uncle, it only adds to the pressure. There was certainly an opportunity for Mr. Hill to engage in fraud. After all, he was the owner of Hill Wine Company. The article doesn’t suggest any rationalizations, but I would venture to guess the personal bankruptcy in 2009 would provide ample justification because Mr. Hill could potentially argue that he was doing it to provide for his family.

Something else that caught my attention in the article is the following section:

Emmanuel Kemiji, who owns Miura Vineyards in Novato, is a master sommelier, a level of wine expertise so difficult to achieve that only 220 people in the world hold the title. In an interview, he said that even top tasters like himself would find it nearly impossible to discern the true geographic origin of a well-made cabernet.

I had done research during graduate school regarding conspicuous consumption and counterfeit products. One of the things I found was that most people aren’t “intimate” with products, i.e. most people don’t know the true details of a brand; the only important thing is the brand’s name itself. If it’s difficult for a master sommelier “to discern the true geographic origins of a well-made cabernet,” then it would probably be even more difficult for everyone else.

MLK Day Action

January 18, 2015

The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.

– Martin Luther King, Jr.

Dream a Little Dream

January 18, 2015

I usually don’t remember all the details when I have a dream, but a few days ago was an exception. I was in a rural part of Missouri, on my way to a wedding near a lake. I couldn’t tell you the name of the lake, but I do know that I was sitting in the backseat of a car. An elderly woman was the driver, and her husband was sitting in the passenger seat. I was sitting behind the husband, and my iPhone was next to me.

Once we arrived to the wedding’s site, I remember the lady parked the car very close to the lake. It was at this point that the car fell into the lake. I don’t know why, but two of my coworkers were there at the wedding already. One of them dove into the lake and rescued me and my iPhone. I don’t know what happened to the elderly couple. I can only assume they escaped somehow because I was the only person in the car. Once I was safe, my other coworker provided me with the number of someone who could fix the water damage to my phone. It was at this point that I woke up from the dream.

I don’t know the dream’s significance. I could sit here all day and throw out all kinds of theories behind the why I was in MO or why I was on my way to a wedding. I’m sure everything has meaning at the sub-conscious level that I could spend weeks with an expert analyzing.

Head of the Class

January 7, 2015

I promised a new entry several weeks ago, and as promised, here it is.

Recently, I completed an online class at one of the local schools in San Diego. The class’s name is unimportant because what I would like to discuss in this entry is my experience with an online class.

It wasn’t my first foray into the world of online classes. I had taken two previous classes for credit and didn’t seem to have an issue with those classes.

Although I passed the class with an A, I wasn’t satisfied with my experience this time. I think had I been required to attend the class in person, it would have been a better experience because there would have been better student/teacher interaction. The instructor did her best to make the class interactive by requiring students to post replies to weekly topics, but it isn’t the same as discussing the subject in person.

The teacher did her best to insert an anecdote here and there, but she kept to reading directly from the PowerPoint slides. Was I happy with the class? Over all, I would say I was dissatisfied with it, but I enjoyed the subject matter because it has been one of my interests for quite some time.

Absentee Writer

November 30, 2014

Wow! It has been quite some time since my last blog entry. I can’t explain why I have neglected the blog, but tonight a good friend reminded me that I do have a blog. I do plan to post something in the near future, but it will have to wait because I need a series of events to transpire first. In the meantime, enjoy this video clip.


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