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The word subprime is hitting world headlines today, as the cause of a global stock market “correction”. I subscribe to various news feeds related to economics, including those belonging to authors Tim Harford (FT), Bob Sutton, and the authors of Freakonomics., so I’ve been hearing the rumblings for some time now. Business Week did a very good article on it, back in March, which is online here. I’d like to give my take on the situation, which should be prefaced with the standard “I Am Not An Economist” disclaimer.

A subprime lender is a financial institution that offers loans to debtors who have poor credit records. They might not use the word subprime here in Europe, but we have them too: the kinds of companies that put ads on cable TV, offering credit to people who have been turned away by banks. These are people who need credit more than most: you get a poor credit record because you took out too much credit in the past, since “too much” is defined as the amount that you can’t pay back.

Unforeseen circumstances can turn a comfortable financial situation nasty, so it’s normal to have insurance of different kinds, to “smooth out” the financial impact of unforeseen events. In the USA, however, many poorer people have been hit hard by disasters such as Hurricane Katrina and the flooding of New Orleans, and can not afford health insurance in particular. The federal Medicare scheme is inadequate, covering only the very poorest, and a middle class family can be bankrupted by a single car crash, even if they have health insurance.

The result is that you have more subprime borrowers than before, and subprime lenders are created to cater to them. The added risk to the lender is handled primarily through the application of higher interest rates, which is a double-edged sword: those who pay higher interest are those who can least afford it, meaning they are at even higher risk of defaulting on their subprime loans.

If a loan is secured on property - a standard subprime loan requirement - the bank can foreclose on the property, leaving the lender out on the street. This is not a theoretical exaggeration: in the poorer parts of the USA, it is happening with disappointing regularity, and the frequency is growing.

Why, then, is the crisis in subprime lending having such a global impact? The most direct effect is due to the fact that the subprime lenders re-sell the loans (or derivatives) to other financial institutions, including some in the Far East and Europe. The third-party exposure is limited, however: to quote the Business Week article, “the buyers of the loans started exercising their right to sell the bad ones back to the lenders at face value. The true value of these delinquent or foreclosed loans was far less than face value, but the lenders were forced to swallow the difference.”

In other words, the subprime lenders are carrying the can. Even if they can foreclose, the debtors often have bankruptcy protection, and the lenders lose money in the foreclosure process, rarely getting back the full loan value.

Indirectly, people in financial distress are a relative burden on an economy, simply due to their reduced standard of living. Property prices are being affected, with lenders making less on foreclosure, and less on new mortgages. On a wider scale, property prices and mortgage lending are key economic indicators, and the indicators in the USA are not good; the property bubble, that got a lot of mortgagees in to trouble in the first place, is deflating. This is similar to what happened in the UK in the early Nineties: they called it Negative Equity.

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Thursday: after checking out from The Curtis, I took a final five-mile walk around the northern Uptown area of Denver, via the State Capitol. Not much more than a time-wasting exercise, with my flight due to leave after 7PM. A boring bagel for lunch, then the bus, then sitting around the airport, waiting for a chance to sit on a plane for eight hours.

Denver International Airport may be in a weird location, miles from Denver itself, but it was actually quite pleasant. The main terminal has a white fabric tent for a roof, an open atrium construction and plenty of glass, with the soft lighting making everything clear. I had been warned about the single security checkpoint, but there were two checkpoints when I was there, in open areas at opposite ends of the terminal, and neither was too busy. After that, however, it was boring, with mostly restaurants, and I wasn’t hungry at all. Good thing I had the laptop, and podcasts to listen to.

My flight left 1/2 hour late, yet arrived 1/2 hour ahead of schedule, thanks to tailwinds of up to 250km/h (according to the in-flight display) and a top ground speed in excess of 1100 km/h. possibly the fastest I’ve ever flown. (Without the tailwind, that speed would have been supersonic.). No sleep, but I did get to see 2-1/2 movies in the limited flight time; The Devil Wears Prada, half of The Incredibles.

The main movie was The Departed. Wow: the Boston Irish mob was portrayed in lurid detail, complete with the kind of “Irish Rock” music I detest; the violence was sparse but frankly shocking, and even more abrupt than in previous Scorsese films I’ve seen. Had I blinked at a crucial point I would have missed the death of a main character, and perhaps I wish I had; one second he is flushed with success, chattering excitedly; the next second he is a leaking bag of bones on a concrete floor. To a non-religious viewer, The Departed was a gripping vision of a Hell I hope I never visit, one that puts the kibosh on any romantic notions you might have of the Irish. (I have few of those left; whenever I hear an Irish person take credit for anything good in America, such as the Kennedy clan, I need just two words to shut them up: Tammany Hall.)

Heathrow airport was confusing and infuriating. I thought I knew it, but changes since my last visit mean that transferring there was inconsistent. Everything seemed normal on the way to Denver, but on the return the Flight Connections route, to Terminals 1, 2 & 3, took everyone through a single small area for security screening. There was a 20-minute queue to get in to the area, then another 20-minute wait to be screened. Some frantic passengers jumped the queue to try to make their flights; everyone else understood. I was fine, no problems with security or time, but I was still chafing at the delays and the rudeness of the staff. The much-maligned Transportation Security Administration in the USA were positively friendly by comparison.

Puzzlingly, the Friday flight to Dublin was completely full, with disappointed people on standby, and requests from the staff to give them large bags to put in the hold, which I acceded to for the first time on this trip. Why the crush? My pre-flight planning missed an important Irish occasion: St. Patrick’s Day weekend. The Dublin airport baggage conveyors were overflowing, Arrivals was Bedlam, and the bus back to Ballsbridge was slow in arriving, then packed to the rafters. Five girls from the Midlands of England were competing to see who was the most annoying, the winner being one from Derby, as she proclaimed to all and sundry.

That was the trip that was: I managed to go shopping, and stay up till 10PM, then crashed till noon on Saturday, and woke up with my brain, on the table next to me, asking “who are you?” Well, if it avoids jet lag, a lazy weekend price worth paying. It’s back to work on Monday, where I expect to bust a blood vessel or two before breakfast.

On Wednesday I noticed that I was sunburned; this was only after another long walk that topped up Tuesday’s UV exposure to overflowing, and had the hotel receptionist laughing at me. I followed the Cherry Creek path most of the way, which runs alongside Speer Boulevard to the south east. The creek (but not the path) runs through the exclusive Denver Country Club, where I imagined Dynasty’s Blake Carrington with a 9-iron in mid-swing… how eighties is that?

Then the Cherry Creek Mall, mostly posh fashion emporia, and a food court where a Japanese-owned Greek fast food outlet sold me a Gyros. It sounded glamorous until I realized that it was just another name for a Souvlaki, a Shawarma, or a Doner Kebab; pressed meat, broiled on a rotisserie, shaved in to pita bread, with salad and dressings. I came 5,000 miles for this? Still, it was nice enough, and gave me a chance to read the Denver Post I had been schlepping around all morning.

The walk down Colorado Boulevard took my day’s shoe wear up to about seven miles, most of it in thin air and bright sunshine. I had sunscreen on, but not enough, it seems. On the way back to the hotel I stopped by the Pepsi Center, wondering whether there were any seats for the hockey game. The scene was familiar to me from rock concerts; many scalpers outside, with signs and shouts of “any tickets?”, while people walk past them to the box office, to buy tickets at face value. Expensive, but $66 got me a center balcony seat, and I headed back there after an hour at the hotel, writing the previous post.

The game was fun: the draft Coors was actually pretty good, not expensive by Irish standards, and the place was nearly full for one of the NHL season highlights; the Calgary Flames visiting the Colorado Avalanche. The ESPN summary of the game can be found here. My seat gave me a good view of the whole of the ice, except for the head in front of me during the first period. It got cold, as expected, which suited my red neck just fine.

The first surprise for me was the absence of any show of impartiality by the hosts; each Colorado team member was given the star treatment, with a video introduction, while Calgary came on unannounced. Between shots the announcer revved up the partisan crowd, helped by big-screen slogans and chants.

The game wasn’t hard to follow, though it took me a little while to figure out what a Power Play was: a penalized player in the “sin bin” for two minutes, giving the other team an advantage. Power Plays gave Calgary a 2-1 lead in the first period, but the Avs regrouped, scoring a goal in the second, and a third goal at the start of the third period, leaving the fans happy with a 3-2 home win. There was even a fight on the ice, cheered on by the 14,000-strong crowd.

Each 20-minute period took over 40-minutes to play, and was followed by an intermission meaning that each period started on the hour. Family-friendly, there were plenty of kids around, and not just in the audience; two junior teams took to the ice in the intermissions, first for standard play, then a shoot-off. Plenty of audience participation, with WW2 veterans taking a bow, remote-controlled balloons dropping coupons for food and newspapers, dance contests for the arena camera, and free t-shirts flying around, though I was too far up in the nosebleed section to partake in any of the bounty.

I was back in downtown Denver well before 11PM, looking for supper on 16th Street, yet nearly everything was closed, except for a McDonalds - no thanks - and a Taco Bell, which sold me a boring burrito. I know it was a weekday night, but the street was hardly deserted, after a big hockey game.

In general, I was very disappointed with nearly all the food I had in the USA. Quality was always overruled by quantity; sandwiches have plenty of meat with little flavour of its own; chicken didn’t taste like anything, not even chicken. If I lived there I would be doing a lot more cooking of my own, I suspect, once I figured out where to get the ingredients. I don’t know if I would gain weight, from becoming acclimatised to the blandness, or lose weight in reaction to chronic culinary disappointment. As for the coffee; Starbucks was the best, which is really not saying much at all, at the prices they charge.

The last few days of my trip Denver followed my standard new city vacation profile, in general: use the public transport system, such as it is, and my feet for the rest.

Tuesday it was South Denver; after taking the Light Rail as far as it went, to the Lincoln station, I checked out the immediate area. Between huge housing developments there are huge empty fields; I stood in the middle of one, took in the view of the Rockies, resisted the temptation to pick up a handful of dry red soil and take a sniff, then returned to the station to catch a bus. (I was late, but so was the bus.)

The driver, a little Mexican guy in sunglasses, had a radio on: like every other time I heard the radio in Colorado, it was playing almost all British pop music, hardly anything American at all. The bus took us through Sky Ridge, where I found myself whistling Little Boxes, then stopped when I noticed just how huge these little boxes were. Some were as big as the 3-floor 15-apartment building I’m writing this from. I got off at the Highlands Ranch center - out of curiosity at the name - in time for lunch, so I had to try a Fatburger. Definitely the best fast food I had on my trip, and surprisingly healthy, with the amount of salad they had on top. Not much else around there except yet another Barnes & Noble, so I hit the road.

This was a mistake: it was getting hot, I had no sunscreen on, and I had underestimated the distance to the Lyttleton / Mineral station on the not-to-scale map. Two miles later the road took a sharp left, and I could see it carried on for at least two miles further, with nothing at the end. I know my limitations, so I waited for the bus in the shade of a road sign. Some strange looks from passing cars and Harleys, but no-one said a word to me. It eventually arrived, the same bus with the same driver as earlier, who failed to give me a strange look. Oh well; we got to the station about four miles down the road, where I caught the Light Rail back to downtown Denver.

After hitting Walgreens for some supplies, it was a night off, with free internet access and a hot bath, listening to the latest podcast of NPR’s Wait… Wait… Don’t Tell Me. I’d asked the hotel for a bathtub, and got one, but ended up wishing I hadn’t; it was short, and there was no headroom before the wall behind it, so I couldn’t lay back all the way. There was also a large shiny knob, controlling the plug, that gave me the kind of view of myself that I hope I never have again. Then I took my glasses off, so all I could see in the reflection was a blur of colour; a closer look at my face showed me the colour I would be for the next few days.

A strange sight from Fort Collins, Colorado, on my walk last Saturday. I didn’t go inside the “Bible Superstore”, out of respect… who am I kidding? I didn’t go in because I knew I’d be at risk of falling down laughing, and making a fool of myself. How could there be such a thing as a Bible Superstore? I can just imagine the layout:

• Aisle 1: Bibles
• Aisle 2: Bibles
• …
• Aisle 7: Bibles
• Aisle 8: Bibles
• Aisle 9: Bible Study
• Aisle 10: School Books (Intelligent Design)

On Sunday I moved to Denver from Fort Collins, and on Monday I took a flying visit to Colorado Springs by Greyhound Bus. From the bus station I grabbed a cab to my company’s offices; the cabbie looked like Jerry Garcia, and we got talking about Colorado Springs, since it was my first time there. When I asked about Springs’ reputation as a very Christian town, with churches visible everywhere, it was like setting a fire under him. He was what you can call a pantheist, meaning he had a general belief in a “universal power”, but he’d given up on organized religion many years before that. The recent scandals in the town, involving Ted Haggard of the 14,000-strong New Life Church, had made world headlines (such as CNN), and to the cabbie this was just the latest confirmation of his opinion that organized religion is morally bankrupt.

I spent the day with my North American counterparts and their manager, who are about the only people left in a cavernous office floor. Cubicle after cubicle of beige and brown, desks gathering dust, chairs upended, the carpet in the aisles grubby and faded. It was a beautiful day outside, so we all walked down the hill to a barbecue joint, where I had another huge but tasteless sandwich. (If the bread, meat and cheese have no taste, no volume of condiments can make a great sandwich!)

My presence seemed to bring out the worst in my colleagues, in a good way - if that makes any sense. They had a new face to pour out their troubles to, all the while keeping up a brave sense of humour that would not be out of place in a Dilbert cartoon. I got even more of the same from their manager, who took me back in to central Colorado Springs and joined me for dinner and a beer. (I had a nicely microbrewed oatmeal stout and a huge “Chicken Gringo” concoction, with cornbread and potato wedges, that I couldn’t finish.)

As I Twittered in from the bus station, on the way back to Denver: it was one of those days that confirms your suspicions and fears. My US colleagues feel just as threatened as we in Europe do, and as isolated and frozen out of the “career path” in my company. For most of the day I was just someone to talk to, a role I’m happy to play if it helps, and this time I’m sure it did. The manager treated me as an equal, and clearly needed someone to help him make some sense of what is going on.

My qualms about the my employer’s plans seem to be well-justified. I am not going mad, and neither are those colleagues of mine with similar concerns. I can’t really say any more, but what I can say is that there are changes coming my way this year. I’ve learned things I might not be supposed to know, but the effect will be to give me more time to prepare.

The last couple of days in Denver were a mix of gonzo walks and lazing around in my nice hotel room. I will say some more later, but right now I have an ice hockey game to go to, so I need to get my skates on.

Back at the Fort Collins hotel, my room is one of the “accessible” ones, meaning there are handrails in the bathroom and plenty of floor space to wheel a chair around. Not the biggest I’ve ever had - that harks back to the 2-bedroom condo I had to myself in Bangalore - but pretty big, and with free broadband internet access.

The week is over, and so is the work, even the breakfast meeting in the morning is just social. More work on Monday, in Colorado Springs, but until then I have a weekend to look forward to, and to kick it off, have some chillout music courtesy of YouTube and one of my favourite musicians: Michael Manring’s live performance of his solo composition The Enormous Room.

A little explanation for those interested: the instrument Michael is playing is the Zon Hyperbass, an electric bass with some unusual features. It has retuning levers on each string - four on the headstock and two on the bridge - which Michael is activating at times to give that “pedal steel” effect. For that to work well the strings have to be light; for that to sound good and offer stable tuning, the bass is made with an extremely rigid carbon fibre neck. Not cheap, as you might imagine, but extremely effective in the right hands - as the video amply demonstrates.

We’re not in Kansas, Toto. We’re in Colorado. It’s been quite a day, perhaps the most surreal I’ve had in the USA to date. It started out simply enough, with a copy of USA Today, and local TV, then the short trip to the office, where the course is being held. The attendees are mostly American, with a couple of Europeans and Indians. The trainer, as is to be expected, is Scottish.

Breakfast is served in the training room, which is a nice surprise in itself, but today was my first encounter with the legendary Breakfast Burrito, something I could easily become accustomed to. After a Sushi lunch, a real surprise: an unveiling of a new motorbike, built by Orange County Choppers for my company. No, I didn’t get to ride the bike, but seeing the bike and the stars of the show definitely let me know I was in America.

Now I’m back from dinner with the rest of the people on the course, with conversation covering just about all levels of technology from the high - computers and storage - to the lowest - cars and beer. My final course of the day? Apple Pie, of course. It doesn’t get more American than that, does it?

Earlier this evening I set out to pack for my US trip; five minutes later I was finished. The case isn’t closed, since I want to air some shirts out overnight, but compared to my Bangalore safari last year I’m traveling light. I thought I might have to check one bag in the hold, thanks to security restrictions at Heathrow, but it’s all going to fit in my small case, and will be carried on board. If I buy anything in Denver I may need to check the bag on the way back, but a baggage screwup then will be far less of a pain to deal with - since I’ll be home.

One book for the plane there: an old copy of Carl Sagan’s Contact I picked up at a book sale, which I’ve been meaning to re-read for years. If the British Airways on board entertainment guide is accurate, there will be just one movie I care to see on the way to Denver (Casino Royale), but four on the way back, including Oscar winner The Departed and mockumentary For Your Consideration - so the book only has to get me there. Off the plane, I have e-books on my phone for slack times, and plenty of work on the Tablet PC, which I can even bring out on the plane if needed.

No camera: I may buy one in Denver if I find the one I’m after, or a tiny compact at a good price. Toothpaste and deo in the clear plastic bag in my jacket pocket, ready for inspection, Tablet PC in its ZeroShock slipcase (which I’ve never been asked to open).

No malaria tablets or mosquito killers; no Cat-5 Ethernet cables - either I go wireless or I borrow one. I’ll need to buy a US adapter for my laptop power cable - or buy a new cable. Then there’s Denver, the Mile-High city with the Rockies on the horizon. Plenty to see and do, assuming the Homeland Security Theater Company lets me put my feet down. I may even get to see an ice hockey game, when Calgary pay a visit on Wednesday week.

In short, I may actually enjoy this trip. I didn’t want to go, but since I am going, I’m determined to make the best of it. The flights and half the accommodation are on expenses, but the rest is on me. Unlike the Accidental Tourist I won’t be wearing a charcoal grey suit; the only funeral I could possibly attend would be my own, and someone else can supply the suit for that eventuality.

Hurricane Katrina hit Dublin yesterday, a faint shadow of her former self, a mere series of rainshowers, preceded by 100% humidity that kept me up half of Saturday night. Hardly compares to the dire situation in Biloxi and New Orleans, does it?

We’ll be hearing about the criminally incompetent handling of the evacuation for the rest of Dubya’s final term, at least. I hesitate to get involved in any further discussion on this; partly because I’ve noticed Americans are a little sensitive about their country, understandably, partly because it might sound like Euro-peonic schadenfreude. We may wryly joke aboutKatrina and the Waves, but anyone familiar with Shakespeare’s Hamlet will be a little concerned at the approach of Opheila next week.

I’ve never visited Los Angeles, only seen it on television and in movies, but I find it amazing how it can be made to look different nearly every time I see it.

We have classic movies like Sunset Boulevard, shot when that road ended in a wilderness dotted with the occasional mansion, or L.A. Confidential, which exposed an even darker side of that halcyon orange-grove era. It seems to me that L.A. doesn’t generally add that much to a movie’s atmosphere, it’s the generic Hollywood backlot, and more memorable American thrillers have been improved by being set elsewhere in America: The French Connection in Chicago, Dirty Harry in San Francisco, Scarface in Miami, and just about all of Scorsese’s output in New York.

That has been changing, and we have seen films make better use of L.A’.s strengths, and I don’t just mean Beverly Hills Cop. I was introduced to the moodier side of L.A. by Heat, Michael Mann’s 1995 thriller that took its protagonists all the way from Venice Boulevard, past the fashionable side of Santa Monica, up through Beverly Hills into the San Fernando Valley; down to the Long Beach docks, with a major shootout at Fifth and Figueroa (downtown), and a final chase from an airport hotel on to the airport itself. Mann’s recent Collateral revisited the same city from different angles, using a different nocturnal palette. Steve Martin’s L.A. Story took a wry look at covered the posh areas, while Speed presented a more coherent daytime L.A. landscape, also passing through LAX, besides turning Sandra Bullock into a “poster girl for public transport” (her words).

If I was to visit L.A., not knowing how to drive, could I get around with public transport and taxis? In L.A., public transport is for losers, apparently, too slow and dirty for the average person, but could it be worse than London’s underground and buses? Looking at a map, the scale of L.A. is deceptive to a Euro-peon such as myself. I’ve been playing with Microsoft MapPoint 2004 to try to make a little sense of it all, and it tells me that the “short drive” from the city center, up the Hollywood Freeway, along Santa Monica Boulevard through Beverly Hills to Santa Monica, is nearly twenty miles long, so walking around, like Michael Douglas in Falling Down, would probably be as smooth and straightforward for me as it was for him.

In other news: today Elvis Presley scored the dubious distinction of having the UK’s 1000th Number One single; it’s telling that it took sales of 30,000 to get to Number One last week, compared to 300,000 back in the late 1960s. BMG, who owns the rights to the Presley catalogue, is making some kind of point by re-releasing one Elvis #1 single a week, for the next few months. I think it’s called milking a dead horse, or something. Blah.

I’m watching an interesting Discovery Channel documentary on the Pentagon. From the day that the War Department decided it was required, until construction started, took just over 2 months, an incredibly short approval process. Construction started on September 11, 1941, exactly 60 years before terrorists knocked a chunk out of one side, and there used to be a cafe in the central courtyard nicknamed “Ground Zero”.

Most of its systems are in need of major renovation after 60 years: to quote the chief renovation engineer: “whatever building ordinance you name, we’re not in compliance with it.” The section that was hit on September 11 2001 had been renovated, and some estimates suggest that the structural improvements saved over 4000 lives, both in the crash itself, and by the fact that the strengthened surrounding structure stayed in one piece long enough - 45 minutes - for people to get out.

My internal clock is still out of whack, resisting any attempts to wind it back, and I woke up at 2PM this afternoon. I’m going to try to “wrap around” this weekend, staying up tonight till as late tomorrow as possible, at least 2PM, preferably 6PM. More coffee, please…

Oh, bloody hell. I shouldn’t watch shows like E.R. Tonight they showed the first episode of the new series, the one where the whole hospital is evacuated due to a suspected Smallpox outbreak, several quarantined staff go stir-crazy, and a senior doctor gets his arm chopped off by a helicopter tail rotor and then re-attached. We follow one of the former doctors, now working in her native England, who decides to return to Chicago, but takes the wrong train. Unless American film crews think that one gets from central London to Heathrow by taking a Great North Eastern train from St. Pancras, that is?

I mean, I’ve only been to New York once, but even before that I knew the difference between Penn St. and Grand Central, and that you get to Newark airport via the Port Authority bus terminal, and to JFK using the Subway out to Queens. No, American film companies just don’t get London - see Sliding Doors for another example. Better yet, don’t.