Some interesting results in a new study into how people behave in the presence of money. The gist: When money is visible and supervision intermittent, people change their participation for the worst in a hurry.

The Abundance Effect: Unethical Behavior in the Presence of Wealth

Abstract:    
Three laboratory studies investigate the hypothesis that the presence of wealth may influence people's propensity to engage in unethical behavior. In the experiments, participants are given the opportunity to cheat by overstating their performance or by stealing money. In each study, one group is stimulated by the visible proximity of wealth. We find that the presence of abundant wealth leads to more frequent cheating than an environment of scarcity. Our third experiment also investigates the potential mechanisms behind this effect. Our results show that feelings of envy towards wealthy others lead to unethical behavior. Our findings offer insights into when and why people engage in unethical behavior.

More here.

Anyone who has ever worked on a trading floor won't be surprised. Part of the cause of rogue traders is abundant visible wealth, and only on-again, off-again supervision.

First Apple 3G iPhone teardown has been done already. Someone flew to New Zealand to do it ... tomorrow, sort of.

More here.

This is staggeringly typical stuff in one homeowner's home equity line of credit abuses related to a now foreclosed SoCal home:

• On 1/8/2004 the property was purchased for $465,000 with a $372,000 first mortgage, a $46,500 second mortgage and a $46,500 downpayment.
• On 3/11/2004 the owners opened a HELOC for $92,000 and withdrew all their downpayment plus another $45,500.
• On 9/20/2004 they refinanced with a $552,000 first mortgage. 
• On 8/16/2005 they opened a HELOC for $38,000.
• On 12/8/2005 they opened a HELOC for $150,000.
• On 6/8/2006 they refinanced with an Option ARM for $650,000 and a second mortgage of $115,000.
• Total property debt of $765,000.
• Total mortgage equity withdrawal of $393,000 over a 2 1/2 year period.

[via IHB]

As I have said before, [Fannie and Freddie] are adequately capitalized, holding capital well in excess of the OFHEO-directed requirement, which exceeds the statutory minimums.

-- Jim Lockhart, OFHEO, July 10/08

I love the expression "adequately capitalized". It's one of those magnificent sweet nothings that regulators and investors say in defense of a credit-troubled company. It is popping up all the time in discussion of the current troubles with mortgage finance cesspools Freddie Mac and Fannie Mae. But what does it really mean?

It is also an expression you can trace through history, right back through the S&L crisis through the wonders of Google News. You'd be amazed at how many companies were adequately capitalized, right before they were not.

Here is a timeline of "adequately capitalized" in the news over the last 28 years. It's goes in and out of vogue at some entertaining times, as you'll see if you click on the figure.

I don't know if it's the $5/gallon gas prices, but freeway life here in southern California has become more surreal of late. Granted, traffic volumes are down, at least a little, so freeways are no longer in that perpetual state of criticality where a butterfly crossing through the 3 lane causes a 4-mile backup.

But that said, stranger things are going on. Yesterday I saw no less than three warnings about people walking on the I-5 freeway -- which is a 10-lane high-speed monstrosity -- and just now I saw this in a live CHP incident report near me here in La Jolla:

Incident:     0912    Type:    Traffic Hazard    Location:    SB I5 AT LA JOLLA VILLAGE
info as of:    7/10/2008 8:21:01 PM

ADDITIONAL DETAILS
7:57PM    MAN A RIDING BIKE IN THE FAST LANE

Someone is bicycling in the dark in the fast lane of a freeway? Dear God, people. I know gas prices are high, but this is getting deranged.