…Taxpayers Pay for Bailed-Out Company Party, Why Pen and Pencil Trump Computer as Creativity Booster, Physics in Space and MORE.

Stability to Depend on Financial Engineering
Neel Kashkari, Assistant Secretary of the Treasury for International Economics and Development, was designated as the Interim Assistant Secretary of the Treasury for Financial Stability on Monday. Basically, his job will be to oversee the $700 billion financial bailout.

“In his new job,” as NPR puts it, “Kashkari will be doing financial engineering. If successful, he’ll design an auction system so the government can buy some very complex assets at the right price — high enough to infuse money back into banks, but not so high that it bilks taxpayers.”

Although he’s only six years out of business school — he’s 35-years-old — Kashkari has worked as a vice president for Goldman Sachs. And as an aerospace engineer on NASA space missions such as the James Webb Space Telescope, the successor to the Hubble Telescope.

It might just take a rocket scientist to fix this economy.

(If you’re still unclear about how we got into the subprime mess, click HERE for a basic but clever PowerPoint presentation using stick figures and swear words.)

The Party is Over. But Not Really
“We’ve now entered a new stage of the financial crisis: the ritual assigning of blame,” Slate on Tuesday acknowledged. “It began in earnest with Monday’s congressional roasting of Lehman Bros. CEO Richard Fuld… .”

It continued on Tuesday, when the Committee on Oversight and Government Reform explored the causes and effects of the American International Group (AIG) bailout. At the hearing, the Committee discovered that shortly after the government spent $85 billion bailing out AIG, executives went on a week-long retreat at a luxury resort, spending $443,343.71.

Rep. Elijah Cummings (D-Md.) on the expenditures:

Have you heard of anything more outrageous — a week after taxpayers commit $85 billion dollars to rescue AIG, the company’s leading insurance executives spend hundreds of thousands of dollars at one of the most exclusive reports in the nation…Let me describe for some of you the charges that the shareholders, taxpayers, had to pay. Check this out: AIG spent $200,000 dollars for hotel rooms. And almost $150,000 for catered banquets. Listen to this one: AIG spent $23,000 at the hotel spa and another $1,400 at the salon. They were getting manicures, facials, pedicures and massages while American people were footing the bill. And they spent another $10,000 dollars for I-don’t-know-what-this-is — leisure dining. Bars?

Oversight Committee Chairman Henry A. Waxman (D-Calif.) asked at the hearing that a letter to Secretary Henry Paulson about these expenditures be inserted into the record. Included in the letter:

The company spent nearly half a million dollars in a single week at this resort, including thousands of dollars on catered banquets, golf outings, and visits to the resort’s spa and salon. The hearing also revealed that AIG continues to pay one million dollars a month to an official who helped bring about the company’s downfall.

The official is the former president of AIG’s Financial Products division, the unit that sold the credit default swaps that caused billions in losses for the former financial giant. Although the former executive resigned in March, AIG has “inexplicably decided to pay” him up to $34 million in unvested bonuses, the letter states. “Even today,” the letter says, “it is continuing to employ him as a ‘consultant’ for one million dollars a month.”

Nice the way these people take care of one another.

Then, this week, the Federal Reserve agreed to provide AIG with a loan of up to $38 billion, on top of the one made to the company last month. It’s “less risky” to taxpayers because it is linked to the regulated company.

Basically, the insurance giant received $85 billion in taxpayer money; it wasn’t enough; it got an additional $38 billion, yet continues to lavish its executives with payments and perquisites. Up until yesterday, the company planned to hold another gathering for brokers next week, at the Ritz-Carlton in California’s Half Moon Bay, to “motivate and educate” ‘em.

Meanwhile, Steve Ballmer, Microsoft Corp.’s CEO, received a pay package valued at about $1.35 million for fiscal 2008 — a year in which the software maker’s profit climbed 26 percent despite the troubled U.S. economy. A fiscally sound company that actually pays its top executive a wage that isn’t completely batty… Who’d have thought?

New Images of Mercury
On Monday, the Messenger spacecraft successfully completed its second flyby of Mercury. The next day, the images taken during the encounter began to be received back on Earth. The image shown here is one of the first to be returned and was taken when the probe was 27,000 km (17,000 miles) from Mercury, about 90 minutes after the spacecraft’s closest approach to the planet.

Most of this is territory never seen before in this detail.

Credit: NASA/Johns Hopkins University Applied Physics Laboratory/Carnegie Institution of Washington

Pen and Pencil Trump Computer as Creativity Booster
Dutch psychologist Christof van Nimwegen recently completed a Ph.D. dissertation at the University of Utrecht about the effects of software on the functioning of the human brain, for which he asked two groups to perform the same tasks; one group was allowed use a computer and the other group only got a pen and pencil.

“The second group executed all tasks faster and performed substantially better. In addition, their solutions to complicated problems were more creative,” Independent Online reports. “The group that used a computer throughout felt lost instantly and immediately performed badly when completing the task,” Van Nimwegen said. “The second group, who has used only pen and pencil, simply carried on with its work.”

The Dutch researchers said this difference can be explained from the setup of today’s software, much of which “turns us into passive beings, subjected to the whims of computers, randomly clicking on icons and menu options. In the long run, this hinders our creativity and memory,” he says.

Boomerang in Zero Gravity
Japanese astronaut Takao Doi proves that a boomerang always returns to the thrower — even in outer space.

Cheers.