Tuesday, March 31, 2009

Sunday, March 29, 2009

Massively Scammed


Zero Hedge is rarely speechless, but after receiving this email from a correlation desk trader, we simply had to hold a moment of silence for the phenomenal scam that continues unabated in the financial markets, and now has the full oversight and blessing of the U.S. government, which in turns keeps on duping U.S. taxpayers into believing everything is good.

I present the insider perspective of trader Lou (who wishes to remain anonymous) in its entirety:

[e-mail excerpted]

For those to whom this is merely a lot of mumbo-jumbo, let me explain in layman's terms:

AIG, knowing it would need to ask for much more capital from the Treasury imminently, decided to throw in the towel, and gifted major bank counter-parties with trades which were egregiously profitable to the banks, and even more egregiously money losing to the U.S. taxpayers, who had to dump more and more cash into AIG, without having the U.S. Treasury Secretary Tim Geithner disclose the real extent of this, for lack of a better word, fraudulent scam.

In simple terms think of it as an auto dealer, which knows that U.S. taxpayers will provide for an infinite amount of money to fund its ongoing sales of horrendous vehicles (think Pontiac Azteks): the company decides to sell all the cars currently in contract, to lessors at far below the amortized market value, thereby generating huge profits for these lessors, as these turn around and sell the cars at a major profit, funded exclusively by U.S. taxpayers (readers should feel free to provide more gripping allegories).

What this all means is that the statements by major banks, i.e. JPM, Citi, and BofA, regarding abnormal profitability in January and February were true, however these profits were 1) one-time in nature due to wholesale unwinds of AIG portfolios, 2) entirely at the expense of AIG, and thus taxpayers, 3) executed with Tim Geithner's (and thus the administration's) full knowledge and intent, 4) were basically a transfer of money from taxpayers to banks (in yet another form) using AIG as an intermediary.

For banks to proclaim their profitability in January and February is about as close to criminal hypocrisy as is possible.
And again, the taxpayers fund this "one time profit", which causes a market rally, thus allowing the banks to promptly turn around and start selling more expensive equity (soon coming to a prospectus near you), also funded by taxpayers' money flows into the market. If the administration is truly aware of all these events (and if Zero Hedge knows about it, it is safe to say Tim Geithner also got the memo), then the potential fallout would be staggering once this information makes the light of day.

Now, This Is Surprising

The LA Times puts in a good word for Limbaugh, and also points out that the vast majority who reject him have never even really heard him. Instead, they just obey their liberal masters like trained dogs.


Saturday, March 28, 2009

I'd Love To Turn You On

Just stumbled across the videos of an impersonator named Stevie Riks. Check out his HD video version of "A Day In The Life". Bravo!

Be sure to select HD on the video's control bar.

See also.

Friday, March 27, 2009

Another Cool Way To Embed Flickr Photos

Just found a thing called Darckr. Here are my most recent photos in an embedded scrollable array of hyperlinked thumbnails (more load as you scroll down and mouse over the empty space, or alternatively use the scroll wheel):


And here is an example of the kind of stuff you can do in a full browser window (pretty darned cool):





Any Questions?

From a comment here:

Oh goody. Abortionists are back. In keeping with the spirit of the article, let me explain the difference between abortion and adjudicated execution.

Both practices kill human beings. This is the similarity between the two. Now that we have gotten that out of the way, let's explore the differences, shall we. In the case of legal execution, the party being executed has committed a heinous crime against the body of society. He has proven himself to be a patent danger to other members of society and, in some cases, even to society itself. He has proven himself to be such a threat that his re-entry into society is unthinkable to a rational human being. This is the point where people invariably bring up the internment for life option. That would be valid, if the perpetual incarceration of the heinous criminal could be guaranteed. Unfortunately, it can not. Therefore, in order to guarantee that the heinous criminal can not re-enter society, either by escape or some type of judicial fiat, society resorts to execution of the individual to safeguard the rest of her citizens. I know, here comes the argument of "What if the society makes a mistake and the individual is innocent?" Well, in the first place. The condemned criminal is afforded a decade, or more, of legal appeals in which to prove his innocence and have his conviction set aside. But, the bottom line is if humanity and its constructs [society] were perfect, then we wouldn't have criminals and we wouldn't be having this discussion. Because of this lack of perfection, execution should be, and now is, reserved for those persons who have demonstrated their callous disregard for human life and through that their extreme danger to society.

Now, abortion. Those opposed to abortion hold a very simple belief. That is the belief that human life begins at conception, not at birth. Strangely, this is a belief that is apparently held by a majority of the states and the Federal government, as it has been legislatively deemed a homicide if a fetus as young as seven weeks is killed through criminal action. So if a fetus is a human being and a heinous mass murderer is a human being and your mother is a human being , why can't we just kill any of them at will? Because, the mass murderer is a demonstrable threat to society. Mom and the fetus are not. The mass murderer gets numerous opportunities to prove that he is, in fact, innocent of the crime. Yet, the harmless unborn individual has no such opportunity. With absolutely no judicial review, no appeals of sentence, in fact no crime, the unborn individual is killed out of hand; for convenience, by its mother.

Now, it is interesting to note that many people who oppose the death penalty support abortion. Why? Usually because, in their opinion, human life begins at birth, not conception. The question here is, what if they are wrong? Tens of millions of unborn children have been legally killed in the U.S alone, by their mothers, since the decision in Roe v. Wade. In the same time only a little over one hundred convicted murderers have been executed. All of the aborted human beings were innocent, while most, if not all, of the criminals were not.

Don't see a difference here? Look a little closer.

Thursday, March 26, 2009


Flickriver badge:

beetle67 - View my most interesting photos on Flickriver


According to liberals:

E.J. Dionne, a liberal's liberal and often a leading indicator of the liberal line, twists himself into a pretzel defending President Obama's plan to tax charitable deductions. Here is his indictment of the unfairness of it all under the current tax structure (update* - logic taken from President Obama's p;ress conference:

Obama's proposal is based on a sound intuition: Do we really believe it's fair that when a married couple with a taxable income of $50,000 gives $1,000 to charity, they get a tax benefit of $150, while a couple earning $1 million making exactly the same contribution gets back $350? Is it fair that the higher-income couple also gets a bigger tax advantage on their mortgage payments?

The value of the deductions is currently worth more to the higher-income couple because they pay taxes at a higher rate. Obama wouldn't even close the whole gap. Applied to this example, his 28 percent cap would still let the wealthier couple deduct $280.

Note that if Obama merely raised income tax rates on the highly-taxed rich couple, it would get more unfair -- to the low-taxed couple. Hence the need to add even more taxes on the rich couple. reducing their deduction.

One cynical definition of an intellectual is a person willing to believe something preposterous and congratulate himself on his sophistication.

Update: I missed Obama's mentioning of this logic. To be honest, I couldn't watch the whole thing for boredom, so took some breaks.

Feeling Scammed Yet?


That Didn't Take Long (Gaming PPIP)

I told you so.....

The huge subsidy to banks hidden inside of Tim Geithner's public-private partnership program may already be leading banks to load up on securities they plan to sell at inflated prices.

According to the New York Post, Citi and Bank of America have been aggressively buying up Alt-A and ARM mortgage backed securities, sometimes paying more than the going rate of around 30 cents on the dollar.


Recently, securities rated AAA have changed hands for roughly 30 cents on the dollar, and most of the buyers have been hedge funds acting opportunistically on a bet that prices will rise over time. However, sources said Citi and BofA have trumped those bids.

There's nothing complicated about this at all.

Buy for 30 cents, sell to the PPIP for 50 cents, pocket a quick (and huge) profit immediately and nobody's the wiser.

Oops - now someone is the wiser.

Oh darn.

The reason ALT-A (liar loans) and Option ARM securities are trading at 20-30 cents on the dollar is that nearly all of those "loans" were either made to someone who lied about their income, couldn't afford the reset/recast payment and is underwater on their house (and thus can't refinance), or both.

When those loans default (and most of them eventually will, even if they're paying now) recovery is extraordinarily poor; 30 cents is likely just about right.

Wednesday, March 25, 2009

Are We Not All, In Truth, Merely Waiting To Be Picked Up From A Cosmic Lost Baggage Office?

Great parody. Seen here:

Prague's Franz Kafka International Named World's Most Alienating Airport

Atlas Shrugging

Mark Steyn:


This resignation letter from an AIG exec is worth reading:

I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down...

The only real motivation that anyone at A.I.G.-F.P. now has is fear. Mr. Cuomo has threatened to “name and shame,” and his counterpart in Connecticut, Richard Blumenthal, has made similar threats — even though attorneys general are supposed to stand for due process, to conduct trials in courts and not the press...

I’m not sure how you will greet my resignation, but at least Attorney General Blumenthal should be relieved that I’ll leave under my own power and will not need to be “shoved out the door.”

I wonder if Senator Grassley (Republican, of course) is pleased that AIG honchos are now doing as instructed and falling on their swords. As I said a few days ago, if you own even modest assets (a small house, a savings account) and you think that in a battle between the political class and the business class it's in your interest for the latter to lose, you're a fool who entirely deserves the vaporization of his wealth on which Barney Frank & Co have embarked.

Likewise, watching a couple of dozen ACORN activists pretending to be indignant citizens leading a ton of news reporters willingly colluding in the fraud around suburban avenues in Connecticut, a talented executive would have to be completely desperate to offer his services to any entity bailed out by the government.

We have a president who shows no instinct for economic issues; a Treasury Department that, in a supposed crisis, is just one designated fall guy rattling around an all but empty building for whose senior positions no one has even been nominated; and thug legislators-for-life who bear far more direct responsibility for this mess posing as champions of da liddle guy in order to extend their already disastrous "oversight" ever deeper into the private sector. Things are going to get a lot worse.

But don't worry: If AIG throws their departing exec a leaving party, Congress will pass a bill deeming any such event a 97 percent taxable benefit.

In Addition To All His Other Problems, Barney Frank Is Apparently Illiterate

Or a bearer of false witness against Scalia. Althouse has details.

No Teleprompter Here

Now this is oratory. We as a nation do not remember what oratory is. Seen here.

And I Thought They Were Against Accusing Others Of Having Wicked Psychosexual Disorders

Guess it was just projection. Barney Frank plays the "homophobe" card against Antonin Scalia. Ed Whelan comments:

Barney Frank’s attack on Justice Scalia as a “homophobe” is inane at several levels:

First, the term “homophobe” is an ugly epithet designed to stigmatize (“he’s the sicko”) those who don’t embrace the homosexual agenda. It’s intended to cut off serious discussion, not to promote it. It doesn’t belong in public discourse.

Second, Frank uses his epithet in the course of expressing his concern that a Supreme Court that includes Scalia might not strike down the federal Defense of Marriage Act. The Defense of Marriage Act was approved by overwhelming majorities in each House of Congress (85-14 in the Senate, 342-67 in the House) in 1996 and signed into law by President Clinton. Senators in favor of DOMA included Biden, Bradley, Daschle, Kohl, Leahy, Levin, Lieberman, Mikulski, Murray, Reid, Sarbanes, and Wellstone. Millions and millions of voters in state after state have acted to preserve traditional marriage. Does Frank regard all these Americans as “homophobes”?

Third, Scalia’s position is clear: The Constitution does not address the matter of same-sex marriage. Therefore, the political processes are free to decide whether or not to adopt it. He, as a justice, will defer to the political processes, whatever the result. In other words, on this matter as on so many more, Scalia will not indulge his own policy preferences (whatever they are) and will not write those preferences into the Constitution. Frank wants liberal activist justices who will indulge his and the Left’s own policy preferences on homosexual matters (and so much more). That’s his real beef with Scalia, and he’s masquerading it under the “homophobe” label.

I’ll leave to others whether Frank’s name-calling is a tactic designed to distract attention from his role in causing the ongoing financial crisis.

Tuesday, March 24, 2009

Mathematics Of The Scam


Let’s flesh this out by repeating it 100 times. So say a bank has 100 of these $100 loan pools. And just by way of example, suppose half of them are actually worth $100 and half of them are actually worth zero, and nobody knows which are which. (These numbers are made up but the principle is sound. Nobody knows what the assets are really worth because it depends on future events, like who actually defaults on their mortgages.)

Thus, on average the pools are worth $50 each and the true value of all 100 pools is $5000.

The FDIC provides 6:1 leverage to purchase each pool, and some investor (e.g., a private equity firm) takes them up on it, bidding $84 apiece. Between the FDIC leverage and the Treasury matching funds, the private equity firm thus offers $8400 for all 100 pools but only puts in $600 of its own money.

Half of the pools wind up worthless, so the investor loses $300 total on those. But the other half wind up worth $100 each for a $16 profit. $16 times 50 pools equals $800 total profit which is split 1:1 with the Treasury. So the investor gains $400 on these winning pools. A $400 gain plus a $300 loss equals a $100 net gain, so the investor risked $600 to make $100, a tidy 16.7% return.

The bank unloaded assets worth $5000 for $8400. So the private investor gained $100, the Treasury gained $100, and the bank gained $3400. Somebody must therefore have lost $3600…

…and that would be the FDIC, who was so foolish as to offer 6:1 leverage to purchase assets with a 50% chance of being worthless. But no worries. As long as the FDIC has more expertise in evaluating the risk of toxic assets than the entire private equity and banking worlds combined, there is no way they could be taken to the cleaners like this. What could possibly go wrong?

Oh, and incidentally, now that the bank has a "cleaner" balance sheet, its stock can then go up by a factor of five or ten, further wiping out any "losses" taken by private finance. So it's win-win for everybody!

The Geithner plan, if implemented in any honest way, would result in exactly the price discovery that the banks have been seeking to avoid, price discovery which would reveal insolvency. Therefore, the bottom line is this: If the plan is honest, it cannot work. If the plan works, it cannot have been honest.


Seen in a Calculated Risk comment thread:

OK here is my analogy of the latest Geithner plan.

Picture a car full of screaming people shooting off a cliff, plunging to their death.

Now freeze frame.

Back up the film until the car is still a few feet from going off the edge of the cliff.

Now a guy in a nice three piece suit walks into the frozen frame of car, people screaming, etc. He opens the doors one at a time and goes thru everyone's purse, pockets, wallets, taking all their money, closes the doors, and walks out of the frame counting the money.

OK, now roll film.

Core Incompetencies



Well done:

H/T Brutally Honest.

Monday, March 23, 2009

Five Misconceptions

Good summary of the misconceptions concerning the financial situation and why Geithner's scam will not address the real (and unavoidable) problem.





The Demands Are Non Negotiable

Good parody.

Worth A Trillion Words


I Have This Dream All The Time

Only it involves somehow never remembering to show up for advanced calculus and Spanish, and then remembering just in time for finals that, in fact, I had been enrolled in those classes and am now screwed. But the F's are okay, because I never really wanted to be back in college again anyway.


"The MSM Should Resign Over Obama's Failure"

Good stuff.

It begins:

According to Politico and PJM’s own Jennifer Rubin, barely two months after the inauguration, the mainstream media has its proverbial knickers in a twist over Obama’s ineptitude in office. Even Thomas Friedman - that most conventional of all purveyors of the conventional (except David Gergen - and he’s been straying off the reservation too) - is now complaining the onetime Messiah is not taking the financial crisis seriously enough, “getting in trouble cracking jokes on Jay Leno comparing his bowling skills to a Special Olympian.” Meanwhile, CNN is appalled the President pushed through a skillion page skillion dollar stimulus bill no one seems to have read.

Hello, children, you elected this guy. Take some responsibility!

No, don’t go complaining the people did that. You did it. Obama is your man, your hero. You never vetted, never examined him in any depth at all, even though the candidate had hardly any experience other than running for office. (Oh, yes, he was a “community organizer.” So was I, in a sense. You want to elect me?)

So now we are going to hear that Timothy Geithner or Press Secretary Gibbs or whoever should be thrown under the bus. No, sorry, it is the MSM that should be going under that now overused vehicle, committing hari-kari before the public does what it should - disenfranchise them completely. [Must be getting pretty crowded under that bus.-ed. Like the stateroom scene from "Night at the Opera."] The election of Barack Obama was orchestrated by our mainstream media. They anointed him. They should suffer the consequences.

Charlie Foxtrot


Private Public Partnership Details Emerging

Yves Smith at Naked Capitalism is sounding concerns about Geithner's Private Public Partnership Details.

If this isn't Newspeak, I don't know what is. Since when is someone who puts 3% of total funds and gets 20% of the equity a "partner"?

And notice the utter dishonesty: a competitive bidding process will protect taxpayers. Huh? A competitive bidding process will elicit a higher price which is BAD for taxpayers!

Dear God, the Administration really thinks the public is full of idiots. But there are so many components to the program, and a lot of moving parts in each, they no doubt expect everyone's eyes to glaze over.

Zombies Win

I seldom agree with Paul Krugman. Yet I am essentially in agreement with Krugman on Geithner's bailout plan.

Krugman is in Despair over financial policy.

The Geithner plan has now been leaked in detail. It’s exactly the plan that was widely analyzed — and found wanting — a couple of weeks ago. The zombie ideas have won.

The Obama administration is now completely wedded to the idea that there’s nothing fundamentally wrong with the financial system — that what we’re facing is the equivalent of a run on an essentially sound bank. As Tim Duy put it, there are no bad assets, only misunderstood assets. And if we get investors to understand that toxic waste is really, truly worth much more than anyone is willing to pay for it, all our problems will be solved.

Krugman Followup

More on the Geithners' bank plan.

Why was I so quick to condemn the Geithner plan? Because it’s not new; it’s just another version of an idea that keeps coming up and keeps being refuted. It’s basically a thinly disguised version of the same plan Henry Paulson announced way back in September.

Why am I so vehement about this? Because I’m afraid that this will be the administration’s only shot — that if the first bank plan is an abject failure, it won’t have the political capital for a second. So it’s just horrifying that Obama — and yes, the buck stops there — has decided to base his financial plan on the fantasy that a bit of financial hocus-pocus will turn the clock back to 2006.

Bear in mind I am not exactly a proponent of the "Swedish Solution", rather I am favor of letting failed banks fail. Nonetheless, Krugman is absolutely correct when it comes to the heart of this story: Geithner's plan is sheer hocus-pocus idiocy.

Sunday, March 22, 2009

Monumental Scam

The Geithner plan:

Yesterday I wrote about the outrageous bank bailout plan that Treasury Secretary Tim Geithner will propose to Congress. As the details of the plan continue to be analyzed by folks that enjoy dissecting legislation like this it is becoming more evident that taxpayers are going to pay a heavy price for the Obama administration's scheme.

In pushing their proposal, the Obama administration is anticipating that voter's eyes will glaze over as they attempt to wade through the arcane financial language in the legislation. Fortunately the blogosphere is providing some clarity on this important policy by reducing the complex proposals to a style Hemingway (and the rest of us) would appreciate.

Tyler Durden, the pseudonymous blogger at Zero Hedge, has broken down the public/private component of Geithner's plan and revealed it to be something everyone can recognize: a bait and switch game.

The greatest bait and switch of this generation in all its visual splendor. As a result of the TALF's non-recourse nature, a hedge fund X can buy Bank X's MBS Portfolio which is marked on the bank's books at 80 cents on the dollar (but has a market price of 20 cents) for the marked price with a 3% equity check and TALF filling the balance. A day later, Bank X repurchases the portfolio from hedge fund X at the 20 cent market price, pays a $5 million fee for the "trouble" and waits for the portfolio to appreciate to 50 cents on the dollar by 2014. Hedge fund X takes a 75% loss on its nominal equity stake but more than makes up in transaction fees. The TALF portion takes a 75% loss with no recourse and no margin to fall back on.

As a result Bank X takes no writedown now, and in 5 years may book an equity profit of as much as $25 million (net of transaction fees paid to the Hedge Fund X), while Hedge Fund X books a profit of $3.2 million for one day's work...

In short, just one aspect of the Obama/Geithner plan may cost taxpayers over $700 billion dollars, not counting the eventual cost of the moral hazard this policy will create by allowing the banks and funds (and their stockholders and bondholders) to remain out of bankruptcy or receivership. By giving these parties a free pass on the ugly consequences of their actions the administration (and Congress, if they allow it) is almost guaranteeing that this mistake will be repeated. As I have noted before, and as the linked article makes clear, hedge funds that overwhelmingly supported Democrats and Barrack Obama in 2008 are going to make a killing on this administration's proposal. It is without question the Greatest Heist in History.

Killing Productive Investment

Antal Fekete:

Actually, as I have suggested in several earlier articles, 'serial cutting of interest rates' is a misnomer. The correct phrase is 'serial halving of interest rates'. The nuance is important. Serial cutting comes to an end when you have cut it to the bare bones: all the way back to zero. Not so serial halving that can be fine-tuned like water-torture. It can continue indefinitely, while each halving causes the same devastation in the economic landscape as it doubles the liquidation value of total debt.


Why should we worry about a monetary policy that depends on risk-free profits offered to speculators betting on higher bond values? Because it reflects the utter corruption of the profit-and-loss system on which capitalist production is based. It makes the businessman appear foolish who takes risks in the producing sector while trying to satisfy the needs of the consumers - when risk-free profits are available in the financial sector. As a matter of fact, the risk-free profits of the bond bulls do not come out of nowhere. They come right out of the capital accounts of the producers. These gains are the flipside of the capital losses suffered by the real risk-takers, the sitting ducks in this shoot-out.

I have been in a minority of one in my quest to inform the public about the single cause of the present economic disaster. In fact I have been predicting it for the past eight years. The single cause is the Fed's deliberate policy to drive down interest rates through serial halving. This policy is animated by the economic theories of John Maynard Keynes, according to which interest ought to be abolished so that the stone can be turned into bread and water into wine. The miracle is worked by a central bank well-equipped with printing presses and a factory to produce green cheese in unlimited quantities, to shove it down the throats of savers who are trying to provide for their twilight years, or for the education of their offspring, or just for a rainy day.

Continuing or even accelerating that disastrous monetary policy of unlimited green cheese production will not alleviate the crisis. It will make it worse. Much worse.

Look at it this way. The present contraction of the world economy is not due to a glut in global savings for which businessmen can find no good use, and which consequently has to be mopped up through expanding the balance sheet of the central banks all over the world, as "explained" by Paul Krugman and his friend, mentor, and former boss Ben Bernanke. The contraction is due to the lethargy of businessmen who see their past investments turn sour one after another at each interest-rate cut. Businessmen will not make new investments, no matter how badly central bankers want to force-feed them at the trough of newly created money, as long as the mad driving-down of interest rates continues. Would you buy a car today if you were told that its price will be cut tomorrow? Of course you wouldn't. Well, it is the same with businessmen. They would not make an investment today if they were told that tomorrow they could finance it at a cheaper rate and, the day after tomorrow at a rate cheaper still. It is as simple as that.

[Note: Another factor. Businesses are in fierce competition. This driving down of interest rates creates a situation where the guy who made a major capital investment in years past at higher rates is placed at a competitive disadvantage with the guy making the same investment this year at lower rates. In effect, the first movers, the real innovators, are punished by this artificial manipulation of rates. The best and brightest become the chumps and losers. Great way to grow the wealth.]

Now the Fed is saying that it has got a new toy-grenade to try on the economy: the T-bond purchase plan. Businessmen conclude that this is time to go into hibernation-mode. They just want to survive with their remaining capital intact until this madness runs its full course. They will come back and start investing again in saner times, when interest rates are stabilized at their natural level. Those who listen to the siren song from the Fed and other central banks, and invest at today's teaser-rate will get massacred at the next halving, when even lower teaser rates will be offered.

The Signposts Up Ahead

From a financial piece:

Of late I have received a few e-mails asking me if because of these reinflation efforts whether or not the technicals still matter. The answer is without a doubt, "Yes!" Reason being, it does not matter what drives price. Price can be driven by sound fundamentals or by bogus manipulation. From a technical perspective, we are still looking at price on a chart. In other words, everything is discounted into price, be it good or bad, fact or fiction, reality or hype. The only thing that may change is the interpretation of that chart. If these manipulative efforts are going to matter, then that will be reflected in price in a way that will turn the technical and statistical picture bullish. If these efforts are going to fail, then that too will appropriately be reflected in price. As technicians, all we have to do is interpret the price action as ultimately it all boils down to price and knowing the meaning of that price action is what technical analysis is all about.

Another reason I say these manipulative efforts will ultimately fail is because we are dealing with K-wave winter and K-wave winter is a natural part of a long-term economic cycle that must take place before a new cycle can begin. This cycle, the markets and the economic disaster we are all facing is far bigger than the Fed. For the benefit of newer readers I have again included a few of the signposts surrounding K-wave winter.

"Global Stock Markets Enter Extended Bear Markets"

This should be obvious to all.

"Trends During Winter: Stocks Down, Bonds Up, Commodities Down"

I would say that this is still on track.

"Interest Rates Spike In Early Winter Then Decline Throughout"

In June 2004 the Discount rate was at 2.00%. By June 2006 it was at 6.25% and since August 2007 the Fed has been forced to cut the Discount rate back to .50%. So, this too seems to fit and now the Fed is targeting long-term rates as well.

"Economic Growth Slow or Negative During Much of Winter"

This too should be obvious to all.

"Commercial and Residential Real Estate Prices Fall"

This obviously began back in 2006 and is still in a major slump.

"Bankruptcies Accelerate and High Debt Eliminated by Bankruptcy"

This has obviously begun and is no doubt related to the housing and credit bubbles.

"Social Upheaval and Society Becomes Negative"

We are only just beginning to see this.

"Banking System Shaken and New One Introduced"

The banking system is now only beginning to be shaken. There should be much more to come.

"Free Market System Blamed and Socialist Solutions Offered"

This has not yet happened, but just wait.

"National Fascist Political Tendencies"

More to come.

"Debt Level Very Low After Defaults and Bankruptcy"

This has not happened.

"Trade Conflict Worsen"

This basically has not happened.

"View of the Future at a Low Ebb"

This has not happened as everyone seems to be looking for the bottom.

"New Work Ethics Develop Since Jobs are Scarce"

If I can assure you of one thing it is that this has not happened.

"Greed is Purged from the System"

I can absolutely assure you that this has not happened yet.

"Real Estate Prices Find Bottom"

This has not happened.

"There is a Clean Economic Slate to Build On"

Not happened yet.

"Investors are Very Conservative and Risk Averse"

Again, this has absolutely not occurred.

"Interest Rates and Prices Bottom"

Not happened.

"A New Economy Begins to Emerge"

Has not happened

"Stock Markets Reach Bottom and Begin New Bull Markets"

This is still a long ways away.

So far, these signposts remain on track and ultimately they are telling us that these reinflation efforts will fail and that in the end any bout of inflation that is sparked will ultimately end with the deflationary grind into the K-wave winter low.

Saturday, March 21, 2009


At The Corner:

No laughing matter

In turbulent times, it's good to know some things never change. After a week in which President Obama thanked himself for inviting him to the White House, compared AIG executives to suicide bombers, and did the first Presidential retard joke on national TV, I was impressed to find that Slate is bravely keeping up its Bushism Of The Day feature.

Four more years!

Friday, March 20, 2009

Official Seal

Image Hosted by ImageShack.us

Gotten by way of this post.

What She Said

The Anchoress:

Sigh. One almost gets tired of saying it, but one must say it, still: Can you IMAGINE what the press and the Dems would do with that [the Special Olympics quip], had Bush said it. Can you IMAGINE what the press and the Dems would have done with the Irish PM Teleprompter gaffe (the press has helpfully embargoed the video, so Obama doesn’t have to see it playing 24/7, as Bush would have - had Bush so gaffed). Can you IMAGINE what the press and the Dems would have done if Bush had given the Prime Minister of Great Britain a lousy pack of 50 “Classic” DVD’s that didn’t work in the UK?

Another story the press isn’t actually covering…

Without the help of the press - hiding his mistakes, never asking a tough or uncomfortable question, not even curious enough to ask to see his grades in college - where would this guy be? I’m thinking he wouldn’t be in the Oval Office, right now, that’s for sure.

So, tonight, he gets forty minutes on Leno. Next week he’ll have all four networks ditching programming and losing money for him. Again.

When things get hot, when the polling isn’t going right, when he feels unloved, or he needs to be happy, he gets on his big, expensive-to-run Air Force One, with his limos, etc, and he steps before the camera.

Gonna be a long four years.

President Bush was no cool cat, but he was a master of self-deprecating humor. I give Obama credit for trying it out…but maybe he’d better practice it more! Patterico notes that the press is playing it down. That’s not surprising. It was a failed attempt at humor, and you know what? I’d love to ignore it, I really would. And I’ll start ignoring these Obama gaffes just as soon as the press gives them the same unending coverage they gave to Bush’s. When the double-standards end.

In an email exchange, the point was made that Obama seems to be everything the left projected about Bush. The stumblebum suit being operated from behind. All those projections. You know about projection, right? It is when you take the thing that is inside you; hate, fear, insecurity, malicious motives, etc - and you project it on to someone else. For instance, during the election, I kept getting emails from folks on the left insisting that Bush - the powermongering fascist - would never allow another election to happen.

That’s maybe the projection I worry about, sometimes.


A gay activist has had it with the hatred coming from his own side. Lengthy, interesting, and, at times, exasperating essay.

Thursday, March 19, 2009

Wrong Region. Who Could Have Seen That Coming?

The incompetence is total.

Good point:

ONE MORE THING: Can you imagine the Democrats' reaction if the Bush White House had given a European head of state a set of DVDs that can only be played on North American machines? It would have been conclusive proof of Bush's provincialism, lack of sensitivity to our allies' sensibilities, ignorance of the wider world, techno incompetence, failure to appreciate the superiority of European civilization, blah blah blah. That's how it would have been reported and editorialized on in every newspaper. So let's check tomorrow's papers and see whether that's how Obama's gaffe is covered. Or whether it's covered at all.

Wednesday, March 18, 2009

A Well-Earned Fisking

By Lileks.

Great Analogies

Comparing how the government handled the GSE's to a transportation system in which (due to government "guarantees"):

[P]eople (a) paid no financial penalty for reckless driving, (b) paid little attention to the mechanical quality of the cars they purchased and (c) private insurance companies operated on faulty accident statistics

The exposition of this idea in the post is entertaining.


The post ends:

Without the GSEs, the circumstances of the collapse would have never developed. Fewer of us would have cars and we would pay higher insurance but the cars we did have would be mechanically safer, we would drive them safer and our auto insurance could pay out if we had an accident. Instead, our political impulse to get something for nothing has led us to the financial equivalent of a nationwide pileup of rust heaps driven by meth-crazed teenagers.

Bush Is Such A Moron

Did you see the latest thing he pulled?

Another gaffetastic moment by the clueless Barack Obama.

Irish Prime Minister Brian Cowen was just a few paragraphs into an address in Washington when he realised it all sounded a bit too familiar.

It was. He was repeating the speech President Barack Obama had just read from the same teleprompter.

Mr Cowen stopped, turned to the president and said: "That's your speech."

A laughing Mr Obama returned to the podium to take over but it seems the script had finally been switched and the US president ended up thanking himself for inviting everyone to the party.

Imagine if George W. Bush had such a crutch and pulled a monster gaffe like this. It would be played 24/7 on television until the end of time.

For some strange reason, the networks refuse to release video of this great moment in hilarity.

This reliance on his TelePrompter is just embarrassing.

Mr Obama is an accomplished orator but is becoming known in America as the "teleprompt president" over his reliance on the machine when he gives a speech.

Who considers him a great orator other than his slobbering media sycophants? Any time the man has to utter more than two sentences off script he becomes The Wizard of Uhhhs.

Here he is yesterday with Cowen speaking extemporaneously. Seemingly every other word is uhhh. This is a great orator?

[YouTube embed]

CNN has nearly five minutes of video of the two of them, but apparently is censoring the TelePrompter blunder.

You stay classy, lamestream media.

AP Writer Jeopardizes Career

Brutally Honest has the play-by-play.

Monday, March 16, 2009

Sunday, March 15, 2009

I'm Not Very Pwogwessive

Only got 93/400 on this "how progressive are you" quiz. Of course that probably means that I'm strongly progressive, but just in the opposite direction as leftists, being that "progressive" implies being on the way to somewhere. The average score for Americans is 209.5/400, which, I guess means that they are dead in the water, on the way to nowhere.

Saturday, March 14, 2009

Lileks Fisks Etzioni




Denninger does an A-plus job in explaining the banking business and what has gone wrong. The post is a great piece of general education rather than a topical rant (not that there's anything wrong with Denninger's excellent topical rants). Well worth a read.



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Lifted from American Digest.

Dang, This Is Funny

H/T Brutally Honest:


Via Brutally Honest:

Q: How is Obama's teleprompter like the Koran?

A: Every time he reads from it, a market blows up.

-Jim Treacher

Also, at Brutally Honest, don't miss this set of humorous attorney-witness exchanges.

Friday, March 13, 2009

Riveting Television

It doesn't get any better than this. The Jon Stewart/Jim Cramer matchup:


Very Insightful Beginning, Pollyanna-ish Ending

The first half of this essay (more precisely, a speech) by Charles Murray is excellent, the back half, a bunch of wishful thinking.

From the first half:

In short, the question has suddenly become urgently relevant because President Obama and his leading intellectual heroes are the American equivalent of Europe's social democrats. There's nothing sinister about that. They share an intellectually respectable view that Europe's regulatory and social welfare systems are more progressive than America's and advocate reforms that would make the American system more like the European system.

Not only are social democrats intellectually respectable, the European model has worked in many ways. I am delighted when I get a chance to go to Stockholm or Amsterdam, not to mention Rome or Paris. When I get there, the people don't seem to be groaning under the yoke of an evil system. Quite the contrary. There's a lot to like--a lot to love--about day-to-day life in Europe, something that should be kept in mind when I get to some less complimentary observations.

The European model can't continue to work much longer. Europe's catastrophically low birth rates and soaring immigration from cultures with alien values will see to that. So let me rephrase the question. If we could avoid Europe's demographic problems, do we want the United States to be like Europe?

Tonight I will argue for the answer "no," but not for economic reasons. The European model has indeed created sclerotic economies and it would be a bad idea to imitate them. But I want to focus on another problem.

My text is drawn from Federalist 62, probably written by James Madison: "A good government implies two things: first, fidelity to the object of government, which is the happiness of the people; secondly, a knowledge of the means by which that object can be best attained." Note the word: happiness. Not prosperity. Not security. Not equality. Happiness, which the Founders used in its Aristotelian sense of lasting and justified satisfaction with life as a whole.

I have two points to make. First, I will argue that the European model is fundamentally flawed because, despite its material successes, it is not suited to the way that human beings flourish--it does not conduce to Aristotelian happiness. Second, I will argue that twenty-first-century science will prove me right.


First, the problem with the European model, namely: It drains too much of the life from life. And that statement applies as much to the lives of janitors--even more to the lives of janitors--as it does to the lives of CEOs.

I start from this premise: A human life can have transcendent meaning, with transcendence defined either by one of the world's great religions or one of the world's great secular philosophies. If transcendence is too big a word, let me put it another way: I suspect that almost all of you agree that the phrase "a life well-lived" has meaning. That's the phrase I'll use from now on.

And since happiness is a word that gets thrown around too casually, the phrase I'll use from now on is "deep satisfactions." I'm talking about the kinds of things that we look back upon when we reach old age and let us decide that we can be proud of who we have been and what we have done. Or not.

To become a source of deep satisfaction, a human activity has to meet some stringent requirements. It has to have been important (we don't get deep satisfaction from trivial things). You have to have put a lot of effort into it (hence the cliché "nothing worth having comes easily"). And you have to have been responsible for the consequences.

There aren't many activities in life that can satisfy those three requirements. Having been a good parent. That qualifies. A good marriage. That qualifies. Having been a good neighbor and good friend to those whose lives intersected with yours. That qualifies. And having been really good at something--good at something that drew the most from your abilities. That qualifies. Let me put it formally: If we ask what are the institutions through which human beings achieve deep satisfactions in life, the answer is that there are just four: family, community, vocation, and faith. Two clarifications: "Community" can embrace people who are scattered geographically. "Vocation" can include avocations or causes.

It is not necessary for any individual to make use of all four institutions, nor do I array them in a hierarchy. I merely assert that these four are all there are. The stuff of life--the elemental events surrounding birth, death, raising children, fulfilling one's personal potential, dealing with adversity, intimate relationships--coping with life as it exists around us in all its richness--occurs within those four institutions.

Seen in this light, the goal of social policy is to ensure that those institutions are robust and vital. And that's what's wrong with the European model. It doesn't do that. It enfeebles every single one of them.

Put aside all the sophisticated ways of conceptualizing governmental functions and think of it in this simplistic way: Almost anything that government does in social policy can be characterized as taking some of the trouble out of things. Sometimes, taking the trouble out of things is a good idea. Having an effective police force takes some of the trouble out of walking home safely at night, and I'm glad it does.

The problem is this: Every time the government takes some of the trouble out of performing the functions of family, community, vocation, and faith, it also strips those institutions of some of their vitality--it drains some of the life from them. It's inevitable. Families are not vital because the day-to-day tasks of raising children and being a good spouse are so much fun, but because the family has responsibility for doing important things that won't get done unless the family does them. Communities are not vital because it's so much fun to respond to our neighbors' needs, but because the community has the responsibility for doing important things that won't get done unless the community does them. Once that imperative has been met--family and community really do have the action--then an elaborate web of social norms, expectations, rewards, and punishments evolves over time that supports families and communities in performing their functions. When the government says it will take some of the trouble out of doing the things that families and communities evolved to do, it inevitably takes some of the action away from families and communities, and the web frays, and eventually disintegrates.

If we knew that leaving these functions in the hands of families and communities led to legions of neglected children and neglected neighbors, and taking them away from families and communities led to happy children and happy neighbors, then it would be possible to say that the cost is worth it. But that's not what happened when the U.S. welfare state expanded. We have seen growing legions of children raised in unimaginably awful circumstances, not because of material poverty but because of dysfunctional families, and the collapse of functioning neighborhoods into Hobbesian all-against-all free-fire zones.

Meanwhile, we have exacted costs that are seldom considered but are hugely important. Earlier, I said that the sources of deep satisfactions are the same for janitors as for CEOs, and I also said that people needed to do important things with their lives. When the government takes the trouble out of being a spouse and parent, it doesn't affect the sources of deep satisfaction for the CEO. Rather, it makes life difficult for the janitor. A man who is holding down a menial job and thereby supporting a wife and children is doing something authentically important with his life. He should take deep satisfaction from that, and be praised by his community for doing so. Think of all the phrases we used to have for it: "He is a man who pulls his own weight." "He's a good provider." If that same man lives under a system that says that the children of the woman he sleeps with will be taken care of whether or not he contributes, then that status goes away. I am not describing some theoretical outcome. I am describing American neighborhoods where, once, working at a menial job to provide for his family made a man proud and gave him status in his community, and where now it doesn't. I could give a half dozen other examples. Taking the trouble out of the stuff of life strips people--already has stripped people--of major ways in which human beings look back on their lives and say, "I made a difference."

I have been making a number of claims with no data. The data exist. I could document the role of the welfare state in destroying the family in low-income communities. I could cite extensive quantitative evidence of decline in civic engagement and document the displacement effect that government intervention has had on civic engagement. But such evidence focuses on those near the bottom of society where the American welfare state has been most intrusive. If we want to know where America as a whole is headed--its destination--we should look to Europe.

Drive through rural Sweden, as I did a few years ago. In every town was a beautiful Lutheran church, freshly painted, on meticulously tended grounds, all subsidized by the Swedish government. And the churches are empty. Including on Sundays. Scandinavia and Western Europe pride themselves on their "child-friendly" policies, providing generous child allowances, free day-care centers, and long maternity leaves. Those same countries have fertility rates far below replacement and plunging marriage rates. Those same countries are ones in which jobs are most carefully protected by government regulation and mandated benefits are most lavish. And they, with only a few exceptions, are countries where work is most often seen as a necessary evil, least often seen as a vocation, and where the proportions of people who say they love their jobs are the lowest.

What's happening? Call it the Europe syndrome. Last April I had occasion to speak in Zurich, where I made some of these same points. After the speech, a few of the twenty-something members of the audience approached and said plainly that the phrase "a life well-lived" did not have meaning for them. They were having a great time with their current sex partner and new BMW and the vacation home in Majorca, and saw no voids in their lives that needed filling.

It was fascinating to hear it said to my face, but not surprising. It conformed to both journalistic and scholarly accounts of a spreading European mentality. Let me emphasize "spreading." I'm not talking about all Europeans, by any means. That mentality goes something like this: Human beings are a collection of chemicals that activate and, after a period of time, deactivate. The purpose of life is to while away the intervening time as pleasantly as possible.

If that's the purpose of life, then work is not a vocation, but something that interferes with the higher good of leisure. If that's the purpose of life, why have a child, when children are so much trouble--and, after all, what good are they, really? If that's the purpose of life, why spend it worrying about neighbors? If that's the purpose of life, what could possibly be the attraction of a religion that says otherwise?

The same self-absorption in whiling away life as pleasantly as possible explains why Europe has become a continent that no longer celebrates greatness. When life is a matter of whiling away the time, the concept of greatness is irritating and threatening. What explains Europe's military impotence? I am surely simplifying, but this has to be part of it: If the purpose of life is to while away the time as pleasantly as possible, what can be worth dying for?

I stand in awe of Europe's past. Which makes Europe's present all the more dispiriting. And should make its present something that concentrates our minds wonderfully, for every element of the Europe Syndrome is infiltrating American life as well.

"I'm Tired..."

Via Sigmund Carl and Alfred via Brutally Honest, this is a gem.

It begins:

I’ll be 63 soon. Except for one semester in college when jobs were scarce, and a six-month period when I was between jobs, but job-hunting every day, I’ve worked, hard, since I was 18. Despite some health challenges, I still put in 50-hour weeks, and haven’t called in sick in seven or eight years. I make a good salary, but I didn’t inherit my job or my income, and I worked to get where I am. Given the economy, there’s no retirement in sight, and I’m tired. Very tired.

I’m tired of being told that I have to “spread the wealth around” to people who don’t have my work ethic. I’m tired of being told the government will take the money I earned, by force if necessary, and give it to people too lazy or stupid to earn it.

I’m tired of being told that I have to pay more taxes to “keep people in their homes.” Sure, if they lost their jobs or got sick, I’m willing to help. But if they bought McMansions at three times the price of our paid-off, $250,000 condo, on one-third of my salary, then let the leftwing Congresscritters who passed Fannie and Freddie and the Community Reinvestment Act that created the bubble help them—with their own money.

I’m tired of being told how bad America is by leftwing millionaires like Michael Moore, George Soros and Hollywood entertainers who live in luxury because of the opportunities America offers. In thirty years, if they get their way, the United States will have the religious freedom and women’s rights of Saudi Arabia, the economy of Zimbabwe, the freedom of the press of China, the crime and violence of Mexico, the tolerance for Gay people of Iran, and the freedom of speech of Venezuela. Won’t multiculturalism be beautiful?

I’m tired of being told that Islam is a “Religion of Peace,” when every day I can read dozens of stories of Muslim men killing their sisters, wives and daughters for their family “honor;” of Muslims rioting over some slight offense; of Muslims murdering Christian and Jews because they aren’t “believers;” of Muslims burning schools for girls; of Muslims stoning teenage rape victims to death for “adultery;” of Muslims mutilating the genitals of little girls; all in the name of Allah, because the Qur’an and Shari’a law tells them to.

I believe “a man should be judged by the content of his character, not by the color of his skin.” I’m tired of being told that “race doesn’t matter” in the post-racial world of President Obama, when it’s all that matters in affirmative action jobs, lower college admission and graduation standards for minorities (harming them the most), government contract set-asides, tolerance for the ghetto culture of violence and fatherless children that hurts minorities more than anyone, and in the appointment of US Senators from Illinois. I think it’s very cool that we have a black president and that a black child is doing her homework at the desk where Lincoln wrote the emancipation proclamation. I just wish the black president was Condi Rice, or someone who believes more in freedom and the individual and less in an all-knowing government.

I’m tired of a news media that thinks Bush’s fundraising and inaugural expenses were obscene, but that think Obama’s, at triple the cost, were wonderful. That thinks Bush exercising daily was a waste of presidential time, but Obama exercising is a great example for the public to control weight and stress, that picked over every line of Bush’s military records, but never demanded that Kerry release his, that slammed Palin with two years as governor for being too inexperienced for VP, but touted Obama with three years as senator as potentially the best president ever.

Wonder why people are dropping their subscriptions or switching to Fox News? Get a clue. I didn’t vote for Bush in 2000, but the media and Kerry drove me to his camp in 2004...

Thursday, March 12, 2009

Buggery Is Just Plain Bad For Society

It also seems to darken the intellect and drive its practitioners into hate-filled frenzies.


"That's No Moon! That's The National Debt!"

Excellent graphic.

Wednesday, March 11, 2009







Oh, Come On, These Are The Usual Pratfalls And Hilarities Of One's First Job

"A Presidential Crisis of Competence" asks the question:

What does such a person with real power do once their incompetence becomes self-evident to most? I’m afraid we’re not that far from finding out.

Sinking Ship Dynamics

Good comment:

I'm going to suggest you add another possibility:

(7) Like the stock market, people are reluctant to invest their capital (in this case their time and precious high-level reputations) in what may turn out to be a total train wreck.

The stakes for Team Obama are sky-high here. He can't merely caretake. If he isn't seen as solving some serious problems, he is going to be in serious trouble, and, of course, one of the best ways for the Top Guy to avoid taking personal heat is to shove subordinates over the transom.

Nobody wants to be Obama's "Brownie," called to testify before Congress about his failure to have his crystal ball in good working order. Good people have to balance the chance for high office, high visibility, and a stake in any success against the chance of being part of a high-visibility king-sized screwup.

Unfortunately, the nature of current affairs is such that realistically the best you could probably hope for is to bring things gradually back to an even keel, fending off the worst Pelosi pork-encrusted backscratching madness. That won't get you much applause, honestly. It's what people expect. And the worst you could fear...well, that's pretty bad.

It might be different if the economy was booming along, and you could be part of the new wonderful Free Lunch...er, I mean Health Care For Everybody initiative, Great Society Take 2, et cetera. That at least has the sunny hallmarks of vision, ambition, daring, instead of the dank cheerless odor of just cleaning up a hell of a lot of dirty dishes.

We Need Another Jackson

Moral clarity, as quoted here:

President Jackson’s honesty and anger at the bankers should resonate today, as bankers have again brought our country to its knees.

“Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the grace of the Eternal God, will rout you out.”

Tuesday, March 10, 2009


Some legislators get a lesson in basic civics.


Jonah Goldberg:

magine a child falls down a well. Now imagine I offer to lend the parents my ladder to save her, but only if they promise to paint my house. Would you applaud me for not letting a crisis go to waste? Or would you think I'm a jerk?

I ask because I'm trying to come to terms with Rule No. 1 of the Obama administration.


In other realms of life, exploiting a crisis for your own purposes is an outrage. If a business uses a hurricane warning, for example, to price-gouge on vital supplies, it is a crime. When a liberal administration does it, it's taking advantage of a historic opportunity.

Obama's defenders respond to this argument that Obama's motives are decent, noble and pure. He wants to help the uninsured and the poorly educated. He wants to make good on his vow to halt those rising oceans.

But this is just a rationalization. Every president thinks his agenda is what's best for the country; every politician believes his motives are noble. The point is that scaring people about X in order to achieve Y is fundamentally undemocratic.

This was transparently obvious to Bush's harshest critics, who alleged that 9/11 was merely a convenient crisis for devious neocons who wanted to topple Hussein all along. But it's now clear that many of these critics simply objected to the agenda, not the alleged tactics. Now that it's their turn, they see nothing wrong with doing what they so recently condemned.

They even admit it, over and over again.

The Math Always Wins. Always.

"The Looming Pension Disaster"

Monday, March 09, 2009

A Solution Exists

Well done:

Spaz Nation: The Future Lies Ahead


CONTROLLING YOUR IPHONE with facial signals. So thanks to bluetooth headsets, you already can’t tell if the person walking down the street talking to him- or herself is crazy nowadays; when this catches on, the fact that they’re twitching their face spasmodically won’t be a clue, either, because they might just be dialing . . . .

Posted at 1:37 pm by Glenn Reynolds

Jon Stewart Lays Into CNBC

A must-see:

Sunday, March 08, 2009

For Things To Be As Bad As The Great Depression, The S&P 500 Would Need To Rally 17% From Here


This Is Success?

Excellent litany.

Steynian Humor

From this article:

Still, the “classic American movies” set is a pretty good substitute, and it can set you back as much as $38.99 at Wal-Mart: Lot of classics in there, I’m sure — Casablanca, Citizen Kane, The Sound of Music — though this sort of collection always slips in a couple of Dude, Where’s My Car? 3 and Police Academy 12 just to make up the numbers.


[I]f things go from bad to worse in America, overseas they’ll go from worse to total societal collapse. We’ve already seen changes of government in Iceland and Latvia, rioting in Greece and Bulgaria. The great destabilization is starting on the fringes of Europe and working its way to the Continent’s center.

We’re seeing not just the first contraction in the global economy since 1945, but also the first crisis of globalization. This was the system America and the other leading economies encouraged everybody else to grab a piece of. But whatever piece you grabbed — exports in Taiwan, services in Ireland, construction in Spain, oligarchic industrial-scale kleptomania in Russia — it’s all crumbling. Ireland and Italy are nation-state versions of Bank of America and General Motors. In Eastern Europe, the countries way out on the end of the globalization chain can’t take a lot of heat without widespread unrest. And the fellows who’ll be picking up the tab are the Western European banks who loaned them all the money. Gordon Brown was hoping for a little more than: “I feel your pain. And have you ever seen The Wizard of Oz? It’s about this sweet little nobody who gets to pay a brief visit to the glittering Emerald City before being swept back to the reassuring familiarity of the poor thing’s broken-down windswept economically devastated monochrome dustbowl. You’ll love it!”

“Frankly, my dear, I don’t give a damn”? Oh, perish the thought. The prime minister flew 8,000 miles for dinner and a movie. But the president says he’ll call. Next week. Next month. Whatever.

Roh, Roy!


Seen here.

Friday, March 06, 2009

When The Beer Goggles Fade

Good column.


Did you feel it? The political ground shifting beneath President Barack Obama since his speech last week to Congress? It's been downhill since and I'm not referring mainly to the Dow Jones record-setting dive. The pivot point of the shift was the speech, or rather what the speech did to the evolving public narrative of Obama.


I would only disagree that the Obama deception represents a clever political strategy. The deception proceeds from the fundamental contradiction in the Obama strategy - talking like Ronald Reagan but walking like the second coming of Norman Thomas - and indeed that of all Washington liberals. Sensing the political fragility of the moment, they are racing to enact as much of their statist agenda as possible before the 2010 election puts the brakes on what, God willing, will ultimately be seen as an unfortunate interregnum between Republican Bush and a genuinely conservative regime to come.

Again, the speech to Congress was the pivot point. Before the speech, Obama was protected by a kind of political equivalent of the Star Trek Shield. His symbolizing of an historic milestone, which alone moved millions of white voters to his column, combined with his soaring rhetoric, which negated criticism from John McCain and other Republicans of the substance of Obama's proposals, to protect him through election day and into the transition.

But the magnetism of his historic moment began fading once the economic stimulus, the omnibus and the budget were on the table. As people focused more on the details and how they didn't square with what they thought he had promised during the campaign, the soaring rhetoric lost much of its power. It may even now be approaching a net negative because it throws so much more light on the inaequacies of the policies.

And so the ground has shifted and the essential narrative is changing. Before, supporting Obama was an act of personal and national affirmation made all the more pleasant and attractive by the seeming reasonableness of his policy proposals and the winsomeness of his public personality . He succeeded admirably in making himself a comfortable and reassuring choice, thus making it not merely "safe" to vote for him, but positively compelling.

Now, though, the mask is off and the disconnect between rhetoric and reality is emerging as the dominant driver of the Obama narrative. The contrast is no longer between the young, personable, historic candidate Obama and a creaky, cranky old Republican White Guy, it's between what America thought it was getting in a President Obama (cool, reasonable and beyond partisanship) and what it now sees as the reality of a President Obama (government spending out of control, an uncertain hand on foreign policy, broken promises, more bureaucrats, etc. etc.).

Put another way - what we see now is neither what we were promised, nor what we expected.

Truth In Logos

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Poached from the contest here.

Logo is a parody of the official new Obama state fascism logo:

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An Appropriate Rant

At Ace Of Spades:

But not dwarvish. Deranged Clintonite Robert Reich fears the coming mobs with pitchforks and torches who will storm the White House if the Obama's cunning plan to keep tossing bales of $100 bills on the fire doesn't work out.

Republicans have made no secret of their wish to blame Obama for the bad economy, and to stir up as much populist rage against his so-called socialist tendencies as politically possible. History shows how effective demagogic ravings can be when a public is stressed economically. Make no mistake: Angry right-wing populism lurks just below the surface of the terrible American economy, ready to be launched not only at Obama but also at liberals, intellectuals, gays, blacks, Jews, the mainstream media, coastal elites, crypto socialists, and any other potential target of paranoid opportunity.

Great blistering Jesus this guy has an amazing ability to project. The left is far and away the holder of more biases and hatreds than the right can manage. You can start with their self-appointment as the cultural and moral elites blessed with greater understanding and compassion standing against the hordes of mouth-breathing morons clinging bitterly to their guns and religion. Ooops channeling the Obama there for a minute. Liberals love to demonize anyone not as soft-hearted and mushy-brained as they are, but they fail to notice that the love they bestow often has the opposite effect they intended. See the expansion of the welfare state and the displacement of the father in minority communities, or the threats to sue mortgage lenders for redlining and not making loans to the same folks based on the dead, white male concept of doing the f****** math. Now we have seen the collapse of the whole mortgage industry and the BS Fannie and Freddie who facilitated all those loans to people who couldn't afford them. Once the rules were gamed to help minority home ownership, then the whole country took advantage of a system gone wild and moved one house too far up the food chain.

Take a Xanax and put on some ambien(t) music Robbie. The hordes may protest, but unlike the left will do so with decorum and intelligence (See the Tea Party phenomenon). I was at the DC event and all the savages were neatly dressed, clean and making cogent arguments about you and your friends mortgaging our children's future to pay for left wing butthead causes you couldn't get passed otherwise. Never let a good crisis go to waste, eh Rahm?

I will take the proles on the right over the dirty, nasty patchouli-smelling hippies who form the cohorts of the MoveOn left. And give me Rush any day over the failed droolers who whined their way into bankruptcy at Air America. So bugger off Mr. Reich, return to your mid-town Manhattan, limousine liberal existence and keep swatting at bugbears that do not exist. The rest of us will get about the business of making sure you idiots don't kill the golden goose you are now molesting.

The Dynamic Is Changing

Trying to reinflate the good times is akin to a cargo cult. The reason:

The troubles in the financial markets over the last year will lead to a new era of thrift, and this will be radically different than the past 20 years of excesses as consumers change their habits. Consumers are already retrenching and increasing their savings amongst the economic uncertainty, but I think these changes portend an even deeper shift in personal behavior.

This is a story of three successful "40 somethings" who are cutting back not because they have to but because they want to. They have given up on the markets -not because of losses - but because it has failed them. These people are cutting back because they sense a long period of economic malaise that won't be fixed by increased spending or a new bailout program. And they believe that the economic malaise and dislocations will result in opportunities far off in the future, and they want to be in position, with cash on hand, to take advantage.




So there you have it. Tom is downsizing to simplify his life. Pete is cutting back to improve his balance sheet. Steve is saving more because he recognizes that the current dislocations in the economy will create opportunities. These folks don't have to cut back but they want to, and this dynamic isn't recognized by the pundits on Wall Street. If you listen to CNBC, you get the sense that all our ills will be solved by one more bailout or if not one more, than the right bail out. I got news for you: that game is over. It doesn't matter anyway, I believe the dynamic has shifted in this country from spenders to savers.

Furthermore, the financial pundits seem to imply that savings is only for those on the bubble - those who have lost a job or might lose one as they are downsized by their company. But what I see and hear is that financial prudence is for those who have the means as well and have been somewhat immune to the recession. There is no question that people are cutting back, and it just isn' t people who are on the bubble or who live their life in fear. People with means are pulling in their horns too.

The financial markets have failed investors. There has been a tremendous transfer of wealth from Main Street to Wall Street. Investors have made "bubkus" in this decade, yet CEO's and insiders have made millions for driving their companies into the ground. Wall Street has done little for shareholders. Tom, Pete, and Steve recognize that if they had acted so irresponsibly in their professional lives they would have lost their right to practice medicine or law. They are disgusted with the markets and bailouts to help those who acted recklessly and irresponsibly. They have turned a deaf ear to the financial pundits who clamour on about the need for just one more bailout to fix everything. Tom, Pete and Steve are taking matters into their own hands. Wall Street matters little as the wheels for a new era of thrift have been set in motion.

More Evidence For The Proposition That Everything The Government Touches Turns To Crap


On education - a thought:

I am a 25 year veteran high school math teacher in a high performance high school. Virtually all discussion in Retooling The Education Factory is productive and interesting. However, the reasons offered for why we are spending an ever increasing amount of money are wrong. Public Law 94-142 Public Law 94-142, The Education For All Handicapped Children Act (IDEA) (U.S. Department of Education website) and Individuals with Disabilities Education Act (Wikipedia), is driving almost all spending increases and absorbing almost all the new money. Implementation of this law has completely distracted educators and distorted what is done in our schools since its passing. Ask any administrator or teacher how much of their time and energy is spent complying with it and you will find out what is really wrong in education in America today.

When I started teaching my high school had one educator with a half time secretary providing services to our special needs kids. We now have an entire cadre of teachers, support staff, and personal assistants. I really do not know the exact number, but I am fairly certain we now have at least a dozen full time people serving these kids. No other component of the staffing in my district has grown over this interval. We have been tight budget forever, have a lean administration, have increased class sizes and reduced teaching staffs, and cut programs of the type Michael Goodfellow thinks we need.

My district has a number of high schools, junior highs, and elementary schools. The staffing paradigm is the same in each: lean as hell at the core with a huge group providing services to special needs kids. In my opinion this is the great untold story of our era. People are absolutely correct about the raw and inflated dollars increasing steadily, they just do not know that it is virtually all going to serve the needs of our least able students - because the law mandates that we must and clever lawyers find ever more need for schools to provide ever increasing levels of service.

It is totally out of hand at this point.

Importantly, due to mainstreaming, all teachers are constantly distracted from teaching a truly robust curriculum by the need to make sure that kids who should never be taking advanced algebra, for example, have a chance at passing. These kids are in these classes these days because the law has a presumption that anyone can learn anything - we educators just need to make the appropriate adjustments to curriculum, testing, homework assigned, seating, provide personal notetakers, full time personal assistants, special small study groups with a full time teacher and only a handful of kids, etc.

Yes, these kids make it through - some of the time. But instead of designing a challenging and interesting curriculum for kids who might actually use math at some point, I need to make sure the mainstreamed kid with the personal assistant and no chance they will even know when to add or subtract in a real world setting has a chance at having some partial success at using the quadratic formula!

The situation is the same everywhere. No one who matters talks about it or writes about it. I am certain it is a significant explanatory factor in both the cost and performance domains. And it is getting worse each year.

Thursday, March 05, 2009

No, Really?


Obama’s reliance on the teleprompter is unusual – not only because he is famous for his oratory, but because no other president has used one so consistently and at so many events large and small.

After the teleprompter malfunctioned a few times last summer and Obama delivered some less-than-soaring speeches, reports surfaced that he was training to wean himself off of the device while on vacation in Hawaii. But no luck.

Now, how much Kool-Aid does one need to drink before being able to say with a straight face that the teleprompter is unusual for a guy with such great oratory?

Isn't that along the lines of the famous head-scratcher "Prison population soars even as crime rate plummets?"

Or like asking, "Why would someone who sings so flawlessly on stage need to lip-synch?"

It's a real puzzle!

The article linked at the post also contains these gems:

His use of the teleprompter makes work tricky for the television crews and photographers trying to capture an image of the president announcing a new Cabinet secretary or housing plan without a pane of glass blocking his face.


Before Obama entered a room in the Eisenhower Executive Office Building on Wednesday to announce his crackdown on defense contracts, a CNN reporter asked an Obama aide if the teleprompter could be moved further away from the podium or lowered. The answer was an unequivocal ‘no.’

“He uses them to death,” a television crewmember who also covered the White House under Presidents Bill Clinton and George W. Bush said of the teleprompter. “The problem is, he never looks at you. He’s looking left, right, left, right — not at the camera. It’s almost like he’s not making eye contact with the American people.”

Wednesday’s event posed another scenario photographers and television crews have to work around. Obama had five others join him at the announcement, including Sen. John McCain. The takeaway shot was of Obama and McCain. But the teleprompter on Obama’s left was almost directly in front of McCain.

“You couldn’t get a good angle on him with McCain,” said a White House photographer who also covered Bush. “So if there’s someone else important in the frame, it’s hard to get a shot without the teleprompter.”

Poor things.

And come on, is there really any reason to think that the Messiah is anything more than an affirmative action puppet, but just hasn't himself caught on to the gag?

Fairness As Defined By Reds

Seen here:

The same attitude is apparent in the Obama administration's defense of its plan to limit tax deductions for households earning more than $250,000 a year. Peter Orszag, Obama's budget director, says it's "a question of fairness." How so? "If you're a teacher making $50,000 a year and decide to donate $1,000 to the Red Cross or United Way, you enjoy a tax break of $150," Oszag explains. "If you are Warren Buffet or Bill Gates and you make that same donation, you get a $350 deduction—more than twice the break as the teacher."

But that's because the tax rate for the rich guys is more than twice as high as the tax rate for the teacher. They get a bigger "break" because they pay more in taxes to begin with. The unfairness that the Obama administration perceives is built into a system of progressive taxation that includes deductions.

Zero Class


Great Graphic

A completely punk photoshop job done as a companion to this piece. Punk, but true.