Friday, October 31, 2008
Fear of More Than Flying
Via Drudge we are informed that Erica Jong fears more than flying. To be specific, Jong fears,
“If Obama loses it will spark the second American Civil War. Blood will run in the streets, believe me…”
Erica’s fear is so great that,
“My back is also suffering from spasms, so much so that I had to see an acupuncturist and get prescriptions for Valium.”
Take a couple more Valium, Erica, and rest easy in the knowledge that if a second American civil war; or, as some Southerners refer to the actual civil war as, “that recent unpleasantness;” does materialize, many individuals are armed and ready.
Only Believers (Kool Aid Drinkers) Allowed
Global Warming Theory is Politically Driven and is Not Scientifically Rigourous
Like MIT scientists, I am baffled by the global warming theory faithful, as is noted in this article titled MIT scientists baffled by global warming theory, contradicts scientific data.
Scientists at MIT have recorded a nearly simultaneous world-wide increase in methane levels. This is the first increase in ten years, and what baffles science is that this data contradicts theories stating man is the primary source of increase for this greenhouse gas.
One thing does seem very clear, however; science is only beginning to get a handle on the big picture of global warming. Findings like these tell us it’s too early to know for sure if man’s impact is affecting things at the political cry of “alarming rates.” We may simply be going through another natural cycle of warmer and colder times - one that’s been observed through a scientific analysis of the Earth to be naturally occuring for hundreds of thousands of years.
Yes, but why let little things let scientific facts get in the way of dogmatic theory?
On a related note, here is another paper on this subject, written by Dr. Richard S. Lindzen, the Alfred P. Sloan Professor of Atmospheric Science at the Massachusetts Institute of Technology, titled Climate Science: Is It Currently Designed to Answer Questions?
Dr. Lindzen’s paper will take some time to read, but, is a rather thorough damning of the drum beating, dogma spewing, global warming theorists.
Wednesday, October 29, 2008
Ponder This for a Couple of Days While I Produce
The following is a quote from Ayn Rand’s book Atlas Shrugged. It has extremely important implications.
If one’s actions are honest, one does not need the predated confidence of others, only their rational perception.
Ayn Rand, Atlas Shrugged, pg. 142, 1957
Tuesday, October 28, 2008
That’s a Real Titan of Industry
The State of Michigan is forming a new looting department, complete with czar. The Department of Energy, Labor and Economic Growth. Here is an alleged businessman’s response to the news, Rich VanderVeen, chairman of Mackinaw Power.
“We are grateful to see things moving in the right direction,” said VanderVeen, chairman of Lowell-based Mackinaw Power, which operates a pair of wind turbines in Mackinaw City. “It’s been a long walk.”
What a whiner, a long walk indeed. Of course VanderVeen’s hope for illgotten gain is someone’s loss, and they are whining too.
State Rep. Arlan Meekhof, R-West Olive, a member of the House Agriculture Committee, said he favors consolidation if it cuts costs, but fears some programs could get lost, including biofuels.
“I would prefer it (biofuel development) stay with Ag, but it is the governor’s privilege to consolidate departments,” he said.
“More attention would be paid to it if it was assigned to the Department of Agriculture.”
Dang, I hate it when some other boondoggle, other than mine, gets to dip into the pot.
But what takes the cake, in regards to this pronouncement, is the wholesale swallowing of the belief that the state, and this new department, will create jobs. The state creates nothing, it only loots.
All hail the czar. Ha!
$700 Billion Bailout Pocket Lining
Are you wondering when all those billions of dollars will make it from the pockets of the financial institutions suckling at the state’s teat to the street in the form of loans? Possibly never, as the following question and answer, from a JP Morgan Chase conference call, illustrates. The question.
“Chase recently received $25 billion in federal funding. What effect will that have on the business side and will it change our strategic lending policy?”
“Twenty-five billion dollars is obviously going to help the folks who are struggling more than Chase,” he began. “What we do think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop.”
From a New York Times article written by Joe Nocera titled So When Will Banks Give Loans?
Fact Checking the $700 Billion Bailout
Via Hit & Run, a link to Working Paper 666; isn’t that apropos; written by V.V. Chari, Lawrence Christiano, and Patrick J. Kehoe, three scholars associated with the Federal Reserve, titled Facts and Myths About the Financial Crisis of 2008*. From Working Paper 666.
Here we examine four claims about the way the financial crisis is affecting the economy as a whole and argue that all four claims are myths. Conventional analyses of the financial crisis focus on interest rate spreads. We argue that such analyses may lead to mistaken inferences about the real costs of borrowing and argue that, during financial crises, variations in the levels of nominal interest rates might lead to better inferences about variations in the real costs of borrowing.
Note: The link to Working Paper 666 leads you to a thrity-three (33) page pdf file. Eight of the pages are written, and the remainder of the pages are graphs.
A short piece written by Llewellyn H. Rockwell Jr. for The American Conservative which I post in its entirety, below.
The critical problem we face today is the same one all mankind has faced: the state, those monopolists who claim the right to break the laws that they make and enforce. How to restrain them is the critical problem of all sound political thinking. Making matters worse, this gang now has a monopoly on the money and the ability to print it, and they are abusing that power at our expense.
How does voting change the situation? Neither of the candidates for president wants to do anything about the problem. On the contrary, they want to make it worse. This is for a reason. The state owns the “democratic process” as surely as it owns the Departments of Labor and Defense and uses it in ways that benefit the state and no one else.
On the other hand, we do have the freedom not to vote. No one has yet drafted us into the voting booth. I suggest that we exercise this right not to participate. It is one of the few rights we have left. Nonparticipation sends a message that we no longer believe in the racket they have cooked up for us, and we want no part of it.
You might say that this is ineffective. But what effect does voting have? It gives them what they need most: a mandate. Nonparticipation helps deny that to them. It makes them, just on the margin, a bit more fearful that they are ruling us without our consent. This is all to the good. The government should fear the people. Not voting is a good beginning toward instilling that fear.
This year especially there is no lesser of two evils. There is socialism or fascism. The true American spirit should guide every voter to have no part of either.
Monday, October 27, 2008
Spank the Court and the Meddlers
The last time I wrote about spanking, to the best of my recollection and the search function of this here posting software, was in July 2004 and I had this to say as a concluding comment.
I think individuals who make the leap from spanking a kid on the ass, to beating them or torturing them, have a wee bit of a problem understanding that spanking is not beating or torturing, and parents who go beyond spanking and venture into the dark and terrible world of torturing their children, or beating their children, are worth no more than the detritus that gathers on the bottom of my shoes.
I mention this today because of the following.
A Columbia County jury will be asked to decide whether a pastor who spanked his 12-year-old son with a paddle committed child abuse.
A judge ruled Thursday that the case against 44-year-old Barry W. Barnett Jr. of Poynette will head to trial.
Barnett stood mute Thursday on a charge of felony child abuse so the court entered a not-guilty plea.
The criminal complaint says Barnett spanked the boy twice, leaving purplish bruises about four inches wide. But Barnett’s attorney, Gerald Mowris, says photographs showed only red marks.
The boy testified last week that the paddling hurt “a little” and said he and his father cried during the spanking.
A doctor testifying for the defense said he didn’t think the paddling amounted to abuse.
I have no idea how this Pastor’s spanking of his son came to the attention of the state, but I think that this is simply another overreach, on the part of the state and those who profess obedience to the state. I know that the spankings I received as a child did provided me with sound instruction, and I don’t just mean the sound of the paddle striking my ass, regardless of the fact that The New York Times and their experts, in a piece titled When Is Spanking Child Abuse? tend to believe that any spanking is child abuse.
I would hope that the members of the jury have a more sense than the state and the court system, but I am not holding my breath.
Rioting for Redistribution
Last Wednesday I noted that police departments across the country were preparing for election night unrest, or riots.
The story regarding the possibility of riots, which you can access via the above link, speculates that riots may occur if Obama wins, riots of the type associated with a large city’s sport team winning a championship. If Obama loses, though, the type of riots that may occur will be less celebratory.
Win or lose, I think that if riots do indeed materialize out of the results of what happens on November 4, those who may take to the streets in riotous frames of minds will be storming businesses, not simply to vandalize, but to initiate a redistrbution of wealth at the street level.
Obama is a Redistributionist, Which is Just a Another Word for Socialist
The Merriam-Webster online dictionary defines a redistributionist as one who believes in or advocates a welfare state.
Obama’ statement to Joe the Plumber, regarding redistributing the wealth, was not just a one off statement. Drudge, this morning, as his top of the fold headline, reports the following.
2001 OBAMA: TRAGEDY THAT ‘REDISTRIBUTION OF WEALTH’ NOT PURSUED BY SUPREME COURT
Sunday, October 26, 2008
Dinner with an Obama Supporter
An acquaintance of mine, an attorney, went out to dinner last night here in Grand Rapids, Michigan, with an Obama supporter. He didn’t realize, when he went to dinner, that he would be dining with an Obama supporter, but after being seated, his waiter approached and he noted that his waiter was wearing an Obama button.
After the waiter took drink orders, and described the night’s specials, my acquaintance briefly spoke with the waiter regarding his support of Obama, questioning the waiter in regards to why he was supporting Obama, and in regards to some of the positions which Obama has articulated as being important for the United States, and they continued this discussion during the course of the meal.
My acquaintance states that the waiter was a bit more informed and articulate in regards to Obama’s stated positions than many individuals who blather that they are supporting Obama because Obama will bring “change.” Additionally, my acquaintance stated that the service this waiter supplied to them during dinner was exceptional.
When dinner was completed, as is natural, my acquaintance was presented with the check by the waiter, who then stated he would return shortly to retrieve the check.
When the waiter returned to collect the check, my acquaintance stated to the waiter that both he and his dinner companion had thoroughly enjoyed their dinner, the wine, and their conversation with the waiter, and that because of the enjoyment they had experienced during their dining experience he felt a more than generous tip was in order. He then stated to the waiter that based upon what seemed to be his genuine support of Obama, and some of Obama’s stated positions, that he proposed the following. He informed the waiter that his tip was to be fifty dollars ($50.00), but, instead of giving the entire $50.00 to the waiter, he was going to give the waiter $20.00, cash, and he was going to take the other $30.00 of the tip and give it to some apparently homeless individuals who my acquaintance had passed on the street while walking from the parking ramp to the restaurant.
My acquaintance states that his proposal, as regards to the division of the tip, did not sit well with the waiter. The waiter did not bluster or fume, but simply stated that he had worked hard for that tip and that he did not think it appropriate or fair that the tip should be divided as my acquaintance had proposed as he had need of funds for school, rent, and groceries.
The waiter’s argument, as regards to the unfairness of spreading the wealth of the tip, did not sway my acquaintance’s decision though, and he left the waiter, who was now more visibly upset, with $20.00, and handed three individuals on the street $10.00 dollars each.
Lessons are at times learned the hard way, I quess.
Subprime Folly Leads to Sound Underwriting
In a Los Angeles Times article titled Countrywide plan may cut mortgage rates for 395,000 borrowers the most important paragraph is as follows.
The idea is to modify a loan’s terms just enough to create a new monthly payment, including principal, interest, taxes and property insurance, equal to 34% of a borrower’s verified monthly income. (bold by ed.)
As I noted in my posts about the subprime lending industry, specifically a post subtitled Cash in Your Hand, and a Hook, I stated the following.
In the subprime lending industry, weak, poor credit borrowers were allowed to spend up to fifty-five percent (55%) of their monthly gross income on their house payment plus monthly long term debts. (bold by ed.) Subprime lenders were allowing the highest risk borrowers to carry debt loads which even the most creditworthy prime borrowers were not allowed, and which are not, realistically, financially advisable for any individual.
I also noted the following regarding underwriting guidelines for solid, good credit borrowers.
Perhaps the most overly generous subprime underwriting guideline was what is known as the debt to income ratio. The debt to income ratio is simply the percentage of your monthly gross income that you are spending on your house payment and other monthly long term debts. For conforming prime loans, meaning “A” paper loans which are underwritten to FannieMae (FNMA) and FreddieMac (FHLMC) guidelines, borrowers are typically limited to spending thirty-eight percent (38%) of their monthly gross income on their house payment plus their long term debts (long term debts are any credit cards or lines of credit with outstanding balances, and any installment loans with over ten (10) months of payments still outstanding). Bear in mind that his 38% debt to income ratio was set by FNMA/FHLMC for solid, good credit borrowers.
I think the players in the current financial boondoggle all knew, and thoroughly understood, that the debt-to-income underwriting guideline being utilized to approve subprime borrowers, allowing an unheard of fifty-five percent (55%) of gross income as an acceptable debt-to-income ratio, would lead to problems of a magnitude of which we are seeing now. Fools.
Friday, October 24, 2008
The Second Largest Slave Master in the World
In our current economic circumstances, many individuals are proselytizing for additional state control, led by a contender for the office of the President of the United States, Barack Obama. Obama himself does not conceal the fact that he desires, with the assistance of Congress, to impose additional state control of industry and economics, both socialist ideals.
At this particular moment in time, calls for state control of the financial industry are ranging far and wide, and Obama himself informs us, when speaking with Joe the Plumber, that he believes that wealth should be spread around by the state.
A couple of excerpts from the linked Socialism: Slavery vs. Freedom.
The fact is that, under the capitalistic system, the ultimate bosses are the consumers. The sovereign is not the state, it is the people. And the proof that they are the sovereign is borne out by the fact that they have the right to be foolish. This is the privilege of the sovereign. He has the right to make mistakes, no one can prevent him from making them, but of course he has to pay for his mistakes. If we say the consumer is supreme or that the consumer is sovereign, we do not say that the consumer is free from faults, that the consumer is a man who always knows what would be best for him. The consumers very often buy things or consume things they ought not to buy or ought not to consume.
Consider the above and how that relates to financial events swirling around us currently.
More pointedly, consider this.
This is the difference between slavery and freedom. The slave must do what his superior orders him to do, but the free citizen—and this is what freedom means—is in a position to choose his own way of life. Certainly this capitalistic system can be abused, and is abused, by some people. It is certainly possible to do things which ought not to be done. But if these things are approved by a majority of the people, a disapproving person always has a way to attempt to change the minds of his fellow citizens. He can try to persuade them, to convince them, but he may not try to force them by the use of power, of governmental police power.
If Obama is elected, working with the complicit assistance of Congress, only Hu Jintao will be the master of more slaves.
One of the bigger financial stories of yesterday and today is Alan Greenspan’s appearance before the professional jobholders who make up what is called Congress. Bloomberg’s reporting on this event is headlined Greenspan Concedes to `Flaw’ in His Market Ideology, and The New York Times headline for the story is Greenspan Concedes Error on Regulation.
But what, exactly, has Alan Greenspan conceded? Only this.
Mr. Waxman noted that the Fed chairman had been one of the nation’s leading voices for deregulation, displaying past statements in which Mr. Greenspan had argued that government regulators were no better than markets at imposing discipline.
“Were you wrong?” Mr. Waxman asked.
“Partially,” the former Fed chairman reluctantly answered, before trying to parse his concession as thinly as possible.
This partial concession is not a wholesale endorsement for excessive state regulation of financial markets, but simply an acknowledgement that the individuals (the human factor) playing in the market were focused on the dollars being generated by the subprime mortgage paper market rather than the soundness of the investments being traded (the derivatives market).
The collapse of the derivatives market is not so difficult to understand. Here is the definition of a derivative, but from the definition here is the key to understanding why the financial markets have collapsed.
In finance, a security whose price is dependent upon or derived from one or more underlying assets.
And we all understand what the underlying alleged assets of the derivatives were, now. Subprime mortgages. Which I have stated from the beginning of this fiasco are the root cause of the financial woes now assailing the markets, as I noted in a post I titled Self Inflicted, and which even Alan Greenspan now is also conceding.
“The evidence strongly suggests that without the excess demand from securitizers, subprime mortgage originations (undeniably the original source of the crisis) would have been far smaller and defaults accordingly far lower,” he said.
Think about it. You cannot expect to miraculously turn a crappy underlying asset (the individual subprime mortgage) into a sound asset (the derivatives sold by the pooling of crappy subprime mortgages). It just does not work, and seining crappy mortgages through excessive regulation will still result in crap coming out, no matter how small the seine holes are.