Wednesday, April 30, 2008
Skepticism is a virtue in history as well as in philosophy.
The head of the FDIC has floated a sub-prime loan "fix" that may actually have a chance of becoming enacted, and actually working.
The plan would authorize the new government loans so that borrowers could pay down up to 20% of the principal they owed on their mortgage, according to a confidential draft of the plan obtained by The Wall Street Journal. That would mean that if a homeowner owed $100,000 on a mortgage, the government could loan up to $20,000 to pay down the principal.A key provision of the proposal is that the government will be placed in First Position on the title of the property. If at any time prior to the Treasury getting paid off, there is a default, the Treasury loan is paid off first. The only time the public would get stuck with the bill is if the property sold for less than 20% of the original loan amount. Very unlikely.
Here's how the program would work:
Mortgage holder has a loan for $100k. It is going to reprice so the loan payment will go from $800 a month to $1500. The borrower can't afford that. Oh, and the home, which was originally appraised at $150,000 is now worth $90,000. Rock, meet hard place.
The mortgage holder gets a loan from the Treasury for $20,000. They then refinance $80,000 of the existing $100,000 loan (they pay down the original balance with the $20k from the Treasury). The new loan must be based upon the Freddy Mac 30-year fixed rate. No negative amortization, pre-payment penalties or other "goodies" allowed. The government gets placed in First Position on the title of the property. They (we) get paid back first.
During the first 5 years of the Treasury loan, the mortgage holder makes interest only payments to the Treasury on the $20k based upon the prevailing T-bill rates. After the 5 years, the borrower takes over the payments at the same rate.
Why this could work:
- No downside to the mortgage holder. Even if this goes upside down almost immediately, they won't be any worse off.
- It can be easily sold as NOT being a bail-out. The government will not be guaranteeing anything. Money lent out will be paid back at prevailing rates. I honestly can't think of a scenario other than a total, devastating economic collapse unlike any ever endured, where the Treasury would lose money. If things are that bad, these loans will be the least of our worries.
- It will immediately help to stabilize the real estate markets across the country. No more massive numbers of foreclosures will, at the very least, stop the decline we've been having in prices. With stable prices, people will start buying and selling again. Sales means income. Income means disposable income. Money will again be circulating throughout the economy.
Tuesday, April 29, 2008
I will never again vote for, "The Lesser of Two Evils".
There are two kinds of statistics: the kind you look up and the kind you make up.I've mentioned to a few folks that I'm in the process of updating an economic report for my bank to attempt to gauge the impact of this recession on our operations. The intent is to identify areas of risk in the coming fiscal quarters, and avoid them!
I was speaking with a woman at a class yesterday afternoon about the rate of inflation - in particular the CPI or Consumer Price Index. She was saying that things weren't so bad, as inflation was way down and it was all just a bunch of media hype.
I literally laughed out loud.
Then it dawned on me that not everyone is hip deep in finance and economics every day. People don't realize what a crock of crap they're being fed by our government regarding economic indicators. She didn't understand that no one that has to do any type of economic forecasting for real life situations considers the CPI to be factual.
So why would Nanny lie to us about the rate of inflation, and how do they tweak the numbers?
Why? Aside from the psychological calming affect of low inflation, it's to save a buck, that's why. CPI drives most of the contractual obligations of the feds. Medicare, Social Security, veterans benefits, long-term military development contracts - you name it - all get bumps based upon the rate of inflation, which is driven by the CPI. For instance, there are estimates that social security payments would be double their current levels if true CPI/inflation were reported.
Also, consider that if you have high inflation, the standard Federal Reserve Bank tactic is to raise interest rates - tighten the monetary supply - to "cool off the economy". That doesn't work so well when the banking system is dying on the vine due to a lack of liquidity. Short of a direct investment in private enterprise (de facto nationalization), the only way the Federal Reserve can pump money into banks is by lowering interest rates. You can't "sell the public" on rate reductions when you have run-away inflation.
So you make inflation go away.
CPI calculations have been around since the 1920's. It was supposed to indicate the change over time in the cost of a "basket of goods" typically purchased by the public. The boil on the ass of the American Presidency, Jimmy Carter, started the practice of "fudging" the numbers.
His administration began, "seasonally adjusting" items or removing them all together, when they were deemed as "volatile".
These included items most Americans use every once in a while. Like food and energy.
Every single administration that has followed had gotten more and more "inventive" with this supposed statistic. Now, anything that is subject to price spikes can arbitrarily be removed from the CPI calculation. Wouldn't want to rock the boat now, would we?
Not content with simply removing items from the calculation, they now get creative with ways to push down the inflation rate. I heard a great example given on Glenn Beck last night: Let's say a computer costs $1,000 and it has a certain sized hard drive and certain speed chip. Three years earlier, you could also buy a computer for $1,000 but it had a smaller hard drive, and slower chip. In Nanny's twisted mind (and CPI calculation), inflation has dropped because you're now getting more computer for your money. No matter that it still takes an actual thousand dollars to buy the computer.
Alan Greenspan was famous for pushing through the idea that when the price of something got too high, Americans would simply substitute the high-priced good with something less expensive. If you now count the less expensive item in your calculation, inflation falls. In his example it was steak exchanged for hamburger.
"Up until the Boskin/Greenspan agendum surfaced, the CPI was measured using the costs of a fixed basket of goods, a fairly simple and straightforward concept. The identical basket of goods would be priced at prevailing market costs for each period, and the period-to-period change in the cost of that market basket represented the rate of inflation in terms of maintaining a constant standard of living.
"The Boskin/Greenspan argument was that when steak got too expensive, the consumer would substitute hamburger for the steak, and that the inflation measure should reflect the costs tied to buying hamburger versus steak, instead of steak versus steak. Of course, replacing hamburger for steak in the calculations would reduce the inflation rate, but it represented the rate of inflation in terms of maintaining a declining standard of living. Cost of living was being replaced by the cost of survival. The old system told you how much you had to increase your income in order to keep buying steak. The new system promised you hamburger, and then dog food, perhaps, after that.
It all sounds so reasonable. There's no need to rile up the people. Keep them fat, dumb and happy and let us worry about 'adult stuff'.
Thanks Nanny. Glad ya got my back.
Sunday, April 27, 2008
A hero is no braver than an ordinary man, but he is braver five minutes longer.Jim Finnegan, my father's best friend and a true World War II hero, passed on Saturday.
--Ralph Waldo Emerson
A fighter pilot during the war, he shot down Germany's number one pilot - who was in a new-fangled jet, while Mr. Finnegan was in a prop-driven P-47. The attached obituary doesn't mention it, but I believe it was the first German jet shot down in the war. Take a look at the attached obituary for some interesting details about the incident.
Mr. Finnegan was one-of-a-kind. A proto-typical Irishman, he was hard drinking and hard living. He never did anything half-assed. When we were playing Pop Warner football as kids, he coached one of the opposing teams. I believe his teams won the league championship every year he coached them. Instead of first, second and third string, they were named, "Blood, Sweat and Tears". He drove them hard, but he was fair. Any kid could challenge any other kid for their position. It kept everyone on their toes and very motivated.
He worked with my dad when my dad was with the Sheriff's department, and Mr. Finnegan was a DA investigator. They had become friends a decade earlier when Mr. Finnegan was an investigator with the phone company. Although Mr. Finnegan was ten years my dad's senior, they were always together.
My youngest brother was closest with him, as his youngest son, John, was my brother's age. Mr. Finnegan taught my brother how to fly back in the 1980's.
He's had been in a nursing home for the past 10 years after a massive stroke.
Godspeed, Mr. Finnegan.
Saturday, April 26, 2008 (SF Chronicle)
James Finnegan dies - shot down top WWII pilot
Michael Taylor, Chronicle Staff Writer
Sixty-three years ago today, James Finnegan, a young Army fighter pilot
flying his P-47 over Nazi-occupied Europe, found himself in one of the
most storied dogfights of World War II, and at the end of it, he downed
the top enemy ace, Gen. Adolf Galland.
Years later, the two adversaries became friends, visiting each other in
California and Germany, where they swapped war stories, refought old
battles and talked about their families.
Mr. Finnegan, 85, died Tuesday at a retirement home in Marin County, where
he was well known in law enforcement circles as an investigator, first
with the old Pacific Telephone & Telegraph Co. (later Pacific Bell), next
with the Marin County district attorney's office and, finally, as a
(Galland, who survived being shot down by Mr. Finnegan that April day and
managed to land his crippled jet at an airstrip near Munich, died in
It wasn't until decades after the war, thanks to a war history researcher,
that Mr. Finnegan learned he was the one who shot down the famous German
pilot and the two began corresponding. Finally, in 1979, they met, when
Galland came to the Bay Area.
"I was kind of in awe," Mr. Finnegan's son Dennis, the retired
undersheriff of Marin County, said Friday. He recalled how he watched
these two old war dogs meeting up for the first time in more than 30
years. "They were both very engaging people. (Galland) was very animated,
a very good storyteller. And what I learned was that he wasn't a Nazi. I
got the sense that he was a hunter and this was more about the hunt, more
about winning than anything else."
In an interview Mr. Finnegan gave 12 years ago for a Web site devoted to
Galland's career (members.aol.com/geobat66
Finnegan said that on the day he shot down Galland, he was escorting some
Allied bombers when he "saw two objects come zipping through the
formation, and two bombers blew up immediately. I watched the two objects
go through the bomber formation, and thought, 'That can't be a prop job
... it's got to be one of the (new Messerschmitt Me) 262 jets."
He fired off a 3-second burst, then hit the throttle on his P-47 and found
"I was going so fast, I went right through everything, and guessed my
speed at about 450+ mph." Mr. Finnegan figured he had hit one of the
German jets, but wasn't sure, so he "recorded it as a probable." The
"probable" turned out to be Galland and he was indeed shot down.
During the war, Mr. Finnegan met an Army nurse named Frances in France.
They married after the war and began a family.
He worked as an engineer for Pacific Telephone & Telegraph and during his
off-hours he kept flying planes until, at his wife's urging, he grounded
himself until the 1970s, when their children were all grown and he could
take to the skies again.
"She was fine with it," Dennis Finnegan said. "She used to fly with him
all the time." Frances Finnegan died three years ago.
By 1977, Mr. Finnegan was working as the San Francisco liaison between
Pacific Telephone & Telegraph and law enforcement agencies. When he
retired from that position, he got a job as an investigator for the Marin
County district attorney and later became chief investigator. He retired
from that job in 1987 and opened up a private investigator business, which
lasted until he had a debilitating stroke in early 1998.
Mr. Finnegan is survived by two daughters, Michelle Sabourin of Santa Rosa
and Kathleen Willmers of Kenwood; three sons, James Finnegan of Fresno,
Dennis Finnegan of Novato and John Finnegan of Long Beach; 12
grandchildren; and eight great-grandchildren.
A rosary will be read at 6 p.m. Sunday in the chapel at Nazareth House,
245 Nova Albion Way, San Rafael. Funeral mass will be held at the same
chapel at 10 a.m. Monday. The family suggests contributions to Nazareth
House, 245 Nova Albion Way, San Rafael, CA 94903.
Labels: Life and Times
Thursday, April 24, 2008
"We just want to protect them from abuse and neglect. We're not trying to change them."The hell you're not.
--Texas Child Protective Services spokesperson, Shari Pulliam
The charade in Texas continues. "It's for the children." This makes me want to puke.
I continue to be stunned by what is happening to these people. First, they have their kids snatched out from under them without a shred of evidence that any kid has been abused. Lots of whispers about "marrying off young girls" turns into the mass abduction of over 400 children by the state.
No investigation. No charges. No court date. No Due Process. Nothing. The state shows up with guns, badges and buses, and takes the kids. They force DNA samples from the kids. They're now handing them out to foster families like they are just so much chattel.
The women were moved out in preparation for moving the last of 437 children to group homes, shelters and residences, some hundreds of miles away, over the next few days. Buses earlier had taken 138 of the children away.Keep them doggies movin'... They clearly do do things bigger in Texas. Including screw ups. Maybe especially screw ups. Remember Waco, anyone?
Now, in a total bastardization of our legal system, the parents are being graced with an audience with Nanny.
A Texas appeals court on Thursday agreed to hear arguments that hundreds of children the state took from a polygamist compound should be allowed to see their mothers while the massive custody case is resolved.Nanny may allow these misguided, backwards, fundamentalist heathuns the chance to see their kids again. How big of them.
Nanny is good. Nanny is wise. Nanny is benevolent.
Conservation is humanity caring for the future.As a kid, I spent a good deal of time up in the Sierra Nevada mountains. We had some family members that lived in the Truckee, CA and Stateline, NV areas. It's where my brothers and I learned to fish with our paternal grandfather.
My maternal grandfather took me on a week-long backpacking trip down to Havasu Canyon (an offshoot of the Grand Canyon) when I was 10 years old. We hiked in and out, with full packs, from the rim to the canyon floor and back again - no mule packing.
I have taken my family camping, done backpacking trips down in Big Sur, gone on countless fishing trips all across the state and skied in the Sierras. I guess what I'm getting at, is, I have an appreciation for nature. Enjoying it has been a part of my life since I was a kid.
I've always been a "leave no trace" kind of guy, whenever possible. I think that is part of being conservative in general. Don't waste resources. Don't trash the joint. Don't just think of yourself.
I guess you could call me a Treehugger without the political agenda. I'm not willing to shut down an industry to save a species of dung beetle, but I do think reasonable alternatives need to be explored.
I read a story like this, and I see some hope for us all. For some time now, one of the founders of Greenpeace, Patrick Moore, has been a proponent of nuclear energy. He has recognized that it will give us the power we need while not spoiling the environment. While I don't agree with his belief in the likelihood of man-made global warming, nuclear energy lets both sides of the debate come away with a win.
Greenpeace founder Patrick Moore says there is no proof global warming is caused by humans, but it is likely enough that the world should turn to nuclear power - a concept tied closely to the underground nuclear testing his former environmental group formed to oppose.I want to wean the US off of oil from a national security perspective. To think the Saudis don't exert influence over US politics is naive. We need to cut those ties so we can tell them to go breed with a camel if we so desire. We don't have that luxury right now.
The chemistry of the atmosphere is changing, and there is a high-enough risk that "true believers" like Al Gore are right that world economies need to wean themselves off fossil fuels to reduce greenhouse gases, he said.
Also, I think that the Peak Oil believers are closer to the mark than the man-made global warming crowd. Oil, at some time, will run dry. It's a finite resource that has been used to excess, and which the developing world has recognized as the way to their salvation. That is not a good combination.
What burns my ass, though, it how Moore's former cohorts won't even consider nukes as an alternative. Nukes are evil, weapons-wannabees. Their alternatives are to regulate the way you, I and American business operate. They want to tell you how to live your life so your "carbon footprint" is eliminated. They want us to return to our pre-industrial society.
Yeah, it couldn't be because it makes sense. It couldn't be because he's a realist. I couldn't be that he looked at the problem rationally. It must be because the "unsafe and risky" nuclear industry has him in their pocket. An industry that is so "unsafe and risky" that there has never, EVER been a death at an American nuclear energy facility.
In recent years, he has taken on causes unpopular with his former group, like old-growth logging, keeping polyvinyl chlorides and now nuclear energy.
He says his change of heart comes from his background in science and a different approach to sustainability.
He sees a need for maintaining technologies that are not harmful while fixing or replacing those that are harmful.
"We don't believe we have been making too much electricity," he said. "We believe we've been making energy with the wrong technologies."
His critics, like Andrea Shipley, executive director of the Snake River Alliance, say he has simply sold out.
"The only reason Patrick Moore is backing something as unsafe and risky as nuclear power is he is being paid by the nuclear industry to do so," Shipley said.
I don't believe there has ever been one in France, either, where they get upwards of 80% of their power from nukes. The French nuclear program was patterned after the American system.
Hmmm. Who is in who's pocket? The founder of Greenpeace is in Idaho promoting nukes (they're thinking of building one there). What kind of coverage of the event can be found in the MSM? You'd think a new nuke might be newsworthy.
I did a Google news search of 'greenpeace +boise'
There was...... 1 hit. It was the story I linked above.
Just for grins, I did a Google news search of 'nuclear energy +dangerous'
379 hits. Remember, these are not websites, these are recent news articles.
At least there's no bias in the press...
Wednesday, April 23, 2008
Avarice, the spur of industry.I recently read an article over at Hermit's place about rising food prices. The culprits for the increases are many: Ethanol subsidies, drought, crop diseases, rising demand. In the article was a quote by a Wall Street mutual fund trader that was recommending that Americans begin stockpiling food.
And there are very good reasons to believe prices on the shelves are about to start rising a lot faster."Load up the pantry," says Manu Daftary, one of Wall Street's top investors and the manager of the Quaker Strategic Growth mutual fund. "I think prices are going higher. People are too complacent. They think it isn't going to happen here. But I don't know how the food companies can absorb higher costs."This started my "Spidey Sense" to tingling. Something just didn't seem right. Why is some Wall Street guy talking about food?
So I sniffed around and found some information on this guy. It seems he made a bunch of money in 2006 betting on food price increases.
His home-run stock in 2006: agribusiness specialist Bunge (BG), a play on the burgeoning use of biofuels. "If I don't beat the S&P next year, I'd say it was nice knowing you," Daftary says.Not surprisingly, this guy is still invested in the Agribusiness trade. He now has a chunk of Archer-Daniels-Midland (ADM), the huge agribusiness concern. In fact, it's his 5th largest position. He's also HUGE into mining and oil.
Anyways, that's not my issue. This guy can invest in whatever he wants, and if he weren't pimping the public to make his company some money, he wouldn't be doing his job. His job is not to look out for the best interests of America, it is to look out for the best interests of his investors.
No, what was bugging me was this thought, "If this guy is working to manipulate food prices, is it likely he's the only one doing it?" Not likely.
My snooping around got me this:
WASHINGTON, TORONTO -- Food producers lined up against investment fund managers during an extraordinary meeting in Washington yesterday, saying they are partly to blame for driving up food prices and playing havoc with commodity markets.So, this is going to turn into a "He said/She said" pissing contest. The hedge funds are saying they are investing in agribusiness futures because global demand is pushing up prices, and they can make a couple of bucks. The farmers and trade groups are saying that prices are going up because speculation on futures is jacking up prices in excess of normal economic pressures (supply and demand). No one wants to be the bad guy.
"Sixty per cent of the current [wheat] market is owned by an index fund," said Tom Coyle, of the National Grain and Feed Association. "Clearly that's having an impact on the market."
Billy Dunavant, president of cotton producer Dunavant Enterprises, was more blunt: "The market is broken, it's out of whack."
I think they're both right. There has been a reduction in global production in virtually all food grains, and a simultaneous increase in demand. That's going to push up prices. That price increase trickles down to others that use those raw goods - beef producers, pizza makers, etc. People reading stories of price spikes and shortages results in increases in purchases. This results in more shortages, more press, more panic buying.
I'd just like to better understand the impact that the speculation has had on prices. When you get hedge funds and speculators involved in something, you're now dealing with a mentality of, "Get in big. Get rich. Get out quickly." That's not a great perspective when you're dealing with basic, life-sustaining commodities.
I still think the biggest driver of this issue is on the supply and demand equation, be it from government subsidies to grow ethanol corn, government subsidies to NOT grow on some land, crop failures, or more demand from emerging economies.
This didn't give me the "warm and fuzzies":
Diana Klemme, a vice-president at Atlanta-based Grain Service Corp., an agricultural brokerage and risk management firm, said corn growers are two rainy weeks away from a "crisis." If anything threatens the current crop, there will be a cascading effect throughout the industry, she said. "Hopefully God will be merciful, but if this impact does come about, it will be devastating," she said in an interview.Keep your eyes on the Weather Channel for rain clouds in the corn belt of America.
Tuesday, April 22, 2008
I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said.I've been busy as hell doing an update to an economic report I wrote about 6 months ago regarding the impact of a recession on my bank. Clearly, we're at the leading edge of a recession. What's more difficult to determine is the depth and breadth of this beast. Could it even turn into the dreaded "D" word?
There are too many factors to make a definitive call right now, but I've been surprised by a couple of my findings so far. These are strictly anecdotal, but they have me scratching my head. If they are in fact a trend, they could be signaling a horrible couple of years for my bank and for The People's Republic of California.
The conventional think has been, with all of the foreclosures on Single Family Residences (SFRs), the rental market would be on fire. This proved to be true when the first waves of foreclosures started hitting. Virtually across the board, rents went up. Big city, little burgs. Rural and suburban. They all saw increases.
For my bank, this was great news. A significant portion of our loan portfolio is in multi-family properties. Mostly apartment complexes or a type of housing unit called an SRO - Single Room Occupancy. That's the politically correct term for "flop house". It's where the big cities (mainly San Francisco and Los Angeles) pay to have individuals on welfare spend the night.
These things are cash-cows for the owners. They are generally pieces of shit (low maintenance), former hotels in VERY bad neighborhoods. But the cities need/want them, and they pay their mortgage on time, so we like them, too.
So far, the SROs are performing as expected. Apartment complexes, though, are a different story.
We're starting to see some signs of a deeper weakening economy.
I recently reviewed our delinquency list. This is for late loan payments OR if they have not paid their taxes or insurance (this is a predictor of bad things to come). The list has doubled in the past month. Half of these properties are apartment complexes.
So, if you've just lost your home, where do you go? If you still have a job, you most likely get an apartment. You could also move in with family to squirrel away some money to get another place once things settle down.
But what if you lost your job as well? What are you going to do then? What if you also have a spouse and kids?
If you've hit rock-bottom, and are by yourself, you'll end up in an SRO or some kind of shelter. You might also end up with your family, if you're lucky enough to have someone near. Or you could get the hell out of Dodge, and bolt from California. If you have kids, you only have the option to move in with family, or leave the state options. SROs won't work.
None of these options bode well for my bank, or for the People's Republic.
No more SROs are being built. No city intentionally lets a neighborhood go to hell, with the commercial properties following suit. It takes decades for this to happen. There are fewer available old buildings that are suitable for SRO uses.
With people moving into family member's homes, that reduces rental prices on apartments and other Multi-family properties. Supply and demand. Same goes with people getting out of the state. If they're not here, they're not renting!
This scenario puts pressure on the landlords, which then puts pressure on us. And on the State. Especially if people are leaving for good or are being converted to the Welfare Class. Lower tax revenues plus increased social services equals budget deficits. This is especially bad timing, considering CA is already $15 billion in the hole even before the fiscal year starts in June.
My gut tells me people are getting out of the state. If you have no job or decent prospects, why would you stay in the state with one of the highest costs of living in the US? Maybe I'll check U-Haul rental numbers for some trends. I can't absolutely verify this now, as census tracking data is always way behind the times. It's one of those things where the government merely acknowledges what everyone already knows. "Uhm, they all left." Yeah, thanks for the heads-up.
As an aside, we're also seeing delinquencies in our retail properties. Mostly the ones that rely upon Discretionary Disposable Income. Like bakeries, high-end butchers and hotels/motels. People just don't have the money for "frills".
They're staying home instead of going to the movies. They're eating chicken instead of rib-eye. They bring their lunch to work instead of buying-out. They'll get something repaired instead of buying new. Even if they have a good job and a roof over their heads, people are "hunkering down" for the coming storm.
I know I am, even if Dubya doesn't want to see it coming.
Friday, April 18, 2008
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.It seems that they have found the "mystery caller" for the compound in Texas.
--Fourth Amendment of the Constitution of The United States of America
Texas Rangers are investigating a series false phone calls to a Texas crises hotline that Colorado Springs resident Rozita Swinton is alleged to have made in late March 2008. The calls prompted the invasion and evacuation of a suspected Texas polygamist compound that has separated 416 children from their mothers.This article doesn't mention it, but this woman is supposedly, well, nuts. Whacko. A screw job.
THESE FUCKING NAZI'S ABDUCTED THESE CHILDREN ON THE WORD OF A CRAZY LADY! Even if she were stone-cold sane, how can you abduct these children without a trial? How about some child-specific evidence?
This is not about pedophilia. It's not about under-aged marriages. It's not about polygamy. It is all about a group of people that act and think differently from their neighbors, and they had to be shut down.
In America, if there are allegations of any breach of the law, the police are supposed to investigate and issue arrest warrants if needed.
In America, an entire group is not supposed to be presumed guilty by association.
In America, we have a Constitution that gives us the right to live our lives as we see fit as long as our actions do not infringe upon the rights of another. Even if we teach our children differently from the rest of society. Even if our beliefs are not mainstream.
So how the fuck can this be happening in Texas?
I'll tell you something. I'm not much of a "joiner", so the likelihood of me ending up in a compound such as this would be very slim. But if storm troopers ever tried to abduct my kids prior to an investigation, a warrant and a trial, there would be blood in the streets.
Thursday, April 17, 2008
“Success is not the key to happiness. Happiness is the key to success. If you love what you are doing, you will be successful.”I've told my boys since they were little that I don't care what they do for a living. Just set the goal to be the best possible "do-er" in your chosen profession. Be a teacher like your mom, be a banker like your dad, or pick your own path for what you want. I've always, always, always told them DON'T just work to make money. You'll end up dead at an early age. Money can't bring you happiness.
Or so I thought.
Over the past quarter-century, economists and psychologists have banded together to sort out the hows, whys and why nots of money and mood.It seems, to a certain extent, money can bring you happiness. But it's a diminishing return scale. Once you hit a certain level, the happiness index wears off.
...going from earning less than $20,000 a year to making more than $50,000 makes you twice as likely to be happy, yet the payoff for then surpassing $90,000 is slight. And while the rich are happier than the poor, the enormous rise in living standards over the past 50 years hasn't made Americans happier.What I've told my kids, though, is money gives you choices. If you want to be the best pottery maker, that's great, but can you feed yourself, put a roof over your head and clothes on your back by doing that? Do you want kids, a wife, a car, an occasional vacation? If that is what you want from life, pottery makes you happy and can provide for you financially, go to it.
I've lived my life in such a way to (hopefully) allow me to retire early, if I so choose. My wife and I make a decent combined income, but other than our house, have few visible assets to show for it. I've never purchased a new car in my entire life. I never will. No flashy jewelry for me or my wife. I've only vacationed in 3 states other than California (married in Hawaii, Vegas/Tahoe once in a while and my recent trip to Idaho). I've been to Mexico twice (my only foreign travel). Drove in each time. The last trip was 25 years ago. I just don't blow money on stuff like that. We're homebodies! Our money goes in the bank.
Our one "indulgence" is throwing a couple of big parties each year. We have our annual Oktoberfest party where we have 75 or so friends over to eat and drink my homebrew. We usually have a Super Bowl party of 40 or so folks, and Christmas with our combined families, usually 25-35 people with many spending the night.
But, we're well on our way to early retirement. My wife, who is 5 years older than me should be able to retire [knock on wood] in under 5 years.
I've written in the past about how I got into banking. I kind of fell into it when I started college. At the time, I had no idea what I wanted to do, and didn't really have anyone to bounce ideas off of about what careers to consider. I really lucked out.
My wife and I talk to our boys quite a bit about what they want to do. My oldest talks with me regularly about the various options for paramedic school (he's just applied at two) and jobs afterwards. It seems like the whole "college might actually help me" is sinking in for my youngest. He doesn't have a direction yet, but he's changing and maturing. He turned 19 a few days ago, so I'm not overly worried. He's going to do well. He is our "free bird", though!
I hope they see how, and understand why we've chosen to live our lives the way we do. My wife and I both made choices that cost us earnings at the time, but let us be a big part of our boy's lives. I coached them in baseball and basketball for 6 years, and my wife worked (for lower wages) at the Catholic school we sent them to so she could be around them (and kick their tails when need be). In the early years, we came frightfully close to losing our home, but got through it.
In the end, we raised a couple of honorable, independent thinking citizens, that we're very proud of.
If it is a coin toss between money or family, family wins. But being realistic about money needs makes things go a whole lot smoother. How much you make isn't the key. It's what you do with it that counts.
Wednesday, April 16, 2008
“Be the change you want to see in the world.”If you're looking for a reason to start stockpiling some staples, how about this from Bloomberg:
Rice traded in Chicago gained 2.5 percent today to $22.73 per 100 pounds on rising demand and export curbs from some producing nations. Rice, the staple food for half the world, has more than doubled in a year, while wheat has advanced 94 percent and corn 62 percent.I purchased 20 lbs of rice a month ago, and its price had increased from $8 to $9 - a 12% increase in one month. Same brand, same store. I just received a 45 lb bucket of wheat from Walton Feed. It took a month for them to ship (I called, and they had said their shipment had not come it). In that 30 day period, the price has risen 15%.
Farmers in Arkansas, the biggest rice-growing state in the U.S., have planted just 2 percent of this year's crop compared with 31 percent last year after heavy rains, according to an April 14 report from the U.S. Department of Agriculture.
Wheat, corn and soybeans have also risen to records this year on lower global stockpiles and rising demand. The UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials has gained 18 percent this year.
Kazakhstan, the world's fifth-biggest wheat exporter, yesterday halted shipments until Sept. 1 to ``ensure food security,'' according to Prime Minister Karim Masimo.
At the end of March, I purchased a pair of Black Berkey replacement filters to build a DIY water filter. I hadn't heard anything from them since the initial email confirmation. So I called and it took 2 days for them to get back to me. They are 3-4 weeks behind in their orders. They were already busy with the prepper folks, but when that news story about all of the hormones and crap being in the water hit the airwaves, they were swamped. They went from 50 orders a day to 200.
I did find another supplier and ordered another pair, but shortages in a lot of things (isn't there a Mountain House shortage too?) seem to be becoming very commonplace.
I've bitched and moaned a number of times about the do-nothing pukes at the NRA. They continue their tone-deaf ways by letting the anniversary of the Virgina Tech slaughter pass without talking about the number of people that would not be dead had only ONE PERSON had a handgun for self-defense.
The Brady Bunch is all over it. The communists in California are using it to push the robo-gun (biometric identification) legislation, even though the technology does not exist to enact the law.
Let that sink in for a second: The idiots that run my state want to pass a law requiring technology - which does not exist - to be present in all handguns sold in the state.
New technology may make that reality, and lawmakers in Sacramento are planning ahead.No, Mr. Chang, it IS fiction. If it were reality, it would be, uhm, real. Get it?
In the movie, "Judge Dredd," smart guns will fire only if they recognize the shooter's palm print. Otherwise the weapons don't work.
That technology is just a few years from becoming reality, as companies worldwide race to put biometric images of hands into the grip of the gun.
"If the person is not recognized, the gun would not be unlocked. So the gun would not fire," said Ho Chang from Nanoident Biometrics.
Chang came to Sacramento assure lawmakers that smart guns are no longer fiction.
Is the NRA ever going to grow a pair and take this issue head-on? Their silence gives legitimacy to the gun grabbers message. What is their function if not to be an advocate?
Useless as tits on a bull.
(BTW, I hope to have some good news on this front sometime next week)
This crap going on in Texas just doesn't smell right to me. Reeks of Waco.
Let's say that some kid was being abused by the leaders of the sect. Why do you not go in and interview and possibly arrest the person or persons suspected? Why do you shut down the whole place and snatch up 400+ kids?
Where's that Innocent Until Proven Guilty stuff? If some guy screwed an under-aged girl, with or without her consent, he should be thrown in jail. But how can they shut this place down on supposition and the "testimony" of a single, anonymous source?
And if it is official government policy to shut down religious orders where the leaders are sexually abusing kids, why is the Catholic Church still in business? Or does it only count when the kids being abused are of the opposite sex?
On a related note, seriously, what is the reason for the illegality of polygamy? Why would the government give a damn how many wives (or husbands for that matter) that a person has? Is it better to do as we do now, where a man can run around and spread his seed at will? Why would we NOT want to encourage the man to marry all of the women he has impregnated? Would that not increase, at least occasionally, the number of kids cared for by both parents? What would be the downside?
Tuesday, April 15, 2008
“What is the difference between a taxidermist and a tax collector? The taxidermist takes only your skin.”Everyone has heard Obama's "bitter" comments:
"You go into some of these small towns in Pennsylvania, and like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing's replaced them. And they fell through the Clinton administration, and the Bush administration, and each successive administration has said that somehow these communities are going to regenerate and they have not. So it's not surprising, then, that they get bitter, they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations."When I first heard it, I wasn't pissed off, per se. I think he's mostly right. People are bitter, angry and near the tipping point. Especially those of us who pay the nation's bills.
I take it back. I'm not bitter, I'm in a fucking blind rage.
What pissed me off was his condescending attitude. He was putting down a great portion of America - albeit, a shrinking portion - for turning to their religion for support during tough times, or guns to provide a means of self-defense or as a way of putting food on the table. He thought it silly that people would actually get bent out of shape because illegal aliens are robbing the public coffers and taking jobs from American's, or at least keeping wages depressed.
He was "dissing" people for taking care of their problems in their own way, and not relying on Nanny to fix their ills. My initial thought was, "Go fuck yourself, Barack." That thought has not changed.
What came out of the "cover your ass" period following his gaffe so clearly laid out how Obama thinks. I have not heard a single pundit, reporter, editor or scriber comment on this:
And after years and years and years of this, a lot of people in this country have become cynical about what government can do to improve their lives. They are angry and frustrated with their leaders for not listening to them; for not fighting for them; for not always telling them the truth. And yes, they are bitter about that.It's because of THAT mindset that I'm bitter. The assumption - no, the presumption - that it is the job of the government to improve my life. The press didn't even blink at it because it has become the norm.
[Rhetorical question alert] Don't they teach about the Constitution in school any more?
A huge chunk of the general public now expects Nanny to take care of them. They have never known anything different. They see the checks come, cradle to grave. Looks like a good gig. The WIC, the food stamps, the subsidized housing, the government health care, the tuition-free schooling.
They don't know how to care for themselves. You then get snake-oil salesmen like Obama and Clinton that beat the drum about how bad "the rich" are, and "getting your fair share", and how it's not their fault they haven't made anything out of their lives. It's the government's fault you're a worthless piece of shit failure, and I'm here to fix that!
Yeah, I sent in my taxes today. I just want to puke. Go see where your tax dollars are spent.
I see the following items as being the only constitutionally authorized spending:
Military - 20%
Civilian and Military Retirement - 4%
Veterans Benefits - 3%
Total Constitutionally authorized spending: 27%
Out of an annual budget of $3 trillion (give or take a hundred billion or so), that means $800 billion is legit. For a country of 300 million people, that really doesn't seem out of line. But it's only about a quarter of what we actually spend!
Everything else is Income Redistribution.
The site doesn't break down the components of the Social Security chunk - retirement versus disability. While I don't like the idea of federalized retirement plans, the people who have put money into the system should get their money back. That includes me [laughing hysterically at the thought of actually getting something back].
It's the Disability portion that pisses me off. It plays into the whole Nanny philosophy. The benevolent Uncle Sugar will soothe your ills. That's not what government is supposed to be for. That's a personal responsibility. If you have kids, you have the chance that they may be disabled in some way. Plan for that. You might get into a car accident and never be able to work again. Plan for that. You're going to get old and your body will break down. Plan for that, too.
Instead we spend and indulge and gorge because we know Nanny will wipe our ass if something goes wrong. We have whores like Obama and Clinton and all the rest that are more than willing to make the promises of a better life through income redistribution.
And as our federal budget shows, they've demonstrated the ability to keep that campaign promise.
Monday, April 14, 2008
“Man gives every reason for his conduct save one, every excuse for his crimes save one, every plea for his safety save one; and that one is his cowardice”This all gets so tiring.
--George Bernard Shaw
Apparently, Uncle Sugar, our benevolent
Award-winning singer Alicia Keys has claimed the US government invented "gangsta rap" to get black people to kill each other.Can you see it now? Dick Cheney in the basement of some dusty federal building, looking like he's putting lotion on his hands (you know how those evil villains do that hand wringing move?) coming up with ways to destroy blacks.
Apparently there weren't enough foreign targets on the neo-con "hit list", so he decided to go local. Yeah.
You know, there may be something to it, though.
I've got to say, I still have not seen my sentiments on this subject put any better than Joan said it over at Primordial Slack:
So, you can go on blaming me for everything you think, do, and say. But as long as you think I'm your problem, then I'm your master.Here's an idea: Why don't you get bitter like us white folks. Embrace guns, God and national sovereignty. Hey, it's worked for us.
Saturday, April 12, 2008
It wasn't raining when Noah built the ark.Generally speaking, when people talk about "preps", it's for The End Of The World As We Know It (TEOTWAWKI). I'm more of a SHTF (Shit Hits The Fan) guy. I plan for specific, short-term disasters that I believe have a high likelihood of occurring.
I live in California, so I prepare for earthquakes, mud slides, fires. I think there is a great chance for the Avian Flu to hit the states. The ports of Oakland and Stockton are major shipping ports, so they both probably have a terrorist bulls-eyes on them. Same goes for the 4 international airports in my general vicinity - San Francisco, Oakland, San Jose and Sacramento.
It is in my nature to plan and prepare. I think that has been reinforced by working in banking for the past 30 years. Business Continuity has been a part of my job for a very long time. For a good deal of those years, I was the Uber Geek - the Chief Information Officer or some variant of that. Back-ups, redundancies, alternate site plans, threat assessments and contingency plans have long been a part of my every day work.
I now run our Enterprise Risk Management (ERM) group so my field-of-view is long and wide. I get paid to predict the future! It is an interesting position. Most of it focuses on financial trends (particularly unpleasant future for my bank because of the way we're structured), customer information security (a breach of customer information can cause an immediate and devastating loss of confidence in a bank, so people will go elsewhere) and Business Continuity (you're not a bank if you're not open).
When it comes to preparedness, I think of my family and personal life like a business. What are likely threats and their likely impact, and what can we reasonably do to prepare for continued operations in the event of a disaster?
We consider there to be three main legs to our preparedness: Planning, Testing, Modifying.
For personal preparedness, there are a ton of sites and books out there for all flavors of expected disaster. The key is deciding what YOU expect to happen, and planning for it. Will there just be a blip in the economy, a full depression or a full-scale melt-down? Plan accordingly.
Part of the planning process is developing strategies so that a likely event will simply pass you by or only cause a minor inconvenience. At work, for instance, we absolutely expect hackers to attempt to penetrate our systems. The likelihood of an attempt is 100%.
In response, we deploy firewalls, user security schemes, virus software, router hardening, etc., to keep bad guys out. If they do get in, we compartmentalize our databases to keep the damage localized and trip wires to tell us something isn't right. We have redundant servers for mission critical applications.
How do you do that personally? As an example, I work in Oakland, a town with a highly-charged racial demographic. If Obama has the Democratic nomination "stolen", I won't be going to work until I see with my own two eyes that rioting is not happening. It Oakland burns, I'll have dodged the bullet, literally and figuratively.
If I thought any of the major infrastructure "icons" of the Bay Area were in imminent danger of an attack from a dirty nuke or something similar, I'd move, at least temporarily to a family member's home. Some are as close as an hour away, some are as far away as 6. They all know we're coming - with our supplies - if the SHTF.
The second step, testing, is what most people neglect. They have the attitude of, "I've got my guns, butter and gold. I'm good to go." This is a horrible mistake.
At work, we have 4 types of testing we follow: Data recovery (can we get to our backed-up data restored from tapes stored off-site?), Desktop (we take the recovery manual, sit in a conference room and "war-game" to ensure that all bases are covered for a scripted disaster), Functional (individual departments come to our data center and run live work on back-up systems) and Full-Scale (individual departments relocate to their designated recovery site and run their branch/department off-site).
You can just as easily do the same for your personal preparedness testing. Can you prepare a meal only using the food and gear in your preps stash? Open a tin can, start a fire, spoon the food into your face? Gather and sanitize water, close a wound, build a shelter? Make and set a snare, hit what you shoot at and prepare a game animal?
Have you tested alternatives? Can you shoot straight with your weak-hand? Can you start a fire without "flicking a Bic"? How many ways can you find, then make water safe to drink? What methods have you tested for keeping you and your family out of the weather? How may ways can you safely dispose of your family's bodily waste?
Testing exposes the weaknesses of your skills and your plan. So you modify.
You pack your stash with Bic's, waterproof matches, magnesium fire starter bars and a magnifying glass. You add the skill of making fire with a spindle and board.
You store sufficient quantities of water for your family to ride out your expected disaster, plus store iodine and chlorine tabs. You buy a filter that removes the bugs. You teach yourself how to identify places to get water. Then you go get some.
You safely store white gas, propane and denatured alcohol - and the burners to use them with. You teach yourself how to prepare a camp stove with found wood and an on-the-spot made cooking tripod.
Use your testing to identify your weakness before you need to depend upon yourself to survive.
You also modify if there are changes in the assumptions upon which your plan is based.
Personally, I don't like what I've seen happening to our economy. Late last year, I got totally out of the stock market in my 401(k). I've put 1/4 of our cash reserves into gold and silver. We've cut back significantly on our "fun" spending, and more is going into precious metals. We also keep much higher than normal quantities of money in our home in case of a rapid collapse (which I don't think will happen).
I think the likelihood of some sort of pandemic is rising rapidly. Avian flu and the flood of illegal aliens bringing in diseases long though eliminated in America, is of immediate concern to me. In that event, government mandated "social distancing" is a real possibility. I've increased our on-site supplies to take care of us for at least 4 months. I've taught myself how to preserve food - salting, dehydration, smoking, canning. Hell, this weekend, I'm canning up some complete meals (BTW, if you don't subscribe to Backwoods Home Magazine, you're missing a great resource).
If the pandemic does hit, lawlessness will increase exponentially. I have sufficient quantities of guns and ammo - and the skill to use them effectively - to protect my household. From nose-to-nose to "reaching out and touching somebody" 200 yards away. All members of my household also know how to use every gun we've got.
A final thought: I think where a lot of people fall down in their preps is assuming that the worst will happen. This can become an obsession, and in many cases, a waste of resources.
For instance, what is the likelihood of your worst case scenario happening in the next two years? A dirty nuke, a total economic collapse, foreign invaders on US soil?
At work, we could buy the top-of-the-line detections systems, firewalls, network intrusion specialists and security devices. We could buy buildings in far-off states pre-stocked with duplicates of our systems in the event of a breach. We could have armed guards standing behind every teller and every executive to protect against robbery/kidnapping. These could cover every conceivable circumstance that could rear its ugly head.
And we'd also be out of business. Our focus would be on prevention and protection, not on serving our customers and making money for our shareholders.
You've got to live life. Preparing for bad times is just good, common sense. Crawling into a hole, living like the SHTF has already happened, is in my opinion, unwise and unhealthy. Prepare for what you think is likely to happen - plus a little more - and you can live in this pre-SHTF world with a sense of confidence and enjoyment.
Thursday, April 10, 2008
We are all faced with a series of great opportunities brilliantly disguised as impossible situations.
--Charles R. Swindoll
There's oil in them thar hills, err uhm, plains.
North Dakota and Montana have an estimated 3.0 to 4.3 billion barrels of undiscovered, technically recoverable oil in an area known as the Bakken Formation.This is a lot less than the 500 billion barrels people were getting hard over, but still, it increases our country's known reserves by 15-20%. As technology improves, more will become, "technically recoverable". Kinda like a piggy bank made out of Kevlar. We need to figure out how to crack that pig WIDE open.
A U.S. Geological Survey assessment, released April 10, shows a 25-fold increase in the amount of oil that can be recovered compared to the agency's 1995 estimate of 151 million barrels of oil.
I hope we use this bit of good news to go out and economically develop alternative energy sources. Get us off the Saudi teat.
We won't, though. We'll look the gift horse in the mouth, and piss away the breathing room this affords us.
Nukes. Coal. California coast oil. ANWAR Oil. Florida coast oil. Voluntary conservation.
We need to get real.
Tuesday, April 08, 2008
Doh!Sorry, I can't disclose where I got this, but it's from a financial services firm my bank uses. Let me say that we have used them for the past 5 years or so to help with our investments, and they have (so far) been right on the mark with their analysis.
As a point of reference, NBER, the National Bureau of Economic Research, is the official "declarer" of the start and end to a recession.
Bottom line: The most important of the four criteria used by NBER to determine the start of recessions - employment growth - is sending a clear negative signal. The other three - real income, business sales and industrial production - are at or below zero growth. It is very likely the official start of the 2008 recession will be January. In the meantime, it remains to be seen how severe the recession will be. One strong positive is the fact that the Fed is well out in front of where it normally is at this point in the cycle. Dislocations in the housing and financial markets are the most powerful negatives. The Fed believes the second quarter will be worse than the first. We think they are right. The economy has not turned the corner toward recovery yet.During the first quarter, private industry dropped 286,000 jobs. Government increased employment by 24,000 [gasp!], so the net loss in non-farm jobs was 262,000.
Oh, and by the Fed being, "well out in front of where it normally is at this point in the cycle," means they started de-valuing the dollar earlier this time. Thanks for that, Ben.
Buckle up, kids. It's gonna be a bumpy ride...
marionette: A puppet moved by strings, as in a puppet show.
Sometimes, you've just gotta shake your head. It simply amazes me how people or organizations think. They can see a bad situation and they find a way to get a personal advantage as a result of the situation. They use the situation as "cover".
My bank is a member of the ICBA - the Independent Community Bankers Association. It's a trade group that looks out for the best interests of small banks. They have lobbyists in DC to keep an eye on the big banks to make sure they aren't paying off Congress-critters to pass any legislation that would help put us out of business. Ya gotta fight fire with fire.
Anyways, I got an email from them that was unusually strong in its stance against the "realignment" of federal regulators proposed by the Secretary of the Treasury last week. As I posted last week, I agree with them. His proposal is a horrible idea. Still, I was surprised by the anger in the email.
The letter is only available online for members, so I'll cut and paste an important section:
Long-term plans, called the "optimal model," would create three super regulators (Prudential Financial Regulator, Conduct of Business Regulator and the Market Stability Regulator), and shift the focus of federal regulation from functional regulation to an objectives-based model. The Prudential regulator would replace the OCC, OTS and National Credit Union Administration; the Business Conduct regulator would combine the functions of the CFTC and SEC, and some roles of bank regulators; and the Market Stability regulator's role would go to the Federal Reserve. The FDIC would continue to serve as a federal guarantor, but would lose much of its supervisory powers.So now it was all clear: Big Business was using the sub prime melt-down as a way to get their foot back into the Big Banking door. The camel's nose under the tent, so to speak.
Also, under the "optimal model," there would be no restrictions on ownership of financial institutions, tearing down the time-honored and time-tested barrier separating banking and commerce. ICBA believes this recommendation is wrong-headed and ignores the lessons of history.
"This seriously flawed Treasury proposal would benefit Wall Street at the expense of Main Street, and could spell the end of community banking in the United States," said ICBA President and CEO Cam Fine in a statement. "It would eliminate the dual banking system, gut state regulatory authority across nearly the entire financial services spectrum, and heighten systemic risk by furthering bank consolidation and concentration of our nation's financial assets. Why should Main Street suffer as a result of the sins and errant behavior on Wall Street?"
There are banking laws that prohibit the kinds of legal entities that can own an FDIC-insured bank. You want the banks to be stand-alone entities not influenced by down-turns in other industries.
For instance, you don't want an FDIC-insured bank to be owned by a car maker. If the car maker has a down-turn, it may siphon off money from the bank to cover car losses. If the bank then fails, the FDIC (that would be you and me) would be on the hook to repay the depositors.
There is a loop-hole. There is a banking entity called an ILC - an Industrial Loan Company. These ILC's can make loans, just like any car dealer or finance company. What is different, is that they can also accept all FDIC-insured deposits except checking accounts. Savings accounts, CD's and IRA's are A-OK, and they get to side-step the Bank Holding Company restrictions.
Historically, it was a little-used loop-hole. Only 7 states even allow these things, they just weren't used a lot and they got little notice.
That is, until the 800-pound gorilla entered into the fray.
WalMart made an application for one of these things a year or so ago, and that got people's attention. Home Depot then made an application and stirred the pot a little more. Congress awoke from their slumber, started doing some hearings, and basically sent the message, "This ain't gonna happen." The Congress was actually doing something in the best interests of the citizens of the country. So, these things are a Dead deal, right?
Wake up and smell the pay off.
Buried in Secretary Paulson's 218-page Blueprint For A Modernized Financial Regulatory Structure was the new loop-hole to simply do away with ownership restrictions.
The FIDI [Federally Insured Depository Institution] charter would consolidate the national bank, federal savings association, and federal credit union charters and should be available to all corporate forms, including stock, mutual, and cooperative ownership structures. A FIDI charter should provide field preemption over state laws to reflect the national nature of financial services. In addition, to obtain federal deposit insurance a financial institution would have to obtain a FIDI charter.BOHICA, we're screwed.
You might be thinking, "Big deal. I buy all of my stuff from Wally World. Great prices, decent quality of goods. Not bad qualities for a bank."
You'd be right if that was as far as it went. But there's more.
We all know WalMart would follow the same model for banking as they did for retail. They'd buy up all of the competition. Once they were a big enough bank, they'd just move into town, and the competition would die on the vine. They'd either pay higher deposit rates or charge lower loan rates. Well, at least as long as there was competition.
Sounds good, you say.
What happens if WalMart stumbles? Remember, Sears used to be America's biggest retailer. Now they're a has-been. If Sears were to go totally out of business, no big deal. Just another failed retailer.
But if WalMart (and their subsidiary bank) were to fail, you and I would be on the hook for the deposits they had gathered. Remember, the regulators would have a say in how the bank part of their operations was run, but not over the retail operations. That's why we have the separation of commercial businesses requirements.
This loop-hole or something like it will eventually get passed. Money will talk and politicians will be bought-off. The government function of 'regulator' will have been further eroded, and losses will more and more often be passed on to society at large. Power will be further consolidated in the hands of the very few and choices for consumers will dwindle.
Dance puppet, dance.
Monday, April 07, 2008
Whatever you say, say it with conviction.An interesting bit of banking news hit the press sometime yesterday. It seems that a large, private equity firm, TPG, is very close to investing $5 billion into Washington Mutual Bank (WAMU).
Negotiations with the TPG group are at an advanced stage and an agreement could be announced within days, said a person familiar with the discussions, who declined to be identified. Washington Mutual needs the funds after reporting more than $3 billion of home-mortgage writedowns and loan losses.You may be thinking, "Big deal. Another bank is getting a cash injection." This time, I believe, is a bit different.
You see, WAMU is the nations largest Savings and Loan (now called Thrifts). Thrifts, in general, make home loans. WAMU made a lot of bad sub prime loans and has a bunch of employees that I believe should be in prison because they were one of the big banks that allegedly pressured appraisal firms to inflate home values.
There is one thing the Feds can do. They can hammer the hell out of banks and mortgage brokers that pressured real estate appraisers to inflate property values. WAMU is at the head of the line with this scandal. Honestly, I'm surprised this hasn't gotten more press.They have been in desperate straights since this whole sub prime debacle began. They are in deep. Still, despite having lawsuits for fraud and obscene exposure to bad sub prime loans, a private investor is willing to pony up $5 billion. Is this a signal that the financial impact of this mess is finally understood?
If the values were not inflated, a lot of these loans never would have been made - they could not have been sold on the secondary market because the financials would have been "outside of the box".
WAMU has been in trouble for quite a while, and a large number of other banks (including Bear Stearns bail out partner JP Morgan Chase) have been hip-deep in WAMU's books considering buying them out. This Due Diligence process has been going on since late December/early January, so a lot of people have looked at a lot of loan files.
A buy-out offer or cash injection doesn't mean the pain is over. Far from it. The sub prime loans are still not fully dealt with. The last set of re-pricings will happen in early- to mid-2009. Short of some .GOV bail-out or guarantee, we'll continue having huge numbers of defaults and foreclosure sales for about 3 months or so after the last re-pricing. That will be the bottom of the real estate market. Normal supply and demand economics will then kick in, and some stability will be returned to the markets.
But what it does mean is, we are now understanding the true size of this problem. If you understand the exact size, you can make concrete plans to address it. You can stop with the band-aids. You can come out and say, "We have exactly X billions of dollars in expected losses. How do we know this? Because we've reviewed every single loan file."
With the ability to make this kind of statement, you can begin restoring confidence in the markets. As I've stated before, in banking and finance, Confidence is King.
If this investment goes through, it will be interesting to see the impact on other bank stocks, and the market in general. Investors could take WAMUs known loss numbers and extrapolate out to other banks.
The Street is saying it will significantly dilute the value of existing shareholders, so it must be heavily discounted. WAMU needs the cash. Badly.
It should be interesting to see how this plays out.
Friday, April 04, 2008
Among the many misdeeds of British rule in India, history will look upon the Act depriving a whole nation of arms as the blackest.It has begun.
Are we at last brought to such a humiliating and debasing degradation, that we cannot be trusted with arms for our own defence? Where is the difference between having our arms in our own possession and under our own direction, and having them under the management of Congress? If our defence be the *real* object of having those arms, in whose hands can they be trusted with more propriety, or equal safety to us, as in our own hands?
The most foolish mistake we could possibly make would be to permit the conquered Eastern peoples to have arms. History teaches that all conquerors who have allowed their subject races to carry arms have prepared their own downfall by doing so.
Both oligarch and tyrant mistrust the people, and therefore deprive them of arms.
The gun-grabbing lobby is starting a concerted, organized effort to make guns illegal. Hermit had a post a few days back about how many states are working on laws (The Ammunition Accountability Act) to require ammo to be marked in such a way so that it can be traced. It will require that all non-marked ammo be destroyed.
When I clicked the link for The People's Republic of California, the link they had was some other gun restriction legislation, not ammo-specific. I figured that since we already had caved into the gun-grabbers with the micro-stamping legislation, it was a dead-deal.
The Brady Bunch has been busy. I received an email from them yesterday encouraging me to contact my state representatives in support of two new pieces of gun-grabbing legislation.
The first, is to require handguns to have some sort of biometric identification device so that only the owner is able to shoot the gun:
AB 2235 (DeSaulnier) - Owner-Authorized HandgunsConsumer product modifications, such as childproof caps on medicine and pool covers, have reduced injuries and saved lives and a product as inherently dangerous as a handgun should have similar owner-authorized capabilities. Personalized handguns could significantly reduce injuries, homicides, suicides, school shootings, and accidental shootings in California. Click here for more information.
Intentional and unintentional shootings could be greatly reduced if a child, teen, thief, or criminal were unable to operate a handgun. AB 2235 requires new handguns to have biometric technology, such as fingerprint recognition, whereby only an authorized user can fire the gun. This requirement on all handguns manufactured or sold in California would take effect eighteen months after owner-authorized handguns are available for retail sale.
This is nothing but another step in the outright banning of guns in CA. The legislation will make guns without this technology be considered legally, "unsafe".
AB 2235, as introduced, DeSaulnier. Firearms.Nonsubstantive? It's illegal to own an unsafe handgun in this has-been state. How long after this passes will it be that they come to take our unsafe handguns?
Existing law defines the term "unsafe handgun."
This bill would make a technical, nonsubstantive change to these
Not to be outdone, some other gun-grabber by the name of De Leon has proposed legislation to require ammo purchasers to have a background check and a purchase permit.
AB 2062 (De León) - Ammunition Background Check BillI am numbed by the utter stupidity in this legislation. Let's see, how would I get around this if I were a bad guy? Well, I'd have some flunky be my bitch and buy my ammo. I'd steal it from homes. I'd steal it from businesses. I'd drive to a Free State and buy or steal it there.
It is easier to purchase handgun ammunition than spray paint or cigarettes. AB 2062, the Ammunition Background Check Bill, seeks to reduce gun violence by ensuring that sellers of handgun ammunition are legitimate, regulated businesses and by keeping handgun ammunition out of the hands of prohibited purchasers, including criminals and minors. The bill would require handgun ammunition vendors to acquire a DOJ-issued license in order to sell ammunition. The bill would also require handgun ammunition purchasers to undergo a background check and acquire a purchase permit from DOJ. Click here for more information.
Hell, if this were to pass, I'd drive across state lines to purchase ammo.
What these stupid bastards refuse to see is that all gun restriction laws only affect The Good People. The criminals will surely be shaking in their boots waiting for the police to kick in their doors because they have an unsafe gun or some ammo purchased without a permit.
This kind of legislation is always designed to discourage good people from buying bad guns.
Even though I'm leaving this festering boil of a state, I'm still going to fight this with everything I've got. Laws that get passed in CA have a habit of showing up in the legislation of other states sometime down the road. You should fight this, too. I need to see what the Gun Owners of American and those useless twits at the NRA are doing about this. Time to fight fire with fire.
That being said, they'll never take my guns. They'll never take my ammo. They'll never take away my ability to protect myself and my family.
A man with a gun is a citizen. A man without a gun is a subject.
--John R. Lott
Thursday, April 03, 2008
For business reasons, I must preserve the outward signs of sanity.I was originally going to do a piece on the Federal Reserve chairman actually saying out loud that they had bailed out Bear Stearns. He left enough wiggle room to cover his political ass, but it was unprecedented, in my memory at least.
Mr. Bernanke said in the question-and-answer session that it's fair to say the Fed "bailed out" financial markets broadly through its intervention in the rescue of Bear Stearns even though that firm itself didn't benefit from any bailout.I was going to rant and rave and throw a fit, but then I started to reflect on a thought I was having yesterday while I was out buying some shotgun shells.
"If you want to say we bailed out markets in general, I guess that's true," MR. Bernanke told the Senate Banking Committee, adding the Fed's role in the rescue was necessary.
I was listening to the radio, and the talking-head was saying how we now have more Americans than ever before in our history as a nation, on food stamps. Twenty-eight million Americans. Damned near 10% of our total population. There have been periods with a higher percentage of people getting government cheese, but this is the highest in terms of absolute numbers.
Our government actually pays to produce and run TV and radio commercials encouraging people to apply for hand-outs. They now give the recipients a debit card so there is no negative stigma attached to receiving and spending government largess.
And it appears as though the USDA (the .GOV agency that gives this part of our money away) doesn't think enough is being spread around. They are now offering $5 million in grants to, "improve participation in food stamps for those who are eligible, but for a variety of reasons do not receive the help intended for them." (Hurry! You only have until May 15 to get in your application).
Did they ever stop and consider that there may actually still be some people left in America that don't think taking government hand-outs is a good idea?
Silly, silly boys!
Back to that thought I was having while listening to the radio: I'm not going to get one thin dime of the hundreds of thousands dollars I've had taken from me by the federal government over the past 30 years.
I'm 49. That puts me 17+ years away from getting Social Security (66 and ten months). By the time I belly up to the bar for a cool sip of retirement refreshment from Uncle Sugar, the bottle will be empty. There will either be no money left, or they will use a "means test" of which I won't pass because I've actually been a responsible adult and saved my money.
Sixty-three percent of our federal budget already goes to entitlement programs. Soon, we will have Universal Health Care (regardless of which twit makes it into the White House). The cluster-fuck in the Middle East is draining $12 billion a month from our treasury. We're subsidizing corn so it can be taken out of food production and made into ethanol. Some sort of "carbon tax" is on the horizon.
There are too many outstretched hands, and not enough wallets to fill them.
I've been robbed by my government, and they're coming back for more. Screw that. I'm getting mine while I still can.
I'm dead-serious about this. It isn't like I haven't paid my "fair share". I've paid way more than that. Back in 1989, I got laid off (I actually laid myself off!). I had two babies to feed and a house payment to make. I didn't apply for unemployment insurance because the thought disgusted me. I worked two jobs for chump-change to make ends meet.
No more. I am not going to continue being the "bitch" of some bureaucrats in DC or Sacramento, nodding dutifully while they expand their social programs off of my paycheck.
I will no longer have a perspective of, "What's good for America"? The bastards taking my money clearly don't have that perspective, so why should I? In fact, I'm an idiot if I do so.
Nothing is going to change until our system has a total collapse. It has another 15 or 20 years at the outside. At that time, some sanity may come back into the equation, but not until then. Until there's no government money to keep buying votes, nothing will change.
If I continue feeding this machine and not taking anything in return, I'm actually helping to sustain this travesty. My new perspective is, "I'm doing what's good for Mike and his family".
Bail outs? Bring 'em on! Why? Because in the short-run, it will help me. Bail outs will help to stabilize real estate prices and the stock market long enough for me to sell my home here in The People's Republic of California and allow me to move to a Free State (well, a free-er state), lower my costs, work and wait for the collapse.
Grants? Yeah, baby! I've had a book for quite a while on how to apply for government grants. It now moves to the top of the "must read" list. http://www.grants.gov/ is my new best friend. With a little planning, I'd meet 4 of the 7 qualification criteria.
Universal Health Care? As Acid Man used to say, "I'm getting a funny feeling in my pants". This is going to be a feeding frenzy. I can picture the .GOV having grants on how to get more people to sign up for more services. Brilliant!
I think the biggest opportunity will be in the carbon tax/global warming arena. I've mentioned in the past that some friends and I were working on a business plan to separate eco-freaks from their eco-dollars - and get thanked in the process. We let it die because it had a feeling of not being quite ethical.
No Mas! Nanny is jumping on this band wagon in a big way. All three of the presidential front-runners have slurped the Climate Kool-aid. Baby Bush has greased the skids. This is an area that needs some careful consideration. Government do-gooders and guilt-ridden suckers all in one package is just too sweet of a deal to pass on.
And speaking of "no mas", there's got to be some way to make some money on illegal aliens. Hell, across the bay in San Francisco, they just reaffirmed their "sanctuary city" drivel.
I'll have to work fast in SF, though. They throw money around at such an impressive rate, they make the liberals in DC and Sacramento look like pikers. They are going to be one of the "canaries in the mine" that fall first from their social programs.
I need to get in while the gettin' is good.
Wednesday, April 02, 2008
What we have to do, what at any rate it is our duty to do, is to revive the old art of Lying.Ahh, the Art of Lying is going strong, indeed.
First up, we have those bastards in the oil industry. Clearly, they've taken their cues on how to massage the truth from the financial industry.
Appearing before a House committee, the executives were pressed to explain why they should continue to get billions of dollars in tax breaks when they made $123 billion last year and motorists are paying record gasoline prices at the pump.Great question. Why are we subsidizing ANY private industry? What really smoked my ass was when they justified their profits by essentially saying that when the price of oil goes up, their profits go up.
Top executives of the country's five biggest oil companies said Tuesday they know record fuel prices are hurting people, but they argued it's not their fault and their huge profits are in line with other industries.
It's not their fault? Huh? Are not these guys in charge of pricing their products? What made me even more twisted was that no one on the .GOV panel could see through their crap. Have any of these pukes ever been in business?
They choose to structure their business that way. They can just as easily say, "We need to make $10 per barrel of oil we process to cover our costs and earn an adequate profit. Regardless of our cost of raw materials, our fixed costs and profit remain constant. If crude oil costs $30 a barrel, we will add $10. If it costs us $200 a barrel, we will add $10."
We're governed by retards (apologies to all of the real retards out there).
As if that wasn't enough to put my blood pressure through the roof, for the second game in the double-header, I got an email alert from my eco-freak friends over at Terra Pass:
Al Gore today unveiled the “we” campaign, a $300 million effort to raise public awareness of climate change — both the problem and its potential solutions. The aim of the campaign is to create bottoms-up pressure on legislators to tackle the issue.Oh, Lord.
The do-gooder crowd is starting a campaign to teach us un-washed heathens how to save the world.
Hey, have you noticed, it's no longer "Global Warming"? It's "climate change" or "the climate crisis" - which adds a little more punch to the whining.
Anyways, Gore and Company have started a new project called, We Can Solve It. They use a bunch of "real people" - they're called "presenters" - to spread their message.
These Presenters have this Soma-induced, glazed-over look in their eyes. It's kinda creepy. They don't think, they parrot.
They don't give a damn that this is a truly masterful market manipulation by Gore. He's going to be obscenely rich. Even more rich than his is now.
Gore himself is chairman and founder of a private equity firm called Generation Investment Management (GIM). He says the London-based firm invests money from institutions and wealthy investors in companies that are becoming environmentally-friendly, to use green parlance. GIM appears to have considerable influence over major carbon credit trading firms: the U.S.-based Chicago Climate Exchange (CCX) and the U.K.-based Carbon Neutral Company (CNC). CCX appears to be the only firm in the U.S. that claims to trade carbon credits.I'll get on the
- Someone wins the Ultimate Global Warming Challenge. This is a contest that has been offered for 9 months or so, that offers $150,000 to anyone who can prove global warming is man made. Uhm, this should be a no-brainer for the eco-freak zealots. Apparently not. Typical.
- Someone explains why all of the past warming and cooling cycles the earth has gone through were natural, but this one is man-made. What makes this one special? What proof do you offer?
- Since even the eco-freaks will concede that water in its various forms (water vapor and clouds) is the largest contributor to "the greenhouse effect" - up to 4% of our atmosphere. Someone needs to tell me why aren't they working to ban water? It's clearly killing the planet. CO2 only makes up 0.038% (that's thirty-eight one thousandths of one percent) of our atmosphere, but it comes from evil man.
The earth will freeze over before then.