Friday, October 31, 2008

Despots and Spud Cakes 

If you think of yourselves as helpless and ineffectual, it is certain that you will create a despotic government to be your master. The wise despot, therefore, maintains among his subjects a popular sense that they are helpless and ineffectual.
--Frank Herbert

Despots be damned. I'm burned out!

I was in the middle of a post about Governor Schwarzenegger ("The Paycheck Terminator") passing an executive order for a commission to study ways to make more money for the state. If you're interested, here's a brief article on his plan.

I was a couple hundred words into tearing Arnie a new asshole, when I just said, "fuck it". I'm not going to bust a nut on something over which I have no control. Arnie's gonna do whatever he wants, and if parading around pretending like he's a leader makes him feel good, go to it.

I'll save the world next week. Instead, I'll bore you endlessly with what has occupied my past two evenings: Baking.

Generally speaking, I suck at baking. The past two evenings, I've put together recipes for Kaiser rolls and Crescent rolls (no - they are not subliminal Muslim propaganda...), and they both came out wonderfully.

I found a recipe online for the Kaiser rolls. Some guy had a recipe, and this old-time professional baker posted some comments that really improved these things. Here they are ready for the oven (click any pix for bigger versions).

As you can see, the folding part gave me some troubles, but they all rose nicely, and baked up nicely as well. BTW, those aren't ants on top of the rolls, they're poppy seeds.

Into the oven, with a steam bath (makes them browner and a leathery/hard crust, and here they be:

They look darker in the picture than they were in real life. They really turned out well. We had them as dinner in a smoked turkey and provolone sandwich. So good...

Here's the insides of the roll:

Last night, I made the Crescent rolls. Hey, Pillsbury Dough Boy, watch your ass!

These were very good, as well. They used buttermilk and fresh lemon rind. I really questioned putting the rind in the batter, but they turned out great. Here is the sole survivor (from the 16 that were baked):

That picture looks like some sort of tumor or pornographic deformity, but it really is a crescent roll. This is the last one because all of the "pretty" ones got gobbled up first. I can attest that flavor-wise, it was as good as the others. It was consumed this morning with honey, butter and this breakfast:

Those would be mashed potato pancakes, floating in maple syrup alongside 4 slices of thick bacon.

When we were cleaning up after last night's dinner, we had a lot of spuds left over. I didn't want to throw them out, and I remembered how my maternal grandmother used to make us these things when we were kids.

The recipe is painfully easy: 1 cup mashed potatoes, 1 egg, 3 tablespoons of flour. Scale as needed. Mix it all together, and fry them up in A LOT of hot oil. Don't touch them for the first minute - let them develop the nice crust on the bottom. Flip them, and let them go another minute or so. And generally speaking, don't make them any bigger than your spatula is wide, or you'll get them breaking up when you flip them.

OK, I can't pass up the Arnie story. My contribution: Cut fixed costs, assume there will be periodic revenue dips, and save money for those dips during the good times.

Yeah, like THAT will ever happen...

Labels: , ,


Thursday, October 30, 2008

Challenge 'The One' At Your Own Peril 

Money and Corruption Are ruining the land
Crooked politicians Betray the working man,
Pocketing the profits And treating us like sheep,
And we're tired of hearing promises
That we know they'll never keep
--Ray Davies

By now, everyone's heard of Joe The Plumber. He's the guy that questioned Obama's plan on taxes and income redistribution.

Almost immediately, the ad hominem attacks started, with the In The Bag press disparaging this guy. They noted he wasn't even a licensed plumber. He owes back taxes. He's not a union member. I'm surprised reports that he kicks his dog weren't published en masse.

Clearly, none of these things have anything to do with the issue. Joe was questioning the wisdom of Obama's tax plan, and it became clear that his policies were socialist in nature. This made Obama and his True Believers uncomfortable.

That is simply unacceptable. So they're now using the tools of government to dig a bit deeper.
Ohio Department of Job and Family Services Director Helen Jones-Kelley wrote to Senate President Bill Harris, an Ashland Republican, who sought to find out why a child-support check was run on Samuel Joseph Wurzelbacher.

Wurzelbacher, better known as "Joe the Plumber," emerged as a central character in Republican Sen. John McCain's presidential campaign after the Toledo-area man asked Democratic Sen. Barack Obama about his tax policy during a campaign stop.
Clearly, this guy has now got FOTO (Friends Of The One - you saw it here first!) clambering to dig up any kind of dirt on Joe. The idea is that if you discredit the questioner, you discredit the question.

Of course, this government drone found it easy to justify her actions.
"Given our understanding that Mr. Wurzelbacher had publicly indicated that he had the means to purchase a substantial business enterprise, ODJFS, consistent with past departmental practice, checked confidential databases to make sure that if Mr. Wurzelbacher did owe child support, or unemployment compensation taxes, or was receiving public assistance, appropriate action was being taken," wrote Jones-Kelley. "The result of those checks have never been publicly shared."
So, their policy is to do background checks in confidential databases on anyone in Ohio who says they want to buy a business? Yeah, sure it is.
She said the department would never access private information "for any partisan political purpose."
I feel much better knowing this drone would never use her position for a political purpose. I wonder if they can clarify this non-partisan policy.
Harris has asked for a copy of the policy or an explanation of the practice used by the agency to determine when to launch a check on those in the public spotlight. He also asked Jones-Kelley for a list of all individuals in the past year whose information has been accessed because of being in the public spotlight.

On Tuesday, family services spokesman Dennis Evans said there was no written policy regarding the records-check practice. He also said the department did not track whose information was accessed in this manner.
Hmmm. Seems as though the policy was just started. Funny how that worked out, no?

Hey, I wonder who Ms. Jones-Kelley is supporting for president.
Jones-Kelley has contributed $2,500 to Obama's campaign, according to Federal Election Commission records.
Well there's a shocking revelation.

Update: I rarely listen to Bill O'Reilly's radio show, but happened to have it on today. His lead issue was this Joe The Plumber story. He's going to plaster this Nanny bitch's face all over his TV show tonight (or so he says). I may actually watch to see the blood-letting. Love him or hate him, when he sinks his teeth into something, he holds on like a pit bull. Should be fun...

Labels: , ,


Wednesday, October 29, 2008

Capitalism Hits The Criminals 

Unemployment is capitalism's way of getting you to plant a garden.
--Orson Scott Card

I'm in the process of writing a newsletter article on various aspects of Customer Information Security. I ran across an article that discusses an interesting aspect of Identity Theft: It's getting tougher to make a buck stealing identities.
Your personal identity isn't worth quite as much as it used to be--at least to thieves willing to swipe it.

According to experts who monitor such markets, the value of stolen credit card data may range from $3 to as little as 40 cents. That's down tenfold from a decade ago--even though the cost to an individual who has a credit card stolen can soar into the hundreds of dollars.
So, what is this telling us? It means there is a glut of stolen IDs on the market. The law of Supply and Demand is at work, even when it comes to criminal activity. The large numbers of IDs on the market are pushing down prices!

What fascinated me was the fact that there are online forums where you buy the stolen IDs.
On Oct. 16, 2008, the FBI announced that it had shut down a members-only forum called "Dark Market." This site, which was used for buying, selling and trading personal information, had more than 2,500 members and netted the bureau 56 arrests. Penetrating the forum involved a two-year undercover operation and an undercover FBI agent working as a forum administrator.
This drop in prices had led to the bad guys "aging" their ill-gotten goods. Much like a fine wine or expensive cheese increases in value with age, holding the stolen information a while before selling it reduces the likelihood of being able to trace back to where the data was initially stolen.
Data thieves will now often sit on their ill-gotten data investment in order for the prices to "mature," says Clements. Such was the case with Montgomery Ward's data breach, which was made public in June 2008 but probably occurred at least six months earlier. "The breach occurred some time ago, and the hackers sort of sat on the data for a while and were just putting it up for sale in the chatrooms," notes Clements.
With prices - and therefore profits - dropping, I would expect the intensity and creativity of the crooks to increase. Even bad guys have to pay rent and buy food. With their profit margins being squeezed, they're going to have to either increase volumes or reduce expenses. Much like government, it is unlikely they will chose to scale-back their expenditures.

Watch your Six. Seems like everyone's got their eye on your wallet nowadays...

As an aside: Today, I was doing some work regarding taxes - both state and federal. I had been doing a lot of surfing on the IRS web site. Not more than 10 minutes after I logged off, the phone rings. The caller ID said, "US Govt".

Doh! What the hell had I done?

As it turns out, it was a Navy recruiter calling for my youngest son who had shown an interest at one time for joining the Navy. I don't know if I should have more concern for a call from the IRS or the Navy....

Labels: , ,


Tuesday, October 28, 2008

Rawles Interview 

It is easy to dodge our responsibilities, but we cannot dodge the consequences of dodging our responsibilities.
--Josiah Charles Stamp

The morning radio show I listen to, the Armstrong and Getty Show, just finished up a 15 minute interview with Rawles. Sorry, but they didn't publicize the date and time before hand.

If you want to listen to it, they do offer a pod cast you can download. The interview began around 8:05 am PST. They breakdown their pod casts by the hour, so look to download the Hour Three file for today. Generally speaking, they are available for download an hour or so after the segment has ended.

As a reminder, the show is available on KNEW (www.910KNEW.com) or KSTE (www.KSTE.com).

The radio show is actually telecast on a local TV station, so I was able watch the hosts as they conducted the interview. I've really lost a lot of respect for these guys. They speak of self-reliance and personal responsibility, but when someone does so in a manner that doesn't meet their standards, they deride them.

During the interview, Armstrong had this catty smirk on his face during the entire thing. He's got this, "You're a fucking nut" attitude throughout the interview.

After Rawles finished up, they continued discussing the interview amongst themselves. They continually referred to Rawles as "fringe", and how he has simply got to be hoping for a collapse so he can say, "See! I told ya so!"

They also kept coming back to the "tens of thousands of rounds of ammo" that Rawles stated he has. Armstrong even bragged that he doesn't own a single round of ammo. I believe the term for that is Sheeple. Someone else will take care of the bad people. I can't be bothered.

He continued to make unsupported supposition with regards to Rawle's weapons. They were saying how he must have "six figures" worth of weapons, many of which MUST be illegal. They then had a nice chuckle about the Stinger missiles Rawles MUST own, and how difficult it is to teach your kid to fire them. "They kick like a mule, son".


I'll bet the Korean store owners in LA chuckled themselves to sleep as they protected their shops, and saw their neighbor's shops being burned to the ground by lawless Rodney King rioters. A real side-splitter.

I've said before that I don't care if people don't want to prepare for the future. That's their choice. It's the condescending attitude that rubs me the wrong way. Their attitude is precisely that of the New York Townhouse Crowd. "Don't be such a bore, daaaaarling. We have plenty of caviar to get us through any tough times. Now pass me the brie."

They just can't see the utility in planning for an emergency that falls outside of the norm. As Rawles noted, it might be sudden unemployment, a 9.0 earthquake, a Mount St. Helens eruption, a Bird Flu outbreak or a Hurricane Katrina. You know, stuff that will never happen. Apparently, Armstrong and Getty prefer to be part of the group of individuals whose plan is to wait with hat-in-hand for FEMA to come to the rescue.

Good luck with that plan, guys.

Labels: , , , , , ,


Monday, October 27, 2008

Gun Range and Political Liars 

The trust of the innocent is the liar's most useful tool.
--Stephen King

I was talking to a friend this weekend about my trip to the range on Thursday. He noticed something I had missed. An economic indicator, perhaps?

I told him that when I got to the range at around 3pm, there were already 10 bays full. I had 8 or 10 people in front of me in line. When I've been to this range mid-week in the past, it was while I was on vacation, and the place was virtually empty.

This week it was full to the gills. At least 18 people, most likely unemployed, sharpening their shooting skills. Not a good sign, on so many levels.

California, unlike most states, has a process whereby virtually anyone can get a law passed. You fill out the paperwork, get the required number of signatures to qualify the measure, and the Proposition gets voted on.

This election, we have 12 new Propositions from which to choose. Seven of the twelve call for additional spending. Where do these people think we're going to get the money to pay for these? Don't these dolts read the paper? We're already $15 billion or so over budget (it just dawned on me: Our budget overage exceeds Alaska's entire budget. Disgusting or what?).

The thing that kills me is that most of these propositions sell themselves as, "No new taxes!" They do this by crafting the Proposition to be paid for out of the general fund, instead of having specific bonds issued to pay for the various program.

What a crock! The TV ads tout the "No New Taxes" angle, but don't say what programs will have to be cut to pay for this new deal. It's because they know that NOTHING will be cut. Taxes will be raised, they just won't be specifically raised for this new program. Total bull shit.

One of my brothers and I were railing over this crap, and he asked a question: Have you ever seen a Proposition that CUT costs or programs? I couldn't say that I had. The closest was many, many years ago when we passed Prop 13 which limited the ability of the State and local governments to raise property taxes.

I'm going to look into this. It is always presumed that government can only grow, never shrink. Perhaps we can use this process to force some size reduction on our inept legislators.

I just read about the shooting at the University of Central Arkansas. It will be interesting to see if the campus is a gun-free zone.

Labels: , , , ,


Friday, October 24, 2008

Number Seventeen 

Geez, I go away for business meetings, and another bank fails. Can't a guy go out of town once in a while without another bank caving in?

Alpha Bank and Trust, Alpharetta, Georgia, was closed today by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Stearns Bank, National Association, St. Cloud, Minnesota, to assume the insured deposits of Alpha Bank & Trust.
Alpha is a large small-bank, or a small medium-sized bank (depending on how you look at it) with $354 million in assets. Kind of a large bank for only having 2 branches. They were taken over by Stearns Bank (never heard of them). What I found interesting is how costly this one will be.

Historically, after the assets of a failed bank have been sold, is had cost the FDIC fund an amount approximately equal to one-quarter of the bank asset size. So in this case, that would make it around $90 million. For some reason, the FDIC is estimating this one will cost the fund $158 million, or about 45% of the asset size. They must have some real doozies in their loan portfolio.

I believe this is the third failure since the bailout. Glad to see it's working out so well...



Thursday, October 23, 2008


Self-determination, the autonomy of the individual, asserts itself in the right to race his automobile, to handle his power tools, to buy a gun, to communicate to mass audiences his opinion, no matter how ignorant, how aggressive, it may be.
--Herbert Marcuse

I've got a couple of get-togethers today. Both are to discuss local economic issues and what people are doing to preserve or grow personal capital.

The first meeting is with a person who has been self-employed for most of his adult life. He has squirreled away enough cash where he was able to buy a home - for cash - which he initially intended on rehabilitating and selling at a profit.

This person got the home for a song, even considering the local depressed and declining real estate market. He is now considering moving his family into this home, and getting rid of his primary residence and its mortgage payment.

This guy is sharp. He lives the, "many irons in the fire" lifestyle, and has done very well.

The second meeting is with someone who has been self-employed for the past 10 years or so. He, too, has put some cash together and is looking at a number of opportunities, including purchasing some rental real estate.

I really want to pick these guy's brains to understand how they find "jobs" - these projects that supplement their core business. Do they focus in a specific field, or are they open to all ideas? How do they market their availability?

Being at the mercy of an employer is not something either of them will allow. It's clear that if you stand still, you die. You always have to be looking for the next opportunity. I want to understand the process - to learn from their experience and mistakes.

My morning show says that they have confirmed Rawles will be on the show next week. No specific day yet. The two stations I pick them up on are KNEW (www.910KNEW.com) in San Francisco and KSTE (www.KSTE.com) in Sacramento. Both have streaming audio - Listen Live - for the program.

The show is The Armstrong and Getty Show. It runs from 6 am to 10 am PST, Monday through Friday. I'll post the date when it is announced.

Lots of shoot 'em up the next two days. Going to a great indoor range this afternoon between meetings, and I'll be shooting Sporting Clays tomorrow with a fellow banker who also just lost his job. His bank WAS heavily involved in the residential mortgage business, but not the sub-prime crap. They're still taking a bath.

There's a lot of that going around lately....

Labels: , ,


Wednesday, October 22, 2008

Nationalization: It's What The Cool Kids Do 

It is certain that stealing nourishes courage, strength, skill, tact, in a word, all the virtues useful to a republican system and consequently to our own. Lay partiality aside, and answer me: is theft, whose effect is to distribute wealth more evenly, to be branded as a wrong in our day, under our government which aims at equality? Plainly, the answer is no.
--Marquis De Sade

Wow. The Marquis must be 'required reading' for a number of governments around the world.

Argentina is in a bad way, financially. Since 2001, they've been essentially bankrupt. They defaulted on all kinds of international debt, and can't borrow a peso to save their ass.

Since 1994, Argentina has allowed workers to determine whether they want to contribute to the government-sponsored pension plan, or invest in the private market. It looks like that choice is being eliminated, and the private plans are being Nationalized.
Argentina's leftist President Cristina Kirchner signed a proposal nationalizing the country's private pension funds in what could be seen as a grab for cash and power amid the global economic crisis.
I'm sure Argentina is doing this "for the good of the people", right?
The government said the takeover of the private system, created as an option to state pension funds in 1994, aimed to protect investors from losses due to the global market turmoil.
Or maybe not.
But economists said the underlying motive would be to provide the government with about $5 billon in annual pension contributions that it needs to plug a gap in financing next year and avert a second debt default.
What?! The government wants to raid the Social Security System pension plan to pay day-to-day bills? Shocking, I say! How can they expect the people to stand for such thievery?

So what could have happened to push Argentina to consider such drastic measures?
The move comes amid a sharp decline in agrarian commodity prices that Argentina has counted on to pay its debts and fuel growth. Coupled with unchecked government spending, the revenue decline has created a gap of around $10 billion to $11 billion in Argentina's debt service requirements by the end of next year, according to Buenos Aires economist Aldo Abram.
Hmmm. Declining tax receipts coupled with exorbitant government spending results in deficit spending. Where have I heard that before??

Well, I'm sure there was a general sigh of relief after the Nationalization announcement.
Rather than restoring confidence in Argentina's ability to pay its debt, the pension plan further spooked investors. Argentina's benchmark Merval index fell by more than 11% Tuesday. "With the announcement, the custom of violating the rules of the game has been repeated, which deepens the lack of confidence," political analyst Rosendo Fraga wrote in Buenos Aires daily La Nación.

So what cherries do American's have that can be harvested? Our Social Security "Trust Fund" is already pretty well picked clean. There are the pension/retirement plans that are mostly in unionized jobs - auto workers and the like. Those have mostly been replaced by 401(k)'s in the private sector.

I wonder what kind of a cash-flow boost it would give Nanny were our union pensions and 401(k) plans to be Nationalized... Hey, just thinkin' out loud here...

In yesterday's post, I said that the only way a modern government can make ends meet is to either borrow money or increase taxes, or both. I guess I was wrong.

They can steal the money, too.

Labels: , , , , , , ,


Tuesday, October 21, 2008

Prepper Whack-Jobs 

I'm getting so tired of this crap.

My favorite morning radio show normally talks about self-sufficiency, smaller government, etc. I really like these guys. This morning, they brought up Rawles, and broke out the broad brush to paint all preppers as whack-jobs.

I wrote them the following email:
Jack and Joe,

I love your guy's show - listen to it every morning. But your little stand-up bit on TEOTWAWKI was pure crap. You sounded like New York City elite townhouse dwellers as opposed to libertarian-leaning, smaller government advocates.

It's easy to ridicule those that are preparing for a potential "bad time". The, "Nanny will take care of me" mindset is so ingrained in our society, it has become sport to ostracize those that believe it prudent to prepare. It's along the same lines of the, "Keepin' It Real" pledge in the black community. If you do something to better your situation, you're nuts.

"You silly boy! Why save your money? Social security will take care of you in your old age." Spend it all now. Live for the moment.

I'm a very analytical guy. I was the Chief Information Officer - head computer geek - at a bank during Y2K. I was virtually certain nothing would happen. Yet, I was not willing to risk the welfare of my family on that belief. We bought enough supplies to take care of us for a week. Just in case.

I now look at what is happening in our society. We have a government that is spending money at unprecedented rates. At the very best, we will have very, very high levels of inflation. If you print up that much money, you are diluting the value of the dollar, and prices MUST increase. Consider that between the $700 billion bailout (plus the $150 billion in pork that was added), the earlier $300 billion FHA "HOPE For Homeowners" program that became effective on 10/1 and the Fed's $1.6 trillion commitment to purchase Commercial Paper, in total, these 3 programs nearly equal our annual $3 trillion national budget.

Throw in Freddie/Fannie, the AIG bailout, uncertainty in crude oil supplies, European and Asian economic problems, rapidly rising unemployment numbers, and there is a lot to work into the equation.

Regardless of who becomes our next president, we will be taking a giant step forward in our march towards socialism. These two clowns are fighting to see who can promise more handouts to buy votes. Universal Health Care, Economic Stimulus Packages - take your pick. Socialism is expensive. How are we going to pay for this? We know that services won't be cut, so Nanny will either increase taxes, borrow more money, or both.

So there is now a growing movement of people that are preparing for an uncertain economic future. Yep, you have the fringe folks that are huddled in their bunkers. They are so few and far between, but are easy targets for ridicule and for stereotyping all of us as lunatics. Most of us are regular folks who go to work every day, raise our families as best as we know how, but don't trust Nanny to make everything better. In fact, we see the government's past performance, and are worried.

You seem to be part of the mainstream Pollyannas that think everything is fine, it will all work its way out, "Hey, what's on the tube tonight?" crowd. That's fine. It's your choice. But before you chastise someone that is preparing for what they see as uncertain times, consider your own situation. Do you do anything whatsoever to prepare for the future? Have an IRA or 401k? Maybe a savings account or other investments? Of course you do.

I have all of those things, along with preparations for disruptions in food, water, power and financial services. Far fetched? I'll bet more citizens in Iceland wish they had made similar preparations.

We're not a bunch of nuts. We're responsible adults preparing for an uncertain future.

As soon as I sent the message, they noted that they have just book Rawles to be on the show. When I hear the date it will be aired, I'll post a message. The show is available via a couple of radio stations on the Internet.

Labels: , , , , , ,


Monday, October 20, 2008

Bailout Accounting Cover-Up 

Integrity is the essence of everything successful.
--Buckminster Fuller

I was watching part of '60 Minutes' last night, and saw the piece with the CEO of Bank of America. He was giving some insight into the Godfather-like arm twisting employed by Secretary Paulson in getting all 9 of the nation's largest banks to sell preferred stock to Nanny.

The Secretary's basic rationale was that since some of the banks actually needed the cash infusion, if all of the Big Boys didn't take the money, the few that DID need it would be punished by the market. They'd be ostracized.

Boo Fucking Hoo. We certainly wouldn't want to embarrass anyone for getting involved in a lending scam that cast aside all credit underwriting standards, would we?

Oh, and if you didn't take the money right now, you were being unpatriotic, and if your bank were ever to run into problems in the future, don't bother come running to Nanny for help. That option would be removed from the table - forever.

Don Corleone would be proud.


How stupid do these pukes think we are? Every quarter, every bank in the US has to publish their financial statements. Anyone that follows banks is able to immediately see which banks are in trouble, and which ones aren't. The accounting rules that have been around forever will shine a spotlight on weak banks, THEN the markets will punish them.

Unless you make it easier to hide the fact that your bank is in trouble.
The Bush administration is expected to allow banks that participate in the government's $250 billion capital-injection program to avoid triggering an accounting rule that could have hurt the banks' finances.

The program, announced last week, is intended to encourage banks to lend again by having the government take equity stakes in the institutions so they can rebuild their capital levels. But in its rush to get the program under way, the administration overlooked a key detail involving the potential issuance of stock, people familiar with the matter said.
Part of the Godfather Infusion requires the banks to issue warrants. Warrants are basically commitments to sell your stock at a certain price if certain events occur. When you issue these warrants, you are supposed to recognize them as liabilities on your books. Doing that, though, works in opposition to the intent of the infusion. It would actually hurt the regulatory capital structure of the banks that participate!

So what do you do? You change the rules.
The Securities and Exchange Commission and the Financial Accounting Standards Board are expected to issue guidance telling the banks participating in the program that they can consider the warrants "permanent equity" under generally accepted accounting principles, people familiar with the matter said.

Under such guidance, the problem would be resolved because the warrants wouldn't be considered a liability and wouldn't trigger "mark to market" accounting that forces them to price them at their currently diminished value, the people said.
Those accounting rules are in place so that investors - big ones, and little ones like you and me - have a way of judging whether or not a business is healthy based upon their audited financial statements.

So now you'll have one set of banks - the 9 Big Boys and anyone else that takes Nanny's cash - that follow one set of rules when it comes to issuing warrants. You have another set of banks - small banks that perhaps issued warrants on their own - following another set of accounting rules.

If you were to compare the balance sheet ratios of the two different banks as a way of determining into which bank to invest, you would not be viewing consistent data. The bank that participated in the Godfather Infusion would look better financially even though it may have had to suckle at Nanny's teat to save its business life.

Play ball, and you'll get benefits. Nanny is doing nothing less than orchestrating a massive, financial cover-up. Shocking, I know.

When you cast your vote for president in two weeks, remember that both major party candidates voted for this bailout package. If you vote for either of them, you are giving tacit approval to their actions.

Vote Third Party!

Labels: , , , , , , , ,


Friday, October 17, 2008

401Keg Investments 

There's a lot of evidence you can sell people on tax increases if they think it's an investment.
--Billy Jeff Clinton

Perhaps the soundest investment advice I've heard in a while:
If you had purchased $1,000 worth of shares of AIG stock one year ago, you would have $42 left. With Lehman, you would have $6.60 left.With Fannie or Freddie, you would have less than $5 left.

But if you had purchased $1,000 worth of beer one year ago, drank all of the beer, then turned in the cans for the aluminum recycling REFUND, you would have had $214.

Based on the above, the best current investment advice is to drink heavily and recycle.

Have a nice weekend, folks.

Labels: , , , ,


Thursday, October 16, 2008

Keeping Emergency Bags Current 

Despair is most often the offspring of ill-preparedness.
--Don Williams, Jr.

Survivalist News recently had an article on making sure your Bug Out Bag (BOB) reflected the change in the season. In particular, it discussed how to ensure warm clothing was included in your bag.

I don't keep a BOB per se. We have our emergency supplies in numbered bins with instructions to grab boxes in numerical order until all of the space in our vehicles is filled.

But we all do have Get Home Bags (GHB's) in our cars. Each of us has a bag with enough food and water for two people for 3 days. Additionally, the bags contain other things to make getting home safer, more comfortable, and more likely.

I decided to unload my bag to make sure it was still current. I'm glad I did this.

The last time I reviewed the contents of the bag was in June for my fishing trip up to Oregon. It seems as though I left an opened package of my homemade jerky in the GHB. With all of the summer heat, the fat still present in the jerky liquefied and oozed out all over a lot of the stuff in the bag. A big damned mess.

I cleaned everything up, and did an inventory of my bag.

The bag is a heavy-duty day bag. It has padded shoulder straps and a chest strap to keep it from bouncing around. It has 3 main compartments, along with two external side pockets and a couple of minor zippered pockets.

The contents:

At the bottom of the main compartment, I keep 2-2400 calorie emergency bars, two dozen water pouches and two pouches of Gatorade powder.

Other contents of the bag:

Five light weight carabiners (for hooking stuff to the bag), 3 flashlights and batteries, 10-30 minutes glow sticks, 300 feet of 550 lb paracord, 100 feet poly cord, two Sierra cups, a 2 quart bota bag, signaling mirror, two whistles, water-proof matches, magnesium sparker, disposable lighter, Vaseline-soaked cotton balls, two pill bottles with fire wicks, Altoid can survival candle, Leatherman Wave multi-tool, two pocket knives, a survival chain saw, and the blue thing is a knife sharpener.

The rest is rounded out here:

Starting with the black box in the upper center: Being this is the People's Republic of California, you are not allowed to have a weapon in your car unless you have it, unloaded, in a locked case. That's a .38 special with 3-5 round speed loaders filled with Hydroshock rounds. Below that are 3 inside the pants holsters (oops, the one on the right is for my 9mm), a compass, 20 gauge snare wire and an old pack of cheesy crackers. The last row has a Katadyne Hiker water filter, some water purification tablets, an emergency sewing kit, lotion, compact binoculars, two emergency mylar blankets, a tooth brush (huh?), two emergency ponchos and a first aid kit.

I removed a couple of things. I took out the 100 feet of poly rope - I figure the 300 feet of paracord will do. I removed one of the pill bottles of fire wicks, as each has 25 wicks, and that was a bit of over-kill for a bag intended to last 3 days. I also removed the 9mm holster and put it with my Glock!

I should note that I always keep a Buck folder in my pocket, and a pair of tennis shoes with the bag. I think I'll add a heavy hunting vest I've got as well and a couple of wool watch caps. For some reason, I removed a concealment shirt from the pack. I have a white and a black one. I need to round one of them up and get it in the bag as well.

Labels: , ,


Wednesday, October 15, 2008

Secretary Of Racial Divisiveness? 

There is a class of colored people who make a business of keeping the troubles, the wrongs, and the hardships of the Negro race before the public. Having learned that they are able to make a living out of their troubles, they have grown into the settled habit of advertising their wrongs-partly because they want sympathy and partly because it pays. Some of these people do not want the Negro to lose his grievances, because they do not want to lose their jobs.
--Booker T. Washington

Note: As Hermit has pointed out, I'm am rapidly moving up in line for the first classes to be held at the Obama re-education camps. This should get me VIP seating.

Could the quote above better describe Jesse Jackson or Al Sharpton? They have literally made careers of race baiting and division. Jackson, in particular, seems to have tasted the blood in the water, and is ready to strike. The time is right. An Obama Administration would work nicely into his plans.

Jesse is over in France for some World Policy conference. He's making not-so-veiled threats to Israel and getting in shots on America, Iraq, Iran and the economy. But what got me going was his self-serving, race-baiting franchise.

As a public service, I am going to provide a translation of Jesse's quotes. Think of me as bi-lingual. Or perhaps as one not drinking his brand of Koolaid.
"We helped him start his career," says Jackson. "And then we were always there to help him move ahead."
Translation: It's quid pro quo time, baby. We MADE you! Time to pay the piper. Oh, and this won't be the last time we pull up to the Bank of Obama, either.
"He is the continuation of our struggle for justice not only for the black people but also for all those who have been wronged."
Translation: I have no damned idea. Who said I have to make sense? I am required to spew forth unintelligible gibberish at least 5 times a day. Said gibberish must contain the words or phrases (or derivatives thereof): black people, struggle, inequality, injustice, rights, demand and reparations. Honky, cracker, Hymie or Zionist are optional.
Will Obama's election close the chapter of black grievances linked to memories of slavery? The reverend takes a deep breath and waits a long time before responding.

"No, that chapter won't be closed," he says. "However, Obama's victory will be a huge step in the direction we have wanted America to take for decades."
Translation: Close the chapter?! What are you smokin', son?! Hell, we're writing a whole new book! With all of these trillions of dollars being pumped into the Money Changers, you don't think we're gonna get us a piece of that? It's gonna be like a Pulled Pork festival! Get it? Pork! Hahahahah! With Democrats owning both houses of Congress, and with Barry at the wheel, we're gonna be able to milk this baby for years. For generations!
But is Obama - who's not a descendant of slaves - truly a typical American black?

Jackson emphatically answers yes: "You don't need to be a descendant of slaves to experience the oppression, the suffocating injustice and the ugly racism that exists in our society," he says. "Obama experienced the same environment as all American blacks did. It was nonsense to suggest that he was somehow not black enough to feel the pain."
Translation: You mean the pain and oppression of having been put through Harvard Law School on Uncle Sugar's dime, election to the Illinois legislature and to the US Senate? Haw! Just messin' with ya! No, we'll subtly play the angle that he only went so far because of his white mama. We've got to tread lightly to season this steak with innuendo like, "An oppressed 'real black man' couldn't have gotten so far," you know - BS like that. Keepin' It Real, baby!

My guess is, since Jackson has gotten all of this press, Reverend Al will soon be pulling some kind of stunt to get his mug in the news. Can't let Jesse get all the press.... and all of the hand-outs...

HT to Hermit for the article, and to Brooke for the Booker T. Washington quote. I'll save y'all a seat at the camp.

Labels: ,


Tuesday, October 14, 2008

The Mother Of All LBOs 

Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.
--Winston Churchill

We're witnessing the largest Leveraged Buy-Out (LBO) in history. The buying of America.

What's an LBO? From Investopedia:
The acquisition of another company using a significant amount of borrowed money (bonds or loans) to meet the cost of acquisition. Often, the assets of the company being acquired are used as collateral for the loans in addition to the assets of the acquiring company. The purpose of leveraged buyouts is to allow companies to make large acquisitions without having to commit a lot of capital.

In an LBO, there is usually a ratio of 90% debt to 10% equity. Because of this high debt/equity ratio, the bonds usually are not investment grade and are referred to as junk bonds.
Bush announced today that the US is going to spend $250 billion to buy the American banking system. Nanny has no assets with which to buy these banks. So, she's borrowing all of the money by issuing bonds - Treasury Notes and Bonds - to finance this buy-out.

LBOs have a sketchy past. Especially no-equity LBOs. Again, from Investopedia:
Leveraged buyouts have had a notorious history, especially in the 1980s when several prominent buyouts led to the eventual bankruptcy of the acquired companies. This was mainly due to the fact that the leverage ratio was nearly 100% and the interest payments were so large that the company's operating cash flows were unable to meet the obligation.
Hmmm. Insufficient cash flows lead to eventual bankruptcy.

So how would Nanny improve cash flow? More taxes, of course.

I have not seen any details yet of how this LBO will work. Will we get dividend payments from the banks? Are we being issued stock which can appreciate and which can be sold for a profit so we can retire this debt? I'm really not hopeful that we won't get the short end of the stick on this.

Regardless of if we get cash flow or money back on this, we'll still have to make the bond payments NOW. That means taxes MUST go up, because none of the bastards in Washington are going to reduce any benefits in this political climate. And once they go up, they won't come back down.

While Nanny has paraded out the Chrysler and Mexico bailouts as examples where we made money on a deal, I just don't believe we will come out whole on this. Call me a skeptic.

I want to spend some time thinking about how this Nationalization of our banking system will affect each of us directly. I have not thought it through, so I can't really speak to the specific ways this will harm us individually.

In general, whenever Nanny gets involved in private industry - health care, charity, retirement planning, education - it gets screwed up and costs double or triple what the private sector costs.

On a Constitutional basis, how in the hell can this be happening? The Other Ryan had a post yesterday about what would you add to the Bill of Rights, and one of the commenters stated that he would like to see the 9th Amendment taken seriously. I commented that I agreed with him, and noted that I would include the Tenth in the same category.
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
If the Constitution doesn't grant the Feds a power, they can't exercise it. Where have they been granted the power to Nationalize banking? For God's Sake, Bernanke unilaterally decided to commit us to buying upwards of $1.6 TRILLION of Commercial Paper. What the fuck is going on?! How are we going to pay for this?

From Ragnar Benson's, "Guide To The Underground Economy":
The underground economy of the United States may easily have risen to 20 percent of gross domestic product, according to may experts. Italy's underground economy is estimated at a whopping 45 percent. In Germany it's said to be at least 25 percent, explaining how that society continues to withstand 10 to 12 percent official unemployment without colapse.
If our "leaders" are trying to build a more EU-like society, they're on the right track.

Addendum: From a timely email from a reader of the site -

Labels: , , , , , , , ,


Monday, October 13, 2008

Recycling Food 

con·ser·va·tive (kən-sûr'və-tĭv)

7. Tending to conserve; preservative: the conservative use of natural resources.

My very first job was in a restaurant. I started as a dishwasher, progressed to pot scrubber, rose to sandwich-dude, and finally made it to cook. I was a cook for all of my junior and senior years in high school.

It was a great training ground for conservation. The owner of the place didn't waste one damned thing. He didn't pinch pennies, he made them weep for forgiveness.

Each day in a restaurant, you end up with extra food. It's perfectly good, but you generally can't serve it as-is the next day. What we would do is take all of these left-overs and put them in the walk-in fridge. The next day, it was mixed with a bunch of eggs for a frittata. These are big solid omlettes/quiche's. Kind of.

We would take the frittata and cut it into chunks about an inch long, by an inch wide by a half inch thick. Little bricks. We'd then batter them in egg wash, dredge them in bread crumbs and deep fry them. They'd then be given away as hors d' overes in the bar. People just loved them. If they only knew....

One of the most practical things I learned was how to make a stock. We'd take a pile of old bones, add some vegetable scraps - celery bottoms, carrot bottoms, onion parts, etc. - and throw it all in the oven to roast for a bit. This whole mess would then be put into a giant stock pot, we'd add water and simmer it for 3 or 4 hours. No need to buy commercial soup base.

I still make buckets of stock to this day. I probably have 20 gallons of various types of stock - beef, turkey, pork, fish, veggie - in my freezer at home. I also have enough frozen bones and animal carcass' to easily make another 20 gallons.

I went to the store this past week and found a bunch of great deals on pork and chicken, so I bought a bunch of it. When I got home, I saw that the freezer was damned near full.

Most of the meat in there is in perfect condition. I vacuum seal virtually everything I buy, so freezer burn is rarely an issue. I did see a couple of things that weren't vacuumed sealed, so I was going to toss them in the garbage.

I had between 8 to 10 pounds of pre-formed hamburgers. This was spread over 5 or 6 bags. Over the summer, we'd want to have burgers, and apparently we bought new stuff every time, so we had all of these half-full bags. The meat in the bags was still in decent shape - little or no freezer burn had taken place.

Instead of throwing out perfectly good meat, I decided to recycle it. I defrosted the whole lot, broke it up into smaller pieces, and browned it all up. We had tacos for dinner that night, but I still had about half of the meat left.

I then heard Jackie Clay in my ear: Can it, you fool!

I went to the BackwoodsHome.com site and got her hamburger canning recipe. It's really nothing more than the burger with a broth. I defrosted a couple of half-gallon bags of my stock, and pressure canned everything that was left.

I ended up with 5 pints of ground beef and an additional 4 pints of stock.

Here's a close-up of the beef:


I also had crammed a bunch of pork butt in the freezer and had neglected to vacuum seal it. So I thawed that out as well and made up some Italian sausage. Eight pounds of meat and bones turned into 5 pounds of sausage.

Here it is twisted into individual links:

It's in the freezer firming up. I'll then vacuum seal packs of 4 or 8 sausage, and toss them in the freezer. Of course, I saved the bones. They're in the freezer waiting for my next stock-making rush.

For some unknown reason, I also felt like improving my baking skills. When I bake, it's almost even money that it will end up, uhm, not as intended.

I ground up some wheat to make some traditional looking loaves (I usually free-hand it into rounds or french bread-style loaves).

Here's a pic of the dough proofing:

I didn't get a chance to get pix of the loaves - they disappeared shortly after coming out of the oven. I got it right this time!

Labels: ,


Sunday, October 12, 2008

Nanny As Geppetto 

The bigger the real-life problems, the greater the tendency for the discipline to retreat into a reassuring fantasy-land of abstract theory and technical manipulation.
--Thomas Naylor

Like most folks, I've been reading quite a bit about the bailout. The Problem and The Plan. It seems to me that the end result of the plan being successful will be more of the same kind of problems we're in right now.

I see Nanny's view of The Problem as: Banks are scared to lend to each other. Because they won't lend to each other, there is no money to lend to businesses for cash flow, or to potential buyers of residential real estate. If the businesses don't get their money, YOU will be laid off and become destitute. If the home buyers can't get their money, real estate values will continue to plummet and those currently with homes will be irreparably harmed.

The Plan is to inject capital into banks by purchasing ownership interests, or to buy up bad mortgages and securities from investors, who will then re-invest that money back into the economy. All will be well.

In reality, we're being manipulated by Nanny playing on our fear of being penniless.

Nanny is partly right, in that banks aren't lending to each other, but it's not out of some primal fear. Banks borrow through the use of Fed Funds. When a bank has excess cash, they sell it to an intermediary - either the Federal Reserve Bank, one of the Federal Home Loan Banks or through a local Banker's Bank (my old bank used to use the Pacific Coast Banker's Bank).

You transfer the money to one of these groups, usually for an interest payment slightly below the Fed Funds rate. If you need cash, you borrow from one of these groups, usually for slightly above the Fed Funds rate. The intermediary makes a profit on the spread between what they pay for the money and what they lend it out for.

Let's say that Nanny's plan works as intended. Suddenly, all of these banks are flush with cash. They have more than they can lend out or invest, so they sell it to one of the intermediaries. So we now have this big pile of money available to other banks.

Now what?

Is the intent of The Plan that banks will snap up this money and lend it out? Who are they going to lend it to?

They have a couple of options. First, they can lend it to solid businesses that are performing well. Or, they can lend it to home buyers that are qualified to borrow - they have a decent down payment and a steady job, and their debt-to-income ratios are within prudent ranges.

I have a news flash for everyone: Those two groups of borrowers are having no problem, whatsoever, getting the money they need right now!

Banks aren't lending to each other, not because they are scared of the markets, but because those with capital are already lending it to those who are likely to pay it back.

Recent personal experience: I needed to buy a new vehicle. I usually buy cars for cash - I hate debt. I've only had one car loan in my entire life. Anyways, right now, I want to conserve cash, so I applied for a car loan.

I went to the Wells Fargo online site and completed a car loan application. I got a call back, and they offered me a loan at 12.85%. I literally laughed at the lady.

My credit is in the Above Average range. It's in the low 700's (I won't go into why it isn't in the Prime range, but it has to do with a dispute with a cell phone carrier that goes back to 2001. Fucking bastards.). Anyways, you look at my credit and you see I've never been late or missed a payment in my life.

I found the car I wanted on the Internet. I called the dealership to get some specifics. It was a 2008 rental return. A few thousand miles on the vehicle, and the price was $10,000 below a new 2008 of the same model. Used cars usually have higher rates on their loans.

I asked the salesman about their lending programs, and he explained that they farm out their loans to a number of banks and credit unions. They'd be able to find something for me.

I went down and we did the deal. I have LifeLock on my credit. This requires that anyone who wants to pull my credit has to call me first to verify my identity. Over the next 30 minutes, I got calls from 6 different banks and CUs.

When all was said and done, I got my car loan. At 6.9% with US Bank. Every one of them said I could finance the entire purchase, but I insisted on putting 25% down.

These 6 banks were fighting over my business because I am creditworthy.

That tells me that Wells may have some liquidity problems (or they were conserving cash because they were thinking of buying Wachovia perhaps??) and US Bank has plenty of cash. Regardless, either way, I could have gotten my car loan, it was just a matter of price.

So, if Nanny's plan works, what will happen with all of that newly-found bank liquidity?

Back in December of last year, I wrote a piece called Liquidity Traps. What's a Liquidity Trap?
The monetary authority can increase the overall quantity of money available to the economy, but traditional monetary policy tools do not inject new money directly into the economy. Rather, the new liquidity created must be injected into the real economy by way of financial intermediaries such as banks. In a liquidity trap environment, banks are unwilling to lend, so the central bank's newly-created liquidity is trapped behind unwilling lenders.
I don't think we have a traditional Liquidity Trap. I think we have a bank industry that is licking its wounds from the sub-prime mess, and will only lend to creditworthy businesses and individuals.

They're acting like banks again, not free-for-all ATM cash dispensing machines.

That doesn't bode well for Nanny's plans. And I think that realization has sunk in with the government power brokers.

If you're Nanny, how do you correct this "problem" of banks not lending to anyone that can steam up a mirror and wants some money?

You become the lender yourself. You Nationalize.

You buy the banks so you can exert pressure as an owner, or you outright buy the Commercial Paper loans to businesses, and change the repayment terms to be much more lenient. Like extending maturity dates or reducing interest payment terms.

You can also guarantee loans through HUD/FHA, essentially removing the risk component from banks making those loans. By owning Freddie and Fannie, you can guarantee any kind of home loan you wish. You set the credit underwriting bar - as low as you wish - again removing the risk component to banks and investors.

In short, you actively participate in a credit market exactly like the one that got us into this mess - easy money for unqualified borrowers.

Sounds good on paper. Hey, we've got the economy humming again. Real estate values are up, employment is up. Life is good again.

But what about the bill? Nothing is free. Someone has to pay for all of this Nanny credit. Of course, it will be all of us that will pay.

Since there will be losses in excess of the income - remember, Nanny is only lending to the unqualified - we will have to borrow more to print up the money needed to cover the losses. The credit rating of the US is already teetering, and will most likely drop sometime in the near future as the buyers of our debt see that the math just doesn't work. THEY will want to be paid more to compensate them for the increased risk.

Taxes will have to be raised to pay for this increased and more costly debt load. That, or reduce government programs, and we know how likely THAT will be. All of us will be paying to subsidize crappy businesses and unqualified home owners.

Again, from the Liquidity Trap post:
So what should the Feds do?

Keep their hands off, and let the markets fix themselves. Banks, investors and borrowers will figure something out. We always do in a capitalist society.

Some people and businesses will get bloodied - so be it. By taking it on the chin, the society as a whole will learn from this huge mistake, reducing the likelihood that it will happen again. Government intervention will soften the blow, making it more likely that we will go down this path again in the near future.
Government intervention will soften the blow, making it more likely that we will go down this path again in the near future. Wow. Pretty much looks like the way we're headed, huh?

Get your checkbook out...

Labels: , , , , , , ,


Friday, October 10, 2008

Number Sixteen 

Hey kids, it's a two-fer Friday. Two bank failures in one day (see post below for the first one of the day).
Main Street Bank, Northville, Michigan, was closed today by the Michigan Office of Financial and Insurance Regulation, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC approved the assumption of all the deposits of Main Street Bank, by Monroe Bank & Trust, Monroe, Michigan.

All depositors of Main Street Bank, including any with deposits in excess of the FDIC's insurance limits, will automatically become depositors of Monroe Bank & Trust, and they will continue to have uninterrupted access to their money. Depositors will still be insured with the new institution. Therefore, there is no need for customers to change their banking relationship to retain deposit insurance.
Main Street Bank was a $98 million in asset size bank. Like the closure earlier today, the buyer - Monroe Bank - will get to cherry-pick over the assets to get at the good stuff. After all is said and done, this will cost the FDIC fund in the neighborhood of $25 million.



Number Fifteen 

I sure am glad to see how well the bailout is working. Another bank goes tits-up:
Meridian Bank, Eldred, Illinois, was closed today by the Illinois Department of Financial Professional Regulation-Division of Banking, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC approved the assumption of all the deposits of Meridian Bank by National Bank, Hillsboro, Illinois.

All depositors of Meridian Bank, including any with deposits in excess of the FDIC's insurance limits, will automatically become depositors of National Bank, and they will continue to have uninterrupted access to their money. Depositors will still be insured with the new institution. Therefore, there is no need for customers to change their banking relationship to retain deposit insurance.
It seems that National Bank was able to cherry-pick a small portion of the assets, as well as take over the deposits. Meridian was a very small bank, with only $39 million in assets. If this plays out as usual, the FDIC fund will take a hit of about 1/4 of the bank's asset size, or $10 million after the sale of the rest of the assets.

Also a bit unusual is the fact that the FDIC press release specifically states that ALL of the deposits will be transferred, even those over the $100k (now $250k) limit. There was talk in the news today about the FDIC guaranteeing all deposits, regardless of amount. Perhaps this is the first test of that idea. Who knows any more?



The Darwin Principle 

When a burner goes out on your stove, you don't stop eating.
--Some lady on the radio this morning

The station I was listening to this morning had a stretch where the hosts got lambasted for being a bit to cheery considering all of the shit that's hitting the fan. Some guy had called in and said that although he had gotten all of his money out of the market quite a while ago, he was still losing sleep at night because of what's happening. He felt the show was taking the situation too lightly.

The hosts asked him if it would make him feel better if they were more doom-and-gloom. Would he get more sleep each night if they were the 24-hour Market Crash channel? Of course, he said "No".

The next lady got on and made the quote at the top of this page. Her point was there are certain things that happen that are beyond our control. For instance, none of us has any power to stop the ongoing market crash. Unless you want to curl up in the corner and suck your thumb, you have got to persevere.

It's all about adapting.

I think we're in for a period of change most people are not mentally ready to handle. We've become so used to being able to whip out a credit card and buy whatever we want at any time we want it. I don't think that is going to continue, at least in the near-term.

As we march towards socialism, capitalism - in the form of black markets and under-the-table deals - will, ironically, thrive. People will get what they want or need even if Nanny is unable to provide it.

Think about the old Soviet Union. Their black market was almost out in the open. Nanny looked the other way because they knew there would be revolt if people couldn't get the niceties they wanted, or larger quantities of staples than what were doled out by the State.

I think the underground economy is about to blossom.

Obviously, that is terrible news for Nanny. Increased responsibilities coupled with declining tax revenue is a recipe for disaster. When you incent people to become dependent upon the state, the people actually working to fund the Nanny Ponzi Scheme figure out ways to cut off the cash flow. Just ask the state of California how that little scenario is working out.

Look what's happening nationwide right now. All of this bailout money is going to have to be paid back. The expectation is that we'll each do our "fair share". We'll show our Biden brand of patriotism and pay more taxes for the Greater Good.

Guess again.

It is because of these policies that people are being pushed towards working more and more under-the-table. People are sick and tired of seeing increasing portions of their paychecks going to Nanny, while at the same time seeing fewer and fewer benefits.

They, like most people, understand that the only way to kill the Nanny beast is to starve it. Cut off the income stream to bring some semblance of restraint to our out-of-control government.

Take care of your own. Get back to the Constitutional principles of self-reliance and smaller government. Ironically, Nanny's free-spending ways may bring us right there.

I don't yet know where these events will take me personally. There are many options, and most have a good deal of uncertainty. I'm hoping my experience in risk management will help me to assess what is going on, and to act correctly.

Observe. Assess. Plan. Act.

I think the ability to adapt - to think on my feet - will benefit me and my family. We're clearly in the Observe and Assess stages. I know that hiding in a shell - losing sleep at night like the radio station caller because of all the turmoil that is swirling around - would be the worst thing to do.

Don't paint yourself into a corner. Give yourself some 'outs'. Retain your flexibility. Adapt to the situation.

Labels: , , , , , , , ,


Thursday, October 09, 2008

Nationalize Banks? Check. 

In the absence of justice, what is sovereignty but organized robbery?
--Saint Augustine

Nationalization of the US banking industry is progressing nicely, thank you very much. Apparently just as planned.
The Treasury Department is considering ways to inject capital directly into banks, possibly by taking equity stakes, as the financial crisis continues to worsen.
'Equity stake' is just a phrase used by the Treasury PR hacks to describe Nationalization. The vast majority of the public, and certainly the press, don't get it. When they hear the word 'equity', they know that's a good thing, so THIS must be a good thing.
Treasury Secretary Henry Paulson, in a marked shift in rhetoric, played up Treasury's newfound authority to "to inject capital into financial institutions" in remarks Wednesday. Mr. Paulson, who won approval from Congress to buy $700 billion worth of distressed assets, had previously focused on Treasury's plan to buy mortgage-related securities from financial institutions that are having trouble getting the assets off their books.
[gasp] A Bush Administration official said one thing but actually intended on doing another?! I'm just shocked![/gasp]

So now Nanny wants to actually buy parts of banks. As an owner, Nanny will be able to influence the operations and policies of the bank. Like who to lend to, how much to pay on deposits and what markets to expand into.

All the while ALSO being in charge of regulating those very same banks. I believe that is called "Conflict of Interest" by most folks.
Such a move was not under consideration just a few days ago but has become more of a possibility in recent days as the stock market has plunged and the credit crunch shows no signs of easing.
Let's see. How do I say this a succinctly as possible?

Bull Shit.

The recent actions by the Fed and the Treasury are what has caused this tanking of the markets. It's not like they were innocent bystanders. They are active participants. No, they are driving the process.

The markets see that the amount of money that is involved is not enough to make any material changes. They see that the result will be obscene spikes in inflation. Rather than fixing the problem, these actions are compounding it.

This statement absolutely floors me:
Treasury wants to design something voluntary that encourages healthy institutions to participate. Treasury is discussing whether to buy preferred stock or find some other way to inject capital into the firms.
Why would a healthy bank want to participate in this? If they're healthy, they don't need, nor should they want, Nanny as a shareholder.

I thought the plan was to bailout sickly banks, not further enrich healthy ones. Apparently, Congress and the American people were not clear on the concept.

An equally troubling development that got very little discussion or critique was the coordinated rate drop by 11 central banks.
On Wednesday, central banks in the U.S., the euro zone, the U.K., Canada, Sweden and Switzerland each cut short-term interest rates by a half percentage point, noting that "the recent intensification of the financial crisis has augmented the downside risks to growth." Acting on its own, the People's Bank of China also cut rates, as did Australia's central bank, a day earlier. Later, central banks in South Korean and Taiwan cut interest rates, too, and Brazil's central bank cut reserve requirements on cash and term deposits.
Good Lord, even the Commie Chinese participated in this little event.

I have to believe this is just the first of these "coordinated events". To what end, I don't even want to consider.

Oh, and just in case you'd forgotten:
5. Centralization of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly.
"Hey, brother, can ya spare an Amero?"

Labels: , , , , , ,


Tuesday, October 07, 2008

Fed Commercial Paper Purchase Insights 

The attempt to combine wisdom and power has only rarely been successful and then only for a short while.
--Albert Einstein

Geez, is the hemorrhaging of tax dollars ever going to stop?

Uncle Ben Bernanke - the Fed Head - has devised a new way to spend our tax dollars. He is now going to buy unsecured Commercial Paper.
The Federal Reserve will create a special fund to buy U.S. commercial paper, seeking to unblock the financing tool that drives everyday commerce for American businesses.
Before I get into what this means, I just want to point out the utter stupidity (or perhaps complicity) in the quote posted above. Companies use Commercial Paper to pay their bills. Things like rent, payroll, utilities. Bloomberg considers this 'everyday commerce'? Shit, talk about putting lipstick on a pig.

Anyways, Commercial Paper is used quite a bit by large corporations, as I alluded to, to help smooth out the bumps in cash flow. Many businesses sell their products or services on terms - 30 days, 60 days, etc. - but have bills that come due every week or month.

Most small businesses do what is called, Asset Based Lending. They borrow against their accounts receivables (a list of money owed to them). For instance, if they have sold a dozen washing machines to a retailer, that retailer might have 45 days to pay the manufacturer. The manufacturer has to pay his employees each week, and his rent each month. He borrows for a short term until he gets paid by the retailer.

A bank will lend them a percentage of receivables balance based upon the quality of the buyer of the goods or services, and the age of the receivable. They also take the receivables as collateral against non-payment by the manufacturer. Many times, the payments from the buyer actually go directly to the bank, and the bank sends the net proceed on to the manufacturer.

Commercial Paper is similar in its intent - the proceeds are used to pay ongoing bills, but they typically have no collateral securing the debt. It is used by big, well-know companies will well established track records.

Think of it as a great big unsecured credit card the company uses for cash advances. Obviously, because of the unsecured nature of these credit facilities, the risk is much higher.

That's what Uncle Ben will soon be buying. With our money. And remember, this is not a loan. We're actually buying these notes, not lending to the originators of the notes.

So, how much of our recently approved $700 billion bailout boondoggle will this cost?

Not a thin dime.
The Treasury's deposit with the Fed's special purpose vehicle will be substantial, officials said. The funds won't come from the $700 billion rescue plan authorized by Congress last week.
No, this is on top of the bailout.

I always get nervous when anyone in the government considers a spending program to be 'substantial'. To you and me, that usually means that it is beyond comprehension.

How big might this be?
The central bank's special purpose vehicle will be big enough to backstop the entire market, one official said on condition of anonymity.
Come on, quit playing around. How big is this bailout that was not discussed publicly nor voted upon by our elected officials (like that would make a difference)?
Today's action follows a slide in the commercial-paper market to a three-year low of $1.6 trillion last week as investors fled even companies with few links to the subprime mortgage crisis.
So, the shrunken market is now $1.6 trillion, and we're going to be printing up enough money to 'backstop' the whole damned thing!? A project more than double the size of the Official Bailout, and it is signed, sealed and delivered without a single debate in Congress?

How can a single man have so much unilateral power?

I simply don't know what to say. Our government is wildly out of control. The levers of power are being pull by the big business contributors, and their demands will be funded from our pay checks.

The Other Ryan did a couple of posts about the underground economy. I just ordered Ragnar's book, and another one on the same topic.

I just don't want to play any more. I try and follow the rules. I call and write my representatives. Tens of thousands of fellow Californians do the same thing, and we're ignored, much like annoying little children. "Shush! Mommy's doing important work here!" I see few options other than cutting off the cash flow.

Time to think this one through...

It's funny (not in a 'ha ha' way) how the only thing from the bailout package that would directly benefit regular people - the increase of the FDIC limit from $100k to $250k - is only temporary. After the end of 2009, it will go back down to $100k.

Thanks for thinkin' of us....

Labels: , , , , , ,


'Splain It To Me, Lucy... 

Society everywhere is in conspiracy against the manhood of every one of its members. The virtue in most request is conformity. Self-reliance is its aversion. It loves not realities and creators, but names and customs.
--Ralph Waldo Emerson

I need some help here. My 'connect the dots' detector is going off. I need someone to fill in some blanks to explain why this series of events is not as ugly as it appears.

It all started with the bailout. It seemed incredible to me that the critters of both houses of Congress would so clearly and blatantly disregard the will of their constituents. These politicians got absolutely hammered with email, faxes and letters demanding that they vote against the bailout.

Some politicians even came out and publicly stated that they were overwhelmingly told by their voting public to reject the plan, yet they still voted for it. While it is always difficult to understand the rationale employed by a Congress-critter, it was so plain and simple to understand the wishes of the voters, it seemed like political suicide to go against the tide.

Yet they did so. What could be the reason for this?

I saw on some site somewhere, the mention of a threat of martial law being used with some Congress-critters. I dismissed this as total far-left or far-right wing hyperbole. Until I saw the Congressman's lips actually move:

WTF? Why in the hell is this not being plastered all over every broadcast and cable channel in the nation? We can get a Congressional "Blue Ribbon Panel" assembled almost over night to look into steroid use in a private industry, but when a Congressman has heard of martial law threats, we can't even get an investigative report by Geraldo Rivera?

The martial law thing starts the gray cells a-clickin'. A couple of things come to mind. Dots start connecting.

I remember seeing an article in ArmyTimes.com about how, for the first time in our country's history since Reconstruction, an active military brigade was being activated with the specific purpose of quelling domestic unrest.
Beginning Oct. 1 for 12 months, the 1st BCT will be under the day-to-day control of U.S. Army North, the Army service component of Northern Command, as an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks.

It is not the first time an active-duty unit has been tapped to help at home. In August 2005, for example, when Hurricane Katrina unleashed hell in Mississippi and Louisiana, several active-duty units were pulled from various posts and mobilized to those areas.

But this new mission marks the first time an active unit has been given a dedicated assignment to NorthCom, a joint command established in 2002 to provide command and control for federal homeland defense efforts and coordinate defense support of civil authorities.
"No", you say? They're only available in case of terrorist attacks, right? From the same article was buried this little nugget:
The 1st BCT’s soldiers also will learn how to use “the first ever nonlethal package that the Army has fielded,” 1st BCT commander Col. Roger Cloutier said, referring to crowd and traffic control equipment and nonlethal weapons designed to subdue unruly or dangerous individuals without killing them.

The package is for use only in war-zone operations, not for any domestic purpose.

“It’s a new modular package of nonlethal capabilities that they’re fielding. They’ve been using pieces of it in Iraq, but this is the first time that these modules were consolidated and this package fielded, and because of this mission we’re undertaking we were the first to get it.”

The package includes equipment to stand up a hasty road block; spike strips for slowing, stopping or controlling traffic; shields and batons; and, beanbag bullets.
The package is for use only in war-zone operations, not for any domestic purpose. Sure it is. And I believe that as much as I believed it when Rumsfeld told us he knew exactly where Saddam's WMDs were located. And when Gonzalez told us the telecom companies weren't illegally sending phone records to the NSA. And when Paulson asked us to trust him with his 3-page bailout plan.

Bull shit. These troops are being pre-positioned to suppress domestic unrest. The kind of unrest that would be unleashed were martial law to be imposed.

So I'm thinking, "Uhm, what about the Posse Comitatus?" You know, the post-Reconstruction era law that specifically says that military units may not be used for domestic police activities? How can they get away with this, especially so far out in the open? They're not even trying to hide the fact that they're doing this.

From the Posse link:
HR5122 also known as the John Warner Defense Authorization Act was signed by the president on Oct 17, 2006 John Warner National Defense Authorization Act for Fiscal Year 2007. Section 1076 is titled "Use of the Armed Forces in major public emergencies". Removing the legalese from the text, and combining multiple sentences, it provides that: The President may employ the armed forces to restore public order in any State of the United States the President determines hinders the execution of laws or deprives people of a right, privilege, immunity, or protection named in the Constitution and secured by law or opposes or obstructs the execution of the laws of the United States or impedes the course of justice under those laws. The actual text is on page 322-323 of the legislation.
Posse Comitatus was essentially erased. But wait, there's hope:
As of 2008, these changes were repealed, changing the text of the law back to the original 1878 wording, under Public Law 110-181 (H.R. 4986, Section 1068,)
Sweet! Order has been restored.

But not for long:
...however in signing H.R. 4986 into law President Bush attached a signing statement which indicated that the Executive Branch did not feel bound by the changes enacted by the repeal.

President Bush Signs H.R. 4986, the National Defense Authorization Act for Fiscal Year 2008 into Law

Today, I have signed into law H.R. 4986, the National Defense Authorization Act for Fiscal Year 2008. The Act authorizes funding for the defense of the United States and its interests abroad, for military construction, and for national security-related energy programs.

Provisions of the Act, including sections 841, 846, 1079, and 1222, purport to impose requirements that could inhibit the President's ability to carry out his constitutional obligations to take care that the laws be faithfully executed, to protect national security, to supervise the executive branch, and to execute his authority as Commander in Chief. The executive branch shall construe such provisions in a manner consistent with the constitutional authority of the President.



January 28, 2008.

So 'W' signs the bill, but by use of the signing statement, he is allowed to disregard its restrictions.

In snooping around for all of this anti-Posse information, I kept reading about something called 'Operation Garden Plot'. It's about how the US Government has plans to put down civil unrest. Virtually all of the sites on which I was reading this were clearly left-wing whacko sites. Google search after Google search kept bringing up the same pages being cited with Garden Plot.

I then ran across a page on the US Coast Guard site. Good God, Operation Garden Plot really exists.
The department of the Army Civil Disturbance Plan (DA GARDEN PLOT), promulgated in reference (a), is the governing publication for planning, deployment, employment, and redeployment of federal military resources involved in countering domestic civil disturbances. Coast Guard units may be placed within a Department of Defense (DOD) task force under operational control of the designated task force commander in GARDEN PLOT operations.
As I research this, I find that Garden Plot has actually been considered since the 1960's and was tested via something called Rex 84 in (feel the irony) 1984. It was actually used during the Rodney King riots, and after 9/11 as well. I also went to the the Army.mil site, and was able to find one reference to Garden Plot as well.

What is so very disturbing, though, is as the ArmyTime.com article points out, we have never before had troops specifically tasked to Garden Plot.

Oh, and NorthCom is in charge of administering Garden Plot.

Why now?

As if that wasn't enough to explode my brain, there is an article from last Wednesday in the Wall Street Journal about new spy satellites. Satellites to be used over US territory.
The Department of Homeland Security will proceed with the first phase of a controversial satellite-surveillance program, even though an independent review found the department hasn't yet ensured the program will comply with privacy laws.

The program is designed to provide federal, state and local officials with extensive access to spy-satellite imagery -- but no eavesdropping -- to assist with emergency response and other domestic-security needs, such as identifying where ports or border areas are vulnerable to terrorism.
Sure. No eavesdropping. I trust Uncle Sugar. You? Yeah, Nanny's history of observing the letter and spirit of the Constitution is well chronicled. Warrantless Wiretaps, anyone? Nanny generally ends up wiping her ass with the document.

To recap: The majority of both houses of Congress ignore overwhelming public disapproval of the bailout. A Congressman is informed of a threat of martial law if the bailout does not pass, and Nanny just so happens to have all of the pieces in place to do such a thing. "Legally." A plan, troops and a command structure. New domestic surveillance satellite capabilities round out the deal.

Is all of this somehow connected? Or is just a coincidence and they are all just a bunch of independent occurrences?

I'm not much of a conspiracy theory guy, but as I said earlier, my 'connect the dots' detector is going off, big time.

Someone give me another explanation. Please.
A conspiracy is nothing but a secret agreement of a number of men for the pursuance of policies which they dare not admit in public.
--Mark Twain

Labels: , , , , , , , ,


This page is powered by Blogger. Isn't yours?