Thursday, April 30, 2009

Wall Street Says Bad News Is Good News


As reported in The New York Times, bad news was treated as good news by Wall Street.

U.S. Economy in 2nd Straight Quarter of Steep Decline

Published: April 29, 2009

The economy contracted sharply in the first quarter of the year as businesses scaled back on investments and cut their stockpiles of unsold goods, the government reported on Wednesday. But the numbers suggested that the worst of the recession may be fading as the government’s stimulus filters into the economy.

Let me put my 2 cents in with Wall Street's billions since yesterday's trading seems to reinforce that perspective.

  • This recession will not be ended by housing construction... not with the glut of foreclosed homes available and the stockpile of owned homes with people anxious to sell.
  • This recession will not be ended by manufacturing which is in desperate shape with the effects of the auto industry blasting through the suppliers and related industries.
  • This recession will not be ended by social security recipients super-charging the economy with their $250 stimulus checks.
  • This recession will not be ended by the new intellectual-property based economy which is easily copied and usually is.
  • This recession will not be ended by the new "green" economy which will create more job losses in traditional energy resource suppliers that will be saddled with onerous taxes.
From what I can see, this recession will be over when Pres. Obama declares it to be over and he can focus on saving the planet and hugging those who detest the U.S. Or it will simply end gradually as the financial adjustments millions of individuals have made allow them to resume a more "normal" life... with a lot less savings.


Wednesday, April 29, 2009

Twice The Fun


After the better part of a decade waiting, my wife and I have become grandparents... twice. Jackson came in January and Rex just arrived. Although they are now many hundreds of miles apart, we hope they will grow to know each other.

Obama Wants U.S. To Return To Science


From AFP:

Obama vows return to US science prominence

WASHINGTON (AFP) — President Barack Obama pledged Monday to return the United States to a "high water mark" of scientific achievement, announcing a goal to commit three percent of GDP to research and development.

Obama laid out a deck of initiatives in a speech at the National Academy of Sciences, where he vowed to implement what he described as the largest-ever US investment in scientific research and a dramatic reversal of the ideology-driven policies of his predecessor George W. Bush.

U.S. high school graduation rates:

WASHINGTON — Seventeen of the nation's 50 largest cities had high school graduation rates lower than 50 percent, with the lowest graduation rates reported in Detroit, Indianapolis and Cleveland, according to a report released Tuesday.

The report, issued by America's Promise Alliance, found that about half of the students served by public school systems in the nation's largest cities receive diplomas. Students in suburban and rural public high schools were more likely to graduate than their counterparts in urban public high schools, the researchers said.

Nationally, about 70 percent of U.S. students graduate on time with a regular diploma and about 1.2 million students drop out annually [ed - and what percent of the 70% are just given their diplomas to get them out of the system?].

"When more than 1 million students a year drop out of high school, it's more than a problem, it's a catastrophe," said former Secretary of State Colin Powell, founding chair of the alliance.

Well, we can get some of those Chinese Ph.Ds to do our research for us.

Don't you love how Bush did everything on a non-scientific, ideological basis

... and the Obama Democrats are doing everything on a scientific, non-ideological basis?

We’re seeing the reality of a lot of the North Pole starting to evaporate, and we could get to a tipping point. Because if it evaporates to a certain point - they have lanes now where ships can go that couldn’t ever sail through before. And if it gets to a point where it evaporates too much, there’s a lot of tundra that’s being held down by that ice cap....” Henry Waxman

On NBC’s “Meet the Press” on Sunday, the speaker [Nancy Pelosi] twice seemed to suggest that natural gas – an energy source she favors – is not a fossil fuel.

I believe in natural gas as a clean, cheap alternative to fossil fuels,” she said at one point. Natural gas “is cheap, abundant and clean compared to fossil fuels,” she said at another.

Now... if we can only align reality with political hyperbole.


Tuesday, April 28, 2009

How to turn greenhouse gas into a clean fuel


Cross-posted from my other blog.

Big headlines in New Scientist:

How to turn greenhouse gas into a clean fuel

THIS WEEK: 11:37 28 April 2009

A new process converts carbon dioxide into methanol, without the need for extreme temperatures and pressures

Just one problem:
Methanol combustion is: 2CH3OH + 3O22CO2 + 4H2O + heat
Are we missing something here?

Oh, and the stuff that is made into livestock feed comes out the other end as methane... that's a lot better than CO2.


Free Trade Versus Mercantilism


Much has been written about the need to keep trade "free," but in reality there is a surprising amount of trade not based on that idea at all. A great deal of present trade is based on a centuries-old approach to economics: mercantilism.

From the Library of Economics and Liberty:

Mercantilism is economic nationalism for the purpose of building a wealthy and powerful state. Adam Smith coined the term “mercantile system” to describe the system of political economy that sought to enrich the country by restraining imports and encouraging exports. This system dominated Western European economic thought and policies from the sixteenth to the late eighteenth centuries.

The goal of these policies was, supposedly, to achieve a “favorable” balance of trade that would bring gold and silver into the country and also to maintain domestic employment. In contrast to the agricultural system of the physiocrats or the laissez-faire of the nineteenth and early twentieth centuries, the mercantile system served the interests of merchants and producers such as the British East India Company, whose activities were protected or encouraged by the state.
Most economists today will argue that mercantilism is dead... or should be. But the truth is that many nations in the 20th and 21st centuries have used some form of mercantilism to gain economic advantages... including the U.S. A lot of what is mercantilism brings on the image of "sweatshops" where people worked long hours for little pay under horrible conditions. That was certainly a facet of the way mercantilism was implemented. But it is not necessarily an intrinsic part of that approach.

After WWII, Japan turned to mercantilism to rebuild... and it was spectacularly successful. Taiwan and Korea have implemented similarly successful efforts to build the wealth of their nations. Now China has turned all previous efforts in this vein into pathetically amateurish attempts. And, yes, economists continue to say how bad it is for those countries and how they are subsidizing us and how it only helps us.

But when you step back and look at what has happened in the past few decades, you begin to see the rusting of America's economic engine in favor of a system that manipulates financial instruments. That worked for awhile, but the house of cards has come crashing down with very little upon which to fall back. Our trade and tax policies have aided the mercantilists while crushing our own manufacturing.

[click image for larger view - U.S. BLS]

But the refrain from the economists is that we are moving toward a post-industrial, post-manufacturing economy into an intellectually based one. Sure, except look at which countries are producing the most Ph.Ds. Fully one-third of U.S. doctorates are to foreign students [which I guess you can argue is part of our intellectually based economy... while they are attending our universities]. But they go back to nations that actually need expertise in making things.

Look at which country has abysmal high school graduation rates.

Look at which country believes its future can be secured by government loans.

Go ahead; look!

We like to pretend that there is free trade, but that hardly exists. Some cry out for "fair trade," but they can't really define what that is. Trade should be based on self-interest, but we tend to look at self-interest only in the sense of the "immediate transactions" rather than the long-term impact on our system.

We have ceded our manufacturing competitiveness on the hollow premise of becoming the intellectual supplier to the world. The problem is we simply don't have the "intellectual workforce" to make that happen for more than a small segment of our population.

Now we are simply another debtor nation with a growing welfare demographic. And China, our creditor, has other plans.


Monday, April 27, 2009

Aid To Iraq Revisited


The New York Times reports:

BAGHDAD — Secretary of State Hillary Rodham Clinton arrived here unannounced on Saturday to reassure Iraqis that the United States will support them, even as it withdraws combat troops. But with Iraq reeling from a week of suicide bombings, she got a jittery reception from a country that still plainly relies on the United States for security, stability and economic survival.

In an encounter with Iraqi students, journalists and activists, Mrs. Clinton was peppered with questions about how the United States could help Iraq in ways large and small — from building confidence in the Iraqi armed forces to supplying farmers with more up-to-date machinery.
What is the U.S. doing in Iraq? The USAID site has some information:

Cover of USAID/Iraq Newsletter: Volume 2, Issue 1
USAID/Iraq Newsletter: Volume I, Issue 2
[PDF, 1 mb]

USAID provides a focused approach to essential issues, addressing the root causes of instability and building the foundation for a prosperous Iraq. It bridges the transition from the short-term provision of essential services to long-term, integrated, and Iraqi-led development. USAID's overarching goal is to contribute to stability and security as part of the U.S. government National Strategy for Victory in Iraq.

USAID is a key element of the United States plan for victory in Iraq. Emphasizing responsiveness and sustainability, USAID/Iraq's new strategy calls for an expanded role in supporting focused stabilization, establishing the foundation for economic growth, and building national capacity. These efforts, in the short-term, will help stabilize areas impacted by the insurgency and mitigate the appeal of insurgent recruitment efforts. Over the longer term, the establishment of democratic institutions and sustainable economic development will form the foundations of a stable, democratic, and prosperous Iraq.

Latest Iraq Success Stories

USAID Partnership with Iraqis Helps Revitalize Orchards, Vineyards - March 9, 2009
The U.S. Agency for International Development (USAID) Mission Director Christopher D. Crowley and Future Agriculture Development Organization (FADO) Chairman Hyder Mohan participated in a ribbon-cutting ceremony to begin a program that will help invigorate Iraq's horticultural industry.

USAID Conference Advances Ideas on Farm Water Management in Iraq - March 4, 2009
Iraqi Minister of Water Resources Dr. Abdul Latif Jamal Rashid and U.S. Agency for International Development (USAID) Deputy Mission Director Thomas R. Delaney today inaugurated an irrigation symposium focused on improving farm productivity through effective water management and crop selection.

USAID Opens Shawakeh Fish Market to Attract Businesses, Restore Stability - February 20, 2009
The U.S. Agency for International Development (USAID), in partnership with the Karkh District Council, neighborhood councils, and the U.S. military, opened the Al Shawakeh Fish Market today to stimulate employment and business opportunities in the community.

What are the Iraqis doing to help themselves?
Saturday, 25 April 2009, 10:18 EDT
Oil export ban costs Iraq dearly, Kurds say

Ashti Hawrami, Iraqi Kurdistan's natural resources minister, gestures during an interview with Reuters in the city of Arbil April 16, 2009. REUTERS/Thaier al-Sudani

The Kurdish Globe
Iraqi oil ministry still seen as a major barrier for export of oil.

Iraq, hungry for investment after six long years of war, is losing millions of dollars a day due to Baghdad's refusal to permit the Kurdish north to export oil, a top official in the largely autonomous region told Reuters.

«Iraq is losing millions and millions of dollars a day. We lost several billion dollars last year by not exporting from Kurdistan,» Ashti Hawrami, Iraqi Kurdistan's natural resources minister, said in an interview.

«Who is responsible for that? Not us. We are ready for that oil to be exported,» he said.

Iraq, where insurgent attacks persist even as U.S. and Iraqi officials hail a falling sectarian bloodshed from the dark days of 2006-07, is struggling to boost oil output and clinch deals with major global firms to develop its massive reserves.

But a dispute over where Kurdistan's boundaries lie is at the heart of ominous strains between Arbil and the government of Shi'te Arab Prime Minister Nuri al-Maliki in Baghdad.

As Kurds complain of what they see as Maliki's increasingly authoritarian ways, some fear the rift could undermine Iraq's growing security. Especially sensitive is a Kurdish quest for control of disputed areas like the strategic oil city of Kirkuk.

The Iraqi Oil Ministry has repeatedly condemned oil contracts Kurdistan has signed with foreign companies as illegal, pitting Iraqi Oil Minister Hussain al-Shahristani against Hawrami in a public war of wills.

'World class reserves'

Hawrami, from his residence in the town of Masif Salahuddin, perched on a hilltop outside the Kurdish capital Arbil, spoke of mismanagement and flawed strategy in Shahristani's steps to reinvent an underperfoming oil sector and make new deals.

Iraqi output is 2.3-2.4 million barrels per day, below what it was before the 2003 U.S.-led invasion to oust Saddam Hussein.

On principle, Baghdad has spurned production-sharing deals investors prefer as it seeks long-term oil and gas deals. Hawrami called that impractical and inefficient-a «failed model.»

«It is a dogma-driven process, this nationalistic approach ? It's done for political reasons. Once you politicize the contracts you're asking for trouble. You're asking for reduction of state revenue and you frighten the contractors,» he said.

Hawrami had an indignant response to Shahristani's suggestion in a recent interview that partners in Kurdish deals, like DNO International of Norway, were

«They are professionals with excellent track records, but even if they are fourth rate or fifth rate companies as the ministry of oil may wish to label them, they have discovered world class reserves, first class operations, at the minimum cost possible.» There are few signs Baghdad is poised to end a long-running spat and let Kurdistan export oil through a national pipeline.

Hawrami said Shahristani reneged on promises last year to do so. Shahristani has said Kurdistan is holding back its own oil.

Such rancor bodes poorly for hopes for a swift end to Kurds' and Arabs' long impasse over a national oil law, needed to ease investors' concerns about hunkering down billions of dollars in an unproven democracy still mired in violence.

It may be even harder to render tough concessions as politicians of all stripes look to December's national polls.

«I'm not very optimistic at the moment,» Hawrami said.

The need to leverage Iraq's oil resources becomes all the more urgent as the government, which relies on oil for more than 95 percent of its revenue, grapples with low oil prices.

The drop from a record of $147 a barrel last year to near $50 threatens plans to buy weapons, build schools, pave roads and much more.

«We need to rebuild the country now-this year, not next year ... We wasted all that time and should not waste any more.»
It looks as if the new democracy in Iraq has achieved one thing: Iraq has perfectly mimicked the U.S. political self-interest system.


Sunday, April 26, 2009

The Automotive Future


Chinese manufacturers have a history of copying products from Japan and the West. Here in the U.S., we would call that theft, but in China that is considered respectful emulation. So, while I don't support specious environmental taxes on domestic or imported goods [see yesterday's post], it seems the better part of wisdom to know from whom you are buying those goods.

How about these examples? Chinese manufacturers' information from here.

Chery Automobile
Chery Automobile
Chery Automobile Chery Automobile Co.,Ltd. was founded in 1997 in Wuhu City, P.R.China. Despite its humble beginning, Chery has achieved many unlikely breakthroughs and become the fastest growing independent automaker in China. Chery is committed to developing world-class automobiles via cooperation with top engineering firms such as Lotus Engineering of the U.K, and Mitsubishi Automotive Engineering of Japan, and leading auto designing firms such as Bertone and Pininfarina of Italy. In its relentless pursuit of quality, Chery adopts DURR Paint Systems in its paint shop in 2004. In 2005, as a groundbreaking event for Chinese automotive industry, Chery starts producing China¡¯s first high-performance Euro IV engines in cooperation with AVL List of Austria. In addition, in J.D.Power 2004 China Initial Quality Study, Chery QQ finishes NO.1 in compact car segment. With an ambition to become a global player, Chery has so far launched its products in 29 countries. For the time being, Chery is developing a new line-up of products aiming at auto markets in the U.S and EU. In 2005, a strategic partnership is formed between Chery and Vesionary Vehicles of the USA for launching Chery products in North America in 2007. more info on Chery Automobile...

That's the CHEVY - Toyota....

BYD Auto
byd auto
BYD Auto
BYD Company Ltd. owns more than 40,000 staff members all over the world with its market value over HKD 15 Billion. BYD AUTO has adhered to the international development road and devoted itself to researching, developing and manufacturing the Fuel vehicle-vehicle and Hybrids-vehicle. Inheriting the car manufacturing elite from the former Tsinchuan Auto Co., LTD, which had a history of several decades, and melting the first-class technology of BYD IT and electronic equipments manufacturing, BYD AUTO has become a world-class auto manufacturing company. more info on BYD Auto...

That's the BMW Auto...

Lifan group Autos
Lifan Autos and Motorcycles
After 12 years' efforts, Lifan Group rapidly grown up and developed to be a state level large-scaled individually-run enterprise centering on science and technology development, engine & motorcycle manufacture and sales(including export) and incorporating automobile manufacture, soccer industry, financial securities, culture/media Chongqing Lifan Industry (Group) Co., Ltd is the biggest individually-run motorcycle manufacturer in China. Lifan's products are widely sold to over 100 countries covering South-East Asia, West Asia, Europe, Africa, South America. Lifan is new in the Auto industry but may be a very big player in the race of Chinese Auto manufacturers going international. more info on Lifan Car...

That's the Buick...

Qingling Motors
Qingling motors
Qingling Motors
Qingling Motors (Group) Co., Ltd. is one of 15 leading automobile manufacturers in China, and is also a large scale automobile group taking Qingling Motors Co., Ltd. as its backbone, 10 important subsidiaries as its cores and more than 200 suppliers as its support. Qingling is engaged in the manufacture of N and T series light commercial trucks, F series heavy commercial trucks and UC series MPVs with the newest technology from ISUZU.

That's Isuzu... maybe we can give them a pass because of an apparent connection to Isuzu... maybe.

Soon we will be importing all sorts of low-priced automotive products from China that seem to be just like the brands we were used to. Economists and government officials will talk about the "China miracle" and wonder why we can't do what they do.


Saturday, April 25, 2009

Taxing Carbon Imports


It was only meant to be sarcasm. I never thought anyone would take it seriously when I wrote:

The EPA, with the strong leadership of the Obama administration and the Democratic Party controlled Congress, are about to impose a vast new panoply of regulations and economic burdens on the United States in the name of climate control. The U.S., however, is only a minority producer of human-generated CO2. The two fastest growing economies have become the largest producers of CO2, China already is the world's biggest man-made CO2 producer (2007) and India is coming up fast, and are also becoming the largest suppliers of goods consumed in the United States. They will have no comparable restrictions on producing CO2.


It was sarcasm because the EPA is on a fool's errand regarding CO2 regulation in the U.S. and because the obviously stupid bureaucracy enforcing taxes and fees on products produced elsewhere based on some theoretical CO2 pollution confounds human reason and intelligence.

Little did I realize that Henry Waxman had already taken it upon himself to promote such stupidity. H/T Dr. John Ray

From Financial Times:

Chinese official warns US on protectionism

By Alan Rappeport in New York

Published: April 21 2009 19:29 | Last updated: April 21 2009 19:29

A top adviser to the Chinese government on Tuesday warned that a proposed US border tax on carbon sensitive materials “smells of protectionism” and could spark retaliation from developing countries.

During a speech at New York University about how the US and China can forge a closer partnership, Tung Chee-hwa, vice-chairman of the Chinese People’s Political Consultative Conference (CPPCC), the Chinese government’s official advisory, said that a proposed “border adjustment” programme could be challenged through the World Trade Organisation and that he was “distressed” by the new bill introduced to Congress.

The programme in question was introduced earlier this month by two powerful Democrats in the House of Representatives. The bill includes aggressive climate targets to be met through a green house gas emissions cap and trade programme, where companies would be eligible for rebates to compensate for cost they incur. More controversially, the US government would be able to levy import taxes on foreign manufacturers to cover carbon contained in US-bound products.

“This is particularly unfair to China,” Mr Tung, who was chief executive of Hong Kong from 1997 until 2005, said.

In March, Steven Chu, US energy secretary, told Congress that a carbon border tax would help “level the playing field” with countries with looser carbon standards.

The legislation, introduced by Henry Waxman, California Democrat and chairman of the Energy and Commerce Committee and Edward Markey, Democrat from Massachusetts and Chairman of the Energy and Environment Subcommittee, aims to cut green house gas emissions by 20 per cent by 2020 and by more than 80 per cent by 2050, from 2005 levels.

The draft proposal would require electricity suppliers to get 25 per cent of their power from renewable sources, such as wind and solar, by 2025. It would establish a national renewable energy standard and an energy efficiency standard aimed at cutting power demand by 15 per cent by 2020 and natural gas demand by 10 per cent.

On Tuesday Mr Tung said that China was taking its own aggressive measures to combat climate change but that he was concerned about the US taking a more protectionist stance.

“The lesson from 1929 was that we went to protectionism and the whole world collapsed,” he said. “China and America are on the same boat.”

A vote could on the border tax bill could come as early as June, with the Senate expected to make its proposal in the autumn.

This guy is dumber than he looks. Only Californians could love him.

Henry Waxman via Moonbattery.

You are now entering The Twilight Zone... the twilight of many things.
It was a bright cold day in April, and the clocks were striking thirteen.
George Orwell, "1984", first sentence

Friday, April 24, 2009

General Motors Brand Confusion


Yesterday, I posted that General Motors needed brand consolidation. Here is the history of GM's domestic brands from the mid-20th century [actually the six historical brands were around a lot longer than that].
Now compare that timeline with GM's U.S. market share which was once 2-1/2 times as large [source].

That's complex enough for a corporation with less than 20% of the automotive market share. But when combined with model complexity... that equals dilution... of engineering and design effort, marketing resources, service support, parts inventory and management staffs... as well as brand identity.
There are some models within these various brands that I found hard to fit into the categories above, like the Chevrolet HHR [small car/small CUV] and Camero [mid-sized coupe/convertable or Roadster/Sport].

Comparing this with Toyota and Lexus [from their websites], you see the difference.

While there are only two brands versus seven, Toyota seems to have caught some of the over-modeling disease of domestic brands. Lexus is particularly confusing with their alphabet soup, but Lexus has its niche following and doesn't overlap too much with the Toyota models. Toyota may be getting a bit too much into internal model overlap, but nothing near GM's situation.

General Motors needs to figure out what a suitable brand strategy for its situation is... presuming General Motors comes out of this economic hole. It isn't seven brands; it may be two or three.

These brands have little value beyond sentiment or outdated image:

  • Pontiac [lost between Chevrolet and Saturn]
  • Buick [a Cadillac wannabe without product breadth... GM's short version of Mercury]
  • Hummer [humming to a different tune than the rest of the automotive market]
The Saturn strategy of being the "youth" and "innovation" brand got blurred over the years as models in Chevrolet and Pontiac replicated Saturn's niche vehicles.

GMC was always the premium truck brand, but now it has lost most of that distinction to Cadillac. It may have value as a medium/heavy truck brand, but probably not enough to make it worthwhile keeping over the long term.
General Motors needs to clean house brands and trim staffs to a size commensurate with its market share. But it may be too little, too late. Let's hope for the sake of the U.S. economy that is not the case... because all of those service and professional jobs that don't rely on U.S. manufacturing seem to be disappearing, too.


Thursday, April 23, 2009

What Is GM To Do?


General Motors (and Chrysler) is between a rock and a hard place. It had to sell its soul to the devil for a few more months of life and now it is time for the payback.

Thursday, April 23, 2009

Daniel Howes

Not so fast on idea of speedy bankruptcy for GM, Chrysler

Whoever thinks a bankruptcy of General Motors Corp. or Chrysler LLC would be "speedy" -- starting with members of President Obama's auto task force and GM CEO Fritz Henderson -- might want to spend some time talking with Larry Denton.

He's the former CEO of Dura Automotive Systems Inc. who successfully shepherded the $2.3 billion supplier through Chapter 11, starting in 2006. He learned the hard way how things go wrong, how federal law and its safeguards drive the process, how executives unfamiliar with bankruptcy can find themselves at the mercy of highly paid specialists. Lots of them.

"If you could do this cheap trick, everyone would do it," he told me in an interview this week. "You only have two results in bankruptcy: You emerge or you liquidate. This is black and white."

Add a company the size of GM, a monolith with 100 years of accumulated structures, brands and commitments, and the notion that the feds can speed GM (or Chrysler) through bankruptcy court looks more fantasy than reality -- with or without concessionary deals from bondholders and the United Auto Workers. [more]

What is happening to the automotive industry is making headlines around the U.S., but the reality is that other segments of the economy are in not doing all that well. The banking sector has many weak corporations and the "price gouging" oil companies are having their woes. Housing remains moribund. Still, multi-billion dollar losses and loans draw attention.

GM has a great product line, but a muddled one. Unlike Ford which has become a lean organization with a very focused product offering [except for the step-child Mercury brand], GM hung on to its 50-year old structure ... actually and expansion of that structure ... despite the significant loss of market share. GM corporate share of the U.S. market was only 18.5% through March. Ford was 14.1%. Yet Ford is a much smaller organization... internally and by dealer count.

General Motors insists that it wants, at a minimum, to keep Cadillac, Chevrolet, Buick, and GMC. The claim is that they are all "profitable." Well, don't believe the accounting. When you are losing money hand over fist, you can't rely on how the costs are allocated internally. Sure, you can talk about marginal or incremental costs for a brand, but no one will talk about how brands can steal sales from other brands within the company. If GMC steals sales from Chevrolet instead of Toyota, how does that add to the "bottom line?"

General Motors needs to do some hard thinking about its brand and product strategy as part of any reorganization or bankruptcy... particularly where Chevrolet, Cadillac, and GMC internally compete with similar product. If GM still had 50% of the market, this would be a moot issue. At 18+% this is a real issue.

Brands cost money. How much can GM afford and still survive?


Wednesday, April 22, 2009

Nature Un-Earthed


For the past several years we have had a pair of ducks that find our way into our neighborhood... sometimes several males and a lone female. We don't have a pond nearby, so their presence seems a little odd. Our commons does have a low spot where water accumulates a few inches deep during the spring rains when the ground can't absorb a lot of moisture. Perhaps that and the absence of anyone or anything disturbing them is all they need.

I did find a large portion of a duck's egg shell near our front door yesterday which makes me guess they are building a nest somewhere around the house. The photo above was taken just a brief moment after I noticed the male walking up to our front door.

Among the other wildlife we've had around the house: deer, groundhogs, skunks, squirrels, foxes, possibly a coyote, a hawk that flew into our screened porch presumably chasing a squirrel or chipmunk, and many different types of birds... including flocks of geese that love the commons area in spring and fall. Last week as I was driving on an expressway just a couple of miles from our place, I saw a field full of deer enjoying the spring grass at dusk... on a soccer field.

There are many who want you to believe that humans are creating a wasteland for the rest of nature. Yet, I see evidence that many species are thriving all around us. Maybe it is just the lack of CO2 in our locale... which obviously saves them from heat exposure.

The EPA should check us out.


The Answer Is Not Blowing In The Wind... What A Gas


She said it, but she didn't mean it:

Washington Wire
Political Insight and Analysis From The Wall Street Journal's Capital Bureau

August 24, 2008, 4:14 PM ET

John D. McKinnon reports on Nancy Pelosi’s statements on energy.

House Speaker Nancy Pelosi’s message on energy, already evolving in recent weeks, might have to evolve a little more.

On NBC’s “Meet the Press” on Sunday, the speaker twice seemed to suggest that natural gas – an energy source she favors – is not a fossil fuel.

“I believe in natural gas as a clean, cheap alternative to fossil fuels,” she said at one point. Natural gas “is cheap, abundant and clean compared to fossil fuels,” she said at another.

The speaker apparently was trying to contrast her support for expanded use of natural gas as a motor-vehicle fuel, and many Republicans’ preference for more domestic oil drilling — particularly through opening up more of the Outer Continental Shelf for exploration.

He said it, but he didn't mean in our lifetimes:
Saturday, April 18, 2009
Obama Adminstration’s Energy Radicalism

By Dr. Michael J. Economides

Only a few years ago radical environmentalists would have been more circumspect in their energy pronouncements than members of the Obama Administration, many of whom seem to want to govern by slogan and sound bite rather than reality. Things have been happening in rapid fire and it seems now abundantly clear that the recession, economic crisis and economic stimulus will be used as a cover to usher measures with agendas that, if enacted and stay, would have a major negative impact on our lifestyles and our economy for decades to come.

On April 17 the EPA declared finally what many had hoped and others loathed that there is “overwhelming and compelling evidence” that “greenhouse gases in the atmosphere endanger the public health of current and future generations”. In spite of a growing chorus of skeptical scientists on the causes of global climate change and even more objections on the expected effects, the EPA went on to adopt the most strident and alarmist presumed catastrophes from climate change such as rising sea levels, more wildfires, more hurricanes and degraded air quality. Under attack is plainly carbon dioxide, the product from the use of hydrocarbons (fossil fuels such as oil, natural gas and coal) from which 87 percent of the world and US energy supply comes from.

The Obama Administration seems to be unmoved by the fact that according to almost all estimates, by the year 2030, while the world energy demand will increase by 50 percent, oil, gas and coal will still account for 87 percent of world energy. While international pressure is often cited for the recent government actions, in this era of American self-flagellation, one thing should be made abundantly clear: global warming rhetoric has always been largely a full frontal attack on the United States, its lifestyle and its apparent success compared to other countries, especially in Europe. It is clearly ironic that Pravda, the former official instrument of the Soviet communist party has implored the United States to stop “carbon communism”.

The EPA of course does not offer solutions to the 87 percent problem and it defers to Congress to do so. Surely Congress will find the right solution from a position of knowledge as demonstrated by the honorable Nancy Pelosi who on NBC’s Meet the Press said “I believe in natural gas as a clean, cheap alternative to fossil fuels,” and lest one thought she misspoke, she went on to say in the same interview that natural gas “is cheap, abundant and clean compared to fossil fuels.”

The Secretary of Energy Steven Chu in an April 4 Newsweek guest editorial also proved that his Nobel Prize notwithstanding, common sense and rudimentary knowledge are lacking. First he did not offer one sentence on securing the United States 87 percent of energy supply other than “advanced biofuels”; this from the Energy Secretary. People hate to hear statistics like this but biofuels are a negative energy balance and even ignoring this science, if we were to use all of the corn grown in the United States to produce motor vehicle fuel, without regard to what that would do to food prices, it would still be less than 20 percent of our gasoline demand. Chu also went on to say “we must move beyond oil because the science on global warming is clear and compelling: greenhouse-gas emissions, primarily from fossil fuels, have started to change our climate. We have a responsibility to future generations to reduce those emissions to spare our planet the worst of the possible effects.”

His main solution? Conservation as “the most direct way to reduce our dependency on foreign oil is to simply use less of it.” Let’s just become less seems to be the Administration’s mantra and it has many adherents all over the world, especially when it refers to the United States. This in spite of the fact that beyond ideological feel-good there is no evidence historical or otherwise that conservation can reduce energy consumption. In fact the opposite is true. Energy conservation and efficiency in one sector has led to increase in total energy demand, finding new uses of energy such as the internet and next-day package delivery. People the world over have identified the use of energy as perhaps the single most important factor for a better life. But according to Secretary Chu the answer is this simple. “All Americans can strike a blow for energy independence by choosing to buy fuel-efficient cars, take public transit or join a carpool.” Jimmy Carter all over?

There is some merit to another suggestion by him: electrical cars, but he destroys the notion when he writes “generating that electricity from clean, renewable sources like solar and wind power.” Another dreaded statistics. If we triple current electricity output from wind every year for the next 20 years, it will still be less than 20 percent of the nation’s electricity demand.

Not to be outdone in slogan -style exaggeration, Secretary of the Interior Ken Salazar, on April 6 in Atlantic City to discuss America’s offshore energy resources, in what the Wall Street Journal characterized, “raised eyebrows when he said offshore wind farms could replace 3,000 coal-fired plants.” We have only 1,400. He also claimed that offshore Atlantic could deliver wind electricity equal to 1,000 gigawatts. That’s the entire electricity generation capacity of the United States.

Even by vested interests, such as wind turbine manufacturers, offshore wind farms, which internationally now account for an imperceptible fraction of wind power the total of which is less than 0.4 percent of electricity production, may account for 5 to 7 percent of electricity after many decades. Salazar’s statement should raise a lot more than eyebrows.

One has to wonder what is the point and what are the motivations of all this “gusher of lies” which surely falls under psychobabble rather than energy policy? Why is it, that potential changes which may take many decades, if ever, are presented as imminent solutions all the while ignoring taking care of business today? I can find no answer to such nonsense. Let me make two predictions which for most who understand energy may generate chuckles for the dearth of daring: By the end of Obama’s first term, oil consumption in the United States will be up and the imported portion will increase. In the meantime never underestimate the power of politicians to sound ridiculous and out of touch with reality. PDF is here.

Posted on 04/18 at 04:52 PM
... and no windfarms off Cape Cod where winds are strongest and most consistent.

Tuesday, April 21, 2009

Old News Guy Is Climate Skeptic


I'm passing this on from Marc Morano who is passing it on from Charles Osgood:

Washington DC: Veteran CBS newsman Charles Osgood, the host of the CBS News Sunday Morning show since 1994, has released an April 21, 2009 surprise “The Osgood File” radio report questioning man-made global warming predictions.

In the radio report, Osgood reveals that “the sun is the dimmest it's been in nearly a century” and noted that previous quiet sun periods have “led to a mini-Ice Age here on Earth.”

Osgood even admonished himself for questioning man-made warming fears by declaring "Hush, Child! You're not even supposed to suggest that."

Osgood asked: “Right now, global warming is a given to so many, it raises the question: Could another minimum activity period on the Sun counteract, in any way, the effects of global warming?

Hush, child! You're not even supposed to suggest that. The only thing that can change global warming is if we human beings --- we Americans, especially --- completely change our ways and our way of life. I'm sure you'll be hearing more about this solar dimming business, now that the story is out. Remember, you heard it here first...”

Osgood, a long-time environmentalist with close ties to the Nature Conservancy, has not always sounded so skeptical of global warming. In a March 19, 2007 “The Osgood File”, he reported, “It may be POLITICALLY impossible to cut back fast enough on greenhouse gas emissions to do anything global warming. And if that is the case we may have to turn to geo-engineering.”

Osgood's current willingness to question the sun's role in the climate system, is in direct contrast to his fellow CBS News reporter Scott Pelley who chooses to exclusively report the views of the promoters of man-made climate fears. Pelley explained in 2006 that he actually “tried hard to find a respected scientist who contradicted the prevailing opinion in the scientific community, but there was no one out there who fit that description.”

Pelley also publicly compared scientists skeptical of global warming fears to Holocaust deniers. "If I do an interview with Elie Wiesel," he asks, "am I required as a journalist to find a Holocaust denier?" Pelley said in a March 23, 2006 interview with CBS News.


Full Audio of Osgood's April 21, 2009 report available here:

Full Transcript of “The Osgood File” Radio Report as Aired on CBS Radio Network on April 21, 2009:

04/21/09 9:25 AM


The Osgood File. I'm Charles Osgood.

I know you've already got a lot to worry about as it is, but something rather odd is going on --- on the Sun.

The Sun normally undergoes an 11-year cycle of activity --- and last year, it was supposed to have heated up --- and, at its peak, would have a tumultuous boiling atmosphere, spitting out flares and huge chunks of super-hot gas.

Instead, it hit a 50-year low in solar wind pressure, a 55-year low in radio emissions, and a 100-year low in sunspot activity. Right now, the sun is the dimmest it's been in nearly a century.

Did you know that? It's true. Astronomers are baffled by it, but has the press covered the story? Hardly at all. Is the government doing anything about it? No, it's not even in the Obama budget or any Congressional earmarks.

But, sooner or later, I bet it will turn out to be our fault --- yours and mine. And in Washington, where everything is political, they'll note that it began before President Obama took office --- perhaps "another example of the failed policies of the Bush Administration."

At an upcoming meeting of astronomers in the United Kingdom, they'll be studying new pictures of the Sun taken from space, looking for any hint that the Sun will start heating up again and acting up again, the way it's supposed to. But there is no sign of that, so far.

In the mid-17th Century, there was a quiet spell on the Sun --- known as the Maunder Minimum --- which lasted 70 years, and led to a mini-Ice Age here on Earth.

Right now, global warming is a given to so many, it raises the question: Could another minimum activity period on the Sun counteract, in any way, the effects of global warming?

Hush, child! You're not even supposed to suggest that. The only thing that can change global warming is if we human beings --- we Americans, especially --- completely change our ways and our way of life.

I'm sure you'll be hearing more about this solar dimming business, now that the story is out. Remember, you heard it here first...

The Osgood File. Transcripts, podcasts, and Mp3's of all these programs can be found at I'm Charles Osgood on the CBS Radio Network.

The Osgood File. April 21st, 2009.

I thought I'd save the commenters some time with this post's title.


Automotive Blog


I will be contributing to The Detroit News Autos Blog on a regular basis on a variety of issues related to the automotive industry. Hope you enjoy my somewhat restrained rants.

I expect the post to appear soon.


Cold Fusion And The Palladium Shortage


The CBS show 60 Minutes ran this episode about "cold fusion"... something that hit the headlines a couple of decades ago and then disappeared.

Still a long way off, but here the issue is the rarity of palladium which is central to this process. Presently, there is sufficient palladium to meet world demand; in fact, palladium is in surplus.

Nickel output is expected to fall to 298,000 tonnes this year from previously planned 300,000-305,000 tonnes, and palladium output to 2.764 million ounces from the earlier forecast 3.00-3.05 million ounces.

In 2009, Norilsk expects to produce 290,000-305,000 tonnes of nickel and 2.610-2.625 million ounces of palladium, it said in a presentation on its web site

But if you really look at the numbers and the sources... Russia accounts for 50% of the world's supply... you can see the issue:
  • 3 million ounces
  • 187,500 lbs.
  • 94 tons
... versus 300,000 tons of the more common metal, nickel... and about 1,400,000,000 tons of steel. That's like a layer of dust on a pyramid.

If this "nuclear activity" became a commercially viable process, there just doesn't seem to be enough palladium available to make it an economically practical process for widespread application. How many tons of palladium for one power plant?

It appears that the "CO2 free lunch" might not be so free.


Monday, April 20, 2009

Fairness In EPA Regulation Of CO2


Now that it is a foregone conclusion that the EPA will begin issuing far-reaching dictums regarding the production of CO2 [excluding volcanos, plant decomposition, etc.], one can ask a basic question: how can regulation be formulated so that it does not place the U.S. economy, corporations, and individuals in a disadvantageous position relative to the rest of the world?

Think about it!

The EPA, with the strong leadership of the Obama administration and the Democratic Party controlled Congress, are about to impose a vast new panoply of regulations and economic burdens on the United States in the name of climate control. The U.S., however, is only a minority producer of human-generated CO2. The two fastest growing economies have become the largest producers of CO2, China already is the world's biggest man-made CO2 producer (2007) and India is coming up fast, and are also becoming the largest suppliers of goods consumed in the United States. They will have no comparable restrictions on producing CO2.


The EPA would be responsible for enforcing these conditions and ensuring that a process was established and implemented so that all fees and taxes would be paid upon the products' entry into the United States.
This would be part of the no unfounded mandates of the Obama administration and directed by a CO2 czar.
Under those conditions, no one in the United States should have a problem with the economic burdens about to be imposed internally. Under those conditions, the entire world will suffer economically... equally.

But the planet will be safe for polar bears. Aren't they cute?


Sunday, April 19, 2009

When Governors Get Upset With The Federal Government


Occasionally, I like to post in its entirety something that someone else has posted. Sometimes because it is exceptional; sometimes because I think it is exceptionally stupid. I believe this to be the former.

Things Break Apart

From the governor of Texas Rick Perry comes this shot across the bow.

"The federal government has become oppressive. I believe it’s become oppressive in its size, its intrusion into the lives of its citizens, and its interference with the affairs of our state. Millions of Texans just like yourselves that are tired of Washington, DC, trying to come down here and tell us how to run Texas. We think it’s time to draw the line in the sand and tell Washington that no longer are we going to accept their oppressive hand in the state of Texas. There is a point in time where you stand up and say, “Enough is enough,” and I think Americans and Texans especially have reached that point…

They’re sending Washington the message. I mean, we’re still part of the union down here in Texas, and our folks would like to keep it that way, but we see some things going on that are peculiar."

Please read that last line with due care.

We have received oceans of abuse here for reporting on the signs of the times, for using words and phrases like ‘civil war’ and ‘secession’ and ‘tyranny’ and ‘rebellion,’ and how these things threaten to visit this nation again. Now a governor has said the same thing. May I predict that he will not be the last to do so?

And as if to point a moral and adorn a tale, along comes a Homeland Security Assessment from Obama’s Department of Homeland Security. It defines something called ‘right wing extremism,’ a term it uses more than 40 times in the document. You are a possible ‘right wing extremist’ if: you like guns, if you are a veteran, if you are pro-life, if you believe in federalism, if you are conservative, if you are opposed to illegal immigration and so on. By the calculation of the Obama regime, Texas is a terrorist state and Governor Perry is a terrorist chieftain. I imagine that Perry will don a bathrobe, wear a keffiyeh and head to some mountain redoubt in Texas and issue recordings of “Death to America!”

Obama cozies up to North Korea and Iran—the real terror threats to this nation—but bares his fangs at American citizens. What that document really does is make a criminal and possible terrorist out of anyone who disagrees with Obama on anything under the sun. Nothing new here. All tyrants have done this.

It is scarcely possible to reason with this regime. All opposition is smeared, investigated, threatened. It matters not whether you are a private citizen or the head of a corporation. This government knows neither decency nor bounds. It plans to subsume unto itself every aspect of the American economy and political system. The Constitution has proved unable to stop this assault on liberty.

We have produced men in the past who knew how to deal with home grown tyrants. Jefferson and Madison in their Kentucky and Virginia Resolutions, and Southern Senator John C. Calhoun, believed that powers of the federal government would tend toward tyranny if left unchecked. They all supported states’ rights as laid out in the Constitution.

"The resolutions declared that the Constitution was a “compact.” That is, it was an agreement among the states. The resolutions claimed the federal government had no right to exercise powers not specifically delegated to it (and thus they advocated Strict Constructionism); should the federal government assume such powers, its acts under them would be void. Thus it was the right of the states to decide as to the constitutionality of such laws passed by Congress."

One of the rights of states is nullification.

"Nullification is a legal theory that a U.S. State has the right to nullify, or invalidate, any federal law which that state has deemed unconstitutional. The theory is based on a view that the sovereign States formed the Union, and as creators of the compact hold final authority regarding the limits of the power of the central government. Under this, the compact theory, the States and not the Federal Bench are the ultimate interpreters of the extent of the national Government’s power. A more extreme assertion of state sovereignty than nullification is the related action of secession, by which a state terminates its political affiliation with the Union."

Jefferson, Madison and Calhoun all asserted this prerogative of the states. Thus they have become, like Governor Perry, more of the Obama regime’s ‘right wing extremists.’

Our nation is lurching toward a Constitutional crisis that will either be resolved peacefully or not. If not, there will be civil war, secession or military intervention—or all three. This regime will not simply return to the Constitution and neither will a majority of Americans surrender their liberty to a rapacious and lawless state.

Something must break. Maybe many things.

You may be a "redneck" if....

Also see:

Wednesday, February 04, 2009

Is New Hampshire Seceding?


Saturday, April 18, 2009

The New EPA Red Herring Logo



EPA Full Of Hot Air


The story is everywhere so I'll skip the links. For those of you who believe the climate models, this is a great day. The EPA will save you from global warming. For those of you who believe what you observe, this is an Orwellian novel.

Before you get too worked up about this, remember that the EPA is a pseudo-scientific agency. Yes, there are scientists and they do have their chemistry sets. Beyond that, they are a political agency doing the behest of the ruling party. Consequently, the EPA can declare a naturally occurring substance a pollutant that requires regulating... even though the portion of the substance present in our environment that can be attributed to man's activity is minuscule.

But let's see how this plays out. Here are some possibilities:

  • Any vehicle of any type using combustion engines will be subject to higher taxes either directly or through significantly increased fuel taxes
  • Electricity produced by coal, natural gas, or diesel fuel will be subject to higher taxes
  • Homes heated by natural gas will be subject to higher taxes
  • Electricity consumed beyond a pre-set limit will be subject to a tax surcharge
  • Disturbing ground cover and releasing CO2 will be prohibited and fined unless a permit is paid for
The list can go on, but you can see the pattern. This is a tax scheme and it paves the way for yet another tax scheme. It also paves the way for tax cheating and an underground economy. Gasoline may become the new alcohol.

You have just begun to see the backlash. Tea parties will be supplanted by protests by those affected by this misguided Obamian adventure into science fiction. That's anyone included in the dot points above. The only thing getting hotter are necks under collars. The only hot air threatening us is emanating from the EPA.


Friday, April 17, 2009

Can We Spend Our Way To Prosperity?


There are a lot of people saying that we can spend our way to prosperity. Others say we can only spend our way to debt. I don't believe either position is fully accurate without identifying the nature of the spending.

Spending is an act of moving one resource into another. We are exchanging value. We may create debt which is a spending of future resources... presuming there are future resources. But the act of spending neither guarantees future prosperity or future debt.

For example, during World War II our country spent a lot of future resources defeating enemies on two fronts. In doing so, it built a vast industrial and scientific infrastructure that positioned the U.S. to grow quite wealthy for several decades thereafter. The debt was an investment of future resources that would be generated by the acquisition of the means to generate the future resources.

Opposite that are expenditures of stored resources to acquire resources of diminishing value or spurious value that do not, of themselves, generate additional value.

One might argue that purchasing a vehicle or home is such and investment. Take money out of savings to buy a vehicle or home that loses value. But that argument overlooks the utility of the vehicle or home that can generate more resources... the ability to get to or have a place to work to earn money... delivering or displaying expensive articles to customers... any number of resource producing actions with the vehicle or home. Or simply to provide transportation and shelter for the family.
More appropriate to this class of spurious spending are Ponzi schemes that siphon off resources from many to a few which then has a rippling effect through the economy. Resources are exchanged for little or nothing in return and lead to a general weakening of the economic network of those involved. We've read a lot about how that happened in the housing market and rippled its way into investment houses and banks and then industries and then jobs.

So, to address the question of can we spend our way into future prosperity, we must determine if the spending is to create an expansion of resource producing resources or if it is to siphon off resources from many to benefit the few. For example, will selling carbon credits that raise the cost of energy for many while reducing the resources that produce reliable energy generate other resources or simply dissipate present resources? Will raising taxes so that the government can expand programs generate future resources from those programs that expand the resources of the people or simple dissipate resources through waste?

There is no clear or constant answer other than "it depends." For example, in the Detroit school system billions of dollars have been spent and budgets exceeded by hundreds of millions of dollars. Yet the graduation rate continues to fall and the system is imploding. For example, billions of dollars have been spent to lift people out of poverty through programs that report the need for the programs to expand because there are more people in poverty. Are these investments or Ponzi schemes? Are we spending our way into debt or into productivity and prosperity? Are we creating jobs or siphoning off the resources needed to create jobs?

It appears we have to look at past results to gauge the prospect of future results. Will increasing government spending by trillions of dollars lead to greater national wealth or greater national debt?

We have chosen a course that is different from the spending of World War II that built up industry, science and commerce. What are the chances that more taxation and government programs aimed at solving politically defined social problems will result in greater national prosperity?

Just asking.


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There is always an easy solution to every human problem—neat, plausible, and wrong.
Henry Louis Mencken (1880–1956)
“The Divine Afflatus,” A Mencken Chrestomathy, chapter 25, p. 443 (1949)
... and one could add "not all human problems really are."
It was beautiful and simple, as truly great swindles are.
- O. Henry
... The Government is on course for an embarrassing showdown with the European Union, business groups and environmental charities after refusing to guarantee that billions of pounds of revenue it stands to earn from carbon-permit trading will be spent on combating climate change.
The Independent (UK)

Tracking Interest Rates

Tracking Interest Rates


SEARCH BLOG: FEDERAL RESERVE for full versions... or use the Blog Archive pulldown menu.

February 3, 2006
Go back to 1999-2000 and see what the Fed did. They are following the same pattern for 2005-06. If it ain't broke, the Fed will fix it... and good!
August 29, 2006 The Federal Reserve always acts on old information... and is the only cause of U.S. recessions.
December 5, 2006 Last spring I wrote about what I saw to be a sharp downturn in the economy in the "rustbelt" states, particularly Michigan.
March 28, 2007
The Federal Reserve sees no need to cut interest rates in the light of adverse recent economic data, Ben Bernanke said on Wednesday.
The Fed chairman said ”to date, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing in core inflation”.

July 21, 2007 My guess is that if there is an interest rate change, a cut is more likely than an increase. The key variables to be watching at this point are real estate prices and the inventory of unsold homes.
August 11, 2007 I suspect that within 6 months the Federal Reserve will be forced to lower interest rates before housing becomes a black hole.
September 11, 2007 It only means that the overall process has flaws guaranteeing it will be slow in responding to changes in the economy... and tend to over-react as a result.
September 18, 2007 I think a 4% rate is really what is needed to turn the economy back on the right course. The rate may not get there, but more cuts will be needed with employment rates down and foreclosure rates up.
October 25, 2007 How long will it be before I will be able to write: "The Federal Reserve lowered its lending rate to 4% in response to the collapse of the U.S. housing market and massive numbers of foreclosures that threaten the banking and mortgage sectors."
"Should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses," he said.

"Uncertainties about the economic outlook are unusually high right now," he said. "These uncertainties require flexible and pragmatic policymaking -- nimble is the adjective I used a few weeks ago."

December 11, 2007 Somehow the Fed misses the obvious.
[Image from:]
December 13, 2007 [from The Christian Science Monitor]
"The odds of a recession are now above 50 percent," says Mark Zandi, chief economist at Moody's "We are right on the edge of a recession in part because of the Fed's reluctance to reduce interest rates more aggressively." [see my comments of September 11]
January 7, 2008 The real problem now is that consumers can't rescue the economy and manufacturing, which is already weakening, will continue to weaken. We've gutted the forces that could avoid a downturn. The question is not whether there will be a recession, but can it be dampened sufficiently so that it is very short.
January 11, 2008 This is death by a thousand cuts.
January 13, 2008 [N.Y. Times]
“The question is not whether we will have a recession, but how deep and prolonged it will be,” said David Rosenberg, the chief North American economist at Merrill Lynch. “Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.
January 17, 2008 A few days ago, Anna Schwartz, nonagenarian economist, implicated the Federal Reserve as the cause of the present lending crisis [from the Telegraph - UK]:
The high priestess of US monetarism - a revered figure at the Fed - says the central bank is itself the chief cause of the credit bubble, and now seems stunned as the consequences of its own actions engulf the financial system. "The new group at the Fed is not equal to the problem that faces it," she says, daring to utter a thought that fellow critics mostly utter sotto voce.
January 22, 2008 The cut has become infected and a limb is in danger. Ben Bernanke is panicking and the Fed has its emergency triage team cutting rates... this time by 3/4%. ...

What should the Federal Reserve do now? Step back... and don't be so anxious to raise rates at the first sign of economic improvement.
Individuals and businesses need stability in their financial cost structures so that they can plan effectively and keep their ships afloat. Wildly fluctuating rates... regardless of what the absolute levels are... create problems. Either too much spending or too much fear. It's just not that difficult to comprehend. Why has it been so difficult for the Fed?

About Me

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Michigan, United States
Air Force (SAC) captain 1968-72. Retired after 35 years of business and logistical planning, including running a small business. Two sons with advanced degrees; one with a business and pre-law degree. Beautiful wife who has put up with me for 4 decades. Education: B.A. (Sociology major; minors in philosopy, English literature, and German) M.S. Operations Management (like a mixture of an MBA with logistical planning)