Wednesday, April 30, 2008

Federal Reserve Should Hold 'Em


I have commented more about the Federal Reserve over the past year than should be necessary in a decade, but the Fed just can't get it right.

Let's hope that the Fed decides to hold rates where they are, which may be a little too low already. There is far too much manipulation in the financial world these days... and none of it has done more than enrich a few self-serving manipulators. We don't need the Fed adding injury to injury. Sure, it's supposed to protect the banking structure. Okay, make sure the banks are following good business practices, not speculating because funds are federally insured and other such nonsense.

Repeat after me: there is no free lunch! Sure, everyone loves to borrow money with 0% interest, but the cost is there somewhere. Pay less interest; pay more for inflation. Charge less interest; charge up inflation [have you noticed the price of petroleum products... and a lot of other things... lately?]. Charge and pay too much interest; shut down the economy.
Ultimately, the Fed needs to find a moderate rate and hold it. Then let the economy sort itself out.
Tuesday, March 18, 2008

How Low Will It Go?

Friday, March 14, 2008

Economics Dumb-0-Dumb


Fed cuts rates again and hints at pause
Central bank cuts rates for seventh time since September, but sees less risks of slowdown, suggesting this may be last cut for a while.

4% is the number... rock steady.


Tuesday, April 29, 2008

Eliminate Mileage Mandates


Several posts on this blog discuss the cost of gasoline and the government's role in creating market problems and then creating bureaucracies to "manage" the problems it helps to create.

So far, the two main issues have been:

  • Restricting drilling for oil and natural gas forcing the U.S. to be more reliant on foreign sources of energy
  • Expanding government regulations regarding automobile mileage and CO2
Now that it is obvious to everyone that the government has no intention of letting market forces act as the agent of change, it is time for the government to quit pussy-footing around and do what is done in Europe: add taxes of $3 or more per gallon of gasoline. At that point, all other government actions... mileage and CO2 regulations, restrictions on drilling for oil, and subsidies for alternative fuels... will be moot and can be eliminated because the cost of implementing the government's policies will be borne directly by consumers without the government being able to divert attention and blame to vehicle manufacturers and oil companies.
The marketplace would immediately react by making a run on the smallest possible vehicles available... like these [click images for source].

The U.S. would be like Europe... or California.
Now that would be a blow to politicians who would have to stand up to their constituents and explain why the government has to be involved at all in the marketplace. It would also create issues with regard to why many other taxes would have to remain in force [and the supporting bureaucracies]. It would also highlight issues with regard to the plethora of regulations that create additional costs for manufacturers and consumers.

Cost of gasoline
(U.S. Dollars per Gallon)
Date___ Belgium France Germany Italy Netherlands UK _ US
4/20/98 3.43___ 3.44__ 3.25___ 3.48_ 3.56_______ 4.04 1.21
4/21/08 8.62___ 8.34__ 8.58___ 8.32_ 9.51_______ 8.17 3.73

Look at tax opportunity! Gas is practically being given away in the U.S.

Of course, our government would do exactly what those in Europe do... raise the taxes and keep all of the onerous regulations. That's what governments do best.


Monday, April 28, 2008

Kerkorian - The Kevorkian Of The Auto Industry?


Sharks smell blood and move in... even if the wounded creature is strong.

Kirk Kerkorian is an investment shark. He looks for companies that have been temporarily weakened, but are showing signs of recovery... such as Ford Motor Company which reported earnings of $100 million for the first quarter. Then he strikes. He tries to bite off just enough of the company so that he can control or strongly influence near-term decisions. He is looking for a quick meal and is not concerned whether or not the company may survive after his foray. In fact, he senses that dismantling a company may provide more financial sustenance than allowing it to recover and continuing to nibble at the trough of profits.

He has made two attempts; first he went after Chrysler and then General Motors. Now he is after Ford Motor Company.

He is not concerned whether his gambit will work. He is only concerned with getting the stock price to run up quickly so he can sell at a tidy profit.

The fact the the extended Ford family owns 40% of the voting stock through their Class B shares pretty much precludes Kerkorian from doing much more than being a colossal nuisance... and getting a quick profit bite by manipulating the stock. That's okay with most sharks.
As shown by Chrysler and General Motors, the auto companies are not about to be guided into corporate suicide by inviting the shark to take over.




Having spent the better part of the weekend hauling branches and sections of about a dozen tree trunks from the fallen ash trees at our summer cottage and the neighbor's property, I can attest that my physical conditioning is not quite the same as it was 40 years ago. Nevertheless, the miracle-in-a-bottle pills have reduced my discomfort to mere stiffness rather than pain in every joint.

It is a shame to have lost the ash trees to the Asian import Emerald Ash Borer, but it wasn't a total loss. The brother of one of our neighbors had a tree cutting service and so our neighbor negotiated a better price as long as he could have a large portion of the cut wood which will be used this winter for fuel... and that we would contribute muscle power as needed to bring the trees down and clean up the debris.

Our neighbor will split the wood and share it with my son who stays at the cottage and my son's friend who lives next door. In return, my son's friend, his father, and brother, pitched in to clear branches and move trunk sections along with my son and me. The wood cutter also kept several cords of cut wood for winter fuel.

This was a clear example of neighbors facing the same problem and working together on a voluntary basis to solve that problem in the most efficient, cost-effective manner possible. It had the side benefit of getting to know neighbors better and realizing that we were fortunate to have such good people next door.
While the loss of the trees is a sad event... they were over 40-years old... the fact that the wood will be recycled to provide heat for at least a couple of years and that better relationships came out of the effort does mitigate the loss. We will look for new trees to plant along the property line with our son's friend's home... after they tear down the fence.
Fortunately, not all of the trees on the property were ash, so we will still have the beauty and shade of an oak, maple and American elm [quite rare after the Dutch elm beetle infestation of the 70s].
I'm sure we'll all be getting together one of these weekends when the warm weather returns to have a cookout, a few beers, and a lazy trip around the lake in our pontoon boat.


Sunday, April 27, 2008

Oofdah Weather


This story
from ABC News reminds me of the 5 winters where I spent a lifetime in Grand Forks, ND.

It could be Old Man Winter's last gasp in Minnesota.

Vehicles travel on U.S. Highway 71 near Bemidji, Minn. as heavy snow falls around on Friday, April 25, 2008. A spring snow storm is expected to bring a foot of snow or more to portions of northwestern Minnesota by Saturday evening.
(AP Photo/Bemidji Pioneer, Eric Stromgren)
More Photos
Winter isn't officially over until the polar bears return to Canada.


Saturday, April 26, 2008

Chinese Killer


This tiny import from China is known as the Emerald Ash Borer. It is killing millions of beautiful, hardwood ash trees in the midwest. It is suspected of entering the U.S. on infested shipping crates of imported goods from China where it is part of the ecosystem and has natural enemies. It has no such enemies in the U.S.

This weekend, we must watch as about a dozen ash trees on our property are cut down at the cost of hundreds of dollars... reducing the economic and aesthetic value of that property by much more.

Another reason why China has become my favorite trading partner.


Friday, April 25, 2008

Whether The Weather Is Withering


Michigan finally enjoyed above average temperatures [highs in the 70s] this last week. Prior to the warming spell, the landscape looked as if it were still mid-winter. Birds and squirrels were still huddled in their sheltered spots and eagerly taking the nuts or other treats we left out for them. Now that warmer weather has finally arrived, insects are appearing and the birds are everywhere scouring for them. The normally early-blooming daffodils have sprung up and are blossoming brilliantly.

As usual, this CO2 global-warming skeptic fails to see the harm this warmth has delivered.
But the real reason for this post is to highlight some work by Anthony Watts regarding weather stations. After all, the data that has driven this global warming scare is derived from these weather monitoring stations. If you judge, with a faulty thermometer, whether you have a fever or are just slightly warmer than usual, your judgment could be severely impaired and you could be running off to the doctor for some very expensive and unnecessary treatments.

In the comments to a recent post on Anthony Watts' site, I asked him if he had a picture of a weather monitoring station that represented the "ideal"; i.e., placement and surroundings that represented the area. He provided a link to this [which also includes other pictures of the site]:

As you can see, aside from the protective fence, there are no artificial objects or paved surfaces or trees or buildings that would provide biased input.
Corvallis, OR, operated by the soon to be retired George Taylor, the OFFICIAL STATE CLIMATOLOGIST OF OREGON, is a good example of a CRN1 station.
Unfortunately, as Anthony often points out, this situation is the exception to the rule. More often than not, this is the way a site looks [from his post of 4-21-08]:
"Today I surveyed a sewage treatment plant, one of 4 stations surveyed today (though I tried for 5) and found that for convenience, they had made a nice concrete walkway to allow servicing the Fisher-Porter rain gauge, which needs a paper punch tape replaced one a month.

Here is what you see in visible light:

Here is what the infrared camera sees:

Note that the concrete surface is around 22-24°C, while the grassy areas are between 12-19°C

This station will be rated a CRN5 by this definition from the NOAA Climate Reference Network handbook, section 2.2.1:

Class 5 (error >~= 5C) - Temperature sensor located next to/above an artificial heating source, such a building, roof top, parking lot, or concrete surface.”

Now a caveat: There had just been a light rain, and skies had been overcast, it had just started to clear and you can see some light shadows in the visible image. Had this rainfall and overcast not occurred, the differences between grass and concrete temperatures would likely be greater. Unfortunately I was unable to wait around for full sun conditions. The air temperature was 58°F (14.4°C) according to my thermometer at the time.

Here is another view which shows the NOAA sensor array, the sky, and the evidence of recent rainfall as evidenced by the wet parking lot:

Why NOAA allows installations like this I’ll never understand. And this station is a USHCN climate station of record, used in who knows how many climate studies."

Why, indeed! GIGO.

One other note: the warm weather reference at the beginning of this post is projected to dissipate in a trough of colder than normal weather next week. Too bad. I was just getting the rust off my golf game.


Thursday, April 24, 2008

Cap and Trade MPGs


The latest global scam is the "cap and trade" of CO2 credits. Literally, billions of dollars are being spent on "vapor."

Well, why not have a U.S. version of cap and trade for fuel?

Calculate the annual amount of fuel that will be used at based on a predetermined limit [phasing in 36 MPG over a decade because of existing vehicles -- average age of cars is 9 years]. Determine what that means per vehicle and establish a monthly allocation based on a normal [or even reduced] national supply of fuel. Then set up an internet-based system whereby individuals can sell unused allocations [credits] to those who need more gasoline... kind of like electronic transfer of funds in banking. In order to ensure compliance, the federal government would create a Department of Fuel Usage that would issue electronic cards tied to the cap and trade system which would be inserted into a gas pump to be sure that the pumper was within his allocation for the month. If not, the gas station would have a kiosk where the pumper could purchase additional credits online and then pump the gas.

That way, those who have the mini-minis that get 85 mpg and drive once a week to church can sell their allocation to those who drive Bentleys 2,000 miles per week. Everyone gets to drive what they want, a finite amount of fuel is used, and those who want to sacrifice some are paid for their effort by those who don't. The free market in action. I can see a new commodities exchange forming right now.
That, in stark contrast to the government limiting the types of vehicles that can be produced at a higher cost to everyone. Automotive companies will still be able to find a market niche for many different vehicles.
As a side note, let's presume that, due to a forced accelerated transition to hybrid vehicles, we are going to have a severe supply shortfall in either lithium-ion [which has unresolved safety issues] or nickel-metal hydride batteries, so this will be an opportunity for another artificially induced price run-up for either/both the batteries and the principle elements [nickel, lanthanum].
Clean diesel-powered vehicles could deliver the required mileage and better performance than present hybrids, but there will be a severe shortage of diesel fuel due to lack of refinery capacity... unless refineries are converted in short order.
We're not quite technically ready to launch our future transportation, but it pays to always PLAN AHEad.
Now lets talk water cap and trade and then we can move on to food cap and trade....

I love all of these cap and trade schemes, don't you? Why let the real free market work when the government can impose Byzantine rules to make it so much more interesting for the creative types to produces pseudo "free markets"?


Wednesday, April 23, 2008

Achieving 36 MPG Average


Recently, there have been several posts on this blog regarding the federal government's culpability in the rise of oil prices and gasoline prices. Now the federal government is acting decisively to correct the problem.

In 7 years, the Federal Government has commanded the automobile industry must achieve a corporate average 36 miles per gallon for cars. That's combined city/highway average... not just the peak highway number that is advertised.
If today were 2015, here is what you, as a consumer, could buy based on 2008 EPA data:

This gasoline powered Smart ForTwo:

convertible A-S5 1.0L (3 cyl) 33/41 mpg
coupe A-S5 1.0L (3 cyl) 33/41 mpg

Do not drive this in the presence of semis or attempt to drive beneath one in an effort change lanes.

And these hybrids:

HONDA Insight 1.0L (3 cyl) Man-5 2WD Gasoline small car City MPG 61 Hwy MPG 66

HONDA Civic Hybrid 1.3L (4 cyl) Man-5 2WD Gasoline small car City MPG 45 Hwy MPG 51

TOYOTA Prius 1.5L (4 cyl) Auto-AV 2WD Gasoline "midsize" car City MPG 60 Hwy MPG 51

Attempting to pass other vehicles is not advised. Use hazard flashers on hills.

Actual mileage for hybrids has been shown to be below EPA estimates. Some larger European diesel-powered vehicles exceed the Prius performance and mpg [see video in right column]

That's it. These are your choices. No larger hybrids or [unavailable due to incompatible federal government and European Union regulations] diesel-powered vehicles would qualify. Rather than take actions to increase the supply of oil from known reserves, the federal government has taken action to reduce the choices of consumers... and making it more expensive in the bargain.

Of course, you could just say "screw it" and get one of these:

If you are going to be uncomfortable and unsafe, you might as well have fun.

Good job Nancy and Harry.

Nice Wisconsin "helmet"


Tuesday, April 22, 2008

Everything Is A Crisis


We are in crisis mode:

  • Housing and banking
  • Oil and gasoline
  • Climate and CO2
  • Terrorism and war
  • Food and the poor
... and on and on.

But if we step back and look at these crises, we might get a better idea of the underlying causes.
Housing and banking: the normal dynamics of buying, owning, and selling homes were affected by non-market actions. First, banks were bludgeoned by the federal government to accept shaky loans in areas they would normally "redline"... avoid or have very restrictive conditions. Then the federal government, by way of the Federal Reserve, lowered interest rates to practically nothing and encouraged all sorts of free-wheeling lending and reselling of mortgages to spur on the economy. Then the federal government, again through the Federal Reserve, quickly raised interest rates to the point that those risky borrowers could not repay the loans and caused a banking crisis. Finally, the federal government, once again through the Federal Reserve, rescued the banks, but left the housing market a shambles.

Oil and gasoline: as the world population has grown and the need for energy grows dramatically with the emergence of new economic powers such as China and India, the normal market response to the situation has been affected by the federal government's reluctance to permit exploration and drilling in areas of known reserves. Then the federal government investigates oil companies because the artificial shortages have driven up the price of oil worldwide and the profits of the oil companies regardless of where they are located. Then the federal government places the burden for correcting the shortages on the automobile companies by requiring them to create expensive, small alternative vehicles for the marketplace which creates economic hardships for both the companies and the consumers who own older vehicles and cannot afford newer, expensive ones.

Climate and CO2: a simplistic model of earth's climate based on the assumption that increases in CO2 will create a crisis of global warming was created by an employee of the federal government and promoted by a former employee of the federal government [to his vast enrichment]. Despite challenges by scientists worldwide, the federal government has taken the position that CO2 is, indeed, a threat to our climate and has been officially labeled a pollutant by the U.S. Supreme Court... the Judicial Branch of the federal government. Subsequently, the projected cost to constrain additional CO2 in the atmosphere has been set at tens of trillions of dollars, but the federal government is committed to actions such as the expansion of ethanol production which will not abate CO2 production and the reliance on non-nuclear, non-fossil fuel sources of electric power generation placing future economic growth at risk.

Terrorism and War: despite a direct attack on the U.S., many officials within the federal government contend that the threat by Islamic extremists is overstated and military actions in the middle east unwarranted. A large portion of Congress, the Legislative Branch of the federal government, has attempted to block funding, personnel, and necessary equipment to properly and successfully fight these forces. A candidate for the President of the United States, head of the federal government Executive Branch, continues to minimize the value of the military efforts and has stated his intention to end U.S. efforts to keep the fight with the terrorist organizations overseas.

Food and the poor: in conjunction with the federal government's requirement to expand the use of corn and sugar, basic foodstuffs, as a source of ethanol to offset the federal government's restriction on exploration and drilling for oil in areas with known reserves, the price of food has become prohibitively expensive for the poor in the U.S. and around the world as food supplies have been diverted to non-food purposes and other food costs have increased with the dramatic price increases in oil and gasoline.
I'm sorry. I just can't seem to find a common thread among all of these crises. We'll just have to contend with these issues as best we can, knowing there is nothing that we can do to improve the situation.
Maybe we can pressure the federal government to do something. There is obviously a secret conspiracy out there.

Monday, April 21, 2008

Politics and Religion


The headlines regarding the Pope's visit remain in stark contrast with those about Islamic cleric Moqtada al-Sadr.

The Pope called the mass [at Yankee Stadium] "a summons to move forward with firm resolve to use wisely the blessings of freedom, in order to build a future of hope for coming generations."

Meanwhile, al-Sadr was quoted in Time as saying, "I am giving you my final warning," Al-Sadr's message urged the Iraqi government to end its crackdown and take the "road of peace." If not, al-Sadr said, "I will declare it open war until liberation." CNN noted that "Iraq's top Shiite religious leaders have told anti-American cleric Muqtada al-Sadr not to disband his Mehdi Army, an al-Sadr spokesman said Monday amid fresh fighting in the militia's Baghdad strongholds."

One religion's leader calls upon his religion's followers to build a future of hope through prayer while other another religion's leaders call upon their people to travel the "road of peace" by waging war against their own nation.
Perhaps time is all that is needed. Past popes commanded armies and directed horrific actions. It wasn't until the kings of Europe neutralized the military power of the popes that the power of that office returned to its true religious origins... a religion that preaches love for all and God's forgiveness of sins. Unfortunately, time may not be enough. The true origins of Islam seem to be focused on domination of non-believers and submission to the will of Allah... as interpreted through the voices of clerics like Moqtada al-Sadr.
Defenders of civil rights need to understand this distinction when criticizing those who speak out against the secular activities of Islamists. Democracies and freedom are easily destroyed by those who are antagonistic toward those democracies, but use the democratic institutions against themselves [HT: Astute Bloggers]. Ask the people of Venezuela. Ask the people of Turkey who really understand this.

Sunday, April 20, 2008

Reply From Senator Levin Regarding Oil and Gasoline Prices


On March 30, I wrote to the two U.S. senators from Michigan regarding the present situation of oil and gasoline prices, as well as related energy policies. This site contains other posts regarding U.S. energy policies. If you haven't done so, you may want to read Friday's post and follow some of the links.

While the following email from Sen. Carl Levin's office may not represent the whole picture... especially the government's part in restricting supply... the issues raised in this response need to be evaluated, especially in the area of market speculation abuses [does that remind you of the recent sub-prime and hedge fund fiascoes?]. In evaluating what should or can be done, keep in mind that some of the aspects are global and some are purely national.

This is, most likely, a standard response to this issue, but it is worth reading to understand some of the politics involved:

Dear Mr. Hall:

Thank you for contacting me with your concerns about the price of gasoline. I appreciate hearing from you on this matter.

For most Americans driving is not a matter of choice. In many areas, people cannot drive less to get to work, school, medical care, or to buy groceries. Therefore, they are forced to pay whatever the oil companies charge for gasoline. During my time in the Senate, I have worked to protect consumers, farmers, and small businesses from potentially overwhelming price hikes in oil and gas prices. When prices spiked after Hurricane Katrina, I introduced a bill to give the President the authority to temporarily freeze gasoline and petroleum product prices until supplies were restored to pre-hurricane levels. I also have supported measures to impose temporary windfall profit taxes on oil and gas companies found to be guilty of price gouging.

Even when our refineries have been operating at full capacity, I have been concerned about the manipulation of the price of oil, gasoline, diesel and other refined products, such as home heating oil and jet fuel. Over the past several years, both as Chairman and Ranking Member of the Senate Permanent Subcommittee on Investigations, I have conducted investigations into the reasons for these rising prices. In 2002, I led an investigation which found that increasing concentration in the refining industry was contributing to price spikes. In 2003, I led an investigation which found that the Department of Energy’s (DOE) purchases of oil for the Strategic Petroleum Reserve (SPR) were pushing up oil prices. Under my leadership, the Subcommittee is currently conducting an investigation into energy trading and the manipulation of energy prices.

At the same time that gas prices have been rising, often seemingly contrary to the laws of supply and demand, there has been a dramatic increase in oil and gas trading by market speculators. Energy trading can be a very complicated matter, but the basics are straightforward: energy traders buy and sell contracts for the future delivery of oil and gas on futures exchanges such as the New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE). Some of these traders are oil companies and refineries buying or selling oil and gas contracts, while others are speculators who bet on energy prices either increasing or decreasing before final delivery of these commodities.

The Commodity Futures Trading Commission (CFTC), the main federal regulator charged with policing U.S. energy commodity markets, is supposed to ensure that buyers and sellers in energy futures markets are not engaging in excessive speculation or illegally manipulating oil and gas prices. While the CFTC is able to regulate exchanges such as the NYMEX, it cannot police all U.S. energy commodities markets due to the “Enron loophole,” a provision in law that exempts electronic energy exchanges from government oversight. This provision has enabled companies like Enron to trade on electronic markets without any oversight from the CFTC. Traders on unregulated markets are able to buy massive stakes in energy commodities, possibly manipulating or distorting energy prices. In 2006, my investigation found that experts estimated market speculation could account for more than 25% of the cost of a barrel of oil. In 2007, my investigation found that large trades by a single hedge fund named Amaranth had pushed up natural gas prices during the winter of 2006-07. We need to put a “cop” back on the beat to protect American consumers from the price manipulation and excessive speculation that can occur on these unregulated electronic markets.

On September 17, 2007, I introduced the Close the Enron Loophole Act (S.2058). This legislation would help to prevent price manipulation by directing the CFTC and electronic exchanges to police energy commodity trading. This bill would help prevent excessive speculation and price manipulation by providing the CFTC with the authority needed to monitor and regulate electronic exchanges, something it already does with futures exchanges like the NYMEX. I worked to insert language from the Close the Enron Loophole Act into the Farm Bill that was passed by the Senate on December 14, 2007 (H.R.2419). Before it can be signed into law, the Farm Bill must be reconciled with similar legislation passed by the House of Representatives. If this measure were to be enacted by Congress and signed into law, it would significantly strengthen the federal government’s ability to police our energy markets.

We need to continue to develop a long-term, comprehensive plan that will conserve energy, increase our domestic energy supplies in a responsible manner, and increase the use of alternative fuels in order to enhance our nation’s energy independence. I believe we should invest in leap-ahead technologies like hybrid and hydrogen vehicles. By working with industry leaders to achieve new technological breakthroughs, we will help create jobs and spur our economy. With significant investments in research and development, public-private partnerships and incentives for manufacturers to invest in new technologies, we can make great strides in hybrid and alternative fuel vehicle technologies and dramatically reduce our dependence on gasoline. This type of comprehensive approach will reduce the cost of gas in the long run and enhance our national security by allowing for greater energy independence. As the Senate continues to debate our national energy policy, I will continue to work toward this goal.

Thank you again for writing.

Carl Levin


Saturday, April 19, 2008

Friday, April 18, 2008

Oil And Politics Do Not Mix


Our politicians tell us we are running out of oil soon:

... and our politicians will save us by forcing us to seek alternative sources of energy [except nuclear and coal]:
... by making sure that energy prices continue to go up.

But all of that might be moot because no one seems to want refineries that are required to actually use the oil... not the politicians who rail against "big oil," not the environmentalists who want everyone to plug in their non-existent electric vehicles into electric power sources that don't exist, not the oil companies either who are looking for greener pastures... so to speak.
We have to hope that global warming will prevent a lot of people from freezing because they can't afford to heat their homes next winter.
Unfortunately, global warming has taken a vacation and more people will freeze next winter... and probably for many, many more to come... while our politicians tell us to buy tiny cars and keep chanting "peak oil," "no drilling here," and "CO2."
Can someone please save us from our politicians?

You can check the latest results of our politicians' efforts in the right column... oil and gas prices.


Thursday, April 17, 2008

March 2008 Weather


NOAA reports the following monthly high temperature records:

Total Number of Records for March 2008
(out of 172,736 stations with at least 30 years of data)
New: 3 + Tied: 6 = Total: 9
By my calculations, that is 0.0052% of the stations... not much happening. And no all-time monthly statewide records.

Likewise, the monthly low temperature records:
Total Number of Records for March 2008
(out of 172,685 stations with at least 30 years of data)
New: 1 + Tied: 2 = Total: 3
That's 1/3 of 0.0052% or 0.0017%. And no all-time record lows.
So, based on those statistics, it seems that warming is outpacing cooling 3:1... or maybe it's just even at 0:0.
Should we be worried?
Not likely. Even NOAA summarizes the month as pretty much blah.

Mainly a lot of snow.

The fact that much of the north central and northwestern states [okay, maybe even New England] are shown well below normal on the following map failed to make an impression on the record cold map. It was just naggingly cold. I guess all of that snow that never went away just made March feel colder than it was.
Those 1880s and 90s were a lot colder without the large urban heat islands and poorly placed weather monitoring equipment.


Wednesday, April 16, 2008



Last week I wrote about Protesting The Olympics. The gist was that it's okay to protest against the Chinese record of anti-human rights, as long as the Olympics are not the target of the protest.

Last weekend in California as I read in the San Jose Mercury about protests against China, I commented to my son and daughter-in-law that I wasn't quite sure what the protesters thought they might be accomplishing. I'm certain that the Chinese government doesn't care a bit about what they perceive as some fools in Paris, London or San Francisco walking around with placards.

I questioned what these protesters will do besides their demonstrations. Sure, it's good clean fun and gets their pictures in the media, but what will they do to affect the Chinese government's policies?
I suggested that if these protesters really wanted to make a point, they would start of boycott of Chinese produced goods. The possibility that the Chinese government might use such a boycott as evidence that the American [or British or French] people were anti-Chinese [as opposed to anti-Chinese government] is not much of a concern. Everything in China is propaganda anyway.

The likely outcomes of protesters boycotting Chinese goods are:
  1. They give up after the first week when they can't find any running shoes
  2. They give up after two weeks when they can't find any cheap electronics
  3. They give up after three weeks when they get a craving for egg rolls
  4. Nobody notices so they give up
  5. Everybody notices and they get the recognition they want and then they give up
But what if the 299 million or so non-protesters in the U.S. decided that they stood for the principle of human rights, freedom, and ethical government?
What if they all decided to consciously avoid purchasing Chinese-made products, even if the alternatives were more expensive?

What if they quietly wrote to their congressmen and said that they felt our trade policies with China were harmful in the long run to the cause of human dignity, even if it benefits importers and consumers in the short run?
What if the people of the U.S. simply did what their government representatives feared most?
That's a big what if... and in the end it would not affect the actions or policies of the Chinese government while dramatically impacting the economic well-being of the Chinese people.
What it would affect is the ability of the Chinese government to expand its power and influence around the world.
Our government,however, will focus on Chinese CO2 output instead.


Tuesday, April 15, 2008

Women's Foundation of California


During our brief visit to California, we had the opportunity to meet with an old high-school friend of my wife. They were both "Air Force brats" [children of people in the Air Force] and both stationed at a now defunct base called Clinton-Sherman AFB.

Amy McCombs is an example of the kind of woman leader for whom I would vote if she were running for an office. She has had a distinguished career as a media executive and as the president of a college. Rather than sit idly during retirement [which I'm sure she could not do], she has taken on the role of the President and CEO of the Women's Foundation of California.

Amy is a driving force. She simply gets things done that others can't. Her focus is the problem, much more than the politics of the problem [although that is inescapable]... which is why I'm sure she will do important things with this organization. While I have written about women and abuse in this blog, Amy has the connections, the competence, and the charisma to do something about the issue. She is a woman of great integrity and intelligence. It was a pleasure to be able to talk with her and learn from her.

I recommend that you go to the WFC site if you have an interest in this area.


Monday, April 14, 2008

Short But Sweet


We had a quick trip to see our son and daughter-in-law in the San Francisco area. Somehow, we ran into the perfect weekend as far as weather... sunny and 70s... and everyone in the area was out to enjoy it.

This was one of the several stops on our mini-tour of the area... spectacular. I'll try to get up a slideshow sometime this week of some of the better views.

Then, right on cue as the weekend was reaching its end, the fog rolled in, the temperature dropped 20 degrees and "normal" returned.

We'll be back in Michigan by early evening, having missed the really miserable weather there and not sorry at all about that. It's hard leaving our loved ones after such a brief trip, but as my old, departed grandmother used to say, "It's better than nothing." Actually, it was a lot better than nothing.


Sunday, April 13, 2008

Minnesota Demands Global Warming


In da great white nort, da people der will often say oofdah! Well, dey are saying oofdah a lot dis year.

Sorry, Minnesota, but global warming is a regional thing.


Saturday, April 12, 2008

Food: The Next Crisis?


The Economist reports:

THE food industry is being squeezed from all sides. Last year prices for milk, eggs, corn, wheat, oils and almost all other edible commodities climbed to unprecedented levels. They are still rising, although at a slower pace. The prices of electricity and fuel are also on the increase, which makes processing and distribution more expensive. And passing on higher costs is not easy when customers too are feeling the pinch, as unemployment rises, the value of their homes falls, and inflation erodes their purchasing power.


Food prices are likely to remain high for some time. The trends that are feeding the inflation, including increased demand from developing countries and the growing diversion of crops to make biofuels, show little sign of slowing. But necessity is the mother of invention; and the food industry seems to have no shortage of fresh recipes.
So if you can't afford the gasoline to drive to the grocery store, don't worry because you can't afford the food anyway.
But you may be able to get a government-backed loan for food and gasoline in the near future. I'm certain some presidential candidate will come up with a plan.

Friday, April 11, 2008

Define Credit-Worthy


It seems as if every politician is on the "bailout" bandwagon. Now, Sen. McCain wants to get in the act:

The plan would retire old loans that homeowners no longer can pay and replace them with less expensive, 30-year, fixed-rate mortgages that are federally guaranteed. McCain said families would gain "the opportunity to trade a burdensome mortgage for a manageable loan that reflects the market value of their home."

In line with his concern about bailing out speculators, McCain's proposal would apply only to homeowners who took out sub-prime mortgages after 2005 for homes that are their main residence. They would need to have proved they were credit-worthy at the time of the loan.
The statement is a little ambiguous, but I'll take it to mean that "when the borrower [aka homeowner] took out a subprime loan, the borrower was credit-worthy."
That begs the question, "What does credit-worthy mean if the loan was sub-prime."
After all, if the taxpayers are guaranteeing a loan, shouldn't we want to know what the standard for credit really is?


Gasoline Prices


This site now has a map module [located in the right column] provided by Gas Buddy that lets you put in your U.S. Zipcode to see local gas prices as reported by a network of volunteer members and is updated every 20 minutes with whatever new information has been input.

You can navigate by the +/- buttons or arrows at the top left, or you can click and drag with your mouse to move the visible portion of the map. A single click on a point zooms in one level and re-centers on that point.

Hope you find it useful.


Hard Choice


Should we stay here...Or go there...
No, we're definitely not afraid of the warmth.

Of course, we have other reasons to go there... even for a few days.

But for those of you who are really, really afraid of global warming, we invite you to come here.


Thursday, April 10, 2008

Protesting The Olympics


The Olympic Games magnify everything. Sporting events about which one seldom hears become front page news. Countries you have to look up on a map [or may not be on a map yet] compete with super-powers for a place in the spotlight. Palaces are built for hosting athletes and dignitaries. Every process and venue is second-guessed by everyone.

It is little wonder that this year's Olympics are under special scrutiny because it is hosted in China, a country that seems to magnify everything. The largest population, the worst pollution, the fastest economic growth, the worst business ethics, the greatest economic disparities... all wrapped up by a system that claims to be a "people's" government while, in reality, is a feudal system of elites who dole out privilege and pain.

It is little wonder that this particular Olympics bring out a wide variety of special interests who see an opportunity to grab the attention of the world through their public protests against the host country, China... people who grab the Olympic torch from wheelchair-bound athletes... people who line streets with signs demanding independence for Tibet... presidential candidates who tell the U.S. President to boycott the Olympics.

It would be a wonder if there was an absence of protest and demonstration. The months leading up to the Olympics have become the quadrennial opportunity for voices otherwise lost in the noise of greater international conflict and discord. It is a stage set for those seeking athletic perfection and those seeking to highlight the world's imperfections.

While I agree, in principle, with many of the causes and positions taken regarding the Olympics host, it should be remembered that the Olympics are only an excuse and an opportunity, not the reason for the protests. All of the protests and news coverage and political maneuvering prior to the opening ceremonies have nothing to do with the Olympics and everything to do with China.

Once the opening ceremonies begin, the world's attention will shift from the issues around the host country to the small plots of land where the accomplishments of one person or one team will overshadow everything else.
Meanwhile, just mentally delete "Olympics" from anything said, written, or shown regarding China and protests.


Wednesday, April 09, 2008

Anti-Oil Policies Hit Wallets


For the two or three thousand people who live outside of California, you might be wondering why gasoline and other energy prices are so high.

Ask Senator Barbara Boxer why she opposes oil exploration while at the same time she demands that the President push for energy independence... and lays the entire responsibility on the U.S. automotive industry. And while she is adamant about "doing something" about global warming... making fossil fuels prohibitively expensive... she opposes the only reliable and ready alternative... nuclear power.
“Another vote switcher, California Democrat Barbara Boxer, said she voted against the amendment this time because it included nuclear energy alongside wind and solar as sources of 'clean' energy."
Speaker of the House, Nancy Pelosi, also decries our lack of energy independence. She echoes Sen. Boxer's sentiments that it is the automotive industry that has caused all of our energy problems and that we can’t drill our way to energy independence.
She may be sincere in her opposition to drilling for more oil in U.S. territory as a way to avoid dependence on foreign oil, but sincerity may not be logically compelling in this instance.
By the way, the cost of regular, unleaded gasoline in San Francisco ranges from about $3.70 to $4.10 per gallon. I guess the cost of fuel is not a big deal to Californians because they keep electing people who oppose addressing the problem with anything more than blaming someone else and building roadblocks to actual energy independence.


Doing Well Or Showing Up


Yesterday, my brother arranged for a group of us go to the Detroit Pistons basketball game. There was a lengthy presentation prior to the game during which many of the famous players from previous versions of the team were honored for their achievements... including the "Bad Boys" of the Isiah Thomas era. It was a nice, feel-good session with highlights of past achievements and good-natured banter about which group was the best.

Then the game began. I have to say that I've seen a lot better performances from college teams. The Pistons had nothing to play for since they had already locked up their 2nd place position for the playoffs. The players who started the game ambled back and forth across the floor and took shots with the enthusiasm of a gas station clerk. The fans could barely muster a sarcastic cheer whenever a Piston player actually scored some points.

It wasn't until the last few minutes... after most of the spectators had left... that the 2nd/3rd string players mounted a rally that nearly tied the game. For some reason, they decided to give real effort... and it showed... and the remaining fans responded with some real appreciation.

The point of all of this is that even when looking back on past greatness, you should never forget that what you are doing now is important.

Sure, the fans understood that this was a meaningless game before the playoffs, but they still expected the team to perform to their ability... not take the night off. After all, the customers still had to pay to get in... and they were not necessarily paying to watch a pre-game ceremony.
There is an implied ethical contract that the seller of services or products makes with the customer. It is that the seller will provide a product or service that meets a reasonable level of quality based on both past performance and competition.
Losing the game was not the breach; losing because there was no effort to perform was.

Tuesday, April 08, 2008

I'll Stick With Golf


I received these pictures in an email.

In Zimbabwe, Africa, you will find the magnificent Victoria Falls at a height of 128m. The location is known as 'The Devil's Swimming Pool'.

During the months of September and December, people can swim as close as possible to the edge of the falls without falling over! These falls are becoming well known amongst the 'radical tourist' industry as more and more people search for the ultimate experience.Would you dare?

Monday, April 07, 2008

Our Day Of Warmth


It's been a long, long time since we've seen this around Michigan.

Unfortunately, it may be awhile before we see it again....

Ah, Spring! We hardly knew ye.


Revisionist Future


The other day, I copied an article from BBC and posted it here.

LuboŇ° Motl points out that BBC, under pressure from the Holy Climate Church has changed the text.

BBC has been shown the error of its ways and is now [politically] correct... it's just not accurate.

Government Daylight Time


If you have ever tried to contact a senator, you know that it is a hit or miss proposition at best. Your emails or letters may or may not be answered and, if you do receive an answer, the answer might or might not really be an answer.

You may have thought that your government is on another planet, but perhaps it is really not part of our space/time:

For most of us, 2:00 pm is not the morning.


Sunday, April 06, 2008

Politics As Unusual


If you follow this blog, you'll note that I occasionally... but not regularly... comment on the U.S. campaign for president. Most of my comments have been the sniping kind rather than the "I support this candidate" sort.

The Baltimore Sun ran a piece called, "McCain: 'The luckiest man alive'" that gets close to why I just can't bring myself to get passionate about this election... and why this election really is going to be a "gut check" for American politics.

"Given the Democratic advantages, it shouldn't be close," said Andrew Kohut, director of the Pew Research Center. "It's close because of the way that voters are able to see McCain as a potential agent of change, and no other Republican could have done that."

McCain's image isn't tethered to his party, a problem for him during the primaries, when the sincerity of his conservatism was in question. Those partisan shortcomings are now regarded, on balance, as pluses.

He is widely viewed as a reformer who challenged the establishment, including Republican leaders, on such issues as campaign finance and immigration.

McCain "is not seen like Bush by the voters," said Kohut.

A recent Pew poll showed McCain leading Obama by six points among independent voters, a key swing group that disapproves of Bush's performance as president. If Clinton is the nominee, McCain would cut into the Democratic advantage among voters under age 30, the poll found.

Top Clinton strategist Mark Penn has pointed out that McCain, a senator from the Southwest who has tried to put together a coalition for immigration reform, is well-positioned to bring Hispanic voters, the newest and fastest-growing sector of the electorate, back into the Republican fold.

Other Democratic strategists have noted that McCain's patriotic image and war-hero status could appeal to the white, socially conservative working-class voters, once known as Reagan Democrats, who are expected to be a pivotal group again this November.

His assets as a candidate also reflect the weaknesses of his Democratic rivals.

One of Obama's greatest liabilities, his lack of experience, plays directly into McCain's qualifications. His 48 years of public service are divided almost evenly between careers in the military and as a legislator in Washington.

Clinton's experience, polls show, is also a question mark, as are doubts about her trustworthiness. Americans were six times more likely to say they don't trust Clinton than McCain, according to a recent Gallup poll that probed the weaknesses of the presidential candidates.

Prejudice against an African-American or woman as president - difficult to measure accurately in opinion surveys - works to McCain's advantage. He would be the oldest person to get the job, but few of those who oppose McCain, 71, said it was because he was too old, according to Gallup.

If any of you have been watching the HBO series "John Adams," you might get the impression that this year's campaign has the making of a mini-revolutionary war... they are all fighting for "change."
In reality, this campaign is so far away from the ideals and sacrifice of John Adams and his peers that it has become a campaign of revulsion rather than revolution.

Democracy never lasts long. It soon wastes, exhausts and murders itself. There was never a democracy that did not commit suicide.
John Adams
Why do I get the impression that so many of our politicians are holding a gun to our head and asking us to pull the trigger?


Saturday, April 05, 2008

Global Warming Will Reduce Human-Generated CO2


What are some of the "remedies" for human-generated CO2?

  • Fuel efficient or non-fossil fuel vehicles
  • Nuclear, solar, or wind power
  • Conservation
Still, for those living at 40° N or farther north latitude [half of North America, most of Europe and Asia], one of the largest contributions to CO2 production is probably the heating of homes and workplaces.

While some argue that an increase in average temperature will be accompanied by more frequent record high temperatures, there are many who have demonstrated that global warming means higher minimum temperatures.

Well, that's good news if it is the latter... and it appears that much of the calculated higher average temperatures is based on minimum temperatures being higher because very few new record extremes have occurred (see above link)... at least in the U.S.
Of course, some of that apparent warming may be due to a combination of the Urban Heat Island effect and really bad placements of weather monitoring stations.
Buts let's assume that there is some validity to the data and the minimum temperatures are, on average, higher. What does that mean?
  1. There is no greater demand for air-conditioning because the temperature increase is at the lower end of the temperature range so there is no additional coal, oil, or natural gas burned to generate the power to run the air-conditioners and no additional human-generated CO2 is released.
  2. There is a lower demand for coal, oil and natural gas for heating because the "degree days" are reduced; i.e., the temperatures are higher so less fuel is needed for heating and less human-generated CO2 is released.
  3. With heating systems running less, there is less demand for electricity to run the heating systems and less coal, oil or natural gas used to generate power for running the heating systems so less human-generated CO2 is released.
  4. Vehicles will run slightly more efficiently because of warmer minimum temperatures which means that there will be less fuel burned and less human-generated CO2 released.
Therefore, if... and that's a big if... we are going to experience a rapid warming trend after the present cooling trend, there is a significant possibility that human-generated CO2 will decrease ... or at least not increase as much ... as a result of such warming.
It is really more likely that the present cooling period is increasing human-generated CO2 as furnaces worldwide are being run at much higher rates.
Is that "negative feedback" from global warming?


Friday, April 04, 2008

Global Temperatures To Decrease


From BBC News:

Global temperatures 'to decrease'
By Roger Harrabin
BBC News environment analyst
Villager walks through the snow in Nanjing, China (February 2008)

La Nina caused some of the coldest temperatures in memory in China

Global temperatures this year will be lower than in 2007 due to the cooling effect of the La Nina current in the Pacific, UN meteorologists have said.

The World Meteorological Organisation's secretary-general, Michel Jarraud, told the BBC it was likely that La Nina would continue into the summer.

This would mean global temperatures have not risen since 1998, prompting some to question climate change theory.
But because it is cooling... that's just variability caused by La Nina. The heating caused by El Nino... that's global warming.
"When you look at climate change you should not look at any particular year," he said. "You should look at trends over a pretty long period and the trend of temperature globally is still very much indicative of warming."

"La Nina is part of what we call 'variability'. There has always been and there will always be cooler and warmer years, but what is important for climate change is that the trend is up."

Experts at the UK Met Office's Hadley Centre for forecasting in Exeter said the world could expect another record temperature within five years or less, probably associated with another episode of El Nino.
But if memory serves me right, 2007 was supposed to be one of those record years and when that didn't happen the timetable was moved to 2009 and now that it is obvious earth is cooling off... well, maybe the next warming will be 2012 or 2013.
It's going to happen. Just wait. One of these years we'll have another hot year. Then we can tell everyone that global warming is back!
Yes, dear. Eventually there will be another hot year and you can be right.


Jihad Against China


Isn't this special? China Confirms Protests by Uighur Muslims. An intractable political philosophy meets an intractable religious movement.

Will Osama Bin Laden organize a Jihad against Beijing? Will planes crash into the Forbidden City?

Probably not. The Chinese don't put up with that crap. They just annex the territory of anyone who causes them trouble and isn't strong enough to oppose them. Besides, what chance do a billion scattered Muslims have against 1.6 billion Chinese who have an army of millions of frustrated, single men because all of the extra girls were killed off?

The clash of cultures; the battle of barbarians. Stay tuned for more in the NY Times.

Hard to choose between a culture that kills baby girls because they are an economic burden or one that kills them when they get older to protect the "honor" of some misogynist (not that India is any better in this respect).

Thursday, April 03, 2008

al Murtha Was Wrong


From the Astute Bloggers:

Murtha said: "Well there's no question in my mind, what happened was an IED exploded. It killed one Marine. And then a taxi drives up. When the taxi comes up there's four of five people in it. And they shoot . shoot those four or five people unarmed. "And then they go on a rampage throughout the houses and kill people.


Last week's development in the Haditha case -- the dropping of all the charges leveled against Lance Cpl. Stephan Tatum for actions related to Haditha, Iraq -- drives another nail into the shameful accusations made by Time magazine and Rep. John Murtha [PA].
Of course we understand perfectly where those statements were coming from....


Trading In Our Future


Bill sent this the other day:

Michael E. Lewitt has written a great summary of where the U.S. economy stands - and it's eggshell thin.

Michael describes the situation accurately:

"America is rushing headlong into the 21st century without a proper understanding of what economic policies and financial tools are going to be required to prosper in a changing world. For more than two decades, the United States economy has favored financial speculation over production. Over the past century, our legal system had developed an increasingly outmoded concept of fiduciary duty that privileges short-term, single-firm interests over the kind of long-term, society-wide interests that could lead to prolonged prosperity. The current meltdown in the financial markets is a symptom of a serious disease that is eating away at the stability of our most important institutions. What we are witnessing might well be the end of American financial hegemony, which is the result of a burgeoning global economy. The current crisis in financial markets gives us an opportunity to evaluate how we can better prepare ourselves to deal with a borderless world."

"In spite of claims to the contrary, the American economy has become increasingly unstable in recent decades. This phenomenon picked up momentum in recent years as financial markets focused on trading derivative financial instruments rather than cash stocks and bonds. Paradoxically, the very financial instruments designed to manage risk increase mark volatility. As the distance separating lenders and borrowers as well managers and stockholders increased, debacles such as the Enron and WorldCom frauds earlier this decade and, more recently, the subprime mortgage and structured credit meltdown of today became more common. By effectively reducing all financial instruments and measures of financial value to "one's and zero's" – by digitalizing value – Wall Street removed crucial checks and balances on financial behavior, which ultimately remains a human activity. The growing use of quantitative trading models led to a market dominated by traders directing money into companies about which they know little or nothing. This leveling of all economic values to indistinguishable signs did untold damage to economic actors' ability to distinguish valuable assets from worthless ones."

"In addition, unstoppable economic and historical trends such as globalization caused a shift of jobs and factories to geographic locations with lower labor and materials costs, resulting in a transformation of the U.S. economy from one that manufactures goods to one that traffics in intangible items. The result has been a shift from investing in activities that add to the productive capacity of the country to transactions and activities that are merely speculative in nature, i.e., that merely spawn more money but not more physical or capital assets. This shift from a tangible to an intangible economic base was accompanied by a change in the way in which businesses are financed. At the same time as the business base became increasingly intangible, so did the financial base. Equity was replaced by debt, and cash securities were replaced by derivatives. Much of the new financial architecture is now constructed outside the purview of the Federal Reserve and other regulators, allowing economic actors to avoid margin requirements and other limits on leverage that can prevent systemic threats. The new foundations of corporate finance can vaporize in the blink of a trader's eye. These trends have enormous policy consequences for the United States and our future standard of living."

Interesting, especially in that it came from here.

Reminds me of what I wrote:

Wednesday, April 02, 2008

USA Information


Want to know something about the Federal Government? Start here.

No, there was no particular reason.


Can"t Find It?

Use the SEARCH BLOG feature at the upper left. For example, try "Global Warming".

You can also use the "LABELS" below or at the end of each post to find related posts.

Blog Archive

Cost of Gasoline - Enter Your Zipcode or Click on Map

CO2 Cap and Trade

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)