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Thursday, January 26, 2012

Eye Candy

SEARCH BLOG: MARKETING

Popular blogs such as Theo Spark have an ongoing parade of pictures of beautiful women to boost readership return rate.  So, I thought I'd give it a try.  Whadduyathink?

[source]

2012 IS HERE

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Obama: I Voted For It After I Voted Against It

SEARCH BLOG: OBAMA

From the State Of The Union address:
"It’s time to apply the same rules from top to bottom: No bailouts, no handouts, and no copouts."
From the State Of The Union address:
"That’s why I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No more red tape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won’t add to the deficit, and will give banks that were rescued by taxpayers a chance to repay a deficit of trust."
Just a point here.  If your home value is more than the mortgage, that means you probably bought your home in the 1990s or earlier.  If you bought your home sometime during the last decade and have been a "responsible homeowner", e.g., paid your loan payments on time each month, you won't qualify because you are "upside down" ... your home is presently worth less than the mortgage.  We all have a friend or relative in that position and know how difficult it is to be stuck in that situation.

It forces the bank to take less compensation for what is now a risky investment and not their fault... the government rewrites the loan contract... writing a NEW LOAN, in effect [a homeowner bailout].  I presume the banks will say "Thanks, but no thanks.  Show me the money."

Or, the government will have to guarantee the loan repayment in full to compensate the bank for the receiving less money [lower interest payments] for an unsecured risk which is not something that any taxpayer in his right mind would propose.  Besides, writing new loans with large amounts of unsecured risk might create a situation that is against the law, unless my understanding is faulty.
The standardized requirements in place for banks and other depository institutions, which determines how much capital is required to be held for a certain level of assets through regulatory agencies such as the Bank for International Settlements, Federal Deposit Insurance Corporation or Federal Reserve Board. These requirements are put into place to ensure that these institutions are not participating or holding investments that increase the risk of default and that they have enough capital to sustain operating losses while still honoring withdrawals. Also known as "regulatory capital". [source]
If the banks' capital is sufficient to cover the rewritten loans, it may very well prevent the banks from approving new loans because their lower revenues from the old loans reduces their future capitol reserves... and difficulty getting new loans is already hampering the recovery.

H/T Townhall Finance

2012 IS HERE

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Three Years Under Obama - Five More To Go?

SEARCH BLOG: OBAMA

Interesting video.  It's a few weeks old, but other than a misplaced snide comment about the Chevy Volt's tendency to catch fire ... it doesn't, but was thought to then ... this is an interesting watch.


2012 IS HERE

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Romney and Gingrich - What Would You Do?

SEARCH BLOG: POLITICS

For the time being, the GOP nomination race is being led by two men: Newt Gingrich and Mitt Romney.

We've all had the opportunity to watch debates as they pontificate about Obama's shortcomings and each other's shortcomings.  So and so did this bad thing and so and so's policies and programs failed here and so and so's ethics are lower than a cockroach.

Enough of that.  That's not cutting it in the primaries and it won't cut it in the general election.  No, that's just pushing hot buttons so that people will react with their guts rather than their heads.  Of course, given the nature of the electorate, that's often a good strategy.

Regardless, it's time to carve a line in the concrete [never understood why drawing a line in shifting sands made sense as a metaphor].  It is time to get away from what others have done or not done and state specifically what you as a candidate see as:
  • the top five issues facing the U.S. over the next four years [keep religion, beliefs, and law pertaining to such out of it]
  • how you would address those top five issues [get specific]
  • why your approach would be better than what is presently the case
  • who benefits from your solutions [everyone is not an acceptable answer]
  • who might not benefit from your solutions, why, and is that a problem
  • what it would take to implement your plan [besides votes in Congress]
We don't need a 164-point GPS directions kit.  We don't need broad generalizations that have little meaning [give America back to the people; free will; hard work; more jobs... everyone says that; save the environment; etc.].  We need a high-level structure against which specific proposals will be tested and either accepted or rejected.  If you can't come up with your top five issues and solutions, you are just blowing smoke.

We will then be able to see which candidate has the vision and substance to set a meaningful direction for the next four years.  We've already seen that "hope" and "change" sound good, but are absolutely meaningless.  Let's not repeat that by substituting some other unactionable nouns... "liberty" and "individualism."

WHAT WE DON'T NEED:
...maybe even step one.

REQUIRED READING:

Joe Biden on GOP Candidates: Are Gingrich and Romney the Same?

    International Business Times

2012 IS HERE

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Hope, Change, Or Hope You Still Have Some Change

SEARCH BLOG: FEDERAL RESERVE

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. 
In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014. [SOURCE]
In other words, no hope for much change under the present administration.  We're going to give away money to say that the economy is moving.  Inflation?  Hah! Ever try inflating a lead ballon?


Now about your retirement plans....



RELATED READING:

Fed Signals That a Full Recovery Is Years Away
 

By BINYAMIN APPELBAUM
The Federal Reserve said it was not likely to raise interest rates until the end of 2014, adding 18 months to the expected duration of its response to the slump.

2012 IS HERE

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Wednesday, January 25, 2012

Romney... Taxes... Wealth... Presidency

SEARCH BLOG: POLITICS

To say that Mitt Romney has an image problem is like saying ... Obama has an image problem. There is always something about a politician that draws attention to him in a negative fashion.  In Mitt Romney's instance it is his success and wealth.

Romney is not among the super-wealthy, but by the average person's standard he is very wealthy.  He makes, in a good year, what a top baseball or basketball player will make.  Hey, LeBron, you can't be voted to the All-Star team because you make much more than the average player.

Romney needs to address the money issue in a way that puts him in a positive light.

Perhaps this is how:

  • Agree that his income and wealth are significantly more than the average person because he has achieved success in business.
  • State firmly that he has approached his business dealings both in an ethical and legal manner and that he has paid the fair amount of taxes as required by the tax code.
  • State that he understands the tax code is probably perceived as unfair and that he would like to see that addressed with a thorough review, not a knee-jerk reaction that destroys incentives to succeed.
  • Say that he is running for President not for the money or power... a perception that is reinforced by many politicians who seem to become quite wealthy on a government salary... but because he has enjoyed the benefits of living and working in this country and he wants to ensure that the opportunities for personal success are not diminished for others by an overbearing government... that is fair.
  • Point out that in the business world a CEO will sometimes accept a symbolic $1 salary when taking over a company that is in deep financial and operational trouble... and that he will only accept $1 for his compensation as President... not because he wants to show everyone he is so wealthy, but because he understands as a businessman that a leader should not be willing to take rewards for a job not yet accomplished... or poorly done.
Ask the question: is personal success a disqualifying factor for being President?

2012 IS HERE

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Play Fair Mr. Obama

SEARCH BLOG: OBAMA

"Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules."
Gee, that sounds really good... but what does he mean?

What is getting a "fair shot?"  No, really, what is fair?  Do we all get to go to Harvard because President Obama did?  I'd like to see my grandchildren get a "fair shot" at the White House if they want it.  If a child chooses to drop out of school, did that child have a "fair shot?"  If that child had irresponsible parents, did that child have a "fair shot" and, if not, does someone else's responsible parents have to make up the difference?

What's doing a "fair share?"  If I have a protected job that lets me goof off for several hours, have I done my fair share simply by being someplace for eight hours?  If I'm a businessman who works 14 hours per day for 6 days per week, is that a "fair share"... even if I get paid more?  What if I invest my after-tax earnings in risky business ventures and some of them return big profits for me?  Have I done my "fair share" by building up those businesses and creating lots of jobs with the infusion of my money, or am I "not playing by the same rules" as someone who spends their extra money on beer and gambling or drugs?

Yes, Mr. President, it sounds really good... this "fairness doctrine" of yours... but I'm still having trouble with your concept of fairness.  Do you mean that the results for every person should be pretty much the same regardless of effort or risk or achievement?

Or do you mean that everyone is required to do as much, risk as much, and achieve as much as everyone else?  No, that's not likely.

No, Mr. President, I think your idea of "fairness" is that if you do more, risk more, and achieve more... you should have more taken from you.

By the way, I'd like to have one of your limos and maybe one of your smaller helicopters.

REQUIRED READING:
What Obama Can Learn From China
RELATED READING:
Speech by a monarch [this is in Swedish - use the Google Chrome browser or the translator on that website - upper left - to translate]

2012 IS HERE

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Tuesday, January 24, 2012

Those Who Control The Past Control The Future

SEARCH BLOG: GLOBAL WARMING and GEORGE ORWELL


And if all others accepted the lie which the Party imposed -if all records told the same tale — then the lie passed into history and became truth. 'Who controls the past,' ran the Party slogan, 'controls the future: who controls the present controls the past.' And yet the past, though of its nature alterable, never had been altered. Whatever was true now was true from everlasting to everlasting. It was quite simple. All that was needed was an unending series of victories over your own memory. 'Reality control', they called it: in Newspeak, 'doublethink'. - George Orwell; Chapter 3, 1984 [source]
The following excerpt from Tom Nelson's blog of January 24, 2012:

GISS Make The Past Colder In Reykjavik « NOT A LOT OF PEOPLE KNOW THAT 
I have contacted the Iceland Met Office to get their view on the GHCN adjustments. Their reply could not be clearer :-
a) They were not aware these adjustments were being made.
b) They do not know why they have been made, but are asking!
c) They do not accept the “corrections” and have no intention of amending their own records.

It has become commonplace for climate data to be "adjusted" in a way that shows temperatures a century ago to be colder than they were recorded.  In this way, a modest 1° reduction at the beginning of the 20th century data becomes a severe global warming of 0.9° by the end of the century.

Just to put some numbers to this, here is a selection : [source]
YearLast WeekThis WeekDiff
19115.314.211.1
19415.284.091.19
19715.854.651.2
19916.124.921.2
20115.585.580
It appears that climate science, as well as economics, has data that can be adjusted and interpreted to fit the story that needs to be told. 

2012 IS HERE

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Mitt Romney Too Soft

SEARCH BLOG: POLITICS

The LA Times reports that Mitt Romney's tax returns show he and his wife donated 16% of their income to their church and charities.

So that's another reason to mistrust him as a potential president: he's too soft-hearted.


Add that to his other vices like being married to one woman for over 40 years... which shows he is inflexible and tending toward inaction... are reasons enough for doubting his ability to lead this nation in the manner to which we've become accustomed.

2012 IS HERE

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Wisconsin Unemployment - Blame Gov. Walker

SEARCH BLOG: POLITICS and ECONOMY

Over at Econbrowser, the politics and policies of Gov. Scott Walker have been taking a pasting from the liberal side [no real surprise there].  Gov. Walker has aroused more animosity in a short time than nearly any other governor due to his "take no prisoners" approach to state budgets and management.  While I agree with the notion that Gov. Walker has used a chain saw when a carving knife was more appropriate, I believe that the argument Wisconsin has suffered a slower decline in unemployment rates ... relative to other states ... is misleading.

From the site Department Of Numbers:

Wisconsin Unemployment
According to the BLS current population survey (CPS), the unemployment rate for Wisconsin fell 0.4 percentage points in November 2011 to 7.3%. The state unemployment rate was 1.4 percentage points lower than the national rate for the month. The unemployment rate in Wisconsin peaked in June 2009 at 9.2% and is now 1.9 percentage points lower. From a post peak low of 7.3% in April 2011, the unemployment rate has now grown by 0.0 percentage points. You can also seeWisconsin unemployment compared to other states.
Unemployment RateNovember 2011Month/MonthYear/Year
National8.7%-0.2-1.1
Wisconsin7.3%-0.4-0.3
Note: All comparisons are made with November data as December state level unemployment data has not yet been released.
Unemployment Rate: Wisconsin, NationalWisconsin monthly unemployment rate chart from 1990 to November 2011

Note: Recessions shown in gray
Wisconsin Unemployed
The number of people unemployed in Wisconsin peaked in June 2009 at 285,095. There are now 61,262 fewer people unemployed in the state. Wisconsin job growth data is also available. 
Unemployed PersonsNovember 2011Month/MonthYear/Year
Wisconsin223,833-10,253-7,319
 UPDATE:

Unemployed PersonsDecember 2011Month/MonthYear/Year
Wisconsin215,767-8,147-11,917



The argument that Wisconsin employment is suffering is based on recent cutbacks in state government employees... not necessarily on rate comparisons with nearby states or the national rates.  Conveniently overlooked is the point that those government employee cutbacks were taken to help strengthen Wisconsin's fiscal situation which was looking increasingly difficult... and are occurring in other states and at the federal level.
That said, I'm not necessarily of fan of Gov. Walker's approach to laying a big chunk of the fiscal burden on the backs of teachers, many of whom have been driven into dangerous economic straits by changes in their benefits funding.  The argument was that teachers were paying little or nothing for their benefits... all true.  What hasn't been said is that many teachers, not all, have been paid a relatively low salary as an offset to those benefits and that taking a large chunk of their current salaries to now fund the benefits... as much as 25%... placed an enormous and inordinate burden on individual teachers. 
 An example of the manipulation going on: the premium pay for a Masters degree was less than $3.00 per hour... not enough to pay for the cost of degree, but absolutely required for some teaching positions... and now the premium pay is being taken away... but the requirements remain.  Try doing that in the private sector.
But back to the notion that Wisconsin's unemployment rate is out of line.  First, note [enlargement from above] that Wisconsin is not all that different from the national average except in the most recent period.  Also note that Wisconsin showed a temporary increase in unemployment about the same time [2011] that the national average reflected one.  Some of that may be statistical anomalies from the Seasonally Adjusted Annual Rates [SAARS] which are used to adjust actual rates based on past seasonal patterns.

Wisconsin recovered somewhat faster than the rest of the nation for about a year and then the national recovery began to close the gap.  So, the argument is that Gov. Walker caused the gap to close as opposed to the argument that some other laggard states, such as Michigan, were beginning to show improvements from far worse conditions which allowed for greater absolute improvement.

If you look at the fall in unemployment rates from the high point in 2009 rather than mid-2011, you'll see a movement in line with the nation... a relationship for the past decade... shown in the larger graph above.

Perhaps one might want to consider another argument: the recovery for the nation and Wisconsin might have been considerably faster if our President's economic policies were not so counterproductive.

2012 IS HERE

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Scott Rasmussen Analyzes Republicans' Views Of Candidates

SEARCH BLOG: POLITICS

Scott Rasmussen of rasmussenreports.com, provides the current state of Republican politics from the viewpoint of likely voters.  CLICK HERE TO PLAY.



Forecast: variable headwinds.

2012 IS HERE

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Monday, January 23, 2012

Obama - Keystone Kop

SEARCH BLOG: OIL

A Canadian speaks:

Direct lift from American Digest 
Keystone Klunker: An On-Air Evisceration of Obama By Ezra Levant 
"Barack Obama, the first post-American president...."

 
"Obama has just made a decision to give Chavez and Venezuela unfettered access to American oil money.".

2012 IS HERE

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Transportation Security Administration Detains Terror Suspect

SEARCH BLOG: GOVERNMENT

Nashville - The Transportation Security Administration [TSA] scanners detected an "anomaly" and removed a passenger from the security line.  The passenger refused a full-body pat-down, but offered to go through the scanner again.  But the TSA guards refused and detained the passenger.

The passenger has been identified as a government critic and opponent of the TSA... possibly a threat to this nation's air traffic security bureaucracy.

You don't spit into the wind; you don't tug on Superman's cape; you don't piss off a U.S. senator....



Waiting to see where this goes in the future.

2012 IS HERE

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What Obama Can Learn From China

SEARCH BLOG: CHINA and OBAMA

President Obama is fond of using China as an example of economic success.  Of course, to the President, the Communist/Socialist aspect of China is the appealing part; the capitalistic part... the part that isn't "fair"...  is the only flaw.

NPR Via Mark Perry at Carpe Diem:


Yen Jingchang was one of the signers of the secret document.
Jacob Goldstein/NPR
Yen Jingchang was one of the signers of the secret document.
In 1978, the farmers in a small Chinese village called Xiaogang gathered in a mud hut to sign a secret contract. They thought it might get them executed. Instead, it wound up transforming China's economy in ways that are still reverberating today.
 READ THE WHOLE ARTICLE or listen to it below... especially the end.  That's the "fair" part.


Note just a few things:
  1. There was no discussion about unemployment benefits
  2. There was no discussion about "fair" taxation or increasing taxes to allow more stimulus spending; in fact, it was a perfect example of a flat tax [everyone was forced to give a certain amount to the government]
  3. There was no effort to blame the more productive for their success
  4. It worked... big time!
And then... the Chinese "Obama fairness" brigades took over....

2012 IS HERE

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Sunday, January 22, 2012

JoePa Gone

SEARCH BLOG: SPORTS

UPDATE:


"CBS report is wrong — Dad is alive but in serious condition," Joe Paterno's son, Scott Paterno, tweeted.

Later that night [Saturday], Onward State retracted its original report and issued an apology.


THEN LET'S GET RID OF THE OLD POST.  BUT NOW, IT APPEARS JOE PATERNO DIED THIS MORNING.
"He fought hard until the end, stayed positive, thought only of others and constantly reminded everyone of how blessed his life had been," his family said in a statement announcing his death Sunday. "He was a man devoted to his family, his university, his players and his community." [SOURCE]
CNN has a good article covering Paterno's life and death.

2012 IS HERE

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State Capitalism and Crony Capitalism

SEARCH BLOG: POLITICS

From The Economist:


From National Review Online:

JANUARY 20, 2012 5:00 P.M.   
Mitt’s Attack on Crony Capitalism 


  • Question:  How far apart are "State Capitalism" and "Crony Capitalism"?  
  • Another question: Is General Motors an example of "State Capitalism"?  
  • Last question: is that capitalism?

2012 IS HERE

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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
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The Independent (UK)

Tracking Interest Rates

Tracking Interest Rates

FEDERAL RESERVE & HOUSING

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."
November 28, 2007 FED VICE CHAIRMAN DONALD KOHN
"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."
http://www.reuters.com/

December 11, 2007 Somehow the Fed misses the obvious.
fed_rate_moves_425_small.gif
[Image from: CNNMoney.com]
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 Economy.com. "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)