Saturday, December 27, 2008

A dark cloud over dark matter?

Astronomers working with the Chandra X-Ray Observatory have announced the results of new research that they say confirms the existence of dark energy. They speculate that the findings could lead to new insights into the beginning and perhaps the eventual end of the cosmos. But, there's a fly in the ointment. Its name is Halton Arp.

The universe started with a big bang and is constantly expanding. That expansion is accelerating. We know this because the redshift of the light from far away cosmic entities tells us how fast they are moving away from us (remember the train whistle analogy in high school). The model has run into some problems over the decades, such as the fact that there wasn't enough matter to account for galaxies staying together and that there was no explanation for accelerated expansion. Don't panic. New forms of energy and matter were called into being to fix those problems: dark energy and dark matter.

The expanding universe model is no longer open to debate. It's an established fact and indisputable....or is it? A man named Halton Arp has a different idea. He has done extensive and very convincing research aimed at demonstrating that the redshifted light from far away objects is not a measure of velocity, but of age. He proposes that galaxies occasionally eject matter, which may become a new galaxy. The new galaxy is formed of newly formed particles, as a result of the explosive expulsion, which are lower in mass than their older counterparts. The particles in the new galaxy increase in mass as they age. It is the difference in the mass of the particles between the parent and offspring galaxies that accounts for the difference in redshift.

Mr. Arp has produced volumes of research, including observational evidence, that I will not go into here. Please visit the site for more detailed information.

The importance of the proposal is that, if it is correct, everything we think we know about the cosmos suddenly changes. A galaxy that is observed alongside another that has a much higher redshift would be assumed to be far away from its apparent neighbor and rapidly accelerating under the current model. Under Arp's model, the higher redshifted galaxy would be adjacent to, and the offspring of the other galaxy. The currently accepted relative positions and motions of all far away cosmic objects would suddenly be thrown into disarray, along with any research based on them. You can understand why the scientific community in general is not clamoring to support Arp's work.

Whatever the truth is, either Arp is wrong or the scientific community at large is wrong. History has proven that it is indeed possible for the broader scientific community to be dead wrong, even in the face of compelling evidence, for decades and even centuries at a time.

"But there is research, even brand new research that supports the dark energy/dark matter scenario." When you establish a false premise as an absolute truth, any observation you make must be made to conform to your premise. The research being done into dark energy and dark matter is heavily dependent on redshift being an indicator of the relative location and velocity of the objects being studied. If those "facts" are not facts, much of the data derived from them is meaningless.

I'm not a physicist or an astronomer, but I do believe in Occum's Razor. When faced with two plausible possibilities, the simpler one is usually correct. When you have to develop new particles and new properties of existing particles to explain what you are observing in the context of your established premise, check your premise.

Sunday, December 7, 2008

Algae, Solar Power and the Electric Car

The lobbyist for the algae to fuel industry will be on Capital Hill this week, trying to convince lawmakers that their industry should be included in any comprehensive, long term energy strategy. They've got the support of the airline industry behind them and at least one company, Sapphire Energy, has actually produced a viable fuel.

Ascent Solar passed a major milestone recently when the Department of Energy officially certified that their thin film photovoltaic cells achieved nearly 10% efficiency at converting sunlight to usable power. Ascent hopes to have commercially available building products, incorporating their cells, on the market in 2010.

The electric car has gotten a lot of hype recently, but there is one major problem I haven't heard anyone address yet. No matter how much range they get and at what efficiency, people are inevitably going to overdrive their charge. What do you do when you're stuck on the side of the highway and out of juice? With gas powered vehicles you can at least grab a gas can and hitch a ride. I've heard of no counterpart to the gas-can for the electric car. Before they can go mass-market, they need to come up with a portable device one can carry to a charging station or outlet. You would charge the device with enough juice to get you at least 20 miles or so and return to your car with it. I suppose an alternative would be the emergence of an industry based on cars or trucks driving the highways and byways with enough power to sell stranded motorists a quick charge. But what if one doesn't happen to be patrolling your area? It's not an insurmountable problem. In fact, it's probably a simple fix. I'm just surprised none of the egg heads at the automobile companies have though about it yet.

Saturday, November 29, 2008

Who's to blame for our economic situation? I blame Star Trek!

In a free market environment, people try to better themselves by finding ways to create value for others. That is, they create something, be it a product or a service, that is of more value to someone else than it is to them. Then they trade. Some ideas succeed. Some fail. It's an evolutionary process of natural selection that brings to market the things people most want at prices they're willing to pay.

In the United States today, we increasingly look to the government to provide the things we want. We also look to them to take the pain away from trying and failing. We've subverted the evolutionary process. Even politicians who once championed capitalism and limited government have gotten on the bandwagon. The government now owns stakes in banks, insurance companies and soon, the auto makers. In exchange for the cash infusions, government will have a say in how the companies are run, who they hire, what they produce and how much they'll make. There is no longer a debate as to whether or not the government should ensure everyone gets health care. There's just some disagreement as to the terms. Worrying about the national debt is not even on anyone's radar in this new paradigm.

How did we get here? Well, I blame sci-fi, at least in part. Science fiction has the ability to stir our imaginations. Some of the nifty devices used on shows like Star Trek have actually been produced and are in every day use (automatic doors, "communicators"). There have been many positive influences. But one thing most every popular science fiction drama has in common is a view of the future built by the government. Nobody uses cash in Star Trek. Everyone simply does their duty and is happy to do it. We see the dozen or so folks who get to go on the occasional adventure, but I can't help but wonder about the other 400 who simply do their jobs, day in and day out, and never get paid. All their needs are met by the Federation. Once in a while a "capitalist" type will appear on an episode, but they are backward, goofy, greedy and usually ugly comic relief.

The Stargate series is no better. The government is engaged in inter-gallactic trade and diplomacy on the taxpayers dime. Not only does the general public not know anything about it, they have no direct access to any of the benefits or technology. Yet the government forces that carry on this clandestine operation are the heroes.

There wasn't much mention of the common man in Star Wars, outside of the bar scenes, but there again the main characters who were engaged in private commerce were depicted as selfish, greedy, unreliable and eventually saw the error of their ways.

We have been sold a vision of a Utopian future without free markets, without capitalism, without the free association of independent individuals. Of course the message is subtle and packaged with lots of explosions and drama sprinkled with comedy, but it's there and it's effective.

We are reaching for Never Never Land; a future that will never come to pass because the fact is that an economic system based on resource allocation determined by an elite group, even a democratically elected elite group will never achieve the efficiency and genius of a system based on resource allocation by the cumulative effects of free individuals making voluntary decisions in a free market.

If we truly want to go where no man has gone before, we're not going to get there in a government chartered bus.

Monday, October 27, 2008

What's the next phase? Reinstate the Draft?

I'll save the preface for the novel. Since this is blogworld, I'll just give you the trailer.

I believe what Biden was referring to in his statement that the world will "test" Obama and it may not be immediately evident that his response is right, means they're planning on reinstating the draft. They have the solution. Now they just need a crisis. If I had to take a guess, I'd say center stage will be Indonesia (again, I'll save the why for the novel).

Why the draft? We've got to instill in the young'uns a sense of duty to country, a cause bigger than themselves, discipline, respect for authority, etc. You can't run an efficient collectivist state with everyone running around looking out for themselves all willy-nilly. But what about those who are opposed to violence and the military? No worries. They can sign up for mandatory community service. They'll still get uniforms and serve society as directed by their superiors.

It will be sold as an essential for national security as well as a jobs program to "get the economy back on track". Education credits will be part of the package as well as helping to re-establishing traditional values in the young people.

Think I'm nuts? Maybe, but just for yuks, bookmark this and check back around June of 2009.

Tuesday, October 14, 2008

RIP Capitalist America

I don't think I'm being melodramatic when I say we're witnessing the end of the United States of America as a capitalist country. The recent action of our government, lauded by both major parties, reveals a total lack of faith in the free market. They all say they hate to do it, as they drive the knife in deeper.

Instead of investigating and prosecuting the culprits in the sub-prime loan debacle, taxpayer money was used to bail them out. The government took control of the two largest mortgage companies in the country, the company that insured them and is now taking ownership in the banks. They already control your utilities, your access to information, in some places, even your trash disposal. No worries, you can still go to Walmart and buy something nice with the allowance you'll be left after taxes. Barak Obama is 14 points ahead in the polls with just 3 weeks to go and has made no secret of his plan for wealth redistribution. A liberal controlled House and Senate are chomping at the bit to help him implement it. Not that John McCain is any kind of champion of free enterprise. At best he may have slowed the train down a bit.

Next the government will take control of health care. Why? Because the American people are screaming for it. Once your neighbor's premiums and benefits are directly tied to your personal behavior (through nationalized health care) there is no limit to the regulation and restriction that can be justified in the name of the greater good.

Politicians have been dividing us into groups and buying our votes with more and more promises of free stuff. We've been lapping it up like faithful mutts. Now we will get our just deserts: A new world order. A system in which failure is not allowed is a system in which excellence is not possible, and for the foreseeable future, that is the new American way.

Tuesday, October 7, 2008

Second Presidential Debate - Who Won Debate '08 Belmont?

Belmont University's Debate on October 7th, 2008, held in Nashville, TN had a clear winner.

John McCain won this won handily in two catagories. On style points, he had Obama on his heels the whole time. McCain's answers were clear, concise and included plenty of jabs at Obama. Barak seemed like a politician trying to kill 90 minutes.

But McCain also won in another catagory: Most outlandish new economic proposal. He suggested that he will direct the treaury to buy up "bad mortgages" and renegotiate them with the home owner, or more accurately, the current resident. Merry Christmas!

This may well get him some votes. But lets look at the Freakonomics at play here. It would actually benefit you, if you believe that McCain will be elected to not only get behind on your mortgage and make as little money as you can get by on, but it would also behoove you to do whatever you can to diminish the perceived value of your property. After all the governments going to forgive your current mortgage in favor of one at the current appraised value. You want that appraisal to come in as low as possible. For Pete's sake don't fix anything! In fact, you might want to throw a baseball or two through your own windows, stop mowing the lawn, park a car on blocks in your driveway, or better yet front lawn, create a few paint chipped areas, whatever you can do to make your home less appealing.

Obama's policies of tax increase on higher incomes, mandated insurance programs and a wide assortment of spending initiatives will strangle an already struggling business community. McCain's Christmas in November to home buyers will decimate an already decimated real estate market. Choose your poison.

Monday, October 6, 2008

The health care solution. Are you pondering what I'm pondering?

Ladies and gentleman, I've asked you here today because opportunity is knocking once again. The public is clamoring for affordable health care and the politicians are pining to give to them. Everyone is looking for a system that will enable each participant to contribute $5 and draw out $500 and by golly we're going to give it to them.

First, we'll get legislation passed that requires everyone to purchase health insurance. We don't want to have the government provide the insurance directly. That would look too much like socialism. We've got to dress this thing up so it looks like a free market. We'll have private insurers sell the policies. They'll have to cover everyone, regardless of income or pre-existing condition. The government will provide subsidies to those who can't afford it. In order to reduce the risk to insurance companies we'll set up a Government Supported Private Entity, a Health Care Insurance Funding Authority. We'll give it a catchy name like Hannah Fay.

Hannah will buy up policies from the insurers. The insurers will simply sell policies and administer claims, which will paid by Hannah, through them, to the providers. Hannah will bundle the policies together and sell bonds backed by the premiums to raise operating capital to pay claims and subsidize more low income policies. We'll sell the bonds to a new kind of financial institution, which we will help create: Health Care Investment Banks. These HCIB's will bundle the bonds and sell shares in them. We'll call those Health Care Backed Securities or HCBS's. These HCBS's will be sold to other financial institutions, pension funds, sovereign wealth funds and the like. The risk will be spread so thin, it'll hardly be noticible.

Our roles? Advisors, consultants, investors. Keep away from the cameras. Stay out of the news. I know what you're thinking. This can't possibly work. Well, that depends on your definition of work. There will be Congressional oversight, but don't worry about that. Politicians are elected on emotion. Most of them wouldn't know a proper balance sheet from the supply side of a mule. Just make sure they get their due in contributions. As for the Wall Street boys, the important ones know the game. They'll get out in plenty of time. Their replacements will be lulled in by huge salaries and bonuses. It's kind of like executive hot potato. It'll be many years before anyone figures out the HCBS's aren't worth the paper their printed on and the health care system doesn't actually have any money. I'll have you out well before then.

Alright, we've got work to do. Set up meetings with your respective politicians, activists and friendly media and let's start leaking this idea out there. Remember, don't attach your name to anything. Present it as something you heard from someone else that you think could be worth looking into. Let the camera junkies do the rest. This meeting never took place. Good luck everyone. This could be the greatest thing since Cap and Trade!

Sunday, October 5, 2008

What's Russia Up To?

Was Georgia just a test? The behavior of Russia in the aftermath of its invasion of that country is anything but conciliatory. Now Russian state television is airing a documentary promoting the idea that the U.S. government was behind 9/11. Why would they go the extra mile to stir up anti-American sentiment among their own and around the globe?

If Georgia was a test, the Russians have to be very encouraged at the results. The west made a lot of noise, but in the end, did nothing. The world is facing an economic slow down. US forces are spread thin, Russia has made a bundle on soaring oil, but prices are dropping and the whole world is looking for alternatives. If they were dumb enough to make some sort of outlandish land grab, now would be the time. I'm confident they're dumb enough.

I'm not well versed enough in the current geopolitical situation in their neighborhood to have any idea what they have their eyes on, but my "spider sense" is tingling. Maybe they'll just go after the rest of Georgia. Maybe something bigger. Ukraine? Poland? Alaska? I just hope our spooks are working over-time on this.

Wednesday, October 1, 2008

Bi-Partisan Robbery

A parade of senators, Republican and Democrat are congratulating themselves and each other tonight for passing the $700 billion giveaway to "save the economy". They did throw the common folk a bone in the form of some tax relief. I guess that makes it all okay.

You may be unfamiliar with the meaning of some of the terms and phrases being tossed around in reference to this crisis. Let me clarify some.

"Sub-prime mortgage" - Loans made to people for more than they could possibly pay back, secured by assets that are now worth much less than the loan.

"Mortgage Backed Securities" (MBS) - Essentially, shares of the above mortgages, sold to banks and investment institutions in large bundles.

"The credit markets are clogged" - The banks have no cash. They spent it on these MBS's which had been carried on the balance sheet as "cash equivalents". The problem is, nobody wants to buy them so they aren't really cash equivalents.

"We must free up the credit markets" - We're going to buy these shares of subprime mortgages at a price pulled out of thin air by Henry Paulson.

"We will sell these MBS's back to the open market to redeem the taxpayers' investment" - We're going to sit on these things until the heat is off.

"Doing nothing is not an option" - Doing nothing would cause the markets to take their natural course, exposing the whole convoluted scheme that caused this mess. Politicians would be voted out. Lawsuits would be filed. Voters would be very angry if the truth were to come to light. Best to let it fester for as long as possible.

Yes, Republicans and Democrats have come together in an unprecedented manner to cover their collective behinds. Some voted against the bill, but only after its passage was assured. No member of either party made a serious effort to put a stop to this. I for one will no longer vote for the most competent stooge or the lesser of two evils.

Let me make this absolutely clear for those of you who haven't yet caught on. Your money will be given to banks, so that they can loan it back to you. You will pay your money back to the bank with interest. After the shareholders, employees and execs get their cut, some of the remaining net will be paid back, not to you, but to the government who brokered the transaction. They are, at this moment, on national television praising themselves in the highest terms for pulling this thing off (assuming it passes the House) because they are now 100% convinced that we are indeed, just as stupid as they've always hoped.

Tuesday, September 30, 2008

The Day the World Didn't End- No Bail Out, No Worries

Well, we were told two weeks ago that we were days, maybe hours from a total collapse of the world's financial systems if we didn't immediately cough up $700 billion to overpay for bad loans. The bill failed and the world continues to turn. The market is actually up 450 points today, bringing the day net reaction so far to a 3% drop in the Dow, which, given current economic conditions, is probably still a bit over priced.

Maybe traders believe a bail out is inevitable. Maybe the reality is that credit's going to be tight for a while, some companies will fail, some wont, but we'll get through this with or without a raid on the treasury.

Pundits continue to spew that the public just doesn't understand. The public understands, they just don't care. The bank that's been raising their rates and putting the squeeze on them for months is begging for a bail out. Excuse me for not panicking. Alternatives have been put forward. Some have suggested offering a capital gains and income tax holiday on homes purchased in the next six months. That actually makes sense. It's lack of home sales that's at the base of the problem, so stimulate home sales by increasing the potential profit margin. It wouldn't cost the government a dime, since they weren't going to see any tax revenue from unsold homes anyway.

We have to clean up this mess before we rebuild. This is not 1929. Information, ideas, resources and talent flow more freely now than at anytime in history. We are well prepared and able to deal with a market downturn. As long as the system is perceived as fair, just, transparent and consistent, we can weather this storm and come out stronger. If the government steps in and changes the rules every week, all bets are off.

Monday, September 29, 2008

Thanks Nancy!

Just when it looked like the Republicans had caved, Nancy Pelosi saved the day by insulting them on national television. Twelve Republicans that had stated they would vote for the bail out, changed their minds and voted against it. Maybe it was the wrong reason, but it was the right decision.

Administration officials are petrified that the the current financial system may collapse. I hope they're right. We need a new one.

Congress may yet cobble together a more politically acceptable raid on the treasury, but the political atmosphere points to gridlock, at least for a little while. This mess needs to be brought out into the light of day. The people need to know what Washington has been up to for the past couple of decades. If it takes a few years of hardship to clean house in DC, so be it.

Sunday, September 28, 2008

The Deed is Done. Bailout Agreement Reached

Well, it looked as though Congressional Republicans were going to step up and stand on principal, but as it turned out, they moved a couple of commas around and pretended they looked after your interests. The bailout agreement has been reached and $700 billion tax dollars are about to be given away.

Of course, the healthy banks aren't going to participate. Better to absorb the loss than face the tax and equity consequences of participating in this rip off. The government will get bogus paper, issued by the now government owned Freddie and Fannie, by giving cash to the most incompetent lenders in the market. One of the stipulations in the bill is that the government renegotiate the loans that back this paper. In other words, they've been ordered to take steps to immediately devalue the investment they just made. If you are a mortgage holder and are not behind, you keep the deal you have. If you are in default, you get to negotiate a better deal. What do think that will do to the mortgage market? The feds get warrants in the companies that do participate (again, the weakest in the industry) and they'll have you believe we're all going to come out ahead on this venture.

They may be able to hide the losses since they now will own both the issuing authority and the bogus paper they issued, but you will NEVER see a return on this investment. Recall the Savings and Loan bailout was supposed to cost us around 50 billion dollars. In the end it cost 150 billion and that involved hard assets. There are many more middle men in this deal. Lawyers are going to make money. Taxpayers are going to get squat.

It was all designed to hide the fact that the government essentially ordered the give away of homes. Obama said today that the whole mess "started on Wall Street". Wrong. Wall Street is where it ended. They were the patsies intended to take the fall from the beginning. It started in DC. Now they're all laughing, all the way to the re-election campaign. They not only got away with it. They're going to be hailed as heroes for it.

The Community Reinvestment Act's Role in the Economic Upheaval

The Community Reinvestment Act was passed in 1977 as a response to discriminatory lending practices of banks and investment institutions. It was apparent that being a minority automatically lowered your credit rating and something had to be done to address it. The act tied the performance of banks in meeting the lending needs of the communities they served to access to deposit facilities and approvals for mergers and acquisitions. Mortgages could be insured through and sold to government sponsored entities, The Federal National Mortgage Association (Fannie Mae) and The Federal Housing Finance Agency, (Fannie Mae).

In 1995 the bill was revised to encourage more lending to low and moderate income borrowers. Freddie and Fannie were permitted to hold back just 2.5% of their investment outlays as collateral, vs the 10% requirement for banks.

The scheme as a whole set up a system whereby I could make a loan to you today, sell it to Freddie later, and be off the hook should you default on the loan. This of course encouraged lots of new lending, lax standards and less effort on validating borrowers claims on income, employment and assets. Institutions that were not covered under the CRA saw the massive amounts of cash flow being generated and followed suit, even though they had no implicit guarantee of a government bail out should things go south.

The pickle we're in now isn't the result of increased lending to minorities. It's the result of across the board lack of due diligence in lending encouraged by a bogus guarantee against failure. The problem was real, but the solution was flawed. Instead of developing real anti-discrimination standards that could be objectively measured by comparing approval rates of individuals in similar income, and asset brackets, discrimination was determined by how much money you invested in a particular neighborhood. The proponents tried to dilute the risk by having government sponsored entities buy, repackage and sell the loans in the market. I guess the idea was that if it all came crashing down, one could blame greedy Wall Street investors, since that's who the ball would ultimately be passed off to.

It's a government mentality similar to the thinking behind Social Security and soon, government health care. Of course the math doesn't work, but by the time the general public catches on, it will be "too big to fail". They'll get on board a massive government cash infusion (which will ultimately cause rampant inflation) and everything will be hunky dorey (at least until the authors are long gone).

I hope we learn the lesson that injustice and incompetence cannot be remedied by simply throwing money at them. Real, objective, measurable solutions must be developed that actually address the problem.

Saturday, September 27, 2008

McCain's "Read My Lips" Moment is Upon Him

Conservatives and Capitalists have had a tough time embracing John McCain. There is a general feeling that he either doesn't really understand or doesn't support their general principals. He was able to sway many with his choice of Sarah Palin as his running mate, but what's going on right now will overshadow all of that.

McCain has made a great show of waving a pen around and stating that he will veto any pork barrel bills that come to his desk and "make the authors famous". Yet he's about to be a party to the biggest pork barrell spending bill in the history of the universe: The federal bail out of failing banks.

Democrats tend to stay loyal to their nominee regardless of how they vote or what kind of trouble they get into. Conservatives and Capitalist within the Republican party are conservative and capitalists first and will not support a Republican they view as ignoring their core beliefs. You can ask George Bush Sr. about that one. After his famous "Read My Lips, No New Taxes" pledge, he was convinced to sit down with Democrats and hammer out a new tax increase plan. His second term was gone as of that moment.

Conservatives and Capitalists will not vote for the Democrat. They will either vote third party or not vote if this bail out thing passes with McCain's support. Yes, we would rather see the country fall into depression than see it abandon free market principals just because things got tough. We're funny that way.

If McCain doesn't throw himself in the path of this bailout and do everything in his power to stop it, this election is over as far as he's concerned. If he doesn't understand that, he doesn't understand his base. Depression doesn't scare us. Obama getting elected doesn't scare us. Being in any way connected to the nationalization of private enterprise is something we simply will not do.

Friday, September 26, 2008

Who Won Debate? Not Us

Okay, maybe not a great debate, an adequate debate? Alright, let's just call it a debate. If you were firmly in the corner of one candidate or the other before tonight, I doubt you heard anything that changed your mind. If you were on the fence, it depends on what your priorities are.

I think McCain scored points on national security. He repeatedly used the phrase "Senator Obama just doesn't understand...", and at times made a pretty convincing case.

Obama did seem to be on the defensive more often than not.

Neither candidate scored any points with me on the economic front. Both agreed that a multi billion dollar bail out was absolutely necessary. It's a familiar refrain from those who pay lip service to free markets in good times. When things get tough it's always "I firmly believe in free market principals, but......." Followed by a big but.

McCain could have been the populist hero if he had gone to DC and simply squashed the whole bail out on principal. Main Street isn't afraid of facing the consequences of letting nature take its course. It's the suits who are petrified. McCain and Obama both came across as just another couple of suits. Ironically, McCain talked about how important it will be to reign in government spending as he simultaneously proclaimed his optimism and gratitude that a bi-partisan mass raiding of the treasury will soon be passed. Obama conceded he might have to scale back or delay some of his other social engineering projects until this one is done. Yes, we are about to elect yet another leader of the largest economy in the world who has no clue as to how it works and no faith in its ability to adapt.

Monday, September 22, 2008

Back in the USSA!, Will the Bail Out Fix the Economy?

Congress is about to approve at least 700 Billion dollars in government spending to bail out the banks and investment houses. Rules were waived to allow Goldman and Morgan to change their status to Bank Holding companies and access 24/7 "emergency loans" from the fed within just 5 days rather than the normal 30.

Several thoughts come to mind immediately. First, the blatancy with which the feds have totally dispensed with the rule book tells me they are in absolute panic and the situation is far worse than they're letting on. Second, do you really think that once they give these ailing corporations a giant cash infusion, these banks are going to turn around and make that money available to the general public? They're going to pay off their strategic network partners so that after the whole house of cards comes falling down and it's time to rebuild, they'll be in good standing. Next, what does the federal government do when the airlines and the auto companies come looking for a hand out? How about the truckers and anyone else that is in dire straits right now or in the near future?

The feds are scrambling to rebuild a perception of normalcy, probably because if there is a run on deposits, there is no way the banks or the FDIC will be able to cover it. They've all borrowed against and committed money that doesn't exist and if things don't turn around, everyone is going to know it. If it get's bad, triple and quadruple digit inflation is not out of the question as the treasury starts printing money as fast as the machines can handle.

In the best case scenerio, the economy has a quick recovery and the federal government experiences a net loss of a couple of hundred billion dollars. Even that puts the "drop dead" date for dealing with things like social security and medicaid much closer than it was a few weeks ago.

Tuesday, September 16, 2008 thunderous applause

In the beginning there was much liquidity. Credit was loose and easy to come by. Home buyers were able to get loans well beyond their income level’s ability to repay. No matter, housing prices were going up. You just refinance every few years until you sell.

Then the buying slowed down. Housing prices fell. Interest rates adjusted. Borrowers fell behind. Many walked away or foreclosed.

The mortgage broker made money. The firm that made the loan and resold it made money. The firm that bought that loan, packaged it with other loans and resold them, made money. At the banks that bought the packaged loans and financial instruments tied to them, executives made money. Even the ones who were fired, walked away with big paydays. Even the borrower got use of the home and/or any cash received from the loan they couldn’t repay.

So who lost? The taxpayer. Just as we were seeing the light at the end of the tunnel in government spending in Iraq, the feds stepped up and bought out Freddie, Fannie, then AIG. Now they’re enacting a plan to take the garbage off the balance sheets of the banks and dump it in the lap of the taxpayer. The nation’s financial system is being nationalized...and Wall Street cheers as perhaps the biggest ponzi scheme in the history of the world comes to a successful conclusion.

The politicians aren’t card carrying communists. They’re just in fear of their jobs, their legacy, losing the approval they so cherish.

Allowing the financial markets to reap the fruits of their misbehavior and poor judgments would have been ugly, chaotic, caused years of calamity and harship and would have been justice. Lessons would have been learned that would not soon, if ever be forgotten. We would have survived. We would have come out stronger. What have we learned now? That practicing good judgment, paying your bills on time, living within your means, generating real value for an honest profit is for chumps.

To the small business person who is making it in this environment, without a government bail out, at least you should recognize that you have outwitted and outperformed the best and brightest at Shearshon, Merrill, AIG, Freddie, Fannie and a host of other Wall Street legends. The government may not recognize your accomplishment. In fact, you’ll be paying the bill for this mess. But for what it’s worth, I salute you.

Where do we go from here? It’s hard to say. The universe rarely unfolds the way I'd like it to, but that doesn't mean you can't spot opportunities. In a few months, the government will have a bunch of real estate on its books that it's going to want to unload in a hurry. Unlike commercial ventures, they'll go as low as they need to go to get them sold. Similar to the RTC situation in 1991, there's going to be a fire sale on real estate. If you've got some cash in the closet, take advantage. Recall that in the early 90's, once the RTC unloaded its inventory, the market recovered quite rapidly. Then again, looking out twelve months is tough business these days when the rules are subject to change without notice. Who knows? They may decide to regulate home prices next near, or next week.

In any case, capitalism may be out as a national economic policy, but as a personal lifestyle choice, it's always available. Just be aware of the changing nature of the environment.

Sunday, September 14, 2008

The Mixed Message of the Fringe

I must say after viewing the pilot episode of The Fringe, I think FOX has a winner here.

The premise is intriguing. Science and technology have accelerated to the point that amazing discoveries will be made, or already have been, by people totally beyond the control of any government agency. In theory, a genius in his garage could come up with new science and knowledge that could make him or her the most powerful and/or dangerous person on the planet overnight.

It's both plausible and disturbing. Not just from the view that powerful new science could end up in "the wrong hands", but that the public could be convinced of the need for tight government controls on knowledge, information and research and development resources.

It's a real dilemma. More freedom = less security. More security = less freedom. Are you more afraid of science "in the wrong hands" or an overbearing government?

Personally, I prefer to take the chance that bad guys might get hold of dangerous knowledge, and instruct the government to control, pursue and contain the bad guys, not the knowledge.

Wednesday, September 10, 2008

Dumb and Dumber? Biden says Clinton might have been a better pick.

Less than 24 hours after Barak's now infamous "Lipstick on a pig" remark, Joe Biden emerged from the media shadows to tell a townhall forum crowd that not only is Hillary immensely qualified to be the President and/or Vice President "Frankly, she may have been a better pick than me.".

Clearly Biden was sucking up to Hillary supporters, but what he said was that his boss' first presidential level decision, the choice of vice president, was a mistake. This after Obama went to great lengths to convince people that his decision had nothing to do with any personal animosity toward Hillary or the fact that she's a woman. He maintained he thought long and hard and picked just the right guy. The guy he picked disagrees.

The McCain campaign has to be loving this. The hits just keep on coming. They need to be careful though. At this point they should switch gears and focus on the McCain message rather than continuing to spotlight the opposition. If they keep trying to hammer on Obama's campaign for its mis-steps, they run the risk of becoming the bullies. Nobody likes a bully.

When your opposition is in self-destruct mode, don't get involved. Just go about your business and let it happen. Are the McCain folks sharp enough to do this? We'll see. This election is still wide open.

Tuesday, September 9, 2008

The Obama Campaign, How the Wheels Came Off

Before the conventions Barak Obama held a slight lead in tracking polls. Although is VP pick was a total dud, he did manage to get a slight bounce out of the convention, but it was very short lived. With McCain''s surprise pick of Sarah Palin for VP and a television audience for his own speech that surpassed Obama's, the McCain Palin ticket is now leading by an average of 2.5% according to the average of major polls.

The next two months is a total uphill battle for Obama. His pick of Biden for VP disclosed a "run the clock out" strategy that depended on gaining and holding a lead after the convention. The big speech at Invesco was the crescendo. That's his wheelhouse; giving a well prepared speech to an enthusiastic crowd. Now the only major public events left are the debates, a forum he doesn't do nearly as well in.

If McCain had chosen Romney or Huckabee, I think Barak would have been in like Flynn. Biden could have played the pit bull at his debate and I think he would have come across looking stronger than either of those guys. Regardless of where you stand on the issues, Romney and Huckabee are not good sluggers in a debate format. With Palin, Biden's in a no-win situation. She's a fighter, the crowd adores her. He's in a box. The VP debate will be a non-event.

So it all comes down to the Presidential debates. Unless McCain makes a major gaffe, I've got to give him the advantage here for one simple reason: He has a sense of humor, Barak doesn't. This is a format McCain is very comfortable in after decades in Congress, and he knows how to take and throw verbal punches without losing his cool. He's also got a lot less to lose. Barak is trying to create a great story. McCain already has one, win or lose. If Barak looks desperate, he's through.

It doesn't help that clowns like, until recently unknown comic, Russell Brand (evidently the spokesperson for the Global Community) are out there making total asses of themselves in the name of Obama. The host of the MTV video music awards implored America to "elect Barak Obama for the sake of the world." before going on to make some very nasty, crude comments about Bush, Palin and Palin's daughter. Expect a lot more of that kind of thing. The Democrats made a strategic decision many years ago to embrace any loud and obnoxious group or individual and bring them into the fold. They represented votes the other side wasn't going after. Now they're stuck with them. If they sense this thing slipping away they will come out in droves. It should be very entertaining.

It all adds up to another case of the Democrats snatching defeat from the jaws of victory. All they had to do was not come across as radical loons and they blew it. They invested heavily in losing the Iraq war and somehow thought the sluggish economy would give them cover to raise taxes and implement new, massive government spending initiatives. As if that wasn't enough, they came out square against new oil exploration while gas was peaking at $4/gallon. Now they're rubbing more salt into their own wounds by viscously attacking one of the most popular political figures to come on the scene in my lifetime. They could have just said "good for her" and went after McCain. But, emptier heads prevailed, and the rest is history.

I always worry, at each election cycle that this country may take a hard turn toward socialism. After watching the events of the past couple of weeks unfold, I've been sleeping pretty well lately.

Wednesday, September 3, 2008

Death of a Status Symbol

Back in the day, the guy with the cell phone was cool. Having a car phone was super-cool. In fact I remember a guy I used to work with that had a phone with him constantly and the antenna conspicuously mounted on his car. We later found out that both were phony, but it points out the status that having a mobile phone used to provide. Then came laptops and blackberries. I guess the notion was that you must be important if you need to be "in the loop" at all times.

Now that information tech has become all-pervasive, things look a little different. I saw a man at the grocery store the other day with a Blue Tooth in his ear, take a call while he was checking out. The feeling that came across me wasn't so much admiration as pity. The poor guy can't have a moment to himself in the grocery store. Information technology was supposed to be liberating. You could work from anywhere. Even the beach! Well, as it turned out, in many cases that just means your break isn't really a break and your day off isn't really a day off. We aren't getting extra time at the beach, we're just bringing our work with us when we go.

Of course, this loss of "me time" is self inflicted. You certainly can use technology to your advantage. But when you can no longer enjoy the sanctity of your own car, whose advantage are your really serving?

I think the new status symbol is the guy or gal who walks into the room without the cell phone, or the blackberry; someone who plugs in when and if it suits them, rather than being at someone else's beck and call 24/7. If you want to use technology to improve your quality of life, make it your servant, not your master.

Saturday, August 30, 2008

Thank TABOR!

Colorado's Taxpayer's Bill of Rights (TABOR) has been much maligned, mainly by government officials and employees, for restricting their ability to raise revenues and mandating cuts in economically challenging times. However, when you compare the situation in Colorado to other states, our fiscal position is much stronger due to these restraints.

New York State is currently running a deficit between 5 and 6 billion dollars. The legislature has thus far agreed to cuts that amount to about $427 million. Hardly a solution. California's situation is far worse. Their deficit is at about $15 billion and there currently is no plan to fix it. Colorado's budget is in balance. While many people are unhappy about the cuts necessary to keep it that way, if our government had been spending like drunken sailors over the past 17 years, a balanced budget would be a fairy tale right about now, as it is on both coasts.

TABOR forces government to set priorities and make difficult decisions on an annual basis. They cannot promise the world and leave it to future generations to work out how to pay for it all. The welfare of a constituency is not directly proportional to its governments ability to raise and spend revenue. Find another way to get votes.

Friday, August 29, 2008

Sarah Palin, McCain's VP Pick

Barak and the Democrats put on a pretty good show in Denver. Although I disagreed with the general assessment of Hillary's speech (I thought it was pretty ordinary), Bill and Joe Biden did very well and Obama himself did a good job. His speech hit some points that weren't exactly on par with his previous campaign. He talked about eliminating government programs and personal accountability and responsibility. That was new and directed at mainstream America. He came out of the convention with a 6 point lead in the polls. McCain would have to make some news to get back in the race.

Make some news he has. He didn't play it safe and pick a Romney or a Huckabee for his VP. He went all the way to Alaska and selected 44 year-old, mother of 5, Sarah Palin. just 48 hours or so earlier, many Hillary supporters had capitulated and accepted Obama as their candidate. Suddenly, they're back in play. Palin, of course, will not appeal to those for whom liberalism trumps gender, but many in the Clinton camp are more concerned with breaking that "glass ceiling" than with universal health care. The pick will also stir up a demographic that has been largely inactive to this point: Republican women. There are activists and politicians at the national level, but at the grass roots level, Republican females have been kind of a "women's auxillary". Now they have a player in the game.

It's an interesting system we have. McCain and Biden come from the dynamic of those who spend decades working on their political careers, who may someday get a shot at the big prize. Obama and Palin represent an infusion of new genes in the political pool. Nobody would have bet on Obama for a presidential nominee 5 years ago and Palin was nationally unknown until very recently. Suddenly, if McCain were to win the presidency, she could very well become the Republican heir apparent. Both campaigns are a mix of fresh faces and the old guard.

It is refreshing to know that, no matter who wins the next election, the winning streak of "two old white guys" has finally come to an end.

Saturday, August 23, 2008

Blankets over Greenland - Dumbest Idea Ever d-guide1.html

the technology was developed to preserve ski hills. That makes sense to me. Perserving the ice on Greenland...not so much. I know, I know, we're all going to die if the fertile soil under the ice of Greenland is actually exposed and useable again, but it's okay. I've had a good run.

A better and easier idea might be to deal with the fact that the ice on Greenland is melting. Maybe come up with a life plan that doesn't depend on Greenland remaining covered with ice. Besides, in reflecting the sunlight, and thereby the heat, from the surface of Greenland, you're just redirecting it back to the atmosphere, where it will travel to some other part of the world and "global warm" somebody else. Isn't that a politically correct no no?

Obama Biden Ticket

Barak Obama's campaign did a great job of building up hype for the VP pick. Between the text message thing and making the world wait until Saturday morning, he had pundits everywhere on the edge of their seats.

The actual announcement was a bit anti-climactic. If you were looking forward to some bold new agent of change, I don't think Joe Biden was what you had in mind. It's a "do no harm" pick, that is, if he can hold his tongue for a couple of months.

From McCain's standpoint, Biden kind of neutralizes the whole cranky old man thing. McCain can get ornery sometimes, but Biden is just plain mean toward folks that don't see things his way, especially the "little people".

It is an interesting development that the biggest headliners at the convention, other than Barak, will be Hillary, Bill and now Joe, all three of whom have said that Obama is not qualified to be president, one of whom even called it a fairy tale. Now all three are eager guests in his church. Add that to the fact that Jesse Jackson actually had to apologize to Barak for a racial slur and you can see how the tables have turned on the established leadership. However, it's not really a "throw the bums out" dynamic. The old guard isn't going anywhere. They just have a new leader.

Monday, August 18, 2008

BBB Alert - Relentless Car Warranty Calls

The phone rings, the automated voice on the other end reminds you that your auto warranty is about to expire. Both consumers and local businesses have been inundated with these auto warranty calls. The companies are using automated dialing programs that call every single number (including cell phones and unlisted numbers). It doesn’t matter if you own a vehicle or not.

The messages give information that you can be removed from their calling list by pressing a number. However, the calls continue to come. Consumers have reported waiting for a human representative and asking to be removed from the list, only to receive more warranty calls. At least 4 or 5 different firms are calling with these warranty offers.

Some company representatives have become combative and rude when asked to put a telephone number on their “do not call” list. They often refuse to give any information about the firm they are working for as well. Other consumers who have reached a representative are barraged with questions about VIN numbers, Social Security numbers, birthdates, and other sensitive information before the agent will tell the consumer anything.

The BBB of Southern Colorado office was plagued by auto warranty calls as well, receiving upwards of 20 calls a day.

The BBB reminds consumers that you do not have to give out information to unsolicited callers. A legitimate company will give you full information, including a telephone number, address, and why they are calling.

Persons besieged by these warranty or other unwanted telemarketing calls are encouraged to register with the Colorado No Call List and the Federal Trade Commission (FTC) National Do Not Call Registry.

Consumers may not be aware that they can add or remove their residential, wireless, or fax telephone numbers.

If a company continues to call you after being asked to remove you from their calling list, you can file a complaint with the No Call agencies.

Colorado No Call List 800-309-7041

FTC National No Call Registry 888-382-1222

Friday, August 15, 2008

The True Face of the Enemy is Revealed

It's not the communists, the Muslims, not even the radical ones. It's not even the "secular progressives". Communists, extremist Muslims, Born Again Christians and progressives can all live peacefully in the same apartment building in most any city in the U.S. . The real battle is, and always has been, the rule of force vs. the rule of law.

The motley crew described above could co-habitate in downtown Chicago because in the eyes of the court, they are equal. No one can initiate the use of force on another with impunity.

The re-emergence of Soviet-style Russia illustrates the face of the rule of Force. Putin is no longer President, but he's still The Man. He still controls the goons. The Politiboro has given him and Russian defense and intelligence agencies the license to kill. That is, they are authorized to kill anyone who is deemed a threat to the country (like nosey reporters, people investigating the death of said reporters and unworthy political candidates). Russia has not only overrun Georgia in a very well planned out "rope a dope", but has actually threatened Poland with a nuclear strike.

The Russians are certainly not extremist Jihadists, but the underlying principal is the same. Instill fear. Rule by force. I've always thought the leaders of the Jihad are more gangster than religion. In Russia, gangsters also rule. The economy is largely controlled by an organized crime organization known as the Russian Business Network.

Rule by force cannot coexist with rule of law. Rule by force requires that there be those who are above the law, who are the law. The time is coming when the world will have to choose one or the other. Most of the world will choose not to choose, giving the upper hand to Rule of Force by default. Fortunately, history has shown it's not always just a numbers game.

The question at hand is, do we accomodate the Russian's desire for more territory and more control in the name of some semblance of order and non-confrontation, or do we call them out? I'm not saying launch the missiles...yet. I mean actions like those taken by Poland, announcing that they will house a missile defense shield, forcing the Russians to put their intentions on display. Maybe demanding that Russia be booted from the G8 or we leave the G8. We should take deliberate actions with no pretense that this is all some kind of misunderstanding, but that we fully recognize the game they're playing and we will not allow it.

We need to make clear to the citizens of Russia who have put Putin and company on a pedestal and turned them into rock stars, exactly what the stakes are here.

Wednesday, August 13, 2008

The Bad Guys Still Don't Get It

Iran's feeling froggy. Russia is flexing its military muscles again. It seems as though Putin and Pals are taking advantage of economic sluggishness in the West, as well as relative disunity, combined with windfall profits from good 'ole black gold.

Evidently, they believe that their failure to dominate the world in the past was due to insufficient military might or funding. Now they've got some money, built and bought some new toys and are chomping at the bit to make a new play for top dog.

The end result may take a while to play out, but it will be the same. A "smack-down" of epic proportions. Neither Russia nor Iran has the economic capacity to keep pace with the West in the long run. They are one-trick ponies. Oil will only take them so far for so long. Free markets and free people are not negotiable. We'll spend every last dime preserving them, and when we run out, guess what? We'll make more.

The difference is in what we're playing for. Russia and Iran seek the greater glory of....Russia and Iran. Freedom loving individuals seek to be left alone to do their thing to the greatest extent possible. The latter is a much greater individual motivator.

Where China goes from here is an open question. At least they seem to realize the future lies in economic policy and strategy, not in military show-boating. Like lawyers, a strong military is something you have to have because everyone else has one. It is not the means to achieving prosperity. They are a means of protection, not of production.

Friday, August 8, 2008

Axe Body Odor Study - "People Stink"

Perhaps the best example of the power of mass manipulation is not any government conspiracy, but high heels. Somehow, marketers convinced women that they should walk around with sticks under their heels, and they've been doing so ever since.

Another premise that the general public has bought hook, line and sinker is that no human being should ever have to be subjected to the smell of another human being. The latest study was sponsored by, or course, a deodorant and body spray company. It measured odor "intensity" and suggests that now that smoking is out in bars and clubs, the odor of human is more prevalent.

Of course people should wash, wear clean clothes and not smell of aging bacteria, but the "odor of human" has only become a putrid thing due to the successful efforts of Madison Avenue. These are the same folks who suggest that the minute you feel the least bit uncomfortable you take a bubble bath, some pepto bismol, a pain reliever, some anti-depressants, it really doesn't matter what. Just buy something.

How much of the world's resources go into the attempt to reach the now established Utopian state of constantly feeling euphoric and smelling only pre-approved flowery smells while looking like Angelina Jolee or Brad Pitt?

Wednesday, August 6, 2008

Deja Vu, the Carter Era and the Obama Era

The similarities are almost spooky. Energy prices are high. People are worried about scarce commodities. The economy is struggling. These are all cyclical issues and not surprising to see come up again. The eerie similarity between the Carter Era and the Obama Era is in the response to these issues.

Carter, the media, the left, hollywood and much of the public believed the answer to our woes was to turn down the thermostat, wear heavier clothing, use less stuff, essentially, get used to a lower standard of living.

Obama, the media, hollywood and interest groups are now recommending that we inflate our tires more, tune up our cars, drive less, drive smaller cars, wear sweaters, sort our garbage, consume less, essentially, get used to a lower standard of living.

It's similar to Mexico's approach to their economic woes. The government openly admits they don't discourage illegal immigration to America, because subjecting people to the incompetence of their government would be inhumane. They want to have power, but don't want to be expected to produce results.

It didn't work in the 70's. It wont work now. We certainly could just throw up our hands and lower our expectations and our quality of life, but this is still America. We just don't want to, and we don't have to.

It's ironic that the author of "The Audacity of Hope" is promoting hopelessness. Of course, those who do propose that we all make do with less regularly jet around the world in private planes, vacation all over the world, have at least one yacht, wear $3,000 suits and get $400 haicuts.

We aren't going to conserve our way out of this doledrum. We can be more efficient, but we will always want more, better, faster, cooler stuff. It's how we're wired. It's what we do. What we need from the government is to enable the free market and free people to make our wishes real. Just get out of the way.

Monday, August 4, 2008

McCain VP Choice - Steve Forbes?

Most of the names I've heard mentioned for McCain's choice of VP are "do no harm" choices. They aren't likely to get anybody real excited, but they wont cause a lot of controversy. Rice would be an exception, but he's not going to call on her because she's too close to Bush and doesn't want the job.

One that hasn't been talked about much, but that I believe would be a home-run, would be Steve Forbes. Some points to ponder:

Conservatives and Capitalists would be ecstatic. They've been reluctant to jump on the McCain bandwagon up to this point. With Forbes on the ticket, all that goes away. While the left would paint him as the ultimate corporate insider, I think most Americans concerned about the economy would be receptive of a very successful CEO.

He's been thouroughly vetted. He's run for president himself, has his own magazine and is a regular on TV once a week. Nothing about Forbes' positions is going to surprise or shock anyone. He can certainly hold his own in a debate and he's been speaking in public since he was able to talk.

As far as special interest influence, he's untouchable. He has more money than God. What are you going to bribe him with? Knicks tickets? I don't think so.

He compliments McCain well. Both have the "maverick" image going for them. Together they would present a ticket interested in actually solving problems and getting things done as opposed to "winning the news cycle"

I don't expect it to happen. I'm sure McCain's advisers are looking for a fresh face or a swing state pick. Sure would be nice if competence counted for something, but in politics, it rarely does.

A Bit of Persuasion for Domestic Drilling - Tell Congress to Vote

Although 70% of Americans favor more domestic drilling, the leadership in the House and the Senate wont even let the matter come up for a vote. Perhaps they need a "bit" of persuasion.

Here's the idea: Send your Representative and Senators a small drill bit in the mail, with the message "drill already!" Send one each to Nancy Pelosi and Harry Reid as well.

You can find your Congress persons contact info Here.

I'd recommend a very small bit (1/16" or smaller). It will make the point without alarming anybody and you can tape it to your letter and mail it with a first class stamp.

Pelosi and Reid are protecting their party members by not having them record a vote against domestic drilling just before an election. They need to be reminded who they work for. Let's drill the point home.

Sunday, August 3, 2008

You Can Send 12 Million Illegal Aliens Back Home

They said it couldn't be done, but it's being done. The Center for Immigration Studies reports that the illegal immigrant population in the U.S. has declined by 10% over the past year, and that the vast majority of them returned on their own.

Stepped up enforcement, id requirements and employers more reluctant to take a chance on hiring illegal workers have simply made hiding out in the US less attractive.

Many people had suggested that tougher immigration enforcement measures were a waste of time and that there was no way anyone was going to round up 12 million illegal immigrants and send them all home. It appears that isn't necessary. All you have to do is make going home and coming in the right way more comfortable than staying here and hoping you don't get caught. At the current pace, the illegal immigrant population would be insignificant in 10 years.

Here's the article from Newsmax:

Study: Illegal Aliens Are Leaving the U.S.

Amid alarmed cries that the illegal immigration problem is spiraling out of control, the number of illegal aliens in the U.S. has actually declined since last summer — and many who have left have returned home on their own.

A report by the Center for Immigration Studies (CIS), based on Census Bureau data, estimates that the illegal immigrant population in the U.S. has gone down by 11 percent through May after peaking in August 2007.

That means the illegal population has declined 1.3 million since last summer, from 12.5 million to 11.2 million.

“The estimated decline of the illegal population is at least seven times larger than the number of illegal aliens removed by the government in the last 10 months, so most of the decline is due to illegal immigrants leaving the country on their own,” the report asserts.

The CIS maintains that stepped-up enforcement rather than the sluggish economy is leading to the decline in illegal aliens, which began before there was a significant rise in their unemployment rate.

The report points out that the fenced portion of the U.S. border has increased significantly in the past 18 months, the number of Border Patrol agents has more than doubled in recent years, and the number of detention beds used to hold illegals has more than doubled since 2000.

According to the CIS, the evidence “indicates that illegal immigrants respond to changing incentives and that many would return home on their own if they felt enforcement was a real possibility.”

The CIS also notes that when Congress failed to pass legislation last summer that would legalize illegal immigrants, the illegal alien population began to decline almost immediately.

If that decline were to be sustained, the illegal population would drop by one half in the next five years, according to the CIS.

The organization concludes: “It is sometimes argued that illegal immigrants are so permanently attached to their lives in the United States that no amount of enforcement would ever make a large share of them return to their home countries. The findings of this report . . . contradict that.”

The Christian Science Monitor in an editorial attributes the “success story” disclosed by the CIS study to “Washington’s wake-up call last summer to beef up enforcement, from plugged leaks in the border to cracking down on employers who hired illegal workers.”

The Monitor adds, “John McCain only reluctantly came around to the ‘enforcement first’ idea last year while Barack Obama opposes it. Perhaps this study will make them true converts.”

McCain vs Obama, The Home Stretch

As the presidential race enters August, there's been a change in the dynamics. Obama had been enjoying a lead ranging from 4 - 8 percent over McCain since June. Now polls show the race at a dead heat. What happened?

Obama is basically employing the same strategy he used in the primaries. He's staying vague, focusing on emotion and implyint that any serious criticism of him is based on race. He's trying to run out the clock.

The problem is too much clock and McCain is not Hillary. Obama had enough political capital to carry him from January to June in the primaries. He was able to turn criticism of him by the Hillary campaign into embarrasing retractions and apologies from the Clinon campaign.

He does not have enough political capital to coast from August to November. He's at a tie at this point. He's no longer the new guy. It's not about making a good first impression anymore. He actually has to change minds. To do that, you have to say something new and different. Additionally, McCain's response to accusations of racism is not apologetic, it's angry. Obama and his campaign are the ones apologizing for the insinuations or "clarifying" their statements. He's having to spend more time explaining that he didn't mean what he said than on his campaign message.

McCain has his own challenges. He's managed to get people to take a more critical look at Obama, but they are also going to want answers from McCain. His recent changes in position have made many in his own party a bit nervous. On the plus side, when he does change his mind, like on offshore drilling, he clearly states that he changed his mind rather than trying to insist his position hasn't changed when it clearly has. However, what he needs to learn and express is the difference between a senator and a chief executive. The President of the United States is not a member of any Gang of 14 or Group of 10 consensus building club. An executive has to be a product champion. There are issues and principals one doesn't comprimise on. He has shown that capacity on winning in Iraq. Now he needs to demonstrate it on energy policy, taxes, reigning in government spending, particularly earmarks. The Democrat base is far more forgiving of pragmatism than is the Republican base ("read my lips..."). If they're not convinced their candidate will forcefully defend their ideals, they'll sit this one out and wait for the next election.

Neither candidate has this thing in the bag. It's going to be a daily slugfest and should be fun to watch. With more media outlets and recording devices than ever in the history of US presidential campaigns, it should be the best reality show on TV.

Friday, August 1, 2008

The "Gang of 10" Energy Plan - Congress Covers its Butt before Recess

A crisis was brewing and Congress responded decisively and effectively. Not to the energy crisis, but to the fact that their constituents were going to give them an earful for going on 5 week recess without doing anything on energy strategy.

It was ingenious really. Because it was proposed the day before the summer break, no action need be taken on it. Congress can tell their constituents "we're working on it" without actually doing anything. The plan includes declarations that cars will be more efficient in 20 years, some new offshore drilling, grants for alternative energy research (which have a long history of producing nothing), carbon capture proposals, so we'll have more "toxic waste" to dispose of, "support" for nuclear energy and other feel good measures.

The plan was so weak that immediately after the press conference, crude went from down 36 cents to up $4. The impression that I, and obviously the oil market got was clearly that Congress is still absolutely clueless about the need for more energy supply in this country and that their primary interest is in getting re-elected.

A serious approach to alternative energy would not be to throw more research grants at it, but to actually purchase it. McCain's 300 million dollar battery contest idea is actually a good idea; reward results, not proposals. Simply declaring that cars will run on alternate fuels with no plan for getting there is useless. A better idea would be to mandate alternative fuel cars within the federal government's fleet and within new construction on federal buildings. The technology exists right now. There are several companies ready to manufacture thin film photovoltaics, urbine turbines, fuel from algae. All many of them need is commitments from customers.

If it were only an economic issue I'd say no government action is the best action, but we are funding our enemies war against us. Developing new sources of energy is a matter of national security and the need is immediate. The Gang of 10 proposal today and its widespread bi-partisan support shows that without a doubt, our government still doesn't get it. Don't subsidize. Don't tax. Don't regulate. Just buy it!

Wednesday, July 30, 2008

Ludicrous Obama Song Video

As a seasoned music afficionado I can listen to songs like this and many others whose message I don't agree with. I can even jam to them because they sound good. I'm secure enough with my convictions that no pop star is likely to shake them.

However, if Ludicrous thought he was advancing Obama's cause with this one, he missed the mark by a long shot. Calling people you disagree with irrelevant, gutless, or wishing them paralyzed may make for good rap lyrics, but it's not going to win anybody over. A national election is not a high school party.

Americans want a lot of different things from their president. What they absolutely don't want is a president who seems to have an ax to grind with the majority of the population. This kind of thing feeds exactly that sentiment, whether it actually fits Obama or not.

Oil Inventory numbers and Crude Prices

I can't help but think that most often, the market totally misreads the situation when they get new inventory numbers. When inventories are down that means the price should go up right? Not necessarily.

Market sentiment is the key factor. Just think of how you would behave if you were a purchaser/end user of the product. In a stable price environment, your going to buy what you need. In that case an unexpected rise or fall in inventory would signal an increase or decrease in consumption that's larger than anticipated. That's what happened a couple of weeks ago. The sentiment was that oil was near a short-term high, so you wouldn't expect big increases in inventory. Yet inventories increased, which means buyers overestimated demand. The price came down. Sentiment changed. There were more short positions than long in the futures market for oil. One would expect inventories to decrease. Why stock up today if you believe the price will be lower tomorrow. Today's numbers showed a drop in inventories. The market read this as an increase in demand and oil is up big.

I suspect reality will set in over the next couple of days and oil will be down around $120 or lower by close of business Friday.

Sunday, July 27, 2008

The Sun is Rising on our Energy Situation

Reducing our dependency on fossil fuels, especially from foreign nations, can seem an insurmountable task. However, it may not be as formidable a challenge as the news often makes it out to be. You have to keep in mind that the oil industry represents a huge source of revenue for millions of people around the globe. A rapid shift away from it is not in their best interest, as far as they can tell, so there is a significant portion of the population that would like to see such a transition delayed as long as possible.

The fact is, the vast majority of the electricity in the United States is not produced using oil. If we were to shift the power source for cars and other devices that currently burn fossil fuels, to electricity, it would not be a matter of developing radical new technology. It would simply be a matter of producing a lot more of the same. We know how to produce electricity, and new technology will make it much easier and less expensive.

The most promising advancements, in my opinion, are coming from thin film photovoltaics. These are flexible, easily integrated solar cells contained in plastics. Various companies are developing the technology including Ascent Solar, Konarka and InnovaLight. It's not quite ready for prime time, but it's close. It holds the promise of reducing the cost of solar cells by a factor of 10 to 20 times.

The real dramatic changes will occur when the technology graduates from the scientist to the entrepreneur. When products produced by these companies get in the hands of the business community, the transformation will be swift and substantial. These materials will allow one to turn ones roof, fence, siding into solar collectors. They are even working on fibers that could conceivably result in power lines that not only transmit, but produce electricity. These same fibers can be used to produce glass that can either be transparent or programmed to dim as they collect light.

The materials are so sensative, they can even produce electricity from indoor lighting. Talk about recycling! The possibilities are endless. Virtually any surface that is exposed to light can be transformed into a power source. I don't know that even the companies working on these products understand the potential. For example, one product I'm sure hasn't yet occurred to them is a pair of glasses, with a memory card embedded in the stem and speakers attached to the ear pieces. The lenses collect and supply the power, and transition to shades in bright light. The memory card contains all your favorite songs which you can enjoy at the touch of a button. The same general idea can be applied to make your glasses function as a camera, a radio, even a cell phone or a combination of all of the above.

You'll first see the technology applied to hand-held mobile devices, probably next year. You will no longer have to charge your cell phone, your camera, your ipod. Just leave them exposed to some light and you've got power. There are already manufacturers of things like awnings and roofing materials getting involved.

The oil patch will not go quietly, but its days are numbered. We'll still use oil for a variety of products and chemicals, but 20 million barrels a day is probably going to be history much sooner than the barons would like to acknowledge.

Thursday, July 24, 2008

The Internet, The Information Age and Children

Bill O'Reilly is among those who believes the internet and the information explosion in general has presented parents with new challenges that they aren't prepared to deal with and that something should be done about it.

I agree on the first part anyway. Children are exposed to imagery and ideas, on a daily basis, that many adults, as children, were not exposed to. How do you explain pornography, terrorism, gay rights and child predators to a 5 year old in a manner that's consistent with what they're seeing and hearing? Filters on computers and other media may slow the pace of bombardment for a time, but that will become increasingly difficult, if not impossible as the the availability of information continues to grow. Government deciding which ideas and imagery are permissible for expressing in public is a road we don't want to go down, not even for the children.

Our immersion in information is a very new phenomenon. It's easy to forget that the internet has only been in wide use by the public for about a decade. The pace of advancement in technology continues to accelerate. It's a lot for full grown adults to get their heads around. It's tough to help a child make sense of it all when you've never experienced it from their perspective. The best you can do is the best you can do. Our children and their children will be better qualified to deal with the situation and mentor generations to come.

Monday, July 21, 2008

Government Action on the Economy

There's a lot of hand wringing and finger pointing going on over the state of the economy. Housing is still in trouble as is the banking sector, and business is generally slow across the board.

While it is time for the powers that be to take a good look at what they do and how it effects the markets, they should take some cues from history.

It will be a while before the events of the last few years and the coming couple of years will be carefully and more objectively analyzed. There are still aspects of the 1929 crash and the Great Depression that are vigorously debated today. Still there are a few things to remember.

You seldom see an analysis that says, the thing that pulled us out of the downturn was increased government regulation, or higher taxation, or restricting trade. There's a problem, maybe several, but I'll bet a dollar it has to do with the government trying to control too much, not too little.

I hope government officials can resist the temptation to grab headlines by offering more controls. Freedom is what fuels this train. What we need now is more fuel.

Saturday, July 19, 2008

Obama's Civillian National Security Force

The article below does a good job of summing what Obama said in my home town. I was shocked not only to find out about it, but that it didn't make the news here or anywhere else.

Ever hear of the Brown Coats?

From WorldNetDaily

By Joseph Farah

With all the reporters covering the major presidential candidates, it amazes me no one ever seems to ask the right questions.

For several days now, WND has been hounding Barack Obama's campaign about a statement he made July 2 in Colorado Springs – a statement that blew my mind, one that has had me scratching my head ever since.

In talking about his plans to double the size of the Peace Corps and nearly quadruple the size of AmeriCorps and the size of the nation's military services, he made this rather shocking (and chilling) pledge: "We cannot continue to rely on our military in order to achieve the national security objectives we've set. We've got to have a civilian national security force that's just as powerful, just as strong, just as well-funded."

Now, since I've never heard anyone inside or out of government use the phrase "civilian national security force" before, I was more than a little curious about what he has in mind.

between the lines Joseph Farah Obama's 'civilian national security force'
Posted: July 15, 2008
1:00 am Eastern

© 2008

With all the reporters covering the major presidential candidates, it amazes me no one ever seems to ask the right questions.

For several days now, WND has been hounding Barack Obama's campaign about a statement he made July 2 in Colorado Springs – a statement that blew my mind, one that has had me scratching my head ever since.

In talking about his plans to double the size of the Peace Corps and nearly quadruple the size of AmeriCorps and the size of the nation's military services, he made this rather shocking (and chilling) pledge: "We cannot continue to rely on our military in order to achieve the national security objectives we've set. We've got to have a civilian national security force that's just as powerful, just as strong, just as well-funded."

Now, since I've never heard anyone inside or out of government use the phrase "civilian national security force" before, I was more than a little curious about what he has in mind.

(Column continues below)

Is it possible I am the only journalist in America who sought clarification on this campaign promise?

What does it mean?

If we're going to create some kind of national police force as big, powerful and well-funded as our combined U.S. military forces, isn't this rather a big deal?

I thought Democrats generally believed the U.S. spent too much on the military. How is it possible their candidate is seeking to create some kind of massive but secret national police force that will be even bigger than the Army, Navy, Marines and Air Force put together?

Now, maybe he was misquoted by the Congressional Quarterly and the Chicago Tribune. I guess it's possible. If so, you would think he would want to set the record straight. Maybe he misspoke. That has certainly happened before. Again, why wouldn't the rest of my colleagues show some curiosity about such a major and, frankly, bone-chilling proposition?

Are we talking about creating a police state here?

The U.S. Army alone has nearly 500,000 troops. That doesn't count reserves or National Guard. In 2007, the U.S. Defense budget was $439 billion.

Is Obama serious about creating some kind of domestic security force bigger and more expensive than that?

If not, why did he say it? What did he mean?

So far, despite our attempts to find out, the Obama campaign is not talking.

At this point all I can do is enlist your help – and the help of every other journalist who still thinks the American people have a right to know the specifics about a presidential candidate's biggest and boldest initiatives before the election. I also want to ask radio talk-show hosts across America to start asking this same question. I have a feeling if others join our quest, we might yet get clarification on this proposal from Obama.

Who will Obama appoint to administer this new "civilian national security force"? Where will the money come from? Where in the Constitution does he see justification for the federal government creating such a domestic army?

The questions are endless.

But before we can hope to get to the specifics, we need much more in the way of generalizations from Obama.

Certainly there have been initiatives like this elsewhere – Cuba, the Soviet Union, China, Venezuela, North Korea. But has anything like this ever been proposed in a free country?

I have a feeling there would be more questions from the press if I myself had proposed the creation of something as preposterous as a "civilian national security force" than there has been about this proposal by the presidential candidate currently leading in most of the polls. I'm quite sure I would be hung out to dry as some kind of Nazi thug. Meanwhile, Obama makes this wild suggestion and it is met with a collective yawn from the watchdogs.

Help me out here. What am I missing?

Can I get a hand?

Friday, July 18, 2008

Jesse Jackson, The View and the N Word, Video

the report that Jesse Jackson was caught on mike and on tape using the N word has sparked a frenzied debate about the subject. This video from the view is a good example. You'll hear a lot of talk in coming days from linguists and social scientists about how the word has evolved as a response to oppression, to become a word of indearment or comraderee within the black community.

At one point Hasselback says to Whoopie that "we all live in the same world" to which Whoopie replies "no we don't, that's just the way it is."

The point is we want to live in one world. We're trying to establish a free marketplace for individuals. Creating and maintaining symbols and language that are commonplace in one culture and forbidden in another is an unnecessary barrier.

Quit analyzing and just find a new word.

Tuesday, July 15, 2008

The Cake in the Rain - Lyrics analysis

It may have been a commercial, maybe a bit of bumper music, I don't know. Somewhere I heard that ridiculous song "Someone Left the Cake Out in the Rain" a few weeks back and it keeps popping into my head on and off. Naturally, I decided a critical analysis of the lyrics was in order.

The premise is that there was this super fantastic, delicious cake and it was ruined in a rainstorm. The baker blames "someone" for the oversight and claims it took a long time to create and that they'll "never have that recipe again".

Let's look at the facts. First of all, if you're baking something that takes that much time and effort, how much additional time would it take to write down the recipe? Where did the baker get the recipe? Was someone standing there reciting it? If so, where is the keeper of the recipe now?

As for the finished cake, there are only two possibilities: People, or at least one person, had a chance to try some of the cake before it rained, or nobody tried the cake before it rained. If the former is true and it was truly a delicious, super-fantastic cake, it would have been commented on, talked about, seconds would have been requested. In short, people would have been very aware of the cake and someone surely would have said "Don't forget the cake" at the first sign of rain. That clearly didn't happen. So, if someone had tried the cake, and it still got left in the rain, it couldn't have been that good. If the latter is true and nobody had tried the cake before it got ruined, how do we know it was that great anyway? If the baker will "never have that recipe again" we can assume he/she didn't have it before. Why all the misery over the loss of a cake nobody ever tasted? In either case, the overall quality and therefore value of the cake in question was either grossly overstated or completely fabricated.

Finally there's the accountability issue. The baker of the cake; author of the song, is obviously very broken up about its loss. Yet, they refer to the person who left it out only as "someone". This indicates that he/she doesn't know who was responsible for the cake, or that nobody was assigned responsibility for the cake. The cake was clearly not as important to anyone else. Nobody else wrote and performed a song about it. If anyone should have taken responsibility for the care of the cake, it's the baker/author. The song should be "I left my cake out in the rain". Future cake loss for this baker/author can not be avoided until he/she is ready to take full responsibility for cake placement and storage.

Lessons learned? If you make something good, write down the recipe and back it up. If you can't delegate responsibility for cake safety, take it upon yourself. If a cake catastrophe does occur, don't whine about it. Go to the store and get another one. Maybe it wont be as good as the original, but I'm sure your guests will appreciate a mediocre cake much more than they'll appreciate listening to you go on about the loss of the first one.

Monday, July 14, 2008

The Pickens Plan - Revolutionary, even without the oil

You can debate the merits of The Pickens Plan all day. The revolutionary aspect is that somebody finally figured out you don't have to be a politician to advance ideas.

The Pickens Plan is basically a call to immediate action on the foreign oil dependency front, and specifically advocates more wind and natural gas use. Of course Pickens would benefit financially from such a move. He's positioned himself accordingly, one might say, putting his money where his mouth is. Pickens financial interests are not a secret, and they only illustrate that he believes in what he's advocating.

The approach is very like Ronald Reagan's in that he went around the media and the lobbyists and the politicians and went directly to the American public. The difference is that T. Boone Pickens is a private citizen. His plan is not partisan. It's a specific approach to a specific and narrowly defined issue. It's something anyone in either party could get behind or not without putting their party credentials in question. There is no appearance of back door deals. All Picken's deals are on public display and the public is his target. To indict the mechanics of the negotiation or debate you'd have to indict the American public.

I hope more celebrities and well-to-do Americans come to realize they don't have to be salespeople for an entire package, or philosophy or political party or candidate. One can advance one idea at a time, and one doesn't have to run for office to do it. There is financial reward at stake as well. It's great PR to be associated with a good idea without the baggage of being associated with an entire party or organization. The one caution: Pick your ideas wisely and don't try to "fool" the public. They don't mind being informed and influenced, but they don't want to be played.

The New Yorker Obama Cover

It was meant to satire the ridiculous image a lot of folks have of Barak Obama. The rumors that he's actually a Muslim, that he's not patriotic, that he's soft on terrorism, that he hates America.

The cover is a tease for a story that deals with mistakes the Obama camp has made, one of which is the failure to adequately dismiss these images.

When people on the right and the left complained about the tastelessness of the imagery, the New Yorker responded that their readers were sophisticated enough to get the joke. That may be, but the millions of other Americans who will be viewing it are probably not going to be quite as amused.

Ironically, the spotlight has been placed on the various scare mongering rumors, not by Obama's opponents, but by his supporters. The rumors don't come from any party headquarters. They usually start as some email crank, then get picked up by somebody on the left that finds it outrageous and plastered all over the news while they denounce it.

The Obama camp has done a lousy job of dealing with it. Whether it's been an organized strategy or just bad luck, the Obama campaign has been consumed with denying, denouncing and refuting rather than being focused on their message. They've been "Gingriched", a term I coined to describe the tactic that has run many a politician (including Gingrich) out of office.

Executive Order on Offshore Drilling Ban Lifted - Shocking!

President Bush today lifted a long-standing ban on offshore drilling that has been in place by executive order since 1990.

The thing that shocked me was learning that there was still an executive order in place since 1990.

If it took this long for GW to come around, how long do we have to wait ffor Harry Reid to see the light?

Does everyone in DC have oil stock?

Got Your Crash Helmets On?

Oil is still hovering around its all time high. Gold, Silver, Copper, other commodities still going strong.

Money has come out of equities and into commodities, which, ironically, will eventually depress demand for those commodities.

How does the market usually wind down such a situation? Well, money doesn't just have to come off the table or shift into different sectors. It has to go to "money heaven".

Before a significant turn-around takes place, look for the market to make up its mind that there's no good money to be had anywhere. The commodity bubble must finally burst. Stocks, oil, gold, silver, copper, all coming down substantially at the same time. All those accounting entries listed as "cash or cash equivalent" being dramatically reduced without an offsetting entry in another asset column.

Housing held up unusually long before that bubble finally burst. Commodities have done the same. The length of the cycle may have changed, but the nature hasn't. The contrarian thing to do would be to go into cash and wait for the inevitable capitulation. Experts will tell you the dollar is down and there's no reason to think it's going up any time soon. I think, given what I believe will happen to the dollar's alternatives soon, cash will be king again. Be in a position to take advantage of the bargains.

Wednesday, July 9, 2008

Jackson - Obama Video "I'm wanna cut his what off?"

Jesse Jackson was recently caught on mike and on camera (unbeknownst to him at the time) confiding that he wants to "cut his n#$ts off" because Obama is "talking down to black people, with the Faith Based....".

Translation: Jesse wants to take Barak down a few pegs. He has of course, apologized profusely since the videos airing and Barak has accepted. Ironically, exactly the situation Jackson never wanted to see.

I don't think Jackson's problem with Obama is so much about policy as popularity. He didn't want to see his own stature wane as Barak's rose. Now we actually have Jackson making very public and frequent apologies to Obama, just as many others have come to apologize to Jackson over the years. If there was ever a symbolic passing of the torch, that was it.

Monday, July 7, 2008

RNC Welcoming Committee - Organized Chaos?

A group of anarchists calling themselves the RNC Welcoming Committee, is planning to disrupt the upcoming Republican National Convention. This is a real head-scratcher. Isn't the formation of an organization, complete with leadership and spokespeople, anti-anarchist?

A successful demonstration of this magnitude requires discipline, organization, communication, coordination, none of which are anarchist strong points. Three of the groups spokespeople went on a local radio station in Minnesota and decried Republicans as money grubbing, war-mongering, racists who hate clean air and clean water and are "not nice people". Their call is sure to inspire lots of meth-heads in the area to come out and get themselves arrested while most citizens and business owners of all political stripes take advantage of the increased traffic of money-spending individuals who may or may not share their personal philosophies.

It should make for some good YouTube footage anyway.

Sunday, July 6, 2008

Obama 2.0

I had previously said that I thought the Republicans would face a tougher opponent in Hillary than Barak because Hillary's positions tend to change with the polls, while, I thought Barak was more likely to stick to the policies he outlined during the primaries.

Boy was I wrong. He's now indicating flexibility on offshore drilling and tax hikes, but the most notable shift is in Iraq policy. While he still says he favors a 16 month timetable for pulling out our troops he has revised his stance to say that actual timetables and troop levels will be determined by the facts on the ground and the commanders in the field. Where have we heard that before?

While this isn't going to earn him my vote,(after all it still makes more sense to vote for the guy who says he wont raise your taxes than the guy who says he will but probably wont) it does make me a little less worried about the prospect of an Obama victory. Bill Clinton had some massive spending programs and agendas that looked like horrible ideas. Fortunately, none of them passed. Bill was also a shape-changer. He was dogmatic when it suited him, but could change his position on a dime and make the audience think he was going that way the whole time.

Obama is looking much more old-school than new-politics. In the case of someone who doesn't support your views, old-school is good. It means he's more interested in gaining acceptance than advancing an agenda. It's bad news for those who do support his previously stated agenda. You're about to be cast aside like a free-market, limited government Republican.