Saturday, February 6, 2010

It's A Trick Question

Q.  What's the westernmost city of Poland?
A.  Chicago, Illinois

Over one million people of Polish extraction live in the environs of Chicago.  OS has visited factories there that are run in Polish. Polish neighborhoods, radio stations, food, churches...on it goes.

And, running to replace the disgraced Rod Blagoevich, Republican Adam Andrzejewski is visited by and receives the endorsement of none other than Lech Walesa, leader of Poland's Solidarity Labor Union, and later President of Poland. Between him, Pope John Paul II, Margaret Thatcher, and Ronald Reagan, the Soviet Union was totally outnumbered and outmatched. They never fired a shot, and brought the entire evil enterprise to its knees. 

Walesa stood up to the Socialist Powers That Be in Poland, and nothing was ever the same. He was awarded the Nobel Peace Prize in 1983, and his acceptance speech is an indictment of the latest awardee.

His career has had many ups and downs since those days, but he stood alone and changed the world. That should count for something. He's the last of the quartet from those days available to speak.

One gets the sense that his visit is about much more than a Republican primary. The man has something to convey to us.  The Chicago press studiously ignored the visit of the Nobel laureate, probably sensing he would not tell them what they wish to hear, speaking on behalf of a man they have reason to fear.

WALESA (via translator): The United States is only one superpower. Today they lead the world. Nobody has doubts about it. Militarily.  They also lead economically but they're getting weak. But they don't lead morally and politically anymore.  The world has no leadership.  The United States was always the last resort and hope for all other nations.  There was the hope, whenever something was going wrong, one could count on the United States.  Today, we lost that hope.

Friday, February 5, 2010

Meanwhile, Back On The Mexican Border...

Hope and Change are being spread far and wide, and we should all breathe a sigh of relief, don'-cha-know. Those poor Mexican peasants just want a better life for their families, so how could we get upset if they cross the border? After all, we're all immigrants from somewhere, right?

Well, this video came up on the OS radar today.  A note of explanations to preface it:

Hunters use 'game cameras' to scout out where the deer/turkey etc travel and at what hours.  A motion-sensitive camera is tripped, a digital recording is silently made, and can be downloaded, complete with date and time stamp.  Kinda' neat, huh Wally? Beats sitting day after day in a blind, freezing one's backside off.

It seems that some private citizens placed game cameras in some pretty remote areas along the border, and they captured images of a lot more than the local antelope.  These Mexicans have guns, as in Mac-10 guns.  Full-auto guns. A lot more than one would need for protection from snakes or harvesting a deer along the way. OS hears rumors that, well, bad people like drug runners pack this kind of heat.

I know I'd love to work in law enforcement, confronting these guys with my trusty 9mm Glock or .38 Smith and Wesson.  What could possibly go wrong?

But, not to worry! TheWan's budget eliminates Border Patrol positions, and removes funding for the border fence.  And Janet Napolitano assures us everything is improving on the border. 

So, therefore, in the interests of everyone being civil, as our President urged this week, we must conclude that everything is improving on our southern border. To say otherwise would be, well, uncivil.

The Charge Of The Light Brigade: Or How Uncle Ben Helps Big Fish Eat Little Fish While Passing The Risk On To Us

OS kept noticing what looked like an arcane bit of news from last Friday. Karl Denninger noted it, and was howling about it, with this link to

As we monitored filings on Friday afternoon, we wondered why EDGAR seemed unusually sluggish. But it wasn’t until late Friday that we realized why: Blackrock (BLK) had done a massive document dump on Friday afternoon of 13G filings related to its acquisition of Barclay’s Global Investors.
We counted over 1,800 13Gs that Blackrock dumped on Friday, which explains why EDGAR might have been a tad bit pokey. The stream started at just after 2 p.m. est and didn’t let up until just after 4:30, when the last one, which reported a 6.5% stake in Vodafone came in. For those less familiar with the 13G, since we don’t often write about these filings, it’s a requirement when ownership exceeds 5% of the outstanding shares. With few rare exceptions, these filings represented new positions for Blackrock since we only counted 11 amended 13Gs, which in itself seems very surprising, given the long list of stocks.

At least a 5% stake in 1,800 publicly listed firms in the US. That's a big ole' hunk of the US economy, especially to consume at essentially one gulp, even for a big outfit like a Blackrock.

Where/how do they get that much cash?
Robert Peston, of the BBC, is as urbane as Denninger is passionate. Peston picks up the story for us.

In rescuing the global economy, the western central banks have rescued the traditional mega takeover.

I'm not sure whether King and Bernanke would describe this as collateral damage or just one of those things. But they have accelerated the corporate Darwinian process of reinforcing the market clout of the world's biggest and strongest businesses.

Because huge companies are currently able to raise record-breaking sums at very low interest rates by selling bonds to investors.

Kraft, for example, yesterday raised $9.5bn to finance its takeover of Cadbury.

And Berkshire Hathaway sold $8bn of notes to fund its acquisition of the railway group, Burlington Northern Santa Fe.

These are both among the 15 biggest corporate bond deals ever.

Kraft and BH may be paying a smidgeon more for this money than would have been the case if there hadn't mean a minor global tremor caused by the collapse in confidence in the ability of Greece to service its debt.

But with the interest payable on the different tranches at low to middling single-digit interest rates, this is cheap debt - cheap enough to finance the purchase of substantial companies like Cadbury with stable profits.

Here's a fascinating statistic: Bloomberg has calculated that US companies are spending the highest portion of bond-sale proceeds in more than a decade - or around 70 per cent - on takeovers and expansion.

Long story short, the money for all this is being ponied up by Zimbabwe Ben. And, we the US taxpayers (and our children and grandchildren) stand behind it all, with our money, our assets, our lives and labors, our hopes and dreams for the future. Because, if the wheels come off at Burlington Northern, for instance, the Fed and Treasury will ride to the rescue.

On our backs.

Is it any mystery that Warren Buffett showed up in Washington in late January to cheer-lead for Uncle Ben Bernanke?

Now, look again at the final lines of Peston's quote.  All that corporate debt is being floated to finance takeovers and expansion. Not expansion of manufacturing facilities or the like, but expansion of portfolios by firms like Blackrock.  And all that debt will have to be serviced, and/or at some point paid off or rolled over. And interest rates are fluid things. They are at historic lows.  Which way do you think they'll go?

Takeovers, also, almost invariably initiate the process of 'rationalization', or 'down-sizing', or 'right-sizing'.

In other words, jobs are shed, often at a prodigious rate, in the wake of a corporate merger. It's not immediate, rather takes place a year or two later. The press has moved on to the next headline, and most people, even the folks who lose their jobs and livelihoods, don't ever connect the dots on how/why that humming plant in that small town is now shuttered, why the deer, geese and turkey have taken over the property, and why the town and its people look so much shabbier. The cause and effect are too far removed, both in time and geographical distance. (Demagogues thrive in this sort of scenario, as the anger builds, but has no target upon which to focus.)

But, all the same, almost all that capital is consumed in transactions, not in creation of new businesses or products.  You know, the activities that create jobs and careers for families, and allow families to be formed, and communities to function.

And Ben Bernanke has the enthusiastic support of Barack Obama, and garnered seventy votes in the Senate. Next time TheWan begins yammering about 'jobs', head back and read Robert Peston's essay again.

Alfred, Lord Tennyson describes the situation aptly, in the opening stanzas of Charge of the Light Brigade:

Half a league half a league,
Half a league onward,
All in the valley of Death
Rode the six hundred:
'Forward, the Light Brigade!
Charge for the guns' he said:
Into the valley of Death
Rode the six hundred.

'Forward, the Light Brigade!'
Was there a man dismay'd ?
Not tho' the soldier knew
Some one had blunder'd:
Theirs not to make reply,
Theirs not to reason why,
Theirs but to do & die,
Into the valley of Death
Rode the six hundred.

Cannon to right of them,
Cannon to left of them,
Cannon in front of them
Volley'd & thunder'd;
Storm'd at with shot and shell,
Boldly they rode and well,
Into the jaws of Death,
Into the mouth of Hell
Rode the six hundred.

Friends and neighbors, OS fears we, and our descendants, are the 'six hundred', unless Heaven intervenes on our behalf (and he prays daily for this), and/or we show up again and again at the ballot box, at every level of government.

Doing The Poka-Yoke

Call it what you will, Murphy's Law, or Fate, or The Dark Side Of The Force: Stuff just goes wrong.

Every engineer has tales to tell of plans that should have worked, and ended up being spectacular failures.

These wry words on the subject come to us via the Harvard Business Review.

Michael Schrage makes great sense, and this article is well worth the investment of time and energy.

So much of what prudent people do is a daily dance of the 'Poka-Yoke'. They goof-proof the processes that could, if neglected, come back to bite them. They rotate the tires and change the oil on the family car, and get the brakes done before they're in dodgy condition, for instance. They count the sponges twice before the surgeons open up the patient, and twice again before they close. It's boring stuff that makes life function uneventfully.  The car doesn't end up wrapped around the tree, the patient recovers without complications, and goes home. Uneventful.

Stuff still happens, but so much more would come unravelled sans those prudent people in all corners of the culture.

Three (subdued, careful) cheers for uneventful, boring functionality.

A Green Shoots Nominee From Rush, Kentucky

OS admits to a certain grumpy relationship with academia.  He's always loved learning, and been impatient and abrasive with schools.  College days were not fun, and when he graduated, he drove out of town and didn't bother to look back.

On the other hand, there are people, a lot of them who live in the South, who think that colleges are somehow inherently evil, places where 'Commanihsts' and other low-lifes lie in wait to corrupt the morals and characters of their children.

Really, those people exist. OS knows a few, and has no patience with them. They sabotage their children's lives, especially the lives of their daughters. Usually, they do it in the name of some perverted version of Christianity.

They breed tragedy.

Then, along comes a story like this one.

Monica Marks, who grew up around a lot of people described in the paragraph above, is heading to Oxford as a Rhodes Scholar.  She hails from Rush, Kentucky (near Ashland, which sits in the mountains on the West Virginia border). Neither her mom or dad graduated high school, and went to a church that 'discourages pursuit of a college degree', as the article politely states.

In other words, her Dad looked the local church culture in the eye and said, 'Hell, no! This kid is going to college, and I'm gonna do what it takes to get her there and beyond!'

Monica escaped. And her story may give a few other kids the courage to do the same.  No one in that part of Kentucky will be able to claim that 'it just can't be done', 'cuz Monica went and did it! The preachers will rant, and the parents of the girls who dropped out of school at sixteen to start having babies will gossip and fume.

Let 'em. Monica escaped!

Undoubtedly, Monica will teach, for at least thirty years. And write. And mentor kids like the kids she grew up with. She has the potential to affect thousands upon thousands of lives for the good.

Kudos to Monica, her high school, and the University of Louisville. 'They all done real good', to use the local dialect.

But the Green Shoots nomination goes to Jesse Marks, who supplied his girl with books, and supported her in her quest by selling janitorial supplies,  and didn't care what the local fundamentalists thought of him.

His courage will bear fruit for the entire century.

Thursday, February 4, 2010

If CBS News Is So Utterly Wonderful, Popular, Trusted, Trustworthy...

why has it been bleeding money profusely, and is now laying off it most experienced staff?


Then there's the matter of the USD 300,000 paid weekly (that's like 14 million a year) to anchor-babe Katie Couric.  Maybe, since ratings are cliff-diving, she deserves some attention at corporate.

Just sayin'....

Betcha if they sent her on her way, and put the word out that the job was available at, say, 600 k a year, they would have a flood of great resumes and auditions reels.

Just sayin'...

You know, that uncritical cheerleading for Hopey-Changey may just be coming back to bite them.
People have the ability to change the channel at 6:00 pm Eastern Time.

Or just turn the silly tube off when CBS news comes on.

Call in The Donald for a day.  He'll set the girl straight.

Three Zombies, And One Who Isn't

Woke up, slurped some coffee, and saw the bizarre story of the L.A. 'BlingRing'--bored teenagers who broke into movie stars' homes and cleaned them out, just because they could. Millions of dollar of stuff.  Just because they could. You know, like bankers and banana-republic tin-hats.

Little George Stephanapoulos was a bit incredulous as he interviewed this kid, who had obviously been carefully coached by some expensive legal talent. Subtext--'Yes, of course I never grew a conscience, but I'm much too pretty to go to jail!'

George has no complaint. He got his start parsing language and spinning for Bill Clinton. He shouldn't feign surprise at the inevitable result of his earlier activities.


OS, in a moment of weakness, took on the job of helping a teeny-tiny not-for-profit out with some adminstrative tasks. In Sunday School as a child, he was told he'd get extra stars in his crown when he meets his Maker, if he was nice to folks.  Every little bit helps, given his track record....

So, twice a year, he takes a huge stack of papers and checks to a bank in Nashville, borrows a conference room, and he and his spreadsheet turn them into little stacks and deposit slips.  It's a pain, but it's temporary.

This bank is in a good location, except for the ghost mall across the street.  OS showed up at 11:30, and made his final deposit just before 4:00.  Of the three side offices where bank officers should be busily beavering away, lending and collecting money, only two had any signs of occupancy, and only one had the lights on. The 'service desk' front and center in the lobby hasn't been occupied in well over a year. One teller, a branch manager, an assistant.  OS was doing his thing with stacks of paper, and noticed that nothing was happening out there. No customers walking in or driving up. Phone barely rang. Employees stood around and shot the breeze about cars, internet dating sites, family, etc.

Finally a few random customers...two retirees with pension and social security checks to deposit. One brought his dog and pics of his old custom car, and joined in the general palaver. He was lonely, and they were pleasant company. A couple of retail employees cashing paychecks. And the guy in the conference room occasionally emerging with a deposit slip.

It was eerie. Nothing is really something, when it's happening at the branch of a pretty large regional bank.


Chatted with two friends at church supper (it's a Southern Thing). One teaches at university, another at an exclusive private high school. Both were comparing notes on students and families, and a general theme emerged. They are dealing with a lot of people who are intent on 'gaming the system', to appear to be outrageously over-achieving while all they are doing is competing, by hook or crook, for high standardized scores. 

No real intellectual activity happening, just zombie students.

Zombie banks.

Zombie teen-aged felons.


But here, by contrast, is someone who definitely has embraced life, the opposite of zombie-dom.

Enjoy Christopher Parkening, and take courage.

Charts Can Be Fun, Sometimes...

The ever-droll Jesse shares a vivid graphic with us all.

The Tax Story That Reuters Spiked At White House Request

OldSouth just loves Junior Deputy Accountant!

Whoodathunk that anyone could make the Dismal Science into a truly funny running narrative. This LeftCoast lady does it, and she is not for the prudish or faint of heart. A heartfelt 'Whoo-Whee' sent in the direction of Miss Adrienne, the intrepid.

She shares with us the Reuters story that the Obama White House spiked, for fear that the truth of their intentions might see the light of day.

All it does is remind us what happens the day after the 2001 tax cuts expire. Which Obama plans to do, and hopes no one notices.  

To quote Dr. Evil:  'Riiiiigggghhht!'

They do well to fear this news escaping.

The publication of that final little bullet point below surely will make Hopey-Changey's blood run cold. They might tumble to the fact that he's planning to screw everyone, everywhere, forever.

And, like Reuters, make anyone who dares talk about it sit down and shut up.

So, here's the article.  If it were to find it's way into the inboxes of your colleagues, friends, and family in the morning, well, golly-gee, it might jest get some folks all riled-up. Whaddayathink?

[Begin copy]

Backdoor taxes to hit middle class

By Terri Cullen – Mon Feb 1, 4:09 pm ET

NEW YORK ( --The Obama administration's plan to cut more than $1 trillion from the deficit over the next decade relies heavily on so-called backdoor tax increases that will result in a bigger tax bill for middle-class families.

In the 2010 budget tabled by President Barack Obama on Monday, the White House wants to let billions of dollars in tax breaks expire by the end of the year -- effectively a tax hike by stealth.

While the administration is focusing its proposal on eliminating tax breaks for individuals who earn $250,000 a year or more, middle-class families will face a slew of these backdoor increases.

The targeted tax provisions were enacted under the Bush administration's Economic Growth and Tax Relief Reconciliation Act of 2001. Among other things, the law lowered individual tax rates, slashed taxes on capital gains and dividends, and steadily scaled back the estate tax to zero in 2010.

If the provisions are allowed to expire on December 31, the top-tier personal income tax rate will rise to 39.6 percent from 35 percent. But lower-income families will pay more as well: the 25 percent tax bracket will revert back to 28 percent; the 28 percent bracket will increase to 31 percent; and the 33 percent bracket will increase to 36 percent. The special 10 percent bracket is eliminated.

Investors will pay more on their earnings next year as well, with the tax on dividends jumping to 39.6 percent from 15 percent and the capital-gains tax increasing to 20 percent from 15 percent. The estate tax is eliminated this year, but it will return in 2011 -- though there has been talk about reinstating the death tax sooner.

Millions of middle-class households already may be facing higher taxes in 2010 because Congress has failed to extend tax breaks that expired on January 1, most notably a "patch" that limited the impact of the alternative minimum tax. The AMT, initially designed to prevent the very rich from avoiding income taxes, was never indexed for inflation. Now the tax is affecting millions of middle-income households, but lawmakers have been reluctant to repeal it because it has become a key source of revenue.

Without annual legislation to renew the patch this year, the AMT could affect an estimated 25 million taxpayers with incomes as low as $33,750 (or $45,000 for joint filers). Even if the patch is extended to last year's levels, the tax will hit American families that can hardly be considered wealthy -- the AMT exemption for 2009 was $46,700 for singles and $70,950 for married couples filing jointly.

Middle-class families also will find fewer tax breaks available to them in 2010 if other popular tax provisions are allowed to expire. Among them:

* Taxpayers who itemize will lose the option to deduct state sales-tax payments instead of state and local income taxes;

* The $250 teacher tax credit for classroom supplies;

* The tax deduction for up to $4,000 of college tuition and expenses;

* Individuals who don't itemize will no longer be able to increase their standard deduction by up to $1,000 for property taxes paid;

* The first $2,400 of unemployment benefits are taxable, in 2009 that amount was tax-free.

[end copy]

Tuesday, February 2, 2010

You're So Tennessee If...

You are convicted of two counts of second-degree murder, serve five years before being paroled, and the State hands you back the medical license you surrendered upon conviction.

You then use this license to serve as a prescription-writing service for large quantities of pain-killers.

And don't get caught for years.

OldSouth began his ruminations last spring, when signs advertising 'wrestling midgets' began to sprout up in the little town where he visits the bank and post office. He had assumed, naively, he wouldn't see anything quite this ludicrous in his lifetime, so it seemed like a good jumping-off point.

Since then, we've had ObamaCare, Miss Nancy, and the Underpants Bomber.  Gordon Brown claiming to save the world, Obama getting the Nobel Peace Prize, Climategate,  the takeover of GM and Chrysler, AIG, Zimbabwe Ben, TurboTax Timmy, Goldman rising from the ashes, the takeover of Fannie and Freddie, Tiger Woods, Hugo Chavez, Tea Parties, AstroTurf, Sarah Palin on a book tour, ACORN.

And Joe Biden.

Did OS leave anyone out? Undoubtedly, yes.

But this one is truly, breathtakingly extraordinary...

And, Meanwhile, At NBC...

It HAS to be Bush's fault!

It's the only possible explanation!

Someone, quick, call Keith Olbermann.  He'll set everyone straight!

Air America's Unlamented Demise

It's management's fault.

It's the economy's fault.

It's the affiliates' fault.

It's Rush Limbaugh's fault.

Or, maybe, nobody wanted to listen to the HopeAndChange they were serving up.

Naaah, couldn't be that.

It's management's fault.

It's the economy's fault.

It's the affiliates' fault.

It's Rush Limbaugh's fault.

No, wait for it....


Whew, glad we cleared that one up....

Greg Mankiw And The Obama Spend-a-thon

Seems Dr. Mankiw escaped his mother's basement, with all his teeth and no visible tattoos.
He landed on his feet on the economics faculty at Harvard.

Here's his take on what Obama and Miss Nancy plan to spend over the next few years, compared to historical averages.

He includes a simple, but telling chart!

1. The President is proposing significantly more spending than he proposed last year: 1.8% of GDP more in 2011, and roughly 1 percentage point more each year over time.
2. Spending is and will continue to be way above historic averages.
At its lowest point in the next decade federal spending would still be 1.7 percentage points above the 30-year historic average. Over the next decade, President Obama proposes spending be 12% higher as a share of the economy than it has averaged over the past three decades.

No true attitude adjustment noticed as yet. Just posturing to appear populist.

Time for more attitude adjustment this November.

Simon Johnson Weighs In On 'Move Your Money'

Simon Johnson, former chief economist of the International Monetary Fund, is a professor at the MIT Sloan School of Management, a senior fellow at the Peterson Institute for International Economics, and a member of the CBO’s Panel of Economic Advisers.  He is a co-founder of The Baseline Scenario.

In other words, Simon Johnson is not some angry middle-aged guy living with his gun collection and Confederate flag in his mom's basement. He's not AstroTurf, as the White House and Miss Nancy would wish to characterize anyone who dares to disagree with them.

Simon Johnson says it's time to take your deposits and run from the big banks. And he tells us why, with an insightful look into our history.

But his real conclusion is the most insightful of all:  It's time to move your politicians.

I have no doubt, that somewhere in the bowels of the White House, Simon's picture graces a dartboard. 

Monday, February 1, 2010

A Success Story, Brought To You By People The Pundits Ridicule

It's not all bad news out there. 

Consider Northern Ireland's Wrightbus.

From the FT, earlier in January:

Last week, when London’s authorities revealed the company that would design and build a new bus for the capital, mayor Boris Johnson heralded the planned vehicles as “state of the art”.

But behind the proposed cutting-edge buses is an old-fashioned family business called Wrightbus. Its workers still make the vehicles, partly by hand, on the site where it was found­ed – in God-fearing Ballymena, the Northern Irish town represented in parliament by the Rev Ian Paisley, and known as the “buckle on the Bible belt”.

In keeping with its traditional values, Wrightbus has a church within its grounds, tithes money to tuberculosis wards in Uganda, still has a tea trolley, employs a welfare officer, offers loans to staff in difficulty and has always stuck to a principle of little or no borrowing. 

But, hold on folks! This success, in Paisley's old stomping grounds(likely at least someone in that plant voted for the man!)? You mean, it's not captive to the banksters? You mean, it takes care of its people?

It's not unionized?

It's not on government life support?

It employs craftsmen?

It hasn't moved to India, or China, or Mexico, to take advantage of the slave labor market?

Maybe it succeeds because it has steadily tread against the dominant cultural tide.

Green Shoots Nominee!

In Contrast To Cleveland, A Peek at Memphis

The Memphis Symphony Orchestra, in contrast with the Cleveland Orchestra, seems to be grappling with the realities of a changing culture.

This is a good thing, to borrow a phrase from Martha Stewart.  Management and musicians alike decided that the way to survive and thrive in the 21st century is to actually be of real service to the community, to actually become part of the warp and weave of local life. Again. Like they used to do, before they decided that were minor gods who needed only practice and perform, always and only under a union contract.

The first need is to play fewer concerts. In countless communities, large and small, the concert supply outstrips demand. Orchestras are burdened with contractual obligations that compel them to produce - laboriously and expensively - concerts without a ready audience. Fundraising and marketing resources are overstretched and stretched again.

The second need is for orchestras to define themselves less narrowly as concert producers and more broadly as education providers, engaged with schools, universities, museums, with the community at large.

Music blogger Joe Horowitz offers some good words on behalf of this approach, and has more good words from an earlier post as well.

Why does this matter? 

Well, let's assume we find our way through the economic maze, and five years from now, we emerge with a stable society that employs its people producing real goods and services, with healthy compensation, low taxes, civil liberties intact, etc.

We'll also want it to be a society that knows how to make music, write books, teach its children about Shakespeare and Bach, and remember that it stewards the cultural and spiritual riches of The West.

OldSouth's darkest fear is that we're failing at both big tasks, and wonders if we struggle with the first task in part because we failed so badly for so long at the second.

Sunday, January 31, 2010

Fran and Marlo Show Us How It's Done

Love and music, music and love. Two of life's great sources of joy.

Fran and Marlo Cowan remind us, at age ninety or so, after sixty-two years of marriage.