Friday, December 17, 2010

Lunch In Zimbabwe: HT Greg Mankiw

Greg Mankiw, an econ professor at Harvard, occasionally shares photos from colleagues and students in their travels. The pics from Zimbabwe, the poster child of Quantitative Easing, never fail to entertain. Or give one pause.

By the way, the price of milk, eggs, cheese, and other staples are beginning to climb rapidly on the store shelves. What happens to a culture with 20% unemployment and rising costs of staples?

We may soon find out. Jesse's post from this morning contains a detailed account.

The Reid Bend-The-Culture-Over-The-Table Omnibus Bill Appears To Be Dead. For Now.

Here's hoping the report is accurate.

Reported by National Review this evening:

Speaking now on the Senate floor, Majority Leader Harry Reid (D., Nev.) says he is “sorry and disappointed” to announce that he does not have the votes for the omnibus spending package. Instead, he will work with Minority Leader Mitch McConnell (R., Ky.) to draft a temporary continuing resolution to fund the government into early next year.

Reid says nine Republican senators approached him today to tell him that while they would like to see the bill passed, they could not vote for it. He did not reveal the names of the nine. A top Senate source tells National Review Online that “it looks like Harry Reid buckled under the threat of Republicans reading [the bill] aloud.”

Reid says he intends to file cloture tonight on the DREAM Act and repeal of Don’t Ask Don’t Tell, with an aim toward holding up-or-down votes on Saturday.

It's difficult to know how to begin to describe the magnitude of the outrage this bill was, how it was dropped upon the Senate with no notice, with the demand that yet another 2000-page (plus hundreds of pages of technical specs) be voted on without the chance to be read or debated. Over 1 trillion dollars. Pork projects stretching to the horizon.

The word 'reckless' comes to mind.

'Juvenile'. 'Cynical'. 'Shameless'. 'Dangerous'. 'Evil'.

It was, at heart, a legislative attempt to nullify the November election. Had it passed, Obama would have signed it in a heartbeat, rendering the new Congress in great part powerless to carry out the reforms and reductions in spending demanded by the electorate. A 60+ seat swing in the House in a mid-term is a powerful correction. Add several seats gained by conservatives in the Senate, and it is a clear indication of the mood of the electorate.

OS does not advocate violence, but he fears it may yet occur (and in this instance may have occurred), if the Administration and its fellow travelers attempt to nullify the effect of elections via the legislative process, the regulatory process, and the veto.

When people come to believe that their votes (and electoral efforts, such as donations and canvassing) are futile, cultures tend to boil over. Once the political violence genie is loosed from its captivity, things have a way of going in all manner of unexpected and tragic directions. 1861-65 should remain fresh in our minds. It is unnerving to see the scenes from Athens and London as well. We're not immune here, ya'll.

Please, for the love of God and country, we don't want to go that route. Kudos to Mitch McConnell, Tom Coburn, and so many others who stood tall this week. Shame on GOP senators like Snowe and Collins of Maine and Bennett of Utah, who would have unblinkingly voted for this tragedy. Bennett's gone with this Congress, and someone-somewhere in Maine, please challenge for those seats in the primary at next opportunity.

Even if you aren't the perfect candidate--it doesn't require a genius to stand up and vote 'NO' when ridiculous bills come up.

Wednesday, December 15, 2010

Just Another Day For Big Sis and DHS

Stonewalling FOIA request for results of a DHS investigation of the case of an illegal alien, with two DUI's, never deported, who drove drunk again, and killed a nun.

Since he was smuggled in as a child, he would be one of those eligible to remain under the terms of the DREAM act pushed by Harry Reid.

Wonder if the stonewall coincided with the need to have zero bad news whilst trying to flog this legislation through?

On to another tragedy: Last night's murder of a Border Patrol agent in Arizona.

No problem...the lawsuit against Arizona continues...'cuz BigSis assures us there's really not a problem, except that the Governor and Legislature and citizenry are all racist and stuff and don't have the right to run their own state 'cuz they not our kind of people...

And that the violence will remain on the Mexican side of the border, and we need to be more welcoming and accommodating to all those poor immigrants, and...

The Great Lame-Duck Porkulous Omnibus Push The Country Over The Cliff Budget Bill

Introduced today, Dec. 14, 2010, at 12:15 pm.

The take-it-or-leave-it, no-need-to-debate-it, bend-the-country-over-the-table, Mother-of-all-spending-bills.


$277,000 for potato pest management in Wisconsin
$246,000 for bovine tuberculosis in Michigan and Minnesota
$522,000 for cranberry and blueberry disease and breeding in New Jersey
$500,000 for oyster safety in Florida
$349,000 for swine waste management in North Carolina
$413,000 for peanut research in Alabama
$247,000 for virus free wine grapes in Washington
$208,000 beaver management in North Carolina
$94,000 for blackbird management in Louisiana
$165,000 for maple syrup research in Vermont
$235,000 for noxious weed management in Nevada
$100,000 for the Edgar Allen Poe Cottage Visitor’s Center in New York
$300,000 for the Polynesian Voyaging Society in Hawaii
$400,000 for solar parking canopies and plug-in electric stations in Kansas

And that's just one recital of a few of the items, taken from a cursory glance...

And we wonder why the world is beginning to run the hell away from our Treasury debt?

Tuesday, December 14, 2010

Boehner: 'I Thought The Election Was Over'

Really, he said that.

He also said:

“You know, you get a lot of that heated rhetoric during an election. But now it's time to govern.”

Poor guy, he hasn't read the memo: For people like Obama, Miz Nancy, John Kerry, Barney Frank, Newt Gingrich, Sarah Palin (The list stretches on to the horizon.), the campaign never ends!

It's what they live for, John! That next thrilling Tuesday when they count the votes and decide who's loved and who's not. Sort of like sophomore class president elections.

Govern? Govern? That's for chumps!

To be fair to Mr. Boehner, he suffers from his sincerity. He's so very small-town Midwest--unglamorous, to the point, blunt, impatient with idiots, just wants to get the job done and move on to the next thing to get done. He's a grownup trapped in a frat house, trying to keep the kids from burning the place down, explaining that Mom-n-Dad have cancelled the credit cards.

OS wishes him well, and does not mean to ridicule him. He's a good man, with a tough job ahead of him.

And that bit about playing golf with Obama? Don't hold yer breath, John. You understand what the game is about, that hard core of integrity and dedication required to play well. He's not about to tee it up with you, good buddy.

Monday, December 13, 2010

Culture/Economy, Economy/Culture: NYT Comments On Unemployment Rate For NYC's Young Black Male Population

It's all so politely phrased, but it sets OS's hair on fire to read it.

The report, written by Michelle Holder, a labor market analyst with the Community Service Society, noted that during the recession that began in December 2007, working-age black men suffered an especially large increase of unemployment. The jobless rate for that group jumped to 17.9 percent in 2009 from 9 percent in 2006. Among young men of all races, age 16 to 24, the overall jobless rate rose to 24.6 percent during the recession.

The report, entitled “Unemployment in New York City During the Recession and Early Recovery,” noted that the jobless rate for Hispanic men, age 16 to 24, rose to 24.7 percent during the recession, while their labor force participation rate was 42 percent. For all men age 16 to 24 in New York City, the jobless rate was 22.4 percent during the period studied, while the labor force participation rate was 42 percent. According to the report, women with less than a high school diploma had the lowest labor force participation rate of any group: 28 percent.

The group with the lowest jobless rate during the recession and the early part of the recovery — the recession ended in June 2009 — was Asian women, age 55 to 64. Their unemployment rate in 2009 was 4.5 percent, the report found.

The crucial bit for OS is that 'participation rate'. If 42 percent are 'participating', i.e. employed or actively in the system seeking employment, then 58 percent are off the radar. They don't have enough hope or belief in the future to participate in the above-ground economy or culture.

Contrast with the Asian women 55-64 stat.

This is not a racist rant, not at all. The difference in culture, expectations, family dynamics, etc. impact these numbers so strongly. It isn't that people with black skin or hispanic heritage are inherently incapable--but something happened along the way, and amongst their young men, the level of belief in the future has faded away.

So, where are they? Where do they go? What do they do? What does the future look like for them?

What should we be doing about this? Whatever we've done to date hasn't worked, so please--no more rants from the Left about how we should just throw more money in the direction of the NEA and Urban League.

Following The Trail Of Bread Crumbs: Sirius XM

OS follows a few stocks with interest, sometimes owning them, sometimes not, so he's not trying to pump his portfolio today, or ever. Life is too short, and he assumes his readers aren't stupid.

Sirius XM is a very cool service, in OS's humble opinion. He's considering installing it in Mrs. OS's car for Christmas, since she tends to drive around a bit for her profession. There are home and portable systems as well, but the lion's share of its business comes from car installations.

Sirius as a stock has had a perilous history, with a lot of fluctuations, a merger with XM, loads of debt, and...Howard Stern.

Brandon Matthews is the pseudonym for a financial blogger who follows Sirius. He's been screaming 'Buy, Buy, Buy!' for quite a while, and he's been right! Stock has gone 'to-the-moon-Alice' this year. Now, it's stalled, and he's questioning why.

There are are number of reasons, but it comes back to that automotive install 'thing'. And to the realities of The New Normal. wrote that subprime lending deals are “booming,” based on a report from Experian. Bear in mind that this Expedia report of “booming” lending in the subprime arena was probably released on the day that Sirius XM shares fell. Hmmm. The devil is in the details, and quite frankly the only thing “booming,” is the rate in which consumers are avoiding new car purchases.

Despite higher priced loans this year, the loan balances of financial institutions are plummeting. In the third quarter, the average loan financed increased $2500.00 over the third quarter of 2009. Yet the total outstanding automotive loan balance dropped $23 BILLION in the same period, which Edmunds describes as “another indicator consumers are not replacing existing vehicles in their households.”

He has more to say, and includes an interesting chart to illustrate.

Long story short, nothing and nobody escapes the reality of the real economy, the one that people like us out here in the heartland live in. This household is not replacing cars anytime soon, but is planning to spend about 6k next year to keep its fleet of three in good health. OS will happily write checks to JimBob The Local Mechanic, but it will be 2012 (at least) before he'll willingly make that next purchase.

Which will be a used car. In cash.

Who in their right mind, in this climate, signs a six-year note on a rapidly deflating asset like a car? Who allows a lender to hold a gun to the family's head, if it can be avoided?

OS has much much more to say, but is attempting to remain pithy.

Moh', latuh.

(N.B.: OS made some money on Sirius, but got cold feet last month and cashed out. No position currently. Read the disclaimer to your right, 'cuz OS's advice and two bucks will buy you a cup of overpriced coffee.)

More Tales From The Land Of The New Normal: Louisville Orchestra/Indianapolis Symphony

Louisville Orchestra is in Chapter 11, and the musicians claim it shouldn't be.

Once again, the classic mistake of mistaking assets for cash flow rears its head.

Speaking of assets and cash flow: Indianapolis Symphony is deeply in the red, with its endowment crushed by the downturn, and Zimbambwe Ben making damn sure no organization can earn interest on what endowment remains.

Good luck to them both, here in the age of The New Normal...

Sunday, December 12, 2010

Scotland Yard Seeking 14 In Connection With Attack On Charles And Camilla

...and the fifteenth hooligan is well-known, the son of a rock star, now attending Cambridge...

The fourteen's faces were published today, and OS passes the article along in an attempt to be neighborly.

If ya'll think all those rioters were students, these images should dispel that notion.

The Metropolitan Police refused to say which of those pictured was involved in a particular incident, but senior sources said officers were ‘very keen’ to identify all 14.

It is understood anarchists from Italy, Germany, Spain and Latvia were among the militants who brought mayhem to Central London.

Others came from as far away as Argentina, arrived in London at least a week before the protest and were involved in planning the attacks on the Treasury and the Palace of Westminster, The Mail on Sunday has learned.

Some are thought to belong to an anarchist group called Black Bloc, which originated in Holland and Germany, and has taken part in riots all over the world.


But, a fifteenth participant has been identified.

And, he's a student at Cambridge, whose life won't be greatly affected by any rise in tuition fees.

The privately-educated pop star’s son who caused national outrage by swinging from the Union Flag on the Cenotaph was also seen clutching a rock for use as potential ammunition against the police.

As these exclusive pictures show, Charlie Gilmour – the adopted son of Pink Floyd guitarist David Gilmour, who is worth about £78 million – seemed prepared for violence as mayhem erupted during the protest over university tuition fees.

The 21-year-old grabbed the stone from roadworks in Whitehall. With a scarf wrapped around his face in an unsuccessful attempt to hide his identity, the long-haired Cambridge history student tossed and caught the missile menacingly with his right hand as police struggled to defend the Palace of Westminster from the mob.

Words are just inadequate to describe a kid like this, but 'ingrate sociopath' immediately comes to mind.

His name is Charlie Gilmour, and he is an amoral creep.

Mom and Dad, if your kid is at Cambridge (and it's not a big place), Charlie is close at hand, and could well become part of your family history.

Good luck.

Joy Breaks Through: Year One Of Ben The Sprollie

In the darkest times, light breaks through in the most unexpected ways. Some weeks ago, OS tripped across a wonderful blog from Greenhill Farm, in Northern Ireland, which chronicles life on the farm and the joys of owning a small pack of working border collies.

Ben is a Sprollie, a cross between a springer spaniel and border collie. OS mis-identified him initially as a border collie. In any case, he's a fabulous dog.

It is a joyful relief to check in on this gang.

Today is Ben's first birthday, and here is the account of his first year from six weeks through today.


Happy birthday, Ben. You're a credit to your breed.

Mark Madoff's Suicide: 'Nobody Wants To Believe The Truth'

This is tragically sad, especially for the children and loved ones left behind.

Condolences to the innocents who must go forward in the shadow of the Madoff tragedy.

A question is left suspended in the air: What 'truth' was he attempting to convey that no one wished to believe?

From today's WSJ:

NEW YORK—Bernard Madoff's elder son was found dead Saturday of an apparent suicide on the second anniversary of his father's arrest, according to law-enforcement officials.

Mark Madoff, 46 years old, was found hanged with a dog leash attached to a living-room-ceiling pipe in his apartment by his father-in-law, Martin London, law-enforcement officials said. A relative notified police around 7:30 a.m. No suicide note was found, the officials said.

Mark Madoff's 2-year-old son, Nick, was found unharmed in a bedroom in the apartment, along with a dog. Police said that because the toddler was left alone, they are notifying the city's Administration for Children's Services. The child was released to Mr. London. Detectives took at least one computer, an Apple, and BlackBerries as per a search warrant for analysis.

Law-enforcement officials said Mr. London went to the apartment in Manhattan's SoHo section at the request of Mark Madoff's wife, Stephanie Morgan, who was in Florida, where she received an email Saturday morning from her husband indicating that she should have someone check on their son. According to police, one email to her read "Please send someone to take care of Nick" and another "I love you." He also sent an email to his attorney, Martin Flumenbaum. According to police it read "Nobody wants to believe the truth. Please take care of my family."

It will take years and much research to sort out all the many stories that converged to create this enormous tragedy.

OS just hopes some lessons are learned along the way. Like, if something walks, talks, and quacks like a Ponzi scheme, it likely is. And that greed is a pernicious vice, because it seduces, captures, and then utterly destroys its victims, and everything they love, even if they die rich.