Wednesday, December 31, 2008


Another year ends. Good one personally, rough one for the world at large. Yeah, I know we all think of it as the year Obama was elected, and that's true.

But I suspect it'll be known more as the Year the Music Stopped for the American, and even the World, economy when we look back years from now. But that's an analysis for another day.

Meanwhile, enjoy yourselves tonight and have a Happy New Year. See ya in 2009.

(Oh - It's coming. Two more days.)

Labels: , , ,

Tuesday, December 30, 2008


Three days away.

Labels: , ,


Remain confused no longer! If you've been wondering how a successful entity like the Ford Motor Co. could be facing its demise, your answer is here. It's not bloated executive salaries. Nope. Nor is it fuel costs, labor expenses, poor strategic planning or even private jets. No, no, no, no, no.

It's merely the unfortunate, but unpreventable, byproduct of Ford's top-to-bottom sacrifice to give America's drivers the one thing they've clamored for without pause since 1948: self-parking cars.

Just a few billion dollars more of tax-payer money and they're gonna get this baby on the road. And once no one has to park his own car anymore . . . well, our problems (and Ford's!) are over.

Labels: ,

Monday, December 29, 2008


Apparently, it's not just New York State (or California) that's seeking bail-out money.

No, no.

Seems that Greenwich, Connecticut wants its part of a $700 billion "economic stimulus package." (H/T The Cunning Realist). Greenwich, for those of you not in the know, is one of the wealthiest communities in the United States, with a per capita income of nearly $75,000. As of 2000, it was, in fact, the richest town of more than 50,000 people in the country.

Included in its proposal for its piece of the $700 billion is a "list of $38.4 million in 'shovel-ready' projects that officials said includes everything from road repaving and drainage improvements to bridge repairs and the construction of a new town animal shelter."

Shovel, huh? You ain't kidding.

Labels: , ,


From the lead article of today's issue of "You Don't Say?" Magazine, we learn, shockingly, that "Many Teens Don't Keep Virginity Pledges." In fact, after years of tedious, expensive, and common-sense-bolstering research & analysis, "study author Janet E. Rosenbaum, a post doctoral fellow at the Johns Hopkins Bloomberg School of Public Health" also explains that:
Virginity pledgers and similar non-pledgers don't differ in the rates of vaginal, oral or anal sex or any other sexual behavior. Strikingly, pledgers are less likely than similar non-pledgers to use condoms and also less likely to use any form of birth control.

Sex education programs for teens who take pledges tend to be very negative and inaccurate about condom and birth control information.

This high rate of [denying ever making such a pledge] may imply that nearly all virginity pledgers view pledges as nonbinding. (emphasis added.)
In another of Ms. Rosenbaum's federally-funded studies, she found that teenagers who promised parents not to drink at late night parties were just as likely to wake up at the base of a urine-stained toilet bowl, half drowning in pools of their own vomit as those teens who did not make any such promises.

Ms. Rosenbaum's next study seeks to see if a link exists between students who promise never to lie again and those who "lie more than average."

Labels: , ,


Four more days.

Labels: ,

Sunday, December 28, 2008


I urge you to read this article by Jim Grant (author of Jim Grant's Interest Rate Observer), from last Saturday's Wall St. Journal Online. It's not the standard "pro-business" bullshit you're used to seeing in the WSJ either. In fact, it's closer to a warning -- a well-reasoned, historically-grounded lesson in the dangers of easy money & debt-creation.

An explanation, you might say, of what sort of dangerous waters we're sailing into, and why the "clear" solutions we've been handed are clearly dangerous. A few excerpts:

Wall Street that day [when the Federal Reserve lowered interest rates nearly to zero] did handsprings. Even government securities prices raced higher, as if, somehow, Treasury bonds were not denominated in the currency with which the Fed had announced its intention to paper the face of the earth. Economic commentators praised the central bank's determination to fight deflation -- that is, to reinstate inflation. All hands, including President-elect Obama, seemed to agree that wholesale money-printing was the answer to the nation's prayers.

One market, only, registered a protest. The Fed's declaration of inflationary intent knocked the dollar for a loop against gold and foreign currencies. In many different languages and from many time zones came the question, "Tell me, again, now that the dollar yields so little, why do we own it?"

* * *

Our troubles, over which we will certainly prevail, stem from a basic contradiction. The dollar is the world's currency, yet the Fed is America's central bank. Mr. Bernanke's remit is to promote low inflation, high employment and solvent finance -- in the 50 states. He wishes the Chinese well, of course, and the French and the Singaporeans and all the rest besides, but they don't pay his salary.

They do, however, buy the U.S. Treasury's bonds, which frames the emerging American dilemma. If the Fed is going to create boatloads of depreciating, non-yielding dollar bills, who will absorb them? Who will finance the Obama administration's looming titanic fiscal deficits? Who will finance America's annual surplus of consumption over production (after 25 more or less continuous years, almost a national trait)? Inflation is a kind of governmentally sanctioned white-collar crime. Every crime needs a dupe. Now that the Fed has announced its plan to deceive, where will it find its victims?

* * *

Knowledge of the precepts of classical central banking prepared no one to understand, much less to anticipate, the Fed's conduct in this credit crackup. The central bank is lending freely, all right, but not at the stipulated "high" interest rate. As a matter of fact, it is starting to lend at a rate below which there is no positive rate. The gold standard was objective. Modern monetary management is subjective (under Alan Greenspan, it was intuitive). The gold standard was rules-based. The 21st century Fed goes with what works -- or seems to work. What it hopes is going to work for the fellow who fell off the stepladder is more debt and more dollars. Just how much of each can be found every Thursday evening on the Fed's own Web site. Open up form H4.1 and prepare to be amazed. Since Labor Day, the Fed's assets have zoomed to $2.31 trillion from $905.7 billion. And what is the significance of this stunning rate of asset growth? Simply this: The Fed pays for its assets with freshly made dollars. It conjures them into existence on a computer; "printing" is a figure of speech.

* * *

[T]he seasons of finance are unpredictable. Prescience is rare enough in the private sector. It is almost unheard of in Washington. The credit troubles took the Fed unawares. So, likely, will the outbreak of the next inflation. Already the stars are aligned for a doozy. Not only the Fed, but also the other leading central banks are frantically ramping up money production.

* * *

The public has been slow to anger in this costliest and scariest of post World War II financial crises. Wall Street and the debt ratings agencies have come in for well-deserved castigation. But pointing fingers rarely find the Federal Reserve, whose low, low interest rates helped to set house prices levitating in the first place. (emphasis added)

As always, I urge you to read the whole article. There are troubles brewing that are more serious than many people wish to acknowledge. Those who take the time to understand what's happening and may happen going forward will thank themselves for their effort some day.

Labels: ,

Friday, December 26, 2008


Monday, December 22, 2008


This, from a JPMorgan Chase spokesman (that'd be the same JP Morgan Chase that received $25 billion of money from you!) in reference to where, exactly, all the bailout money has been going:
We've lent some of it. We've not lent some of it. We've not given any accounting of, 'Here's how we're doing it.' We have not disclosed that to the public. We're declining to.
They're "declining" to. Pretty ironic, since I would've "declined" them the goddamn money in the first place.

Labels: , ,

Monday, December 08, 2008


I know that some of you won't like this cartoon, but I think it's great. (H/T Barry Ritholz)

I have nothing against Detroit getting bailed out in comparison to Wall St. Nah. I think we should leave both industries out to dry. And any other industry that comes to Washington, looking to pick our pockets clean.

The "free" in "free market" refers to one's choices, to the constraints on one's decisions.

It doesn't refer to the cost of doing business, any more than it's ever referred to the price of the products anyone sells.

Labels: ,

Tuesday, December 02, 2008


Anyone else finding these daily "Pirates hijack ship in the Red Sea" stories a bit unnerving? I mean, I just read that Somali pirates tried to hijack a passenger liner!


Labels: ,