Monday, December 29, 2008

Why does Hamas want Israel to bomb Gaza?

Hamas has been firing rockets into Israel. Granted the rockets are home made and not very powerful, but still, bombarding your neighbor has always been an act of war. The Israelis put up with the bombardment for a few days while asking Hamas to cease and desist. They don't, and the Israelis call in their air force to do a little bombing to send Hamas a message.
Hamas has got to know that firing rockets into Israel is always going to provoke Israeli retaliation. That means that Hamas wants Israel to bomb them. But why? Surely the Gaza strip population is as radicalized as they are ever going to get, they don't need another sirstrike to get them psyched up. Unless Hamas is stuck on stupid (really stuck hard) they know Gaza can't beat Israel in any kind of fight. The Israelis out number them and the Israeli population is highly educated, highly motivated, well organized and well armed. Picking a fight with Israel means certain defeat for Gaza and Hamas.
Can Hamas be stupid enough to think that Israeli airstrikes will get other Arab countries, Eygpt, Saudi, Syria, Lebanon, Iraq, and Jordan to come to their aid? Or the Europeans? Do they crave expressions of international sympathy enough to take casualties? Do they think the incoming Obama administration, already up to its ass in alligators, is going to take their side?
So what is really going on?

Flash, Bang, Zap, and the lights go out

Was just sitting at my desk this morning minding my own business when Flash and Bang get my attention. Loud and bright. I look out the window and see the power pole on the road burst into flames. Followed by more flashing and banging. This pole is serious. I dial 911. Franconia Police are first on the scene with Franconia Fire Dept a minute or two later. Pole is still burning, and gives a tremendous flash and another big bang to welcome the firemen. More smoke. Since the juice is still on (my lights are burning even though my service entrance comes off the burning pole) everyone decides to wait for the power company (PSNH) to show up and turn off the power.
PSNH finally shows up after an hour. Pole is still burning on top. They get the juice off, and for extra safety the linemen connect a shorting cable across all three hot wires, before they take the cherry picker up. The linemen borrow a fire extinquisher from the firemen and put the pole fire out. By this time it has burned the pole halfway in two, below the top set of cross arms.
They don't have a replacement pole, that's handled by Fairpoint Communications (the telephone company). So, since the pole is only burned at the top, they decide to just lower all the crossarms below the burned spot. Cause of fire, one of the hot wires came loose from the insulator and touched the pole and arced to ground.
Four hours later we get the juice back on. That does put some life into a Monday.

Sunday, December 28, 2008


"The United States has, for example, had trouble recently with its national leadership. One president was assassinated for reasons not yet known which we prefer not to ask about. Another president resigned to avoid impeachment. A more recent president from Hollywood lived a fantasy life, lying to himself and the public to mek us feel good, while creating an underclass beneath our democracy and ending the Cold War with the Soviet Union".
From the introduction of "China, A new History" by John King Fairbank and Merle Goldman, copyright 2006.
After displaying such a balanced view of their own society, what spin are they going to place on a foriegn society? (I haven't read far enough yet to judge) Both authors are Harvard professors. With flakes like this on the faculty I wonder what kind of education Harvard students get these days?

Global Warming returns to Cannon

It's 55 outside and last week's two feet of snow is melting. There is nothing drearier than a ski resort melting out. Especial during Christmas week.

Wednesday, December 24, 2008

Save Money, Shut down the SEC

The SEC was created during the great depression to regulate the stock market and prevent the great depression for ever happening again. It has clearly failed in that mission. It failed to investigate the Bernie Madoff swindle dispite allegations of fraud going back ten years. It has created Sarbanes-Oxley regulations onerous enough to drive business off shore to London to avoid them.
Since it doesn't work, harms the economy, and costs $1 billion dollars a year to operate, let's just shut it down.
While we are at it, we could shut down the CIA too. They don't work,they failed to warn of 9/11, claimed that Saddam had nukes, and have harmed the war on terror thru a series of treasonous leaks. And attempted to destabilize the Bush Administration thru the Valerie Plame affair. All the real intel comes from NSA any how. Why do we keep funding those losers?

Stimulate the economy, fund fusion research

Fusion burns hydrogen, yielding helium, an inert gas of some commercial value. The oceans are 20% hydrogen by weight, so we will never run out of fuel. No radioactive wastes. No carbon emissions, if that is important to you. Fusion research has been ongoing for the last 50 years with little success so far.
Now two small projects, the Polywell project and the Fusion General project might produce workable fusion reactors. Both projects are small and cheap. A few million dollars of funding would accelerate both projects.
With the rewards so great, and the costs so small, the funding is worthwhile, even if the odds of success are unknown. It's a better use of taxpayer money than bailing out brain dead banks and auto makers.

Monday, December 22, 2008

The "Don't talk about it in public" issues

Earlier I posted about real political issues and "hot button" issues. Since then it came to me that there is a third class of political issues, the "don't talk about it in public" issues. Second Amendment rights, decriminalization of marijuana, repeal of the Digital Millennial Copyright Act, reform of patent and copyright law, net neutrality, and tort reform, come to mind. There are probably others. These are real issues, that effect citizens directly. But for some reason, fear of offending the interest groups that support them, or journalists too clueless to understand them, or something, you never hear a candidate speak out on these issues at all. There are plenty of voters who care about these issues. Maybe the Republican party should take a public stand on some of them.

Global Warming brings 2 feet of snow to Cannon

Friday put down 8 inches and Sunday put down 16 inches. All light powder. This is the most snow for this early in the season ever at Cannon. Town of Franconia did it's usual exception plowing job, we are all plowed out and the sun is barely up. Skiing is superb.

Sunday, December 21, 2008

Vista causes Great Depression II

Computer sales used to be the driving force behind the economy. Then Microsoft burdened the industry with Windows Vista and deprived us of our beloved Windows XP. Vista is so detested that people stopped buying new computers, preferring to keep their old ones that ran XP. The result? Computer sales dropped across the board, triggering the current economic down turn.
You can beleive as much that as you like

Saturday, December 20, 2008

Real Political Issues vs Hot Button Issues

Coming out of the serious losses of '08, Republicans ought to be taking stock and finding a new direction. Republicans used to be a party of ideas (issues). We remember Ronald Reagan for "Morning in America" and Newt Gengrich for "Contract with America", ideas and issues. Whereas in this election Obama never expressed a single concrete idea (he still hasn't) and McCain just said "Vote for me 'cause I am a distinguished war hero". In the absence of ideas from either side, the election went to the pretty face and the resonant voice. Obama won 'cause he looked good on TV, not 'cause he expressed any good ideas.
If issues are the coin of the realm, Republicans need to distinguish between real political issues, foreign policy, financial regulations, immigration law, energy supply, taxes and spending, copyright revision versus "hot button" (aka social) issues ( abortion and gays). Sensible voters are concerned about steering the country safely thru a dangerous world, protecting the homeland from attack, and growing the economy. Although there are a bunch of voters attracted by the hot button issues, there are an equal number of voters driven away by them. For example, abortion isn't a winning issue, half the country is for it and the other half is against it. Plus the issue is moot, the Supreme Court has made it legal and there isn't much you can say after that.
The crucial independent voters care more about real issues and are often repelled by the hot button issues. Republicans need not repudiate their anti abortion and anti gay marriage stands but surely they don't need to talk about them all the time. Do like Sarah Palin did, although she is clearly against abortion, she never talked about it on the campaign trail.

Friday, December 19, 2008

Bush Caves to Detroit

Just now, Bush was on TV saying that he would give Detroit $15 billion out of the TARP money. No specific requirements for reform were laid upon Detroit. This ought to keep them out of bankruptcy court for a few months, long enough for the mess to land on Obama's desk.

Thursday, December 18, 2008

GM was building yet another plant.

According to The Truth About Cars, GM was building a brand new plant to make engines for the upcoming Chevy Volt. But, running out of money, they have postponed or canceled the project after spending a wad of cash on it.
More brain dead GM management. Here is a company with about twice as many plants as they need, yet they are building a brand new one? Dumb move.
Here is a company pinning its hopes on the new hybrid Chevy Volt, a technological first for GM, cutting edge battery, all new electric drive design. This is a high risk project, there is a good chance something won't work, or something breaks after they sell them. So, rather than picking an existing engine already in production, a low risk strategy, they were gonna use a brand new engine built in a brand new plant. And if anything were to go wrong with the new engine or the new plant, the entire Chevy Volt project is jeopardized. Only a brain dead project manager would make that decision.
First thing the GM bankruptcy judge should do is replace ALL of GM management.

They shut down theplants, but the UAW still gets paid

The big three auto companies are getting ready for Christmas shut down. Due to horrible sales, they plan to stay shut down for longer than usual. So far so good.
Except, the workers still get paid during shutdown. Nice deal and all, but with the auto companies broke and begging for Federal bailouts, it seems a little much to give the work force a month of paid vacation.

Tuesday, December 16, 2008

Will any amount of "stimulus" improve the economy?

Probably not. Consumers are fearful of losing their jobs, their health insurance and their homes. Plus money they thought they had in their houses and the stock market has been taken away. Given those two bummers, nobody in their right mind is going to buy anything that they don't absolutely have to have. Nobody has to have a new car, not this year anyhow, make the old one run a year or two longer. Likewise new houses, new clothes, appliances, luxuries, trips, sports gear and on and on and on. The only things we have to buy are food, furnace oil and gasoline. Lotta people are even passing on Christmas presents.
Until the economy looks less scary sales are gonna be in tank, no matter how much stimulus is thrown around.

And, while on the subject of Detroit

Ignore UAW's Ron Gettelfinger when he whines that only the union has been asked to make sacrifices. The stockholders have already lost heavily, GM stock is down to a couple of dollars a share. Banks and bond holders were willing to forgive 70% of GM's debt. But the wily and well connected UAW knew that Bush would cave to them even if the Senate Republicans wouldn't.

Don't Bailout Detroit

The big three automakers are in a death spiral. Their labor costs $75 and hour where their competitors, the transplant makers, pay only $50. They have too many me-too models of cars, and none of them are as desirable as Toyota or Honda. They are afflicted with brain dead management, particularly GM. No way can Detroit be profitable with higher costs and inferior products. Detroit's small cars must sell better than Corolla and Civic for them to stay in business. Giving them $14 billion now just lets them keep on losing money for a few more months.
Put them into chapter 11, rewrite their labor contracts to $50 an hour like the transplants, reduce the number of car models to something reasonable, replace their senior management and boards of directors, write off their debt, and close excess car plants. Reduce executive salaries to $250,000 max. Require that dividends and bonuses be paid out of profits after taxes. No profit, no dividends or bonuses. And clean up their books. Last year GM "wrote off" $35 billion of phantom assets they had been carrying on their books for years. What other scams are still hidden by the big three accountants?
Chrysler has a parent company, Cerberus, which has plenty of money to keep Chrysler afloat. I see no reason why us taxpayers should subsidize Cerberus.
GM is too big to be profitable ever. Break it up into four companies, Corvette, Chevrolet, Cadillac, and General Motors Acceptance Corp (GMAC). Ford might be able to make it on their own. Don't merge Chrysler and GM. Tying two troubled firms together merely assures that they both sink together. Leave them independent, there is chance that one might float by itself.

Monday, December 15, 2008

How Fannie and Freddie caused the 2nd Great Depression

Let's work backwards. Wall St brokerage firms failed after it became impossible to sell their "mortgage backed securities" when they needed cash. The "mortgage backed securities" promised high yield with low risk, and the brokerage houses printed huge amounts of them and sold them to gullible investors and to Frannie and Freddie. They were so profitable that the brokerages became willing to buy sub prime and "liar's loan" mortgages, because turning them into "mortgage backed securities" was profitable.
Things came unglued in 2006 when the gullible investors discovered that the price of houses had dropped so much that the mortgages were worth more than the houses. All of a sudden the "mortgage backed" part of the securities began to look risky. The gullible investors wised up and stopped buying them. Leaving the brokerage houses with barrels of "securities" that no one would buy. "Illiquid" is the Wall St jargon for "so crummy no one will touch it".
Why did the price of houses fall in 2006? A better question is why did the price of houses rise the rapidly in the previous decade? Answer, the price of houses went up because the banks were willing do higher loans on the properties. Remember a mortgage is a simple deal, I loan you money, you pay it back or I take the house. This only works if the house is worth MORE than the mortgage. Successful banks are good at assessing property values and would not do mortgages that exceeded their idea of what the property was really worth.
But then, a horde of eager stock brokers descended upon the banks offering to buy the bank's mortgages for cash. So they could turn them into "mortgage backed securities". Such a deal. Once sold, the bank was free of risk, if the mortgage defaulted the gullible buyer had a problem, not the issuing bank. The bank gets to keep the closing fees, points, and perhaps a markup, and hustles out to do more mortgages.
Now that the bank can sell mortgages, it ceased to care that much about the quality of the mortgage. Do a low quality mortgage, offer to finance a little more than the property is worth, offer to waive the down payment. Sell the result before something goes wrong. Result, price of housing goes up, 'cause the bank is willing to loan more money on the same old property.
Why were the brokerage houses so willing to do mortgage backed securities? Simple, Fannie and Freddie were willing to buy enormous quantities of them. They had the money (borrowed on the credit of the United States) and the returns promised by the brokerage houses looked sooo good.
What's the moral of the story? Simple, shut down the entire secondary mortgage market, force the banks to risk their own depositor's money. To a large extent this has happened, the market for "mortgage backed securities" has dried up, no one will touch them any more. When the bank risks it's own money, it will be more careful. Just to make sure the secondary mortgage market stays closed, close down Fannie and Freddie for good.
And, remember that Barnie Frank and Chris Dodd defeated all attempts to limit Fannie and Freddie's borrowing power, leaving us taxpayers stuck with the horrendous losses they racked up.

Saturday, December 13, 2008

The Great Ice Storm of 2008

Up here, north of Franconia Notch, it was too warm to freeze. We got rain and snow. Came down all day, but no ice, the trees stayed upright and the electric power stayed on. Town plows did the roads, twice. About noon it started to cool down. The driveway had a inch of very very wet snow which I decide to shovel off before it froze hard and gave me an ice coated driveway from the entire winter.
Down south, the ice put a lot of people in the dark. It also messed up our cable TV. Most cable channels froze up, leaving a frozen image and no sound. Channels 2 thru 13 and the Weather Channel stayed alive. Dunno how they managed that, I would have thought that dead channels would go dark rather than freezing up. The didn't get the cable working until just a few minutes ago.

Wednesday, December 10, 2008

What's in Concord for 2009?

Looks like another busy year for our state legislature. We have about a 1000 bills in the hopper. The hopper is online, click on the link to view it. When you think of it, that's an awful lot of new laws being proposed. We don't seem to have any text for the bills yet, just the names of the sponsors, and a title. Skimming the list we have quite a few bills related to school funding. The hopper has some funny formatting that I was unable to strip off, which accounts for the ragged look of the list.

2009-H-0022-L establishing a state income tax to adequately fund public education.
Sponsors: (Prime) Delmar D Burridge

2009-H-0557-L establishing a flat rate income tax and relative to a statewide enhanced education tax and certain other taxes.
Sponsors: (Prime) Jessie L Osborne

2009-H-0571-R relative to establishing number plates supporting New Hampshire public higher education.
Sponsors: (Prime) Sarah A Hutz

2009-H-0036-R relating to funding of public education. Providing that the legislature shall define standards for education, determine the level of state funding thereof, establish standards of accountability, and allocate state funds in a manner that mitigates disparities in educational opportunity and fiscal capacity, provided that a reasonable share of state funds shall be distributed on a per pupil basis
Sponsors: (Prime) David W Hess Sherman A Packard Shawn N Jasper W. Douglas Scamman

2009-H-0044-L establishing the cost of an adequate education. Sponsors: (Prime) David W Hess

2009-H-0072-R relating to public education. Providing that: the recognition of local control of education in the New Hampshire constitution is reestablished. Sponsors: (Prime) Daniel C Itse
Robert H Rowe

We have two representatives proposing a state income tax to fund education. We have one representative who thinks we can raise enough money from vanity license plates fund education. Lots of luck on that one. We have one bill to take control of education away from local school boards and give it to the state. We have one bill to set the cost of education by law.
The last bill proposes a constitutional amendment to make grade school and high school education a city and town responsibility, the way it was before the State Supreme Court messed things up years ago. This is the best solution. It restores "The Pledge". If the state doesn't fund education, the justification for an income tax is removed. No one wants a state income tax, except maybe the teachers. Local school boards, who have to meet their taxpayers face to face, can make better decisions about educational costs and quality than bureaucrats in Concord can.

Crummy camera work drives off Extreme Trains

Been watching "Extreme Trains" on the History Channel. Like many guys, and kids, I like trains and seeing them on TV is a reasonable substitute for going out and finding real ones to watch. Especially as they don't run trains in New Hampshire any more. The train was pretty extreme, a big 1940's steam engine, lovingly maintained by the Union Pacific, with 18 streamline passenger cars in tow, rushing across the prairie from Denver to Cheyenne.
Too bad the cameraman couldn't hold his camera steady long enough to watch this fine big hunk of iron rolling along. He panned, he scanned, he zoomed, he cut from one view to another. The camera never stood still long enough to actually see the train. As soon as my eye steadied in on the train, the cameraman would move the viewpoint and throw my eye off. It got so bad I finally turned the show off.

Tuesday, December 9, 2008

Chicago Tribune goes Chapter 11 & no one knows why

The Newshour with Jim Lehrer had a long discussion about the Tribune's bankruptcy. But never did the phrase "advertising revenue" pass the lips of any of the newsies doing the talking. Apparently they have never heard of it. One guy who used to edit the Tribune opined that ad revenue was un necessary, he wanted to print an ad-free paper of 36 page and thought he could make money selling it. Good luck to him.
The reason newspapers are in trouble all over the country is the ad revenue that used to fund them is going to the internet, to Vehix, to Craiglist, and to Google. All that ad revenue that powers Google came from competitors, like newspapers. Newspapers used to make money selling classified ads to sell cars and houses. Not any more. Cars and houses are advertised on the internet in the 21st century. Lot of their other advertising has gone the same way.
Surprising that three experienced newsies know so little about the economics of their business.

Sunday, December 7, 2008

Public Radio, standing up for federal bureaucrats

Early this week Public Radio ran a couple of pieces complaining about the use of contractors instead of using government employees. Daniel Zwerdlinger never talked about why the government contracts work out, he just claimed it was bad, bad, bad, and ought to stop. I'm sure all the well paid government bureaucrats loved those pieces. Government contracts out work, 'cause it saves the taxpayer money. Government workers get wonderful (and expensive) health care, cushy retirements at an early age, and are impossible to lay off. Once hired, they are on the payroll til they die. Contractors get paid less, get less health care and can be laid off anytime. That makes contractors cheaper. I'm a taxpayer, I like cheaper.
Then this morning Public Radio came to the defense of the suffering bureacrats at the EPA. They are demoralized and unhappy because the Bush administration wouldn't accept their scientific evidence and allow them to shut down nearly everything in sight. The show opined that the incoming admistration has a mighty task to rebuild the EPA into the tower of obstructionism that it deserves to be.

Bailout or green car mandate?

In the tugging and heaving over bailout of the big three automakers, the greens have blinked. Last night Nancy Pelosi announced that the $25 billion already authorized for Detroit can be used to keep the automakers afloat. Apparently this money was supposed to be used to make "green" automobiles, not to pay suppliers, make payroll, pay off debts, the sort of thing money is needed for. Seems like Nancy only just now has figured out that jobs are the only reason to subsidize the car companies. We don't care about green cars, we do care about workers getting laid off.
The big three CEO's were on TV Friday. They didn't make all that much sense to this taxpayer. Plus the Congressmen did most of the talking. Several things did come thru. Apparently the car dealers have to pay the factory for the cars on their lots. They call this "floorplanning". Dealers borrow the necessary money from the finance arms (GMAC etc) of the automakers. And then customers borrow from the same place to pay for the cars. GMAC got stupid last year and lost a bundle of money playing in the sub prime mortgage market. All three of the car company finance operations are running out of money to loan to car buyers and car dealers to buy cars. It might be reasonable to call these finance operations "banks" and give them the same access to the Federal Reserve money as conventional banks get.

Friday, November 28, 2008

DoD Linux?

Just been thinking about the recent hacker breakin to the Pentagon's computers. The defense IT people are talking about banning the use of flash drives, CD's, DVD's and removable media of all types. Windows has the unpleasant habit of uploading code from removable media and executing it. This means you can infect a Windows computer by merely inserting a flash drive or a CD. The infecting code can do anything it likes, starting with sending the entire contents of the hard drive out over the Internet. Remember the infmaous Sony rootkit that infected the user's machine for meaning playing an audio CD on it.
The only way for DoD to keep anything secret on a computer, is use something other than Windows. Linux anyone? DoD could create it's own version. In fact, should this happen, they ought to offer it free to us civilians. "DoD Linux" would be a sure fire seller to anyone wanting to use computers and not give away everything on them to his competitors.

Wednesday, November 26, 2008

How many bean counters can dance on the head of pin?

According to Aviation Week, the Pentagon is planning to boost the number of contract overseers in the Defense Contract Management Agency to by 8%, from 9000 to 9720. Wow.
The entire defense budget is around $500 billion. At least half of that ought to be things that are not contract, like pay for the troops. So we have 9720 bean counters slowing work on maybe $250 billion worth of contracts. Each bean counter only has $25 million worth of contracts to "oversee" (hinder is a better word). With fighter planes going for $100 million each, that yields four bean counters per aircraft produced.
Used to work in the aerospace/defense business. The huge building had two floors. On the ground floor was the productive stuff, engineering, manufacturing shops, drafting, the stockroom and so on. Upstairs, using just as much floor space, and more people, were the bean counters who complied with the oceans of gov'ment paperwork. For every productive person on the program, Raytheon had one non productive bean counter.
We would get a lot more defense for the buck if we dropped the paperwork and got on with the job.

Tuesday, November 25, 2008

Stress Reliever

Fox TV News was showing a new product, a stress relief room, where in stressed out people can work off their stresses by breaking things, hurling glassware and crockery against the wall. Participants were required to wear safety face masks and eye protection. Price was not mentioned on air. Sounds cool.
Only, up here, we get to relief our stress every time we haul our recycling down to the town dump, excuse me "transfer station". You just stand at the bin for glass and hurl your beer bottles against the concrete backstop. They shatter beautifully. It will be beer bottles, beer is about the only thing still packaged in glass these days. If we all gave up our beer drinking, it would reduce the glass recycling to nearly zero.

Sunday, November 23, 2008

Las Vegas vs Wall St. Is there a difference?

At Vegas large sums of money change hands. Marks become poorer and casinos become richer. On Wall St money is supposed to move from investors into economic development. With the brokers retaining a small commission for their "services". Unlike Vegas, economic good is supposed to come from Wall St activities. At least most of the time.
Some ordinary activities such as trading in stocks and bonds, do serve the economy. Some activities such as "securitizing" sub prime mortgages, and "credit default swaps" have ruined the economy.
The incoming administration should plan to discourage the distructive Wall St operations while encouraging the constructive ones. Was it me, I would clamp down on securitization of all types. If a company wants to borrow money, let it issue bonds in its own name. Stock market futures trading does not channel money into economic investment, it is a roulette game. "Credit default swaps" merely encourage buying risky securities, and when the market crashes the swap issuers lack the money to actually pay off. Gullable investors think the swaps insulate them from risk, in actual fact the deal merely costs the investor money and offers no additional security.

Friday, November 21, 2008

What do Republicans beleive in?

Oldest son asked me to recommend a book upholding the principles of the Republican party. I thought about that and I couldn't think of anything more recent than "Conscience of a Conservative" which is kind of dated. All the newer books I know are either boring, or rants of little importance.
The recent campaign did sound bites, vague generalities and character assassination spreading heat but not light.
It comes to me that Republicans believe in free enterprise. This means freedom for anyone to enter any business that pleases them. Licenses should not be required for such ordinary occupations as cutting hair or teaching school. Licensing merely makes it difficult to enter those fields, and serves merely as a means to limit competition. Licenses restrict our freedom.
Free enterprise means the business should be free to offer any products it pleases, of any quality and for any price. Government should not set freight rates, airline ticket prices or the sale price of kitchen appliances. One perfectly legitimate business is buying and selling products from abroad. Over the long run exports have to equal imports. Each import is paid for with an export. Attempts to "protect" domestic industries and workers by taxing foreign trade may help the protected industries, but they hurt the majority of us who don't work in the protected industry. America has been in favor of free trade since WWII.
Free enterprise means no subsidies for farmers, oil companies, solar panels, battery powered cars, and other "worthy" things. The farmers, oil companies, solar power firms, and battery car makers must compete in the marketplace. If their products fill a real need and are priced right they will sell. If not, good riddance to them.
Free enterprise means the best thing society can do for it's poorer members is to provide them with jobs. A job is better than any amount of unemployment insurance, welfare, health care, day care, and other social welfare goodies. With a job, the worker has money and can buy all these services, without a job life is miserable. Business provides jobs, therefore the Government should encourage business, rather than treat business as robber barons.
Free enterprise is more efficient at providing goods and services. Compare US Postal Service with Fedex and UPS. If you want your Christmas presents to get there before Christmas, sent them Fedex, not Parcel Post. Things that can be provided by private enterprise, rather than civil servants, should be.
Free enterprise means business is owned by stockholders, not the government. The government has enough control over us poor citizens thru the law and the courts, the IRS, and the welfare agencies. We don't want to give the government control of the companies at which we work. Face it, your boss has a good deal of control over your life. You don't want your boss to be the government, 'cause then Uncle Sam has got you coming and going.

Thursday, November 20, 2008

Skiers over come Bicknell's Thrush

According to the Manchester Union Leader, the long dormant Mittersill ski trails will be open to Cannon skiers. The forest service has agreed to give the Mittersill land to the state of NH in return for a patch of land in Pierson. This deal will increase Cannon's ski trails by 50 percent. The Mittersill trails can be reached with a short climb up over "the Saddle", which gives access to the old Taft Race Course running down into the Mittersill area. Those in the know can find a pair of cutbacks of Baron's Run back to the lifts at Peabody.
The need for a climb will limit the Mittersill skiers to the more energetic, but it will ease the crowds on the Cannon slopes. A trip "over the Saddle" and back takes an hour, compared to maybe 10 minutes to run down Upper Cannon to Avalanche and catch the tram again.
One of these days, when money becomes available, a double chairlift at Mittersill is planned, running up the old Baron's Chairlift line.
It's only taken 3 years that I know of to get the paper work thru the Forest Service.
The conservation community has attempted to block the skiers thru the device of Bicknell's Thrush. This bird nests about 1200 feet in wood lot with cleared land such as ski trails, nearby. Bicknell's thrush was declared to be a species only in 1995. Prior to 1995 it was just another thrush. Shortly after being invented, Bicknell's Thrush was declared endangered, and entitled to protection under the Endangered Species Act. Fearing that passing skiers would disturb the nesting Bicknell's Thrush, the Forest Service held up the paperwork.
Upon learning that Bicknell's Thrush goes south for the winter and that sking doesn't happen in the nesting season, the Forest Service relented and did the deal.

Lawyers for Capt Jack Sparrow

In a Wall St Journal Op Ed, a couple of Washington lawyers explain the jurisdictional and legal problems that are impeding the fight against the Somali pirates. According to these guys, current law does not have any provisions for dealing with pirates, jurisdiction is unclear, they would have to be indicted and brought before civilian courts, military force cannot be used against common criminals, yadda yadda yadda.
Wow. The entire world has been emasculated by those with law school degrees.
Far as I am concerned, pirates taken red handed can be brought before a court martial and then hung from the yard arm. If the ship lacks a yard arm, firing squad will do. Any warship's captain can convene a court martial, right on the foredeck, and pass sentence then and there. Case closed.
Or do what the Indians did, sink the pirate vessel. They didn't have to worry about legal proceeding after that.
And, in this day and age of radar equipped patrol aircraft, it should not be that hard to spot the pirates at sea and deal with them. And, then we can clean out the harbors from which the pirates operate.
Evidently, dispite lots of TV coverage, the pirate problem isn't yet severe enough to cause real steps to be taken against them.

Wednesday, November 19, 2008

Dodging the issue

Watched the Detroit CEO's (Waggoner of GM, Mulally of Ford, Nardelli of Chrysler, and Gettelfinger of UAW) on TV, in front of the Senate banking committee, begging for a bailout. They all talked, about how hard their companies had worked, how dreadful a bankruptcy would be, how just another $25 billion would save them, how much the union had given up.
None of them mentioned the $75 an hour, plush medical and cushy retirements the UAW workers enjoy, and how Toyota, Honda, and BMW pay $25 and hour less. No one mentioned the fact that Detroit's Caliber, Focus, and Cobalt don't sell as well, and don't sell for as much money as Corolla and Civic. Detroit's designs are less desirable, and it's reputation for quality has still not recovered. No one, not even the Congressmen running the hearing, dared to say a harsh word about brain dead management and overpaid workers, the real problem in Detroit.
This taxpayer was left with the impression that another $25 billion would just stave off the inevitable bankruptcy for a matter of months. The domestic car makers cannot survive with more expensive labor and less desirable products. Why waste $25 billion? Do the bankruptcy, get the labor costs down to what Toyota and Honda pay, lay off the suits, drop the poor selling models, dump the excess dealers, cancel the golden parachutes, and get some decent cars into production.
The reason the Detroit suits are begging for my money is simple. The banks won't lend to them any more 'cause the banks figure they are headed for Chapter 11, which means the loans don't get paid back. I think the banks have it right.

Monday, November 17, 2008

Has CAFE killed GM?

Lot's of folk, especially those who work for GM think so. They claim that to get the average fuel mileage up, GM produces scads of econo box cars that loose money. Less CAFE, GM could concentrate on Silverado pickup trucks and Chevy Surburbans which are profitable. Right.
Unfortunately, those little econo boxes make up the bulk of the cars on the road as I drive to work each day. That swirling mass of Rt 128 traffic is three quarters small sedans, like Corolla. The real volume sellers aren't pickups and SUV's, it's econo boxes. For GM to stay in business, it has to compete in the volume market, or go out of business. Unfortunately the GM suits still don't understand this, and so they whine about CAFE making them build the type of car that most people buy.
It may be that making money in the small car business is harder than building big cars. People won't pay as much for a small car as a big car. But small cars are nearly as expensive to manufacture as big ones. Small cars have roughly the same number of parts as big ones. These parts have to be made or purchased, and assembled. Small parts cost about the same as big ones, and it takes the same amount of labor to install them. So your profit margin on small cars is always going to be tight, but plenty of companies (Toyota, Honda, Subaru, Volkswagen for example) have shown that it can be done.
The Detroit companies have to offer small cars as desirable as Civic and Corolla at competitive prices. Or go out of business.

Saturday, November 15, 2008


This blog here says Sarah Palin nearly saved the McCain campaign. I was a front line party worker manning a store front HQ. Every single person who came in enthused about Sarah Palin as the greatest candidate ever. Every single one. We had two kinds of yard signs, "McCain only" left over from the primary, and "McCain-Pahlin". Everyone asked for the McCain-Palin signs. We ran thru four big cartons of McCain_Palin yard signs, whereas the mere two cartons of "McCain only" signs only moved out after we ran out of McCain-Palin signs.
I think choosing Palin was the smartest move McCain made in the whole campaign. It wasn't enough, but it was the right move.

Obama doesn't like guns much

The NRA sent this interesting quote around by email.


This week, it became clear that the new administration's anti-gun agenda even infects the process of staffing the administration. A widely disseminated questionnaire for those applying for administration jobs asks:

"(59) Do you or any members of your immediate family own a gun? If so, provide complete ownership and registration information. Has the registration ever lapsed? Please also describe how and by whom it is used and whether it has been the cause of any personal injuries or property damage."

/end quote

Hmm. Guess that disqualifies me from a job in the Obama administration. I have a few guns, all of which I've had for forty years or more, never registered them. Don't plan to either. Registration isn't required up here. Yet.

Friday, November 14, 2008

Paulson ubder the TARP

Jim Lehrer had Secretary of the Treasury Henry Paulson on his show last night. Lehrer's opens the discussion by saying "We have spent $350 billion on the Troubled Assets Recovery Program and nothing good has come of it. The stock market is crashing, unemployment is up and sales are down". Paulson didn't want to accept this and Lehrer gave him a good five minutes without interruption to make him case. Paulson claimed the the financial system was better and without the TARP money it would be worse, but never did he bring forth a single number to support his position. Hey we are talking about money here, and if nothing else, money can be counted. Paulson should have had figures, and graphs showing how the financial system has done since October. He didn't.
As my savings looses it value day by day, I find it hard to believe Paulson assertion that "the financial system" is getting better. Not unless he has some numbers to back up his arguments.
So then, Lehrer asks Paulson if the government should bail out GM. Good question. Paulson dodges it and makes a quibble that Congress didn't authorize a GM bailout in the TARP program.
Surely a guy like Paulson, ex Morgan Stanley CEO, has some opinion on the wisdom of handing billions of taxpayer dollars to a doomed company like GM. Why didn't he share them with us TV viewers? It's not like he needs the votes of UAW workers to get reelected.

Thursday, November 13, 2008

Military Aircraft

Aviation Week carried a listing all the "current" warplanes in the world. That's 89 different aircraft manufactured in 15 different countries. Russia, England, France, Germany, India, Canada, Japan, S. Korea, China, Pakistan, Brazil, Italy, Sweden, and the US. The other 180 odd countries of the world are not advanced enough or large enough to manufacture warplanes. Helicopters are the most numerous (36 different types) followed by jet fighters (23). There are 9 jet and 5 turboprop trainers/light duty fighters. There are only 6 cargo planes and the rarest type is heavy bombers of which there are only three.
The oldest warplane is the venerable B-52 which first flew in 1952. The newest is the EADS Mako, which is so new as to still be in the definition phase (hasn't flown yet).

Sunday, November 9, 2008

MY wishlist

I want to fix the economy. Nothing hurts a man (or woman) more than getting laid off. Everyone would rather have a job, than all the social goodies under the sun (free health care, unemployment benefits, free college, food stamps, free child care, lower taxes, retraining, free retirement). With a job, you have the money to buy all the rest. Unemployed you have nothing. We do the most good for the most people when we make the economy grow and create jobs.
"It's the economy stupid." The economy ought to come ahead of everything else, global warming, conservation, Iraq, public transportation,welfare, and pro union legislation.
We need to fix the real economy, the part that produces real stuff that people willingly buy with money. That's farming, manufacturing, mining, logging, transportation, utilities, communications, and entertainment. Financial services, health care, lawyers, government, and education are not part of the productive economy, they just consume money and don't produce anything one can sell.
The real economy is run by companies and corporations. Helping the real economy means helping companies and corporations do well and produce more. Democrats have a reflexive desire to bash companies and corporations. It's been said that democrats love employment, it's employers they cannot stand.
If the incoming democratic administration can surpress their gut level desire to bash business, here is what might be done.
1. Reduce the cost of health care. This will only happen when the patients know the doctor's bills are coming out of their pockets. Right now insured patients don't care what it costs, 'cause its all paid for. We can subsidize the patients in various ways, but the patients ought to be paying the bills. We are putting 16% of GNP into health care, and companies are the ones who pay it. Sixteen cent of every dollar in sales goes to workers health care.
2. Reduce the corporate tax. Right now it's 35% of profits. Drop that to 17% which is what the average taxpayer pays out. Clarify the accounting rules to make it harder to hide profits by cooking the corporate books. Insist that any profit reported to investors, is taxed. Right now various accounting scams allow businesses to show high profits to investors (potential stock buyers) and low profits to the tax man. That oughta stop.
3. Let the free market allocate economic resources. Don't use taxes or subsidies to favor one industry or product over another. The present market crash was caused by a policy of favoring single family home ownership over renting. Don't subsidize oil production, ethanol production, domestic sugar production, farming, road building, and all those other cushy little deals. Don't fix prices, and don't limit competition by licensing things.
4. Keep in mind that we want higher production. Higher production is better than higher wages or higher business profits.
5. We need domestic energy. Sending $700 billion a year overseas just for fuel is an unbearable burden. Real energy comes from coal, oil, and uranium. Wind power goes off when the wind drops, solar power goes off when the sun sets. Real energy is energy available when you need it.

The PBS wishlist

The clock radio is tuned to NH public radio up here. The Sunday morning commentary was a long wish list of things the incoming Obama administration ought to do. Wow. Every lefty-greenie save the world idea was there.
They want to fund alternate energy, purge all Bush appointees from the civil service, do something about the methane emissions from dairy cows, sign the Kyoto treaty, support locally grown produce, you name it, it was there.
Not a word about Iraq or fixing the economy, these folk are out to save the planet and defeat global warming. Nothing about the price of heating oil or gasoline.
The program was a pastiche of stuff called in by listeners from all over the country. Of course the "non-partisan" NPR folk choose which citizens ideas get on the air. I guess NPR is firmly behind global warming (anti global warming)?

Saturday, November 8, 2008

Republicans ought to believe in free enterprize

Free enterprise means the freedom for anyone to go into any business that they please. This story from Arkansas is a clear example of unfree enterprise (otherwise known as regulation). There is no reason to license interior decorators, unless you happen to be an interior decorator. Then the licensing serves to keep competitors out of the marketplace, allowing higher prices.
Free enterprise also means no government price fixing. We abolished price fixing in railroads, trucking, airlines and retail. Those actions reduced prices to the consumers.
Republicans are looking to define their political creed. We could start by saying we favor free enterprise.

Bailout my Chevy from the levee?

GM, Ford and Chrysler are in Washington begging for a federal bailout (handout?). Should we do it? On one hand, I get sentimental about Detroit cars and would like to see them stay in business. I've owned a lot of pretty decent Detroit iron over the the years and it would be nice to be able to buy new ones in the future. It would also be nice to keep the 400,000 UAW workers at the big three employed, along with all the workers at the big three's suppliers.
On the other hand, management runs from poor to absolutely terrible. Product design sucks. The three of them offer 250 "different" models, of which only two are three are nice enough that I'd want to buy one. The 700,000 retiree pensions are such a drag as to sink anyone. They have more retirees drawing pensions than they have workers on the payroll. The health care costs both for active and retired workers are outta sight. Maybe it would be better to let them declare bankruptcy. The workers and retirees would all loose a lot of money, when the court cancels the union contracts and voids the pensions but they would come out of bankruptcy in a position to perhaps make a little money, and a goodly percentage of the workers would still have jobs. Why should my tax dollars go to propping up the ultra plush wages and retirements of autoworkers?

Good Idea

This just popped up in my inbox. Not a bad idea. Sununu is the rare politician who can stand up in front of a TV camera and actually say something, something worth listening to. Most politicians take their cue from Obama and say nothing in rotund rolling phrases.

/begin received email

The next Chairman of the Republican National Committee will set the tone and direction of the party for years to come. The election in January provides an opportunity to elect a Chairman who will revitalize the party and bring us back to our roots. We can select a leader who embraces the status quo or we can select a reformer, a new chairman who is a young, energetic and articulate leader who can re-build our party from the ground up.

Join the Draft Sununu campaign in order to encourage Senator John Sununu to run for Chairman of the RNC.

Join the effort at

/end received email

Good Idea

The next Chairman of the Republican National Committee will set the tone and direction of the party for years to come. The election in January provides an opportunity to elect a Chairman who will revitalize the party and bring us back to our roots. We can select a leader who embraces the status quo or we can select a reformer, a new chairman who is a young, energetic and articulate leader who can re-build our party from the ground up.

Join the Draft Sununu campaign in order to encourage Senator John Sununu to run for Chairman of the RNC.

Join the effort at

Thursday, November 6, 2008

Boeing Strike Settles

And a good thing too. Boeing has a backlog of 900 plus orders for the new all-plastic 787 jetliner at $150 mil a piece. That's $135 billion worth of business, if they can keep it. The 787 is late, and the strike made it later. It hasn't made first flight yet. Yesterday Boeing discovered a mistake in the drawings that will require replacement of thousands of fasteners in the already half built aircraft. Program is two years late and it will get later. Sooner or later, the customers will start canceling back orders and buy Airbus instead.
The terms of the strike settlement are unclear. Aviation Week says the new contract will go for four years, up from three. Pay hikes are 15% over four years. Pension contributions go up $83 a year.
The major work rule issue concerned Boeing's newly instituted practice of having suppliers deliver right to the shop floor. They used to deliver to the loading dock and Intnl Assn of Machinists workers would move the product from the dock to the line. Boeing is only doing this on the 787 line, but wants to make the practice general to the 737 and 747 lines. The compromise allows vendors to deliver to only a few spots on the line rather than everywhere. The machinists claim the jobs of 2920 union forklift operators were saved. Which is an astounishing number of fork lift operators. In USAF we only had a dozen forklifts for an entire Air Force base.
With the rest of the economy sliding down the tube, it's good to get Boeing back to work.

Wednesday, November 5, 2008

So what went wrong?

I managed to get thru the entire day without turning on the TV, not even to watch the stock market croak. Unwinding from the election is called for. Do not start thinking about the next election, let the victors of this one do a little governing before resuming the unending election battles.
But, while the memory is fresh (and painful) let me set down some causes of GOP defeat. Exhibit A, a photograph I took on the opening of GOP headquarters in Littleton. Group shot of all the local republicans in front of the storefront. "How come everyone in the picture is old and greyhaired?" asked my mother. Whereas Obama was running a children's crusade. Maybe if the GOP decided to legalize music downloads? Hollywood and the labels wouldn't like it, but they don't like the GOP anyhow, so what's to loose? A few campaign contributions?
There were a lot of specific things McCain should have said and didn't. On the other hand Obama said little or nothing of substance during the campaign, so maybe what you say on campaign doesn't matter?
Party platforms. The NH GOP had a state party platform 20 pages long, written in lawyerly obfustication, making it useless as a campaign document. We streamlined it, boiled it down to a few simple statements in ordinary English and presented it to the state party convention. The convention turned down the new platform in favor of the old, the 20 pager that didn't really promise anything. Was that because they feared making even vague campaign promises?
McCain never promised the electorate anything you could put a word too. Hope and change worked well for Obama. Next time the GOP ought to at least promise prosperity and a 14000 Dow.
Trashing Ayres, Wright, Rezko and that Islamic fellow wasn't bad, but you can't win just by pointing out the the other guy has scumbag friends. You have to offer reasons to vote for you, not just reasons to vote against the other guy.
McCain wanted to equalize the tax treatment of helath care between the company workers and the self employed. He presented the plan, but neither he nor Palin explained that feature. The democrats attacked it saying McCain was going to tax health care benefits. The GOP never hit back saying it gives the self employed the same tax break on health care that the company workers enjoy.

Hope disappointed

Things didn't look good early in the evening TV show and it just got worse. So, we have a president Obama, and the democrats swept New Hampshire. We are blue and getting bluer. Democrats retained the state house (no surprize there) won the open senate seat and retained both house seats. As of this morning I don't know how my local candidates did. Bummer.

Well, now that the democrats have Congress and the presidency, let them fix the economy, keep nuclear weapons out of Iranian hands, and keep the entire middle east out of Al Quada's hands. At least I no longer have to listen to inane TV talking heads endlessly rehashing the latest poll results.
Let us hope that the Obama administration improves the economy rather than kicking off Great Depression II.

Tuesday, November 4, 2008

How to get a suntan in November

Simple. Sign up for poll standing. Up here in northern Grafton county, we organized poll standers for Littleton, Franconia, Lyman, and Bethlehem, plus Whitefield which is really in Coos country but since Republican organization is a little thin up here, we did Whitefield too.
I nailed together totem poles of campaign signs, passed them out to volunteers. Weeks of telephone calls had rounded up enough volunteers to give sketchy coverage at all the polls.
Rose with the 6:50 alarm clock and rolled down to Franconia with my totem pole sticking out the window of the car. Arrived a few minutes after poll opening to find a few Republican volunteers already on the job. Weather was fine, clear sky and warm. Turnout was heavy, both voters and poll standers. Drove around to the other polling places to see how we were doing. Looked good everywhere. Sunset was shortly after four, it was pitch dark by 5. I finally hung it up after 5, leaving a few other volunteers to cover the last two hours.
GOP did clearly better than '06 where we only had one GOP pollstander in Franconia, and it snowed all day. This time we had 4 to 5 pollstanders all day, as many as the democrats, again unlike '06 when the democrats had us beat hands down.
We don't have any worthwhile election returns yet, but I remain hopeful of a McCain win.

Monday, November 3, 2008

GIGO (Garbage in, Garbage out)

According to the Wall St Journal, insurance giant AIG relied upon a computer model to assess the risk of the trillions of dollars of "credit default swaps" it did. "Credit default swaps" are Wall St code words meaning bond insurance. For a premium AIG insured mortgage backed bonds against default. When the real estate bubble popped in 2006, the insured mortgage backed securities began to default, and AIG had to pay them off. The losses on bond insurance completely overwhelmed the earnings from the rest of AIG's insurance business, and requiring a $105 billion bailout by us long suffering taxpayers.
One has to wonder how senior management at AIG was gullible enough to beleive any kind of computer model could predict the default rate of mortgage backed securities. How can a computer program know the true value of the mortgaged property, keep up with the fluxuation of the real estate market, know the equity in the property and understand the borrower's ability and willingnes to make the monthly payments on time? Short answer, it cannot, and the managers that OK'ed the deals were totaly clueless. Probably all a bunch of MBA's.

If an arm is worth $10 million, what's a leg go for?

A young woman suffered a horrible medical condition. Injection of a drug caused a dreadful infection of her arm, so severe the arm had to be amputated. She sued. She sued everybody in sight, including the maker of the drug. She won in Vermont state courts. The drug maker appealed to the US Supreme Court, claiming that they had complied with all the FDA's rigorous requirements for drug approval, testing, labeling, and good manufacturing practice.
The drug maker has a point. They manufactured a product in accordance with all the rules, and there are plenty of rules. Should they, their employees, and their stockholders be penalized for doing the right thing? Only the Supreme Court can know.
It's terrible for a young woman to loose her arm, but does this justify taking money from a company that did everything the rules demanded?

It's almost over. Thank the good Lord for that

The news media are completely locked onto poll numbers. That's all they report, in between clips of McCain and Obama giving their stump speeches. Everything else in the world is on hold until the election is over.
I think McCain can do it. The poll numbers show strength, and the difference between the two is less than the error in the polls for this January's NH primary. The polls projected an Obama win by 5%, actually Hillary won by 5% which means the polls were off by 10%. And surely Obama has to have scared a lot of voters by now. Think tax hikes, Iraq defeat, and turning a stock market crash into the second great depression.

Wednesday, October 29, 2008

Mastery of the trivia

WMUR TV sponsored debates between Sununu and Shaheen, Horn and Hodes, and Buckley and Shea Porter, the NH Senatorial and US representative candidates. I watched them all. Arggh.
Sununu spoke well, made good points and supported them. I gained a knowledge of what Sununu would do in office.
The rest of them were terrible. They used the statewide TV exposure for vague generalities, spectacular accusations of obscure misdeeds and platitudes. Republican Jennifer Horn failed to point out Paul Hode's complicity in the Fannie-Freddie disaster that caused first the housing market crash ans second the stock market crash. Shaheen sounded like she was campaigning against Bush, who isn't standing for re election, rather than for US Senator from New Hampshire. Hodes came across as a middle aged weasel. Shea Porter and Buckley did themselves no good.

Friday, October 24, 2008

The tax man cometh.

I hear Obama and McCain each claiming that their tax plan will be better than the other guy's tax plan. Unfortunately the US personal income tax is so complex and loaded with gotcha's and loopholes that nobody knows what will happen, no matter who wins. All we taxpayers can figure is the man who wants to spend more will raise taxes more. So far, Obama is miles ahead on the spending front. He plans to offer free health insurance to everyone. That's gonna cost so much it will bankrupt the country.
All of Obama's tasty goodies will have to be paid for some how. Once a federal goodie is offered , it can never be revoked, so each of Obama's pricey goodies will burden us taxpayers for ever and ever. We will have to pay for them somehow, taxes, borrowing, or just plain printing the money, none of which is good for the economy.
Obama's goodies mean taking money away from industry, investment, research and development and just consuming it.

Will a one hour speed bump save the market?

The Dow is down 400 points and the market has only been open for 20 minutes. There is talk about a one hour timeout of trading should the market drop 1100 points. Will just one hour allow enough time to reset all the computers (which sell when the market drops) and reset the investors who will be in solid panic mode?

Thursday, October 23, 2008

Alternative Energy subsidies

Interesting NYT article here. Apparently nuclear energy enjoys a $1.59 per Megawatt hour subsidy where as wind and solar get $20 per Megawatt hour. Let's see, I pay $160 per Megawatt hour up here. So the 1% subsidy doesn't make much difference. The $20 for wind and solar seems a bit much, especially as neither wind nor solar goes into my car or my furnace, my big energy costs.
What does hurt is the green anti nuclear stand. I'm still paying off the damage they did to the Seabrook nuclear plant back in the 1970's. "Stranded cost recovery" right on my electric bill every month, thanks to the Clamshell Alliance. Plus a whopping big share of the cost of a nuclear plant is the humungous pile of paperwork the greens have saddled the industry with.

$150 million "alert system" scratched

An unnamed Homeland Security system to provide unclassified but sensitive warnings of terrorist threats to first responders and all levels of government has been "put on hold". With luck Congress may be able to kill the entire $150 million boon doggle.
The way you pass threat warnings is by email. Everyone reads their email. If the contents are sensitive, or even classified, encrypt the email. Problem solved.

Let's get petty

The MSM are now trashing Sarah Palin over the cost of her wardrobe. How petty (and sexist) can you get? She has to appear in public daily, travel (which clothes hate) and as a national political candidate she has to appear well dressed. Of course she needed more clothes to campaign in.
Plus, women have to work harder than men to appear well dressed. A dark suit, clean white shirt, well shined shoes and a tie and a man is good to go. Women's dress is infinitely more complicated. Any reasonable woman would need more decent outfits to campaign nationally.

Wednesday, October 22, 2008

Roasting Ratings Agencies on Wall St

Sen. Henry Waxman, that bald headed twit, held hearings today to roast Moody's, Standard and Poor's and the other bond rating services. The raters gave AAA ratings to "mortgage backed securities" which later tanked and took down the financial markets. Although the roasting is well deserved and fun to watch, it misses the point.
The goodness of the "mortgage backed securities" was no better than the goodness of the mortgages backing them. There is no way a bean counter in a Manhatten office can know how good a mortgage in California or Florida is. To evaluate a mortgage, you have to know the value of the real estate (which requires a visit to the property and local knowledge) , the income of the borrower (which is privacy protected) and interview the borrowers. No way a bean counter at a rating agency can do this.
The buyers of the "mortgage backed securities" should have known this. Once a mortgage maker knows he can sell the mortgage for cash, and all the risk is passed to the buyer, then he will make a mortgage to anyone with breath in his body. We should close the entire secondary mortgage market because it is impossible to know the soundness of any mortgage backed security.

Tuesday, October 21, 2008

Strange Capitol

So, now we come to really strange forms of "capitol". In return for US taxpayer money the bailed out banks are required promise to sell their stock to the government at today's (depressed) price, sometime in the future. The idea being that the taxpayers are entitled to a cut of any of the bank's future earnings in return for putting up barrels of money. The paperwork to do this is called a "warrent". We used to call them stock options in industry.
According to a Wall St Journal article, these "warrents" would be carried on the books of the bank as "capitol". Wow. First of all, the warrents aren't readily saleable, which makes them questionable as capitol. Second of all, the government owns the warrents, not the bank, so I fail to see how they contribute to the bank's capitol whatsoever, neglecting matters of proper pricing and liquidity.
Then the WSJ writer goes on to worry about how fluxuations in the value of these warrents would make the bank's capitol fluxuate.
Something does not compute here.

Bank Capital?

So, let's run a bank. We accept money from depositors and buyers of bank stock. We lend this money at interest. Question, how much money can we lend? All of it? Not hardly, someone will make a withdrawal and we have to have cash in the till to pay out. Sometimes a loan won't be paid back, and a decent bank can't fail just 'cause one lowlife stiffs them on a loan. So, how much money do we keep on hand as protection against rainy days?
Experience and federal law suggest a bank ought to keep about 10% on hand as "capital" or "capital reserves". The commercial banks adhered to this. The "investment banks" aka stock brokerage houses, ignored this rule, went down as low as 3%, and are now all dead. RIP Drexel Burnham Lambert, Merrill Lynch, Lehman Bros, Bear Stearns, and company.
Now keeping plain old cash in the vault is secure, but that's a lot of cash that isn't earning interest. Can we count ultra safe securities, T-bills say, as "capital reserves"? Well OK. How about blue chip stocks and bonds? Perhaps. How about riskier stuff like mortgage backed securities? Well, we allowed that to our sorrow.
Next question, after we demand that banks keep a certain amount of capitol on hand, and after we allow things other than cash to serve as "capitol", how do we count said capitol? Do we count the stocks and bonds and riskier stuff at purchase price or at current market value? Speaking as a depositor, I say count every thing at current market value. The purpose of the capitol is to pay off depositors and cover bad loans. To do any good, the capitol must be converted into cash, the stocks and bonds sold. "Capitol" that cannot be sold at all, or only sold for very little money is worth little to nothing when it comes to paying off the bank's obligations.
Hence the "mark-to-market" rule which banks hate. Under "mark-to-market" the bank must count as capital only the market value of securites. The rule was put in after the Enron scam which involved carrying worthless stuff on the books at purchase price.

Monday, October 20, 2008

New York Times strikes out again

Columnist writes about the hardships of a career in science and engineering. He bemoans lawyers starting salaries of $145000 whereas he claims a physics PhD starts at a mere $45,000. I don't know what universe this commentator lives in, both in the real world, a bachelor's degree in chemical, electrical, mechanical or civil engineering starts at $50K or better, right out of school, and reaches $100K with just a few years industry experience. For every lawyer starting with a big firm right out of college, a hellofva lot 'em work part time and never rise much beyond doing residential real estate closings.
Engineers get to design the next Iphone, the next game machine, space ships, aircraft, buildings and every thing else that gets made. It's more rewarding than doing closings.

Wednesday, October 15, 2008

Campaign Sign Maintainance

Got a call from down state yesterday, someone defaced one of our scarce 4 by 8 foot McCain Palin signs, the one down at Clark's Trading Post. So I drove down to inspect. Ran right thru Franconia Notch in the strangest weather ever. A low low cloud scraping the ground and flowing up thru the notch like water.
Found the defaced sign. Some highly mature and principled person had written a rude word across the sign in black spray paint. Their spray can must have been low on paint 'casue they only defaced one side of the sign. So I drove into North Woodstock and bought a can of white paint at the NAPA auto parts store, along with some masking tape. About 10 minutes work of masking and spraying refreshed the white lettering, and the sign, if not good as new, as least looked OK from the road.
Let's say it's just some kids...

Radar Recon on the Taliban

The RAF is taking delivery on their new recon aircraft, Astor, named after the radar rather than the airframe. (Airborne Standoff Radar). It's a twin engine jetliner (a Bombardier Global Express) with the radar mounted in a canoe shaped pod underneath the fuselage. It is said to be sensitive enough to detect men walking on the ground. It's a smaller and cheaper version of the USAF Jstars and Rivet Joint. Size reduction comes from leaving off the 20 odd flying radar observers and just data linking the radar "take" to a ground station, resulting in a much smaller aircraft overall.
The computers onboard that do all the work are running Windows. Aviation Week interviewed a British official. He said "There are lots of things we would like to do better-- such as faster boot times...." Later one he admits that rebooting the Windows computers can take as much as finve minutes. That's Windows for you, sluggish and crashprone.

Sunday, October 12, 2008

The Great Chipmunk Escape

Chipmunk spent a day lurking under the washing machine. Cat's attention span wavered, and last night chipmunk scurried across the living room and dove under a bookcase. It must have gotten hungry, there isn't much worth eating in the cellar. Any how cat got another tour of chipmunk guard duty, but never scored.
This morning, while cat was out, chipmunk reappeared. I was able to herd it out the open front door and back into the woodpile. I do hope it finds something to eat and drink after a day long fast under the furniture.

Gm, the Bad and the Ugly. Buying Chrysler.

GM senior management just demonstrated yet again a complete lack of common sense. They have a car company that has too many factories, too many over paid workers, too many dealers, no decent products, worthless stock, a credit rating in the toilet, and money is running out. And they are wasting time dickering to buy Chrysler, a second car company in just as bad, or maybe worse shape? For what?
Chrysler is so worthless that Daimler gave it away to Cerberus. If memory serves Daimler paid $30 billion for Chrysler ten years ago and they dumped it for a couple of billion in stock, not cash last year. That's 'cause Chrysler's liabilities in terms of plump UAW pensions far outweighed any money it could ever make.
GM cannot afford it, hell, GM can't afford to buy toilet paper for the company restrooms. Why in the name of all that's holy are they thinking of making their problem bigger? GM needs to fire all their senior management starting with CEO Rick Wagonner and going down about three levels from there. The GM suits have performed one disaster after another, going back 20 years when they threw away billions of dollars just to get Ross Perot off their board.

The Good news from GM, Volt is coming

A long article on the coming Chevy Volt in Popular Science. The project is real. The battery will be lithium ion. They have two battery suppliers, both of which have delivered prototype batteries to GM. A123 Systems from Massachusetts and Compact Power Inc from Korea. The battery specs call for 40 mile range, weight less than 400 pounds, push the car from 0 to 60 in 8 seconds, a ten year 150000 mile service life, and store 16 kilowatt hours, which is close to the electricity my house uses in a day.
Ten "Mali-volt" test vehicles (Volt drive train in a Malibu body) are running around GM test tracks. The first Volt prototypes will hit the track this month. The batteries are under test, both charge/discharge cycling and oven testing to evaluate life. Battery life is critical, the battery is the most expensive part of the car. If it fails under warranty GM will loose money, if the car gets a reputation of battery dying at 50000 miles resale value will nosedive.
The Volt project is real, not vaporware. GM will bring the car to market in 2010. If it works properly, it ought to sell for something in the mid thirties, which is Prius money. Prius sells briskly even though it's too costly to make economic sense. With a 40 mile battery range, plenty of Volt owners could go for months on just electricity, no need to buy gas at all.
With luck, Volt will give GM a real product, something that people buy 'cause they like it.

Saturday, October 11, 2008

Why I won't vote for Obama

1. Obama has promised repeatedly to pull the Army out of Iraq as soon as possible (ASAP). That will turn Iraq over to Islamist extremists, Al Queda, the Taliban, the Wahabis, the Iranians, there is no lack of them. Once that happens, the rest of the middle east will follow. With the exception of Israel, no middle east government has the strength to resist the call to Jihad. Without American support, the tender young government in Iraq will fall, and the Islamists will win. The Iranians will get nukes, and dominate the region. The Saudi's will collapse and Amadinajad will own all their oil. Once this catastrophe happens, there is no recovery. We will have to live with world oil supplies controlled by our enemies.

2. Obama will turn today's stock market crash into a long lasting depression. He and his people believe in the goodness of government furnished health care, housing, easy mortgage money, education, child rearing, alternate energy and countless other expensive goodies. They don't understand that the money to furnish all these goodies has to come out of taxpayers and industry. He doesn't understand that squeezing the necessary funds out of taxpayers will cripple our economy and turn the US into Europe, a place with no growth, 10% unemployment, a declining birth rate and a hostile underclass.

3. Who will Obama appoint to the Supreme Court? Tony Rezco? Jeremiah Wright? Bill Ayres? Does Obama have any friends who aren't leftwingers? The country is stuck with Obama's choices for thirty years.

An Obama administration will damage the United States in ways that cannot be repaired for a generation.

Mighty Hunter has struck out

Yesterday I'm sitting on the deck, soaking up some Indian summer warmth before the winter starts. From under the deck comes the crash of falling firewood. Damn, I think, that cat is getting clumsier than ever. A few minutes later cat trots up the stairs with a chipmunk in it's jaws. Musta been hiding in the woodpile. As usual, cat heads right into the house, planning to disembowel and eat chipmunk on the living room rug. I move to intercept cat. Cat drops chipmunk on the rug.
Chipmunk has been doing a good job of playing dead. Comes to life and runs for it. It's fast, and leads a merry circus around the house, cat in hot pursuit. Instead of zooming out the open door, chipmunk dashes down the cellar stairs. I turn on the lights and find cat patrolling the washing machine. Chipmunk has more patience than cat, it's still in the basement. Cat is still doing occasional washing machine patrol, but so far without success. That's why it's name is Stupid Beast.

Thursday, October 9, 2008

Knight Rider meets Baywatch

Watched this revival of the old (70's? 80's?) TV action adventure show. Like the original, the show features a hunky secret agent driving a talking car. In the original show the car had an impressive voice, deep, well modulated, calm, and knowledgeable as Mr. Spock. Michael, the good looking male lead, had a deep relationship of trust and friendship with the car. To the exclusion of girls it seemed.
The revival fixed that right up. Michael now has two girlfriends, one who he has been sleeping with, and a real cutie who wants to start sleeping with him. The scene is California beach/surfing, with the car, (black Mustang) simmering in a sandy sun struck beach parking lot while Michael, and his cutie, step over acres of bikini clad tanning girls and rub elbows with hunky surfers. I kept wondering if the Mustang's upholstery would melt after parking all day in the sun.
The plot is a bit difficult to follow. After a shoulder launched anti tank missile strikes home on the car, there is an explosion, fire, smoke, and then the camera closes up on a smoking crater where the car had been. They cut to commercial. After the 5 minute commercial break, the show returns, and we are underwater, looking at the car, converted to a cozy minisub, with Michael and the cutie inside. Just how the car got over the 500 foot cliff and into the water, ahead of the missile, without so much as a splash is left to the viewer's imagination. The dialog is weak on proper names, so I missed the name of the first girlfriend and the gorgeous Asian American cutie.
I may watch it next week to see if the cutie is still in the show. Her bikini was cute too.

Fake Science goes unchallanged

Fox & Friends was interviewing an anti childhood vaccine person this morning. This person first said "one in six American children has a developmental disorder". Oh really? I personally know better than 100 children and only two of them suffer from "developmental disorders". That's less than one in fifty, a far cry from one in six.
Then the person went on to call mercury "the second worst neurotoxin known to man". Right. Cobra venom, cyanide, arsenic, sarin, and mustard gas move over, mercury is the new king of poisons. The mercury amalgam fillings in my teeth have been there a hellova long time and they ain't killed me yet.
Needless to say, the Fox newspersons never challanged any of this, or even asked for evidence.
Want to bet none of them ever took high school science, let alone college level science?

Wednesday, October 8, 2008

The fundamentals of the economy are sound

At least they were when McCain said this. Fundamentals are GNP growth (2.7%) and unemployment (6%). Exports are up. Despite Obama's mockery, these are good numbers. If GNP is growing, we aren't in a recession. Six percent unemployment used to be considered normal.
The financial world is sliding down the chute, but the real economy is still doing reasonably OK.

Things McCain should have said last night

1. Name a few names responsible for the Wall St disaster and promise vengeance. Start with Barney Frank and Chris Dodd, then add some targets of opportunity.
2. Point out there are only two exit strategies from war, victory or defeat. He wants victory, what does Obama want?
3. His $5K tax credit plan puts the self employed, who have to purchase their own insurance, on the same footing as the corporate employee who gets his free.
4. In response to the "what will you cut now that the USA is broke" question, suggest ending all farm subsidies, ethanol subsidies, federal highway construction, energy bills, and earmarks. Close down the education dept since education is a state matter, like wise health and human services cause welfare is a state matter.
5. Produce a list of reforms to prevent the Wall St disaster from happening again.

Tuesday, October 7, 2008

Do we need the "secondary mortgage market"?

Secondary, as in a mortgage trading market, like the stock market. Fannie and Freddie started the thing and look how it turned out. Used to be, up until about 1980, that banks and savings and loans wrote mortgages with their own money. Since their own money was at risk, they used to check out the borrowers pretty closely to insure that the loan would be paid back.
Once a secondary market exists, the original lender can sell his mortage thus avoiding all risk. Which encourages writing riskier mortgages, 'cause once sold, you don't care anymore. Up til now the secondary market has encouraged a whole lot of people to sign mortgages too big to pay off, financed speculators buying houses to flip them, jacked up the price of housing, and financed building acres of houses that can't be sold. And pushed the entire economy over a cliff into the next great depression. Do we need this?
We could eliminate the entire secondary mortgage business with a simple law stateing that mortgages are non transferable. A mortgage is a contract between a single borrower and a single lender, and cannot be sold. As a mortgage holder I like this. I sign a mortgage with the XYZ bank, and that's that. I don't have to worry that XYZ will sell me and my mortgage to someone awful.
The banks, real estate people, builders, and contractors all claim that they need the secondary market to raise the cash to do the mortgages. In effect, the banks borrow the cash on the secondary market and then lend it out again. I say that banks can raise all the money they need by just paying decent interest on savings deposits.
Eliminate the middle man. Make the banks responsible for writing mortgages that will get paid off. Cut the price of mortgages and put all the secondary mortgage market people to work doing something of real economic value.

Monday, October 6, 2008

Dow is down 400 points by 10:30. Click too fast and post twice


Dow is down 400 points by 10:30


Regulation? Isn't Sarbox enough?

We shouldn't let the Democrats get away with calling for regulation as a cure for the $700 billion bailout problem. There was plenty of regulation, with Sarbanes Oxley the latest installment. Sarbox has reduced the number of initial public offerings to zero, and driven the merger and acquisition business off shore. Plus it has made the bean counters rich and the rest of us poor. Republicans have tried to regulate Fannie and Freddie since 2003 but Democrats, fearing to loose the gravy train of Fannie and Freddie money, defeated all attempts. Today's $700 billion disaster is the direct result of that Democratic policy.
Used to be, before Obama, that deregulation meant ending government price fixing. Over the years regulation (price fixing) of ground freight rates and air fares was phased out. Deregulation brought mass air service at good prices, and vastly cheaper shipping. Every thing we buy got shipped from somewhere, so lower freight rates benefit us all.
The Obama folks now blame the $700 billion catastrophe on "Republican Deregulation". That happens not to be the truth. The $700 billion was caused by democratic opposition to regulating Fannie and Freddie, not by lowering freight rates and air fares.

Sunday, October 5, 2008

Health Care vs Obama & McCain

McCain wants to level the playing field between employees and the self employed. Right now employees get health insurance thru their company and it's tax free. The self employed have to buy their own health insurance with their after tax dollars. McCain wants to even this out. Everyone gets a $5K tax credit (subtract $5k from your income tax bill), and the employees pay income tax on their health insurance benefit , just like they do for their salary. So both the employed and the self employed get the SAME tax treatment for health insurance.
Obama has been attacking McCain's proposal saying it would cause employers to drop health coverage. I fail to see the logic of this argument.
Speaking as one who has worked as an independant contractor and as an employee of big corporations, McCain has a fair plan. It's unfair to give corporate employee's favorable tax treatement and deny it to the self employed.

Everyone wants McCain PALIN signs

We get a lot of traffic at the Republican election HQ. Everyone asks for yard signs and bumper stickers with Palin name on them. We have made a couple of resupply runs down country, but cannot keep up with demand. Most of the time they have to settle for a plain "McCain" sign, of which we still have a goodly number left over from the primary.
Palin is wildly popular up here. Although surely Palin was nominated to appeal to women, in actual fact she is immensely appealing to men as well. The men walking into HQ uniformly admire Sarah, saying a woman that cool and that tough is just what the country needs.

Friday, October 3, 2008

Sarah Palin Debate

I watched it. Sarah was great. Poised, confident, feisty, and speaking some real substance. Biden was smooth, but his words just sounded good with no real substance behind them. I guess 30 years experience allows one to reel off platitude upon platitude without skipping a beat. I'll score it even. Sarah did not crush Biden, but heh, you can't have everything. Biden keep quoting damning "facts" which need some serious fact checking. For instance Biden repeatedly rapped John McCain for a "$4 billion tax break for Exxon Mobil". I never heard about that one. I do know Biden voted for the last "energy bill", and we all know that was a package of goodies for the oil business.
I thought Gwen Ifill's questions were poor, that pastor at Saddleback had much better ones. For instance "What decision do you regret the most". That's a job interview classic, which gives a dumb jobseeker an invitation to confess to bad stuff. Sarah at least knew the standard response for that one. Or "Which situation is worse, Iran or Pakistan". Hell, we all know the answer to that one, both are disasters with no good solutions in sight.

Tuesday, September 30, 2008

Children for Obama, on U Tube

The kids are cute, but the level of political indoctrination is kinda creepy.

Playing the blame game

Why is Wall St in trouble? At root, too many non performing mortgages. Too many mortages granted to borrowers who couldn't afford to keep up the payments. And/or too many mortgages granted that were more money than the property is worth. Used to be, banks only granted mortgages with monthly payments less than a third of the lender's income, and in amounts less than the value of the property. Banks were careful lending money, lest they lose it.
Then Fannie and Freddie came along to buy mortgages off the banks, the risk to the bank went away. Once sold, the bank is out of jail free, the loan can go into foreclosure and it's no skin of their nose. Fannie and Freddie bought more and more mortgages and then started buying sub prime mortgage bonds. They borrowed money all over the world and poured it into shaky mortgages. House sales, house prices and housing starts went up. As long as they could sell mortgages to Fannie and Freddie, the banks kept making them. In short, Fannie and Freddie's willingness to buy mortgages and sub prime mortgage bonds created the bubble.
Way back in 2005 a bill to put a cap on Fannie and Freddie's borrowing power went up the Hill. It was supported by Paul Volker, Alan Greenspan, John McCain, the Wall St Journal, and the Bush administration. It was opposed by Barney Frank and Chris Dodd, and failed to pass. If it had passed, we wouldn't be where we are now.
In short, an attempt at regulation was defeated by the very democrats calling for more regulation today.
Fannie and Freddie used to make massive campaign contributions. Barney, Chris and a certain Barack Obama were the top three recipients of this largess. You get what you pay for.

Election Headquarters in Littleton

So we got open. We have banners, signs, bumper stickers and a store front. The location is close to ideal, center of Main St Littleton. Good foot traffic. The McCain Palin signs are flying out the door. The just "McCain" signs, left over from the primary, just don't have the attractiveness of the McCain Palin signs. This reinforces my view that picking Sarah Palin was one of McCain's best decisions.
It's autum leaf season up here, and the number of out of state tourists is impressive. Fully a third of the walkins at the HQ are out of staters. They all ask for signs, saying that they are unobtainable back home. One advantage for being a battle ground state. It's also impressive just how many tourists we get and from so far away (Texas, California, Ohio) Although Littleton is a fine north country small town, it lacks the amenities of say, Boston. All we have to draw tourists is the fall foliage, the Franconia notch scenery, and the up country ambiance. It's pleasing that such simple things draw so many tourists.
Had a reporter from the local paper (Littleton Courier) drop in yesterday, looking to write up a story. Naturally, we were overjoyed at the prospect of publicity. We chatted with him for as long as he could stand it, named names, gave him everything thing we could remember or think of. The reporter then mentioned that he had just come from the Democratic election HQ just up the street, and the democrats had told him they were not authorized to speak to the press and he would have to contact Concord or Manchester. Hmm. Are these democrats a political party or an underground conspiracy?

Thursday, September 25, 2008

Republican Election Headquarters in Littleton NH

It all started last week. The Grafton County committee chairman called a meeting of the "North of Franconia Notch" republicans. He spoke of the need to get out the vote up here. Some thing caught fire, and the dozen of us sitting round the table decided to open a storefront Republican HQ in Littleton. Things move fast. There was an empty storefront, right in the center of town. Money was raised, publicity sought. Had a work night to get it going last night. People and tables and ladders and vacuum cleaners appeared. The lights work, toilet flushes, the store window is full of campaign signs. Grand opening is Saturday. 4 PM.

To bail or not to bail, the $700 billion question

Watched the TV to see if Wall St was going to get $700 billion in my taxes and everyone else's taxes. A vast waste land. Fox talked about McCain canceling/postponing Friday's debate and what Obama thought about that. Endless campaign chitchat of little interest. A complete lack of information on the bailout. Like how many votes does it have? What are the terms? What amendments are the democrats pressing for. Does any Congress critter support the administration proposal? What happens if we do nothing? What do business leaders, labor leaders and academics think? Fox is beyond clueless.
The president came on at 9PM. He should have said "Cough up $700 billion or the Great Depression comes back". Trouble is, people would take him seriously and start selling every stock they own. So he couldn't say that. In fact, TV viewers ought to remember that responsible officials, in being responsible, will minimize the trouble lest they make it worse. Sen Chuckie Schumer pushed IndyMac bank into bankruptcy a couple of months ago with just a memo badmouthing their financial position. Of course Chuckie isn't a responsible official.
It's clear to me that the real issue is how much cash to put into the banks. All the talk about the evils of bad mortgage backed securities clogging the system is just talk. The banks are out of money. Paulsen wants to pour tax dollars into the banks to keep them afloat. To make things look a little better, he calls it "buying illiquid assets", but illiquid is a nice way of saying worthless. So it gets down to giving the banks a big Christmas present.
The original proposal was Paulsen becomes Santa Claus, with the power to decide who gets how much. Nice deal for the Treasury Secretary. On the other hand, he will do a better job than the pork loving Congress. Far as I can see, Congressional calls for "oversight" really mean Congress wants to hand out the money to their special friends, rather than letting Paulsen do it.
The bailout would be more palatable to us taxpayers if the senior management of the bailed out firms got hurt. Like no bonuses, ever, put the company jet on E-bay, cancel all severance (golden parachute) payments, stock options, and other goodies. Trim retirement benefits back to Social Security levels. Top management salaries reduced to $1 a year. No salary in the entire company to exceed $100K. Companies claim they pay top salaries to attract top talent. Any company dumb enough to buy sub prime mortgage securities doesn't have top talent. Might as well save a few big ones by skinning them down to the bone. Besides, I enjoy a little payback as much as any other man.

Sunday, September 21, 2008

Punting thru the Pundits, on Sunday

Watched Meet the Press, Washington Week, and the McLaughlin Group talk about Wall St this morning. With one exception, the pundits and Henry Paulson (guest on both ABC's Stephanopolis show AND NBC's Meet the Press at the same time) spoke in vague generalities. Or flagellated the entire country for greed, or "things that go up must come down". Little to no fingerpointing.
The one exception, Mort Zuckerman on the McLaughlin Group. He said Fannie and Freddie kicked off the sub prime mortgage disaster by buying sub prime bonds. He, the Wall St Journal, McCain, and the Bush administration have been calling for Fannie Freddie regulation for years, but Fannie and Freddie killed it with campaign contributions to Obama, Dodd, Biden, and Barney Frank, plus a vigorous lobbying effort on the rest of the Congress. Regulation of Fannie and Freddie means putting a lid on the amount of money they could loan and forbidding them from buying sub prime mortgage bonds. Zuckerman also faulted the SEC chairman for loosening the capital requirements on banks. Used to be, back before 2000, banks were only allowed to lend up to 11 times their capital. The SEC under Cox raised that to 30 times, and the now defunct Bear and Lehman were up to 33 times when they croaked.
Why does the capital to loan ratio matter? Simple, some loans default. To keep the bank alive after losses, the bank needs some of its own money in the till. Under the 11:1 capital rule, a bank could survive a loan loss of nearly 10%. Under the 30:1 rule, all it takes is a 3% loss and the bank is broke.
McCain is right to call for the head of the SEC chairman. The SEC's job is to prevent a Wall St disaster. The chairman has clearly failed in that mission.

Highland Games in New Hampshire

The annual Highland Games festival was held at the Loon Mt Ski resort. Scotsmen of all kinds, (real, synthetic, and American) come to wear their kilts and watch dances, games, caber tossing and the like. It's a slow weekend up here, summer is over and the autumn leaf season hasn't started, so anything to draw the tourists is a good thing. Weather was perfect, warm and cloudless and sunny.
Next door classic American roadside tourist attraction, Clark's Trained Bears, opened to take advantage of the tourist traffic. By noon the parking lot off US route 3 was full of happy tourists, there to ride the steam railroad, watch the trained bears perform, and savor the lovely Fall weather.
The Ammonousic Valley Railroad Association was invited to set up the big portable HO train layout and run it thru the weekend. Setup was Friday, a simple two hour job. Saturday we brought down the HO model trains to run for the fascination of 12 year old children. All day crowds flowed past the layout and ohhed and ahhed as the tiny steamers whirred around the track. For providing the entertainment, we got a free lunch.
Clark's collection of antique equipment was in beautiful repair. They had an 80 year old railbus with fresh paint smoother and glossier than a new car. They had three steam engines steaming, brass all polished, pulling carloads of tourists around the property. Rich clouds of wood smoke rising from the stacks, white clouds of steam from the whistles and pop off valves. Diesels just don't put on the show that steamers do.

Thursday, September 18, 2008

Bond Insurance brings down AIG

AIG has been insuring sub prime mortgage bonds. Lots of them. Investors looking at AIG liablilities see nothing but disaster, as trillions of dollars of insured bonds get ready to default. It won't help AIG today, but a lesson learned from this. Don't insure bonds, any kind of bonds, ever again.
The availibility of insurance allowed greedy but clueless investors to buy risky bonds and feel good about it because they were insured. Trouble is, when times get bad, ALL the insured bonds default at the same time. No insurance company is wealthy enough to make good when everything fails at once. So, the investors are left with worthless bonds, and worthless insurance. A bond so risky that it needs insurance is too risky to sell. If the insurance hadn't been available, those bonds wouldn't have been sold, which would be a good thing.

Wednesday, September 17, 2008

Georgia gives the Space Shuttle new life

After years of talk about retiring the Space Shuttle, now the NASA people are talking about squeezing a few more missions out of the old bird. The original NASA plan was to shut down the Shuttle and then use the money saved to build a new ground to orbit system (Ares). In the years between the last shuttle flight and the first Ares flight, we would use the Russian Soyuz capsule to get to the International Space Station.
Well, after Georgia, relying on the Russians for access to space doesn't seem so pleasant.

Stereo Missile Warning

In this day and age of shoulder launched SAMs, combat aircraft now carry missile warning electronics. One version of same, when it sees an incoming missile, gets on the aircraft intercom and cries out "Missile! Missile! Missile!". The Swedes have improved on that.
Human ears are very good at telling the direction of a sound. The Swedish system plays with the timing and phase of the sound going to the pilot's left and right earphones. This gives the sound a direction left/right and up/down. Naturally the system makes the sound come from the direction of the incoming missile. The pilot instantly knows which way to turn to evade.
Clever idea.

Monday, September 15, 2008

A Grafton Country Wedding

Big event. My niece got married on Saturday. This happened out of doors at the family farm. Saturday was a single day of sunshine sandwiched inbetween two solid weeks of rain and the remnants of Hurricane Ike. Scads of guests, set up a huge white tent for the reception. Filled an aluminum canoe with ice, and beer. Squeeze bottles of Deep Woods Off set between the water pitchers and the salt and pepper shakers. Hordes of wedding guests turned up days in advance to pitch in and spiff up the place. A couple of years worth of home projects got finished off and looking good. Vows were said at two in the afternoon. The beer lasted until 2 AM the next morning.