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?

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.

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.

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.

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.

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.

Windows XP gets the slows

Daughter returned from overseas last weekend, bringing back her Compaq/HP 6516 laptop with the slows. Apparently the machine caught something awful from a flash drive in the Kirghiz Republic. It boots slow and runs slow. Takes 3 minutes to boot. Runs so slow as to cause static while playing music.
So, we ran AVG anti virus, Spybot Search and Destroy, Ad Aware, Microsoft malicious software removal tool, Malware bytes, and UnHackMe. No improvement. Uninstalled a good deal of HP bloatware on general principles, found a patch that allowed us to see hidden files. Studied Task Manager's process list, looking for strange processes. No joy. Something is lurking in the laptop and we can't see it. If you can't see it you can't kill it.

Poltical Thing

TV was full of 9/11 remembrances all day yesterday. This lasted up and into the NewsHour with Jim Lehrer. They had some pundit on, talking about 9/11 and he said something like "It's too bad that 9/11 became so political."
Hmm. Unprovoked attack in peacetime with higher casualties than Pearl Harbor. And this guy thinks it shouldn't affect the politics of the United States? Pearl Harbor got us into WWII and ended with nuking the enemy. By those standards, the American response to 9/11 was quite restrained and civilized.

Kim Jong Il may be ill. Or dead or dying

North Korean dictator Kim Jong Il failed to appear on the reviewing stand for the North Korean version of a Fourth of July parade. He hasn't been seen in public for several weeks, creating speculation that he is dead or dying.
If so, the world gets to see if the North Koreans have a succession plan. Last time, Kim Il Jong managed to pass the dictatorship to his son, Kim Jong Il without a ruckus. If there is an heir apparent this time, I never heard of him. If the seccession doesn't pass smoothly to someone, the country may fall apart. Leading to a sticky situation.
The South Koreans will face intense pressure to intervene to maintain order and rescue numerous relatives from the chaos that will break out. The Chinese will be under pressure to intervene to maintain North Korean as a buffer state. They certainly don't want the pro American South Koreans to expand North and become their new neighbor. The possibilities for serious trouble are obvious.

Lipstick on a Pig

Fox news has been replaying Obama's "Lipstick on a pig" comment all day. Much as I enjoy watching the media bash democrats for a change, and much as I like Sarah Palin, I'm prepared to give Obama a pass on this one. It's a well worn cliche, I use it myself upon occasion. Obama is pretty bright, and he likely knew the cliche would draw a chuckle from the crowd. It's a zinger, but Sarah has tossed a few good zinger's Obama's way ("kinda like a community organizer only you have real responsibilities") . So maybe Obama is entitled to a zinger or two himself.

Freddie and Fannie

We taxpayers are gonna take a solid hit on this one. It's probably necessary, Fannie and Freddie bonds were sold all over the world and were regarded as good as US treasuries. If we default on the Fannie/Freddie bonds, it will weaken the credit of the United States, making it much more expensive, maybe impossible, to sell the bonds that keep the US government solvent. Right now the US enjoys the reputation of the safest haven for money on the planet. Anyone can invest in the US and not get ripped off, not get nationalized, and not get inflated to death. Even the Chinese, who don't like us very much, buy our T-bills 'cause they are safe. If the Americans welsh on the $5 trillion worth of Fannie/Freddie bonds, the rest of the world will not soon forget. And the world wide river of money flowing into the US will dry up. So the treasury had to step in.
Big question, what to do next? Do we really need Fannie and Freddie to finance houses? Up till the 1980's banks financed mortages from deposits. To get more deposits, the banks used to pay real interest on savings accounts. Today the banks pay depositors dirt, and prefer to raise money by selling bonds on Wall St bearing a hellova lot more interest than they will pay a depositor. Or, they sell the mortgage outright to Fannie, Freddie, or a gullable Wall St brokerage house like Bear Stearns. Trouble with the "sell the mortgage" plan, is that once sold, the mortgage issuer is off the hook. Assuming enough gullable buyers, the issuers will write terrible mortgages and sell them off for good money. That is the cause of the sub prime catastrophy.
So where do we go now? I think we ought to wind down Fannie and Freddie, over a ten year period. Have them buy ten percent fewer mortages each year until in 2018 they close their doors for good. Prohibit them from dabbling in the sub prime swamp. Prohibit them from lobbying Congress and from hiring ex politicians.

Want can I say about Sarah Palin?

Darn little that hasn't been said by others. She has dominated the media for the last week.

Technical experience vs people skills

The airwaves are full of talk about experience, who has it, who needs it, who brings what experience to what ticket. "Foreign affairs experience" is spoken of with bated breath, as if it were the unified field theory revealed but to a few. Actually, foreign affairs are about the same as domestic affairs, only the foreigners can't vote against you. So you can push them a little harder than domestic opponents and still get reelected.
A president comes into office and is immediately overwhelmed by a zillion professional advisers from the bureaucracy, the military, the intelligence services, the lobbyists, the congress, the press, academia, the party, and every joe citizen with access to email. There is no lack of experts on any question under the sun. The trick for the office holder, is to find the few truly knowledgeable advisers and filter out the zillions of loudmouths with mere opinions. Everyone has an opinion, only a few truly know what they are doing.
In this respect, Sarah Palin is well experienced. Taming the Alaska political machine, winning the governorship, acheiving an 80% approval rate, raising five children, dealing with a husband who races snowmobiles, and cutting a tough deal with big oil, shows a rare understanding of people and negociation therewith.
If God forbid, something should happen to McCain, Palin looks tough enough to carry on. And, she shares McCain's views, so a succeeding Palin Administration would not negate everything a McCain administration managed to accomplish. Her practical experience exceeds that of Obama.

Island of Seven Cites by Paul Chiasson

Sub Title Where the Chinese Settled when they discovered America. The author discovered a big, previously unknown stone walled settlement at the top of Cape Breton Island. It's in the gulf of St Lawrence, right on the northern end of Novia Scotia. The author gives a solid, spare no obscure reference, review of European exploration records of the area, going back before Columbus, and finds no mention of a European settlement on the spot. He suggests that Chinese voyagers from the heroic era of Zhang He (1400's) settled on Cape Breton to work a gold mine. He points to strong Chinese influences on the local Micmac Indians, matters of dress, advanced knowledge of navigation, sailing, and medicine. The Chinese were sailing to East Africa, and there is a Chinese map from the 1400's showing both sides of Africa, good evidence that they had rounded the Cape of Good Hope, a century before Bartholomew Diaz.
Chiasson points to favorable ocean currents that could carry a ship from Cape of Good Hope to the St Lawrence. The Chinese vessels were capable of round trip voyages from China to East Africa. Any ship with that sort of range could make the trip from an East African harbor to Canada.
Personally, I feel the voyage length is extreme, and there are plenty of more inviting sites to settle in North America than Cape Breton Island. Also, the Atlantic westerly winds would sooner or later drive a Canada bound Chinese vessel into a European port.
Since, it's a fascinating thesis, and the site on Cape Breton Island deserves excavation by a professional archeologist.

New Orleans dodges a bullet, barely

Thank the good lord, the levees held, and New Orleans didn't flood, again. On the other hand, it was close. That video of the water sloshing over the top of the Industrial Canal levee is sobering. If the water rose another foot, it would have poured over the top and filled New Orleans up just like last time. Sounds like a lot more expensive, federally funded levee raising is in order.