How smart are bankers, really?

Brian Wesbury writing on the Wall St Journal's op-ed page said "Beneath every dollar of counterpary risk, and every swap, or leveraged loan is a real economic asset." Oh really? Let's parse that out. "Real economic asset" should be something like a house, a car, a factory, an airliner, something physical that can be repossessed and sold. Then there are "near real economic assets" like paper money, stocks and bonds. Issued by powerful governments or corporations, the near real stuff depends upon the strength of the issuer rather than intrinsic value. Both real and near real assets are reasonable things to buy and sell.
Then we come to "securitized mortgage bonds". Are these real? A mortgage is real, the mortgage holder can seize the property if the borrower defaults. The owners of securitized mortgage bonds don't get that right. Are they backed by powerful corporations? No way, they are "off the books" and offered by "special investment vehicles". In short, the "sub prime mortgage crisis" roiling Wall St is the trading of unreal securities. Investors wised up last summer and stopped buying them.
Brian Westbury is the chief economist for First Trust Portfolios, L.P. His faulty understanding of the economy seems to be wide spread on Wall St. Investors with First Trust are in for a bad time in the very near future.

Falling Satellites

News is full of stories about a US reconnaissance satellite about to de orbit. It's fairly big and they have no prediction about where and when it will actually reentry. Much of the usual "sky-is-falling" talk. Vermont Public Radio compared the incident with the Skylab re entry and another US satellite reentry. VPR made no mention of the Soviet nuclear powered radar ocean reconnaissance satellite that crashed in northern Canada twenty odd years ago, complete with fallout from the smashed nuclear reactor. I guess they don't want to accuse the peaceful Soviets of flying military recon satellites, even when the Soviets have been out of business for better than a decade.
For that matter, VPR always describes the spacecraft as "spy satellites" rather than "photo recon satellites". Spying is illegal, and spies get executed. Reconnaissance is a legal operation of war or peace time.

The Cuckoo's Egg gets real.

Back in the late 1980's Clifford Stoll was a computer systems admin at UC Berkeley. Small amounts of University CPU time were un accounted for. In running down the discrepancy Stoll discovered that he had a hacker logging into his Unix machine and fishing around for passwords and classified data. After a year or more or cat and mouse computer games, Stoll localized the hacker to an apartment in Hannover West Germany. He had the telephone number, the street address, the name of the hacker. West German police wanted to bust said hacker, but West German law was very protective about civil liberties. The West German cops said they needed a complaint from the Americans before they could arrest the hacker since breaking into American computers was not a crime in West Germany.
Stoll tried every thing he could over a course of months to get the FBI interested in the case. No luck. The Bureau was into its stupid phase.
Now, twenty years later, the Americans are going to do something about hackers. About time. According the the Wash Post, American intelligence agencies will be watching the net for hackers breaking into US government computers.
More effective would be to ban the use of Windows for all government work due to rediculous vulnerability.

Peggy Noonan says Bush destroyed Republican Party

Op ed piece in the Wall St Journal here. Peggy really unloads on Bush. Lists Iraq, spending, growth of government and immigration. She feels Bush deliberately went against the desires of the party members, leading to demoralization and back biting.
I suppose. On the other hand, I still feel Bush did right by going into Iraq after 9/11. The other course of action was to retreat to Fortress America, and let Al Queda, the Taliban, Hamas, and other terrorists consolidate their bases in the middle east. Bush decided to take the war to the enemy by occupying the enemy's downtown. And he has stuck to his guns despite endless attacks by the media, the CIA, State Dept, and the armed forces bureaucracy.
The offensive in Iraq gave us freedom from terrorist attacks on US soil since 9/11. Why? Simple, offer young jehadi's the choice of combat in friendly Iraq, where they can speak the language and can blend in, or boarding an airliner bound for the great Satan, where they stick up like sore thumbs and might get lynched if their cover fails. Even young jehadi's are smart enough to figure the odds on that choice.

Marketing 101 for car ad agencies

You've seen 'em, the soft focus TV ad, often in black and white. Camera brushes over the car lightly, then dwells on the scenery, or the pretty girl or the open road, anything but the car. Best view of the car is some arty shot from a strange angle. At this point you are wondering what the hell brand of car is being sold. The modern jello styled four door sedans all look alike, it ain't like in the '60's when you could recognize the make from four blocks away. The ad rolls on, you are still wondering what they are selling. Only at the very end of the ad do they flash up the maker's name for about 2 seconds.
Does this sell cars?
Have you seen the Toyota ad for "green" cars? Shows a car made of birch bark and twigs sort of flowing together as the wind whips the stuff around. Shape suggests a Prius, but could be anything. Then as the voice over is saying green things about recycling, you see the birch bark car decompose back into soil and disappear.
Somehow that ad doesn't speak to me either. To much like watching the final victory of body rot.

Newsies can ask the stupidest questions

Watched the Republican debate last night. Outstandingly stupid question comes from Tim Russert. "Mayor Guiliani, how do you feel about your drop in the polls from 40% to 20%?" Russert doesn't need to ask this question, we all know the answer. It gave Guliani a few minutes to tell us how morale in his campaign is high, the polls will change, and he will win. We know that, and we know Guliani is gonna say it. Why bother with the question?
Then the newsies spent some time trying to get the Republicans to say mean things about one another on stage. The candidates may not be the sharpest knives in the box, but they are too smart to start negative campaigning right on TV.

Sixty airliners per hour is why your flight is late

Good article on air traffic congestion here.