Air Force takes flack over Airbus tanker

Strategy page blog has a posting about the Airbus-Boeing competition. Boeing plans to contest the contract award. The Air Force is buying existing airliners, the Boeing 767 vs the Airbus A330. Both planes have been in production for years. Cost to buy, to operate, range, payload, and everything else is well known. There is no research and development money or risk, there is no logistics support, parts and service are widely available on the civilian market.
Airbus offered a larger plane. Boeing could have offered their larger 777 transport if they had been asked, or if they thought it was more appropriate to the mission. Or Boeing could have offered both aircraft and let the Air Force decide which size fits all.
Domestic content of the two planes is not all that different. The Airbus plane has American engines and a lot of American made parts in it. The Boeing plane has major subsections built over seas.
Air Force supplied reasons for the Airbus win boil down to the larger plane was more cost effective, could supply more fuel with fewer flights, which is pretty obvious. Air Force has not released the vital bid costs. Both aircraft are well proven, widely sold, commercially successful jet liners. Either would do a fine job as a tanker. Air Force should select the lower cost aircraft. So far, we don't know which plane was lower cost, the Air Force has not released the cost data.
Expect a long drawn out contest of the contract award, with plentiful fees for lawyers.

Clocks get smart, automatically switch to DST

I survived the great clock switchover. I have no mechanical tick tock clocks left in the place. The VCR and the computers were intelligent enough to know about daylight savings time and switch over by themselves. Wrist watch, Bose clock radio, and car clock had to be manually changed. Pretty soon the clocks will be in control...

Does insulating hot water pipes save electricity?

May be. February's electric bill was $104, down from $141 in January. Both months were cold. I've been gung ho on turning out un needed lights. The only thing I did differently in February was insulate the copper pipes running to the water heater. Used to be, the pipes were hot to the touch all the time, a sign of expensive heat leaking out of the heater thru the copper. I bought a $4 pack of plastic foam insulation sometime in January and snapped it over all the exposed copper pipe. If true, this makes a $37 monthly saving from a $4 investment. Something dropped my usage from 940KWH in Jan to 697KWH in Feb. Price didn't change, I'm paying $0.15 per KWH in both months. For this month's magic energy saving trick I'm going to insulate the big hole that runs my electric wires from the junction box into the sills of the house.

Horse Race coverage

The Lehrer News Hour was discussing the goodness of press coverage of the primaries. A couple of reporter/pundits held forth on the essential goodness of "horse race" coverage. "That's what people want to see". I'm sure the newsies love horse race coverage, because they don't have to know anything to do it. Just flip the election results up on the screen, and throw out a few opinions, (opinions are cheap, everyone has one) about why so-an-so won, and somebody-else lost. No knowledge of politics, history, issues, election law, or the candidates is necessary, just the plain election results, available from the state election officials for free, and a few cheap opinions. Anyone can do it. In fact, most working reporters are so ignorant of nearly everything that all they can do is horse race coverage.

Decent whiskey at a decent price

I find these whiskeys drinkable, smooth, tasty, and reasonably priced. Prices quoted are from the NH state liquor commission stores for a 1.75 liter bottle, other states will be pricier.
1. Scotch: John Begg, $16
2. Scotch: Ballentine $20-25 depending upon sales
3. Canadian: Canadian Hunter $10
4. Bourbon: Evan Williams $16
5. Bourbon: Old Crow $13

The taste of whiskey is a subtle thing, very hard to describe, so I'm not going to bother trying. I'll merely let it go by saying I find these brands very pleasant to drink. Ice and club soda improve the taste. I will occasional drink my whiskey with just ice, and never drink it without ice, but usually I add both ice and club soda.

Fannie&Freddie set stricter house appraisal rules

"The [new appraisal] code bars lenders and their representatives from pressuring appraisers to supply inflated estimates of property values" according to the Wall St Journal. Wow. In a nutshell how the subprime mortgage mess was created. Lenders with a deathwish.
Mortgage is a simple deal. The bank lends money to buy the house. If the borrower doesn't pay it back, the bank takes the house. This simple deal breaks down if the house isn't worth the amount of the loan. When the deal breaks down, the bank looses all the money it lent and is left with a house. If the house isn't worth much, the bank takes a loss.
The bank wants to do the mortgage, in a real world it's a safe investment that pays good interest. But when the mortgage is more than the house is worth, it changes from a safe deal to a very risky deal. The home owner can walk away from the mortgage and save himself money. Any bank that isn't stuck on stupid knows this. Pressuring an appraiser to raise his appraisal is guaranteed to create an underwater mortgage, one where the house isn't worth enough to back the mortgage.
How did the banks get so stupid? Simple, they found another sucker. Fancy Wall St banks and brokerage houses began to offer "mortgage backed securities". They printed IOU's and their salesmen declared the IOU's were safe because they were "backed" by all these mortgages owned by the issuer. The Wall Streeters then went out to all the real banks and bought mortgages to "back" more IOU's. The real banks loved this deal. Make a mortgage and then sell it for cash. If the mortgage is risky, who cares, I got my cash. If the house seller wants an unreasonable price, no problem. Pressure the appraiser to appraise the house at the seller's unreasonable price and make the mortgage. Sell the mortgage quick before the borrower defaults.
The wheels came off this scam last summer when a German sucker got burned so badly he went out of business. That wised up the rest of the suckers, and now no one will touch an IOU even if it is backed with solid gold. The financial pundits call this situation "a frozen credit market".
To prevent this mess from reoccurring we ought to prohibit the sale of mortgages. The guy who makes the mortgage has to hold it, and assume the risk, because he is the only guy who really knows if the mortgage is any good. If the maker owns it, the makers will only do mortgages that are likely to get paid back.

The world has plenty of oil (WSJ)

That's the title of an op-ed piece in Tuesday's Wall St Journal. It's something I'd like to believe, especially every time they deliver furnace oil, or fill up the car. To bad the author doesn't give any numbers that support his idea. The world is burning 86 million barrels per DAY right now. Emerging industrial superpowers China and India are going to increase that by a lot. But even this optimistic article (the writer is in the oil business) projects production of no more than 100 million barrels per day for the next 50 years. Demand is close to that today, and will surely far surpass 100 million barrels a day in a year or so. When demand exceeds supply, the price goes up until demand slacks off. That's why crude is at $104 a barrel now. Hold production level for the next fifty years, and the price will go up a lot higher.