Yesterday's Wall St Journal, talking about the future worth of financial stocks (which is doubtful) said "The big profit gains reported by many financial companies in receent years were magnified by borrowing and moving assets off their balance sheets...."
Does this make sense? Balance sheets contain assets and liabilities. Assets are good, cash in the til, money owed to you, things you can sell. Liabilities are bad, debts, money you owe to others, taxes, stuff like that.
Why move assets "off balance sheet"? I can see moving liabilities off balance sheet, like the money borrowed to buy sub prime mortgages, but why assets?
Or is this another accounting scam, like the $36 billion of imaginary assets that GM removed from it's books last fall? I suppose it was a good thing that GM 'fessed up and showed a $39 billion dollar loss last year, but just as aggravating is to find that GM had been padding it's books by putting imaginary assets on them all these years.
This blog posts about aviation, automobiles, electronics, programming, politics and such other subjects as catch my interest. The blog is based in northern New Hampshire, USA
Tuesday, March 25, 2008
Monday, March 24, 2008
What's a mortgage broker good for?
Today's Wall Street Journal had a editorial piece speaking out against treasury secretary Harry Paulson's suggestion that mortgage brokers need more regulation and licensing.
Regulation and licensing? How about boiling in oil and drawing and quartering? Brokers are unnecessary middlemen who skim a percentage of the deal, for doing little to nothing.
As a borrower, I don't what a middleman, offering self serving advice, and misrepresenting me to the lender. As a lender, I need to learn two things, am I lending more than the property is worth, and does the borrower make enough money to make the payments. If I get either answer wrong, I am going to loose money on the loan.
Only a fool would believe anything a broker would tell him. A wise lender will learn the answers him self, so he is sure the answers are correct.
So who needs a broker. And if you don't need a broker, why bother the license and regulate them?
Regulation and licensing? How about boiling in oil and drawing and quartering? Brokers are unnecessary middlemen who skim a percentage of the deal, for doing little to nothing.
As a borrower, I don't what a middleman, offering self serving advice, and misrepresenting me to the lender. As a lender, I need to learn two things, am I lending more than the property is worth, and does the borrower make enough money to make the payments. If I get either answer wrong, I am going to loose money on the loan.
Only a fool would believe anything a broker would tell him. A wise lender will learn the answers him self, so he is sure the answers are correct.
So who needs a broker. And if you don't need a broker, why bother the license and regulate them?
Don't break your arm patting yourself on the back
Lehrer's news hour had a piece about press coverage of the Iraq war. Several newsie pundits appeared, and pontificated about the goodness and badness of the Iraq war coverage. Turns out, they were really talking about coverage of pro and anti war politics back here in the good old safe US of A. The coverage none of them did, or even wanted to do concerns American soldiers in the combat zone. The professional newsies find that too dangerous, too uncomfortable, and too pro American to cover.
I had a relative serving in Iraq last year. The newsies didn't do squat to keep me informed of how he and his unit were faring. The only decent info I got for the entire year my brother was serving, was from his emails. The newsies didn't tell me where our men were, what they are doing, how they are coping, what units are engaged, what battles they have fought, victories or defeats achieved, heroic actions performed, decorations awarded, nothing. It was like our soldiers stepped into a black hole from which nothing comes out.
To hear newsies discussing how great their coverage was, when there wasn't any coverage at all makes me angry with the whole tribe of them.
I had a relative serving in Iraq last year. The newsies didn't do squat to keep me informed of how he and his unit were faring. The only decent info I got for the entire year my brother was serving, was from his emails. The newsies didn't tell me where our men were, what they are doing, how they are coping, what units are engaged, what battles they have fought, victories or defeats achieved, heroic actions performed, decorations awarded, nothing. It was like our soldiers stepped into a black hole from which nothing comes out.
To hear newsies discussing how great their coverage was, when there wasn't any coverage at all makes me angry with the whole tribe of them.
Saturday, March 22, 2008
Databases leak
Seems like the US State department's passport data base is leaky, at least Barack Obama's, Hillary Clinton's and John McCain's passport files have been looked at by unauthorized personnel. Is nothing air tight? Stores have repeatedly let customer records slip out of their data bases into the hands of identity thieves.
Does anyone want their medical records revealed to insurance companies, employers, or political enemies? Vote in universal health care and all our medical records will go into a federal data base. And from there, by accident, by hook, or by crook, they will be made public.
Does anyone want their medical records revealed to insurance companies, employers, or political enemies? Vote in universal health care and all our medical records will go into a federal data base. And from there, by accident, by hook, or by crook, they will be made public.
A democrat's wish list Part 3
Still working from Rahm Emanuel's op-ed piece. "Third, we must support the development of new energy efficient technologies that will make energy less expensive for consumers and businesses, help protect the environment, create millions of green collar jobs, and make our nation energy independent."
And a chicken in every pot.
With crude oil above $100 a barrel, furnace oil and gasoline approaching $4 a gallon, the private sector, the public sector and every Tom Dick and Harry in the land have all the incentive needed to save fuel or find new sources. Government subsidies aren't needed, the price of fuel will do the trick.
I note that Congressman Emanual is from Illinois. Want to bet he favors federal subsidies for ethanol from corn?
And a chicken in every pot.
With crude oil above $100 a barrel, furnace oil and gasoline approaching $4 a gallon, the private sector, the public sector and every Tom Dick and Harry in the land have all the incentive needed to save fuel or find new sources. Government subsidies aren't needed, the price of fuel will do the trick.
I note that Congressman Emanual is from Illinois. Want to bet he favors federal subsidies for ethanol from corn?
Friday, March 21, 2008
Smart Fortwo is a minicar
WSJ has a short review of a tiny weird looking two seat minicar from Daimler. Also has a weird name. No back seat, it's as tall as it is wide, tiny little wheels, a rolling joke for looks.
OK, so it's wierd, does it save on gas? Not really. Reviewer reports 32.4 MPG. Hell, my Cadillac Deville gets 27, what kind of gas milage is 32.4?
Is it fun to drive like the old VW bug? Apparently not, despite an advertised 70 horsepower (double that of the old VW) the reviewer complains of inadequate top speed. Then he explains that the automatic transmission (slushbox) doesn't select the right gear all the time. For a parting shot the reviewer laments the lack of power steering. Wimp.
Cost $12,235. I bought the Deville (used, but a creampuff) for $9000. What would you rather drive?
OK, so it's wierd, does it save on gas? Not really. Reviewer reports 32.4 MPG. Hell, my Cadillac Deville gets 27, what kind of gas milage is 32.4?
Is it fun to drive like the old VW bug? Apparently not, despite an advertised 70 horsepower (double that of the old VW) the reviewer complains of inadequate top speed. Then he explains that the automatic transmission (slushbox) doesn't select the right gear all the time. For a parting shot the reviewer laments the lack of power steering. Wimp.
Cost $12,235. I bought the Deville (used, but a creampuff) for $9000. What would you rather drive?
A democrat's wish list Part 2
The next wish on Rahm Emanual's list is universal health care, or if universal is too pricey, a half way step of health care for children.
Make more tax money available for health care and we will spend it, all of it, and cry for more. The US spends 16 percent of GNP on health care which is four times military spending. American made products cost 16% more just to pay the worker's health care. We already spend too much on health care. The cost is wrecking the US economy.
As recently as 1980, US health care was only 8 % of GNP. Is our health any better in 2008 after doubling the money put into it? I think not. Rather than pouring more money into the health care sector we need to cut the cost back to where it was in 1980. Or even lower.
Fingers have been pointed at the legal community for malpractice suits, the drug companies for outrageous prices, legislatures for loading health insurance with mandatory coverages and forbidding competition, and health insurance companies for paperwork that makes the La Brea tar pits look transparent.
So far the doctors and their union have escaped much criticism, but they bear a substantial responsibility for the explosion of cost. They prescribe expensive treatments freely, thinking that the insurance companies will pay. They demand expensive technology that does little, such as the fetal heart rate monitors which have done nothing to improve infant mortality.
Make more tax money available for health care and we will spend it, all of it, and cry for more. The US spends 16 percent of GNP on health care which is four times military spending. American made products cost 16% more just to pay the worker's health care. We already spend too much on health care. The cost is wrecking the US economy.
As recently as 1980, US health care was only 8 % of GNP. Is our health any better in 2008 after doubling the money put into it? I think not. Rather than pouring more money into the health care sector we need to cut the cost back to where it was in 1980. Or even lower.
Fingers have been pointed at the legal community for malpractice suits, the drug companies for outrageous prices, legislatures for loading health insurance with mandatory coverages and forbidding competition, and health insurance companies for paperwork that makes the La Brea tar pits look transparent.
So far the doctors and their union have escaped much criticism, but they bear a substantial responsibility for the explosion of cost. They prescribe expensive treatments freely, thinking that the insurance companies will pay. They demand expensive technology that does little, such as the fetal heart rate monitors which have done nothing to improve infant mortality.
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