Reform or re arranging the deck chairs on the Titanic

Yesterday Treasury Secretary Paulson proposed a big re-organization of the Federal bureaucracy that regulates banks, brokerages, thrifts and insurance companies, in short the financial industry. And in fact, the number of bureau do seem excessive. We have the FDIC, the Federal Reserve, the Comptroller of the Currency, the Office of Thrift regulation, the SEC, a commodities trading office, and probably more. Of these, the Federal Reserve is the most powerful, they can actually write checks, rather than just memo's and regulations. A check is something that makes people really pay attention.
However, more important than how the paper gets shuffled, is some basic financial policies. The financial system is doing good when it raises the money to build factories, roads, schools, hospitals, single family homes, or even finance the purchase of new cars. It is doing bad when it acts like casino gambling, merely swapping assets and "securities" back and forth between Wall St players like a poker game.
Policies for the financial industry should encourage the raising of capital and discourage gambling.
First new policy. Declare mortgages to be a deal between a borrower and a lender only. Lenders shall not sell or trade mortgages. The bank that writes a mortgage is required to keep it on their books until paid off. This rule would make banks evaluate the creditworthiness of the borrower and the market value of the property and get it right, because if they don't get it right it costs the lender real money. The sub prime crisis that is pushing the US into recession was caused by banks writing shaky mortgages and then selling them to gullible investors. So, prohibit trading in mortgages.
Second new policy. Business will keep just one set of books. Right now they keep one set of books showing great profit to impress investors, to make them buy the company's stock. The
other set of books shows how little money they made. They show this set of books to the taxman. This is even legal. One set of books is all we need. If the company made money, it should pay tax there on.
Third new policy. Lenders will quote interest rates in just one way, namely percent of original loan, per year. Right now, my little rural bank has a sign advertising rates on loans. Each interest rate is given two ways, differing by a tenth of a percent. If a little rural bank is quoting interest two ways, imagine how many ways the big city slicker banks can confuse the issue. There ought to be one standard way to quote interest rates to permit comparison shopping in a meaningful way.
Fourth new policy. Everything must be on the company/bank balance sheet. No more inventing fancy IOU's (mortgage backed securities) and not showing them as a liability on the balance sheet. They are liabilities, 'cause the holders can return them and demand cash. Big banks made their balance sheets look better with trickery that moved the fancy IOU's off the balance sheet.

So who is suffering from the subprime mess?

Obviously banks, brokerages, and investors have been burned to a crisp. On the other hand, I don't feel too bad for them, they were dumb or greedy or both. How about the homeowners? How many sub prime borrowers are there? How many of them deserve our compassion, and a bailout? How many are speculators who bought the house to flip it? How many would be better off mailing the keys to the bank and walking away from a gigantic mortgage that is way more than the house is worth? How many can refinance and come out with lower mortgage payments?
Does any one know? Who would be honest about it? I wouldn't want to trust anything I heard from a mortgage broker. The newsies are clueless as usual.
The price of houses is going down. That's good news for those who need a house, 'cause of a child, or another child, or a new job in another town. It's not so good news from home owners.
Why are house prices going down? Partly 'cause the price of a house is set by how much the banks is willing to lend on it. Back when there were gullible investors to take the subprime mortgage backed "bonds" the bank didn't care how much it loaned on a house, cause it would sell the mortgage, and come away with cash. The investors have wised up, so the banks are going back to previous lending standards. This means they will no longer write humongous mortages on cheap new tract houses.

How pledged are the pledged delegates?

So, Obama and Clinton get to the convention. It's still a tie. They have a first vote, and it's still a tie. Now, as the wheeling and dealing for the superdelegates proceeds in back rooms, are the pledged delegates still pledged? Use to be, back when candidates were selected at the convention, that delegates were ONLY pledged for the first vote. After that first vote, the delegates could vote any way they liked. If that is still so, the wheeling and dealing for the second vote will be something to see.

10,000 BC, a kid's action adventure movie

Let's get one thing straight, this is a kid's movie, with lots of CGI action. Being a still a kid at heart I took it in on the last day it was playing up here. Not a great mney maker, I shared a nearly empty theater with maybe three teen age couples. So I won't bother to discuss all those adult movie virtues like plot, characterization, message, acting, etc. The setting, long long ago in a history similar to that of Conan the Barbarian, has some possiblities. D'leh,the hero, is a member of backwoods and primitive tribe that lives in the high snowy mountains and prospers by hunting mammoths. The mannmoths are very good, big, shaggy, and dangerous looking. D'leh's tribe is raided by horseback riding bad guys who carry off to slavery D'leh's girlfriend. You can pretty much guess the the rest of the flick from there.
The makeup and costume departments don't do a very good job. D'Leh and all his people are burdened with really ugly black wigs, and powdery war paint that makes Boy George and Michael Jackson look suave. The costumes run to fur and leather and no tailoring at all. Everyone looks shaggy. shabby, and overweight. The wigs are dry, dirty, and dusty looking and make everyone look just awful. Plus it's hard to tell even D'Leh apart from the rest of the shabby members of his tribe. Continuity suffers.
And the prop department is just as bad. All the spears, even the one that takes down a mammoth, are light, flimsy, twisty, gnarled and lacking decent flint spear points. They don't look capable of stabbing a toad, let alone a bad guy or a mammoth.
The mammoths are good. The civilized bad guys use domesticated mammoths to haul the stone blocks for their pyramids. To kick off the predictable slave rebellion we have a really good mammoth stampede.
The writers manage to mess up a couple of promising scenes. As the bad guy starts to ravish the pretty heroine, she gets her hand around the hilt of his dagger. Before she can cut him a new one, the door bursts open, and the high priest, with body guards dashes into the room. Scratch one opportunity for heroine to show some spunk. At the climatic showdown between the hero and the bad guy, the bad guy attempts to get out of Dodge on his horse, with the protesting heroine thrown across his saddle. Something goes wrong, and both bad guy and heroine fall from the horse giving the hero his chance to get his hands around the bad guys neck. It is not clear, at least on a first watching, if the fall from the horse is caused by plucky heroine fighting hard, or just an accident.
Bottom line. A medium good kid's movie that could have been much better.

Buy the cheapest cables

Popular Science in an article titled Gadgetry's Golden Rule calls the fancy high priced cables for stereo, speakers, DVD players, TV sets and such, a scam. They recommend buying the cheapest cable you can find.
PopSci has this exactly right. The fancy gold plated connectors, the thick black rubber insulation, the color coding, all look cool, but don't conduct electricity any better than standard plastic, tin plated ones do. And once your system is plugged together, on the shelf or in the entertainment center, who looks at the cables?
I am an electrical engineer, done a lot of work on video, a radio amateur, and an audio video buff to boot. I have formal education and forty years of experience.
Start with speaker wire. Your speakers have an impedance of 8 ohms. As long as the speaker wire resistance is less than ten percent of that ( 0.8 ohms) the wire is doing all it can do to make the sound right. My handbook of chemistry and Physics give 0.4016 ohms per 100 feet for #16 American Wire Gauge (AWG) copper wire, the wire in ordinary lamp cord (zip cord). Put the speaker 100 feet from the amplificer, and you have 0.4016 ohms going out, and another 0.4016 ohms coming back, for a total resistance of 0.8032 ohms,. Round it off to 0.8 ohms. How many of us have a house that is 100 feet from end to end?
In fact, many of us have the speakers withing 10 feet of the amplifier. In that case, the cheap thin Radio Shack wire (#24) will be 0.2567 ohms over a 10 foot run.
The only thing you can do with speaker wire to improve the sound is to "phase" the left and right speakers. Make sure the plus terminals of the amplifier are connected to the plus terminals of the speakers. This way both speakers push and pull together, which improves the bass. If you have one speaker wired in reverse, one speaker cone is pushing while the other cone is pulling, which causes the two speakers to cancel each other out. The cancelation is never purfect, but it will weaken the bass a bit. If buying zip cord at Home Depot or somewhere, a brand of wire with a mark of some sort distinguishing the left from the right wire is nice to have. Type of metal, solid vs stranded, rubber vs plastic, the electrons don't care. Shielding does nothing for speaker wires, the signal in the speaker wires is very high (watts), the signals floating thru the air are microwatts, and nobody can hear interference that is a million times weaker than the music.
The other cables in the system, the ones with that funny RCA jack on each end, are no more critical than speaker wire. Since the signal level is very low, and the impedance are much higher than 8 ohms, the wire resistance just doesn't matter. The wire from your CD/DVD player is driving the amplifier, which is a 1000 ohms. Ten percent of that is 100 ohms. Any kind of wire is going to be way way less than 100 ohms.
Go with the cheapest cables and save money.

Of marks and mortgages

"The underwriting of risk in the past few years has of course, not been too good". Ethan Penner writing in yesterdays Wall St Journal op-ed page. "Yet the outcry for systemic fixes from various constituencies has been dangerously off the mark. " "Another is to move away from securitization and and return to a portfolio lending model-- where for example the bank originating the mortgage keeps it (in its own portfolio of assets) rather than selling it to a third party (as in securitization). "
" The argument in favor of portfolio lending is based upon the notion that, unlike securitization, portfolio lending incorporates the discipline of 'skin in the game.' Since in the portfolio lending model, the loan's risk is not being transfered from the originator/lender, the underwriters will therefore be more careful."
Mr. Penner goes on to argue in favor of securitization of mortgages, which is what killed a lot of Wall St players in the last few months. At the end of the Op-ed piece, the Journal's editor notes
"Mr. Penner helped pioneer the application of securitization technology to real-estate finance as CEO of Nomura Capital".
In short, Mr. Penner made a lot of money creating mortgage backed securities, which have caused the credit crunch and may push the US economy into recession. Is such a man believable?
The trouble with mortgage backed securities is that no one (except perhaps the originator) as any idea of the risk involved. No bond rating agency can predict the probablity of the home owner failing to make his mortgage payments on time.

Classical Values has a really scary story about FBI agents with too much time on their hands.
Agents put up a website with links labeled as kiddie porn. Woe to the rube who clicks on one, he gets raided by the FBI. Now I don't really hold with child molesters, but getting raided, your computer[s] and papers confiscated, and your reputation ruined for just clicking on link is police state stuff.
Doesn't the FBI have better things to do with their time? Like catching Osama Bin Laden?