The Eco Fair

I drove over to the great north country Eco Fair, held at the Profile High School yesterday (Saturday). The parking lot was all parked up and cars were parked up and down Rt 18 for quite a distance. It being 11 o'clock, peak hour on a Saturday, I didn't bother to look from a closer in parking space, it was too early for anyone to have left. As I walked up the long line of parked cars I took note of what people were driving. Answer: Mostly Honda and Toyota. The few Detroit made vehicles were full size 3/4 ton pickups. No Detroit sedans at all.
Inside the school gym were vendors, ecological science displays from local school children, various pitchmen, and every one from The town of Franconia. I met Martha McCleod, Ken King, Paul and Karen Foss, plus John and Maggie Starr. Clearly there is interest in saving energy, which up here means saving $3.89 a gallon furnace oil.
Products on display. Several vendors offered a neat "build an insulated concrete wall" system. Sheets of 2 inch styrofoam insulation with plastic spacer gizmos. The spacers hold the styrofoam sheets about 6 inches apart and have pockets for the rebar. Concrete is poured inbetween the two styrofoam sheets, and when it hardens presto, a poured concrete cellar with 2 inches of sytrofoam insulation both inside and out. Since concrete by itself has zero insulating value, this is an improvement.
Then the high efficiency light folks were out in force. The local power company (PSNH) was selling them at the door for $1 a piece. At that price they make sense. An ordinary 100 watt (0.1KW) light bulb lasts 1000 hours which means it burns 100 kilowatt hours over its life. At 10 cents a kilowatt hour, the ordinary bulb uses $10 worth of electricity. The compact fluorescent bulbs use only one quarter of that, so you recover the $1 price of the bulb in the first 150 hours of lighting. Then there was a kitchen appliance maker promising tremendous savings from their products. Unfortunately they did not bring samples to the show, so it was hard to get excited about them.
Then we had vendors of solar hot water heat and windmills. Not present, vendors of "solar cell on the roof" do it your self electric systems.

Fox & Friends, Life on Mars is a joke

Fox & Friends Megyn Kelly and Bill Hemmer tried to do a life on Mars story this morning. They opened with an enigmatic photo of something fibrous and crawly. The voice over was confused, and failed the who,where,when, what & why test. They failed to mention who took the photo, what is the photo of, where the photo came from, when it was released. Then they flipped up a Mars orbiter picture of some terrain on Mars, but failed to connect the two pictures. At this point Megyn Kelley, the cute blonde who works a 14 hour day said she didn't understand the story, and would have no hope of understanding it. Hemmer then opined that until he saw a flying saucer he wouldn't understand anything.
In this one botched story the two of them managed to convince me that neither of them knew, understood, or cared about, interplanetary exploration. They also managed to show that they had never taken even high school science. They are cute and handsome, but empty headed and ignorant.
I guess they got their jobs thru charm and good looks rather than intelligence.

FAA accused of lax aircraft inspections

CSPAN covered the FAA hearings live. The House transportation committee held hearings about FAA inspections and the Southwest Airlines $10 million dollar fine. Something has gone wrong with FAA. The committee heard from a bunch of working level FAA inspectors, the guys who are supposed to walk the flight line and hangers looking at airplanes, and make sure they are air worthy. The working stiffs all accused FAA senior management of suppressing inspections, supressing reports of bad aircraft maintenance, and giving airlines the OK to fly passengers in planes that were out of compliance (planes that had not been inspected or reworked in accordance with air worthiness directives).
This is fairly bad. "The air, even more than the sea, is terribly unforgiving of the smallest mistake". I spent six years doing aircraft maintenance for USAF. On the flight line we all knew that if the plane broke in flight, the aircrew could die. That was a tremendous incentive to do things right lest you bear the guilt of causing a fatal aircraft accident. This attitude goes all around the aviation business. I'm sure Southwest's maintenance guys have it.
But then there are operational pressures. "We need that airplane to fly a mission today. If we can't fly it we will have to cancel a scheduled flight and leave our passengers stranded in the airport".
That aircraft is in good shape except an air worthiness directive hasn't been complied with yet.
The air worthiness directive says something like "After 5000 landings, inspect wiring in a hard to get to place for chafing. " Hard to get to might mean drilling out rivets and pulling off sheet metal, might take a day to pull the plane apart, inspect the wiring and then put it back together again. The plane has exactly 5000 landings.
A reasonable man might decide that nobody is going to get hurt if the plane makes a few more landings before the inspection.
On the other hand, if short cuts are permitted here, then soon enough they will be permitted there, and somewhere else, and pretty soon anything goes. The job of the FAA inspector is to say "No short cuts, ever".
According to testimony I watched on CSPAN, senior FAA management was permitting short cuts, over the objections of the line inspectors.
Time for a new FAA administrator and laying off the top two or three layers of FAA management.

Income Tax Break for Intelligence Agents (aka spies)?

I just finished the yearly chore of doing income tax. I'd rather clean out a stopped up toilet. Be that as it may, I read the instructions, and I found a new-this-year tax break (tax loophole?) just for "intelligence agents", presumably civil servants working for CIA or NSA.
Why do they get a special tax break? A reward for the excellent intelligence they have furnished over the years? Because of the extraordinary dangers they face driving into the office every day?
Or did the intelligence community blackmail congressmen by threatening to reveal dirty laundry in public?

Fairpoint to pay 13.5% interest. From my phone bill.

Union Leader article says Fairpoint deal is going thru even though Wall St is demanding 13.5% interest on the $500 million loan Fairpoint is taking out to pay Verizon for the northern New England telephone system.
Wow. That's gonna hurt us bad. If the loan is only $500 mil, then Fairpoint will pay $67 million in pure interest per year. Guess where they are going to get that money? Where else but out of my telephone bill? What ever happened to usury laws?
It may be worse. The Union Leader article said the whole deal is $2.3 billion, of which Fairpoint only borrows $0.5 billion. Where the other $1.8 billion was coming from was not disclosed. I doubt that Fairpoint has that much cash on hand, so they are borrowing it from somewhere. Where and for how much is not disclosed either.

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.