Watched Meet the Press, Washington Week, and the McLaughlin Group talk about Wall St this morning. With one exception, the pundits and Henry Paulson (guest on both ABC's Stephanopolis show AND NBC's Meet the Press at the same time) spoke in vague generalities. Or flagellated the entire country for greed, or "things that go up must come down". Little to no fingerpointing.
The one exception, Mort Zuckerman on the McLaughlin Group. He said Fannie and Freddie kicked off the sub prime mortgage disaster by buying sub prime bonds. He, the Wall St Journal, McCain, and the Bush administration have been calling for Fannie Freddie regulation for years, but Fannie and Freddie killed it with campaign contributions to Obama, Dodd, Biden, and Barney Frank, plus a vigorous lobbying effort on the rest of the Congress. Regulation of Fannie and Freddie means putting a lid on the amount of money they could loan and forbidding them from buying sub prime mortgage bonds. Zuckerman also faulted the SEC chairman for loosening the capital requirements on banks. Used to be, back before 2000, banks were only allowed to lend up to 11 times their capital. The SEC under Cox raised that to 30 times, and the now defunct Bear and Lehman were up to 33 times when they croaked.
Why does the capital to loan ratio matter? Simple, some loans default. To keep the bank alive after losses, the bank needs some of its own money in the till. Under the 11:1 capital rule, a bank could survive a loan loss of nearly 10%. Under the 30:1 rule, all it takes is a 3% loss and the bank is broke.
McCain is right to call for the head of the SEC chairman. The SEC's job is to prevent a Wall St disaster. The chairman has clearly failed in that mission.
Sunday, September 21, 2008
Highland Games in New Hampshire
The annual Highland Games festival was held at the Loon Mt Ski resort. Scotsmen of all kinds, (real, synthetic, and American) come to wear their kilts and watch dances, games, caber tossing and the like. It's a slow weekend up here, summer is over and the autumn leaf season hasn't started, so anything to draw the tourists is a good thing. Weather was perfect, warm and cloudless and sunny.
Next door classic American roadside tourist attraction, Clark's Trained Bears, opened to take advantage of the tourist traffic. By noon the parking lot off US route 3 was full of happy tourists, there to ride the steam railroad, watch the trained bears perform, and savor the lovely Fall weather.
The Ammonousic Valley Railroad Association was invited to set up the big portable HO train layout and run it thru the weekend. Setup was Friday, a simple two hour job. Saturday we brought down the HO model trains to run for the fascination of 12 year old children. All day crowds flowed past the layout and ohhed and ahhed as the tiny steamers whirred around the track. For providing the entertainment, we got a free lunch.
Clark's collection of antique equipment was in beautiful repair. They had an 80 year old railbus with fresh paint smoother and glossier than a new car. They had three steam engines steaming, brass all polished, pulling carloads of tourists around the property. Rich clouds of wood smoke rising from the stacks, white clouds of steam from the whistles and pop off valves. Diesels just don't put on the show that steamers do.
Next door classic American roadside tourist attraction, Clark's Trained Bears, opened to take advantage of the tourist traffic. By noon the parking lot off US route 3 was full of happy tourists, there to ride the steam railroad, watch the trained bears perform, and savor the lovely Fall weather.
The Ammonousic Valley Railroad Association was invited to set up the big portable HO train layout and run it thru the weekend. Setup was Friday, a simple two hour job. Saturday we brought down the HO model trains to run for the fascination of 12 year old children. All day crowds flowed past the layout and ohhed and ahhed as the tiny steamers whirred around the track. For providing the entertainment, we got a free lunch.
Clark's collection of antique equipment was in beautiful repair. They had an 80 year old railbus with fresh paint smoother and glossier than a new car. They had three steam engines steaming, brass all polished, pulling carloads of tourists around the property. Rich clouds of wood smoke rising from the stacks, white clouds of steam from the whistles and pop off valves. Diesels just don't put on the show that steamers do.
Thursday, September 18, 2008
Bond Insurance brings down AIG
AIG has been insuring sub prime mortgage bonds. Lots of them. Investors looking at AIG liablilities see nothing but disaster, as trillions of dollars of insured bonds get ready to default. It won't help AIG today, but a lesson learned from this. Don't insure bonds, any kind of bonds, ever again.
The availibility of insurance allowed greedy but clueless investors to buy risky bonds and feel good about it because they were insured. Trouble is, when times get bad, ALL the insured bonds default at the same time. No insurance company is wealthy enough to make good when everything fails at once. So, the investors are left with worthless bonds, and worthless insurance. A bond so risky that it needs insurance is too risky to sell. If the insurance hadn't been available, those bonds wouldn't have been sold, which would be a good thing.
The availibility of insurance allowed greedy but clueless investors to buy risky bonds and feel good about it because they were insured. Trouble is, when times get bad, ALL the insured bonds default at the same time. No insurance company is wealthy enough to make good when everything fails at once. So, the investors are left with worthless bonds, and worthless insurance. A bond so risky that it needs insurance is too risky to sell. If the insurance hadn't been available, those bonds wouldn't have been sold, which would be a good thing.
Wednesday, September 17, 2008
Georgia gives the Space Shuttle new life
After years of talk about retiring the Space Shuttle, now the NASA people are talking about squeezing a few more missions out of the old bird. The original NASA plan was to shut down the Shuttle and then use the money saved to build a new ground to orbit system (Ares). In the years between the last shuttle flight and the first Ares flight, we would use the Russian Soyuz capsule to get to the International Space Station.
Well, after Georgia, relying on the Russians for access to space doesn't seem so pleasant.
Well, after Georgia, relying on the Russians for access to space doesn't seem so pleasant.
Stereo Missile Warning
In this day and age of shoulder launched SAMs, combat aircraft now carry missile warning electronics. One version of same, when it sees an incoming missile, gets on the aircraft intercom and cries out "Missile! Missile! Missile!". The Swedes have improved on that.
Human ears are very good at telling the direction of a sound. The Swedish system plays with the timing and phase of the sound going to the pilot's left and right earphones. This gives the sound a direction left/right and up/down. Naturally the system makes the sound come from the direction of the incoming missile. The pilot instantly knows which way to turn to evade.
Clever idea.
Human ears are very good at telling the direction of a sound. The Swedish system plays with the timing and phase of the sound going to the pilot's left and right earphones. This gives the sound a direction left/right and up/down. Naturally the system makes the sound come from the direction of the incoming missile. The pilot instantly knows which way to turn to evade.
Clever idea.
Monday, September 15, 2008
A Grafton Country Wedding
Big event. My niece got married on Saturday. This happened out of doors at the family farm. Saturday was a single day of sunshine sandwiched inbetween two solid weeks of rain and the remnants of Hurricane Ike. Scads of guests, set up a huge white tent for the reception. Filled an aluminum canoe with ice, and beer. Squeeze bottles of Deep Woods Off set between the water pitchers and the salt and pepper shakers. Hordes of wedding guests turned up days in advance to pitch in and spiff up the place. A couple of years worth of home projects got finished off and looking good. Vows were said at two in the afternoon. The beer lasted until 2 AM the next morning.
Friday, September 12, 2008
Windows XP gets the slows
Daughter returned from overseas last weekend, bringing back her Compaq/HP 6516 laptop with the slows. Apparently the machine caught something awful from a flash drive in the Kirghiz Republic. It boots slow and runs slow. Takes 3 minutes to boot. Runs so slow as to cause static while playing music.
So, we ran AVG anti virus, Spybot Search and Destroy, Ad Aware, Microsoft malicious software removal tool, Malware bytes, and UnHackMe. No improvement. Uninstalled a good deal of HP bloatware on general principles, found a patch that allowed us to see hidden files. Studied Task Manager's process list, looking for strange processes. No joy. Something is lurking in the laptop and we can't see it. If you can't see it you can't kill it.
So, we ran AVG anti virus, Spybot Search and Destroy, Ad Aware, Microsoft malicious software removal tool, Malware bytes, and UnHackMe. No improvement. Uninstalled a good deal of HP bloatware on general principles, found a patch that allowed us to see hidden files. Studied Task Manager's process list, looking for strange processes. No joy. Something is lurking in the laptop and we can't see it. If you can't see it you can't kill it.
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