$150 million "alert system" scratched

An unnamed Homeland Security system to provide unclassified but sensitive warnings of terrorist threats to first responders and all levels of government has been "put on hold". With luck Congress may be able to kill the entire $150 million boon doggle.
The way you pass threat warnings is by email. Everyone reads their email. If the contents are sensitive, or even classified, encrypt the email. Problem solved.

Let's get petty

The MSM are now trashing Sarah Palin over the cost of her wardrobe. How petty (and sexist) can you get? She has to appear in public daily, travel (which clothes hate) and as a national political candidate she has to appear well dressed. Of course she needed more clothes to campaign in.
Plus, women have to work harder than men to appear well dressed. A dark suit, clean white shirt, well shined shoes and a tie and a man is good to go. Women's dress is infinitely more complicated. Any reasonable woman would need more decent outfits to campaign nationally.

Roasting Ratings Agencies on Wall St

Sen. Henry Waxman, that bald headed twit, held hearings today to roast Moody's, Standard and Poor's and the other bond rating services. The raters gave AAA ratings to "mortgage backed securities" which later tanked and took down the financial markets. Although the roasting is well deserved and fun to watch, it misses the point.
The goodness of the "mortgage backed securities" was no better than the goodness of the mortgages backing them. There is no way a bean counter in a Manhatten office can know how good a mortgage in California or Florida is. To evaluate a mortgage, you have to know the value of the real estate (which requires a visit to the property and local knowledge) , the income of the borrower (which is privacy protected) and interview the borrowers. No way a bean counter at a rating agency can do this.
The buyers of the "mortgage backed securities" should have known this. Once a mortgage maker knows he can sell the mortgage for cash, and all the risk is passed to the buyer, then he will make a mortgage to anyone with breath in his body. We should close the entire secondary mortgage market because it is impossible to know the soundness of any mortgage backed security.

Strange Capitol

So, now we come to really strange forms of "capitol". In return for US taxpayer money the bailed out banks are required promise to sell their stock to the government at today's (depressed) price, sometime in the future. The idea being that the taxpayers are entitled to a cut of any of the bank's future earnings in return for putting up barrels of money. The paperwork to do this is called a "warrent". We used to call them stock options in industry.
According to a Wall St Journal article, these "warrents" would be carried on the books of the bank as "capitol". Wow. First of all, the warrents aren't readily saleable, which makes them questionable as capitol. Second of all, the government owns the warrents, not the bank, so I fail to see how they contribute to the bank's capitol whatsoever, neglecting matters of proper pricing and liquidity.
Then the WSJ writer goes on to worry about how fluxuations in the value of these warrents would make the bank's capitol fluxuate.
Something does not compute here.

Bank Capital?

So, let's run a bank. We accept money from depositors and buyers of bank stock. We lend this money at interest. Question, how much money can we lend? All of it? Not hardly, someone will make a withdrawal and we have to have cash in the till to pay out. Sometimes a loan won't be paid back, and a decent bank can't fail just 'cause one lowlife stiffs them on a loan. So, how much money do we keep on hand as protection against rainy days?
Experience and federal law suggest a bank ought to keep about 10% on hand as "capital" or "capital reserves". The commercial banks adhered to this. The "investment banks" aka stock brokerage houses, ignored this rule, went down as low as 3%, and are now all dead. RIP Drexel Burnham Lambert, Merrill Lynch, Lehman Bros, Bear Stearns, and company.
Now keeping plain old cash in the vault is secure, but that's a lot of cash that isn't earning interest. Can we count ultra safe securities, T-bills say, as "capital reserves"? Well OK. How about blue chip stocks and bonds? Perhaps. How about riskier stuff like mortgage backed securities? Well, we allowed that to our sorrow.
Next question, after we demand that banks keep a certain amount of capitol on hand, and after we allow things other than cash to serve as "capitol", how do we count said capitol? Do we count the stocks and bonds and riskier stuff at purchase price or at current market value? Speaking as a depositor, I say count every thing at current market value. The purpose of the capitol is to pay off depositors and cover bad loans. To do any good, the capitol must be converted into cash, the stocks and bonds sold. "Capitol" that cannot be sold at all, or only sold for very little money is worth little to nothing when it comes to paying off the bank's obligations.
Hence the "mark-to-market" rule which banks hate. Under "mark-to-market" the bank must count as capital only the market value of securites. The rule was put in after the Enron scam which involved carrying worthless stuff on the books at purchase price.

New York Times strikes out again

Columnist writes about the hardships of a career in science and engineering. He bemoans lawyers starting salaries of $145000 whereas he claims a physics PhD starts at a mere $45,000. I don't know what universe this commentator lives in, both in the real world, a bachelor's degree in chemical, electrical, mechanical or civil engineering starts at $50K or better, right out of school, and reaches $100K with just a few years industry experience. For every lawyer starting with a big firm right out of college, a hellofva lot 'em work part time and never rise much beyond doing residential real estate closings.
Engineers get to design the next Iphone, the next game machine, space ships, aircraft, buildings and every thing else that gets made. It's more rewarding than doing closings.

Campaign Sign Maintainance

Got a call from down state yesterday, someone defaced one of our scarce 4 by 8 foot McCain Palin signs, the one down at Clark's Trading Post. So I drove down to inspect. Ran right thru Franconia Notch in the strangest weather ever. A low low cloud scraping the ground and flowing up thru the notch like water.
Found the defaced sign. Some highly mature and principled person had written a rude word across the sign in black spray paint. Their spray can must have been low on paint 'casue they only defaced one side of the sign. So I drove into North Woodstock and bought a can of white paint at the NAPA auto parts store, along with some masking tape. About 10 minutes work of masking and spraying refreshed the white lettering, and the sign, if not good as new, as least looked OK from the road.
Let's say it's just some kids...