1. How can we pay for health care by taxing health care? Surely the health care providers will raise their rates to pay the taxes?
2. What great sin are the insurance companies guilty of? There are all state regulated. The rate increases they are asking for have to be approved by state regulators. If the companies can convince the regulators that they need the money, then it's a good bet they really do need the money.
3. What's wrong with a race to the bottom? Obama's objection to interstate sale of insurance is that people will flock to cheaper insurance from states with fewer mandated coverages. What's wrong with that?
Sunday, March 14, 2010
Mud Season starts with confused weather
The sun is out, but it's raining medium hard. Keep it up and that will be the end of the snow. We still have snow on the ground, but the rain is eating into it. Round here, the season after ski season is known as mud season. Lasts about a month. The ground get so soft that heavy trucks are banned from most roads. The truckers call it road ban season.
Saturday, March 13, 2010
Repo man.
Wall St is supposed to be about financing economic growth. Lending money for construction projects, inventory purchase, plant and equipment. All of which are long term investments.
Why then the existence of the "repo" market. According to the Wall St Journal, a repo is a short term loan, from one bank to another. The borrower posts collateral, in the form of securities (stocks and bonds) in return for cash. The borrower promises to repay the loan in a few days, the lender returns the securities when the loan is paid off. The Journal's financial reporters describe the repo market as "the life blood of Wall St."
Oh really.
Why does anyone need money for only a few days? None of the investments in economic growth will pay off in a few days. Surely any deal could be postponed for a few days while the buyer raises the money? Or the seller could be willing to accept a short delay in payment? Certainly in the ordinary business world, we will do damn near anything to make a sale, we certainly would not be stuffy about a few days delay in payment. Hell, most deals are done with purchase orders, not cash, and you have 30 days to make good on a purchase order.
So why are short term loans "the life blood of Wall St"? What economically useful activity can be completed in a few days?
Other tidbits from the article. Apparently Lehman crashed after it ran out of securities to borrow upon. And, Lehman tried to use worthless securities to borrow against. J.P. Morgan demanded Lehman come up with better collateral or repay the loan. This happened just days before Lehman went under for good.
Lehman also did the old "treat a loan as a sale" trick to make their books look better at the end of each quarter. If you call a repo deal a sale, then the money is income and an asset. If you treat it as a loan , then the money is a liability which you owe. Your balance sheet looks better with assents than liabilities. Apparently no US law firm would OK this scam, and Lehman used a letter from a British law firm as justification.
So what was Lehman doing, banking or gambling? I say gambling. In which case flushing Lehman was a good idea.
Why then the existence of the "repo" market. According to the Wall St Journal, a repo is a short term loan, from one bank to another. The borrower posts collateral, in the form of securities (stocks and bonds) in return for cash. The borrower promises to repay the loan in a few days, the lender returns the securities when the loan is paid off. The Journal's financial reporters describe the repo market as "the life blood of Wall St."
Oh really.
Why does anyone need money for only a few days? None of the investments in economic growth will pay off in a few days. Surely any deal could be postponed for a few days while the buyer raises the money? Or the seller could be willing to accept a short delay in payment? Certainly in the ordinary business world, we will do damn near anything to make a sale, we certainly would not be stuffy about a few days delay in payment. Hell, most deals are done with purchase orders, not cash, and you have 30 days to make good on a purchase order.
So why are short term loans "the life blood of Wall St"? What economically useful activity can be completed in a few days?
Other tidbits from the article. Apparently Lehman crashed after it ran out of securities to borrow upon. And, Lehman tried to use worthless securities to borrow against. J.P. Morgan demanded Lehman come up with better collateral or repay the loan. This happened just days before Lehman went under for good.
Lehman also did the old "treat a loan as a sale" trick to make their books look better at the end of each quarter. If you call a repo deal a sale, then the money is income and an asset. If you treat it as a loan , then the money is a liability which you owe. Your balance sheet looks better with assents than liabilities. Apparently no US law firm would OK this scam, and Lehman used a letter from a British law firm as justification.
So what was Lehman doing, banking or gambling? I say gambling. In which case flushing Lehman was a good idea.
Great Depression 2.0 caused by glandular disorder
The PBS Newshour had a guy on last night pushing this idea. Reckless banking is caused by endocrines or dopamine or something medical sounding. Don't blame me, my glands made me do it. Great Depression 2.0, caused by foolish Wall Streeters gambling in sub prime mortgages and credit default swaps, is actually a medical problem. Right.
Is this why Obamacare is claimed to fix the economy?
The Newshour used to be better than this.
Is this why Obamacare is claimed to fix the economy?
The Newshour used to be better than this.
Friday, March 12, 2010
US Dept of Education buying shotguns?
Right here is the request for bids. Are these for use on students? parents? tea partiers? Republicans?
Thursday, March 11, 2010
Tankers for USAF Part III
It's official. Airbus has pulled out. Was in the Wall St Journal the other day.
The urge to jazz up the aircraft is still running strong in the heart of Boeing. They plan to warp the newer 787 instrument panel into the older 767 they are proposing.
Cost enhancement is hard at work.
The urge to jazz up the aircraft is still running strong in the heart of Boeing. They plan to warp the newer 787 instrument panel into the older 767 they are proposing.
Cost enhancement is hard at work.
Wednesday, March 10, 2010
Franconia Town Meeting
We still do it the old fashioned way in Franconia. None of this new fangled SB-2 stuff for us. After the overflow crowd at town hall last year, town meeting moved to the larger Lafayette school gym. Turnout was decent, better than 150 people. The standard town warrent articles, budget, purchase of new vehicles, library appropriation, and such all passed on voice vote with little discussion. The first controversial article was a proposal to relocate the town police department from the big tin building they currently share with the fire department and the life squad into the cellar of the town hall. The town's infrastructure committee recommended this plan. A citizen asked the police chief to comment on the plan. Turns out the chief was against it for a number of good reasons, and then the cost was $480,000 and that plan got tabled.
Then the greenies got a tax break for "alternate energy" (wind, solar, and wood heat). That was a close vote.
Then we got to really controversial, a resolution approving the naming of rt 18 up three mile hill after police corporal Bruce McKay who was murdered in the line of duty right in the center of town a few years ago. A secret ballot was adopted after a show of hand vote defeated a motion to table the matter. Surprisingly, after voting to keep the issue before the meeting, the town voted down the proposal 92 to 70.
Then a plan to have the town cough up $40K to fix the clock tower on the Dow Academy building was tabled after a good deal of discussion. The clock town is nice and scenic and all that, but it isn't town property.
The last controversial article was a resolution to support a state wide referendum on gay marriage. It was voted down. After that vote a large number of people got up and left. Things wrapped up at 11 PM, a couple of hours later than last year's town meeting which approved the massive water project.
Then the greenies got a tax break for "alternate energy" (wind, solar, and wood heat). That was a close vote.
Then we got to really controversial, a resolution approving the naming of rt 18 up three mile hill after police corporal Bruce McKay who was murdered in the line of duty right in the center of town a few years ago. A secret ballot was adopted after a show of hand vote defeated a motion to table the matter. Surprisingly, after voting to keep the issue before the meeting, the town voted down the proposal 92 to 70.
Then a plan to have the town cough up $40K to fix the clock tower on the Dow Academy building was tabled after a good deal of discussion. The clock town is nice and scenic and all that, but it isn't town property.
The last controversial article was a resolution to support a state wide referendum on gay marriage. It was voted down. After that vote a large number of people got up and left. Things wrapped up at 11 PM, a couple of hours later than last year's town meeting which approved the massive water project.
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