I got up yesterday at 0630. Made breakfast, fed the cat, loaded the car (signs, coffee thermos, camera) and set off for the polls. Got there as the polls opened. For poll watchers we had Russ Cumbee, holding signs for Kelly Ayotte (Republican senatorial candidate) , Kathy Taylor's husband holding a sign for Kathy (my opponent in the general election) and Marsha Graham holding signs for Anne Kuster (democratic US rep) and me holding a sign for myself (republican state Rep). All poll watchers in place and on duty long before the first voters appeared. Voting was heavy for an off year primary. Franconia had about 250 ballots cast out of 1000 registered voters. Bethlehem had about the same. The republicans had serious competition for nearly every office, so more Republicans than democrats voted.
Weather was variable, sun and showers. The showers were heavy, and cold. Holding an umbrella and two signs in a high wind takes some skill, especially if you want the umbrella to survive the experience. All concerned were thankful when the polls closed at 7PM.
Results are mixed. Republicans selected Charlie Bass for US Rep, John Stephan for governor, and the senate spot is contested between Kelly Ayotte and Ovide Lamontagne. Ovide came from absolutely nowheresville to striking distance of victory in just the last couple of weeks. Talk of recount is in the air, but nothing official, yet.
Wednesday, September 15, 2010
Monday, September 13, 2010
Basil boosts bank reserves
Since Great Depression 2.0 kicked off in '08 there has been a lot of talk about doing something about the banks. Looks like the international banking community is finally taking some action.
The subject is reserves, how much money must a bank hold in its vault to pay out withdrawals and cover losses. If a million dollar bank loan goes bad (borrower stops making payments) the bank ought to have a million dollars in reserves so it can stay in business, pay out withdrawals and even have a little money to do new loans with.
Notice that the Basil people cannot bring them selves to just post a level of reserves. That's too easy and people might understand what's going down. Instead they announce a complex mix of reserve levels which add up to 7% or maybe 10% depending upon the phase of the moon.
The issue is that banks hate holding money in the vault. They want to loan it all out to make more money. US banks have been holding about 4% reserves which is almost enough. All the real banks (except Citi) rode out the financial storms. The failures were all "near banks", brokerage houses (Lehman, Bear Stearns, Merrill Lynch), insurance companies (AIG) and mortgage makers (Countrywide), or little banks that FDIC could pay off.
The other issue is the quality of reserves. Ideally banks would hold real cash, bundles of dollar bills, neatly wrapped, in their vault. The Basil paper seems to give some leeway here. For instance, US banks can deposit their reserves with the Federal Reserve Bank and draw a bit of interest. They can buy T-bills 'cause they are as good as cash. Things get flakey from there. European banks used hold mortgage backed securities as reserves. This killed a flock of European banks when the mortgage backed securities suddenly became worthless in 07.
The Basil document is important, 'cause banking is a mobile business. Money is light and easy to ship. Banks can easily set up to do business in the country with the most lenient banking laws. Pass a Sarbanes Oxley bill and watch all the merger and acquisition business move out of New York and over to London. So we need a world wide agreement to actually do anything effective. As opposed to national regulation that merely drives banking business of of the country.
The subject is reserves, how much money must a bank hold in its vault to pay out withdrawals and cover losses. If a million dollar bank loan goes bad (borrower stops making payments) the bank ought to have a million dollars in reserves so it can stay in business, pay out withdrawals and even have a little money to do new loans with.
Notice that the Basil people cannot bring them selves to just post a level of reserves. That's too easy and people might understand what's going down. Instead they announce a complex mix of reserve levels which add up to 7% or maybe 10% depending upon the phase of the moon.
The issue is that banks hate holding money in the vault. They want to loan it all out to make more money. US banks have been holding about 4% reserves which is almost enough. All the real banks (except Citi) rode out the financial storms. The failures were all "near banks", brokerage houses (Lehman, Bear Stearns, Merrill Lynch), insurance companies (AIG) and mortgage makers (Countrywide), or little banks that FDIC could pay off.
The other issue is the quality of reserves. Ideally banks would hold real cash, bundles of dollar bills, neatly wrapped, in their vault. The Basil paper seems to give some leeway here. For instance, US banks can deposit their reserves with the Federal Reserve Bank and draw a bit of interest. They can buy T-bills 'cause they are as good as cash. Things get flakey from there. European banks used hold mortgage backed securities as reserves. This killed a flock of European banks when the mortgage backed securities suddenly became worthless in 07.
The Basil document is important, 'cause banking is a mobile business. Money is light and easy to ship. Banks can easily set up to do business in the country with the most lenient banking laws. Pass a Sarbanes Oxley bill and watch all the merger and acquisition business move out of New York and over to London. So we need a world wide agreement to actually do anything effective. As opposed to national regulation that merely drives banking business of of the country.
Sunday, September 12, 2010
NHPR and the Infrastructure
There was a somewhat confused young lady on NHPR this morning emoting over the terrible state of American "infrastructure". She never defined this somewhat nebulous term, but from context I believe she was talking about roads, railroads, and airways. She was convinced that the "infrastructure" was in terrible shape and needed massive amounts of work. Well paid work naturally.
Do I believe this? I drove to DC in May and Brooklyn in August. The interstates were all open, smoothly paved, and except where construction was occurring, in great shape.
Then she moved on to rail. The country desperately needs "high speed rail", and trains are so green because they are electrically powered. Two whoppers for the price of one. We already have high speed rail running from Boston to Washington. That's the only US route where high speed rail is competitive with flying. The East coast cities are close together and the train can match airline time. Most other US city pairs are so far apart that everybody flies. The second whopper concerns the electric power bit. Actually, nearly all trains are pulled by diesel locomotives. Only on the most heavily traveled routes does it pay to install the costly overhead wire needed for electric locomotives.
For closers, she must have been exposed to the sales pitch from the "NextGen" air traffic control system vendors. She claimed that "Nextgen" would save much jet fuel from better routing of airliners.
Not so. Nextgen would enrich a number of equipment suppliers but would have little effect on air traffic. Nextgen would replace the current ground radar system with GPS. Aircraft would all carry GPS equipment and the onboard GPS would radio the plane's position to air traffic control. GPS is accurate to tens of feet where as ground radar is only accurate to a couple of miles. However the couple of mile accuracy of radar is plenty good enough to avoid mid air collisions. The greater accuracy of GPS doesn't really do anything that needs doing. It takes the same amount of fuel to cover the distance no matter how accurately air traffic control knows the position of the plane in the air.
Do I believe this? I drove to DC in May and Brooklyn in August. The interstates were all open, smoothly paved, and except where construction was occurring, in great shape.
Then she moved on to rail. The country desperately needs "high speed rail", and trains are so green because they are electrically powered. Two whoppers for the price of one. We already have high speed rail running from Boston to Washington. That's the only US route where high speed rail is competitive with flying. The East coast cities are close together and the train can match airline time. Most other US city pairs are so far apart that everybody flies. The second whopper concerns the electric power bit. Actually, nearly all trains are pulled by diesel locomotives. Only on the most heavily traveled routes does it pay to install the costly overhead wire needed for electric locomotives.
For closers, she must have been exposed to the sales pitch from the "NextGen" air traffic control system vendors. She claimed that "Nextgen" would save much jet fuel from better routing of airliners.
Not so. Nextgen would enrich a number of equipment suppliers but would have little effect on air traffic. Nextgen would replace the current ground radar system with GPS. Aircraft would all carry GPS equipment and the onboard GPS would radio the plane's position to air traffic control. GPS is accurate to tens of feet where as ground radar is only accurate to a couple of miles. However the couple of mile accuracy of radar is plenty good enough to avoid mid air collisions. The greater accuracy of GPS doesn't really do anything that needs doing. It takes the same amount of fuel to cover the distance no matter how accurately air traffic control knows the position of the plane in the air.
Saturday, September 11, 2010
Chevrolet Caprice returns from the dead
Looks like Chevy wants to reclaim its share of the taxi/cop car market from Ford Crown Victoria. They may not be quite ready for prime time, but Chevy has a web site up to sell Caprices to cops.
Sic Transit Morning Gloria
Way back in spring, I fell for the flower seed display down at Mac's. I have a porch supported by a couple of rusty pipe columns. I bought a pack of morning glory seeds, thinking the climbing plant would cover up the rust. I planted them, watered them and nothing happened all summer. Not a morning glory to be seen.
Finally, yesterday, a pair of perfect morning glory blossoms appeared. Better late than never. This morning I took the camera down to photograph them. Arrg. They weren't blooming anymore. The two blossoms were all shriveled up and looked totally spent. Either morning glory only blooms for 24 hours, or the overnight chill (it got down to 40, but no frost) did them in.
Take home. Don't plant morning glory in Mittersill.
Finally, yesterday, a pair of perfect morning glory blossoms appeared. Better late than never. This morning I took the camera down to photograph them. Arrg. They weren't blooming anymore. The two blossoms were all shriveled up and looked totally spent. Either morning glory only blooms for 24 hours, or the overnight chill (it got down to 40, but no frost) did them in.
Take home. Don't plant morning glory in Mittersill.
Earmarks
Basically I'm agin 'em. The word is used for two somewhat different political maneuvers. Type A earmarks are special goodies written into (or slipped into) appropriations bills at the behest of your friendly local pol. The pols think bringing home the bacon makes their constituents love them and vote for their reelection. Most pols partake of type A earmarks with the exception of crusty conservatives like John McCain.
Type B earmarks dedicate the revenue from a tax to a specific purpose. For instance gasoline tax revenue is earmarked for highway construction. The supporters of NH gambling were going to earmark the revenue from the gambling tax to the department of health & human services. The revenue from RGGI energy taxes was earmarked for energy conservation projects. The green community was outraged when the legislature diverted RGGI money to the general fund.
I believe that the legislature ought to have the freedom to spend the state's limited revenues on the most urgent requirements. The earmarked revenue gets spent on the earmarked program regardless of need.
Of course, very occasionally, a good Type A earmark comes along. Good ole Judd Gregg slipped thru an earmark that brought some federal dollars to rebuild the Litteton Opera House. The restored Opera House is a beautiful building standing upon a commanding site and Littleton just wouldn't be the same without it. So let us enjoy our good earmark while making a New Year's resolution to sin no more.
Type B earmarks dedicate the revenue from a tax to a specific purpose. For instance gasoline tax revenue is earmarked for highway construction. The supporters of NH gambling were going to earmark the revenue from the gambling tax to the department of health & human services. The revenue from RGGI energy taxes was earmarked for energy conservation projects. The green community was outraged when the legislature diverted RGGI money to the general fund.
I believe that the legislature ought to have the freedom to spend the state's limited revenues on the most urgent requirements. The earmarked revenue gets spent on the earmarked program regardless of need.
Of course, very occasionally, a good Type A earmark comes along. Good ole Judd Gregg slipped thru an earmark that brought some federal dollars to rebuild the Litteton Opera House. The restored Opera House is a beautiful building standing upon a commanding site and Littleton just wouldn't be the same without it. So let us enjoy our good earmark while making a New Year's resolution to sin no more.
Thursday, September 9, 2010
Harrisburg, PA goes broke
The city of Harrisburg failed to make a $3.29 million bond payment yesterday according to the Wall St Journal. The straw that broke the camel's back is apparently a municipal incinerator. Built in the 1970's and "retrofitted to meet code" in the uh-oh's the incinerator carries $288 million in debt. The city of Harrisburg's population is only 47,000, so each man woman and child is responsible for $6127.66 worth of incinerator debt.
They will never pay that off, so they might as well declare bankruptcy and teach investors not to fund unaffordable projects.
Let's hope our NH state and town legislators are wise enough to avoid buying white elephants like this one.
They will never pay that off, so they might as well declare bankruptcy and teach investors not to fund unaffordable projects.
Let's hope our NH state and town legislators are wise enough to avoid buying white elephants like this one.
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