What caused Great Depression 2.0

According to The Economist that is.

1.Banks made risky, in some cases ridiculous loans and mortgages because the risky loans paid high interest rates.  When the risky loans defaulted, the banks were stuck.

2,  Regulators like the Federal Reserve failed to crack down on risky loans 'cause every one was making so much money doing it.

3.  Low interest rates, caused by a lot of thrifty savers in China 9 ( the savings glut) drove down world wide interest rates.  The Economist thinks this was a bad thing because investors looking for a better rate of return invested in "dodgy"  (clever British-ism that) securities.  In my view low interest rates are a good thing because it makes it easier for consumers to finance houses, cars, vacations, whatever, which is good for sales.  

4.  Banks and investors lost "trust" in one another.  They began to worry about "counterparties" (borrowers) defaulting, and so began to refuse to lend to the riskier of them.  Another way of stating this, is banks and investors finally wised up a little bit and began to evaluate the risk in what they were doing.

5. Letting Lehman Brothers go bankrupt.  This scared the bejesus out of  everybody in finance, causing them to stop lending.  " Non financial companies, unable to rely on being able to borrow to pay suppliers or workers, froze spending..."   This is pure imagination.  "Non financial companies"  (manufacturers for example)  never borrow to meet payroll.  They make payroll from sales revenue.  If sales dry up, they lay off workers.  They never borrow to pay suppliers, they just pay them late.  Ideally you can turn parts into product and sell the product within the 45 days you have to make good on a purchase order.  If it takes longer, the supplier gets paid later.  If sales dry up, you stop ordering parts.
  As far as I am concerned, they should have let some more companies go bankrupt.  Each bankruptcy teaches finance weenies that when they are not careful, they too can loose their jobs. 

6.  Letting the PIGs (Portugal, Italy, Greece) run up such huge current account debts, otherwise known as borrowing.   Nobody ( including the Economist) understood that joining the Euro means you can no longer print money to pay your debts.  Used to be a Greece could print a lot of money, the value of the money would fall, and so the amount of borrowing was automatically kept within sane limits.  Once they went on the Euro, they could no longer print their own money, and when the loans came due, they could not pay them. 

Negotiated settlement in Syria

You hear 'em talking about it.  But it won't work.  Assad knows that he has to win, or he is dead.  Just like Hosni Mubarak, Saddam Hussein, Moammar Qaddafi, all dead.  In a spot that that, is a man likely to cut a deal with his enemies?  He might, maybe, go along with giving up his poison gas, but he isn't going share power with Al Quada. 

Car starting in Winter

Was talking to youngest son, who is out in Minot, North Dakota, about getting his car ready for winter.  Winter in Minot is really really bad.  I recommended he put in a block heater rather than a freeze plug heater, and carry a really long extension cord.  Northern NH winters are harsh, but not so harsh as to require block heaters, where as in Duluth, Minnesota, in which I spent three winters, every car in the city had a block heater. You could tell by the plugs hanging out of the grilles.
   Conversation moved on to other things, but later, I thought of  a number of winter car tricks that I hadn't passed on.  Hence this post.
    Cars have improved greatly since I started driving.  We have alternators now, which throw a lot more juice than the old DC generators,  keeping the battery charged.  We have fuel injection, controlled by clever microprocessors which are much better at getting the mixture right than feet made clumsy by ski boots.  We have solid state ignition that throws a spark so hot it will fire plugs burned out to twice the proper gap.  At 20 below, a 2013 car will most likely crank up and go, whereas a 1957 Chevy most likely would not. 
   One thing that has not improved is the battery.  Being chemical contraptions, they slow down as they get cold.  Batteries are rated for total capacity, (usually 80 ampere-hours) and cold weather cranking current at zero degrees.  (usually 800 amperes)  As the temperature drops below zero,  cranking current goes down. By the time forty below is reached, the battery may not have enough current to light the dome lamp.
   When the weatherman is predicting really cold, you can just bring the battery indoors to keep it warm.  In the morning, a nice toasty warm room temperature battery will crank with enthusiasm.  Or stick a 100 watt light bulb under the hood next to the battery.  Mechanic's trouble light works well.  Stock up on 100 watt bulbs, the greenies are banning their sale.  Or stick a battery charger on it.  The charging current warms the entire battery, as well as bringing the charge up.
   Batteries last three, maybe four winters.  Then they go weak, and won't crank in cold weather.  How to tell when the battery is getting old and tired.  Check the voltage with a multimeter.  A good battery, fully charged, and warm, say after a two-three hour drive, will show 12.8 volts.  As they age, they show less.  When the batttery gets down into the eleven volt range, it's time to go to Sears and get a  Diehard.  Battery voltage is measured engine off.  When the engine is running, what you see is alternator voltage, which needs to be 14 volts or a little more to charge the battery.  If alternator voltage is low, that's the reason your battery voltage is low, the alternator isn't doing it's thing and charging the battery.
When the car fails to crank over,  get out and touch each battery terminal with your bare hand.  If you feel one of 'em getting warm, that's a sign it isn't making good contact.  Couple of times over the years, I have gotten the car to go by pulling the cable off, polishing the cable end and the battery terminal and putting it back together.  You do carry tools in your car?  All you need for this trick is pliers and a pocket knife.
   The sun is your friend in cold weather.  Mid day sun can warm a car up to nearly room temperature, which makes starting more certain.  It may not help if you gotta get to work, but if all you have to do is go to the store, do it at mid day.  Brush the snow off the car so the sun can get at it.
    Back the car into the driveway.  Should you need to jump start it, it's much easier if the hood faces out to the street.  You do carry jumper cables?  It's also easier to ram out thru that snow drift the plow throws across your driveway going forward, rather than backing into it.  Leave the parking brake OFF.  It can freeze ON, and then you are stuck til it melts out.  

The Escape Hatch Opens in Syria

Looks like Obama has found a way to avoid striking Syria and saving some face.  Kerry proposed a deal where Assad gives up his chemical weapons and we don't bomb him.  And, bingo, the Russians take us up on it.  Details are unclear, but Congress will be able to avoid voting for military action that the voters are dead set against, and the democrats in Congress will be able to avoid hanging Obama out to dry. 
   Looks like the famous collision between the irresistible force and the immovable object has been side stepped. 
   Side stepping is so attractive to every one that it will probably take place.   
   Now we can get on with the debt limit, the budget, Obamacare, immigration,  IRS, EPA, and what to do about Detroit. 

There must be consequences

For the use of poison gas.  So say Obama's guys, which includes most of the media talking heads.  But that's not the real issue.  Shall the United States take sides in the Syrian civil war against the current dictator, Basher Assad?  Doing so is highly likely to depose Assad and turn Syria over to the opposition, who are not nice people.  The opposition is largely al Quada and other Islamist crazies who have been video taped eating the hearts and livers of slain government soldiers. If they take power they will impose Sharia law, drive all but muslims out of the country, and line up behind the ayatollahs in Teheran.  The minority communities of Christians, Jews and Alawites are terrified. They know what an opposition victory has in store for them.
    Turning Syria into an Islamist republic will harm the reputation of the United States far more than failing to make good on Obama's idle threats.
    The decision to intervene in Syria must be based upon what it will do to Syria, not what it will do to Obama's reputation.    

Primaried

They had an ex congresswoman from California on Meet the Press this morning.  She was probably in her fifties, doing a fairly good job of looking like she was only 20.  Blond, Nice tan, good weight, good hairdo.  She said "I got primaried" in the same tone of voice she might have used to say "I got mugged".  Clearly she felt loosing her office in a primary election was dirty, underhanded, un American, and ought to be illegal.  Obviously, an incumbent like her was owed re-election.
   I got news for her.  We invented primaries to let the voters clear out dead wood like her.  Incumbents loose primary elections when they alienate their constituents. 

Times are changing

My college alumni magazine turned up in today's mail.  So I flip thru it looking for mention of any one I might still know.  It's been quite a few years.  So skimming the page of newly weds, all dressed in their best, we now have a gay couple smack in the middle of the page.  That did catch my eye.
   Times they are a'changing.