"Emancipate yourself from mental slavery, none but ourselves can free our mind.” - Bob Marley

Sunday, August 31, 2008

All Sarah, All the Time

Can't beat this, stolen from here (this guy is so right about health care - and so wrong about Bush and the economy - it's amazing).

And you won't want to miss Facts About Sarah Palin, (loosely modelled after a similar effort about Chuck Norris). For example:

Sarah Palin’s enemies are automatically added to the Endangered Species List
Death once had a near-Sarah Palin experience

MaxedOutMama, having post-political-orgasmic flush is now watching Democrats self destruct; Dr. Melissa Clouthier has several good entries.

And Alan Colmes reveals he is slime (the latter second hand since Colmes took down the original - "Error 404" my ass!). Once again, my innocence is shattered.

Wednesday, August 27, 2008

Will This Be On The Ballot?

From http://www.worldnetdaily.com/ - This image available as bumpersticker here.

Sunday, August 24, 2008

The "Mythical" Social Security Crisis

I've been reading Paul Krugman sporadically for a while - I am very disappointed to see him spout this complete and utter rubbish.

In the August 24 post of his amusingly named "The Conscience of a Liberal" blog, Paul Krugman states:

No matter how many times you try to kill the mythical Social Security crisis, it just keeps coming back.

He goes on to quote from a CBO study:

CBO’s projections indicate that future Social Security beneficiaries will receive larger benefits in retirement...than current beneficiaries do, ... even if the scheduled payments are reduced because the trust funds are exhausted.

Hint to Krugman and CBO: the "trust funds" are exhausted right now.

Per Wikipedia:

Unlike a typical private pension plan, the Social Security Trust Fund does not hold any marketable assets to secure workers' paid-in contributions. Instead, it holds non-negotiable United States Treasury bonds and U.S. securities backed "by the full faith and credit of the government".

[Emphasis added.]

Wikipedia quotes the Office of Management and Budget on this arrangement:

These [Trust Fund] balances are available to finance future benefit payments and other Trust Fund expenditures – but only in a bookkeeping sense.... They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. (from FY 2000 Budget, Analytical Perspectives, p. 337)

[Emphasis added.]

Which assumes that we'll still have taxpayers who can and will pay more taxes; and/or we'll still have suckers investors who will be willing to buy even more USG debt.

The National Bureau of Economic Research chimes in, describing this situation:

The trust fund build-up may not help future generations due to the adoption of the Unified Budget in 1970. The Unified Budget includes trust fund receipts as income and trust fund payments as expenditures. The empirical evidence suggests that attempts to balance the Unified Budget while the trust funds were generating surpluses has led to increased government spending and personal and corporation income tax cuts within the rest of the federal government.
[This also demonstrates that not only are the "Trust Funds" of no use to the future, it demonstrates that the Bush tax cuts at least in part used a regressive tax (the "payroll tax", which only covers the first $102,000 of income) to finance a very "progressive" tax cut, where the benefits flowed overwhelmingly to the well-off.]

As for the best way to internret the worth of the "Trust Funds": Wikipedia states:

If you write an I.O.U. to yourself and count this as an asset, this presents very different issues than if someone else writes you an I.O.U.

And that is what the trust funds are: an IOU from one part of the government to another, with unspecified means of payment to be figured out at some unspecified future date.

It's as if you gave money every year to an investor for a retirement fund, and instead of investing it, he took it - as well as all of his own salary, his HELOC and maxed out credit cards and everything else he could beg, borrow, or steal - and spent it all on meth and hookers. One day, you ask him to see the assets of your retirement plan and he pulls out of his pockets a bunch of IOUs - all signed by him. That's our government.

So the "Mythical" Crisis is very real indeed.

Automakers Seek More Corporate Welfare

By way of Mish, we see at Bloomberg GM, Ford Seek $50 Billion From U.S., Double Request

General Motors Corp., Ford Motor Co., Chrysler LLC and U.S. auto-parts
makers are seeking $50 billion in government-backed loans ..to develop and build more fuel-efficient vehicles.
The industry is also seeking fewer restrictions on how the funding is used

Yes, heaven forbid that the money actually be used for what Congress would have intended. So much better for CEO stock options and stock buy-backs - the stuff that made America great!

GM and Ford lost $24.1 billion in the second quarter as consumers, battered
by record gasoline prices, abandoned the trucks that provide most of U.S.
companies' profit
Presidential candidate and presumptive Republican nominee Sen. John McCain today gave his support to the proposal.

There go those Democrats giving away taxpayer money again. Oh, wait! McCain is a Republican! Nevermind.

``This is a horrible idea, another transfer of funds to failed ventures,'' said David Littmann, senior economist for the Mackinac Center for Public Policy in Midland, Michigan, which describes itself as a supporter of free-market ideals. ``If this were a good idea, the market would price the debt accordingly and give them the money.''

[Emphasis added.

Mish goes on to say:

GM is not really a manufacturing company at all, but rather a subprime lender that sells cars. The market for subprime has dried up so GM needs another "transition".

So, yes, let's pour more money into companies that can't compete.

Saturday, August 23, 2008

The Obama Uncertainty Principle

The task of determining Barack Obama's political stands is so dificult that it has led to wags borrowing language and concepts from Quantum Mechanics to describe the dificulties.

In particular, the Heisenberg Uncertainty Principle is much referred to:

The Heisenberg uncertainty principle states that locating a particle in a small region of space makes the momentum of the particle uncertain; and conversely, that measuring the momentum of a particle precisely makes the position uncertain.

The level of uncertainty is very small, hence this only becomes a significant issue when dealing with objects of incredibly small substance. Apparently, Obama's political views qualify.

So the Obama Uncertainty Principle is that - while we may fret that McCain's view will change over months or years - we cannot with any certainty state what Obama's political position is right now.

A peculiar corollary is that the more you listen to Obama, the less you know about what his actual position is.

He is some perfect paradox of complete opacity and utter invisibility.

Carl at No Oil For Pacifists has done a good job of documenting this effect regarding racial preferences. (Note that I disagree with Carl about lots of stuff. But he's nailed this one. And you find good stuff at his site regarding "Global Warming", among other things.) And I've made my own complaints previously here and here.

Obama and Infanticide

I couldn't dream this up in my worst nightmares. But it is real.

Life with Obama Abortion champion.

The tiny newborn baby made very little noise as he struggled to breathe. He lacked the strength to cry. He had been born four months premature.

“At that age,” says nurse Jill Stanek, “their lungs haven’t matured.”

Stanek is the nurse who found herself cradling this baby in her hands for all of his 45-minute lifetime.
No one was trying to save his life now, putting him into an incubator, giving him oxygen or nourishment. He had just been left to die.
In “induced labor” or “prostaglandin” abortion — a common procedure at the hospital — the doctor administers drugs that dilate the mother’s cervix and induce contractions, forcing a small baby out of the mother’s uterus. Most of the time, the baby dies in utero, killed by the force of the violent contractions. But it does not always work. Such abortions sometimes result in a premature baby being born alive.
Stanek’s effort to right this wrong would lead her to testify before various committees. It would lead her to a state senator, Patrick O’Malley, who would propose a bill to stop what was going on at the hospital.

Her attempt to change a corrupt medical practice and bring hope to defenseless infants would put her on a collision course with a state senator named Barack Obama.

On March 30, 2001, Obama was the only senator to speak in opposition to a bill that would have banned the practice of leaving premature abortion survivors to die.
Obama would speak against the born-alive protection bill once again when it was proposed in 2002, and he would kill the bill when it came before the committee he chaired in 2003, after Democrats had taken control of the Illinois General Assembly. His is a radical position that most abortion-choice advocates do not share.
Obama’s work to kill the bill in 2003 has always been attested to by witnesses (committee records are poorly kept in Springfield), but yesterday the National Right to Life Committee found and revealed the document showing definitively that Obama had voted against it in committee — against the exact same bill he is now falsely claiming on his own campaign website that he would have supported.

See more from Jill Stanek, debunking Obama's claim that he would have voted for the Federal version of the bill because it included a "neutrality clause" missing from the Illinois legislation.

Less than two years after this meeting, Obama began to publicly claim that he opposed the state BAIPA because it lacked the "neutrality" clause, and that he would have supported the federal version (had he been a member of Congress) because it contained the "neutrality" clause.

His claim has been accepted on its face by various media outlets, producing stories that have in turn been quoted by the Obama campaign and Obama defenders in attacking anyone who asserts that Obama opposed born-alive legislation similar to the federal bill. It has also been forcefully repeated by advocacy groups such as NARAL (see, for example, this June 30, 2008 "alert" from NARAL).

It appears that as of August 7, 2008, only one writer - Terence Jeffrey, a contributing editor to HumanEvents.com - had correctly reported the essence of this story, in a column posted on January 16, 2008 (read it here), but his report was ignored by the Obama campaign and overlooked by others at the time.

Now, the uncovering of the Senate Committee Action Report and the contemporary Associated Press report shed new light on Senator Obama's four-year effort to cover up his real record of refusing to protect live-born survivors of abortion.

Here is one document with all the specifics included. Obama abortion support exceeds even NARAL's.

This passes beyond all comprehension. I've been a babe in the woods on this issue.

Obama, Chicago and Cheyenne - WTF?

On the day of the Supreme Court ruling in Heller v DC, we can see the followiing:

[McCain] criticized Sen. Barack Obama for not signing a bipartisan amicus brief supporting the ruling later issued by the Supreme Court, and singled out the Chicago ban in describing what the ruling should change.
Obama said if elected president, he would uphold the rights of gun owners, but he said: "I know that what works in Chicago may not work in Cheyenne."

First off, "what works in Chicago" - NOT. Gun control does not work. With one of the most draconian gun bans in the country, Chicago still rates very high in all sortds of violent crime.

But leaving that aside, what makes the comparison between Chicago and Cheyenne interesting? Was it just alliteration? Interestingly enouh, indications are that the same language appears in drafts of the 2008 Democratic platform.

I think the comparison is very interesting.

Here is information about Chicago. Here is information about Cheyenne.

Chicago, IL, population 2,842,518
Cheyenne, WY, population 55,731

OK, big difference. But is that a qualitative difference or merely a quantitative one? I say the latter.

Median household income:

Chicago: $38,625
Cheyenne: $38,856

Looks similar.

Violent Crime, 2002 (only year with stats for both):

Rate Per 100K People:

Chicago: 1,498
Cheyenne: 202

More detail from here, by way of here:

Note that these rates are per 100,000 people, so they are normalized relative to population.

Latest 2006 Crimes per 100,000 People:

Chicago, ILCheyenne, WYNational

Forcible Rape:
Aggravated Assault:610.4111.8336.5
Larceny Theft:2930.13504.52601.7
Vehicle Theft:763.8218.3501.5

Whoa, Nellie! Something's different OK.

Gun laws:

Chicago: No new handguns guns allowed to anybody since 1982, except police and politicians. Yes, politicians. "Assault weapons" banned in 1992. No Concealed Carry is allowed for non-LEO in Illinois.

Cheyenne: Wyoming state law provides for the issuance of concealed firearm permits.

So why is it OK for guns in Cheyenne?

Could this have anything to do with it?

Race in Cheyenne

Population by Race


African American3%

Native American1%




Race in Chicago

Population by Race


African American37%

Native American0%




So are Obama and the Dems actually saying that gun control needs to be in place in cities with large non-white populations, but not in cities with mainly white populations? Or does it just seem that way?

Note that I am not saying that race makes the difference in crime rates. It was Obama who named those 2 cities - not me.

Wednesday, August 20, 2008

Preserve, Protect and Defend the Constitution of the United States, Part 2

Barack Obama is not fit to be president of the United States.

The title of this post comes from the Presidential Oath of Office. It's full text is:

I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States.

The Second Amendment to the Constitution reads:

A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.

Though many sophists were inclined to believe that this somehow limited the rights to those associated with a Militia, most reasonable folks knew that "the people" referred to in the second amendment were the same "the people" referred to in the first, fourth, ninth and and tenth amendments.

The Supreme Court stated this utterly explicitly in Heller v DC on June 26, 2008.

Obama, however, has undermined the Second Amendment at every chance, in ways that render it null and void, while simultaneously professing (lying about) his support for the individual right to keep and bear arms.

Perhaps the most comprehensive collection of documentation of this dishonesty is the sarcastically named Sportsmen for Obama site. Another source is the NRA site here and here and here.

Obama does not believe in even the most basic right to keep and bear arms in self-defense in one's own home, see here for his vote against an override of gun bans for those in that situation.

He has stated that he considered DC's law ban constitutional. He has stated that he still believes Chicago's gun ban is constitutional, even though it fails under both 2nd and 14th Amendment laws (the Chicao ban allows politicians to keep and carry guns, but not private citizens - "equal proection under the law"?).

He has variously proposed or supported:

  • no handguns
  • no semi-automatics
  • no guns stores within 5 miles of a park or public school

amongst other absurdities and atrocities.

The denial of effective defense to law abiding citizens is unconstitutional and has been the pre-cursor to many mass-murders in the 20th century. See Lethal Laws for more information.

Latest Dose of Doom

Michael Panzner finds some (nearly or "morely") as pessimistic Nouriel Roubini in "Credit Crunch May Take Out Large US Bank Warns Former IMF Chief,"

Downward Pressure on Rents - which will increase even more the downward pressure on house prices, both through the rent-or-own decision or the investor willingness to purchase.

Lehman In Deep Trouble - Meredith Whitney famously side-stepped commenting on Lehman - now we see why.

Fannie, Freddie $223 Billion Debt Rollover Problem

Money quotes:

Investors this week demanded an extra 104 basis points in yield to own Freddie's five-year debt rather than Treasuries of similar maturity, the most since reaching a 10-year high of 114 basis points in March

Fannie spreads approached a 10-year high of 104 basis points on Aug. 18,

[Hank] Paulson has virtually zero credibility at this point, on the dollar, on Fannie, on anything.

$233 Billion is a an enormous amount of debt to have roll over between now and September 30, especially in this market. And there is a decent chance the bond market chokes on those rollovers.
Nouriel Roubini - The worst economic and financial crisis in decades

This is by far the worst financial crisis since the Great Depression, not as severe as the Great Depression but second only to it.
This is not just a subprime mortgage crisis; this is the crisis of an entire subprime financial system: losses are spreading from subprime to near prime and prime mortgages including hundreds of billions of dollars of home equity loans that are worth little; to commercial real estate; to unsecured consumer credit (credit cards, student loans, auto loans); to leveraged loans that financed reckless debt-laden LBOs; to muni bonds that will go bust as hundred of municipalities will go bust; to industrial and commercial loans; to corporate bonds whose default rate will jump from close to 0% to over 10%;

And from late June in Not Your Grandma's Depression, James Kunstler ntes that if the economy does take the dirt nap, this country is in many ways far less well prepared than in the 1930s:

We're a very different country than we were in 1932. In that earlier crisis of capital, few people had any money but our society still possessed fantastic resources. We had plenty of everything that our land could provide: a treasure trove of mineral ores and the equipment to refine it all, a wealth of oil and gas still in the ground, and all the rigs needed to get at it, manpower galore (and of a highly disciplined, regimented kind), with fine-tuned factories waiting for orders. We had a railroad system that was the envy of the world.....

Our debt problems today are of a magnitude so extreme that astronomers would be hard pressed to calculate them....

the upshot will be something at least twice as bad as the Great Depression of the 1930s: people with no money in a land with no resources (with manpower that has no discipline), hardly any family farms left, cities that are basket-cases of bottomless need, comatose small towns stripped of their assets and social capital, an aviation industry on the verge of death, and a railroad system that is the laughingstock of the world. Not to mention the mind-boggling liabilities of suburbia and the motoring infrastructure that services it.
I don;t know if he's right about that "at least twice as bad as the Great Depression", but the comparison is sobering.

Thursday, August 14, 2008


After being treated to Phil "the recession is all in your head" Gramm's rantings as chief economic advisor to and co-chairman of John McCain's campaign, today we find that Jim Leach will endors Barack Obama.

Jim Leach - great name, that - is another co-conspirator in "Sandy's Bill", Gramm-Leach-Bliley (where Sandy is the infamous Sanford Weill, creator of CitiGroup as a subprime giant). See here and here (ironically that site blames Clinton more the the individual legislators, but I've already conceded that Clinton was bought and paid for too).

Note to Obama: this is help you can do without.

Note to everybody else: evidence that both candidates and parties are bought and paid for.

Wednesday, August 13, 2008



My God, these soldiers are amazing.

4 soldiers, each lost one or more limbs. Each interviewed in 2005 and again in 2008.

Watch or read the transcript for Erasmo Valles. No transcript for the second one as of this writing - but at one point he states that he wants to study education and criminal justice so he can work with troubled kids - so he can "give something back".

He served for years, he lost a leg and he wants to give back. What an amazing example of a great human being.

God bless and save our troops everywhere.

Tuesday, August 12, 2008

Preserve, Protect and Defend the Constitution of the United States

John McCain is not fit to be president of the United States.

The title of this post comes from the Presidential Oath of Office. It's full text is:

I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States.
George Bush has grossly violated this oath. The Supreme Court has sent him back multiple times, telling him to fix this. Instead of fixing his behaviour to adhere to the Constitution, Bush, with Congress's incomprehensible complicity, continues to keep trying to square the circle, by passing law after law, seeking somehow to make the blatant Statism constitutional. It will not work - it cannot work.

In the latest go around, the Military Commissions Act, John McCain's culpability is total.

John McCain is not fit to be president of the United States.

I don't know whether Obama is fit to be president, but I know that McCain is not. I do know that Obama voted against and spoke out against this abomination.

MaxedOutMama has covered part of this well - as related to the McCain-Feingold act. (I believe she has found reason to dislike Obama even more, especially here, however.)

To add to the infamy of McCain-Feingold's blatant trampling of the 1st Amendment, I give you the Bush-McCain undermining of the right to Habeas Corpus and right to trial by jury before deprivation of liberty.

For what Bush/McCain America has come to, I give you the case of Jose Padilla.

Padilla is a U.S. Citizen. He was arrested in Chicago, which, (in spite Mayor Daley's best efforts), is still part of the United States.

Here is what happened next:

When suspected Al Qaeda operative Jose Padilla was whisked from the criminal justice system to military custody in June 2002, it was done for a key purpose – to break his will to remain silent.

As a US citizen, Mr. Padilla enjoyed a right against forced self-incrimination. But this constitutional guarantee vanished the instant President Bush declared him an enemy combatant.


Padilla was delivered to the US Naval Consolidated Brig in Charleston, S.C., where he was held not only in solitary confinement but as the sole detainee in a high-security wing of the prison. Fifteen other cells sat empty around him.

The purpose of the extraordinary privacy, according to experts familiar with the technique, was to eliminate the possibility of human contact. No voices in the hallway. No conversations with other prisoners. No tapping out messages on the walls. No ability to maintain a sense of human connection, a sense of place or time.

In essence, experts say, the US government was trying to break Padilla's silence by plunging him into a mental twilight zone. Padilla was not the only Al Qaeda suspect locked away in isolation. Although harsh interrogation methods such as water-boarding, forced hypothermia, sleep deprivation, and stress positions draw more media attention, use of isolation to "soften up" detainees for questioning is much more common.


According to defense motions on file in the case, Padilla's cell measured nine feet by seven feet. The windows were covered over. There was a toilet and sink. The steel bunk was missing its mattress.

He had no pillow. No sheet. No clock. No calendar. No radio. No television. No telephone calls. No visitors. Even Padilla's lawyer was prevented from seeing him for nearly two years.

For significant periods of time the Muslim convert was denied any reading material, including the Koran. The mirror on the wall was confiscated. Meals were slid through a slot in the door. The light in his cell was always on.

So, the government can throw you in a hole that is closer to a sensory deprivation chamber than it is to a normal jail cell and leave you there for 2 years. Where is that in the Constitution? NOWHERE.

In the Constitution we are guaranteed the Writ of Habeas Corpus, where the government must bring the accused into a Court of law and make its case for holding the accused.

The Constitution provides that "The privilege of the writ of habeas corpus shall not be suspended, unless when in cases of rebellion or invasion, the public safety may require it."

We are not in a state of rebellion. We are not being invaded. And Bush has not suspended the writ in any legal fashion - he has arrogated to himself the privilege of pretending it doesn't exist whenever he feels like it. Or whenever the Secretary of Defense feels like it. Or whenever anybody so delegated by either of those to feel like it - because that's the range of people who can declare you an unlawful enemy combatant in the MCA.

No American is safe while the laws of the Bush regime are on the books. And John McCain helped very much to put those laws there.

So what happened to Jose Padilla? He was *never* even tried for the "Dirty Bomb" plot.

But he did become hopelessly mentally ill, courtesy George Bush.

"People who have known him and loved him before his military detention don't feel they can even bear to see him because he is so clearly mentally ill."

In May 2002, a month before he entered the brig, Padilla was taken into custody, held in New York City, and given access to a court-appointed lawyer, Donna Newman. Two years later, when the Bush administration first allowed Padilla to see his lawyers again, Ms. Newman and another attorney visited.

"There is no question he had changed," Newman says. "Prior to his being held in South Carolina there was no reason to suspect that he had any kind of [mental] problem."
His mother said she had visited him eight or nine times but that it was becoming too hard emotionally to "see Jose that way." She added that he did not have facial ticks prior to being incarcerated.


Some psychological tests place him on par with individuals who have suffered brain damage, according to the reports prepared by Hegarty, Grassian, and Patricia Zapf, a New York psychologist and psychology professor at John Jay College of Criminal Justice in New York.

Padilla's treatment in the brig is classified as a state secret.


Padilla's mother became increasingly anxious. Finally she confronted her son: "Did they torture you?" she asked.

"He turned towards her, his face grimacing, his eyes blinking, and in panic and rage he demanded: 'Don't you ever, ever, ask that question again,' " the Grassian report says.

The government never presented any part of the alleged "dirty-bomb" plot in the case, and some analysts say the government's cobbled-together case against Padilla is weak.

It is unclear what Padilla thinks about the possibility of an acquittal in Miami. But Hegarty says that if Padilla's lawyers win the case it could mark the worst possible outcome for him. That's because the president might try to move Padilla back to his old cell in the brig.

"There is no question in my mind that his first and most important priority is to not go back to the brig," Hegarty says. "This is what leaves me chilled, if one were to offer him a long prison term or return to the brig, he would take prison, in a heartbeat."

She adds, "He told me more than once that if he went back to the brig he knew what he had to do." Her notes reflect Padilla's hints of suicide.

[Emphasis added.]

That's right folks - even if acquitted, Padilla faced incarceration for life due to his designation as an unlawful enemy combatant.

Same deal for Hamdan:

The White House claims it can still imprison for life anyone the president designates as an enemy combatant, as Bush has Hamdan, even if the detainee is acquitted or has served his sentence.

That's Bush's America. That's McCain's America. No way in HELL is that MY America.



Sunday, August 10, 2008

I Can't Make this Stuff Up, Number 1

Good thing I'm not tagging yet, my brain would have exploded on this one.

Hat Tip to bacon dreamz in the comments on Calculated Risk I presentL

The Rapture Index

The following are, I swear, direct copy and paste from the site at http://www.raptureready.com/rap2.html :

The Purpose For This Index

The Rapture Index has two functions: one is to factor together a number of related end time components into a cohesive indicator, and the other is to standardize those components to eliminate the wide variance that currently exists with prophecy reporting.

The Rapture Index is by no means meant to predict the rapture, however, the index is designed to measure the type of activity that could act as a precursor to the rapture.

You could say the Rapture index is a Dow Jones Industrial Average of end time activity, but I think it would be better if you viewed it as prophetic speedometer. The higher the number, the faster we're moving towards the occurrence of pre-tribulation rapture.

Rapture Index of 100 and Below:  Slow prophetic activity
Rapture Index of 100 to 130: Moderate prophetic activity
Rapture Index of 130 to 160: Heavy prophetic activity
Rapture Index above 160: Fasten your seat belts

I was thinking this must be satire, but no, there is a home page with

Rapture Ready News End time related events (Daily)
Nearing Midnight In depth weekly commentary (Aug 4)
The Rapture Index A Gauge of the end times (Aug 4)
Israel Watch God's prophetic time clock (Aug 4)
Interesting E-mail Both the pro and the con (Aug 4)
End Times Top Ten A ranking prophetic news (Aug 4)
Rapture Ready Bulletin Board A place to fellowship

It goes on, but I can't.

More on the "Bush Recovery" and Real Income

In this article i see:

First, the Bush recovery has been weak in terms of jobs created, and, more importantly, in terms of growth of wages. This is the first "expansion" since WWII in which real wages have not risen, indeed, the median hourly wage actually fell by 2% since 2003 (Peters 2006). Wages and salaries have reached their lowest share of national income since data began to be collected in 1947 - just 45% of GDP in the first quarter of 2006, compared with 53.6% in 1970 or 50% as recently as 2001. Even workers at the 90th percentile have seen real pay fall for the past three years (Peters 2006). A detailed study of census data found that all of the growth of median income in the United States from 2001 to 2005 was due to growth of incomes of those over age 65; for those under age 65, income fell by an average of $2000 (The New York Times 2006)
Good stuff; gotta love them Republicans.

So Many Disasters, So Little Time

For our friends who cling to the "no 2 quarters of negative GDP growth, so no recession" meme:

Commercial Bankruptcy filings for the first half of 2008 are up 45 percent from last year
No problems here - plenty of room in the life boats.....

Unemployment Rate Rises to 5.7%
Latest word from California is they are seeing 6.9%

GM: $15.5 Billion Loss
Yes, if we can leverage the synergies of producing huge trucks and SUVs, lending money to people to buy them, and aggressive home mortgage loans.....oh, uh, never mind.

FT: Fears Growing Concerning CMBS Defaults
Subprime Residential is "Contained" - NOT!

CA Governor Orders Layoffs, Pay Cuts
"Ya, I vill go bach in time und fix everything...." - oh, that was just a movie

The Coming Hotel Bust
Yeah, these all seemed like a great idea in 2005, like, where's my cashflow, dude?

Quelle Surprise! Growth Revised to Negative in 4Q, Jobless Claims Rise
Luckily, we can *always* trust those government numbers. Once they've had 6 months to get it at least approximately right. Sort of. Maybe.

Continuing Job Claims and the "L" Shaped Recession
Check out that graph. "L" shaped trecession means we'll all be scaling back permanently. Except the pigmen bailed out by Paulson and Bernanke and Bush and Congress.


For all the real graphs of M3, GDP, etc, see here.

For real CPI numbers, see ShadowStats. It seems Bill Clinton, Ronald Reagan, and Jimmy Carter all "tweaked" these measures a bit.

The news is in and it's all bad.

Thursday, August 7, 2008

The Real Reason We Went to War in Iraq?

It appears to me that all the various reasons given at various times - imminence of threat, pre-emption of threat, WMD, links to Al Qaeda - are not why we actually went to war in Iraq.

There is plenty of evidence that Bush-43 came into office in 2001 bound and determined to bring down Sadam.

What we have here is history's first recorded case of inherited blue balls. Bush-41's unconsummated business in Iraq left Bush-43 with such a raging erection for Sadam that nothing was going to stop him until he found or manufactured an excuse to go in.

At least one neo-con agrees with Bush on this pre-determination.

Wednesday, August 6, 2008

Option ARM Defaults - The Next Wave of the Tsunami Begins

From Calculated Risk we see at the WSJ : "FirstFed Grapples With Payment-Option Mortgages"

Forty percent of its borrowers became at least 30 days delinquent after the payments on their adjustable-rate mortgages were recast. The number of foreclosed homes held by the bank doubled in the second quarter from the first quarter.
[T]he Los Angeles bank is on the front lines of what could be the next big mortgage debacle: payment option mortgages.
Well, Option ARM will have to duke it out with Alt-A (mostly "liar loans" and no money down deals). Thy are all in trouble, though Option ARMs come with the especially toxic exploding payment "feature".

The key word is "recast" This is not just in increase in interest rate. This is the conversion from negative-amortization to fully amortizing payments.

Option ARMs typically carry a low introductory rate and give borrowers multiple payment choices, including a minimum payment that may not even cover the interest due. Borrowers who make the minimum payment on a regular basis -- as many do -- can see their loan balance rise, known as negative amortization. Monthly payments can increase by 60% or more once borrowers begin making payments of principal and full interest. That typically happens after five years or earlier if the amount owed reaches a preset amount, typically 110% to 125% of the original loan balance.
Esitmates of borrowers making the minimum "negative amortization" - prior to recast - range as high as 80%. This is because this minimum payment is all they could afford - the Option ARM was a gimmick to allow reporting of an acceptable DTI, back when securitzation was the rage and anybody who could fog a mirror and lie up a reasonable DTI could get a loan.

Sunday, August 3, 2008

Much Needed Updates to Tin Foil Hat design

This is no laughing matter. Wiki has basic information here:

A tin foil hat is a piece of headgear made from one or more sheets of tin foil, aluminium foil or similar material. People wear the hats in the belief that they act to shield the brain from such influences as electromagnetic fields, or against alien interference, mind control and mind reading.

The idea of wearing a tin foil hat for protection from such threats has become a popular stereotype and term of derision. The phrase serves as a byword for paranoia and is often used to characterize conspiracy theorists.

Of course, just because you're paranoid doesn't mean they aren't out to get you. This is serious work.

Some proponents of a tin foil hat are concerned about the NSA transmitting commands to them. This is clearly nonsense of the highest order. Everyone knows that the NSA only reads your thoughts - it is the CIA that sends commands.

The example tin foil hats shown in the Wikipedia article a crude, improvised affairs - the state of the art is evolving.

In the comments to this CalculatedRisk post we find this:

Misean writes:

"Any advice on a proper tinfoil hat? If I use a colander, do I need an airspace between layers of foil still or does the colander suffice?"

Air space is undesireable. Start with lead foil as the first layer. Then at least 3 layers of aluminum. Depends on your risk level. I used 12.

Now, what most don't understand is that it is a good idea to generate an electromagnetic field around the hat. It's like a deflector shield.

You should install on the handles for 8 D-cells or, for longer duration, left and right hip packs for lantern batteries. Tie your packs together then wrap copper connected to the batteries around the hat.

[bobn note: if you connect the batteries so that the current can flow directly across the colander by itself, you will get very hot batteries, or a very hot colander, or both, in a hurry. Don't do this. The current must flow in series thru the colander and then the 12" nail electromagnet noted below.]

Attach a lead to the end of the wrap at the top of the hat and attach it to the leads of an electromagnet. Get some electromagnet copper and a 12" nail. Wrap a bunch of coils of wire around the 12" nail and then attach the leads to the power supply.

I used an entire spool of the thin electromagnet copper. But the strength of the electromagnetic field your trying to achieve is again based on you personal risk profile. The more coils you have, the more frequently you need to change the batteries.


This had obvious issues to which I responded here:

bobn writes:
Misean says:
The more coils you have, the more frequently you need to change the batteries.

Sorry, my BSEE says yer wrong. More coils of the same wire increases the resistance to flow of current, increasing the battery life.

But the real problem is that using just batteries only creates a static field - the CIA has known how to penetrate that for years - believe me, I know! You need an oscillator running at a randomly varying frequency, driving the coil thru a hi-power amplifier to have any effect.

I hope that some of you have found this useful. No, really, you don't have to thank me.

(Note: Misean's site is here. He is one of those FreeBSD freaks. I, in contrast, am a linux-head. )

Saturday, August 2, 2008

Why House Prices Can Only Drop - And Plenty

Much of the ranting surrounding the abominable "Foreclosure Prevention Act of 2008" dealt with "stabilizing" the housing market - to stem the decrease in the prices of houses.

This post is an attempt to show why that is not possible. Real house prices will inexorably drop back to somewhere around where they were in 2000. They can't do anything else, because it was only funny-money loans, which are no longer available and which will never be available again, that allowed the startling increases of the 2002-2006 to occur in the first place.

First a Disclaimer:

I'm not shorting any housing related stock - I don't play the markets at all as, in their current state, they are senseless or manipulated or both.

In fact, I wish houses would hold their value, as, due to ignorance of the history of housing prices and other negligence, I cleverly bought right at the top of the peak. So I wish I was wrong.

OK. Now for the pictures and a bunch of text:

This is the single most important picture for any prospective house buyer to look at. I wish to God I had seen this before buying my house in November of 2005. I was so naive. (But I still like having a house in the suburbs - renting in the city has issues for me anymore. And I bought with conventional fixed rat financing I can afford. So I'll make it OK.)

This picture graphs the ratio of median house price to median family income over more than 30 years. It shows that for more than 20 years, from 1981 to 2001, that ratio hovered right around 2.8 - so a family that earned say $50,000 could afford a $140,000 house.

Reducing aggregates of numbers (the incomes of all families; the prices of all houses) to single numbers (the "median") is fraught with statisitical issues, especially in times of rapid change. But that fact that this ratio stayed so constant for so long implies strongly to me that it validly means something. And that something is this: with conventional fixed-rate 30 year mortgages in the 5-7% interest rate, this is as much house as families could afford relative to their income. The usual measure is to take the mortgage payments for given loan (Principle and Interest), add in the Taxes and Insurance (so the accronym is PITI) for the house and divide this into the gross income. This yields a debt-to-income (DTI) ratio, and this number is critical to determining whether a particular family can afford a particular loan. DTI of .28 to .35 were once considered the upper limit.

What happened after 2001?

The short story is funny-money loans allowed people to buy houses they could not afford, by making the DTI ratios look lower than they actually were.

Alan Greenspan lowered the Fed Funds rates to 1%, and eventually this caused other bonds to return less, forcing investors looking for more return to look elsewhere. That flow of money moved into mortgage securtization where it produced lower mortgage rates. Lower mortgage rates produced lower monthly payments (and therefore DTI), which allowed people to buy more house relative to their income.

But eventually this phase ended - the Fed raised rates and by 2005 they were back in the normal range.

But by this point the boom was on - and more to the point, while the game was afoot, all the referees were bribed or blind drunk. Everybody was making so much money that anything that could be done, would be done to keep the game going.

So, because the the models all assumed that prices would continue to go up, and because the Banks and mortgage brokers were selling the loans through securitization and therefore didn't care what happened after the loan was sold, and because the only thing the buyers were looking at was FICO scores and DTI (and as time passed, they stopped even looking at FICO scores), ways were found to manipulate the DTI.

First came the Adjustable Rate Mortgage (ARM) - with an artificially low initial teaser rate the reported DTI was much lower than it would be when the teaser period expired. People bought houses using these because they didn't understand, or because they were given the mantra of: "house prices always go up, so you can always refinance or sell". The initial DTIs looked good to the investors, and the post-teaser rates looked even better to the investors, so they went for it to - invoking the same mantra as justification for the too-good-to-be-true returns.

Addtionally, loans were made where the family income was subject to little or no confirmation. Offically called 'Alt-A' or 'low-doc' or 'no-doc' loans, but widely referred to as "liar's loans", these allowed the DTI to be artificially lowered from the other end, as the family's income could be inflated, either by lying on the part of the home-buyer or by the people handling their paperwork.

Eventually, even "standard" ARMs weren't enough to keep the boom going for the pigmen, so there came the Pay Option ARM. In this loan, a teaser rate my be involved, or not, but it doesn't matter, because the house-buyer can choose different payment levels. The lowest one is one that does not even pay the interest due on the loan - this is called negative amortization, as the priciple owed actually gets larger. By the most amazing coinicidence, 60% to 80% of the people using this type of loan are paying the minimum, negative amortizing amount - because it is all they can afford. But it allowed the reported DTI to look good. However, there is no free lunch: after some period of time, say 5 years, or else after negative amortization causes the principle owed to exceed some set value - 115% or 125% of the original - the loan "recasts". In recasting, the loan is now a fully amortizing loan, usually at a higher interest level. The monthly payments literally explode for this event. (That process is just beginning, and will continue for several years.)

Finally, the originators and securitizers stopped requiring any down-payment.

So not only were home-buyers buying houses all out of relation to their income, but speculators - invoking the mantra "house prices always go up" - could buy nultiple houses. Enter "Casey Serin" into google for one of the more notorious examples.

The speculation helped end the cycle more decisively than it might otherwise have. In 2006, when the house price increases leveled out, there was a sudden uptick in people who stopped paying within the first 3 monthly payments. This is called Early Payment Default, and when this happens, the securitizers have the right to "put back" the loan to the originator - in these cases, not usually banks with any money but mortgage brokers who existed off their fees and had no capital of their own. These EPDs therefore caused the first great implosion of subprime lenders.

When the securitization market - where investors would endlessly, mindlessly fund these funny-money loans seemingly forever - died in August 2007, the boom was done and the bust was baked in.

Because we are now back to the regime where you need to put money down, you need to verify your income, everybody is making conventional loans only - no more screwing with the DTI - where they are making loans at all.

So, even if people wanted to pay 2005-2006 prices - they can't. Unless they are filthy rich, it's back to 2.8 times median income - and the dirty little secret of the Bush "recovery" - unlike previous recoveries - is that real income has stayed flat or dropped since 2001.

And now, two more pictures:

These both compare the cost of renting to buying a residence. Once again, we see how totally out of whack the 2000-2005 period is.

Once again, I state that this happened because of funny money available for purchases, but not for rents. And once again, these show that house/condo prices would need to fall until the relationship between purchase and rent reflects that of approx 2000 for things to be back in their historical relationship.

This is because the current disparity means that buying housing to rent it is a losing deal - so all investors who are awake will not enter this market. And those making the decision to buy or rent on hard economic grounds, rather than any sentiment toward ownsership, will also wait until the price to buy has fallen.

House/condo prices will fall. It will happen, because it can't not happen.

About Me

I'm a 57 year old geek. I voted Democratic for 20 years, because I disliked the Republicans more. But now, nobody really speaks for me. I'm for Guns, for more correct government regulation of the financial world, against illegal immigration and amnesty. (in 2008 I ended up voting Republican - too many questions about Obama, and voting against anybody who voted for TARP 1.) In 2010 I voted a stright republican ticket because the Democrats have completely lost their minds.