Predictions for 2009

This blog has turned into an econo-political blog over the last several months as I've gone through the exercise of teaching myself a little about the financial markets. In this post, I'm going to do some predictions and we'll see how much I've learned when we revisit it in a few months.

This is going to be a long and wordy post, so feel free to click away now.

First off, I would argue that there are massive economic forces at work that drown out everything else. The biggest of these is the spending binge that Obama and the Democrats have begun. Fred Barnes had this to say about Obama's start.

When Barack Obama met with TV anchors at a White House lunch last week, he assured them he likes being president. "And it turns out I'm very good at it," he added. Well, not exactly. What Obama is actually very good at is campaigning. He did it for two years as a presidential candidate, and it's pretty much what he's been doing in the six weeks since he was sworn in ...

He talks about "hard choices" but hasn't made any. With large Democratic majorities in Congress, he's free of worry about rebellion on Capitol Hill...

But there's a problem. Candidates don't have to deal with reality. They talk about the wonderful things they can accomplish as if advocating them is the same as achieving them. They live in a world of political make-believe in which everything from reconciling conflicting interests to paying for costly programs is easy.

That's the world Obama continues to inhabit. Like a candidate, he's a quick-change artist, constantly switching roles. Twice last week, he insisted he doesn't favor "big government." Then he proposed a budget that would vastly expand the size and reach of the federal government, add $600 billion to the deficit, and produce a one-year shortfall of $1.2 trillion (or more).

Right now, we are living in the euphoria that accompanies a credit card buying spree at the mall. Every store is open and our plastic is out. We're rushing here and there buying everything we've ever wanted. Obama has made no move at all to stop the Democrats in Congress from getting anything they wanted. Earmarks festooned the recent Stimuloid Porkgasm™ and infested the omnibus spending bill he just signed and he didn't make a peep. In fact, he claimed they weren't there. He has put forth a budget that is truly monstrous and promises gargantuan deficits. The Democrats in congress are larding it up with more earmarks and rushing to pass it as fast as they passed the Porkgasm.

That's the situation, now here are the predictions.

Short version: There is no one left to fund this spending spree. We will end up repudiating all this debt by printing money and inflating it away. That will lead to an increase in the minimum wage, higher unemployment, more debt and finally, wage and price controls.

Long version: It doesn't matter how safe Treasuries are if there's no one left to buy them. That's where we are right now. Foreign governments, all dealing with their own internal problems, don't have any money to lend us. Japan's economy is getting killed. Europe is in a financial meltdown worse than ours. That leaves China as our last hope for loans.

Forget it. Their economy is far worse than they let on. Asia economics expert Brad Setser is starting to wonder about them.

Throw in some indirect evidence that China slowed quite sharply at the end of last year, and there isn’t yet much evidence that Asia is going to help pull the rest of the world out of its slump. Right now Asia’s sharp deceleration implies it is adding to the forces that are pulling the global economy down, not propping it up. The IMF’s global forecasts — which presume that growth in India and China keep output in the emerging world from falling as sharply as it is expected to fall in the mature economies — consequently still seem on the optimistic side.

What evidence is there that our credit line has run out? Take a look at what Across the Curve has been blogging over the last few days. Here's some samples taken from various recent posts.

Over the course of the afternoon I did locate some (bond) traders who had observed real end user selling from investors who were casting their financial vote on the Obama budget. Those sellers looked at the budget and apropos Roberto Duran fighting Sugar Ray Leonard they cried, “no mas.” ...

I think that an era of unheard of concessions for Treasury issuance is possible too. The funding needs of the Treasury are prodigious and given the details of the budget released today it will only increase in the near term. The wholesale market ( primary dealers) has shrunk in size and the amount of balance sheet available to those in the market has contracted, too. I think that it is only a matter of time until demand slackens and the Treasury faces 10 basis point and 15 basis point tails on a regular basis (A tail is the number of basis points between the level at which the issue was trading in the brokers market and the level at which the auction stops.)

It has happened in other markets and it seems only logical to me that it should happen in this market also. If that pattern were to develop. I think it would force the hand of the Federal Reserve and would hasten their entry into the market as a buyer of Treasuries. (Emphasis mine. This means printing money to cover the debt.) ...

Prices of Treasury coupon securities tumbled today as investors drowned themselves in the spittle of never ending Treasury issuance. From the perspective of bond traders the recovery in the stock market added to the woes of the fixed income markets. We are approaching a junction at which fundamental economic data does not matter. (Emphasis mine.)

Going back to the issue at hand - paying for the spending spree - where else can we get the money? How about retirement accounts? Well, I would argue that anyone who could move their 401(k) out of the stock market and into Treasuries has done so already, or at least the majority has. There aren't any investors with money left to invest on the scale Obama needs. Remember, we're talking about $2T+ budget gaps. He needs 50 Bill Gateses to give him all of their money this year, 50 different ones next year, 50 more the year after that ...

How about if we tax the rich? Our Prelate the Primates has something to say about that.

A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That’s less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable “dime” of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.

So China doesn't have the money, the rest of the world doesn't have the money, retirement accounts don't have the money and those %#@^%@^&* rich swine don't have the money. How about those greedy pigs in big business?

Exxon is the biggest big business out there. What if we taxed every penny they made in profits? Well, they made $81.8B in profits last year and we took $36.5B of that in taxes already. That leaves only $45.2B left. Even if we took it all we would be left with this subtraction problem:

$2,000B - 45.2B = 1,954.8B

We would need to find an additional $1.95T to pay for the spending spree.

So the rest of the world doesn't have money to loan us, even if we killed all the greedy, rich people and harvested their organs we wouldn't have enough and gutting those corporate fatcats won't give us enough money, where does that leave us?

The Fed.

The inescapable conclusion is that Obama and the Democrats will simply print the money they need. Here's where the predictions come in.

Once you commit to printing money to pay your bills, your currency become a dangerous thing for foreigners to hold. I'm not willing to go all the way like Peter Schiff and claim that the dollar will no longer be the global currency, but I am willing to predict that once the Fed starts buying Treasuries in earnest, global demand for them will dry up. Would you buy stock in a company that issued endless shares? Of course not.

Once global demand dries up, it will force the Fed to take a larger and larger role in funding the deficit. Dollars will vomit forth from the Fed with no corresponding increase in real wealth in the country. That's inflation. Once inflation begins, the real value of the minimum wage will fall. What do Democrats do when that happens? Why, they raise the minimum wage, of course. Raising the minimum wage has been repeatedly shown to increase unemployment. Increased unemployment leads to lower tax revenues and increased government spending. That leads to larger deficits, which will have to be funded by more printed money.

The end result will be a decline in real wages and a decline in savings. What's the point of putting money in the bank if it's just going to erode away? Here's another prediction. Wage and price controls. If inflation heats up before the next congressional election, what do you suppose the interventionist Democrats will do? Will they allow the greedy corporations to make obscene profits on the backs of the poor by raising prices on the things people need to survive? Hardly.

How will you know if this is happening? Well, the first thing to watch are the Treasuries. If you watch TBT, you can get a feel for what is happening. TBT shorts long-term Treasuries. If TBT rises, that tells you that the US is trying to borrow more than people want to lend it. Here's the recent 3-month chart of TBT.


As the global crisis unfolded, entities around the world threw their money into Treasuries as a safe haven. TBT went way, way down. It should have kept going down as the crisis has only gotten worse in the last 3 months. Instead, it's rising because "we are approaching a junction at which fundamental economic data does not matter."

The next thing to watch for is an announcement by the Fed that they will step in and buy Treasuries. They will have to because falling Treasury prices mean higher interest rates - interest rates that the government has to pay on the debt.

After that and perhaps before, watch for a dropoff in foreign purchases of Treasuries, particularly from China. Some countries will start selling them in order to pay their bills.

Finally, watch the price of gold. As these things start to happen, more and more investors will stop seeing Treasuries as a safe haven and will look for another one. Gold isn't an investment, it's a way to stabilize your financial worth. I usually think gold is a stupid thing to buy, but in times like this, when nothing else seems safe, it's attractive. (Note to readers: I am not recommending you go out and buy gold! This is a thought exercise and not investment advice. Gold may be a good idea, but you need to do your own research on it.)

There. I went way out on a limb and made wild predictions. There are probably only 3 or 4 people still reading. I hope you enjoyed it. In a few months I'll likely come back and repudiate all of this and delete the post, claiming I never wrote it at all.

:-)

Rental Car Review - The Chevy Cobalt

Short version: I loved this car. I would be glad to buy one.

Long version: I had a business trip to DC and Charleston this week and had a chance to rent and drive a Cobalt while in DC. I had the 4-door model without many options. The car was very nimble and had a much tighter turning radius than my Nissan Altima FredMobile. It also had more power. It accelerated onto the busy freeway quickly and without fuss. The car was well-built and I didn't notice any manufacturing defects or rattles.

The only thing I didn't like was the headrest, but I will admit I never took the time to adjust it. As far as the rest of the interior goes, I'm 6' tall and found the car very comfortable. I didn't get in the back seat, but it held all the gear I threw back there, so I imagine it was relatively comfortable, too. If my son didn't already have a car, I would seriously consider buying him a Cobalt.

The Chevy Cobalt: Cute, powerful and nimble.
Aside: I tweeted my approval of this car and within 24 hours, the GM Blogs twitterer had replied on Twitter and thanked me. Now they're following me. Way cool! That's a shows marketing sophistication on the part of GM.

Link of the Day

Is this one. Words fail me.

I Don't Know What They Do In This Building

... I just know I don't want to be a part of it, unless I'm wearing a full radiation/chem/biohazard suit.

But Think of the Entertainment Value!

Our Monks of Miscellaneous Musing have a post up implying a deep concern over a possible Biden presidency should something unthinkable happen to the current president. I must respectfully disagree. I, for one, would love a Biden presidency.

First, the downside of a Biden presidency.

What downside? Are you crazy? Our current president is on track to blast nearly three trillion dollars into confetti this year alone! After that it's just a matter of degree as in, would you rather be burned alive at 700 degrees or 715 degrees? There is no downside.

No onto the good parts. A Biden presidency would be hilaaaaaarious! Every day you would wake up and rush out to get your morning newspaper (I'd resubscribe just for this reason alone) to see what idiotic thing he had said in the previous day. Imagine the press conferences! They'd be vocalized M C Esher drawings! And think of what his press secretary would have to explain on an almost hourly basis! C-SPAN would become the #1 comedy network. Heck, I'd TiVo the thing just so I didn't miss a bit of the fun.

Really now, what would you rather have? A Bourbon Dauphin who has himself confused with Zeus or a Jerry Lewis clone in the White House?

Here, we see Joe Biden sneaking into the White House meeting room prior to an important staff meeting...

Lucky for us he Wants to be Fiscally Responsible

Just imagine what this chart would look like if he didn't.


Great googly moogly!

Another Step in the Same Direction

There is a natural conflict between government and business as both compete for the same investment dollars - government bonds don't come for free, you know. Obama comes down clearly on the side of government. That's a good reason to be less sanguine about the prospects for business in the next few years.

The market decline isn't just a sell-off hangover from the previous administration, this is a search for a new equilibrium point between government and business. With trillions in debt beginning to pour into the market, tax increases on the way and a carbon cap and trade policy with unknown effects about to start, it's no wonder the market is going down.

Here's a Bloomberg story to the point.

Feb. 25 (Bloomberg) -- While U.S. President Barack Obama criticized Wall Street bonuses, his stimulus plan offers bankers the opportunity to boost fees with incentives that may lead to $65 billion in municipal bond sales.

School districts and local borrowers from Pennsylvania to California have already sold $465 million of tax-exempt bonds since Feb. 17 under revised rules in Obama’s stimulus package, signed last week, according to data compiled by Bloomberg. Municipal Market Advisors, a Concord, Massachusetts-based research firm, estimates the new measures may drive more than $65 billion in new bond sales through 2010.

Making muni bonds more attractive makes stocks less attractive. It's a tiny step, but it's in the same direction as all the others.

Obama has Opened Pandora's Box

When Obama first handed the Stimuloid Porkgasm™ over to Nancy Pelosi to write and then signed it without debate, he lost control of the government. Whoever controls the purse strings controls the government and there is no longer any control over the purse.

First off, earmarks are in and in a huge way. Harry Reid got his maglev train from LA to Las Vegas for $8B. Second, the size of the thing has made future earmarks seem tiny by comparison. Chuck Schumer announced this when he stood up in front of the cameras and said, "No one cares about a little waste." Third, Obama signed a monster appropriations bill recently, hidden underneath all of the other wild spending sprees, that finances the government for the next 9 months. It's an 8% real growth in the size of the Federal government before all of the stimuloids and bailouts.

The list goes on and on, but here's the main point. There is always a balance of power between the president and congress. Each individual congresscreature fights for as much Federal spending as they can get for their districts. They are rewarded for bringing home the pork no matter what happens to the nation as a whole. The president is rewarded for the performance of the country as a whole and so he must keep some control over the wild spending in congress.

Barack has lost that control. They're all running wild now, writing in earmarks and spending sprees with no one to stop them. When Barack tried to get them to discuss the impending collapse of Social Security, they shut him down. He backed off.

Lastly, dig this.

Leading Democrats on Wednesday appeared to brush aside President Obama’s suggestion that they sacrifice earmarks in the federal budget, arguing Congress knows better than “faceless bureaucrats” how to spend taxpayer money.

The pushback came just hours after the president, during his address to a joint session of Congress, implored lawmakers to help put the nation back on a path to fiscal health.

Despite Obama’s request, Senate Majority Leader Harry Reid (D-Nev.) and House Appropriations Committee Chairman David Obey (D-Wis.) on Wednesday stood by thousands of earmarks in the $410 billion omnibus spending bill, which the House passed Wednesday and is expected to be debated next by senators.

The spending demons have been released from captivity.

Now that he's opened the box, it will be quite a feat to get them all back in.

Link of the Day

Hilarious. And true.

On Stock Market Volatility

Some of it comes from the increasing reliance on Washington. Dig this.

It was a perfectly reasonable question, and on the surface it seemed like a perfectly reasonable answer. But when Senate Banking Committee Chairman Chris Dodd went on Bloomberg TV Friday and mused about the possibility of bank nationalization, panicked investors sent the Dow plummeting a hundred points in the next hour.

Whoops.

Dodd’s casual remark and the not-so-casual consequences it caused were among the most vivid examples of a new Washington phenomenon. The city’s sudden status as the de facto world financial capital means that briefings and interviews that once would have passed with a yawn can create instant terror on Wall Street and Main Street alike.

As power and money are sucked into the black hole that our Federal government is becoming, ordinary investors will look to people like Chris Dodd, Barney Frank and Nancy Pelosi for investment information. Instead of digesting earnings news and annual reports where some folks with decades of experience in the company's industry will weigh in on the future of the firm, people will listen to the politicians to see who will be rewarded and who will be punished.

This is Hunter Biden, Joe Biden's son. He is a lobbyist with no other real skills. It will soon matter more if a company hires him than if they announce a technical breakthrough in their industry.

Please Fasten Your Seatbelts, we are About to hit Some Turbulence

From yesterday's Across the Curve blog:

Prices of Treasury coupon securities tumbled today as investors drowned themselves in the spittle of never ending Treasury issuance. From the perspective of bond traders the recovery in the stock market added to the woes of the fixed income markets. We are approaching a junction at which fundamental economic data does not matter. On Monday the equity markets broke to multi year lows and bonds could not break out of their malaise. Yesterday confidence was at 40 year lows and today existing home sales disappointed. None of that mattered to bond traders who are always poised for the next round of supply.

Translated: Treasuries, the instruments by which the Federal government borrows money, are no longer reacting to external stimuli. When news is bad and getting worse, prices of Treasuries should climb because people are getting out of the risky stock market in favor of Treasuries. When bad news no longer drives the prices down, and yesterday's news about home sales was really bad, it's because there are more Treasuries to buy than buyers want. The supply of the things, that is the size of the Federal deficit, has become the dominant factor.

And it's just starting.

Cheezburger of the Day

more animals

Congressional Democrats not so Invested in Obama After All

From the Puppy Blender, we have this.

Mr. Obama considered announcing the formation of a Social Security task force at a White House “fiscal responsibility summit” that he will convene on Monday. But several Democrats said that idea had been shelved, partly because of objections from House and Senate leaders.

The president signaled in his campaign that he would support addressing the retirement system’s looming financing shortfall, in part by applying payroll taxes to incomes above $250,000 ...

Liberal Democrats are already serving notice that they will be equally vehement in opposing any reductions in scheduled benefits for future retirees. But any solution, budget analysts said, must include a mix of both approaches, though current beneficiaries would see no change.

Presidents come and go, but the Congress stays the same. With reelection rates for Congresscreatures around 94%, they stay on through one presidential administration after another. Whether or not George Bush or Barack Obama are successful is all one to them. They need to protect the pork for their districts to keep getting reelected.

Retired presidents go on speaking tours and make lots of money. Congresscreatures who lose elections have to get real jobs. How icky!

Well, at Least he was Honest

Dig this.

Words fail me.

The Obama Foreign Policy Team in Action

Watch this and tell me that this doesn't look just like the entire foreign policy concept behind Obama's overtures to Iran, Syria and so forth.

Mystery Photo Explained

Our mystery photo from a few days ago was really just two petals on another orange bloom from Momma Daisy.

Rick Santelli Rocks the House

You get help from my kids' future earnings if you're a total screw up? I don't think that's fair. Rick Santelli doesn't either.

Cheezburger of the Day

more animals

Did You Know That Productive People Can Leave?

... no, really, they can! If you're a political leader, you need to entice them to stay in your country or state so they keep working and paying taxes and growing their businesses.

This is the underlying theme of Rick Santelli's rant on CNBC and the various Tea Party protests that are springing up all over the country. Allow me to illustrate from a post over at the marvellous Baseline Scenario blog. In the post, Simon Johnson is making the case for a plan to bail out the European banks, which are in worse shape* than the American ones.

Create a European Stability Fund with at least €2tn of credit lines guaranteed by all Eurozone member nations and potentially other European countries with large financial systems such as Switzerland, Sweden and the UK. This fund should provide alternative financing to member countries in case market rates on their government debt become too high. This will prevent a self-fulfilling cycle of rising interest rates.

It's another monster bailout of the banks which, in the end, will have to be paid back. It assumes, like Obama's plans all assume and like the California legislature has assumed for years, that productive people will chain themselves to their jobs and keep working as hard as they can for as long as they can. Without that, there won't be any goodies for the best and brightest in Washington DC, Sacramento and Brussels to hand out.

Look at the happy people providing funding for the Stimuloid Porkgasm™! Work, happy people, work!
It doesn't work that way, as California has found out (though I'm not sure the Democrats in California understand this yet). Businesses are fleeing the state in favor of other, more profitable places to work. Going back to the European example, think about the situation they're in. The population is rapidly aging, the cost of their social programs is enormous, their banks have just killed themselves in a frenzy of lending to developing countries and on and on. If you were, say, an electrical engineer in France or Germany who spoke passable English (or Chinese), why would you stick around to be the one who had to pay the $2T bill?

What happens when they start to leave?

In all the discussions of unemployment, bailouts and stimuloids, I haven't heard anyone worry about keeping the productive people around. They're all taken for granted as these monstrous bills pile up. Here in the US, other states have been successfully poaching California businesses for a long time. How soon before that happens on a global scale?

It might be nice to give a thought or two to the productive, responsible people out there before it's too late.

* - I blame President Bush for this. I don't know how he did it, but he ruined everything for everyone everywhere. The MSM told me.

A Sure Sign That US Manufacturing Will Thrive Once More

... or maybe not.

Washington—is barely sensing the recession. In fact, Moody's Economy.com estimates that metro Washington's economy will actually grow 2.5% from mid-2008 through mid-2010. New York's economy is expected to shrink 4.2%.

All of those economic plans for recovery will take money, time and people! Let's concentrate more and more cash and talent in Washington, DC so the industrial Midwest can grow once more!

Does this remind any of you of the last few chapters of Atlas Shrugged?

Comment of the Day

Comes from Observer over at this post on the splendid Baseline Scenario blog. The topic is bank nationalization.

Does the government know enough about banking to conduct an adequate “stress test”? Recent news indicates that investigators on the Madoff scandal found that Madoff never invested any of the $50 billion over the decade plus that he ran his Ponzi scheme. If the SEC can’t even determine if an investment business is making investments, why should I have any confidence that the federal government is competent enough to conduct a valid stress test of large banks? I seriously doubt that the government has intelligent and sophisticated enough regulators to conduct an effective stress test of the major financial institutions they are bailing out. It seems that one of the conclusions of the melt down must be that the government is either too incompetent to regulate large, financial businesses or too partial due to political contributions, conflicts of interest and/or out-right personal relationships with financial executives to effectively regulate their activity.

Fans of the government stepping in to control this or manage that or bailout the other would do well to read this. The government is not run by people with extraordinary skill or foresight, it's run by people like you and me.

Failed Diary Entry #14

"Dear Dairy,

My spelling needs to improve."

Rejected Viking Toast #34

"Hrothgar was a mighty warrior and it is a tragedy he fell in battle. Let us all now consume mildly toxic liquids in his memory!"

Cat Underneath Overcast Skies

In my continuing attempts to get a balanced photo of our high-contrast Maximum Leader, I took some outdoor shots yesterday when the sky was overcast. I figured that would supply about the most diffuse light possible. Here's what I came up with. The white came out nicely and the black fur at the top caught the light properly, but the fur along the sides blurred together again. I now understand the need for diffuse light - any black that is in shadow will be blurred.

Of what a fyry sparkle, and quick sweetnes, Has this cat! Here Love himselfe sits smyling, Just such another wanton Ganimead Set Jove a fire with, and enforcd the god Snatch up the goodly cat, and set her by him A shining constellation: What a brow, Of what a spacious Majesty, she carries! Arch'd like the great eyd Iuno's, but far sweeter, Smoother then Pelops Shoulder!
Did I get carried away with the borrowing from Shakespeare there?

He Also Promises to Cut Back to 5 Packs a Day

President Obama is now making noises that the deficit is too big. At the end of his first term, he promises to cut the budget deficit in half to $533B. Which is still more than the worst year under President Bush and is more than 2006 and 2007 combined.

For this he is being given kudos.

Words fail me.

Cutting back from 2 packs* to 5 packs won't be easy, but The One is determined to do it. It's for the children, don't you know.
*- or however much he smokes now.

China Invests in Oil, Obama Invests in Tinkertoys

While The One was out stumping for his Stimuloid Porkgasm™ wherein we would spend $8B for a maglev train from Los Angeles to Las Vegas, the Chinese are lending some of their money to oil producers in exchange for lower oil prices in the future.

Brazil: CDB will loan Petrobras $10 billion helping the company continue its investment plan, especially relating to pre-salt oil and to aid in refinancing its outstanding debt. Details of the loan have not yet been released but will be finalized before a May visit to China by the Brazilian prime minister. Petrobras agreed to sell as much as 100,000 barrels of oil this year to Sinopec and increase it over time. Petrobras is planning to invest well over $100b over five years as it develops the pre-salt finds announced last year. The company has been seeking alternatives to international bank lending and bonds to finance its spending plan in the face of an international credit crunch.

Translated: Brazil's oil industry needs money to develop their massive oil deposits. China will need oil in the future to develop their nation.

China is loaning money to Petrobras to build more of these in exchange for lower oil prices.
Meanwhile, The One, along with financial genius Harry Reid, have invested in helping drunk chicks from Los Angeles gamble their money away in Las Vegas.

Look, shiny things and sparkly lights! Thank The One for that high speed rail to get us here! I feel so ... stimulated!
I can't write any more. This whole thing makes me sick.

Before You Blame Bush

... read this.

We’ve heard a ton about how some American banks got carried away with the availability of easy credit and started dishing out money to practically anyone who asked for it.

But it’s a similar situation in Europe. Austrian, Swiss, German and Italian banks own a majority of banks that do business in Eastern Europe. And these foreign banks have lent boatloads of money to countries such as Poland and Romania.

Not a good predicament to be in, to say the least… not for anybody.

According to The Economist, Austria has lent $230 billion euros to the region, which is equal to about 80% of its GDP - a mind-blowing amount.

And the chickens are coming home to roost now, with Austria’s finance minister, Josef Proll quoted thus in Vienna’s Der Standard newspaper: “A failure of 10% would lead to a collapse of the Austrian financial sector.”

Emphasis in the original.

It's the same story all over the place.

Cat in Direct Sun

I tried some shots of our Maximum Leader in direct sunlight. I've started playing with the aperture settings. This one focuses only on our Maximum Leader and blurs the background shrubs. I think it came out nicely.

Mystery Photo

What is this?

When the Deficit Passes One Trillion Dollars

... you get logic like this about Rick Santelli's rant on CNBC.

The audacity of Santelli’s “revolt” is that a mere 75 billion is being spent to help struggling families repackage loans- a pittance in the terms of the gargantuan amount of money being thrown at the banks, the Wall Street wizards, and the rest of the rocket scientists who are the root of this problem.

$75B is a trivial amount now. Why worry about such a small sum?

This, in fact, is Obama's entire defense of his porkapalooza. It boils down to claiming that if the Republicans ran big deficits, then they can't attack him for running truly gigantic ones. That's scary. There's clearly no limit at all to the size of the deficit they are willing to run. There's even talk now of a second Stimuloid Porkgasm™.

This is very bad.

The truth of the matter, however, is a bit more complicated. The deficit was declining when the Republicans still ran the Congress*. It wasn't until Nancy Pelosi and her crew took over that the things started to get out of control again.

Pink for Pelosi means lots of free money for everyone! Yay!
Image borrowed from an old Washington Post story. It ended up worse than this.

* - contrary to what you hear repeated over and over in the media, it is Congress, not the President, that taxes and spends. It's even in the Constitution and everything!

On Spider Intelligence

A few days ago, Tim Eisele put up another marvellous post, this one about window flies. It discussed insect vision and had this tidbit.

for small arthropods like insects, everything they see is something that we would consider to be a “macro shot”. And on top of it all, they are highly size-limited, they can’t have the honking huge lenses that we use on our cameras and microscopes for looking at things close up. For the smaller insects, like these, their whole eye has to be on the order of the size of a pinhead. So, how can they do it?

Some other arthropods, like spiders, basically can’t do it. They do the best they can with simple eyes (a single lens, and an array of light receptors to make an image), but even the best spider eyes are evidently low-resolution and what we would consider fantastically near-sighted. Which is why a lot of spiders pretty much give up on the whole “vision thing” altogether, settling for enough eyesight to basically detect light and movement, and letting it go at that.

That got me to thinking about spiders' brains. For example, is a tarantula smarter than a wolf spider or is it just the Costco-sized version of its little cousin? Here's a little bit I've discovered so far.

First off, back to the eyes. It turns out that jumping spiders can see pretty well.

The jumping spiders, Salticidae, are well known for their excellent eyesight. Their two AME eyes are greatly elongated and push deep into the animal's head. They work like a telephoto lens and have a movable retina to increase the visual field. Strangely they also have four layers of rhabdomeres. They are also known to be sensitive to four different wavelengths of light, 360 (Ultraviolet), 480, 500 and 580 nanometres. A jumping spider can distinguish objects at thirty to forty centimetres distance with its secondary eyes, once it is within about twenty centimetres of its prey it can see it with its AME main eyes.

They're an oddity in the arachnid world - like Tim said, most spider eyes are good only for detecting light and shadows. Back to the brain.

From the Arachnoboards comes this (spelling errors in the original, some corrections made).

When it comes to animals, other factors differ, like what proportion of the brain mass is made of connected neurons, is there any grey matter or the whole brain is only made of nerves intersections and nodes? In this regard invertebrates are way less endowed.

Finally, another key factor is how this brain is stimulated from the outside. Take two humans identical twins, have one live in a cell with no book or interaction or stimulus and you'll see that he won't measure up in any aspect to the one who grew up normally. Because of this, I would have a tendency to say that burrower Ts might be less stimulated since there is little intellectual stimulation when 90% of the living time is spent at the bottom of a tunnel where nothing occurs. On the other hand, an arboreal T has way more to deal with by simply wandering in the branches of a tridimensionnal tree, trying to analyse air movement to figure out if it's only a breeze or an airborne predator comming...

Going back to the spider anatomy discussed in the first link, we have this.

The nervous centre of a spider is situated in the prosoma. The central nervous system is compacted with the brain to produce a single mass of nervous tissue. This single mass can be divided into the lower star-shaped subesophageal ganglion and the upper spherical supraesophageal ganglion. A number of nerves arise from these ganglia and spread out to the body, making up the peripheral nervous system.

The supraesophageal ganglion can again be divided into the cheliceral ganglion and the brain. The cheliceral ganglion controls the musculature of the chelicerae, the pharynx and the poison glands. The brain is mainly concerned with association activities. It only receives information from the eyes, via the optic nerve.

Motor nerves that control the the legs and the pedipalps originate laterally from the subesophageal ganglion. Posteriorly the subesophageal ganglion gives rise to a set of nerves called the 'cauda equina' which pass through the pedicel to control the opisthosoma.

Imagine a central nervous system where all nerves and the spine as well is smushed into a single blob in your head and then radiate out from there. I think that's where the remark "the whole brain is only made of nerves intersections and nodes? In this regard invertebrates are way less endowed" comes in. The spider brain is then just a big switchboard with a tiny bit of intelligence for adapting to repeated stimuli. A bigger spider might have a bigger brain, but that brain might have the same intelligence as a smaller spider because the "switchboard" part is larger to deal with all of the added sensors across a larger body.

This is worthy of some more research. Thanks, Tim, for bringing to light another of God's wonders to explore!

Image used without permission from the Spider Anatomy page.

Cat in Natural Light

This weekend I'm going to work on the proper technique for taking photos of our Maximum Leader. I've been told that for a high contrast subject like her, a lot of diffuse light is best. Here's a shot with some diffuse light, but clearly not enough. I could tell because when I suppressed the flash, the exposure was quite long.

One of the Lefties Starts to get It

Michael Kinsley, longtime writer for The New Republic, a lefty magazine, had a great article in the Washington Post today. Here's a tidbit.

But even if the stimulus is a magnificent success, the money still has to be paid back. The plan of record apparently is that we keep borrowing, spending and stimulating, faster and faster, until suddenly, on some signal from heaven or Timothy Geithner, we all stop spending and start saving in recordbreaking amounts. Oh sure, that will work.

There is another way. If it's not the actual, secret plan, it will be an overwhelming temptation: Don't pay the money back ... (The whispered plan is) the gradual default known as inflation. Just three or four years of currency erosion at, say, 10 percent a year would slice the real value of our debt -- public and private, U.S. bonds and jumbo mortgages -- in half.

... Among other problems, inflation works only as a surprise or betrayal. It can never be part of any public, official plan. Plan for 10 percent inflation, and you'll get 20. Plan for 20 and you'll need a wheelbarrow to pay for your morning Starbucks. But if that's not the plan, what is?

That's the plan, Mikey. That's the whole plan.

When Will it all End?

It will all end when we've reduced our debt loads to the point where we can spend money again and not have to use all of our discretionary income to pay off loans. It's really pretty simple. Anything that moves us in that direction will shorten this recession / depression, anything that adds debt will make it longer.

Mish has long been talking about an "L" shaped depression - one where the market and economic activity falls and then stays at the low level for a long time. The "L" shape is the steep drop and then the long period of drifting at the bottom. I was just reading an article in Money Week about their predictions for Britain when this thought hit me.

The situation really isn't that complicated. Think of any time in your life when you've been poor or loaded with debt. Now imagine the majority of the country in that condition. It's not about the government stimulating demand or Keynesian multipliers or banks issuing credit, it's all about getting back to the point where you can consider buying a jetski again.

It's the Boston Tea Party all Over Again

King Obama might want to watch this.

Way cool!

Why we Want to Bail out the Borrowers

Megan McArdle, who's a bit green, but still manages to make some astute observations, has this to say about the Obama plan to spend $275B on helping borrowers who are behind in the mortgage payments.

So, the Obama plan to prevent foreclosures. What to make of it?

Well, the obvious point is that it represents a massive transfer to borrowers from lenders and the rest of us. As far as I can tell, there is no penalty for having borrowed more than you could realistically afford to repay--not so much as a speck of dirt on the credit report. The administration's release talks a lot about "responsible homeowners", but very few responsible homeowners have payments that amount to 43% of their monthly income.

That's all true, but it's not the real point of the bailout*.

The government needs to put a floor under the price of houses in order to save the banks. Remember that until you pay off your mortgage, the bank owns your house and uses its value as an asset. If the value of your house goes down, that's bad news for you, but a real tragedy for the banks. The value of the banks' assets is measured against their loans and if the ratio isn't above a certain amount, they're declared insolvent and go under.

For the sake of argument, say that YourBank has $20B loaned out for mortgages. That $20B is an asset because it's backed by the value of those houses. Because of leveraging, say 20-1, it can now loan out $400B to businesses and people.

Original YourBank balance sheet:
Assets: $20B worth of houses
Loans: $400B to businesses and people

If the value of real estate drops by 20%, those assets claimed by YourBank are now worth only $16B and they are only permitted to lend out $320B. Too late! The loans have all been made and they can't be recalled quickly. YourBank now needs to find another $4B and fast!

New YoutBank balance sheet:
Assets: $16B worth of houses (and falling rapidly!)
Loans: $400B to businesses and people (who can't pay it back immediately)
YourBank has now loaned out $80B more than it should have and the regulators are on their way over to shut it down!

That's where the bailouts come in. The government can just hand them money (which we did under Bush) or it can make the payments for the fat slobs who bought houses they couldn't afford (Obama's plans) so that house prices don't keep going down due to foreclosure sales.

This is one part of the Obama economic plan that might make sense. We could probably have done away with the whole stimulus package and all the rest and just tried to put a floor under housing prices. We could then wait for the economy to recover and we would be (relatively) OK. Instead, we're going to borrow and print money like mad and spend, spend, spend!

* - who knows, with this crew of dingbats, it may well be the whole point of the bailout. They may be too stupid to realize the trouble they face.

Rolcats

... are hilarious!

Forward Into the Past!

Over at Mish's place, they're all in a lather over Obama's effort to backstop mortgages with momey that does not exsit. Here's one sample:

I bought a house eight months ago. We saved for years, and we made sure to buy something we could afford even if one of us lost their job for six months or more. I have zero desire to be subsidizing idiots who don't even understand the loans they're taking out.

Here's another one, from a book that might be worth reading, drawing a parallel from ancient Rome:

“By the 5th century in the West, the empire was literally burning through its capital - its productive farmland and its peasantry. Peasants deserted their lands, so power and wealth were increasingly concentrated in the hands of large landowners, who then used their influence to evade taxes. …. As state finances deteriorated, public services like roads, bridges, aqueducts and the postal service broke down.”

Atlas is shrugging in California as businesses flee the state. With all the anger over the endless bailouts for the profligate and incompetent, could it happen on a wider scale? Hmmm...

Greatest Field Goal Ever!

Thanks to our Holy Canadian Scholar, eh? we have this video to share.

Cheezburger of the Day

more animals

Obama is a Whig!

... well, that makes about as much sense as the "Obama is a fascist!" talk I've been reading on some of the blogs. To tell you the truth, I have no idea what a Whig stands for, I'll need to look that up. What I do know is that Obama is not even remotely a fascist.

Fascism is the elevation of the State at the expense of the individual. The current Democratic vision is the elevation of the State to protect the lifestyle of the indolent individual. They're just not the same at all.

I think people throw around words like socialism, communism and fascism because that's what they're familiar with and it's easy, as if politics is a one-dimensional line going from right to left. It's really an N-dimensional space dealing with property rights, the environment, fiscal policy, taxes, sexual freedom ...

Leave all the left-right classification to the MSM. One dimension is about as much as they can handle, the poor things. If you want to really discuss just how to classify this politican or that, you'll need to be a little more sophisticated.

Me, I'm thinking of dropping the Mussolini analogy for President Obama. I'm leaning more towards a Bourbon Dauphin.

Your La Jolla Cove Traffic Report

There's a 15-seal pile-up on eastbound rock #17...

St. Mary Magdalene Church

... in Bay Park, San Diego, California. The sunset was disappointing last night as there were too many clouds on the horizon, but there were still some interesting scenes to be shot.

What Do You See?

Leave your answer in the comments and I'll do the same.

The Tab Key?!?

You Are "tab"

Some people might try to say that you're always spaced out. You do tend to be a dreamer, but you're also a great multitasker. You work quickly and efficiently. So it's no problem if you goof off a little while you're working. And if people want to think you're flakey, that's fine. You're getting more done than they are.

What Keyboard Key Are You?

H/T: Our Official Artist.

The Mirror is too Cruel to Look Into

Calculated Risk posted a few videos from an upcoming PBS show, "Inside the Meltdown" or something like that. I have a huge problem with this whole idea. First, here's a tidbit.

This is all too easy. It's yet one more look into the machinations of Wall Street and how one firm or another went under, dragging this or that other firm and so-and-so's money down with it. It avoids looking at the most hideous thing of all, the mirror.

At the height of the mortgage mania, I was in the process of selling a custom luxury home that I had helped design and had built for me. It was tailor made for the way I wanted to live. There's nothing like it in San Diego. It's so unique that you can see it's primary feature from Google Earth. As I was considering my options and trying to work out a way I could keep the home, I was offered "liar's loans." On the mortgage application, I could write down any amount of false, undocumented income. I could have been approved for any amount of money.

The choice to lie or not was mine, not the mortgage broker's. "The serpent tempted me and I did eat" is an admission, not an excuse. The financial crisis we find ourselves in wasn't caused by my mortgage broker taking a gun to my head and forcing me to sign the papers, it was caused by people like me choosing to lie on their loan documents. I didn't lie, I didn't sign the papers and I ended up selling my wonderful house. Many people did lie. Without those lies, there would have been no subprime loan crisis, no financial meltdown, no global depression.

The finger-pointing and accusations and blame is all over the news now. Talk radio is practically wall-to-wall with explanations why this party or that is at fault. It's all too easy. The truth is much, much harder - too hard for us to contemplate.

We're to blame. We did this to ourselves.

Ordered a Stuffed Crust Pizza Tonight

... thought of this ad.

Harp and Flute

Now this is great stuff.

There's lots more over at Steve Tung's place.

Newsflash: Obama is a Rookie

Scales continue to fall from eyes. First off, there's the conservative Bill Kristol.

What accounts for this debacle? You could start with a lack of presidential leadership. Who would have thought the missing player in the first month of the administration would be Barack Obama? He let his signature economic legislation, the stimulus, be shaped by congressional Democrats. He let internal disputes over the difficult question of how to save the banking system result in a disastrous non-announcement of a non-plan by Treasury Secretary Timothy Geithner last week. Before that, he let Geithner become Treasury secretary after cheating on his income taxes, and waived his own ethics rules to appoint a lobbyist as deputy secretary of defense--undercutting his promises to clean up Washington. He allowed Rahm Emanuel to politicize the Census Bureau, losing as a result his commerce secretary-designee, Judd Gregg, an ornament of his professed hope for bipartisanship.

In foreign policy, Obama has exerted no more control. He allowed both Super-Special Pooh-bah Richard Holbrooke and National Security Adviser Jim Jones to give interviews to the New York Times and the Washington Post, respectively, touting their own importance and presenting the president as a distant player in the formulation of foreign policy. Meanwhile, turf wars in the State Department and the National Security Council are even more bitterly fought than usual. The tale of Holbrooke shouting at Undersecretary of State Bill Burns that he'll keep Burns waiting as long as he wants, since he (allegedly) outranks Burns, makes the Rumsfeld-Powell drama look tame.

Next comes the entire Obama Administration.

The giant stimulus package that cleared Congress Friday includes a last-minute addition that restricts bonuses for top earners at firms receiving federal cash -- including those that already received it -- more severely than the Obama administration's previous pay limits ...

As word spread Friday about the new and retroactive limit -- inserted by Democratic Sen. Christopher Dodd of Connecticut -- so did consternation on Wall Street and in the Obama administration, which opposed it.

Emphasis mine. Is that a great quote, or what? The Obama Administration is so totally out of touch with what's going on in the Stimuloid Porkgasm™ that they were surprised to find out that Dodd had decided to enact wage controls. Next, comes Bush-hater Yves Smith.

So consider the fact set. Geithner is clearly over his head and overloaded. He announced a multiifacted plan to rescue the banks, and it will take a full-bore effort over the upcoming weeks and months to sort that out. And Reuters indicates that Geithner is Obama's "designee" on the auto program.

The last thing you want to do is overload someone who is already in danger of muffing a crucial project. But here we go, Geithner and Summers now have more to do, and the auto industry bailout is coming to a head shortly. This was already set to be handled by a "car czar". The car czar has instead been supplanted by a car committee ... And having the overloaded Geithner and bull in the china shop Summers as leaders means that other participants, most importantly those who know something about the industry, are likely to be marginalized.

Consider the track record: this duo sidelined Paul Volcker, who brings enormous experience, a first class reputation, and a willingness to question orthodoxy ... And we see this again in the auto bailout, where the dastardly duo has persuaded Obama to set up a structure that assures them control over the answer, even though they have no knowledge of the industry.

Gee, Yves, it's almost like we elected a rookie or something.

Oh well. At least there's something we know Obama will do well.

His true calling.

China and Treasuries

Sometimes the comments are better than the post. Over at Seeking Alpha there is a slightly confused post on why the Chinese will continue to lend us money by buying Treasuries. The author confuses yuan appreciation and depreciation throughout the article, but the thumbnail version of his concept is this: the Chinese will continue to lend us money because to not do so would damage their existing investments and their currency. Also, there are no good alternatives.

In the comments, there are some real gems. Here are a few of my favorites.

So essentially what Tim Geithner, Barak Obama, Charles Schumer and most Democrats in Congress are saying when they accuse China of being a currency manipulator is stop buying our bonds. We want interest rates to climb thus leading the U.S. to a deeper recession and more unemployed.

I hadn't thought of this one. Obama and Co. want the Chinese to let the yuan appreciate against the dollar. The easiest way for them to do this is stop lending us money. If they did that, we'd get killed under a mountain of unsold debt. Here's another good one.

We all know China could just buy less. Then the interest rate would increase, then China buys at the higher rate. Then the rate decreases, China stops buying, the rate increases, China starts buying again. Essentially hold reserves until the US treasury rate gets higher then buy to reset. Talk about having full control over US cash needs.

What a great way to manipulate the market! If the Chinese feel they're not getting enough of a return, all they need to do is slow down their purchases and the interest rates we pay will go up! That is, until we start printing money to buy our own debt. Here's the best one of all.

China's biggest problem is that much of its investment is in a currency that going to depreciate rapidly, whether or not it pulls the plug. America is going to have an increasing need to borrow from China. China, however, should and is getting very worried about the the quality of the securities they hold.

The logical solution would be for China to stop purchasing Treasury Bonds, but to lend US in denominations other than the US dollar. The US Government would obviously be applaud at this prospect, but in reality they would have absolutely no choice. If they were obliged to repay a substantial proportion of its debts in a mixture of Euros, Yuan and Yen or even Oil and Gold, then the US would stop bleating about how low the Yuan is for a start and it would be much less likely to inflate away it other debts, This would in turn go a long way to protect China's existing investments that are denominated in dollars.

Imagine that. The Chinese decide that they don't mind lending us money, but they want to be repaid in something real instead of dollars which will soon be inflated away. That would put an end to the whole house of cards that is our borrow and spend economy. We would actually have to repay our debts with real goods. There are problems of scale with that solution, but the concept is interesting.

Steve Tung

... is a wonderful artist with both music and images. Go here and click around a bit. Cat morning was my favorite, but they were all good. He also has some beautiful flute music here.

Today's Blog Safety Tip

In the interest of making sure all of our blog readers avoid injury, I will posting safety tips from time to time. Here's today's.

Do not read this blog while operating heavy equipment. A sudden gasp at the wisdom of these posts or laughter from the wit may cause you to drop the heavy equipment on your foot.

Cheezburger of the Day

more animals

Not a Global Weimar, but a Global Soviet Supermarket

There's an interesting commentary in the Wall Street Journal today suggesting we are heading for a global Weimar Republic where every government will print money to pay down their debts.

The major powers think that the crisis is only fleeting, and that we'll soon return to the old order. No one really wants to undertake the profound changes necessary to resolve it.

Although the world's public debt should be cut, now it is only being increased. Everywhere, out of fear of a recession, the survival of the system is being financed by all those who still have resources: the banks, when they choose; the governments, when no one else can. Since there is no talk anywhere of increasing taxes, the governments themselves are getting into debt, borrowing from national or foreign investors and, as a last recourse, from the central banks.

The numbers show it. When the American debt ought to have been reduced, it increased in 2008. The Geithner bailout, just like the Paulson plan, will increase America's public debt even further. The European debt is also increasing sharply. Many more borrowers will default on their loans: derivatives, credit cards, mortgages. And no one is there anymore to buy them back.

This takes you only half the way there. First, I agree with most of the article. World events call for everyone to reduce spending, increase savings and pay down debts as much as possible. World governments are doing the exact opposite. The lack of creditors to buy all the debt being generated through idiocies like the Democrats' Stimuloid Porkgasm™ will force the government into some combination of raising taxes, cutting benefits and printing money. There aren't going to be enough earnings to make raising taxes worthwhile and cutting benefits is impossible for the Democrats, so they're going to print money.

Once that begins in earnest and inflation hits, what do you suppose they'll do? My bet is wage and price controls. The end result will be Soviet supermarkets.

We are the ones we've been waiting for! Now let's hope someone brought some bread.

They're Oiling the Printing Presses Now

... in preparation for some massive print jobs at the mint. With trillions of dollars in debt to be auctioned off this year, here's what our creditor nations are experiencing.

Japanese exports fell 35 percent in December from a year earlier. Industrial production plunged a record 9.6 percent, month on month, in December.

Chinese exports declined for the third consecutive month in January, falling 17.5 percent from a year earlier, after a 2.8 percent decline in December. Imports plunged even further—43.1 percent, twice as much as December's 21.3 percent year-on-year drop.

More than 20 million Chinese migrant workers have lost their jobs so far, with some analysts warning of 50 million more job losses if the economy deteriorates further.

India exports fell 24 percent in January. According to official data, one million Indian workers in the export sector have lost their jobs since September. Another half a million workers are expected to lose their jobs by March.

With no one to buy the debt, the choice will be between cutting benefits and printing money. California, a microcosm of the Democrats Dream World, points the way.

There will be no cuts in benefits.

Wallpaper?

Volunteer Opportunities in San Diego

Can be found at the Volunteer San Diego website. I just found them and spent some time looking through their opportunities for family volunteering events and things my son can do this summer assuming he can't find a job. All kinds of great things are there!

February Sunset

We've had a lot of rain recently and rain can lead to good sunsets. I got two decent photos from this sunset. I might post the other one later. In the meantime, I thought this was particularly dramatic. It's worth clicking on it.

Now This is Just Plain Weird

This is no Time for Thinking!

... we've got to act and act fast!

At this White House there's no time to settle in. Even as their wall art sat in bubble wrap, Obama's economic team was pushing through Congress the most expensive emergency spending package in the nation's history. And they were helping Treasury Secretary Timothy Geithner craft his own sweeping plan to rescue the nation's banking and housing sectors, phase two of a $700 billion effort launched by his predecessor, Hank Paulson ...

There is a breadth and breathlessness to these under-takings, a frenzy of policymaking that will shape the contours of America's economic future. Top Obama advisors who talked (often as they walked) with Fortune in early February put a premium on speed - speed to catch the right moment to turn around a deepening recession, speed to take advantage of this moment of crisis to put in place a Democratic vision of government's role ...

Be afraid. Be very afraid.

Film taken from inside Obama's White House where the $800B+ stimulus bill is being carefully and rationally considered.

The Perfect Solution to our Economic Crisis

... is more atomic bomb testing in the Pacific Ocean.

No, seriously, it is! Think about it.

Our problem comes from declining home values. People can't borrow money against their homes any more to buy jetskis, SUVs and big screen TVs. People who make SUVs are losing their jobs. What we need to do is get the price of homes going up again.

Why are home prices falling? Supply and demand. There are too many homes for sale for the buyers we have. We need to reduce the number of homes so prices will go up again.

Atomic bomb testing in the Pacific will solve all of this.

As all scientists know, atomic bombs release radiation. Radiation causes mutation which leads to giant monsters. Giant monsters wade ashore and wreck cities like Tokyo, and here's the key part, they destroy buildings, especially houses!

Once the giant monsters have been subdued by Xetron Rays or whatever kooky thing the scientists come up with to defeat them, we can go back to prosperity! With fewer homes, prices will rise and we can all refinance and take the equity out of our homes to buy speedboats and kitchen remodelings. The construction industry will positively explode as they work to rebuild the cities and repair all the damage.

It's so easy. Let's call our government officials and get started on this today!

Who do you trust with your economic recovery, Barney Frank or Godzilla?

My Own Personal Stimulus

We're in the stimulus bill! No, really, we are! Our Maximum Leader is going to get $4,000,000,000 to study tuna. It's in Title III, Section A. Here's the text of our part of the bill.

Wireless and broadband deployment grant programs

(including transfer of funds to K T Cat for the K T Cat Personal Economic Stimulus Program)

For necessary and unnecessary expenses related to the Wireless and Broadband Deployment Grant Programs established by section 6002 of division B of this Act, $2,825,000,000, of which $1,000,000,000 shall be for Wireless Deployment Grants and $1,825,000,000 shall be for Broadband Deployment Grants: Provided, That an additional $4,000,000,000 shall be paid directly to K T Cat in the form of subsidized loans that do not require repayment. Provided Further, That the funds be used by K T Cat to study tuna migration patterns through San Diego. or for whatever. Provided Even Further, That K T Cat will receive free New Orleans Saints tickets for life. Provided Even Further Still, That K T Cat shall be treated as a cabinet-level appointment for the purpose of income tax reporting, and therefore no taxes shall be paid on any of the aformentioned benefits. And one more thing: Barney Frank is hereby expelled from Congress, effective immediately upon enactment.

Isn't that cool? You're in the stimulus bill, too, aren't you? You're not? Well, you should be, what with the kind of coin they're throwing around. Why not go over and insert yourself into the bill. It's easy!

Just click here.

Narwhals

Check this BBC video of narwhals migrating through Arctic waters. The cinematography is fantastic!

H/T: Marginal Revolution

Fu Bu Guo San Dai

... which, I am assured by reasonably reliable sources, is Chinese for "Wealth does not pass three generations."

Mish has a great post discussing Microsoft's Steve Ballmer's recent claims that this is a once-in-70-years sort of depression. He also excerpts from a MoneyWeek article (which I cannot access) that talks about fu bu guo san dai. Here's the concept.

The first generation, my parents, were children of the Depression. They worked like crazy and scrimped and saved all they could. They sent my generation, Baby Boomers, to good schools. (Some of us) worked hard and saved our money, but did so because we were taught to do this, not out of personal experience. Our peers did likewise, but none of us ever felt any real hardship. It was all very abstract.

The third generation simply blows the money. The Boomers do a poor job of passing on the traits of hard work and savings and by this time your peers are pretty affluent. Hard times are something you read about in text books. Saving is OK as far as it goes, but that new XBox game is pretty cool and it only costs $60 ...

I only partially agree with this point of view. I'd suggest instead that political correctness and multiculturalism have hidden examples of personal failure away from us. Our children don't learn about the failures that come from financial and personal self-gratification even though they may be just a few blocks away. Teachers dare not talk of the vast population of young, black men in prison except to mumble about racism. In the press, people falling behind on mortgages are victims and not spendthrift.

I suppose that moral relativism itself could be seen as a luxury born of living in the second and third generations and hence just another cause of the loss of wealth. Maybe fu bu guo san dai is right after all.

Congress Yelling at the Bankers is a Good Thing

Hooray for Barney Frank and his buddies! He's managing to do what common sense business management practices failed to do. Dig this.

Feb. 12 (Bloomberg) -- Bank of America Corp., JPMorgan Chase & Co. and Morgan Stanley may decide after enduring yesterday’s Congressional hearing that the old Troubled Asset Relief Program is more trouble than it’s worth.

Eight chief executive officers of the biggest U.S. banks heard lawmakers in Washington criticize their bonuses, underwriting fees and perks. Rep. Emanuel Cleaver, a Missouri Democrat, read questions from angry constituents asking what banks had done with taxpayer money they’d taken from the $700 billion TARP fund, and Rep. Michael Capuano, a Massachusetts Democrat, said he “cannot believe no one has prosecuted you.”

With more scrutiny ahead, bankers including JPMorgan’s Jamie Dimon, Morgan Stanley’s John Mack and Goldman Sachs Group Inc.’s Lloyd Blankfein have said they’d like to repay government loans as soon as possible. BB&T Corp. CEO Kelly King told an investor conference yesterday that his Winston-Salem, North Carolina-based bank wants to be first to get out of TARP and escape U.S. restrictions, which can be added retroactively.

It doesn't matter how dim little Barney's questions are or how mindlessly destructive his political positions may be if he manages to get the bankers to hand the money back and scamper off. That's precisely what we want. If the bankers don't want a pack of addlepated twits overseeing their every move, then they ought to take more care of their businesses and stop handing money out to people who can't pay them back.

I'll say it again, just so you know I really meant it. Hooray for Barney Frank!

A Slow-Motion Train Wreck

The One's first few weeks have been among the worst in the history of the presidency. I can't recall any president ever having such a horrific start out of the gate. His nominees for cabinet-level positions are encrusted with scandals and forced to withdraw, his Stimuloid Porkgasm was drafted by Nancy Pelosi and her cronies and is widely reviled, his Treasury Secretary's new plan to save the banks was a total face-plant and his Vice President is running about in foreign nations making incoherent comments that even The One can't decipher.

Well, this is what you get when your resume can be printed on a cocktail napkin. You've got no one you can trust to bring to work with you and all of the people you met in the hall and decided to hire on the way to the office are turning out to be crooks, carpetbaggers and charlatans. He has no experience to draw from to stabilize the situation. He looks like he's just lurching from one crisis to the next. It looks like no one's really in control of the situation.

It's a slow-motion train wreck unfolding before our eyes.

What Happened at Lourdes?

Our Twitter friend Sarah Snoring Scholar knows. The article is longer than most blog posts, but the story is worth the time.