1) I want to make sure I understand this: the city is closing 25 firehouses in working and middle class neighborhoods. We've cut thousands of jobs that provide assistance to the weakest and poorest among us. We're confronted with massive tax hikes just to close this year's shortfall. But HEY! Spend tens of millions of dollars to honor a billion-dollar corporation and its multimillionaire staff, who could post the money with just the bonuses earned in the World Series AND who has repeatedly stiffed us for even the pittance in taxes the city has asked them to pay? Hell, yes, we can do that!
2) Weird, man. Just fucking weird.
3) Perhaps one good thing to come out of yesterday shooting rampage at Fort Hood is that the mental health of military personnel is actually being talked about in the mainstream media.
4) Years too late, of course.
5) Keep in mind when the right wing idiots clamor about this that Obama's job losses have been at a far lower rate than Goerge W Bush's.
6) Because you know Obama still looks out for us.
7) When you lose one of your biggest financial supporters, you ought to think twice about being the Party of No. Of course, this is not all good news for healthcare reform.
8) I wonder if the French have a word for "entrepreneur"? This guy's picture should be in the dictionary next to it.
9) Yesterday was Guy Fawkes' Day. My suspicion is Michelle Bachmann thought that meant be MORE fascistic and tyrannical. And weren't they just all up in arms over the movie "V for Vendetta"?
10) Finally, apparently, the Beatles really ARE bigger than Jesus...
Friday, November 06, 2009
Thursday, November 05, 2009
Throwing Bad Money After Worse
You'd think investors would have learned a harsh lesson. Let's talk about that after the break:
Before I start talking about the "why", let me sum up what you just read because, in truth, my eyes glazed over the first four times I read it, and I'm supposed to be interested in this stuff for a living.
In short, there's a lot of free capital out there that is not being reinvested in companies, or infrastructure, but in speculative investments. The laws of supply and demand, while imperfect, do apply here: opportunities are created when there is more money available than can reasonably be invested/spent.
Those bonuses at Goldman Sachs, that could be lent to struggling shopkeepers or small manufacturers are only the top of the iceberg of available cash that is being used creatively to whip up yet another frenzy.
Why?
Fair question, and a simple answer: addiction.
Greed is a drug. It is like alcohol or heroin, only greed destroys more lives than either of those.
When you've spent the past thirty years receiving double digit percent returns on your invested capital (yes, we've been in an overheated market for that long, despite the occasional bump and drop), you're not going to suddenly accept money market rates of 1 or 1.5% on your money.
You're going to force higher returns. You're going to look for pockets where the worldwide recession has not hit yet, and cycle your money in and out quickly.
How do I know this is what is happening? Personal experience.
Over the past three weeks, I have seen no fewer than three investment funds offer investors refunds on their invested capital. They've called for too much and were unable to complete investments they believed they could close on at an appropriate return.
They were, in other words, outbid by people willing to accept a lower-but-still-healthy return.
How does that work? Here's a thought experiment.
I'm willing to accept a 5% return so I bid to invest one dollar, expecting to get back $1.05.
I do this knowing that I'm faring better than the bank, who would give me a $1.01.
Someone else realizes they'd be willing to accept a 4% return, and so offer to invest $1.01, to get back the same $1.05.
The investment would be foolish to accept less money to pay back more in interest. After all, they get to keep an extra penny themselves.
Greed.
Basically, this is one step up from a Ponzi scheme. And it signals that we are far from out of the woods in this economy.
I'm not sure what the answer is. Part of me would like to see stronger oversight of the markets, but that might stifle true innovation. After all, green energy ain't gonna be financed at the prime rate for the foreseeable future. Neither is stem cell research.
On the other hand, the anarchist in me would like to see the entire capitalist system go cold turkey on stupidity. But that would destroy us in the process, and that kind of violent change only begets more violence.
This is not going to be pretty.
Concerns are mounting that efforts by governments and central banks to stoke a recovery will create a nasty side effect: asset bubbles in real-estate, stock and currency markets, especially in Asia.
The World Bank warned Tuesday that the sudden reappearance of billions of dollars in investment capital in East Asia is "raising concerns about asset price bubbles" in equity markets across Asia and in real estate in China, Hong Kong, Singapore and Vietnam. Also Tuesday, the International Monetary Fund cited "a risk" that surging Hong Kong asset prices are being driven by a flood of capital "divorced from fundamental forces of supply and demand."
Behind the trend are measures such as cutting interest rates and pumping money into the financial system, which have left parts of the world awash in cash and at risk of bubbles, or run-ups in asset prices beyond what economic fundamentals suggest are reasonable.
Prices are surging across a host of markets. Gold, up about 44% this year, soared to a record high Tuesday. Copper is up about 50% in the past year. In the U.S., risky assets are rising rapidly in price: The risk spreads, or interest-rate premiums, on low-rated junk bonds have narrowed to about where they were in February 2008, before Bear Stearns and Lehman Brothers fell, according to Barclays Capital.
Before I start talking about the "why", let me sum up what you just read because, in truth, my eyes glazed over the first four times I read it, and I'm supposed to be interested in this stuff for a living.
In short, there's a lot of free capital out there that is not being reinvested in companies, or infrastructure, but in speculative investments. The laws of supply and demand, while imperfect, do apply here: opportunities are created when there is more money available than can reasonably be invested/spent.
Those bonuses at Goldman Sachs, that could be lent to struggling shopkeepers or small manufacturers are only the top of the iceberg of available cash that is being used creatively to whip up yet another frenzy.
Why?
Fair question, and a simple answer: addiction.
Greed is a drug. It is like alcohol or heroin, only greed destroys more lives than either of those.
When you've spent the past thirty years receiving double digit percent returns on your invested capital (yes, we've been in an overheated market for that long, despite the occasional bump and drop), you're not going to suddenly accept money market rates of 1 or 1.5% on your money.
You're going to force higher returns. You're going to look for pockets where the worldwide recession has not hit yet, and cycle your money in and out quickly.
How do I know this is what is happening? Personal experience.
Over the past three weeks, I have seen no fewer than three investment funds offer investors refunds on their invested capital. They've called for too much and were unable to complete investments they believed they could close on at an appropriate return.
They were, in other words, outbid by people willing to accept a lower-but-still-healthy return.
How does that work? Here's a thought experiment.
I'm willing to accept a 5% return so I bid to invest one dollar, expecting to get back $1.05.
I do this knowing that I'm faring better than the bank, who would give me a $1.01.
Someone else realizes they'd be willing to accept a 4% return, and so offer to invest $1.01, to get back the same $1.05.
The investment would be foolish to accept less money to pay back more in interest. After all, they get to keep an extra penny themselves.
Greed.
Basically, this is one step up from a Ponzi scheme. And it signals that we are far from out of the woods in this economy.
I'm not sure what the answer is. Part of me would like to see stronger oversight of the markets, but that might stifle true innovation. After all, green energy ain't gonna be financed at the prime rate for the foreseeable future. Neither is stem cell research.
On the other hand, the anarchist in me would like to see the entire capitalist system go cold turkey on stupidity. But that would destroy us in the process, and that kind of violent change only begets more violence.
This is not going to be pretty.
Wednesday, November 04, 2009
Not A Bad Day At All
What to make of the off-year elections that people were focusing on?
Well, on balance, while not a stellar performance, one has to believe Obama actually gained a little ground yesterday.
Huh? Wha?
You heard me. Here's why:
1) Governor of Virginia - Virginia went 53-46 for Obama last year. However, of the last five elected governors (including McDonnell now) three were Republicans, all elected with a Democrat in the White House. Add to that fact that Creigh Deeds was a nearly unknown state senator and ran a campaign so egregiously bad that even the White House wrote him off weeks before the election, a landslide was all but inevitable.
2) Governor of New Jersey - Chris Christie barely held onto a lead going into the voting booth, and many polls had this as a toss-up. Over the past thirty years, there have been six elected governors: three Republicans, three Democrats. To call New Jersey a Democratic stronghold at the state-wide level is ludicrous. Now, Obama did put in some energy into campaigning for Corzine, but the billionaire lost to the multimillionaire largely because of outside assistance from the right wing of the Republican party.
This was no slam dunk election that was Corzine's to lose, in other words. The entrance of Chris Dagget probably hurt Corzine more than Christie, altho his vote total probably would not have changed the outcome.
IN NEITHER OF THESE TWO ELECTIONS WAS OBAMA A FACTOR! Voters chose based almost strictly on local and statewide issues, not the national scene and in no way should either of these elections be considered as part of a larger "Republican Rescusitation"
3) The key race for Obama's fortunes, however, was NY State's 23rd. There, in a stunning reversal of Republican fortunes, Democrat Bill Owens stunned the right wing of America by kicking the ass of Neoconservative darling, Doug Hoffman.
Hoffman held a significant four point lead in polling over the weekend, so he lost seven points in support in the blink of an eye.
Hoffman was heavily touted by Sarah Palin, Tim Pawlenty, Rush Limbaugh and the rest of the Fucking Republican Loons. This has to strike terror into Sarah Palin's heart, because she so closely tied her Presidential fortunes to the outcome here. It makes her look like a loser who can't even get a Congressman elected in a heavily Republican, very conservative district that is filled with military types!
Pawlenty at least had the smarts to be a little on the QT when he endorsed Hoffman! But Palin?
Ooo-la-la! She shot her chances in the foot with this boo-boo! She pissed off the Republican leadership and still lost the fucking election!
Too bad, so sad, it's ours, Mooseburger...
Well, on balance, while not a stellar performance, one has to believe Obama actually gained a little ground yesterday.
Huh? Wha?
You heard me. Here's why:
1) Governor of Virginia - Virginia went 53-46 for Obama last year. However, of the last five elected governors (including McDonnell now) three were Republicans, all elected with a Democrat in the White House. Add to that fact that Creigh Deeds was a nearly unknown state senator and ran a campaign so egregiously bad that even the White House wrote him off weeks before the election, a landslide was all but inevitable.
2) Governor of New Jersey - Chris Christie barely held onto a lead going into the voting booth, and many polls had this as a toss-up. Over the past thirty years, there have been six elected governors: three Republicans, three Democrats. To call New Jersey a Democratic stronghold at the state-wide level is ludicrous. Now, Obama did put in some energy into campaigning for Corzine, but the billionaire lost to the multimillionaire largely because of outside assistance from the right wing of the Republican party.
This was no slam dunk election that was Corzine's to lose, in other words. The entrance of Chris Dagget probably hurt Corzine more than Christie, altho his vote total probably would not have changed the outcome.
IN NEITHER OF THESE TWO ELECTIONS WAS OBAMA A FACTOR! Voters chose based almost strictly on local and statewide issues, not the national scene and in no way should either of these elections be considered as part of a larger "Republican Rescusitation"
3) The key race for Obama's fortunes, however, was NY State's 23rd. There, in a stunning reversal of Republican fortunes, Democrat Bill Owens stunned the right wing of America by kicking the ass of Neoconservative darling, Doug Hoffman.
Hoffman held a significant four point lead in polling over the weekend, so he lost seven points in support in the blink of an eye.
Hoffman was heavily touted by Sarah Palin, Tim Pawlenty, Rush Limbaugh and the rest of the Fucking Republican Loons. This has to strike terror into Sarah Palin's heart, because she so closely tied her Presidential fortunes to the outcome here. It makes her look like a loser who can't even get a Congressman elected in a heavily Republican, very conservative district that is filled with military types!
Pawlenty at least had the smarts to be a little on the QT when he endorsed Hoffman! But Palin?
Ooo-la-la! She shot her chances in the foot with this boo-boo! She pissed off the Republican leadership and still lost the fucking election!
Too bad, so sad, it's ours, Mooseburger...
Tuesday, November 03, 2009
It's Always About The Money With Them
Nevermind that the long term costs of global warming are staggering. Nevermind that even the short term costs of global warming are staggeringly high.
No, it's all about the pennies we might save by doing nothing:
HOW MUCH HANDHOLDING DO THESE NIMRODS REQUIRE?
Reid, Pelosi, and Boxer ought to just run roughshod over the Republicans in Congress, just the way the Republicans ran roughshod over the Democrats under the Bush administration.
Eff em, if they can't take a joke. Elections have consequences, deficits don't matter (Cheney), and Go Fuck Yourself (Cheney redux).
Progress cannot come from cons, neo or otherwise. They aren't "pro", they're "con" for a reason.
Probably because the future is now, for them. Today matters more than tomorrow, except when it's a Democrat buying the drinks.
Then somehow yesterday matters more than today, but not as much as tomorrow, which matters less than today anyway.
Re-read that again. It made sense when I put on my Republican hat.
There's this weird dynamic in the Republican party that it seems one can never get a cogent answer on any issue they disagree with. It's one thing to be the loyal opposition, to oppose things on principle, to say that this is wrong because it specifically opposes a parameter that is generally believed to be good for the nation.
It's another thing to throw a five year old's tantrum and say "No! No! No!"
When I was in college, serving on the student council, I made arguably the stupidest speech of my entire life. I said, in effect, "this is wrong because I think it's wrong," with respect to a proposal offered up by the minority party.
Now, I'm a wise man, brilliant at times, but even as the words left my mouth, I realized how stupid it was for me to say that and not have a very specific objection. It made me look stupid, but worse, it made opposition to the proposal look stupid.
You can see where I'm going with this: to knee-jerk reactively say that even discussing solutions to global warming is wrong simply because they might cost us a few bucks makes any legitimate concerns about the solutions involved seem petty.
Say they'll be ineffective (be specific) and you might have my ear. Say they'll be inefficient, and you'll have my ear.
Tell me they'll cost too much, and I'll tune you out nearly as fast as I tune out climate change deniers.
Republicans have become Johnny One-Notes, and they're taking up the kazoo.
No, it's all about the pennies we might save by doing nothing:
WASHINGTON — Republicans boycotted the start of committee debate Tuesday on a bill to curb greenhouse gases, protesting that the bill's costs have not been fully examined. The action put a spotlight on the difficulties Democratic leaders face in moving climate legislation this year.
Republican Sen. George Voinovich of Ohio attended the session for 15 minutes to explain the GOP's argument for staying away. He insisted the tactic "is not a ruse" to block the bill, but concern that its widespread impact on the country has not been made clear.
But Sen. Barbara Boxer of California, the panel's chairman, argued the EPA already has provided "a full blown economic analysis" and that Majority Leader Harry Reid has promised further studies when the bill is merged with other legislation. She insisted "we're not rushing we are taking our time."
HOW MUCH HANDHOLDING DO THESE NIMRODS REQUIRE?
Reid, Pelosi, and Boxer ought to just run roughshod over the Republicans in Congress, just the way the Republicans ran roughshod over the Democrats under the Bush administration.
Eff em, if they can't take a joke. Elections have consequences, deficits don't matter (Cheney), and Go Fuck Yourself (Cheney redux).
Progress cannot come from cons, neo or otherwise. They aren't "pro", they're "con" for a reason.
Probably because the future is now, for them. Today matters more than tomorrow, except when it's a Democrat buying the drinks.
Then somehow yesterday matters more than today, but not as much as tomorrow, which matters less than today anyway.
Re-read that again. It made sense when I put on my Republican hat.
There's this weird dynamic in the Republican party that it seems one can never get a cogent answer on any issue they disagree with. It's one thing to be the loyal opposition, to oppose things on principle, to say that this is wrong because it specifically opposes a parameter that is generally believed to be good for the nation.
It's another thing to throw a five year old's tantrum and say "No! No! No!"
When I was in college, serving on the student council, I made arguably the stupidest speech of my entire life. I said, in effect, "this is wrong because I think it's wrong," with respect to a proposal offered up by the minority party.
Now, I'm a wise man, brilliant at times, but even as the words left my mouth, I realized how stupid it was for me to say that and not have a very specific objection. It made me look stupid, but worse, it made opposition to the proposal look stupid.
You can see where I'm going with this: to knee-jerk reactively say that even discussing solutions to global warming is wrong simply because they might cost us a few bucks makes any legitimate concerns about the solutions involved seem petty.
Say they'll be ineffective (be specific) and you might have my ear. Say they'll be inefficient, and you'll have my ear.
Tell me they'll cost too much, and I'll tune you out nearly as fast as I tune out climate change deniers.
Republicans have become Johnny One-Notes, and they're taking up the kazoo.
Monday, November 02, 2009
Roll The Dice
Tomorrow could conceivably be the biggest off-year election for the next decade, at least.
It is in this spirit that I believe Barack Obama needs to roll the dice or go all-in:
Having written off the incompetent campaign of Creigh Deeds in Virginia, Obama has put a lot of effort into Corzine's campaign in New Jersey.
The most recent non-partisan polls, like Quinnipiac College, show Corzine with a small lead, but within the margin of error. Obama has made two visits to the state in the past week, with another set for today.
While he's there, however, he might want to consider shoring up White House support in New York's 23rd District.
Yes, Joe Biden will appear there, and yes, that's a high profile appearance, but neither Governor's race will reflect as much on Obama's administration as a race to replace his Secretary of the Army, Republican John McHugh.
As I mentioned in the earlier post I linked to, McHugh's seat is a long-time moderate Republican stronghold, but there's been a twist: the Republican moderate has dropped out of the race...and thrown her support to the Democrat against a conservative insurgent candidate!
This is a situation that cries out for Obama's special attention and a last minute surprise appearance could make that endorsement of Scozzafava not only brilliant, but pave the way for her advancement in politics.
In other words, the New York State Republican party would owe Obama a favor, albeit a minor one, and one he might parlay into something useful to both himself and the nation at large.
Like, perhaps, passing a bill that allows NYS to be a testing ground for a public healthcare option. This would not be inconsistent with former Governor George Pataki's expansion of the Child Health Plus program to cover families, and would be a shot in the arm to retaining businesses in the state.
Win-win, as it were.
Imagine Joe Biden, standing there at the rally in Watertown. Thousands of curious upstaters come out, cheering, and suddenly Joe Biden announces Barack Obama.
Talk about a breaking news story! Talk about a game-changing appearance!
It could happen. It should happen. I hope it does.
UPDATE Looks like I'm in some good company about getting on the President's back.
It is in this spirit that I believe Barack Obama needs to roll the dice or go all-in:
Democrats and Republicans in three states entered their final full day of campaigning ahead of Tuesday's elections, with the White House carefully targeting its resources in a bid to head off Republican victories.
Vice President Biden plans to join Democratic candidate Bill Owens, who is running against a third-party conservative candidate in an upstate New York congressional election, at a rally Monday morning.
Owens is fighting head-to-head against Conservative Party candidate Doug Hoffman, after GOP candidate Dede Scozzafava dropped out over the weekend. Scozzafava, who was criticized as too moderate by members of her own party, endorsed Owens on Sunday. But it's unclear how much of an impact that endorsement will have, as many of her supporters are expected to drift toward Hoffman's candidacy.
Meanwhile, President Obama headlined two rallies for New Jersey Gov. Jon Corzine Sunday, pushing to drive up turnout as Republican challenger Chris Christie did the same.
Having written off the incompetent campaign of Creigh Deeds in Virginia, Obama has put a lot of effort into Corzine's campaign in New Jersey.
The most recent non-partisan polls, like Quinnipiac College, show Corzine with a small lead, but within the margin of error. Obama has made two visits to the state in the past week, with another set for today.
While he's there, however, he might want to consider shoring up White House support in New York's 23rd District.
Yes, Joe Biden will appear there, and yes, that's a high profile appearance, but neither Governor's race will reflect as much on Obama's administration as a race to replace his Secretary of the Army, Republican John McHugh.
As I mentioned in the earlier post I linked to, McHugh's seat is a long-time moderate Republican stronghold, but there's been a twist: the Republican moderate has dropped out of the race...and thrown her support to the Democrat against a conservative insurgent candidate!
This is a situation that cries out for Obama's special attention and a last minute surprise appearance could make that endorsement of Scozzafava not only brilliant, but pave the way for her advancement in politics.
In other words, the New York State Republican party would owe Obama a favor, albeit a minor one, and one he might parlay into something useful to both himself and the nation at large.
Like, perhaps, passing a bill that allows NYS to be a testing ground for a public healthcare option. This would not be inconsistent with former Governor George Pataki's expansion of the Child Health Plus program to cover families, and would be a shot in the arm to retaining businesses in the state.
Win-win, as it were.
Imagine Joe Biden, standing there at the rally in Watertown. Thousands of curious upstaters come out, cheering, and suddenly Joe Biden announces Barack Obama.
Talk about a breaking news story! Talk about a game-changing appearance!
It could happen. It should happen. I hope it does.
UPDATE Looks like I'm in some good company about getting on the President's back.
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