I think this would be a great idea and I'm shocked why it hasn't been mentioned before.
"Any legislation should acknowledge again and explicitly that this nation remains engaged in an armed conflict with al Qaeda, the Taliban and associated organizations, who have already proclaimed themselves at war with us," Mukasey said in a speech to the American Enterprise Institute.
I mean they have already declared war against us and provided a Casus Beli by destroying our buildings on 9/11. I guess we didn't do it because they are not an actual nation but a multi-national group. However the Constitution doesn't differentiate between declaring war on an organization rather than a nation but it would be without precedent.
This would solve the enemy combatant issue by making them POWs and allow us to try them by military tribunal. I mean they were seized on a battlefield during a war so they should be considered POWs.
Plus we would have to abide by the Geneva Convention and they should as well if they happen to capture our people. Of course Al-Quida are animals who beheads our people while we will try them under enemy combatant status. This action will formalize the War on Terror as an actual War Against Al-Quida, the Taliban, and its surrogates.
Monday, July 21, 2008
Netbooks Challenging Computer Industry?
I would be scared if these things became widely adopted. The PC makers margins would be under pressure and the growth of laptops (which is the only style of computer that is still growing) could be in jeopardy.
The new computers, often called netbooks, have scant onboard memory. They use energy-sipping computer chips. They are intended largely for surfing Web sites and checking e-mail. The price is small too, with some selling for as little as $300.
I just don't think that these things will be as big a threat as this article makes them out to be. It would be nice to browse the Internet and check email from anywhere but you can already do that with an IPhone or a Blackberry. They work as a phone and MP3 player and are about as small as you can get.
So in this case the small size of the Netbook PC makes it tough to do actual work on it since you can barely see the screen and they have such a tiny little keyboard. At least with the Blackberry you can two thumb type. The Eee PC has one of those tiny little keyboards that is designed for a 6 year old. You could plug in a monitor or a full sized keyboard like you can with the CherryPal that the article mentions but you can already do this with a regular laptop.
I think a really thin and light laptop like the Macbook Air is about the smallest laptop that people would use and still be productive. I mean to check your mail and fire off a quick message or to check your stocks would be much easier to do on a Blackberry or an IPhone then on something like The Eee.
It seems to me that this Netbook is an in-between product that is just too big to do what a smart phone does (access the internet on the go) but too small to do what a laptop currently does (mobile computing for business and pleasure.) So I think this will be more of a niche item and less of a game changer then the New York Times thinks.
The new computers, often called netbooks, have scant onboard memory. They use energy-sipping computer chips. They are intended largely for surfing Web sites and checking e-mail. The price is small too, with some selling for as little as $300.
I just don't think that these things will be as big a threat as this article makes them out to be. It would be nice to browse the Internet and check email from anywhere but you can already do that with an IPhone or a Blackberry. They work as a phone and MP3 player and are about as small as you can get.
So in this case the small size of the Netbook PC makes it tough to do actual work on it since you can barely see the screen and they have such a tiny little keyboard. At least with the Blackberry you can two thumb type. The Eee PC has one of those tiny little keyboards that is designed for a 6 year old. You could plug in a monitor or a full sized keyboard like you can with the CherryPal that the article mentions but you can already do this with a regular laptop.
I think a really thin and light laptop like the Macbook Air is about the smallest laptop that people would use and still be productive. I mean to check your mail and fire off a quick message or to check your stocks would be much easier to do on a Blackberry or an IPhone then on something like The Eee.
It seems to me that this Netbook is an in-between product that is just too big to do what a smart phone does (access the internet on the go) but too small to do what a laptop currently does (mobile computing for business and pleasure.) So I think this will be more of a niche item and less of a game changer then the New York Times thinks.
Europe Embraces the Atom
It seems that the Europeans are finally starting to understand that nuclear power is one of the few short term solutions if you truly want to reduce carbon emissions.
All over the world, nuclear power is making a comeback. British Prime Minister Gordon Brown has just commissioned eight new reactors, and says there's "no upper limit" to the number Britain will build in the future. German Chancellor Angela Merkel has challenged her country's program to phase out 17 nuclear reactors by 2020, saying it will be impossible to deal with climate change without them. China and India are building nuclear power plants; France and Russia, both of whom have embraced the technology, are fiercely competing to sell them the hardware.
This article also has some interesting facts on nuclear power that needs to be highlighted any time nuclear power is mentioned. First you can't turn a nuclear reactor into a giant bomb since the uranium in the reactor hasn't been enriched yet. Also even if a plane crashes into a nuclear plant it won't cause it to explode or even have its cooling tanks get dented.
Finally nuclear waste is almost 95% recyclable and the rest could easily be stored in one place under guard. We might even find a use for it 50-100 years down the line depending on what new technologies come along. Most of the environmentalist opposition to nuclear waste is based on bad science. It is so hypocritical of the anti-nuke lobby to be so convinced about global warming but are in such opposition to something that can actually help us combat it.
All over the world, nuclear power is making a comeback. British Prime Minister Gordon Brown has just commissioned eight new reactors, and says there's "no upper limit" to the number Britain will build in the future. German Chancellor Angela Merkel has challenged her country's program to phase out 17 nuclear reactors by 2020, saying it will be impossible to deal with climate change without them. China and India are building nuclear power plants; France and Russia, both of whom have embraced the technology, are fiercely competing to sell them the hardware.
This article also has some interesting facts on nuclear power that needs to be highlighted any time nuclear power is mentioned. First you can't turn a nuclear reactor into a giant bomb since the uranium in the reactor hasn't been enriched yet. Also even if a plane crashes into a nuclear plant it won't cause it to explode or even have its cooling tanks get dented.
Finally nuclear waste is almost 95% recyclable and the rest could easily be stored in one place under guard. We might even find a use for it 50-100 years down the line depending on what new technologies come along. Most of the environmentalist opposition to nuclear waste is based on bad science. It is so hypocritical of the anti-nuke lobby to be so convinced about global warming but are in such opposition to something that can actually help us combat it.
Friday, July 18, 2008
Batman: The Dark Knight Breaks Midnight Madness Record
This movie will probably be the top grosser this summer.
So far, The Dark Knight has the midnight record, topping 2005's Star Wars: Episode III—Revenge of the Sith ($16.5 million) and, with its 4,366 theaters, the widest-release record, besting 2007's Pirates of the Caribbean: At World's End (4,362).
I know of several people that went to see it opening night but I'm not sure if they got in or not. I'm planning on seeing it sometime next week or the week after. However I think the people below are just plain nuts. I mean the movie will be out for months and then be in DVD form before the end of the year.
A quick search reveals similar ads are up in areas such as Dallas, where someone was trying to get $80 for four midnight tickets to a theater in Plano, Texas, and Raleigh, North Carolina, where a buyer was willing to pay $40 for two $12 adult admissions to a Friday night show there.
So far, The Dark Knight has the midnight record, topping 2005's Star Wars: Episode III—Revenge of the Sith ($16.5 million) and, with its 4,366 theaters, the widest-release record, besting 2007's Pirates of the Caribbean: At World's End (4,362).
I know of several people that went to see it opening night but I'm not sure if they got in or not. I'm planning on seeing it sometime next week or the week after. However I think the people below are just plain nuts. I mean the movie will be out for months and then be in DVD form before the end of the year.
A quick search reveals similar ads are up in areas such as Dallas, where someone was trying to get $80 for four midnight tickets to a theater in Plano, Texas, and Raleigh, North Carolina, where a buyer was willing to pay $40 for two $12 adult admissions to a Friday night show there.
Phil Gramm Out As McCain Advisor
I think these surrogates for the candidates need to just read the exact same prepared statement and not have any opinion of their own if one slip-up forces them out.
Last week, the McCain campaign stumbled when Gramm said the country was in a "mental recession" and had become "a nation of whiners" — sentiments McCain rejected.
Gramm, a former U.S. senator from Texas, issued a statement late Friday saying he was stepping down as co-chair of the McCain campaign "to end this distraction and get on with the real debate."
The problem is that he should have said that some people in this nation whine too much or hedge his bets with a "some Americans are feeling pain" type of thing.
Last week, the McCain campaign stumbled when Gramm said the country was in a "mental recession" and had become "a nation of whiners" — sentiments McCain rejected.
Gramm, a former U.S. senator from Texas, issued a statement late Friday saying he was stepping down as co-chair of the McCain campaign "to end this distraction and get on with the real debate."
The problem is that he should have said that some people in this nation whine too much or hedge his bets with a "some Americans are feeling pain" type of thing.
Bush Talking About Iraq "Horizon"
A timetable by any other name will still let us march out as victors and not duck out under fire. The facts on the ground are starting to change Bush's opinions on the matter.
What's changed? The sharp reduction in violence in Iraq — to the lowest level in four years — has made the country's leaders increasingly confident and more assertive about its sovereignty, giving rise to demands for a specific plan for American forces to leave.
This along with coming in from the cold on Iran and possibly avoiding an Israeli strike if Iran agrees to cooperate. It seems like backing the Surge is the best gamble that Bush has ever made. If the Israeli's and Palestinians can agree to some kind of peace plan then Bush will have done more in his last 6 months in office then the entire time before. We may even have an economic recovery right at the end of his term as well. I guess it took him 7 years for him to really get a feel for the job.
What's changed? The sharp reduction in violence in Iraq — to the lowest level in four years — has made the country's leaders increasingly confident and more assertive about its sovereignty, giving rise to demands for a specific plan for American forces to leave.
This along with coming in from the cold on Iran and possibly avoiding an Israeli strike if Iran agrees to cooperate. It seems like backing the Surge is the best gamble that Bush has ever made. If the Israeli's and Palestinians can agree to some kind of peace plan then Bush will have done more in his last 6 months in office then the entire time before. We may even have an economic recovery right at the end of his term as well. I guess it took him 7 years for him to really get a feel for the job.
Thursday, July 17, 2008
Video Game Sales up 53% in June!
I think that $4 a gallon gas is keeping people at home glued to their consoles instead of driving to go see movies or whatever. It seems that this industry is recession proof and might even be inflation proof since this industry doesn't rely on any raw materials that could go up in price.
For the first half of 2008, the U.S. video game industry has generated $8.3 billion in sales. This is a 36 percent increase in sales from the same period a year before, indicating that the sluggish economy is not hurting the industry's performance as people turn to home entertainment, NPD said.
"These numbers are mind boggingly large," said Michael Pachter, a Wedbush Morgan analyst. "Clearly we have an expanded demographic, more than just hardcore gamers, and they have an insatiable appetite for video games."
For the first half of 2008, the U.S. video game industry has generated $8.3 billion in sales. This is a 36 percent increase in sales from the same period a year before, indicating that the sluggish economy is not hurting the industry's performance as people turn to home entertainment, NPD said.
"These numbers are mind boggingly large," said Michael Pachter, a Wedbush Morgan analyst. "Clearly we have an expanded demographic, more than just hardcore gamers, and they have an insatiable appetite for video games."
Microsoft Misses Net Income Target
This doesn't sound good for tech stocks.
Sales of word-processing and spreadsheet products missed Microsoft's goals for the second straight time amid what Goldman Sachs says is the worst technology spending environment since 2003. Chief Executive Officer Steve Ballmer is courting sales overseas, and efforts have been hampered by piracy in countries such as China, where eight in 10 programs are illegal copies.
I also have to say that those Office programs are just not much of a improvement over one another so I can see why they are missing goals. I have noticed that Office 2003 is pretty good for just about everything that a user may need.
If there are differences between Office 2003 and Office XP or Office 2007 then I am really not aware of them. I think many users are unaware of the difference as well. These new versions just seem to be a coat of graphics paint on the same basic structure.
No wonder they are trying to push the Yahoo merger so hard. They seem to be losing sales in their core businesses and are trying desperately to branch out with mixed results. Also it seems that Vista was a failure and the only reason people are using it is because it comes pre-loaded on their new PCs. I don't think Microsoft is going to be a decent stock until they get out their new OS Windows Vienna.
Sales of word-processing and spreadsheet products missed Microsoft's goals for the second straight time amid what Goldman Sachs says is the worst technology spending environment since 2003. Chief Executive Officer Steve Ballmer is courting sales overseas, and efforts have been hampered by piracy in countries such as China, where eight in 10 programs are illegal copies.
I also have to say that those Office programs are just not much of a improvement over one another so I can see why they are missing goals. I have noticed that Office 2003 is pretty good for just about everything that a user may need.
If there are differences between Office 2003 and Office XP or Office 2007 then I am really not aware of them. I think many users are unaware of the difference as well. These new versions just seem to be a coat of graphics paint on the same basic structure.
No wonder they are trying to push the Yahoo merger so hard. They seem to be losing sales in their core businesses and are trying desperately to branch out with mixed results. Also it seems that Vista was a failure and the only reason people are using it is because it comes pre-loaded on their new PCs. I don't think Microsoft is going to be a decent stock until they get out their new OS Windows Vienna.
Tehran and Washington are Starting to Cozy Up
I think Bush might just be so desperate for a legacy that he just might bring the US and Iran a little bit closer before he leaves office.
The presence of the State Department's third-ranking official, Undersecretary for Political Affairs William Burns, in Geneva is intended to shore up a ``two-track policy'' to reward Iran for suspending uranium enrichment and impose penalties if it doesn't, Secretary of State Condoleezza Rice said yesterday.
It seems that Burns will probably be there to offer the carrot if Iran decides to stop their uranium enrichment. If Burns is rebuffed then they could actually put in place some tough sanctions because they could say that "all channels have been exhausted." It seems like a decent plan to prevent a wider war in the Middle East that would drive oil prices to $200+.
The presence of the State Department's third-ranking official, Undersecretary for Political Affairs William Burns, in Geneva is intended to shore up a ``two-track policy'' to reward Iran for suspending uranium enrichment and impose penalties if it doesn't, Secretary of State Condoleezza Rice said yesterday.
It seems that Burns will probably be there to offer the carrot if Iran decides to stop their uranium enrichment. If Burns is rebuffed then they could actually put in place some tough sanctions because they could say that "all channels have been exhausted." It seems like a decent plan to prevent a wider war in the Middle East that would drive oil prices to $200+.
Oil Dropped to $130
At last it seems that some of the air is being let out of the oil bubble .
The U.S. government's Energy Information Administration said crude inventories rose by 3.0 million barrels in the week ending July 11. That confounded market expectations for a decline of 2.2 million barrels. "The inventory report essentially indicated oil demand in the US is just very poor," said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.
So it seems that $147 a barrel for oil is now the very top of the market for the time being. You can probably see gas prices start to slowly go down in the next few weeks as well. It would be interesting to see what people start to do with the extra cash that was previously going to gas prices. Will they go back to buying full sized trucks when gas comes back to $3.00?
The U.S. government's Energy Information Administration said crude inventories rose by 3.0 million barrels in the week ending July 11. That confounded market expectations for a decline of 2.2 million barrels. "The inventory report essentially indicated oil demand in the US is just very poor," said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.
So it seems that $147 a barrel for oil is now the very top of the market for the time being. You can probably see gas prices start to slowly go down in the next few weeks as well. It would be interesting to see what people start to do with the extra cash that was previously going to gas prices. Will they go back to buying full sized trucks when gas comes back to $3.00?
Wednesday, July 16, 2008
Wells Fargo Taking Over the Western Mortgage Market
And it is starting to show in their last earnings report.
Ladenburg Thalman analyst Richard X. Bove said that he was impressed by Wells Fargo’s earnings despite coming in well below results in the past year. Bove added that Wells Fargo benefited from less competition as rival Washington Mutual is shrinking, Countrywide Financial (nyse: CFC - news - people ) and Golden West (nyse: GDW - news - people ) are gone and Bank of America (nyse: BAC - news - people ) is not competing as hard for mortgage business. He also likened Wells to "a 'hot knife' in the 'butter' known as the West Coast," as community bankers across the region are suffering. "The gains are likely to continue," he noted.
It seems like the last man standing is going to get a pretty large slice of the West Coast market. Also Wells Fargo seems to be pretty tight on the underwriting so the loans they are putting on the balance sheet won't damage the company going forward. Also it seems that Warren Buffet is long this stock and adding to his position. I could be a good place to start your research if you are nibbling fincancials again.
Ladenburg Thalman analyst Richard X. Bove said that he was impressed by Wells Fargo’s earnings despite coming in well below results in the past year. Bove added that Wells Fargo benefited from less competition as rival Washington Mutual is shrinking, Countrywide Financial (nyse: CFC - news - people ) and Golden West (nyse: GDW - news - people ) are gone and Bank of America (nyse: BAC - news - people ) is not competing as hard for mortgage business. He also likened Wells to "a 'hot knife' in the 'butter' known as the West Coast," as community bankers across the region are suffering. "The gains are likely to continue," he noted.
It seems like the last man standing is going to get a pretty large slice of the West Coast market. Also Wells Fargo seems to be pretty tight on the underwriting so the loans they are putting on the balance sheet won't damage the company going forward. Also it seems that Warren Buffet is long this stock and adding to his position. I could be a good place to start your research if you are nibbling fincancials again.
Tuesday, July 15, 2008
Shortside Hedge Funds Might Cause Bank Runs?
I was reading a pretty depressing piece by Cramer about how the stocks of many different kinds of financial companies are now in the toilet and some might not ever recover. This part caught my conspiracy theory seeking eye.
Any short-selling hedge fund could hire 30 actors and have them line up at a Washington Mutual or two and get a bank run going. Then we would have to hear about a "hasty" Treasury department plan to bail out WM. Hasty? How can these guys not see it coming?
Hmm, I wonder if this is an actual viable plan. They would need to hire 30 extras it would cost about a $100 per person per day. So this fund could conceivably pull $3000 out of petty cash (or some shell company) and put in a call to the Local Daily News so that they could film their extras pounding on the doors of their target bank. You just might have a panic on your hands if that Local News is the kind that loves to drum up controversy.
Hawaii newscasts are pretty laid back so it wouldn't work here. However, when I visited Seattle, I remember that KIRO made every purse snatching seem like a crime wave so they would be the perfect tool to do a "bank-run-short-attack" on someone like Washington Mutual.
Hell, this Short Side Hedge Fund could just get their employees to secretly be interviewed by the Local News. These employees would say that they are desperate to pull their money out of the target bank because they are afraid they will be the next IndyMac. I hope the SEC is watching out for a trick like this.
I think the problem is that so many banking CEOs are saying "we are well capitalized" but they go right back to the FED for cashola a few months later. There is a credibility gap with these people. They can't tap equity because their stocks are in the single digits and they can't tap debt because the market has seized up. All they can do is wait until house prices go back up and hope for the best.
I have looked at a few of the banking stocks that Cramer mentions below and it seems that waiting and hoping might just be their strategy. If they can just hold on and not have their customers rush their tellers then they can make it to a period where house prices will stabilize. So you can only be short (or don't touch them at all) until we see a Case-Shiller Home Price Index that isn't dropping anymore. I think that number may be what the market will turn on for the next several months.
No revelation that Lehman or Merrill's in the soup, although I do marvel that at no price do they seem interesting to anyone -- value guys, takeover guys, or acquirers in general. But how about Comerica (CMA - Cramer's Take - Stockpickr), Regions Financial (RF - Cramer's Take - Stockpickr), Sovereign (SOV - Cramer's Take - Stockpickr), Huntington Bancshares (HBAN - Cramer's Take - Stockpickr), Suntrust (STI - Cramer's Take - Stockpickr), Fifth Third (FITB - Cramer's Take - Stockpickr), First Horizon (FHN - Cramer's Take - Stockpickr), Marshall & Ilsley (MI - Cramer's Take - Stockpickr), Zions (ZION - Cramer's Take - Stockpickr), Key (KEY - Cramer's Take - Stockpickr), Colonial (CNB - Cramer's Take - Stockpickr) and BB&T (BBT - Cramer's Take - Stockpickr)?
Any short-selling hedge fund could hire 30 actors and have them line up at a Washington Mutual or two and get a bank run going. Then we would have to hear about a "hasty" Treasury department plan to bail out WM. Hasty? How can these guys not see it coming?
Hmm, I wonder if this is an actual viable plan. They would need to hire 30 extras it would cost about a $100 per person per day. So this fund could conceivably pull $3000 out of petty cash (or some shell company) and put in a call to the Local Daily News so that they could film their extras pounding on the doors of their target bank. You just might have a panic on your hands if that Local News is the kind that loves to drum up controversy.
Hawaii newscasts are pretty laid back so it wouldn't work here. However, when I visited Seattle, I remember that KIRO made every purse snatching seem like a crime wave so they would be the perfect tool to do a "bank-run-short-attack" on someone like Washington Mutual.
Hell, this Short Side Hedge Fund could just get their employees to secretly be interviewed by the Local News. These employees would say that they are desperate to pull their money out of the target bank because they are afraid they will be the next IndyMac. I hope the SEC is watching out for a trick like this.
I think the problem is that so many banking CEOs are saying "we are well capitalized" but they go right back to the FED for cashola a few months later. There is a credibility gap with these people. They can't tap equity because their stocks are in the single digits and they can't tap debt because the market has seized up. All they can do is wait until house prices go back up and hope for the best.
I have looked at a few of the banking stocks that Cramer mentions below and it seems that waiting and hoping might just be their strategy. If they can just hold on and not have their customers rush their tellers then they can make it to a period where house prices will stabilize. So you can only be short (or don't touch them at all) until we see a Case-Shiller Home Price Index that isn't dropping anymore. I think that number may be what the market will turn on for the next several months.
No revelation that Lehman or Merrill's in the soup, although I do marvel that at no price do they seem interesting to anyone -- value guys, takeover guys, or acquirers in general. But how about Comerica (CMA - Cramer's Take - Stockpickr), Regions Financial (RF - Cramer's Take - Stockpickr), Sovereign (SOV - Cramer's Take - Stockpickr), Huntington Bancshares (HBAN - Cramer's Take - Stockpickr), Suntrust (STI - Cramer's Take - Stockpickr), Fifth Third (FITB - Cramer's Take - Stockpickr), First Horizon (FHN - Cramer's Take - Stockpickr), Marshall & Ilsley (MI - Cramer's Take - Stockpickr), Zions (ZION - Cramer's Take - Stockpickr), Key (KEY - Cramer's Take - Stockpickr), Colonial (CNB - Cramer's Take - Stockpickr) and BB&T (BBT - Cramer's Take - Stockpickr)?
How to Check if Your Bank is About to Die
This is a very informative site that tells you several ways to tell if you need to pull all of your money above $100,000 out of your bank account or not. This information is quarter by quarter so you might need to check this information after your bank brings out their numbers.
You can look up your bank or credit union at the following links to a) make sure they are insured, and b) check their financial statements and ratio reports, which are a quick snapshot of their performance.
• FDIC bank/thrift lookup
• NCUA credit union lookup
If you can't locate your financial institution, call them and ask for their FDIC certificate number (bank or savings and loan) or their NCUA charter number (credit union). If they don't have one, you should probably be concerned. (Just ask former customers of the SIBC.)
The easiest way to check your bank's health is to use BankRate.com's Safe & Sound® ratings. They comb through the call report data to rate banks, savings and loans, and credit unions on peer performance, industry standards, and key benchmarks.
Too bad there isn't a bank run monitor system with a Webcam setup in front of your banks headquarters. Also it would be nice to have a Schumer Watch to see if he talks about your bank so you can pull your money out before it gets run on. I guess you can hang out at his site and parse whatever official letters he sends out and immediately go short anything he mentions.
You can look up your bank or credit union at the following links to a) make sure they are insured, and b) check their financial statements and ratio reports, which are a quick snapshot of their performance.
• FDIC bank/thrift lookup
• NCUA credit union lookup
If you can't locate your financial institution, call them and ask for their FDIC certificate number (bank or savings and loan) or their NCUA charter number (credit union). If they don't have one, you should probably be concerned. (Just ask former customers of the SIBC.)
The easiest way to check your bank's health is to use BankRate.com's Safe & Sound® ratings. They comb through the call report data to rate banks, savings and loans, and credit unions on peer performance, industry standards, and key benchmarks.
Too bad there isn't a bank run monitor system with a Webcam setup in front of your banks headquarters. Also it would be nice to have a Schumer Watch to see if he talks about your bank so you can pull your money out before it gets run on. I guess you can hang out at his site and parse whatever official letters he sends out and immediately go short anything he mentions.
Recession? What Recession?
Well it looks like the economists are adjusting their numbers again.
Today’s data on May international trade prompted several economists to boost their tracking estimates of second quarter GDP growth. Macroeconomic Advisers boosted its estimate to 3.3% (annual rate) from 3% as did HSBC. Morgan Stanley raised its estimate to 3.9% from 3.8%. GDP grew just 0.7% in the first quarter.
We still have not had a single quarter of negative growth. If gas prices weren't so high I think we might be already pulling out of the slowdown. I agree with Phil Gramm in saying that this is a media driven recession. Of course a few more Senate-driven bank runs and perception might become an actual reality.
Today’s data on May international trade prompted several economists to boost their tracking estimates of second quarter GDP growth. Macroeconomic Advisers boosted its estimate to 3.3% (annual rate) from 3% as did HSBC. Morgan Stanley raised its estimate to 3.9% from 3.8%. GDP grew just 0.7% in the first quarter.
We still have not had a single quarter of negative growth. If gas prices weren't so high I think we might be already pulling out of the slowdown. I agree with Phil Gramm in saying that this is a media driven recession. Of course a few more Senate-driven bank runs and perception might become an actual reality.
EPA Pushes Burying Carbon
This sounds like the start of a new generation of anti-pollution methods that might be viable revenue streams in the future.
The program would include testing and monitoring of wells to protect groundwater supplies, with rules going into effect as early as 2010.
"With proper testing and monitoring, carbon sequestration could play a major role in reducing carbon-dioxide emissions into the atmosphere," Grumbles said on a conference call with reporters.
Wells would be half a mile or more in depth, with a rock-confining zone to create a seal to prevent carbon dioxide from escaping.
I could see oil companies leasing out the land under played out wells in order to store carbon in. They might even get special treatment from the government for using the land they probably won't be using anyway. They could even get free offsets by doing this kind of thing as a side business.
Also a carbon pumping device could be a boon for a company that can make it quickly and put it in place cheaply. I'm sure that those heavy machinery companies like Mitsubishi or National Oilwell Varco could give it a try if it was profitable. The more I look into this green tech the more it looks like the dawning of the next Internet Age.
The program would include testing and monitoring of wells to protect groundwater supplies, with rules going into effect as early as 2010.
"With proper testing and monitoring, carbon sequestration could play a major role in reducing carbon-dioxide emissions into the atmosphere," Grumbles said on a conference call with reporters.
Wells would be half a mile or more in depth, with a rock-confining zone to create a seal to prevent carbon dioxide from escaping.
I could see oil companies leasing out the land under played out wells in order to store carbon in. They might even get special treatment from the government for using the land they probably won't be using anyway. They could even get free offsets by doing this kind of thing as a side business.
Also a carbon pumping device could be a boon for a company that can make it quickly and put it in place cheaply. I'm sure that those heavy machinery companies like Mitsubishi or National Oilwell Varco could give it a try if it was profitable. The more I look into this green tech the more it looks like the dawning of the next Internet Age.
Oil Gets a Haircut
And not a moment too soon.
Oil prices plummeted by the second-largest margin on record Tuesday as investors feared a further decline in U.S. demand after hearing comments from Federal Reserve Chairman Ben Bernanke.
Light, sweet crude fell $6.44 to settle at $138.74 a barrel in trading on the New York Mercantile Exchange.
The drop in oil was the largest single-day slide in dollar terms since Jan. 17, 1991, when oil fell by $10.56. On that day, President George H.W. Bush withdrew oil from the Strategic Petroleum Reserve ahead of the first Gulf War.
I think all of the refiners and airline companies need to send Bernanke a fruit basket or something. I'm not sure how much longer they can take $145 oil and still stay in profitable.
Oil prices plummeted by the second-largest margin on record Tuesday as investors feared a further decline in U.S. demand after hearing comments from Federal Reserve Chairman Ben Bernanke.
Light, sweet crude fell $6.44 to settle at $138.74 a barrel in trading on the New York Mercantile Exchange.
The drop in oil was the largest single-day slide in dollar terms since Jan. 17, 1991, when oil fell by $10.56. On that day, President George H.W. Bush withdrew oil from the Strategic Petroleum Reserve ahead of the first Gulf War.
I think all of the refiners and airline companies need to send Bernanke a fruit basket or something. I'm not sure how much longer they can take $145 oil and still stay in profitable.
Monday, July 14, 2008
Activison Blizzard Finds an Extra $150 Million Laying Around
I just love being in video game stocks that are pretty much recession-proof. Check out this blow-out guidance. This is without the Blizzard numbers coming over yet.
In a statement, the company said it expects first quarter revenue of $650 million, up from its previous view of $500 million. Earnings per share are estimated to range between 16 and 18 cents, a dramatic increase from its earlier expectation of 4 cents.
"Activision's first-quarter stand-alone net revenues and earnings were the highest ever for a non-holiday quarter," said Robert Kotick, President and CEO of Activision Blizzard Inc. "Activision Blizzard is well positioned to exceed the financial goals set for the combined company."
They guided higher by 12-14 cents while there was a Mortgage Crisis, $4 gas, a Credit Crunch, a Bear Market, and the threat of an impending Obama Presidency. That is just nuts!
And just wait until Guitar Hero 4: World Tour ships on October 27 of this year. That thing is going to be like Rock Band with a drums and a microphone and it allows you to make your own songs as well. This game could easily be the best seller for 2008 and it will probably take $180 of my money in order for me to buy the Band Kit with the drums, microphone, and wireless guitar.
I think Activision Blizzard could easily be the #1 video game company in time for the next generation of consoles. I mean with Guitar Hero and WarCraft alone they might have 2 of the most profitable franchises of all time.
In a statement, the company said it expects first quarter revenue of $650 million, up from its previous view of $500 million. Earnings per share are estimated to range between 16 and 18 cents, a dramatic increase from its earlier expectation of 4 cents.
"Activision's first-quarter stand-alone net revenues and earnings were the highest ever for a non-holiday quarter," said Robert Kotick, President and CEO of Activision Blizzard Inc. "Activision Blizzard is well positioned to exceed the financial goals set for the combined company."
They guided higher by 12-14 cents while there was a Mortgage Crisis, $4 gas, a Credit Crunch, a Bear Market, and the threat of an impending Obama Presidency. That is just nuts!
And just wait until Guitar Hero 4: World Tour ships on October 27 of this year. That thing is going to be like Rock Band with a drums and a microphone and it allows you to make your own songs as well. This game could easily be the best seller for 2008 and it will probably take $180 of my money in order for me to buy the Band Kit with the drums, microphone, and wireless guitar.
I think Activision Blizzard could easily be the #1 video game company in time for the next generation of consoles. I mean with Guitar Hero and WarCraft alone they might have 2 of the most profitable franchises of all time.
How to Spot a Dying Bank
This is an interesting article by Seeking Alpha that gives two ratios on how to spot a dying bank.
In order to spot banks in danger, two popular ratios are used. First, when you divide non-performing assets by all outstanding loans, you find that a ratio over 5% signals danger (see CNBC article). Using this ratio you find that other banks, in addition to BankUnited and Downey (BankUnited's ratio is 5.36%, while Downey is at 13.86%) are suspect, including Corus Bankshares (CORS) at a 13.18% ratio, Doral Financial (DRL) at 12.82%, and FirstFed Financial (FED) at 6.73%. A second commonly used ratio that compares non-performing assets divided by reserves plus common equity causes Washington Mutual (WM), with a ratio of 40.6%, to also become suspect. Any value around 40% is thought to be in the danger zone.
I have never heard of any of those banks at all. All of these stocks are in the single digits except for Doral Financial which is at $12.12. I guess you could also say that Washington Mutual may be on the borderline of the death zone. That along with Lehman's Bruce Harting's note could be part of the reason why the stock dropped by 34% today.
In order to spot banks in danger, two popular ratios are used. First, when you divide non-performing assets by all outstanding loans, you find that a ratio over 5% signals danger (see CNBC article). Using this ratio you find that other banks, in addition to BankUnited and Downey (BankUnited's ratio is 5.36%, while Downey is at 13.86%) are suspect, including Corus Bankshares (CORS) at a 13.18% ratio, Doral Financial (DRL) at 12.82%, and FirstFed Financial (FED) at 6.73%. A second commonly used ratio that compares non-performing assets divided by reserves plus common equity causes Washington Mutual (WM), with a ratio of 40.6%, to also become suspect. Any value around 40% is thought to be in the danger zone.
I have never heard of any of those banks at all. All of these stocks are in the single digits except for Doral Financial which is at $12.12. I guess you could also say that Washington Mutual may be on the borderline of the death zone. That along with Lehman's Bruce Harting's note could be part of the reason why the stock dropped by 34% today.
It looks like Schumer Caused the IndyMac Bank Run
This is exactly why Americans hates to give this country's economic stewardship over to the Democrats. Even though I have given them plaudits in the past they still end up showing us just how dangerous they are when it comes to economic issues.
The banking regulator said it closed IndyMac after customers began a run on the lender following the June 26 release of a letter by Sen. Charles Schumer, D-N.Y., urging several bank regulatory agencies that they take steps to prevent IndyMac's collapse.
In the 11 days that followed the letter's release, depositors took out more than $1.3 billion, regulators said.
I think there should be a censure motion brought up against Schumer on behalf of all the shareholders of IndyMac as well as those people that have more then $100K in savings at the bank. It is pretty much because of the Senator's loose lips that there was a run on the bank.
It is true that IndyMac's management is to blame for things getting terminal but it was Schumer's big mouth that pulled the plug. The funny thing is that Schumer is from New York and not California where IndyMac is based. I think it may be a good idea for the SEC to see if Schumer or some of his people were short IndyMac, XLF, or financials in general to see if his loose words lined someones pockets.
It may now be a good trade to go short any bank or mortgage lender that any Senator or Congressman talks about because there might be a run on that bank. It also looks like WaMu and National City Bank may now be under the gun. I would be nice to know Senator Schumer's thoughts on those companies so I can put in my trade now.
The banking regulator said it closed IndyMac after customers began a run on the lender following the June 26 release of a letter by Sen. Charles Schumer, D-N.Y., urging several bank regulatory agencies that they take steps to prevent IndyMac's collapse.
In the 11 days that followed the letter's release, depositors took out more than $1.3 billion, regulators said.
I think there should be a censure motion brought up against Schumer on behalf of all the shareholders of IndyMac as well as those people that have more then $100K in savings at the bank. It is pretty much because of the Senator's loose lips that there was a run on the bank.
It is true that IndyMac's management is to blame for things getting terminal but it was Schumer's big mouth that pulled the plug. The funny thing is that Schumer is from New York and not California where IndyMac is based. I think it may be a good idea for the SEC to see if Schumer or some of his people were short IndyMac, XLF, or financials in general to see if his loose words lined someones pockets.
It may now be a good trade to go short any bank or mortgage lender that any Senator or Congressman talks about because there might be a run on that bank. It also looks like WaMu and National City Bank may now be under the gun. I would be nice to know Senator Schumer's thoughts on those companies so I can put in my trade now.
New Yorker Makes with the "Satire"
I thought the New Yorker was supposed to be a lefty rag but I guess they are engaging in the provocateur business to get people to read their magazine again. I would be pissed if I was Obama too. They even drew a picture of Bin Laden over their mantel.
The Obama campaign quickly condemned the rendering. Spokesman Bill Burton said in a statement: “The New Yorker may think, as one of their staff explained to us, that their cover is a satirical lampoon of the caricature Sen. Obama's right-wing critics have tried to create. But most readers will see it as tasteless and offensive. And we agree."
The Obama campaign quickly condemned the rendering. Spokesman Bill Burton said in a statement: “The New Yorker may think, as one of their staff explained to us, that their cover is a satirical lampoon of the caricature Sen. Obama's right-wing critics have tried to create. But most readers will see it as tasteless and offensive. And we agree."
Bush Passes The Ball on Drilling: Dems About to Drop It
It just seems to be the same old crap from the leadership of the Dems. I love this idiotic and overused defence as well. Pelosi just blames Big Oil and talsk about the 68 million acres of land that the oil majors "are sitting on." No mention of energy security or lowering prices at the pump.
"Once again, the oilman in the White House is echoing the demands of Big Oil," said House Speaker Nancy Pelosi. "The Bush plan is a hoax. It will neither reduce gas prices nor increase energy independence. It just gives millions more acres to the same companies that are sitting on nearly 68 million acres of public lands and coastal areas."
Obviously Nancy Pelosi has never actually run an oil company. If there was vast reserves of oil on those 68 million acres of land then the oil companies would already have hundrerds of rigs up in order to take advantage of the $145 a barrel oil. Even if the oil was hard to pull out of the ground they would still go after it since high prices justify their costs. After all I hope Pelosi knows that the oil majors actually own only 6% of the worlds oil reserves.
Opening up extra lands for drilling makes it so those lands can be checked for oil or not. It adds to world oil supply so it stays above demand and will hopefully lower prices. The Brazilians would have never found that Tupi Basin oil if they let the land sit there.
So in this case the Democratic leadership are actually standing in the way of more domestic oil production. In fact you could say that they are driving us deeper in the pocket of Saudi Arabia, Iran, and Venezuela since they refuse to let Americans have access to American oil. And they wonder why they have a 18% approval rating.
"Once again, the oilman in the White House is echoing the demands of Big Oil," said House Speaker Nancy Pelosi. "The Bush plan is a hoax. It will neither reduce gas prices nor increase energy independence. It just gives millions more acres to the same companies that are sitting on nearly 68 million acres of public lands and coastal areas."
Obviously Nancy Pelosi has never actually run an oil company. If there was vast reserves of oil on those 68 million acres of land then the oil companies would already have hundrerds of rigs up in order to take advantage of the $145 a barrel oil. Even if the oil was hard to pull out of the ground they would still go after it since high prices justify their costs. After all I hope Pelosi knows that the oil majors actually own only 6% of the worlds oil reserves.
Opening up extra lands for drilling makes it so those lands can be checked for oil or not. It adds to world oil supply so it stays above demand and will hopefully lower prices. The Brazilians would have never found that Tupi Basin oil if they let the land sit there.
So in this case the Democratic leadership are actually standing in the way of more domestic oil production. In fact you could say that they are driving us deeper in the pocket of Saudi Arabia, Iran, and Venezuela since they refuse to let Americans have access to American oil. And they wonder why they have a 18% approval rating.
Friday, July 11, 2008
Astute Prediction of the Mortgage Mess by Ryan Krueger in 2005
I think this guy needs to run for Prognosticator and Chief. He called the mortgage crisis right down to what is happening with Fannie and Freddie way back in 2005. This part caught my eye.
In my business, I think many of us overestimate voters’ desire to own their own home. Many of them don’t mind living month to month, and our calculations can’t factor in this subtle shift, nor could their parents have imagined it. How much does it cost is less important than what the payment is. Building up equity and handing off a war chest to their heirs doesn’t matter to most folks, and that might not be as dire as some would have you believe.
I have to agree with this statement 100%. I think many Americans view home ownership as just another long term credit purchase like a car, boat, or a big screen TV. That is why you see the curious phenomena of people simply walking away from a home that is underwater and just letting the bank have it.
In markets hit hardest by falling home prices and rising foreclosures, lenders and brokers are discovering a new phenomenon: the "buy and bail," in which borrowers with good credit buy a new home—often at a much lower price—then bail out of the "upside-down" mortgage on their first home.
Homeowners are able to pull off this gambit—which some lenders and real-estate agents call mortgage fraud—by taking advantage of mortgage-lending practices that allow them to buy a new primary residence before their existing residence has been sold.
Obviously this homeowner views their home as a really expensive version of Pets.com stock. They can just abandon the house and buy another similar one down the street for thousands cheaper rather then refinance their current home and wait for prices to go back up.
They obviously view their home as a stock in the red that can be dumped if things get bad and not the so-called American Dream. So maybe all the rhetoric of people feeling foreclosure pain by being kicked out of their home by cold-hearted bankers is not as true as some politicians might think.
In my business, I think many of us overestimate voters’ desire to own their own home. Many of them don’t mind living month to month, and our calculations can’t factor in this subtle shift, nor could their parents have imagined it. How much does it cost is less important than what the payment is. Building up equity and handing off a war chest to their heirs doesn’t matter to most folks, and that might not be as dire as some would have you believe.
I have to agree with this statement 100%. I think many Americans view home ownership as just another long term credit purchase like a car, boat, or a big screen TV. That is why you see the curious phenomena of people simply walking away from a home that is underwater and just letting the bank have it.
In markets hit hardest by falling home prices and rising foreclosures, lenders and brokers are discovering a new phenomenon: the "buy and bail," in which borrowers with good credit buy a new home—often at a much lower price—then bail out of the "upside-down" mortgage on their first home.
Homeowners are able to pull off this gambit—which some lenders and real-estate agents call mortgage fraud—by taking advantage of mortgage-lending practices that allow them to buy a new primary residence before their existing residence has been sold.
Obviously this homeowner views their home as a really expensive version of Pets.com stock. They can just abandon the house and buy another similar one down the street for thousands cheaper rather then refinance their current home and wait for prices to go back up.
They obviously view their home as a stock in the red that can be dumped if things get bad and not the so-called American Dream. So maybe all the rhetoric of people feeling foreclosure pain by being kicked out of their home by cold-hearted bankers is not as true as some politicians might think.
2 for 2 on Democrats Looking Good: Dodd Stands up for Fannie and Freddie
I think I am beginning to like this new Democratic Party that doesn't mill around pushing a socialist agenda but actually try to fix some things that are broken. First we have Senator Jim Webb finally understanding that regular Americans should trump environmental wackos when it comes to drilling and nuclear power. And now we have Sen. Christopher Dodd, (D-Conn.) perhaps saving Fannie Mae and Freddie Mac shareholders' bacon.
Dodd said his discussions with Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson, the regulators who oversee the firms and the two companies' CEOs convinced him they have more than adequate capital and that there was no need to even discuss failure or a bailout.
He also vowed quick passage of a long-debated housing bill to give greater oversight of the two companies, saying he expected it to passed and ready to be signed into law sometime next week.
"There is a sort of a panic going on," he said. "The facts don't warrant that reaction in my view. Fannie Mae and Freddie Mac were never bottom feeders in the residential mortgage markets. People ought to feel confident about them."
He pretty much stood up and quelled the fear of a government takeover sending FRE and FNM to zero. He seems to have actually worked with Paulson and Bernanke to hammer out a plan even though they are so-called "Bush" people. This all happened while Bush seemed to dither and hem and haw and almost killed the stocks in the process.
The New York Times says that senior members of the Bush administration are considering a takeover of Freddie and Fannie that would leave their shares "worth little or nothing," and where taxpayers would pay "any losses on mortgages they own or guarantee."
Yup, this death to FRE and FNA shareholders was purposed first instead of just letting the companies go to the discount window if they need some extra cashola. I mean they let Bear Stearns do it why not Government Sponsored Home Lending companies that represent several trillion dollars in home loans.
I think whoever mentioned receivership on the Bush team needs to resign because they can't read a financial statement correctly. I think it might be time to go long these stocks because they really are money machines if they are run properly. They seem to be actually backstopped by the government despite the Bush Administration's screw-ups. Maybe wait for the reforms to kick in before it is time to pull the trigger.
Dodd said his discussions with Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson, the regulators who oversee the firms and the two companies' CEOs convinced him they have more than adequate capital and that there was no need to even discuss failure or a bailout.
He also vowed quick passage of a long-debated housing bill to give greater oversight of the two companies, saying he expected it to passed and ready to be signed into law sometime next week.
"There is a sort of a panic going on," he said. "The facts don't warrant that reaction in my view. Fannie Mae and Freddie Mac were never bottom feeders in the residential mortgage markets. People ought to feel confident about them."
He pretty much stood up and quelled the fear of a government takeover sending FRE and FNM to zero. He seems to have actually worked with Paulson and Bernanke to hammer out a plan even though they are so-called "Bush" people. This all happened while Bush seemed to dither and hem and haw and almost killed the stocks in the process.
The New York Times says that senior members of the Bush administration are considering a takeover of Freddie and Fannie that would leave their shares "worth little or nothing," and where taxpayers would pay "any losses on mortgages they own or guarantee."
Yup, this death to FRE and FNA shareholders was purposed first instead of just letting the companies go to the discount window if they need some extra cashola. I mean they let Bear Stearns do it why not Government Sponsored Home Lending companies that represent several trillion dollars in home loans.
I think whoever mentioned receivership on the Bush team needs to resign because they can't read a financial statement correctly. I think it might be time to go long these stocks because they really are money machines if they are run properly. They seem to be actually backstopped by the government despite the Bush Administration's screw-ups. Maybe wait for the reforms to kick in before it is time to pull the trigger.
Thursday, July 10, 2008
Fannie Mae, Freddie Mac Stock May Go to Zero?
At least that is what might happen if they are still having trouble. Now that would be bad news to everyone who was bottom fishing these things.
The government is discussing placing them in a conservatorship, under which the companies' shares would be worth little or nothing and losses on mortgage holdings would be covered by taxpayers, the Times said, citing unidentified officials briefed on the matter. Their shares are plunging and their borrowing costs are rising as investors worry the companies will suffer losses larger than the $11 billion they have lost in recent months, the Times said.
The government is discussing placing them in a conservatorship, under which the companies' shares would be worth little or nothing and losses on mortgage holdings would be covered by taxpayers, the Times said, citing unidentified officials briefed on the matter. Their shares are plunging and their borrowing costs are rising as investors worry the companies will suffer losses larger than the $11 billion they have lost in recent months, the Times said.
Phil Gramm is Correct: We are a Nation of Whiners
I have to agree with what he is saying.
"We have sort of become a nation of whiners. You just hear this constant whining, complaining about a loss of competitiveness, America in decline," said the former Texas senator. "You've heard of mental depression; this is a mental recession."
Gramm also said the media was responsible for fostering unnecessary anxiety over the state of the economy. "Misery sells newspapers," he said. "Thank God the economy is not as bad as you read in the newspaper every day."
I have to agree with him because things are not even close to either the 70's gas crisis and stagflation years that followed when inflation was in the double digits and unemployment was 7-8%. And we are not even ballpark of the 25% unemployment rate or the 16% interest rates during the Great Depression no matter what the media says. In fact we still don't have the 2 strait quarters of negative growth that is the classic definition of a recession. We haven't had negative GDP growth since 1991!
The "nation of whiners" part is true to a point as well. Things are not as bad as it has been in our nations history but 81% of Americans still feel that we are on the wrong track. We don't have millions of men engaged in a World Wide War, we aren't under the threat of nuclear annihilation, whole parts of the nation aren't killing each other in a Pennsylvania field, and we don't have millions of people living in tent cities or riding the rails.
I chalk this "whining" factor up to people who are actually feeling the effects of the economic slowdown. The Iraq War was over there in the Middle East somewhere, 9/11 was a scary time but we quickly got control of the situation, and the Dotcom Bust was Silicon Valley guys with nose rings losing their jobs. Couple this with the fact that too many Americans are economically illiterate and of course they will feel bad about the economy. They blame shady New York bankers, and pinstriped oil executives, and just about everyone else other then themselves for their situation.
The gas and housing crisis's are hitting Americans right where they actually feel pain. In the pocketbook. They can't drive a Full Sized SUV with heated leather seats, they can't afford the jumbo-no money down-interest only ARM on their mini-mansion, and they can't buy a new 64" Plasma TV with their Housing Line of Credit. And maybe Little Jimmy has to go to a State College instead of a fancy private school even though his grade inflated GPA and SAT tutor helped him test into one.
Line these fears up against a person in a Darfuri Refugee Camp, living under a Junta in Myanmar, or having their kid go to a madrassa that teaches her that blowing herself up in front of a blast barrier at an IDF checkpoint is top thing to do with her life. There is simply no contest who has it worse.
There are Americans who are struggling. But they have things far better then a Sudanese person who is struggling. I'm sure a refugee living in the Irrawaddy Delta would love to have trouble meeting a resetting ARM payment instead of dying of dysentery. So yeah, we are kind of a nation of whiners. We have it so much better then so many other people around the world and we almost never acknowledge it.
But luckily past generations of Americans who have faced *far* more dire times then we have currently have shown that we are a nation of doers as well. In a weird way I think Obama winning the White House, and the media starting a rosier outlook to help their man in power, would really spell the end of the gloom-and-doom that America seems to be feeling right now.
"We have sort of become a nation of whiners. You just hear this constant whining, complaining about a loss of competitiveness, America in decline," said the former Texas senator. "You've heard of mental depression; this is a mental recession."
Gramm also said the media was responsible for fostering unnecessary anxiety over the state of the economy. "Misery sells newspapers," he said. "Thank God the economy is not as bad as you read in the newspaper every day."
I have to agree with him because things are not even close to either the 70's gas crisis and stagflation years that followed when inflation was in the double digits and unemployment was 7-8%. And we are not even ballpark of the 25% unemployment rate or the 16% interest rates during the Great Depression no matter what the media says. In fact we still don't have the 2 strait quarters of negative growth that is the classic definition of a recession. We haven't had negative GDP growth since 1991!
The "nation of whiners" part is true to a point as well. Things are not as bad as it has been in our nations history but 81% of Americans still feel that we are on the wrong track. We don't have millions of men engaged in a World Wide War, we aren't under the threat of nuclear annihilation, whole parts of the nation aren't killing each other in a Pennsylvania field, and we don't have millions of people living in tent cities or riding the rails.
I chalk this "whining" factor up to people who are actually feeling the effects of the economic slowdown. The Iraq War was over there in the Middle East somewhere, 9/11 was a scary time but we quickly got control of the situation, and the Dotcom Bust was Silicon Valley guys with nose rings losing their jobs. Couple this with the fact that too many Americans are economically illiterate and of course they will feel bad about the economy. They blame shady New York bankers, and pinstriped oil executives, and just about everyone else other then themselves for their situation.
The gas and housing crisis's are hitting Americans right where they actually feel pain. In the pocketbook. They can't drive a Full Sized SUV with heated leather seats, they can't afford the jumbo-no money down-interest only ARM on their mini-mansion, and they can't buy a new 64" Plasma TV with their Housing Line of Credit. And maybe Little Jimmy has to go to a State College instead of a fancy private school even though his grade inflated GPA and SAT tutor helped him test into one.
Line these fears up against a person in a Darfuri Refugee Camp, living under a Junta in Myanmar, or having their kid go to a madrassa that teaches her that blowing herself up in front of a blast barrier at an IDF checkpoint is top thing to do with her life. There is simply no contest who has it worse.
There are Americans who are struggling. But they have things far better then a Sudanese person who is struggling. I'm sure a refugee living in the Irrawaddy Delta would love to have trouble meeting a resetting ARM payment instead of dying of dysentery. So yeah, we are kind of a nation of whiners. We have it so much better then so many other people around the world and we almost never acknowledge it.
But luckily past generations of Americans who have faced *far* more dire times then we have currently have shown that we are a nation of doers as well. In a weird way I think Obama winning the White House, and the media starting a rosier outlook to help their man in power, would really spell the end of the gloom-and-doom that America seems to be feeling right now.
Obama Tells MoveOn to Shove it With FISA Vote
I guess since he already got the millions from the the so-called Netroots he can now throw them off the boat.
The Democrats' presumptive presidential nominee Barack Obama (D-Illinois) voted for the final bill, despite intense lobbying by supporters who used Obama's own online organizing technology to try to hold him to his promise to fight any bill that included amnesty. New York Sen. Hillary Clinton, Obama's former rival for the Democratic presidential nomination, voted against the bill.
The strange thing is that this FISA bill gives Bush a huge win. But Obama still stood by his principals (or his shift to the center tactics he needs to win the Presidency if you are a cynic) and still voted for the bill. Part of me thought he would vote present or just skip the vote so he could hedge his bets with the Netroots. Instead he stepped up and voted.
Maybe he is the "so-called" post-partisan-warfare-candidate that he portrays himself as. He basically said thanks for the money MoveOn and DailyKOS now you are no longer needed. If he didn't advocate such destructive economic policies I would seriously consider voting for him because he does have the backbone to confront the zealots in his party.
The Democrats' presumptive presidential nominee Barack Obama (D-Illinois) voted for the final bill, despite intense lobbying by supporters who used Obama's own online organizing technology to try to hold him to his promise to fight any bill that included amnesty. New York Sen. Hillary Clinton, Obama's former rival for the Democratic presidential nomination, voted against the bill.
The strange thing is that this FISA bill gives Bush a huge win. But Obama still stood by his principals (or his shift to the center tactics he needs to win the Presidency if you are a cynic) and still voted for the bill. Part of me thought he would vote present or just skip the vote so he could hedge his bets with the Netroots. Instead he stepped up and voted.
Maybe he is the "so-called" post-partisan-warfare-candidate that he portrays himself as. He basically said thanks for the money MoveOn and DailyKOS now you are no longer needed. If he didn't advocate such destructive economic policies I would seriously consider voting for him because he does have the backbone to confront the zealots in his party.
It Seems Iranians Using Photoshop on Missiles
Sigh, here we go again. The Iranians are messing with the pictures to show that one of their missiles was not a dud. The sad part is the AP just ran the pictures without actually vetting them first. Here is the altered pic from Little Green Footballs site:
Jesse Jackson Wants to Castrate Obama?
Wow not this is a crazy development from the anti-Obama left. His own side now wants to see him become a castrato. I think Obama needs to start wearing a cup on the campaign trail just in case he runs into the good Reverend.
Washington Post: “Speaking near a Fox News microphone that he thought was turned off, the Rev. Jesse L. Jackson on Sunday disparaged Sen. Barack Obama’s embrace of faith-based social services, using crude language to suggest that he wanted to castrate the presumptive Democratic presidential nominee.”
Here is the video from Bill O'Reilly:
Washington Post: “Speaking near a Fox News microphone that he thought was turned off, the Rev. Jesse L. Jackson on Sunday disparaged Sen. Barack Obama’s embrace of faith-based social services, using crude language to suggest that he wanted to castrate the presumptive Democratic presidential nominee.”
Here is the video from Bill O'Reilly:
What Would The Israeli Strike Look Like?
This is a very interesting Poplular Mechanics article on what would go down if Israel bombed Iranian Nuclear sites. I think this is the part that is why the Israelis might be push up the air strike time table.
Ben-Ari and Long agree that Israel could very likely dismantle the Iranian nuclear program from the air. What comes after that—diplomatically, financially and strategically—remains open to debate. But the quality of Iran's antiaircraft equipment may drive the debate as much as the pace of any uranium enrichment project. Russia has indicated it is willing to sell its most sophisticated missile system, the S-300P (NATO designation), to Iran. If Israeli military planners see a future threat looming that they cannot counter, a near-term strike might look more attractive.
If the Iranians get the S-300P then any Israeli air strike might end up a dismal failure. So they might have to strike now while their enemy is still weak and not wait until later. I pointed out earlier that an Obama administration might hang them out to dry so this pushes up the timetable even further.
Ben-Ari and Long agree that Israel could very likely dismantle the Iranian nuclear program from the air. What comes after that—diplomatically, financially and strategically—remains open to debate. But the quality of Iran's antiaircraft equipment may drive the debate as much as the pace of any uranium enrichment project. Russia has indicated it is willing to sell its most sophisticated missile system, the S-300P (NATO designation), to Iran. If Israeli military planners see a future threat looming that they cannot counter, a near-term strike might look more attractive.
If the Iranians get the S-300P then any Israeli air strike might end up a dismal failure. So they might have to strike now while their enemy is still weak and not wait until later. I pointed out earlier that an Obama administration might hang them out to dry so this pushes up the timetable even further.
Democrats Coming Around on Offshore Drilling
At last they are starting to see that their constituencies are running the show and not the environmental wackos. Americans want to put their energy security in their own hands and not hand it off to Mullahs and Chavez. And on reading this I find it too bad that Jim Webb (D Va.) isn't running for President instead of Obama.
Sen. Jim Webb (D-Va.), fresh from his GI Bill victory, said that he is now making energy a major priority. “We need to look at all our assets,” he said, suggesting a large package including expanded offshore drilling, alternative energy, nuclear power and technology to make coal cleaner.
I am really heartened by talk like this from the Dems. At the very least I hope a guy like Jim Webb becomes Obama's Energy Czar. He actually gets it that we need to change our behavior toward oil and nuclear in order to get control of our national security. The Japanese and the French get 70% of their power from nuclear energy why shouldn't we? Hell, we invented the technology! Nuclear is the short term fix and alternative energy is the long term fix.
We can't just give in to the the Sierra Club and those people that want to protect the view from their million dollar homes. Hell, we probably wouldn't even be embroiled in the Middle East (at least since the 70s) if we had total control of our energy security. Part of the reason we propped up dictators and other undesirables in that area for so long is because we didn't want the Soviets to hurt our oil supply.
You could make the argument that we are filling up our tanks with the very thing that will get us embroiled in every hot war for the next century. We are actually giving the Mullahs money so that they can build nukes, and fund Hezbollah, so they can wipe Israel off the map. Even though we aren't buying Iranian oil directly all they have to do is pop off a few missiles, and it sends oil prices up, and it enriches them. So I guess the Dems are finally starting to understand that to "Stop the War with Iran" we need to throw the environmentalists under the bus.
Sen. Jim Webb (D-Va.), fresh from his GI Bill victory, said that he is now making energy a major priority. “We need to look at all our assets,” he said, suggesting a large package including expanded offshore drilling, alternative energy, nuclear power and technology to make coal cleaner.
I am really heartened by talk like this from the Dems. At the very least I hope a guy like Jim Webb becomes Obama's Energy Czar. He actually gets it that we need to change our behavior toward oil and nuclear in order to get control of our national security. The Japanese and the French get 70% of their power from nuclear energy why shouldn't we? Hell, we invented the technology! Nuclear is the short term fix and alternative energy is the long term fix.
We can't just give in to the the Sierra Club and those people that want to protect the view from their million dollar homes. Hell, we probably wouldn't even be embroiled in the Middle East (at least since the 70s) if we had total control of our energy security. Part of the reason we propped up dictators and other undesirables in that area for so long is because we didn't want the Soviets to hurt our oil supply.
You could make the argument that we are filling up our tanks with the very thing that will get us embroiled in every hot war for the next century. We are actually giving the Mullahs money so that they can build nukes, and fund Hezbollah, so they can wipe Israel off the map. Even though we aren't buying Iranian oil directly all they have to do is pop off a few missiles, and it sends oil prices up, and it enriches them. So I guess the Dems are finally starting to understand that to "Stop the War with Iran" we need to throw the environmentalists under the bus.
Wednesday, July 09, 2008
Hedge Funds Beat Down in 2008
I guess they just weren't ready for high oil prices and an economic downturn at the same time. I wonder how these guys would have done in the early 70s?
Hedge funds delivered their worst performance on record during the first half of 2008, revealing that the industry has not been immune to the broader market turmoil.
As a group, hedge funds declined 0.68% through the end of June, and are down 0.75% so far this year, according to numbers published this week by industry tracker Hedge Fund Research.
The figures represent the worst first-half of the year performance for the industry since the research group began tracking returns in 1990.
Hedge funds delivered their worst performance on record during the first half of 2008, revealing that the industry has not been immune to the broader market turmoil.
As a group, hedge funds declined 0.68% through the end of June, and are down 0.75% so far this year, according to numbers published this week by industry tracker Hedge Fund Research.
The figures represent the worst first-half of the year performance for the industry since the research group began tracking returns in 1990.
Iran Tests Missile: Oil Goes Up
Sure enough the Iranians pop off a few missiles and oil prices go up. Luckily for everyone who isn't long oil the market settled down once the Supply Report showed that gas stores built up yet again.
Gasoline inventories were up by 900,000 barrels for the week, nearly double the 500,000-barrel boost expected by Platts. Over the holiday, gasoline stocks usually decline or are flat.
The rise in supplies "implied demand for gasoline is tapering off," said Tom Orr, head of research for Weeden & Co.
I think $4 gas is some kind of break point when it comes to gasoline supply/demand. People will just drive less and start to change their behavior and buy smaller cars to compensate.
Gasoline inventories were up by 900,000 barrels for the week, nearly double the 500,000-barrel boost expected by Platts. Over the holiday, gasoline stocks usually decline or are flat.
The rise in supplies "implied demand for gasoline is tapering off," said Tom Orr, head of research for Weeden & Co.
I think $4 gas is some kind of break point when it comes to gasoline supply/demand. People will just drive less and start to change their behavior and buy smaller cars to compensate.
Tuesday, July 08, 2008
TheWhoFarm Message Clouded by Stunt
I agree with much of their message. I support energy independence, the need to develop alternative energy and even buying local produce but this is case-in-point why hardly any regular Americans listen to environmentalists.
TheWhoFarm, that’s who, a newly minted publicity-seeking environmental collective with an agrico-political mission: to persuade the 44th President of the U.S. — whoever that turns out to be — to transform the White House’s 17-acre lawn into an organic farm.
“We’re here to restore the edible landscape,” says Daniel Bowman Simon, 28, the group’s organizer and spokesperson and a young man given to making grand pronouncements. “We want to bring seeds of change back to the White House.”
So they are going to break the world record for standing in line for a product which happens to be the 3G IPhone. That means that this group instead of being productive members of society are camping out for a week to buy a $299 phone and are trying to get the President of the United States to turn the White House lawn into an organic farm. Just think about that for a second.
They do have a sustainable living message but it gets buried under a publicity stunt and the idea that they have the time and the means to wait in line for 7 days in order to buy a phone. They even got free publicity from Fortune magazine.
This is exactly why their message falls on dead ears with the majority of Americans. People that have to work for a living do not have the means to eat healthy foods which usually costs more, wait in lines in front of the Apple Store for 7 days, or even afford to buy 3 IPhones (their leader Daniel Bowman Simon is buying one for himself, one for Obama, and one for McCain.) How can people that are so divorced from reality like members of TheWhoFarm relate to regular Americans?
The sad part is that I think their base message is a very good one. Buying food grown locally helps keep small farmers in business and stops all of the transportation costs it would take to get food from Chile or wherever. I don't care about the carbon footprint but I do care about the diesel fuel that powers all of those trucks, dry bulk tankers etc. might be(after being refined) coming out of an Iranian oil well.
I think the sustainable living message of groups like TheWhoFarm would connect with more Americans when you tie foreign oil to security, and high gas pricing as enriching the very countries that hate us. If you eat an apple grown in upstate New York you are taking your security and well being back from the Oil Sheiks and the Socialists Dictators.
TheWhoFarm, that’s who, a newly minted publicity-seeking environmental collective with an agrico-political mission: to persuade the 44th President of the U.S. — whoever that turns out to be — to transform the White House’s 17-acre lawn into an organic farm.
“We’re here to restore the edible landscape,” says Daniel Bowman Simon, 28, the group’s organizer and spokesperson and a young man given to making grand pronouncements. “We want to bring seeds of change back to the White House.”
So they are going to break the world record for standing in line for a product which happens to be the 3G IPhone. That means that this group instead of being productive members of society are camping out for a week to buy a $299 phone and are trying to get the President of the United States to turn the White House lawn into an organic farm. Just think about that for a second.
They do have a sustainable living message but it gets buried under a publicity stunt and the idea that they have the time and the means to wait in line for 7 days in order to buy a phone. They even got free publicity from Fortune magazine.
This is exactly why their message falls on dead ears with the majority of Americans. People that have to work for a living do not have the means to eat healthy foods which usually costs more, wait in lines in front of the Apple Store for 7 days, or even afford to buy 3 IPhones (their leader Daniel Bowman Simon is buying one for himself, one for Obama, and one for McCain.) How can people that are so divorced from reality like members of TheWhoFarm relate to regular Americans?
The sad part is that I think their base message is a very good one. Buying food grown locally helps keep small farmers in business and stops all of the transportation costs it would take to get food from Chile or wherever. I don't care about the carbon footprint but I do care about the diesel fuel that powers all of those trucks, dry bulk tankers etc. might be(after being refined) coming out of an Iranian oil well.
I think the sustainable living message of groups like TheWhoFarm would connect with more Americans when you tie foreign oil to security, and high gas pricing as enriching the very countries that hate us. If you eat an apple grown in upstate New York you are taking your security and well being back from the Oil Sheiks and the Socialists Dictators.
Are Speculators Driving Oil Markets? By the Numbers
Now this article has some very sobering statistics on how the Futures Market have changed in the past 5 years. The market used to be 70% legitimate hedgers.
That's not our present world, though. Today roughly 30% of market participants on the New York Mercantile Exchange (NYMEX) are identifiable hedgers with a legitimate business purpose. That fact and a twenty-fold increase in capital flowing towards commodity futures during the past five years - growing at a rate of $1 billion in contracts per day - point to a remarkable shift in how futures prices get set, by virtue of who's around to set them.
Today the number of paper oil barrels traded daily on NYMEX (and that's just the most regulated exchange) is over three times the number of physical barrels consumed daily worldwide.
Supply and demand of the physical product, by and large, has remained fairly stable. In 2005, global oil production was 84.6 million barrels per day, and consumption was 83.6 million. Today, those numbers are 86.5 million and 86.4 million.
So supply and demand in actual oil is about equal, only 30% of the market are legitimate hedgers that need the market to protect their prices going forward, and billions of dollars of liquidity is chasing fewer barrels of actual oil. No wonder prices have tripled.
That's not our present world, though. Today roughly 30% of market participants on the New York Mercantile Exchange (NYMEX) are identifiable hedgers with a legitimate business purpose. That fact and a twenty-fold increase in capital flowing towards commodity futures during the past five years - growing at a rate of $1 billion in contracts per day - point to a remarkable shift in how futures prices get set, by virtue of who's around to set them.
Today the number of paper oil barrels traded daily on NYMEX (and that's just the most regulated exchange) is over three times the number of physical barrels consumed daily worldwide.
Supply and demand of the physical product, by and large, has remained fairly stable. In 2005, global oil production was 84.6 million barrels per day, and consumption was 83.6 million. Today, those numbers are 86.5 million and 86.4 million.
So supply and demand in actual oil is about equal, only 30% of the market are legitimate hedgers that need the market to protect their prices going forward, and billions of dollars of liquidity is chasing fewer barrels of actual oil. No wonder prices have tripled.
FED Rolls Out New Home Loan Rules
It seems like the FED shouldn't be doing this kind of thing. It seems to be something that Congress should be doing. I guess it deals with banks and lending so that is why they are the ones who are cracking down.
The plan, which will be voted on at a Fed board meeting on Monday, would apply to new loans made by thousands of lenders of all types, including banks and brokers.
Under the proposal unveiled last December, the rules would restrict lenders from penalizing risky borrowers who pay loans off early, require lenders to make sure these borrowers set aside money to pay for taxes and insurance and bar lenders from making loans without proof of a borrower's income. It also would prohibit lenders from engaging in a pattern or practice of lending without considering a borrower's ability to repay a home loan from sources other than the home's value.
The plan, which will be voted on at a Fed board meeting on Monday, would apply to new loans made by thousands of lenders of all types, including banks and brokers.
Under the proposal unveiled last December, the rules would restrict lenders from penalizing risky borrowers who pay loans off early, require lenders to make sure these borrowers set aside money to pay for taxes and insurance and bar lenders from making loans without proof of a borrower's income. It also would prohibit lenders from engaging in a pattern or practice of lending without considering a borrower's ability to repay a home loan from sources other than the home's value.
Monday, July 07, 2008
Case By Case Analysis of McCain's Economic Plan
First of all he needs to fix this section so that is isn't so damn long winded. I bet that I may be one of the few voters that is going to read through this whole mess. McCain should either use bullet points or separate things into distinct pages grouped by what he intends to do to fix the economy. For instance have something like "McCains Plan to Help With Higher Living Costs" with a click-through. In any case here is a breakdown:
1. Helping Americans Confront Higher Living Costs: He intends a gas tax holiday, stop filling the SPR, ending Ethanol subsidies, tariff barriers and sugar quotas drive up food prices and hurt Americans.
This seems like a pretty decent populous message but it is seems to be shooting pretty low when things really need to change. It kind of feels that the McCain camp has no idea of what government should do to confront higher living costs and just put some populous stuff up there and hoped for the best. We need nuclear plants, alternative energy, and shouldn't be using corn to power our cars. Nuff said.
2. Helping Americans With The Housing Crisis: Create a new HOME plan that allows Americans to trade in their home loan for a new FHA Home loan.
It sounds like a sound plan but the eligibility requirement seems pretty onerous though.
Holders of a non-conventional mortgage taken after 2005 who live in their home (primary residence only); can prove creditworthiness at the time of the original loan; are either delinquent, in arrears on payments, facing a reset or otherwise demonstrate that they will be unable to continue to meet their mortgage obligations; and can meet the terms of a new 30-year fixed-rate mortgage on the existing home.
So this person has to provide creditworthiness at the time of the loan? It would seem logical that quite a few people that took out a non-conventional loan in 2005-2007 did so because their credit was not good enough (or their income wasn't high enough) to qualify for that 30 year fixed rate loan. Or they just bought too much house and can't afford the payments. I guess these people lose their homes.
Also you have to wonder if this person was delinquent or facing a reset or whatever then they probably couldn't qualify for a new 30 year fixed rate mortgage since they now have a damaged credit rating. In any case he doesn't describe what would happen to a person who took out a loan that is over the FHA limit of $260K. Would this person get a partial refinance or how would that work?
3. Cutting Taxes For The Middle Class: McCain will repeal the AMT and double the personal exemption for dependants
Both things do not affect me so I really don't care either way. I know the Alternative Minimum Tax is dreaded by many upper middle class Americans (or even families with two wage earners) so that tax should be abolished. The other cut will put more money in the pockets of families and I guess that is a good thing.
4. Pro-Growth Tax Policy: He will keep taxes low on entrepreneurs, keep the current income and investment tax rates, get rid of estate tax, require a 3/5th majority to raise taxes, keep dividend and investment tax rates, allow companies to deduct the cost of equipment investment.
This seems pretty strait forward and would be what I would base quite a bit of my support on. I think something that is risky like collecting a capital gain should not be taxed at all. You might lose your entire investment if things turn sour or you aren't careful. Why does the government deserve a cut of my risk? I think something called the "death tax" needs to be repealed on general principal. While the 3/5 majority would work on paper but it seems like it would be unconstitutional. I think the deduct the equipment thing would be a great boon to some businesses and would encourage capital spending that might actually hasten a recovery.
5. Tax Cuts On American Employers: John McCain Will Reduce The Federal Corporate Tax Rate To 25 Percent From 35 Percent.
This may be a difficult row to hoe with all that anti-corporation rhetoric going on. Maybe tie this to a public works initiative. For instance if a company gives a certain certain percentage of their net income or products to charity then they would qualify for the lower rate. The Department of Human Services or some other agency would be in charge of seeing if the company qualifies for the so called "helpful corporations tax rate."
So for instance Eli Lilly gave away $ x-billion in free drugs to inner city clinics then they would get a 25% rate instead of a 35% rate. Make giving to charities a financial imperative that actually acts in the shareholders interest. Then corporate responsibility would translate directly into increasing the bottom line. Hell, the SEC could even put this into the 10Q with a line that had the amount and sizes of charitable acts that triggered the 25% tax rate.
6. Pro-Innovation Tax Cuts: McCain will ban internet taxes, prohibit new cellular phone taxes, and establish Permanent Tax Credit Equal To 10 Percent Of Wages Spent On R&D.
This seems like a pretty good idea but that last one seems kind of needlessly complicated to me. I guess it is for companies and should incentivize them to spend more on R&D. I'm not sure why it is based on wages and not total dollar expenditure. I guess it is to encourage companies to either pay their scientists more or perhaps increase R&D head count.
7. Retirement Tax Cut: John McCain Will Act To Lower Medicare Premiums.
Of course he doesn't say how he will pay for this. I guess though spending decreases or something.
8. A Real Choice For Simpler Taxes: It will give Americans the choice of staying under the old system or switching to a new system with two tax rates and a "generous" deduction.
This seems like a good idea but the IRS would have to build on another "simple system" tax arm in order to process a completely new type of tax form. Also would this system bring in less or more revenue? It will also crate a cottage industry of tax pundits advocating one plan over the other for a given tax payers financial situation.
9. Reforming Washington Eliminating Wasteful Spending: John McCain Will Stop Earmarks, Pork-Barrel Spending, And Waste.
This whole part should be in a totally different page and just linked to the main economic plan. They should also site some of the bills that McCain labels as pork and who issued them. I think McCain needs to hire some web people who know about ease of web-site usage.
Basically he wants an line-item veto so he can cut out the pork and reduce earmarks. However he doesn't provide a linked-to example on what he deems pork. I heartily applaud him for it but I'm not sure if a line-item veto is constitutional or not.
10. John McCain Has The Leadership And Courage To Make The Right Spending Choices. He will basically balance the budget.
This seems like a very laudable goal if he can actually achieve it. I however think that as long as we are fighting two hot wars in Iraq and Afghanistan we would have a hell of a time balancing anything with our economy going so slow. It was easy for Clinton to do because we had freed up that Cold War money and rode a massive tax boom due to the Internet Bubble. McCain has two hot wars, an economic downturn, the subprime mess, a banking mess, as well as insane gas prices killing consumer spending to worry about. Balancing the budget may be too much to ask.
11. Eliminate Broken Government Programs. The federal government itself admits that one in five programs do not perform.Reform Our Civil Service System To Promote Accountability And Good Performance In Our Federal Workforce. Eliminating Earmarks, Wasteful Subsidies And Pork-Barrel Spending. Reform Procurement Programs And Cut Wasteful Spending In Defense And Non-Defense Programs.
This seems like a good idea as well. However he talked about earmarks and cutting pork in issue 9 above. This is where he should put his actual plan for overhauling every agency that he deems "broken" (if he has a plan) and what concrete fixes he plans to make on those departments. Put it under the title of "The Government if Broken! I'm the Repairman! Here's what I'm going to do." with a picture of him rolling up his sleeves or perhaps wearing a tool belt.
12. Budgetary Reform To Give Tax Cuts A Fair Chance: John McCain Will Reform Budgeting To Treat Equally Spending And Taxes And To Stop Damaging Tax Hikes
A lot of funny double talk in this statement. I think this section should be rewritten because it seriously reads like gibberish. It seems to be something about reforming the budgeting process by taking tax cuts off of the books or something. It is just Beltway nonsense that regular Americans don't care about.
13. Reforming Entitlement Programs For The 21st Century: He will Reform Social Security, control Medicate Growth, Cut Prescription Drugs to the Rich.
This is basically private accounts which actually kicks massive ass. In fact I would love it if they poured my Social Security money directly into my 401K so I can manage it myself. There are no concrete plans to his Medicare reform it is just platitudes. He promises to do something about premiums rising so fast but doesn't say what. The prescription drug cut for rich dudes is a no brainer issue as well.
14. Promoting Trade and Competitiveness: John McCain Will Lower Barriers To Trade and make American workers more competitive:
He wants a strong dollar and a whole bunch of new trade deals to "even the global playing field." I just don't understand the Dems opposition to free trade sometimes. If you make a Colombian person richer you create a new consumer that will eat American Taco Bell, watch American DVDs, and shower with Axe Bodywash.
Of course that Colombian will be replacing a low skill job that could go to an American. But maybe that job could seriously help a third world person get out of a third world situation. Even a low skilled American worker has a better lot in life then many Colombians. I thought the Dems were all about helping the people of the world. I guess that was the JFK Democratic party.
Also McCains plans to make Americans more competitive seems like more platitudes and amounts to nothing concrete. If he had a plan to send every American that can't afford it to a trade school or get them a college degree then it would be an actual plan. However McCain just has some vague ideas on this.
15. Reforming The Unemployment Insurance (UI) System: John McCain Believes We Should Have A Single, Seamless Approach To Job Transition Assistance. John McCain Will Reform The UI System So That A Portion Of Each Worker's Unemployment Insurance Tax Is Deposited Into A Lost Earnings Buffer Account (LEB). John McCain Will Reform Training Programs To Provide Quick Assistance To Workers Seeking New Skills. John McCain Will Provide Special, Targeted Assistance For Older Workers.
Now this is some actual meat buried at the very end of this mountain of poorly presented ideas. This LEB seems like some kind of fallback account for people that lose their jobs and can actually be retained if they get another job quickly. Seems like a good idea but who is going to manage it?
I wonder how close this LEB will be to the 6 months of full pay that people say they need to have in liquid savings if you lose your job. In any case this will put a nice buffer in place for people that are living paycheck to paycheck so they don't have to worry about getting the axe. Too bad this great idea is buried at the end where noone is going to read it.
1. Helping Americans Confront Higher Living Costs: He intends a gas tax holiday, stop filling the SPR, ending Ethanol subsidies, tariff barriers and sugar quotas drive up food prices and hurt Americans.
This seems like a pretty decent populous message but it is seems to be shooting pretty low when things really need to change. It kind of feels that the McCain camp has no idea of what government should do to confront higher living costs and just put some populous stuff up there and hoped for the best. We need nuclear plants, alternative energy, and shouldn't be using corn to power our cars. Nuff said.
2. Helping Americans With The Housing Crisis: Create a new HOME plan that allows Americans to trade in their home loan for a new FHA Home loan.
It sounds like a sound plan but the eligibility requirement seems pretty onerous though.
Holders of a non-conventional mortgage taken after 2005 who live in their home (primary residence only); can prove creditworthiness at the time of the original loan; are either delinquent, in arrears on payments, facing a reset or otherwise demonstrate that they will be unable to continue to meet their mortgage obligations; and can meet the terms of a new 30-year fixed-rate mortgage on the existing home.
So this person has to provide creditworthiness at the time of the loan? It would seem logical that quite a few people that took out a non-conventional loan in 2005-2007 did so because their credit was not good enough (or their income wasn't high enough) to qualify for that 30 year fixed rate loan. Or they just bought too much house and can't afford the payments. I guess these people lose their homes.
Also you have to wonder if this person was delinquent or facing a reset or whatever then they probably couldn't qualify for a new 30 year fixed rate mortgage since they now have a damaged credit rating. In any case he doesn't describe what would happen to a person who took out a loan that is over the FHA limit of $260K. Would this person get a partial refinance or how would that work?
3. Cutting Taxes For The Middle Class: McCain will repeal the AMT and double the personal exemption for dependants
Both things do not affect me so I really don't care either way. I know the Alternative Minimum Tax is dreaded by many upper middle class Americans (or even families with two wage earners) so that tax should be abolished. The other cut will put more money in the pockets of families and I guess that is a good thing.
4. Pro-Growth Tax Policy: He will keep taxes low on entrepreneurs, keep the current income and investment tax rates, get rid of estate tax, require a 3/5th majority to raise taxes, keep dividend and investment tax rates, allow companies to deduct the cost of equipment investment.
This seems pretty strait forward and would be what I would base quite a bit of my support on. I think something that is risky like collecting a capital gain should not be taxed at all. You might lose your entire investment if things turn sour or you aren't careful. Why does the government deserve a cut of my risk? I think something called the "death tax" needs to be repealed on general principal. While the 3/5 majority would work on paper but it seems like it would be unconstitutional. I think the deduct the equipment thing would be a great boon to some businesses and would encourage capital spending that might actually hasten a recovery.
5. Tax Cuts On American Employers: John McCain Will Reduce The Federal Corporate Tax Rate To 25 Percent From 35 Percent.
This may be a difficult row to hoe with all that anti-corporation rhetoric going on. Maybe tie this to a public works initiative. For instance if a company gives a certain certain percentage of their net income or products to charity then they would qualify for the lower rate. The Department of Human Services or some other agency would be in charge of seeing if the company qualifies for the so called "helpful corporations tax rate."
So for instance Eli Lilly gave away $ x-billion in free drugs to inner city clinics then they would get a 25% rate instead of a 35% rate. Make giving to charities a financial imperative that actually acts in the shareholders interest. Then corporate responsibility would translate directly into increasing the bottom line. Hell, the SEC could even put this into the 10Q with a line that had the amount and sizes of charitable acts that triggered the 25% tax rate.
6. Pro-Innovation Tax Cuts: McCain will ban internet taxes, prohibit new cellular phone taxes, and establish Permanent Tax Credit Equal To 10 Percent Of Wages Spent On R&D.
This seems like a pretty good idea but that last one seems kind of needlessly complicated to me. I guess it is for companies and should incentivize them to spend more on R&D. I'm not sure why it is based on wages and not total dollar expenditure. I guess it is to encourage companies to either pay their scientists more or perhaps increase R&D head count.
7. Retirement Tax Cut: John McCain Will Act To Lower Medicare Premiums.
Of course he doesn't say how he will pay for this. I guess though spending decreases or something.
8. A Real Choice For Simpler Taxes: It will give Americans the choice of staying under the old system or switching to a new system with two tax rates and a "generous" deduction.
This seems like a good idea but the IRS would have to build on another "simple system" tax arm in order to process a completely new type of tax form. Also would this system bring in less or more revenue? It will also crate a cottage industry of tax pundits advocating one plan over the other for a given tax payers financial situation.
9. Reforming Washington Eliminating Wasteful Spending: John McCain Will Stop Earmarks, Pork-Barrel Spending, And Waste.
This whole part should be in a totally different page and just linked to the main economic plan. They should also site some of the bills that McCain labels as pork and who issued them. I think McCain needs to hire some web people who know about ease of web-site usage.
Basically he wants an line-item veto so he can cut out the pork and reduce earmarks. However he doesn't provide a linked-to example on what he deems pork. I heartily applaud him for it but I'm not sure if a line-item veto is constitutional or not.
10. John McCain Has The Leadership And Courage To Make The Right Spending Choices. He will basically balance the budget.
This seems like a very laudable goal if he can actually achieve it. I however think that as long as we are fighting two hot wars in Iraq and Afghanistan we would have a hell of a time balancing anything with our economy going so slow. It was easy for Clinton to do because we had freed up that Cold War money and rode a massive tax boom due to the Internet Bubble. McCain has two hot wars, an economic downturn, the subprime mess, a banking mess, as well as insane gas prices killing consumer spending to worry about. Balancing the budget may be too much to ask.
11. Eliminate Broken Government Programs. The federal government itself admits that one in five programs do not perform.Reform Our Civil Service System To Promote Accountability And Good Performance In Our Federal Workforce. Eliminating Earmarks, Wasteful Subsidies And Pork-Barrel Spending. Reform Procurement Programs And Cut Wasteful Spending In Defense And Non-Defense Programs.
This seems like a good idea as well. However he talked about earmarks and cutting pork in issue 9 above. This is where he should put his actual plan for overhauling every agency that he deems "broken" (if he has a plan) and what concrete fixes he plans to make on those departments. Put it under the title of "The Government if Broken! I'm the Repairman! Here's what I'm going to do." with a picture of him rolling up his sleeves or perhaps wearing a tool belt.
12. Budgetary Reform To Give Tax Cuts A Fair Chance: John McCain Will Reform Budgeting To Treat Equally Spending And Taxes And To Stop Damaging Tax Hikes
A lot of funny double talk in this statement. I think this section should be rewritten because it seriously reads like gibberish. It seems to be something about reforming the budgeting process by taking tax cuts off of the books or something. It is just Beltway nonsense that regular Americans don't care about.
13. Reforming Entitlement Programs For The 21st Century: He will Reform Social Security, control Medicate Growth, Cut Prescription Drugs to the Rich.
This is basically private accounts which actually kicks massive ass. In fact I would love it if they poured my Social Security money directly into my 401K so I can manage it myself. There are no concrete plans to his Medicare reform it is just platitudes. He promises to do something about premiums rising so fast but doesn't say what. The prescription drug cut for rich dudes is a no brainer issue as well.
14. Promoting Trade and Competitiveness: John McCain Will Lower Barriers To Trade and make American workers more competitive:
He wants a strong dollar and a whole bunch of new trade deals to "even the global playing field." I just don't understand the Dems opposition to free trade sometimes. If you make a Colombian person richer you create a new consumer that will eat American Taco Bell, watch American DVDs, and shower with Axe Bodywash.
Of course that Colombian will be replacing a low skill job that could go to an American. But maybe that job could seriously help a third world person get out of a third world situation. Even a low skilled American worker has a better lot in life then many Colombians. I thought the Dems were all about helping the people of the world. I guess that was the JFK Democratic party.
Also McCains plans to make Americans more competitive seems like more platitudes and amounts to nothing concrete. If he had a plan to send every American that can't afford it to a trade school or get them a college degree then it would be an actual plan. However McCain just has some vague ideas on this.
15. Reforming The Unemployment Insurance (UI) System: John McCain Believes We Should Have A Single, Seamless Approach To Job Transition Assistance. John McCain Will Reform The UI System So That A Portion Of Each Worker's Unemployment Insurance Tax Is Deposited Into A Lost Earnings Buffer Account (LEB). John McCain Will Reform Training Programs To Provide Quick Assistance To Workers Seeking New Skills. John McCain Will Provide Special, Targeted Assistance For Older Workers.
Now this is some actual meat buried at the very end of this mountain of poorly presented ideas. This LEB seems like some kind of fallback account for people that lose their jobs and can actually be retained if they get another job quickly. Seems like a good idea but who is going to manage it?
I wonder how close this LEB will be to the 6 months of full pay that people say they need to have in liquid savings if you lose your job. In any case this will put a nice buffer in place for people that are living paycheck to paycheck so they don't have to worry about getting the axe. Too bad this great idea is buried at the end where noone is going to read it.
Red Sox Fan Attacks Person with New York License with Bat
I think Red Sox fans need to hang their head in shame over this incident.
A man was ordered held without bail Monday for allegedly beating a New York man with a baseball bat because he thought the man was a Yankees fan.
As it turned out, the New Yorker allegedly beaten in the land of the Red Sox isn't even a big baseball fan.
Police say Robert Correia, 20, and others spotted a car with New York license plates leaving a fireworks display Friday. The group approached the car and began yelling about the Yankees, according to the police report.
Yes, this animal hit another man with a baseball bat because he "thought" he was a Yankees fan. So it would have been possible that some hapless person from New York could have been killed by a deranged Boston fan just because he was a fan of another team.
I think certain members of the Red Sox Nation have an inferiority complex is so they have to resort to violence in order to make themselves feel better. And the saddest part is the guy had to use a deadly weapon. He couldn't have fought the New Yorker man-to-man. He had to run away and get a bat like a loser. I guess 86 years of futility just does that to a person.
A man was ordered held without bail Monday for allegedly beating a New York man with a baseball bat because he thought the man was a Yankees fan.
As it turned out, the New Yorker allegedly beaten in the land of the Red Sox isn't even a big baseball fan.
Police say Robert Correia, 20, and others spotted a car with New York license plates leaving a fireworks display Friday. The group approached the car and began yelling about the Yankees, according to the police report.
Yes, this animal hit another man with a baseball bat because he "thought" he was a Yankees fan. So it would have been possible that some hapless person from New York could have been killed by a deranged Boston fan just because he was a fan of another team.
I think certain members of the Red Sox Nation have an inferiority complex is so they have to resort to violence in order to make themselves feel better. And the saddest part is the guy had to use a deadly weapon. He couldn't have fought the New Yorker man-to-man. He had to run away and get a bat like a loser. I guess 86 years of futility just does that to a person.
Thursday, July 03, 2008
What Iran Might Do If it comes to War
Hmm this is a very sobering piece if you are up on Iran's possible showdown with the West and all the sabre rattling by Israel.
Tehran will be betting on the following as a plan to avoid the toppling of their regime:
First, the declared and internationally to-be-accepted objective of an Israeli/American strike is to stop Iran from going nuclear, much like the declared objective of Desert Storm was to liberate Kuwait. Toppling regimes is something that coalitions weren’t supportive of in 1991 and won’t support in the coming war.
Second, Iran has mastered the ways of guerrilla war. They may be justified in their belief that if their surrogates in Lebanon and Iraq can continue to survive Israel’s attacks or disrupt post-invasion efforts, then their own similarly trained forces in the IRGC would be able to perform even more spectacularly. The chaos could be multiplied if accompanied by simultaneous escalations against U.S. forces in Iraq and against Israel.
If I was Iran I would try for a 3rd option. Stall for time in any way that they could. They can game the West and try to comply at first while keeping the nuclear program in place as long as they can. Then when Obama wins the Presidency Iran would walk away from the table and count on the US keeping Israel in check.
If Israel goes it alone and bombs Iran's nuclear facilities then Iran would have free hand to strike back, escalate the war by attacking American interests in Iraq, strike Israel through surrogates in Lebanon or anything else they would please. They would have command of the field.
So if Obama sells out Israel (which I unfortunately think will happen) then Iran would keep their regime and possibly have a huge propaganda and maybe even a military victory. I could be wrong and Obama could be like Woodrow Wilson once America was committed to WWI. He did everything he could to win the war and maybe Obama will follow his example. So far, however I seriously doubt it.
Tehran will be betting on the following as a plan to avoid the toppling of their regime:
First, the declared and internationally to-be-accepted objective of an Israeli/American strike is to stop Iran from going nuclear, much like the declared objective of Desert Storm was to liberate Kuwait. Toppling regimes is something that coalitions weren’t supportive of in 1991 and won’t support in the coming war.
Second, Iran has mastered the ways of guerrilla war. They may be justified in their belief that if their surrogates in Lebanon and Iraq can continue to survive Israel’s attacks or disrupt post-invasion efforts, then their own similarly trained forces in the IRGC would be able to perform even more spectacularly. The chaos could be multiplied if accompanied by simultaneous escalations against U.S. forces in Iraq and against Israel.
If I was Iran I would try for a 3rd option. Stall for time in any way that they could. They can game the West and try to comply at first while keeping the nuclear program in place as long as they can. Then when Obama wins the Presidency Iran would walk away from the table and count on the US keeping Israel in check.
If Israel goes it alone and bombs Iran's nuclear facilities then Iran would have free hand to strike back, escalate the war by attacking American interests in Iraq, strike Israel through surrogates in Lebanon or anything else they would please. They would have command of the field.
So if Obama sells out Israel (which I unfortunately think will happen) then Iran would keep their regime and possibly have a huge propaganda and maybe even a military victory. I could be wrong and Obama could be like Woodrow Wilson once America was committed to WWI. He did everything he could to win the war and maybe Obama will follow his example. So far, however I seriously doubt it.
Obama on Iraq: At least he'll listen to generals first
I guess that 16 month BS is actually subject to some kind of change depending on what his generals tell him.
"Let me be as clear as I can be. I intend to end this war. My first day in office I will bring the joint chiefs of staff in and I will give them a new mission and that is to end this war," Obama told reporters in his second news conference.
But he added: "I would be a poor commander in chief if I didn't take facts on the ground into account."
So if the generals tell him that they can't possibly pull out in 16 months and not leave chaos behind them then he will "take the facts into account." At least then heading for the exits in 2007. Here he is dumping on the Surge which has been a great success despite his partys objection to it.
"While some have proposed escalating this war by adding thousands of more troops, there is little reason to believe that this will achieve [victory]," Obama said.
"It's not clear that these troop levels are sustainable for a significant period of time, and according to our commanders on the ground, adding American forces will only relieve the Iraqis from doing more on their own."
Again Obama is wrong on the Surge but he might actually get a withdraw with a victory instead of cutting out when the going gets tough.
"Let me be as clear as I can be. I intend to end this war. My first day in office I will bring the joint chiefs of staff in and I will give them a new mission and that is to end this war," Obama told reporters in his second news conference.
But he added: "I would be a poor commander in chief if I didn't take facts on the ground into account."
So if the generals tell him that they can't possibly pull out in 16 months and not leave chaos behind them then he will "take the facts into account." At least then heading for the exits in 2007. Here he is dumping on the Surge which has been a great success despite his partys objection to it.
"While some have proposed escalating this war by adding thousands of more troops, there is little reason to believe that this will achieve [victory]," Obama said.
"It's not clear that these troop levels are sustainable for a significant period of time, and according to our commanders on the ground, adding American forces will only relieve the Iraqis from doing more on their own."
Again Obama is wrong on the Surge but he might actually get a withdraw with a victory instead of cutting out when the going gets tough.
Wednesday, July 02, 2008
Oil Supply Report: More Tail Wagging the Dog
Here we go again with spotty reasoning of why oil prices are going up.
The EIA said crude stocks fell by 2 million barrels last week. Analysts were looking for a drop of 1.2 million barrels according to a poll by energy research firm Platts.
Distillates, used to make diesel fuel, jet fuel and heating oil, rose by 1.3 million barrels while gasoline supplies rose by 2.1 million barrels. Analysts were looking for an increase of 2.4 million barrels in distillates supplies and a decline of 500,000 barrels in gasoline stockpiles.
So the supply of things that oil is made from goes up due to demand destruction but the amount of actual oil barrels goes down. So this sent the price up? Supposedly the oil itself isn't worth anything unless you turn it into gas or distillates. The reason why there is lower crude stocks is because it is so damn expensive and refiners aren't loading up on it. Some are actually reducing utilization since crack-spreads are so junk now.
I think alot of this oil supply drops are simply due to refiners not buying as much oil since the demand for the gas they make with the oil is out of is going down. Why would any refiner in their right mind pay to stockpile $143 oil?
However the idea that lots of traders are going long before the 3 day weekend and the ECB raising interest rates (and any potential hawkish statements that they could issue) makes much more sense to me. Now if there was a hurricane building in the Gulf of Mexico oil would that $170 a barrel that OPEC wants in two days.
The EIA said crude stocks fell by 2 million barrels last week. Analysts were looking for a drop of 1.2 million barrels according to a poll by energy research firm Platts.
Distillates, used to make diesel fuel, jet fuel and heating oil, rose by 1.3 million barrels while gasoline supplies rose by 2.1 million barrels. Analysts were looking for an increase of 2.4 million barrels in distillates supplies and a decline of 500,000 barrels in gasoline stockpiles.
So the supply of things that oil is made from goes up due to demand destruction but the amount of actual oil barrels goes down. So this sent the price up? Supposedly the oil itself isn't worth anything unless you turn it into gas or distillates. The reason why there is lower crude stocks is because it is so damn expensive and refiners aren't loading up on it. Some are actually reducing utilization since crack-spreads are so junk now.
I think alot of this oil supply drops are simply due to refiners not buying as much oil since the demand for the gas they make with the oil is out of is going down. Why would any refiner in their right mind pay to stockpile $143 oil?
However the idea that lots of traders are going long before the 3 day weekend and the ECB raising interest rates (and any potential hawkish statements that they could issue) makes much more sense to me. Now if there was a hurricane building in the Gulf of Mexico oil would that $170 a barrel that OPEC wants in two days.
The Obama Market Correction?
I was watching CNBC this morning while getting ready for work and they had these two talking heads on from the Obama and McCain camps. One of them brought up a very interesting point. Could the fact that Obama clinched the Democratic nod and McCains relative weakness going forward be the cause for this recent market to sell off?
The guy said that the market is pricing in the cost of an Obama victory and what he will do to our economy. Lets see, Obama announced victory on June 3rd and the S&P was at 1377.66 and oil prices were at $124.46. Currently the S&P500 is at 1261.52 and oil is at $143.57 a barrel. So that is nearly the 10% decline that we would need for a classic correction.
Of course you will say that the market dropped due to oil being 143.57 and you would probably be right. However you could make an argument that the market is pricing in an Obama tax and spend policy that would probably have us in a full scale depression by 2009. No government has ever taxed their way out of an economic downturn. In fact the Great Depression was made even worse due to Hoover increasing taxes.
Also oil prices might be going through the roof because an Obama White House will not increase domestic supply. In fact Obama may be suspected of caving in to environmentalists who would love to see gas go to $5 or $8 a gallon in order to shut down world growth. He already wants to impose the failed Carter era Windfall Profits tax that would simply be a way to raise taxes on domestic oil production and constrain further exploration. In fact many people are saying that Obama is running for Carters second term complete with oil shock and stagflation. Too bad Obama doesn't have a crazy redneck brother like Billy Carter to cheer up the nation.
You can also make the leap that some of the "lets bomb Iran" rhetoric coming from Israel is because they are afraid of an Obama White House. In fact Obama talks about being buddy-buddy with the Mullahs in his so-called "meetings without preconditions." Maybe the Israelis are afraid the US will give up the farm to the Mullahs and not back up Israel when they are staring down possible annihilation.
So you can make the argument that Israel needs to get rid of the Iranian nuclear program while they still have Bush in the White House. I mean Bush stood by and let Israel attack southern Lebanon even though it was a terrible failure. In fact we would probably support an Israeli strike covertly with satellite photos and the like. But Obama might not.
They might think that with Obama in the White House Iran will go nuclear no matter what "pressure" the world communtiy puts on them. There is no way that Israelis will live under the threat of nuclear annihilation. So they need to strike while they still have an ally in the US who will not constrain their range of action.
Maybe they think an Obama White House (unlike a Hillary White House) would stand idly by and let Tel Aviv disappear in a mushroom cloud before he does anything. I mean Obama has anti-Israel people as advisers, wants to sit down with Israel's enemies, and even wants to enrich those same enemies with high oil prices. How can Israel trust the guy enough to stop them from being nuked?
So tensions between Israel and Iran are ratcheting up before Bush leaves and as a consequence oil goes to $143.57 from $124.46. So the investing gameplan for an Obama Presidency might mean staying long gold and oil while shorting almost everything else.
The guy said that the market is pricing in the cost of an Obama victory and what he will do to our economy. Lets see, Obama announced victory on June 3rd and the S&P was at 1377.66 and oil prices were at $124.46. Currently the S&P500 is at 1261.52 and oil is at $143.57 a barrel. So that is nearly the 10% decline that we would need for a classic correction.
Of course you will say that the market dropped due to oil being 143.57 and you would probably be right. However you could make an argument that the market is pricing in an Obama tax and spend policy that would probably have us in a full scale depression by 2009. No government has ever taxed their way out of an economic downturn. In fact the Great Depression was made even worse due to Hoover increasing taxes.
Also oil prices might be going through the roof because an Obama White House will not increase domestic supply. In fact Obama may be suspected of caving in to environmentalists who would love to see gas go to $5 or $8 a gallon in order to shut down world growth. He already wants to impose the failed Carter era Windfall Profits tax that would simply be a way to raise taxes on domestic oil production and constrain further exploration. In fact many people are saying that Obama is running for Carters second term complete with oil shock and stagflation. Too bad Obama doesn't have a crazy redneck brother like Billy Carter to cheer up the nation.
You can also make the leap that some of the "lets bomb Iran" rhetoric coming from Israel is because they are afraid of an Obama White House. In fact Obama talks about being buddy-buddy with the Mullahs in his so-called "meetings without preconditions." Maybe the Israelis are afraid the US will give up the farm to the Mullahs and not back up Israel when they are staring down possible annihilation.
So you can make the argument that Israel needs to get rid of the Iranian nuclear program while they still have Bush in the White House. I mean Bush stood by and let Israel attack southern Lebanon even though it was a terrible failure. In fact we would probably support an Israeli strike covertly with satellite photos and the like. But Obama might not.
They might think that with Obama in the White House Iran will go nuclear no matter what "pressure" the world communtiy puts on them. There is no way that Israelis will live under the threat of nuclear annihilation. So they need to strike while they still have an ally in the US who will not constrain their range of action.
Maybe they think an Obama White House (unlike a Hillary White House) would stand idly by and let Tel Aviv disappear in a mushroom cloud before he does anything. I mean Obama has anti-Israel people as advisers, wants to sit down with Israel's enemies, and even wants to enrich those same enemies with high oil prices. How can Israel trust the guy enough to stop them from being nuked?
So tensions between Israel and Iran are ratcheting up before Bush leaves and as a consequence oil goes to $143.57 from $124.46. So the investing gameplan for an Obama Presidency might mean staying long gold and oil while shorting almost everything else.
Tuesday, July 01, 2008
Airlines as a Contrarian Play? GOL Looks good.
I seem to think so since many airlines are trading at pennies on the dollar. This article points out some information about the oil bubble and what stocks will recover off of it bursting.
If oil prices decline, as I expect them to, then input costs for all carriers will decline markedly, if even for just several months. There is certainly enough room to juice this speculation for at least a quick 35% to 50% profit, possibly more. Plus, add some dividends into the picture, profitable earnings, and a big bear market rally and you should hit a home-run in airlines before December.
I agree with this assessment since people still need to fly for business and other reasons. They certainly won't be driving with $4.00 gas so flying may actually be cheaper to some people. I just love stocks that have been beaten up and are badmouthed by just about everyone. You just have to make sure that they don't go bankrupt while you wait for the bubble to burst.
One airline that looks good is GOL Linhas Areas Inteligentes S.A. (GOL) which is a Brazilian Regional Airline. They currently have a 78 aircraft fleet and fly to 59 destinations mostly in Brazil and its neighbors. With Brazil's recent potentially massive oil wealth from their Tupi field we may be seeing less crushing poverty and more middle class and affluent people who would have the means and the ability to fly.
So we could have incredible growth out of regional carriers like we saw from China a few years ago. Some Chinese airlines were 8 to 10 baggers before high jet fuel beat the crap out of them. So stocks like GOL could now be purchased at discounted rates so you get margin of safety in spades. This stock is trading at its 52 week low. The best part is that GOL pays a pretty decent 4% dividend as well. So you will get paid to wait out high oil prices.
If oil prices decline, as I expect them to, then input costs for all carriers will decline markedly, if even for just several months. There is certainly enough room to juice this speculation for at least a quick 35% to 50% profit, possibly more. Plus, add some dividends into the picture, profitable earnings, and a big bear market rally and you should hit a home-run in airlines before December.
I agree with this assessment since people still need to fly for business and other reasons. They certainly won't be driving with $4.00 gas so flying may actually be cheaper to some people. I just love stocks that have been beaten up and are badmouthed by just about everyone. You just have to make sure that they don't go bankrupt while you wait for the bubble to burst.
One airline that looks good is GOL Linhas Areas Inteligentes S.A. (GOL) which is a Brazilian Regional Airline. They currently have a 78 aircraft fleet and fly to 59 destinations mostly in Brazil and its neighbors. With Brazil's recent potentially massive oil wealth from their Tupi field we may be seeing less crushing poverty and more middle class and affluent people who would have the means and the ability to fly.
So we could have incredible growth out of regional carriers like we saw from China a few years ago. Some Chinese airlines were 8 to 10 baggers before high jet fuel beat the crap out of them. So stocks like GOL could now be purchased at discounted rates so you get margin of safety in spades. This stock is trading at its 52 week low. The best part is that GOL pays a pretty decent 4% dividend as well. So you will get paid to wait out high oil prices.
America is 16th Happiest: Blame the Boomers?
That is according to this recent study:
Denmark is the happiest nation and Zimbabwe the the most glum, he found. (Zimbabwe's longtime ruler Robert Mugabe was sworn in as president for a sixth term Sunday after a widely discredited runoff in which he was the only candidate. Observers said the runoff was marred by violence and intimidation.)
It seems that one of the reasons why we are stuck in 16th is because of baby boomer angst.
A survey released last week found one reason America doesn't top the list: Baby Boomers are generally miserable compared to other generations. Further, a public opinion poll released by the Pew Research Center in April found that 81 percent of Americans say they believe the country is on the "wrong track." The response is the most negative in the 25 years pollsters have asked the question.
You know why they are miserable? The universe no longer revolves around them. Of course America is on the "wrong track" whatever that means, because they are no longer the center of attention in the world. Their music is no longer relevant, their candidate (Hillary) was soundly defeated, hardly anyone cares about their old war and peace movements (Vietnam,) and race warfare is almost a dead issue.
Obama represents the first post boom leader and he is always talking about not fighting their fights or engaging in their debased form of party warfare. He still engaged in their class warfare though but that is the liberal in him. I think this Baby Boomer sudden irrelevance is why Obama being friends with a former Weather Underground terrorist doesn't resonate with anyone at all.
Denmark is the happiest nation and Zimbabwe the the most glum, he found. (Zimbabwe's longtime ruler Robert Mugabe was sworn in as president for a sixth term Sunday after a widely discredited runoff in which he was the only candidate. Observers said the runoff was marred by violence and intimidation.)
It seems that one of the reasons why we are stuck in 16th is because of baby boomer angst.
A survey released last week found one reason America doesn't top the list: Baby Boomers are generally miserable compared to other generations. Further, a public opinion poll released by the Pew Research Center in April found that 81 percent of Americans say they believe the country is on the "wrong track." The response is the most negative in the 25 years pollsters have asked the question.
You know why they are miserable? The universe no longer revolves around them. Of course America is on the "wrong track" whatever that means, because they are no longer the center of attention in the world. Their music is no longer relevant, their candidate (Hillary) was soundly defeated, hardly anyone cares about their old war and peace movements (Vietnam,) and race warfare is almost a dead issue.
Obama represents the first post boom leader and he is always talking about not fighting their fights or engaging in their debased form of party warfare. He still engaged in their class warfare though but that is the liberal in him. I think this Baby Boomer sudden irrelevance is why Obama being friends with a former Weather Underground terrorist doesn't resonate with anyone at all.
Obama Introduces Faith Based Initiative
Too bad this guy is such a tax and spend liberal who is going to send this country into a second Great Depression with his wet-behind the ears, raise taxes, steal from the oil companies, economic policy. He has some very good points as well. In fact he is actually tacking toward the political right in this faith based initiative he is introducing.
He would increase spending on social services, starting with a $500 million-a-year program to keep 1 million poor children up to speed on their studies over the summers. He would increase training for charities applying for funding and make it a grass-roots effort. He would elevate the program to be "a critical part of my administration," a reference to criticism that Bush paid barely more than lip service to his effort.
Obama also chose a different emphasis for why religious charities are an important answer to solving poverty and other social problems: because they better know the people who are hurting, instead of Bush's argument that religion itself is a transforming power the government must not be afraid to harness.
He is 100% right. A church is actually part of the community so they know who is hurting and who would need the most extra food or tutoring or whatever. They usually have a much better dollar to helping people ratio then some faceless aid group from California with 40% overhead. Plus, they don't give just out of the kindness of their own heart but as a commandment from God.
He would increase spending on social services, starting with a $500 million-a-year program to keep 1 million poor children up to speed on their studies over the summers. He would increase training for charities applying for funding and make it a grass-roots effort. He would elevate the program to be "a critical part of my administration," a reference to criticism that Bush paid barely more than lip service to his effort.
Obama also chose a different emphasis for why religious charities are an important answer to solving poverty and other social problems: because they better know the people who are hurting, instead of Bush's argument that religion itself is a transforming power the government must not be afraid to harness.
He is 100% right. A church is actually part of the community so they know who is hurting and who would need the most extra food or tutoring or whatever. They usually have a much better dollar to helping people ratio then some faceless aid group from California with 40% overhead. Plus, they don't give just out of the kindness of their own heart but as a commandment from God.
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