More Money than Iraq

With a stroke of a pen, Obama has spent more money in less than a month than the entire Iraq war cost. For what it's worth.

UFBF: Bernie Madoff

I mean, really.

This is the Alternate Universe

Is that not true? Could you imagine that we are in anything like a universe that makes sense?

Masters of the Universe lend big money to field-hands to buy overpriced housing.

Bernie Madoff "Made off" with $50 Billion in a twenty year Ponzi scheme.

Car sales are 2/3 of what they were a year ago.

Gasoline goes from $4.30 per gallon to $1.75 in less than six months (and oil from $150/bbl to less than $40 in the same time frame). And can go down to a buck soon.

Daily three-digit DOW swings up and down.

The Fed/Government running printing presses like they were in Zimbabwe.

The governor of Illinois selling Obama's senate seat to the highest bidder -- and this is the second governor in a row that ends up being a crook.

Housing values falling 30% in a year.

Democrats stealing elections in Minnesota.

401Ks down by 1/2.

There is a book by Frederic Brown called "What Mad Universe" in which a pulp sci-fi mag editor wakes up in a world invented/imagined by one of his teen-aged fans. Frederic Brown is one of my favorite authors, and for a while, this book was my favorite book. I love the idea of parallel universes and alternate planes, and this book treats the concept wonderfully, and with humor. The world is almost the same, except with addition of what a teen-aged boy's concept of the Ideal would be -- all women dressed like bomb-shells, regular rocket ships to the moon, villainous circumstances to overcome.

I feel like we entered this alternate universe, only except for being dreamed up by a teenager, it has been dreamed up by extremely greedy and/or stupid people. Teenagers grow up. Unfortunately, this is not always true of the stupid and greedy.

UFBF File -- $700 Billion

What percentage of the population do you think knows what the problem really is? I am reasonably intelligent, and it is very tough to figure out why we are in a crisis, what exactly the crisis is, and how come if the crisis is so near we aren't seeing breadlines and brokers jumping out of windows.

The problem with leverage is that it levers both ways. When one dollar of real estate, say, is propping up $100 borrowed to play the market, and that real estate is now worth 80 cents, or 70 cents, or 50 cents, you are now only allowed to borrow $80, $70, or $50. If you can't pay back the $20, $30 or $50 difference when the lender asks for it... Margin call, and big problems! This is especially true when you have no idea how much that dollar declined to -- is it only 50 cents? Could be zero! Let's pull the plug and call all the funds!

The problems are: 1. these guys bought real estate mortgages as securities and actually believed the seller that the real estate backing them up was sound, and 2. they then borrowed tons of money against these "securities" to buy other securities, many of which had the same problem.

That, to me, is a basic understanding of the problem. The bailout is being sold as a way to stabilize the value of these bad securities -- to actually put a value on them, so that instead of not knowing if the $1 in real estate is now 80, 70, 50, or 0 cents, because no one is buying them, the government will buy them at one of these numbers, thereby fixing the value, at least for the bank, and letting the bank take its hit and move on. The government thinks that $700 Million will cover it.

What happens if the gov't does not do this? Personally, I think it will be a deflation, or depression, and it will take years to recover, as these unstable "assets" are defrayed and the level sets to their real value. Or, it could be a hyper-inflation to cover the effects of the depression.

It will be hard to borrow money. Might be hard to make money since it will be harder for companies to borrow to grow, or even to get investment money. It is hard for me to envision.

Is $700 Million enough? I don't know. Did you know there are over 60 T-T-T-Trillion dollars of insurance written in credit default swaps? Unf-ing believable.

How the hell did this happen? Greed and stupidity. Actually, if you recounted the seven deadly sins, every since one of them were indulged in by those that were parties to this, and it is not just the banks or brokers. Those that borrowed 100% for adjustable interest-only mortgages, those that bought houses on "spec" to "flip" at some insane increase of value (the bigger sucker principal). People without jobs or prospects buying houses based on a belief in magic that they will be able to pay them back (or sell the house for some insane return in the next week or two). Real estate pros who were incented to sell as high as possible to get their 6% commissons. Mortgage brokers who were incented by big closing fees to close the deal. Home lenders like Countrywide who bought these mortgages without doing due dilligence (they call it due dilligence for a reason!). Wall street who packaged all these mortgages into "securities" and sold them to investors who, again, did not do due dilligence on these component loans.

I saw the end of the bubble years ago. I knew it would be bad, but I suspected something like the early '90s where some people were hit bad by it, but we all lived. I had no idea that it would result in this.

Samuel Whittemore, from 1775

I was cleaning out my office and papers over the weekend, and came across a card that I wrote about eleven years ago. I was working in the Boston area, and in the evenings I liked to explore around.

I always had a passion for the American revolution. Growing up near Philadelphia only made it easier to indulge in a subject that already suited my anti-tyranical and libertarian leanings.

One night I was walking in Arlington, Massachusetts. Arlington is one of the small towns just outside Boston, near Lexington, Concord, and other towns that collectively were the birthplace of the American Revolution.

I walked by a park, and noticed a stone monument. It read:

"Samuel Whittemore, then eighty years old, killed three British soldiers, April 19, 1775. He was shot, bayoneted, beaten, and left for dead, but recovered, and lived to be ninety-eight years of age."

After reading, I couldn't help but blurt out aloud: "Now that's a Man!"

It's these things that capture my imagination. Think about it: Here is a man, eighty years old in 1775. Eighty. 1775. What does that mean in those days? No walkers. No Meals on Wheels. Wooden teeth, if any at all. No Lipitor or Geritol. If you were sick, they bled you or gave you some other Ungodly "treatment." No antibiotics. No ice! No knowledge of clean hands before surgery, nor of using any kind of antiseptics -- "antiseptic" was not even a word. He was shot. Beaten. Bayoneted! And lived. My God. He died at ninety-eight! I want his genes!

On top of that, I had this picture in my head of an old fart with a trusty flint-lock taking aim those red-coated soldiers, muttering as he was firing "take that, you British bastards! Get the hell off of my land!" I could hear him say after the last bayonet jabbed him "it's only a flesh wound! Come back here you cowards!"

If you put this guy in a movie, no one would believe it. What a man!

As I started this post, I decided to Google him -- and what a story. Turns out he was the oldest combatant in the Revolutionary War. April 19, 1775 was the first day of the Revolution -- the shot heard round the world was shot that morning in Concord.

You know, it is important to remember that this country is not here by accident, that it took a lot of guts and blood to establish the USA and keep it here. The US has had many faults and sins, but they are faults and sins against a standard no other country even advocates, let alone adheres to. When we had slavery, we also had the Declaration of Independence, which states that all men are created equal. The lofty idealism of the Declaration beat out the base cruelty of slavery. There are people and interests from across the political spectrum that take shots at the Constitution, from universities enacting speech codes to cities enacting gun control to presidents suspending habeas corpus. Despite the onslaught, the rights remain, because they are so ingrained in our collective psyche as Americans and because we are diligent about pointing out and eradicating transgressions against them. So here's Sam Whittemore, at the dawn of our country, showing what it took to get it done and get this standard established. We need to keep that in mind.

Quotation from my Wife

"With self-improvement there is forward movement."

Shades of Jesse Jackson-style rhyming, but so true.

The Way to Tech Nirvana

RTFM
FFIO

That's it.