Past Performance Does Not Gaurantee Future Results

Worst Case Scenerio

2009-05-05T01:36:00.003-04:00

A good article on what could happen if the recession continues to drag on has been posted over on Seeking Alpha. While the recent market rebound has lulled many into a false sense of security, I suggest that we are far from being out of the woods.

Remember, Help is Just a Phone Call Away...

2009-05-05T01:24:00.001-04:00

Jon Stewart Shows His Ignorance...

2009-05-03T20:45:00.003-04:00

I like to consider my fairly well schooled on WWII history, so I really have a difficult time comprehending what Jon Stewart was thinking when he suggested that Harry Truman was a war criminal for dropping the bomb, but Bill Whittle does a much better job explaining why Jon Stewart is a complete idiot than I could...

Nationwide Job Losses

2009-04-30T03:10:00.002-04:00

A dramatic month by month detail of nationwide job losses can be found here at slate. Wow.

Hope and Change - Police Departments Getting Armored Vehicles

2009-04-26T04:22:00.005-04:00

It seems that behind the scenes in the era of hope and change, US Police Departments across America are now getting surplus Armored vehicles - for free - courtesy of the Pentagon’s surplus program. Vehicles like M113 tracked armored personnel carriers.

When I was in the National Guard (Infantry) back in the late 80's even we didn't have APCs. The question is, why do local police departments need these at all? There is no civilian incident I can think of that would require the employment of tanks or armored vehicles. These vehicles were designed for the battlefield, not to be used on America's streets against American citizens.

Outstanding Pictures

2009-04-22T20:01:00.006-04:00

I am a fervent admirer of Oleg Volk's photography work, and look over his latest stuff often that he posts on his blog. He;s gone 100% freelance now, and here are a couple of outstanding examples of his work:

I my hope is that one day I might be able to hire him for 2 or 3 day shoot of the misses and me with some of our toys. :-)

Rule of Law

2009-04-22T19:13:00.003-04:00

Attorney General J.B. Van Hollen affirmed in a memorandum to prosecutors on Monday that it is legal to openly carry a gun on the street in Wisconsin and advised prosecutors that merely having a gun doesn't, by itself, warrant a disorderly conduct charge.

However, Milwaukee WI Police Chief Ed Flynn said he'll continue to tell officers they can't assume people are carrying guns legally:

"My message to my troops is if you see anybody carrying a gun on the streets of Milwaukee, we'll put them on the ground, take the gun away and then decide whether you have a right to carry it," Flynn said. "Maybe I'll end up with a protest of cowboys. In the meantime, I've got serious offenders with access to handguns. It's irresponsible to send a message to them that if they just carry it openly no one can bother them."

So in Milwaukee it's OK for the police to harass people who engage in lawful behaviour - the only thing required is that the officer doesn't like what they are doing or feels 'insecure' in some way.

Glenn Reynolds suggests the following:

"So if you see Police Chief Ed Flynn, put him on the ground, take his wallet away, and then decide whether he’s accepted any bribes that day. If, after doing that, you think the money’s his, give his wallet back. Who cares what the law says?"

I wonder what Chief Flynn will tell his troops is three or four thousand tea party protesters showed up across from city hall open carry... I bet THAT would at least be newsworthy... HEH.

Absolutely Excellent

2009-04-22T15:42:00.000-04:00

President of Everything

2009-04-21T19:31:00.003-04:00

Brian Doherty makes the case that the new management will neither heed, nor are concerned, about their constitutional limits.

Obama’s speciality is shaping up to be particularly dangerous because it’s hard to dispute given the average American’s sensibilities. No call for liberty and constitutional principle seems convincing when Obama is arguing that those relying on government giveaways should have to follow government-set rules. That is, once you’ve allowed them to go ahead with the handouts, the political game is almost over. Under the guise of “managing the taxpayers’ money", Obama and his crew are rewriting mortgages, deciding executive compensation, tossing out CEO’s. And note carefully that his plans for where taxpayers’ money should go continue to swell, from healthcare to the environment to energy policy to expanded “national service” programs. When taxpayers’ money is everywhere - and Obama is doing his best to make sure it is - then Obama’s control is everywhere. The Octo-potus is claiming his space and flexing his grip.

As far as he’s concerned, it’s Barack Obama’s country. We’re just living in it.

Mr. Obama is wrong. The most powerful and important unit of government is the Individual, Sovereign Citizen. So get your hands the hell out of my pocket - and my banks pocket.

Why Jeff Fired His Broker

2009-04-20T22:01:00.005-04:00

Jeffrey Goldberg tells Bob Cohn why he bought gold, stocked up on lanterns, consulted a survivalist - and finally fired his broker. He also makes a good point about how those of us with $300,000, $500,000, a Million, or even 2 or 3 Million to invest just don't attract the interest of the top flight money managers anymore, which forces us to take care of ourselves. It's also what makes us so fiercely independent.

PS: I almost guarantee the 'survivalist' he consulted was probably James Wesley Rawles...

In Order to Maintain “Fiscal Responsibility' Obama Gets Thrifty

2009-04-20T18:30:00.009-04:00

In response to public outcry regarding his gargantuan $3.7 Trillion budget (including 565,000 Tea Party protestors and counting), President Obama has ordered his new cabinet to find $100 Million in savings over the next 90 days. Mr. Obama says:

"I'm asking for all of them to identify at least $100 million in additional cuts to their administrative budgets," Obama told reporters afterward. "None of these things alone are going to make a difference, but cumulatively, they would make an extraordinary difference because they start setting a tone."

Now, while the new management spends the next 4 days cooing all over this proposed '1st step' (isn't everything with them a 'first step down a long road to re-election'?), let take a look at what this amounts to:

$100 Million in budget cuts is:

-Less than one-quarter of the budget increase that Congress awarded to itself.
-4 percent of the military aid the United States sends to Israel.
-Less than half the cost of one F-22 fighter plane.
-7 percent of the federal subsidy for the money-losing Amtrak passenger rail system.
-1/10,000th of the government's operating budgets for Cabinet agencies, excluding the Iraq and Afghan wars and the stimulus bill.

In fact, here's what it looks like on paper:

When I first saw this headline, I thought it was a mis-print - surely $100 Billion would be a good start, $100 Million must be a misprint, right? Yahoo Finance says it's the equivalent of asking a family that spends $60,000 in a year to save $6.

Is that 'setting a tone' or is it 'tone deaf'?

UPDATE: Liberal Paul Krugman defines 'lame effort':

Except, you know, really it doesn’t. Let’s say the administration finds $100 million in efficiencies every working day for the rest of the Obama administration’s first term. That’s still around $80 billion, or around 2% of one year’s federal spending.

Guns: A better buy than stocks?

2009-04-20T00:58:00.002-04:00

MSN ran an article last week regarding how some investors are buying guns instead of stocks.

I've seen prices start to fall back to more reasonable levels recently, though many things are still hard to find. A lot of dealers certainly are ordering Colt 6920's awfully deep. If I had any sense I'd order 20 or 30 NIB and just put them back for safe keeping.

Happy Patriots' Day!

2009-04-20T00:12:00.004-04:00

"By the rude bridge that arched the flood

Their flag to April's breeze unfurled,

Here once the embattled farmers stood,

And fired the shot heard round the world"

Remember, when I grew up they showed stuff like this on Saturday Morning TV:

They still should.

1773? Nope, more like 1765.

2009-04-19T00:33:00.002-04:00

The folks at the The Bosque Boys blog sums up the Tea Party movement by speculating that the situation is more akin to 1765 than 1773:

I am NOT one who doubts that the sentiments were genuine or grassroots. The protesters were sincere, but mostly they were dazed and confused. The lack of direction and coherency proved frustrating and hard to follow. The unhappy demonstrators did not know what to do, but this was something. If the protests had been more like they were initially described in the mainstream media (the product of a vast right-wing conspiracy), the demonstrations might have been more satisfying. The unruly events needed some genius behind the scenes to orchestrate a unifying theme.

For that reason, the self-titled Tea Party analogy misses the mark historically.

The historic Boston Tea Party (Dec. 1773) occurred at a point much closer to the culmination of the Imperial Crisis, which was already eight years in the making. The Patriot cause in 1773 was actually quite mature and ready to break across the "national" scene as a sophisticated colony-wide movement. The illegal attack on private property in Boston Harbor provoked the British government into the Intolerable Acts and led to the First Continental Congress and the short ascent to full-blown Revolution.

If anything, this modern Tea Party movement is more like the spontaneous, unfocused, and out-of-control reaction in Boston (and other places) to the Stamp Act, which proved the first act in the three-part, decade-long Imperial Crisis. The uncontrolled mayhem in 1765 gave rise to the Sons of Liberty and leaders like Sam Adams and John Hancock to guide and regulate the unrestrained and unnerving expression of popular anger (and violence).

This About Sums It Up

2009-04-17T01:59:00.001-04:00

Nick Gillespie Goes Off

2009-04-17T01:10:00.003-04:00

Nick Gillespie wonders if we can finally start talking about Obama's vision deficit yet?

Mega-props to our President Obama for yesterday's speechifying about simplifying and fair-izing the Infernal Revenue Service and all that.

Except for one small nitpicky thing: He's full of shit on this topic.

Fair and Balanced? Not!

2009-04-17T00:22:00.005-04:00

Anyone who tells me the folks in the main stream media are reporting the truth just needs to watch this. During the Chicago tea party yesterday, CNN's reporter zero'd in on a couple of people that would make the Tea Party look as right wing and loony as possible, had no interest in reporting the real story, and quickly turned off the camera when the rest of the folks there started to object:

"Don't be so Antagonistic?" Roesgen is a complete dip shit. She's lucky she didn't get lynched, and I think 200 years ago they would tar and feather these types. I think the folks in the crowd went above and beyond in their level of restraint.

But fortunately, no one watches CNN or MSNBC anymore, or at least, on one that counts. Don't believe me? Look at the ratings according to Nielson. Regular people know what's going on, and they don't want to listen to the left media's pandering anymore, which is the reason that FNC has 6-8x the audience of MSNBC in several key time slots. Let me tell you, people are fed up with over taxation and pissed off about government spending and waste and giving away American Sovereignty and they are hitting the pavement in numbers that makes Obama's rallies look like little league games. The lowest count on yesterday's Tea Party turnouts nationwide is 262,000 people at over 300 different assemblies. That's a quarter of a million people - on a work day - and with bad weather in several key parts of the country including DC. My hope is that the Tea Party goers can turn out 1-2 Million protesters this summer at the July 4th rallies. With those kind of numbers, the people at the local, state, and federal government levels are going to have to start listening, and that's the change I believe in.

Gov. Perry Backs Resolution Affirming Texas’ Sovereignty

2009-04-15T02:06:00.004-04:00

Texas Gov. Rick Perry joins the movement by other state governments like Montana and Idaho reminding the Federal Government that they need to read the Constitution.

Nickle and Diming Us to Death

2009-04-15T01:42:00.002-04:00

Ugggg...

After her sport utility vehicle sideswiped a van in early February, Shirley Kimel was amazed at how quickly a handful of police officers and firefighters in Winter Haven, Fla., showed up. But a real shock came a week later, when a letter arrived from the city billing her $316 for the cost of responding to the accident. “I remember thinking, ‘What the heck is this?’ ” says Ms. Kimel, 67, an office manager at a furniture store. “I always thought this sort of thing was covered by my taxes.” It used to be. But last July, Winter Haven became one of a few dozen cities in the country to start charging “accident response fees.” The idea is to shift the expense of tending to and cleaning up crashes directly to at-fault drivers. Either they, or their insurers, are expected to pay.

Read the whole thing.

Don't Believe Everything You Read on the Internet

2009-04-15T00:51:00.005-04:00

This headline really caught my eye, so of course I went over to take a look:

What's a nice girl like you doing with an arsenal like this? Police seize 20-year-old guarding vast weapons cache... including anti-aircraft gun:

It's apparently very easy to fool the UK media into thinking you've actually done something news worthy. There is no ANTI-AIRCRAFT gun in the picture, just a homely looking and very old Browning .30 Machine Gun. Don't get me wrong, it will do the job, but it's hardly an 'anti-aircraft gun'. I was expecting at least something like old painless here. Or better yet, here. Now that's a REAL gun.

All I really see above is a few hundred rounds of ammo, a tri-pod mounted M1919, a couple of hunting rifles, and a couple of battle rifles, and maybe 250-300 AK magazines. Yawn..... I know guys who go to the range on a Saturday afternoon with more hardware than this, so I think if this is media worthy for the Mexican police they are probably in BIG trouble. More disturbing, assuming the 1919 started out as a de-milled Semi (and might still be), there is nothing in the photo above they couldn't get from gun shops in the United States legally with a quick background check. In fact, the Clinton era ban compliant 'thumb hole stock' on the AK suggests that they probably did. ~sigh~

The View from the Cheap Seats

2009-04-13T22:12:00.003-04:00

Wyatt, who represents the best thinking that can be had out at the Examiner, doesn't understand what the Tax Party protests are all about. Having run a business for 12 years and come face to face with exactly how unfair the current tax system is, I wrote this little response to his last post:

Wyatt is very clever - enough to figure out ways to generate more page view traffic for the examiner by attacking subjects he knows will be controversial. It will help extend his journalistic brand and make him more money. With hard work, time, and a little luck he may be successful in this.

But once he finally passes into the ranks of the financially successful and starts having so much of his success taken by the government that he starts to question the wisdom of pursuing that success further, he’ll finally understand what the ‘Tax Party thing’ is all about. One day Wyatt will have an employee that costs him $54,000 a year to give $32,000 in take home pay, and wonder why it costs him so much to give that person so little. One day Wyatt’s small business will make $300,000 in one year, and he will add $250,000 in inventory that year and get stuck with a $138,000 Federal and State tax bill that he doesn’t have the cash to pay because he tried to be productive with the money, create jobs, and pile it back into the business. One day Wyatt will try to sell his business only to find that a huge chunk of his hard work will again be taken by the government, work he already paid a ludicrous amount taxes on along the way, will be taxed yet again. One day Wyatt will discover the reality of how the political rhetoric didn’t quite align with reality when he wonders how he managed to produce a million dollars in income over the past decade only to find that he was able to keep less than 40% of it after federal, state, and local taxes upon taxes upon taxes. He will wonder how he could have made all that money but still not be able to afford a good school for his kids. He will wonder how his kids are going to be able to afford the crushing taxes required to pay the interest on the national debt, or how he will possibly be able to save enough for retirement because inflation is running 15 or 20% and is destroying the value of the wealth that he was able to set aside after the government took the rest.

A little revolution is good thing from time to time Wyatt. But I doubt you can see that from where you are in the cheap seats. We forgive you. How could you possibly know?

Obama Should Be President of Europe Instead

2009-04-05T16:25:00.003-04:00

President Obama got that 4:30 phone call this morning, getting awakened from a dreamy sleep when North Korea launched an ICBM test rocket. His response to the event was, what else, to give a speech in Hradcany Square in Czechoslovakia. And in that speech he lectured on about how we need to live in a world free of Nuclear Weapons. From politico:

The president directly addressed the Cold War history of this former Soviet bloc city, calling the remaining nuclear weapons “the most dangerous legacy” of that era. He again pointed to history to say that America must lead. “As a nuclear power – as the only nuclear power to have used a nuclear weapon – the United States has a moral responsibility to act,” he said. Obama proposed doing so by reducing America’s arsenal, if not altogether eliminating it; hosting a summit on nuclear security; seeking ratification of the Comprehensive Test Ban Treaty; strengthening the Nuclear Non-Proliferation Treaty; and pursuing a new agreement aimed at stopping the production of fissile materials.

I'm SURE he's just kidding about that whole 'no nukes' thing, pandering to the European youth during his visit to win points since they seem to like him there even more than they like him here. Maybe Obama should be the President of Europe instead, since he doesn't seem to have much concern for the US as a sovereign nation. I grew up during the cold war, and remember all too well the notion that the only thing keeping Russian or Chinese parachutes from falling on small towns all over the US was that little trump card that we held back in silos in North Dakota and subs laying off the coast in the sea of Japan. Yeah silly idea, I know. The situation today is not as tenuous as it was back then, and we certainly don't need 10,000 warheads today - a couple thousand will do just fine. So I'm SURE he's just KIDDING around about getting rid of those? Right?....Please?....

Social Security 'Crisis' Just Around the Corner

2009-04-04T20:48:00.005-04:00

Tom Blumer reports that the social security meltdown is actually a lot closer than we are lead to believe:

"Think Social Security will be solvent until 2041? Think again. The next president will face rapidly growing problems by the end of his or her first term. At the time, the concern was that the substantial Social Security surpluses we have experienced during the past 22 years would begin to shrink. An updated version of a Congressional Budget Office chart I presented last year shows that the shrink has indeed begun:"

Tom also includes some details about how the government has actually been borrowing all the social security surpluses since 1968. I can't remember how many times I've told this to some wide eyed person during a political conversation, only to have it written off as some nutty conspiracy theory. "That can't be right, they can't do that" is the usual response, but it's all too true that Washington politicians have been quietly fleecing the SS surpluses to fund god knows what extra spending program, and then make it look like they are not borrowing too much money, or in the case of Clinton's administration, to falsely claim they have actually balanced the budget or had huge surpluses. The reality is that a large portion of the SS tax you pay out of your paycheck doesn't even go to SS, but gets stripped off to the governments general fund to be spent just like regular tax dollars. The government replaces these funds with IOU's that are impossible to pay back. It's a sham. More from Tom:

Social Security’s surplus for the year ended September 30, 2008, fell to $180.2 billion, reducing its subsidy to the rest of the government. What? That’s right; I said “subsidy to the rest of the government.” Social Security’s surpluses have been raked off by Uncle Sam and have subsidized the rest of the government since 1968, when President Johnson began “including Social Security and all other trust funds in a ‘unified budget.’” At that point, as I wrote last year, “Social Security’s Trust Fund, instead of being a separate, untouchable stash of cash and investments (i.e., instead of being run like a normal pension plan), thus became money that the rest of the government could raid.” And raid it they have, as you can see above. Since 1986, Social Security surpluses have subsidized the rest of the government to the tune of over $2.3 trillion, enabling reported deficits to be lower than they really have been. Social Security’s so-called “Trust Fund” consists of a stack of IOUs from Uncle Sam, who is now over $11 trillion in debt. A year ago, the annual Social Security surpluses were expected to shrink to zero by 2017. That’s because, starting last year, the annual demographic wave of millions of baby boomers reaching the system’s minimum age of 62 for collecting began to hit. This wave will continue for the next two decades.

You can read the whole thing here.

Penn Jillette on Obama

2009-04-02T00:36:00.002-04:00

Penn Jillette uses fire eating and crash avoidance to ground some interesting commentary about the the current Economic Recovery plan:

"President Obama is so damn smart. He just drips smart. He clearly understands stuff that we could never understand. He's trustworthy. If Obama were teaching fire-eating, we would all learn fast. If he told you that the burns would be minor and the fire would go out when you closed your mouth, you'd believe him. If I weren't twice his weight, I'd fall back with my eyes closed into his caring arms in one of those cheesy '70s church trust exercises. He could talk me into anything.

Obama tells us that we can spend our way out of debt. He tells us that even though the government had control over the banks and did nothing to stop the bad that's going on, if we give them more control over more other bank-like things, then they can make sure bad stuff doesn't happen ever again. He says we can get out of allthose big wars President Bush caused by sending more troops into Afghanistan. And I don't know. I really don't know."

More here.

What The Auto Industry Bail Outs are Really About

2009-04-01T00:00:00.004-04:00

I was talking to someone today about what the auto industry bailouts are really about, and why GM is getting so much more attention than other failing companies but Staghound puts it much better than I could and hit the mark perfectly:

So what else is GM other than a car maker and lender of money?
Its value IS to be "bailed out". I say this in all seriousness.
It's a huge interface with millions of voters- and their livelihoods, savings, pensions, debts, mobility, their health...
The only thing that makes GM valuable at this price is that it is a ready made conduit, all set up. What for?
Delivering loyalty payments from "the government" to reliable voters.

In my day a company that was worth $20 Billion dollars, but was loosing $50 Billion a year, needed to be cut loose from the economy and allowed to fail. If GM were allowed into bankruptcy it could restructure it's labor and benefit contracts (which have been bleeding it dry for decades anyway) and eliminate ALL uncompetitive cost structures, sell off non performing assets, and wipe out debt (I'm a GM bond holder by the way, so I understand the implications better than most). Then it could emerge as something resembling a company that had a chance to actually make money. This is the way failed operations are supposed to be 'restructured' in the United States. I guarantee if my company started loosing that kind of money it would be radically restructured long before the cash ran out. No government bailout would be required, nor would it be available in any case. Either that our I would close it and move my capital to a new venture that was more productive. Perhaps considering this, that's what GM stake holders should have done long ago anyway...

Straightening Out this Mexican Cartel Gun BS

2009-03-31T00:15:00.003-04:00

Some good reading on how the Government and Media are NOT telling it to us straight about the Mexican Cartel gun issue. I don't know about you, but the last time I was at the gun shop they were completely stocked out of RPG's, Machine Guns, and Hand Grenades (and curiously, they were not taking any back orders). I guess the cross border demand must be eating up everyones inventory...

Of course, if you really want to solve the gun problem AND the drug AND the illegal immigration AND a lot of our overseas war expenditure problem, bring half of those troops home from Iraq in the next 120 days and put them on the border with Mexico to lock it down. No more guns and cash moving south. Cartels in trouble. No more drugs moving North. Cartels in trouble. Money from Iraq war diverted to businesses in CONUS, jobs created. That's good. Drastic reduction in illegal immigrants that tax our social services. More for Americans and legal immigrants. That's good.

Now if I can just get the president on the phone...

Who's is the New CEO of GM?

2009-03-30T22:21:00.004-04:00

President Obama, that's who. Because businesses with large well paid union voter roles are too big to fail.

The Obama Presidency is also in that category. It's too historic to fail.

I feel better already.

Book of the Month - One Second After

2009-03-30T00:53:00.004-04:00

I'm currently reading the book One Second After by William R. Forstchen. Right now it's #29 on Amazon's book list, which is pretty amazing since its a well researched fiction about the after effects of a massive HEMP (High-Altitude Electro Magnetic Pulse) attack on the US. One reviewer from Amazon says:

The main character is retired Colonel John Matherson who is a professor of history at Montreat College in Black Mountain, NC, his two daughters, one of whom has Type 1 diabetes and his mother in law. One afternoon the lights go out and never come back on. Colonel Matherson pulls out a paper that he had written while teaching at the Army War College and comes to the conclusion that the USA has been hit by EMP (elctro magnetic pulse) which is the result of a nuclear explosion in the atmosphere (three bombs in fact are set off about 200 miles in the atmosphere). Not only are the lights are out but all modern electrical items are affected including cars. People panic!Many people start to die off within the first few days and weeks of this EMP attack: those on dialysis, life support, in nursing homes, diabetics, etc. Weeks, months pass by and the community tightens its belt to the fact that they are facing disease, lack of medicine, starvation, and attack by a gang called the "Posse". Colonel Matherson with his leadership ability takes the helm at a high personal cost to himself. You will definitely shed a few tears if you read this book. I did! Having been involved in relief/combat operations in the past stressful situations will always bring out the best and the worst in people.

Think of a nationwide 'Katrina' type event. This thing that struck me about the book was just how fast civilization breaks down after everyone realizes that no help is coming for weeks, maybe months, or maybe not at all. If you want to read a chilling account of what life would be like if the lights went off for good, I highly recommend this book. It makes you think about the things we take for granted on a daily basis in a whole different way.

Thoughts from an Economist Actually Worth Reading

2009-03-29T20:12:00.002-04:00

There are hundreds of posts every day on Seeking Alpha, and all but a small handful are decidedly worthless on a real informational basis. Here is a post that is not, and features excellent information from David Rosenberg, who I think is one of the best economists in the world.

Read it all.

ESPN Article on Ammo Sales

2009-03-29T18:14:00.004-04:00

ESPN, of all places, is running an article today citing that the recent increased demand for Ammunition is no dud. I personally check Ammoman's site at least once a week just to see what he's getting in and what it's selling for, and even well into March of this year just about every popular caliber he lays his hands on is sold out again within 48-72 hours.

But this certainly isn't the act of 'crazed lunatics' like some people seem to be saying. For gun owners, rather than thinking about what they will need for this years hunting season (or range time or competition shooting or 'whatever'), I think subconsciously they are thinking about what they would need for EVERY hunting season for the rest of their life, and then trying to lay back as much of that as possible before some sort of draconian restrictions are put into place, whatever those might be. If someone can afford to pay $2,000 or $3,000 for a gun, one could reason that spending another $1,500 or $2,000 to put back a lifetimes worth of ammunition for it doesn't seem unreasonable. Multiply that times millions of people that own 3 or 4 guns, and you get the run we're having now.

The stuff never gets any cheaper anyway (the price of ammo seems to mysteriously double about every five years), so if a person shoots a lot, spending the money now can yield significant savings down he road. You could really chalk up the current 'craziness' to simple fiscal common sense, or even as a savvy investment.

Tea Party in Buffalo Today

2009-03-28T23:24:00.005-04:00

300 turned out today in Buffalo to protest high taxes and failed government:

And there were 150 in Stamford, CT:

More here. Keep it up!

Transparency... Yeah right.

2009-03-28T20:22:00.004-04:00

It comes as such a disappointment to me to find out that all the questioners that President Obama's staff selected 'at random' during his first Internet Town Hall were actually close nit Obama campaign backers, so rather than tackle tough questions for all sides of the table he will be using the venue to simply forward his own agenda items. Sounds like politics as usual to me. I don't have much more to say about it, everything you need to know is in this Washington Post article.

In other news, I just got a copy of Mark Levin's new book on Friday, and while I was quite sceptical of it being just another conservative rant, after a couple of chapters I have to say it's incredible so far and I totally understand why it's been sitting as the #1 book on Amazon for so long. Checkout this video from Mark's book signing today in Tysons Corner:

Looks like at least 1,000 people standing in line in the rain to get their copy signed! If you want an non nonsense plain English explanation of our current program of Statist politics and what it really means for all of us, get a copy of this book.

Is Obama Really This Smart?

2009-03-27T03:14:00.003-04:00

Dick Morris is afraid that President Obama's ultimate plan is for the Public-Private partnership to fail so he is forced to nationalize the banks later at a point in which there would be more popular support for it, like some sort of 'final solution' in a far reaching socialist agenda. The theory certainly does have weight amidst the current populist rhetoric demonizing virtually anyone in America that makes money. Things have gotten so crazy in DC over the last two weeks that you don't even need a tin foil hat for this stuff anymore.

And if you think that's scary, take a look at this.

The Brit's Don't Pull Any Punches

2009-03-25T14:20:00.004-04:00

If only someone on this side of the pond could make the argument against out of control government spending this eloquently:

UPDATE: The Germans Aren't Buying Into the 'Stimulus' It Either.

No One Can Call A Bottom

2009-03-24T23:27:00.007-04:00

I've been hearing a bunch of financial and stock pundits calling the approx 6,500 Dow low from a couple weeks ago the bottom of the market. Before you take that for more than conjecture and start piling back into the market, ask yourself if the fundamentals of the market have changed any over the past 2 weeks, and if the picture of the future is any better given the new information we have received in that time frame. Also, remember that during the stock market fall from the top in 1929 to the bottom 1932 there were 6 big bear market rallies in which the market was up more than 20% before falling again and setting a new low. Was 6,500 the low for this bear market? I have no idea, and neither do you. Don't worry about missing all that money on the way back up. Take your time and do your research.

And don't forget to factor in where the dollar is headed over the next few years considering the projected Obama budget deficits:

Yikes! And I thought when Bush carried a $400 Billion deficit it was fiscal suicide. And the graph above DOES include all spending for the Iraq and Afghanistan wars during the Bush years, and includes the extra revenue from the Obama tax hikes once he lets the Bush tax breaks expire, which is the only reason you see those projected reductions in 2011-2013. Increasing the deficit 400% and then promising to cut it in half is about as disingenuous as you can get. More here.

Inflation or Deflation?

2009-03-22T16:04:00.013-04:00

Now that the Central Banks of the US, Britain, and Japan have invoked the Nuclear option and started Quantitative Easing to fight the current environment of worldwide asset deflation, the 700 lb gorilla in the room for the investor class (that's me and probably you too) is whether we are going to be staring either DEFLATION or INFLATION in the face over the next 3-5 years and beyond.

Unfortunately, none of us have a crystal ball, otherwise we would not have lost so much money in the market over the past 18 months. I'm down about 30% myself (I had prepared my portfolio for a DOW bottom around 8,500 - wrong!), even after staying in cash during the peak in 07 and staying mostly on the sidelines until last summer. I've been investing for over 20 years and consider myself to be pretty smart about this stuff, but this time around experience really didn't matter.

QE by the way, is where the Central Bank basically creates large amounts of new money out of the air (printing money is the adage) to pump up lending and asset values. So what's going to happen? My economics classes in college taught me that Monetization and QE are highly inflationary, but you can also argue that the $10 Trillion or so the government will ultimately borrow, print, and spend trying to mitigate this crisis pales in comparison with the $30-$35 Trillion of asset wealth that has already been destroyed. Japan's attempt to pump up their economy this way in the 90's failed to stem 10 years of deflation, but the efforts today are at least twice as large based on GDP. Will monetization of US debt massively devalue the dollar? What will that mean if it does? The issue is so complex that it's beyond my reckoning, and even for economists - lets face it, if you ask 10 economists about these issues you're going to get 11 totally different answers.

Some are calling for massive deflation to continue. That means hard asset prices will continue to fall. Metals, Food, Property, Paper Assets, everything. If you look at housing and property values, that has to be right, because housing and property is still priced too high in most areas, and limiting foreclosures only prolongs the pain. I've been looking for a hundred acres or so of arable farm land in North Western Virginia for five years now, but the prices are still to high. Sure, they've come down from $20,000 and acre in 2006 to $8,000-$10,000 an acre now, but 10 years ago the price was $2,000 an acre. Every large piece of land on the market in this area is still priced as if it's going to be imminently developed, even if it's 30 miles from nowhere. Frankly, there is nothing you can do with a piece of land in this area that costs $10,000 an acre today and make money on it. You can't build on it, you can't grow anything on it, you can't harvest it (timber for example), and you can't hold onto it at that price and have any hope to recover your investment. At least I can't, not in my lifetime. So in my mind, land and property prices have a long way yet to fall in order to reach the historical mean, or at least to a point where the cash flow on an investment property comes in line with the profitability necessary to offset the estimated risk. In the past the rule of thumb was a 6-8% (hopefully positive) cap rate on property returns was reasonable. Today, it's impossible to even make that calculation, because there is no predicable price or cash flow stability. There is also total uncertanty about how the Government will structure future tax rate on those deals, so the money stays on the sidelines. But I digress...

Others say we are in for a short period of 'perceived deflation' and then a huge run of hyper inflation (ranging from reasonable to banana republic type estimates) once all that new money gets turned loose into the economy. Considering the amount of money they are creating, I think the fed would have to play the game of champions to keep that from happening down the road, and that would have to assume the people at the Fed actually know what they are doing. I remember when I was 11 years old (1981) putting the money I had accumulated after a year of allowance (maybe $100) into a CD at Central Fidelity Bank in Chantilly paying 9.5% interest. This seems like a lot, but inflation was running 16% at the time, and mortgage rates were creeping up around 22%. Think about that, because it was real and it happened and it wasn't 80 years ago. The government ultimately solved the problem back then, but we weren't 15 Trillion dollars in debt as a nation either. What can they do now? What would inflation ultimately be this time around? 10%? 15%? 50%? Is this actually what they want? Do they see this as the only way to deal with our $60 Trillion in future liabilities? Have we been had?

I have no answers, and there doesn't seem to be any places to hide. Holding cash is great for deflation, but you get slaughtered when inflation crops up. Bonds get wiped out too. Stocks can help mitigate the effects of inflation, but holding them these days in just about anything exposes you to awful potential losses, mostly because you just can't trust the financial information companies are giving you, or when the government will decide that they are making too much money. What about Gold? Come on, gold over the last 30 years has been about one of the worst investments you could have held. Gold bought in 1981 is has lost 60% of it's dollar value based on inflation, even at $950oz today, and it didn't pay you a dime during the 30 years you held it. What you should have bought in 1981 were 30 year treasury bonds paying 16% interest, but at the time you would have needed balls of pure steel to take the risk. As an investor I hate Gold - mostly because I always 'hope' we can avoid the kind of economy in which we'd need to hold gold, but that said, today there is a compelling argument for holding Gold. Gold is what you better be in when humpty dumpty falls off the wall.

Diversification seems to be the key right now. And I don't mean holding a broad basket of stocks, I mean thinking about how to position your assets for preservation of capital, to mitigating potential losses, and sharing in 'some' gains should things (by some miracle) turn around. I think at the moment safety has to trump greed, and that diminished expectations over the next few years will be the reality. Look at it this way. When you go to the Dentist, pretty much the best outcome is that you can leave about the same as you went in. Three or four years from now we investors and business owners might be happy with those results too. Instead of bragging about how successful our business is, we can brag that we are still in business. Instead of boasting about how much our portfolio has made, we can breath a sigh of relief knowing we still have one.

Maybe the only ones who will be able to say that are the ones piling into Gold now...

From the Tea Party in Orlando Today

2009-03-21T22:47:00.010-04:00

Via Instapundit:

Lots more pictures here, and commentary here.

Tam Explores Life's Mysteries Again...

2009-03-21T21:01:00.005-04:00

Tam has the audacity to ask that age old question:

"How come when I put my AmEx bill on my Visa, it's stupid, but when the government does it, it's stimulus?"

She files this post under "Ignorance is no excuse for a law". HEH. This post is about as humorous as I can get now that the Fed has started to monetize the debt of the United States.

Someone Please Tell Congress that Bills of Attainder are Illegal...

2009-03-21T06:27:00.012-04:00

No matter how reprehensible you feel the bonus payouts to current AIG employees are, or how fervently you are buying into the Obama administrations politically expedient faux outrage over those bonuses, what should bother you the most is how our so called congressional leadership has chosen to deal with that outrage. The bill passed in the house this week to tax bonuses paid out to employees of TARP recipients at confiscatory rates of 90%+ is nothing more than a Bill of Attainder which is expressly forbidden in Article 1 Section 9 of the Constitution of the United States:

From Article 1 Section 9 of the US Constitution (Limits on the Power of Congress):

"No Bill of Attainder or ex post facto Law shall be passed."

This Section regarding Bills of Attainder is further clarified in the 16th Amendment:

"No capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken."

These bonus contracts, regardless of their audacity, are perfectly legal and were actually approved in the stimulus legislation passed by congress and signed into law by President Obama only a few weeks ago. That no one bothered to read or consider the consequences of that legislation before it was signed into law, or the US Constitution itself for that matter, seems irrelevant to an administration that has so far spent two months shifting aimlessly and seems determined to govern based on nothing more than daily public opinion polls.

John Hinderaker asks if we are on the verge of becoming a banana republic, and gives of some ominous answers:

I'm stupefied to find that some people are defending the constitutionality of Nancy Pelosi's discriminatory, confiscatory and retroactive tax on people who receive bonus income from companies that got TARP money. I would have considered it a bright line rule that the government can't identify a class of unpopular people and impose a special tax on them. What's next? A 100% income tax on registered Republicans, retroactive to last year? If Pelosi's bill passes muster, why not?
If the Pelosi bill is actually enacted into law and upheld by the courts, there is no limit to the arbitrary power of Congress. In that event, we have no property rights and there is no Constitution--no equal protection clause, no due process clause, no impairment of contracts clause, no bill of attainder/ex post facto law clause. Instead, we are living in a majoritarian tyranny.
If Congress can appease a howling mob of demagogues by enacting discriminatory tax legislation against a group of people who are, for the moment, politically unpopular, even though the vast majority of them have nothing to do with the supposed problems that have given rise to popular outcry--imagine, say, Congress enacting a surtax on the incomes of all homosexuals in response to a notorious case of homosexual molestation--then the idea that the Constitution affords us any sort of protection against arbitrary government power is an illusion...

Very, very Disturbing. But as James Marrow writes, We Seem to be in the Very Best of Hands.

UPDATE: Someone agrees with me.