Wednesday, February 28, 2007


How to get short the stock market

First off, the 4th quarter 2006 GDP was revised down as expected. It came in at 2.2% which was a larger than normal revision of down 1.2% . I was confused by the number because it did not fit in with the slowing housing market, weakening manufacturing, and most other indicators save consumer confidence and the stock market. This fits in with the trend of GDP falling for most of 2006 which should lead us into recession latter this year.

Now that the stock market has cracked you might consider hedging your long stock market position. But how? How about an Exchange Traded Fund (ETF) that mimics one of four popular indices. Except these ETFs are double the inverse of the index of your choice. Sounds to good to be true? No it isn't. But first, let me tell you about ETFs and why they are a good vehicle for professional and not so professional investors.

Rather than pretend I know everything about ETFs I will point you to wikipedia. Just understand that ETFs are supposed to have much of the same advantages as own a stock including forgoing capital gains until the ETF is sold, greater liquidity and transparency of prices than say a mutual fund. Limit orders and stop-loss orders are possible with ETFs. In short, it is much more convenient than other methods of shorting like stock index futures and mutual funds.

So let's say you have exposure to the stock market but you don't want to sell stock that you have held for a long time and incur big capital gains. Then what you can do is buy these ETFs:

New York, NY, July 13, 2006—ProShares, together with The American Stock Exchange® (Amex®), today announced the addition of four exchange traded funds (ETFs) to the ProShares lineup. UltraShort ProShares are the first ETFs designed to provide magnified short exposure to well-known market indexes.

The new UltraShort ProShares seek daily investment results that correspond to twice the inverse of those indexes, before fees and expenses. ProShares, which is part of ProFunds Group, introduced its family of innovative ETFs on June 21, 2006, with eight other ETFs offering short or magnified exposure to popular indexes.

They have long, short, and double short the Dow, Nasdaq 100, S&P 500, and Nasdaq MidCap indices. After a four year long bull market, with GDP trending lower, the housing market putting in lower prices with no end in sit, an inverted yield curve since June of 2006, and slowing manufacturing it is hard to think of a better time to hedge against a bear market.


The Snail's Pace Continues

The results are not final but Helen Shiller has been re-elected as Chicago's 46th ward alderman. I was surprised at the low turnout currently reported as 37% with Shiller getting about 5,800 votes. I thought there would be about 1,500 more votes cast but that didn't happen.

On the positive side Shiller received about 400 less votes in 2007 than in 2003 despite there being more votes cast. She may have benefited from early voting and the opportunity to bribe voters with pizza parties and free state ID's but the election process appeared free of any fraud from all the reports I've read from poll watchers.

I agree with the IrishPirate's assessment that Uptown will continue to get better but the pace will just remain slow. Thanks for all the hard work IP, Shiller is the anchor to your ship's forward progress. Helen passing the chains on to her son Brendan through retirement/appointment or through the election process must be resisted.

Despite the election results I shall hoist a glass of my finest home brewed beverage this evening and toast to the good work of IP and WTH.

Tuesday, February 27, 2007


Video of the plunge

To let you know how quick it was. (Via Drudge.)


Combating Liberal Orthodoxy

Is it the top domestic issue for Republicans in 2008?

I haven't yet decided which Republican candidate to support; John McCain is the only serious candidate I've ruled out so far. But John Podhoretz summarizes what I most admire about Rudy Giuliani and why I'm inclined to support him:
Rudy may call himself pro-choice. He may have signed legislation mandating benefits to gay couples. He may have been a supporter of gun control. He may even have endorsed Mario Cuomo for governor in 1994. These are all things he's going to have to explain and answer for in Republican debates and the like.

But more than any other candidate in the race, Rudy Giuliani is a liberal-slayer. When he rejects liberal orthodoxy, which he does often, he doesn't just oppose it. He goes to war with it - total, unconditional war.

He spent his political career chewing up liberal orthodoxy and spitting it out - and I think that somehow, in some way, voters in Oklahoma and Kansas get that about him even without knowing the specifics.

His success in turning New York around wasn't merely a matter of changing policies. He had to sustain those policies when they came under deliberate, systematic and unrelenting assault by the city's liberal elite.

(My emphasis.)
The longer liberalism predominates our political culture, the less likely it is that we'll be able defeat our Islamic enemies. As such, the willingness to tenaciously combat prevailing liberal orthodoxy among our political and media elite just might be, for me, the most important trait in a candidate.


Uptown Uprising

Updated 4:20pm

There could be a revolution taking place in Chicago's 46th ward right now. The current alderman, Helen Shiller, has served since 1987 and is running against James Cappleman in today's election. This isn't the Berlin Wall coming down or even the Orange Revolution but it is a big deal.

My first experience in Uptown was driving to the Riviera Theater on Lawrence and Broadway to see a band (GTR) play in 1986. My impression of the area at that time was that it was kind of a dump. And not much has changed.

That is why I would like to see the alderman change. Shiller has been re-elected several times since but by some close margins. Uptown has made some improvements over the years but it seems that it is the residents who are cleaning things up and with resistance rather than help from the alderman.

I'd like to ask everyone to vote for Cappleman but I realize that most who read this blog are not registered to vote in the 46th ward of Chicago. I hope Shiller respects such rules regarding voting but I doubt it. With all the complaining about vote fraud in local and national elections I think it would be a good idea to purge the entire voting register nationwide and then allow all the living citizens to register, only once each though.

I don't know if I want to make a prediction on today's election but since others have gone on record (IrishPirate: Cappleman 7500 - 5700, Russ Stewart: Shiller will win again, but just barely, WTH: Cappleman, as long as WE ALL VOTE!) I will go on record too: Cappleman by 1,000 votes. Shiller seems to rely on bribing and bussing her voters to the polls and I don't think she will be gaining any voters this time so a big turnout will favor Cappleman.

Either way the blogger who runs WhatTheHelen did a fine job and spent a lot of time providing a good service to the community. I'm not sure when the election results will be known but hopefully tomorrow night I will be hoisting a glass of my finest home brewed beverage in a celebratory toast to WTH and the IrishPirate and Cappleman's victory in the 46th ward .

Update: I don't like what I'm reading at the Buena Park Message Board from a poll watcher:

* I have seen the same ID submitted 4 times.
* I have seen 6 people that early voted attempt to revote
* I have seen Shilleristas, literally bring in High and Drunk people and try to "help" them vote, saying they needed assistance.

Turns out the lady trying to Vote for the drunk people is Connie Dwade, an election judge across the street in a different precinct, that’s right, she abandoned her post to commit voter fraud.

The judge there appears to have been in control but this is just one precinct.


Roller Coaster Stock Market

I have been watching to see when the beautiful trend was going to end. After today it is pretty easy to say it has. In fact, I was just sitting down to write this post at a little before 2 p.m. Chicago time when I was pulling up a financial page when I saw that the Dow was down 500. The drop from -280 to -500 happened in not more than 5 minutes from what I can tell. Drudge had a siren going with a warning "Dow plunges more than 280" and next thing you know it was "Dow plunges more than 500" which is what it says right now (2.45 p.m.) with the Dow down about 380. Prices are flying so fast they can't keep up with their headlines! **Update** The Dow's plunge at 2 p.m. was triggered by a glitch in the system caused by a flood of sell orders.

So what is happening in the world that changed. First and foremost would have to be the change in policy of the Chinese towards stock speculation which brought down the Shanghai composite 8.8% today. Next we have US existing home sales increasing but prices falling and, finally, durable goods plunged. Consumer confidence set a new high which makes sense if we haven't entered a recession, yet.

Corrections are notoriously hard to gage in terms of time and price level. I do think this is just the beginning and that the most recent highs in the indices will not be breached for awhile. So reduce your exposure to equities and watch the fun. Also, don't wait to long. Stocks always fall much faster than they rise.

More later on implications for the dollar and interest rates. (Hint, I don't know but probably lower and lower.)

Monday, February 26, 2007


Greenspan Warns of Likely U.S. Recession

Now that he can tell the truth Greenspan is speaking in language even some non-economists can understand.

"When you get this far away from a recession invariably forces build up for the next recession, and indeed we are beginning to see that sign," Greenspan said via satellite link to a business conference in Hong Kong. "For example in the U.S., profit margins ... have begun to stabilize, which is an early sign we are in the later stages of a cycle."

"While, yes, it is possible we can get a recession in the latter months of 2007, most forecasters are not making that judgment and indeed are projecting forward into 2008 ... with some slowdown," he said.

Fourth quarter GDP came in at 3.4% which is much higher than predicted and gave pause to many of us who were pointing to the second and third quarter as proof of the slowdown. It turns out that GDP was pumped by inventory growth which was actually declining which will lead to a steep revision on February 28th.

On the silver lining side of the ledger:

The faster inventories contract so they are in line with demand, the faster production will resume in the nation's factories, the theory goes. That means growth should be stronger in coming quarters.
The other source of the downward revision comes from the trade gap. And although the trade gap is larger than suspected, it's up largely because U.S. consumers demanded more imports. That signals that the economy is fundamentally sound, the argument goes.

You would have to believe that Bernanke was a wizard to pull off this remarkable reimagining of how the economy is going. It is always possible to say that weakness just means we are coming in for a soft landing but you'd be foolish to bet on it.


James Cameron claims to have found the tomb of Jesus

Lots of problems with this claim. What I am sure of is that we are all hoping for a moment like this.

Sunday, February 25, 2007


Ayaan Hirsi Ali pwns Darrell Issa

I saw this on Real Time w/Bill Maher. A show I usually skip. I check who is on and if it is anyone interesting I watch them. (Thank G_d for Tivo.) Ayaan Hirsi Ali is always worth catching and this show was wonderful because liberals have a really hard time criticizing women, especially black women, especially if they are living in the West because they escaped an arranged marriage. So AHA got her chance to speak without some inane Hollywood moron interupting her. This weeks moron was Steven Weber.

I was not disappointed but not for the reason that I thought going into watching the show. It turns out the real moron was Rep. Darrell Issa (R-California). Watch and enjoy.

So which is more terrifying? He did not know about Dhimmitude or he knew and still wanted to perpetuate the myth of Christians, Jews, and Muslims living in peace for a thousand years in the middle east? Answer: the latter.

John O adds: What is truly terrifying is that Issa is perfectly representative of our entire political class. Newt Gingrich (41:55) observes:
...but we are in a fight with the elites. The elites, just as in the 1930's the English elite was desperate not to think of Adolf Hitler. The American elite is desperate not to confront how serious this is because it will shatter their entire worldview. And so they are doing everything they can to avoid it. And, sadly, the president, who has many strengths, does not have the strength of being articulate. And this is when you need somebody like Lincoln.
Exactly. Someone who, unlike Bush, is articulate and tough; willing to be direct when speaking about the war and to fight entrenched interests in Washington if doing so proves necessary to effectively prosecute the war. So far, the only candidate who seems to have these qualities is Rudy Giuliani.

Bill C adds: Take a hard look at Romney.

Saturday, February 24, 2007


Term limits, Self Defense, Funny Math Answers

If there was ever an argument for term limits this episode would be it. It seems such a disgusting abuse of power that it would have to be illegal. It is much to the Republican parties shame that Trent Lott is back in power and is using his power for a vendetta.

You have to love the American spirit. Law abiding and ready to enforce that law at any moment. Also, very neat. (Via HotAir.)

After the attack, they put Segura's body on their bus and found a police officer in Limon to report the incident.

I never had the guts to do this in school. Matt, anything like this to share? (Via Ace.)

Thursday, February 22, 2007


Election Time in Helengrad

Helengrad as in Helen Shiller's 46th ward in Chicago.

Things are getting interesting in the neighborhood. They have been for a while now as the election next Tuesday draws near. There is a blog (What the Helen?) dedicated to tracking the election and ousting the current 'alderbeast' in favor of challenger James Cappleman. Though I probably don't have much in common with the site operator (think Kos) in politics beyond the neighborhood I think most of the content at WTH is good and there are links to back things up. The guest blogger, 'IrishPirate' is funny and often posts video documenting the ward's troubles and most recently some shenanigans with the vote.

Shiller has been the alderman for almost 20 years now and has done nothing to make things better there. To me her plan seems to be to keep the property value down in the name of helping the poor out by giving them a place to live. A few people on various blogs have commented in favor of Shiller for just that reason. They don't want to have to move so a little dirt (gangs, drugs, violence, graffiti) serves a purpose. I am supporting Cappleman for just the opposite reason.

I don't like the fact that some people are only concerned about the cost of rent and not the safety issues but they are entitled to their opinions and their vote. What I am angry about are some of the election irregularities that are in some cases illegal and at best just immoral.

The Chicago Tribune endorsed Shiller and when listing their reasons included two that were false concerning business developments in the ward. That was lazy on their part. A few people have tried to find evidence that Target is really planning a store for the Wilson Yard project and have come up empty. Shiller refuses to prove that she has a deal in place. The other development concerned a movie theater that was cancelled a year ago.

In addition to this the Tribune does business with Shiller through a parking deal for the Cubs. That deal seems shady to me but I've not looked into it myself.

There is a photo of a Daley/Shiller campaign sign posted at a church which is both a tax exempt organization and a polling place.

Shiller has been accused of buying votes with cigarettes and with five dollar bills in the past but this year she posted this flyer in an assisted living building offering free pizza. Of course people were encouraged to bring their photo id since there would be a bus taking people to the polls to participate in the early voting process that is becoming more popular.

A city state vehicle is being used to give out picture id's (required for early voting) in front of Shiller's ward office. I'm not against helping the less fortunate and I don't want to deny anyone the right to vote but I don't trust what I'm seeing. All it takes is one bogus vote to cancel out my vote.


Today's American Political System: Time to return to States Rights

The Democrat's electoral success in the post Vietnam era has been more the result of Republican failures than public acquiescence to the Democrat's message. The Democrats are a party based on group identification, a coalition of special interests who are tied together by a common desire for power with which to benefit their different constiuencies. This began to unravel in the 1970's when the counter culture of the youth movement clashed with the solid middle class values of Union members. The declining membership of the Unions all but guaranteed that the Democratic conservatives would switch to the Republican party and this is most evident in the Southern states becoming a Republican bastion. This also all but guaranteed that the Democrats would become a minority party and this puts them in a very bad position.

They are dependent on groups with sometimes clashing interests staying loyal to the party because they get things done. No power means nothing gets done. The American political system does not reward moving outside of the two party system so these interest groups understand they are stuck. However, our Federalist system does allow great disparities within the party. If you can't get your legislation passed nationally then try locally. Again, unfortunately for the Democrats, they have done everything during their years in power to erode states rights making winner take all national elections all the more important.

One of the reasons that I am not concerned about the Democratic takeover of congress in because it was done, brilliantly, by appealing to middle class voters who were turned off by a spendthrift Republican congress, numerous scandals, and relentlessly negative war coverage. If I am right about voters motivation then the next election should return the Senate to the Republicans if not the House. Also, what this should do is disabuse the Democrats of the notion that they are a majority party that only needed to find a formula for defeating the Republican attack machine.

It is my fervent hope that with electorate so divided and new and, perhaps, long lasting coalitions based on geographic proximity will return governance to the states. That New York liberals will decide that they do not want to be governed by southern Republicans and will vote to devolve power. This will require the defeat of the congressional Democrats and a Republican party to return to its small government roots. That time will be upon us after the end of the next election. If conservatives want to strengthen states rights they need to reach out to the left side of the blogosphere because a shift in power this momentous requires bipartisan support. We should also realize that big government Republicans will resist releasing power because they have caught the Washington disease.

Wednesday, February 21, 2007


Baby News

First the latest pictures.

I don't know if you can see it but the baby looks as if it is smiling, or has gas, or is relieving himself because the technician said his bladder was full. Little Gus is 27 weeks and everything is looking good except for one thing. The placenta is low and coming close to covering the cervix which would be a placenta previa, the same problem we had with our last pregnancy. What this means is that Inna must be very careful about exerting herself which means we are going to hire someone to clean the apartment or I could get off my butt and do it. Since she had a caesarian section less than two years ago we knew that she would be having a c-section this time around. Because of the placenta being near the cervix that means we are aiming for 38 weeks. We are both happy to have the baby a little early. Circumstances might make that earlier. I did not know this but the doctor said we would not have to worry too much about lung development after 34 weeks. That means no steroids for lung development but probably some time in an incubator.

Starting in a few weeks we are going to the doctor weekly for check ups and fetal stress tests. They have a tiny treadmill the baby will "run" on while electrodes monitor the babies heart rate. At least that is what I imagined when the doctor told us about it. It does involve monitoring the babies heart rate for 20 or so minutes to make sure he is not getting stressed out. We have to watch for bleeding and activity. So far, the baby has been a dancing fool so he is not had any trouble to date. We also found out we will be delivering at Rush North Shore which is a few minutes from our doctors office.

Inna is having trouble getting comfortable and says she is bored with being pregnant. She wants the baby now but I told her she needs to enjoy this time because she will be very busy soon. I haven't received a call from the assistant to Rahm Emanuel so I am going to call them tomorrow. It sure would help if Inna's mother was able to be here for the birth. Unfortunately, the heartless immigration system does not consider hardship into its calculation of who gets into the country to visit.


Geffen and Obama vs. Hillary

= Fun for us! (Via Drudge.)

Obama's team responded a few hours later. Communications director Robert Gibbs just released the following statement:

“We aren’t going to get in the middle of a disagreement between the Clintons and someone who was once one of their biggest supporters. It is ironic that the Clintons had no problem with David Geffen when was raising them $18 million and sleeping at their invitation in the Lincoln bedroom. It is also ironic that Senator Clinton lavished praise on Monday and is fully willing to accept today the support of South Carolina State Sen. Robert Ford, who said if Barack Obama were to win the nomination, he would drag down the rest of the Democratic Party because he's black.’"

Among other things, Hollywood and music mogul Geffen had told Dowd, "God knows, is there anybody more ambitious than Hillary Clinton?" and "Obama is inspirational, and he’s not from the Bush royal family or the Clinton royal family. Americans are dying every day in Iraq. And I’m tired of hearing James Carville on television.”

Read the whole glorious thing. I wonder when Geffen figured out that the Clinton's had trouble with the truth?

P.S. I wonder what this will mean for the Clinton/Obama ticket. Imagine how awkward will that Geffen fundraiser will be?

Monday, February 19, 2007


Scalia Vs. Breyer

Rumble in the robes. John asked me if I had seen this and I hadn't. I assume this is the debate you were talking about. (Aired on 1-06-07)


Iraq the Model: Surge is working

Attacks in Baghdad down 80%.

Not only official statements say so (Defense ministry officials said today that attacks are down by 80% in Baghdad). It’s a reality I live in nowadays, at least in my neighborhood and its surroundings. It is also what I hear from friends and relatives in other parts of the city.
We are hearing fewer explosions and less gunfire now than two weeks ago and that, in Baghdad, qualifies as quiet.

I agree with what some experts say about this lull in violence being the result of militants keeping their heads down for a while. It is also possibly the result of the flight of the commanders of militant groups. Grunts left without planners, money or leaders wouldn’t want to do much on their own.

During my tour in Baghdad today I had to pull over to be searched at several checkpoints — something that has rarely happened to me before. When you are searched soldiers or policemen check the identity cards of passengers, and the registration papers of the vehicle along with a thorough physical search. Checkpoints deal even more strictly with large vans and cargo trucks.

The IA and police seemed to have adopted an Israeli tactic concerning checkpoints to make them more effective and less of a target.

The interesting thing about new checkpoints is the constant shifting of their location. One hour the checkpoint would be here and two hours later it would relocate to another position within the area. I think this helps security forces avoid becoming targets instead of hunters.
In addition to soldiers and policemen, most checkpoints have one or more traffic policemen reportedly being equipped with laptops that enable them to flag suspected vehicles by offering instant access to vehicle-registration databases.

Nice to hear some good news coming out of Iraq. We'll see if the MSM picks up on it.

Friday, February 16, 2007


Doesn't this sound like one of our blogbrothers?

Except for the dropping out part. Does he still even read the blog? Hello?


Death by a thousand drips

The Doc over at the Autopsy put together this video about the Democrat's manly new strategy to cut and run without actually voting to cut funding.


War on Terror: European Edition

It seems that the Europeans have finally entered the fight. So what can we count on them to do? How about arm the enemy!

Well, here's an item that doesn't seem to have been manufactured by Dick Cheney. According to a report in Britain's Daily Telegraph, U.S. forces in Baghdad have recently discovered 100 high-powered sniper rifles made by Austrian gun-maker Steyr-Mannlicher. The .50-caliber Steyr can accurately fire an armor-piercing round at a range of 1,500 meters. The weapon is good against Humvees, helicopters and body armor.


In 2004, Iran purchased some 800 Steyrs, allegedly for use against drug traffickers. At the time, both U.S. and British officials urged the Austrian government to bar the $15 million sale, fearing the weapons would fall into enemy hands. Former Austrian Chancellor Wolfang Schüssel thought otherwise, and let the deal go forward. To better grease the skids, then-Steyr-Mannlicher CEO Wolfgang Fürlinger made the case that the weapons were basically harmless and that Tehran had signed "end-user certificates" guaranteeing they would not be re-sold, according to the German newsweekly Der Spiegel.

So Austrian sniper rifles are making it into the hands of Iraqi insurgents via Iran. And the usual suspects are asking whether the President has a right to go to war with a country that is supplying our enemies.

Next we have American intelligence agents in the middle of a Italian political fight.

ROME, Italy (CNN) -- An Italian court has ordered 26 Americans and six Italians to stand trial in connection with the CIA's "extraordinary rendition" program.

The 35 are scheduled to go to trial June 8 for allegedly kidnapping and transferring a terror suspect to third countries. Three other Italians face charges of complicity in the kidnappings.


Prosecutors allege that a CIA team working with Italian intelligence officials seized him, eventually flying him to Egypt, and used torture as part of an interrogation there.

In an earlier interview, former CIA analyst Michael Scheuer said the Italian military secret service had approved the operation, and CIA sources who refused to be named told CNN in 2005 that the agency had briefed and sought approval from its Italian counterpart for such an abduction. [Emphasis added.]

It is getting easier to see the day when the U.S. and the E.U. go to war. This is not the first time that leftists have attempted to use European courts to go after members of the American military. I imagine some day they will actually gain custody of one of our citizens on human rights charges and we will have to read them the riot act. Better to save them and us the trouble now and spell out the consequences of such a show trial against the people who work to keep America safe.

Thursday, February 15, 2007


Mortgage Equity Withdrawals: The numbers

I thought I should give you the numbers to illustrate how much MEWs have added to the economy.

The sharp increase in prices of homes during 2004 and 2005 helped households support their expenditures by enabling large mortgage equity withdrawals amounting to $544 billion in 2004 and nearly $600 billion in 2005.

The recent sharp drop in home prices has reduced the volume of mortgage equity withdrawals to an annual rate of $215 billion in the third quarter of 2006 (see chart 2) from a peak rate of $730 billion in the third quarter of 2005. This significant reduction has trimmed the pace of consumer spending. Further reductions in home prices are predicted to translate into soft growth in consumer spending in 2007.

Assuming MEW continue to fall we are talking about half a trillion in spending that consumers will not be doing in 2007 that they did two years earlier. In the comments to this post I wondered what was going to drive economic growth sans MEW and, to be honest, I must conceed that there is undoubtedly some wealth effect from the stock market which has rallied 20% since mid-2006. That has to be worth a couple of trillion and undoubtedly mitigates flat to declining home prices. Maybe this is how it will work out. Stocks then homes boom in price forever allowing asset owners to finance an ever increasing standard of living. Or not.

When this stock market rally looks like it is ending, and it doesn't right now, then I owe you a post outlining specifics on how the impending financial disaster I keep predicting should unfold. Suffice it to say, I am more than a little embarrassed that the depression did not start in 2002. Five years on with economic conditions pointing to at least a slowdown this year I will have to hang up the bear suit if we weather this economic storm.



Sam Zell is selling

Its always a good idea to pay attention to successful people because they obviously know what is going on in their industry. Otherwise they wouldn't be rich. Well Sam Zell is very successful commercial real estate investor and he is selling his company. Why? Who knows? Maybe he is getting older and wants to try other things like buying a newspaper. Or he could believe now is a good time to sell.

I am not priviledged enough to be on Sam Zell's card list but John Maudlin pointed me to the link that has Zell's eCards from 1999 to 2005. All very clever but please listen to 2005, sung to the tune of Rain Drops Keep Falling on My Head but instead of Raindrops, it's capital that is falling on Zell's head and, as the song makes clear, it is the flood of liquidity that is diminishing returns. Very clever and it gives you an idea of the problem that an unrestrained money supply can cause. Too much money pushing up the prices of assets which lowers returns. Not a great enviroment for someone known as the grave dancer.

Zell seems to think it will take several years to work out this flood of capital. By work out I think he means falling prices. I wonder what was his message for 2006?

Diego adds: I was actually at a luncheon in January of 2006 where Sam Zell and a few others spoke and gave predictions on various topics. I have not followed Zell's career or his business dealings but found his real estate assessment interesting.

At the time he believed that the housing market would cool but not collapse or 'bubble burst' as some were predicting. If I recall correctly he suggested that home prices might dip slightly but overall they would remain steady for some time. He seems to have been right. No hurry to sell but also there was no more hurry to buy. People need to stop thinking about real estate fluxuation in terms of months and get back to thinking long term.

Bill C: A long period of stable prices is one possibility. Whether there is a collapse or not depends on the psychology of millions of owners and investors. I imagine the Fed will be doing everything it can to prevent a panic and they did a pretty good job in 2002/2003. It is just impossible to predict if they will succeed this time so the correct play is to sit on the sidelines for a little time and wait for inventories to drop and housing starts to pick up.


How Bono avoids paying taxes

What do Bono and Leona Helmsley have in common? He also thinks the little people of America should pay taxes, not him. (Via Drudge)

"What a group like U2 or the Rolling Stones has done is create a holding company that owns the rights to their songs and their name," Richard LeVine, an international tax expert who counsels corporate and individual clients on asset protection for the Connecticut-based Withers, Bergman LLP, tells ABC News.

"So every time their song is played on the radio, or they sell an album, royalties are paid to their Dutch company, which allows them to collect millions of dollars in royalties tax-free and lowers the profits they're paying taxes on in their home countries," LeVine says.

Funny thing is, ABC has a poll on this issue the poll question being:

Bono has lobbied industrialized nations to provide $50 billion in aid to Africa, while U2 has largely avoided paying taxes on its earnings, estimated to be around $900 million.

Is it ethical for Bono to avoid paying taxes while advocating countries to give 1 percent of their GDP to fight poverty?

And the choices are,

No. Bono should pay his taxes fairly so industrialized nations will have money to send to Africa.


Yes. Bono has been invaluable in raising awareness of global poverty.

At the time I voted of a total of 995 there were 774 No votes and 221 Yes votes. I would like to think that the people voting yes misunderstood the question or were just pranksters but its possible they were SP who just did not want to see one of their saints slandered.

Saint Bono. Patron Saint of the tax shelter.

Diego adds: Some of this hit the fan last year:

Bono, the rock star and campaigner against third-world debt, is asking the Irish government to contribute more to Africa. At the same time, he is reducing tax payments that could help finance that aid.

After Ireland said it would scrap a break that lets musicians and artists avoid paying taxes on royalties, Bono and his fellow U2 band members this year moved their music publishing company to the Netherlands. The group, which Forbes estimates earned $110 million in 2005, will pay about a 5 percent tax on their royalties in the Netherlands, less than half the Irish rate.

Sounds like a politician to me.

Wednesday, February 14, 2007


You're not going to believe this...

...but the guy who shot up the mall in Salt Lake City was a Muslim. Yeah, yeah, I know just hard to fathom. When I heard about this I wondered whether this might be connected to terrorism. To be honest, we don't know if it is connected to terrorism just because the shooter was Muslim. But it doesn't exactly make one discount that possibility, does it?

Since this incident occurred in the distant past it had fallen down the memory hole. Afterall, I am American and I have to get on with debasing our culture today and who can keep up with this stuff?

Gee, Tom Clancy must be prescient.


New French Anti-Tank Missile


Number of vacant homes for sale surges 34%

This headline is from two weeks ago, but hey, I was on vacation.

"We have more than a million housing units of excess supply," said James O'Sullivan, an economist for UBS. "If you are looking for evidence that the worst is over for housing, you're not going to find it in this report. This argues that housing starts need to go down more."
In the past 12 months, housing starts have slumped 18% to a seasonally adjusted annual rate of 1.64 million.

So we have an over supply of houses, plus we're near an all time high in home ownership, and that supply is being added to. Look at the graph in the article to get some perspective on the size of the over supply. When you put this together with the fact that home construction/remodelling has been the driver of economic growth for the past 5 years then there is no doubt that the housing market is going to be a lodestone around the neck of the U.S. economy for some time.

Monday, February 12, 2007


GDP minus Mortgage Equity Withdrawal

Cashing in home equity has been the story of the decade. Home equity has been the driving force behind economic grow since the recession of 2001. Here is a graph illustrating how anemic growth would be without HELOCs (Home equity lines of credit). We are literally spending our savings to finance our lifestyles. The big question is why has economic growth been so weak? Undoubtedly the wealth effect of the Nasdaq bubble bust has been huge. With the stock market rallying strongly, however, you would think that we would begin to see the economy stand on its own two feet without the need of home equity steroids.

We will have to see what happens in 2007. As I have pointed out in the past, deflation is a contraction of credit. Borrowers simply stop borrowing to finance out the expectation that prices will continue falling and the central bank can continue to lower the price of credit but that will do no good as long as the public expects falling prices. So you can call this the Sammy Sosa economy. With the steroids gone it seems all but certain that the economy will deflate and retire.

P.S. One more thing. This year and next will see trillions of dollars in adjustable rate mortgages, which were originated in 2002-2005, adjust to higher interest rates. Already record rates of mortgage defaults will continue to increase barring a stupendous fall in interest rates. A fall that could only come from a very significant recession. So heads is recession and tails is depression.

Friday, February 09, 2007


We're the Government, and You're Not


Rahm Emmanuel is at Jewel

I just back from the Jewel at 4200 N . Lincoln. I started to tell him that the online gambling ban would be a good issue for the Democrats and he said they will be looking into the banning gambling during the next session. Huh? No, I explained. This is the ban that Frist push through during the last session. He realized that he had been caught not paying attention to what I said and attempted to brush it off as not understanding me.

Anyway, his assitant promised to look into getting my mother-in-law into the country so I gave them my contact info and she said she would call next week. When I described the problem she knew exactly what I was talking about which makes me think a lot of people are having similar trouble with immigration. You have to prove to them that you will return to your home country and, frankly, almost no one in Russia has enough assets anchored in the motherland to keep them there. For what it's worth, if they help me do this I will be honor bound to vote for him.


Karl Rove insults blue collar work/American workers

Everyone of the contributors on this blog has worked manual labor, blue collar jobs during their teens. I think it builds character and a appreciation for education. It also helps to instill the idea that their are no stupid jobs, just stupid people. All labor which is done to the best ability of the worker is noble. It is a very elitist mindset that disdains hard work.

This is why the president's "willing worker/willing employer" immigration extravaganza is morally wrong — it's not just that it will cost taxpayers untold billions, or that it will beggar our own blue-collar workers, or that it will compromise security, or that it will further dissolve our sovereignty. It would do all that, of course, but most importantly it would change the very nature of our society for the worse, creating whole occupations deemed to be unfit for respectable Americans, for which little brown people have to be imported from abroad. In other words, mass immigration, even now, is moving us toward an unequal, master-servant society.

To borrow from Lincoln, our progress in degeneracy appears to me to be pretty rapid. When it comes to this, I should prefer emigrating to some country where they make no pretense of loving liberty — to Saudi Arabia, for instance.

Via HotAir.

Thursday, February 08, 2007


Edwards takes principled stand

That's right, he is keeping the potty mouthed radical feminist who says she never meant to offend anyone's religious beliefs.

Why would anybody be offended by this?

Q: What if Mary had taken Plan B after the Lord filled her with his hot, white, sticky Holy Spirit?

A: You’d have to justify your misogyny with another ancient mythology.

You Christofascists just need to lighten up. Edwards has made a poltical calculation and decided he needs the nutroots to win the primary. After that, we'll see. It was fairly clear that he would have caught a lot of grief if he fired Marcotte and Melissa McEwan. It is also clear that he will catch a lot of grief by keeping them but the question is which move is more likely to get him the nomination and on that score, pandering to feminists is better than caving to Catholics.

Our job is to make the Edwards campaign suffer for its decision and the best way to do that is to make Marcotte's and McEwan's noxious words common knowledge.


Bubbleheaded thinking at the Wall Street Journal

I remember studying economics, national income accounting in particular, with the simple definition of Savings being Income minus Consumption. The WSJ thinks that this definition is too "narrow."

As a statistic, however, the official "savings rate" is nearly as useless a guide to prosperity as the trade deficit. In the government accounts, what is called the savings rate is literally income less consumption. But the government defines income too narrowly and consumption broadly. For example, "income" doesn't measure capital gains (whether realized or not), the rising value of your home, or even increases in your retirement accounts.

That's right, your unrealized gains on Yahoo in 2000 was savings just like your unrealized gain on your condominium in Miami is savings. Another definition I learned was Investment and there was a reason that Savings and Investments were not considered to be the same thing and that has to do with risk. It is the bubbles we have lived through that makes outsized returns on investment seem to be as riskless as a Treasury note.

Think about how you calculate your own personal "savings rate." Do you merely add up what you make in salary in a year minus what you spend? Or do you sneak a peak at whether your IRA increased in value, or check the sale price your neighbor got on his home to figure out what you might be able to get for yours? By any normal definition, "savings" should include your increase in total assets--in other words, your gains in overall wealth.

But you don't consider the appreciation in the value of your home as savings for a very good reason. The value of your home could depreciate and you have no intention of cashing in the equity in your home. At least you shouldn't unless you have a very good reason. Savings should be a very stable amount of money that you have put aside in an interest bearing account for use during a rainy day. In the past, economists distinguished between investments, whose value was volatile, and savings. It takes a very long bull market to make people forget that counting your stock market gains as money in the bank is foolish. I take this article as another sign that people have forgotten the lesson of 2000, if it was ever really learned.

All of this is from an article decrying angst over the falling savings rate which is a function of Americans ever increasing willingness to borrow money against the value of their assets. They characterize this as a non-problem. All financial disasters are at their core a mismatch of terms between assets and liabilities. In other words, the balance, in time, between what is owed and the collateral for those loans does not matched. During the S&L crisis of the late 80's it was money borrowed for short durations used to buy assets whose payoff was much longer in the future. And the pattern has repeated with a flattening yield curve (Short term interest rates higher than long term rates) forcing the unwinding of similar trades. Borrowing against your home to pay for consumption will always end in disaster when almost everyone is doing it. The only thing left to wait for is asset prices to start falling. Then the WSJ will get its 'Depression.'

Wednesday, February 07, 2007


Amanda Marcotte was probably will be fired and other funny stuff

Amanda Marcotte and the Golem from whom she stole her hair style.

And a promise that there is absolutely nothing about astronuts in this post.

If you don't know who Amanda is then you are not a far, far, far left wing feminist. Or you don't like reading what such feminists write on their blogs to mock them. You know where I stand. Well if you have had you're head in the sand you might have missed that this really unhinged young womyn was hired by the Edwards campaign to be their blogmistress and this has been the talk of the right wing blogosphere for the past week. Apparently one of the grown ups at the Edwards campaign realized the mistake they had made and fired her. Watch for the nutroots to turn viciously on the Edwards campaign. Couldn't happen to a nicer guy. Unfortunately, it might enhance his chances of getting elected given the past electoral success the nutroots has enjoyed.

In other news, Charlize Theron tries to distract a CNN talking head from questioning her assertion that censorship in America is just as bad as censorship in Cuba by offering to make out with him. No, I am not kidding.

Mark Levin teaches us some new things about Keith Olbermann. Bad things. Definitely not safe for children. Let's put it this way, Keith is a refrigerator full of body parts away from being a heterosexual Jeffrey Dahmer.

There is a new show on Fox News at 1 am Chicago time called Redeye. It is from a conservative point of view and it is funny.

Hard to believe it is only Wednesday.


I can't believe I did not think of this until now.

Well you came and you blogged about hating Christians
so I sent you away, oh Mandy
well we didn't know you were man-hating feminist
and I want to get elected, oh Mandy
I'll try and add more tomorrow if the muse arises.

Update (After a good nights sleep.)

Now that I have had some time to think about it this is what I have so far.

I remember running in 2004
On a ticket with an utter bore
A really long face
A politically tone deaf ear
Had me screaming all night
That's why I fear

Mourning, another lost election
Happy Days for Republicans
After reading Pandagon
All its earthy words
I now realize
I've opened a can of worms, Oh Mandy

Well you insulted Catholics
So I sent you away, Oh Mandy
Well you hate men with a passion
I don't need that in my campaign, Oh Mandy

Monday, February 05, 2007


O'Reilly goes after Arkin

I have almost never seen him this pissed off about anything. (Via LGF) Only the moonbat kid whose father died during 9/11 set him off more. Here is the commentary section w/ info babe Michelle Malkin. (Via HotAir)

I think Arkin's days are numbered at either WaPo or NBC or both. When O'Reilly starts crusading he doesn't stop. I picture snotty Fox News producers following Arkin until he takes a swing at one of them just like Ward Churchill. "Why do you hate America, Mr Arkin?" (Pop.) Then he will go back to Human Rights Watch where he doesn't have to temper his leftism. Just want to get this prediction in eary because if I could still bet on Tradesports and Arkin's career was on it, it would be a no brainer to short.


Gran Turismo HD

The Playstation network is offering a section of the game as a free download and I have been playing it. These pictures don't do it justice. It is beautiful and a lot of fun to play. I could use your steering wheel Bill. Next time you're in town maybe the game will be released. It is on my must have list.

They also offer a portion of Motorstorm which has you racing on a mesa somewhere. It is fun to launch the dirt bike a thousand feet in the air to see how it lands.

Friday, February 02, 2007


Bush Derangement Syndrome patient zero is dead

Molly Ivins started hating George W. Bush before it was fashionable. From the thankfully few times I read her column she was nothing if not vitriolic. Whenever I hear criticism of Ann Coulter and fell slightly guilty about laughing at something she has written which is mean and/or unfair I remember Molly Ivins because she was just as bad. Just as mean and cruel. And I also remember that they started it first.

So sit back and watch the affection that is being poured out for a mean person and realize one persons joyful outrage is anothers bile.


The Aspirant Confiscator In Chief

Addressing the DNC winter meeting, Sen Hillary Clinton said:
The same is true with energy independence. The Democrats know what needs to be done. Again we're working to try to push this agenda forward. The other day the oil companies recorded the highest profits in the history of the world. I want to take those profits and I want to put them into a strategic energy fund that will begin to fund alternative, smart energy alternatives and technologies that will begin to actually move us in the direction of energy independence.
Which reminded me of what Clinton said at a Democratic fundraiser in June of 2004:
"Many of you are well enough off that ... the tax cuts may have helped you," Clinton said, according to the Associated Press. "We're saying that for America to get back on track, we're probably going to cut that short and not give it to you.

"We're going to take things away from you on behalf of the common good."
At least then it was "we" rather than "I."


Women more critical of men

Evolutionary biology is back and it's a bitch.

Nobody would dispute that, in selecting a mate, women are more discerning than men. This is an evolutionary necessity–a woman must carefully evaluate who is likely to remain loyal to her and protect and provide for her and her children. If a man and a woman go on a blind date and don’t hit it off, the man will shrug and say “it went OK.” The woman will give five reasons why he’s not right for her.

A woman’s discerning, critical nature doesn’t disappear on her wedding day. Most marital problems and marriage counseling sessions revolve around why the wife is unhappy with her husband, even though they could just as easily be about why the husband is unhappy with the wife. In this common pre-divorce scenario there are only two possibilities-either she’s a great wife and he’s a lousy husband, or she’s far more critical of him than he is of her. Usually it’s the latter.

Despite this week’s media homilies, it’s doubtful that many men or women are truly happy alone. Much of women’s cheerful “I don’t need a man/I love my cats” reaction has a hollow ring to it, and sounds a lot more like whistling in the dark than a celebration.

Yes, there are some men who make poor mates, but not nearly enough to account for the divorce epidemic and the decline of marriage. While it’s easy and popular to blame men, many of the wounds women bear from failed relationships and loneliness are self-inflicted. [Emphasis added.]

A lot of lonely women bought into the fish/bicycle paradigm years ago. The feminist effort to drive a wedge between the sexes is built upon a very deeply ingrained habit of the female sex. Hyper-criticism. Rather than living in the echo chamber I hope many women will realize that men are not that bad, they are not that great, and we are both better off together.

At least for the time being.


Super Bowl Prediction

I'd like to see the Bears win on Sunday. It would be more fun for me and make for a great party atmosphere here in Chicago. But I'm afraid I think the Colts are going to win.

I don't think Grossman's passing will be a big factor in this game despite what I'm hearing elsewhere. He will make some big plays and he will make some mistakes but I don't believe that will be the key to the game. If the Bears win it will be with turnovers and special teams plays. They wont control the game with the run. They might have success on the ground but not enough to dominate. I think Grossman throws a TD pass or two as well as an interception or two but where he might have a key impact is with fumbles. If he can't feel the pressure coming he is liable to fumble the ball more than once. The Colts wont be in the backfield every play but they will get there and Rex needs to be ready for that.

The Colts will move the ball with short passes and with the run. The Bears defense is good but they can't shut down the Colts offense. The Colts might be the team playing ball control and slowly moving down field the way they did against the Patriots two weeks ago. I think they faced a pretty good defense in Baltimore three weeks ago and were able to win the game on the road. I don't know if the Bears are ready for such a big victory yet. They haven't played a playoff game away from Soldier Field in some time and I think that matters.

I think this will be a high scoring game and the Colts will come out on top. My prediction is Colts 37 Bears 27.

And as long as I am making a prediction how about something long term. Bears over the Colts in a rematch in February of 2009. The Bears schedule will be brutal next year as they face the AFC West and NFC East divisions as well as New Orleans and Seattle. They might not make the playoffs next year but they will be back in 2008 ready to win it all.

Bill C:

What's the spread?


Arkin's meltdown

In what has become the most interesting story, for me, of 2007 Bill Arkin journalist activist blogging via WaPo on national security has decided American soldiers need to, "I just say that when the troops start to express their dissatisfaction with the American public, they should look in the mirror and ask themselves whether or not the American public is their servant or they're the servant of the American public. (Voice louder) I nowhere suggested that the troops shouldn't have the right to speak up. I merely said we shouldn't put them on such a pedestal that they are above criticism IF THEY SAY STUPID THINGS!."

All of this stems from a post Arkin made calling our soldiers mercenaries because of this NBC report in which some soldiers suggested that supporting them meant also supporting the mission. Arkin issued a non-apology:

These men and women are not fighting for money with little regard for the nation. The situation might be much worse than that: evidently far too many in uniform believe that they are the one true nation. They hide behind the constitution and the flag and then spew an anti-Democrat, anti-liberal, anti-journalism, anti-dissent, and anti-citizen message that reflects a certain contempt for the American people.

That's right. They aren't mercenaries (for money) but they do hold the American people in contempt. Sheesh. Ironically, as was pointed out on Ace, Arkin is making the anti-chickenhawk argument for us. Those who haven't served deserve to have their opinions heard.

MM linked to Johnny Dollar who has the audio of Arkin on the John Gibson radio show. Nothing like pure anger bubbling to the surface. Apparently Arkin's piece has been pulled from the front page of WaPo's website and this story might get picked up by the MSM. I believe the military characterizes this as red on red. We'll see how far up the media chain this goes. I am quite sure the more exposure this gets, the worse it will be for Mr. Arkin. He is not just a nobody. He appears on other media outlets representing WaPo concerning national security so his opinions reflect on WaPo. A public meltdown of this magnitude might affect his career.

Stay tuned.

Thursday, February 01, 2007


PC or Mac?

I don't know. But Apple's recent ad campaign got me thinking and looking around for other opinions. I'm not currently in the market for a computer but recently I began sharing my aging laptop with an inexperienced and impatient button pusher which has caused me to consider the possibility of being forced into the market at any time.

When I purchased my laptop with Windows XP I didn't give the Mac any thought. I didn't know there was that much difference and the popularity of PC's and the ease software compatibility and availability seemed to make it an easy choice.

I'll have to consult some Mac users to see what they think. Are Macs immune to viruses because their operating system is better or just because they have no market presence to attract trouble? Do Macs run better and thus crash less frequently or not at all?

My needs are for home and business use which I'm not sure a Mac is right for since I use a PC at work. I'm beginning to believe that Macs are much better for home use but not as compatible with the work applications I would need to run.

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