Brain Droppings

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 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.

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

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.

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.

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.)

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.

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

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.

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.)

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.

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.

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.

= 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?

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)

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.

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

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.

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.

# posted by Bill C @ 2:10 PM |