murder in the city

"always remember there is nothing worth sharing like the love that let us share our name."
-the avett brothers

ditty diego

from the article yesterday by james quinn: here are the main points from the article, excellent, read the whole thing if you have the time.

We know that Congress is corrupt and in the pocket of lobbyists. They show no courage to make necessary unpopular decisions because they won’t be re-elected. The founding fathers envisioned representatives who did their civic duty for a short time and then went back to their real profession. Almost 200 out of 535 members of Congress are lawyers and lifetime politicians. This explains much about our predicament. Term limits would inject our leaders with a dose of courage. Maybe they would do what was best for the country if they knew that they would only be in Washington for six years.

Outlawing lobbyists and PACs would remove the buying and selling of votes in Congress. We must remove the corruption from Washington DC.

The PAYGO rules that were allowed to expire in 2002 must be reinstituted. These rules would not allow new spending initiatives without an equal cut in other spending. These rules allow Congressmen to pretend to have a backbone and say no to constituent demands.

The banks that are insolvent will need to be nationalized, investors wiped out, and good assets sold off to good banks. Nouriel Roubini lays out a logical scenario. The sooner we purge the system of its bad debt, the sooner we can get this economy on a positive track.

Dr. John Hussman has a solution for the foreclosure disaster that would not stick the U.S. taxpayer with the bill. Banks could write down the mortgage balance but receive a PAR (property appreciation right) back from the homeowner. The idea is discussed in more detail here.

The U.S. carmakers need to be restructured within a pre-packaged bankruptcy. They want another $39 billion of your tax dollars. No more taxpayer funds can be wasted on these bloated pigs.

A truly non-partisan commission appointed by the President with the power to put forth a comprehensive plan to restructure Medicare, Medicaid, and Social Security for an up or down vote by Congress is the only way to create a viable future. Congress must be forced to confront this issue.

John McCain’s moderate approach of allowing a path to citizenship seems like the best immigration plan. Most came here to try and live a better life. If they have committed crimes or don’t follow the prescribed path to citizenship, then they need to be expelled from our country. We need to encourage foreign professionals to immigrate to America with incentives, if necessary.

If 50% of the $1.4 trillion annual military related budget was redirected to debt reduction, energy independence, and infrastructure rebuilding, we would actually get a positive return on our tax contribution. Our military is supposed to defend our country, not invade sovereign nations.

A “Manhattan Project” to develop new energy sources which would eliminate the $400 billion per year that we send overseas for foreign oil. The number of high paying jobs that could be created by building nuclear power plants, wind farms, and converting vehicles to natural gas would be in the hundreds of thousands.

A tax system that eliminated all the preferences and loopholes for corporations and individuals while lowering rates would be fairer. Maybe even our Treasury Secretary could do his taxes correctly. Congress and lobbyists use the tax system to push their agendas. A flat tax or replacing the income tax with a national sales tax are other possible options.

The Federal Reserve needs to be abolished. A currency backed by gold or a basket of precious metals would restrict what Congress could spend. This would save us from ourselves. The dollar has lost 93% of its purchasing power since Nixon closed the gold window in 1971 and the National Debt has gone from $389 billion to $10.8 trillion, a 2,800% increase in 38 years. Politicians will spend your money if they are given the chance. Let’s not give them the chance.

night of the lotus eaters

"get ready to shield yourself." - nick cave, "night of the lotus eaters" dig, lazarus, dig

i've got some goodies today. it's lucky friday. have you noticed people starting to say, "happy friday!" like it's a holiday? what is that? friday is not a holiday. it's a freaking day of the week. let's not start turning ordinary, mundane events, like a day, into a holiday. let's calm down people. the weekend isn't that great that we have to kick it off every week with a holiday.

anyway, check it. here is a great article by james quinn, former comptroller general of the united states. he says our current levels of asset acquisition by debt is not sustainable. who knew? "hey i'd like a new car, house, cell phone, television, i'm going to have four kids and my husband and i both make $15,000 a year with no college education. and i'd like that now!" see people, that's the definition of unsustainable. look to your left, now look to your right, you see it all around you.

here is nouriel roubini and mark zandi on charlie rose.

and finally, here's mish's take on nationalization.

what is everyone's opinion on nationalization? does everyone understand that nationalization does not have to be a permanent thing? you can nationalize a bank, re-organize, kick out the idiots who were in control, make it profitable again and sell it. that can happen. also, for everyone who keeps complaining that obama is going to turn this country into a socialistic society needs to freakin' wake up. this is a democracy. obama is not king. we can elect a new president in less than four years. he's not a freakin' dictator that can change our entire democratic system without our say-so. so freakin' wake up!

let me hear it all three or four of you that read this.

under pressure

i'm out on engagement for the next two months practically, so my entries will be brief and infrequent.

mish has some good stuff on the nationalization train.

roubini likes the idea of nationalization.

here are the details on obama's mortgage fix plan from marketwatch.

oil near $35.00.

that's all for today.

like dylan in the movies

i haven't finished my last batch of books, but i'm already ready to get moving on the next group. here are the ones in my sights:

1. the black swan: the impact of the highly improbably by: nassim taleb
2. origin of wealth: evolution, complexity and the radical remaking of economics by: eric beinhocker
3. stabilizing an unstable economy by: hyman minsky
4. the general theory of employment, interest and money by: john maynard keynes
5. short history of financial euphoria by: john kenneth galbraith

that's my short list.

here's the top 10 most forgettable presidents.

after visiting iceland on the honeymoon, i think norway would be where i want to go next.

i'm excited about the watchmen movie. don't know why. but here's a free video game online.

favorite waste of time

the great st. valentine race for love is over. we had dinner at bistro don camillo and then we went to a show at radio music theatre. i first went to radio music theatre with the youth group from ort. that must have been at least 12 years ago and i loved it then and it was great again. if you live in houston, you should really check this place out. funny, funny stuff.

bill moyers always has excellent interviews. here's one on the emerging banking oligarchy.

little bit of re-learning needed for the nationalization of banks.

don't eat the peanut butter.

sing another song, boys

phase two is underway. finally. month long funk is officially funked. hear the good news.

in other news: bologna is still gross.

halloweenhead

"it leads me through the streets at night,

that's alright, i just watch, i don't go inside.

it's all the same old shit again,

i've got a halloweenhead!"

-ryan adams

pretty weak lyric, right? hear it in the context of the song and you'll dig it. enough to type it at night on your blog. what? only i do that? whatever.

sound of silver

i ate an apple today for breakfast. my teeth are aching. is that normal? it's like a good ache though, like the skin of the apple cleaned my mouth. what's that old saying, an apple a day keeps the dentist away? right? yep, that's it.

"merging two zombie banks is like have two drunks trying to help each other to stand up."- Nouriel Roubini

speaking of roubini, here's what he has to say about nationalization:

"So why is the US government temporizing and avoiding doing the right thing, i.e. take over the insolvent banks? There are two reasons. First, there is still some small hope and a small probability that the economy will recover sooner than expected, that expected credit losses will be smaller than expected and that the current approach of recapping the banks and somehow working out the bad assets will work in due time. Second, taking over the banks – call is nationalization or, in a more politically correct way, “receivership” – is a radical action that requires most banks be clearly beyond pale and insolvent to be undertaken. Today Citi and Bank of America clearly look like near-insolvent and ready to be taken over but JPMorgan and Wells Fargo do not yet. But with the sharp rise in delinquencies and charge-off rates that we are experiencing now on mortgages, commercial real estate and consumer credit in a matter of six to twelve months even JPMorgan and Wells will likely look as near-insolvent …

…So while Plan A is now underway today’s very negative market response to this Treasury plan suggest that it will not fly. Markets were expecting a more clear plan but also a plan that would bail out shareholders and creditors of insolvent banks. Unfortunately that is not politically and fiscally feasible. It is thus time to start to think and plan ahead for for Plan N (“nationalization” of insolvent banks)."

so the stimulus was passed in the senate, soon to be ratified again in the house. here is how to know if it is actually working.

mish is not happy with bernanke.

if your a muppets fan, this article is like christmas dinner. what? check it out.

always something there to remind me

it's all stimulus talk, all the time. great graphical breakdown in the washington post. amazing graph. check it out here.

mish has got an breakdown and analysis.

geitner wants to bring in private investment as part of his financial rescue plan. it was supposed to be announced today, but was delayed until tomorrow.

i had a greatly successful weekend. i acquired four harry nilsson albums including: pandemonium shawdow show, aerial ballet, pussycats and knnillssonn. thanks to randy for pointing me in the right direction on those. i plan on acquiring three more tonight and tomorrow night.

i was eating crab last night and i tried breaking into this crab leg, like full on force and i ended up stabbing the underneath part of my thumbnail and it's really sore. seriously, those crabs are well protected. we have to bang a freakin' hammer on them to open them up. and then slather them with butter and eat them. what eats crabs besides us? can bears open them up? i know birds have no shot. and sharks might just swallow it whole. i don't know.

the grammys were last night. i taped it and then fast forwarded (yeah, VHS baby!) through the entire thing to see radiohead play. it was pretty cool. it was just thom and johnny playing with the entire USC marching band. my wife and i had the same thought at the same time, "you know each one of those band nerds (i was one) is creaming their pants playing with radiohead right now." when a husband and wife both generate that thought at the exact same time, "wow" is all you can say.

ballroom blitz

it's getting deep in here people. as milhouse would say, "we're through the looking glass." i've been doing some reading on fractional reserve banking and i've found some serious stuff. here is a great article on the topic.

pay particular attention to the multiplier affect shown towards the bottom. here is gist:

"Let's assume that the Fed buys $10,000,000 of U.S. Treasury bills from some "approved" government bond dealer (a small group), say Shearson, Lehman on Wall Street. The Fed writes out a check for $10,000,000, which it gives to Shearson, Lehman in exchange for $10,000,000 in U.S. securities. Where does the Fed get the $10,000,000 to pay Shearson, Lehman? It creates the money out of thin air. Shearson, Lehman can do only one thing with the check: deposit it in its checking account at a commercial bank, say Chase Manhattan. The "money supply" of the country has already increased by $10,000,000; no one else's checking account has decreased at all. There has been a net increase of $10,000,000.

But this is only the beginning of the inflationary, counterfeiting process. For Chase Manhattan is delighted to get a check on the Fed, and rushes down to deposit it in its own checking account at the Fed, which now increases by $10,000,000. But this checking account constitutes the "reserves" of the banks, which have now increased across the nation by $10,000,000. But this means that Chase Manhattan can create deposits based on these reserves, and that, as checks and reserves seep out to other banks (much as the Rothbard Bank deposits did), each one can add its inflationary mite, until the banking system as a whole has increased its demand deposits by $100,000,000, ten times the original purchase of assets by the Fed. The banking system is allowed to keep reserves amounting to 10 percent of its deposits, which means that the "money multiplier" – the amount of deposits the banks can expand on top of reserves – is 10. A purchase of assets of $10 million by the Fed has generated very quickly a tenfold, $100,000,000 increase in the money supply of the banking system as a whole."

that is brilliant.

alan's psychedelic breakfast

i'm so late to this. but i found this at mish and the whole thing is right here. but if you don't have time for that, here is an excerpt from the piece by ron paul in speech delivered in november of 2008:

Before the U.S. House of Representatives, November 20, 2008

Madame Speaker, many Americans are hoping the new administration will solve the economic problems we face. That’s not likely to happen, because the economic advisors to the new President have no more understanding of how to get us out of this mess than previous administrations and Congresses understood how the crisis was brought about in the first place.

Today, a major economic crisis is unfolding. New government programs are started daily, and future plans are being made for even more. All are based on the belief that we’re in this mess because free-market capitalism and sound money failed. The obsession is with more spending, bailouts of bad investments, more debt, and further dollar debasement. Many are saying we need an international answer to our problems with the establishment of a world central bank and a single fiat reserve currency. These suggestions are merely more of the same policies that created our mess and are doomed to fail.

At least 90% of the cause for the financial crisis can be laid at the doorstep of the Federal Reserve. It is the manipulation of credit, the money supply, and interest rates that caused the various bubbles to form. Congress added fuel to the fire by various programs and institutions like the Community Reinvestment Act, Fannie Mae and Freddie Mac, FDIC, and HUD mandates, which were all backed up by aggressive court rulings.

The Federal Reserve created our problem, yet it manages to gain even more power in the socialization of the entire financial system. The whole bailout process this past year was characterized by no oversight, no limits, no concerns, no understanding, and no common sense.

Similar mistakes were made in the 1930s and ushered in the age of the New Deal, the Fair Deal, the Great Society and the supply-siders who convinced conservatives that deficits didn’t really matter after all, since they were anxious to finance a very expensive deficit-financed American empire.

All the programs since the Depression were meant to prevent recessions and depressions. Yet all that was done was to plant the seeds of the greatest financial bubble in all history. Because of this lack of understanding, the stage is now set for massive nationalization of the financial system and quite likely the means of production.

Although it is obvious that the Keynesians were all wrong and interventionism and central economic planning don’t work, whom are we listening to for advice on getting us out of this mess? Unfortunately, it’s the Keynesians, the socialists, and big-government proponents.

Who’s being ignored? The Austrian free-market economists – the very ones who predicted not only the Great Depression, but the calamity we’re dealing with today.

dayton, ohio 1903

yesterday, i was making a purchase for a three year old whose birthday is this weekend. and i found something amazing to get them and in my excitement, i somehow ordered two. now being that these kids are twins, you'd think that i would give them both one. but that is silly and i will not do that. so i now have an extra copy of this item. everyone knows my love for harry nilsson. he once did an album called the point, which was actually a cartoon that he provided the soundtrack for. it's about a boy named oblio and his dog arrow. "me and my arrow, taking the high road." i've actually made the committment that when i get a dog, i will call him arrow because of this song.

anyway, i got them the point. and i know they'll love it. but like i said, i bought two by accident. so i guess i'll keep one or i can give it to my mom and she can watch it with her grandson. that might be better. i watched it last night. it's good. and the music is great. harry nilsson is the man. i still think "nilsson sings newman" is one of the best albums i've ever heard. ever.

i wrote a little skit yesterday called peanut-butter shakes. it wasn't great, but i miss writing those conversations like i used to. so you'll probably be seeing those more often. i had a whole notebook full of conversations i had written. some were pretty good. i actually looked over the book i wrote and it was good. i need to polish that thing up and send it around again.

"would you like to come over for tea? with the missus and me? it's a real nice way to spend the day in Dayton Ohio on a lazy Sunday afternoon in 1903"

i got two more books yesterday. "the panic of 1907: lessons learned from the market's perfect storm" and "panic: the story of modern financial insanity." i like how both books have the word "panic" in them. i'm not in a panic. but i believe i have much to learn from these books.

i was thinking last night that every since i was able to comprehend the stock market and markets in general, they've been completely favorable. starting around 1995, i started slightly paying attention and then through high school and college and into my early adult life. of course, we had a couple hiccups like in 1999 and 2001, but reading the book about 1907, it was extremely common to have massive disruptions in the market. i'm talking on an annual basis. i didn't know that and it makes me start to look at the market as something different. i'm not sure buy and hold is the way to go anymore. i want to be able to recognize the market for what is and when it is. examples include asset bubbles. i want to be able to recognize an asset bubble, buy into it and sell before it bursts. now you say, well dude, everybody does. that's true. but most people get so wrapped up in the hysteria of it, they lose their objectivity. they start to think things are permanent, that prices go up indefinately, which they don't.

anyway, i'm enjoying reading these books. i'm learning about. i read a quote somewhere that poor people have lots of stuff while rich people have lots of books. i'm hoping i'll be getting rich off of these books. and if i don't, then at least i'll have plenty of books to use around the house. maybe as a ladder. or doorstop. or maybe to hide things in.

monkey burger

this is a scene from the newly created show: peanut-butter shakes. it stars the two main characters: felix and henry. both are sitting in the car as they drive down the street to the local coffee shop arpeggios.

felix: look at that dude over there. he's eating a burger and talking on the phone. that's what i like. when people call me with a mouth full of burger.

henry: probably calling the guy who made the burger. tell him how good it is. or maybe what he did wrong. forgot the pickles or something. probably.

felix: maybe. i always wondered who was the first person to kill a cow, skin it and then cook the flesh and eat it as meat. that guy was a genius.

henry: he was probably publicly scorned and wasn't allowed to own land. cause that was a big deal, owning land. if you didn't own land, you were a loser. cause there was lots of land. i mean compared to people, there was way more land than people. and trees too. probably more trees than people, but i don't think people were very interested in owning trees. maybe if they had fruit or a creature living in them. maybe then.

felix: makes sense. i don't have any trees. but i have lots of batteries.

henry: (tapping his foot to the music on the cd player)

felix: if you feel around down there and feel some batteries, let me know. there's a guy i know who collects them. he collects batteries and old postcards. from anybody. he doesn't have to know them or anything. just likes reading them.

henry: i once got a postcard from myself from the future telling me about this awesome vacation i had gone on. the card featured a monkey wearing a captain's hat. pretty authoratative figure. he was smiling and holding a drink that was in a coconut. the monkey had a shirt on, but no pants. and his nametag said "ralph." so that's how i knew it wasn't me that was writing the postcard.

felix: you thought you turned into a monkey named ralph?

henry: why would i change my name to ralph? obviously, this insidious monkey was trying to make a quick buck or something and forgot to take off his nametag. his mistake. that's why primates didn't succeed, where we did.

felix: glad we figured that one out. you think you can order a monkey burger somewhere?

let's pretend we're bunny rabbits

if you know the rest of the lyrics to this song, you are smiling right now. if you don't, then you probably hate yourself.

do we ever really know who we elect? this article, op-ed, whatever, from the nyt shows our favorite whipping boy rich milhouse nixon as a man bringing the country together. but the facade worn thin pretty quick and his true intentions were shown. my favorite part was this:

“When Dick was finally elected president he attained eighty percent of all goals in his life,” Bryce Harlow, one of his longtime closest friends and advisors, confided to an associate before the inauguration. “He has no idea of what he will do after he is sworn in.”

the goal in life was merely to be president, not to do anything upon arrival. that's great.

don't have much else today on the way of politics.

been in quite the nick cave mood lately. he's got an album called "the boatman's call" which is an amazing album of somber resolution. the first track is stunning, naked beauty. i want to cry everytime i hear it. here is their (nick cave and the bad seeds) website.

here is a website with all the lyrics from boatman's call. check out the first three and if you disagree with me, you probably hate yourself.

my friend randy found a blog containing nothing but stuff about the great harry nilsson. check it out. it's brilliant.

everybody wants to rule the world

how about that! i no more than question the obama administration's committment to integrity and change and they do it. daschle is out as nominee for health and human safety. are the two connected? who knows. does president obama read my blog? maybe. could happen. i've heard a few little lines here and there that sound familiar. regardless, this is the 2nd obama appointee to pull out due to tax problems. geithner didn't pull out, he was still approved as treasury secretary and bill richardson left due to an investigation in his administration. obama was very proud of his vetting process, but it seems to have failed him in several, high-profile instances.

executive pay is coming under major fire. obama wants to cap it at $500,000 for companies that receive federal bailout loans (hopefully these are loans). i don't like the number. i want it to be $501,721.23. that seems more appropriate, doesn't it?

here is a different take on getting toxic assets off of the bank's balance sheet.

judd gregg, a republican, replaces nominee bill richardson as commerce secretary. get to know him.

in an economy like this, people constantly discuss what stocks/bonds/whatever to buy. i like this idea. keep it with stock dividends. reinvest your dividends and buy more of the stock.

mish doesn't like geithner's ideas for asset purchases.

an interview with three people from the state. not the state, as in government state, but the sketch comedy show the state.

"he said everything is messed up round here, everything is banal and jejune, there is a planetary conspiracy against the likes of you and me, in this idiot constituency of the moon (well, he knew exactly who to blame) and we call upon the author to explain!"- nick cave, dig, lazurus dig, "call upon the author to explain"

winds of change (sorry)

sleep when i'm dead

new day in washington, right president obama? cause it's starting to feel like the new boss is the same as the old boss.

"everybody knows, everybody knows, everybody knows, you only live a day, but it's brilliant anyway." - elliott smith, x/o, "independence day"

so we've got some ethics decisions to make right. we'll think about those in a minute because the stimulus bill is being ramrodded through the house and soon the senate. what's in it? do you agree with what's in it? are there enough egregious items to halt the bill entirely? look at it.

here are some bailout questions answered. some are stupid, some make you wonder.

mish had a good little bit on wells fargo balance sheet yesterday.

"oh, what'll you do now, my blue-eyed son?
oh, what'll you do now, my darling young one?
i'm a-goin' back out 'fore the rain starts a-fallin',
i'll walk to the depths of the deepest black forest,
where the people are many and their hands are all empty,
where the pellets of poison are flooding their waters,
where the home in the valley meets the damp dirty prison,
where the executioner's face is always well hidden,
where hunger is ugly, where souls are forgotten,
where black is the color, where none is the number,
and I'll tell it and think it and speak it and breathe it,
and reflect it from the mountain so all souls can see it,
then I'll stand on the ocean until I start sinkin',
but I'll know my song well before I start singin',
and it's a hard, it's a hard, it's a hard, it's a hard,
it's a hard rain's a-gonna fall."

-bob dylan, "a hard rain's a-gonna fall"

stockholm syndrome

the superbowl is over. is that one word or two? on this blog, it's one word. the steelers beat the cardinals in a freakin' entertaining game. when fitzgerald blasted up the middle in the 4th, i really thought the cardinals had pulled off the amazing upset. but the steelers had one drive left in them and they won.

observations:
- commercials were lame. didn't see one that sticks in my memory. i changed the channel several times to watch the simpsons or american dad on the breaks.
- bogus calls. how can the superbowl end on a call like that? he did not fumble the ball. it should have been reviewed. arizona deserved one last chance to win that game. also, the roughing the passer call was totally lame.
- bruce springsteen was actually fun to watch. i don't like his music, don't own a single album. but he got in the spirit of the game and delivered a great performance. but, the only thing that bugged me was his moves. the dude was struggling to get around that stage. but he kept insisting on jumping on the piano and running and sliding around the stage. it looked painful for the guy. but, his wife is hot.
- joe namath seemed like he was never going to get to that podium. everyone kept touching the trophy and grabbing at it. i felt bad for the old guy. i mean he's like 60. give him some space.
- the office episode after the superbowl was great. the roast was perfect. "now dwight knows not to cut off the face of a real person."

so now we sit around until baseball season. i believe february is the worst month of the year. football is over. spring training doesn't start for another month. it just sucks. but thankfully, it's the shortest.

i already have my preliminary world series pick: arizona vs. new york. that could change if the dodgers sign manny and some of these other free agents find a home. the astros i have as finishing fourth in the central.

now back to reality:
consumers usually save during boom and spend during bust. now, we're doing the opposite. why is that?

she's hot. she's smart. she's meredith whitney. here's her idea on how banks can get back in the game.

rock and roll suicide

i just wrote the greatest little bit about america being a rock and roll suicide. and i went to publish the post and i received an error. i lost it all. it was beautiful what i wrote. i said how we were young and we were a rebel and then we went corporate and died a bloated rock and roll death. it was great. sorry you didn't get to read it.

and i had a bunch a links with funny stuff, but i'm not going to write it again. here are the links:

mish's global economics: bailout to hit $4 trillion.

msn money: why the bank bailouts are doomed.

bloomberg: US economy shrank by 3.8% last quarter.

avclub: possible arrested development movie.