Friday, February 27, 2009

Condensed (10 min)State of Union Address, w/excellent concurrent analysis

By the Cato Institute. If you didn't see the real thing this is a good recap and the running commentary is thought provoking.

“the green is good for growth” trap

From Icecap - Blog devoted to focus on Global Warming. Links to article in US News & World Report

Obama's $646 Billion Cap-And-Trade Green Tax
By James Pethokoukis, US News
As I see it, the most important single item in President Obama’s budget is his commitment to a cap-and-trade plan (to limit and reduce carbon emissions). It represents nothing less than an absolutely breath-taking attempt at reengineering the entire American economy. The White House expects the system will begin generating revenue for the government in 2012. By auctioning off carbon permits, the White expects the plan to bring some $80 billion a year between from 2012 to 2019.

Thursday, February 26, 2009

Wednesday, February 25, 2009

"Revenue" I thought it was to save the earth.

Congress may seem like they are mathematically challenged but they are seriously addressing the "Revenue" side of the equation to pay for their current and planned spending spree.
One of many tricks up their sleeve is "Cap & Trade" This one is urgent on their list because it is not a tax.
EXCUSE ME!!! Not a tax!!!
It should be obvious now to any thinking citizen the "cap & trade" is just another vehicle for congress to tax us. The system failed miserably since Kyoto achieving no reductions in aggregate of CO2 emissions by those that signed on.

Here is what we know for certain about Cap & Trade:
1. The cost is significant for energy (fossil fuel) intensive industries. They must purchase initial allowance that are set by Congress(they know best). If their emissions exceed these allowances they will have to purchase surplus allowances from industries that have been anointed (again by Congress to get rich). This cost will be absorbed by who? _________(fill in the blank) Hint: look in the mirror
2. A "Enron" style industry of brokers and traders (ahem, think Wall Street) is spawned to deal and manage the allowances and will take their righteous cut. This too will be passed on to __________.
3. Congress will set the cap for the number of allowances available which are supposed to insure the temperature of the entire earth not only stoops rising but will actually reverse. The consensus view of all those anointed as having opinions that count is that no realistic cap will do thing to reverse the level of CO2 in the atmosphere.
4. Congress will also collect the "revenue" (err, tax) for selling these allowances.
One reason for the change, Pelosi said, was that the government needed the money it could get from the auctioning off of the emissions permits under a cap-and-trade program.
"I believe we have to because we see that as a source of revenue," the Chronicle reported her saying.

Source article in IBD
Note, the urgency is "Revenue" I thought it was to save the earth.

So, our central planners are not mathematically challenged. They know they need "Revenue" to offset their spending binge. This "Cap & Trade" is heaven sent. What better way to tax everyone without their knowing it. When the unwashed finally notice their electric bill has gone up 30% their first reaction will be to rage against the evil greedy corporations.

Not to worry, Congress will come to the rescue and raise the corporate tax rate to show us they care and are our only protection from greedy capitalist.

But this still won't be enough to pay for universal health care, rescue social security, and rapid transit so they will also raise taxes on the rich. No problem unless your rich, right? But who are the rich?

Check that mirror. Hint Anyone that earns above an arbitrary line the Central planners draw that will achieve the revenue objectives. I put this somewhere straddling Safety-Love/Belonging on Maslow's hierarchy

Central planning & Spending Binges

Here's an example of how good central government planners can spend money. Check out Bejing after the $43B "investment" in the Olympics.
Source article in Coyote Blog
Multiple skyscrapper buildings unoccupied
Only one event (an opera) in the 91,000 seat Bird's nest stdium since the games

No problem, the gov't has the solution, tear it down and build shopping malls.

Do you ever wonder what it must be like to sit in on the meetings when central planners plan? Especially when they are told money is no object.

By the way, $43B didn't seem like that much!! It would have boggled my mind 6 months ago. When I was a kid I would pick up a penny if I saw it, today it takes being silver colored. I don't know what gives now that M's and even B's are rounding errors for central planners given access to the T's.

Tuesday, February 24, 2009

What would Goldfinger do?

From the Economist (Link here). Some are wondering if gold may be a "Safe Haven" for their investments/savings. This graph should be studied before you run out and buy gold.
It shows the ratio of the Dow to gold. Today that would be approx 7 to 1. 7000 Dow to $1000/oz. Gold.
The article is titled Nice glister, but equities are a better long-term bet
Are you a betting person?
From the article...
A Dow/gold ratio of 2 would imply the former falling to 2000 or the latter rising to $3500 an ounce. Enormous profits would be made by those who got this call right.

Monday, February 23, 2009

Gov't Gone Wild

And to think so many look to these people to solve problems.

Washington sends $1 food stamp checks to 250,000
The Associated Press
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Link here

Taxes are for the little people

Title is quote from Glen Reynolds over at Instapundit, commenting on the apparent apathy to address Charles Rangel's abuse of power.

Columbia history professor David Eisenbach ascribed Rangel’s alleged improprieties to a sense of complacency common among elected officials who have served for such long stints.
“Rangel is not unusual in having tax problems,” said Eisenbach, who lectures in American media and politics. “People in power have a tendency to feel that they are above the law. When you are in power that long, and you’re untouchable, it’s very easy to forget. He never has to look over his shoulder.”

"Factories of death"

The title is a quote from James Hansen, the scientist responsible for getting Al Gore on the Global Warming bandwagon. He is referring to "coal" fired power plants because coal burning is the largest source of man made co2 emissions. It seems to me that media outlets are so desparate now because of circulation loses that they must resort to sensational headlines and anyone with a Phd or quasi scientific credential can get quoted because these kind of statements are "news".
Found this quote and I think it applies
Voltaire said: “Those who can make you believe absurdities can make you commit atrocities.”

Read this short article to get a sense for this - Climate-change rhetoric spirals pout of control

Friday, February 20, 2009

Discuss the possibility of discussing the possiblity

Gimme a break!!! No GMAFB!!!
The source article focuses on our European friends but I ask you to consider that WE (our US leaders) aren't much better. Source article is Slate

...and our elites want to be more like Europe!!
Last Monday, while Barack Obama fought for a second bank-rescue plan in addition to the fiscal stimulus, EU member states discussed the possibility of discussing the possibility of acting in unison. In response to a request from France and Germany, the president of the union, the Czech prime minister, announced an April "summit." But he didn't set an exact date or lay out a precise program beyond discussing the valuation of toxic assets.

Note the lack of urgency. I guess Obama got a different memo.

Computer modeling

This is an excellent post on modelling, linking excessive dependence on them to current financial crisis and pointing out a similar situation with the Global Warming debate. I've posted it in its entirety below . The original source is from the 2008 Best Science Blog Watts up with that.
2 points to keep in mind:
  • The recent stimulus bill pumps additional billions into this modelling
  • They are "rock stars" now and smart enough to know why.
Check out the last sentance
When You Can’t Believe the Model19 02 2009
This article was sent to me by reader Peter Yodis. I found it interesting and germane to current events, so I’m sharing it here. Just a note for clarification, the very last sentence is in his original article, it is not commentary from me. - Anthony
Reposted from
Machine from editor Leland E. Teschler Feb 17th, 2009

Amid all the hand-wringing about financial systems in meltdown mode, the subject of modeling hasn’t gotten a lot of notice. Banks and other financial institutions employed legions of Ph.D. mathematicians and statistics specialists to model the risks those firms were assuming under a variety of scenarios. The point was to avoid taking on obligations that could put the company under.
Judging by the calamity we are now living through, one would have to say those models failed miserably. They did so despite the best efforts of numerous professionals, all highly paid and with a lot of intellectual horsepower, employed specifically to head off such catastrophes.
What went wrong with the modeling? That’s a subject of keen interest to engineers who must model the behavior and risks of their own complicated systems. Insights about problems with the mathematics behind financial systems come from Huybert Groenendaal, whose Ph.D. is in modeling the spread of diseases. Groenendaal is a partner and senior risk analyst with Vose Consulting LLC in Boulder, a firm that works with a wide variety of banks and other companies trying to mitigate risks.
“In risk modeling, you use a lot of statistics because you want to learn from the past,” says Groenendaal. “That’s good if the past is like the future, but in that sense you could be getting a false sense of security.”
That sense of security plays directly into what happened with banks and financial instruments based on mortgages. “It gets back to the use of historical data,” says Groenendaal. “One critical assumption people had to make was that the past could predict the future. I believe in the case of mortgage products, there was too much faith in the idea that past trends would hold.”
Therein lies a lesson. “In our experience, people have excessive confidence in their historical data. That problem isn’t unique to the financial area,” says Groenendaal. “You must be cynical and open to the idea that this time, the world could change. When we work with people on models, we warn them that models are just tools. You have to think about the assumptions you make. Models can help you make better decisions, but you must remain skeptical.”
Did the quantitative analysts who came up with ineffective financial models lose their jobs in the aftermath? Groenendaal just laughs at this idea. “I have a feeling they will do fine. If you are a bank and you fire your whole risk-analysis department, I don’t think that would be viewed positively,” he says.
Interestingly enough, Groenendaal suggests skepticism is also in order for an equally controversial area of modeling: climate change.
“Climate change is similar to financial markets in that you can’t run experiments with it as you might when you are formulating theories in physics. That means your skepticism should go up,” he says.
We might add there is one other similarity he didn’t mention: It is doubtful anyone was ever fired for screwing up a climate model.

Thursday, February 19, 2009

The lion goes after the easy targets first

NY Times headline E.P.A. Expected to Regulate Carbon Dioxide

Well here we are. Theoretically there is nothing that can stop the EPA from restricting just about any aspect of our lives . Think of all the regulations out there as a club in the arms of a man in a uniform. Is he the kindly Sheriff Andy in Mayberry who would only ever use it in self defense or to protect the public (as is the original intent of the rules which authorized it in the first place)
Is he a aggressive agent of the Gestapo who will weild it unmercifully to cow you into submission?
The point
is it is up to him to decide and you are totally at his mercy. Of course you will aways have recourse ex post to address "abuse of power" but that is small recompense and you will need huge financial resources to pursue any remedy.

The EPA now has that club.

This announcement was roled out with the usual language that it will only be used in a manner to address "polluters emitting noxcious green house gases", excuse you mean carbon dioxide, methane and water vapor?

This is like speed limits. It is against the law to exceed the speed limit. We all do and get away with it. Why? Because they (and I mean the authorities who are duly sworn to uphold th law) choose when to enforce.

Ditto cheating on your taxes (just a little extra deduction, no big deal)

Ditto crossing the street or throwing that flouescent light bulb (loaded with mercury) in the trash.

Ok, now back to EPA and CO2

Consider the extremes to bound the possibilities:

At the top of the list...

80% of electrical production by coal. In the US real pollutants (oxides of N and S, particulates are already regulated and controlled. The emission remaining are water vapor and CO2. NOW, they will mandate elimination of the CO2 which will mean HUGE expenditure on sequestration methods that are expensive and unproven. Some estimates predict a 30% rise in generation cost which will be passed on to the consumer. Remember during the election Obama said he would bankrupt the coal industry.

At the other extreme or what you might consider the bottom of the list:

Ban all burning - BAR-B-Q, fireplaces, matches and lighters.

Puta tax on cows and horses to discourage having them reduce methane from farts, ....

Do your own research and consider the possibilities.

Will they do all this. Maybe yes maybe no, BUT they will be able to strike anywhere they want with impunity guided maybe by shadow forces behind the scenes that are green on the outside and red on the inside. These forces have dep pockets and if the enforcement they expect does not follow they will sue the EPA for not enforcing.

So what do we do? We all emit noxcious green house gases, but like the bulk of the wildebeast in the herd we survive only because the lion goes after the easy targets first.

The irony of course is that the US will be the only significant world player to do this (because we must be seen as the leader)

Tuesday, February 17, 2009

Thursday, February 12, 2009

Fear mongering

I guess you only notice this fear mongering after you've experienced it enough times. The link I provide relates to the Global Warming hype but the concept of fear mongering is all around us, most notably the fear mongering our president is spreading about the coning economic catastrophe. Since bad news sells expect it to continue. It also provides another convenient sandbox for the politicians to play in to show us how much they care while they craft a new LAW to solve it. It could almost be funny except when you consider what depths the stakeholders (media, politicians, solution providers, etc) will go to to keep the fear going. Nothing is sacred when you see them indoctrinating the "children".
My Dad used to say KISS - keep it simple, stupid. He was trying to impart a little bit of the wisdom he had accumulated over the years which by the way included a real Depression, 3 wars, a 30 year career, lifetime commitment to my mother and raising 4 kids. He read me stories when I was a toddler. The one that comes to mind now is Chicken Little and the Sky is Falling. Seems like something we should all read again.

Wednesday, February 11, 2009

Science is broken

Good blog on science - what it is, what it isn't and how it is being corrupted and used to furthur political agendas. "Outcome directed" science? Think about that one.

Monday, February 9, 2009

Opposing Stimulus

Hope not FEAR ...or is it FEAR not hope

Only Mark Steyn can tell it ...
Read it in its entirity here

Some tasty morsels
Jesus took a handful of loaves and two fish and fed 5,000 people. Barack wants to take a trillion pieces of pork and feed it to a handful of Democratic-party interest groups.

Indispensable” Tim Geithner, wanted in twelve jurisdictions for claiming his kid’s summer camp as a business expense, is the only guy with the savvy to crack the code of the U.S. economy

I’m with Tom Daschle: I understand why he had no desire to toss another six-figure sum into the great sucking maw of the federal treasury. Who knows better than a senator who’s voted for every tax increase to cross his desk that all this dough is entirely wasted?

Milton Friedman - On Greed

Friday, February 6, 2009

"We have chosen hope over fear."

From Charles Krautheimer
Catastrophe, mind you. So much for the president who in his inaugural address two weeks earlier declared "we have chosen hope over fear." Until, that is, you need fear to pass a bill.

Read the whole thing - click here

Thursday, February 5, 2009

I'll gladly pay you today for a hamburger tomorrow.

Go out and get your wheel barrels now. This is distressing. It looks like runaway hyper inflation will be the next shoe to drop. Even if it is overhype it serves as a warning.

What do you do? Remember the Popeye character Wimpy -

I'll gladly pay you Tuesday for a hamburger today .

Think about the reverse - I'll gladly pay you today for a hamburger tomorrow.