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Thursday, September 29, 2011

Living Dead Sox (aka Theo Epstein's Science Project) Finally Liberate Boston Fans By Doing What They Do Best

Your fun caption here !
Finally, the Living Dead Sox have met their predestined (according to A-Gon), and unlamented (by me) end.
Sox fans can only hope the breadth and depth of their  failure prompt ownership to demolish the team's entrenched, entitled, SABREMETRICS-know-it-all, what-me-bunt culture, starting with the big, giant heads in the front office right down to obscenely overpaid, consistently inconsistent non-performers, emotional basket-cases, and seriously-hardball-IQ-challenged players whom the late Eddie Stanky surely would have described as 'All-Stars from the neck down'. 
We can only hope that Henry, Werner et al. decide to close down Theo Epstein's Science Project before more innocent people are harmed (pink-hats not included).
We can only hope that 2012 Spring Training is more about baseball than fishing or golf, or that during the regular season--which, oddly enough, still counts for something--the boys take time away from their busy schedule of paid personal appearances at malls, banks, and hot-dog stands to DO THEIR REAL JOBS. 
We can only hope that next year, the boys might actually keep their collective heads in the game (as opposed to where the sun and/or lights don't shine) long enough (1) not to routinely walk 7-8-or-9 hitters in the opposition's batting order, (2) to field their positions adequately, (3) opportunely to move runners into scoring position, (4) consistently to score runners from 3rd when there are no outs (5) not to let themselves get picked off, and (6) NOT TO TRY TO TAKE AN EXTRA BASE IN A ONE RUN, DO-OR-DIE GAME ! The last is especially important for players who get winded just walking from the couch to the fridge. 

Tuesday, September 27, 2011

Think Our Government Stinks ? Apparently you're not alone...

Congress's Mascot ?
According to a Gallup Poll taken between September 8 and 11, "A record-high 81% of Americans are dissatisfied with the way the country is being governed, adding to negativity that has been building over the past 10 years."

And it's not just Republicans (92%), but also Democrats (65%) who are thusly critical.

Among the key findings of the poll:

  •     82% of Americans disapprove of the way Congress is handling its job.
  •     69% say they have little or no confidence in the legislative branch of government, an all-time high and up from 63% in 2010.
  •     57% have little or no confidence in the federal government to solve domestic problems, exceeding the previous high of 53% recorded in 2010 and well exceeding the 43% who have little or no confidence in the government to solve international problems.
  •     53% have little or no confidence in the men and women who seek or hold elected office.
  •     Americans believe, on average, that the federal government wastes 51 cents of every tax dollar, similar to a year ago, but up significantly from 46 cents a decade ago and from an average 43 cents three decades ago.
  •     49% of Americans believe the federal government has become so large and powerful that it poses an immediate threat to the rights and freedoms of ordinary citizens. In 2003, less than a third (30%) believed this.

A Sensible, Non-punitive, Politically Neutral Medicare Reform Plan ?

That's how Ramesh Ponnuru describes proposals by Senators Tom Coburn and Joe Lieberman in his Bloomberg opinion piece, excerpted below. 

* * *

Senators Tom Coburn, an Oklahoma Republican, and Joe Lieberman, an independent from Connecticut, have suggested some reforms to Medicare that would generate about $600 billion in savings within the next 10 years. They would gradually raise the eligibility age for Medicare to 67 by 2025 while increasing premiums and co-pays in a progressive manner, with higher-income seniors paying more for their coverage. They would also limit the ability of “Medigap” plans to drive Medicare spending higher by covering the federal program’s deductibles. (No private insurer would tolerate such parasitic activity.)

The plan isn’t perfect. Its means-testing provisions should be modified: Premiums should be tied to lifetime earnings, not income, so that seniors aren’t discouraged from working. But it’s a more sensible way to reduce the deficit than across-the- board cuts in defense and domestic discretionary programs. And it doesn’t really cross any of the Democrats’ ideological red lines. It doesn’t voucherize the program or otherwise transform it, as Representative Paul Ryan’s plan would. And if the health- care law that Democrats enacted -- which scaled back Medicare Advantage and cut payments to providers -- didn’t amount to fewer benefits in liberals’ eyes, they ought to be able to accept these reductions, too.

The plan leaves the campaign chessboard largely untouched. If both parties agree to these reforms, neither will take a political hit for enacting it, while both will accomplish some of their policy objectives: sparing defense for the Republicans, and sparing domestic programs for the Democrats.

Surely some liberals would prefer to see wealthy senior citizens get a little bit less help from the federal government than see education and infrastructure spending cut. But if the Democrats on the committee nonetheless balk, the Republicans should make the proposal anyway. It beats tearing each other up over taxes and defense -- when the real budget choice we face is between entitlements and everything else.

Obama's Political Position and Future U.S. Foreign Policy

Great article by George Friedman, Obama's Dilemma: U.S. Foreign Policy and Electoral Realities, the conclusion of which I've republished with permission of STRATFOR.

* * *

Obama’s support now stands at 41 percent. The failure point for a president’s second term lurks around 35 percent. It is hard to come back from there. Obama is not there yet. The loss of another six points would come from his Democratic base (which is why 35 is the failure point; when you lose a chunk of your own base, you are in deep trouble). At this point, however, the president is far less interested in foreign policy than he is in holding his base together and retaking the middle. He did not win by a large enough margin to be able to lose any of his core constituencies. He may hope that his Republican challenger will alienate the center, but he can’t count on that. He has to capture his center and hold his left.

That means he must first focus on domestic policy. That is where the public is focused. Even the Afghan war and the U.S. withdrawal from Iraq are not touching nerves in the center. His problem is twofold. First, it is not clear that he can get anything past Congress. He can then argue that this is Congress’ fault, but the Republicans can run against Congress as well. Second, it is not clear what he would propose. The Republican right can’t be redeemed, but what can Obama propose that will please the Democratic core and hold the center? The Democratic core wants taxes. The center doesn’t oppose taxes (it is merely uneasy about them), but it is extremely sensitive about having the taxes eaten up by new spending — something the Democratic left supports. Obama is trapped between two groups he must have that view the world differently enough that bridging the gap is impossible.

The founders gave the United States a government that, no matter how large it gets, can’t act on domestic policy without a powerful consensus. Today there is none, and therefore there can’t be action. Foreign policy isn’t currently resonating with the American public, so any daring initiatives in that arena will likely fail to achieve the desired domestic political end. Obama has to hold together a coalition that is inherently fragmented by many different understandings of what his presidency is about. This coalition has weakened substantially. Obama’s attention must be on holding it together. He cannot resurrect the foreign policy part of it at this point. He must bet on the fact that the coalition has nowhere else to go. What he must focus on is domestic policy crafted to hold his base and center together long enough to win the election.

The world, therefore, is facing at least 14 months with the United States being at best reactive and at worst non-responsive to events. Obama has never been a foreign policy president; events and proclivity (I suspect) have always drawn him to domestic matters. But between now and the election, the political configuration of the United States and the dynamics of his presidency will force him away from foreign policy.

This at a time when the Persian Gulf is coming to terms with the U.S. withdrawal from Iraq and the power of Iran, when Palestinians and Israelis are facing another crisis over U.N. recognition, when the future of Europe is unknown, when North Africa is unstable and Syria is in crisis and when U.S. forces continue to fight in Afghanistan. All of this creates opportunities for countries to build realities that may not be in the best interests of the United States in the long run. There is a period of at least 14 months for regional powers to act with confidence without being too concerned about the United States.

The point of this analysis is to try to show the dynamics that have led the United States to this position, and to sketch the international landscape in broad strokes. The U.S. president will not be deeply engaged in the world for more than a year. Thus, he will have to cope with events pressed on him. He may undertake initiatives, such as trying to revive the Middle East peace process, but such moves would have large political components that would make it difficult to cope with realities on the ground. The rest of the world knows this, of course. The question is whether and how they take advantage of it.

Thursday, September 15, 2011

What, Me Worry, About Hackers ?

Yes, Alfred E. Newman, now that you ask.

Why ?

Check out '8 Things You Won't Believe Can Be Hacked' by Colin Murdock of humor site CRACKED.COM. My comments, in parens below, should make clear to you, dear reader, that I for one am not amused at the prospect that hackers might actually be able to :

#8. Explode Your Genitals ( Note to self: keep laptop off lap, on desk !).
#7. Cut Your Car's Brakes ( No problem if brakes shot anyway, right ?)
#6. Control a Nuclear Power Plant ( What's a lead suit go for these days ? Hmmm... )
#5. Use Your Computer Screen as a Two-Way Mirror ( Go ahead, *hole, watch me pick my nose !)
#4. Shower in Free Money ( Really, I'd rather bag it, then spend it. )
#3. Crash the National Power Grid ( Hey, genius-boy, you ever buy that portable generator ? Didn't think so. )
#2. Stop Your Heart ( I can think of more fun ways to do that. Speaking of which, wonder what's Megan Marshak up to these days ?)
#1. See You Naked ( What kind of sick f*ck gets turned on, ogling an X-ray ? )

Does ObamaCare Discourage Full-Time Employment ?

So argues Diana Furchtgott-Roth in her REAL-CLEAR MARKETS piece, Slow Employment Growth? Look to Obamacare, excerpted below. 

The disincentive in the [2010 Patient Protection and Affordable Care] Act to hire additional workers is a matter if simple arithmetic. If a business does not offer health insurance, then, beginning in 2014, it will be subject to a tax if it employs more than 49 workers in all its establishments. For 49 workers, the tax is zero. For 50 workers, the tax is $40,000, since the business does not pay the tax on the first 30 workers. For 75 workers, it is $90,000; and for 150 workers, the tax is $240,000. Each time a business adds another employee, the tax rises.

Employers will be forced to decide whether the tax rate, $2,000, is less than the cost of health insurance-as is entirely possible in today's market.

Alternatively, businesses can reduce costs by substituting part-time workers for full-time workers.

A firm with 55 full-time workers and 7 part-time workers that does not offer health insurance would pay a tax of $50,000. By keeping the number of hours worked the same, reducing full-time workers and increasing part-time workers, until the firm reaches 49 full-time workers and 19 part-time workers, the tax would be completely eliminated.

In order to avoid the tax, it would pay firms to share employees so they worked fewer than 30 hours at each place of employment. Firms also have an added incentive to become more automated, to use more machinery and employ fewer workers.

Unemployment is stubbornly high, and employers show little willingness to hire. It's time for President Obama and Congress to review the new health care law to see if it may be more of a problem than a solution to securing America's future.

Is it Time for the Prez to Panic ?

Damn straight!
Though the polled public seems underwhelmed by the current GOP Candidates, that's no reason for the Prez to be over-confident about his prospects in 2012.

In his POLITICO piece, Edward-Isaac Dovere describes waning 'blue-state' support for Obama :

In Democratic strongholds from Vermont to California—not to mention New York City, where the president helped sink his party’s nominee in Tuesday’s special election—Obama isn’t quite tanking, but he’s moving unmistakably in the wrong direction.

Those aren’t the only deep blue places where dissatisfaction in the Democratic base on everything from health care to Afghanistan to the environment is eating away at what should be far healthier polling numbers.

The issue isn’t whether the president will lose the collection of reliably blue states next November—he won’t. There isn’t a Republican in the race who can make a place like Connecticut or Maryland competitive.

But pollsters point to the canary-in-the-coalmine factor: if Obama can’t hold these voters, they say, it’s a sign that his wider support among the reliably Democratic electorate of liberals, labor, young people, Jews, African-Americans and other key blocs is withering. They won’t be there in large numbers to put him over the top again in borderline states, and they won’t be there to feed his campaign money and provide volunteer support at the levels they did in 2008.

Tuesday’s election in New York’s heavily Democratic Queens- and Brooklyn-based 9th District proved to be an extreme manifestation of Obama’s blue state problem: His approval rating was at 43 percent in a Sept. 9 Siena Research Institute poll and 31 percent in a Sept. 11 automated poll by Public Policy Polling, a Democratic firm. By contrast, Democratic Gov. Andrew Cuomo posted a 75 percent approval rating in the district, according to the Siena poll.
But should the Prez panic ?

Damn straight, says Clinton strategist James Carville. And besides panic, what else should Obama do ? Carville lays out a simple, and to my way of thinking, smart, 4-step program, excerpted below :

1. Fire somebody. No -- fire a lot of people. This may be news to you but this is not going well.

For God's sake, why are we still looking at the same political and economic advisers that got us into this mess? It's not working.

2. Indict people. There are certain people in American finance who haven't been held responsible for utterly ruining the economic fabric of our country. Demand from the attorney general a clear status of the state of investigation concerning these extraordinary injustices imposed upon the American people. I know Attorney General Eric Holder is a close friend of yours, but if his explanations aren't good, fire him too. Demand answers to why no one has been indicted.

3. Make a case like a Democrat. While we are going along with the Republican austerity garbage, who is making the case against it? It's not the Democrats!

We are allowing the over-educated, over-explanatory bureaucrat by the name of (Congresssional Budget Office director Douglas) Elmendorf do all the talking. Do not let him make your case.

4. Hold fast to an explanation. Stick to your rationale for what has happened and what is going to happen under your leadership. You must carry this through until the election (never say that things are improving because evidently they are not).

How Should GOP Prez Candidates Deal with the Tea Party ?

That's the question Zachary Courser addresses in his CRYSTAL BALL article, Reading the Tea Leaves for 2012 : How will the Tea Party help shape the Republican nomination process?

The pathological antipathy of various 'Tea Party' groups--including the Tea Party Express and FreedomWorks, "the two leading organizations within the movement"--to organization, as well as their destructive affinity for strident and unruly demonstration have created nothing less than a political minefield which every Republican Presidential contender will be forced to traverse throughout the campaign, at considerable peril to their electoral prospects. 
While the benefits of Tea Party support for gaining the Republican nomination for president are uncertain, the Palmetto forum demonstrates the danger for candidates: how not to be drawn into a blind alley with a disorganized and disordered conservative movement. Tea Party activists will likely exert a strong influence on Republican primaries and caucuses (think Pat Robertson in 1988), and if the race gets tight, candidates will not be able to afford to ignore or alienate them. However, the eventual nominee may end up losing significant independent support if they are pulled too far to the right.  According to an August CNN poll, a majority of Americans now have an unfavorable opinion of the Tea Party, with favorability slipping 7% since the midterm elections. Democratic strategists are hopeful that the Republican nominee will be easily linked with an increasingly unpopular Tea Party movement.

A possible strategy for candidates dealing with the Tea Party is to stay more aloof from specific groups and spend more time organizing grassroots citizens who are favorable to the goals of the movement.  Since there is little firm organization among Tea Party groups, the ground is fertile for some kind of mobilization of support within campaigns. However, this will prove difficult as the Tea Party movement has steadfastly resisted leadership or direction. Candidates might also put pressure on the Republican National Committee to do more to bring order to the Wild West atmosphere Tea Party protest has inspired in conservatives. Their energy and enthusiasm is something Republicans desperately need to reignite their party, but their continued unruly, uncompromising and often unorganized protest might well shake apart conservative support for the eventual nominee, and help hand President Obama a second term in 2012. 

Friday, September 9, 2011

Tax Fat-Cats ? Sure, but Start with Congress !

The Hill has obligingly compiled a list of the 50 Wealthiest law-makers who "reported a minimum net worth of $1.6 billion, about $200 million more than the lawmakers who appeared on 2010’s list."

Who's at the top ? Glad you asked.

Rep. Michael McCaul (R-Texas) has dethroned Sen. John Kerry (D-Mass.) as the richest member of Congress, according to The Hill’s annual list of the 50 wealthiest lawmakers.

McCaul reported a net worth of at least $287 million, by far the most of any lawmaker.

Analysis for The Hill’s Wealthiest shows that 2010 was a banner year for many well-heeled members of Congress. Lawmakers including Republican Rep. Darrell Issa (Calif.) and Democratic Leader Nancy Pelosi (Calif.) saw gains of millions of dollars in their fortunes.

More on Obama's Sweetheart Solyndra Deal/Financing Scandal

reported by Ronnie Brown and Matthew Mosk of ABC/iWatch in their article, 'Connected' Energy Firm Got Lowest Interest Rate on Government Loan, excerpted below.  [All emphases are mine.]

A politically connected solar company that pocketed a half billion dollar government loan, only to shut its doors, fire workers and file for bankruptcy, benefited from a series of breaks in securing the federal funds -- including an interest rate lower than other green energy projects, iWatch News and ABC News found.

The $535 million loan to Solyndra Inc., issued by the U.S. Department of Treasury's Federal Financing Bank, included a quarterly interest rate of 1.025 percent, the government bank reported in July. Of 18 Energy Department loans cited in the bank's report, Solyndra's rate was lowest. Eight other Energy Department projects, each also backed by the Federal Financing Bank, came with rates three or four times higher, the report shows.

That treatment is in keeping with the history of the loan to the California solar panel maker, an arrangement inked in September 2009 with great fanfare -- and touted, not long after, during a factory visit from the president. Monthly government bank reports filed since then reveal Solyndra's rate as the lowest for any energy-related project in nearly every report; in every case its rate was well below that of most energy projects, which ranged from cutting-edge electric car makers to wind and solar ventures.

But records show the advantageous terms came in spite of red flags about the risks of investing in Solyndra. In 2008, as the loan agreement was moving forward, an outside rating agency gave the deal with a B+ grade, a less than optimum score, according to records obtained by iWatch and ABC under the Freedom of Information Act. That same year, the records show, Dun & Bradstreet assigned the company's credit appraisal as "fair."

Analysts say there were warning signs about the deal from the start, when Obama's Department of Energy pitched its first energy loan guarantee as a symbol of the expanding green tech movement. Yet the administration repeatedly took steps that would seem to benefit Solyndra: the Department of Energy announced its loan commitment before all due diligence was completed -- later raising concerns from auditors; the president made a personal visit to tout the company's prospects; and the department agreed to grant Solyndra fast-track approval.

Solyndra's most prolific financial backer is George Kaiser, an Oklahoma oil billionaire who was a bundler of campaign donations for Obama's 2008 race. Kaiser's Argonaut Ventures and its affiliates have been the single largest shareholder of Solyndra, according to SEC filings and other records. The company holds 39 percent of Solyndra's parent company, bankruptcy records filed Tuesday show.

Under terms of the bankruptcy filing, investors including Argonaut -- which led a $75 million round of financing for Solyndra earlier this year -- will stand in line before the federal government and other creditors.
It's hard not to agree with Ed Morrissey of Hot Air...

The White House has to explain why it overruled the FFB’s auditors and ignored the warnings from appraisers while fast-tracking over half a billion dollars to a teetering company at loan rates far below what FFB charged other companies.  Obama also needs an explanation of why his bundler George Kaiser will get his capital back before taxpayers see the first dime of that $535 million that got destroyed in Solyndra’s collapse.  If they don’t have a legitimate explanation for these, then Congress may need to start issuing subpoenas to get answers, because right now it looks very much like Obama used taxpayer money to try to bail out a key campaign donor and left us all holding the bag.

Is Jon Huntsman Actually Running for VP ?

To continue to run for the GOP Presidential Nomination with his poll numbers relentlessly anemic, his finances in the toilet, and his campaign organization in a semi-permanent state of flux--as Jonathan Martin observes in THE POLITICO--makes no sense. Either Huntsman is living in a dream-world, where he wins a resounding victory in New Hampshire and rockets into serious contention--or he's positioning himself for a VP nod. I'd prefer to believe it's the latter.

Thursday, September 8, 2011

Two Contrasting Perspectives on the Chinese Economy

1. An Economic Intelligence Unit study quoted by MetalMiner in SEEKING ALPHA contends that China is on the verge of reaching two economic milestones : her primary export markets will be developing, not developed, countries, and her domestic-owned firms will export more than foreign-owned firms.

Helping China overcome wage inflation in its coastal cities is "the flood of Western technology and know-how that has come on the back of successive waves of investment ", enabling Chinese companies " to innovate, reduce costs and compete internationally with their foreign peers."

MetalMiner continues...

The report suggests that heavy equipment manufacturers, particularly in the construction machinery sector, will be in the vanguard of this trend. The EIU expects China to overtake Germany and Japan in exports of construction machinery by the end of this year to become the world’s second largest exporter of construction equipment after the US. As most construction and mining activity is happening in developing countries, this will mean increased competition for the likes of Caterpillar in the years ahead.

Across the board, China’s ability to penetrate developed markets will be limited, but that doesn’t lessen their impact on Western manufacturers exporting to developing markets. In addition to construction machinery, China will soon be exporting high-speed trains, trucks and in time, even commercial aircraft, just as they have saturated the wind turbine and solar panel markets.

2.  Carlos X Alexandre takes the opposing view that China's Future Economic Power Will Disappoint.

Let’s put some perspective on the issue: China can build bullet trains, refurbish old Soviet aircraft carriers – the “new” one was bought from the Ukraine in 1998 -- but can’t raise enough pigs to feed its population. As a side note, a lower dollar has no effect on swine breeding because pigs are not picky eaters.

And on that basis, a country that cannot tend to the basic needs of its population, will become the world’s financial center. Enough said. Ivory tower thinking may foster the publication of impressive glossy papers, but I learned pig slaughtering and sausage making from my grandmother, not my MBA.

Lastly, Reuters reported today that Fitch Ratings – I know, these guys are unreliable -- announced that it may downgrade China within two years "as the country's banks struggle with debt loads following a lending surge to help lift the economy during the 2008 financial crisis." Dismissing Fitch is easy, but not the Chinese debt that lurks in the shadows. 

Tuesday, September 6, 2011

Post Labor-Day Articles on Economy and Investing

UPDATED 9/8/2011 3PM

1.  What would it cost whom if the Euro Monetary System tanked ?

UBS has made an educated guess, and James A. Kostohryz gives us a Reader's Digest version in his recent SEEKING ALPHA post. Some excerpts :

...a weak euro country leaving the euro would incur a cost of around EUR9,500 to EUR11,500 per person in the exiting country during the first year. That cost would then probably amount to EUR3,000 to EUR4,000 per person per year over subsequent years. That equates to a range of 40% to 50% of GDP in the first year.

If Germany were to leave, we believe the cost to be around EUR6,000 to EUR8,000 for every German adult and child in the first year, and a range of EUR3,500 to EUR4,500 per person per year thereafter. That is the equivalent of 20% to 25% of GDP in the first year. In comparison, the cost of bailing out Greece, Ireland and Portugal entirely in the wake of the default of those countries would be a little over EUR1,000 per person, in a single hit.

Fragmentation of the euro would incur political costs. Europe’s “soft power” influence internationally would cease (as the concept of “Europe” as an integrated polity becomes meaningless).

For another perspective on the UBS report, which is reproduced therein, check out Tyler Durden's post at Zero Hedge.

2.  How to play gold yet avoid federal collectibles tax ?

Investment U advises us not to invest in SPDR Gold Trust and other precious metals ETFs which are exposed to collectibles tax. Gold mining stocks aren't similarly exposed, but they aren't keeping pace with gold ETFs' performance. What to do ? IU discusses 2 alternatives, Royal Gold Inc. (Nasdaq: RGLD) and Central Fund of Canada Limited (AMEX: CEF).

For the details check out IU's post, Playing Gold With A Lower Tax Burden

3.  UPDATED : Is an American Industrial Renaissance on the horizon ?

That's what Tom Eslin argues in his SEEKING ALPHA piece, based on, among others, the following premises:

Thursday, September 1, 2011

What's Behavioral Finance, and Does BF Explain Why Voices in Your Head Are Screaming at You to Sell Everything, Now ?

Irrelevant but amusing pic
Not knowing you, I can't answer question #2.

As for question #1, offers this definition--"the study of how unconscious biases affect financial decisions"--and a bevy of articles on the subject.