Argumentation

I am listening to an audio CD course titled "Argumentation: The Study of Effective Reasoning", which is quite interesting and instructive. It's available at The Teaching Company along with many other fine courses on DVDs or CDs: see http://www.teach12.com/ aka www.thegreatcourses.com/ The course covers how arguments are structured and can be made effective for the audience with better rhetoric, logic and reasoning. On element of an argument are the "claims" made in the course thereof.

Claims need facts to be effective. But today's modern dialog suffers from a woeful lack of facts. Most pundits and polemical writers don't seem able to marshall "real" facts to support their claims. By "real" I mean something beyond poll results and "the market" - something more substantial than the vicissitudes of ... the mob ... the herd.

Reading a newsletter sent to me for comment by a non-poster on its writings about "Fannie and Freddie", I see charts of their stock prices and credit default swaps, questions about future refinancings, questions about a possible Treasury infusion of capital, questions about the notional amounts of the derivative contracts written on its debt, but ... not one single "fact" about the source of its problems, viz., actual losses on the mortgage loans that underlie its mortgage backed securities. There was also not one single fact about its current income and debt service coverage, and of course not one single fact about the recent trend in home prices.

The article is quite well-written and raises lots of questions, but ends there. No "real" research into the "facts" of the situation. Some important, relevant facts are quite easy to find. Data for the national median existing-home price for all housing types: For Q4 2007 in the US, that number was 205,700 on average. For Q1 2008, the number was $196,300. For March, $200,700; For April, that number was $202,300., May was 208,300. June was $215,100, for July $212,400. Does anyone notice a monthly trend in median prices resembling a bottom?

That "fact" is crucially relevant to prospects for FNMA and Freddie Mac. If house prices are at or near their bottom, actual losses for FNMA and Freddie Mac will not increase. The current marginal income on its mortgage securites is very large. If that income is larger than the flow rate of real losses on defaults, then FNMA and Freddie Mac will NOT fail.

It's beyond me how such crucial data can be ignored in any thinking process about these important financial institutions.

Politics

Is it not remarkable that the Democratic Vice Presidential nominee of merely eight years ago spoke with considerable puissance for Big John McCain last evening, saying a record proving ability is more important for a Presidential nominee than being a "good speaker" ?

Markets

Yesterday's action was all beefers all the time stomping in the mud at the water hole. Perhaps the metaphor of drunken sailors brawling in a sleazy bar fits better ?

The news was bullish. The password is "Patience".

PS: I see another big hedge fund cratered. Shucks. We need about 3,000 more of those to get greased. Maybe it's happening. I hope so.

PPS: Amazing what garbage is showing up on Lehman's books ! Hedge fund investments. Sheesh. How to ruin a fine firm via greed.

Word of the Day

"Petulant" - adjective [$10]
Petulant means 1. unreasonably irritable or ill-tempered; peevish; 2. contemptuous in speech or behavior.
Sentence: Today's WSJ article about Obama's petulant whining about Fox News not worshiping him as CNN does shows him to be quite weak in character.