He Speaks ...

La Grande Bouche spoke yesterday on security.

WSJ: "It was his strongest and most detailed response to the Christmas Day attempt to blow up an airliner bound for Detroit. "We are at war," the president said. "We are at war with al Qaeda."

He said he took responsibility ... and proceeded to blame low level persons and made no changes in his top people.

"Mr. Obama said he would avoid policy changes that would curtail civil liberties or freedom of movement: "We will not succumb to a siege mentality." "

Really ? He's buying scanners to effectively perform strip searches of every American when they travel. Meanwhile, he's closing Guantanamo and is still releasing terrorists to commit terror again. He's not at war with Al Quaeda, he's at war with the American people. They are the ones to suffer demeaning searches and travel restrictions. In a "war", you kill your enemies; Obama isn't killing the terrorists, he's "arresting them". Sort of.

His head of Homeland Security is the one more concerned with returning US soldiers as prospective terrorists than with person known to contact extreme mullahs in Yemen. Great people you're sticking with, Bloviator.

The Bloviator continues to be a skilled rapscallion [*Word of the Day 12/29/2009] and mountebank.

Economy

Long term mortgage rates are going up a lot this Spring. Here's the clue.

WSJ: "The Fed now holds $909 billion of mortgage-backed securities. In the past year it has purchased 73% of the mortgages that government-backed Fannie Mae, Freddie Mac and Ginnie Mae have turned into securities. Purchases by the Treasury pushed total government purchases above $1 trillion. The Fed says it plans to top off its purchases at $1.25 trillion by the end of March ... "

The Fed's balance sheet will peak and when it does, interest rates will return to normal levels. That means core inflation (2%) plus a real rate of return in the range of 2.5-3% for 10-30 year bonds. Mortgage rates should be at least 1.25% more per the value of optional par prepayment. That means the 10 year Treasury is going to 4.5% minimum and mortgage rates to at least 5.75%.

Actions

Doing nothing. I will wait for this push to 1200 to weaken, then buy a new put ladder at those higher levels. Earnings season could change my outlook.

Reading Quiz

When was this written? -> "There is, of course, some connection between the scene outside and the mind through which we watch it, just as there are some long haired men and short haired women in radical gatherings."

Post your answers in comments. I'll provide the correct answer around Noon, unless someone gets it earlier.

Word of the Day

"Helot" - noun [$10]; the 'e' can be pronounced either short or long.
Helot means 1. one of a clan of serfs in ancient Sparta; 2. a serf, a bondsman.
Sentence: If Federal power as claimed under ObamaCare to force a person to spend money as directed by the government is upheld, the citizen's descent into the helot class will be complete. Our real property is not ours already, thanks to the liberals on the Supreme Court.

A Fine Song

Here's the link to a melodic and fun song by the greatest female singer of the 20th century ->

http://www.youtube.com/watch?v=KVNcLUE87HQ