*Word of the Day
The request for re-scheduling payment of principal on a maturing Islamic bond caused some screeching by the bears who are trying to start a bigger fire on fears of "what else" ?
First, what is Dubai ? Dubai is a sheikdom within the United Arab Emirates which itself is a federation of seven independent emirates. In classical terms, it's a city-state run by a monarch. How big is it ? Dubai has about 1,000,000 people, but only 20% are citizens. The rest are ex-patriates and guest workers. Where did I find out this information ? Not from any news reports or newspapers stories. They lazily don't tell us. I went to the US State Department website.
Dubai created a number of development companies to manage its hotels, tourism and port businesses. The company in trouble is a real estate company. Gosh, it's such a shock that a real estate company in a formerly "hot" location would get into trouble in a global recession.
What is an Islamic bond ? I don't know, but from poor descriptions in the press, I get the impression it's like a sale-leaseback, where the property/assets are sold to some legal entity, and the seller (borrower) pays rent, not interest explicitly, to the lenders. After some time, the seller buys the property/assets back. So an Islamic bond seems like a sale-leaseback coupled with a fixed price repurchase agreement. The analogous structure was rather common in the US until the mid 1970s until new accounting rules offset its legal and security benefits.
What does this highlight ? The economic risk in ANY debt that requires a large payment of principal at maturity ( a "balloon") is MUCH higher that any debt that requires small payments over time, like a home mortgage or a sinking fund bond. If the maturity happens to fall in a period of economic stress, the likelihood of trouble in re-paying that bond hugely increases. That's why the junk bond market gets hit so hard in recessions, yet recovers so fast when the ability to refinance resumes. Analytically, you can see that the correlation of risk & reward to the economy for balloon debt is much higher than for debt that amortizes slowly.
The bond markets started to prefer bonds with fixed balloon maturities in the 1970s. They were wrong. What made trading easier incurred more economic risk which was not compensated in interest rates. The old ways were better. Bring back sinking fund bonds and mortgage bonds.
OK, I am rambling. Yup. But the Dubai debt rescheduling is the screech of a mouse. No big deal at all. It's about like Las Vegas - another city in a desert - defaulting on a global scale. Smaller, even, as oil-rich Abu Dhabi is backing the Dubai banking system. Those banks probably own a majority of the debt at risk. Thus, it's even less that a default by Las Vegas, It's like the default of a few casinos. Hmmmm ... gosh, that's already happening in Las Vegas. Yawwwwwwn.
Actions
I'm cautiously making some speculative buys. I picked up some S&P calls on Friday and some HBC calls, too. I'm phasing this speculation in to see how this panic unfolds. I think it will be over in a few days. On Friday the US jobs numbers comes out. I expect a good number and then a rally to new recovery highs.
Word of the Day
"Dubiety" - noun [$10]
Dubiety means 1. a feeling of doubt; 2. a doubtful matter
Sentence: The debt rescheduling by a major Dubai company is causing a return of dubiety over any heavily leveraged nations.
NOTE: did you notice that poetic title, with its alliteration, assonance, consonance and internal rhyme ?
Monday, November 30, 2009
Friday, November 27, 2009
Thanksgiving Leftovers
The feast was fabulous: free-range, organically fed turkey roasted to perfection, baked Buttercup squash, cranberries, oyster "stuffing", apple-onion "stuffing", pumpkin cheesecake, and fine German Spätlese wine from the Mosel-Saar-Ruhr region.
I hadn't noticed before, but a relative pointed out to me that most of the principal parts of traditional Thanksgiving dinners are New World foods, that is, native to the New World (vs. the Old World of Europe, Asia and Africa). Here's a few - turkey, cranberries, pumpkin (for pies or my cheesecake), squash, regular and sweet potatoes. Very fitting that our holiday feast and giving thanks for whatever good has happened for the past year are New World foods.
The holiday was variously celebrated in the colonies and Washington proclaimed the first national thanksgiving in 1789 as the new government took shape under the Constitution. Various state holidays were celebrated, but then Lincoln proclaimed the first regular, national holiday in late November. Thanksgiving is a fine holiday and I hope all celebrated it in some appropriate manner, or at least had a moment of thought about what one could be thankful for, such as a few good friends or one's health.
Or perhaps surviving the financial Panic of 2008.
Markets
There will be a smashing today as a big, state-owned Dubai company announced that it will not repay its bonds at maturity next month. This a a problem in dealing with a state-owned company. Sovereigns just don't have to follow rules or customs if they wish. So now I suspect the fear is spreading to any Dubai related debt, which I just heard is around $80 billion. Sigh ... why would so many "smart" banks lend money to such entities ? This again reminds me of the great Harry James song, "I've Heard that Song Before" - check out this link:
http://www.youtube.com/watch?v=rh0NZa0WMJQ&feature=PlayList&p=AD7DA2393178FFBF&playnext=1&playnext_from=PL&index=24
Actions
I am thinking of buying some S&P Dec. call options today IF I can get a reasonable price. To me, this Dubai default is not particularly important and the panic rather senseless. But the old fears are there, so I might as well take advantage of them to try to bang out a trade. I'll put this speculation on in phases, as usual.
I thin the December jobs number next Friday will be good and this drop is a "Black Friday" discount sale.
PS: For squash, you want buttercup squash, not the more common butternut squash. The alliterative mnemonics are, "brown is bad" (butternut squash is brown) and "no on nut". Buy only buttercup squash for baking.
Word of the Day
"Ordure" - noun [$10]
Ordure means 1. excrement, dung; 2. obscenity, filth; foul language.
Sentence: The air in DC is redolent of the ordure filing the 2,000 page ObamaCare "plan".
I hadn't noticed before, but a relative pointed out to me that most of the principal parts of traditional Thanksgiving dinners are New World foods, that is, native to the New World (vs. the Old World of Europe, Asia and Africa). Here's a few - turkey, cranberries, pumpkin (for pies or my cheesecake), squash, regular and sweet potatoes. Very fitting that our holiday feast and giving thanks for whatever good has happened for the past year are New World foods.
The holiday was variously celebrated in the colonies and Washington proclaimed the first national thanksgiving in 1789 as the new government took shape under the Constitution. Various state holidays were celebrated, but then Lincoln proclaimed the first regular, national holiday in late November. Thanksgiving is a fine holiday and I hope all celebrated it in some appropriate manner, or at least had a moment of thought about what one could be thankful for, such as a few good friends or one's health.
Or perhaps surviving the financial Panic of 2008.
Markets
There will be a smashing today as a big, state-owned Dubai company announced that it will not repay its bonds at maturity next month. This a a problem in dealing with a state-owned company. Sovereigns just don't have to follow rules or customs if they wish. So now I suspect the fear is spreading to any Dubai related debt, which I just heard is around $80 billion. Sigh ... why would so many "smart" banks lend money to such entities ? This again reminds me of the great Harry James song, "I've Heard that Song Before" - check out this link:
http://www.youtube.com/watch?v=rh0NZa0WMJQ&feature=PlayList&p=AD7DA2393178FFBF&playnext=1&playnext_from=PL&index=24
Actions
I am thinking of buying some S&P Dec. call options today IF I can get a reasonable price. To me, this Dubai default is not particularly important and the panic rather senseless. But the old fears are there, so I might as well take advantage of them to try to bang out a trade. I'll put this speculation on in phases, as usual.
I thin the December jobs number next Friday will be good and this drop is a "Black Friday" discount sale.
PS: For squash, you want buttercup squash, not the more common butternut squash. The alliterative mnemonics are, "brown is bad" (butternut squash is brown) and "no on nut". Buy only buttercup squash for baking.
Word of the Day
"Ordure" - noun [$10]
Ordure means 1. excrement, dung; 2. obscenity, filth; foul language.
Sentence: The air in DC is redolent of the ordure filing the 2,000 page ObamaCare "plan".
Wednesday, November 25, 2009
A Holiday Wednesday ...
surprisingly has some interesting news.
But first, read the Wall Street Journal's annual editorial writings for the day before Thanksgiving. Although identical for almost 50 years, the writing seems to have special meaning every year. If you don't subscribe, I posted a copy last year - see link below.
http://viewfromthebunker.blogspot.com/2008/11/thanksgiving.html
Now to the News ...
The Russian gangocracy keeps getting bolder: FT - quote begins***
A London-based Russian lawyer allegedly received death threats before and after the sudden death in a Moscow jail of Sergei Magnitsky, a colleague who had accused the police of involvement in a corruption case. ... Hermitage said it believed the death-threat text messages sent from a Russian mobile phone over the last month were a warning. They could indicate Magnitsky was killed rather than dying of natural causes after complaining for months he had been denied medical treatment for a serious stomach condition, it said. "
A text message sent on November 8 said, “If history has taught us anything, it is that anyone can be killed”, according to Hermitage. An earlier message sent on October 23 said: “What could be more frightening . . . I don’t know, death . . . or prison.”
Mr Browder said on Tuesday: “It all started to crystallise after we got the fifth message literally gloating about Magnitsky’s death . . . These messages combined with bruises [that were seen] on his hand . . . and the cover-up over his autopsy lead us to believe there is a real possibility he didn’t die of natural causes.” ***quote ends.
It is rather obvious that Putin & Medvedev are involved in protecting this crowd. No one should be doing any business with this gangocracy until it's cleaned up.
Washington Post concentrates on the DC ruling classes to feed it.
From WSJ - quote begins***
Washington Post Co.'s flagship paper plans to close its remaining U.S. news bureaus outside of the Washington area, in a symbolic retreat for one of the country's major news organizations.
The six affected journalists in the New York, Los Angeles and Chicago bureaus will be offered new posts in Washington. Three news aides in those locations will lose their jobs, the Post said.
The closures are effective Dec. 31
The move is an acknowledgement the paper—which helped force the resignation of President Richard Nixon and recently won a Pulitzer Prize for its coverage of influence wielded by former Vice President Dick Cheney—is focusing more on its backyard.
"It's necessary to concentrate our journalistic firepower on our central mission of covering Washington and the news, trends and ideas that shape both the region and the country's politics, policies and government," Executive Editor Marcus Brauchli and other top Post editors said in a memo to staff.
***quote ends
To paraphrase, the people no longer matter to the Washington Post - all power is flowing to the center and all importance occurs there in the court of the ruling classes.
Actions
Ms. Market seems to have endurance for dancing, and the band seems to be tuning its instruments for a new set of songs. What will be the theme song for this set ? Will it be Happy Days Are Here Again or Brother, Can You Spare a Dime ? Maybe a lively Louis Armstrong tune from the 1920s will spur Ms. Market to do a wild jitterbug with a big bull ?
At this time I am still doing nothing. I have plenty of cash, but see few screaming buys or sells. I'm still riding the bull elephant to the next water hole, surveying the landscape to a change in trend.
Word of the Day
"Deontological" - adjective [$10] and "Deontology" [$10]; from Kant.
Deontology means the study of duty.
Sentences:
(A) [from course notes of "Great Ideas of Philosophy", part 3, page 46 - a CD course from The Teaching Company] "Central to any deontological theory is the idea that it takes the imperative of certain moral precepts to be unconditional."
(B) From behavior observed, one can conclude that both the DC ruling classes and the Russian gangocracy both flunked deontology in their studies, or never even signed up, as both are concerned solely with their own power and wealth.
But first, read the Wall Street Journal's annual editorial writings for the day before Thanksgiving. Although identical for almost 50 years, the writing seems to have special meaning every year. If you don't subscribe, I posted a copy last year - see link below.
http://viewfromthebunker.blogspot.com/2008/11/thanksgiving.html
Now to the News ...
The Russian gangocracy keeps getting bolder: FT - quote begins***
A London-based Russian lawyer allegedly received death threats before and after the sudden death in a Moscow jail of Sergei Magnitsky, a colleague who had accused the police of involvement in a corruption case. ... Hermitage said it believed the death-threat text messages sent from a Russian mobile phone over the last month were a warning. They could indicate Magnitsky was killed rather than dying of natural causes after complaining for months he had been denied medical treatment for a serious stomach condition, it said. "
A text message sent on November 8 said, “If history has taught us anything, it is that anyone can be killed”, according to Hermitage. An earlier message sent on October 23 said: “What could be more frightening . . . I don’t know, death . . . or prison.”
Mr Browder said on Tuesday: “It all started to crystallise after we got the fifth message literally gloating about Magnitsky’s death . . . These messages combined with bruises [that were seen] on his hand . . . and the cover-up over his autopsy lead us to believe there is a real possibility he didn’t die of natural causes.” ***quote ends.
It is rather obvious that Putin & Medvedev are involved in protecting this crowd. No one should be doing any business with this gangocracy until it's cleaned up.
Washington Post concentrates on the DC ruling classes to feed it.
From WSJ - quote begins***
Washington Post Co.'s flagship paper plans to close its remaining U.S. news bureaus outside of the Washington area, in a symbolic retreat for one of the country's major news organizations.
The six affected journalists in the New York, Los Angeles and Chicago bureaus will be offered new posts in Washington. Three news aides in those locations will lose their jobs, the Post said.
The closures are effective Dec. 31
The move is an acknowledgement the paper—which helped force the resignation of President Richard Nixon and recently won a Pulitzer Prize for its coverage of influence wielded by former Vice President Dick Cheney—is focusing more on its backyard.
"It's necessary to concentrate our journalistic firepower on our central mission of covering Washington and the news, trends and ideas that shape both the region and the country's politics, policies and government," Executive Editor Marcus Brauchli and other top Post editors said in a memo to staff.
***quote ends
To paraphrase, the people no longer matter to the Washington Post - all power is flowing to the center and all importance occurs there in the court of the ruling classes.
Actions
Ms. Market seems to have endurance for dancing, and the band seems to be tuning its instruments for a new set of songs. What will be the theme song for this set ? Will it be Happy Days Are Here Again or Brother, Can You Spare a Dime ? Maybe a lively Louis Armstrong tune from the 1920s will spur Ms. Market to do a wild jitterbug with a big bull ?
At this time I am still doing nothing. I have plenty of cash, but see few screaming buys or sells. I'm still riding the bull elephant to the next water hole, surveying the landscape to a change in trend.
Word of the Day
"Deontological" - adjective [$10] and "Deontology" [$10]; from Kant.
Deontology means the study of duty.
Sentences:
(A) [from course notes of "Great Ideas of Philosophy", part 3, page 46 - a CD course from The Teaching Company] "Central to any deontological theory is the idea that it takes the imperative of certain moral precepts to be unconditional."
(B) From behavior observed, one can conclude that both the DC ruling classes and the Russian gangocracy both flunked deontology in their studies, or never even signed up, as both are concerned solely with their own power and wealth.
Tuesday, November 24, 2009
To Solve the Twin Deficits
That problem is how to simultaneously reduce the trade deficit and to reduce the US Federal budget deficit. Those problems are connected by the flow of funds to and from overseas: the dollars sent overseas to buy goods (or services) flow back to invest in US $ denominated debt. Some call them "imbalances". Maintaining stability when both flows are large is a problem, as small changes in big numbers are ... big, and cause serious disturbances.
What is Do ?
First, recognize some causes. IF the US economy had full employment, the Federal budget deficit would shrink hugely. Second, US tax policy both taxes employment heavily AND subsidises imports, so we get less employment and more imports than otherwise would be equilibrium.
How is this done ? Social security, Medicare and various unemployment taxes are a very, very high cost to labor, over 15% of gross wages. Add to that the cost of health care benefits. The gross cost probably is over 25%. Under ObamaCare, this cost for using people will grow. Obviously, less US source employment is used for production and US firms place production overseas where possible.
All that labor tax money flows to provide benefits to US workers/people, and is added to the cost of US source goods. So Americans buying US source goods pay a huge added cost, while buying foreign source goods lets them pay NONE. What do we get ? People can buy imports and not pay for those benefits to the people. So the nation's tax policy effectively subsidizes imports, at the expense of US-based production, AND even taxes exports, too, via US source labor taxes.
All these create a huge dis-equilibrium in favor of less jobs, more imports, and less exports. This poor US tax policy supports the twin deficits.
How to Solve the Problem ?
Replace ALL labor taxes - Social Security, Medicare, unemployment and any health care mandates with a single National Sales Tax ("NST"), or call it a value added tax ("VAT") if you wish, on all goods. Employers will see their labor bill reduced hugely, and can hire more. Firms using foreign source labor will have to pay the NST/VST on sales in the US, so will lose that prior advantage (of not paying for US social benefits). US firms will see better profit margins on exports, as they will not have to pay that tax on exports.
American consumers will pay the tax equally on US source goods and imports, but that total amount will go to US benefits to its people. The opposite is true now, as no benefit to the American people flows from use of imports.
This fair tax policy will hugely reduce unemployment and the trade deficit - helping hugely to solve the twin deficits.
By the way, one has to replace ALL labor taxes at once with the NST/VAT, or no one will believe that the change is real and permanent, and that the public will not end up with both taxes. Also, the tax is on goods only: services are labor. The income tax picks those up directly or in the NST/VAT on price of the goods they help produce.
Additional Benefits
The municipal bond freeloaders and cash income persons will have to pay that NST/VAT, too when they spend their money. This improves fairness.
Word of the Day
"Controvert" - verb, transitive [$10]
Controvert means 1. to dispute, deny; 2. argue about, discuss.
Sentence: To controvert that US labor taxes seriously hurt US employment levels is a pretty difficult position to argue.
What is Do ?
First, recognize some causes. IF the US economy had full employment, the Federal budget deficit would shrink hugely. Second, US tax policy both taxes employment heavily AND subsidises imports, so we get less employment and more imports than otherwise would be equilibrium.
How is this done ? Social security, Medicare and various unemployment taxes are a very, very high cost to labor, over 15% of gross wages. Add to that the cost of health care benefits. The gross cost probably is over 25%. Under ObamaCare, this cost for using people will grow. Obviously, less US source employment is used for production and US firms place production overseas where possible.
All that labor tax money flows to provide benefits to US workers/people, and is added to the cost of US source goods. So Americans buying US source goods pay a huge added cost, while buying foreign source goods lets them pay NONE. What do we get ? People can buy imports and not pay for those benefits to the people. So the nation's tax policy effectively subsidizes imports, at the expense of US-based production, AND even taxes exports, too, via US source labor taxes.
All these create a huge dis-equilibrium in favor of less jobs, more imports, and less exports. This poor US tax policy supports the twin deficits.
How to Solve the Problem ?
Replace ALL labor taxes - Social Security, Medicare, unemployment and any health care mandates with a single National Sales Tax ("NST"), or call it a value added tax ("VAT") if you wish, on all goods. Employers will see their labor bill reduced hugely, and can hire more. Firms using foreign source labor will have to pay the NST/VST on sales in the US, so will lose that prior advantage (of not paying for US social benefits). US firms will see better profit margins on exports, as they will not have to pay that tax on exports.
American consumers will pay the tax equally on US source goods and imports, but that total amount will go to US benefits to its people. The opposite is true now, as no benefit to the American people flows from use of imports.
This fair tax policy will hugely reduce unemployment and the trade deficit - helping hugely to solve the twin deficits.
By the way, one has to replace ALL labor taxes at once with the NST/VAT, or no one will believe that the change is real and permanent, and that the public will not end up with both taxes. Also, the tax is on goods only: services are labor. The income tax picks those up directly or in the NST/VAT on price of the goods they help produce.
Additional Benefits
The municipal bond freeloaders and cash income persons will have to pay that NST/VAT, too when they spend their money. This improves fairness.
Word of the Day
"Controvert" - verb, transitive [$10]
Controvert means 1. to dispute, deny; 2. argue about, discuss.
Sentence: To controvert that US labor taxes seriously hurt US employment levels is a pretty difficult position to argue.
Monday, November 23, 2009
Books and More
Stock market futures are up for now, about 1%. Gold continues to rally. The market needs a better jobs outlook for a sustained rally, in my "humble" opinion. That might come in early December.
BBC: "Russia has now turned into a "criminal state", according to the man who was once its leading foreign investor" - Bill Browder. I hope he gets coverage and continues to push. Russia gets way too much slack in the media. It's a gangocracy.
Book of the Week
"Plagues and Peoples" by William H. McNeill. This superb book - "A book of the first importance, a truly revolutionary work" in the words of The New Yorker on the cover - is a "must read" for those interested in the broad human history. Plagues had huge influence on the development of many regions and in many historical epochs. The book also covers how people understood them in the past and dealt with them, and how the growth in population densities changed the nature of the spreading of plagues.
As simple plain history, this book provides critically important knowledge on plagues throughout the world and throughout history. For those who might want to put the current controversies about Ebola, bird flu, and swine flu into historical context, the book is a one stop read to do just that. I read it about 25 years ago and still refer to it on occasion.
Bonus Book
"Life and Fate" by Vasily Grossman. This weekend's WSJ featured this book as #1 of the five best outstanding fiction works on World War II. I read it about 25 years ago when it was first published in the west. The book had been banned by Communist ideologists, but was eventually sneaked to the west for publication. To quote from the review: "Vasily Grossman's "Life and Fate" is the "War and Peace" of Stalinism and the Great Patriotic War, as the Soviets called World War II. This deliberate act of literary homage to Tolstoy uses the Battle of Stalingrad in the place of the Battle of Borodino, and there are several parallels in construction. But the characters in "Life and Fate" and the dilemmas they face when confronted by the moral distortions of the system ... The anti-Semitism that emerged in Stalin's later years convinced Grossman of the parallels between Nazism and Stalinism. This similarity became a covert but recognizable theme in his great novel."
Reading the book helps get beyond the WW II propaganda about the "Great Patriotic War".
Word of the Day
"Feculence" - noun [$10] and "Feculent" - adjective [$10]
Feculent means full of foul matter; fecal
Sentence: The feculence of ObamaCare as manifested in the 2,000 page Senate health care bill is going to get a lot worse as various senators are bribed for votes one at a time.
BBC: "Russia has now turned into a "criminal state", according to the man who was once its leading foreign investor" - Bill Browder. I hope he gets coverage and continues to push. Russia gets way too much slack in the media. It's a gangocracy.
Book of the Week
"Plagues and Peoples" by William H. McNeill. This superb book - "A book of the first importance, a truly revolutionary work" in the words of The New Yorker on the cover - is a "must read" for those interested in the broad human history. Plagues had huge influence on the development of many regions and in many historical epochs. The book also covers how people understood them in the past and dealt with them, and how the growth in population densities changed the nature of the spreading of plagues.
As simple plain history, this book provides critically important knowledge on plagues throughout the world and throughout history. For those who might want to put the current controversies about Ebola, bird flu, and swine flu into historical context, the book is a one stop read to do just that. I read it about 25 years ago and still refer to it on occasion.
Bonus Book
"Life and Fate" by Vasily Grossman. This weekend's WSJ featured this book as #1 of the five best outstanding fiction works on World War II. I read it about 25 years ago when it was first published in the west. The book had been banned by Communist ideologists, but was eventually sneaked to the west for publication. To quote from the review: "Vasily Grossman's "Life and Fate" is the "War and Peace" of Stalinism and the Great Patriotic War, as the Soviets called World War II. This deliberate act of literary homage to Tolstoy uses the Battle of Stalingrad in the place of the Battle of Borodino, and there are several parallels in construction. But the characters in "Life and Fate" and the dilemmas they face when confronted by the moral distortions of the system ... The anti-Semitism that emerged in Stalin's later years convinced Grossman of the parallels between Nazism and Stalinism. This similarity became a covert but recognizable theme in his great novel."
Reading the book helps get beyond the WW II propaganda about the "Great Patriotic War".
Word of the Day
"Feculence" - noun [$10] and "Feculent" - adjective [$10]
Feculent means full of foul matter; fecal
Sentence: The feculence of ObamaCare as manifested in the 2,000 page Senate health care bill is going to get a lot worse as various senators are bribed for votes one at a time.
Friday, November 20, 2009
TGIF
It's Friday and the holiday season is coming. Next week is a shortened week and Christmas ads fill the airwaves. Hmmm ... that's a bit archaic, as now the "airwaves" aren't analog waves at all, but packets of bits and bytes. But at the fundamental level, the digital bits are still electromagnetic waves, although somehow configured be read by receivers as bits. I wonder how that's done ? Oh well ... you can tell I'm mostly a theorist when it comes to physics, etc.
Marketwise, consolidation continues. A few weeks ago I wrote that to hit my S&P target of 1200 by year end, the markets need some good news on the jobs front. That means unemployment claims dropping solidly below 500,000 per week, and the December jobs number showing a loss well under 200,000. We'll see ...
Europe is now going through the "Articles of Confederation" phase of nation-building. Eventually they'll copy the US Constitution, but it might take a generation for the need for that to be obvious to the leaders of member states. For now, Europe seems rather dominated by the big three, viz. Britain, France and Germany (listed alphabetically), but when will Italy, Poland and Spain (again listed alphabetically) start to get the respect they deserve ?
Hmmm in a year, this blogger will be semi-literate in all the major languages of the EU. I'll be able to add news from France, Germany, Italy, Poland and Spain to my daily posts. I wonder how many bloggers world wide are able to do that ? Perhaps I'll then consider expanding operations to a real web site with more capability.
By the way, I can read enough of those languages to note that the leading newspapers in Italy and Poland did NOT have the appointment of the EU president as a top headline, while those from Britain, France and Germany did. The headline in a leading newspaper in Spain focused on the weakness of the #1 and #2 EU leaders. Interesting ...
Actions
The refrain continues ...
Je ne fais rien.
Ich machte nichts.
Nic nie robię.
Estoy haciendo nada.
Non faccio nulla.
Nihil facio.
I am doing nothing.
I wonder if I can make a poem from those lines ? Perhaps next time. I am listing to a course on "How to Read and Understand Poetry" from the Teaching Company. I might be able to combine those lines into some sort of verses with alliteration, assonance, consonance and half-rhymes and other poetic "sound effects". A good project.
Word of the Day
"Proxeny" - noun [$1000] and "Proxenus" -noun [$1000]; both from Greek
Proxeny means the office of function of a proxenus"
Proxenus means (in Greek antiquity) A resident citizen of a state appointed by another state to represent and protect its interests there. Readers of the fine book by Thomas Mann, Buddenbrooks, will recognize that function was called "consul" in the free trading cities of pre-1871 Europe. Proxeny is sort of like an official agency of a governmental entity in another jurisdiction.
Sentence: The position of EU president seems a bit like a joint proxeny for all the members states of the EU on the world stage.
Marketwise, consolidation continues. A few weeks ago I wrote that to hit my S&P target of 1200 by year end, the markets need some good news on the jobs front. That means unemployment claims dropping solidly below 500,000 per week, and the December jobs number showing a loss well under 200,000. We'll see ...
Europe is now going through the "Articles of Confederation" phase of nation-building. Eventually they'll copy the US Constitution, but it might take a generation for the need for that to be obvious to the leaders of member states. For now, Europe seems rather dominated by the big three, viz. Britain, France and Germany (listed alphabetically), but when will Italy, Poland and Spain (again listed alphabetically) start to get the respect they deserve ?
Hmmm in a year, this blogger will be semi-literate in all the major languages of the EU. I'll be able to add news from France, Germany, Italy, Poland and Spain to my daily posts. I wonder how many bloggers world wide are able to do that ? Perhaps I'll then consider expanding operations to a real web site with more capability.
By the way, I can read enough of those languages to note that the leading newspapers in Italy and Poland did NOT have the appointment of the EU president as a top headline, while those from Britain, France and Germany did. The headline in a leading newspaper in Spain focused on the weakness of the #1 and #2 EU leaders. Interesting ...
Actions
The refrain continues ...
Je ne fais rien.
Ich machte nichts.
Nic nie robię.
Estoy haciendo nada.
Non faccio nulla.
Nihil facio.
I am doing nothing.
I wonder if I can make a poem from those lines ? Perhaps next time. I am listing to a course on "How to Read and Understand Poetry" from the Teaching Company. I might be able to combine those lines into some sort of verses with alliteration, assonance, consonance and half-rhymes and other poetic "sound effects". A good project.
Word of the Day
"Proxeny" - noun [$1000] and "Proxenus" -noun [$1000]; both from Greek
Proxeny means the office of function of a proxenus"
Proxenus means (in Greek antiquity) A resident citizen of a state appointed by another state to represent and protect its interests there. Readers of the fine book by Thomas Mann, Buddenbrooks, will recognize that function was called "consul" in the free trading cities of pre-1871 Europe. Proxeny is sort of like an official agency of a governmental entity in another jurisdiction.
Sentence: The position of EU president seems a bit like a joint proxeny for all the members states of the EU on the world stage.
Thursday, November 19, 2009
Environmental Fundamentals
Enormous quantities of nonsense are bantered about the media in the environmental arena. The principal reason for this is phony mysticism that the Green movement uses to hide from facts about the world. The Green movement blathers about "nature" as if it's an ancient God; some make this express by referring to Gaia, the pagan deity of ancient Greece mythology for the Earth.
Let's begin the deconstruction of the Green movement by looking at some basic truths about the physical world - the "real" Earth composed of atoms and molecules, held together by gravity and receiving truly "free" energy from the Sun. Earth has existed in this form for about 4.5 billion years and has evolved without external intervention or forces (other than the Sun and Moon) for that entire period. Earth continues to evolve and move along its worldline as a roughly closed system, again, other than the energy from the Sun and tidal forces of the Moon.
Here are some truths about this real Earth specifically as related to the Green movement.
All sources of "renewable" energy are NOT infinite. By renewable, I mean wind, solar and biomass. All those require LAND to transform the energy to a form usable by humans. Land is finite - limited to the surface of Earth. Green economists love to blather about "external costs" and claim that traditional power sources must be forced to bear more of those. But they simultaneously always neglect the cost of the LAND in their calculations of renewable energy economics. They also ignore the costs of the initial investment in production of the "renewable" energy, but that's for another post.
Rain falls from the sky for free. This is a true statement. evaporation caused by the Sun creates water vapor that circulates in the atmosphere, eventually condensing out and falling as rain. All free. The Sun provides the external energy and the Earth's gravity and rotation provide the forces for weather circulation.
Water is almost never truly destroyed. It's simply used in physical processes (e., g. washing, cooling, etc.) or chemical processes (e. g. plant photosynthesis). However, even for the chemical processes, when looked at as an entire system, the net gain or loss of water is practically zero. Why ? Water is an exceptionally stable molecule. If broken apart by energy in one process, another process tends to re-form the water molecule, releasing energy.
Carbon Dioxide is not a Poison nor is it a Pollutant. Carbon dioxide is crucial for plant life. Human beings exhale carbon dioxide in every breathe. How can such a crucially, absolutely necessary chemical compound be a "pollutant" ? That's like saying water is a pollutant. because water can cause much harm in the wrong place or in excessive amounts, such as in floods. Or that oxygen is a pollutant, because in concentration is can lead to explosions or fires, or can even cause rust in very small concentrations.
That's enough for now. Let's bring some real science and critical discussion to environmental issues, and leave the sophistry and mysticism out.
Actions
Still looking for new screaming buys or sells. None yet, other than the occasional municipal bond. My parameters on those are over 5% yield (both in yield to call and yield to maturity), ten years non call (5 years for a 20 year maturity), acceptable credit (A rated, no CA, AZ, NV, FL, no liberal bastions like NY and NJ, no Michigan). I also reject selected other places; an example was a bond issued by a medical facility located very near the NC coast - a hurricane target zone.
I diversify very, very broadly in municipal bonds. My largest holding is Harvard University. My smallest is an issue by county school system in western Pennsylvania. I buy the bonds in Mrs. B. "Sky Fund" - it's a joint account - with a real broker, so we pay full service fees. But the broker finds the bonds for us and that's fine. Plus the broker provides advice to Mrs. B, who mostly runs the account.
As Obama's huge tax increases for "high income" persons become closer to reality, I think people will realize these bonds offer great value. They also have good value even for AMT taxpayers. A 5% tax free rate is equivalent to 6.94% taxable rate for AMT taxpayers. I do not buy municipal bonds subject to AMT, as for some years I find myself subject to that tax.
And yes, I am a free-loader now, as plans for ObamaCare do not, so far, envision taxing that income. Hence I will not be supporting that folly, at least for that portion of my income.
Word of the Day
"Verdure" - noun [$10]
Verdure means 1. green vegetation; 2. the greenness of this; 3. (poetic) freshness.
Sentence: Carbon dioxide and the sun are the crucial inputs to plant life and its extraordinary verdure.
Let's begin the deconstruction of the Green movement by looking at some basic truths about the physical world - the "real" Earth composed of atoms and molecules, held together by gravity and receiving truly "free" energy from the Sun. Earth has existed in this form for about 4.5 billion years and has evolved without external intervention or forces (other than the Sun and Moon) for that entire period. Earth continues to evolve and move along its worldline as a roughly closed system, again, other than the energy from the Sun and tidal forces of the Moon.
Here are some truths about this real Earth specifically as related to the Green movement.
All sources of "renewable" energy are NOT infinite. By renewable, I mean wind, solar and biomass. All those require LAND to transform the energy to a form usable by humans. Land is finite - limited to the surface of Earth. Green economists love to blather about "external costs" and claim that traditional power sources must be forced to bear more of those. But they simultaneously always neglect the cost of the LAND in their calculations of renewable energy economics. They also ignore the costs of the initial investment in production of the "renewable" energy, but that's for another post.
Rain falls from the sky for free. This is a true statement. evaporation caused by the Sun creates water vapor that circulates in the atmosphere, eventually condensing out and falling as rain. All free. The Sun provides the external energy and the Earth's gravity and rotation provide the forces for weather circulation.
Water is almost never truly destroyed. It's simply used in physical processes (e., g. washing, cooling, etc.) or chemical processes (e. g. plant photosynthesis). However, even for the chemical processes, when looked at as an entire system, the net gain or loss of water is practically zero. Why ? Water is an exceptionally stable molecule. If broken apart by energy in one process, another process tends to re-form the water molecule, releasing energy.
Carbon Dioxide is not a Poison nor is it a Pollutant. Carbon dioxide is crucial for plant life. Human beings exhale carbon dioxide in every breathe. How can such a crucially, absolutely necessary chemical compound be a "pollutant" ? That's like saying water is a pollutant. because water can cause much harm in the wrong place or in excessive amounts, such as in floods. Or that oxygen is a pollutant, because in concentration is can lead to explosions or fires, or can even cause rust in very small concentrations.
That's enough for now. Let's bring some real science and critical discussion to environmental issues, and leave the sophistry and mysticism out.
Actions
Still looking for new screaming buys or sells. None yet, other than the occasional municipal bond. My parameters on those are over 5% yield (both in yield to call and yield to maturity), ten years non call (5 years for a 20 year maturity), acceptable credit (A rated, no CA, AZ, NV, FL, no liberal bastions like NY and NJ, no Michigan). I also reject selected other places; an example was a bond issued by a medical facility located very near the NC coast - a hurricane target zone.
I diversify very, very broadly in municipal bonds. My largest holding is Harvard University. My smallest is an issue by county school system in western Pennsylvania. I buy the bonds in Mrs. B. "Sky Fund" - it's a joint account - with a real broker, so we pay full service fees. But the broker finds the bonds for us and that's fine. Plus the broker provides advice to Mrs. B, who mostly runs the account.
As Obama's huge tax increases for "high income" persons become closer to reality, I think people will realize these bonds offer great value. They also have good value even for AMT taxpayers. A 5% tax free rate is equivalent to 6.94% taxable rate for AMT taxpayers. I do not buy municipal bonds subject to AMT, as for some years I find myself subject to that tax.
And yes, I am a free-loader now, as plans for ObamaCare do not, so far, envision taxing that income. Hence I will not be supporting that folly, at least for that portion of my income.
Word of the Day
"Verdure" - noun [$10]
Verdure means 1. green vegetation; 2. the greenness of this; 3. (poetic) freshness.
Sentence: Carbon dioxide and the sun are the crucial inputs to plant life and its extraordinary verdure.
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