Evidence Of The China Bubble Bursting

There's a new cartoon starting next month on Nickelodeon called Ni Hao, Kai-lan!

It's being billed as the Chinese version of Dora the Explorer which is currently the leader in children's diversity propaganda. Of course, the New York Times approves.

This generation's children will have Mandarin words forced on them from the cartoon.

Remember back in the 1980s when the Japanese stock market bubble energized a broad movement to not only learn the Japanese language, but to even adopt their corporate practices? There was also a brief surge in teaching Russian after the Cold War as well. Then of course there's the multi-decade long push of Spanish on unsuspecting students across the land. It all started with the Mexican stock market bubble.

Okay. There was no "Mexican" stock bubble. The Latin-ization of curricula more likely started with the diversity bubble.



As you can see above, Chinese stocks have been fading since my December 31st post. Outside of a small, slightly unsuccessful short of Chinese search engine Baidu this month, I haven't been able to get short any Chinese names. The very fact that I am bearish but not short China bodes poorly for their markets.

The timing of the new cartoon suggests an intermediate top as well.

Contribution From Mrs. C-Nut

Just got this email via my wife's Blackberry.



Mrs. C-Nut - So I am getting my haircut and I have to listen to this dumb hairdresser talk about how she feels she has to be responsible and not have kids because of over-population. How stupid are these people???

Haha!

You have to play along though. I would have told the bimbo that I was more concerned with "climate change" and the civil rights of deaf, transgendered guest workers.

UPDATE - I had to add this pic based on a posted comment.

A Moronic Understanding Of Electricity

Yeah Taylor, a few people just forwarded this one to me.



Of course, this pic belongs on any Moron blog.

Instead of forwarding the jokes myself, I have taken to posting the worthy ones on my blog. You see, I am de-congesting inboxes; I have taken it upon myself to start ridding the web of joke spam - one jest at a time.

Next up, I will save the world's water supply by only flushing solid evacuations.

Hard To Argue With This One

Official Announcement:

The government today announced that it is changing its emblem from an Eagle to a CONDOM because it more accurately reflects the government's political stance. A condom allows for inflation, halts production, destroys the next generation, protects a bunch of pricks, and gives you a sense of security while you're actually being screwed!

It just doesn't get more accurate than that!

Another Good One

SAYING GOODBYE TO MOTHER......

You Don't Have To Own A Cat To Appreciate This One! You don't even have to like 'em!

We were dressed and ready to go out for the New Years Eve Party. We turned on a night light, turned the answering machine on, covered our pet parakeet and put the cat in the backyard.

We phoned the local cab company and requested a taxi. The taxi arrived and we opened the front door to leave the house.

The cat we put out in the yard, scoots back into the house. We didn't want the cat shut in the house because she always tries to eat the bird.

My wife goes out to the taxi, while I went inside to get the cat. The cat runs upstairs, with me in hot pursuit. Waiting in the cab, my wife doesn't want the driver to know that the house will be empty for the night. So, she explains to the taxi driver that I will be out soon, "He's just going upstairs to say Goodbye to my mother."

A few minutes later, I get into the cab. "Sorry I took so long," I said, as we drove away. "That stupid bitch was hiding under the bed. I had to poke her with a coat hanger to get her to come out! She tried to take off, so I grabbed her by the neck. Then, I had to wrap her in a blanket to keep her from scratching me. But it worked! I hauled her fat ass downstairs and threw her out into the back yard!"

The cab driver hit a parked car.



The joke was prefaced with this line - "You Don't Have To Own A Cat To Appreciate This One! You don't even have to like 'em!"

I submit that you don't HAVE to have a mother-in-law to appreciate the story, BUT if you do, it might be MUCH funnier!!!

Stocks, Houses, And Excuses

Sorry for the deafening silence, my flock. I've been tied up trying to re-file my 2006 taxes. I knew the code was labyrinthine and ridiculous, but now I have a deeper appreciation for that characterization. In years past I have always channeled my trades through a business entity or at least used an accountant. But last year I essentially reported my trades as a non-professional customer and I tried to hammer out the forms myself. I made several mistakes and the IRS took notice.



Otherwise, I have been trying to recover from a serious loss I took trying to catch the falling NASDAQ knife. I actually came in really short to start the year but, of course, got flat too early, and then long too soon and too much. As of now I have dumped the position and am chipping away at the deficit.

Today I dumped Newmont Mining and shorted both Bank of America and Capital One Financial (at 54.90, 41.77, and 51.69 respectively). Newmont has actually been a core holding for a while; the mere seven points I made on it will at least get filed as a long term gain (before the AMT kicks it to 21%, effectively a higher tax rate than I would have paid a few years ago with a 20% capital gains rate.)

Gold has exploded and Newmont has barely budged. Reasons for this under-performance abound: higher production costs (think oil and electricity), political extortion, problems replacing reserves, etc. It suffices to say that in hindsight, I should have bought the physical metal in lieu of Newmont shares. I did make some good money in the stock over the last several months: I bought the Jan70 calls at 1.50 and sold them at 4.00, I flipped the June50 calls, and I scalped the stock a few times.

In fact, Newmont was one of the first stocks I ever traded. Back in 1996, gold was $385 per ounce and NEM was $60 a share. Today, gold has rallied to $920 an ounce and Newmont is merely $55. That is some serious underperformance over a 12 year period and it reminds us of Jim Rogers' assertion that mining shares have been the "worst" sector to invest in throughout the history of the stock market.

Just about all I have left in my account besides Google (bought some more today at $550) is a sizable position in Coeur d'Alene, a silver mining concern. I own the stock and January calls (both the 5s and 7.5s). That's another mining position that has pathetically underperformed the precious metals.



I've been pretty much cleaning house in my trading accounts. Gone are my commodity positions that I promised to "never sell": cocoa, coffee, sugar, and cotton. I also covered my short euro position. I actually got out at a great price on MLK day when just about all the domestic markets were closed. If you remember, the Dow futures were trading down 550pts that night. Pretty much the only reason I covered my short euro was to free up some capital for what was going to be a most volatile Tuesday morning. If you recall, I got short at 1.47; rode a loss up to 1.49; then was fortunate to cover at 1.4433.

That euro unwind worked out great as the euro has since bounded back to 1.4755 and I was able to buy the Dow futures early Tuesday morning down 550 points. Not even a couple of hours hence, the Fed predictably made a "surprise" 75 basis point cut in the Federal Funds Rate - and I dumped my Dow Futures for a most rapid 274 point profit!

This is the story of my career. I get killed on my large bets but clean up on the little ones. However, my account purging has been more deliberate than distressed. There's simply so much intraday volatility that I want to take advantage of. In these times, it's best to play it small and nimble. With all this trading opportunity, one doesn't have to swing much of a bat to make $$$$.

These days, I would LOVE to see a big financial stock rally so I could short the lot of them. Selling into financial rallies is and will be one of my game plans for the foreseeable future. Now enough of this boring stock market stuff

Do you watch HGTV?

I admit I watch it aplenty these days. Usually I tape the shows and cruise through them to see the conclusions. Did they buy the cheap house or the one "over their budget"? I also like to see the fruits of "updating".

My wife is less tolerant of some of these shows - and she has a point. Who the (blank) vets a mere three homes and then buys one of them? I'd look at twenty before I even signed a rental agreement!!!

The other day they had on some newlywed couple in Colorado who left their rental (replete with roommates) to "buy" a mountain house for around $210,000. They said they were anxious to stop "wasting money on rent". So what did they do? They bought with 100% financing and a 5-year interest-only loan at 6.87%. They went the interest-only route to "keep the payments down". So after paying $1,400 a month for 60 months - a total of $84,000 - their loan will need to be refinanced at prevailing rates AND they will obviously have zero equity.

So much for not "wasting money"...

Does this sound like anyone you know?

There's another show on HGTV called "My House Is Worth What?" with a most insane premise.



In a nutshell, here's the show - some idiot homeowners guess what their house is worth and then, a real estate agent comes in to give their own best estimate.

The discrepancy between the two "guesses" is mostly a function of the homeowner's ignorance, the real estate agent's perma-optimism, and of course, the current state of the housing market.

It'll be fun to watch the reruns of this show as the housing debacle drags on for years. For example, "Joe and Susie paid $750,000 for this bungalow in Miami. They put about $100,000 more into it...and now, only 6 months later, it's worth $1.5 million!"

That was definitely how the show started out a year or so ago. Now it'll be Joe and Susie's $850,000 investment is on the market for $700,000. Ouch.

Incredibly, this show is mostly about home equity loans. The inquiring homeowner wants an appraisal because they want to take out money to either do an addition or renovate kitchens, baths, and basements. They want to know if they will "get the money back" that they plan on borrowing and "investing" into the house.

It's an insane line of thinking:

My house is worth 500k and I only owe 400k. If I take out 75k to redo the kitchen, my house will be worth at least 575k, so it's a good investment.

Bullsh*t. Renovations should be seen more like SUNK COSTS because you pay interest on the home equity loan and because as you enjoy them, they DEPRECIATE. In fifteen years, your 75k kitchen will be dated; so figure that depreciates at a tune of $1,000-$3,000 per year. Home equity loans amount to borrowing against the future for present consumption. THEY ARE NOT INVESTMENTS.

In fact, today in the marketplace, bonds backed by home equity loans are quite distressed. Largely due to their status as secondary liens, HELOCs are currently trading at pennies (20?) on the dollar. In other words, the primary mortgage owner has first dibs on a foreclosed home and the second dibs, these days, are worth almost nothing.

I wouldn't recommend taking out a home equity loan for renovation UNLESS one had a boatload of equity or sufficient cash on hand to pay off the loan. I just don't get the idea of BORROWING for present consumption. It's this mindset that's made America a nation of debt slaves.

How's this for a radical concept - If your basement costs ten grand to finish....then DON'T DO IT until you have ten grand saved up!!!



This weekend, for kicks I walked through the above "open house". It's been for sale for 200+ days and was recently lowered from $1.7 million to $1.159. It's "relo-owned". Meaning some company moved an executive and essentially bought his house from him. In this case, Frito-Lay is the new homeowner - and they can't be too happy about it.

It's a gorgeous 4,800 square foot home and it's only a few years old. It's way too much house (and money) for me. Taxes are $14,000 a year and when I asked about the heating bill I received this doozie from the realtor,

Realtor - This house is tight. The heating bills weren't bad at all. Only five thousand last year.

CaptiousNut - (laughing). Only five grand huh? Last year was one of the warmest winters on record and oil was nearly 40% cheaper.

What a Moron!

Or, she must think I'm a Moron.

Lemma - Housing prices will go back to 1998 levels.

You think I am crazy, right?

About now, generally speaking, we are nearing 2003 averages. My Lemma is based on the fact that carrying costs are much higher now than they were ten years ago. Property taxes have only been rising; insurance premiums are higher; and utility bills have exploded. Sure, incomes are up, but we'll see how long that lasts.

It's my contention that people across the land STILL underestimate the total costs of homeownership. For example, in this day and age, Americans change jobs all the time. And despite CraigsList and FSBO options, it still costs about 5% to sell one's house. So add on to the higher carrying costs of today's homes, what I submit are higher transaction costs. If people sold one home every thirty years before, I'll bet they are now selling 2.5 every three decades.

In this vein, I believe it's ridiculous for anyone to take out a thirty year mortgage. Okay, maybe it's not completely ridiculous, but what home buyers should probably be looking at is the comparable 15 year fixed mortgage payment. Allow me to illustrate.

Today, a 200k fixed-rate loan at 6% for thirty years would cost $1,200 per month.

The same loan on a 15 year term would cost $1,688 per month.

If $1,200 is the monthly payment you're comfortable with, then reverse-plug it back into the mortgage calculator to see how much it'll allow you to borrow on a 15-year fixed-rate loan.

It turns out, with a fifteen year loan, $1,200 per month will only borrow you $142,000.

Mind you, that's on a non-jumbo sized loan.

If a larger borrower took my advice, instead of taking a 600k 30-year mortgage out, they would reduce their home buying budget proportionately - by $174,000. In this case, if they wanted to be debt-free in 15 years, they'd reduce their intended mortgage to $426,000.

In my opinion, housing could easily see 1998 prices again because buyers are not only paying prices at the top of the historical range,



...they are underestimating the carrying costs, transactional costs, and they are of course assuming steady and gainful employment.

The only thing "steady" in my life is the onslaught of higher monthly bills. Remember, I don't even own a money pit; nor do we have car payments or student loans to pay. Two kids all by themselves are budget busters. They consume more clothes, food, and money each year. They've increased our healthcare costs and introduced a "babysitter" budget that is also relatively new. Their education (whether outsourced or not) could easily cost a tremendous amount of money. Every young family's expenses are on the same, unavoidable, upward trajectory. AND I haven't even talked about inflation.

The fact remains, consumers have too long underestimated their future expenses and overestimated their earnings potential. A fifteen year mortgage makes a ton of sense because of all the new financial burdens that keep getting dropped in your lap. In fifteen years, my son will be going to college - at that point I'd like to be done paying for my house. Furthermore, how the heck do these maxed out, credit card-ramping, home equity-tapping Morons think they are going to save for their own retirements?

Social Security?

Hah! Tell me another one.

Alright, time to sign out.

But I want to ask you people a question. If you daycare your kids at 12 weeks so both parents can work and you can afford the larger mortgage....if you justify it by claiming that daycare is good for the baby's "social skills"...

Don't be surprised when you're old and grey, collecting a Social Security spare change, have no savings to live on, and your spoiled, individualistic kids send you to El Cheapo Nursing Home. Even if they have the big house, and plenty of room for an 'old coot' they will still send you away. They will outsource care for you just as you did for them as daycare babies.

I can't count how many times in recent years I have heard people plop their aging parents in nursing homes, assisted living communities, or the DNR House and quip, "Well, it's better for them socially to be around their peers."

Behold the irony!

Even if you don't teach your kids, they will learn from you.

Thank God, It Wasn't The Left One!!!

Click the pic to enlarge if you can't read it.

Why did they have to be so specific?

Top Country Song Titles

GRAMMY WINNERS: TOP 12 COUNTRY SONGS FOR 2006

12) I Hate Every Bone in Her Body But Mine

11) It's Hard to Kiss the Lips At Night That Chewed My Ass All Day

10) If the Phone Don't Ring; You'll Know It's Me

9) I Liked You Better Before I Got to Know You So Well

8) I Still Miss You Baby, But My Aim's Gettin' Better

7) I Wouldn't Take Her to a Dog Fight 'Cause I'm Afraid She'd Win

6) I'll Marry You Tomorrow, But Let's Honeymoon Tonight

5) I'm So Miserable Without You, It's like You're Still Here

4) If I Had Shot You When I First wanted To; I'd Be Out Of Prison By Now

3) My Wife Ran Off With My Best Friend and I Sure Do Miss Him

2) She Got the Ring and I Got the Finger



...and the Number 1 Country Song is:

1) I Ain't Never Gone to Bed With Ugly Women, But I've Sure Woke Up With a Few

Quien Es George Lopez?

To me, the only thing more torturesome to watch than women's basketball is Pro-Am golf. The PGA plays one tournament at Pebble Beach with celebrities and tycoons and another such animal is airing this week - The Bob Hope Classic from Las Vegas.

I will not watch them.

Who really cares about Bill Murray? He was washed up decades ago. Who cares about an analysis of Emmitt Smith's golf swing? But the absolute most irrelevant star of these Pro-Ams has been George Lopez.

Disney/ESPN shamelessly promotes Jorge during the Pebble Beach tournament, I guess, because they want viewers to tune into the George Lopez Show, a primetime comedy of theirs airing on ABC.

But George is simply not funny. And what could possibly be worse than an un-funny comedian? I have NEVER even heard anyone talk about his show - which was cancelled last year. Here's the story from Wikipedia:

In 2000, after several years of performing stand-up comedy, Lopez was approached by actress Sandra Bullock for Lopez to produce and star in a comedy. Bullock was concerned about the lack of Hispanic-oriented sitcoms on American television and pushed to get a sitcom on television that starred Hispanics but wasn't exclusively about the Hispanic American community. ABC, who had been criticized by Hispanic American groups for lack of Latinos on their television shows, quickly picked up the television series.



Aha! Just as I figured. George was not on television because he was an entertainment draw. He had his own show to satisfy a diversity initiative. With Latinos, Chicanos, and/or Hispanics such a growing (and kvetching) demographic, Disney just had to throw a bone and prop up this alleged comedian.

We are all prone to misunderstanding things outside our personal little bubbles. I really don't know anyone who has an iPhone or watches NASCAR, but I am aware that they are juggernauts. They say that George Lopez's show had "decent" ratings but I remain skeptical. I repeat - I have never heard or met anyone, heck I have never even overheard anyone talking about this clown. I do not dwell in the center of the Hispanic community but I do have Latino relatives on both sides of my married family.

Last year, ABC cancelled this propped-up show and replaced it with one based on the Geico caveman - no doubt to target the much bigger, Neanderthal demo.



George WAS NOT happy,

"I get kicked out for a caveman and shows that I out-performed because I’m not owned by ABC? So a Chicano can't be on TV but a caveman can? And a Chicano with an audience already? You know when you get in this that shows do not last forever, but this was an important show and to go unceremoniously like this hurts. One hundred seventy people lost their jobs. TV just became really, really white again."



By George, that's brilliant!!!

Whip out that race card, the very foundation of your fame.

The next thing you know, the show-less unfunny comedian has been made the new host of the Bob Hope Chrysler Classic. In fact they advertise it as, "The Bob Hope Chrysler Classic hosted by George Lopez".

Now, whether this came from Chrysler, the tournament, the PGA, or the television broadcasters I cannot say. Regardless, this Moron is still in the spotlight, making viewers across the land change the channel.

Believe me, the guy is NOT FUNNY. Watch this clip.



How annoyed were you at his 5 or 6 terrible jokes and the contrived laughter of the interviewer? This is just a taste of what four days of Pro-Am coverage is like when Lopez is playing.

Anyway, even if nobody watches George on TV, at least the diversity-fetishists like the NYT are happy.

Adding the comedian George Lopez as the host is part of the tournament’s attempt to stay current and become inclusive.

Crossposted on Marginalizing Hackers.

Unconscious Morons

Some 39 year-old "experienced climber" died on New Hampshire's Mount Washington this Friday. He was climbing Odell's Gully (see above) alone when an avalanche sent him to his death.

In a telephone interview from her home in Memphis, she said her husband did not take excessive risks.

"He was not a thrill-seeker," she said.

Are you kidding me?

He was all by himself; since it was 20 degrees here south of Boston, it had to be zero degrees up on Mount Washington; AND there were 86 mile per hour wind gusts. Furthermore,

According to the US Forest Service, the posted avalanche rating for the gullies in Huntington Ravine on the mountain's east side was "high" on Friday, meaning natural or human-triggered avalanches were likely.

Here's another quote from his delusional widow,

"It's natural to worry," she said. "But it's not any different than a business trip."

Yeah, if your husband is Bear Grylls perhaps it's "not any different". But this guy worked in finance for International Paper.

I don't mean to pile on the bereaved woman but her insinuation that he was not a risk-taker is insane. Regardless of whether or not only 130 people have died on Mount Washington since 1849, climbing that ravine, by yourself, in that weather is simply Moronic. One could easily slip on ice, bang their noggin, and die unceremoniously out in this icy wilderness from simply hiking an innocent trail. I'll bet the reason so few have died climbing the mountain is because MOST people stay away from it during the winter.

It does, however, make it both less tragic and less Moronic that the couple hadn't any children. Could you imagine if they did?

The fact is, so many people underestimate the risks they take in life whether it's tailgating at 75 mph on the highway, buying a house with an adjustable mortgage, or "hiking" Mount Washington in January.

If only they all read my blog. I could learn 'em a thing or two.

Why I Watch American Idol

The best line is around a 1:25 into this clip - so at least watch through that.



Based on his dental profile, I think Alaa Youakeem should have auditioned with this song.

Now THAT would have been hilarious.

For Taylor

Which Country Is The Most Stupidest?

If you aren't sensitive to the transparent America-bashing of this video you may find it downright hilarious.

Now, if you can't get enough of this subject, peruse some of the 54,000 (and counting) comments in the YouTube thread. There you'll find a more globally diverse set of Morons.

Mo' Dog Morons

Couldn't sleep last night. Broke down and watched a few minutes of cable news - after all, how many times can one watch the same highlights on SportsCenter?

Saw the most ridiculous commercial for pet "medicine". On the website you too can witness the inanity.

Bank Of America's Ken Lewis - Socialist Hero, Shareholder Villain

Last Thursday afternoon I was talking to a buddy and I told him that Bank of America was in all likelihood going to buy Countrywide. An hour later, he called me back laughing. I asked what happened, "You called it!" he said as the rumors of imminent buyout hit CNBC.

It was the easiest prediction to make - and I was scarcely the only one making it. I believe Fortune even ran an article predicting it only a few days beforehand. I can't speak for others so I will explain my own thinking.

My prediction was based solely on the palpable, and monumental arrogance of BoA chairman Ken Lewis.

"We are aware of the issues within the housing and mortgage industries,"

The above quote of Lewis hit the wires on Friday and no doubt set off a few million wry chuckles. I am not sure what particular question that was an answer to but if we play a little Jeopardy we can safely surmise it was something like this:

"Ken, do you have any bleepin' clue what's going on in the housing market?!?!?!!?!"

By my last check, even though down to a mere $6 per share, Countrywide still had about 25% of its float sold short. The smart money on Wall Street is predicting bankruptcy. Ken Lewis doesn't see Countrywide as a ravaged mortgage company. He sees it as a chance to "build relationships".

I kid you not.

For those of you not current on the Countrywide soap opera, flashback to August. At that time, Ken Lewis' Bank of America shelled out $2 billion for a stake in the ailing mortgage lender. They bought warrants (long term call options) on CFC stock at around $18 a share. Only 5 months later and now the shares are down to $6. So you'll have to forgive those chucklers who are skeptical of Ken's awareness of "issues within the housing and mortgage industries."

I submit that Ken Lewis is no sober financial analyst - the guy is a self-styled, progressive superhero. He uses the Bank and shareholder assets to serve his personal, political agenda. Allow me to catalog the circumstantial evidence.

His bank advertises for the Boston Gay Man's Chorus - make that they are the "lead sponsor":

He's spent over $1 billion erecting a "Green" building - One Bryant Park - in Manhattan.



Mind you, this is after he spent tens of millions of dollars (and lost gob of talent) moving all the bank's brokerage operations from their scattered parts to Boston - the most expensive place to conduct business in America (ranked 200th out of 200 in Forbes). He made this move ONLY to appease Barney Frank and the socialists at the Boston Globe who pre-emptively lambasted the Bank for "moving jobs out of Boston".

So, I ask, who is going to work in this green building? Why did Ken's pagan temple have to be built with shareholders' assets?

Aside - The Bank is currently bragging about the value of their green skyscraper - much the same way The New York Times is bragging about the paper profits they've made on their new building. Commercial real estate has been appreciating in NYC the past two years - defying the bust in residential real estate in the rest of the country. Neither Bank of America nor the NYT has "made" any real money from their buildings since they can't sell the building without paying the same cost to rent office space elsewhere. They haven't made any money in much the same way as your neighbor who was gloating over the "value" of his house in 2005.

I submit that a bank should stick to the banking industry and stay away from real estate speculation. Is that not the lesson being learned at financial institutions all across the land these days?

Here's more evidence of Ken's Earth-hump-o-philia:



Why does a bank have to earmark monies ($20 billion!) for anyone or any industry whatsoever? After all, shouldn't a publicly owned bank grant loans to creditworthy businesses, pardon the pun, on a color-blind basis?

Go ahead and kid yourself that this is just "marketing" to an important demographic.

Bank of America employees are also encouraged to buy hybrid cars and I hear that there have been showings nationwide of Al Gore's feat of fiction An Inconvenient Truth in office conference rooms.

It goes without saying that those conference rooms should have been focused more on real estate analysis than agitprop cinema.





Ah, then you have the issue of illegal, er undocumented Americans. Bank of America is bending over backwards (and jumping through loopholes) to get them to open bank accounts, issue them credit cards, and even facilitating wired money to Mexico.

Any single one of these issues could forgivably be construed as, like I mentioned above, merely targeted marketing towards certain demographics. Individually, Ken's activism might be taken for the the working of a rational, profit-maximizing corporation - after all, a corporation is an animal inherently immune to all non-financial value judgments. It will respect all extant laws and regulations but nonetheless is programmed to forge ahead for lucre.

But taken collectively, they paint Bank of America as Sculptor of America. Sure, much of Lewis' bungling of the Countrywide purchase amounts to just pure ego - the inability to admit he was wrong at $18 a share. As a trader, my ego has me averaging down in securities just about every single day. But my trades are not motivated by politics. I don't really have anything more than a hunch that Ken Lewis bought Countrywide in part to "save the housing market" - but I wouldn't be surprised if he didn't feel so righteously obligated.

Maybe Ken Lewis the social crusader moonlights as a savvy financial analyst? Maybe Countrywide will return money in spades for the Bank? I simply don't have the information or skill set to predict one way or the other. But my gut tells me Kenny is drunk not only on acquisitions - Fleet, MBNA, US Trust, LaSalle, and Countrywide - but on his massive ego. Housing is still at least 25% overvalued. Interest rates are at 60 year lows. I fear he is way over his head this time. He's not battling homophobia or carbon emissions. He's trying to flout the unblinking laws of economics and mathematics.

Ken is not simply paying $4 billion (on top of the $2 billion that already vanished); he is assuming the debt of a company whose liabilities exceed $120 billion. Even with a light recession and slightly higher Treasury rates, his gamble could easily cost BoA $20 billion!



Bank of America's shares are currently trading at a 4.5 year low; in fact they are unchanged over the past 10 years. It will be interesting to see if Kenny gets any flack over the proposed Countrywide purchase. I wouldn't be very surprised if some large shareholders vocalize opposition to the deal. They've just got to be tiring of Kenny's BS.

Don't worry Ken. Even if they ignominiously oust you from the Bank, you'll still be welcome at all those West Side and Hamptons cocktail parties that you oh, so, cherish.

I did some light googling on Bank of America and "transgendered". Let's just say I wasn't surprised to find out the Bank sponsored some "Transgendered Job Fair" in San Francisco.

Just name the progressive cause and Kenny will be there with his cape on (and shareholders' monies).

Two Small Items

I've been busy with the financial markets and sick kids these days.

Here is a worthwhile little clip to watch if you're the type interested in sage quotes.

And here is a disgusting, intellectually bankrupt little article on ethnic patterns of conspicuous consumption. I'd elaborate if there were more than 24 hours in a day.

For now I am going to decompress in front of American Idol. The early part of the season is my favorite as it's rife with ridicule and Morons.

The Mail-Order Bride - An End Around

Remember my old friend Perry Eidelbus? For you newbies, he's a pissant little blogger that I had to Marginalize a while back. See this post and then the second half of this post.

Guess what? The knucklehead just got engaged. He's posted this pic on his site:



Good for him! Not a bad looking broad either. All this time, with his petulance, metrosexual tendencies, and his man-crush on Chris Daughtry I thought he may have been a closet invert.

Now compare the recent pic above with an older shot of his mug.



Even though he's hiding his residual corpulence behind the pretty girl, it's obvious that he's shed some pounds. Again I say, good for him! (There may have been some Hillary Clinton-esque airbrushing too; even to the undiscerning eye it's clear the topography of his face has been altered.)



Now here's what's bad for him. In the second round of our tussle, I admonished him for his utter self-obliviousness. Apparently, he hasn't noticeably self-improved in that department.

I hadn't read his blog for, gee, at least 8-10 months - perhaps even longer. So, just seeing his proud engagement announcement I figured he had been dating this girl for a while and was doing what most everyone (guys AND gals) does when they near age 30 - i.e. he settled.

I inferred from his blog that the girl was Filipino and that he had proposed to her over in the Philippines. I guessed that maybe the couple was on vacation, traveling, or whatnot. I assumed that she was an NYC resident like him because dating is usually a function of propinquity. But in the back of my mind I had a hunch there was more to the story. He writes:

I should add...I still cannot fully appreciate how lucky I am to have her. There are some complications to sort out before we can get married, but I know she's the miracle of my life, and if we've waited all our lives to find each other, we can wait a little longer.

Aha! There's a green card issue.

Now, I am not saying it doesn't happen, that couples don't meet and fall in love at first sight and get engaged, but c'mon. What Third World girl wouldn't be eager to marry their way to the richest country on Earth? After all, two years hence they can divorce, collect alimony, stay in the country, and easily find an uptick for a spouse. Only a complete Moron would stay in the slum-ridden Philippines over the chance to come here - even if they have to marry a Trekki.



My question to y'all is this:

Doesn't this count as a "mail-order bride"?

I could be wrong but I couldn't find any other mention of this girl before his "engagement announcement". I mean we are talking about the Philippines here - one of the modern meccas of mail-order brides. The only difference is that he did the ordering "in person". Hence the "end around".

Now I am not insinuating that this marriage won't be lasting or happy - if it does in fact pass Homeland Security vetting. Romance-based marriages or, as many call them "love marriages", have probably proven less secure over time than arranged marriages and unions of mutual convenience.

The issue I take with Perry is his reckless lack of self-awareness. I've already cataloged his profound self-obliviousness in that other post and now I have to add this to it. Who the heck in their right mind uses their real name on a blog and announces to the planet that they essentially went the mail-order bride route?

Perry writes:

But I don't mind, because there's only one girl for me now.

So with all apologies to the single women of the world, Perry is now taken.



Oh really? The women were crawling over him in the Big Apple? Hah! He's more of a fridge-magnet than a babe-magnet!!!

My second choice for this blog's name was:

What To Do When You Can't Find A Date In NYC, A City Of 8.2 Million...

UPDATE - Perry has blocked my direct links to his posts. So to get to his blog from here, one must right-click on my links, copy the shortcut, and paste into another browser tab or window. For more on this childish tactic of his - click here.

Why WaMu Is Bankrupt

As I type this, shares of Washington Mutual are down 1.97 to a measly $10.77 apiece. The stock was in the forties just this past summer. Look at a five year chart:



It's cratering because it got drunk writing mortgages at the peak of the real estate bubble.

One example is all you need to see how stupid this institution is.

I know a guy who owns four properties. He's got $4 million worth of mortgage debt on homes that I reckon are already down to $2.5 million in current market value. He is what they call "upside-down", but to the fourth power.

Get this, two weeks ago, he got ANOTHER home equity loan on one of his underwater buildings for a few hundred thousand bucks from Washington Mutual - a bank that can't claim ignorance because it holds some of his extant mortgage debt.

Who the bleep would ever lend a completely insolvent guy more money? WaMu may just as well flush the money down the drain.

The most incredible aspect of this blunder is the timing. WaMu has just taken billions in writedowns, slashed thousands of jobs, cut their dividend, and seen their stock crater. The handwriting is on the wall - in large boldtype font and they are STILL making ridiculous loans.

Look at this chart below (click to enlarge if need be):



Countrywide is on the cusp of bankruptcy. Greenpoint shut down in August. And WaMu is obviously tracking in the same direction.

GMAC will be the next to go belly up - I've heard as soon as this upcoming May. I actually know an executive at GMAC's mortgage division. He was my wife's boss for a couple years until he bolted for GMAC. Here's a guy who was making probably around 700k per year for his capacity as a chief financial officer. (I am sure GMAC bumped his pay above that.) Anyway, to give you a window into his brain, I will relate what he told me and my wife 2.5 years ago when we moved to Boston.

HighlyCompensatedSavvyFinancialGuy - You guys are renting? You're CRAZY. You just have to buy a house. The market only goes up and you can't stay outside...you'll be shut out forever.

Now mind you that was in June of 2005, the euphoric apogee of the real estate bubble. Remember, I had a landlord who told me he sold a building in less than a hour, sight unseen, over the internet at that time. Websites like condoflip.com were proliferating; it was absolutely crazy.

Since the Boston real estate market has been in free fall from the very day we got here, I reckon that I am actually the savvy financial guy! (albeit "underpaid")

My wife was itching to remind her erstwhile boss of this "advice" he patronizingly lavished on us when we moved but since the guy pulled the strings on her bonus she refrained.

Quite frankly, I think the guy is insane to leave my wife's stable, highly profitable firm to go run GMAC for a slight pay raise. As I mentioned above, GMAC is a ticking bankruptcy bomb. Rule number one is to always work for thriving, flush companies in healthy industries. For example, don't think anybody at the New York Times is getting a raise this year with their dwindling readership and ad revenues.

Obviously, this CFO guy didn't and doesn't have any armageddon-type opinions on the future of real estate - otherwise he may have passed on the GMAC promotion.

However, he is smitten by one end-of-the-world narrative, that of "global warming". He and his Oprah-educated wife were always lecturing his staff on environmental nonsense. Even I would bite my tongue and endure these sermons. After all, 30% of his staff's pay came in the form of discretionary bonuses.

For sure, workaholic corporate types haven't time enough to contemplate larger trends or phenomena outside their field. But as WaMu and this rockstar exec demonstrate, they are not even guaranteed to understand their own businesses. It's not just day traders who "momentum trade"; corporate executives also do their share of wave chasing - their share of "buying high" and "selling low". Their own business successes generate operational momentum. When a bank like WaMu has made all its money by writing subprime, adjustable loans, then it's just not one day going to change course. Like Countrywide, the entire company became oriented towards aggressive lending. If a salesman wasn't pushing these fanciful loans hard, he was eliminated. There are testimonials from former employees confirming this on the web.

Likewise, if a guy has only been buying homes for the past 15 years, we might forgive his ignorant conclusion that "real estate only goes up". It's very hard for untutored men not to get swept up by the momentum of their own personal experience.



It's also pretty hard for busy successful executives to realize that they might not know a single thing about the age-old politicization of weather patterns - after all, if they were dumb, they wouldn't have so much money, right?

Socially Conscious Investing?

Look at this CraigsList ad my brother just sent me:


Socially Conscious Finance Bloggers Needed

--------------------------------------------------------------------------------
Reply to: job-532956231@craigslist.org
Date: 2008-01-08, 9:01PM EST


The Panelist (http://www.ThePanelist.com), now a partner of Forbes.com, is looking for writers to blog about topics in socially responsible investing. Specifically, we need bloggers to evaluate the ethical values and/or stock valuations of publicly traded companies.

We are also looking for bloggers for the following ongoing projects:

Philanthropy Wars - Compare the philanthropic efforts of competing companies, for example, Yahoo vs. Google or Coke vs. Pepsi
Sustainability Programs - All of the major banks (Lehman, Goldman, Morgan Stanley) have sustainability programs. Which of these are legitimate and which are shallow PR attempts?

Sector blogging - Follow a sector (paper and lumber, wind power, technology, automobiles, health care/pharmaceuticals, telecom) and discuss the socially responsible or irresponsible events taking place in that sector

Event coverage - Cover the socially responsible events in your area (must have a digital camera), write book and documentary film reviews

To apply, send a sample blog in the body of your email (no attachments please). Blogs do not have to exceed 500 words and can be shorter. You must be able to write and edit your own work. We pay about $10/blog for strong writing, finance knowledge and a commitment to and delivery of a set amount of blog entries per month. This is a terrific venue for exposure, as our entries often get picked up by Yahoo Finance, Treehugger, SeekingAlpha and The Huffington Post.



Wow, $10 a blog!!!!! Sign me up. At best they might get 15 year-old tree-humpers to write for them.

Anyway, the only small point I wanted to make is this:

Why do we have "Socially Conscious Investing"???

Or, rather, why don't we have any movements for "Economically Conscious Socialism"???

The answer, of course, is that here in America, the bastion of capitalism, socialists still firmly control the public dialogue....and not to mention, your wallet.

America - Where Beggars Can Be Choosers

I was talking to a young lady the other day who has frequently volunteered at a "soup kitchen" for the homeless.

She told me, "You wouldn't believe what the needy are like. They come in and say things like, 'Well, I am a vegetarian'."

Unbelievable. I can't imagine how much blog material I would have if I ever got out of my house and perhaps worked with the public. Alas, as it stands, I have to get most of my material vicariously.

I can't find the link now, but this reminded me of a story I read detailing how the Seattle homeless get gym memberships to tackle "obesity".

Only in America.

They Stole Elaine's Idea

I can't believe I saw one of these in my freezer. Where the heck does my wife shop?



I wonder what they do with the muffin bottoms...

Yesterday, My Wife Told Me To Grow Up

I just did find out what a "ringback" was. So on my new cell phone I paid $4.49 for a particular song to be both my ringtone and my ringback.

Verizon offers just about every song, or so it seems. For kicks I searched for my new tune and was a bit surprised they had it.

My old man is coming over next week. At 64 years old he just got his first cell phone. Of course, I will grab it, and on the stealth buy some music for him - just like our nephews did to my wife! I was thinking about this one. Any better song ideas?

This prank will have limited effect, of course. Like most 'old coots' his phone will most like be "left home" and "turned off" (no doubt to save electricity!). Furthermore, none of his gumbas have cell phones or would even know anything about the singer. At least he won't have a clue how to get rid of the song.

I just HAVE to call him when he's in church. Recently, my wife called her mother while she was at mass. After fumbling around trying to find and then turn the phone off, she ran out and buried it in a potted plant in the lobby. She just couldn't stop the missed call beep. The priest even made a remark about it. How much fun would it have been if one, it were intentional, and two, if we had saddled her with say a George Michael ringtone?!?!?!

I know. Just recently hearing about ringbacks qualifies me as an 'old coot' in my own right.

What Separation Of Church And State?

The more history I read, the more I see humans collectively as a horde of robots. Read this Will Durant excerpt:

The piety of the people had by 1500 made the Church the economic master of Scandinavia. In Denmark half the soil was owned by the Church, and was tilled by tenants verging on serfdom. Copenhagen itself was an ecclesiastical fief. Clergy and nobility were exempt from land taxes: the nobles because they served at their own expense in war, the clergy because they organized worship, morals, education, and charity. The universities at Copenhagen and Uppsala were of course in ecclesiastical hands. The Church required a tenth, annually, of all nonecclesiastical produce or income; it exacted a small fee for every building raised, every child born, every couple married, every corpse interred; it claimed a day of gratis labor from every peasant yearly; and no one could inherit property without making a contribution to the Church as the probate court of wills. These imposts were defended as financing the ministrations of the church, but complaints rose that too much of the proceeds went to maintain bishops in regal splendor.



Now just replace the "Church" with the "State". Do you see the clear and powerful parallels with today's Big Government America?

The "imposts" today are income and corporate taxes and are much higher than 10%. They are defended as necessary for "infrastructure" like roads, schools, cops, high school football, and keeping 'old coots' from eating dog food. The "regal splendor" that they nourish is best thought of as a vast bureaucracy, career politicians, and their army of self-defensive lawyers.

Today no one can inherit property without a proper contribution to the State either - the death tax. Marriage also now bears a tax penalty. "A small fee for every building raised"? Hah! Construction is barely permitted today, even on private property - and never for a "small fee".

Universities today are run, not by "ecclesiastics" in the old sense, but rather by a monolith of evangelical socialists. Why the heck are the best and brightest young people, college students, all geeked up about dimwits like Barack Obama and Hillary Clinton? Well, Cuius regio ejus religio - it's a scholarly Latin expression meaning "whose region, his or her religion" or "the religion of the ruled must be that of the ruler." Muzzling dissent has been the most efficacious form of brainwashing throughout the ages.

While 16th century Scandinavia sported Copenhagen as an "ecclesiastical fief", today one might as well call the numerous blighted urban areas, with their government housing, schooling, and welfare fiefdoms of the State. (For good measure they fraudulently stuff the ballot box.)

The Old World clergy used to organize "worship, morals, education, and charity." Well, today's high priests of Statism have ramped it up a notch. They've graduated from organization to coercion. Thou shall worship the "environment". Thou shall not offend. Thought crimes like "hate" have been codified and sins of yore like envy have become standard tools of the State. A new moral order has been cast based upon diversity, relativism, and whatever ideo-fad that might tout favorable demographic trends (e.g amnesty for border hopping identity thieves). It goes without saying that the State has both cemented and enlarged its penchant for "charity". Welfare, entitlements, subsidized student loans, affordable housing, Head Start, ....the list is interminable. Charity my ass. It's all at once coercive redistribution, class-baiting, mind-enslavement, and LCD politics by incumbents eyeing 51% majorities.



Ah, the good ole days of 10% taxation and swift executions. Now we get lifelong torture via emasculation and the harassed productivity of 50% tax brackets. Who today wouldn't take compulsory Sunday mass attendance in exchange for a return of 10% taxation?

Modern day Statism has all the hallmarks of yesteryear's worst religions. I am hardly the first person to assert this, but the State simply became the Church. Secularists in Europe took down the Papacy by pouncing on its warts - then they incorporated the very same ones into their rule.

The odds are that whenever you hear someone today mention the "separation of church and state"....you are listening to, if not a modern day Statist, then one of their brainwashed minions.

The Greatest Name Ever

...belongs to the guy on the left. His name is Thom Dammrich.

He's the president of a the NMMA - a boating industry group.

No sh*t he works with yachts. He had to do something like that with his surname.

Big Education vs. Big Oil

This country is run by old white men from Texas. It's run by Big Oil, right?

Well, read this excerpt I gleaned from a great Forbes article on the inexorable rising price of college tuition. Note my bold emphasis.

Here is a very small but very telling contributor to the cost line: lobbying. To stay on Congress' good side, higher-education institutions spent $602 million on lobbying over the last ten years, according to the Center for Responsive Politics. That is more than either the real estate or the oil and gas industries spent. The lobbying paid off again in September, when President Bush signed a bill to boost financial aid by $20 billion over the next five years. The measure--the biggest jump in college aid since the GI Bill--raises the maximum value of a Pell Grant by $1,090 over five years, to $5,400 in 2012. It also cuts in half the interest rate on student loans awarded for need to 3.4%, over four years.

Did you get that? Big Education out-lobbied, er OUT-SPENT, those depraved oil companies.

Now, suppose for the sake of argument that the Iraqi War was really completely motivated by "oil". If that's the case, emancipated minds would have to agree that the actual waging of the war has been hamstrung by bureaucracy, impotence, and political correctness - all prevailing tenets of Big Government and its ministry of misinformation - Big Education. When it comes to aggregate influence in America no special interest group can hold a candle to the statists in terms of either money spent or humanity robbed.

Make sure you click on that Forbes link above. If you are still suffering from your own education, then maybe just check out the article's illuminating graphs pictures.

All you need to know about the priorities of Big Education was summed up best by Albert Shanker, the pioneering organizer of teachers' unions.



"When school children start paying union dues, that 's when I'll start representing the interests of school children."

Here's a link on the disgusting NEA.

Remember, all education is mind control - even homeschooling.

But there's a big difference between political and parental indoctrination.