The Patient is Alive

Well, it seems like the strum und drang has abated for at least another day. While everyone is breathing a sigh of relief at the resiliency of the market, let's not forget that while the patient is still alive, it is on life support. The disease is still advancing, albeit at a slower pace.

If we look at the market in situ, it seems that we may have dodged a bullet, however, our problems are much deeper than whether individual stocks go up or down. The nature of the stock market is such that when a big drop or correction occurs then those in a position to buy will buy, thereby picking up some bargains that may have been overpriced or overvalued. But the question remains, are we out of the woods because the market responded to a buying signal, or is the market suddenly stable. And if the market is stable, what the heck happened yesterday ?

What happens if and when Paulson gets the authority to buy depressed mortgage securities? Can we trust him to be the Honest Broker that we need ? Or is it safe to say that since Paulson was created on Wall Street that he would look to his friends first.
It's a tough decision, to rescue or not to rescue
That my friends is the question

There you have it.

Show me the Money

We are being asked to come to aid of Wall Street at a time when the economy is straining under the weight of deficit spending, tax cuts aimed at the upper one percent, and a seemingly unending war in Iraq. The war in Afghanistan is careening out of control, home values are dropping faster than clothing at a nudist park, gas is at prices that this country never thought it would ever see.
Groceries are costing more and more, and we are headed to a position where we may have to make difficult buying decisions.
I am not an economist; I am not qualified to to discuss macroeconomics, I have a dim memory as to what M1 and M2 are in relation to money supply, and I can barely understand what leveraged, securitized derivatives are and how they affect the brokerage houses.

What I do know, is that when most people go to the local supermarket and take a look at milk and other dairy products, the prices are through the roof. The conversations in the supermarkets rarely turn to Wall Street, the concerns are much more immediate.

There are folks who are falling behind on their mortgages...the unemployment figures in Florida are hovering at around the seven percent level, and in the land of milk and honey, California, the unemployment rate is 7.3%.
And yet, we the people, are being asked to save an industry that makes its' living betting on whether stock "a" will go higher than stock 'b". These folks will also bet that that company "a" will fail, and when it does, they collect on the "put".
So what is being asked?

As far as I can make out, we are being asked to reward risky behaviour without any penalties. Reward the gambler by giving him\her another seven billion pot so that they can continue playing a perverse version of Texas Hold'em.

I am not quite sure what the answer is, but I am very sure that the right questions are not being asked.

A fairly accessible explanation of CDO's

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=929747



So, there you have it...

Questions

There are a number of things I can't seem to wrap my head around, not the least of which is...

• Why does the media believe that Sarah Palin is the great white hope?
• How long will the love affair last?
• If Bill O'Reilly believes that Jamie Lynn Spears' parents were 'pinheads' for not properly supervising their daughter, what must he think of Bristol's' parents?
• What do pit bull owners have to say about putting lipstick on them?
  
• Do pigs have lips? And if they do, what shade is best for them?
• Can a guy who has been in Washington D.C. for the last few decades really bring change to the beltway; and by change, does he really mean more of the same or can he really run this nation to the ground faster than his predecessor?
• Is it really possible to affect any kind of sea change in D.C.?
• Can McCain\Palin really pull the wool over everyone's eyes?
  

The most important question that remains to be answered is whether we can continue doing the same thing over and over again, and expect different results?

So there you have it.

Who you gonna believe? Me or your Lyin' Eyes?

There is much to be said about the lies and misinformation being trotted out in defense of McCains' pick for the VP slot, much of it is either wishful thinking or just out and out lies. 

The incredible petard being hoisted that Alaska's proximity to Russia somehow confers foreign policy gravitas on Governor Palin is at best laughable and at worst cynical.

There is nothing in Palins' history that would even begin to qualify her for the second most important, and the right of succession, to the highest office in the land. 

I've been trying to wrap my head around the various arguments being bandied about by the right wing of the right wing Republican Party.

• She's a governor 
• She was a mayor
• She was in a beauty contest
• She's a mom

On the face of it, the first two may in some way qualify her for higher office, that is of course if one ignores what city or town she was mayor of, or the state where she is governor. 

I live in a town of approximately 25000, I know the mayor, and he is hardly qualified to be a VP or to be one step away from the presidency. 

The state of Alaska may be the "largest" state in the Union, but is by far one of the smallest in terms of population and infrastructure. The county of Santa Clara, Ca. has twice the population and I'm pretty sure that it's GDP probably dwarfs that of Alaska. You may correct me if I'm mistaken.

Being a contestant in a beauty pageant only proves one thing, although I'm not sure what.

I'll concede the point that she is a mom, and being a parent is perhaps the most important job in the world, however if that's the rubric by which we measure candidates, then I nominate my mother...

So there you have it.

BTW...six colleges in five years...sheesh.

 

The American Disconnect

The Republican Party convention has finally closed, and for those of us who have a memory of times past, it really was no different from Republican conventions that came before it. The level of nationalistic hyperbole should surprise no one, and its' appeal for simple solutions to complex problems are deja vu all over again. Nothing much has changed. The 'flat-earth, no-nothing' wing of the party has pretty much solidified its' stranglehold over the party.

The selection of Sarah Palin has clarified the direction of the party for the next ten years or so, the social conservatives have made it clear that they are in charge and it behooves anyone thinking about running for office whether it be dogcatcher or senator to hew very close to the line.

What was McCain thinking?

I'm not willing to concede the label of maverick to describe him. There is nothing in his background that suggests that he is anything but a 'go-along-to get-along' kinda guy. Let me correct that last sentence, there was only one time in past where that label had any legitimacy, back at the Naval Academy, when he graduated at the bottom of his class.