Sunday Music Blogging - 1/31

These guys were my idols when I was a kid.  Damn, I made a good choice!

Note in this video, they're both playing Kings!  They look like large bore horns: 3B, or even 4B.  They both had monster chops, and great dexterity.  They also played together with a single-minded unity that is astounding.  They made recordings together in the late 50's - 25 years earlier.  See if you can figure out who is playing lead when they are playing in harmony.  I think they trade it off - seamlessly.

Enjoy - it's alright with me if you do.

Big GDP Whoop!

Wow! 5.7% growth!

Oh, wait a minute.  It's an inventory blip.  Drat.

Mish provides quite a bit of relevant information.

Alas, though, he can't resist saying this at the end:

It is a mistake to believe government spending can possibly provide a solid foundation for a lasting recovery.

This might be my favorite bit of nakedly-asserted right wing/glibertarian dogma.

I'm not sure when Mish was born, but he evidently missed 1938 through 1980, before supply side economics started the demise of the American economy.

Regulation, Regulation, Regulation

It's hard to beat Krugman if you're looking for down to earth reality on any topic he chooses to address.

Those who think that “too big to fail” is the essence of the problem have to explain why Canada, with basically just five banks, has avoided crisis. Those who blame the Fed for keeping interest rates too low too long have to explain why Canada, which basically had the same interest rate experience we did, didn’t have anything like the same problems.


So what’s Canada’s secret? Regulation, regulation, regulation. Much stricter limits on leverage, much stricter limits on unconventional mortgages, and an independent consumer protection agency for borrowers.

(Emphasis added.)

Without regulation, the fox is in charge of the hen house, and - sooner or later - the wolf will be at your door.  It's twue, it's twue.
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Six Word Saturday - 1/30

Yesterday, Obama kicked lame Republican Ass!

Boneheads have NOTHING to stand on.
They regretted letting it be televised!

You can see it all HERE.

Visit msnbc.com for breaking news, world news, and news about the economy

Republicans - All Wrong, All the Time, Pt 6

I've stated that the Republican policies of tax reduction have not been helpful in encouraging GDP growth.  I've also posted on the poorer performance of Republicans in various social measurements - notably reducing abortions.

Now, I've discovered similar work, though far more extensive and scholarly, done by cactus at Angry Bear, back in 2007.  What's your favorite economic measure:  GDP growth, National  Debt, real tax collections, value of the dollar, health care costs?  What's your favorite social issue: abortions and unwed motherhood, marriages and divorces, sexually transmitted diseases, youth crime?   The stark truth is that the nation does better on all of these issues with a Democrat in the White House.

Cactus summarizes as follows:

For economic issues I’ve looked at, it seems to be a slam dunk. Republicans simply performed worse. On every measure. Period. End of story.

For social issues… Republicans did better on teen cigarette, alcohol, and drug use. GHW also managed to do well on containing gonorrhea, though not much else. (And by “not much else”, I mean not only at not containing other STDs, but really, truly, not much else, whether in the social or economic sphere.) Otherwise… whether reducing the incidence of abortion, decreasing teen motherhood, encouraging marriage, reducing the incidence of most STDs, or cutting teen violent crimes, Democrats did better.

So, whether you're concerned with economic value, or family values, you will find your life more fulfilling and the world a better place with a Democrat in the white house.

And lest you intend to bring forth the Republican canard that Congress, not the President is the controlling factor, please be apprised of these facts, re: GDP growth - debt growth.

Alignments rank ordered by performance:

 These differences are stark, and consistent.  The lesson is simple.  Republicans are bad for the economy.

Cactus also exposes the "tax cuts are good for the economy" fallacy.

I'll probably have more to say about this later.  Meanwhile, why is it that the Democrats are not yelling these facts from the tree tops?  I mean WTF? Really!
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WTH? Friday - Somber Edition

Today, I went to the funeral of one of my work colleagues - a guy I knew casually, for many years.  He died after a long illness - more than a decade of fighting cancers that eventually ravished his body beyond all hope of recovery or survival.  Over the last decade, the doctors had said it was the end on at least three separate occasions.

Be he was a man of tenacity, great inner strength, and a great love for life.  I knew him as an excellent engineer, and a fine person of impeccable integrity. Others who knew him better told me of his sly wit and subtle sense of humor.  I wish I had known him better, too.

He was 39 years old, and leaves behind a wife and two young sons - preschool young. 

His was a short life, and difficult; but, I suspect, one of love and great fullness.

I think his advice to us would be to love life, and cherish love.

R.I.P. friend.  You will be missed by many.

Party of No, Pt. 2

Here is another busy graph.  For a simpler version see here.

 

This is all prompted by a comment from J at the link, above.  The snakey lines show the number of senate seats held by each party over time.  Red is Republican, blue is Democrat.  Purple line at 50 shows where the even split would be.  Broken Red/Blue line at 40 shows Rep (Red) or Dem (Blue) president.  The cloture vote line is now similarly coded red-blue, indicating the (minority oops!) majority party.  The yellow dot indicates the number of cloture votes in the current congress  with about a year to go.  Lovely.

Three things jump out.

1) The growth of forced cloture has its roots in a long term Republican senatorial minority.  They owned it from the beginning.

2) The Democrat's skirts are not clean.  From '81 on, at times when they were in the minority, they have been about as involved as the Republicans in forcing cloture votes.

3)  Since 2007, we are in a new realm of filibuster and cloture.  This is clear - and the reactions of the Repugs at the SOTU last night bear it out - all they are interested in is making Obama fail.  To hell with the country.

What a bunch of god-damned corporate-internationalist traitors.
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The Arsenal

These are the horns I play regularly.  On the left, a Reynolds Contempura dual-trigger bass.  In the middle, my beloved King.  To the right, a Holton TR-161 large bore tenor, with F-attachment - my symphony horn.

Here is a closer view of the bell sections.   Each of them is special, in its own way.   The bass bell is either pure copper, or a very copper-rich alloy.  It is extremely soft and easily wrinkled, as I once learned to my chagrin.  The king bell is sterling silver - heavy, man.  The Holton has a rose brass bell.  This is a higher copper alloy than yellow brass, and is supposed to deliver a dark, rich sound at lower dynamic levels. 

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Silly Haiku Wednesday - Change

Change I believe in,

A clean break: Just this morning

I put on fresh socks.

My Thoughts Exactly

Same As He Ever Was

These days quite a few people are frustrated with President Obama’s failure to challenge conservative ideology. The spending freeze — about which the best thing you can say in its favor is that it’s a transparently cynical PR stunt — has, for many, been the final straw: rhetorically, it’s a complete concession to Reaganism.

But why should we be surprised? Here’s one from the vault. Two years ago, I was deeply frustrated with Obama’s apparent endorsement of the Reagan myth.

There was a lot of delusion among progressives who convinced themselves, in the face of clear evidence to the contrary, that Obama was a strong champion of their values. He wasn’t and isn’t.

That doesn’t mean that there’s no difference between the parties, that everything would have been the same if McCain had won. But progressives are in the process of losing a big chance to change the narrative, and that’s largely because they have a leader who never had any inclination to do so.

I love it when Krugman agrees with me.

UPDATE: Robert Reich and Ron Paul weigh in.

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Quote of the Day

The widespread view among healthcare reform foes that Medicare is not a government program inclines me to ask: If Obama gets away with this, what is the government going to take over next? Social Security?!?!?

Only took me 5 1/2 months to sumble across it.

Are We On the Right Track? Taking Stock

Here is a follow-up to the previous post, in which I hinted at this hypothesis: the common perception of "are we on the right track" is largely determined by the state of the economy.  Using the level of the stock market as a proxy for the state of the economy, let's explore this hypothesis.  The blue line on the chart shows the percentage of survey respondents who think the country is on the right track.  The green line is the year over year (YoY) percentage gain/loss of the S&P 500, based on the average value for the years in question.  For graphing purposes that value is used for any date during the year.  This is a pretty coarse cut, and quite simplistic.  On the other hand, surveys were taken at irregular intervals, and often present a range of values within any given year.

Despite all this, in broad brush terms, there is a similarity in the general shape of the curves - with one striking exception.  The stock market crash of 2001-2 is not reflected in the survey results.  In addition, there is a large data gap, as there are no survey results given for any time in the years 2000 and 2001.  Don't ask me why.



How can we explain this anomoly?  Here are some guesses.

Since data is missing for three full years between the data points at 2/14/99 and 2/21/02 there could have been a temporary drop that is simply missed.


By 2/21/02 the Bush adminstration was deep into sabre rattling, and that always makes people feel like something worth while is happening.  The spike up at 4/30/03 corresponds to the Iraq invasion.

W's folksy, down-home charm might have been comforting in what was a difficult time.

W's stubborn aggressivness was temporarily mistaken for strong leadership.

At any rate, by the end of W's second term, the perception of being on the right track followed W's approval ratings to previously unheard of lows, while the stock market crashed just in time for the election.  As a nation, we are eager to go to war, but tire of it when it looks futile and endless.

Obama's election brought new hope, and a coincident rise in the stock market.  Can either one last?   I, for one, am not optimistic.

Are We Hard to Please. Or What?

Since the Nixon/Ford administration, pollsters have been asking this question:

Do you think things in this country (are generally going in the right direction) or do you feel things (have gotten pretty seriously off on the wrong track)?

Here is a graph of the responses, data from WaPo,  graph by your humble trombonist.  Yes, it's busy, but please bear with me.

In bright, sunny yellow, we see the percentage of respondents answering "right direction."   The thin horizontal yellow line shows the average across the period, 35.77%.  In somber, depressing  brown, we have the percentage answering "wrong track."  Period average of 60.16% is a barely visible thin brown line.

There are lots of ups and down over the years.  What are we to make of this?  The Bar placed on the 80% line gives us some clues.  The red segments span Republican Presidential administrations; the blue segments, Democratic Presidential administrations. 

Let's examine this in detail.  Nixon resigned on August 9, 1974, within weeks of the extreme points at the left side of the graph.  Carter's election brought new, short-lived hope.  Sentiment deteriorated badly during his term, and we gave him the boot, in favor of Mr. Ronnie "Morning-In-America" Reagan.  During his first term, "right" and "wrong" evaluations were much better than their average values, so we gave him a second term.  Sentiment slumped a bit in the 2nd term, but favorables stayed above average, and unfavorables below average, so we promote George H.W.Bush to the presidency.  Alas for him, that was when some of Reagan's vultures came home to roost, and by mid 1992 (an election year) the numbers were even a bit worse than Nixon levels.

Rightly or wrongly, an unhappy electorate blames the President.  That's just a political fact. In large measure, this is determined by the state of the economy, which is a poor proxy for presidential performance.  So we bounced Bush the First, and bought in the Clinton Golden Era.  Sentiment peaked briefly at first, then sagged during the first Clinton term.  Even in mid 1996, the numbers were far below average.  But they snuck up above average by election day, so we gave him a 2nd chance; and his assesment launched like a rocket from 1996 on.

Clintons's second term "right" and "wrong" values are far more favorable than their averages, hitting extremes in January, 1998.   Even after the 1998 impeachment, sentiment remained near exteme levels. Still, in a close election, we sent the incumbent part into minority status.


This is pretty difficult to understand, since the economy still looked pretty strong.  There were lots of factors, very prominent among them the facts that 1) Repugnicant Swift-Boat liars committed character assassination on Al Gore, and 2) The election was stolen in Florida, and G.W. Bush was appointed President in the 3rd worst Supreme Court decision of all time.

The record of the Bush 2 administration needs no detailed analysis.  First term values deteriorated a bit, but stayed better than average, even in the wake of 9/11 and the recession of '01-'02,  In the 2nd term, the citizens woke up to what Bush was about.  Maybe his attack on social security was the alarm clock.  In summary, Bush, et. al. did everything wrong, lied about it, and lied about their lies.  Hence the Democratic sweeps of '06 and '08.

But we are an impatient and hard to please people.  Obama inherited an impossible task, and the Right Wing noise machine is loud and potent.  They are dedicated to his failure. "Right" and "wrong" values currently hover near their average values.   Who knows where we go from here?

Sunday Music Blogging - 1/24

It was our distinct pleasure on Friday evening to hear Hilary Hahn perform with the Detroit Symphony Orchestra.  They played the Violin Concerto that contemporary American composer Jennifer Higdon, wrote for Hahn.  This is a new work that premiered last February in Indianpolis.  She plans to record it in the near future.  Meanwhile, here is Hahn playing Prokofiev.



Here she is interviewing Jennifer Higdon,

Playing at the Grammy award ceremony,



And accepting her second Grammy, wearing the dress she wore for the DSO performance.

Shadow Shot Sunday - 1/24

Sleek golden-throated

Horn, sound of liquid sunlight

Casts silver shadow.

This is not poetic license.  The bell section is sterling silver, with a 24 carat gold wash inside.

For a view of the golden throat, see here.

For more sapid shadow shots, click on the badge, below.

Six Word Saturday -1/23

Supreme Court sold US to corporations.

Kiss democracy goodbye, here comes fascism.

Read all about the over reach.

Party of No

The Repugnicants will have their way, whether in power or out.  They have used the Filibuster to obstruct the democratic process, as a means of inducing failure to Democratic processes.

Here is a graphic demonstration of of their abuse of non-power.  Data from Senate.gov.  Some relevant commentary came be found here, and here, and lots more places if you use Teh Google.

Each session covers a two year span.  The last completed congress, the 110th, spanned 2007-2008.  The current 111th session covers 2009-2010, and has had 39 cloture votes to date.  It is indicated by the yellow dot on the graph.  While they might not expect to reach the 112 votes of the last session, it a pretty sound bet that the recent norm of 50 to 60 per session will be greatly surpassed.

They are the party of No.  And they are adamant in their desire to see Obama fail, and take the country down with it.

What a bunch of God damned, corporate-internationalist traitors.
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What the Hell?!? Friday

Even after the Cheney-Bush administration was appointed our overlords, protectors, and deciders by judicial over reach in 2000, I was willing to give them the benefit of the doubt.  But after Bush's 7 minutes of catatonia on 9/11, the resulting lie-based decision to wage an unjust and unjustifiable war against an uninvolved country, the unsuccessful attack on Social Security, etc., I gradually came to the realization that when thinking about them it was virtually impossible for a reasonable person to be cynical enough.

Here are some more impossibilities.  It is impossible to overstate:

The sheer terrible awfulness of yesterday's Supreme Court decision.

The destructive effect it will have on the tattered remains of our shattered democracy.

The degree to which international corporate interests already dominate both political parties.

How much people who call themselves "conservative" hate democracy, the Constitution, and what the U.S. is supposed to stand for.

The extent to which the Republican Party is dedicated, as Rich Limplow demanded, to making Obama fail - no matter what the consequences are for the country.

The contempt of the religious right for the separation of church and state.

The stupidity of that subsection of the Massachusetts electorate who voted for Obama in '08 and Scott Brown this week.

The insanity of teabaggers, birtherers, 12ers, and their ilk.

How far we have devolved toward fascism.

How thoroughly we now are screwed.

Did I miss anything?

Deep Stupid #15 - SCOTUS Gives Away the Country

One small step for 5 reactionary SCOTUS leeches sucking at the copious tit of multinational corporations, one giant leap for fascism.




This idiotic decision in the Citizens united Case- an example of egregious, over-reaching judicial activism - can only be understood in the context of these two absurd and unjustifiable assumptions:

1) A corporation is a person. A living, breathing member of "We the People."

2) The donation of money is a form of speech.

At Slate,  Dahlia Lithwick reports:

While [Justice John Paul] Stevens is reading the portion of his concurrence about the "cautious view of corporate power" held by the framers, I see Justice Thomas chuckle softly. (Scalia takes on this argument in his concurrence.) Stevens hammers, more than once this morning from the bench on the principle that corporations "are not human beings" and "corporations have no consciences, no beliefs, no feelings, no thoughts, no desires." He insists that "they are not themselves members of 'We the People' by whom and for whom our Constitution was established."

 Thomas chuckles, while granting the equivalent of personal U.S. citizenship to corporations, many of which are foreign owned.

A very large percentage of U.S. corporations are owned by foreign persons or entities. In 2006, USA Today reported: "Nearly one in five U.S. oil refineries is owned by foreign companies. Foreign companies also have a sizable presence in running power plants, chemical factories and water treatment facilities in the United States." It was also reported that, "Roads and bridges built by U.S. taxpayers are starting to be sold off, and so far foreign-owned companies are doing the buying." In 2008, it was reported that foreign ownership of U.S. companies "more than doubled" between 1996 and 2005. To get a fix on the spending power, consider this: "The total receipts of foreign-owned companies were $1.7 trillion in 1996 and just $39 billion in 1971."

The court could have made a narrow decision, dealing specifically and exclusively with the matter before it, an attack-dog movie swift-boating Hillary Clinton, but instead chose to overturn more than 100 years of legal precedent, upheld repeatedly over that time, while giving the rights of American citizenship to EXXONMOBIL and THE DUBAI INVESTMENT GROUP,  to cite just a couple distressing examples.

Read reactions, pro and con, here.   I love it when Russ Feingold agrees with me.

Presented with a relatively narrow legal issue, the Supreme Court chose to roll back laws that have limited the role of corporate money in federal elections since Teddy Roosevelt was president. Ignoring important principles of judicial restraint and respect for precedent, the court has given corporate money a breathtaking new role in federal campaigns. 

- Sen. Russ Feingold, D-Wis.

In recent days, I've been thinking that we are within a decade of having our once proud democratic republic devolve into fascism:  a political ideology that seeks to combine radical and authoritarian nationalism with a corporatist economic system.   Alas, for my naive optimism.  All we're lacking now are the jack-booted thugs.

I expect them at my door, just as soon a Google tells them where I live.

We are SO God damned screwed.

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Quote of the Day

Omega Centauri said*...

"Correlation == causation IF and ONLY IF it breaks the conservatives' way."

Copyright 2010 Centauri's law!


Here is the context, via Krugman.

ERTA was the Reagan tax cut.  TEFRA was the first of Reagan's tax increases - sales, excise, and payroll tax increases, disproportionately hitting lower and middle class taxpayers, as Krugman's commenters point out.  Krugman goes to some pains to disclaim cause and effect, re: ERTA, TEFRA and jobs, instead blaming the job changes on Federal Reserve policy.   Still, a couple of striking coincidences.
_________________________________________
* In comments (2:45 p.m.) at Delong's blog.

Lots of sharp commentary at both Delong's and Krugman's blogs.
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We're All Donner Party Now

Clearly, the best (perhaps the only) solution is to start eating the grandparents.

While California has an even bigger budget hole to fill, Illinois ranks dead last among the states in terms of negative net worth compared with total expenditures. The state's liabilities, including future pension payments, exceed its unrestricted assets by $39 billion, more than 72% of its total expenditures as of mid-2008, according to Richard Ciccarone, managing director and chief research officer at McDonnell Investment Management LLC, an Oak Brook money manager that invests in bonds. "It's probably higher now," he adds.

. . .

In addition to its day-to-day budget, Illinois faces rising pension expenses in coming years. Lawmakers have skimped on required contributions to employee pension funds and even borrowed to make those smaller payments. Unfunded liabilities and pension debt are projected to reach $95 billion by June 30. The state must contribute $5.4 billion to the pension funds next year, and more than $10 billion a year in the future. Required contributions will soon start increasing dramatically because the state has repeatedly pushed back a payment schedule enacted in 1995 to set aside enough to cover 90% of its pension obligations by 2045, up from 43% today, one of the worst unfunded liabilities in the nation.

The sharp rise in pension payments is the biggest factor pushing Illinois toward what a legislative task force last November called "a 'tipping point' beyond which it will be impossible to reverse the fiscal slide into bankruptcy." The little-noticed report on the state's pension problems warned that "the radical cost-cutting and huge tax increases necessary to pay all the deferred costs from the past would become so large that many businesses and individuals would be driven out of Illinois, thereby magnifying the vicious cycle of contracting state services, increasing taxes, and loss of the state's tax base."

While the Illinois Constitution protects vested pension benefits, that promise, like all the state's obligations, is only as good as its ability to pay. The Civic Federation warned lawmakers last fall that "there is mounting evidence that a judge could find the state is already insolvent. If the state is found to be insolvent under the classical cash-flow definition of insolvency, which is 'the inability to pay debts as they come due,' it is not only the pension rights of non-vested employees that will be in jeopardy.

Emphasis added.  Hat tip to Calculated Risk.
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Mellow Yellow Monday - 1/18

Grandson Nate's First Grade Science Project from last year.

Photo credit to me.  Poster copyright to Nate.

Update:

Beetles burrow and

Lay eggs. Larvae hatch: white grubs.

They eat roses, lawns.

 

Shadow Shot Sunday - 1/17

Wait up, little guy.

Grandmom, Bumpa - follow me;

Let's find the giraffes!

When we found them, they were indoors with their new baby.  Alas, we couldn't get a good picture.

Sunday Music Blogging - 1/17

Offered without comment, for your edification and/or amusement.

Republicans - All Wrong, All the Time, Pt 5

Peter Dorman at Econospeak offers these thoughts about the current state of Politics:

A big one {element in what's wrong. - JzB}  is the devolution of the Republic Party. It is difficult to find words to express this. I have never, not even when I was a young kid, had any affection for this outfit, but in retrospect I have to admit that, once upon a time, they were conscientious in support of the values of their constituency. In office, they would hire experts (more conservative ones, but not always) to provide reasonably informative reports and forecasts. They often found themselves on the yea-side of important, progressive legislation, such as the wave of environmental and consumer initiatives of the late 1960s and early ‘70s. They were worth arguing with.

I can’t remember how many years it’s been since I paid any attention to the intellectual content (if that’s the right term) of Republican discourse. At least since Gingrich, it's been fools-or-knaves all the way. But our political system is set up to lock in place a two-party governance structure, and if one party goes bonkers, the machinery simply breaks down.

. . . 


Bush, for all his horrors, was not the root problem, and the election of Obama is hardly the solution. If we want to try to turn this thing around by design and not just depend on dumb luck, we need to identify the deeper issues and focus our energies on them.

In comments there, I opined thusly:

I agree that Bush is not the heart of the problem. But he serves as a great symbol. My reaction, when he got put forward as a candidate for President in 1999 was that democracy had failed. Here was an intellectually bankrupt son of privilege, who was an abject failure at everything from the oil biz to sports, but really good at executions.


If this is what a major political party offers us, then the system is broken beyond repair. And the even more odious Sarah Palin looms on the horizon.


The deeper issue is that corporations own both parties, and the political power of real people is nil.

Read Dorman's post -  it's worth it, then tell me what you think.

Again, A Heffalump

Six Word Saturday 1-16

Saturday in Toledo for Mom maintenance.

What the Hell?!? Friday - Starving the Beast

Here is Jim Kwak on Big Banks muffing loan modifictions.

Paul Kiel of ProPublica has uncovered multiple cases where homeowners are not getting their trial loan modifications made permanent. That’s not news. What is news is that the reasons the banks are giving for not making the modifications permanent are complete bogus!

. . .

There doesn’t even need to be intent here (although there could be). Companies focus on the things they think are important. During the financial crisis, all the banks were focusing on their cash levels every day, and I’m sure they did a very good job at it. They don’t focus on things they think aren’t important. It seems like JPMorgan Chase and Wells Fargo are not focusing on their loan modification programs, and Citibank is not focusing on delivering on its promotions, just on using those promotions to suck cheap deposits onto their balance sheet. If that ends up helping their bottom line, then so much the better for them.

There's a lot to this.  By way of personal anecdote, I refinanced my mortgage with one of these named Big Banks a few years back, and received a nice letter from them at the time confirming the pay-off of my previous loan and stating that they would also notify anyone else who needs to know - as is their legal responsibility.  FYI, the entity that needs to know is the registrar of deeds, in the county where you live.  They need to get the prior mortgage off of their books before you can do anything with your property, like sell, or even refinance again.

This is the situation I find myself in.  That prior mortgage, paid off lo these many years past, was never discharged with the county.  I am in the process of refinancing with my local credit union, to get a better rate, a lower monthly payments, and the hell out of the clutches of the robber barons who run these "too big to fail" money sewers.

If you have a friend in real estate, ask her or him how common this is.  It aint rare.  How did it happen?  My guess is some partially educated clerk stuck the papers in a drawer innstead of the USPS, and that was the end of it. You see, this is one more consequence of the profit motive: you have jobs done as cheeply as possible, which means performance quality is sacrificed to the minimum wage.

My new loan officer, the title company, and my lovely wife have been battling the Big Bank at the far end of the alphabet for over six weeks to get this simple paper-work assignment carried out.  Big Bank contracts this menial task out to a 3rd part vendor, and states it takes a minimum 20 business days, NO EXCEPTIONS.  That tells you everything you know about how much customer service means to them.  Meanwhile, we can't close on our refinance.

My first savings account was with a Savings and Loan institution, not a bank.  This was way back, long before the 1989 S&L crisis, an early adventure in deregulation, risky lending, executive overcompansation and moral hazard, whose lessons were forgotten in about 17 milliseconds.  Since then my dealings with banks have always left me feeling like the dead rabbit on the yellow line.  Thus, for simple savings and checking accounts, I abandoned banking for the comparitive warmth and comfort of my friendly credit union many years ago.

This mortgage with Big Bank is among the last vestiges of my dealings with large financial institutions.  I still need to re-evaluate my credit card holdings.  My plan is to eliminate any dealings with these "too big to fail" institutions.  Let's all do that.  Then, when they've shrunk to the point that they CAN fail, we can drown them in a bath tub.
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Taking it to the Bank

A California lawyer has had ENOUGH of BofA, after they cut his credit line and raised his rate, and is letting them have it with both barrels.

"I consider your action an anticipatory repudiation of the contract and am treating you as in breach," he wrote in a Dec. 31 letter to the bank. "I am therefore not paying the money that is currently due on January 3, 2010 out of protest."
...
"I have no doubt that you will mark my credit in light of this default, but if you do, I will sue you. I am eager to argue to a court that your interest rates are unfair within the meaning of various state and federal statutes, and anxious to point out that you 'had' to cut my credit limit from $32,000 down to $30,000 at the same time you were borrowing billions from the federal government and paid your executive bonuses in full."

But to truly appreciate this, you have to put it in context. Follow this link.  Go read it.  Now.
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Deep Stupid #14.1

This is bubblicious!

Recall this quote by former presidential candidate and permanent ass-hat Ron Paul, from the document I ridiculed in D.S. #14.

After all, Krugman is still scratching his head as to why “no” economists saw the housing bust coming. How in the world did they miss it?  Actually many economists saw it coming a mile away, understood it perfectly, and explained it many times. Policy makers would have been wise to heed the warnings of the Austrian economists, and must start listening to their teachings if they want solid progress in the future. If not, the necessary correction is going to take a very long time.

Here is a partial, indeed - cherry-picked, list of Republicans, supply-side pundits, and blowhards who missed it, with some brilliant introductory text (emphasis added.) 

The housing bubble has precipitated a severe, and possibly catastprophic, economic crisis, so I thought it would be useful to put together a list of pundits and experts who were dead-wrong on the housing bubble. They were the enablers, and deserve to be held accountable.... Many of the names on the list won't shock anyone, I'm sure. And FWIW, a few of the pundits seemed to deny the existence of the housing bubble simply because Paul Krugman argued that there was a housing bubble, and they absolutely hate Krugman. Unfortunately (for our economy), Krugman was right—again. The list is a work in progress (though I've been reasonably thorough in my research), so feel free to suggest other people who should go on the list. So without further ado, here's the list:

1. Alan Reynolds, Cato Institute
2. Kevin Hassett, American Enterprise Institute
3. James K. Glassman, American Enterprise Institute
4. Jude Wanniski, journalist/supply-sider
5. Jerry Bowyer, author of The Bush Boom
     
7. Jim Cramer, host of CNBC's "Mad Money"

13. Steve Forbes, CEO, Forbes, Inc.

22. Kathryn Jean Lopez, editor, National Review Online

I can't say for sure that Sarah Palin appologist Reynolds is an Austrian.  But I have to suspect someone at Cato at least has lunch with them once in a while.  Wanniski  isn't just your garden variety supply-sider.  He invented the term "Supply Side Economics," was Reagan's adviser on first term tax cuts, and previously developed the Republican Party's "Two Santa Claus" strategy.  It only took a couple of minutes skimming his There Is No Housing Bubble post to discover what a delusional Krugman-hating crank he was.  He died a couple of weeks after it hit the intertubes.

Delong presents the whole list.  Original list and text are from Economics of Contempt which has links to the actual writing of these purveyors of Krugman denialism.   Hat tip to both.

Was the Sarbanes-Oxley Act Harmful to Business? Part 2.1

In Part 2, I mentioned in passing how the short-term view of shareholders can impede the long-range planning of corporate executives.

Here is an elaboration on how hostile market conditions can damage the long range health of a company, and thus influence the decision to go private.  I'll editorialize and say that this is a basic, systemic flaw in free-market capitalism.

But these explanations miss the chief culprit: public markets have become a hostile environment for corporations.

Stocks fall out of bed when companies miss earnings or revenue guidance. Concerns that don’t show enough growth are told either to improve margins (which usually leads to cost cutting, a short-term expedient that simply starves the enterprise) or to rid themselves of mature businesses, no matter how much cash they throw off, so that the remainder will garner a higher earnings multiple. And analysts are even lobbying for changes in areas once considered to be management’s purview, such as pricing, wage levels, and employee benefits, at successful, premium multiple companies.

Companies’ efforts to please the markets have gone to such extremes that they are damaging, not just to individual companies, but also to the economy as a whole.

Many organizations are deferring high-payoff projects simply to bolster current earnings. One example: a telecom cancelled an ad program to promote second phone lines to retail customers. These second lines are one of their most profitable services, and the past campaigns had an 11 month payback. But that isn’t attractive enough in the current environment.

Humanitarian, Compassion . . . Burnish . . . Credibility

Sometimes, not often, something happens that is so sparklingly revelatory that no commentary is needed, or could even help make the point, no matter how light or dark your skin might be.

This is such a moment.



Hat tip to Media Matters, via Digby, via Krugman.

Wednesday Poetry Blogging

Genuinely horrible late at night edition.

Here is a bit of doggerel I dashed off in response to the picture and quite nice poem that can be found here.

THE OLD MAN AND THE SEA

Once I was a cheerful bloke,
Easy with a quip or joke.
Everything was going grand
Until I came here to the sand.
Now I sit beside the beach,
With sun and waves in easy reach,
Sad because I can't harass
The kids back playing on my grass.

Was the Sarbanes-Oxley Act Harmful to Business? Part 2

It has been proposed that Sarbanes-Oxley (SOX) drove many previously public companies into private hands, with the explicit assumption that this is a bad outcome.  I have no basis to judge the queston of whether this is good or not, and would welcome relevant facts and informed opinion.

There can be no doubt that many companies chose to either go dark or go private in the wake of Sarbane-Oxley (SOX), and that the passage of SOX was a precipitating factor.  The considerations driving the decisions among public, private, or "dark" (fewer than 300 shareholders, limited reporting requirements) ownership are many and complex.

Here are some factors that encourage going private;

Undervalued Shares make private or dark ownership an attractive bargain.

High costs, including compliance costs - namely SOX, make public status less attractive.

Lack of interest from market analysts and institutional investors diminishes benefits of public status.

Thin trading volumes and share price volatility lead to economic uncertainty for shareholders.

Business maturity, with low growth prospects but healthy cash flow, mitigate the need for liquidity.

A small number of individuals already own the majority of stock.

Owners have more tax planning flexibility, and control over estate planning.

For most of these, money is the driver, either for the insiders or for the profitability of the company - not necessary consistent or even compatible goals.  Still, these are all valid, sensible, perhaps even honorable reasons for going private.  Other reasons can come in to play though, that might be more shady, or even nefarious:

SOX specifies stiff penalties for wrong-doing, and holds the CEO and CFO responsible for doing right.  So, if any wrong-doing is part of your game plan, you'd best get out of the public arena.

Compensation and financial details can be kept secret, for good or for ill.

Scrutiny of all kinds can be avoided, with the possibility of also avoiding litigation, for good or for ill.

On the other hand, though, corporate management can focus on running the business properly, with a long-range view, rather then trying to please often fickle shareholders whose time horizon is the next quarterly statement.

Companies that went public at high evaluations in the 90's can provide windfalls by going private again at cheap evaluations in a down market.  Clearly, value perception is a big driver, according to Edward E. Nusbaum, chief executive officer of the global accounting, tax and business advisory firm Grant Thornton.

"During bear markets, many smaller publicly traded companies feel that the market is inadequately valuing their company," Nusbaum says. "In many of these cases, shareholders can unlock some of this unrecognized value by going private."

Further, he also stated:

"with the public markets in disarray the benefits of being a public company certainly have diminished for some small and mid-sized companies."

Even given all of this, there is one big exogenous factor that is vitally important in the public vs. private ownership decision: the type and amount of available financing.

Bharath and Dittmar also examined the impact of market and macroeconomic forces on firms' decisions to go private. They found that the likelihood of going private increases significantly in high sentiment and hot private equity markets and decreases in hot IPO markets. Further, supply of debt in the economy and costs of bankruptcy may be influencing factors, as well, they say.


"Since 2000, we have seen a resurgence in going-private transactions, fueled by the development of the private equity market," Dittmar said. "Given the size and growth of this market, it is important to understand the economic forces that determine these decisions.

 
There are downsides to going private.  The transition costs can be considerable, and the cost of capital will almost certainly increase.   Going either way in the public - private decision is, to some extent, driven by direct, or even immediate financial gain by those in a position to take advantage of it.

We can safely say that the passage of SOX tipped the balance in favor of going private for many companies.  But let's not overstate the effect - realistically, it is one factor out of many.

The premise that companies leaving the public arena due to the passage of SOX is a bad thing is simply that: a premise.
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Was the Sarbanes-Oxley Act Harmful to Business? Part 1

Dale, in comments to D.S. #14, asserts unequivocally that SOX, as it is called, reduced the number of U.S. IPO's (I'm being generous to him in stating it that way,) that the expense of over $4 million per year drove hundreds of publicly traded companies private, and that it has not met any of its goals.

Let's do some fact checking.

In this post, we'll consider IPOs.  Here (above and in the link)  is a chart of venture capital backed IPO's per year, as mentioned in a Business Week article for the years 1980 through 2008.  The latter, of course, was a dismal year for a variety of reasons.  The text of the article informs us that the average number of venture capital backed  IPO's in the 80's was 52, while the average of the naughts through '08, was 49.   Scant difference, especially considering that in the post-bubble shock and recession of  '01 to '03, IPO activity was torpid, and close to non-existant in the recession starting year of '08.    The chart also reveals how Dale cherry-picked 1996 as a bench-mark year, with over 250 VC IPO's, the second highest year of the 1980 - 2008 period.   In my chart, above, the pink line is a 5 year average, to smooth out yearly abberations, such as the big drop in 1997-8.

Now (chart above) look at the number of VC IPO's from '03 through '07. There appears to be a release of pent-up demand in '04, followed by very respectable, and growing activity after '05 until the '08 collapse.  Raw data found here.   Venture capital backed IPO's are only a portion of the total, which also includes buy-out backed IPO's, and a remainder with financing unspecified.  VC IPO's represent new companies going public for the first time, and are the sub-group most relevant to the discussion.  Private equity IPO's are essentially reverse LBO's, and not relevant.  

For comparison, here is chart of relative performance of the S&P 500 stock index, which I am taking as a proxy for general stock market pricing activity.  Data from Yahoo Finance, graph by me.  The graphed line is the percentage increase of the annual S&P average for the subject year, compared to the prior year (YoY.)

Correction:  Wrong data in the graph: see Update 1.


I'm not suggesting anything like perfect correlation to the IPO chart, but there is a general similarity.  Which only makes sense.  When you go public, you want as rich a capitalization as you can get, and an up-market is clearly better than a down-market.

So, sorry Dale.  Your first point is very unconvincing.  Realistic relevant factors influencing IPO activity appear to be general stock market performance in the year leading up to the IPO (no surprise) and the availability of VC money (also no surprise.)  The Business Week article, which never mentions SOX, suggests that VC IPO activity might now be permanently low, inhibiting total innovation, because venture capital is limited.    

It closes with this thought:

All of this could prove problematic for entrepreneurs who need VC-style equity investments. If there are fewer VC firms around to put several million into a high-growth startup, some of those firms aren't going to get the investment that they need. And that could mean fewer successful companies like Google (GOOG) and Genentech (DNA) that provide jobs for many people and innovative products that are valuable to all of us.

Update 1:   I made a data manipulation error in constructing the Relative S&P Performance graph above.   The graph actually represents a year over year change in the running three year average of performance - hence a smoother plot.  I graphed the wrong column from my spread sheet.  Corrected chart follows.  YoY performance in the 80's was generally good, but erratic.  The 90's were up-up-and away.  The naughts were like Ohio - zeros on the ends, "hi" in the middle.  This shows why 2004 was a much better year for IPOs.  It was a much better year for the market.

In fact, here (below) are IPOs plotted (blue line) along with the S&P performance - rescaled and translated to fit on the same chart (yellow line.)  Through the 80's and the noughts, they track together quite well.  Through the 90's bubble - not so much.

Update 2:   As I've indicated, IPO activity in 2004, was pretty robust.  Interestingly, it involved not only domestic IPOs, but also a sharp increase in foreign companies listing on U.S. exchanges, as this article from AltAssets indicates.  The end of the article quotes Scott Gehsmann,  North American leader of PricewaterhouseCoopers Global Capital Markets Group.

'In fact, across virtually every metric - number of deals, size of deals and IPOs by industry sector - 2004 saw a sizable increase over 2003. Moreover, the sharp rise in IPO activity suggests that the enhanced reporting requirements of Sarbanes-Oxley have not had the dampening effect on IPOs that some had predicted,' Gehsmann continued.

The number of non-US companies completing IPOs in the US markets also more than tripled in 2004, with Chinese companies leading the way.

I think Gehsmann might have a better understanding in his field of expertise than Ron Paul does.
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Mellow Yellow Monday - 1/11

"Someone told me it's 

All happening at the Zoo.

I do believe it . . ."

-- Paul Simon

Deep Stupid #14

Photo credit: http://seeker401.wordpress.com/2009/08/02/ron-paul-attacks-cap-and-trade-bill/


Ron Paul, former champion sprinter and flight surgeon turned congressman, well known racist, gold standard enthusiast, and conspiracy thoerist, issues a weekly newsletter, under the sponsorship of his Congressional Office.  Let's have a look at a recent offering

Texas Straight Talk
A weekly column

Keynesianism Delivers a Decade of Zero


This past week we celebrated the end of what most people agree was a decade best forgotten. New York Times columnist and leading Keynesian economist Paul Krugman called it the Big Zero in a recent column. He wrote that “there was a whole lot of nothing going on in measures of economic progress or success” which is true. However, Krugman continues to misleadingly blame the free market and supposed lack of regulation for the economic chaos.

Paul couldn't make it through the first paragraph without veering into a land that exists only in his imagination. We'll delve into his Krugman mistakes more deeply as we go along. As for "supposed lack of regulation," is the good Dr. suggesting that meaningul regulation still exists? Thanks to Phil Graham, Glass-Steagall was abolished, and any regulation of sophisticated financial derivatives was explicitely prohibited.

Since Paul doesn't bother to cite references - somebody might follow them and see how horribly dishonest he is -  I'll do it for him. Here is Krugman's Big Zero Column.

Sunday Music Blogging - 1/10

Let's make it up as we go along.

Shadow Shot Sunday - 1/10

Long, lithe limbs of trees

Naked in the winter chill

Capturing sunlight

Six Word Saturday

Oldest grandson is now 13.  Yikes!

This actually happened on Dec 27.  Aanyway - now you know.

Time marches on - that relentess 8@$7@rd.

What the Hell?!? Friday

The fact of the matter. Or not.

Americans like to think of themselves as individualists who make up their own minds. But based on what?

Thus asketh Barry Goldman, in an L. A. Times Op Ed piece, printed on January 3, 2010.  Let's tag along with him.

I once asked my Aunt Mary what her beliefs were on the subject of life after death. She said: "Whatever Jews believe, that's what I believe."

The first of many mysteries we are about to delve into is why a Jewish matriarch would have a name - a grand old name, mind you - that is generally reserved for Irish Catholic girls.

Aunt Mary's view was that there were people whose job it was to consider such things. She was not such a person herself, but she was completely confident that the guys assigned that task were doing their job, and it was all written down in a book somewhere. If you were sufficiently interested, you could look it up.This view is in decline.

I know nothing about Mr. Goldman, but based on the previous four sentences, I will lay 13 to 1 odds he is a conservative.

Wednesday Poetry Blogging

SWEET MYSTERY

Where does love come from?
Are you inspired by a face,
A line curved or straight,
The sound of a laugh,
Or a sob,
The color of eyes?

What is the source of heat?
Is it the friction of skin,
The brush of a lip or finger,
Or a touch,
In a secret place?

What happens when souls meet?
Do they reach beyond space and time
In a spiral of yin and yang,
Chasing destiny,
The filling of voids?

What does your love mean to me?
Am I eased by your presence,
warmed by your smile,
Completed only
When our souls touch?

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L.A. Times Crossword Puzzle Blooging

Wednesday, January 6, 2010  Gareth Bain

Theme: Classic Music Contracts, A-List - Classic Rock songs with verb contractions followed by "A" in the titles.

17A  1966 Monkey's Hit:  I'M A BELIEVER.  Written by the Lovely Wife's favorite, Neil Diamond

65 A  1968 Impressions Hit:  WE'RE A WINNER.  Must not have impressed me. No recollection of it.

11D 1971 Tom Jones Hit:  SHE'S A LADY.  Or at least a woman.  What's new, PusSycat?

1962 Hit attributed to the Crystals but sung by the Blossoms:  HE'S A REBEL.  Here are the Crystals

And, at no extra charge,
50A  Original iPod, as it's now known:    CLASSIC.  Not really part of the theme, but I co-opted it, so there.

But wait, there's more -

31A Put on the HiFi:  PLAY.   Spin them platters!

What the Hell? Tuesday

There have been close to three dozen (I stopped counting them) hits on my blog today, from all over the U.S. and  Europe, with the referring link more or less as follows:

images.google.com/imgres?imgurl=http://www.wreckthetapedeck.com/wp-content/uploads/2009/07/Salvador-Dal%C3%AD-In-Voluptate-Mors-photograph-by-Phillippe-Halsman.jpg&imgrefurl=http://jazzbumpa.blogspot.com/2009_09_01_archive.html&usg=__WaWX5N7TvXb-KJ

Actually, they vary a bit, following the final  "=" but the bulk of it is constant.

There is a  http://www.wreckthetapedeck.com/, which you might or might not enjoy.  I've searched the site, and can find neither a reference to my blog, nor anything that would send somebody here.  My posts on 2009/09/01 have nothing to do with Salvador, Vulpoate, Phillipe, etc.  On 2009/01/09 this blog did not yet exist.

Can anyone tell me what the hell is going on?

Update:  I have a hint at a solution. My crossword puzzle blog of 9/08/09 contains this link to a very interesting picture of Salvadore Dali.

http://www.wreckthetapedeck.com/wp-content/uploads/2009/07/Salvador-Dal%C3%AD-In-Voluptate-Mors-photograph-by-Phillippe-Halsman.jpg
OK.  So there's the connection.   But what is the path back to here, and why, all of a sudden, today?
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Odd Bird

Strange red-headed bird,

Are you crossing the road for

Some odd fowl reason?

Unidentified bird photographed at the Virginia Zoological Park, Nov. 16, 2009.

Does anyone recognize it?
.

Ron Paul - Moderate Conservative

Mish would have us believe that von Mises acolyte Ron Paul has somehow become mainstream.

Bill Maher has repeatedly offered the more reasonable explanation that, as the Democrats moved to the right, the Republicans moved to the insane asylum.  And now, they rub elbows with Mr. Paul.

OK, Mish.  If you want to believe that inflation is a relevant problem, or that teabaggers and the Cato Institute represent anything other than a fringe - go for it, amigo.  Look (as Obama might say) Paul would have us return to the gold standard - a sure-fire recipe for economic disaster. 

The problem is, these fringies are influencing the politics, and have Obama running scared on the deficit.  This is like FDR's misguided attempt to balance the budget in 1937, and one of the many reasons I think a slide into an even deeper recession (none dare utter the "D" word) is inevitable.

Consider that during the last decade, when the grotesquely irresponsible policies of George W. Bush brought about the greatest deficits in history, real economic growth was nil.  Literally.  No gain in stocks.  No gain in real property values, no gain in wealth for the typical family, and a continuing decline in real GDP growth.

Understand what this means.  A huge deficite and reckless credit policies - actions that should have been highly inflationary - caused no meaningful upside effect, and no inflation, amidst what was generally misconstrued as prosperity.  Balancing the budget will take us into the worst of all possible worlds.  And - Nolan Finley notwithstanding - Obama does not have the political will to stand up to the right wing on economic issues.

Basically - we're screwed.

Update:  More on Deficit hawking from Naked Capitalism.   And what I said, only longer, (OK - and smarter) at New Deal 2.0.

.

In Which I Berate an Editor - Again

This week, Detroit News editor and columnist Nolan Finley treats us to the brilliant and strikingly original concept that WE LACK THE WILL TO FIGHT TERROR.  Really.  You can't make up stuff like this.  As both of my loyal readers will no doubt have already sussed, it prompted the following letter, which I just sent via e-mail.  This might become a weekly JazzBumpa tradition.
 

Dear Mr Finley:

Congratulations!  This week you managed to write 202 words of relatively coherent prose.  Unfortunately, though, you kept on writing past that point, and your knee-jerk reactions took over.

Why would you mention President Obama, nearing the end of the first year of his presidency, in the context of a problem that is decades old?  You must want us to believe it is his fault.  Never mind that his policies and those of his predecessor, St. George of Crawford are, on balance, pretty darned similar.  Oh, yes, there is a difference, and we'll get to it.

Mellow Yellow Monday

The mesh lights on my bushes cast enough heat to cause a waffle pattern in the snow.

Alas, neither picture captures the visual effect of seeing it in real life.

Dimples in the snow:

Small cavities of sparse light

And even less heat

Sunday Music Blogging - 1/03

Pay attention to the quite intensity from 3:30 to 5:05.

It does not get any better.

Seriously.

.

Shadow Shot Sunday - 1/03

Shadows falling on snow.

This was taken on 1/1/10 through the window of my family room.  Foreground fence is mine.  Everything else belongs to the neighbors.

The sun, bringing light

But no warmth, casts images

Of bare trees on snow