Good news and bad news

The financial world is collapsing around us, but I had a great day yesterday. For the first time in almost two months, we went for a hike in the mountains on an absolutely gorgeous day. It was the first time I'd been up in the Mt. Rainier National Park, and we picked a fabulous day to do it. The weather gods really shortchanged Seattle this summer, but they're making up for it in September. We took a short, 1.3 mile hike up Pinnacle Ridge. It was a good hike to try out my mostly-healed back on. My back was great, and I still have a bit of lung power. It felt good, and the views were awe-inspiring! That's Mt. Rainier behind me, and Mt. Adams looking the other direction from the top of the ridge.

I watched the presidential debate on Friday, and would have scored it as a narrow win on points to McCain. Obama was on the defensive a lot, and couldn't seem to grab the initiative. McCain on the other hand, didn't make any major goofs, but he seemed angry and petty; not even acknowledging Obama's presence. I thought that was something that bugged only me, but reading the post-game analysis and polls showed that I was wrong.

I hope I'm also wrong about the coming financial meltdown. I made a bet early this year that the DOW would hit 10,000 in 2008. Right now, that looks like a pretty safe bet, but it's one I'd rather lose. Paul Krugman put it best in his blog:

So what we now have is non-functional government in the face of a major crisis,
because Congress includes a quorum of crazies and nobody trusts the White House
an inch.As a friend said last night, we’ve become a banana republic with nukes.

I don't get it

I don't understand this financial crisis. From what I've been reading, I wonder if anyone does. So far, Bear Stearns was purchased before it went under; Fannie Mae, Freddie Mac, and AIG have been taken over by the government; Lehman Bros. went belly up; Washington Mutual was just purchased by JP Morgan in a forced sale; and now another $700B is needed in the markets to avoid financial meltdown. The Bear Stearns action cost the Fed $30B; Fannie Mae and Freddie Mac guaranteed about $6 trillion in mortgages; AIG is costing the Feds $85B, and WaMu had around $300B in assets (read mortgages) of dubious value. So far the feds have spent or are planning to spend a trillion dollars. To put that in perspective, the GDP of the US is around $13 trillion, and the federal budget is close to $3 trillion.

And this is all supposedly due to shaky loans in the mortgage market. There are around $12T in mortgages out there with approximately 1% in foreclosure, and another 2-3% are in arrears. So assume that 3% get foreclosed. That makes $360B in foreclosed mortgages. But wait, there is some value to the assets behind the mortgages. Assume for a moment, that even with the fall in property values, the houses are only worth 1/2 of the outstanding loan amount. That makes a shortfall of $180B, say $200B just to be on the safe side. Why is a trillion dollars needed to fix a $200B problem?

Yes, these mortgages were sliced and diced and reassembled in various financial instruments which I'm sure no one understands, but unless the markets are a total Ponzi scheme, $200B shouldn't be that big a deal in the whole scheme of things.

Are the feds propping up failing mortgages? Are they propping up the Ponzi scheme? Or is there more to it?

Like I said, I don't get it.

No Politics Post

I took WaveGuide up to Anacortes yesterday. It was a lovely day for the four hour trip, complete with calm seas and even a few porpoises along the way. I'll be leaving it up there for a month or more for a new paint job and some minor maintenance. As you know, WaveGuide has been on the market for a couple of years now, but it badly needs to be freshened up somewhat. The lovely red paint (cranberry, actually) has faded quite badly, so the initial "wow" factor when looking at the boat diminishes rapidly the closer the prospective buyer gets. I'm having it painted a dark blue; a more traditional color for this kind of boat. I hope the market meltdown doesn't scare away any potential buyers. Some prospective buyers are going to Anacortes to look at it early in October. I just hope they weren't bond traders with Lehman Brothers.

There has been enough bad news out there lately, so hopefully this will brighten your day. Here are the results of the Washington Post's Mensa Invitational which once again asked readers to take any word from the dictionary, alter it by adding, subtracting, or changing one letter, and supply a new definition. The winners:
1. Cashtration (n.): The act of buying a house, which renders the subject financially impotent for an indefinite period of time.
2. Ignoranus: A person who's both stupid and an asshole.
3. Intaxication: Euphoria at getting a tax refund, which lasts until you realize it was your money to start with.
4. Reintarnation: Coming back to life as a hillbilly.
5. Bozone (n.): The substance surrounding stupid people that stops bright ideas from penetrating. The bozone layer, unfortunately, shows little sign of breaking down in the near future.
6. Foreploy: Any misrepresentation about yourself for the purpose of getting laid.
7. Giraffiti: Vandalism spray-painted very, very high
8. Sarchasm: The gulf between the author of sarcastic wit and the person who doesn't get it.
9. Inoculatte: To take coffee intravenously when you are running late.
10. Hipatitis: Terminal coolness.
11. Osteopornosis: A degenerate disease. (This one got extra credit.)
12. Karmageddon: It's when everybody is sending off all these really bad vibes, and then the Earth explodes and it's a serious bummer.
13. Decafalon (n.): The gruelling event of getting through the day consuming only things that are good for you
14. Glibido: All talk and no action.
15. Dopeler effect: The tendency of stupid ideas to seem smarter when they come at you rapidly.
16. Arachnoleptic fit (n.): The frantic dance performed just after you've accidentally walked through a spider web.
17. Beelzebug (n.): Satan in the form of a mosquito, that gets into your bedroom at three in the morning and cannot be cast out.
18. Caterpallor (n.): The colour you turn after finding half a worm in the fruit you're eating.

And for those of you who find numbers at all interesting, check out this site. It describes Benford's Law, a little known "law" about the random distribution of numbers. I don't know if it's actually a real mathematical law or just way of describing what intuitively should be random, but really isn't. The basic premise of Benford's Law is that you can take virtually any list or table of numbers of any phenomenon ranging from utility bills in Moldava to lengths of the world's rivers, and tabulate the first digits of those numbers. You'd think that the distribution of those numbers would be random, but in fact you get far more 1's than 9's. That's just plain weird. Maybe the site I found is actually a mathematical spoof, and maybe I've been totally sucked in, but given the fact that I lead a pretty indolent lifestyle, I think I can do some research on my own. I'll report back.

It's not quite so depressing anymore

The stock market has rebounded somewhat; McCain's Palin bounce seems to be dissipating; and my back is about 90% of what it was before whatever it was knocked me out of commission for over a month.

As for the financial upheavals in the markets - I've been a non-believer in the so-called wisdom of the market for a long time. Free markets are by far the best way to produce wealth, but without rules, they sooner or later fall victim to greed. I think the markets have needed more regulation and oversight ever since the go-go years of Reagan. Now we're seeing the worst of all possible worlds with the Federal government bailing out the companies they should have been regulating in the first place. Profits are privatized and losses socialized. After bailing out or taking over Bear Stearns, Freddie Mac, Fannie Mae, and now AIG, who's next? Washington Mutual and Morgan Stanley are good candidates. And don't forget the automakers. GM has just asked for something like $30B in loan guarantees. So pretty soon, the US will have one big bank and one big car maker, both government owned, but health care will still be in private hands. Yes to socialized banking , but no to "socialized" healthcare? Go figure!

I do have some hope that the McCain/Palin ticket will implode under its own incompetence. McCain is clearly out of his league with the current financial mess (I can just hear him muttering, "Give me a war gadammit!!"), and Palin's lies are finally catching up with her. Realclearpolitics.com and Pollster.com are both showing swings towards Obama, and my even favorite site, fivethirtyeight.com is coming around. Maybe Americans aren't as unbelievably stupid as I sometimes think they are.

My back continues to improve. I've been walking and riding my bike quite a bit, and today I worked out for the first time in a month. I did my normal routine, but with about 80% of the weight I normally use. Maybe in another couple of weeks I'll be totally back to normal. I hope.

Back Update

When I did my post yesterday, I forgot to mention that my back is much better. It's still not 100%, but it's a lot better than it was. I even forget about it at times. The only thing that has changed is that, on the advive of the physical therapist, I'm sleeping with a pillow between my legs. None of the doctors I saw were able to give me the definitive diagnosis as to exactly what the problem was. The naturopath doc thought that I suffered from a spasm of the small muscles in my back and the big muscles cramped up in sympathy. His guess is probably as good as any, but who knows? My only hope is that my back continues to improve, and that "throwing my back out" doesn't become a regular thing.

As for my description of the Canadian election and the parliamentary system, one of my readers was kind enough to correct me on a couple of points. He obviously follows Canadian politics more closely than I do, and he pointed out that although most cabinet members are elected, one of Harper's cabinet ministers was not. He also stated that it was likely that Harper would win a majority. I got my information from this polling site. Depending on how you read the projections, it looks like Harper's Conservatives will increase the number of seats, but a majority government is not a sure thing. Thanks for the corrections and comments!

Miscellaneous Ramblings

I haven't done a Farley update for a while. Here he is in all his glory - all 45 pounds of him. He was less than 15 pounds when I got him, so he's more than tripled in size. He's a good dog, or will be once he gets through his rebellious teenage years (months). Sometimes I'll swear he's downright willful, knowing full well he's not supposed to do something, like chewing on a shoe, and then doing it right in front of me!

Something's wrong with this picture. I bought new printer cartridges the other day, and as usual for that sort of item, they came in that bullet-proof, industrial-strength, non-biodegradable, plastic bubble pack that require power tools to open. Inside, there were three envelopes for the environmentally conscious among us to mail off the empties for recycling. If HP really wanted to be environmentally responsible, you'd think they'd come up with better (and far less annoying) packaging. Go figure.

EEWWW! Caroline lost the toenail off the big toe of her left foot. I hope she saved it and has it bronzed in commemoration of her summit of Mt. Rainier.

And for those of you who think that only American politicians like to throw a lot of crap around, there's also an election going on in the Great White North. The latest scandal is that the Conservatives had to take down a photo-shopped picture on their website of a puffin pooping on the Liberal leader Stephane Dion (no relation to Celine).

Unlike the two party system of the US, Canadians have their choice of five parties; Conservatives, Liberals, NDP (like the British Labour party), Bloc Quebecois (these are Quebec nationalists in the federal parliament), and the Green Party. The party that wins the most seats in the House of Commons gets to form the government, but its unlikely that either of the big two parties will win an outright majority. The winner will have to get support from one or more of the smaller parties to form a government.

In a lot of ways I think that the parliamentary system makes the leaders a lot more accountable than in the American system. Canadians don't elect a Prime Minister, they elect a representative in their own riding (like a congressional district in the US). The Prime Minister is the leader of the party that wins the most seats in parliament, and the PM must win in his own riding. The PM forms his (or her) cabinet from elected members. So the PM and his cabinet members debate and vote like any other members of parliament, and they even have to answer questions every day from the Opposition. Can you imagine if George Bush and say, Donald Rumsfeld before he got fired, had to answer questions in Congress every day it was in session?

This is depressing

One of the best political polling sites that I follow regularly is fivethirtyeight.com. (538 is the number of votes in the electoral college.) They take a different approach to polling and polls of polls, distilling them down to what I think is the best snapshot of what's really happening in the electorate at any given time. They don't do any polls of their own, but they take all the national and state polls, weight them according to sampling size and technique, and then run various electoral college scenarios using that polling data. For example, if a state is polling at 50-50 or 51-49 Obama v. McCain, you could run two federal election scenarios, one with the state going Dem, and the other going GOP. With a dozen or so close swing states, the possible outcomes multiply quickly. Results are based on thousands of possible scenarios. The final result they come up with is the percentage odds of a party winning at any given time.

Now that I've confused the hell out of anyone reading this, I'll give you the reason for my depression. For the first time since I started following the site many months ago, McCain is ahead. It's hard to find any reason for optimism based on the current numbers. The state numbers don't look quite as bad as the national polls, but they are also fewer and older. It will take a while for the Palin Bounce to work its way through the individual state polls.

The Republicans are masters of divisive cultural campaigning. They are masters of changing the subject and framing the debate. They are masters of hiding the real issues, and they are masters of making people vote against their own self interests. They have no conscience when it comes to outright lies and the kind of personal slurs that would never be said to someone's face. Maybe Obama made a mistake when he turned down McCain's offer of unmediated townhall-style debates. I think Obama would have cleaned his clock and made McCain look like the doddering (but dangerous) old fool that he is. Somehow, Obama and the Democrats have to fight back, and fight back hard. I'd like to see McCain swift-boated. There is enough in his military record (crashing four planes before being shot down over Hanoi to site just one example) to show that he's not the hero he makes himself out to be. And I've never understood how 5-1/2 years as a prisoner of war qualifies anyone for anything. Using that metric, Guantanamo is the Harvard of future world leaders.

I can only hope that Americans will see the McCain campaign for what it is. It will only lead to another four years of Bush-style wars, deficits and recession. That is truly depressing.

No Politics Post

For a change from my recent posts, I'll take a break from politics. Once in a while I do things other than surfing the net and watch talking heads on TV. For example, last night I went to see Santana at the White River Amphitheater. In spite of its beautiful setting, with great views of Mt. Rainier, and its good layout for concerts, it's not one of my favorite venues. For one thing, it's about 30 miles south of here, so the drive is a bit of a pain, but the main thing is that the concessions are run by the same folks who operate the concessions at Safeco field. $8.50 beers and all that. And then to add insult to injury, they won't let you have a beer in your seat. (Rumor has it that some middle-aged Parrotheads (Jimmy Buffet fans) went wild and trashed the place some years ago in a drunken spree) In any case, I went there with some friends and had a good time, but no beer. The first two-thirds of his concert was relatively new music, but the last third was all his greatest hits. Good stuff!

On Friday night I went to see Tropic Thunder and was thoroughly entertained. It's an outrageous spoof of semi-washed-up Hollywood stars trying for a mega-hit Vietnam war movie. It's gruesome and bloody, with lots of explosions and every special effect in the book. But mixed in with the bood and guts and teenage adolescent toilet humor is some pretty good acting, especially by Robert Downey, Jr. playing a black soldier, and Tom Cruise, playing a ruthless Hollywood mogul.

And now for a back update. To review the situation, I've had a sore back since I woke up on the morning of August 9th in Edmonton. Since then, I've cancelled the my attempt on Mt. Rainier, I've been to a massage therapist, a regular doctor twice, a chiropractor a half-dozen times, a physical therapist, and last Friday, an orthopedic doctor. All to no avail. The last time I went to see my regular doctor, he told me that if I find out what the problem is to let him know. He said he might learn something. So much for my faith in the medical profession! Tomorrow I'm going to a naturopathic clinic and will likely get some acupuncture. If it works for my mom, maybe it will work for me. I can only hope.

Ya Gotta Love It

I did something today that I'd never done before. I bought the latest National Enquirer at the grocery checkout counter. Normally I like to think that I'm above that kind of trash "journalism" but I couldn't resist the headline. It read:

Sarah Palin's
Dark Secrets
-Affair that nearly ruined her career
-How she tried to cover up teen daughter's pregnancy
-Family war that exposed her lies

If these kinds of things keep coming out and turn out to be at least partially true (and surprisingly enough The National Enquirer has a pretty good track record on a story like this), she or someone else is going to have to pull the plug on her candidacy.

I think the Obama campaign should keep quiet about Palin and let her self-destruct. Trash journalism, the blogosphere, and even the MSM will be glad to help her do just that.

The affair that nearly ruined her career was allegedly with her husband's business partner. Coincidentally, that former business partner tried to have his divorce papers sealed, but to no avail. It will be interesting to see what they contain.

I'll keep you posted.

Red Meat

It was an interesting contrast to watch the crowd reactions to Obama's speech last week and Palin's speech last night. Obama's crowd was enthusiastic and almost ecstatic as they became inspired, at least momentarily, to something beyond themselves and politics as usual. Shots of the crowd showed faces radiant with enthusiam and tears of hope and joy. At risk of sounding a bit sappy, the speech brought out the best in people and the hope for making the USA a better place.

Palin's speech on the other hand, was searing, sneering, slicing, slashing, sleazy, sarcastic, snide, cynical, and more than somewhat sinister. Her speech was designed to, and succeeded in bringing out the worst in people. Shots of the crowd showed chortling faces, twisted with hatred, ready for a lynching.

I hope the next sssss's I hear out of the Republicans is the sound of the air escaping from the hateful gas-bags that they truly are.

Palin Pregnancy Update

As it turns out, Bristol is pregnant (and unmarried). So it's unlikely that she got knocked up twice in quick succession and is the mother of Trig. I think that Sarah Palin should still explain why she apparently gave a speech to the governers' convention in Dallas while in labor, flew back to Alaska, and then drove past a couple of hospitals before having Trig delivered in Wasilla. Sounds to me like poor judgement if nothing else.

My last comment in my previous post was right on. Those Palin girls do know how to breed!

Sarah Palin?

Either vice-presidential politics just got really ugly, or McCain did an astonishingly poor job of vetting Sarah Palin. Even respectable big-time political bloggers like the Daily Kos are spreading rumors that Sarah Palin isn't really the mother of Trig, the five-month-old baby with Down Syndrome, but rather the grandmother. Rumor has it that Trig is the illegitimate son of Sarah's oldest daughter Bristol, sixteen, who missed school for five months last year, claiming a bad bout of mononucleosis. The timeline of the pregnancy and birth are interesting, to say the least. The Daily Kos is a pretty much mainstream Democratic political blog, so it would surprise me if they published this stuff without some evidence to back it up. If this rumor is totally false, The Daily Kos will have more than just egg on his face, and he will lose all the credibility he's spent years building. This should be really easy for the McCain campaign to knock down, with hospital records and all, but so far, Gustav is consuming all the available news oxygen.

The Alaskan version of troopergate has some legs too. The Alaska Legislature is investigating allegations that Palin fired her Public Safety Commissioner for not firing the state trooper ex-husband of her sister, who has nine (!!??) kids. If nothing else, these women do know how to breed!