The Commodore

Ah the Pirate Dogs were in a frenzy this morning. Their beloved CPS Nargle had become unwelcoming. It was the arrival of the Commodore.

Readers are aware of the Pirate Dogs, Skippy Kee, and Androme-Clee . But there is another denizen of this domicile: Commodore Cody. And this morning he took command of the Nargle :

Now Cocklatine Cody is a geriatric male Siamese cat---over 10 years old. He takes no guff from any other resident of the house including the humans. His claws are sharper than sabers and he can flash them quicker than an épée maestro. The Pirate Dogs have nothing but respect for this fellow, hence the moniker Commodore. He truly is their Master and Commander, in the spirit of
Richard Bolitho, Horatio Hornblower, and Jack Aubrey. So his appearance on board caused them consternation and confusion. As I write this much later in the evening, the pirates are huddled in the living room and the Commodore is still ensconced upon the poop deck.

Bubble-licious

So the financial bubble is bursting. The housing bubble has supposedly already burst. But these are so intertwined that there is probably more pain coming. How did we get to this point?



As I understand it, the housing bubble was inflated, at least in part, by low interest rates and easy credit terms. Remember the days, not so long ago, when a buyer was required to have 20% of the purchase price for a down-payment on a house. The principle and interest on the mortgage loan could not exceed 25% of their gross monthly income and the buyer's total monthly payments had to be less than 33% of that income. Remember when real interest rates were positive numbers? Thanks to central banks, many interest rates today are less than the rate of inflation. That makes borrowed money cheaper than the money earned by trade or work. Add new "mortgage products" like interest-only mortgages and adjustable rate mortgages to a loosening of lending standards, i.e., the ability to repay the loan, and people can obtain more house than they can afford to pay for in actual terms. Good for low income and young buyers until the rates adjust and their payments increase faster than their wages which is the scenario over the last seven or eight years.



So now the chickens have come home to roost. These ill-conceived and improperly vetted loans have gone into default, there's a glut of over-priced McMansions on the market. Real estate prices are plummeting, probably searching for a sustainable level based on real economic data about wages, output, and productivity. And the geniuses of financial engineering have packaged all these toxic loans into "financial instruments" so devious that experts like bond and credit ratings agencies, as well as the bankers and financial traders, can't assign the risk to those to whom it belongs. So taxpayers will pay for all this with a government bail-out so the system doesn't totally stop functioning. It would be much worse if the credit markets tighten for small businesses and companies that need some credit to keep the doors open.



But let's also address the real causes of these bubbles. The lack of transparency in many "financial instruments" needs to be addressed. And the entity charged with this regulation is the federal government. The public does not need to own Fannie Mae, Freddie Mac, or AIG. These companies, as well as the others still operating in the financial sector, need to perform their function under their charters in the market according to the regulations governing what is acceptable in the markets---investing, not gambling. Proper vetting of applicants for loans. Transparency in investment solicitations.



Congress should not pass the bail out without asserting its responsibility for economic oversight and without guarantees that it will indemnify the taxpayers against a further melt-down.

TWTW

This is the week that was. Just phenomenal. From the campaign gaffes to the Wall Street melt-down.
As today's New York Times says---the sound of the bubble bursting. http://www.nytimes.com/2008/09/21/weekinreview/21leonhardt.html?_r=1&ref=todayspaper&oref=slogin
I've long subscribed to the theory that when a country/economic entity begins to make money by making money, i.e., letting the financial sector become dominant over the manufacturing or other sectors of the economy, decline results. The dotcom correction, the housing bubble, the trade deficit, and now the latest financial snafus illustrate this. I wonder how many people with money in various funds, saving for their retirement, can define financial derivatives, cdo's, tranches, hedge funds, or the myriad other "financial products" they are involved with, wittingly or not. Let alone understand them. And now the government is going to spend something like $700BILLION to $1TRILLION to buy these tarnished "investment instruments". That's OUR money!!!!! If the Federal Government can raise this money for the purpose of rescuing financiers-turned-gamblers it can certainly raise this sum to fully fund the Social Security endowment and Medicare so poor working people don't have to trust their retirement savings to those same gamblers, which is what the privatization of Social Security is. I believe the money would be better spent in this way and in reimbursing small investors for their losses thanks to the financial mismanagement of their investments by these same gamblers. John McCain has voted to privatise Social Security. He still believes in this. I'm sure Sarahcuda has some canned response along the same lines.

I live in a region of the country where "NOBAMA08" bumper stickers significantly outnumber the ones that read "IF YOU ARE NOT OUTRAGED YOU ARE NOT PAYING ATTENTION." Perhaps this week will get more of these people to pay attention.

The Captain's Latest Plan

What a week!!!! Financial melt downs, bail outs, campaign peccadilloes, yuck!!! But the Pirate Dogs have a new plan for us------ Monday we were watching The Rachel Maddow Show on MSNBC. Usually the crew pays attention when dogs appear on screen but that insipid Purina One commercial with that overly compliant and obviously dim-witted Retriever-type dog makes them ignore the tv. But the story that followed the ad, that's another story. Captain Roid perked right up as Rachel related Google's plan to green itself up by moving some, if not all, of its computer centers to barges in the ocean. The reasons she cited for this action were reduced costs (hence more profit) in real estate taxes and upkeep and using water to cool the computers which should enhance the company's greening up image. But what drew the attention of the Captain was one of the possible downsides of the plan. Ms. Maddow talked about weather disasters such as hurricanes being a hazard to the barges. She also mentioned pirates as a potential hazard. The Captain then proceeded to the Nargle and came up with her plan---taking over Google!!

Imagine----you or your child searches for information on computer chips. Normally you would find a picture like this:But instead, since the Pirate dogs now control "The Google", you get their interpretation of your search parameters---Chip Turks (otherwise known as rawhide flips), of which they have a treasure chest full:

Going to the doctor, or searching a site like WebMD for information on your skeletal malfunctions normally would lead to something like this--
But our crew of buccaneers has taken over and their image is of their favorite treat: BONE-turks:
Finally, your fourth grader needs to do research for a civics paper, the topic is agriculture, and she googles wheat. When the servers were land based, she'd probably have gotten an image like this:

But after the takeover the monitor displays a portrait of Crow's Nest Weetzie!!!!!

So good luck to Google and all its users if they go ahead with their offshore plan. And happy (belated) talk-like-a-pirate day from Capt. Roid, First-mate Leny, and Crow's Nest Weetzie!!!

"ARRRGH!"

Equal Time

First, a word about comments. I moderate the comments on this blog. I try to be fair and reasonable and I hope that readers who honor this blog with comments do so in the spirit of the blog--open discussion, expanding the mind, and a little fun. So I don't allow comments from "Anonymous" to appear. I've had a couple from this moniker and they were personal attacks like you're an eastern liberal and why don't you move back there. I welcome and encourage comments on any post but please keep them in the spirit of the blog. Even if you don't agree with something that appears, present your arguments. I pledge to try to be fair and as impartial as I can be when moderating comments. And the Pirate Dogs promise too.....

About the Republican convention--I found I was glad I had a mute button. Sarah Palin was impressive in front of the microphones. But I got sort of bored by the rest of the speakers. From Mitt complaining about "liberal Washington"(!!!!?!!!?!!) to Rudy's almost-imitation of a hockey mom (pitbull, no lipstick) to the endless paeans to John McCain's bravery and maverick credentials--my father was a hero in WWII and he was not qualified to run for president. There was so much about patriotism, strength under the duress of torture, and maverick tendencies that I almost thought they weren't going to nominate McCain but had switched to Mel Gibson, who played all those roles (lead character in The Patriot, tortured in Braveheart, and the inimitable "the name is Brett" Maverick). Then I remembered he was born in Australia, so they must have been talking about McCain.

I have always respected John McCain, his service in the Navy and the Senate. I think I even wrote in his name on my ballot in 2000. But he wasn't a ship captain or exec, he was a fighter pilot. This plays well with his maverick identity but not his leadership as an officer. That experience was negligible in that he didn't have command responsibilities like Ike or JFK. His votes over the last year against the environment, against the prohibition of torture, against the new GI Bill, and for the misguided efforts in Iraq have eroded this respect and, for me, raised doubts about the very independence he so promotes. As for Sarahcuda, I hope I soon hear what she thinks rather than the same canned sound bites from the convention she has so far uttered at every whistle stop. And I don't think it's sexist to want answers to her feelings on God and government, or the internet rumor that her son only joined the army because the other option was jail on a vandalism charge. It's out there and should be addressed. After all, it's as least as relevant as Obama's having attended madrassas. "Sauce for the goose, Saavik." (Leonard "Spock" Nimoy to Kirstie "Lt Saavik" Alley in Star Trek II: The Wrath of Khan)

Labor Day Weekend

So the traditional end of summer has come. Here in Eastern NM it's pretty rainy, cloudy, and humid. More than we usually get, much less than Down East.


I watched the DNC last week and will hit the high spots such as they may be of the RNC this week if Hurricane Gustav doesn't force its postponement. Instead of Sarah Palin (who???????) all the talking heads, or I prefer Frank Rich's term "bloviators", are tracking the storm. It looks like the Big Easy is gonna get clobbered again. Hopefully the present administration is performing as well as they are talking about their preparedness. Pray for the Gulf Coast.


Speaking of prayer, "[T]hey believed in America as they believed in God-they could not really ever expect that America might collapse and God yet survive, no, they had even gone so far as to think that America was the savior of the world, food and medicine by one hand, sword in the other, highest of high faith in a nation which would bow the knee before no problem since God's own strength was in the die." Describes the current royalty under Dubya, doesn't it? But this passage is about the Republicans from Miami and the Siege of Chicago by Norman Mailer written in 1968. Plus ça change, plus c'est la même chose.



Ever note the similarity between Antonin Scalia and Julius Hoffman??? Both think it's ok for defendants to be shackled and gagged in the presence of the jury. Fair trial??? About as fair as a good dunking chair in Salem MA.



I see Rush Limbaugh's pleas for a repeat of Chicago in Denver didn't happen. A few protesters, a couple yahoos with guns investigated for a possible assassination plot. I don't think I understand why there won't be massive protests in St Paul. It's McCain who's come out for the draft. Of course, we don't need a draft. Dubya and "Dead Eye Dick" both learnt the lessons from their Vietnam draft evasion--the National Guard!!! So they send the Guard to do multiple tours in the Middle East. What the hell, they'd just dodge a draft, this way they have to serve!!! Get with the program, McCain. By the way, does John McCain really think so little of women that he believes he will pick up their votes by having a female running mate?? I am certainly no fan of Hillary but her speech Tuesday last was very good, especially when she asked her supporters if it was her or what she stood for that was important. Maybe the Rovians running the McCain "campaign" should have listened in.........

Shelfari

In the right hand column I've added a new feature---a link to Shelfari. Hopefully I'll be more consistent in updating it than the rest of the blog. I hope it's a feature readers will appreciate.