Figuring what happened using a physicist or an economist

It's time to realize that there is one very important difference in economics and physics. Faced with facts that don't match theory, physicists try to come up with alternative theories. Economists, on the other hand, try to change facts so that it matches their theory. So, today, economists on the left are arguing that defective regulation caused all the troubles. A year from now, I am sure conservative economists will come back and argue that government meddling post the Lehman crises is what has caused the recession to be as long as it is going to turn out to be. And it is not just economists. Almost all fund managers have one particular lens through which they want to view everything in the world. All stocks in the world need to fit their theory of how stocks should behave. And if they don't, it is just a short term disruption that will be corrected duly in the course of time. "In the long run, everyone is dead", as Keynes said.

What we can look forward to - stimulus plans

Examples of the kind of stimulus we can look forward to, according to the LA Times, are as follows:

Rather than rebuilding highways, a nonprofit group called Reconnecting America wants the government to focus on a "21st century national transportation system" of mass transit and walking and bike paths

The Air Transport Assn. is seeking $1 billion to upgrade airports and $3 billion to modernize avionics

Magellan Midstream Partners (MMP), owner of the longest refined-oil pipeline in the nation, wants to develop the first "dedicated ethanol pipeline" from Iowa to New York City. It's seeking a loan guarantee of $3.5 billion through the Department of Energy

The National Assn. of Railroad Passengers is pushing for $10 billion for intercity passenger rail project

The travel industry wants a "multimillion-dollar marketing and public outreach effort to educate visitors about changing security policies and promote the U.S. as a destination," according to the Travel Industry Assn. The group is seeking a start-up federal loan of $10 million

The business community is seeking a series of tax breaks that it says will foster growth and return money to the federal Treasury. It favors, among other things, a tax rebate to middle-class taxpayers, a sizable reduction in the corporate capital gains tax and a sharp reduction in the tax rate on earnings that firms in the United States get from foreign subsidiaries

The housing industry wants all buyers to receive a tax credit for a home purchase and to have the government subsidize mortgage rates through a "buy-down" program lowering borrowing costs

The National Retail Federation proposes that sales tax holidays be held during March, July and October 2009, each lasting 10 days. The cost of this program would be $20 billion

The National Automobile Dealers Assn. is seeking a tax break encouraging more people to buy cars and a "cash for clunkers" program that helps people trade in older vehicles for new, more fuel-efficient ones

"The catfish industry is on the verge of collapse," said Marty Fuller of the Catfish Farmers of America, citing high feed prices and an increase of imports. About 6,000 jobs are at stake, mostly in economically depressed areas in states such as Arkansas, Mississippi, Alabama and Louisiana. Officials are talking about seeking $50 million in aid as a stimulus.

Steering clear of the next Bernie Madoff

One of the firms which lost over a billion dollars of clients money in the Madoff ponzi scheme says it carries out “extensive” due diligence on the funds to which it allocates money, a process that can take as long as six months and cost $100,000. It also hires private investigators to run “extensive background checks” on fund managers, including searches on professional credentials, regulatory filings and bankruptcy, according to marketing documents dated September, 2008.

"Even if you tried, it might seem that Madoff would have been impossible to catch. But at least two warning signals flashed for anyone to see. First, Madoff’s accounting firm, Friehling & Horowitz in New City, New York, was a rinky-dink shop, as a simple Google search shows. The firm doesn’t have a Web page. I found it on a junky site that lists local businesses by type and address, along with the boilerplate comment, “rated as good by a New City citizen.” That’s an unlikely auditor for the $17 billion that Madoff claimed to have under management. When the fraud came to light, F&H turned out to be a tiny office which, neighbors said, wasn’t even open all the time. (The office didn’t answer its phone.) Second, Madoff held your securities (or what he claimed were your securities) in his own advisory firm. That’s not the way reliable advisers handle publicly traded investments. The custodian should always be a large, independent financial institution that reports cash flows and trading activity to you directly. When you invest new money, you should make out the check to that account."

Lawyers will gain the most

The Madoff debacle will once again prove profitable for only one group involved . . . lawyers.

Merry Christmas to all

Merry Christmas to all of you.

Video - Lights on Foothill Blvd

The other night I set up my digital camera on a tripod and took a series of images and combined them into a video.

Video - Revisiting the intersting way in which Gov. Palin uses the English language of Alaska

v

J D Souther

Last night Toni and I saw one of the best concerts. J D Souther returned to LA for two performances, Friday at McCabes Guitar in Santa Monica where we saw him 20 years ago and last night at Largo at the Coronet on La Cienega in Hollywood. For two hours, JD told stories and sang his great songs which have been hits for Eagles, Dixie Chicks, Linda Rondstandt. With Jackson Browne, Irving Azoff, Timothy B. Schmidt and many other LA music scene "weights" in small intimate audience we felt very special sitting in the 4th row. As friends of mine know, I used to hang out with JD back in the day just as his solo career and Eagles were getting started. One night, I was invited by my high school mate, Alexa Bodrero to a small dinner party at her friend Linda Rondstadt's house near the Hollywood Bowl and I walked in to see JD there (realizing that they were a couple). He invited me to rehearsals and early recording sessions for his first solo LP.

Video - Chico and Harpo Marx

I've always loved the zaniness of the Marx brothers and here's a clip of Chico playing piano and Harpo playing the harp . . . . really good stuff.

Ponzi Schemes

Now is the Madoff affair. Every-time you invest in a partnership, you are taking a leap of faith that it's a legal entity which will return your investment to you. Most of the time, funds and partnerships are honest but occasionally they aren't and you never know until it's too late. Be careful out there. click here

Building Highway 1 through Big Sur

Just inside the Monterey County line on the magnificent Big Sur coast lies a section of Highway 1 and during the 30's when it was constructed by convict labor from Alcatraz the convicts were housed in camps, one of which is Kirk Creek campground on a bluff overlooking some of the most incredible coastal views anywhere.

John Jacob Astor - who was he?

The original founder of the Astor fortune was John Jacob Astor (1763-1884). John Jacob Astor was born in Walldorf, Duchy of Baden (Germany) from a Jewish bloodline. His original financial break came by carrying out a series of shady and crooked real estate deals in the N.Y. city area.

The next breakcame when two men who are now known to have been in the Illuminati gave John Jacob Astor a special government privilege. The two men were President Jefferson and Secretary Gallatin--both Illuminati members. The United States government had placed an embargo on all U.S. ships from sailing with goods in 1807. But Astor got special permission from these two men for his ship to sail with its cargo. His ship sailed and made close to a $200,000 profit in that day’s money. Astor strangely profited greatly from the War of 1812, which crippled almost all the other American shippers. Prior to 1817, John Jacob Astor entered into the fur trade and remained the biggest player in the fur trade until he got out of it in 1834. Over the years, he had managed to build up a monopoly. How he managed to push everyone else out is a good question.

Are you a fisherman?

Want to know where the Dept of Fish Game is planting trout in California? click here

Great quote . . .

"Don Corleone is a man who insists on hearing bad news immediately."

The strange case of the Hudson Bay Company at Fort Yukon

When American surveyors got around to checking boundaries between Canada and US territories in 1869 they found that the Hudson Bay Company's post at Fort Yukon was in fact in Alaska! Kind of embarrassing so an agreement was worked out whereby the company and it's employees would simply move the store a few miles east to get them back onto Canadian soil . . . . ahem, the team of American's and Canadians did a good job of moving the post the number of miles calculated to accomplish the task but unfortunately they did it along the bank of the Porcupine River, not as the crow flies . . . the new store was setup and operating when along came a new set of surveyors who found they were still on American soil. What a mess . . . . so they moved again and left Old Rampart to begin again at Rampart House safely on Canadian soil. Learn more about the HBC click here

So you like beer eh?

I brew my own beer, yes I love homebrewed beer, nothing better and very cost efficient. For 5 gallons of amber pale ale, it cost me about $30. For a really good website all about beer, check out Here's to Beer click here

Unemployment Reality

The NY Times reports . . .

“The number of people out of the labor force — meaning that they were neither working nor looking for work and that the government did not consider them unemployed — jumped by 637,000 last month, the Labor Department said. The number of part-time workers who said they wanted full-time work — all counted as fully employed — rose by an additional 621,000.

Already, the share of men older than 20 with jobs was at its lowest point last month since 1983, and very close to the low point of the last 60 years. The share of women with jobs is lower than it was eight years ago, which never happened in previous decades.”

Noblesse Oblige

The English principle of having the moral obligation to act honorably and generously toward those around you, typically for noblemen . . . but it seems like a good idea to me for everyone to adopt the idea.

Video - Laurel and Hardy clip another one

I think these guys were so funny, here they are figuring out how to be bandits.

Baltic Dry Index

Do you know what this is? Baltic Dry Index: (contracts to ship commodities over the seas in the future) may break 700 tomorrow, down from 12.6k. This is a very good barometer of future economic activity worldwide.

Check the chart of this very telling index click here

Bob Dylan borrowed from the Carter Family library

The Carter Family Song "Wayworn Traveller" was covered by a young Bob Dylan, who wrote his own words to the melody and named it "Paths Of Victory".

The need for narratives (or stories)

Yes, in a sane world, the fundamentals would be more important than the sound bite. In a more sustainable world, this would be the case. Yet, in the world as it exists today and actually operates, this isn't so clearly or confidently answered.

Media, we know, emphasize 'the narrative'. "The Narrative", in turn, tends to demand reduction to sound bites -- and, also, tends to play out the story to its conclusion. In that sense, the 'narratives' preferred by media have a kind of 'scoop' quality to them -- the hope that those crafting the narrative have 'scooped' the future by telling us what the future will bring.

Unfortunately, narratives are not that helpful when trying to decide on what to do or how to formulate a plan. Why? Because you never know the motivation behind the narrative writer nor whether they have done the proper research to represent what really happened accurately. CBK

Word of the Year - - - - bailout

The word “bailout,” which shot to prominence amid the financial meltdown, was looked up so often at Merriam-Webster’s online dictionary that the publisher says it was an easy choice for its 2008 Word of the Year.

The velocity of money

The velocity of money (how fast a dollar moves through the economy) is slowing rather dramatically. It could fall another 10% and just get back to the average for the last 107 years. Given the growth in population, inflation, productivity, and other factors, the money supply will need to grow by 7% annually for the next several years to keep the economy at equilibrium. GDP (gross domestic product) is essentially the velocity of money times the supply of money. If the velocity slows down, the money supply needs to rise just to stay even.

Tanta's passing

The blogger Tanta, an influential voice on the mortgage collapse, died Sunday morning in Columbus, Ohio. Tanta used her extensive knowledge of the loan industry to comment, castigate and above all instruct. Her fans ranged from the Nobel laureate Paul Krugman, an Op-Ed columnist for The New York Times who cited her in his blog, to analysts at the Federal Reserve, who cited her in a paper on “Understanding the Securitization of Subprime Mortgage Credit.”

Click here

President’s Economic Recovery Advisory Board

is to be headed by former Fed Chief Paul Volcker.

The WSJ noted today that the panel is “modeled on the Foreign Intelligence Advisory Board established by then-President Dwight Eisenhower in 1956, at the height of the Cold War, when officials worried that that the existing bureaucratic structure was inadequate to help the U.S. keep pace with the Soviet threat. The financial crisis has drawn similar worries that the government isn’t properly organized to monitor and respond to modern financial markets.”

Rental Foreclosure info

If you're a renter and are wondering whether your landlord is in foreclosure you can get some help at this website Rental Foreclosure . . . click here

The art of receiving a gift

The first thing you can do to feel better when someone gives you a gift is to realize that the giver put effort into thinking of a gift for you by going through the process if finding and buying it, or perhaps in making the gift. Don’t feel guilty when you think of this! But realize that no one made the giver think of giving a gift and no one made her go out and get it. She chose to do this herself. Many people enjoy the whole gift giving process. So the whole time, up to and including the point when they gave you their gift, they’ve been doing something pleasant and enjoying themselves.

Next, remember that a gift is a way for someone to express appreciation or affection. People usually give a gift as a token of appreciation, or as a way to say they care or they love you. It feels good to tell people pleasant happy things like “I think you’re swell.” The giver is enjoying being able to share his feelings with you. Yes, just as it is sometimes hard to hear someone thank us for something we did, it can be hard to accept a gift. But while we might be feeling uncomfortable, that discomfort might be decreased if we remind ourselves that the other person is merely telling us they like and/or appreciate us.