AT LEAST WE ARE NOT FRANCE

as i constantly despair about the state and prospects for america, i am at least grateful that at least we are not france

sarkozy is trying to implement a small, totally correct thing, moving the retirement age for pensions from 60 to 62. the "workers" are on strike. they can strike there way to poverty. all these welfare states, including america, have unsustainable structures given the benefits committed to versus ever longer life expectancies taking account birth rates and the ratio and workers to retirees.

it just doesnt work. what needs to happen in france is for the average french person to support the government and say we need to do this

vive la difference

SUBLIME TO THE RIDICULOUS

THE SUBLIME. recently there have been stories that remind me how amazing people are capable of being. like the chilean miner resecue. here we have a wonderful country, shaken by a terrible earthquake with tremendous loss of life and property; digging out largely on its own; without the help of sean penn; confronted with a potential tragedy with 33 miners trapped deep below the surface. the country rallied, the world rallied and unlike most of these occurrences they were saved. NASA helped. a small drill bit company in berlin, pennsylvania dropped everything and made special drill bits that ultimately led the successful of 3 different drill attempts. the owner of the business said it was the most important thing he had done in his life.

then there is the story of the unemployed construction worker who jumped into his car and chased the bad guy who abducted and attacked a young girl. he chased him down at obvious risk and rescued the girl.

these are the things we are capable of as individuals and as a species.

and then you read the rest of the news. a few items that caught my attention; not all that important maybe but of interest to me

THE RIDICULOUS

joy behar and whoppie goldberg walked off the set of the View during an interview with bill o'reilly, see it on youtube, where he calmly said 3 things; that obama refused to express his opinion on the ground zero mosque after saying the constitution allows for it; bill said the same but that it was inappropriate, wow, what a fiery word; and then he said why, because Muslims killed americans on 9/11 at that location.

joy and whoppie got up and left. outraged by the truth. now upon reflection bill said he should have said muslim extremists, not just muslims; you watch it and tell me. if joy and whoppie are america, i want out

lastly, bernanke said more or less today that the fed should ease more because of high unemployment. well that sounds good at 30k feet but what on earth can they do? rates arent low enough? 3 years treasury bonds at 35 basis points or so! its not the cost of money, its the availability of money. printing dollars and spewing them into the economy? how is that going to create jobs? the fed cant create jobs! if anything it should raise rates so savers can get some return and let the market function on its own. if the government wants to create jobs it needs to create an environment where business can create jobs. that would involve creating an environment where companies know what the rules are and can count on some stability of rules, taxes etc. perhaps investment tax credits and accelerated depreciation to encourage capital investment? perhaps less class warfare on businesses?

how can we be capable of such courage and sacrifice on the one hand and such stupidity and venality on the other?

SPECIAL INTERESTS, GLASS HOUSES

president obama has been making speeches attacking the "special interests" funding this election. this is code for the us chamber of commerce and others funding political advertising and the Citizens United supreme court decision opening up corporate spending. the nastier version implies that "foreign" money is being spent. the chamber says it segregates domestic vs. foreign money. does the SEIU? a union where the I stands for international.

now i realize nerve or chutzpah is not in short supply in the democratic party, but its rather amazing for a party totally in the economic thrall of union and trial lawyer money to decry the us chamber of commerce for weighing in also

its ugly and expensive out there. the vicious ads of jerry brown vs meg whitman; carly vs barbara. the only winners are the media companies but what the hell, their stocks will go up

ps, read michael milkings wsj op ed for some clear thinking on how to get this country back to what it could and should be

HEALTHCARE AND ENERGY SOLVED

taking a cue from jonathan swift, i have come up with a solution to both our energy and healthcare problems.

my eureka moment came during a recent visit to Memphis Tennessee. i was staying at the weston and when i check in i was in line behind 2 couples who were so large that they blocked all view of the front desk.

i then went into the elevator and it had a sign on maximum number of people and maximum weight. if you divided the two, it called for an average weight of about 167 lbs. however looking around, the average looked around 250.

i then went to the gym and was the only person there, two days in a row.

so it re-emphasized that we are one fat assed nation!

so here is my idea

we will have mandatory liposuction for all overweight people
the fat will be rendered and distilled into a fuel

this will result in a healthier population and a new fuel source. more people will fit in elevators, plane fares will come down as weight will be lower and fuel costs per flight lower; plastic surgeons will make enormous money and spend it on fancy cars and restaurants and clothes.

a virtuous circle.

NET NEUTRALITY AINT SO NEUTRAL

as frank lund says, words make a difference. junk bonds bad; high yield bonds good. have you noticed that almost all legislation passed by congress has the word reform in it. financial reform, health reform, campaign finance reform. we are just a country of reformers, making things better all the time.

which brings me to net neutrality. now net neutrality sounds like it must be a good thing. the net is important and neutrality is a good thing so net neutrality must be a really good thing. Switzerland is neutral and they are good right? aside from taking deposits from despots, drug and arms dealers.

anyway down to cases. there was an excellent article in the nytimes of all places but sourced by reuters that framed it as a battle between the pipes and the swipes. the pipes are the people who build the physical infrastructure to deliver bandwidth, verizon, att, direct tv, etc. the swipes are the people that use this bandwidth to deliver digital content like apple, google, microsoft etc.

now the pipes have spent and continue to spend year in and year out tens of billions on capital expenditures. and they want a return on this capital. the swipes and all the app and content providers want to ride on all this capital investment with a somewhat parasitic business model where the costs are born by the pipes and when they either raise prices to support their investment or offer premium service for a premium price; people howl at the evil pipes.

now where else is it ok to have unlimited consumption of a scarce resource for a flat, capped fixed amount? if you use more water, you pay for it. if you use more electricity, heating oil, gasoline, etc you pay for it. so why is it a crime to charge for more bandwidth? it aint free.

this has very little to do with neutrality. it is merely a commercial fight that should get sorted out in the market place. we should aspire to something akin to universal internet connectivity at some reasonable level of bandwidth but if i want more and faster i should be able to get it and have to pay for it.

your thoughts?

THE CONCERT. A MOVIE THAT SHOULD BRING YOU TO TEARS

enough about finance, econ and political malaise. how about some culture

went to see the movie, The Concert. it should make you cry, laugh, and cry again but with tears of joy. a really remarkable film

please see it

RAISE RATES TO GROW THE ECONOMY

thats right, we should raise interest rates to grow the economy. while europe has been trying to balance budgets and i think raise rates a bit, their thinking, i think, is budgets should be balanced so why not start now and tighten monetary policy to prevent inflation from the easy money policies implemented world wide during the crisis

in the US, we have a totally manipulated yield curve. whenever there is a banking crisis, the feds supply liquidity and often manipulate the yield curve such that short term rates are very low. this initially helps with the crisis but also creates a risk free arbitrage for the banks to repair their balance sheets. they borrow from the feds at near zero and can invest in medium term government securities and make a 300bp spread with no risk and little interest rate risk due to maturity mismatch.

this is all fine for awhile. but no longer. when you can make 300bps risk free why lend to somebody who has some risk? the answer is you dont and that is one of our problems today; lack of extension of credit to small to medium size businesses, sme's and even larger companies that are still too small to access the high yield bond market.

we don't need zero per cent short term rates. if the feds let rates go up to say1.5 per cent, still very low, this ought to force the banks to lend money to people and companies, not this incestuous arbitrage with the feds. for most businesses its not about the cost of money its about the availability of money. they would happily pay 7% for short term debt to fund working capital because their gross margin can justify it.

you want banks to lend, take them off the feds teat.

now long term rates are lower than they should be also, due to among other things the government buying its own bonds and manipulating the mortgage market; but that is a whole other story