Thursday, April 17. 2008
 Habu needs to explain flag handling to this young lady
Sustenance from Maureen Dowd? Bruce? Bloomberg explains why NYC cannot hyper-tax the hedgies Progressives hate the poor. Climate Skeptic I never thought this book was literature. 65 years of LSD The search for the Phantom Subtext Photo: The popularity of the Bardot vs. Moslem story on the internet may be, in part, due to the opportunity to post a photo. Interesting story, too, though. Where's that link? Aw, never mind. Oh, here it is.
 Listening to the Pope. Several pieces at Anchoress
Not nautical: world's largest cruise ship The topic which always bugs me: "root causes" More execution of witches due to global warming DO NOT take vitamins! Sickest story I've seen today. At Yale, of course. Iran torches 7 ancient synagogues A cure for the airline industry. WSJ Corn prices and starvation. Austin Bay A nation of givers. h/t, AVI Like Adlai Stevenson, stylistically? Robo-soldier Photo of a Maggie's Farm staffer (via Theo)
It all started with Enron. The company was just too clever and set aside moral scruples in a feverish drive to maximize reported (as opposed to real economic) earnings.
The next step was auditors, who traditionally were employed by companies’ boards to check the math in the financial statements and ensure that balance sheets balanced.
Occasionally, under suspicious circumstances, they were instructed to conduct what were termed “fraud audits”, where they really took a close look at things like cash, receipts and bank accounts to see if someone was cheating or embezzling.
When Enron’s frauds came out, there was a frantic drive to find someone with significant economic resources - other than Enron’s crooked officers - who could be blamed. Enron’s auditors, Arthur Anderson, long reputed to be the toughest firm in the country, took the hit for not identifying the frauds they were not paid to investigate. Lawyers and frantically grandstanding officials declared Anderson to be guilty, and applied a pre-trial death penalty for the entire firm for the conduct of the partner on the Enron account. Not only was this in gross violation of the U.S. Constitutional requirement of a fair trial, it was enforcement of a notion of collective guilt previously unseen in Western democracies, and it put thousands of Anderson’s innocent employees out of work. As the gentle reader might recall, Anderson received a post-mortem judgment of “not guilty”.
Well, the accounting profession was not pleased, and began to look for a way to strike back.Next, the Securities and Exchange Commission got involved. The SEC had been established to ensure that securities offering documents and corporate reports to shareholders contained full disclosure. Accused by the press and Congress of lax enforcement, the SEC sought to find a way to co-opt the private sector as enforcers of Federal securities laws, and found lawyers and accountants an easy choice, declaring them responsible for finding and reporting any corporate hanky-panky that might be occurring, making corporate advisors into government snitches, and vastly increasing their risk of doing business.
Again, the accounting profession was not pleased, and its counter-attack came when accounting standards boards around the world invented (over corporate objections) a new system they thought was more theoretically pure, called “fair value accounting” with particular aim taken at the recent innovations in financial derivatives. These rules require assets to be valued at whatever someone will pay for them at any given moment.
As an example of the impact of Fair Value rules, if the Kondratiev family were a public company and - like a lot of people - not able to sell our house right now, we would have to write its value way down and take an “accounting loss” for that entire amount, making us technically bankrupt even though we know the house will indeed sell this year or next. Fortunately as a family, we don’t have to follow those moronic rules, and can wait and live in our home until the housing market recovers.
What’s worse, if a public company owns some sophisticated assets like esoteric options that don’t trade often, the rules require that they value them in accordance with a black-box mathematical model – and isn’t that the greatest opportunity for fraud yet invented? Then, if it later happens that there are few buyers of those options, accountants will require around 55% write-off in their value, even if the underlying assets have not diminished in value. Remember when some banks were required to write down assets fully secured by US Treasuries?
Nevertheless, our ivory-tower CPAs hold that regardless of a notion of long-term real value, if you cannot sell something today it has little – or no – value. Just look at the ultimate market proof that that notion is intrinsically false – private equity funds are snapping up these securities by the armload as soon as the banks write them down, and Kondratiev confidently predicts that some Great Fortunes will be made by those funds over the next three years. Business Week will predictably have a cover feature on the brilliant investors who gambled on purchasing deeply-discounted, scorned securities and against all odds won big. Ja. Remember where you read it.
To make a long story short, between SEC rules and new accounting standards, company financial statements are now unreadable by almost everybody except a tiny group of trained professionals, and companies are now having to add annexes to their financial statements that say things like "our audited statements are presented in accordance with Generally Accepted Accounting Principles, but as such they are not useful in managing our business, so the following figures are the (unaudited) numbers we actually use to manage our business.”
Furthermore, and more importantly, the accounting deck has now been so stacked that every possible financial negative is emphasized and every possible financial positive is deferred. The result for us analysts and investors is that current financial statements are for most part presented in a way that grossly understate the real worth of companies.
“But,” you may well ask, “how did Bear Stearns so overvalue its assets?” Answer: it didn’t. Bear Stearns owned pools of residential mortgages, yours and mine, that might have a default rate of 5% in hard times, 15% in a depression, and was forced to write them down to nothing simply because, like our house, nobody was buying that day. As we wrote earlier this week, Bloomberg and everybody else (except the accounting rulers) knows that the foreclosure rate is expected to be 1.99%, which means that JPMorgan as purchaser of Bear will probably collect over 99% of the face amount of these mortgages, even if the foreclosed properties sell for half the loan balance. Only an accountant could insist that those mortgage pools had an accounting value of 40-45%.
Thousands of innocent people will be thrown out of work due to an intellectual ivory-tower artificiality perpetrated by the Financial Accounting Standards Board and the SEC.
The accountants’ revenge is complete.
Wednesday, April 16. 2008
McCain constantly makes himself available: he is the opposite of a managed candidate. Good on him. Interesting interview (transcript).
 The use and abuse of tax havens.
I thought this was satire, but it isn't. Hurricane Alert! It's not global warming Markets in kidneys. Make sense? Wouldn't you agree that I have led a sensational life? Ed Koch Decision-making is surprisingly unconscious McCain-omics needs a theme VA school bans tag. Too aggressive? Good grief. Minimal consequences for violent crime in the UK. Dalrymple Don't rescue me. Sipp
Tuesday, April 15. 2008
Our pub-crawling friend Kondratiev, seeking a high-paying job at Maggie's Farm, offers this submission: As Mark Twain said with attribution to Benjamin Disraeli, “There are three kinds of lies: lies, damned lies, and statistics.” Let’s look at U.S. foreclosure filings, which increased by 0.067 percentage points in March from a year earlier as adjustable mortgages increased and more owners gave up their homes to lenders. More than 0.186% of the 125,892,000 U.S. households (234,000 properties) were in some stage of foreclosure. Properties in foreclosure in March 2007 were 0.118% of U.S. households (149,045 properties). About 1.99% of US homes (or 2.5 million foreclosed properties) may be on the market this year and in 2009. This doesn’t sound too scary, moving from twelve hundredths of one percent to nineteen hundredths of one percent, with a maximum two-year potential of less than two percent of US homes. However, a liberal press agenda is to maximize the fear factor in the months preceding the election, so let’s see how the press maximizes the potential fear factor editor’s comments in [brackets]: U.S. Foreclosures Jump 57% as Homeowners Walk Away (Update2) By Dan Levy April 15 (Bloomberg) -- U.S. foreclosure filings jumped 57 percent and bank repossessions more than doubled in March from a year earlier as adjustable mortgages increased and more owners gave up their homes to lenders. [that’s the ratio between 0.118% and 0.186%] More than 234,000 properties were in some stage of foreclosure, or one in every 538 U.S. households[doesn’t one in 538 sound like a larger number than 0.186%?], Irvine, California-based RealtyTrac Inc., a seller of default data, said today in a statement. Nevada, California and Florida had the highest foreclosure rates. Filings rose 5 percent from February. “We're not near the bottom of this at all,'' said Kenneth Rosen, chairman of Rosen Real Estate Securities LLC, a hedge fund in Berkeley, California and chairman of the Fisher Center for Real Estate at the University of California at Berkeley. “The foreclosure process will accelerate throughout the year.'' Rising foreclosures will add more inventory to an already glutted market, keep home prices down through at least next year and thwart efforts by Congress and President George W. Bush to help homeowners avoid default, Rosen said in an interview. ‘Drag' on Prices About 2.5 million foreclosed properties will be on the market this year and in 2009, Lehman Brothers Holdings Inc. analysts led by Michelle Meyer said in an April 10 report. U.S. home price declines will probably double to a national average of 20 percent by next year, with lower values most likely in metropolitan areas in California, Florida, Arizona and Nevada, mortgage insurer PMI Group Inc. said last week in a report.
What PMI actually said was: “Given the drop in prices already the broad S&P/Case-Shiller house price index could decline by roughly 15-25 percent [from the 2006 peak]. The narrower OFHEO index could decline by a lesser 5-10 percent, because it excludes jumbo loans and the large portion of subprime and Alt-A loans that Fannie Mae and Freddie Mac don’t participate in. “The odds of the ultimate price decline being toward the lower end of these ranges (5 percent for OFHEO and 15 percent for S&P/Case-Shiller) has increased recently because of policy changes that have taken place in the past few weeks. . . . “We still expect the housing market to stabilize sometime in the second half of this year in response to expansionary monetary and fiscal policy, while builders continue to reduce the number of single-family housing starts into 2009. If this occurs, then the inventory of unsold homes should peak later this year and fall throughout next year. As a result, the downward pressure on national house prices should begin to abate in the second half of 2008. It is likely, however, that prices will continue declining well into 2009, as inventories will still be large (even if falling).”
Note that this directly contradicts the statements by the Berserkley guy Ken Rosen, but the writer chose to ignore that. Frightening the consumer is paramount in accomplishing regime change in the United States, and if we do indeed have a recession, it will be the first to have been entirely caused by the media – the underlying economics in the country are excellent!
As the Pope arrives in NYC, Anchoress looks at The Reality of Pope Benedict at Pajamas The Left goes down, in Italy Is the Ivy League a meritocracy now? Princeton's Flim Flam Man, in the NY Sun Why women should not rule the world. Big Lizard Turning around America's worst schools. The American The price of appeasement. Chesler
Monday, April 14. 2008
 Map of the world, as seen from America. Tiger
Brit Navy: Be nice to pirates. Maybe it was Be Nice To A Pirate Day. The normally calm Right Wing Prof blows a gasket over Obama. Related: A Category ll Kinsley Gaffe. Related: Allentown, at RWNH. Good piece, Rick First photograph ever taken. Jules takes a look at Marx Lite. From Blackjack to Wall Street: Gross and Thorpe "Natural" food doesn't mean safe. McCain's heart, at Villainous. Mo Udall was a good guy. I had this idea too. Complaint filed at the Canadian Human Rights Commission against a Montreal imam Mexico cracks down on illegal imigration - into Mexico Poor starving because of our "green" fuel. Related, at Boston Globe: Can't Eat Ethanol (h/t, Viking) Is Obama Cassius Clay? asks Scott at Powerline. He certainly acts like he can take the hits.
Photo: A cigar-lover at Mr. Free Market
 For the first time this Spring, the bird song chorus this morning at dawn had the volume turned all the way up, despite below-freezing temps. It always sounds new to me.
A bitter squirrel to swallow: A Pennsylvanian at Kos claims neighbors are bitter and live on squirrels San Francisco Democrats. The NY Sun Douglas Feith explains and defends Iraq war decision. Video Rev. Wright is back at it. That's what I call bitterness. Mandatory niceness: Human rights in Canada From McCain's electoral college math, at Am Thinker: ...John McCain is in very good shape for the general election run. The Republicans have landed on the one candidate in their party ideally suited for the race this year, with broad appeal among Democrats and independents, a veteran and war hero during a time of war, a candidate with a reputation for being a straight talker (and not talking down to voters, or outright lying to them), and with real strength in larger swing states. McCain is also benefiting from the fact that the Democrats continue to snipe at each other rather than at him, and each candidate has exposed weaknesses in the other, which become ammunition for McCain in the fall campaign. McCain opens up the map to a broader Electoral College victory than George Bush achieved in 2000 and 2004, particularly against Barack Obama.
Photo: A Song Sparrow
Sunday, April 13. 2008
The reason Obama's words keep getting so much attention is because they reveal so much of what we already know about how the self-ordained elite think about regular folks.  Our blog pal Theo sent me this image re Obama as an impostor but, in fact, he is not. Obama gets in trouble whenever he says what he thinks - and either he or his wife do it all the time. They don't hide it.
Do they think we all live in Berkeley or Cambridge among the bien pensant brie-eaters? (Disclaimer: I am known to eat brie.) Hillary is too "smart" and too lacking in conscience to make these sorts of errors of honesty. I think the story is that Obama's words have some legs because they expose the old story of the Left's condescension towards, and sense of superiority in relation to, regular folks. Rush has always contended that the Left refuses to run on their real beliefs, and I think that is true. Truth is, the hard working folks of America are doing fine as long as they live within their means. They have many concerns and interests beyond their bank accounts and whatever freebies they could be entitled to. And Americans are not babies: they neither long for a government mommy nor do they take politicians' promises or pandering seriously. They are used to government taking their earnings and offering little in return. Mostly, they want the nanny government to leave them the heck alone. They are, in fact, thinking, responsible, hard-working adults. I know lots of "them," including myself. As Mark Levin always says (approx.), "If things are as terrible and hopeless in America as Hillary and Obama say they are, then how come every ambitious and freedom-seeking person in the world wants to come here to pursue their dreams?" Obama's political problem is that he is not enough of an impostor to fool the savvy American middle class.
 What's the matter with Chicago? Stanley Kurtz at NRO
It's your mother's fault. Shrink Rap Viewing the 1960s from my 60s. Prelutsky Attack of the pre-school perverts. Steyn. The little devils are everywhere! 35 dozen oysters in 8 minutes. But did he fully appreciate every one? Michael Harrington and the War on Poverty. The economics of high-end prostitution A liberal (fascist?) "Fathead". Hillary is all over Obama's elitism. A quote: If we are striving to bring people together — and I believe we should be — I don't think it helps to divide our country into one America that is enlightened and one that is not.
Pot, kettle. However, now Hillary reinvents herself as a gun-totin' churchgoer. Heck, everybody brings a gun to church, don't they? It's the bitterness, ya know? I always bring spare ammo, just in case my bitterness builds up. Learned something useful about web searches from Dr. Mercury's post: using a - sign to rule out irrelevant searches. Photo: Our Forsythia is coming into bloom. The big fat tree is a Copper Beech.
Saturday, April 12. 2008
 Obama's elitism. Pajamas. Photo: Our effete Editor Bird Dog, who is not an Obama guy and who does not care for Chardonnay with the Big Macs on which he feeds. More on the topic via Insty here, and also here:
TOM MAGUIRE: A TYPICAL SORT OF FLARE-UP: "Hmm, how typical is it for a candidate to characterize a huge swath of his target voters as bigoted, gun waving religious fanatics?" And a big roundup from James Joyner, who observes: "Class bias works both ways. Urban elites tend to view rural America, especially Southerners, as a bunch of yahoos. Rural Americans, meanwhile, think big city types are elitist snobs who don’t love America. There are similar resentments between rich and poor, educated and not, and even Ivy League -State College. In private gatherings, where people think they are among the like-minded, one hears shocking bigotry along those lines." And sometimes it's recorded and circulated on the Internet.
Everybody at Maggie's is a gun-totin' Bible-thumpin' redneck hick who needs more from the government. More Coors Lite would be a good place to start. Later, we'll be needing the Chateau Margaux to accompany our government brie. All Opie wants is Grey Goose. A lesson on denial, at Dr. Sanity. A quote: • In the short-term, psychological denial can help a person maintain their sanity--which would be threatened by awareness of a painful truth or reality
• In the short-term, denial can help a person function day to day
• In the short-term, denial can prevent a person from having to acknowledge painful thoughts, feelings or behavior and help them maintain a world view threatened by an unacceptable reality or truth
Steyn on the nightly news, at Driscoll. A quote: (it's) actually the place for people who aren’t interested in news. And it’s pathetic in a time of war, and a time of great turbulence and great change, to switch on, and there’ll be the light item about the new fat pill, or whatever. I mean, it’s formulaic, it’s tired, it’s shallow, and it’s unwatchable.
These two pieces attempt to address the "Why can't we all just get along?" attitude towards international relations: "Diplomacy is not the Dr. Phil Show." Am. Thinker "A cup of tea with a thug." Denver Post
Friday, April 11. 2008
Obama on Sunday: You go into these small towns in Pennsylvania and, like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing's replaced them...And they fell through the Clinton administration, and the Bush administration, and each successive administration has said that somehow these communities are gonna regenerate and they have not. And it's not surprising then they get bitter, they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations.
Query for Barry: Are you, perhaps, referring the the Great Unwashed? Like me? To what should I cling, if not to guns and God? To you?
And a comment: Unskilled, semi-skilled and skilled manufacturing jobs have been disappearing for far longer than 25 years. In our parts, they disappeared 50-80 years ago. Barry has a short time-frame. New England is filled with old mill towns and old empty factories with broken windows. Things change, and I thought you were in favor of change. Anyway, I know the economic facts don't matter: it's just routine pandering, because those old jobs are never coming back and people have to learn how to do things for which there is a labor market.
Good poll news for John McCain NYT writes unbiased article on Iraq Truth-telling about immigration in Swedish MSM. Gates An illustrated history of data storage (h/t, Thompson's Friday Ephemera) The disastrous 17th Amendment (h/t, Right Wing Prof) Shipping containers and the economy
Thursday, April 10. 2008
Barry Obama has a race problem: he is pissed off at whites despite his charmed life in America. The guy misses the point that almost everybody in America is post-racial these days (not in Euroland, however). White folks do not spend one second of their lives thinking about oppressing black, brown, yellow or red people, and to imply that they do is hateful, malicious, manipulative, - and wrong. Character and behavior, not skin, is what folks are interested in. I do not give a damn about skin, and I believe that very few people are hung up on skin these days, and we would be even less so except for the Left constantly pushing skin and genitalia and transgender-mixed-frozen-vegetables in our faces. Honestly, would Obama be a presidential candidate today if he were a white guy? Of course not. Hillary would have eaten him as an hors d'oevre by now. It's plain as day, but people don't say it. Heck, Congress is full of glib Leftists: consider the always-charming and articulate Barney Frank. Obama is a phee-nom because he is half-black (and he is a likeable fellow, as pols go). The Obama effect is pure reverse-racism - mixed with ageism (he's a kid) and a touch of jaunty metrosexual bias (the American MSM press is not known for its comfort with manliness). I find this video disturbing, insulting, dumb, and offensive (from piece at Gateway):
 I'll be away tomorrow, but I have these gems now:
Ship rigging, and other technologies which created wealth in antiquity. How to blog. Sipp Canada: A link to libel constitutes libel? This could render blogging dangerous up there. SDA. More on related Canadian insanity at Coyote. I wonder what Canada would do with this link to Riehl: God Bless Racist America. Your sexual intentions show on your face. Sheesh. Where's my mask? A tough cop: "Kill the bastards." Krugman denounces ethanol subsidies. So does McCain. So do I. An "all-Bolshevik conference" remembers the Columbia student riots. Groovy, dudes: how very advanced and progressive. More on how free trade has increased American prosperity. As far as I can tell, only dinosaur unions oppose it, as with the recently-tabled Colombia agreement. Affirmative Action for boys. Dems planning $40 million hit on McCain Nationalized medical care? Polls are against it
Assessment 101. How teachers (should) do it. Clinton's missteps. Politico The University of Delaware's freshman indoctrination. The knock on the door: House to house searches for guns...and twinkies? The population crisis. Steyn The real cost of public schools.
Wednesday, April 9. 2008
We have officially termed the Obama campaign "The Teeny-bopper Campaign." (All Rights Reserved) The money is not coming from the youthful masses, however. Rich guys in suits. Still, the question always does come up: Did the GOP lose the youth vote? Well, for the yout', it's all about image and fashion. Grown-ups are past that nonsense. Is John McCain a cool MTV dude? I wouldn't know, but I prefer an adult - and I don't do childish dreams anymore: I try to do reality.
Not. They are Moslem schools. Allah Akbar, Baby.
 I am meeting John McCain at a fund-raiser this week, to which our Editor Dog-in-Chief, Bird Dog, has invited me and the Mrs.
In fact, several of the Maggie's Farm crew will drive there, with money in hand, regardless of our beefs with McCain. I have my sentence ready for the guy: "I am happy to meet you, and thank you for your service." I want to say "Global warming is BS," but the Mrs. will not let me say that to him or there will be hell to pay. I disagree with him on about 30% of the issues of the day (eg immigration, McCain-Feingold, global cooling). But what the heck, I disagree with everybody about something or other, being a difficult, cantankerous, opinionated Yankee. We have warnings that the AFL-CIO might be protesting something or other, along with other lefty loonies. Good on 'em. A free country. But are they aware that the employment rate right now is higher than it was during Clinton? No, and they don't care. They have their agenda. Update: Got a photo with him. Thanked him for his service to the country. He is solid, somewhat of a tough guy, enormously likeable, and uninspiring. Those are all probably good qualities for a president.
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