Slouching Toward The Poorhouse

Mike Shedlock reports on the WSJ article entitled "Bailed-out Banks Slip Toward Failure - Number of Shaky Lenders Rises to 98 as Bad Loans Pile Up; Smaller Institutions Hit Hardest."
Nearly 100 U.S. banks that got bailout funds from the federal government show signs they are in jeopardy of failing.

The total, based on an analysis of third-quarter financial results by The Wall Street Journal, is up from 86 in the second quarter, reflecting eroding capital levels, a pileup of bad loans and warnings from regulators. The 98 banks in shaky condition got more than $4.2 billion in infusions from the Treasury Department under the Troubled Asset Relief Program.
Shedlock expanded this brief analysis, noting that:
Most of these failures will be relatively small ones. The median TARP infusion for the 98 banks was $10 million. The grand total of the 98 banks was about $4.2 billion. In contrast the first 8 large recipients received a total of $125 billion, now repaid.

Commercial real estate loans gone sour are at the heart of many small bank failures. One consequence of these failures is the too big to fail banks keep getting bigger.
It would appear then that the financial crisis and the mortgage bubble effect has yet to play out entirely . . . and the numbers of banks with bad loans and bad capital ratios continues to increase and will soon increase the 320 or so banks that have already failed since 2008. Among the big banks Citigroup continues to struggle despite the move afoot to get out from under government loans.

Liberals, God bless them, remained convinced that the bank and investment house bailouts were the right thing and the only thing to do back in 2008. New York Magazine, in a major hit piece aimed at Libertarians offered this analysis:
Most of the libertarians I spoke with said they would have let the big banks fail in 2008. “I wouldn’t have done anything,” says [Mises Institute President Douglas] French. “The key to capitalism is you have to have failure.”

The financial crisis was not an indictment of their worldview, libertarians argue, but a vindication of it. Letting the banks fail would have been painful. But the pain would have been less than it will be now that the government is propping up the housing, banking, and automobile industries. Plus, the economy would have recovered by now. “You’ve probably never heard of the depression of 1920,” says French. “You haven’t heard of it because it came and went in one year, because the government didn’t do anything to prop up failed businesses.” (Other economists argue that the government’s response was actually consistent with the philosophy of John Maynard Keynes.) Letting banks fail would also avoid moral hazard, say libertarians, since investors wouldn’t take such risky bets the next time around.

It’s a compelling story. But like many libertarian narratives, it’s oversimplified. If the biggest banks had failed, bankers wouldn’t have been the only ones punished. Everyone would have lost his money. Investors who had no idea how their dollars were being used—the ratings agencies gave their investments AAA grades, after all—would have gone broke. Homeowners who misunderstood their risky loans would have gone into permanent debt. Sure, the bailouts let some irresponsible people off easy. But not intervening would have unfairly punished a much greater number.
Note the past tense of NY Mag's discussion that assumes that the crisis has past and that wealth has been restored to all affected parties and that the massive dispensing of funds was done efficiently and effectively by our government bureaucrats with no wasted earmarks by our politicians and no under-the-counter transactions . . . and the government created no winners and losers.

As the WSJ noted, the bank failures continue at an increasing pace and the dangerous mortgage lending practices which brought down the economy are being continued by Fannie and Freddie.  The cost to the taxpayer is $130.6 billion to date without a dollar having been repaid.  If you have not investigated the decreased resale value of your property in comparison to the mortgage the bank holds on it, you may be in for a grand awakening.  Spreading the losses of the financial decline among all taxpayers is idiotic when the politicians approving such a move have not the slightest idea how bad an idea it was.  The harsh effect of capitalism directly on the perpetrators would have resulted in a similar bank failure rate at a much smaller cost.

As for Keynsian economics, which encourages government "spending," the faulty theory had the effect of extending the Great Depression until WWII brought about a recovery.  As American philosopher George Santayana said: "Those who cannot remember the past are condemned to repeat it."

"Lightning" Bolton for President

"As I survey the situation, I think the Republican field is wide open. I don't think the party's anywhere close to a decision. And stranger things have happened. For example, inexperienced senators from Illinois have gotten presidential nominations."

“I think this administration, if its policies were pursued for an extended period of time, would take us into decline, but there’s nothing wrong with this country that a real president couldn’t cure.

“What’s needed in this next campaign is to say, with clarity, why a pro-individual-liberty, small-government perspective is what most Americans really want.” The perception now is that “we’re the party of no.” But “the party of no is the party of yes to individual freedom, and you’ve got to make that case affirmatively. I don’t think I’m gonna have trouble doing that.”

Politico reports:
Bolton’s explorations are attracting some notice on the right. He’s on the cover of the forthcoming issue of National Review, the influential conservative magazine.

Editor Rich Lowry said the magazine made Bolton its subject because of his rising profile in conservative circles.

"He looms quite large," Lowry said. "There are so few voices on foreign policy [in Republican politics]. John has that expertise, and he's on Fox, I would guess, once a day at least. He's writing what feels like, to me, an op-ed a week or more for fairly substantial outlets."

The case for Bolton is a straightforward one: He would be the national security candidate. As he sees it, there wouldn’t be any meaningful competition for that designation. Republican primary voters would cotton to his confrontational style and his ability to target what conservatives see as a major vulnerability for President Barack Obama.
National Review bills Jay Nordlinger's story on John Bolton as: "Speak Boldly and Carry a Big Stick - The Phenomenon of John Bolton." The mag hit the newsstands this past week and the article has been made available on John Bolton's Facebook page.  It is a good read.

John Bolton was a joy to behold during his stint as UN Ambassador under George Bush. There was no groveling to the third-world countries and no minced words. As we settle on a new cast of candidates for 2012, tired old politicians such as Newt Gingrich, Ron Paul, Mike Huckabee and Mitt Romney have to bail out before the primaries in order to assure a real conservative Republican candidate without baggage can be nominated. Candidates like Sarah Palin, Chris Christie, Bobby Jindahl, and John Bolton would make public candidate debates interesting and informative. As I think about it, I imagine that straight-talk would be commonplace.

The Magic of Christmas

Ladies and Gentlemen, may I present Richard Fernandez's beautiful retelling of his Christmas memories. These are warm memories of the simple life when giving reflected the love of family while honoring Christ's birth.
All the streets were dark and bare

The postal service says that this year, children are asking Santa for basics like “coats, socks and shoes — rather than toys and games” this Christmas. Maybe so. The presents have changed with time but the gift has always been the same.

If you could create a display of things people have given each other over the centuries they would include birds carved from wood, home-made cakes, letters or garlands of flowers. In and among them would be coats, carefully brushed and mended to seem new or things handed down, pieces of crockery, furniture. They would make vast and fascinating procession stretching back over the years. My grandmother always gave me a present for Christmas until the year she died. She was living with my parents by then, and without a source of income. I remember her saving coins for some purpose no one could guess until on Christmas day we found out what it was for. She gave me a chocolate bar.

It was days before I could bring myself to eat it. When I finally did, I stared for a long time afterward at the foil and paper, wondering as many of us probably have at such gifts, on how so little a thing could carry so great a weight of human love. Whether it is an Xbox or a package of cookies, from the hands that wrap the packages or make the food comes the miracle, which springs the heart of man. Humanity is not as some would argue, a blight upon the universe. On the contrary, they are the only creatures we know of in the vast cavalcade of galaxies and stars who can transform coats, socks, velveteen rabbits and candy bars into things of magic.

If I live to be a hundred
I will never know from where
Came those lovely scarlet ribbons
Scarlet ribbons for her hair

Merry Christmas From the Family

Where is PETA when you need them?

From We are Unusual and Tragic and Alive:


Thursday night in Baltimore County, MD, two men spotted a deer that had fallen through the ice on the Patapsco River.

They watched as the deer struggled, but failed to free itself. It became apparent that the deer was probably going to die  The two men, Khalil Abusakran and Jim Hart, decided to help. They commandeered a nearby raft and used its oars to break up the ice. They entered the water, floated over to the deer, and brought it safely to back to land.

Also on the scene was a police officer, who watched the entire event from the shore. When Khalil and Jim were done high-fiving and celebrating their victory, the officer approached them and wrote them each a ticket for $90. It’s illegal in the state of Maryland, you see, for anyone under the age of 17 to not wear a life vest in a boat. Both Khalil and Jim are in their 20s.

"I fucking hate deer," said the officer.

The men plan to fight the ticket in court on February 18th.
H/T: Curmudgeonly & Skeptical

If it looks like a cigarette . . .

Subtitle: King County Finds Another Smoking Bogeyman

Red County reports:
For those looking for proof that government regulation invariably tempts society to slide down a slope of decreasing liberty, you may not find a more slippery example than the most recent attempt at bureaucratic overreach in King County, Wash.

Although a statewide ban on smoking in public places was passed by the Washington State Legislature in 2005 - one of the strictest in the nation - the King County health department wants to go a step further to outlaw the use of electronic cigarettes in public. Electronic cigarettes are a device used by some smokers as a substitute for smoking tobacco and are designed to deliver a vaporized dose of flavored liquid containing nicotine to the user.

A vote by the King County Board of Health planned for Thursday would extend the regulations for smoking tobacco in public to e-cigarettes” and also ban the sale of the devices to minors.
This action is eminent despite a court ruling earlier this month that prohibits the Food & Drug Administration from banning or regulating the fake cigarettes as drugs.
The fake cigs, from which users inhale vaporized nicotine, don't emit smoke. Rather, they produce a less-smelly, combustion-free mist.

But public health officials say they're so similar to the real thing that they make tobacco enforcement difficult and often prompt smokers to think it's OK to light up in public. And that leads to second-hand smoke, health officials reason.

"The idea is that even though they're not exactly identical to cigarettes, people see folks using e-cigarettes, and they think somebody else is smoking," said Bud Nicola, a King County Board of Health member and affiliate professor with the University of Washington School of Public Health.

"It makes it very difficult for inspectors.
No, Professor Nicola, we wouldn't want to inconvenience the Code Enforcement Nazis.  This action is motivated by the desire of a bunch of elitist liberals to regulate the way people (other than themselves, of course) live their lives . . . and smoking has been raised to the level of bogeyman everywhere.  In this case, the Smoking Bogeyman becomes the symbol that provides the proper exaggeration of a perceived threat or risk of death from infinitesimal amounts of nicotine because technology has now trumped the smoking ban (which was based on the unprovable imaginary risk of second-hand smoke).

Perhaps one day, in an enlightened age, the application of logic and empiricism will permit the dissemination of honest statistics based upon the evidence already provided in extensive, controlled studies. Bogeymen and those who use them hate statistics, because it is in their nature to be irrational and to play upon fear as the way to control the sheeple.

Misguided Elitist Millionaires

Liberals get so tangled up in elitism that the predictable results are loss of reason.  Now that is a pretty high-sounding start to this post but I am flabbergasted by the uppity attitude of a group of supposedly social conscious, wealthy nutjobs who are out to make over the country into an elitist paradise with the wealthy in charge.   The evidence has been all around us with the contributions being made by George Soros and others to organizations that they set up in order to control our pissant populace.

The very latest effort, as reported by Martin Wolk of MSNBC, is an ad campaign sponsored by "Patriotic Millionaires for Fiscal Strength" who favor higher taxation of the rich.  This organization is really the "Wealth for the Common Good" bunch who for some reason cannot use their own name in the campaign to reverse the Bush-era tax cuts on incomes over an arbitrary $235,000.

Of course we have often heard that Warren Buffet, Bill Gates,Ted Turner, Facebook founder Mark Zuckerberg, and others have pledged to give away much of their fortunes for worthy causes and I have no quarrel with that kind of charity, but what possible good could come from turning over more money to economically-challenged politicians?

Philanthropy is much welcomed but encouraging expanded government through higher taxes can only lead to the collapse of our now global economic system.  Greece has sunk, Ireland is sinking, Portugal is next and the entire Eurozone complex will soon drag others down with it. So why so much effort by the Wealth for Common Good and its partners to encourage  a tax increase?  Suspiciously, many of the partners appear to be one-trick pony outfits supporting just the tax increase for the rich but all of them have one thing in common . . . they seek donations to fund their causes (or more cynically to provide income for themselves).

If it is truly the wealthy wishing only for betterment of mankind, then philanthropic efforts done outside the government should suffice.  If some misguided souls believe that politicians need more money and power, they can help simply by making a payments directly to the Bureau of the Public Debt.  Under Public Law 87-58 enacted in 1961, anyone can help the government by making a tax deductible contribution.

Here's how, according to the Bureau of the Public Debt, http://www.publicdebt.treas.gov/:

Please follow these important steps to make a contribution to reduce the debt.

1. Make check payable to the "Bureau of the Public Debt"
2. In the memo section of the check, make sure you write
"GIFT TO REDUCE THE DEBT HELD BY THE PUBLIC"
3. Mail check to -

ATTN DEPT G
BUREAU OF THE PUBLIC DEBT
P O BOX 2188
PARKERSBURG, WV 26106-2188
Please forward these instructions to all of your multi-millionaire friends.

Fuzzy Math in New Tax Bill Scoring


The Hill reports that, according to the Joint Taxation Committee and the Congressional Budget Office, the newly brokered tax bill (suddenly called an economic stimulus) will "...add $858.7 billion dollars to the deficit over the next ten years." Immediately, we know that something is amiss since the extension of the Bush-era tax rates will extend only through the 2012 election year and the payroll tax holiday is for but for one year.

"From where does the $858.7 billion in deficits originate?" you ask in a manner designed to avoid preposition stranding. Well, the JTC and the CBO folks (at the behest of the Senate's Democratic majority) decided that keeping tax rates as they are in 2010 somehow decreases future tax revenues. Time and time again it has been proven that tax rate reductions (or in this case not permitting an increase in rates) have actually stimulated the national economy and caused government revenues to increase. Conservatives like to call this "Reaganomics."

Democrats, especially Obama, keep telling us that this bill is a tax cut "for the rich" but it clearly is not since no tax rate cut is being proposed ... only the extension of current rates. But these babies are supposedly going to result in a cost of "more than $407 billion dollars over the next decade."

The next piece of the puzzle comes in the form of "a two-year patch for the alternative minimum tax" that supposedly will raise the deficit by $136 billion. Here is the dirty little secret about the alternative minimum tax; 25 million taxpayers will become subject to the tax in 2010 unless some adjustment is made to the target wage level as has been routinely done by Congress in past years:
Enacted in 1969, the Alternative Minimum Tax was originally aimed at 155 extremely wealthy taxpayers who had avoided paying federal taxes completely. It was an add-on tax designed to ensure that everyone paid some income tax every year. Since then it has evolved into the primary tax mechanism for taxing high income taxpayers.

Under the original system, taxpayers who earned more than $200,000 -- a very high income 30 years ago -- were required to calculate their taxes differently, resulting in a larger tax payment for the wealthy.

But unlike most other income tax rates, the AMT was never indexed to inflation, and since 1982 the AMT has become a parallel tax system and a critical element in funding the government. It covered more than 4 million high-income taxpayers in 2009, according to the Congressional Budget Office.
Next we find that setting the rate of the "tax the dead" estate tax at 35% with an exemption of $5 million will increase the deficit by $68 billion. First of all that seems to be a whole lot of dead people with estates over $5 million in just two years and secondly, the federal estate tax rate is zero in 2010.

Two items in the tax proposal do indeed cause the government to lose revenues, both of which were proposed by the learned marxist economist, Barack Hussein Obama. The two percentage point moratorium on FICA tax paid by employees "has an estimated cost of $111.6 billion" and the 13 month extension of unemployment benefits "adds about $56 billion to the deficit."  But not to worry because, according to Nancy Pelosi, unemployment insurance is the most effective way to stimulate job creation.

Battleship Row


I post this beautifully done salute to our embattled navy in Pearl Harbor on December 7, 1941. Walter Erickson at Verse-afire is the author.
Guts and valor are words not usually associated with inanimate objects, but ships are not inanimate objects. Ships are live, living things. Ships, as well as men, can be tough and resilient. Such were the ships of Battleship Row.

0755 SUNDAY, 7 DECEMBER 1941

A quiet, peacetime Sunday morning. Seven battleships swung gently at their moorings; Maryland, Oklahoma, Tennessee, West Virginia, Arizona, Nevada and California. Pacific Fleet flagship Pennsylvania was in drydock. When the attack came, half their crews were ashore, and most of the officers. None had steam up, for it was Sunday, and all was at peace. Except Nevada. Nevada had steam. Nevada could move. At the height of the attack, with burning and exploding ships all around her, already severely hurt by a torpedo to her port side, Nevada, under Lt. Commander Francis J. Thomas, senior officer aboard, broke out her big battle ensign and stood down the channel, heading for the open sea. Sailors on the burning ships cheered and threw their caps in the air, but Nevada’s gallant sortie was short lived. Five Japanese dive bombers laid her low, beaching her.

The battleships were ultimately raised and rebuilt, those that were salvageable. They rejoined the fleet, but the war had passed them by. It was a carrier war now, and the World War 1 era battleships were too slow, could not keep up with the fast carriers. They were relegated to fire support, and accompanied the Marines in their march across the Pacific, bombarding the beaches, their 14 and 16 inch guns trained on palm trees instead of dreadnoughts, declared unfit to do the job for which they were built. Until Surigao.

SURIGAO STRAIT, 0351 TO 0409 hours, 25 OCTOBER 1944

Vice Admiral Nishimura, with a force of battleships, cruisers and destroyers, was heading for the Leyte beaches and the soft-skinned, vulnerable transports, still loaded with troops. Standing across his path was Admiral Oldendorf, and six old fire support battleships, all but Maryland and Mississippi on Battleship Row that Sunday morning in December. The other four were California, Tennessee, West Virginia and Pennsylvania. Oldendorf put his weary old battleships in line ahead, a Battle Line, as battleships had fought for four hundred years, and waited for Nishimura. At 0351 the big guns lit the sky. Oldendorf brought his big ships across the Japanese front, crossing the T, the dream of every admiral down the centuries, doing to the Japanese what Togo had done to the Russians at Tsushima nearly forty years earlier. The Japanese fought back, but when Nishimura turned away his battleships were gone, along with most of his heavy cruisers.

Surigao was the last battleship to battleship action of WWII, and very likely the last big gun surface action battleship fight the world is likely to see, and it was fought by ships that had been sunk at Pearl Harbor and returned to life. Ships, like men, can be judged by their deeds, and some, like the ships of Battleship Row, by their sheer stubbornness, their refusal easily to die. Ships, like men, are alive, and though it took the ships of Battleship Row almost three years, they gained their revenge in the only way they knew how, with their guns.



Torn by bombs, wracked by fire
They settled slowly to the harbor floor
Breathing their last, or so some thought
But not they
Rising, they joined their kind
Who scorned them now
As the young scorn the old
The slow
They did their job
Plodding the vastness of the central sea
Island to island
A supporting cast
Gaining no praise
No, that was for the young
The swift
The carriers
Until
Until
That blessed night
When called upon to be themselves
They were
Themselves and more


Gaming Google's Rankings Ends Unpropitiously

In a very long article, the New York Times exposed a nasty business model designed to exploit the site ranking rules built into the Google search engine. The website in question is DecorMyEyes. Settle in and read the whole article . . . Google did and the website's ranking has now sunk to the bottom.