The US budget proposes that by 2020, debt service on federal debt will be ten percent of GDP. This is politically impossible. The interest will be paid by borrowing more money. Read the rest of this entry »
The bubble in government paper
February 16th, 2010Where the money went
February 15th, 2010The government has been shuffling the money around to obfuscate who stole it. It lends money, and then announces that there is no problem, the money has been paid back.
But after much fiddling, the money has mostly come to rest, in that the government is now the proud owner of about one trillion dollars of mortgage backed securities guaranteed by Fannie, Freddie, and the FHA, plus some Fannie, Freddy, and FHA debt.
The first graph in the above link is the money wizzing around in complicated circles to obfuscate who is at fault, the second graph is the bailout of private entities, other than General Motors, and the third graph is primarily the bailout of Fannie, Freddy, and the FHA.
That these Mortgage Backed Securities are “Fully guaranteed by Federal Agencies” implies that the vast majority of the crisis, the vast majority of the bailout, was dud mortgages rubber stamped Fanny, Freddie, and the FHA, that privately issued mortgage backed securities have been liquidated – that the dud mortgages underlying privately issued mortgage backed securities have been settled by foreclosure and bancruptcy, but the dud mortgages underlying Fannie, Freddy, and FHA issued mortgage backed securities are on the tax payers tab to the tune of about a trillion dollars.
Overtime, as the mortgages are resolved, the trillion dollars of mortgage backed securities will diminish with time. In proportion as they were worthless, the agency debt will correspondingly increase.
Affirmative action and the mortgage crisis
February 14th, 2010Four hundred firemen died attempting to rescue people on 9/11. Not one “firefighter” died, for women do not fight fires. It is not in their physique, nor their psychological nature to do so.
Obama and his wife are typical affirmative action blacks. Michelle’s Princeton thesis is a whine about racial prejudice and is full of spelling and grammatical errors. Obama got a degree from Columbia without even showing up. Obama can read from a teleprompter very nicely – except when he runs into a long sentence. Similarly, most blacks can sing and dance and play the guitar better than most whites. But Obama never delivers a speech ex tempore or from brief notes, unlike Palin, while Palin never pauses at inappropriate points in the middle of reading a long sentence from a teleprompter, unlike Obama.
The collateralized debt obligations underlying the present crisis were structured into tranches so that the highest rated tranches could not go bad if the payer merely missed a few payments. What caused the crisis is that on very large numbers of the underlying mortgages, no one made a single payment. When we compare the default rate in a lily white suburb or exurb, with the default rate in a suburb or exurb where the majority are members of protected minority groups, we see the default rate in the protected minority suburb is twenty to sixty times higher, telling us why so many mortgages have never received a single mortgage payment
The brilliance of Sarah Palin
February 12th, 2010First they ignore you, then they laugh at you, then they attack you, then you win.
We have been noticing a lot more attacks on Sarah Palin lately. The latest concedes she is brilliant. Read the rest of this entry »
The cause of the crisis 5
February 9th, 2010The green room has a wonderful summary of the economic crisis in the form of a children’s book. They neglect, however, to mention George Bush’s role in making the CRA even worse than it already was.
Animal spirits
February 8th, 2010Bryan Caplan argues that the recent crash was caused by animal spirits.
But I saw the 2008 crash and subsequent downturn with my own eyes, and I’m convinced that mood played a key role. The world freaked out, big time. It was the economic analog of a riot.
I was there also, and it was entirely rational for everyone to try to get to the exits before everyone else. No animal spirits involved. In 2005 November I said “Now is the time to panic”, so I got to the doors comfortably enough, though it was starting to get crowded and a rush was setting in. By 2008 – well if you had not realized it was time to get out before 2008, it was indeed the economic analog of a riot.
In 2005 November I was talking to real estate valuer, who told me that lenders were getting nervous about wildly inflated valuations. I immediately saw what would unfold. Real Estate prices were going up because people, mostly cat eating Mexicans with no money, no jobs, no prospects, and a past history of never paying their debts, were buying houses at inflated prices with no money down, and since they were not putting any money down, did not care how inflated the price was. Obviously this could not go on, and when it stopped, everything was going to go to hell. So as soon as some people thought it was going to stop, they ran, and as soon as they ran, other people started to suspect it was going to stop, and they ran also, until by 2007 it was a crazy rush to get out, and by 2008, too late.
So when I learned in 2005 November, that lenders were getting nervous, I realized that the rush to exits had begun, and immediately joined it.
Everyone knew that things were going to collapse, but wanted to stay in till the last minute because there was money to be made, so it was not animal spirits, but people trying to judge when to run to the exits.
“One bad apple”
February 5th, 2010Greenpeace is calling for the head of Pachauri, the IPCC chairman.
As Mencius Moldbug says, this will not make the patient healthy, it will make the cancer healthy.
The call is not for a replacement who can more impartially discover the truth about anthropogenic global warming, but for a replacement who can more convincingly persuade the public of the truth of anthropogenic global warming, and the terrible harm it will do.
Since commanding us for the good of the proletariat turned out to be a bummer, they will command us for the good of the trees.
The basic strategy is to find that every human act has a vital global externality, so that every human act requires global supervision and centralized permission – for example building a house or choosing a school.
Sorry, you must send your children to the school we choose for you, since if you send them to the school you want, you are wasting carbon.
Sorry, we are not giving you permission to build your house, for it is insufficiently carbon efficient.
And since carbon dioxide is a world wide externality, permissions will ultimately have to come from a world wide organization, the climate treaty organization. We will have a theocracy monitoring us for our sins against the earth, with one world wide papacy and cathedral.
In the end, there will be war, and if we lose that war we shall be slaves, and if we win that war, will need to proscribe environmentalists and diversicrats the way Nazis were proscribed after World War II. You can never compromise with those who would rule you. Appeasement and compromise only works with those whose objectives are limited. With those whose objectives are total and limitless, each concession is merely a stepping stone to the destruction of those who concede.
Both the anti warmist blogs and the pro warmist blogs agree in calling for the replacement of the head of the IPCC. Watts Up With That, Dark Politics, Hot Air, The Right Cup of Tea, The American Interest
Whenever you find yourself on the same side as evil, you should look a little more carefully. The IPCC needs to imprisoned, not fixed, and the ill gotten wealth of its members and contributors confiscated.
Official science is not going to be healed. The scientific method is no more going to be permitted in the pages of “Nature” or “Science” than Jews and Muslims are going to share the middle east peacefully. The stakes are too high, the desires of our enemies too great.
More climate shenanigans
February 1st, 2010Cheifio has found all sorts of oddities in the surface temperature data. His latest target is Madagascar
But I’m sure it’s just an accident of history, or something, that an entire country with no visible warming in the basic data and a recent cooling was dropped in 2005…. Maybe the monkeys hid the data …
The Nasa Giss anomaly chart shows Madagascar burning up, while the Madagascar climate station shows Madagascar cooling.
No twentieth century warming
January 27th, 2010The global warming blogs have done an analysis of the surface temperature readings, from which noconsensus quotes:
leading meteorological institutions in the USA and around the world have so systematically tampered with instrumental temperature data that it cannot be safely said that there has been any significant net “global warming” in the 20th century.
Temperature readings have had “value added” to their data, with the “raw” surface station histories mysteriously changing from one download to the next, and surface stations that reported cooler readings have been mysteriously dropped.
The science is scuttled
January 26th, 2010Nasa, as evidence that we are doomed unless we make sufficient sacrifice to Gaia and tithe to Gaia’s high priesthood, has long had on its web page
Mountain Glaciers and snow cover have declined on average in both hemispheres and may disappear altogether in certain regions of the planet, such as the Himalayas, by 2030
Which web page has silently changed
So was it a lie, or an error?
In other words, a lie. And if one lie, all lies.
As Patrick Archibald told us of an earlier scandal with the same lesson, the science is scuttled