Sub Prime Predictions

With all of these write down by banks for their "subprime" loans I thought I would make a prediction. My prediction is that over the next few quarters banks earnings will do pretty well. Think of it this way. You're a new CEO taking over for a previous CEO who has just stepped down for failing to recognize the risks of sub prime loans. The smart play if you are the new CEO is to write down as much as you can this quarter because all of the bad performance will be blamed on your predecessor. That way over the next couple of quarters you can bring in some of the excess write offs into income. Now I'm sure there are write downs that need to occur but the new CEO's definitely have motivation to be as "conservative" as possible.

Food for Thought

I found this via http://tjic.com.

"The simple fact is that non-violent means do not work against Evil. Gandhi's non-violent resistance against the British occupiers had some effect because Britain was wrong, but not Evil. The same is true of the success of non-violent civil rights resistance against de jure racism. Most people, including those in power, knew that what was being done was wrong. But Evil is an entirely different beast. Gandhi would have gone to the ovens had he attempted non-violent resistance against the Nazis. When one encounters Evil, the only solution is violence, actual or threatened. That's all Evil understands."
-- Robert Bruce Thompson

Lame Elections and Immigration

Is anyone else out there having a hard time being excited about the presidential election? I just cant seem to find any candidate who I really want to get behind. I like some of Ron Paul's economic ideas but cant stand his immigration policy. ALL candidates pretend to be pro market. "Get government out of business" they say. Well according to my memory of economics there are three main factors of production; land, LABOR, and capital. If you are really in favor of a free market you believe in the free flow of labor and that the "invisible hand" will allocate it efficiently. Guess what, if you put up restrictions on immigration you are restricting labor. Therefore if you are anti immigration you are not "pro market" or what ever other buzz word you want to use. So Mitt Ron Rudy quit saying you are what you are not. I'll let John off the hook on this one but just barely.

Stimulating

I've been reading a lot lately about this great new stimulus package the government wants to do. You know the one. Thousands of dollars to everyone to go out and blow on a new big screen thereby stimulating the economy. Doesn't anyone realize that it is in reality a loan. Government does not create wealth. This money they are giving us will have to be paid back at some point in the form of higher taxes. I have a plan how about we actually exercise some fiscal restraint and not spend our government into the poor house. At some point foreign countries will decide that we aren't a good credit risk ie "subprime" and quit lending us money. At that point we will have to face the music and probably experience some severe inflation. Just a thought.

Quotable Quotes

I found these today. I haven't checked the authorship but lets face it their pretty dang funny.

It's not an endlessly expanding list of rights – the ‘right’ to education, the ‘right’ to health care, the ‘right’ to food and housing. That's not freedom, that's dependency. Those aren't rights, those are the rations of slavery – hay and a barn for human cattle.
- Alexis de Tocqueville

An election is coming. Universal peace is declared and the foxes have a sincere interest in prolonging the lives of the poultry.
-T. S. Eliot

Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all.
- Frederic Bastiat

Communism - You have two cows. The government takes both and gives you spoiled milk.
Capitalism - You have two cows. You sell one and buy a bull.
- Anonymous