Mover Mike

Derivatives are in the air today and I suspect I will be saying a lot more. First Freddie Mac (FRE) said net income for 2004, would be down 41% because of a $4.5 Billion loss on derivatives.

Then we have AIG! First S&P, yesterday, now Moody's today cut their bond ratings from AAA to AA+ and AA1, respectively, which is likely to make all their businesses more expensive to run.

Paul Newsome, an analyst at A.G. Edwards, wrote in a note published earlier this week: AIG has about $140 billion in financial-services liabilities, commercial paper and debt on its balance sheet, Newsome estimated. Based on that, AIG's funding costs could increase by about $280 million, or 10 cents a share, he explained. The most pain may be felt in AIG's financial-services businesses, which include derivatives (emphasis added), consumer finance and aircraft leasing, Newsome added.

NY Post says

reeling insurance giant AIG admitted yesterday its balance sheet reflected shoddy accounting going back as far as 14 years (and may have to decrease equity by $1.7 Billion!).

James Cramer of The Street.com

Why does it(AIG) deserve a decent multiple? How much of its earnings power was derived from off-the-book transactions? (Derivatives?) Why is the total markdown $1.7 billion? How do we know it isn't $3 billion or $5 billion?

Some have been saying that there is a massive derivative "bomb" in the market, just waiting to go off. In addition, AIG has been a key player in the massive gold manipulation that has been going on for at least the last seven years. Not to be outdone, the SEC has subpoenaed PricewaterhouseCoopers, the auditor of American International Group Inc.; and the US Justice Dept. is involved.

And then there is MBIA! According to Bloomberg

Shares of MBIA Inc., the world's biggest bond insurer, fell by the most in 2 1/2 years after New York Attorney General Eliot Spitzer and the Securities and Exchange Commission sought new information about the company's accounting practices.

Larry Kudlow are we talking inflation yet?
Goldman Sachs: Oil Could Spike to $105

"We believe oil markets may have entered the early stages of what we have referred to as a "super spike" period -- a multi-year trading band of oil prices high enough to meaningfully reduce energy consumption and recreate a spare capacity cushion only after which will lower energy prices return," Goldman's analysts wrote. The analysts said resilient demand had led them to revise their super-spike range to $50-$105 per barrel from $50-$80 previously, noting strength in oil demand and economic growth in the United States and China especially.

(Hat Tip to LibertyPost.org)

And this news regarding Troubled Companies:

Freddie Mac, issuing its delayed financial results for 2004, said Thursday its full-year profit fell 41 percent as the mortgage giant reported a $4.5 billion drop related to its hedging activities.

(Hat tip to Jayson at Polipundit.com)

Jane Fonda says her 1972 visit to a North Vietnamese anti-aircraft gun site, an incident that brought her the nickname "Hanoi Jane," was a "betrayal" of American forces and of the "country that gave me privilege."

I am still waiting for Kerry to admit to his Aid and Comfort and BTW, It was 60 days ago that John Kerry promised, on national TV, to sign form SF-180 and release his military records. He has yet to do so.

On Monday, the blog Landfair Furniture told you about Lip-Sticking. If you aren't reading it, you are missing some great marketing tips oriented to women on-line. Yvonne DiVita of Lip-Sticking surprised us by asking for an interview in Smart Couple Online You can see the result of that interview here.

Check out Yvonne's recent book to make your website female-friendly: “Dickless Marketing: Smart Marketing to Women Online”.

In the book, Yvonne urges businesses to break out of the old Dick and Jane mindset of the 20th century and enter the new millennium where Jane is the gender with the power, the money, and the inclination to shop online.

Visit SmartMarketingtowomenonline.com to learn how to get this huge group of shoppers to your Web site to buy your products and services.

Virginia Gov. Mark Warner yesterday signed into law a measure that denies illegal aliens public benefits, including access to Medicaid, welfare and local health care services.

"Illegals of any age still will be eligible for emergency aid, such as immunizations and pregnancy tests."

Some, however want local governments want to be exempt from the legislation.

"...the measure could prevent them from allowing illegals into homeless shelters or free health clinics."

Others, worry that illegals will

"avoid seeking preventive health care, which could cause the spread of disease."

There is no easy solution to this problem, that gets worse each year with the arrival of another 1,000,000 illegals!

The WSJ (by Subscrip. only) has on the opinion page an article titled Red Dusk, It's time Hollywood gave up its love affair with communism. In it Bridget Johnson tells us that Hollywood is planning more movies about Che Guevera. This is the Che in Motorcycle Diaries that I wrote about on January 4, 2005. Just a reminder of the glories of Che that Hollywood, I suspect, would like us not to remember:

"...Che Guevara, whose legacy includes both ordering and conducting executions and founding forced labor camps. "Guevara . . . quickly gain[ed] a reputation for ruthlessness; a child in his guerrilla unit who had stolen a little food was immediately shot without trial," writes Pascal Fontaine in "The Black Book." Guevara also wrote in his diary about executing peasant Eutimio Guerra, a suspected informant, with a single .32-caliber shot to the head. Guevara, in his will, praised the "extremely useful hatred that turns men into effective, violent, merciless, and cold killing machines." He tried to spread the havoc caused by the Cuban revolution in other countries from Africa to South America, rallying for "two, three, many Vietnams!" Guevara oversaw executions at La Cabana prison; some of those executed were his former comrades who wouldn't relinquish their democratic beliefs. "To send men to the firing squad, judicial proof is unnecessary," he said. He didn't assuage his barbarity by being a brilliant statesman, either, helping drive the economy to ruin as head of Cuba's central bank and minister of industries. "Though claiming to despise money," writes Fontaine, "he lived in one of the rich, private areas of Havana." Guevara told a British reporter after the Cuban Missile Crisis that the nukes would have been fired if they were under Cuban control--which would have wasted all of those future American suburban revolutionary wannabes."

rand holman's THE DAILY POLEMIC brings to mind how I was stunned at the SCOTUS decision, yesterday.

"The Supreme Court refused Monday to shield the news media from being sued for accurately reporting a politician's false charges against a rival."

Reporters will no longer be allowed to quote charges made by a public figures without risking libel charges. They must be able to prove the charges are false or true before quoting. Here's the part that confuses me:

"Otherwise, they said, for example, the press could not have reported last year on the charges lodged against Sen. John F. Kerry (D-Mass.) by the Swift Boat Veterans for Truth because Kerry's supporters said their charges were false."

Does that mean there would have been no reporting of the charges, just because Kerry's people said they were false? How will this work in practice and are we as bloggers vulnerable?

Another hugh earthquake in Indonesia of 8.5 8.7.

Carnival of the Capitalists - Part 1 is up and Mover Mike is included.

"Mover Mike has also been pondering economics and the implications of the US national debt. It's currently a massive $26,347.74 per US Citizen and is increasing at $2.32 Billion per day. In this age of the Pro:Am - where amateurs can often produce work of equal quality, if not better than their professional counterparts, I was amused to see Mike correcting the Sunday Oregonian as to the actual size of debt America faces. The professionals, in this case, seemed to have exaggerated the levels by 300%."

Steve Sailer at i.Steve.com has posted a very good article on the legal aspects of the Shiavo case that I've not seen elsewhere.

I was reading today's Sunday Oregonian and the Julie Tripp business column: Grim and greatly exaggerated. One statistic jumped out at me.

"FEAR NO. 1: Government spending and the federal deficit are out of control and will ruin the economy, throw the country into recession and bring back runaway inflation. WORST CASE: It's true that the $1.9 trillion national debt — $67,000 for every U.S. citizen — is towering."

Wrong Julie! The federal is towering but it is not $1.9 Trillion. It is

that computes to $26,347.74. per US Citizen and it is increasing at $2.32 Billion per day. Where is that money coming from? Why foreigners. We need to import that amount of money every day to keep all the dishes spinning. And about those foreigners, Julie says:

"LIKELY OUTCOME: A tough call, but if the will develops to cut the national deficit and to save more, the United States could dodge this bullet. Eventually, the lower dollar will make the price of imports too high and U.S. consumption of Asian goods will drop. Exports from the United States would cost less with a weak dollar. WHAT TO DO: Diversify into international stocks, bonds and funds. Keep your domestic bonds short. Save more of your dough. And when you do spend, buy American."

There is no "will" to lower the deficit. We would need to cut the deficit by at least $250 Billion just to keep the deficit from increasing, that's the amount of interest on our debt each year. How low does the dollar have to go to make the price of imports "too High". One of those imports is oil. $56 per barrel hasn't changed our behavior much. Imagine the political fireworks if gasoline was $5.00 per barrel! And "Buy American"! When Walmart doubles as China's retail outlet, how are we to "Buy American". Try buying American Oil. Try buying only American cars. Try buying American TV's, Computers, Furniture, Fabrics, Nike's for crying out loud. Julie, getting two financial analysts to give you pap for your readers is doing us a dis-service. When CFP's traditionally recommend 5-10% of assets in Gold, where is that advice for your readers? By the way, when I posted this, the national debt was: $7,782,633,474,857

The latest Barrons has a report about Rhodia, a french company that has been hurt since the bad economic news from General Motors.

"Thanks to General Motors' (GM) recently surprising profit warning and sharply rising U.S. bond yields, increasingly jittery investors have begun to "reprice risk" and are lightening up on those stocks and bonds that have risen mainly as a play on the unusually low and unsustainable interest-rate environment. Consequently, the willy-nilly rush into risky stocks like Rhodia has already started to unwind — the shares are down 17% from highs.

"This year analysts expect it to generate about €120 million in earnings before interest, taxes, depreciation and amortization, "a scary figure, once you know its interest costs and shareholder equity," he says. Rhodia, which has a book value of €93 million and a market value of €1 billion, will need to make €250 million in interest payments in 2005."

A takeover may be an out, but would you pay €0ne Billion for €93 Million equity and saddle yourself with €2.5 Billion in debt. Might be best to let it go into bankruptcy and restructure by buying off the debtors with equity in a new company.

Hat tip to Shawn at Mad Canuck for referral to This Is Your War. This blog is by an American soldier in Iraq, but this guy is very eloquent in his writing. I agree and I'm adding him to my Blogroll.

I wish to amplify my remarks to my friend Fraser in response to his moving post The Other Side of the Coin He recently purchased a gold coin without asking what was engraved on the reverse side. He used the other side of the coin as a metaphor for passing to the other side, as in death. Some on one side of the Teri Shiavo debate might believe that when you die it's a Peggy Lee song, "Is that all there is?" Fraser on the other hand, with others like him in the Teri Shiavo debate, believes there will be a rejoining with God and those who suffered in this life will be made whole in heaven. I don't disagree with Fraser, but my comments focused on these few lines rather than the larger issue:

Quite some time back I listen to Dr. John Lienhard’s radio show, “The Engines of Our Ingenuity”, when he was explaining about how these inscriptions on our coinage is a reflection of our culture. His five minute dialogue was very informative and the message has stayed with me over the years.

I commented:

Thanks for the kind remarks Fraser. That's not all there is! On the back is a large eagle landing in a nest. It looks like it is providing building materials for the nest that another eagle is sharing with him. I assume one eagle (flying) is male and the nest builder is female. If they are going to have babies they must be of the opposite sex, since I don't know of any birds that are practicing bio-technology. On one side of the coin is "e pluribas unum" which I believe means from many, one. Probably some anti-multiculturest thought that one up. Certainly not PC. On the right side is: "In God we Trust". Seems entirely appropriate! At the top are the words United States of America. On the bottom are these words "1 oz. Fine Gold $50 Dollars. The coins have a weight to them, unlike the coins of today and they have a great metallic click, when you drop one on the other. This a $50 Gold Coin. One ounce of Gold today is $425.90. The Gold hasn't changed in hundreds of years, but the USD has. I believe it will take $1500 to $5000 USD to buy a Gold in the future. Mover Mike

Yes, this struggle for Teri Shiavo is between those who value life and those who see it as accidental. It is a struggle between views about how to live a life, for today, tomorrow, or for a life in heaven. However, as old age approaches and our bodies begin to wear out, we begin to face the prospect of our death. I am prepared to face the known ways to die. It's the unknown side of the coin that scares me. The slipping into some un-death, kept alive because science can.

You should know that on my sidebar is a logo for Mind & Media Exclusive Reviewer. I have agreed to review books of my choosing from a list supplied by Stacy Harp at Mind & Media. They are Christian books. In return for reading and writing a review on my site, Mover Mike receive a listing on the Mind & Media site. I chose to read The Jordan Tracks by Steven W. Wise. I haven't finished the book, but let me say that it tells about a mother Christa Bates and her son Aaron, who is a Marine in Vietnam in 1968. The two share a strong Christian faith. The boy's father Ernie "could only invoke a spirit world that he knew existed, but did not trust." I could have been Aaron in 1968 and I could be a father or a grandfather of a Marine in Iraq. The book is available at Amazon.com You can read it along with me.

I am writing a follow-up to my post It's Now Clear to Me because I just read the column in the NY Post, THE SCHIAVO STAKES: WHAT THE FIGHT'S REALLY ABOUT by John Podhoretz. Podhoretz writes:

Those who have sided with her parents in seeking the reinsertion of her feeding tube have a view of life that is profoundly different from those who have sided with her husband's quest to have her die.

Those who want her to live tend to view life as a gift — a treasure beyond value that has been bestowed upon us and that we therefore have no right to squander. The giver of the gift cannot be seen by the human eye, and the essence of the gift cannot be seen either.

We usually call that essence the "soul." Our souls define us: They make us who we are in the deepest sense. And they transcend us as well: They are our connection to the divine, to all in the universe that is unseen and unknowable but is still there.

I know we are "meaning making machines", however I believe that our souls choose the parents and the kind of life it wants to experience. To end ones life artificially, by suicide for example, is against the souls wish for experience. In essence, it is against God's will. I believe one thing the soul wishes to experience is karma. If you murdered someone in one life, it would be karma to experience being murdered in another life, thus, experience the profound grief at not being able to fulfill the soul or God's plan. Think of the 1,000,000 souls that choose parents just in this country each year, only to be aborted. Imagine the grief of souls!

I subscribe to Le Metropole Cafe.

The Cafe is a place where investors from all over the world can meet to discuss the vibrant economic and financial issues of the day. The specialties of the house are the precious metals markets and commentary which appeals to contrarians.

Sometimes what I read sends me off in all sorts of directions. Today I learned that a National Association of Realtors study released March 1, 2005 says that second home purchases surged and that about one in three homes purchased in 2004 were either for investment (23%) or vacation homes (13%).

For properties purchased between mid-2003 and mid-2004, the median price of a vacation home was $190,000 compared with $148,000 for investment homes. In contrast with the last available full-year price data in 2001, vacation homes have appreciated 12.8 percent from $168,500, and investment homes have risen 25.4 percent from $118,000.(emphasis added)

That article led me to this article Put 10% of your assets in gold and pray it doesn’t work. written by Richard J. Greene of Thunder Capital Management Among the major reasons why gold should be an important part of all portfolios are:

1. Out of control government spending with budget and trade deficits;
2. Negative real interest rates;
3. Tremendous leverage coupled with misallocated capital;
4. Continual importation of deflation, killing pricing power and jobs;
5. Demand is rising while production is declining;
6. Gold has a negative beta which should offset times when stocks decline;
7. We are in a war environment which has historically been very inflationary;
8. Financial derivatives are out of control and hiding huge financial failures;
9. Energy prices are hitting all time highs as well as many other commodities;
10. The relative size of the gold market is tiny with the bulk of inflows yet to come;
11. The biggest growers and savers (Asians) are already moving into gold;
12. Huge short positions in gold and silver that may not be possible to cover; and
13. Foreign buying of US debt is waning which should exacerbate money printing.

Which led me to this article written in March of 2004: Fiat Money Systems

A brief perusal of history will show that when a nation went on a gold standard it was the beginning of a very long period of that nation thriving. When a country went to a fiat currency there was a period, as long or longer than 30 years, in which it thrived even more. However, during that period of prosperity on a fiat currency, excesses began to build. Once they have built up to extreme levels, it is a very dangerous time. When levels of debt become too excessive, an increasing amount of the rewards of production; profits, must go to servicing debt. When the servicing of debt consumes all of the profits of production, it finally consumes production itself.

1971 - President Nixon closed the gold window, ending convertibility of dollars to gold and committed the US to a Fiat Currency.

Jim Puplava at Financial Sense Online is telling us today something that Larry Kudlow needs to read:

It is becoming apparent to the financial markets that pipeline inflation is on the rise. Price pressures are starting to show up in the rate investors are seeking as protection against higher inflation. The markets are waking up to the fact that the credit markets are becoming less benign. The riesgo país (“country risk”) is rising rather than falling, which signals trouble lies ahead for the bond markets. Yields across the board are rising once again from Poland to Pakistan, from Turkey and Russia to Argentina and Brazil. Emerging market spreads are up 6 basis points to 369. That’s up from year-end when they stood at 335. Bond investors and politicians in Latin America are watching the U.S. bond markets closely and paying attention to every nuance emanating from the Fed. Rising interest rates in the U.S. means rising rates for most of Latin America. Interest rates are up in Argentina, Brazil, Uruguay, Peru, and Mexico. Junk bond yields are also rising especially after last week’s bombshell by GM.

The other day I built a table that showed the market value and total debt of the 30 Dow Industrials. Two of those companies, General Motors and Ford have a combined total debt of $472 Billion. We have gotten so used to these big numbers that I was astounded to read this afternoon that the $472 Billion is equal greater to the total debt of Canada. As Sen. Dirksen said long ago, "A billion here, a billion there, pretty soon you are talking real money."

Mover Mike

Merrill to Protect Directors From Claims in Case of Bankruptcy (Hat tip to Jim Sinclair)

Merrill acted to protect its directors against bankruptcy. Now ask yourself why a corporation would take such an action. The answer, I believe, is because the directors demand it. That invites the possibility that the Directors fear such a situation.

Merrill's plan, similar to a popular form of bond insurance called credit-default swaps.

Credit-default swaps are one of the fastest-growing parts of the $8.4 trillion credit derivatives market. The derivatives provide a payment to the holder when a company defaults on the repayment of a specific bond or loan. In addition, investors use credit-default swaps to make bets on the future of a company's creditworthiness. Using this type of derivative to fund the payment of legal claims in a bankruptcy would be a new application, said Gerald Silk, a partner at Bernstein Litowitz Berger & Grossman, a New York law firm that specializes in filing securities lawsuits on behalf of investors. ``I haven't seen anything like this sort of animal,'' Silk said.(emphasis added)

Back in February of 2003 in the New Yorker there was an article Unspeakable Conversations, by Harriet McBryde Johnson. Ms Johnson is severely crippled, confined to a wheelchair, and a lawyer. In the article she has numerous debates in person and vis e-mail with Prof. Peter Singer of Princeton, often called the most influential philosopher of our time believes that babies should be aborted if they are impaired mentally or physically.

He wants to legalize the killing of certain babies who might come to be like me if allowed to live. He also says he believes that it should be lawful under some circumstances to kill, at any age, individuals with cognitive impairments so severe that he doesn't consider them ''persons.''

I have refrained from posting about the Terri Schiavo case, frankly, because I couldn't sort out the arguments or which side had truth on their side. I came across this article (hat tip to Free Republic) and suddenly things are clear...for me. Prof Singer Singer lays it all out.

The ''illogic'' of allowing abortion but not infanticide, of allowing withdrawal of life support but not active killing. Applying the basic assumptions of preference utilitarianism, he spins out his bone-chilling argument for letting parents kill disabled babies and replace them with nondisabled babies who have a greater chance at happiness. It is all about allowing as many individuals as possible to fulfill as many of their preferences as possible.

IMO, it is just a short step from what is allowable today to "active killing".

I am moving from Blogger to PowerBlogs.com

Mover Mike

In the latest John Maudlin Outside the Box is a column Of Bonds & Zombies By Anatole Kaletsky. In it Kaleysky notes

Two weeks ago we noted that the biggest factor which was holding down the yields in US and European bond markets was the price-insensitive buying by three investors groups: Asian central banks, Western pensions and insurance funds and, most importantly, Japanese private investors.

In the column he also notes

The Nikkei and the US bond yield have been moving in tandem for most of the last decade. The correlation of daily movements in these two markets has been 90% since 1990 and 92% since 1996. Intriguingly, the correlation between the Nikkei and the US bond market has been much closer than the correlations between US and Japanese bond markets or between bonds and equities within either Japan or the US.

I took a look at the P & F chart of the Nikkei since Feb., 2001, and it appears that the nikkei has completed a large base and a move through 12,000, would signal higher prices for the Nikkei and if the correlation holds, higher treasury bond interest rates for the US. Not good news for interest-rate sensitive corporations and consumers. Below is the P & F chart courtesy of StockCharts:

One more chart: This one shows how the financial stocks are acting. They appear to be anticipating higher interest rates. (Hat tip to Richard Russell's Dow Theory Letters)

Mover Mike

Hat tip to Kirby's Reports. Mother Jones has a good recap of the arguments before the Supreme Court re Kelo v New London in Why eminent domain is nothing to fear — so long as its abuses can be curbed.

and Redevelopment has some people on uneasy street in San Diego.

They fear the city might resort to eminent domain if they refuse to sell their properties to make way for what some officials describe as the most significant redevelopment project proposed for Midway.

The proposal includes 124 condominiums in an area where civic leaders have lamented a lack of residences.

Mover Mike

This week's Carnival of the Capitalists is up!

Mover Mike

I have started a new blog, Landfair Furniture which will be devoted only to items of interest to entrepreneurs, interior designers, people interested in home improvements and home decor, marketing, retail, and interviews with top Portland, Oregon interior designers.

Mover Mike

Yesterday, I posted about Muslim parents agitating for Islam to be taught in the public schools. Today, Milt's File has found an excellent article in the Middle East Quarterly titled The Muslim Brotherhood's Conquest of Europe

First Germany, Then Europe

While the Muslim Brotherhood and their Saudi financiers have worked to cement Islamist influence over Germany's Muslim community, they have not limited their infiltration to Germany. Thanks to generous foreign funding, meticulous organization, and the naïveté of European elites, Muslim Brotherhood-linked organizations have gained prominent positions throughout Europe. In France, the extremist Union des Organisations Islamiques de France (Union of Islamic Organizations of France) has become the predominant organization in the government's Islamic Council.[69] In Italy, the extremist Unione delle Comunita' ed Organizzazioni Islamiche in Italia (Union of the Islamic Communities and Organizations in Italy) is the government's prime partner in dialogue regarding Italian Islamic issues.

Mover Mike

Bev and I went to the Portland Art Museum this afternoon to see the Diane Arbus Family Albums. Photos taken by Arbus of women, men, mothers, fathers and couples, all in black and white. It was interesting, although I wondered why so much attention was paid to Madelyn Murray who successfully rid the schools of God. Then we strolled over to Waking Dreams: The Art of the Pre-Raphaelites from the Delaware Art Museum. We next took in People of the River: Native Arts of the Oregon Territory

The artifacts from indians on the Columbia river and later artifacts from the Etruscan and Roman empires are all dated "BCE" or "CE". We asked one of the curators as we were leaving, "What's with the BCE and CE?" Didn't it used to be "BC" and "AD"? Turns out it did. Seems some groups were upset with "Before Christ" and "Anno Domino - In the year of our Lord" . Now artifacts are labeled Before the Common Era (BCE) or Common Era (CE). It's the same dividing line between BCE and CE as BC and AD. I don't know how they explain that!

Isn't it ironic. It's the athieists and others who have succeeded in ridding the schools of God, yet in Europe, Muslims are agitating the public schools to include Islam instruction in the schools so the children don't lose the Muslim heritage. Well, damn, I'm afraid my grandkids will lose their Judaic-Christian heritage!

Mover Mike

Speaking of Christian, when I was a kid, one might be asked , "Do you go to church?" or "What church do you belong to?" I was brought up Methodist and took classes to become a member of the Montavilla Methodist Church. The minister was Mr. Wilson, whose son (a true preacher's kid) and I shared classes at Vestal Grade School. Later, my parents and I attended the Unity Church, kind of a stripped down church, concentrating more on the teachings of Jesus and less on the rituals. I remember a girl I was seeing who was Baptist. She was afraid I was attending the Unitarian Church and before I could date her, further, her parents wanted to make sure I believed in The Trinity. I swear I had to be coached to know what The Trinity was.

I remember one time I saw some kind of religious movie at the Hollywood theater. At the end of the movie every one in the audience was invited to come down front to "accept Jesus Christ as my Personal Savior". I know I sat there for some time debating whether I should get up out of my seat, in front of everyone sitting, and go down front. In the end I did and wondered if my life would change somehow. I looked for signs for some time. I don't recall that it was a life changing experience for me.

The other day I was asked, was I a Christian? This to me is almost like a slap to the head with a wet washrag, it's so personal. "Of Course!", I answered. Somehow, I wonder, if life changed. When did we drop the awareness of religion and a church and simplify to just Christian, I suspect it may have had something with Dr Robert Shuler and his Crystal Cathedral. It apparently is non-denominational, just teaches the power of Christ.

I also wonder if the question, "Are you a Christian?" is code for "Are you "born again"? I had an uncle I liked a lot die, last year who was very active in his church, The Church of the Nazarene. I guess that this church is similar to being an orthodox Jew, pretty conservative. My uncle would have a conversation with anyone and everyone. He never failed to ask during the conversation, "have you accepted the Lord Jesus Christ as you personal savior?"

Where's that wet washrag?

I have been blessed with a wife who loves me, children who love me and blessed with two grand kids. My parents are both alive, as are Bev's. I don't anticipate we'll be eating cat food in our retirement years. I try to discover God's will for me. All I know, is that my higher power has been with me, giving me strength through the hard times and filling me with love and graditude in the good times.

Mover Mike

I wondered after posting about the debt of Gen. Motors, how the debt looked of the other Dow Jones Industrials. If the amount of debt in relationship to market value is a signal of survivability, then besides Gen. Motors there are a few others whose debt is out of line. I have indicated those companies in red.

Dow Jones Industrial Average Plus Three
Company Symbol	Mkt Value	Total Debt	Company
MMM	66.6 Billion	2.82 Billion
AA	27.6	6.30
MO	133.9	22.98
AXP	65.4	47.24
AIG	155.7	91.70
BA	47.6	12.20
CAT	32.9	23.53
C	244.4	448.43	Citigroup
KO	53.2	7.18
DD	99.9	6.48
XOM	400.0 Billion	8.29 Billion
GE	380.3	370.91	Gen. Elec
GM	16.9	300.00	Gen. Motors
HPQ	58.2	7.21
HD	85.4	2.15
HON	32.7	5.27
INTC	145.8	.90
IBM	145.8	.77
JPM	128.0	303.21	JP Morgan Chase
JNJ	200.0	2.85
MCD	40.6	9.22 Billion
MRK	70 8	6.87
MSFT	264.5	0.00
PFE	192.7	18.55
PG	134.7	23.25
SBC	77.1	26.97
UTX	53.1	5.59
VZ	97.4	39.27
WMT	217.9	31.45
DIS	57.5	13.71
FNM	53.2	939.67	FannieMae
F	20.9	172.97	Ford
DCX	45.6	99.52	Daimler Chrysler

Mover Mike

On March 16, I wrote about General Motors' big fall. I read that the company owed $100 billion. I have since learned that the figure is almost $300 billion. But the story is worse than that! From The Death of the Dollar

GM has $300 billion in debt ...and has a market cap, now, of $16 billion. See the problem there? The bondholders could buy the company nearly 20 times over if they used their money to buy stock instead of loan it to the company. The implication is clear--that GM is headed towards bankruptcy, and will default on the bondholders, who will then own a company worth less than $16 billion dollars!

For every one point that interest rates rise, refinancing GM's debt will cost an additional $3 billion in annual interest payments — money that they clearly do not have! Where is GM going to get another $3 to $6 to $9 billion as interest rates rise by 1%, 2%, and 3% more? Selling cars? Nope. Selling stock? Unlikely in this market! Borrowing more? From whom?

...snip...

So, therefore, GM will soon be a $300 billion dollar blow-up!

How big is that? It's bigger than Enron, Global Crossing, LTCM, K-Mart, and the IRAQ war all put together!

In addition to long term debt there is a significant longer-term challenge posed by the company's large retiree base and the resulting high level of health care costs.

At year end 2003 GM's unfunded OPEB liability was $57 billion (exculding the $4 billion Medicare subsidy), and annual health care costs approximated $5 billion. Moody's believes that this burden will represent an increasingly material competitive disadvantage for GM as health care costs continue to rise.

From The Pension Catastrophe by Gary North

The problem facing every company with a defined benefit program is that current pension obligations must be factored into retail prices. Consider the auto industry.

... The results of a Prudential Financial study state that pension and retiree benefits represent $631 of the cost of every Chrysler vehicle, $734 of the cost of every Ford vehicle, and $1,360 of the cost of every GM car or truck. In contrast, an article in the Detroit Free Press reported that pension and retiree benefit costs per vehicle at the U.S. plants of Honda and Toyota are estimated to be $107 and $180, respectively."

...snip...

But costs do not determine prices. Supply and demand determines prices. If a new supplier comes along who is not burdened by past pension fund obligations, this supplier can undersell the firm that made such promises. For American and European firms, the four-letter word that confronts them is "Asia."

But as philosopher Ayn Rand observed, "there is no such entity as 'the public,' since the public is merely a number of individuals . . . .the idea that 'the public interest' supersedes private interests and rights can have but one meaning: that the interests and rights of some individuals take precedence over the interests and rights of others."

In Freeport, Texas, a Brazoria County coastal town has big plans to develop a marina to bring in money to the city... some residents say all that money will go to the developer and not the community, says News2Houston Investigators.

None of "who gets the money" matters. What matters is a local government wants to force two businesses to sell their land to build a private yacht marina, backed with a $6 Million loan from the local government. For 50 years, loads of Texas gulf shrimp have been bagged and stacked at Western Seafood in Freeport. Wright Gore, of Western Seafood, was asked to sell by the developer and refused. So the developer went to the local government and asked them to use their power of eminent domain to force the sale. The city felt that the public interest was served by "best use" of the property. Both Western Seafood and Trico Seafood have filed a federal lawsuit against the city of Freeport and the Freeport Economic Development Corp. to stop the land acquisition.

Do you have other examples of Eminent Domain gone amok? (hat tip to T F Stern's Rantings

Mover Mike

Eminent Domain

I have had some emails about my Gold rants that say in essence, "OK, you have scared me, now what do I do?" I will tell you what I do. I buy a little insurance as often as I can. I walk in with cash to Affordable Jewelry & Precious Metals Inc. in Portland, Oregon and buy American Eagle gold coins. I don't care if you use this company. I don't make a thing if you do. You can buy a 1 oz coin, 1/2 oz coin, 1/4 oz coin or a 1/10 gold coin. Todays closing price was $447.00 at $460.00. The closing cash price of Gold was $438.80. If you bought a gold coin this afternoon you would have paid $460. The difference between $438.8 and $460 ($21.20 or 4.61%) is the commission to the coin dealer.

If you owned a Gold coin and you sold it this afternoon you would sell it for $447. If I recall correctly, when I started buying, the sell price or bid was equal to the price of Gold. It appears to have changed. Now, you may find that some dealers charge less than 4.61%, I don't know. AJ & PT was convenient for me and their web site has quotes that are updated throughout the day.

Owning Gold Coins is not for speculation, this is insurance! I would guess that most financial planners would recommend 5% of ones investible assets to be in Gold. I believe gold will sell between $1500 to $5000 per ounce. I believe the DJIA and Gold will trade at the same level. I don't know when and I don't know what the US will look like. I expect prices of everything to be up 3 to 10 times in dollars. The ATM's may be shut down and the only money you have is your gold. This is insurance only.

I buy shares in Gold mining companies for speculation. There is huge leverage in the mining industry. The price of Gold can go up 20 fold, but not your costs. The earnings can explode and in a fever, other speculators will pay rediculous prices for the shares. Do your homework, but absolutely do NOT buy any hedger like American Barrick. IMO, they will be bankrupt when the derivatives that they have sold against their reserves are called. With both the coins and shares, put them away in the famous "lockbox" (I didn't say safety deposit box!) and forget about them until the fever rises. There is no fever like Gold fever!

The Asian and Indian people fully understand how Gold is used for protection. You would think we would, also. We were warned by our Founding Fathers to protect our currency with metal backing. We have experienced our currencies being worthless; the Continental and the Confederate currency. Yet, owning gold seems such a foreign thing to do. Always glad to answer any questions.

Mover Mike

Citigroup, Morgan Stanley Named in Parmalat Probe

Prosecutors investigating the Parmalat scandal have accused four foreign banks and an Italian asset management firm of helping the dairy foods giant mislead investors, moving closer toward a possible trial. In the report, seen by Reuters, the prosecutors also accused 13 bank executives, including an employee of Credit Suisse First Boston of the Italian crime of market-rigging.

Parmalat collapsed under 14 billion euros ($18.7 billion) of debt in late 2003, triggering one of the world's biggest financial scandals.

Mover Mike

If you have read my blog for any amount of time you know I have an interest in "eminent Domain" and specifically Kelo v. New London. While checking Kirby's Reports, I see that Ephraim Kirby has a report added from The Progress Report titled Eminent Domain and Government Giveaways by Wyn Achenbaum. It is a very reasonable and well written report arguing:

Our land, particularly the best-located land, is a common asset on which we are all dependent. Allowing individuals or corporations to occupy it without compensating the rest of us (the public) for its value is the underlying problem...

What Achenbaum is saying, in my words, is if through progress or fluke the land you live on becomes valuable, more valuable than its present use, say as your home, it is not only a problem, but an argument for the use of eminent domain.To such government officials, the fact that an individual earns a piece of property and wants to use and enjoy it, is of no importance--all that matters is "the public."

But as philosopher Ayn Rand observed, "there is no such entity as 'the public,' since the public is merely a number of individuals . . . .the idea that 'the public interest' supersedes private interests and rights can have but one meaning: that the interests and rights of some individuals take precedence over the interests and rights of others." In the context of the Kelo case, the idea that "the public interest" trumps private property rights simply means that the desires of some individuals for property they did not earn and cannot get from others voluntarily trump the rights of those who did earn it and do not want to sell it. Why are their rights trumped? Because some gang with political pull doesn't happen to like how these individuals are using their property.

From Capitalism Magazine

Individual rights protect man's freedom — freedom from the coercion of others — to pursue his life and happiness in the only way he can, by following reason. Initiating force against another, by its vary nature, is anti-reason and therefore anti-life. This is what our mainstream intellectuals and politicians obscure, evade and oppose when they advocate the violation of individual rights.

When a collectivist claims that individual rights must be subordinated to the "public good," his concept of "public" is divorced from individuals, and his concept of "good" is divorced from reason, freedom and justice. His claim amounts to: The needs or desires of some necessitate the enslavement and destruction of others.

If we do not keep defining, in a different way each time, the values of freedom and personal property rights, I feel we will lose them. There seems to be a constant and consistent effort to erode or chip away at these concepts.

Mover Mike

Eminent Domain

Hey Larry Kudlow:

SGL Carbon to increase prices for carbon fibers and carbon fiber products
Wiesbaden, March 17, 2005. SGL Carbon’s business unit SGL Technologies announces price increases across its carbon fiber products range with immediate effect. The double digit percentage increases vary from product to product and will affect the Company’s carbon fibers as well as fabrics, prepregs and other fiber-reinforced matrix products.

Jan Verdenhalven, Managing Director of SGL Technologies commented: "These price increases are based on raw material cost increases as well as on continually tightening demand and supply situation in the carbon fiber markets.”(emphasis added)But Larry, there is no inflation!

Mover Mike

GM predicts over a $1.50 loss per share, drops 14% today. The high in late 2000 was $94!

(This is the chart I tried to get in yesterday, but I couldn't make it work.)
I'm told that GM sales in the Northwest were down 60% the last three months. I also understand that GM, Fannie Mae, AIG, and JP Morgan have trillions of derivatives, many think this is just an accident waiting to happen.

GM is currently rated BBB- at S&P, the last investment grade rating, and Baa2 at Moody's, two notches above junk. There is speculation that GM's credit rating will be downgraded to junk following this morning's reduction in guidance.

GM has more than $100 Billion of debt outstanding. Sellers of bonds could swamp the bond market if they were forced to sell because of a downgrade. "What's good for GM, is good for the country!" So goes an old saying, for you newbies.

Mover Mike

Hey Larry Kudlow, just saw a chart that shows the Gold/CRB ratio going back to 1993. Looks like the 1.60 times the CRB is about the pivot point, mostly it trades at 1.6, some times it swings down to 1.20 sometime over 1.80. Right now the CRB is at 322; 1.6 times the CRB equals a price of gold at $515. I'm guessing that one of your alarms is going off soon!

Mover Mike

Hugh Hewitt, blogfather to so many of us, links here to this Economist article, "Dreaming of The Other Side of The Wire," and urges comment and analysis.

We all agree that we have an immigration problem. We have 1 to 3 million (estimates vary widely) immigrants, predominately from Mexico and south coming to the US. We offer a minimum hourly wage that is equal to a days pay in Mexico. We offer jobs, health care and citizenship to those born here.

No one will allow the 10 Million or so here now to be deported. That would be like setting up concentration camps in Mexico. However, the states on the border are having to pay some outrageous costs that are the nation's costs, it seems to me, not just the states. President Bush has proposed something like workers passes, where a Mexican could go back and forth easily. That seems to me, like a reasonable start. I do have several problems with the situation as it is now.

The "Boat People" came here defying terrible survival odds seeking asylum. They had to jump through all the usual hoops to be granted citizenship. They earned it by studying our values and passing a test and having some proficiency in the English language. It is not fair to these people to grant blamket amnesty to people from the south of our borders.

I object to the multicultural atmosphere of the immigrants. They set up enclaves of like minded people and non english signs on their businesses and don't attempt to fit in. I was amazed to see a woman in traditional Muslim dress, get into a SUV, and drive away while talking on the phone. When you come to the US, act like an American. Don't come here and create the same conditions here that drove you from your lands.

Ex Governor Dick Lamm listed some ways to destroy America. One of those was to

Make our fastest growing demographic group the least educated.

We will need to see that these immigrants are educated and they inculcated with our values and we will need to agree on those values.

Mover Mike

Jerry Fuhrman at From On High has revived my interest in a topic of concern to me. I live in the Northwest. I carry around with me, pictures of Salmon that fling themselves higher and higher up the fish ladders; an engineer's answer to get upstream around the dams on the Columbia.

Furhman writes that union janitors at the Detroit Airport are unhappy because they are being replaced by Non-union janitors. And in Fuhrman's opinion

If I were to try to rank airports by their cleanliness, I'd put the Detroit facility last and in a class by itself. The Miami airport sometimes comes close but doesn't really compare. How do I rate them? I go to the bathroom. When I'm in Detroit, I'd rather relieve myself behind the Northwest commuter terminal in subzero weather than sit down on any toilet in the complex. There are diseases there that are intermingling and creating uncatalogued pestilences. If a pandemic begins to spread across the land, it will originate in Concourse B at Detroit Metro. Mark my words.

I remember reading this warning on a stall wall:

It Does No Good To Stand On The Seat.
Metro Germs Can Leap Five Feet.

Now here's my question: IF metro germs can leap five feet, can they swim up stream, so to speak, as I relieve myself in the Detroit Airport or any other airport for that matter? There's that picture of the Salmon! Would it be better if I stood back 10 feet from the urinal?

Mover Mike

The Grumpy Old Bookman writes about something I've long suspected. Most people don't read the short stories that are widely touted in some of our trendy magazines, just as, I suspect, they don't read the poems. However they are praised by acedemics, those who adfminister the MFA programs. Read Part 1. The official history of the short story and tomorrow the real story.

Mover Mike

In Hanover, Germany at Cebit IBM UNVEILS MEMORY MILLIPEDE

IBM has shown off a working prototype of a ultra-high density storage technology that could cram in the equivalent of 25 DVDs in a space no larger than a postage stamp.

Wow, a camera that could hold the equivalent of 25 CD's of pictures on a postage-stamp sized memory card. Now if they could just invent a battery that would last...to take those pictures!

Mover Mike

Whitley Strieber at Whitley Strieber's Unknown Country has an update to the book "Superstorm" he co-authored with Art Bell on which the movie "The Day After Tommorow" was made.

Unfortunately, we are in a time of horrific crisis far beyond anything I imagined when Art Bell and I wrote Superstorm. It is so much worse than I expected then that I almost can't believe what I am seeing. We are well into a sudden climate change situation, but it may not be the one that we envisioned in Superstorm.

I thought of him today for two reasons. He claims Mount Kilamanjaro losing its snow cover is one more piece of evidence for global warming. Today, however Betsy's Page credits The Astute Blogger for presenting other ecidence besides global warming for the disappearance. The second reason, while reading my feeds from Bloglines, I discovered Kevin Kelly at Cool Tools has a tool for sale that helps you build Igloos. Called the Iceblox, it sells for $176. Might be just the thing we should get on the net and order.

Mover Mike

From Bloomberg, Oil at an all time high, above $56 per barrel, CRB at another high of 322!

Mover Mike

Good smackdown of the NYT by Christopher Hitchens This Was Not Looting

Mover Mike

In The American Enterprise Online is an interview with John O'Neill of the Swift Boat Vets. At a May 4th press conference calling John Kerry Unfit to be Commander-in Chief, his group was shocked that the major media did no reporting of the event.

Our analysis after the press conference was that the three major networks, the New York Times, and the Washington Post would under no circumstances carry a story like ours, no matter how well documented.

(Hat tip Free Republic and Polipundit)

Mover Mike

Asian stocks fell in U.S. trading, led by Japanese automakers, after the Nikkei English News said the country's steelmakers are seeking to boost steel prices for carmakers such as Honda Motor Co. by as much as 20 percent.

Current prices are likely to be revised in April. Steelmakers have raised prices to automakers by 5-10% over the past 2 years. Latest increases will raise prices to levels seen prior to the nearly 30% reduction that took place after NSANY began cutting costs in 1999.

But there is no Inflation!

Mover Mike

Iran signs 3 billion euro cooperation protocol with Italy.

Iran and Italy signed an economic cooperation protocol worth three billion euros here Thursday night, based on which the Italian government is urged to provide Tehran with industrial machinery upon request, in return for Iranian oil.

What, no mention of USD's! Every agreement that is signed will make it harder for the US to pressure Iran to give up nuclaer weapony.

Mover Mike

Here's Saw an interesting chart showing the relationship between the price of Gold and the price of Oil. You can see In the late '90's Gold was 25 times the price of Oil, 15 times is probably the mean for 30 years, and today it is 8 times! The last time it traded at 8 times was in 2001, when Gold was about $250 per ounce.

IMO, we will see Oil at 100-120 per barrel. We know that the mine supply of physical gold is in deficit of 40% compared to world demand (roughly 2,500 ton mine supply vs. 4,500 ton annual demand) and the mine supply is decreasing each year. At 8 times Oil, Gold will sell at a minimum of $800 per ounce.

Mover Mike

First Bill Clinton praises Iran, now this:

WorldNetDaily.com Exclusive By Art Moore Tehran apologists backing Hillary?

Iranian Americans accused by members of their community of collaborating with the cleric-led Islamic regime in Tehran have planned a fund-raiser for Sen. Hillary Clinton in the San Francisco Bay Area.

Mover Mike

From WorldNetDaily.com Lebanon: Syria out, Iran in By Aaron Klein

As Syria prepares to withdraw some of its troops from positions in Lebanon, Iran has been fortifying Hezbollah bases and positioning itself to become the dominant force on the ground in Lebanon, senior opposition sources say.

I suspect, Israel will feel more threatened and as the heat has been turned up for freedom in Lebanon, we will have more incentive to act against Iran.

Mover Mike

I'm appalled. In Exclusive Interview with the Washington Post Managing Editor Philip Bennett and the People's Daily of China

Yong Tang: According to the opinion polls, the image of Ame