Travels & Commentary of Ricochet Smith
TABLE OF CONTENTS
(CLICK LINK TO JUMP TO A SPECIFIC ARTICLE)
Solitude Resumes ................................................................................................................................ 06/04/09
Have We Lost The Reason For Grandparents? .................................................................................. 05/13/09
I'm Giving Up Hope on Federal Fiscal Responsibility .......................................................................... 05/11/09
The Collective "Greenie" Myopia ......................................................................................................... 05/10/09
On Going To as Opposed to Leaving .................................................................................................. 05/09/09
Stress Tests by and for Wooses .......................................................................................................... 05/07/09
Worker's Day Commentary-They're All Crooks Part II .......................................................................... 05/02/09
Optimistic Financial Pundits Are A Legend In Their Own Behind ........................................................ 04/28/09
Today’s Shekel Trakker Edition ........................................................................................................... 04/23/09
Progressive Support for Atlas Shrugged??? ........................................................................................ 04/21/09
Crooks Are Pervasive From Banking to Bailout ................................................................................... 04/21/09
Commentary for April 20th - Schwarzenegger ..................................................................................... 04/20/09
More Idle Observations (CO2) ............................................................................................................. 04/18/09
From Outside Peering In-Commentary (Industrial Production) ..............................................................04/18/09
From Outside Peering In-Commentary Saturday, April 18, 2009
So now you have bought some equities in the past month and some of the big banks have been reporting a profitable quarter, huh? Well the Dow has begun to flatten out from its 30% rise…
The “stress tests’ for banks are as bogus as their implementation. Do you really think that the 10 examiners assigned are sufficiently adequate to dig into the complex world wide CDS’s that Citi owns? Ha ha ha. The Financial times reports that rising unemployment has been at a rate to invalidate the tests even under the Treasury’s “adverse scenario” model. Now they are going to interpret the results more stringently. The Treasury has declined to comment. Dr. Nouriel Roubini, chairman of RGE Monitor observes “The stress test results are meaningless as actual data are already running worse than the worst case scenario.”
Citi reports a $1.6 billion Q1 profit, helped by $2.5 billion accounting gimmick (NYT) “The earnings were helped by an accounting change that allowed the bank to post a one-time gain of $2.5 billion….Under the rule, companies are allowed to record any declines in the market value of their debt as an unrealized gain…..Analysts speculated that Citigroup would continue to struggle under the mounting weight of exposure to consumer related loan defaults that are likely to increase as the recession continues and more Americans lose their jobs.”
Higher unemployment indicates lower productivity with fewer dollars going into the touted increase in personal savings and retirement plans.
Bloomberg reports:
Industrial production in the U.S. fell for the 14th time in the last 15 months as factories trimmed unwanted stockpiles. Output at factories, mines and utilities dropped 1.5 percent last month, more than anticipated and matching the prior month’s decrease, according to a report from the Federal Reserve today in Washington . The amount of industrial capacity in use fell to 69.3 percent, the lowest level since records began in 1967.
Source: Federal Reserve
More Idle Observations - CO2 Saturday, April 18, 2009
* The science is not settled on whether CO2 is in fact responsible for climate change, and if so, to what degree.
* CO2 is inherently a product of energy production that results from combustion of any chemically-stored form of solar energy that involves the carbon atom.
The cow in the field that makes milk emits greenhouse gases - they fart. Really. And methane is several times as potent as a greenhouse gas as is CO2. What's the "cow tax" going to be? And what's the tax on that bowl of chili I want to eat - you know what comes next, right?
Commentary for April 20th - Schwarzenegger Monday, April 20, 2009
There is always more than any single or simple reason for significant changes like moving for a beautiful climate.
After the wonderful Governor Schwarzenegger fell into bed with that bunch of spendthrift California legislators and thought they were going to tax me to cover that $42 billion worth of profligate spending making it the highest taxing state in the union, I said the hell with that – I’m outta here.
John and Ken at radio KFI have covered this much better than I and you can even hear their on-air rants here: http://www.kfiam640.com/pages/johnandkenshow/
If you’re a Californian, don’t put up with your representation – they’re mostly crooks!
Notable Quote: "It is said that married men live longer ….In fact, it only seems that way."
Crooks Are Pervasive From Banking to Bailout Tuesday, April 21, 2009
From the recent banking quarterly reports to the front page of the NYT/Business, the article “Bank Profits Appear Out of Thin Air” the banking and investment house crooks are still gaming John Q. Public.
The article refers to Bank of America’s fraudulent earnings scheme of booking a $2.2 billion gain that falsely increases value of the Merrill Lynch’s assets recently acquired. BofA decided to give themselves a phony profit bump by raising the value of Merrill assets to prices significantly higher than Merrill kept them.
But it wasn’t only the banksters at BofA pulling this nonsense; All the cool kids were doing it:
• Goldman Sachs and the disappearing month of December
• JPMorgan’s profit was due to repricing the value of its falling bonds
• Citigroup also used the bond trick.
Barry Ritholtz http://www.ritholtz.com/blog/ comments, “Instead of receivership and liquidation, we rewarded these cretins with your grandchildren’s lunch money. It is idiocy on a grand scale, beyond my feeble imagination."
Progressive Support for Atlas Shrugged??? Tuesday, April 21, 2009
I found it supremely interesting to find someone like Jim Kunstler http://jameshowardkunstler.typepad.com/clusterfuck_nation/ supportive of Dagney Taggart and her railroad company. However he and I share a common confusion regardless of our diverse politics. If our nationally wanton spending over the past decade plus has created this global economic dilemma, how in the name of God’s green earth is more spending via TARP/TARF/PPIT bailouts going to save anyone by supporting a hydrogen balloon of a GDP? Suck it up – mow your own lawn, you need the exercise anyway. And then after watching the Food Channel and now you’re hungry, don’t go out to an $80 dinner – go make what you just learned. Another parallel (or lack of) with the Great Depression and now is that nobody knows how to be thrifty – who amongst you knows how to darn a sock??? Do you know how to resole your own shoes? You all deserve what you’re getting!!
Today’s Shekel Trakker Edition Thursday, April 23, 2009
If you remember back last year we were told that The Fed would not lose money on this transaction by Bernanke himself:
In his testimony Wednesday, Bernanke said he did not believe the central bank would lose money on the deal and said it could make money. He said he did not consider the transaction a bailout because of the losses sustained by Bear Stearns shareholders.
Latest losses on the Bear loans that The Fed acquired (which we'll get to momentarily):
* Commercial has been written down 28%!
* Residential write downs and outright losses of 38%!
Optimistic Financial Pundits Are A Legend In Their Own Behind
Tuesday, April 28, 2009
So you have been listening to the news and the housing market is bottoming and the banks are showing a profit huh? Ha ha ha – gales of derisive laughter are being heard all along the Gulf Coast – from moi, yep!
Banks have been lobbying hard for the Federal Accounting Standards Board to lift the "mark-to-market" rule that requires them to account for the value of their assets based on current market prices. Banks didn't seem to mind this rule when prices were up—and made their results look better—but now they say the rule is unfair, because troubled assets are so hard to sell these days. Early in April, the board relented, easing the rule and allowing banks to write some of those assets back up.
Another recent report by McKinsey takes a similarly bleak view…that about 60 percent of the credit on the balance sheets of U.S. banks are for items that aren't marked to market, but to those ever-nebulous financial models that got us into all the trouble to begin with.
There Are Too Many Crooks All In Bed With Each Other – it’s a mutual admiration society in the financial world. Their collective goal is to keep those ill gotten gains from the past 6 years. The quote was heard “but it worked for years”. That’s why they call it leverage, it’s not a real force founded in basic banking principles. But then again who in 1955 wanted to be a “stick-in-the-mud banker eking out a miserly living at 3% return. Let’s get REAL greedy and if customers ask too many questions confound them with obfuscating contract language.
Worker's Day Commentary-They're All Crooks Part II Saturday, May 2, 2009
Berkshire’s Munger Says ‘Venal’ Banks May Evade Needed Reform
Berkshire’s Munger said banks will use their “enormous political power” to prevent changes to the industry that would benefit society. “This is an enormously influential group of people, and 90 percent of that influence is being spent to gain powers and practices that the world would be better off without,” Munger, 85, said yesterday in an interview with Bloomberg Television. “It will be very hard to accomplish the kind of surgery that would be desirable for the wider civilization.”
“We need to remove from the investment banking and the commercial banking industries a lot of the practices and prerogatives that they have so lovingly possessed,” Munger said. “If they are too big to fail, they are too big to be allowed to be as gamey and venal as they’ve been -- and as stupid as they’ve been.”
Munger said the financial companies spent $500 million on political contributions and lobbying efforts over the last decade. They have a “vested interest” in protecting the system as it exists because of the high levels of pay they were earning, he said. The five biggest U.S. securities firms, only two of which still exist as independent companies, paid their employees about $39 billion in bonuses in 2007.
“They would like to get back as closely as possible to business as usual, and they have enormous political power,” he said.
Stress Tests by and for Wooses Thursday, May 7, 2009
So let me get this right, over half of the nations leading banks (ne investment houses) need more money from taxpayers! That tells me that they are STILL OVER-LEVERAGED. And cutting to the chase isn’t that what got those (I’ll be nice) overzealous bankers into trouble in the first place?
Is this too many questions – or isn’t it obvious to anyone …or maybe you just don’t care because your car does not qualify for “Clunkers for Cash” and you can’t even get to work. If you’re that myopic you probably don’t even realize your house value dropped 43% and you wonder why your mortgage ARM payment and credit card bills are zooming up – sorry NOBODY can help the likes of YOU.
So back to my tirade; let’s get this straight, since the banks are over-leveraged this is causing them to imminently fail (yes really-that’s why they need the MONEY). Then they need to sell some of their junk they own like CDS’s, CDO’s, MBS’s or whatever their trash tranches hold for whatever they can get for them.
I’m tired of this foolishness that’s been going on for over a year now. The bankers aren’t fixing this – they’ll lose money! The government isn’t fixing it – or they wouldn’t need more money! Besides, when did you rely on the government for anything you really needed – taxes don’t count.
And you wonder why I’m down here for awhile? This Atlas is shrugging and refuses to participate in such wholesale foolishness.
On Going To as Opposed to Leaving Saturday, May 9, 2009
The tourist season has ended here in the islands. Nicole, the fruits and vegetable girl from Germany , has stopped deliveries and it rains a bit more now. She has been here for eight years now.
The tourists that come here and their season are determined by where they live. They are escaping the weather that they don’t like and/or the daily drudge of their job. They leave when the weather at home improves enough to be bearable. They are also dragged home by the obligations of mowing the lawn, fixing the disposal, and a laundry list of home ownership albatrosses.
When I went to California in 1966, it was to go to work in the defense electronics industry where there was sun and surf. This was in contrast to leaving a small town in northern Minnesota with temperatures below -40 F in the winter. My glass of water has always been half full as opposed to half empty.
Admittedly I do rail against the onerous taxes imposed by the spendthrift California Legislature. And I also think it’s time to yank the bailout purse strings tight and make the banking industry pay for their own malfeasance. But most of my mental pressure is of my own doing. I have always believed one needs to pull their own freight and that ones welfare is directly a result of ones own efforts.
So now I anticipate spending my off time here, where this month’s pressure is remembering the day I have to visit the Immigration Ministry’s office in two weeks. And I am (re)learning the Moscow Producti (market) practice of “if you see something you may need, you better buy while it’s there”.
After a month of watching and buying on the stock market, I have learned to “pull the trigger” and cut my losses. This is completely at odds with my growing up with depression-era parents. Their ethos of waste-not-want-not dictated save and keep something even if you spent more time moving it than using it. Of course living on a boat for 12+ years has given impetus to my Minimalist outlook. One sharp butcher knife does everything, the knife holder block sits empty on the counter. Lest I tax your attention and have nothing for tomorrow ~ later.
The Collective "Greenie" Myopia Sunday, May 10, 2009
or “You Cannot Fool Mother Nature”
I was watching the BBC program this morning “World Debate” that was addressing the deforestation problem in the Amazon. There were terrible prognostications of how the rain forest would turn into a grassland savannah with an increase of 4 degrees of world temperature. This effect would supposedly inhibit world wide processing of carbon dioxide into oxygen.
Now as I understand the existence of the planet Earth, it has been spinning out in space for about 4 ½ billion years in temperatures exceeding -270+ degrees cooling all the while – not warming! The magma convection warms the crust with a little help from the Sun at the surface but the planet is cooling none the less. A York , PA chemistry professor cited the “extensive” temperature records “All the way back to the Civil War” ha ha ha! More derisive laughter. Try going back to the Jurassic!
We have had drastic climate changes granted but they have taken place over multi-millennia. Where do they think our coal and oil came from? An appropriate analogy may be to consider the human race like a mayfly in the grand scheme of things – an insignificant 24 hr lifetime. We're an invisible blot on the face of the universe. Change is what drives the bigger picture; the climate change that helped differentiate the Neanderthal from Cro-Magnon man. The ice age weight that was so great that it caved in the earths crust creating the Great Lakes and scraped off the mountains around Toronto that were higher than Everest.
Now back to the debate, The Brazilian government does have an obligation to its citizens to provide opportunities to better themselves. Currently the only way for the locals to gain more money is to replace the forest with croplands. To paraphrase the Provincial Governor “there is insufficient incentive (money) for the locals to be guardians of the worlds carbon dioxide re-processor”. If it is in the world’s best interests to keep the rain forest, the world needs to invest in or otherwise promote the local welfare with viable infrastructure. We did it in America because in absolute numbers there are more trees than when the Pilgrims landed.
But let us not confuse things we cannot change – climate control - with things we can – resource conservation. Obfuscation is only one enemy of the thinking man.
I'm Giving Up Hope on Federal Fiscal Responsibility Monday, May 11, 2009
There is a current analogy to my view that 'any efforts to rectify the inconsiderate California drivers would be pointless.'
And that is 'the Federal governments collusion with big banking is close on the heels of California finances that have gone in the toilet' – paraphrasing: "Abandon Hope All Ye Who Enter (Reside) Here"
Stress Tests Are Over. The Stress Isn’t.
With almost 40 pages of charts, graphs and scenarios, the program was a “deliberately stringent test,” its authors said. Clearly, the message they want to send is that the banking mess we have endured for the last two years is finally becoming manageable.
Banks Won Concessions on Tests
When the Fed last month informed banks of its preliminary stress-test findings, executives at corporations including Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. were furious with what they viewed as the Fed's exaggerated capital holes. A senior executive at one bank fumed that the Fed's initial estimate was "mind-numbingly" large.
At least half of the banks pushed back, according to people with direct knowledge of the process. Some argued the Fed was underestimating the banks' ability to cover anticipated losses with revenue growth and aggressive cost-cutting. At times, frustrations boiled over. Negotiations with Wells Fargo, where Chairman Richard Kovacevich had publicly derided the stress tests as "asinine," were particularly heated, according to people familiar with the matter. Government officials worried San Francisco-based Wells might file a lawsuit contesting the Fed's findings. The Fed ultimately accepted some of the banks' pleas, but rejected others. Shortly before the test results were unveiled Thursday, the capital shortfalls at some banks shrank, in some cases dramatically, according to people familiar with the matter.
Have We Lost The Reason For Grandparents? Wednesday, May 13, 2009
In the ancient world, when social groups or tribes were traveling up the east coast of the Mediterranean from the Great Rift or even later crossing the Bering Sea via the Aleutian land bridge, there was a necessary function for everyone.
When the children were old enough to help their mothers gather roots and berries, the fathers were out hunting game, looking for better living places and protecting the extended family unit. The older women would help with processing food, making and mending clothes, and other ‘close at home’ chores. The older men would make hunting weapons, build new living quarters and the like.
But today in efforts for autonomy, self sufficiency or being farmed out because of available living space, the elderly and grandparents are no longer able to pass along their hard earned knowledge to both children and grandchildren. Now granted there are sometimes self-sufficiency hurdles or other psychological barriers for grown children to deal with just as there are dictatorial parenting and other parenting problems needing resolution. That brings us to other communication problems evidenced by divorce and abandonment. In tribal times there was no “other” place to go or escape to. While I am not advocating Cain and Able conflict resolution a dialog still remains to be maintained or initiated.
One rainy fall day my children and I accompanied my father and mother on a drive around where my father grew up. The family burial plots for his aunts and uncles and other family members as well as old homestead locations were seen. My father knew these places like the back of his hand from spending over 7 decades there and we all enjoyed his sharing. For me it went by all in a two hour flash one Sunday afternoon – and unfortunately, few specifics stayed with me.
A better understanding of maintaining/documenting a family history needs to be done. A better use of earned and learned life experiences would benefit both children and grandchildren ~ and coincidentally make grandparents useful again besides just babysitting.
Solitude Resumes Thursday, June 4, 2009
It has become a mausoleum around here again or so it feels. Aleta with Ella and Philip in tow have departed for Florida enroute to Pennsylvania after a week of relaxation (I hope - after the water incident). The local rum possibly helped, I know it did me.
I believe I have probably forgotten or at least glossed over Aleta’s demeanor of 30+ years ago but I do remember marveling at the amazing difference in attitude between her and Cole. I vaguely remember my family commenting on their exuberance. I always thought that all kids were that way and never realized that most of humanity is so slow moving and disinterested in the world around them. I see the same similarities between Ella and Philip as with my kids and I am so very glad for that level of energy and wonderful teamwork even at their ages.
I am also glad that they live where they do. I happened to catch a CNN news item where one guest does not even allow his six year old out in the yard by himself for fear of kidnapping and whatnot. That makes our society criminal in our complacency. I remember the LAPD slogan (even Adam 12) was “To Serve and Protect”. Did you ever notice…the crime is committed and the criminal is gone and only then is there cause for police involvement-there are no deterrents.
What ever happened to personal responsibility? That guy from CNN has abdicated his personal responsibility at the cost of his own son. That is absolutely appalling. If you cannot stand up for you and yours you are a waste of skin.
Bruce
Jeep "Guzzler"
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