Happy New Year

What is the world?

It is a manifestation.

Of what?

Of God's Love.

All is a perfect manifestation of the infinite love and infinite power of God.

2009 was a perfect year.
I expect 2010 to be another perfect year.

World without end.

Cat's Cradle by Kurt Vonnegut 1963

"Life will make fools of us all."

The amazing thing to me about end of the world stories is how starkly they contrast with the real world.

4 billion years and counting.

Is it likely the world will end soon, on our watch? Is it likely we will actually end the world with our little machines?

The over estimation of the power of man.

How vast is the cosmos. How tiny we are. There is no comparison.
The best choice is not to curse our fate. The best choice is to stand in awe.
Praise and thanksgiving.
We get it all for nothing. It is all free. Why should we demand more?

Be thankful for what is.

FEY

a. Having or displaying an otherworldly, magical, or fairylike aspect or quality: "She's got that fey look as though she's had breakfast with a leprechaun" (Dorothy Burnham).
b. Having visionary power; clairvoyant.
c. Appearing touched or crazy, as if under a spell.
2. Scots
a. Fated to die soon.
b. Full of the sense of approaching death.

The word "fey" generally denotes someone or something a little otherworldly, or magical, or fairylike. Sometimes it also refers to the power of seeing the future, often with the negative connotation of seeing death or calamity.
Someone who appears "fey" may seem to be a little crazy or under a spell. In literature I think of Hamlet's girlfriend, Ophelia. In Harry Potter there is Luna Lovegood.
Another meaning of "fey" is actually to be about to die. So Ophelia fits that very well.

Dollar Down Stocks Up

Why does that happen?

Simple reason really

A company has a value not dependent upon the value of its local currency. Thus, it is sort of an inflation hedge.

All other things being equal, if the dollar drops 50%, there would be a rise of 100% in U.S. stocks.

Just like a load of bread. If the dollar loses half of its value, then the $2 loaf of bread would become a $4 loaf of bread. A share of Microsoft would go up for the same reason.

Of course, the real world is a little more complicated, but the principle is the same.

TENNIS makes me feel better

58 years old
if I sit around and do nothing
I get a lot of pain
back pain
foot pain
neck pain
everything pain

but the more I run around
the less pain I get

tennis is a good one
very strenuous and taxing and lots of stress on the old skeleton

but I get less pain if I play regularly
I have heard that the best remedy for arthritis is exercise
I agree with that

Pride's A False Guide

what more can I say?

Taxes and Gold (TAX THE RICH) Progressive

Gold finally hit a little correction. It dropped 4% in one day to settle around $1,169. Still higher than I ever expected.

The Senate is looking at executive compensation again. This time for insurance company executives.
I find this to be very unreasonable. If a million dollar salary offends, the simple solution is to having higher marginal tax rates. Then we all win. The community gets more revenue from the taxpayer and executives don't get hurt by "price control."

Also, major tax loopholes need to be closed.
And one idea to help the little guy must be thrown in.
INCOME AVERAGING

It would not be fair to tax a windfall, like a lottery win, or the sale of a business, if it is a one time event, at the same high rates as annual incomes. The old income averaging allowed you to distribute windfalls over four years.
That would be fair.

Why Can't People Be Nice?

Human nature tends to be abusive.

Why send soldiers to Afghanistan?
How about 30,000 teachers?

Why is it always, "Do this or I kill you!"?

Bulldogs get a death grip on one another. Stubborn they will not let go.

Don't back down.

Don't settle or compromise.

No compromise.

What is there to negotiate if one party says, "I will not compromise."?

What Is Rent Seeking? Economic Jargon

"Rent Seeking" is economic jargon. It is recently minted bit of jargon, dating only back to the 1970s. It refers to the bad habit people have of going to the government for help. Special regulations are sought to make life more difficult for competitors, such as license requirements for contractors or brokers. Tariffs are sought to interfere with foreign competition. This keeps people out of the business. People try to get a benefit or entitlement for being in a particular class such as children or the elderly or minorities. Social Security is a special payment to the aged. Business tries to get a subsidy, such as a tax credit for solar power.

Rent seeking might be looked at as a way to make society more fair. Or it might be looked at as a way people try to get unfair results from the economy. From the government perspective it could be a way of social engineering, changing behavior in desirable ways.

Does it work? It creates a drag on the system. It encourages bribes. "Rents" in this definition are themselves a sort of bribe to various groups.

We are stuck with it. People have always gone to government for favors.

Moral Hazard Metaphor

Moral hazard is an insurance term. It refers to the possible tendency of the insured to behave differently from the uninsured in a negative way.
Thus, a person with fire insurance might be a little less diligent about clearing the brush around his home. Makes sense. Being insulated from consequences could surely change behavior.

How about insurance fraud?
Tired of married life, you take out a large insurance policy on the life of your spouse. Then you go out sailing in rough weather. After a few too many drinks, someone falls overboard. But this may be too obvious. I'm sure a clever psychopath could figure out a better scheme.

How about moral hazard and confession? Worried about your immortal soul you repeatedly seek remission of your sins. What you don't do is to stop sinning.

Malingering is a sort of moral hazard. Many people prefer to loaf rather than to work. An illness provides a convenient excuse to avoid work. A headache, insomnia, back pain, carpal tunnel sydrome, depression, etc.
For these malingering strategies to work you usually need a codependent. Someone who will do your work if you have a good enough excuse.

So moral hazard looks like a metaphor to me. It is a metaphor for all the strategies people employ to get something for nothing. To live well and get someone else to do the work.

My bad behavior will not only be insulated from bad consequences, it will actually be rewarded.
My negligence will pay off in a big way. When my house burns down they will rebuild it. Then I will have a new house!

If anything inconvenient happens in my life, I will be entitled to all sorts of goodies.
Yes, the world of moral hazard is a beautiful world, a world of bliss, where anything can happen.

Greed

climb too high and you may fall

desire is the source of the cosmos

disordered desire is greed

Heart's desire
Greed is not heart's desire. It is something else.

Why live in want? Want is another word for greed. How so?

Desire is the present manifestation of the infinite. Desire is what is.
Want is the tricked mind looking for what is not. What is is sufficient. What is is blessing.
What is not is nothing. Why pursue nothing?

Greed leads to all sorts of trouble. How many falls preceded by greed and pride?
Be happy
Be satisfied right now
Now is what is
Now is all that is
And now is full

Gold Won't Quit

Gold keeps making new records.
11/25/09 $1,182.95 per oz.

I had expected a top around $1,150. I was wrong.
But this new high is only about 3% above $1,150. Maybe I am not as wrong as I think.
But maybe gold is going to $1,500.

Speculative markets do tend to overshoot fundamentals. Bubbles and anti-bubbles form time and again.

Is this a bubble?

Why would anyone hold gold? It is not a productive asset. It pays no dividend. Mostly it is used for jewelry. It is not that valuable industrially.

But you can't argue with the tape.

I like the return on one acorn. It turns into a giant oak tree. That is a real return.
A bar of gold stays a bar of gold. That is all.

GOLD Hits $1,144.20

all that glitters is not gold

hold 'em or fold 'em?

Gold is ready to correct. The bulls are saying $1,300 in six months.
I say the top is near, very near.

What will be the change?
It is a mystery clearly.

DOW 11,000, Backing and Filling Over?

Solidly over 10,000 again after a period of consolidation

Will 10,000 be support now on the way to 11,000?

I see that as most likely.

11,000 by December 15? Very likely. But after that consolidation should resume.
Why? Because the dollar will not keep falling forever. A dollar recovery in 2010 is very likely and will make market gains more difficult.

What about gold? New records today. Could top out around $1150

Don't be afraid. Be rational. Use reason.
What would a reasonable person do?

Expectations....Expect The Infinite

Tendency is to go through life with some high expectations
And to look at what the other guy has
And to expect the same or more.

We like to have more.
We like to feel like the winner or the best

With a normal outlook we can't all be the best

We fall short and feel bad
Feel bitter
Life is a bitter pill

You could mitigate this by lowering your expectations
But that would only half solve it
You would still be having expectations
You could still be disappointed
You could still get bitter about it

Or you could wake up and have no expectations
By living completely in the present
By accepting totally the amazing gift of each infinite moment

What is real?

Compare your own personal experience with what is presented to you by mass communications.

There is a solid disconnect.

They claim thousands die of influenza every year.
I tried to think of any personal knowledge I have of someone who died of the flu. I couldn't think of even one! Finally I remembered a relative who died in the 1918 epidemic. That was it.

On the other hand, I have had lots of personal acauintance with automobile deaths.

The world I see every day is pretty good and wonderful and even delightful. That is the real world. I hear of so much bad stuff, but that is not my experience.

What is your experience?

Abundance

We live in an abundant world.

There is plenty of sunshine, and air.
Lots of oxygen.

Things are going well.

Let the flowers grow!

$4,500 per person

The U.S. budget deficit hit a record $1.4 trillion in the just-ended fiscal year, the government said on Friday, as the deep recession and a series of bank rescues cut a gaping hole in public finances.

wow!

That is a lot of money.

Comes to more than $4,500 per person.
For my little 4 person unit that is $18,000.
What did we get for that?

I don't know how to take it.
Maybe we really don't have to pay it back?

10,000 bull market goes on

Today the DOW 30 closed above 10,000 for the first time in over a year.
What a difference a year makes!

The next expectation is DOW 11,000. There may be some backing and filling but the next 1000 points should come quickly.

Don't ask why. Speculators never die, and are always reborn.

Full Employment

Unemployment rate approaches 10%.

But what is full employment?

What is a healthy rate of unemployment?

We have been led to believe that 4% is full employment. But at that level we usually get inflation and labor shortages and lots of illegal immigrants taking jobs. That is an overheated and overstimulated economy.

I propose that full employment is 8%.

We should gear all our expectations around that number.
Then the number of "problem" unemployed is much smaller than we think.

We work too much.
We produce too much.
It makes us sick.
It makes the earth sick.

We would do well to be content with less and stop being so angry.

Better to live simply than to live in anger.

DOW 10,000 and California government bankrupt

The DOW 30 looks headed for 10,000 soon. 4% up from here is all it takes. That could happen by the end of September!

But California looks more likely to become more insolvent as time goes by.
When will the end come? I expect it some time in the next ten years. Business is fleeing the state, tax revenues continue to go down and "needs" go up. THe rest of the country is recovering but California is still falling. Where is the bottom?
And what will happen?
Things will go on but there will be many losers.
The losers will scream loudly.

SAVE MONEY BY STRETCHING IT OUT

Medical costs

doctor says come back in six months
say OK I'll see you in eight months

doctor says some back in 12 months
say OK!
see you in 15 months

saves a lot by stretching it out

California Fires

A lot of houses have been built in dangerous fireprone areas.

I heard a fire chief advocating more brush clearing.

But this destroys habitat. This damages ecosystems.

We should preserve the natural environment.

We should not listen to the cry, "HUMANS FIRST!"

Learn to live at peace with nature. That is the best approach.

Income Tax Should Be More Progressive

Here is an issue that cuts across many debates.
People are unhappy about executive compensation.

Solution

Higher tax rates on high incomes.

If John Crookedpants makes 50 million running a company then he should pay a lot of income tax.

People are unhappy about the cost of medical care.

Somebody is making a lot of money providing the care.

Maybe a doctor

He should be paying more income tax.

And also close loopholes.

We need some higher brackets. Maybe they should kick in at $300,000 and go from there.

The treasury needs the money also.

So three issues here would be improved.

Executive compensation
High price of medical care
Government budget

Who is against a higher tax on someone who makes a million dollars?

The Quest For The Emerald Leaf

Erin got her books delivered today.

They look great!

CONTACT INFO FOR THE AUTHOR!!!

You can email Erin Oliva at

erino1991@aol.com

She can help you if you are interested in buying a book!
Buy
Purchase
Order

The Quest For The Emerald Leaf

NO VACANCIES

Had two vacancies in August. They are both now rented.

I did lower my prices a little.

One unit I lowered by 6%. I rented it almost immediately.

The other unit I lowered gradually over the course of a month.

When I had gotten the price down by 17%, someone stepped forward and took it.

I really believe that if people are willing to take less, they will be employed. Holding out is a bad strategy. There is nothing wrong here with our economy that can't be fixed with a little humility.

Nice Hat

Falling Rents

I finally have a vacancy in a Santa Monica apartment. First one this year.
I have been trying to rent it for about three weeks with no success.
I have dropped the price 14% so far from what I was getting. Two bedroom one bath

But I also just rented a one bedroom very easily (before the old tenant was even done moving out) after dropping the price only 6%.

Things are heating up around Los Angeles.

Traffic is heavy. Shoppers are out shopping. Looks like things are already getting over-heated.

The next twelve months should be interesting.
Good service, a good product, a good price. Those are the keys to good sales.

BULLS RUNNING

July 23, 2009

S&P 500 trades above 971 taking out previous recovery high of 956 set June 11.

The bears are still calling for corrections and new lows but the market is saying something.

"YOU CAN'T KEEP A GOOD MAN DOWN."

The diligent
the honest
the prudent
the generous

always lead us the greater prosperity

Tally-O

Tally-Hi-Ho. Everyone hides except the person who's it. This person calls out tally hi-ho to which everyone must echo unless the person is within close proximity. Once found, the person must be correctly identified, otherwise they are safe.People can choose to hide together if they wish.

OPINION

There is one thing you can never foretell and that thing is the future.

Shooting In The Dark

Medical Errors - A Leading Cause of DeathThe JOURNAL of the AMERICAN MEDICAL ASSOCIATION (JAMA) Vol 284, No 4, July 26th 2000 article written by Dr Barbara Starfield, MD, MPH, of the Johns Hopkins School of Hygiene and Public Health, shows that medical errors may be the third leading cause of death in the United States.The report apparently shows there are 2,000 deaths/year from unnecessary surgery; 7000 deaths/year from medication errors in hospitals; 20,000 deaths/year from other errors in hospitals; 80,000 deaths/year from infections in hospitals; 106,000 deaths/year from non-error, adverse effects of medications - these total up to 225,000 deaths per year in the US from iatrogenic causes which ranks these deaths as the # 3 killer. Iatrogenic is a term used when a patient dies as a direct result of treatments by a physician, whether it is from misdiagnosis of the ailment or from adverse drug reactions used to treat the illness. (drug reactions are the most common cause).

People Fighting

We love to see people fighting.
Or do we?

Now they are fighting in Iran.
What should we do about it?

Stay out of fights.
Don't get involved in other people's fights.
Let them figure it out.

Leave it.
Let it be.

You can't really stop other people from fighting.

And the world is really perfect already.
That is the truth.

FOUNDATION OF THE ECONOMY

First you need food.

Then you need transportation to get the food to where people are.

People need shelter

and clothing

food, transportation, shelter and clothing

The economy rests on that foundation.

One more thing

LAND

You need land to grow the food.

So, the real foundation of he economy is that one thing-LAND
also known as real estate

Angel On Earth

Can you see the halo over Ethel's head? This is a photo of Ethel Gullette and Erin Oliva at the high school graduation of Erin from Windward School.
Ethel is a saintly angelic being. I think you can see it clearly in this photo.

Please don't shoot me

It is important to remember that government interference always means either violent action or the threat of such action. Taxes are paid because the taxpayers are afraid of offering resistance to the tax gatherers. They know that any disobedience or resistance is hopeless. As long as this is the state of affairs, the government is able to collect the money that it wants to spend. Government is in the last resort the employer of armed men, of policemen, gendarmes, soldiers, prison guards, and hangmen. The essential feature of government is the enforcement of its decrees by beating, killing, and imprisoning. Those who are asking for more government are asking ultimately for more compulsion and less freedom. -- Ludwig von Mises

DEMOCRACY

democracy equals inflation

The Front

Still no vacancies so far this year. Everyone is paying rent. No problem collecting rent.
I do see a lot of "for rent" signs up around the neighborhood. Like the wolf is roaming nearby.
So I remain vigilant.

One tenant has told me she will be moving in August or September. Getting married!
September is a good time to find tenants as college students are coming back into town.

Still seems to me like we all can live well on much less. Our per capita consumption is much greater than it was in the past. Why do people get so upset when they need to cut back?

Every Day Is Mother's Day

Whatever is our source is our mother.
We are reborn in every instant.
We are eternally reborn.


5/10/09
Dear Laura,

This day has a lot of context
Regarding labor and regarding rest

Things you have done for me
Things that we both can see

Surrounding us here in our little nest

Today is a day for family
We are busy doing our duty
Driving up and down
With smiles not frowns

Looking at the source of all that is
We call it mother
We call it father
What it really is we cannot say

Back to the church we will meet
With all the loved ones who make us complete

You will bring flowers and hope and faith
I will bring our children the buds of our youth

What is it all about?
We see each other
We touch each other
We share food with each other
We tell our stories to each other

So what if the sun sets?
We know it also rises

And we know our wounds will finally heal
And we know that love is really real
And we know that the world is truly vast
And we know this supper will not be the last

All my love,
Bix
　
　
　
　
　
　

GROSS NATIONAL HAPPINESS

Under a new Constitution, government programs must be judged by the happiness they produce, not by the economic benefits.
Seth Mydans/International Herald Tribune

By SETH MYDANS
Published: May 6, 2009
THIMPHU, Bhutan - If the rest of the world cannot get it right in these unhappy times, this tiny Buddhist kingdom high in the Himalayan mountains says it is working on an answer.



Prayer flags above a monastery in the kingdom of 700,000.

The New York Times

"Greed, insatiable human greed," said Prime Minister Jigme Thinley of Bhutan, describing what he sees as the cause of today's economic catastrophe in the world beyond the snow-topped mountains. "What we need is change," he said in the whitewashed fortress where he works. "We need to think gross national happiness."
The notion of gross national happiness was the inspiration of the former king, Jigme Singye Wangchuck, in the 1970s as an alternative to the gross national product. Now, the Bhutanese are refining the country's guiding philosophy into what they see as a new political science, and it has ripened into government policy just when the world may need it, said Kinley Dorji, secretary of information and communications.
"You see what a complete dedication to economic development ends up in," he said, referring to the global economic crisis. "Industrialized societies have decided now that G.N.P. is a broken promise."
Under a new Constitution adopted last year, government programs - from agriculture to transportation to foreign trade - must be judged not by the economic benefits they may offer but by the happiness they produce.
The goal is not happiness itself, the prime minister explained, a concept that each person must define for himself. Rather, the government aims to create the conditions for what he called, in an updated version of the American Declaration of Independence, "the pursuit of gross national happiness."
The Bhutanese have started with an experiment within an experiment, accepting the resignation of the popular king as an absolute monarch and holding the country's first democratic election a year ago.
The change is part of attaining gross national happiness, Mr. Dorji said. "They resonate well, democracy and G.N.H. Both place responsibility on the individual. Happiness is an individual pursuit and democracy is the empowerment of the individual."
It was a rare case of a monarch's unilaterally stepping back from power, and an even rarer case of his doing so against the wishes of his subjects. He gave the throne to his son, Jigme Khesar Namgyel Wangchuck, who was crowned in November in the new role of constitutional monarch without executive power.
Bhutan is, perhaps, an easy place to nimbly rewrite economic rules - a country with one airport and two commercial planes, where the east can only be reached from the west after four days' travel on mountain roads.
No more than 700,000 people live in the kingdom, squeezed between the world's two most populous nations, India and China, and its task now is to control and manage the inevitable changes to its way of life. It is a country where cigarettes are banned and television was introduced just 10 years ago, where traditional clothing and architecture are enforced by law and where the capital city has no stoplight and just one traffic officer on duty.
If the world is to take gross national happiness seriously, the Bhutanese concede, they must work out a scheme of definitions and standards that can be quantified and measured by the big players of the world's economy.
"Once Bhutan said, 'O.K., here we are with G.N.H.,' the developed world and the World Bank and the I.M.F. and so on asked, 'How do you measure it?' " Mr. Dorji said, characterizing the reactions of the world's big economic players. So the Bhutanese produced an intricate model of well-being that features the four pillars, the nine domains and the 72 indicators of happiness.
Specifically, the government has determined that the four pillars of a happy society involve the economy, culture, the environment and good governance. It breaks these into nine domains: psychological well-being, ecology, health, education, culture, living standards, time use, community vitality and good governance, each with its own weighted and unweighted G.N.H. index.
All of this is to be analyzed using the 72 indicators. Under the domain of psychological well-being, for example, indicators include the frequencies of prayer and meditation and of feelings of selfishness, jealousy, calm, compassion, generosity and frustration as well as suicidal thoughts.
"We are even breaking down the time of day: how much time a person spends with family, at work and so on," Mr. Dorji said.
Mathematical formulas have even been devised to reduce happiness to its tiniest component parts. The G.N.H. index for psychological well-being, for example, includes the following: "One sum of squared distances from cutoffs for four psychological well-being indicators. Here, instead of average the sum of squared distances from cutoffs is calculated because the weights add up to 1 in each dimension."
This is followed by a set of equations:
= 1-(.25+.03125+.000625+0)
= 1-.281875
= .718
Every two years, these indicators are to be reassessed through a nationwide questionnaire, said Karma Tshiteem, secretary of the Gross National Happiness Commission, as he sat in his office at the end of a hard day of work that he said made him happy.
Gross national happiness has a broader application for Bhutan as it races to preserve its identity and culture from the encroachments of the outside world.
"How does a small country like Bhutan handle globalization?" Mr. Dorji asked. "We will survive by being distinct, by being different."
Bhutan is pitting its four pillars, nine domains and 72 indicators against the 48 channels of Hollywood and Bollywood that have invaded since television was permitted a decade ago.
"Before June 1999 if you asked any young person who is your hero, the inevitable response was, 'The king,' " Mr. Dorji said. "Immediately after that it was David Beckham, and now it's 50 Cent, the rap artist. Parents are helpless."
So if G.N.H. may hold the secret of happiness for people suffering from the collapse of financial institutions abroad, it offers something more urgent here in this pristine culture.
"Bhutan's story today is, in one word, survival," Mr. Dorji said. "Gross national happiness is survival; how to counter a threat to survival."

Stranger than fiction

"Bernard Madoff's longtime secretary says she believes the disgraced financier is not cooperating with authorities to protect others.
CNBC.com
Bernie Madoff
Eleanor Squillari, Madoff's secretary of more than 20 years, says in an article she co-wrote for Vanity Fair that she helped the FBI gather evidence against him. "

So the crook named Madoff had a secretary named Squillari who is now writing articles about Madoff telling of his misdeeds.

Self Portrait

POVERTY?

Is poverty really a problem to be solved?

What is poverty?

A big general term applied to society.
We mean there are poor people living in our community.
They are so poor they cannot afford what we think of as the basics of living.

Food
Shelter
Clothing
Education
Medical care
Automobiles
Computers
Telephones
Cellphones
High speed internet
Big weddings and funerals and parties
Big vacations and cruises
Big screen high definition televisions

Anyway, they are starving and homeless and can't afford medicine. Sounds bad to me.

But I don't think those are the people we think of when we think of the "problem of poverty."

Poverty is seen in relative terms.

If someone else has a lot more, then you are relatively poor. I think this is what they mean when they talk about the "problem of poverty."

To me this is a personal problem.
It is a problem of envy.

Let us forget about poverty. Let us remove the word from our vacabulary.
What we really want to do is help people with desperate needs. Let us help those people and stop worrying about the people who are resentful of their neighbors who have more.

Poverty?
There is no poverty.

Everything we need is available right here and right now. It is all the gift of the infinite spirit. Open your heart and receive with praise and thanks.

REFLECTION ON A WALL

Report From The Front

We attended a small Easter party yesterday. There were some happy children there.
One young couple with two small children had just moved into a newly bought three bedroom house in Temecula, California. The parents were quite young, only 22 years old.
Looks to me like the ecomony is working for them very well.

1960 Zuma Beach Malibu California

STATISTICS=NONSENSE

Here are a couple of numbers I dug out of the news. Who knows if they are true or what they are really talking about.

1. number of people collecting unemplyoment benefits as of January 24, 2009 is 4.75 million.

2. number of people unemployed as of March 3, 2009 is 13 million.

My question: Who are the 8.25 million unemployed not collecting benefits?
Do any of these numbers make any sense?

REPORT FROM THE FRONT

The economy war continues. The land is filled with despair.

But in my little world.....
It is April 3 and already all the rent is in! Everyone is paying their rent on time! And nobody has given notice that they are moving!

Sounds good to me.

I hope others will prosper. I believe prosperity results from all the classic virtues. Give good service and charge a reasonable price. Be kind. Be generous. Have faith.

Mark To Market Madness

Today the accounting cartel finally made a substantive change in the mark to market rule that they put in place back in 2007. The change they made then had unintended consequences indeed.
The financial system was being destroyed by that rule change. All the other suspects were not really the cause. There have always been bubbles and bad loans. This time really was different, becaused of the mark to market rule.

Hard to believe but true.

Try this analogy.
The world economy is like an organism. The rules are like the DNA. The rulemakers are like mad scientists tinkering with things that should be left to GOD.
One small change in an organism's DNA can lead to hundreds of consequences.
Usually a mutation, any mutation, actually makes the organism less fit.
Many mutations are deadly.

The rule change they put in was of the deadly kind. It would have eventually killed the entire economy. It is fortunate that the rule has been changed again. Although the best would be to just go right back to the old rule. We must hope that the new rule today will work for our good.

It is hard for people to believe or understand that a simple rule change could kill an economy. But this is one experiment that has cost trillions of dollars.
Now we can look forward to a recovery.

Dog In The Manger

People often begrudge others what they cannot enjoy themselves.

Photos From Santa Monica

View of beach with Palos Verdes in the distance


Sitting in Palisades Park

CALL OF NEW BULL

March 23 (Bloomberg) -- U.S. stocks rallied, capping the market’s steepest two-week gain since 1938, as investors speculated the Obama administration’s plan to rid banks of toxic assets will spur growth and investor Mark Mobius said a new bull market has begun.

S&P 500 low 3/9/09 was 676.53. Today closed at 822.92, increase of 21.6%.
This action is just what I have been expecting. It would be really nice to see strong follow through to really wash the shorts out of the market.


Here is what I wrote way back in January
Market has moved up more than 20% from lows. But people refuse to call it a bull market.What gives?Just like the recession.Definitions don't count. It is all fuzzy stuff decided by various shadowy figures.I actually measure a 24% increase in the S&P 500 just looking at closing prices. If you look at absolute highs and lows the move has been 26% from the bottom.What number would be a new bear?S&P 500 close below 747.8 would be a new bear market.Today we closed at 906.65, pretty far above 747.8.A correction could take us to 841
So, the low on 3/9/09 of 676.53 was almost 10% below the old November low. But was it really a new low? Bull and bear markets are coming fast and furious. Up and down 20% every few months. Is this time different?
I hope so.

Around 1916 School Children

school portrait around 1916 in South Dakota
town of Tyndall

Priorities And Triage

Santa Monica Blvd. near Bundy around 1950

Might it be a good idea to balance income and spending?
But if no one borrows what happens to people with money to lend?

Our economy is definitely out of balance. The biggest culprit appears to be government.

Government spending is way out of line with income. This is generally understood to be true.

In real life people must set priorities for the expenditure of time and energy and money etc.

You can't have everything you "want."

That is the new ethic, or old ethic, we must discover or remember.
We can be fine with what we have. But we must set limits on expenditures.
We need really good managers. People who know how to set priorities and work efficiently and economically.

It is really very simple.
"Don't throw good money after bad."

WINNERS AND LOSERS

"Think again of the insured house. Many institutions hold insurance on the house; on the other side are insurance companies and the like making an opposite bet. If the house is destroyed, one group of institutions wins and the other group loses. Considering all institutions together, no money was truly lost — it's what economists call a zero-sum game. In good times, risk hungry banks loved this game, but now they have become risk averse, and the game seems to have changed. So how can many of the banks simultaneously claim enormous swap losses with no bank claiming significant profit?
Here are two possibilities: either the vast majority of all swaps — not just AIG's — are held by investment banks, or a significant portion is held by other financial institutions like hedge funds." Ari J. Officer in Time Magazine

YES WE SHOULD FIND OUT WHO THE WINNERS ARE
YES WE SHOULD REGULATE THIS STUFF
YES NOTHING HAS REALLY BEEN LOST

Usually I am against changing the rules. This time the rules are corrupt and must be changed.

Around Los Angeles

People in front of Grauman's Chinese Theater. 3/14/09



"The Spirit of Los Angeles" Statue at "The Grove"
3/14/09

The Big Truth

God is not against anything.

Everything is fine.
Everything is good.
Very good!

We spring directly from the void.
Nothing causes anything else.
We are free.

All possibilities exist.
It is all spirit. It is all mind.

We are here to enjoy the plenitude.

Frontline Value Use Loss Energy

Once I was told that money is stored energy.
Money has the potential to buy things, to command labor.
People save money for retirement.
You work for money and then you stop working and live on your savings.
If you lose your savings, you will have less to spend in retirement.

What about a house.
You live in a house. The value of the house is that you live in it. How much does it really matter what the price tag on the house is?
It is said that a lot of wealth has been lost because of the decline in house prices. On the other hand a lot of wealth was created when house prices went up rapidly.

What has really been lost?

The houses are still there.

There is also a lot of talk about financial losses.
Those losses are suspect to me.
I believe the money was passed around or redistributed.

If someone bought an asset at a high price, someone else sold it to them. The seller had a gain. It is balanced.

Trading things does not really create wealth. It is an illusion.
You can lose or win, but it balances.

Real gains are like this.....
I plant a seed. It becomes a tree. I invent something useful. It makes life easier. I build something useful. I create something useful. Those are real gains.

From The Front

Went out to dinner last night. Restaurant was full. Saw many new cars in the parking lot.
Good economic news is trickling in. Obama starting to talk more optimistically.
Truth is, things are fantastic.
Opportunities abound.
The good guys are winning now.
The crooks are on the run.

Report From The Front

Really now, business is not like war. That is a crazy metaphor. Business is all about service. Business is about care. Business is about helping.

And I am happy to report that in my small business. In California, In Los Angeles County, In the city of Santa Monica.
MY NET INCOME IS UP FROM LAST YEAR>
In fact it is up a lot. This January and February compared with the same months in 2008 is UP 25%

UP 25%

HOW IS THAT POSSIBLE IN THIS SECOND GREAT DEPRESSION?

Somebody has not been telling the truth about things.

things are not that bad
we are used to lies
lies to get us into wars
lies to get us to do all sorts of things
fear to get us to do all sorts of things

truth is
things are really quite good

FOLLOW THE MONEY

Zachary Karabell on economic punditry

"And while I have always said what I believe, what I believe sometimes has been subtly shaped by who pays the bills."

Disneyland Was Busy

Guess what this is!

It is a picture of Dumbo's tail.
Disneyland was crowded. It was a Saturday. No sign of a recession.
Things are about ready to recover. Let's party.

Bill Mahar Questions Growth Ethic

http://www.youtube.com/watch?v=sVWbCNAq1G4

Above is a link to Bill Mahar show 3/6/09. He questions our growth ethic. Why must we always have more?

What we need is better distribution, ethical distribution, and responsible consumption. This requires education and thought and behaving like real human beings, not animals.

How Many?

How many bureaucrats does it take to change a light bulb?

They can’t do it.
It’s not in their job description.

More Of The Different

I still see almost no recession in my business. My business income is up substantially from a year ago.
Last summer I opined that I did not expect a recession because it just didn't feel like one to me.
I remembered 20% interest rates
I remembered the tech bubble and 9/11 on top of it.
I reembered the oil embargo and gas lines and the Nixon impeachment and resignation.
So I just could not see a problem.
Stocks a year ago were not unreasonably overvalued. Interest rates were being cut.
Even now. Things just don't seem as bad as I keep hearing.

So what does it mean?

Things have changed but people are slow to adjust.

The same old stuff doesn't work like it did.

New approach
New way
Most people are still working.

Most people are doing well.
A large minority is doing worse than usual.
But the percentage is still not that big.
Things are really not that bad. That is the truth.

People may feel bad because they lost money in stocks, or their house is worth less, but they weren't using that money. They didn't really need that money, so they invested it.

We still have more than we need.

Reality Is Seldom What We Expect

I still expect the markets to rally.

New lows are happening instead.

But I am still optimistic about the future.

I still expect a massive short covering rally.
I still expect a new bull market.
I even expect new highs in all the indexes!

I can be patient.
I will be patient.

A discouraging Word

I was trying to open my tenant's kitchen drain today when his new 46 inch high definition wide screen television was delivered. NICE TV!
But I wasn't having much luck with the drain. I think it needs the heavy duty electric snake. If you run a lot of water down the disposal, some water comes up in the other sink. That is not good.
But I did manage to improve the function. Water only comes up now if you have a lot of water in the sink.
I asked the tenant to keep an eye on it and see if it will suffice. And to let me know if it doesn't suffice and then I will take the next step.

But is any of this discouraging?

The world we see in the news is just one big funk. It seems everyone is losing a job and a home and going broke etc.

It can't really be that bad. Most people are working. More than 90% who want to work are working. That sounds pretty good.

I see lots of traffic everywhere and I see many new cars when I go out.
So something is still working.
My sister and her husband are visiting from Hawaii. They are staying in a hotel in Culver City. They are going out to restaurants. They are spending money.
So why be in a funk.
And yet I do feel discouraged. I have been a bull for years. I am riding the bull down and yet I want to be hopeful that recovery is just around the corner.
I still believe we will have a powerful rally soon. But what is soon?
Maybe 90 days would be soon.

Stimulating The Economy

Greedy Fools

Should greedy fools be punished?
Or should they be helped.

Why not help them? They are still your brothers and sisters.
Forget the past.
Forgive the mistakes.
This is a new day.
We can thrive together now.

BACK TO WORK

Money is a myth
The reality is people working and producing

But some people do more harm than good when they work!

If you need work
You will get it
If you are ready to serve
And ask a good price for your service

Don't be stubborn
Cut your price and get to work

What if? Nobody had any debt.

Or maybe just a world where nobody charges interest.
Isn't that Muslim law?
Imagine a world where you save money to buy expensive items.
How long would it take to save up for a house?
You could still sell shares so business could raise money selling shares.
A seller could still have an installment plan as long as there is no interest.

It might be a more peaceful economy.
Our tendency to overleverage causes periodic catastrophe.

Alternatively,
Regulations should be imposed to help people avoid overleverage.

NEW PENNY!

WHO CAN WE BLAME?

Who is it that is bankrupting our nation?

The medical establishment

The educational establisment

The housing establishment

The military establishment

The welfare establishment

The immigration establishment

The legal establishment

The food establishment

The transportation establishment

The financial establishment

The entertainment establishment

The travel establishment

Anybody else?

Health Insurance Seems Overpriced

We have a high deductible policy. Blue Shield California
Deductible is $4,800 Family, two adults, two teenagers

Our premiums are based partially on my wife's age. She is now 55 years old.

And our rates have gone up dramatically in the last few years.

This is our monthly rate

2005 $583
2006 $711
2007 $889
2008 $889
2009 $1329 That comes to $15,948 per year
Median income in the USA is around $50,000
Our premium is around 30% of median income
But if you include the big deductible it comes to 40% of the median income
This is really an outrage. Really!

Pretty shocking I think
Increase of 128% since 2005

SUCKS?

Leverage and Reason

My dad was pretty conservative about money. Frugal, thrifty, almost stingy, but also very generous. He didn't need much for himself so he could afford to be generous with his children.

Here is what he taught me about leverage.

To get going in business, when you are young, it is OK to borrow as much as you can. If things go against you and you go broke you can start over.

But as you get older the right amount of debt is 50% of your assests. If you have a business worth a million dollars your debt should be no more than half a million.

If the value of the business increases then you can borrow to expand more.
If the value of the business goes down you need to pay off debt.
Always avoid overleverage. That can lead to bankruptcy.

Finally, as you get older, pay down all your debts. By the time you are around retirement age you should have no debt at all.

so...50% that is prudent,
Who puts 50% down on a house? Hardly anybody.
Usually the first house you use maximum leverage, and you are young, so that is OK.
But the people who keep trading up or refinance and take cash out are
COURTING DISASTER

Greed
Fear

What else is there?

REASON

STILL A BULL

Nice rally today. S&P 500 closed at 869.
Next goal is 878, a recent high. We should take it out.
The recent high to beat is 944. That is another 9% up.
If we go through that it could trigger the short covering panic of all time.

Nowadays 9% happens in a few days, so the big jump could come very soon.

On the other hand, all we need is to stay above 804. We could see another sell-off, but 804 should hold.

And finally, the longer we stay above the old low, the more it looks like this bull is the real thing.

Killing The Goose

My late friend Walter Lutz always reminded me to not get greedy. He would say, "Don't kill the goose."
The context was raising prices. Raise prices too much and the customers go away.
That one principle has always worked well for me.
This year in my business looks to be another very good year. My prices are a bargain for people and I never lack customers.

The goose principle has other applications.

Government has a tendency to kill the goose with taxes and regulations.
Bloated government
Unresponsive government
Rude and overbearing government.

Government totally lives on private business and when government kills business it kills itself.

California is a good example right now. High taxes, hostile to business, big deficit. California looks to be bankrupt. Bankrupted by driving business away.

Little things add up.
I received a compliance order from the Santa Monica Fire Department.
I would like to appeal the order. So far, there seems to be no appeal process. The only thing you can do is talk to a higher up within the department. That is not an appeal process. I would expect a public hearing in front of an impartial board of citizens.
Yesterday I was speaking with a deputy Fire Marshall. She said no one has ever appealed.
Well! If there is no appeal process then how could anyone have ever appealed?

If I don't comply within 30 days I have commited a misdemeanor.

So overbearing government threatens me with fines and jail but gives me no recourse, no opportunity to appeal the order of a department.

Don't kill the goose I say.
I say! Don't kill the goose!

What Really Makes Prices Go Down?

SELLERS
Only a seller can sell. Sellers set the price by accepting offers. That is the bottom line on prices.

If I have something to sell, and I don't accept low offers, then maybe I don't sell, but neither do I set a low price.

Only a seller can set a low price.
And it isn't an auction. I am under no obligation to sell anything.
So why do sellers accept low prices?
Fear mostly

They hear stuff and it scares them and they say SELL!
Foolishness. Buyers can drive prices up.
Sellers can drive prices down.

That is why short selling can be so destructive.

Massive Historical Short Squeeze Is Coming

A lot of people have been doing well shorting stocks. They are about to get hurt badly.
They are expecting a trading range and will probably short agressively when the market gets up around 9000 again.
But this will not hold. The market is headed up at least to 10,000 and quite likely more.
These short sellers will be geting margin calls and they will be forced to cover. When they all try to cover at once the markets will be in a buying panic of historical proportions. Many shorts will be bankrupted.
HOLD ON TO YOUR HATS

One Of The Bad Guys

http://www.cnbc.com/id/28814840

What Environment?

I was just reading how hard it must be to make money in "this environment."
I guess they mean there is something wrong with "the economy."

So,
I am doing very well thank you.
And it is not because I am a short seller.

I have a small business in Los Angeles.

I can estimate my net income for this January is already 20% higher than last January.

So I can testify that business is GREAT!!!
The people not doing well are just having an attitude problem.

Let the bad apples fall and rot on the ground
Prune the dead wood
Don't listen to the crying of the foolish, the lazy, the crazy, the wicked, and the politicians who just crave power.

Take care of your own business and you will be fine.
Opportunites are excellent right now.
It is a prosperous world.

I wish the people doing well would shout it out from the rooftops.
I know I am not alone in my prosperity.

Mark To Market Has Caused The Crisis

If Banks Are Really Sound, Why Are Investors Scared?
By: Jeff Cox, CNBC.com 22 Jan 2009

Despite a seemingly never-ending stream of bad news about big losses, top banking experts say the industry as a whole is sound.

So why are so many people panicking?
For one thing, there are good reasons for fear. Banks are posting billions of dollars of losses and warning of more bad times ahead. There also is continued speculation that the government may have to intervene even more than it has to prevent some of the biggest banks from collapsing.
But what's really hurting banking stocks, the pros say, is the uncertainty over what the government may—or may not—do about the banking industry. Part of that, ironically, is whether the government will relax regulations that have forced banks to declare bigger losses than they might otherwise have incurred.
"We can fix this," said Bill Isaac, chairman of the Federal Deposit Insurance Corp from 1981-85. "We just need a coordinated policy on all fronts, including accounting and regulatory actions, that is clearly articulated to the world."
Without a clear legislative direction, investors have been abandoning banks in droves.
Titans of the industry, most notably Bank of America , appear at least according to stock-price movement, to be on the verge of collapse.
But to Isaac and other analysts, much of the damage is self-inflicted by a government that has hamstrung the sector with burdensome rules that don't reflect the state of affairs in banking.
Accounting rules that are forcing institutions to severely mark down assets and reserve regulations that restrict risk are wrecking balance sheets and spreading panic throughout both the industry and investors. On top of that are worries that the government may step in to nationalize banks, which would wipe out shareholder value.
Paramount among the fixes Isaac identified are changing the mark-to-market accounting rules, and assuring that banks have access to capital without the burden of strident loan-loss capital reserves.
While some have argued that loosening the rules could encourage more irresponsible lending from banks, Isaac said the government needs to set priorities.
"Don't worry about ideology now," he said. "Don't worry about systemic risk and moral hazard--now is not the time to worry about that stuff. Now is the time to get things under control. We can worry about moral hazard going forward."
Current FDIC Chair Sheila Bair said in an interview on CNBC that the government needs to take the proper steps, including capital injections, to restore investor faith.
"The share price issue is being driven by uncertainties about what the future will bring," she said, adding the fear is coming "from a balance sheet standpoint, which is why we're working on troubled asset relief to try to put an outer bound on what some of those losses could be on those troubled assets, to give the market confidence to try to stabilize the situation."
Bank of America in particular has been maligned despite its solid position in the global banking market, Isaac said. Investors have been ditching BofA shares since the company disclosed larger than expected losses realized from its takeover last year of Merrill Lynch.
"I believe that Bank of America has the most attractive banking franchise in the world," Isaac added. "I don't understand why people are getting all flustered."
One reason is likely the fear that widespread bank nationalizations would crush shareholders, including those invested in the sector through funds and pension plans.
A template for such a doomsday scenario would be the takeover of government-sponsored enterprises Fannie Mae , the mortgage giants who fell into precarious positions from their exposure to the subprime mortgage crisis. The government's position in the companies superseded those holding common stock, causing shares that traded a year ago in the $35 to $40 range to enter penny-stock status.
As the fear lingers that the government could inflict the same damage on other big banking names, convincing investors to buy stock is a tough sell.
"It's time for the government to make it clear that it's not going to do that. The shareholder has been punished enough," Isaac said. "Who are the shareholders of these banks? It's all of us who have 401(k)s and pension plans and the like."
"People don't invest in banking stocks because they're speculators," he added. "It's not like they're investing in dot-coms. The people who invest in bank stocks are looking for fairly steady growth and good dividends."
The government can get banks back to solid ground by making sure they're well-capitalized, and by implementing policies that are more than one-off events like rate cuts that provide little lasting relief, Bair said.
"We need a programmatic response," she said, later adding, "The whole purpose of all this is to get banks lending again."
But Isaac said the Securities and Exchange Commission has not done its part to quell the fear contagion through the market.
"I am deeply disappointed that we have not done anything to address mark-to-market accounting, which has destroyed billions of dollars in bank capital," he said. "The SEC just blithely goes along and doesn't get rid of that terrible accounting requirement that is wreaking havoc on our accounting system. The SEC is irresponsible in the extreme."

Big Boys Deserve Jail Time

How many crooks does it take to drive a company into the ground?

Merrill Lynch CEO Thain Spent $1.22 Million On Office
By: CNBC.com 22 Jan 2009

When John Thain became Merrill Lynch’s CEO in early 2008, he hired Michael S. Smith Design to revamp his office suite, spending approximately $1.22 million according to documents.

Additionally, documents showed that Thain signed off on the purchases personally, and that he used another $5,000 to pay the expenses Smith incurred in doing the work.
The following is a list of the items in his suite:
Area Rug $87,784
Mahogany Pedestal Table $25,713
19th Century Credenza $68,179
Pendant Light Furniture $19,751
4 Pairs of Curtains $28,091
Pair of Guest Chairs $87,784
George IV Chair $18,468
6 Wall Sconces $2,741
Parchment Waste Can $1,405
Roman Shade Fabric $10,967
Roman Shades $7,315
Coffee Table $5,852
Commode on Legs $35,115
Thain also hired Smith, whose celebrity client list include Steven Spielberg, Michelle Pfeiffer, Cindy Crawford and Sir Evelyn de Rothschild, to design his Manhattan apartment at 740 Park Avenue, and his 14 bedroom home in Rye, NY.
Smith is also Michelle Obama’s interior designer and the White House paid him $100,000 for his services.
Thain also paid his driver $230,000 for one years work, which included the driver's $85,000 salary and bonus of $18,000, and another $128,000 in over-time pay, documents show. Drivers of top executives are often paid about half that amount.
RELATED LINKS
Current DateTime: 03:58:22 22 Jan 2009LinksList Documentid: 28794026
Thain's Future at BofA To Be Decided
Merrill's Thain Era Losses
Bank Problems Seen Spreading
Thain was appointed as Merrill’s CEO as the firm suffered massive losses from investments tied to the depressed real estate market under his predecessor Stan O'Neal, who was ousted in late 2007.
Those losses continued through 2008, forcing Thain and his management team to sell the brokerage firm to Bank of America in mid September or face near certain liquidation as investors fearing further losses began pulling lines of credit and other financing.

Things Not So Bad

Nation's Banks Are Well-Capitalized: FDIC's Bair
Wednesday January 21, 2009, 12:00 pm EST
Yahoo! Buzz
Print
The nation's banking system remains generally sound despite the doom and gloom that has dominated some of its biggest names, FDIC Chairman Sheila Bair said Wednesday.
"It was a tough quarter. We knew it was going to be a tough quarter. Banks have some real challenges," Bair said during a CNBC interview. "But I think it needs to be emphasized and re-emphasized these banks are solvent, they're well-capitalized overwhelmingly, and that really is what creditors and depositors seem to be focusing on right now."
Moreover, Bair rejected predictions in some areas that the bank industry as a whole is facing ruin, though she did acknowledge problems. She said 98 percent of all banks are well-capitalized, representing 99 percent of all assets.
"There is a fear factor," she said. "You're seeing that in the stock market, you're seeing that in other places. People don't know how bad the economy is going to get, what the outer limit on these losses could be."
"This is why we need a Troubled Asset Relief Program to get banks lending again so we get out of this self-reinforcing cycle of a deteriorating economy."

Topanga, California

January 2009

Two Theories

Many people believe that energy prices got very high last year because of price manipulation by speculators.

Here is one piece of evidence you don't usually hear.

World energy consumption from 1980 to 2005 increased by
63.3%
63.3%
That is a big increase. You might expect the price to go up in that situation.

I am confident that the optimists will ultimately prevail. In fact, they are always prevailing.
Most people are doing very well right now. That is the truth.
The falsehood is to say that we are in desperate times. The falsehood is to say that this is a bad economy. The falsehood is to say that things are going to get worse.
Each of us makes our own reality.
Plant your seeds.
Take care of them.
Have a good harvest.

Deal honestly and your reward will be prosperity.
Children know the score.
They say, "Cheaters never prosper."

DEAR MISTER OBAMA

Please drop these words from your vacabulary

FIGHT

CRISIS

Life is not a fight.
Obstacles are not crises.

No more fighting please.

Just Between Jobs

Words are important.
Words create reality.

11 million unemployed

11 million out of work

11 million looking for work

11 million between jobs

Between jobs sounds best to me.

How many people are working?
143 million
143,000,000
that's a lot of jobs.

What are they all doing? What are they making? How are they helping?

Nobody in my household has a job.
Haven't had jobs in years.
But we have income.
One housewife
Two students
One retired guy. But I do take care of some property.

We aren't looking.
If we were looking, even though we have income, we would be called
unemployed.

I'm not unemployed
I am a student
I am retired
I am just rich.
I am between jobs.
I am looking for a job.

A good job will come soon.

Who Wins When Most Lose?

Who are the big short sellers?
Who owned all the credit default swaps that wrecked AIG?
Why are things being run for the benefit of the short sellers?

Not much is being reported.

One German billionaire killed himself after losing a lot in a short squeeze on Volkswagon.

How many people are working to destroy the economy and who are they?

Will it ever come out?

Mortgage Help Would Be Cheap

What might it cost to help out all the homeowners facing foreclosure?

Suppose there are 5 million needing help

Suppose on average $1000 a month would let them keep the home.

This would cost $1000 times 5 million per month

That is $5 billion a month

Comes to $60 billion a year.

Could that be right? Only $60 billion?
But look at what has been lost so far. Trillions. TRILLIONS!

It does not make sense.
Stop the foreclosures. That is the cheap and easy solution.
Don't give the banks 350 billion dollars.
Just give the debtors enough to make their payments.

$6,200,000,000 Aircraft Carrier

1oth and final Nimitz-class nuclear aircraft carrier coommissioned Jan. 10, 2009. USS George H.W. Bush.

4.5 acre ship
cost $6.2 BILLION

I wonder what it costs to run it?
How much does it cost to maintain it?
And what use is it?

TRUTH

Mark Twain:
In religion and politics people's beliefs and convictions are in almost every case gotten at second-hand, and without examination, from authorities who have not themselves examined the questions at issue but have taken them at second-hand from other non-examiners, whose opinions about them were not worth a brass farthing.
Autobiography, 1959


I would like more facts and fewer opinions.
Never blame the economy. Always look at yourself. Give good service and charge a reasonable rate and you will always be fully employed.

THE FUTURE

"The future is of our making." Robert Shiller

DEFLATION PLUS PIGHEADEDNESS

Prices are falling
Oil
Real estate
most commodities

deflation

to clear your inventory, whatever it is, lower your price to the market

this goes for jobs

but people hate to take less
so they are slow to cut the price
and that leads to unemployment of capital and labor and resources

everything else is just noise, all the rhetoric and posturing

if you want to sell something, lower your price
if you still can't sell
find another business

TOXIC RHETORIC

Mr. Obama is still talking negative about things.
Let us wake up and know the truth of abundance. Things are great.
Just read this toxic stuff below. It is not the truth. The truth is that we each and all have more than we need.



"If nothing is done, this recession could linger for years. The unemployment rate could reach double digits," he said.
"For every day we wait or point fingers or drag our feet, more Americans will lose their jobs. More families will lose their savings. More dreams will be deferred and denied. And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse," he said.
Obama laid the groundwork for urgent action on his "American Recovery and Reinvestment Plan," a plan he says will save or create more than 3 million jobs and invest in health care, energy and education, among other priorities.

WE DO NOT NEED MORE STIMULATION
I WOULD LIKE LESS
I WOULD LIKE TO BE LEFT IN PEACE TO RELAX AND ENJOY THE TOTAL BEAUTY OF CREATION

WE CAN ALL BE HAPPY AND FULFILLED RIGHT NOW.
WE DON'T NEED TO WAIT FOR SALVATION.

A Real Bull?

The low in the S&P 500 was November 20, 2008.

752.44

Since then we have seen higher highs and lower lows.
8 more trading days and the bull will be two months old.

Trading patterns are different.
Remember when the market would go down 300 points for days at a time and then go up 900? That was a rally in a bear market.

Now we are seeing the opposite.
The market goes up gradually and then there is a big selloff.
Yesterday Jan. 7 was a big selloff. These are bull market selloffs.
The trend is up. The year should be up. The bull should have legs.

Is it safe again to buy the dips?

Why Prices Fluctuate

It is a mystery and yet it isn't.

Oil got awfully high before dropping.
It got high because demand was increasing. It dropped because supply increased.

The high price signalled producers to get more oil to market. One magical day they got a little more than was needed. The price started to drop.

And there is a lag. It takes a while to get oil on line. Same thing for houses and other buildings. So the supply keeps going up even after prices start falling. Ultimately everything adjusts. But it always overshoots in both directions.
The pundits have concentrated on demand in the analysis of oil prices. They have said very little about the increasing supply.

BULL MARKET

Market has moved up more than 20% from lows. But people refuse to call it a bull market.
What gives?
Just like the recession.
Definitions don't count. It is all fuzzy stuff decided by various shadowy figures.

I actually measure a 24% increase in the S&P 500 just looking at closing prices. If you look at absolute highs and lows the move has been 26% from the bottom.

What number would be a new bear?
S&P 500 close below 747.8 would be a new bear market.
Today we closed at 906.65, pretty far above 747.8.
A correction could take us to 841.

OUCH!

Dec. 31 (Bloomberg) -- It has been a year of record misery: the largest bankruptcy, bank failure and Ponzi scheme in U.S. history; $720 billion in writedowns and losses by financial institutions; $30.1 trillion in market valuation wiped out.
The biggest loss and the hardest thing to recover, though, may be something that can’t be precisely measured -- confidence in the markets and the firms that rely on them.
“The wholesale funding model lost its credibility,” said David Hendler, senior analyst at New York-based CreditSights Inc. “That started the semi-nationalization of funding in the financial markets. It’s a real chink in the armor of capitalism as supposedly the best process for allocating capital. The government is now deciding who gets access to capital.”
For Paul DeRosa, a principal of Mount Lucas Management Corp., a $1 billion hedge fund in Princeton, New Jersey, most unnerving was that the credit crisis revived something that, like the bubonic plague, was supposed to be a relic of the past.
“We had what was for all intents and purposes a systemic bank run for the first time in 70 years,” said DeRosa, whose fund is up 25 percent this year. “This ended our belief that financial panics were a thing of the past. That’s why this is a transcendent event.”
The price tag has been transcendent, too. Global stock markets lost about half of their value in 2008, or $30.1 trillion dollars. In the U.S., $7.2 trillion of shareholder value was wiped off the books, as the Standard & Poor’s 500 Index fell 39 percent through Dec. 30 and the Nasdaq Composite Index dropped 42 percent.

What was really lost?
Electrons? Marks on papaer?
All the real wealth is still here
People
Buildings
Machines
And the sytems that are gone, should be gone
They were wasting resources with manipulation

We will all be stronger and better off for what has happened.

"Let's get to work!"

PANIC OF 2008

Happy 2009!
Glad 2008 is behind us.

What really caused the panic of 2008.
We are told what to believe.

"House prices rose too high, driven by irresponsible lending and borrowing. The bubble burst, pulling down consumer spending and economies around the world." The Christian Science Monitor 12/31/08

But that is just the story we are told.
If you look beneath you see something different.
Things were going along well until the actual panic hit in September.
The panic was set off by the US treasury and remarks from Paulson.

But even deeper causes are behind the mess.

The rules were changed.
The rules were changed!

Two important rules were changed and that changed everything.
As if rules don't matter?!

Financial institutions were required to mark to market illiquid assets resulting in technical insolvencies.

Short sellers were able to systematically drive companies down because of the removal of the uptick rule in short selling.

Those two changes are what really led to the panic of 2008.
But you won't hear that from the big boys who call the shots.