Quantitative easing will wait

The equity market is selling off at the moment as Fed Chairman Bernanke's comments today seemed to indicate that further quantitative easing(or open market operations to purchase securities) are unlikely in the near term. The market had apparently been expecting some additional stimulus to further support the economy's ongoing sluggish rebound from the dire days of two and three years ago.

The take on this here is that the Fed is saving its ammo in case there is some exogenous event that severely rattles the markets. Why spend their intellectual and economic capital now and be left with empty pockets when the market support is urgently needed?

What are those exogenous events? Does a page of my to-do list pad have enough space to list them all is a better question? The highlights of possible troubling events beyond our borders include: the Iran/Israel equation; the Pakistan question, both internal politics there and the edgy relationship with India; the North Korea wild card, still there despite their commitments today, have they ever been true to their word; the European economic challenge including the inevitable failure of Greece and the stress in other countries and their banking systems that could in the worst case lead to a credit freeze up across Euroland that would definitely have an impact here as well; Syria and the splintering of factions across the Middle East in a way that has the potential, however remote, to make the 1860's Civil War in the U.S. look tame; and last but not least the property bubble and inequality recognition in China as they approach a change in their leadership/dictatorship.

Is that enough? Gee, there was no mention of Venezuela, Nigeria, Argentina, or the bad actor Russia(if there is ever a creative film about Russia today Daniel Craig, hands down, should be chosen to play Putin).

So the Fed will wait to do more. It is probably right to do so. We would want more stimulus now to help chop those unemployment numbers further, and some may want it for political purposes as well, but our global picture is murky and troublesome at best. The Fed Chairman must be wise enough to look beyond our borders.

Equity markets stay strong - red, caution, or green now?

Equity markets continue to move up. Many suggest caution at this point. That's not unreasonable as it seems like we have been here before, only to see a correction. That does not mean that equity markets are overvalued. Generally speaking, they are not by most historic measures. What it does mean is that as investors build gains, a normal ebb and flow will eventually cause them to take gains and create market edginess for fund management reasons rather than valuation reasons.

Here in ENS land, it's a great relief to say that all but one of the modest family accounts managed are above, some well above, where they were in 2007. This kind of relief is telling. Wouldn't one normally expect that over a five year period that accounts would show some material progress. Happiness is relative.

The years 2008 and 2009(or more specifically August 2008 to May 2009) were a disaster for equities and many other securities as we all know. To have recovered so well for sticking in there feels like a gift, when actually, looked at it critically, we have made little progress when compared to 2007. State retirement funds, corporate pension funds, many mutual funds, and individuals had holes blown in their portfolios and expectations.

Expectations are the issue. With the Fed zero interest rate policy, risk asset investing has been forced up and over the last six months we have seen the result in the equity market. Expectations, however, remain tentative and many retail investors have stayed on the sideline. One can still hear some people speak half-jokingly about their 401K now being a 201K. If that's true, they were scared off to the sidelines and the chalk dust has never again tarnished their shoes.

Limited expectations will force a correction one could reasonably think, or in turn it could motivate further buying as institutional investors know that the skeptical will eventually be forced by herd mentality to jump in with both feet. That will be the top for the near term, and that is impossible to call.

Overall portfolio diversification is a good thing, but at the moment it seems difficult to rebalance and draw down equities. I tend to overstay my welcome by trusting that the market will value securities properly and that business managers who have done well will continue to do so.

How naive is that?

A pleasant Sunday morning in Chinatown

We went into Chinatown early this morning to visit K's invalid parents and their caretakers. Bright sun and a cold breeze greeted us as we ascended from the 1 train line to Canal Street.

Inevitably our many trips to this area are, apart from the visit, focused on food. As we walked the 8 blocks to her parent's apartment tower, I stopped in a long standing Chinese bakery for coffee and pork buns, the buns to share with the caretakers. Chinatown coffee is automatically mixed with sugar and milk unless one intervenes, and I never bother. When in Rome...

The buns were terrific, not gooey as some are but chunks of spicy pork mixed with onion. The coffee was cloying but did have the requisite caffeine.

The hour long visit went well and the depressing aspects are offset by whatever recognition comes at times. Then we were out to Mott Street, me back to Big Wong to get some food to take home and Kathy to a tea shop to buy a gift for a co-worker who has been especially helpful to her recently.

The Big Wong agenda today was Singapore Chow Mai Fun with spicy curry seasoning, Spare Ribs in Black Bean Sauce over Rice, Ma Pa Tofu or fried bean curd sauteed with minced pork, pickled vegetable, and red pepper, and two spring rolls. All of this will be sampled over several days and all of it is GOOD. A fascinating aspect of Big Wong is that they seem to just make up a price to charge that bears no relationship to the costs listed on the menu. It is always significantly lower. They seem to know me by now. The listed price would have been $34. Somehow they came up with $26.50. I never disagree.

Walking back to the subway, we picked up some Chinese vegetable from a street vendor. That's the only name that I know for this stalky leafy green stuff that cooked with garlic is delicious. Then as we hit West Broadway and Canal we walked half a block into Soho to buy a sandwich and espresso at Salume, a wonderful northern Italian spot. My sandwich on crusty baguette type bread was tomato, mozzarella, and proscuito with olive oil. The espresso is a game changer.

The LIRR had us back home by 1pm. Accomplishments early in the day are a good feeling.

Ode to Skin Cancer - melody to be imagined, a slow country swing

Oh Hello Efudex
My faithful RX
Burning that cancer off my face
Leaving bright red marks in their place
Application is oh so easy
Helping to avoid a biopsy
Which on the face can cause significant bleeds
And that's something no one needs
Oh hello Efudex
My faithful RX
May you always cure
And then I can be sure
That the Doc won't carve up my face
And leave scars in their place
But even that has an answer
Not one that my main Doc can offer
That's plastic surgery and many tiny stitches
Something that takes lots of time and then pulls and itches
Oh hello Efudex
My faithful RX
Let's get this behind us one more time
And put an end to this silly rhyme
Can we bring it on home now
To past wonderful Southern summers that explain how
A shirtless little boy was outside through thick and thin
Turning a cocoa brown over a very fair skin.


Now I am an annuity for my dermatologist for over 30 years, longer than most annuities on the market. Everything above has been experienced, basil cell, squama cell, and melanoma, and plastic surgery to remove one dangerously close to my left eye. Today I also found out that I once again have Grover's disease, which cheerfully can only remind me of the Muppets despite the itchy rash on my back and chest. I sometimes wonder if the protective layer of the atmosphere that shielded us from the worst of the sun's rays was already beginning to break down as early as the 1950's. Who knows.

At least I have a great dermatologist, a gentleman and a scholar as they say, and a noted artist and film maker as well, with much of his work devoted to the preservation of the history of Judaism in Prague.

Last night's debate - some expected friction but eventually tiresome

Last night's Republican debate followed the expected script, more or less, and Santorum received the most attention from other participants, much of it combative.
Interesting in spurts, the debate eventually began to seem like a television series that has gone on for one or two episodes too long.

Some quick thoughts on the candidates:

---Gingrich described himself as cheerful, and that he was. He made his usual points clearly but was not strident or grandiose at any point. His plan must be focused on Super Tuesday and its many Southern states, without any lingering hangover from this debate.

---Romney was well prepared and on the Santorum attack. As expected, he did not take any risks and made sure his comments stayed on the right, even if not right.
The big look into his soul(if George Bush can do it why not me) was when the candidates were asked if there was one main misperception that voters had about them that they wanted to point out. Romney ignored the question and went on with his usual self promotion, even sparring unpleasantly with the moderator when asked again to respond to the question.

That was eye-opening to me as Romney has often reminded me of a top executive that I had to work with in one of the many iterations of my employer. He looked to be in perfect shape and was always sharp looking with his hair just right Wall Street. Despite being socially awkward and out of touch with normal reality, he had done well with the help of consultants and image makers. One of his traits was that he could never, absolutely never, be wrong or have any flaw. He was somewhat delusional and dense but he had no sense of that. If someone disagreed with him, it merely meant that they didn't have the capacity to understand him. He could be relentless in his self promotion and vicious if it did not work.

While Romney is presumably smarter than the man that I refer to, this encounter showed the same characteristic. He could think of no misperception. How could there be one?

---Santorum looked as if he wished he had a fly swatter and could get rid of Ron Paul. It is almost impossible to describe the pained mocking smile he wore as Paul took him to task for inconsistencies in his story line. Romney would have been ok, but this was playing a relentless two on one. Other than that, Santorum toned down some of his more outrageous comments of recent weeks, and those were the types of comments that Romney and Gingrich really did not want to get into anyway.

---Paul was his usual Constitution supporting self, as he interprets it. He did focus on Santorum because, one could think, Santorum is the opposite of a libertarian. He wants the government to not intervene in welfare or business or education but he does unequivocally want the government to get involved in the personal issues of our lives.

It does seem somehow that Dr. Paul has aged somewhat before our eyes as this campaign goes on. His comments were mostly the routine Paul that one would expect rather than some thoughtful unpredictable answers.

That's it. Now to the voting and who knows if there will be more debates?

Tonight's Republican debate

In 1962 the satircal play "Beyond the Fringe", written and performed primarily by Peter Cook and Dudley Moore, was a sensation in London and then New York. While Rick Santorum is trying to take us back to that period, or even earlier, his effort is unfortunately not intended to be satire. That said, the phrase "beyond the fringe" does seem to be an apt description of Santorum's blossoming viewpoints. Conservative as a label does not do these ideas justice, libertarian definitely not, retrograde maybe, fascist in a stretch. Let's all rally around the Catholic Fascist Retrograde Party, the CFRP. Get out the confetti.

Tonight's debate should be a corker for those who have followed them, the ongoing soap opera or immorality play. There's no need here to chronicle all of the outrageous comments that Santorum has been gravitating toward now that he has momentum. There are too many to keep up with. Analyzing the fairly transparent subliminal messages that he is sending to his "base" is a depressing exercise.

The challenge for the other candidates is to confront him without alienating the muddled thinking part of the Republican party that supports him. Could Romney possibly risk being less conservative than Santorum on any issue. Gingrich probably will and Paul will say anything he wants.

At the last debate written about here, it was noted that Santorum's head seemed to be about to explode. I hope that there are doctors in the audience. There's one on the panel at least but he might be hit by debris.

Knicks team chemistry at risk

After two weeks of glorious team basketball with Jeremy Lin at point guard, the Knicks have added two self-centered glory seekers to their line up.

Baron Davis finally suited up last night as a Knick after recovering from a back injury. A former NBA all-star, Davis did everything a hot dog would do to get attention. He passed behind his back, dribbled behind his back, all for no value other than to showcase his skills. One dribble behind his back too many cost the Knicks a last second three pointer in the second quarter as he took more time than a simple quick pass would have. He had an airball on a three pointer and made one, after which he did an arrogant little gesture. He will be a distraction.

J.R. Smith is a talented player with a troubled history, on and off the court. In two games it is clear that if he gets his hands on the ball he is shooting it as soon as possible. He has no concept of the team, and apparently he never has. He will be a loser.

As an aside, Carmelo Anthony was back and had a weak performance after being out with injuries for the last two weeks. No problems there from this perspective. He will fit in with the team concept because he really wants to win and he wants the respect of Stoudamire and Chandler.

Who is running Syria

The former London opthamologist Bashar al-Assad does not give the appearance of being an assertive or strong leader. Maybe it's the lack of a chin that influences my opinion, unfair as that may be. Maybe it's the scripted nature of any presentation that has been seen and the lack of real passion with which it is delivered. Apparently, from various reports of experienced Middle East hands, behind what is observed is, in fact, a weak leader.

From what is read here, Assad's father, Hafez al-Assad, the brutal dictator for 29 years until his death in 2000, integrated the security, military, and the Assad government into one operation. That's different from Egypt, as an example, where the military was a stand alone force that the political leaders, however dictatorial, were required to negotiate with and placate. That suggests that senior officials in the security and military in Syria are in charge of the carnage that is going on in the same manner that the father would have approached the situation.

When Bashar al-Assad became the leader of Syria at age 35, he was seen as a more liberal force that would open up the society relative to his father's approach. Within a year of taking power, that hope was just a hope. In hindsight, he was perhaps a figurehead from the start, and once viewed in that way it's possible to become a perennial doormat.

Who is really in charge of this tragic situation in Syria. Is it simply a group trained under the father that are years older and more experienced than the current Assad, and have a group-think mentality about how this should or must be approached. Several days ago there was an interview with a government spokesperson, very well dressed, perfect English, in his sixties I would guess, who emphatically and repeatedly denied that the government was shelling Homs. As a sidebar, the British television network showed tanks shelling Homs as the interview played.

The spokesperson reminded me of Tariq Aziz, the man who played the same role for Saddam Hussein. He was hanged, but at the time he was the debonair spokesperson with perfect English who with a straight face denied anything untoward that was said about his grotesque dictator leader.

That leads me to think that the group leading Syria does not care in the least what the world thinks, what their Arab neighbors think, or what many of the people of Syria think. They will press on and on. Bashir al-Assad may have no power to do anything about this, and after 11 years as leader he may well support it wholeheartedly even if it could go on without him. At this point, where would he go.

"Old friends"

Yesterday I met up with some old friends that I had not seen in five years. We talked non-stop for a couple of hours over coffee, tea, and sweets at the Cafe Fledermaus in the Neu Galleries on 5th near the Metropolitan Museum.

As I thought about our nice afternoon get-together, the phrase "old friends" is something that came to mind with some reticence. Forever in my vernacular, "old friends" meant people that I have known and kept in touch with for a long time. Now, from a different perspective, could it be that I am an old friend meeting with old friends and the meaning could suggest that we are actually old.

When I was a child and into my twenties for sure, someone in their sixties was age-wise viewed as old. Now I am unwilling to give into that designation for myself or for my friends. I think that the better choice from now on will be "long time friends" and avoiding that word old is a good idea.

While we did compare balky right knees and laughed about planning for our "golden years", our energy was not old. As to the time we are in, one of my friends commented, with a penetratingly pleasant smile, that these are our "golden years" -- an interesting thought that made me pause to think about what's eventually ahead.

That thought was quashed as quickly as possible by a bite of Viennese apricot chocolate cake with whipped cream.

Shopping for a car -- a personal view

We need another car and it's my mission of the month to buy one. It's not so simple. There are so many variables, so many things to consider, some old, some new.

Here's the situation. First, we have four drivers and two cars. That could be called one and a half cars since one of them just had its 11th birthday, has over 100,000 miles on it, and has a very firm ride. No one likes it but me and the young adults will drive it only out of dire necessity. My wife drives it frequently but with a certain degree of anxiety. Second, while one young adult is at college and one lives in New York City, when they are here or when they take a trip, they take a car whenever they need it and this is somehow not a subject for discussion. We like them. Car number two is nearing six years old and while in great shape and fun to drive, it is small and is no spring chicken.

So the hunt for a new car has begun. From showroom to showroom I go. Here are the variables and issues that go through my mind:

GAS CONSUMPTION AND THE ENVIRONMENT - this was not on my mind at any time in the past when purchasing a car. In fact, while being aware of gas mileage, I always looked for powerful cars. The rationale was that it they were much safer to drive on New York expressways, getting on and off ramps, and changing lanes. That's true, but the fact is that I really like them. Yesterday in car number two, in leaving a KFC parking lot that was conveniently located near a car dealership that I was visiting, I needed to take a left turn across three lanes of traffic, no stoplight coordinating, on a road with a 50 mile an hour speed limit. I waited, waited, saw the opening and hit the gas. Purchased with my old mentality, the car crossed the lanes like a rocket and I was safe. I was also happy.

Now, however, looking at cars from that perspective, I feel like the E-trade baby when he says "it seems like that kind of behavior is frowned upon in this establishment." The thought leader on this is my older daughter who is very intelligent, strongly opinionated, and judgmental(I have no idea where that came from). Thrift on gas and thoughts about the environment are issues that I now need to keep in mind, whether to oblige or get around them.

SIZE - Of course the models that have the best gas mileage are often little tin cans that one would not choose to drive on major expressways in this area, if that one is me. More importantly, the hybrids seem to come two ways - in small cars that I do not fit into and in big cars that are incredibly expensive. I sat in a small Lexus hybrid yesterday which of course seemed relatively nice, but with the seat all the way down my sight line was into the visor(I am about 6'3" tall). I looked at big hybrids but did not even bother to get in the Lexus 600 or the Infiniti M after looking at the sticker. Even those small hybrids that manage to have a sight line that allows road vision are not big enough to be comfortable in on a long trip or to go pick up your kid's college stuff.

SHOWROOM - Showrooms are particularly dangerous places. Everything looks out of perspective. "When It's Strange" comes to mind. I am following the policy of going to showrooms with absolutely no possibility of making any immediate commitment. Two days ago visiting an Acura showroom, there was this Special Edition TSX that was really tricked out nicely and "what a beauty" was my thought. I sat in it, talked with the salesman about it, and agreed that I should probably come for a test ride. After leaving, I was less than a mile away from the dealership when it hit me with absolute certainty that the car was far too small.

My dear departed father was the opposite, which since I am genetically related of course is a reason that I try to be cautious. Here's an example. In 1960, when I was 11, on a Saturday morning when he was particularly upbeat, he announced that we would have shrimp cocktail that night, a special deal for us, a splurge. Several hours later he came back driving a giant new lime green Ford with fins, three on column, and no radio. He had gone into the showroom, traded in our beloved 1953 Chevy, and came home with a surprise. Such was the case with every car he ever bought. It is unclear whether any salesmen were ever injured trying to get to him first when he walked in.

While there are more stories that are humorous at this point, I must remember that one day when out of nowhere he drove home in a 1950's vintage Triumph Herald convertible that he had picked up for $400 at a used car lot. I was 16 at the time and that was a great day.

IS IT UNIQUE IN SOME WAY - this is one of the qualities that perhaps irrationally is attractive. A car will stay with us for a long time. Shouldn't it have some quality that allows one to identify it in a parking lot without checking for college stickers or license plate numbers. That's what got me excited about the Acura that was too little. I guess that's what the culture of wheel rims is about but I'm looking for something else and will know it when I see it.

TEST RIDES - I am trying to avoid test rides at this point while still being polite. Test rides can be extremely valuable in making a final decision but they can be a big waste of time if done indiscriminately. A test ride was pretty much forced on me at the Volvo dealership yesterday. I liked the salesman, my age, originally from Montreal, had lived in the Piedmont working the textile business etc. Almost immediately as the drive began I knew it was a waste of time. He kept up a constant patter of "don't you like this" type of stuff and I tried to politely answer until we were back safely in the lot, when I was honest - "too much torque pull, loosey goosey steering, and a suspension that Ford during their ownership must have taken from the Taurus, it no longer feels like a European car." From now on I will only take test rides when certainty of interest is clear.

SALESMEN - For the most part, salesmen(or women) are one of the biggest obstacles to buying a car. Most are fairly transparent and only mildly annoying, and they are just trying to make a salary for themselves and their family. A few can be terribly obnoxious and then there are are some, the really dangerous ones, that are actually charming, expert at what they do, and ready to take advantage of any misstep.

At both the Infiniti and Honda dealerships in our immediate town, a sales manager at the former and a salesman at the latter, treated me in such a patronizing way that I broke off the conversations and walked out saying "I don't feel comfortable here". The Infiniti sales manager was a big tall oaf with a crewcut and he kept putting his hand on my back and starting off sentences with "Don't you know that..." as in "Don't you even know that..." I think that perhaps the reason for these receptions in my town is that I don't dress up to go car shopping. I just wear my daily uniform of jeans, casual shirts, and outdoors wear jackets, not even all new stuff.

PRICE - this an important variable not only in the present but also in the future. Feeling as if you've overpaid is one of those things that sticks around. That's one aspect of price. The other that is always in my mind is marginal cost. In other words, if buying one car that seems attractive and is x price, it could be compared to a more attractive car at a higher y price, and that extra amount, the marginal cost, is all that I am really paying for the better car. How's that for expert rationalization.

Here's the origin of that supposed lesson. In the third car purchase of my life in 1975, I needed to trade in a functional, no fun, and balky Ford Maverick for something better. I ended up buying a sporty little Toyota Celica, five speed stick, not a bad motor, and much better quality and more fun than what I had been driving. The price was $3200, money that was mostly borrowed. Good for me right, but for $4300 I could have bought a BMW 2002 that would have been so much more fun, had so much more resale value, and lasted for at least 15 years. The money was all borrowed anyway, and I could have found a way to make it work with some thoughtful stretching out of my limited budget. That choice that I made came to be regretted often.

GOLDEN YEARS - Whenever purchasing cars in the past, I was either gainfully employed or doing well enough with some annuity investments and the market headwinds at my back. I was also not in my sixties. Now any decision is intertwined with long term thoughts of savings adequacy, the cost of supplementing the incomes of young adults, three more years of college for one, and everything the Golden Years entail.

Having worked in financial services for 24 years, the events of 2008/2009 didn't exactly surprise me, but the severity of the event was alarming. Timing is everything my bones said to me. This kind of stuff, dot com bubble popping, '98 LTCM precipatated credit and market near freeze up, '90-'92 recession, '87 market crash, all of them can be put much more into perspective when one has an ongoing job that is producing new non investment related money. This cannot help but be in my mind as I make a decision. Not to be profligate but still invest wisely in a long term asset that we like, that's the goal. Can I restrain myself and do that.

Anyone who has stuck with this for this entire personal self-analysis on car buying is to be congratulated. As they say in some places, it's been a big help to me.

Ancestry.com stock implodes - who knew what and when

Ancestry.com reported earnings and gave forward looking guidance after the market close yesterday that led the stock to fall 17% today from roughly $28 to $23. Starting the week at $32 the stock began to sell off on Monday with double normal trading volumes and dropped to $28 by the end of trading Tuesday. On Wednesday trading volumes stayed high but retail(people like me but not me) must have come in and offset the institutional sellers.

There was no news on the company during those days, except for one of those unheralded brokerage firms upgrading the firm to a buy. With no news and significant volumes and stock price declines ahead of earnings, this was worthy of attention.

There were two reasons for this that one could consider. Reason one - an institution or several institutions with considerable gains were simply securing those gains ahead of earnings, given that there always can be surprises. Reason two - someone somehow had an inkling of what the earnings and guidance might contain.

With a gain in the stock concocted by buying too high early in 2011 and more than doubling the bet really low in late 2011, I considered the meaning of these pre-earnings release trades. If reason one was the right clue, I had no information and could act or wait and see as always. If reason two was the right clue, I should run for the hills.

I chose door number one. Now I have a loss in my position.

The reason that I own Ancestry.com is that the story is, I think, compelling and the management team looked exceptional when I bought in. In fact, the quarterly earnings reported yesterday evening were slightly ahead of analyst estimates as were revenues. There was a problem that can be quantified. The revenue outlook for coming quarters was not robust, but it was within the lower part of the range of 2012 projections by analysts. There was a problem that cannot be quantified from this perspective and that is the surprise that one of their key long time managers resigned and is now a "senior advisor", the kind of thing that happens when someone is gracefully fired, if there is such a thing as that.

If today's stock collapse has only to do with the numbers and the company maintains its dominating position in this esoteric area, then the idea would be to hold on and give it some time. The stock should come back. After all, this small and low capital intensive business has no long term debt and $311 million in shareholder's equity.

If today's stock collapse relates to an unraveling of the company's core management team, that's an ongoing problem. As said, this is not a financially capital intensive business, but it is an intensely human capital business. It's built on intelligence and creativity.

Which door does one choose this time?

It would be interesting to know where the selling was coming from earlier in the week and the rationale on which it was based. That's the SEC's job and the soonest that I will even be able to make a guess will be when the May 15th 13F filing is released. Oh well, just curiosity at this point, and a bit annoying.

One more thing about Jeremy Lin

What could be added to all that has been written about Jeremy Lin in the past eight days. Here's one that catches our attention.

Watching parts of every game here, this observation stands out almost as much as his clutch shooting and daredevil acrobatic drives to the basket. When Coach Mike D'Antoni calls a timeout and the camera focuses in, there are times when D'Antoni makes some comments and then Lin takes over, intensely talking to his teammates circled around. On the floor it's the same. Last night when the Raptors had a half second to throw up a three on a final play, it was Lin on the floor who was seemingly instructing his team mates circled around him as he pointed out where everyone should be.

Six games as a starter and he seems to be the leader of the team. Some great players, on defense and offense, have spectacular careers yet never take on or are given that role.

Let's see how long this can continue. Obviously the streak can't continue. This is not college basketball. One can wonder how long Lin can hold up. At a skinny 6 foot three inches, he takes a lot of punishment. Last night on a drive to the basket in the fourth quarter he was crushed on three sides by muscular giants, the entire front line of the Raptors. I have heard of being sandwiched, so I guess that was being Big Macked. Lin looked like he couldn't get up at first, but he did and not surprisingly missed both free throws.

Undeterred as everyone who follows this knows, he recovered to score the final six Knicks point and get the win.

"The Audacity of Rope"

That's the title of Mitt Romney's new book, subtitled "give me enough and I'll hang myself".

His attempt to not only explain his opposition to the GM and Chrysler bailouts begun by President Bush and continued by President Obama but also to take credit for the way the revival of the companies evolved is a prime example of this theme. The fact that all of the Republicans line up and say they opposed all of the "bailouts" of the financial industry and the auto industry is a lowest common denominator competition.

Late last week at some major industry conference(I did not take notes on the article), President Bush was asked how he could justify bailing out the auto industry. His simple answer was that he "did not want to see 21% unemployment in this country". Later at the conference his former chief of staff Karl Rove spoke and in the "severe" conservative manner of the day he criticized the "bailout".

It's as if the Republican candidates all want to showcase the solidarity of their stupidity. In 2008 we were in a state of extreme crisis. If one does not understand that statement it's not worth explaining. Panics have no bottom if not addressed in aggressive ways.

What is often conveniently overlooked is that the financial industry has paid back substantially all of the "bailout" money at an 8% rate of interest. Of the major firms only AIG has not fully repaid the government and it's likely just a matter of time before their stock reaches a point at which the government is whole. The two firms that were beneficiaries of the bailout that will never be able to repay their debt, which one could conservatively estimate will reach $500 billion combined, are Fannie and Freddie. They were of course overseen by a congressional committee and influenced by HUD and by Presidents.

The bank failures overseen by the FDIC were virtually all smaller banks that were not involved in derivatives or securities issuance, but were felled by the traditional achilles heel of banking since the Medici's, CREDIT. Since the FDIC is funded by required banking industry contributions that was not a cost to the taxpayer.

As to the auto industry GM and Chrysler are both revived and the government will almost certainly be paid back over time, again at high interest rates or returns on stock investments. Almost all of the parts suppliers and related vendors are now being revived as well. Some of those didn't make it, but the great majority did either on a stand alone basis or through being combined with another firm.

The "bailouts" that the Republicans hate simply provided liquidity in a panic, liquidity to the banking system so that it did not freeze up and working capital liquidity to the car companies so they did not collapse in such a rapid way that they could not be revived. Wouldn't the Asian and European car companies have enjoyed the market opportunities that would have presented.

So Mitt, no matter what the issue, and there are so many but this post must end now so I can watch J.Lin, you are looking so disingenuous that it's difficult to see how you can look in a mirror, although it's easy to guess that you still like to do so. Why not take the risk of losing with a shred of dignity intact. The coil of rope is getting thicker.

More on Greece and the sad picture

Seeing more about the devastating Athens riots on television last night and reading more in media reports, it is obvious that the Greek security forces were totally unprepared for what happened. It was more on the scale of what is feared at the various world economic summits when anarchists on the left and right and just pure unaligned anarchists join forces to protest and do more than that if possible.

At those summits the security presence is immense and perimeters are secured everywhere. It appears that Greek security forces were expecting a "normal" major and even fiery protest march with some fringe elements engaging in physical confrontations. What happened appears to have been orchestrated, however loosely, by a small group of the marchers, a violent outburst and indiscrimate attack on property - 48 buildings burned beyond repair, hundreds more businesses big and small damaged and looted, all in central Athens.

Whether there is solely an element in Greece that would do this to their capital city or that old saw "outside agitators" also participated, who knows. Greeks are proud of their country and their culture and while the current economic situation has fractured the country's confidence and shaken its unsustainable system to the core, it is difficult to believe that the vast majority of Greek citizens are not appalled at the events of Sunday.

This is by no means only about Greece and their leaders. It was more of a show of force against the European Union and the power of capitalist economic forces globally. Poor Greece just happened to be the opportunity for the anarchists to have a field day.

Greece's dilemma

Greece seems to be in one of those downward spirals that is self-reinforcing. Their parliament yesterday approved more budget reductions and austerity measures as part of the deal to receive significant added aid from the European community. At least in Athens, significant unrest that had been percolating became more violent.

The story is well known. The Greek government has, under the mask of the Euro currency, spent excessively. Bankers did not look behind that mask to see the underlying Greek economy. This is exacerbated by a long established cultural bias against paying taxes, at the personal and corporate level. It is further damaged by a culture of patronage and corruption that is long standing.

In some ways we should not be so judgemental. Greece could be a microcosm of what could happen to many countries, even big ones. Let's hope not.

The downward spiral that is Greece is reinforced by what is going on there now. While the news media loves to show over and over again any protests in a country, one has no idea whether much of the country is as pleasant as ever, just poorer and more uncertain. With tourism being the biggest foreign currency earner of little Greece, the images being broadcast are devastating.

As people in Europe and the U.S. look at planning their vacations during the major spring and summer tourist seasons, how many will be deterred based on what they are seeing. Sure, the rowdy Brits will almost certainly continue to show up but the French and Germans may feel that they will not be welcome. Americans and Canadians will have second thoughts. Who wants to plan their special vacation and be subject to strikes that disrupt airlines and basic services, much less have the uncertainty of whether there will be violent protests.

The almost certain downturn in this year's tourist business could be the final straw.

Santorum's wins

It's all up in the air now.

Ron Paul's Minnesota speech tonight

What a performance. For whatever reason, tonight CNN broadcast a Ron Paul speech to Minnesota supporters for almost 20 minutes uninterrupted. It was from about 6:50pm to 7:10pm and I guess CNN was just buying time before their promised Casino state election coverage.

We hear President Obama, of course in his position, giving his teleprompter speeches often, Mitt Romney gets lots of airtime as well now(yesterday's CNN coverage noted that the teleprompter screens had just been windexed as the stage was being set), and Newt Sociopath gets lots of airtime as well for his hyperbolic harangues. Ron Paul's airtime has mainly been through short responses at the debates.

This speech was a revelation. There were no telepromters. It was the best political speech that I have heard in years, maybe ever. That doesn't mean that I agreed with all of it, far from it. It was just the honesty of a politician whose ideas do not fit neatly into any cagetory.

Paul is libertarian on social issues. He is not a Republican type schizo-paranoid on gay rights or immigration issues. He is zealously anti-Patriot Act. Paul is a scorched earth Darwinian on economic issues and his ideas on monetary policy(none) and the social safety nets(minimal), if enacted immediately as he proposes, would create chaos at home and abroad. In an ideal world he may be right and that is why he is interesting on these issues, but has there ever been an ideal world?

What is fascinating is that his ideas on foreign policy, against the Iraq war, against the hopeless Afghanistan mission, for reopening normal relations with Cuba, all while maintaining a strong military to protect American interests, these sound more like George McGovern than George Bush.

Listening to him tonight was a revelation because he had a non-stop unscripted point of view that in a way that obviously made sense to him was all connected to his theme of personal liberty. My God, we have a politician that thinks, that passionately thinks, and has a committed point of view that will not change.

I can see why Paul has an ardent if relatively small following. I could not be part of that but his speech tonight was, for me, the most refreshing political event of this season. He could not be President.

Camilla Williams

Yesterday in the New York Times there was an obituary for Danville, Virginia native Camilla Williams. The obituary took up three full columns of the newspaper, probably more than for any other Danvillian. I checked to see if Nancy Langhorne(Lady Astor) or Irene Langhorne(the Gibson Girl) had received the same attention but did not have the patience to go through the archives at length. Also looked at Enos "Country" Slaughter(from the county) and his obit was no comparison.

Why would I comment on the length of an obituary. Simply because, while Camilla Williams was certainly well known among segments of my hometown community, she was by no means widely known.

She was the daughter of a maid and a chauffer, grew up in Danville, went to Virgina State College for Negroes, and in 1941 was a third grade teacher back in Danville. Somehow by 1946 she was the lead performer in the New York City Opera's performance of Madame Butterfly. It was an amazing transition that was lauded by New York critics, ten years before her more famous contemporary, Marian Anderson, made to the stages of New York. The year after Miss Williams breakthrough, Jackie Robinson integrated major league baseball.

What a story.

Is it possible that Romney could be a viable choice?

Following up on yesterday's post, one could wonder whether being an awkward campaigner, socially inept, and managing his message in a way to attract the votes he needs is necessarily a sign that Mitt Romney is not a viable candidate. If he can survive this ordeal, would he in fact be a relatively decent manager in the White House. I don't know, but don't want to completely write him off as implied yesterday.

Wait until the Southern primary states come up in March. The conspicuous serial philanderer, newly Catholic God anointed, and loose cannon Gingrich will most certainly get the Mormon issue going. If Romney can somehow successfully survive that, even attracting some eventual sympathy, he might be the nominee. If he hypothetically has any shot at the Presidency, it is possible that like Clinton he would appoint a professional staff and cabinet.

Again, who knows, but this is meant to take the edge off of yesterday's post.

Is it too late for the Republicans to find a normal candidate

Here there is not one political party that rules. One would want a choice. While one could say that the intelligence of the Republican candidates is not in doubt, their sanity certainly is. The debates have been fascinating theater. Unfortunately there is not one candidate that is close to normal, at least from this perspective.

---Romney --- a robotic enigma and a compulsive liar who makes George Bush the First look like the salt of the earth. He is anti-social and incredibly awkward. He has no concept of how his comments might be viewed. He is not close to normal, despite supposedly being a good family man.

---Gingrich --- is an out of control egomanic and a compulsive liar as well who is supported by his barbie Castrista(did I spell that right?). Romney might be generally unattractive, but Gingrich is dangerous. He is not close to normal.

---Santorum --- based on his record in his years in the Senate he has almost Islamist beliefs about imposing his "values" on this country. He is a "wolf in sheep's clothing" and completely unprepared to lead this country. He is only normal in his milieu.

---Paul --- a world class eccentric, by far the most interesting person to listen to here, but he espouses immediately dismantaling our monetary system and military upon election, an action that would be borderline insane. Let's just see how bad the damage to the world financial system would be? He is an abnormally strict libertarian, part of which is good and part of which would be dangerous.

Here, someone to oppose Obama would be welcome. He has been a disappointment, but one who has faced incredibly difficult challenges set up by prior administrations and a radically obstructionist Republican opposition. That's partly his fault, as his Chicago cabal could easily be compared to Jimmy Carter's Georgia one.

His health care bill and especially the Dodd-Frank bill started out with good intentions and if kept simple would have been laudable achievements. They became more than 2000 page bills loaded with really bad inserts by the Democratic majority in Congress at the time. Some inserts could almost be called graft, well they could be, and some could be seen as resentful paybacks with broad consequences. Some are simply overly intense goverment intervention. Obama gave in to all of this to see his important goals achieved.

Republicans are absolutely right when they say that community banking is being absolutely crippled by the combination of Dodd-Frank and the Bush 2 bill Sarbanes Oxley. The regulators are destroying them, and after the debacle of the mortgage disaster, why would good policy seek to destroy community banks. That's just one example.

So all of that is to say one would want a choice in November. The Republicans are not on a course to provide one. Here, Huntsman seemed like a positive choice, no support, no chance. Jeb Bush is mentioned by some, conservative to a fault but he has run a multi-cultural state and has a multi-cultural family as well, and he certainly knows the drill of being President. The Republicans need a normal candidate. Maybe no one normal would run for President.


Postscript --- just saw tonight that the oddball Donald Trump is again considering his entry into the race. If that does not underscore what this post has said, nothing could.