The Shard of Glass

Here's a link to a little video about the projected Shard of Glass, which will be the tallest building in Europe. If you know where to look you can see my flat.

Armageddon Shmarmageddon

Drudge has some fine links today:

Kiddies on drugs personify the Obama message

Congress is trying to enact The Communist Manifesto

and most essential 

Bankruptcy is good for society

The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government.

The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company.

Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable.

In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. This "moral hazard" generates enormous distortions in an economy's allocation of its financial resources.

Thoughtful advocates of the bailout might concede this perspective, but they argue that a bailout is necessary to prevent economic collapse. According to this view, lenders are not making loans, even for worthy projects, because they cannot get capital. This view has a grain of truth; if the bailout does not occur, more bankruptcies are possible and credit conditions may worsen for a time.

Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen.

Further, the current credit freeze is likely due to Wall Street's hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents.

Put Armageddon on hold

My policy is Victory! I'm long and strong mining and building materials from this morning (or possibly long and wrong, if an even fouler crap sandwich gets enacted in which case I'll bail). Best is complete failure of the Bill To Socialize American Housing and Finance, then getting out of the way so that private American ingenuity and guts can let rip, helped by radical tax cuts and radical spending cuts. Let the government promote a national security driven program, a Homeland Surge, to drill for oil, build clean coal and nuclear power stations and renew infrastructure - pronto, pronto - all with private money like an Anti-Keynes. (I said I was long building materials). That would galvanize the markets and galvanize America with a sense of national purpose for your benefit and our children's instead of a nation which buys pills now to be paid for by our children. The moral disgrace of modern public finance saps morale and purpose.

John McCain, can you hear me? You can lead by adopting a coherent, simple message, my message, the House Republican message, your party's message. Oh and no more compassionate conservatism, it's too cruel.

¡Ay, caramba! or, possibly, Banzai!

Snobs' corner (continued)

I mentioned a London thread about the US election before. I'm in it for fun rather than intellectual nourishment. My latest post:

Stephen Fry -

I have often felt a hot flare of shame inside me when I listen to my fellow Britons casually jeering at the perceived depth of American ignorance, American crassness, American isolationism, American materialism, American lack of irony and American vulgarity. Aside from the sheer rudeness of such open and unapologetic mockery, it seems to me to reveal very little about America and a great deal about the rather feeble need of some Britons to feel superior.

Ok, if this is about swapping Youtube clips, here's my offering (much profanity):

Papabile

I want to commend Peter Robinson's video interview with Archbishop Charles Caput of Denver, starting here.

His previous interview with another Christian, the thriller writer Andrew Klavan, was equally exhilarating. I am somewhat irreligious, but I am invigorated by the intelligence and clarity of these men.

Wasting electrons

A RonPauline chess opponent of mine asks:

Why do you defend Palin, so wholly unqualified for high office?

What do you think of the ABC News poll that has Obama 9 points ahead?

I reply:

I'll spell it out tho I know I'm wasting electrons:

1. It is beyond dispute that Palin (business, Mayor, AOGCC, Governor) has more executive experience than Obama and Biden, who have none.

2. It is beyond dispute that Biden is a joke.

3. It is beyond dispute that Obama has the most left-wing voting record in the Senate.

4. It is beyond dispute that Obama killed the Born Alive Infants Protection Act in Illinois.

5. It is beyond dispute that Obama has never crossed his party as a reformer. Palin rose thru that.

6. It is beyond dispute that Palin is more experienced in competitive elections. 

7. It is beyond dispute that Alaskans (80-86%) regard her as a great success in executive office.

There's much more that is beyond dispute before you get to talking about policy where she is far superior, but that's opinion.

Sam Harris partially quotes and distorts her positions and record and family because, like you, he is deranged on religion and Iraq.

Before you question Palin, who is beyond dispute a successful politician and administrator, you need to obtain credibility by answering points 1-7. Unfortunately for your position those points are unanswerable in good faith and I'm not interested in bad faith moonbatism.

Re the ABC poll:

It may be right.

It may be wrong due to grotesque oversampling of Democrats, bearing in mind that it's ABC.

It may be wrong due to an inverse Bradley effect in polls - that is the tendency towards affirmative action answers.

It may be wrong because it conflicts with this mornings WSJ/NBC poll (48/46)

It may be wrong because modern polls have almost always overstated the Dem Presidential candidate relative to the outcome. This is a structural problem.

Again, it may be right. It may be that the overwhelming dominance of the left-wing and culturally depraved in the mainstream media, academia, the legal profession, unions and government employees has so poisoned America that a blatant fraud like Obama can become President. Good luck.

A Different Corner (of Hampstead Heath)

Like many worldly folk, I'm a sap at heart. An uber-kitsch song I get sappy about is A Different Corner by George Michael:

George Michael's real life is notably sordid. This weekend he was successful in getting the police to let him off without charge when he was found carrying drugs for the umpteenth time, including crack cocaine which carries a jail sentence, not to mention all the other gross shenanigans he was getting up to. He wept and pled with the police that a criminal charge would get him banned from performing in America. That worked because he's a celebrity and the UK police are crippled up the wazoo by political correctness so 'cottaging' is mitigation rather than aggravation.

The Sun says:

You risk jail for carrying Class A drugs.But if you are a millionaire rock star called George Michael you can and it’s okay with the cops.It doesn’t matter how many times you have been found comatose behind the wheel of your 4x4 in the middle of the road.Michael, like sleazy Kate Moss, has learned there is no limit to police tolerance of celebrity druggies.

But what does this say to youngsters tempted to try a snort?

I hope the US bans him anyway. It's probably in his own interests, but that doesn't matter. It's certainly in the interests of discouraging others from drugs.

"I'm skinny but I'm tough," he says.

President Obama would be an embarrassment to America and friends of America on many levels. Can you imagine Todd Palin, say, telling people "I'm tough"? This is more his style:

[on son leaving for Iraq]: He's been trained for this mission and so we've seen that confidence in that young man. We're, of course, nervous.

Come to think of it, I'd be happy with Todd Palin as President. Politics is not a better preparation for the job than character, self-reliance and a quiet articulacy.

Taxpayers can profit from fear and greed too...

Hank Paulson wasn't head of Goldman Sachs for nothing, I trust. World stock markets are surging this morning, maybe 'exploding' is the right word, because of Hank's plan to form a 'bad' bank that will accept the supposedly toxic paper which is thought to poison the banking system. Can I buy shares in the Big Bad Bank? The US should take this toxic waste at distressed prices, tighten a little the screw on those who took out these mortgages to improve their incentives to perform, then simply reel in the scheduled payments which will way exceed the fraction of bad debts implied in the fire sale price. After a period of superior income returns, the Big Bad Bank can re-package and sell-off the newly nutritious CMO's, then distribute its well-gotten gains to their rightful owners, the American taxpayers. Now that's what I call creative destruction.

Obama is corrupt, McCain is right and wrong

The causes of the credit crisis of 2008 are:

1. Fannie Mae and Freddie Mac extorted and recycled forests of toxic paper for the enrichment of its management and a styload of mostly Democratic pigs, principally Chris Dodd, Barack Obama, Franklin Raines and Jamie Gorelick. McCain was presciently right to support real privatisation or abolition of Sallie, Fannie and Freddie since 1994 for all the right reasons. Kudos, McCain:

These quasi-public corporations led our housing system down a path where quick profit was placed before sound finance. They institutionalized a system that rewarded forcing mortgages on people who couldn't afford them, while turning around and selling those bad mortgages to the banks that are now going bankrupt. Using money and influence, they prevented reforms that would have curbed their power and limited their ability to damage our economy. And now, as ever, the American taxpayers are left to pay the price for Washington's failure.

Two years ago, I called for reform of this corruption at Fannie Mae and Freddie Mac. Congress did nothing. The Administration did nothing. Senator Obama did nothing, and actually profited from this system of abuse and scandal. While Fannie and Freddie were working to keep Congress away from their house of cards, Senator Obama was taking their money. He got more, in fact, than any other member of Congress, except for the Democratic chairman of the committee that oversees them. And while Fannie Mae was betraying the public trust, somehow its former CEO had managed to gain my opponent's trust to the point that Senator Obama actually put him in charge of his vice presidential search.

2. Absurdly zealous accounting rules post-Enron leading to valuation at firesale prices of temporarily impaired assets which have much higher real dcf values.

3. A disconnect between ownership of firms and the size and type of risks undertaken by firms, often due to perverse incentives. Contrast the ownership mentality of a Warren Buffet towards Berkshire Hathaway which is now snapping up cheap assets, with the annual bonus mentality of bank CEO's despite their stock options or perhaps because their option allotment depended on annual results which depend on high-volumes of trendy risk (pun intended). Repeat after me: the herd is always wrong eventually, whether it's tulips, emerging market credit spreads, house prices, sub-prime mortgages or prime mortgages. The only exception may be "don't sell America short." That depends on seeing America as an organism with a superior immune system based on free speech and a free market in ideas.

Congress and the Executive are principally to blame. Of course bankers and everyone else will go with the herd to make money. Nearly everyone's real business mission statement is "Make as much money as possible without going to jail." One class that is not to blame is the short sellers. Would that there were more of them. That is where McCain is badly wrong. For example:

Mr. McCain added the wholly unsupported assertion that "speculators pounded the shares of even good companies into the ground." It wasn't very long ago that he blamed speculators on the long side for sky-high oil prices. Then oil prices fell. Now Mr. McCain wants voters to believe speculators are responsible for driving mismanaged financial companies to ruin. The irony is that this critique puts Mr. McCain in the same camp as some of the Wall Street CEOs who have led their firms so poorly. They also want someone (else) to blame.

David Einhorn, who shorted Lehman since July 2007, is a hero.

Things in heaven and earth

Here are 2 radiant young female primates. Would you say they were intelligently designed? I don't know, but another thinker on these matters had a stronger opinion:

"I am inclined to look at everything as resulting from designed laws, with the details, whether good or bad, left to the working out of what we may call chance."

"...the extreme difficulty or rather impossibility of conceiving this immense and wonderful universe, including man with his capacity of looking far backwards and far into futurity, as the result of blind chance or necessity. When thus reflecting I feel compelled to look to a First Cause having an intelligent mind in some degree analogous to that of man; and I deserve to be called a Theist."

"[a man] can be an ardent Theist and an evolutionist"... for himself, he had "never been an Atheist in the sense of denying the existence of a God". He added that "I think that generally (and more and more as I grow older), but not always, that an Agnostic would be a more correct description of my state of mind."

It is apparent that Charles Darwin hovered between Theism and Agnosticism, never touching Atheism but inclining towards Intelligent Design. Evolution (which convinces me) is considered evidence against ID, but not by Darwin.

The white house in the photo is Down House near London, where Darwin wrote The Origin of Species and The Descent of Man.