Hilarious Article - "The Obama Whisperer"

New Republic

"Valerie viewed Wall Street and the business community as a constituency and was generally uncomfortable with expressions of chastisement toward Wall Street"

'bamacare

"Forget your old health plan. It was placed in the trunk of a Prius at 3 AM this morning, taken to a frozen lake outside an organic poultry plant in Minnesota and shot twice in the head. It was a bad plan. It has transitioned to no longer being a plan. We have a better plan for you."

Obamacare

A Credit Bubble Stocks correspondent writes about his experiences,

"I spent a lot of time researching health care plans for my son when he was born in 2011. I chose Kaiser Permanente. They had the best service, best plans and cool past of innovative and free market operations.

My son is 2 now.

On October 5th I received a letter from Kaiser saying my son’s deductible was going up by 20% and his premiums were going up by 85%.

On October 7th I called the number on the letter to inquire about the radical increase. I called at 5:30pm on my drive home from work. I was on hold for 14 minutes then a message came on, something like, 'On October 1st we notified all of our policy members that we were cancelling their current policy and issuing a new one, we are getting a crazy amount of calls right now, call back during our off-peak times 8a-9a and 7p-8p, thank you.' And then the computer hung up on me.

I called the next day at 8:05a. I got a nice lady on the phone, and the conversation went:

'Why is my son’s coverage getting worse and his premium nearly doubling?'

'It is due to the health care reform'

'Yes, I had a hunch, but this is very distressing and I’m curious as to why this happened.'

'It is due to the health care reform.'

'Yes, I get that, but I’m very sad that my coverage is getting worse, the price doubling and I don’t have any choice in the matter. (I could tell I got through to her humanity on my last comment)'

'Sir, Kaiser has hired thousands of new people to answer complaints regarding the new plans. In training they kept telling us 'they are going to yell at you and scream,' all we can say is this is the way it is and it is because of the health care reform.'

'Wow.'

'I'm really sorry.'

'Me too.'

'Is there anything else I can do to provide you service today?'

This experience was terrifying. 'Here is your new plan, SLAVE! – you’re welcome slave!'

It rated up there with having the 101 freeway in LA shut down for 25 minutes while the king’s motorcade went under the freeway on a side street - they were not even on the freeway! We are such scum the king won’t even dream of sharing a road with us. He doesn't even want to look at us when he is driving around. Imagine being in an ambulance on the way to the hospital and the king’s motorcade stopped your trip cold for 25 minutes. 'you can die before I will share my road with you!'

In these moments of terror I always think of that scene in Atlas Shrugged where John Galt is in a company wide meeting and the heirs of the company founder have just inherited the company and are announcing a new pay plan based on need and work load to be assigned by capability. He just stands up, walks to the door and says 'I’m out of here!'

Health care 'reform' is like dekulakization in the USSR. What is being 'reformed' is any actual delivery of medical care to class enemies.

"'Cash for Clunkers' Actually Hurt the Environment"

Just in case you had forgotten about the outrageous cash for clunkers program, here is an update on how counterproductive it was:

"E Magazine states recycling just the plastic and metal alone from the CARS scraps would have saved 24 million barrels of oil. While some of the 'Clunkers' were truly old, many of the almost 700,000 cars were still in perfectly good condition. In fact, many that qualified for the program were relatively 'young,' with fuel efficiencies that rivaled newer cars."

Paying taxes so that the government can buy working cars and destroy them is depressing.

Essay: "News From Obama’s Home State"

Three states form the base of Democratic political power in the United States: California, New York and Illinois. All three states are locked in an accelerating economic, demographic and social decline; all three hope that they can stave off looming disaster at home by exporting the policies that have ruined them to the rest of the country.

Entrepreneurship II

Excellent editorial on the socialist O'bama remarks:

"Just two immigrant brothers and their families risking everything, balancing on the economic high wire, building a business in America. They sacrificed, paid their bills, counted pennies to pay rent and purchase health care and food and not much else. And for their troubles, they were muscled by the politicos, by the city inspectors and the chiselers and the weasels, all those smiling extortionists who held the government hammer over all of our heads.

[...H]e offers an American dream much different from my father’s. Open your eyes and you can see it, too. He stands there at the front of the mob, in his shirt sleeves, swinging that government hammer, exhorting the crowd to use its votes and take what it wants."

I was reading a review of a Gary North book on honest money. "Honest money is the product of honest people. '[It] requires honest law and people who are self-disciplined. Let the people have what they want, just so long as it is morally valid, non-fraudulent, and non-coercive.'"

Entrepreneurship?

Barack O'bama Scored a Lot of "Interceptions" in High School

From David Maraniss’ biography about the young Barry Obama and his "choom gang."

Obama’s friends credited him with setting a rule of "total absorption": anyone who exhaled prematurely lost his next turn at the joint. And he was known, Maraniss reports, for 'Interceptions': 'When a joint was making the rounds, he often elbowed his way in, out of turn, shouted 'Intercepted!' and took an extra hit.'"

Kirchner and Obama

Headed in the wrong direction:

"In prior posts I've mentioned the disturbing parallels between the policies of President Kirchner and President Obama. Once again I'll add that every time I described the key features of Obama's policies to an Argentine friend, the immediate response was wide-eyed amazement: "that's exactly what Kirchner is doing!" Radical left-wing political tactics; strong support of unions; industrial policy which favors some industries at the expense of others; nationalization of key industries (e.g., GM and YPF); contempt for capitalists/banks; pitting rich against poor, or, more generally, acquiring political power via divide and conquer strategies; political cronyism to reward friends, collaborators, and contributors; higher taxes on the rich; massive income redistribution; and socialized medicine, to name a few. In the U.S. it's called Chicago-style politics, and in Argentina it's called peronism."

David Stockman Shatters the Left-right Paradigm

Interesting interview in The Fiscal Times

TFT:  Your assessment of the Obama's presidency at this point?

DS:  Obama’s presidency is a profound disappointment. So far, he’s proven that when Republican’s start elective wars, Democrats can’t end them; when Republicans empty the Treasury, Democrats can’t replenish it; when Republicans put a middle-class destroying money printer at the head of the Fed, Democrats reappoint him; and when the Republicans unleash an orgy of dangerous speculation on Wall Street, Democrats pass a contentless, 2,300 page, enabling act which will do nothing to protect Main Street from another financial meltdown, even as it keeps K Street fully employed.

TFT:  What will happen to health care if the Republicans become the majority party?

DS:  Health care accounts for 17 percent of GDP and is the dysfunctional heartland of crony capitalism. They only thing which will change if the GOP becomes the majority is that the RNC will collect more of the vigorishes.

David Stockman was Director of the Office of Management and Budget under Ronald Reagan.

O'bama Torpedos the Gulf States' Economies

As we predicted on Credit Bubble Stocks last month, the NYT is reporting Drill Ban Means Hard Times for Rig Workers:

"[Ronald Brown] works aboard the Ocean Monarch, which was idled along with 32 other oil rigs when the Obama administration ordered a six-month moratorium on all deepwater drilling after the April 20 Deepwater Horizon disaster. The rig’s owner is now seeking customers in other parts of the world. If the rig moves, Mr. Brown and his fellow motormen, roughnecks and roustabouts will be left behind, jobless, with few alternatives that would pay anything close to the $3,500 to $4,000 a month typical for such jobs."

The spill was an accident and not O'bama's fault, but overreacting and hurting an important industry IS his fault.

O'bama's Suspension of Deepwater Drilling

O'bama is a socialist who knows nothing about business or science. His administration cronies are legal "scholars" that write law review articles about how to subvert the Bill of Rights. These people are a menace to free markets and to our civilization.

I thought cash for clunkers was appalling - banning deepwater drilling is more misguided. Read what the CEO of Ridgewood Energy says:

An absolute 6-month ban on deepwater drilling is so short-sighted and potentially so damaging to the United States’ long-term interest because it not only idles tens of thousands of skilled-workers who, if they are like most people, live paycheck-to-paycheck, but because it also idles the enormous amount of equipment employed in the deepwater oil industry. Today, there are about 33 deepwater rigs working in the Gulf (including 2 rigs drilling relief wells at the BP site). The risk to the United States is that those 33 rigs are portable and can be towed away if they can’t be used productively here. Those rigs represent about $15-20 billion of capital assets, and the people who own them, and their bankers, can’t let them sit idle. Those rigs can be towed overseas to other jobs, and once they are towed overseas, which many of them probably will be, they will not return quickly once the ban is lifted. Typically, a company will only go to the great time and expense of towing a rig thousands of miles if it is secured by a long-term, multi-year contract. We face this potential exodus of capital assets not just with the drilling rigs, but also with the enormous industry of ancillary support equipment, including massive crew boats and supply boats, helicopter companies, drilling mud companies, drill pipe companies and all of the other related oil services. Some will move, and others will stay and hope they don’t go bankrupt.

It's very telling that crude oil is still 20% below where it was trading at the April peak. The energy sector is pricing in a depression.

Be sure to read the 1957 Robert Heinlein story that anticipates Cash for Clunkers.

Victory for Freedom

The victory by Rand Paul and defeat of Arlen Specter today are huge victories for freedom.

Statists take note.

SEC to Force Politician Disclosure Risk

Via Capitalism Betrayed, SEC to Force Politician Disclosure Risk

Would a rule forcing companies to disclose the potential havoc that politicians might wreak make you more or less likely to invest in public companies? Shareholders should take note that Barney Frank hates us and has threatened to step on our air hose. Can you imagine what the trial bar is going to do with this? When did you learn that Nancy Pelosi was targeting your industry and what did you do about it?

Thoughts on REG and RMIX

Investors' exuberance for Regency Centers (REG) on Friday was not rewarded today - gave it all back.

I have been looking at U.S. Concrete (RMIX) as a possible short for about a month now. Today it rallied 25% on nothing more than O'bama's vague suggestions that we should spend the TARP money on make-work road projects.

RMIX bonds - with hardly any debt senior to them - trade at a 25% yield.

October Unemployment Rate vs Obama Projections

This amazing chart is from Innocent Bystanders. The blue curves were used by the O'bama team to sell their bailouts.

Let's Not Have Any Bailouts on the Next Leg Down

This is as true today as it was six months ago, when it was published.

The folly was compounded by the bailouts of Bear Stearns and AIG. The bailouts also undermined vital public confidence in the fairness of our system. While small businesses struggle to recoup bills owed by failed customers, the likes of Goldman Sachs, which miscalculated the creditworthiness of AIG, were made whole -- and could thus pay bonuses amounting to many times the incomes of most taxpayers.

Suppose that, when the financial crisis broke two years ago, our leaders had shown a Churchillian steadfastness and allowed the normal realignment to play out under a predictable judicial and regulatory regime. The prices of stocks, bank debt and houses would still have crumbled and unemployment risen. Although recovery wouldn't have been immediate, we'd at least have progress, instead of a sullen paralysis and futile efforts to turn the clock back.

Not only are bailouts a crime, they fail at their stated purpose by creating uncertainty and dragging on the inevitable.

Obama Gets it Wrong (Again)

From a Paul Krugman column today:

I was startled last week when Mr. Obama, in an interview with Bloomberg News, questioned the case for limiting financial-sector pay: “Why is it,” he asked, “that we’re going to cap executive compensation for Wall Street bankers but not Silicon Valley entrepreneurs or N.F.L. football players?”

That’s an astonishing remark — and not just because the National Football League does, in fact, have pay caps. Tech firms don’t crash the whole world’s operating system when they go bankrupt; quarterbacks who make too many risky passes don’t have to be rescued with hundred-billion-dollar bailouts. Banking is a special case — and the president is surely smart enough to know that.

Obama, let us count the reasons. The most important one is that their exorbitant compensation is being paid for by the U.S. Treasury. Why do we have to have a president like this?

Tuesday Reading

Puts are on sale: current implied volatility vs. the 52 week high IV of Dow 30. I have accumulated almost a thousand GE put contracts so I'll never have to work again if we get the next leg down.

Conservative Woodstock Rocks the Capital.

"Every week the FDIC takes over failed banks and every week the assets on the banks balance sheets are written down by 30% overnight. Does this not make eager buyers of bank stocks wonder how assets on bank's balance sheets are being valued?" (Capital Observer)

Why do people say the government "let" Lehman fail? Lehman was a mess. It failed. It's requiring "the biggest real-estate workout department in the U.S." just to oversee the real estate screwups they made.

Geithner cancels Westchester house listing, rents to tenants. Cap rate is around 4% based on his asking price for the house.

Short Interest At Lowest Level Since February 2007

Cash for Clunkers is a Crime

Watch what the "cash for clunkers" program does to perfectly good cars.

Replacing the oil with sand in a perfectly good engine and revving it until it dies leaves the world poorer by one engine. It fits in with other Keynesian gems such as one person digging a hole and another person filling it, or burying money in bottles for other people to dig up.

The destruction of the engine is used to justify a transfer of wealth to the auto industry, which lost its free market wager on how many cars to produce. Because there are a dozen car dealerships in every congressional district, they don't have to lower prices when they have a glut of cars.

Due to the abysmal state of economic, or any kind, of literacy in this country, no one mentions the broken window fallacy.

We've only known about it since 1850.

Why not put sand in every engine in America and replace them all with a 2009 Prius?
Why not break every window in America and replace it with a more energy efficient one?

The crux of the broken window fallacy is the unseen. In the clunker program (and it is a clunker of a program), the unseen is made plain:

The House voted 316-109 to transfer money to the program from an Energy Department fund for loans to innovative energy projects that wasn’t to be distributed until next year.

By the way, Robert Heinlein anticipated cash for clunkers in a brilliant story from 1957. This is a must read.