Map of the Blogosphere

A cool site put out by Politico.com

And from Portfolio.com : the Econoblogosphere.


Hat tip :Abnormal Returns)

Michelle is all over the Burmese Crackdown On Pro Democracy Effort

Trust in Federal Government, On Nearly All Issues, Hits New Low

Two posts on the Instapundit. These issues are not unrelated. We the voters of these United States need to send them all home. Repeat after me " I will not vote for any incumbent."
Instapundit Post one:

NEW YORK A new Gallup poll reveals that, as the organization puts it, Americans now "express less trust in the federal government than at any point in the past decade, and trust in many federal government institutions is now lower than it was during the Watergate era, generally recognized as the low point in American history for trust in government."

Instapundit Post two: From Congressman Boehner:

Pork-barrel earmarks were an important factor in the loss of the GOP majority last November. Years of irresponsible earmarks, slipped into bills behind closed doors without public debate or scrutiny, eroded Republicans' reputation as the party of fiscal responsibility and trustworthy custodians of taxpayer funds.

I've never made a secret of my distaste for worthless pork. Just a few months after being elected as majority leader last year, we enacted comprehensive reforms that brought the earmark process out into broad daylight. All taxpayer-funded earmarks had to be publicly disclosed and subject to challenge and debate. If you sponsor a project, we argued, you ought to be willing to put your name on it and defend it--and if not, you shouldn't ask taxpayers to pay for it. These reforms were the right thing to do--and they still are.

The Democratic majority came to power in January promising to do a better job on earmarks. They appeared to preserve our reforms and even take them a bit further. I commended Democrats publicly for this action. Unfortunately, the leadership reversed course.

Shining a light on Congressional giveaways is neither a republican or democrat issue. Rather it is an issue for all Americans seeking to reduce corruption in Washington and preserve real representative government. Time to shock and awe incumbistan.

Bill Rempel On John Hussman

Bill rempel puts some heat on John Hussman in this article:

Only Three More Months for Hussman to Beat the Benchmark!

I am a fan of John Hussman and have small holdings in his funds. I don't think Rempel is wrong in what he says, though he seems to take the whole thing personally. I think Hussman's approach is very useful. I want the hedged tactics under the conditions he utilizes because they give me an asset that performs with different volatility characteristics than my other equity investments. During the big swoon in the market in August it was rather nice to have a fund do well.
could Hussman have done better over the last few years of bull market? Sure, but then he would have likely increased his corellation to other fund managers. I would like to see him keep improving his stock picking so that the prortfolio outperforms more on up moves. But I do not want him to alter a well researched strategy that offers me flexibility in my investment choices.If all funds are going to pursue the same strategies then we only need one fund.

Tim Blair: THEY BELIEVE THE TELEVISION

Talking (empty) Head

Stephen Green on clueless Couric.

Wouldn't it be nice if instead of justbeing photogenic and verbal the news talking heads actually could think.

Canada Shooting At Their Own Feet

Jeff Saut in his weekly comments discusses the moves in Alberta to put a tax chokehold on its greatest strength.

For much of this year we have roiled against our government’s increasing movement towards intervention and regulation. Little did we know we had to worry about the same thing in Canada’s most business-friendly province, namely Alberta. As we understand it, last week the Alberta Provincial Government proposed changes to Alberta’s tax code that raises the existing Royalty regime for the province’s oil industry. The proposed (emphasize “proposed”) changes would hike the government’s Royalty rate from 25% to 33% combined with a sliding scale “Oil Sands Severance Tax” (OSST). Taken together, these changes could lift the government’s “take” from roughly 47% to 64% leaving the remaining 36% for the developers/investors. Consequently, the folks providing the “risk capital,” and developing the projects, by default become minority participants in their own projects. This, ladies and gentlemen, is the sort of thing one expects to hear from Venezuela, not Canada!

The one constant across all governments is the inability to keep their hands off any enterprise that is doing well. Spending even ten percent of that effort on cutting spending would do immeasurable good.
here is an article on the tax proposals:

Alberta panel calls for hefty tax increases on oil sands, oil and natural gas

Atlas Mugged

(hat tip to Instapundit)

A great article by Edward B. Driscoll Jr. Atlas Mugged: How a Gang of Scrappy, Individual Bloggers Broke the Stranglehold of the Mainstream Media

Up until the Reagan years, Love says, “definitely fewer than one hundred people, and maybe as few as twenty people, actually decided what constituted national news in the United States.” These individuals were principally concentrated within a few square blocks of midtown Manhattan, the middle of which was home to the offices of the New York Times. The aptly nicknamed “Gray Lady” largely shaped the editorial agendas not just of newspapers but of television, as well. As veteran TV news correspondent Bernard Goldberg wrote in his 2003 book Arrogance, “If the New York Times went on strike tomorrow morning, they’d have to cancel the CBS, NBC, and ABC evening newscasts tomorrow night.”
Love calls this “the Parliament of Clocks”: creating the illusion of truth or accuracy by force of consensus. “Really, the only way that consumers can tell that they’re getting accurate information is to check another media source,” Love says. “And unfortunately, that creates an incentive for the media sources to all agree on the same story.”

Welcome Jack!

Thursday September 20th saw the birth of Jackson Phillip Johnson in Steamboat Springs, Colorado. Born to Brett and Kathryn Johnson and healthy as he can be. Jack is my second grandchild and we are all thrilled. Jack's 18 month old sister Isabelle has been such a delight that I can barely wait for hm to be old enough to play with grandpa. I will post a picture when I can.

Murtha Gorges On The Other White Meat

Porkbusters and the Instapundit note a Roll Call article describing the sleaziness of Rep. Murtha:

Every private entity that Rep. John Murtha (D-Pa.) favored with an earmark in this year’s defense bill recently has given political money to the lawmaker, according to an analysis of House Appropriations and federal elections records by Roll Call and Taxpayers for Common Sense.

Instapundit links to other articles on the same disgusting subject. Including this from Don Surber:

Rent a congressman

You bought Google at $100 and 3 years later is nearing $600 a share? Big deal. Microsoft has gone up 28-fold over the last 20 years? Yawn. You want to make the big bucks? Rent a congressman. Your return on your investment can be as high as $75 for every dollar invested.

Helicopter Ben Throws Deep

The Fed drops the funds rate a full half a point and the discount rate too. I didn't think they would do it. But CNBC and all the wall street weenies were squealing because their stock options were sinking rapidly and then the Brits were lining up at the banks pulling their money out so Ben and company rode in to the rescue.
One function of the central bank is to provide liquidity and be a lender of last resort in times of panic. So the Fed probably did have to act. But bubblevision has amplified the problem beyond all recognition. I fail to see how lowering the rate on a loan one can't get a bank to make in the first place changes anything. But that is just me. The stockmarket loved it. The Dollar did not. ( chart on the left is the SP500 etf and to the right is the Eurocurrency etf ) I guess only time will tell if Bernanke will have the luck of Greenspan or of William Miller.

Accrued Interest has pertinent remarks on the rate cut. I agree with him except for one thing. I believe there is a risk of moral hazard. But it is not the subprime borrrower who will be effected. It is the investment banker community who learns that the fed will always come to the rescue. Those are the guys who coerced the rating companies in to giving a pass to these motley securities and then sold them to every sucker they could find.

Update: I linked to the wrong charts so have replaced them with charts from Stockcharts.com.
Some reactions to Fed rate cut:
Calculated Risk
Aleph Blog
Crossing Wall Street

BCA: giving some love to natural Gas

Two Charts From Raymond James

from Jeff Saut's weekly missive:

Taxing the Rich

Dennis Gartman today in the last paragraph of his excellent daily letter:

Finally, regarding who it is amongst the nation's taxpayers (ex-corporate taaxes paid) we note the following: back in '79, the top 20% of all wage earners paid 64.9% of all income taxes. In '04, the last year for which hard data is available, that same group paid in 85.3% of the total! If we want to take this one step further, in "04 the top 1% of those filing forms, paid in 36.9% of all taxes paid to the federal government. The top 5% paid in 57.1%! In other words, the top 5% paid in more taxes than in total than the other 95%. It is worth keeping this in mind as the Left takes dead aim upon the upper income levels in the impending Presidential race.

The politicians will of course ignore these facts and curry favor with the masses of voters by promising to soak the rich. I am reminded of a quote attributed to George Bernard Shaw; "anyone who will rob Peter to pay Paul can count on the vote of Paul." Of course Peter may just decide ot outsource his business to some locale where he will be treated less rudely.

What the frenchocrats Really Want

Defeat at Any Price
Why Petraeus's testimony was a nightmare for the Democrats.
by David Gelernter

Appeasement, pacifism, globalism: Those are the Big Three principles of the Democratic left.


But if we only remember the dead and not the cause for which they died, we dishonor and make nonsense of the noblest of all sacrifices. And we mock a president who asked that "from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion--that we here highly resolve that these dead shall not have died in vain." That is the issue when Americans die in combat. Do we finish the mission and invest their deaths with meaning? Or do we shrug them off, inscribe their names on some sepulchral black wall in a ditch, and walk away?

More Evidence Of How The Fourth Estate Has Become The Left Estate

Big media, especially print, continues to lose influence because of a persistent drift to the left. Every study I have seen measuring political leanings of individual members of print and electronic media show 80 to 90% vote and or contribute to the political left. Thus despite what may be good intentions, reporting almost inevitably is tainted by groupthink and tilts coverage to the left. Hoystory gives us an example in

Media failures. (hat tip to Instapundit)

As long as you are there read his previous post which is also excellent and infuriating:

Never get between a senator and his pork

Ticker Sense on Financial Sector Earnings

Ticker Sense posts this chart and a table of earnings forecasts for financial companies in this post.

Mark Steyn being proved right rapidly.

Mark Steyn :

Already, the Mayor of Brussels, Freddy Thielemans, presides over a ruling Socialist Party caucus, ten of whose seventeen members are Muslim.

That's to say, the capital city of the European Union has a Muslim-majority governing party.

Those of you planning to visit Europe probably should accelerate your plans, before the muslims start eliminating all the graven images.

The Vodkapundit says: Pardon the Language

Antartic Ice coverage increases to record level.

From ICECAP:

A New Record for Antarctic Total Ice Extent?

While the news focus has been on the lowest ice extent since satellite monitoring began in 1979 for the Arctic, the Southern Hemisphere (Antarctica) has quietly set a new record for most ice extent since 1979.

The Southern Hemispheric areal coverage is the highest in the satellite record, just beating out 1995, 2001, 2005 and 2006. Since 1979, the trend has been up for the total Antarctic ice extent.

See this chart from the University of Illinois site The Cryosphere Today.
Comment from Powerline;

I compared Google News searches for "ice cap 'north pole'" and "ice cap 'south pole.'" The North Pole stories were all about the shrinking ice cap there as evidence of global warming. I couldn't find a single news story about the expanding ice cap at the South Pole. This strikes me as a pretty good illustration of how the conventional story line about Earth's climate drives news reporting.

I firmly believe we should work to reduce our impact on the environment . But we need accurate information and good science. Crisis mongering for political gain discredits genuine effort. The environmental movement has a long history of being captured by extemists who turn people off with shrill rants and myopic approaches to improvement. Ultimately these one issue fanatics hurt the very cause they claim to support.

Giuliani Steps Up

Giuliani Asks for Equal Time ( via Powerline )

Good for Rudy. The moveon ad was a disgraceful libel of a dedicated man. Unfortunately it won't meet legal standards for libel so General Petraeus has no recourse.

Our New National Divide : Owen West

Owen West writes a great article on the poisonous political atmosphere in the country and the damage it does to our country.
I agree with what Mr. Wilson wrote and applaud him for doing so. I think he illustrates why we need to clean out Incumbistan. Do not vote for any national politician who is running as an incumbent. Or in other words "throw the bums out".
We the voters of both parties need to remind all the bloodsucking office holders they are supposed to represent us, not enrich themselves. For the good of the country both parties need to be cleaned out.

Hollywood's Revealing Censorship of "Path to 9/11"

Michael Medved blisters Hollywood for self censoring in order to help Hillary.

The mini-series, which begins with the first World Trade Center attack in 1993, drew angry denunciations from Clinton loyalists a year ago for its accurate portrayal of the President and his top aides as only intermittently concerned by the ongoing, mounting terrorist threat. Nowrasteh said that the ABC honcho indicated that “if Hillary weren’t running for president, this wouldn’t be a problem” and his miniseries would have received the ballyhooed DVD release it deserved.

In fact, the furious leftist assault on “The Path to 9/11” shows that purportedly enlightened “progressives” are, in fact, today’s most fervent and shameless advocates of censorship. At the time of the program’s original broadcast, Senate Minority Leader Harry Reid and four of his Democratic colleagues (none of whom had seen the mini-series) signed a threatening letter to ABC Chief Executive Bob Iger demanding that he cancel the scheduled broadcast. Howard Dean and the Democratic National Committee launched a furious petition campaign and promised “consequences” if ABC went ahead with its plans to show “Path.”

Never, Never Forget.

Today is September Eleventh and much will be said or written in remembrance of the many who died that day. What will not be mentioned enough in our politically correct media environment is that these people were murdered. The attack on the World Trade Center and the Pentagon were carefully planned acts of undeclared war on the United States. Bill Quick says it all better and has a picture that brings back the anger. I recommend you follow the link to read his post.
As for me I will never forget. I will never forgive.

Michelle Malkin:

But remembrance without resistance to jihad and its enablers is a recipe for another 9/11. This is what fueled my first two books, on immigration enforcement and profiling. This is what fuels much of the work on this blog and at Hot Air. Not every American wears a military uniform. But every American has a role to play in protecting our homeland–not just from Muslim terrorists, but from their financiers, their public relations machine, their sharia-pimping activists, the anti-war goons, the civil liberties absolutists, and the academic apologists for our enemies.

Man, I Hope This is True

Radio Frequencies Help Burn Salt Water

ERIE, Pa. - An Erie cancer researcher has found a way to burn salt water, a novel invention that is being touted by one chemist as the "most remarkable" water science discovery in a century.

Pajamas Media: Living Like Xerxes

Live by the sword die by the sword.

Christine Harper writes on Bloomberg:

Wall Street Credit Costs Soar on Spread to U.S. Rate

Bond buyers view the nation's largest securities firms as no safer than taking a flier on subprime mortgages. That's a nightmare scenario for the industry's chief executive officers, who relied on cheap financing for leveraged buyouts, real estate lending and proprietary trading to produce record profits -- and paychecks of $40 million or more for themselves.

This is a very good article on why wall street is squealing like a bunch little children for Bernanke to do something. You can bet if the same thing were happening to some other industry they would yawn and change sectors.

Blowhole faces blowback

When the Left Cares, and When It Doesn't

A very good essay on American Thinker.

India is its own worst enemy.

The bureaucracy in India is the country's worst enemy. I spent most of 3 years working in India and was so impressed by the people and opportunities there. Yet time after time the government and local officials get in the way of progress and hold the country back. Technology and software are the areas of greatest growth mainly because those industries grew up so fast that no bureaucracy was built to get in the way. Furthermore, the second fastest growing areas are those like the domestic airlines that have been significantly deregulated and allowed to compete. If the government parasites in India would just let go the country would explode.

The BCA likes Brazil

The Bank Credit Analyst likes Brazil:

Remarkably, the real has not weakened materially on this unwinding of long positions, which signifies the currency’s underlying strength. Bottom line: We remain long Brazilian stocks, government bonds and the real, and recommend using recent weakness to increase positions.

Another inflation alert from China

Jeff Matthews raises the same point about an inflationary impulse from China as I raised a few weeks ago. Jeff writes entertainingly as always.

From Powerline: Connect the Dots

Powerline points out that the methods used to catch the would be bombers in Germany are under attack by democratic incumbents.

Note, too, how German authorities found out about the planned attack. They eavesdropped on a phone call from Pakistan to Germany. This is the exact equivalent of the NSA program that is ritually, but inaccurately, described in the press as "domestic spying." Most Democrats denounce the program as unconstitutional.

I want wiretapping controlled strictly but I also do not want to handicap anti terrorists efforts. Listening in on on calls from outside the US involving suspected terrorists is not a threat to my personal privacy. The politicians need to push for oversight and controls but stop demonizing the program.

WSJ.com : Don't Suffer the Little Children

I am a father and a grandfather with another grandchild about to arrive. i found Tony Woodlief's editorial in the WSJ Opinion section to be very good advice. (hat tip to The Instapundit)

Dueling Apple ( AAPL ) opinions

Some disagreement on the outlook for Apple.

Pro from Howard Lindzom.

Con from Footnoted.org

I Don't know the answer but Apple (AAPL ) has been the bell cow in tech land so the chart bears watching.

Mommas don't let your babies grow up to be bad in math.

A fun post in Freakonomics blog. There are a lot of smart people out there. Speaking of which the Instapundit spotted a very interesting article about some very smart people who may have figured out wher the dinosaur killer asteroid came from.

bank loans fail to keep pace with increase in non-current loans

John Hussman is a must read this week. The current environment shows exactly the advantage of Hussman's approach. His funds hit all time highs this week.

from this weeks comments:

Consider, for example, the latest FDIC Banking Profile, which was published based on June 30, 2007 data (before the recent liquidity crisis emerged). In that report, the FDIC noted that the ratio of loan loss reserves to total loans remains at a 32 year low. As for the portion of those loans that are in trouble, the FDIC notes “for the fifth quarter in a row, reserves failed to keep pace with the increase in non-current loans.”

read the whole article.

( I do have small positons in both of the Hussman funds and have for several years)

Jeff Saut

Those of you who follow the stock market and don't read Jeff Saut are missing out.

Oh and guess what? they are Islamic.

Germany Foils `Massive' Bomb Attack, Prosecutor Says (Update2)

By Brian Parkin and Claudia Rach

Sept. 5 (Bloomberg) -- German police arrested three people suspected of planning ``massive'' terrorist attacks on U.S. and other targets in the country, preventing the deaths of ``many, many people,'' the Chief Federal Prosecutor Monika Harms said.

The suspects, two Germans and a Turkish national, were arrested yesterday at a house in Oberschledorn, a village in the western state of North-Rhine Westphalia, officials said. Bomb- making materials and military detonators were also seized. The trio are alleged members of a local cell of the Islamist terrorist organization Jihad Union, which has links to al-Qaeda

Interesting chart from The Big Picture

Barry Ritholtz wonders if foreigners have gone all in on U.S. markets.

Treasury Market Volatility explodes on Black Box Retreat

Elizabeth Stanton and Daniel Kruger for Bloomberg on Black box quant traders pulling out of the treasury market:

Treasury Market Volatility Increases to Highest in Three Years

The retreat by so-called black-box traders and hedge funds caused orders for Treasuries to drop as much as 80 percent

During my lifetime of trading I have traded in and through many crisis events, Hunt silver collapse, 87 stock market crash, 98 LTCM blowout, 911 market shutdown, and the current subprime money market debacle. The one thing they all have in common is the evaporation of liquidity. I always hear stupid remarks like this one:

“We were seeing things that were 25-standard deviation moves, several days in a row,” said David Viniar, Goldman’s chief financial officer

The same kinds of idiocy were spouted by the Nobel winners at Long Term Capital Management. The flaw in these statements is the unstated assumption that the "model" is complete. The model is not complete because these models invariably make the implicit assumption that market liquidity is a constant. Nothing could be further from the truth. The one characteristic of big market panics is the shift from analysis of fundamentals like interest rates or earnings to a focus on preservation of capital and deleveraging. We all become Will Rogers who is reputed to have said "I am not so concerned about the return on my capital but the return of my capital." From return on to return of is a very significant change when the entire market place makes the switch.
If we take the distribution of prices only from periods of collapsed liquidity Mr. Viniar's 25 standard deviations become more like 1.7.
Every quant should tatoo on the back of his/her hand " the market is right not the model".

PS. there is a nice Wiki on the LTCM event.

ETF developments at Seeking Alpha

BBC: Girls At Risk Amid India'a Prosperity

Where is the uproar from the National Organization of Women on this issue? I suppose there is an all male golf club somewhere that needs their attention, or the sexual antics of a favored ex-president to ignore.
from the BBC article:

Over the past 20 years, it has been estimated that some 10 million female foetuses have been aborted.

In northern Punjab, for example, there are just 798 girls under the age of six for every 1,000 boys. The national average is 927.

This trend is not going to end well, but every effort should be made to see that it ends soon.

Law suits begin for Bear Stearns

Calculated Risk writes on the beginning of law suits for Bear Stearns and one example of a tugging at the heartstrings spin on injured investors. Also I wonder if the "Tralfamadore Anti-Matter-Indexed Mystery Investment Vehicle (incorporated on Mars)" is still open to new investment?

Calculated Risk also links to a very interesting Economist Intelligence Unit article about the effects of subprime problems on the global economy and probabilities of various outcomes of increasing severity.

A chart you won't see on bubblevision

Jack Stevison posts this chart on his blog along with pertinent commentary. You will not see this chart on CNBC because it doesn't fit the cheerleader stock promoter mentality they embrace.
What this chart demonstrates is that a money market fund would have outperformed the SP500 over the last 7 years. All mesured in dollars of course. A money fund denominated in eurocurrency or British Pounds would have crushed the SP500 or other U.S. based index funds.

Volume drop due to vacations or wounded quant funds?

Ticker Sense posts a chart showing the sharp decline in volume on the NYSE recently. They wonder if this is due to extensive August vacations does it mean we could see some bargain hunters back in the market after Labor Day.
Vacations are surely part of the reason for lower volumes but, I think the carnage in quantitative hedge fund results is also a big factor. I know in the fixed income sectors of the market liquidity has diminished significantly. Arbitrage strategies between futures contracts and cash securities are usually traded heavily by automated electronic systems based on statistical correlations. We have seen bid ask sizes drop by 80% in some markets as many of the arbitrage funds have pulled out of the market. Some will be back as the markets normalize again but some have blown up and will not return.
The equity markets too, have many of these types of funds operating in normal times. I believe more than 30% of NYSE volume is usually program trading which is nothing more than statistical arb driven by computer algorithms. I have no numbers on how many of these players have been hurt by recent market action but I am sure the drop in volume is partially caused by a shrunken level of mean reversion strategies.

Alphaville on Christopher Wood

Gwen Robinson at FT Alphaville does a nice job of spelling out the thinking ofChristopher Wood author of the superb GREED and FEAR report on the subprime mess . I used to get the Greed and Fear report second hand and it was consistently outstanding. I would love to get it still but I am not an institution and I am not eligible.
FT Alphaville has a series on his work. Read them and you will be better informed.
If any of you have access to Wood's writings please feel free to forward them to me.

Jonah Goldberg on hypocrisy

Jonah Goldberg writes a terrific column on the Larry Craig "bathroomgate" story.