Yippee! Bailout package fails to pass House!

A wise man said:

"These capitalists generally act harmoniously and in concert to fleece the people, and now that they have got into a quarrel with themselves, we are called upon to appropriate the people’s money to settle the quarrel."

Why am I glad that the bailout package didn't pass, sending the market down almost 800 points?  Because it was a terrible bill, and we can do better.  This was like putting an arsonist in charge of putting out a fire.  This bill would not only have bailed out the institutions that deserved to fail, but also the failed executives that ran them into the ground.  Worse yet, it would have given near-dictatorial powers to an unelected official, the Treasury Secretary, whose actions would not be subject to Congressional oversight or judicial review.  A blank check for $700 billion, with no questions asked.

No thank you.  There will be another bailout package (and this won't be the last one, either, but that's a subject for another post.)  In the meanwhile the market went down 7%, but the companies with real assets and real balance sheets will come back.  Those who don't, like commercial banks, brokerage firms, insurance companies, investment banks - sorry, almost forgot, we don't have any more of them any more; one investment bank failed and the last two changed themselves into holding companies - will go out of business anyway.  I stopped adding up the total bailouts when they went over $1 trillion.  Lehman, AIG, the FDIC, the auto companies...there are a lot more to come with no end in sight.  The only reason the US Dollar hasn't gone off a cliff is that Europe and Asia have their own problems, and all currencies are weakening together.  Gold (and silver) should be soaring against ALL currencies, but those are kept under wraps on the futures exchanges. 

The answer is to buy physical metal, like coins and bars, but I think everyone else has figured that out now.  Coin dealers are generally sold out of silver, and don't have much gold left either.  When you CAN find silver, like on eBay, it sells at large premiums to the phony spot price.

The quote that opened this entry wasn't spoken this past week by some outraged taxpayer.  Some 90% of Americans were against this bailout, and I am disappointed that both McCain and especially Obama supported it.  The Congressmen who are assured re-election supported the bill.  Fortunately, there were enough Congressmen in tough re-election races that they were afraid of a public backlash in November, and voted it down.  For once they actually listened to their constituents.

So where did that quote come from?  Abraham Lincoln said it in a speech to the Illinois legislature in 1837.  The more things change, the more they remain the same.

For those who enjoyed seeing Hitler lose his shirt in the market, he managed to raise another stake and try again.  For another look at You-know-who's problems in the stock market, visit:

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

 

When in doubt, win the war!

I have been remiss from writing this blog, but I have a good excuse.  I have put the time to good use, and finished revising my third novel, which I call "When in Doubt, Win the War."  I shipped the manuscript to the publisher this week, and I will still have to review the galley proofs, but it is finally finished.  Only took me four years, too.  But in my defense, life kind of got in the way for a couple of those years.

Anyway, I meant to get back to writing about the economy, but so much has happened that I don't know where to start.  We are in the middle of a credit crunch that has knocked the stuffing out of silver, gold, and the related mining stocks.  Oil has gone down as well, but that was because of me.  I organized a one-man boycott and did not buy any gasoline in June, July, or August.  You can do stuff like that when you're retired.  The resulting demand destruction caused the oil price to collapse from near 150 to less than 100.

However, we are still in the midst of a secular bull market in commodities, and it is only government intervention on a scale the old Soviet Politburo would have been proud of that is restraining asset values.  The distortions in the market have become so blatant that even Hitler is angry about it.  Really, he is.  Just watch this video:

http://www.youtube.com/watch?v=eVB-SSkkLnY

That's what you get when you use margin.  Ol' Adolf didn't know that der trend iss your friend!  If only he had been able to hold on for a few more days, gold went up $85 on Wednesday.  Such are the fortunes of war.  Speaking of war, the lesson to be learned in times like these is that the time to buy is now, when there is blood in the streets.  Here is a lesson from history.

In 211 BC, Rome was at war with its ancient enemy, Carthage.  The great Carthaginian general Hannibal had already defeated the Romans in battle several times, and had slaughtered their armies.  In 211 he marched his army to the gates of Rome itself, throwing the city into a panic.  As luck would have it, the land outside the city happened to be up for sale.

Someone bought the property despite the fact that it was encumbered by having the entire Carthginian army camped on it.  The buyer must have been confident that Rome would eventually drive off the enemy.  And in the end, the Romans would sack Carthage, burn the city to the ground, and then dump salt in the earth so that nothing would ever grow there again.  The Romans took their wars seriously; no Marshall Plans for them.

But my point is that when things look bleak, that is the time to buy, not sell, as Fortune favors the bold.

Class and crass

Despite the disclaimer in the last entry, I'm going to write about the Olympics again, if only briefly.  The nice thing about being retired is that you can watch all the Olympic coverage you want.  And not just NBC and USA, even those weird DIRECTV channels I'd never heard of before.  Anyway, this is about volleyball.  Way back in high school, I had played volleyball in gym class.  And then again in college, so I knew the rules.  A match is 15 points, you have to win by 2, and only the serving team can score.  Or so I thought.

When I was watching the Olympic beach volleyball (remember the Silent Laciga Brothers?) I noticed that the rules were different.  A match went to 25 points, and they weren't using side-out scoring, either.  Either team could score a point.  I thought this was just due to beach volleyball being a spinoff of "real" volleyball.  But then on the final day, when USA was playing Brazil in "real" 6-on-6 volleyball, they were using the same crazy rules.

So I decided to look this up, and found that the rules had been changed in 1999.  That was three Olympics ago.  At this point I'm starting to feel kinda like Inspector Clouseau.  You have to get up pretty early in the morning to slip one by me, huh?  If you change the rules, I'll figure it out nine years later.  I blame this on work.  If I hadn't been spending so much time at that flight service station, I could have stayed on top of this other stuff.

Anyway, I miss the Olympics already.  And since it's over I had to search elsewhere for entertainment, so I went to see the movie Tropic Thunder.  It's hard to find a segue when you're going from the sublime to the ridiculous, but that's the difference between class and crass.

I will not actually review Tropic Thunder.  Let me first say that if you didn't find something offensive in this movie, you just weren't looking hard enough.  There was something in there to offend everyone, even when they weren't lampooning every Viet Nam movie ever made.  I'm not a big fan of political correctness, so that really doesn't bother me.  The problem is that while most of the movie was cleverly written, a lot of it could have been written by teenagers.

There are over-the-top performances by Ben Stiller, Jack Black, and Tom Cruise, among others.  Jack Blackis always over the top, but this time he was waaaaaay over the top.  Tom Cruise was uncredited, and this role supposed to be a secret, although the story leaked out on the Internet.  Not to me, of course, because I'm oblivious (see above, volleyball.)  And if it hadn't been pointed out to me, I wouldn't even have recognized him in his fat suit and balding wig.  Again, remember that I'm the guy who didn't pick up on the new volleyball rules for nine years.

The problem with the movie is that mixed in with all the inside references to other movies is a large amount of gross, sophmoric humor.  It's hard to pick out subtle clues when they keep hitting you over the head with a sledge hammer.  If I saw this movie three or four more times, I might pick up some of the stuff I missed, but I don't think anyone over the age of 18 could watch Tropic Thunder that many times and not suffer brain damage.

Lastly, here is an example.  I didn't know the movie had started, and thought I was watching an advertisement for an energy drink.  It was called Booty Sweat.  When I said crass, I meant it.  But if you want to see for yourself, you can actually buy it now.  Amazon sells Booty Sweat by the case.

http://www.amazon.com/Booty-Sweat-8-4-Ounce-Pack/dp/B001D3O9SW/ref=pd_bbs_sr_1?ie=UTF8&s=hpc&qid=1219996019&sr=8-1

Closing thoughts

OK, that's it for the Olympics for another four years.  Don't tell me about Vancouver.  I don't do snow.  People slipping and sliding around on ice and snow is not my idea of sports.  Looking back at the past two weeks, the Chinese put on a great show.  As far as memorable performances go, Michael Phelps, Usain Bolt, women's gymnastics, and Team USA basketball come to mind.  Soccer goalie Hope Solo is entitled to the biggest "I told you so" in recent memory.

I suppose the greatest controversy of the Beijing games is that 5 of their 6 gymnasts could be underage.  I don't care.  Setting the minimum age at 16 is purely arbitrary, and amounts to nothing more than age discrimination.  If we can change our voting age and drinking age, there is no reason the gymnastics federation can't change its minimum age.  If a 14-year-old diver can represent Great Britain at the Olympics, then 14-year-old gymnasts should be allowed to compete.  I want to see the best gymnasts in the world, not just the youngest or oldest.

On a related subject, I have to mention rhythmic gymnastics.  If I know next to nothing about "regular" gymnastics, then I know less than nothing about rhythmic gymnastics.  It's an obscure sport that I remember watching even twenty or thirty years ago, and I didn't understand it then, either.

It isn't very big in America.  As far as I can tell, all of the competitors come from former Soviet republics, and they're all named Ludmilla or Olga, or something like that.  I'm not sure, but I think when a girl grows up to be too tall to be a "real" gymnast, she goes into rhythmic gymnastics.  They perform their exercise routines with a piece of equipment like a hula hoop or a pair of batons.  Those don't interest me, but they also perform with a ribbon that must be about 20 feet long.

That's what caught my eye.  It's the image of a girl waving this streamer all over the place while she dances around inside it.  The color of the ribbon is coordinated with her leotard, and the visual effect can be mesmerizing.  They should dump the hula hoop and batons, and just have the girls wave that big, long ribbon thing around.  I can't tell a good performance from a bad one, but I actually recorded a couple of hours of it, and saved it on DVD.

As far as basketball is concerned, the 11-point victory over Spain shows that America needs its best players in the Olympics.  It would have been nice to have had Tim Duncan in that game, but he wasn't interested.

On the track, there was Usain Bolt breaking a world record without even trying.  Speaking of track, maybe they could design a new baton for relay races, something with a handle on it?

I missed seeing George F. Bush at the closing ceremony.  The opening ceremony was one of the most amazing shows ever staged, but it couldn't hold his interest.  The cameras caught him looking at his watch.  It reminded me of his father getting caught looking at his watch during a presidential debate.  Then he left the USA-China basketball game in the middle of the fourth quarter.  A billion people would have given anything for that seat, but they had to waste a ticket on him.  George F. Bush, in a few months, we will finally be rid of you.

That's all for the Olympics.  Now I will go back to writing about the boring and mundane matters of economics and finance.

USA 118, Spain 107, and all is right with the world

Second verse, same as the first.  Spain got its rematch with Team USA, and the game was a lot closer than I wanted it to be, but in the end Kobe, LeBron the rest pulled away to win by 118-107.

The first quarter looked more like a track meet, with the USA up 38-31.  With Kobe and LeBron in foul trouble, USA wasn't playing defense, but Wade came off the bench with a monster game, scoring 21 points in the first half, as USA led 69-61.

But the Americans could never pull away.  This was the first time their lack of size hurt them, as Pau Gasol scored about a million points, mostly on dunks and layups.  They had to keep Dwight Howard in the game for his defense, and his poor foul shooting kept things close.  How close?  With 8:13 left in the game, Team USA was clinging to a 2-point lead.

But then Kobe took over, making one big play after another to keep Spain at bay.  With 3:06 left, he hit a three, and was fouled to complete a 4-point play.  With USA ahead by 8, he put his finger to his lips to shush the crowd.  The game was finally decided when Chris Paul was fouled, and Spain committed a technical foul.  It didn't matter that Paul hasn't missed a free throw since he was 12 years old.  With the Olympic gold medal on the line, Kobe was going to take those two free throws, and Spain was done.

Throughout the tournament, it was TEAM USA that won every game, not a collection of stars.  Coach K went with an 8 or 9 man rotation that left stars like Carlos Boozer stuck on the bench.  All-Stars accepted being role players for the honor of representing their country, and that was the difference between this team and the one that played in Athens.  The 2008 version is a championship team, without the aloofness, arrogance, and poor sportsmanship of its predecessor.

There were a few more track and field events.  The Jamaican mens 4 x 100 relay team was heavily favored, especially since most of its competition forgot how to pass a baton, and didn't make it out of the prelims.  With Bolt and Powell running the last two legs, they demolished the world record.  Jamaica's women's relay team was also favored, but they couldn't figure out how to pass a baton, either.  In fact, they botched their baton pass so badly that they interfered with Great Britain, and knocked their team out of the competition too.  Lane?  What lane?  Maybe those track stars think all of those white lines are painted there just for decoration.

And now, since the basketball game kept me up half the night, I need some sleep.

Youth and skill defeat age and stupidity

I had an idea for a movie script.  It's a story about women's soccer.  The American team is playing in the World Cup, but in the semi-final they have to play Brazil, a traditional soccer powerhouse.  The American team has a chance, because they have a hot goalie, who has shut out their last three opponents.

But the coach decides to bench the young goalie in favor of an older veteran because...well, because the coach is an idiot.  Actually he wanted to go with a more experienced veteran who had already played against Brazil, but the real reason is that he's an idiot.

Brazil proceeds to shell the veteran goalie, and the rout is on.  Team USA gets blown out, losing to Brazil 4-0.  Here's where the story takes a twist.  The young goalie is irate at being benched after she had played so well, and vents her feelings to the press.  Among other things, she says she would have made those saves.

When the idiot coach hears about this, he is irate.  Surprisingly, incompetent people in positions of authority do not respond well to being told they are incompetent.  (This also applies to managers in corporations, government, and so on, but I digress.)  So the coach (did I mention that he's an idiot?) promptly kicks her off the team, and will not allow her to play in the consolation game for the bronze medal.

Her teammates are even worse, taking the cattiness to a new level.  Women being women, they completely ostracize her, refusing to eat meals with her, and don't even allow her to fly home on the plane with the rest of the team.

When the idiot coach gets home, he is fired because he's an idiot who benched the only player who could have given him a chance to beat Brazil.  A new coach is hired, and she's not an idiot.  It so happens that the following year is an Olympic year, and the new coach asks the players to take back the young goalie.  Some of them still don't like her, but they understand that they'll need her to have any chance of winning.

So the young goalie is on the Olympic team, and her teammates are professional enough to play with her even though they still resent her.  The team gets off to a rocky start in the Olympics, losing its first game.  But then they settle down, and actually make it to the finals, where they will play for the gold medal against...mighty Brazil!

Brazil is much better than Team USA, and they dominate the game.  They have two of the best attackers in the world, and they shred the porous American defense, firing one shot after another on goal.  The only thing Brazil can't do is score.  Because would you believe it?  The young goalie really DOES make those saves.  She turns back one shot after another, making great saves, making saves when she's screened by other players, almost single-handedly keeping America in the game.

Regulation ends in a scoreless tie, but six minutes into the extra time period, Team USA finally manages to score a goal, and they go on to upset mighty Brazil 1-0.  So one year after being booted off the national team, the goalie is now an Olympic champion, standing on the top step of the award platform with a gold medal around her neck, listening to the national anthem.

The problem with this script is that it's too far fetched.  No one would believe it.  If you brought this improbable story to a Hollywood producer, he'd throw you out of his office on your ear.  In fact, the only thing this story has going for it is that it's all true.  It happened this past week.  The goalie's name is Hope Solo, and the idiot coach's name is...well, he's an idiot, so he doesn't even deserve to have his name mentioned in my blog.

And that is why I watch the Olympics.  Every once in a while, justice is served.

Don't cry for me Argentina

Payback is a bitch.  Four years ago, Argentina eliminated Team USA in the semi-finals and went on to win the basketball gold medal.  Today Team USA returned the favor, winning 101-81.

The Americans took control early.  Argentina couldn't do anything right, and their leader Obi Wan Ginobili picked up two quick fouls in the first five minutes.  Then when it looked like things couldn't get any worse, Ginobili was injured and had to limp off the court.  Team USA had said they can't expect to blow teams out in the first quarter, but they ran up a 21-4 lead, and the quarter ended 30-11.

This looked like it was going to be the mother of all blowouts, with Argentina losing its best player.  But the second quarter was a strange reversal of fortune as Argentina went to a zone defense, and Team USA went to sleep.  The Americans held the ball, over-dribbled, and settled for outside jumpers, which they missed.  Argentina kept chipping away, and cut the lead to 6.  There was the usual strange international officiating, but basically Team USA stopped running, got no points off turnovers, no points in the paint...well, you get the idea.  At the half the USA still led 49-40, and that was only because of a ticky-tack foul that gave Camelo Anthony 3 free throws.

In the third quarter the Americans went back to basics, started attacking the zone.  It paid off as Argentina's big men got into foul trouble, and Team USA pulled away.  But even though Argentina didn't have much depth to begin with, and now they were undermanned, they were still in the game till the end, even though they never threatened again.  Before the Olympics started, I thought there would be some close games, and I guess this one qualifies, because it was a lot closer than it should have been.

The final game of the tournament will be a rematch with Spain, which Team USA pasted by 37 points last time around.  Spain has 5 or 6 players who have played (or will play) in the NBA, but this time it looks they may be missing their point guard Jose Calderon.  I think it's a good bet that Spain will be playing zone early and often.  But I don't think it will matter.

Gymnastics note:  even though the gymastics competition was over, some of the champions performed in a gymastics gala.  There were no judges, no scoring, and mercifully, no Bela.

I don't which sport has the smartest athletes, but I know which sport has the dumbest ones.  Track.  Hands down, with nothing else even close.  The US Mens 4 x 100 relay team was a medal contender, but failed to even qualify for the finals because they dropped the baton in their semi-final heat.  They DID manage to complete TWO of the three necessary passes, but Tyson Gay dropped the baton, and that was that.

Not to be outdone, THREE other relay teams were also disqualified because passing a baton around the track was too complicated for them, too.  Then in the other semi-final heat, two more teams were disqualified.  So a total of 6 out of 16 relay teams, including all three of the medalists at Athens, were disqualified. 

Then came the Womens 4 x 100 meter relay semi-final heat.  Again, Team USA was a medal favorite.  Again, Team USA did not make it into the finals, as they were disqualified, because...you guessed it!  They dropped the baton!  The damn thing only weighs 2 ounces.  How hard is it to pass a baton around the track without dropping it?

We also had the pleasure of watching Usain Bolt of Jamaica, who looks like a man running against boys.  Track needs more characters like him.  He had already won the 100 meter dash, breaking the world record despite slowing down in the last 15 meters to wave his arms and pound his chest.  Then he won the 200 meters, only this time he was serious and broke Michael Johnson's record, which had stood for 12 years, and looked unapproachable.

And on top of that, he didn't have a lot of competition.  Because BOTH the silver and bronze medalists were disqualified.  They didn't have to do anything complicated, like passing a baton, either.  All they had to do was stay in their lanes, but they couldn't manage that.  Sometimes I think their coaching sessions go something like this:

Runner:  Me run track.

Coach:  Stay in your lane.

Runner:  Me run fast.

Coach:  OK, but remember to stay in your lane.

Runner:  Lane?  What lane?

These are world class sprinters, and they're making mistakes you wouldn't expect to see at high school track meets.  I think I'm going to start rooting for Jamaica.