believe it or not

A friend asked me the other day:

"Perhaps you could explain the following:

"From newspapers and radio:

"More and more people have mortgages that are worth less than the worth of their house, so that these people have negative cash flow. As if that were a bad thing, and I do not even understand. If your job has not changed, and you could afford your mortgage, then nothing has changed. The value of your home decreasing would decrease your taxes (theoretically), and if you had to sell, so what? This is a great opportunity to purchase a home as well. Now, if you have lost your job, then it is another matter, but it has nothing to do with the decreasing value of your home. People should not be borrowing against their home as a matter of principle. It is probably those people who are in dire straits, and they should be!"

And, so I said:

It is mostly those who risked and took out mortgages at the adjustable rate, lured by low monthly payments to start with which then went up beyond what they could afford, thinking perhaps that they could re-finance, scoop up some resulting cash (if the prices kept going up), and thus keep on riding the wave. Well, the wave receded and they fell flat on their backs.

Additionally, even if mortgage payments did not go up, prices of other items did, thus reducing the available cash for other purposes (repairs, medical costs, entertainment, transportation, etc. etc.).

In my view, unless I can be reasonably certain to be able to afford future higher payments or be able to sell the home at a higher price, I would be really stupid to get into the variable rate mortgage deals I can not afford. In my view, those who did should lose their homes.

The reality is that all this hubbub about rescuing homeowners is another lie and deception. It has nothing to do with being humane but has everything to do with keeping the top echelons afloat and opening huge holes for future speculation and huge rip-offs of our money. How can you explain huge daily ups and downs in the stock market? Some, possibly those who actually have an influence on the direction market goes, are pocketing huge, unheard of super-profits.

These times are fantastic for speculators who also dare to manipulate the market as our attention is being kept elsewhere, they are reaping gigantic profits (4-6%, or even 1-2% daily is huge). If I had the desire to gain in this way I would be a very happy guy these days. You don't hear Buffets and the like complain, do you? I've got nothing against him and his ilk, more power to them!

This is like some whales fish. First they circle and circle tighter and tighter around and below a school of herrings, frighten them into a "corner," and then just scoop them up with open mouths without them even knowing what befell them. Like sheep running behind a blind ram and peacefully falling off the cliff. Except this ram is not blind but pretends he is and has a golden parachute attached to his back.

I could go on and on about this. I am not angry about it. I just continue to be disappointed in human race, disappointed in those who are willing to follow false prophets, follow something without knowing what it is they are really following. But, you know that's how I am. I want to understand before I accept. I am not much of a believer, which sometimes drives you mad.

And then he said:

"True. However I do agree with your analysis. I believe very little of what I hear. I ask questions as well. However, tango* is different from economy. And related to economy, one can be frozen and do nothing. I like you, have no sympathy for those who made poor decisions or were conned into doing so."

I thought this was sufficiently interesting, so -- here it is.

* my friend and I share passion for tango.

So-called "free market"

NPR's Morning Edition Sunday, Nov 11, 2008 reports:

"Sen. Dianne Feinstein, (D-CA) says she's disturbed by reports that some inauguration tickets are being sold online for as much as $40,000. She says she's writing to eBay and other sites to make sure they're not involved in ticket scalping. The 240,000 available tickets are supposed to be free to the public, and given out through congressional offices. Feinstein is also working on a bill that would make it a federal crime to sell tickets to the inauguration."

So now in this country which wants open markets around the world, free trade, which champions individual initiative, entrepreneurship, etc., etc., etc., a US Senator is disturbed that that same entrepreneurship might net some not-so-creative people some super profits. She wants to make it a federal crime. Wow, I am impressed by this hypocrisy.

Since when are we not supposed to take advantage of the supposedly free market and provide goods where there is a demand? Isn't that essential for free market capitalism.

Now what?

I must admit that it was fantastic to see the results of the presidential election on Tuesday. There is a score of reasons to celebrate. Lots of symbolism and victories on multiple fronts. I hope that, for one, they are not swallowed into the labyrinth of Democratic Party, which is a very autocratic, hierarchical political machine demanding party discipline in carrying out party's platform and not tolerating disobeying the authority of the "leaders.".

One of those victories is a new direction the country is promised to take under the leadership of President(-elect) Barack Obama. Assuming that that new direction will be undertaken, the success of its realization highly depends on how those in the base are able, willing, and allowed to shape that general, national direction into their specific local one and how well they implement it in their day-to-day actions.

A burning question related to that is how well those massive numbers of volunteers working on electing Candidate Obama president will now be engaged in the work ahead.

Candidate Obama spoke frequently of how change and development comes from the bottom up and not the other way around. I am waiting to see it realized. Will the base be allowed to take charge or not. Will all those volunteers, first, stick around and then, second, be allowed to actively shape the agenda appropriate for their particular socio-political environment.

If the answer to both question is "yes," we just might see a watershed moment for the world. The opportunity is there. Are we ready to take it?

Greenspan's mistake

Alan Greenspan: "I made a mistake in presuming that the self-interest of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms."

What his mistake really is is to believe that organizations behave like people do. There is no such thing as "self-interest of organizations." It might have existed at some point in the past, but in the era of high mobility of information, financial resources, and those individuals in decision making roles (various types of CEOs and such), perceived individual interests of decision makers do not coincide with those of the rest of the organizations even of their owners and so decision makers make decisions in their own perceived self-interest and move on to a different client/victim.

In addition to the ever increasing mobility of resources, another factor contributes to this new way of running business. It is the fact that the ownership of most organizations today is diluted, it is spread among huge multitude of small owners who (1) are too busy with their principal life supporting activity and/or are not educated and/or informed enough to study the issues and thus make quality decisions and consequently (2) delegate their decision making power of stockholders to the select few (either very large individual stockholders who are mostly doing just fine these days, or various funds where decisions are again made by the technocrats).

So, old Greenspan's mistake is not to take into account the effect of technological advances which changed the landscape of capitalism profoundly and continue to change it.

Political signs

I wonder if there is a city/county (Tallahassee/Leon) ordinance covering display of political signs. Do you know anything about it?

I had a presidential campaign sign displayed in front of my home for a few days only to wake up this morning and see it missing. I hope someone took it in order to display it in his or her yard :-) I see these signs displayed in my neighborhood and I do not think I violated any ordinance covering the display any differently than my neighbors have done whose signs are still up. Of course, one obvious possibility is that someone just did not like seeing my sign and decided to take it down. But, I am looking for other explanations. It was not the wind or any other act of nature, I am fairly sure of that.

What do you think?

Change

It is just amusing to me, this change thing. Both major nominees proclaim they will change politics in Washington. And many of their colleague supporters sitting in the audiences at the convention or other occasions dutifully nod in support.

And I am thinking to myself, who is is that determines how things are done in Washington? I am sure the nominees do not mean they would want to change the way garbage is being picked up or mass transportation managed. They certainly mean that they want to change the way government (of the people) works.

Well them, who is it that needs to make those changes? It seems to me that it is all those representatives and senators sitting and nodding their heads in approval of what the nominees are promising to do.

So, why are they waiting to indeed make them changes, whatever them changes may be, if they so happily agree that the changes are needed and coming (only if their candidate wins, of course)? Why not start now? Why wait for January?

Something just does not compute in all that for me. What do you think? More of the same political baloney? Yeap. I'd say so. Baloney ... and whoever buys it is getting close to nothing for a very high price.

Stupidity

"Georgia is an ancient country, at the crossroads of Eastern Europe and Central Asia, and one of the world’s first nations to adopt Christianity as an official religion."

That is attributed to John McCain as he was talking about current developments in Georgia (the country) and as it was reported in " McCain warns Russians of "severe, long-term negative consequences" ." So, does that imply that John McCain actually favors Christianity being adopted as an official (state) religion? I hope not, but it certainly sounds like that to me.