Okay, so maybe the Chinese aren't about to nuke our currency

And, the credit crunch isn't as bad as it may have seemed last week.

Here, cross posted from his weekly newsletter, is Dallas economist John Maudlin's explanation of each of those two scary closet monsters. John Maudlin is an economist whose commentary is very accessible yet thought provoking, and whose work I read each week. You can reach him (and ask for a newsletter subscription of your own) at JohnMauldin@InvestorsInsight.com.

China - Upping the Rhetorical Ante

Early this week the currency markets were roiled as not one but two senior Chinese officials publicly advocated using China's large dollar reserves as a political weapon should the US attempt sanctions on Chinese goods if the renminbi is not valued higher against the dollar. The two were senior officials at Chinese think tanks. Shifts in Chinese policy are often signaled through key think tanks and academics.

He Fan, an official at the Chinese Academy of Social Sciences, used uncharacteristically strong language, letting it be known that Beijing had the power to set off a dollar collapse if it choose to do so.

"China has accumulated a large sum of US dollars. Such a big sum, of which a considerable portion is in US treasury bonds, contributes a great deal to maintaining the position of the dollar as a reserve currency. Russia, Switzerland, and several other countries have reduced their dollar holdings.

"China is unlikely to follow suit as long as the Yuan's exchange rate is stable against the dollar. The Chinese central bank will be forced to sell dollars once the yuan appreciated dramatically, which might lead to a mass depreciation of the dollar," he told China Daily. (London Telegraph)

This comes as the US Congress will consider legislation that will implement tariffs on Chinese goods if China does not revalue its currency. Given the level of rhetoric from both political parties and presidential candidates, it is no wonder that China is finally responding with a little rhetorical shot of its own. After smiling at the editorial cartoon below, let's look at the likelihood of such an event.




China has an estimated $900 billion in US dollar reserves. There is no doubt that if they did decide to sell a few hundred billion here or there, they could push the dollar down against all currencies and not just the renminbi. That would also have the effect of increasing US interest rates on not just government bonds, but mortgages, car loans and all sorts of consumer credit.

Given the current state of the credit markets, that is not something that would be welcome. But it is not likely for several reasons. First, it is not in their best interests to do so. It would hurt the Chinese as much as the US, as it would devalue their entire dollar portfolio and clearly do damage to their number one export market - the US consumer.

Secondly, it is unlikely that the US will actually be able to get such legislation passed into law. Even if such legislation passed Congress (an admitted possibility) it would be vetoed by President Bush. That means that any real change would not be possible until some time in the middle of 2009.

The renminbi has already dropped almost 10% in the last two years since the Chinese started their policy of a crawling peg. For reasons I outlined at length a few weeks ago, it is likely that the Chinese are going to increase that pace over the next two years, for their own internal reasons. A higher renminbi valuation helps them slow their economy down from its way too fast pace of growth that is evident today. (If you would like to see that analysis, click here.)

By the time any real legislation could get passed, the renminbi will be very close to the level where the China bashers in Congress want to see it, if it is not already floating. Hardly enough to want to start a trade war at that time.

But let's look at what the bi-partisan economic illiterates in Congress are actually advocating. First, they whine about lost American jobs. But a 25% higher renminbi is not going to bring any manufacturing jobs back. China is no longer the low cost labor market. There are other Asian countries with lower labor costs. We just will not be able to competitively manufacture products that have high unskilled labor costs.

But we will continue to manufacture high value added items in a host of industries where skill and talent are required. Even though manufacturing as a percentage of US GDP is down, our actual level of exports and manufactured products is up by any measure. It is easy to write about the closing of a plant, and it makes the headlines, but the fact is that free trade has created more jobs by far than we have lost.

Secondly, if our cost of imports were to rise by 20-25%, that cannot be understood as anything but inflationary. And it would not just be Chinese products, but the products of all developing countries. Many Asian countries manage (manipulate) their currencies to keep them competitive against each other and the Chinese. You can bet that if the renminbi rises another 20%, there is the real prospect that they all will.

And much of what China and the rest of Asia produces is bought by those on the lower economic rungs of the US ladder. So, if Congress gets its way, they would be advocating putting pressure on those least capable of paying higher prices. But no one lobbies for the little guy. Congressional members can pander to their local unions and businesses without having to answer for what would be higher prices.

And higher prices means more inflation which means that interest rates have to be higher than they should, which means higher mortgage rates, etc. Protectionism has a very high cost. Free markets create more jobs everywhere.

Finally, we should hope the Chinese continue to allow their currency to rise slow and steady. Neither country needs the turmoil a rapid rise would induce. The world needs a stable China. We are watching world credits markets freeze up because things went very bad very quickly in the relatively small subprime world. A 20% drop in the dollar in a few months would be even more catastrophic. Senators Lindsey Graham and Chuck Schumer are competing to be this century's Smoot and Hawley that creates a depression from trade wars where none should be.

The danger in all this is that politicians who have little economic literacy create a hostile environment with their rhetorical poison, with both sides feeling the need to play to their "home crowd." That is a very dangerous environment.

It won't happen, but I would like to see the following question asked in the presidential debates to those (like Hillary Clinton, Obama and Dodd, etc.) who basically advocate a weaker dollar.

"Why are you advocating a weak dollar policy? Why do you want American wage earners to pay 25% more for the goods we buy from foreign countries? Do you really think there is no connection between the value of the Chinese currency and the rest of the currencies of the world? Do you think American consumers need to send even more money overseas and get less for our dollars? Do you think the American consumer is so well off they can afford to pay more and that it will have no affect on the US economy? Do you realize that a 25% lower dollar will mean a rise in world oil prices? Do you think there is no connection between the value of the dollar and US prosperity?"

I won't hold my breath.

On the credit liquidity crisis, hedge funds and sub-prime mortgage securities:

Back to 1998

Let's get in the Wayback Machine and revisit 1998. (For reference for my foreign readers, the "Wayback Machine" originally referred to a fictional machine from a segment of the cartoon The Rocky and Bullwinkle Show used to transport Mr. Peabody and Sherman back in time.)

First, there was the Asian currency crisis and then Russia looked like it would default on its debt, causing a crisis in the credit markets. A hedge fund called Long Term Capital Management had leveraged their bond positions about 80 to 1 based upon the relationship between certain types of bonds always, emphasize always, converging upon a certain price. They diversified on bonds throughout the world as an "extra" protection.

Except that the markets in the fall of 1998 were not acting as they had in the past. The relationships changed just a very small amount, but if you are leveraged 80 to 1, then small is enough to wipe you out. The Nobel Prize winners who designed the system overlooked the possibility that the market could become irrational.

Fast forward to 2007. Again, the credit markets are in turmoil, and the subprime mortgage problems are spreading, as predicted here last January. Let's look at some things that are similar to 1998.

First, normal relationships between certain types of bonds have been turned on their head. For many companies who go into the credit markets, there are different types of debt they sell. Certain types of bonds or loans are considered "senior" because in the event of the company going bankrupt, they get paid first. Then debt that is subordinated to the senior debt gets paid, and lastly the shareholders get to split what is left over, if anything.

So, clearly, it stands to reason that senior debt is more valuable than subordinated debt. Why would you pay more for the riskier debt? So, if you want to put on a hedge, you can "go long" the senior debt and "go short" the subordinated debt. And in the past, that works.

Except not this time. There are a number of funds that are having real problems and are being met with high redemptions because they are exposed to the subprime markets. But no one is buying the subprime debt, so they have to sell what they can to meet redemptions. And what sells? The quality senior debt. At a discount, of course.

So, if you are another fund holding that debt instrument that just traded down, you just saw the value of your high quality loan or bond drop. But because the subordinated debt you sold as a hedge is not trading, there is not a price for it, so you can't show the profit there should be on the pair trade. Your fund is down for the month. Bummer.

Now, if you are not over-leveraged and forced to sell, you can wait a few weeks or a month and the normal relationship will come back. And you may even benefit as quality will rise even as the riskier instruments fall. But until there is a price made on your hedges, you cannot just make up a price based upon normal rational markets.

And if you are in the lucky position of having cash, you can go in and buy very good debt at a fire sale price today. There are a lot of debt instruments of very good and profitable companies that is on the market for much less than what it will be in a few months when things get back to normal. And if you are a company with cash, you may be able to go back in and buy your debt at a discount.

The End of the Quantitative World

I should first note that the average hedge fund made money in July, and some did quite well. There are a number of hedge fund strategies that have the potential to benefit in this type of environment. That being said, if a fund has invested in the subprime mortgage space (unless they are short), they are losing money. It is easy to see the relationship between the subprime mess and the funds that invested in it. But there are other funds which are losing money, and the connection to the subprime markets is less clear.

There are any number of statistical relationships which have simply not functioned as they have in the past. Large quantitative hedge funds that employ teams of mathematicians and physicists to develop complex "black box" trading programs to computer trade on these relationships are finding themselves losing money. As Spencer Jakab writes:

"Quantitative hedge funds running 'black box' models are primarily market neutral, seeking to exploit small inefficiencies in valuations and historical volatility between similar securities. A period like the last few weeks would have typically seen such funds outperform most of their peers in the hedge-fund community, but they have instead shocked investors with steep losses.

"Because risk managers were able to demonstrate that they were less risky, on paper at least, they were allowed to use far more borrowed money than other leading hedge fund strategies. Some are clearly overextended. 'The inherent leverage is killing them,' said a broker at a major investment bank who deals with hedge funds."

"Analyst Matthew Rothman of Lehman Brothers wrote that the models are working in exactly the opposite way they should to protect a black box fund in an up or down market. 'It is not just that most factors are not working but rather they are working in a perverse manner,' wrote Rothman. 'The names that are short are outperforming, often notably, while the names that are long are underperforming, although less severely.'"

Goldman's Global Alpha, which has been losing money for two years, is down 26% for the year and down almost 40% since the end of July. It is not surprising they are being hit with redemptions. And that forces them to sell. Many of the largest hedge funds are the very quantitative funds that are being forced to sell, putting pressure on the markets.

In 1998 problems in Asia and Russia spread to the rest of the markets, affecting Norwegian bonds and US stocks. It took a few months to sort out, and a lot of people lost money. Today, problems in the subprime mortgage markets spread to other credit markets and the affect is spilling over into stock markets.

But there is a difference. Today, instead of one fund that was at the epicenter of the problem, the problems are spread around the world among scores of funds and permeate the largest institutional and pension funds. While that means the losses are spread among thousands of investors, it also means that central banks can't bring everyone to the table to "fix" the problem.

The problem of the last two days was triggered by BNP Paribas telling investors in three of their funds that they would not be allowed to redeem. This simply froze the European markets. The European Central Bank has injected $211 billion into their system. Central banks have put $339 billion into the world system in the last 48 hours. And you should be very glad they did, by the way.

I heard on TV that some are saying the Fed is bailing out banks. Not they way I read it. They are simply taking short term "repo" paper for a few days to inject liquidity. If you are going to have a central bank, then this is a proper action. The fact that the excess liquidity which produced the bubbles can be laid at the Greenspan Federal Reserve's feet is a topic for another day.

And while we are on the topic, I think BNP Paribas probably did the right thing. They have funds which have invested in all sorts of credit vehicles. Nothing is trading, so if they tried to meet redemptions, they would have to sell assets at much distressed prices, and then guess at what prices the other assets should be valued at in the absence of a market price. If they guessed to little, then those exiting would lose too much, notice their losses were too high and sue. If they guessed too high, then those remaining would notice that they lost more than they should have and then sue. BNP was in a no win situation. To be fair to all investors, they have to wait until the market prices the assets in their portfolio.

They have not said what those assets are. If they are not US mortgage related it is likely they will turn out ok. If there is subprime in the mix, they will take significant losses.

Subprime for a Long Time

And one last difference between 1998 and today. Back then, the problems in the markets became known and were priced into the markets in relatively short order. It is going to be several years before we know the extent of the subprime losses. Remember the table that I used last week which showed the bulk of subprime mortgage interest rate resets was not until the first half of 2008. It is going to take years for the markets to know what the losses on the subprime will actually be.

And it is not as if it should be a total surprise. Any investor can go to their Bloomberg and pull up a listing of subprime Residential Mortgage Backed Securities. There are 2,512 of them. If you sort by the ones with the most loans over 60 days past due, you find that the average RMBS has 12.39% of their mortgages over 60 days, and 2.39% have already been repossessed (REO in the next table), with almost 5% in foreclosure.

The table below shows the RMBS with the highest level of 60 day past due (or worse) mortgages in them. Yes, the worst two offenders are the 2006 vintage of RMBS. But notice that a lot are from 2000, 2001, 2003 and earlier, well before the supposedly lax standards of the past few years. The third listed RMBS, the INHEL 2001-B is selling at 18 cents on the dollar (you can't see this from the table), and has been dropping since 2003. Over 25% of the mortgages in that portfolio have already been repossessed or are in foreclosure, with another 25% past due for over 60 days. Can you say ugly?

But you can also find paper from 2001 that is not doing badly. It should be clear to anybody who did a little due diligence a few years ago that there were problems in the subprime RMBS markets. There was a great deal of difference in the quality of various offerings. So it paid you to do some homework. If you could not get transparency, then you were taking a gamble.

That being said, many of the European and Asian institutions who bought this paper relied on the credit rating agencies. They relied on the models built by the investment banks that put this paper together. As I have written, they sold their AAA rating but put legal language buried in the documents that basically said, "OK, this is not what we mean by AAA in our other ratings." The document for the RMBS mentioned above was 300 pages of fine print. I will bet you that the vast majority of people buying this paper did not read it or understand what they were reading if they did.

You can bet lawyers all over the world will look at this same screen I show below. They are then going to ask the bankers and credit agencies how they could put such a high rating on the paper seeing the problems in these securities? "Really, you didn't look at the lending standards?" It's all hindsight, of course. But that's what lawyers do. And in front of a jury, it will be a tough day for the banks and credit agencies.

Paris Hilton is hurting you

She's not just another vapid lily of the field, according to a new book she's causing you psychological and monetary injury.

Here, cross posted from Digby's Hullabaloo is a discussing/review of the book's subject matter and premise:

We hear a lot about income inequality these days and if you're like me, you probably wonder, other than the fundamental unfairness of it all, why this matters. After all, life isn't fair, get back to work and stop lallygagging.

As it turns out it matters a great deal, and that sense of dissatisfaction and anxiety so many of us feel is a direct result of the conspicuous consumption of the fabulously wealthy overclass trickling down through society and making it necessary for people to constantly buy more, even as they are earning the same. According to Frank, it's not just keeping up with the Joneses or class envy or any of the other things that people usually attribute to those who live beyond their means. It's a natural, human response to the context in which they live. Frank makes a compelling case that measuring yourself against your neighbors, co-workers or whatever, isn't just a matter of "keeping score." It's the way we make sense of the world. And that measure is affected every day by what the super-rich are buying.

In a delightfully droll passage, Frank describes going shopping to replace the battered $89.00 bar-b-q he'd used quite happily for years, until all his repairs finally failed and it fell apart. He sees this amazing Viking grill extravaganza with burners for stir frying and rotisseries that practically cook the food itself and deliver it to your table. It costs $5,000. But, boy is it awesome. He reluctantly turns away and contemplates a different model with some of the same features, but now that he's seen the top of the line, it just isn't as impressive. But being a responsible consumer he realizes that he can't be that extravagant and he considers buying this more basic model -- for $1,160. It's so improved from the banged up old $89.00 model on which he'd happily grilled for years they might as well not even be called a bar-b-q, but in spite of that, he feels a vague sense of disappointment at what it doesn't have compared to the fancy Lamborghini level grill. Buying it would feel positively frugal, even though it's ridiculously expensive on its own terms. I'm sure you've all been there. You have no idea what's out there, but once you see something with all the bells and whistles you subconsciously compare everything else you see to it. And something that you would have found to be an amazing improvement over what you once had, suddenly becomes a compromise.

For the record, Frank settles on a $250.00 Weber and felt extremely frugal buying it --- though it cost three times what his other grill had cost. But you can also tell by the loving detail with which he describes those more expensive models, that they made a lasting impression. He went back a year later to look at them again and the top of the line model was now $13,000.00 --- and that $1100.00 model now looks like a worthless piece of junk by comparison.

This is the mechanism by which the extremely wealthy change the context of our everyday lives in ways we aren't even aware. And in a society that ties such fundamental community functions such as schools and public safety to property values and perceptions of power, it is almost a matter of necessity that the middle class keep reaching for the bigger house and the bigger car in order to maintain a stake in their community. It is perfectly understandable that people want to have their kids educated in good schools and live in safe neighborhoods.

Neither is it counter-intuitive that if you need to be taken seriously by people who have money, you have to appear that you have money too. I remember being confused when I first started working in a business where there were always a lot of recent college grads in entry level grunt positions driving very fancy cars and dressing in designer clothes. It took me a while to realize that they were all children of wealth. As a result of their ability to give the properly successful appearance, those of us who didn't have money spent far more on such things than we had any right to, merely to even be in the running. I suspect this gets worse every year as the rich continue to shed the last vestiges of social restraint on flaunting their wealth.

The problem is that middle class American incomes are not even close keeping up with what they need to spend in this kind of cycle and haven't been for more than two decades, while income gains for these super-rich have been stratospheric. That's what's making everyone feel the squeeze: the middle class are working themselves into an early grave and taking on more debt than they can manage not because they are foolishly trying to keep up with Paris Hilton but because they have to in order to hang onto the place in society they already have.

Frank discusses at length the costs of this striving and I think we all can imagine what they are in terms of health and happiness. This is a sick little merry-go-round we're on. Fortunately, he has a novel solution that I would hope the powers that be would consider: a progressive consumption tax that would give an incentive for the rich to think twice about this reckless extravagance that's dragging everyone else down as they try to keep up. It would encourage saving among the rest of us, which virtually all economists agree is sorely needed, and if nothing else would force the super-wealthy to at least kick in something for the public good while they're running themselves ragged with their endless shopping for expensive gew gaws.

This is a very accessible little book, written in easy to understand language that gets to the heart of the problem for average people who are just trying to make a living and raise their kids and find some way to leave this world a little better than they found it. It gives us some real insight into how we actually find our place in the world around us and --- pursue happiness. That important knowledge leads to how we might change policies to actively encourage that fundamental American value.

Paris Hilton is hurting you

She's not just another vapid lily of the field, according to a new book she's causing you psychological and monetary injury.

Here, cross posted from Digby's Hullabaloo is a discussing/review of the book's subject matter and premise:

We hear a lot about income inequality these days and if you're like me, you probably wonder, other than the fundamental unfairness of it all, why this matters. After all, life isn't fair, get back to work and stop lallygagging.

As it turns out it matters a great deal, and that sense of dissatisfaction and anxiety so many of us feel is a direct result of the conspicuous consumption of the fabulously wealthy overclass trickling down through society and making it necessary for people to constantly buy more, even as they are earning the same. According to Frank, it's not just keeping up with the Joneses or class envy or any of the other things that people usually attribute to those who live beyond their means. It's a natural, human response to the context in which they live. Frank makes a compelling case that measuring yourself against your neighbors, co-workers or whatever, isn't just a matter of "keeping score." It's the way we make sense of the world. And that measure is affected every day by what the super-rich are buying.

In a delightfully droll passage, Frank describes going shopping to replace the battered $89.00 bar-b-q he'd used quite happily for years, until all his repairs finally failed and it fell apart. He sees this amazing Viking grill extravaganza with burners for stir frying and rotisseries that practically cook the food itself and deliver it to your table. It costs $5,000. But, boy is it awesome. He reluctantly turns away and contemplates a different model with some of the same features, but now that he's seen the top of the line, it just isn't as impressive. But being a responsible consumer he realizes that he can't be that extravagant and he considers buying this more basic model -- for $1,160. It's so improved from the banged up old $89.00 model on which he'd happily grilled for years they might as well not even be called a bar-b-q, but in spite of that, he feels a vague sense of disappointment at what it doesn't have compared to the fancy Lamborghini level grill. Buying it would feel positively frugal, even though it's ridiculously expensive on its own terms. I'm sure you've all been there. You have no idea what's out there, but once you see something with all the bells and whistles you subconsciously compare everything else you see to it. And something that you would have found to be an amazing improvement over what you once had, suddenly becomes a compromise.

For the record, Frank settles on a $250.00 Weber and felt extremely frugal buying it --- though it cost three times what his other grill had cost. But you can also tell by the loving detail with which he describes those more expensive models, that they made a lasting impression. He went back a year later to look at them again and the top of the line model was now $13,000.00 --- and that $1100.00 model now looks like a worthless piece of junk by comparison.

This is the mechanism by which the extremely wealthy change the context of our everyday lives in ways we aren't even aware. And in a society that ties such fundamental community functions such as schools and public safety to property values and perceptions of power, it is almost a matter of necessity that the middle class keep reaching for the bigger house and the bigger car in order to maintain a stake in their community. It is perfectly understandable that people want to have their kids educated in good schools and live in safe neighborhoods.

Neither is it counter-intuitive that if you need to be taken seriously by people who have money, you have to appear that you have money too. I remember being confused when I first started working in a business where there were always a lot of recent college grads in entry level grunt positions driving very fancy cars and dressing in designer clothes. It took me a while to realize that they were all children of wealth. As a result of their ability to give the properly successful appearance, those of us who didn't have money spent far more on such things than we had any right to, merely to even be in the running. I suspect this gets worse every year as the rich continue to shed the last vestiges of social restraint on flaunting their wealth.

The problem is that middle class American incomes are not even close keeping up with what they need to spend in this kind of cycle and haven't been for more than two decades, while income gains for these super-rich have been stratospheric. That's what's making everyone feel the squeeze: the middle class are working themselves into an early grave and taking on more debt than they can manage not because they are foolishly trying to keep up with Paris Hilton but because they have to in order to hang onto the place in society they already have.

Frank discusses at length the costs of this striving and I think we all can imagine what they are in terms of health and happiness. This is a sick little merry-go-round we're on. Fortunately, he has a novel solution that I would hope the powers that be would consider: a progressive consumption tax that would give an incentive for the rich to think twice about this reckless extravagance that's dragging everyone else down as they try to keep up. It would encourage saving among the rest of us, which virtually all economists agree is sorely needed, and if nothing else would force the super-wealthy to at least kick in something for the public good while they're running themselves ragged with their endless shopping for expensive gew gaws.

This is a very accessible little book, written in easy to understand language that gets to the heart of the problem for average people who are just trying to make a living and raise their kids and find some way to leave this world a little better than they found it. It gives us some real insight into how we actually find our place in the world around us and --- pursue happiness. That important knowledge leads to how we might change policies to actively encourage that fundamental American value.

Links about the credit liquidity crisis

Here are some links:

A Bloomberg article on the Central Bank efforts to stem the "run on the bank."

A Yahoo/AP article - same subject.

Yahoo/Reuters article - same subject, with more focus on foreign Central banks.

What's happening to hedge and bond funds managed by big names on "The Street" as their values collapse and even more investors sell out, including the next big name after Bear Stearns to feel the heat.

Now, for the socialists who stand with me - American Leftist has been doing a bunch of
articles about how this is going to affect those "without," while those "with" can always find new opportunities. His front page is always changing, so I can't link you to specific articles, but he's all about this (and not Iraq, and Defeatocrats, or Fright Wingers, or Neocons.)

Mortgage industry morbid humor

IMPORTANT GUIDELINE CHANGES

Very Important- Guideline Changes Effective August 8, 2007

All borrowers must have one blue eye and one brown eye to qualify.

LTV > 65% SIVA requires minimum credit score of 849.

For all LTV > 65%, 360 months of payment reserves now required.

Borrower's must have no previous bankruptcies in their family history going back
three generations.

A minimum of 25 years self-employment history now required for all NIV Programs (at same location).

Minimum Credit Score for Subprime Loans raised to 720.

All non-arm's length transaction borrowers (mortgage, real estate professionals,
family members) will be required to provide full-documentation, subject to
criminal background checks, wire tapping, strip-searches, and a minimum of 12
hours of interrogation by the Department of Homeland Security.

Please note that these changes will go into effect within the next five minutes. So please lock you existing loan immediately. All existing loans in your pipeline must fund by noon tomorrow.

We apologize for the inconvenience. We realize these are tough times in the mortgage
industry for all of us. Be assured that we have a commitment to remaining strong and
weathering out the storm. We ask for your understanding and cooperation.

"TRANSLATIONS"

These poke fun at the "stated/no income" programs that were made available over the last six years at low credit scores, combined with zero down payments.

The maximum credit score possible is 850.

A credit score of 720 or higher is considered statistically unlikely to ever make a late payment.

SIVA means "Stated income, verified assets." That means we tell them what the income is, but provide no proof, but the assets (money in the bank) is verified with third-party documentation (bank statements, etc.)

LTV means loan to value - anything less than 100% gives you the figure for how much the bank is lending and the difference is what the customer has as a down payment.

Non-arm's length transactions refer to deals where people with direct relationships (family members, business partners, etc.) are the buyer and seller, or borrower and mortgage broker. They are considered very risky, as the relationship bears a great deal of weight in determining what price is going to be paid, as opposed to market forces.

Which building will be our Bastille?

The mass of men lead lives of quiet desperation.

Henry David Thoreau (1817 - 1862), "Walden", 1854

My dad used to say this all the time.

I've been resisting the urge to run around in the street, flapping my arms and yelling "The SKY IS FALLING." Well, only since yesterday.

The Federal Reserve is BUYING mortgage backed securities. Uh .. is this akin to bailing the Titanic with a tin can? I don't know.

I've been sharing this ongoing bit of drama with a few friends, and they (being smart and thoroughly read) people are still having trouble understanding it.

So, here's my down and dirty description of what's happening - I apologize for any misstatements of "economic theory" or mis-attributions. But, basically, this is what's happening:

15:10] Brian : OK, remember, economics are not my forte.
[15:10] DrDivo1: okay
[15:12] Brian : So describe it in terms I can understand
[15:14] DrDivo1: http://www.bloomberg.com/apps/news?pid=20601087&sid=aZ.cxsJa71xg&refer=home
[15:14] DrDivo1: Okay, in terms that anyone should be able to relate to
[15:15] DrDivo1: six years ago, the economy was headed for a serious recession. Bush "won" the election campaigning that it would do so.
[15:15] DrDivo1: He came into office, and seven months later, we had 9/11 and a HUGE pulldown in economic activity.
[15:15] Brian : And GM got it back on track, so to speak, right?
[15:16] DrDivo1: to "prime" our nation's economy, which is 65% consumer spending, the government, through the banking regulators and the Federal Reserve relaxed lending requirements on home equity and home buying.
[15:16] DrDivo1: and they pushed interest rates down from the 6.5% range where they had been to the 5.00% range.
[15:16] DrDivo1: they held those interest rates down there for almost four years
[15:17] Brian : OK
[15:18] DrDivo1: These low interest rates, combined with relaxed credit regulations created a whole range of mortgage loan products that were unprecedented in their liberality and accessability
[15:18] Brian : Such as the interest-only mortgage?
[15:18] DrDivo1: hundreds of thousands of people bought "up" or bought homes that previously would have only been renters
[15:18] DrDivo1: and the low start mortgage payment
[15:18] DrDivo1: 100% financing
[15:18] DrDivo1: etc.
[15:18] Brian : Which aren't necessarily bad, per se.
[15:19] DrDivo1: the broad access to cheap credit also had people buying "investment" property with nothing down
[15:19] Brian : 100% financing is fine...if the person buying has decent credit and isn't buying to the max of what they're able to pay, right?
[15:19] DrDivo1: correct
[15:19] Brian : But people were buying homes beyond what they reasonably could afford.
[15:19] DrDivo1: but, these loans allowed people to borrow up to 55% of their monthly income in payment.
[15:20] Brian : And paying nothing towards the principal on the house, so they were building no equity
[15:20] DrDivo1: since the payments were kept articifically low by low "introductory" rates on adjustable rate mortgages or interest only mortgages ..
[15:20] Brian : On the assumption that the housing prices would go up and up and up and up and up. Right?
[15:20] DrDivo1: everyone was counting on the price appreciation which was based on the reduced cost and easier access to credit
[15:20] DrDivo1: yes
[15:20] Brian : And then people were compounding their debt by borrowing off the increased value of their homes, no?
[15:21] DrDivo1: yes
[15:21] DrDivo1: with which they bought swimming pools, cars, vacations, stocks ..
[15:21] Brian : Even though they had no equity in where they lived, and probably were upside down from the moment they took the keys.
[15:21] DrDivo1: our nation was living on home equity lending and new home sales for the last five years
[15:21] DrDivo1: People could live on what they could borrow on their increased equity in some states/markets
[15:22] Brian : Because houses were undervalued until about five, six years ago
[15:22] DrDivo1: no, house were valued at what they traded for.
[15:22] DrDivo1: Which was based on supply and demand
[15:22] DrDivo1: demand was artificially incented five ish years ago by the wide availability of very cheap credit
[15:22] Brian : But, I mean, some of this growth was fueled by people returning to downtown areas that were abandoned in the 60s
[15:23] DrDivo1: to respond to that increased demand, the home builders created huge tracts of new homes
[15:23] Brian : I remember back in the mid-90s, you could still buy property in DC for five figures, which was too low.
[15:23] DrDivo1: I'd say that so little of that growth was based on regentrification that it was insignificant
[15:23] Brian : And that was what kicked off the housing boom that spread to the suburbs
[15:23] Brian : I'd only say it was significant because it's what kicked off everything else.
[15:24] Brian : Though now, prices within regentrified areas are as out of whack as everywhere else.
[15:24] DrDivo1: the gentrification was based on low property values in those inner city areas, which is natural demand
[15:24] DrDivo1: if not more so
[15:24] DrDivo1: and in those inner city re-developed areas, the price falls are harder
[15:24] Brian : Then the suburbs? Really? Because that would seem to sheild cities like Atlanta and Houston more.
[15:25] Brian : But Atlanta has a repo rate twice the national average
[15:25] DrDivo1: all of the grown in Houston has been in the suburbs
[15:25] Brian : Same in Atlanta
[15:25] Brian : OK, so what happens then?
[15:26] DrDivo1: foreclosed homes start to overtake the natural supply - inventories of unsold homes increases beyond demand (especially now that interest rates have rebounded to near 7%) and prices start to fall
[15:26] DrDivo1: this creates more foreclosures, as people who can't sell or refinance are pressured to let their properties go
[15:27] Brian : OK
[15:28] DrDivo1: until the prices of the real estate fall to a point that those who can buy (usually as investment properties) start to buy, even with 10% or more down payment and interest rates around 8% - when it all balances back out.
[15:28] DrDivo1: Then, people who used to be homeowners and are now foreclosed out become renters again.
[15:28] Brian : OK
[15:29] Brian : And that's, what, 14 million homes right?
[15:29] DrDivo1: the tax base for local governments falls dramatically, as the falling real estate values begins to take down commercial values about 18 - 24 months later.
[15:30] DrDivo1: since raw residential land falls to near zero value, that falls into the commercial side sooner or later, as no land is worth what it was
[15:30] Brian : OK
[15:31] Brian : And then?
[15:32] DrDivo1: and then everything's down lower than it was before. And, for those who have money, a huge buying opportunity is created.
[15:32] DrDivo1: massive wealth transfer is accomplished.
[15:32] Brian : So, rich get richer?
[15:32] DrDivo1: very much so
[15:33] Brian : Since there's no proper taxation to rebalance income?
[15:33] DrDivo1: they got hugely richer by investing in these CBOs and then dumping them when they started to falter months ago
[15:33] DrDivo1: and now, they'll be able to buy up the properties with the money that they made off of developing them in the first place
[15:34] Brian : I see
[15:36] Brian : So, how is this stopped?
[15:36] DrDivo1: I don't know

That was what came before, but it makes more sense to discuss it after:

[14:45] DrDivo1: If I said something about the amount of money the central banks have been pumping into the economy, would it mean anything to you?
[14:46] Brian : Possibly.
[14:46] Brian : I do, you know, read and jonxt.
[14:46] DrDivo1: most people I know do, but this is beyond most of them.
[14:46] DrDivo1: Today, the Fed has put over $38B into the economy; more than $15B of that buy BUYING mortgage backed securities that aren't FNMA grade
[14:47] DrDivo1: Japan put in 9.5B today
[14:47] DrDivo1: dollars
[14:48] Brian : OK...explain
[14:49] DrDivo1: everyone who's invested into CBOs (non Fannie Mae mortgage backed securities) has been slammed - cash calls, increased pricing on their debt, stock declines in the 20 to 70% range.
[14:49] Brian : CBO = ?
[14:49] DrDivo1: all of the banks who have exposure to CBOs
[14:49] DrDivo1: collateralized bond obligation
[14:49] Brian : OK
[14:49] Brian : Go on
[14:49] DrDivo1: all of those banks have pulled ALL the way back on lending to mitigate their potential risk
[14:50] DrDivo1: some bakns are cutting off access to funds for some of their clients who have substnatial positions in CBOs
[14:50] Brian : OK
[14:50] DrDivo1: in Europe, Korean, Canada and here
[14:50] Brian : OK
[14:51] DrDivo1: so, the central banks are throwing money in - which they do by dropping interest rates on loaned liquidity to next to nothing
[14:51] DrDivo1: today, the NY Fed dropped its basic rate.
[14:51] DrDivo1: however, the Fed Funds are trading at a premium to the quoted rate - meaning (as I understand it) that the money is being soaked up faster than it's being released
[14:52] Brian : So...it's like a drought of money needed to keep the mortgage brokers liquid due to all the bad loans they made defaulting?
[14:52] DrDivo1: no
[14:52] Brian : Oh.
[14:52] DrDivo1: much much much higher up the food chain
[14:53] DrDivo1: keeping UBS Paine Webber liquid.
[14:53] DrDivo1: pension funds.
[14:53] DrDivo1: hedge funds.
[14:53] DrDivo1: Bank of America.
[14:53] Brian : Funds and banks that invested in the mortgage companies?
[14:53] DrDivo1: invested in the mortgages. Not the mortgage companies.
[14:53] Brian : How does a hedge fund invest in an individual mortgage?
[14:55] DrDivo1: the mortgages are "bundled" together into a CBO - then, the CBO (with the mortgages as security/collateral) are sold on the stock market
[14:56] Brian : I see
[14:58] Brian : So...these organizations that invested in these CBOs...what's happening to them?
[15:08] DrDivo1: their stock price has been slammed
[15:09] DrDivo1: the organizations that existed primarily to fund/sell these CBOs are basically without value
[15:09] Brian : I see.

So, what's looking more and more probable is that not only will our economy hit the wall, but our currency will devalue significantly. The housing market is SCREWED for two decades or more in the absence of a huge productivity boom (which I think is quite possible.)

I will admit that I, like my father, am so progressive that I'm a near Socialist. I believe that the Bushies put this together to a degree. Well, a BIG degree. After all, Bob Perry (one of the nation's largest home builders) was Bush's original "Pioneer."

But, this loosening of bank regulations put in place during the great depression has been coming on for years - and Bill Clinton was up to his nipples in working with the Gingrich Congress to make it happen. I also admit that I nearly always attribute any tendency of those who have to accumulate more to be at cause.

So, take it for what it's worth, filter out the dogma but this is basically what's going on. Absent our foreign debt, the oil markets, climate change, globalization and so on.

Twenty-four years ago

I stayed home one afternoon from grad school to watch Michael Jackson's "Thriller" video world debut on MTV. It was amazing - it's still very high quality work. I remember hearing that the choreography was .. blah blah .. so complex, etc.



Recently, a prison population in Cebu, Philippines has been quelling the normal boredom and frustration of custodial life by reproducing the entire production. An amateur film of these prisoners playing Michael Jackson and his army of zombie dancers has been one of the most highly watched videos on YouTube ...



Nothing as dramatic as a big drag queen "in trouble."

Of course, the whole thing has passed into the common realm to the point that it's parody:

Thursday night -

I'm watching "Making Love," 1982 - with Harry Hamlin. I haven't seen this since about .. um, 1982.

Funny how it's still apropos for today. Women of the world, if you have a man who's sexually active and is found to be missing from the world from time to time - WATCH THIS MOVIE.

It's only 21:36 and I'm already sleepy. Thank GOD.

Antibes Blue Dreams

Back to the future...

Our saber rattling has pushed Russia into resuming armed long range bomber missions - it's 1968 all over!! GO NEOCONS!

Russian bomber jets resume Cold War sorties - Yahoo! News





Yep. It's Dr. Strangelove! War Day! The Day After!

Who cares about climate change when the Evil Russians are going after us?

Oh, I think that there's a more immediate threat based on our saber rattling habits:

China Threatens to Dump Dollars

Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.

Shifts in Chinese policy are often announced through key think tanks and academies.

Described as China's "nuclear option" in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.

It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900bn in a mix of US bonds.

Here's what's really fun about that - if the Chinese were pushed by our arrogance into making such a choice, yes, they'd be cutting off their noses to spite their faces - BUT - they've got enough trade going to the rest of the world that it could be acceptable.

In our country? USAMERICA!

We'd have the collapse of the dollar on the world market - meaning, that a US Dollar would be worth - say - twenty-five Canadian pennies (stuff coming from Canada would cost four times more) or fifty British pence (ditto) or just over half a Euro.

The real fun would be that everything you buy at Wal-Mart now for cheap would increase in price by the fall of the dollar PLUS the rise in Chinese currency.

I guess that would reverse globalism in a heartbeat when our cost of doing business fell by 400% and we became instantly competitive and profitable again.

Assuming we could keep the lights on.

More of Harvey and some related topics

Do we really need heterosexuals anymore?

Significant to the "joke" is the inherent truth of the argument that, if God or evolution (whichever you subscribe to) didn't WANT us here, all the opportunities in the world have been passed by to get rid of us. We just keep popping into existence.

I look like Al Gore?

It must have just been the expression on my face.

Yesterday, I went to see "SiCKO" with David at the AMC Dunvale. Many of my readers have seen it. Many of my readers would rather cut off a limb and have to sit through an evening at Ben Taub's ER before they'd choose to see the film.

I'm just going to point out two things about the discussion of UHC -

Mark 12:28One of the teachers of the law came and heard them debating. Noticing that Jesus had given them a good answer, he asked him, "Of all the commandments, which is the most important?"

29"The most important one," answered Jesus, "is this: 'Hear, O Israel, the Lord our God, the Lord is one.[e] 30Love the Lord your God with all your heart and with all your soul and with all your mind and with all your strength.'[f] 31The second is this: 'Love your neighbor as yourself.'[g]There is no commandment greater than these."

32"Well said, teacher," the man replied. "You are right in saying that God is one and there is no other but him. 33To love him with all your heart, with all your understanding and with all your strength, and to love your neighbor as yourself is more important than all burnt offerings and sacrifices."

34When Jesus saw that he had answered wisely, he said to him, "You are not far from the kingdom of God." And from then on no one dared ask him any more questions.

“The greatness of a nation and its moral progress can be judged by the way its animals are treated.. I hold that, the more helpless a creature, the more entitled it is to protection by man from the cruelty of man"
-- Mahatma Gandhi (1869 - 1948)

Let all bear in mind that a society is judged not so much by the standards attained by its more affluent and privileged members as by the quality of life which it is able to assure for its weakest members.
~H.E. Javier Perez de Cuellar

The moral test of a government is how it treats those who are at the dawn of life, the children; those who are in the twilight of life, the aged; and those who are in the shadow of life, the sick and the needy, and the handicapped.
~Hubert Humphrey

Watching how France treats their citizens made me sick to my stomach. Watching how Cuban doctors took care of sick Americans for free made me ashamed. Having experienced the uninsured health care system in this country and having had the stress of uncertainty of being able to seek medical treatment, I can say that people who assault the concept of UHC are uninformed and without compassion or feeling for other people.

As we were walking out the the theater, a woman who had seen the movie with us said that I look like Al Gore.

A lovely compliment (in my book,) but not really true. I'd have to drop about 100 pounds, grow three inches, and slick my hair back. However, the moral indignation is there.

Guy thinks I need a radio show on XM, or that I should move to another, more equitable country. Bram's ready to head for France.

Hump Day thinking

Herbert Agar

"The truth that makes men free is for the most part the truth which men prefer not to hear."

Dick Cavett

"It's a rare person who wants to hear what he doesn't want to hear."

Tallulah Bankhead

"It's the good girls who keep diaries; the bad girls never have the time."

Sophocles

"The keenest sorrow is to recognize ourselves as the sole cause of all our adversities."

Barry LePatner

"Good judgment comes from experience, and experience comes from bad judgment."

The housing market, in which I participate as my primary business, has fallen apart. In the space of seven days, Wells Fargo (subprime,) ABC and Fieldstone have all gone out of business. We've had loans caught up in the ABC failure.

AS AMERICAN HOME FALLS, TOP BANKS MAY TAKE A HIT

By David Weidner 4:22 PM ET Jul 31, 2007

NEW YORK (MarketWatch) -- Investors in American Home Mortgage Investment Corp. may not be the only casualties as that lender teeters on the brink of liquidation.

Wall Street banks may also be on the hook for billions of dollars in bad loans.

Barclays, UBS, Bear Stearns Cos. and Bank of America Corp. are among the banks that provided a combined $9.7 billion in loans to back American Home's mortgage underwriting, according to the company's quarterly filing with the Securities and Exchange Commission.

American home said Tuesday it has missed margin calls from its lenders and has hired advisers to consider strategic options including the liquidation of its assets. Its shares plunged $9.43 to close at $1.04. See full story.

Among the loans American Home disclosed: a $2 billion pre-purchase facility with the Real Estate Securities unit of UBS , a $2.0 billion credit facility from Bear Stearns , a $1.3 billion syndicated loan led by Bank of America , a $1 billion loan from Barclays , a $1.5 billion syndicated loan led by Calyon Securities and a $124 million loan from J.P. Morgan Chase & Co. .

It also has a $250 million credit facility with ABN Amro .

American Home said there are committed credit lines for the loans from Bank of America, J.P. Morgan Chase and Calyon Securities.

The company also said it has sale gestation facilities with UBS, Greenwich Capital Financial Products, Inc., Societe Generale, and Deutsche Bank .

Representatives from UBS, Bank of America and Barclays did not immediately return calls seeking comment. A spokeswoman for Bear Stearns declined comment. A spokesman for J.P. Morgan declined comment.

Officials from ABN Amro and Calyon Securities could not be reached.

Click here for a more socialist or progressive view of what's happening in the housing market.

After days like the last few, I begin to think that the world's coming to an end much sooner than anyone could have predicted, and that it's going to get ugly.

James Cramer of thestreet.com created a buzz by telling people who purchased homes in 2006, people who are facing price declines of 20% to 30%, to walk away from them and default on their loans. According to Cramer, better to default, and preserve your credit cards and your car so that you can still function in this society. Not surprisingly, along with giving such unsolicited advice, he expects a 100% default rate on adjustible rate mortgages financed from February 2006 to January 2007.
Cramer, a former hedge fund manager (before they became ubiquitous) who has recast himself as a media personality, is highly visible on television (MSNBC), radio (a weekend syndicated program) and the 'Net (thestreet.com), so a lot of people heard what he said. At first, I was shocked by his blunt candor, and the alarming consequences for home prices and home mortgage lenders, but there may an explanation that provides some insight into the severity of the current situation.

Note Cramer's emphasis upon preserving access to credit card debt and car financing. As I have noted in the more sinister context of neoliberalism in the lesser developed world, if you are unable to access credit to consume, you run the risk of becoming superfluous, because economic efficiencies created by technological advances have sharply reduced the need to employ people to participate in the production of commodities, as I have observed here (click on the comments to this post over at Democracy in America) and here.

Accordingly, one can interpret Cramer's advice as an indication of the urgency of preserving the ability of people to consume with the use of credit. Or, to put it slightly differently, if people attempt the impossible, and stay in their homes, paying sharply increased mortgage payments after their initial adjustible teaser rates expire, they will destroy their access to any form of credit, and lose the ability to purchase things like cars, designer clothes, personal computers and flat panel televisions. They will have been, in effect, forcibly separated from most of the markets of commodity consumption in a capitalist system, reduced to purchasing goods required for their basic needs and some simple (measured in terms of low cost and ready availability) entertainment items, such as DVDs and video games.

Cramer is implicitly sensitive to the peril, recall his specific remark that people should keep their cars. He is expressly concerned about the undeniable fact that it is hard to live in the US without a vehicle, but he is also worried that people will be unable to purchase cars in the future if they allow their credit to be completely eradicated. He is willing to sacrifice financial institutions, brokerage houses and investment funds involved in the speculative and fraudulent excesses of the housing bubble, so that the other sectors of the economy can survive.

Cramer's willingness to openly do so reveals the severity of the economic crisis before us, but it remains to be seen whether it is possible to surgically abandon the malefactors of the housing bubble successfully as he seems to believe. It all sounds like another manifestation of containment, a term recently used by government figures and financial experts to depreciate the significance of the threat, a term that has now been seized upon by critics as a universal short-hand form of ridicule.

Monday, Monday ver. 983.01

Seems that Comcast's efforts last Friday paid off in some ways.



My download speed is faster than T3. My signal continuity is crap, though, which is why I've got them coming out again. Tomorrow. At 1700. Yuck.

It's late, and I'm whipped. Time to take Jackie out and crawl into bed.

Thursday with the girls

I have dinner and a show tonight with Nancy and Nicole and that's going to be a lot of fun.

So, today I've been working on commercial deals. They take longer, but they're more reliable. And, they're completely within my own control for producing them as packages, which is a good thing.

The other day, while waiting for sanity to return..

The events of last week to me were so shocking - up until now, we've not been faced with direct affront to the Constitution. Everything in my lawyer trained brain has been chipping away at edges. Last week, we had direct affront and direct assertion that "those rules don't apply to us."

I've changed how I respond to Neoconic conversation. Most of the time, I'd try to counter their assertions with gentle facts and my own logic. Now, I'm directly questioning their sources and logic (especially after some kind assistance from Guy in focusing my dissatisfaction.) "Where did you hear THAT? Who said it? Where did they get their facts?"

Why does this work? Because it's a valid form of argument and debate.

BROOKS: But, so you think "OK, get out." On the other hand, if we leave....we could see 250,000 Iraqis die -- you had the John Burns quotation earlier in the program. So are we willing to prevent 10,000 Iraqi deaths a month at the cost of 125 Americans?

WOODWARD: And the problem, though, is we don't know. People can say, "Oh, it's going to be a disaster." I mean, you've -- you cite numbers which are pulled out of the air -- "10,000 dying" -- I mean that's -- where does that come from?

BROOKS: Well, A, it comes from John Burns. Second, it comes from the national intelligence...

WOODWARD: Well, no, he doesn’t say 10,000.

BROOKS: Well, no, no, but it talks about genocide.

WOODWARD: Yeah.

BROOKS: So I just picked that 10,000 out of the air.

They just make this shit up. We're going to see how long these ideas hold up when scrutinized. It ought to last about as long as "welfare mothers driving Cadillacs" and "illegal immigrants swamping the emergency rooms for free health care" bullshit.

We were talking about the movie "Sicko" the other day, and how it was portraying our health care "system" as fundamentally broken. That group's resident neocon was carrying on about how the doctors would leave, how there weren't enough good doctors now because of malpractice lawsuits, how the Big Pharma wouldn't research new drugs if they couldn't make a profit blah, blah, blah.

If there's even a lingering question in your mind about those points, or if you're still convinced that medical treatment in another country is a danger to your health (as did the lawyer who recently violated a "no travel" order from the CDC and traveled on commercial air carriers with a particularly nasty strain of TB) then you should read this.

Someone was telling me the other day that a hospice worker in a large medical facility associated with the US Government was alarmed that they were treating ten patients terminal with Mad Cow disease, for which there is no cure. This worker asserted that the US Government was intent on that humans were catching Mad Cow in the US out of the awareness of the population, so that the dead cow industry (including steak houses, McDonald's, and the monolithic food production corporations) could continue to abuse illegal migrant workers and pump cheap beef into our food supply. I'm going to do some searching of media articles on Mad Cow infections in humans to see if there is anything going on about this.

Okay, so you can concede that the Neoconic social arguments may have flaws, but after all they're just SO GOOD for the economy. Are ya sure, bunky?

The huge deficits that were created by the government's choices and the tax cuts are bearing down upon us, and it was the CLINTON administration's financial goodness that provided them with the cushion to transfer all of this wealth to the wealthy. And, the policies of this government disincentivize the next governments to change anything.

Just so you're clear - YOU reading this are NOT one of the wealthy persons who received a penny's benefit from all of this "robust economy."

And, and just so you're REALLY clear, the "fix" for social security isn't to have privatization, it's to index the benefits age to life expectancy and to raise the SS tax. A smidge.

If you're thinking that the Bush tax cuts "trickled down" into the economy as did Reagan's, you're smoking that voodoo weed (with credit to G.H.W. Bush, who called Reagan's "trickle down" plan "voodoo economics during the 1980 Republican primaries. Or did you not remember that?) there is now data, numbers, proof that it's not that way.

When Bush took office, the Dow was at 13,851. Most of the increase has been because of the corporate tax rate cuts that, conservatively, have added 20% to ALL stock prices. If you deflate the Dow (which is not an indicator that the economy is generally healthy for normal people - it's an indicator that the economy for fund managers, stock brokers and the investor class is healthy) by that amount, the Dow WOULD be at 11,081 - or a mere 381 points higher than nearly seven years ago.

Now factor in inflation and you have ... ? Not a Goddamned thing. They have not advanced the economy by the SOLE MEASURE THAT THEY CAN POINT TO by squat.

Good job on that voting booth choice there. You keep that sort of thing up, and we're going to be an amusement park for foreign tourists. ALL TERROR, ALL THE TIME! WHOOT! Vote for the Fright wing! They'll protect us!

Bram had a dream about me the other night that I was killed in a car jacking. The next night, Brian had a dream about me that I was living in Cuba - because Cuba was such a great place to live. In his dream, Cuba's current environment hadn't changed an iota, but the rest of the world had fallen apart, so it was now a paradise.

If any single point in this blog made you sit up and think "oh my, well .. " and you're wondering why we're here politically, it's because THIS is all anyone is willing to talk about.



If you're more concerned about John Edward's haircut than you are about what they're doing with your tax money and your Constitution, then you deserve to live in a shithole that makes Cuba look like paradise. I'll send you a postcard.

No politics. Not a shred. Nope. It's safe to read.

Where to start?

First of all, I love my new teakettle. It's pepper red, it's awesome, and it's slower than Vermont syrup in winter. The box had instructions (who knew?) that advise one shouldn't ever use high heat, only medium at most.

You have any idea how long it takes to heat water on medium heat?

However, the teakettle heats the water VERY hot. I made coffee this morning with the cool drip thing I got at the House of Coffee beans and a pot of water which had just been whistling on the stove. The coffee drips down through the paper filter (containing the coffee) and straight into the carafe. It (the coffee) was HOT. Like, tongue burning lava hot.

It was awesome!

Then, I took off the red bed stuff ('cause I was bored with it after three or four years) and replaced it with the beige. I like it. Now, I REALLY hate the sky blue paint in there.

I also swept, and dusted, and tidied. And as you know, railed about politics a while.

Picked up the dry cleaning. $29 for five pair of trousers and five shirts. Talked to the TV repair guy whose shop is next to the dry cleaner. He thinks that the TV can be easily repaired - I'll have to get Bram to help take it over there. He has a gorgeous Samsung LCD television that I'm really in love with.

This evening, Guy came over to hang out a little - he had a programmable thermostat that is vertically oriented and cooler than the one I already had, which tomorrow is going to the church. Vertically oriented, it covers the wallpaper that was behind the old Honeywell thermostat that we replaced back in March. Then, he went into the attic and balanced the air flow through the air handler - so now there is less air going into the front to bedrooms and a lot more coming out downstairs and into my room. YAY!

Larry and I were emailing today back and forth. He always has something going with his friends; tomorrow, people coming over to his place to hang out and have burgers on the grill. It's just crazy - I sit here most days alone (save and except for my computer) because there's no one to play with or hang out with.

Makes me think about moving to Dallas. Again.

Was talking to David, my best friend from college the other day. I was joking with him that someone in one of my yahoo groups was asking why we hadn't seen any new work from the porn star who is the reason for the group - I knew that said porno person lived in South Africa and was hard to get out of there to DO the work. I suggested to David that porn stars have expiry dates, and his was long past - he replied that he was actually going to use said pornpers in a movie next month, and was just then working on his airline ticket.

So, I pitched in and helped. He was quite stunned that I should know the rough airline connections between Johannesburg and the US; but, I do. I just can't help myself.

Saved him about $600.

It's almost time to head up to bed to get some sleep before church in the morning.

How does Bush feel about Roe vs. Wade?

He really doesn't care how the poor leave New Orleans.

So, a few days ago (if you clicked through and read the article about neocons and their unadulterated thoughts) we learned that the entitled, white, wealthy neocons believe that everyone other than themselves should be .. um .. killed, shunned or working in indentured servitude for them. And that Europe and England were overrun by Muslims and were basically lost to us. Well, not us - to them.

Now it's time for you to do some work. And for those who don't LIKE to have to think, ponder, consider, weigh, or evaluate, I'll give you the bullet points:

* The Bush administration has arguably (well, not really, but people will say it's not so) made it illegal to speak out again their policies at all
* The US Justice Department has been completely politicized to the extent that only the intentions of the Executive will be pursued
* The most important courts in the land have been completely politicized to the extent that only the intentions of the Executive will be enforced
* It is no longer possible to bring suit against the Federal Government to invalidate laws or policies on constitutional basis unless you can prove actual damage
* The Executive has declared itself above and beyond Congressional oversight, and declared itself exemption from subpoena, hearing, or testimony on issues that the Executive wishes not to speak about
* The mainstream media with very little exception is promoting the mission and message of the Executive
* The Executive is telling us that another significant terror attack is about to happen
* When it does, you can expect that these items set forth above will be used to suspend the national elections, prevent court challenges to the Executive's actions, take firm control of the media - including the internet, suspend the Bill of Rights (those parts of it not already suspended - just wait until they make private ownership of guns illegal) and likely suspend the Congress.

The actions taken without resistance by the People, the Congress and the media are nearly identical to those taken in Nazi Germany that allowed Hitler to declare the opposing political party members to be traitors and criminals, to dissolve their party, arrest and detain those political leaders and end any opposition to their policies. You should remember that the Nazi regime was the most financially corrupt of any organized government EVER in modern history - something that we here in the US are encroaching on as a record.

But, go ahead and think about what movie you're going to to watch this weekend - it's not like it's really going to change or anything.

A little click through here to listen to Reagan's assistant Secretary of the Treasury telling us that these folks are about to suspend the constitution and make USAmerica a police state. Unless we act RIGHT NOW.

Which is about as likely to happen as me getting out on a ladder today and painting the front of the house - us acting right now.

Of course, what if we all changed course against all predictable outcomes and began to actually scream, holler and pitch fits?

The government could seize all of your property, that's what. This woman's writing about this new tack is succinct and direct, and brings in historical elements that you should be aware of.

Bush Outlaws All War Protest In United States
By Sorcha Faal, and as reported to her Western Subscribers 7-19-7


In one of his most chilling moves to date against his own citizens,
the American War Leader has issued a sweeping order this week outlawing
all forms of protest against the Iraq war.

President Bush enacted into US law an 'Executive Order' on July 17th
titled "Blocking Property of Certain Persons Who Threaten Stabilization
Efforts in Iraq", and which says:

"By the authority vested in me as President by the Constitution and
the laws of the United States of America, including the International
Emergency Economic Powers Act, as amended (50 U.S.C. 1701 et seq.)(IEEPA), the
National Emergencies Act (50 U.S.C. 1601 et seq.)(NEA), and section
301 of title 3, United States Code,

I, GEORGE W. BUSH, President of the United States of America, find
that, due to the unusual and extraordinary threat to the national security and
foreign policy of the United States posed by acts of violence threatening the
peace and stability of Iraq and undermining efforts to promote economic
reconstruction and political reform in Iraq and to provide humanitarian
assistance to the Iraqi people, it is in the interests of the United States
to take additional steps with respect to the national emergency declared in
Executive Order 13303 of May 22, 2003, and expanded in Executive Order 13315
of August 28, 2003, and relied upon for additional steps taken in Executive
Order 13350 of July 29, 2004, and Executive Order 13364 of November 29, 2004."

According to Russian legal experts, the greatest concern to the American people are the underlying provisions of this new law, and which, they state, are written 'so broadly' as to outlaw all forms of protest against the war.

These provisions state:

"(ii) to have materially assisted, sponsored, or provided financial, material, logistical, or technical support for, or goods or services in support of, such an act or acts of violence or any person whose property and interests in property are blocked pursuant to this order; or

(b) The prohibitions in subsection (a) of this section include, but are not limited to, (i) the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order, and (ii) the receipt of any contribution or provision of funds, goods, or services from any such person.

(c) the term "United States person" means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.

All agencies of the United States Government are hereby directed to take all appropriate measures within their authority to carry out the provisions of
this order and, where appropriate, to advise the Secretary of the Treasury
in a timely manner of the measures taken."

To the subsection of this new US law, according to these legal experts, that
says "...the making of any contribution or provision of funds, goods, or services by, to, or for the benefit...", the insertion of the word 'services' has broad, and catastrophic, consequences for the American people in that any act deemed by their government to be against the Iraqi war is, in fact, supporting the 'enemy' and therefore threatens the 'stabilization of Iraq'.

In an even greater affront to the American people are the provisions of a law called The Patriot Act, and that should they run afoul of this new law they are forbidden to allow anyone to know about it, and as we can read as reported by the Seattle Times News Service:


"The [Patriot] act also expands the use of National Security Letters, which are a kind of warrant that the Justice Department writes for itself, authorizing its agents to seize such things as records of money movements, telephone calls and Internet visits. Recipients of a National Security Letter are not allowed to tell anyone about them, and so cannot contest them."

It is interesting to note, too, that this is not the first time that the United States has unleashed the brutal power of their government against its citizens to further their war aims and stifle domestic dissent, as during the European conflict of World War I they enacted a law called The Sedition Act of 1918 and which ...forbade Americans to use "disloyal, profane, scurrilous, or abusive language" about the United States government, flag, or armed forces during war."

It is curious to note that after the enactment of this new law there has been no protest by any of the other political leaders in the United States, with the exception of the only Muslim member of the United States Congress, Minnesota Democrat Keith Ellison, and who compared President Bush to the Nazi War Leader Adolph Hitler by stating the attacks upon the World Trade Center could be likened to the burning of the Reichstag.

Today, as the United States faces an imminent economic collapse, while at the same time its war bill has reached the staggering amount of $648 billion, one of the last freedoms the American people have had to protest their leaders actions against them, and other peoples in the World, has now been taken away from them, the freedom to speak and write in opposition to what is being done to them.

"If liberty means anything at all, it means the right to tell people what they do not want to hear.", said the great British writer George Orwell, but, and sadly, liberty has been lost to the once free people of the United States who are no longer allowed to tell their leaders, or each other, what they don't want to hear.

With this being so, the American people should, likewise, contemplate their 'new' future, and as, also, stated best by George Orwell, "If you want a vision of the future, imagine a boot stamping on a human face - forever."

C July 19, 2007 EU and US all rights reserved.

Neocon jokes

Courtesy of Andrew Sullivan, by way of Harper's magazine...



Q: What do you get when you cross a neocon with a lemming?

A: Peace.

* * *

Q. How many neocons does it take to screw in a light bulb.

A. None. God won’t let their light bulbs go out. And it’s an impertinent question.

or

A. None. George Bush predicts the light bulb will be fully capable of changing itself within 3 months.

* * *

George W. Bush, Dick Cheney, and Joe Lieberman are all flying over New Orleans in a Blackhawk, surveying the progress that has been made in rebuilding the city and the levees. As they fly over the Ninth Ward, Cheney looks out the window, grins, and says, “You know, I could throw a thousand-dollar bill out the window right now and make one of those poor bastards very happy.”

Bush says, “Well, I could throw ten hundred-dollar bills out the window right now and make TEN people very happy.”

Not to be outdone, Lieberman chimes in, “Oh yeah? Well, I could throw a hundred $10 bills out the window and make a HUNDRED Americans very happy.”

Hearing this, the copter pilot rolls his eyes and says, “Man, I could throw all three of you out the window and make 300 million Americans very happy.”

What if this has been a long-range plan coming to fruition?

Turns out that these neocons who have our country by the throat were going to try it in 1934:

1934: The Plot Against America

I’m back from the land of heather and thistles, not to mention wee drams and lukewarm ale, but on my way out a friend at the BBC alerted me to this, a not-to-miss program on the BBC this morning, accessible over the next several days by internet. It’s the story of the Plot Against America. I don’t mean the Philip Roth novel, nor even the Sinclair Lewis book, It Can’t Happen Here, but rather the historical events upon which these two works of fiction were based.

In November 1934, federal investigators uncovered an amazing plot involving some two dozen senior businessmen, a good many of them Wall Street financiers, to topple the government of the United States and install a fascist dictatorship. Roth’s novel is developed from several strands of this factual account; he assumed the plot is actually carried out, whereas in fact an alert FDR shut it down but stopped short of retaliatory measures against the plotters. A key element of the plot involved a retired prominent general who was to have raised a private army of 500,000 men from unemployed veterans and who blew the whistle when he learned more of what the plot entailed. The plot was heavily funded and well developed and had strong links with fascist forces abroad. A story in the New York Times and several other newspapers reported on it, and a special Congressional committee was created to conduct an investigation. The records of this committee were scrubbed and sealed away in the National Archives, where they have only recently been made available.

The Congressional committee kept the names of many of the participants under wraps and no criminal action was ever brought against them. But a few names have leaked out. And one is Prescott Bush, the grandfather of the incumbent president. Prescott Bush was of course deep into the business of the Hamburg-America Lines, and had tight relations throughout this period with the new Government that had come to power in Germany a year earlier under Chancellor Aldoph Hitler. It appears that Bush was to have formed a key liaison for the group with the new German government.

Prescott Bush, of course, went on to service as a U.S. Senator from Connecticut, and his son, George H.W. Bush emerged from World War II as a hero.

The Plot Against America portrayed in this episode of the BBC series “Document” gives fascinating insight into a dark and little known piece of American history in which the nation stood on the brink of betrayal. The role of the most powerful political dynastic family in the nation’s history in this whole affair is shocking.

Then, there's this ...

The Birchers from Digby, July 27, 2007

by tristero

The blogosphere seems astounded that Glenn Beck fluffed a John Bircher. In fact, it really should surpise no one. There is no ideological difference of any importance between modern conservatives and the John Birch Society, something I noted in my very first post, dated February 14, 2003:

In October of '02, I made a speech to a parent's gathering at my daughter's school about the Cuban Missile Crisis. In that speech I asserted that the Bush administration had been mistakenly classified by the press as "conservative." Instead, they are right-wing extremists with "intellectual" ties to the nuts of the Kennedy era, like Curtis Lemay or the John Birch Society members.

What follows is adopted from a post I wrote in September of '04.

The John Birch Society arose in the late 50's and rapidly grew to considerable prominence. It is worth noting that the Birchers were thought to be so extreme that William F. Buckley himself denounced them in the pages of National Review. Among their goals were:

1. The abolition of the graduated income tax.

2. The repeal of social security legislation.

3. The impeachment of various high government officials,

4..The end to busing for the purpose of school integration.

5. The end to U.S. membership in the United Nations.

As you can see, these goals, which were, 40 years ago, the platform of an extremist group on the fringes of American politics, are the all but spoken platform of the Bush administration and the modern Republican party. We have seen numerous attempts to eliminate the income tax; Bush has proposed changes to Social Security that will send it down the road to extinction; Bill Clinton was impeached and Governor Gray Davis of California removed from office; the busing issue has morphed into an intense focus of the easier-to-frame affirmative action; and the Bush administration, on the issue of Iraq and in many other ways, great and small, has worked assiduously to bypass the United Nations and make the actions of the UN worthless (see this notorious article by Perle for a neo-Bircher perspective.).

It is useful to read Bircher literature because, if for no other reason, it will give you insight into what underlies some -perhaps a lot - of the secular components of Bush's worldview.

Birch Society Founder Robert Welch believed that "an elite international cabal...is seeking to establish a world tyranny." In the U.S., that cabal was centered in the Council on Foreign Relations. Of course, Welch and his followers were convinced that Franklin Roosevelt was a communist and that the New Deal was pure socialism. But the Birchers went further. Some of the abettors of the vast communist conspiracy Welch saw as an imminent danger to freedom were President Dwight D. Eisenhower and John Foster Dulles.

But there is more, much more, to the Birchers than just this. At one point, the Birchers had "a minimum of 6,600 corporate-financed anticommunist broadcasts, carried by more than 1,300 radio and television stations at a total annual budget of about $20 million," which was an enormous sum in the early 60's.

Important Birch Society members were close to the Bush family and the close relationship between the families has continued to the present. The Birchers had major sponsors among Texas oilmen, of course, men like H.L.Hunt and J. Howard Pew. President George H. W. Bush was close enough to the Hunt family to say that H.L. Hunt's wife was "one of the loveliest human beings I have ever encountered." In the fall of 2004, the ambassador to Saudi Arabia is James C. Oberwetter; he was appointed by Bush II, and he was a high ranking member of the oil company founded by H.L. Hunt.

In short, the intellectual tradition, if you can call it that, that underlies Bushism is a branch of the conservative movement that's grown directly from the trunk of a crackpot tree. Since the 60's, the heirs to the Birchers dropped the more bizarre claims (no one's talking too much anymore about Eisenhower being a communist), and learned ways to disguise what they say (Dave Neiwert has written brilliantly on this; for a start, download his "Rush, Newspeak, and Fascism"). But they haven't lost sight of their end goal: to create an America fully in sync with Robert Welch's core vision.

Take, for example, the UN. Naturally, the role that an international organization might have in world affairs is a complex and subtle topic. However, the criticism and contempt Bush heaps on the UN does not address any of the real issues involved, nor can it, because it descends not from a serious intellectual engagement with the concepts, but from paranoid rumination.

The Bush administration's view of the UN and and the views of their apologists are directly analogous to the creationist assault on evolution. In both cases, there are serious issues and differences to be hashed out (how to respond to genocide/whether the punctuated equilibrium model fits the evidence for evolution). And in both cases, the people who are heaping the most scorn and garnering the most attention are completely unqualified for a serious, useful discussion.

So this says to me that all we're seeing is the success of these bastards (I want to call them cocksuckers, but that would make Fern's point to me when I visited Wendy in 1988, and I won't do it) in accomplishing their aims.

I've also read today that ALL of the military planning has been from the American Enterprise Institute on Iraq. NONE of it's coming from the Pentagon or from the Generals on the spot. All of it through Cheney.

Further to what I posted earlier

Here is a five page article in which Neocons, unedited and observed in their natural habitat, tell it the way they see it.

Compare this long tome to what I cross posted this morning, and tell me whether you understand the writer's viewpoint from this morning more clearly.

The serendipity of the two coming hot on each other's heels is nearly too much to bear.

Ah, Bill in Portland Maine

This guy is someone who's regular posts on Kos make me smile. I'm just going to show you the whole thing:

Iraq will become a Shiite theocracy.

General Patraeus will eventually be thrown on the scrapheap with all the other generals who displeased President Bush, Vice President Cheney, and Secretary of Vengeance Lieberman. A few months after he resigns he'll tell a congressional subcommittee that the Commander-in-Chief is insane.

The next "general" to be put in charge of Iraq will be a private contractor from Blackwater. Within 30 seconds of his appointment Senator Lindsay Graham will praise the amazing progress that "Skullcrusher Tim" is making.

"Atrios" is really Walter Cronkite. Duncan Black is his doorman.

Homes will soon be so cheap that they'll be offered as a free gift with the purchase of a flat-screen TV.

Free gift is redundant.

The first blogger to win a Pulitzer Prize will be either Digby or Glenn Greenwald.

The Catholic church isn’t sorry for its behavior during its decades-long, hierarchy-wide orgy with children. It is sorry, however, for getting caught. This is also true for whorehouse-frequenting "fidelity hawk" David Vitter, a sitting United States Senator whom children used to look up to but no longer do.

America's government is in a constitutional crisis but it's no big deal.

President Bush is to Congress as Cat is to Cat Box.

Democratic candidates who advocate for the poor must be poor themselves or else they're hypocrites. Democrats who promote environmental responsibility must stop using electricity and gas altogether or they're hypocrites. Republicans may flaunt their wealth and have sex with whores without penalty.

It's currently the middle of July. If you blink it'll be December.

Some clips from an article that I found speaks for me

This is from Daily Kos' poster AndyS in Colorado:

The first thing you should know about me is, I have Republican and right wing friends and family.

You should not take this in any way as approving of you, your philosophy, or the way those prominent people among you have destroyed and ruined not only the country, but the ability of some of us to even view you as fellow countrymen.

Nevertheless, I recognize the ability (unlike many of you) the need to "go along to get along".

To me, you "all" have destroyed civility, dialog, and compatriotship. Not me. To me, we are not fellow Americans, but only because you have made being fellow Americans impossible. We are Americans, you are something else. And I will not get into that here.

See, I don't want to destroy you, at least, not as human beings (I may very well want to destroy your political party). Instead, I want you to hit bottom.

So the first, Republican friends: These are business colleagues. I had no choice in their political affiliations. One of them told me, "All liberals should be lined up against a wall and shot", without provocation of any sort. He was smiling when he said it, but his eyes were cold. He meant it. Nevertheless, he and I are quite friendly and that relationship continues to this day. But, you should not confuse a necessary relationship with an optional one. And you should realize, even from these people, my attitude towards you all is informed by those people.

The second: Republican family: I barely talk to them anymore, in some sense, to my sorrow, in another sense, thanks to my final inability to take any more nonsense.

Other than those two categories, I have no Republican friends, nor do I wish for any.

Bill O'Reilly may state that liberals "hate" you. This is a distortion, but there is an element of juvenile truth in that observation, and I will explain the how and the why:

First of all, I despise the Republican predeliction for demonizing everything and everyone who (and that) does not conform to your ideology. It's not just that "you" started it, it's that the leaders of your movement, which you evidently approve of, continue it, with no evidence of contrition, remorse, or even will to desist.

What you may think you are seeing as "hate", I ask you to consider, as a somewhat dimmer reflection of your own hate, reflected back at you. And, like a reflection, it is a projection, the reflection of which will stop as soon as y'all stop emitting the radiation.

For me, as a gay man, it is very similar to a homophobe telling me I'm "intolerant" of them. Well, yes, that may be true, in terms of being intolerant of the intolerant, but only because homophobes tell me things like I should be put into a gas chamber, or a concentration camp. And, yes, I have been told those things directly.

In fact, I take it back -- it's exactly the same.

It's a point of human nature that those you hate will tend to hate you back, or at the very least, dislike you. I know of very few people (even so-called "Christians") who can rise above this basic human instinct to dislike those who dislike you. Yes, the Christian tradition tells its adherents to "love their enemies", though apparently very few of their followers actually seem to observe it.

And here is the rub, and a big part of the reason I consider Bill O'Reilly and all those like him, at best juvenile. What I would ask him: Just what the hell do you expect?

I will confess, unless you fit into the two categories listed above as people I have to deal with, I don't want anything to do with you.

You are not welcome in my home. I will not offer to sit down with you over a cup of coffee. I do not wish to speak with you or hear anything you have to say.

That is not because I am a hateful person -- exactly the opposite. It is because I have, finally, had enough of your (or at least, your political movement's) hate.


We are back, and we're done taking crap from you. So the best thing for your movement to do would be to dump your Ann Coulters, your Rush Limbaughs, your Newt Gingrich's and your Bill O'Reillys, your Michael Savages, your Michelle Malkins, your Jonah Goldbergs .. see? the list is endless. If you think you are better than them, then dump them in the garbage where they belong. And stop demonizing "liberals" as an entire group.

And maybe, just maybe, you should avoid slurs such as "Democrat" when "Democratic" is the appropriate word.

We will do the same, but we need good faith from you first, since your movement, by and large, started the hatemongering as a political tool. Nothing less will do than good faith first from you, for me.

If you genuinely are bewildered at so-called "liberal hate" you have only to read Daily Kos for a while, and witness the daily body dump of right wing hatred and contempt for us, to realize why.

If you want a real dialog, a productive dialog, it is possible, but not under the conditions your movement has fostered, and the conditions it has maintained.

If you want to fix it, and have a dialog, the proper time for a dialog is when you have communicated with your movement's leaders, and reformed yourselves. Until then, I believe, you are simply pissing in the wind. Some, well, ok, many of us are done with you.
If you want to have a dialog with me, you cannot have it under conditions of either direct or proxy contempt.

And, I'm sorry, but that's not unreasonable, or in any way, even remotely, "hateful".

Goodbye, and good luck.

My first dream with MOT and with guns!

So, in this dream, you and I and my parents were driving along in my red car on the I-45 feeder road near Lone Star Ford, and there was a white SUV in front of us that was parked with one driver side door open, and a very well dressed black man standing there.

He glared at me - I hadn't pulled up very close, but there was no way to go around him and I was just waiting.

He pulled out a VERY large handgun and I put the car in reverse and hit the gas. He fired a single shot as I flew backwards, trying to avoid the traffic that was behind me.

Then, we were driving around, trying to avoid the minions he had sent out to find us. A white guy in a blue van pulled up alongside and before I saw his gun, I stamped on the brake, changed direction and hit the gas hard.

We finally pulled into what looked like a rural and nearly abandoned group of lake front cottages and I pulled all the way into the back. The people who occupied one of these ramshackle places came out to see why were were pulling in behind their house, and we all went inside. They were very welcoming.

After a while, my dad suggested that we should go back out and try to go home. We drove home without incident, but when I opened my door - an intuition that something dangerous was inside.

And then - I woke up.

Only able to act in a manner consistent with the training

Yesterday, I drove to work (because it's Tom day - Tom the massage guy.) So, I drove into town (19 miles - at least a gallon and a half of gas plus 1.75 in tolls,) and parked. The car didn't move ALL day until 5:30 when I got into it to drive to the UPS store and to Tom's place behind the 611.

Then, I drove home - it was 7:00, so I thought I'd take the Katy Fwy, since it was SEVEN O'CLOCK and all - it took a fucking hour to get home. Two accidents. And another probably three gallons of gas (all the sitting and idling.)

Today, I'll ride the bus. It picks up on the corner by the door, costs a dollar and drops me off a block up the street from the office. Takes 45 minutes. The car will sit in the garage all day. I will read one of many of my spiritual or self-growth books that are unread on the way in. At any 10 minute interval after 4:00 that I want to go home, I walk two blocks to the stop and in 55 minutes, I'm homo.

For another dollar. And I'll read ANOTHER of my unread list on the way home.

Yet, I'd rather have my car. Amazing how we're conditioned.

Guy is telling me that emotion and other matters are far more involved here than is logic. Well, news flash - I have to FORCE the logic choice. This is why the work with the pattern and other than conscious beliefs are so important - otherwise, your conscious brain doesn't stand a chance.

Many years ago (well, four or five) Jenny Hunter used to tell me to break habits on a lower level - put the other sock on first. Tear apart your morning routine and do it all differently. Clean the kitchen differently. Do your laundry on a different day.

Lord, that woman knew what she was talking about.

What and where can I interrupt the patterned behavior by consciously forcing a different choice, and how will that show up in providing me with other, lesser visible but still controlling behavior patterns that I could force/choose to have be different?

The search re-continues.

Sunday - is it raining or sunny?

Or both? How many videos can one watch in one weekend?

We're wondering when or if the Comcastic technician is going to show up. Ah, he has just called. So, I advise Bram and .. Bram ensures that we get internetic. Or not.

There was a neighbor's non-secure wireless network that has been available from time to time - with about a single signal bar. Fun stuff. Hopefully, I'll be frustrating the neighborhood soon with big bad signal, totally locked down.

Just was amused a minute ago, responding to a potential client on guru.com. He's been pestering me since February. He wants 25 articles, 750 words in length, on various gay oriented subjects he has defined. He wants to pay $125 for the articles in toto. $.00666 per word. Back in March, when I found out that it was a for-profit web based naughty lingerie website he wanted these articles for. I said no. He has asked over and over - most times as if he didn't remember that we had talked. This morning, there was another message from him asking me why I kept sending him back messages saying that I wasn't interested.

Uh - which part of this is unequivocal?

Today, I replied by quoting him $75 per article, or $.10 per word. Hopefully, that will shut him down.

Reading, reading, reading about the various shenanigans in Washington and elsewhere. I'm feeling increasingly that there's a probability that the conservatives, especially those with fundamentalist religious ties, will be swept out of office come 2008. People (not here in Houston, except for the 16 of us that are "liberals") are fully aware that the Republicans are lock step with the President, and they don't like anything that they're seeing. The tax cuts - not working. People are increasingly frightened and insecure financially. The war? Don't get me started. Health care? That issue belongs in the ER.

I think that people are going to reflect on the promises of those who have governed us since 1994 (and don't be handing me that Bill Clinton hooey. He was no more liberal than was Dwight Eisenhower) and realize that it was all bunk.

"Politics is just like driving - you put it in "R" for reverse and "D" for forward.