Friday, May 9, 2008

Tyranny of the Minority

Rain has arrived here in Massachusetts. Wonderful. I am in the market for a grill, so if anyone has a suggested model that they like please let me know in the comments. I would prefer a charcoal grill, but the mess and effort involved is more than a gas grill. I just want some grilled steaks! We had electric heat at the old apartment, and the oven here is electric and you cannot cook a good steak without a good gas oven broiler or an outdoor grill. Just my opinion.

Myanmar Relief - A Quick Word
The scale of disaster in Myanmar (Burma) is much larger than I thought, and seems to get bigger as more information is gathered. The major problem with aid efforts is a silly reclusive government that rules it's people with an iron fist. Any severe dictatorship worth it's weight in fascism is well schooled in keeping any outsiders outside, so their fragile hold on power can be maintained.

So what can I, you, or anyone do? I guess try to donate to major relief organizations that are involved. Hopefully the help will get there and not be hijacked by the government for their own personal usage. If I were Emperor of course, I would send 2 aircraft carriers and 3 divisions of amphibious Marines to invade and overthrow the government in less than 2 days. Then maybe the people there could get some kind of reasonable representation going. Instead of helping truly desperate people like those in Myanmar, we are stuck over in Iraq. What can you do.

The Tyranny of the Minority
There is indeed a new bubble to be aware of, and that bubble is the "bailout bubble". Programs of all sorts and acronyms have made the rounds over the last 6-8 months, each getting bigger and more dumb as we go along. The latest was the US House of Representatives passing a bill sponsored by Barney Frank (yes, he is from Massachusetts! Sorry Country!) which promises big time cash for mortgage bailouts, as well as cash to take care of empty homes. There is a speculative mania in bailouts right now, so beware buying any ETF's that specialize in tracking bailouts, we may be near a top!

What has really started to get me aggravated is this desperate rush to save a small number of retards that are in trouble with their mortgages. Let us assume a few numbers just for arguments sake, and yes I know what happens when you assume!

For this discussion, assume that 90% of of all outstanding mortgage holders are current and on time with their payments (I am sure it is higher) so that 10% of mortgage holders are in some stage of default. We will further assume that the entire 10% of late payers will be foreclosed (this would be high).

With that in mind, what the heck is the rush for all the bailout plans? Forget the "systemic banking collapse" argument for a moment, I want to focus on why more people across the country are not OUTRAGED at this blatant money drop for fools.

I think I have an idea. The 90% are mad and upset with the reward system being put in place for irresponsible borrowers. I am sure of it. I am equally sure that those same "homeowners" are terrified that their major asset, their home, will lose value over the next few years. They are only concerned that the bailout plans in effect prop up their home prices. A selfish and understandable desire.

It smacks me as disingenuous as public officials are out in force trying to act like they even care about people losing their homes. They don't. They are concerned with large numbers of voters losing equity in their homes though! If we could make it perfectly clear that these bailout plans will do nothing to stop home prices from falling (they won't stop that) I think the 90% out there would make more noise about the free ride being offered on their backs for the losers out there.

I realize this is subtle difference, but I think it is important to clearly define what is going on here. All the FED help, all the treasury plans, and all the bailout bills have one aim: to put some kind of artificial floor under home prices to maintain calm among middle class voters. Nobody gives two hoots about a bunch of fools getting kicked to the curb. When those curbside dwellers are dragging down the home values however, people care a whole lot. would like to stop the pretending that "preserving the American dream" or "keeping families in their homes" is anybodies main desire. It is not. If it was a fact that taking out foreclosure folks and shooting them dead and burying them in the back yard for fertilizer added $25,000 in garden equity to a home, gun sales would be way up. And yes, Americans are that greedy and craven.

So the current mess is clear example of the "Tyranny of the Minority" as failed flippers, dumb dreamers, wannabe real estate tycoons, and liars are holding the banking system and the home price scale hostage. It speaks volumes about the banking system that it can be this fragile. It says allot about how disconnected from fundamentals home prices became that they can rise and drop by huge percentages over a 6 year span. Both things are broken and both must be allowed to go where they must.

Ok, enough with the heavy stuff! It is Friday night and that means some entertainment, yes?

Here is a scene playing out all across America as adjustable rate teaser loans get reset:
lolcat - oh noez mah mortgage dun readjusted
more cat pictures

If you get pulled over for DUI, at least try and stand up during the field sobriety test:


Time for some Music!

One of my favorite bands was Queensryche. Check out "Silent Lucidity":


While I love almost all songs by the Eagles, I especially love "Tequila Sunrise":


Sadly they have already disbanded, but Audioslave for a brief moment showed how great rock and roll can be even today, sample "Like a Stone":


Have a good night.

10 comments:

GawainsGhost said...

GYC, I have been a fequent reader of your blog, because I like your perspective and you always have something interesting to say. But I have never made a comment until today.

As far as steaks go, you're absolutely right, nothing beats charcoal. But you have to throw in some mesquite wood. I don't know how easy that is to find way up in there in the great northeast, but down here in south Texas, nobody grills without it. Mesquite gives the meat a smoky, outdoor flavor that no other wood provides. It's far better than hickory or anything else.

As to grills, I recommend a Char-Griller. I got mine at the local HEB grocery (not sure they have those outside of Texas), but I'm pretty sure you could find one at Wal-Mart. It's not much, just an outdoor griller/smoker, but it is made of cast iron and does have a wood shelf on the side. What I like most about it is that it cost about $60.

I'm not much for expensive grills, because it's not the pit but the fire that makes for a great steak. Charcoal and mesquite make for the best, even on a cheap pit.

Besides, the money I saved on the grill I get to spend on the meat. I highly recommend Omaha Steaks. I love them. Their t-bones, bone-in sirloins and bone-in ribeyes are to die for, especially with their seasoning salt. In fact, everything they sell is delicious, but their pork chops, potatoes au gratin and pepper jack risotto cakes are exceptionally good. And their Private Reserve steaks, while expensive, are out of this world. Plus if you sign up for their emails, they will notify you when they have a 60% off sitewide sale. That's when I stock up.

I live in a small condo and drive an old truck. I don't get out much, but I eat like a king every night. To me, that's living.

Good luck in your grill search. Try to find some mesquite wood. And don't pass on Omaha Steaks. You won't regret it.

credit savvy said...

mortgage cat picture is pretty good


credit repair

getyourselfconnected said...

Sir Gawain,
I appreciate your suggestions. Mesquite chips are actually very common up here in the yankee country of massachusetts. I REALLY want a charcoal grill, but the cleanup will be a hassle. I don't know, maybe I will just go for it, you are right about grilling steaks on charcoal, nuthin like it. What part of Texas are you from? I once visited the Arlington area and had dinner at a SALTGRASS steakhouse which was amazing! thanks for leaving a comment, please keep reading.

CreditSavy,
I love that cat picture too, thanks for stopping in~!

GawainsGhost said...

Arlington is about a 13 hour drive from where I am now. I live in deep

GawainsGhost said...

Sorry, I experienced a computer shut down. Anyway, I live in deep South Texas, about 10 miles from the Mexican border. Originally I am from San Antonio though.

Never worry about the clean up of a charcoal grill. It's worth it. The steak is all. There is nothing better than a thick, juicy, tender, succulent steak grilled over a charcoal and mesquite wood fire. Nothing. What is a few minutes of cleaning up compared to the best dinner possible? Not much in my mind.

Rest assured I will keep reading. I check your blog every night, and I have yet to be disappointed with your insight.

But I will quibble with you over terms. Above you mentioned that a house is an asset. This is not correct, at least by my definition.

An asset generates income. A liability generates expenses. By this definition, the house you live in cannot be an asset--it does not generate income. More accurately it is a capital savings (equity) account with expenses (taxes, utilities, maintenance, insurance). An investment property may be an asset, but only if the rent income exceeds the expenses associated with ownership, thereby generating a profit.

I argue with economists about this all the time. They seem to think that an asset is anything of value. But value is not income. I find it incredible how many educated people cannot understand the distinction.

Anonymous said...

When does the Majority finally figure out A New Inflationary Epoch

http://www.prudentbear.com/index.php/CreditBubbleBulletinHome

Hope it doesn't come to hyperinflation but with what is going on I think it just might. Hunkered down on the farm.

Kevin

Anonymous said...

Some grilling tips.

1. You can cook faster with gas.
2. You can cook better tasting food with coals/wood chips.
3. You will have less time to drink beer if you cook your food quickly.
4. You will consume more beer waiting for the coals to be just right and hence the food will taste even better.

This is a must for charcoal grilling.

amazon.com/tag/coal%20starter

Lighter fluid is blasphemy.

I like hickory chips but then again that's all I have ever used. I run with good old fashioned http://www.kingsford.com

Now kittehz r cute.

So just a quick show of hands:

At what point does hyperinflation become apparent? $4 gas? $5 gas? Or when it costs as much per gallon as I get paid per hour. Note it's almost half way there now.

G

PS: Have a good weekend and grill a steak for me.

Steve said...

You are Spot on with your assessment. We are a nation of cowards afraid that causing a squawk will hurt ourselves in the pocketbook.My senator Cochran MS is getting tired of hearig from me. I ain't gonna stop util he does the RIGHT THING and that is stop the nonesense about bailouts of any kind!

Anonymous said...

An oil-addicted ex-superpower

http://www.atimes.com/atimes/Global
_Economy/JE10Dj05.html

Pretty well sums it up and we're a broke one at that.

Kevin

getyourselfconnected said...

I am so sorry folks, but I bought a GAS grill today. I just do not have time most nights for charcoal and the setup needed. I have read a few articles that use mesquite chips wrapped in aluminum foil for the smokey flavor, so that is what I will try. Thanks for all the comments, I will have a post Sunday night!!