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:

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.