No Runny Eggs

The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.

Archive for November 13th, 2008

Project Valour-IT fundraiser – 2008 edition

by @ 20:33. Tags:
Filed under Miscellaneous.

I’m a bit late to the party, but once again, Soldiers’ Angels is having a fundraiser for their Project Valour-IT through Thanksgiving Day. Project Valour-IT provides laptops and other technology to support servicemen and servicewomen who are recovering from hand and other severe injuries.

As usual, there are teams aligned along the five branches (Army, Navy, Air Force, Marines and Coast Guard, which has been split off from the Navy this year) to spur the competitive juices. Do rest assured that no matter which team you donate to, the money is going into the same pot, and that it is all going to buy that technology. For those of you who itemize, Soldiers’ Angels is a 501(c)(3) non-profit, so you can itemize the donations. Like last year, I simply can’t pick a single team, so instead, I’m going with all of them.

There also is a slight change in the look of the blog. During the fundraiser, I have moved “Day By Day” to the right sidebar so I can run the charts at the top of the page.



Theme change

by @ 20:18. Tags:
Filed under The Blog.

Mike Little, the author of this theme (Journalized), has released a WordPress 2.7-compliant version. Not only are widgets officially supported now (I had been using a self-hacked version), but tags, gravatars (which I will not be enabling) and threaded and paginated comments (which is coming with 2.7) are as well. Things should look only slightly different because I’m still using the Blue theme (I had been toying around with switching to Winter).

Naturally, I’ve done a wee bit of hacking. I had to put my randomized roll of bloat back in (the stock links widget is alphabetical with no way to change it), and make the search function stand out a bit more (the stock search widget is fugly, with no title).

Thanks, Mike. Glad to see you’re still alive.

What Is Paulson Smoking?

by @ 9:33. Filed under Economy, Politics - National.

Dad29’s comment on my Smith Barney post reminded me of a ridiculous  statement in Paulson’s written comments to Congress:

We are looking at ways to possibly use the TARP to encourage private investors to come back to this troubled market, by providing them access to federal financing while protecting the taxpayers’ investment. By doing so, we can lower costs and increase credit availability for consumers. Addressing the needs of the securitization sector will help get lending going again, helping consumers and supporting the U.S. economy. While this securitization effort is targeted at consumer financing, the program we are evaluating may also be used to support new commercial and residential mortgage-backed securities lending.   (emphasis mine)

In regular people speak, Paulson is suggesting that he wants to have part of the TARP funds focused on increasing consumer credit.   Note that he isn’t referring to mortgages because he talks about that seperately at the end of the quote.  

OK, I guess?

Hey, wait!   Haven’t I been reading articles about how over extended the consumer is on credit?   Haven’t I also been reading that unemployment is rising rapidly and many people are concerned about the security of their jobs?   I think I also remember reading that the consumers have seriously cut back on spending because of their concern about future income.

Detroit has quit selling cars.   Their lack of sales is not due to their high employment costs (although that may contribute).   Thier lack of sales is not due to foreign makers having (at least perceived) better quality and design (I’m pretty happy with my US vehicles).   Lastly, their lack of sales are due to a lack of credit (although it may hurt a bit)   No, the fact that Detroit is trucking in mothballs by the ton is because the consumer has quit buying because they are finally concerned about managing the financial house.   And it’s about time!

Consumer lending still exists.   Loans are available for people who qualify for them.   The only loans that have been cut back are the ones, similar to the housing mess, that you could get with no proof of income or ability to repay.   Those loans have dried up and they should.

Unfortunately, our economy had been living on mortgages, car and credit loans that were far beyond the means of many of their owners to pay back.   There is no short order fix for what we are experiencing.   They economy needs to reset to levels that are sustainable and not the ficticious “we never have to pay it back,” levels.

Hank Paulson needs to put his monopoly money back in his pocket.   None of what he is doing is going to speed or alter the resetting process.   Pushing more money into the economy at this time will only set us up for more pain once things settle….get ready for inflation like it’s 1979!

When Smith Barney Talks, People Listen!

by @ 5:47. Filed under Miscellaneous.

Or at least that’s what used to be said.

Today, the phrase is more like, “When Hank Paulson talks, the market listens!”

Hank Paulson went to Capitol Hill to give an update on how he’s been spending the TARP money.   The market went from a down day, to one of those that gets posted on the top end of the history charts.   Unfortunately, this is something we’ve become accustomed to when Paulson speaks.  

What did Paulson tell Congress?

  1. We didn’t know what we were doing.
  2. We don’t know what we’re doing now.
  3. We aren’t sure what we’ll do in the future.
  4. Trust me, I’m spending the money well!

You doubt me?

Remember when it was “urgent” that we get a bailout bill?   So urgent that a mere 10 pages, double spaced, was enough for Paulson to get $700 billion? At that time Paulson was urging passage of the bill so that he could go out and buy toxic debt, CDOs.   Remember all the questions about how the $700 billion was arrived at and Paulson’s kind of answer that it was 5% of outstanding debt?   Geez, as late as October 24th, Dana Perino  was making excuses for why Paulson hadn’t implemented his CDO buyout with, “it’s complicated.”   Yeah, well, that was then:

"Over these past weeks we have continued to examine the relative benefits of purchasing illiquid mortgage-related assets," Paulson said in a speech today. "Our assessment at this time is that this is not the most effective way to use TARP [Troubled Asset Relief Program] funds."

Instead of doing what he said he was going to do with the money, Paulson decided that direct infusions of capital into financial institutions was the way to go.   Paulson has been purchasing non voting stock or warrants for stock in various financial institutions.   Even though some have questioned whether the Treasury has been getting good value for their investments, Paulson has continued…up until now.  

After about $200 billion and about six weeks, Paulson has figured out, along with the Congressional buffoons, that if you put money into entities with “no strings attached,” that those entities will use the funds in their own best interests.   Funny thing is that the entity’s “best interest” hasn’t been aligning with what Congress and Paulson have thought the “best interest” was. This has made Congress mad (I don’t know why. After all, they were the ones that wrote the bill that was specifically vague in what Paulson could do with the money. If they didn’t care enough to put the time in to provide some guidance, why are they surprised when the actions are following to a “T” their lack of direction!) and has put just a hint of yolk on Paulson’s face.

In his written report and verbal comments, Paulson now wants to try a third path.   Paulson now believes that Treasury should use a combination of approaches.   He still believes that some direct cash infusions will occur.   Additionally, Paulson wants to do a matching fund approach where Treasury would match an amount raised through private equity (What have we got, some kind of a share-a-thon going on?)   Finally, Paulson told Congress that he didn’t want to be limited to just banks:

“We are carefully evaluating programs which would further leverage the impact of a TARP investment by attracting private capital, potentially through matching investments,” he said. “In developing a potential matching program, we will also consider capital needs of non-bank financial institutions not eligible for the current capital program; broadening access in this way would bring both benefits and  challenges.”

I would read that as “consumer loans,” most likely auto loans.

A couple of weeks back I reported on a study done  by the Federal Reserve Bank of Minneapolis.   They looked at the initial reasons that Paulson gave Congress that the bail out was needed.   The study concluded that the issues that Paulson claimed he was attacking, really weren’t impacting the economy.   The combination of that report with Paulson’s helter skeltering from one approach to the next, leaves me wondering whether Paulson knows what the problem is or how to actually affect it.

If only Smith Barney were still alive.   Maybe he’d have the answers.

[No Runny Eggs is proudly powered by WordPress.]