"Paulson says strongly committed to strong dollar"....... ummm WHAT?

From washingtonpost.com:

"The United States is strongly committed to a strong U.S. dollar and financial markets there are recovering from the subprime crisis, some quicker than others, U.S. Treasury Secretary Henry Paulson said on Tuesday."

Who are these guys kidding? How can this even been said in the same day as the Fed again cuts its target rate another quarter point? I hope that people are starting to sit up and take notice. The Fed does not care about you, they care about the banks, end of discussion.

Because of the inflation which is now running rampant over the last 5 years and is accelerating since the last two FED meetings, we have all effectively gotten huge pay cuts. Every time the FED cuts its target rate, inflation runs rampant, the value of the dollar falls and everything we purchase costs more. It doesn't get much simpler than that. But don't worry, Paulson and the US are committed to a strong dollar, which leads me to the chart of the day (US Dollar index over the last 6 months):

Torture

"In torture, he confessed to being a hermaphrodite, a CIA spy, a Buddhist Monk, a Catholic Bishop and the son of the king of Cambodia. He was actually just a school teacher whose crime was that he once spoke French."

An interesting perspective to read for those who believe we should do whatever is necessary to fight the "war on terror."

Where do you hide the money clip in a diaper?

From the www.washingtonpost.com

"Elrick Williams's toddler niece Carlyn may be one of the youngest contributors to this year's presidential campaign. The 2-year-old gave $2,300 to Sen. Barack Obama (D-Ill.). "

"So did her sister and brother, Imara, 13, and Ishmael, 9, and her cousins Chan and Alexis, both 13. Altogether, according to newly released campaign finance reports, the extended family of Williams, a wealthy Chicago financier, handed over nearly a dozen checks in March for the maximum allowed under federal law to Obama."

"Although campaign finance laws set a limit of $2,300 per donor per campaign, they do not explicitly bar donors based on age. And young donors abound in the fundraising reports filed by presidential contenders this year. "

"Just how much campaign cash is coming from children is uncertain -- the FEC does not require donors to provide their age. But the amount written by those identifying themselves as students on contribution forms has risen dramatically this year, according to an analysis by the Center for Responsive Politics. During the first six months of the 2000 presidential campaign, students gave $338,464. In 2004, that rose to $538,936. This year, the amount has nearly quadrupled, to $1,967,111."

This is just another reason why campaign finance laws do not work and will not work. Americans wish to contribute to campaigns in excess of campaign finance law and they will find ways to do it.

The Federal Election Commission was created in 1975 to enforce federal campaign laws. These laws can be found here. Take a look on your lunch break and see how far you get through 234 pages. These laws include necessary things like rules for administering federal elections, but a large portion is dedicated to the financing of federal elections.

The finance portion include such distinctions as an individual may only contribute $2300.00 to each individual candidate per election per year, $28,500.00 to a national party per year, but he/she may make "unlimited independent expenditures." An independent expenditure is "an expenditure for a communication which expressly advocates the election or defeat of a clearly identified candidate and which is made independently from the candidate's campaign."

First of all, the wealthy will always be disproportionally represented among those who contribute money to political candidates. Poor people do not have 5 dollars, let alone 2300 to contribute to a candidate.

Second of all, our government is based on popular support, which means candidates are elected by 51 percent of voters: Bill Gate's vote does not count anymore than mine and any candidate must at least attract a majority of the people to hold office. Sure a large amount of money is important for campaigning, but an unattractive, and therefore unelectable candidate, is still unattractive and unelectable (READ: the money follows the attractive candidate and not the candidate following the money).

Third of all, our large, Republican style of government ensures that no one group or one person can have too much of an impact on an election. A million dollars is chump change in American politics. There are probably tens of thousands of groups and individuals who can contribute this much. These groups, which politicians are quick to accept money from but also quick to point out as the problem, actually function as a check on each other.

Last of all, I am still not convinced that these laws are not unconstitutional: political speech is the most sacred of all rights.

The Bank Swarm

"In the 1990s, a period of mergers in the financial industry, many banks promoted online services and closed branches. But industry studies showed that customers wanted personal contact when managing their money, and banks began opening more branches in a surge fueled by new players such as Commerce, which models itself as a retail store. "

As a result "the number of branches in the District [of Columbia] has jumped nearly 20 percent, from 193 to 230;" in Chicago "branches have increased by 50 percent since 2002;" Manhattan has seen "a 41 percent rise."

First of all, I personally feel that banking will move further and further into cyberspace in the next few generations, which will consequently make the brick and mortar branch increasingly obsolete and costly. I think we are already seeing this phenomenon take place with the explosion of online banks and online only accounts. INGDirect and HSBC are driving conventional banks, that may have been more hesistant or resistant to move online, to offer online only style accounts.

Although there is still a large base that grew up with their local bank branch, knew its employees and sought the advice of these bankers, the newest generation has a limited recollection of using bank branches and therefore less attachment. This generation places more emphasis on convenience and speed and less emphasis on personal touch or a human face. Add to this the overall trend towards self-management of financial portfolios as information is readily available to all and the need for a personal banker who has an office in your neighborhood is less important.

Second of all, I dont agree that the overpopulating of bank branches is a problem: one, banks want to make money just like retail and commercial interests and therefore locate in areas with growth opportunity in general - if anything, the increase in bank branches to an area should serve as a harbinger of prosperity; two, the concentrating of bank branches increases competition, which means higher deposit rates and lower loan rates; three, like all things driven by market forces, the number of bank branches will ultimately be reeled in by acquisitions/mergers, competition and good old supply and demand.

I'd like to bone, but my mom cant drive me to your house.

"PORTLAND, Maine -- Pupils at a city middle school will be able to get birth control pills and patches at their student health center after the local school board approved the proposal Wednesday evening."

"The plan, offered by city health officials, makes King Middle School the first middle school in Maine to make a full range of contraception available to students in grades 6 through 8, according to the state Department of Health and Human Services. "

"Condoms have been available since 2002 to King students who have parental permission to be treated at its student health center."

I remember the kids who went to the nurse's office during my tenure in middle school and we used to laugh at them because the remedy for every affliction was to lie down on a cot and place a bright, yellow sponge on the forehead. You have lupus? Just lie down and place this damp, yellow sponge on your forehead. At the extreme was the hyperactive kid who went to the nurse after lunch time for some tranquilizer to keep him from driving the teacher crazy. Now while being treated for a tummy ache, you can get Delores to hook you up with some rubbers for that wild weekend of sex on your racecar bed. If you use the condoms while at school can you go back for a pack of cigarettes?

Also, what does parental permission mean in this context? Do students need permission to see the nurse and once there they can inquire about condoms or is parental permission needed before nurses can give out condoms? i cant imagine its the latter because I cant imagine a parent agreeing to that service.

I guess if kids are having sex then its best to make sure they will do so in a safe manner. It also makes sense to promote healthy habits while children are young. But it begs the question is there nothing that can be done about this phenomenon? Do parents have to accept the reality that their 11 year old will be having sex? Can parents exercise some authority and also teach their kids healthy habits? Can schools teach sex education without inciting a Kids Incorporated orgy?!!

Damn you Zach and Cody!!

Broken Arrow, Eh. Spells Trouble Dontcha Know.

"The Air Force has decided to relieve at least five of its officers of command and is considering filing criminal charges in connection with the Aug. 29 "Bent Spear" incident in which nuclear-armed cruise missiles were mistakenly flown from North Dakota to Louisiana, two senior Air Force officials said yesterday. "

"the problem originated at Minot (Air Force Base in North Dakota) when a pylon carrying six nuclear-armed cruise missiles was mistaken for one carrying unarmed missiles."

"The warheads were airborne for more than three hours and sat for long periods on runways at both air bases without a special guard."

We better get on the phone and call Christian Slater because I smell a plot by John Travolta to steal these weapons.

Immigration showdown

"Prince William County supervisors early this morning voted to move forward with a nationally watched plan to crack down on illegal immigrants by increasing local police enforcement and restricting certain public services. "

"The measures approved yesterday improve cooperation with federal immigration authorities and direct police to check the immigration status of anyone accused of breaking the law if the officer suspects that person is an illegal immigrant. They also would deny certain county services to illegal immigrants, including drug counseling, some elderly services, and business licenses. "

"But for hours yesterday afternoon and deep into the night, the podium belonged to residents, highlighting how visceral the issue has become. The list of speakers grew longer after the workday ended, as scores of Hispanic immigrants arrived to urge the supervisors to vote no, many speaking through translators. Children of immigrants, standing on stools, asked board members not to hurt their parents."

"Others pointed out that illegal immigrants are breaking the law. 'Where do you get off demanding services, rights and mandatory citizenship?' said Manassas resident Robert Stephens, addressing the large crowd of Hispanic residents. 'Who invited you? You cry for your rights? You have none.'"

Wow. Just like high gas prices, our country needs a stimulus like what is happening in localities like Prince William to encourage discussion about immigration policy and spur the Federal government to act.

Local governments should do everything they can to effectively police themselves. I dont believe asking one's immigration status is a violation of one's rights. I dont agree, however, with the gentleman quoted above saying that illegal immigrants have no rights. All human beings have rights and should be treated with a certain dignity. However, I agree that they have no claim to services provided by local governments.

I think many people involved in this debate have a heart and feel empathetic to the plight of illegal immigrants, but this should not obscure the fact that our nation functions according to the rule of law and that we have - however convoluted and asinine -- immigration laws and regulations. What we dont have are effective boundaries to complement these laws.

Unfortunately, many law abiding residents of our country are forgotten during this debate. There are many productive, valuable members of our society that leave every year because their visas expire or their attempt at citizenship falls short. Some of these people have to leave family members behind, move to Windsor, Ontario and work at a car manufacturing plant because their 12 year attempt at citizenship fails. If they can do it, so can everyone else who is here illegally.

Altria Earnings

"Altria Group, Inc. (NYSE: MO) today announced third-quarter diluted earnings per share from continuing operations of $1.24, up $0.19 or 18.1% versus the prior year, including favorable tax items of $0.05 per share and charges of $0.02 per share for asset impairment, exit and implementation costs, as well as other items detailed on the attached Schedule 7."

"'In the third quarter, we continued to witness improvement in our business fundamentals, which generated robust earnings growth,' said Louis C. Camilleri, chairman and chief executive officer of Altria Group, Inc. 'In addition, we took numerous steps to accelerate our growth by investing behind product innovation and announcing our intention to pursue a further restructuring of our company.'"

From Altria's website -- www.altria.com:

PM USA tobacco marketshare: 50.6%
PM USA third quarter revenue: $4 Billion, which is up 3.2% from Q3 2006
PM USA third quarter cigarette shipment volume: 47.1 Billion units, which is down 1% from Q3 2006

PM International third quarter revenue: $5.9 Billion, which is up 9.3% from Q3 2006
PM International third quarter cigarette shipment volume: 217.2 Billion units, which is up 0.6% from Q3 2006 (taking into account an aquisition in Pakistan). If we want to be picky and not count this acquisition, volume was actually down 4 billion units or 1.9%. If you want the country break down, you will need to read the entire earnings statement from their website.

In related Altria news:

"During the third quarter of 2007 Altria Group, Inc. increased its regular quarterly dividend by 8.7% to $0.75 per common share, which represents an annualized rate of $3.00 per common share."

Banks Create Money For a Fund to Bail Themselves Out

From The economist.com

"On Monday October 15th three of the largest banks launched the first big effort by the private sector to alleviate the [credit] crisis. Citigroup, JP Morgan Chase and Bank of America unveiled an agreement in principle for a fund, expected to be worth up to $100 billion, that would buy highly rated assets from troubled SIVs (structured investment vehicles). Other financial institutions are said to be considering joining. Although no government money will be available, America’s Treasury played an important role in the talks that led to the fund’s creation. The authorities worry that “disorderly” markets could drag down the economy."

This is still of course a temporary solution. The banks can create a false demand and trade each others junk for as long as they want. Eventually though, they will have to open up their books and show just what the assets are truly made of (or aren't made of), that will be the true day of reckoning. However when banks, who control and create the money supply, can form a $100 Billion fund to create a false market that day may be far in the distance.

The last part of the article is the best (emphasis added):

"Even those who support the fund admit that it is, at best, a temporary solution. As one banker puts it, it is about buying time so that the real problems facing the debt markets can be sorted out. In the case of asset-backed commercial paper, the two biggest are the inherently unstable structure of SIVs and their lack of transparency. Not only do they sit off their creators’ balance sheets but they do not even have to publish their holdings. Only when these underlying issues are addressed is confidence likely to return."

Lets see, when should we let everyone know that billions of dollars of assets are worth nothing, yet they have been the invisible profits that made up the last 5 years of earnings?

Phlegm

"Australian athletes have announced they will arrive in Beijing as late as possible because of concerns that the air quality might hinder their performance. Two weeks ago, two Ethiopian middle-distance running champions announced they would forgo some events because of the "disgusting weather and air pollution." New Zealand and American athletes say they will wear face masks if necessary. Even Jacques Rogge, president of the International Olympic Committee, warned that some endurance sports might be postponed if the pollution gets too bad."

"For athletes unaccustomed to Beijing's pollution, the assault can feel like 'an invisible wet rag that chokes your lungs,' Cassmassi said."

Yum.

Me Gusta El Amero!

Transcript From The Larry King Show:

"KING: E-mail from Mrs. Gonzalez in Elizabeth, New Jersey. "Mr. Fox, I would like to know how you feel about the possibility of having a Latin America united with one currency?"

FOX: Long term, very long term. What we propose together, President Bush and myself, it's ALCA, which is a trade union for all of the Americas. And everything was running fluently until Hugo Chavez came. He decided to isolate himself. He decided to combat the idea and destroy the idea...

KING: It's going to be like the euro dollar, you mean?

FOX: Well, that would be long, long term. I think the processes to go, first step into is trading agreement. And then further on, a new vision, like we are trying to do with NAFTA."

Many people show skeptisim on the formation of a North American Union which much like the European Union would be created by the formation of several North American countries. However, I think it is interesting that the outspoken former President of Mexico has come out and practically admitted that Mexico, the United States and others had at least been in talks of creating a unified currency. Whether an internet conspiracy or not, I think the conversation between Larry King and President Fox is at least somewhat telling. I guess only time will tell...

This Week in Congress Wasting Tax Payer Money

"A House committee rejected warnings from the Bush administration yesterday and approved a resolution condemning Turkey for committing genocide against Armenians during World War I, an act the White House said could jeopardize military operations in the Middle East."

"Mr. Bush spoke in a hastily arranged statement to reporters. 'We all deeply regret the tragic suffering of the Armenian people that began in 1915," he said. But 'this resolution is not the right response to these historic mass killings.'"

Armenia; Turkey; 1915; genocide. That sounds like it would make for a stirring debate in.... Armenia ... or .... Turkey ... in ... ohhh .... 1916. Even history class.

Why do our elected representatives spend time in 2007 debating a resolution condemning the genocide of Armenians at the hands of the Turks in 1915? I can see if maybe there was nothing going on in the US Capitol. Its a slow day; why not condemn genocide. Kinda makes sense. Makes it seem like we are doing something; kinda like that confused/pensive face that is made at work when the boss walks by. I'm thinking so hard I must be working. You cant think this hard and not be working.

The Federal government has slowly usurped all power from the states and sucked the life out of federalism and yet they still want more to do. What a bunch of over-achievers!

I think that Representative Hoyer from the glorious state of Maryland says it all:

"House Majority Leader Steny H. Hoyer, Maryland Democrat, said the resolution 'was about another government at another time, and should not be perceived ... as a reflection on the present government, the Turkish people or their present posture.'"

Exactly.

Put some spinners on that Hummer!

"The Army is offering cash bonuses of up to $35,000 to retain young officers serving in key specialties -- including military intelligence, infantry and aviation -- in an unprecedented bid to forestall a critical shortage of officer ranks that have been hit hard by frequent deployments to Iraq and Afghanistan."

"Army officials said that lengthy and repeated war-zone tours -- the top reason younger officers leave the service -- plus the need for thousands of new officers as the Army moves forward with expansion plans have contributed to a projected shortfall of about 3,000 captains and majors for every year through 2013."

Wow. This makes me even more upset that I am red/green color deficient.

"According to Army data, the overall attrition rate for captains averaged 12.2 percent from 1999 to 2007."

This seems like a really low number. If only one in every ten Army Captains chooses to leave the Army each year, that doesnt seem like chaos (I am assuming I've interpreted this number correctly). I guess the attrition rate could have been much lower until the past year or so as the war in Iraq dragged on and this could skew what may be a much higher rate now.

I wonder if this dilemma has made anyone in important positions question the Iraq war? I doubt it.

White House Leaks Al-Qaeda Tape Early, Ruins Years of Intelligence Work

From washingtonpost.com:

"A small private intelligence company that monitors Islamic terrorist groups obtained a new Osama bin Laden video ahead of its official release last month, and around 10 a.m. on Sept. 7, it notified the Bush administration of its secret acquisition. It gave two senior officials access on the condition that the officials not reveal they had it until the al-Qaeda release.

Within 20 minutes, a range of intelligence agencies had begun downloading it from the company's Web site. By midafternoon that day, the video and a transcript of its audio track had been leaked from within the Bush administration to cable television news and broadcast worldwide.

The founder of the company, the SITE Intelligence Group, says this premature disclosure tipped al-Qaeda to a security breach and destroyed a years-long surveillance operation that the company has used to intercept and pass along secret messages, videos and advance warnings of suicide bombings from the terrorist group's communications network."

Are we even surprised at this type of stuff anymore?

Take it back before I tell my mom on you!

You tell 'em!

Interesting

"A day of global protests against Myanmar's junta began in cities across Asia Saturday, after the military regime admitted detaining hundreds of Buddhist monks when troops turned their guns on pro-democracy demonstrators last week."

"Hoping to send a message to the generals that the world is still watching the situation, rights group Amnesty International organized marches in more than two dozen Asian, European and North American cities."

Interesting how democracy movements can come from within .....

A subtle impression in Iraq

While many Iraqis worry that the US has imperialist aspirations with their country, these sentiments should soon be alleviated by the building of our embassy in Baghdad.

It's Friday! How about a Paris Hilton Story?

I can't post the video because work recently outlawed all streaming video, but check out the clip of Paris Hilton on Letterman. It is very uncomfortable and funny. He relentlessly questions her about her brief stint in jail and she gets pissed that he wont let it go.

Thank you Dave Letterman for having the balls to treat Paris Hilton for what she is: a joke!

Edit: Franz I will help you out.

Video of The Day: History of Blackwater

Via the Dailyshow, here is a humorous video of the history of Blackwater. Sorry, there is no embedded link.

Lets all make sweet, passionate love to freedom.

I was up late last night watching video of Ron Paul on YouTube and I must say that I think I've found who should be the next President of the United States. You notice I say "should be" because the US electorate is too stupid and easily distracted like Homer Simpson to pay attention long enough to what he is saying to recognize the merit. Unfortunately for Ron Paul's chances of winning the Republican nomination, he does not scream "America is Great!" and "I love the United States" and "We did not cause September 11, 2001; we were attacked because we love freedom!"

Speaking of us not causing September 11th, I was struck by Rudy Giuliani's response to Ron Paul in the FoxNews Republican Nominee debate at the University of South Carolina. For those who have not read or heard it:

"MR. GOLER: Congressman, you don't think that changed with the 9/11 attacks, sir?

REP. PAUL: What changed?

MR. GOLER: The non-interventionist policies.

REP. PAUL: No. Non-intervention was a major contributing factor. Have you ever read the reasons they attacked us? They attack us because we've been over there; we've been bombing Iraq for 10 years. We've been in the Middle East -- I think Reagan was right.
We don't understand the irrationality of Middle Eastern politics. So right now we're building an embassy in Iraq that's bigger than the Vatican. We're building 14 permanent bases. What would we say here if China was doing this in our country or in the Gulf of Mexico? We would be objecting. We need to look at what we do from the perspective of what would happen if somebody else did it to us. (Applause.)

MR. GOLER: Are you suggesting we invited the 9/11 attack, sir?

REP. PAUL: I'm suggesting that we listen to the people who attacked us and the reason they did it, and they are delighted that we're over there because Osama bin Laden has said, "I am glad you're over on our sand because we can target you so much easier." They have already now since that time -- (bell rings) -- have killed 3,400 of our men, and I don't think it was necessary.

MR. GIULIANI: Wendell, may I comment on that? That's really an extraordinary statement. That's an extraordinary statement, as someone who lived through the attack of September 11, that we invited the attack because we were attacking Iraq. I don't think I've heard that before, and I've heard some pretty absurd explanations for September 11th. (Applause, cheers.)
And I would ask the congressman to withdraw that comment and tell us that he didn't really mean that. (Applause.)

MR. GOLER: Congressman?

REP. PAUL: I believe very sincerely that the CIA is correct when they teach and talk about blowback. When we went into Iran in 1953 and installed the shah, yes, there was blowback. A reaction to that was the taking of our hostages and that persists. And if we ignore that, we ignore that at our own risk. If we think that we can do what we want around the world and not incite hatred, then we have a problem.
They don't come here to attack us because we're rich and we're free. They come and they attack us because we're over there. I mean, what would we think if we were -- if other foreign countries were doing that to us?"
(Council on Foreign Relations: www.cfr.org)

First, every American who was not killed in the attacks on 9/11 "lived through them." Giuliani is not special in that sense. He happened to be Mayor of New York. Congratulations. This makes you no different from every other candidate on stage who wasn't killed.

Second, this is a debate. Who has ever heard of someone engaged in a debate ordering another participant to "withdraw his comment" and "tell us that he didnt really mean it." Last time I checked the debate was not held in a middle school girls bathroom. He said it. He meant it. Now respond to the argument with your own argument based on some sort of logical reasoning. It is not an argument to express astonishment and demand the other side retract their argument.

Third, why is it so deplorable to say that the US may have done something to incite 9/11? Especially considering, as Ron Paul points out, that Osama Bin Laden has told us that he was incited to attack the US because of our policies and not because we are fat, freedom lovers.

Its painful to listen to this garbage.

huh?

I am not a Rudy Giuliani hater; in fact, I like a lot of what he says. But this snippet from an inteview with Larry Kudlow that I've borrowed from www.realclearpolitics.com is funny:

While elaborating on a response to Kudlow's question about taxess, Giuliani begins to argue in favor of expanded nuclear energy.

"GIULIANI: Nuclear power is dangerous, so is every other form of power, but nobody's died from nuclear power."

I like the idea of expanded nuclear energy too, but this statement is a little ridiculous considering what most people understand about the conclusion of World War II and Chernobyl.

I guess he could argue that he was speaking specifically about using nuclear fuel to generate energy for powering everything but bombs. But it could also be argued that nuclear power -- whatever one means by power-- is what produces an atomic explosion, which is, after all, nothing more than the same nuclear reaction used to produce energy but allowed to reach a supercritical state.

Even if after going cross-eyed from that argument, we concede that he was speaking strictly of using nuclear fuel to produce energy that will be used to power things and not destroy people, I believe that people were killed in the explosion that occured at Chernobyl and many more as a side effect of the radiation.

Hello? Is this Osama?

"Former president Bill Clinton has emerged as a clear asset in his wife's campaign for the White House, with Americans offering high ratings to his eight years in office and a solid majority saying they would be comfortable with him as first spouse, according to a new Washington Post-ABC News poll."

The Washington Post/ABC News Poll:

If the 2008 presidential election were held today and the candidates were Giuliani, the Republican, and Clinton, the Democrat, for whom would you vote?

All: Clinton - 51%, Giuliani - 43%
Dems: Clinton - 88%, Giuliani - 9%
Ind: Clinton - 48%, Giuliani - 44%
Reps: Clinton - 10%, Giuliani - 88%

This is not entirely surprising because Giuliani is seen as a one trick pony. Clinton at least comes across as a multi-faceted candidate; Giuliani cannot escape his infamous performance on September 11. This situation is not alleviated by Giuliani either, who continuously alludes to his national security and terrorism credentials.

This is unfortunate too because Giuliani has some good ideas on the economy: less taxes and less government spending and a school voucher system.

Kinda funny from realclearpolitics.com:

"KUDLOW: Do you invest in the Stock Market?
GIULIANI: No, I don't. I don't invest in the Stock Market. I did it a long, long time ago when I was really young and I got involved in all the investigations and all the prosecutions and I felt it was better if I didn't make individual investments. So I'm invested in funds, but not in individual--not in individual stocks."

Easily Diversifying Through Foreign Currencies: Everbank.com

I recently looked at Everbank.com because of there foreign currency CD and deposit accounts. I was most interested in the Euro simply because it has strengthened rapidly over the last few years versus the Dollar. There are no fees to invest and the deposit account only has a $2,500 minimum but does not earn any interest. The Euro CD account pays anywhere from 2.5 - 3% but has a minimum investment of $10,000. Both of these accounts are FDIC insured.

Looking at what my current high yield savings account (4.3% APY) and then at the yearly return of the Euro versus the Dollar (currently at 11%) it seems that I could earn much more in a Euro deposit account and hedge against any further drop in the US dollar. Of course this would have to take into account a that the US dollar will continue to drop versus the Euro. This however, may be imminent with another FED target rate cut before or at the next meeting.

For anyone looking to invest in liquid foreign currency accounts, I suggest lookting at Everbank. As of now they are the only US bank that I know of that lets individuals deposit money in foreign currency accounts.

Note: As of this writing I do not currently have money deposited with Everbank but may do so in the near future.

I support the troops the bestest!

"Most Americans oppose fully funding President Bush's $190 billion request for the wars in Iraq and Afghanistan"

Washington Post/ABC News Poll:

Question: Do you think the Congress should approve $190 billion to fund the wars in Iraq and Afghanistan over the next year or reduce the amount?

43% said to "Reduce sharply"
27% said to "Approve all money"
23% said to "Reduce somewhat"
3% said to "Approve no money"
3% had "No opinion"

"Part of the displeasure with Congress stems from the stalemate between Democrats and the White House over Iraq policy. Most Americans do not believe Congress has gone far enough in opposing the war, with liberal Democrats especially critical of their party's failure to force the president into a significant change in policy."

We really need to have a dialogue about what it means to support our military. It is unfair that the military is manipulated by all sides to support whatever position is important: removing the funding for the troops means you are against the troops because you wont give them the necessary equipment to fight; funding the troops means that you are against the troops because you are keeping them in a war zone.

What about the merits of continuing the actual war?!!

As with almost every issue that our Congress-people attempt to debate, the argument is reduced to a fight over semantics. Why not stop dancing around the subject and just come out with it?! If you support the war, say so and vote to fund the war. If you do not support the war, say so and vote to stop funding the war. Put your money where your mouth is and stop hiding behind this troop support rhetoric.

The issue is the war and not the troops. You must either support the war or not. All Americans support their military. It is nonsense to vote in favor of funding of the war because you support the troops, but then speak out against the merit of the war. Please stop pretending that this is a credible distinction that helps you save face.

The military will go off and fight wherever the President or Congress sends them (yes congress used to make decisions about declaring war; a long, long time ago). They don't wait for a gauge of troop support before they leave for war. They go. The least our representatives in government can do is debate the merits of the war we sent them to fight and stop bickering over who supports them the most.

Newspaper Demographics

Via Nynerd.com:

Newspaper Demographics

1. The Wall Street Journal is read by the people who run the country.

2. The Washington Post is read by people who think they run the country.

3. The New York Times is read by people who think they should run the country and who are very good at crossword puzzles.

4. USA Today is read by people who think they ought to run the country but don’t really understand The New York Times. They do, however, like their statistics shown in pie charts.

5. The Los Angeles Times is read by people who wouldn’t mind running the country — if they could find the time — and if they didn’t have to leave Southern California to do it.

6. The Boston Globe is read by people whose parents used to run the country and did a poor job of it , thank you very much.

7. The New York Daily News is read by people who aren’t too sure who’s running the country and don’t really care as long as they can get a seat on the train.

8. The New York Post is read by people who don’t care who’s running the country as long as they do something really scandalous, preferably while intoxicated.

9. The Miami Herald is read by people who are running another country but need the baseball scores.

10. The San Francisco Chronicle is read by people who aren’t sure there is a country or that anyone is running it; but if so, they oppose all that they stand for. There are occasional exceptions if the leaders are handicapped minority feminist atheist dwarfs who also happen to be illegal aliens from any other country or galaxy, provided of course, that they are not Republicans.

11. The National Enquirer is read by people trapped in line at the grocery store.

12. The Oregonian is read by people who have recently caught a fish and need something in which to wrap it.

Did George Washington enjoy cereal and muffins for breakfast?

Why is it called a Continental Breakfast?

Rate Cut What!!!

"Citigroup Inc. estimated Monday that its third-quarter profit will drop 60 percent, as the nation's largest bank took losses of more than $3 billion after writing down securities backed by underperforming mortgages and loans tied to corporate buyouts."

"Citigroup's announcement was the latest disappointment resulting from this year's problems in the mortgage industry and financial markets. Earlier Monday, Swiss bank UBS AG said it will post a third-quarter loss of up to $690 million partly due to losses linked to U.S. subprime mortgages. And on Friday, federal regulators shut down a small online bank called NetBank Inc. that failed because loan defaults."

Bad news for subprime borrowers: you may have to wait longer than expected to buy that house you can't afford.

EQUILIBRIUM! Its a wonderful thing!

Nanny State 2008: Clinton wants $5,000 for every newborn!

Via the AP:

Clinton: $5,000 for Every U.S. Baby

Democratic presidential candidate Hillary Rodham Clinton said Friday that every child born in the United States should get a $5,000 "baby bond" from the government to help pay for future costs of college or buying a home.

Clinton, her party's front-runner in the 2008 race, made the suggestion during a forum hosted by the Congressional Black Caucus.

"I like the idea of giving every baby born in America a $5,000 account that will grow over time, so that when that young person turns 18 if they have finished high school they will be able to access it to go to college or maybe they will be able to make that downpayment on their first home," she said.

The New York senator did not offer any estimate of the total cost of such a program or how she would pay for it. Approximately 4 million babies are born each year in the United States.

Clinton said such an account program would help people get back to the tradition of savings that she remembers as a child, and has become harder to accomplish in the face of rising college and housing costs.

One way of building a stronger economy, she said, is "more savings, starting with the so-called baby bonds idea where every person born in this country would be given that kind of account because we want to make an investment in America's young people."

The economic implications of something like this are simple. If you give every newborn $5000 to invest in a college fund, college tuition goes up by $5000 because now everyone can at least afford that. This twisted logic seems rudimentary and baseless in any free market society. This also does not take into account the already negative savings rate by the average American. Why save if the Government will just give us college tuition? Maybe we should have even more babies. Not to mention that by todays birth rates this would cost about $20 billion a year. Can you say Nanny State in 2008?

Video of The Day: Cramer Goes Nuts

This is in reference to my rate cut post yesterday. Always a good laugh and eye opener for those who haven't seen it.

Its Official: The Dollar Index Has Hit An All Time Low

While you may not find any news agencies reporting this; the widely measured US dollar index hit an all time low against 6 other major currencies today and continues to fall rapidly. Even the tame inflation report that came out today had no effect on slowing the rapid decent of the Dollar versus other major currencies. As stated previously, the last time the Dollar had been near these lows was in 1992 when the Economy was just coming out of recession. After 1992 the dollar managed to climb all the way to 92 in November of 2005.

The index now sits at 77.92, over a 15% fall in less than 2 years. This has drastic effects for the average consumer and the economy as a whole, specifically rampant inflation and a lower purchasing power for foreign goods. This also makes US treasuries less attractive to foreign investors which in turn lowers our ability to pay off our government overspending by increasing our debt. Eventually foreign countries will not want to purchase an investment that is being debased by US policy. Its the equivalent of a Company printing more stock shares and putting them on the market, this then lowers the value of every share held and eventually no one wants to buy the diluted paper.

As a reference and for the chart of the day, I give you again the US dollar Index provided by ino.com:

Tell Me Again Why We Needed A Rate Cut?

Via CNBC.com: 2nd Quarter GDP grew 3.8% and Jobless Claims Tumbled

"The economy rebounded with a good head of steam in the spring before a credit crisis raised new fears about longer-term business health. The Commerce Department reported Thursday that the economy grew at a 3.8 percent annual rate in the April-to-June quarter, the strongest showing in just over a year."

Ok, so the Economy grew from a stagnant .6% in the first quarter to a 3.8% rate in the second quarter; the highest in over a year. In the following months we got a 50 point bases cut by the FED which "surprised" most Economists and those on Wall Street and led to a 350 point rally in the Dow the same day.

Forgive me for seeming naive but does this strong GDP number and "tumbling jobless claims" seem like it is deserving of a 50 point rate adjustment? Now I understand credit has tightened, and housing has worsened, but unless we are looking at a negative GDP number in quarter three I see no need for a rate cut at all unless....

"Merrill Lynch May Write Down Assets by $4 Billion" via Bloomberg

"Bear Stearns 3Q Profit Falls 62 Percent" via CNBC.com

"Morgan Stanley Profit Falls More Than Expected" via CNBC.com

"Lehman Net Falls 3%" via WSJ online

Oh, nevermind.

I guess all the screaming from Jim Cramer about his Hedge Fund buddies was all we needed to make Bernanke and the FED get to steppin'. God forbid that the likes of Lehman, Morgan Stanley, et al have to show net losses for a few quarters. And all because they made bad bets with over-leveraged hedge funds on a real estate bubble that was created with their loose credit. We will have none of that!

We have to make sure those bonuses make it out on Wall Street come this Holiday Season.

Harumph, Harumph, Harumph!!!

"Mr. Obama, pressed by Mr. Russert on his lack of experience, said he believed he could 'bring the country together.' 'We need someone who can take on the special interests [emphasis added]. I have consistently done that,' he said."

"We need someone who can take on the special interests." Wow. This sounds like something that I should support. The term special interests sounds bad; it has a connotation of selfishness and that is bad. The verb to "take on" implies that these special interests are all powerful and imposing themselves on us helpless Americans. If they were just a nuisance we could simply ignore them and not have to "take them" on. I should find out how I can get involved in taking on these special interests.

But first lets take a deeper look at these so-called special interests. What are they? At least two people who feel similarly about a particular issue organize into a formal group in the hope of attracting others to their cause and affecting government. Ok. But who are these people that make up the special interests? American voters. Ok. But why do these groups think that they have the right to peaceably assemble and to petition the Government for a redress of grievances? Oh yah, the first Amendment to the Constitution.

Special interests are us. Mothers Against Drunk Driving is a special interest. Our political parties can be considered special interests. In a representative democracy or any democracy there will always be special interests. Why does a politician need to take these groups on? What will he save us from: ourselves? Democracy? How will Barack Obama take on these special interest groups? Why would he bite the hand that feeds him? Who does he think keeps his campaign afloat?

This is just typical political speak targeting the unsuspecting and lame-brained. This is Barack Obama's way of saying that he has no respect for the intelligence of Americans. But then again, should he?

CPI Data is a Lie

From Bloomberg:

"The U.S. consumer price index continues to be a testament to the art of economic spin.

Since wages, Social Security cost-of-living increases and some agency budgets are tied to it, the government has a vested interest in keeping it as low as possible.

Yet your real cost of living -- what you keep after taxes, medical bills, college expenses and other household costs -- is probably much higher than the 2 percent annual rate the government reported in July, showing a slight decline."

I am glad to see that someone other than economists are examining how much of a farce the CPI data is. With gas, groceries, health care, housing, tuition and just about ever other everyday purchase going up, its amazing to me that the US Government can continue to spout this incredulously low CPI number.

I guess since the only real things we buy are big screen TVs, computers and imported Chinese goods than everything is A-OK.

Aren't you glad that they can vote for their own pay raises?

"The Senate voted 72-25 to pass a resolution condemning a MoveOn.org ad that referred to Gen. David Petraeus, the commander of U.S. forces in Iraq, as 'Gen. Betray Us.' The liberal group's full-page ad appeared last week in The New York Times. "

In the venerable halls of Congress the distinguished Senators of our country are completely wasting our time. Why debate silly issues like immigration policy or the war in Iraq when time can be spent attacking the point of view of a ridiculously partisan organization of rabble-rousers?

Meanwhile, state and local governments are busy doing the work of the US Congress.

More on REITs

An excerpt from a Wall Street Journal Online article addressing the positives of REIT investing in our current housing environment:


"TWST: Is this downturn in the single - family home market really going to benefit this space [Real Estate Investment Trusts]?

Mr. Goldfarb: Assuming that we continue to have jobs and GDP growth, we think it will. For example, let's take San Francisco. There people used to buy a place in Modesto and commute for two hours. That is no longer happening, one, because the ability to get the financing to buy the homes isn't there because standards are much stricter and also people are much more hesitant to make that jump to buy that home in this current environment. It favors the REITs because they tend to be located closer to the business districts and tend to be in more infill markets as opposed to out in the open expanses of where the homeowners were. So assuming that GDP continues to grow and we continue to get jobs, which is what UBS anticipates, then we think that it will be a net positive for the apartments.

http://biz.yahoo.com/twst/070919/zew804.html?.v=1

Chart of The Day: National Home Prices

From AP:

"The decline in U.S. home prices accelerated nationwide in July, posting the steepest drop in 16 years, according to the S&P/Case-Shiller home price index released Tuesday.

Home prices have fallen by more every month since the beginning of the year."

It looks like the decline in home prices has rapidly accelerating downward through the summer months and will probably continue through the fall and winter. This will have a major effect on Mortgage Equity Withdrawal (MEW) , new home purchases and the mortgage values held by the banks. With the foreclosure rate increasing as well, this does not look good for the overall residential real estate market.

In a related note, homebuilder Lennar post a large loss and Lowes warns of lower than expected earnings.

Video of the Day: How Banking and Money creation really works

Most people do not understand truly how are banking system works or how money is created. This series of videos helps to explain it and the history behind our banking system. I think you would be astonished to know how it really works.

The Banana Blues

I was playing a rousing game of Balderdash on Friday night when I was asked to explain why Frank Silver was famous. I felt certain that he invented the slinky. It turns out that he did not invent the slinky, but was responsible for the smash single, "Yes! We Have No Bananas." I thought the makers of Balderdash were, like the participants, making this stuff up. It turns out I was wrong.

"'Yes! We Have No Bananas' is the title of a novelty song by Frank Silver and Irving Cohn that was a major hit in 1923, and one of the top songs of the 20th century. The song was recorded by Billy Jones, Arthur Hall, Irving Kaufman and others that year, and covered later by Benny Goodman and his Orchestra, Spike Jones & His City Slickers and many more. It also inspired a follow-up, 'I've Got the Yes! We Have No Bananas Blues,' recorded by Jones and others in 1923."

http://en.wikipedia.org/wiki/Yes,_We_Have_No_Bananas

Please enjoy some lyrics from "Yes! We Have No Bananas:"

He,he,he,he, ha, ha, ha whatta you laugh at?
You gotta soup or pie?
Yes, I don’t think we got soup or pie
You gotta coconut pie?
Yes, I don’t think we got coconut pie
Well I’ll have one cup a coffee
We gotta no coffee
Then watta you got?
I got a banana!
Oh you’ve got a banana!
Yes, we gotta no banana, No banana, No banana, I tell you we gotta no banana today
I sella you no banana

It is only fitting to follow up the success of "Yes! We Have No Bananas" with "I've Got the Yes! We Have No Bananas Blues."

I would think that the blues would have set in upon first learning that there were no bananas, but, alas, I would be wrong because the melancholy that one experiences from a lack of bananas only happens during the sequel.

Is nuclear energy not scary anymore?

"Power producer NRG Energy Inc. will submit the first application for a new nuclear reactor in the U.S. in nearly 30 years, the company's chief executive said Monday."

"Nuclear regulators expect Tuesday morning to receive NRG's application for two new units at its facility in Bay City,Texas, about 90 miles southwest of Houston. It will be the first complete construction and operating license submission the government has processed since before the Three Mile Island accident in Pennsylvania in 1979."

http://biz.yahoo.com/ap/070924/new_nukes_nrg.html?.v=9

"The average cost of nuclear-produced electricity was 1.72 cents per kilowatt hour in 2006, compared with 2.37 cents for coal-fired plants and 6.75 cents for natural gas plants, according to the Nuclear Energy Institute, a trade group."

This is a hopeful sign for the future of nuclear energy in the US. Now if we could only get over our fear of reprocessing the spent fuel, we may save a polar bear or two.

What's up shorty?

"The prostitution trade, long centered downtown, has increased in recent years in several neighborhoods across the city, police and residents said. Prostitutes often meet johns on street corners, at bus stops or outside convenience stores and fast-food restaurants. Then they head out to have sex in nearby alleys and parks or on quiet streets -- sometimes even back yards."

http://www.washingtonpost.com/wp-dyn/content/article/2007/09/23/AR2007092301280.html?hpid=moreheadlines

"If you're out there and prostituting, you are going to jail," Contee said during a recent weekend sting. "If you're a john and you're coming here for sex, you're going to jail. That's the bottom line."

"If you're out there and prostituting, you are going to jail," warns Robert Contee, a police officer in charge of the 6th District in DC; a warning that, I am certain, will successfully put an end to prostitution in the District and serve as a model for other districts suffering from similar ills. The sarcasm is pretty thick because it should be.

Human beings love sex: seems to make perfect sense too considering the difficulty we would have existing for very long without it. We are also extremely hedonistic: take drugs, alcohol, McDonalds or any other indulgence in which we regularly partake for no other reason than because we can and because it feels good.

Government has not made selling a hamburger illegal; it has not made producing or selling alcohol illegal. It has, however, put restrictions on these activities. Burger King must meet certain conditions with their products and restaurants; Anheuser Busch can produce alcoholic beverages with impunity if its products and processes follow certain guidelines.

Prohibition of alcohol didn’t work and neither would prohibition of happy meals: sorry California, but good luck trying to stand in the way of a Big Mac and an American's mouth. Consequently, why do we need a prohibition of drugs and the selling of sex? Regulation seems to work pretty well with alcohol and hamburgers. Wouldn’t this seem to indicate that it might work pretty well with drugs and sex; especially considering that prohibition has been so ineffective.

PS. Shouldn't Pro-Choice advocacy groups defend prostitution? After all, prositution involves a woman's right to choose what to do with her body.

Is this not the greatest stock on earth?

"Altria, for instance, hasn't bought back any stock for the past four years because it wanted to forestall legal challenges to the spinoff of either Kraft or Philip Morris International. By refraining from share buybacks it built up its book equity, which is important to the courts in evaluating a company's financial strength. Altria now has a great balance sheet, with net debt of just $1 billion and annual pretax cash flow of $15 billion. With those numbers, it could comfortably support at least $30 billion of debt.

Both new Altria and Philip Morris International are likely to begin buying back stock aggressively once the breakup occurs. New Altria could repurchase $10 billion of stock and Philip Morris International $25 billion within 18 months. Altria's current market value is around $141 billion. "

http://www.smartmoney.com/barrons/index.cfm?story=20070921&afl=yahoo&hpadref=1&pgnum=2

For a layperson this stock seems like a Godsend. Altria is what you will find in the dictionary under "Cash Cow." Tons of cash; market dominance; a planned second spin off in less than a year that will slim down Altria even more and squeeze more value from Altria and the new Philip Morris International; a potential massive share buy-back.

I love smokers.

My daily stroll down Diatribe lane...

http://www.washingtonpost.com/wp-dyn/content/article/2007/09/19/AR2007091902503.html

Much has been made of the apparent lack of oversight and accountability of private security contractors working in Iraq. The number of security contractors is estimated to be between 20,000 and 50,000. This educated guess further illustrates the fact that few know much about the security contractors in Iraq.

Blackwater is the crème de la crème of security contractors and treated as such by the US government. Blackwater works for the State Department and not Defense like most of the contractors. This makes perfect sense considering Blackwater is tasked with protecting State Department officials. The problem lies, however, in the fact that the security firms working for Defense – although immune from prosecution under Iraqi law – are subject to US military law and regulations. Blackwater, which works for State, is not.

The lack of soldiers in Iraq trained for specialized tasks such as dignitary protection combined with the overall privatization trend in government makes the existence of Blackwater types a sensible and unsurprising trend. However, like many trends associated with the Post-September 11th environment, Blackwater is asked to operate in an uncertain environment with uncertain rules. Like the military and CIA with enemy combatants and the NSA with monitoring domestic phone calls, Blackwater is asked to blaze new trails in the name of national security without clear restrictions.

September 11, 2001 changed everything: we know. But six years later we are still making the same mistakes and bumbling along no closer to resolution in Iraq or the struggle with Islamic fundamentalism. It doesn’t matter whether Blackwater is contracted by State or Defense; whether they are private contractors of US soldiers. The problem is a lack of leadership in the United States government: both the executive and legislative branches. We are asking our military, our intelligence officers and our private citizens to participate in an unprecedented struggle with an indefatigable foe, but we have not clearly defined the rules in which they must operate. The failure of US legislators and the President to bring our war on terrorism within the scope of US law has served to undermine our efforts to protect our nation from threats. It is no wonder that we have so far been unsuccessful.

Chart of The Day: BofA ARM reset schedule

This is the Bank of America monthly ARM reset schedule by sector. And by sector they mean how crappy your credit is, with subprime being the worst and usually the shortest time until your rate resets. The chart shows the reset schedule of all adjustable rate mortgages (ARMs) until the end of 2009. Now call me crazy but it looks like we still have a long way to go before it really starts to get ugly.

For All those who are preaching that the worst is behind us for foreclosures and real estate prices, this chart tells a very different story.

Video of The Day: Ron Paul Addresses FED Chairman Bernanke

What is the moral hazard of completely devaluing the dollar? According to Bernanke there is none. And in case you didn't know, Ron Paul is running for President.

REITs please.

"The Fed action was meant to address the crisis of confidence among lenders," said Robert Bach, senior vice president of research and client services at Grubb & Ellis (AMEX:GAV - News), a commercial real estate firm. "Maybe there will be a bit of a cooling, but fundamentals are strong. Vacancy rates are low. Rents are increasing. Tenant demand is strong and, perhaps most importantly, construction (or overbuilding) is not an issue."

http://biz.yahoo.com/ibd/070920/etf.html?.v=1

Call me dull, but I like REITs as a long term investment vehicle: particularly owning individual small and mid-cap REIT stocks in a tax sheltered account or purchased systematically through a Direct Purchase and Dividend Reinvestment Plan. REIT funds are good options too because they can offer greater diversity, however, most REIT companies are large enough to cover a significant portion of the country and most are involved in retail and commercial ventures.

Sure REITs are about as exciting as women's basketball, but its hard to argue with consistent dividend growth and their importance as a hedge during periods of inflation: especially considering that "REITs are financed primarily with long-term, fixed-rate debt," said Lou Taylor, a REIT analyst at Deutsche Bank.

Everyone in America wants to own real estate, but few can afford an investment property let alone their personal residence: here is your chance!

Go ahead, learn you somethin'! -- http://www.investinreits.com/learn/investguide.pdf

Chart of the Day: US Dollar Index

Chart via ino.com

Here is the 2 year US Dollar Index versus a basket of other currencies (EURO, British Pound, Japanese Yen, Canadian Dollar, Swedish Krona and Swiss Franc). I hope no one was planning on traveling overseas anytime soon. FYI we are about 50 cents away from the all time low set in 1992. But hey, at least those imported Flat Screen TVs will be cheaper.

Welcome

Welcome to Pulp Finance, a site dedicated to Finance, The Economy, Politics and whatever the hell else we feel like talking about. Were just a couple of guys trying to make sense of it all in a laid back, Joe Six Pack kind of way. We don't claim to be experts or prophets but intend to call it as we see it and provide a little humor along the way. If you want to learn more about the general economy, politics and whatever else may be on the homepage of your favorite news website you have come to the right place. Hell we might even cover some pop culture along the way, because who doesn't love bashing Britney a little bit now and again (except this guy) We just CAN'T leave her alone!

I hope everyone out there enjoys the site and we look forward to taking any suggestions on content and topics. I will be back later today with a relevant post on the latest FED decision and K-Feds reactions. -PoPaZao