Saturday, October 18, 2014


Back on October 17, Bureacrat-in-Chief Barry Obama established the job of Ebola Response Coordinator and appointed long-time taxpayer ward Ron Klain to the job.

A congressman from California, Ed Royce, a guy obviously unfamiliar with all of the agencies Congress has created and continues to fund said, "It is right that the President has sought to task a single individual to coordinate its response."

Over the years, successive U.S. Congresses have established far too many overlapping agencies to do the same thing as the Ebola Response Coordinator.

Between 1979 and 1980, Congress established the Department of Health and Human Services (DHHS) by separating the Department of Health, Education and Welfare, which Congress established in 1953. The DHHS contains the United States Public Health Service (PHS), which Congress established through the Public Health Service Act of 1944.

The Assistant Secretary for Health (ASH) for the DHHS oversees the PHS the PHS oversees all agency divisions of the DHHS and the Commissioned Corps, which Congress established 1871 along with the Office of the Surgeon General.

Congress gave the Secretary of the Department of Health and Human Services statutory responsibility for to prevent the introduction, transmission, and spread of communicable diseases in the United States. To do so, Congress created the Division of Global Migration and Quarantine.

The U.S. Secretary of the DHHS can prevent the entry and spread of communicable diseases from foreign countries into the United States and between states through another Congress established agency, the Centers for Disease Control and Prevention (CDC) and another Congress established agency, the Office of the Surgeon General.

Under 42 Code of Federal Regulations parts 70 and 71, the CDC has authorization to detain, medically examine, and release persons arriving into the United States and traveling between states who are suspected of carrying these communicable diseases. Whenever a pilot of a plane or captain of a ship, neither who are licensed medical doctors, alerts the CDC about about ill passengers or crew, enforcers of the CDC can detain passengers and crew as  necessary to investigate whether the cause of the illness on board is a communicable disease. Under mere suspicion, enforcers of the CDC can issue a federal isolation or quarantine order if a disease is suspected.

To be sure that Congress totally adds to the confusion that is the United States government, Congress has authorized the Department of Homeland Security (DHS) to meddle in such matters. The DHS has the U.S. Customs and Border Protection, which can inspect animals and plants. As well, the DHS has the Federal Emergency Management Agency (FEMA), which Congress has authorized to involve itself in any "catastrophic incident ... any natural disaster, act of terrorism, or other man-made disaster that results in extraordinary levels of casualties or damage or disruption severely affecting the population."

Because Congress can't organize its activities, Congress authorized the U.S. Customs and Border Protection and U.S. Coast Guard officers to help enforce federal quarantine orders.

The DHS even has the Office of Health Affairs (OHA) headed by a Chief Medical Officer who leads 101 bureaucrats whose job is to prepare for, respond to, and recover from all hazards effecting health security of Americans.

The U.S. Congress created The Centers for Disease Control and Prevention (CDC) on July 1, 1946, for the express purpose to protect public health through developing and applying disease control and prevention of infectious diseases and food borne pathogens.

According to the Congress, "Congress finds that the Centers for Disease Control and Prevention has an essential role in defending against and combatting public health threats domestically and abroad" including "bioterrorism and other public health emergencies." To do this, Congress has authorized the CDC to "establish a near real-time electronic nationwide public health situational awareness" network to detect and manage "potentially catastrophic infectious disease outbreaks, novel emerging threats, and other public health emergencies that originate domestically or abroad."

Congress has authorized the Surgeon General to make and enforce such regulations as in his judgment are necessary to prevent the introduction, transmission, or spread of communicable diseases from foreign countries into the States or possessions, or from one State or possession into any other State or possession. Congress has authorized the Surgeon General to destroy whatever he or she feels like, whether animals or things, if such are "found to be so infected or contaminated as to be sources of dangerous infection to human beings" as well as apprehend and detain individuals "for the purpose of preventing the introduction, transmission, or spread of such communicable diseases ... specified from time to time in Executive orders of the President upon the recommendation of the Secretary" of the DHHS.

So Congress added the president himself to the mix of meddling cooks with authority to handle communicable diseases.

As it is, the U.S. Congress claims authority from the Commerce Clause of the U.S. Constitution to isolate and put in quarantine anyone, anytime, who could have any contagious disease.

Breaking a federal quarantine order is punishable by fines and imprisonment. Federal law allows the conditional release of persons from quarantine if they comply with medical monitoring and surveillance.

Title 42 of the U.S. Code reveals expression of the many muddled minds who inhabit Congress year after year.

Enjoy this kitschy, catchy tune by Colin Moulding, bassist of one-time hit maker XTC.

There's too many cooks in the kitchen
There's too many minds on the job
There's too many cooks in the kitchen

Everybody wants a piece of the action
Cooking the books and getting their fractions wrong

What we need is law and order
Everybody knows
Can't have chiefs without the injuns
Stepping on their toes

There's too many cooks in the kitchen
There's too many dabs in the pie
There's too many cooks in the kitchen

Everybody needs a place in the rat race
Playing games of power, it's only a cat chase

Too many too many too many etc.
Too many cooks in the kitchen

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Blogger Tricks

Thursday, October 16, 2014


Most chucklehead laugh-track TV-watching Americans would like to blame who they believe are evil commercial bankers for the credit crisis of 2008.

Most Americans are bamboozled by politicians. Politicians are too smart for Americans. Politicians easily trick Americans with speeches and TV performances.

The true culprits of the residential realty fueled credit crisis were the men and women of the U.S. Congress,  the Congressmen of the U.S. House of Representatives and Senators of the U.S. Senate.

Successive U.S. Congresses make all the rules through their law, directly and through their agencies, which they authorize. Successive U.S. Congresses caused the residential realty crisis and largest credit bubble in U.S. history through their agencies.

The U.S. Congress through its agencies bundled up mortgages into securities known as mortgage-backed securities (MBS) and hired investment bankers to broker those securities. Successive U.S. Congresses created Government Sponsored Enterprises, GSEs, which make MBS. These GSEs are the Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) and Federal Agricultural Mortgage Corporation (Farmer Mac).

Another player for the U.S. Congress, the Government National Mortgage Association (Ginnie Mae) did not issue MBS. However, Ginnie Mae technocrats provided backing for MBS by guaranteeing investors the timely payment of principal and interest on MBS backed by federally insured or guaranteed loans — mainly loans insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA).

When all hit the fan, the U.S. Congress made for-profit Private Mortgage Conduits into their scapegoats. A PMC is a firm created to purchase and pool house loans and ready such for sale as securities. PMCs are the private sector equivalents of the GSEs. In the period of 2003 to 2007, PMCs were affiliates of major firms — GMAC Mortgage, Bear Stearns, Citimae of Citicorp, Countrywide, GE Capital Mortgage, Prudential, Ryland.

According to the Federal Reserve, from their own numbers on Mortgage Pools or Trusts, from 2003 to 2007, the outstanding principal balances of mortgage-backed securities insured or guaranteed by GSEs grew 48.1%, growing at a rate of 8.2% a year. In the same period, the outstanding principal balances of mortgage-backed securities of PMCs grew at an eye-poping 242%, growing at 27.9% a year!

It is from these figures that laying blame on PMCs seemed all too easy. What was a 79%-21% split at the start of Q1 2003 became a 60%-40% split by Q4 2007.

However, for every $1 of PMC MBS, there was $1.35 of GSE MBE. Total Congress involvement through GSE and direct agencies Ginnie Mae and the FHA came to $1.50 for every $1 of PMC MBS.

Said another way, Congress involvement was one-and-a-half times that of PMCs. Congress involvement in MBS and MBS guarantees between 2003 and 2007 was 50% bigger than all private involvement combined.

Of course, members of successive Congresses couldn't have done this without having enough voters put them into office. They could not have gotten those voters without first either giving them or appealing to their desire for welfare — Social Security, Medicare, Medicaid, SNAP, TANF, Section 8, Pell and many more programs.

During the residential realty credit bubble, there were far too many who borrowed way too much, well beyond what their incomes could support, overpaying way too much for houses they could not afford at the selling prices they should not have paid. Far too many played the game of "getting rich quick" by flipping taking out even bigger mortgages using the proceeds of each flip to buy cars and luxury vacations.

Ah, greed — striving to get something without giving up something in trade — is a horrible error. Oh so many borrowers were greedy with their big eyes seeing dollar signs as they  became flipping realty for big profit geniuses. It's hard to have sympathy for people driven by greed.

Commercial bankers weren't greedy. Commercial bankers sold a product — their credit — and bought a right of action in a purchase and sale from those seeking mortgages. Bankers played by the rules.

People buying houses, taking out HELOCs to buy shiny new BMWs, Mercedes and Ford Expeditions, cars that were once priced beyond their incomes, reckoning they could pay off their HELOCs when they flipped their houses for higher prices, well, that's greedy.

Far too many borrowed too much, many of whom never should have borrowed ever based on their incomes and the potential for price rises in other necessities. As soon as gasoline prices hit highs, many couldn't pay mortgages and drive to work. A little thing like rising gasoline prices drove them to default and technical bankruptcy.

Investors buying mortgage-backed securities, which bundled mortgages based on faulty interpretation of statistics, suckered by blue-skies sales pitches, well, that was stupid. MBS investors were stupid.

And for the last seven years, Federal Reserve central bankers have been taking on these junk MBS, effectively bailing out the previous owners of MBS.

American borrowers were greedy. Blaming businessmen for engaging in business puts the blame where no one should.

Here is an interesting graphic published by the New York Times.

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Monday, October 13, 2014


For decades, a graffiti vandal who goes by the name Banksy has vandalized walls of buildings in which he lacks any property.

In short, Banksy lacks the right to paint upon the walls of buildings he does. Further, Banks has a duty to not vandalize the walls of buildings in which others have property, which is the right of ownership and never the thing owned.

Recently, Banksy vandalized the wall of someone's building Folkestone, England. Another vandal took it upon himself or herself to better Banksy's work of vandalism by adding a drawn penis upon it.

Brits everywhere have decried the work of the second vandal as horrific vandalism destroying the work of vandalism by Banksy. How is that for a bit of irony?

Some have taken to Twitter, tweeting such foolery as "Only in #Folkstone could a #Banksy be vandalisesd."

Here is the improved work of Banksy's vandalism:

Here is a photo of Banksy's original destruction:

According to Brits, everyone should have thought vandalism throughout NYC in the low point of NYC as artwork:

Enjoy a ride through graffiti ghettos of New York City.

And the decline of Britain continues as evidenced by the way Brits believe.

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Thursday, October 9, 2014


If you are thinking of speculating in foreign stocks or leisure traveling in another land, you might consider the FM Global Resilience Index by property risk insurer FM Global as your guide.

Analysts at FM Global evaluate the ability of a people within their country to recover from disruptive events based on their current state. Analysts combine proprietary data from more than 100,000 commercial properties worldwide along with published data from the International Monetary Fund (GDP), the U.S. Energy Information Administration (oil), the World Bank (political risk, corruption control) and the World Economic Forum (infrastructure, supplier worthiness).

To come up with their ranking, analysts look at the likelihood for natural disasters as well as negative political events. Then analysts weigh factors such as the dependency on foreign oil, state of political stability, political corruption, state of economy, and state of infrastructure. Analysts combine these factors to form a score from 0 to 100, with 0 signifying lowest resilience and 100, highest resilience.

According to the exec summary, "Countries with strong economies, high-quality infrastructures and a high level of risk quality [standards] score well. This is why Norway, Switzerland and Canada appear in the top three slots."

Let's face it. Whether you are traveling, speculating or investing, it comes down to these: politics — terrorism, war, leadership instability, sudden political regulation, graft  —  and the earth — storms, earthquakes, volcanic eruptions, wildfires, drought, heat waves, floods. Would you like to get stuck in a country with no recourse or no way to save you once you put your past-earned profit or yourself at risk?

Here are the top resilient countries: 1 - Norway (100.0), 2 - Switzerland (98.9), 3 - Canada (93.2), 4 - Australia (92.1), 5 - Ireland (90.4), 6 - Germany (89.8), 7 - Luxembourg (89.7), 8 - Netherlands (87.6), 9 - Belgium (87.6), 10 - USA Region 3 (87.4 - see below), 11 - Finland (87.3), 12 - New Zealand (86.4).

Back in September, in YAY CANADA (AND AUSTRALIA, NEW ZEALAND, NORWAY AND ICELAND), I reported on the 2014 Chicago Council Survey of American Public Opinion and US Foreign Policy, which revealed beliefs Americans hold about foreigners and their countries. As well, I revealed my own beliefs.

If I were speculating in foreign stocks, likely I would do so in Canada, Australia, New Zealand, Norway, Ireland, the UK (20), Germany.

If I were spending travel dollars, likely I would do so in Canada, Australia, New Zealand, Japan (32), Norway, Ireland, the UK, Germany, Iceland (23), Finland, Sweden (13), Denmark (14), the Netherlands, Belgium, Switzerland, Czech Republic (26), Estonia (34), Poland (30), Slovenia (31), Andorra (nr), Luxembourg (nr), Monaco (nr), San Marino Liechtenstein (nr).

In the days of ISIS, likely I would avoid traveling to these cities in these countries: Sweden — Malmo, Stockholm; Copenhagen, Denmark; Germany — Berlin, Cologne, Frankfurt; Netherlands — Amsterdam, Rotterdam, The Hague, Utrecht; United Kingdom — Birmingham, Blackburn, Bradford, Leicster, London, Luton, Slough;  Belgium — Antwerp, Brussels.

USA Region 1 — Alabama, Connecticut, Delaware, Florida, Georgia, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Carolina, Rhode Island, South Carolina, Texas.

USA Region 2 — Alaska, California, Hawaii, Nevada, Oregon, Puerto Rico, Utah, Washington. 

USA Region 3 — Arizona, Arkansas, Colorado, District of Columbia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Tennessee, Vermont, West Virginia, Wisconsin, Wyoming.

USA Region 1 came in 18th. USA Region 2 came in 21st.

FM Global publishes the FM Global Resilience Index every year.

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Wednesday, October 8, 2014


Earlier today, in AIN'T THAT AMERICA FOR YOU AND ME. TRUE PRICES OF RESIDENTIAL REALTY OFF ALMOST 50% FROM PEAK CREDIT, I revealed to you the true median price for new and used houses sold has fallen a whopping -48.6% falling at an annual rate of -9.1% a year over the last seven years. As well, the true median price for new houses sold has fallen an eye-blackening -47.1% falling at an annual rate of -7.9% a year over the last seven and three-fourths years.

Here are what prices have looked like during the reign of presidents beginning with Kennedy.

No one can say how long a price rise shall run nor how long a price fall shall run before either trends start. That said here are yearly growth or shrink rates and the time of the trend.

The average annual median price growth for low to peak periods is 5.9%. The average annual median price decline for peak to low periods is -6.5%.

Back in May, 2014, I shared with you the Homeless ratio. The Homeless ratio looks at net charge-offs in relation to delinquencies for all single-family residential mortgages secured by real estate and booked in domestic offices of all commercial banks. Back in May, the Homeless ratio signaled the residential realty mess as over.

And back in May 2014, I said from a house price perspective, this has been the best time to buy since 1980 though not the best time to buy relative to income. If you have the a solid income and have wanted to become a mortgage payer rather than a renter, the window is open for a once-in-a-34-year opportunity.

However, if you are looking to speculate in realty expecting the same kind of return you would get from buying the S&P 500 for price, think again.

As I showed in IS THERE EVER REASON TO BUY GOLD, had someone bought the True S&P 500 at $86.50 at the end of Q1 1994 and rode that until Q3 2000, that lucky one would have enjoyed a yearly growth of 22.3%, double the return of the great gold rush of the 2000s, with the total growth coming in at 251.4%. In the long bull run between Q3 1974 and Q3 2000, True S&P 500 grew at a yearly rate of 7%, growing a full 484.3%.

So even in the best runs for true median price of new sold houses, buying at the low of residential realty can't compete with buying at the low of the S&P 500.

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So today at always must-read Mish, Mike Shedlock says that housing has peaked this cycle in New Home Prices: Are they Really Up this Year? Homebuilder Freebies: Reduced Closing Costs, Free Pools; Housing Has Peaked This Cycle. Is Mike Shedlock right? Not only is Mike right, but if only he knew by how much, he would be shocked.

According to the U.S. Department of Commerce, Census Bureau, median sales price for new houses sold in the USA hit a peak at US$285,600 at the end of April, 2014. The median sales price for new houses sold is up US$23,000 from the previous peak hit at the end of February, 2007.

According to those at Zillow, the median sale price for all houses, new and used, came in at US$207,000 at January 2008 and for August 2014, US$215,000. The median sale price for all houses, new and used, is up US$8,000.

By percent priced in U.S. dollars, median prices for new houses sold are up 8.8% over the last seven and a quarter years, rising at an annual rate of 1.2%. For all houses, new and used, median prices have risen 3.9% over the last seven years, rising at one-half of one percent (0.5%) a year.

Should anyone be wowed over this? All prices get denominated in cash. In the seven years since peak credit of Q4 2007, cash is up a whopping 62.6%, rising at an annual rate of 7.2%. Federal Reserve buying units are up 103.4% since peak credit Q4 2007, rising at an annual rate of 10.7%.

True prices tell a different story. The true median price for new and used houses sold has fallen a whopping -48.6% falling at an annual rate of -9.1% a year over the last seven years.

In true prices, peak median price for new houses sold came at the end of Q4 2006. The true median price for new houses sold has fallen an eye-blackening -47.1% falling at an annual rate of -7.9% a year over the last seven and three-fourths years.

Nothing has changed in the greatest depression of all-time.

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Monday, October 6, 2014


CBS TV of Philadelphia reported that Russell J. Percenti of  Seashore Road, Lower Township, N.J., shot down his neighbor's drone helicopter in the lands of 80s big hair Bon Jovi after the unneighborly neighbor spied on Percenti by repeatedly flying the drone over Percenti's house. The unneighborly neighbor of Percenti called the cops who came and arrested Percenti on charges of both criminal mischief and possession of a weapon for an unlawful purpose.

In New Jersey, 2C:17-3. a. (1) and (2) defines anyone guilty of criminal mischief if that one purposefully or knowingly damages tangible property of another or damages tangible property of another recklessly or negligently in the employment of fire, explosives or other dangerous means.

Oddly, cops didn't arrest the unneighborly neighbor for trespass nor invasion of privacy. The unneighborly neighbor seems guilty of 2C:18-3. c. by peering into windows or other openings of dwelling places adapted for overnight accommodation.

Unfortunately, New Jersey law regarding invasion of privacy seems antiquated, offering no punishment in the era of privacy-invading drones and upskirt video perverts. New Jersey invasion of privacy law (2C:14-9) only accounts for video reproduction of any kind when the victim has exposed intimate parts or who is engaged in sexual penetration as well as sexual contact in which a reasonable person would not expect to be observed.

It shall be interesting to see what defense Percenti shall offer. Percenti's lawyer better conjure up images of imminent threat, like a pitbull wandering on his parcel.

Of course those in favor of drones invading the lives of everyone should like to see Percenti convicted and jailed. Anyone in favor of privacy and freedom should like to see Percenti walk.

In the USA, at a minimum, piloted flying machines must adhere to visual flight rules. Regulation requires a visual flight rules pilot  to "see and avoid" obstacles and other aircraft under minimum visual meteorological conditions.

There are two rules governed by FAA reg 91.119, known as the 500 feet rule and the 1,000 feet rule. An aircraft must maintain an altitude of 500 feet above the surface, except over open water or sparsely populated areas. When flying in the latter, aircraft may not be operated closer than 500 feet to any person, vessel, vehicle, or structure. An aircraft must maintain an altitude of 1,000 feet above the highest obstacle within a horizontal radius of 2,000 feet of the aircraft over any congested area of a city, town, or settlement, or over any open air assembly of persons.

Since drones are piloted, shouldn't drone pilots adhere to VFR rules as well as the 500 feet and 1,000 feet rules? Why shouldn't drone pilots be required to follow the same rules as other piloted vehicles?  Why should hobbyist drone voyeurs be exempt from FAA regs except on their own parcels of land in which they have property, which is the right of ownership?

Wars of all kinds always seem to be the drivers of technological advance. Likely, drones won't escape this. I can think of a future whereby homeowners have jamming devices, which broadcast signals to protect themselves from spying drones, which fly too low over their houses.

You can be sure that ever newer drones shall have ever greater flight capabilities with ever better cameras. Before long, drone voyeurs should have drones with zooming cameras flying at heights that let their drones go undetected. At some point in future, hobby drones shall fly overhead and you won't know it.  Their voyeur cams will zoom in on your face and see your zits. Their voyeur cams will zoom elsewhere and see your ...

It's hard to see the difference between those flying drones in public who engage in voyeurism and those who use video cameras to record upskirt videos of unwitting female victims.

Enjoy this confrontation between a drone voyeur and a beach nudist.

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