Knowing The Future

I haven't posted anything for a while.

 

But I have a good excuse: I've been pretty busy pondering the future.

 

It all started with the analysis of my genome. Last month I volunteered to participate in a program in which I gave a sample of my DNA to an organization that's amassing genomes from a broad group of people. They're comparing them to the diseases that the test subjects already have or will get. They then attempt to correlate specific genes with the probabilities of actually getting those diseases.

 

The web site www.23andme.com describes the program. It's pretty interesting, assuming that you're interested in this sort of thing.

 

The whole process starts by spitting into a tube and mailing it to their lab. After a few weeks of waiting, the results are available on their web site. You can choose to share it with others. If you'd like to see my genome, just email me and I'll tell you how.

 

One thing my genome says is that I'm unlikely to be a sprinter. They were right on: I'm definitely not a sprinter.

 

It also said I probably have blue eyes. My eyes are green, or gray, or some color that's not blue. Well, it's not perfect.

 

On the more serious topics, like what diseases you'll get, it becomes more complicated. First of all, it's all presented as probabilities, not definite proclamations. So, for example, you may find out that you have a much higher chance of getting cancer than the general population. But then you're faced with the question of what do you do about it. In some cases, you may start to think about preventive surgery to remove the potential site of the cancer. This is pretty scary stuff.

 

This naturally leads to the question of whether you really want to know what the future holds, especially if it's bleak. Isn't science wonderful?

 

Alphabet Soup Spells Blah

I'm getting lost. There's old programs like the FDIC insurance program to protect bank depositors. There's the new Obama Stimulus Package. And then there's TARP, TALF, EIEIO (no, wait, that's a song from kindergarten), along with seemingly dozens of other new catchy-named programs emanating from the nation's capital. All are intended to reverse the economy from its current downward death spiral.

 

Yesterday, Warren Buffett was pontificating on CNBC that the economy had "fallen off a cliff" but would eventually recover. Well, duh ... yeah, even Jimmy Buffett could have said that.

 

There's universal agreement that the stock market is a leading economic indicator. It almost always starts its recovery six months prior to economic upturns. So the question that I would have liked Warren to answer is "When will the recovery take place?". Once we know that magic date, a monkey could throw darts at the stock market listings and pick winners, just as long as he tosses those darts six months earlier.

 

An old stock market adage is: "They don't ring a bell at the bottom (or top)". This is really too bad; it would make things a whole lot easier. As I write this, the stock market has just rallied for the first time in weeks. Is this the bottom or just a "dead cat bounce"? Who knows? Check back in several years and we'll be able to figure it out.

 

So what's the average investor to do? Just listen to the experts and when you think that enough of them agree on a common course of action, immediately do the opposite.

 

Failing that sure-fire piece of advice, it seems to me that the Obama Administration and Congress can help jump-start the economy and the stock market with one simple action above all others. Reduce or eliminate the taxes on dividends and long term capital gains. This single action will pump huge amounts of cash into start-ups and the stock market, revitalizing the economy and creating jobs.  Obama is scaring the bejesus out of potential investors worldwide because he's talking about raising these taxes instead of lowering them.

 

One other thing. It might be a good idea to hold gold or some other hard assets in your portfolio. While I know that the current concern is deflation, at some point, the massive creation of money is going to set off a jumbo-sized round of inflation.

 

No! I don't have any idea when that magic date will occur. I sure wish I did.

 

How Men Should Pee

There I was, just minding my own business, looking at the comments posted by loyal readers regarding my last post about fighting in hockey, when kaboom, out of nowhere (actually from SpecRiter located in Canada), comes this bombshell: "Saying that fighting in hockey should be banned is like women saying that men should sit down and pee instead of standing... it is just against our nature."

 

Wow! I never really thought about whether it's against the nature of man to pee sitting down, let alone what peeing has to do with hockey. 

Reflecting on men's peeing, I guess I must have always figured you'd stand when it was convenient (usually when number one only was involved) and sit when it was appropriate (when number two was involved). These are not rigid rules. They can be waived, for example, when alone in the woods. Then it is perfectly fine to throw caution to the wind and take whatever stance (or not) you feel like at that moment.

 

Being naturally inquisitive about such important issues, I immediately googled the search words "men pee when sitting". In short order (0.23 Seconds), I was presented with 442,000 results. I never knew so many people were concerned about this topic. Also, all those people and computers at Google must have been sitting around and just waiting for my inquiry judging by how rapidly they delivered so many references on the subject.

 

The number one search result informed me that 40% of Japanese men pee while sitting. This percentage of men sitting is three times as large as the percentage who did so when the survey was taken in 1999. The increase is apparently due to pressure from wives on their spouses to cut down on the urine splashing. It's also interesting to note that the Japanese actually do surveys on stuff like this.

 

Second on the list was a link to a short video from Larry David on the subject. You can view his remarks by clicking here (the video takes less than a minute). I recommend it heartily.

 

As with most activities on the web, you can invest (waste) untold hours researching this topic. For example, I ran across a photo from travel writer Rick Steves that tells us that you won't find a single urinal in Iran. He says it's a "religious thing".

 

All in all, I learned a whole lot while having tons of fun. And I still think that fighting should be banned in hockey (whether or not peeing has anything to do with hockey).

 

Fighting Is Still The Rage

Why do they fight?

Who, you ask? The Palestinians and the Israelis? The Islamic Extremists and the Western World?

 

No, combatants much more relevant to everyday American life: hockey goons, of course.

 

It's once again the time to ask why hockey permits, or even encourages, fighting when all other major sports (with the exception of boxing and its ilk) have effectively outlawed fisticuffs. The latest questioning was precipitated by the recent tragic death of a 21 year old minor league player who lost his helmet and cracked his head on the ice during a fight.

 

When I played eons ago at the lowest amateur levels, occasionally even players of my class would lose their cool in the midst of a skirmish and start throwing punches. But that was not premeditated. It was just the result of the fast play and hard hitting. At the NHL level, fights were common but usually not premeditated.

 

Fighting has now become a ritual in which the designated goon for each team squares off against his counterpart. Usually, they have not had any meaningful interaction with each other apart from exchanging words like "let's go". The fight itself often is preceded by each combatant removing his helmet before the fists fly so they don't break their hands on the other guy's hat. Happily for fight advocates, it's still kosher to break your hands on your opponent's skull.

 

Ostensibly, the fighting is a self-policing action by the players to eliminate the borderline to flagrant stunts that the referees have missed or simply ignored. But that seems hard to believe. If the players see what's happening, it's pretty likely the refs see it too. Also, a fight between the goons is hard to connect logically to actions taken by other players.

 

The only reason why fighting still is a part of the game is because some fans like it. Without this fan support, the ritual would be gone in a flash of a league-mandated game penalty and fine. And that's just what the league should do. No one complains about the lack of fighting during the playoffs when the stakes are too high to give up a roster spot or take any penalties. Fans who are excited about the fights should go to a boxing bout. The rest of us can enjoy the skill and passion of the athletes.

 

Hockey is a religion in Canada and the northern part of the U.S (also known as Baja Canada). It has struggled to become relevant in the rest of America (sometimes referred to as Alta Mexico). Catering to the World Wrestling Federation crowd's sensibilities is not the way to success. The best hope for the NHL is to capitalize on the engaging personalities of its stars like Sydney Crosby, Alex Ovechkin and Joe Thornton, who, by the way, seem like absolute saints when contrasted with the ego-maniacs headlining baseball, football and basketball. This, along with High Definition TV and lower ticket prices, rather than fighting, is what the sport needs.

The Logic of War

What's happened to wars? Genghis Khan, Alexander the Great and Attila the Hun wouldn't recognize today's version at all. It used to be that if you won, you looted the country, enslaved its people and renamed cities. No questions asked. That was the way war was. It was simple and straightforward. War was a logical (although very brutal) method of settling disputes and/or increasing a country's power and wealth. An added bonus was that it also served as a pretty effective method of increasing the pool of potential brides for the victors.

 

No more. Starting somewhere around World War I, wars became much more complicated endeavors. Instead of the pure simplicity of being a conqueror, the winner suddenly was faced with the prospect of taking care of the losers and rebuilding what they had just destroyed. Wars actually cost the victor power and wealth. What a loony concept!

 

After World War II, the U.S. celebrated its victory by creating the Marshall Plan, under which it spent a fortune building up Germany and the rest of Western Europe so they could compete with the U.S. Similar support was given to Japan. This activity was a fabulous success, as denoted by the loss of the American car manufacturing industry among its other achievemnents. Some might quibble that rebuilding Western Europe and Japan was necessary to fend off the Russians from taking over, but it still seems crazy that the winner would pay the losers.

 

As I write this, the U.S. is fighting wars in Iraq and Afghanistan, while the Israelis are devastating the Gaza Strip. In none of these three conflicts will the likely victor win anything as simple as land and slaves.

 

The U.S.eradicated the Saddam dictatorship and now just wants to get the heck out of Iraq after spending 7 years, several thousand American lives and more than $600 billion first destroying and then trying to rebuild the place. The initial assault and its follow-on insurgency, along with a civil war among the entirely insane Islamic Sunni and Shia, has killed tens of thousands of Iraqis and generally turned most of the rest of the world against the U.S..

 

In Afghanistan, the U.S. is trying to erase the nutty Taliban, probably leaving a bunch of warlords to rule in its place. Given Afghanistan's history of swallowing up the British and then the Soviets, the U.S. will be lucky to extract itself from there anytime soon. How much it will cost in lives and treasure is anyone's guess; but no matter what the cost and how badly the Taliban are crushed, the odds are pretty high that Afghanistan will slide back into the 12th century rather than become the 51st U.S. state.

 

In Gaza, the Israelis are beating the pulp out of the insane Hamas zealots. The Israelis say they just want Hamas to stop firing rockets at them. They haven't yet publicly said that they want to totally eliminate Hamas, but that's what they really desire. The Israelis will probably not fully achieve either objective once they're forced by the rest of the world (but mostly the U.S.) to settle for one more in a seemingly never-ending number of cease fire agreements. Actually, a simple cease fire in Gaza may be the best outcome for the Israelis. If the Iranians, who are funding Hamas, also free Hezbollah to attack from Lebanon, the costs could escalate to really ominous levels.

 

All in all, war made a whole lot more sense in the old days. Winners won and losers lost. Nothing more, nothing less.

 

Money For Nothing - Part 3

I've ranted about "money for nothing" several times before. If, by chance, you missed it, or you just want the sheer joy of experiencing it again, you can read it here, here and here. But last week, it actually was literally true: The U.S. government auctioned $32 billion in four-week T-bills at 0% interest Tuesday, the lowest auction rate ever. In the after-market, the price rose, and people bought T-bills at a negative rate of interest, apparently extraordinarily gleeful to lock in their losses.

 

This insanity is a result of the fear that investors have of taking any risk at all. For nothing is seen to be safer than T-bills, which will be repaid in their entirety with new, crisp, freshly printed, dollar bills. If the government needs some more dollar bills, it simply prints more of them. No limit. No questions.  Pretty clever, eh? (as our Northern neighbors might say).

 

Well, all this leaves me completely baffled. Normally when a government runs its currency printing presses overtime, the inflation rate soars and suddenly wheelbarrows are required to haul around all the paper needed to purchase a loaf of bread. But it seems that every country in the world is hyperactively churning out paper money. Nobody's money is worth more than the next. You don't bail out of the dollar for Yen, Euros or Pounds because they're devaluing too. Even the Chinese are printing and spending like mad.

 

So, what does this all mean? Apparently, that there's no limit to the size of the government stimulus (sounds erotic, doesn't it?) programs that suddenly are now possible. Both namby-pamby Democrats and hard-hearted Republicans can hardly contain their excitement.

 

The U.S. has made commitments so far of upwards of $8 trillion in an attempt to halt the economic slide. Is there an upper limit? Beats me. Even the Bush Administration is now saying they are ready to pump untold billions into the moribund US Big Three auto companies before the Obama Administration gets their wack at doling out more of the cash.

 

By the way, Detroit seem to be pretty scared of using the word "bankruptcy". What's all this nonsense about getting the government to negotiate with the "stakeholders to share the pain" so they can avoid bankruptcy? Sharing the pain is just what a bankruptcy judge does in a chapter 11 filing. The difference is that the judge is doing the pain sharing pursuant to the current law, while the government actions being proposed don't pass my smell test for legality at all. They're more akin to simple extortion that's probably unconstitutional anyway (The Fifth Amendment). 

Anyway, back to the topic, in bankruptcy the auto companies continue their day to day operations. They, along with all their employees, don't disappear overnight. It's pure hogwash to say that people won't buy cars if the manufacturer is in bankruptcy. Anyone who has been paying any attention at all to the pleading on bended knee in Washington knows by now that the Big Three are in serious financial doo-doo. 

And, if you'll allow me just one more "by the way," I heard a great line which referred to the $8 billion General Motors paid last year for retirees' and current workers' medical bills. The talking head on CNBC said: "General Motors is a health care company that just happens to make cars."

 

I also recently read an  economist's apparently serious proposal to revive the housing market (remember, this is what the whole mess is about) that struck me as something Lenin would adore. He proposed that the government just buy everyone's existing mortgage and refinance it at a 1% interest rate. The government would also offer new mortgages to new buyers at the same rate. 

While we're at it, how about if the government solved the auto companies' problems by offering auto loans at 1% interest to anyone who had or could obtain a driver's license? Why stop there? How about 1% loans to buy computers and networking gear so Silicon Valley doesn't implode? You get the idea. Since the money is for nothing, nothing is off limits. Just propose it and it happens...money is no object.

 

Palin's Victory Tour

I was all set to write about the wretched economic situation and Detroit's plea for a bailout. Then, out of the blue (or is it red?), up pops Sarah Palin and suddenly I'm right back in Palinmania.

 

Did you catch any of her "victory tour" this week? It seems to have started in her kitchen in beautiful Wasilla. There she was, being  televised to the world, orating in her peculiar vernacular, while simultaneously whipping up a batch of moose stew ( do you "whip up" moose stew?). I bet you thought it would be hard for her to walk and chew gum. Not for our hockey mom. She was as smooth as a fresh sheet of ice. 

Her week continued with interviews on CNN, NBC and Fox, among others. The tour culminated with a rousing speech to the gathered Republican governors in Miami, eager to learn from Palin just how the party would be reassembled into anything that might have any chance of winning a national election again in their lifetimes.

 

Wait a minute! Did I just say that the Republican party didn't win the last election? Oops, yes, that's what happened all right. Obama did win both the popular vote and the electoral college vote. That means McCain and, I assume, Palin, must have lost.

 

Well, then how do you explain Palin taking a victory tour?

 

You can't. Unless your logic flows like Sarah's syntax.

 

Just to remind you, here's an example of "Sarah Speech", as reported by Maureen Dowd last week in the New York Times:

 

"My concern has been the atrocities there in Darfur and the relevance to me with that issue as we spoke about Africa and some of the countries there that were kind of the people succumbing to the dictators and the corruption of some collapsed governments on the continent, the relevance was Alaska’s investment in Darfur with some of our permanent fund dollars."

 

I guess that's clear enough. Even George W. would be proud to have uttered that particular string of words.

 

Re-reading that little ditty, it's easy to see why she has garnered a 98% name recognition among the great unwashed masses. Yes, of course, they like the fact that she's a hard working super-mom; and her looks, ideas and logic are simply captivating. But, most of all, they can't get enough of her folksy way of speaking. Her fans say that they would feel comfortable with her in the White House because she's just like them.

 

As Sarah herself would say, "this should result in a loud shout-out to the country's educators that they'd better get on the ball and plow through those glass doors that may be open just a crack". 

So therein lies the lesson for today:  there's a new day dawning, and it's all about teaching our children to speak with a clarity that every "Real American" (not those wussy Northeastern and West Coast elitists) can understand.

 

Oh, and one more thing. The government would be crazy to throw any money into the coffers of the big three automakers unless it's part of a pre-packaged bankruptcy proceeding in which: the management is replaced; the labor contracts are renegotiated; critical suppliers are paid so they don't go bankrupt; the common shareholders are wiped out; outstanding bonds are converted to common equity; and the government money is injected as preferred stock or senior bonds.