Half Wisdom Half Wit

PayPal remembers, even if you don't want to...

2012-01-26T18:48:00.003-07:00

Here is a common question on the Internet:
"How do I delete old shipping addresses from PayPal?"

Answer: You can't. You can spend hours trying to figure out how.

Then call PayPal, and once you get through to a human being, THEY can delete old addresses, but you can't. Seriously.

You can add addresses. You can't delete them. And every stale address that stays there has a chance to be used by mistake when something gets shipped. Everyone that you have ever sent anything to is listed right there, perhaps to your present dismay or embarrassment.

It gets better, at least, it gets more intense. If you link PayPal with its parent company eBay, all those people and addresses from your past show up as eBay shipping addresses too.

And no, there is no delete button that you can depend on.

Fail.

This might not be a good sign...

2012-01-24T23:04:00.003-07:00

The Baltic Dry Index reflects the demand for shipping. Someone just put a hole in it.

Mule Jumping

2012-01-23T17:00:00.004-07:00

Who knew?

Lunacy

2012-01-23T06:39:00.001-07:00

Inflation? Deflation? Both?

2012-01-21T07:54:00.006-07:00

Every great power succumbs to the temptation to debase its currency. The rulers of Rome, China, Persia, Great Britain, Germany, and the US have each, in their time, seen fit to print money at a rate that outstrips the growth of their economy. So has every country whose politicians control its treasury, from Argentina to Zimbabwe in this century alone.

The inevitable result is a loss in the purchasing power of the money of the realm. Inflation.

Every consumer, individual or corporate, would like to have more money at his disposal than he currently possesses. There are three ways to do this besides earning it: beg, borrow or steal. Setting aside begging and stealing, we can focus on borrowing. A wise man once observed that "every loan is paid, usually by the borrower and the rest of the time by the lender." (If that wise man had been cynical he would have added "or the taxpayers of future generations").

When money is loaned into existence, everyone feels richer. The lender expects to get repaid with interest, and counts his loan as an asset. The borrower has the use of more money than before, and spends the money to satisfy his needs.

But when loans can not be repaid, that sense of wealth is replaced by something approaching despair. And the money supply (by many definitions) can be seen has having shrunk. Remaining money rises in purchasing power. Deflation.

Let's look at how this translates to real life in 2012. In the US, home prices have tripled from the mid 1990s to 2007, then dropped to merely double their 1996 levels. The function of housing did not triple in value, just the price.

The US Dollar held its value as measured by the USD index, so in terms of one paper currency vs another, nothing much has happened. But if you had sold your house in 1996 and taken the cash and buried it, you would have lost 2/3 of your purchasing power 11 years later. Inflation. Had you been smart enough to sell your house in 2007 and buried the cash, you would have gained 50% in housing-related purchasing power. Deflation.
Real economists will protest, if they get this far, that I have grossly oversimplified how money works. I agree. The point I am striving to make is that things we borrow money to acquire rise in price if money is easy to borrow, and drop in price if money is hard to borrow. The value (utility) of those things does not change, just the price. From the perspective of money, a dollar is worth more after deflation than after inflation.

What about things that we do NOT beg, borrow or steal to acquire? If you need a loan to put food on your table, you are in trouble (and you are probably not reading this, nor do you need me to tell you that you are in trouble). Things we buy with cash rise in price when currency is debased. "What this country needs is a good 5 cent cigar" is a familiar phrase first heard in the 1870s. Cigars are consumables, and their intrinsic value doesn't change much. But their price does.

What does all this mean in 2012? Deflation AND Inflation.

Expect a continued drop in the price of things that people borrow money to buy, because credit has had its bubble and is collapsing
Expect a continued rise in the price of things that people pay for with cash, because the value of cash has been debased for decades and is still being debased

Abundance vs Scarcity

2012-01-19T10:51:00.005-07:00

Lots of changes these days in the Halfwise household: my wife and I have relocated, she has retired from paid employment, I am cutting back my hours, and we will bring her mother under our roof.

When we examine the trade-off of time for money, we likely come to different conclusions at different stages of our lives. When I was starting out, it was "give me all the work you can." I had lots of time, not much money, and maximizing income was what work was all about.

Since then, life has taken interesting twists and turns, some of which were lucrative and some of which were damned expensive. I have lived lean, I have lived fat. Fat feels more comfortable.

As of a few days ago we have relocated to live on an island, with arcane rules for recycling (milk cartons can go in to a compost bin with dirty kleenex and coffee grounds, but glass jars must be spotless before they go into their recycling stream). I can see how someone living here all their lives would come to believe that scarcity requires rules, imposed by an outside authority. The west coast of North America seems to spawn zealots, more than willing to impose views that nature must be protected from mankind.

To a degree, this viewpoint has merits. People can be cruel, greedy and thoughtless. Free markets do not immediately punish these behaviours (but in the fullness of time what goes around comes around).

Today is the morning after a US decision to kick the can of Keystone Pipeline approval down the road. Opponents of the development, apparently unburdened by reference to any maps of existing pipelines, predicted dire consequences of adding a pipeline to the US landscape. "No big deal" implied Canadian politicians, and turned their attention to an alternative, the Gateway Pipeline that would take oil to the west coast for export.

There is no scarcity of oil. There is a scarcity of common-sense acceptance that oil leads to wealth that is essential to society, to education, health care, highways and arts programs.

There is no scarcity of technology, that makes the transportation of oil by pipeline a manageable risk. There is a scarcity of perspective that enables the general public to recognize that risk accompanies everything we do, including choosing to delay activities that create wealth.

There is an abundance of opinion, including this trivial blog posting. But there seems to be an abundance of entitlement amongst people who are both ill-informed and unelected, that their precious opinions must be respected, not just endured.

Social progress requires the freedom to express strong opinions on all sides of issues. From the resulting debate emerges an alternative that likely would not even have been considered otherwise. This is how we advance.

Pipeline opponents, you don't need Halfwise to tell you be strong in seeking safeguards. But while you are "safeguarding" the rest of us, keep the perspective of our abundantly active society. You are part of it and benefiting every day.

Gaming the system for personal gain but international pain

2012-01-13T11:58:00.005-07:00

I am a free market kind of guy, but games that threaten the global financial system worry the heck out of me. I am not suggesting more regulation; I am publishing this to highlight some risks that are baked right into the Euro-cookie.

Everyone knows that Greece is in trouble financially. In many ways, the Greeks no longer rule their own country; a troika unelected by any Greek is in charge. The International Monetary Fund, the European Commission and the European Central Bank now hold the purse strings for the birthplace of democracy. Greece is not alone, of course, it just happens to be in the news. Italy's situation is similar.

Any rational investor would want to protect his capital during difficult times. You know, maybe buy some insurance (a credit default swap, or CDS). Naturally, every insurance policy has its fine print. Credit default swaps only pay off under certain forms of financial failure. You are insured only for certain hazards.

Here is where the cookie starts to crumble. According to the Institute for Individual Investors, there is a total of approximately €355 billion in outstanding Greek debt, with €100-140 billion held by the ECB, IMF, and EU (the Troika). This includes the €35-40 billion purchased by the ECB during 2011. The remaining €200 billion plus is held by banks, pension funds, and, increasingly, hedge funds. It all comes to a head in the next few weeks.

Those private holders are expected to take a €100 billion and change loss; the Troika’s holdings would be unaffected by the plans to resolve the debt crisis. That alone should raise eyebrows, but let's look more closely.

If certain Greek debt was expected to take a 50% write-down, it would be priced at 50% of face value. Instead, it is selling at a bit over 30% of face value. What gives? Let's quote directly from the IFII's free subscription Tycoon Report for January 13th:

...magnanimous private holders are expected to voluntarily take a 50% haircut. The plan under consideration is that for each €100 of debt tendered, €15 in cash would be received and €35 in long dated (as much as 30 or 40 years), low-interest Greek debt.

Now if this plan was anywhere close to a reality, Greek debt would be trading near that 50% of face value mark, but it is not. It is trading around 32% of face value.

Additionally, if this voluntary plan goes into effect, it would not be a “credit event”. It is a non-event according to the determiner of such things (the International Swaps and Derivatives Association), because it is “voluntary” and not everyone is affected; remember the Troika would be exempt. That is important, because it would not trigger the insurance contracts on the bonds, known as credit default swaps (CDS). Without the insurance to make up the 50% of value that goes poof, losses will be very real.

However, if not enough private holders volunteer, then the deal falls apart and Greece will default for real. The CDS holders will be made whole because a default is a “credit event” and will affect everyone.

So hedge funds have been accumulating Greek debt with the specific intention of not volunteering their holdings. They are also buying CDS, which cost 8% of face value.

In other words, funds are paying €32 for Greek bonds that have a face value of €100, and paying €8 for insurance, resulting in a total cost of €40. When they withhold their bonds from the voluntary swap, Greece will be unable to roll its debt and will default. Then the CDS will trigger and they will receive €100 on an average investment of little more than €40. A tidy 150% profit before the end of March!

I bolded the part that is the most dangerous part of the game. The report goes on to say:

A Greek default will have huge ripple effects. It doesn’t even matter if Greece is forced to leave the Euro or it is allowed to stay -- a run on Italian and Spanish sovereign debt is sure to follow.

The big money manipulation of the markets is going to cause a serious monetary and economic dislocation that could move Europe rapidly from mild recession to full on depression. The US stock market and economy are not on an insulated island; there will be a deleterious effect on both when the tsunami effect hits these shores.

So let's sum this up in layman's language.

Greece owes money it won't pay back, to banks and countries that should never have lent it in the first place.
Those banks and countries have replaced Greece's leadership to try to make sure they get their money back.
Some private parties are buying the parts of the debt that are not controlled by the troika of replacement leaders.
The private parties will try to arrange things to maximize their profit on the questionable debt.
The way they are going about this threatens the global financial system.

Got gold? Cash? This could turn out badly.

Using the Kindle with Calibre e-Books

2012-01-10T15:49:00.004-07:00

I travel a lot on business (>150,000 air miles last year, without ever checking a bag) and a Kindle is a great way to carry reading material without getting weighed down. My newspaper subscription, for instance, is on the Kindle, and other than some funky formatting issues, I prefer it to the tree-and-ink version.

The free books available electronically are another great feature. And a free software called Calibre works as an essential middle-man between the source of the book and the Kindle. Go to Calibre and download the version that works on your computer or portable device.

Now you can work with anything published in standard epub format.

Say you want one of the hundreds of excellent books and articles from the Ludwig von Mises Institute. Go to their site and track down what you want to read. Let's say it is Leonard Read's classic article I, Pencil, which is free of charge.

Click on it and download it into wherever your downloads go. Open Calibre, and click on the Add Books button. Browse to your Downloads folder, highlight the I, Pencil file and click the Open button. Calibre brings the article and its cover illustration into the Calibre Library on your computer. Then plug in your Kindle and click on the Send to Device button. Keep an eye on the little wheel at the bottom right of your screen...it takes a bit of time to squeeze the book through the wire.

Done. Now you can read the article for free. Plus you can use Calibre to manage the books on your device.

Technivorm

2012-01-09T17:37:00.003-07:00

Coffee is an interesting beverage to brew. There are only a handful of variables:

What kind of beans are we using?
How coarsely are the beans ground?
How consistent is the particle size of the ground beans?
How pure is the water?
What temperature is the water?
Are we using a filter?
If so, what kind? Paper or metal?
How fast does the water flow through the beans into the pot?

Okay, maybe there are more variables than you might imagine.

Technivorm is a Dutch company specializing in coffee makers that (a) heat water to the right temperature (195 - 200F) and (b) have adjustments to restrict the flow of water through the filter. Most drip coffee makers fail at both of these.

We have one. It makes better coffee than our old drip maker. Better flavour, better to drink.

And now there's a Kindle in my briefcase

2011-05-28T08:28:00.005-06:00

I am a new and curious Kindle owner, thanks to my lovely wife.

Interesting device: it can hold 1500 books at a time, adding a new one is instantaneous, you can search for text, highlight and annotate, hell you can even check Facebook, which by the way looks better using the texty version of touch.facebook.com.

If I had bought the books on Kindle that I bought in paper, I would typically have saved a buck or 5 on them, plus delivery charges for the online purchases, if any. So there may be a cost savings over time.

But here's the thing: I can get thousands of books for free, books that I have always figured I should get around to reading...EM Forester, Joseph Conrad, Dickens...that are off copyright and there for the download. And since we have a house full of books with no shelf space for new ones, it's got some practical value in terms of clutter control, no small feature I must say.

I downloaded the complete works of Winston Churchill for free, only to find that it was not THAT Winston Churchill but a US author who writes of the days of Davey Crockett. So it turns out you can easily delete books from your device...just push the left side of the Kindle's square mouse device once inside the book in question. Easy peasy.

For the broader web experience, count me impressed in a Windows 2 for DOS sort of way. For the book experience, count me impressed period.

It's amazing, this device, for its stated purpose of enabling the acquisition of books from a huge list, for little or no money, from pretty much anywhere, and allowing the owner to read them on the run, in places where the brighter the light the better the experience, unlike my Panasonic Toughbook on which this is being typed.

The typing and web interfaces are not even Blackberry-simple, but the book buying and reading functionality and interfaces are completely streamlined and easy.

Buy one for what they are good for, and look past the clunkiness in what it wasn't really designed for. No regrets, and two thumbs up.

How to remove stuck spikes from your golf shoes

2011-05-26T19:19:00.006-06:00

The shoes that have to carry me around the course need new soft spikes. Of course, when your shoes are new, removing the old spikes is easy. But two years later, the rubber things are worn down, the tiny holes for the wrench are full of something impenetrable and mere mortals can't get the old spikes out no matter what they try.

So my first attempt involved a claw-like spike wrench at the pro shop. This tool dispenses with the two little tips and substitutes a medieval device that grabs the outside edges of your spikes. No luck.
My second attempt involved the pro shop's industrial strength spike remover. All I managed was to shred some rubber.

My third attempt involved some physics. I put my shoes into the freezer overnight in the hopes that the lower temperatures would both harden the rubber and loosen the grip of the threads.

As if.

So tonight I hauled out the electric drill and deepened the wrench holes, right into the plastic of the old spikes.
Finally the regular spike wrench had something to grip on, and after I wrapped its non-ergonomic handle in the finest of old golf towels and leaned on it, the shoes released their beloved spikes.

Kind of makes you wonder how the darn things fall out, given how hard it is to get them out when you want them out.

That damned Squeak!

2011-05-23T17:35:00.003-06:00

It started about 4 weeks ago, a squeak from somewhere in my basement. At first I thought it was a smoke detector with a low battery. So I took the battery out of my lower level detector, but the squeak continued.

After reinstalling the battery I started going through the basement. The squeak was only every 5 minutes or so, so there was nothing that I could follow to the source. Every time I heard the squeak I tried to zero in on where it was, but it seemed to move around.

There's an old alarm system from a previous owner, which we have never fully decommissioned. I figured it must have been this thing, beginning to act up. So I removed the backup battery (the squeak still occurred), I disconnected the power supply (the squeak still occurred); I bypassed every zone in the alarm system (the squeak still occurred) and I put it all back together. The squeak still occurred.

Examine the various modems and routers. Nothing.

Up into the ceiling...listening. Sometimes it felt as if I was getting closer but it was never as if I was next to the source.

Turn off the power supply to every basement room. The squeak still occurred.

What did it turn out to be? Someone had given me a smoke detector that I did not feel the need to mount, so I put it in a bucket that also held a cleaning brush and other basement randomness, on the floor behind a door. Eventually the installed battery began to fail, causing a chirp (my first instinct was right!) The sound went straight up from the bucket, so you couldn't really pinpoint where it was coming from.

Now I miss the damn thing.

TurboTax, Quick Tax and Stock Trade Tracker

2011-04-02T15:25:00.004-06:00

I have been a user of QuickTax for years, and for 2010 taxes it is now called TurboTax.

If you buy the Platinum version it allows you to record all your stock buys and sells in a separate program called Stock Trade Tracker, or STT.

Every year I struggle to remember how to import the info from STT up into QuickTax, and I have just struggled to get it into TurboTax. But now I remember. I will write it here so I can find it next year...

It looks like it should be easy, but it is not.

First, if you are on the EasyStep screen that asks you for T5 information, don't try to use Stock Trade Tracker to provide it. STT does not produce T5 forms. Move along. The chance to enter Capital Gains and Losses comes later. Why does Turbotax even hint that STT is useful for T5s?

When you do eventually come to the Easy Step that looks for Capital Gains and losses, it will give you a screen that looks almost the same as the one asking for T5 info. But now, click on the link that opens STT. Then go to Reports and select Capital Gains. Then pick Last Year. Make sure it is what you want. For example, if you have TFSA trades in there, take them out. If you have RRSP trades in there, take them out.

Assuming it is the right info, go back to TurboTax and follow the instructions. It works fine.

What DOESN'T work fine is the glib assurance in the TurboTax help screens that the process is as easy as clicking one button. No, you have to work through several steps of opening STT and picking your report. Judging from the frustrated and unanswered comments in the margins, TurboTax has an opportunity, shall we say, for an improvement in customer service.

This is where statistics can let you down

2011-03-19T15:25:00.001-06:00

Cynicism vs Observation

2011-03-14T22:30:00.001-06:00

The power of accurate observation is commonly called cynicism, by those who haven't got it.

Bertrand Russel

Climatologist explains "Hide the Decline"

2011-03-13T21:15:00.000-06:00

Gold:Silver ratio below 40!

2011-03-06T19:52:00.007-07:00

Historically over the centuries, the Gold:Silver ratio was 15:1. Gold was worth 15 times what silver was worth. Fifteen ounces of silver would buy one ounce of gold. The ratio broke out of this pattern in the late 1800s and was recently over 65.

Silver is seen as the more speculative of the two metals, and a rising appetite for silver has been interpreted as a greater appetite for risk. When markets fail, silver usually falls faster than gold, driving the ratio higher.

Monday morning in Asia, the ratio dropped below 40, with Gold at $1436 and Silver climbing over $36.25.

Check this link for the latest chart.

Never seen anything like this before

2011-02-20T18:08:00.003-07:00

Why you're not married

2011-02-20T11:57:00.003-07:00

There is more truth in this article than you will find in the entire self-help section of your book megastore. You, young lady, are not married for one or more of the following reasons:

You're a bitch
You're shallow
You're a slut
You're a liar
You're selfish
You're not good enough (in your own mind)

Read the whole thing. Thanks, Captain Capitalism, for the original link.

When you are burning the candle at both ends...

2011-01-29T09:51:00.003-07:00

You have no one but yourself to blame.
*

Lots of contributors to temperature

2011-01-23T08:03:00.004-07:00

This posting at Watt's Up With That enumerates a dozen contributors to temperatures, and temperature trends.

After mentioning a handful of mechanisms that would not be noticeable on human time scales (eg the sun is slowly brightening) the author rolls up his sleeves and gets into solar cycles, ocean oscillations and atmospheric and weather phenomena, along with descriptions of whether their feedback is positive (eg surface ice) or negative (eg clouds).

The comments are also excellent, serving to clarify and expand on Dr. Glickstein's posting.

When someone wrings his hands over CO2, one might hope that perspective such as this would be of comfort.

But have you noticed that news that implies disaster is not imminent, is not received with joy by the AGW community? A cynic might wonder whether the agenda is more important than the underlying reality.

Nah. Couldn't be.

Let the game come to you...

2011-01-05T06:33:00.004-07:00

*Title widely attributed to Larry Bird, also some capable stock market advisors.

Besides seeing the wisdom in it, I really like the pun.

A useful response to CO2 Hand-wringing

2010-12-30T12:04:00.002-07:00

I saw a friend's post on Facebook the other day that quoted a regional government website from BC:

"Climate change is a complex, multi-year challenge for our region. It is a wake-up call to a system in decline"

All I can say is

"I am enjoying the current interglacial period, which is overdue to end. Don't you think we are going to need all the warming we can get?"

(By the way, note the effortless slide into Marxism implied in the BC position. If the science is settled, for something that hasn't actually happened yet, why is the policy response based on a philosophy which has been proven an utter failure?")

Christmas

2010-12-25T06:58:00.000-07:00

My Blackberry isn't Working...

2010-12-22T19:51:00.001-07:00

Guys, it doesn't get any better than this.... Oh yes it does!

2010-12-20T20:41:00.003-07:00

Big trends

2010-12-19T08:51:00.004-07:00

If you spend some time learning the lessons of markets, you begin to appreciate the simple wisdom of well-worn phrases like "The Trend is Your Friend."

Whether your approach is technical (what is everyone else doing?) or fundamental (what should this investment be worth if people came to their senses?), there is value in identifying trends and following them until evidence comes in that they have reversed themselves.

Trading out of a stock on its way up, or selling it at the same price on its way down, will make you the same amount of money. Imagining that you can call the turning point consistently is mostly self-delusion. Get on board with the big trends, and ride them until after they turn.

So what are we to make of this trend? The ratio between the price of gold and the value of bonds has been trending relentlessly in favor of gold since before the beginning of this century. The fine print, which is readable at the link but perhaps not on my embedded chart, says the market is anticipating inflation, as evidenced by the steeply rising trend.

A social network Christmas

2010-12-18T07:52:00.001-07:00

Brightman & Bocelli: "Time to say Goodbye"

2010-07-09T16:29:00.000-06:00

How to groom a dog, if you actually wanted a cat

2010-06-08T16:08:00.002-06:00

The trend is your friend

2010-06-07T13:02:00.000-06:00

Howard S. Katz
Jun 7, 2010

Playing the markets is not an easy occupation. One normally thinks that it involves buying at the bottom and selling at the top. But in fact, one must make a new decision every trading day. We had a good illustration of this on Friday, June 4 when gold plunged sharply in the morning, and at the same time the dollar broke out of a small triangle to the upside. Since the dollar often moves opposite to gold, this was a bearish signal for gold. A year’s trading, then requires 250 decisions. A decade’s trading requires 2,500 decisions. Fortunately, to make money we do not need to get all of them right. A good majority will suffice.

(Click on images to enlarge)

Above is a daily basis chart of the U.S. dollar (candlestick) showing Friday’s breakout to the upside confirmed by a high volume day. With gold plunging Friday morning and the dollar breaking out upside, it was a scary moment for gold bugs. Fortunately, gold rallied strongly in the afternoon. It made up all the morning’s losses and put on a solid gain. Indeed, GLD (the gold trading instrument which has the latest close) completed a bullish engulfing pattern, a candlestick signal predicting higher prices.

It seems that the markets are saying that the old scenario of gold moving opposite to the dollar (and with the euro), which dominated much of the last decade, has changed. Now the scenario is that all paper money is collapsing against gold. And for the past 4 months, the dollar’s rise against the euro (and other currencies) has been accompanied by a nice gain in gold.

This illustrates the importance of perspective in trading the markets. All of a sudden, as soon as your own money is at risk, everything looks different. When you were paper trading, you were calm and rational. But now your perspective has collapsed. “Honey, could I have the paper? I need to see what my stock did today.” An hour now feels like a week, and waiting for the end of the day seems like eternity. With your perspective out of whack, your judgement follows, and soon your paper trading profits turn to real losses. (This, by the way, is why I do not recommend paper trading. Instead I recommend trading with modest amounts of money. That will give you the sense of what speculation is really like, and you will learn to make sound judgements in difficult circumstances.)

And yet, the long term trend is so much easier to play than the short. Look at the trend in this gold bull market. Surely this trend has been our friend. All commodity markets, by the way, are not like this. Each has its own peculiarities, which must be learned by experience. But gold is a good chart commodity. It is produced all over the world, and it is purchased all over the world. Many people, each day, are buying it and selling it. That, of course, is what technical patterns are intended to comprehend, how the average person thinks and what he will do.

The average person, as I have noted, commits the fallacy of the fair price. He believes the teaching of Thomas Aquinas that there is a fair price for every good and that a good ought to sell for its fair price. He does not understand the teaching of Adam Smith that any price agreed upon between buyer and seller is fair, and therefore the crucial determinant of price is supply and demand.

Let us say that our average fellow makes the mistake of selling gold on Feb. 5, at $1,050. “Oh, did that hurt.” He wishes he had not made that move. Well, the answer seems simple enough. If you regret selling, then go in and buy it back. “Oh, no, I couldn’t do that.”

Why, having regretted his sale, can he not go back in and buy? This puts him long of gold again and corrects his mistake. But he cannot buy here at $1,220 because the fair price for gold is $1,050, and he would be overpaying by $170 (he thinks). In short, because Thomas Aquinas did not tell him how to calculate the fair price, he confuses the fair price with the price that is in his mind. It could be the price he is used to because the good has been trading there for a long time. It could be a high or low point on a chart that stands out and comes to people’s attention. It could be a price with a great deal of volume. And, very frequently, it is the price at which he sold (or bought).

Therefore, if the price of gold did get back down to $1,050, our average fellow would rush to buy it because it was now back down to its fair price. And since $1,050 stands out on the charts, many other people would rush to buy at the same time. This buying is called support, and $1,050 is a support level. The corresponding level at which many people will come in to sell is called resistance.

Once we understand the support and resistance levels, by inference we can figure out the larger trend. In the chart above, gold continues to go to new highs, breaking resistance to do so. Every time resistance is broken the bullish trend is reconfirmed. Look at how many times this has happened over the past 10 years.

The old timers noted this phenomenon many years ago. Most market trends are caused by large-scale forces too big for most traders to comprehend. They wind up assuming that current prices are near the fair price, and they are reluctant to pay more. This reluctance slows down the bull trend, but the fundamental, large scale force keeps tilting the balance to the upside. In effect, the idea of a fair price keeps the market undervalued for a long, long time. The old timers expressed this by saying, “the trend is your friend,” and this is as true today as it was in the early 20th century.

Eventually every trend does reverse. But it continues much more often than it reverses. Gold has continued to new highs 8 times since 2001. It has not reversed to a relative low once. In case after case, in good after good we see these giant bull (or sometimes bear) markets that continue for year after year. As we look back from the vantage point of the future and think back to what we were saying at the beginning of the trend, we are amazed. “I was so certain that gold could never get above $70 in 1974.” “I laughed at Robert Prechter for predicting DJI 3500 in 1982.” “I was absolutely certain that T-bill rates could never get to zero.” But in all of these cases, the trend progressed far beyond almost anyone’s ability to predict. All you could say was, “The trend is my friend.” And this kept you long as the market went up and up.

It is undoubtedly the same with the current bull market in gold. This trend will probably go on much longer than anyone now thinks. Indeed, the best prediction of the grand cycle bull move in gold of the 1970s was made by Jim Dines. When asked, early in the decade, how high gold would go, Dines replied that he did not know how high gold would go or how far stocks would fall, but the two numbers would cross. At the time he made that statement, gold was only a little above $35/oz., and the DJI was close to 1,000. It seemed a fantastic prediction. But on Jan. 21, 1980, gold hit an interday high (on the Comex) of $875/oz., and the DJI closed at 872. That $875, by the way, represented a 25-fold multiple for gold in nominal terms and a 12½ multiple in real terms. Between 1966 and 1982, the DJI fell by about 75% in real terms.

It is, of course, tempting to make the same prediction for this grand cycle trend – that gold and the DJI will cross. I am too much of a scaredy cat to make that prediction here, and I think that I will follow the same policy I followed through the 1970s. Turn bullish as the trend broke to the upside and then follow the trend until it had a clear reversal (which turned out to be the giant one-day reversal of Jan. 21, 1980). At that time, the trend was my friend. Today the trend is still my friend. And the trend can be your friend also.

As the trend in gold was nearing its end, circa 1978-79, the speculative end of the precious metals group (silver, the exploration stocks) came to life and made tremendous gains. I look for that to happen as the present bull trend in gold nears its end. That will be a warning sign. Before it happens, we are safe on the bull side. After it begins, we still have a little time.

Now there are a few people who espouse fundamentals and do not look at the trend. These people are called brokers. They make their money on commissions, not profits. For this they need a lot of customers, and so they follow the policy of telling the average person what he wants to hear and what is useful to them (the paper money theories of Foster and Catchings and Keynes and the fair price theory of Thomas Aquinas). Brokers are friendly, but I do not advise listening to them if you want to make money because they are not even trying to discover economic truth. Furthermore the fundamentals being taught in academia and published in newspapers and magazines are a collection of trash. (Keynes was a deliberate fraud and did not believe Keynesian economics.) To make sense of the markets with this false information is almost impossible.

Key Indicators of a New Depression

2010-06-07T02:15:00.002-06:00

Neeraj Chaudhary
Euro Pacific Capital, Inc.

With the mainstream media focusing on the country's leveling unemployment rate, improving retail sales, and nascent housing recovery, one might think that the US government has successfully navigated the economy through recession and growth has returned. But I will argue that a look under the proverbial hood reveals a very different picture. I believe the data shows that the US economy is badly damaged, and a modern-day depression has begun. In fact, just as World War I was originally called The Great War (and was retroactively renamed after World War II), Peter Schiff has said that one day the world will refer to the 1929-41 era as Great Depression I, and the current period as Great Depression II.

For starters, look at unemployment. During Great Depression I, unemployment broke 25%. If government statistics are taken at face value, the current unemployment rate is 9.9%, but a closer look reveals that the broadest measure of unemployment is currently at 20% - and rising. So, today's numbers are in the same ballpark as the '30s even though the federal government is using unprecedented measures to keep the economy afloat. Remember, in Great Depression I, FDR never ran a deficit nearly as large as President Obama's. Moreover, the Federal Reserve of the 1930s still had a gold standard with which to contend, while today's Fed has increased the monetary base with impunity. Yet even with all that intervention, unemployment figures still indicate that we have entered depression territory.

What is demoralizing to an unemployed person is not simply being let go, it is being unable to find a new job for an extended period of time. And this is where Great Depression II really rears its ugly head. According to the US federal government's own data, the median duration of unemployment is now over five months - and rising. This is the highest it's been since the BLS started compiling this statistic in 1965. As workers start to go this long without jobs, they eat into their savings. Eventually - and especially in a country with a savings rate as low as ours and debt as high as ours - they run out of cushion and hit the street. Formerly middle-class people have to make decisions never thought possible: do I eat in a shelter or go hungry in my home?

It's no surprise, then, that about 40 million people - or one out of every eight Americans - are receiving food stamps in Great Depression II. During the height of Great Depression I, the rate was just one out of thirty-five Americans. Even with the stimulus programs, Great Depression II is actually worse on this measure than Great Depression I - and the USDA estimates that the program could grow by another 50%. Soon, out of ten people you know, one may depend on federal assistance for daily survival.

Despite tax credits that have created a rush of purchases this spring, housing is in just as bad shape. During Great Depression I, home prices dropped some 15% from their pre-depression peak (achieved in 1925). In Great Depression II, housing is down at least 30% from the pre-depression peak (achieved in 2005), with some markets down more than 50%.

So, many of the people expected to keep making mortgage payments as they eat tuna fish to stay alive will be paying double their home's resale value. This is a tremendous incentive to walk away, with disastrous consequences for the country's social fabric in these trying times. Empty homes breed crime and vandalism, encouraging more to flee in a negative feedback loop. Moreover, the many 'walkaways' may create a class of Americans with ruined credit - right when many employers have started checking credit scores before hiring.

Even more worrisome, the present drop in home prices is against a backdrop of price inflation. In Great Depression I, our grandparents may have lost value in their home, but everyday goods (milk, diapers, automobiles, etc.) got cheaper at the same time. That made their savings 'cushion' deeper when they needed it most. Today, as home equity (now our main store of savings) declines, prices for consumer goods are rising. It's a tight squeeze indeed.

From jobs to food to the roofs over our heads, the current period of economic turmoil is at least as bad as the First Great Depression, whether or not the financial media wishes to acknowledge it. The main difference is that unlike in the '30s, the US dollar is now the world's fiat reserve currency, so we are able to push our problems overseas for awhile. The plight of the rural Chinese is really our plight - we are living lavishly on the wealth they create. Were they to quit this dastardly arrangement, the full effects of Great Depression II would be felt in America.

By contrast, in Great Depression I, the US was on the gold standard like everyone else, which forced us to live within our means. This, in turn, made it easier to recognize that the economy was in decline and changes had to be made.

Unfortunately, because of the responses of the Administration and the Federal Reserve, which I believe to be deeply misguided, I remain concerned that Great Depression II could develop into something far more devastating than its predecessor, something that other countries in the world have experienced but was thought impossible in the United States: a hyperinflationary depression. As bad as the current downturn has been, inflation would make it immeasurably worse. It would require an honest accounting of the problems we face today to avert the disaster we see coming tomorrow.

10 years worth of bank failures in 4 months

2010-05-02T08:18:00.007-06:00

This is real, it is bad and it is getting worse.

So far in 2010 the FDIC has announced the closure of 64 banks, with seven more being stacked on the pile on April 30.
Last year at this time the toll was 32, which in itself was a disturbing number. How disturbing? Banks don't usually fail en masse, and when the economy was enjoying better days it took 5 years to rack up 32 bank failures, from the end of 2003 to the end of 2008.

The acceleration of failures, and the swelling burden on the US taxpayer to bail out the depositors, ought to be disturbing the general populace. One would think that evidence of real hardship that affects everybody in the USA, relentlessly creeping like an oil slick in the Gulf of Mexico, would make it onto the nightly news or a large-circulation daily front page or two. Nope.

At least the LA Times covered it in the business section with the almost-comical closing comment that "depositors' money is not at risk, with the FDIC backed by the government." Hello? This opinion might reassure a failed bank's depositor but surely it should trouble a taxpayer. Billions of dollars are being lost.

There are still two possible outcomes at the macro-economic level. Debt which is not repaid is deflationary. But if the government response to widespread failure of debt is to increase its money supply, debasing its currency, this is inflationary.

The markets are saying "Inflation". The price of gold has set new records, the stock market is maintaining its Zimbabwe-like levels and the public mood in North America is nothing at all like it is in, say, Greece. For now.

Gotterdamerrung, small scale

2010-04-28T05:56:00.001-06:00

Ya Think?

2010-04-22T18:47:00.002-06:00

Isn't this where milk comes from?

2010-04-20T20:23:00.002-06:00

Thanks Simon!

A Wunch

2010-04-19T20:21:00.002-06:00

English has these unusual group names:

A pride of lions
A gaggle of geese
A covey of partridges

What do you call a group of bankers, especially if you are from either Britain or Australia? Why, a "wunch of bankers," naturally...

*

Congress shoots self in foot, lacks medical coverage for wound

2010-04-13T20:21:00.003-06:00

According to the New York Times, it appears that members of Congress and their staff are suddenly without medical insurance, directly as a result of the Health Care bill that was rushed through in March.

"The law apparently bars members of Congress from the federal employees health program, on the assumption that lawmakers should join many of their constituents in getting coverage through new state-based markets known as insurance exchanges."

But the research service found that this provision was written in an imprecise, confusing way, so it is not clear when it takes effect. Tradition says that the bill took effect when President Obama signed it three weeks ago, while new insurance does not have to be available until 2014.

No beer other than at lunch? Down tools, lads!

2010-04-11T18:08:00.004-06:00

According to the Daily Mail, Carlsberg Breweries staff in Copenhagen have walked off the job because management has taken away privileges which included the right of delivery drivers to drink three beers a day outside lunch hour.

Shipments of Carlsberg have been suspended, and the Confederation of Danish Industry has agreed to look into the dispute, along with Trade Union 3F.

Wikipedia reports the following about allowable Blood Alcohol Concentration (BAC) in Denmark:
0.05%, imprisonment if over 0.08%, zero if involved in an accident

The biggest obstacle is wishful thinking

2010-04-09T18:07:00.004-06:00

I always enjoy the research, opinions and insights of Maxed Out Mama.

She appears to have a background in banking at a level that requires facility with facts, trends, details and analysis. In today's (April 9 2010) post she guides us through an assessment of China's effect on oil prices, Walmart's sales trends, and the likelihood that whatever is happening in Greece will repeat on a grander scale in (much much bigger) Italy within two years.

Then she sums up her concerns like this:

The US has a hard economic - and thus social and political - adaptation ahead of us, and almost all the interests that should have been trying to plan for it have instead been trying to fool people into thinking that we don't.

This, I think, is my deepest concern with Western Civilization. We expect our leaders to tell the truth, our journalists to seek the truth, and our advisors to create strategies for us based on truth. Instead we get global warming alarmism and blandishments as to the state of the economy, to name just two of our current pathologies.

The green movement requires little of its adherents, but it expects the targets of its hostility to remain in business locally paying taxes and attempting appeasement. It slides away from any attempts to connect it with consequences such as malaria deaths from the banning of DDT.

The financial system runs on faith. The whole fractional-reserve banking system requires people to not show up en masse asking for the cash that they left at the bank. Ever.

On this blog I have attempted to point out simple facts, such as the relentless debasement of our currency. One would think that our economic advisors would have information like this to inform their strategies for managing our wealth.

I support Maxed Out Mama's viewpoint. There are destructive trends afoot, and we are not made healthier by our ignorance of them.

Protect yourself, by living within your means, by hedging against financial losses caused by either inflation or deflation, by recognizing that our health care system will increasingly fall short of our collective needs and figuring out how to improve your personal odds, by arming yourself with facts against alarmists of all sorts (even me!), and by figuring out how to be of greater service, however you fit into the world.

Chances are that the average westerner has seen the peak of civilization as we know it. From here, debts become due, unsustainable systems fail, and reality intrudes.

God, I hope I am wrong. Dear reader, tell me that I am, and why.

Government of its employees, by its employees, for its employees

2010-04-07T06:21:00.003-06:00

It seems to me that Maggie Thatcher's comment that 'the trouble with socialism is that sooner or later you run out of other people's money' is coming true before our eyes.

Arnold Schwartzenegger's economic advisor David Crane writes in the LA Times "Today's unfunded liability is next year's budget cut to important programs."

California sits on a $500 billion pension liability with huge political consequences and, beyond those, fundamental challenges to the viability of the state of California. The mess is worse because California has done what we could imagine every government is doing, hiding the truth of its financial situation so as not to have to take the unpopular steps of actually dealing with it.

Don't think this is just California's problem. From sovereign countries (Iceland, Greece) to average little counties (eg Jefferson in Alabama) and municipalities the schemes of easy money and complex financing are unraveling.

Whether the pipers that lent the money are actually paid or not is an interesting new theme. Iceland won't pay what it owes, China has declared many of its debts inoperative because of the unregulated derivatives behind them and Greece is mulling over its options. So the all-powerful Goldman Sachs of the world are suddenly dependent on government money, the printing of which makes everyone poorer so that GS can be made whole.

When your local firehall closes, and your child's teacher loses her job, and your father-in-law's pension check stops coming, and your income tax refund does not reach you, you may feel a bit grumpy watching your tax money go to bailing out a well-connected financial institution that pays billions in bonuses to the managers that sold all this unmanageable debt in the first place.

This is the reality of US politics: the system is not sustainable and the powers behind it are trying to keep themselves whole financially with other people's money. Depriving individuals of their entitlements creates front page stories of misery with a very short individual half-life but with daily examples. In the back pages and the business sections there are vague allusions to keeping the banking system afloat because it is the lifeblood of the day to day economy, and "too big to fail" has implications for whether there will be food on the grocery store shelves in your neighborhood next week.

What a mess. I still think that restoring the system to some form of balance will bring discomfort and misery on the scale of the 1930s.

Live within your means, and expect to be taxed beyond them.

Good Friday 2010

2010-04-02T12:06:00.003-06:00

Somehow, one instance of this routine public act of Roman torture led to events that changed the world.

Argue theology all you want (preferably not here, but go ahead if you must...) History, Architecture and Music remind us that others have been profoundly moved, for reasons that even cynics like me can not explain.

Global Warming: New Records Set by Copenhagen

2010-04-02T09:55:00.003-06:00

Deutsche Bank reports that the Copenhagen talks resulted in "the highest number of new government initiatives ever recorded . . . in a four-month period", according to the LA Times.

The Times article went on to say that this gives the planet a fighting chance to keep predicted warming under 2 Celsius degrees.

In news which refers to actual cold temperatures as opposed to predicted warm temperatures, parts of Britain have been battered by a deadly late winter storm.

Clearly these new government initiatives are working already.

US Bank Closings Continue Record Pace

2010-03-30T06:10:00.003-06:00

So far in 2010, the FDIC reports that 41 US banks have closed, vs 21 banks in the same period last year. Wow, twice the rate of failure...remind me please of the meaning of "green shoots."

The Federal Deposit Insurance Corporation has already burned through the funds that it collects through a levy on bank deposits, so the US taxpayer is on the hook to give the depositors back their money.

The Federal Accounting Standards Board is responsible to ensure that the rules of accounting properly value the assets and liabilities of businesses, including banks. Their institutionalized version of wishful thinking has led to a gross overstatement of the value of bank loans, delaying the inevitable and adding to the final reckoning. How gross? 59% was the average across the four most recent failures, according to this source.

In the US, when your unemployment benefits run out, you are no longer officially unemployed. The real level of unemployment is 22% not 10%, according to Shadowstats. The stock market may be at cheerful levels, buoyed by government money and CNBC spin, but the real economy is not.

Why is the stock market at cheerful levels? Well, the Zimbabwe market managed some pretty impressive numbers too. Here is the chart from 2007, when it was the best performing stock market in the world. No one got rich in real terms, but the numbers look impressive...

If it can't go on forever, it won't go on forever.

What if it was all just a big bubble?

2010-03-29T19:16:00.008-06:00

Not the bear market rally of the past 12 months.

Not the post tech-stock recovery of 2000-2008.

I'm talking about the whole of your investing life, the last 30-40 years of asset price inflation that started with Great Society spending in the 1960s, augmented by the baby boomer effect on consumption, the effect of technologies like cars and mass production and telecommunications, all strapped to a booster rocket of Nixon abandoning the gold standard in 1971.

When, in your life, has your government sustained a surplus? When has your currency increased in purchasing power? These provocative questions were prompted by this provocative article is from a provocative blog by Tim Iacono called The Mess that Greenspan Made. Check it out.

What is considered an average return in the stock market took a jump up after money was decoupled from gold. Few people factor in the effect of inflation on stock indices. Look at the chart above, and eyeball an average for the period from 1880 to 1970. Then do the same from 1970 to now.

Real returns probably should be calculated in terms of something timeless, for example the Dow/Gold ratio. The Dow Jones Industrial Average has its weaknesses, but it is easily recognizable. Right now it takes about 10 ounces of gold to buy one unit of the DJIA.
The chart shows the craziness of the gold mania in the late 1970s, and the equal but opposite craziness of the tech bubble in 2000. Those who disparage gold point to its poor performance from its 1979 peak through the subsequent two decades. Those who admire gold simply pick a different time period.

The message of Tim Iacono's article is that the housing bubble and accompanying credit bubble that goosed the financial system from 2000 to 2008 was just the most recent example. Who knows...maybe gold is the next bubble, just as it was in the late 1970s. You will know a bubble is happening when TV shows feature ordinary people buying gold or taking Grandma's old jewelry and flipping it for a huge profit, like the home reno shows that were everywhere three years ago.

Until then, it is probably safe to buy some gold or silver and put it away. When the TV shows start, take a bit of a profit by selling it to the latecomers.

Turning a buck into 5 cents in 97 short years

2010-03-10T20:40:00.004-07:00

Courtesy Federal Reserve Bank of St. Louis

Welcome repeat visitors

2010-03-08T18:49:00.002-07:00

Hello Omaha! Greetings Melbourne! Thanks for stopping by. If there is something that you would like more of, or less of, just leave a comment.

Cheers

Farewell to the Era of Panic

2010-03-06T08:20:00.004-07:00

Australian newspaper columnist Andrew Bolt is, I think, the Antipodean equivalent of Rex Murphy.

In a recent column "Farewell to the Era of Panic" he uses the tsunami warnings that arose from the earthquake in Chile to remind us that "Once again the experts and the politicians had ramped up the booga-booga" but this time people rebelled against the panic-mongering, reclaimed their senses, and actually came to the beach to watch what turned out to be a non-event rather than obediently fleeing for the hills.

His column continues:

We're on to them now, you see, these backside-coverers who'd rather be blamed for predicting an all-shrieking Armageddon than for being no-worries relaxed among a crowd of look-at-me urgers.
We're on to the kind of people who last July "leaked" a warning from Victoria's Department of Sustainability and Environment, claiming that the fire season now just ended would probably be worse than last year's Black Saturday one, and had the "greatest potential loss to life and property"?

Yeah, right. Not one big fire came. Not one person died. Plenty freaked, though.

And last week, very quietly, came yet another muffled admission of a terror that had been similarly oversold.

The good news, federal Health Minister Nicola Roxon brightly announced, was that this nice Government was donating 10 per cent of our swine flu vaccines to Laos and other poor neighbours.

The even better news, which Roxon somehow failed to add, was that we could give away so many vaccines because very few people actually caught the swine flu that one of her own advisers, Prof Raina MacIntyre, last year swore could kill between 10,000 and 20,000 of us.

I'm sure you remember that mega-fear campaign - one of the Big Three that made 2009 so infamous in the already sordid history of the Age of Panic.

Swine flu was hyped as a virus so deadly that cruise ships had to be quarantined, schools closed and families with the sniffles locked in their homes.

"All of humanity is under threat," screamed the World Health Organisation, another United Nations bureaucracy (like the Intergovernmental Panel on Climate Change) that feeds on fear.

Britain's National Institute of Medical Research helpfully put the likely death toll at up to 120 million.

The reality? Swine flu turned out to be one of the mildest forms of flu yet seen. We didn't have 20,000 Australians die, but just 191, most of them people already desperately ill with other serious ailments.

To put that in context, about 3000 Australians die each year with normal flu.

Worldwide, it was the same shamefaced story - not 120 million deaths, but 16,226, according to WHO's own figures.

That's less than half the people who die in a normal flu season in the United States alone.

And what of that global financial crisis that last year was going to wipe out the few of us lucky enough to survive swine flu?

What Prime Minister Kevin Rudd gleefully warned was "the worst financial crisis in our lifetime" turned out to be one of our mildest. In fact, "probably our smallest", as Reserve Bank Governor Glenn Stevens conceded last week.

Which means that what will hurt us most is not the financial crisis, but the insane spending Rudd unleashed to stop it, leaving us not just with electrified ceilings, mountains of useless insulation, overpriced school halls and blown-already cash handouts, but now a deep sink of debt as well.

But let's not forget the third leg of last year's great trifecta of panics: the global warming that was going to dry out the dams of Sydney, Melbourne and Adelaide, turn the Great Barrier Reef white and drown half of Bangladesh.

Instead, as rain returns, the globe refuses to keep warming, the Arctic ice rebuilds, great snows bury North America and Tuvalu refuses to sink into the sea, the only thing rising now is the public's scepticism.

Yes, we're finally coming to our senses. We're finally seeing through the spivs who grow rich and mighty by playing on our fears. We're calling time on this Age of Panic.

Well said, Mr. Bolt. In these times of Single-Issue Fanatics, Sound Bites and Political Correctness, it has been difficult to be a dissenting voice against the hurricane of fear-mongering. But sooner or later the average man in the street will tire of hearing cries of "Wolf! Wolf!" and do exactly the opposite of what his betters are suggesting for him. In Australia, perhaps it is already happening.

Los Angeles on the Financial Brink

2010-02-27T12:26:00.005-07:00

Grim news from Los Angeles: The Chief Administrative Officer's report begins with

"The city is facing a budget crisis unlike any it has ever experienced … The enormity of our current fiscal crisis forces the City to take swift action now and lay out a financial plan for the future."

Government-as-normal has become impossible to run in LA. Double-digit declines in revenues, untouchable commitments to pensions and policing, 11% unemployment with the attendant municipal services required to carry people through, all these and more combine to provide a premonition of troubles to come in cities that were just trying to keep people happy and well-served even if it meant spending a bit extra to do it.

You probably don't want to own any municipal bonds for US cities. More fundamentally, you may want to think twice about what it will be like to live in one in a few years.

Taxpayers are now in the mortgage business

2010-02-27T06:55:00.004-07:00

...because a private sector lender can only lose money when rates are 5%. Read Maxed-Out Mama's analysis (scroll down to Feb 24):

So this explains why almost all mortgage origination is going through federal programs.... To write prime mortgages I want 5.9-6%, and I really want it NOW, and no, I'm not swimming in these waters. Also, they have to be prime. I want 10% down, I want it in cash from the borrower, I want a housing inspection and MY appraisal, I want very good credit aside from exigencies, I want employment stability, I want housing stability, I want the borrower to have savings on hand for two months mortgage payments after closing, I want a record of the borrower saving, I want owner occupied, I want total mortgage payments 38% or under, and not out of range with comparable rents, I want mortgage insurance to 80% - in short, I don't want to write any mortgages in this market. I do not approve of screwing borrowers, and why should such a borrower pay me 6% for money when he can get it for 5% on the GSE market? The only ethical thing to do is pack my borrowers a lunch and send them down the road to inflict the losses on the taxpayers. As a taxpayer, I have mixed feelings about that....

The US economy is all just propped up on an eroding foundation of tax revenues. Folks, this can not end well.

Rolling Stone Magazine on Goldman Sachs

2010-02-20T07:32:00.006-07:00

Matt Taibbi writes a colorful and searing account of how Goldman Sachs fleeces its clients and the American taxpayer in the midst of the financial meltdown.

Taibbi likens the period since the crisis began to the Newman/Redford movie The Sting and describes various classic con artist schemes

the Swoop and Squat, where GS gets cash from the beleaguered party that it has lent money to and thereby forces it into a liquidity crisis, and stays whole when that party goes under.
the Dollar Store Scam, where GS dresses up like a conservative commercial bank and is instantly eligible for free money from the Fed which it can then lend back to the government at T bill interest. Borrow for free, lend risk free for interest, all paid for by taxpayers.
the Pig in the Poke, where the crap investments in mortgages get upgraded to investment-grade by virtue of taxpayer backing and some convenient rule-changes by regulators.
the Rumanian Box, where GS is given "billions if not trillions" in loan guarantees, cash and artificial upgrades of its investment ratings, then hangs on to the cash, motivating the federal government to throw even more money at GS in an effort to get them to put the money into circulation through loans. GS hangs on to it all, and pays bonuses because it is making so much and risking/losing nothing.
the Big Mitt, where all the big players are consulted on how to stay whole despite holding the most toxic and worthless loans, at taxpayer expense, and without the taxpayer being aware of the price he will have to pay or the timing of the big new favors being granted. Knowing they would be made whole, the big players bought MORE of the toxic crap, at pennies on the dollar.
the Wire, where (as in The Sting) GS uses its position and the information that comes across its desk in the normal course of business to make bets in the direction that it knows the market will move based on what its largest customers are doing. Push up the price of the oil futures that your big customer will buy, by buying first and selling to him at the higher price. 76% of GS revenue comes from trading; GS uses a flash trading system to act in the market fractions of a second faster than big trades that it knows are coming.
the Reload, where the con gets his victim a second time by telling him he can recoup what was lost in the previous scam. Governments attempting to reinflate a bubble that should never have been encouraged in the first place, and Wall Street acting in its own interests rather than the interests of Main Street, set the stage for the Reload last fall.

Let's end this summary with a quote from Taibbi's article:

Instead of liquidating and prosecuting the insolvent institutions that took us all down with them in a giant Ponzi scheme, we have showered them with money and guarantees and all sorts of other enabling gestures. And what should really freak everyone out is the fact that Wall Street immediately started skimming off its own rescue money.

Thought for the day

2010-02-13T12:12:00.000-07:00

Envy is the consuming desire to have everyone else as unsuccessful as you are.

Frederick Buechner

Upstart political party recommends scrapping Carbon Capture

2010-02-13T07:14:00.006-07:00

The Province of Alberta is blessed with natural resources and (by Canadian standards) a relatively free-market attitude towards politics and economics.

In part due to the successful efforts of activist organizations to label Alberta's oil sands as "Dirty Oil" because its development footprint is insufficiently photogenic, the politicians of this province have already implemented carbon taxes and carbon capture & storage (CCS) initiatives in an attempt to create some green credentials for the province. When goofy US jurisdictions move to bar imports of crude derived from the oil sands, Alberta can say "Why? We are already taxing the emissions and are planning to capture and sequester the carbon dioxide. What are YOU doing?"

(As an aside, if anyone tries to tell me the Oil Sands represent Dirty Oil I respond "You are mistaken, it is actually Oily Dirt.")

In the provincial budget that was presented on Feb 9, the Conservative government included $100 million for this year's component of the CCS program, (down from $300 million previously planned) along with some redirection of money so that the burgeoning health care deficits could be covered. The plan remains to spend more than we make.

A new political party on the provincial scene named the Wildrose Alliance has gone public with a critique of the budget that includes scrapping the CCS initiatives altogether.

My half-wise prediction is that in 2010, around the world, when politicians have to make choices about where to slosh politically-tuned subsidies, they will be paralyzed in the area of Carbon Capture, Bio Fuels, Alternative Energy and Climate Change activities. Do they go with what was increasingly popular through the first decade of this century, the green path? Or do they acknowledge that the tide seems to be turning in favor of the skeptics and pragmatists?

Economic reality will prevail in the long run, but it is not hard to imagine some well-meaning politician figuring he can kill two birds with one stone by making CCS a centerpiece of stimulus spending, kind of a 21st Century Hoover Dam project. You could argue from ideology as to whether Hoover Dam was a make-work project or not, but the twin realities of its hydro power and Lake Mead's water management benefits are inarguable. CCS on the other hand involves a lot of real work to achieve climate benefits that are literally not measurable, if indeed they exist at all.

The rock to one side of politicians is that their economies are broke. Alberta is less broke than most jurisdictions, but its spending plans are not sustainable unless oil revenues continue to grow. The hard place on the other side of politicians is the need to get elected. In the past the most reliable way to get elected has been to promise expensive new benefits to enough voters to win the support of the media and a plurality of ballots, while being vague about where the money will come from.

If we are witnessing the rebirth of reality-based consumer attitudes, voters are beginning to see how stupid it is to be spending money we don't have on programs that create no value.

In this scenario CCS will come under increasing taxpayer scrutiny. Personally I think that unless CO2 is being used for tertiary oil recovery, there is no value in capturing, compressing, moving and injecting it. You? Your mileage may vary depending on your ideology.

If you were a politician, which side of this issue would you come down on? Spend money you don't have? Or risk being tarred with the brush of AGW alarmist criticism?

Which one will get you elected? Which one is actually wise?

Alert Levels Around the Globe

2010-02-12T16:55:00.005-07:00

The English are feeling the pinch in relation to recent terrorist threats and have raised their security level from "Miffed" to "Peeved." Soon, though, security levels may be raised yet again to "Irritated" or even "A Bit Cross." The English have not been "A Bit Cross" since the blitz in 1940 when tea supplies all but ran out. Terrorists have been re-categorized from "Tiresome" to a "Bloody Nuisance." The last time the British issued a "Bloody Nuisance" warning level was during the great fire of 1666.
The Scots raised their threat level from "Pissed Off" to "Let's get the Bastards." They don't have any other levels. This is the reason they have been used on the frontline in the British army for the last 300 years.
The French government announced yesterday that it has raised its terror alert level from "Run" to "Hide." The only two higher levels in France are "Collaborate" and "Surrender." The rise was precipitated by a recent fire that destroyed France 's white flag factory, effectively paralysing the country's military capability.
It's not only the French who are on a heightened level of alert. Italy has increased the alert level from "Shout loudly and excitedly" to "Elaborate Military Posturing." One more level remains: "Ineffective Combat Operations."

The Germans also increased their alert state from "Disdainful Arrogance" to "Dress in Uniform and Sing Marching Songs." They also have one higher level: "Invade a Neighbour."
Belgians, on the other hand, are all on holiday as usual, and the only threat they are worried about is NATO pulling out of Brussels.

The Spanish are all excited to see their new submarines ready to deploy. These beautifully designed subs have glass bottoms so the new Spanish navy can get a really good look at the old Spanish navy.

Americans meanwhile are carrying out pre-emptive strikes on all of their allies, just in case.

New Zealand has also raised its security levels – from "baaa" to "BAAAA!" Due to continuing defence cutbacks (the air force being a squadron of spotty teenagers flying paper aeroplanes and the navy some toy boats in the prime minister's bath), New Zealand only has one more level of escalation, which is "I hope Australia will come and rescue us."

Australia, meanwhile, has raised its security level from "No worries" to "She'll be right, mate." Two more escalation levels remain, "Crikey! I think we'll need to cancel the barbie this weekend" and "The barbie is cancelled." So far no situation has ever warranted use of the final escalation level.
Canadians are deeply concerned, but would never say so, lest we offend those who were already planning to blow us up.
[Casey Research!]

A couple of takes on the 72 virgins concept

2010-02-01T19:57:00.004-07:00

Here is a photo, and (unrelated) a possible interpretation of the idea that a terrorist operating on behalf of the religion of peace gets 72 virgins for his troubles.

What if an imam told the would-be terrorist that there was good news and bad news regarding the 72 virgins?

The good news is, yes they are there as promised, perfumed, veiled, ready and waiting for you. The bad news is that after you have finished with the first virgin, The Big Guy transforms you, and there you are, perfumed, veiled, ready and waiting for the next blowed-up-good terrorist to arrive. 72 dead terrorists later, you and The Big Guy can call it square.

There's always someone who will ruin a photo

2010-01-30T11:11:00.001-07:00

Oh ohh...

2010-01-26T18:45:00.003-07:00

The reason people blame things on the previous generations is that there's only one other choice. -Doug Larson

Useful ambiguities (updated for 2010!)

2010-01-24T12:45:00.004-07:00

Ever get a call from someone checking references on an employee who you secretly wish would move on? Can't tell a lie? Want to avoid going to court? Here's what to say:

We can't say enough good things about him
Her performance is at the next level
His contribution in meetings is critical
You can't criticize what she does
When he's in charge, things seem to fall together
You'd be very fortunate to get him to work for you
You should waste no time interviewing her
We found his salary expectations more than fair
You can't underestimate his performance
When it's left up to him he stops at nothing
She fills a gap for us
He has certainly earned his reputation
You can't question his results or his methods
We think he holds up his entire department
Her credentials are very qualified

Curtis and Scotfree added these gems:

You can't believe the praise he gets
We can't imagine replacing her

Then Doogie said...

Everybody in our organization uses him as an example of our expectations in a work ethic.

Brendan said

Former clients are clamoring for him

The Ripper said

He never ceases to stamp out inferior work

Annie said

His quality astounds us

Victor adds

Whenever there's trouble, she's right there

PKD adds

He has had a massive impact on our project

JR adds

No one would be better in his job than him

Got a few of your own? Post them as a comment.

Thought for the day

2010-01-24T08:19:00.002-07:00

Real happiness is cheap enough, yet how dearly we pay for its counterfeit. -- Hosea Ballou

See anything worrisome with these trends?

2010-01-23T12:22:00.008-07:00

US Government, on its way to bankruptcy

Daily Planet Climate Change Silliness

2010-01-23T08:43:00.003-07:00

When Discovery Channel makes the video available I will post it, but I have to comment on what I saw last night.

In a segment (starting at 4:50 of the clip after the ad) we learn how a southern variety of flying squirrel is extending its territory northward towards where a northern variety lives, an earnest researcher explains how "climate change" has led to warmer winters that enable this expansion. Then we see the research team trapping the southerners to implant a tracking chip. Finally we hear that the colony of flying squirrels has to huddle together in their nest because if even one leaves, the rest could freeze to death.

So global warming puts flying squirrels who are leaving their regular territory at greater risk of freezing to death. Makes sense to somebody, I am sure.

Blackberry Texas Hold'em Poker Tips

2010-01-16T12:11:00.010-07:00

The world does not need more solitaire games for our computers and handhelds. Nonetheless, they exist. If you liked this blog's tips for Spider or Brickbreaker, you might like my tips for Blackberry Texas Hold'em Poker.

First, I am not a poker player, but somehow I have managed to accumulate over $8 million on my Blackberry, playing Hold'em, in the past three months. That qualifies me to teach you nothing reliable about playing real poker, but perhaps something useful about playing on your 'Berry.

I win about 40% of the time that I buy in to a game, and since the payout is about 10-15 times the buyin, the money adds up.

If you play poker for real, you will probably laugh at these tips. Hey, it's a computer game...real people would learn from your habits, but the opponents in the game do not. So you can figure out what beats them, and keep doing it.

Here are some tips, in fairly random order, some dazzlingly obvious.

Call most hands, if no one before you has raised. Think of it as an ante.
Be nimble and ready to fold if the betting gets crazy and you have a weak hand.
Play any hand with a face card in it and a small pot.
Play any pair with a small or medium pot.
Play any suited connecting cards with a small pot.
Most opponents with small pairs bet them aggressively.
When you are head to head with the last opponent, raise every hand and they will usually fold. If they re-raise, be prepared to fold because they hardly ever bluff.
When you are the big stack, bet aggressively and others will fold.
If you do #8 and find yourself to no longer be the big stack, do not panic. You can be cautious and get back into the lead.
Opponents seem blind to the risk of losing to a flush draw. If you have a flush, build your bets through the flop, turn, and river, sizing your large bet on the river to wipe out at least one competitor.
Pay attention to everyone's cards when the hand is over, and look at what people are calling with and betting with.
Always expect face cards in your opponents' hands.
Have fun, have a life.
To enter a large bet, press the T key on your keyboard and the number pad will spring to life. Enter the dollar amount, then press the little pearl twice.
Learn something about your own temperament by thinking about what makes you lose at this game, if indeed you lose at this game. Stubborn? Impetuous? Not smart when drinking? Games can be rehearsals for real life...

Bad 2010 start for banks in the US

2010-01-16T09:43:00.004-07:00

The US Federal Deposit Insurance Company publishes the names of banks which are closing, because the FDIC insures the deposits in those banks.

Every Friday it updates a list of closed banks, dating back to 2000. From June 2004 to Feb 2007 not one bank failed. Three failed in 2007, 26 failed in 2008, and 140 failed in 2009. Over 550 banks are now on the FDIC "problem list", meaning they are at risk.

It is a small sample size, just two weeks of information, but already this year four failed banks have made it onto the FDIC list. That is twice the rate of 2009. The US taxpayer is on the hook for FDIC's so-called insurance.

And because of a governance attitude that can best be described as "pretend and extend", troubled banks are in far worse shape (more liabilities, fewer good loans) than they would be if swift action had been taken. In other words, more taxpayer money will be required to fill the crater left by the bank failure.

The US economy is not, repeat NOT, sprouting green shoots.

Update Jan 24: 5 more.

Why spend a little when you can spend a lot?

2010-01-09T16:02:00.005-07:00

There is a lot of justifiable hand-wringing over labor productivity and international competitiveness. Economists, who rarely agree on anything, accept the wisdom in producing things where the overall cost is lowest, so that society's scarce resources can be best stewarded.

But wait! Everything that gets made, grown or dug out of the ground requires energy. Can an economy be competitive when others pay less for energy?

And within a jurisdiction, when consumers pay an increased percentage of their incomes for energy, then they have less money left over to consume other things.

Here is a fact: 70% of the US economy depends on consumers. More and more consumers in the US continue to lose their jobs (85,000 more in December alone). Consumers who are employed are working fewer hours. The US consumer is less able to support the economy than she was a year ago. And US industries are closing due to increasing power costs, putting more consumers out of work. This is a death spiral for an economy.

So check out the graphic above, courtesy of the Wall Street Journal, and judge the quality of the leadership that pushes an economy to spend a lot on energy, when the US could spend very little.

If you don't know where you're going...

2010-01-02T06:57:00.009-07:00

...you could end up someplace else. (Yogi Berra)

This time each year I try to set some time aside to recalibrate my sense of purpose and the goals that I imagine will get me there. I've been doing this for a quarter century or so, since before "Seven Habits of Highly Effective People".

I think that too much introspection is as bad as living a completely unexamined life, but with that said there are a few questions that benefit each of us to be able to answer. If I take time to consider them each year, the accumulated responses are pretty useful. If I were to do this every day instead of every year, well, someone ought to slap me upside the head lest I disappear up my own fundamental orifice.

So here are the magic Halfwise questions:

What am I good at?
What do I like to do?
What do others value?
What am I on the road to becoming?

The first three are where I think a person should build his or her vocation. If you like to do it, it won't feel like work. If others value it, they will reward you for doing it. And if you are good at it, your reward will be higher than if you were not.

The fourth is where a person should consider the trajectory of his or her life. It troubles people to be reminded that they are on a road to becoming someone, whether they consider it or not. My habits (good and bad); the people I associate with (likewise), the media and messages that I soak in every day, these all shape and pave the road that leads us to that "someplace else" in the opening quote.

If you are an e-mailing type of person, ask yourself and answer the four questions in an e-mail to yourself. Save that e-mail, reflect on it from time to time, do more of what it indicates you need more of, and then repeat the process next year by editing the e-mail based on what you have learned.

Because there are some really bad destinations on the road of life...

Pay others to take your job away

2009-12-26T13:32:00.003-07:00

Imagine a policy where politicians willingly, in the name of "controlling" "climate change" use your money to:
1) Subsidize a foreign takeover of a viable business in your country
2) Close that business down
3) Transfer the 1700 jobs associated with that business to a foreign country
4) Remove not one ounce of CO2 from the atmosphere in the process.

As a taxpayer, or better still, a now-unemployed taxpayer of that country, would you feel you were doing your part to save the planet? Based on what?

This is reality for the workers at Corus Steel's Redcar plant in Teesside, England. While the Redcar plant was efficient, the lure of up to £1.2 billion in carbon credits (paid for by you and me, dear taxpayer and consumer) was just too much for the Tata group and so Redcar is to be closed.

Presumably all levels of once-great Britain's government smiled in pride at the sacrifices made by the smoggies of Teesside. Well done, lads!

One can only shake one's head and wonder how the madness ends.

Carbon Market Musings

2009-12-25T10:06:00.009-07:00

Supply and demand. Fear and greed.

These two pairs of terms are all you need to know about what drives markets. Market fundamentals are based on supply and demand. Market emotion is based on fear and greed.

The market fundamentals of global warming (when it was still credible) were in the area of renewable / sustainable energy, and in carbon trading. Renewables have their own intrinsic economics, which can be distorted by government subsidies but which sooner or later have to pass a reality test. Carbon trading has no intrinsic economics, it is simply based on some fiat declaration of the price of carbon.

This fiat was one driver of the Kyoto Accord, embodied in its Clean Development Mechanism and Joint Implementation, which allow a developed country to buy indulgences from other countries.

As the sham science of global warming is gradually revealed, the political power to declare carbon prices diminishes, and emissions trading schemes lose their emotional support amongst the general public. Australia is the bellwether of this trend, and is now going through a phase of confusion and fingerpointing. More to come elsewhere, I promise.

The World Bank publishes an annual report on the state of Carbon Markets. The 2009 version makes for interesting reading. It notes that one purpose of the Copenhagen conference was to "scale up climate mitigation" in developing countries. In other words, buying more indulgences.

Who buys these indulgences? How much are they worth? Just as there is only one taxpayer (you), there is only one consumer (also you). How do you feel about $150 Billion per year? What would you like in return?

You pay, as part of a global shakedown, so that you can continue to have what you currently have. No CO2 emissions are cut, but money goes to some third world regime so that they can cut down an old forest and replant with something that grows faster. You pay. No value is added anywhere.

When the global warming panic really hit a few years ago, I watched as industry and governments wrestled with the science and the politics. I was surprised when the people that I thought would fight just hunkered down and went along. Now I realize how naive I really am, since I totally missed the opportunity to be part of a 9 figure per year carbon market. And look at the business opportunities to support it!

But we are about to find the supply of carbon offsets outracing the demand for them. And the fear mongering that created the market in the first place will be replaced by the fear of being the last fool left standing in the market when the music stops.

Blogger extraordinaire JR notes that the carbon market reacted poorly to Copenhagen. I am going to figure out a way to short GRN, the ETN that tracks carbon trading. Looking at the charts, we can see support being pulled out from under it, with lower highs, lower lows, a reverse head and shoulders and a P&F target of $17, well below its Dec 24 close of $23.50.

Supply and demand. Fear and greed.

Facts & Predictions re Copengeld

2009-12-18T21:05:00.002-07:00

As the Copenhagen summit (mercifully) stumbles to its conclusion we should be grateful that so far, little real money has been spent. Symbolic gestures should be made only with symbolic resources, not real ones. Nonetheless, there seems to be some political will to ship large amounts of money around the world for no real benefit. Here are some facts and predictions regarding how much of this political will translates into action:

Fact 1: Governments of developed countries around the world are increasingly strapped for cash. Prediction 1: The realities of demographics and the relentless growth of bureaucracy combine to grind government finances into finer powder. No extra money will be available.

Fact 2: A cold hungry populace is not as cooperative as a warm well-fed populace. Prediction 2: Look for some counter-vailing force to emerge fuelled by growing reaction to Climategate, UN malfeasance and greenie extremism. A mainstream media channel will both aid and profit immensely by this.

Fact 3: We are in the midst of ongoing debasement of currencies and a continuing developed-country currency crisis. Prediction 3: These will provide justifications for amending commitments to the Copenhagen wealth transfers, and if large sums do indeed get committed as a result of Copenhagen, eventually all foreign aid, even existing programs, will be re-labeled as Copengeld.

The statistics are warming!

2009-12-18T20:00:00.005-07:00

We are discovering evidence of man-made global warming in statistics everywhere lately. Not warming in the actual atmosphere, just man-made warming of the statistics.

Here is a plot of Siberian temperatures from The Migrant Mind. Just goes to show what happens when you cherrypick the starting dates for your warming trends.

Damn, the 1800s must have had a lot of CO2...

Copengeld

2009-12-18T06:38:00.003-07:00

Time to re-introduce an old word into our modern vocabulary and then propose a modern variant.

Danegeld

http://en.wikipedia.org/wiki/Danegeld
a tax raised to pay tribute to the Viking raiders to save a land from being ravaged

Since the raiders today are not Viking [they were just visiting Copenhagen at the time] I propose the word Copengeld. All the tribute money is dressed up with the pretense of being for Copin' with the effects of climate change.

Either way, it's just another shakedown.

Why do denialists and skeptics believe as they do?

2009-12-16T06:29:00.005-07:00

Why do AGW denialists and skeptics (and agnostics like me) believe as they do?

SquanderTwo has some highly relevant thoughts. Here are some excerpts:

...as a computer programmer, I agree with Feynman's philosophical position that you shouldn't use computer models as a source of new information and I also take the practical position that even the world's best software is buggy. I've not seen any evidence that climatologists' software is orders of magnitude less buggy than, say, Excel. Two weeks ago, I saw evidence that it's buggy as hell...

I object to the way that the science has been inseparably attached to authoritarian politics. Herman Van Rompuy said the other day that "2009 is also the first year of global governance," giving Copenhagen as an example of this. That's an unelected president of an unelected body asserting that he is going to exercise more power over me via policies that I will never be allowed to vote on. And I'm told that the only reason to object to this is because I hate the planet and want all our grandchildren to die...

The consensus thing. My objection to the constant use of the word "consensus" is not that the consensus itself is meaningless; obviously, it's relevant. My objection is the way that the consensus's existence is routinely presented as a scientific argument in its own right. It amounts to "You shouldn't be sceptical because none of us are, and that proves it." Yeah, go science.

"The only warming I see is from Thermometer Change"

2009-12-15T19:31:00.005-07:00

Do I ever admire those who have the quantitative chops, and the persistence, to dig through the data and draw conclusions from the results.

Blogger "Chiefio" has dug into the GHCN thermometer records to see just how credible the aggregated data could be.

His conclusion forms the title of this post.

When you average temperatures from available thermometers, and then plot them year to year, it is reasonable for a reader to assume that the population of thermometers is more or less the same year to year.

But clearly the chart shows that the gross numbers of measures are changing. What Chiefio demonstrates is that the location of thermometers is changing too, as is the nature of the thermometers themselves. In his words "For Canada, the thermometers have been leaving the Rockies and running to the shore where it is much warmer"

All the warming that we read about comes from GHCN thermometers, and the trends in temperature are easy to pick up when we use GHCN data. But who at GHCN stands up and says "use only the data from long-term stations with continuous records, well-managed surroundings and unmodified thermometers." Who in the professional climate science community stands up and says that the averages are misleading, and cools the rhetoric?

Not the guys who have been garnering all the headlines. Climatologists are about to join journalists, celebrities, politicians and used car salesmen in the list of least trusted professions.

It turns out that there is no warming at the long term stable sites. Not in Antarctica, not in Australia, not in Africa, not in Asia, not in Europe, not in South America and not in North America. Nor the Caribbean, and not in the South Pacific. Not many sites qualify, but their data should have weight far beyond their numbers. Climate change is basically thermometer change. When someone tells you that this is the warmest decade on record, they aren't lying, but they most definitely are wrong.

Anybody feel grumpy yet?

Edmonton breaks record cold temp 2 years running

2009-12-13T19:46:00.004-07:00

If it's cold, it's just weather. Only record high temperatures signify climate change, we all know that. But today the weather at Edmonton International Airport was -46 C, fully 10 Celsius degrees colder than the record low for Dec 13. And that record low was set last year. Clearly the warming is "worse than we thought".

Any sign of Urban Heat Island effect? Well yes, now that you mention it. The temperature downtown was -36.5 C, breaking a record going back to 1882. Is the weather office taking 9 degrees off urban temperatures to correct for UHI? Somehow I doubt it.

Cold enough to freeze the nuts off the High Level Bridge.

Oedilf and Limericks

2009-12-13T08:33:00.004-07:00

The Omnificent English Dictionary in Limerick Form attempts to define the English Language using, naturally, limericks. Why wouldn't they? Wouldn't you, if you'd thought of it?

A few years ago I submitted something lame to OEDILF (which they astutely have chosen to not publish) and thereby got onto their mailing list. Today I received a note from OEDILF asking whether I was still alive, and that act of kindness moved me to generate something on our favourite new topic, Climategate.

Climategate emails have peeved
Both the sceptics and those who believed.
Much ink has been spilt
About CO₂ guilt.
Some are asking now, "Were we deceived?"

Your limericks and comments are, as always, most welcome. Even yours, PKD.

"In short, you are the definition of moral hazard"

2009-12-04T06:00:00.003-07:00

US Senator Jim Bunning tells Ben Bernanke what is on his mind. The full broadside can be found here at the West Kentucky Star. Here are some excerpts:

Chairman Greenspan's attitude toward regulating banks was much like his attitude toward consumer protection. Instead of close supervision of the biggest and most dangerous banks, he ignored the growing balance sheets and increasing risk. You did no better. In fact, under your watch every one of the major banks failed or would have failed if you did not bail them out.

You bowed to the political pressures of the Bush and Obama administrations and turned the Fed into an arm of the Treasury. Under your watch, the Bernanke Put became a bailout for all large financial institutions, including many foreign banks.

You have decided that just about every large bank, investment bank, insurance company, and even some industrial companies are too big to fail. Rather than making management, shareholders, and ebt holders feel the consequences of their risk-taking, you bailed them out. In short, you are the definition of moral hazard.

From monetary policy to regulation, consumer protection, transparency, and independence, your time as Fed Chairman has been a failure. You stated time and again during the housing bubble that there was no bubble. After the bubble burst, you repeatedly claimed the fallout would be small. And you clearly did not spot the systemic risks that you claim the Fed was supposed to be looking out for.

Ouch!

Tiger Woods, Crowd Pleaser

2009-12-03T06:18:00.004-07:00

The front page of our local paper features photos of Tiger Woods, his beautiful wife, and several other attractive women with whom he has been rumoured to be, um, pelvically affiliated.

In Tiger's defense, he has been encouraged roughly 280 times per week, by crowds around the world:

You da Man!
Go in the hole!

Walk through this excellent summary

2009-12-02T19:05:00.003-07:00

The world of climate science is a complex one. So when someone writes a lucid and insightful guide to thinking your way through the whole Anthropogenic Global Warming debate, and summarizes the key decision points and hold-for-further-investigation points, it is worth devoting 10 minutes of your life to.

I have found such a guide, on The Devil's Kitchen. Whatever your views on AGW and the environment, the science or the policy responses, I ask you to suspend your prejudices and read through. Read CRUdGate: Why this can't be swept under the carpet.

Climategate Humour

2009-11-28T10:25:00.002-07:00

From Daily Telegraph article comments

How to Forge a Consensus

2009-11-27T06:07:00.004-07:00

I admit it, I love the way English words and phrases can be used to imply two opposite meanings.

The word "forge" means to fabricate, which itself also has two meanings, either to create something real or to fake something. A bit like Japanese where the word "to believe" (shinjiru) also means "to imagine".

Well a good part of the climate science community is wondering which kind of forging has happened around its vaunted "consensus", as the leaked emails and programs from the Climate Research Unit at the University of East Anglia reveal a nice little Catch-22. As you have read by now, (unless you rely on regular newspapers for your news) the debate about global warming often came down to "skeptical climate research that has not been published in peer reviewed journals is meaningless".

Now the evidence is clear that publication in peer reviewed journals was controlled by one side of the debate, not coincidentally the side that kept saying "the consensus of scientists is that AGW is real and getting worse."

Not so fast, Carbon Dioxide Breath!

If the science can't be replicated independently, it's not science. Fraud, maybe. Belief and imagining, for sure.

The consensus was forged. And not the good meaning of forged.

Acknowledgements to the Wall Street Journal blog for the theme.

Groupthink and Climate Change

2009-11-12T05:13:00.001-07:00

HUNTSVILLE, AL - Science doesn't support current global warming alarms and, even if it did, current proposals to fix things won't work and might make life worse.

That's the well-known view of Dr. John Christy, a University of Alabama in Huntsville climate scientist, and Christy spelled out the "whys" and "why nots" of his perspective Tuesday to the Huntsville Rotary Club.

"Consensus is not science," Christy began, quoting the late author Michael Crichton.

Christy, the state climatologist, is well-known in the global warming debate. He has testified before Congress many times and was an unpaid expert witness for the automobile industry in a federal lawsuit against fleet mileage requirements.

Here's Christy's basic argument:

* The data being used to predict catastrophic warming is suspect.

* Models generated from that data "overstate the warming" actually taking place. The earth is warming, but not that much, and it has warmed and cooled for eons.

* The Earth's atmosphere is nowhere near as sensitive to carbon dioxide as some environmentalists believe.

* Any "solution" to perceived global warming must balance the growing worldwide demand for energy against cutting carbon dioxide output.

Fleet mileage requirements now proposed by the Environmental Protection Agency "would reduce global temperatures by about 1/100th of a degree," Christy said.

You would need to replace 1,000 coal-fired power plants with 1,000 nuclear plants to change global climate even .15 of a degree, he said.

"This is the scale (of global climate) we are talking about," Christy said.

* One cost of mandating harsh energy controls is the migration of industry to areas where requirements are less, Christy said.

In his talk, Christy also took aim at several other widely discussed pronouncements.

* Temperatures in the Arctic have increased over the last 100 years, he agreed, but that's only because 100 years ago "was the coldest it's been in a long time."

* Arctic ice has melted, but ice has grown in Antarctica. Between the two, there's about as much ice as always.

* There are more polar bears now, not fewer. Canada issues 800 bear-hunting permits each year, he pointed out.

* Temperatures may be warmer in Greenland, but scientific experiments with ice fields show "that 4,000 years ago, it was warmer in Greenland than it is today.

"Greenland did not melt," Christy said.

Why is the apocalyptic view of climate change so widespread?

"Funding comes if you have an alarming story," Christy said.

He also cited "group think" and said scientists revel in the attention their views about climate brings.

"It's almost a drug," Christy said.

How to eat a chicken wing

2009-11-08T16:41:00.001-07:00

Who knew?

The atmosphere is bigger than you think

2009-11-06T05:14:00.003-07:00

Reduce your carbon footprint and save the planet!

Q: How much carbon should I remove from my footprint?
A: 1,767,250,000,000 metric tonnes per Centigrade degree of global average temperature change, attributing all temperature increase over the past 150 years to CO2 emissions. (Your mileage may vary, depending on whether you think the sun may somehow affect Earth's temperature, you outrageous radical). One point seven six seven quadrillion tonnes.

Put that into perspective:

A North American household contributes 24 tonnes per year of CO2
US emissions are 6,000,000,000 tonnes per year, total. Eliminate those emissions and the effect on temperature is about 3 thousandths of a Centigrade degree.

Here in Canada, we could divide that number by ten. Shut down every CO2 source for a year, save 3 ten thousandths of a degree. Wow.

So let's keep asking people who want to save us all from whatever terrifies them "what effect will it have on temperatures?" If the answer is a number that is detectable in real life, it is wrong.

Read the analysis here on World Climate Report. The various info sources are either US government stats or associated with Al Gore, in case you were wondering about "denier" "bias".

I use compact fluorescent bulbs to save money. Saving the planet? The planet will take care of itself.

If an enterprise is too big to fail...

2009-10-27T06:09:00.003-06:00

...and the government should therefore have to prop it up, then why not go the AT&T route of forced break-up? It worked for the telecommunications sector, and cost taxpayers nothing besides the cost of some bureaucrats' salaries.

Instead the US government spent taxpayer's money on propping up banks, keeping their shareholders whole. Private profit, public loss. And the so-called stimulus money is an equal misallocation of scarce resources.

Read this outstanding essay by David Einhorn, via John Mauldin's Outside the Box site.

8 Symptoms of Groupthink

2009-10-25T08:13:00.003-06:00

We have all heard the term. Let's remind ourselves of what it looks like in real life:

Illusion of invulnerability –Creates excessive optimism that encourages taking extreme risks.
Collective rationalization – Members discount warnings and do not reconsider their assumptions.
Belief in inherent morality – Members believe in the rightness of their cause and therefore ignore the ethical or moral consequences of their decisions.
Stereotyped views of out-groups – Negative views of “enemy” make effective responses to conflict seem unnecessary.
Direct pressure on dissenters – Members are under pressure not to express arguments against any of the group’s views.
Self-censorship – Doubts and deviations from the perceived group consensus are not expressed.
Illusion of unanimity – The majority view and judgments are assumed to be unanimous.
Self-appointed ‘mindguards’ – Members protect the group and the leader from information that is problematic or contradictory to the group’s cohesiveness, view, and/or decisions.

The term "Groupthink" was coined by Irving Janis in 1972.

Desiderata and Snopes

2009-10-24T08:54:00.002-06:00

"Go placidly amid the noise and haste..."

How many of us recall Desiderata from the 1970s? It seems that every college dorm had a poster of it somewhere, along with the requisite Lord of the Rings and Farrah Fawcett materials. It even made it onto vinyl as a Les Crane recording, although for copyright reasons YouTube does not carry the audio portion.

I spotted the poster in an office the other day, and like most of the others I remember it said "Old Saint Paul's Church, Baltimore, 1692" on the bottom. The sight was both familiar and a bit unsettling, because it caused me to momentarily question the emotional stability of the guy who had it on his wall.

Snopes.com explains the source of the 1692 reference and tells us that the text was actually written in 1927 by Max Ehrmann, an Indiana lawyer. Thanks Max, and thanks Snopes.

New Yorker has the best cartoons

2009-10-18T19:26:00.000-06:00

When you have just done something stupid...

2009-10-11T11:08:00.002-06:00

(as I did, putting a scratch in my hardwood floor due to my own pig-headedness)

...you should use "Remorse Code".

It sounds like this:

Duh duh
Shit shit shit

British town names

2009-10-08T14:13:00.002-06:00

If you find yourself in Penistone, be sure to experience the mighty organ.

British road signs, one more time

2009-10-06T15:15:00.001-06:00

What is a humped zebra, anyway?

Answering Machine Message - How to Get It Right

2009-10-03T08:35:00.004-06:00

Thanks Casey!

Just back from the US

2009-09-26T15:14:00.003-06:00

I was in Chicago and Pittsburgh this week, and managed to eavesdrop a bit on the G-20 window-dressing and to take the pulse a bit of the east and central US.

Impressions? Pittsburgh is an old-money city which has done very well. I think the airport design is thoughtful, the freeways are well designed and maintained, and property is an incredible bargain. I checked out house prices in a very upscale enclave about 20 minutes from downtown, with a golf course and architectural controls, littered with Benzes and Escalades. What was being offered at $550k would have sold for $800k - 900k four years ago. And the bottom has not yet been reached. Local companies are still cutting staff and looking for ways to save their way to prosperity. Can't be done, although the opposite (spending your way into bankruptcy) can be easily achieved.

I also think Pittsburgh's media has lost its mind. Here's why: Greenpeace managed to fool all the police and security on Wednesday morning and string a banner on a major bridge downtown. The radio reporter who covered this was eagerly WAITING FOR GREENPEACE TO COME AND TALK TO THE MEDIA to crow about how they had pulled off this act of publicity-grabbing vandalism.

Chicago people like to say "The best thing about Chicago is you can fly direct to anywhere in the world. The worst thing is you have to do it from O'Hare Airport." And it used to be true; few airports could match O'Hare for pure congestion and crowds. But no more. There are parking spaces in the lots, seats in the airport restaurants, even room to walk from gate to gate. Traffic is probably 70% or so of its pre-crash levels, by my guess. A sign of the times. And worse is yet to come.

Check out BC Highway 99

2009-09-20T20:40:00.007-06:00

I have found a highway that is worth driving just for the sake of driving it. Best of all, it connects spectacular scenery with more spectacular scenery without ever repeating itself, and a one-day round trip begins and ends in a great city.

Highway 99 runs north from Washington into BC near Vancouver, slices through Vancouver and then heads north towards Whistler, site of the winter Olympics in a few months. The portion of the road between West Vancouver and Whistler is called the Sea to Sky Highway, and it is true to its name. It winds along the cliffs that look west onto the Pacific Ocean, and the myriad islands and inlets are a feast for the eyes.

On Saturday morning we were treated to a collection of British cars wending their way north, including an old Rolls Royce Silver Ghost, an MG TC, a TR3, some sort of old Jag two-seater, a stunning Bentley Continental convertible, a somewhat lecherous looking Jensen Interceptor and a variety of MGBs and MGBGTs. We had the roof down in the 320ce and were pretty comfy compared to all except perhaps the couple in the Bentley.

The road turns inland and continues to climb (Sea to Sky, remember) and we stopped for a bite in Whistler, a mountain resort with big-league skiing and golf. We then left most of the crowd behind as we pressed north towards Pemberton. The mountains along the west coast scrape the moisture from the Pacific winds and the road winds past lakes and rivers and mossy mixed forests. Pemberton sits in a fairly wide valley, and then beyond Pemberton the road follows the Birkenhead river for a while and starts to climb. Expect 20 mph switchbacks and hiking trails and occasional places to pull over to park for a picnic. The last 20 miles or so have a few 13% downhill grades, several single lane bridges and to-die-for views, small and large, from exuberant little creeks to a finishing vista near Lillooet that is like driving in a piece of the Grand Canyon.

Once you reach Lillooet the countryside opens up, and it looks as if it is covered in suede; dry, open, deeply carved by the Fraser River and its tributaries. If you are pressed for time, turn south from Lillooet on Highway 12 and make your way back towards Vancouver, or take a longer way around and head up to Cache Creek first.

Either way, the return trip is completely different from the outbound route. You will be in rugged, dry upland terrain, with sage brush, gullies and spectacular views. For my wife and me, our destination this trip was in the opposite direction from Vancouver, and we pressed north and east to Highway 5 then onwards into the dusk, heading to Alberta.

The cabrio was a treat; we motored roof-down through a couple of rain showers with the front side windows up, and the wind deflector, and kept dry except for some drips from the top of the windows. This is a touring car not a sports car, and it plugged along through the canyons of Highway 99 east of Lillooet, but was happier at speed, whether the roof was down or up.

Highway 99 is worth driving just for the fun of it. Take a day, ideally in May, June or September (avoiding tourists in July/Aug and the likelihood of snow the rest of the year!), start in Vancouver and head north along the coast. Return via the Fraser Valley. We would go a day out of our way, just for the drive. There are no other roads that I would say that about.

(Note for visitors from Benzworld. We started in Edmonton, went to Calgary, Richmond BC, then home. 4 days on the road, 1650 miles/2600 km). 1992 320ce cabrio.

Internet car-selling scam

2009-09-12T20:12:00.004-06:00

You find an ad somewhere on line for a car that is just a couple of years old, low miles, good condition, facts backed up by photos and best of all, the price is really, really low.

Why so cheap? Well, the seller is just about to leave the country, or has just left the country but the car is at a port and the seller has found out that he can't ship it after all, or the seller just started working on a cruise ship and doesn't really need a car, or the seller is in the armed forces and could get sent away at any time but can't tell you when, perhaps for reasons of national security.

To pay for this car, the seller wants everything to be above board, so the idea will be to make the deal then arrange the payments through eBay. What could be more secure?

I now know three people who have been attracted by a deal like this. It is a scam. There is no car, and the buyer loses whatever deposit the seller can talk him into sending.

Brickbreaker one more time

2009-09-07T19:06:00.006-06:00

The old Blackberry 8800 died and I have been equipped with a new Blackberry Bold 9000. Naturally I needed to check out whether Brickbreaker still looked and worked the same. It doesn't, so those who relied on the following links on this site to improve their games probably have something to complain about:

Brickbreaker Level 16
Brickbreaker Levels 1 - 17
Brickbreaker Levels 18 - 34
More Brickbreaker Tips
Brickbreaker Addicts

Here is what I observe to be different in this version:
1. The ball is much smaller
2. There is more space on the right side for the ball to sneak through between a silver brick and the right side wall. Aim for this and it will help you, but allow for the ball to sneak through coming back down, too.
3. There is a bit more randomness in where the ball goes when you launch it at each level
4. My tips for Level 8 do not work reliably. Actually they don't work at all.
5. Level 13 really benefits from aiming at the bottom right of the silver bricks and letting the ball slip up and through.
6. Level 26 is a killer, but if you happen to get a GUN from one of the upper level bricks, take out the two silver bricks at the left edge of the upper coursel.

I would be most grateful for your thoughts and observations about how Brickbreaker varies from one generation of Blackberry to another. Comments are always welcome!

Unhealthy US Commercial Real Estate

2009-09-07T13:53:00.005-06:00

Wow, those green shoots are really sprouting.

The US National Association of Realtors has the following forecast:

“We now expect office vacancy rates to rise very sharply, surpassing 20 percent in 2010. Office rents will fall 7 percent in 2009 and further fall an additional 1 percent in 2010. Industrial and retail sectors will face deteriorating conditions as well. Only the multifamily sector looks to squeeze out positive rent growth, though at a slower rate of increase than in the past.”

Building Stonehenge, without so much as a pulley

2009-09-04T21:18:00.001-06:00

Wow. *

Bulletin: Solar Radiation is not Constant; May Affect Climate

2009-08-30T08:59:00.003-06:00

An article from the Swiss Federal Institute of Technology, via Watts Up With That, indicates that cycles in solar radiation that were not accounted for in the CO2-driven climate models may have an influence on climate. The sun? Who knew?

The news got Halfwise here thinking about our thinking, so I posted the following comment in the comments thread at WUWT:

Chaos-rich systems, for example climate or stock markets, invite mortals like us to proclaim that we finally understand the system based on a new model that explains its behavior over some limited time period, at some selected scale.

Then when some other mortal adds to our model or (worse for our ego) debunks it with a different and better model, we are usually tempted to defend our model and diminish the importance of others' findings rather than thank them for their insights. Our natural human tendency is to focus on our feeble explanations rather than on the marvelous complexity and uncertainty that we are attempting to model, denying that we are inevitably doomed to be passed by a better model.

The whole AGW debate has, in my view, been sidetracked into a debate about what to do as a result of the predictions of a generation of models. We forget that all models intrinsically have fatal limits as to scale and time period. This memory lapse is convenient if it supports the agendas of some and touches on the psyche of others, which can certainly be said about the Green movement in general these days.

The latest research on solar radiation feels to me like a step towards greater understanding of reality. But I am sure that CO2 felt to many others like a step towards greater understanding of reality too, so it is not time to proclaim that the tide has turned and the latest model is finally comprehensive enough to be believed by all. As noted, typically what happens now is intense defense of previous models, not gratitude for new insights.

Just as with the stock market, climate will assert its own complexity and uncertainty, and honest people will come to regret their allegiance to a wrong model.

I have one prediction: three years from now, we will all be less confident in our beliefs about our abilities to understand complex systems. It will be a kind of "scientific agnoticism" and will be part of a societal movement away from being swept up in the expensive collective, moving instead towards individual rights and obligations. We can thank the Green movement for reminding us of our obligation to sustainability; we need not thank them for Cap & Trade.

Prediction: Huge Hit

2009-08-26T18:32:00.000-06:00

(or maybe it has already happened)

This must be an interesting place to work

2009-08-23T20:09:00.002-06:00

From: Shannon
Date: Monday 17 August 2009 10.12am
To: Staff
Subject: Coffee cups

Hi

There was twelve coffee cups left in the sink this morning. Could everyone please wash their coffee cups after using them.
Thanks, Shan

From: David Thorne
Date: Monday 17 August 2009 10.19am
To: Shannon
Subject: Re: Coffee cups

Morning Shannon,

My apologies. Those coffee cups were mine. I am rather busy today so decided to have all of my coffee breaks at the one time this morning rather than taking twelve separate breaks throughout the day. I am currently experiencing severe heart palpitations but also typing at four hundred and seventy words per minute so should be able to knock off early.

Regards, David.

From: Shannon
Date: Monday 17 August 2009 10.31am
To: David Thorne
Subject: Re: Re: Coffee cups

I was not saying they were all your coffee cups I was just saying that I should not have to wash twelve coffee cups when I don't even drink coffee. People should wash their own coffee cups or at least take it in turns to wash them.

Shan

From: David Thorne
Date: Monday 17 August 2009 10.42am
To: Shannon
Subject: Re: Re: Re: Coffee cups

Shannon,

You raise a valid and not at all uninteresting point. Perhaps you could construct some kind of chart. A roster system would enable us to work in an environment free of dirty coffee cups and put an end to any confusion regarding who the dirty coffee cup responsibility lies with.

David.

From: Shannon
Date: Monday 17 August 2009 1.08pm
To: Staff
Subject: Kitchen Roster

Hi everyone. I have discussed a kitchen roster with David and feel it would be fair if we took it in turns to do the dishes. I have put the roster in the kitchen so everyone can remember. I am Monday morning and Wednesday and Friday afternoon. David is Monday afternoon and Wednesday morning, Lillian is Tuesday morning and Thursday afternoon and Thomas is Tuesday afternoon and Friday morning.

Thanks, Shan

From: David Thorne
Date: Monday 17 August 2009 1.22pm
To: Shannon
Subject: Colour coded coffee cup cleaning chart

Shannon, I notice that you have colour coded the coffee cup cleaning chart. While I appreciate the creative effort that has gone into this roster, the light salmon colour you have chosen for my name is very effeminate. While I am sure you have not done this on purpose and are not inferring anything, I would appreciate you rectifying this immediately. Would it be possible to swap colours with Thomas as he has quite a nice dusty blue.

Thankyou, David

From: Shannon
Date: Monday 17 August 2009 2.17pm
To: Staff
Subject: Updated kitchen roster

Hi. I have changed David's colour to blue on the kitchen roster. Thomas is now green.

Shan

From: Thomas
Date: Monday 17 August 2009 2.24pm
To: David Thorne
Subject: What the fuck?

What the fuck is this email from Shannon? I am not doing a fucking kitchen roster. Was this your idea?

From: David Thorne
Date: Monday 17 August 2009 2.38pm
To: Thomas
Cc: Shannon
Subject: Re: What the fuck?

Thomas, do you feel it is fair that Shannon should have to wash everyone's coffee cups? Apparently this morning there were twelve coffee cups in the sink. I was going to schedule a staff board meeting this afternoon to discuss the issue but luckily Shannon has prepared a colour coded coffee cup cleaning chart for us rendering a staff meeting unnecessary. We should all thank Shannon for taking the initiative and creating a system that will empower us to efficiently schedule client meetings and work commitments around our designated coffee cup cleaning duties. If at any stage our rostered coffee cup cleaning commitments coincide with work requirements, we can simply hold the client meeting in the kitchen. We can wash while the clients dry. Today it may only be twelve coffee cups but tomorrow it could be several plates and a spoon and then where would we be?

David.

From: Thomas
Date: Monday 17 August 2009 2.56pm
To: Shannon
Subject: Kitchen stuff

Shannon, I do not need a chart telling me when to wash dishes. I am not going to stop in the middle of writing proposals to wash coffee cups. David is being a fuckwit. I only use one coffee cup and I always rinse it out after I use it. If we have clients here and they use coffee cups then it is appreciated that you wash them as part of your job.

From: Lillian
Date: Monday 17 August 2009 3.06pm
To: Thomas
Subject: Re: Kitchen stuff

What's this kitchen roster thing? Did you agree to this?

From: David Thorne
Date: Monday 17 August 2009 3.09pm
To: Shannon
Subject: Rescheduling coffee cup duties

Shannon, can I swap my rostered coffee cup cleaning duty this afternoon for Thursday? I have been busy all day working, not looking at pictures of Johnny Depp on the internet, and not had time to familiarise myself with correct coffee cup cleaning requirements. I am happy to reschedule my meetings tomorrow to undertake a training session on dish washing detergent location and washcloth procedures with you if you have the time. I feel it would be quite helpful if prior to the training session you prepared some kind of Powerpoint presentation. Possibly with graphs. Will I need to bring my own rubber gloves or will these be provided?

David

From: Shannon
Date: Monday 17 August 2009 3.20pm
To: David Thorne
Subject: Re: Rescheduling coffee cup duties

Whatever.

Does Funding for Global Warming Research Promote Biased Results?

2009-08-16T08:48:00.006-06:00

I posted recently on the amount of money that has been spent on Global Warming research, and wondered aloud whether the availability of money could encourage researchers to bias their results.

If this were a scientific study (it is not) the investigation would need a hypothesis and we would then look for evidence for and against that hypothesis. The objective would be to reach a conclusion about the likelihood the hypothesis was correct.

But what hypothesis would properly describe the issue? I have given this question considerable thought, and confess that I have come up empty. Here is my thinking:

Research is funded by a variety of government agencies and non-government foundations and interest groups. The foundations and interest groups can be broadly categorized as having an agenda that matches their vision statements. One would expect an industry foundation to pursue an agenda that is different from, say, GreenPeace or the Sierra Club.
A hypothesis that the source of funding would bias the results of the research would require an auditor to review the research, find evidence of errors in data gathering, data processing and/or data analysis, identify a pattern in those errors that favors the agenda of the funding agency, and attribute that pattern to a decision on the part of the researcher to shade his results to match the funding agency. This is beyond my capability.
Instead of looking for bias at the level of individual research projects, one could look simply at the availability of funding for various types of global warming research. Again, though, what question would you ask? What is the control group for a null hypothesis that you would use for comparison? I hear anecdotes, for example that failing to slip the words "climate change" into requests for funding in biology research dooms the application to rejection. But grant applications get rejected for lots of reasons, and one would have to crawl into the head of each board that reviews grants.
Then there is the "dutiful soldier" defence. If an institution decides that global warming is probable, who would criticize someone for approving funds to either clarify its possible extent, or to research how to cope with the likely impacts? This is bias in the strictest sense of the word, but at the same time no sane administrator would approve funds for a study based on "nothing will change, and we will need to prepare for unprecedented levels of sameness." The availability of funds tells us nothing useful.
So what about tabulating research results and trying to draw a conclusion based on how many studies support one view or another? Well, this turns into science by consensus, and we should speak with Copernicus and Galileo about the validity of THAT approach.
If one can not come up with a good clear-cut hypothesis, what other methods exist? I can think of only one: invert the problem and reverse the onus of proof. Premise - people operate in their self-interest. Whether consciously or not, human nature leads us to conform our actions to the prevailing wisdom of the times.
This, not surprisingly, reminds us that we are ALL biased, and that our actions are colored by our beliefs about the world. This is demonstrably true in religion, politics, investment markets and entertainment, and the list will go on and on.
So now the burden of proof shifts to the opposing position. Prove to the world that research into global warming is NOT biased by the source of funding. (Such a situation, I believe, would make it unique among human endeavors). Anyone want to give it a shot?

Humans are just humans, regardless of our political opinions. We do what we think is right based on how we see the world. Then we criticize others who see things differently. Bias is part of our essential being.