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Sunday, January 31, 2010


State of the Union

The President reported on the state of the union Wednesday night. Well, that was what he was supposed to do, but for at least half the speech, he again lapsed into campaign mode. This is so unfortunate since Mr. Obama's oratory skills when not in campaign mode are unquestionably of the highest order. The end of his speech, a plea for a return to the days of bipartisanship and a reaffirmation of faith in America, was arguably the strongest. Here are some Musings and critiques on some of his major points from Wednesday night.

Why it was necessary for a recap of the first year accomplishments of the administration, I am not sure, (OK, I do understand, but this speech is supposed to be more forward looking), but it did serve as a reminder of the bankruptcy of liberal ideas. So we heard yet again about all the tax cuts for people who don't pay taxes, which therefore have had no impact on consumer spending. Those who did increase take home cash were intelligent enough to use it to pay down debt. Bragging that there has not yet been a single tax increase completely misses the point since huge tax increases are in the pipeline with the expiration of the Bush tax cuts. Though the cuts may be extended at lower income levels (not a guarantee if they have to be "paid for"), small business owners who hope and expect to be in higher brackets are paralyzed in terms of making new business investments and hiring decisions by looming tax increases for them.

Obama's analysis of the stimulus impact also misses the point of his GOP critics. Sure, public sector jobs in the states were saved by direct handouts to balance state budgets, but those jobs will again be at risk this year or next when stimulus funds run out. The fact is that states will never have an incentive to fix their budget holes under this regimen, and state baselines are unsupportable (not to mention unsustainable). This is just exacerbating the result that public sector jobs are replacing private sector employment, and that public sector compensation packages, counting retiree benefits, have become much too rich. But of course, that's the point, the Dems are merely serving their SEIU constituency.

One of the constant irritants repeated by those trying to fix whatever "caused the Great Recession" is the need to "get banks lending again." The truth is, from what I have been hearing, there is little or no loan demand. Who would start or expand a business with tax increases of all kinds and a possible health insurance mandate hanging over your head? Those, plus all the other uncertainties promoted by Pelosi, Reid and Obama, make it imprudent for businessmen of all types to move aggressively. The idea that encouraging lending is a legitimate government activity is one thing that distinguishes liberals from conservatives, who prefer to let people figure out their own economic decisions.

Many economists believe, and in fact predicted, that too much debt at all levels and in all sectors would cause the economic bubble to burst. Why start all over again? What we need is for government to stand down, reduce its own debt, and put equity investing on a level tax playing field with debt. Interestingly, Obama's idea about reducing capital gains taxes, or giving us a holiday from them, especially for small business, is a good start. A better approach would be to simply index all capital gains for inflation.

In fact, midway through the speech, Obama reeled off several ideas which should gain bipartisan support, albeit after careful analysis of what is actually in the proposal. For example, I agree that the US should return to its stance of aggressively pursuing trade pacts, especially with developing democracies like Columbia. However, when Dems are in charge, the labor and environmental strings attached are usually unpalatable for our would-be trading partners. Why is it always our way or the highway on these deals?

I was less enamored about Obama's suggestions for support for higher education. Next to housing, no sector of the economy has been more subsidized than our colleges and universities. All of this financial support has not helped students and their families afford more schooling. On the contrary, faculty and administrative compensation keeps going up, with no end in sight, even as faculty productivity is pitiful. University administrators are certainly among the most useless drones in all of society. The job of most college presidents is chief fundraiser, not CEO. My experience is that the deans in our public universities make Animal House's Dean Wormer look reasonable!

So, no I would not be in favor of tax credits and loan forgiveness for students, since colleges will simply find that another excuse to raise tuition.

As for the proposed commission to study the federal fiscal mess, that is a fairly obvious political ruse to obtain cover for what Dems want to do anyway. The proposal I saw would set up an 18 person panel, with Dems choosing 10 and the GOP getting 8. Republicans are right to decline, thank you. Make it 9-9, with no tiebreaker, and you have a real bipartisan discussion of equals. That's the only way I would agree to play. Otherwise, the GOP is smarter to sidestep this trap and bide its time until they recapture the House in November.

The low point of the speech was Obama's sore loser criticism of the recent Supreme Court decision restoring First Amendment rights to corporations and unions. The silliest comment of the whole night was Obama's proposal for a law "reversing the decision." I don't know how you pass a law reversing a decision that nullified the unconstitutional parts of an earlier law. Wouldn't the new law be unconstitutional by definition? The only way to reverse such a Supreme Court decision should be by amending the Constitution, or by presentation of a new case (perhaps with new Justices in place) that gets decided differently.


The last week or two have been pretty bloody in the markets, and it seems that we are in the midst of a long overdue 10% correction before it's done. That doesn't mean we are headed for a double dip recession, though that is not beyond the realm of possibility. On Tuesday, we bought 700 shares of Great Lakes Dredge and Dock (GLDD), a recommendation from our full service broker, at 6.0987. This is a "zero buy." On Thursday, we bought 25 shares of Con Ed preferred (ED.PR.A) at

Sunday, January 24, 2010


AfterMass - The Continuing Reign of Error

In the aftermath of Scott Brown's victory in the Mass Senate race, the predicted Democratic confusion and recriminations are not so offsetting as is the populist reflex by the President. Obama's verbal bludgeoning of bankers, and his promise to fight, fight, and fight some more for his program, even as his strategists scale it back, reveal the immaturity and intellectual shallowness that has marked this first disappointing year of his presidency.

The same inability to evaluate one's own performance objectively and confront error that was criticised by GWB's harshest detractors is also a hallmark of the current administration. So the instant post mortem delivered by the administration after the Coakley defeat was that she was a poor candidate who didn't work hard enough to get elected. Certainly, that was true but it was also true when she won the Dems' primary and emerged with a 30 point lead over Brown. Then came the transparent deal making and cynically dishonest cost evaluations associated with the Senate Health Care bill, followed by the secret negotiations to derive the compromise bill (in lieu of the promised open conference committee). That allowed the Brown campaign to unify the Tea Party types and traditional Republicans, but most of all, co opt the fiscally minded independents.

The other Mass dynamic at play concerned Romneycare. Many independents think it's working well and feared the disruption the federal proposal would have. Others think it's busting the Mass budget, and simply don't want to repeat that experience federally. Either way, Obamacare was viewed negatively.

Rather than deal with these actual elements impacting the Coakley defeat, Obama's handlers still refuse to admit that the program they're selling is dog food people won't eat (neither would dogs). Their main concern seemed to be that, after campaigning in Mass, Obama's electoral chops not be tarnished.

Seen through that prism, the decision to go populist fits well. Go back on the offensive, run against the "just say no" party and hit all the typical class warfare buttons. But this message is not being received well either. It is a total misread of Americans' angst. Taxing and otherwise penalizing banks and bankers is one thing, though why banks, insurers, and other financial service companies who did NOT take TARP money are also lined up for TARP taxes is a bit harder to justify on any basis. In fact, what Americans are saying is, yes, we don't want bailouts again, but assure that result by fixing the financial system, not by hamstringing it, and not by removing tax money from it (which actually weakens the system). Let's stabilize the system, resolve the levels of taxation so that businesses feel secure about hiring again, and let's not raise taxes when the economic situation is still precarious.

By the way, there are elements in the administration's regulatory proposal (i.e. the Volcker proposal) that make sense. Deposit taking institutions where accounts are guaranteed by the government should not be investment bankers. However, the proposal is not fully baked and there was no reason other than political to come out like an attack dog.

In short, the people are not quiet as dumb as this administration seems to think. They are not going to bite on oversimplified populist themes about villainy. If the health care experience should have taught the administration anything, it's that Americans will turn to multiple sources for clarification about what is proposed and make up it's own mind.

Don't you wish someone in the administration would tell Mr. Obama that the election is really over, he IS the president and he can stop campaigning for the job and start to do it?

There are multiple lessons to be learned from the Haiti catastrophe, and as certain right wing pundits have learned, the public is not quite ready to be poked in the eye about them. Of course, that never stopped the musings blog, so here goes.

Earthquake warnings by themselves rarely drive action since geological time is meaningless in poor countries where people have a short life expectancy anyway. So even though it was well known in the scientific community that Haiti was prone to quakes, preparation for an event, and certainly one on this scale, was utterly lacking.

In developed countries, building codes can be enforced and earthquake damage is not as great as in poor countries, or at least is less than it would be without proper construction. In China, it is well known that quakes will come and can be devastating, so things are built accordingly. In Haiti, where corruption is a way of life, it should be no surprise that everything came down.

Foreign aid is always provided in good spirit, but often serves only to legitimize corrupt governments. Haiti is the poster child for this scenario, where one corrupt leader after another stole all the money.

That said, for all the deriding we and other developed countries take from the UN and the Third World, such as at the goofy climate change conference recently, the US is still the most generous place on earth, and not only with other peoples' money. The giving by individuals and corporations for Haitian relief is just the latest in an endless series of efforts by Americans to reduce suffering in the world. It proves once again that wealth is not something to be critical of or ashamed of. Capital drives a better life for us and enables us to provide help where needed. It provides employment, technology, and a better environment. Government does not, and ultimately can not, do any of those things. It's role is to provide ground rules and organization (regulation) where needed. When the Obama people learn that lesson, they will have some inkling about how unemployment will be reduced.


Well, now that all that's off my chest, it's getting close to kickoff time. Go Jets!!

On Tuesday, we bought 40 shares in GLD, an ETF that basically represents a tenth of an ounce of gold per share. I just can't get into the logistics of selecting and storing bars or coins. We paid 110.95, and along with the President, instantly triggered a three day slump in the price of gold. On Wednesday, we sold 700 shares of FSI International (FSII), an average down that has been working very well for us of late - we are all but back to even. We got 3.14, not bad considering we were buying at less than two bucks a few months ago. These were older shares though, 600 purchased on 4/4/2005 at 4.08 and 100 on 7/2/2007 for 3.16. Then on Friday we bought an Australian company, Alumina LTD (AWC), a new name. We paid 5.99 for 400 shares. This was a recommendation by Forbes' columnist Ken Fisher.

The numbers are fully in for 2009, and our gain for the year was 24.9%, not bad on a risk adjusted basis since we keep 20% in cash. We finished the year only about 8 per cent or so below our peak level. After last week's ugliness, we are even for the month of January so far.

Monday, January 18, 2010


Pivotal Tuesday

My first stockbroker used to say that Tuesday was actually the day the market would set its trend for the week. He called it "pivotal Tuesday."

Tomorrow, there is a special election to fill Teddy Kennedy's US Senate seat from Massachusetts. It could well be a pivotal Tuesday for US politics. In this blog space on Sunday, the 10th, we advised readers to watch this race closely, since Republican Scott Brown was threatening to make a race of it in a state so blue, it went for George McGovern in 1972. The last GOP U.S. Senator from Mass. was Edward Brooke, an Afro American, in 1975 or so! In a way, it is too bad that the media discovered there really was a race going on because Brown might have sneaked off with it without anybody looking. As it is, the usual gobs of advertising money have now been let loose, in a last ditch effort by Dems to hold the seat. Good luck with that.

The latest polls show a statistical dead heat, or Brown slightly ahead. Momentum is running his way still, despite the usual smear tactics Dems are rolling out at the last minute. But Martha Coakley's career is one big self - inflicted smear. She was among the worst of the overzealous attorneys in various AG offices who built a name and career around the child sexual abuse cases of the 80's, where children were encouraged to testify to obviously imagined or made - up tales in cases against innocent school and day care center operators. In the most notorious case of all, Ms. Coakley kept Gerald Amirault in jail for a decade after his innocence had been demonstrated. This has long been an embarrassment for Massachusetts voters, and no "advice" to the contrary from Obama or anyone else is going to change that.

Of course, Coakley's campaign strategy was to not campaign, hoping to gain the seat by the Dems' divine right to it, I guess. When she finally did debate Brown, she was massacred and that made it no longer possible for either side to keep the race under wraps. We all know that wild horses won't be able to keep Brown voters from the polls. Have the last minute desperation tactics by Dems succeeded in similarly energizing Coakley voters? We'll find out tomorrow night.

The ultimate irony of this contest is that Brown has the opportunity to become the
41st Senate vote needed to scuttle Kennedy's life long dream of government run health care. Washington Dems took time out from debating how to rig the bill for final passage to consider what to do if Brown wins. I think they have discarded the idea of squeezing in a vote using the lame duck appointed Senator from Mass. while waiting for Brown's win to be "certified." instead, the tactic now favored seems to be to take the Senate bill as is, and force it down the throats of House members. This would avoid a Senate vote, but it causes two major problems in the House, one on the left and one on the right.

On the right, the abortion federal spending prohibition is not as air tight as the House bill's. Several House Blue Dogs voted for the bill only after achieving that prohibition. They may not come along for the Senate version. However, it was always the White House plan to run with the Senate version anyway.

On the left is a bigger problem. Rather than raise taxes on the "rich" as in the House bill, the Senate bill extracts a tax from so called Cadillac health plans, those whose premiums are above a certain amount because of rich benefit packages. Unfortunately, for the Dems, it turns out that over half of these plans are union negotiated, and unions have bought and paid for their party. The leadership negotiators had concluded that they needed to exempt plans reached through collective bargaining (i.e. union plans) for an extra five years, leaving only non-union shops to pay the tax. Aside from the obvious unfairness of this payoff, this created a funding problem - there simply are not enough non-union Cadillac plans.

Now the problem will be bigger for Dems, since if they have to adopt the Senate bill, the provision is to tax all Cadillac plans, including the union ones. So the game plan is to pass the Senate bill, and change the Cadillac tax plan provision as part of budget reconciliation, requiring only a 50 vote majority.

You have to admire the resourcefulness of the Dems, not to mention their utter lack of shame, as they go through these ethically challenged permutations. Why not simply admit that the public wants them to start over, or better yet, forget about health care reform until the economy is back on track? Or simply do the reforms everyone agrees will help - end pre-existing conditions, make all policies guaranteed renewable, limit medical malpractice suits? In fact, that is the message of the Brown campaign. It may be that win or lose, the message has finally gotten through to enough Blue Dogs: continuing to support the administration's health reform effort will end their political careers. Ms. Pelosi may find that as of Wednesday, she can't drum up a majority for any health care bill.


That cheer you hear in Gotham is one that hasn't reverberated since Chad Pennington's year of glory, and before that, the miracle of 68-69. J-E-T-S Jets, Jets, Jets! Yesterday, 3000 miles from home against a favored team with 11 straight wins, a solid defense, a high powered offense, and a reliable kicking game, the Jets prevailed using old fashioned hard - nosed football, reminiscent of their great co-tenant Giants teams. After a while, none of the strengths referenced above were in evidence on the San Diego side and the Jets measured off a 17-14 win. Can they beat Indy, who overpowered the Ravens Saturday? Another long shot, but now one must believe anything is possible given the Jets strength at the line of scrimmage on both sides of the ball. The Colts should be about an 8 point favorite, but New Yorkers will be watching with hopes high.

In the other conference, New Orleans scored at will against Arizona and the Vikes blasted the Cowboys, who were also supposed to be hot but didn't really show up. I give the Saints a slight edge against the Vikes and they should be favored by about 2 and a half points.

We remained in selling mode last week. On Tuesday, we sold 200 shares of Marine Max (HZO) at 9.98. These were purchased on 10/22/08 for 3.01. On Thursday, we sold 200 shares of LFUS at 34.50, that were purchased 10/20/2000 for 27.125. In those days we would have said 27 and an eighth. By the way, the next time someone tells you that it is unfair for capital gains to be taxed at lower rates than "earned income," just point to transactions like this one where tax will be collected on what are basically nominal gains, made up entirely of inflation.

There's a different discussion when the subject is the rates paid by hedge fund managers on carried interest. Carried interest is really a fee, not a capital gain, and this is one time I agree with those who say the higher regular income tax rates should prevail. More on that controversy in a future post.

In any event, it appears that higher gains tax rates are coming, along with the possibility that Obamacare, if it passes, will need to be funded by applying the medicare tax to gains as well as earned income. So 2010 may be a good year to take gains and postpone losses.

Sunday, January 10, 2010


Football Overload

I skipped virtually all of the bowl games, except Alabama v Texas, which turned into an outstanding game once Texas' freshman QB got over his jitters and gave the Longhorns a shot at a comeback that was a bit too little, too late. That was fine with me, a long time Alabama rooter, nice to be on top again even if it was an injury to the starting Texas QB that turned the Tide on. His replacement, the aforementioned freshman Mr. Gilbert, is going to be a very good one.

Even with skipping so many games, I'm a bit over footballed after watching all four wild card games this weekend. The first three reversed the NFL's pass bias by featuring great runners and defense, starting with the Jets continuing to improve by employing the hardnosed formula that used to guarantee playoff success. Then we had this evening's Cardinals/Packers classic, more like a regular season game where the air was filled with footballs and neither team could stop the other.

Next weekend promises more of the same, four playoff games and there are some intriguing matchups. In the NFC, those Cardinals head to New Orleans, for what promises to be another high scoring contest between two teams that feature speed, speed, and more speed. If the Saints can regain their earlier season form, I would expect them to win at home, but after a number of marginal (or worse) performances, they will have to find the restart button. Make the Saints four and a half point favorites, and God knows how high to set the over/under. Same is true for the Vikings, who are at least coming off a decent regular season finale, but the Cowboys are smoking hot right now, and I think they can pull off the road win. The line should be Vikes by a point or two, but I would take the 'Boys.

In the AFC, the Colts rested their starters for two weeks and showed, if nothing else, that they have no adequate backup for Peyton Manning. The Ravens' defense is aggressive enough to make any QB vulnerable, but I would give the Colts the edge in this one. They should be about a 7 point favorite. No one is improving faster than the Jets, and their simplified offensive scheme has made Mark Sanchez all but turnover proof. Still they have to fly across country, then take on the hottest team in football coming into the playoffs, San Diego's Chargers. The Chargers better take Gang Green seriously, and I expect they will. I will be rooting for my team, but make the Jets a 6 and a half point underdog all the same.

Topping off football mania, last night, I introduced my daughter to the movie North Dallas 40 starring Nick Nolte and Mac Davis, the raunchy, occasionally hilarious, but no holds barred look at professional football's exploitation of its athletes. Best football movie of them all, IMHO.

Two key Dem Senators gave up on their re-election bids last week, and that shows the inevitability of GOP pickups in 2010. Chris Dodd of CT had zero chance of being re-elected, not only because of the backlash against his far left philosophy, but mainly because of various improprieties, the most glaring of which was his sweetheart Countrywide mortgage. Dems initially cheered his exit since they can now run popular Attorney General Blumenthal, who has a better chance to hold the seat. Better, but not certain, I would say. It is still possible for Republicans to win statewide in Connecticut - witness recent governor races - and it should be fairly easy to make the case that Blumenthal might be to the left of Dodd.

The resignation that really hurt Dems was Senator Dorgan of North Dakota, a blue dog and the husband of ACLI lobbyist Kim Dorgan. The reasons this hurt was that the Senator is only 53, so hopes were that he could retain the seat for a long time, and there is virtually no possibility that the Dems can retain the seat without him. In fact, there was no way they could retain it with him either since he has been tied to Senator Reid's health bill and that is death right now in red states like North Dakota.

In fact, keep a close eye on the special election in Massachusetts January 19 to fill the Kennedy seat. Everyone assumes that the Dems can't lose that seat, and they probably could not if it was a Kennedy running. Otherwise, it is possible for a Republican to win statewide in Massachusetts, and my guess is that this election will be closer than anyone now expects. Folks in Massachusetts think Romneycare is working out OK, and they are suspicious about changes that might be dictated by Obamacare.

It would be some kick in the head if there was an upset on the 19th and the Dems lost their 60th vote before the final version of Obamacare emerges from "conference."

Two interesting statistics relative to these discussions passed my way in this past weekend's WSJ editions. One is that DC commercial rents are now higher than NYC's. To me this just shows that businesses fully comprehend the Federal power grab by this administration and Congress, and they want to be positioned to feed at the trough. Meanwhile, private sector investment is going nowhere.

Second, the UK budget deficit has reached an appalling 12.5% of GDP, a preview of the fiscal mess we are in for if we continue to march toward Euro style socialist solutions and can't get entitlements under control. For additional detail on our fiscal failings, I refer you to the prior 190 or so posts in the musings archives.

The Obama administration has taken a real beating on the Delta flight terror incident, which they deserve considering how the previous administration was blamed for everything, natural or otherwise, that went wrong including Hurricane Katrina. Somehow, Janet Napolitano is likely to retain her job, though she and the Treasury Secretary would have to lead the list of administration officials in any pool where the object would be to guess the first one gone. Obama took responsibility, which is to say no one was to blame except the system and we all know that the prior administration put that in place.

One bracing thing was that Obama finally got and delivered the message to all his fellow Libs with their heads in the sand that we are at war with Al Queda. I wasn't really surprised by the news. Wasn't it in all the papers?

The fact is that the vocabulary and the diplomacy employed by this administration is simply inviting terrorist activity, because it is so weak. In my view, Obama's only winning strategy would be to pivot to a JFK/LBJ type attitude toward our enemies around the world and adopt a more realistic foreign policy. The left would raise hell, but that might enable him to leverage his personal popularity again, which is still evident.

Otherwise, that popularity figures to keep deteriorating.


On word that is in constant usage today that rankles me a bit is "sustainable." Is the economic recovery sustainable? Can the Dems sustain their Congressional majorities? What about energy production, environmental gains, educational improvements, the stock market advance? Medicare and Medicaid? Sustainable?

Nothing is forever. Any trend line is almost sure to be broken. There are so many variables in every field of endeavor. Worrying about sustainability is a fool's errand. Just trying to handle today's problem correctly is enough challenge for most of us.

If you see the word "sustainable" in a story about...anything, you can be sure the author is asking the wrong question.

For the New year, we started with a buy transaction then moved to the sell side, taking some profits in the midst of a nice January effect rally. On Monday, we bought 400 shares of ADC Telecommunications (ADCT) at 6.27, a zero buy I would recommend you not try at home. This industry's overcapacity slump began in 2000, a downturn that has certainly proved to be "sustainable," I'm afraid. I was going to dump this stock from the buy/hold list, took a good look...and decided to hang on for while. We'll see. On Wednesday, we sold 700 shares of FSI International from the IRA, some at 3.21, some at 3.20. We have had a nice recovery in this stock after considerable averaging down. These shares were purchased 11/12/07 at 1.90.
On Friday, we sold 100 shares of old favorite Carmax (KMX), also from the IRA at 23.91. The purchase price was 13.60 on 7/28/08.

Sunday, January 03, 2010


New Year, New Decade, SOS

It's a New Year, a new decade, but it's the same old "shirt" from the Dems. Don't worry that two-thirds of the electorate oppose Obama care, they will like it once it passes and they see how it works. Umpteen Presidents have tried to pass health care, what an achievement that Obama is getting it done. And on and on go the spinmeisters and their cheerleaders on the Sunday AM news shows (led this morning by "faux historian" Doris Kearns Goodwin).

What the Dems don't seem to get, but what they will learn the hard way in November 2010, is that this time, the devil is not in the details, it is in the concept. What Americans don't like about the bill is less the spending and punitive provisions of the bill, only a few of which they understand so far, but the overall concept of delivering another 15% of GNP to public sector regulation and control. So whatever tweaks come out of the conference committee "negotiations" will be irrelevant to public opposition to the bill. They will only impact whether certain blue dogs are kept in line.

Statistics are always interesting and the poll numbers against the bill are really just a starting point. Obviously, these are not uniform around the nation. The eastern blue states tend to be more favorably disposed to the bill, while western and southern states tend to be more hostile. Guess where most of the blue dogs come from. So the typical blue dog Dem, probably a narrow winner in his or her last election, and certainly helped by Obama coattails in 2008, faces a 2010 electorate more than 60% opposed to the bill, where conservatives are more energized and liberals less so, causing the turnout group to be remarkably different from the one that occurred in 2008. This means many should expect to go down. In fact, Ben Nelson, the poster child for endangered blue dogs, is looking at something like a 2-1defeat by his likely opponent if the election were held today.

This adds up to a bleak outlook for Dems and for the rest of the Obama Administration's program. Unless there is a drastic change in the country's mood between now and November, there is no way the Dems can maintain a filibuster proof majority in the Senate, and a very real chance they can lose the majority in one or both houses. As time goes by, the GOP will find it a lot easier to simply run out the clock. The Dems advantage in fundraising (always the incumbent's advantage) and news management won't matter if they can't convince the public that the federal monster isn't simply out of control in their hands.

So let the countdown begin. And let Republicans redouble their efforts to build their own proposals, and include more specificity, for getting the country back on track. I would suggest a committee that included Newt Gingrich, Governor Tim Pawlenty, Rep. Eric Cantor, Sen. Tom Coburn, and Mitt Romney to act as a think tank to formulate these proposals.


As our blog nears its 200th post (this is #195), you might wonder how exactly to characterize it if, in fact, you choose to spread the word and help build our readership. One thing this blog is not is one of those extremely useful investigative reporting type blogs that brings new facts to light and does the key job of discrediting political and other blowhards based on their past
(mis)statements. Since I have a full time job, I don't have the time nor resources for that kind of reporting and make no apologies - we're just not up to it. This is commentary, and second derivative commentary at that, since largely, we are energized to respond to the comments of columnists and others of the self-styled intellectual elites.

It's a great thing that anyone, even a crackpot, has opportunity to vent his views in our society. Besides providing an outlet for blowing off steam, it is what separates an open and free society from a closed, repressive one. Internet blogs are simply the 21st century version of Thomas Paine's pamphlets, and we are seeing their impact even in repressive societies like Iran's, where brave posters risk their life and liberty to protest against their government.

There is much that is great in the traditional press, and as a member of the element of the population that is on the "back nine," I am a daily reader of WSJ and the very liberal Newsday, a reader of the bi-monthly Forbes magazine, etc. However, one of the things that is not so great is when elements of the traditional press take bloggers and other politically incorrect sources (a la Fox news) to task, while purporting to an objectivity that in fact, they do not subscribe to. Watching the network news shows, reading The new York Times, and even Associated Press news dispatches, one is subjected to the worst kind of slant, that is the subtle characterizations that are so offensive to us conservatives that others seem not to be aware of. In many cases, I doubt the writers are even aware of how often they give their biases away. I believe that my old friend Dave Espo of the AP actually believes he has tried mightily to present the Obama Care issue in an objective light, when, in fact, his reports have been anything but. His example is all too typical.

So, for better or worse, redwavemusings is likely to continue for as long as I can produce it. It's too important for all of us to speak up about what we see and what we believe.


I have avoided much of any discussion of the Tiger Woods fiasco, not having any facts to add and not being all that surprised about what has occurred. Being in the spotlight is a hard thing for any public figure - politician, sports figure, entertainer, union leader, etc. One has to be comfortable with the fact that there is no more real privacy - you are "on," 24 by 7. I don't think I could live like that. There are some people so driven to succeed that they can do this, especially if their private support system is totally satisfactory. We know that for our parent's generation, this was more often the case than it seems to be for baby boomers and younger generations.

I think the reason for this is that somehow, later generations have come to believe that one of their entitlements is ongoing, totally satisfying relationships, indefinitely. Our parents had less ambitious expectations, understanding through experience and watching their own parents that there would be ups, downs, and that life's curve balls meant enduring despite periods of struggle or unhappiness. This is clearly a more realistic picture. Unfortunately, the baby boomers set a poor example in many cases for the current generation. Unwilling to tolerate unexpected dissatisfaction, the broken home became too common, and there became almost unlimited tolerance for man's susceptibility to temptation.

Today's youth seems unable to get through even short periods of unhappiness. Of course, Tiger's transgressions occurred over a longer period of time, not unlike the Spitzer like arrogance we have seen over and over in the political realm. One lesson for the public is not to be fooled by the squeaky clean, carefully cultivated image of those not yet outed. This is true whether the subject is sex, performing enhancing drugs, or addictions. I am not advocating a cynical view about all public personalities, only that I would tend to reserve judgment about those I don't know personally (and that is just about all of them).


On December 28, we bought 100 shares of NVE Corp. (NVEC), a zero buy at 39.62.
On Dec. 29, we bought 100 shares of Wells Fargo Preferred (WPK) at 22.21, for the IRA. We closed out the year by buying 300 shares of Presidential Life (PLFE) at
9.27, even though the Company is in the midst of a wasteful proxy fight with its former, long-time CEO. We are still trying to work out what tweaks to make to our formula (and they may be more than tweaks) once Obama Care passes, which I now put at a 90% chance given the Dems insatiable desire for self destruction.

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