"The most significant threat to our national security is our debt," Admiral Michael Mullen, Chairman, Joint Chiefs of Staff, August 27, 2010

Monday, April 23, 2012

The Greater Fool Theory - Updated

"....there can be little doubt that exceptional low interest rates on ten-year Treasury notes, and hence on home mortgages, have been a major factor in the recent surge of homebuilding and home turnover, and especially in the steep climb in home prices, his prepared testimony went.  "Although a 'bubble' in home prices for the nation as a whole does not appear likely..."

So speaketh the maestro in June 2005.  Even with his crafty wording, the man could not have been more wrong and we illustrate the severity of his error with this recent photo:

The maestro is, of course, Ben Bernanke's predecessor, Alan Greenspan - the one man designated by TheFundamentals as doing more damage in less time to the United States of America than any other human being.  That is, of course, until Alan's boss, Bush II, was replaced by Obama and the maestro himself, was replaced by the current fed chariman, Ben Bernanke.  New fools striving to outdo their predecessors.

We, at TheFundamentals, are unable to describe, much less explain, the human hurbris that overwhelms mere mortals to engage in acts of desperation so great as to displace the fools who previously attained infamous status for their horrible behavior.  And so, Bush and Greenspan, having attainded high fool status now find themselves graciously replaced by bigger fools -- Obama and Bernanke.  Such is life.  This is Ted Kennedy getting bailed out by Bill Clinton getting bailed out by Newt Gingrich getting bailed out by John  Edwards.  There is always a bigger fool waiting to seize his moment in the spotlight and fail spectacularly.  The weakness of men.

Closing comments.  We know that we have taken literary license with the definition of the greater fool theory which is applied to commercial transactions, usually investment situations, to describe the often proven concept that no matter how much one fool pays for something there is always a greater fool to come along and pay even more.   Fortunately those fools tend to only deal with smaller denominations than the fools about whom we write today.  For those who truly like to distill to the basics, all of our essays revolve around the predictable and constantly repeatable acts of human beings described by these terms -- greed, pride, sloth, gluttony, lust, envy and wrath.  To which we would add an eighth that could not have been known in the good old days -- the ability to distract and deceive entire populations, by the millions, through the simple act of twisting some facts and ignoring many others.  We have chosen to describe this latter act by a simple description of its major perpetrators -- Hollywood media.  

The greater fool theory is alive and well in the 21st century.  Only discipline and constant awareness and focus on fundamentals can offset the foolish behavior of men embracing their ever present tendencies toward lust, envy, pride, greed, sloth, wrath, gluttony and mass deception.  Seven years ago, Greenspan, from his very lofty perch, mislead millions and said not to worry about rising housing prices -- no big deal.  Today, Bernanke, from his lofty perch, says not to worry about rising food, gasoline, transportation, medical, government and all the other price increases -- not to worry, there is no inflation.  Who comes next and what message will they send to the Hollywood media to convey as they destroy America while lining their pockets?


Wednesday, April 18, 2012

Hollywood Media Expose - The Comcast Monopoly

Let’s set the scene as follows: anyone of us enters the supermarket; we look at our “shopping list” which contains the following items – bread, milk, lettuce, yogurt and baby food.  Up and down the aisles we go accumulating our items and we see a deal on soda pop and grab some unauthorized cookies and head to the checkout counter.  The conveyor belt whisks them past the scanner; we’re ready to pay the $18.56 and the checkout clerk hands us a list of approved “food packages” and, based on our selections, we must buy the preferred package which includes 22 other items at a total cost of $95.41.

What just happened?  Well, it’s the pay for TV signal/programs approach to market selection applied to the local grocery store.  We tried to buy the items on our list; those items we choose but we were informed, rather rudely, that we can get what we want as long as we also buy the things that they insist we buy.  Actually we have no choice – we either take their package or we go without. 

Who would possibly build a business based on a business model that would follow this script?  Well, besides the government that makes you buy things you may neither need nor want – GSA outings in Las Vegas; lengthy wars in Iraq and Afghanistan; thousands of secret service personnel checking out the security risks in distant nightclubs and hotels and the largest number of overpaid, over benefited, over pensioned bureaucrats in the entire history of the world -- only the Hollywood media could develop a script like this and jam it down our throats.  Only the Hollywood media could demand, with the assistance of government at all levels – your town, your village, your city, your county, your state, and your country, that to get out of their store you buy their package to get what you want.  Can they do this on their own?  Of course not.  They buy off the governments at all levels and then they can get away with it legally.  Who is this outfit of which we speak?  The number one Hollywood media player of all time –

Brought to you by your local, state and federal politicians and bureaucrats – you know the ones you vote for and hire to look out for you.  They even make you pay to get the over the air channels that exist in the sky over your home.  And they run the business according to their rules; their concept of “service” levels; their fee schedule; their equipment charges and they can increase the fees and charges whenever they choose and they choose to do so at will.

If you cannot imagine the scene above, going into a grocery store and being forced, compelled to buy that which you neither need nor want; you must live somewhere else because many American homes are wired to COMCAST* and they make you buy things you never see; never watch; never even have a particle of interest in.  And, guess what?  Those things you pay Comcast for?  They are mostly advertising sponsored programs so you get to pay Comcast for it once and you get to pay for the advertised products twice and, we have this tinkling, inkling that you also get to pay a little premium on the top to the governments that make this Comcast cabal possible.  Just check your bill.

Here is a Wikipedia quote pertinent to this topic – “Comcast spends millions of dollars annually on government relationships. Comcast employs the spouses, sons and daughters of mayors, councilmen, commissioners, and other officials to assure its continued preferred market allocations.
Comcast occasionally lobbies against "a la carte” bills that would give consumers the option to purchase individual channels rather than a broad tier of programming.”

There is a simple solution to this situation.  It does involve government actually working for you.  Here is how it would work.  The signal coming into your home, whether it is for TV programming or Internet or music or late night risqué theatrical performances – is a utility.  Delivered and controlled as a utility monopoly; just as is the natural gas and electricity you now receive.  The programming, not the signal that carries it which we are saying should be a regulated utility, is wide open – the choices are limited only by the signal capacity which you purchase as a utility and your ability to watch/listen and pay.  You pay for what you select to watch or listen to.  The technology exists to manage this system.

Comcast is a monopoly that only exists because of the corrupt arrangements it has created with the government officials you elect to look out for you.  If we’ve said it once we’ve implied it a hundred times – monopolies are bureaucracies and bureaucracies are monopolies. They are inefficient and they are very costly.  You get to deal with two of the biggest ever – the US government and Comcast.   Your state and local governments are running strong third and fourth positions.  You can write them and ask for relief.  That will not work.  You need to stop funding bureaucracies and monopolies regardless of what package deal they are selling.

* Don’t be fooled by the name change to Xfinity.  It is their weak attempt to discard a name infamous for horrible service and outrageous pricing.

Monday, April 16, 2012

The Content of Their Character

The title to today’s essay is taken from a speech given by Martin Luther King Jr. on the occasion of speaking to the future when people were judged not by their skin color but by the content of their character. 

"I have a dream that my four little children will one day live in a nation
where they will not be judged by the color of their skin,
but by the content of their character."
– Martin Luther King, I Have a Dream Quote

You can buy a copy of the speech for $10 at:  http://www.mlkonline.net/dream.html

We are going to use the meaning of this expression - content of their character and look at a situation that recently received some notoriety.  It all started when one of those endless, political hanger-onners, this time one from the church of Obama, said something really dumb and thoughtless about Mitt Romney’s wife, Ann.  The gist of it was that Ann never worked a day in her life because she was a housewife or words to that effect.

We have no interest in identifying the foolish woman who made this thoughtless comment.  We were much more intrigued about the reaction to the comment.  In particular the reaction coming from PBS and its learned political commentators.  It has two of them – tweedledee- dee and tweedledee- dum.  The former is progressive light (a bone for the republicans) and the latter is progressive heavy (a bone for the democrats.)  This is PBS’s version of balance.  The moderator brought up the “never worked a day in her life” remark.  TWD-dee, the light weight progressive, dismissed it as a comment that no longer was viewed with merit meaning most folks know raising children and maintaining a home for them is a real job.  So, TWD-dee rose above the issue. 

What caught our attention was the reaction of TWD-dum, the spokesperson for the democrat progressive viewpoint.  He addressed the political impact of the remark and in so doing castigated the woman who made the remark because her comment could actually cause voters to leave the democrat progressive candidate, Obama, and vote for Romney.  A pox on her house for possibly moving voters away from the chosen one.  This logic (?) by which a comment is analyzed solely based on its voter impact consequence immediately brought to our mind the MLK Jr. Speech.  Whatever happened to “content of one’s character” we thought.

Apparently if you belong to the church of Obama what matters is not what you say or even do; what matters is will what you say or do cause a vote(s) to come to or stay with the chosen one or will it cause a vote(s) to stay with the other guy or, horrors of all horrors, move away from the chosen one.  Just follow this logic because it says more about the content of the character of Obama and his minions than listening to them or even trying to understand them

If you say something that could damage their vote count, regardless of its veracity or falseness, it is bad.  That was TWD-dums point the other night.  Simple logic tells us that the other side of that coin then is also true.  If you say something that could benefit their vote count, regardless of its veracity or falseness, it is good.  Which means “content of character” is meaningless.  It doesn’t matter whether what you say or do is right, wrong or just more of the same.  If it gets or keeps a vote it is good.  If it does not get or keep a vote it is bad.

What TWD-dum didn’t realize in his glibness about the silly woman’s comment is that he was going to give the viewers a much greater insight in the democrat/progressive motivation than the topic at hand.

It all comes down to votes.  And now you know why Obama has bought more votes with borrowed and printed money than any president ever and if you give him your vote in November you will guarantee that he and his church will buy more votes in eight years than every president and congress has bought in total since the July 4, 1776 Declaration of Independence.

The result is incalculable damage and it is brought to you by people with no principles; no “content to their character” and absolutely no basic fundamentals other than vote buying with money borrowed and printed in your name.   These people have no financial comprehension or concern (e.g. live within your means, repay debt and balance the budget) – not for today and certainly not for tomorrow.  The content of their character is corrupt to the core.   And the tweedledee-dee’s and tweedledee-dum’s give daily witness to the corruption.

Wednesday, April 11, 2012

Amazing Men

This guy is amazing.  He is the Republican governor of an overwhelming Democrat state.  New Jersey is a union dominated, high tax and high government employment/high salaried/high pensioned state.  And it is, or was, in financial trouble.   The new governor, following a disastrous term by a high priest of the church of Obama who is now in a state of professional and personal disrepute, is enjoying a high “popularity poll” rating even though he has tackled all of the consequential financial and fiscal problems that flow from that devastating combination of Democrat/government interference in everything personal and commercial; their constant support of unions and other special interest groups doing their best to advance personal agendas at the expense of community agendas;  and their insistence on legal protections for large protected classes of voting groups who claim all forms of victim status in order to get special treatment.

Chris Christie has tackled that mess and is moving New Jersey back to a community of work; of self responsibility; of government performance and limitations and reasonable taxation policies.   He is doing that in a Democrat stronghold and the voters of New Jersey like him and his results.

Here is what Governor Christie said yesterday:

“When the American people no longer believe that this is a place where only their willingness to work hard and to act with honor and integrity and ingenuity determines their success in life, then we’ll have a bunch of people sitting on a couch waiting for their next government check,” Christie said.

And if that’s not enough direct speak for all of us, here is a bit more of his remarks:

“It’s because government’s now telling them. stop dreaming, stop striving, we’ll take care of you.  We’re turning into a paternalistic entitlement society.  That will not just bankrupt us financially, it will bankrupt us morally,” Christie told Bush, Henry Kissinger and an assortment of Republican governors in a theater at the New York Historical Society.

Government, government, government.  Promises, promises, promises.  It is a story of the ages – slicksters selling snake oil to a gullible gang hoping for something for nothing.

It has never worked and it never will.  But that fundamental is not enough to put an end to it.  Some people just need to learn the hard way.  Obama was their savoir; they signed up for membership in his church and they still see an easy way to success and prosperity. 

If Chris Christie can get that New Jersey gang to get back to work, there is hope for the rest of us.  He is an amazing man.

Speaking of amazing men, we would also like to extend congratulations to a humble man who has a self developed skill many aspire to but few attain.  Gerry Lester “Bubba” Watson, Jr. stands 6’ 3” tall; weighs 180 pounds and can routinely hit the golf ball down the center of the fairway 315 yards.  He can hit it a lot further when so inclined.  He is a proud Georgia Bulldog and he now wears one of golf’s most prestigious honors – the green jacket that goes with winning Augusta National’s Masters Invitational Tournament.   In case you didn’t see it, and that would place you in a small fraction of Americans, many of his fellow competitors stuck around to see him win a sudden death playoff so that they could congratulate this amazing young man who credits his Mom and Dad for his values.  Following the tournament win, Watson said, "I'd like to first thank Jesus Christ, my Lord and Savior".

With amazing men like this, there is great hope for America. 

Monday, April 9, 2012

The Competitive World: A Parable

Why didn’t the New York Yankees win the 2011 world series of baseball?

They have the “best” lineup.  “Best” pitchers.  And they pay more to their players than any other team to keep them on their team and motivated to win (see: http://content.usatoday.com/sportsdata/baseball/mlb/salaries/team/2011 .)  They are numero uno in the minds of their fans and in the minds of most of their competition.  They most certainly are numero uno in their own minds. *

So, why didn’t they win the 2011 World Series?

Answer:  because they didn’t play in it.  They were beaten before the series even began.   Beaten by a team that didn’t make it either.  In other words, the “best” team in baseball turned out to be anything but the best team in the one place where it counts – on the field, competing head to head with the other teams.  They got beat.  In order to win the World Series, at the end of the baseball season, a team must win 11 games.  11 out of 17. That’s a fact and the Yankees won 2.

Now we could do all that nonsense that goes on forever in the sports pages and in barrooms across the land; on the TV and radio talk shows and even in many living rooms or at dining room tables – Monday morning analysis of what happened and why.  But we think it is boring.  Instead we think it is sensible to state the obvious –

"Just because you are paid a lot and you have a lot of history and mythological lore behind your claims and expectations, don’t think for a minute that it means a thing when you go head to head with competitors who are focused on two things – one, winning and, two, beating you."

And now, we, of course, are moving away from our baseball analogy/parable and are moving toward our American example.  Is America the richest country in the world?  Best paid?  Most of most everything?  Well, the answer really comes down to what you are looking at.  The statistics will still place America at the top spot in many measurement categories but the statistics will also place America well down the listing in many others and, in the one grouping of statistics that do matter but are regularly avoided or just ignored by those with the large megaphones – politicians, bureaucrats and Hollywood media outfits, the negative statistics, America has leading positions in most categories.

Debt.  Top of the list.  Deficits.  Top of the list.  Societal costs (i.e. what we pay for needed public services such as health care and education and military and most government services.)   Top of the list.  America pays much more for much less in both health care and education.  Ditto for military and ditto for government period.  Our societal costs per capita for health care, education and social security and environmental services and army, navy, air force activities and even such things as border control and drug enforcement and prison/jail upkeep costs lead the world.  In all categories we are the leading spender in the world.  Diplomatic costs around the world – America is number one.  In any so-called “public service” activity we spend more than anyone else even though we are not the largest country by many measurement metrics.

And the countries that are now challenging our economic statistics which have always placed us at the top of most lists are not engaging in challenging America’s top spending spots at all.  They are content to self engage; self improve and self focus. 

There is a great saying – never interfere when your enemy is self destructing.  Substitute the word “competitor” for “enemy” and you will grasp the meaning of this essay.  Or, to look at it another way, take this expression:  Know thyself.  You see, even in geo politics; even in geo economics; even in baseball, it still comes down to the fundamentals.  You just cannot spend your way to much of anything in this world.  You can, however, work your way to almost anything in this world.  So, when you measure trends and even results; measure the activities that consider work, productivity and output and compare those to your competition and then adjust and set policy and make needed changes.  All the other stuff is mythology and window dressing.

Wake up America.  Get off you fat behind and get to work.  You are not playing a game and you most certainly are not competing in the World Series.

* So, what is the payroll of the team that won the 2011 World Series, the St. Louis Cardinals, you may ask?  About one-half that of the Yankees.  Team they played?  Texas Rangers?  Even less.  Check out the link above and see for yourself.

    Wednesday, April 4, 2012

    The Buffett Hypocrisy

    Warren Buffett is the head of Berkshire Hathaway, a very successful investment firm that owns huge positions in such well established American owned businesses as:

    ·         Coca Cola
    ·         Geico insurance
    ·         BNSF railroad
    ·         IBM
    ·         Goldman sachs
    ·         Bank of America
    Here is a link to a full list of their owned/invested companies --  http://www.berkshirehathaway.com/subs/sublinks.html 

    His net worth is estimated by Forbes magazine at $40 billion, give or take.   Warren’s voice is an outspoken supporter of president Obama’s policies and he is the frequently quoted, by the president, proponent of making certain that he and his other well to do American taxpayers pay their fair share which means a percentage rate equal to at least what other less fortunate Americans are paying.  He often cites the example that his tax rate is 15% or so which is less that the tax rate being paid by his secretary, Debbie Bosanek.  This Warrenism has now come to be known as “the Buffett rule.”  That’s a quick summary of Warren’s public position on taxation and it is a quick summary of Obama’s use of Warren’s position to increase taxes on some of the very well to do.

    For now, let’s leave the issue of why Warren pays a lower tax rate other than to say it has to do with the capital gains tax rate set lower than earned income tax rates on the economic theory that lower capital gains tax rates encourage business formations and other forms of risk taking which create jobs and promote economic growth.

    Now Warren also has another public position that is not as well known and most certainly not as well cited by either Warren or his buddy in the white house.  This position has to do with what happens to Warren’s money when he dies. Warren does not want his fortune, much of which was earned here in the United States, to go to the United States government when he leaves Omaha permanently.  He wants it to go to a foundation so that it can be spent on the foundations works of charity and public good.  And when you ask Warren why he would rather get his money to a foundation rather than the gang in Washington DC who most certainly could use his $40+ billion for one of their several worthwhile public good causes, Warren will tell you that he concludes that the foundation will do a better job of spending it and achieving their good purposes and ends than will the gang in Washington DC.

    Hmmnn.  Gets one to thinking doesn’t it?  We, at TheFundamentals, think it brings up two very interesting points.

    1.    Warren knows that the well to do in the US are already paying much of the federal tax bill.  It works out to something like the top 10% earners pay about 70% of the collected federal taxes (please go to http://www.heritage.org/budgetchartbook/top10-percent-income-earners .)  So Warren has no problem with them picking up even more of the tab; say, 80 or even 90%.  Now why could that be?  We will come back to that question.

    2.    Next, if Warren concludes, as he states, that his money can be put to better use after he is gone by giving it to a foundation then why wouldn’t Warren conclude about the same for everyone’s money which is mostly money coming from the well to do?  Sure, we know, Warren would say something like, “well, there are just some things they (government) have to do even if they don’t do them all so well.”  Okay, we agree but Warren is not saying much about the massive amounts of money they are spending which they don’t have and we doubt very much that Warren follows that form of financial irresponsibility (TheFundamentals calls this behavior “fiscal promiscuity) in his own life or in his business life.  What could be going on, we ask?

    Here’s the part that Warren doesn’t mention.  His businesses are the great beneficiaries of the government borrowing and largesse (ditto for GE, Wall Street, Banks, Auto’s and Pharmaceuticals to name a few.)  Directly and indirectly, he earns a great deal of money through Berkshire Hathaway because of the federal government’s massive deficit spending.  And Warren is not about to point that out.  Neither is Obama nor the Hollywood media.  Better to just say, raise my tax rate and I will pay more and not add:  “because I am making a pile of money off the government deficits and the debt.”  And we think that is hypocritical as is Warren’s use of federal tax law to have his attorneys take his dough when he is gone and make sure the government of the United States cannot get their hands on it.

    So we all know the so-called Buffett rule – well to do pay at least the same rate as the not so well to do.  But now we also know about the real situation – the Buffett hypocrisy.  Pay a little more because you make a lot more when the federal government wastes money all over the place but then make darn sure the federal government doesn’t get their wasteful hands on your dough after you’re dead. 

    Monday, April 2, 2012

    April Fools, the Chicago Way

     A brief quote from an article appearing in the Chicago Sun Times yesterday, April 1, 2012 follows:
     “At first blush, a pension bill adopted by the General Assembly in 2007 seemed to have a laudable goal: extending retirement benefits to local police force employees’ widows after they remarried.
    But buried within the legislation was something considerably less altruistic: a provision that enabled a member of one of Chicago’s better-known political families to boost his pension by more than $30,000 a year — while saddling unsuspecting taxpayers in Oak Brook with nearly $750,000 in funding liabilities, the Chicago Sun-Times and Better Government Association have learned.”

    So, why does TheFundamentals share this local piece of insight into the Chicago Way you might ask?  Well the answer is surprisingly simple.  There is no form of employment, anywhere – where the opportunity for mischief and downright abuse is greater than local, state and federal government employees gaming the system and relying on their connections and “you scratch my back and I will scratch yours” mentality to self enrich.  No where.  And in that universe of personal self dealing and very costly paychecks and benefits and, more than anything, unearned, undeserved but very rich pension programs; there is no place on the face of the earth to better get yours than in the city of Chicago and the state of Illinois.
    This essay is not an April fools day joke, folks.  The Sun Times and the Chicago Tribune have done a good job of trying to let you know just how bad the corruption is in their home town and their home state.  It is the Chicago way and you have given the pure corruption and the unshameful behavior of Chicago politicians an opportunity to now overwhelm the entire country by electing one of their neophyte hack politicians president and turning the US treasury and the federal reserve system over to his Chicago way of thinking and to let his cronies run free in the halls of congress and, in record numbers, in the many growing bureaucracies around the land.  The United States of America is now printing money to finance the nonsense of the self dealing, “where’s mine” mentality of Chicago trained thugs we now call public officials. 

    Now some of you will not agree with the wisdom of our words.  Some of you will choose to not read the article.  So you may miss these gentle words coming out of the mouth of the thug who is the sole beneficiary of the Chicago way deal that is the focus of this Sun Times article.  For those who can’t handle the truth, let’s let the thugs own words display his appreciation for this self serving act on the part of his Chicago way buddies -- “Sharp-tongued and unapologetic about benefiting from the provision that no one else has used, the 59-year-old Sheahan said of his pension: “I worked for 24 f------ years [in the public sector], I deserve every penny of it and I deserve “a lot f------ more.”

    Obama voters, keep this thought in your mind.   This is an April fool’s day joke you brought on yourselves.  You choose it; you actually gave the keys of the US treasury to a bunch of self important, self dealing thugs.  It is a sad but amazingly accurate fact of life that most humans, even us wise and brilliant Americans, will so gladly turn power over to the most abusive people we can find and then sycophantically stay the course we have chosen.
    The jokes on you who voted them in.  And the due bill gets spread around.   The thugs get the money and we all get the bill.  That is the Chicago way.  Enjoy it.