Deja Vue in Spades

Read this article by Robert Fisk. He was in Afghanistan when the Russians were there. The parallels between the Russians' experience of 1980 and ours of the 21st century are mindboggling.

Giving Thanks

Making Sacrifices

That word - sacrifice - is not in the lexicon of the leaders of our auto industry (or that part of the auto industry that needs and wants our help) at least as it applies to their own private finances. The head of Ford made over $21 million last year, the company lost $2.72 billion. The head of GM made over $15 million while GM lost $38.7 billion. Surprisingly, only the CEO of Chrysler, Bob Nardelli of Home Depot notoriety, comes out looking good on this question as Cerberus pays him.

As further evidence of the world in which these guys live, they all went to Washington in their private jets. Talk about being aware of impressions!

Another Step

The Iraqi Parliament has approved the latest version of the agreements to get us out of Iraq. True, approval of the Presidential Council is required. True, there will be a referendum in July of next year. True, the Sunnis' approval is somewhat tentative. But, if all these steps pass and we agree, then the deal is that we will be out of the cities by July 1 and out of the country by NewYear's Day of 2012. In the meantime, the Iraqis will have oversight of our troops. Whether this is the same agreement Bush is prepared to sign is unclear.

Protecting Secrets

For the third week international reporters are prohibited from entering Gaza; the Israeli government says it's too dangerous for the reporters. Apparently, Israeli reporters are more wimpy than international ones as they have been barred from Gaza for two years. Yet, the Israeli government claims that they honor and respect freedom of the press. Right!

So Far, So Good

They may not be the new, untested people some might have expected from Obama's mantra of change. But his economic team certainly looks like a very strong and capable team. His decision to create an Economic Recovery Advisory Board, led by Paul Volcker, was the capstone of a week that gave us some insight into what the new government might do. And it looks like it may do quite well indeed. Of course, how many of us will be around when it gets done is a big question. We are in very deep watwer.

A Girl Has to Eat

Hilltop Steak House is a landmark restaurant in the Greater Boston area. It's not the best restaurant, but it has always been able to keep many customers happy; at one time it was considered to be the top-grossing privately owned restaurant in the country with sales of $26,000,000+.

As part of the deal the founder made when he sold out in 1988, he and his guests would always be able to get the best service available with minimum waiting time and would eat and drink for free. Well, as it will happen to all of us, the founder died in 2003. His heirs decided to sell the land on which the restaurant sat. The new owners said that this abrogated the "free meal" deal. The widow and her family said it did not and proceeded to sue. The appellate court ruled in the buyer's favor, but in today's litigious times that means little if there are deep enough pockets.

I wonder whether the legal fees will be less or more than the free meals the family has not had over ythe past few years.

Wasserman says it all

Where were they for the past 8 years?

My Congressman, William Delahunt, has an op-ed in today's Boston Globe. He's pushing for congressional approval of the withdrawal agreement with Iraq. Delahunt and our other representatives don't really know what the agreement says unless they can read Arabic as Bush has not released an English language version of the agreement.

I really don't understand why Delahunt is complaining now. Why has he been so silent about the attacks that have been made against our freedoms for the past eight years? This mess is as much the fault of Congress as it is that of the other branches of our government.

Back to the Salt Mines

Travel by air has to be a vision of hell for we sinners. It doesn't matter the airline - you, along with 500 other sinners, are stuffed into what the airline calls a seat, they serve something barely edible, the airline personnel apparently have private incomes as they don't seem overly interested in serving the passenger, they torture you with movies you avoid on the ground. However, it does improve your health, as you usually have to walk a mile or so between gates and alcoholic drinks are free on the plane.

The trip was good, although I was surprised that a sail down the "Beautiful Blue Danube" was, in fact, nowhere near as beautiful or interesting as trips down the Rhine and the Rhone. The image that most struck me did not take place on the river. At a Boston Pops-like concert in Vienna a pretty good soprano performed an Austrian folk song while dressed as a peasant. She sang a story no one in the hall knew. It must have been an odd story as the last few lines were delivered in the same strong voice while she was standing on her head. I've never seen something like that at Symphony Hall in Boston.

Another strong impression - we here in the U.S. are very lucky in an economic sense. Prague apparently does not have enough money to clean the statues on the famed Charles Bridge and at other tourist attractions. I don't think that there are too many countries that display statues so black you would think they had been painted that color instead of having faded with the years. The economic struggle in Budapest and Bratislava was not as evident, but it was still palpable. Things seemed good in Vienna and Salzburg.

I also saw a phenomenon that I had seen only once before. When you drive from Vermont into Canada, the landscape changes almost instantly; within a mile the tall trees are gone, things look darker and drearier. A reverse situation occurs when going from the Czech Republic to Austria. It's really amazing to me. I could understand if the changes took place over a few miles, but it is noticeable almost as soon as you cross the border.

And what can I say about the language? Whether written or spoken it's beyond me. You see a lot of the letters K and Z . We played a game of Scrabble on the boat; aficionados will be surprised to see 2 Ks, Z with a value of 3 and Y 10, and two forms of U, one with a value of 6, the other 1.

Overall, it was a good trip even though we had snow that last two days. Budapest and Vienna are beautiful cities. In Salzburg we ate in a building that was a monastery in 803 and had been a restaurant for a couple of hundred years. It was really a vacation from the world. But you never escape reality and still remain what passes for sane.

So, it's back to the real world and renewed contemplation of the catastrophes in which we are embedded.

Arriverdici

We're off to Prague and then will waltz down the Blue Danube. Maybe the world will be a little better off when we get back before Thanksgiving.

What's wrong with this?

Karl Denninger of The Market Ticker has some advice for Mr. Obama:

1. You will send up a bill that enacts a full repeal Gramm-Leach-Bliley. This was the law that repealed the Glass-Steagall act (the majority of it, anyway.)
2. You will send up a bill that reinstates the leverage limit of 12:1 that used to apply to investment banks (the dropping of which is the proximate cause of this mess, and which Henry Paulson was directly responsible for through his lobbying and requests) and apply it to all institutions doing business in The United States.
3. You will send up a bill that repeals the 2005 "Bankruptcy Abuse Prevention" act - an act you voted no on originally. This one should be a no-brainer, since you didn't support it originally.
4. You will send up a bill that repeals the TARP/EESA, and will vow to do everything in your power to stop the expenditure of any further funds under the existing law, and you will direct Treasury on January 20th to reverse the tax changes that granted $150 billion in "preferences" without a vote of Congress or even public notice.
5. You will send up a bill that requires the SEC, OTS, and OCC to compel all assets and liabilities to be consolidated upon a firm's balance sheet and directs that all marking methods, formulas and variables along with each asset held be disclosed accurately for every firm that operates in the United States.
6. You will direct The Federal Reserve by executive order to comply with the FOIA filed by Bloomberg and disclose, immediately and forever into the future, all loans issued, to whom, the specifics of the collateral pledged, and the discount or "haircut" applied. Such information will be published via The Web at the point of issuance of Fed Credit and all actions taken by The Federal Reserve or any of its district banks shall be undertaken in the full sunshine of the public view. If The Fed should refuse, you will pledge to send up to Congress a bill to repeal The Federal Reserve Act of 1913, and replace The Federal Reserve system entirely with an entity that will under penalty of federal law operate 100% "in the sunshine."

Denninger argues that we have to accept reality and live within our means. He can go off the deep end but he's right on with this article.

Tempest in a Teapot?

Or something more serious? Over the past year or so the Wall Street Journal has been writing about executives who have falsified their academic credentials. Today alone there are three separate articles. Most of the boastful executives claim that they have graduated from college. However, the liars only attended a particular college, they did not graduate. What does this say about them and about us?

The claimants have obviously lied about what they and our world consider an important matter. Is the lying brought about by insecurities?

One thing it says about us is that we value formal credentials too much. The assumption by most large organizations is that a college graduate has more to offer than the man on the street. In many cases this is true. But, I'm sure that you've met many people about whom you've wondered how they ever got out of high school, let alone college. You've also met many graduates of top colleges who should be working in a menial job, not pulling down bug bucks simply because he went to Harvard.

Evaluating a job applicant for what she or he can do is not easy. But to rely too much on what one sees on a resume is asking for trouble.

There will only be bank holding companies

CIT is the latest to apply to change its status to that of a bank holding company.

Now it's GE

You, in the person of the FDIC, have just provided insurance for $139 billion of GE's debt. Who has insured your debt?

Germany says no to GM

Why can't we? Opel, a branch of GM, asked Chancellor Merkel to push the European Investment Bank for a loan of $51 billion to German car makers. Plus they wanted government to offer car loans and buy old cars. It does not look like Merkel will do much for Opel.

Nobel Economists Speak....

for what it's worth. Der Spiegel asked five Nobel economists - Edmund Phelps, Robert Lucas, Reinhard Selten, Joseph Stiglitz and Paul Samuelson - to speak on the current situation. All argue for change, as if you didn't know. Most say better regulation is needed. Stiglitz emphasizes our global interconnectedness. Phelps wants to return to a day when banks invested in businesses.

The Old Ways Are Dead

Tim Duy takes Paulson to task for claiming things won't really get better until housing perks up. Duy argues that the economy based on continually increasing consumer spending has been shown to be a dead end. In his view, reducing mortgage payments will only work if the mortgagors are, in fact, creditworthy.

Return to growth can only come to pass with an economy that actually builds things, like infrastructure or invests in things like healthcare and education.

Veterans Day, Armistice Day, Remembrance Day

Whatever you call it, R.J. at Sparrowchat has some comments about the day - and the world - that you should read.

Pelosi and Reid have drunk the Kool-Aid.

Now Pelosi has urged that the upcoming session of the Congress consider bailing out GM and other U.S. auto companies and has directed Mr. Frank to devise the legislation so that it limits executive pay, ensures independent oversight and protects the taxpayer. She does not ask who the executives will be.

She, Reid, Frank and our other leaders should read Paul Ingrassia's Op-ed in yesterday's WSJ. Ingassisa has covered the auto industry for decades and covered it well. He knows where a lot of bodies are buried. He advocates a clean sweep of management plus a revision of union rules. He does not feel that the bailout of GM and co. should be led by the same people who brought it to its current state.