Sunday, March 28, 2010

Mr. Quarter Said US Treasury Credit Would Tank

This was taken from an article in Financial Times published March 26, 2010.

"A sign of the strains across US fixed income markets was this week’s historic rupture between the 10-year Treasury yield and its close derivative, the interest rate swap.

For the first time since swaps emerged in the mid-1980s, the 10-year swap rate traded below that of the 'risk free' 10-year Treasury yield. Analysts say this reflects how government debt issuance has altered the dynamics between 'risk-free' yields and swaps, which reflect borrowing costs for non-sovereign borrowers."

Trading below the "risk free" 10-year Treasury yield means that the market sees the interest rate swap as less risky than a 10-year US Treasury Bond!

Friday, March 26, 2010

Mr. Quarter Told You So......

The following article was posted at the Yahoo! Finance page today:

The Associated Press, On Thursday March 25, 2010, 5:12 pm EDT
WEAK DEMAND: Interest rates climbed in the bond market Thursday after a government debt auction drew tepid demand. Auctions Tuesday and Wednesday also saw lower demand.

NOT THAT INTERESTED: The auction of $32 billion in seven-year notes saw demand fall from the past two months. That means the government could have to start offering higher interest rates to attract buyers.

BERNANKE SAYS: Testimony from Federal Reserve Chairman Ben Bernanke affirmed the government's pledge to keep interest rates near zero for an extended period.

Thursday, March 25, 2010

Mr. Quarter on Riding the Rim of the Bowl

A curious and little noticed thing happened the other day during the Obamacare fiasco. Berkshire Hathaway sold corporate bonds with a lower interest rate than US Treasury bonds commanded at auction in the same period. What, you may ask, has that to do with anything that concerns me? Simple. The market has determined that Berkshire Hathaway is a better credit risk than the United States.

During the Obamacare debate, the Democrats touted the Congressional Budget Office scoring of their bill as “bending the cost curve down” with an ultimate savings of $138 billion over 10 years. Unfortunately, the CBO is required by law to score legislation using assumptions, no matter how ridiculous or unrealistic, dictated for that bill by the Congress (led and dominated by Democrats). The method used in scoring the Obamacare bill double counts Social Security payroll taxes, long-term care premiums, and Medicare savings. Consequently, independent auditors, including a former director of the CBO, have estimated that the real 10-year cost of Obamacare is deficit spending to the tune of $580 billion to $618 billion – depending on whose estimate you accept. Apparently the bond markets have taken notice of this discrepancy and are pricing US Treasury debt accordingly.

The 2010 budget includes a deficit of $1.6 trillion which must be financed by selling US Treasury bonds. In addition to that, approximately $2 trillion of US Treasury bonds will mature this year and must be refinanced or paid. Assuming that it is refinanced with the sale of more US Treasury bonds, a total of $3.6 trillion in US deficit must be financed in 2010. Our largest foreign creditors China, Japan Britain, the Gulf States are likely becoming more and more reluctant to increase their Treasury holdings given our almost insatiable need to finance the business of the US government with debt.

Economists often speak of national debt at 90% of GDP as a “tipping point” signaling that a country is approaching default and will shortly be unable to repay all that is owed. Prior to the TARP bailout, total debt owed by the US government was approximately 70% of GDP. After TARP it is close to 90%. US debt is projected at $19 trillion by 2015 (that is in 5 years folks). Rounding generously upward, the GDP for the US in 2009 is estimated at $14.5 trillion. Allowing for 3% annual economic growth for the next 5 years, GDP in 2015 can be projected at $17.3 trillion. That means that projected US debt in 2015 will be on the order of 110% of GDP. Try getting bidders for US Treasury bonds at desirable rates with that condition in place.

What happens if no one will bid at the desired rates? The Federal Reserve can monetize the debt, as it has been doing for the past year, and step in as the "lender of last resort” buying US Treasury bonds. That’s right, the Fed makes an accounting entry paying out (i.e., creating) billions or trillions of dollars and takes an equivalent value in US Treasury bonds onto its balance sheet. That is, the Fed will be printing money to pay our bills. Creating money out of the thin air inflates the value of goods and services relative to the value of the money paid for them. Concurrently, the US Treasury will have to offer higher and higher interest rates to attract investors to purchase its debt. A vicious spiral downward into oblivion.

Tuesday, March 23, 2010

The Deuce and the Matrix

Looking back, it's hard to pinpoint just one moment or event that forced me to swallow the red pill and finally see the world for what it really is. Like most everyone else, I had no Morpheus to lay it all out for me. I had to figure things out for myself.

Maybe it was when my dad went off to Vietnam in 1968, and while he dodged VC rockets that rained down on Da Nang, I watched long-haired dope smoking dirty college kids around the country rioting to stop the "criminal war." In my then eleven year old mind I wondered what was "criminal" about trying to prevent the communist North from invading the democratic South. While one could then argue about just how democratic the South was, there was no question about how communist the North was. The South had freedom in all its messy chaotic goodness; the North was enslaved in its communist straight jacket. What was good and what was evil was pretty clear in my young mind. But I wasn't then subject to the draft. We lost the war and South Vietnam fell into the pit of communism because young American men saw no good reason to risk their lives in jungles on the other side of the world for the benefit of an alien people. I think they had a point.

Red Pill Lesson: sometimes it sucks to be the other guy. Do what you can to make sure you're never the other guy.

Maybe my Red Pill moment was the race riots in L.A., Detroit and Newark. I was still a kid and I couldn't figure out why people would loot and burn their own neighborhoods. Racial prejudice may have been the most obvious cause of the riots, but there were other forces at work. Drugs; a festering welfare state that robbed men of their roles as husbands and fathers; a people who didn't feel like they were a part of America.

Red Pill Lesson: rage doesn't give a shit about logic.

I'm sure the late '70s had a few Red Pill moments. Besides the economic "malaise" the then president Jimmy Carter so famously described, it was the Iranian hostage crisis that defined the time. Iranian militants overran the American embassy and took the staff hostage. They held them for over 400 days and our attempt to rescue them disintegrated at Desert One when a helicopter collided with a C-130 transport plane during a sandstorm. America seemed helpless. When a newly elected president, Ronald Reagan, made it clear that there would be hell to pay if Iran still held the hostages when he took office, the hostages were released at the very moment Reagan was being inaugurated.

Red Pill Lesson: act like a pussy and you're going to be treated like one.

There are lots of more personal Red Pill moments that most people experience. A friend stabs you in the back; a girlfriend cheats on you; you're blamed for someone else's transgression; a person you trust betrays you.

Red Pill Lessons: people are deeply flawed and do what they perceive is in their best interests, you're interests be damned. Be very careful who, and what, you place your trust in.

In the Matrix movies, the Machines grow human beings like a crop, keeping them warm, fed and asleep, entertained with dreams that pass for reality, all the while using them for the electricity their bodies produce. Humanity is a resource, nothing more.

Yesterday, March 23, 2010, the Machine that we know as Communism passed into law the so called Health Care Reform Bill. It forces people, mostly the young and healthy, to purchase health insurance so that the risk pool is big enough to cover the poor who will have their insurance paid by the government, that is, paid by the premiums the young and healthy pay. This is the forced redistribution of wealth, also known as Marxism. Never has the government mandated that citizens purchase anything from private businesses or face fines and possible imprisonment. The law also forces small businesses to purchase health insurance for their employees. No business owner really owns their business any more...the government dictates how you will run your business and what benefits you will provide your employees. This is known as fascism. Also, no health insurance company can reject an application for coverage due to a pre-existing condition. This will drive insurance premiums through the roof as insurance companies struggle to cover this new risk foisted on them. As premiums sky rocket, more and more people and businesses will cry foul, and then the Machine can come to the rescue by instituting a single payer plan, the government, and private health insurance companies will disappear as their premiums are undercut by a wholly taxpayer subsidized "public option plan." The Machine's takeover of America's health care system will be complete. Most everyone will be covered, but by a health care system gutted by costs, bureaucracy, shortages of health care providers and the inevitable rationing of health care. Think the disastrous systems in Britain, Canada and Cuba.

Why? Because it's not about providing health insurance to people too poor to buy it. It's about control. When the Machine controls health care, it controls EVERYTHING. It will decide who gets treatment, what kind of treatment and for how long. The Machine will have your life in its hands. Control. Better do what they say or else find yourself denied treatment. Don't like amnesty for illegal aliens? Better stay silent. Think Cap and Trade is a mistake? Better learn to embrace it. Think schools are little more than communist indoctrination camps? Keep your mouth shut.

Red Pill Lesson: there are a lot of people out there who crave power and will do ANYTHING to get it.

Are you willing to be nothing but a resource for the Machine? Are you willing to be kept warm and fed and entertained by living in a dream world? Are you willing to be enslaved because it's just easier?

Now the questions are, how many Americans received their Red Pill moment yesterday, and how many are ready to fight?

Red Pill Lesson: sometimes, you've got to fight, no matter what.

Monday, March 22, 2010

Mr. Quarter on the Dark Days Ahead

Despite the shouted warnings from conservatives and utter lack of interest in his background by the liberal main stream media, in November 2008 American elected a socialist as president. Last night, we were treated to the spectacle of the first steps in transforming America into a socialist country. If there are any remaining doubts about the future course of health care in America – or America itself for that matter, they should be dispelled now. Immediately, health insurance companies will be forced to accept any application for insurance and the premium that they charge for accepting that risk will be controlled by Washington. They will cease to be insurers that evaluate and price risk by actuarial formula; what were once private companies will now be organs of the federal government. They will lose money and go out of business, but only after a wave of consolidations of the smaller insurance companies as the industry tries to avoid the inevitable – bankruptcy. But long before that happens, the government will move from subsidizer to provider of health care. As the leaders of the Democrat party have openly said, this bill is only the first step. They mean a first step down the legislative road to complete socialization of health care. This legislation will drive the insurers out of business.

The size and scope of government over private citizens grew by an order-of-magnitude last night. Be prepared for an army of new federal bureaucrats scrutinizing your finances to verify compliance with this new law. The projection is that there will be 17,000 new IRS employees alone required to verify whether you have insurance, whether it is the right kind of insurance, and whether or not you or your employer will be fined. That is right. You will be compelled to purchase insurance or you will pay enough to ensure that someone else can buy subsidized insurance at your expense. And the growth of the size and scope of government intrusion into the private lives of the citizenry will increase as more and more of those bureaucrats in the 161 separate agencies and commissions, contemplated by the bill that was passed, come on line.

The bill passed last night purports to save $520 billion from the Medicare program by eliminating waste and fraud over 10 years. In fact, the Obama Administration is so optimistic that they actually believe that this savings can be accomplished by legislative action in 2010, and then realize an additional $287 billion over the following 10 years! The 2010 budget has set Medicare outlays at $510 billion. Their claim then is that Medicare is actually going to be a money making proposition by $10 billion in 2010! Assuming for the moment that this fiction is true, how many seniors are there in America that are actually willing to bet their health care on the ability of the Federal government to achieve savings by eliminating waste and fraud to the tune of the entire Medicare expenditure for 2010?

How many health care providers are willing to take a cut in pay or reduce their profits because government will now have the ability to tell them what they can charge for services? Some, perhaps, for a short period. But, if we are to believe the hype of the Democrats, this same health care system will now have to accommodate 30 million additional customers, and those customers will be using a government mandated insurance system that sets payment rates. As for-profit medicine declines into extinction, who will step in to fill the gap? More and more of those government solutions, that is who.

This is the single worst piece of legislation ever passed into law by the US Congress, and yesterday was the beginning of dark days for America. The cost of this bill is appalling, at a time when the United States Treasury is monetizing its debt and its credit rating is on the verge of being downgraded. It will bankrupt America – and quickly. The transformation of America to a socialist system was begun last night and it has to be stopped. It was done in the face of unanimous opposition from the Republicans, opposition by a 70% or greater majority of ordinary Americans, the elimination by election of the filibuster-proof majority in the Senate, with outright deceit, with blatant backroom deal-making, and outright corruption in plain view for all to see. I for one am declaring war. I am pissed off and I am not taking it anymore. Liberal Democrats do not represent the mainstream of American thinking and do not feel any obligation or allegiance to the Constitution of the United States. No less than the very survival of this country is at stake. They must to be voted out of office as soon as possible and this legislation must be repealed.

As for Mr. Quarter, I am going to amplify my political efforts and do everything that I can here in Pennsylvania to make sure that my Congressman Joe Sestak and Senator Arlen Specter never see the inside of the capital building after November 2010. I will do the same to make sure that Senator Robert Casey never serves more than a single term. These guys have all voted in complete opposition to the expressed wishes of the electorate of the State of Pennsylvania and they all deserve to be given the heave-ho!

Wednesday, March 17, 2010

The Deuce Says, "You might be a moron if..."

Jeff Foxworthy has sold more comedy albums than anyone in history. Foxworthy, famous for his Blue Collar Comedy Tour, first gained fame with his patented "You might be a redneck if..." routine.

In that spirit, I give you, "You might be a moron if... voted for Obama. I mean, come on! Stevie Wonder could see this disaster coming. Here's a hint; when the New York Times, Hollywood, Oprah and every freak show special interest group supports a politician, vote the other way. Anyone who lives in a fantasy world can not be relied on to grasp reality. believe "hate speech" should be outlawed. To the PC crowd, any speech they don't like is hate speech...normal people call this disagreeing. Shout me down and I'll beat you down. Just keeping it real baby! ( see previous blog, The Deuce and the RNC ). believe driving a hybrid makes you a better human being, deserving of special perks and the undying respect of the unwashed masses, because your car uses a little less gas than a regular car. Have you asked yourself how much coal gets burned in your local power plant to supply you with the extra electricity it takes to charge the battery in your expensive electric roller skate every day? Mmmmm? I didn't think so. believe a vegan diet is better for the Earth and pleasing to Gaea the Earth Mother. First of all, a vegan diet without nutritional supplements is also known as slow starvation, so if your ultimate short-term goal is to become compost, you're on the right track. Congrats! Secondly, those kinda sharp teeth you've got in the front of your mouth are called canines and incisors...they're for ripping and tearing...wait for it...MEAT! Since you believe in evolution, how is it possible that you evolved teeth for eating meat, when Gaea demands that you only eat weeds? Well, that's a real mystery, huh? Slurp down some more tofu and consider that. believe scientists are special people, and wouldn't dare lie to you. Scientists are just people, subject to all the flaws and foibles any human is subject to. All scientists depend upon funding to continue their research. The majority of this funding comes from the American tax payer...meaning the federal government, and to continue to be funded they had better produce research that supports government policies, else the funding dry up. Yes, even scientists are subject to the whims of filthy lucre! Scientists are also as guilty of pride as the rest of us. They hate it when their pet theory is disproved, as it damages their reputation. Special people aren't found in's an individual thing. The recent climategate scandal is a terrific example. Here, you have scientists manipulating data to support their theories; hiding raw data to prevent peer review; black balling dissenting scientists, trying to prevent their own studies from being published in scientific journals; conspiring to prevent their collusion from becoming public. Is this climate research or Desperate Housewives? As I said in a previous post, EVERYONE has an agenda! Your first agenda should always be the TRUTH. believe every American loves America. There are millions of Americans who think America is a racist, imperialistic, sexist, homophobic, puritanical, patriarchal nation bent on exalting old white men while "keeping down" the colored man, the woman and the poor. As a white, heterosexual, Christian man, I have to say Hell Yeah! We rule! No, I'm just kidding. Those that want to tear down the America that currently exists and remake it into a nation where everybody is the same are dreaming. The same income, same house, same education, same everything? Hey! It ain't never gonna happen! We all may be created equal, and as such equal under the law, but that's where equality ends. In every other aspect we all differ. Different talents, different flaws, different personalities, different work ethics and even different luck. We'll never all be the same, and trying to make us so is destructive, demoralizing, wasteful and just plain stupid...and boring too.

If you've discovered that you're a moron, I have good news. YOU DON'T HAVE TO STAY A MORON! Find someone like me and beg to hang out. We'll rock your world!

Tuesday, March 9, 2010

The Deuce and Progressives

Progressive drive me to a homicidal rage. As much as I try to understand them, it's just not humanly possible, which forces me to conclude that progressives are not really human. They're like reptiles that can talk, if you discount the slithering tongues and hissing. It's not just that I disagree with them, it's that their perspective and arguments are simply INSANE!

Actor and serial moron Sean Penn thinks that American journalists that refer to Venezuelan henchman Hugo Chavez as a dictator should be imprisoned. You gotta love Penn's selective respect for free speech. And as an off-subject aside, isn't Penn the ugliest man still breathing? Hollywood makeup artists use him as a model for what a zombie looks like. Being ugly isn't a prerequisite for being a commie, but it may play a psychological role in making someone a virulent commie, like Penn, or, come to think of it, his fellow Hollywood traveller Jenine Garrafallo, that tattooed blithering idiot that said on Bill Maher's TV show that all the criticism of Obama was due to nothing more than anti-black racism. As if a white communist would be more appealing to middle America.

Here, world renowned genius Elinore Clift displays her superior intellect, claiming Ronald Reagan's avuncular personality, not his fiscal policy, brought America out of Jimmy Carter's recession in the early 80's. Yes sir, nothing like an optimistic geezer to cut double digit inflation and interest rates. One look at Reagan and all those hard-hearted Wall Street sharks and calculating Fed money-changers just dropped to their knees and cried "we bow to your happy happy happiness. Let there be prosperity!"

When your heart isn't really into something, but you need to make people believe it is, what do you do? If you're a smarmy, cowardly progressive politician, you take a class on how to talk tough. Seriously! In the Army we called this "how to sound off as if you had a pair." In the civilian world it's called how to be a gutless poltroon but not sound like one. Progressives are such hapless waifs. Walk down the street with a gun on your hip and a bible in your hand and they'll call out the national guard; slaughter 13 of your fellow soldiers like Major Hassan at Ft. Hood and they'll arrange for a lawyer, a shrink and serious couch time on Oprah, 'cause pre-PTSD is such a bitch!

And finally, some federal judge in New York has determined that ACORN's federal funding must continue, despite the fact that the organization is under indictment for voter registration fraud in several states and was taped on numerous occasions offering advice to an undercover investigator on how to set up a prostitution ring with federal grants.

The judge determined that ACORN was a "federal contractor" and as such there were federal laws dictating certain procedures be followed before funding could be witheld. Contractor? Exactly what product or service does ACORN provide to the federal government? Oh, I know; they keep federal prosecutors busy investigating them; they help the government spend money so the printers at the U.S. Mint stay employed cranking out play money that's not backed by anything of any value; they make sure there are plenty of whores in D.C. to service the whores in Congress; and most importantly, they help Democrats get re-elected.

ACORN isn't a contractor, it's a criminal enterprise that needs to be prosecuted under the RICO statutes...and so should the judge that handed down this abomination of a decision. just gotta hate 'em.

Monday, March 8, 2010

Gettin' Outa Dodge!

By Mr. Quarter

The news day after day is enough to send everyone in America to their doctor begging for anti-depressants. More and more often, a fantasy plays out in my mind’s eye of moving my family to some wilderness area away from television, newspapers and the internet. Tune out and get out. I envision making a home in the midst of defensible terrain, stout enough to repel an attack by roving bands of marauders. Maybe build a wall or moat.

Health care reform. Really? How can it be reform if it is going to cost you, me and everyone else more? I heard a guy being interviewed on the radio this morning, some ordinary Joe Sixpack. His take on health care reform? “Why should I pay more so someone else can have it?” Exactly right.

Basically, 70% of the American people are against the current health care reform that Obama is pushing. Polls show that lots of folks want individual issues of health care and health insurance addressed. But the majority doesn’t like the current bill. So why do Obama and the Democrats keep pushing it? Like Obama said, “That’s what elections are for.”

Debt. Every day the news gets worse. Social Security and Medicare entitlements are out of control and will subordinate to near non-existence any federal discretionary spending within the next 10 years. The rapidly approaching tsunami is the inability of the U.S. Treasury to borrow sufficient money to finance the federal government obligations. The initial warning waves will be insolvency of a number of the individual states – California, New York, New Jersey. Simultaneously or following closely will be insolvency of several major cities. The formula is simple: pay out generous benefits to state and municipal employees under union collective bargaining agreements, tax the citizens until they leave and business until lay off their employees or close. You collect less and pay more. Deficit. No place to turn.

Global warning – climate change. The data never supported the narrative. Now the truth is coming out that the data was in part made up or never existed. But don’t let that stop you, Al. Mr. Gore’s recent NYT opinion begins with a sentence warning of apocalyptic consequences. Shades of Oz - he implores us not to pay any attention to the man behind the curtain. The Cap and Trade nonsense is DOA in congress, but Obama won’t let that stop him. The majority of America won’t stand for it, but Obama won’t let that stop him. So Obama has the USEPA declare carbon dioxide to be a dangerous pollutant! Imagine that. Every exhalation is toxic! Flatulence is toxic – well actually I learned that at age 4.

Philadelphia is desperate to raise money to close their budget deficit. What do you do if you need money and you have the power to tax without limit? You find something to tax that sounds justifiable – like a sin or bad habit. You tax cigarettes or liquor. Philadelphia is taxing sugar. That is right. Two cents an ounce for sugared drinks like a Pepsi or Coke. Next up is the tax on fat. Say a nickel per Whopper. Then the tax on all carbs. Ten cents a potato. Finally water. Tax that at a dollar per drink – everyone needs water all the time.

Last week, the great world power of Brazil told the USA to pound sand. Publicly. They didn’t do us the courtesy of waiting for Hillary the Great to leave town and then issue a statement. Now they did it at the podium with Hillary the Great standing there. Great job. Next, French Guiana will tell US ships that they can’t sail within 200 miles of their coast without permission. That soft power deal doesn’t seem to be working.

Anyone want to join me in the North Woods?

Wednesday, March 3, 2010

The Deuce and Critters

I'm not a big animal lover. Oh, I don't hate them or anything ( mostly ), it's just that they're such poor conversationalists. They're high maintenance too.

Dogs are pretty good for the most part, except when they bark in the middle of the night, crap on my lawn, chase me when I'm driving, puke up an unidentifiable mass of yuck on my carpet or try to hump my leg. I've outraged a few friends when I've been forced to chastise their dog for mistaking my shin for a slutty bitch, and by chastise I mean a firm yet understanding nudge to their marbles. Once is usually enough for the dog, though the owners tend to carry a grudge ever after.

I understand why some people get so attached to their dogs. Dogs are mostly friendly and sociable critters who like to play and please their masters. I've heard countless people say, "It's the unconditional love they give that makes dogs so special." I used to reply, "Well, a dog will love anyone that feeds them and gives them a warm place to sleep. Stop providing food and a warm bed and see how fast your dog finds someone else to love. Even Hitler had dogs." I don't say that anymore...apparently it's offensive. Who knew?

Cats. As far as I can tell, the only thing cats are good for is for baiting a really big fish hook. But that's just me. You love your kitty and that's all good, but forgive me when I give your fuzzy wuzzy a friendly toss after it jumps in my lap and exercises it's claws in my crotch.

Killer Whales. I personally have never run across anyone who had one of these as a pet, but I understand there are places where you can go to watch them do tricks, like letting people ride on their backs and then eating them. Radical dude!

For years I've been waiting for a Sea World trainer to to piss off the wrong orca and it finally happened. I mean, Darwin's law can only be put off for so long. When you're petting a 22 foot long, six ton predator, you've got to be fast on your feet and have razor sharp concentration. Especially when a particular killer has, in fact, killed before. One false move, one fleeting moment of inattention and you'll find yourself drowning at the bottom of the pool watching your guts float bye as the orca uses you for a chew toy and horrified spectators puke all over each other. Talk about high maintenance!

Love of animals is all well and good, but in America we've gone too far. It's one thing to support the humane treatment of animals, it's quite another to let them feast on human beings and then say, "...the animal did nothing wrong and will not be punished in any way." You can argue that killer whales and other large predators should not be confined to amusement parks, but since we allow that, how can anyone argue that a proven killer of humans should be allowed to continue to kill. Return it to the wild if possible, and if not, put it down.

Allowing any animal to habitually kill humans is not only incredibly stupid, but devalues human life to the level of a Big Mac, and offers "rights" to an animal that it is not entitled to.