WC Varones

Don't lend your hand to raise no flag atop no ship of fools

Envy is the mother of leftism

Envy is an ugly human emotion. It's also the basis for public policy in Europe and, increasingly, the United States.

From today's Daily Reckoning:
Why has collectivism - not individualism - triumphed almost everywhere, we ask? Individualism - a genuinely free market - clearly delivers more goods and services than a collectivized economy. People may not really care about liberty, but surely they care about money?

Why is it that even in the U.S. of A, where getting rich is practically the national religion, the government intervenes (in the name of the people, of course) in countless ways - from fixing key lending rates to setting the terms of employment contracts.

Part of the answer comes to us from Helmut Shoeck, who wrote a book 40 years ago called, Envy. Money isn’t everything, said Shoeck. In fact, in some ways it is less than nothing. People envy people who are richer than they are mostly because it confers status...not because it has any inherent benefits.

This comes from the peculiar nature of wealth. After you have the basics - adequate food, clothing, healthcare and shelter, wealth only matters in a relative way. Even if you are a multi-millionaire, for instance, you will be relatively poor in a neighborhood of billionaires. Since it is relative wealth that counts, you will be almost as satisfied - and maybe even more satisfied - to see your neighbors taken down a notch than to see yourself with a few more million.

Envy is such a powerful emotion that all societies eventually have to deal with it. In primitive societies, a rich chief might have been required to host a giant banquet. In the Middle Ages, laws were enacted forbidding people from showing off their wealth - the sumptuary laws. People were given a place, or rank, in society and expected to dress accordingly. Sometimes they forced everyone to wear the same drab clothes - as in China during the Mao years - and sometimes they just took everyone’s property away - as in most communist counties. In the West, taxes were imposed.
Britain and the Scandinavian countries even had marginal income tax rates over 100% for a while.

People seem to hate the idea that their neighbors are having a better time in life than they are. It makes them favor controls, regulations, taxes...in short, it makes them favor a collectivist society.

Coming soon to a neighborhood near you...

More vacant homes!

The top five [home builders] have almost $13 billion in commitments to local authorities, having promised to build the necessary infrastructure for new housing developments. They back these commitments with surety bonds, which are pledges to pay a municipality a big slug of money if a builder doesn't finish a project. These surety bonds total between a quarter and a third of the book value of the leading home builders. Centex's $6 billion of surety bonds actually exceeds its book value, though it estimates it has just $2.5 billion of work left to complete. In a recent regulatory filing, Lennar revealed it had $1.8 billion of these commitments. However, they won't affect its balance sheet unless they are triggered.

The surety bonds make it tough for home builders to walk away from projects. With land prices falling, disposing of development land and dealing with surety bond commitments is costly. This leaves home builders with one option -- to keep building. But that's not appealing either, as home sales are falling and inventories keep rising. In more than one way, the builders have dug themselves a hole.

News you can use

Note to self:

Next time you're working in a Texas monkey kennel, don't call a newspaper reporter and tell him that one of your customers is screwing his pet monkey.

Speak Truth to Power!

... or at least truth to a corrupt, incompetent bureaucracy.

You gotta watch this. A representative of U.N. Watch goes to the U.N. and rips them a new one.



HT: Ang.

American Idiot

Mortgage ignorance rampant


What kind of mortgage do you currently have?

Camp Pelosi revisited

It was back to Camp Pelosi last evening. We gathered in nearby Alta Plaza Park...



...then proceeded to Camp Pelosi.



Judging by the newspapers piled up on the front porch, Nancy wasn't home...



... but that didn't stop us from having a grand old time!



Nancy’s neighbors love her!

How to tell when your realtor has way too much time on his hands

COLDWELL BANKER ENTRANCE INTO SECOND LIFE MAKES VIRTUAL HOMEOWNERSHIP EASIER FOR MILLIONS OF RESIDENTS

Company Leads Real Estate Industry Into Virtual Future


Via Patrick.net

Yahoo, my friendly porn purveyor

On one of my Yahoo accounts this morning, I noticed something surprising on the "My Yahoo" front page, whose default settings I've never toyed with:

Yahoo's marketing department is really at the top of its game. I don't think I've done a single Yahoo search for porn lately--definitely not under that account--and yet I ended up buying 3 copies of Tera Patrick's latest...one for me and two to donate to hurricane relief.

(In case you noticed the other porn-sounding films, "Perversion Story" and "Naked You Die," these are, disappointingly, not porn at all, but instead B-horror films.)

Camp Pelosi

Another gorgeous morning commute in San Francisco.

I decided to swing by Camp Pelosi, which is significantly less spectacular than it used to be after a crackdown by The Man.


Two courageous hombres man this frontier outpost in the War on War.


Nice car.


Meanwhile, just up the street, there was a beautiful view from the Lyon Street steps. Filthy rich capitalist pig Dianne Feinstein lives in the brown brick mansion on the right side of the steps.

Carlos Mencia: fraud, hack, and thief

This has been rolling around the internet for a few weeks, but it's noteworthy enough to relay here: "Carlos" Mencia, famed and beloved Mexican comedian, and star of Comedy Central's "Mind of Mencia," is in fact a prolific thief of material, and isn't even quite the Mexican you think he is. (In reality, he's a half-German, half-Honduran named Ned.)

Now, a number of comics are speaking out against this filth.

First, see an example of the thievery here....then check out the stunning onstage backlash.

Incidentally, I did standup at small clubs in L.A. a few years back, and Ari, the Jewish guy in the second video, did some of the same shows. From my experience, he worked his tail off, and consistently showed up with smart, original material. You can well understand his indignation, when Mencia makes millions ripping off other artists' work.

Mon Dieu!

Great moments in French sporting history.

Has Ken Fisher lost his touch?

Ken Fisher, September 2006:
My forecast is for the GOP to lose three seats in the Senate and six in the House. Sometime before the election the market will perceive this likely outcome and will move upward in response.
Reality, November 2006:
Jim Webb's victory over Sen. George Allen in Virginia assured Democrats of 51 seats when the Senate convenes in January. That marked a gain of six in midterm elections in which the war in Iraq and President Bush were major issues.

Earlier, State Sen. Jon Tester triumphed over Republican Sen. Conrad Burns in a long, late count in Montana.

With a handful of House races too close to call, Democrats had gained 28 seats, enough to regain the majority after 12 years of Republican rule and place Rep. Nancy Pelosi of California in line to become the first female speaker in history.

"It was a thumping," Bush conceded at the White House. "It's clear the Democrat Party had a good night."
Ken Fisher, February 2007:
Housing Boom!!!

Don't buy it. For months now the debate has been over whether America will have a hard landing or soft landing, the answer hinging on how big 2007's housing disaster turns out to be. Well, there won't be any housing disaster. We won't have a landing at all, soft or hard. Right now the U.S. and global economies are both accelerating.

You can see right through the housing crash story by looking at the prices of housing stocks. The market knows what the economic worrywarts do not, which is that the housing sector is already making a comeback. In the last six months housing stocks are up 24%, well ahead of the overall market. If housing were destined to fall apart in 2007 these stocks wouldn't be so strong now.

Did you know that housing sales are up in the last few months, not down, and that inventories are lower than six months ago? We're accelerating, not landing.
Reality, March 2007:
"I don't want to be too sophisticated here, but 2007 is going to suck, all 12 months of the calendar year,'' D.R. Horton Chief Executive Officer Donald Tomnitz said at a Citigroup Inc. conference in New York. "Our future is not as bright as what we would like it to be.''

I've got a lot of respect for Fisher's long-term track record. And a lot of people got the 2006 election wrong. But to believe that the greatest speculative excess in the history of the world would not cause any damage? That's some serious denial.

And those three homebuilder stocks he recommended? Down 23%, 16%, and 26% in a month. Ouch.

How about Harriet Miers?

White House Seeking Gonzales Replacements

It's the end of the world as we know it

... according to legendary investor Jim Rogers.
"Real estate prices will go down 40-50 percent in bubble areas. There will be massive defaults. This time it'll be worse because we haven't had this kind of speculative buying in U.S. history," Rogers said.

"When markets turn from bubble to reality, a lot of people get burned."

Finally, I think I've found someone more bearish on housing than me. Rogers thinks the housing bust will take down equity markets around the world, too. I wouldn't go that far, but he may be right.

What did you people expect? A soft landing after the greatest financial bubble in the history of the world?

St. Patrick's Day Parade

A few pics from the parade. You can click on them to see more detail.


Irish wolfhounds are cool. I'd like to see a cage match between a few of these guys and some wolves.



Irish Illegal Aliens Against Immigration Enforcement (IIAAIE, pronounced much like Howard Dean's YEEEAAAARRGGGHHHH, but with a Gaelic accent).


Never afraid to take controversial positions, these people are in favor of Ireland, America, and peace.


An old Irish prank is to teach children to cross the street when cross traffic has a green light.


The Irish identify their dim-witted children by making them wear blue when everyone else is wearing green.


UPS had one of the better floats.


UPS and the Irish: teaching kids to take up smoking since 1968.


That dog looks embarrassed to be seen with these people.


Hey, Frank Chu! I didn't know he was Irish!

Frisco weekend

It's going to be a beautiful weekend here in San Francisco, thanks in part no doubt to Al Gore's voracious burning of fossil fuels as he flies around the world in a private jet and burns 20 times the energy of an average home in just one of his mansions.

I'm heading down to the St. Patty's parade today, and the Iraq protest tomorrow. If I get some good pics, I'll post them.

BOOM!!!

I don't think I've mentioned Qualcomm on the blog before, but it's one of my long-time favorite stocks.

This news should be big for Qualcomm:
Qualcomm Inc. and Broadcom Corp. agreed to dismiss patent and trade-secret claims against each other Friday, ending several skirmishes in the long-running legal battle between the two wireless technology companies.

Qualcomm said the settlement eliminates five jury trials scheduled to start this year. The first was to begin Monday in federal court in San Diego.

The company has been beating earnings estimates handily, but legal hassles have scared Wall Street away. If Wall Street gains confidence that Qualcomm is settling its legal issues, the stock has a lot of room to run.

Anatomy of a bubble


Many parts of the country are in the Fear stage. Up here in the Bay Area, we're still in Denial.

Via HousingPanic.

Chris Dodd proposes massive government bailout of housing speculators

All those speculators that created a housing bubble paying prices they couldn't afford with no-money-down, adjustable-rate loans?

Don't worry, the Dems will bail them out.
U.S. lawmakers will have to consider providing aid to about 2.2 million subprime mortgage borrowers who are at risk of defaulting and losing their homes, Senate Banking Committee Chairman Christopher Dodd said today.

``The impact of losing 2.2 million homes I suspect will be in a lot of areas of our cities and towns that are already pretty hard hit, so we clearly want to look at that and legislate,'' Dodd, a Democrat from Connecticut, told reporters in Washington after a speech to the National League of Cities.

And the responsible people who didn't use creative financing to speculate on wildly overvalued houses? They'll be left holding the bag.

Shiller forecast: rain, rain, rain

Yale's Robert Shiller:
I think there's a good chance home prices will be down 10% to 30% over the next five years.

Nice. Very nice. I think there's a good chance I'll be buying a nice home at a discount over the next five years.

New York Times: Al Gore is a lying sack of crap

OK, they didn't say it like that. But they were harsher than you'd expect from a left-wing hack newspaper writing about a dreamy left-wing dreamboat:

From a Rapt Audience, a Call to Cool the Hype

California's best

A lot of things about California suck:
  • housing prices
  • crime
  • traffic
  • smog
  • schools
  • taxes
  • the Governor
  • the legislature
  • the Senators
  • the voters
... but Tom Stienstra, the San Francisco Chronic's outdoors columnist, has compiled a list of California's best. Bookmark it. It wouldn't kill you to make it a goal to see everything on the list.

Housing news

There's too much good housing news out there for me to do justice to any of it. Take a look at Patrick.net for a sampling.

Better late than never

Weeks or months after every other publication has written about it, the New York Times' Gretchen Morgenson discovers trouble in mortgage lending.

Welcome to the party, Gretch. Where you been?

It is pretty funny to watch Dumb heckling Dumberer, though:
On March 1, a Wall Street analyst at Bear Stearns wrote an upbeat report on a company that specializes in making mortgages to cash-poor homebuyers. The company, New Century Financial, had already disclosed that a growing number of borrowers were defaulting, and its stock, at around $15, had lost half its value in three weeks.

What happened next seems all too familiar to investors who bought technology stocks in 2000 at the breathless urging of Wall Street analysts. Last week, New Century said it would stop making loans and needed emergency financing to survive. The stock collapsed to $3.21.

...

The Bear Stearns analyst who upgraded New Century, Scott R. Coren, wrote in a research note that the company’s stock price reflected the risks in its industry, and that the downside risk was about $10 in a “rescue-sale scenario.” According to New Century, Bear Stearns is among the firms with a “longstanding” relationship financing its mortgage operation. Mr. Coren, through a spokeswoman, declined to comment.
This is Morgenson's schtick. Every Sunday, she rails against one of two groups of people: greedy/corrupt corporate executives and stupid/corrupt Wall Street analysts and bankers. She never breaks any new news, though, always repeating what is common knowledge.

OK, Gretch. If belittling others makes you feel better about yourself, go for it. But your position as a featured columnist at one of the country's largest newspapers is, or should be, tenuous. You belatedly write the blatantly obvious. If the Times had more competent management, you'd be out on your ass.

It's that time of year...

... when our neighbors to the north start clubbing baby seals.

Next time you see somebody wearing that smug "I'm not an American" Canadian flag patch, give them a piece of your mind about their country's cruel and barbaric slaughter of defenseless baby seals.

What a wonderful world

The D.C. Court of Appeals rules that the Second Amendment actually means what it says.

Awesome. Just awesome. Just when you think judges are all a bunch of illiterates, liars, and morons, some of them prove you wrong.

Ethanol will destroy the environment

Ethanol is terrible for the environment. It's driven up corn prices, not just in the U.S., but in Mexico and Central America. This will immediately cause the clear-cutting of remaining rainforest to plant the now immensely profitable corn crop.

I've traveled through Central America. It was bad enough seeing subsistence farmers cutting down the rainforest to clear land to feed their families. Ethanol demand in the U.S. will make the clear-cutting much faster and more far-reaching.

What about using Brazilian cane sugar instead? Perfect. They'll clear-cut the Amazon rainforest.

You think burning gasoline causes CO2 levels to increase? That's nothing compared to what chopping down the Amazon will do.

Law of unintended consequences. Learn it.

AKA "The Shocker"

It's 2004 or 2005. You want to get rich quick in the real estate boom. So you buy a house that would normally be out of your price range, except for the creative financing your mortgage broker found you. You get an ultra-low initial interest rate. Sure, it will adjust upward in a few years, but who cares? You can always refinance, right?

WRONG!!!

Edward Booker is one of nearly 3 million homeowners with adjustable-rate mortgages who've had trouble paying their bills. And, like Booker, many of them won't be able to refinance their loans once the interest rates start rising. At that point, they'll have to tighten their belts, sell their homes or lose them through foreclosure.

...

Since the start of the year, more lenders have been shutting their doors to people such as Booker, just as those homeowners' interest rates are rising. They're slashing the "Bad credit? No problem" types of loan programs, known as subprime, that helped fuel the housing boom. And they're raising the bar for homeowners and first-time buyers to qualify for new loans.

The trend accelerated last week after federal regulators proposed stricter guidelines for banks that make subprime ARMs (adjustable-rate mortgages). The move followed Freddie Mac's decision to drastically raise the criteria for the subprime ARMs it would buy and to require better proof of a borrower's finances.

Hmmm...have you got anything closer to $4 billion?

These construction cost estimates courtesy of the good folks at Better Homes & Gardens...

Fun on the farm, or how to get rid of unwanted nose hair

It's almost springtime here in New Mexico, which might come as a surprise to you, unless you happen to live in a place where spring is also coming. What differs here, however, is that come spring, a favorite pastime is to set one's yard on fire. This is to clear away the prior year's amassment of leaves, goatheads, tumbleweeds, and fluttering Jehovah's Witness pamphlets. (Amid the hiss and pop of a burning refuse pile, you can sometimes hear a faint voice say, "I'll get you back for this.")

Having done little to stem the tide of vegetation last summer, I had a fantastic amount of burnable biomass left over. So, I collected the tinder into piles and waited for a burn day, so designated by the fire department when the winds and humidity favor such raucous good times. Surely it would be entertaining, but it was also a necessary strike against some of the more hideous members of the plant kingdom. Chief among these is the goathead, which, if you're unfamiliar, is a devastating enemy of shoes, flesh, and bike tires, and hell on dogs' paws. A creeping, tentacled weed, goatheads leave a swath of multi-spiked seeds that are solid as wood and cause man and animal alike to howl in pain. The plants have so permeated southwestern culture that poker players in Texas and New Mexico on occasion say "goathead" rather than "go ahead" when checking.

At last the burn day came and I set out with my floppy hat, sunglasses, gloves, and barbecue lighter (the point of these details will become clear in a moment). Now goatheads, which clump in a thick mass of vines, burn slowly and without much vigor, while tumbleweeds, though hard to get started, are explosive and chaotic once lit. Three dry tumbleweeds stacked together can make a searing ten-foot flame, the pulse of which can be felt 30 feet away. This knowledge I acquired after the fact. As it was, I lit the base of one stack in several places, and watched unimpressed as the goatheads and cottonwood leaves at the bottom began a slow, smoky burn.

I decided to add some more tumbleweeds to the mix, and carried over a few from the edge of the corral. I took them and smashed them into the pile, and just as I did, the whole eight-foot stack fairly exploded in my face! It seemed the wind had picked up at the same moment I was compressing the pile, and a storm of flames lashed at me. As quickly as reflex would allow I turned and dove away from the inferno, and could tell right away that my face had been licked by the fire. I grabbed the hose and doused my stinging cheeks and neck, and was greatly thankful that the gloves, hat, long-sleeved shirt, and sunglasses had spared the rest.

For the remainder of the day I was aware of a burnt smell, which I attributed to my smoke-saturated clothing. It was the darnedest thing, then, that the smell didn't go away when I was stripped and in the shower...and then I thought, "Hmmm...smells sort of like burnt hair." I hopped out of the shower and checked myself in the mirror. Top of my head? No problem. Eyebrows? Still there. Nose? Not a single hair left in there...

Green sex

Correspondent IPFreely sends this story about the newest trend in sex: eco-friendly sex products.

The article also mentions the web site Veg Porn. Take a look at the ugly, flabby greenies on the site and you won't be able to have sex for weeks. Which, come to think of it, may be the strategy. The heavy breathing associated with sex is, of course, carbon emissions! Veg Porn-induced impotence may be just what we need to stop global warming!

How to win friends and influence people

... if you're an elitist Washington insider and New York Senator:

Go to a Southern black church and put on a bad Foghorn Leghorn / Aunt Jemima accent.



“Ah doan feel noways tarred!”

Reminds me of the classic John Kerry: “Kin I git me a huntin’ license here?”

Fleckenstein: it's the housing bubble, stupid

Last month, I pointed to conflicting columns: Ken Fisher's Housing Boom! and Doug Kass's Subprime Fungus Will Spread.

This week, Kass ally Bill Fleckenstein weighs in with a victory dance.

The definition of "victimhood"

Ralph Fiennes: I was the victim.

By "victim," he means the recipient of a welcome offer from a hot Australian stewardess to pop into the bathroom for a little in-flight entertainment.

You poor, poor man.

Tough week

I've been kicking myself for closing the IMH and CFC shorts too early. And I'm disappointed gold didn't hold up better in the stock market sell-off. I'm still short DELL, but it was actually up after it reported a bad quarter.

In housing news today, the San Francisco Chronic warns about subprime defaults hitting the housing market. It hasn't really happened yet. Surprisingly, San Francisco, one of the most overpriced housing markets in the country with one of the biggest price increases during the bubble, hasn't really dropped yet. Price appreciation has slowed or stopped, but prices aren't dropping yet. Real estate bubbles are painfully slow to unwind. If it continues at this pace, it will be years before I buy a house.

Five days of radio silence from Varones

Ya picked a fine time to start daytrading, Lucille

Just when I thought I had a fun new hobby...
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