Friday, December 30, 2011

- Another Year In Obama's Paradise



It’s been a very tough year, but it’s tough to feel sorry for myself.

In April my profitable trading strategy was shut down by my employer of three years. But it wasn’t a risk decision; it was a decision of the legal department. I was profitable and outperforming my peers when the they discovered a potential liability issue in my employment contract, and (in my opinion) massively over-reacted by shutting down the strategies of all of us who had been hired on similar terms.

My boss was very conciliatory about the whole thing. He liked me personally and respected my contribution to both his P&L, and the firm’s intellectual discourse. He felt terrible about having to shut down something which he viewed so positively, but at the time he thought it was a temporary thing.

It was his assumption that once legal defined a new process for him which shed the liability issue, I and the other profitable managers would be rehired on new terms. As evidence of his sincerity, he not only honored my contract and paid me all I was owed, but also paid me a premium on top of that with the instructions that although he couldn’t in good conscience ask me not to speak to other firms, I shouldn’t accept a position from anyone until he has a chance to get his ducks in a row and make a counter offer.

So although he had no choice, he did the equivalent of setting me adrift in the north Atlantic with some fresh water, a few extra rations and a signal lamp. I sat there bobbing around in the dinghy for a moment trying to form a plan. And I’d only just begun to fret abut the cold and dark when I watched the firm steaming away at top speed, run headlong into an iceberg. That firm is very big – with a peak capitalization in the 20 billion dollar range, and it’s still afloat. But it’s listing badly to port, taking on lots of water, and several of its trading strategies have had to be killed. I suspect that more than one career will be ending there, thanks to this very difficult year.

In the meantime, I’ve been scooped out of the water but a much smaller but much more fleet and nimble craft. I’ve restarted my strategy, and my annualized return for 2011 has been an enviable 15.35%. It’s been a damned inconvenient year professionally, and it didn’t go the way I expected. But given the alternatives and the number of craft that have been sent to the bottom, it’s hard to feel too badly about how it’s worked out.

It’s been a tough year at rancho RFNJ too. We had a hurricane, during which our generator died, leaving us without power for a week. In the process, our basement flooded destroying all the drywall. Then while making the ‘repairs’, the drywall contractor did several thousand in damage to various appliances, furniture, and plumbing. Finally, when they brought in a plumber to fix the damage, they re-flooded the basement again, setting us almost back to square one.

As ridiculous as that sounds, I think it's another example of my personal life echoing the broader economy. Meanwhile, if anyone knows a drywall contractor who works in the Colts Neck area, we’re in the market for new one. We might maybe also need a lawyer too. I’ll keep you all updated.

So the personal and professional foibles have been many this year. And just surviving has been a triumph, made even more glorious when you think about how many people didn’t manage to. But it’s hard to be too thrilled when you’re marginally worse off than you were before. “It could be worse”, or “At least I’m not that guy.” aren't phrases that lead to much consolation.

And all the personal issues I've had in 2011 really pale when compared to the political changes in America.

This is still the long dark night of the Obama era – where losing is treated like winning, and winning is treated like a felony. This is the Shangri-la they dream of in the teacher’s lounge. It’s the paradise of the political, where fairness is dictated to us by our betters in Washington, and the only justice available to anyone is ‘social justice’.

I’m reminded of the sci-fi movie “Serenity” and the nameless villain brilliantly played by British actor Chewy Ejiofor (pictured above). In the movie he did things he knew to be monstrous but he was resigned to them because he believed that he and his masters were trying to build a better world – a world without sin. This is what I think Obama, believes too. Obama believes that he’s fundamentally transforming America into a better place - free from the sins of competition, and the avarice of capitalism.

In the movie, their experiments to make a better world transformed the humans they subjected to them into psychotic animals called reavers. The reavers then went on a bloody cannibalistic rampage, perfectly filling the nightmare role of bogeymen. As a much milder parallel, Obama’s experiments in government imposed fairness have given us the publicly defecating anarchist's circus of the “Occupy Wall Street” movement.

The OWS movement has nothing productive to give any of us. But measured on the scale that Obama and his ilk think matters most, that makes them better not worse. They toil not, nor do they spin. They are creatures whose whole participation in American society is political. They are defined by it – they exist for no other purpose. And in the eyes of Obama and the people of the left, that makes them something superior to the rest of us because they are free from what they view as "sin".

To me the OWS movement honestly feels like an endpoint. They are an ultimate expression of the ideals of people like Obama. They are fully outside the system that the hard left feels is the cause of America's problems. And since that's so, I think they're a momentum endpoint as well. The fact that they are present in the world means that the pendulum has reached it's azimuth and will begin to head back toward what we in the private sector believe is best describes as 'rationality'.

I was still a child when Jimmy Carter tried to reinvent America in his way, so I can’t recall how similar this feeling is to what adults felt back then. But I was old enough to remember what it felt like when Reagan won the Whitehouse. I can remember that particular morning in America. And although it’s still cold and dark today, I can feel the impending dawn again. Against all reason and rationality I find myself modestly hopeful for the future.

I know this isn’t much of an uplifting year end message, and I wish I could do better. But in light of the past three years, I suppose there is quite a bit to be said for the feeling that it really can’t get any worse.

Thursday, December 29, 2011

- HOPE!



Election Poll 2012:

Romney 45%, Obama 39%

- A Real Intelectual



The other day John Derbyshire sent me an email in which among other things, he asked me if I read a particular right leaning science blogger he knows. I responded that apart from him (the Derb) and a few of the other NRO'nicks, I don't read anyone regularly but I was familiar with the work of the blogger he mentioned - and was generally impressed with his work.

There are a lot of bright people out there who aren't consistent enough in their brightness to hold my devoted attention, but come up with a stellar piece now and then. I suppose for many of you, I'm probably one of those people too. It's OK... even my own brother has said as much. As an excuse I tell myself that it's only because I do this part time for free - but I digress.

One person however who I am always impressed with is Charles Murray. Virtually everything he writes strikes me as brilliant. Not only is it insightful, but to stay on topic for the day (see my last post), the man has a talent for purging his personal biases from his research and drawing conclusions from the data that are most strongly supported by it.

We all see people who analyze data in order to produce results which match their pre-conceived political conclusions. Liberals are famous for this kind of distortion, but they are not alone in it. But Mr. Murray's conclusions are so persuasive specifically because it's clear he doesn't do that. Whenever I read his stuff, I find myself thinking, "This is what a real intellectual sounds like."

If you're interested in societal trends, his every written word should be worth your attention IMHO.

Charles Murray: Keep Locking Em Up.

- Mistaking Everyone Else's Motives




One of my big ideas that I don't hear from others very often, is the concept that we each think, that everyone else also 'thinks', just like we do. We all individually operate from the base assumption, that everyone else is operating with the same base assumptions that we are, and that their decision making follows the same processes that ours does.

As a result, highly analytical people always seem to believe that others are following an analytical decision making process, and then conclude that if someone disagrees with them, it can only be because they’re stupid. Highly sentimental people think everyone is deciding things based on sentiment, and if someone disagrees with them it must be because that person is an unfeeling monster. This maps onto our political choices fairly well. But that fact only highlights that the one thing we all have in common, is something which we all have absolutely wrong.

In truth, monitoring people's behavior tells you almost nothing about their motivations or decision making until you give up that particular bias. But the second you do, it's like turning on the light in an otherwise dark room. Suddenly what everyone is doing and why they're doing it, becomes instantly transparent. You see who they are, where they are in their life, and what they hope for the future as revealing tons about how they think and how they decide. And knowing that, you can form very solid conclusions about what they will likely decide in the future when faced with various choices.

I made that realization many years ago, and have since found a way to base not just a personal philosophy on it, but an entire business model as well. For the last 15 years virtually all I do, is monitor and examine the decision making behavior of people and the ways that it differs not just from my own, but from each other’s.

I’ve met people over the years that have transcended that ‘decision making assignment bias’, but they are very rare. Even the people who analyze group behavior don’t often do it. The key is that this isn’t a generalization; it’s a personal issue. This is a metric which can be applied accurately to individual people, and from there it can also be scaled up to group behavior as well. But there is almost no way to breach the ego’s defenses to make the realization from the opposite direction - going from groups down to individuals, and inevitably to the examination of your own personal biases.

I think the times when this is most easy to remember, is when you’re listening to news media gazing into the Petri-dish of Republican politics to talk about what’s motivating various conservative sub-groups. The news media is overwhelmingly liberal, so the things that motivate liberals are the things they attribute to various groups on the right.

Evangelicals don’t like Romney? It must be because of his religion. Libertarians don’t like Newt Gingrich? It must be because seeing photos of him with Nancy Pelosi changed their feelings. Tea Partiers don’t like Huntsman? It must be their racism and the fact that Huntsman worked for a Black President. I’ve listened to each of those theories being offered as an absolute certainty. But I’m equally certain that none of the people whose motivations are being examined would claim those as their primary one. It’s just the talking head assigning his or her personal decision making bias to others.

Being truly objective is tough for anyone even on a single issue. Being objective consistently is all but impossible. You can try, but it’s tough to succeed, even for the best of us. And since that’s so, I think it would be really great if the News Media would recognize that fact, and start behaving accordingly.

It would be too much to expect them to do the kind of self examination to transcend this particular bias. They aren’t nearly smart enough. But I for one would think it’s more then enough if they simply accept that the bias exists and that they aren’t immune from it. Do that, and I’d be willing to give them a pass on many more of their errors in attribution.

- The New Anti-Gun Bogeyman!



The New York Times has published another editorial against the principle of private citizens being allowed to own firearms, even with considerable federal regulation in place. I know... you're saying "Of course not! The NYTimes thinks Americans are too stupid to run their own lives, so what would you expect?"

I agree - this editorial is old news in many ways, and it drags out all the old distortions for the purpose of convincing the few upper west siders who still know no better, that their position is right. They dredge up the (totally fictitious and invented from whole cloth) gun show loophole, the Brady campaigns distorted statistics, and they represent the microscopic but vocal minority that still ignores enough of the data to agree with them as a movement which represents the majority.

This is actually good news for gun owners. The few anti-gun lobbyists who are still out there don't just represent a movement on the cutting edge of the 1970's, but a movement that is so far beyond the mainstream that they can't even manage new verbal bogeymen. Well that's not right exactly... they try. But their recent efforts are laughable, and it indicates a movement that is all but dying out.

Their new 'catch phrase' designed to light a fire under public opinion and terrify America into bold new legislative action is the anti-gun lobbyists new 33-round 'assault clip'. You and I know that they mean "high capacity magazines", but anti-gun people don't know much about guns so please don't fault them for trying to regulate something out of existence without any real understanding of it.

The image above shows an actual 'high capacity magazine', which under NJ law, is any magazine which holds more than 15 rounds. As you can see, it's much MUCH more dangerous than the one beside it. What's that? you can't tell which one is the high capacity magazine? Precisely.

If they didn't represent the most direct and transparent threat to the liberty of individual Americans, I'd feel bad for the anti-gun movement. Theirs is a movement which is withering on the vine. There is too much actual data out there now for Americans to be further persuaded by their distortions. (Except maybe for the few thousand people who still take the Times editorial page seriously).

They've responded to this like any liberal child - they've become more shrill and ridiculous, and they sound that way to everyone but themselves. Like any responsible parent, we should refuse to give in to their demands and just wait for them to calm down before getting on with our lives.

Americans are already onto the Brady Campaign. We already know that they don't want to prevent gun violence, they only want to prevent gun ownership. And in the end the only people they can prevent from gun ownership are those people who will obey gun laws - law abiding citizens. Criminals won't care about their stupid laws, and will actually prefer a disarmed populace to prey upon.

So if banning guns means more actual gun violence (like all the scientific data indicates), the Brady campaign still says "So be it". Americans know this, and are bored with listening to them. Based on the tone of this editorial, it sound like they know it too.

Saturday, December 24, 2011

- SHTF 2: Revenge Of The Anti-Social



I drafted this as a response to a comment left here, but it was really a comment about this post. Here then is my response:


First of all, I think your statement about community is absolutely right. I don’t think having a bolt hole to run to is a sound idea, but I think living in a small rural community already is a GREAT idea. Your neighbors already know you. You aren’t some A-hole from the city in a diesel SUV showing up with a rifle you’ve never fired, a backseat full of gold coins, and no useful skills. What’s more, when he gets to his ‘bolt hole’ the local teenagers will have cleaned it out of everything of value already anyway. You can’t hide anything so well that a determined rural teenager can’t find it first.

But in a community, you can cooperate and specialize. You can all help each other. Man has been organizing that way for thousands of years – maybe forever. That’s a much more workable long term solution than a cabin on a mountaintop someplace where hoodlums can just roast you inside it and pick through the ashes for things of value. Being a part of a community is really the only way to get through a prolonged period of difficulty. All these fools who think they can do it alone for more than a few weeks are simply kidding themselves.

I’d go to the sticks tomorrow if I could, and not just because it suits me better than the burbs. I’d find a town with less than 8,000 people that produces more calories than it consumes, and is more than 1 day walk from the nearest city. I’d probably buy a place in town (since I’m not much of a farmer) and I’d make a point of getting to know my neighbors and making a good impression. I'd make a particular point of being the kind of guy that people know they can rely on when they need it, or even when they don't.

My job now can be done from anywhere so I’d probably keep doing it so long as someone was willing to pay me. But beyond that, I’d also buy a local business that meets a local need and isn’t dependent on imported products. Preferably something where I already had a skill to apply to it and didn't have to start from scratch.

I don’t know if you’re a regular reader, but if you are you’d already know that I’m an avid hunter. My feet are resting right now on a Deer hide that I skinned and tanned. I can do first rate carpentry work, I can make a pretty clean weld, I can fix both gas and diesel engines that are simple enough to not require computers. I’ve done plastering, concrete, tile and brickwork, and although I’m not really great with heights, I’ve done plenty of roofing and painting.

I have a safe full of guns but I have them because shooting and hunting are my hobby. Even in NJ (My area is about 40% farmland - mostly horses and apple orchards) I have an alternate power supply, a secondary water supply, and enough stored consumable to last several weeks. But I have them for convenience rather than survival. We see a lot of storms in this area, and even now I lose power about 12 days per year. I’m preparing for that or other short term shutdowns, not the apocalypse.

The thing is, the real fantasy most of those preppers have is for a world without people. I think most of them would prefer doing without all the complicated give and take between people that comes with modernity. They see people who do something that they can't appreciate or understand the value in, and they dream of a world where the value of that task is set back to zero - as they think it should be now. This is why I think hedge fund guys (for example) are so hated on Freerepublic. Because so many of them there don't see the thing we do as having any real value.

For the preppers I think it's really a fantasy about control. They dream of a circumstance where they can at least be masters of their own lives once and for all. They don't really think about the fact that people don't survive well alone, even people like them. Not for any real length of time. This fantasy doesn't apply to all of them of course, but far more of them I think than would ever cop to it. A good rule of thumb would be ... the angrier they are that I said something like this, the more true it is for them.

With all that said though, I’m all but certain that the vast majority of us will never have to go through a period of prolonged difficulty. Barring new natural disasters, a couple of weeks is all any of us will ever have to worry about. People are more adaptable than you think. (well… not YOU think… but you know what I mean) even the people on the coasts.

One example of breathtaking underestimation I saw on FR was: “The cash registers don’t work so no one can buy anything”. A problem like that will take about 30 seconds to solve temporarily, and a permanent long term solution will take a couple of days at most. But these ‘preppers’ are basing their entire plan on the idea that the ancient and mysterious secret to the art of ‘making change’ will disappear from America when the central air conditioning goes off, and make further commerce impossible. Clueless.

In reality, there are separate classes of disaster. Natural disasters like what hit New Orleans are sudden and displace people, but there are no natural disasters that can affect the entire US all at once. Katrina is as bad as something like that gets, and we still survived it. What’s more, if you were a prepper in the part of New Orleans that was flooded, the National Guard still disarmed and evicted you. So the best prep for natural disasters is to live somewhere else.

That leaves only three things that can hit everything at once: financial collapse, disease, or war.

With regard to disease, that isn’t really “all at once”, but its close enough for discussion. I don’t know much about the odds of something like that. But whatever the odds, I think we’re probably in a better position to handle a genuine pandemic now than the world ever has been. And the solution to that is a community thing. What's more, a genuine pandemic will take longer to address than any of these people are preparing for anyway. So in that instance the preppers are as likely to come walking up my driveway as the other way around.

As for war, the US is an un-occupiable country. Even a glance at military history will tell you that. In theory we could have a civil war but if we do, then isolating yourself as a ‘prepper’ probably makes things worse for you not better. No individual could ever hope to hold out against an organized military like ours. A militia is a slightly different story, and a well organized underground resistance is another entirely. But one guy alone in the woods with an AK, a bunch of gold coins and some freeze dried food (who also has an anti-social tendency and is widely thought of by his neighbors as ‘that crazy guy’) is just a target for confiscation and harassment.

A financial collapse, unlike all these others, is fairly likely. I’d go so far as to call the kind of thing I’ve described as all but certain. But a collapse like that won’t have the effect on people that the “prepper’s” are setting themselves up for. That’s what I was trying to get across. A financial collapse doesn’t black out an entire region or leave no food on the shelves. It doesn’t set 100,000 refugees out onto America’s interstates. It’s rust, not an explosion. The worst areas go off the edge, the good parts get slightly worse, and the best (richest) parts, don’t even notice.

As to your worries about something more global, I hope I can put you a little more at ease. Think of it this way:

A financial collapse is really just a paper collapse. The people most affected by it will be those who deal in only paper. The financial sector performs a real service, but after a financial collapse fewer people will need it. Those in government produce nothing at all so they will become REALLY unnecessary. Don't so much think of your local policeman, think instead of an assistant deputy director of diversity compliance enforcement, at the HHS. Times will be tougher for all the lawyers, accountants and other people whose jobs are most abstracted from the world of real things.

But if you do import - export, or make air conditioners or some other product not so. If you repair things of any kind - not so. Farmer is the one absolutely indispensable service that always has, and always will have an inherent value. And even the people who help them manage their paper will still be around. That’s much fewer than we have now, but still some. There is nothing that will drive us back to the 18th century. George Zoros and all my billionaire former bosses will still take private jets everywhere they go no matter what happens in the future.

We will lose a considerable amount of productive efficiency, so things will cost more and there will be fewer of them. But the only people who will be utterly denied a more or less comfortable modern life are the people you would expect. The desperately poor, the welfare queens, the people who contribute little or nothing. They are the ones who should be REALLY worried, not the productive American middle class.

If there is only 1 cargo ship full of rice in the world, no one is going to take it to China where a billion rioters (or more likely the Army) will steal it. You’re going to take it where you can get the most for it, have the best chance of actually getting paid, and the best chance of actually getting to keep your payment. North America.

We’re still going to be ‘the place to be’ because of who we are and what we can do. And even if Europe and China, and the US all fall apart on the same day, it’s all just paper. There will be no actual break, no explosion. Only the paper will be changing. The people will still be there, and still be willing to do things in exchange for value. No one will need a gun put to their head. Not here anyway. Your talents, knowledge and skills are your real wealth. And until they make you a slave, no one can take them from you.

I’ll tell you something Galvez once told me when I mentioned a worry that I had which was similar to yours. We were talking about the future for our kids, and how there was no wilderness left to run to anymore. He said:

“Don’t worry Tomas, we’ll be fine. They have always needed smart people to do things for them, and they always will.”

He comes from a very old family of Castilian nobility. He can trace his direct ancestors by name back to the battle of Tours in 732. So when he said ‘always’, it carried some weight with me. I hope it does the same with you.

Friday, December 23, 2011

- Hedge Fund 2011 Returns



I'll probably make someone angry by using a metaphor like this, but looking at these numbers makes me feel like one of the guys that survived on D-Day. The dead and dying careers are everywhere I look. These number are horrible, and for more than one person I think the linked report on the Zerohedge page will be the the final item on their resume.

Many of my former co-workers are listed here and a few of my friends are listed by name. That's got to be tough. Their numbers are all catastrophic. And thanks to the recent rise of economic populism, that will bring cheers of 'good riddance' from places like Freerepublic and the bastions of the far left.

But that's wrong. Even on the right people don't understand the value that Wall Street adds anymore, and the way things are going they'll all live to regret that lack of knowledge. These days wishing for the demise of anyone who works on Wall Street is the only real non partisan issue.

Not accounting for personal lives (where I can't speak for anyone but myself) the only sin that all these guys are guilty of is succeeding. And for far too many people these days, that's sin enough. But these aren't too big to fail banks. They're small private companies - the very largest of them no more than a few hundred people. And more than one will certainly be failing now.

I'm posting a gain this year - about 5% give or take a breath if things go close to expectations next week, but with a big chunk cut out of the middle of the year while I changed jobs. Annualize my daily or monthly returns and it works out to more like a 12% year, which is closer to my historic average.

But numbers are numbers, and that makes this the second 'single digit' up year of my career (the first was 2008). I still have never had a down one. The prospects are also looking great for me for next year. I'm in as strong a position as I've ever been career wise, working with people I like in a position that I'm well suited to. It can all be in flames in a minute, but all things considered the future looks bright for me personally.

But it's hard to be too jubilant. At best it feels like all I've done is survive when far too many didn't. What's worse, I've survived in an environment where many people out there would rather I had died with the rest of them.

Man. It's really been very a tough year.

- What If The S*** Never Hits The Fan ?



Man there are a lot of crazy people out there.

I honestly don’t understand the romantic appeal some of these people have for preparing for the end of the world. They call themselves ‘preppers’ and talk about being ready for when society collapses. And although I tend to agree with them that things will get much worse in America before they get better, they don’t have any realistic sense of scope about it.

Go to youtube and punch in the anagram SHTF which as you know stands for S*** hitting the fan. You’ll be buried under images of wild eyed people telling you how you’re going to suffer in the future and how they don’t care. Some are laughable (albeit unintentionally), others are terrifying, and they all seem to be absolutely serious about it.

These people all seem to imagine waking up one morning to wholesale nationwide pandemonium all around them. A common theme describes their initial reaction to that as ‘bugging out’ quickly with their box of SKS rifles and 50 gallon drum of diesel fuel in tow, to some unnamed place in “the country”. From there they will hunker down and try to survive the decades to come while we enter a new medieval period which they seem to think will closely resemble “The Book Of Eli”.

If they're doing it strictly for fun then fair enough, but most of them are serious. That isn’t just nuts, it’s also horrible planning.

Don’t get me wrong, I believe things will get worse in America for many people in the coming decades. For the poor and those on a fixed income or that live on government largess, I believe it will get much worse. But an economy with 300 million people will not shut down - ever. It may go underground, or off the books or turn into some sort of barter system. Living standards will fall and whole neighborhoods may begin to crumble. Infrastructure will become undependable and the bureaucracy will become sclerotic and begin to attack itself. Things might even get bad enough in some places to cause periodic local rioting.

But this is a very rich country. And even if the government were to loot every penny of wealth from everyone everywhere, it would still be a rich country. Because the one thing that each of us always has that’s available to sell is our labor and know how. That’s this country’s greatest resource by far, and it can’t be devalued by the government, taxed away and wasted, or exported to the Chinese and Arabs. Places like Yemen and Sierra Leone and Tanzania aren’t poor because of a lack of resources; they’re poor because they don’t know how to do things. We do.

So long as you are willing and able to add value in some way, there will be someone somewhere who will be willing to pay you to do it. They may not pay you as much as you’d like, or enough for you to have the kind of comfort you want. They may pay you in silver, or rice, but they’ll pay you. In this country the economy - that is – some form of a modern economy will continue. Food, energy and other essential resources will be much more expensive relative to income, but they will still be available. There may be local shortages of some goods here and there, and some might become impossible to get for a short time. But the United States of America will not transform into Serb occupied Croatia – ever. Even if we have another civil war.

The truth is, we are a highly civilized people who would all rather work together than duke it out. This is not West Africa. It’s not the Hindu Kush. We will not be dividing into tribes and engaging in internecine clan warfare. It’s not who we are. We’re at the top of the global pyramid for a reason. And that reason is our work ethic, our good manners, our respect for our fellow man, and our ability to come together in spite of our differences to work toward a common goal.

I don’t mean a “common goal” the way Obama or that union thug from the AFLCIO says it, where they choose the goal and the rest of us are ordered to pull their chariot toward it whether we like it or not. I mean a goal that we all agree to of our own free will. One that we know will benefit each of us individually. Even that kind of basic cooperation is more than many around the globe can manage. Imagine trying to get Hamas to cooperate with Israel’s Hassidic Jews. Now imagine trying to make a Gay and Lesbian community group from San Francisco work with a Baptist ministry outreach program from Alabama. There is an order of magnitude difference there.

But there are still a lot of crazy people out there who are ignoring all that, and preparing for the end of everything all the same.

Look, my criticism obviously doesn’t apply to everyone. Some of those people with SHTF videos on Youtube are lucid and actually quite helpful. One set of videos from a Tennessee nurse I found had lots of advice that I thought was really helpful, or at least might be. But frankly she was an exception. Most of those people were simply nuts.

I understand about being afraid of the future. I understand about how a person can feel like we’re speeding toward the cliff’s edge and that there is nothing we can do to stop it. But I hope all those people will take my word for it when I tell them not to be quite so afraid. I’m a gun guy. I believe in insurance against extreme events. But I know that insurance against events that won’t happen is more than just a waste. It gives you a false sense of security that makes things worse for you not better. So I hope you all will take my advice when I tell you that you need to get some perspective.

In a very real way I predict the future for a living. I spend 90% of my waking hours trying to figure out what’s coming around the next bend in the financial markets. I’ve built a long list of skills and tools to help me forecast what’s coming, and since I only get paid when I’m right about it, in all humility I think I’ve gotten pretty good at it. So maybe I can give you a more realistic look into what’s coming down the pipe than you’ve heard up to now. Judging from the videos, I certainly don’t think I can make it any worse.

Of course, looking too far into the future is virtually impossible to do with any accuracy. But if I can help thin the fog a little (even if I can’t completely sweep it away), maybe that will help you limit your preparation to those things you can both do something about, and that you might actually need.


The thing about a bureaucratic collapse of the state is that it’s usually right in front of you even if you can’t actually see it. You sort of have to look out of the corner of your eye. For example, the Victor Davis Hanson piece I mentioned a few days ago talked about how the cops in California’s central valley don’t bother to arrest and prosecute felons any more because they can't afford it. They would rather spend their time in what they view as more productive pursuits like writing tickets for productive middle class folks who are more likely to pay their fines.

That’s an important sign. It means that the government is no longer a service to the public and is now preying upon it instead. In that VDH piece the scale of that burden is still very small, but it will only get worse. And as soon as the that happens, the government becomes a force for disorder instead of order. California is in the beginning stage of that, and it will likely spread. Because of their poor finances New York, Illinois, New Jersey, Michigan and Connecticut are only inches behind them.

But don't go thinking there are safe areas. The pressures on the system are global so they will hit everyone eventually. Inflation for example is now a global story which is being systematically misunderstood by most analysts. The domestic tools we use for measuring inflation currently show it as modest and under control, but prices of imported goods are rising much more rapidly than the statistics would indicate.

Those rising prices, particularly of essentials like food an energy, will eventually make it impossible for the poor and working poor to make their way honestly. So apart from simply resorting to criminal activity, even the law abiding will cheat on their taxes and working off the books will become much more common place. That may seem like a small thing too, but over time it will contribute greatly to the breakdown of law and order in many poor areas.

Illegal aliens don’t report labor disputes; they don’t go to police when they are harassed by criminals. And when everyone begins to realize that the police and the government aren’t there for them either (or in the early stages - that dealing with them is more trouble than it's worth), even natural born citizens will begin to cope the same way that illegals do.

So the irony is that while the bloated bureaucracy struggles to keep it's bills paid by making everything that isn’t mandatory prohibited, going forward, less and less of it will continue to be enforceable.

You’ll know the end game of that breakdown has arrived when it becomes impossible for a policeman to pay his way on his salary alone. When that happens, he’ll naturally find other ways to supplement his income. Mexican policemen have been famous for decades regarding their ‘flexible’ revenue generation tactics. It’s easy to imagine the same thing happening here. But that isn’t to imply that there will be no more law and order whatsoever. If you believe you will be able to simply shoot people when they come to rob you and get away with it, you’re absolutely mistaken.

For rich and middle class America there will still be a functioning society of sorts. At least, they will still have to operate as if society was still functioning in every way. The state will still have access to vast resources - far more than enough to punish people that it sees an interest in punishing. And in the “up is down” world of government bureaucracy, that means that if you’re an otherwise productive citizen then it’s their interest to use the law as an excuse to come get what you have.

If you aren't poor, and therefore have something to lose, you’re going to be arrested and brought to court however minor the infraction. The rich will simply buy off the people they need to, to make things go away. But the middle class will have no choice but to bear the burden of what will amount to government sponsored injustice. The rule of law will become a randomly enforced and capriciously applied thing, but it will still be there; exactly as it is in much of the third world.

We will also eventually end up with no-go zones for the police, just as there are in Caracas or Sao Paolo. These will be poor crime infested neighborhoods where the gangs will enforce the only semblance of order. And as our society becomes increasingly stratified, personal security will become the explosive growth industry of the 21st century. Kidnapping will become a much more common crime, and private guard services will take on the work of keeping order (if not enforcing the law) as the police become more and more useless. All viable communities will become gated communities.

As our living standard falls, much of America will begin to look like the third world as well. Water and power will be less certain, but a complete and sustained breakdown will be rare. More likely will be rolling brown and blackouts while the EPA and the environmental groups duke it out with the energy lobby over who is bribing who.

But you ‘preppers’ out there should remember that while the third world is more violent and dangerous than the first world, it isn’t pandemonium. The violence and crime will for the most part be limited to those areas that any reasonable person will easily avoid. Don’t go to Bed-Sty, avoid South Central, and stay out of pretty much all of Camden or it's equivalent in other metro areas, and you’ll be 90% of the way protected from most of the new crime in third world America.

And when the crime reaches out to get you in your first world homes, put bars on your windows, get a big dog, and carry a gun to protect against muggings or kidnappings. Then don’t stop at red lights unless the traffic demands it, don’t ever travel alone, and you’ll be insulated from another 9.5% of the rest of the problems Americans will face. In the future 99.5% protection will be the very best anyone can expect.

As for the “waterfall moment” with regard to our poor public finances, I think what we’re facing is more the rapids than the waterfall. We’ll be bumped and bruised and bleeding before its finished and certainly much worse off than when we started. But I think we’ll survive it.

I recently did a back of the envelope calculation, and as of November 2011, in order to print enough money to pay off 100% of all our federally accumulated debt and unfunded liabilities, I figured that the purchasing power of a dollar would have to be reduced to roughly 1/3 of what it is now. Cumulatively that’s roughly 300% inflation.
(I can furnish the math if forced, but for now take my word for it.)

That means that if you make 75K per year today, imagine the lifestyle you’d have if you were forced to live on 25K. That’s what the future will hold for you if the government decided to use inflation to buy down the debt. Of course, that’s just addressing the federal liabilities, not the state or local ones. And it also assumes that we’ll stop adding billions of dollars to our problems each and every single day, or that the government won’t actually default on a bunch of foreign held debt, which many people think we’re likely to do. But we have to start somewhere. And at least we know that our worst case isn’t going to be like Zimbabwe. Not yet anyway.

We won’t become Somalia… more likely we’ll become Poland or Lithuania. And since that so, by far the best preparation someone could possibly make for when the SHTF would be to work hard, save your money in a form that will be undiluted by inflation, and get really, really good at a skill that will continue to have a demand whatever the economic conditions. Even today we’ve already begun to dispel the myth that someone who can’t handle basic algebra but has a masters in ‘Ethnic Studies’ has an education. They don’t. And that will become more and more obvious in the future.

The truth is, I know I’m shouting into the wind here. When you see a video of some 30 year old guy waving around an AK who is 150lbs overweight and looks like he couldn’t run from the refrigerator to the couch, he isn’t really preparing for the end no matter what the says. What he’s really doing is mental masturbation. He’s making himself feel better about his life not going the way he wants it to today, by worrying about something else that he can imagine will be worse. If he were really preparing for the scenario he imagines, he’d give up beer tomorrow and you’d never get him off the treadmill.

But if you’re the guy in that video, I don’t mean to ruin your fun. Hell I have an AK too (well… a WASR… but you know what I mean). I love the thing and have great fun with it. You should too. Familiarity with firearms never hurt anyone. And neither I think did imagining a future that’s worse than what we have. Dungeons and Dragons doesn’t work for some people I guess, and you don’t get to fire your guns while you’re playing that game.

What’s more, you don’t have to believe me if you don’t want to. I’m cool with that. Continue to stock those MRE’s if it makes you feel better. Everything I’ve said here is speculation (albeit informed speculation from a professional speculator), and my goal isn’t to lure you into some future vulnerability. But if you decide that you’d like to work with the facts more than the fantasy, I hope you’ll remember what I’ve said here.

I don’t think there is any debate that things will be worse for most Americans in the future than they are right now. But like most things, you really have to keep that in perspective. Preparing for a rainstorm doesn’t require the same thing as preparing for a flood. And it seems to me you'd really be best off making your life better instead of building an Ark in your front yard.

- Arguing For More Waste, Fraud And Abuse



The primary rule of bureaucrats is that the more of them you get, the more of them you get. Self justification is the absolute first priority of the bureaucracy, and the law enforcement arms of the government are no different. Triple the budget for the DEA as an example, and the very first thing those new DEA agents will do is go forth and find reasons to triple the budget again. Leave it to their discretion and they will be investigating every band aid, aspirin and ice pack in the continental US. It’s simply how the bureaucracy works.

The result of that bureaucratic bloating has another name come election time. When pols go out on the campaign trail they refer to it (or at least the results of it) as ‘waste, fraud and abuse” which everyone is always against, but no one ever seems able to eliminate. The reason is that it’s contrary to the nature of the bureaucracy. Nothing ever gets eliminated, no matter how wasteful, fraudulent or abusive.

Take the recent example of the ATF. This is the department who was responsible for buying thousands of guns illegally and allowing those guns to be sold into the drug war that’s being raged just across our southern border in Mexico. It was money wasted, involving a fraudulent practice, and an abuse of federal authority. What’s even worse in this case was that both Americans and American law enforcement officials have been killed by the very guns that the ATF knowingly sold to criminals, and before their fraud was discovered, ATF officials tried to use those sales as a political foil to justify even greater regulation of firearms.

In my world we were refer to that as a massive cluster-***k, but in the bureaucracy it’s just another day as usual.

Seizing this moment as an opportunity to stay firmly on the wrong side of history and to cheer the further erosion of American liberty, disco era ex-Manhattan district attorney Robert Morgenthau (the crypt keeper) has decided that this is the moment he needs to come out in the WSJ and insist that very same people that brought you the ‘Fast And Furious’ gunwalker scandal need even greater funding. Even when the tendency of liberals to be 180 degrees wrong is considered, this has to strike any reasonable person as flawlessly poor timing.

Morgenthau is 91 years old, so calling him ‘stuck in the past’ with regard to gun control gives insult to people like our own disco era politician, Frank Lautenberg, who himself is still as firmly committed as ever to the policy prescriptions of 1977. It's Lautenbergs assertion that so long as we keep throwing gobs of taxpayer money at the problem, we're bound to start making progress on it eventually. Give it another 40 years and things should start going our way.

But Morgenthau was a middle aged man when he was appointed to be a US federal attorney by John F. Kennedy, so when Lautenberg came on the political scene Morganthau was already and old man whose ideas were 20 years behind the times. Now he makes even "throw more money at it" Lautenberg seem like a forward thinker.

At this point, he’s simply beyond parody.



%%%%%UPDATE%%%%%

I think it's worth remembering that there is no such thing as an 'illegal gun' any more than there is such a thing as an 'illegal hammer', or an 'illegal chainsaw'. It's not the gun which is illegal but the means by which it was bought or sold. And although the reasons for this literary sloppiness by the media is transparent, we should make a point of calling them on it so they quit it.

Thursday, December 22, 2011

- Someone Please Ping Karl With This...



My buddy Karl used to think it was hysterical to see me flipping out over Jimmy Carter's legacy. My disgust with the man was what he thought was funny. In fact Karl has always been a clear eyed sort, especially for a New Englander.

Even Obama has had a hard time matching Carter in his determination to work against American interest. In fact, it's usually only when Obama has been at his worst that the comparison has been made at all (what with Obama's media sainthood and all).


Well Karl, here's another one for your growing file of Carter embarrassments which has to rank right up there with ex Carter Era "embassy hostage taker" Mahmoud Ahmadinejad being elevated to local fame and eventually becoming President of Iran.:

Ex-President Carter sends condolences to Kim Jong-un

- Morning Dope



I know you've never seen MSNBC's 'Morning Joe'. Almost no one has. It features rino ex Florida congressman Joe Scarborogh talking about how brilliant and insightful he is, and his empty headed blonde sidekick Mika Brzezinski acting as his liberal foil. Mika is arguably the dumbest woman on television, but it's not really her fault. None of her ideas are her own, so it probably isn't fair to blame her for them.

She may be a very nice person... it's tough to tell. She's certainly not a brilliant one. The general principle of the show (I think) is that squishy lefty Joe repeats some middle of the road Republican boilerplate and Mika challenges it from the position of the far left without bruising Joe's bloated ego. This is the kind of thing that passes for insightful dialog in the circles where Rachel Maddow is considered a deep thinker, and Ed Schultz is depicted as an philosopher statesman.

Mika's wooden expressions and comical repetition of what the New York Times editorial pages told her to think that day are fun to watch for about 8 seconds - long enough to hear Chris Christy nicely explain to her what an dope she is. But the one thought that jumps off the screen at you while watching this car wreck is that it's astounding how low the media will set the bar if your chatter is 'the right' chatter and you have a father who's well connected.

If there ever comes a day where liberal self congratulation gets the public ridicule it deserves, Mika will have no choice but to become a hermit - or at the very least, take a vow of silence. Until then though, if you want a textbook example of why nothing liberals ever try seems to work out the way they intend, take a look at Mika. No one that stupid would ever be able to do anything for a living but talk. And in Mika's case, she barely manages to do that right.

Wednesday, December 21, 2011

- When The Vandals Arrive...



As a gun guy, one of the very few in my well to do greater NYC sewing circle, people ask me often if I intend to run away to a ‘bolt hole’ in the country if things hit the fan. I always tell them no. I’d rather be in semi-rural NJ where I can be one of the very few armed people in an area where guns have been all but illegal for a generation, than cope with shooting my way into (and potentially out of) a country bolt hole.

Stories from post collapse Argentina have filtered up to me of people in the country trying to cope with thieves. It paints a very different picture than the hit and run – ‘never stop at the red light unless traffic demands it’ image of crime in the more populated areas. The thieves are in no hurry out there in the wilderness. They know that no one will be along to help. So they take their time and consume everything available like locusts, before raping and killing their hosts.

That’s the thing I’ve tried to get across for ages. When you’re out in the wilderness you MUST protect yourself, because there won’t be anyone else to do it. In the suburbs you only have to hold out until help arrives - and it usually will eventually. But in the wilderness, you have to stay awake forever and pick off strangers at a distance, even if the stranger turns out to just be the neighbor’s boy trying to ask for help fixing their well pump. Oh, and don’t go asking the neighbors for help with your well pump, because they may be feeling the same way about you.

But between the fair trade non-fat Carmel mocchiato of a university campus where coping with reality is a remote and almost irrelevant thing, and being forced to fight ‘blaster’ in the thunderdome for the planet's last gallon of gasoline, is a very long, bumpy, garbage strewn road where institutions fail a little at a time.

Crime is the first thing to arrive; lots and lots of crime. And I’ve invested a lot of energy into trying to figure out what that crime will look like when it arrives for me. Will it be gangs settimg up toll booths on I95, or carpet installers selling maps to the inside of my house to their criminal buddies? Now Victor Davis Hanson has saved me wondering about all those questions, because it’s already happening around his home in California’s once prosperous central valley.

His is an essay which I fear will be one looked back upon decades from now as describing ‘the moment when’. for me it conjures that imagined image of the sailing ship tipping off the edge of the world. I can’t tell if that’s what he meant or if it’s just a product of his writing sounding like what he’s been reading. But if you translated his essay into Latin (with appropriate backdating… references to cars transformed into horses, power lines to aqueducts etc etc), scratched it onto Velum and told people that you dug it up in some 5th century cisalpine settlement, you’d get people to believe it. His is a story of a once prosperous society in the midst of a tragic bureaucratic decline:

The city of Fresno is now under siege. Hundreds of street lights are out, their copper wire stripped away. In desperation, workers are now cementing the bases of all the poles — as if the original steel access doors were not necessary to service the wiring. How sad the synergy! Since darkness begets crime, the thieves achieve a twofer: The more copper they steal, the easier under cover of spreading night it is to steal more. Yet do thieves themselves at home with their wives and children not sometimes appreciate light in the darkness? Do they vandalize the street lights in front of their own homes?


The soft spoken classicist cum farmer has lived on his family farm for all but small parts of his life. And as graphic as his description is (it was a real challenge for me in figuring out which paragraph to excerpt) I have even more trouble wondering what this must feel like to him. I have never lived more than 30 miles from an oil refinery. Even as my personal prosperity has increased, being around the bombed out urban blight and the human scavengers that pick at it has always been more comfortable for me than many. To be honest I usually feel better when I see the human vultures overhead because I don’t have to wonder where they’re hiding – or what they may be plotting.

But for him it really must feel like the end. What’s more, since his knowledge of history is substantial, he must know that the chance of reversing this decline and returning to former prosperity is somewhere between slim and none.

I’ve been a great admirer of Augustine of Hippo (St. Augustine to we papists) all my life. VDH must feel a tragic commonality to the great man. Augustine penned his two monumentally important works ‘Confessions” and “City of God”, between 397 and 410 AD. In the year 410, the Visigoths sacked the city of Rome, and the empire’s decline went into high gear. This I think tells you as much about how professor Hanson feels watching civilization crumble around him, as anything else.

Don't miss this essay. It's depressing, but I think it blows away a little of the mist of the future.



%%%%%%%%%%%%%%%UPDATE%%%%%%%%%%%%%%%


I've been reading the comments on Dr. Hanson's post over at NR and I've got to tell you, the only conclusion I can come to from reading them is that very few people seem interested in the reality of the situation as much as they are some political mythology.

By far the most delusional post was the one by one of NR's resident liberal trolls who wrote an eloquent apologists creed (which even cited the federalist papers) explaining that all this was as a result of the failure of California to be liberal enough. Personally I think he should lay off the ganga.

To be fully honest, the rest are almost as bad - conservatives too. There are dozens of people advocating various forms of individual violence from posse formation to trap laying and homicide. California may be broken, but it's not that broken, not yet anyway. And if Dr. Hanson and his neighbors start shooting up the San Joaquin criminal element, the police will only discover that there are some felons worth prosecuting after all. Oh what glee the LA times and the network news people would spout for the chance to see someone like Victor Davis Hanson charged with the murder of a minority criminal. What nobility they would find in the that particular dead guy.

Those commenters don't seen to realize that this is a Napoleonic issue. It's a question of the vulnerability of the fixed fortifications. So long as you're in one place and your enemy is mobile, you lose. It won't be possible to keep the criminals from looting the central valley until until the system changes or completely falls apart.

One commenter did get it exactly right when he said that this is PRECISELY what the liberal policies of California have been aiming for. No rule of law, no private property protection, punish the productive to subsidize the unproductive, throw open the borders, and ignore all crime. They shouldn't be surprised it's worked out this way, they should be high five-ing each other and celebrating a job well done. These consequences may be unintended on the whole, but in each of it's small parts it's exactly what they intended.

The situation in California is tragic, but at this point inevitable. And unfortunately the future is already certain. People like Dr. Hanson will be able to preserve their their family farms, but only at a cost. Very soon, it will no longer be profitable for anyone. Meanwhile, the lifestyle he remembers of a free people in a free land can no longer be saved at all. It's already gone. Because the people of California are no longer a moral enough people to be fit for self rule. No liberal anywhere is.

Tuesday, December 20, 2011

- Newt's Bad Lipreading



I think it would be funnier if I could be a little more certain that it wasn't what he was really saying.

- Tea Party Patriots Gun Posession Arrest




A co-founder of the conservative Tea Party Patriots group was arrested at a New York airport on Thursday for gun possession, authorities said.


This is another obviously bogus gun arrest. He was following the rules for safe transport of a firearm. It was unloaded, and locked in a case along with 19 cartridges. He's only being charged with a crime because of a technicality having to do with federal nature of firearms regulation.

He had a California permit, but no NY permit. How he came to be boarding a plane in NY is a mystery un-described by the Reuters piece, who didn't feel it was an important detail of the story. He could very well have been changing planes while going from LA to North Carolina, two locations where his possession of a gun in that manner would be perfectly legal.

I think it begs the question of political motivation for the arrest, but read the article and decide for yourself.

BTW a national right to carry law would prevent this kind of BS.

%%%%%%%%%%UPDATE%%%%%%%%%%

There is already a federal law designed to prevent this sort of thing, but apparently vociferously anti-gun Mayor Bloomberg has encouraged his police force to ignore it.


Here is the relevant portion of the FOPA (firearm Owners Protection Act):

One of the law's provisions was that persons traveling from one place to another cannot be incarcerated for a firearms offense in a state that has strict gun control laws if the traveler is just passing through (short stops for food and gas) and the firearms and ammunition are not immediately accessible, unloaded and, in the case of a vehicle without a compartment separate from the driver’s compartment, in a locked container.[7]

An example of this would be that someone driving from Virginia to a competition in Vermont with a locked hard case containing an unloaded handgun and a box of ammunition in the trunk could not be prosecuted in New Jersey or New York City for illegal possession of a handgun provided that they did not stop in New Jersey or New York for an extended period of time.

- Choosing Life In The Dependent Underclass



There is a very interesting article on Poverty here by Megan Mcardle, the essence of which can be found here:

If poor people did the stuff that middle class people do, it's possible--maybe probable--that they wouldn't be poor. But this is much harder than it sounds. As John Scalzi once memorably put it, "Being poor is having to live with choices you didn't know you made when you were 14 years old." Which often means, he might have added, spending your whole life doing the sort of jobs that middle class people sometimes do when they're 14. It isn't that people can't get out of this: they do it quite frequently. But in order to do so, you need the will and the skill--and the luck--to execute perfectly. There is no margin for error in the lives of the working poor.


I find it a particularly interesting piece because she criticizes both the liberal and conservative belief that if we get the policy levers just right, this is a problem that can be fixed. 'Poor people make choices' she says irreducibly.

But for myself I'm not convinced of the hopelessness of the situation. If you really believe that poverty itself is the problem and not the hardship that springs from it, then make it it worse and fewer people will choose it. Of course, this would involve hardening your heart to the increase in suffering that would result. But if 'bad' choices are made worse then fewer people will choose them.

Or you could as easily raise the 'upside' of doing things right. If you were to increase the gap between rich and poor not decrease it, then the greater benefit of being 'rich' would be attractive to more people. And if poor is made worse, then more people will choose the former than the latter. This is really beyond debate.

Many people rise from poverty. It's not easy, but it's still more possible here than it has been at any time in human history. Even with the recent reversion to the mean that's come from the Obama policies designed to prevent success and increase government dependency. And true to liberal form, his goal of 'reducing the gap' between rich and poor will be more destructive to the people he's trying to help than those he's trying to hurt.

But I do think Megan is right about one thing. You can't force people to be middle class. You can't (or at least shouldn't) force them to work hard and fret about their child's education. You can't compel them by force to be upwardly mobile. If they don't want it, they don't have to have it.

This obviously doesn't fall across strictly racial lines, but I think there is a case to be made that some portion of every population would simply rather be slaves.

- The "Unthinkable" Euro Breakup



A lot of the Euro-crats have declared the breakup of the euro an "unthinkable" concept. But the nearly universal reaction of those of us in the finance markets has been to say "Well we're thinking about it, so I guess it isn't unthinkable after all." But what if we're making a categorical error here? What if they mean that it isn't an unthinkable concept for them, but instead are telling us that it should be an unthinkable concept for us?

What if they're actually trying to tell us that we aren't allowed to consider it, and if we do we'll be punished? Suppose they mean that they intend to co-opt the banks and the financial markets as much as is necessary to make them say what they want them to? What if what they're saying is that they have absolutely no intention of allowing the Euro to breakup whatever the cost? Every day that ticks by, one more pleb gets bored with the story. Every time they add another layer of derivative complexity to the funding plan one more journalist gets confused away. Pretty soon they start calling Eurosceptics 'maniac's' in the Euro friendly leftist media, and then it's all down hill from there.

We in business are goal oriented, but politicians are not. We look at the Euro and rightly say "This can't possibly go on for ever." But maybe it doesn't have to last forever... it only has to last longer than us.

Maybe the temporary patch has become a permanent policy, where nothing ever gets 'fixed'. Look at Japan, entering it's second decade of being broken. When we look at that situation we see a an economy that has spent nearly an entire generation hobbling along, barely keeping up. Lackluster growth, sclerotic personal income and minimal opportunity for anyone have just been something the Japanese have gotten used to. It's a limp, lame, sickly thing the Japanese economy.

But that's not what they Euro-crats see when they look at Japan. Instead what they see is a docile populace that is grateful for whatever crumbs they're given by their betters, and is supremely ready to be ruled. They see a population that has learned to cope. That's precisely what they want in Europe. Much has been made of how it's impossible to get the northern and southern Europeans to take an equivalent view of the world. But according to the Eurocrats, the Greeks and the Britains, and the Lithuanians don't have to feel the same, they only have to act the same.

These are not people who will ever accept that markets are an objective lens through which to view reality. They are people who believe that they must "reestablish the primacy of politics over markets", and 'reality' be damned.

Monday, December 19, 2011

- My Kind Of Crazy



This is an attribution heavy post. Jonah Goldberg made the original comment that Newt might be a good candidate to rise to the call if you think these are crazy times. I read the original piece but found it unpersuasive. The way that Mark Steyn put it this AM made it somewhat more convincing. But it seems to me that if you really do think these are extraordinary times, then there is really only one guy you should consider voting for.

Personally I am not a Paul supporter. I think he's VERY helpful to the debate, but like most extreme libertarians, I don't think he's thought through the consequences of his policies very well. You can have too much of a good thing, and in his case that may very well be what we get. He'll overturn so many apple carts that he'll probably get himself impeached, or be target of a military coup or something.

But if you really do believe that anything less that a radical take on politics won't be enough given our peculiar times, then it seems to me that only he can deliver it. Newt will try to build monuments to Newt. Ron Paul would rather let his monument be the way he tears down all the others.

And I would vote for Dr. Paul in a minute before seeing Obama re-elected.

- A NSFW Kim Jong Il Comment



He was more of a cartoon character than the NYTimes would have us believe. Regrettably, the nuclear weapons he had were real enough. If only we could have sent him another couple of hundred billion dollars in aid. I'm sure that would have been enough to convince him not build them.

I was watching Kevin Williamson intellectually batter some poor dumb socialist from the LATimes a few months back on a blogginheads post and he said something like the following:

Socialism is either the most unlucky ideology in all of history or there is really something wrong with it as a belief system because everyone it seems to attract turns out to be such monsters.


Hard to find a better description of Kim Jong Il that that. I'll say this much, he certainly lived the dream when it came to totalitarian socialism. He actually did all the things that people like Andy Stern and Van Jones would have us do here. He might not have conquered a continent or exported his socialism across the globe, but no one can say he didn't try it all at home.

Now someone has dropped house on him or something. Good riddance.

Friday, December 16, 2011

- Hitchens RIP And A Short Note On Atheism



Christopher Hitches, famous for his thoughtful and articulate criticisms of religion and faith in an afterlife, has died of cancer. Most of the notices I’ve read have wished him a ‘glorious surprise’. Although I don’t know that my meager level of faith justifies it, I see no harm in wishing him the same. I didn’t know him at all – never met him. But the people I know who did all spoke well of him, even while disagreeing vehemently with his ideas.

I personally, am not very religious. I’m a Roman Catholic, but not a very good one. That’s more because I have such a big problem being a ‘joiner’ than any specific reservations about the church. In fact, I’m a fairly ardent supporter of the Church of Rome in principle, if not in actual practice. A civilization should have it’s guardians of tradition, and in the west I think the Roman Church has filled that role quite well.

Most of the self declared Atheist I know find that concept very offensive, and are quick to raise the recent sexual scandals or a vague reference to the crusades as a counterpoint. But most of them don’t really understand either of those events in context. The whole point of religion is to set a moral guide post for civilization as a whole. Any religion, all religions, are a means of communicating the principle of what is right and what is wrong, to subsequent generations. And while those examples may provide an example of specific people disregarding the morality of Christianity, neither of them invalidates the Christian moral ethic in any way.

The sexual scandals were sins of men. It’s true the sins were committed by members of the church, but the institution of the church made it clear that it didn’t approve. When a policeman takes a bribe we don’t declare all police departments invalid. Not even if the person taking the bribe was a person of power an influence in the force. What’s more, we don’t reject the concept of law, crime and punishment. In other words, we blame the individual for the sin, not the institution. That’s how it works in the west.

As for the crusades, they only look bad in the post-colonial light of the modern western university. Taken in proper historical context they really don’t seem such a great sin at all. Yes, people died, and many individual sins were probably committed between here and there. But I would venture to speculate that there were no more (as a percentage) than the sins committed in ‘good wars’ that post colonial western intellectuals approve of. The animosity that the modern western university has to Christian institutions is certainly well known. So all their criticisms need to be viewed in that context, particularly those pertaining to history where their propensity for applying modern standard to ancient events is well known.

Ask your average self described Atheist, and they’ll tell you that they reject Christianity completely. But ask them if they think killing someone (as an example) is a moral act and they will unambiguously say no. On the other hand a devout Muslim, would answer the same question as ‘maybe’, since there are lots of circumstances where killing someone under Muslim morality is perfectly fine.

My point is, someone who calls themselves an atheist is usually someone who has rejected the mysticism of western religion but continued to embrace the morality of it. But the morality is the meat of the message, the mysticism is really just a tool used to communicate it. So in that way I don’t think they are quite as ‘non-believing’, as they like to present themselves. In most cases I think they simply don’t realize the role that faith plays in the lives of every human. They are like fish who have declared themselves free from the pernicious effects of drinking water. It never occurs to them that the fluid that surrounds them in every direction is the very same stuff.

It’s very tough to establish an institution of any kind and make it last as long as the Church of Rome has. Simply being able to communicate the same moral message to the profoundly changing masses over that long a time frame is testimony to the strength of it. But that isn’t to say that the means of communication hasn’t been profoundly changed between its beginning and now. In many circles, the parables and mysticism that were so effective at spreading the moral code in the late Roman Empire are now discarded as ‘spaghetti monster’ nonsense. But if you query those very same people about their moral code, it’s clear the message has been received by all but a very few of them – even as they utterly reject the old means of its communication. Go figure.

In my experience, the vast majority of Atheists are so consumed with themselves that it never occurs to them that their personal moral code is anything but a permanent fixture of the universe. They don’t realize its origins or the mechanism by which it was transmitted to them. What’s more, it never occurs to them that someone who has a difference with their moral code, your devout Muslim for example might see it any other way. In other words, in most cases atheism is less about not believing, and more about not thinking.

But one could never say that about Christopher Hitches. If absolutely nothing else he was thoughtful and articulate. But that isn’t to say that this thinking wasn’t deeply flawed. He was a socialist, so his attempts at intellectual consistency can’t really be faulted. So rather than saying his fault was a lack of depth like so many Atheists, I’d say his fault was one of perspective. The atheist, even someone like Hitchens, believes that his universe begins and ends with his experience of it; while the view of the faithful, even someone who is poor a practitioner as me, has more continuity across time than that.

It’s not just the concept of an afterlife that gives solace to the believer, but the idea of playing a small part in something more permanent and continuous than ourselves. The society we build by applying our moral code to the game theory of human relationships outlasts us. And when we consider the thought of our children or grandchildren growing up and raising families long after our departure, while subscribing to the same beliefs about right and wrong, we can get comfort from it.


But if honest about it, the true Atheist is denied that comfort. Their moral code can be seen only as something to be utterly reinvented both by them, and by the next and every subsequent generation. If throwing out the baby and the bathwater is the right thing to do for them, then they shouldn’t be surprised when those that follow their example do the same with their morality however it's defined. In that constant state of reinvention of the ‘truth’, the connection between the present and both the past and future, is totally severed.

Atheist usually respond to this by claiming that theirs is a belief only in the objective and permanently verifiable. They claim their view is the scientific method applied to the full human condition. But their moral differences to the aforementioned pious Muslim show the falsehood of that statement. Your western Atheist will oppose honor killing as an example, not for issues of game theory where it works out just fine, but for reasons of western morality. They think its wrong – even if they can’t adequately explain exactly why exactly they feel that way. The point is, they believe the moral message of Christianity, even as they reject the messenger. Even as they dispute the very existence of the message, they continue to believe it.

Hitchens was a clever and thoughtful man, and I wish nothing but peace and comfort to those who feel his loss. Sometimes having a strong opponent makes you a better combatant. And in that way I’m sure his efforts dramatically improved the modern discourse on the role of faith in society. In that way we are all better for his having passed this way. Even if it may not be in a way that he intended.

Thursday, December 15, 2011

- Yahoo Mail's Last Straw


Yahoo's contempt for their customer base is well known. But you know how it is with email accounts - you'd rather not change it if you can avoid the hassle, so the threshold for the amount of crap you'll take is set pretty high. All the same, I think Yahoo Mail has finally reached that last straw with many of it's customers.

Over the last few days, Yahoo has begun forcing it's customers to upgrade to it's latest version of web based mail. This gives them better tracking, or more control or more something - honestly I have no idea. But it must give them something they want or they wouldn't have forced me along with the rest of their customers to upgrade.

Now it turns out that the upgrade has also caused all Blackberry devices to no longer be able to access yahoo mail. I've been on the phone with a combination of AT&T, Rim and Rim Server support all day. In the interim, I've found a hack that let me downgrade my version of web mail back to the old version (which is a relief) but it hasn't changed the fact that my blackberry access no longer works.

So if you need to reach me over the next few days, send me a text. In the meantime, it looks like I'm going to begin the long hard slog to change over from yahoo to gmail for my personal mail. I don't want to do it, but the way I see it, yahoo has given me no choice.

- A Squawk Box Note



This is one quick note for all of you guys watching Squawk Box right now. If they have a 'professional investor' on who starts talking about the things that government does right, then as sure as the night follows the day, he's got at least one deal that depends on government funding. It's shameful, but regrettably true.

If you remember who their names are (instead of blocking them out like I do) then in the future you'll know who is 'talking up their book' and who isn't.

PS I have a good friend who has been working on the 'control systems' theory to be applied to smart grids. It's fairly complicated stuff for the average Joe, and to be completely honest about it, he's only given my the 50K foot view. But the upshot of it all is that making it work involves allowing the government to have complete discretionary control of your energy usage.
No thanks.

Wednesday, December 14, 2011

- NJ Commuter Relocation Guide



I'm re-posting this in light of the awesome map (posted above) that has since been created. It provides a little more data, and I've woven it into the actual texts.

Presidential rhetoric notwithstanding, most of the people on Wall Street don’t make all that much more than everyone else. And that means that they can’t afford to both live in Manhattan and have a family. My buddy Rob does pretty well, but he’s in that range (like most of us) and is considering moving his happy family to this side of the river. So in the interest of helping him out, I thought I’d write up a little guide for those Wall Streeter’s looking to crossover to the land of the ugly license plate.

The central issue of moving to any one of New Jersey’s commuting towns is, as you would imagine, the length of the commute. When I lived in Manhattan and was working at Moore Capital I lived right around the corner, so my commute was further vertically than horizontally. When my wife talked me into leaving town, I didn’t want to cope with a long lonely train ride. And spoiled as I was, I had this fantasy that I could move out of town and have a roughly 1 hour door to door commute. But in practice that doesn’t really work out very well.

A one hour commute to Penn Station New York will leave you in some of New Jersey’s most undesirable towns. No upper middle class Wall Street staffer is going to raise a family in Newark, or East Orange or Union City. There are nice towns with good schools within 1 hour of midtown, but for reasons I’ll discuss below you will probably want to stay away from them. You can get much more for your money if you are willing to travel about another half hour like the rest of us.

In terms of a door to door trip to midtown, you should really be thinking about a 1.5 hour commute. Further if you can stand it. But at a minimum, you’re really looking at roughly a 1 hour train or bus ride, and whatever driving and scurrying you need to do to get to and from mass transit. That opens up lots of possibilities, but eliminates some others. Basically you’re stuck to the north – east part of the state, and there are some other filters you can apply to winnow them down further. In the interest of brevity, I’ve broken them down by county:

Bergen County:
(This is shown on the map as Republican 'Christie country". It may seem that way to a Democrat, but as a conservative let me say that this is really the only part of the map I dispute. There is no part of NJ above the Turnpike that is conservative as it's understood in the rest of the country. And my personal experience is that Bergen county is at best a split.)

Commute: The problem with commuting to Bergen county is that the trains only go to Hoboken. From there you have to switch to the comparatively seedy looking PATH trains. Personally I find the trip depressing, but even more than that, it adds 30 minutes onto the length of your trip, so you can’t get very far out of town with your remaining time. This leaves you more subject to the snows and traffic on the bus or in your car.

Worst Part: The lack of trains to NY and abysmal public schools. Plan on sending the kids to private school, in which case you might as well move back to Manhattan.

Best Part: It’s a pretty, if somewhat crowded area that’s more like Rockland County NY.

Taxes: High. Excluding the actual state house in Trenton, this is the most pro-tax (liberal) area in the state. They are simply thrilled to have taxes go up and naturally, they always do.

Aesthetics: I like it…. If you go far enough out of town it can be quite pretty. Like I said, it’s a lot like Rockland county New York.

Value: Poor. It’s crowded, and that means that if you want to live in a nice house with a nice yard and a pool you’ll have to really pay up. In terms of what you get for the money almost anywhere else that meets your minimums will be better.

Passaic County:
(This is a mix between "friendly white families" and "rednecks and retired hippies". With that said, let me say this, all things are relative. NJ is a sort of mecca for rudeness and it absolutely permeates everything we do. Out governor is famous for it. So 'friendly' is the relative term here. the rest sounds about right to me.)

Commute: The trains still only go to Hoboken, leaving you on the depressing PATH trains or stuck in traffic.

Worst Part: Paterson. It’s been a depressed city for years and shows no signs of improving. The proximity of such a low income area to relatively high income areas also causes a higher crime rate relative to other towns. The public schools are still awful in all the areas where you can realistically commute.

Best Part: If you don’t mind commuting further and driving a lot, there are really nice towns in the north where you won’t even know you’re in New Jersey. Rent a movie called ‘the station agent’ to get a look at some.

Taxes: High. If you live in a county that contains an economic sink hole like Paterson, everyone else’s taxes have to rise to compensate for all the theft, graft, extortion and union malfeasance that go along with NJ cities.

Aesthetics: this is Tony Soprano country. If you liked the way the scenery looked on the Soprano’s TV show, then you’ll like the look of the nicer parts of Passaic county. Personally most of it looks to me like a low rent version of Bergen County. Like the difference between the upper east side, and queens.

Value: Actually pretty good. The high crime rate and difficult commute drives down home prices relative to other areas. But you probably have to be more than 1.5 hours away to make it really work.


Hudson County:
(This is shown as a mix of "Hipsters" and "Poor minorities". Think gentrified urbana, without the wealth.)

Commute: From most of the county it’s quite good, but it has all the same problems that living in Manhattan does.

Worst Part: Jersey City. It’s a sink hole in every way.

Best Part: Hoboken… if you’re a 25 year old analyst who can’t afford to live in town.

Taxes: Ridiculous

Aesthetics: Like I said, if you’re single it works… otherwise…look elsewhere.

Value: Be serious. This isn’t a suitable location for raising a family. Move further away or tough it out in town. You’ll thank me.


Essex County:
(This is "The Melting Pot" and "Poor Minorities". My description is more helpful if you ask me.)

Commute: First rate.

Worst Part: Newark and much of the surrounding area. If you need me to explain this you have bigger problems than I can solve for you.

Best Part: There are some towns like Short Hills which exist as upper middle class islands surrounded by a sea of urban blight. But you will pay more in those towns than anywhere else in the state. The contrast in how little you get for the dollar is breathtaking.

Taxes: Preposterous...even by New Jersey standards. Newark and the surrounding area are the corruption capital of America. You’ll pay and pay and pay, and get virtually nothing for it.

Aesthetics: This is the area that NJ gets its reputation from. I’ve described it in the past as an urban madmax set. Most of it is simply horrible.

Value: Horrendous. If you buy in one of the islands like Short hills, you will get less for your money than you will anywhere else in the state. And for your trouble you’ll have a higher crime rate, and taxes that would make a socialist grumble.

Union County:
(This is "Russians, Polacks and Toxic Fumes". They forget all the Cubans in Elizabeth, and the 'islands like Westfield, but the rest isn't far off.)

Commute: Like Essex county, Much of Union County is easily accessible. But none of the areas where you want to live will be.

Worst Part: Actually I lied; the city of Elizabeth is the town that gives NJ its reputation. It has all the charm of Jersey City with the government efficiency of Newark. I get uncomfortable just driving though it.

Best Part: Westfield or Summit. Like Essex county, union has it’s ‘islands’, and they have the same problems but to a somewhat lesser degree. The western parts of the county are quite nice too, but are really stretching the limit in terms of commute time.

Taxes: Lofty, but not choking like Essex county.

Aesthetics: The western parts like Gillette and Stirling are quite nice. The islands are a little crowded for my tastes.

Value: Westfield and surrounding area are still delivering very little for your money relative to the other areas, but aren’t shocking like Short Hills. Taxes are steep and you can’t get a parking space at the train station. The wait list for it extends decades into the future.

Middlesex County:
(This is shown as a mix of "Indians, Jews, and Drunk Rutgers Students" The western most part pokes into the McMansion area.)

Commute: Well that depends. The places that are easy to commute from like Woodbridge are undesirable for other reasons and the best areas are further. On the whole I’d call it largely accessible, but mostly by bus.

Worst Part: New Brunswick, but that still isn’t so bad. Its home to Rutgers of course, and has a high crime rate and is a sink hole by and large, but very little of it overflows into the surrounding areas.

Best Part: Most of Middlesex County isn’t bad, but it isn’t all that great either. It’s largely a blue collar area that is without major vice or virtue. As usual, the western parts are the most upper of the upper middle class suburbs. If you’re an Indian immigrant (as many wall streeter’s are) then you probably know that Edison NJ has the highest concentration of Indians in all of North America.

Taxes: Passable - you know… for New Jersey.

Aesthetics: Being a blue collar area, much of it is less than gorgeous. But it’s not the thunderdome like blight of Essex or Union Counties either. For the most part it’s clean and relatively safe.

Value: Not bad, but there aren’t a ton of place to choose from. You’ll probably end up looking in North, South, or East Brunswick. But once again, these towns will put you on the bus and at the mercy of the weather and traffic.


Somerset County:
(Somerset County is half "Raritan Valley Commuters" and half "Executives in Mansions." In defense of my buddy Vishnu who left a comment on the original post, Morris county is all "Mansions" and is just to the north.)

Commute: The nice parts of Somerset county involve changing trains in Newark, and that places most of them outside the 1.5 hour limit. Even the busses are very limited.

Worst Part: In truth, apart from the commuting distance, I don’t think Somerset County really has one. If only it were a little closer.

Best Part: Again, there are so many truly beautiful areas that it’s hard to choose. For my money I think the area around the national equestrian center in Far Hills is about as pretty as any countryside in the world. Anywhere from Branchburg north qualifies as truly beautiful.

Taxes: the schools in Somerset county are first rate, and come with a first rate tax bill. They are lower than breathtaking Short Hills, but higher than most everywhere else in the country. But you have to live somewhere. Taxes aren’t the reason to avoid Somerset county, the distance is.

Aesthetics: Honestly beautiful, almost everywhere.

Value: You get a lot for your dollar but you pay for it in commuting time. But if you can live with 2 hours each way you get a lot for it here.

Monmouth County:
("Banker's And Businessmen" is the bulk of the country, with a fringe poked into all of the others around the periphery.)

Commute: Most of the county is unreachable in 1.5 hours. But there are several nice towns inside the 1.5 hour limit. Full disclosure, this is where my wife and I chose to live.

Worst Part: Like Somerset County, there aren’t really any big problems in Monouth county…. Maybe Asbury Park, but that’s too far to commute. The traffic on Rt 9 might be a problem for some.

Best Part: Colts Neck. It’s pricier than the other commuter towns, but that’s because the taxes are lower. It’s the most upper of the upper middle class areas. The town of Rumson is as nice as Beverly Hills, but if you can afford to live there, then you can afford to live anywhere.

Taxes: It ain’t cheap but there are worse in New Jersey. The lower income towns in Monmouth County have a high percentage of illegal immigrants, and they don’t draw a lot in social services so it’s cheaper than other areas.

Aesthetics: My town is all horse farms and apple orchards and we’re 20 minutes from the beach. I think Somerset County is prettier, but Monmouth has its advantages. One of them is that the weather pattern is solidly mid-Atlantic, making the weather more like Baltimore than Boston. The Connecticut suburbs are firmly in New England so there is quite a spread in temperature between here and there. That was what pushed my wife over the top.

Value: Actually pretty good all things considered. And there is probably more breadth and diversity in the housing market here than in any other commuter accessible area.


There are other nice parts of the state too but they aren’t generally commutable. I knew a guy once who commuted to New York from Allentown Pennsylvania, so it can be done. But it’s not going to be a good fit for most people. With that said though, Morris and Hunterdon, and Eastern Mercer counties offer all the benefits of Somerset County with lower home prices and taxes. But 2 hours or more each way seems a bit much to me. Some people can make that work and if you can, include them in your search too.

These are some very broad brush strokes, and they leave out many important details. There are 'less nice' places in Somerset county and beautiful places in Essex. It's not all homogeneous (except for Middlesex county where decent blue collar homogeneity is sort of the point.) But on the whole, New Jersey is one of America’s best kept secrets. But for the government it would be a really terrific place. I'm sure if you give it a fair chance you'll come to see that the same as I have.


%%%%%% Out Of State Addendum %%%%%%%

For you folks reading this from out of state, there is a peculiarity of NJ public finance I need to explain. The public schools here are funded ONLY though property taxes. There are some complications to that, but for the most part it means that if your taxes are higher, your schools are at least better funded. In Bergen and Essex counties the institutionalized corruption means that more money equals more money wasted and the school performance won't improve at all. There are other complications too like Abbot districts where the taxes of a rich town are given to other impoverished towns for their school boards to steal.

If you want good public schools you should realistically be looking at Somerset, Eastern Morris, and Northern Monmouth counties, or the far western portion of Middlesex county.