patrick.net

My prediction is that there’s gonna be a backlash against the federal government when the analog TV signals go dead next year.
Do you think the politicians would be crazy enough to do this in an election year. We actually have a bit more time before the cutoff -- Feb 17, 2009. Oh, and the backlash will be against the cable companies and their crowded, expensive pipes (where the HDTV channels get compressed more than on the free, over the air broadcasts). At any rate, you can probably figure out that my household does not have a cable bill, yet has more channels than I could ever watch (5 PBS channels for KQED in the BA alone!) Thats right, TV antennas will make a comeback and of course, all this will be exacerbated by FBers who have to unplug their cable boxes and will discover free, wireless digital TV on their soon to be repoed high def plasma screens :-)

EBGuy,

Yeah, the local PBS affiliate here has up to 5 simulcast DTV channels www.idahoptv.org/schedules/digital.cfm . And the transmitter is up at the Bogus Basin ski resort about 6,000 ft. above the plain. So we all have direct point-of-view direction to the transmitter from our cheap $30 antennas bought at Home Despot that we put up in the garage rafters. Free is good. Why pay cable?

Guide for prediction:

1) Calculate the maximum dollars exchanged.
2) Figure the absurdity of the political claim.
3) Make certain prediction.

Like this:

A second nuclear reactor at the Watts Bar Nuclear Plant Approved.

hmm, who's bearish now:

Experts were wrong on subprime loans

I can sell you some uranium if you like. That might be one reason why the Federal govt just claimed land rights back from the Aboriginals in the Northern Territory where most of the uranium is, in the interests of halting 'pedophilia and child abuse' in the NT, although the problems have been known about for years. Coincidence? It was a remarkable act of timing.

Astrid, I protest!

The sushi-loving/apolitical/home garden/quick irony element is not so generously supplied here that a reduced presence would not be very sadly noticed!

DS,

how is the water crisis going down under? Any long-term fixes?

I continue to be very bullish on Australia, the country with the largest known uranium reserve in the world. Apart from BHP, are there more focused uranium explorers in Oz just like CCJ in Canada?

Randy,

I have a question regarding securities held at brokerages.

What are the risks and possible scenarios in which one can lose his money (not through investment) should the brokerage goes under? I understand that SPIC insures up to $500K worth per account, what should one do if let's say, one has more than that at a certain brokerage? Thanks.

@ OO

I am excited for Australia as well. I even filled out a visa form 8 months ago for grins. According to them, I am not a native English speaking person because I am a US citizen. It does not matter though, I scored high on their point system.

I work in the nuke industry and I hope they do start building nukes. I don't care if I have to immigrate to Australia to get on the nuclear renaissance. I would like to stay in the US. I just wonder if staying with a country (USA) that I consider on the slide towards bankrupcy is better than moving away to the southern hemisphere from everything and everyone that I know.

OO Says:
how is the water crisis going down under? Any long-term fixes?

There were 3 weeks of solid rain in winter in NSW, which brought up dam levels somewhat, but they're still going to go ahead with a $2bn desal plant, unpopular tho it is in some quarters. It's going to make water bills expensive for some time to come. They say they have gone to far to reverse the decision now. The Murray-Darling system is in crisis still, and it's become a political football with the Feds grandstanding over the states in an election year -- Howard has decided to run with a 3-legged horse after Victoria pulled out of a cross-border approach to managing the river system...

I continue to be very bullish on Australia, the country with the largest known uranium reserve in the world. Apart from BHP, are there more focused uranium explorers in Oz just like CCJ in Canada?

There has been speculation on uranium futures for some time since GBW started talking about renewing US nuclear power stations, once things started getting a bit hard in the Middle East. For some reason, it didn't occur to me to invest in uranium stocks given all that mucky unpleasant background. I don't know who has mining rights to uranium in Oz particularly, a lot of it is in the NT apparently, and otherwise spread around. I don't really track uranium as an investable resource, as 1) it's a bit scary as a substance, 2) it's expensive to build the power stations, 3) uranium itself will run out very quickly if uptake is high, say within 40 years, 4) I just don't chase after commodities returns in markets -- I can only hope my superannuation scheme has some money invested in it if it's an earner...

thenuttyneutron Says:
I even filled out a visa form 8 months ago for grins. According to them, I am not a native English speaking person because I am a US citizen.

hmm, it is debatable sometimes -- they might make you take a TESOL course or two, and perhaps some accent correction classes ;)

DS,

I am not sure I can get my accent fixed. I lived in Texas all my life until I moved to Ohio in August 2005. These people in Ohio have some strange pronunciations of common English words. I don't think I will ever get rid of my Texas accent. I can however yell many stereotype Australian phrases that I learned on TV :)

Also don't worry about the Uranium Supply. If you let the nuclear engineers such as myself do our job, we will build reactors that make more fuel than they burn. We could extend the nuclear fuel supply out for thousands of years. When we solve the problems of fusion, we will have more fuel than we will ever be able to burn. I have a hunch that the Inertial-electrostatic confinement work by Dr. Bussard will become a commercial reality one day.

thenuttyneutron

Being a native speaker of Ohiolisch, I'd have to say my favorite translation is:

Standard Proper English: Have you eaten?
Casual Usage: Did you eat?
Ohiolisch: Jeet?

Standard Proper English: No I have not; have you?
Casual Usage: No, did you?
Ohiolisch: Naw...joo?

And remember, soda is "pop", greasy is "greezzee", and it's pronounced "newk-you-lerrr".

What is with this "dollar swap" business going on between ECB and US/Fed?

Quote:

http://www.marketwatch.com/news/story/ecb-reportedly-weighing-swap-fed/story.aspx?guid=%7B979B396A%2D3738%2D4EEC%2D8376%2D3630883C60A9%7D

The ECB, which last week pumped more than 150 billion euros into the European banking system, is reportedly seeking out dollars because of difficulties that European banks are having with funds invested in asset-backed securities, according to several British media reports.

Unquote

So now we are lending/selling them more bad dollars to shore up their bad holdings of ASB/MSB? This looks like genius on our part -- or is it?

ASB/MSB should be ABS/MBS

Standard Proper English: Have you eaten?
Casual Usage: Did you eat?
Ohiolisch: Jeet?

Peter P English: What did you eat?

My prediction is that there will still be a lot of new FBs out there who are buying properties to flip them, even though the easy "no down, no income verification" loans have disappeared. I went to a wedding wwwwaaaaayyy up north from SF in Rohnert Park this past weekend and some fools were still talking about wanting to get into flipping in Truckee citing that "home prices have appreciated from $150k to $600k in 4 years!" These folks will lose whatever savings they had and will cry to mommy and daddy (or whoever will listen) when they go belly up.

For those of you who aren't from CA, Truckee is a third rate town, which is essentially where people stay when they can't afford to stay in Reno or along the lake in North Lake Tahoe. Home prices there have appreciated since so many bay area folks bought second homes up there. Right now, there are hundreds of 1-2 million $ homes up for sale there and hundreds in the $500k-1 mil range. How is one supposed to flip houses with that much inventory in one city? Some people are still smoking the housing rock pipe... these folks would never believe "The steepest part of the downward curve in home prices is now just around the corner as the inflection point has now clearly just passed."

Peter P:
IIRC eating raw fish is illegal in Ohio.

I don't know about the future, but in the present someone I know is about to lose their house in San Mateo. They are behind on property taxes, etc. The realtor told them they will not be able to get what they paid for the house (if it sells). They are also behind on their second home up north (somewhere outside Sacramento). I'm not sure when they bought the house in SM.

Professional squatters. Pay me to live in your house.

Bahstan food discussion:

D'you jus faht?

Who ah you, my fuggin' grandmothah?

Jus smeels like something crawled up your azz and died.

Naw, it was that nasty grinder I ate from the spa.

Wicked, any left in the 'fridge?

IIRC eating raw fish is illegal in Ohio.

IMO the government has no business in regulating food. For example, people should be allowed to eat blowfish. It is their responsibility to understand the risks.

Hopefully the good folks at consumerfreedom.com can liberate us from food dictatorship.

There are sushi restaurants in Ohio. That still doesn't make it right. Some things just don't go with some other things.

Peter,

I was just teasing you earlier. Little did I know the truth.

http://query.nytimes.com/gst/fullpage.html?sec=health&res=9E02E0D91438F93BA35757C0A9629C8B63

Most would be even more surprised to learn that if the sushi has not been frozen, it is illegal to serve it in the United States.

Most would be even more surprised to learn that if the sushi has not been frozen, it is illegal to serve it in the United States.

Still, people should be allowed to eat the flesh off a live fish if they so choose to.

There are sushi restaurants in Ohio. That still doesn’t make it right. Some things just don’t go with some other things.

Randy, remember the deep-fryer you suggested a while back? ;)

All we need is a few good justices to overturn Wickard v. Filburn, 317 U.S. 111 (1942).

Commerce should be left to the market to regulate itself. The government should merely enforce the integrity and transparency of the market.

Peter,
My most memorable gastronomic life moment was a slice of abalone on the boat. The diver (with permit) surfaced and sliced without even bothering to drop flippers or tank. Still moving, transcendent. There's a Haiku in there someplace.

Ohio seafood; "Hey Cletus throw some more catfish in with those ears of corn you are boiling."

My most memorable gastronomic life moment was a slice of abalone on the boat.

Ooh, abalone, my favorite. It is in season!

I like it raw. It IS transcendental.

Good food WILL bring world peace.

IMO the government has no business in regulating food. For example, people should be allowed to eat blowfish. It is their responsibility to understand the risks.

And when a nationalistic supremacist group opens a free kitchen in an ethnic neighborhood offering all the fugu you can eat?...

And when a nationalistic supremacist group opens a free kitchen in an ethnic neighborhood offering all the fugu you can eat?

Sushi Nazi?

BTW, I am not saying that negligent food providers should not be held accountable. This has everything to do with the integrity of the food industry.

When my parents were young you could still go down to the bay and gather abalone at low tide with just a tire iron.

My dad's "poor us in the Depression" stories generally began "we couldn't afford chicken so all we could eat was abalone", at which point I generally would burst out laughing.

I predict.... the securitization money train is too lucrative to be derailed. Obviously, the current system is not working as (this current crisis demonstrates) there are too many areas for fraud to take hold. The current securitization food chain: buyer->appraiser->mortgage broker->real estate agent->warehouse lender->Wall Street->sucker needs to be massively overhauled to restore investor confidence. Basically, a lot of "pork" will be taken out of the lower end of the food chain, costs will be cut, and the overall quality of the loans will increase (quality referring to the ability to characterize the loan and accurately price risk). I think banks are the most likely candidates so subsume many of the functions in the food chain and rebuild trust in the marketplace. In five years time, I believe the REIC will have changed dramatically.

I still think the "fraud" aspect of the current crisis is getting underreported in the MSM, and I'm not just talking about JoeSixPack overstating income or a predatory lender going after old folks. I am talking about the untold damage done by Casey Serin type "investors" (how many "primary" residences can you own?) and overinflated homes being sold to straw buyers who do a first payment default (with "cash proceeds" being distributed to all parties involved). These are the practices that inflated home values, caused many folks to stretch beyond their means, and manufactured untold "equity" for FBers to tap. The real muckraking journalists covering this scene are in the blogosphere. I have been reading ocrenter's blog for over 6 months, and it always makes the hair on the back of my head stand on end. When you start handing out free money, a line forms rather quickly.
Forget the "Housing: American Nightmare" magazine cover. I predict (once the dust settles and people finally process what has happend), we will see a Time magazine cover with Casey Serin and a title like "The man who brought down Bear Stearns".

Some Chinese restaurants serve 4-5 small abalones (farmed) for under $20.

My dad’s “poor us in the Depression” stories generally began “we couldn’t afford chicken so all we could eat was abalone”, at which point I generally would burst out laughing.

In the very very old days, lobsters were fed to employees so much that one group actually had in their contract "no lobsters".

How times have changed.

Update on Collateral:

I am being told that the Fed accepted three types of securities in these repos: safe Treasuries, agency (GSEs) debt and mortgage backed securities (MBS) guaranteed by Fannie and Freddie. These latter are not subject to credit risk given the guarantee; but can still technically default if the underlying assets are impaired. Still, there are still anomalies in this use of guaranteed MBS in repos: the rate at which the Fed accepted these MBS was apparently the same as the rate at which it acccepted safer Treasuries and Agency debt. This, in turn, implied that mostly MBS were offered and used in the repos; especially on Friday all submitted and accepted securities were MBS and in the last intervention the average rates on this MBS repos was below the Fed Funds rate. Even today about half of the accepted collateral was MBS. See Kevin Drum for more details.
http://www.rgemonitor.com/blog/roubini/

August 12, 2007
FRIDAY'S LIQUIDITY EVENT....On Friday, as part of an effort to inject liquidity into the banking system, the Fed bought several billion dollars worth of mortgage-backed securities. Brad DeLong called this "unusual," but left hanging the question of just how unusual it was.

Stephen Spear, a professor of economics at Carnegie Mellon University, emails to say that he spoke with a friend of his at the Fed who confirmed that the Fed's action was unusual, "but not tremendously so." I thought it was an interesting email, so with his permission, here it is.

--------------------------------------------------------------------------------

Here's what I've been told by a colleague at the Fed:

First a minor point: Most of the open market operations that the Fed does (including Friday's) are short-term collateralized loans and not outright purchases of securities. Friday's loans were all overnight (well, over the weekend, actually, maturing on Monday). So the Fed is technically not buying anything; it's been making short-term loans of cash against collateral.

The Fed accepts three categories of collateral for these loans. One is Treasury securities, another is other government agency securities, and the third is mortgage-backed securities that are federally guaranteed. Because they are federally guaranteed, the mortgage-backed securities the Fed accepts are (obviously) the very best.

Typically the interest rate on these short-term loans varies slightly depending on the type of collateral offered by the borrower. Treasuries get the lowest rate; mortgage-backed securities the highest. (The details of the last 25 OMOs, including the rates for each type of security, are available here.)

What was unusual about Friday (other than the size of the operation) is that the Fed announced it would lend against all three types of collateral at the same rate.

To quote my Fed colleague on this: "I'm not sure why we did this. I think the idea was that given the size of the operation we did not want to risk disrupting the Treasuries markets, but there may have been other motivations. ["Other motivations"? Hmmm. –ed] The expectation was that borrowers would primarily use mortgage-backed securities, since these have the lowest opportunity cost to the borrower."

On the web page above, you will see that for Friday's operations, under collateral type it just says "mortgage-backed." What this means is that mortgage-backed securities or any better securities were allowed as collateral — in other words, all three types were acceptable. Apparently, the media misinterpreted this as saying that the Fed was only accepting mortgage-backed securities, which led to the headlines about the Fed buying these things up.

So, the bottom line is that the Fed's actions on Friday were unusual, but not tremendously so. It did three OMOs instead of the usual one. The quantity of reserves lent out was larger than normal, and the way collateral was handled was slightly unusual. But the general operating procedure, including the type of collateral accepted, was completely standard. It would seem that the media is trying to make the story a lot more sensational than it truly is.
http://www.washingtonmonthly.com/archives/individual/2007_08/011861.php

DennisN :

My grandmother was telling me stories that people in 50s who could not afford meat had to buy caviar and crab meat which was cheaper and thought of as "second rate" food.

Last time I saw caviar in duty free shop in Paris - 850 euro for 50g.

Err ... That was in 50s in Russia, if I did not make it clear :)

My grandmother was telling me stories that people in 50s who could not afford meat had to buy caviar and crab meat which was cheaper and thought of as “second rate” food.

The Sunday brunch at the Half Moon Bay Ritz Carlton has all-you-can-eat (domestic) caviar. The quality of the roe is actually quite passable.

Last time I saw caviar in duty free shop in Paris - 850 euro for 50g.

I think you can still get Caspian Osetra for under $80/oz. Just two 2-3 years ago I could get them for $40/oz.

We have a caviar price bubble!