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Thursday, March 31, 2011

Why Only 70,000

So the word has come forth from Rajiv Shah of USAID that the budget cuts passed by the Republicans in the House would result in the death of 70,000 children. This is the same tired crap that the Obamacrats use every time there is a budget fight. It is never about reducing waste or corruption. No, the GOP only wants to kill children. Wait, when the House 2012 budget comes out and it has a goal for reducing the growth of Social Security, there will be at least twenty articles about how any change to the retirement age for people now under the age of 35 will result in mass starvation of the elderly next year (even though they would remain unaffected). It is truly sad that these folks never seem able to do what is best for the country rather than what suits their political needs.

Fuel efficient Hogwash

The Blueprint for A Secure Energy Future released by the White House is a massive dose of nonsense dressed up to look like an energy plan. Here are a few examples:

A major point of the Blueprint is what it describes as "an ambitious but achievable standard for America" proposed by Obama in the State of the Union: "By 2035, we will generate 80 percent of our electricity from a diverse set of clean energy sources – including renewable energy sources like wind,solar, biomass, and hydropower; nuclear power; efficient natural gas; and clean coal."

This is quite a goal. In a mere 24 years we will have a country with 80% of electricity coming from these sources. Of course, it might make sense to llok at what we now use to generate electricity. Right now, just over 90% of the electricity in the country comes from three major sources: coal, nuclear and natural gas. If you add in wind, solar, biomass and hydropower, the percentage of electric power now generated from these sources is about 99% of total production. (Only about 1% of electrical energy now comes from oil.) So what's the goal? Are we going to reduce the percentage of electricity coming from the named sources? that makes no sense. Is the distinction here between "clean" coal and the coal now being burned? That too makes no sense. There is no definition of what constitutes "clean" coal. Indeed, since the first efforts at reducing air pollution in the early 1970's, the overwhelming bulk of emissions from buring coal have been removed from the process. All coal being burned today is clean. Is it to be made cleaner? The Blueprint is completely silent on this point.

Another amazing bit of nonsense in the Blueprint is its claim that US oil and gas production is growing. Since this is a blueprint for government action, the proper quesiton is not whether or not production is growing, but rather would it grow more quickly with other actions by the government. Indeed, the projection is that oil production in the US will be fully 10% less than it otherwise would have been next year due to the moratorium on off shore drilling alone. There is a further reduction due to the failure to grant drilling permits in Alaska and elsewhere on government lands. So, just with regard to oil alone, US production has been pushed DOWN due to Obama's actions. What has allowed the growth in production has been the technology that allows natural gas and gas liquids to be extracted economically from shale. Even here, the Blueprint shows that Obama is planning to get government in the way of growing that production. It lists three separate agencies that it wants to involve in regulating hydrofracking.

There is also the crazy push for electric vehicles. This is in essence a push towards coal powered cars since just about half of US electric power comes from coal (excuse me "clean" coal). Such a shift will result in an increase in air pollution and emissions -- it just won't come directly from the cars. Of course, were Obama to push for natural gas powered cars and trucks -- vehicles that are currently available from a few manufactureres -- there would be a reduction in oil usage, a reduction in fuel importation and a major reductioin in emissions as well. No wonder Obama did not support such vehicles.

There is one last part of the Blueprint that I do not want to omit from this discussion. Although the plan is screwed up in a major way when it comes to energy policy, it does make a major point that the government is going to push an initiative to promote careers for women in the clean energy field. So in the face of a severe energy problem facing the USA, the government is going to devote its time and resources to the gender makeup of the workforce. The Obamacrats are like moths drawn to the flame of liberal orthodoxy. No matter the problem it gets converted into one with victims and victimizers. Who cares about solving the problems when we can make sure the the workforce is properly proportioned in terms of gender, race and national origin.

Wednesday, March 30, 2011

So nothing has changed?

I have been away for week and a half on vacation. When I left, the deal to fund the government until April 8th was just getting passed. Now, a week and a half later, nothing has changed. The Democrats are still blocking pogress and accusing the Republicans of wanting a government shutdown. The Republicans are still calling for cuts of 61 billion dollars. The media is still focused on whether or not there is a split in the GOP. Yesterday, Chuck Schumer was caught on tape telling someone that he had been instructed by the Democrat caucus to call the Republican positions "extreme". No surprise there, just more of the same.

The truth is that the Democrats now clim that they are willing to agree to anothr 20 billion of cuts, although they do notspecify what those cuts will be. The Republicans say that they will not respond to an offer until it gets made. So why the hold up? It seems that the Democrats are intentionally trying to get shut down. Otherwise, it would be an easy move for the Democrats to come forward with specific cuts for 20 additional billion in cuts and put it to the GOP. My guess is that were the Dems to actually off the 20 billion, the GOP would compromise down from an additional 50 billion to say 40 billion or even 35 billion. Of course, that would put enormous pressure on the Democrats to go a bt further. After all, 15 billion is chump change in the context of the total budget. If there were a final compromis on an additional 35 billion of cuts, that would mean that the total cuts were 46 billion. Such cuts would be an enormous victory for those who say that spending is out of control and it would set the mood for the discussion of the 2012 budget which will begin shortly. It would also mean that the GOP deliered on its pledge to cut 100 billion from the Obama budget proposal by gettng a total of 85 billion in cuts.

My guess is that the Dems will cave on this as the date gets closer. After all, no one will accept the GOP cuts as extreme when Harry Reid holds up the Nevada Cowboy Poetry Festival as his example of extreme cuts.

Wednesday, March 23, 2011

Things make no sense sometimes

I spent the day on the beach near Cap Hatien in Haiti. It is a beautiful place: the blue sea, the white sand and a nice cool breeze to help with the sun. Contrast this perfection with the senseless bombing in Jerusalem, the chaos in Libya and the disaster in Japan. It is difficult sometimes to mke sense of such things. Let's pray for more good times a fewer bad ones.

Sunday, March 20, 2011

We Promise you a Long War

The words of Colonel Gaddafi about the no fly zone and the accompanying airstrikes shows that he has learned well the lessons of Iraq and Afghanistan. Gaddafi understands that the greatest concern about Libya is that it not drag on with continuing casualties. In a way, it is almost poetic to hear this. For years during the Iraq War, we heard a non-stop chorus from the left complaining about the war; it got so bad that Harry Reid announced that the war was lost. There is no need to rehash all of the anti-war rhetoric; I am sure everyone remembers it. Now, instead of a Republican in the White House, the left has one of their own in position. And yet Obama has begun another war. What happens now? Does MoveOn start smashing Obama for the conflict? Will all those Democrats who blasted Iraq now do the same in Libya? The answer, of course, depends on how long this lasts. A two week or two month engagement will not bring much meaningful opposition. On the other hand, if fighting is still going on in Libya during the election season in 2012, it will present Obama with a terrible quandry. He will lose part of his base if the fighting continues. On the other hand, he may be unable to stop it. It would be nice to see Obama who was a complete opportunist with regard to Iraq get some sort of karmic payback for his actions.

There is, of course, a way around this problem and it will be interesting to see if Obama follows it: he can announce now that all US forces will stop acting in Libya by August 1, 2011. This is the familiar Obama method of announcing a pull out date far in advance so as to make clear to our adversaries how long they have to put up with US attacks. On the other hand, he could unleash the full might of the US military to crush Gaddafi's forces. That battle should take at most a month. After that, Obama can pull out and leave others to deal with what is left.

Saturday, March 19, 2011

It's about damn time!

The news is out that US tomahawk cruise missiles have now hit targets in Libya. It's about time! Gaddafi is a murderous crazy thug who is responsible for the deaths of hundreds of Americans in Lockerbie. Now he is killing his own people. He truly has to go.

Is the Glass Half Full or Half Empty (and does it have enough water to cover the spent fuel rods)?

Over the last week I have watched countless news reporters discuss how the problems at the nuclear power plant in Japan are the end of the world, that the Japanese government was lying to the its people, that there would be thousands of deaths from the disaster, and all sorts of other horrors. I guess that such stories make for better television that ones in which the reporters said "Truthfully, we do not have a clue what is actually going on at the plant. We will have to all wait and find out in the weeks to come what happened there." Sadly, better television is not synonymous with truth or accuracy. Indeed, most of the reporters do not even seem to care if the stories are close to the truth; many have seemed distressed when people being interviewed said that the events at the plant were nothing close to a catastrophe.

Let me be clear. I do not know for sure what is happening in Japan. There may be a major disaster; there may not be. I do know, however, that none of these reporters no much more than I do. Has anyone outside of the folks at the plant been exposed to high levels of radiation? We do not know. Heck, the reporters cannot even get straight what happened at Chernobyl and that was over 20 years ago. As of today, there is no scientific proof that anyone died from exposure to radiation in that accident, and accident which was at least an order of magnitude worse than this one in Japan.

In our world, we all expect to have all the answers fed to us immediately. there is tremendous pressure on the reporters to have the end to the story always. But guess what? Often we have to just wait for events to play out. This seems to be one of those times.

That didn't take long!

The news from Libya is that Gaddafi's forces are attacking the rebel capital of Benghazi. Despite pictures and video in the media of the attacks, Colonel Gaddafi has announced that the Libyan forces have stopped fighting as part of the cease fire. Meanwhile, the no fly zone authorized by the UN has apparently been misunderstood by the counries who said they weould enforce it. When the UN said "no fly", it meant no Libyan plane can fly in the area, not that no British, French or American plane could fly in the area.

The US did nothing for nearly a month because obama wanted to have the UN out front on this. What's the excuse now? don't they have phones in Brazil?

UPDATE: I was asked in a comment what I would have the USA do now. If I were president, I would keep the USA from looking like a laughing stock a la Obama. If I made an announcement that Gaddafi has to go, I would follow it up. Alternatively, if I had no intent to put troops into Libya, I would keep my mouth shut. The one thing that you cannot do successfully is a reverse Teddy Roosevelt, "speak loudly but throw away the stick."

Friday, March 18, 2011

Botox with Big tax

Ezra Klein of the Washington Post always seems to have a big grin on his face. I cannot remember the number of times I have flipped on MSNBC only to see Klein with that phony smile on his mouth. It is so constant that I decided that Klein must use Botox and have no ability to change his expression. But I do not really believe that. Klein is a young guy and he should have no need for Botox. My current thinking is that Klein's smirk is just his way of trying to appear friendly when he condescendingly announces the "truth" to the world.

The strange thing about Kleins smirk/grin is that based upon what he is saying, it would be reasonable to think that Klein's opponents would be the ones with the smiles on their faces. Take today's latest pronouncement from Klein as an example. Klein is extolling the virtues of reducing "tax earmarks", those portions of the tax code that provide money to a favored few. And what does Klein point out? Simple! Klein thinks that the Democrats should come out against the deduction for home mortgage interest as well as the deduction for employers for healthcare coverage that they provide to workers. I know I am smiling just writing that sentence. Imagine if the Democrats actually came out against just those two deductions that Klein calls "regressive". Almost immediately there would be millions of Americans who could no longer afford their home mortgage payments. The already struggling home building industry would be wiped out completely. All other industries would also take a major hit as the costs of healthcare soared with the new tax treatment. Tens of millions of folks would quickly lose their healthcare coverage. My guess is that by supporting any attempt to carry out Klein's plan, the Democrats would guarantee that they were out of power for at least a generation.

Now Here's some really Stupid News

A county judge in Wisconsin has issued a Temporary Restraining Order delaying the effectiveness of the recent law removing a part of the collective bargaining rights of the public employee unions. This has to be one of the most futile moves possible.

Here is the reason for the TRO: The Democrat district attorney who filed the lawsuit contends that the legislative committee that broke the stalemate that had kept the law in limbo for weeks met without the 24-hour notice required by Wisconsin's open meetings law. What this means is that all that is needed to fix the supposed problem with the law is for that same committee to announce a new meeting, wait 24 hours and then pass the same bill again. That would be followed by the same senators and representatives voting in favor of the same law again. Then the governor signs it again. So nothing will change except that there will be a lot of costs associated with the do over.

It also seems from my review that the process followed by the legislature was proper. Since I am not a wisconsin lawyer, however, I will leave that decision to the court.

Libya -- a cease fire?

Today, the Foreign Minister of the Libyan government (Gaddafi side) announced a cease fire in Libya due to the UN no fly zone. It will be interesting to see what this truly means. My guess is that it will not mean that there is a cease fire. I suspect that instead we will see claims from the government that the rebels have attacked and that they are forced to respond. Gaddafi has not ever told the truth, and there is no reason to assume that he will begin to do so now. On the other hand, if I am incorrect and there is a true cease fire, then it will come with the overwhelming bulk of the country in government hands. There is no reason to believe that the rebels will be able to take back any areas that they previously lost to Gaddafi's forces. this will, in turn, put maximum pressure on the countries carrying out the no fly zone. Do they continue to keep it in place? Do they take further action against a newly peaceful adversary to force Gaddafi out? Hmm....

Thursday, March 17, 2011

Libya -- what now?

The UN passed a resolution this evening authorizing a no-fly zone and other necessary measures. This was a surprise. Russia and China were previously said to oppose the resolution, but they abstained instead of voting no. So what happens now?

As I write this, reports are coming from the main rebel stronghold of Benghazi that the people there can hear the sounds of the artillery of the Gaddafi forces attacking the city's defense forces. There are also reports of Libyan aircraft taking part in those attacks. No one knows how long the rebels can hold out, but in view of fights earlier this week, that time span is not likely to be very long. Benghazi may fall by the end of tomorrow.
Meanwhile, Gaddafi has made clear that those who opposed him will not remain alive very long once he retakes Benghazi. So, we are awaiting an imminent genocide launched by a crazy man. The real suspense is whether or not any country will be able to take any actions under the no fly zone resolution that can prevent the slaughter. The latest news says that the main actions in support of the no fly zone will come from British and French forces with only logistical support from the USA.

It will be the worst of all worlds if the no fly zone implementation is too slow to prevent genocide in Libya. Just imagine if tens of thousands are killed because the other countries were too slow to act. Let's hope that action comes quickly and genocide is prevented.

So No Government shutdown Until April 8th

The senate has now passed the continuing resolution which keeps the federal government in funds until April 8th. The bill cuts 6 billion more in spending for fiscal year 2011, a move that brings the total cuts achieved so far by the GOP to 10 billion dollars. Here's the amazing part: even a cursory review of the cuts shows how incredibly wasteful the federal government truly is. $2.1 billion dollars out of the $6 billion total came from rescission of funds that have not been used. In other words, Congress approved the expenditure, but then the feds did not spend it. Absent congressional action, however, those funds were just sitting around waiting to be spent. Even a bigger amount, $2.5 billion of the cuts comes from ending certain earmarks. The House Republicans have already made it clear that no earmarks would be funded this year. Earmarks are the pet projects of individual congressmen that get stuck into bills after the fact; often these expenditures are political payoffs to supporters. Although Obama campaigned against these items, he never did anything to stop them. Once the GOP took over the House, however, even Obama came out against further earmarks. So, of the total of six billion dollars of cuts, only 1.4 billion dollars were actual cuts. My favorite of the cuts is to end $225 million of funding for community service employment for the elderly. While I think that it is great for senior citizens to stay employed if they want to, it makes no sense for the federal government to be their employer. These folks already have social security. If there are jobs being created, they should go to the unemployed who have no other means of support.

So we have now had two extensions with cuts that got rid of some of the most ridiculous expenditures in the budget. Congress now has until April 8th to come to an overall agreement for the rest of the year. As a result, Congress has done exactly what any reasonable observer would expect; Congress has gone into recess for ten days. After all, if you have 23 days to reach a compromise through negotiation, what better way is there to proceed than to leave town for ten days.

The time has come to end the games. My suggestion is that the House pass another CR that cuts another 50 billion bucks from this year's expenditures. Some of the more controversial from the earlier version which passed the House should be removed. Instead, the House should stick to items that are less incendiary and add to them a postponement of funding to implement Obamacare. We now know that there is about $23 billion already appropriated in the Obamacare bill itself for implementation costs to be incurred this year. The House should clearly state that since the law has been declared unconstitutional, it makes no sense to spend billions to implement it. All of that money could be wasted if the Supreme court agrees that the law is unconstitutional. Let's have the argument proceed on whether or not it makes sense to fund implementation of an unconstitutional law or to delay that funding until after the determination by the court.

Hillary bailing out -- an Update

In a column in the Daily, we get the Clinton insider leaked story as to the reason for Hillary announcing that she would be leaving as Secretary of State at the end of the current Obama term, even if Obama wins re-election. Here's a few choice quotes:

"Obviously, she’s not happy with dealing with a president who can’t decide if today is Tuesday or Wednesday, who can’t make his mind up,” a Clinton insider told The Daily. “She’s exhausted, tired.”

"Clinton is said to be especially peeved with the president’s waffling over how to encourage the kinds of Arab uprisings that have recently toppled regimes in Egypt and Tunisia, and in particular his refusal to back a no-fly zone over Libya."

"When French president Nicolas Sarkozy urged her to press the White House to
take more aggressive action in Libya, Clinton repeatedly replied only, “There are difficulties,” according to Foreign Policy magazine.

“Frankly we are just completely puzzled,” one of the diplomats told Foreign
Policy magazine. “We are wondering if this is a priority for the United States.”

Or as the insider described Obama’s foreign policy shop: “It’s amateur night.”

This story confirms to me that Clinton is positioning herself for another run for the White House. The Secretary of State does not usually have people who leak nasty comments about the president. I particularly would point to the Tuesday/Wednesday quote. Hillary is not just leaving; she is stomping on Obama. (And he well deserves it!)

I guess I am a stereotype

For at least a decade, I have been reading that the main supporters of the GOP are angry white males. It was nonsense when it was first said and it remains nonsense. Most people who support the Republicans are not any angrier than those who support the Democrats. Look at Al Sharpton, a man who made his whole career channeling anger and ignorance. But, I have to admit that after watching the performance of the Obama administration and Obama in particular over the last few months, I have become the stereotypical Republican, an angry white male.

I was always a white male, so it is the deep seated anger that is new. And it just keeps getting worse. The democratic uprising ini Libya is a good place to start. When the protests began, Obama adopted the model he used in not supporting the Iranian protests of the year before. Obama first was silent. When the voices of the American people got loud enough, the White House finally said that the president would make a statement. That statement came in a summary released by the White House of a phonoe call between Obama and Angela Merkel of Germany. Obama can take time to record a speech about Women's History Month or a long interview about his choices for the NCAA Basketball Tournement, but as to the protests in Libya and the crackdown by Gaddafi, he can only make his point in a summary of a phone call to a German that is released on paper only. Mr. Teleprompter cannot manage something that could be rebroadcast and seen by America and the world.

Next came the Gaddafi attacks on the protesters using bombers and fighter planes. This is the act of a crazy man. Even the Arab League came out with a request that a no fly zone be imposed in Libya. That would neutralize the Libyan Airforce and allow the democratic (rebel) side a chance to regroup and hold off the Gaddafi forces. Obama's response? Dithering and silence. Finally he had Clinton come out with a statement that any action in Libya needed to come from the UN. Since the Chinese and the Russians had already made clear that they would not support a UN no fly zone, that killed any chance that there would be a meaningful act to help the democracy protesters who were being slaughtered by Gaddafi's forces.

Now we have reached the end game. Gaddafi's son says that within 48 hours, the fighting will be over. the people in Benghazi have been warned that attack by the Gaddafi forces is imminent. It looks like the end is here for the rebels. For most of them, that is a literal statement as the Gaddafi forces will most likely round them up and kill them. so what does Obama do now? He starts trying to cover his ass by talking more aggressively. He gets the US ambassador to the UN to announce the the US is considering stronger actions than just a no fly zone. Will there be airstrikes? Will the marines be landing on the shores of Tripoli again? Both of those could have been avoided had Obama had the nerve to act with a no fly zone a week ago. Such a show of force would probably have crumbled the last remnant of Gaddafi's authority. But do not worry, Obama added the magic words: any stronger use of force would only be done with UN approval. In English, what this means is that Obama is positioning himself to be able to say that he was ready to use strong force against Gaddafi (even though he chose not to do so.) he is positioning himself for subsequent domestic criticism. He does not give a damn about the people in Libya or even the national interests of the USA. A democratic Libya would be a major improvement in the Middle East. Imagine one less country run by a despotic, terrorist supporting madman.

As I said before, this all makes me furious. Obama is supposed to lead, not to worry about re-election. But Libya is not the whole story. Obama does the same thing with regard to energy policy. Ditto on the budget. And now, Obama has the Treasury Secretary saying in essence that the USA looks favorably on there being a new world reserve currency to replace the dollar. I wonder if he even knows what that means. Let me spell it out. If there is a new world currency the following will happen: 1) the dollar will fall against other currencies. 2)Interest rates in the US will rise. 3)There will be massive inflation in the USA. 4) The economy of the USA will suffer a major blow. 5)Foreigners holding dollars will need to park them somewhere. As a result, there will probably be a buying spree by them snatching up American assets. 6) The ability of the Federal Reserve to print more money in an emergy will be severely curtailed. 7)The power of the USA will be lessened. While not all of these things are necessarily bad, they are in sum a disaster.

As I said, I am really angry at this fool.

Wednesday, March 16, 2011

Hillary is bailing out

Hillary Clinton told Wolf Blitzer of CNN that she would not stay on for a second term as Secretary of State if Obama is re-elected. She also said that she would not run for either president or vice president in 2012. Her reason? According to Clinton, after being Secretary of State there is nothing she could possibly do to have more impact.

OK, so let's stop for a moment. Obviously, Hillary knows full well that being president has more responsibility and more impact. Her reason for stepping down after the current term is obviously flawed and she knows that anyone with half a brain will understand that.

If you couple Hillary's statement with the recent comments from Bill Clinton on energy prices and drilling in the USA, you get what seems to be a coherent plan by the Clintons to distance themselves from Obama. bill Clinton actually said that it was crazy to keep a drilling moratorium in place given the rising price of oil and thebad effect that such a price rise has on the US economy.

So why would the Clintons put distance between themselves and Obama? It has to be one of two answers: First, Hillary is preparing to run again in 2012 or 2016 and wants to be free of her ties to Obama. By making clear that she is leaving, Hillary clearly loosens her bonds to the administration. Second, the Clintons recognize that Obama is in the process of melting down as president. After a short bump following the election Obama's poll numbers are back in the toilet. To make matters worse, the numbers are heading in the wrong direction and the latest events make it likely that the economy will also be heading south as we move into 2012. So, neither Bill nor Hillary want to be associated with Obama the loser.

In my view, both reasons are plausible, and I think that they are both correct. If Obama truly melts down, Hillary and Bill are positioning themselves to pick up the pieces and get her the nomination for 2012.

Even the French have more guts

Here is the first paragraph of an article from the French press agency with regard to Libya:

"Muammar Gaddafi's forces are pushing towards the rebel stronghold of Benghazi and predict they will suppress the rebel uprising within days. Meanwhile, world leaders continue to dither on imposing a no-fly zone over the country."

Further in the article, the reporter identifies the USA along with Chine and Russia as one of the powers that have questions about the wisdom of a no fly zone.

President Obama has earned the condemnation of the world for his conduct regarding Libya. Just as he did last year with regard to the uprising in Iran, Obama has had the USA watch while a movement that sought the overthrow of a totalitarian enemy of the USA and the imposition of a democratic government was crushed by the dictatorship. obama has had the USA watch as pro-democracy protesters/rebels have been killed along with their famillies. Obama has done nothing, NOTHING!!!!

After 9-11, the USA announced that its policy was to encourage democracy across the Middle East. Iraq now has a democratic government rather than a murderous dictator. The express hope was that the new day in Iraq would encourage others across the region to try to achieve the same result. Of course, since the policy was a pronouncement of George W. Bush, Obama was against it. Obama and the others of his party told us over and over again that Bush's policy was not realistic; instead it was just an excuse for war. According to Obama and the Democrats, Bush and his people just did not understand the Middle East; there would never be a true democracy movement there because the Arab culture would not support it. Well they were wrong. It is the Arabs who are rising up to overthrow the dictators and who seek to have democracy.

But Obama just cannot accept the idea that Bush was right and Obama was mistaken. So he does nothing while the best chance in a generation to move the Arab world towards peace and away from jihad gets crushed under the jackboots of Gaddafi's thugs. It seems that Obama is incapable of putting the best interests of the USA ahead of his own need to be right all the time. It is a very immature kind of behavior. Unfortunately, this passive aggressive behavior by Obama will result in thousands of deaths in the next month and countless more as the crazed rule of Gaddafi continues in Libya.

And before someone tells you that the USA will be on good terms with Gaddafi after this, just remember that even though Obama did nothing, he did announce that Gaddafi had to go. So his policy had the worst of all worlds. Obama is letting the democracy movement get crushed. He angered the Gaddafi group by calling for Gaddafi's ouster. Obama made clear to our friends and enemies alike that under his leadership (and I use that term in jest), the USA will do nothing more than dither when faced with a problem.

Hopefully, in less than two years Obama will be a former president. I suggest that at that time, Obama should start a new concept, a lack of thought tank, sort of the opposite of a think tank. He would be perfect for it. He could develop countless methods for avoiding all decisions.

The American people deserve a leader to be the president. Even a president like Bill Clinton with whom I disagreed often would never have allowed this mess in Libya to unfold in this manner. The truth is that Hillary's famous campaign commercial was right on the money. That 3 AM phone call has come into the White House more than once. And we now know Obama's response: he has chosen not to answer the phone.

Other than that Mrs. Lincoln, how was the play?

In one of the most bizarre openings of a news article I have seen in a long time, the AP reported today on wholesale prices for February. Here is the opening:

"Wholesale prices jumped last month by the most in nearly two years due to higher energy costs and the steepest rise in food prices in 36 years. Excluding those volatile categories, inflation was tame."

Tame? TAME???? What kind of nonsense is this? Food prices were up by the most in 36 years. Don't they eat at the AP? Energy prices were also soaring in February. Don't they drive at the AP?

How far does the AP feel it has to go to stay within the preferred narrative that the economy is growing, we are in a full swing recovery, and prices are under control despite the Federal Reserve pumping trillions of dollars into the money supply?

Well accepted economic theory says that if the money supply grows too quickly, inflation will follow. Even if the money supply is pumped up while the economy is in recession, inflation will follow once what is called the "velocity" of money moves back towards normal. In other words, if the Federal Reserve prints an extra trillion or so dollars and uses the funds to buy government bonds, it will cause inflation. The inflation will hit either right away or once things start getting back to normal in the economy. There is simply too much money in the economy chasing too few goods. And guess what -- that is exactly what is happening.

I certainly hope that this economic theory does not work in this case. After all, the Fed did not just pump up the money supply more quickly than normal, the Fed more than doubled the money supply in about a year! That means that there should be massive inflation of a sort never seen before in this country. The Fed needs to start sucking the excess funds out of the system now. NOW!!!!!! If the Fed waits to act until there is steady 5-8% inflation, it will just be too late to stop us from hitting much higher levels. These things do not adjust in a minute or too. It takes months or years to reverse the process.

There is a real price to pay for the fiscal excesses of the Obama Administration coupled with the over-reaching by the Federal Reserve. Actions have consequences and those who forget this (or worse ignore this) cause great damage.

Voting Present seems not to be workinig

Back when he was a member of the Illinois Legislature, Barack Obama had a practice of voting "present" when he wanted to avoid taking a position on a contentious issue. He must believe that the strategy worked; after all, he is now president of the USA. Sadly for the country, however, Obama is still following this strategy. Gaddafi is winning back Libya through brute force and murder of opponents, but Obama offers nothing to the rebels seeking a democratic state. Even after announcing that Gaddafi has to go and putting the USA clearly into a position as an enemy should Gaddafi regain total power, Obama still does nothing to influence the situation on the ground. Instead, he has Hillary Clinton announce that any action must be taken by the UN even though the Russians have already made clear that they would veto any attempt at UN action. Congress cannot reach agreement as the level of spending for the remainder of this year. No problem for Obama; he just stays away from the issue. He appoints Biden to get involved but then sends him out of the country for weeks. Obama never says what cuts he wants or opposes. In fact, Obama offers nothing. the list goes on, but the clear point is that Obama is just voting present these days.

I wonder if the White House has realized that this strategy is not working. According to Rasmussen, Obama's approval numbers are down to 43% approve and 57% do not approve. Among those with strong views, the disapproval margin is now up to 22%, the worst ever performance by Obama in this metric.

Clearly, Obama is not up to the job of being president. Hopefully, he will not be able to do much more damage to the USA before he is booted out of office in 2012.

Congrats to the Cardinals

In a continuation of what must be the longest dynasty in sports in America, the Greenwich High School swimming team just won the Connecticut state championship for the 19th consecutive year and the 39th year out of the last 40. It is truly an amazing streak. Congratulations to the entire team.

Tuesday, March 15, 2011

Repression of public workers

With all the noise about what has happened in Wisconsin where the legislature passed and the governor signed a law that takes away some of the bargaining rights of some of the state workers and forces them to contribute more to their pension and health benefits, I wanted to update you all on another government that is taking a much harder line on the issue.

This government does not allow public workers to unionize. The workers cannot bargain over their salary levels. The workers cannot bargain over benefit levels or about pension of health care contributions. The government has taken to making arbitrary moves without even consulting the workers. Just recently, this government decided to freeze all wages so that no employee would get a raise in 2011 or 2011 no matter what had previously been promised to those employees and no matter what the rate of inflation turns out to be during those two years. This is much harsher than Scott Walker's Wisconsin attacks. Walker left the unions in place to negotiate wages. He just took benefits and pensions away from them. Walker did not freeze wages. Walker did not cut any workers.

So, I am sure you all know the government that I am talking about. It is the federal government of the USA headed by none other than Obama. Obama used his powers to freeze all wages for government employees. Did anyone hear a peep out of organized labor when he did that? Of course not. Obama did nothing to let federal employees have any collective bargaining rights. Did anyone hear a peep from labor about that? Of course not.

Nancy Pelosi's Morality

It took me five minutes to stop laughing after I saw a video of today's statement by Nancy Pelosi, the minority leader of the House. Pelosi came forward to speak about the continuing resolution voted on in the House today and about the budget for the remainder of 2011. She said that Congress should be mindful in passing the budget of the moral issues involved and not the money issues.

Take a moment and let that sink in. Pelosi wants Congress not to think about money when it determines how much money will be spent for the remainder of this year. It reminds me of her approach to Obamacare: she never bothered to consider the effect it would have on the quality of healthcare when she voted on a bill that took over the healthcare industry in the country. She could as easily have told Congress not consider winning in Afghanistan when it voted on the military appropriations bills. Maybe she wants Congress to avoid scientific proof when it votes on matters pertaining to global warming (actually, I think she does want that.)

After the first level of Pelosi's ridiculousness is pierced, you get to the truly absurd. Nancy Pelosi is now discussing morality. Let me say that again: NANCY PELOSI IS NOW DISCUSSING MORALITY!!!!!!! That's right up there with John Edwards or Bill Clinton discussing marital fidelity; John Boehner dicussing the need to remain unemotional; or President Obama on the need to stay engaged and to work hard. What a joke.

One Way to end the Parade

there were demonstrations by thousands of Palestinians in Gaza and the West Bank today. The demonstrators wanted Hamas (which took control fo Gaza by force in 2007) and Fatah which controls the West Bank to resolve their differences and form one government. In the grand tradition of Hamas, here is how the Gaza demonstration ended according to the AP:

"Hamas security officers started beating marchers after their demonstration permit expired before sundown, witnesses said. A small Palestinian faction said Hamas security beat dozens with clubs, trying to disperse the crowd."

The Hamas forces also beat up the press corps present for the march.

It just makes me wonder why the Israelis cannot reach a peace agreement with these reasonable people.

Well Isn't That Special

Saturday Night Live used to run a skit many years ago that featured Dana Carvey as the Church Lady. Her signature line was "Well isn't that special?" It was reserved for things of which she strongly disapproved.

I was reminded of the line today when I read that president Obama was spending much of the day taping a segment for ESPN in which Obama will reveal his picks for the NCAA men's basketball tournement. What else could one say? Isn't that special? In Libya, Gaddafi's forces are moving towards the defeat of the rebels, a result that will unleash a bloodbath against the protesters, their families and all those who are suspected of supporting the revolt. Obama has announced that Gaddafi should go, but when it comes to taking any action to support that position, Obama has "deferred" to the UN. In other words, Obama has had the USA vote present on this problem. In Washington, the negotiations in Congress to come to some resolution of spending levels for the current year just drag on. There is no unifed position from the Democrats that would allow for Republicans to strike a deal with them. As a result, the country just slides along without any clear direction from the government. Obama just avoids the whole subject and says it is for the legislative branch to decide. Energy prices have soared to levels not seen since before the recession, a move which threatens the growth of the economy. Obama does nothing about it; he keeps his de facto moratorium on drilling in place. He does nothing to promote energy conservation ina meaningful way. He does not even clearly explain to the American people that there is no danger her from nuclear plants like those hit in Japan by both an earthquake and a tsunami. Indeed, it seems like Obama's biggest accomplishment of the last week was his golf game on Sunday. And now, with all of these problems percolating around him, Obama has time to spend much of the day making a video tape of his basketball picks.

Well, isn't that special!

Fear is winning

There is a disaster in Japan. The combination of a major earthquake and a tsunami have left a nuclear power plant with three reactors without power to keep the cooling aparatus working, so there is the prospect of a possible meltdown. No one outside of the Japanese government knows for sure what is happening since there has been an evacuation of the area. There have been explosions at the plants. There has also been an increase in radiation detected in certain areas near the plant. It seems that the radiation levels are still quite low, however.

No one could argue that the situation in Japan is good; simply put, it is a major disaster. But fear arising from the disaster is winning around the world. In Germany, the government just ordered the shutdown of about 40% of that country's nuclear power plants, plants that have operated safely for over 30 years. There is no threat of earthquakes in Germany. Nor is there the likelihood of tsunami damage. For a tsunami to inundate Germany, it would have to be the result of an event that would probably end all life on earth like a major meteor impact in the Atlantic. so what are the Germans running from? A possible avalanche? Tornadoes? The answer is public opinion. In other words, the fears of the public are being allowed to control the actions of those who should know better.

Will this fear also win in America? It certainly will triumph in one arena; there are unlikely to be any new nuclear plants in the USA in the foreseeable future. That, however, is no surprise. There have been no new plants built since Three Mile Island had its disaster in the 1970's. While there were noises that this might change, one has to be an incurable optimist to believe that nuclear plants would actually have been built. the real fight is going to be on whether or not our current plants need to be shut down. I am sure that Indian Point north of New York City will once again become a target. There are simply too many pandering pols in New York state to let a target that rich get away.

I hope that the environmentalists remember two things: First, to the extent we have extra capacity in our systems, that capacity runs on coal. In other words, clean and non-polluting nuclear plants will be replaced by dirty, pollution spewing coal plants. Now not all coal plants are dirty, but the excess capacity out there has not been brought up to the cleanest operational levels. That, in fact, is why it is off line. Second, there is not enough excess capacity to keep electricity production at the levels required to run the country. A nuclear shutdown would mean rolling blackouts, a new recession/depression and a great amount of pain for everyone. Particularly since there is no reason to believe that any of the nuclear plants are unsafe, there is no reason to inflict such pain on the country.

Of course, we are talking about fear here, not rational action. Let's hope for an adult response from our president. Obama needs to explain to the folks why there is no danger.

Monday, March 14, 2011

Democrats and Twitter

Roll Call has an interesting article which reports that the Democrats are counting on Twitter and Facebook to help them take back the House in 2012. According to the article, the Democrats believe that by putting their message on Twitter, they will reach a much more savvy crowd who will "get" their message.

I don't think so. I can understand why the Democrats think that having a message that fits in a tiny twitter message makes sense for them. In fact, Twitter for political campaigns means that the old thirty second commercials on TV will seem like War and Peace in comparison. It will be politics by slogan alone. No substance, no nuance, just a slogan. Sounds perfect for Nancy Pelosi. She is still probably looking for the Twitter version of Obamacare. (She voted for the bill and she still does not know what is in it.)

GasFrac -- target update

After posting my 18 month target price of $40 for the stock, I received a number of e-mails asking me to explain how I came up witht that figure. I will try to outline my method in this post.

Let's begin with revenue. The GasFrac revenue is driven almost entirely by the number of sets of equipment that are being used by the company. For the foreseeable future, that number is limited not by available business but rather by the number of sets that the company owns. 2010 ended with three sets in the field and the projection is that 2011 will end with ten sets in the field. Using the projected levels of sets available to the company each month during 2011, there should be about 77 set months available to generate revenue.

Then there is the issue of the efficiency of Gasfrac in the use of these sets. According to management, in 2010, efficiency which is the number of days that the sets are available for revenue generation out of total days ran about 30%. Through the purchase of more auxilliary equipment, that efficiency is expected to rise to 45-50% in 2011. I model the efficiency for the year at 42%.

In 2012, my model assumes that the company begins the year with 10 sets and then increases that number by only 20% during the year. This increase of two sets is much lower than the company's historical approach would indicate, but it is a conservative number that can be achieved without the need for new financing sources. I also use the efficiency rate of 48% for the year.

On the basis of these figures, the revenue for 2012 should be just under twice that achieved in 2011. Of course, that allows nothing for revenue generated from the propane recovery system should that come on line as scheduled. It also understates the likely growth in the number of sets during 2012 as described above.

At the moment, the consensus earnings estimate for 2011 is 58 cents per share. If revenue doubles, earnings should more than double reaching $1.35 for the year. Using a conservative multiple of 30, this brings one to a price of $40.50 which gives the price target of 40.

This is actually a conservative target in my opinion. If any of the anti-hydraulic fracking hysteria gains a real foothold, the price for GasFrac's services could soar. Even a ten percent price rise would mean substantial additional revenue that would all go directly to the bottom line after taxes are paid. If the company grows at a faster pace as it has in the past, the target should be exceeded. On the other hand, if someone else finds a method that gets around the GasFrac patent applications or if those applications are unexpectedly denied, there may suddenly be competitors that do not exist currently. On balance, though, the target ought be achieved.

Nuclear Power

The media today is reporting the terrible events in Japan and coupling it with a series of warnings and statements about how the USA has to go slow on nuclear power. Senator Lieberman wants to "put on the brakes" for nuclear power plants. Many others voice similar concerns. My question is where have they been living? Under a rock? There has not been a new nuclear power plant opened in the USA in the last 30 years. How do we slow down from that?

Clearly, it does not make sense to build a nuke plant in an area that could get hit with a tsunami. It also makes little sense to put them in very active earthquake zones. So why not build such plants in locations that are far from fault lines and far from the shore. How about in Nevada or Montana or Oklahoma? Think, for example, of the four plants in Coalstrip Montana. these enormous power plants were built next to a strip mine. In that way, there is no need to transport the coal to the plant. The power is then sent to other locations over cables.

Obviously, there is no location that is totally safe from natural calamities. Using a little common sense, however, would go a long way towards making sure that everyone stays safe.

Sunday, March 13, 2011

High speed rail -- what is Obama thinking

In an article yesterday, the New York Times discussed the reasons why Florida governor Rick Scott decided to forego the federal funding offered and not to build the high speed rail line between Tampa and Orlando. The reasoning is pretty straightforward. There was little expectation that the line would cost what is currently projected or that it would operate without a hefty subsidy from the state. Even the times admits that Tampa and Orlando are too close together to allow for much time savings from taking the train. Beyond that, since neither city has much in the way of a public transport system, someone taking the train to Orlando would still need a car once he or she got there. All of this was set forth in detail in a study by the Reason foundation. Scott decided not to burden Florida with the cost overruns and operating subsidies that the system would bring.

Of course, the Times criticizes this decision. The funny thing is that the basis for the criticism is not the analysis in the study; rather, it is that some of the funding for the REason foundation comes from folks with ties to the oil industry. Using that reasoning, the position of the Obama administration should be ignored since in his election campaign in 2008 the president got some funding from oil company executives.

The real truth is that as even the Times admits, the Florida route was not one that made much sense, but the White House wanted to get one train route completed quickly so that it could show off what it had accomplished. it would be a hell of a lot less expensive to just build a statue of Obama at Disney World in Florida.

If anyone doubts that the cost of each of the high speed rail lines will be significantly higher than the current estimates, let me explain the inevitable. I was involved with the construction of many rail tunnels, elevated lines and bridges in the New York metropolitan area. The MTA which handled most of this construction is the most experienced agency in the USA with building rail facilities. Even so, nearly every project had a significant cost overrun. The extimates were always too low. ALWAYS!!!!

The reasons for cost overruns were different on each job, but they always appeared. Here is an example: a new bridge was built over a bay adjacent to Long Island. Because the bay is a navigable waterway, the bridge needed a construction permit from the US Coast Guard. The permit was received and called for a channel 85 feet wide under the bridge. when the engineers designed the bridge, they allowed for a channel that was only 80 feet wide. The problem was discovered shortly after the commencement of construction when plans were sent to the Coast Guard for approval. The correction only required a minor change to work, but it resulted in a cost increase for the project of something like 15% due to the resulting delay, the shift of work into the winter, the need to redo certain work, etc. Simply put, a silly mistake in reading the permit cost millions of dollars. There are always mistakes like this on every project.

The truth also is that even the New York Times understands that there will be cost overruns and that few train lines carry the traffic projected by the entities that promote their construction. That is why the Times has nothing to say abou the decision other than that some people with ties to the oil industry helped fund the foundation that blew the whistle on the actual costs.

Is Hiding a Virtue?

Over the last few years and particularly since the beginning of 2011, President Obama has refrained from getting deeply involved in many of the important issues facing the USA. Obama has made some comments about the level of spending for the current year, but he has had little to say about the ongoing negotiations to fix those expenditures. He has had much to say (although somewhat late) with regard to Libya, but he has made sure to keep the USA from any sort of leadership role in the international response to the uprising in that country. Obama has talked about energy security for the USA but has done nothing to move towards that goal. The list goes on and needs not be repeated here.

Many in Washington in both parties are critical of Obama's hiding from involvement in these issues. Things have gotten to the point where even the main stream media is writing about Obama's refusal to engage. Of course, the main stream media paints this as a virtue. Here is a little excerpt from an AP article out today.

"But the White House sees no upside in outspokenness.

"There is a very strong gravitational pull in this town to try to drag the president to every single political skirmish and news story," said White House communications director Dan Pfeiffer.

Pfeiffer said Obama has enough issues on his agenda and said the White House doesn't believe the public wants the president weighing in on an array of subjects.

"They want him leading the country; they don't want him serving as a cable commentator for the issue of the day," he said."

So spending levels and the federal budget is too much to put on Obama's agenda? What is he busy doing? The spending fight is the central dispute in Washington at the moment. If the country wants leadership from the pesident, doesn't it stand to reason that the country wants leadership on the most important things out there?

The truth is that Obama is back to his old habit of voting present on contentious issues. He wants spending levels to continue at the current inflated levels, but he knows that the country voted against this. Rather than take a position, Obama is hoping that drift and gridlock will keep spending levels high without indicating that he had anything to do with it. The one thing that we all know, however, is this: no matter how things proceed from here, Obama has shown a remarkable lack of leadership. He does not deserve to be re-elected.

An Update -- news not to be overlooked

I wrote yesterday about the terror attack in which an Israeli family was stabbed to death in their home. The dead included three young children one of whom was an infant. Here's what happened in Gaza (according to YNET News) after word of the attack spread:

"Gaza residents from the southern city of Rafah hit the streets Saturday to celebrate the terror attack in the West Bank settlement of Itamar where five family members were murdered in their sleep, including three children."

Next time someone tells you about how bad it is for the people of Gaza who the Israelis will not let travel into Israel, remember this news.

Saturday, March 12, 2011

The Need for a Growth Agenda

For the last two plus years, we have watched the private sector of the American economy limp along. Part of that time, the economy was contracting and then it moved into slow and halting growth. Most of the growth in America was concentrated in the government sector. Indeed, Obama has moved the USA towards a status where government spending becomes a major driver of economic growth. Of course, the problem with using government spending to drive economic growth is that it does not work well and that it cannot last for long without resulting in bankruptcy. by its very nature, government spending is inefficient and each dollar actually spent on items that should cause growth results in less if the money is spent by the government rather than by the private sector.

I just listened to Larry Kudlow discuss on his radio show that the GOP needs to have a growth agenda other than just cutting government spending. Kudlow is correct; it is not enough to cut, there has to be an engine of growth that will raise incomes and employment for all Americans. So what can be done?

The first and obvious step to help grow the economy is to lower energy prices and keep more of energy production in domestic hands. We have been hearing about these goals since 1973; yet, we are in worse shape now on this front than at almost any other time. As anyone who reads this blog knows, I am a fan of ramping up production and use of natural gas. The USA has abundant reserves of this fuel, enough to satisfy all of our energy needs for at least a century. The price of natural gas is about 20% the price of an equivalent amount of oil. Natural gas production creates jobs in the USA. None of the money spent on natural gas goes abroad to places like Venezuela, Libya, Iran or other enemies of the USA. The technology to use natural gas is here now; there is no need to do anything other than to convert to existing technology.

Let's look at the effect of shifting our energy use in a small way: One million barrels of imported oil gets shifted to natural gas. This could happen by moving home heating with oil to gas, by moving electrical energy generation from oil to natural gas; by migrating our vehicle fleet from oil use to natural gas and similar steps. Let's look at the effect of this switch. One million barrels a day at $100 per barrel is $100 million dollars that goes each day out of the USA to countries that do not like us very much. If we replace that oil with natural gas, the cost for the fuel would be about $20 million per day. In other words, consumers would save about $80 million per day in the aggregate. That savings comes to about $30 billion per year that can used for other things in the economy. If we use the multiplier that the Obamacrats insist exists in the economy, then this expenditure would result in about $50 billion of additional activity this year and every year thereafter. But that is not all. In order to produce the natural gas, there would have to be jobs created so as to increase the drilling industry, the pipeline industry, the auto industry (those nat gas powered cars have to come from somewhere), and many other places. The wealth of the landowners who have leased out their property for drilling would go up due to royalties. Tax revenues to the state and federal governments would go up as a result of the new jobs and higher incomes. Federal and state expenditures would need to go down as fewer people were unemployed. Simply put, just this switch could add a major push towards growth into the economy. If the move towards natural gas powered vehicles continued year after year, the push towards growth would get larger and larger over time.

A second way to increase economic growth is to make the USA more competitive in the world. while this sounds like a platitude, it is not something being done at the moment. Right now, the USA allows China to manipulate its currency and avoid expenses that we impose upon ourselves like recognition of patents, fair labor standards, environmental controls and the like. Just imagine the effect were the US to levy an entry tax on goods of countries that had lax environmental safeguards in place. In other words, those countries who spew air pollution into the atmosphere suddenly would find their goods made more costly and less competitive. What would happen to China if the socks made in Shanghai suddenly cost more than those from Romania? what happens if electric toothbrushes from Hong Kong cost more than those from Costa Rica or Arizona? The answer is simple. All those folks now investing in China would move their plants elsewhere. Indeed, if the US could get the European Union to follow a similar plan, we would quickly see major changes in the world economy. Indeed, many goods that now are priced out of the market by Chinese competitors would get back the ability to compete.

At the same time that steps were taken to force other countries to meet certain minimal standards, the USA needs to remove those restrictions on our own businesses that are excessive. This is a subject for about twenty other posts, so I am not going into detail here. Suffice to say, that there is much to be done on this front.

Think of it this way: If the USA could have achieved growth of 1.5% more per year during a four year presidential term, that would mean a GDP of about 7 percent higher at the end of the term. While this may not sound like that much, it is more than a trillion dollars. I also means that the government's deficit would decline, unemployment would recede, and personal incomes would go up for all. In short, to use the trite phrase, it is a win-win. this is the message that the GOP needs to push before the 2012 election. Too much depends on it for a mistake to be made now!

News not to be overlooked

With all the horror in Japan and Libya, much of the other news has been downplayed or completely overlooked. One item, however, deserves to be noticed by everyone who has an interest in peace in the Middle East. Yesterday, a terrorist broke into the home of an Israeli family and stabbed them to death. Three of the dead were young children including an infant less than one year old. Hamas announced that it fully supported this action. This is the same Hamas that claimed to be peaceful at the time of the so-called peace flotilla. It is hard to imagine that the world can just ignore gruesome acts like these murders. Nevertheless, I am sure that we will see explanations in the next few days that the murderer was the true victim here. So long as the world does not recognize the true nature of the terrorists, the Israelis should not listen to the "advice" coming from the world.

Wisconsin and the future

It's interesting to watch: the New York Times ran a story explaining how the success of the Republicans in Wisconsin aginst the public employee unions will help the Democrats in the long run. The Washington Times ran a story explaining how the same event would hurt the Democrats in the long run. Everyone seems to have an opinion on the matter. So here's mine: No matter what one says, the issue in Wisconsin is about what happens in Wisconsin. It did not affect Pennsylvania, California, Florida or any other state. It may have been interesting to watch, but aside from the fiercest partisans around the country, it will have no lasting effect. Even if the recall petitions against the Democrat senators, the Republican senators and the governor in Wisconsin get enough signatures so that there is a whole new round of elections in that state, it will still be a matter limited to Wisconsin. Those who see Wisconsin as the equivalent of the fight over Obamacare miss this point; Obamacare affected everyone in the country. Millions of seniors were upset at what Obamacare would do to their Medicare benefits. One sixth of the national economy deals with healthcare. The Wisconsin public employees are a tiny percentage of the nation. Even all union labor in the USA is a much smaller group than those who were directly affected by obamacare. It is just not the same thing.

Friday, March 11, 2011

Obama not serious about ending failed programs

The House voted yesterday to terminate the 8.5 billion dollar FHA Refinance Program. This program was established a little over a year ago and funded with 8.5 billion dollars of funds from TARP. It was supposed to allow homeowners to refinance mortgages which they could not longer afford. Obama said when the program began that it would help between one half million and 1.5 million homeowners.

So here is the question: how many homeowners have been helped during the first year of the program? Think about this as the theme from Jeopardy plays in the background. I will give you a is not all that many. OK, here is another hint, so far the program has spent over 50 million dollars. Give up? Here's the answer. In the first year and a quarter of the program, there have been 44 homeowners who have been able to refinance. That's right 44!!!!!!! Do the math. Each person who refinanced cost the government about 1.2 million dollars. And these were not mortgages on enormous mansions. No, the bulk of the money went to pay for the employees who were not able to do much of anything. Only a small portion covered the actual cost of refinancing. In other words, the program has been an enormous failure, a dud, a bomb, a total waste of money.

So you would think that everyone would agree that it makes sense to end this boondoggle, this failure, right? Well, here is the latest word from Obama: President Obama announced he will veto the bill because he believes that “continuation of the FHA refinancing programs is vital to the nation’s sustained economic recovery.”

Obama's Energy Policy

President Obama discussed energy policy today and, in particular, charges that his policies have reduced oil and gas production in the USA. Here's how ABC News described what Obama said:

"Obama today dismissed the rhetoric from Republicans as political maneuvering, saying that while it makes for a good sound bite, it doesn't reflect reality. He added that the answer to the nation's energy security question is not just drilling new wells, because oil from those will not reach the market for some time, but rather focusing on clean-energy investment and technology."

So am I the only one who sees this for the garbage it is? Drilling is no good because it will take a while to get the oil and gas from the new wells? How fast does obama think the clean energy technology will take to go on line? Right now it is estimated that it would be a great success to get 20% of our energy from renewable sources in thirty years. That's right THIRTY YEARS!!!! And again, that's right TWENTY PERCENT!!!!

So how is the US economy supposed to survive if drilling is discouraged? After all, a well drilled now might take six months to deliver new oil or gas to the market. (sorry, I could not help but mock the stupidity of what Obama said.) It drives me crazy when I hear green nonsense from Obama. I have come to believe that he truly thinks what he says makes sense. the green energy stuff is much like a religious belief. Indeed, those fools who claim Obama is a Muslim are wrong. Obama believes in green energy and worships at the same church as Al Gore.

Congressman Ellison's Theatrics just a Ploy

Yesterday, Congressman Kieth Ellison, Democrat of Minnesota, broke into tears as he told the story of one Muslim man who had been killed while trying to help at the WTC on 9-11 but who was wrongly accused of being part of the terrorist plot. Every news story about the hearings covered the weeping congressman and his tale of the bigotry to which this poor Muslim had been subjected. It was, however, all a lie, the kind of thing that one would expect from a congressman who was part of the Nation of Islam run by Louis Farrakhan.

The entire story is set forth at NRO. You can reach it by clicking on the title to this post. I strongly suggest that you read the whole thing. It is not very long, but it makes clear that not only was no one subjected to anti muslim bigotry as Ellison asserts, but rather the Muslim in question was honored by name by Congress, the mayor and the police chief of New York City.

GasFrac conference call – A strong buy becomes even more compelling

GasFrac Energy Services (symbol GFS:CA or GSFVF.PK) had its conference call today. The information from the company makes a strong buy for this stock even more compelling. Here are the key points:
1) The company confirmed that it expects revenue in 2011 to rise to somewhere between double and triple the 2010 level. This is a great growth rate, but even more important is that the growth will accelerate through 2011. GasFrac finished 2010 with 3 sets of equipment that it was able to use with about 30% efficiency. This will rise to 6 sets by the end of April of 2011 and then to 10 sets by November of 2011. Further, because of changes in the mix of equipment, the expected efficiency of utilization should be up to 45-50% by the end of 2011. On this basis alone, the company will exit 2011 with something in the area of six times the revenue generating capacity with which it began the year.
2) The company is close to finalizing an LPG recovery system which will improve gross margins and generate further revenue. Once this is completed, GasFrac will have the only methodology that will be approved by the state of New York to provide completion services for drilling in that state.
3) The company has a large backlog and foresees no problems with keeping all of their equipment fully occupied for the foreseeable future.
4) The company has received its first international patents for its systems, and issuance of US and Canadian patents remain on course.
5) The company expects to begin trading on the TSX shortly.
6) Even with natural gas prices as low as they currently are, there is more than enough work on oil and liquid rich gas to keep GasFrac going full speed ahead.
It is not often that one sees a company growing at any speed like GasFrac. While there may be bumps in the road as GasFrac moves forward, right now, there seems to be a lot of open road ahead.

My 18 month target for the stock is 40.

NOTE: I strongly suggest that it is worth listening to the conference call.

Disclosure: I am long GasFrac stock and have recently added to the position when the price came down.

Thursday, March 10, 2011

The GasFrac Earnings report

This afternoon, GasFrac Energy Services Inc. (symbol GFS:CA or GSFVF.PK) announced the earnings for the fourth quarter of 2010. The results were outstanding. The key to GasFrac's performance is the level of revenue achieved. Revenue for the quarter was in excess of 41 million dollars compared to the extimates from the analysts of 37 million. This seems to be the result of higher amounts achieved for each well completion more than a higher number of completion contracts. This higher revenue bodes quite well for 2011 since neither the market nor the type of well is likely to change much in the near term.

During the quarter, there were extra expenses that pertained to commencing operations in the new areas in the USA as well as training and preparatory costs incurred in connection with the new equipment being brought on line by the company as it expands. As a result, the earnings are not a good indication of future performance.

The company did point out as expected that its first quarter results for 2011 will be hurt a bit by the two week shut down in January as a result of safety concerns after the explosion early in that month. The company says that all safety problems have been remdied and there should be no repeat of the shut down.

The company also made clear that its new equipment will be coming on line more rapidly than previously expected. This should be another force moving the company forward in 2011.

There will be a conference call tomorrow to discuss the results. At that time, we may be able to get more flesh on the bones of this report. As of now, it seems clear that GasFrac is moving forward more rapidly than previously expected. This stock has a bright future.

Does anyone pay attention to history

About a half hour ago, I happened to be watching Special Report on Fox News since I enjoy the panel discussion that comes during the second half of that show. On a commercial, I jumped down one station to CSPAN for the House to see what was going on there. I caught a speech by representative Jesse Jackson Jr. He was explaining what ought to be done to bring prosperity and jobs back to this country. Jackson had a chart showing historical unemployment and he started talking about what Roosevelt had said and done in 1944. According to Jackson, this was key because it was in 1944 that unemployment which had been so high during the great depression had finally started to decline.

That was all I could take. Jackson obviously does not know what he is talking about. In 1944, the USA was in the third year of World War 2. We had about 12 million men under arms. The industrial plants of the country had all been converted to war production and they were going seven days a week, twenty four hours a day just to produce the maximum output for the war effort. Labor was so scarce that women were being employed in factories, something that had never happened in the past. Obviously, Jackson never heard of Rosie the riveter. Unemployment in 1944 was no longer a problem in the USA; rather, labor scarcity was the problem. In other words, Jackson had no idea what he was talking about.

I realize that there were probably only a handful of other Americans who saw Jackson's speech to the House. What he said is of no importance. What is important, however, is that a member of congress is so uneducated about American History that he stands in the House and spouts misinformation.

National Pinnochio Radio

Well it seems that NPR has trouble with the truth. After the Schiller tapes were made public, NPR said it never came close to accepting the $5 million donation from the Muslim Brotherhood that was dangled as bait by the phony contributors. Today we learn that another NPR exec spoke to the phony Brotherhood representative to discuss the possibility that the donation could be made anonymously. In other words, NPR was ready to take the money, but it did not want to tell the public where the money came from. The call also made clear that Vivian Schiller, the CEO who just got fired, was completely aware of the possible donation (again contrary to the info put out by NPR).

What a bunch of liars.

Why Won't Obama act on Libya?

A month ago when Egyptian president Hosni Mubarak was under siege, president Obama was leading the charge to get him to leave. Mubarak was without a doubt an autocrat who did not tolerate much dissent in Egypt and his exit made it possible that the Egyptians could move towards liberty and democracy. The Muslim Brotherhood, however, was waiting in the wings in Egypt as a possible dangerous alternative to such freedom. Right now in Libya we see a popular uprising against Gaddafi. Gaddafi is not only an autocrat, he also sees nothing wrong with using his air force and army against the protesters. he is busy bombing oil installations and civilian population centers in order to regain control. If Mubarak was bad, Gaddafi is a hundred times worse. And president Obama is doing nothing except for saying that any action will have to come from the UN.

There is no way to put this other than to say that Obama's conduct is madness. The USA could easily tip the balance in favor of those who want Gaddafi out. It is very simple, things cannot get worse for Libya than they are under Gaddafi. Coming down on the side of people who are being bombed by their own government for the crime of speaking out is not a big stretch for the USA. Rather, it is what we claim to stand for.

Now comes the latest: US national director of intelligence James Clapper told the US Senate in a hearing that Gaddafi's superior military force would prevail over the long term. That means that there will be tens of thousands of deaths followed by more of Gaddafi's rule. Both England and France are calling for assistance to the new government established by the protesters. Obama, however, just sits there. He has Hillary Clinton trot out to say that it is up to the UN to act, even though the knows that the Russians will veto any resolution in the security council.

It is a national disgrace that Obama is allowing this to happen. If Obama does not want to engage US troops, we should at least be sending assistance to the rebels. We should be speaking out to condemn Gaddafi. Instead, Obama seems to be channeling Barney Fife as president. I think he is following half of Teddy roosevelt's maxim: "Speak softly!" Unfortunately, Obama has changed the rest to "hide" rather than "carry a big stick."

The Obama Budget Big Lie

Here is a question to ask the next time someone tells you that president Obama and the Obamacrats are trying to get spending under control: How is it possible that spending is scheduled to go up for fiscal year 2011 over 2010 and for fiscal year 2012 over 2011 given that in fiscal year 2010 the bulk of the 800 billion dollar stimulus money was spent? In other words, A stimulus package that contained about thirty percent of an entire year's budget gets spent and in the next year spending goes up instead of down. How can that be if Obama is even remotely concerned about controlling spending?

There is no answer to this question without resorting to doubletalk. Not even the staunchest democrat will know how to respond.

The Ultimate in convoluted logic

Well the Obamacrats are at it again. Anything regarding terrorism that they do not like is called a basis for terrorists recruiting new bombers. First it was Guantanamo. Remember candidate Obama telling us that Gitmo was a recruiting tool for the terrorists? To hear Obama tell it, but for the jail at Gitmo, the entire terrorist enterprise would have collapsed. We heard years and years of complaints from the Dems who assured us that Guantanamo was the worst thing America had ever done. Of course, now that Obama is president, he has decided to keep Gitmo open and to hold those terrible, terrible military tribunals at the base. I guess that the lines at the terrorist recruiting stations in Pakistan and elsewhere in the Muslim world are so long that they are visible from space!

Today, it is something new. In the House, there is a hearing today about why and how domestic Muslim terrorists are created. the committee chairman, Peter King of New York has been attacked relentlessly as racist and xenophobic for examining the subject. After all, it is not politically correct. He should be examining why grandmothers in Iowa are getting together to knit explosive devices. Oh wait, they aren't doing that. No matter, the question still needs to be asked.

Now congressman Bennie Thompson of Mississippi is raising the usual Obamacrat charges: the hearings will produce more terrorists. What utter crap. I doubt very much if there are any people in the USA who would be upset at the investigation were it not for the Obamacrats like Thompson who rush forward with misguided charges of discrimination.