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Sunday, March 31, 2013

Going with the Grain -- Cal-Maine Foods and Pigrim's Pride Corporation

During the day on Thursday, the United States Department of Agriculture released new information that indicates that the inventory of certain grains and the expected plantings on American farms are substantially different from prior expectations. As a result, corn prices were down by the daily limit in trading in Chicago. Prices for wheat and soybeans also plummeted. Soybean meal also fell drastically. At the same time meat prices rose. Expectations are that the lower grain prices will continue for at least 8 or 9 months. This surprising development presents a major investment opportunity. Companies that are heavy users of grain will be the primary beneficiaries of this earthquake in the grain market.

Pilgrim's Pride Corporation is one of the largest poultry producers in America. Chicken feed is composed mostly of corn (65%) and soybean meal (24%) according to the Pilgrim's Pride latest form 10K, and it is the main raw material cost for Pilgrim's Pride. Cal-Maine Foods is one of the largest producers of eggs in the country. It, too, has corn and soybean meal as the largest component of its variable costs. Both of these companies will benefit greatly by a reduction in the cost of grain.

Let's start with Cal-Maine. A few months back, Cal-Maine suffered a marked decline in earnings which it blamed on unexpectedly high feed prices. During the drought last summer, corn and soy prices soared. As a result, Cal-Maine's earnings dropped well below expectations. Well now the opposite has occured. Corn and soy prices have dropped by about 5% just on Thursday alone, and they are likely to continue to fall. What this means is that the variable costs incurred by Cal-Maine will fall substantially and all of this cost reduction will fall directly to the bottom line. In its latest annual filing with the SEC, Cal-Maine says that feed costs are 71% of its total cost for egg production. A reduction of ten percent in feed costs would mean increased earnings per share of over $0.40 per quarter if everything else stayed constant. At the current P/E multiple of 11, this would translate into $1.60 per share per year and an increase in the value of the stock of just under $18.00 per share. That is nearly a 50% increase in the price of the stock.

Pilgrim's Pride is not as levered to grain prices as Cal-Maine for two reasons. First, Pilgrim's Pride sells chicken both in fresh and prepared form. Prepared chicken requires substantial labor input and it also commands higher prices. Overall, prepared chicken is less dependent on the price of feed than fresh chicken. Since close to 40% of Pilgrim's Pride sales consists of prepared chicken, the overall dependence on feed costs for profits is less. Second, Pilgrim's Pride also has an active program to buy grain futures and some derivatives to lessen the blow of any big increases in grain prices. These investments, however, will also reduce the impact of a drop in grain prices. Even so, if the decline in grain prices continues, it will give a big boost to Pilgrim's Pride profits.

Overall, the surprise announcement by USDA should pay big dividends to both Cal-Maine and Pilgrim's Pride. I support investment in both companies. If you are more cautious, I suggest that you watch the prices of corn and soybean meal for the next few days to see if the down trend continues before investing.

Cal-Maine: symbol CALM; last price $42.56; Dividend and yield $0.80 (1.8%); Earnings ttm $3.64
Pilgrim's Pride: symbol PPC; last price $9.19; no dividend; Earnings ttm $0.70

DISCLOSURE:  I am long PPC and may soon be long CALM

Saturday, March 30, 2013

They Actually Mean This

The Washington Post published a column in which the two authors discuss that the problem of mass shootings is actually a problem of "white males".  Here is the opening of the article:

  Imagine if African American men and boys were committing mass shootings month after month, year after year. Articles and interviews would flood the media, and we’d have political debates demanding that African Americans be “held accountable.” Then, if an atrocity such as the Newtown, Conn., shootings took place and African American male leaders held a news conference to offer solutions, their credibility would be questionable. The public would tell these leaders that they need to focus on problems in their own culture and communities.  But when the criminals and leaders are white men, race and gender become the elephant in the room.

The amazing thing is that these two authors (who are women) seem actually to mean what they wrote.  Have they lost their minds?  Let's examine the facts.

The biggest number of mass shootings and killings in the country takes place on a regular basis during gang wars in big cities.  How many drive-by shootings have you read about?  Beyond that, how often have you read about a family that was killed during a robbery in the inner cities.  These things do not make big news because they happen all the time.  What made the Aurora and Newtown killings such big news is the fact that these mass killings were not done by the usual culprits.  America has become enured to the gang slayings and the random violence of the cities.  It is just when that violence moves elsewhere that people pay attention.

And remember the DC sniper?  That was a black man and his side kick (also black) who engaged in mass shooting, albeit one person at a time.  Was there any racial condemnation then as a result?  No.

The authors of the article also point to Nidal Hassan who killed people at Fort Hood as yet another white man engaging in mass murder.  Again, are they kidding?  Hassan was and is a Islamic terrorist, killing in the name of jihad.  On that basis, I wonder why the authors failed to include the 9-11 terrorists who killed over 3000 on one day.

Here is another excerpt from this demented article:

When white men try to divert attention from gun control by talking about mental health issues, many people buy into the idea that the United States has a national mental health problem, or flawed systems with which to address those problems, and they think that is what produces mass shootings.
But women and girls with mental health issues are not picking up semiautomatic weapons and shooting schoolchildren. Immigrants with mental health issues are not committing mass shootings in malls and movie theaters. Latinos with mental health issues are not continually killing groups of strangers.

Let's just look at the last sentence for a start.  "Latinos with mental health issues are not continually killing groups of strangers."  Well, neither are white men.  No one is CONTINUALLY killing groups of strangers.  But if you were to look at gang activity in Los Angeles or activities connected to the Mexican drug cartels, you might well come to the conclusion that Latino men are continually killing groups of people.  I don't know if the dead are "strangers" or not, but does it really matter? 

And how about saying that women are not shooting children with semiautomatic weapons?  No surprise there.  Throughout human history, men are the ones who have been the killers.  Whether that is killing of animals in hunting, killing of enemies in battles, or killing of any sort, it has always been the man's job.

Over the last fifty years, American society has developed mostly academic groups that look at society as if it has been divided into oppressors and the oppressed.  White men, of course, are always portrayed as the oppressors.  Use of this twisted paradigm results in so-called analysis which is bizarre at best and ridiculous at worst.  The truth is that we would do better to divide society into two different groups:  the sane and the hopelessly demented.  Clearly, the authors of the article in the WaPo belong among the demented.


Was it Hagel or Not?

In the past week two B-2 stealth bombers flew to South Korea and dropped dummy bombs as part of the annual joint military exercises by American and South Korean forces.  In the last two days, some media has reported that the B-2 involvement was added by Secretary of Defense Hagel after North Korea "rescinded" the armistice agreement that ended the Korean War.  Other media has reported that the B-2 flights were planned many months ago and the exercise remained unchanged after the threats by the NK's.  Of course, all the reports were based upon statements made by unnamed "officials" speaking on background and not for attribution.

So which is it?  Did the USA respond to the North Korean bluster, or did we ignore it?  Did Hagel make his first major decision as secretary one in which he raised the tension level in Korea significantly, or was the whole thing just a misunderstanding by the press?  I would like to know, but I doubt I ever will.

I have to say that given all that is happening in Korea these days, I wish Leon Panetta were still in office.  Even better would be if Bob Gates were still there. 



Crazy even for the New York Times

The New York Times is in favor of gay marriage.  Okay, I get that.  The editors of that paper are entitled to their opinions.  Others disagree.  These folks too are entitled to their opinions.  Yesterday, however, the Times published what has to be the kookiest column ever written with regard to same sex marriage.  In a piece headlined Nature's Case for Same Sex Marriage, the writer takes on the argument that procreation is an exclusively heterosexual activity.  That's right, the reporter disputes that only a man and a woman together can make a baby.  You may ask yourself how this could be possible, and here is the answer:  in nature, not all reproduction is heterosexual.  Some trees and snails are both male and female.  Fungi don't have sexes.  That's it, nothing more.  Some plants and simple animals do not use heterosexual reproduction the way people do, so nature supports same sex marriage.

This is idiotic.  Here is just a small note to professor Haskell, the author of the column in question.  Professor, snails and trees are not people.  In America (at least so far) ONLY PEOPLE GET MARRIED.

One has to wonder just how wacked out the editors at the Times really are.  What ever possessed them to run this column?



The AP Explains the World

In an article late Friday, the AP actually "explains" what the North Koreans really want when they announce that they are back at war with South Korea and the United States and threaten to use nuclear weapons to attack "enemy" targets like Los Angeles.  Ready for this gem?  What the North Koreans really want, says the AP, is negotiations leading to a permanent peace treaty.  Actually, says the AP, the armistice agreement that was in place for the last 60 years was too "tenuous", so the NKs want a permanent treaty.

This nonsense was not written by some young stringer; the reporter is none other than the chief of the AP bureau in Korea.  Really, according to the AP the agreement that last for sixty years was too fragile, so the North Koreans, peace loving folks that they are, really want a permanent treaty.  And what better way to move towards a permanent treaty than to threaten nuclear war.

I often discuss the idiocy of mainstream news organizations like the AP.  This latest article, however, is the single most moronic report I have ever seen in the media.  One would think that the reporter would be just too embarrassed to write such slop.  I guess nothing is so stupid as to reach that level.

If you want to see the article, here is the link.



Friday, March 29, 2013

Jim Carrey and Gun Control

It is worthwhile to consider the recent ourburst from Jim Carrey with regard to gun control.  After years without noticeable involvement with the gun control cause, Carrey suddenly released an -xpletive-filled rant that seemed more like a temper tantrum than a political position.  He does not argue for gun control, but rather argues that gun control opponents are somehow subhuman.  He is entitled to his viewpoint, but I people should all understand the genesis of that view.  Perhaps that genesis can best be summed up in this sentence:  Jim Carrey's career is failing and he is trying to get attention.

Right before the outburst, Carrey's latest movie, The Amazing Burt Wonderstone opened.  It is a major flop.  Last night, the average gross at the thousands of theaters showing the film was under $150.  That's $150 for the day, not for each showing.  That means that something like 15 people showed up to see this turkey.  And remember, the film has only been out less than two weeks.  It has not seen an audience fall off over the long term; it never had an audience.  In the last four years, Carrey has had only one major movie:  Mr. Popper's Penguins.  That movie did better than The Amazing Burt Wonderstone (although you could say that about almost any movie).  Penguins, however, was also a dud.  For someone like Carrey who used to be a major movie star, it must be terrifying to watch his career go down the drain.  That is the reason for the outburst.

I wish that the idiots on both side who think that political issues are things about which to scream and make personal attacks would stop it.  A little quiet and rational discussion could take the issue a lot farther than the adolescent phony outrage of an aging failure.  Without calm consideration, ideas that might actually help prevent future violence will just be lost in the sea of stupidity that gets generated by folks like Carrey.



Words or Actions

Consider this question:

Which is worse:

a)  Applying for a position and being told that you cannot be hired because there are already too many employees of your race; or
b)  Hearing someone use a word that used to be common but which has now morphed into a racial "slur"?

Now let's modify the question just a bit.  Assume that the racial quotas in hiring in choice (a) are prominently announced by a large American corporation.  Assume also that after the word in (b) is used, the speaker apologizes and explains that the word was commonly used when he was young and had no negative connontation all those years ago.  So which is worse?

If you are the mainstream media, the answer is clearly choice (b) is worse -- at least when the speaker is a Republican.  Choice (a) is a reference to the practice of MSNBC host Chris Hayes to only parcel out positions on his show by sex and race.  Indeed, that practice seems to be in violation of federal law, but apparently no one seems to care.  Hayes proudly explained his practice in a recent interview with the Columbia Review of Journalism.  Here is the Breitbart report on Hayes surprising admission of illegal behavior.  Choice (b) is the statement by Alaska congressman Young who referred to farm workers of his youth in California as wetbacks and then apologized and explained.  There are numerous stories in the media about the Young statement, but the Hayes admission of illegal behavior is treated as if it never happened.

So, which do you think is worse?



By Far The Best

Here is undoubtedly the best comment of the day.  It comes on Breitbart TV with regard to another of Chris Matthews over-the-top commentaries.  First the commentary:

CHRIS MATTHEWS: Let me start tonight with this: You know that scene in Casablanca when the French police captain shoots the Nazi, Major Strasser, and Humphrey Bogart does the right thing by Ingrid Bergman, and the anti-Nazi hero Victor Lazlo says "Welcome back to the fight, Rick." Well, I felt that way today watching President Obama get back to the front in the historic battle for gun safety. Not Biden, not Bloomberg but the twice elected leader of this country out there leading the charge for America to do the right thing, to measure up morally to the horror of Newtown, Connecticut. So I say it loudly and proudly, welcome back to the fight, Mr. President.

Now the comment by someone using the name Texastommy:

The French police captain didn't shoot the Nazi. Bogart did. With a privately owned weapon.

Bravo, Texastommy.  Chris Matthews is an idiot.  I particularly enjoy it when he accuses someone else of being stupid.  The truth is that if he had an extra half of a brain, he would be a half-wit.




Did We Need to Know? Did They?

ABC News is reporting today that in February, the US military "war gamed" an invasion of North Korea following a collapse of the regime of Kim Jung Un.  Why?

To be more complete, let's take a step back.  Like militaries the world over, the American military has contingency plans for nearly every conceivable operation.  The Pentagon, no doubt, has plans for the invasion of Canada, Cameroon and China, not to mention Portugal, Paraguay and Pakistan.  China, no doubt, has plans for the invasion of India and India has plans for the invasion of China.  The Russians have plans to invade Ukraine. The British probably have plans to invade Argentina and the French probably have plans for the invasion of Spain.  None of these plans mean that any of these countries are about to launch an invasion.  Planning is a normal part of military preparedness.  In other words, a planning session with regard to the "invasion" of North Korea means nothing.

ABC News knows that planning like this means essentially nothing.  So why is it reporting a planning session from two months ago like it is big news?  We all know that the current North Korean leader, Kim the Krazy is making warlike noises at the moment.  Is it really wise for ABC to promote more paranoia on the part of Kim (assuming it is possible for Kim to be more paranoid)?

There are so many stories that ABC news ignores.  ABC has not covered the murder trial of the abortionist who is alleged to have killed seven children and two women in Philadelphia.  ABC did not bother to cover the Fast and Furious gun running scheme in which the Obama administration supplied assault weapons to the Mexican drug cartels.  ABC gave scant coverage to the carnage in Syria for years.  But ABC thinks that a two month old planning exercise is suddenly big news.

As the saying goes, we are living in troubled times.


Why Does He Need a Vacation?

Imagine that you had a job that paid $230,000 and also provided you with a lavish house, body guards, office space, free travel, free medical care, unlimited vacation and many other perks.  Sounds pretty good, huh?  For that kind of job, you must have to work really hard, don't you think?  Well suppose you learned that you really had only one chore that was yours to do, and that you did not have to actually do that work unless you really wanted to do so.  In a nutshell, that is the description of the office of Vice President of the United States.  Vice president Biden's only responsibility is to preside over the Senate, and he does that only once or twice a year.  The rest of the time, he is pretty much free to do what he wants.

Right now, we are in the midst of the "terrible" crisis caused by sequestration.  Both Biden and president Obama have told all Americans how the slowing in the growth of federal spending (there are no cuts) will lead to all sorts of calamities across the land.  Everyone is being squeezed, they tell us.  Everyone, of course, except them.  Biden and his wife are on a gold vacation today in South Carolina.  It is his third vacation of 2013, following a trip to the Virgin Islands in January and a ski vacation in Colorado in February.  Each trip cost the taxpayers hundreds of thousands of dollars beyond the paltry amount that Biden reimburses the government for his hotel room, etc.  So far in just the first three months of 2013, taxpayers have spent something close to three quarters of a million dollars on Biden's vacations alone. 

Given that Biden really has no responsibilities and that he gets a beautiful house in Washington where he lives, why does he need all these vacations?  Furthermore, in the middle of this "crisis" of the sequestration cuts, why is Biden spending and spending at the same time that ordinary people are supposedly being squeezed?




It's Science Not Politics

Remember the last time someone reported that a particular day was the hotest for that date on record and then blamed global warming?  If you watch the weather on TV, you surely have seen one of those reports.  How about the last time you heard a report that a particular hurricane or typhoon was the result of global warming?  You must have heard those.  And for how long were we all told the so called "inconvenient truth" that the Earth was inexorably warming due to the high levels of carbon dioxide pumped into the atmosphere by man.  Everyone who has not spent the last 15 years living in a cave as a hermit has heard that news.  So, given this non-stop drumbeat of global warming stories, one expect an equally prominent reportage of the fact that global temperatures stopped going up almost two decades ago.  You must have heard those news stories, right?  Oh, you didn't?  Really?

The truth is finally starting to get past the wall of political correctness that has required people to worship at the church of global warming in order to be deemed acceptable by the liberal mainstream media.  Here is a story in the Australian about the 20 year hiatus in the rise of global temperatures.  did you get that?  Let me repeat it:  THE 20 YEAR HIATUS IN THE RISE OF GLOBAL TEMPERATURES!!!  The story in the Australian is actually quite fun to read.  The best part is watching the global warming crowd squirming to explain away the fact that temperatures have stopped rising.

First, global warming guru James Hansen talks about coal fired power plants.  Before I go further with what Hansen has to say, let's review the history regarding coal fired power plants.  Remember that when president Obama ran in 2008, he announced that he intended to do away with coal fired plants in the USA.  He said, in essence, that he would not ban them, but that he would put in place regulations that would make operation of such plants so expensive that the owner would "necessarily go bankrupt."  Indeed, since Obama took office, the use of coal in the USA for power has declined so that it produces a significantly smaller portion of US electricity than in 2008.  The reason for getting rid of low cost coal, according to Obama, was to stop contributing to global warming.  Global warming advocates like Al Gore hailed the rules that led to the reduction in coal fired power plants.  So now let's go back to what James Hansen has to say.  According to Hansen, the hiatus in world temperature increase is due to the INCREASED use of coal in power plants in China and India.  Did you get that?  According to guru Hansen, the large increase in coal fired power plants in Asia is stopping global warming in its tracks.  It is the exact opposite of what Obama and Gore have said and done.

Second, the head of the Intergovernmental Panel on Climate Change Rajendra Pachauri says in the Australian that a twenty year hiatus in temperature increase is not significant.  It would have to last at least 40 years to be significant according to good old Raj.  Well, let's take a look back.  In the 1960s and 1970s the temperatures were cooling.  Magazines like Time and Newsweek ran stories about the coming Ice Age.  Global cooling was the scare of the day.  Then from the late 70s to the late 90s temperatures went up.  Let's see, the late 70's to the late 90's is just about 20 years.  That 20 year rise gave birth to the entire global warming story.  But Raj Pachauri says that 20 years doesn't matter.  I guess that it only doesn't matter if it is cooling or stasis; warming must be different.  The truth is that Raj has his entire reputation and position of power based upon the continued belief that the world is actually warming.  No wonder he wants to wait another twenty years before accepting that the warming trend no longer exists.

World climate is a scientific question.  It is not a political question.  People need to understand this.  Even politicians need to understand this.  Remember just how close America came to adopting something like cap and trade to limit global warming, a non-existant problem.  That plan could easily have changed our stagnant economy into a depression.  We cannot let political opportunists control the dialogue any longer.  The stakes are too high.  The scientific answer needs to get out there.  The truth is that there is no clear evidence any longer of any sort of global warming.  Further, the computer models on which all of global warming science was based have been shown to be erroneous.  Let's simplify: THE COMPUTERS THAT PREDICTED GLOBAL WARMING ARE CLEARLY WRONG!!!!!

Tell your friends.  Tell your neighbors.  This is too important to let slide.



A Suggestion For Planned Parenthood

In an astounding bit of video, the representative of the Florida Alliance of Planned Parenthood testified before a committee of the Florida legislature that it should be left up to the mother and the abortion provider what should be done with a child who survives a botched abortion attempt.  That description may sound unclear, so let's break it down.  Planned Parenthood's official representative to the state legislature testified that the official position of Planned Parenthood is that the mother and the doctor can decide to kill a baby after it is born alive!  Now, there is a legal definition that comes into play at that point, which needs to be repeated.  First degree murder in most states is the killing of a human being with malice aforethought.  In other words, a person who kills another person intentionally and in accordance with a plan to do so is guilty of murder.  In many states, this is punishable by death.  BUT THIS IS WHAT PLANNED PARENTHOOD IS ADVOCATING!

I have a suggestion for the members of Planned Parenthood.  I think that for each of them, their mothers and a doctor ought to have the ability to put them to death.  We could call it "really, really, late term abortion".

If there ever was a doubt whether or not federal monies should be given to Planned Parenthood, this makes clear that the answer is NO.  Advocacy for legalized murder is not something that the government ought to support.




Ha Ha?????

Yesterday, the North Koreans released pictures showing their leader Kim Jung Un in their military headquarters reviewing plans for the upcoming war with South Korea and the USA.  In the background of the photo was a chart that showed the places in the USA that the NK's were targeting.  These included Washington, Los Angeles and Austin, Texas.  This morning, I have read three different articles making fun of the selection of Austin as a target.  It is just so damn funny to the authors.  I can't decide who are the bigger jerks:  the NK's for releasing such a photo or the journalists for making light of a threatened nuclear attack.

Essentially every article about the threats from North Korea has added a paragraph in which the reporter tells his or her readers that the consensus among analysts is that the NK's do not have missiles capable of hitting the mainland USA.  This is ridiculous.  I am not saying that the NK's do have missiles.  That is almost impossible.  The point, however, is that one does not need a missile to deliver a nuclear weapon; a freighter or even a commercial airliner would do.  For all we know, there already are North Korean nuclear weapons that were smuggled into the USA over the last few years.  Surely, no one could rely on the border security or customs officials to have prevented this from happening.  These are the same folks who have managed to keep out all but 12 million illegal aliens and who also have managed to do such a great job stopping the flow of drugs across the border.

I strongly doubt that the NK's are serious about launching an attack, but it certainly is not a laughing matter.



Thursday, March 28, 2013

Why The Blackout?

Currently underway in Philadelphia is the trial of one doctor Gosnell.  He is charged with multiple counts of homicide in connection with late term abortions in which he is alleged to have delivered babies alive only to then kill them.  He is also charged in connection with the death of at least one mother who underwent an abortion.

There is almost no coverage of the trial by the national media.  The O'Reilly Factor on Fox News is an exception to this blackout.  In fact, the Fox News Channel is providing coverage across its schedule.  If you look at the mainstream media, however, there is only silence. 

Let's do a thought experiment.  Suppose that the doctor had used an assault weapon to kill these kids.  Would that be enough to bring media attention to the deaths?  While no number has been released of allegedly viable children who were killed in these purported abortions, the total is at least in the teens.  Is this somehow less newsworthy than the Newtown killings because the children were unwanted?  Is it less newsworthy to the mainstream media because the children were minorities?

The sad thing is that the supporters of abortion rights weaken their position by trying to hide alleged murders like these.  In Pennsylvania, it is illegal to carry out an abortion after the 24th week of pregnancy.  This is completely in accord with the Supreme Court ruling in Roe v. Wade.  In fact, under the court rulings, the children (or fetuses, if you prefer) at this late point in the pregnancy are considered individuals with constitutional rights of their own.  Why should the mainstream media be silent on these killings just because they happened in the context of abortion?

It has been forty years since the Supreme Court settled the basic law in America regarding abortion.  During the first three months of pregnancy, the mother has the choice to abort.  During the second three months, the states can regulate abortion, but they cannot prohibit it in most cases.  During the last three months of pregnancy, abortion is not to be permitted except in extremely rare cases. 

In Philadelphia, the doctor was allegedly busy aborting babies during the last third of pregnancy.  If this is proven, it means that the doctor was murdering infants.  There is no other way to put it. 

The media should be ashamed that it is not covering this story.



It's not April First Yet

The Atlantic is running an article by Chris Frates entitled "The Secret Republican Plan to Repeal Obamacare."  Oh no!  The GOP has a secret plan! 

Are they kidding?  The Republicans have been fighting against the monstrosity that is Obamacare since it was first proposed.  The House voted in the last session of Congress for repeal.  The Republican senators have been trying for repeal repeatedly for the last three years.  But the Atlantic discovered a "secret" plan?  Give me a break!

So what is the secret?  Obamacare can be attacked using reconciliation -- that means that Obamacare repeal cannot be filibustered in the senate.  Again, give me a break.  The damn law was passed by reconciliation; it is no secret that it can be repealed the same way. 

What the Atlantic article is actually about is the concern on the left that implementation of Obamacare will pulverize support for the Democrats in 2014.  The leftist media is starting now to portray all of the problems that Obamacare will inevitably cause as some sort of secret Republican ploy.  Well it is not going to work.  America well knows who hoisted this law on us:  Obama and the Obamacrats.  As millions lose coverage and millions more lose their jobs because of Obamacare, the Democrats are going to get all the blame.  Good; they deserve it.  This law ought never to have been passed; it can never work and will only do harm.  It seems that the truth about the law is now seeping into the brains of even the most fervent of the supporters.




Here is a question for you:  Do you think that public schools ought to ban the wearing of head scarves or burqas by Moslem girls?

The normal answer from most of the media would be NEVER!  Banning head scarves would infringe upon the religious freedom of Moslems.  A girl who wears a head scarf or even a burqa is not imposing her views on others; they do not have to join in. 

I happen to agree completely with this view.  So long as the practice does not interfere with the education provided for any of the children, the expression of religious views ought to be allowed.  indeed, the only issue is whether or not these restrictions limit physical education, but that is something which could probably be worked out.

What surprises me, however, is why the same media says nothing when a school bans something similar coming from Christians.  Yesterday's news included a piece about how an elementary school in Alabama has cancelled an annual Easter egg hunt "in order to promote religious diversity".  The children were not required to participate.  The Easter egg hunt in no way impinged upon the education.  But the liberals, particularly in the media, cheered on this attack on the Christians who desired to participate.

Stopping the Easter egg hunt is not just wrong; it is idiotic and discriminatory.  What will come next?  Will kids who wear crosses be barred from the school?  Will religious Jews who wear yamulkas be barred?  Will boys named Christian have to use a different name?  How about girls named Christina or some variant of that name?  Maybe the school should have classes on Christmas just to make the point that it believes in religious diversity.

The principal of the school in Alabama ought to be made to realize that the government in America is not here to promote religious diversity; the government is here to ALLOW religious diversity.  It is a distinction that many seem to want to ignore these days.



Small, Tiny or Infinitesimal?


I wanted to set out the latest estimate of the growth rate of the US economy in larger type.  It is the only way that number could look big.

This morning, the latest revision of the GDP growth rate pushed the level all the way up to just under half a percent per year.  To put this into context, at this rate, it would take twelve years for the economy to grow 5%.  By means of comparison, in 1984 when Ronald Reagan was in office the same length as Barack Obama was in 2012, the growth rate of the American economy was just under 8%.  That's 8% in a single year, not over twelve years.  For those who do not recall, Reagan took office after a terrible economic downturn.  Inflation was soaring, unemployment was high and the economy was stagnant.  Reagan's policies got us a roaring recovery with growth that spread prosperity across America.  Reagan did not stand around and blame problems on his predecessor; Reagan actually solved problems.  Many Americans have probably forgotten what it is like to have a problem solver rather than a problem creator as president.

For what it is worth, I have to add that I have seen three different articles in the mainstream media crowing about how the paltry growth rate is a sign of strength in the economy.  Back in Reagan's day, the same media used to write about how the recovery which ran at 20 times the rate of the Obama recovery was uneven.  It seems the mainstream media still does not understand economics.


Sasha and Malia in Atlantis

As most of you must know, President Obama's daughters Sasha and Malia are in the Bahamas for spring break at the Atlantis resort there.  I just read an article bashing representative Steve King of Iowa for agreeing with a caller on a radio talk show who castigated the president for sending his daughters to the Bahamas for spring break at the same time that the White House is closed to tours by other kids who are on their spring breaks.  The article (printed on Yahoo News) quickly jumped to the defense of the Obamas.  Here is the way that the reporter put it:

The Obamas pay for family vacations themselves. But critics complain that those costs do not include security measures.

Anyone who read that would see that it is a fact that the Obama family pays for their daughters vacation.  On the other hand, it is only those nagging critics who complain about the security costs.

The truth, however, requires more.  First of all, let's start with what the reporter got right:  the president is indeed charged for the cost of his daughter's stay in the Bahamas.  Even though the girls flew down to the islands on Airforce One, Obama paid the normal coach fare for his kids.  The other $50,000 cost for the trip was paid by taxpayers.  The security people who went along on the trip are paid by taxpayers as well.  It is not fair to charge all of the costs associated with security to the trip, because some of those costs would have been incurred whether or not the Obama girls went to the Bahamas or not.  For example, the salaries of the secret service agents would have been incurred even if the girls had stayed in DC.  All of the hotel rooms, meals and other local costs for the security forces, however, are extra.  I do not know exactly how much is being spent on those costs, but let's try to estimate a number.  We know that when the vice president spent a night in Paris, the hotel bill came to over half a million dollars.  If the entourage covering the Obama girls is just one tenth the size of the group with the vice president, then the extra costs just for the hotel would be $50,000 at a minimum.  Also, because the girls are in the Bahamas, the secret service has to have on hand helicopters, vehicles and other items to use in transporting and protecting the girls.  Let's add just $25,000 for those costs.  I am going to stop counting here.  We have already found at least $125,000 spent by taxpayers to let Sasha and Malia have fun at Atlantis for a few days.  This is not critics complaining; it is a fact. 

The $125,000 is enough to keep the White House tours running for nine weeks.  Steve King is correct; Obama should not have sent his daughters off to the Bahamas at the expense of the taxpayers.

Let me add one last point:  I think that the girls should be able to take a vacation for spring break, but was it really necessary for the Obama girls to go outside the USA for spring break?  How about Camp David?  If not there, then remember that it would be just as warm in Hawaii or Florida.  Why should all that extra business go to the Bahamas? 


Just a few Comments

After listening to this morning's "news" report on CBS radio, I have a few questions:

1)  CBS made a big point promoting a statement by Milwaukee mayor Barrett calling for complete background checks on all buyers in gun transactions, even those between private individuals.  Why is it that CBS only covers calls for background checks but never covers the failure of background checks to work.  Nine out of ten states do not supply valid information regarding mental health to the data base used for background checks.  There were mental health issues known about the shooter in Aurora, for example, that would have barred him from purchasing any weapon had they been put into the data base.  Why does no one in the media talk about this?

2)  CBS ran a big story about a mortar attack in Damascus which hit the campus of a local unitversity and resulted in the deaths of a few students.  Why does that story merit attention when the deaths of the other 75,000 killed in Syria got scant notice?  Where has the media been on this story for the last two years?

3)  CBS explained in detail that the Supreme Court argument on the Defense of Marriage Act was a way for the Court to use federalism to accomplish the approval of gay marriage.  Here, my question is who hired that reporter?  Clearly, the CBS reporter on the story had no idea what had happened at the Court.  The issue being considered by the Court happened to come up in the context of gay marriage, but it really was about something entirely different:  namely, could the federal government set a national standard for a matter normally controlled by the states which would supersede the laws of the states.



Wednesday, March 27, 2013

Failure to Face Reality

Sometimes well meaning people refuse to see what is right in front of them.  I have a friend who is very involved with the stock market and who spends a considerable time each day studying both market trends and details of individual companies.  Five years ago, right before the full onset of the financial crisis, this guy invested in Citibank.  I recall discussing with him whether or not it made sense to put further money into banks in view of all the problems arising from mortgages etc.  His response was that the high dividend paid by Citibank would act as a support for the stock; there could be problems, he told me, but the dividend would prevent the stock price from falling very far.  When I asked what would happen if Citibank cut the dividend, he responded with great assurance that Citibank would NEVER cut the dividend.  He told me that such a dividend cut would greatly undermine the credibility of the Citibank management and would disappoint too many of the shareholders; it just won't happen was his refrain.  Of course, in retrospect, we all know what happened.  Citibank did indeed cut the dividend; it now pays less than one-thousandth of what it use to distribute.  The stock price fell by about 99% even after the federal bailout.  Five years later, the stock price is still around only 10% of where it was back then.

So how could this happen?  I don't mean how did the Citibank debacle come about, but rather how could an intelligent investor get something like this so wrong when all the signs of impending doom for Citibank were there in front of him.  The answer is that he made a mistake that most people do:  he assumed that the past predicts the future.  This is a widespread problem.  Look for example at all those economists who predict what the economy will do.  So long as the economy is moving in one direction, these people are pretty good at coming close to the actual results.  When the economy changes direction, however, most of the economists don't even come close with their predictions.  Another cause of what happened is the assumption by many people that they have more insight or power to control events than they actually do.  In 1914, World War I began despite the lack of any desire on either side to commence hostilities; instead, what happened was that each move by the combatants brought on a countermove from the other side which could not be stopped.  The leaders were powerless to prevent the conflict.  A third cause is that some people do not understand that there are factors which are outside their purview but which could dramatically change the outcome.  A belief that Citibank cannot cut the dividend because it would upset shareholders ignore the fact that the government could require such a cut as a condition of any assistance.

My point has nothing to do with Citibank or its dividend; that is just an illustration.  My concern is that many people fail to face reality in deciding how to proceed.  Instead, they act on the basis of half-baked impressions or even blatant misconceptions.  Others refuse to act because they are conditioned not to believe what is in front of them.  Just think about it.  We have a government that says that continued deficit spending is not a problem; we will just continue borrowing all that we need to spend.  But what happens when no one will lend to us?  We have a government that pulled all troops out of Iraq without making any real attempt to reach a satisfactory agreement with that country to permit a stabilizing force to remain.  But what happens when the terrorist forces return?  We have a government that rushed through a major reorganization of the entire healthcare system of the nation so as not to consider the full impact of the changes.  But what happens when that reorganization finally kicks in and millions lose coverage despite copious promises to the contrary?

I am not going to go down the entire list.  People everywhere need to face the hard reality.  America needs to understand what is actually happening; it is not enough to listen to the sugar coated message from the media that disguises more than it explains.  The future of this country depends on this.


What If Someone Miscalculates?

The latest outburst of crazy talk and action from the loons in North Korea is bizarre even by North Korean standards.  The NK's have cut all communications with the South.  The NK's have announced the end of the armistice agreement that ended the Korean War.  The NK's have announce that hostilities could resume at any time.   The NK's have shown a short video portraying an assault by the NK army on the South with the resulting capture of Seoul along with tens of thousands of Americans who happen to be there.

These are just the latest in a string of demented actions taken by the NK's over the years.  Many people think that this is just a temper tantrum by the NK's designed to scare the world into trying to placate them.  This time, however, the tantrum does not seem to be working.  The NK's are screaming and threatening and the rest of the world is yawning.  No one is taking NK leader Kim seriously. 

There is a good reason for this response to the NK antics.  First, they have done this before....repeatedly.  Second, North Korea would be wiped from the map by a full response to any attack coming from the NK's.  Third, prior attempts to mollify the NK's have not worked.  Each time, they just raise the stakes and keep on screaming.

But here is the question of the day:  what if someone miscalculates and actually starts shooting?  What if a North Korean commander at the DMZ believes that he is about to be attacked as the propaganda tells him, so he starts shooting first.  What if a naval commander on an NK ship fires on a South Korean naval vessel, and that ship fires back?  What if Kim Jung Un actually believes the garbage that his government has been spewing, and he decides to hit Seoul with nukes?  Are we ready to respond?  Does Washington even have a contingency plan for such events?  Are the anti-missile defenses of the USA on line to shoot down a missile launched by the NK's at Hawaii?

A war in Korea could easily result in the death of ten million people if nuclear weapons are used.  Even higher numbers of casualties result if the NK's strike first with their full nuclear capability.  We are not talking about a minor event, but the world continues to treat it as such.  Surely, we should not give in to the attempt by the NK's to blackmail us.  Nevertheless, we ought to tell North Korea that any attack from that country will result in its total destruction.