RoadDave

Catching up on the news…

The financial nabobs are talking about the recession, more as the ‘r-word’ rather than saying ‘recession’ out loud, as if that will keep the boogeyman at bay.  There isn’t quite a recession as best I can see, but more a beat-down on the gullible and the greedy.  Yes, foreclosures are through the roof compared to a couple of years ago and the real estate market is tanking. 

The reason is simple:  Loan companies sprang up to sell insanely inflated mortgages to No Income No Job Applicants, the NINJA loan, which was renamed the much more politic Asset-Backed Commercial Paper loan..  Everyone involved did a wink and a nod knowing the bank would end up owning the house, when the owner tossed the keys into the bank’s mail slot and walked away. 

The lenders were betting that the ever-increasing real estate boom would allow them to flip the house to cover the default and still make a ton of money re-mortgaging the property for the new value, about five times the original price.  Which might have worked if the number of defaulted and foreclosed properties was small and the market kept going up.

Funny how everyone involved collected all their fees and commission up front.  From a documentation fee, to a loan fee, to the commissions from selling the loans as a package to lenders, to the stock market betting on the viability of the loans, everyone made their money up front.  We have overlooked a small fact; that for a loan to be real, someone has to pay down the loan every 30 days. 

Rice is being hoarded and corn for tortillas is under price control in Mexico.  Two of the most common and plentiful foodstuffs on our planet are being priced out of reach.  Why?  Corn is the easy one to answer:  Greed.  Oil companies love to make ethanol from corn, as corn has lots of sugar in it.  Lots of sugar means lots of alcohol, as corn ethanol is nothing more than backwoods moonshine making, but on an industrial scale. 

The oil companies pay top dollar for corn and I can’t blame a farmer for looking at that equation and deciding to sell to Chevron or Shell, instead of the local mill or distributor.  However, there are signs that people are figuring this out.  The EU is looking at passing legislation forcing the producers of ethanol for fuel to use things that are not food, to produce ethanol. 

In a posting last year I wrote about it.  This is one where the government should step in and legislate a change.  Force the oil companies to make ethanol from cellulose sources, like wheat stalks, switchgrass, or other non-food sources.  The price difference is negligible at best and the technology for cellulostic ethanol works fine. 

If there are oil company or government slushheads out there who don’t understand what I’m saying, email me and I’ll send you the link to iogen.ca which will tell you all about it. (Disclosure:  I don’t own any stock in Iogen, or any related companies either.)

Making fuel for someone’s SUV from food is wrong on so many levels it makes your eyes hurt just thinking about it. 

As for the rice ‘shortage’, there is no shortage.  There is a lot of speculation on prices driven, as best I can see, by people who stand to make a lot of money off rapidly rising prices.  India is a net exporter of rice.  So are China and the US.  The farmers aren’t making a bucket of money and the final buyer is being priced out of the market, so someone between the farm gate at the dinner plate is getting rich.  Come on down commodities brokers world wide!

It would seem that drought in Australia’s rice-growing region (which has been going on for six years, so it’s not like it was a big surprise) has affected production levels.  With a few carefully whispered hints, stories appear that the world is going to end as rice prices are going up and the streets will be four-deep in cadavers by next Tuesday.  Yes, bad news is better news than good news, so food riots in Haiti becomes the rising price scare that has taken over the media.

Here’s the reality:  Rice takes more water to grow than wheat or millet.  Australia is in the midst of a long drought and farmers there are abandoning rice production at $240 an acre pretax profit, for wine grapes that need less water and produce a pretax profit of $2,000 an acre.  Which would you prefer to grow, as a farmer? 

The real issue is the drought in Australia.  Is it a climatic blip or a permanent condition?  Odds are it is a permanent condition due to global climate change.  This means other countries can increase their production of rice, profitably and things will settle down again.  This doesn’t make for exciting headlines ("Rice production pooched this year, Looks good for next year")  Give it a week or two for the media to forget about it and things will be fine.

Foolishness is so endemic that hardly a day goes by without some celeb, pol, or sports figure getting caught doing the dishonourable, faithless, trashy, disgusting, stupid or merely unsanitary.  AC Milan striker Ronaldo involved in an altercation with transvestite prostitutes in Rio de Janeiro hotel.  The Olympic Torch – Tibetan Monk Beating World Tour. Vladimir Putin shanking some 20 year old. Barak Obama’s preacher going off his meds.  Microsoft offering to buy Yahoo, then getting pissy when Yahoo wants more than $47.5 billion for the joint.  The US Military lowering standards further to get anyone into the Iraq war who has a trigger finger. 

Now the US Border Patrol is advertising for recruits.  Their motto?  "If you’re so fcuked up the Army won’t take you, we will.  We’re the Border Patrol!"

To quote Bella the housecat:  Wheeeeeeeee!! 

Now that we’re finally into April Showers we can catch our breath and look back, up, and out at goings on:

US Politics:  Hillary is not going to do it.  Read the entrails all you want, but Obama has the momentum to take the Democratic nomination.  This will split the Democrats into two camps that will fight like wet cats in a backpack.  Everyone involved will be scratched to ribbons.  In a moment of exceptional stupidity, Obama will choose an Eagleton-like running mate and watch his campaign implode.  McCain will run up the middle and take the Big Chair.

China:  My bet is that China will let the Olympics and Tibet play out, taking their hits with a grim face, but as soon as the Games are over, be assured that the tolerance and benign behaviour we see now, will come to a screeching halt.  Western companies have been greed-handing their way into business with China since Nixon opened the doors and China has welcomed their dealing.  Now China has them by the attachments.  Imagine if the Central Planning Council of China decided not to work with Wal-Mart any more:  The stores would be empty in a month and about 11 percent of the US would be out of a job. 

Economy:  Everything we eat, wear, live in, watch, drink or roll on top of uses oil.  China and India are paying top dollar for oil.  Oil companies sell oil where they get top dollar.  Get used to very expensive gasoline as it isn’t going to get better.  Meanwhile, the CEO’s make record levels of compensation and bonuses while their companies post record losses.  This is entirely upside down, much like the first dot.com bust, where people were getting millions in venture capital because they could register a domain name that sounded cool. 

In some towns the biggest employer is Wal-Mart.  This means you have a bunch of people working in the service industry whose sole contribution to the economy is to go to Pizza Hut once a week.  Nobody actually makes anything, they just service sector each other, the server at Pizza Hut saving their tips to go to Wal-Mart to buy something once a week, to be served by the same people who gave them the tips that allows them to buy a clock radio that was made by someone in Taiwan.  This is not a viable economic model.

Society:  We’re so accustomed to having no power that the surveillance society is only going to become more pervasive in the name of ‘security’.  This might let off a bit when President Jo-Jo The Idiot Boy leaves office, but big business knows that government paranoia is a great source of revenue.  You could almost predict that Homeland Security would be privatized to KBR:  Most of the Iraq war support functions already are.

The police using military surveillance drones to keep tabs on us is already underway in Miami with other cities looking longingly at the remote sensing capabilities the military uses, but turned domestically.  Mikey Chertoff is leading that one.  After all, you’re not a terrorist are you?

However, despite it all, people still go about their lives, occasionally doing nice things for each other.  Bits and pieces of common sense sneak under the radar of the lawmakers.  For example, the landlord posse has permitted a conglomerate of food banks to canvass their high rise buildings for donations.  They generated something near two truck loads for local food banks, which is good for the food banks.

Despite all the mean and greedy behaviours out there, people are still being somewhat civil to each other and the general society we live in.  We might not be able to control much, but we can steer how we interact with others. 

At least until the authorities make it illegal.

In a moment of exceptional candour, New York State Governor Eliot Spitzer admitted to calling in the professionals in the handrail waxing business.  The episode set him back $4,300, plus his career.

Of course he’s apologized to his wife, neighbours, the state of New York, the Stay Puff Marshmallow Man, the Police, and the guy on 42nd street who talks to his invisible friends.  Very nice of him to humiliate his wife in public, by the way.

The screeching hypocrisy is that Eliot Spitzer had a reputation for being a law and order, go after the big guys kind of Attorney General.  That’s the part that galls the most:  The hypocrisy.

The incomprehensible, in all the sordid sex scandals involving politicians since the dawn of time, is this:  Can’t you just keep it in your pants?  Yes, I know that men are ruled by testosterone, the Little Head ruling the Big Head argument, but it actually goes deeper than that.  What the real intoxicant is not sex, but power.

Power, said Hank Kissinger, is the ultimate aphrodisiac and power does truly warp people even more than testosterone.  Some wiser observers than I have determined that the majority of difficulties on the planet come from those with power being grimly determined not to share it, as well as being oriented to using their power flagrantly to demonstrate that they have power and can wield it.

War, for example, is just a power dynamic taken to an extreme.  However, closer to home, things like racism are also power dynamic issues:  The outsiders want some and the insiders don’t want to give up any.  The boss has plenty but won’t let you do the work the right way, in order to demonstrate his power over you.  The schoolyard bully knows that he can scare the crap out of you, by making you feel like you have no power, so you give him your lunch money in exchange for not getting beaten. 

To carry the argument further, Eliot Spitzer (or any other pol caught dipping his wick) knows that he has all kinds of power and is so besotted by it, he feels he can ignore the rules the rest of us work under.  Even bolder, he thinks that if caught up to the bristles in a giraffe, he can make the news media shut up about it. 

This presumption has been proven wrong so many times (the media won’t shut up about it) that one would figure politicians would eventually learn the lesson.  Even toddlers understand ‘red element on stove means pain’ after one test of the lesson, and usually the toddler will stay away from a hot element on a stove.  Empirically, this tells me that politicians are dumber than toddlers.

Again, empirically, this demonstrates that power is even more of a common-sense killer than testosterone.  In the grips of a testosterone flood, a male with a raging circus tent can play one-handed Spit in the Carpet with Ms Thumb and her Four Fabulous Friends to get over it. 

Someone in the grips of a Power Flood can’t actually do anything to to get over it.

Here’s the hook:  We give these clowns the power over us.  We willingly submit to their posturing and posing during elections and mark our ballots.  In other parts of life, we do the same thing.  We let people exercise power over us and we feel miserable about it.  Why do we have to feel that way?  The answer is we don’t have to feel miserable about it.

Yes, there has to be rules and there has to be sanctions when the rules aren’t followed.  Without rules we would have loons driving 190 kph down the wrong lane of the highway, drunk, wearing a pair of granny panties on their head and singing "Mambo Number Five" at the top of their lungs, in a Porsche. 

Rules I don’t mind, as the common-sense ones keep dumb humans from being truly dumb and often protect us from our own dumbness.  But rules designed to demonstrate power without any benefit to the rest of us, are simply stupid.

Which brings us back to Eliot Spitzer, or any of the other recent crop of wick dippers, toe tappers, goat ropers and reality stylists.  If you want to climb up on the mountain top of being a paragon of virtue, be prepared to act as a paragon of virtue, in everything you do.  Until then, perhaps you should just shut the hell up and keep it in your pants.          

There hasn’t been much action on Road-Dave in the past two weeks, as there has been some deadlines on the work side of life that have required all the brain cycles available. 

Suffice to say, the Democrats are doing their thing with Obama and Hilary running close enough to give pollsters fits. 

The Republicans have anointed John McCain. Willard (Mitt) Romney is going to go back to whatever it is he used to do.  

The US Government has passed laws allowing the use of spy satellites domestically and absolving US Telcos and network carriers of any responsibility for the warrant-less wiretapping of email, surfing habits, downloads and phone calls of citizens.

The EU is insisting on fingerprints for all visitors, just like the US, while Canada works the worry-beads over our troops in Afghanistan and the potential for a federal election this spring.

Meanwhile, we’re getting snowed upon, again; Toronto catching the wrath of global climate change, with more snow in the past two weeks than has fallen in the past two years.  Side streets and sidewalks are essentially glaciers that won’t disappear until April, when we’ll find wooly mammoths and postal carriers frozen in place.

The Writers Guild has cut a deal with producers, so the production can begin again on vapid shows with laugh tracks and as much innovation as taking a piss left-handed can bring you.

And a beagle has been chosen as the grand champion of the Westiminster Dog Show.  He’s cute, in a beagle way.

This must be February.  It too shall pass.

In a posting a few weeks ago, we detailed some of the issues with a Canadian medical isotope reactor in Chalk River that had been shut down for maintenance, leading to a shortage of medical isotopes worldwide.

Two weeks ago the head of the Canadian Nuclear Safety Commission (CNSC), Linda Keen, got handed her head in a bag and was fired from her job as the chief of the nuclear safety watchdog agency.  Natural Resources Minister Gary Lunn was the source of Linda Keen’s firing, the evening before she was scheduled to testify before a House of Commons committee about the reactor shut down.

In testimony yesterday, Keen identified that the National Reactor Universal (NRU) had been running without backup power for key systems for 17 months, exposing the public to undue risk of a catastrophic failure of the reactor.  Downside to keeping the NRU cold, was a shortage of medical isotopes, worldwide.

The Government lined up on the side of Atomic Energy of Canada Limited (AECL), who make money producing the isotopes, in a reactor that AECL owns and is supposed to operate safely.  Since Linda Keen and the Canadian Nuclear Safety Commission was insisting AECL operate the reactor safely in accordance with the law, they were getting in the way of revenue. 

Ergo, Parliament passed temporary legislation telling the CNSC to piss off and then Gary Lunn fired Linda Keen for showing "a lack of leadership":  NRU went hot a few days later, providing medical isotopes again.  According to CTV, the backup power and pumps are now installed.

In the world of electrical appliances, as an example, the Canadian Standards Association (CSA) says that there are standards regarding how appliances are wired, flammability, durability and safety.  Standards, like CSA, or Underwriters Laboratory in the US, mean you can buy an electric can opener and be certain you won’t get electrocuted, and the can opener won’t run amok slicing open your fridge if a switch fails. 

The manufacturer of the electric can opener has to build it to a standard to be allowed to sell it.  The standard means the manufacturer has to put in ‘expensive’ components, like safe electrical connections and provide documentation that the design is safe.  CSA then tests samples and, if all is good, issues a CSA number for the can opener.  As a consumer then, you can buy it and be reasonably certain that the electric can opener is safe to use for its intended purpose.

Ideally, a standards and safety organization, like CSA, TUV, UL and so on, operate in a friendly adversary atmosphere with the manufacturers.  The manufacturers may grumble about having to prove safety, but they also know that enforced safety standards mean good products and less likelihood of the manufacturer being sued.  The manufacturer also knows that without the CSA tag, they cannot sell their product legally.    

Here’s the disconnect:  The Canadian Nuclear Safety Commission is charged with making sure that reactors run safely, to the standards agreed to, in keeping with their mandate and legislation.  Atomic Energy of Canada Limited knows the standards and rules, as they helped write most of them. 

AECL decided to not follow the rules and the CNSC did what they are supposed to do:  Stop the operation of a potentially unsafe reactor.  For doing her job, Linda Keen got fired.  The smokescreen put up by the government was that lives were being put in jeopardy because of the shortage of medical isotopes. 

Which begs the question, what about the citizens of Chalk River, Deep River, Petawawa, Pembroke, Renfrew, Arnprior and Ottawa, being put at risk of the NRU going bad because of the safety equipment not being in place?  There’s only a million or so citizens in range. 

If the unthinkable had happened, Linda Keen would have her head handed to her on a platter because she didn’t insist on shutting down NRU for safety violations.  Presumably, Gary Lunn would have fired her for not showing leadership again. 

Funny how nobody is questioning the wisdom of AECL running their reactor without the needed equipment in place.  Yes, the folks at AECL know how to run reactors safely enough, but the idea of a standards organization acting as the watchdog, is to have sober second thought and review of things. 

Linda Keen did what she was supposed to do and got fired for it.

If you’ve got a opening for a senior executive in your company, you’d be well-served by someone like Linda Keen, who actually does the things she is supposed to do, instead of some meat-puppet like Gary Lunn who punishes the innocent.