Well’s Fargo posted record profits… seems those businesses that concerned themselves with the long run will work out just as expected (article)

Just as the market should, it’s punishing those who made mistakes, while rewarding those who have not.

Mr. President – can we now stop giving money to those businesses that made bad decisions to cause their failure?

While watching the Sunday news shows, Fox News Sunday, This Week with George Stephanopoulos, as well as Real Time with Bill Maher.  The commentary of those representing Mr. Obama’s opinions reminded me of utopia.

As with many people, I first learned the word Utopia as a small child in grade school.  As we have all learned, utopia is that wonderful society where crime, pestilence, incivility, and all the bad things that humans seem prone to do disappear. Shortly thereafter however, we learned that this society is fictional.

That was apparently true until these past week’s events.

To begin with; the facts.

Mr. Obama went to the G20 conference this past week to discuss the current ongoing financial crisis.  & while he gave a great speech about it’s highlights and togetherness, each item we asked of our international allies was denied.  The only thing that seems to have happened is an overall agreement that all countries need to attack this problem (as if this were needed to begin with) and an increase in the strength of the IMF with pledged funds.

Secondarily, Mr. Obama used some time this weekend to deliver a stirring speech about a world without nuclear weapons.  This of course took place while North Korea and Iran continue to openly disregard non-proliferation treaties and feckless UN resolutions.  North Korea even took this opportunity to test Mr. Obama by test launching a long range missile they have recently developed.

Mr. Obama’s response was to ask for yet another UN resolution, as if somehow the mere fact he became President will change North Korea’s known behavior.

However, according to the pundits that presume to speak for Mr. Obama there is absolutely nothing to see here but the great things that took place.  Their two main points seem to be:

First, the world likes us again.  It doesn’t matter so much what took place at the G20, all the world leaders who hated Mr. Bush loved Mr. Obama.  Additionally, he got agreement on the IMF.  Sure, it was only pledged money and none of it really exists yet, but there’s agreement to help poorer countries around the world as well as their own.

Second, since the President’s goal is that of a world without nuclear arms, he is acting accordingly.  It doesn’t matter that North Korea and Iran are acting in defiance because the President is pushing our goal of a world without nuclear arms.  Remember, you can hug people with nuclear arms…

Both of these points are clearly without thought and merit.

The first point about being liked is just disgustingly childish.  Also, getting countries to agree on working to solve a crisis they have already been working on seems comparable to getting them all to agree the world is round.  Sure, if agreement is the goal, then you have accomplished your goal, but I’m unsure what usefulness comes from having agreement that already existed.

The second point though, is concerning. Mr. Obama’s point is that we will reduce are arsenal in conjunction with Russia to make the world a safer place.  As if Russia, the US, the UK, and other rational countries having nuclear weapons is even remotely analogous to the irrational regimes of Iran or NK having them.

This is like saying a cop operating a pistol is the same as a person with known mental problems operating a pistol.  There are currently only two countries on the earth looking to get nuclear weapons while simultaneously proclaiming their intent to use them.  Having a belief that disarming Russia or the US will help this situation seems naive.

Additionally, if our populace actually began to act as if we didn’t need defenses because we believe the world is something it’s not, we are surely surrendering our freedom just as if we had capitulated to the crown all those years ago.

My only hope is that POTUS and his staff understand that history will always prove war to be the norm and not the exception.  As much as we’d all like to live in a world where we don’t have to fear tyrants and dictators threatening other countries’ security, this is not the world that exists now.  Nor will any reasoning based on an understanding of history, should we expect this world to exist.

As you’ve undoubtedly heard from several sources, one of the problems with the sub-prime lending crisis was the scourge of racism.  Several studies showed that sub-prime borrowing occurred mostly in poorer metropolitan communities.

In March of 2007 USA Today (article):

…But Hispanics and African-Americans were far more likely to leverage the American dream with subprime loans — higher-cost products for buyers with impaired credit — that are now going bad at an alarming rate….

In March of 2007 on NPR (article):

…says Mary Moore, a spokeswoman from the Center for Responsible Lending…

…They’re less likely to have a college education and more likely to be a minority, especially black or Hispanic…

In July of 2007, the NAACP filed suit (here):

The NAACP filed suit in Los Angeles federal court against 14 of the country’s largest lenders, alleging systematic, institutionalized racism in sub-prime home mortgage lending.

December 2007 from Senator  Cardin (here):

…This is because statistics show that nationwide in 2005, more than 54 percent of loans to African Americans and 46 percent of loans to Latinos were subprime loans.

But minorities did not necessarily receive subprime loans because of lower credit scores or lower incomes.  Five years ago, the Center for Community Change, a non-profit consumer advocacy group, issued a report entitled, “Risk or Race?”  It demonstrated that subprime lenders target minority communities and that African-Americans and Latinos pay higher loan rates than whites with similar incomes.

This entire reaction was based upon faulty logic.  Some people and organizations had a certain belief and took some correlative studies to prove their preconceptions.  So they safely ignored that when you take things out of context such as “49% of subprime loans go to minorities” without asking further questions such as:

1. Was there a difference between minority buyers and white buyers with similar credit scores?
2. What percentage of total buyers where minorities at the time the studies were taken?

You are not really answering the question you think you are.

Not that this will stop some, but to actually find the truth, the NY Fed conducted their own study.

New York Fed report (WSJ here):

The paper addresses concerns regarding lenders that may have targeted minority borrowers, enticing them into costlier loans between 2004 and 2006, the peak period of subprime lending.

Based on a sample of 75,000 adjustable-rate mortgages, researchers at the New York Fed say they find “no evidence of adverse pricing by race, ethnicity, or gender in either the initial rate or the reset margin.”

“If any pricing differential exists, minority borrowers appear to pay slightly lower rates, as do those borrowers in Zip codes with a larger percentage of black or Hispanic residents or a higher unemployment rate,” the paper added.

However,  when people are already convinced about their preconceived notions and race-baters now having a monetary reason to continue the myth, I doubt any of those organizations or people will recognize the reality of the situation.

As much as they don’t want to admit it – the United States does not have the institutional racism they continue to claim.

Please note:  This doesn’t mean there isn’t any racism at all, because there obviously is.  Real racists should be mocked and ridiculed and shunned by normal society.  I can’t think of anything dumber than a racist.  Of course when you’re paying attention to made up racism – it’s very easy to lose sight of real racism.

The United States continues to drift further away from the capitalist policies which gave it the most powerful system in the world.

The house, not happy with furor over their idiotic after-the-fact tax, believes they can now pass bills stating specifc amounts and types of pay executives should get (here):

WASHINGTON (MarketWatch) — Following on the furor over multimillion-dollar bonuses paid to traders at American International Group, the House approved legislation Wednesday that would limit compensation for executives and employees at financial institutions receiving money from the government’s $700 billion financial bailout package.

The legislation was approved 247-171. The majority of the support for the bill came from Democrats.

“Bonuses must be passed on performance standards,” said Rep. Alan Grayson, D-Fla., the chief sponsor of the bill. “If they don’t want this, they can pay the taxpayers back the billions we have provided.”

Grayson’s bill requires all future compensation to be performance-based…

The arrogance it must take to think a normal salary or retention bonus isn’t based upon performance because they think it’s too high, or too much, or whatever boogles the mind.

Meanwhile of course, the President is following the arrogance path by announcing such things as the removal of a private company’s CEO, changes in their board of directors, and attempting to direct one international company to merge with an American company under the belief this will help that company continue.

Article:

Chrysler must become friends with Fiat pronto.

The U.S. government has threatened to suspend federal aid for Chrysler unless it secures a deal with the Italian carmaker within 30 days, senior administration officials told Forbes.

Article:

…GM (GM: 1.92, -0.0978, -4.85%) CEO Rick Wagoner is stepping down immediately, the government said on Monday, and is being succeeded by the company’s Chief Operating Officer, Fritz Henderson. Kent Kresa, a GM board member since 2003, will serve as interim chairman….

It’s almost as if, like Rip Van Winkle, I feel asleep for many years only to wake up in some alternate universe that doesn’t resemble the free society to which I’ve grown accustom.

Instead, we live in a brand new world, where due to some cult status/idol worship for our leaders (great article here), we’ve completely lost the understanding that giving the executive branch this much power will only continue to hurt us in the long run.

I seem to have left a world where private companies understood that private failure is a better solution for companies who have made bad decisions than to be artificially propped up by governmental control.

A world where even the most arrogant legislator or President never thought they could understand the market complexities; where solutions come from millions of independent interactions that no mere mortal could understand.

A world where government officials, who continue to waste tax payer dollars with figures in the trillions, didn’t have the guts to complain about how private businesses spend their money.

A world where great writings such as the Federalist Papers, the US Constitution, Hayek, Locke, Adam Smith, and many, many others… are just relecks of the past.

A world where normal humans knew their limitations and actively sought humility as a virtue.