Michael E. Newton's Blog, page 15
June 15, 2011
In a foxhole with an attractive girl
On Monday, Barack Obama had this to say about Rep. Debbie Wasserman Schultz:
"If you're in the foxhole, you want Debbie alongside you, because not only is she charming and has that dazzling smile, but she's tough as nails. And that's what's needed during challenging times."
Really? If I was in a foxhole, I wouldn't care much about the attractiveness or charm of my fellow. I'd much rather have somebody who knows how to shoot a big gun. You know, somebody like Sarah Palin or Pamela Gorman!
June 6, 2011
Do we have a problem with our federal government? Or with government in general?
We often complain about the excessive spending of our federal government, and for good reason. We even argue for "states' rights" as a way to restrain the federal government. But are the states any better than the federal government?
This first chart clearly show that the federal government spends, on average, as a percentage of GDP, more than our state and local government. But notice that state and local government spending caught up to the federal government back in 2001 (after the fiscal responsibility of the 1990s).
Obviously, the chart above has two large spikes representing World War I and World War II. What would it look like if we excluded volatile defense spending?
Doing this, it looks like the state and local government spend more money than the federal government. More important, states and local government has grown from about 15 percent of GDP in 1980 to 22 percent today. The federal government has "only" grown from 15 percent to 19 percent.
Looking at these chart, I have no confidence that the states will act with more restraint than the federal government. If our governments are incapable of fixing the problem, that only leaves you and me. We have to replace the people running and governments. We have to teach them and ourselves the value of small governments designed to protect our rights of life, liberty and pursuit of happiness. Everything else government does is an infringement of our rights and they should leave us alone.
June 3, 2011
More trouble ahead for John Paulson
I am assuming that John Paulson, one of the most well-known and successful hedge fund managers around, is not a reader of this blog. In a previous post, I questioned his strategy of buying land and expecting the real estate market to recover. If you've been following the data lately, you know that the real estate market continues to decline.
But John Paulson may have more pressing losses to deal with:
John Paulson, who holds a significant long position in gold and gold mining stocks, suffered a heavy hit to his portfolio when Sino-Forest (TRE.TSX) plummeted following accusations from Muddy Waters Research that the company overstated its timberland holdings in China's Yunnan province.
Paulson's Funds own 34,714,300 shares, or 14% of the outstanding of Sino-Forest. The stock remains halted after sinking 25% yesterday to C$14.46. Shares of Sino-Forest are indicated at C$6.75, off over 50% versus its previous close. The hit to Paulson would be in excess of $500 million.
Oops.
May 31, 2011
Obamanomics = Failure!
S&P/Case-Shiller signals double dip in housing:
U.S. home prices fell in March for the eighth straight month, confirming the beleaguered housing market has entered a double-dip recession, according to a closely followed index released Tuesday
U.S. consumer confidence declines in May:
Consumer confidence fell in May as Americans grew slightly more pessimistic about future job prospects and business conditions, according to a closely followed survey.
Chicago manufacturing gauge nosedives:
A Chicago-area manufacturing gauge dropped by the largest amount in nearly two-and-half years in May, in a further sign that the rise in oil prices and the Japanese earthquake have affected activity.
Another sign of the Chinese bubble bursting
Falling land prices may prompt Chinese property developers to write down the value of their assets, forcing a sober reassessment for those with vast land holdings, according to a survey released Monday by Credit Suisse.
Most at risk are those mainland Chinese and Hong Kong developers who added aggressively to their land banks in 2009 and 2010, the prices of which could come under pressure amid Beijing's ongoing credit tightening, the investment bank said.
The findings were part of a poll of both listed and unlisted companies conducted by an independent research company and commissioned by Credit Suisse.
[...]
Prices for land sold at auction were down 20% so far this year, the report cited one industry expert as saying. Other data indicated price declines of up to 50% for the year to date, although the figures were affected by slumping transaction volumes in cities such as Beijing, possibly overstating the true rate of declines, the report said.
I've written before about the Chinese bubble. Nobody knows when this bubble will burst or deflate, but it will. And now that China is such a major player, it will drag down economies around the world.
May 27, 2011
Table of contents for 'Angry Mobs and Founding Fathers'
Preface
Chapter 1: Angry Mobs in Colonial America
Chapter 2: Founding Fathers in Colonial America
Chapter 3: The War for Independence
Chapter 4: Chaos in the Confederation
Chapter 5: Creating the Constitution
Chapter 6: A Republic, If You Can Keep It.
Epilogue
Coming out this summer!
* Details subject to change prior to publication.
May 25, 2011
May 24, 2011
George Washington speaks up against ObamaCare Exemptions
As the Department of Health and Human Services grants another exemption to part of Obamacare, this time to the American Association of Retired Persons (AARP), I am reminded of what George Washington said:
Tranquillity reigns among the people, with that disposition towards the general government, which is likely to preserve it. They begin to feel the good effects of equal laws and equal protection.
Until we return to a system of "equal laws and equal protection," there will be no tranquility among the people and the people will not have a positive disposition towards government.
May 15, 2011
Book Review: Tempest at Dawn makes you feel like the 56th delegate at the Constitutional Convention
Thanks to James Best's masterpiece, Tempest at Dawn, I felt like the 56th delegate at the Constitutional Convention. Using vivid narrative and expressive dialogue, Tempest at Dawn presents all the major issues the Founding Fathers struggled with. More impressive, you get to know the character of the men who created our great nation.
Tempest at Dawn is based primarily on Madison's notes to the Convention. Mr. Best adds to the story events that happened outside of the State House. It is a true credit to the author that it is difficult to tell where Madison's notes end and the author's speculations begin.
Keeping in mind that Tempest at Dawn is historical fiction, it is a must read for anybody who wants to understand the principles and efforts that went into creating the Constitution and struggles to create our nation.
May 8, 2011
$2.99 for The Path to Tyranny Ebook
Kindle: http://www.amazon.com/gp/product/B003...
Nook: http://search.barnesandnoble.com/The-...
