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Vive la liberté! Vive all y'all!
Ante omnia armari
To each of you ... Thanks for stopping by.
Tuesday, July 29, 2008
Sunday, July 27, 2008
Gasoline prices were down as low as $3.85 a gallon in some areas along the trip. Traffic was brisk but nowhere near as bad as it has been in past years. My guess is that the cost of fuel is indeed keeping many people off the roads. My Chevy Cobalt averaged over 30 MPG for the 2,200-mile roundtrip; the onboard computer showed that the average speed (city and highway) was 55 MPH. If traffic allowed, I would cruise at the posted limits (mostly 70 MPH). On a rare dash to avoid a bottleneck, I would hit 80 MPH. The worst roads and heaviest traffic on the trip were in Illinois. Indiana, Kentucky, Tennessee, Georgia, and Florida seem to have a good handle on road maintenance and managing traffic flow in construction areas.
For overnight stays while traveling, Marriot’s Fairfield Inns are very clean and accommodating, and I have never found one in a questionable area of any town. Rest areas on the interstates are accessible, clean, and usually safe during daylight hours. Well-lit busy large truck stops are the best bet for stops during the night. The Cobalt has over a 400-mile range on a tank of gas, but I usually look for a place to refuel when the onboard computer says that I have 100 miles of fuel left.
Some politicians are resurrecting the advocacy of a 55 MPH national speed limit to conserve fossil fuel. That is nonsense, few observed the limit years ago and few will observe it if it is again applied. A more effective step would be to keep the speed limits that exist, and have the automakers hardwire some chips into cars and trucks governing the top speed to 80 MPH. My guess is that the price of gasoline will drop low enough for most of us to resume our lives as usual, and for us to lose our zealotry for more fuel-efficient vehicles. Would a government mandate help? Mandatory belt restraints, air bags, and air pollution control would never have happened via the benevolence of the automakers. Mandating fuel economy may have merit. America loves to drive.
Tuesday, July 15, 2008
The Chairman of the Federal Reserve Board of Governors, Ben Bernanke, today stated the obvious. Our economy sucks and there is no end in sight. He expressed The Fed’s concern about inflation.
It is baffling that The Fed cannot see the obvious; unless The Fed can magically control energy, food, and health care prices, there is not a damn thing The Fed can do about our current inflation. Quite properly, inflation is The Fed’s concern when based on a booming economy fed by low interest loans and easy credit. However, The Fed cannot control inflation in a stagnant economy fed by the rising cost of energy, food, and healthcare. Bernanke needs to quit trying to repair what he has no tools or talent to fix.
The prices of houses are DOWN. Automobile prices are DOWN. The values of our stock portfolios are DOWN. The dividend yield from our savings is DOWN. Employment is DOWN. The purchasing power of our wages is DOWN. Our ability to get a loan is DOWN. If Ben Bernanke believes that a wildly inflationary wage increase is heading our way, he is insane. When sales are DOWN in a depressed economy, just what INFLATION is it that concerns The Fed?
Part of the reason that we have boom and bust economic cycles is because The Fed over-corrects on both the downside and upside. Unless he wants to step forward to accept a large chunk of the blame for our economic mess, Ben Bernanke needs to have a good old-fashioned cup of “Shut the fuck up!”
Monday, July 14, 2008
There were ways around the 20% rule. If you were credit worthy, mortgage companies could offer third party mortgage guarantee insurance, which upped your monthly payment but spared you from at least part of the 20% rule. Once your equity equaled 20% of the homes value you could often have the insurance dropped, or you could refinance without it.
Somehow, the mortgage industry got away from some fundamental rules and started offering loans without verifying incomes. If mortgage guarantee insurance was still required, I am not sure why we would be having a problem now, unless of course the losses were large enough to bankrupt the insurance companies.
For whatever the many reasons, the system allowed the waiving or bending of too many rules, and too many loans went to people not able to make payments. However unfair the 20% down payment rule seems, it looks like we should return to it as a standard. It would not hurt to go back to the practice of verifying the buyer’s income and existing debts.
Friday, July 11, 2008
No money has been added to my investment portfolio since I retired, which was part of the plan. If I did not have “enough” money, it would have been silly to retire. The intent was, and remains, for the portfolio to be self-sustaining.
My modest portfolio consists of fixed income investments and mutual funds. Some are inside a tax deferred 457B plan from my former employer; some are in a taxable account. I try to keep the allocations balanced wherever they reside, which is hard to do since the 457B plan does not have the sectors that I can play in the taxable account. I live strictly from my meager pension income; none of my personal savings is considered part of my investment portfolio, nor is the equity in my home. I have been very blessed; my personal savings has gone up a squeak in the 11 months since I retired, much of it due to old-fashioned frugality.
Now that the DOW, NASDAQ, and S&P 500 have all dropped into bear market territory, it is time to review my dumb-luck investment strategy. My portfolio is down only 2% during the same period the major market indicators have dropped over 20%. I would prefer that dumb-luck earn me buckets of money, but in this economic environment, I’m very happy only being down only 2%.
Excluding junk bonds, fixed cash is around 55% (and barely earning anything). Junk bond exposure is down to around 10%, all junk funds that held substantial GM notes are now closed out. Domestic stock fund exposure was increased to 33%, mostly with money from the sale of the junk bonds. Foreign stock exposure currently is around 2%. All of the moves that I made into the market were on days of dire market weakness. I still limit myself to one move per month, with a maximum dollar amount for that move.
Since much of the junk bond market holds paper from companies that have not been fiscally responsible, I expect to close myself entirely out of the junk bond funds in the coming months. There probably is money to be earned in junk bonds, but for now, I have lost faith.
I expect (but do not predict) this bear market will trade in a choppy range for at least a year. Any purchases I make will be on days when there are few buyers. I don’t pretend to know what downside risk the stock market has in the coming months, nor do I have any clue when the bull market will return. My personal tolerance for portfolio risk will bottom out around 50% fixed income, 45% domestic stock funds, and 5% foreign funds. Some REIT (real estate investment trusts) funds are looking attractive, but are still scary. The 457B does not offer them, so any play I might make with REITs would be taxable, and more than likely a very long-term play. Some “experts” are saying healthcare looks attractive at these levels, and I might tag along with them there. I have more studying to do and more coins to flip.
My days of playing individual stocks are gone, probably forever. In the 457B, my choices are from their selection of index and managed funds. My taxable trading account moves are almost exclusively ETFs (exchange-traded funds).
Obligatory disclaimer: None of the above is investment advice. The dumb-luck investment strategy is not an art or a science, and only those with questionable intellect and low moral character should attempt it; it is not for the sane or sober.
Tuesday, July 8, 2008
Democrats PLEASE drop the “CHANGE” mantra; it is a major source of migraines for those of us over fifty-five years old, mainly because we still remember the changes brought by Jimmy Carter’s comedy club of idealists. Except for our underwear, we old-timers rarely change anything. Even then, clean underwear is only for special occasions such as going to the hospital, church, or jail. We cling to our guns and our religion, and we like our underwear to cling to us.
I have underwear older than Barack Obama is, and that underwear has far more experience on the dark side of life than he does. Do you think politics is dirty? Barack needs to see my underwear; if he can deal with that he can rule the world, otherwise he needs to go back to Chicago for some seasoning.
Just how old is underwear with tags that read, "Made in the USA"? Only one candidate is old enough to remember; unfortunately, he may be too old to remember.
One candidate is so young he looks like he just stepped out of diapers and the other is so old he looks ready to be wrapped back into them. How should we vote? Depends...
James A. Zachary Jr.
Sunday, July 6, 2008
Very interesting article below on internet "freedom" limits.
All I have to say on the matter is "Fuck it."
'Public' online spaces don't carry speech, rights
By ANICK JESDANUN, AP Internet Writer
Sun Jul 6, 2:17 PM ET
Rant all you want in a public park. A police officer generally won't eject you for your remarks alone, however unpopular or provocative.
Say it on the Internet, and you'll find that free speech and other constitutional rights are anything but guaranteed.
Companies in charge of seemingly public spaces online wipe out content that's controversial but otherwise legal. Service providers write their own rules for users worldwide and set foreign policy when they cooperate with regimes like China. They serve as prosecutor, judge and jury in handling disputes behind closed doors.
The governmental role that companies play online is taking on greater importance as their services — from online hangouts to virtual repositories of photos and video — become more central to public discourse around the world. It's a fallout of the Internet's market-driven growth, but possible remedies, including government regulation, can be worse than the symptoms.
Dutch photographer Maarten Dors met the limits of free speech at Yahoo Inc.'s photo-sharing service, Flickr, when he posted an image of an early-adolescent boy with disheveled hair and a ragged T-shirt, staring blankly with a lit cigarette in his mouth.
Without prior notice, Yahoo deleted the photo on grounds it violated an unwritten ban on depicting children smoking. Dors eventually convinced a Yahoo manager that — far from promoting smoking — the photo had value as a statement on poverty and street life in Romania. Yet another employee deleted it again a few months later.
"I never thought of it as a photo of a smoking kid," Dors said. "It was just of a kid in Romania and how his life is. You can never make a serious documentary if you always have to think about what Flickr will delete."
There may be legitimate reasons to take action, such as to stop spam, security threats, copyright infringement and child pornography, but many cases aren't clear-cut, and balancing competing needs can get thorny.
"We often get caught in the middle between a rock and a hard place," said Christine Jones, general counsel with service provider GoDaddy.com Inc. "We're obviously sensitive to the freedoms we have, particularly in this country, to speak our mind, (yet) we want to be good corporate citizens and make the Internet a better and safer place."
In Dors' case, the law is fully with Yahoo. Its terms of service, similar to those of other service providers, gives Yahoo "sole discretion to pre-screen, refuse or remove any content." Service providers aren't required to police content, but they aren't prohibited from doing so.
While mindful of free speech and other rights, Yahoo and other companies say they must craft and enforce guidelines that go beyond legal requirements to protect their brands and foster safe, enjoyable communities — ones where minors may be roaming.
Guidelines help "engender a positive community experience," one to which users will want to return, said Anne Toth, Yahoo's vice president for policy.
Dors ultimately got his photo restored a second time, and Yahoo has apologized, acknowledging its community managers went too far.
Heather Champ, community director for Flickr, said the company crafts policies based on feedback from users and trains employees to weigh disputes fairly and consistently, though mistakes can happen.
"We're humans," she said. "We're pretty transparent when we make mistakes. We have a record of being good about stepping up and fessing up."
But that underscores another consequence of having online commons controlled by private corporations. Rules aren't always clear, enforcement is inconsistent, and users can find content removed or accounts terminated without a hearing. Appeals are solely at the service provider's discretion.
Users get caught in the crossfire as hundreds of individual service representatives apply their own interpretations of corporate policies, sometimes imposing personal agendas or misreading guidelines.
To wit: Verizon Wireless barred an abortion-rights group from obtaining a "short code" for conducting text-messaging campaigns, while LiveJournal suspended legitimate blogs on fiction and crime victims in a crackdown on pedophilia. Two lines criticizing President Bush disappeared from AT&T Inc.'s webcast of a Pearl Jam concert. All three decisions were reversed only after senior executives intervened amid complaints.
Inconsistencies and mysteries behind decisions lead to perceptions that content is being stricken merely for being unpopular.
"As we move more of our communications into social networks, how are we limiting ourselves if we can't see alternative points of view, if we can't see the things that offend us?" asked Fred Stutzman, a University of North Carolina researcher who tracks online communities.
First Amendment protections generally do not extend to private property in the physical world, allowing a shopping mall to legally kick out a customer wearing a T-shirt with a picture of a smoking child.
With online services becoming greater conduits than shopping malls for public communications, however, some advocacy groups believe the federal government needs to guarantee open access to speech. That, of course, could also invite meddling by the government, the way broadcasters now face indecency and other restrictions that are criticized as vague.
Others believe companies shouldn't police content at all, and if they do, they should at least make clearer the rules and the mechanisms for appeal.
"Vagueness does not inspire the confidence of people and leaves room for gaming the system by outside groups," said Lauren Weinstein, a veteran computer scientist and Internet activist. "When the rules are clear and the grievance procedures are clear, then people know what they are working with and they at least have a starting point in urging changes in those rules."
But Marjorie Heins, director of the Free Expression Policy Project, questions whether the private sector is equipped to handle such matters at all. She said written rules mean little when service representatives applying them "tend to be tone-deaf. They don't see context."
At least when a court order or other governmental action is involved, "there's more of a guarantee of due process protections," said Robin Gross, executive director of the civil-liberties group IP Justice. With a private company, users' rights are limited to the service provider's contractual terms of services.
Jonathan Zittrain, a Harvard professor who recently published a book on threats to the Internet's openness, said parties unhappy with sensitive materials online are increasingly aware they can simply pressure service providers and other intermediaries.
"Going after individuals can be difficult. They can be hard to find. They can be hard to sue," Zittrain said. "Intermediaries still have a calculus where if a particular Web site is causing a lot of trouble ... it may not be worth it to them."
Unable to stop purveyors of child pornography directly, New York Attorney General Andrew Cuomo recently persuaded three major access providers to disable online newsgroups that distribute such images. But rather than cut off those specific newsgroups, all three decided to reduce administrative hassles by also disabling thousands of legitimate groups devoted to TV shows, the New York Mets and other topics.
Gordon Lyon, who runs a site that archives e-mail postings on security, found his domain name suddenly deactivated because one entry contained MySpace passwords obtained by hackers.
He said MySpace went directly to domain provider GoDaddy, which effectively shut down his entire site, rather than contact him to remove the one posting or replace passwords with asterisks. GoDaddy justified such drastic measures, saying that waiting to reach Lyon would have unnecessarily exposed MySpace passwords, including those to profiles of children.
Meanwhile, in response to complaints it would not specify, Network Solutions LLC decided to suspend a Web hosting account that Dutch filmmaker Geert Wilders was using to promote a movie that criticizes the Quran — before the movie was even posted and without the company finding any actual violation of its rules.
Service providers say unhappy customers can always go elsewhere, but choice is often limited.
Many leading services, particularly online hangouts like Facebook and News Corp.'s MySpace or media-sharing sites such as Flickr and Google Inc.'s YouTube, have acquired a cachet that cannot be replicated. To evict a user from an online community would be like banishing that person to the outskirts of town.
Other sites "don't have the critical mass. No one would see it," said Scott Kerr, a member of the gay punk band Kids on TV, which found its profile mysteriously deleted from MySpace last year. "People know that MySpace is the biggest site that contains music."
MySpace denies engaging in any censorship and says profiles removed are generally in response to complaints of spam and other abuses. GoDaddy also defends its commitment to speech, saying account suspensions are a last resort.
Few service providers actively review content before it gets posted and usually take action only in response to complaints.
In that sense, Flickr, YouTube and other sites consider their reviews "checks and balances" against any community mob directed at unpopular speech — YouTube has pointedly refused to delete many video clips tied to Muslim extremists, for instance, because they didn't specifically contain violence or hate speech.
Still, should these sites even make such rules? And how can they ensure the guidelines are consistently enforced?
YouTube has policies against showing people "getting hurt, attacked or humiliated," banning even clips OK for TV news shows, but how is YouTube to know whether a video clip shows real violence or actors portraying it? Either way, showing the video is legal and may provoke useful discussions on brutality.
"Balancing these interests raises very tough issues," YouTube acknowledged in a statement.
Unwilling to play the role of arbiter, the group-messaging service Twitter has resisted pressure to tighten its rules.
"What counts as name-calling? What counts as making fun of someone in a way that's good-natured?" said Jason Goldman, Twitter's director of program management. "There are sites that do employ teams of people that
do that investigation ... but we feel that's a job we wouldn't do well."
Other sites are trying to be more transparent in their decisions.
Online auctioneer eBay Inc., for instance, has elaborated on its policies over the years, to the extent that sellers can drill down to where they can ship hatching eggs (U.S. addresses only) and what items related to natural disasters are permissible (they must have "substantial social, artistic or political value"). Hypothetical examples accompany each policy.
LiveJournal has recently eased restrictions on blogging. The new harassment clause, for instance, expressly lets members state negative feelings or opinions about another, and parodies of public figures are now permitted despite a ban on impersonation. Restrictions on nudity specifically exempt non-sexualized art and breast feeding.
The site took the unusual step of soliciting community feedback and setting up an advisory board with prominent Internet scholars such as Danah Boyd and Lawrence Lessig and two user representatives elected in May.
The effort comes just a year after a crackdown on pedophilia backfired. LiveJournal suspended hundreds of blogs that dealt with child abuse and sexual violence, only to find many were actually fictional works or discussions meant to protect children. The company's chief executive issued a public apology.
Community backlash can restrain service providers, but as Internet companies continue to consolidate and Internet users spend more time using vendor-controlled platforms such as mobile devices or social-networking sites, the community's power to demand free speech and other rights diminishes.
Weinstein, the veteran computer scientist, said that as people congregate at fewer places, "if you're knocked off one of those, in a lot of ways you don't exist."
Thursday, July 3, 2008
I like to believe that some substantiation of an approaching meltdown of the oil market just came in the mail today. I have been advised to cash out all of my equities and put the money into oil futures. The unsolicited newsletter cites stories of people getting rich beyond their wildest dreams by playing commodities. It avowed the usual effervescent baloney, supplies are critically limited, demand will push prices forever upward, and I can anticipate nothing but enormous profits.
Was anyone around for the penny-stock bubble that popped over a couple of decades back? How about the wealth promised and lost during the Japanese stock market bubble? How about the delusions of grandeur spawned during the “dot com” bubble of a decade ago? Was there not also a bubble for heating oil and natural gas a few winters back? Whatever happened to the riches promised from “day trading?” Did we not just go through a real estate bubble, with promises of ever-increasing property values and easy money for all that wanted to play the game? All bubbles say the same thing; that this time things are different, and prices will never again go down.
Oil prices will waffle with market conditions, as do the prices of all commodities. Nothing goes up forever and nothing stays down forever. Greed and fear are driving much of the price of oil, and greed and fear are motivating many people, and sadly many corporations, to play games in very dangerous financial arenas. Pension funds and financial institutions are now betting on oil going up forever. These same players lost their asses playing with the exotic debt packages born of the real estate bubble. I must strenuously object when I see pension funds and banks acting foolishly.
For the individual, it is your right to put your money where you want, it is a free country. I hope you find riches and happiness beyond imagination. Just remember, when you hear that a friend of a friend got rich playing with fire, it is probably nothing but smoke. Those who are burned rarely brag about their hideous scars.
Is there a chance that this bubble may grow larger before it blows up? Absolutely, it will grow until nearly everyone believes that it will grow forever. This may take just days or it may take months; if we go to another war all bets will be subject to the rules of chaos. As soon as all fools are safely floating on the bubble, it will indeed burst. Many say there is one key strategy the bona fide experts use when a bubble has grown to the point of failure. The genuine experts quietly take their money out while the amateurs are feverishly putting their money in.
James A. Zachary Jr.
Wednesday, July 2, 2008
Tue Jul 1, 5:11 PM ET
John Adams predicted in a letter to his wife Abigail that Americans would celebrate their Independence Day on July 2. Off by two days - not too bad for government work.
On July 2, 1776, Congress adopted the Declaration of Independence, signed only by Charles Thompson (the secretary of Congress) and John Hancock (the presiding officer). Two days later Congress approved the revised version and ordered it to be printed and distributed to the states and military officers. The other signatures would have to wait.
Many actually viewed the Declaration of Independence as a yawner - a rehashing of arguments already made against the British government. John Adams would later describe the Declaration as "dress and ornament rather than Body, Soul, or Substance." The exception was the last paragraph that said the united colonies "are and of Right ought to be Free and Independent states" and were "Absolved of all Allegiance to the British Crown."
For Adams, it was the momentum towards achieving American independence initiated on July 2 that future generations would consider worth celebrating, not the approval of this document on July 4.
Interestingly, the pomp and circumstance that many Americans presume took place on July 4, 1776, actually occurred days to weeks afterwards.
The Philadelphia Evening Post published the Declaration's full text in its July 6 newspaper. And the Declaration of Independence was publicly read from the State House in Philadelphia on July 8. Later that day, it was read in Easton, PA, Trenton, NJ, and to the local embryonic militia to provide much-needed inspiration against the formidable British.
The shouting and firing of muskets that followed these first public readings represent America's first celebrations of independence.
As copies spread, the Declaration of Independence would be read at town meetings and religious services. In response, Americans lit bonfires, fired guns, rang bells, and removed symbols of the British monarchy.
The following year, no member of Congress thought about commemorating the adoption of the Declaration of Independence until July 3 - one day too late. So the first organized elaborate celebration of independence occurred the following day: July 4, 1777, in Philadelphia. Ships in the harbor were decked in the nation's colors. Cannons rained 13-gun salutes in honor of each state. And parades and fireworks spiced up the festivities.
Fireworks did not become staples of July 4 celebrations until after 1816, when Americans began producing their own pyrotechnics and no longer relied on expensive fireworks from across the pond.
Since 1777, the tradition of celebrating America's independence on July 4 has continued.
Quiz: The Strange History of American Independence How Did America Get Its Name? Who Created Uncle Sam? Original Story: When Was the 4th of July First Celebrated?
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