Eden Hill Journal

Comments, dreams, stories, and rantings from a middle-aged native of Maine living on a shoestring and a prayer in the woods of Maine. My portion of the family farm is to be known as Eden Hill Farm just because I want to call it that and because that's the closest thing to the truth that I could come up with. If you enjoy what I write, email me or make a comment. If you enjoy Eden Hill, come visit.

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Location: Maine, United States

Tuesday, December 30, 2008

Tripp [Sunday] Saturday

Bristol done did it! I never thought she would but she did! She is now, according to news reports, the mother of Tripp Easton Mitchell Johnston. It appears that the birth was announced to the world by People Magazine who, according to some reports, will be paying the Palins some $300,000.00 for the rights to publish the baby's pictures. That's some deal! Those are some lucky kids, those two, what with Bristol's new baby being worth so much and with Levi's luck as a home-schooled high school dropout or graduate or whatever he is landing a job as an electrician for the oil industry at age 18! All this despite the rumors, substantiated or not who knows, of him being a recovering addict and the son of an accused drug-dealing mom.
But the baby has arrived, silver spoon and all!
Update: Well I published without doing enough research, I guess. People is now reporting the birth occurred on Saturday, not Sunday. I guess when it comes to the Palins, even People can't get the gossip straight the first time. Go figure. 7 pounds 7 ounce, 7 pounds 4 ounce, 5:30 AM Saturday, Sunday, take your pick.

Saturday, December 27, 2008

Street Value

Wall Street certainly is a mystery to me. How can so much money appear out of nowhere and then vanish just as quickly? It doesn't even equate with a poker game where someone can be in the money one minute and in deep trouble the next, all on a single bad hand. No, at the poker table the money all goes to somebody in the end. On the street, it just vanishes.
A year ago we were all trying to figure out why Wall Street investors were pulling their investments out of stocks and sinking them into oil futures when these same investors knew very well that they were damaging the economy by driving up fuel prices. Yet that didn't stop them from doing it. That whole thing turned into a little circus ring with investors seeing oil futures going up and finding the temptation too great to pass up. The more investors dumped stocks and went for the oil futures, the more money there was in that market chasing after a fixed commodity, so the prices rose making the investment in oil futures even more tempting for other investors. Money seems to have a bubble mentality.
I never did figure out if the oil futures market wound up ahead on that game or lost their shirts when oil futures toppled.
But it's the mortgage securities market that really baffles me. We all know that investors lost their shirts on that one. I was thinking about that today and it occurred to me that it isn't really the bankers themselves that lost at that game. I mean, banks did lose but not as much as investors lost. It was a good game for banks. They made the loans, then packaged them and got their money back by selling those mortgages to investors. But really, what did investors see in low-interest mortgages? Why were they so hot to buy that crap when stocks were still on the rise? What made this market in low-return mortgages look more appealing to investors than actual productive stocks?
Clearly it wasn't the return on investment represented by mortgage interest. There had to be something besides interest that made these securities seem so appealing. But what?
The only thing I can think of is that the value of the property secured by these mortgages had some sort of appeal. Back in '03, '04, and to some extent '05 there was an attitude that real estate was a secure investment. But the security of real estate seemed to be rising. Property values were on the rise and seemed to be rising at a stronger rate every year. Mortgage investment strategy, the packaging of mortgages for sale to Wall Street investors and the seemingly endless supply of easy money for real estate purchases, was throwing ever more money at a limited commodity, housing. This extra money was driving up the prices of real estate. These rising prices seemed to offer security to investors so even more money came flooding in from Wall Street. That whole thing turned into a little circus ring with investors seeing real estate futures going up and finding the temptation too great to pass up.
Deja Vu...
There's only one hitch here...
There were only two ways for Wall Street to see any sort of "good" return on their investments in low-interest mortgages.
One was if the mortgages were short-term and the interest rates would be higher when the mortgages were renegotiated. Did Wall Street stand to gain this way? Was that part of the scheme? Somehow I doubt it. I doubt that the investors expected the homeowners to give them higher interest rates rather than refinancing the mortgages and leaving the investors with near-zero return.
The other way seems much more likely to me. The other way I'm referring to is that Wall Street could see gains if the mortgage became a foreclosure and the investor wound up holding a property whose value had inflated well above the value of the mortgage. With property prices rising like a space shot to the moon, that option must have had a very strong appeal to investors who knew the loans were being given to many people who simply did not have the ability to pay them off. Foreclosures were a sure thing.
So what was it that finally tipped over this apple cart?
Katrina.
How?
It was Katrina when gasoline prices finally rose above $3.00 a gallon. Do we remember that? We were paying $3.10, $3.20, even $3.50 or more a gallon for a little while back then. The price soon came back down, but the scare altered the landscape of our economy. The scare scarred us.
How?
For one thing it allowed the advocates of "peak oil" to convince us that there was a tipping point in the supply/demand scale for oil and that this tipping point was getting close. Talk of $5.00 and $10.00 gasoline didn't seem so far-fetched anymore. Gasoline had gone from $1.50 a gallon to $3.50 in just the first five years of the Bush Administration and the sky was the limit. We were actively alienating our suppliers around the world as well as our competitors and the future looked bleak.
So all of a sudden American home buyers began finding themselves a little short of money as they commuted in their new SUVs from their new far-suburban homes to work. Already the Federal Reserve Bank had decided there was a risk of commodity inflation so interest rates were on the way up. Low-interest credit was getting harder to find. But consumers were finding they had less money left each month to make house payments. They were paying too much of their income for heat and gasoline.
At first it must have looked like a wet dream come true for Wall Street. People would soon be foreclosing on property that was worth much more than what they paid for it.
Wet dreams rarely end well.
The only way most people would foreclose is if they had no way to sell their property and pay off the mortgage. The only way that would happen was if the value of the home was falling and had fallen below the current value of the mortgage.
Somehow Wall Street hadn't taken this into account -that is to say if my option two above was true, if Wall Street anticipated foreclosures as a part of the investment returns strategy. Wall Street anticipated foreclosures in an inflating property market. Instead, they got foreclosures in a deflating market. They got foreclosures in the only way that foreclosure made sense.
Maybe now with less money to throw around, we can find some stability for awhile. Maybe we can figure out a way to stop investors from building these ridiculous pyramid schemes that just wind up being clown and elephant filled circuses?
And why are there elephants in the circus and not donkeys?
Maybe this is like a high stakes poker game where there winds up being far more money on the table than entered the room in the players' pockets.

Thursday, December 25, 2008

Jesusmas

Interesting new term being thrown out in this video, "Christ-ophobes." I think that would be what the right-wingers would refer to me as. But watching this whole video reminded me a lot of good old (now deceased) Jerry Falwell. Look at the jiggling blubber around his scornfully smiling face, and the way he puckers his lips when he is trying to make a special point to his simpleton audience. And the pride, oh look at all the pride! If you don't see Falwell in that you have forgotten Falwell.
So from your favorite Christ-ophobe, Merry Jesusmas to all!

Wednesday, December 24, 2008

Christmas - Saved

Saved in the sense of "born again" and God's Grace and the Spirit of Christ...
Just not "saved" in the sense of "returning to the real meaning of Christmas," the birth of the God-child Jesus, star shining bright, wise men crossing deserts on camels, angels talking with lonely shepherds in the night. What I mean is saved in the sense of being saved from the religious notion that somehow Christmas has been stolen from them.
You see, I've been there. I've had these strong feelings that Christmas has been so commercialized that we have lost sight of the real meaning of the nativity, the Bible story about the birth of Jesus. I have been a member of a church, many of whose members bemoaned this same over-commercialization and corruption of Christmas. But I was weak as a Christian. I couldn't blind myself to the fact that ALL of the people in the church who had this complaint still celebrated Christmas in the commercial way, most very happily so! Me, well I knew that if I were to put my beliefs into practice and deprive myself and my family of a Christmas tree and brightly wrapped presents and cookies and eggnog and trips over to Birch Street to look at the lights on that guy's house and then on to the end of Maple Street and a few other streets in town and Santa Claus and Rudolph and the mad rush of wrapping all the presents on Christmas Eve (my wife's tradition) and Christmas songs and... well you know what I'm talking about. The story of the pregnant virgin and her much older husband being turned away at the inn but by God's fiat creating that spectacle at Bethlehem a couple thousand years ago was losing ground.
But a day or two ago I came to the realization that the story of Jesus' birth on the Winter Solstice is a fable in itself. The Bible never said Jesus was born on December 25 and there is no indication that all the events surrounding this birth all took place on that same day. In fact, the tradition of celebrating the birth of Jesus on or around the solstice seems to have derived from the adoption by the church of Rome of pagan celebrations in order to increase membership.
In other words the story of Christmas being about the virgin birth is just as bogus as the story of Santa and Rudolph.
So why sweat it? God in His Grace isn't sweating it. Complaints and resentment don't express the spirit of Christ. And really, none of us are upset by the commercialization the way Jesus was upset by the money changers in the temple. So why not just shut up about the religious significance and get on with enjoying Christmas?
Remind me that I wrote this if I ever slip back into thinking that the real meaning of Christmas has been lost.
Update: You have to read this...

Sunday, December 21, 2008

A Liberal Flat Earth

I might be stepping out of bounds here in terms of what I usually have to say about things, but I don't think it's very far out. You be the judge.
I just read a post in Juan Cole's blog about his attending a Muslim event along with Melissa Etheridge and Rick Warren. Rick Warren is the author of the book The Purpose-Driven Life and pastor of Saddleback Church in Lake Forest, California. Barack Obama has invited Warren to give the invocation at his inauguration ceremony on January 20. This has caused quite a stir since Warren is a religious conservative and advocated for California's Proposition 8 which banned gay marriage in the state and annulled 18,000 gay marriages. I have been reading for days in John Aravosis's AMERICAblog about what a bad idea it was for Obama to make that choice since Warren has done so much damage to the gay and lesbian community. Aravosis was an early and strong supporter of Obama even when other highly respected liberal bloggers favored Hillary Clinton.
An aside...
I'm neither gay nor lesbian. I found the love scenes in Brokeback Mountain disturbing and un-tasteful. In other words I find male homosexual copulation to be disgusting. I don't attribute morals to the God who is going to oversee the destruction of our entire universe eventually and certainly the death of our own sun. But in human terms I can understand why most societies consider homosexuality immoral. Homosexual marriage appears to me to be an attempt to legitimize the morality of homosexual sex. I do see that this is what the gay and lesbian activists have been trying to do for decades here in America, to legitimize the morality of how they engage in sex. Again, morality isn't a God thing. It is based on human consensus. But that doesn't mean that in human terms anything goes. Some things clearly are immoral. Take for instance the torture of human beings. That is clearly immoral by any human standards of morality.
Back to my thesis...
Aravosis's derogatory tone towards Obama's choice of Warren and by extension Obama's bad judgment in general - something we have heard a lot of recently from liberals - hasn't been striking a chord with me. I have not been surprised or upset so far with Obama's leadership or with his choices when it comes to advisors and cabinet members. It makes sense to me that Obama wants his administration to represent not a small core of America's political community, the liberals, but a wider spectrum. Obama has enough faith in his own judgment and in the powers entrusted to him by the Constitution to believe that he can lead this wide political spectrum to do what is right for America. I still think that's what Obama is doing - not just trying to do but doing in reality.
So I disagree with Aravosis and the LGBT "community" here. I don't see Warren as a hateful person. I don't see myself as hateful either. But Aravosis is basing his support on only one issue, the gay and lesbian marriage issue. This isn't at all unlike the conservatives who base their judgment of political figures on one or a few conservative hotspots.
Juan Cole attempts to lift the debate a little bit. He comes to Warren's defense and suggests that it would do the right wing religious faction good to embrace social issues the way Warren has been doing. That's a very good point. But it seems to be Cole's only point.
I've met a lot of conservative-minded people who have good personalities, really likeable people, gifted and charming. That's no reason to trust them any more than charm and philanthropy are good reasons to trust car salesmen. There can be very little doubt that Warren and his congregation are advocates of conservative policy and adversaries of anybody with liberal intent. Cole doesn't seem to want to point that out.
I just think that all these single-issue debates are two-dimensional, so flat-earth. You have to look into the depths of what people want to keep secret before you can see things three-dimensionally, before you see the curvature of the earth. Warren may appear to be philanthropic, but at his core he's still a conservative and so are his constituents. They keep a lot of secrets. Aravosis may appear to be liberal and an Obama supporter, but at his core he is a gay activist. He keeps a lot of secrets.
The earth appears to be flat from so many different and opposing perspectives. It's up to us to expose that it is round, to expose the secrets that make the illusion of two-dimensional reality possible.

Saturday, December 20, 2008

Bristol Day

Today is the day. According to her grandfather, today is the day that Bristol Palin (hopefully soon to be Johnston) is due. Strangely enough the Palin news today is filled instead with the story of Levi's mom's arrest Thursday on six felony drug charges. I guess she's out on bail now or something? No room for any news about Bristol herself. Oh well, her time will come I'm sure. Soon we will all glory in the smiling solstice baby, firstborn male of the next Palin generation.
I could be blogging on other things, I suppose. I mean it's not as though nothing else is happening. But the shoe incident in Iraq is old news now except that it looks like the shoe-tosser may be suing the Iraqi officials who beat him after his arrest. What is there about democracy and freedom of expression that this guy clearly just doesn't get?
Bush is again handing out billions like they were lollipops, this time to save union jobs. Go figure on that one! Who'd a ever thought GW Bush would be caught dead saving union jobs on his way out the door. Grampa Bush must be rolling over in his grave! But GW is an oil man. He knows what it means to have to keep the unions happy. I mean look at Sarah Palin's hubby. He was a union oilman wasn't he?... Ahhh, a steelworker... I mean among other things... like a member of an Alaskan secessionist party that strongly dislikes the US government?... or is that a myth?
Well anyway, I wish Bristol and Levi and Sherry and Sarah and the whole Alaska clan all the best this winter solstice which isn't actually today. It happens tomorrow morning, Sunday December 21, at 7:04 AM Eastern, 3:04 AM Alaskan time.
I suppose I should try to clarify something here. Reading the comments to the drug bust news in the Miami Herald, it became clear that some Republicans are taking this news personally. I mean they are behaving as though the news were some sort of an attack or smear on their pure lily-white favorite Republican, Sarah Palin. But how could anyone possibly take it that way? I mean, really, people! Get a grip! Sarah isn't the one that got caught. And aren't those troopers working for Sarah? So Sarah is the good guy here, right? Even if she isn't commenting... yet... Sarah is the Euthyphro here, the pious one.
I mean I suppose you could stretch the parental responsibility thing and wonder how such a responsible Christian full-time-and-then-some working mom could let her daughter hang out with and even be having sex with the home-schooled son of some drug-crazed (or whatever) woman. But I mean really, folks, get serious. What mother has any say in what her teenage daughter chooses to do with her life? Let Sarah off the hook here, for goodness sakes.

Friday, December 12, 2008

Big 3

Cars have pretty much been a hobby of mine since I was a teenager. I had my first car before I had my driver's license and I got my license at 15. Usually I work on my own cars although I default to the professional mechanics when things go beyond my limited tool set or my limited know-how. I have had some foreign-named brands along the way, a couple of Saabs, a couple of Toyotas, a Datsun pickup that never saw the road, even a KIA made Ford Festiva that was an absolute blast to drive. That thing made the road seem very roomy! I had an 850 Mini when I was in England that I could drive on the Motorways with my gas-pedal foot on the floorboard and I owned two German-made Buick Opels. But I've had American cars too, quite a few of them, Pontiac, Buick, Oldsmobile, Chevy, Ford, Dodge and Chrysler and Plymouth. I never had a Cadillac or Jeep but my parents had a Hudson, a Studebaker, and a Rambler while I was growing up. My Microsoft spell checker is going wild with all these old and foreign car names.
I've seen quite a few American auto names vanish. Hudson and Rambler and Studebaker are gone, victims of the 50s, 60s, and 70s.. Oldsmobile too and Plymouth, victims of the 21st Century. Rambler became AMC and that was swallowed by Chrysler which was swallowed by Daimler Benz of Germany and then spun off to some Wall Street folks that don't want it anymore. Oldsmobile was one of the old-timers that was swallowed by GM and by the time I came along shared parts and Fisher body designs with the rest of the GM lineup. Plymouth became indistinguishable from Dodge and even Chrysler in recent years with the Breeze/Stratus/Cirrus, the Voyager/Caravan/Town & Country, and the uni-named Neons and PT Cruisers.
But today the big news is that all these names may be ready to topple. Why? Because the economy is shot and the Republicans in the Senate have never seen a better opportunity to break the American auto unions.
There he goes pointing fingers again, you all say. True.
But it's true. Republicans yesterday filibustered a 14 billion dollar "Big 3" stimulus bill because the UAW wouldn't agree to wage parity with the foreign automakers who build cars here in America with non-union labor. The UAW said maybe they could do that in 2011 when they renew their contracts, but not in 2009 which is what Republicans insisted. Republicans wanted it right now because right now is when the UAW would be desperate. Things could be better in 2011. Things are looking really bad right now so right now is when Republicans insist on concessions.
Who knows where this will all end up. Maybe the Big 3 will fail, maybe they won't. But this thing has been coming for a very long time. The Big 3 automakers have been supporting Republicans for a long time trying to get the government to free them from the unions. If they now fail, it'll be because these corporate giants succeeded in their anti-union idealism, their Atlas Shrugged righteousness.
But aside from the political aspects of this, I am undecided about what is best here. I am not at all convinced that the Big 3 are America's savior when it comes to making our automobiles. They really do seem to be our worst enemy and they have been that for a very long time. It was the Big 3 that was unprepared for the gas shortages in the 70s. It was the Big 3 that was unprepared for Japanese and European quality. And it was the Big 3 that pioneered and championed the gas-guzzling SUV industry. Now it is the Big 3 that is unprepared for high energy prices and global warming. And it is the Big 3 that need taxpayer money now for their survival, or so it is claimed.
Will American workers no longer make automobiles if the Big 3 go down? Or is this what it appears to be, union busting? If the UAW collapses as the Republicans want it to, will other brand-named cars come along? Will we finally be allowed to build, own, and drive lightweight fuel-efficient cars?
I don't have a lot of sympathy for the UAW either. Union labor tends to drive up the price of goods for everybody, not just for high income consumers. Union contracts certainly fueled the inflation of the 70s and early 80s until Reagan lowered trade barriers and allowed direct low-wage foreign competition. We all have saved tons and tons of money by buying non-union products.
But this long economic struggle to overcome inflation by fighting the unions with low-cost foreign labor, free trade, and outsourcing is a slippery slope, a slope that increases in severity with every year that goes by. American factory towns have all suffered from America's post-industrial economy. Atlas Shrugged economics has a downside. What one hand giveth - low cost products - the other hand taketh away - fewer good-paying jobs. Everyone always says get an education. That'll get you good paying work. But even that is now on a down-slope. We think we can become masters of the service industry, be the engineers and the managers and the money counters while the third world does all our labor for low wages. But the balance of trade deficit is teaching us a powerful lesson in why that can't happen and the boondoggle in the Middle East is threatening to bankrupt the entire European master race. Do Republicans really believe that there is some way to maintain stability in America when millions of illegal immigrants flood out the American job market with a virtual underground labor economy?
Despite all this, Republicans are in their element in the US Senate filibustering America's pathway deeper into this economic mess so they can be the deliverers when America becomes desperate enough to just hand the whole thing over to them. Ayne Rand had that part right. John Galt's day is yet to come. John Galt, by the way, epitomized the concept of a secret conservative conspiracy working actively to bring America's economy to its knees so the superior conservative theology could take over. Anyone who believes no such conspiracy exists hasn't read the book.
But John Galt wasn't your typical American conservative. John Galt was intelligent and honest. We have a very long way to go before America can trust her future to the Republican Party. Meanwhile here we are cleaning the socialist influence out of corporate America. Things just might get a whole lot worse before they can even think of getting better. I wonder if Obama read Atlas Shrugged. Maybe the time has come for me to read it again.

Saturday, December 06, 2008

Taboo Marketing

I just did a Google search on the title of my post here, "taboo marketing," and came up just about empty. There is the adult taboomarket.com site but that's only a small fraction of what I am thinking about with my use of this term. And since I've never thought of this term before waking up from an unusual dream this morning, I feel it fair to warn you that this post comes entirely under the classification of speculation. In fact, "Speculation" could easily have been its title. What I'm thinking about is the way taboo thinking affects market prices and market speculation.
My dream was this convoluted thing about me being involved somehow in an alternative solution to illegal drug distribution where small private agencies worked as co-ops to provide a limited and controlled low-cost supply of drugs that are otherwise scarce, illegal, and expensive. The whole point of making drugs illegal is supposed to be to limit their supply, but the reality is that the supply is relatively unlimited even with the laws making the drugs taboo. The taboo instead makes the drugs expensive.
The same thing holds true in sex marketing. Marketing of sex is taboo and that taboo, rather than limiting the supply of pay-for-sex services, instead drives up the cost of those services. We all know this.
Now it just so happens that a good many of the traders on Wall Street and in many other markets around the country and the world know this too. They know it because so many of them have first-hand experience with paying for drugs and sex. They understand how the price of a product can be forced up, way up, by somehow branding the product as bad.
Take for instance energy.
Cars and trucks that get poor fuel economy are the money-makers in Detroit. America's "big three" automakers are on the brink of bankruptcy because American consumers stopped buying these high profit margin gas guzzlers, not because we didn't want them anymore, but because we couldn't afford the gas anymore. But another factor crept into our thinking while we weren't looking. We became aware of and concerned about global warming, about how wasteful uses of earth's oil resources were raising the CO2 levels in the atmosphere and endangering our way of living here on earth. Suddenly, pleasure driving and recreational use of petroleum became taboo.
Recently I have been trying to imagine what it would be like if energy were both inexpensive and clean, if technologies were developed that made it efficient and non-polluting to convert renewable energy resources generated by the sun into useful low-cost energy sources for our homes, businesses, and transportation. What would it mean to us if all of a sudden it was no longer a bad thing to use energy? It dawned on me that some people already live in a mindset where there is nothing wrong with consuming petroleum energy products. These are the people who live in denial of human causes of global climate change. Their numbers are dwindling, but they are still out there on the roads by the millions.
But what would it mean to the rest of us if energy were both cheap and clean?
What would be the effect on our thinking if energy were no longer taboo?
Well BAM! already. When I began thinking about that, I realized that the badness of energy wasn't about waste. It wouldn't be "bad" to "waste" energy if energy were cheap, abundant, and clean. And since it is a good thing for energy to be cheap and abundant - few of us would seriously argue with that - then the problem is that energy isn't clean. The reason why it is "bad" to "waste" energy is because it pollutes, it makes our world a worse place to live. It makes us unhealthy and it is threatening the stability of earth's climate.
Yet only recently have we begun to think this way. By "we" I mean the majority of American and world energy consumers.
The result of us thinking this new way, that energy consumption itself is a bad thing, is that energy consumption has taken on an aura of being taboo. Consumption of gasoline especially has taken on the same sort of aura as smoking pot or buying sex. It is "bad" for us.
So as a result, we are willing to pay more for it.
Why? Because when we feel that we are buying something that is bad for us, something that is taboo, we understand that this commodity should be scarce. The theory of supply and demand insists that when there is normal demand for something that is in low supply, the price should go up. And when there is high demand for such a commodity, the price should shoot through the roof! So because we feel that we are purchasing something that is taboo, we know we should have to pay a lot for it. It's just wrong for it to be otherwise.
That is what I mean by taboo marketing. You see, the people who market these taboo products stand to make huge profits as long as the public accepts the taboo. As long as we insist that mind-altering drugs are "bad" for us, people who sell them will make huge profits. As long as we insist that sex is something to be shared freely only within marriage and is taboo otherwise, people who market sex will continue to make huge profits. And as long as we know that energy consumption is bad for the planet, people who market energy will continue to make huge profits.
Granted there is volatility in the oil market. There is volatility in any hugely profitable market. But the key to driving up profits is to promote the perception that it is wrong to purchase the product.
Taboo marketing in a nutshell.