Wall Street Bonuses

President Obama is apparently disgusted with the fact that Wall Street executives continued to take in large bonuses this year despite the deteriorating economic conditions and banking problems. The White House blog has the details here.

Obama said,

... Wall Street bankers had given themselves $20 billion worth of bonuses -- the same amount of bonuses as they gave themselves in 2004 -- at a time when most of these institutions were teetering on collapse and they are asking for taxpayers to help sustain them, and when taxpayers find themselves in the difficult position that if they don't provide help that the entire system could come down on top of our heads -- that is the height of irresponsibility. It is shameful.

Now, I'm fully on board with the idea that companies which receive government bailout/investment funds should limit the compensation given to executives. But, Congress failed to enact strong enough provisions in the EESA/TARP program which would give this notion any teeth. Paulson made sure of that. Obama and Geithner apparently want to change this. I personally doubt that they will follow through.

I'm curious if this concept of shameful irresponsibility extends to firms who don't have their hands out. In fact, even in good times, most companies keep their proverbial hands out... just via lobbying for protective legislation and/or corporate welfare. The general tone of the Democrats would seem to vilify such excess in good or bad times.

Do I agree? Well, sort of. But, again, this by no means should be managed via government regulation. Executive compensation is usually determined by the Board of Directors. The Board is chosen by the owners of the company. The owners are the shareholders. Do shareholders have an adequate voice in selecting the members of the Board? Yes. There are elections. While these elections may not seem fair, it is incumbent upon shareholders to use the election process to make changes if they truly want changes. Either that... or they should sell off their ownership.

I would support legislation to reform the Board selection process for publicly traded companies.

Reflections for the Republicans

Today, the House of Representatives passed H.R. 1 - The American Recovery and Reinvestment Act. Not a single Republican voted for this bill. It didn't matter. It's politics as usual.

I began trying to read the bill last night. It was 674 pages (if I recall); I copied it to Word, changed the font size and margins, and got it down to 103 pages! I got a solid ten pages or so into the bill before I gave up. I realized a couple of things... First, this hardly qualifies as stimulus. I know that's the GOP/right-wing rhetoric, but, in this case, it's true. It is a huge amount of spending - all classified as emergency to get around budget restrictions put in place by the 110th (Democrat-controlled) Congress. Second, there is no way that any Representative would have had any chance to read and understand the whole thing. Maybe I'm wrong, but I doubt it. In many cases, the bill calls for amendments to previous acts of legislation. It would take hours upon hours to actually research all of these changes to know what's going on.

But, I'm not typing tonight to talk about that. Sure, I'm disappointed that this thing passed, but that's nothing new. There's not much legislation that I'm actually for! My point here tonight is that the Republicans have made their own bed, and they have to lie in it. Unfortunately, this serves as a blow to all fiscal conservatives - including libertarian types, and, perhaps, even Blue Dog Democrats.

I'm watching the Glen Beck Show from earlier tonight (DVR'd it), and Minority Leader John Boehner (R-OH) is on trying to defend the GOP position. I just saw Mitt Romney on Neil Cavuto before I came upstairs and starting typing... why does this matter? Because these two guys both play a role in the GOP story that was today's vote. I'm going to point to three things that I think put the Republicans in the position they were today - helpless.

*****

1. The neoconservatives took control of the party and helped create the unpopular George W. Bush administration.

Bush had his ups and downs. At the end of the day, he left office as one of the least popular Presidents of all time. He put a lot of eggs in the national security basket, abandoned fiscal discipline, and compromised the GOP. By surrounding himself with the neocons, moderate "Republicans" with dreams of world domination as modern-day Wilsonian/Troskyites, Bush and his administration peddled fear and faux-patriotism to maintain support with the masses while cow towing to the so-called "religious right". By the end of his administration, it was clear that his GOP was not the GOP of small government, fiscal discipline, and protection of individual liberty.

The Democrats have pounced on his unpopularity and characterized every member of the GOP as supporters of Bush (which, 99% of the party leadership probably did), and it has helped them make their case for change.

*****

2. The GOP allowed the budget to get out of control during the last eight years culminating in the passage of the Emergency Economic Stabilization Act to bail out Wall Street banks.

This is admittedly similar to the first point, but there is an important difference. Here, I want to concentrate on the Republican controlled Congress which was in place during the first six years of the Bush administration. They were complicit every step of the way as the budget and size of government grew out of control. Some of this may have been due to neoconservatives in the party leadership within Congress, but (I haven't corroborated this with evidence) I'd have to believe that the entire rank-and-file of the GOP (with minor exceptions) followed along even when it may have been against their principles. This came to a head with the EESA/TARP program. Yes, a lot of Republicans voted against it; but, the party leadership, including Mr. Boehner, supported the legislation which would not have passed without them.

This has allowed the Democrats to justify their support for "bailout" and "stimulus" legislation since the Republicans in Congress supported similar legislation when their President was in office.

*****

3. The GOP Presidential nomination process is flawed and allowed John McCain to be served up as a sacrificial lamb while forcing rank-and-file Republicans to move to the middle.

The race for the nomination of the Republican Party was wide open in 2007 and early 2008. Rudy Guiliani and Mitt Romney seemed to be front-runners; Mike Huckabee came out of nowhere to be a true contender; and John McCain hung around gaining momentum with a win in New Hampshire. Let's look at this a little more closely...

John McCain finished fourth in Iowa. He won New Hampshire in an open primary where independents were a large proportion of voters. McCain's next big win was a 3% point margin of victory over Mike Huckabee in South Carolina. Romney was still the leader in delegates at this point. Then came the winner-take-all primary in Florida. McCain received Governor Charlie Crist's endorsement and beat Romney 36% to 31%. I hardly see this as a mandate, yet McCain took 57 delegates giving him the new lead (which drives a lot of perception in the media) going into Super Tuesday.

On Super Tuesday, McCain wrapped it up by winning nine of twenty-one states. He captured 42% of the popular vote with Romney taking 34% and Huckabee 20%. But, McCain was awarded 602 delegates with Romney taking only 201 and Huckabee 152. Why did McCain get so many delegates? He won Arizona (his home state) with 48% of the vote for 50 delegates, California with 149 delegates, Illinois with 55 delegates, New Jersey with 52 delegates, and New York with 101 delegates. California, Illinois, New Jersey and New York... these are four Democrat strongholds which the GOP had little chance of winning. These wins effectively wrapped up the nomination for McCain. It was a good campaign strategy for him, but I question the effectiveness of the GOP's process.

So, there's a trip down memory lane. With the moderate "maverick" as the nominee, the GOP had to get behind him - after all, almost no one has the guts to do anything but back an R or a D. Even as his popularity waned, the far right still stuck behind him and half-supported him and his support of the EESA/TARP.

This further backed the GOP into their current corner.

*****

I have no sympathy for the Republicans... You can't decide that you actually stand for something when you haven't stood for it for eight years. When you insist on always playing political games, you are bound to lose some of the time.

Smile! You're on Candid Camera!! Or Not...

I've got other stuff to do tonight still but I wanted to make a quick post, as part of my continued effort to be more productive in my writing. With what seems like near exclusive coverage of the stimulus plan "reform" in the past few weeks, it's rather easy to forget that the Congress is actually doing other things. I discovered one of these today when I stumbled upon a brief article mentioning H.R. 414, which is sponsored by Rep. Peter King, R-NY, and was introduced in the House on January 9th. The bill's official short title pretty much says it all--the "Camera Phone Predator Alert Act." Yep, with everything important (I suppose "important" is rather subjective, but I can't imagine anyone honestly believing that there aren't legitimately urgent issues facing this country today) Mr. King is introducing legislation that would require cell phones with cameras to be manufactured so that anytime a picture was taken with it, the phone would make a "tone or other audible sound within a reasonable radius." Supposedly, this will curb the "exploitation" of adults and children who have been victimized by having their photo taken while in a dressing room, etc. by some pervert with a camera phone.

Just for fun, here are a few other vital pieces of legislation that have recently been introduced--enjoy!

H.R. 680 introduced by Rep. Ted Poe, R-TX -- "To require that the aircraft used as Air Force One by the President be an aircraft that is made in America by an American-owned company."

H. Res. 89 introduced by Rep. Joe Baca, D-CA -- "Supporting and encouraging greater support for Veterans Day each year."

H.Res. 86 introduced by Rep. Bob Filner, D-CA -- "Expressing support for the designation of Four Immortal Chaplains Day in remembrance of the 4 men who paid the ultimate sacrifice in the name of compassion for those of different races and faiths."

H.R. 698 also introduced by Rep. Bob Filner, D-CA -- "For the relief of Shigeru Yamada."

S. 319 introduced by Sen. Jeff Bingaman, D-NM -- "A bill to amend the Public Health Service Act to provide grants to promote positive health behaviors in women and children."

The Yuan and the Dollar

Quick post on Obama, Geithner, the Yuan and the Dollar over at United Liberty...

Enjoy.

In the Meantime...

I've really been meaning to sit down and take the time to write the second part to my bit on environmentalism and biodiversity, but I have not had an opportunity to give it the uninterrupted attention it deserves. So...it will have to wait for another day, in part because I am admittedly too obsessive and strict with myself in my writing habits--some topics I feel like I can't adequately post on unless I spend a good deal of time on the writing and research. I often wish that I could be a little less picky with writing, I mean I'm not writing some great piece of literature after all. Oh well...I'll quit rambling now.

There are too many things that come to mind immediately tonight so in the interest of just posting something, I wanted to make a brief comment about the now-confirmed Secretary of the Treasury, Timothy Geithner. I already have many problems with Mr. Geithner, not the least of which are his IRS issues that have been in the spotlight the past few weeks, but even before today's confirmation I had resigned myself to the fact that his confirmation was inevitable. I've taken lately to streaming one of the C-SPAN video feeds on my office computer so I can listen to hearings and floor debates while I'm working (yes, I am a big geek) and today while sorting through graduate student applications I happened to catch part of the live Senate floor speeches that took place before the official confirmation vote for Geithner. I was particularly intrigued by one rather insignificant statement of fact by Senator Jim Bunning, R-KY, in his speech declaring his opposition to Geithner's confirmation.

In the past few weeks, I've become quite familiar with Geithner's IRS issues stemming from his "honest mistake" in neglecting to pay self-employment tax for several years while he was employed by the IMF. Without re-hashing all of the reasons, suffice to say that given the information I'm aware of so far, I just don't believe Geithner in his claim that this was an innocent omission. I believe there was something shady, at the very least, going on and frankly don't believe that an individual who cheats on his taxes has any business serving as the ultimate "head" of the department of which the IRS is a part. Anyway, eventually (for whatever reason) Geithner paid off what he owed on his tax bill and the Democrats were willing to ignore this minor omission. That was at least something, and I admit that I still felt like there was a slim, slim, slim chance that Geithner actually was telling the truth about this whole thing and then paid what he owed, just as any of the rest of us would have to do in the same situation.

This was before today, when I learned from Senator Bunning that the IRS had waived all penalties associated with Geithner's unpaid taxes. This had certainly been disclosed before today but somehow I had never heard this piece of information. I'm admittedly not familiar with the particulars of the penalties the IRS imposes on those who don't pay what they owe in a timely fashion, but I know there are penalties and that these penalties can be significant. I'm about 99% certain that if I had neglected to pay my $300,000+ tax bill over a period of 4+ years, there's no way in hell that the IRS would simply "waive" the penalties I would owe. I'd be interested if someone could actually enlighten me as to what his tax penalties would have amounted to, out of curiosity.

I can't say that I'm surprised that the IRS would do this, but if Geithner was as "innocent" (in the sense of truly making an "honest mistake") as he has been claiming I think this last piece completely erases any part of me that thought he might be telling the truth about the situation. If he truly believed that he owed the back taxes to the IRS, then he should have also been prepared to pay the penalties for late payment just as the rest of us regular citizens would be required to do. Instead, he accepted special treatment in getting his penalties waived and showed that he seems to feel that tax penalties are unnecessary. Unless he plans to turn this into the elimination of such tax penalties for everyone else, it's just more business as usual.

Ugh...

Loose Ends... Vol. XXVII

A few items to discuss to wrap up the week.

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First, I want to give a thumbs-up to President Obama for his two Executive Orders on January 21 - one on transparency in Presidential records and the other on ethics in the Executive Branch. I frankly haven't researched the constitutionality of such moves, but I do support them on the surface.

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I do want to give a thumbs-down to Congress and, in particular, my representative, Dan Burton (R-IN). I'm doing my best to follow Mr. Burton and give him the benefit of the doubt despite my reservations (I did vote for him). This week in his blog, he indicated his support for a resolution which honors Tony Dungy. This is a waste of taxpayer dollars. I don't know Tony Dungy personally - every indication is that he is a good man. But, it is a waste of time and money to draft such legislation. It's kind of like recognizing sugar cream pie.

*****

The economic stimulus which is intended to be provided via the American Recovery and Reinvestment Act is a hot topic. I've been trying to follow it closely, but time has been my enemy. I did catch some of the subcommittee hearings on C-SPAN. This is good stuff as they get into the detail more than they do on the House floor. The action in the Appropriations Committee and the Ways and Means Committee was solid.

One thing I've noticed in the last week or so is referencing Mark Zandi (of Moody's Economy) as a conservative economist. Mr. Zandi was apparently an economic adviser to the McCain campaign. This frankly does not qualify him as "conservative" - in fact, I'm not sure what a "conservative" economist really is... I thought that big government deficit-spending was the antithesis of "conservative" economics. By the way, Zandi is on the stimulus boat.

*****

My fellow blogger at "My Simple Life" pointed me to a request from Sen. Charles Grassley (R-IA) to Microsoft regarding his thoughts on how they should run their business. Sen. Grassley is urging Microsoft, who announced that they will be cutting up to 5,000 jobs, to preserve jobs for Americans over foreigners who are working here with a visa on the basis of morality.

I'm sorry. This is disgusting and the type of garbage that has helped put our economy where it is today. The U.S. economy is at its best when it employs the best talent for the job at the right price. Every time that the government meddles in this, it will inevitably lead to a deterioration of our overall economic condition. We should be careful what we wish for.

*****

Two last articles for you to read at your pleasure on the economic crisis. Economist Nouriel Roubini is now predicting that the losses in the U.S. financial system may reach $3.6T which would leave the banking system effectively insolvent. Speaking of insolvent banks, it is being reported that the U.K. banking system was facing a collapse on October 10 before deals were reached in secret to prevent the meltdown.

The Credit Crisis: Fed Funds Rate

Several weeks ago, we took a look at LIBOR to help explain and understand the credit crisis. Today, we'll (finally) take a look at the Fed Funds rate - another very important component of our financial system.

The Federal Reserve System (the Fed) was chartered via the Federal Reserve Act of 1913. The purpose of this article is not to discuss the history of the U.S. banking system or argue the pros and cons of the Fed, so I'll spare you those details and opinions today. The Fed is technically a private bank and serves as a bank for banks and for the U.S. government. However, they do play a significant quasi-government role by fulfilling their stated mission of providing a "safer, more flexible, and more stable monetary and financial system."

To fulfill their role, they participate in the financial markets by regulating banks, managing the money supply, and influencing interest rates. Much of this participation is conducted by so-called "open market operations" where they trade directly with twenty-two "primary dealers" via the New York Fed (there are twelve Fed banks, but the NY branch has the special authority to conduct open market operations). These operations are intended to drive the interbank lending market toward a targeted interest rate known as the Fed funds rate.

Here's how it works. Let's recall previous examples where we have discussed reserve requirements. It is actually the Fed who set reserve requirements in the U.S., and banks keep most of their reserves on deposit with the Fed (remember, they are a bank for banks). So, let's say we have Bank A, Bank B, Bank C and Bank D, and let's say that they each have $100M of deposits from their customers so they need to keep $10M on reserve with the Fed. In the previous article on LIBOR, we learned how day-to-day bank operations may leave a bank in a position with either excess or insufficient reserves. If Bank A and Bank B are left with $8M and $9M respectively, while Bank C and Bank D have $11M and $12M respectively, the market will have the potential to regain equilibrium with inter-bank loans. Remember, loans are not free; Banks C and D will charge interest.

The Fed funds rate is actually just a target interest rate set by policy makers of the Fed (the Federal Open Market Committee). If the Fed funds rate is, say 3%, then the Fed will monitor interbank loan activity conducted between member banks (not just the primary dealers) and take action if the lending rates deviate from 3%. So, in our example, if the loans above between the four banks clear with overnight lending rates of 3.1%, then the Fed will take action to drive interest rates down 10 basis points. How do they do this? They perform open market operations.

If the interbank lending interest rates for loans conducted by banks with the Fed are too high (called the effective Fed funds rate), that means that there is relatively too much demand for money relative to supply. The Fed will counter this by increasing the money supply. In open market operations with their primary dealers, the Fed will purchase U.S. Treasuries (generally) from primary dealers and credit their accounts with new cash reserves. This action will increase the supply of money as it will increase the reserves of the primary dealer in the transaction which either decreases their demand for a loan or increases their ability to make a loan on their excess reserves. This drives down interest rates. It should be noted that this leaves the Fed with a significant balance of U.S. Treasuries - more than anyone else in the world.

Ok. So, let's take a look at the history of the Fed funds rate. The graph below shows both the target and effective rates since 1983.

Data from St. Louis Fed via FRED(R).

As you can see the two rates follow each other very closely. There have only been a few rare circumstances where the two rates have deviated significantly. Most graphs that I have seen with the Fed funds rate show the target rate. To me, it makes more sense to show the effective rate since this is the actual rate which clears in the marketplace of interbank lending. The target rate is important to understand from a public policy direction and certainly drives the market.

This next graph shows the 30-day moving average of the spread between the effective and target funds rates along with (in red) the times in which the Fed has announced a change in the target rate. (The position of the red dot indicates the direction and magnitude of the change.)


There are a few important things to take away from this graph. First, note the series of "negative red dots" between the beginning of 2001 and mid-2003. The Fed drove rates down from 6.5% to 1% over a thirty month period. This was followed by a steady increase in rates from mid-2004 until mid-2006 where rates went from 1% to 5.25%. We are now in another period of rate reduction, but this time there is something different. Since September of 2008, the beginning of the most severe period of the credit crisis, the effective Fed funds rate has deviated from the Fed funds target rate at an unprecedented level (at least since 1983 where my data set begins).

I would argue that the Fed's policy shift to reduce the target rate to a range of 0-0.25% was fairly easy to predict. The exact action was not necessarily easy (they've never used a range before), but the direction was obvious. The effective rate was far below the target every day between October 10 (just three days after a rate cut from 2% to 1.5%) and December 15. Since the rate cut on December 16, the effective rate has remained within its target and average 0.13%.

In our next article in this series, we'll look at rates on U.S. Treasuries.

Seriously!?

Sorry Nicole, I know that this is normally your area of expertise, but seriously?
http://www.indystar.com/article/20090122/NEWS05/90122057
Do we have an official state appetizer?
I can only hope that this becomes law.

The Inauguration

Those of you who have been to this site in the past know that I did not vote for Obama. Nonetheless, I recognize and appreciate the significance of yesterday as a sign of both progress and tradition. I extend my sincere congratulations and best wishes to our new President and his administration.

Some brief comments and observations from his speech...

What I liked:

Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time. But know this America: They will be met.

What I didn't like:

The question we ask today is not whether our government is too big or too small, but whether it works...

Mr. Obama made it clear that we are in rough times. I think that is fair. He indicated that there will be sacrifices. I think that is also true and that we are not collectively prepared. But, he also made it clear that government can (in his opinion) and will (by his direction) be a large part of the solution to the rough times.

This door has been open for quite some time - longer than the door of opportunity for all... Obama has marched through each door in a triumphant manner and has a world of support. I am proud to be part of an America which has allowed him to break through that door of our past racial history; I'm not so excited about the way in which America will plunge deeper into big government policy.

The implicit assumption in "efficient government" is that other people know better than you - that a small group of people can be more effective than all of us working together.

MLK

I'd like to recommend readers to visit JoshTinley.com and read his post regarding Martin Luther King, Jr. I share many of his sentiments on Dr. King. I have mixed feelings on King's remembrance as there is something to be said for his "dangerous" and anti-establishment positions. He has been deified and sanitized - in some ways used - to be made as an example of a peaceful, almost docile, revolutionary.

I don't agree with all of King's views on society, but he was an important man in our history. Many fought alongside him, but he will always be remembered as the man who paved the way for tomorrow's events in Washington.

This morning, on Abdul in the Morning, the host (Abdul) asked his panel whether or not racism will continue to matter in the future or if we have moved past it as a nation. It is important to me to distinguish between race and culture. Culture does matter, and it should matter. One of the great things about this country is that we do embrace (for the most part) different cultures. That will cause conflict. That will not change. So, will race matter? I hope it matters only to the extent that culture is necessarily associated to race - and, most importantly, that it does not deprive individuals of their natural rights to life, liberty and property.

Kids--You Can Save the World by Unplugging Your Cell Phone Charger!!

I had intended to write Part 2 of my Biodiversity "rant" today since I was technically off work, but I still had several work things I really needed to do while at the same time keeping my eye on my 1-year old. Sooo...I didn't really have sufficient time to organize my thoughts and write Part 2, so I'm hoping to be able to work on it tomorrow. I'm sure you're all waiting with bated breath...

So, in the meantime, I wanted to post something short about a website that I have been seeing many TV commercials for lately and have wanted to check out, but kept forgetting. You may have seen one of these commercials--a teenage girl in her bedroom being asked by another teen who appears to be "interviewing" her if she knows that her cell phone charger still uses power even when the phone is connected to it. She claims "I don't have a cell phone" while at the same time you hear what is obviously a cell phone music ringtone; the girl looks around awkwardly and eventually grabs the phone from her pocket and throws it against the wall. You then learn that the commercial is for a government website--http://www.loseyourexcuse.gov.

While it no longer surprises me that the government maintains so many ridiculous websites and wastes money on them, this one seemed to me particularly stupid. From the commercial, obviously it appeared to be a government-created website intended to teach kids and young adults about energy conservation...yikes. While it pains me as someone deeply concerned about environmental issues to say this but EVERYONE in this country is incessantly bombarded with truly disingenuous "save-the-earth" propaganda from multiple sources and this certainly includes school age children (indeed, I have a sneaking suspicion that they might be even more versed in this type of rhetoric). I can't imagine that there are many children in this silly commercial's target audience that haven't already been imprinted with all of the common, largely ceremonial ways to save energy/save the planet/make yourself feel good for being "environmentall conscientious." You know what I'm talking about--turn off the water when you brush your teeth, turn off lights when you aren't in the room, use halogen light bulbs, etc. I would say that it is simply beyond me as to why the government would feel that it's necessary or even effective to spend money on more such propaganda...but nothing the government does surprises me anymore.

I won't give away too much about the site with the hopes that you'll visit yourself. I will say that at first I was a bit confused as to how I managed to mistakenly navigate myself to the Cartoon Network website, until I realized that the weird looking blob in the grass was trying to help me in saving the planet (no, seriously). It does have several sections you can visit but the main message of the website consists of 10 "simple" things that kids can do to save energy...turn off the lights, turn off your computer, unplug your cell phone charger...blah, blah, blah. Most of the website's content seem to consist of eye-catching, fun fluff that, admittedly, is probably quite appealing to a kid but likely doesn't have much of an impact in terms of its message. You can create artwork, or some silly energy-saver badges, download a desktop wallpaper, etc. It's actually a rather neat-looking website but it's just another example of how the government flushes our money down the toilet on silly, completely superficial (it's "cool" to save energy!!) dreck, likely with a good amount of nudging from some particular lobby.

So, I encourage you to visit the site and look around, if for nothing more than amusement...I particularly recommend visiting the "Play" section and giving the "Energy Rescue" game a try. And watch out for those pesky evil cell phones on Level 4.

Loose Ends... Vol. XXVI

We are trying out some new looks for the website, so bear with us over the coming days and/or weeks. Your feedback and ideas are welcome. You can see that we've switched templates, but this will not be the final look. Also, soon we will be available at www.stoptakingsoma.com in addition to our current Blogspot address.

*****

The Congress is back in session (they were the previous week too, but... hey...) and there has already been a good deal of activity. Hundreds of bill have been introduced in each chamber. Most of the talk surrounds the release of the second half of the TARP under last session's legislation and the next economic stimulus package also known as the American Recovery and Reinvestment Act.

A summary of the House version is available here. The full text is here. This coming week will see debate and a possible vote. Additionally, an analysis conducted by Obama's team of the package (their version) is here. My analysis (or something of the sort) will be coming this week.

The House also did not waste time to express its support for Israel and condemn of Hamas. The Resolution can be found here. Ron Paul (R-TX) was the only House Republican to vote against the resolution.

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One thing of note, from a true "stop taking soma" perspective, is the propaganda that continues from the government-media complex as it pertains to the current economic climate. I don't recall if I have posted this report from the Minneapolis FED yet or not - regardless, it is a must read. We constantly hear that we are in the worst economic crisis since the Great Depression... is that really true?

I'm the first to admit that we are in bad shape - but, we are not in bad shape in the manner in which most people describe the state of the economy. Unemployment is growing quickly (currently 7.2%), but it is still below levels in 1992 (peaked at 7.8%), 1982 (peaked at 10.8%), and 1975 (peaked at 9.0%). We have also yet to see a prolonged decrease in real GDP - we did experience this in 1991, 1982, 1980, 1974-1975, 1958, 1954, 1949, and 1945-1947. This is all since the Great Depression.

Now, don't get me wrong. I believe that things will get worse. But, it will be a result of a different economic crisis than the one we are currently experiencing. It will be the result of decades-long policy of over-spending by both government and consumer. It very well may be worse than the Great Depression, but we are not yet in this particular financial crisis.

The current rhetoric is only being used as a way to scare you and me into thinking that the government is the only solution. They want a free pass for big spending. They are going to get it too. We need to stand up.

*****

I don't remember hearing about this on Friday, but the Treasury agreed to another $1.5B loan to Chrysler financial. The terms call for an interest rate of one-month LIBOR plus 100 basis points in the first year (+150 basis points in years two through five). So, Chrysler, a near bankrupt company, is receiving a huge loan that has a five-year maturity with interest payments (currently) at a mere 1.4%!!!

*****

Mitch Daniels delivered his State of the State address this week. I regret to say that I did not watch or listen. This is still important, so I hope I get around to reading the transcript - it is available here.

*****

Last items... also on the local scene. I found this website this week maintained by the Libertarian Party of Indiana. The site follows legislation in Indiana and states the view of the state LP. Pretty cool.

State Senator Greg Walker has introduced a bill for a competing gold currency in Indiana. I will be writing my representative expressing strong support (after I read the whole thing thoroughly). I highlighted this over at United Liberty.

Also, I heard this week that Indiana will be considering a daytime curfew for minors while school is in session. Local media personality and lawyer, Abdul Hakim-Shabazz, said that he would be addressing his support for this measure on his blog. I'll wait to see what he writes and provide my rebuttal at that point.

Silly rabbits! Part 1

I suppose this is a different topic than what we've typically discussed on this blog, but ecology (particularly biodiversity and invasive species) has always been a particular interest of mine and I couldn't resist passing it along after having my mind sparked by an interesting article.

Earlier this week, the results of an ecological study conducted on Australia's Macquarie Island by the Australian Antarctic Division were published in the Journal of Applied Ecology. The study, conducted on the island between 2000 and 2007, examined the progress and results of an effort first undertaken in 1985 by Tasmania's Parks and Wildlife Service to eradicate the island's population of feral cats, which were decimating the native seabird colonies on the island. Macquarie Island was discovered in 1810 by a British explorer, Frederick Hasselborough, while he was searching the Tasman Sea for new areas to hunt seals; he claimed the island for Britain and subsequently became an official part of the Australian state of Tasmania in 1901 when the Commonwealth of Australia was formed. Since that time it has more or less served as a "home base" for various Australian scientific agencies and was declared a wildlife sanctuary in 1933. After the island's discovery in 1810, it was colonized, though sparsely, by European seal and penguin hunters who accidentally brought mice and rats to the island hidden on their ships. Without natural predators on the island, the rodent population exploded and became a nuisance to the settlers by getting into their food stores; in response, the settlers released cats on the island to control the rodent population. Around the same time, the settlers also released rabbits into the wild on the island in order to have them breed and then be hunted for food. By the 1970s, the rabbit population had grown to over 130,000 and was destroying the island's native vegetation. The cats, which are now feral, have devastated the native seabird
population by killing an estimated 60,000 birds each year.

As any environmental activist could surely guess, this annihilation of the native bird population on Macquarie Island could not be allowed to continue and the Australian government (through the agency of the Tasmania Parks and Wildlife Service) stepped in with several invasive species control measures--the myxomatosis virus was introduced to kill the rabbits, which seemed at first to succeed in reducing the population to 10,000, and a massive effort was started in 1985 to rid the island of all the cats. Apparently, they had actually managed to remove all of the cats from the island by June of 2000 but, alas, the happy ending they were hoping for did not come. Instead, with the predator (cat) population gone, the rats began to multiply once again and continued the destruction of the bird colonies because rats eat young birds. Also, without the cats there to prey upon them as well, the rabbit population ballooned back up to 100,000 and are destroying the vegetation on the island causing soil erosion and landslides which have led to significant destruction of cliff nesting sites.

The Parks and Wildlife Service now estimates that it will take 24 million Australian dollars ($16.2 USD) to "fix" the erosion damage that has been caused by the unchecked rabbit population. But what does this mean "fix?" From as best I can tell, "fix" means to somehow restore the island to its' pre-discovery state and thus saving the seabirds from extinction. The problem is that this can never realistically happen; once these non-native animals (and likely non-native plants as well) were introduced onto the island, the ecosystem was permanently altered and it simply can't be restored to its original state. That's just not how nature works.

So, why does this matter? Because this is just one example of the thousands of similar initiatives that have spent billions of dollars to undertake such ecological control programs and have ended up not only unsuccessful in their original goals, but often have created problems that didn't exist previously. I sincerely feel that these failures result from a fundamental ignorance of the concept and effects of "Biodiversity," which was popularized by the brilliant biologist E.O. Wilson in 1986. Without a much greater understanding of Biodiversity and how this relates to the delicate and intricate nature of ecosystems, such projects will continue to be doomed. This is becoming increasingly important as the environmentalist lobby and environmentalist groups become more and more influential and will surely push for more such "ecosystem recovery" projects in the years to come. I would consider myself an Environmentalist and don't wish to see the government throw away billions of dollars on projects that are so ill-conceived and narrow-minded that they are doomed to fail. If we really want to help heal the damage we've done to our environment and the millions of plant and animal species that live here with us, we need to gain a much better understanding of ecosystems and the basic workings of "nature" itself. It's this that I want to focus on now, but I didn't want to write a novel here so I've decided to split this into two parts. Part 2 is still to come...

More on Israel

By the way... I wrote this article earlier this week for United Liberty.

Look. Some of Israel's acts are deplorable (the same goes for Hamas). But, I do not believe in global government. Israel has the right to act in its perceived national interest: right or wrong... they need to then face the consequences of their actions.

We need to stay out of it.

S&P Market Forecast

I've been itching to provide my outlook for the markets for a few weeks now. I didn't get the time to be as robust as I wanted (yes, I'm still working on the rest of the credit crisis posts), but I did want to get something out there in advance of the markets taking shape in 2009.

This analysis is admittedly a bit "back of the envelope", but it's where my brain has taken me. This will look at a target for the S&P 500 - one of the most widely used stock indices. Earnings season, where public companies have to report their performance to the public and provide an outlook on the future, is beginning. This is where the action will begin in my opinion.

The table below shows the historical values of the S&P 500 Index, the collective earnings of the index (using operating earnings per share), and the implied price-to-earnings (P/E) ratio.

Data from Standard & Poors website - direct link here.

As you can see, the market has been on a wild ride up since 1988. Earnings for 2008 are still a forecast, but are currently expected to come in at 65.79 - a 20% decline from 2007. A collection of forecasts from companies in the S&P 500 places the current forecast for 2009 earnings at 81.80. I believe this is far too optimistic. Also, notice the historical P/E ratios. They peaked in the late 90's during the tech boom. When that bubble burst, earnings and P/E ratios collapsed. The implied P/E for 2008 is at its lowest since 1988 when the market was recovering from the 1987 collapse. The P/E ratio roughly indicates how much investors are willing to value future earnings (with appropriate assessment of risk and the value of money based on inflation).

This next table is self-created. It shows an implied revenue value for the S&P 500 based on various assumptions of their combined operating margin. I could not find reliable data on what this value actually should be, but I think a range of 10%-15% is reasonable. I also estimate a decrease in revenues which should be roughly commensurate with a decrease in GDP. I'm not optimistic that 2009 nominal GDP will grow over 2008. I've provided estimates for a 2% and 5% decrease. Recalculating the earnings based on no changes in cost (a pessimistic assumption) yields the below values.

I recognize that most of this is probably perceived as pessimistic at this point, but that's why I wanted to post this article now. I think the earnings season which is now underway will be filled with bad news and companies adjusting their forward outlook. Based on this, I'm projecting a range of 55-60 for S&P 500 earnings in 2009.

This last table then takes a range of earnings estimates along with P/E targets to calculate a target range for the S&P 500 Index. As you can see, my target range (in green) is wide: 550-720. These are not exact numbers, but they do reflect a range of possibilities. I think that as earnings reports and forecasts roll out, that P/E ratios will also drop on market uncertainty. The only thing holding that back at this point is the low yields on government debt which I do not believe will stay so low given the huge amount of new supply (i.e. the budget deficit) which will enter the market.

So, there you have it. We hit our most recent low on the S&P in November at around 750. I'm not sure when we'll hit the new bottom, but I don't think it will take long for us to drop below 750. It could be next week. If we don't drop below that level by Valentine's Day, then I would look towards Memorial Day to test that low. If we make it through Independence Day without dipping below 750 for a measurable period of time, then I will concede failure in my outlook. If we do stay below 750 for a few weeks anytime prior to that, then watch out! I think we'll be headed for about 600-640. This would imply the Dow Jones being around 6000 (typically, the Dow is about 10x the S&P).

(Disclaimer: I am not a financial advisor. Do not take this as professional advice. These are merely just my opinions.)

Government Without Adequate Representation

Our Constitutional Republic provides for a bicameral legislature with a lower house, the House of Representatives, where members are apportioned based on population. Well... it is supposed to be based on population.

When the House was originally set up, it had 65 members who each represented approximately 30,000 citizens. The size of the House grew with the population, but over time the proportion of citizens to representatives has risen dramatically. This is especially the case since 1910 when a law was passed to cap the number of representatives at 435. At that time there was approximately one representative per 200,000 citizens. It was about 645,000:1 based on the 2000 census, but will probably be more than 700,000:1 after the 2010 census.

For more detailed information, check out Wikipedia and Thirty-Thousand.org.

Today, Wyoming has one representative for its population of 494k; Montana has one for its population of 902k. This is almost a two to one ratio which is seriously unfair. The only way to remedy this is by increasing the number of representatives. This will also increase our ability to make our voices heard in Washington as each representative has a smaller constituency.

I ran three quick scenarios using a simple apportionment method (divide and round to the nearest whole number). This is all using the 2000 census data.

A simplified Wyoming Rule gives one seat for every 494k (the population of Wyoming). This yields 569 seats, but still results in sever over- and under-representation. South Dakota gets two seats (377k per rep) and North Dakota gets one seat (642k per rep).

The next approach was the "1000 Seat Rule". This gives one seat per 281k. This still allows for distorted representation.

Finally, I tried the "One Rep per 100k Rule". I think that one is self-explanatory. This one under-represents North Dakota with six seats for a ratio of 107k per rep. It over-represents South Dakota with eight seats - a ratio of 94k per rep. Now, this is starting to be a little more acceptable in my opinion. This would put the House of Representatives at 2,807 seats.

I think this could also allow minor parties to have a stronger voice in Washington. It will be much more difficult for the Republicans and Democrats to maintain their duopoly when they have to fight almost 3,000 congressional battles. I'd actually endorse a more parliamentary style election - or at least a modified one - in order to better reflect representation of the public.

To get an idea of what this type of system might be like, consider these statistics about my home state of Indiana. Indiana would have 61 seats using the third approach (population 6.08M). Hamilton County, where I work, would have two or three reps. Marion County, where I live, would have eight or nine reps. In fact, my home township, Perry Township, may even get its own rep with a population of 93k.

Tax Troubles

Today, the story broke that Timothy Geithner, President-Elect Obama's nominee to head the Treasury Department, had failed to pay around $35,000 in taxes from 2001 to 2004. It seems that these unpaid taxes stemmed from his employment with the Interntional Monetary Fund (IMF) and Geithner's failure to pay the self-employment taxes associated with this position for those four years. Geithner claims this was an honest mistake, saying that he didn't realize that the self-employment taxes applied to his work for the IMF. There was also a revelation that Geithner apparently had a household employee, an immigrant, who had worked for him for three months after their work authorization had expired. Geithner claims these were honest mistakes--errors committed because he wasn't aware of the relevant tax law and, in the case of the expired work authorization, admittedly poor record-keeping on his part. The Vice-President of tax of the American Institute of Certified Public Accountants has said that Geithner's error on the self-employment tax issue would actually be a "difficult" one to commit, despite official statements from the White House claiming that it was a common mistake. In any case, this is unlikely to have much of an effect on Geithner's confirmation (Senate Majority Leader Harry Reid has called the issues "a few little hiccups" and says he is "not concerned at all"), particularly since Geithner has apparently paid his bill.

While I suppose I can buy the whole "honest mistake" bit, it's a little harder for me to turn a blind eye to the fact that Geithner only paid up on the majority of his IRS bill just few days before Obama announced him as the Treasury Secretary nominee. At least he paid though...and this led me to recall the numerous occasions where I have erupted at the television upon the airing of those "settle-your-IRS-tax-bill-for-pennies-on-the-dollar" commercials. While I do have significant issues with the monstrosity that that is the current U.S. tax code, I can't help but wonder how in the heck an average, "Main Street" citizen can get into $25,000, $50,000 or even hundreds of thousands of dollars back tax debt. In the end, it is what it is and if these people truly owe the money (for whatever reason) to the IRS, THEY OWE THE MONEY TO THE IRS! This wouldn't really be that much of an issue if it weren't for the fact that such a large number of people in this situation apparently turn to these so-called tax resolution agencies that claim to be able to settle your IRS debt for a significantly reduced amount than what is actually owed. If these agencies really are able to do what they say, there is a ton of money "owed" to the government that just gets written off, so-to-speak. The IRS forgives a large portion of the debt just to get at least some part of it.

But what does this mean? It's simply not plausible that this debt isn't somehow passed on to the rest of us law-abiding, tax-paying citizens in one way or another--maybe through tax increases somewhere else, etc. The same goes for those debt consolidation agencies who negotiate settlements with credit card companies to allow someone far behind on their bill to settle for an amount significantly less than what is actually owed. This is most certainly passed on to other credit card users in the form of increased interest rates. While I do, of course, feel sorry for people who are in such deep debt that they are in danger of going to jail or losing their homes, this really is unfair to the rest of us who "live by the rules." I could live with this, since there are many things in life that aren't fair, if it weren't for the infuriating nature of the advertisements these settlement negotiators produce (on TV, on the radio and on their websites). Every customer testimonial presented in these advertisements (I'm sure they are actors, but supposedly represent actual customers) features a couple or individual jubilantly announcing how, through the "magic" of whatever agency, they have managed to "erase" their debts and are now living happily ever after, free of that pesky notion of "responsibility" for your own behavior. The Debt-Relief Fairy has waved her magic wand and made everything better. Here are a few quotes from "satisfied" customers of one such agency, Freedom Tax Relief, that are quite illustrative--

"I didn't sleep for months due to my debt. Now I know you are dealing with them, and I no longer worry."

"I thought it was too good to be true, but now you've saved me over $14,000 in only one month!"

I'm sorry but if you have managed to get yourself into such a dire situation that the services of these agencies are your ONLY OPTION for recourse (apart from going to jail, I suppose), they should not be allowed to advertise with glowing, smiley testimonials of customers who are now carefree because their tens of thousands of dollars of debt are now gone. The blatantly flippant attitude towards personal responsibility that this puts forward is quite distressing; frankly, I think that they should be making you to feel quite embarrassed and ashamed that you are now forced into essentially shifting the consequences of your poor choices onto the rest of us, or else be imprisoned. Just one more example of the attitude of "entitlement" among U.S. citizens that I feel is increasing at an alarming rate...there's only so long this can go on before those of us who feel more compelled by the notion of personal responsibility simply refuse to keep paying for the mistakes of those who don't. I can only hope it's sooner than later.

Loose Ends... Vol. XXV

Ugh. I know that there were four or five things (at least) this week that came up that I wanted to address in the blog throughout the week... or at least here in the weekly wrap-up. But, alas, I have forgotten much of this - well, at least right now as I type late tonight. I need to improve on this!

*****

Earlier this week, economist Paul Krugman referenced Okun's Law in his blog on the New York Times website.

I studied mathematics in college. I have a Master's Degree. I was originally drawn to math because I liked numbers and was good at it. As my studies advanced, I found that the purity of math was most appealing. Mathematical theories are developed using logic and a set of basic building blocks. I used to joke with friends that the sciences, including physics, are inferior to math because empirical evidence is often enough to develop a theory.

When I read about Okun's Law, I silently yelled at the computer screen. I already find Krugman a bit annoying (yes, I know he's "Nobel Laureate"), but this really got me irritated. Okun's Law suggests a relationship between unemployment and GDP. This makes sense. However, in the sciences, where the concept of laws are discussed, the laws are supported time and again by empirical evidence. This "law" is defied all of the time in that the coefficient which describes the relationship between unemployment and GDP is never the same.

For Dr. Krugman, a respected economist and political commentator, who has the ear of the public, to reference this as a law is nothing more than deceptive in my opinion. Economists need to be more judicious in discussing their opinions instead of masquerading as scientists who are stating the laws of nature.

*****

I'd really like to write more... but, I am tired. Burris will be seated. Reid was wrong. Blago is having (not so much) fun in Illinois. Congress is in session. The market lost ground from its Christmas rally. Obama-time is coming. Mitch Daniels will deliver the State of the State address on Tuesday.
Sorry - no links!

Abraham's Children

As Israel continues its offensive in Gaza, I wanted to take a little bit of time to discuss some of my thoughts on this very complex situation. This past Sunday in Loose Ends, I briefly touched on the situation and introduced The Israel Lobby and U.S. Foreign Policy. I recognize this book has its detractors, but I highly recommend it to help balance the general discussion about Israel which is pushed by the government-media complex.

Now, before I proceed into this controversial subject, let me make it clear that I believe in Israel's right to exist. Much of this conflict is due to events in the last 100 years. Some of this conflict is due to events 4,000 years ago. This entry is going to look at the latter and then we'll review the former (hopefully) later this week.

One last item before I proceed. I've separated religion and politics on this blog so far (for the most part) and try to make it clear when I am stating opinions or facts. This particular situation will make these lines blurry because so much of this conflict is due to religion - at least, many people's opinions have been formed on the basis of religion. Also, I am going to discuss some Biblical history. I am a Christian. I do believe in the Bible. I take some of it as direct fact and other parts as allegory. This makes the situation more complex as so many Christians derive their basis of support for Israel from the Bible. I am going to do my best to express where I stand based both on facts and opinions, and both as a Christian and as independent of religious beliefs. That said, I encourage my non-Christian friends to read on...

First we'll start with the ancient history. The first book of the Bible, Genesis, gives the account of the creation, the flood, and the story of Abraham and his descendants up to the death of his great-grandson, Joseph, in Egypt. The story of Genesis is important in understanding this conflict for two key reasons. First, the story of the flood leaves the world with only Noah and his immediate family, namely his three sons: Shem, Ham, and Japheth. This then implies that all of mankind is descendant from these three men. The story of Abraham is of more importance as he is an important figure in Judaism and Islam (as well as Christianity).

Abraham is a descendant of Shem from which the term Semite is derived. Abraham was the recipient of a special covenant with God. This is recognized by the Jews, Muslims and Christians. This covenant is expressed in Genesis 15:18, "On that day the Lord made a covenant with Abram, saying, 'To your offspring I give this land, from the river of Egypt to the great river, the river Euphrates.' "

Abraham went on to have eight children, but it is the first two who are of interest to this story. His eldest child, Ishmael, was born to his wife's handmaiden, Hagar. Abraham's wife, Sarah, was unable to bear children which led to her allowing this birth to happen so that Abraham could have an heir. Years later, Sarah is then blessed by God and allowed to have a child who is named Isaac. God tells Abraham that Isaac will receive Abraham's covenant, but that Ishmael will still be blessed to have a great nation.

Now, here's where it gets a bit sticky. The tradition in Islam is that Ishmael is a great prophet along with his father. The Jewish and Christian tradition does not look as favorably towards Ishmael. Further, it is widely considered from all three religions that Ishmael is the progenitor of the northern Arab people. One can almost think of this as the beginning of the split of the Jews and the Muslims (although, this is well before Islam was "found" by Muhammad). So, to me, this begs the question as to the specificity and definition of the covenant between God and Abraham.

Yes. God does indeed specify (in the Bible) that it will be Isaac, not Ishmael, who inherits the covenant of Abraham. Is this covenant specifically in regards to the territory mentioned in Genesis 15? Or is it a covenant of a special relationship with God? Or is it both? Regardless of the interpretation, both Isaac and Ishmael are to be blessed by God, and the specific boundaries of the land promised in the covenant are not well defined.

Today, many Christians and Jews will argue on behalf of the State of Israel in that they have a right to this land because of the covenant between God and Abraham. First, this is from 4,000 years ago and it is difficult to track ethnic roots across four millennia. This also depends on whether the covenant with Abraham applies to all direct descendants through the lineage of Isaac, or if it applies to those who have accepted Judaism as their religion. Further, does this eliminate Christians who are direct descendants of Isaac? Additionally, over the years, Jews have migrated all over the world (both by force and by choice). The State of Israel was established as a homeland for all Jews despite ethnicity.

This tricky relationship between politics and religion was unavoidable in the establishment of a political state for a people who identify themselves ethnically and religiously as one in the same. Are Jews descendants of Abraham ethnically? Or are Jews descendants of Abraham's religion through his covenant with God? Either way, it really cannot be both, and it makes little sense for U.S. foreign policy to be driven by a desire to see the covenant of Abraham realized in the State of Israel.

No matter your religious views, it is not the business of the U.S. government to be involved in answering the questions above. Many Palestinians and other Muslims are no doubt descendants of Abraham - from all of his sons. The U.S. (and any nation which has a separation of Church and State) should not allow the view of Biblical history to shape opinions over territorial disputes. As individuals we are entitled to our opinions over such disputes. But, popular democracy of any such ideals does not give our government the constitutional authority to meddle in such affairs.

Loose Ends... Vol. XXIV

Earlier this week, Illinois Governor, Rod Blagojevich, proved that he truly is his own man and lived up to his vow to "fight, ... fight, ... fight" by nominating Roland Burris to replace Barack Obama as the junior Senator from Illinois. While most of media seems quite keen to vilify Blago before all of the facts are out there, I can't help but hope that this guy comes out on top. There's just something about him I like. He is no doubt sleazy, dirty and corrupt - a public servant to act as such disgusts me. But, the way he just goes out there and delivers the middle-finger... well, it's kind of... refreshing.

Majority Leader, Harry Reid (D-NV) is vowing to block the nomination by refusing to seat Burris. Reid was on Meet the Press this morning (I missed it, but got the scoop from my lovely wife) and stated that "there's clearly legal authority for us to do whatever we want to do." Wow! This should be fun. Reid is referencing Article I, Section V of the Constitution which gives the Senate authority to judge the "elections, returns, and qualifications" of its members. From my humble perspective (not having a Juris Doctor in Constitutional Law), Reid has no leg to stand on. Burris is qualified. Blagojevich is still the governor and has the authority (responsibility?) to nominate someone.

*****

It's getting late, and I have to get back to work tomorrow. A couple other quick things to be aware of... Bill Richardson (governor of New Mexico) has removed himself from consideration as Obama's appointee for Commerce Secretary. There has been an on-going "pay-to-play" scandal surrounding him in New Mexico which is not going to wrap as conveniently as desired.

*****

Finally, I have to at least mention the recent increase in hostilities between Israel and Hamas in the Gaza Strip. This is far too big to get into now. But, this could get ugly. Obama made it clear that he was going to be an advocate for Israel with his speech before AIPAC in the spring. We'll see if he will try to beat George W. Bush at the game of appeasing the Israeli lobby.

Quick Look Back at 2008

Well, it's probably some sort of unwritten rule that blogs, news outlets, magazines, etc. are required to do a retrospective at the end of each calendar year. I'll give in to that briefly. We'll also take a prospective look at 2009.

I think 2008 will no doubt be remembered for two things in American history: the election of Barack Obama and the collapse of the economy. On the world stage, we had the conflict between Russia and Georgia, ongoing tensions in the Middle East, and the broader financial downturn across the globe.

I think that we'll look back at Obama's election as a key event in American history regardless of the successes and failures of his administration. I'm not in the position to opine on that outcome - I'm largely pessimistic with dashes of optimism - but, the election of a black man as President of the United States will be a significant for generations.

The economic crisis of 2008 has the potential to become even more significant. The crisis has its beginning in 2007, but the impact was much broader and bigger in 2008. Ultimately, the potential for a greater collapse looms in the future, but 2008 could likely be remembered as 1929 is today - despite 1933 being, arguably, the worst year of the Great Depression.

We'll take a look forward to 2009 in an upcoming post.

Happy New Year (again)... A closer look at the FED and the federal funds rate is coming soon.