Today I’m going to violate my own rule about “No Rants”. Sorry; can’t help it.

I watched Meet the Press this morning, something I rarely do because I really dislike people interrupting one another to scream out pat phrases and platitudes that I find offensive. But, since it’s so close to the election, and a couple of weeks ago it was civil (because Tom Brokaw was there), I tuned in.

The discussion was, for the most part, civil. Rachel Maddow was there, and she seldom screams or shouts. There was Chuck Todd, and there was Carly Fiorina. Remember Carly? Used to be the CEO of HP? David Gregory, the host, asked the group about Richard Mourdock, the State Treasurer of Indiana running for the Senate against Joe Donnelly, currently an Indiana Congressman. In the last few days, there’s been some amount of discussion about Mr. Mourdock’s comments regarding pregnancy through rape. That it be God’s will… Yes, Virginia, they’re at it again. Todd Akin, Joe Walsh (not the former Eagles member, a Congressman) and now Richard Mourdock. All Tealiban, and all in desperate need to control some woman, somewhere. But that’s not my point.

Carly Fiorina, woman, former CEO of HP, and token defender of positions that cannot and should not be defended by any female of the species, defended Richard Mourdock. She said, what he said was dumb, but he apologized. He apologized. He’s sorry he believes what he believes, but he believes it and there you have it.
Because, point of fact, he did not apologize. What he said was, he was sorry if anybody misunderstood what he said. But he believes what he said is true.
So that means he believes if his daughter was raped and got pregnant, she would be obliged to carry the child to term because it’s a gift from God. But I went to his website, and it doesn’t indicate whether he has any children. Just says his wife’s name is Marilyn. Wikipedia also indicates no kids. Kinda makes sense – have to have sex to have kids.

SHAME ON YOU, CARLY FIORINA. You have made it clear that you will do most anything to be accepted by the Republican club. Yew.. You ran for the Senate in California against Barbara Boxer in 2010. You still owe about a half million dollars to your own workers, and you lost by 10 points. In California…had you looked at a political map before you wasted all that money?

I guess my disappointment is always more manifest when it’s a woman who deserts – no turns on – her own gender. But somewhere, somehow, there is a God (not Richard Mourdock’s God) that will put things to right for Carly. May she never have a good night’s sleep again for what she did. As she’s 58, sleeplessness is soon likely gonna be a reality for her anyway.

So I’ve been going to two websites, like 4,000 times a day for the past two weeks. The two sites are www.intrade.com and the New York Times Election Forecast page written by Nate Silver. Watching these two sites 4,000 times a day is making me nervous. Every tic up or down brings on euphoria or generates another gloom & doom blog piece. All this was true until I stumbled upon the following two graphics, thanks to an Intrade contributor.

Click on each graph to enlarge.

Somehow the correlation between the two graphics made me feel more confident that Obama will win this thing. The first is the Intrade betting results for the Bush/Kerry race in 2004. The second – with an offset in the time frame – is the recount of the current Intrade daily results for the Obama/Romney race. If you compare the two – even on a macro basis – you will see a fairly clear correlation. Only you have to switch the parties, because Obama is the incumbent. Obama will win, because – as I said before – he will win the state of Ohio, which made all the difference for George W. Bush in 2004. Obama’s the incumbent that all the pundits said could not win re-election because of the economy. Bush was the incumbent that all the pundits said could not be re-elected because of the Iraq War. So what happened? Bush was re-elected to preside over the greatest economic disaster in 80 years. So fast-forward to 2012: Obama has 4 years of little progress in fixing the economy, we’re still in Afghanistan after 12 years of losing because of Bush’s need to transfer troop strength to Iraq, and nobody feels good about anything. Mittens, the other candidate, is very Kerry-like in giving you the feeling that – if he were to somehow win – he’d lose control probably within the first 90 days, and that his response would be to offer nothing but excuses. Just like Kerry – who will probably be our next Secretary of State. Is this the best we can do? Unfortunately, at this point in our evolution, it is the best we can do. We haven’t sufficiently suffered to have anything better. But I’d say we’re getting close to that point, don’t you think?

Remember the Video Emily and I made about investing? We submitted it to The Motley Fool’s investing contest. Didn’t hear anything for about a month. Then I got an e-mail saying we didn’t win.

I was on the Fool website the other day, and they’d posted the winner’s name and video. It was pretty good, I must say. But then, reading down, they indicated we took second place! Undeterred, if they run the contest again next year, we’ll be there, doing a better video and still investing.

Here’s a link to our video, in case you forgot it!

Well, here we are on the 15th of October. Detroit has beaten the Yankees two games to zip, and Derek Jeter is out with a broken ankle. If the Oakland A’s couldn’t win the American League Division Series, then I guess we should give the nod to the team that bested them. The combination of Miguel Cabrera (he who must be feared and therefore avoided by all pitchers, particularly Yankee pitchers!) and Prince Fielder was too much for the Yanks. So they’ll take a day off and go at it in Detroit Tuesday night.

But that’s not what I wanted to write about today. Sister Sharon says my posts are too long and tedious (well, that’s feedback!) so I’ll lighten up and talk about other things of interest. Like the holidays coming up! We’ve been discussing table settings and menus, as Robin and Kyle are in charge of the menu and I want to be ready with all the right equipment for those two gourmands.

So I bought a smoker! An electric Brinkmann that can smoke up to 50 pounds of meat at a time (can you imagine?) Never used a smoker before, so anybody out there reading this, please pass on any tips and/or advice. It should be an adventure…since I have Amazon Prime, the ‘thing’ will arrive tomorrow and I’ll be giving it a test run. Again, any suggestions on where a novice smoker should start? I know – not Kools! Lol…

Here’s a picture of the beast – all hail the red Brinkmann smoker!

Later…

The presidential race is, as it always was going to be, boiling down to Ohio. Just as in 2004 with George Bush and John Kerry, the incumbent’s hopes rest on the blue collar workers in the small counties surrounding cities like Columbus and Cincinnati. As such, let’s develop two different scenarios – i.e., play the What if? game.

What if the scenario plays out that those little counties’ voters resist those faux ads about the deficit, Home Depot’s hypocritical chairman (more about him in a minute) and the Libya fake accusations to give their support to Obama? He will squeak by with a fractional point in the popular vote and have just barely enough electoral votes to get 4 more years.

But just as with George W. Bush, it will be clear – despite his crowing to the contrary – that this country continues to escalate toward deeper divisions. In spite of the Democrats retaining control of the Senate, there will be no progress in 4 years, the economy will continue to be Japan-like in perpetual shadow, and the Republicans will win overwhelmingly in 2016, likely with Jeb Bush as President.

However, the one thing we’ll be able to say in 2016 is that we extricated ourselves from two bottomless-pit wars in the Middle East, and the countries in that region still simmer but haven’t erupted into full scale war. Ehud Barak will be the next Prime Minister, and Bibi will – once again – be put out to pasture. Only Kim Young-Un, the chubby and hapless child leader of North Korea, will still be the only nuclear “threat”, and life will go on.

Now let’s look at the other What If? scenario. Those little counties around Columbus and Cincinnati fall for the Republican line about fiscal conservatism, saving Medicare by killing it for the next generation and such? Romney wins Ohio, Romney squeaks by with enough electoral votes, maybe with or without the popular vote. Then what plays out?

The least of our issues is that we will have a Republican President, a Republican House of Representatives full of tea party supporters that want to dismantle the country back to the 18th Century, and a Republican majority in the Senate because the Vice President votes in case of tie. What will come of that?

The Tea Party will be transcendent. There will be a significant amount of legislation coming out of the House and failed to be blocked in the Senate in the following areas:

Health Care – kill the Affordable Care Act and replace it with – nothing.

Abortion – ban all forms of abortion with no exceptions – this will get thru as a function of Catholic Democrats, and Romney will be faced with a crisis of the first magnitude – will he sign or veto? He’ll sign. Planned Parenthood and a dozen other entities will file suit, and after 3 years, the law will be found to be unconstitutional. Just in time for the next election.

The Fiscal Cliff – the economy will go into recession, which Romney will blame on the policies of his predecessor. There will be no more global trade, with sanctions ratcheted up beyond anything Smoot-Hawley enacted. This incites a breakdown in all communication between the U.S., China, Europe and Russia. We will emerge from a crippled four years, just in time for Romney to attempt another 4 years, and the Presidency will be won by a Democrat to be named. But that Democrat will inherit a very bad world indeed.

What about the Middle East? Bibi Netanyahu now has an ally in the White House. This will embolden him to force Israel to attack Iran’s nuclear facilities, which everyone knows are deep underground and hardened to withstand just an attack. Ehud Barak will resign from the government, and emigrate to the U.S., knowing what is coming.

The result? Israel mounts an attack on Iran’s facilities. The attack fails. He calls upon Romney for boots on the ground support for an invasion of Iran. Romney’s rhetoric appears to support the request. The rest of the world condemns both countries. But Iran has friends in big places – like Russia and China. Russia and China – already alienated over trade issues – will come to Iran’s rescue. Israel will become the pariah of the world, politically and economically. I could even envision Kim Young-un being blamed for giving Iran the bomb, even tho’ it will later be shown it was Russia and/or China. The result? Potentially the demise of the small country of Israel. And all anybody will be able to say is – they brought it on themselves by going too far and being unwilling to compromise. We’ll see a repeat of the beginning of World War II, with Israel going first, then impacts to Japan and other countries in the Middle East like Jordan, Qatar and Bahrain. The difference will be this time it’s nuclear.

So what can you say about these two scenarios? The economy is toast for another 4 years, regardless. We will not be prepared for a total disruption in the flow of oil from Saudi Arabia and Iraq, which will make the price of oil $300 a barrel. The petroleum industry will collapse, awaiting the expansion of facilities in Mexico, Canada and the US. The world economy will be in a depression that will make 1930 look attractive.

And who will be blamed? Israel, yes the little country of Israel. So the head of Home Depot with his commercial about us not needing another 4 years of Obama, who represents the Jewish lobby – will aid and abet in killing millions of Jews. Ironic, isn’t it?

Just as I did with the last episode of “The Newsroom”, I intend to live blog the 3rd game of the Oakland Athletics/Detroit Tigers game tonight. The game starts around 9 PM, so I’m going to try to hang in there for the duration. This is the 3rd game in the series, and unfortunately, the A”s have lost the first 2 games. So since it’s a best of 5 division playoff series, this is it for the A’s!

We’ll get started on this in about half an hour. Just an FYI – I did get an inexpensive wireless keyboard for the I-pad, so that should make my typing faster – in theory, anyway. We’ll see how it goes!

So I’ll bet you’re wondering how I came to be such a baseball fan. And in particular, how i came to follow a California ball team when their games are not broadcast on the east coast until the end of the season. Simple – blame Moneyball. Loved the movie – loved the book.

During the first two games, I was texting with my nephew, Michael – in particular during the first game. So this time, rather than just text, I’ll blog…

Well, we’re off to a late start, as the Cincinnati/SF Giants game has gone into extra innings (SF eventually won in the 10th inning, saving their chances). OK – changed the channel and it’s about to start at 9:05. Since Oakland is back home with their fans, I anticipate improved performance versus their lackluster showing in Detroit. Anderson is pitching, coming off some injuries the announcers continue to dwell on…results are all that counts, so we’ll see.

Detroit’s up first; first batter struck out. Might need to edit this after it’s done so I don’t bore you to tears…
another strike out
two down n first inning
Detroit’s Cabrera up third – made a big impact in first two games..

Coco Crisp is up first & got a base hit. He made some mistakes in game 2, so I advocated a public execution, but Ma says that might be a tad harsh. We’ll see about that.

Coco scores: 1 to nothing. Detroit looks tired. Must be the thin California air.

Drew & Cespedes are on 1st and 2nd. Will this be a 3 run inning for the A’s? Reddick is up – spotty performance so far. Either strikes out or gets a home run. Three outs – Detroit’s up. 1 to zip

Great catch by Coco getting Fielder out on what would have been a home run without his big jump. No runs for Detroit. Still 1/0 A’s.

Catcher’s up with 1 out.

Bottom of the fifth inning and the A’s Smith hits a home run. Now it’s 2/0 A’s. They don’t look like the same team we saw in Detroit. They are clearly more comfortable playing at home. Seems like a sign of youth & inexperience. That’s a potential downside of the payroll deficit. What they have in hustle and moxie they lack in experience and likely flexibility. Hence issues on the road.

Game over; score remained two zip. Audacious fielding and pitching won it. How about tomorrow night? Detroit will try harder, no doubt.

Yes, gentle readers, I’m back! Been busy the past couple of weeks, traveling and dealing with friend and family stuff. But I’m back, and ready to talk about my favorite topics…

Let’s start with current events in things financial. While the European Central Bank (ECB) and the Fed are doing their darndest to avoid a deflationary spiral, the situation in Iran is quite the contrast. A few weeks ago Ahmadinijad and company implemented a “foreign exchange stock market” that gave vendors the opportunity to exchange their rials for hard currency at about a 2% discount to import “necessary goods”, i.e. meat and other items for which there are shortages.
The government expected this small subsidy to stimulate the so-called “private sector” in Iran to increase the quantities of these goods.

All of this is a reflection of the impact of sanctions placed on Iran last year by the U.S., and subsequently by Europe in July of this year. The sanctions were placed on Iran because of its refusal to abandon its allegedly peaceful nuclear ambitions, as well as its support for terrorist activities. The currency stock market has only been in place for 3 weeks, and has had exactly the opposite effect from the government’s desired outcome.

What is occurring this week is wholesale flight from the rial into other hard currencies – particularly US dollars. The result of this panic and hoarding of dollars is a huge debasement of the Iranian rial – somewhere between two-thirds and three-quarters of its value.

If you go to any website for the “official” exchange rate, it’s around 12,200 rial to the dollar. The going rate in Tehran these days is between 36,000 and 38,000 to the dollar. This equates to an inflation rate of 50 to 60% per month. The impact on the average Iranian is to devastate the value of their savings and buying power. There are stories about college age children being recalled home because of parents’ inability to pay their schooling expenses in the U.S., Britain and Canada. There have been demonstrations in the streets. The bazaar, long a power-broker in the country and supporter of the government, is shut down and will remain so until Saturday.

Picture, if you will, the impact on you as an individual were the same thing to happen here. $12.00 for a gallon of gas. That’s $120.00 to fill the tank of your Honda Civic – $300 to fill your Chevy Suburban!

But that isn’t the biggest problem. If you’re a baker in Tehran, you’re hesitant to quote a price because your next batch of flour will cost 3 times what you paid for the last one. And people have stopped buying meat, because they can’t afford it, so they’re buying bread – that the baker may not be willing to sell.

So what will be the likely outcome of this? The government blames ‘enemies of the state’ and even money changers for the problem, obviously taking no responsibility for the impact of their own policies. Their solution is more government money changers. That would work if they weren’t surrounded by other countries that can supply the hard currency everyone wants. Afghanistan is getting into the act, and I imagine Iraq will in the next week or so. As long as there is panic and dollar hoarding, the crisis will continue to get worse. Where will it end?

Erik the Younger says this will inspire the Iranian government to expedite their nuclear ambitions. I think he’s likely correct. But if the public perception is correct, and there is a shortage of hard currency to pay for the expense of setting up this program – who will help them? The last week in September, the Iranian government said they’d found explosives planted in equipment purchased from Siemens in Germany. Siemens denies they have sold anything to the Iranians since 1979. So obviously the Iranians bought used equipment from Ebay, no doubt using PayPal to pay for it. But even PayPal would cut them off if the exchange rate is so volatile! (OK, small amount of levity here…ahem..)

So I think Iran is on the verge of imploding. All the Ayatollah’s Revolutionary Guards can’t put this genie back in the bottle. Will China and/or Russia step in to help? Not likely – even China is cancelling oil field development contracts in Iran because the contract conditions are too onerous and they can’t make a profit. Are Iranians angry over the government’s sending arms to shore up Assad in Syria? You betcha.

This story will continue for the next couple of weeks. Will it have an impact on the upcoming election? We’ll see – timing is everything. Who will be the big winner coming out of all this? Barak. No, not Barack H. Obama. Ehud Barak of Israel. More about that in the next post!

Point 1, to Reiterate from Yesterday’s Post’s Predictions:

The Republicans will hate it. They’ll say it adds to the debt and does not bring down the deficit.

Here’s the Response from the Republican standardbearer:

“After four years of stagnant growth, falling incomes, rising costs, and persistently high unemployment, the American economy doesn’t need more artificial and ineffective measures,” sand Lanhee Chen, policy director for Romney’s campaign. The Republicans will hate it. They’ll say it adds to the debt and does not bring down the deficit.”

That looks like “hate it” to me. Second prediction:

The Democrats will be mum on it, or at most say how clever and knowledgeable Chairman Bernanke is. No endorsement…no pan…

Well, can’t say because THERE’S NOTHING ON THE WEB ABOUT IT. Guess that makes ’em mum…

Finally,

The pundits will argue over whether it will raise or lower interest rates.

Here’s the first: yes, it will lower interest rates – sort of…but not really:

http://ftalphaville.ft.com/blog/2012/07/24/1094601/the-academics-on-qe-for-now/

Here’s the second: interest rates are already nil, so there will be no impact (I agree with this one)…

http://www.bankingmyway.com/save/savings/what-does-printing-money-mean

So there you have it, folks: 3 for 3, but here’s the real advantage, at least in the short term:

And what was the stock market’s response to implementation of Doors 1 & 2?

Dow up over 200 points

Gold price soaring

REIT’s up with an expectation of a continuation of lower interest rates, despite any threat of inflation…

What could be nicer, at least for Emily the investor? Her IAG (I am Gold) investment from 1 year ago gave her a 57% net return.

Her two REIT investments (New York Management Trust and Chimera Investments) this morning are both up when they had been drifting lower because of the concern over the past few weeks of Fed INACTION.

Bless, you, Ben Bernanke!

Today is Thursday, and I know you are all breathlessly waiting for this week’s trivia question, but I’m inclined to write about QE3 first. What is QE3? Refer to my previous post, but if you don’t want to scroll down: it’s the third major effort by the Federal Reserve to inject money into the economy. QE is an acronym for Quantitative Easing. The Fed has been meeting yesterday and today, with an expected announcement this afternoon of three possibilities, per the pundits:

1) Another round of Quantitative Easing, buying mortgage backed securities

2) Not another round of Quantitative Easing, but instead a promise not to raise interest rates for an additional year – until 2015; or

3) A more drastic, risky yet probably effective move to giving money directly to banks and instructing them to lend it (i.e. lower their current lending standards)

The so-called experts are divided between options 1 and 2. Option 3 is frankly one I am suggesting, so I suppose that makes me a pundit wanna-be of outrageous proportion.

Having said that, let’s take a look at explanations and then look at some data:

Marketwatch/Rex Nutting this morning:

http://www.marketwatch.com/story/why-the-feds-words-mean-more-than-its-actions-2012-09-12?dist=beforebell

If you don’t want to cut & paste (annoying) to read the article, let me summarize. Mr. Nutting suggests early in the column that Door #2 above is in the offing. Then he spends most of the column suggesting why Door #2 is very risky, theoretically effective buuuttttt…probably won’t be effective anytime soon. How’s that for confidence?

OK, how about this one – NPR this morning:

http://www.npr.org/2012/09/13/161037731/fed-stimulus-expected-but-remedy-may-not-be-right

Still not too keen on copy & paste? OK, another summary. This article suggests the 50/50 split of economists for Doors 1&2, then interviews one managing director of an investment fund pitching for Door #2. And then having same said manager suggesting that it would be a mistake to choose Door #2 because it could lead to the “liquidity trap”. Oh – new peril! What is a liquidity trap? According to the article, it’s when interest rates are so low that retirees go for short term versus long term instruments (i.e. money market funds versus long term CDs – not Compact Discs, but Certificates of Deposit). The theory pointed out here is that will hurt lending because of the lack of resources for banks to lend out. This assumption must mean that George Bailey and the Bailey Savings & Loan are alive & well. NOT! I think Mr. Potter is in charge now, and he’s selling his MBS’s (mortgage backed securities) to the stock market. Recall the meltdown of 2008 and the discovery that these MBS’s were empty vessels? There’s a bit of a reality check.

Now that we’ve dispensed with what I perceive as nonsense and double speak, let’s look at some real data:

Are people really putting all their money in the mattress? Here’s the graphic for savings rate since the late 50’s:

Click on the graphic to enlarge it.

Does that look to you like folks are hoarding money? Well, the answer is all relative – compared to the 50’s, not. Compared to 2008, definitely. But the line went down when the economy was on the upswing – now savings are going up when the economy is again softening. We’re talking the difference between 3% growth and 1.5% growth. So this is a contributor. But is it the biggest contributor? Nay, nay, I say!

How about this graphic? I think this speaks volumes:

This is a year over year comparison, so the trend over there on the right side is quite seriously bad, relative to all other decades precedent. So, with these two data points, I suggest the Fed give a significant amount of money to the banks and instruct them to lend it out. To people that will spend it. Soon.

Your thoughts?

UPDATE: And the correct answer, with today’s announcement at 12:30 PM: DING! DING! DING! Door #1! $40 billion A MONTH of Fed Purchases of Mortgage Backed Securities…you know, those bundles Mr. Potter is selling on the stock market that weren’t worth a tinker’s dam in 2008 because of the quality of the borrower’s balance sheets behind them.