Stop Wailing!

Hi, Everyone,

It's been awhile since I've seen you all and the markets are still jumping up and down, so I think I'll pick another topic besides finance for this post.  You know my thoughts on polar bears, but where does the Kernal stand on whales?

Whales are NOT our friends.  Just ask the Digital Architect.  When he was still in high school we had an attractive but totally soaked young lady come to our door in a rainstorm and ask us to help her "save the whales."  We invited her in to towel off, and as she was doing so we explained several things about whales that she perhaps had not known:

1.  Whales are the dinosaurs that escaped into the ocean after that huge comet hit Earth.  They are one of only two fish-like mammals that live in the ocean, the other being dolphins.  By escaping into the water, they survived the extinction of their fellow dinosaurs.  This explains why they are so huge, just like their dead brothers were.

2.  Whales cause more international disputes than any other animal.  Brazil, Japan, American Eskimos, Russians, Iceland and others are continually arguing over which of them has a need and the right to "harvest" whales.  Add Greenpeace to that mixture and there is continuing strife at sea.

3.  Whales are the largest single polluters of the oceans.  Baby whales are born weighing one ton or more and they double their length in one year.  Adult Right Whales grow to up to 60 feet long and weigh up to 80 tons!  Now just how much do you think these beasts have to eat to support that kind of growth and weight?  The resulting waste products sink to the bottom of the sea, bringing forth our common expression, "lower than whale poop..."  Lots of it.

4.  Whales do not like humans.  Didn't you read Moby Dick?  Not only do they not like us, they are also involved in a plot to return to dry land now that the comet dust has cleared.  That's why you often hear or read about a bunch of whales who beach themselves on our shores.  Here is a picture of a platoon of them trying to sneak ashore. They're baaaack!

5.  Finally, whales provide the pretext for the ecoterrorists who wish to prevent the U.S. Navy from training and commercial shipping from doing its job efficiently.  Just last week, the U.S. Supreme Court was asked to rule on the NOAA regulation that says that all shipping arriving in this country must slow to 11.5 MPH within 20 miles of our coastline.  The "Save the Whales " crowd wants that limit moved out to 30 miles from the coast.  Why?

Because only 83% of the whale sightings occur within 20 miles from the coast, while 90% occur within 30 miles.  So, they asking for a 50% increase in slower, more inefficient shipping to gain a 7% increase in whale sightings.  Will this help "save the whales?"  Nope.

For two reasons.  First, since NOAA started the 20 mile limit in 2006, there have been a grand total of 3 whales who have been struck by ships and were killed.  Three whales in two years!  Now there's a crisis!  

Second, no one has yet shown that the ships struck the whales rather than the whales struck the ships.  Remember, whales do not like people.  Remember Jonah and remember Pinocchio! It is said that the whales are too slow to ram ships, yet we have pictures of these 80 ton ex-dinosaurs leaping out of the water higher than Michael Jordan ever could.  They don't look so slow to me.

On the West Coast, the Whale People want the Navy to stop training on the use of new sonar which will detect the very quiet diesel submarines which have been developed by the Chinese and North Koreans.  The Whale People claim that their huge friends become disoriented by the sounds of the sonar and head for the shore to become stranded and die.  That platoon you saw on the beach didn't look very disoriented to me - they were in an attack formation!

They obviously have forgotten that the whales are intentionally coming ashore, usually in the dead of night, to see how far inland they can get before dawn.  That also explains why you read about the occasional whale or two found swimming well upstream in someone's river.  They are the scouts, looking for a place where the rest of the whales can land, hide and rest while learning to walk again.  They're baaaack!

Perhaps the most telling comment to come out of the Supremes last week was from Justice  Stephen Breyer:

"I don't know anything about this.  I'm not a naval officer.  Why couldn't you work this thing out?  You're asking us - who know nothing about whales and less about the military - to start reading all these documents to try to figure out who's right... I think the whole point of the armed forces is to hurt the environment...On a bombing mission, do they have to prepare an  environmental impact statement first?"

Well, despite his proper concern with the weirdo arguments of the Whale People, I found the good Justice's knowledge of the military and its mission to be just a wee bit disconcerting.

Beware of people who want you to love polar bears and whales.  You'll be safer and glad if you exercise that caution.  And if you hear something big flopping around in your back yard, don't turn on the lights to take a look...

There is some high ground somewhere near you.  Know where it is.

 

Thank Goodness!

Today marks a milestone not seen since the elections of 2006:  the Congress of the United States  temporarily stopped their partisan rancor and childish bickering long enough to actually get done what was required for the good of the Nation.  Hooray!

After Monday's failure to pass the Emergency Economic Stabilization Act of 2008, our legislators watched the markets erase $1.2 Trillion in wealth, the credit markets begin to tighten further, foreign governments and central banks pleading for American action, and small and large businesses throughout America begging for help.  The Commercial Paper market, the way firms borrow short term without having to float bonds or issue new stock, had doubled interest rates on those notes within two days.  A real wolf was at the door.

The legislator with the best name in Congress, Zach Wamp, Republican of Tennessee, said that he had "voted with his heart against the bill on Monday."  Today, Congressman Wamp made the decision to vote with his brain.  33 Democrats and 24 other Republicans who had opposed the bill on Monday today joined Representative Wamp in becoming "brainiacs."  What a pleasant change...

The President signed the bill this afternoon and SECTREAS Paulson promised to start immediately to implement the purchase and removal from the credit markets the toxic sub-prime mortgage securities as the law now requires.  This will happen over the next several months, not the next several days, so we must not expect that the disaster which has been building since 1977 will be swept away in the blink of an eye.

Several alarming things I have learned in this crisis.  First is that the children of the United States are no longer required to take a Civics Class in high school.  I learned this on the golf course, playing with a kid from the local school.  Now, Civics was not my favorite class in school, but at least I was once exposed to the mechanics of how a bill becomes a law. My golf partner had no clue.  Today's kids apparently only know what arrives as a text message on their phones...

Second thing I learned, to my dismay, is that a Congresscritter, once having voted with his/her electronic card and with the vote closed and the results announced, may then ask his/her party whip in the House to CHANGE THEIR VOTE for the record, as long as it does not change the outcome of the overall vote.  So those 58 brave Members of Congress who decided to vote their brains instead of their heart today, may well go home tonight and tell their constituents that they remained true to their heartfelt principles throughout the week.  

If there was a way for me to discover that my representative had voted one way and then said they didn't, that would seem to me to be an impeachable offense.  But, alas, those minor details are not public in accordance with House policy.

I hope some of you took the opportunity I mentioned in an earlier post to add to your financial portfolios during the Wall Street fire sale this week.  I think I said you needed to act NLT early Thursday, but I didn't explain why.  Wall Street has long embraced the mantra, "Buy on the rumor, sell on the news."  The markets went up on Wednesday and Thursday as buyers were reacting to the Senate's action and rumors that the House was coming around.  Today, when the House passed the bill (the news), the markets dropped off slightly as sellers took control.

I added Goldman Sachs and Apple to my portfolio this week at prices less than half of what they were several months ago.  There are still some bargains left after today's slight drop, but if you want to take advantage, I wouldn't wait much past early Monday.  

Normally, I am very much opposed to market timing as a strategy.  In this instance, I simply see a "bottom fishing" opportunity which I think will be fleeting.

Well, the storm clouds will clear over time and we have apparently dodged this bullet.  Now, let's take the time to relook how we got to this mess, so that "Wall Street Greed" is not seen as the only villain.  It seems to me that there is plenty of "Vote Buying Greed" that deserves equal billing.

Thanks for your many positive comments on my attempts to cut through the fog of this crisis.