Who to Vote For in 2012: Solved

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Proof that Capitalism Works

Move over Gillette and Schick, here comes some competition.

The Scale of the Universe

The Scale of the Universe - Interactive

Flash Animation Credit & Copyright:
Cary & Michael Huang

Did Government Policy Cause the Financial Crisis?

Reason.tv -- "AEI's Peter Wallison argues in the video above that the financial meltdown was largely a consequence of government housing policy that underwrote unsustainable economic activity. He draws heavily on the research of Fannie Mae's former chief credit officer, Edward Pinto (now at AEI), which found that federal housing agencies drastically underreported the number of high-risk mortgages on their books. According to Wallison and Pinto, there were about 28 million high-risk mortgages in the U.S. in 2008; roughly 70 percent of those mortgages were owned by government-sponsored enterprises such as Fannie Mae and Freddie Mac."

Grouch: The jury will probably always be out on this question. There'll never be a definitive answer, just a lot of competing theories shaded by political agendas. My own personal belief is that government provided the fertile ground for the banks, mortgage lenders and Wall Street firms to plant the seeds of greed and recklessness. No one area is completely responsible, but collectively they are all responsible. While it is a noble goal for the government to want to increase home ownership, this policy often results in distortions of lending standards and perverse incentives that lead to malinvestment and people in homes with mortgages they can't afford.

Steve Bridges, 1963-2012

Pet Peeves: Traveling

Sure, sports is nothing more than entertainment. But I want it to mean something more, especially college sports, or at least be honest and fair. NBA refs barely seem to know what traveling is anymore, and their foul calling is a tad inconsistent to the say the least..... sometimes you have to draw blood to get a foul called, and sometime just being within a foot of a player will get a foul called. This inconsistency really sours the pro game for me.

Now college seems to be getting in on the act. The NCAA officials in every game I've watched this year have forgotten the rules of the game and don't know how to call a walk. Is it just that the athletes have gotten so athletic the refs can't keep up? I don't think so. The game has become pure entertainment and they let the rules slide to keep the fans entertained with the spectacular play. I, for one, am sorry to see this trend develop.

This doesn't mean I won't be watching the NCAA tournament games for the next several weeks, but the outcomes will seem tainted to me. Give me the pure, unadulterated game called straight-up according to the rules.

Are the Polar Ice Caps Completely Gone Yet?

So much for Al Gore's prediction back in 2007 that there would be no sea ice in five years. The above picture from the University of Illinois shows that Alaska and Greenland are having a very healthy year for sea ice.

Don Surber of the Daily Mail reports:

So much for an ice-free Arctic. Henry Hudson’s long-ago dream of a Northwest Passage that would link England to the Orient by sea will have to wait another century as Mother Earth gives him the cold shoulder. Again.

From Real Science: “1979 was the peak year for Arctic ice, yet 2012 has more ice around Greenland and Alaska than 1979 did.”

Same date satellite data seems to show that Iceland and everywhere else is iced over this year when they were feeling a little green 33 years ago.

Of course, our moral and intellectual superiors elsewhere in the press keep banging the drums of Man Caused Global Warming.

Quote of the Day: Warren Buffett on Gold

Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion. Call this cube pile A.

Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?

Beyond the staggering valuation given the existing stock of gold, current prices make today’s annual production of gold command about $160 billion. Buyers – whether jewelry and industrial users, frightened individuals, or speculators – must continually absorb this additional supply to merely maintain an equilibrium at present prices.

A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond.

Admittedly, when people a century from now are fearful, it’s likely many will still rush to gold. I’m confident, however, that the $9.6 trillion current valuation of pile A will compound over the century at a rate far inferior to that achieved by pile B.

~ Warren Buffett, Berkshire Hathaway 2011 Annual Report

Some Additional Wisdom from Buffett: