Friday, July 03, 2009

Don't Worry

Don't worry America. Every politician is working for the individual. The politician will spend all the money that they can tax away from everyone else to make sure the individual is happy and by implication will vote for that politician. Only everyone else has to worry.

Democracy is failing in America like it failed in Greece some 2500 years ago. For starters vote libertarian. 

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Tuesday, December 16, 2008

Ponzi Scheme Is Similar To Democracy Scheme

Ponzi Scheme :

An investment swindle in which high profits are promised from fictitous sources and early investors are paid off with funds raised from later ones.

Democracy Scheme:

A political/social swindle in which unearned rights are promised to early voters and sourced from earlier earners.

We are not all equal. We are known by our differences.

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Saturday, March 01, 2008

Municipal Bond Turmoil: Some Positive Benefits

The municipal bond markets cratered last week. Munis were actually yielding as much as U.S. treasuries. But the interest paid on munis is tax free to the bond holder. So the de facto yield of some munis on Friday was app.8% when the taxes were considered. This historic inversion of the treasury/muni relationship was an example of further fallout from the margin calls generated by "marking to market" security postions that is demanded by standard acounting practices. Probably the accounting rules will have to be modified somewhat. Maybe a longer period of time and an average price will have to be used before a margin call is generated.

But in the meantime cities,counties and states are having a rough time raising affordable money for their projects. For example yesterday the Houston Independent School District had to withdraw its planned $ 385 million bond issue because of the extreme rise in cost. Maybe that's a good thing. There has long been the glaring fact that there is no meaningful connection between money spent and a quality education for youth. So now market forces in the bond maket will force local and state officials to discriminate more on how to use their limited options on what projects to pursue and fund. Do we want water and sewage infrasructure upgrades or more money thrown down the rathole of school bureaucracies?

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