Atmospheric Carbon Dioxide Levels on a Geologic Time Frame

Yours truly spent time is his young adulthood in an evolutionary biology Ph. D.-level course of study and was interested, post-Copenhagen, to review matters studied decades earlier.

You may click on the graph for more detail.

The Earth is at historically very low levels of atmospheric CO2 levels. A rise will do more for agricultural productivity than depleting the earth of nutrients to goose yields, I suspect. A foot higher sea levels? Even Miami wouldn't notice it, much less New York or California.

Cap and trade is a clear scam to benefit crooks and Big Finance (there is some difference); Europe has already apparently had a multi-billion Euro heist. Why not simply tax gasoline sales, oil and coal companies receipts, etc?

The famous "hockey stick" 1000 year temperature graph of 10 years ago has been proven to have been a fraud, as it eliminated the Medieval Warm Period. Why is Greenland called what it is called, after all?

(The position at EBR is that all resources, including carbon, should be used with caution; "growth" as a primary goal of social and political thought is dangerous; sustainability and quality of life are important factors; diminished volatility in markets is good; trying to reblow bubbles or sustain the dying from burst bubbles is bad. Yours truly has no idea whether the earth is warming much and what the future trend will be, and whether CO2, a weak greenhouse gas, makes much difference in the scheme of things.)

Draw your own conclusions.

Remember how many special interests stand to gain from imposition of cap and trade, control of your life from carbon permits and taxes, etc.; do not accept subservience to Dr. Al Gore et al. After all, it is he and his ilk who travel the world in private jets, not you.

Gandhis, none of them.

Think different.

Copyright (C) Long Lake LLC 2009

Boom and Bust

Steve Hanke has an interesting, informative piece in GlobeAsia titled Booms and Busts.

He discusses the relationship of skyscraper construction in relation to easy money-induced booms, the fallout afterward when the boom turns to bust, and then suggests that we should be entering a boom phase:

Moving from Dubai to the United States, the spread between
Baa and Aaa corporate bond yields has dropped from its peak of
350 basis points at the end of 2008 to under 120 basis points. The
narrowing of this spread is the largest since the 1930s.

As the accompanying table signals, the United States should
have entered a boom. Indeed, if the annualized real growth rates
in the next two quarters (Q4 2009 and Q1 2010) don’t hit 7%, we
will know that the Obama administration’s interventionist policies
have been a bust.

We now know (for now!) that Q3 GDP was more or less flat absent cash for clunkers and the credit for first-time homebuyers along with the massive ongoing government stimulus. It is hard to see that Q4 will be dramatically better, given the certainty that consumer spending has been sluggish and given the commentary from Warrren Buffett and many others that their businesses have not seen much in the way of revenue growth in the U. S.

So, leaving aside Dr. Hanke's political comment above, my comment would be that we are at the tail end of the effectiveness of interest rate cuts to be associated with/cause a boom. This is the Japan scenario: ice, not fire. Demographics, debt levels, burdens of quasi-empire, better ROIC in developing countries, etc., all suggest that the cyclical rebound is to date more muted than in the past (just as the downturn was actually more muted than it could have been). Not the end of the world, though.

In this scenario, the Fed stays easy and bodies in motion stay in motion until, one fine day, they don't. In other words, the trend is your friend, until it is not. Let us see if gold stays within a well-defined structural bull market. For now, it's resting and I am sitting tight, having bought part of my large position back after about a 9% pullback. There are lots of arguments for and against gold; I'm ignoring them and simply saying that easy money is inflationary and therefore good for gold.

For now, my attention is more on Oracle, Teva, Ross Stores, and other stocks that have broken out to new highs or multi-year highs (ORCL) not just on price but based on 50 day or even 200 day moving averages. IBM is close. I am not aware of any major asset class that is undervalued.

But "money" must go somewhere. Investors should watch with gimlet eyes. Boom, bust, schmoom, schmust, all that stuff comes and goes, but fundamental valuations drive long-term returns. And right now I continue to dislike what I see in that regard.

Copyright (C) Long Lake LLC 2009

Is the Hated Long Bond Ready to Rally?

The 10-year Treasury bond's yield advantage over the 2-year and the 3-month T-bill is at or near record amounts in absolute terms. Other similar spreads were seen in spring 1992, August 2003, and June 2009. All cases were positive for the bond market as well as the stock market.

What matters is not only the absolute yield differential but the ratio of yields. In 1992, Treasuries were yielding almost 7%, so the ratio of the 10-year to a short-term yield was not nearly so great as now. Taking this to an absurd case, what if the short term rate were 100% and the 10-year were 105%? That would be an even greater spread, but the yield curve would be flat.

Contrarians can once again buy long bonds for a trade. The Gallup hiring/not hiring difference just went to negative 6. This is consistent with a jobless recovery and is of a piece with recent non-seasonally adjusted unemployment claims (rising) and Q3 GDP downward revisions X 2 (old "news" of limited importance to be sure).

Whatever complacency about the course of this recovery exists-- with some very high GDP numbers for the quarter just now ending and early next year in the ether-- and with the VIX under 20, a lot of fear is for certain out of the market, any excuse to take profits may do. A weak jobs report next month could be that excuse.

Copright (C) Long Lake LLC 2009

European Cooling

In Weather Takes Further Toll on Europe, the WSJ reports that:

Snowstorms and freezing temperatures continued across Europe, disrupting Christmas-holiday travel for thousands of people and claiming at least 80 lives.

Poland, where 29 people have frozen to death since the start of the weekend, and Ukraine, with 27 fatalities, have fared worst. But the effects are being felt from Scandinavia to Italy. A homeless organization in France said 12 people have died in the severe cold this month.

Following hard upon the irony of the American President leaving the Copenhagen climate summit a day early because of snow in Washington, this article goes to end with the following:

Private forecaster WSI said most of Europe is likely to experience colder-than-normal temperatures over the next three months. Todd Crawford of WSI said a combination of El Niño, a cold north Pacific and cold midlatitude North Atlantic sea-surface temperatures pointed to a continuation of frigid weather.

"There may be a relaxation of the current cold pattern during January, followed by a return to more consistent colder weather in February and March," he said.

The climate is always changing. There really and truly was fear of global cooling a quarter of a century ago. I remember that for a fact, for I was aware of its possibility when I moved from New York to Florida in the mid-1980s. Only to run into some record hot months. Go know.

How much human effort will be spent on changes in manufacturing and transportation to have minimal effect on the weather half a century out? Where are the green industries? Will this be the next Internet-like "hot" investment fad?

I dunno. But it looks as though there will be at least some cooling the European fervor for pro-cooling measures when this winter finishes.

Copyright (C) Long Lake LLC 2009

Dividend Matters

In this speculative set of markets, it's nice to see a reasoned discussion of dividends as in the linked Business Week article. In the early stages of the Great Depression, dividends were high single digits. Now the S&P 500 yields about 2% (exact rate depends on how you measure the yield of 500 stocks weighted by float.)

My basic take is that if we are years away from surpassing the total dividend payout set at peak, it is anyone's wild guess as to what competing interest rates will be, what P/E's will be, etc.

People such as David Kotok of Cumberland Advisors who have been quite right this year to be long continue to be long, citing liquidity and absence of labor cost pressures. So, sales should rise and margins should be strong.

The novel problem is the eerieness of 0% interest rates, which are occurring allegedly because there is still a financial crisis going on. Meanwhile, the rest of the financial community is partying. What is this liquidity then other than leverage similar to that which ultimately imploded the system a year ago? Will stocks double so that the dividend yield on the SPY is only 1%, but that still is as good as cash? Will the trick for the next bear market be that stocks peak well before the Fed truly tightens?

Stay tuned. Whether it's a Ginnie Mae, a 10-year Treasury, or even Teva yielding 1.1% or ownership of GLD or SLV with covered call selling, investors should focus on income precisely because most of the media are not doing so.

Copyright (C) Long Lake LLC 2009

Q3 GDP Revised Down Again, but Lacking in Importance

Bloomberg.com reports:

The economy in the U.S. expanded in the third quarter at a slower pace than anticipated as companies curbed spending and cut inventories at an even faster pace, reductions that have set the stage for an acceleration in growth.

The 2.2 percent increase in gross domestic product from July through September compares with a 2.8 percent gain previously reported by the Commerce Department in Washington.

Improved consumer spending combined with a record drop in stockpiles this year will promote increases in production that may keep the world’s largest economy growing well into 2010. At the same time, companies such as Dell Inc. point to gains in business investment that signal growing confidence the expansion will be sustained.

“All signals point to a strong fourth quarter,” Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, said before the report. “Growth is shaping up at around 4 percent as the inventory cycle turns upward.”. . .

The 2.8 percent projected pace of growth was based on the median estimate of 73 economists in a Bloomberg News survey. Estimates ranged from gains of 2.5 percent to 3.7 percent. The GDP report is the third and final for the quarter. The government’s advance estimate two months ago was 3.5 percent.

Remember that these are annualized percentages. So what has happened is the GDP growth in the quarter was estimated 2 months ago at 0.875% (3.5% divided by 4). It is now estimated at 0.55%.

I was reviewing some numbers recently and saw that GDP for 1983 had been revised recently. Perhaps those revisions are final. Basically these numbers are useless to investors or, truth be told, voters or policymakers.

The CEO of Conagra was on CNBC yesterday. Was he bullish? Yes, on his company's performance. He is budgeting for a sluggish economy. Warren Buffett recently said that his company really had not seen much of an improvement in business. The Gallup polling yesterday showed the hiring/not hiring indicator at a completely miserable negative 3.

In the quote above, Mr. Gault may well be correct. But this will mean little for the long term. The Government continues to borrow and print as much money as, I suspect, all businesses in the U. S. will show as profit this year. All this "money" injected into the pockets of seniors, poor people, agribusinessmen, Big Finance, etc. will one way or another get spent. The deleveraging risks should be to deflate prices that have gotten above the ability of wages and savings to pay for them without ever-more frantic financing schemes. That is why as gifted a stock market forecaster as Barry Ritholtz both sees more stock market gains ahead but a flat market at best on average for years to come.

No disagreement here.

Copyright (C) Long Lake LLC 2009

Twas Brillig and the Slithy Toves Did Gyre and Gimble in the Wabe

Bloomberg.com is choosing to run with S&P 500 May Climb 6% on Santa Claus Rally: Technical Analysis, which says:

The Standard & Poor’s 500 Index may end the year as much as 6 percent higher if a typical December rally drives the gauge past a key resistance point, according to technical analysis by Bell Direct’s Julia Lee.

The index, which closed yesterday at 1,096.08, has climbed through December in 16 of the past 20 years, said Lee, an equities analyst in Sydney. Further gains this month in what’s sometimes known as a Santa Claus Rally could push the gauge past 1,121, the 50 percent retracement level that Fibonacci analysts identify as a point of significant resistance.

“The 1,121 level is the 50 percent retracement from the high of the bull market in 2007 to the low of the cycle in 2009,” said Lee. “It will be a challenge to break past that, but if it does, my guess is that the index will drift even higher to 1,160. If it doesn’t, we’ll probably just see a sideways movement.”

While I give some credence to technical analysis, it is irresponsible to the non-professional reader to suggest that with 2 weeks left in the year in what is usually quiet trading, and only about 7 trading days, that the index can rise 6%. Annualizing a 6% gain every 2 weeks gives an appreciation rate of about 329% yearly.

Yes, anything can happen, and yes, an improving economy associated with Fed ease is a potent combination for the bulls. But it is much better to see gloomy headlines that worry that stocks are poised for a fall than the uber-bullish gibberish quoted above. Rather than waste your time reading this stuff, please reread perhaps the most famous piece of nonsense ever written, namely Jabberwocky.

Copyright (C) Long Lake LLC 2009

S&P 500 Valuations and Stock Prices

The total market capitalization of the S&P 500 is about $13.5 T. Per Zero Hedge and CapIQ, total shareholder equity of the companies in the index is $4.8 T. Goodwill is $1.6 T. These are high ratios historically. In addition, the dividend yield is slightly under 2%.

Click HERE for a list of dividend yields on the S&P 500 index going back to the 1800s (synthetic index for long-ago years, I believe).

Note the high yields from the 1930s well into the 1950s. It was that era that really provided the upside to stock returns vs. bonds. If one looks at the 1970s and then especially the early 1980s, it is easy to demonstrate that an investment in zero coupon 30-year Treasuries in 1982 did just as well as the stock market with less volatility and fewer ongoing costs. Depending on the exact interest rate at the time, a long-term Treasury bought when inflation was raging but Mr. Volcker had tightened money severely was only a few dollars, destined to turn in a few years (2012 if bought in 1982) into one hundred dollars.

Conclusion: The above is a simple way to look at stock valuations including comparative valuations during times of very low Federal debt interest rates. The results are consistent with Andrew Smithers' analysis and that of Jeremy Grantham.

The Smithers analysis is that the stock market is almost 50% overvalued. This would imply that fair value for the S&P 500 index is not much about 700. Given that the averages spend as much time below fair value as above it, and given that even a rising dividend payout stream could be consistent with a 50% decline in stock prices to allow (say) a 5% dividend yield for the index, my conclusion is that there is substantial downside risk in stock prices, even under a decent scenario for economic performance.

The above analysis recognizes that all financial assets are correlated. In retrospect we look back at post-War World II low stock valuations and low Treasury yields and see the value in stocks, but in those days, the general worry was that a deflationary Depression would return. Now the worry is that an inflationary period will return; but there is no high-yielding secure government debt to flee to as there was in the 1980s. All is at risk. In this environment, Ginnie Maes, which pay back principal as well as pay interest, may be the best investment for a substantial chunk of retirement money.

Copyright (C) Long Lake LLC 2009

Article on the Census not Sensible

You know the Establishment is grasping at straws when a decennial, predictable event is touted as being able to "spark" the economy. In Economists See a Lift in 2010 Census, the New York Times leads off this national article (i.e., one not relegated to the business section) as follows:

Next year’s census will not only count people, it will also put money in millions of pockets and potentially create a well-timed economic spark.

I stopped reading shortly thereafter. Any "economist" who believes that people creating lots of carbon emissions by driving around town, then parking and knocking on people's doors to ask questions can provide vitality to the economy has an incomplete understanding of what a healthy economy comprises. One of many rejoinders to this point of view is that the article could just as easily have said that providing free money AKA welfare (as in corporate welfare to Big Finance or to retirees) can "spark" the economy. It's call money-printing and it DOES NOT WORK.

Copyright (C) Long Lake LLC 2009

What Chinese Pig Farmers Have to Do with Fannie Mae, AIG and Goldman Sachs

The New York Times is running a concise review of financial companies that are to one degree or another wards of the Feds. It is horrifying. Here are excerpts from 4 Big Mortgage Backers Swim in Ocean of Debt:

Even as the biggest banks repay their government debt in what is being heralded as a successful rescue program, four troubled giants of the financial world remain on government life support.

These companies, the American International Group, Fannie Mae, Freddie Mac and GMAC, are not only unable to repay the government, they are in need of continuing infusions that make them look increasingly like long-term wards of the state.

And the total risk they pose to the taxpayer far exceeds that of the big banks. Fannie and Freddie, in the final days of the year, are even said to be negotiating with the Treasury about greatly expanding the money available to them. . .

Fannie Mae recently warned, for example, that it could not pay the dividends it owes the Treasury, so “future dividend payments will be effectively funded with equity drawn from the Treasury.”

It would appear that Fannie Mae is involved in a Ponzi scheme with the Treasury.

All the above and almost all of the point of the entire article relates to the old Irving Fisher/Austrian economics point of too much aggregate debt. As debt levels in the West relative to the size of the economy have risen over the past 3 decades, secular economic growth has slowed and Treasury borrowing rates have fallen concomitant with decreased private demand for funds (e.g., decreased perceived real investment opportunities for the private sector).

From an investment standpoint, the opposite of debt is ownership, and an opposite of paper money is hard money AKA gold (and silver?), and by extension other physical goods known as commodities. But what happens when ownership of hard money occurs due to borrowing paper money (in electronic form)? One has a confusing situation. The mistrusted fiat money sector is used, on the margin with leverage, to purchase a form of insurance against itself. Logical? I think not. Yet ultimately gold is gold, nothing more or less. It just sits there, not tarnishing even after centuries at the bottom of the sea. It can't pull an AIG and have one obscure division ruin the entire entity or morph from an auto manufacturer to a finance company with a manufacturing subsidiary, as GM effectively did. It also can't become Apple Inc. Gold should be the ultimate non-get rich quick asset, a topic addressed next.

Mish has a compelling, must-read article that addresses this in China Faces Crash Scenario, which in turn references what strikes me as a credible article by a man named Brent Cook titled Pig Farmers are Making Brent Nervous. Here are excerpts from the latter:

Before getting into to the relationship between copper and pork products, I want to draw your attention to what makes me nervous, have a look at these photos from China. They are excerpted from a China Central Television Channel (CCTV) program documenting private speculation and hoarding of metals throughout the country. According to an associate of mine at an Asia-focused hedge fund who was just in China, “It’s pervasive; people are piling this stuff up in their backyards."

He Jinbi from Maike (metal trading company). He told CCTV they saw many farmers in Guangdong province stocking more than 100 tonnes of aluminium at home. These people used to raise geese for living.

Because the interest rate is too low in China. Many farmers could make hundreds of RMB profits per tonne, with dozens of Rmb per tonne cost of interests. They use their existing inventories to borrow more from banks. Banks are very 'happy' to lend to them. . .

A September 17 Bloomberg story by Singapore-based Glenys Sim reports that “Private investors in China, the world’s largest metals user, have stockpiled ‘substantial’ quantities of copper as the government ramps up stimulus spending to spur the economy.” The article points out that pig farmers and other speculators have amassed in the order of 50,000 tonnes of copper. That is about half the level of inventories tallied by the Shanghai Futures Exchange."

Mr. Cook goes on to state flatly:

What is obvious is that gold and now base metals have become speculative investments that in addition to being bought as hedges against inflation and a falling US dollar are the latest get rich quick scheme. . .

I remain cautious and somewhat concerned by what appears to be hot and fickle money jumping into a sector that is apparently taking its cue from pig farmers.

Only for reasons of space have I ignored the rest of Mish's article, which has several linked articles.

The Brent Cook article states that banks are happy to lend to pig farmers for commodity speculation. Here is an online dictionary's definition of a bank:

"an institution for receiving, lending, exchanging, and safeguarding money and, in some cases, issuing notes and transacting other financial business."

Note the word "safeguarding". Your "money" in the "bank" is not safe except at the most conservative institutions. It would appear that much of the global economy has been, through overt governmental and business policy and by governmental neglect as well, subjugated to the traders, middlemen and salespeople who benefit from volatility with government bailouts as a given.

When what should be an uncorrelated asset--gold--trades up hard and down hard due to the same leverage that it should be insurance against, what you have is a mess. My guess--just a guess-- is that central banks need "money" and those in countries that have lots of gold, such as the U. S., France and Germany are more than happy to see gold's price trend higher, because this provides a larger capital base on which to continue to support the economic basket cases of their economies, so that unlike past years, official policy may work in favor of gold owners, not against them.

On the other hand, every other commodity, including silver and platinum, are for official purposes all the same: industrial commodities. They are imports for the powers in the G7 and G20 and all things being equal, lower prices are better for their economies than are higher ones.

To summarize, the post-Cold War economic stability of the West of the 1990s is definitely gone.
Whatever price gold and stocks had then is mostly of historical relevance. The U. S. is going the route of Japan with weak, giant financial institutions, politically-motivated infrastructure spending paid for with borrowed funds and a carry trade currency. The economy built on outsourcing, China, may well be in the late stages of a complex financial bubble, and the world's largest economy is being propped up by taxpayers borrowing in part at zero percent interest rates (but with massive re-financing risk as this borrowing is short-term), and Goldman, Sachs and other trading companies are as happy as Chinese pig farmers.

The only theme an investor can follow is that the powers that be don't care about you. In fact, they want your money. Thus American homeowners have systematically been turned into renters for the most part. How to preserve capital adjusted for "flation" has been deliberately been made so complex that the average person has better odds, perhaps, in Vegas than playing our markets. "They" have made it overly complex. Your job is to keep it simple and keep your eyes open and your hand on your wallet. Emulate not Chinese pig farmers. Whether precious metals and other ETFs are the Western equivalent of copper and aluminum in their yards is unclear. More than ever in modern financial times, you never know.

Copyright (C) Long Lake LLC 2009

Empty Agreement on Climate Change and Relevance to Health Insurance Legislation

What I found most relevant to my life in Bloomberg's Obama Snubbed by Chinese Premier at Climate Meeting was not the snub--which is of no importance to me-- but the following quote from it:

“Coming back with an empty agreement, I think, would be far worse than coming back empty-handed,” White House press secretary Robert Gibbs said yesterday in Washington.

Given what the healthcare "reform" effort has devolved into in the Senate, why does the White House principle on climate change not apply to health insurance?

Let's focus on health first, and insurance second. I once again call upon the smoker-in-chief to break the habit.

Copyright (C) Long Lake LLC 2009

Financial Stocks Deteriorating

I recently warned that market watchers should watch JPM. It, BofA, and of course Citigroup have begun to roll over (Citi of course has indeed rolled over). (To a lesser degree, so has SPY.) This is dangerous in the setting of very wide spreads, which helped goose the stocks in their mammoth rallies this winter-summer. In the same manner, Markit's CMBX index has begun to break down.

A curent, thorough and relatively calm review of the bear case for stocks and the economy is found at the site of Comstock Funds (short-sellers) in Why We Remain Bearish.

The intermediate and long-term gold charts show more underlying strength. Bloodied bulls who fundamentally "believe" in gold as the one monetary asset not based on debt can console themselves with the knowledge that typically long-term bull markets have relatively slow and relatively steady uptrends (excluding blastoff phases when beginning) and short, sharp sell-offs. Stocks are tired and steadily losing momentum, having rallied to resistance; gold is undergoing profit-taking and aggressive short-selling.

Nothing, of course, "has to be", and the current times are without precedent, as may be the amount of market manipulation. So investors and traders are both advised to be more humble than usual.

Also relevant is the advice:

Illegitimi non carborundum.

Copyright (C) Long Lake LLC 2009

Focus on the Trade-Weighted Dollar Index, not the DXY

Much is made of the weakness of the Euro and perhaps the yen vs. the dollar. OK, these are frail currencies.

So the DXY artificial, limited dollar index is rising. Reflexively perhaps, gold and stocks have fallen today. However, the real world has currencies to exchange in trade in goods and services. The St. Louis Fed keeps track of the broad, trade-weighted index. The nearby chart shows this visually (click on it for greater detail).

There has been NO rebound in the dollar as a currency when measured in terms of trade balances. It remains a flawed currency with dangerous fiscal policies and a Fed whose balance sheet contains an unknown quantity of impaired assets.

The zero interest-rate policy is suppressing value of the dollar where it counts, in trade. This is one of the sources of the fake boom/boomlet now underway that economists/personalities such as Larry Kudlow tout and serious players such as ECRI point out.

The downside of all this is price inflation. It's a classic trade-off. Now that the trade-weighted dollar index is around 100, where it was 2 years ago, recall what inflation was doing 2 years ago. Gold was surging to hit above $1000/ounce in March 2008; it is only up another about 10% since then despite all the financial chaos and money-printing.

If the economy has actually turned and employment is going to finally rise significantly (something not noticed by ordinary workers per the Gallup.com poll as recently as today's report), price inflation is going to far exceed interest rates paid by money market funds or most bank accounts. This will lead to more and more speculation in financial instruments. Only tight regulation (absent) and/or much higher real interests is likely to prevent said speculation.

The speculation here is that precious metals will be a beneficiary of price inflation that exceeds prevailing short-term interest rates, and that should inflation equal or exceed the 5-10 year Treasury interest rate, all heck could break loose, including new records in a variety of commodities.

Copyright (C) Long Lake LLC 2009

Obama on Health Financing: It's My Way Or I'll Bankrupt the Government

In an astonishing assertion, the President says that if whatever deal Congress can cobble together on health care financing is so vital that the Federal Government will spend more money than it can tax, print or borrow on healthcare rather than adjust expenditures to avoid bankruptcy:

President Obama said in an interview with ABC News' Charles Gibson today that if Congress fails to pass health care legislation that lowers costs, the federal government "will go bankrupt."

He also painted a gloomy picture resulting from the failure of health care overhaul.

"Anybody who says that they are concerned about deficit, concerned about debt, concerned about loading up taxes on future generations, you have to be supportive of this health care bill because if we don't do this, nobody argues with the fact that health care costs are going to consume the entire federal budget," the president said.

http://abcnews.go.com/Politics/HealthCare/health-care-reform-senate-joe-lieberman-ben-nelson/story?id=9351342

This is a version of "my way or the highway". It's childish, irresponsible and illogical. The Government can control its own spending on anything except interest and principal on direct obligations of the Federal Government. Everything else is elective.

The more the polls go south on the current deal, which has for now devolved into a handout to insurance companies (!) as well as Big Pharma, the more histrionic the President gets-- and he was over the top this summer, arguing against doctors who took out childrens' tonsils and took off limbs from diabetics simply to make more money.

This is the wrong way to pass something as important as healthcare "reform".

Copyright (C) Long Lake LLC 2009