It's all over

It's all over.

The 2008 US Presidential race, that is.

Who would have thought that the good ship SS McCain would be sunk by a torpedo fired in 1977 by Jimmy Carter?

That's what happened when the Carter administration initiated Community Reinvestment Act, supercharged by Clinton's further deregulation, reached the only outcome it ever could, bringing down some of Wall Street's biggest names along the way.

There's a Republican in the White House and the buck stops with him, as Harry Truman would say and the American voter would agree.

As I pointed out the other day, barring a major scandal Barack Obama will be the next president of the United States.

Check out the current opinion polls and betting market.

Gallup (Obama 50-42)



Rasmussen (Obama 50-45)



Betfair



The real threat to the US lies not only in the inevitability of an Obama presidency but also in the fact that with such a sentiment sweeping the nation the Democratic Party may pick up the required number of Senate seats to be able to ram through any legislation they want.

And then we'll really see the US economy tank.

Unfortunately, we'll all pay the price.

(Nothing Follows)

Regulation - not Deregulation - caused financial crisis

The current financial 'crisis', which I refer to as a 'perturbation', was caused by compassionate policies aimed at achieving higher housing affordability for low income workers.

As the video below shows, the legislation was originally introduced in the Carter administration and had an almost immediate effect of starting the housing bubble that was eventually going to pop and nearly bring everything else down with it.



Dennis Prager has a nice line that the problems with liberal policy is that it places compassion above standards.

Here is a classic example of the sound standards of work, savings history and deposit being thrown out the window in an effort to improve people's lives.

The video describes the result as 'cruel'.

I wouldn't use that term.

'Unwise' is a better description, though it doesn't matter what you call it - every mortgage owner in the world is going to pay the price.

(Nothing Follows)

Sunday night rock 'n' roll

Red Hot Chili Peppers are an American rock band formed in Los Angeles, California, in 1983. For most of its existence, the band has consisted of vocalist Anthony Kiedis, guitarist John Frusciante, bassist Michael "Flea" Balzary, and drummer Chad Smith. The band's varied musical style has fused traditional rock and funk with various elements of heavy metal, punk rock and psychedelic rock.

In addition to Kiedis and Flea, the group originally featured guitarist Hillel Slovak and drummer Jack Irons. However, Slovak died of a heroin overdose in 1988, resulting in Irons resigning. Irons was replaced briefly by former Dead Kennedys drummer D. H. Peligro before the band found a permanent replacement in Smith, while Slovak was replaced by up-and-coming guitarist Frusciante. This lineup recorded the band's fourth and fifth albums, Mother's Milk (1989) and Blood Sugar Sex Magik (1991).

Blood Sugar Sex Magik was a critical success and sold over twelve million copies. However, Frusciante grew uncomfortable with the band's success, leaving abruptly in 1992. Kiedis, Flea, and Smith employed Dave Navarro of Jane's Addiction for their subsequent album, One Hot Minute (1995). However, it failed to match the critical acclaim of Blood Sugar Sex Magik and sold fewer than half the copies of its predecessor. Shortly afterwards, Navarro was fired from the band due to creative differences.

Frusciante, during his time away from the band in 1998, completed rehabilitation, rejoining the band at Flea's request. The reunited foursome returned to the studio to record Californication (1999), which went on to sell fifteen million units worldwide, becoming their most successful album to date. It was followed three years later with By the Way (2002), which continued their success. In 2006, the group released the double album Stadium Arcadium. The band has won six Grammy Awards. They have sold over fifty million albums worldwide, have had seven singles in the Top 40 of the Billboard Hot 100 (including three singles in the Top 10), have had five #1 singles on the Mainstream Rock charts, and a record eleven #1 singles on the Modern Rock charts.

Higher Ground



Californication



Can't Stop



(Nothing Follows)

Mr Obama, Mr President

There is little doubt that John McCain is the better candidate for president in 2008.

However, there's no point listing his superiority over Barack Obama in terms of experience, competence and knowledge.

There's no point analysing McCain's superior ideology, founded in the greatness of the United States, with Obama's Eurocentric 'global citizen' philosophy.

There's no point reading the conservative commentators who accurately distill the issues in this election into informative and entertaining columns in order to sway people's opinions.

There's no point trying to work out who won the presidential debate; McCain was expected to win easily, landing a knockout blow on his inexperienced interlocutor. It didn't happen, which only serves to strengthen Obama's position.

There's no point highlighting Youtube videos of Barack Obama blathering on like a man trying to win a stammering competition. The general view is that he is a terrific speaker; people don't care that he needs a teleprompter.

There's no point analysing the root causes of the financial market crisis and quite rightly demonstrating that the majority of the blame rests with Democrats and, especially, senior Democrats such as Barney Frank who resisted George W Bush's and John McCain's attempts to tighten regulations around Freddy and Fanny. There's a Republican president and therefore he takes the blame. Remember Harry S. Truman's aphorism - "the buck stops here".

The current Betfair market is as follows:

$1.51 Barack Obama
$3.00 John McCain

With only six weeks until the election this is an impossible advantage to overcome barring a huge scandal from the Obama campaign.

It makes me think that the polls showing Obama with a 6-7 point lead such as the latest from Gallup are correct.

If Obama makes any mistakes then they will be papered over by a mainstream media that is so deeply in the tank for him that they need SCUBA gear. Naturally, any mistakes from the McCain/Palin team, no matter how trivial, will be blown out of all proportion in the media.

We had a similar situation here in Australia at the last federal election that saw a change of government when the media embarrassed itself with its support for now prime minister Kevin Rudd and failed in its duty to provide balanced, apolitical reporting.

Using the Realclearpolitics' electoral map tool and having a look at how the race will end up I come up with the following as the result of the election.



I can't see any way for John McCain to win this election. He has too much baggage to overcome.

Therefore, Barack Obama will be elected as the United States' 44th president on November 4.

President Obama.

Get used to it.

(Nothing Follows)

What is more important in the 2008 US election?

What is more important?

The scar on John McCain's face or the Rezko scar on Barack Obama's reputation?

John McCain's attempt to strengthen the oversight of Fannie and Freddy or Barack Obama's status as second largest recipient of political donations from them?

The number of houses John McCain owns (that were purchased with Cindy's and his own money) or the source of finance for Barack Obama's house?

John McCain's long history in support of free speech or the Obama campaign's frequent attempts to use the law to shut down their political opponents?

John McCain's 'reform' or Barack Obama's 'change'?

John McCain's desire to see a market bail out not paid for by taxpayers or the Democratic Party leadership's attempt to attach pork to the bill that would not only see shale oil drilling continue to be banned but give hundreds of millions of dollars to ACORN?

What is more important?

The real mother of Sarah Palin's Down Syndrome child or Barack Obama's friendship with terrorists Bill Ayres and Bernadine Dohrn?

Sarah Palin having Trig when he was prenatally diagnosed with Down Syndrome or Barack Obama's support of partial birth abortion?

Sarah Palin originally being for the Bridge to Nowhere or Sarah Palin killing the Bridge to Nowhere when the full scale of the corruption became apparent to her?

Sarah Palin being a heartbeat away from the presidency or Joe Biden being an impeachment away from the presidency?

(Nothing Follows)

Fannie and Freddy caused by Democrats and will help Obama win

While this video is factual I do not believe that even if every voter in the country knew its contents that it would alter the outcome of the upcoming election one iota.



I think that the electorate has stopped listening. All Barack Obama has to do is run a disciplined campaign from here on in and he will win - though he might want to muzzle the embarrassment that is his VP pick until after November 4.

You can see from the betting graph that Obama has a big lead, which has increased due to recent poor economic news. Opinion polls may tell one story but money always seems to be the strongest indicator of performance.



The irony is that voters will be electing the party that caused the mess in the first place.

(Nothing Follows)

Financial market graphs back to 1950

It's interesting to see that the downturn after the Dot Com boom and September 11 was much deeper than what has happened recently.

If confidence can return to the market, backed by loan facilities supported by the government, then you'd expect things to improve.

S&P - 2 years



S&P - 5 years



S&P - from 1950

(Nothing Follows)

Nostradamus 1999 - Freddy and Fannie

From September 30, 1999, comes this piece by Steven A Holmes in the New York Times:

Fannie Mae Eases Credit To Aid Mortgage Lending

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.

Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.

The goal of the Clinton administration was to make loans more accessible to minority groups who could not otherwise get affordable credit.

A laudable goal you might think.

However, the research showing racial bias in home lending was later debunked completely but, of course, the changes stayed and now the world is in a mild financial mess.

I use the term 'mild' because that's what it is, at this point anyway. If things don't get worse then the result is to simply set market values back a couple of years. Press the play button for five years and the market will be much higher than before the recent perturbation.

I made a point in a recent comment about the best description of how Fannie and Freddy got into the current mess, which is that it's akin to telling someone that they can go and gamble in Las Vegas and that their losses will be covered but that they can keep their winnings. It simply must lead to more risky behaviour.

The market always understood that Fannie and Freddy were government backed so their management were in an all care, no responsibility position.

President Bush and John McCain have both attempted to reduce the risk to taxpayers of exactly the type of failure that we now see but were thwarted by Democrats, for whom Fannie and Freddy are a source of post-political jobs as well as large campaign donations, and a handful of Republicans who had also been corrupted by the large amount of money to be had from those organisations.

I prefer to let the markets work but if there's no liquidity then there's no market.

There's another point that is being somewhat overlooked, which is that millions and millions of people have benefited from the access they've had to 'easy' credit in order to purchase a home. The majority of those will retain their homes and continue to make payments.

The usual suspects on the left are talking about the meltdown being an example of the failure of capitalism.

No surprise there.

In their usual ignore-the-good-news manner they completely ignore the fact that emerging economies - China, India, Brazil etc - have had access to much more capital since deregulation in the 1980s than they would have through the traditional source of the World Bank, which has led to improved living standards for hundreds of millions of people.

(Nothing Follows)

Australia's left does not understand either the US or the world

In one short opinion piece in Melbourne's The Age newspaper Bruce Grant, author and former diplomat, demonstrates how out of touch with reality the left in Australia has become.

Grant's proposition is that it is Australia that is now showing the United States the way rather than the other way around.

My own view is that the English-speaking-world shows the rest of the world the way forward.

IT'S a strange feeling, while watching the elections in the United States, to realise that the US is trailing Australia in important respects. America has been for so long the fountain of all that is "new" that to think of it being behind the times, especially as set on this side of the Pacific, requires a wrench of the imagination.

But Australia is out of Iraq and has signed the Kyoto Protocol on climate change, on both of which the US is still undecided. And this is just the tip of the iceberg. The next president confronts a lengthy list of things to do to catch up with the contemporary world.

It is truly shameful that Australia has withdrawn any of its soldiers from Iraq at a time when the surge has undeniably worked, the government is getting its act together and the country is getting back on its feet. Australia actually signed the Kyoto Protocol when it was first drawn up - more than 10 years ago - but did not ratify it for two very good reasons: it seriously affected our economy; and it achieved absolutely no good outcome at a cost of trillions of dollars. Grant also fails to let his readers know that the United States Senate voted against ratification of the Kyoto Protocol while Bill Clinton was president by a whopping 95-0.

He will need to revisit US opposition to the International Criminal Court, a ban on anti-personnel landmines, a treaty on bio-diversity and a verification mechanism for the Biological Weapons Control Treaty. The US is also yet to ratify the Comprehensive Test Ban Treaty and persists with an anti-ballistic missile system.

The reason that the US opposes the International Criminal Court is simple; it would allow bad state actors to take action against the US even when it is using its armed forces in humanitarian roles (which actually comprises the majority of its overseas engagements). The US is the most powerful nation in the world and has a moral duty to ensure that people who can't defend themselves are supported, an achievement completely unable to be achieved by Grant's so-called "contemporary world" be it the EU, the UN or any individual nation.

It seems to be still imbued with the old-fashioned idea that unilateral military power is the way to get things done and that peace-keeping is for wimps. It spends as much on defence as the next 10 highest spending countries. It is rare for armed forces to be stationed in another country, yet the US has its forces in about 60 countries. Its air force and navy patrol the globe and it has the most advanced satellite technology for gathering intelligence. Moreover, it has more nuclear weapons than any one else.

No country spends more time and effort in trying to keep the peace than the United States. As JFK put it in his famous inaugural speech, "Let every nation know... that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the survival and the success of liberty" and "For only when our arms are sufficient beyond doubt can we be certain beyond doubt that they will never be employed".

I'm sure that US taxpayers would be thrilled that they could scale back their military and do what Western European nations did after World War II - reduce their military spending and build up their social programs secure in the knowledge that they had a protector in the United States keeping them safe.

The American way of life is not the beacon it once was for the rest of the world. The US economy is not coping well with rising fuel costs and home loan mortgages, let alone the more substantial challenges of climate change that the national political leadership has not yet tackled. The double deficits of government spending and import consumption have turned it into the world's biggest debtor nation. While we struggle in Australia to improve social welfare and hospital services, the US, advanced in technology, has yet to reach our level of access. It was a novelty when Julia Gillard discovered recently in New York an innovation in education she would like to follow.

If the American way of life is not the beacon it once was then why the heck do so many millions of people want to move there? The economy is coping just fine with the current Wall St woes, which in a few years will be but a distant memory as the market posts record after record. Why anyone would use the decrepit New York education system, beautifully uncovered by John Stossel as completely dysfunctional, is beyond me.

Even in the category of trivial pursuit, the US has slipped a little. It came second to China in the Olympic Games. Bollywood is becoming as outrageous as Hollywood. The richest person in the world is an Indian. China and the Gulf states are building the most striking architectural creations since the Empire State became the tallest building in the world in the early 1930s.

Let me get this straight. Grant is saying that the United States is not the world leader but then compares other country's achievements to the United States, which those countries have looked to for inspiration?

When the Cold War ended nearly 20 years ago, the US seemed to have the world at its feet. It chose to interpret its victory, however, in a way that recently has stressed the military component of the Cold War, not the ideological battle for "hearts and minds".

From a military perspective, we can argue about when the Cold War ended — 1990 when the two sides declared themselves no longer to be enemies, or 1991, when the Warsaw Pact was formally disbanded. But for most people it was on 9 November, 1989, when the Berlin Wall was breached. The wall was not erected in 1961 in response to military pressure. It was built to stop East Germans from escaping to the good life in West Germany. Nor did it collapse in response to military pressure. It was breached when it failed to stop East Germans from getting to West Germany through Hungary and Czechoslovakia.

Jesus wept. For a diplomat he has an unbelievable knowledge of history...

From this perspective, Pope John Paul ll was a catalyst for the end of the Cold War, as were Lech Walesa, Vaclav Havel and many others. It was arguably opposition to the system from within, armed with the authority of the Helsinki Accords and using human rights to erode state power, that brought the Soviet Union to an end, rather than cruise missiles and nuclear warheads.

The left simply cannot bring itself to say that Ronald Reagan and Margaret Thatcher, along with Pope John Paul II, brought an end to the human travesty of the Soviet Union. No Reagan means no Welesa and no Havel. It's pretty simple.

Globalisation, released by the collapse of the bipolar world of the Cold War, gave the twin pistons of American supremacy, democracy and capitalism, a clear run. But it also undermined the authority of the nation state, ushering in an interactive era of interdependence. American political leadership has not yet adjusted to this.

Elections still bring out the old rhetoric of American "exceptionalism", which sets the US above and apart from the rest of us. The test of presidential character is not as global peacemaker but as commander-in-chief of the armed forces. So far in this election, there has been no discourse on the outstanding job of political leadership in the 21st century, which is to make the new global system work. Indeed, I can think of only one recent example, when former president Bill Clinton said the US should use its power to create a global security system, so that when it was no longer powerful it would still be safe.

If the United States ever chooses to "retreat" to within its borders then the rest of the world will become a much more bloody, violent place.

Here again Australia is ahead. Much is made of the fact that the Australian Prime Minister speaks Mandarin. Not enough is made of his liking for middle power diplomacy, which contrasts the "realist" view of power politics with an "idealist" view, as defined by Walter Lippmann: "Ideals are an imaginative understanding of that which is desirable in that which is possible."

Australia's attitude to its friends and neighbours is sometimes a mystery, even to ourselves. I happened to be at a football match in Melbourne a few weeks ago when international teams paraded at halftime. There were cheers for China, India, Denmark, Sweden, Tonga, the Peace team … everyone. Except Britain. The old enemy. A robust burst of booing. And New Zealand. Boo. Then came the United States, late in the parade. What would be the great Australian reaction. Boo!

Does that mean we have accepted the Americans into our own world, whatever that is? I think it does. The first task of the Australian Prime Minister when the Americans decide their next president will be to take him aside and give him the benefit of our new way of thinking.

When do Australian Prime Ministers not talk straight with their foreign counterparts including the United States?

What Grant is saying is that our Prime Minister must lecture the next President on what we expect from him.

In that regard, we have absolutely the right PM for the job.

(Nothing Follows)

Sunday night rock 'n' roll

Neil Leslie Diamond (born January 24, 1941) is an American singer-songwriter and occasional actor.

Neil Diamond is one of pop music's most enduring and successful singer-songwriters. As a successful pop music performer, Diamond scored a number of hits worldwide in the 1960s, 1970s, and 1980s. Critic William Ruhlmann wrote of Diamond, "As of 2001, he claimed worldwide record sales of 115 million copies, and as of 2002 he was ranked third, behind only Elton John and Barbra Streisand, on the list of the most successful adult contemporary artists in the history of the Billboard chart." As of May 2005 Diamond had sold 120 million records worldwide[citation needed], including 48 million records in the U.S.

Though his record sales declined somewhat after the 1980s, Diamond continues to tour successfully, and maintains a very loyal following. Diamond's songs have been recorded by a vast array of performers from many different musical genres.

Diamond was inducted into the Songwriters Hall of Fame in 1984, and in 2000 received the Sammy Cahn Lifetime Achievement Award.

If you don't have Hot August Night in your collection then you're probably in the minority. It truly is one of the great live albums ever.

While people may know Neil Diamond as a great performer they may not be aware that he has also written major hits for other artists including The Monkees' I'm A Believer and A Little Bit Me, A Little Bit You (both of which went to #1 on Billboard), as well as having bands do covers of his songs that became bigger hits than he had with them such as UB40's Red Red Wine.

Crunchy Granola Suite



Love On The Rocks



Solitary Man



Song Sung Blue

(Nothing Follows)

Vostock ice core shows reality of climate history

From the excellent Jeff Id's The Air Vent blog comes the following two graphs:

Temperature reconstruction from the Vostock ice core:



The last 15,000 years

Dunno about you but that's so frightening that I'm going to build a survival shelter and start stocking it up now. There can't be much time left.

What really is scary, though, is the grip on the public psyche that the promoters of the lie of anthropogenic global warming have.

As I've said before, when the answer is socialism then you'd better have a really good look at the problem.

(Nothing Follows)

Can Obama fool all of the people all of the time?

The say that you can fool some of the people all of the time and all of the people some of the time but not all of the people all of the time.

Is that true?

Can you fool some of the people all of the time?



Can you fool all of the people some of the time?



But can you fool all of the people all of the time?



I thought so...



(Nothing Follows)

Barack Obama and Racism

Daniel Johnson in The New York Sun has a great article about the heads-I-win-tails-you-lose situation that American voters are in.

The only reason that Barack Obama can not win the presidency is due to racism.

The only reason.

America will be harshly judged if McCain wins.

Because, of course, America is not harshly judged now.

Are American voters susceptible to blackmail? Ever since Sarah Palin lifted John McCain's campaign, it is becoming increasingly clear that America will be branded racist if Europe does not wake up on November 5 to find that Barack Obama has been elected.

Here is what Jonathan Freedland of the Guardian had to say last week: "If [the election] is deemed to have been about race — that Obama was rejected because of his colour — the world's verdict will be harsh."

His view is that the anti-Americanism that has demonized President Bush will be as nothing to the global wrath that will greet a McCain presidency. "Suddenly Europeans and others will conclude that their dispute is with not only one ruling clique, but Americans themselves."

Such self-fulfilling prophecies are to be heard at all the most elegant dinner tables in London. This week's crash on Wall Street is already evoking a new round of gloating among those who always wanted to believe that the free market was ultimately doomed.

Now both American democracy and American capitalism are on trial in the court of European public opinion. And the only plea that the court will accept from America is: guilty.

Let's parse the supposed logic of the media elites and Euro-left.

1) If Barack Obama does not win then it is due to racism.
2) Republican voters are never going to vote for Mr Obama because he's a Democrat
3) Blacks in America are voting for Mr Obama at a 9:1 rate over John McCain
4) Therefore, the only way that Barack Obama can lose and thus prove that America is a racist country is if white Democratic Party and Independent voters do not vote for him.

Get that?

It's the Democratic Party's and Independents' white voters who will determine whether America is a racist country.

Republican voters could care less about the colour of a candidate's skin. They care about the content of their character and values held.

The left has long been the gathering place for racism and the horrible policies that have negatively affected black Americans.

But Republicans will still get the blame for the United States being a racist nation on November 5 if McCain wins the election.

(Nothing Follows)

Steve McIntyre on Consensus

Climateaudit's Steve McIntyre has built a solid reputation for accuracy and honesty in his analysis of the science underpinning climate change. He is probably the world's leading expert on the unscientific methods employed by Mann et al in the creation of one of the IPCC's and the Climate Faithfuls' most treasured weapons - the Hokey Stick.

He is someone who is very wary of claims of consensus.

But that would be because he's a real scientist that holds true to the belief that all scientists should be skeptics.

He is also someone who corrects errors - on the record - when they are pointed out to him, which makes him the polar opposite to those who work in the field of climate science.

But that's because he's a real scientist.

In this post he highlights the fact that consensus hasn't served the shareholders of Bre-X, Enron or Lehmann Bros very well at all.

My interest in climate change derived in part from experience in the stock market where "consensus" is not infrequently established in favor of opinions that are completely incorrect. And, in many cases, the people promoting the views are competent and serious people. How are such things possible? I read about the Bre-X and Enron failures, trying to distinguish between the "shame on you" and the "shame on me" components - i.e. yes, the original misconduct and deceit was deplorable; but at what point should proper independent due diligence have been able to detect misconduct? At what point were regulatory agencies negligent? Obviously we're going to see a new spate of such inquiries in the wake of the recent collapses.

I was particularly intrigued in the cases of Bre-X and Enron failures by the tremendous acolades meted out to the promoters right up to the eve of their collapses.

As evidence of this ongoing interest, a reflection on Bre-X was one of the very first Climate Audit posts (Feb 6, 2005). I observed that Felderhof and de Guzman were lionized at the 1997 PDA convention (March 10-16, 1997) and walked around like royalty only a few days before the fraud was revealed. de Guzman literally disappeared a few days later, supposedly either jumping or being pushed from a plane over the Indonesian jungle. Others speculate that he may have assumed a new identity in a Third World barrio somewhere. The "consensus" disappeared quickly. Take a look at the post.

In another early post, I observed the "consensus" that Enron was not only a well-managed company, but the most outstandingly managed company in the U.S., citing a couple of quotes from Kurt Eichenwald's Conspiracy of Fools:

The next morning just after ten, Skilling stood beside Lay as a photographer snapped their pictures for an article in Fortune. They were more than happy to participate; already that year, in its annual rankings, Fortune had hailed Enron as America's best-managed company, knocking General Electric from the number-one perch. (p.227)
…
After months of effort, Karen Denne from Enron's public relations office landed the big fish: CFO magazine had selected Fastow as one of the year's best chief financial officers. (p. 260)"
…
Lay opened his briefcase and pulled out the latest issue of CFO magazine, glacing at the cover. The Finest in Finance. Lay smiled to himself. He found the table of contents, looking for Fastow's name. Beneath it were the words: How Enron financed its amazing transformation from pipelines to piping hot. Lay turned to the article, "When Andrew S Fastow, the 37-year old CFO of Enron Corp. boasts that "our story is one of a kind' he's not kidding" it began". Fastow was obviously as creative and sharp as Lay and Enron's board of directors had come to believe" (p. 267)

Turning now to Lehman Bros. I looked quickly at their website this morning, which reports that in the last two years, Lehman Bros has been ranked #1 by both Barron's and Fortune:

2006 - Ranks #1 in the Barron's 500 annual survey of corporate performance for the largest companies in the U.S. and Canada.

2007 - Lehman Brothers ranks #1 "Most Admired Securities Firm" by Fortune.

One more example of "consensus".

I don't want readers to start piling on with accusations or making uninformed comparisons of climate change to these corporate failures. For once, I want to be able to be nuanced statements without provoking a lot of piling on. I personally am unimpressed by "consensus", especially when there is no independent due diligence. That doesn't mean that I'm impressed by "skeptic" proposals either (BTW).

One of the curious aspects to Enron's rise to prominence is that nobody understood how they actually made money. That's one of the reasons why I'm so adamant about wanting clear A-to-B explanations of how doubled CO2 leads to 3 or more deg C and why excuses for not providing such explanations are so disappointing. I believe that forcing oneself to provide such an explanation would be very healthy for the AGW community.

In passing, recall that Enron had an early interest in climate change policy. I was prudent enough to save a pdf of their policy position, which I reported on a couple of years ago.

Lehman Bros also seem to have been actively interested in climate change, producing a couple of reports, most recently here dated Sept 2007. In their acknowledgements, they thank James Hansen for clearing up some "questions that had been niggling us":

On the scientific side, we are grateful to Dr. James Hansen, Director of the NASA Goddard Institute for Space Studies, who, at the end of a particularly informative dinner hosted by Ben Cotton of the Man Group, gave generously of his time to clear up a number of scientific questions that had been niggling us. Dr. Peter Collins and Richard Heap of the Royal Society provided valuable input and brought us up to date on the more controversial areas of scientific developments in the domain of global climate change.

In the summer and September of 2007, we also spent a lot of time trying to understand "questions that had been niggling us" - like what data set was used in GISTEMP, why Hansen changed the provenance of GISTEMP data sets, how GISTEMP adjustments were done and why. Hansen was notably uncooperative, even saying that he refused to "joust with jesters". Maybe we went about it the wrong way. Maybe we should have asked Lehman Bros to find out for us.

Consensus can come about in many ways.

It can come from government propaganda via state owned media.

I'm sure that all North Koreans really do think that the United States is a threat.

It can come from large, biased media entities such as the BBC, which takes a partisan position on climate change and ensures that opposing views are not heard.

The consensus view used to be that the world was flat.

The consensus view used to be that the sun revolved around the earth.

The consensus view used to be that CO2 was the primary driver of climate since the start of the Industrial Revolution.

Oops. I've got ahead of myself with that last one. Give it time and the statement will come to pass.

(Nothing Follows)

Conservative states more likely to provide military recruits

Here are two graphs that demonstrate the correlation between political affiliation and military enlistment.

Here's the current Realclearpolitics map of voting intention...

...and here's the map of military enlistment ratios...

Why is it that conservative states are more likely to be the source of military recruits than liberal states?

Liberals would say it's because you have to be stupid to both vote Republican or join the army a'la John Kerry.

Conservatives would say it's because they believe more strongly in defending their country.

Neither view reflects liberals in a particularly good light.

(Nothing Follows)

The problem with Sharia courts in Britain

The Times' recent article detailing the fact that Britain has Sharia courts that are operating not only in parallel to the official justice system but with the full support of the government and police was certainly an eye opener and yet another example of how far down the cultural toilet British society has traveled.

ISLAMIC law has been officially adopted in Britain, with sharia courts given powers to rule on Muslim civil cases.

The government has quietly sanctioned the powers for sharia judges to rule on cases ranging from divorce and financial disputes to those involving domestic violence.

Rulings issued by a network of five sharia courts are enforceable with the full power of the judicial system, through the county courts or High Court.

Previously, the rulings of sharia courts in Britain could not be enforced, and depended on voluntary compliance among Muslims.

It has now emerged that sharia courts with these powers have been set up in London, Birmingham, Bradford and Manchester with the network’s headquarters in Nuneaton, Warwickshire. Two more courts are being planned for Glasgow and Edinburgh.

Sheikh Faiz-ul-Aqtab Siddiqi, whose Muslim Arbitration Tribunal runs the courts, said he had taken advantage of a clause in the Arbitration Act 1996.

Under the act, the sharia courts are classified as arbitration tribunals. The rulings of arbitration tribunals are binding in law, provided that both parties in the dispute agree to give it the power to rule on their case.

Siddiqi said: “We realised that under the Arbitration Act we can make rulings which can be enforced by county and high courts. The act allows disputes to be resolved using alternatives like tribunals. This method is called alternative dispute resolution, which for Muslims is what the sharia courts are.”

The disclosure that Muslim courts have legal powers in Britain comes seven months after Rowan Williams, the Archbishop of Canterbury, was pilloried for suggesting that the establishment of sharia in the future “seems unavoidable” in Britain.

In July, the head of the judiciary, the lord chief justice, Lord Phillips, further stoked controversy when he said that sharia could be used to settle marital and financial disputes.

In fact, Muslim tribunal courts started passing sharia judgments in August 2007. They have dealt with more than 100 cases that range from Muslim divorce and inheritance to nuisance neighbours.

It has also emerged that tribunal courts have settled six cases of domestic violence between married couples, working in tandem with the police investigations.

Siddiqi said he expected the courts to handle a greater number of “smaller” criminal cases in coming years as more Muslim clients approach them. “All we are doing is regulating community affairs in these cases,” said Siddiqi, chairman of the governing council of the tribunal.

Jewish Beth Din courts operate under the same provision in the Arbitration Act and resolve civil cases, ranging from divorce to business disputes. They have existed in Britain for more than 100 years, and previously operated under a precursor to the act.

Politicians and church leaders expressed concerns that this could mark the beginnings of a “parallel legal system” based on sharia for some British Muslims.

Dominic Grieve, the shadow home secretary, said: “If it is true that these tribunals are passing binding decisions in the areas of family and criminal law, I would like to know which courts are enforcing them because I would consider such action unlawful. British law is absolute and must remain so.”

Douglas Murray, the director of the Centre for Social Cohesion, said: “I think it’s appalling. I don’t think arbitration that is done by sharia should ever be endorsed or enforced by the British state.”

There are concerns that women who agree to go to tribunal courts are getting worse deals because Islamic law favours men.

Siddiqi said that in a recent inheritance dispute handled by the court in Nuneaton, the estate of a Midlands man was divided between three daughters and two sons.

The judges on the panel gave the sons twice as much as the daughters, in accordance with sharia. Had the family gone to a normal British court, the daughters would have got equal amounts.

In the six cases of domestic violence, Siddiqi said the judges ordered the husbands to take anger management classes and mentoring from community elders. There was no further punishment.

In each case, the women subsequently withdrew the complaints they had lodged with the police and the police stopped their investigations.

Siddiqi said that in the domestic violence cases, the advantage was that marriages were saved and couples given a second chance.

Inayat Bunglawala, assistant secretary-general of the Muslim Council of Britain, said: “The MCB supports these tribunals. If the Jewish courts are allowed to flourish, so must the sharia ones.”

To the increasing number of narcissistic, define-your-own-values Britons such an occurrence might actually be seen as living proof of cultural sensitivity.

The reality is that the comparison with the Jewish courts falls down in one very important area - Britain is a country whose ideals and values are rooted in the Judeo-Christian values system.

They don't come from Hinduism, Buddhism, Scientology, Zoroastrianism or Islam.

Jews who use the Jewish courts do not see themselves as outside of society in the same way that so many Muslims do. They do not believe that their values system is more important than obeying British rules and being part of British culture.

Allowing Sharia courts to exist can only serve to ghettoise Muslim communities, as it provides yet another plank to support their separate existence within British society.

(Nothing Follows)

Sunday night rock and roll

Supertramp is a British progressive rock band that had a series of top-selling albums in the 1970s and early 1980s.

Their early music included ambitious concept albums, but they are best known for their later hits including "Dreamer", "Goodbye Stranger", "Give a Little Bit" and "The Logical Song". Supertramp attained superstardom in the United States, Canada, and most of Europe. However, they were not quite as popular in their home country, the UK. Nonetheless, the album Breakfast in America was still a big hit, reaching number three on the UK charts and featuring two top 10 singles.

Dreamer



The Logical Song



Breakfast in America



(Nothing Follows)

NYT covers Crime Of The Century

Can you imagine the outcry if the media savaging of Sarah Palin was being done to a Democrat rather than a Republican?

At least the jokes are improving, though.



(Nothing Follows)

Why is Europe held up as the ideal for the rest of the world?

Rather than regarding it as a fell hand that stifles innovation and competition leading to both reduced employment opportunities and standards of living, Europeans seem to think that government is the only instrument that can improve their lives.

The consequences of this attitude have been for left wing governments to implement policies that supposedly address 'justice' issues whether it's social justice, economic justice or a myriad of made up terms that ensure one group or another can be labeled as victims thus requiring government to come and save the day.

Around the world, left wing elites in the media, universities and activist organisations look to the Europeans for guidance on how to create a fair society. Perish the thought that we Aussies or those rambunctious Yanks are well ahead of Europe in the fair society stakes.

In the same way that modern day Marxists, be they environmentalists or university professors or whatever, make excuses for the catastrophic failing of their ideology in the Soviet Union, China, North Korea and Cuba etc, today's Europhiles praise that continent's lofty intention of equality and turn a blind eye to the rank failures of multiculturalism and socialist policies that have led to many nations significantly underachieving their potential.

Barack Obama does seem to be a Europhile.

He lauds Europeans' ability to speak more than one language (while not recognising that it is English that binds them together) and has called for a European style health system while ignoring the fact that the best health outcomes in the world are achieved in the United States. He ignores the fact that the so-called equality of Euro-health is a facade covering up long waiting times and rationed care meaning that the elderly, overweight and otherwise infirm actually receive a lower standard of care than does a sick 20 year old.

Ralph Reiland in the American Spectator calls him on it.

The top concern of voters this year is the economy, with 40 percent of respondents in a recent New York Times/CBS News poll rating the "economy and jobs" as their primary issue in the election and another 15 percent ranking the economic issues of "gas prices and energy policy" as their chief concern.

That combined total of 55 percent is more than double the 21 percent of respondents who ranked "terrorism and national security" as their chief concern.

The bad news for Republicans is that these surveyed voters said Barack Obama would be better than John McCain at handling the economy.

"Sixty-five percent of those surveyed said they were confident that Mr. Obama would make the right decisions on the economy, compared with 54 percent who expressed confidence that Mr. McCain would," reported the Times.

"Voters are more negative about the condition of the nation's economy in this election year than they have been at any time since 1992, when Bill Clinton unseated an incumbent president by running an 'it's the economy, stupid' campaign," reported the Times.

Moreover, nearly half of the poll's respondents said they expected Sen. McCain to continue the policies of President George Bush (while only 9 percent agreed that he should).

Obama, adding to the negativity about the economy in order to sell "change," regularly portrays the U.S. economy as in a state of near-collapse. "Economic disaster is already here," he declared at a recent campaign stop in Virginia.

In fact, the economy is not in a state of "disaster," and "change" in the wrong direction would only make things worse.

With high gas prices, for instance, the most likely consequence of Obama's calls for restrictions on drilling and higher taxes on oil companies would be less supply and even higher prices at the pump.


KEITH MARSDEN PROVIDES a more accurate and less-politicized description of the current condition of the American economy than the picture Obama paints at his rallies.

On the global level, Marsden, a senior economist at the International Labor Organization, a former economic adviser at the World Bank and a fellow at the Centre for Policy Studies, reports that "U.S. output has expanded faster than in most advanced economies over the eight years of George Bush's presidency."

More precisely, the latest Eurostat report from the European Commission regarding the change in economic growth in the second quarter of 2008 compared to the first quarter shows that the U.S. economy was up by 0.5 percent while the Euro zone taken as a whole declined by 0.2 percent. "It marked the first time since the early 1990s that GDP has fallen overall in the 15 countries that use the euro," reported the Wall Street Journal.

Moving in the opposite direction of the increase in growth in the U.S. economy, the percentage change in the growth rates in the second quarter of this year in Italy, France, Germany and Japan were universally negative at, respectively, -0.3, -0.3, -0.5, and -0.6 percent.

On income, the World Development Indications 2008 report from the World Bank shows national income per capita in the U.S. to now be approximately a third higher than in England, Germany or Japan.

Obama, arguing that the distribution of U.S. incomes is increasingly "unfair," is calling for redistribution by way of higher taxes at the top and more government subsidies at the bottom. In fact, the latest World Bank figures "show that the richest 20 percent of U.S. households had a 45.8 percent share of total income, similar to the levels in the U.K. (44.0 percent) and Israel (44.9 percent)," reports Marsden, while in "65 other countries the richest quintile had a larger share than in the United States."

With jobs, the U.S. unemployment rate averaged 4.7 percent from 2001 to 2007. "This compares with a 5.2 percent average rate during President Clinton's terms in office," reports Marsden, "and is well below the euro zone average of 8.3 percent since 2000."

Obama, pursuing "social justice," is calling for a euro-style economic strategy of more taxes, more protectionism, more unionism, and more regulations -- the exact formula of community organizing that's produced slow economic growth and high unemployment throughout Europe.

Failing multiculturalism. Sluggish economies. Climate Change nonsense. Inability to stand up to real evil in the world. Lack of will to defend themselves against Russian aggression?

Who the heck would want any of that?

(Nothing Follows)

Researching unreality

Now here is a classic example of researchers that have too much time on their hands...

Real-world behaviours and racial biases could carry forward into virtual worlds such as Second Life, social psychologists say.

According to a study that was conducted in There.com, virtual world avatars respond to social cues in the same ways that people do in the real world.

There.com is a relatively unstructured virtual world that brands itself as an online getaway where users can hang out with friends and explore an immense, unusual landscape.

Users, who were unaware that they were part of a psychological study, were approached by a researcher’s avatar for either a ‘foot-in-the-door’ (FITD) or ‘door-in-the-face’ (DITF) experiment.

The FITD technique works by first asking a participant to comply with a small request -– which, in this experiment, was “Can I take a screenshot of you?” -- followed by a moderate request: “Would you teleport to Duda Beach with me and let me take a screenshot of you?”

Participants who fulfilled the small request are expected to be likely to see himself or herself as being helpful, and thus be more likely to fulfil the subsequent larger request.

The DITF technique work works in an opposite way: the experimenter first makes an unreasonably large request to which the responder is expected to say no, followed by a more moderate request.

In the DITF condition, that large request was to have screenshots taken in 50 different locations, which would have required about two hours of teleporting and travelling.

As the researchers expected, DITF participants were found to be more likely to comply with the moderate request when it was preceded by the large request, than when the moderate request was presented alone.

But while results of the FITD experiment revealed no racial bias, the effect of the DITF technique was significantly reduced when the experimenter took the form of a dark-skinned avatar.

White avatars in the DITF experiment received about a 20 percent increase in compliance with the moderate request; however, the increase for the dark-toned avatars was 8 percent.

According to the researchers, skin colour had no effect on FITD experiments because the elicited psychological effect is related to how a person views himself or herself, and not others.

However, the DITF technique is said to reflect a psychological tendency to reciprocate the requester's ‘concession’ from a relatively unreasonable request to a more moderate request, and thus is affected by whether the requester is deemed worthy of impressing.

The finding is consistent with previous DITF studies -- in real and virtual worlds -- that demonstrate that physical characteristics, such as race, gender and physical attractiveness, affect judgment of others.

Numerous studies done in the real world show that people are more uncomfortable with minorities and are less likely to help them.

“This study suggests that interactions among strangers within the virtual world are very similar to interactions between strangers in the real world,” said Paul W. Eastwick, who conducted the study at the Northwestern University.

“You would think when you're wandering around this fantasyland … that you might behave differently,” he said. “But people exhibited the same type of behaviour -- and the same type of racial bias -- that they show in the real world all the time.”

Let me get this straight.

Researchers go into a virtual environment in which people from all over the world change their appearance (including gender) and they can infer a racial bias?

Is there any point to the research?

These people are nuts.

(Nothing Follows)