Archive for October, 2009

Something doesn’t add up

Now, look, I do know that these Nigerian email scam letters are not supposed to take in anyone with a brain. There have been some fairly clever ones recently, but nothing that was even remotely tempting.

But I saw this, and I had to say something about it.   Here’s the letter:

Dear Mr. Jones

I am Tijani Sorji a solicitor at law. I am the personal attorney to Mr. Mark Jones a national of your country, who used to work with Shell – development company in Nigeria. Here in after shall be referred to as my client.

On the 21st of April 1999, my client, his wife and their three children were involved in a car accident along sagbama express road. All occupants of the vehicle unfortunately lost their lives. Since then I have made several enquiries to your embassy to locate any of my clients extended relatives.

After these several unsuccessful attempts, I decided to track his last name over the Internet, to locate any member of his family hence I contacted you.

I have contacted you to assist in repatriating the money and property left behind by my client before they get confiscated or declared unserviceable by the bank where this huge deposits were lodged. Particularly, the finance company where the deceased had an account valued at about USD$5.2 million dollars has issued me a notice to provide the next of kin or have the account confiscated within the next ten official working days.

Since I have been unsuccessful in locating the the relatives for over 2 years now I seek your consent to present you as the next of kin of the deceased since you have the same last name so that the proceeds of this account valued at USD5.2 million dollars can be paid to you and then you and me can share the money. 60% to me and 40% to you I have all necessary legal documents that can be used to back up any claim we may make. All I require is your honest cooperation to enable us see this deal through.

I guarantee that this will be executed under a legitimate arrangement that will protect you from any breach of the law. Please get in touch with me by my email and send to me your telephone and fax numbers to enable us discuss further about this transaction.

Best regards,  Barrister Tijani Sorji.

Okay, so pretty generic stuff.  But this time, something caught my eye.  Essentially, I’m being asked to lie about who I am so that I can get a bunch of money I have no right to.  The part that gets me is where he says all that is needed is my honest cooperation.

Just one more absurdity of the whole internet scam scene.

RateWatch October 28 – Sustainable? Depends on what you mean.

Markets: The bond market has reversed itself the last two days and is headed higher once again.  It has broken through a couple of lines of resistance and is now trading at what my sources say is “an unsustainable level”.  More on that below.  Current levels on the FNMA bond correspond to 30-year fixed rates below 5%, though not very much below.  Still.

Analysis: What is the definition of “unsustainable”?  If you ask me, unsustainable means “you can’t keep doing this forever”.  These days, it seems to also mean “you can’t keep doing this for long enough to matter,” as when a football team grabs an early lead through fancy trick plays, but shortly runs out of those and cannot sustain the advantage.  It matters which we’re talking about, because the bond market certainly is in Unsustainable 1 territory, but not – again, just as clearly – in Unsustainable 2 territory.  We know this because we’ve been here before.

So we’re here, and we’re here long enough to matter, IF.  It is absolutely true that most lenders (and this is especially true with the new federal babysitting regulations) cannot react fast enough to help you take advantage of rates that will be abnormally low for only a few hours.  It is also true, however, that some lenders can, and the number that have that capability can be increased by your timely action.  DO NOT WAIT FOR RATES TO HIT YOUR TARGET ZONE BEFORE YOU START TALKING TO YOUR LENDER.  That’s not going to work, people.  For most, a couple of hours is just not enough time to get all the documents whizzed back and forth before a lock becomes possible, not with rates moving with this kind of volatility.

Since I already used the running analogy last time, let me use a hunting one here.  If you think you’re going to get the perfect shot on a deer by waiting for the deer to get in the right area, then going in after it, you’re crazy.  The way to make sure of a good shot is to get there first and wait.  Similarly, the way to make sure you get the rate you want – and 15-year rates are in the very low 4s right now, for instance, with 5-year ARMs in the mid 3% range – is to get your documentation together and go over it with your lender BEFORE you need to shoot.  That gives you the very best possible chance to get exactly what you want.

These days, a couple of extra days is a godsend.  Get moving now, and give yourself a break.


RateWatch – Clouds Gather

Markets: We’re down 12bps (.12%) on the day on the FNMA 4.5% bond, which is the benchmark for interest rates at the moment.  That’s down about 100bps (1%) from its high of last Thursday.  It is, however, a good bit higher than it was earlier today, so we’re seeing a sort of rally into the FOMC minutes that will be released at 2pm EDT.  The Dow is threatening 10,000 again.  This is translating to rates at 5%, plus or minus a fraction.

Analysis: This is not going to be easy to say, and will likely not make me popular.  Nevertheless, it has to be said, I think.  We’re in trouble.  This economy is in serious trouble.  Lasting, probably permanent, possibly fatal trouble.

The trouble is not coming from the usual sources.  It has very little to do with unemployment, or with productivity, or with declining innovation among US firms.  It has to do with the complete abandonment of fiscally-sound policy by the federal government, which is leading to the destruction of the dollar.

A friend of mine asked me the other day why, if the government is printing trillions of dollars to finance the national debt and keep the payrolls fat, we’re not seeing inflation.  I told him that we were.  It’s not showing up in the Consumer Price Index yet (though it eventually will), but that’s because the CPI measures only price increases.  There is another way for inflation to express itself, and that is in the decline of the value of the currency against international standards, like the price of gold or oil, or the value of other currencies, all of which are spiking.  There is no consumer pressure on prices because a) nobody is borrowing money to spend, because they can’t get loans b) nobody has any liquid savings, so no spending can come from reserves and c) banks are holding on to cash instead of lending it, because right now, who is a good credit risk?  Anyone?  Much better to fatten the balance sheet to prevent your institution from being taken over by the FDIC.

We got in debt as a people, then our government got into debt over what it could handle, now we’re trying to get out of debt by borrowing or printing money.  A child could see that this won’t work.  What is required is discipline and sacrifice.  Unfortunately, discipline and sacrifice are hallmarks of a bygone age.  Unless we recapture it, we’re in for a hard time.  This is only the front porch of the house of horrors, if we don’t shape up.

Advice: Don’t borrow money for anything that does not appreciate in value (education and land, pretty much).  Shed your debt as quickly as you can, including your home loan.  Learn valuable, off-grid skills like how to grow carrots and raise chickens.  And pray very hard.


On the Wildcat…

This is the fourth in an occasional series called A Series of Short Takes, on topics of current interest.  Unlike almost all of these posts, this one has nothing to do with religion or politics.  Instead, it deals with an even more incendiary topic – professional football.  You have been warned.

The hottest new trend in pro football is a really odd one, as it is essentially the re-introduction of the earliest offensive sets – the option attack out of the single or double wing.  A bit of background, for the unaware: the “pro-set” offense is the quarterback under center, with two backs in the backfield, split either side (split backs) or lined up behind one another (power I).  The wildcat formation, however, is almost always set up with a non-specialized quarterback (usually a running back or a wide receiver) in the shotgun, and running backs of various quantities scattered all over the backfield.  The “quarterback” then takes the snap and executes the triple option: run with the ball himself, hand the ball (or pitch out) to another runner, or throw it.

Long a staple of college offenses (Tim Tebow his freshman year was essentially a wildcat runner), this attack has made its way onto the pros, though it is still being treated with some contempt by certain commentators as a “gimmick” that will fade.  I don’t think so.  Here is why.

1. Option sets require a completely different set of reads than standard pro-set offenses. Most defensive ends in pro football are rush ends or run ends; to be both is uncommon. Wildcat formations on passing downs therefore engage weaker defensive personnel in a completely unfamiliar situation.

2. Wildcat formations add one more offensive threat on running plays. Ordinarily, the QB is just a messenger – often for both teams – as his job is to hand the ball off, and that’s it. If he’s good, he can often maintain the illusion that he still has the ball, and draw a moment’s hesitation from the defense. If he’s not Peyton Manning, he can’t, and the defense knows that’s one player they don’t have to account for. Thus it’s 11-on-10 for the defense. The wildcat, however, eliminates this advantage. The “quarterback” now is a running threat, evening the numbers. He is almost ALWAYS good at this particular ball fake, which means that the defense has hesitation, period. This is a fractional advantage for the offense, but fractional advantages can produce large gains.

3. Option QB’s employed in this formation – Pat White of Miami comes to mind – are even harder to deal with. White is FAST. He has WR speed. He also has a potent (if inaccurate) arm. Thus with White in the formation at QB, ALL of the possibilities have to be accounted for, pass and run. Again, it’s an incremental advantage for the offense.

4. Against defenses that have learned how to react to the wildcat by stuffing the box, often the formation includes the starting QB in the slot. If the defense sets up 8 or 9 in the box, the starting QB slides over and takes the snap, and now you have Braylon Edwards in man coverage on the outside.

5.  Most obviously, even absent all trickery and deception, the wildcat adds a blocker to the offensive side.  Instead of a useless bystander, the quarterback can either be a blocker or a runner, freeing up one of the other backs to block.  It adds one more body at the point of attack.  That alone is a significant advantage.

Short of it is, the wildcat is not a gimmick, in my opinion. I think it is a relatively permanent advantage to the offense. It will not win you championships all by itself, but it will give you small advantages in key situations. Small advantages are all you’re looking for. In the NFL, it’s all you can expect. If you can get the defense to cover one of your wideouts with a linebacker a couple times a game, then you can do some serious damage (see Collie, Austin, Colts vs. Titans, Oct. 11 2009). If you’re Miami, it can mean the difference between 6-10 and 8-8 and the playoffs.

On the Nobel Peace Prize…

A few years ago, I was selected to be on the Board of the Lehi Area Chamber of Commerce. I sat on the Board for a year, spent a year as Vice Chair, then a year as Chairman of the Board.

Along about the same time I was elected President Elect Nominee of the Lehi Rotary Club. In due time I became the President, then spent a year on the Board as the Vice-President.

Also at roughly the same time I was elected Legislative District Chair for Utah’s Legislative District 56, in which post I served two years.

At the end of this, as I was stepping down from my last of these positions, I had a conversation with my wife about the things I was proud of having done, the honors I was proud of having gotten, and I told her that of all the things I had done and been over the last few years, the one I was most proud of was not being President of This or Chairman of That, but my selection as Journalist of the Decade for the Canadian Baseball League.

This bears somewhat on President Barack Obama’s being awarded the Nobel Peace Prize. For the uninitiated, the Prize is awarded by five Norwegians, three of them rather leftist, and two of them “centrist”, at least as the Europeans measure such things. Apparently the award was made unanimously. I don’t know; I wasn’t there.

But I do know something about awards. Little ones; I’m not so vain or naïve to think that my little service is anything like as important as the Presidency or the Nobel Peace Prize. Still, awards and elections come in two flavors, no matter how big they are.

No doubt – and I’m not asserting any different – being President of the Rotary Club or the Chamber of Commerce is much more important than being Journalist of the Decade for a simulated baseball league. But I wasn’t proud of being elected to be President of those organizations, because they came in flavor #1. Flavor #1 is “let’s elect him, he looks willing enough.” I was elected to those positions not because people respected me or loved me, but because there was work to do and I was willing to do it. Which meant, in turn, that the electors didn’t have to. That was what the Presidency was, once. There has to be a President, and I’m grateful I don’t have to be him. Obama wants the job, great, let him have it. Being the leader of a service club is like that, in that it is routinely more about being willing than about being popular, or even capable. I know firsthand.

But in the midst of all that work, I was given an award that was flavor #2: an acknowledgement that you did something really, really well. That meant a great deal to me. Nobody wanted anything from me when they gave me that award, I was voted by my peers and competitors and I earned it because I wrote really good stories. It was not so much an a-ward as a re-ward. And the Nobel Peace Prize used to be that kind of thing.

Last week, though, it seems to me that we completed a fascinating re-tasking of both the Presidency and the Peace Prize, in that each has now become the opposite flavor from what was the original intent. President Obama is president as a reward for being someone other than George Bush, John McCain, or Hillary Clinton. For generations, now, the presidency has morphed from a job you had to be crazy to want, to a job worth doing almost anything to get, from a job that began a journey, to a job that is a destination. You can be proud of being elected President, because it’s a reward for your willingness to endure a hellish process long enough to get the office, and you really don’t have to do anything at all once you’re installed.

And the Nobel Peace Prize? Well, by the awarders’ own admission, it is now not an acknowledgement of service rendered, but a bribe for future favors. It cannot possibly be given to President Obama based on any standard of achievement; he has no achievements of any stature. It is much like my election as President of the Rotary Club; the awarders are saying here, we’ll give you this, now go and do what we want done.

It diminishes both office and award to be bestowed so far from their original intent.

P.S. My advice to President Obama is to refuse the award (he can’t do this with nearly as great effect now, but last Friday he could have). Call a press conference and say, “I’m not going to accept an award I haven’t earned. I’ve been President less than one year, during which I’ve started a lot of things, but finished nothing. If you want to consider me for this honor, call me in 2016, and we’ll see what qualifications I have then.”

All parties, of whatever stripe, would have admired that move and it might have signaled the end of Kiddie Hour on the international stage. Alas.