Tag: stimulus package

Getting $100,000,000 for fly fishing gear via the American Recovery and Reinvestment Act

freemoneyAll I had to do was ask, and I received. Here’s the allocation, just before passing.

I’ve already got all the gear I’ll probably ever need, so I’m willing to share this windfall with anyone who wears full body armor when fishing with me.

Didn’t anyone wonder why the bill was signed in Colorado?

Another Ponzi scheme bites the dust

From the Commodities Futures Trading Commission:

Federal Court Order Freezes Assets of Illinois Commodity Pool Operator Brookshire Raw Materials Management, LLC and its Canadian Principals Based on CFTC Charges of Misappropriating More Than $4.6 Million in a Ponzi Scheme

The U.S. Commodity Futures Trading Commission (CFTC) announced today that it obtained a federal court order freezing the assets and prohibiting the destruction of documents of a Barrington, Illinois commodity pool operator, Brookshire Raw Materials Management, LLC (BRM), and its principals John M. Marshall and Stephen Z. Adams, Brookshire Raw Materials Group, Inc. (BRMG) and Brookshire and Company, Ltd. (BCL), all of Toronto, Ontario, Canada…

As alleged in the CFTC’s complaint, between September 2006 and December 2008, Marshall, Adams, and BRM accepted millions of dollars from customers for investment in a commodity pool known as the Trust and operated as a Ponzi scheme. The Trust is governed by a Private Placement Memorandum (PPM), which, among other things, states that each fund in the commodity pool will invest customer proceeds in a portfolio of commodity futures and forward contracts designed to approximately replicate the investment methodology of corresponding indices developed and managed by BRMG. However, as alleged, Marshall and Adams, as agents and officers of BRM, BRMG, and BCL withdrew more than $5 million from the Trust account and wired those funds to bank accounts in Canada, mostly in the care of Marshall.

Five million bucks isn’t a pimple on an elephant’s arse nowadays, but a million here, a million there and pretty soon you’re talking about billions. Or is that trillions?

Stay tuned. Enjoy the fun.

Paul Krugman’s latest informal fallacy (UPDATED)

Mr. Nobel talks taxation, but fails from the start:

Other things equal, public investment is a much better way to provide economic stimulus than tax cuts, for two reasons. First, if the government spends money, that money is spent, helping support demand, whereas tax cuts may be largely saved. So public investment offers more bang for the buck. Second, public investment leaves something of value behind when the stimulus is over.

First, there’s not only nothing wrong with saving, despite Krugman’s apparent disdain for the concept. But you might also ask yourself why the average citizen would be willing to save when 1) interest rates are back at historical lows; 2) the stock market is running on fumes; and 3) they are sitting on piles of debt they need to pay down. Then ask why Krugman fails to mention that debt repaid is now a credit line re-accessible – you really don’t think people (or businesses) will shun pulling out their plastic again, do you?

Second, public investment leaves something else behind besides value “when the stimulus is over” – items the prize winner also omits – they are commonly referred to as 1) a pile of debt your children will be responsible for, and 2) massive legacy costs your children will be responsible for. Public projects need ongoing support (which rarely materializes – just ask Jimmy Carter or the Afghan Mujahideen of the ’80s) – pumping massive amounts of money into willy-nilly temporary job creators will have significant long-term repercussions. Of course, you need not worry about what might happen after the next election, or the next round of Nobel prize voting.

I’m still trying to figure out what “other things equal” means, besides a weasiley way of saying “my medal affords me some magical interpretation of the situation you can’t possibly fathom.” I loathe the effort that may be required to succeed in that particular quest for enlightenment.

UPDATE: A more salient discussion on tax cuts as stimulus.

Sleazy Friday Links

Getting ready for the weekend

    Topping the sleaze charts:

  • Government officials got big loan discounts from Countrywide. “Friends of Angelo” included, who else, but the heads of congressional banking and finance committees. Note – these folks voted for a government mortgage bailout plan, and no wonder – they’re getting foreclosed on.
  • Voted “Best Value From Your Stimulus Check”:

  • To hell with retail purchases – get “more bang” for your stimulus check dollar. A new “core inflation” measure is just around the corner…ex food and energy and sexual favors.
  • And last and least:

  • A judge recuses himself from obscenity case over a purportedly obscene website, but it seems what was truly obscene was the media’s lack of fact finding standards. The media will continue to cry about the internet killing them, never understanding the simple truth – their product is for shit.

If you were used to doing nothing, what would you do?

You’re on the board of a couple of big companies. Their business is investing in home mortgages, and you force them to be moderately picky about what they buy. It can’t be too big, and must garner a sufficient rate of interest over a sufficient length of time. You also subsidize these companies through loan guarantees – it’s the only way anyone will buy their debt. Meanwhile, the companies’ management really has your ear because they take you out on the town a lot, and their private-sector brethren foot the bill.

By the way…how are those companies of yours performing? Well, they’re losing tens of billions of dollars each quarter, with little end in sight.

What do you do?

A) Nothing, and let the markets weed out all the garbage over the next two years or so
B) Recommend getting rid of all their analysts, and go party with the CEO
C) Vote for a top management shake-up, and go party with the private-sector folks
D) Relax their investment restrictions, giving them yet more avenues to lose their investors’ money

It’s a tough call. But if you picked “D” you’ve won!

Market wants government stimulus package returned to sender?

Not politics…just facts.

Nancy Pelosi announced today that Congress will be presenting an economic stimulus package early next week.

The S&P 500 Index reacted by shedding almost 40 points (and the Dow was down a cool 307). Maybe Pelosi & Company should stick to stimulating the gourmet food in the House cafeteria?

UPDATE: The markets didn’t like the Administration’s response either. All most people are going to do with $800 is pay their gas and electric bills.

UPDATE 2: Paul Kedrosky calls the Bush Administration response “rushed” and “panicky”.