Monday, March 16, 2009

Fail to Remember or Refuse to Learn?/AIG: A Mere Conduit for Money/NADX/Left Brain Orders a Shutdown of Critiques on the Masters of Disaster

Today, I thought that I would include one of Joe and Sam's favorite pictures in my post.  I have never seen this picture in their homes and therefore believe that they may have lost it somehow. So I am doing them a service to preserve the picture where they can retrieve copies whenever they so desire.

The gentleman on the far left is not a retired sumo wrestler but the former governor of Tennessee. Al, the erstwhile favorite son of the Volunteer state, would have been President by simply carrying his native state in 2000.

Most people concentrate on the debacle in Florida when discussing why Al lost, but Al would have won by just carrying his home state of Tennessee.  But, to do that, he needed to get his pal Bill to move all of the residents in the SUV Capital of the World to Mississippi before the election. I am constantly making this or similar recommendations to the Democrats but they have yet to heed my sage advice on the subject. Random Observations I was thinking today that there would have been no war in Iraq if Al had won, so maybe it would not be preposterous to blame my fellow residents here in the SUV Capital for our involvement in that conflict.

Admittedly, although we would have avoided Iraq with Al as President, we would have probably been required to give up electricity and to start growing our own food in the back yard. But, hey, there are always trade offs.  

In the U.S. one way to rally the True Believers to a position is with a label. Just attach a label to a position and they fall in line.  The label needs to be attached by someone who is kosher like Rush or Sean, or the Dark Force himself, Dick Cheney who was on TV this past weekend attempting to justify the Iraq war and calling it a success. Cheney: U.S. 'succeeded' in Iraq - Mike Allen -

For those who do not understand the process, this is how it works.  Before the invasion of Iraq, those who favored the war would label supporters as patriotic and conservative, whereas those who were more circumspect were liberals or worse, usually something worse than a liberal.  

All of the True Believers, who view themselves as conservative, though few really are, would then know the position to take on the invasion because support for it has been labeled the conservative and patriotic position by a reliable, kosher person like Rush or Sean. Personally, I had trouble understanding this entire labeling process. What is the Appropriate Political Label

Nothing more really needs to be communicated to them. They would then search approved media outlets for whatever information or disinformation supports the ordained opinion, disregarding even now all contrary information.

Any contrary information would be classified as unreliable, and constant complaining and whining would be heard from them about the "mainstream" and "liberal" elite media harping on such contradictory information while ignoring or downplaying the real true story.  So, will the U.S. ever repeat the same mistake again?

Yes, the same ones who even to this day support the U.S. war in Vietnam, believing that we needed to stay for another decade until the job was done, are the same ones who supported, and still support the incursion into Iraq (see earlier discussion about Thomas Sowell on Vietnam: Going to War Decisions: Conservative or Liberal vs. Competent or Incompetent? )

There were no lessons learned from either the Vietnam or Iraq war for tens of millions of "conservative" and "patriotic" Americans.  It is not a question of failing to remember as Santayana said in his famous quote. The Most Abused Word: Reform/Buys of IR & DD/Santayana: An Inability to Remember History or Just Creating Your Own Reality to Fit an Ideology

Even the True Believers "remember" the IRAQ invasion and the reasons given for it, and some even recognize that no WMD were found. A few may even have a faint awareness of the false information delivered to a gullible public on such topics as yellow cake form Niger, the mobile biological labs,  or the aluminum tubes.

Curveball and Madoff: I can not help but connect them 

Accurate Information is Not a Side to an Issue/ W & the Housing Crisis/Lying Works In Politics
However, most would reject the hard information gathered since the invasion that establishes the falsity of claims made prior to invasion, viewing- as I have said in the past- all facts inconsistent with a previously formed opinion to be per se unreliable. 

For those of my generation, we also "remember"  Vietnam. The problem has nothing to do with remembering that will lead to a repeat of these mistakes.  

Instead, tens of millions do not now, and never will view them as mistakes, learning absolutely nothing from events as they happen. Will the U.S. find itself in another Vietnam or Iraq?  The answer to that question is of course the U.S. will find another quagmire. It may take a decade or so before it will be done again but it will happen. I say that knowing it is true but I am also an optimist, maybe there is always hope and the next generation will "remember" the past. 

Since I am a Conservative and an independent, I part ways with those labeled as liberals on what needed to be done in Iraq after the invasion. Based on the information that I could gleam, I became convinced that W and Darth Vader had created a clear and present danger to national security with the invasion of Iraq and their lack of planning for the aftermath. Thus, I supported the surge and staying there until the situation stabilized. Admittedly, within a few months or years after leaving, all of the sacrifices made may not achieve a desired and lasting objective, but then we can not stay their forever.     

More information has been released on the flow of taxpayer funds through AIG to other financial institutions.

In his interview with 60 Minutes, Bernanke expressed some reservation whether there was the political will to continue dealing with the financial crisis.

When the public reads stories about the Masters of Disaster continuing to receive bonuses measured in the millions, while losing money in the billions, and then reads stories about how the government money is actually being used, then there is no wonder that the government is starting to run into roadblocks.

Bernanke also said something that I fully understand.  He stated that the AIG bailout angered him the most and that he had slammed the phone down many times while discussing AIG. I have said that I am a hawk on enforcement of the Bill of Rights. But, maybe, in a moment of weakness, I would make an exception and support a rendition of all the Masters of Disaster to a Saudi prison, without a trial, with stamps placed on their heads saying "I Love George Bush" in Arabic. Rendition to Somalia

To some that may sound harsh so I have come up with an alternative plan for them.  Fire all of them and then make them perform construction labor in the South for minimum wage for at least five years.  Besides learning Spanish, and other perks like getting in shape, losing those extra pounds, and getting a good sun tan, it would be a good lesson for them in humility. You got to hand to the Masters of Disaster, as Evan Newmark pointed out in his WSJ blog.

Mean Street: Hate AIG? Hate Thyself - Deal Journal - WSJ 

They were smart enough to lose tens of billions and to guarantee 450 million in bonuses for themselves. 

I would have to say that I am not surprised by the 6.95 million dollar goodwill impairment charge taken by National Dentex.

The problem with this company is not the business but management.  The impairment charge was taken to lower the value of dental labs acquired by the company. This kind of charge is just an accounting item and does not impact cash flow.  Sales for the 4th quarter came in flat with a year ago at 41.264 million.  Excluding the goodwill charge, the company earned $.15 versus 12 cents in the year ago quarter.  The management calls its acquisition of a dental lab in Lansing for 10 million successful.  I would just point out that the amount paid for this lab just about equals the current market cap of the company.

But with my last buy at $1.27, I am okay with the sales and non-GAAP earnings from the 4th quarter. I am trying to focus just on the price to sales and potential price to earnings compared to the current valuation given to the entire company by the market. This is a speculative position, a lottery ticket purchase. 

The left brain was howling this morning about doing at least one trade on the ING and Aegon preferred positions, while the right brain was just enjoying the show. Really, the kind of movement that I am seeing is just insane, no other word for it. 

I spend a lot of time criticizing AIG and its financial product unit.  The left brain just told me to be quiet about all of that since I still own close to 20 grand in bonds issued by its subsidiaries. Yea, more bailouts for AIG it said just a second ago until I get my money back. A good chunk  of those investments are in International Lease Finance bonds with maturities in 2009, with the largest in May. 

I was happy to hear that the prosecutors are going after the property in name of Madoff's wife. How exactly did she earn that money or was it just Bernie giving her money that he received from his clients and never bothered to even invest.  

For those interested in Santander's solution to steering its customers to Bernie, this article in Barron's is worth a read. Banco Santander's Plan to Compensate Clients Raises Questions -

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