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| | Tavakoli Structured
Finance, Inc. |
| | "Of
course, there is still much work to be done. That means honestly confronting
the crisis of Islamic extremism and the Islamists and Islamic terror of all
kinds." -- President Trump in Riyadh
"Where are you headed, Europe? Rise from your knees
and from your lethargy, or you will be crying over your children every
day." -- Polish Prime Minister Beata Szydlo
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| A Book and a Movie
"It's like a self-care book written by a serial killer." The rabidly leftist Huffington Post had no kind words for Hillary Clinton's latest book ineptly titled What Happened.
I saw Dunkirk again, and it was even better the second time around. For example, knowing the history of the captain of the Moonstone, every gesture, every decision, and every crack in actor Mark Rylance's voice holds poignancy. My favorite movie of the year may be leaving theaters soon, and I may see it a third time, before it does.
Have a great weekend.
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| USA's Constitutional Crisis of the Century
The Wall Street Journal's editorial board wrote a mea culpa,
admitting it was wrong to criticize President Donald Trump when he made
the shocking allegation that his campaign had been wiretapped by the
Obama administration. It turns out that President Trump was correct, and
this is the Constitutional Crisis of the century.
In an unprecedented abuse of power, the Obama administration abused government power and resources, spied on its political opposition, and apparently manufactured a ludicrous fake report as the pretext for getting a FISA court warrant to do it.
WSJ is now demanding answers.
You'll recall that many people spoke up to deny President Trump's allegation. Either they didn't know what they were talking about—yet tried to undermine the President, anyway—or they lied, hoping their lie would never be revealed for what it is. These people all owe President Trump an apology and some of them may deserve to be prosecuted. They include (I'm probably missing many): Speaker Paul Ryan (third in line to the presidency), Senator Richard Burr, Senator Mark Warner, former CIA Director James Clapper, Senator Kamala Harris, former U.S. Attorney General loretta Lynch, and former FBI Director James Comey. The latter lied under oath.
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| Crisis in Puerto Rico & U.S. Virgin Islands
Last week, the island of Puerto Rico, U.S. unincorporated territory with a population of around 3.5 million, took in thousands of refugees from the U.S. Virgin Islands and St. Martin after Hurricane Irma hit those islands hard and skirted Puerto Rico. (The population of the U.S. Virgin Islands, unincorporated U.S. territory—St Thomas, St. Croix, St. John and others is around 103K.): "Visibly shaken residents from St. Martin and the Virgin Islands arrived
on Tuesday on U.S. military aircraft, bringing tales of terrifying winds
and a breakdown of law and order."
Hurricane Maria has hit the Virgin Islands again and has hit Puerto Rico leaving its 3.5 million people without power. The capital may not have power for a month. Other areas of he island may be without electricity for up to four months.
This will entail a massive aid effort as social order in the U.S. Virgin Islands and Puerto Rico is under threat: sanitation, law and order, clean water, fresh food, climate control. Not to mention surrounding Caribbean Islands that have also been hit.
In the continental U.S., we're still dealing with getting Texas and Florida up to the mark. Steel, auto, and selected insurance and building stocks may benefit from additional demand.
These emergencies illustrate why countries must allocate resources to their own citizens and territories and allies first, and then consider what more, if anything, they are willing and able to do for interlopers.
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| | Four Items
President Trump prevented war between Saudi Arabia and Qatar. Timing of exactly when the discussions occurred is unclear. Read more via Bloomberg.
Buck McDanger (no relation to Buzz Lightyear) on Twitter kindly provided a correction to my comment on Hurricane Maria. I overlooked St. Croix in the U.S. Virgin Islands directly in the path. Maria may hit St. Croix as a Category 4 or 5 hurricane.
This afternoon (Tuesday, Sept 19), Mexico was hit by its second powerful earthquake within two weeks.
Dunkirk is now the highest grossing WWII film (unadjusted for inflation). Domestic box office hit $185 million. Foreign: $324 million of which UK is $73 millin. Total is $500+ million.
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| | Guaranteed Income and Living Wage
If you are a regular reader of my off-these-cuff comments, you already know that "guaranteed" income and living wage schemes do not work. I'm not including social security, which was supposed to be self-funding before it was looted by politicians.
Consider your own extended family. How many family members can the rest of your family support with guaranteed income and a living wage? Are you wiling to do that, so that others can stop working or stop looking for work, if they so choose? How many immigrants can you support in addition to that?
One cannot help others unless one puts the oxygen mask over one's own face first.
The citizens of countries such as Germany have collectively taken leave of their senses, and when they regain their senses, they will have lost their so-called country. In the USA, people who do not wish to think hard are shouting down sensible people and throwing violent tantrums. Ignore them. Let adults do the hard work of helping society as a whole remain stable and prosperous.
Hurricane Maria
It looks as if the USA will be spared hurricane Maria. Thank you to all of you who asked, I am not in Dominica. Hurricane Maria hit the island as a Category 5 storm. Here's the first-hand account of Dominca Prime Minister Roosevelt Skerrit as the hurricane tore his roof from his home.
I was scheduled to travel to the Dominican Republic (not Dominica). The conference at which I was to give the keynote speech was cancelled, since the hurricane may hit the Dominican Republic and Haiti later this week as a Category 4 storm. (I do not speak in public more than once per year, if that, almost everything I do is governed by a confidentiality agreement.)
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| Florida Real Estate
For the first time in the memory of the USA, the entire state of Florida has been threatened by a hurricane. The first consideration is the safety of the people of Florida during the hurricane. Even harder is maintaining social order (looters, "repair" scammers, "charities"), public hygiene & supplies (clean water, food distribution, medical care, sewage control, electricity, pest control) and rebuilding afterwards.
The worst case scenario is if the state devolves into chaos. But it seems the Governor Rick Scott and President Trump will do everything possible to make sure that doesn't happen. Moreover, many Florida citizens are armed, which tends to make strangers think twice about misbehaving after a crisis. We'll know soon.
As Florida rebuilds, what will happen to real estate prices? Insurance is required for loans, and insurers will initially be skittish. In the past, insurers and reinsurers have applied for federal assistance to cover claims the insurers said they would cover when they took in premiums. (Even Warren Buffett did it in the past.) Northerners, who supported the Florida bid, may rethink plans to move there for retirement. At least in the short term. Of interest are the premium areas of Florida. That is where one hopes to find a bargain.
Here are some views on what to expect.
The New York Times includes comments about the potential hazards to Florida's nuclear power plants, even claiming Turkey Point may have similar vulnerabilities to Fukushima (but don't expect any genuine research from The New York Times, check it yourself). It also reported something that is generally known:
“Aggravating matters, South Florida’s
cities, in particular its largest, Miami, are built on porous limestone that’s
effectively a rocky Swiss cheese. As the limestone soaks up rising seawater, Miami’s infamous “king tides” — fresh water
forced up from drains and pipes by underlying salty water — become more
frequent. Because of this limestone geology, Miami and other cities in South
Florida cannot build substantial sea walls to hold back storm surges the way
other cities, like New Orleans and Rotterdam, have. The water would simply flow
underneath.”
CNBC reports: "A staggering swath of newly built South Florida homes lies in Irma's path." Let's see how they hold up with the new housing codes.
Some very expensive (aka overpriced) Miami high rises claim they can withstand category 5 hurricanes. Let's see how they hold up. Even after the hurricane, I expect the prices will relatively crash, and these units will still be overpriced.
The bargains will probably be in the classic premium areas of Florida--once things settle down. But if there are bargains to be found, one should consider it a long-term investment subject to weather risks, and it may take a long time for prices to recover.
One resort area never recovered from tragedy. Most do not know that Bar Harbor Maine was the summer go-to place for Cornelius Vanderbilt, J.P. Morgan, John D. Rockefeller, and other hyper-wealthy American legends. The Great Fire of 1947 burned down most of the mansions on Millionaire's Row. (That was when a million dollars still meant something.)
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| | Global Warming: The "Models" Are Junk Science
Those of you familiar with my work on the financial crisis know that I found there were problems with both the models and the data. When it came to the data, the largest problem was fraud; this swamped everything else.
I’ve now looked at “global warming models.” There’s a data problem. How long have we been keeping weather data? Not very long in terms of history of the earth. But beyond that, there are problems with the so-called models.
“Scientists” don’t know which variables are functions of each other—if at all—and there is a lot of guesswork involved. That isn’t the only problem with the models, but I’ll stick with this one, because it is more than enough to illustrate that the models are unreliable. To put it in the simplest terms, the models assert a given variable is a function of another when there is evidence to the contrary.
By definition, there must be one unique output for every input for one variable to be a function of another. That condition is violated.
That alone blows the whole ball game, and that isn't the only problem.
This isn’t to say that global warming is not happening, only that if it is, the junk scientists fobbing off these "models" won’t help us predict its progress much less pinpoint the true cause or causes.
By the way, Chicago’s weather forecast for Tuesday, August 1, was cloudy and warm. We had an unexpected spectacular storm. I cannot tell you the cause, but I do know it wasn’t Bush’s fault.
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| | Equities, Derivatives, and Leverage
Wall Street would like you to borrow more against your stock, even though margin is at all-time highs. Meanwhile, banks are increasing their revenues due to equity derivatives trading. What a beautiful bubble!
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| | Growing Up American
There was a time when studying hard and making the most of one's intelligence was valued. (Yes, intelligence is a gift, but in order to make the most of it, one has to live a right life.) That was true in the USA, Latin America, Japan, India, China (civil service exams were notoriously tough), Britain, and on and on.
Today, the Far Left wants to make intelligence and success into anti-virtues. Keep in mind that even people with equal intelligence get varied results. Hard studying Asian students often beat their lazier peers. Should we blame Asian family values?
The left seems to disregard the hard work
of developing one’s potential. (I guess we should pay football players less,
too.) Smart
people seem to make them feel sick. “Thus the accident of having been born
smart enough to be able to be successful is a great benefit that you did
absolutely nothing to earn. Consequently, you have nothing to be proud of for
being smart.”
I disagree. It's hard work to keep at the top of one's profession, no matter one's level of intelligence. You have my permission to feel proud of your family and your accomplishments. Also, see below. Not everything we learn is strictly about intelligence.
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| | Brains in the USA
Frank Gaffney, president of the Center for Security Policy interviewed me about the propaganda around hijab in the USA and female genital mutilation taking place in states such as Michigan and Maine.
Muslims need sensitivity training, not the other way around. The hijab is far better known in the USA as a symbol of massive brutal violence against women than as a religious symbol.
Democrats in Maine’s state legislature blocked a bill to recognize female genital mutilation as a crime, whereas any U.S. citizen should recognize this as a violent crime against females.
Listen here.
For more on the techniques of ideological subversion used against the West, you can find Soviet defector and former KGB spy Yuri Bezmenov’s book, Love Letter to America, on archive.org. (It’s written under his pen name, Tomas Schuman). Where is Bezmenov today? The internet says he died in the 1980’s.
Loans for the Walking Brain Dead
Did you know that students are taking out loans to attend community colleges that may drop a requirement for them to pass “college” algebra? First, there is no such thing as “college” algebra. Children in good elementary schools (kindergarten through 8th grade) learn algebra. In high school, children should learn advanced algebra, geometry, trigonometry and first year calculus (plus biology, chemistry and physics).
But NPR (national public radio) reported that algebra is the most failed course at community colleges, and asked if the requirement should be dropped. What?! This isn’t a college course. We shouldn’t lower the bar, we need to raise the standard much higher.
Students are piling up debt to get a worse education than they would get in a good elementary school. How can these people function as adults to calculate mortgage payments, finance charges, compound interest, size things in their homes, basic probabilities, read a good newspaper? The teachers of these students aren’t fit to teach. No wonder our “journalists” on the web can’t interpret basic numbers.
Help your children stay smart. It’s summer. Consider buying algebra, geometry, trigonometry, pre-calculus, AP calculus prep, and science Cliff notes (or similar) online so that your children can stay in top form. That way when they start the school year, they’ll sail through the first week of review and can focus on settling in. Being prepared takes a lot of the stress out of a new situation. As they say in the military, you will default to your level of training. Everyone has to train to stay fit.
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| | Better Than Money
If you want to help your country, instead of contributing money to politicians, why not contribute a solution to one of your country’s problems?
I sent my paper, “Importance of Data Preservation in the Application of Set Theory to Counterterrorism,” to a former instructor at the National Defense Intelligence College who subsequently forwarded to colleagues. (This paper is not available to the public.)
My method compares lists of associates of organizations to quickly identify high probability persons of interest using set theory techniques. There is no need to know in advance whether alternate spellings of targets’ names or aliases exist, as long as association records are kept as complete as possible. A subsidiary goal was to support efforts to gain inter-agency cooperation in the compilation and preservation of data, since operatives of the Obama administration actively destroyed useful records.
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