Wednesday, November 4, 2009

Rand Paul and Trey Grayson in Stalker Gate.

Trey Grayson (the former front runner who was supported by Mitch McConnell) has to be sweating bullets, after Rand Paul is now the front runner in the KY 2010 Senate Race.

Regardlss, here is a video, where it seems that Trey Grayson still can't get enough of Rand Paul. Somewhat ironically, I attended this event with my friend (and now, fellow blogger) Mike; it should be noted that Trey Grayson didn't bother to drive a measly 1/2 hour to come to an event (that received a decent amount of press coverage) so that he could share his views on various issues with his constituents... Rand Paul, on the other hand, drove 2 1/2 hours- just to get there!

Another note of interest: Trey Grayson talked to the crowd via speaker phone for a few minutes. At the end of said speaking, he "wanted to give a shout out" to some students that apparently went to the same high school that he did- ironically, the student said that they had never met the guy and seemed surprised (if not embarrassed) that he even mentioned it. Go to 2:05 to see the creepy clip.

Strange... but regardless, the plot gets even thicker in 'Stalker Gate'.

Here are the 2 videos of Rand speaking:

Paul Sonkin On Forbes.

Tuesday, November 3, 2009

A really old note(s).

Since I have posted a few things tonight and also came across some old notes from my facebook; I figured that I would post some of the very entries that helped spur me to start this blog. I especially like the second one... Keep in mind that these are pretty old. :)

The Governor of Kentucky temporarily repeals the law of supply and demand.

Here is a link to the story from the Herald Leader.

Let me sum it up... Due to the hurricane in Texas, and rising gasoline prices here in Kentucky (which, Heaven forbid could have to do with much of our refining capacity going offline) our Governor, Steve Beshear declared a state of emergency to protect the public from evil corporations that have lower profit margins than most industries...

The funniest thing about this is that yesterday when I tried to fill my tank up, low and behold, there was no regular gasoline to be had! Since that happened, I filled up with the mid grade. Obviously, since there was a shortage in regular grade, the price had not risen enough to keep people from depleting the supply of regular grade gas. Even as prices had already begun to rise, people obviously felt that they were getting a good deal, since they bought the gas-are they really gonna do something that they feel makes them worse off today than they could have been?

The action of the Governor will only create further gas shortages (like the ones that I assume may have been limited to my station), and in the end, hurt the consumer.

The madness of crowds and misinterpretations of gas prices.

Here is something that I have had on my mind for all of a day; this encounter will stick with me for a good-long while.

Obviously, this whole note is nothing more than observation-well, I won't go that far, as it is certainly influenced by my laissez-fair beliefs... but mainly it's observation.

Yesterday, when I was working at the pawn shop that employs me, a pawn customer came in to get a loan on a bracelet that she owns. The conversation was as follows:

Her: "I need to get a loan of $150 dollars on this bracelet"
Me: "OK, I'll see what we can do."

After weighing the piece, I saw that it was a 14 Karat, 7.2 penny weight, 1 Carat of diamonds, white gold tennis bracelet. What that basically means is that the gold in it is worth about $180 dollars, and you get the diamonds for free (which aren't really worth too much-maybe $50 dollars...)

Me: "We can loan you $100 on it."
Her: "Thats it? This other pawn shop offered me $135... I really needed $150, can you do any more than that?"
Me: "If I could, I would, after all, it's not my money." (which is the truth, I would have loved to make her a larger loan.)
Her: .......pondering things....... "I'm just trying to figure out if it is worth it to go back there, after all, it is all the way over on the other side of town... And gas is REALLY expensive. How much more and I getting there?"
Me: "$35 bucks"
Her: ........pondering for at least a minute......... "How much will it be for me to get it out?"
Me: "$120 within 30 days."
Her: "I'll do it!"

After she did this, I went over to the computer, and looked at how far the other shop was from our store; 2.6 miles. At that rate, she would have to get less than 3.37 GALLONS PER MILE (which is far worse than even an Abrams tank) to break even on the additional 35 dollars (excluding the extra 7 dollars in interest). An extra $35 in gasoline would have gotten her to Louisville and back, provided that she averages 25 mpg.

What is to be concluded from all this?

People need to learn some simple math.

I will also venture out to say that this helps to indicate the madness of crowds that occurs in times of economic bubbles and differing business cycles. If you have a 15 gallon gas tank, it costs you roughly 30 dollars more to fill up now than it did just 2 years ago. Yet, everybody is freaking out and saying that oil prices will go up forever-the very idea of which is fatally flawed. This lady apparently valued 20 minutes of her time and 1/10th of a gallon of gasoline more than 35 dollars too (which I honestly believe they offered her, I know for fact that the other shop gives more for gold than anyone in the city.)

In addition, the same people that are screaming that gas prices are too high, are also trying to raise the taxes that Exxon Mobil and other oil giants pay, and restrict drilling and refining efforts... Raising taxes on Exxon would increase gas prices while easing drilling and refining regulations would lower the price. Prices can not go up forever, and if the market place were truly fair, taxes that are levied on foreign ethanol were dropped, oil producers were allowed to drill and refine gasoline as the saw best fit, then oil and gas prices would be significantly less than they are today. It really makes little sense to regulate and tax if you take a step back and think about supply, demand, and margins for even a brief amount of time.

Finally it seems that consumers are very aware of gas prices, and little else. After all, you seldom hear people moan and groan about movie tickets rising in price-even though rising corn prices have made tickets go up since popcorn sales subsidize your movie ticket. You never hear about the pain of paying more for Coca Cola-despite the company having profit margins that are around 2 times that of Exxon Mobil. And you certainly never hear of people moaning about the wild swings that common stocks take. Would you be surprised to hear that despite close to record profits, GE's stock is trading at about 2/3 what it was 9 months ago? What about that the US dollar is worth about 1/2 what it was (in comparison with the Euro) when it was introduced about a decade ago? A devaluation that would help to explain part of the rise in the price of oil.

All I am getting at is this, things change, and while you can get a good idea for how long things will be screwy, you are never gonna truly know how long it will last, what will be the events that will effect it the most, and most specifically, how every one will react to all the given events. As of now, it looks like we are going to elect a Democrat to the presidency, even though he doesn't care about the economic effects of raising the capital gains tax-in a debate he said that it was an issue of "fairness" and not about increasing government revenue (which a tax and spend liberal should want the most of, no?)

I will end this rather lengthy Libertarian's rant with this:

"The market can stay irrational longer than you can stay solvent."
-John Maynard Keynes

Oil will again be below the $50 dollars a barrel mark, it may be 1, 5, 50 or 500 years, but eventually it will. It shouldn't take a genius to figure that out.

My rant against public libraries.

So today I sat down at my computer desk on a mission to buy a book... Not just any book-it is a rare book, the kind that you can only get on through the "new and used" feature.

I figured that since libraries always seem to be moaning and groaning about how they "need" more funding, that I would try to help them out. I surmised that if I did a search on, I could find a list of libraries that had the book, make them an offer on it and hopefully end up buying it. Obviously, if they would sell it to me, then we both win. They would get a couple of hundred bucks for a 25 year old book on value investing; which I doubt too many people are interested in reading and I would get a crappy copy of a book that I want to own. Simple, right?


Apparently, libraries, under no circumstances, sell the books that are in their collection-unless they have an excessive amount of wear or they are stuck with an abundance of them that they don't need (so we get to buy their leftover crap?). Upon hearing this from about 7 different libraries, I asked "so even if I offered you $1000 dollars for this book that I want, you still can't sell it to me?"

"No, we can't-" was the response, "we don't sell books out of our collection."

Now, let's think of this objectively for a moment, why is it that a library won't sell a book? It really makes very little sense if you ponder about it for very long. Given that the purpose of a library is to spread knowledge to the people of the area that encompasses it, wouldn't the library getting $1,000 for a book by selling it on (or to me) make everyone better off? It would be quite simple for them to retain a digital copy of the book by scanning it into a database, paying the publisher for use of the copyrighted material, and then they could use the other $900 dollars to further the implementation of the online database. At a minimum they could buy more books-either should make them sufficiently happy. I get a hard copy of the book that I want-which would make me happy. Obviously, if we are both happy and are better off, then everyone wins... Right?

With the coming of the Kindle and the various virtual libraries (such as the>Kentucky Virtual Library), it should be pretty indisputable that an online database is the direction that we are headed in. Think of it... walking into a library, picking up a Kindle type device and having access to all the books in the libraries database via a wi-fi cloud that covers every square inch of the library! The great part about the Kindle is that there are cool features on it such as being able to click on a word that you are not familiar with, and immediatly seeing a definition of it (kinda like a hyper-linked essay on Wikipedia). There is even a feature that will keep your place in the book-no more losing a bookmark or falling to sleep while reading a book and forgetting where you left off. Even if "a Kindle in every living room" is a far off in the future, the technology to do something similar right now is here-as you will be hard pressed to find any library in the US that doesn't have a few desktop computers and an internet connection.

Who knows, I would imagine that the book I want will be put into a digital format in the near future anyway... It will be a lot cheaper, and I will have the advantage of getting to buy a cool electronic device to further my dependence on technology.

Maybe it is better for me that they don't sell books out of libraries-with Amazon competing with them, my standard of living goes up, as does everyone associated with Amazon and most other people too-provided that they utilize the company's products and services...

The only people that get screwed are the ones that are only able to use the public library to further their education-which is the saddest part of all.

Capitalism: So natural that even a monkey can do it.

It seems that capitalism isn't something thought up by humans, but is rather animal in nature. Thanks go to Greg Mankiw's blog for the link.