Bloomberg's Congestion Pricing - Selling Big Brother to the Masses

It's not a plan to install thousand of surveillance cameras and add a permanent "paper please" police presence downtown - it's a Green plan to fight air pollution! You could sell shit-on-a-stick to New Yorkers if you charged a premium, made them wait in line, and told them the carbon would be offset.

The supporters have various experts they trot out for the media to confirm that, "YES, people respond to incentives." Adding a police enforced cost for something that was previously free, means that people will do it less frequently. That's Econ 101, not proof the plan is a good idea.

Bloomberg, Capitalisms Fifth Column Gets Worse

Is there any business transaction they do like? Their online rag has been railing for more intervention, more regulation, and less freedom at a fever pitch. With the sometimes exception of Caroline Baum, their op/ed writers are statists to the man.

Matthew Lynn covers the hackneyed rant; bankers’ bonuses are too high and they are obnoxious people. I can’t think of a single banker who would take these ludicrous arguments seriously. His reasoning speaks for itself:

The only people who have a right to share bank profits are the people who put money at risk: the shareholders. The employees don't usually put their money on the line, so they can't expect to receive some of the profits.
…
A bonus isn't a salary. Nor is it a dividend. It is a reward on top of your usual remuneration for exceptional effort or outstanding performance. It should probably be unexpected.

Bankers may claim they have made a lot of money for their employers. So what? That's what they were paid for. The people serving the burgers and fries at McDonald's Corp. restaurants aren't entitled to a bonus just because the business happened to do well one year. They already got paid for doing their jobs. The same principle should apply at a bank.

..and so on.

Bloomberg Bias

Odd crime comparison:

Rio de Janeiro state, with a population of 8 million, had 6,620 murders in 2005, or 42 per 100,000 people, according to recent government figures. That compares with a rate of 35.4 per 100,000 in Washington, D.C., according to 2005 figures from the U.S. Federal Bureau of Investigation.

The Washington DC (pop 580k) murder rate is 7x the national average - no where else even comes close.

Why not compare New York City a population of 8.1 million and a murder rate of 6.6 per 100,000?

Mayor Bloomberg Wimps Out

"His aim is not to make the people happy but to bring them into a condition which renders him, the dictator, happy. He wants to domesticate them, to give them cattle status. The cattle breeder also is a benevolent despot" - Mises

Socialist billionare Bloomberg flip-flopped today on his parking ticket stance and said the fines would be waived. Thanks Mike! Its good to know you can still relate to the masses.

He originally defended his stance with this, "I’d like to sleep in, too. But it was the right thing to do." Why does this guy think he has anything in common with people who work for a living?

Power Hungry Mayor Bloomberg Expands His Grip

Comrade Mayor Bloomberg and his useful idiot lapdog Thomas Frieden have decided to ring in the New Year by expanding the grip of the state using blatant Stalinist tactics. No surprise coming from the same gang that has been waging a War on Private Property since they’ve been in office.

The latest area of your life they want to control is pet ownership. Unless you agree with your government’s vision of the ideal amount of pets you can own - they will brand you mentally ill. That’s right – it’s not for you to decide how many pets to own, only the State is qualified to do that. Since there is nothing legally they can do to you, it’s off to the institution, because if you don’t agree you must be crazy. Just like Stalin!

Its only stage 1. It’s easy for people to get used to such shocking violations of property rights and abuse of government power. Simply use them initially against people who are impossible to defend. Do you really want to see more dead kittens? Once this trial balloon goes unchallenged, the tactic will inevitably be expanded and citizens encouraged to inform on other undesirables.

The article is full of propaganda. Citing individual cases that look horrible but showing no general trend. Labeling animal lovers as mentally ill. Encouraging informing on neighbors to the authorities. Using criminal terminology to describe people who have done nothing wrong, “recidivists”.

Shaun Donovan Lies About Housing

...referring to the mayor’s plan to create or preserve 165,000 units of lower-priced housing by 2013. “No other single change that we will make, or new policy, will have as broad an impact.”

Except getting rid of rent controls.

Comrade Bloombergs Statism machine rolls on. Him and the rest of them think that affordable housing is the result of legislative fiat. Not that it every worked previously:

The 421-a program, which costs the city hundreds of millions of dollars a year in forgone tax revenue, was begun in the 1970s to spur housing development. Under the program, developers could get a 10- to 15-year exemption from the increase in taxes that resulted from their work...

When the real estate market in Manhattan revived in the 1980s, the program was modified to require developers in central Manhattan to build lower-cost units if they wanted the tax break.

The same initiative failed in the 70's, it failed in the 80's and it will fail again to provide anything but profit opportunities for the politically connected.

Also note the newspeak in the article - "affordable housing advocates" - which seems to be a euphemism for looter

More "Wisdom" From the Cultural Elite - Harvard Bigshots Sink Fund

I remember thinking how stupid it was for Harvard to get rid of fund manager Jack Meyer because he made too much money. He was the guru who made Harvard over 16% a year for 10 years while trading billions. Incredibly even that market beating return wasn’t enough for Harvard to keep him around.

The lamentations of the privileged were too much and Harvard brought on less well paid help to manage their $18 Billion endowment. They got what they paid for according to Bloomberg, “Harvard's return on its endowment fund slipped to 16.7 percent in the fiscal year ended June 30, the lowest in three years, and behind rivals Yale University and Stanford University.”

Unfortunately the article didn’t cover any of the important questions, like why do people still contribute a school that already is sitting on $18b?

More Market Freedom? – Regulatory Tide Turning

Remember when Trust Fund Baby Elliot Spitzer tried to shake down H&R Block for the crime of offering retirement accounts for the poor? It was hard to miss since it was front page news everywhere. You may have missed the fact that Spitzers abusive prosecution failed again becuase the only media play it got was the Wall Street Journal Op/Ed Page.

Trust Fund Baby Spitzer is leaving the AG post in disgrace (unfortunately he isn’t disappearing for good) after a long string of embarrassing losses. At the same time regulations from the post Enron era are being rolled back.

Paulson is going after Sarbox, and the “Justice” Department got smacked down yesterday with new restraints being put in place in response to the brutal Thompson Memo. From the NY Times:

Under the revisions, federal prosecutors will no longer have blanket authority to ask routinely that a company under investigation waive the confidentiality of its legal communications or risk being indicted. Instead, they will need written approval for waivers from the deputy attorney general, and can make such requests only rarely.

It may be too late. The US’s burdensome regulations helped London eat our lunch.

Comrade Bloomberg and Schumer say that are going to help. With friends like these…

Comrade Michael Bloomberg: The myth of the “businessman politician” is long past its prime.

Exhibit A: Market hating statist Michael Bloomberg.

He somehow ran as a Republican, but he has all the traits of a Hollywood limousine liberal. Especially his hatred of property rights.

First there was the smoking ban. This sneaky piece of legislation was never mentioned by Napoleon during his campaign but managed to pass under the guise of health benefits. Property rights be damned, the State knows best for you.

At the time speculation that a smoking ban would open the doors to greater intervention in the citizens lives by banning other unhealthy substances was dismissed at unrealistic. But today it occurred as the NYC Board of Health voted to ban trans-fats in the city.

I didn’t know that I answered to the Board of Health for anything, but that doesn’t prevent them from VOTING away my rights. Bizarre.

One of Mikes favorite activities, besides the rape of property rights, is following in the steps of Rosie O’Donnell by walking around with several bodyguards and proclaiming his hatred of the 2nd Amendment. You’ll never reach the White House that way Bloomy!

His rowback on the stripclub shooting was amusing to. First he declared the cops guilty, and then the news came out about a 4th armed man in the car. Bloomy response, “We don't know what happened.” Thanks for that Mike! Next time you should find out the facts before you start obsequiously kissing up to the minority vote.

Just like Corzine, Bloomberg thinks because he is rich, he knows better than you do about how you should lead your life. And because he is rich he doesn’t suffer any of the consequences of his own stupidity.

Rent Controls Always Have the Same Result

Mayor Quimby: Are these morons getting dumber or just louder?

Aide: Dumber sir, they won't give up the bear patrol, but they won't pay taxes for it either. Ducking this issue calls for real leadership.

Having a group of economists come to a consensus is not easy. On the issue of rent controls however, there is near universal opinion that they are a bad thing. Besides the people who live in the buildings and NY Times Op-Ed writers its hard to find anyone who thinks they are beneficial.

So it is suprising that the Dutch would rather living in cockroach and rat infested shipping containers then get rid of the horriffic rent control laws in their country.

And these people are supposed to have such a great standard of living? Perhaps its the beatiful scenery of hookers and passed out heroin addicts on the way to the docks to live in a rodent infested box.

``There is a big shortage of housing, and at the same time a resistance to rent liberalization.''

The Dutch don't want to hear about more delays, as waiting lists lengthen and people flood into the city's three container towns.
...
Amsterdam's geography is reinforced by a 1901 law that caps how much landlords can charge. More than 70 percent of leased apartments are rent-controlled and command an average price of about 300 euros a month, or half the rent for those on the open market. Waits to get into the rent protection system can last as long as 26 years as people stay put.

Capitalism in Action

Free markets work better for all goods. This includes ones that are typically thought of as being supplied only by the government.

According to this Bloomberg article, India’s private sector unsurprisingly does a better job building roads and power plants than the State. Now if only they would privatize the water supply.

The highly indebted Indian government hasn't the wherewithal to make a decisive improvement…
Private enterprise is playing an increasingly important role. Inadequate public spending is still a huge constraint, yet domestic non-state companies are slowly taking the lead in allocating much-needed capital to some of India's most overlooked requirements.

Bloomberg.com – Capitalism 5th Column - pt 1

Bloombergs decline into blatant statism was first pointed out by Donald Luskin in 2005. Its only gotten worse since then.

Here are some of the front page stories from today: Some CDS Trades Profitable – Time to let the gov’t regulate it ; Gov’t Official Wants to Extend Gov’t Reach to hedge funds– Lets Regulate another industry that doesn’t need it ; Its Bush's Fault ; The Noble Extortionists - Women who can't handle the workplace, should they be handed millions or multi-millions?

FBI: Late to the Party Again- Don’t worry, Chip Burrus is here to help

Having wrapped up that whole terrorist thing the FBI is now jumping on the Hedge Fund Boogeyman bandwagon according to this article in Bloomberg today.

``I'm not interested in civil fines,'' he said. ``If I'm coming in and I'm looking, there are allegations of criminal misconduct. There's obviously a different pucker factor that comes when you start talking to an FBI agent

.
In other words, armed men show up and threaten criminal charges unless there is full cooperation (meaning just admit you did something wrong and we’ll go extort someone else) and a few employees are tossed under the bus. These are Elliot Spitzer style tactics of government intimidation and thuggery with the primary concern being headline and press release generation.

The article goes on to quote Mr. Fife:

``It is an emerging threat because of the dollar value and the number of institutions that are actively taking a look at this,'' Burrus said. ``People that maybe aren't expecting to have this type of a risky investment in their portfolio end up taking a bath.''

It’s an emerging threat because investors weren’t expecting that type of investment? So if an investor doesn’t do his research or ignores the dozens of warnings in the offering documents the FBI will investigate?

I feel safer already.

CME Economic Derivatives Reception

-Gartman didn't say anything that Prediction Markets followers aren't familiar with. His overall theme was that putting money behind predictions will make them more accurate. He did share an amusing anecdote that he used the Iowa markets to get his election results info for his newletter and received many compliments for his “prescient” predictions.

-He also expressed surprise that this market has taken so long to get off the ground.

-How inside information will be handled: 1. CME rep said that the fact the market moves so much after fundamental releases is proof that the gov’t is good at keeping the number under wraps 2. If revealed early, an auction in progress would be halted but the previous ones would stand 3. If the number was revealed early but after the last auction it wouldn’t matter 4. If someone had inside info and wanted to use it the CME wouldn’t be where they would go

-The absolute number for consensus is not very important because it normally matches the Bloomberg/Reuters number. The CME advantage is that you can see the range and distribution of estimates and trade off of them.

-The auction ends 30 minutes before the number is released to give traders a chance to establish positions in other markets

-The trading has at least 120 trading firms participating

-The CME wants to expand to areas and releases that are the biggest market moves. They want to have contracts that are part of, “every day lives.”

Bush vs Osama

The Bloomberg headline:

Bush Makes Surprise Afghan Trip, Says Bin Laden Will Be Brought to Justice

The Market Responds (with a yawn)

Shills to Sensationalists

On Thursday analyst Mark Stahlman raised the stakes for absurd price targets by setting a hedged $2,000 target for Google. This more than tripled the next best estimate of $600, by Safa Rashtchy of Piper Jaffray. Even Bloomberg got into the act with the headline saying that Stalman had, "TRUMPED" the other analysts. And that was just for raising the price target. If Stahlman is right GOOG's market cap, at the current P/E, will be larger than CitiGroup and Bank of America combined. What is going on here?

In my mind, the start of this trend was Goldmans $100 barrel of crude prediction which grabbed plenty of headlines, and marked a turn from shill analysts to sensationalists. Unsupported by fundamentals, and only achievable by generous extrapolation of singular events as sustainable trends, the prediction dominated the financial news for several days. Instead of analysts publishing PR pieces for the covered firms, they are using the coverage as publicity stunts. Of course throw enough of them against the wall and one will eventually come true, which won't justify the proliferation of these types of estimates in the first place.

Gordon Gekko's comments that they don't know, "preferred stock from live stock" is too harsh. As a group their numerical estimates are not nearly as useful as their analysis of firm and industry trends. What should the price be? This stock had made more fools out of the shorts than AutoZone. I'm holding no position right now; flat and nervous.