Sean King

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San Juan, Puerto Rico, United States

Monday, October 25, 2010

Deflation News

Here's nine widely used items that cost less now than a year ago.

Have you noticed...

...that there's been open talk recently about the possibility of Civil War in the US? Even Time Magazine discusses the issue. And then there's this story.

I hope civil war is highly unlikely, though secession is a very real possibility if the economy turns down again.

I Toldja Big Government Benefits the Wealthy Establishment!

As the nearby chart shows, by almost every measure, the middle class hasn't benefited much at all over the past two years – the number of employed has fallen while wages, disposable income and home prices have pretty much flatlined.

At the same time, Wall Street and big business have made out like bandits. The Dow is up 30 percent since Obama took office, and corporate profits have shot up 42 percent.

Meantime, companies are sitting on so much cash -- nearly $2 trillion worth -- they don't know what to do with it all. The non-financial companies in the S&P 500 index have seen their cash stockpile climb 26 percent over the previous year. Apple alone has amassed almost $26 billion in cash.

Read the whole thing.

I don't know why this is so hard to understand: Regulation and high tax rates act as barriers to entry, reducing competition and favoring those businesses that have already achieved economies of scale. A big business with reduced competition is able to charge higher margins, increasing profits.

Hence, regulation and high taxes favor the well-to-do. After all, why do you think Bill Gates and Warren Buffet and George Soros and you-name-the-billionaire are all big-government "progressives"? Do you really think its because they feel sorry for the "little guy"?

Friday, October 22, 2010

Somebody needs to remind...

Brad Gardner that defined contribution retirement plans are for the little people. I mean, we can't seriously expect public sector employees to get by like the rest of us do with only a 401(k) plan.

Get real, Brad!

Foreclosure Fiasco

Ben Popken:
It's hard work signing thousands of documents a day, even if you don't have to read them. Your hand can cramp like something awful!

So, to reward his fastest robosigners, one foreclosure mill operator drenched them in gifts, raining down jewels and fancy cars. He even made their monthly mortgage payments for them. Dates were changed, notary stamps were shared, and signatures forged in a secret system designed to lube the gears of the foreclosure machine to turbo speed.

Details, including links to the affidavits, can be found here.

When What's Good for the Goose...

...ain't good for the gander:

As the Journal has shown, dozens of public servants on Capitol Hill (and sometimes their spouses) actively traded during the financial crisis—buying funds that profit in a falling stock market, using options to bet against shares of home-building companies, even trading in and out of stocks that stood to benefit from government interventions they helped oversee.

Such trades are legal, since prohibitions on insider trading generally don't apply to Congress.

As Church Lady would say: "How convenient!"

Google's CEO:

"The Laws Are Written by Lobbyists".

"The average American doesn’t realize how much of the laws are written by lobbyists" to protect incumbent interests, Google CEO Eric Schmidt told Atlantic editor James Bennet at the Washington Ideas Forum. "It’s shocking how the system actually works."

I've been harping on this topic for a while because it's so important. Of course laws are written by lobbyist! And since only the wealthy establishment can afford lobbyists, or at least lobbyists who stand a chance of corrupting the system, laws and regulations are written to protect or favor this or that establishment group.

Our only hope for salvation is that sufficient numbers of people will realize that this is true for all laws, even those that they themselves would favor. It's true of environmental laws, so-called "consumer protection laws", healthcare laws, social justice laws, anti-discrimination laws, laws establishing holidays, laws designed to "punish" Wall Street, etc. Almost all laws benefit the establishment!

That being the case, the only solution is to elect people who will insist on fewer laws and more limited government. More and more the "elite" today are so not because they have earned it, but simply because the system was rigged by the government to favor their interests. Take away the government's protection by reducing regulation, and many elite organizations and people will fail. Heck, maybe most of them will. That failure will be painful for all at first (change and dislocation always is), but ultimately it will result in greater freedom and more opportunity for each one of us.

Wednesday, October 20, 2010

Japan's lead in robotics might be attributable to...

...its religion. Or, at least one of them.

Regulation Isn't Free

Associated Press:
Bank of America, which does business with half the households in America, announced a dramatic shift Tuesday in how it does business with customers. One key change: Free checking, a mainstay of American banking in recent years, will be nearly unheard of.

"I've seen more regulation in last 30 months than in last 30 years," said Robert Hammer, CEO of RK Hammer, a bank advisory firm. "The bottom line for banks is shifting enormously, swiftly and deeply, and they're not going to sit by twiddling their thumbs. They're going to change."

In the last year, lawmakers in Washington have passed a range of new laws aimed at protecting bank customers from harsh fees, like the $35 charged to some Bank of America customers who overdrafted their account by buying something small like a Starbucks latte.

So, in order to keep latte-sipping elites who can't manage to balance a checkbook from paying extra charges, we all will.

Regulation may improve the service we get from this or that regulated entity, but it ultimately does so only by increasing our cost. Shouldn't we be free to choose between a high-service but expensive model and a low-service but cheap one?


Used Car Prices Fall for First Time Since Cash for Clunkers

Tuesday, October 19, 2010

I'm Sure They'll Do Much Better With Our Health Records

Bureaucrats Abuse Gov Databases, Snoop On Neighbors And Lindsay Lohan.

Poor Lindsay. She just can't catch a break.

Robert Green:

Six Lessons I've Learned Since I Started Working for Myself

I would add the following: Variable expenses are to always be preferred over fixed ones, even if you end up paying more for a given service.

And They Didn't Even Have PhotoShop!

A famous 1914 photo showing a young Adolf Hitler in the thick of the crowd at a First World War rally – which the Nazis later used as a propaganda picture – was probably faked, German media said Thursday.

Just goes to show ya, never trust a Nazi, or any fascist for that matter.

Has Michael Mann Been Truly Exonerated?

You be the judge.

Sunday, October 17, 2010

Who Needs Health Insurance Then?

Scientists call it the “Hispanic paradox”: despite high rates of poverty and relatively low rates of health insurance, Hispanics in the United States tend to outlive African-Americans and non-Hispanic whites.

A government report last week provided statistical confirmation of the phenomenon. It found that as of 2006, the life expectancy for Hispanics at birth was 80.6 years, 2.5 years more than for non-Hispanic whites and almost 8 years longer than for blacks.

The finding is all the more surprising because Hispanics have lower median family incomes and a higher poverty rate than whites, and are less likely than whites to have a college education — all factors associated with better health. They also have high rates of obesity and diabetes.

So what accounts for the paradox?

Well, here's one theory.

Glenn Reynolds:

Comparing the Soviet Union to the Nazis only makes the Nazis look better if you don’t understand the truth about the Soviet Union. Communists are as bad as Nazis, and communist sympathizers and apologists are as bad as Nazi sympathizers and apologists.


While I'm bashing banks today...

...I thought I'd post a couple of videos that do an excellent job of explaining money--where it comes from, what it is, and what it isn't. The videos were produced by a friend of a friend, Damon Vrabel, founder of the Council on Renewal. I think that some of Damon's conclusions are a little too conspiratorial, but his explanation of the source of money is dead on.

Here's video 1:

And here's video 2:

More people need to understand that the Federal Reserve is not the same as the federal government, and that our government does not print or "coin" money, despite popular belief to the contrary. In fact, the government gets money the same way that the private sector does: By giving the Federal Reserve an IOU in exchange for it, or by getting it from others who have given the Federal Reserve an IOU in exchange for it. Thus, all money, and I do mean all money, enters the system in exchange for an IOU to the Fed. All the nation's wealth and capital is thus held for the benefit of the Federal Reserve. We are merely all paid portfolio managers!

So long as we manage the portfolio well--that is, so long as we put the money lent to us to productive use, or at least a more productive use than the next guy--money is taken from that proverbial "next guy" and is allocated to our management, and we seemingly prosper. This reallocation of money from unproductive debtors to productive ones keeps the both from seeing that, with the latter's increase in money, he is but now a larger debtor! The latter feels "wealthy" while the former feels "poor", in the same way that the emperor's palace guard feels "wealthier" for living in the palace than those on the street, but ultimately all belongs to the emperor and the guard owes more than the beggar!

Because money represents a claim to property, or at least the ability to purchase property, and because all money is ultimately owed back to the Fed, then the Fed is the ultimately beneficiary of all the nation's assets. This is demonstrably true as a matter of logic and, that being the case, it's easy to see how Damon gets conspiratorial at times. Perhaps he's right!

Not surprisingly, this situation is clearly not what Article 1, Section 8 of our Constitution contemplated or requires. When our Constitution was created, money was real money, not just debt. Money was either coined in gold and silver (i.e., it was "real" money), or at least represented a claim to actual gold and silver held in vault for the bearer's account. Regrettably, neither is any longer the case.

Telling It Like It Is

Tyler Durden:
Remember when the pathetic farce that was the stress test presumably prevented Europe's collapse, and served as the inflection point preventing the EUR from hitting parity with the USD? Well, one of the banks that the "stress test" uncovered to be solvent was the recently insolvent Allied Irish Bank, which earlier this month needed a taxpayer injection of billions to presumably make sure that European creditors (and likely Goldman Sachs, very much like the case in Anglo Irish) never see even one dime lost. And today, an Irish Member of the European Parliament Alan Kelly said he intends to write to the EU Competition Commissioner to discover just how it is that one of Ireland's top banks slipped through the stress test cracks only to require a bail out mere months later. It appears that slowly everyone in Europe is starting to turn against the trillions in German bank liabilities that stand to be impaired, and lead to a systemic collapse, unless local taxpayers dutifully reach into their back pocket and make sure fat bankers continue their worry-free existence.

Dang, I'm being kinda hard on the bankers today! Oh well, it's every bit deserved, and more.

Charles Ferguson explains why...

...Larry Summers embodies "so much of what's wrong with economics, academe, and indeed with the American economy":

As a rising economist at Harvard and at the World Bank, Summers argued for privatization and deregulation in many domains, including finance. Later, as deputy secretary of the treasury and then treasury secretary in the Clinton administration, he implemented those policies. Summers oversaw passage of the Gramm-Leach-Bliley Act, which repealed Glass-Steagall, permitted the previously illegal merger that created Citigroup, and allowed further consolidation in the financial sector. He also successfully fought attempts by Brooksley Born, chair of the Commodity Futures Trading Commission in the Clinton administration, to regulate the financial derivatives that would cause so much damage in the housing bubble and the 2008 economic crisis. He then oversaw passage of the Commodity Futures Modernization Act, which banned all regulation of derivatives, including exempting them from state antigambling laws.

After Summers left the Clinton administration, his candidacy for president of Harvard was championed by his mentor Robert Rubin, a former CEO of Goldman Sachs, who was his boss and predecessor as treasury secretary. Rubin, after leaving the Treasury Department—where he championed the law that made Citigroup's creation legal—became both vice chairman of Citigroup and a powerful member of Harvard's governing board.

Over the past decade, Summers continued to advocate financial deregulation, both as president of Harvard and as a University Professor after being forced out of the presidency. During this time, Summers became wealthy through consulting and speaking engagements with financial firms. Between 2001 and his entry into the Obama administration, he made more than $20-million from the financial-services industry. (His 2009 federal financial-disclosure form listed his net worth as $17-million to $39-million.)

Summers remained close to Rubin and to Alan Greenspan, a former chairman of the Federal Reserve. When other economists began warning of abuses and systemic risk in the financial system deriving from the environment that Summers, Greenspan, and Rubin had created, Summers mocked and dismissed those warnings. In 2005, at the annual Jackson Hole, Wyo., conference of the world's leading central bankers, the chief economist of the International Monetary Fund, Raghuram Rajan, presented a brilliant paper that constituted the first prominent warning of the coming crisis. Rajan pointed out that the structure of financial-sector compensation, in combination with complex financial products, gave bankers huge cash incentives to take risks with other people's money, while imposing no penalties for any subsequent losses. Rajan warned that this bonus culture rewarded bankers for actions that could destroy their own institutions, or even the entire system, and that this could generate a "full-blown financial crisis" and a "catastrophic meltdown."

When Rajan finished speaking, Summers rose up from the audience and attacked him, calling him a "Luddite," dismissing his concerns, and warning that increased regulation would reduce the productivity of the financial sector. (Ben Bernanke, Tim Geithner, and Alan Greenspan were also in the audience.)

Read it and puke.

Look, I don't begrudge anyone selfishly pursuing his or her own self interest in a competitive fashion. In my mind, that's what makes our country great and insures our freedom. Because there are so many of us, and because each of our interests are so varied, none of us stands much of a chance of gaining a secure, long term advantage over our fellow man and our freedom is thus assured--that is, unless the government takes sides.

And, that's my beef with the likes of Summers. Summers co-opted the government to change the rules in such a way that his interests (and the interests of his cronies) were favored over others, making them all rich. And, because the resulting economic changes were government subsidized--indeed, government mandated and enforced, even over the will of the states at times--they weren't real. The boom times weren't the result of a competitive "free market" run amok, but rather a market steered and corrupted from the top to achieve a certain end.

And, even more inexcusably, once it became apparent that the emperor had no clothes--that the boom times were faked and rigged--and that Summers and his cronies were about to lose it all, they didn't have the decency to jump from a tall building in shame. Instead, they once again co-opted government's resources in order to save themselves and their friends at your and my expense.

What a racket.

I can understand why some argue that the only way to check the unbridled ambition of these guys (or anyone, for that matter) is through more regulations. That seems to be the bias of the author quoted above. But, truth be told, more regulation is exactly what these guys want! It was, after all, regulation and government programs that gave these guys their advantage to start with. Irresponsible banks could not have raised capital so cheaply were it not for the FDIC insuring their deposits. Banks would not have loaned so much money to bid up the price of real estate if interest rates hadn't been kept artificially low for an extended period of time by Greenspan. Mortgages wouldn't have become securitized in such great numbers were it not for the likes of Fannie and Freddie. Banks would not have loaned so much to so many sub-prime credit risks had the government not required and/or incentivized them to do so in an untold number of ways.

No, the simple truth is that regulations make government bigger. And, the bigger the government, the larger the prize for successfully corrupting it. Corruption insures success like competition never can. Thus, increased regulation doesn't penalize the wealthy and established in the long-run, as so many believe, but rather it harms the upstarts and innovators who seek to challenge the establishment and keep it honest through competition. You and I stand no chance of corrupting the government, but the establishment always stands a very, very good chance.

Thus, the solution to managing greed isn't a bigger government with more regulation, as so many are suggesting, for if history teaches us anything it is that such a government will always be corrupted to serve the ends of the few. Rather, the solution is a smaller, divided government--one that can't be manipulated to overly favor one group's interests over another. The smaller a government is, the less the benefit from corrupting it, and the more exposed is the establishment.

We had a small federal government once. And it all went away thanks primarily to a few Supreme Court rulings that broadly interpreted Congress's authority to regulate so-called "interstate commerce". Ironically, thanks to Obamacare, the legal rationale of those cases is now being re-examined by the courts.

There's still hope.

Yoga Is a Better Treatment for Chronic Pain Than Standard Remedies

Or so say some researchers.

Australia Gets Its First Saint

Mother Mary MacKillop was briefly excommunicated in 1871 for reporting sex abuse by a priest.

She's a "saint for our times."

More here.

Press Secretary Gibbs: Election to Be Decided on Local Issues

Fox is giving White House Press Secretary Robert Gibbs a hard time for the seemingly silly assertion that:

"I think that campaigns in this cycle are being run on a lot of local issues and issues that are important, not nationally, but to individual states and ... individual congressional districts...".

But actually, I think Gibbs has it about right, though probably not in the way he intended. When a national government becomes totalitarian--that is, when it seeks to control everything from how many miles per gallon your car gets and what benefits you must provide your employees, to which medical procedures you will receive and how much water you consume when you flush the toilet--most every national law becomes a "local issue." I mean, let's face it, you can't get anymore "local" than your own toilet bowl!

Is It Going To Take Someone Getting Shot Before This Kinda Stuff Ends?

Nancy was sitting at home when someone busted the lock on her door. She was afraid she was being robbed, but it turned out that Chase had mistaken her home for a foreclosure and sent someone to change its locks. It took a visit from police to figure that out.

A CNN story says banks commonly uses [sic] the technique, but it usually waits for a home to be actually foreclosed upon before sending in the lock-breaking brigade. Nancy was behind on her payments but negotiating with the bank, which admitted mistakenly sending in the goons but did not apologize for the mix-up.


Fred Siegel:

How environmentalism poisoned liberalism.

Is The US's Credit Rating in Jeopardy?

There are some recent signs that his might be the case.

Ilya Somin has a brilliant post...

...defending libertarians against spurious charges of hard-heartedness.

Judge Expressed Deep Doubts on Health Care Mandate

Lyle Denniston has the full story.

There's hope for this nation yet, I suppose.

Federalist 62:

It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant changes that no man, who knows what the law is to-day, can guess what it will be to-morrow. Law is defined to be a rule of action; but how can that be a rule, which is little known, and less fixed?

--Federalist 62

The Catholic Church Sex Abuse Scandal Runs Deep

How deep? Like Pope deep.

Blame Global Warming

Emeritus Professor of Physics at the University of California, Santa Barbara, Harold Lewis, has resigned his post, blaming global warming. Here is his letter of resignation to Curtis G. Callan Jr, Princeton University, President of the American Physical Society [emphasis added]:

Dear Curt:

When I first joined the American Physical Society sixty-seven years ago it was much smaller, much gentler, and as yet uncorrupted by the money flood (a threat against which Dwight Eisenhower warned a half-century ago). Indeed, the choice of physics as a profession was then a guarantor of a life of poverty and abstinence—it was World War II that changed all that. The prospect of worldly gain drove few physicists. As recently as thirty-five years ago, when I chaired the first APS study of a contentious social/scientific issue, The Reactor Safety Study, though there were zealots aplenty on the outside there was no hint of inordinate pressure on us as physicists. We were therefore able to produce what I believe was and is an honest appraisal of the situation at that time. We were further enabled by the presence of an oversight committee consisting of Pief Panofsky, Vicki Weisskopf, and Hans Bethe, all towering physicists beyond reproach. I was proud of what we did in a charged atmosphere. In the end the oversight committee, in its report to the APS President, noted the complete independence in which we did the job, and predicted that the report would be attacked from both sides. What greater tribute could there be?

How different it is now. The giants no longer walk the earth, and the money flood has become the raison d’ĂȘtre of much physics research, the vital sustenance of much more, and it provides the support for untold numbers of professional jobs. For reasons that will soon become clear my former pride at being an APS Fellow all these years has been turned into shame, and I am forced, with no pleasure at all, to offer you my resignation from the Society.

It is of course, the global warming scam, with the (literally) trillions of dollars driving it, that has corrupted so many scientists, and has carried APS before it like a rogue wave. It is the greatest and most successful pseudoscientific fraud I have seen in my long life as a physicist. Anyone who has the faintest doubt that this is so should force himself to read the ClimateGate documents, which lay it bare. (Montford’s book organizes the facts very well.) I don’t believe that any real physicist, nay scientist, can read that stuff without revulsion. I would almost make that revulsion a definition of the word scientist.

So what has the APS, as an organization, done in the face of this challenge? It has accepted the corruption as the norm, and gone along with it. For example:

1. About a year ago a few of us sent an e-mail on the subject to a fraction of the membership. APS ignored the issues, but the then President immediately launched a hostile investigation of where we got the e-mail addresses. In its better days, APS used to encourage discussion of important issues, and indeed the Constitution cites that as its principal purpose. No more. Everything that has been done in the last year has been designed to silence debate

2. The appallingly tendentious APS statement on Climate Change was apparently written in a hurry by a few people over lunch, and is certainly not representative of the talents of APS members as I have long known them. So a few of us petitioned the Council to reconsider it. One of the outstanding marks of (in)distinction in the Statement was the poison word incontrovertible, which describes few items in physics, certainly not this one. In response APS appointed a secret committee that never met, never troubled to speak to any skeptics, yet endorsed the Statement in its entirety. (They did admit that the tone was a bit strong, but amazingly kept the poison word incontrovertible to describe the evidence, a position supported by no one.) In the end, the Council kept the original statement, word for word, but approved a far longer “explanatory” screed, admitting that there were uncertainties, but brushing them aside to give blanket approval to the original. The original Statement, which still stands as the APS position, also contains what I consider pompous and asinine advice to all world governments, as if the APS were master of the universe. It is not, and I am embarrassed that our leaders seem to think it is. This is not fun and games, these are serious matters involving vast fractions of our national substance, and the reputation of the Society as a scientific society is at stake.

3. In the interim the ClimateGate scandal broke into the news, and the machinations of the principal alarmists were revealed to the world. It was a fraud on a scale I have never seen, and I lack the words to describe its enormity. Effect on the APS position: none. None at all. This is not science; other forces are at work.

4. So a few of us tried to bring science into the act (that is, after all, the alleged and historic purpose of APS), and collected the necessary 200+ signatures to bring to the Council a proposal for a Topical Group on Climate Science, thinking that open discussion of the scientific issues, in the best tradition of physics, would be beneficial to all, and also a contribution to the nation. I might note that it was not easy to collect the signatures, since you denied us the use of the APS membership list. We conformed in every way with the requirements of the APS Constitution, and described in great detail what we had in mind—simply to bring the subject into the open.

5. To our amazement, Constitution be damned, you declined to accept our petition, but instead used your own control of the mailing list to run a poll on the members’ interest in a TG on Climate and the Environment. You did ask the members if they would sign a petition to form a TG on your yet-to-be-defined subject, but provided no petition, and got lots of affirmative responses. (If you had asked about sex you would have gotten more expressions of interest.) There was of course no such petition or proposal, and you have now dropped the Environment part, so the whole matter is moot. (Any lawyer will tell you that you cannot collect signatures on a vague petition, and then fill in whatever you like.) The entire purpose of this exercise was to avoid your constitutional responsibility to take our petition to the Council.

6. As of now you have formed still another secret and stacked committee to organize your own TG, simply ignoring our lawful petition.

APS management has gamed the problem from the beginning, to suppress serious conversation about the merits of the climate change claims. Do you wonder that I have lost confidence in the organization?

I do feel the need to add one note, and this is conjecture, since it is always risky to discuss other people’s motives. This scheming at APS HQ is so bizarre that there cannot be a simple explanation for it. Some have held that the physicists of today are not as smart as they used to be, but I don’t think that is an issue. I think it is the money, exactly what Eisenhower warned about a half-century ago. There are indeed trillions of dollars involved, to say nothing of the fame and glory (and frequent trips to exotic islands) that go with being a member of the club. Your own Physics Department (of which you are chairman) would lose millions a year if the global warming bubble burst. When Penn State absolved Mike Mann of wrongdoing, and the University of East Anglia did the same for Phil Jones, they cannot have been unaware of the financial penalty for doing otherwise. As the old saying goes, you don’t have to be a weatherman to know which way the wind is blowing. Since I am no philosopher, I’m not going to explore at just which point enlightened self-interest crosses the line into corruption, but a careful reading of the ClimateGate releases makes it clear that this is not an academic question.

I want no part of it, so please accept my resignation. APS no longer represents me, but I hope we are still friends.



UPDATE:> Here's a link to the APS's response, and the response to the response, mentioned in the comments to this post.

Home Depot Founder...

...Ken Langone calls out Obama, and emphasizes the point I made here in doing so:

A little more than 30 years ago, Bernie Marcus, Arthur Blank, Pat Farrah and I got together and founded The Home Depot. Our dream was to create (memo to DNC activists: that's build, not take or coerce) a new kind of home-improvement center catering to do-it-yourselfers. The concept was to have a wide assortment, a high level of service, and the lowest pricing possible.

We opened the front door in 1979, also a time of severe economic slowdown. Yet today, Home Depot is staffed by more than 325,000 dedicated, well-trained, and highly motivated people offering outstanding service and knowledge to millions of consumers.

If we tried to start Home Depot today, under the kind of onerous regulatory controls that you have advocated, it's a stone cold certainty that our business would never get off the ground, much less thrive. Rules against providing stock options would have prevented us from incentivizing worthy employees in the start-up phase—never mind the incredibly high cost of regulatory compliance overall and mandatory health insurance. Still worse are the ever-rapacious trial lawyers.


More on the Foreclosure Fiasco

This post by John Mauldin is the best explanation I've heard to date of the foreclosure fiasco, and more importantly its potential significance. Read the whole thing (I know, it's long, but do it anyway). This excerpt gives one some sense of the problem:

"So somewhere between the REMICs and MERS, the chain of title was broken.

"Now, what does 'broken chain of title' mean? Simple: when a homebuyer signs a mortgage, the key document is the note. As I said before, it's the actual IOU. In order for the mortgage note to be sold or transferred to someone else (and therefore turned into a mortgage-backed security), this document has to be physically endorsed to the next person. All of these signatures on the note are called the 'chain of title.'

"You can endorse the note as many times as you please...but you have to have a clear chain of title right on the actual note: I sold the note to Moe, who sold it to Larry, who sold it to Curly, and all our notarized signatures are actually, physically, on the note, one after the other.

"If for whatever reason any of these signatures is skipped, then the chain of title is said to be broken. Therefore, legally, the mortgage note is no longer valid. That is, the person who took out the mortgage loan to pay for the house no longer owes the loan, because he no longer knows whom to pay.

"To repeat: if the chain of title of the note is broken, then the borrower no longer owes any money on the loan.

"Read that last sentence again, please. Don't worry, I'll wait.

"You read it again? Good: Now you see the can of worms that's opening up."

To "fix" this problem, some banks engaged in fraud, forging documents in an attempt to reconstruct the chain of title after the fact so that they might foreclose on the property. Mauldin discusses all of this and gives examples.

The long and short of it is that, due to the sloppy securitization of mortgages, it's almost impossible to tell who "owns" the promissory note that your mortgage secures (Mauldin explains why). Thus, even if you've not defaulted, it's very difficult to be sure that you're paying the right party when you send in your mortgage payment each month. And, if not (granted, this is unlikely but possible), you could be forced to double pay if and when the "rightful" party finally appears! Can you imagine what will happen to banks if large numbers of homeowners suspend their monthly payment until they are able to identify with certainly who the actual holder of their promissory note may be? Due to the complexity and sloppiness of the paperwork in question, identifying the rightful payee could take weeks or even months. While this risk is mostly hypothetical at the moment, there's one that's not:

As a result of confusion over the chain of title, title companies are beginning to refuse to provide title insurance to buyers of foreclosed homes, and banks are starting to refuse to participate in short sales. Without title insurance, banks will not finance the purchase. Without financing, purchases declines and prices fall further, and this has a ripple effect throughout the economy. A decline in the number of short sales also decreases sales volume with similar potential effects.

In short, the foreclosure fiasco is bigger than advertised and is only just beginning. Ultimately, congressional action will likely be required to resolve it, but any such action will almost certainly be perceived as Congress once again showing favoritism to the very banks who created the problem to begin with. And, this perception will largely be correct.

Linda Chavez: "Obama Has No Clue"

President Obama has finally admitted that a core premise of his nearly trillion-dollar stimulus package was false. In an interview this week with The New York Times' Peter Baker, the president acknowledged that "there's no such thing as shovel-ready projects," despite the president's near-constant invocation of the term over a two-year period to explain how government spending was going to create jobs.

The president's admission is no minor matter; it goes to the heart of why his economic policies have been such a failure. Not since President Jimmy Carter's confession in 1980 that it took the Soviet Union's invasion of Afghanistan for him to fully understand "what the Soviets' ultimate goals are" has a sitting president so fully exposed his ignorance.

Read the whole thing.

More and more people are beginning to make comparisons to Carter. What we need, on the other hand, is another Reagan.

Bad Mood

Robert Prechter's theory of socionomics is based on the premise that social mood causes events, and not the other way around. Hence, war doesn't cause a decline is social mood, but rather a decline is social mood causes war. Here's how Prechter explains it:

Social mood waxes and wanes positively and negatively. A positive social mood is associated with a host of social phenomena, such as bull markets, bright colors, short skirts, re-election of incumbents, peace, and deregulation. A negative social mood is also associated with a host of social phenomena, such as bear markets, dark colors, falling hemlines, rejection of incumbents, discord, and regulation.

A subtle but important point: Although social mood governs social events, it fluctuates independently of such events. In other words, wherever mood goes, events will follow.

Though he doesn't mention it in the above quote, positive social mood is associated with the formation of political and economic unions, while negative ones are associated with their decrease or destruction. During times of positive social mood, people are accepting of cultural differences, while during periods of negative mood people become far less tolerant, even xenophobic.

Regardless of whether one accepts Prechter's explanation of causality, we are clearly in a time of declining social mood. This week's headlines make this clear:

"Merkel says German multicultural society has failed"

"Italy is closing the door on Gypsies"

Sally C. Pipes offers a glimpse...

...of the future under Obamacare:

The president's health reform plan establishes an astonishing number of new government bodies, including 47 bureaucratic entities and 29 pilot programs. It expands coverage not by making insurance more affordable but by putting millions of people on the government dole -- of the 34 million uninsured expected to obtain coverage, about 20 million will be dropped into Medicaid.

And Obamacare foists scores of expensive mandates on all private insurance plans -- like requiring all policies to cover adult children up to the age of 26 and limiting out-of-pocket spending.

The administration knows full well that these controls will disrupt the private market. In fact, they already have. Principal Financial Group announced that it would stop selling health insurance. The company covers about 840,000 people who get coverage through their employers.

Massachusetts-based Harvard Pilgrim also announced that it would quit offering Medicare Advantage plans to the 22,000 seniors it serves in Massachusetts, Maine and New Hampshire at year's end because of low reimbursement rates from the feds.

These folks would likely beg to differ with the president, who repeatedly promised during his campaign for reform that you could "keep your health plan if you like it." The administration now estimates that 117 million people will have to change their health plans by 2013.

Many employer-provided plans will become illegal overnight. The Lewin Group estimates that 17 million people will be forced out of their employer-sponsored health plans because of the new rules. Nearly 4 million of those folks will wind up in Medicaid.

Friday, October 15, 2010

America is Drowning in Law

Philip K. Howard:
Government is broken and the economy is gasping. The reason is the same: Americans no longer feel free to roll up their sleeves and make the choices needed to fix things. Governors come to office and find that 90% of the budget is pre-committed to entitlements and mandates enacted by politicians long dead. Teachers no longer have authority to maintain order in the classroom.

Legal mandates and entitlements have accumulated, like sediment in the harbor, until it is almost impossible for Americans to get anywhere without trudging through a treacherous legal swamp. Only big businesses, not small entrepreneurs, have the size (and legal staffs) to power through the legal sludge.

America will thrive only so long as Americans wake up in the morning believing they can succeed by their own efforts. Innovation, not cheap labor, is the economic engine of America. The net increase in jobs since 1980, according to research at the Kauffman Foundation, is attributed solely to newly-started businesses.

Unleashing these powerful human forces requires, however, an open field for individual opportunity - bounded by reliable legal structures that enforce contracts and other important social norms.

Instead, the land of opportunity is more like legal quicksand. Small business owners face legal challenges at every step. Municipalities requires multiple and often nonsensical forms to do business. Labor laws expose them to legal threats by any disgruntled employee. Mandates to provide costly employment benefits impose high hurdles to hiring new employees. Well-meaning but impossibly complex laws impose requirements to prevent consumer fraud, provide disability access, prevent hiring illegal immigrants, display warnings and notices and prevent scores of other potential evils. The tax code is incomprehensible.

All of this requires legal and other overhead - costing 50% more per employee for small businesses than big businesses.

Read the whole thing.

Mr. Howard has nailed America's problem exactly. As an owner in several small businesses, I can vouch for the fact that compliance with government regulations and mandates is an ever increasing burden that consumes tremendous resources. Franky, I'm shocked that America managed to rank 8th worldwide in economic freedom. I can't imagine how difficult it must be to do business in these other countries!

Truth be told, regulations are so extensive and consuming that no small business (or large one for that matter) can possibly comply with them all. And, the fact that these laws and regulations were passed by an elected government doesn't make them any any less intrusive or more justifiable. As Federalist 62 states:

It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant changes that no man, who knows what the law is to-day, can guess what it will be to-morrow. Law is defined to be a rule of action; but how can that be a rule, which is little known, and less fixed?

The problem with massive regulation is that it undermines the Rule of Law. As Madison suggested in Federalist 62, the Rule of Law can only function as a rule of conduct when the laws are reasonable in number, understandable in wording, promulgated in advance, and relatively constant. Can anyone seriously suggest that this is the case today?

And, where this is not the case, the Rule of Law no longer governs. Instead, we are subjected to the arbitrary and capricious determinations of this or that government official who may or may not choose to enforce the voluminous and often vague rules against us in any given instance. Can anyone imagine a situation any more ripe for corruption? Is it any wonder that large businesses pay billions in "protection money" to the public sector in the form of campaign contributions? How can small businesses with less resources expect to compete?!

The result is that large companies have a huge advantage over small and medium sized businesses when it comes to dealing with the government. Only large companies have the economies of scale to employ legions of lawyers to insure compliance with the rules, or to defend the company when it gets caught breaking them, or to obtain waivers so that the company may simply ignore the rules that apply to you and me, or to buy off politicans.

The sad truth of our present situation is that most every single small business could, at the whim of some government bureaucrat, be fined out of existence for breaching this or that regulation. It is only limited government resources that prevent these bureaucrats from putting all of us out of business. If bureaucrats could successfully enforce every one of these regulations against every business, economic activity would cease.

We convince ourselves that America is a capitalist country, and some of us take great pride in that fact. But, is it really? If we define socialism in the strictest sense as government ownership of the means of production, then America is indeed capitalist by comparison. But when the government can, via regulation, dictate with great precision how each of us conducts our business, and when the government can, via taxation, confiscate upwards of half of our profits, does it really matter whether the government technically "owns" your business's stock? Emphasizing lack of government ownership under these circumstances is to make a distinction without a difference.

Why the Foreclosure Fiasco Matters

Charles Hugh Smith explains.

More here.

And John Weisenthal has some related thoughts.

This is beginning to look like a big deal.

Big Bang?

Or, big bounce?

US Falls to 8th in Economic Freedom Ranking

John Stossel:
For the past 16 years, the index has ranked the world's countries on the basis of their economic freedom -- or lack thereof. Ten criteria are used: freedoms related to business, trade, fiscal matters, monetary matters, investment, finance, labor, government spending, property rights and freedom from corruption.

The top 10 countries are: Hong Kong, Singapore, Australia, New Zealand, Ireland, Switzerland, Canada, the United States, Denmark and Chile.

The bottom 10: Republic of Congo, Solomon Islands, Turkmenistan, Democratic Republic of Congo, Libya, Venezuela, Burma, Eritrea, Cuba, Zimbabwe and North Korea.

The index demonstrates what we libertarians have long said: Economic freedom leads to prosperity. Also, the best places to live and fastest-growing economies are among the freest, and vice versa. A society will be materially well off to the extent its people have the liberty to acquire property, start businesses, and trade in a secure legal and political environment.

We're with the government...

...and we're here to help you flush your toilet.

Seriously, if the government can tell you what type of toilet you must use, what can't it tell you.

Scientists Discover Cause of Cancer

And, it is us.

Now He Tells Us

“Infrastructure has the benefit of for every dollar you spend on infrastructure you get a dollar and a half in stimulus because there are ripple effects from building roads or bridges or sewer lines,” Mr. Obama said in the Times magazine piece. “But the problem is, is that spending it out takes a long time, because there’s really nothing — there’s no such thing as shovel-ready projects.

I couldn't begin to count the number of times that the Big O used the term "shovel ready" when selling the stimulus package. Which begs the question: Was he lying, or just ignorant/incompetent?


No Social Security cost of living adjustments for next year:

The Social Security Administration said Friday inflation has been too low since the last increase in 2009 to warrant an increase for 2011. The announcement marks only the second year without an increase since automatic adjustments for inflation were adopted in 1975. The first year was this year.

Tuesday, October 12, 2010

Deflation is Here, and Google (At Least) Knows It
Google is using its vast database of web shopping data to construct the ‘Google Price Index’ – a daily measure of inflation that could one day provide an alternative to official statistics.

The work by Google’s chief economist, Hal Varian, highlights how economic data can be gathered far more rapidly using online sources. The official Consumer Price Index data are collected by hand from shops, and only published monthly with a time lag of several weeks.

At the National Association of Business Economists conference in Denver, Colorado, Mr Varian said that the GPI was a work in progress and Google had not yet decided whether to publish it.

While the Federal Reserve is unlikely to panic just yet, Mr Varian said that the GPI shows a “very clear deflationary trend” for web-traded goods in the US since Christmas.

One of the reasons that the official government statistics haven't picked up on this clear deflationary trend is that they exclude so much. For instance, the Consumer Price Index doesn't consider real estate prices, but rather assigns real estate a somewhat arbitrary "rent value" and then tracks changes in rents rather than changes in the value of the underlying real estate.

For these reasons and others, official government statistics are increasingly a joke. Not only are they highly politicized (and therefore manipulated), but they use techniques from the 1960's to measure things that were relevant to the economy of the 1940's.

Consequently, I'm a big fan of "unofficial" economic statistic produced by the private sector--statistic such as those produced at, the Consumer Metrics Institute, and hopefully soon, Google. Private numbers are more current, less politicized, and far more relevant.

Pension Panic
Big US cities could be squeezed by unfunded public pensions as they and counties face a $574 billion funding gap, a study to be released on Tuesday shows.

The gap at the municipal level would be in addition to $3,000 billion in unfunded liabilities already estimated for state-run pensions, according to research from the Kellogg School of Management at Northwestern University and the University of Rochester.

“What is yet to be seen is how this burden will be distributed between state and local governments and whether the federal government will be called upon for bail-outs,” said Joshua Rauh of the Kellogg School.

I predict riots if the Feds start bailing out fat pensions for State employees while letting those of private sector workers sink.

Monday, October 11, 2010

It's Silly Season

Hey dude, "jigger" rhymes with...the "n" word.


"Securities laws, like taxes, are for the little people."

I've never felt so little before.

Oh So French

France faces major disruption Tuesday for the fourth time in a month as workers take to the streets -- this time threatening open-ended strikes -- to fight plans to raise the retirement age to 62.

I think the retirement age should be 40.

Poor Obama

Even Time magazine's Mark Halperin is turning on him:

With the exception of core Obama Administration loyalists, most politically engaged elites have reached the same conclusions: the White House is in over its head, isolated, insular, arrogant and clueless about how to get along with or persuade members of Congress, the media, the business community or working-class voters. This view is held by Fox News pundits, executives and anchors at the major old-media outlets, reporters who cover the White House, Democratic and Republican congressional leaders and governors, many Democratic business people and lawyers who raised big money for Obama in 2008, and even some members of the Administration just beyond the inner circle.

On Friday, after the release of the latest bleak unemployment data — the last major jobs figures before the midterms — Obama said, "Putting the American people back to work, expanding opportunity, rebuilding the economic security of the middle class is the moral and national challenge of our time." But elites feel the President has failed to meet that challenge and are convinced he will be unable to do so in the remainder of his term. Moreover, there is a growing perception that Obama's decisions are causing harm — that businesses are being hurt by the Administration's legislation and that economic recovery is stalling because of the uncertainty surrounding energy policy, health care, deficits, housing, immigration and spending.

And that sentiment is spreading.

When even the Left starts parroting Rush Limbaugh in criticizing Obama, you know the end is nigh.

I'll go out on a limb and predict once again that Obama won't even run for re-election. I don't think his ego could take losing.

Sunday, October 10, 2010

Those Amazing Stem Cells

Scientists create adult stem cells that can replicate continuously. This could be big.

Steve Jobs Gives Business Advice:

"Get rid of the crappy stuff."

Get 32 Gigabytes...

...of additional storage on a microSD card for less than $90.

That's crazy.

Don't Understand the Growing Foreclosure Scandal?

Here's a tutorial that I found helpful.

On a related note, The Consumerists documents "Bank of America's Five Greatest Foreclosure F*ck-Ups". These are pretty bad.

Virginia's Governor Supports Repeal Amendment

The amendment would allow two-thirds of the states legislatures to overturn an act of Congress.

I love it! And, in this political climate, it just might pass.

The Black Death Resulted from Bubonic Plague:
Piles of bones and historical records tell us the Black Death pandemic wiped out as much as half the population of Europe during the Middle Ages. But how and what, exactly, caused the grisly scourge has sparked a boxing match of sorts within the pages of scientific journals.

The final bell has rung, according to a new study, and the bubonic plague — which is caused by a bacterium also known as Yersinia pestis — is the winner. What’s more, the authors say the same bacteria caused smaller outbreaks during the next four centuries throughout Europe.

“Our data … ends the debate about the etiology of the Black Death, and unambiguously demonstrates that Y. pestis was the causative agent of the epidemic plague that devastated Europe during the Middle Ages,” the authors wrote in the Oct. 7 issue of PLoS Pathogens.

Nassim Taleb says:

Sue the Nobel committee! In particular, he's not a fan of so-called "modern portfolio theory", nor it's originators, nor especially the Nobel committee that gave it legitimacy:

Taleb singled out the Nobel award to Harry Markowitz, Merton Miller and William Sharpe in 1990 for their work on portfolio theory and asset-pricing models.

“People are using Sharpe theory that vastly underestimates the risks they’re taking and overexposes them to equities,” Taleb said. “I’m not blaming them for coming up with the idea, but I’m blaming the Nobel for giving them legitimacy. No one would have taken Markowitz seriously without the Nobel stamp.”

Taleb is positively brilliant. I thoroughly enjoyed his best-selling book, The Black Swan, or at least the parts that I could understand.

Christian Pedophiles?

Paster Billy McCurdy has been charged on eleven counts in Las Vegas:

"The new charges involve two teen boys who said McCurdy forced them into sexual relationships with him. They told police he used his position in the church and Bible scriptures to force them into sex acts, authorities said."

And Atlanta's Bishop Eddie Long is in a real bind, though even if guilty he may not technically be a pedophile.

Soros weighs in on the...

...looming currency war.

Ozone Falls, Tennessee:

Rev. Karen Chakoian:

By now, you might have seen the results from the Pew Research Center on U.S. Religious Knowledge. The results aren't pretty. Of 32 questions asked, the average was 16 correct answers.

We are woefully ignorant about religion, our own included. Half of the people surveyed could not even name the four Gospels.

You can read Rev. Chakoian's thoughts on why this is the case here.

I would offer a different explanation: When a religion emphasizes faith over knowledge, only the most intellectually inclined and competent of its adherents will bother to learn much about it themselves. The rest are content to to accept on faith what they are told is necessary for salvation. This latter group, representing the vast majority of the faith, are therefore mostly ignorant (and contentedly so). We can't expect them to do well in a survey like that conducted by Pew.

Furthermore, among the minority of intellectuals who do pursue a more complete understanding of their religion, many will develop information that causes them to question orthodox interpretations. After all, the orthodox interpretation is not self-evidently the most reasonable or likely one. Orthodoxy is accepted on grounds of faith, not reason or experience or knowledge. Thus, many of the intellectually inclined will end up leaving their religion, perhaps exploring others, or even becoming agnostics or atheists (and thereby further shrinking the ranks of the knowledgeable faithful even more).

In my mind this explains why agnostics and atheists did so much better than the faithful in the recent religion quiz sponsored by the Pew forum. The startling conclusion that one can draw from the Pew survey results is one that not many are mentioning: The more educated one is about religious matters, the more likely one is to be an agnostic or atheist. In my mind, this, more than anything else, explains why the faithful are on average so startlingly ignorant of their religion: Religious leaders educate their followers at their own peril!

That's not to say that there are no educated persons among the faithful. There are. And many great ones. But such educated faithful are far rarer than they should be.

You can take a sample quiz and test your religious knowledge here.

Crosby Stills & Nash at the Tennessee Theater

Glenn Reynolds Calls Out Obama on His Disingenuous Foreign Money Claims


Steve Keens latest post is titled...

..."Deleveraging with a twist". It's chalked full of insights. Here's just one of his many interesting graphs:

Google's Has Secretly Been Testing a Self-Driving Car

The Official Google Blog:
"Larry and Sergey founded Google because they wanted to help solve really big problems using technology. And one of the big problems we’re working on today is car safety and efficiency. Our goal is to help prevent traffic accidents, free up people’s time and reduce carbon emissions by fundamentally changing car use.

So we have developed technology for cars that can drive themselves. Our automated cars, manned by trained operators, just drove from our Mountain View campus to our Santa Monica office and on to Hollywood Boulevard. They’ve driven down Lombard Street, crossed the Golden Gate bridge, navigated the Pacific Coast Highway, and even made it all the way around Lake Tahoe. All in all, our self-driving cars have logged over 140,000 miles. We think this is a first in robotics research."

I knew that DARPA has been testing these things for a while, but I guess I didn't realize how far we'd come.

UPDATE:> Here's video of a google car on the move:

Google Computer-Driven Prius from Ben Tseitlin on Vimeo.

Why Real Personal Income May Never Grow Again

Chart of the Week.

Wednesday, October 6, 2010

This is Way Cool, and Little Scary:

"MIT discovers yet another use for a simple webcam: measuring your pulse rate. It's desktop video-chatting and heart physician in one tiny unit.

The work is the result of studies by graduate student Ming-Zher Poh, and it's all about a clever algorithm that looks at a webcam feed of your face and measures subtle brightness changes in your skin over time. It's possible, Poh found, to calculate the pulse rate of a person on camera by using a public-domain face-tracking solution and then examining the different color channels of a face in a video feed. The trickiest part wasn't even the pulse detection, but accounting for all the lighting and color effects as the subject's face naturally moved in the ambient lighting conditions. Overcoming this involved adapting algorithms from those in voice recognition systems that isolate a particular voice from a room of other voices."

Read the whole thing.

I can see additional uses for this technology that have severe privacy implications, such as checking the pulse and respiration rates of everyone passing through an airport security line.

Japan Officially Makes Zero Interest Rates Its Goal

Again. The US can't be far behind.

How A Team at Apple Reinvented the Music Industry

With the iPod.

I'll say it again: Technology is subversive.

See famous artwork in...

...ultrahigh resolution. really, really, really high resolution. Like 28 billion pixels high.

Astronomical Singularity?

Astronomy could be the first discipline in which the rate of discovery by machines outpaces humans' ability to interpret it.

Robot Revolution
"As you read this, an Italian van is driving itself to Shanghai. Thousands of robots are gliding through hospital hallways, standing in for doctors and toting supplies. Seven thousand unmanned planes are patrolling Iraq and Afghanistan, and more than 3,000 robo-sherpas are carrying heavy loads for U.S. soldiers. From Pittsburgh to Tokyo, senior citizens are therapeutically cuddling $6,000 furry “Paro” devices that wriggle and trill in response, 200 humans in Denmark are “certified robot therapists,” and 150,000 robot lawn mowers are clipping grass from St. Andrews, Scotland to the Great Lawn in Central Park.

Robots are now reaching sufficient numbers in some areas to begin changing the way many of us live and work."

Read the whole thing.

Are Monkeys Self-Aware?

Some are, it seems.

A New Bible Translation is Here

But, why?

The American Bible Society says there are 32 translations on the North American market, while Christian Book Distributors offers over 50. offers 23 English versions. In his research for a book on translations, Phoenix Seminary professor Paul Wegner identified nearly 100 English versions by 1950. He estimates there are twice as many now, although only a handful controls a dominant share of the market.

As I discuss in some detail here, we have so many translations for two reasons: (1) disagreement among scholars and theologians over which ancient documents should serve as the original "source texts" from which the English translation is then constructed, and (2) disagreements over how to best translate the selected source text into English. As a result of such disagreements, it seems that there's now at least one translation that will support most any theological position.

This makes traditional Protestant appeals to biblical authority suspect, and at least partially explains how and why we have so many different protestant sects today. Catholics at least vest authority in the Pope rather than in scripture, and since there's always a Pope alive to settle any theological misunderstandings, Catholics largely avoid (with a few notable exceptions) the schims that plague protestantism, though vesting such authority in any man has its own drawbacks.


Not only do they stink, they smell!

Ya Think?!

"The average American doesn’t realize how much of the laws are written by lobbyists" to protect incumbent interests, Google CEO Eric Schmidt told Atlantic editor James Bennet at the Washington Ideas Forum. "It’s shocking how the system actually works."

In a wide-ranging interview that spanned human nature, the future of machines, and how Google could have helped the stimulus, Schmidt said technology could "completely change the way government works."

"Washington is an incumbent protection machine," Schmidt said. "Technology is fundamentally disruptive."

Full story here.

Yes, technology is inherently subversive. I'm just hoping that it is subversive enough to reform Washington.

I will be forever grateful to one my my law school professors, Carl Pierce, for pointing out in a variety of compelling ways just how much "regulation" is designed to protect politicians and the establishment rather than the public.

Nobel Prize goes to the...

inventor of the thinnest material ever made.

This Surprises Me

The iPad is the fastest selling consumer gadget in history:

"McGranahan points out that Apple sold 3 million iPads within the first 80 days of launch. By contrast, there were a million iPhones sold in the first quarter of release... and only 350,000 DVD players sold in all of 1997. Keep in mind, when it comes to non-phone electronics products, McGranahan says that DVD players had the fastest adoption rate ever before the iPad (presumably meaning new categories of gadgets). The sales rate of the iPad after one quarter matches up with the DVD sales rate after five years. The iPod's first year? A similarly modest 375,000 devices sold."