Friday, November 26, 2010

Every bank safe deposit box in Germany is filled with Silver and Gold

There does not seem to be to an ending to the banking and debt crisis contagion in Europe.

On Friday, the gap in yields between German and Spanish 10-year government bonds hit a record high of 2.63%. This, before there is a firm agreement on the Irish problem. Spain’s budget deficit is 11.1%

The yield premium to buy Italy’s 10-year debt over German bunds reached a euro-era record 1.9% on Nov. 12, yet Italy is in itself doing a better job than either Ireland or Spain. Ireland’s deficit of 14.3% in 2009 was almost three times Italy’s deficit of 5.3%.

Keep in mind that European rules dictated spending deficits of under 3%.

Greece is still a problem and the Bundesbank chief Axel Weber claimed the EU had set aside enough money to cover the borrowing needs of the euro zone's worst debtors -- Greece, Ireland, Portugal and Spain -- but could muster more if needed.

Oh, really? Where is all that money going to come from? Germany?

___________________________________


EU rescue costs start to threaten Germany itself

The escalating debt crisis on the eurozone periphery is starting to contaminate the creditworthiness of Germany and the core states of monetary union.


By Ambrose Evans-Pritchard 6:00AM GMT 26 Nov 2010
Telegraph

Credit default swaps (CDS) measuring risk on German, French and Dutch bonds have surged over recent days, rising significantly above the levels of non-EMU states in Scandinavia.

"Germany cannot keep paying for bail-outs without going bankrupt itself," said Professor Wilhelm Hankel, of Frankfurt University. "This is frightening people. You cannot find a bank safe deposit box in Germany because every single one has already been taken and stuffed with gold and silver. It is like an underground Switzerland within our borders. People have terrible memories of 1948 and 1923 when they lost their savings."

The refrain was picked up this week by German finance minister Wolfgang Schäuble. "We're not swimming in money, we're drowning in debts," he told the Bundestag.

While Germany's public and private debt is not extreme, it is very high for a country on the cusp of an acute ageing crisis. Adjusted for demographics, Germany is already one of the most indebted nations in the world.

Reports that EU officials are hatching plans to double the size of EU's €440bn (£373bn) rescue mechanism have inevitably caused outrage in Germany. Brussels has denied the claims, but the story has refused to die precisely because markets know the European Financial Stability Facility (EFSF) cannot cope with the all too possible event of a triple bail-out for Ireland, Portugal and Spain.

EU leaders hoped this moment would never come when they launched their "shock and awe" fund last May. The pledge alone was supposed to be enough. But EU proposals in late October for creditor "haircuts" have set off capital flight, or a "buyers' strike" in the words of Klaus Regling, head of the EFSF.

Those at the coal-face of the bond markets are certain Portugal will need a rescue. Spain is in danger as yields on 10-year bonds punch to a post-EMU record of 5.2pc.

Axel Weber, Bundesbank chief, seemed to concede this week that Portugal and Spain would need bail-outs when he said that EMU governments may have to put up more money to bolster the fund. "€750bn should be enough. If not, we could increase it. The governments will do what is necessary," he said.

Whether governments will, in fact, write a fresh cheque is open to question. Chancellor Angela Merkel would risk popular fury if she had to raise fresh funds for eurozone debtors at a time of welfare cuts in Germany. She faces a string of regional elections where her Christian Democrats are struggling.

Mr Weber rowed back on Thursday saying that a "worst-case scenario" of triple bail-outs would require a €140bn top-up for the fund. This assurance is unlikely to soothe investors already wondering how Italy could avoid contagion in such circumstances.

"Italy is in a lot of pain," said Stefano di Domizio, from Lombard Street Research. "Bond yields have been going up 10 basis points a day and spreads are now the highest since the launch of EMU. We're talking about €2 trillion of debt so Rome has to tap the market often, and that is the problem."

The great question is at what point Germany concludes that it cannot bear the mounting burden any longer. "I am worried that Germany's authorities are slowly losing sight of the European common good," said Jean-Claude Juncker, chair of Eurogroup finance ministers.

Europe's fate may be decided soon by the German constitutional court as it rules on a clutch of cases challenging the legality of the Greek bail-out, the EFSF machinery, and ECB bond purchases.

"There has been a clear violation of the law and no judge can ignore that," said Prof Hankel, a co-author of one of the complaints. "I am convinced the court will forbid future payments."

If he is right – we may learn in February – the EU debt crisis will take a dramatic new turn.

163 comments:

  1. Ironic that 65 years after the fall of the Thousand Year Reich, the future of Europe rides on German shoulders.

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  2. Well, if the "people" in Germany actually remember losing their savings in 1923 then they do have the oldest population in the whirled.

    No doubt of that.

    If they really can recall losing their savings, in 1948, it still makes them ancient.

    I would venture that the people of Germany have heard the horror stories told by their predecessors, and have taken them to heart, rather than relying upon their own memories of the events.

    That the aging population of Germany has not been biologically productive, that it is not growing its base, has been evident for decades, now.

    That is, in part, why they are having immigration and assimilation challenges, with the ethnically Turkish segment of their residents. The Germans encouraging that immigration but denying any opportunity for assimilation.

    Trying times, indeed, when the poor policies of the past come to bite the ass of those living in the present.

    ReplyDelete
  3. Not bearing children, for private, short term, economic prosperity, does carry with it a long term societal costs.

    The Europeons are discovering this, first hand, the Chinese soon will, too.

    Depending upon the State, rather than sons and daughters only works when the neighbors keep producing sons and daughters.

    If you have to import the sons and daughters from afar, the domestic society, as it once was, will crumble around the ears of those that refused to bear the costs of raising their own children.

    Or raising them poorly, as in the US, where only 25% of those coming of age are physically or morally capable of military service.

    ReplyDelete
  4. The long term effects of liberal procreation policies, the 40 million plus abortions in the United States, causing US to "go brown".

    As it has in Europe.

    There are always consequences that were unforeseen, by the masses, to "social progress".

    ReplyDelete
  5. Really, Why COULDN'T We
    All Get Together And Do This?



    It's what I think of as fun. And we are damned near family, by now.

    ReplyDelete
  6. August, that would be the month. I'll pay the fees, but you got to get there and back on your own dime.

    ReplyDelete
  7. You folks from Philly and Detroit and Mississippi and Florida and Ohio it would do you good to get out west just once, fill your lungs with cedar scented air, listen to the rush sound of the white water river.....

    ReplyDelete
  8. We end up in Riggins, Idaho

    They have a first class hotel there now, and a couple of good bars.


    :)

    A man can dream, can't he? Someone said, dreams are good.

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  9. "If you have to import the sons and daughters from afar, the domestic society, as it once was, will crumble around the ears of those that refused to bear the costs of raising their own children"

    ---

    Yet some, including the author of the snippet above, insist that this is not happening in the USA due to the massive influx of poorly educated immigrants from the south. who not only choose not to assimilate, but transform their neighborhoods into mirror images of the countries from which they fled.

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  10. When the Dream is an airliner, the Dreamliner turns into a nightmare.

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  11. They should come out and enjoy the spoils of Federal Socialism, bob.

    They pay for it, may as well get to enjoy it.

    I certainly do, every day.

    Traded the beach, for the mountains. This year was the commercial horse permit, next year we'll apply for the river guide.

    Had to put the beach off, for a few years and go back to the future, decided I should to profit from Federal Socialism, before I go south of the border.

    There is some fabulous white water in Mexico, Costa Rica and Panama though, to be sure.

    This fellow can show the folks either Idaho or Mexico, as taste dictates. The kayaks, they are a better experience and a lot more fun than the rafts.

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  12. Boeing 787 Is Set Back as Blaze Forces Fix


    And while the Boeing and Airbus incidents' causes were different, they both resulted in widespread electrical failures, prompting air-safety experts to look at ways to further safeguard critical electrical circuits. The events also highlight the reliance of new planes on potentially fickle software and electrical systems.

    The A380, the world's biggest commercial aircraft, was about two years behind schedule and nearly $7 billion over budget when it was first delivered in 2007. Airbus still hasn't managed to ramp up production to levels it had previously anticipated.
    ---

    The fire involved a large power panel inside the aft electronics bay, which is located under the cabin floor, just behind the left wing. The panel uses power supplied by the plane's left engine to help feed electricity to systems throughout the aircraft.
    A post-fire power interruption caused a series of cascading power failures that affected many of the plane's systems, including autothrottle, computer flight-deck displays and electronic flight controls.

    Some of the Dreamliner's backup emergency systems kicked in, including a Ram Air Turbine, a small backup generator that automatically deploys in the event of a major power failure.

    But many of the 787's redundant electrical systems appeared to fail. Boeing long has maintained that the sophisticated electronics and software aboard the new Dreamliner were designed with many backups to avoid the kind of power-failure scenario encountered during the fire.

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  13. No, doug, I do not insist it is not happening.

    I know it is happening.
    I know there is no stopping it.
    I know that if we do not manage it better, it'll just get worse.

    I know that the Federals will not defend the border, that we have a "One Americas" policy that cannot change be changed.

    I know it is bi-partisan in nature.
    Ask the Bush Republicans.

    They are still the dominant force, in the GOP.

    ReplyDelete
  14. I recall you saying we were transforming Latin America into us, rather that vice versa.

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  15. I am in favor of making the immigrants legal, not continuing the policies of "gray economy" and maintaining a large segment of the population that will not cooperate with Law Enforcement.

    I know we will not be deporting 15 million people from the US.

    I favor assimilating them, not ostracizing them with Federal policies that promote fear.

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  16. To the extent that the likes of the Bushes remain ascendant, the GOP is doomed.

    W, his dad, and their ladyfolk are the worst thing that ever happened to the grand old party.

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  17. We are, but I also said that the US would not remain as it was.

    The flavor of the mix, in the melting pot will change. How much it changes, that's manageable. If of course, we do not bury our heads in the sand.

    There is no way to reverse the present consequences of past social policies.

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  18. Those 40 million Americans that were aborted, they won't be coming beak.

    We've replaced them with immigrants.

    All that is open to discussion is what the status of those immigrants should be.

    I oppose maintaining 15 million or so people in the gray economy and illegal status, while they are living here, amongst US.

    It is a foolish thing to do.

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  19. Legalizing whatever immigrants remain after self-deportation following the securing of the border would be a good thing.

    Giving all who are presently here citizenship and the right to vote would be the height of foolishness.

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  20. Well, doug, that may be true, about the effect the Bushies have had on the GOP.

    But they are not leaving the game.

    Jeb is a nice guy, I've read, here.

    He and his are in it, up to their necks, and not getting out.

    Not for the next twenty years, anyway. Without them and theirs there is no GOP.

    Not after the thirty years they've spent "building" that Party.

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  21. ...leading to new hordes as did Reagan's Amnesty.

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  22. I have often said that we should make the legal, but have also said that there is no need to make them citizens.

    That would be left to their children, those that are born here.

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  23. They should stay in Texas, Kennebunkport, and Florida!

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  24. Gotta go enjoy the fruits of Federal Socialism, on the Tonto, have a nice day.

    ReplyDelete
  25. "I have often said that we should make the legal, but have also said that there is no need to make them citizens."

    Agreed.

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  26. That could be the compromise. Illegals can become residents, but cannot become voting citizens without going through the entire process.

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  27. "A white woman is kidnapped from her home by Apache Indians. Traded to the Mojave Indians, she lives as a squaw for 11 years until she is found by her husband. Unfit for society he keeps her in a shack in the desert."

    Is it possible that 'Rat has been maligning polygamist Mormons as a smokescreen for his own Woman of the Dunes???

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  28. Blogger desert rat said...

    "Not bearing children, for private, short term, economic prosperity, does carry with it a long term societal costs."


    At some point we will reach a limit as to the benefits of population growth. People can be like cancer and we may kill off our host. We may want to rethink our economic policies to become less dependent upon continual growth.

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  29. Now you know Spain is in trouble.
    Spain has warned financial traders betting against its debt that they will lose money, in a defiant challenge to the markets which are driving Madrid’s cost of borrowing sharply higher according to José Luis Rodríguez Zapatero, Spanish prime minister.

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  30. We could change our model to become reliant on productivity over growth, investment over consumption.

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  31. "We may want to rethink our economic policies to become less dependent upon continual growth."

    The largest rethink will have to concern Social Welfare Ponzi Schemes.

    ReplyDelete
  32. ...productivity and investment are victims of said ponzi schemes.

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  33. 150 million peoples is enough. We are over 300 millions now.

    Enough, already!

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  34. Sounds reasonable Deuce though our prime investment vehicle, the stock market, has taken on a Casino like aura where success seems to depend more on second guessing 'investors' perceptions as opposed to participating in the actual success or failure of particular companies. In addition companies appear to be run more for the benefit of the managers than the shareholders.

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  35. Did you notice this? --

    For every 100 females age 18 and over, there were 94.3 males.

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  36. Owyhee Desert

    Lots of ghost towns there, kinda neat.

    We've got everything in Idaho, except a seacoast and beach.


    We birthed Sarah Palin. And she took hold, good.

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  37. McCall, Idaho

    Out of college, I lived for a year in The Yacht Club there, upstairs, over the bar, reading books.

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  38. I guess it shows, that I love my state.

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  39. The Coeur d' Alene Resort is where I take my daughter for the best foods, and not vegetarian either.

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  40. Harrison, Idaho

    Right across the lake in
    Cleland Bay is where I had my hut.

    My commie cousin used to swim over to Harrison, and back.

    In the old days, there were bears on the beach.

    O memory!

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  41. And there was One Shot Charlies, in Harrison.

    I remember another cousin of mine getting so goddamned drunk he fell asleep in someone else's boathouse:)

    And I recall, my sis an' me, skinny dipping very very late at night, sometimes even with the Northern Lights flashing.

    It was lovely....

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  42. California Government is The Blob

    ...California Governors Mentoring Partnership
    California Governors Office
    California Governors Office of Emergency Services
    California Governors Office of Homeland Security
    California Governors Office of Planning and Research
    California Grant and Enterprise Zone Programs HCD Loan
    California Health and Human Services Agency
    California Health and Safety Agency
    California Healthy Families Program
    California Hearing Aid Dispensers Bureau
    California High-Speed Rail Authority
    California Highway Patrol (CHP)
    California History and Culture Agency
    California Horse Racing Board
    California Housing Finance Agency
    California Indoor Air Quality Program
    California Industrial Development Financing Advisory Commission
    California Industrial Welfare Commission
    California InFoPeople
    California Information Center for the Environment
    California Infrastructure and Economic Development Bank (I-Bank)
    California Inspection Services
    California Institute for County Government
    California Institute for Education Reform
    California Integrated Waste Management Board
    California Interagency Ecological Program
    California Job Service
    California Labor and Employment Agency
    California Labor and Workforce Development Agency
    California Labor Market Information Division
    California Land Use Planning Information Network (LUPIN)
    California Lands Commission
    California Landscape Architects Technical Committee
    California Latino Legislative Caucus
    California Law Enforcement Branch
    California Law Enforcement General Library
    California Law Revision Commission
    etc

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  43. It is interesting you should bring up the government of California Doug.

    A few weeks ago I was driving through Pittsburgh and I had the radio tuned to a local conservative talk radio show. The guy was really grinding on about how the elites treat most of America as simply fly-over country as they jet back and forth from the coasts.

    Then you have the European states problems. That crisis is now, again. What will the future hold as the US confronts the varied problems of its States?

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  44. .
    We could change our model to become reliant on productivity over growth, investment over consumption.

    You seem to miss the irony built into the dichotomies you have set up.

    GDP growth is built on two factors productivity and growth. Over the past thirty years productivity growth has been extremely good, median wages stagnant, and growth decent. The overall result today? Massive unemployment in the industrialized countries.

    More productivity, less growth? Sounds good. Taken to the extreme, you have one guy pushing a button but no one else having jobs in order to buy the cheap and abundant goods produced.

    The advantage? Ash's brave new world of population control. You end up with less people suffering strictly because there are less people to suffer.

    Changes will have to be made but simple dichotomies will not accomplish it. Politics will assure that.

    .

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  45. The hell with politics. That's not what it is about.

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  46. This comment has been removed by the author.

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  47. Quirk wrote:

    "Ash's brave new world of population control."


    Gee, you make it sound like eugenics or something. I'm not really advocating a top down control of population growth through increased abortion or a one child China policy but less government incentive for immigration growth to offset declining birth rates with an eye to continued population growth could be desirable. In short, capping immigration to levels that maintain a flat line on population growth.

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  48. "Before the bank bust, Ireland had little public debt. But with taxpayers suddenly on the hook for gigantic bank losses, even as revenues plunged, the nation’s creditworthiness was put in doubt. So Ireland tried to reassure the markets with a harsh program of spending cuts.

    Step back for a minute and think about that. These debts were incurred, not to pay for public programs, but by private wheeler-dealers seeking nothing but their own profit. Yet ordinary Irish citizens are now bearing the burden of those debts.

    Or to be more accurate, they’re bearing a burden much larger than the debt — because those spending cuts have caused a severe recession so that in addition to taking on the banks’ debts, the Irish are suffering from plunging incomes and high unemployment.

    But there is no alternative, say the serious people: all of this is necessary to restore confidence. "

    http://www.nytimes.com/2010/11/26/opinion/26krugman.html?_r=1&hp

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  49. .
    Quirk wrote:

    "Ash's brave new world of population control."


    Sorry for the snarky comment, Ash.

    It was a general comment on growth and you just happened to have made a previous comment.

    Unfortunately, on occasion, I find myself endulging in a widespread practice here of downplaying your opinions. A cheap shot since there is little chance that the usual suspects here will object.

    I admit you have some good ideas now and then although I disagree with most on political and philosophical grounds.

    All that being said, I disagree with your contention on the issue of immigration. Politically, with the high unemployment we have right now, it will be almost impossible to get any kind of immigration reform passed. However over the next 25 years, given the demographics of our aging population, we will need immigration to meet our needs. But I am not talking more Mexican laborors. I still am opposed to ANY illegal immigration.

    However, our laws should be amended to allow in qualified immigrants that have the scientific and technical skills we will need going forward.

    .

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  50. .
    Step back for a minute and think about that. These debts were incurred, not to pay for public programs, but by private wheeler-dealers seeking nothing but their own profit. Yet ordinary Irish citizens are now bearing the burden of those debts...

    Sounds all too familiar.


    .

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  51. Quirk wrote:

    "I admit you have some good ideas now and then although I disagree with most on political and philosophical ground"

    Yeah, you are a bird of a feather with your buddy Bob.

    ReplyDelete

  52. Thinking of All These Good Small Idaho Towns


    We used to water ski up the Joe then have lunch at St. Maries.

    Just reminisin'...

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  53. Hell, Ash, I agree with you, we need to keep the population down, if that is what you are saying.

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  54. Q, au contraire.

    If you have productivity increase while allowing illegal immigration you place emphasis on cheap labor at the expense of more costly capital. There is no productivity increase, only greater unit production with cheap labor.

    That cheap labor comes with a social cost not borne by the employer but is mostly shifted to society.

    Illegal immigration is a net wage deflater.

    Outsourcing to cheap labor markets further undermines productivity. You only have to visit a few factories in China and you will see old obsolete machinery being used by what appears to be an over-staffed labor force.

    A fixed labor pool can only create more output by increasing productivity of work methods, longer hours or capital improvement.

    Improving capital efficiency will more than offset a smaller and older work force.

    You need a social contract and some common sense. You agree on an optimum target level of employment, day 95%. As population in the work force decreases, capital usage has to be increased to maintain supply.

    A country of 315 million people needs no increase in immigration. If we need skills, we train them.

    There are far too many laws and regulations that distort this desirable outcome.

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  55. For every 100 females age 18 and over, there were 95.1 males.

    Love these small Idaho towns.

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  56. The St. Joe River is lined, both sides, with the most beautiful cottonwoods you ever did see.

    Ancient, they are, and wonderful.

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  57. You want mathematicians, scientists and engineers, pay young people to get good grades in those studies.

    Pay $500 for an "A" in high school physics, $400 for a "B" and nothing for any grade under. Follow up with academic scholarships to the best schools and universities, grade based and performance based with no regard for anything else and you will not need to import physicists.

    Throw out all the diversity bullshit and take away the advantage that only comes with money and you will end up with the finest students on the planet.

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  58. Up on Marble Creek, which flows into it, into the Joe, there it was I came into my own, on fly fishing.

    By God, I love that country,

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  59. Agree with Deuce at 12:28. If that immigrant ain't packin' a cure for cancer, or a sackful of investment money send'im back.

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  60. but who will take away the garbage and trim the hedges?

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  61. The garbage truck should be remote-controlled by a college student working part-time.

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  62. Or, just "monitored" by said student. If a farmer doesn't have to "ride" on his tractor a garbage truck surely doesn't need a "driver," and two "throwers" running back and forth.

    ReplyDelete
  63. but who will take away the garbage and trim the hedges?

    For Christ's sake, do it yourself Ash, do it YOURSELF.

    ReplyDelete
  64. and dig the ditches and mind the children and bus the tables and...

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  65. Ash, we have 9.6% Unemployment.

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  66. ...and plant the field.... you ninny..

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  67. "Immigrants" don't dig ditches; men on backhoes dig ditches.

    Waiting tables? Unemployment among the young, and ill-educated is up over 20%.

    Minding the kids? Grandparents. Older kids.

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  68. Europe was the poster-boy for the "one currency/open borders" movement.

    The "poster boy" is looking awfully jaundiced, if not terminal.

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  69. Just dropping by...

    I noticed the headline on Deuce's post.

    Forgive me if I've told this story before. I'm distracted by other "life events" and then there's that crs syndrome creeping in. If you could, just let this be my default disclaimer "going forward," as they say.


    A couple of months ago I was in a quarterly meeting with my mom's broker. He's a conservative sort and works for a conservative group associated with a small, respected CPA group.


    He had been over to Eastern Washington pitching the services of his investment team to a team of doctors. Some sort of clinic or associated practice.

    He was talking to more than 20 of them. The pitch apparently went okay. But what was interesting to him was what happened afterwards as they had drinks.

    The docs approached him to talk about their personal accounts. Their own savings.

    The broker said that all of them save one were 100% in gold. Mostly in the etf GLD.

    He, of course, thought it was not a good idea. And spoke about his reasoning.

    I think he brought it up because I have voiced my concern over inflation and the dollar collapse. And my concern was apparently shared by these docs he was pitching...


    I haven't had the time to deal with my finances, I'm doing my own, the broker is for my mom...

    And I'm still mostly in cash. I will say that I've made my "salary" for this year in silver. But who knows what lies ahead.


    .

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  70. Blogger rufus said...

    Europe was the poster-boy for the "one currency/open borders" movement.



    Wonder if California will work on their own dollar? Think the folk being 'flown over' will willingly bail 'em out?

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  71. We'll be forced to bail out their sorry derrieres but imposing some austerity on the fools will be our compensation.

    I read this week that the Governator says the California budget shortfall is actually about $40 billion.

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  72. I still say that California is the model for unfettered Democrat spending.

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  73. Obama will bailout California. That is a given.

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  74. Once the 'bond vigilantes' are done with Europe do you think they might set their sights on the US?

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  75. I love it when my daughter is here. I fall to doze on my cot in my den, and I am tickled tween the third and fourth ribs. "Daddy, have you some money? I want to go get coffee with a friend"

    "Yeah sweetie I think.... here...."

    And she gives me a kiss, and tucks me back in, again....

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  76. I've got two items I'm trying to work into a post.

    The first one revolves around that same broker again.

    I sold my mother's house and the money will be needed in the future for her care.

    The broker was not confident he could "grow" her money in the five year time frame we were looking at. He suggested, that since I had already taken a significant "haircut" on the sale of her house, it might make sense to move that money laterally back into some other depressed real estate. Albeit property that didn't require the tlc of an upscale home. Maybe income property. Or maybe building a spec house.

    Both were interesting to me.

    The spec house idea was attractive as I was seeing nice pieces of property that had been held for 30 or more years coming on the market.

    And, in renovating mom's place for sale, I had seen how many skilled folk were underemployed and ready to work. And, of course, at very attractive costs.


    But then the came the rub.


    And the reason for the post I am hoping to find time to put together.

    I can't get a loan.

    Why? Because I don't have W2s.


    I brought this up with the broker at our last meeting. And he apologized. Said he hadn't known of the problem...

    But that another client of his had reported a similar situation.

    His other client, a youngish retired Microsoft millionaire, with much more in equities and savings than me, had also been turned down for a mortgage. The broker intimated that the guy had more than ten times the mortgage requested just in cash...

    The microsoftie, being a persistent sort according to the broker, made it a sort of quest to get a mortgage. The broker said he gave up after trying for three months...

    I had similar anecdotal stories from the woman I was dealing with at the title company and from the real estate broker that helped me sell mom's home.


    It just seems counter intuitive in this market that home sales are being kept away from what would seem to be the logical buyers. What might be called the investor class. Or the "savers" that had kept their powder dry waiting for this opportunity..

    Doug quotes frequently from the "Dr. Housing" blog and I was going to go there first to see if could find some insight.

    Another anecdotal source, maybe the title company lady again, said that there's a government employee in the banks that now gives the final thumbs up or thumbs down on all mortgage loans.

    Something else to check out.


    And it reminded me of years ago when the first chicom ship called at a US port I was frequently visiting. Paperwork, of course, is a big deal. The guy at the dock was telling me how everything was just a little bit "off."

    Normally all the paperwork, etc. on the ship side is done with the Captain and the Chief Mate. In the case of the chicom vessel the master and the mate still signed everything. But it had to go thru and get blessed by this shadowy character that obviously wasn't a nautical guy.

    Turns out he was the party rep...


    .

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  77. California has been supporting Texas, Mississippi, Florida, and the other "Red" States for a long time.

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  78. .
    Yeah, you are a bird of a feather with your buddy Bob.


    You twerp. Take that back.

    Bob is my arch-enemy, the Joker to my Batman; he is my trial and affliction, a scourge and a plague, my bane and nemesis.

    He's a punk.

    .

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  79. "Quirk's a shitbird

    Quirk's a shitbird"


    :)

    I, actually, love the damn doofus.

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  80. We would be a dangerous target, Ash. We could, with the right political will, change our situation on a dime.

    What's got Greece, Ireland, Portugal, Spain, Italy, et al in a mess is they're locked into a too-strong currency. They don't have any "kicking room."

    We could cut our expenses on overseas poppy-protecting, raise a few taxes, catch a little growth, let our currency shrink a bit, and come striding out the other end with a skip in our step, and a smile in our heart.

    Not saying that we will, but it's something for a "vigilante" to consider before he gets too awful het-up.

    ReplyDelete
  81. Melody is out shopping, I'm certain of it.

    Keeping the economy booming.

    ReplyDelete
  82. Ritter can do anything. Fast, slow, in between.

    He is a really good artist.

    Talented.

    ReplyDelete
  83. rufus wrote:

    "Not saying that we will, but it's something for a "vigilante" to consider before he gets too awful het-up."

    I was thinking the Fed and the size of its printing press would give the vigilantes pause.

    ReplyDelete
  84. "How many aircraft carriers do the bond vigilantes have?"

    ReplyDelete
  85. Farming is all there is. The rest of it is all b.s.

    A nation's strength is built from the backs of the farmers.

    ReplyDelete
  86. They don't need no stinkin' aircraft carriers they just buy bonds with interest levels that suit them or they don't buy.

    ReplyDelete
  87. China is one drought away from starvation.

    We aren't.

    ReplyDelete
  88. Perhaps I was too opaque.

    A run on the US bond market is so destructive to the current bond holding nations that it will not happen.

    If it did, the world would devolve into such a mess only US power would be in a position to stabilize events and there would be a global rally to US power and the US bond market and currency would become desirable again.

    The world will shift into Chinese and Russian currencies only if there is a US counterbalance.

    it is going to take a miracle to save the Euro. The only thing to save it, IMHO is if the dollar beat it to a crash. That is not closeto happening.

    There is another interesting corollary:

    If enough wealth is destroyed is it not possible that freshly printed dollars would be welcomed? Do they not become a refuge indifferent to what does or not backs them if all else if failing?

    ReplyDelete
  89. I was thinking the Fed and the size of its printing press would give the vigilantes pause.


    That, too.

    ReplyDelete
  90. Yes, there is a definite HUGE Premium attached to 11 Nuclear Carrier Groups, and 187 F-22's.

    Not to mention a Missile Defense Capability.

    ReplyDelete
  91. There are a lot of others things one could buy than bonds - oil, stocks, gold, silver....

    In other words one could flee the US dollar for many other things besides Euros and RMB.

    ReplyDelete
  92. And, Bob is right, too. The USSR got to where it couldn't "feed itself." China's getting there, also.

    ReplyDelete
  93. Don't get me wrong; Our genii in Washington have got us into a hell of a mess. But, we're in so much better shape than almost anyone else it's like we're sitting on top of Everest.

    I would say it probably takes 200 Chinese farmers to produce what one Midwestern Corn farmer produces.

    ReplyDelete
  94. If everyone sold all their US bonds and bought everything else, The US government could buy them all back for diddly squat on the dollar and pay for them with commodities, timber rights for a start, coal and gas reserves, corn futures and carrier protection privileges.

    It could then start selling them again except this time with a rather tidy balance sheet.

    Sorry Ash, ain't happening baby.

    ReplyDelete
  95. I'm not saying that, collectively, we couldn't "screw this fine pooch," but it's also important that every good Vigilante should know his limitations.

    I believe if I was a BV I could find a more inviting target.

    ReplyDelete
  96. The middle aged lady down at Albertson's Quik Stop always calls me "sweetie".

    So today I got my courage up, and called her "sweetie" right back.

    She used to be a beauty, I know for sure.

    "You call all the boys that, don't you?"

    She hunches he shoulders up, laughs out loud, and says "No sweetie, I just can't be cold"

    So it's sweetie sweetie between the two of us.

    It's little nice things like this that make any day go a little better.

    Like the unexpected caw of the crow, or something.

    ReplyDelete
  97. .

    Deuce, au contraire right back at you.

    We agree that illegal immigration is a wage deflater. However, illegal immigration is the least of our economic problems right now and a side issue in this discussion, merely another factor among many that needs to be addressed.

    Unless you are thinking of productivity as strictly technological improvement, when you say “outsourcing to cheap labor markets further undermines productivity,” you are being too simplistic. Productivity merely measures the value of a product divided by the time and resulting cost needed to produce it. You can get productivity increases in a closed system by reducing production time per unit given the same amount of inputs, i.e. technological improvement. However, in the real world input costs become important.

    By introducing outsourcing you have proved my point that a mere dichotomy (productivity versus growth) is insufficient to describe much less solve our problems. Companies that outsource are looking at not only potential productivity gains, they are looking at total costs. Those costs are built on many things; the tax structure in the producing country, the regulatory environment, labor rates, cost of benefits, exchange rates, etc. plus the offsets like transportation costs, political uncertainty, etc.

    When you start talking about ‘social costs’ you add additional complexity. In any system where assets are redistributed you have politics and political decisions. Social costs such as unemployment or underemployment first require a recognition that these are problems and then solutions that will end up being political in nature. Basically, we need to establish a competitive industrial policy. From the balance of your post, I think we agree on that.

    Your contention that we can have a closed system where population and GDP can be held constant again (to me) sounds utopian. It ignores the reality of our current demographics and assumes that we can maintain the same GDP growth merely through technological improvements even with an aging population (over the next quarter century) and a reproduction rate that is barely maintaining our current population. It is merely my opinion (I’ve done no research on the subject) that increases in productivity alone will be insufficient to maintain our way of life over the next 25 years. Especially since we are unlikely to see the productivity gains that we were able to achieve in the 1990’s going forward for any extended period of time.

    A fixed labor pool can only create more output by increasing productivity of work methods, longer hours or capital improvement.

    Here we disagree on the definition of productivity.

    Improving capital efficiency will more than offset a smaller and older work force.

    Here we disagree on the term “more than offset”.

    You need a social contract and some common sense. You agree on an optimum target level of employment, day 95%. As population in the work force decreases, capital usage has to be increased to maintain supply.

    I like the idea of a ‘social contract’; however, this will require a reevaluation of our capitalistic model. Large industrial companies to not outsource to other countries on the basis of whether the decision is good for America, they do it on the basis of what is good for the large industrial company. (Unfortunately, it has now come to the point now where service companies are outsourcing too.)

    Your dream will also require an attitude change on the part of the American people. They will need to consume less and save more. This appeared to be happening early on in the current crisis; however, I had heard a few months ago that the new savings rate was dropping pretty substantially.

    A country of 315 million people needs no increase in immigration. If we need skills, we train them.

    I disagree, at least for the next quarter century.

    I do, however, like your ideas on how our bonds should be handled as you expressed them in post from a few days ago.

    .

    ReplyDelete
  98. .

    Deuce, au contraire right back at you.

    We agree that illegal immigration is a wage deflater. However, illegal immigration is the least of our economic problems right now and a side issue in this discussion, merely another factor among many that needs to be addressed.

    Unless you are thinking of productivity as strictly technological improvement, when you say “outsourcing to cheap labor markets further undermines productivity,” you are being too simplistic. Productivity merely measures the value of a product divided by the time and resulting cost needed to produce it. You can get productivity increases in a closed system by reducing production time per unit given the same amount of inputs, i.e. technological improvement. However, in the real world input costs become important.

    By introducing outsourcing you have proved my point that a mere dichotomy (productivity versus growth) is insufficient to describe much less solve our problems. Companies that outsource are looking at not only potential productivity gains, they are looking at total costs. Those costs are built on many things; the tax structure in the producing country, the regulatory environment, labor rates, cost of benefits, exchange rates, etc. plus the offsets like transportation costs, political uncertainty, etc.

    When you start talking about ‘social costs’ you add additional complexity. In any system where assets are redistributed you have politics and political decisions. Social costs such as unemployment or underemployment first require a recognition that these are problems and then solutions that will end up being political in nature. Basically, we need to establish a competitive industrial policy. From the balance of your post, I think we agree on that.

    Your contention that we can have a closed system where population and GDP can be held constant again (to me) sounds utopian. It ignores the reality of our current demographics and assumes that we can maintain the same GDP growth merely through technological improvements even with an aging population (over the next quarter century) and a reproduction rate that is barely maintaining our current population. It is merely my opinion (I’ve done no research on the subject) that increases in productivity alone will be insufficient to maintain our way of life over the next 25 years. Especially since we are unlikely to see the productivity gains that we were able to achieve in the 1990’s going forward for any extended period of time.

    A fixed labor pool can only create more output by increasing productivity of work methods, longer hours or capital improvement.

    Here we disagree on the definition of productivity.

    Improving capital efficiency will more than offset a smaller and older work force.

    Here we disagree on the term “more than offset”.

    You need a social contract and some common sense. You agree on an optimum target level of employment, day 95%. As population in the work force decreases, capital usage has to be increased to maintain supply.

    I like the idea of a ‘social contract’; however, this will require a reevaluation of our capitalistic model. Large industrial companies to not outsource to other countries on the basis of whether the decision is good for America, they do it on the basis of what is good for the large industrial company. (Unfortunately, it has now come to the point now where service companies are outsourcing too.)

    Your dream will also require an attitude change on the part of the American people. They will need to consume less and save more. This appeared to be happening early on in the current crisis; however, I had heard a few months ago that the new savings rate was dropping pretty substantially.

    A country of 315 million people needs no increase in immigration. If we need skills, we train them.

    I disagree, at least for the next quarter century.

    I do, however, like your ideas on how our bonds should be handled as you expressed them in post from a few days ago.

    .

    ReplyDelete
  99. A country of 315 million people needs no increase in immigration. If we need skills, we train them.

    I disagree, at least for the next quarter century.


    Good grief, is all I can say.

    We got people coming out the ears.

    Close the border, damn tight.

    ReplyDelete
  100. .
    For every 100 females age 18 and over, there were 95.1 males.

    Love these small Idaho towns.




    Yea, those small Idaho towns. They stay small because everytime a baby is born, some guy leaves town.

    .

    ReplyDelete
  101. gnossos said:
    And, in renovating mom's place for sale, I had seen how many skilled folk were underemployed and ready to work. And, of course, at very attractive costs.

    That should be a signal that maybe this isn't quite the right time to build a spec house.

    What you should be looking at is how many houses are selling, how long they're on the market and what they're selling for.

    Now is not a good time for real estate, although, in certain markets and certain price ranges, there is some activity.

    Re: the credit game. Stay out of it at all costs.

    ReplyDelete
  102. Counter intuitive - what's bad for the country is good for Moscow.

    We are booming, relatively speaking.

    ReplyDelete
  103. .
    Deal for Deputy for Academics Clears Way for Schools Chief

    In a concession by the mayor, New York City is said to have agreed to appoint a chief academic officer as the top deputy to Cathleen P. Black, who lacks education credentials.

    Is This What Is Known As a Political Decision?

    The political appointee is not qualified so you have to appoint a number two who is qualified to do the job of the political appointee in matters academic which is after all what the political appointee's job description calls for.

    OK.

    .

    ReplyDelete
  104. Administration Is Bracing for Setbacks to Health Law

    As the Obama administration presses ahead with the health care law, officials are bracing for the possibility that a federal judge in Virginia will soon reject its central provision as unconstitutional and, in the worst case for the White House, halt its enforcement until higher courts can rule.

    The judge, Henry E. Hudson of Federal District Court in Richmond, has promised to rule by the end of the year on the constitutionality of the law’s requirement that most Americans obtain insurance, which does not take effect until 2014.

    Although administration officials remain confident that it is constitutionally valid to compel people to obtain health insurance, they also acknowledge that Judge Hudson’s preliminary opinions and comments could presage the first ruling against the law…


    Healthcare Litigation

    .

    ReplyDelete
  105. .
    Handguns for 18-Year-Olds?

    The N.R.A.’s argument that people 18 to 20 years old have a constitutional right to buy weapons and carry them in public is breathtakingly irresponsible...

    NRA Pushes The Envelope

    NRA = Not Really All-there.

    Stuff like this is the reason I cancelled my NRA membership years ago.

    .

    ReplyDelete
  106. Quirk!!!

    I got my first driver's license here in Idaho at age fourteen and I grew up with a dog and shotgun in my bed.

    Give me a break!!!!

    No felonies, and not even a misdemeanor.

    It's culture, dude.

    ReplyDelete
  107. You can't handle it back in Detroit, but out here, we love our
    Swedish aunts, and look out for one another.

    It's the culture, dude.

    ReplyDelete
  108. Ithaca 20 gauge, age 12, pump, eight cartridges.

    Remington .22, age 10, 21 rounds.

    No felonies, no misdemeanors.

    ReplyDelete
  109. Still have the Remington, though it has a chip on the stock.

    I have ordered the wife to have it cremated with me.

    ReplyDelete
  110. .
    Quirk!!!

    I got my first driver's license here in Idaho at age fourteen and I grew up with a dog and shotgun in my bed...


    That explains it.




    Besides, they aren't talking shotguns you dumb shit. They are talking handguns and the right for concealed carry for 18 year olds.

    You are right about the culture being different. When was it you were a teenager, 60 or 70 years ago?

    .

    ReplyDelete
  111. I've been sitting here reading A Clean Well Lighted Place by Ernest Hemingway.


    It is so cold, so cool, so depressing, so rational, I almost think I am wrong about life.


    Though I know I am not.

    Ernie was kind of a sick guy, really.

    Don't read it.

    You will have bad dreams.

    The girl with the frizzy hair at Alberbson's cheered me up, just now.

    The hell with Hemingway.

    ReplyDelete
  112. The spirit is ever young, Detroit prick.

    Living your life in a horoscope.

    My God, Man!

    ReplyDelete
  113. And can't even get his months right, nor his days.

    Embarrassing.

    Let Melody take over.

    She is gooder than you.

    And that's the truth.

    ReplyDelete
  114. Quirker, you got to get on a float trip.

    There is more to life than Detroit, Michigan.

    ReplyDelete
  115. Quirk is the guy, that laughed out loud, for three or hours or more, laughing bout kids on iron lungs, har de har. My cousins are world class dope smokers, and they have never, ever done that.

    No wonder Trish ran away.

    ReplyDelete
  116. .
    She is gooder than you.


    Nobody is gooder than me.


    .

    ReplyDelete
  117. .

    There is more to life than Detroit, Michigan.

    Well, I'm going to England/Scotland for a couple weeks in May.

    Hopefully, they still have tv over there.

    .

    ReplyDelete
  118. .
    Quirk is the guy, that laughed out loud, for three or hours or more, laughing bout kids on iron lungs, har de har...


    You kinda had to be there.


    .

    ReplyDelete
  119. You are an asshole.

    Disgusting.

    Night, Quirk.

    ReplyDelete
  120. .

    Good night, Bob.

    .

    ReplyDelete
  121. Right now I am happier than a fag in a bag full of dicks.

    ReplyDelete
  122. "Nobody is gooder than me."


    I beg to differ.

    ReplyDelete
  123. .
    Share Melody.

    Why are you so damn happy?



    Wait.

    Now that I think about the illusion you presented, are you saying you are happy or...well never mind.

    Forget I asked.

    .

    ReplyDelete
  124. I thought you would never ask.

    So, if I would have said that I was happier than a pig in shit then you would have thought….Well never mind.

    I just spent the last four hours with my soul sister from TN. She made a surprise visit on Wednesday for Thanksgiving and couldn't leave tomorrow without seeing me.

    ReplyDelete
  125. .
    Sounds like you had a good time.

    Booze and girl talk more than likely.

    .

    ReplyDelete
  126. Makes me want July to come that much sooner.

    ReplyDelete
  127. .

    July and another road trip. Kool.

    You'll have to get back in time for for Bob's rafting party in August.

    .

    ReplyDelete
  128. .

    I beg to differ.

    Really?

    Why don't you do Capricorn then?

    .

    ReplyDelete
  129. Hopefully Daytona In March.

    I will be heading over to the West coast but not until the following March. The destination will beTucson AZ.

    ReplyDelete
  130. Capricorns are flawless.


    There it's done.

    ReplyDelete
  131. Why don't you do Capricorn then?


    Reverse psychology doesn't work on me. I see right through that shit.

    ReplyDelete
  132. .
    At least when I did Scorpio I did it objectively.

    I guess there is no one 'gooder' than I.

    .

    ReplyDelete
  133. You could do all the negative qualities and I could all the positive ones.

    ReplyDelete
  134. .

    Sure and then Bob would accuse me of picking on you.

    .

    ReplyDelete
  135. All the good qualities out weigh the bad ones so he'll never notice.

    ReplyDelete
  136. This comment has been removed by the author.

    ReplyDelete
  137. .

    Ok.

    I just thought I'd give you a chance to prove you are not a one hit wonder.

    That you are good for the long haul so to speak.

    But I can see where taking that on might be a little intimidating.

    :)

    .

    ReplyDelete
  138. .

    I mean for a chick, ya know?

    .

    ReplyDelete
  139. Arizona ain't really out west. And Quirk is like Harry Smith on morning tv, my wife always gets pissed when I say, there's Harry, with a pack of condoms in his vest pocket.

    I weep for Quirk.

    ReplyDelete
  140. He tries to right luv potry like a trubador and all he can come with is horrorscopes.

    That's Detroit for u.

    ReplyDelete
  141. Quirkie ain't even read The Ecstasie by John Donne.

    What does he know?

    Nothing, next to nothing.

    And if he read it, he wouldn't understand it.

    Such sacred things are for grownups.

    ReplyDelete
  142. Quirk is the very worst of us
    He can't hide his city lust
    He's from a big ci-ty
    Where all goes to rust to rust
    He gets his magazines
    In brown paper wrappers
    He's the turd of all the world
    Let us evade this very turd

    ReplyDelete
  143. Damn your good.

    One thing for sure is I'm no one hit wonder.

    ReplyDelete
  144. .

    I can take that as a yes?

    :)

    .

    ReplyDelete