Thursday, October 31, 2013

Happy Halloween!


Third Graders Do It

But then they grow up.

Caught lying red handed, Dear President does what he always does -- call other people names. You might know that he was really about clearing out bad apples if he took the time to clear out his own.

Wednesday, October 30, 2013

Obamaboats






Looks like the maritime lobby got through to Dear President as well!


Tate Tatom: Watching the Golfer Grow

Earlier this year, we introduced our readers to Tate Tatom, now twice Class C Montana State High School Golf Champion. 



We said he was the best young talent we had ever seen. By my reckoning Tate has now entered his junior year at Long Peak High School, up the Gallitan Canyon in Big Sky. Winter sets in early at Big Sky. We promised to keep up to date with Tate.
Big Sky Mountain Village October 30, 2013


Tatom frequented the Rocky Mountain Junior Golf Tour over the summer and into the fall. Earlier this month, he won his final tour event, the RMJGT Major at Colorado Springs Country Club, shooting 148  for a 5 stroke victory at Colorado Springs Country Club. He surged ahead in the second round of the 36 hole event to beat a pair of Colorado locals.
Greenwood Village Colorado’s Cole Edwards and Trey Lambrecht from Sterling CO were tied for the lead after Saturday for the Boys 15-19 division. They both carded a 74. Tate Tatom proved that a short playing season in Gallatin Gateway MT doesn’t prevent players from perfecting their skills. He came from behind to secure the win with a 76/72 with three bogeys, two birdies and a par streak on holes 12-18. Cole managed a second place finish and Trey was third.
In June Tatom finished 2nd at the Pine Creek Classic and brought home 4th place at PGA Junior Series event No. 5 at the U.S. Air Force Academy. Overall, Tate Tatom finished top ten in four out of five RMJGT events. He finished 4th in the state amateur junior event and 3rd in the USGA junior qualifier.

Tate posted a swing video on YouTube which we expect will become frequent fodder for college golf program recruiters.

The young amateur is bringing it in against adults.  At my home course, Cottonwood Hills, he finished 6th in the Championship Flight of the Gallitan Valley Open, on a pro tournament setup that had greens as slick, undulating and difficult to read as any you will find this side of Augusta National.  





Earlier in the summer, in the Montana Men's State Amateur, Tatom had a top 20 finish and brought home the Steve Schwarz Cup for low junior.  

We will continue to watch the golfer grow.



Tate Tatom with the Rory look at a Colorado tournament.



What You Can Count On

So the wife asks me today if our health insurance policy is affected by Obamacare. A month ago I would have said no, because I thought Dear President and the government while completely on the wrong track, was sane, honest and competent enough, that they at least wouldn't have lied or misled about that. Now I say, we have to wait a year until the employer mandate takes effect. It's a top of the heap Four Pinnochio.  Thanks a lot America, for foisting these people upon us.
 
The State of Montana can tell us exactly how many deer and elk were shot last weekend, but Kathleen Sebelius has a website she insists is working now that cannot tell us how many people have signed up for health insurance. We would be better of with a game warden in DC than the crowd you all have elected.· 




Monday, October 28, 2013

NSA Overreaches are Bush's Fault?

I was watching CNN this morning when Christiana Knownothing Amanpour chimed in from London, commenting on the latest NSA spying scandal to the effect that Dear President is merely continuing what had been previously done under Bush Cheney. Wow lady, you have to get back to our shores. Or better yet, don't broadcast your pap over the pond. You are totally out of touch.


Sprawling Utah Data Center.
NSA's budget is dark, so we cannot see it and analyze the dollar trends.  But we can see NSA's footprint and observe how it is expanding dramatically. The most well known indication is NSA's ridiculously large multi-billion dollar 12 exabyte capacity Utah data center under development, which by the way, has had its opening repeatedly delayed by meltdowns and glitches. It almost makes you wonder whether NSA is using the same contract and management team that is responsible for HealthCare.Gov.

Closer to Dear President's home are developments at NSA headquarters at Fort Meade, Maryland, just up the Baltimore Washington Parkway from Washington DC.  

NSA Headquarters
It was once said NSA stood for No Such Agency. No way, no how are those claims forthcoming, not anymore. With more than 56,000 employees, Fort Meade is Maryland’s largest employer and is the third ­largest workforce of any Army base.

The main NSA building, as such, does stand out.

But it is dwarfed by the size of its campus.
Fort Meade campus (within dashed line)
NSA HQ is middle, left edge 

The Fort Meade command boasts,
Fort Meade is virtually a a city within itself.  It consists of 5,067 acres with 67.5 miles of paved roads, 3.3 miles of secondary roads and about 1,300 buildings. There is a modern post exchange mall, bank, credit union, post office, chapels, seven schools, and many other facilities on the installation. Whatever your interests -- crafts, sports, movies -- all are available on Fort Meade.
Fort Meade is not standing still.
Fort Meade and the surrounding areas are in the midst of significant growth, change and transformation. 
For Meade is home to 95 tenant units, many of which are expanding their presence at Fort Meade. The National Security Agency, Defense Information School and the 902nd Military Intelligence Agency are three such agency that are slated to grow in personnel and occupancy at the post. DINFOS alone is expected to increase the size of its building by one-third and expand its annual student capacity to 4,000.  In addition, the newly established Cyber Command, headquartered on post, may add up to an additional five thousand personnel.
With the additions of thousands of new employees, residents and family members, Fort Meade has been busy keeping pace with necessary upgrades to its infrastructure.  Miles of fiber optic cable have already been laid to improve communications and new water, sewer and utility line have been installed or upgraded to handle personnel and resident growth.
Future construction includes a new 24-hour shopette, Post Exchange, Child Development Centers, golf course, youth sports complex, and a Veterans Administration Center -- the first ever to be constructed on a military post.
There are veterinary services, kennels and pet care on post, a clinic, a pharmacy and outpatient surgery services, eleven restaurants, bowling, running track, indoor basketball courts, an already established 27 hole golfing complex, a library and museums, and an RV park, general use pools as well as pools at most housing clusters, as well as outdoor recreation facilities to numerous to mention.

None of this includes or houses tens of thousands of contract personnel who are hired by the agency to carry out its orders.

Fort Meade further boasts,

Every day, more than 100,000 people seek the services Fort Meade offers. Its primary mission is to provide a wide range of services to more than 95 partner organizations from the ArmyNavyAir Force,Marines and Coast Guard, as well as to several federal agencies including the National Security AgencyDefense Media ActivityDefense Informations Systems Agency, the Defense Courier Service and the U.S. Cyber Command.
The NSA and its cousin alphabet soup agencies housed at Fort Meade are big, bloated, growing and out of control.

Even with its 5,067 acres Fort Meade is running out of space.  So what did it do?  Why the unthinkable -- a short drive from Dear President's White House, Fort Meade revealed plans to plow under a secure, military golf course.
In July 2010, the NSA revealed that it was expanding into a 227-acre parcel of land at Fort Meade called “Site M”, constructing a series of buildings that could cost as much as $5.2 billion. This expansion would displace two golf courses currently occupying the land and provide the NSA, which already occupies 630 acres at Fort Meade, with more space to build “an operational complex and to construct and operate consolidated facilities to meet the National Security Agency’s (NSA) continually evolving requirements and for Intelligence Community use”. The project has been shrouded in secrecy throughout its existence and there are only a few references to “Site M” in DoD budget planning documents. However, a recently discovered collection of development planning documents for the Site M project provide detailed information about the proposed $3.2 billion expansion, indicating that the facility will be a centralized command center for the NSA’s evolving cyberwarfare capabilities.
It came to pass sooner than anyone expected.
The golf course at Fort Meade will close May 1 after more than six decades of play, officials at the Army base said Thursday.
Golf course (right) is no more.
The 27-hole course, which saw 35,000 rounds of play last year, had been scheduled to close in September to accommodate building projects at the rapidly growing installation. But the date was moved up to accommodate construction deadlines, effectively canceling the final season of play.
The NSA is expanding rapidly and massively, even at the cost of Dear President's favorite past time. There is a hell of a lot more than Cheney Bush going on there. You can bet on it.

A Speculative Investment -- The Other Bank

Another investment lesson case study here. Buy low and sell high. We naturally look to diversify our investments across economic sectors. Within sector and across risk levels, we seek to diversify as well, which is the subject of this post.


Glacier Bancorp wasn't the only bank we invested in during 2009 when the outcome of the financial crisis remained in doubt. It was the secure bank -- the safe bet. We also put money into a small bank whose chance for survival was precariously hanging in the balance, filling a slot at the high risk end of our portfolio. That investment was in the stock of West Bancorporation (WTBA), located in central Iowa.
West Bancorporation, Inc. offers its products and services to individuals, and small to medium-sized businesses through 8 full-service offices in the Des Moines metropolitan area, 2 full-service offices in Iowa city, and 1 full-service office in Coralville. The company was founded in 1893 and is headquartered in West Des Moines, Iowa.
West Bank hit the skids big time during the financial meltdown. It knocked its quarterly dividend down from 10 cents, to 8 cents, and then to a penny before being entirely eliminated. Its stock price peaked at $18.98 a share in the Spring of 2006 and pancaked to a low of $4.40 in October 2009. 


West Bancorporation took a big bath on Glen Oaks.
West Bancorporation accepted $36 million in funding from TARP. It booked a similarly large provision for loan losses. The bank got caught underwater, big time, on a golf course. Losses mounted to the point where the price of the stock dropped below book value, requiring West Bancorporation to take a large goodwill impairment charge, further depleting its capital reserves. Ominously, the CEO resigned (going on to a higher calling as a corporate banking lobbyist), in what was described as an involuntary departure. 

On the other hand, we had noticed during our cross country trip in 2009 that the economy appeared to get better as we moved through the middle of Iowa and points further west.  We also couldn't help but note that FDIC had not shown up at the doors of West Bank asking for the keys. It appeared that the insurer/regulator, at least, looking through its insider lens view, thought the bank positioned for recovery if left to operate as a going concern. You don't buy high risk just because there is a lot of bad news. There has to be some reason to believe there is good among the bad.

We happened across West Bank when we were doing the industry scan described in our post on Glacier Bancorp. My first reaction, was "Oh, not so West Bank."  But that didn't stop me from taking a second look. The economic base in West Bank's service area was more rust belt and less agricultural and tourism centered than Glacier, giving us less confidence in the bank's growth potential, but the economic base was pretty well diversified. West Bank's market was experiencing less population growth, but it was growing (i.e., it was not Detroit).
Corn prices were dropping as we bought in to West Bank.
Further, the corn belt had benefited hugely from a government subsidized ethanol bubble. Subsequently, corn prices declined almost 40 percent from their 2008 peak, but would likely pick up with a recovering economy, new EPA regulations and Federal Reserve cash infusions driving up commodity prices. Institutional ownership was much less than Glacier but it was not non-existent.


Given all the above, I thought the stock price had been excessively pummeled. If the bank were to survive and pay off the TARP infusion, the stock price would come back at least double. Or, if I was wrong, and the bank continued to lose money, its insolvent corpus would fall into the hands of the FDIC and the stock would become worthless.

Since this was a speculative buy we only put about 15 percent as much money into WTBA as we had invested in GBCI. Speculative investments should be limited to amounts that you are willing to write off, which we've usually defined as somewhere between 10 and 20 percent of our investment portfolio. We bought our position in WTBA late in 2009 very near the bottom, priced with 4 and 5 handles.
   
The hoped for turn around came about.
West Bancorp Redeems $36 Million Of Preferred Stock, Exits TARP 
DOW JONES NEWSWIRES West Bancorporation Inc. (WTBA) said Wednesday it redeemed all $36 million of preferred stock issued to the U.S. Treasury Department, ending the bank's participation in the Troubled Asset Relief Program, or TARP. President and Chief Executive David Nelson said the news was "very good" for the company and its shareholders, as West Bancorp is relieved of some additional regulatory burdens and will no longer be required to pay preferred stock dividends. Since the end of 2008, the company has paid about $4.5 million in dividends to the Treasury. Looking forward, Nelson said the Iowa-based bank could now use the company's improved earnings to compensate shareholders and retain capital for future growth. The news wasn't entirely a surprise, as Nelson had hinted the company's strong performance during the first quarter would likely allow it to finalize the TARP repayment plan. In late April, West Bancorp reported its first-quarter profit jumped 36% on fewer loan loss provisions. 
West Bancorporation had found a new highly qualified CEO
TARP-recipient West Bancorporation, Inc. has hired a new chief executive after an eight-month search. West Bancorporation, parent company of Iowa-based West Bank, appointed David D. Nelson, former president of Southeast Minnesota business banking for Wells Fargo Bank Minnesota. SEC filings show that Nelson's salary will be 10 percent higher than that of his predecessor, Thomas E. Stanberry, who resigned just before the company announced a loss of $5.3 million for the second quarter of 2009.

Dividend payments were sharply ramped up. West Bank paid a 5 cent dividend in the final quarter of 2010, boosted the dividend to 8 cents in 2011, and then 10 and 11 cents in 2012, and knocked it up to 13 cents this year.  The bank has gone beyond the mend to ring up a string of solid successes. At Friday October 25th's closing price of $14.16 a share, we have about tripled our investment.  We are very fortunate.


Sunday, October 27, 2013

She's Gone

That's right. She's gone. Banished. Dumped. Exit stage right. Outta here!




Replaced by inanimate objects. Now we know who was responsible for the mess.


To Invest in a Bank

We write occasional posts concerning investments largely because the wife and kids ask how to invest.  We don't have magic metrics that stand out from the rest. We don't have a mathematical or statistical model -- nor an intuitive secret. We do, however, have plenty of stories. They are stories of firms and markets and trends (up and down), misguided (usually) and ill-administered (commonly) government supports that burst markets followed by further government intervention to save the people from the very mess the government created. Finance, economics and politics all play a role (we are pretty thorough in our investing as well as our politics). 

Investing is as much about selling as buying. The timing of each is elusive but critically important. Consider this as a case study. 

As for why the present post, we glanced at our stock portfolio Friday, October 25, and noticed a favorite stock, Glacier Bancorp (GBCI) closed at an all time high. Glacier is a bank holding company headquartered up the Flathead Valley in Kalispell Montana, the western gateway to Glacier National Park (hence the bank name). Unlike most bank holding companies which are corporate umbrellas established primarily to address legal and regulatory requirements and constraints, Glacier Bancorp actually houses a collection of separately identified community banks. These are traditional banks performing standard commercial banking functions.
Glacier Bancorp, Inc. operates as holding company for Glacier Bank, which provides commercial banking services to individuals, small to medium-sized businesses, community organizations, and public entities in Montana, Idaho, Wyoming, Colorado, Utah, and Washington. The company’s deposit products include non-interest bearing demand accounts, interest bearing checking accounts, regular statement savings accounts, money market deposit accounts, fixed rate certificates of deposit, negotiated-rate jumbo certificates, individual retirement accounts, and reciprocal deposits. Its loan products comprise construction and permanent loans on residential real estate; consumer land and lot acquisition loans; unimproved land and land development loans; residential builder guidance lines comprising pre-sold and spec-home construction loans; commercial real estate loans to purchase, construct, and finance commercial real estate properties; commercial and industrial loans; consumer loans secured by real estate, automobiles, and other assets; second mortgage and home equity loans; and agriculture loans. In addition, the company offers mortgage origination and retail brokerage services. 
The separately named and branded banks are located in the Mountain West. Bank operating 
divisions are Glacier Bank of Kalispell, First Security Bank of Missoula, Valley Bank of Helena, Big Sky Western Bank of Bozeman, Western Security Bank of Billings, First Bank of Montana, Lewistown; Mountain West Bank in Idaho, Utah and Washington; 1st Bank in Wyoming and Utah; Citizens Community Bank of Idaho, Bank of the San Juans in Colorado, First Bank of Wyoming, First State Bank in Wyoming and North Cascades Bank in Washington.

Going back more than 20 years we have been a fan of small bank stocks. With the exception of the 2007-08 interruption that we all know well, financial services diversification and growing credit markets drove continuous growth in the sector. Well managed small banks in growing markets experienced strong organic growth. Further driving growth, the Federal Deposit Insurance Corporation (FDIC) frequently arranges for sound banks to take over and assume 

the accounts of failing institutions. In the 1990's and through 2007, many strong local banks also were bought out by major regional or large national banks looking to increase their market footprint. Every step of the way stock prices appreciated. 

Friday, October 25, 2013

Where is the Klan? Here Alan Here!

Having lived and worked inside the Washington Beltway for 34 years, we know where some of the many skeletons are buried.

Congressman Alan Grayson (D - Fla) is determined to identify Ku Klux Klan connections, it is Tea Partiers he says.
Route to actual KKK member -- Capitol is A, Constitution
Ave. is B., Roosevelt Bridge is C, Columbia Gardens is D.
Let me help straighten this out. Representative Grayson, you don't have to go far to find what you are looking for. Drive down from the Capitol along Constitution Avenue and across Roosevelt Bridge, staying on Route 50 by taking the Arlington Boulevard exit. Three and one-half miles beyond the bridge, just before the Glebe Road exit, take a hard right into Columbia Gardens Cemetery, where you can find what you are looking for. Inside the grounds, take a left at the t-intersection, and there it will be at the y-intersection, dead ahead. You can't miss it.


Photograph courtesy of Grady Foster

Robert Byrd was a Democrat who represented West Virginia in the U.S. Congress for more than 50 years. During much of that time he was minority leader and then majority leader of the U.S. Senate. Robert Byrd filibustered against the Civil Rights Act of 1964. Robert Byrd was a card carrying member of the Ku Klux Klan. There's your man Representative Grayson. Senator Byrd loved his dog

After you visit, please do let us know if anyone has gotten around to filling in the date beyond the dash. An updated picture of the black granite monument would be most appreciated. We like keeping up with changes in the old 'hood.

Byrd grave site. Representative Grayson can even take the bus.  



Kathleen Sebelius Speaks the Truth

Dear President embraces HHS Secretary Kathleen Sebelius
In a rare moment of candor, Department of Health and Human Services Secretary Kathleen Sebelius said yesterday, “The majority of people calling for me to resign I would say are people who I don’t work for..." That is fundamentally correct. Most of us, indeed most of the country, are not the labor unionists, government employees and crony corporate interests, whom she has worked so diligently to exempt from the clutches of Obamacare while she continues to work tirelessly to apply the individual mandate to ordinary citizens who are not members of the favored groups that contribute generously to the Democratic Party.

Tuesday, October 22, 2013

It's That Fella Across the Street

One of the interesting things about living inside the Beltway for 34 years is that I couldn't help but run into people who are power brokers in the political currency of the U.S. government. They are just there. These people usually call themselves things like government relations representatives, strategists, executive directors, consultants, public relations reps -- almost anything except what they actually are, which is influence peddling lobbyists. They look over shoulders, press the flesh, make their presence continually known, offer (and withhold as the situation may dictate) favors large and small, publicize lavish praise or circulate harsh rebukes, and beget and withhold financial largess. It is not the least bit unusual for the players to be married, or otherwise related, to someone who has a government job with important connections with officials who they target for influence.
Yes, the lobbyists do communicate a lot of important and useful information, but their primary stock in trade is power, not merit, and virtually all want bigger, more expensive government, even when their description of mission seems to suggest less.

When I resided in Alexandria, I watched the young man across the street finish college and go to work on the Hill while he attended law school at night. Upon earning his J.D. he rose quickly through the ranks and became chief of staff for an influential Congressman. 

The young man's name is Duane Duncan. Duane worked incredibly hard. He is smart. He is smooth. He is sincere. Duane's dad was a printer, his mom a secretary. He is a product of Fairfax County Public Schools, Randolph Macon College and the George Mason University School of Law. He got an offer he couldn't refuse from one of those inside the Beltway, politically connected, revolving door incestuous firms, whose functioning few people outside of government understood -- at the time at least. Duane's career skyrocketed on the other side of the revolving door, as in short order he became Senior Vice President of Government and Industry Relations at Fannie Mae. Duane was so convinced of the value of home ownership that he thought he was doing God's work. 

One thing I'll say about Duane, he freely admitted he was a lobbyist -- and registered as such. Duane's world was exposed in a 2002 article in Washingtonian Magazine.
Congressman Christopher Shays was lying in bed one night last March and told his wife he was about to take on a new battle. He said the Enron scandal had gotten him thinking about Fannie Mae and Freddie Mac, the two government-chartered housing-finance corporations. They were the only Fortune 500 companies that didn’t have to tell the public about their financial condition. He had mentioned the problem to a couple of staffers and allies on the House Committee on Financial Services.
Fannie Mae headquarters, evoking the image of
a grand country estate home.
The next morning, before he talked to anyone else, his office got a call from Duane Duncan, Fannie Mae’s chief lobbyist. Duncan said he’d heard about Shays’s comments and wanted to set up a meeting with Frank Raines, the head of Fannie Mae. He wondered if Shays “liked” Raines enough for such a meeting to be fruitful. 
Another lobbyist approached Shays and said, “You’re making a lot of people unhappy with this.” 
Shays, a Republican from Connecticut, knew Fannie’s antennae stretched all over town, but he never expected that a few stray remarks would trigger such a reaction. Figuring he was on to something, Shays teamed up with Edward Markey, a Massachusetts Democrat, on a bill to apply the government’s disclosure rules to Fannie Mae and Freddie Mac. 
“The more I look,” Shays says, “the more convinced I am that they’re not eager to disclose what they do. They’re wonderful organizations, but they’re trying to protect a privilege that could ultimately be destructive to them.”Shays broke a political rule in Washington: Don’t mess with Fannie Mae. Wealthier than most nations, Fannie Mae is known to try to devour anyone who crosses it. That’s fine with Fannie Mae’s supporters, who say it has helped millions fulfill the dream of homeownership by combining public spirit and private innovation. Critics contend that Fannie Mae’s public face of heartwarming largess masks plenty of private greed. Fannie, they claim, is a company with the lowliest of missions: to juggle politicking and public relations so that its blend of subsidies and privileges remains intact.
We know now how that insider game turned out. Duane, along with the entire Fannie Mae lobbying operation, was unceremoniously dumped when Fannie Mae became insolvent and the government formally took it over in September of 2008. 

Duane spent a couple of years in self-employed purgatory until jumping back into the saddle as Senior Vice President of Industry and Government Affairs for Genworth Financial, a mortgage insurance company, where Duane now lobbies government regulators to lower mortgage lending standards, to yield his company all the more mortgages to insure. 

Obamacare was a bill written by and for lobbyists and the benefit of their employers.  Which means that is has about as much chance of being a good deal for the American People as the purchase of an acre of seashore in the desert.

When I moved up the Potomac to Arlington and closer to the center of power, the neighborhood became more affluent and lobbyists -- I mean government relations representatives -- abounded. Healthcare, financial, nonprofits (many scammers), telecom, alternative energy, tobacco, oil, defense contractors, and the hire by the hour crowd were all well represented. Healthcare lobbyist lawns transformed into forests of Obama signs in 2008. They danced in the streets when Obamacare passed.  

The fellow across the street in Arlington was Vice President of Government Relations for an obscure, alphabet soup health care, IT firm headquartered in Quebec that no one outside the industry ever heard of. When I inquired what he did for a living, unprompted, he made sure to say "I am not a lobbyist." The fellow is smart and smooth and circumspect. His education is highbrow -- prep school, Haverford College and the Kennedy School of Government at Harvard. His job is to communicate on matters of mutual concern, he insisted. Sweet. 

Since moving to Montana I am out of touch. No doubt my former neighbors are being enriched by the Obamacare roll out I thought, further expanding the DC area income and wealth bubble, but it is hard to say how now that I'm in the hinterlands. 

We all know the Obamacare website is failing massively despite years of preparation and hundreds of millions of dollars poured into it. I heard several reports that the website contractor was a Canadian firm. And it was a no bid contract. Outsourced to a foreign company and no competition, how could that be?  People are wondering.  

Then yesterday it clicked in my head. I confirmed it on the web. IT, healthcare, and Canada, and a contract secured by connections rather than competition, why it is the firm of the guy who lived across the street, Mr. "I'm not a lobbyist." His name is Nicholas Evans. His firm is CGI Federal. The prime Obamacare website contractor is CGI Federal -- and their performance is a giant example of how influence peddling, massive wasted expenditures and massive breakdowns drive the Federal government.

On his Linked.com page Nicholas Evans says his responsibilities at CGI Federal include:

*Managing all political aspects of reputation management effort around Affordable Care Act IT implementations, including handling all aspects of Congressional investigations around healthcare.gov.
*Coordinating the development, selection and communication of messages and channels for reaching key stakeholder groups (policymakers, media, public) on IT issues.
*Assisting business development teams with government relations and political components of sales and market development campaigns across federal agencies, state and municipal governments and commercial clients.
*Analyzing key policy trends to provide company leadership with strategies necessary for obtaining funding and legislative support for high-profile government information technology projects. 
*Managing seven team members and more than 25 contract lobbyists.
*Chairing the company’s Political Action Committee (PAC).
For those not in the know, the PAC is the pay for play funds disbursement mechanism. Previously at Accenture, his responsibilities included,
*Managed all state-level advocacy efforts, including the work of 20 contract lobbyists.
*Led lobbying campaigns at the federal, state and local levels to protect Accenture government contracts. Results include successful defeat of federal legislation aimed at disrupting existing contract work.. 


So "I'm not a lobbyist" Mr. Evans says? How about effing inveterate liar, how does that description fit St. Nick.

The incumbent crowd is slicker, more secretive and more sinister than even their ignominious predecessors. Good luck to us all because most of you have voted for more of the same.


Nicholas Evans (right), not being a lobbyist while hosting Democratic fundraiser, with (left to right) State Delegate Alfonso Lopez (D - 49th), 
wife Moley Evans, Virginia Democratic Gubernatorial candidate Terry McAuliffe


Note 10/29/13:  "Christmas with the Obamas" is how Toni-Townes Whitley, Senior Vice President of CGI Federal, with line authority for the Obamacare portal contract, class of 1985 Princeton classmate, political ally,and student association colleague of Michelle Obama, describes this 2010 photograph on her Facebook page.



We can't imagine how she got that no-bid, single source considered contract, can we?  Of course, HHS will explain and supply the contemporary analysis and documentation used to justify contract award, hah, hah. So cozy, isn't it precious?

02/14/2014 Note: For additional developments on the IT healthcare contractor front take a gander see New Obamacare Website Contractor (It's Your Turn).  Thank you!

Monday, October 21, 2013

Rory Will Return

Here's the last shot I saw a then 22-year old Rory McIlroy hit live. It was the 10th hole, 4th round of the 2011 U.S. Open, in the immense natural amphitheater surrounding that par 3 and the neighboring 18th peninsula green at Congressional Country Club in Potomac Maryland.


After this shot there was no remaining doubt as to the outcome, so I ambled back across the Gold course to beat the crowd and catch the shuttle bus to offsite parking.

In 2013 McIlroy dropped from World No. 1, to not even making the top 30 group that participated in the PGA's final Tour Championship event. But Rory is a streaky player in a streaky game. He has the smoothest swing I've ever seen, the purest sound of club striking ball. McIlroy charged from ten strokes back to place joint second at the Korean Open over the weekend, albeit against a weak field.  

I've been fortunate enough to attend U.S. Opens in 1997 and 2011 at Congressional, and in 2004 at Shinnecock Hills, out in the Hamptons on the eastern tip of Long Island. From my new Mountain West outpost, I'm looking further west for the 2015 reprise at Chambers Bay southeast of Seattle and the 2019 U.S. Open scheduled for Pebble Beach. Talent will out. Rory will have long been back at or near the top by the next time I get to a U.S. Open.

Saturday, October 19, 2013

Greenspan Misses A Bubble He Blew and Watches Another Grow

This is a dorky post but it may be one of the most important I publish.


Alan Greenspan honored with
Presidential Medal of Freedom
Alan Greenspan is coming out with a revealing new book about what he thought and what he knew -- and didn't know -- in his years as Chairman of the Fed. As I suspected, we had our differences. One difference is that I learned long before him (along the way I had job titles like Manager of Demand Research and Manager Financial Forecasting, so I had reason to understand) that the usefulness of econometric models is quite limited and their abuse, as arbiters of the truth, is widespread. 

Mathematical and statistically determined equations are not the economy. They are useful to some degree in formalizing a high level understanding of past behavior, but the models do not and cannot predict profound change, long-run policy impacts or important turning points. They never will.

Referring to the econometric models,

Macroeconomic Model US Economy
"I've always considered myself more of a mathematician than a psychologist," says Mr. Greenspan. But after the Fed's model failed to predict the financial crisis, he realized that there is more to forecasting than numbers. "It all fell apart, in the sense that not a single major forecaster of note or institution caught it," he says. "The Federal Reserve has got the most elaborate econometric model, which incorporates all the newfangled models of how the world works—and it missed it completely."
Wow! Not a psychologist, but how about being an economist? You are old school Mr. Chairman. You know how to do that.

During the financial crisis, I nailed it by putting two and two together, observing that household debt had risen to historically unprecedented levels at the same time home prices surged to previously unheard of highs in relation to incomes. Massive debt growth, much of it improvident, was unsustainably driving up home prices. Something had to break. When I saw that consumer savings rates effectively hit zero, implying that the credit bubble had no more room to grow, and I learned that that the first large wave of adjustable rate mortgages was resetting and high risk, subprime mortgages were beginning to default, I concluded that a historically immense de-leveraging process had begun --  in the spring of 2007. At the time I said we were going to have "the largest economic dislocation of our lifetimes." I knew from studying previous financial breakdowns and economic collapses that it would be profound. People laughed at me, mocked me or asserted that they weren't so pessimistic. They cited Ben Bernanke's (Greeenspan's successor and protege) repeated claims that the housing correction was "contained." They were incredibly wrong.

Now that Greenspan isn't working for the politicians and the bankers anymore, he is back to playing economist (a very good thing) and putting two and two together again, using insights and understanding on economic behaviors rather than being blindly dictated to by sum of the squared error calculations and goodness of fit measures.

In the book, he also ponders why the Fed failed to predict the financial crisis, where he himself went wrong and how that discovery has completely changed his worldview.
Mr. Greenspan's biggest revelation came one day about a year ago when he was playing with gross domestic savings numbers. What he found, to his surprise and initial skepticism, was that an increase in entitlements has closely corresponded to a decline in the country's savings. "We had this extraordinary increase in benefits, with each party trying to outbid the other," he says. "That practice has been eroding the country's flow of savings that's so critical in financing our capital investment." The decline in savings has been partly offset by borrowing from abroad, which brings us to our current foreign debt: "$5 trillion and counting," he says.
Growth in Entitlement Spending.
It's another bubble building and that will ultimately collapse. The entitlement society weakens the savings society, which weakens the (productive) capital investment society that generates the income and taxes that support the entitlements. Massive entitlement growth is cannibalizing the host that it depends on for sustenance. 

The bubble is being fed by the Fed printing a trillion dollars a year. Therein lies the next financial and economic crisis, and I daresay it will not be an econonometric model that tells us when it begins to implode, particularly since the first response will be to attempt to inflate the bubble all the more.  Without a rapid and firm reversal, this is how the U.S. becomes Greece.

Saturday Pictures

Saturday Pictures
October 19, 2013
(click to enlarge)

Yellowstone reopened.   So we went down.  



The girls along the Madison River.



Our smallest girl with buffalo in rear.



That's Dusty at the front of the line



Buffalo refusing to roam.



Geyser cone.



Young Hopeful Geyser.



Steamy Firehole Lake.



Young Hopeful again.



Old Faithful erupts.



Lake Yellowstone, Abasaroka Mountains.



Closer to home, joy in the leaves.

Friday, October 18, 2013

A Return to Sanity

I always wondered how Dylan Ratigan could live with himself, transitioning from being the height of sobriety and logic on CNBC to the insane LaLa Land of MSNBC.  I see now, he has come back to his senses.




China Agrees

Unlike yours truly, China buys U.S. Treasury bonds by the bushel, so Chinese opinion counts for more than its logic and insight. With the "resolution" Wednesday of the U.S. budget and debt ceiling "crisis," over in Beijing some Chinese financiers are saying, whoa, wait a minute.
The Beijing-based Dagong agency, one of the few notable non-US based credit rating agencies, has downgraded America to an ‘A -‘rating from ‘A’.
Ben is losing popularity and is viewed
as less secure over in Mao's land.
The move came shortly after Congress and President Obama narrowly averted a technical default. Fear [that] the world’s largest economy may default on its widely dispersed Treasury Bonds is making investors re-evaluate political and financial stability in the US.
The agency concluded.
"The fundamental situation that the debt growth rate significantly outpaces that of fiscal income and gross domestic product remains unchanged," Dagong said in the statement, adding Washington's solvency was vulnerable as old debts were still repaid through raising new debts.
"Hence the government is still approaching the verge of default crisis, a situation that cannot be substantially alleviated in the foreseeable future," it said.

The American people and its mainstream politicians have no self-control, they have no will. They are unwilling and unable to pay for their politics.

In late 2007 and into 2008 yours truly sold virtually all his stock before the U.S. ratings agencies downgraded securitized mortgage debt and bonds that funded failing firms such as Bear Stearns and Lehman. We understood well before official Washington and the major ratings agencies acted where it was headed then. While we are going along with the monetary reflation game now and holding on to our stock (as we rode the government induced consumer credit bubble in the years leading up to the Great Recession), we know where this is headed as well. There will come a time when we pull out.

Alan Greenspan knows where this is headed. Dagong knows where this is headed. So do Ted Cruz and Rand Paul and even Mitch McConnell.  So once did Dear President.
President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.
“We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”
Our toes are getting torn and bloody from kicking the can day after day, month after month and year after year. Each and every day now the drip, drip, drip of fiscal deterioration and monetary destruction and real irreparable crisis builds. There is no easy way out, not any more.