Effor.com

Why is it so hard to find information about the reliability of heat pumps?  I want to replace a 30 year old GE system, but it seems that no one has reliability ratings on heat pumps/central AC systems….

I can find ratings on cars, cell phones, vacuum cleaners, carpeting, computers, irrigation systems, etc.   Nothing on heat pumps.  Zip.

Consumer Reports (a site I use often) pops up on almost every search I do on the subject, but they don’t have ratings on heat pumps.  They rate window AC units and gas furnaces, but not heat pumps.  It’s absurd that no one (that I can find) seems to have reviews/reliability ratings on various manufacturer’s heat pump products.  If you can rate furnaces, why not heat pumps?

I read that newer high efficiency units have thinner tubing in the coils - which supposedly cracks easier and faster - but nowhere that gives any data to show the difference.  Just stories….

I can read hundreds of sites that talk about what a heat pump is; I can read hundreds of sites that talk about the differences between air source and ground source heat pumps; I can read hundreds of sites that opine on which type of system is better for a particular climate - but NOTHING on which brand/model is the most reliable; which brand/model historically needs the most (or fewest) repairs; which brand/model has the most features, etc.

It’s like there’s a black hole for heat pump rating/reliability information.  I live in Knoxville, TN, and there are dozens of companies selling, installing, and repairing heat pumps here, but evidently I’d need to start a site to create some independent reliability ratings for their products - because so far no one else seems to be doing it….  This area seems to be begging for the equivalent of an Edmunds.com or KBB.com. 

I’m looking for a high efficiency, reliable, air to air (or ground source, depends on if I can afford the ground source right now or not) heat pump.  It should be simple, but then I read stories where someone thinks their xxx brand system is super reliable because it’s only needed 2 motors, 3 switches, and 1 compressor replaced in 10 years (”But it was covered under warranty!”) and I want to scream at the monitor….

Reliable means not having to replace major components for at least 10 years.  Reliable means that the system (with normal maintenance) will still be running 30 years from now - just like the original GE gas furnace and AC is still running in my house - and it’s 32 years old. 

I can’t believe that the HVAC campanies haven’t made progress in reliability over 30 years - but there are ZERO sites that I can find to indicate otherwise.

I asked about reliability ratings on a HVAC forum, and I can’t believe the way some of these people treat their potential customers.   Most everyone who replied to my questions said something similar to “it’s the installer that makes the difference” as if every single manufacturer sold identical units, assembled from the same parts, on the same assembly line. 

I know that some manufacturers have different lines that are pretty much the same with only the names changed to protect the innocent, and that many use off the shelf components which are the same as another manufacturer - but assuming the installer does his job right, I want to know which manufacturer has the most reliable product - regardless of cost.  It appears that that information is a highly guarded government secret, because there ain’t no one talking.  It’s the Area 51 of consumer information.

I tried asking the question about 5 different ways, but evidently HVAC people don’t like answering a direct question, because (contrary to what some on the thread claimed) I never received an answer, and I obviously pissed them off by asking again in different ways. 

Here’s one response I received: “hey why don’t you look4nac up your a$$, whatta douche bag. if the coil cracks in a year it sould be covered under warranty, same for the compressor.”

That type of attitude (along with a couple of “don’t let the door hit you on the way out”) responses shows me that the “pro’s” in the HVAC field need to work on their customer relationship skills.  Either that or they need to stop drinking a minimum of 2 hours before posting.  I had to stop posting to the thread before I blew a gasket last night.

 I just checked the forum thread again tonight and it doesn’t get any better.  The last post as of 9:16pm ET has another potential customer asking the same question in yet another way.  He says:

Ok, he’s eliminated the installer as a variable - this answer should be easy.  Something like “I work on/install several brands, and in my experience xxx needs fewer repairs overall than xxx brand” or xxx brand is good overall, but I’ve replaced dozens of compressors on xxx model” or whatever.  

But here’s the response he got:   If you have a great installer. Then the brand he installs/prefers is the best brand for you to get from him. 

Thanks for nothing.  That’s the exact same thing as saying “if you happen to be at a Chevy dealer, buy a Chevy.  If you’re at a Mercedes dealer, buy a Mercedes.  If you’re at a Honda dealer, buy a Honda.  Are you a dumbass?”  As the Guinness commercials say “Brilliant!”

These HVAC “pros” seem to think that because it’s covered under warranty, it doesn’t matter if it breaks.   That’s not what I mean when I say “reliability”.  Reliable means that it doesn’t break in the first place. 

Reliable means the compressor is a proven unit that’s been on the market for a few years and has a repair history, the coils have been stress tested and they don’t crack, the blower and fan motors have worked for years - without needing to be replaced - even if it’s under warranty.  If most of them are made by the same people, there should be a wealth of info available.  But there isn’t.

I did find a site named RemodelHomeGuide.com that had the most popular brands - but that tells me squat about reliability. 

Just had to vent - but if you know of a site with heat pump reliability ratings, PLEASE pass it on.   I promise to share any good info I receive.  One post at the HVAC link above did point me to a generic JD Power HVAC subcontractor rating from 2 years ago - but according to the press release, the actual product only accounted for 14% of the rating.  Sales and marketing support to the subcontractors counted for 18% of the rating - and they don’t even list reliability as a factor on the report….  Pretty much worthless.

I’ll post a follow up after I have a few local companies check out my house and provide price quotes. 

I had a Trane dealer here today.  Seemed honest, he didn’t recommend the higher SEER systems (recommended an XL15i dual fuel system) for my house, and he seemed upfront about the higher cost and (what he said was) lower reliability of the XL16i and XL19i systems.  Something that any installer/repair person could’ve - but didn’t - say on the HVAC forum I mentioned.

I’ll keep you posted as to what the others say - and I promise to follow up with the results.  Maybe I’ll go ahead and start a HVAC rating site since no one else seems to do it.

gk

I get an email every day from a financial website called the Daily Reckoning.  It’s mainly good stuff, once in a while they go a little off (as Aussies sometimes do) but it’s mainly good reading.

The email I received yesterday contained this:

“Buffett says inflation is exploding,” according to CNNMoney.

What can people do? A report in today’s news tells us that many are “delaying health care.” Probably a good move for the oldsters. If they put it off long enough, they won’t need it at all.

You could hang George W. Bush for inflation too. It would be fine with us. He let government spending get out of control. “Deficits don’t matter,” said his #2, Dick Cheney. More new federal spending and US financial commitments were added in the Bush years than under all the rest of America’s presidents put together; and more new money was created while George W. Bush was president than in all the years since the Declaration of Independence combined. Legally, we don’t know if that charge is enough to hang a man. Besides, it seems extreme. In the middle ages, if the keeper of the mint allowed monetary inflation, the king had him castrated. That seems like punishment enough.

Buffett says he is supporting Obama.

I like it!  Nice touches of sarcasm along with supporting data.  I don’t think I’m an Obama supporter, but I know that Bush has sucked - and he’s not likely to grow a pair before the election this fall.

There’s no real point to this post.  I just liked the email and wanted to share my thoughts on it. 

gk

I had posted an article late Friday night/Saturday regarding the “expert” opinions staying to stay fully invested in the stock market.  I’m not sure what happened to it, but it gives a not found error now.

Suffice it to say that all the major sites (CNN, FoxNews, NY Times, Marketwatch, etc) said pretty much the same thing.  “Don’t sell - now is a great time to buy!” (or words to that effect.)

They may be right, but they’ve been saying the same things since the market started falling last year.  If you listened to them and followed their advice, you’re down about 20% as of today. 

Speaking of today, CNN has another article advising everyone to stay in the market posted today.  Here’s a quote: “We took the opportunity to buy a few things in the financial sector last week,” said Ted Parrish, co-manager of the Henssler Equity fund. “Even with all the negativity, there are some values. The writedowns may continue but we think the worst of them may be over.”

How’s that working for you Ted?   And I’ve been reading the “the worst of the writedowns may be over” since last fall.  They haven’t stopped yet.  The time to buy (unless you’re made of money and don’t mind more losses) is when the writedowns stop.  Let’s see a quarter from Lehman or Bank of America with no more writedowns, let’s see a quarter from Goldman Sachs with no writedowns - I’ll buy back in then. 

Right now you’re urging investors to “catch a falling knife” and that’s never a good idea.

gk

Back in January, I posted a short article basically saying that it was way too early to call a bottom in financial stocks.  I had been reading an article on TheStreet.com by Doug Kass where he made the case that it was time to buy the financial sector, via XLF.  

While I agreed with much of his analysis, I didn’t think the financials were anywhere near a bottom - most banks and brokerages simply hadn’t taken into account the full impact of the sub-prime mortgage debacle.  Those relatively few bad mortgages were so highly leveraged that just a few percent failure rate is enough to make the whole house come tumbling down.

Despite the best efforts of the Fed, Bear Stearns has disappeared.  It took a $30 billion taxpayer backed guarantee to do it, and I think the buyout simply swept the underlying problems under the rug and out of sight - for a few months.

The last few months are looking more and more like a rehash of the Internet bubble and the resulting bear market from 2001 through 2003.  during that time, I lost count of how many times I heard things like “buy and hold”, “stay the course”, “this is a great buying opportunity”, etc. 

The people who listened “to the experts” back then STILL aren’t back to even on their investments, while those who got out and waited for the smoke to clear are way ahead.  Those of us who are conservative investors, who follow broad trends and don’t move in and out of the market very often know that this isn’t the time to buy back in.

Could this be the bottom?  Sure - but I don’t think so.   I move in and out of the market in my 401K based on the crossover of the 75 day EMA and the 200 day EMA.  I usually go with an S&P 500 index fund, and here’s what the chart looks like today.

The 75 and 200 day EMA’s are nowhere near signaling the start of another bull market, so my retirement money is 80% in cash and 20% in overseas funds.  I’m down about 4% for the year - how’s your 401K YTD? 

If you’re still fully invested (like the “pro’s” tell you to be) you’re down over 12% YTD, and you’re right back where you where in July of 2006.  If you’re retired and you’ve been fully invested for the last decade, you’re right back where you were in March of 1999. 

9 plus years and zero return - how’s that “buy and hold” strategy working for you?

Anyway, it’s time for a check on Mr. Kass’s buy call on XLF.  I normally don’t make a big deal about stuff like this - after all, analysts make bad calls everyday - but he titled his original analysis “Buy the Financials. Yes, Buy” to emphasize what a great opportunity it was.  So, let’s see how XLF is doing since Jan 14th.

XLF closed at $27.88 on Jan 14th.  It closed today at $20.57.  That’s down $7.31 - or about 26% in about 6 months. 

Great timing on the “Buy the Financials.  Yes, Buy” call Mr. Kass!  I hope you haven’t screwed over too many investors with your advice.

In my original post, I made this prediction: “In my humble opinion, we’re heading into a very rough period for almost all asset classes, but “soft” things like made up financial assets and corporate profits (measured in the dollar) will fare much worse than “hard” assets, such as commodities.”

Since I recomended investing in commodities instead of stocks, let’s see how my pick (gold) is doing.  Gold closed at $903.40 on Jan 14th, and it closed today at $931.30.  That’s up $27.90 - or about 3% in 6 months.

Yup, gold is up just a tad, and it’s actually off the highs of a few months ago.  It’s also just come back up over $900 after being stuck in the $860 to $890 range for a while - I mention that because it just came back up this week, and I don’t want to appear to be trying to hide that it’s been lower.

But as long as the Fed keeps printing extra money (inflating the supply) the dollar will keep falling, so gold will continue to hold its’ value for now. 

Only if Bernanke gets serious about fighting inflation and ensuring a stable dollar (which is the Fed’s primary purpose - read the Fed website if you don’t believe me) will the dollar rebound and gold fall.  And “Helicopter Ben” isn’t Paul Volker, so it ain’t gonna happen anytime soon.

For you too young to remember the late 70’s, inflation was high and the economy was stagnant - the term “stagflation” was coined to describe it.   We’re in the early stages of it now, and unless we get the Fed to grow a pair of brass balls, it’ll be 1980 all over again.

Raising rates and restricting money supply killed the stagflation, but it also caused a deep recession.  But that recession led to one of the greatest bursts of prosperity this country has ever seen.   We can do it again - if the Fed would administer the medicine.

As is stands, Bernanke is simply trying to keep a sinking ship afloat.  He doesn’t want a deep recession (or worse) to mar his tenure.  After all, he is an “expert” on the Great Depression, and he know’s what he’s doing.  Just like the experts calling repeated bottoms in the stock market.

I didn’t come up with any of this on my own.  Read  Warren Buffett’s annual letters to shareholders.  Read Phil Town’s “Rule #1″.  Read damn near anything by anyone who isn’t a Wall Street “expert”.  Their jobs are going away as the companies they work for are revealed to be a highly leveraged house of cards.  They’re running scared and are trying anything to keep up the pretense of the 80’s and dot com years.

What about the next 6 months?  I don’t see the financials (banks and brokerage houses) coming clean with their books yet - many are still pretending that their “level 3″ securities are still worth a lot of money.  Until they ‘fess up and take the losses they’ll just be on a long slow bleedout. 

This part is simply a guess, but I think Goldman Sachs is priced way too high.   At some point I think they’ll come down to earth just like the rest of the investment banks.  This might sound “out there” but I would not be suprised to see GS lose 50% (or more) of their value over the next 2 years.   Maybe sooner.  Something is fishy in their financial statements, but I can’t put my finger on what.  Just doesn’t smell right….

Back to the “hard vs soft stuff” that started this.  Don’t take my word for it - read and look at the situation for yourself.  Decide where to put your money because YOU want to put it there - not because some so-called “expert” on TV or the Internet said “Buy the Financials.  Yes, Buy”.

gk

How about some breaking news?  According to numerous news sources today, the Justices on the US Supreme Court can read!  Well, at least they can read some of the Second Amendment.

I gave my reasons why the Washington DC gun ban should be ruled unconstitutional back in March, and today 5 of the 9 justices agreed- at least partially - with me. 

CNN says The U.S. Supreme Court ruled Thursday that a sweeping ban on handguns in the nation’s capital violated the Second Amendment right to bear arms.  and Washington Mayor Adrian Fenty said he was disappointed in the ruling but will give the district’s police department 21 days to implement a process for registering handguns.

But if I was the plaintiff, I’d sue again, because It still will be illegal to carry handguns outside the home, and all pistols must be registered with police.

Sorry DC, but I don’t see how that’s constitutional either.  Read my previous post (linked above) and you’ll see why I think most of the current gun laws are invalid - or at least why they should be invalid.

But it is refreshing to find that there’s at least a few people in DC that can read - and better yet have taken the time to read - the US Constitution.  I may have more to say once I read the opinion and get past the various news organization takes on the story. 

Lock and load DC - you’re partially free again!

gk

George Carlin died yesterday.  I for one will miss him.  From providing cutting social commentary, to setting legal precedents, to forcing people to question things they were taught as children - George enlightened millions.

I find it curious that the news stories about George Carlin (that I read) all - without exception - talked about the Supreme Court decision regarding his “Seven Words You Can Never Say on Television” skit.  Some of the stories mentioned that the decision (FCC v. PACIFICA FOUNDATION, 438 U.S. 726 (1978)) established the rules for broadacst “decency” that we still use today.

But not a single one actually mentioned ANY of the “Seven Words”.  I thought we’d come further than that.  And by not mentioning the words, they missed the point of the skit entirely. 

Words are merely names we give to thoughts and things and actions.  In and of themselves, words mean nothing.  A word is simply a sound - why are some sounds ok and others “filthy” or “dirty” or “obscene”? 

In keeping with the spirit of Carlin’s intent, here is the original, unedited transcript - straight from the Supreme Court decision at FindLaw.  Ever wonder why it’s ok to print (or say) these words on the Internet?  It’s (in part) thanks to George Carlin. 

Here we go - enjoy! 

gk

(All that which follows is pure George - straight from the Supreme Court transcript.)

Aruba-du, ruba-tu, ruba-tu. I was thinking about the curse words and the swear words, the cuss words and the words that you can’t say, that you’re not supposed to say all the time, [']cause words or people into words want to hear your words.

Some guys like to record your words and sell them back to you if they can, (laughter) listen in on the telephone, write down what words you say. A guy who used to be in Washington knew that his phone was tapped, used to answer, Fuck Hoover, yes, go ahead. (laughter)

Okay, I was thinking one night about the words you couldn’t say on the public, ah, airwaves, um, the ones you definitely wouldn’t say, ever, [']cause I heard a lady say bitch one night on television, and it was cool like she was talking about, you know, ah, well, the bitch is the first one to notice that in the litter Johnie right (murmur) Right. And, uh, bastard you can say, and hell and damn so I have to figure out which ones you couldn’t and ever and it came down to seven but the list is open to amendment, and in fact, has been changed, uh, by now, ha, a lot of people pointed things out to me, and I noticed some myself.

The original seven words were, shit, piss, fuck, cunt, cocksucker, mother-fucker, and tits. Those are the ones that will curve your spine, grow hair on your hands and (laughter) maybe, even bring us, God help us, peace without honor (laughter) um, and a bourbon. (laughter) And now the first thing that we noticed was that word fuck was really repeated in there because the word motherfucker is a compound word and it’s another form of the word fuck. (laughter) You want to be a purist it doesn’t really - it can’t be on the list of basic words.

Also, cocksucker is a compound word and neither half of that is really dirty. The word - the half sucker that’s merely suggestive (laughter) and the word cock is a half-way dirty word, 50% dirty - dirty half the time, depending on what you mean by it. (laughter)

Uh, remember when you first heard it, like in 6th grade, you used to giggle. And the cock crowed three times, heh (laughter) the cock - three times. It’s in the Bible, cock in the Bible. (laughter) And the first time you heard about a cock-fight, remember - What? Huh? naw. It ain’t that, are you stupid? man. (laughter, clapping) It’s chickens, you know, (laughter)

Then you have the four letter words from the old Anglo-Saxon fame. Uh, shit and fuck. The word shit, uh, is an interesting kind of word in that the middle class has never really accepted it and approved it. They use it like, crazy but it’s not really okay. It’s still a rude, dirty, old kind of gushy word. (laughter) They don’t like that, but they say it, like, they say it like, a lady now in a middle-class home, you’ll hear most of the time she says it as an expletive, you know, it’s out of her mouth before she knows. She says, Oh shit oh shit, (laughter) oh shit. If she drops something, Oh, the shit hurt the broccoli. Shit. Thank you. (footsteps fading away) (papers ruffling)

Read it! (from audience)

Shit! (laughter) I won the Grammy, man, for the comedy album. Isn’t that groovy? (clapping, whistling) (murmur) That’s true. Thank you. Thank you man. Yeah. (murmur) (continuous clapping) Thank you man. Thank you. Thank you very much, man. Thank, no, (end of continuous clapping) for that and for the Grammy, man, [']cause (laughter) that’s based on people liking it man, yeh, that’s ah, that’s okay man. (laughter) Let’s let that go, man. I got my Grammy. I can let my hair hang down now, shit. (laughter) Ha! So!

Now the word shit is okay for the man. At work you can say it like crazy. Mostly figuratively, Get that shit out of here,  will ya? I don’t want to see that shit anymore. I can’t cut that shit, buddy. I’ve had that shit up to here. I think you’re full of shit myself. (laughter) He don’t know shit from Shinola. (laughter) you know that? (laughter) Always wondered how the Shinola people felt about that (laughter) Hi, I’m the new man from Shinola. (laughter) Hi, how are ya? Nice to see ya. (laughter) How are ya? (laughter) Boy, I don’t know whether to shit or wind my watch. (laughter) Guess, I’ll shit on my watch. (laughter) Oh, the shit is going to hit de fan. (laughter) Built like a brick shit-house. (laughter) Up, he’s up shit’s creek. (laughter) He’s had it. (laughter) He hit me, I’m sorry. (laughter) Hot shit, holy shit, tough shit, eat shit, (laughter) shit-eating grin. Uh, whoever thought of that was ill. (murmur laughter) He had a shit-eating grin! He had a what? (laughter) Shit on a stick. (laughter) Shit in a handbag. I always like that. He ain’t worth shit in a handbag. (laughter) Shitty. He acted real shitty. (laughter) You know what I mean? (laughter) I got the money back, but a real shitty attitude. Heh, he had a shit-fit. (laughter) Wow! Shit-fit. Whew! Glad I wasn’t there. (murmur, laughter) All the animals - Bull shit, horse shit, cow shit, rat shit, bat shit. (laughter) First time I heard bat shit, I really came apart. A guy in Oklahoma, Boggs, said it, man. Aw! Bat shit. (laughter) Vera reminded me of that last night, ah (murmur). Snake shit, slicker than owl shit. (laughter) Get your shit together. Shit or get off the pot. (laughter) I got a shit-load full of them. (laughter) I got a shit-pot full, all right. Shit-head, shit-heel, shit in your heart, shit for brains, (laughter) shit-face, heh (laughter) I always try to think how that could have originated; the first guy that said that. Somebody got drunk and fell in some shit, you know. (laughter) Hey, I’m shit-face. (laughter) Shit-face, today. (laughter) Anyway, enough of that shit. (laughter)

The big one, the word fuck that’s the one that hangs them up the most. [']Cause in a lot of cases that’s the very act that hangs them up the most. So, it’s natural that the word would, uh, have the same effect. It’s a great word, fuck, nice word, easy word, cute word, kind of. Easy word to say. One syllable, short u. (laughter) Fuck. (Murmur) You know, it’s easy. Starts with a nice soft sound fuh ends with a kuh. Right? (laughter) A little something for everyone. Fuck (laughter) Good word. Kind of a proud word, too. Who are you? I am FUCK. (laughter) FUCK OF THE MOUNTAIN. (laughter) Tune in again next week to FUCK OF THE MOUNTAIN. (laughter) It’s an interesting word too, [']cause it’s got a double kind of a life - personality - dual, you know, whatever the right phrase is. It leads a double life, the word fuck. First of all, it means, sometimes, most of the time, fuck. What does it mean? It means to make love. Right? We’re going to make love, yeh, we’re going to fuck, yeh, we’re going to fuck, yeh, we’re going to make love. (laughter) we’re really going to fuck, yeh, we’re going to make love. Right? And it also means the beginning of life, it’s the act that begins life, so there’s the word hanging around with words like love, and life, and yet on the other hand, it’s also a word that we really use to hurt each other with, man. It’s a heavy. It’s one that you have toward the end of the argument. (laughter) Right? (laughter) You finally can’t make out. Oh, fuck you man. I said, fuck you. (laughter, murmur) Stupid fuck. (laughter) Fuck you and everybody that looks like you. (laughter) man. It would be nice to change the movies that we already have and substitute the word fuck for the word kill, wherever we could, and some of those movie cliches would change a little bit. Madfuckers still on the loose. Stop me before I fuck again. Fuck the ump, fuck the ump, fuck the ump, fuck the ump, fuck the ump. Easy on the clutch Bill, you’ll fuck that engine again. (laughter)

The other shit one was, I don’t give a shit. Like it’s worth something, you know? (laughter) I don’t give a shit. Hey, well, I don’t take no shit, (laughter) you know what I mean? You know why I don’t take no shit? (laughter) [']Cause I don’t give a shit. (laughter) If I give a shit, I would have to pack shit. (laughter) But I don’t pack no shit cause I don’t give a shit. (laughter) You wouldn’t shit me, would you? (laughter) That’s a joke when you’re a kid with a worm looking out the bird’s ass. You wouldn’t shit me, would you? (laughter) It’s an eight-year-old joke but a good one. (laughter) T

he additions to the list. I found three more words that had to be put on the list of words you could never say on television, and they were fart, turd and twat, those three. (laughter)

Fart, we talked about, it’s harmless It’s like tits, it’s a cutie word, no problem. Turd, you can’t say but who wants to, you know? (laughter) The subject never comes up on the panel so I’m not worried about that one. Now the word twat is an interesting word. Twat! Yeh, right in the twat. (laughter) Twat is an interesting word because it’s the only one I know of, the only slang word applying to the, a part of the sexual anatomy that doesn’t have another meaning to it. Like, ah, snatch, box and pussy all have other meanings, man. Even in a Walt Disney movie, you can say, We’re going to snatch that pussy and put him in a box and bring him on the airplane. (murmur, laughter) Everybody loves it. The twat stands alone, man, as it should. And two-way words. Ah, ass is okay providing you’re riding into town on a religious feast day. (laughter) You can’t say, up your ass. (laughter) You can say, stuff it! (murmur) There are certain things you can say its weird but you can just come so close. Before I cut, I, uh, want to, ah, thank you for listening to my words, man, fellow, uh space travelers. Thank you man for tonight and thank you also. (clapping whistling)

The news is full of (no, not that!) stories about Congress investigating the role of oil speculation today.  A CNN story says “Near-record oil prices could quickly fall by half if Congress were to rein in speculators“. 

Sounds good - so what’s the hold up?  If Congress could simply pass a law that would drop oil prices by half, why don’t they? 

After all (the story goes on to say) “The testimony came as Congress, reflecting some sentiment among the public, blamed Wall Street traders for record oil and gasoline prices.”

let’s make sure we have this straight - Congress (and the public at large) are blaming “Wall Street traders” for the record oil and gas prices, and Congress could drop the price by 50% if they wanted to.  Am I missing anything?

Oh yeah, I forgot to mention one little bitty item: OIL IS A GLOBALLY TRADED COMMODITY!

In other words, disregard everything above, because (as the story eventually gets to) if it’s not traded on Wall Street, it’ll be traded in London, or Toyko, or Hong Kong.  The last time I checked, Congress can’t do a damn thing regarding regulating markets in other countries.  Oops…..

If you read to the end of the story, you eventually get to these two paragraphs:

Though many Democratic and some Republican politicians have furiously blamed speculation for driving up the price of oil, many analysts argue that the market fundamentals of supply and demand are the cause of record prices.

“If it is a bubble, then where is the evidence in the actual physical market?” asked Kevin Norrish, a commodities analyst with Barclays Capital in London. “There is an endless list of reasons why this argument is a very, very poor one - it will only make things worse.”

One thing that the idiots in Congress (and elsewhere) have forgotten is that “speculators” are only trading in the futures market - no physical oil changes hands. 

Here’s a quick example if you don’t understand.  Let’s say I buy a futures contract at $135/barrel for July delivery.  What do I do when the producer I bought it from drops off a tank truck full of oil at my front door?  Have you seen any oil tankers on Wall Street?   That’s what I thought.

In other words, if I buy up a bunch of futures contracts, I have to sell them before the contract date - I have no use for the oil!  Remember supply and demand?  If I bought oil for July delivery, I have to sell it before July - what happens to the price of oil if there’s no demand for what I bought? 

It’ll drop, big time.  So “speculators” must sell their oil before it’s delivered - if there’s no demand for it, they’ll have to sell at a loss.  If the demand has gone up, they make a profit. 

So what happens if Saudi Arabia pumps 5 million barrels of oil more in July than they did in June?  Supply has gone up so (assuming that demand has remained constant) the price will drop.  Supply and demand controls the price of oil.

Side note: There’s no way Saudi Arabia can pump that much more oil - I personally think we’re at “peak oil” right now at around 86 million barrels per day.  So with a constant or falling supply, and steady or increasing demand, the price must go up.  It doesn’t matter if we’re talking about oil or eggs or plywood or SUV’s - supply and demand rule.  As they should.

Any questions?

gk

I can’t believe that just a few months after letting one kid die, these religious nutcases have let another child die.  I’m not kidding - it’s the same group! 

After I disagreed with what the state did in Texas (the state couldn’t prove a damn thing and had no reason for taking the kids away from their parents) I’m on the other side in this one.  I can’t believe that after parents have been charged with manslaughter for letting a 15 month old kid die,  the state allowed the same church to withhold treatment from other kids - and now a 16 year old is dead.

It’s time to put these idiots into a chair and watch the smoke disappear into the sunset as they fry….  How many of their kids will we allow them to kill before the kids are removed from this insane environment?

gk

As I was driving around the streets of west Knoxville this afternoon, the stupidity of the traffic light system here made my blood boil.  Why can’t Knoxville set the timing on the lights so you don’t stop at every single light?

It ain’t rocket science!  Take Cedar Bluff road - please!  I defy anyone, at any time during the day, to drive through more than 2 lights (in either direction) without having to stop.  It’s nuts!  Set the fricking lights so that you get traffic progression in at least one direction.

Just think of how much fuel would be saved if you didn’t have to stop at every single light for one or two minutes.

Ever drive through a town where you saw a sign at a light saying “traffic lights set for 35mph” or something similar?  If you drive at the speed posted, you should only have to stop at ONE light while driving that road.  That’s called progression, and it’s really simple to do - why can’t Knoxville understand it?

One of these days I’m also going to have to rant about the cashiers working at stores and gas stations in Knoxville.  At least 40% of the time, they can’t count the change correctly - even though the register is telling them how much change is needed!  God forbid they should ever have to do the math to figure out the change….

Enough for now.  I feel better.

gk

As I said before, Texas had no right (and violated several amendments in the Bill of Rights) ro take children from their parents who are members of the FLDS.  At last they are being returned to their homes.

CNN says a Texas judge issued an order Monday allowing parents of hundreds of children seized from a polygamist sect to begin picking up their kids.

With one exception, Judge Barbara Walther told the Department of Family and Protective Services to allow parents to pick up the 440 children starting 10 a.m. Monday.

It’s about time!  What business is it of the state to determine the type a relationship consenting adults wish to have with each other?  IMHO, none. 

Polygamy should be legal, as should homosexual marriages.  I have a hard enough time with one wife - I would probably go insane with two, but it’s no skin off of my back if someone wants to get married.  I don’t care who they get married to.

gk

This just in - President Bush is “puzzled”

Oh yeah, that’s something new.  Let’s see what the story has to say next…

Bush was not “open and forthright on Iraq” and was slow in his response to Katrina. 

Damn, FoxNews is on their game today!  These are some awesome scoops! 

In case you haven’t noticed, I’m being sarcastic.  Bush is an idiot, who got us into a war in Iraq to finish off a family feud.

gk

I received some rather heated emails in response to a post I made on a wind energy forum.   In the post, I gave my response to a (rather lengthy) post calling for government mandated alternative energy goals, subsidies for alternative energy, mandatory replacement projects, and in general complaining that their pet project/business wasn’t being paid for with tax money - or government mandated private spending.

Most were of the “we’re subsidizing Big Oil, why not (insert pet project here) too?” variety, along with a couple of ”Big Oil/utility companies/automotive industry/government are suppressing alternative energy development” type conspiracy types mixed in.

Anyway, it got me to thinking about “big oil subsidies”, so I decided to do a bit of research to see just how much tax money is spent on “big oil subsidies.”

To summarize about 8 hours or research - I can’t find any.  Zip, nadda, zilch.  If anyone can point me to an example of a direct subsidy to the oil industry, I would appreciate it.

Note: I’ve read arguments where the federal and state gas taxes are a subsidy to big oil - because without state and federal highways, the oil industry couldn’t sell as much oil.  In a word, bullshit.  If all cars were running on hydrogen fuel cells (with the hydrogen being generated by solar power) we’d still need highways - where would the money come from without gas taxes?  I won’t belabor the point - think about it.

Some claim that “big oil gets special tax breaks” so I also looked at Exxon’s (the biggest of “big oil”) 2007 annual earnings statement.  Go to page 38 to see these numbers.

While it’s true that Exxon made over $70 billion in 2007, what’s often not reported is that they paid almost $30 billion ($29.864 billion to be precise) in taxes on that $70 billion of income.   That’s a 42% tax rate! 

Chevron made $32 billion in 2007, and they paid $18.6 billion in taxes.  That’s a 58% tax rate!

For comparison, GE made $26.6 billion in 2007, and paid $4.1 billion in taxes. That’s a 15% tax rate. 

IBM made $14.4 billion in 2007, and paid $4 billion in taxes.  That’s a 27% tax rate.

Google made $5.6 billion in 2007, and they paid $1.4 billion in taxes.  That’s a 25% tax rate.

Would someone please explain how “big oil” is getting a tax break in comparison with other “big” companies/industries?  Anyone? 

As to the argument that the oil companies are making too much money while we’re suffering at the pump and at home with huge heating bills - you need to remember that the oil companies have purchased rights to the oil they’re selling at market prices.  It’s the same as a farmer making triple the profit of the previous year because corn or soybeans have tripled in value.  Crap, now I’m gonna rant….

You want to talk about subsidies, look out your window the next time you’re flying across the country.  See those amber waves of grain?  Did you know that those farmers received over $5 billion in DIRECT payments in 2007?

I emphasised DIRECT because that’s tax dollars straight to the pockets of farmers as subsidies.  That’s not counting the $1.8 billion that we (via the federal government) are paying farmers NOT to farm almost 37 million acres under the CRP program in 2008 - despite record corn, soybean, and wheat prices. 

Meanwhile, despite the high cost of fossil fuel, alternative sources of energy still aren’t competitive without tax dollars.  There are thousands of websites dedicated to showing you how to collect subsidies for solar power, and over 80% of the wind energy generated is MANDATED to be purchased.  In addition, the federal government alone (not counting state and local subsidies) spent $745 million in DIRECT subsidies for wind power.

I want someone, anyone, to show me how we do the same with “big oil”.  Please. 

Is the government directly paying oil companies NOT to produce oil - like they do with farmers?  Is the government directly making  payments to oil companies to support the price of their product - despite record commodity prices - like they do with farmers?  Is the government directly paying oil companies for every barrel of oil they produce - like they do with wind and solar power?

If so, I’m sorry, I can’t find it.   Show me.

All that being said, I don’t think we should pay subsidies to anyone, for anything.  To those who have emailed me saying “nuclear/hydro/solar/hydrogen is subsidized, why shouldn’t (insert pet project) be subsided too?” I say tough shit sherlock.

I don’t want tax dollars to be spent on ANY pet projects.  No tax breaks for anyone, in any industry.  Everyone should pay the same tax rate - you make more, you pay more.   Any questions?

If no subsidies means that wind and solar (or biomass or hydrogen or whatever your pet project is) isn’t competitive with traditional energy sources at the current price levels, so be it.  Maybe it will be competitive when oil is $200/barrel, or $400/barrel. 

I don’t have time left to get into the whole ethanol issue tonight, but suffice it to say that I don’t think ethanol subsidies (or special tax breaks!) are a good idea either.

Here’s the really weird part - I fully support alternative energy sources.  Until about a year ago, I lived in a marginal wind resource area in MO, and I REALLY tried to make the numbers work so I could install a wind turbine on my property.  I even seriously looked into buying some land in Northwest MO where I could lease it to utility scale operations.  Because of my job,  I now live in Knoxville TN, and the wind resource here isn’t even close to making the numbers work.

If I had a chunk of change socked away, I’d be buying land in good wind resource areas like Texas and western Oklahoma and North Dakota right now, because I think wind will eventually be competitive with traditional energy sources, and I’d like a piece of that economy.  But I’m still paying off my house in Knoxville, and I won’t speculate with my money until I’m personally secure financially.

One email response I received to the post (remember the post above that started all of this?) suggested that this discussion didn’t belong on the message board, because “this is a small wind discussion list, not a forum on government policies.” 

If that’s the case, why are messages supporting wind subsidies (even urging members to write their congressmen about particular bills) deemed perfectly fine, but any message opposing that socialist point of view deemed unfit?

I’m been a member of the AWEA Wind Home forum on Yahoo for a couple of years, and I’ve learned a lot.  I guess I’ll go back to lurking quietly since my preferred methods differ from those expressed by some alternative energy nazis.

gk

This ticked me off.  In part, it says:

“Without adequate funding, we are jeopardizing some of the world’s most spectacular wildlife and wild lands,” said Evan Hirsche, president of the National Wildlife Refuge Association and chairman of the Cooperative Alliance for Refuge Enhancement.

Pull your taxpayer funded head out of your ass Evan.  It’s a “wildlife refuge” not a national or state park.  Why the hell do you need hundreds of millions of dollars in funding to keep something natural?

I understand about parks, those are different - they’re set up for people to visit and you need certain facilities.  A “wildlife refuge” is not the same.  People shouldn’t expect boardwalks and carpet in visitor centers.

According to the story, Alaska has 76 million acres of refuge lands and accounts for 83 percent of land in the refuge system. Managing those lands can be particularly daunting given the sheer size and remoteness of many of the state’s 16 refuges, said Todd Logan, regional chief of the National Wildlife Refuge System in Alaska.

Excuse me, but if 83 pecent of the land in the refuge system is in Alaska, I don’t think prostitution, growing pot, and illegal immigrants camping in the refuge should be much of a problem.

Get your own funding and keep your greedy paws out of my wallet.

gk

Sometimes it’s better to be lucky than good.  Especially regarding news stories and commenting about them…. 

Regarding the FLDS polygamy case, it was just yesterday I said ”the state has based their entire case on anonymous “calls” that may be a hoax.”   I then listed the many Constitutional issues that I saw with the case, and related it to the rights we’ve seen eroded in the “war on terror”.

Today, a Texas State Court of Appeals ruled that the state had no right to remove the children.  Better late than never, but that’s little consolation to those parents and children who were wrongfully separated back in April.

A CNN story tonight says “Flanked by the FLDS mothers represented in the case, Balovich said authorities considered the YFZ Ranch one household, an assertion with which the appeals court did not agree.

Therefore, proving that there was abuse in one household did not mean the state could apply that behavior to the entire ranch.”

Balovichs’ statement makes sense to me.  Imagine if one person in your subdivision was suspected of abuse, so they took everyones’ kids away.  It’s the same thing.

The CNN story also has this little tidbit: “Police have alleged that a family shelter crisis line received multiple calls March 29 and 30 from a caller claiming to be Sarah Jessop Barlow, age 16.

At least one of the telephones used by “Sarah Barlow” has been traced to a Colorado woman. Police say Rozita Swinton is a person of interest in connection with the reports of abuse at the ranch, but she has not been charged. She does, however, face a charge of providing a false report to authorities in a Colorado case.”

In other words, the facts so far publish are indicating that the entire case is made up.  Someone in Colorado evidently made up the story and called a hotline, so hundreds of kids and parents have been uprooted and falsely accused.  

How many millions of tax dollars has the state wasted on this case so far?  How much money has gone to pay foster parents, to pay for temporary shelter and meals for the women, etc?

Will people in Texas eventually stand up and say “enough is enough”?  Will they prosecute (or sue) the people behind this fraud?  Will they eventually say “go away and leave me the hell alone!” to the state?  One can only hope….

gk

I haven’t said anything about the Texas state raid of the “polygamist compound” but I read a story tonight on FoxNews that kinda ticks me off.  When I get ticked off I need to say something about it, so here goes….

The story is about a supposedly underaged girl who gave birth while in state custody.  The state immediately took the child away and placed it in foster care.  Is this standard in Texas?  Does the state take all children born to underage mothers away from the parents?  I sure hope not!

Another aspect of this case is that the supposed “underage” mother claims to be 22 years old.  Her attorney said “She is 22.”  Shouldn’t the state be required to show some evidence (or at least probable cause) before taking kids from their parents?

But this is the part of the story that ticked me off: 

Child welfare officials and state troopers raided the FLDS’s Yearning For Zion Ranch in Eldorado after a domestic violence shelter received calls from someone claiming to be an abused 16-year-old girl. The girl has never been found and authorities are investigating whether the calls were a hoax.

In other words, the state has based their entire case on anonymous “calls” that may be a hoax.  From what I can tell, Texas has violated the:

Fourth Amendment: The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrents shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.  (Who issued the warrant without having the “16-year-old girl” testify “by Oath or affirmation?”)

Fifth Amendment: No person shall be held to answer for any capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.  (These people have been deprived of liberty and their property - even their kids! - taken away with no “due process” that I’ve seen.)

Sixth Amendment: In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district where in the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defense.   (What have these people been charged with?  Who are the witnesses?  Have they been allowed to “confront” (question) the witnesses?)

Eighth Amendment: Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.  (Why haven’t these people been released on bail?  I know they can’t be released on bail - because they haven’t been charged with a crime.  Yet the state is holding them against their will without charging them with a crime.  And if taking your kids away with no reason given isn’t “cruel and unusual punishment”, what is?)

Hmmm….  Sounds kinda like Gitmo….   All of you who don’t think it’s a problem to hold people indefinitely without charging them with a crime, raise your hands….  Now, I want all of you with your hands raised to spell Lettre de cachet.

Question: Why is this any different than the people we’re holding in relation to terrorism? 

Answer:  It’s not.  What goes around comes around - when Bush decided it was ok to hold even one person without following the Constitution, we all lost our basic rights.  I hope someone sues the state for this.

gk

It was interesting watching the stock market go into a steep sell-off today after the Fed meeting minutes were released.  For some reason, most people are still underestimating the severity of the problems in the economy, and they’re stunned when they see something that doesn’t fit into the Goldilocks scenario they’re anticipating.

Here’s how CNN phrased the dilemma facing the Fed: The Fed lowered its economic growth forecast for the year. At the same time, it raised its projections for inflation and unemployment. The combination of slowing growth and rising prices [emphasis mine] created a difficult situation that made the Fed’s latest decision to cut rates on April 30 a “close call.”

Webster defines “stagflation” as persistent inflation combined with stagnant consumer demand and relatively high unemployment

Notice the similarity between the two preceding paragraphs?  Everyone remembers the stagflation we had in the Carter years.  Carter was a disaster for this country, and it took Reagan to turn things around, but Carter was an economic genius compared to Bush!

At least Carter took steps in the right direction by deregulating the oil and natural gas industries - Bush ain’t done squat except to print more money to try to inflate his way out of the mess he caused by creating cheap credit after 9/11.  

The problem wasn’t so much the easy money policy, it was that they kept the easy money policy in place for far too long.  This created the housing bubble, which led to our current credit crunch as all the mortgage backed security instruments lose value as home owners can’t make payments on houses that are worth less than the mortgage balance.

The “close call” CNN refers to is that the Fed is stuck now.  They want to lower rates to stimulate the economy, but that will just exacerbate the inflation problem which is caused by too many dollars in circulation.   That’s what happens when the Fed tries to manipulate the economy instead of following their mandate to ensure a stable monetary system.

From the website of the Federal Reserve: The Federal Reserve System is the central bank of the United States. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system.

The Fed has become too political to do its’ job - which is to provide for a stable currency.  The same easy money policy (which leads to inflation) has caused the value of the dollar to drop by about 50% since Bush took office.  Like it or not, a dollar today will only purchase about half of the “stuff” that it would 7 years ago.  Thanks GW…  NOT!

When you see the price of commodities such as oil, wheat, soybeans, corn, etc. (the “stuff” we use) double and you wonder why, that’s why.  Global demand plays a part, but the major reason is that we are paying for the “stuff” in a global marketplace with inflated dollars that people don’t want.

That concludes your economics lesson for today.  Any questions?

gk

According to a story on CNN today, the “U.S. Treasury Department is violating the law by failing to design and issue currency that is readily distinguishable to blind and visually impaired people.”

I don’t know about you, but I’ve bought newspapers and junk food from blind people and we’ve never had any problems.  Think of the expense of redesigning all ATM’s and vending machines to accept redesigned paper money incorporating “Suggested solutions include making bills different sizes, including raised markings or using foil printing which is a method of hot stamping that is tactically discernable.”

May I humbly suggest that these judges get a life?  Let’s face it, with the government printing money like mad, which will soon cause inflation to take off, all our paper money is going to be worth about the same in a few years anyway….  Zero.

I don’t really care if they redo the greenback or not - I posted this simply to get in the part about the government and inflation causing paper money to be worthless in a few years. 

But it does seem like a giant waste of time and money to me.  Here’s an idea, for less total cost, the government could hire a sighted person to follow each blind person around all day and make sure they aren’t getting ripped off!  (That’s sarcasm for those of you about to bombard me with email and comments.) 

gk