Saturday, December 31, 2005

OEX Option Model Returns for December '05:

Model: 4.48%
S&P500: -0.10%

Thursday, December 22, 2005

And I thought I had a hard time shopping for pants...

Check out this classic LBJ telephone recording. (RealPlayer required)

Friday, December 09, 2005

NEWS FLASH>> Bill Clinton Says Bush Wrong on Kyoto

The article states that Clinton is "a champion of the Kyoto Protocol". Really? If he was such "champion" of Kyoto, would it have killed him to spare an ounce of political capital trying to convince Congress and the American people that the protocol wouldn't have dire economic consequences, as he now claims? Do any of his Democratic defenders in the Senate share his view? If so, why did every one of them vote against ratifying the treaty back in 1998 on the grounds that it would cripple the US economy?

I offer up some sobering Doom & Gloom this Friday morning…

Below you’ll find a few excerpts from a research paper by The Heritage Foundation on the looming budget crisis. If the future turns out to be only half as bad as what’s predicted, then we’re in big, big trouble.

At some point within the next decade, the nation will be forced to temper its demand for more government-funded entitlement programs to bolster Medicare, Medicaid, Social Security, etc., and will be confronted with stark choices over which programs to cut and which ones to save just to stay afloat. The sandbar we’ve stuck our collective heads into so long ago is eroding quickly.
...Because of the cost of fully funding Social Security, Medicare, and Medicaid, leading long-term budget projections have calculated that federal spending will increase from the current 20 percent of gross domestic product (GDP) to a peacetime high of nearly 33 percent of GDP by 2050.

Yet even that may be a severe underestimate. These projections assume slower entitlement growth than estimated by the Social Security and Medicare trustees as well as substantial reductions in defense and other spending. Most critically, they assume that the resulting unprecedented increase in the national debt will not affect interest rates. More realistic assumptions show that Social Security, Medicare, and Medicaid costs will leap from 8.4 percent of GDP to 18.9 percent of GDP by 2050.

Unless lawmakers reform these programs, they will have to fund their costs by:

1. Raising taxes every year until federal taxes are 57 percent ($11,000 per household, adjusted into today’s economy) above the current levels;

2. Eventually eliminating every other federal program, including spending on defense, education, anti-poverty programs, and veterans benefits, by 2045; or

3. Running massive budget deficits (the status quo option). This is the most expensive option because it would cause the federal debt to increase from the current level of 40 percent of GDP to 500 percent of GDP. Beginning in 2025, just a small interest rate response would push federal spending to 44 percent of GDP by 2040 and 73 percent by 2050—levels twice as high as previous projections.

Those who consider these scenarios overly pessimistic should examine the Western European economies that are already sinking under the weight of their enormous social insurance systems. With birth rates that are not even sufficient to replace their current population, many “old Europe” nations have been forced to impose steep tax increases on their remaining workers to fund these bloated benefit systems...

...Compared to the United States, per capita income is 30 percent lower in the EU-15, economic growth rates are 34 percent lower, unemployment is substantially higher, and living standards match only America’s poorest states...As their populations continue to age, the economies of countries such as Germany and France risk collapsing under the weight of their unrealistically generous retirement and welfare systems. These European crises provide a glimpse into America’s future if government spending continues to increase steeply.

Thursday, December 08, 2005

You knew it was coming...

NEWS FLASH>> Canada's Liberals Promise Handgun Ban

The Liberals introduced a federal gun registry in 1995, ostensibly to keep violent crime involving guns to a minimum. 10 years and $2 billion later, the rate of gun crime in Canada has risen, particularly in heavily urban areas like Toronto. Faced with questions about the registry's efficacy in light of such embarrassing statistics, federal officials were quick to defend the registry by serving up a large helping of red herring. They said the registry was worth every dime, but that concerted efforts to eliminate gun violence was being thwarted by a spike in illegal weapons imports from trigger-happy America (Surprised?).

In drafting it's latest gun control proposal, the Liberal Party policy wonks apparently tried their best to cover all the bases, even if it meant back-tracking on the America-bashing a bit. To answer the obvious question, "Why would you need to ban domestically owned handguns if they are coming in illegally from the US in the first place?", the Libs said that though the US was a major gun source, so are the private collections of law-abiding Canadian handgun owners. Hence, the proposed ban, along with a plan to bolster the police presence at the border.

I don't know how many of you are familiar with the litany of regulations imposed on handgun owners in Canada, but they are quite lengthy and onerous, and the penalties for not reporting a stolen registered handgun that was later used in the commission of a crime are very severe. If it truly is the case that stolen Canadian guns are flooding the streets, why are the owners not being rounded up and charged with serious felonies, as prescribed by the federal gun control statutes? Simple. Because stolen guns aren't the problem. If they were, the Liberals would make sure the statutes were being enforced just to blunt the Conservative Party's "tough on crime" image. Trust me, the Liberal Party of Canada would not miss an opportunity like that.

Of course, I'm a pro-gun advocate. I can write until my fingers bleed in defence of gun ownership to no avail. Instead, how about we mull over the educated opinion of someone with some clout, namely Toronto Police Chief Julian Fantino:
"We have an ongoing gun crisis including firearms-related homicides lately in Toronto, and a law registering firearms has neither deterred these crimes nor helped us solve any of them. None of the guns we know to have been used were registered, although we believe that more than half of them were smuggled into Canada from the United States. The firearms registry is long on philosophy and short on practical results considering the money could be more effectively used for security against terrorism as well as a host of other public safety initiatives."
So, why the handgun ban again?

Thursday, December 01, 2005

OEX Option Model Returns for November '05:

Model: 16.10%
S&P500: 3.52%