San Antonio's Water Recycling

On Weekend Edition Saturday, Wade Goodwyn looks at how San Antonio has advanced their water conservation:

"We have a goal to save a billion gallons of water every single year by working with all of our customers," says Karen Guz, the water system's director of conservation. She says the plant is hitting that goal. "We are a community that has figured out that it is better to save water than to worry about having to always just acquire more water."
Guz says it started in the early '90s when the Sierra Club sued the city in federal court to protect an endangered species — the blind salamander — that lived in the water supply of the Edwards Aquifer.
When the judged ruled in favor of the Sierra Club, San Antonio politicians and newspapers spitted with rage. Twenty years later, the current San Antonio Mayor Julian Castro says his city has learned the judge was right.
"The city, over these last two decades, really has made lemonade out of lemons. In fact, the number of gallons per consumer in San Antonio per day that is used has gone down from just over 200 to about 130," Castro says.

All too often, the dreaded changes made by environmental regulations or other activities ends up being beneficial and cost-effective long-term.  But laziness and stubborness cause people to fight tooth-and-nail against change.  So much technological advancement wouldn't come about without the regulation forcing changes to be made.  Inertia is a mighty powerful force.

The Financial Disaster Tour Comes To California

Michael Lewis visits California, talks to Ahnold, goes to San Jose, and then Vallejo.  Along the way, he visits UCLA (h/t Ritholtz):

The road out of Vallejo passes directly through the office of Dr. Peter Whybrow, a British neuroscientist at U.C.L.A. with a theory about American life. He thinks the dysfunction in America’s society is a by-product of America’s success. In academic papers and a popular book, American Mania, Whybrow argues, in effect, that human beings are neurologically ill-designed to be modern Americans. The human brain evolved over hundreds of thousands of years in an environment defined by scarcity. It was not designed, at least originally, for an environment of extreme abundance. “Human beings are wandering around with brains that are fabulously limited,” he says cheerfully. “We’ve got the core of the average lizard.” Wrapped around this reptilian core, he explains, is a mammalian layer (associated with maternal concern and social interaction), and around that is wrapped a third layer, which enables feats of memory and the capacity for abstract thought. “The only problem,” he says, “is our passions are still driven by the lizard core. We are set up to acquire as much as we can of things we perceive as scarce, particularly sex, safety, and food.” Even a person on a diet who sensibly avoids coming face-to-face with a piece of chocolate cake will find it hard to control himself if the chocolate cake somehow finds him. Every pastry chef in America understands this, and now neuroscience does, too. “When faced with abundance, the brain’s ancient reward pathways are difficult to suppress,” says Whybrow. “In that moment the value of eating the chocolate cake exceeds the value of the diet. We cannot think down the road when we are faced with the chocolate cake.” The richest society the world has ever seen has grown rich by devising better and better ways to give people what they want. The effect on the brain of lots of instant gratification is something like the effect on the right hand of cutting off the left: the more the lizard core is used the more dominant it becomes. “What we’re doing is minimizing the use of the part of the brain that lizards don’t have,” says Whybrow. “We’ve created physiological dysfunction. We have lost the ability to self-regulate, at all levels of the society. The $5 million you get paid at Goldman Sachs if you do whatever they ask you to do—that is the chocolate cake upgraded.”

The article is worth reading, if just for the optimism at the end.  The first three pages (online) with Schwarzenegger didn't really do much for me, but the challenges in San Jose and Vallejo were very interesting.  In the end, Vallejo gives some hope.  I've always felt some concern with the position of Mish, that all the governments should file for bankruptcy and screw over the public workers, but once Vallejo hit bottom, they have seemed to have some real conversations about what matters.  I'd prefer to have such discussions before hitting rock bottom. 

While I'm generally pessimistic about the human condition, I do hold out some minor optimism about citizens being able to rationally deal with the problems that face us.  Here in Ohio, Senate Bill 5, which is facing a referendum, tried to deal with some of the issues mentioned in the article.  Unfortunately, it was a one-sided, one-size-fits-all approach, which was railroaded through the legislature.  It  made public employees out as the enemy, when they happen to be your neighbors.  Many of the bill's provisions will have to be enacted at some point, but bundling them all up and slamming them through the legislature wasn't the way to get there.  Republicans need to work on that civility thing, if we are going to work through the challenges we face.

What About China?

Stephen Roach says not to worry, they've got things under control (h/t Mark Thoma):

China’s economy is slowing. This is no surprise for an export-led economy dependent on faltering global demand. But China’s looming slowdown is likely to be both manageable and welcome. Fears of a hard landing are overblown. To be sure, the economic data have softened. Purchasing managers’ indices are now threatening the “50” threshold, which has long been associated with the break-even point between expansion and contraction. Similar downtrends are evident in a broad array of leading indicators, ranging from consumer expectations, money supply, and the stock market, to steel production, industrial product sales, and newly started construction.
But this is not 2008. Back then, global commerce was collapsing, presaging a 10.7% drop in the volume of world trade in 2009 – the sharpest annual contraction since the 1930s. In response, China’s export performance swung from 26% annual growth in July 2008 to a 27% contraction by February 2009. Sequential GDP growth slowed to a low single-digit pace – a virtual standstill by Chinese standards. And more than 20 million migrant workers reportedly lost their jobs in export-led Guangdong province. By late 2008, China was in the throes of the functional equivalent of a full-blown recession.

I would assume China will have some type of collapse in the not-too-distant future, but maybe not.  His explanations seem reasonable, and I have no insight into the market.  Maybe it is like folks in Britain might have expected the U.S. to stumble throughout the fifties and sixties, because the growth was too fast.  Anyway, a soft landing in China might prevent an even worse financial crisis when Europe and the U.S. grapple with our debt-induced double dip, and it will have to ease things in Australia.

Unintentional Irony

First International Bank in Plano, Texas was seized by the FDIC, and sold to American First Bank in Houston.

This Weekend's Trophy Games

Michigan and Minnesota play for the Little Brown Jug.

Notre Dame and Purdue play for the Irish Shillelagh Trophy.

 Cincinnati and Miami of Ohio play for the Victory Bell.

 Illinois and Northwestern play for the Land of Lincoln Trophy (a replacement of the Sweet Sioux Tomahawk).

Finally, in the big MIAC battle between St. Thomas and St. John's, the Holy Grail is on the line, along with Minnesota Catholic bragging rights.



The question may come up as to why I follow the MIAC. The main reason is Coach John Gagliardi at St. John's. I read this article in SI, back in 1992, and generally followed their results afterwards. Later, I read Austin Murphy's book on the 1999 season, The Sweet Season. This is what I really liked about the SI article:

Most coaches feel naked without a whistle. Gagliardi doesn't own one. He prefers to keep the trappings of his office to a minimum. He has only two assistant coaches. Seniors are expected to act as position coaches. Since the Johnnies block and tackle adequately during games, Gagliardi doesn't require them to block and tackle in the preseason or, once the season has begun, during the week. "Visualize it," he tells his players. "Fantasies don't always have to be about the opposite sex."

Nothing depresses Gagliardi more than an injury, and the Johnnies suffer very few. "You know how most coaches will make their quarterback off-limits in practice?" he says. "Well, what about the other guys? They've got mothers too."

It seems to work for the all-time leading college football coach in career victories.

Using Math To Ferret Out Fraud

The Guardian, via nc links:

Government figures are subjected to various audits already, of course, but alongside checking that things marry up with one another, forensic statisticians also have ways of spotting suspicious patterns in the raw numbers, and thus estimating the chances that figures from a set of accounts have been tampered with. One of the cleverest tools is something called Benford's law.

Imagine you have data on, say, the population of every world nation. Now, take only the "leading digit" from each number: the first number in the number, if you like. For the UK population, which was 61,838,154 in 2009, that leading digit would be "six". Andorra's was 85,168, so that's "eight". And so on.

If you take all those leading digits, from all the countries, then overall, you might naively expect to see the same number of ones, fours, nines, and so on. But in fact, for naturally occurring data, you get more ones than twos, more twos than threes, and so on, all the way down to nine. This is Benford's law: the distribution of leading digits follows a logarithmic distribution, so you get a "one" most commonly, appearing as first digit around 30% of the time, and a nine as first digit only 5% of the time.

Next time you're waiting for a bus, you can think about why this happens (bear in mind what leading digits do when quantities repeatedly double, perhaps) but reality agrees with this theory pretty neatly, and if you go to the website testingbenfordslaw.com you'll see the proportions of each leading digit from lots of real-world datasets, graphed alongside what Benford's law predicts they should be, with data from Twitter users' follower counts to the number of books in different libraries across the US.

It doesn't work perfectly: it only works when you're examining groups of numbers that span several orders of magnitude, for example.

This is an interesting subject to me, as I've noticed that I create a pattern when trying to come up with random numbers for something.  Nate Silver had a post on the subject when he was accusing Strategic  Vision of falsifying poll data.  Uses of math to catch criminals is as good of a use of math as using it for gambling.

Resurrecting A Local Beer

Fast Company looks at the cost of the ad campaign for National Premium Beer in Baltimore:

The resurrected brew goes for a second run with a new ad campaign.

BEER: National Premium, a 139-year-old Baltimore beer that died in 1996
NEW OWNER: Tim Miller, local real-estate agent

$200,000// Miller's estimated relaunch cost
That includes $100,000 for marketing, and $75,000 for the beer's first run. Rather than brew it himself, he'll save money by hiring a brewery to work off National's old recipe. He expects immediate interest. "It has big-time name recognition," he says.

$1,000,000// The beer's marketing value
That's what the owner of a similar regional beer--Mark Hellendrung of Narragansett Beer--estimated his brand's recognition was worth in advertising dollars when he relaunched it in 2005. He spent $10,000 on a billboard, and it was an instant hit.

$???// Cost of overcoming the past
"You can get caught up in the romance, but you have to keep in mind that there are a lot of people who lived through the demise and remember people being laid off," says Hellendrung. Winning over old-timers requires time, money, and lots of samples.

This brings to mind Greg Hardman's work trying to bring back the Hudepohl, Schoenling, Burger and Christian Moerlein.  It is tough work and not at all cheap, and I try to support it as much as possible.

A Positive Perspective

Steven Pinker gives us a somewhat reassuring chart (h/t The Dish):

The Challenges Of Managing Renewable Power

Europe is running into a situation of paying people to use power (h/t Ritholtz):

The 15 mile-per-hour winds that buffeted northern Germany on July 24 caused the nation’s 21,600 windmills to generate so much power that utilities such as EON AG and RWE AG (RWE) had to pay consumers to take it off the grid.
Rather than an anomaly, the event marked the 31st hour this year when power companies lost money on their electricity in the intraday market because of a torrent of supply from wind and solar parks. The phenomenon was unheard of five years ago.
With Europe’s wind and solar farms set to triple by 2020, utilities investing in new coal and gas-fired power stations no longer face stable returns. As more renewables come on line, a gas plant owned by RWE or EON that may cost $1 billion to build will be stopped more often from running at full capacity. It may only pay for itself on days like Jan. 31, when clouds and still weather pushed an hour of power on the same-day market above 162 ($220) euros a megawatt-hour after dusk, in peak demand time.

It would seem like pumping water to fill elevated reservoirs or some other fairly inefficient storage solution would be preferable to this scenario.  What about water electrolysis to store hydrogen for use in a fuel cell or something?  This would seem like the same kind of issue nuclear plants have run into over the years, but it is hyped more because it is renewable.  Overall, it seems like a very solvable problem to have.

From the Department of WTF?

Steve Bartman Night at the Dayton Gems exhibition hockey game?  Apparently:

The Dayton Gems professional hockey team, proud members of the Central Hockey League, are excited to announce that the team’s lone preseason exhibition game on Cassano’s Italian Ice at Hara Arena will be “Salute to Steve Bartman Night” when the team hosts division rival Fort Wayne Komets on Friday, October 14 at 7pm. In honor of Bartman, and his infamous foul ball grab which arguably set off the biggest professional sports controversy in the past decade, the Dayton Gems will salute him and his rather unfortunate distinction by offering Bartman a free ticket to the game, to be left for him at the Hara box office, to celebrate the eighth anniversary of his notoriety.
In addition, any fans dressed as Steve Bartman, complete with Cubs hat, green turtleneck and wearing headphones, will also receive one free admission to the game. Gems team president Joe Greene spearheaded the idea, noting “while our staff will be dressed like Steve, and there will be baseball and Bartman themed contests and promotions going on throughout the night, we would like to remind our fans to refrain from reaching over the glass for stray pucks.” The team will also offer prizes and special recognition for the best dressed “Bartman” lookalikes in attendance.

I take it that the promotions director watched "Catching Hell," and a light bulb went off.  Hey, leave this guy a ticket to a crappy minor league hockey game in Dayton, Ohio, we get a bunch of publicity, and it won't even cost us a ticket.  Instead of warning fans not to reach over the glass for pucks, they ought to have a contest where all the people who got in free by dressing like Bartman, try to catch a shot puck with their baseball glove. 

Anyway, let it die.  The guy has no connection to Dayton or hockey, and other than the documentary on ESPN, there is no reason to commemorate the 8th anniversary of the event.  If Alex Gonzales wouldn't have booted the ball later, Bartman wouldn't even be remembered.  But, it is minor league hockey, so publicity is publicity.

A Great Picture

via AOL:

Apparently, the bride fell into a lake when they were taking a picture, so after climbing out, she needed a refreshing Old Milwaukee.  Not an OML.

First TARP Vote Failure

September 29, 2008:

Following the bankruptcies of Lehman Brothers and Washington Mutual, The Dow Jones Industrial Average falls 777.68 points, the largest single-day point loss in its history.

That day was pretty busy.  It seems like it was longer than 3 years ago.  I was sowing wheat and listening to the news on the radio, when I went home, I checked out the grisly results in the markets.  That was a pretty wild ride.  That field of wheat did really well, too.

America's Wild Fruit

Morning Edition introduces listeners to the paw paw:

Although you may not have heard of it, the pawpaw has quite a history. Thomas Jefferson had pawpaws at Monticello. And when he was minister to France in 1786, he had pawpaw seeds shipped over to friends there. He probably wanted to impress his friends with something exotic from America.
Lewis and Clark wrote in their journals that they were quite fond of the pawpaw. At one point during their expedition in 1806, they relied on pawpaws when other provisions ran low. And from Michigan to West Virginia, people have even named towns and lakes after the pawpaw.
But the pawpaw has only recently been commercialized. That's one reason you don't see it in the grocery store. So far, there are just a few orchards selling to farmers markets. This progress is largely thanks to the work of plant scientist Neal Peterson.

I forgot to look for paw paws this year.  A couple of years back, I saw a couple of fruits hanging in a tree on the edge of my hay field.  I tried a little piece, but I don't think it was quite ripe.  I keep intending to try them again, but haven't.  This year, I noticed a bunch of wild raspberries along my new hay field.  I tried some of them, and they were extremely good.  I never ended up picking a large number of them, but I'd just grab a few each time I got off of the tractor.

10,000 Acres Abandoned?

This seems overly dramatic (h/t naked capitalism):

 Farmers over-relied on Monsanto’s revolutionary and controversial combination of a single “round up” herbicide and a high-tech seed with a built-in resistance to glyphosate, scientists say.

 

Today, 100,000 acres in Georgia are severely infested with pigweed and 29 counties have now confirmed resistance to glyphosate, according to weed specialist Stanley Culpepper from the University of Georgia.

 “Farmers are taking this threat very seriously. It took us two years to make them understand how serious it was. But once they understood, they started taking a very aggressive approach to the weed,” Culpepper told FRANCE 24.

 

“Just to illustrate how aggressive we are, last year we hand-weeded 45% of our severely infested fields,” said Culpepper, adding that the fight involved “spending a lot of money.”
In 2007, 10,000 acres of land were abandoned in Macon country, the epicentre of the superweed explosion, North Carolina State University’s Alan York told local media.

Based on reading the story about Macon county, I assume that 10,000 acres of crops in 2007 were left in the fields.  It seems strange to me that the anti-GMO, anti-Monsanto crowd is crowing about Roundup resistance, but ALS resistance is rarely noted.  This isn't a new trend, it is just a new herbicide being affected.  People who are opposed to GMO crops are excited by this trend, but the GMO horse is out of the barn, and we will just get GMO seeds with different herbicides they are tolerant to.  We aren't going back to non-GMO seed, at least I don't anticipate that.

Are Markets At The Edge Of The Cliff?

Sydney Morning Herald, via The Big Picture:

So this is a global sell-down, and a big one. But so far it is still driven by uncertainty rather than a consensus view that the battle to pull the world out of the hole it dug for itself in the 2007-09 financial crisis has been lost. From here the market could rally sharply or descend into a genuine crash that tests the 2009 global crisis lows, depending on the verdict.
There's a lot to worry about. This week it includes Italy's sovereign debt downgrade, debt ratings cuts for three big US commercial banks, Bank of America, Wells Fargo and Citigroup, reduced IMF global economic growth estimates, signs of a slowdown in the world's last growth engine, China, and comments from the US Federal Reserve down that global growth has slowed alarmingly.

The Fed's decision this week to sell $400 billion of short-term debt and use the money to buy long-term debt is a plus, as is the G20's promise to produce a crisis prevention blueprint by early November at the latest.

The commodity declines are troubling me the most.  Will grain markets collapse before harvest is complete?  Should I be locking in prices for 2012 crops?  I am guessing that prices will drop dramatically if the Eurozone falls apart, but for how long?  The price runup has been extremely beneficial for farmers, but it isn't going to last forever, and the collapse will be much more painful than the climb was helpful.

Chart of the Day

New York Magazine on Republican charges of class warfare (via Mark Thoma):

The article gives a good explanation of how Republicans ignore taxes other than the federal income tax when talking about tax burdens.  People who make less than $200,000 a year and vote Republican are getting played.

Oil In The Bakken

The New Yorker reports from the North Dakota oil boom:

The rock is the Bakken formation, a layer of the basin that geologists believe holds a twenty-five-thousand-square-mile sea of oil. (The formation is mostly beneath the surface of North Dakota, but it extends into Montana and Canada.) The head of the state’s department of mineral resources, Lynn Helms, recently estimated that the region could contain eleven billion barrels of oil that can be obtained using current technology, nearly enough to supply the United States for two years. That assessment has doubled since a 2008 United States Geological Survey study, and the amount that will eventually be recoverable is the subject of intense speculation. “The Williston Basin is still relatively underexplored and poorly understood in terms of its geology,” Helms said. “It’s a subterranean detective story.”
A hundred and thirteen million barrels of crude oil were produced in North Dakota last year—more than five per cent of the country’s domestic output. (The U.S. produces slightly less than half of the oil it consumes.) The increase is well timed. Last month, with oil prices rising, President Obama announced the goal of reducing by one-third America’s reliance on foreign oil by 2025. But the restrictions on offshore drilling that followed the 2010 Gulf of Mexico spill have limited domestic oil production, and the disastrous blowup at Japan’s Fukushima plant last month has made an increase in nuclear power politically untenable. Meanwhile, the past two years were the first since 1991 in which domestic oil production increased, owing substantially to North Dakota’s contributions. Geologists believe that Williston could be at the beginning of a twenty-year boom.

I'm rarely an optimist, and I think the oil guys will end up being high on this field.  I would anticipate rapidly decreasing production from wells after they start production.  Oil men are natural optimists, so I guess we'll see what the future holds.  We may still be able to find large oil plays, but we won't be able to find them and drill them as fast as we consume the oil.

Microdistilling In Brooklyn

The Atlantic:

Brad Estabrooke is "an ordinary guy with an extraordinary love of distinctive wines and spirits." Frustrated with his day job, he decided to start his own company after reading about newly relaxed regulations for small distilleries. In the summer of 2011, he launched Breuckelen Distilling Company, the first gin distillery in Brookyn since the prohibition. The gin is made with organic grain from the New York area, and flavored with juniper berries, rosemary, lemon, ginger and grapefruit.

This short documentary is the first in a series called Made by Hand, dedicated to exploring independent, artisanal businesses. In an interview below, filmmaker Keith Ehrlich talks about a growing entrepreneurial spirit among young people who, thanks to the recession, "felt like they had nothing to lose by starting up their own thing."

It is a well-made video. I like the fact that people have moved from microbrewing into microdistilling. It is good to see craftsmanship making a comeback in such a fine product as alcoholic beverages.

Chart of the Day

From Stuart Staniford:

The Last Day Of Summer

Sure, the fall equinox was last week, but today is the last day of baseball's regular season.  Therefore, it is the last day to listen to a Reds game until next spring.  Surprisingly enough, the Braves and the Red Sox are trying to clinch wild card spots even though they blew 8.5 and 9 game leads, respectively.  We may get a couple of 1 game playoffs tomorrow to determine who will actually get those spots.  Looking at the playoffs, my heart pulls for Detroit and Milwaukee, along with potential St. Louis and Tampa Bay appearances.  My head tells me that it will probably be Philadelphia, or maybe the Yankees who will come out on top.  I will be pulling for Texas to be eliminated as soon as possible.  I'm holding the Rangers responsible for foisting Rick Perry on the body politic, and I want them to pay for it.

As for the Reds, what can I say.  The season has been a loss.  The playoff appearance last year definitely looks like a fluke.  We'll be stuck wondering what would have happened if Chris Heisey started in leftfield all year.  Dusty Baker doesn't appear to be the seer who guided last year's team to a postseason shellacking by the Phillies.   I'll be stuck buying lunch for Cubs dad, but he'll be able to fill me in on why being a Bengals season ticket holder is a good move (I would assume this has to do with actually getting to watch the games, but I can't see that as a benefit).

The End Of Fish and Chips?

Fast Company:

There may be nothing new under the sun, but beneath the sea is a different story. Scientists studying 28 years of data from the Atlantic Ocean have found that climate change is causing drastic changes in fish populations off the European coast--and that's bad news for cold-loving species like cod, which have fed generations of Northern Europeans.
The North Sea, a cold wind-swept patch of the Atlantic stretching from Scandinavia to the U.K., is warming four times faster than the global average.  During the last 30 years, the roughly 2°F increase in mean annual temperature (the North Sea swings between 63°F and 43°F during the summer and winter) has had a profound influence on fish growth and survival, egg maturation, and the plankton supporting food webs and commercial fisheries.
British scientists analyzed 11 surveys, covering at least a million square kilometers of the European continental shelf, and more than 100 million fish, "to get the 'big picture' of how warming is affecting fish communities," according to Stephen Simpson of the University of Bristol, whose research appears in a recent issue of Current Biology. They found that 72% of common fish species had responded to rising sea temperatures. Most species--three out of four--were growing more abundant, and hake and dab had doubled, while catches of cold-loving species, including haddock and cod, dropped by half.

I love the cod and pollock that are the staples of fish fries.  I would think the crash of Atlantic Cod populations off the Grand Banks would probably doom the traditional fish and chips, but global warming can't help.  I don't think global fish stocks can hold up to the demands of 7 billion people for cheaply mined protein.

In The End, It's Always About The Banks

Martin Feldstein, on why the Germans and French might bailout the Greeks:

Why, then, are political leaders in France and Germany trying so hard to prevent – or, more accurately, to postpone – the inevitable? There are two reasons.
First, the banks and other financial institutions in Germany and France have large exposures to Greek government debt, both directly and through the credit that they have extended to Greek and other eurozone banks. Postponing a default gives the French and German financial institutions time to build up their capital, reduce their exposure to Greek banks by not renewing credit when loans come due, and sell Greek bonds to the European Central Bank.
The second, and more important, reason for the Franco-German struggle to postpone a Greek default is the risk that a Greek default would induce sovereign defaults in other countries and runs on other banking systems, particularly in Spain and Italy. This risk was highlighted by the recent downgrade of Italy’s credit rating by Standard & Poor’s.
A default by either of those large countries would have disastrous implications for the banks and other financial institutions in France and Germany. The European Financial Stability Fund is large enough to cover Greece’s financing needs but not large enough to finance Italy and Spain if they lose access to private markets. So European politicians hope that by showing that even Greece can avoid default, private markets will gain enough confidence in the viability of Italy and Spain to continue lending to their governments at reasonable rates and financing their banks.

Morning Edition did a story on this today.  I have a hard time seeing how the banks always get bailed out.  Why don't the countries protect consumer deposits, let the banks fail, then capitalize new banks.  The implicit guarantee allows the banks to borrow more money cheaper, take bigger risks, then not worry about the possibility of failure.  If stockholders were wiped out, and bondholders took haircuts, or were wiped out too, I bet the banks wouldn't be able to leverage up at 35 times equity, thus they'd be more stable.  Banks will continue to get in trouble, so long as profits are privatized, but losses are socialized.  Let's stop that.

It's The Sales, Stupid

No matter what Republicans say, the biggest complaint from businesses is poor sales (h/t Mark Thoma):

I would guess that if we could strip out the regulations and cut taxes tomorrow, businesses aren't going to hire at all.  Then Republicans would probably claim that if we gave "job creators" a pony and a back rub, they'd start hiring.  I think it is funny that businessmen were complaining the most about taxes and regulation back during the Clinton presidency when they were actually hiring people.

When it comes to helping create jobs, Republicans got nothing.  We're in a damn recession, and they claim tax cuts for wealthy people will help things out.  That is such a load of shit, I don't know what to say.  As for regulations, all the corporations who have invested billions in pollution controls are going to be pretty pissed off if you scrap the regulations that required them to install the controls.  Talk about creating uncertainty, the Republicans are telling businesses that they'll get rid of the EPA.  If businessmen were to take them at their word, and wait to build new facilities until they get rid of the regulations, they'll never build, because Republicans will never be able turn back the clock to 1970.  Until the Republican party starts acting like adults, they should never receive a single vote.

Toronto: North America's Worst Sports Town

That's according to ESPN:The Magazine.  Stephen Marche explains how painful it is to be a Toronto sports fan, especially a Leafs fan:

 The Leafs, who matter to Torontonians more than all the other teams combined, have not won the Stanley Cup since 1967, and they haven't made the playoffs in a franchise-record six seasons. The only team with a longer dry spell is the Florida Panthers. The Leafs' major source of hope seems to be Brian Burke himself, but when the major source of your dreams is a front-office guy, you are in a dark place. Cheering a GM, to me, is hitting rock bottom. And this in Canada's biggest city, where hockey matters more than baseball in Boston or basketball in Indiana or football in Texas. The only other places where sports dwell so near the most profound and abiding national questions are rugby in New Zealand, which recoups the warrior culture of the Maori, and football in Buenos Aires, where the slumdog Boca Juniors battle the uptown Millonarios in a never-ending class war. Maybe Real Madrid against Barcelona could be added to that list, but nobody else. People who were surprised that Vancouver burned after the Stanley Cup playoffs last year are unaware of the history of the sport in Canada. Of the 10 biggest riots in Canadian history, six began at hockey games.
During the 2010 Olympics, more than 80 percent of the country watched the men's hockey finals. Our current Prime Minister, Stephen Harper, is legitimately an expert on the history of the game; the only reason he hasn't finished his book on the early days of the NHL is that he's been busy running the country. The history of the game and the history of the country are much the same thing: You can trace the rise of Quebec separatism, for example, to the Rocket Richard riots in 1955. On the other hand, hockey is the one mass-media phenomenon for which English and French Canadian have the same stars — not true of any other form of entertainment. Immigrants join hockey as fans and players as soon as they join the Canadian middle class. More than a hundred thousand people watch Hockey Night in Canada broadcast in Punjabi.

That sums up the significance of hockey in Canada.  In my one trip to Toronto, I managed to spend several hours at one local establishment, drinking my way through Canadian beers I had never seen before.  What entertained me the most, other than giving an anti-royalist a hard time about the Queen, was listening to several guys reflect on the 1992-1993 Toronto Blue Jays.  They listed nearly the entire roster, as they reminisced.  As they rattled off names, I kept thinking how I'd forgotten about all those guys.  These folks didn't.  They remembered them like yesterday, and considering how bad the Blue Jays have been since, I was impressed how they still followed the team.  I can't believe how bad the Leafs have been though.  That has to depress the hell out of the population of Ontario.

A Blue Law May Fall

Georgia is considering Sunday liquor sales:

A regular beat in the rhythm of Georgia life: The Sunday trip to the grocery store, when families, freshly sprung from the pews, pack the aisles in their church finery and when the beer aisle is always immaculate, refrigerated -- and desolate, due to a ban on Sunday alcohol sales. That last part may soon change throughout much of the state after Nov. 8, when residents in 101 cities and counties will have a chance to vote on lifting the ban, the Morris News service reports. Among them is Atlanta, the state capital, where Mayor Kasim Reed signed a measure approving a citywide vote on the issue last month.
It's not clear that every community will choose to loosen the Bible Belt a notch, but the fact that the matter is even on the ballot marks a victory for grocery stores, liquor distributors and their lobbyists over groups like the Georgia Baptist Convention.
New state legislation was required to allow the matter to go before voters. But for five years, religious groups, as well as the religious sentiment of legislators, kept such measures bottled up in the Georgia statehouse.

I should note that Ohio doesn't have Sunday hard alcohol package liquor sales.  The article does mention that Georgia cities allow the sale of alcohol in restaurants and bars on Sunday, but the fact that the Georgia Baptist Convention can prevent sales of beer at grocery stores on Sunday up until 2011 is a reason I wouldn't live in the south.

U.S. Capitol For A Day

Lancaster, Pennsylvania, September 27, 1777:

By September 1777 the British were again approaching Philadelphia and threatening the safety, of the Congress. On September 14 the Congress resolved that if it "shall be obliged to remove from Philadelphia, Lancaster shall be the place at which they shall meet." ²⁰ 20. Journals, VIII, 742. Further pressure by the British finally forced the Congress to leave Philadelphia on September 18. ²¹ 21. Ibid., p. 754. Tо avoid the enemy, the delegates took a round-about way to Lancaster, generally arriving there September 26. ²² 22. Fortenbaugh, op. cit., p. 33. Court House, Lancaster
Congress held only one session in Lancaster, on September 27, 1777, in the Court House. ²³ 23. Most authorities assert that the meeting place was at the Court House; however, the documentary evidence is not conclusive on this point. The record of this session indicates that all of the business conducted on that day in Lancaster related to military matters. ²⁴ 24. Journals, VIII, 755. At the end of the day, Congress resolved to adjourn to York, across the Susquehanna River, "there to meet on Tuesday next, at 10 o'clock." ²⁵ 25. Ibid.

DC By Day

Via The Dish, a Joe Lertola Illustration of Washington D.C. population by time of day:

The Sunbelt Is Struggling

NYT, via nc links:

The once-booming South, which entered the recession with the lowest unemployment rate in the nation, is now struggling with some of the highest rates, recent data from the Bureau of Labor Statistics show.
Several Southern states — including South Carolina, whose 11.1 percent unemployment rate is the fourth highest in the nation — have higher unemployment rates than they did a year ago. Unemployment in the South is now higher than it is in the Northeast and the Midwest, which include Rust Belt states that were struggling even before the recession.
For decades, the nation’s economic landscape consisted of a prospering Sun Belt and a struggling Rust Belt. Since the recession hit, though, that is no longer the case. Unemployment remains high across much of the country — the national rate is 9.1 percent — but the regions have recovered at different speeds.

I would guess the downturn in construction has had trickle-down effects on the rest of the economy down south, along with state and local government cuts.  I've never bought into the claim that the rest of the country should be more like the south, but it seems to be the direction the Republican party wants to take us.  I'd like to believe that all regions of the country will start to recover, but I just can't do it.

NCAA Hockey Preseason Rankings

Notre Dame squeaks in ahead of Miami as #1 in the USCHO.com poll:

Seven teams received first-place votes in Monday’s USCHO.com Division I Men’s Poll, but Notre Dame tallied the most votes and starts the season ranked No. 1 in the nation.
Notre Dame earned 11 No. 1 votes, while No. 2 Miami registered 12 first-place votes.
North Dakota finished third and had five first-place votes, Denver comes in at No. 4, while Boston College, with two No. 1 votes, starts the year at No. 5.
Michigan garnered the sixth spot, Colorado College gets No. 7, defending national champion Minnesota-Duluth sits in the eighth rank with 10 first-place votes, Yale took one first-place vote and is No. 9 and Boston University rounds out the top 10 with two first-place nods from the voters.

I hadn't been paying attention to much hockey news.  I didn't see the Big Ten is forming a hockey conference, as the CCHA disintegrates.  That'll change the hockey landscape.

I, For One, Welcome Our New Female Overlords

Via Yglesias, Kay Steiger presents this chart:

The gender gap in higher education has been noted for a while, but as Yglesias notes, the huge increase in engineering and science PhDs is significant.  At some point, society will give men a good kick in the ass, causing the trend to balance out some, but until then, I think it will continue, until women are earning more than half of the doctorates in science and engineering, also.  This is a development which I suspect will make my friend the Professor uncomfortable.  I used to accuse him of misogyny because his 30+ disc CD collection contained exactly 0 female singers.  I doubt that he'll like female faculty cramping his style.

Counties Coming After Recording Fees

Ritholtz:

In all of the market mayhem of last week, this article may have slipped by unnoticed: Merscorp, Bank of America Sued by Dallas District Attorney.
We’ve discussed Mortgage Electronic Registration Systems (aka MERS) repeatedly over the years, including its quasi-legal standing and how it illegally failed to pay lawful recording fees to states and counties. (Back in March ’11, we discussed that County & State Litigation vs MERS was coming soon).
The Dallas DA action may be the largest major City/County litigation versus MERS. This may break open the flood gates for other such suits by counties and states around the country.
The politics of this are quite fascinating: The bankers may own the corrupt US Congress, and they may have intimidated or bought off many of the more cowardly State Attorneys General, but there simply are too many counties and District Attorneys representing local interests throughout the country to all be bought off. Buying/intimidating/controlling all of the local country District Attorneys may be like herding cats — nearly impossible.
I am going to stand by my original prediction: The early litigants may get something, but the latter lawsuits will likely result in bankrupting MERS.

This is going to be really intriguing.  The banks managed to avoid recording fees by creating MERS, but they were in such a hurry to shovel the shitty mortgages out the door that they didn't properly keep traceable records within MERS.  Now they can't show clear title to properties, and they are being sued by a county who wants its recording fees.  Back in the 2001-2003 recession, counties were jacking up their recording fees to make up for tax revenue losses, just as the housing bubble and refinancing booms were kicking off.  As Barry notes, the first couple counties will win, then MERS will file bankrupcy.  I think in the end, either the counties or the investors in MBS securities will sue the banks into bankruptcy.  I think enough evidence will end up leaking out via whistleblowers that the banks will be charged with fraud.  The big 4 banks were so deep into this mortgage mess that they definitely did some really crooked stuff, and somebody who didn't want to be labelled a "rogue" loan agent or something, will have kept documentation for personal protection.  The walls will eventually fall down, the question is, will it be in the courts or in the coming double dip?

Butter vs. Margarine, A History

Here (via the Dish):

Grass fed cows tend to produce milk that, when made into butter, has a slightly yellow color.  When margarine was invented as a butter substitute and they began producing it for U.S. consumption in the late 1880s, one marketing problem was its color.  The vegetable-based product has a clear, white-ish color and looks something like lard; many people found it unappetizing.  So the margarine people wanted to dye margarine yellow.
The dairy industry rightly saw margarine as a threat and they lobbied politicians both to outright ban margarine or to ban dying it to look like butter.  The federal government imposed a two cent per pound tax on the product in The Margarine Act of 1886 (the tax was quintupled in 1902).  Many states, especially dairy states, made dying margarine illegal (e.g., New York, New Jersey, and Maryland).  By 1902, “32 states and 80% of the U.S. population lived under margarine color bans.”

The ad below is for “Golden Yellow” margarine and specifies that it is “ready to spread” in 26 states (more text transcribed below):

This came up because Wisconsin is looking at removing the ban on public places serving margarine, unless specifically requested.  This is an issue, which highlights the power of lobbying groups, inertia and the complications associated with federalism.  How much did butter cost in 1902 if the tax on margarine was 10 cents a pound?  That is fascinating.

The Grid vs. The Cul-de-sac

Emily Badger attacks cul-de-sacs:

There would be no such thing as noisy and menacing through traffic because no one else had any reason to drive through. The traditional street grid, with its busy intersections and jumble of apartments, shops and restaurants, was out.
“It was addressing real problems, but it went overboard,” Garrick says of the suburban model. “It took real problems and then made caricatures for solutions.”
The Federal Housing Authority embraced the cul-de-sac and published technical bulletins in the 1930s that painted the urban street grid as monotonous, unsafe, and characterless. Government pamphlets literally showed illustrations of the two neighborhood designs with the words “bad” and “good” printed alongside them.
The FHA had a hand in developing tens of millions of new properties and mortgages, and its idiosyncratic design preferences evolved into regulation. From the 1950s until the late 1980s, there were almost no new housing developments in the U.S. built on a simple grid.

I always preferred the grid, but my opinion doesn't carry much weight, as this blog indicates.  I enjoy looking at aerial photographs of towns in this area, where you can follow the history of development by lot size and street curviness.  Pretty much every subdivision we designed when I was working looked like the right hand picture.  I hated that.  As the article mentions, we designed for cars.  That will bite us in the ass in the future.

Another Knuckleballer Update

Yesterday, R.A. Dickey was awesome, giving up 1 run and 3 hits in 7 innings.  He didn't get the win, but the Mets won.  Today, Tim Wakefield took the loss, as the Red Sox struggled in the first game of a doubleheader against the Yankees.

A Noble Approach

The New York Times looks at family-owned Marvin Windows no layoff policy (via nc links):

THREE THINGS matter big in this flyspeck city just south of the Canadian border: hockey, walleye and Marvin.
Not necessarily in that order. Yes, Warroad, nicknamed “Hockeytown, U.S.A.,” has sent six of its sons to the N.H.L. And the walleye plucked from Lake of the Woods are served for breakfast, lunch and dinner down at the Lakeview Restaurant.
But Marvin — as in, Marvin Windows and Doors — is the commercial engine in these parts and has been since George G. Marvin arrived in 1904. So when times get tough at Marvin, as they are now, the 1,700 or so residents of Warroad hold their collective breath.
But in this season of economic unease, when neither Washington nor Wall Street seems to have the answers, the descendants of George Marvin are going against the grain. Unlike so many other companies, Marvin Windows has neither laid off workers nor reduced health insurance benefits. And, its executives vow, it won’t.
Marvin Windows might seem like a footnote in the nation’s economic ledger. It employs roughly 4,300 people, about 2,000 of them here, and has annual sales somewhere from $500 million to $1 billion. But what this company is doing — and, more to the point, what it is not doing — is worth knowing.

You should read the whole story.  If you are looking for windows, you might price them from Marvin.  It is a noble goal to avoid layoffs, especially at the cost of corporate profits.  You have to wonder if the 32 hour weeks will wear thin with the workers, who need more to get by.  With the North Dakota oil fields booming, they may lose quite a few people.  It's a tough business call to make, but the family seems to be going about it with the best intentions.  I wish them well, but I'm afraid the window market, like the rest of the economy, won't get better anytime soon.

Marriner Eccles On Saving Capitalism

London Banker gives excerpts of Marriner Eccles' testimony in Congress in 1933, prior to being invited by FDR to help draft legislation to address the financial industry in the Great Depression (h/t naked capitalism)  The portion receiving the most attention:

Such measures as I have proposed may frighten those of our people who possess wealth. However, they should feel reassured in reflecting upon the following quotation from one of our leading economists:

It is utterly impossible, as this country has demonstrated again and again, for the rich to save as much as they have been trying to save, and save anything that is worth saving. They can save idle factories and useless railroad coaches; they can save empty office buildings and closed banks; they can save paper evidences of foreign loans; but as a class they can not save anything that is worth saving, above and beyond the amount that is made profitable by the increase of consumer buying. It is for the interests of the well to do – to protect them from the results of their own folly – that we should take from them a sufficient amount of their surplus to enable consumers to consume and business to operate at a profit. This is not “soaking the rich”; it is saving the rich. Incidentally, it is the only way to assure them the serenity and security which they do not have at the present moment.

I think this gets directly at our current situation.  Individuals making rational choices on their own are doing what is right for themselves, but, combined, are making the problems worse, and hurting themselves.  We will need those with the most to give something up, to save themselves, and everyone else.  This will require true public servants, who put the interests of the country ahead of their own political prospects and ideologies.  So far, I have yet to see them on the scene.  Could it be that we are already too far down the line of politcal corruption by business interests to see such people rise to the top?  I hope not, but looking at the candidates for president (including the current president) I'm not so sure.

The Mets And Madoff

The NYT looks into the business interests of Fred Wilpon and Saul Katz through the Madoff Trustee's lawsuit against them (via the Big Picture):

The trustee representing the victims of the Bernard L. Madoff fraud, Irving H. Picard, has changed that. His attempt to win $1 billion from Wilpon and Katz — whether it bankrupts them or they prevail in court and keep the Mets a family legacy — has revealed much about the histories and personalities of the team’s owners, and how they made and managed their money.
The empire of this inseparable tandem, it is now clear, stretched well beyond real estate.
Sterling Equities, their family-run company, invested millions in things as varied as biotechnology and renewable energy, including a project that turns animal waste into fuel.
Wilpon and Katz, his brother-in-law, also own a chunk of a hedge fund that manages billions of dollars, and in recent years they held their enterprise out to the public as an expert investment operation.
And in one of the more striking revelations to come to light, it was disclosed that Wilpon and Katz, who fought long and hard to make the Mets an exclusive holding of their family, once offered a piece of the team to Madoff.

This is an interesting investigation, but it makes me a little squeamish.  These guys were close to Madoff, but did they actually know it was a scam?  They leased offices to Madoff in one of their developments.  They were heavily invested with him.  Did they suspect him?  We don't know.  I can understand that if they cashed out money from the Madoff "investments," that is pretty fair game.  It just seems like a very challenging thing to sort out in this case, and it is one with a billion dollars on the line.

The Story of Rogue Traders

Ritholtz fleshes out the Taibbi case that rogue trader is a cover phrase to provide fall guys for poor bank management:

As history teaches us, there are no rogue traders; there are only rogue banks.
Here’s a news flash: If you issue credit, your working assumption must be that there are unqualified people who will try to borrow money from you. It is the job of every lending facility each and every day to separate the qualified borrower who has the capacity to service that debt from the unqualified borrowers who do not. This is why there is no such thing as a predatory borrower — banks must assume that all borrowers are predatory and protect themselves. This is why lenders — at least before 2002 – inquire about income, employment history, credit scores, other debt, etc., before making a mortgage loan.
Similarly, if your business involves the use of leveraged capital for speculation by your employees, then it is your job to know which, if any, of your people are not competent. It’s a simple mathematical fact that some of your traders will take losses; in some cases, enormous but manageable losses. Your job is to identify these people and move them to other professions.

It is a good point, management is responsible for keeping its employees under control.  Maybe they ought to look at their business plan along with their compensation plan, to try to figure out ways to prevent bad trades from becoming coverups which threaten to destroy the bank.  Will that happen, no.

To Honor And Serve Wins Pennsylvania Derby

He also set a stakes record:

To Honor and Serve was expected to be one of the top 3-year-olds of 2011 when the season started. It took him more than nine months, but the Bernardini colt has finally lived up to that billing.
With Jose Lezcano aboard, To Honor and Serve made a sweeping move past pacesetter Rush Now at the three-sixteenths pole and cruised to a dominating 2 1/4-length victory in the Grade 2, $1 million Pennsylvania Derby Sept. 24 at Parx Racing. It was the first stakes win for the chestnut colt since he bagged the Nashua and Remsen consecutively last fall at Aqueduct.
Sent off as the 8-5 favorite, To Honor and Serve easily held off a belated rally by Belmont Stakes winner Ruler On Ice, who was 3 1/2 lengths in front of third-place Rattlesnake Bridge. The final time for nine furlongs on the fast dirt track was 1:47.34, which was a new stakes record and not far off the track record set in 1974 by Selari Sprint.

Also, Future Prospect won the WinStar Kentucky Cup at Turfway Park.

Division III Roundup

On the big stage, Notre Dame managed to squeak by, Michigan remained undefeated and Ohio State won easily.  On the smaller stage:

#2 Mount Union pummelled Wilmington, 66-7
#3 St. Thomas beat Concordia-Moorhead, 48-30
#8 Thomas More held on against Washington and Jefferson, 35-32
Muskingum upset #9 Ohio Northern, 27-7
Mt. St. Joseph beat Bluffton, 28-17
Augsburg beat St. John's, 32-31
John Carroll won at Marietta, 37-35
and Maine Maritime, featured here, won easily against Fitchburg State, 40-7.

The rest of the scores are here.