Hybrid Blog

Traffic school has it’s purpose, but when the information provided is faulty and the financial profits are from instilling doubt, it becomes absurd.

In my next article I’ll list some things that traffic school should teach.

Price deflation is turning up in interesting places. Please consider Tickets To See Bill Clinton Slashed To $5.

A much-hyped appearance by a certain charismatic former U.S. President is receiving a cool reception in the city.

After two weeks of sluggish ticket sales to hear Bill Clinton speak, the Canadian National Exhibition has slashed prices from $20 to five dollars plus admission.

Organizers were hoping to fill the 25,000-seat BMO Field, but to-date have only sold 7,000.

Can someone please explain how promoting Bill Clinton in Canada was supposed to stimulate anything other than Pepto-Bismol sales and the pocketbooks of the organizers?

I suppose not. At least it’s not as destructive as cash for clunkers. Then again maybe this is Canada’s version of cash for clunkers.

Thoughts on the Canadian Housing Bubble

In response to Mish Videos – On the Edge with Max Keiser when I mentioned the Canadian housing bubble, I received numerous emails from people telling me that Canadian banks were in better shape than the US, that lending standards on houses were tighter, and how commodities would support home prices.

Perhaps banks are in better shape but that does not mean they are in good shape. But the real reason we can say Canadian housing is in a bubble is the same reason the US was in an identifiable bubble:

Home prices are standard deviations above rental prices and wages. That may not be true of every city Canada (it was not true in places like Danville, Illinois either), but judging from housing prices in Toronto, Vancouver, etc, it is crystal clear Canada is in trouble.

I cannot quantify exactly how many standard deviations above norm the major Canadian cities are, but a look at home prices and acceleration in appreciation is telling in and of itself. In the US, homes prices to wages and rent were a whopping 3.5 standard deviations from the norm at the peak.

Canadian home prices are a bubble waiting to pop. When the bubble does pop, it will take as long to fix as in the US, 6-8 years minimum, perhaps way longer, depending on how big the bubbles got in each location and the speed of the declines.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Here is an entertaining video by Tim Hawkins called “The Government Can”

If you need an entertaining look on how the country is going to hell in a hand basket, that’s the one. It’s sure to make you laugh, although what he talks about in reality is no laughing matter.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

GM has handicapped the new Chevrolet Camaro SS with the optional automatic transmission with 26 less horsepower than the six speed manual version. This is an unusual decision in this day and age. The automatic has come a long way, why penalize a halo muscle car that is making its return after a seven year absence?

The Camaro SS automatic is rated at 400hp and its engine is called the L99 vs. the manual called the LS3. The LS3 is also in the Corvette and the Pontiac G8 GXP. The L99 has an Active Fuel Management System that shuts off cylinders when power demand is minimal. However it also redlines 600rpm lower than the manual and is EPA rated at 25mpg vs. the manual’s 24mpg. http://www.autoblog.com/2009/03/16/2010-chevrolet-camaro-rated-at-29-mpg-highway/ Granted it is an impressive switch since automatics are almost always rated lower. But the appeal of this car is horsepower. Would buyers of $32k muscle car coupes really care that their automatics get slightly worse mileage than their manual counterparts? No.

“Autotragic” is a moniker for cars with an automatic transmission for several reasons, past and present. Reasons included power loss due to the indirect connection to the engine, sluggish shifting, less gears and in the past, even a lesser horsepower rating than the “stick shift” counterparts. Of course consistency on the dragstrip is an advantage, but it is unsuitable for road circuit racing. Slushbox is another nickname for the automatic tranny…

Even in the nineties, the automatic transmission wasn’t exactly a big performance penalty and cars like the Corvette and Camaro. While slower than their manual counterparts, they still had good performance figures. The Toyota Supra twin turbo was also considered a strong performer with what was considered one of the stoutest automatic transmissions on the market.

Today automatics have up to 8 forward gears (Lexus) and the power loss gap has closed from decades past with lock-up torque converters among other advances. Mercedes has only offered an automatic for years in their cars. From the early 350hp or, non-supercharged E55 to the 670hp twin turbocharged V-12 SL65 AMG Black Series http://www.mercedes-amg.com/webspecial/sl65blackseries/ These cars are fully respected and have a lot of credibility on the street and even on the dragstrip.

Another oddity about the Camaro horsepower downgrade is its corporate siblings the Corvette and Pontiac G8 GXP both share the same engine but the automatic version has the same horsepower rating. The reason most likely has to due with the technology and hardware for the cylinder deactivation. It sure isn’t due to reliability, the G8 and Corvette frame the Camaro in horsepower and weight, and this transmission isn’t on the hairy edge longevity. That would be a disaster. Years of Corvette drag racing seem to support this. Currently the “fast list” is on page 205. Look at all the automatics (”A6″ means automatic in the list) http://forums.corvetteforum.com/c6-tech-performance/1893326-c6-1-4-mile-performance-challenge-205.html

What owners of $32k muscle car coupes with a modern paddle-shifted automatics do care about is horsepower. Penalizing the automatic is a mistake. Put the technology in trucks and SUVs if it works in those heavier vehicles, or develop it to equal the manual in horsepower output. But when it comes to the best “bang for the buck” on the market today, don’t create the need for an asterik for years to come when potential buyers and owners consider the Camaro SS.

On Friday, I stated Barney Frank Says Ron Paul’s Audit The Fed Bill Will Pass In October.

Quite a few others made the same mistake as noted by RonPaul.Com in Misinformation Alert: Barney Frank Never Said That HR 1207 Will Pass In October.

Several blogs and forums reported during the past 24 hours that Chairman of the House Financial Services Committee, Barney Frank, said that Ron Paul’s bill to audit the Federal Reserve, HR 1207, will pass in October.

Incorrect Reports about Barney Frank’s Statement on HR 1207

* Washington Times: Barney Frank says Ron Paul bill will pass
* Politico: Barney: Fed audit bill will pass in October
* Business Insider: Barney Frank: Yes, We Will Pass Ron Paul’s “Audit The Fed” Bill
* United Liberty: Frank: Vote on HR 1207 in October
* Daily Paul: Video: Barney Frank Says House Will Pass HR1207 in October
* ZeroHedge: Barney Frank Says The House Will Pass HR 1207 In October
* Mish: Barney Frank Says Ron Paul’s Audit The Fed Bill Will Pass In October
* Washington Independent: Ron Paul’s ‘Audit the Fed’ Bill to Get October Vote?

RonPaul.Com notes a key sentence was missing from the end of the transcript. Indeed there was.

The sentence, “That will be part of the overall federal regulation that we are redacting,” is for some reason missing from the widely distributed transcript, and has therefore been completely ignored by bloggers and commentators.

The article attributed the error to the Washington Times.

The incorrect transcription was mine, not the Washington Times’. I transcribed that on the road, in a quite noisy place and Barney Frank mumbles.

There were many sentences I played over and over and over attempting to understand his mumbling. I easily spent 30 minutes playing and replaying a 3-minute video. I could not make out that second to last sentence, at least the last word “redacting”. Moreover, I am not the only one who could not figure out “redacting” either.

Calculated Risk missed it as well (now corrected on his blog). However, I should have handled it the way Calculated Risk did initially: Put in the sentence leaving out unintelligible words and placing an interpretation or [unintelligible] in brackets. I was concentrating so much on figuring out the word, that I missed the context of the sentence. At any rate, that is how the sentence was dropped.

The concern now is that Barney Frank intends to put together some legislation, possibly containing dramatically watered down or altered language from Ron Paul’s legislation.

In theory “the overall federal regulation” of which Barney Frank speaks could contain everything in Ron Paul’s bill. However, many are fearful of something watered down, and rightfully so.

Amanda Carpenter at The Washington Times (see Barney Frank says Ron Paul bill will pass) is guilty of lifting my transcript, word for word including several typos such as “power to go consumer protection” which should read “power to do consumer protection”. I also said, “Federal Reserve buys itself” which should have been “Federal Reserve buys and sells”.

Carpenter said “Below is a complete transcript of Mr. Frank’s remarks concerning the bill.” That is clearly a falsehood.

Opportunity Knocks

Whether or not you are in Barney Franks district, please call Barney Frank at

DC Phone: 202-225-5931
DC Fax: 202-225-0182

In your own words ….

Tell Barney Frank you heard his latest Town Hall video and you are not interested in some watered down version of Ron Paul’s HR 1207 legislation. Mention that you want HR 1207 passed as is, stand-alone.

Whether Frank is your Rep or not, please call Barney Frank today. Then call again tomorrow and for good measure once later in the week.

Put the pressure on. Opportunity is knocking.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

On Friday, I stated Barney Frank Says Ron Paul’s Audit The Fed Bill Will Pass In October.

Quite a few others made the same mistake as noted by RonPaul.Com in Misinformation Alert: Barney Frank Never Said That HR 1207 Will Pass In October.

Several blogs and forums reported during the past 24 hours that Chairman of the House Financial Services Committee, Barney Frank, said that Ron Paul’s bill to audit the Federal Reserve, HR 1207, will pass in October.

Incorrect Reports about Barney Frank’s Statement on HR 1207

* Washington Times: Barney Frank says Ron Paul bill will pass
* Politico: Barney: Fed audit bill will pass in October
* Business Insider: Barney Frank: Yes, We Will Pass Ron Paul’s “Audit The Fed” Bill
* United Liberty: Frank: Vote on HR 1207 in October
* Daily Paul: Video: Barney Frank Says House Will Pass HR1207 in October
* ZeroHedge: Barney Frank Says The House Will Pass HR 1207 In October
* Mish: Barney Frank Says Ron Paul’s Audit The Fed Bill Will Pass In October
* Washington Independent: Ron Paul’s ‘Audit the Fed’ Bill to Get October Vote?

RonPaul.Com notes a key sentence was missing from the end of the transcript. Indeed there was.

The sentence, “That will be part of the overall federal regulation that we are redacting,” is for some reason missing from the widely distributed transcript, and has therefore been completely ignored by bloggers and commentators.

The article attributed the error to the Washington Times.

The incorrect transcription was mine, not the Washington Times’. I transcribed that on the road, in a quite noisy place and Barney Frank mumbles.

There were many sentences I played over and over and over attempting to understand his mumbling. I easily spent 30 minutes playing and replaying a 3-minute video. I could not make out that second to last sentence, at least the last word “redacting”. Moreover, I am not the only one who could not figure out “redacting” either.

Calculated Risk missed it as well (now corrected on his blog). However, I should have handled it the way Calculated Risk did initially: Put in the sentence leaving out unintelligible words and placing an interpretation or [unintelligible] in brackets. I was concentrating so much on figuring out the word, that I missed the context of the sentence. At any rate, that is how the sentence was dropped.

The concern now is that Barney Frank intends to put together some legislation, possibly containing dramatically watered down or altered language from Ron Paul’s legislation.

In theory “the overall federal regulation” of which Barney Frank speaks could contain everything in Ron Paul’s bill. However, many are fearful of something watered down, and rightfully so.

Amanda Carpenter at The Washington Times (see Barney Frank says Ron Paul bill will pass) is guilty of lifting my transcript, word for word including several typos such as “power to go consumer protection” which should read “power to do consumer protection”. I also said, “Federal Reserve buys itself” which should have been “Federal Reserve buys and sells”.

Carpenter said “Below is a complete transcript of Mr. Frank’s remarks concerning the bill.” That is clearly a falsehood.

Opportunity Knocks

Whether or not you are in Barney Franks district, please call Barney Frank at

DC Phone: 202-225-5931
DC Fax: 202-225-0182

In your own words ….

Tell Barney Frank you heard his latest Town Hall video and you are not interested in some watered down version of Ron Paul’s HR 1207 legislation. Mention that you want HR 1207 passed as is, stand-alone.

Whether Frank is your Rep or not, please call Barney Frank today. Then call again tomorrow and for good measure once later in the week.

Put the pressure on. Opportunity is knocking.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Occasionally, even the most hopeless of politicians get something right. Here is stunning proof:

Barney Frank:

I have been pushing for more openness from the Fed. I want to restrict the powers of the Federal Reserve. First of all, the Fed will be the major losers of power if we are successful, as I believe we will be, setting up a financial product protection commission.

The Federal Reserve is now charged with protecting consumers. They were supposed to do subprime mortgage restrictions.

Congress in 1994 gave the Fed powers to ban subprime mortgages. Alan Greenspan refused to do it. They had the power to ban credit card abuses. Under Greenspan they did nothing. Under Bernanke they started but only after Congress acted.

That’s one of the reasons why in the new consumer protection agency, we will take away from the Federal reserve the power to go consumer protection.

Secondly, they have has since 1932 a right under Herbert Hoover to intervene in the economy whenever they could. Last September, the Federal Reserve they were going to advance $82 billion to AIG.

I was kind of surprised and said Mr Bernanke do you have $82 billion? Mr. Bernanke replied I have $800 billion and under section 13.3 of the Federal Reserve Act they can lend anything they want.

We are going to curtail that lending power. We are going to put some restrictions on it.

Finally we will subject them to a complete audit. I have been working with Ron Paul, who is the main sponsor of that bill. He agrees that we don’t want to have the audit appear as if influences monetary policy as that would be inflationary.

One of the things the audit will show you is what the Federal Reserve buys itself. And that will be made public, but not instantly because if it was made instantly people would be trading off it, so the data would be released after a time period of several months, enough time so it will not be market sensitive.

This will probably pass in October.

This is clearly not perfect. However, it is a step in the right direction. The only reason it it may happen is people are overwhelmingly in support of it. Change is possible, over time, at least occasionally, if public opinion is solidly behind something.

If you have not yet done so, or even if you have (please do it again) Speak Out – Audit the Fed, Then End It!

Important Addendum:

Barney Frank did not quite say that “HR 1207 Will Pass In October”. A key sentence was missing.

Please see What Barney Frank Really Said About Ron Paul’s HR1207 for complete details.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Occasionally, even the most hopeless of politicians get something right. Here is stunning proof:

Barney Frank:

I have been pushing for more openness from the Fed. I want to restrict the powers of the Federal Reserve. First of all, the Fed will be the major losers of power if we are successful, as I believe we will be, setting up a financial product protection commission.

The Federal Reserve is now charged with protecting consumers. They were supposed to do subprime mortgage restrictions.

Congress in 1994 gave the Fed powers to ban subprime mortgages. Alan Greenspan refused to do it. They had the power to ban credit card abuses. Under Greenspan they did nothing. Under Bernanke they started but only after Congress acted.

That’s one of the reasons why in the new consumer protection agency, we will take away from the Federal reserve the power to go consumer protection.

Secondly, they have has since 1932 a right under Herbert Hoover to intervene in the economy whenever they could. Last September, the Federal Reserve they were going to advance $82 billion to AIG.

I was kind of surprised and said Mr Bernanke do you have $82 billion? Mr. Bernanke replied I have $800 billion and under section 13.3 of the Federal Reserve Act they can lend anything they want.

We are going to curtail that lending power. We are going to put some restrictions on it.

Finally we will subject them to a complete audit. I have been working with Ron Paul, who is the main sponsor of that bill. He agrees that we don’t want to have the audit appear as if influences monetary policy as that would be inflationary.

One of the things the audit will show you is what the Federal Reserve buys itself. And that will be made public, but not instantly because if it was made instantly people would be trading off it, so the data would be released after a time period of several months, enough time so it will not be market sensitive.

This will probably pass in October.

This is clearly not perfect. However, it is a step in the right direction. The only reason it it may happen is people are overwhelmingly in support of it. Change is possible, over time, at least occasionally, if public opinion is solidly behind something.

If you have not yet done so, or even if you have (please do it again) Speak Out – Audit the Fed, Then End It!

Important Addendum:

Barney Frank did not quite say that “HR 1207 Will Pass In October”. A key sentence was missing.

Please see What Barney Frank Really Said About Ron Paul’s HR1207 for complete details.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I needed a rental car for a couple of days, and the only car available at my local Enterprise store was a red 2008 or 2009 Impala.

The Chevrolet Impala is a perfect example of why GM nearly went under, and how the Chevrolet brand was adrift without a clear identity. It is a mediocre car, with some very annoying details. It doesn’t inspire passion, it isn’t a car I would choose to buy. It is a rental fleet queen.

Good Points:

• Quiet, smooth, 3.5L V6 with variable valve timing.
• Clean, if boring, styling.
• Flex-Fuel (E85) capable.
• Unoffensive transmission behavior.
• Decent fuel economy for a larger car (I got 25mpg average on gasoline)
• Huge trunk

I needed a rental car for a couple of days, and the only car available at my local Enterprise store was a red 2008 or 2009 Impala.

The Chevrolet Impala is a perfect example of why GM nearly went under, and how the Chevrolet brand was adrift without a clear identity. It is a mediocre car, with some very annoying details. It doesn’t inspire passion, it isn’t a car I would choose to buy. It is a rental fleet queen.

Good Points:

• Quiet, smooth, 3.5L V6 with variable valve timing.
• Clean, if boring, styling.
• Flex-Fuel (E85) capable.
• Unoffensive transmission behavior.
• Decent fuel economy for a larger car (I got 25mpg average on gasoline)
• Huge trunk