Uncle Jay Explains the News!

You Will Visit Agnesy

I feel guilt in that there are many people who link to me and I do not have the time (nor the programming expertise) to link to them (to create a blogroll I mean).

Regardless, I try to make the occasional post to highlight those that are kind enough to link to me here at Cappy Cap and one of those is good ol' Agnes.

I don't know much about her, which I regret, because if it weren't for having to make a living and pay the bills, I would genuinely like to just hang out on the internet and meet people of similar interests.

Alas, the compulsion to contribute to GDP is a relentless call and one that I must obey.

But in the meantime, visit Agnes because she seems a sweet kid out in Kuala Lumpur (sorry, originally thought she was in Singapore) and that is a country (Malaysia) that seems to have it's shit together more so than any American/western nation does.

(Sorry, just trying to digest a $1 trillion DEFICIT (not debt, freaking one year deficit) because of the stupid moronic, lazy, slothful POS neo-Americans that infect (yes, I do mean that in the viral sense) America)

American Financial Sub Prime Dead Beats Cost More than the War on Terror

I said it before, I said it in my book, and by God, I'll say it again;

The sub prime degenerate scumbuckets of America caused more damage and have cost more than the terrorist attacks and subsequent war on terror;


Sorry to bring this horrible truth to light.

Percent of Millionaires that Have Lost Money

Seems like all of them;



And though I am a capitalist, as I've realized more and more just what an unacceptably high percentage of them didn't earn it and achieved such wealth through nepotism and cronyism instead of skill and game, I will take joy in their misery.

Obama-ese Translated

The major makes it easier for those of us who speak, blunt, direct, English.

"Signs" of the Recession

Ax l's Bo fire

U imate Ele tr nics

Abb 's

These are just a few of the sign's I've seen whilst driving through the Twin Cities at night where a light has gone out in one or more of the letters that are prominently displayed on the store's front or sign.

And while I have seen burnt out lights in the past before, never have I seen it to this extent.

I theorize it is a sign of harsh economic times and makes me wish that a more longitudinal record of "burnt out sign lights" had been recorded so as to be used as a metric to measure the severity and harshness of a recession.

Anybody else noticing this?

Israel Should Continue Until Hamas is Destroyed

I love the timing of how once Israel is winning and about to rout Hamas and remove a cancer from the Palestinian people and we are all one huge step closer to true peace in Palestine...

THE WEST IN FULL UNISON AND CHOIR BEG ISRAEL TO STOP.

B as in B.

S as in S.

It's almost as if the west and other nations want the Palestinian issue to never end. As if there's this powerful lobby group of diplomats and negotiators at the UN that need there to be a continual crisis in the Mideast otherwise they'd be out of the job. Ergo, once their agitator, Hamas, is on the brink of being destroyed or weakened to the point they can't terrorize Palestine anymore, they beg and plead Israel to call a time out.

Israel should continue to do all in its power to wipe out Hamas and if necessary reoccupy Gaza, and it would be a great help if the Palestinians would help them.

The Pie Chart of Blame

I received a request to break down who I blame for the housing crisis/financial mess/recession we've gotten ourselves into and thought it might do some good to not only list all of those at fault, but what percent responsible they were. Thus a handy little pie chart;


I first and foremost blame the sub prime borrowers because, as I've said before, none of us would be in this mess if they did what they said and paid back what they owed. Thusly I assign a 23% blame on them.

However, it's not like financial dead beats could have done this on their own. They needed help. Specifically, they needed some moron to loan them the money and here I blame mortgage brokers and lenders. In the past these people would have normally weeded out the sub prime dead beats from borrowing money in the first place and summarily denied them the loans. However, driven by commission and short term profits, these idiots lent money out they knew they would never get back. Thusly, I assign a 17% blame to them.

Now, unbeknownst to most people, and arguably the main point of my book (which you should buy), is that the media and society only focus on one side of the housing crash problem; demand. All we ever look at is how demand was artificially inflated by shoddy, if not, absent lending controls, a flood of sub prime dead beats entering the market and easy credit. Nobody looks at the other side of the equation and that is supply. Here the exact same story was repeating itself.

For it wasn't just sub prime dead beats that wanted to own houses, but scumbag, moronic real estate developers who wanted to build more and more housing and sell it at inflated prices. These people are just as much to blame, for as much as the sub prime dead beats artificially inflated demand, these crooks skyrocketed supply. And so much did they boost the supply of housing, they flooded the market with it, which drove prices down and made it impossible to sell your house for anywhere near what you paid for it. I blame them precisely as much as I do their demand-side counterparts - 23%.

Again, these real estate developers could not have done this without help, and here is where the fourth culprit lie - banks and bankers. Banks, blinded by what they deemed to be perpetual commission for continually approving $35 million suburbanite real estate development deals, would pay no heed to the burgeoning level of supply they were dumping on the market. And since they didn't care about how much supply was hitting the market, they also didn't care if it would bankrupt them, necessitating a taxpayer financed bail out. They put their commission ahead of not only the long term longevity of the bank, but from lessons learned from the S&L bail out, they knew the taxpayer would be stuck with the bill. They are equally to blame for the mortgage banking scum that lent so frivolously to the sub prime deadbeats - 17%.

The two sides of the economic equation, supply and demand are accounted for, but it behooves the question "what were people thinking?"

Well most "people" were neo-Americans, accustomed to not having to work or pay for anything. It was their entitlement mentality that they were entitled to a house, entitled to a flat panel TV, entitled to a convertible and entitled to a life. Additionally, most neo-Americans put themselves first above and beyond all others, so even if Banker Bob knew lending money to Developer Dave would result in a $10 million loss for the bank, what did he care? He was going to get a cool $100,000 commission off that deal. Besides which, he had no loyalty to the bank, he was already looking for another job. It was this childish, me-first-at-all-costs-including-tanking-the-US-economy mentality that created the environment by which the housing bubble and subsequent crash could fester. Ergo, it is the spoiled brat, entitlement, American psychology that is to blame, earning 13% of its share.

The two remaining culprits were simply responding to what Americans and society wanted. Investments banks, though not the originators of the loans, accelerated the bubble by allowing the originators to sell the toxic loans they did make. This disassociated the originator holding onto the risk of the loan and gave them great incentive to go for volume and approve everything under the sun. Again, adhering to the "me-first" mentality, investment banks passed on crappy loans to unsuspecting investors, of course, not without first, getting their cut in commission - 4%

And finally, how can a good ole fashioned bubble form without the implicit consent of the good ole government. Again, prompted by the desires of neo-Americans to have everything for free, and always eager to use taxpayer money to buy votes at the expense of society, democrats (primarily) through the years instituted policies such as the CRA that somewhat sternly suggested banks lend to losers and scumbags. Fannie Mae and Freddie Mac were the government intermediaries that made this possible as they financed/guaranteed the mortgages made to the most rotten, degenerate scumbag borrowers. And if you weren't for giving away free houses to the poor, you were a racist, nazi, sexist fascist. Of course, the "government" is really just an illusion, as last I checked this was a democracy and it is the people who govern, thereby making the government just a condoner of the things going on and earning it a 3% share of the blame.

A Cappy Cap Original Joke

I have made several jokes, but this one is so bad, and my friends forbade I tell it, which means, it has to be told.

There was a monk living in a monastery in the Italian Alps. He worked hard recording bibles and studying the scripture. However, he had a blessing and a curse.

On one hand he was a talented jazz musician. Able to compose jazz songs that were amazing, rivaling the best composed hymns of all time.

On the other hand he was a compulsive kleptomaniac.

They called him;

Felonious Monk.

FDR = Madoff = Ponzi

ht

Cuba to Celebrate 50 Years of Communism

Cuba is about to celebrate 50 years of communism.

Sadly, there's no reason to celebrate. Not by the numbers anyway.

And a Happy New Year

I was thinking about making a New Year's resolution to not engage in economic schadenfreude and take glee in the pain of others.

Then I thought about all the pain these sub prime deadbeats are causing the economy and all the banks that are asking me for my tax dollars to pay for their stupid mistakes, not to mention all the gray haired middle age bankers who scoffed and laughed at me and my ilk when we said there were problems in the housing market. And so on second thought, naaaahhhh, I'm going to continue to gloat;




And thus, let me give you the 2008/2009 New Year's Toast

May your houses and Mercedes get repossessed.
May you lose the job you earned through having nice hair and kissing the boss' ass at the expense and integrity of the firm.
May your toxic wife leave you as you no longer can establish a line of credit to rent her.
May your children actually have to pay their own way through college and learn to hate you as you spoiled them this entire time and accustomed them to an unsustainable level of living with other people's money.
May you never travel to Europe, Arizona or any other luxury trips ever again.
May the IRS come knocking at your door this April.
And may you have to get a real job and produce something of worth.

HAPPY NEW YEAR!!!!

Andrew L, Sir, You Hurt Me

What did I do to deserve this?

ht to Andrew

Santa is a Socialist

Correct.

A Scum Sucking Parasite Called "Aramis"

I wanted to highlight this group of "men" out there who claim to be "rich" but perpetually post losses on their tax returns. It gets back to some previous posts I've made wherein the housing crash and financial crisis was caused largely by "men" who never made a profit, but just moved large quantities of money around, siphoning off money for themselves to live off of and afford themselves a faux jet-set life style. Thus, I present to you an excerpt from my book about a scum sucking parasite called "Aramis;"

"While Zorba was the last of the three musketeers I dealt with, Aramis was the first. And though not as eccentric as Zorba, he too had his similarities and eccentricities. Like Zorba, Aramis was also a “super tan man.” Though without the Hawaiian shirt in January and a medallion nestled in his chest hair, his hue told me he was also spending an inordinate amount of time in a tanning booth or on a beach. Additionally, Aramis was in real estate, and like Zorba was what I called a “pretty boy” real estate developer. “Pretty boy” meaning they may have been the “developer” of a property, but they weren’t the actual ones laboring to build the property. The “real” developers wore work boots to the bank and dusted up our chairs with sheetrock dust. The Three Musketeers just moved money around. Aramis was also a good friend of the banker, and like Zorba would talk about actual business 10% of the time and grilling, drinking, boats, cars and golf the remaining 90% of the time. They were quite the same.

But while Aramis and Zorba were similarly exotic, the deal he brought into the bank was so commonplace and overdone that the details are not worth explaining. Aramis was a developer who wanted some amount of money to build some new twin home development, in some far flung suburb, targeting some group of young folk. Aramis hadn’t conducted any kind of absorption study, therefore compelling me to pull some quick supply figures. These figures would show an excessive and gluttonous level of similar housing in the area which would guarantee the spectacular demise of this development. But of course I would be countered with the argument these developments were different because they threw a duck feces-infested pond in the back, had a club house or some other such thing, and therefore would not only sell, but sell faster and for more than the comparables. Besides which, Aramis could personally guarantee the loan; please write it up anyway.

It was the same broken record song I had heard a million times before.

But while his deal was common, Aramis had two exceptional and unique skills; tax returns and guilt tripping.

In true real estate developer tradition, Aramis furnished nowhere near the amount of documentation necessary to fully and adequately analyze his proposal. And like most other developers before him, he failed to file his taxes on time, had to file an extension and so we were stuck with a 2005 tax return that was now approaching 19 months old.

But what was most disturbing wasn’t that his tax return was dated, but that it showed a loss in 2005. And not only that, but his 2004 tax return also showed losses. Given his stories that paralleled Zorba’s about going out on the boat, Arizona golfing trips and other such luxuries, I found it odd that according to my tax returns I made more money than this presumed real estate mogul, yet I was not living his middle-aged-man, Metamucil jet set lifestyle. This, combined with a dearth of other documentation I needed to write up the loan, made it highly unlikely we were going to approve Aramis’ latest real estate development.

When I presented my findings to the banker, particularly the fact he had lost money in two years that were presumably banner years for real estate, I was more confident than usual this deal would be shot down. But as bankers became more and more desperate as the housing situation became progressively more dire, surprises became more and more frequent, and I was about to get one of the most outlandish lines that would resurrect my now perfected credit union face of disbelief;

“Well, he shows losses on his tax returns to lower his tax bill. He makes a lot of money; he’s just trying to hide his income.”

Being a capitalist and understanding the natural incentive to lower one’s tax bill, I could appreciate an individual taking whatever legal measures necessary to minimize their reported income. But I also knew the difference between cash expenses and non-cash expenses, as well as stated profits and cash flow. It was one of the most incredulous lines of BS I had ever heard in my entire banking career.

“Oh, I know that he’s showing losses on his tax returns. Oh, and I know it was during the two best years in real estate history. But you see, he’s really making money. He has $4 million in cash just floating around. You just don’t see it. But it’s there. It’s invisible! It’s magic money!”

Additionally, the banker said it so matter-of-factly I almost sensed he was trying to insult me or make it sound like this was common knowledge. That all multi-millionaires show losses on their tax returns. But he may as well have been trying to convince me it was just as common knowledge that gnomes protected the bank’s vaults at night with their swords that were made by magic Federal Reserve fairies.

Crazy as an excuse as it may have been, I had heard this excuse once before from another developer in my days at the credit union. But in his case it was legitimate as he furnished us with an audited personal income statement compiled by a reputable CPA firm which showed one time items had distorted his true income and cash flow. Therefore, this particular individual really did make some money and it was a one-time event he posted a loss. Thinking there was an outside chance this was something similar, I asked the banker if he had an audited income statement prepared by a CPA.

“Uh, no, he just has his tax returns” the banker responded.

Of course. The implication was I was just supposed to take this man on faith. I was literally to believe in magic, invisible money and the heroic Guardian Gnomes of the Bank Vault.

By now I was getting angry and tired. It was the same damn thing, over and over again;

Some real estate developer had an ill-thought out plan for a real estate project. The housing and economic data would prove it was doomed to failure. Bankers blinded by their greed for commission would ignore the realities and risks, and fight to have the deal approved. We’d get a direct order to write it up anyway, but when we’d try to analyze it, we were guaranteed to never have the documentation needed to analyze the loan. And now, not only did I have grossly inadequate documentation, I was to ignore what documentation I did have. I was to ignore the losses on this individual’s tax returns and just trust he was making lots of money or whatever else he wanted to tell me. I’d rather believe in the sword-making Federal Reserve Fairies.

Now visibly losing my patience, I asked the banker in a somewhat stern tone,

“How are we supposed to know what his cash flow is then? How am I to measure his ability to pay back this loan? How am I supposed to write up this loan? I can’t do this unless I get more documentation.”

He could hardly argue, even if his sole interest was getting a commission. Aramis had such a lack of needed documentation, plus the fact he was losing money according to his dated tax returns, it almost necessitated, even by the banker’s standards, we get more documentation. He said he’d put in a call and see what updated information he could get.

A week had gone by and as usual we did not receive any new documentation. However, instead of sending us his tax returns, Aramis himself was going to come to visit and talk to us about his real estate deal and answer any questions we might have. Returning to the airplane analogy, this would be like needing wings for a plane, and instead of the manufacturer sending us the actual wings, a representative would come to our office and talk about wings. Talking about wings would presumably be enough then to get the plane up in the air and flying. Of course it wouldn’t. All it would do is waste my time. I didn’t need Aramis to talk to me about a deal. I didn’t need Aramis to explain to me how his twin homes were different. I didn’t need Aramis to explain how he was making money. I needed Aramis to prove it. And the fact he wasn’t sending any documentation, audited or otherwise, meant I was going to have to suffer through another sales pitch, interweaved between stories of boat parties, golf trips, Viagra and the baby boomer bar scene that largely wouldn’t change a thing.

The banker introduced me to Aramis and despite there being snow outside, Aramis was sporting his nice, dark tan. We sat at a conference table and there I listened pointlessly for 30 minutes about Aramis’ business, how he was super busy working on all these real estate deals and hadn’t gotten around to filing his 2006 tax returns. But it should be of “no concern, because those tax returns would show losses anyway, which were irrelevant because he was just trying to lower his income tax bill. And say, did you see Frank by the way? Yeah, they went golfing in Tempe last week and boy did they get hammered. Their waitress was a hottie. And when are you coming out to the cabin?”

And like any other meeting or high school economics class, it was humanly impossible to pay attention, let alone care. Aramis could have told me all the stories he wanted. He could have told me how his business worked in detail (to the point that it would make sense). He could have told me he just discovered platinum in his back yard. He could have told me he personally knew Jennifer Aniston and she had a weakness for video game-playing economists. None of it would matter because he still wasn’t providing any documentation to back it up. The loan I was looking at was for a real estate development, plain and simple. He wasn’t able to prove to me he could pull it off, plain and simple.

The meeting concluded and I bid him farewell. I returned to my desk with no more information than I had before I went into the meeting. But ten minutes later, the banker came down and said,

“What did you do?!”

Confused, thinking there was nothing I could have possibly done, I asked,

“What? What did I do?”

“Aramis came all the way out here to talk about his business and you didn’t even act like you were interested,” he said. “You just completely ignored him!”

The banker was right. Not only did I act like I wasn’t interested, I genuinely was not interested. And while I did not completely ignore him, I wish I could have. For while we could have argued about civil pleasantries and standard banking etiquette, when it came to interacting with potential clients, all of that was irrelevant because there was no loan there to be made. Aramis was balking and was outright, albeit subtly, refusing to furnish us with the information we needed to do the loan. He was hiding something, and no matter how much the banker wanted to hound me or pressure me into approving this loan, I couldn’t underwrite it even if I wanted to.

But then came the stroke of genius that earned my hat tip to Aramis. His second skill; his ability to lay a guilt trip. Frustrated the banker said,

“Look, I just talked to Aramis and you don’t understand. Aramis is one of my best clients. For him to take the time to come talk to us is enormously generous on his part. And you did not even take the time to get to know him or learn about his business and that made him very upset. If you don’t talk to him or at least look at this loan, then he’s seriously thinking about taking his business to another bank.”

The irony and hypocrisy were staggering on so many levels.

First, if Aramis wanted to take his business to another bank, then fine, let him go. Part of the free market is competition. And you hope to outdo your competitors so you get a larger market share and thus make more profit. Therefore, not only do you strive to become the best, but if there is something you can do (legally) to weaken your competitors, then you certainly do it. And here was the perfect opportunity to weaken one of our competitors. He was the perfect Trojan horse. Aramis was a bad client and a bad loan. Every indication in the housing market and economy suggested a housing bubble and subsequent collapse, if it wasn’t occurring already. Aramis, completely unable to prove his ability to not only sell these twin homes, but personally guarantee the loan, meant some unlucky sucker of a bank would end up holding his worthless development in foreclosure and would be bleeding cash to float it. If we passed on this loan and a bank with lesser quality and credit controls took it, we just delivered a blow to our competition. If he wanted to pick up his toys and go home, let him.

Second, the “honor” and “privilege” to be in the presence of the great Aramis was a joke. The reason why is, when it comes to lending, it works the other way around. If there was anybody to be humble and kneeling it was him. He was the one asking us for money. And typically when you ask to borrow money you do so in a humble manner. You don’t bark orders or demand to be given a loan like a suburbanite princess demands to be given a convertible Cabriolet. Furthermore, the reality is if you are the one who wants to borrow money, then you are the one who has to prove you can pay it back. The arrogance of Aramis to not only refuse to furnish us with information that would prove his ability to pay back the loan, but his insistence we trust his word, was laughable.

Finally, if Aramis was such a big time real estate mogul, what in Heaven’s name was he doing dealing with a small time bank like us? If he was indeed that great and big of a player, then he would have been poached long ago by much larger banks that could lend him much larger amounts of money, and probably on better terms. The truth is he was a client this relatively new banker brought over from another small time bank and was an absolute nobody. Didn’t matter what he said he was or what he said his business did; none of the documents proved it. All they proved was he was a nobody. And a nobody that was losing money."

So buy the book already!

Israel and Gaza

I don't know.

Maybe, don't shoot rockets into Israel next time?

Like just leave them be?

I know, crazy concept, people just don't like being shot at, but maybe, just maybe try it once and see if Israel in turn leaves you alone.

I love how the story shows nothing but Palestinian casualties (and how many of them I suspect are posed like this one).

You Will See Valkyrie

I smell a fish.

And the fish I smell is the whisper/smear campaign against the movie "Valkyrie."

Ever since it went into production it was befuddled by a bevy of problems, set backs and delays.

Then the German government/people were complaining about the movie and some complained about Tom Cruise having the audacity to make a movie of one of the nation's greatest heroes (which the Germans seemingly failed to do in the past 60 years).

Because of all this I was hell-bound-determined to see the movie simply to spite what I suspect was a group of leftists/Tom-Cruise-haters/jerks that didn't want to see another movie about good guys vs. bad guys, sacrifice and duty and other such things those of lefter leaning ideologies love to hate succeed in the box office.

Saw it last night. Amazing movie.

I didn't know much about Von Stauffenberg aside from the historical facts of his attempt to assassinate Hitler. But the plotting, the scheming, how much all those men gave up (family, wives, children, careers) AND just how close they came to pulling it off, make this not only a very thrilling and engaging movie, but you learn a lot more beyond what you picked up in the history books.

Not to mention you have Eddie Izzard and Kenneth Branaugh as well as what I could count to be two actors from the Lord of the Rings trilogy that keep you looking for other actors you may not recognize.

So, do yourself a favor, ignore what preppy liberal elites write as they went from daddy's dime to major in journalism to working at USA Today or the NYT or whatever dying periodical they work for now and instead of report the news, try to create it or sway you one way or another.

It's a great flick, a great history lesson and a great tribute to a great man.

The Captain, Obviously, Does Not Endorse "Chedda"

Many readers have pointed out Google's Adsense has for some reason, put a deadbeat low life loser's advertisement on my blog (either that or he's a charlatan).



In any case, as no doubt most of you would surmise, I do not endorse "Chedda's" service. We here at Cappy Cap pride ourselves on the fact that we are all real men and women and support ourselves through work and not parasiting off the taxpayer. We here at Cappy Cap are not the lowest life form, known as the welfare bum. We here at Cappy Cap all are real adults, fully realizing that if the world was full of "Chedda's" there would be no motorcycles to buy with our "bling" that we stole from the non-existent taxpayers because there would be no economy by which to extract taxes from because we'd all be too busy lying around wondering why we're poor.

I shan't provide the link, for the scumbucket, real or not, doesn't deserve the traffic.

Melting Polar Ice; NOT!

This, among a limitless number of other examples, is why I view global warming as nothing more than a political scam of the most evil politicians to brainwash people or backdoor them into hating capitalism. Countless stories like this one about how there's so much less ice up in the polar caps. But then when you look at the actual data;



Oh, heh heh. Well we meant well, and well um, gee, you know uh this one village in Alaska had to move due to the lack of frost.

Meanwhile it's 20 below the average temperatures here in Minnesota and we're suffering one of the coldest winters in the past 20 years.

To all the global warming conspirators out there, go ef yourselves.

ht to Kate.

US Corruption Index

Transparency.org comes out with one of my favorite measures, the Corruption Index. It attempts to simply measure corruption. The higher the score, the less corrupt the country is and vice versa. Typically topping the list are your Danish and Scandinavian countries like Finland and Denmark. And at the bottom of the list are your war torn African countries and hopelessly corrupt countries like Russia and China. However, they typically do not post the TREND of any one country and seeing there has been a fair amount of corruption recently in the US with this whole housing crisis and financial debacle and all, I was curious what the US looked like over time.



Though chaotic, a trend does seem to be occurring. The Corruption Index in the US is going down implying there is MORE corruption. However, I argue the Corruption Index is woefully underestimating the amount of corruption here or is a lagging indicator. I fully expect, along with all the other social and economic metrics of this dying nation, the Corruption Index will approach 6.2, dropping nearly a full point by 2010, putting it in league with Cyprus, Portugal and Botswana.

Alas, just another ounce to be added to the metric tons of empirical proof the US is collapsing.