Here now are Daily Danet’s most important stories for 2008.  They may not be the most memorable now, but in time, these events will be remembered longer than anything else in 2008, for their consequences as well as the stories themselves.  These are the stories that, when we look back in 20 years, we will vaguely remember they happened before the coming apocalypse.

1. Complete collapse of the housing market. 2008 will certainly be remembered as the year the housing bubble went pop.  The median home price peaked in 2006 at about $250,000.  The median home price is now around $180,000.  Fannie Mae and Freddie Mac were officially taken over by the government with no hope of being broken up anytime soon.
2. Wall Street Follows Housing Over a Cliff. In a related store, in 2008 we found out that Wall Street was as foolishly optimistic as that kid whose parents wrapped clothes in an Xbox box.  With no adults manning the shop, no one thought to look into all those subprime loan derivatives.   The failure of Lehman Brothers, and the death of the last five remaining large investment banks was the earthquake in 2008.  The Tsunami is on its way.
3. Bailout Mania. Congress realizes that they have skewed the housing market, encouraged risky behavior and destroyed several financial companies by providing easy access to money, by removing accountability and by introducing market distortions.  Congress immediately moves to fix the problem by providing more free money, completely eliminating accountability and further distorting markets.  At some point, a politician somewhere will read Ayn Rand.
4. Barack Obama Elected President. An unknown junior Senator from Illinois, who happened to be African American, was elected president by the largest popular margin ina generation.  The election will be remembered for a long time, even beyond the racially-motivated “historic” headlines.  Senator Obama spent record amounts in the primary and general elections, and was the first person to not use federal funds since Richard Nixon.  Hillary Clinton’s bid to be the first female presidential nominee, and Sarah Palin’s selection as the first female GOP vice presidential candidate will also be remembered for years to come.  So, too, will the media’s abdication of its investigative responsibilities.
5. Global Warming Begins to Collapse. In time, 2008 will be recognized as the last time anyone took Al Gore seriously.  2008 will be the coldest year in the United States in over a decade, and record cold and snow have plagued the rest of the world.  Although deranged lunatics will continue to shout from their daddy’s Escalades and their Hollywood mansions, 2008 will be the year that skeptics were finally given a voice.
6. Gasoline Prices. 2008 will be remembered for its dramatic jump in the price of gasoline, rising to over $4 per gallon in the United States.  The impact, however, will be felt for years as Americans begin to reduce their consumption of gasoline and thereby their dependence on foreign oil.  By December, the price of a barrel of crude oil had fallen nearly $100, a decline of over 70% from it’s summer time high.  Low prices for crude oil minimize the influence of OPEC nations and Russia.
7. Iraq turns a corner. The Surge shows dividends as Iraq is able to reconcile its political differences and unite its factions against foreign and domestic insurgencies.   In time, although the war was mishandled for too long, the decision to invade Iraq and the consequences of a free nation in the Middle East will be seen as the high point of the Bush administration.
8. NASA discovers water on Mars. After countless complicated experiments are conceived and tested, the little Phoenix lander scrapes the surface of Mars, and, a few millimeters below the red dust, it finds ice.  In time, this will be seen as an enormously significant find for human exploration of the planet.
9. Russia on the Offensive. Russia invaded Georgia and rattled its sword in the Western hemisphere, meeting with Venezuelan dictator Hugo Chavez and Cuban dictator Raul Castro.  These events signal a growing hostility towards the West.
10. Nobody’s Perfect, Nothing’s Impossible. After a 10-6 record in the regular season and nearly firing their head coach the year before, the New York Giants make an improbable run to the Superbowl, winning a record 10 straight games on the road.  They face the undefeated New England Patriots, the first team to ever win 18 games in a season and only the second team in history to make it to the Superbowl undefeated.  The Giants were expected to be sacrificial lambs to the Patriot’s crowning victory.  But, as they say, on any given Sunday, anything can happen.  The impossible odds.  The impossible catch.  The heartpounding final seconds.  This is why we watch sports.  These are the games we tell our grandchildren about.

Honorable Mention:
Fidel Castro resigns
The Large Hadron Collider fires up (and doesn’t destroy the Earth)
USS Lake Erie fires a missile that destroys a damaged sattelite in space
Banazir Bhutto is assassinated
Beijing hosts the Summer Olympics
Bill Gates leaves Microsoft

A number of my friends and relatives readers have asked about the Maddoff case.  Here now is the Daily Danet Maddoff Frequently Asked Questions:

Who is this Maddoff guy?
Bernie Maddoff was the former chairman of NASDAQ and the founder and CEO of his own investment company.

How do you pronounce his name?
“Made-off” as in “That guy just made off with my money!”

What did he do?
Maddoff is charged with running the largest ever Ponzi scheme, essentially defrauding his investors for over $50 billion–enough to buy every domestic car manufacturer twice.

What’s a Ponzi scheme?
Named after Arthur Ponzarelli, this is a complicated financial scheme that involves a Jewish man pretending to be Italian.  The scheme reaches its peak when the man uses two slick sticks and a speed boat to jump over a large, omniverous fish.

Really?
No.  A Ponzi Scheme is a type of fraud, made famous by Charles Ponzi.  In this fraud, the conman takes money from investors, promising huge returns.  For a while, the conman pays those returns with new money from new investors.  As the scam grows, the conman needs more and more investors to continue to pay the returns to the old investors (and the new ones as well).  This is also called a “pyramid” scheme.

Kind of like Social Security?
Exactly.

Seriously, how is this different from Social Security?
It’s not different at all.  Social Security takes money from current employees (new “investors”) to pay returns it promised current retirees (initial “investors”).  Just like a Ponzi scheme, it depends on a constant stream of new “investors” or the system collapses.  So it’s no different than what Maddoff did.

Really?
Well, there are a few minor differences.

Phew!  Like what?
Well, Maddoff conned people who voluntarily invested in his fund.  Social Security is mandated by law.  If you don’t contribute to the fraud, they throw you in jail.

What else?
Well, even though the SEC dropped the ball on this, Bernie Maddoff’s Company was still regulated.  Social Security is not.  The people who run Social Security (Congress) are the same people who oversee it.  It’s a lot like Bernie Maddoff being made the head of the SEC.

But Social Security isn’t a criminal fraud, is it?
Of course not.  Congressmen are exempt from prosecution for any laws they enact.  No criminal, no crime.

But there will always be more new “investors” in Social Security, right?
No.  Sadly, the government cannot force us to procreate.  Because of the large number of people born just after World War II, the number of current retirees is just about to sky rocket.  In addition, the low number of births in the 1970’s through today is just showing up in the employment rolls.  Add that all up and then tack on an increasing unemployment rate and you’ll see where we are.  This is the point in the Ponzi scheme where the conman fakes his own death and flees to Buenos Aires.

!@#%^$ing Baby Boomers.  So what happens when Social Security fails?
Sorry, but I’m prohibited by law from telling you that.  But you’ll know in about 12 months.

Seriously, give me a hint.
Okay, but you didn’t get this from me, but don’t eat the soylent green wafers.

One thing I love about this time of year is the retrospective top 10 list.  FoxNews has a great list of the top 10 things blamed on Global Warming in 2008.  My favorite is number two: it’s like saying the Easter Bunny killed the Tooth Fairy with Excalibur.

Indeed, 2008 was a chilly year.  The chart below shows over 100 years of temperature data for the lower 48 states.  The last bullet is 2008.  The bullet to the left at about the same temperature is 1995.  In other words, we’ve lost 13 years of “global warming”.

2008 will, I hope, be remembered as a year of ridiculous policies.  We learned that the earth is cooling (2008 is on pace to be the coldest year in a decade).  We learned that a policy of  “universal home ownership” combined with bad credit lending policies will drive a housing bubble.  And we learned that, when you give money to “struggling” companies, the executives of that company will use it to line their own pockets.

Here’s to hoping that we’ll learn the lessons of 2008 and make 2009 a year in which common sense returns to humanity.

This is all you ever need to know about the quality of the people who work for the New York Times:

“It’s a Wonderful Life” is a terrifying, asphyxiating story about growing up and relinquishing your dreams, of seeing your father driven to the grave before his time, of living among bitter, small-minded people. It is a story of being trapped, of compromising, of watching others move ahead and away, of becoming so filled with rage that you verbally abuse your children, their teacher and your oppressively perfect wife. It is also a nightmare account of an endless home renovation.

Petty, snobbish Sodomites who think honest people should jump off a bridge into icy cold water.  Simpletons who think gambling will help the economy — any economy.  Jealous, spiteful little men who think it’s possible to be “oppressively perfect,” because personal character is a zero sum game.

I can’t imagine why circulation is down.  Good luck with those layoffs, Mr. Jamieson.

I don’t often post email jokes, but this one is worth it.  (Hat tip: Mom).

Have a Merry Christmas, and do try this at home!

Jose Cuervo Christmas Cookies

Ingredients:
1 cup of water
1 tsp baking soda
1 cup of sugar
1 tsp salt
1 cup or brown sugar
4 large eggs
1 cup nuts
2 cups of dried fruit
1 bottle Jose Cuervo Tequila

• Sample the Cuervo to check quality.
• Take a large bowl, check the Cuervo again, to be sure it is of the highest quality, pour one level cup and drink.
• Turn on the electric mixer. Beat one cup of butter in a large fluffy bowl.
• Add one peastoon of sugar. Beat again.
• At this point it’s best to make sure the Cuervo is still ok, try another cup just in case.
• Turn off the mixerer thingy.
• Break 2 leggs and add to the bowl and chuck in the cup of dried fruit.
• Pick the frigging fruit off the floor.
• Mix on the turner.
• If the fried druit gets stuck in the beaters just pry it loose with a drewscriver.
• Sample the Cuervo to check for tonsisticity.
• Next, sift two cups of salt, or something. Who geeves a sheet.
• Check the Jose Cuervo.
• Now shift the lemon juice and strain your nuts.
• Add one table.
• Add a spoon of sugar, or somefink. Whatever you can find.
• Greash the oven.
• Turn the cake tin 360 degrees and try not to fall over.
• Don’t forget to beat off the turner.
• Finally, throw the bowl through the window, finish the Cose Juervo and make sure to put the stove in the wishdasher.

Cherry Mistmas!

You know, it’s funny, there are some character types that never grow old.  One of my favorites is the misfit hero.  A no good loser until a crisis hits, the hero finds their true calling and becomes a hero of a great cause.

Henry V is a great classical example.  Harry Potter is a modernization.  The archetype is, however, not exclusively British.  True most popular American misfit heroes are fictional: Indiana Jones, John McLane, and pretty much any character played by Shia Lebouf, for example. There are real misfit heroes among us everyday.  Today, I’d like to celebrate some of these fine young men and women in Maryland.

I’ve never liked traffic cameras, especially with automated speeding tickets.  I like bureaucracy even less.  These intrepid young heroes in Maryland, acting completely out of self interest, have found a way to make both of them impotent.  These kids decided to exact a small amount of revenge on their (alleged) tormentors by making fake license plates and intentionally speeding through traffic cameras.  It’s fantastically brilliant.

The bureaucracy, treating this problem with all the care and finesse of a grizzly bear on crystal meth, continues to issue the speeding tickets, knowing that the system is broke.  I would suggest one minor change to expedite the collapse and add to the irony: go to the local county traffic court with a pen and paper; take down all of the licence plates in the employee parking lot and use these plates when speeding through the camera zones.  Have fun.

Two reports on different subjects came to my attention over the weekend.  Both are interesting in their own right, but also because they display a complete and total lack of inquisitiveness on the part of the media, especially in matters near and dear to their hearts.

The first, most blatant example comes from the Associated Press’s Seth Borenstein.  At the end of two pages of mindless drivel about Global Warming™, Seth comes up with this stinker of a paragraph:

Ironically, 2008 is on pace to be a slightly cooler year in a steadily rising temperature trend line. Experts say it’s thanks to a La Nina weather variation. While skeptics are already using it as evidence of some kind of cooling trend, it actually illustrates how fast the world is warming.

Read the entire article and try to find any evidence to support that conclusion.  There is nothing.  No scientist can even be quoted as supporting such a claim.  Do you know why?  It’s patently stupid–that’s why.  How in the world can an intelligent person conclude that a cooling trend “actually illustrates how fast the world is warming?”  It’s nonsensical.  That’s like saying the Giants’ inability to score a touchdown last night “actually illustrates how well their offense is working.”  It’s idiotic beyond description.  One could argue that La Nina should be making 2008 much colder, but CO2 emissions are reducing the impact.  Sure, that’s an argument, but that’s not the one being made.  Without independent proof of global warming, the cooling trend is just a cooling trend.   Seth Borenstein either never read his own piece or is somehow immune to the forces of logic.  Either case is not a good one for a supposed science reporter.

The second, equally disturbing piece of reporting comes from Eileen Buckley at WBFO in Buffalo.  Reporting on a dispute between the local Congressman, Brian Higgins (D-NY), and gasoline retailers, Ms. Buckley reports that:

Higgins is calling on all 279 gas retailers in the region to voluntarily reduce gas prices. If they fail to do so, Higgins says they could face potential enforcement or penalties from the Federal Trade Commission or state Attorney General.

The word “voluntarily” has a particular meaning, and when a government official uses it, a reporter should be paying very close attention.  Here, Congressman Higgins is threatening gas stations with the power of federal and state law enforcement agencies.  There is nothing “voluntary” about doing something under threat.  For example, it is not fair to say that Americans “voluntarily” pay taxes when, if we don’t, we can be thrown in jail.  Nor is it accurate to say that it is not robbery when someone says “if you don’t voluntarily give me your wallet, you could face speeding lead projectiles from my Smith & Wesson.”

The point here is that the Fourth Estate is supposed to be the most skeptical.  There are painfully obvious questions to be asked here, and there is not indication of them being asked.  “Why is a cooling period indicative of global warming?  How could that be true logically?”  “How could it be voluntary if you’re threatening them with fines and possible imprisonment?”

Until the media begin to ask tough questions (yes, even of Democrats and global warming “experts”), newspapers will continue to flounder and networks will continue to bleed red ink.

40 great movie speeches in 2 minutes:

Anyone who can string together William Wallace, Sparticus and Fozzie the Bear has my vote for movie of the year.

For a while now, I’ve want to to call Obama on his utter inability to make a concrete statement on anything.  If you parse his words carefully, you will find that, far more often than not, he is saying nothing at all while giving the right people some sort of comfort.  Yesterday’s response to the situation at Republic Windows is classic (my comments in bold):

OBAMA: When it comes to the situation here in Chicago with the workers who are asking for the benefits and payments that they have earned, I think they’re absolutely right. [Who could argue with that.  People are asking for what they have "earned."  By definition, everyone is entitled to what they have earned.  That's what we mean by using the word "earned." Watch for the "if-then" later]. And understand that what’s happening to them is reflective of what’s happening across this economy.  [First step, blur the lines.  Make sure that, when the schnitzel hits the spritzer, you can claim that you weren't talking about Republic, but more generally about the broader economy.] When you have a financial system that is shaky, credit contracts; businesses large and small start cutting back on their plants, and equipment and their workforces. And so that’s why it’s so important for us to maintain a strong financial system.  [This all sounds eminently reasonable, but is anyone arguing that we should not maintain a strong financial system?  In the words of Melvin Udall, "I'm drowning here, and you're describing the water!"]

But, it’s also important for us to make sure that the plans and programs that we design aren’t just targeted at maintaining the solvency of banks, that they’re designed also to get money out the door and to help people on Main Street.   [This is classic Obama: set up the two sides, and feel their pain: workers need money, banks need to stay solvent.  Then propose that we make everyone happy by: "making sure that the plans and programs that we design" make everyone happy.  There's no there there.] So, number one, I think that these workers, if they have earned these benefits and their pay, then these companies need to follow through on those commitments. [BINGO!  Who had the "if-then" in the middle of the second stanza?  Come on up to claim your prize.  To be clear, Obama is only saying that if the workers earned benefits, then the companies should follow through.  First, a non Turing-compliant computer could make that statement.  There are no facts, no judgments and no conclusions.  Just a hypothetical.  Second, I'm sure that even the business owners would like to "follow through on those commitments", but being broke means you cannot follow through on financial commitments.  In law, this is known as fighting the facts: if you're given a tough decision, change the facts with your magical oratory wand.  You know that riddle with the fox, the duck and the grain?  Obama would say, "I think we need to devise a plan that would allow the fox, the duck and grain to make it across the river safely.  We would work with local and state agencies to ensure that the river was navigable and..."  Completely avoids the issue, but sounds good. ] And, number two, I think it is important for us to make sure that, moving forward, any economic plan that we put in place helps businesses to meet payroll [again, state the obvious: I want to make everyone happy--but I won't tell you how] so that we’re not seeing these kinds of circumstances again.

And one of the things I’ve asked my economic team to review is [I love this technique as well.  He used this all weekend with Tom Brokaw, "I've asked my economic/security/broken promises team to review..."  It's Clintonian in it's lack of commitment.  Obama can always say "well, they reviewed it, and the answer was, 'Yes, we were doing everything we could!'  Problem solved."]: Have we done everything that we can to make sure that credit is flowing to businesses, [ooh, that's good- businesses need money to pay for economic benefits of their workers!  Forget making a profit.  Now get ready for the rainbow unicorn wishlist...] and to families [who could argue with helping families? Workers have families.], and to students who are trying to get loans [okay, a bit off topic, but I see where this is going...], and homeowners [DING DING DING! Lefty trifecta in the third stanza!  We've got unions, education and minority home ownership! Obama has managed to loop in all but one of the liberal darlings.  Leaving out the environmentalists was not too bad, but you could've worked in a green agenda point by noting that Republic makes energy efficient windows.  (Who knows or cares if they actually do-the media won't be checking). Try that next time!] who have been making their payments on their homes but are still finding their properties’ values so depressed that it becomes very difficult for them to make their mortgage payments? [Wait- what? Since when does your mortgage payment change based on your home's value?  If you buy a house for $250,000, the interest may fluctuate if you have and ARM, but it's irrelevant that your home is worth $300,000 or $150,000.  Interest rates are not directly tied to property values, and most people have been able to refinance to get out the ARM (on the demand of Congress).  The only way property values matter is if you only bought the home assuming the prices had to go up, and planned on flipping it.  Once again, personal accountability rears its ugly head.] That’s where the rubber hits the road and that’s going to be the central focus of my administration. [Now wrap it all up by saying this problem is the central focus of my administration]. Okay.

Now here’s a quick reading comprehension quiz:

To solve this problem, President Obama will:
(a) ask his economic team to review whether or not we’ve been doing all we can to fix this problem. (Lemme get back to ya.)
(b) continue to work for families like these and others across the nation that are feeling these difficult economic times.  (Empathy tonic)
(c) make sure that we create a plan that allows credit to flow to all companies that need it, regardless of their financial circumstances or ability to repay, while still making sure that banks are able to remain solvent.  (Magic beans).
(d) I have no clue, the man didn’t say a damn thing, and neither did a-c.

A large part of the conservative (but not necessarily Republican these days) objection to government bailout is what’s known as market distortion.  In economic terms, this is simply the inefficient use of capital due to extra-market conditions.  In simple terms, this is known as the law of unintended consequences.  In political terms, it’s called pay to play, or just another Monday on Capital Hill.

Exhibit A is the embarrassing situation in Obama’s hometown of Chicago, being overseen by Jesse Jackson.  Workers at the Republic Window factory are understandably upset at being laid off, but Jesse Jackson and his fellow arm twisters are making this about political payback.  Although Republic Windows could not compete and was forced to close its doors, Jesse Jackson and a host of communist and socialist thugs, have decided to make this about Bank of America.

Bank of America, who had extended Republic Windows a line of credit, decided not to renew that line of credit, presumably not out of malice, but for concern over the company’s financial outlook.  Jesse Jackson and his marxist friends are now saying that, by accepting $25 billion in federal funds, Bank of America is obligated to do their bidding, and should be forced (either legally or using Jackson’s preferred method of racially charged blackmail).

Now these are harsh economic times, and everyone has a right to be upset over loosing a job.  But if banks can be forced to allocate capital based on public opinion (or more accurately, public relations blackmail), we are in for a rough ride.  By refusing to lend money to a company in difficult times, Bank of America can put the money to use elsewhere, make a profit and use the profit to invest in another worthwhile enterprise.  That is what banks do, and it is a critical step in our economic system.  Banks that do this well succeed, banks that do not, fail.

The counterargument, of course, is that over the last several years, banks have made horrible decisions.  I would agree, but they were not alone.  The last decade has seen Congress endorsing risking lending practices and allowing the likes of Jesse Jackson to bully banks into making bad loans to people who could clearly not afford to repay.  Repeating the process is not a step in the right direction; one market distortion does not necessarily undo another.  And let’s not gloss over the fact that the alternative is to allow Congress to make these economic decisions.  These people couldn’t finance a car loan, much less the U.S. economy.

As for the automotive industry, they are already making an early payment on thier bailout.  GM ran and advertisement today falling on its sword and saying it “betrayed” consumers.  How exactly?  By agreeing to union demands for unsustainable wages and benefits?  No, in order to play this game, you have to apologize for that which you have been demonized, even if it is a strength.  So GM actually apologized for building too many trucks and SUVs–the very products that Americans buy most, but Democrats loath (unless, of course, they need to get somewhere).

Even more inappropriately, resident Senate genius Chris Dodd, architect of the housing market collapse and recipient of shady mortgages, and president-elect Obama (also a beneficiary of a shady land deal and  hundreds of thousands of dollars from Fannie and Freddie), have publicly wondered if GM’s CEO Rick Wagoner might have outlived his usefulness.  In what world is it appropriate for a politician, much less a corrupt one, to raise this question about the head of a public company?  If Messrs. Dodd and Obama want a say in Mr. Wagoner’s future, they should buy stock in his company out of thier own pocket, not ours.