Living in Contra Costa County

End of Life Panels

I think we have all been watching the shocking treatment of the Catholic Church and other religious institutions this week by the Obama Administration and the Department of Health and Human Services as they prepare us all for Obama Care.

Over the last couple years people have talked about the Death Panels under the new Health Care Laws. Although many people claim the term “Death Panels” is an exaggeration, you might begin to think more and more about how accurate that term might be.

This little video gives us an idea of how they might work. Note at the very end of the video how the Government Class moves through the scene.    

This series looks at the Constitution and what it says.  Frequently we think we know what it says, but when we actually read it we are surprised by what it actually says.

You may want to read Part 1 and Part 2 first.

Early in the Days of the Republic in the famous case of Marbury Vs. Madison the Supreme Court Established the Right of Judicial Review and declared something "unconstitutional" for the first time.

Basically the Supreme Court set the Court System up, with them at the top of it, as the arbitrators of what the Constitution means and how it should work.  There are those that argue the Supreme Court should not be the final arbitrator of the laws and the Constitution. 

Much of what contributes to the many court decisions is vague and complex laws that need interpreting and put into actual practice.  However, I also think there is a growing tendency to try and legislate through litigation.

However, Let's see what the Constitution says.  Article III Section I states:

The judicial Power of the United States shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish. The Judges, both of the supreme and inferior Courts, shall hold their Offices during good Behaviour, and shall, at stated Times, receive for their Services a Compensation, which shall not be diminished during their Continuance in Office.

Section II the Second Paragraph Goes on to State:

In all Cases affecting Ambassadors, other public Ministers and Consuls, and those in which a State shall be Party, the supreme Court shall have original Jurisdiction. In all the other Cases before mentioned, the supreme Court shall have appellate Jurisdiction, both as to Law and Fact, with such Exceptions, and under such Regulations as the Congress shall make.

Basically it appears that the Congress sets up all the lower courts and defines the Jurisdiction.  (Criminal, Civil, Maritime, Bankruptcy, etc . . .)  The Supreme Court has original Jurisdiction (The case can start with the Supreme Court) for a very limited number and type of cases.  But then all cases that start in other Courts can be appealed the the Supreme Court both in regard to Law and Facts. 

Appeals of Law or based on legal issues and how they are interpreted.  This would include legal interpretations of the Constitution and how it should be applied.  Issues of Fact are generally what the Jury decides (What happened).

However, there is an exception at the very end.  It appears Congress has the right to exempt certain laws and issues from the review of the Supreme Court.  Furthermore if Congress sets up a law not reviewable by a lower court there is no "Appeal" to the Supreme Court available sense an Appeal is based on a decision rendered by a lower Court.

I do not know if the Congress have ever passed a law and made it non reviewable by the Courts, but it is clear that they can do so.  It also seems clear to me that they Supreme Court does have a right of Judicial Review and arbitrator of the Constitution acting in the role provided by the Constitution.

So what happens if a Congress passes a very "Unconstitutional" Law and forbids Judicial review?  Well I will cover that in the future.

I am taking a look at what the Constitution actually says in relation to what people think it says. 

Take a look at Part 1 if you want a little more background.

One of the biggest controversies that will not seem to die is where was Barak Obama born; and presumably if he was born in Kenya he cannot run for or be President.  It is well documented that one of the candidates in the last election was not born in the United States - John McCain was born in the Panama Canal Zone.

What does the Constitution Say?  In Article II Section I on the executive it goes over the qualifications to be President:

No person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President; neither shall any Person be eligible to that Office who shall not have attained to the Age of thirty-five Years, and fourteen years a Resident within the United States.

That being said I see nothing that says an individual has to born in the United States.  They have to be born a Citizen of the United States.  If I understand it correctly, if Barak Obama was born in Kenya (which I am not saying I believe) he would still be a natural born citizen based on his mothers citizenship. 

Now if he was born in Kenya some of his detractors might make hay over the fact pointing out this is where he gets some of his views and things, but as long as he is a Natural Born Citizen he is eligible to be President.  He certainly has been a 14 year resident and is at least 35.

An interesting side point.  A person not born a Citizen could be President if he was a Citizen at the time of ratification.  This was probably of particular interest to Alexander Hamilton who was certainly an ambitious man, but was born in the Bahamas.

The Constitution - What Does it Really Say - Part 1                                                  Pic By Rhys's Piece it at Flickr

As some of you might know I am a Commander in our Local Royal Rangers Outpost 5.  One of the things I am doing with the young men in the Outpost is teaching the Citizenship Badge, one of the required Badges for them to get the Gold Medal of Achievement.

As part of earning the Badge they need to read the Constitution.  I have been doing this in class with them and bring some historical perspective to the class.  I find the Constitution is a lot like the Bible:

1. Very important to know and understand.
   
   
2. Sometimes hard to read when you first start.
   
   
3. Is more enjoyable when you understand the cultural and historical background of what is going on.
   
   
4. And finally people often think they know what it says, but do not actually know what it says. 
   

Many of us make assumptions about what is says and what we think it means.

One of the most debated portions of the Constitution is the 2nd Amendment that reads:

A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.

On one side of this issue are gun rights advocates that claim this is a right for all citizens to own guns.  On the other side are those that believe this refers to the State's Right to keep a Militia or National Guard. 

However in Article I, Section X of the Constitution where they discuss limits on State's Rights it clearly says in the 3rd paragraph:

No State shall, without the Consent of the Congress,   . . . . Keep troops . . .

So how can the states be prohibited from raising troops without Congresses approval and yet have the right guaranteed if that is what the Constitution says.

On the other hand the amendment clearly refers to a Militia.  I think we have to look at the historical context.  Often the Militia's of the time were not necessarily a government organized body, but were collections of citizens organized to defend themselves both from external (Indians, French, Pirates) and internal (The British Government) threats.

From the way the Amendment is written it is clear that having a well regulated Militia flows out of having armed citizen.

It appears to me that individual citizens have a right to bear Arms.  The government has a vague right to provide some rules on the conduct of Militias and maybe how those guns were used.  

Historically the right to Bear Arms related to self defense.  Hence the government does have a right to restrict personal ownership of larger and more destructive weapons of warfare.  

Even though we like to think our Constitution is a firm and clear document there is some ambiguity in there that needs to be worked out on a political level. 

Lastly it should be noted the amendment does not grant a right.  It simply restricts the government from infringing on what is viewed as an inherent right both from God and English Common Law.

I often here that people who cannot make their agreed upon mortgage payment have nothing to whine about.  That they are the problem, that if only they would get out of the way and suffer the pain we could get passed this mess. 

I understand that the so called Liar Loans and the Average Americans choice to live above their means while using the house as an ATM to finance a joy ride of consumer spending is a big part of the problem. 

No doubt this country and the people in it have a price to pay for our mistakes.

Those on the left used to Criticize Ronald Regan's trickle down economics as like being pissed on (when you where at the bottom of the pile).  In Regan's Trickle Down Economics it was prosperity coming down the line and nothing less.

This Bail Out is a Obama's Trickle Down Bail Out, and those not at the table are getting the other end of the deal while the fat cats continue to gorge themselves at the public trough.

I have never begruded a hard working man a life of luxury that he has earned.  Those Capitains of Industry and Finance I always felt deserved the honest rewards associated with leading this country into prosperity and producing jobs and capital to keep this economy running.

However, now that things are falling apart all around us are those Captains of Industry going down with the ship?  Are they in the hold working the pumps?  Are they seeing the women and children to the life boats first? NO! 

Today in this country thousands of John and Jane Doe's will loose a home.  Some will have had their modification rejected (often at the last minute and for no good reason and be facing a huge demand), some will have been refused the dignity of a short sale, others may have lost a job and just cannot keep up.  Some may deserve it in our eyes, others may not.

(Here is a Link to the Wall Street Journal Article that set off this Rant on the failure and abuse of the HAMP program.)

Often times these people will have to down grade and rent, many will have to move in with family or friends, others may end up on the street.  They have all had their credit ruined.  Home ownership is now hopelessly out of reach.  Their dignity has been stripped from them.  They loose all the memories and security of their families home.

At the same time many of those Captains of Industry and our Political Leaders that have been bailed out (and don't let them give you this BS about they have paid it back - they have used accounting gimmicks to funnel more money to them through the FED.) will be going home to nice luxury homes, with house keepers and gardeners, they will be eating fine meals in nice restaurants or prepared by their chefs. 

Many will lecture us on responsibility while they unload thier own real estate in short sales, and continue to live off the fat of the American People.  They may take a private jet to the Hamptons this weekend or Vale, they may Sail around or Ski while they discuss the American People like we are little more than statistics and cattle.

Some will meet with other World Leaders and sell us (out), like we are just another commodity on the world market.  Loving their peers of international Leaders more than their own people.

They see Leadership as about privilege, but Leadership is about Servant-hood.  Great Leaders put themselves at risk and love those whom they lead.  These people love themselves, and the privilege and luxury of power.

There is a Story in the Bible (Mathew 18:23-35) about a man who is forgiven a huge debt by his king, then goes out and sees a man who owes him a small amount.  He proceeds to toss the poor man in jail.  When the king hears of this he is outraged and the man with the huge debt is tossed into prison.

I believe there is a Judgment Coming.  I have often seen Judgment delayed, as our God is merciful and he desires repentance rather than punishment; but there is an accounting.

The average American needs to look at their own responsibility and and decide what they need to do.  It will be painful for all of us.  Although many of our leaders seem to have abandoned responsibility it does not excuse the average person from working to get back on track.  That does not mean we have to live our lives with the failure and guilt, but we do need to turn and get back on track.

From those who have been given much, much is expected.  I would hate to be in the shoes of many of our leaders.

In Twiddle Dumb and Twiddle Dumber - Part One I talked about reading Michael Lewis's book The Big Short and some of my opinions about the Stock Market and Big Corporations.

In Twiddle Dumb and Twiddle Dumber - Part Two and Twiddle Dumb and Twiddle Dumber - Part 3 I look at what went on in the Bond Market.

In Twiddle Dumb and Twiddle Dumber - Part Four I talk a little bit about Short Sales and options

In Part 5 I want to show how they Shorted Real Estate Bonds and what I think was wrong about what they did.

Michael Lewis makes the main characters in his book into Heroes and anti-establishment types.  Maybe they are and maybe not.

But in general all of these guys were smart and figured out that this pile of gold was really a pile of crap with gold spray paint.  They knew that the crash was coming. 

Knowing the crash was coming they had to figure out how to Short the Real Estate Mortgage Bonds.  What they ended up doing was buying insurance on the Bonds.  Every year they paid a small premium on the value of the bonds, just like every year we might pay a small premium in the event we die our family can collect a large sum of money to help with the financial loss of your death.

Sounds very legitimate, but there is a problem with this.  This guys did not own the Bonds they were insuring!  They had no interest in the bonds except to see that they failed. 

I come from an insurance background and one of the principals of insurance is that you have to have a vested interest in what you insure.  You have to have something at risk in order to insure it.  I cannot buy insurance on my neighbors house, hoping it burns down and I can collect what the house was worth!

What they did was called Gambling and I think it is regulated by the state and probably not legal!  However, us tax payers have kindly bailed AIG and the other Casinos out after they took their losses both on the bonds and the bets. 

What these guys did was like being doctors having access to patient records and buying life insurance without disclosing the medical conditions they had discovered. 

Some of these guys started with less than $200,000.00 and turned it into hundreds of millions, first by shorting and buying options (Legitimately) but the big score were these bets on the Bonds!  They were very smart men and they have certainly justified what they have done to themselves and many others.  Setting in their shoes I might have rationalized and done the same thing.

But you are Paying For It!

I do not have all the answers but next time I want to look at possible solutions.

In Twiddle Dumb and Twiddle Dumber - Part One I talked about reading Michael Lewis's book The Big Short and some of my opinions about the Stock Market and Big Corporations.

In Twiddle Dumb and Twiddle Dumber - Part Two and Twiddle Dumb and Twiddle Dumber - Part 3 I look at what went on in the Bond Market.

I do not claim an expert knowledge and some of you I have provided some really good points.  I do not object to links being posted in the comments if it relates and is not self promoting.

Tonight I want to get started on how the Shorted and won!

A short on a Stock is when you basically take the stock from someone at market price (they lend it to you) and agree to return it by some fixed point in the future.  So if you buy at $50.00 and you sell, then it drops in price you make money, if it goes up in price you loose money. 

Shorting a stock seems rather mercenary; but as I understand it it provides a safety valve and a way to hedge your purchases of stock.  I am at a loss as to why anyone would Loan his/her stock to another on a Short Sale, except I imagine there is a fee involved.

Some of the "Heroes" in the Big Short would buy options to purchase certain stocks in the future at a set price.  For example Stock ABC is currently selling for $25.00 per share and they get a contract to buy a 1000 shares at that price for the next year for $3.00 each or $3,000.00. 

When they buy the option they shopped companies they felt were having problems but would bounce back.  And by bounce back we are talking about companies whose price may have dropped by half and may double again when the problems are resolved.  With numbers like those above they only had to be right about 20% of the time to make a killing.  And they did make a killing.  Now if this is ethical or why it might be legal or necessary I will need someone to explain to me. 

The theory they were correctly operating under is the risk was 50-50, the company was going to tank or shoot up again.  The option was priced to low in relation to the risk.  Market pricing was not reflective of the risk or value.  I wish I had been smart enough to figure that out.

Next time Next time we look at how they "Shorted" real estate bonds - and why I think it was wrong!

In Twiddle Dumb and Twiddle Dumber - Part One I talked about reading Michael Lewis's book The Big Short and some of my opinions about the Stock Market and Big Corporations.

In Twiddle Dumb and Twiddle Dumber - Part Two I start looking at what went on in the Bond Market. I do not claim an expert knowledge and I am really looking for your feedback and understanding too.  This post picks up where #2 left off and they really should be read together.

• So where were the Rating Agencies that gave all these slices of the Bonds the good ratings.  Well if the news is accurate they were reading porn (or at least looking at the pictures).  But they really did not know or understand the issues and just trusted what they were told by the Wall Streeters putting the bonds together.
  
  These guys may be the Twiddle Dumbest!
  
  
• So how did they sell all those bottom tiers - the worst pieces of the pie that had a good chance of failing?
  
  HOLD ON!  Because if this was not such a tragedy you would laugh your ass off!
  
  They took all the bottom Tiers - The Crappiest of the Crap and repackaged them as new bonds - Cut them into new Tiers - Sold all the top Tiers as top rated bonds!
  
  Why were the top tiers of the Crappiest of the Crap rated so well? - Because they were on the top of course!  And the Rating Agencies gave it their blessing! 
  
  But what about those new Bottom Tiers - The Crappiest of The Crappiest of the Crap?  You got it!  We wrap them into a new bond and start over again!!!  And on and on the cycle goes!
  
  
• Now how does this keep going?  Well Wall Street is making tons of money and they need more loans to package - So the lending market has plenty of room to sell more crap.
   
  
• Not only that many of the early bonds are being paid off and making good money for people! Why?  Because the early crappy loans are refinancing into even crappier stuff! In the mean time every one from the lenders, to wall street, to the borrowers are living the good life.  The borrows get cash when the refi or they get a nice home they could not otherwise afford - EVERYONE WAS IN ON IT AT ONE LEVEL OR ANOTHER!
  
  
• So this crap is feeding the high prices in the housing market that is keeping the loan market alive.  It is one big Ponzi Scheme; but it can only go on so long.
  
  Eventually the housing market flattens out and starts down.  But the loan failure is still 2 or 3 years out on many of these things.  Like a run away train on down slope it starts slow but picks up speed fast until it hits bottom.
  

Next time I am going to explain how Some Wall Streeters sill managed to make money on this - and talk about if it was even legal!

In Twiddle Dumb and Twiddle Dumber - Part One I talked about reading Michael Lewis's book The Big Short and some of my opinions about the Stock Market and Big Corporations.  Some of you that think you know me ought to really see what I have to say.

In these post I want to try and explain what they were doing in the Bond Market and why it was bad.  I do not claim an expert knowledge and I am really looking for your feedback and understanding too.

Basically I think we all understand that mortgages get bought and sold after the home loan is made.  Well they took it one step further with the bond market.

• Mortgages were backed as a group and sold in bundles.  Basically you spread the risk around.  If you bundle a bunch of mortgages together and a few go bad it should not hurt too much.  Better yet small investors can buy a piece of this mortgage market. 
  
  To me this does not sound like a bad idea.
  
  
• However, as we have all heard about the Lenders were under pressure to ease lending standards.  As we all know a lot of bad mortgages were being made because the Feds wanted them made and the lenders were making money selling them.
  
  This should have been red flag # 1.
  
  
• When they package these loans into Bonds (and it may sound hard to believe) most people had no understanding of how bad they were.  Even if they knew there were some issues everyone just kind of had an attitude that mortgages had this history of performance that would dictate the future.
  
  Yes they all drove right by Red Flag # 1.
  
  
• Once the Bonds were bundled they then sliced the bond into tiers with different levels of risk.  Those that took the more sure pay off got lower rates and those with the riskier tiers got a higher right.  Apparently this is very complex with many pieces; but they took a pile of crap cut it into pieces and called the bottom crap and the rest cream.
  
  This is why I find it hard to believe no one understood what was going on.  Someone planned these tiers in detail.

By Now You are Bored and not Reading in Detail - Well Guess what that is how this problem happened people stopped paying attention and were just happy to be making money!

Take a break and I will pick this up in Part 3.

Yes World War One ends on Sunday!

I know you thought this thing was over on 11/11/1918; but that was a mere Armitice.  On Sunday the staggering bill put at the door step of the Germans will finally be paid in full (or at least the sum it has been negotiated down to). 

The German's have not always been prompt with the payments.  Things like the Great Depression and WWII got in the way (Wonder how they effected the German's FICO rating?).  I also wonder who made the payments when the country was split after WWII; sounds like one of those messy divorce issues.

Almost 100 years after the fact this all sounds a little funny.  I wonder if in 100 years we will have Headlines like this:

• Obama Recovery Finally Paid Off!
  
  
• China Give Pink Slip to US now that the Bill is Paid!
  
  
• First TARP Paid off - Wall Street says they just need a few hundred Trillion more to avoid default - After all they are too big to fail!