Tuesday, August 28, 2007

The credit crunch

If I were smarter,or a better business observer,I would have predicted the housing/credit crunch two years ago.
Two winters ago, we spent a few months in Miami Beach.Each day we would walk blocks and miles and observe the new condos being built.We inspected many of them,as we had an interest in purchasing a property.The prices were off the wall,and we were told that individuals(speculators) were buying multiple apartments for resale when construction would be completed in 2-3 years.Sheila and I commented many times to ourselves, that it was hard to envision all these thousands of apartments being sold, unless S. Americans or Europeans enjoying a falling dollar were the clients.
Subsequently I read about some of those who were the speculators,using letters of credit and minimal downpayments for the apartments.Today of course they are running away from their promises.
Last year,each and every day (sometimes as often as three times a day),we received cold calls from mortgage companies.Each one sounded like a used car salesman.They always asked two questions.
1-would I like a cheap mortgage?
2-would I like to borrow extra cash with the mortgage?
When I told them they would have to beat my current mortgage on our Boynton Beach home,with no gimmicks ( interest only etc,) they quickly lost interest.
As to the extra cash, I told them (facetiously)that I would be happy to lend THEM cash.They were not amused-and promptly hung up.
It is sad to see individuals facing the loss of their homes.
The first rule of capitalism is that individuals must take responsibility for their decisions.Any type of approach to alleviate the problem, must not reward the unscrupulous mortgage lenders.To bail them out would allow them to repeat their attacks on the sub-prime borrower.If they falter,they should be prevented from engaging in this industry.
Nevertheless,perhaps, some approach by government whereby defaulted homes would be placed in some sort of bank or government pool,and those homeowners who want to work out payment to this body at a normal interest rate could do so.Thus many Americans could save their homes.The problem of course is not only the ability to afford a mortgage,but paying for a $300,000 mortgage on a home, now worth $250,000.However in time once the housing and credit market level off,home values will go up.
Not everyone can be helped,but again I emphasize that there should be no bailout of the unscrupulous elements in the industry.
I an neither an economist or financial maven,but with the housing industry comprising only 5% of our economy,and with both the US and world economies in good shape,I sense a psychological warfare against the consumer and investor to create a sense of gloom in order to get the Fed to lower interest rates,to save the millions and billions of poor investments .

Sunday, August 26, 2007

The Islamization of Europe.

I appreciate my son Elli blogging for me while I was on a Baltic cruise.
One of the topics that I covered during my lectures on Kosherica's cruise, was on the challenges of radical Islam .Certainly much has been written about the changing of the face of Europe,and the dangers the West faces in this battle ,which we appear to be losing.One of the sources that I quoted was a book published a year ago LONDONISTAN.
I have tried to keep up with not only the news,commentaries and pubications on the European-Islamic dynamics, but nothing prepared me for the culture shock of my 1 1/2 days in London at the conclusion of our trip.
I have visited London an a number of occasions,and always noted the Middle-East influence .We stayed at a hotel at Heathrow,and took the Undergroud,to get into the city and public buses within London.This time it was quantitatively different.
The huge numbers of Women totally clad in black from head to toe was shocking.Huge families travel together,mostly speaking some non-English Arabic dialect.A visit to Harrods, and Selfridges,found the store occupied by perhaps 50-60% easily identifiable Muslims and middle eastern types. It was the first time that I hesitated to wear a yarmulke in public,and wore a baseball cap.
Of course I cannot tell who are visitors,and who are living permanently in England.The scene at Heathrows.simply duplicated our impressions from within the city.
The Arab /Muslim influence is great and the impresssions gained seem to fortify the published works, that indicate that barring some unforseen halt to immigration,a reversal of the low birth rates of white Europeans,or a civil war in Europe,the Islamization of Europe is proceeding rapidly under the eyes of the helpless Europeans.

Saturday, August 18, 2007

Vice Presidential Picks

In general I think trying to predict who the Vice Presidential picks will be (especially 5 months before the Iowa caucus) is a fool's game. This is especially true when one takes into account the recent history of vice presidential nominees- who would have predicted Geraldine Ferraro? Lloyd Bentsen? Dan Quayle? Jack Kemp? Joe Lieberman? Each was a surprise pick. The RealClearPolitics blog (the best political website on the internet) posted a list this week of the possible vp nominees in each party. In my mind, however, each party has a clear frontrunner. For the Democrats, with Hillary dominating every national and state poll, she will likely look to the second place finisher, Barack Obama, in order to unify the party and put forward the party's strongest ticket. Even though Obama has begun to show his inexperience with a series of bizarre policy statements (i.e. he would invade Pakistan as President, he would ruled out using nuclear weapons as President (he then quickly changes his mind), he would meet with the leader's of all the rogue nations), nevertheless Hillary would be under tremendous pressure from the black community to pick Obama.
On the Republican side, the frontrunner for the vp pick has to be Mike Huckabee, the former governor of Arkansas. His second place showing at the Ames straw poll is evidence that people have taken to him. He is a southern conservative who has performed exceptionally well in the debates (his answer at the June 5th debate to a question on evolution is the best and most eloquent answer I have ever heard given at a debate- check it out on YouTube). He would even out a ticket with a Northeast moderate such as Rudy or Romney. My one caveat is that I need to find out a little more about his policy beliefs- his depiction in today's Wall Street Journal as a candidate with some unconventional beliefs does give me slight pause. While Huckabee has very little chance of taking the presidential nomination (with little money or name recognition), it seems as though his run has put him in good position for a place on the national ticket.
As an aside, while I try to rarely read The Jewish Week (because I find paper leaning too far to liberal Judaism), it never ceases to amaze me how shallow their political reporting is. In this week's Jewish Week, their piece on Huckabee on page 3, reads more like a propaganda article from the National Jewish Democratic Council and less like the balanced reporting which belongs in a non-partisan Jewish newspapaper.


Thursday, August 16, 2007

Karl Rove/NBA/NYC Arabic School

As announced in the Wall Street Journal this week, Karl Rove announced his resignation from his White House position. There is no doubt that Rove possesses one of the great political minds of our time having led the Republicans to election victories in 2000, 2002 and 2004. Clearly he shared some blame for the loss of Congress in 2006, but much greater blame goes to the Republican members of Congress that allowed increased spending and corruption to be their main accomplishments. If one doubts Rove's genius, one can only point to the vitriol that is constantly directed his way by Democrats; no Republicans ever waste their time attacking Bob Shrum, the Democratic strategist that went zero for eight in elections. Rove's presence in the White House will be sorely missed.


There was a time that I loved watching the NBA. Today, however, the NBA has become virtually unwatchable with players that are unskilled in basketball basics (such as shooting and passing) and TV coverage on ABC that is awful. However, as bad as the NBA has become, nothing could have prepared fans for the referee gambling scandal which has shaken the league. Nobody at this point knows how many referees are involved or of the scope of the problem. The referee, Tim Donaghy, pleaded guilty yesterday to a variety of felonies and admitted to helping people gamble on games for five months this past season. We may never know the truth as to what happened. What we do know is that the NBA was caught sleeping at the wheel- the league had no idea they had a problem until the FBI notified them at the end of the season. In order to save the league, big changes need to occur- the first is the resignation of David Stern who is ultimately responsible for the downturn of the league.


I would like to meet the person who thought an Arabic themed school in New York City(in which Arabic culture is taught- whatever that means) was a good idea. The school has certainly allowed for some entertaining moments as the original principal defended "Intifada" t-shirts and then watched herself get roasted in the newspapers until she had to resign. Next comes the new principal, an Orthodox Jew. The best thing that can happen at this point is that the school will be closed and we can all forget this poorly conceived experiment.


Monday, August 13, 2007

Republican Presidential Update/Governor Spitzer

With Hillary Clinton pulling away from the rest of the Democratic pack (her average lead in the national polls is now 20 points), it appears that the only competitive national race is going to be with respect to the Republican nomination. Of course, how competitive the race is actually going to be remains to be seen. The mainstream media has been predicting that Guiliani's lead would disappear as soon as Republicans learned of his some of his social views. Yet, Guiliani's lead has stayed strong for the last 9 months and currently stands at about 10 points over his nearest competitor. Can any of the other candidates make a run at Rudy? My belief is that Fred Thompson has waited too long to get into the race. This hesitation on the part of Thompson raises the question as to whether he has the hunger to run a committed campaign. His organization is in disarray and his fundraising has been disappointing. It is doubtful that his entry into the race (which is expected to happen in September) will effect the polls that much since his entry is now expected. It looks as though the only candidate that could threaten Rudy is Mitt Romney. His position in the latest polls has improved markedly (he was even second in a recent poll) and he was certainly helped by his win in the Ames straw poll. But I question his strategy of putting all of his marbles in Iowa and New Hampshire. In previous years winning Iowa (see Bob Dole in 1988) or New Hampshire (McCain in 2000) was no guaranty of success and this year, with the primary season compressed into a very short time period, candidates will need to move beyond Iowa and New Hapshire rapidly. Guiliani with his broad support and large national lead seems to be in good shape. The Republican frontrunner rarely loses its lead (it hasn't happened in over 40 years) and doesn't seem likely this time around.

It appears that those who feared a Governor Spitzer would act in the same over-the-top fashion that he exhibted as attorney general have been proven correct. The Spitzer administration's attempt to bring down Joe Bruno by misusing state troopers and planting stories with a newspapaer is nothing short of outrageous. It remains remarkable that the governor's people believe that by claiming that have cooperated with a sham investigation conducted by the Attorney General that suddenly their bad behavior would be excused and forgotten. The best strayegy with dealing with scandal is to get all of the bad facts in front of the public as soon as possible. Instead the administration has chosen to delay disclosure (by allowing two top aises to not testify) and instead allow the disclosures to come out in drips and drabs. This assures that the scandal will drag on for months. For a governor that assured the public that everything would change on day one, it appears that this adminstartion believes in politics as usual. If Mayor Bloomberg were smart, he would rejoin the Republican party, stop thinking about an absurd run for President and run against Spitzer in 2010.


Tuesday, August 07, 2007


Under ideal circumstances,I would like OUR next President to be a moral and outstanding citizen who would act as a moral compass for our youth.This of course would be in addition to his/her understanding the issues as I do.Political courage,leadership etc are what I would hope for.
The world is less than perfect(of course that includes me!)and as we start getting into the campaign, we have to to seperate that which is vital,to that which perhaps to use the vernacular,I would have to hold my nose in order to support the candidate.
This is no ordinary election.The war against Islamic fundamentalism,dwarfs every social issue.There is little margin for error.
To me the Democrats have forfeited their claim as being strong on security/defense.Their whole conduct in the wire-tapping and Defense budget issues, clearly show, that their eyes are in left field on the Kos and Co. bloggers.Even Hillary,who I thought because of her Armed Service Comm service ,would maintain a middle of the road approach,is running scared to the left.Surely,she will turn toward the center after she sews up the nomination.But can you trust what she says?
To me, the choice of Rudy is a no-brainer.Honestly, I was waiting to see if Newt would get into the race.Thompson,has been a disappointment,both for lack of substance and for campaigh mismanagement.
Rudy,has been consistent,and above all,HE GETS IT!
The two issues of security and the US-Israel relationship which to me trump all others,find Rudy in a class all by himself.
We remember his returning the Saudi Princes' check after 9/11, and his old heaveho for Yassir .His accomplishments in making NYC governable,portends well for a Guliani administration.
Rudy is on the right path with taxes,the economy and health care(which so far is not totally thought out).
Abortion,gun control are all secondary issues as we face existential issues.Similarly his personal life,certainly raises many questions.However, if we look at Roosevelt,Kennedy,and Clinton of our modern Presidents,these issues are not new.
Certainly,I would rather have Rudy as he is,then a weak President who has had a perfect personal family history.

Monday, August 06, 2007

The growing Haredi influence.

Much has been written about the demographics of the haredi population growth.The truth is that long after secular and Reform/Conservative Jews have seen the assimilation of their second,third and subequent generations,the Haredi world will continue,despite poverty to make up for the population losses of the former community.
That is why the exclusion of Haredi and Yeshivish leaders in recent hi-powered conclaves on the future of the Jewish people is a great error.
In truth there can be no future for our people without a Torah way of life.
Having said that,does not mean that we have to kowtow to Haredi demands in two specific areas.
1. Today, 10% of the Israeli population is "ultra-orthodox/Haredi".Yet,as more students leave the State sponsored religious schools,23% of first grade Israeli pupils attend Haredi schools.Parents,are interested in the security of the schools,the Hashkafah-or philosophy that rejects the MTV culture sweeping Israel and so on.Yet since these schools receive State funding, there is no reason in the world,why these schools cannot be forced to teach the basics of a secular curriculum ,including computer technology and its use.
Absent these courses,they should be prohibited from State funding.

I recall a number of years ago,when my friend Prof. Yaakov Neeman was Finance Minister.He made a presentation to a small group at the Jewish Agency ,with slides,graphs and charts.The bottom line,was the economic drain on a small State(Israel) by a growing cadre of uneducated, and unemployable young men on welfare
because they lacked proper training.The bubble of rich parents supporting children,then grandchildren who marry and have many children on their own ,and so on,will surely burst.
2.This brings me to my second point.One quarter of 18 year olds in Israel do not volunteer for the Army.One half of those are Haredi.This drain on manpower is not only dangerous, but brings the Torah Community to ridicule.
Not all these Yeshiva students, are worthy of deferment.Those in the calibre of Daayanim(Judges) educators and so on should be deferred.
The State should designate x number of deferments.A national exam would be given in addition to considering the learning level of the applicant.Those top students will be deferred with State stipends.The rest have a choice of military service,or community service/learn a trade for 3 years.There is no reason they cannot sit in a Bais Medrash at nite and continue their learning,as they serve their fellow citizens.