Enrico!

Enrico believes that a debacle in commercial real estate is going to unfold in the US over the next 12 months.

Commercial real estate was as overbuilt and bubble-licious as residential real estate. Banks made similarly stupid, absurd loans based on stupid, absurd valuations. The worst excess in residential real estate will undoubtedly beat the worst example in commercial, because, in residential real estate, there was rampant out-and-out fraud, with appraisers, lenders, brokers, borrowers, and everyone else you could name conspiring to make a stupid ridiculous lying loan.

However, the total dollar amounts of troubled loans in commercial real estate dwarf the magnitude of the problem in residential.

From time to time, Enrico will post examples of the unfolding disaster. Here’s the first one.

Enrico intends to live to be 160 years old.

He is currently 48 years of age.

He has made a brief, but thorough, study of this table which provides official FedGov statistics on the probability of death and remaining life expectancy for in-duh-viduals (and other US citizens of normal rational capabilities), broken down by age and gender.  Those broken down by sex will have to apply to another department for a prediction of their mortality.

Enrico inserted a new column in this table, to calculate the incremental life expectancy for males.  The results:  for males, the incremental life expectancy peaks at the increment between age 9 and age 10, when the increment in life expectancy is 1 year.  In other words, a 9 year old male is expected to live to be the same age as a 10 year old male (75.53 years of age).  So, the year of aging from age 9 to age 10 is free, it doesn’t come off the total clock.

Thereafter, each year, the expected age you will survive until increases by more than one year.\, but time comes off the clock.  Each year, your remaining life expectancy is a smaller remaining span.

If you live to be 103 years of age, your life expectancy is 104.64.  If you life to be 104, your life expectancy is 105.54.

The dominant cause of death for males is some variety of heart disease or cardio vascular disease, or cerebral vascular disease.  Stroke and heart attack are the main enemy.  Cancer is well up there.  If you beat diseases of the arteries and if you beat cancer, you’re doing very well.

Enrico is worried about his arteries, because he is a full figured gal.  He is hyper vigilant for technologies that will enable him to dratt arterial disease with impunity.

Recently, Enrico’s physician told Enrico that his girth, and his level of serum cholesterol, and his blood pressure, assured Enrico of an early grave.  Enrico’s doc urged manic consumption of statins, and several other substances, as a preventative measure.

Enrico was skeptical.  Did you know, there has never ever been a scientific study which has demonstrated a significant correlation between serum cholesterol levels and mortality?  Despite dozens of attempts to demonstrate this link?

The statins do clearly and demonstrably reduce mortality in patients who have already had a heart attack.  There is substantial evidence that statins reduce mortality in the general population, but the evidence shows that the reduced mortality effect is highly correlated to the probability that a given person suffes from arterial disease.

In other words, if you have arterial disease, by all means, take statins.

Enrico’s doc proposed a sonography exam which examines the thickness of the intima media, the interior wall, of the carotid arteries.  Allegedly, the thickness of the interior wall of the carotid arteries is a reliable proxy for the thickness of other arteries, and, allegedly, thickness of the interior wall of arteries is a reliable predictor of the build-up of placque in the arterial walls.  Definitively, high levels of placque in the arterial walls is eventually deadly.

Enrico’s arterial sonography revealed an arterial wall thickness which is correlated (allegedly) with low levels of arterial placque.

Enrico looks forward to an interview with his doc, in which Enrico confronts the doc with the paradox of the doc’s assurance of Enrico’s early demise and the results of the sonography.

Enrico told the doc that serum cholesterol levels are not correlated with mortality.  The doc asked Enrico where and when Enrico obtained his medical degree.  Enrico replied that he had earned no medical degree, but that he HAD learned to read, and that he had read the studies.  He asked the doc if HE had read the studies.  The blustering response, while unresponsive, suggests an answer in the negative.

You might ask, why does Enrico continue to employ a doc who possesses what might be regarded as a poor empirical capability?

Well, Enrico has learned, to his sadness, that the experienced level of empirical capability amongst docs leaves a great deal to be desired.  Enrico concludes that one might be better off finding a doc who is, admittedly, a victim of the medical profession’s herd mentality, but who is willing to consider the possibility that the herd might be headed in the wrong direction.  Enrico has been completely unable to detect a doc who is not a victim of the herd, and who is also not a complete wacko.

To the credit of Enrico’s doc, Enrico asked the doc why he had sent Enrico for a cardiac stress test, when it is completely obvious that cardiac stress tests are at best totally useless, and at worst, fatal?  Enrico’s doc said that he no longer utilizes cardiac stress tests, because he now realizes that they are in fact totally useless.

Good for him!

John Bott, the bond guy on KSEV here in Houston, just advanced the greatest.  theory.  ever.

Iceland gets tired of having to make amends for its bizarre failed adventure in being the financial hub of Europe.  The IMF declines to bail Iceland out.  The EC declines to bail Iceland out.

Left with no options, Iceland adopts the gold standard.

This move immediately has the same effect on other countries’ currencies as an approaching tidal wave has on a group of secretive skinny-dipping bathers:  the water retreats, and reveals who is swimming naked.

Sadly, EVERYONE is swimming naked.

Now, the IMF is BEGGING Iceland to reconsider, and is offering copious loans, if only they will renounce the gold standard.

Sportsfans, that’s how fragile this situation is.  If the Austin Powers movies were real life, and Dr. Evil was defrosted tomorrow, surely his henchmen would urge him to buy control of some obscure nation, and threaten to put that nation’s currency on the gold standard, unless the world’s big powers paid him one MILLLION dollars.

[cue embarrassed cough from henchmen]

Wow, did you see the surge in the yield of the 10 year Treasury note yesterday??  It closed about 3.7%.  Traders are calling “bullshit” on the FedGov’s redhot dollar printing press.  You can order the tide to go out all day long.  The tide doesn’t care, the tide is oblivious to your desires.

The ChiComs are worried sick about the brazen devaluation we’re conducting, but they are in a trap of their own making.  If they start dumping the debt, they will set off a landslide, and crush the value of their own position.  If they even pull back in their buying of US debt, they damage the value of their holdings.  As Donald Tramp says, when you owe the bank a million dollars and can’t pay, you have a problem.  When you owe the bank 100 billion dollars and can’t pay, the bank has a problem.

It appears that the Magic Negro’s attempt to steal General Motors and give it to his UAW friends has been averted.  Don’t exhale just yet, however, the Magic Negro still has the Navy, Army, Air Force, Marines, the Coast Guard, the FBI, the SEC, and the “Justice” Department, and he will have to resist the inevitable entreaties from the ratsocrat mob to just simply take it by force.

The Magic Negro has put awesome pressure on the holders of the senior debt, totalling about $27bn, to accept a LOWER equity stake in the post BK GM than the UAW, despite the fact that the UAW’s claims on the company are smaller than the senior debt, and despite the fact that the claims have the same priority under US Bankruptcy law.  The Magic Negro wanted to give the senior debt holders 10% and the UAW what eventually amounts to 20%.

That’s just theft, plain and simple, backed up by the implicit threat to deprive the senior debt holders of their rights by some kind of illegal presidential action.

The Magic Negro has NO LEGITIMATE ROLE in the bankruptcy proceedings of General Motors, unless he wants the FedGov to write a damn big check to give to the senior debt holders.

Stay tuned, though, sportsfans, because the Magic Negro still has until June 1 to deploy the jackbooted thugs to steal about $13bn from the senior debt holders.

It is reported that the N. Korean Troll Doll has conducted a successful underground nuke test.  Way to go, Fellatio Boy!  You gave the troll doll nukes!  What are you going to do now?

EDIT:  Enrico got this one wrong.  See comment.

Enrico defies anyone in the universe to advance a rational argument that Jennifer Granholm is more qualified for the SCOTUS than Robert Bork.  Since Robert Bork was rejected by the ratsocrats, and since Robert Bork is more qualified for the court than Jennifer Granholm, simple logic and fairness dictates that Jennifer Granholm must be rejected.  The ratsocrats must produce a candidate who is at least equally qualified for the court as Robert Bork was.

I suggest that Obama should withdraw Jennifer Granholm, and instead, nominate Robert Bork.  That would be just plain, simple fairness.

Enrico applauds Obama for increasing the fedgov’s CAFE standards, governing the average miles per gallon consumed by fleets of cars sold in the US.

This is such a freakin’ OBVIOUS move that it is just criminal it has taken so long to make.  This is the first increase in 32 years, for all love.  Enrico kids you not.

The world totally ABOUNDS with techniques for increasing the fuel economy of internal combustion engines.   And, the world is CRAWLING with well-demonstrated, prototype-ready slight twists on ICEs which are much, much more efficient.   AND (Enrico wishes he had a bigger font), the world is completely infested with radically different personal transportation schemes which are insanely more efficient than ICEs.

So, why, O why, have these highly prolific engineering feats not swept the ICE into the dustbin of history?  Or at least, goosed it up to the point where it doesn’t simply gulp fuel?

Economics, my dear reader, economics.  The auto manufacturers pwn the nickels and dimes of making the ICE.  They make them on a vast scale.  They are insanely cheap to make.  They can’t afford the loss of market share and profits that would arise from introducing costs others don’t have, even if those costs greatly increase fuel efficiency.

One of Enrico’s portfolio companies has a well-demonstrated technology which would increase the fuel efficiency of diesel engines by at least 10%, at a scaled-up cost of approximately $300 incremental per engine.  Enrico thought, when he invested in this company, that his proposition would be a no brainer for engine manufacturers to snap up.  He was sadly naive.

Enrico personally visited Caterpillar, and personally explained the economics and the fuel efficiency savings to very senior, experienced, wise engineers at the company.  The engineers totally agreed with the findings, and actually thought the fuel efficiency results would be even better than Enrico claimed.  But they also demonstrated to Enrico’s complete satisfaction that it was a non-starter in the marketplace.  Too much incremental cost.   $300.

There are probably thousands of stories like this.

The car manufacturers need the assurance that everyone else will be forced to introduce these miniscule additional costs in order to be able to sleep at night.

The only possible criticism of Obama is that he didn’t go far enough.  There’s no reason why cars can’t get 50 mpg on average, even sticking with the ICE.  But Enrico won’t criticize, nope, he sure won’t.

Let’s all decide we’re not going to buy oil from our enemies, ever again.

The list of Obama’s reversals from postures he struck during the campaign is already long, and is growing daily.  Gitmo, military tribunals, rendition, wiretapping:  this is just a partial list of the residue of Obama’s sojourn in an unfamiliar land, the land of reality.

Enrico applauds Obama for changing his mind when confronted with the facts, but he thinks, in fairness, there ought to be a general recognition that he apparently had a lot of misconceptions about the nature of the world prior to his election.  It stands to reason that we are yet to discover the full scope of his misconceptions.

The co-Prince of Darkness writes a pretty accurate piece today in the WSJ.  He too applauds Obama for recognizing that he got it wrong during the campaign.  Surprising!

Ken Langone, the founder of Home Depot, is on CNBC right now delivering a richly deserved bitchslapping to the whoremonger Eliot Spitzer.

Spitzer went after Hank Greenberg and Dick Grasso for purely political reasons, because they were big, visible power brokers, and because Eliot Spitzer, who is about as evil a dude as has ever graced a podium, believed that knocking off giants would enhance his career.

One only has to look at where AIG has gone since Hank Greenberg was chased out to see that Hank was doing a magnificent job.   The impoverished shareholders of AIG ought to be allowed to take an ounce of flesh nearest Spitzer’s heart (if he has one).

Dick Grasso did nothing wrong.  He, and the NYSE, won in court.  Apparently, the whoremonger was on CNBC recently to claim that Grasso got off on a technicality.  Really, whoremonger, hows stupid do you think we are?

Ken Langone was on the NYSE’s compensation committee, and he was notably outraged by the whoremonger’s baseless charges.  “Baseless,” that’s how the New York appeals court described the whoremonger’s allegations.

The gall of the man, to show his face in public, to even talk about running for office, is staggering.