Watching television news can be depressing. If we’re not hearing about roadside bombs, lying politicians, child molesters, or global warming, news anchors quickly remind us of soaring gas prices, a slumping economy or sub-prime mortgage foreclosures. What’s a person to do? For gentry or plebeian alike, there is perhaps only one road toward the restoration of sanity; sports!

Tomorrow, March 31, 2008 is one of the most glorious days of the year; opening day for Major League Baseball. The Twins open with a night contest against the Angels, their last year at the Metrodome before christening their new ballpark in 2009. The Cubbies open at 1:20 p.m. against the Brewers at the friendly confines of Wrigley field. Virtually all major league teams open on Monday.

On opening day hope springs eternal. Winning the pennant is well within reach; what the heck, going to the World Series is all but assured on opening day! Your team is in first place; undefeated! The new players arriving from the farm team are all future Hall of Famers! None of your pitchers will have to undergo Tommy John surgery; they’ll be throwing endless 97 mph fastballs all season long! Your ace closer will throw changeups so nasty that opposing batters will look like fools.

Some believe that sporting events are meaningless and that our society puts far too much emphasis on games. To be sure, there are smudges on the sporting world such as steroid use, thrown boxing matches, corked bats, and soccer thugs. But, for countless people from Miami to Madrid, loyalty to a sports team routinely yields tremendous amounts of personal satisfaction during a season. Sports gives people something to look forward to each day. Many lasting friendships develop in the context of sports, either as participants or as fans. Families grow closer through sports, whether it is the bond between a soccer mom and her children or the fond memory a man has of the time his now deceased father took him to see Harmon Killebrew play at Metropolitan stadium. As I write this blog a bunch of students from Winona State University are returning to Minnesota on a cramped bus from Springfield, MA having witnessed their men’s basketball team win its second NCAA division II basketball championship in three years. Once again, sports has served to bond people together.

In my final hours, should I have the luxury of looking back on my life, I’ll recall the day I took my daughter Tara to Lambeau field to celebrate her 21st birthday. I’m pretty sure she will take the same experience with her. Each of my readers can probably recall an experience with family or loved ones, shared at a sporting event, absolutely stuffed with indelible memories.

Before getting into this week’s blog, let me wish all my readers a wonderful and meaningful Easter!

In February, 2006 Bear Stearns, the New York investment brokerage firm, approved a bonus pool of up to $305 million for 13 staff members, or more than $20 million each. That same year Lehman Brothers disclosed that it would pay its average employee $335,441 on net income of $4.0 billion. That was fine with me. I figured that these big boys were capitalists of the first order and that those fellows on Wall Street must have earned their keep to receive salaries and bonuses like that.

This was the same time that bankers were processing sub-prime real estate mortgages in large numbers. These loans included low “teaser rates” for the first three or five years, with higher interest rates later. Many of the mortgages were processed as “no doc” loans, meaning that the borrowers weren’t required to document their income, assets, or liabilities to gain loan approval. These “no doc” loans later became known in the industry as “liar loans”. Some of the loans were made for as much as 120% of the appraisal values, which had been rising steadily for several years.

Assuming that housing prices would continue to rise at 6-10% every year and assuming that refinancing would be available at low, fixed rates before the “teaser” rates morphed into their previously disclosed higher rates, homeowners just might come out all right. The problem with assumptions is that they don’t always work out. Many of the borrowers were naïve folks who were just trying to get into their first home or were attempting to move into larger homes they couldn’t afford. However, there were also large numbers of speculators who bought several properties, hoping to ride the “equity wave” a couple of more years and sell the homes at a nice profit. In the end, it really didn’t matter; these were risky loans made to unqualified borrowers, by lenders who should have known better.

The mortgage lenders, whether they were large national outfits like Countrywide, internet lenders like DiTech, or your local banker down the street, were basically middlemen, who sold the mortgage loans to investment banking firms like Bear Stearns. Bear Stearns “packaged” these home loans into mortgaged-backed bonds, which were sold to large banks and other institutional investors. These “hedge funds” don’t actually limit risk, but through the use of short selling and other derivative contracts may actually increase risk of default. Hedge funds also charge high fees and can be extremely profitable to firms like Bear Stearns. After some time, hedge funds represented up to 30% of the portfolios of large banks and institutional investors throughout the world. During these “good times” firms like Bear Stearns and Lehman Brothers made billions in profits from these funds, enabling them to pay large bonuses for key employees.

Now matter how well you dress up a pig, it is still a pig. Hedge funds were crappy investment vehicles with a high default risk. As home loan teaser rates expired and mortgages cycled into higher interest rates, borrowers tried to refinance their homes, many of which had actually gone down in value. As people started to default on their house payments, hedge funds faltered. Holders of sub prime backed securities started to lose money. The big guys like Bear Stearns were running out of cash and their large institutional customers were finally reaping their well-deserved losses. Between January and March, 2008 Bear Stearns stock fell from $90 a share to $2.84 a share. On March 17, 2008 Bear Stearns was purchased by JPMorgan Chase for a mere $2 per share, but not before the central bank of the United States Government, the Federal Reserve System, agreed to guarantee up to $30 billion of Bear Stearns’ lousy securities for the benefit of JPMorgan.

By opening its discount window to JPMorgan, the Federal Reserve System (the Fed) started a new precedent. Prior to last week, the Fed opened its discount window only to banks. For the first time in history, the discount window is now open to investment banking and brokerage firms. In essence, the Fed will now allow shaky and irresponsible investment bankers to exchange their bad loans for cash. The Fed might as well be accepting cereal box tops as collateral from some of these investment bankers! By monetizing the bad loans of investment bankers, the Fed will create either inflation or higher interest rates, the costs of which will be paid by taxpayers and consumers.

A huge moral hazard problem has been created. The large investment banking houses have been given tacit permission by the Fed to act irresponsibly anytime in the future, knowing they will always have the Fed to buy their cruddy loans. The mega banks are free to pay high salaries and extravagant bonuses during the good times, but are conveniently insulated from losses during the bad times. That’s not my understanding of Capitalism.

The Capitalism I am familiar with is the best economic system on the face of the earth. People and businesses are free to take risk, make investments, and even to invent new financial products, with the understanding that they will reap the profits or losses inherent in their activities. When you serve consumers well and provide them with a superior product or service at a reasonable price, you stand to make a profit. When you’re stupid and offer inferior products or services, you’re supposed to suffer losses, even to the extent that you lose your business and fortune.

If my businesses suffer losses, I don’t think that we will be able to get a loan at the Fed discount window. These days, I guess Capitalism is just for the little guys.

Barring unforeseen circumstances, John McCain will be the Republican candidate for President in 2008. The Democrats have created such a mess with their handling of Florida and Michigan delegates that we will probably have to wait until this summer to find out whom will be their candidate in the general election. Hence, there are only three major candidates still in the presidential fray; Clinton, Obama, and McCain. I know who’s going to receive my vote for President of the United States in November, 2008.

Hillary Clinton is an intelligent woman. She is as qualified to be President as many who have occupied the white house, but I won’t vote for Hillary because she’s such a plastic phony. I remember that evening on national television when Bill confessed to his problems with Monica Lewinsky and Hillary stood by his side. She told the American people that she was no “stand by your man” Tammy Wynette type. Sure, Hillary. Everyone knows that you rode Billy’s coattails to the Governorship of Arkansas and to the Presidency of the United States so that you could fulfill your political ambitions.

When asked about her marriage in an interview on October of 2007 Hillary responded; “I know the truth of my life and of my marriage, my relationship and partnership, my deep abiding friendship with my husband. It’s been enormously supportive to me through most of my life.” If you carefully read those words it sounds more like a description one person might make about another prior to establishing a Limited Liability Corporation! Funny she didn’t mention the world “love.”

I would vote for a female president. I’d vote for a woman like Condi Rice in a heartbeat, but not a frigid, conniving fake like Hillary Clinton. Contrary to what many people think, if Hillary is elected it won’t be the end of the world. She will have an ex-president for a confidant and advisor, and not a bad president at that. I’m only worried if Hillary gets the famous 3:00 a.m. call because Bill will most likely be somewhere else!

Barak Obama is a phenomenon; something just short of a religion. He’s the best orator in a presidential race since John F. Kennedy. No one can say so little so well! People really like this guy; he’s the “unplastic”, the “unHillary.” Not since Ronald Regan has a candidate for president had as much Teflon attached to him as Barak Obama. Guys like Jesse Jackson and Al Sharpton are confrontational racists who assume that all white people are bigots. They stand there with their hands out demanding reparations for their “victim” constituents. Barak is not of this ilk and I’m proud of him for that. Barak doesn’t believe that all white people are out to get the black man. He believes that good people can work together for a brighter future without degrading each other.

Obama’s lack of experience doesn’t scare me, but his propensity toward socialism does. I can’t vote for someone who still believes that more money will cure public schools or that more government will improve the quality of health care. Once in a while Obama will say something brilliant that gives me a shred of hope. Recently, when asked by a black voter what he was going to do about all of the Mexicans taking black jobs, Obama told the gentleman that blaming Hispanics isn’t the solution; that the lack of skills and education is the real reason for high black unemployment rates. In my heart of hearts I hope that Barak is merely faking his socialist tendencies until he gets elected, at which time he will instantly think like a free-market University of Chicago Economics professor! Despite my fantasies, I just can’t pull the handle for Obama in 2008.

John McCain is a war hero and true American patriot. I deeply respect him for his service to this great nation. His age isn’t an issue for me. I’m glad he doesn’t bow down before fundamentalist Christians in Alabama who kiss poisonous rattlesnakes at their worship services. If McCain has to be a Republican, at least he’s not going to waste a lot of time trying to block stem cell research or repeal Roe vs. Wade.

But doggone it, McCain has been in the Senate since 1986. In that time period I’ve seen federal government expenditures rise from one trillion dollars to over 2.5 trillion dollars. The US public debt has risen from $3 trillion to $9.3 trillion dollars. I remember the old days when the Republicans promised us a smaller government. I soon realized that both parties would grow the size of government, but hopefully the Republicans could be counted on to grow it more slowly that the crazy spend-nutty Democrats. Today’s so-called Republicans are worse than the Democrats with respect to spending. McCain, my friend, while you are not solely responsible for the bastardization of the Republican Party, you have been in Washington for over twenty years, mister. You’re judged by the company you keep; you’ll not get my vote for President.

So who will get my vote as President on November 4, 2008? I’ll vote in November, you can be sure. Too many men and women have lost their lives in our armed forces defending my right to vote. I’ll head to the polls on Tuesday, November 4, 2008 to honor their sacrifice for all of us. I’ll vote for a congressional representative, I’ll vote for mayor, and I’ll vote for a city council representative. County judges will receive my vote. But this time, for my first time ever, where it says “President of the United States,” on the voting machine, I’ll not be pulling the lever for any of these three jokers.