Monthly Archives: April 2007

Is the Melamine in my Chicken Feed?

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There is a certain amount of irony in the fact that people in this world are burning perfectly good corn for heat and putting coal products into feed. From a New York times article….

For years, producers of animal feed all over China have secretly supplemented their feed with the substance, called melamine, a cheap additive that looks like protein in tests, even though it does not provide any nutritional benefits, according to melamine scrap traders and agricultural workers here.

“Many companies buy melamine scrap to make animal feed, such as fish feed,” said Ji Denghui, general manager of the Fujian Sanming Dinghui Chemical Company, which sells melamine. “I don’t know if there’s a regulation on it. Probably not. No law or regulation says ‘don’t do it,’ so everyone’s doing it. The laws in China are like that, aren’t they? If there’s no accident, there won’t be any regulation.”

All I can say is that I hope none of my chicken feed comes from China.

Car loans: the next sub prime crises?

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This is taken from a Washington Post article…

Car valuations matter because an increasing number of consumers are “upside down” on their auto loans, meaning they owe more than the car is worth. In the first quarter of 2007, 29 percent of consumers were upside down on their vehicles, Kelley Blue Book reports. Additionally, on average, people traded in cars on which they still owed more than $3,600. And what do many of these buyers do with that loan balance when they want another car?

They roll that negative equity — the $3,600 and often much more — into yet another vehicle loan.

A lot of this insanity stems from the Big Three pushing their product. As the Washington Post article says in another place….

Increased pressure on automakers and dealerships to sell vehicles over the past few years has led to more car loans being made to riskier borrowers. Auto dealerships originated $50 billion in new-vehicle loans to subprime borrowers last year, according to retail data from the Power Information Network (PIN), a division of J.D. Power and Associates, a marketing research firm.

To make the loans work for many of these subprime borrowers, who typically have shaky credit, the lenders are offering longer payment periods. New car loans lasting more than five years in 2006 accounted for nearly 55 percent of loan originations, according to the Consumer Bankers Association.

Subprime vehicle buyers, those with credit scores below 650, have loans that last an average of 61 months, compared with 56 months for more creditworthy consumers, PIN found. Higher-risk buyers also tend to make lower down payments as a percentage of the purchase price, paying about 11.6 percent compared with 17.4 percent for other buyers.

Essay of the Week: 4/29/07-5/5/07

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One of the reasons that I highlight an essay every week is that you learn very little by reading news stories, short blog posts, and the other typically short pieces that we read on a daily basis. I think that this is true even if all those short pieces cumulatively contain the same information that we might find in a long piece. A coherent whole just has a bigger impact than disparate pieces scattered throughout time.

I bring this up because I think most people who keep up with the news have a vague awareness of most of the facts in this week’s essay. But I think that those facts get lost in all the stories about China’s growing commercial clout. Thus, I think that Guy Sorman’s indictment of China is well worth reading because it forces you to confront what would otherwise get lost in the shuffle.

I should note that for some reason they stuck a sidebar on Hong Kong right in the middle of the essay. I find that highly annoying. Just scroll right past it and the essay will resume.

To take away guns, you must take away freedom.

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I want to make it clear that I am not one of those who think that an armed populace is a guarantee of freedom. Moreover, I believe that an unarmed people can be free. But I do not believe that America can be made free of guns with out giving up any pretense of being a free country. A gun control advocate makes that point better then I ever could…

The disarmament process would begin after the initial three-month amnesty. Special squads of police would be formed and trained to carry out the work. Then, on a random basis to permit no advance warning, city blocks and stretches of suburban and rural areas would be cordoned off and searches carried out in every business, dwelling, and empty building. All firearms would be seized. The owners of weapons found in the searches would be prosecuted: $1,000 and one year in prison for each firearm.

Clearly, since such sweeps could not take place all across the country at the same time. But fairly quickly there would begin to be gun-swept, gun-free areas where there should be no firearms. If there were, those carrying them would be subject to quick confiscation and prosecution. On the streets it would be a question of stop-and-search of anyone, even grandma with her walker, with the same penalties for “carrying.”

The “gun lobby” would no doubt try to head off in the courts the new laws and the actions to implement them. They might succeed in doing so, although the new approach would undoubtedly prompt new, vigorous debate on the subject. In any case, some jurisdictions would undoubtedly take the opportunity of the chronic slowness of the courts to begin implementing the new approach.

You can read the rest here. The man is a member of the editorial boards of the The Blade and Pittsburgh Post-Gazette. (h/t Pierre Legrand)