Profiles in Principled Liberalism

Fealty to principles versus the grasp of power to control and mold the hoi polloi?

Ultraliberal advocacy organization Common Cause in 2005 on the subject of Democrat senators possibly using the filibuster to block Republican Bush’s judicial nominees, via per Jonathan Alter at The Volokh Conspiracy (link) by way of Instapundit:

Common Cause strongly opposes any effort by Senate leaders to outlaw filibusters of judicial nominees to silence a vigorous debate about the qualifications of these nominees, short-circuiting the Senate’s historic role in the nomination approval process.

Ultraliberal advocacy organization Common Cause in late 2010 on the subject of Republican senators possibly using the filibuster to block Democrat Obama’s judicial nominees, via same source as above:

the filibuster of judicial nominees threatens to “cripple our federal judiciary”

You can’t make his stuff up.

For some, truth is not about consistency to principles or even reality but rather about whatever serves to advance the Cause.

John M Greco

Chrysler Boasts that Its Cars Are Made by Detroit Union Workers. Yes, That Detroit, Those Workers.

I’m not making this up. Honest.

In a very slick and undoubtedly very expensive commercial aired during yesterday’s Super Bowl game, car-maker Chrysler boasted that its cars are made in Detroit. The tag line is “Imported from Detroit.” Yes, that Detroit. Made by those very same union workers notorious for their unique world-record-breaking ability to combine extremely high pay with extremely low quality. Made by those same workers who, along with fellow residents of similar mentality, have turned Detroit into a lower-rung third-world city right here in America. Oh yea, those are just the people I want to make the next car I drop $30 grand to buy. Sure.

Chrysler is of course now mostly owned by the unions after it was stolen from its creditors in an ersatz bankruptcy by Obama and given to them in one of the most egregious examples of political thuggery in American history. Then Obama gave Fiat what was left with the directive to work with the unions to try to make something of the corpse, no doubt to be aided with more money from Obama down the road.

The union brain trust thinks the way to induce me to buy one of their cars is to remind me, to emphasize to me, that their cars are manufactured by Detroit union workers. Of course, instead they should be doing everything they can to trick me into believing that Chrysler cars are made by someone else – anyone else. These union owners are either much dimmer than anyone had previously imagined or are certifiably delusional, and are likely both.

John M Greco

Some related posts:
The Obama Chrysler Confiscation – One Year Later
Obama-run General Motors Guilty of “Elasticizing the Reality of Things" about Repaying Its TARP Loan
Obama, the Car Companies, and the Rule of Law
Detroit's Population Crashes as Ignorant Residents Flee the Liberal Paradise

Remembering Ronald Reagan, at 100

Today we celebrate the 100th anniversary of the birth of one of America’s and Illinois’ greatest sons – Ronald Reagan.

He was born 100 years ago today in Tampico, Illinois, and grew up in various places in the northern part of the state, attending high school in Dixon and finally graduating from Eureka College with a degree in economics and sociology.  After working in radio broadcasting "live" Cubs games from a studio in Iowa, Reagan moved to California to become an actor, becoming perhaps best known for his film portrayal of Notre Dame football player George "the Gipper" Gipp in Knute Rockne, All American.  He was president of the Screen Actors Guild, became a Republican (“I didn’t leave the Democratic party – the Party left me”), served as governor of California for two terms, and was twice defeated for the Republican nomination for president.  Then in 1980 he tried for a third time, and won at last.  He became president of an America humiliated by the Iranian hostage crisis, fearful of aggressive communism, unnerved by rampant inflation, dazed by the Carter Administration, and apprehensive about the future. 

Larry Kudlow, who as a young man worked in the Reagan Administration, recounted the Reagan legacy on his show the other day:

Ronald Reagan saved America. Ronald Reagan saved the world. His economic policies of low tax rates, light regulations, and a king dollar, vanquishing inflation, firing the striking air traffic controllers, and limiting domestic spending – all that basically launched a 25 year economic boom and rescued us from the malaise of stagflation.

With his massive military buildup, his missile defense system, his tough diplomacy, and his evil empire battle cry, Reagan defeated Soviet communism forever without even firing a shot.

He was a tough minded optimist who believed in American exceptionalism and freedom. He saved our future.

Let me repeat my favorite of the Gipper’s many great lines: the best is yet to come.

John M Greco

Investing Solo – Bill Gross’s PTY and Its Sister Closed End Funds PFN, PFL, and PCN

When will interest rates really start to rise? How much inflation do we really have? Read the WSJ or watch the Kudlow show and see the experts’ answers range from soup to nuts. I pay, however, particular attention to Bill Gross of Pimco, who, in the annual Barron’s roundtable interviews (link) published last month and in a recent post for Pimco investors (link), opines that the Fed will keep interest rates low for a good while longer, however injurious such rates are to savers and pensioners, in the interest of propping up assets, particularly stocks and real estate, for the benefit of banks and financiers. He advises us mere mortals to adjust to the interest rate realities and adapt our fixed income strategies. Gross: “Once [quantitative easing] disappears, how long will the federal-funds rate stay at 25 basis points?…. For a long, long time, I think. Short-term rates will stay there for at least two years and maybe three, because of high unemployment, excess capacity and, at the moment, an inherently low inflation rate. There would be no rationale for the Fed to raise interest rates other than to counter an attack on the dollar.”

To that end, in Barron’s he once again recommended one of the Pimco diversified taxable debt closed end funds (CEFs) – PTY. Gross’s argument: “[I]f you don't want to own assets [like treasuries or money market funds] yielding negative real rates [interest rates net of inflation], why don't you borrow at such rates, or find companies that do?” I own two sister funds to this one – PFN and PFL, the former of which in the June 2010 Barron’s Gross called a “look-alike” to PTY. Not unexpectedly, the price of PTY shares jumped high, while the unmentioned PFN and PFL only hopped up a bit, despite only modest to moderate differences among them and the fourth sister of the quartet, PCN. I don’t know why Gross mentions only one of them at a time in these interviews rather than discussing the quartet as a whole. In fact, the average durations of the PFN and PFL portfolios are shorter than PTY and PCN, giving them a little more safety should interest rates rise a lot from here. For me, when I first bought into PFN and PFL I liked their valuation metrics a bit better than those of PTY and PCN, and especially given the run up in share prices recently that still seems the case to me now.

All of these funds to my eyes have exceptional metrics among debt CEFs – particularly for me net investment earnings well in excess of monthly distributions, a substantial cushion of undistributed net investment income, and insignificant amounts of the subjectively valued “level 3” securities. The portfolios are mostly corporate bonds, both investment grade and high-yield, and mortgage-backed securities. All these funds are managed by Gross himself (he’s also a large personal shareholder) and have great track records, employing leverage to achieve regular distributions of well over 7% annually plus a history of special one-time year end payouts on top of that.

Of concern is the particular risk seemingly on everyone’s mind right now -- future interest rates, but again, Gross thinks they’ll stay low for quite a while longer. Also, this quartet of CEFs now trade at a premium to net asset value, but I suspect that’s because of Gross’s great track record as a fund manager and because the annualized rate of monthly distributions does not take into account special year-end distributions.

I have been taking a hard look at my fixed-rate funds not expressly intermediate-term in focus that I have left after my reallocation over the past year almost completely out of long-term funds. I look at PFN and PFL as essentially intermediate-term funds with great fundamentals, yields, and management, but with a fixed rate portfolio. After re-assessing the rewards versus risk, I’ve decided to hold firm with them despite the recent run-up in price to mild premiums over net asset value and the inherent interest rate risk.

I’m an individual investor with no background in finance or securities, writing things down to help organize and clarify my thinking. Of course, nothing I say constitutes investment advice of any kind – merely an account of my personal observations and decisions. My core portfolio is a conservative and diversified mix of equity and debt mutual funds, ETFs, and some closed-end funds (CEFs) across investment styles, management firms, and accounts, and I invest a relatively small amount (about 10%) somewhat more aggressively in the perhaps ultimately futile pursuit of alpha.

Mike Parenti

PTY profile at Nuveen’s CEF Connect web site

Related Posts:
Investing Solo – Floating-Rate Debt - GFY
Investing Solo – Floating-Rate Debt
Investing Solo in Floating-Rate Preferred Stocks

Investing Solo – Floating-Rate Debt - GFY

I’ve been writing about my search for suitable floating-rate debt securities to which I can allocate a part of my debt portfolio. I’ve previously posted some thoughts about floating-rate (FR) equity preferred stocks (link), particularly MET-A and HBA-D, and exchange-traded debt securities (link), particularly the exchange-traded bond PFK and the trust preferred issue UBS-D.

I’ve come to like the closed end fund GFY run by Legg Mason. It invests, with a pledge of at least 80% of assets, in variable rate debt, such as mortgage-backed securities, IG and high yield corporate bonds, senior loans, and emerging market debt, and derivatives related to these securities; no FR equity preferred stock, however. Much of this portfolio, about 45% as of last fall, is as expected below investment grade. I like the picture from the last annual report (link), dated September 30, 2010: portfolio earned interest and dividends well in excess of the CEF’s distributions, specifically an impressive 134%; solid positive capital gains and net from derivatives; a very decent amount of undistributed net investment income on the books; and no return of capital. To my read, about 82% of its net realized gain came from portfolio interest and dividends, which I like, with only the remaining 18% from net capital gains and derivative, swap, and currency transactions.  The Legg Mason GFY "Fact Card" (link) lists a security weighted average life of 5.6 years.  As of yesterday it pays a monthly distribution at an annualized rate of 4.1% and trades at a very attractive 8.4% discount to net asset value. Interestingly it does not employ leverage, despite being the kind of fund -- one with a variable rate portfolio that could maintain an interest rate spread over borrowed capital as interest rates rise -- where one might expect it and like to see it. One limitation – it’s a fairly small fund with relatively low trading volume. What I see as the risk/reward ratio is attractive for a modest investment, and I’ve begun accumulating some shares on dips.

I’m an individual investor with no background in finance or securities, writing things down to help organize and clarify my thinking. Of course, nothing I say constitutes investment advice of any kind – merely an account of my personal observations and decisions; I do not vouch for the accuracy of any representation -- every investor must do his/her own due diligence. My core portfolio is a conservative and diversified mix of equity and debt mutual funds, ETFs, and some closed-end funds (CEFs) across investment styles, management firms, and accounts, and I invest a relatively small amount somewhat more aggressively in the perhaps ultimately futile personal pursuit of alpha.

Mike Parenti

Related Posts:
Investing Solo – Floating-Rate Debt
Investing Solo in Floating-Rate Preferred Stocks

The Tucson Murder Rampage, Liberal “Truth”, & Liberal Viciousness

The bullets of the madman had barely stopped flying in Tucson earlier this month when many prominent liberals rushed to blame the tragedy on conservatives, despite not only the absence of a shred of evidence of such but despite early anecdotes that in fact he was an atheist, a left-wing pothead, and an anarchist, even as if had the shooter held conservative political views they could possibly be blamed for mass murder. We’ve seen this despicable tactic from liberals many times before, of course – from the recent Times Square bombing attempt, to the Oklahoma City bombing, to the assassination of President Kennedy.

This recent disgraceful behavior offers yet another clear look into the disturbed and hateful souls of so many in the intellectual vanguard of modern liberalism. Seeing their hoped-for apotheosis of liberalism, the Obama presidency, flounder and seeing most voters in the recent elections reject the liberal agenda, liberal opinion leaders are angry, desperate, and unhinged. And they are not troubled to accuse conservatives of being moral accomplices to mass murder, for facts and truth don’t matter to the socialist, collectivist cause – only that “truth” that advances their social deconstruction of an America predicated on individual liberty, personal accountability, limited government, and constitutionalism.

I’ve collected some noteworthy responses to the deranged liberal smears that can serve me as continual reminders of the true purpose and character of modern American so-called liberalism, the antithesis of what the term meant years ago and should always have stood for.

Glenn Harlan Reynolds in the Wall Street Journal (link): ‘To be clear, if you're using this event to criticize the "rhetoric" of Mrs. Palin or others with whom you disagree, then you're either: (a) asserting a connection between the "rhetoric" and the shooting, which based on evidence to date would be what we call a vicious lie; or (b) you're not, in which case you're just seizing on a tragedy to try to score unrelated political points, which is contemptible. Which is it? … I understand the desperation that Democrats must feel after taking a historic beating in the midterm elections and seeing the popularity of ObamaCare plummet while voters flee the party in droves. But those who purport to care about the health of our political community demonstrate precious little actual concern for America's political well-being when they seize on any pretext, however flimsy, to call their political opponents accomplices to murder.”

Jay Nordlinger at National Review Online (link): ‘After the Kennedy assassination, John Tower and his family had to evacuate to a safe place. The early word was that right-wingers had killed the president. Tower was associated with Goldwater for President. There were death threats against his family. It transpired, of course, that a left-wing nutjob who had “defected,” briefly, to the Soviet Union was the killer. A liberal was quoted as saying, “Now our grief can be pure.” …. If an Islamist blows up or guns down 50 people, shouting “Allahu Akbar” as he does it, you’re not supposed to say that the act has any broad implications at all. It is simply an individual act, end of story. But if a young psychotic in Arizona kills a lot of people, we’re supposed to examine the state of Sarah Palin’s soul.’

Andrew Klavan at City Journal (link): ‘… [T]he Left’s sudden talk about incendiary political rhetoric in the wake of the Arizona shooting isn’t really about political rhetoric at all. It’s about the real-world failure of leftist policies everywhere— … leftists [are] starting to lose control of the one weapon in which they have the most faith: the narrative. The narrative is what leftists believe in instead of the truth. If they can blame George W. Bush for the economic crisis, if they can make Sarah Palin out to be an idiot, if they can call the Tea Party racist until you think it must be true, they might yet retain power in spite of the international disgrace of their ideas. .… call it Narrative Hysteria: a frantic attempt to capitalize on calamity by casting their opponents, not merely as racist or sexist or Islamophobic this time, but as somehow responsible for an act of madness and evil. Shame on them.

Roger Kimball at National Review Online (link): ‘What we have here in the tortured left-wing effort to enlist the ghastly Arizona shootings into their anti–Tea Party campaign is yet another example of political correctness on the march. The great irony … is that all this vitriol should be marching under a banner called “liberalism.” There is nothing liberal, nothing having to do with freedom, about it. It is all about control: power in the hands of a nomenklatura and submission visited upon you and me, my friends. It’s the good old strategy of Lenin, dusted off and infused with some new names.’

George F. Will at the Washington Post (link): ‘Let us hope that … [this] is the last gasp of the generation of liberals whose default position in any argument is to indict opponents as racists. This McCarthyism of the left - devoid of intellectual content, unsupported by data - is a mental tic, not an idea but a tactic for avoiding engagement with ideas. It expresses limitless contempt for the American people, who have reciprocated by reducing liberalism to its current characteristics of electoral weakness and bad sociology.’

Andy McCarthy at National Review Online (link): ‘Very simply: The Left likes Islam and sympathizes with the Islamist critique of America, while it seethes with contempt for the likes of Sarah Palin, Rush Limbaugh, and any person or institution that can serve as a symbol of conservatism or bourgeois American life. Consequently, any heinous act that can be contorted, however counterfactually, into a condemnation of the Right will be exploited for that purpose. Conversely, there is to be quick rationalization for, and then studious suppression of, any shameful episode that is too clearly traceable to a leftist cause célèbre — Islam, a movie pining for George W. Bush’s assassination, ghoulish wishes that Clarence Thomas or Dick Cheney will meet swift and painful deaths, or Senate Democrats’ comparing U.S. troops to Nazis, Soviets, Pol Pot, or terrorists…. There is no point debating any of this. Two years ago, we were still being told dissent was the highest form of patriotism; now it’s the root cause of murderous rampage. Modern leftists are tacticians. They’ve convinced themselves of the rightness of their cause, obviating the need to be consistent or faithful to facts in any single episode. For them, it’s all about how the episode can be spun to help the cause. That’s worth understanding, but not debating.’

Peter Wehner at Commentary Magazine (link): ‘What is on display is a cast of mind in which facts and reality are secondary to storylines and narratives. The aim is not truth; it is to advance The Cause. It is also about cynical exploitation. As one veteran Democratic operative told Politico, the Obama White House needs to “deftly pin this on the tea partiers” just as “the Clinton White House deftly pinned the Oklahoma City bombing on the militia and anti-government people” in 1995…. It is all quite sick, really. Not a few liberals are attempting to use a human tragedy to advance an ideological agenda. They are using dead and broken bodies as political pawns. The blood was still flowing from the gunshot wounds of slain and wounded people in Tucson as liberals began an extraordinary and instantaneous smear campaign. It will end up making our political discourse even more angry and toxic. I was naïve enough to be surprised at what has unfolded in the last 48 hours. The cynicism and intellectual corruption on the left is deeper than I imagined.

Charles Krauthammer in the Washington Post (link): ‘Rarely in American political discourse has there been a charge so reckless, so scurrilous and so unsupported by evidence.’

Daniel Henninger in the Wall street Journal (link): ‘What happened in November [the widespread electoral repudiation of liberal policies] has to be stopped, by whatever means become available. Available this week was a chance to make some independents wonder if the tea parties, Sarah Palin, Rush Limbaugh, Glenn Beck and Jared Loughner [the Tucson mass murderer] are all part of the same dark force. Who believes this? They do. The divide between this strain of the American left and its conservative opponents is about more than politics and policy. It goes back a long way, it is deep, and it will never be bridged. It is cultural, and it explains more than anything the "intensity" that exists now between these two competing camps. The Rosetta Stone that explains this tribal divide is Columbia historian Richard Hofstadter's classic 1964 essay, "The Paranoid Style in American Politics." After Hofstadter, the American right wasn't just wrong on policy. Its people were psychologically dangerous and undeserving of holding authority for any public purpose.’

Peter Wehner, again, at Commentary Magazine (link): ‘The left has decided to build on the slander that conservatives were moral accessories to murder. This week they are using the death of six innocent people in Arizona as a means to advance their policy agenda — even though that policy agenda had nothing on earth to do with the terrible events in Tucson .… And so the forthcoming health-care debate is now being framed in the context of the Tucson massacre (the not-so-subtle argument is that health care contributed to the “climate of hate” that the left still wants to insist contributed to the violence on that awful day)…. What we’re witnessing among some liberals are minds that are so thoroughly and completely politicized that they will use any human tragedy, create any set of arguments, and invent any narrative they can in order to advance The Cause…. [A]pparently, some on the left are so consumed by politics that it tints every lens they look through; it impacts every act in life; and it colors every living, breathing thought they have.’

John M Greco

Dem Congressman Says Republicans Are Wrong to Focus on Obamcare Rather than Jobs; Where Has He Been, in a Cave?

Robert Andrews, a Democrat Congressman from New Jersey, was a guest on today's Bill O"Reilly show and was introduced as one of the "co-authors" of Obamacare.  He was asked to respond to the announced Republican plan to hold a repeal vote on the law very soon as one of the first activities of the new Congress.  This guy said, and I quote, "I think it's wrong to focus on healthcare rather than jobs."   

This is too rich, too ridiculous.  In fact, this guy had such a flat affect even he couldn't muster enthusiasm for his argument, if one can even call it that.  For two years the Democrats have focused primarily on their health care scheme, to the detriment of job creation, and now this guy says it would be wrong to focus on health care rather than jobs.  He avoids defending the substance of the bill -- he just doesn't want to talk about it.

For the past two years, their health care scheme was the top priority for Democrats instead of jobs, the economy, and Islamic terror, to name just a few other things, and the voters responded with the Great Repudiation of 2010.  Now congresssional Republicans, many of whom were newly elected as much as anything else because of their opposition to Obamacare, want to try to repeal what they think is not only a very bad attempt at health care "reform" but a great harm to the economy and the Constitution as well, and all this guy Andrews can muster is to knock them for not focusing on "jobs".  This is appparently the Democrat approach to defending Obamacare -- change the subject to jobs.  Any problems with anything we've done or haven't done -- why worry about that?  Focus on jobs, jobs, jobs.   

A great impediment to more job creation IS Obamacare.  This Dem tactic is pathetic.  New Jersians and the rest of us deserve much more.

John M Greco

Investing Solo – Floating-Rate Debt

Yesterday I posted comments (link) about my search for promising individual floating-rate preferred stocks, in the absence of any viable fund that I know of, as a hedge against rising interest rates and inflation. I thought I would add here a few comments about some other floating rate exchange-traded debt I’ve looked at. I am an individual investor with no background in finance or markets, and, of course, nothing I am about to say constitutes investment advice of any kind – merely my personal observations and decisions, and I do not vouch for the accuracy of any representation – every investor needs to do his/her own due diligence.

Most floating rate exchange-traded debt securities are traditional preferred stock issues, but there are some others, although not many. In the category of exchange-traded bonds, two are from Sallie Mae, but I am afraid of this outfit in light of what happened to Fannie and Freddie, notwithstanding a recent favorable Barron’s article. The one issue I’ve looked at is PFK, from Prudential Financial rated investment grade, paying a monthly dividend based on a CPI-derived inflation rate metric plus 2.4 percentage points with a floor of zero. At today’s close of $25.35, PFK sports an annual yield of about 3.5%. It’s trading just a bit over par of $25, and will mature in 2018, a little over 7 years from now. Reference points are that I can find currently low-IG fixed-rate exchange-traded bonds at over 7% and riskier floating-rate preferred stock with fully-taxable equivalent yields of over 5.5% at the 35% bracket. One can only guess at how fast interest rates will rise and to what levels between now and 2018 when this note matures; and I must factor in the capital loss of $0.35 at maturity, which is about 1.4% of today’s price. This security has traded as high as $26.83 in the past 12 months, which, apart from a current low interest rate, means at that price a loss of $1.83 (6.8%) in 7-8 years. It seems to me that buyers of PFK at that price were betting on a lot of inflation and relatively soon. On the other hand, PFK has traded as low as $19.36 in the past year, which would mean a capital gain of $5.64 per unit if held until maturity; as a very rough estimate, assuming 8 years till maturity, that’s a straight average base of about 3.6% per year before the variable interest payment. But that deal is now gone, and PFK is not attractive enough to me, given my guess at the size and speed of rates to come, at the current price of a little over $25.

UBS-D is a floating-rate low-IG trust preferred from UBS that pays a monthly distribution, reset monthly, at the annualized rate of 0.70% point above the one-month Libor. The issue is past call with no maturity date. The current annualized rate is a measly 1.47% at today’s close of $16.98. However, QuantumOnline’s interpretation is that this security qualifies for the 15% QDI tax rate, so, if true, the 1.47% nominal annualized yield translates to an annualized fully taxable equivalent yield of about 1.92% at the 35% rate. A little bit better but not enough for me at this time. But since this security has buyers at this price, there clearly are people whose views of the inflation risk lead them to this security at this yield.

So, as to my original challenge – finding good investments in exchange-traded individual floating-rate debt securities.  So far I’ve been disappointed – there are relatively few floating-rate IG securities to begin with, and those I’ve looked at have been bid up to prices consistent with what seems to me a fairly aggressive view of the timing and height of interest rates to come. Thus for now I’ve taken only smallish positions in two floating-rate preferred stocks, which offer much better current yields than the exchange-traded debt I've looked at albeit in a more risky type of security, while I brace for interest rates to come.  Given the relative paucity of floating-rate exchange-traded debt and preferreds, it seems to me that investors interested in this category must look to individual securities rather than waiting for a fund to come along.  

Mike Parenti

Related posts:
Investing Solo – Floating-Rate Debt - GFY

Investing Solo in Floating-Rate Preferred Stocks

I have been invited to post at this blog my current thoughts and approach to investing as an individual investor with no background in finance or securities with the thought that my experiences might be of some interest. Writing things down can also benefit me if it helps clarify my own thinking. I devote 5-10% of my savings to moderately higher-risk investing to boost overall portfolio performance and as an intellectually interesting challenge that helps keep me off the streets. Most of my portfolio is in a fairly conservative mix of stock and bond mutual funds, ETFs, and some closed-end funds (CEFs) diversified across investment styles, management firms, and accounts. Of course, nothing I am about to say constitutes investment advice of any kind – merely my personal observations and decisions.

Lately one of the areas of particular interest to me involves securities that pay a variable, or floating, interest rate. Given the widespread expectation that not only are interest rates going to rise (they can’t get much lower) but possibly rise a lot given the current global governmental fiscal debacles, floating rate debt securities are attracting a lot of commentary and interest. In addition, given the recent sell off in debt securities, there may be some bargains for investors willing to be a bit contrarian, since “buying low” usually requires the nerve to buy at a time when most others are selling.

The two largest categories of such securities accessible to the small individual investor like me are bank loans and preferred stocks; there are only a few individual floating rate securities of other types of exchange-traded debt – exchange-traded bonds, trust preferreds, and trust certificates (third party trust preferreds). Bank loans are not exchange-traded but are available via mutual funds (such as Fidelity’s FFRHX) and closed end funds (such as TLI, JFR, and BHL), and I have investments in bank loans in both investment vehicles. Bank loans are non-investment grade debt and of course as such carry a higher interest rate, but are usually relatively short-term, senior and secured, and usually have a floating interest rate.

I have had for some time modest positions in CEFs such as JPS and HPF that primarily hold preferred stock, trust preferreds, and trust certificates, but these funds are not focused primarily on floating rate debt. The one CEF that is – JFP – melted down a while back because many of the issuers of the preferred stock it held (lots of banks) stopped paying their non-cumulative dividends.

Therefore, an investor with a particular interest in preferred stocks that pay a floating dividend rate that qualifies for the 15% federal tax rate (qualified dividends) must look to individual securities. Although I generally have a strong preference for funds and only have a few individual securities in my entire portfolio, I have been looking at individual preferred floaters since I don’t have funds (other than the wounded JFP) to consider that invest primarily in them.

At QuantumOnline (quantumonline.com), considered by many who comment online to be one of the, if not the, best source of information about exchange-traded debt securities, earlier this month I found a total of 24 floating rate preferred stock issues, about 5% of the total universe of preferred stocks listed there. Of these 24, 14 were rated investment grade (most at the lowest level) by both Moodys and S&P, and another 6 had one of the two ratings at IG.

Most issuers are banks (e.g.: HSBC; UBS; Bank of America) or financial companies (e.g.: Goldman Sachs; Morgan Stanley). All but one pay dividends quarterly and those dividends are non-cumulative with all but one.

It’s interesting, and very challenging, for me to try to assess the varying market valuations based on variables such as credit rating of the issuer, chance of dividend interruption, method of calculating the interest rate, the current rate, etc. The issues I’ve looked at all are paying dividends right now at the interest rate floor, and given the variable to which the rate is pegged, commonly the 3 month Libor which is currently well under 1%, interest rates would need to rise considerably before the floating rate would rise above the set minimum.

So far I’ve settled for modest investments in two IG issues, but I am keeping an eye on the group for entry points based on share prices and the yields at those prices. The first is MET-A (or METprA) from Met Life, whose variable rate is pegged to the 3 month Libor + 1% point with a 4% floor based on a $25 par. As such, the current dividend is $1.00, which, at today’s close of $23.18, delivers a dividend yield of about 4.3% that equates to about 3.67% after federal taxes at the 15% rate. The fully-taxable equivalent yield at the 35% rate is 5.6%. So the question for an investor like me is of course whether this security offers sufficient value. Met Life seems reasonably strong to me, and although part of the attraction is that it’s an insurance company and not a bank, given what happened at AIG there's no shortage of worry. Is the current yield enough for a period of time that could be a long one -- who knows how fast interest rates will rise to eventually push the coupon above the 4% floor; but when rates do start to rise, might they rise fast and cause the price of this preferred to shoot up past a reasonable entry point at that point in time? Does buying at a price below $25 par offer a great enough chance of capital gain in addition to the dividend?

The second issue is HBA-D (or HBAprD) from a subsidiary of HSBC, a very large global bank, whose variable rate is pegged to the highest of three different US Treasury debt metrics and has a floor of 4.5% and a ceiling of 10.5% based on a $25 par. Of particular interest to me is the fact that the dividends are cumulative, offering some protection in the event they are suspended; dividends from the other two HSBC floating rate preferreds are not cumulative.

At the floor of 4.5%, the current dividend is $1.125, which, at today’s close of $24.73 delivers a dividend yield of about 4.5% that equates to about 3.87% after federal taxes at the 15% rate. The fully-taxable equivalent yield at the 35% rate is 5.95%. In my thinking, a very nice rate, provided that HSBC, a bank, keeps paying the dividends, which, though, accumulate if suspended. I am taking some comfort in the fact that, according to a recent article (November 20) in Barron’s on the ongoing issues with banks and their mortgage-related debt, HSBC was ranked 11th of 11 big banks in the estimated dollar value of the loss if bad mortgage securities are forcibly “put back” to the banks.

I am drawn to looking at individual relatively high-yielding debt securities as investments, of course, because of the prolonged, unusually low interest rate environment that seems to me designed by the Federal Reserve to help banks repair their balance sheets at the expense of individual savers like me – a tremendous transfer of wealth to bankers and their investors in the name of stabilizing our financial system. At least as a way to mitigate my risk somewhat in this area of investing, I wish there was a viable mutual fund or closed-end fund from a major fund manager focused primarily on floating-rate preferred stock.

Mike Parenti

Related posts:
Investing Solo -- Floating Rate Debt
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Notre Dame Church in Chicago

Quite a few years ago many a Christmas Eve found me with my family at midnight Mass at Notre Dame Church on Chicago’s near west side. It was a special yearly visit to the Italian Taylor Street “old neighborhood” of big families and special memories. I especially recall peering up into the great dome overhead and marveling at the art work so high up, and even at my age then was able to appreciate how well the church was cared for.

In Chicago Churches and Synagogues: An Architectural Pilgrimage, Fr. George Lane writes that “the words ‘Notre Dame de Chicago’ above the door … recall the illustrious French history of Chicago…. Although Notre Dame parish was founded in 1864, it was actually a continuation of an earlier French church known as St. Louis which was organized in 1850.”

Fr. Lane tells us that the beautiful church is in the Romanesque Revival style, with the main body almost circular in plan surmounted by a 90-foot dome and cupola. The high vaulted ceiling is one of the most striking features in my memory. Fr. Lane also describes “thirty-three beautiful stained glass windows, all imported from Europe, [that] decorate and illuminate the church.” In 1918, after most of the French-speaking residents were gone, the Cardinal gave the parish and church to the Blessed Sacrament fathers to run.

The Notre Dame parish has suffered some set-backs in more recent years. First, the city razed good parts of the parish for the Eisenhower Expressway just to the north, for the West Side medical center just to the west, and for the University of Illinois campus just to the east. Some other Taylor Street churches, such as St. Calistus, survived these depredations, but a special one, Guardian Angel, did not.  Then, Fr. Lane relates that in 1978 the statue of Our Lady atop the cupola was struck by lightning and caught fire, causing extensive damage to the church. But through all that, Notre Dame still stands this new Christmas, on Flournoy Street at Loomis, in the heart of the old neighborhood through which so many lives have passed and become enriched.

R Balsamo

Illinois 2010 Election Results – For Republicans, A Tale of Two Electorates

For Illinois Republicans, last month’s election results were a mixed bag and showed an electorate very schizoid about the two major parties.

First the good news – Republicans won the Senate seat (Mark Kirk), picked up 4 House seats, and held the one Kirk vacated to run for Senate. In Congressional Districts 8, 11, and 14, all of which begin in the Chicago suburbs and extend well into the state, Republicans Walsh, Kinzinger, and Hultgen recaptured long-held seats that had been recently lost to Democrats from inattention, sloth, ideological drift, and incompetence. In addition, Republican Schilling bumped off bumbling Democrat incumbent Hare, a protégé of the late ultraliberal Congressman Evans, in the 17th district along the Mississippi River, and Republican Dold kept Kirk’s old north suburban congressional seat in party hands. Republicans will now hold 11 of the state’s 19 congressional seats. Seven of the 8 Democrat-held districts are in Chicagoland.

But state races were a different story. In the five races for state-wide offices (candidates for governor and lt. governor run together, so voters cast only one vote for a pair of candidates), Republicans won only two, for Treasurer and Comptroller, both open Democrat seats. Incumbent Democrats won the races for Governor, Attorney General, and Secretary of State. But it wasn’t all name recognition. Republican Bill Brady, in the governor’s race, had reasonable name recognition in Republican suburban DuPage County from previous races, yet received about 17,000 votes less than Republican Dan Rutherford, unknown in the Chicago area, running for state Treasurer. In DuPage County alone, Brady received about 25,000 votes less than Republican Judy Barr Topinka in her run for her old spot as controller; Brady lost to Democrat incumbent Pat Quinn by only about 19,000 votes in the whole state. Many Republican voters split their votes.

The Brady-Quinn race illustrates the electoral challenge for Republicans in Illinois. Using the unofficial results that are available the day after the election, with 99%+ precincts reporting, Republican Brady won 99 counties versus only 3 for Quinn, but still lost because his margins of victory in all those counties could not overcome his poor showing (about 29%) in just one of the 102 – heavily Democratic Cook County. Kirk also won 99 of 102 counties, but ran just a few percentage points better than Brady in Cook County and everywhere else, and that was enough to win his Senate race.

In the state legislature races, Republicans gained some seats in both the Senate and House, but failed to take either from the Democrats, who held large majorities going in to the election.

So Illinois voters, faced with a state functionally bankrupt and run in recent years completely by Democrats, re-elected Democrats to most of the same state offices and state legislature seats, while throwing out 4 incumbent Democrat US congressmen. Hard to figure.

John M Greco


Related Posts:
Observations on the 2010 Illinois Primary Results
Illinois Republicans: Slip, Slidin’ Away

Democrats and Tax Evasion, Like Sterling and Silver -- Tax Law Writer Rangel Joins Tax Collector Geithner and Former Senate Leader Daschle in the Tax Cheaters Hall of Fame

What is it about Democrat politicians and income tax evasion? Just in the last two years, we have seen a slew of prominent Democrats discovered to have evaded federal income taxes big time and then get away scot-free, suffering only the inconvenience of back payments. No jail time, and, to my knowledge, no penalties.

Obama Treasury Secretary Tim Geithner, whose position includes being the head of the tax-collecting Internal Revenue Service, was found upon his nomination to have evaded substantial taxes years ago. This financial expert blamed it on software miscalculations and oversights, even though he had signed papers at work documenting his understanding that taxes would be due on the extra income in question. Only when nominated did he pay the back taxes with interest, but no penalty. The head of the IRS is a confirmed income tax cheat, and the Obama Democrats are OK with that. Very symbolic.

Prominent Democrat Tom Daschle, the former Senate leader and no doubt a lover of all tax hikes, had his nomination by Obama for a Cabinet post torpedoed by the discovery that he was a tax cheat. Most other Obama tax evading nominees suffered a similar fate, but one other cheater, Katherine Sibelius, now head of HHS, somehow survived. My theory: she was discovered to be a tax evader after so many other Obama nominees had already been outed, and by then there was so much Democrat-tax-cheater fatigue among Republicans and conservative media that she slipped by. It became hard to keep all of the tax evasion stories straight from one another.

Now yet another Democrat, long-time congressman Charlie Rangel, who has been head of the House tax-writing committee for years and also a hearty supporter of tax increases for those of us who actually pay their income taxes, is found to be a long-time tax evader (17 years by reports). But he only suffers a figurative hand slap via a House censure, which House Democrats supported only for political show to hide from the public their true feelings, which were evidenced by the standing ovation they gave Rangel immediately after the public wrist-slap.

No fines, no jail for Rangel, even though the week’s news featured another income tax evader, actor Wesley Snipes, ordered off to prison for the same offense.

For these Democrat politicians, paying taxes is for Republicans, spending taxes is for Democrats. It astonishes me that rank and file Democrat voters are not angry about all this, and that all these Democrats have gotten away with crimes that for everyone else means fines and jail.

John M Greco

The Duke False Rape Scandal, Coach Krzyzewski, & Failed Character

College basketball has begun anew and once again the Duke Blue Devils are top ranked, a familiar place since Mike Krzyzewski became coach. But although Coach K, as he is fondly called, may have found success as a basketball coach, to me he will forever symbolize failure, failure of character, at his moment of truth.

In 2006, in a now infamous scandal that in the end brought disgrace to many and serves as a morality tale of the evils of reverse racism and liberal cultural hatred gone amok, three white Duke University lacrosse players were falsely accused of rape by a black woman whose story was fishy, inconsistent, and implausible from the very start, and which in short order only grew more so. From the beginning of this sordid affair, three innocent students were used for nefarious political purposes by a despicably corrupt white prosecutor, a Democrat who sought to curry favor with black voters for his upcoming election bid. In his great frame-up, this man was consciously aided and abetted, for a variety of personal and political reasons, by many in the police force, in the prosecutor’s office, in the judiciary, in the liberal media, in the Duke administration, in the Duke hospital, in the Duke student body, and in the ultra-liberal Duke faculty (many of whom fanned racial grievances in promoting their anti-white narrative). In the early months, few stepped up to caution temperance, open-mindedness, and due process; few raised the obvious concerns about the weakness of the accusation and the disgraceful behavior of the prosecutor and the police. A few heroes stood up from the start for truth and justice, among them historian KC Johnson, who brought national attention through his meticulously researched blog (link) that chronicled and analyzed the unfolding events of the case, and the men and women Duke lacrosse players and their coaches. Many cowards also stand out, such as the numerous Duke professors of law who acquiesced in the gross miscarriage of justice unfolding at their own school before their very eyes, cowered by the left wing lynch-mob fervor all around them. As we all know, eventually, but not before great suffering, the students were completely exonerated, and some of the persecutors have been punished in one way or another.

Occupying a prominent place in the hall of eternal shame is the most famous Dukie of all, Coach Mike Krzyzewski. The product of a working-class Chicago neighborhood and a Catholic high school, he’s gone on to great success and fame. But for some of us there come one or two moments in our lives when we are faced with a great test of character, when we must choose to stand up for what is right or avert our gaze and shirk away. One such moment came for Mike Krzyzewski. With his national following as Duke’s most famous coach, and in a case involving Duke athletes, he could have stood strong and demanded fairness and justice for the accused. Instead, he chose to remain silent, either from indifference or cowardice. Perhaps he feared that his recruitment of black players would suffer if he spoke out.

In the end, whatever its cause, Krzyzewski's silence in the face of an unfolding great moral wrong will forever define him and will forever tarnish whatever his teams accomplish on the basketball court, and brings to mind the maxim, sometimes attributed to Edmund Burke, that all that is necessary for evil to triumph is for good men to do nothing.

John M Greco

Illinois Now Worst Among States in Risk of Default on Debt. And Illinois Voters Like It That Way. We’re Number One!

Illinois has long had the distinction of being the state with one of the, if not the, most precarious financial positions. The formula has been simple: overspend, tax, overspend, tax, overspend, borrow, overspend, borrow, overspend, borrow. At some point, and this may be the point, the state cannot borrow enough anymore.

One of the statistics that sticks in my head is this: In a recent 10 year period, Illinois’ population is roughly flat while “spending per person, after inflation, is up almost 47% (link).” Unsustainable, of course.

Where has all the money gone? Pensions to government workers, including teachers, in a system where the pension payment is set by a formula that disproportionately weights the last year’s salary, which, of course, is artificially bumped up to astronomical levels by the politicians and their union compatriots to jack up the lifetime retiree monthly pension payments. And who pays for all this? The shrinking Illinois taxpayers.

Says (link) the Chicago Tribune to the Land of Lincoln: “You've bizarrely promised your workers some $80 billion more in pension payouts than you can afford. What's more, you've promised them additional billions that you don't have for their health care after they retire.”

And then there’s Medicaid – here’s the essence: “Medicaid spending eats up 30 percent of Illinois’s budgetary pie…. Between 2003 and 2008, [Illinois’] Medicaid enrollment grew at an average rate of 7.8 percent a year while Illinois's population only grew 0.5 percent" (link). Sheesh.

Writes Amy Merrick in the Wall Street Journal (link): “Illinois's deficit through mid-2011 is estimated at $11 billion to $13 billion—close to 50% of the expected $26.7 billion in available revenue for the coming fiscal year…. That is among the worst such percentages among states…. The state pension system also is the worst-funded in the U.S. … State auditors estimate that the pension systems are underfunded by $62 billion…. Required pension contributions, including interest payments, have nearly quadrupled in the past 10 years.”

Now, in today’s Wall Street Journal, Steven Malanga writes (link) that in June 2010, based on cost of default “insurance” for holders of debt, “Illinois surpassed California as the worst credit risk among U.S. states, [and] was at greater risk of default than Iraq.” Great.

And how did Illinois voters respond this month to this historic crisis? They opted for the ostrich maneuver, re-electing the sitting Illinois Democrat governor whose plan is to cut spending a bit and raise taxes a lot, and re-elected a majority of Democrats to the Illinois House and Senate, the former presided over, seemingly forever, by a Democrat Speaker named Madigan whom many regard as the most powerful politician in Illinois and who probably more than anyone else has overseen this debt debacle.

What happened to hope and change?

John M Greco


Related Posts:

Illinois Wins a Silver Medal in Fiscal Irresponsibility, Narrowly Missing a Gold, But Beats Out New Yorkers

Illinois’ Unnecessary Budget Crisis & Irresponsible Solutions

Illinois' New Governor Proposes a 50% Tax Hike To Close Budget Gap Caused By Years of Reckless Overspending

Of Ponzi Schemes, Social Security, & State Budgets – What’s The Dif? And, Illinois in Trouble

Armistice Day, the Brits, & Lessons for Us All

A few weeks back at Power Line Blog I came upon a post about a new video compilation (link) of some rarely seen WWII British home front footage, accompanied by the audio of a live performance at the British Festival of Remembrance in November 2009. The background music on the video is, what I have now come to know, a WWII-era song “There’s a Land of Begin Again”, sung (link) with great depth and pacing by a young man named Jamie Cullum, whom I had not heard of previously but whom I now read is fairly well known in some music circles. The song was recorded at the time, perhaps originally, by Vera Lynn, who is better known for another wistful war-era song “We’ll Meet Again.”

Listening to Vera Lynn sing I can just imagine the lyrics running through peoples’ heads as they huddled in air raid shelters listening to the destruction of their world above:

There’s a land of begin again, on the other side of the hill
Where we’ll learn to love and live again, where the world is quiet and still,
There’s a land of begin again, and there’s not a cloud in the sky,
Where we’ll never have to grieve again, and we’ll never say good-bye.

When all your troubles just surround you, and around you, skies are gray,
If you can only keep your eyes on, the horizon, not so far away.

It’s remarkable in some ways that the British were able to rustle up the will to fight through the Second World War, having not yet recovered from the horror, devastation, and loss of life from the First, their despair captured well by Eliot in the opening lines of his otherwise inordinately cryptic poem:

April is the cruelest month, breeding
Lilacs out of the dead land, mixing
Memory and desire, stirring
Dull roots with spring rain.
Winter kept us warm,
Covering Earth in forgetful snow.

Armistice Day once again brings to mind many things, not the least of which such notions as the importance of early deterrence, how weakness is provocative to predators, and the illusoriness of appeasement. Despite paying a dreadful price when such lessons were forgotten, within memory history now repeats itself as tragedy.

The British mustered enough energy and purpose to lift themselves from despair and ennui, but only long enough to prevail. In the end, their reserves exhausted, most soon collapsed, perhaps terminally, into deep pacifism, apathy, and decadence, unwilling to defend their own culture against the growing depredations of socialism and Islamism in unholy alliance. Surely there are many stout Brits who will once again throw off their stupor and stand strong, but will there be enough of them this time around? And is America to suffer the same fate?

John M Greco

The Wall Street Journal Runs a Front Page Liberal Electioneering Puff Piece on the Blue Dogs; Liberal Bias?

The Wall Street Journal is commonly, and mistakenly in my view, thought of as a newspaper with a “conservative” point of view, stemming, I think, first from a failure to separate and distinguish a paper’s editorial point of view from that of the “straight news” writers, and second, from unfamiliarity with the product.

The WSJ editorials are indeed conservative in point of view, but I have long been of the opinion that many if not most of the WSJ writers covering the political and economic beats are for the most part liberals. Many perhaps only mildly so, but it’s hard to tell how left they really are for their liberal slant oozes out in bits and dollops, here and there, usually restrained, in otherwise “straight” news stories. It’s in the subtleties, the different shadings sketched for liberals versus conservatives, and one has to be a regular reader to pick up on this stuff.

But here’s one sans subtlety, from the WSJ of October 26 (link). WSJ writer and columnist Gerald F. Seib has a paean to so-called “moderate,” so called “Blue Dog” Democrats and a lamentation of the bleak reelection prospects many of them are facing. This electioneering puff piece is given front page placement by WSJ editors.

The “Blue Dog” Democrats are, as is well known, Congressmen who talk like conservatives back home but vote like liberals in Washington. When their votes are not needed for passage of a liberal bill they get a pass for a “no” vote they can wave around back home to fool enough foolable voters. But their support for the ultraliberal radicalism of Obama, Reid, and Pelosi has unmasked them and destroyed the myth before suddenly attentive voters, and, as Obama’s mentor and spiritual advisor Rev. Wright famously once said, the chickens are coming home to roost.

But to Seib, on the front page of the WSJ no less, the loss of any of these so-called “moderate” Democrats is a “stark indicator” of how this election could result in a “more polarized” Congress. Apparently to him, the more Congressmen there are who oppose the ultraliberal agenda, the more polarized the Congress is. The Blue Dogs are a “human bridge” connecting Democrats and Republicans, and their loss would be a tragedy. On the Senate side, the late Ted Kennedy is held out by Seib for his ability to “cross the aisle” to “work with” Republicans, but to get them to do what I ask—of course to support the liberal agenda, and John McCain, at least until lately, is held up admiringly as one of those so snookered.

Much of the blame for the dire straits of the Blue Dogs, says Seib, goes to the “tea party movement,” which has produced a “crop” of candidates who, according to an unnamed “senior GOP House aide,” “aren’t interested in coming here to compromise.” How convenient for Seib, finding a “senior” Republican aide, rather than a Democrat one, to slam the tea party movement as loaded with rigid, uncompromising ideologues (how believable is this old bit -- using an anonymous “quote” by a Republican senior insider to slam Republicans?). Don’t you see, says Seib, even responsible Republicans think those damn tea partiers are extremists for not wanting to compromise with Democrats to support the ultraliberal agenda.

Liberals and most conservatives think the WSJ is as reliably conservative as the New York Times is reliably liberal. Would that only be so.

John M Greco

In the Bronx, Gangs Shouldn’t Be Assaulting Gays

It’s one thing for a gang to abduct and torture a victim because he’s white or rich or even a snitch, but when it’s because he’s gay, now that crosses the line.

From “CBS 2/ 1010WINS/ AP”: ‘Horrifying’ Anti-Gay Attacks Stun The Bronx (link):

City Council Speaker Christine Quinn, the city’s highest-ranking openly gay official, called the attacks “vile” and “horrifying.” “These attacks are appalling and are even more despicable because the victims were clearly targeted in acts of hate simply because they are gay,” Quinn said.

Missing from the article: one area resident, scurrying to meet up with his parole officer, said “We have murders and rapes every day in the Bronx, but to think that a man could get beat up around here simply because he’s gay is just horrifying.” Another, somewhat distracted by a chafing electronic ankle bracelet, muttered “I’m just stunned. How embarrassing for us.”

The new quip: "The Bronx destroyed – women, minorities, and gays hardest hit."


John M Greco

Our Lady of Sorrows Basilica

Some days it doesn’t take much – a comment, a picture -- to ignite old memories. Yesterday I read mention that today is the feast of Our Lady of Sorrows.

Some of the clearest memories I have as a small boy are the walks from our home in Chicago straight down Jackson Boulevard to a large church I later came to know is the basilica of Our Lady of Sorrows. We didn’t go there on Sundays, for our church, Resurrection, was in the next parish over, but I knew it held special meaning for my mother. It was large, quiet, dim, and mostly empty when we would visit on days warm enough for a walk. My mother would light a candle, spend a few moments in reflection, and we would be off.

I now read that Our Lady of Sorrows is the patron saint of Slovakia, the Molise region of Italy, and the Congregation of Holy Cross order of Catholic priests, who, among other things, run the University of Notre Dame. Who knew?

In Chicago Churches and Synagogues: An Architectural Pilgrimage, Fr. George Lane writes that the church was raised to the status of basilica (one of only two in Chicago) by the Pope because the Sorrowful Mother Novena rite originated there in 1937 and subsequently spread all over the world. The building was built by the Servite friars "in pure Renaissance form" and completed in 1901 of Chicago common brick with a limestone façade. Between two 200 foot towers, a great barrel-vaulted ceiling reaches 80 feet above the marble floor, and the beautiful main altar is made of white Carrara marble. The basilica features numerous original works of art and “perhaps the oldest working pipe organ Lyon & Healy ever installed.”

Richard Balsamo

Kent Chemical Laboratory at the University of Chicago

Bleary eyed, I would pack my books and papers for the day and leave Burton-Judson Courts to brave the wind gusting down the Midway Plaisance, then hustle through the Classics archway, past Bond Chapel, and across the main quad to Kent, pass through its heavy doors and on to its great octagonal lecture hall, for my first class of the day, early morning chemistry. And from an upper floor lab, as an overawed fresh undergraduate, I could wander down the hall and cross into its neighbor Jones Laboratory, and peer into the very small memorialized room where a weighable amount of plutonium was first isolated, a few months before man’s first controlled nuclear reaction was engineered in a squash court a block away.

Apparently I hadn’t had enough, for I returned the following year for an early morning class in organic chemistry, but, relievedly, from a room not so far away.

Kent Chemical Laboratory was designed by the University of Chicago’s first architect, Henry Ives Cobb, in his Chicago Gothic style and built of Indiana limestone in 1894. It anchors the north side of the main quad, alongside its close cousin Ryerson Physical Laboratory. Chicago Gothic doesn't get any better than these two.

Richard Balsamo

Related Post:
Ryerson Physical Laboratory – “The Most Beautiful University Building in the World”

The Jerry Lewises & Their Telethon

Like a rock of certainty in torrrents of change, Jerry Lewis came out again this year to host his eponymous Telethon to raise money for the Muscular Dystrophy Association in its work to help and cure those with neuromuscular diseases. His 60th year, I think he said, appearing in telethons for MDA. Now old and frail, Lewis did his segments his usual way, filled with the usual, effective, it seems, bathos, 1950s-era quips, and self-adulatory riffs.

I have had many friends with MD and many friends dedicated to helping them. Many feel quite schizoid about Lewis, and one old friend even created a comedy sketch around it that might make the comedian in Lewis proud. It features Good Jerry, the man who works tirelessly to raise awareness and money, and Bad Jerry, the megalomaniac who uses the words “I” and “me” a million times in the 24-hour telethon and refers to everyone even remotely associated with the charity as “his”, as in “my kids” and “my doctors” and “my firemen”, all of whom are there to “help” Jerry win his fight against neuromuscular disease. It’s Bad Jerry’s mission, and we’re all just helpers, accessories to the great man’s work -- a touch of a creepy self-cult of personality on display. So for many, the love-hate relationship endures.

But what a sight it’s been. Good Jerry’s out there all year fundraising for a most worthwhile cause, and brings it all together once a year in a TV extravaganza. The show itself for years has featured mostly minor celebrities and not-yet-celebrities and never-will-be celebrities (now who’s that performer?) in a production that’s a parody of its former self but yet remains somewhat inexplicably compelling viewing for those with heart and an appreciation for live TV as it once was. Bad Jerry thinks the big story’s all about him.

So once again Good Jerry and Bad Jerry have teamed up for another show, in all their florid glory. I wonder if anyone under 50 years old who pauses the tuner on the channel for ten minutes has much of an idea who Lewis is, or can fathom the stale, stiff, and often anachronistic jokes: in his opening monologue, unhappy with the cameraman’s framing of him, Jerry quipped “I got this guy from the Third Reich” -- the 1950s/60s Nazi theme that Jewish comedians like himself or Rickles might quip to anyone who seems to be doing them some disservice; it’s old , stale, and perhaps unintelligible to anyone unfamiliar with borscht belt-type comedy, but I, for one, love that style, at least now for nostalgic reasons even if most of the humor has long dried up, and I must admit a "Hey Lady!" now and then would still crack me up.

Though decades have passed, Good Jerry and Bad Jerry once again capture our attention, each in his own way, to goad us to help them help their kids, always plugging the “toll free numbers listed on the screen”. Now where’s that phone?


John M Greco