Morning Report 9/25/12

Vital Statistics:

  Last Change Percent
S&P Futures  1454.8 3.4 0.23%
Eurostoxx Index 2553.3 -4.6 -0.18%
Oil (WTI) 92.97 1.0 1.13%
LIBOR 0.364 -0.004 -1.02%
US Dollar Index (DXY) 79.5 -0.015 -0.02%
10 Year Govt Bond Yield 1.71% 0.00%  
RPX Composite Real Estate Index 194.5 -0.2  

Markets are up slightly on no real news. Caterpillar issued a profit warning based a drop in capital expenditures from the miners, which is a bad sign for the world economy, particularly China. Nevertheless, commodities are up this morning. Bonds and MBS are up small.  

The S&P / Case-Schiller index showed a 1.2% annual increase in July. They note the recent strength of the housing market and that inventory is down.  FWIW, the strategist at Radar Logic (the publisher of the RPX index) believes the strength is a head fake due to the large amount of shadow inventory.  One big question regarding shadow inventory is how much has been picked over?  Is the remaining shadow inventory the least salable garbage that nobody wants?  If so, will its liquidation matter that much to prices? How much of it is vacant dilapidated blight in places like Detroit and Toledo, which will never sell and will probably get demolished?

Chart:  Case-Schiller:

 

The Romney campaign has released its plan for the housing market. The most significant departure from the Obama administration is an end to REO-to-rentals.  A President Romney, observing that a ton of money has been raised to invest in resi, would simply sell the property as opposed to using various strategies like REO to rental to keep it off the market.  He would end TBTF Fan and Fred (he doesn’t say how) and he would usher in “sensible, but not overly complex financial regulation to allow banks to approve loans to families with good credit rather than rejecting their mortgage applications.”  I take it the last statement means we will finally learn what the government considers a “qualified mortgage.” Basically, the plan boils down to “hit the bid, stop trying to manipulate the real estate market, and make some decisions on how we are going to regulate the banks.”  

RBS has been implicated in the LIBOR scandal, along with Barclay’s. This time, it looks like RBS was not simply falsely reporting LIBOR during the financial crisis to prevent a bank run, it was doing it over a longer period to benefit positions.  Regulators might let the first case slide; they certainly won’t let the second one.

Yet another unintended consequence of ZIRP – the death of the “free” checking account

Flip Flopper in Chief?

I just don’t see how someone with so many different opinions or statements on one subject can realistically believe he can or even should be President.

A quote from Romney’s book “No Apology”;

After about a year of looking at data — and not making much progress — we had a collective epiphany of sorts, an obvious one, as important observations often are: the people in Massachusetts who didn’t have health insurance were, in fact, already receiving health care. Under federal law, hospitals had to stabilize and treat people who arrived at their emergency rooms with acute conditions. And our state’s hospitals were offering even more assistance than the federal government required. That meant that someone was already paying for the cost of treating people who didn’t have health insurance. If we could get our hands on that money, and therefore redirect it to help the uninsured buy insurance instead and obtain treatment in the way that the vast majority of individuals did — before acute conditions developed — the cost of insuring everyone in the state might not be as expensive as I had feared.

It’s not as if this interview with Glenn Beck was while he was in college, it was in 2007.

When they show up at the hospital, they get care. They get free care paid for by you and me. If that’s not a form of socialism, I don’t know what is,” he said at the time. “So my plan did something quite different. It said, you know what? If people can afford to buy insurance … or if they can pay their own way, then they either buy that insurance or pay their own way, but they no longer look to government to hand out free care. And that, in my opinion, is ultimate conservativism.

And in a 2010 interview on Morning Joe he was asked if he believed in universal health coverage and said;

Oh sure. Look, it doesn’t make a lot of sense for us to have millions and millions of people who have no health insurance and yet who can go to the emergency room and get entirely free care for which they have no responsibility, particularly if they are people who have sufficient means to pay their own way.

And then surprise of surprises last night on 60 Minutes he reversed course.

“Well, we do provide care for people who don’t have insurance,” he said in an interview with Scott Pelley of CBS’s “60 Minutes” that aired Sunday night. “If someone has a heart attack, they don’t sit in their apartment and die. We pick them up in an ambulance, and take them to the hospital, and give them care. And different states have different ways of providing for that care.”

h/t Sam Stein & Amanda Terkel

My oldest daughter finally convinced one of her friends to apply for the CA PCIP enacted as part of the ACA. Her friend Sara completely lost the ability to speak and also lost control of many motor skills while in graduate school about three years ago. Her medical insurance expired as she was forced to quit school and was also unemployable. Luckily, her partner was able to support the two of them, but just barely. Sara was unable to purchase health insurance and had no medical diagnosis so was also denied disability.

She has spent the last three years in emergency rooms and trying to get care and a diagnosis through the health department but most tests were denied and no one seemed able to make a diagnosis even though she has gone down hill dramatically in the past three years. At one point the state sent her to a mental health expert as they thought she was making herself sick or something. She now walks with the help of a walker, can no longer drive and barely leaves the house as it’s too much effort.

About a month ago she received her insurance through PCIP and was finally able to see both a GP and the neurologist he sent her to and now has a likely diagnosis and even medication to improve her condition. Her tests were ordered on an emergency status and she was diagnosed with PLS a very rare (only 500 cases in the US) and degenerative form of ALS (Lou Gehrig’s) that is not as deadly or rapidly progressive. There are treatments and while it is debilitating it isn’t a death sentence and can be mitigated while improving her quality of life.

We had a similar experience with our niece who died in 2008. We waited a very long time for her insurance company to approve the tests she needed but the approval never came. Instead she received a notice that her insurance had been terminated. We couldn’t get in to see a neurologist until we could prove we had the money to pay for whatever tests and treatment she might need. We converted our IRA’s to cash and put our rental house on the market but we were too late. While I was on the way to bring her home from Albuquerque to see the neurologist I’d found to treat her she had a seizure and died.

Mitt Romney can’t even seem to figure out if we have an obligation to help people in these circumstances or not.

Morning Report 9/24/12

Vital Statistics:

 

Last

Change

Percent

S&P Futures 

1446.6

-5.3

-0.37%

Eurostoxx Index

2553.6

-23.5

-0.91%

Oil (WTI)

91.84

-1.1

-1.13%

LIBOR

0.367

-0.002

-0.54%

US Dollar Index (DXY)

79.59

0.265

0.33%

10 Year Govt Bond Yield

1.72%

-0.03%

 

RPX Composite Real Estate Index

194.5

-0.2

 

 

Markets are lower after a disappointing German business sentiment survey and some German officials criticized Spanish Prime Minister Rajoy’s foot-dragging on an aid package.  The financial industry jobs bleed continues – after BOA announced it would cut 16,000 jobs late last week, RBS is cutting another 300 and Nomura is reorganizing (read cutting jobs) in its Asian Finance Unit. According to Olivetree financials strategist, this is just the start. Bonds and MBS are up.

The Chicago Fed National Activity Index deteriorated in August, which was the 6th consecutive month activity was below trend. The number came in at – .87, which is below the – .7 mark.  If the 3 month moving average falls below .7, it typically means a recession has already started. FWIW, employment was not the big driver – it was production.

Lennar reported better than expected sales and profits this morning. Stuart Miller characterized the housing market as “The housing market has stabilized and the recovery is well underway.  Low mortgage rates, affordable home prices, increased buyer confidence and an extremely favorable rent-to-own comparison are driving growth in each of our markets.  Additionally, reduced foreclosures and declining distressed home inventory are further contributing to the improvement in the housing market.”  Granted, the homeboys are the biggest cheerleaders of real estate there is, but still…  BTW, KB Homes was up 16.5% on Friday after it reported a good quarter.  LEN is up 4% pre-open.

After the fact, Shelia Bair thinks Hank Paulson’s bazooka was too big.

Saturday Football Open Thread, Week 4 (a.k.a. The Last Week of [Mostly] Meaningless Games)

It’s the last weekend before conference play begins, and I, for one, think that this pre-conference play lasts at least one–if not two–weeks too long.  But then, I’m a fuddy duddy when in comes to collegiate football, and I’d bag the BCS and the playoff system for a return to the traditional five Real Bowl Games (all but one of which began before my parents were born, let alone me, which truly qualifies me for fuddy duddy-hood) played on New Year’s Day.  Hey–you kids!  Outta my stadium!!

Pop quiz:  who can name the original five bowl games without resorting to The Google?

Anyway, to get back on track, Boise State barely squeaked by BYU on Thursday 7 – 6, and I’m not sure if that means that BSU has fallen off of its BCS-busting pedestal or if going independent has made BYU that much better.  I suspect the former.  Once again, LA-Monroe just barely lost to a major conference team when Baylor beat them 47 – 42 last night; if they stick to this form I can’t think of a team in their conference that can slow them down.  What’s what in ATiM world:

UAB is at osu (line: osu, spread 36.0)  This is one of those crazy pre-conference games that just doesn’t really have a good reason for happening.  Maybe a sinkhole will open up midfield and prevent osu from winning, but I’m not holding my breath.  [Update: osu wins 29 – 15]

UTEP is playing Wisconsin (line: UW, spread 16.0)  Go, Badgers!  [Update: UW wins 37 – 26]

Miami (FL) is at Georgia Tech (line: GT, spread 12.5)  Go, Yellow Jackets!  [Update: Miami upsets GT 42 – 36 in OT]

Hapless Eastern Michigan is at MSU (line: MSU, spread 31.5)  I’m still feeling just a tad bitter about last week, but Go State!  [Update: MSU wins 23 – 7]

Idaho State is playing Nebraska (line: Nebraska, spread 0.0)  Another one of those conundrums.  Go Huskers, nonetheless! [Update: I’ve highlighted both teams–see Fairlington Blades’ comment below][Update 2: Nebraska smushes ISU with mega #RomneyStrength, 73 – 7]

Temple vs Penn State (line: PSU, spread 9.0)  Go, Nittany Lions!  [Update: PSU wins 24 – 14]

USF is playing Ball State (line: USF, spread 13.0)  Da Bulls!  [Update: Ball State wins in a upset, 31 – 27]

Cal is at USC (line: USC, spread 16.0)  Why they’re bothering to rank USC when they can’t play in the post-season continues to be beyond me. . . [Update:  see Mike’s comment below][Update 2: USC wins 27 – 9]

The Big Game this week is Michigan vs Notre Dame (line: Notre Dame, spread 6.0)  C’mon, Wolverines, give me some pay-back here!  [Update: Notre Dame in a blowout 13 – 6.  The score doesn’t really reflect how ND absolutely dominated UM]

Kansas State takes on Oklahoma (line: OU, spread 16.0)  What’s that Sooner cheer again, okie??  🙂 [Update: KSU also wins in an upset 24 – 19]

Syracuse is at UMinn in intra-ATiM play (line: Syracuse, spread 1.0)  I’ll let Scott and bsimon duke it out over this one, but it sounds like it should be a good game. [Update: Minnesota 17 – 10]

Utah vs Arizona State (line: ASU, spread 4.0)  I think this one’s a toss-up.  Go, Utes! [Update: ASU in a walk, 37 – 7]

Arizona is playing Oregon(line: Oregon, spread 21.5)  OK, ‘Cats, prove them wrong!  [Update: Oregon 49 – 0. Ouch!]

Off this week are BC, Stanford, and Texas.  This week feels more like the pause before the storm than real football, but here’s hoping all the “right” teams win!  I’ll be out of the loop at a Race for the Cure luncheon for a chunk of the day, so anyone who wants to should feel free to edit this to update scores and provide commentary.

Note to lms:  at least your Angels have a 9% chance of making the playoffs–the Mariners have a 0.0% chance!

Morning Report 9/21/12

Vital Statistics:

Last Change Percent
S&P Futures 1459.3 5.5 0.38%
Eurostoxx Index 2569.4 16.4 0.64%
Oil (WTI) 93.42 1.0 1.08%
LIBOR 0.369 -0.004 -1.01%
US Dollar Index (DXY) 79.11 -0.303 -0.38%
10 Year Govt Bond Yield 1.79% 0.02%
RPX Composite Real Estate Index 194.5 0.0

Markets are higher this morning on no real news.  Today is Triple Witching (the expiration of Sep index options and futures) so sometimes you get funny moves pre-open and on the close. There is no economic data this morning. Bonds are down a few ticks, while MBS are up a few.

KB Home reported good numbers last night, with 16% increase in revenues and a 33% increase in backlog. “It is clear that the recovery in housing is gaining momentum across the country as inventory levels are declining and home prices are on the rise.  In particular we are seeing dramatic improvement in California, where we are the state’s largest homebuilder, as the continued strengthening in the coastal markets is now spreading inland to Sacramento, the Central Valley, and the Inland Empire.”  The stock is up 2.5% pre-open.

While housing is definitely improving here, Europe still has to contend with its slow-motion bank run.  Which means that banks in Spain or Italy have to increase deposit rates to prevent capital from leaving, which naturally gets passed on to borrowers.  Which contracts credit in spite of what the ECB is trying to do.

The Senate is looking into high frequency trading. The regulators are looking into whether HFT increases volatility, which is the wrong question to ask.  The correct question to ask is if they are front-running orders – meaning if you enter your order to buy 200 shares of Apple stock via your Charles Schwab account, does someone see your buy order before it hits the exchange and are they stepping in front of you and buying the stock that is out there in the hopes of selling to you a penny or two higher?  Arbitraging the different exchanges is one thing – front running is another.  To put it in perspective, if I did that as a block trader, I would probably lose my job and maybe my Series 7 license if the regulators found out. This could become a battle royale, because the NYSE loves HFT because it is such a money maker.  And it is a private entity. However as Jack Reed points out, the capital markets are also a public good.  Meh, as much as I used to gripe about the specialists on the floor of the NYSE, they did serve a purpose.  But market-making, at least in the equity markets, is long gone.

Warfare and Technology

I just assumed our technology was superior than the Taliban’s.  And it is.  But that doesn’t necessarily mean better.

A key realization: the enemy uses cheap night vision gear in the form of cameras that have night functions.  When our IR lasers, our IR strobes, our IR illumination or our IR spotlights are radiating, they can easily be seen using cheap digital cameras.  I recently told this to some Norwegian soldiers, who were as surprised as our soldiers to learn it.  I learned this from the enemy, not from our guys.  The Taliban even use smart phone cameras to watch for invisible lasers.  The enemy in Afghanistan has been caught using cameras for night vision.  It is just a stroke of common sense: I have been doing it for eight years since I noticed an IR laser one night in Iraq.

 

Whole thing here.

Money, money, money, money……………MONEY

I read this yesterday and thought it was depressing.  I learned that Riverside County (my county) sits at just under 17% poverty, median income is down another $3,000 since last year  and 3 times as many residents need food stamps now than needed them in 2007.  These are some of the people who don’t pay federal income taxes I guess.  I’ve never understood why, when people need the safety net the most it is always under the biggest threat.  It’s almost as if we blame the victims of the recession for the recession.  I’m sure it all comes down to money and we know it didn’t just disappear so where is it?

I read this in TomDispatch:

Here’s what the latest census data tell us: in 2011, the middle class shrank to “an all-time low” (as the Washington Post headline had it), while the income of the wealthiest Americans continued to climb.  The poverty rate leveled off at a still shuddering 15%, with more than one of every five Americans under eighteen living in poverty.  The Gini Index, a measure of income inequality, rose by 1.6%, the “biggest one-year increase in almost two decades.”

In a way, of course, this should be no news at all.  Middle-class wealth has taken a staggering hit since the economic meltdown of 2007 (and African American and Hispanic wealth has gone through the floor). This disaster, linked to the Great Recession, has had a sideline effect.  On the theory that what goes up must come down, money flooding out of American households and into the coffers of the incredibly wealthy and their corporate cronies has also been flowing back down in tidal amounts.  It’s been pouring biblically into this season’s political campaign.

The news out of the dog days of August, for example, was that the Obama and Romney campaigns had raised a total of more than $225 million dollars that month alone.  (In the 1984 presidential campaign between Ronald Reagan and Walter Mondale, the two candidates raised a “mere” $202 million during that whole election season!)  And, of course, those figures don’t even include the dollars filling Super PACs to the bursting point and the “dark money” going into the 501(c)(4)s that don’t have to disclose where their contributions even come from.  (Eight of the top 10 Super PACs are “conservative,” reports the Daily Beast, and 77% of all contributions this campaign season will come from “business interests,” according to the invaluable Open Secrets website.)

Tom went on to publish parts of an essay by Lewis Lapham that I thought was well worth the read.  It’s the same link, the essay is under Tom’s comments which I quoted above.

Thomas Paine in the opening chapter of Common Sense finds “the strength of government and the happiness of the governed” in the freedom of the common people to “mutually and naturally support each other.” He envisions a bringing together of representatives from every quarter of society — carpenters and shipwrights as well as lawyers and saloonkeepers — and his thinking about the mongrel splendors of democracy echoes that of Plato in The Republic: “Like a coat embroidered with every kind of ornament, this city, embroidered with every kind of character, would seem to be the most beautiful.”

Published in January 1776, Paine’s pamphlet ran through printings of 500,000 copies in a few months and served as the founding document of the American Revolution, its line of reasoning implicit in Thomas Jefferson’s Declaration of Independence. The wealthy and well-educated gentlemen who gathered 11 years later in Philadelphia to frame the Constitution shared Paine’s distrust of monarchy but not his faith in the abilities of the common people, whom they were inclined to look upon as the clear and present danger seen by the delegate Gouverneur Morris as an ignorant rabble and a “riotous mob.”

From Aristotle the founders borrowed the theorem that all government, no matter what its name or form, incorporates the means by which the privileged few arrange the distribution of law and property for the less-fortunate many. Recognizing in themselves the sort of people to whom James Madison assigned “the most wisdom to discern, and the most virtue to pursue, the common good of the society,” they undertook to draft a constitution that employed an aristocratic means to achieve a democratic end.

Accepting of the fact that whereas a democratic society puts a premium on equality, a capitalist economy does not, the contrivance was designed to nurture both the private and the public good, accommodate the motions of the heart as well as the movement of the market, the institutions of government meant to support the liberties of the people, not the ambitions of the state. By combining the elements of an organism with those of a mechanism, the Constitution offered as warranty for the meeting of its objectives the character of the men charged with its conduct and deportment, i.e., the enlightened tinkering of what both Jefferson and Hamilton conceived as a class of patrician landlords presumably relieved of the necessity to cheat and steal and lie.

Good intentions, like mother’s milk, are a perishable commodity. As wealth accumulates, men decay, and sooner or later an aristocracy that once might have aspired to an ideal of wisdom and virtue goes rancid in the sun, becomes an oligarchy distinguished by a character that Aristotle likened to that of “the prosperous fool” — its members so besotted by their faith in money that “they therefore imagine there is nothing that it cannot buy.”

Morning Report 9/20/12

Vital Statistics: 

  Last Change Percent
S&P Futures  1447.3 -5.9 -0.41%
Eurostoxx Index 2545.6 -22.1 -0.86%
Oil (WTI) 91.68 -0.3 -0.33%
LIBOR 0.373 -0.003 -0.73%
US Dollar Index (DXY) 79.48 0.423 0.54%
10 Year Govt Bond Yield 1.73% -0.04%  
RPX Composite Real Estate Index 194.1 -0.1  

Markets are lower this morning after some disappointing European reports and a soft initial jobless report. 383K people filed for unemployment last week, higher than the survey of 379k.  Last week was revised upward as well. Later this morning we will get Leading Economic Indicators. Bonds are up a point and MBS are up 1/4.

It looks like HUD paid out over $1B in false claims for its Preforeclosure Sale Program. The program ran from 9/10 to 8/11 and paid out $1.7B in total.  It was intended to help homeowners who must sell their home for less than it was worth, provided they had an unavoidable financial crisis, lived in the home and did not have sufficient income to make the payments. The IG sampled 80 random cases and found 3/4 failed to meet the criteria. Ironically, it may have been a blessing in disguise since the homes would have probably gone into foreclosure anyway and FHA would have lost more in that event. 

FHFA has sent to the Federal Register its approach for setting guarantee fees on a state-by-state basis, to account for the fact that foreclosures take longer and are more expensive in some states than others.  Housing advocates will undoubtedly object strongly to this measure. I guess they believe that borrowers in non-judicial states should subsidize borrowers in judicial states.

On the back of yesterday’s WaPo story highlighting the difficulty the Fed is having getting the benefits of QE to Main Street due to bottlenecks in mortgage origination, Bank of America announced they are cutting 16,000 jobs by year end, of which 3200 are in new mortgage origination. It is astounding how much national  capacity has been taken out of mortgage origination over the past 5 years. I suspect a lot of people will find themselves caught flat-footed when the turn happens.

Bites & Pieces: ¡Ceviche!

Raw fish is eaten round the world. Sushi and sashimi from Japan, crudo and carpaccio from Italy, and Gravlax from Scandanavia to name a few. Hawaii has contributed poke, a kind of tuna tartare. I was first introduced to it at the Yardhouse in San Diego. The best I’ve ever had was at the East Coast Grill and Raw Bar. A friend of the owner had caught a tuna off Cape Cod the day before and so they were featuring it that night. Then there are the raw oysters that I happily slurp at Clyde’s for happy hour. Anything from Prince Edward Island is worth a taste.

Latin America’s contribution to the world of raw fish is ceviche. I was introduced to ceviche during my first visit to Costa Rica. My then girlfriend had never had a serious boyfriend before, so much of her family was curious about the gringo coming down for her brother’s wedding. My Spanish was minimal back then and I remember being reduced to saying ¡me encanta Costa Rica! as folks chatted with me at the end of the reception. All in all, a good trip. We were married one year later to the day.

Ceviche is distinct from sashimi, carpaccio or tartare in that the fish or shellfish is “cooked” in lime juice. Citric acid alters the chemical and physical properties of the proteins in the fish. This process of denaturation turns the flesh firm and opaque, as if it had been cooked with heat. One still needs to use high quality fish as the marinade is not the same as cooking. Then again, if I’m having a medium rare steak, it should be high quality meat.

For this post, my starter material is a book on ceviche from Guillermo Pernot. He had a great restaurant in Philadelphia (since closed) and is now with the group behind Cuba Libre. That’s a rum and coke with some lime juice.

Let’s start with basic ceviche. First, create the marinade. Half a cup of fresh lime juice, a quarter cup of orange juice, and 2 teaspoons of kosher salt. Fresh is key here, so juice them yourself. Next, cut up about a pound of fish into roughly quarter inch dice. Mahi mahi and red snapper are great choices. Tilapia is fine, if a bit bland. Let the fish marinate an hour or so and then add diced tomato, some minced onion or shallots, some minced cilanto, and some minced chiles (bell, jalapeño or Serrano peppers, depending upon your heat tolerance). If there’s something you think goes with this, enjoy! Serve with tortilla chips. Costa Ricans like to have a mix of ketchup and mayo on the side. I call it salsa tica and it’s good.

Shellfish is also good for making ceviche. If you’re worried about raw fish, parboil some prawns and cut them into small pieces. Shrimp cocktail from the South! Scallops make fantastic ceviche. Just toss whole bay scallops or sliced sea scallops into the marinade and let them sit for about 15 minutes.

Those are the basics. Now let’s get a bit fancy. I mentioned the Pernot book, which I should note is a gift of Natasha Bonilla, a family friend. The recipes are restaurant complicated, but I’ve tried a few at home and they rock. They’re also doable for the home cook. Here are a few of my favorites:

Hamachi Ceviche with Trio of Peppers Salad

This one looks great. There’s a fair amount of chopping involved, but it’s worth it. It’s terrific with an unoaked Chardonney. Heck, live a little and pick up a bottle of white Burgundy.

Citrus Dressing

½ cup fresh lemon juice

½ cup fresh lime juice

½ cup fresh orange juice

1 tablespoon sugar

2 tablespoons oil, infused with garlic*

2 tablespoons annatto oil*

2 teaspoons kosher salt

Combine all the ingredients in a blender until emulsified and set aside.

*I take whole cloves of garlic, mash them slightly with the edge of a knife, and put on the stove over low heat. Let it go for about 15 minutes and then strain. Annato seeds are used to color oil. Traditionally, it’s made the same way that I make the garlic oil. Put the seeds in oil and heat up until colored. For this recipe, I can simply do everything in one batch. You can also find annatto seed powder, which simplifies the whole process. If all this seems a bit too much bother, use a flavored oil or neutral salad oil.

Assembling the ceviche

¾ pound skinless hamachi, sliced thinly (yellow fin tuna)

1 large, evenly shaped red bell pepper

1 large, evenly shaped yellow bell pepper

1 large poblano chile

1 cup of arugula sprouts or thinly sliced arugula

½ red onion, sliced very thin and rinsed under cold water

Salt and pepper to taste

Combine the sliced fish with half the citrus dressing. Cover and refrigerate for 30 minutes.

Slice the top and bottom from the bell peppers. Cut open along one side and remove the seeds and the white membrane. [Pernot instructs one to remove the top layer of watery flesh from the inside as well, but I’d say that’s optional.] Slice each pepper into very thin strips—a mandoline is very helpful here. Do the same for the poblano chile.

Toss the peppers with the remaining citrus dressing. Lightly toss the fish, pepper mixture, arugula and red onion. Adjust the seasoning with salt and pepper. Arrange onto 6 chilled salad plates. [Oh, did I forget to mention that you were supposed to serve on chilled plates? Sorry about that.]

Bay Scallop Seviche with Blackened Tomatillo Truffle Sauce

This one will bring the house down. The ingredients are widely available and it is great for a crowd. Truffle oil is pricey, but a little goes a long ways. Trader Joe’s used to carry truffle oil, but no longer. I find it at World Market. Wine stores often carry some. For this dish, I think black truffle oil makes the most sense.

Let’s start with the plantain chips. You can buy them and they’re quite acceptable. Fresh is best, though. For this, you need green plantains. Cut off the ends, remove the skin and slice into planks. The best way I’ve found is to use a cheese slicer. It makes even plantain slices. Heat up a half inch or so of vegetable oil in a dutch oven or cast iron pan. Fry the slides and set them on paper towels to drain. Toss with a bit of salt.

Blackened Tomatillo Truffle Sauce

3 tablespoons extra virgin olive oil

½ pound fresh tomatillos, husks removed and rinsed

½ pound ripe plum tomatoes

1 red onion, quartered and unpeeled

4 cachucha* chiles

1 jalapeño chile

1 bunch fresh cilantro leaves

3 tablespoons truffle oil

salt & pepper to taste

There are two ways to cook the tomatillos, tomatoes, onion and chiles. Pernot does it on the stove top. Heat a tablespoon of olive oil over med high and add the tomatillos, tomatoes, onion and chiles. Cook, tossing frequently, until the skins are blackened. I like to toss them all with the olive oil and use our toaster oven. I preheat it to 350, put the veggies on a tray, and then move it to broil until the skins blacken (about 10 minutes).

Once cooked, put them in a food processor and cool to room temperature. Add the cilantro and pulse briefly until the vegetables are chopped but still chunky. You can also put everything through a meat grinder. Finally, add the remaining ingredients, taste to check seasoning, and refrigerate.

*I don’t know where to get these either. It’s a native Cuban pepper that looks like a habañero, but has much less heat. I’m fond of Serrano peppers, so I just use 4 of them and skip the jalapeño. If you prefer to keep heat levels down, just use jalapeños.

Bay Scallop Ceviche

1 cup fresh lime juice

¼ cup fresh orange juice

3 tablespoons finely diced red onion (or a lg. shallot)

1 tablespoon kosher (or sea) sallt

1 pound fresh bay scallops

Combine everything but the scallops in a nonreactive (stainless steel or enameled) bowl. Add the scallops and toss to combine. Cover and refrigerator for 24 hours.

Drain the marinade from the scallops and discard. Combine the scallops with most of the sauce and refrigerate for at least 20 minutes. When ready to serve, drain the excess liquid and add the rest of the sauce. A great way to serve this is to put the ceviche onto spoons and top with some crumbled plantain chips. Serve accompanied with plantain chips.

Tuna Ceviche with Roasted Calabaza

This is a three level ceviche. The base is roasted calabaza, a squash. You can use butternut squash for this and do well. On top of the squash is a layer of tuna. You’ll want high quality stuff for this. When I can get bluefin tuna, this is what I make. Thie dish is topped with a peppercress salad (watercress works just fine).

OK. For the base. Have one pound of calabaza (or butternut squash), peeled and cut into half inch cubes. Seasons with salt and p\epper and toss with olive oil. Roast in an oven at 425 degrees for 15 to 20 minutes, shakng and tossing once or twice, until it’s browned and crusty on the outside. Remove from the oven, cover and chill.

Now the salad. Combine half a pound of peppercress (or watercress) leaves with a quarter cup each of lemon and lime juice, a tablespoon of pumpkin seed oil (you can find it at World Market), and some salt and pepper. I’d use a high quality nut oil as the first alternative and good EVOO as the second.

Last, the good stuff. Make an emulsion of a quarter cup each of olive oil, lemon juice, and lime juice, 2 tablespoons of pumpkin seed oil (or nut oil or more olive oil,. Reserve a quarter cup of this. To the rest, add a pound of diced, sushi grade ahi tuna. Season with salt and pepper to taste. I go light on salt and a bit heavy on pepper. The recipe calls for a quarter cup of pepitas, which can be found in Latin American markets.

Let’s put it all together. It helps to have a ring mold to do this. Make a half inch thick base of roasted squash, Put on top of this another half inch of the marinated tuna. Top with the salald and a bit of reserved emulsion.

It’s a fantastic fall dish.

Taxation Ideas – publish yours here!

I don’t believe in moral arguments about taxation, except at the fringes.

This is a governmental function, burden, and necessity which we can choose or scrap, and the principles should be transparency and honesty, while raising only the revenue necessary to the functions we choose our government to perform. At the fringes, where I think an element of morality can be injected, we cannot have a tax system that destroys or seriously injures anyone, or that treats similarly situated taxpayers quite differently. No one likes taxes, but we all should be able to live with them, and the power to tax, abused, is the power to destroy.

Were I the God of Tax, I would scrap personal and corporate income taxes for a system that relied on:

1] V.A.T. – competitive rate with Canada
2] automated transfer payment tax – agreed rate by treaty among North America, EU, Japan, Australia and New Zealand, at a fraction of 1% on every single transfer in and out of a reporting institution
3] tariffs and excise taxes subject to change from time to time, as policy trade and commerce tools
4] leasing public land for private use at realistic economically viable rents
5] a carbon tax, but only if set by agreement among our trading partners and ourselves

I would scrap the Gift and Estate Tax.

I would keep the payroll tax and attempt to preserve the [partial] insurance nature of SS/Medicare.
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The above will not occur in my lifetime. So I would tweak the current system as follows, in the interim.
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Corporate tax: flat rate 30% on net taxable income. I would allow the deduction of dividends in the calculation of net taxable income.

Personal income tax: No itemized personal deductions, but a standard deduction for all roughly equivalent to the minimum wage: say, $15K single, $30K married. Then a flat 30% rate above that. Dividends and interest would be taxed as ordinary income. CG holding period would be extended to 5 years as a prerequisite to get the benefit of 15% rate. Less than five year hold = short term CG, and taxed as ordinary income. No carried interest exception, and hedge fund managers would be treated like real estate investors.

Retain the current Gift and Estate tax scheme with $5M exclusion.

Tweak the payroll tax to produce more revenue for SS/Medicare AND raise the retirement age, but keep early retirement option, at reduced bennies, at 62.

No AMT. No EITC. No CTC.

I have tried here for minimal tweaks that lead to simplification and ease of computation and collection. It seems to me that almost everyone would be paying more tax than we do now under my interim proposal. If that is a function of the arbitrary rate I assigned, and if a lower rate would balance the budget at 7% unemployment and produce surplus below that number, I would be all for the lower rate.

Enjoy!