Links and Minifeatures 01 18 Thursday

RINO Sightings

**********



Okay, so it's not really schadenfreude, because it's not misfortune - these people did it to themselves.



Today's Wall Street Journal has a story (page d6 maybe - I got it from a fax)



If you are a subscriber, go to the WSJ site and search for "Ruling Faults Lender in Option ARM suit"



I won't repeat more than the high points lest I violate copyright, but basically this bank was selling negative amortization loans by pretending that it was a fixed rate loan at the nominal rate. The ruling makes clear that the lender had a responsibility to make it clear that only the payment is fixed. The court ordered the mortgage rescinded. Observers anticipate many similar lawsuits in the future (no kidding!)



I have had a number of people bring me sales pitches that they thought were for other types of mortgage due to the way the loan officers phrased things, but were really pitches for negative amortization. I wrote about one such couple in Games Lenders Play (Part IV). These people had no clue that these mortgages they were being pitched were negative amortization, with all their problems. Given my comparatively low traffic level and the fact that people keep being conned to themselves, I somehow doubt that these are the only people out there who have been burned.



**********



Flying their own planes saves time



Well, if you have to get to the airport 3 hours early for commercial aviation, that puts you 500 miles away in a small aircraft - much further than it sounds if you're thinking driving distance - and then you lose another 45 minutes to an hour getting your luggage. Not counting connecting flights and waiting for them.



On the other hand, general aviation is much more difficult than driving, and mistakes that will make you have to pull off to the side of the road in a car can kill you in an airplane. You need to be involved every minute with the plane, and maintain it, and prepare painstakingly for every flight. Buying the plane is also not for the weak of wallet. Back to the first hand, flying is not only rewarding, but fun, even while you're working your backside off.

U.S. plane manufacturers shipped 2,024 single-engine piston planes in 2005, up 19% from 2004. The industry expects an increase when 2006 numbers are tallied, and the same number or more this year.

But that's a long way from 35 years ago, where they delivered something like 20,000 per year. The ending of VA benefits for learning how to fly played a role in the decline, but thing that killed the industry was unlimited liability of the manufacturers. Cessna, Piper, and Beechcraft were once the three largest manufacturers of light aircraft in the world. No longer. Cessna and Piper shut down production of single engine aircraft completely in the eighties due to liability issues. When you're liable for the result when somebody buys the plane running it into the side of a mountain 12 years later, it makes it tough to do business. I'd guess that the costs of litigation still forms a large part of the price tag of new aircraft, as the prices I remember are much lower, and the article tends to confirm.



**********



"Well, the Anvil is falling at Mach speed and half a second from smashing everything, maybe I had better say something":



Bernanke: Budget action needed before "storm"



Calling the coming entitlement disaster a "storm" is like calling a Cat V Hurricane "a little wind"