Saturday, March 31, 2007

Economic Lessons in Canada Abound

Well it's a first for Captain Capitalism as this (are you ready? are you sitting down?) is the very first time I've made a post...


Yes, from scenic Thunder Bay, Ontario.

Actually, the landscape to the south is scenic and beautiful. The town itself, is (sorry my Canadian friends I hate to be so blunt) HORRIBLE!!!!

OMG! It's like a communist country in terms of the architecture here! Square, bland, gray or tan buildings. No ornate structures. The casino was literally, LITERALLY the best designed thing closely followed by the water company's building. WAL-MART is actually a better than average looking building! When I got to the "strip mall area" that cookie cutter, mass-produced suburban strip mall motif where they cram a Blockbuster in with a Subway a Starbucks an Applebee's and a Barnes and Noble all into one block it actually was a site for sore eyes!

Now, that being said, there is an AMAZING economic phenomenon going on here that shall make for a GREAT economic lesson that I shall share with ye all whenst I return.

Also, we've had some entries for Captain Capitalism's Annual Chart contest, but NONE OF OUR CANADIAN FRIENDS HAVE ENTERED! (Actually, neither have any other friends from any other countries)

It's just a bunch of us American schlepps thus far!

You don't want the Americans to dominate in yet ANOTHER field and competition do you?


Friday, March 30, 2007

Thunder Bay, Eh!?

So it was 1984 and I was about 9 years old whenst I was last in Canada. I fondly remember threatening my younger sister that we'd push her over the falls without the aid of a barrel. Ahhh, memories.

Regardless, it's time to take a breather with the temporary lull in busy season (actually a freak schedule opening that allowed for a three day weekend) and head up north to Thunder Bay, smoke some Cuban cigars and uh...well umm...I guess that's really the only reason we're going.

Any of you Canucks that read this blog have any recommendations on what to do in Thunder Bay?

The Housing Bubble Will Increase the Divorce Rate

Hee hee hee! Trouble in paradise?

I love it when the fake richey riches have to pay the piper.

I also forecast something nobody else has forecasted about the fall out of this here housing bubble bursting;

There will be a lot of divorces as a lot of men kept their true finances from a lot of wives and whilst those wives were used to living a lifestyle of $2.3 million McMansion and driving that Lexus SUV and having sushi every night while they went and had $5 mochas with the neighborhood wives club during the day, they will soon find out their net worth is "-$200,000" and they now have to sell the house, sell the car and move to an apartment in a blue collar neighborhood.

Yeah, right, as if.

Thursday, March 29, 2007

South America's Sole Adult

Alvaro Uribe

Amazing what happens when you put the grown ups in charge; actual progress.

I would love to pit Hugo Chavez's and Evo Morales' progress against Uribe's.

Wednesday, March 28, 2007

"Hey, Why Do I Have to be the Poop Checker?"

One of my favorite movies is Ice Age. Manny the large, ornery mammoth and Sid the Sloth take this human infant and try to reunite it with its family. On the way of course the kid is crying and they surmise the kid may have filled his shorts. Manny looks to Sid and says,

"You, check for poo."

Sid contests, "Hey, why do I have to be the poop checker?"

To which Manny responds,

"Because bringing the kid along was your idea in the first place. Because you're small and insignificant. And because if you don't I'LL PUMMEL YOU!"

And it's times like these where I think society needs a little more of the stern, fatherly Manny type approach to disciplining children and people and a little less coaxing and motherly/bribing approach.

Why do I say this? Well it seems some teenagers in Britain went and protested at parliament because they weren't getting enough funds for after school activities and other such things.

Their rationale was that if the government just gave them some money for these after school programs and support programs then these children wouldn't get in trouble with the law, start fights and would behave etc.


That's called blackmail. "Pay me or I will do something to you that is dislikable. Pay me or else!"

What happened to the days when kids would behave because of the merits of behaving? What happened to the days of understanding that you follow the law and do not break out into fights because society would otherwise degrade and collapse and it would be a reenactment of "Lord of the Flies?" And above all, what happened to the days where parents would instill morals and merits upon their children via discipline????

Alas, that is where the problem probably lies; the parents. I have to keep reminding myself whilst I'm not ready for marriage or children, my generation is currently the highest volume producers of them. And knowing the quality and caliber of Gen X (here or in Britain) it should be no surprise that my generation's offspring is just as screwed up as we were if not, worse.

Furthermore, this attitude that "we are entitled to money and funds for just behaving like normal, responsible kids" can only be the product of a severe dearth of fatherly upbringing.

Notice I didn't say "fathers." I meant "fatherly upbrining." As in spanking. As in yelling. As in Manny pummelling Sid.

As in, "Just you wait! When your father gets home...."

And then the insufferable agony of waiting until your dad came home to righteously pummel you, where that was worse than the punishment to the point you'd contemplate running away.
Not this, "well, it's time for a time out."

Or, "that's it, you are docked 3 behavior points. No Sponge Bob Square Pants for you."

Or you idiotic parents trying to reason with a 3 year old child with your euphemistically name "30 something adult logic."

I want Bill Cosby, full out, "LET THE BEATINGS BEGIN!"

That's what I'm talking about.

Of course, that is taboo in today's society (and a reason why I shy away from having kids). Some idiot congresswoman in California just tried to make it illegal to spank your children. France was kicking around the idea. The goal effectively relegating parents to only positive reinforcement methods to discipline their children.

Some say, "positive reinforcement methods" I call it "bribery." And as an economist I know discipline is cheaper than bribery.

However, that may be the key to this push (predominantly from the left) to abandon discipline and replace it with bribery. I always said, in my years substitute teaching in the public schools, that if I was allowed to discipline the kids, I could handle a class room of 100 students, by myself, and they'd learn and score better than any other class in the school district. But well behaved students don't bring in special education money.

Well behaved children, don't bring in the money for counselors and therapists and consultants that account for the plurarlity of the education budget. Well behaved children don't bring in the extra funds for behavioral modification classes. Additionally well behaved people in general require less and less government spending be it less money spent on the court system, less money spent on the police or less money spent on rehab/prisons or the bevy of other government programs to deal with the problem makers of society.

And that seems to be the enemy; well behaved people. In an insanely cynical pining I wonder if that isn't the goal of the left. To get an entire generation of irresponsible misfits into the population so that there is such chaos and tomfoolery, that it provides them the political rationale to provide trillions upon trillions of dollars in social spending to deal with the problems and , oh, how about that?, provide them with life long employment in the social services sector.

Of course the true victims of this inanity and the refusal to discipline our children will be those poor kids pictured above, living in La La Land thinking they should get paid for just staying out of trouble. Sadly for these youth, without the harsh Manny pummellings, something tells me they'll inevitably all have careers as poop-checkers.

Tuesday, March 27, 2007

Send Me Your Weak, Your Tired, Your Charts

Hi All,

Busy week here in Cappy Cap World, for some reason the spring and warm weather has boosted my work load (studies on GDP growth versus warm spring temperatures anybody?), thus since I am a lazy bastard I think it's time for once again;


Yes, Captain Capitalism's Annual Chart Contest where you aspiring, junior, deputy and official economists can send in your charts and compete to win



A signed autograph of the Captain himself!

How can you NOT participate!?

E-mail your best charts to

And I do honor my payments and prizes

Ask last year's winner, Doink!

Monday, March 26, 2007


Ladies and gentlemen, the Captain has just received what he deems to be LITERALLY the best compliment he has ever received;

"You're like an evil Cary Grant."

Yes, yes I am.

Yeah, Right, "Poor"

I love these charts! Thanks to Dr. Bob for forwarding the info.

Remember these charts when it comes to tax season and the next time some one says the rich doesn't pay their fair share.

Sunday, March 25, 2007

Happy Happy Joy Joy

I would have thought Latin America would be poorly ranked.

Would be curious to see how tropical temperatures and climes affect this.

Never Has So Much Poverty Been Eradicated by the Production of So Much Wealth Made By So Many

You just got got to be amazed with China. Europe gets all giggity giggity when they have positive economic growth, we stroke our beards here in the US when he exceed 3%. China feels bad if it falls below 8%.

Saturday, March 24, 2007

The Museum of Communism

This was sent to me a while ago, never got around to posting it.

But I love it. The Museum of Communism, right next to the McDonald's and casino.

It again points out something I've always said;

Capitalism isn't an option. It's reality. It's whether a people or a country wants to live in reality or try to ignore it to their economic demise.

Friday, March 23, 2007

How the Brits Will Stop the Housing Crash

Normally if somebody came up to me and said, "hey I want to build some condos in Florida, what do you think?"

I'd say, "Go to the credit unions. They're wanna-be banks, and stupid enough to loan the money to you."

However, I have to hat tip it to some savvy developers who realized while demand in America for American property is all but satiated, demand for American property by FOREIGNERS is not.
Particularly the British.

Brits, generally like America. They speak the same language. We're from the same stock and they do vacation here. And well-to-do Brits who make the jump to the US are starting to demand a "cabin" in the colonies.

But there are two things playing to their advantage;

1. The Pound has increased 20% against the Dollar in the past 5 years making US property more affordable

2. (And although I don't have this confirm) the British are allowed to withdraw, tax and penalty free, a certain percent of their pension for other investments. Property in the US presumably qualifies.
This, no doubt, would be viewed by most overleveraged Americans as a good thing as this additional demand would increase the value of their homes.
My question is how many of those same Americans ignorantly blather on about the horrible evils of globalization.

Wednesday, March 21, 2007

The Baby Boomers' Worst Nightmare

There are examples throughout stock market history of the stock market experiencing 20 year dry spells where after 20 years the market didn't do much but break even.

The "Nifty Fifty" is a perfect example where back in the 50's and 60's if you invested in the (I think) top 50 companies in the US then "nothing could go wrong." Of course, if you invested in 1965, then you would have had to wait until Reagan started turning the economy and market around in 1983 to break even.
Such a fear, a prolonged spell of 0 or perhaps negative returns haunts the baby boomers as they're approaching and some entering retirement. Used to the roughly 12% annual returns stocks provided over the past 20 years (driven primarily by them flooding the market with their retirement dollars), if such a spell were to hit now, their entire retirement plan would fly out the window.
Thus, it was an honorable chart says I when I happened upon this little ditty a couple days ago.
Have you switched to fixed income yet?

Tuesday, March 20, 2007

Soon, there will be No Private Sector

Mike Hodges over at the Grandfather Report is kind of one of the original inspirations of Captain Capitalism because during my research previous to the blogging days I would happen across his site A LOT whenst looking for particular data. He is the Yoda if you will of charting. So when I happened upon this chart it was no surprise to me that it was authored by Mr. Hodges and warrants posting.

Sadly this is a trend all of the western world is in and soon there will be no private sector.

Monday, March 19, 2007

Another Horrible Stock Tip from Captain Capitalism

As you all know instead of going on with lengthy legal disclaimers about investing if I wish to talk about investing, I opt instead to pick the WORST STOCKS POSSIBLE and then beg and plead with you not to invest in them because;

1. They are highly speculative.
2. They are highly risky.
3. You are pretty much guaranteed to lose any money you throw into them.
4. Only single people with no children and a rich uncle can afford to invest in these stocks.
5. You will contract ebola if you do.
6. You will have obese children should you procreate.
7. Hilary Clinton will become president.

But no, you idiots and morons out there are not going to heed my warning and still insist on losing all your money just like I'm about to with this stock.

The stock?


Shouldn't be too big a surprise, it was on Drudge a couple days back. They claim they are attempting to make a vaccine for the HIV virus. I say "claim" because no doubt they're probably taking all their capital and spending it all on styrafoam shrubs. And hey, ain't that just like me? I always pick the loser stocks.

So please, whatever you do,









All because you were foolish enough to invest in this never-to-be-profitable venture.

What's Wrong with this Picture?

So I saw this on Fox News and I highlighted something I found odd.

So aspiring and/or junior deputy economists, anybody want to tell me what the REAL problem here is?

Hint - It's not the fact some child who should be too young to know what crack is brought it to school for show and tell.

Sunday, March 18, 2007

Thank the Chinese and the Arabs for Your High House Prices

What I find interesting is that, presumably, people that are much higher ranked than me, with much higher offices and fancier cars are paid the big time bookoo bucks to know more than I do.
Which I find interesting because usually I'm explaining to them that one cannot just look at the US and expect to find the reason why we had this housing bubble form. Sure they say, "well, interest rates are at historic lows." I even remember somebody saying, "we don't have to worry about interest rates because the Federal Reserve will lower interest rates to keep the economy going" because he didn't know that the Federal Reserve only controls the Federal Funds Rate, not the 30 year conventional mortgage rate. None of them know there's an international component to the housing bubble formula. None of them know the relationship China (and to a lesser extent) Arab nations have with our housing prices.

The short of it is that China and various Arab nations have effectively muted the "crowding out effect." Meaning, traditionally if the government ran large deficits (which it has under Bush Jr.) this meant the US government would have to borrow money from the markets to finance its expenditures, leaving less money to be loaned out to the private sector. This drove up interest rates as the supply of loanable dollars shrank. Normally this would then put a dampening effect on housing prices as people would not be able to borrow as much money at such high interest rates and therefore demand for housing would go down.

However, this assumes the US operates completely on its own, innoculated from the rest of the world....which it doesn't.

China, flush with cash from selling all of its wares to us, and Middle Eastern nations flush with cash from selling all of their oil to us (at very high prices) have been taking their proceeds and buying a larger and larger share of US government debt. This means the government doesn't have to come to US citizens to borrow the money and ensures the debt markets are flush with loanable dollars keeping interest rates at historic lows despite large government deficits.

Of course, the problem is what if China and the Arab nations get their fill of US government bonds and decide to stop loaning the US trillions of dollars? This would drive up interest rates and then put further downward pressure on our already deflating housing market.
Good thing they haven't started doing that!...Or have they?

Saturday, March 17, 2007

Friday, March 16, 2007

Happy St. Patrick's Day!!!

To the best Economists in the world!


Didn't Get to This

Wanted to talk about this on The Dave Thompson Show last week, but we didn't have time. Won't be back on the air for a while, but wanted to mention it because it is pretty freaking sweet.,10117,21363226-2,00.html?from=public_rss

Also here;

Reminds me Windtalkers. Unfortunately it was all about Nicolas Cage's "magical Thompson Machine Gun" that managed to hit every enemy and had limitless bullets and less about the Code Talkers calling in coordinates.

Libertarian Economics 101

Every libertarian knows this.

Sadly we seem to be the only people that know this. Wish the chart was more up to date.

The Ultimate Economic Slap in France's Face

All their talented wealth producers are leaving.

Thursday, March 15, 2007

But What Do I Know? I'm Just a Caveman

"Caveman Lawyer" was one of my favorite SNL skits. It consisted of Phil Hartmann dressed up as a lawyer who was a caveman. The punch line was that he was a very articulated and intelligent lawyer and would always end his arguments to the jury with, "but then again, what do I know? I'm just a caveman."

Sometimes I feel like Caveman Economist, trying to convince the powers that be that the housing market has got a ways to go. Then my supplier of real estate data hits me up with this;

But then again, what do I know? I'm just a caveman.

10% Tithing?

The chart deals more with the financial troubles the catholic church is running into, but I found one of the charts in the amalgamation particularly interesting (highlighted)

I thought it said in the bible that you should give 10%? I guess religious folk pick and choose which rules to follow.

You're Already Dead Blythe

Ronald Speirs. Shoots one of his own to save the company. Winters backs him up. Nobody thinks about it twice. We need more badasses like him.

The only thing I didn't see in the Wiki entry was his crossing the enemy lines twice whilst breaking out of Bastogne.

Anybody know if that's true?

Tuesday, March 13, 2007

Drive By Posting

Geez, no time this week. Sorry all, but busy season came in something fierce (I've been using that phrase ever since I started watching "Firefly"). So here's my quickie chart, no doubt some of you have seen from the genius Robert Shiller. Sometimes economists just need a quickie.

Monday, March 12, 2007

This One's for Paulette

Here's the e-mail

Make sure to copy and paste it. People keep misspelling it.

Ruining My Image of Southern Belles

I like calling Geico if for any other reason that their call center is in Macon Georgia which means if I get a female customer service rep then I'm guaranteed to hear that heavenly southern belle accent.

I was first exposed to it when I attended the Ludwig Von Mises Institute at Auburn University in Alabama. I walked into the dorms, registered with the attendant and she said, "Your room sir, is 420."

A solid week of solid economics and I don't remember anything but that voice saying, "420."

Even standard conversation, the southern belle accent makes anything sound grand.

"Would you like fries with your Big Mac sir?"

"Yeah, sure, whatever, load me up, whatever you want, I'll give you my house and my car and donate blood, declare war on a small third world nation, I'm still trying to digest what you said before, keep talking, just keep talking."

So it was sad to see The Economist come up with this interesting little chart.

Mayhaps it's best I just hear their voices over the phone.

Join Captain Capitalism on the Dave Thompson Show!

Hey all!

Good ol' Captain Capitalism will be subbing for Dave Thompson this evening, Central Standard Time from 8PM-11PM.

You can listen on AM 1500 KSTP, but if you're outside the Twin Cities area, fear not, you can listen online at

Call in 651-646-8255 or 1-877-615-1500!

Sunday, March 11, 2007

The Death of Health Packs

Sometimes you have to spend money to save money.

And I'm being serious about this, but I added it up once and roughly, very roughly if you are a 20 something of average income you will probably spend about $40 each night if you go out (of course this is for your average guy, whereas it would be much lower for your average 20 something girl accounting for "ladies nights" and "free drinks subsidies" subsidized to you by, ahem, men). But neither here nor there, roughly, you can expect to drop $40 each night you go out.

Which is why I fully endorse refusing to feel guilty when dropping significant money on home entertainment expenditures. Things like flat panel TV's, LCD projectors, DVD's, stereo systems and of course, video games. Some of the wisest expenditures you can make. And the reason why is that, yes, you will have to drop about $900 on that LCD projector and yes, you will have to drop $500 on the deluxe edition of X-Box 360, but in doing so you will provide a better alternative to going out, getting drunk and hitting on girls that didn't want to meet you in the first place anyway, all of which at $40 per pop will add up to more than you spend on home entertainment purchases.

And this isn't just fluff, I personally adhere to this philosophy as I recently bought the X-Box 360 "package" which included two remote controllers, a recharger and "Gears of War" the flagship video game of the 360. I also purchased "Call of Duty 3" as I like to keep my Nazi-fighting skills up just incase there is a resurgence in Nazism and I can protect the chicks.

Now doing the rough math, both games are going to require at least, LEAST 30 hours game play. That translates into 60 hours and if I divide that by the average time I spend going out on weekend nights (3 hours) that results in roughly me saving 20 $40 nights which equals a savings of $800.

Just these two games alone put me $300 ahead of the game after deducting my $500 X-box system. So men, boys and ardent video game players of all stripes all across the world, UNITE! For if anybody argues with you that video games are a waste of money, eau contraire. They are a wise use of one's money.

However, while we may rejoice in the economic efficiency of video games there is something I noticed playing the latest generation. Instead of having health packs to regenerate your health, all they have now is this "red eye gauge" thing which turns redder and redder the closer you come to dying. Get too red and you're dead. And to recover all you have to do is hide, let a little time pass and your health will recover completely on its own.

Well what the hell happened health packs????

I LIKED the health packs!

The whole concept that you could be a paper cut away from death and all you had to do was turn the corner, and BOOM! Health pack! Completely renewed you could about-face and unleash a torrent of revenge upon those AI enemies that put you so close to death in the first place.

Or if playing against your friends in multiplayer you could charge out into the battlefield blasting away at your friends knowing that if you timed it right you'd be able to get to the health pack first ensuring your victory and their death while chalking it all up to "skill."

Hell, there's been times I've left parties in a less-than-sober state half thinking and hoping to find a health pack in the alley.

Regardless, 20 years the health pack has been an integral part of the video gaming world, and now we're just going to give up on it?

Think of the pscyhological ramifications. They have become so engrained in our video gaming psyche that everytime we see one our brain is conditioned now to release serotonin. When have you ever seen a health pack and NOT smiled? Spread that across billions of people consuming trillions of health packs over the past 20 years and you're talking AT LEAST metric tons of serotonin and lot's of good fuzzy feelings being throw out the door because some Palo Alto Gen-X schmutz came up with a "cooler" way to gauge health.

But what can I do? I'm just the sole owner of an X-Box 360. So aspiring, junior and deputy economists of the video gaming strand have a drink in honor of the health pack. Something tells me it will go the way of the joystick.

Friday, March 09, 2007

I Actually Feel Sorry for Bush

I see hypocrisy three.

1. Here in the US they hate Bush because he doesn't do enough with ethanol and is in cahoots with big oil.

2. There they hate Bush because he's in cahoots with "Big Ethanol" and fear an Ethanol OPEC

3. These are the same scum bags that think Hugo Chavez is some great guy WHO ACTUALLY IS PART OF AN ENERGY CARTEL CALLED "OPEC!"

This just shows you that it has nothing to do with any kind of legitimate criticism against Bush, it's just a bunch of whiney little socialists that hate Bush, hate capitalism, are limitlessly envious of America and suffer from a disease I call "ATRS"

"Anything to Rationalize Socialism."

The symptoms are simple;

They want wealth to be redistributed.

They don't want to work for it or produce their own wealth.

Ergo they'll find any reason to villianize those with wealth, power or economic production as a means to provide the rationale to transfer wealth to them.

It is the epitome of greed, envy, evil and above all childishness.

The Banks Shall Pay

It is now almost a daily occurence where I either hear, see or actually have to deal with some middle aged guy who just doesn't get the fact that the housing market is crashing.

Be it a real estate developer proposing adding another 300 condos to the already over saturated 6,000 condos in the Twin Cities market or a banker salivating over the commission on a $10 million real estate deal that will heap further glut to that endless sea of oh-so original gray, vynil sided suburbanite twin homes, there I sit, looking at people asking me to recommend giving them other people's hard earned money for a frivolous and stupid real estate deal that has about as much chance as getting paid back as me getting with Selma Hayek. And I often opine, cynically, that they know full well they can't pay it back and that they know full well the deal is crap, they're just trying to keep the cash flow going so they can drive their BMW and continue living in the McMansion without having to actually take a real job.

But what I'm amazed at is the pressure to "find some way" to make these zombie deals get approved. The political pressure in the banking and financial services industry to at all costs, keep the party going like it was 2004. Forget the quality of the investments, forget the probability of getting a decent return. We need the volume, we need the sales, profits be damned.

Ah the joys of having commission based compensation.

But I'd be curious to hear from other economists, analysts, researchers and other professionals in between to see if they see the same thing. To see if I'm the only one standing there saying, "hey, the emperor has no clothes on" or if this is prevalent throughout the industry.

Alas, I feel all I'm relegated to do is keep posting hard data and stats to chronicle my criticism so that some day, some day, higher ups, people in power will look back and say, "gee, if we just would have listened or hired out an economist, we wouldn't have lost those billions of dollars in the housing market."

Sadly, the banks shall pay for their ignorance.

Thursday, March 08, 2007

Did CO2 Precede Warming or Vice Versa?

Any aspiring or junior deputy economists of the more scientific strain know the answer?

I saw this chart and unfortunately I do not have the time to go and find the data, but just eye-balling it, it looks like CO2 follows the temperature, not precedes it, ergo is not causing it. And since the data points are in excess of 400,000 even a small shift to the left would indicate a couple score of years.

Wednesday, March 07, 2007

Gluttonous Anglos

The new way to work is not to work at all, but to borrow the money out of over inflated asset prices.
For once I envy the French.

Tuesday, March 06, 2007

Those "Evil" Corporations

The Economist came out with a pretty good article about the effects of offshore tax havens and their effect on globalization (it was also written by I believe a knock out, stunning babe). And I'm a big proponent of tax havens (and stunning babes), not so much for their low taxes, but the fact they force governments to compete and to be efficient. Ideally a democracy would have an educated population that would insist on governments being efficient and expeditious and would therefore vote fiscally responsible politicians into office. In reality it's the fact that the US, all of western Europe and all of the developed world's governments can't jack up their taxes to confiscatory levels because the majority of their wealth would flee to lower tax countries (Ireland being a perfect example of this).

But what I did find interesting is that despite an overall lowering of the effective corporate tax rate, corporate taxes as a percent of GDP have been going up.

They chalk this up to, in part, better collection, but also the fact that lower taxed countries tend to grow faster and attract more investment, resulting in a larger corporate tax base, which rises corporate tax revenues even relative to GDP

I like it just in the fact the chart is bound to piss off leftists.

Monday, March 05, 2007

Perspective as to the Cost of War

It reminds me of an episode from "Star Trek the Next Generation" where the character Q said to Cpt Pickard, "If you can't handle a bloody nose, then why are you out here?"

Sunday, March 04, 2007

Proposed Military Cutbacks by the Democrats

I cannot make claim to these pictures, they were forwarded to me;

Say It Ain't So, Prodigal Joe!

Howdy all,

I've gotten a lot of e-mails recently and yes, sorry fellow aspiring and junior deputy economists, but it's now officially the Minnesota Twin's baseball season and as AM 1500 carries the Twins any games get priority over The Economics Supper Club.

Alas, I am a victim of the free market.

But fear not, I will be broadcasting when there isn't a game and doing a fair amount of subbing during the off season (tune into the Dave Thompson show on the 12th when I'll be subbing for Dave).

Until baseball season is over (whenever that is), we'll see you here on Cappy Cap!

Saturday, March 03, 2007

Hope You Can Sleep Well at Night

Not that Japan would be an exact repeat this time around for property prices, but if we were to look at a developed nation that has gone through a housing bubble in the past, this is not encouraging.

They've Been There

I like keeping a keen on on the former Soviet Bloc countries in central Europe. The horrors of communism is fresh in their minds and unlike most everybody else, they don't hate the US and they actually are embracing free markets and capitalism. And it certainly shows;

Friday, March 02, 2007

So He's Just a Regular Guy Like Us Then?

I wish more politicians would do this as it would show the world they're real.

Thursday, March 01, 2007

Debt Service to Income

The theory was that lower interest rates (short term and long term) should allow us to purchase more house, more car and more, well, anything because we are able to afford the lower interest payments and therefore take out a larger loan allowing us to buy larger things.
And this is true. You are able to buy a nicer house or a fancier car with lower interest rates.
However, when these loanable dollars all flooded the housing market it drove housing prices rather high which meant you still pretty much got the same bang for your buck as you did before. It's kind of like when Wall Street pays its bonuses everything in New York gets more expensive so you really don't have that much of an increase in purchasing power.

The only problem is everybody started withdrawing all the equity out of these inflated home prices of theirs and drove their loan payments even higher.

So the true measure of our ability to afford these big fancy things we like to buy is not so much the ticket price of the item, but how much does it cost us to keep up with our debt payments relative to the amount we make.

Yes, a recession is certainly possible.

Time to Make with the Smooching!

So I was going to post a chart showing various countries' mortgages as a percent of disposable income.
But with today's weather, we're expecting about 18 inches of snow;

Which means only one thing;
Guys grab a gal, gals grab a guy, tell your boss you're leaving early, fire up the fire place and make with the smoochin'!