That Cut Deep, Man, Real Deep

Ouch! From a friend of mine!



You will visit xkcd

North Korea Has Some of the Cheapest Beer in the World

I found it interesting that North Korea has some of the cheapest beer in the world, costing only 61 cents. Ethiopia is even cheaper at just 30 cents a beer. It's also interesting that dictatorships seem to have the cheapest beer.

Meanwhile the leftists' paradise of Norway charges you $13 for a beer, and I'm never visiting the Marshall Islands.


Regardless, it reminds me of the time I went to a town called Sublette, Kansas enroute to New Mexico. It was late at night and I was planning to make it all the way to Santa Fe when I decided to pull into the "Walk in Waddle Out" bar in town.

It was their grand opening and they had; 25 cent beers and $1 cocktails.

My vacation plans changed.

The Price to Earnings Ratio of a College Degree

P/E ratios are used to determine whether an investment is worth the money. In the case of a stock you take the price per share and divide it by its earnings. Thus you get a chart like this one showing us the S&P 500 P/E ratio over time

Applying the P/E concept to other assets can be helpful as well. If you look at a house, a house can be considered an investment. You buy a house and rent it out for its...um...rents. This gives us the housing version of a P/E ratio, the "house price to rents" ratio.

But along with 401ks and housing, the good overlords at the government and your employer's HR department are ordering you to invest in something else. Education.

Have you bothered to look up what the P/E ratio is for a college degree?

You haven't?

Well, you're in luck. The old Captain has!

Now before I go on you all better darn well appreciate this. This took about 2 hours to put together because the NACE (the source for starting salaries) is REAAAAALLY stingy with their data. So I had to go and search out each individual year at third party sites. Also inflation data for tuition rates is somewhat hard to come by. So if you want to say "thank you" to the Captain go buy my book for a paltry 99 cents and contribute to the Kindle Experiment.

First the data.

Doesn't look like much does it? Well that's because your ole Captain is intellectually honest and didn't want to "scale the y axis" to make this chart look more dramatic than what it is. But he doesn't have to. That chart IS dramatic and let me explain.

The above shows you the "price" you pay for college (tuition) versus the earnings you get from a college degree (earnings). As recent as 2000 you could expect your tuition to cost about 11% of your starting salary. Today in 2011 it is expected to be 16%.

At first you may say, "hey, that doesn't sound like a lot," but keep in mind two simple things.

One, you don't go to college to get a job. You go to college to make MORE MONEY when you get a job. Ergo, the above chart is somewhat misleading because without spending the money (and time) going to college, you would still make some money because you could presumably work anyway. So to be very precise when calculating a college degree P/E ratio it really should be your tuition costs divided by the earnings premium you would make over just having a high school diploma. Regardless, the price is going up.

Two, this chart speaks nothing of the drastic increase in the number of unemployed youth. If we were to incorporate all the "$0" starting salaries many of you recent college graduates are experiencing, I think you would see a DRAMATIC increase in the college degree P/E again suggesting you aren't getting your bang for your buck.

But still, I don't have to rely on adjustments or theoreticals to make my point. I'll simply present another chart. A chart showing the increase in tuition costs versus the increase in starting salaries. In theory if we index these together and start at the same point, they should increase at roughly the same rate, correct?

Well looky there kiddos! In just the past decade tuition has gone up nearly 100% while the starting salary (of that absolutely "necessary" sheepskin in "11th Century Middle Eastern Feminist Gender Studies") has only gone up in value by about 30% (and let's not forget about how that's essentially a 0% real increase when we account for inflation!)

So let me explain to you young kiddoes out there who voted for "hope and change" and thought Barack Obama's Magic Unicorn would miraculously fart out jobs for all of you.

You've been had.

You've been scammed.

You've been cheated.

And this has been done to you by not only my generation, but the generation before that.

Understand you weren't the only ones who came up with the brilliant diabolical plot of majoring in some wishy washy subject and then secretly hoping to get a cushy, overpaid government job. No, many people before you majored in "education" or "sociology" because they too "wanted to help the children" (while deep down inside we all knew all along it was just to get summers off and avoid calculus). There's two whole generations before you that had the same idea. And guess where people who major in "philosophy" or "hypenated American studies" end up working?

You got it.

Teaching you kiddies in college.

Of course, along with social security and medicare, this is just another little generational racket they have going on the side. See, they've told you since you were little ones you needed a college education. What they failed to tell you was in what.

You know all those "nerdy" Asian kids and square American boys you laughed at with their "stupid" chemical engineering degrees? Yeah, that's what you should have majored in.

But you see, if everybody majored in chemical engineering then the older people (who had the exact same idea you had) wouldn't have jobs. Remember, they majored in English and anthropology too. They have masters degrees in "sculpture" and "theater." And since they couldn't find jobs in the private sector they had to create entire studies out of whole cloth in....

(are you ready for it?)

(can you guess where these people go?)

(are you sure?)

THAT'S RIGHT!

ACADEMIA!

Studies that don't produce anything of value to society, but can be sold to easy marks like you!

So let me explain to you what's happening and why you are sitting there with an over-bloated student debt (that no doubt I'm going to have to bail you out of). You see, in society STUFF OF VALUE has to be produced. You can't just major in Socialism Unicorn Farts or Political Science like your beloved hope and change leader (oh, wait, he was a professor too, wasn't he?). In the end for society to thrive, let alone survive, you must produce something of value. As I talk about in my seminar on worthless degrees, take out a sheet of paper, list everything you would like to buy or own and the list the degrees of your friends and ask yourself;

"Do we major in the fields that is necessary to produce the I-Pads and X-Box's and cars we want?"

The answer is no. This also explains to you why we have a trade deficit with China.

But also understand you are on the receiving end of what has been a trans-generational scam. Creating "fake" industries so people can have hobbies instead of creating real industries so people may have wealth. Notice the charts below. These charts I discovered when trying to find data going back to the 1940's (because ideally it would be great to calculate the above charts and see what the P/E ratio was for a college degree back then, but the data is just not there). What you'll notice is that sure, under your parents or grandparent's generation a college degree would help, by about the 70's in terms of real dollars there was no upshot. Matter of fact when you look at the liberal arts degrees they were simply a waste (also notice how they didn't start until 1962, gee, I wonder why? Could it be..ummmm...hippies?)

But why the push for college then? Why were you told to go to college? And why didn't anybody tell you about worthless degrees? Two fold.

Most of your parents didn't study economics, let alone see these charts. They just remember their own experiences and the advice at the time was hardly wrong. It's just there's a SEVERE ignorance when it comes to economics in this country and people just plain didn't know. But now we get to pay for it.

And second, lets not forget about all those burnt out hippie professors that need your hard earned money (or your parents money or the taxpayers money) to pay him to lecture you about the evils of capitalism in a "Peace Studies" program.

So in the meantime kiddies, I hope you enjoy you little sheepskin there. I hope you enjoy "going green" by recycling or reusing grocery bags or whatever else you were told to do by your indoctrinators. Because in the end, no matter what you were told, no matter what you believe and no matter how much you may have been programmed to hate it, reality wins in the end. And the reality is you just got scammed out not just your money, but a sizeable chunk of your youth and your future is bleak. And no amount of naive childish "hope and change" is going to fix it.

Enjoy the decline!

They Don't Want This Information to Get Out

In doing the research for the book I thought it would be a jim dandy chart to have showing what percent of mortgages made were done on a "no doc" or "low doc" basis. So after much scrummaging around I finally found the data series. The data series was provided by a company called FirstAmerican CoreLogic.

Phenomenal data.

AMAZING DATA!


Hat tip to them and their work.


Oh, the charts I could make!


Unfortunately they wouldn't let me use the data because presumably my book spoke ill of the banking industry.


Meanwhile I have a chart, a beautiful chart, sitting right on my laptop that would be the envy of all charts, that I can't use showing the percent of loans that were no doc and low doc.


But neither can the New York Federal Reserve. Previously the NY Fed had the same data series up on their web site, but was requested to take it down.





This angers me, because whereas I understand proprietary information, when does it become public information, or just information that society at large has a right to know? Plus, what is the fight to prevent this information from getting out? Like the banks' reputation can get worse????

In any case, I would be eternally grateful if somebody out there knows someplace I can get this information that isn't sourced to FirstAmerican. Any econ grad student out there that happens to be studying this or knows of somebody that might have an idea on where to get this info, I will name my new dog after you.

And that is quite the honor because I like dogs more than children.

In the meantime, check out this link to the NY Fed where you can toy around with different subprime figures and play with some charty goodness.

Border Patrol Agents in GUAM???

Anybody as confused as I am about this?

Who exactly is trying to sneak into Guam????

The Green Ninja

So with gas prices this high I decided to buy a motorcycle (one that works I mean). Hit Craig's List (which I think has alone boosted GDP by .5% a year with all the free advertising they allow) and found an old green Kawasaki Ninja.


I'm very happy with it because it gets 67 miles to the gallon, however my friend had to point out,

"Hey, the "Green Ninja." It's like a lame comic book hero like Captain Planet who fights global warming by increasing your gas mileage. You're probably more green than most of your liberal colleagues."

Now utterly ashamed I drive the Green Ninja thinking people believe I have gone soft and gone green, when in reality I'm just trying to save a couple bucks.

Regardless, this did get me thinking about the psychological apprehension people have to making large or larger ticket item purchases like motorcycles so allow me to impart some economic wisdom.

First, if you blow your money on something like booze, cigarettes, video games, marriage or children (har har har) you are in that sense wasting your money. But if you buy a motorcycle or a moped, you are investing your money. And you will not only reclaim the money you spent on the motorcycle (and jacket and helmet and accessories, etc.) you will be earning back more. Therefore it's not whether you can afford a motorcycle, it's whether you can't afford a motorcycle. Get one, you'll be better off (I've already earned back in gas savings what I spent on a jacket, helmet and gloves).

Second, you don't need to blow a ton of money on a motorcycle (I got mine for all of $2,000). Matter of fact they're pretty cheap used as demographics play a role in this. Namely men of Gen X are getting married and having children. And then the wife puts el-kabosh on the motorcycle riding forcing him to give it up. Ergo if you are single guy (or a single gal) you can find a crotch rocket for pretty cheap.

Third, you can go green with a smart car, a Prius or a hybrid.

Or you can get a motorcycle.

Which one do you think the girls dig more?

Miles Driven Per Year By Americans

I found this chart on the Department of Transportation after hearing a report the amount we're driving is dropping at a record rate. It's pretty neat;



OPEC may yet come to realize its shooting itself in its foot.

I Spy With My Little Economist Eye...

Here's a picture in today's Star Tribune of a bridge collapse in China due to the earthquake.


What do you spy????

I'll give you a hint, it's a sign of capitalism working in China.

Inflation in Zimbabwe

Nice going Mugabe!

Thank You Warren Buffett

The banks are to blame.

Which is what I've been saying all along (and will be amply documented in the upcoming book).

National Oil Companies are the Real "Big Oil"

I saw this on Powerline;


I saw this in The Economist;



I made this post in 2005.

Just read what I write, I'm usually 2 years ahead of everybody else. ;)

Let's All Laugh at Maxine Waters

This is great, you have to let it go to about 1;29 and watch people in the back laughing at Maxine Waters because she;

1. Obviously didn't listen to what the oil execs said
2. "Like liberals could take over the oil industry and run it better than than oil executives."
3. She CAN'T REMEMBER THE WORD "NATIONALIZATION!"

The fact she is a representative is a testament to the idiots that elected her in there and is why I will never move to California.

The Kindle Experiment

As you know your Captain wrote a book a couple years ago. It was titled "Behind the Housing Crash" and my own personal bias aside, it was a brilliant and foresightful book. Everyone who has bought it has liked it and it has very high ratings on Amazon.

Of course only about 2,000 copies sold. And though this is considered a "success" in the self-publishing world, let us be frank...

The Captain wants to make millions, not thousands of dollars.

The problem is quite simply the publishing industry itself. The industry is old, archaic, cronyistic and inept. You need to know somebody in order to get published. And like Dr. Seuss, William Faulkner, Stephen King and many other famous authors, these publishing houses lack the ability to see genuine skill and talent when it's sitting in front of their faces.

You ask, "how can publishing houses turn down the works of Stephen King, Anne Frank, Vince Flynn and Aaron Clarey?" The answer is a simple and economic one;

If you look at who is in charge of these publishing houses you will see nothing more than a bunch of elitists who all have masters degrees in "creative writing." In other words, the people who currently head not just the publishing houses, but the agencies that represent authors are not writers or readers themselves. Oh mercy no, not one of them have written anything, that would be dirtying their little fingies. They are middle management types who have NOTHING in common with the common reader. Ergo, they lack the judgment to discern or predict what is going to be popular amongst the "commoners."

It is here that you are witnessing the extinction of an industry that has proved itself to be self-serving and not a net-positive benefit to society. Much like the mainstream media has proven itself to be an arm of a political movement, the publishing industry is proving itself to be an exclusive club, not concerned about good writing that it can bring to the masses and thus joy to the people, but rather serving connected members favors in the publishing world.

What's brilliant though is the unstoppable forces of capitalism, free markets and economics. Enter the internet. Namely, Kindle.

Digital books, combined with the internet have largely rendered these traditional publishing houses irrelevant, obsolete, and unneeded. Sure, if you're a baby boomer that wants to be lied to about how you're 50 years and you're still going to find love and romance and riches, and you're too damn lazy to learn about the internet, you can find a book called "Eat Pray Love." But once the social security checks start running out and the last vestiges of "The Doors" fans die off, who is really going to want a physical book?

Regardless of what you think about the younger generations, they have made their decision. They prefer to be online over pretty much everything else. Their social lives, their dating lives, their career lives. And when given the choice to pay $22 for a physical book of 99 cents for a book, what do you think they're going to do?

It is therefore why your Captian is pursuing an economic experiment I like to call the "Kindle Experiment."

Your Captain loves to write. He would love nothing more than to have a life where he lives in a small mountain town, drives his motorcycle around, fishes, fossil hunts, tornado chases, polishes agates and salsas the night away all while financing this lifestyle with superior and engaging writing that gives his readers more value than what they paid for it. To achieve this though, the Captain cannot rely on a defunct and corrupt industry such as the traditional publishing houses in New York. It simply won't work. And it is here where the Kindle Experiment in economics begins.

"Behind the Housing Crash" is now available on Kindle.

It is 99 cents.

My business model is much based off of two things. One Amanda Hocking, the 26 year old self-published author who writes books about vampires and twilight and other such nonsense. And two, "Angry Birds" which has made a ton of money NOT because of the profit margins, but because of the volume of sales.

In short, I could charge the $22 for a book which results in 2,000 units of sales. Or I could charge 99 cents and sell millions of copies. The second of which would result in a lot more profit.

Of course, "Behind the Housing Crash" is a dated book. But this experiment is simply just that - an experiment. I don't expect to sell a ton of books. I'm just seeing how much more responsive and elastic demand is to a book that is essentially free and will base future publications on it.

So if you want to buy the book, it now costs you an irrelevant 99 cents.

If you know somebody who would like to read the book, it now costs them the 99 cents.

If you want to read books I have in the pipeline such as "Enjoy the Decline" and "The American Bachelors Guide to Happiness" and "The Battlefield Compendium for 14 Year Old Boys" and other great books, it now costs you 99 cents.

Or if you plain just want to stick it to the elitist commie snobs of the east coast publishing houses, it will cost you 99 cents.

So go forth and purchase, or simply recommend it to friends. Future brilliant works depend on it.

I Officially Endorse Byerly's

I couldn't afford Byerlys when I was in college. High end, luxury grocery store chain. In any case I poke my head in there now as "Rooster Booster" is no longer being sold here and Byerly's has my second favorite power drink, AirForce.

And whilst in the checkout lane I see among People and Seventeen and all the other filth rags out there an issue of The Economist.

So now, unlike the regular grocery stores where I'm forced to sit behind some soccer mom and her 45 items in the 10 item or less lane and forced to read about Julia Roberts or Christina Aguilera or Britany Spears and who is divorcing who, I can look like a normal human being, feel no shame and look at The Economist.

Byerly's is now my primary grocery store. Seriously, it is. Because I'm willing to spend an extra 10% on groceries to have it send via the market mechanism the signal that a lot of men that would constitute an underserved market would pay extra to have the occasional WSJ, Economist, or heck, Sports Illustrated in the check out lane.

Economic Schedenfreude

I don't know how to spell it, and am too lazy to spell check it, but I must admit to some economic schadenfreude.

The book is now complete and will be going into last revisions and editing. Picking a publisher and then getting some chartage.

Regardless, this puts me in an odd situation in that the book will do better the worse the economy gets. And as long as press releases like this keep coming, I'm happy.

Don't Bother Watching the New Indiana Jones Movie

Complete crap. And I'm not saying that for effect, I'm saying it because it's true.

Sorry, not going to capitulate to the American predisposition this "has" to be a good movie.

Utter garbage.

And by that, I mean it isn't even worth renting.

If it were up to me I would go to Spielberg and Lucas and demand, for the sake of an American icon, they withdraw this piece of sh!t from the theaters, go back and redo it with a realistic plot, give Indy a gun that he occasionally fires, and please don't ever have another scene where everybody has guns, but either;

1. Fails to use them when they're right there in front of them with the enemies sitting like ducks
2. Shoots non-stop but fails to hit their target if they're shooting at Americans or Indiana Jones.

And hey, while we're at it, let's throw in some kid that is completely incidental to the plot to tug at the heart strings of mothers.

Seriously, I'm angry they literally murdered an American icon like Indiana Jones. The sad thing is Harrison Ford pulled it off superbly. But this family BS, it would have just been better if he was a childless bachelor, as he always was, and was meant to be and went out and kicked some commie ass.

No, I had to tolerate 2 hours of ill-founded rumors of El Dorado, which were created by aliens, whose corpse we found in Rosewell, and wow, there's a spaceship. To quote Eddie Izzard;

"Oh no, space monkeys are attacking."

Cripes.

Games Economists Play: Mosquito Killing

Let it be known that today marks the first day of the season of a game I play called; Killing Mosquitoes.

I like to keep track of how many times I get bitten by a mosquito versus how many I kill. I keep a running tab and, though I have yet to shut them out, I have won every year since playing this game.

The season is initiated upon either me killing a mosquito or a mosquito biting me, and I just killed the first one. He was sitting there on my house, very still (it's still reasonably cold here in Minnesota so the insects are lethargic, but that's global "warming"), and I squashed him.

Let the games begin.

Are There Credit Card Collection Commercials in Norway?

See, Norway, despite my disagreement with a socialist economy, does have a fair amount of maturity when it comes to managing their economy. notably their petroleum surplus fund. They ensure they have a balanced budget and, not that I've visited Norway, but they just seem to be a more financially disciplined people.

Which got me thinking as I was driving up to St. Cloud and heard a commercial for "lowering your credit card debt!"

"Are you in debt?

Are collectors calling you?

STOP THE ANNOYING CALLS!

Contact us at 1800-NOMOREDEBT

We can end the harrassing calls, cut your monthly payments in half and lower your debt from 30-60%"

And it was one of those things where, yes, we've all heard these commercials before, but you have to pull yourself away from it and say, "gee, how pathetic is this, that we've become so bad at managing our personal finances commercials like this even exist?"

Furthermore, the whole tone these commercials take that you are the victim if you have too much debt. And the insulting premise that they can "Lower your debt from 30-60%."

Well doesn't that just mean you're going to fail to pay back what you owe? And that's OKAY?

And that's why I wondered if any of our friends in Norway (or Scandinavia for that matter) can tell me if they have commercials like this, or is it a purely, and shameful, fact only American's have this? Dtrum, this happen in Switzerland when you were there?? Curious to know.

In John McClane We Trust

When in high school I got personalized plates that said "MCLANE" for my 1978 Cutlass Supreme (spent $50 on it).

I still have them hanging above my bar.

That is because John McClane is one of the few remaining truly American heroes left.

He doesn't negotiate like Richard Gere. Or look to negotiate with people that want us dead like Barack Hussein Obama. He's a real man. Not one of these sensitive 90's guys.

He doesn't care what is politically correct or whether he'll get in trouble with the authorities if he violated some anal retentive rules about giving people their due process even as they try to blow up the Nakatomi plaza. He just kills them.

That's why we should vote for John McClane.

John McClane is the modern day incarnation of John Wayne. I think the first name is not a coincidence.

However, consider this. Could a man like John McClane exist today? In 1945 he would be on par with Audie Murphy, a true American hero. Today he would be sued, lambasted, and accused of racism (after all he killed a lot of Germans in Die Hard 1 and 3, he also killed a Hispanic drug dealer in Die Hard 2, which means he must die). So if it boiled down to it, who would ever step up to the plate to be heroic or in the classical, historic sense, "American?" The answer is no one.

I say it in half jest because I am a carry/conceal permit holder, and though not true to my instincts, I fully agree with what the instructor said, "it is more of a liability than a privilege to carry a gun." Any notions of "pulling out my gun and saving the Nakatomi employees" let alone the lady on the street getting mugged or any truly innocent person is not worth the legal liability. This is the situation political and legal forces has brought us to. To do the right thing, should it be demanded, is so deterred by the legal ramifications, it's just best to sit down and be quiet and not be a hero, even though that's what America is screaming for.

Alas, a John McClane/Tony Stark presidential ticket is just a figment of our imagination and Barack Obama is a viable presidential candidate.

Hat Tip to My Mom

The squeaky wheel gets the grease and this is what my Mom always told me about the 1960's. That basically, not all baby boomers were smoking pot and shooting heroin as they parasited off of the Greatest Generation protesting the Vietnam War. It's just the deadbeat hippies were more "romantic" and "ratings getting" than the rest of them, and therefore got most the press. Ergo the baby boomers were misrepresented as a bunch of idiotic losers listening to Jim Morrison (who, by the way sucks just as much as Kirk Cocaine - and yes, this time I purposely misspelled it. Want to hear good music, listen to this. See, talent. Yeah, actual voice and skill required. And not dying on a toilet bowl while OD-ing).

In any case it was nice to see this which corroborated what my Mom was saying the entire time.