The Great MBA Bubble

First it was the Dotcom Bubble.

Then it was the Housing Bubble.

And now it is the Education or "MBA" Bubble.

I predicted the previous two and I'm sure as I am typing here I will have reliably predicted the third.

The reason why is that in addition to my awesome economic mind and insight I also moonlight as a tutor on the side. Business is a-BOOMIN' because as the recession hits, the talking heads tell everybody "education is a recession-proof asset" and since the US is awash with liberal arts undergrads the natural next step is to get your MBA. Combine that with an incredibly efficient private sector and there is no limit to the fly-by-night, online, MBA schools sprouting up all over the internet and BAM!!! I got a small little clientele of MBA students that need tutoring.

Now for those of us who went to business school, this will be no surprise. But for those of you who never went to business school or are some how "impressed" somebody has an "MBA" let me explain to you right now that MBA's are worthless.

Matter of fact, they're worse than worthless. They're damaging. One only needs to ask who was at the helm of all the banks during the housing bubble and subsequent crash?

MBA's.

Who was peddling IPO shares in soon-to-be-worthless Dotcoms???

MBA's.

YOu look at pretty much every major economic catastrophe and the leaders that drove the economy there, you will see them honeycombed with MBA's.

Now, maybe back in the day, say, the 1950's, and MBA would have carried some weight. The individual went beyond his or her degree in accounting and decided to study business at a higher level. The insights gained from this would give you TANGIBLE SKILLS that would give you an edge over your competitors. The problem though is that over time and as more and more MBA's flooded the market, the MBA lost its potency. Additionally since business is common sense (no matter WHAT "they" tell you) you have to constantly re-create the MBA to somehow seem that it is on the "cutting edge" of "business science" when in reality common sense can only be sliced, diced and re-taught in so many ways.

The result was that the MBA didn't morph into this super degree where you learn tangible skills that will make you a more productive employee and turn you into a leader. It rather turned into a "stamp of approval" that simply showed employers you were a conformist. You would jump through hoops. You were perfectly fine going through the mendacity of a 2 year degree in common sense while acting like it was some kind of "professional venture." It is the fact you could tolerate such an inane and stupid process that made MBA's sought after - they were non-thinking automotons and THIS is what employers of today really want. They don't want leaders or innovators, they want conformists.

Alas, I get enraged when I sit there with my students and see just what tripe and utter garbage these schools are teaching. Chapter upon chapter is written on simple concepts that only need a paragraph to be explained, only for the sole purpose to make the "LEadership and Management" book look like an authoritative 559 page tome instead of the 3 page pamphlet it could easily be condensed into. The forcing of students to take what is essentially the same class 3 times (leadership in education, educational leadership, theories on managing leadership in education) to fill an MBA program and generate more tuition while teaching them nothing new. And do not get me started about how they teach obsolete, worthless, economic theories that NO ONE IN THEIR RIGHT MINDS WOULD EVER USE. DCF, EVA, "Porter's Five Forces Model."

But today, one took the cake. Abso-freaking-lutely took the cake.

I was going over an essay one of my students wrote for flow, content, etc., on account that in addition to being an excellent salsa dancer and fossil hunter extraordinaire, I am an outstanding author. I made some changes, reworded some sentences, but nothing dramatic. I gave it back to him, pointed out a couple things and he said,

"Oh, I can't have contractions in my papers."

Confused, originally because I thought he was talking about pregnancy-related "contractions," I said, "What do you mean you can't have contractions?"

He said, "Well this sentence here. You changed it to read, "the company shouldn't invest in this project because the NPV is negative."

I said, "yeah, so?"

"Well, "shouldn't" is a contraction. You combined "should" with "not." And they told us in our professional writing course to NEVER use contractions."

I sat dumbfounded and my blood pressure increased even further.

The MBA industry, has become SO VOID OF NEW IDEAS, REAL, TANGIBLE SKILLS TO TEACH THAT THE BEST, THE ABSOLUTE BEST THING THEY CAN COME UP WITH IS TO ELIMINATE THE BLEEPING USE OF CONTRACTIONS????

But then, I calm down, I chant my Galt-Buddha chant, I tell myself,

"Let go of the caring
Let go of the caring
Go Galt Go Galt
Society is collapsing
You cannot stop it
Your life is finite
Relax and enjoy the decline
Let go of the caring
Let go of the caring."

My new-found-econ-Buddha-Galt-philosophy set aside, it still amazed me. This school charges $27,000 for an MBA. My alma-mater, the Carlson School of Management charges last I heard $78,000. And I can only imagine what the Ivy League is charging for their progressively worthless MBA programs. All for what?

To learn not to use contractions?

The ramifications of this are of course going to be severe on several levels.

One, the simple fact MBA students are flooding the market. GMAT test takers (the pre-MBA qualification test) broke a record in 2009 at 263,000 test takers, no doubt to be dwarfed by 2010 numbers.

With this many MBA's and the simply law of supply (which these MBA's should know about) the value of an MBA is going to drop. Furthermore, since employers don't hire MBA's because of their uniqueness or innovation, but rather their conformance, MBA's are nothing more than a commodity in that "conformity" is simply that - a commodity. Any yes-man will do. So even though idealistic MBA students are thinking a job is just right around the corner upon graduation, unless the employment situation in the economic picks up (which my super awesome economic powers know it won't) they're still going to face a flooded market and nowhere near the salary-commanding ability they thought they'd have.

This will only worsen hundreds of thousands of people's personal finances. As they fork over money for what is progressively becoming a worthless degree, they will end up in debt with no better or at best, marginally better income earning potential.

Certainly this will hurt the individuals pursuing their MBA's, but don't think there isn't a cost to employers. Pursuing conformance over performance, ass-kissers over ass-kickers, employers will feel really good about themselves because their underlings have been programmed to be yesmen, but will experience no real tangible benefits from employing them. No real leadership or innovation will come out of this latest generation of MBA's. No real ground-breaking products or ideas will come from them. Worse still, knowing it is more important to be nice than right, these MBA's will simply shut up if there's any trouble at the firm knowing not to rock the boat. This yes-man disease will essentially corrupt the private sector forcing the private sector to become more like Goldman Sachs where bribing government officials and rent seeking replace innovation and ass-kicking.

The natural consequence to hiring people who tell you what you want to hear and not the truth or what you need to hear is that these firms will inevitably diverge so much from reality they will go out of business. We saw it with the Dotcoms, we saw it with the housing bubble, and we saw it with the auto industry. Firms that play nice instead of right, will pay the consequence (until the government bails you out). They will not be in business. They will not be able to employ people. They will not be able to produce a profit ever again. And they certainly won't be hiring any MBA's.

But hey, at least nobody used any contractions.

The Price You Paid for Feminism

and all of its marxist, entitlement-mentality bliss.

Recession Medicine

Pixies Fart Prairie Dogs in Brigadoon

From a reader;

Meh. I'm still holding my stock in the real PBR, Pabst Blue Ribbon. We are so far away from any possibility of pulling out of this that beer is what is called for.

I notice that Candi of "Learn To Dance" is wearing the Michelle Obama Oil Spill frock.

Meanwhile, on the beach at the Gulf, yesterday, when the inevitable subject came up, I tried to explain that drilling off the (most of the) Florida coast could not be compared to drilling off the tip of the Panhandle, or the western Gulf; the Eastern Gulf (Florida) is mostly natural gas. There's some really heavy, unprofitable liquid petroleum being pumped from an area near Fort Myers, but we just don't have the light crude found off TX, LA, MS, and AL.

Doesn't matter. You might as well say, "Pixies fart Prarie Dogs in Brigadoon," when talking, even to reasonably well-educated people.

This, in Florida, where reasonably well-educated people should have memories that extend back 5 years, when the natural gas pipelines feeding most of our power plants from Louisiana went off line, due to Katrina. We had to barge in coal like maniacs just to try to keep up. Everybody's power bills jumped up. Nobody remembers.

Florida has 25 percent of the nation's natural gas reserves (which is double the Gulf's crude oil reserves, in barrel-of-oil equivalents), just sitting out there and we can't access it; we have to pipe it in from elsewhere.

At this time, I plan on sticking with beer to bleerily get through this period of national insanity.

Don Quixote

It was one of those things that I couldn't remember and it was going to drive me nuts until I did.

"Man de La Mancha?"

No that wasn't it.

"His squire Pablo????"

No that wasn't it either.

I got on the Wiki, finally looked it up, DON QUIXOTE. The slightly off psychologically hero of the book "Don Quixote."

The reason I was having trouble remembering it was because I drove past a statue of Don Quixote and his squire, Sancho, over in Richfield. I was trying to explain to Natasha who they were, but could not remember their names.

However, it also reminded me of an experience from many years ago, that I thought was worthy of sharing with the younger male lieutenants of capitalism.

My memory is a bit sketchy, but I was at a restaurant or bar somewhere in Uptown. I was by myself, probably at either the beginning of a 3rd or end of a 2nd shift. My waitress was cute and had a slightly darker complexion than the average Minnesotan and upon conversation I found out she was Spanish, her parents both moving here from Spain before she was born. She also was a single mother, having a boy around the age of 10, at which point in time I saw my opening (as I was still engaging in the art of pursuing women).

Thinking I was charming and witty I said, "Your son ever read Don Quixote?"

She said, "What?"

"Don Quixote."

"What's that?" she said.

I said, "Don Quixote? The most famous book written by a Spaniard? They made a movie, Man de La Mancha about it? The guy who attacks windmills and is followed around by his short fat squire?"

She just gave me a bewildered look.

So your young Captain, thinking he's going to be a sharp sly dog, goes out the next day to buy a used copy of Don Quixote. I jot my number down on a piece of paper, put it inside the book, and drop the book off for the girl at the bar.

Never heard from her again.

Now, let's put on our economic thinking caps and and answer the following questions;

1. What was the first mistake the Captain made and what was the sign that should have told him not to make it?

2. How does this story explain the concept of opportunity cost?

Answers will be graded on being correct and concise. Not how long they are.

Love Ya, Mom!

Your Captain wakes up this morning and he has three voice mails.

One from a student he tutors in the art of economics and finance.

Another from his brother who informs him he is part of a small, little inheritance from his recently passed away, but no less-kick ass uncle.

And a third from his beloved mother.

Normally the Captain's beloved mother leaves a message of some kind trying to cajole the Captain into riding the beasts of death at her house (horses) or see the latest animation movie or just in general making sure your Captain is in good health, going to church, brushing his teeth and avoiding icky gross girls.

But no, not this time.

This time, your beloved Captain's mother, had gone through the presentation on Crusaderism and wrote down all the typos and spelling errors. She then calls me this morning at 810AM to inform me of the typos.

35 years old, 100% self-supporting since 18, author of a book and arguably the best economist in the state of Minnesota and I still have my mom pointing out typos on my power point presentations.

Love ya Mom!

Crusaderism

Oh, it's already here people.

Crusaderism

Here's the latest Captain Capitalismites.

"Crusaderism."

It's a 10 part series on You Tube. I strongly suggest watching it in its entirety unlike the Capitalism Socialism speech where 4,000 people watched just the first part and then MISSED OUT COMPLETELY ON THE DATA AND STATISTICS ON THE SUBSEQUENT PARTS THAT WERE WAY MORE IMPORTANT THAN THE INTRODUCTORY SEGMENT.

So pour yourself a big martini, light up a big cigar and enjoy. Also keep in mind You Tube only allows 10 minute videos so I had to chop it up into 10 parts, the links to which you can see in the margins.

He's More or Less Got It Straight

But, oh oh oh, he's not being nice. And being nice is more important than being right

Upcoming Seminar

This is your Captain speaking-

Akin to my "capitalism vs. socialism" speech I did a year ago, this year I put together a new seminar titled "Crusaderism."

Do not let the title bore you or fool you. It is pretty much another high quality Cappy Cap classic that I would even say is more important than the previous speech.

THat being said I need to distribute it as far and wide as possible. Obviously it will go on You Tube, but if anybody wants a DVD copy mailed to them for reproduction purposes or perhaps to give a gift to a liberal in the hopes of convincing them before its too late, let me know.

You are now free to move about the cabin.

And Come December 5th?

I wonder what will happen to the employee payrolls of union members come December 5th.

The Definition of Enjoying the Decline

The quintessential "enjoy the decline!"

Heh

So, no, we won't be doing the one thing that would really boost the economy.

The Education Bubble Continues

I have a simple question. What good is an education unless there's economic growth and jobs at the end?

But, hey, don't let me stop you from getting your triple doctorate in Communications, Family Sociology and Women's Studies. And certainly feel free to continue to get that Six Sigma, CPE, and whatever other certifications to the point it becomes an overweighted Boyscout badge sash.

Why Jackie Mroz Can't Find a Job

Hat tip to the Colonel.

Can you guess, without reading the article, why Jackie can't find a job?

Recession Medicine

It dawned on me that even though statistically we're out of a recession, for most people out there it still feels like one. So permit me some lighter fare.



Oh, and of course, enjoy the decline!

It's a Slum, Right?

Just wanted to make sure I read that correctly. This place is a slum.

Despite government financing and lower government mandated prices the standard of living these utopians live under is defined as a "slum."

I wanted to make sure I understood it 100% correctly and clearly that these people and their micro-economic system they've implemented for themselves has resulted in a "slum."

Is everybody clear on this?

Congratulations! The Cancer is Spreading Less Slowly

There has to be a term for this.

Where the media and politicians point towards the change in the rate of economic growth or the "change in the rate of how the economy feels" as some kind of success when in reality they're just stretching like Elasto-Man to avoid telling the truth;

The economy is still shrinking.

The Bursting of the Education Bubble Begins

In one of my more brilliant pieces I noted that given how much fluff and prerequisites colleges and universities foist upon their students simply for no other reason than to employ otherwise unemployable TA's and liberal arts professors, that it takes too long to incubate labor.

The costs of which are notably lost production, a demoralized student body and a wasting of billions of dollars on the education industry that is progressively moving away from training youth to become employable, skilled workers to that of a self-interested lobby unto itself that seeks more and more money.

Inevitably this divergence from what colleges produce and what employers need results in employers taking matters into their own hands.

Why You Have High Property Taxes in Minneapolis

Watching TV last night and on comes a commercial with effeminate music and you see an effeminate guy riding a bike, a Prius, people smiling, more lame music, and of course, everybody is wearing a helmet and at the end you see a bumper sticker on a bike with the following URL.

I tried to find the commercial on Youtube and the website, but could not (because you really have to see it), regardless, I tender this question to the citizens of Minneapolis who have had their property taxes jacked up nearly 400% (and no, that's not a farcical statistic, it's real, I used to live there and saw it on my property tax bill every year);

DO YOU PEOPLE REALLY WONDER WHY YOUR PROPERTY TAXES ARE CONSTANTLY BEING INCREASED?

I ask because I really wonder if the typical liberal in Minneapolis ever links their perpetually increasing property taxes with frivolous programs like the "Walk Ambassador Program" and now commercials like the one I saw last night. A commerical that had NO POINT OR PURPOSE but to make bicycle riding in the Twin Cities look like a passer-by sport for weak, meek, effeminate little girls. A commercial that isn't even advertising a product or a service. Just a blantant wasting away of taxpayers money that really calls into question if there's any spending control occuring at the municipal level.

I being serious when I say this - I want a liberal from Minneapolis to rationlize this for me. Explain to me why this is a good thing? Or why these programs warrant a 5% of market value property tax? Do you not get the relationship between your fleecing level of property taxes (and consequently, lower property values) with R.T. Rybak's spending binge on worthless programs like this? I just sit slack jawed-amazed with the waste and how time after time again you people in Minneapolis just keep on shooting yourselves in the foot financially by doing this.

Regardless, I no longer live there and no longer pay the property taxes so I can sit back and enjoy a cigar and watch you slowly turn into Nuevo Detroit. But when you inevitably wake up one day and ask yourself, "Gee, why aren't property values going up" look at those brand spanking new bike paths you have, along with that Jim Dandy commercial (and your $50,000 drinking fountains) and see if that makes you feel any better.

Many Thanks to the Pay Pal Donors

Your Captain, always looking for new entreprenurial ventures that avoid having a boss, inevitably was going to have to find the ole password to his pay pal account on account that Pay Pal is usually a preferred means of internet payment.

I set one up for the Cappy Cap blog (the link beautified by Natasha to your right) to get whatever donations I might.

Naturally you forget about it and think there's $20 or whatever from your mom donated out of pity, but your Captain was pleasantly surprised to see that many junior, aspiring, deputy, official or otherwise economists actually have made donations! I now have $300 big smackeroos in the account and will enjoy it by buying cigars, drinking, driving a motorcycle, emitting carbon and engaging in other American activities that generally agitate members of the left.

I didn't want to list full names, but many thanks to Bill, Rob, Earl, Rick, Peter and Alex.

Have a happy 4th of July!

From a Canadian Reader

The Canadian banks were founded by conservative Scotsmen who instilled a culture of fiscal prudence in the Canadian banking industry.

What is interesting is that Canada is lowering corporate tax rates at the same time the U.S. is proposing to raise them. By July 1, 2013 the top corporate tax rate on active business income will be only 25%.

Many small corporations will only pay 15% tax rate on the first $500K of income.

On top of that Canada has introduced legislation that will make it even easier for foreigners to invest in Canada. For example, a foreigner who invests in shares of either a private corporation or a publicly traded corporation will pay no Canadian tax when the foreigner sells the shares unless the corporation derives more than 50% of its value from real property in Canada. Canada is opening its doors to investment at the same time the U.S. is threatening the very existence of a corporation.

To which I respond;

"That is because Canada has Steve Harper, an economist, as their premier and we have a bleeping "community organizer" who doesn't have any real world experience."

Post note - It has been duly noted that Mr. Harper was not in fact an economist, but rather has his degree in economics. My apologies for being misinformed. Would anybody care to trade then?

Maybe I Should Move to Canada

They seem to live in reality there.

Oh Noes!!!

Please don't take our finite, and thus fundamentally flawed no matter how complex they are, models away from us! Weez needs them so people don't realize our profession is a simple one hiding behind advanced math and SAS programs! Give us money and we'll give you complicated programs with lots of greek symbols!

Online Schools

These teachers are definitely paid differently than those who teach in online schools.

The Escapist

As most of you know I have more or less retired from blogging, making occasional quick posts here and there. If you really want to see genius, read some of my older stuff when I actually thought there might be hope for the country if there was somebody who pulled all the economic data together and spelled it out for people. Now I just chase after Natasha and play video games.

Regardless, there are new people hitting blogosphere and you should check them out. The Escapist is one of them.

The Definition of Stupid

They're about as smart as our youth in this country. Protesting over increasing the retirement age to (GASP) 62 SO THAT THEY MIGHT ACTUALLY HAVE SOME FREAKING MONEY WHEN IT COMES TIME FOR THEM TO RETIRE!!!!!

Oh, Karl Marx is laughing in his grave right now.

Crusaderism

Is a disease.

More to come. Get your pen and paper ready.

Fort Bachelortude

As the recessionary woes plague the nation your beloved Captain, now on permanent Galt vacation, has had the time to observe a couple trends or phenomenons occurring. Most notably the young man who now sleeps on my couch on account he is a friend and he is in a time of need because, well, his wife is an insufferable pain in the ass. This has resulted in my abode becoming what I like to call "Fort Bachelortude" - an oasis for bachelors as they battle against life's daily onslaughts.

Go to the neighboring town of mine and you will see two other bachelors forming a brother fort on account one of them is a pilot (whose industry is not known for long term, stable employment) and needs just a place to sleep and a stall to shower in. The owner of the house (a bachelor) does not have a wife nor kinder and therefore has an extra room by which he can rent out for very cheap to the pilot bachelor. This is a mutual advantageous relationship in that the room has gone unused and why not generate at least a pittance of rental income while splitting chores.

Of course these are merely anecdotal stories of bachelors shacking up, but enough anecdotes make a trend, and trends make statistical fact, and so allow me a prediction;

The RISE OF THE BACHELOR FORT!

Both the pilot and my romantically beleaguered friend are empirical evidence of two traits of society that are going to drive this "bachelor fort" trend. A trend by which bachelors minimize their expenses, just try to get by as cheaply as possible, and therefore form MANLY coops (because most coops are pretty effeminate) of residency by which to save money.

For example my friend who now resides on my couch is suffering from one of society's trend whereby the entire courtship/romance/marriage or whatever you want to call it industry is completely biased and tilted against men. Divorce courts, child custody, and forget law. Just look at the purified hell a young man must go through in the US when it comes to dating the American Idol worshipping prima modannas. Inevitably a man comes to the realization that he is finite and he is going to die. Does he spend his time slaving away to make daddy's little princess happy? Or does he decide to find a couch, play some video games, smoke some cigars, drive a motorcycle and do what he wants to do? I could go into this in infinite detail and no doubt I will receive many complaints from women, but it doesn't change the fact that courting and marriage for the average American male is so horrendous that it should not be surprising that the trend of men opting to never marry will not just continue but increase.

This trend of course is great for Fort Bachelortude in that without a wife demanding a brand new 3 story suburbanite dream home and children crying and screaming and bringing communicable diseases into the house, the sole, lonely bachelor only needs a couch and a bathroom for his living needs.

The second trend is what my pilot buddy faces - unreliable employment. Not because he is an unreliable employee. Oh no no no. Scott Adams has long ago proved corporate America is to blame for the lack of loyal employees. But because employers, for the most part, are just as incompetent as the employees they love to blame their incompentence and quarterly losses on. The WWII generation is no longer at the helm. It's the baby boomers at the helm, the even-more-entitlement-mentality-driven Gen X'ers seeping into middle management, and the even-more-entitled-than-that Millinials at the entry level. And you people wonder why there's 10% unemployment and no private sector growth.

Regardless, this poses a quandry for your conventional bachelor. Simply;

THERE'S NO JOBS!

You also combine that with the fact that this latest recession has disproportionately affected men more than women to the point it's called the "mancession" it leaves a populus of bachelors out there looking to minimize expenses as much as possible. This drives American men NOT to go back home and live with mom at the age of 40 (like many of our southern European counterparts do), but rather shack up with other impoverished bachelors to pool resources and share expenses.

Now at first, most people would look at this and say, "My god, what a bad thing. How could this be happening?" But permit me a couple observations.

First, bachelors, if they're real tough, traditional American men, do not have their lives nor base their lives on their homestead. Their lives are defined by what they do OUTSIDE of their place of sleep. Ergo, a single male WHO HAS NO KIDS, does not call home "where he rests his head" but rather "home" is his network of friends, his hobbies and what defines him as a man. And whlie in our ignorant youth some of us may have thought a house in the suburbs with a June Cleaver wife (who was actually pretty hot by the way) was the "goal" as we've aged we've realized there's more to life than just doing what literally billions of people have done before us. And instead of having the majority of our finances tied up paying for a mortgage and family we can't afford, with minimal living expense and a lot of free time (thanks Barack!) we can now actaully pursue interests and hobbies that interest us. This is the key thing to Fort Bachelortude - trading labor for leisure. Since there are no jobs, if we can master the art of cost-minimalization, we can enjoy a higher standard of living at a much lower income in that we have all that much more free time.

Second, Fort Bachelortude is not a frat house. I'm not talking about a bunch of rowdy teenagers, getting drunk, living off of daddy's dime while they major in "business." I'm talking men in their 30's and 40's who can actually shack up without any drama or chaos about who left the puking donkey in the living room. Men who are forced to join Fort Bachelortude are much more mature and make any kind of traditional roomate dramas a thing of the past.

Thirdly, it forces bachelors to rethink what's really important in life. I know women are not going to like this, but men, you are a factor too. And not just any factor, a very important factor. Matter of fact a completely necessary factor in by that default you are 1/2 the factor. Your life and your happiness should come first as long as it does not expense or hurt somebody in the process. I know we've been trained to put family and household ahead of us, but please. That doctrine was established in the 40's and died once conventional feminism took hold. There is a whole world out there for you to explore, and as I mentioned before in point #1, you may be forced through divorce or dumping, combined with economic realities, to not just minimize expenses, but that you will also have a wake up call forced upon you. If you have such minimal resources to pay for your living, what are the most important things for you to spend your money on?

In other words, Fort Bachelortude is not just a means by which you get cheap rent and your landlord buddy gets beer money, it makes you take inventory of your life and ask how do you want to spend it.

Now the ramifications of this trend are very politically incorrect. Men just going and doing what they want? MEN abandoning the courting/dating/marrying market and pursuing hobbies of leisure? Men not walking up the isle and instead just renting a room in the basement of some other heathen bachelor while he plays video games all day???

Sadly (or perhaps maybe happily) yes.

For you see, men don't really have a choice. The economy has been feminized to the point safety is put ahead of any kind of innovation or production. Equality is more important than excellence. And harmony has replaced competition. This is not a welcoming environment to the traditional American male simply because it goes against a male's nature. And when this is the environment a male doesn't go forth and try to produce huge amounts of production or start up a new company or become the next Tony Stark, because...well...why should he? (First, he can't, second, you'd tax him to death) Instead, and this is the real threat to the conventional way American thinks, what if the real men of society, just plain gave up, decided to play video games, decided to minimize expenses, and never work hard again? What if they stopped marrying, working, and instead put their own happiness ahead of everybody else's and simply pursued a life of leisure and hobbies that they wanted? What would be the long term economic consequences if such a large percentage of the labor force just plain gave up or didn't try their best anymore?

I'll let that thought fester in your mind, in the meantime, doors are open at Fort Bachelortude. BYOB.

Non-Ivy League Observations

Was having an e-mail conversation with a student and noticed this might be worth posting;

"Yes, correct. I tune into CNBC every once in a while and I'm amazed how in general the gurus of Wall Street have horse blinders on. They look at financial statements, they look at balance sheets, they run their little models and they only look at the industry. They never go BEYOND the industry and incorporate the ecnomy.

What is ironic about this is (ESPECIALLY in the past 4 years) the majority of stock price movement has had NOTHING to do with individual companies, but rather the overall economy. Even with the housing bubble, subsequent crash, debt crises in Europe, these Wall Street drones just keep looking at the industry and drone on.

You could also see it in the build up to the housing market bubble. Economists such as Shiller, Roubini, not to mention my humble self, were trying to warn people and banks about the housing bubble, but all the TOP FINANCIAL GENIUSES AT THE TOP FINANCIAL FIRMS DIDN'T SEE IT COMING. I remember the chief risk officer of Merrill Lynch (I think) being interviewed by The Economist about 2007 and he was quoted as saying, "We looked forward, didn't see any risks to the economy." I was sitting there thinking, "How on earth did you NOT see any risks?"

Well, again the reason is they're trained as Ivy league MBA's to just do DCF, look at what they've always done and ignore the larger economic picture.

I'm afraid, given what I see on CNBC, these geniuses are still missing the boat. The larger economic threats are debt, a "perma-retirement" bubble in the stock market, and scloretic eocnomic growth that will impair entitlement programs in the future and undermine the entire retirement planning philosophy (ie-the stock market may not grow by 12.5% per year "like it always has.")

Of course, I don't have enough gray hair and went to just a Big 10 school, but your observations of where their analysis was lacking was indeed spot on."

Again, my services are available for the now failing, taxpayer-bailed-out bulge bracket investment banks who eschew those icky gross Non-Ivy-League commoners - at a premium of course.

A Cartman Moment

There is no limit to the number of men and women I run into who upon finding out that I ballroom dance on the side are immediately intrigued and interested. I then say, "well, why don't you come out dancing with me and my friends? Or perhaps take a class?"

To which they predictably respond, "oh, well I don't know how to dance."

And thus I feel like Cartman talking to Butters in the episode "Make Love, Not Warcraft" (see here).

You see (ladies and gentlemen who are interested in dancing but then never take a dance class because you innately don't know how) you CAN'T LEARN TO DANCE UNLESS YOU EITHER TAKE A CLASS OR GO OUT AND TRY!!!

I file my complaint today primarily because of the lost amount of fun people could have if they just went out and at least TRIED dancing. They're missing out a great world simply because they somehow magically think all ballroom, swing and salsa dancers somehow were just born dancing and we never ever had to train or learn the basic steps in the first place. As if just after college, BOOM, the Magic Salsa Fairy took her wand and went "pwaaaaannng!!! You can now dance, Captain!"

The other reason I bring this up is for the younger men in the Capposphere. I have retired from the courtship/dating game and now never ask a girl I don't know to dance. And the reason is simple - they always say the same thing - "Well, I'd love to, but I don't know how?"

This you understand has happened at least a hundred times in my life. But understand the irony of it.

The Young (and highly accomplished ballroom-dancing) Captain, goes up to girl X. There is a nice open wood dance floor. There is a GREAT band playing. And everybody is dressed to the nines looking sharp.

I say to girl X, "Girl X, would you like to dance?"

She says "I'd love to, but I don't know how" to the ballroom dance INSTRUCTOR.

"Well I'll show you how to dance" says the ballroom dance INSTRUCTOR.

"Oh, well I don't know the moves." invariably says girl X.

"Yes, but that is why I would SHOW YOU THE MOVES" says the ballroom dance INSTRUCTOR.

By that time inevitably the situation deteriorates to a cackle of girls are wooing and giggling, pointing to one another jesting the other should dance with the "foolish" dance instructor, who leaves the table and takes with him what was a genuine and great opportunity for these girls to learn to dance.

So to the younger ballroom-dancing men in the Capposphere - don't bother asking girls to dance unless it is at a bonafide ballroom dance and they are bonafide dancers. You're just wasting your time.

Regardless, the overall lesson for the aspiring, junior, deputy, official or otherwise economists out there is to just try dancing ONCE. Go take a class, especially if you don't know how, because that's why you take a class. Or if you're particualrly shy, the Captain does sell instructional DVD's which you can practice to in the security and safety of your own home. And ladies, the dirty little secret of the ballroom dance world is that you don't even need to take a class because there is no limit to the number of men who like to use it as a means by which to hopefully get your number or pick you up.

Alas, I fear I shall still be Cartman in this regard.

Oh am I Good

See, now it's legitimate. BEforehand I was just a crazy kook, now since the WSJ has ordained this as a possibility, I am a visionary.

Enjoy the Decline!

You mean all that monetary policy, low interest rates and stimulus hasn't made my house worth millions?

Enjoy the decline!

Ooo! Spank!

Those blasted forefathers and their "balance of powers!" Don't they know who I am!!!

Bugs Bunny, Bugs Bunny, RAH RAH RAH!

I was going to write something intelligent and insightful and then I realized too high a percentage of the population is too damn stupid to listen to what I say anyway. That being said, I refuse to degrade myself to an American Idol level of stupidity and entertainment, so permit me to post this so those of you in the Capposphere may enjoy an intelligent yet entertaining post.

But He Means Well

And intentions are all that matter in the world of the left.

Fun Fed Charts!

Today's exciting economic charts are brought to you today by the US Federal Reserve!

Your thought of the day:

"How much lost economic production have we have lost because 10% of the labor force is unemployed

AND

not just unemployed, but unemployed for a longer period of time than ever recorded

AND

also considering the labor force participation rate is going down?"

Enjoy the decline!

The Psychology Profession Summed Up

Stock Market Valuation

Read the following as if you were a suburbanite young girl who always speaks as if she's asking a question;

So like, I think I should um, like invest in my 401k????

Becuase um, like the HR person said it was good thing to doooooo???

And, um like, I'll buy a stock and it will, like, you know, go up?????

Because that's what I've been told and everybody should be throwing their, um, hard earned money into the stock market because the government said we should???

But then again, never listen to me. What do I know.

Wells Fargo Wouldn't Do That Now Would They?

I remember my youth working at Wells Fargo where the text on my computer screen was green. I also remember having to print off reports on a DOT MATRIX COMPUTER. We would then fax these reports long distance to bankers in far away lands. This was the year 1998 when not only did laser printers exist, but so did scanners and this new-fangled thing called "e-mail" with brand "Attachment Capability."

I was foolish enough to suggest that they spend some money on some new PC's, have the IT set everybody up with e-mail, get a couple scanners and we could save some money and time. I also did a NPV calculation to prove how much it would increase not just the net worth of the company, but for each share.

I was summarily told I did not run the company and I was to get back to data entry and filing.

Later that year the bank closed down that branch and fired everybody, but not before I quit and went back to working security at nights (which is a great job by the way because nobody is around to bicker and moan about how you do your job).

Good to see Wells Fargo still has great minds at work for them.

Now That's Not Nice

Pointing out Obama's fiscal policy has failed. How dare he!

And as always, enjoy the decline!

Consult the Captain

Hello fellow Aspiring, Junior, Deputy, Official or otherwise Economists!

As you know your beloved Captain is gifted with Super-Awesome Economic Genius. And as you know your humble Captain dispenses this Super-Awesome Economic Genius on a regular basis on this here blog. However, a couple of you have recently contracted the Captain out for specific or unique consulting projects which has prompted him to officially offer his consulting services to anybody who may be in need.

The range of services can entail anything from general personal financial advice to specific and unique corporate projects. Most of it has been personal financial advice to help navigate and prepare for these difficult economic times, but as you've seen from the blog we here at the Capposphere cover pretty much everything.

Pricing is done on a project by project basis, and yes, the Captain is going to charge enough to make it worth his while. However, it will be nowhere near as pricey as Bain, McKinsey or Accenture and it will be infinitely better (simply on account they do not have Super Awesome Economic Genius, let alone independent thought).

So shoot the ole Captain an e-mail if you have a question or a problem that needs resolving and we'll see if we can't help you out!

CAPTcapitalism - a.t. - yahoo dot com

Where the Hell Have You Been?

Really, it takes the MSM this long to finally start asking these questions?

Yes, Where Will They Find the Money to Cut?

I love how the government (at varying levels) claim "we've already cut everything down to the bone."

Pha! Laffer! What Does He Know!

Enjoy the decline!

Tuition

I wonder how much tuition would drop by if we ended all the worthless programs that give the kiddies worthless degrees and just left engineering, accounting and the sciences at the U of MN.

Of course this is laughable because it's little Susie's and little Jimmy's right to go to college, have their "college experience," while majoring in a hobby with no employment or productive prospects in the future, all while having it subsidized by the taxpayer.

Enjoy the decline!

Go Back to Organizing Communities

I bet, I just bet, there's a lot of people ruing the fact that they not so much voted for this incompetent child, but that they got caught up in such frivolous tomfoolery as "nice pecs" and "hope and change."

I'll try to be as simple and direct as possible.

In the real world, you have real problems that require adult attention and action. And when you're nothing more than a trust fund baby brat, with no galvanizing, harsh, real world experiences-say like working to support yourself-, you (no matter what your age) are nothing more than a child faking it as long as possible before the population realizes you are not an adult and are supremely incompetent to handle any responsibility, especially the tonnage of responsibility known as the presidency of the United States.

And it must be a huge blow to the ego to realize the only reason you're president is because society has degraded to such a point that a bunch of dolts watching "American Idol" who thought you had nice pecs and were "cool" voted for you quite simply on those grounds.

Regardless, enjoy the decline! I'm going fishing!

Minnesota

At the 6:40 mark you can insert "until the unions ruined it and now nobody is employed in Hibbing."

A Home Work Assignment for Any Cappy Cap Reader That Wants It

Driving around the Lake Minnetonka area today because, well, what else do you do on a 78 degree day when there is no work to do and while listening to the news I slowly saw the Dow drop 100, 200 and then 300 points and then had an interesting thought.

"Based on the number of retirees, pensioners, present and future, and considering the amount of money being invested in the stock market, and based on average life expectancies and cost of living requirements, how much will the stock market have to go up by in order for traditional retirement plans to succeed?"

In all of my studies and research there was always that 8-9% annualized price appreciation in the stock market that was assumed to go on into perpetuity. With the collapse in long term economic growth, what if the entirety of Americans relying upon their 401k's and IRA's, just plain don't get 8-9%? What if it's going to be something more like 5-6%, or maybe like Japan, 0 to -2% for the next 20 years?

Regardless, I am curious what the "Dow would have to be" in order for everybody's retirement plan to work out the way it's supposed to. If somebody wants to take a crack at it (on account that I am lazy) I would certainly be interested in seeing the numbers as well as the methodology.

And then I will laugh heartily when we see how egregiously and impossibly high that number is compared to the reality of American economic productive capacity.

Enjoy the Decline!

Hey, look at that booming economy!

Anybody want to join me for a scotch on the top floor of the Titanic?

Or Courtney Munna Could Have Just Read This

I don't know how much clearer I can make it. (or if you prefer paperback, here)

But then again, reality doesn't matter. It's what you want to do and what your heart tells you and that's all that matters. I'm sure majoring in communications will land you a job somewhere.

If you want to see denial (or just an outright lack of spine on the part of people telling Courtney the reason she doesn't have a job is because she majored in a worthless subject) just read the comments here. It's amazing and appalling the sheer ignorance these people display.

The $64,000 Question Is...

Will people now change their minds and realize this was a cowardly attempt by terrorists, guised under noble, humanitarian clothing to smuggle weapons in (and thus in part admit there is now a desire of lefter leaning elements to combined forces with terrorism) and therefore condemn it

or

Will they refuse to admit they're wrong and tacitly support terrorism because their leftist ideology blinds them from any kind of capacity for intellectual honesty

or

They will cowardly claim this report is false and that the Israeli's made it up.

It is a very important question because it's going to test whether people (primarily of the lefter persuasion) can set aside their ideologies and as adults acknowledge they were wrong and condemn terrorism or if their ideology is so strong they will still maintain their positions and thus tacitly APPROVE OF TERRORISM.

I shall now sit back and watch this unfold like a movie, much like a did the housing crash, without an utter care or concern because simply it's a lost cause and life is too short to worry about things you don't control. So, enjoy the decline!

Today's Idiot Is...

You have to read down a bit to find out why this moron is out $100,000 and unlikely to ever pay it back.

The crusade against worthless degrees will continue.

Three Blind Mice

Imagine the smile on the Captain's face when he saw not one, not two, but THREE banks he had approached before regarding having him do their loan analysis for them mentioned in this little article.

Now if only...ah, never mind. You know the rest of it.

Correct

I Do Care Who Started It

And these peaceniks would NEVER EVER start something now would they?

Big Oil vs. Big Banks

I'll send somebody a shinny new nickel if they can explain to me that when BP screws up we make sure they pay every dime in damages, but if a bank screws up we bail them out with taxpayer money.

Rita Wilson

I love how they use children to extort money from the taxpayer.

Yes, won't somebody please think of the children.

Another question is would you really want this woman teaching your child in any subject, simply because what kind of warped ethics would she be teaching them?

Steve Wynn

My new hero.

Of the many things I like in it those that I like the most;

1. He's essentially shorting America by investing in its vices. Spend money you don't have, sex, live for the moment. He'll be the one with the cash after it's all said and done.

2. He finds it easier to deal with the Chinese government than the US government.

3. His quip on EBITDA. EBITDA, for those of you without the benefit of an accounting degree is your "Earnings Before Interest, Taxes, Depreciation and Amortization."

This measure is basically the most liberal and handicapped measure of a company's profits because (as far as lenders are concerned) this is the amount a company has to pay any loans that are made to it - the money you have before you pay out interest, taxes and account for depreciation and amortization.

I've never liked the concept of depreciation and amortization. I do understand the "matching" principle of accounting in that you spread out the cost of long term fixed assets to match the overall expense with the revenue it helps generate over the years, but for larger companies that are always buying fixed assets to replace the old ones, would simply expensing your purchases outright really make any difference between your cash flow and net income.

I also have a distaste for EBITDA because it was always used by bankers as the measure to see how much debt a company could afford. LITERALLY ignoring the fact the company would have to spend some money SOMETIME in order to keep its operations going. So if you based your loan on the amount EBITDA showed, you were pretty much guaranteed to be lending beyond the payback capacity of the borrower.

Alas, it was these sort of "rocking the boat" observations that attracted the criticism of my now insolvent previous employers, but as Steve Wynn has pointed out the "City Center" project which was financed by the likes of my previous employers, is belly up and bankrupt.

The Bachelor Budget

Many years ago, when the Captain was but a wee private, he put himself through college working at the campus police department doing campus security. It paid $6.90 and after three years and several promotions he was making $9.10 per hour.

I worked full time while going to school full time, but not once did I ever make more than $20,000 in any given year. However, I didn't need to, because by the end of my college days I had a surplus of $6,000 (which I bought a converitble with to celebrate finishing college). And while there has no doubt been inflation over the past 15 years, this spartan existence behooves the question;

"What is the absolute minimal amount a single person can live on today?"

I ask the question because whereas 15 years ago your young and naive Captain had dreams of working hard and establishing a long and successful career, observations of mortality and a limited life starts to make one think how does one spend their finite time on this planet. You throw in a recession, a-soon-to-be overall tax rate of 40%, the increasing likelihood Roth/401k's/IRA's will be rescinded and nationalized, and a general deteriorating future for the country it's like being the navigator on the Titanic. Inevitably you should give up trying to convince the captain to change course and just pony up to the bar and get the finest bottle of scotch.

Thus some back-of-napkin calculations to find out what, if necessary, is the absolute minimal a single person can live off of and pursue a life of leisure fully intending to maximize their free time on this planet and not to build up an estate or empire.

My estimate is in today's dollars $16,200 in annual income should cover every bachelor's basic desires and needs. This of course assumes several things;

1. Never a new car, always used.

2. Liability insurance only

3. No children

4. Catastrophic insurance only

5. No traditional "$25,000" wedding should he/she get married.

6. Living in an area that is NOT New York or San Francisco or some other expensive area to live

7. Roomate or a cheap one bedroom apartment

Now I am being serious here because I want to make sure I've caught everything. Do any of the Cappy Cap readers see something in my budget that is missing? The reason for my adamancy is because if we can calculate a precise number, then it will allow people to look at their personal finances, see if they can live on that amount, and if so, then weigh whether a life of slaving away for $60,000, $35,000 net, not to mention the standard corporate political BS that comes with it and complimentary high blood pressure and 2 hour commute, is a better existence than working some night time security job for $18,000 a year and fishing and reading books.

"Where are We Going?"

A colleague of mine asked and I thought this e-mail might be of some humor and entertainment;

Without going into detail, I predict a general decline ala Japan from 1989 to today. YOu will see the "Herbivore" movement in Japan come to the US and (gender politics set aside) men just frankly leave their traditional roles which will have large implications for future economic growth as well as stagnation in corporate profits and thus stock prices. This decrease in economic growth, combined with a decrease in asset prices is going to impair and underfund not just private pensions, but 401k's IRA's and 457's. Spending commitments made by Obama will essentially make the future so uncertain and taxes so likely that everybody, regardless of gender, will be less incented to work. Productive, hard working people who would have normally bred future generations of workers will opt for vasectomies instead and choose a life of leisure over work. This will bode ill for current and future pensioneers who were relying upon others to essentially work for them and pay for their retirement, not to mention health care. Nothing will change until the younger generations get a rude awakening that "unfortunately, yes little Jimmy, you do actually have to produce something of value in order for society to succeed, let alone, survive," but this lesson will be delayed as the rest of the world panics and throws money into the US dollar as a flight to safety simply because its "the US" permitting us to borrow more money and live the Barbie World lifestyle where we produce nothing, but buy everything as if the US was one big shopping mall. Financial crisis inevitably ensues, Keynesian fiscal stimulus never works, economy collapses and now people will finally have the free time to study economics and figure out how we got there in the first place because nobody will have jobs.

And everybody will blame Bush.

How William Shatner Could Reform Health Care More than Obama

So I apply for health insurance online because the Captain is one of those swashbuckling, self employed entrepreneur types that answers to no one, drives a motorcycle, calls his own shots, and ultimately as a result of his non-conformance has to get his own catastrophic health insurance.

I shopped online at esurance and noticed the application process was nearly identical to looking for hotels and flights. The only difference was that unlike Hotels.com, you can't "name your own price."

Thus I wish I had the Priceline Negotiator with The Big Deal backing me up when I got my quote.


It was a fair quote, but I noticed the one sidedness of it all. I either had to accept or not. There was no way for me to talk to the underwriter and say, "look, I use tobacco, but it's a cigar every 2 months. I'm not smoking a pack a day, cut me a deal or I'll go look elsewhere."

Alas, this option does not exist. However, if it did, I wonder what effect it would have on health insurance prices? Not that there are a lot of margins to be squeezed out of the insurance industry, but by simply having The Negotiator and The Big Deal on your side, perhaps some savings, or at least cost control would be realized.

Liberal Arts Majors Get Hit Upside the Head By Reality

This is absolutely priceless.

It's a 30 minute long podcast from NPR and basically it's the host taking calls from listeners, specifically, recent college graduates to tell him about their current job prospects.

It's a lengthy broadcast, but if you have the time I suggest downloading it because you will get a good guffaw out of it.

In any case, allow me three quick points;

1. The only people calling in are liberal arts majors who cannot find jobs. This unto itself makes it worth listening to, but what is really great is how the host and guests cannot get up the gumption to tell these children their degrees are worthless. The hiring expert users terms like "that's one of the weaker degrees for the current labor market." I especially like how they explain to the "environmental science" major how green jobs are not there for her.

2. They then turn their attention to the employment gap between minorities and whites. And instead of actually helping out minorities by pointing out a disproportionate number of them major in fields that are not in demand, they lie and say, "they don't know" why there is an employment gap. Their cowardice angers me because if you really cared about helping out minorities you would grow a spine and tell them they should major in engineering and computers. But no, that would be "hurting their feelings" and we can't have any of that tough fatherly love (no matter how much it would help out our fellow minority brothers and sisters) now can we?

3. At the tail end, what do you suppose the solution is they recommend? Federal government intervention.

Ah, liberal arts majors and the adults who lie to them.

If only they read my book first. It could have all been avoided.

Dow 8,000

A new twist I hadn't factored into my Dow 8,000 prediction was the risk of war on the Korean peninsula. Regardless, enjoy the decline!

I Shall Never Complain About My Dating Life Again

I actually know a couple guys like this.

Was led to confirm this fact by this.

You Mean We Have to Grow Up and Be Adults

Seriously, this article should be titled, "Europe realizes it has to grow up and become an adult."

I grow so tired of trying to explain the simple concept that in order to have such luxurious benefits a country must produce an insane amount of wealth and production in order to have the tax base to raise such a infantile-dream level of benefits. I then get enraged when I hear not only people my age (35) but people who should know better (50 year olds) dismiss it as "right wing talk" as well as dismiss all my research and experience and a triffle with youth and a cute childish experiment in economics. But then I have to tell myself;

"Cappy, Cappy, now come on now. You told yourself you were going to ignore this and just hunt fossils and go fishing and play Bio Shock 2 and purposely force yourself to enjoy life. You can't let the ignorant people of the country get you down. Besides, you don't have any kids and you are not encumbered by any real financial obligation. And even though becoming the world's next best and highly paid economist will be a never-realized dream, the next best option is to barely work and head out to North Dakota and Wyoming on multiple fossil hunting expeditions. Nobody is going to listen to you now. Nobody is going to listen to you tomorrow. But someday, when they've slaved away, socking hundreds of thousands of dollars into an IRA account, only to have it confiscated by the government they voted into office, you will bit sitting there pretty with over 4 decades of fishing, fossil hunting and video gaming under your belt asking them the ultimate question in economics;

"Did you spend your finite time on this planet wisely?"

I shall now go ride my motorcycle and NOT contribute to GDP today.

Dow 8,000

Another post in my series "Dow 8,000"

Apparently the "Puppies and Flowers and Unicorns" fiscal policy isn't working. Who would have thought!

GM Payback

This math reminds me of the good ole days when a client would have one LLC hemorrhaging money, but another LLC that was just squeaking by on profitability. Of course overall his entire business was losing money, but we were supposed to make the loan to the one profitable LLC and ignore his collapsing "business empire."

Ahhhhh, fuzzy accounting.

Dow 8,000

I will say it again for the cheap seats;

Based on corporate earnings the Dow should be trading around 8,000.



But (to quote Michael Savage) "You don't want to hear about this. You want to hear about some guy who hits a ball over a fence."

The Ivy League Bubble

Your Captain is largely self-employed. It is because of this he greatly appreciates your contributions. However, because of his self-employed nature (and his rebellious psychological handicaps which prevent him from becoming a cubicle slave), he needs to put food on the table and therefore has to come up with new ideas and ventures. Most of these (like his attempts to court women) fail. But because of the sheer volume of attempts made, I do inevitably succeed (in both work and the ladies).

However, your Captain is working on something very big. And by very big, I mean Gru attempting to steal the moon big. If funding is received for it, I will have to employ people and executives and probably a lot of them, however;

NONE of them will be Ivy League graduates.

And NONE of them will be MBA's.

The reason why is so blatantly obviously, that perhaps it needs explaining.

First, look at our beloved president. Barry is a Harvard graduate. Not a great marketing campaign. "Hey, look, I graduated from Harvard! I'm so smart, I spend $1.4 trillion more than we take in EVERY YEAR!"

Second, if you are on the other side of the political fence, Bush Jr also a Harvard graduate. Not a great marketing campaign. "Hey, daddy, give me money so I can run an oil company and a baseball team into the ground!"

Third, if you look at the

housing bubble
dotcom bubble
Savings and Loan scandal
Asian currency crisis
Enron and the accounting scandals

and pretty much every major economic disaster in recent history it is caused by two general groups of people;

Ivy league graduates

and

MBA's

(sometimes both)

Now who am I to claim this? I went to some crap state college and paid my way through. I don't make more than $30,000. What the hell do I know?

Well, I'm an entrepreneur. And like all entrepreneurs we fail miserably for the most part. But inevitably we break through with something. We come up with something that is so big, "it will blow this pyramid thing out of the water." And when we succeed, it is not GW taking his daddy's money and buying a baseball team. Nor is it Barry Hussein taking his grandmother's money and writing books about himself. It revolutionizes economies and entire industries and it is the Ivy leaguers that work for us. Not the other way around. And the reason why is that Ivy leaguers and MBA's are not trained to think or be creative, they're not even trained to obey. They are trained to work the system. They are trained to simply be one thing and one thing only;

Rent seekers.

Don't believe me?

Look at GE.

That entire corporation is pathetic to my smallish LLC. Why?

I don't need to force through legislation that the entirety of America buy my light bulbs. I produce something of value people want.

Goldman Sachs anyone? Matter of fact the entire bulge bracket. They can't get it up unless the government bails them out. Hmmm...so they hire from any place outside the Ivy League?

Look at all of K street. You think lobbyists exist because their company makes the best product the people want? No, they exist because corporations figured out it's more profitable for them to bribe elected officials to enact laws that give them an unfair advantage over their competitors. So instead of developing the latest and the greatest, it becomes fighting over the remains of a stagnant economy.

Of course what happens is the "old" economy while wrapped up on politicking and bribery and law suits, loses its creativity and vitality to the "new" economy where younger whipper snappers come up with ideas that obsolete the old economies, turning them into worthless bankrupt entities over night. Regardless, understand the MBA's and Ivy Leaguers can only exist and survive in a cronyistic and corrupt environment. And not only will those environments inevitable fall to new ones, the new industries that do come about are going to look at the Ivy League's "product" and MBA's and say, "Good lord, why in the Patron Saint's Name of Frick are we going to hire these charlatans?"

Thus the collapse of the education bubble, particularly the Ivy League.

Understand this and understand this well. It may not happen tonight. It may not happen tomorrow. But until MBA's and our precious "best of best" Ivy Leaguers start actually proving their worth (or perhaps just stop destroying the economy every 5 years or so), the real capitalists and entrepreneurs are going to get wise as to what a scam it is hiring these overpriced dolts. And when this epiphany hits (and also assuming our great Harvard-educated leader can get the economy growing significantly again - ha!) the demand for MBA's and Ivy legaue degrees will have so dried up, that the likes of Yale and Harvard are going to be synonymous with "The University of Phoenix" and "Rasmussen Business College."

Enjoy the decline!

You WILL Enjoy the Recession

Hey, Let's Invest In Greece!

Heh.

Commercial Bank Profits

Thought this chart would make those of you in the Capposphere a little smiley today.

Now imagine if banks were to have just paid the ole Captain a mere $10 billion to tell them not to make bad loans as a consulting fee.

My Old Digs

Riverside Plaza is also affectionately known as "the Crack Stacks" or "Ghettos in the Sky."

It is also where your humble Captain resided for 2 years of his collegiate days.

It is your classical government/affordable housing project where somebody high on pot back in the 60's was given the architectural contract to make it look hideous and be an eye sore to the city's skyline.

All that being said I have fond memories of the Crack Stacks;

washing clothes in the bath tub because you couldn't trust your clothes to be washed in the public laundromat, not to mention it was 34 stories below my apartment

carrying 60 pounds of groceries in one shot because you didn't want to make multiple trips

running down 34 flights of stairs during a fire only to realize that if there ever was a real fire, everybody in the building would be doomed because the slow old people who live downstairs back up the stairwell like a Wisconsin driver hauling horses during rush hour on 494.

Looks like it's going to get an overhaul (of course with part of yours and my dimes), though sadly, the city will continue its rapid charge to become the next cold Detroit so it's kind of like grooming your dog before you put it to sleep.

Counter Boycott

I loathe the hypocrisy and intellectual dishonesty of the mayors of both San Fran and now St. Paul "boycotting" Arizona.

Yes, how dare we protect US sovereignty and have the slightest bit of self-respect for ourselves. I mean this isn't our country. It's the world's country.

Of course, this is nothing more than a dispicable level of hypocrisy to protect an illegal voting bloc, while they sacrifice the integrity and sovereignty of the nation (I particularly like how Coleman calls it "hate.")

Regardless, listen to your Captain and do me one huge favor.

Go here and look up a company that you have a need for and FREAKING buy something from them.

I know you didn't want to buy my book (sniff, sniff, guilt trip, guilt trip), but please make the Captain happy in thinking that he somehow caused a nation-wide phenomenon to boost Arizona's GSP and interstate exports by 300%.

Effrontery

So I'm watching "Charge of the Light Brigade" and Errol Flynn just used the word "effrontery."

Meaning shameless boldness that is an insult to standard social decorum and propriety.

I shall try to incorporate it into my speech.

I Need a Doctor

Because my eyes just got stuck rolling in the back of my head.

Peter Schiff better run for president.

Sun Chips

Your Captain grills a lot. And his friends bring over "Sun Chips" as a snack. Of course you can't ignore the boasting of their green credentials because all over the bag they brag about how the bag will naturally decompose and their sun chips are made with "100% natural sun." So you could imagine my happiness when I saw this on Sun Chip's banner advertisement on You Tube.








Apparently you can all upload what you did for Earth Day. It is subject to censorship...err..."moderation." We'll see how long Michael's stays up.

Happy Earth Day...I Think

I'm under the impression it's Earth Day or something today.

Whether it is or not, it's always a good day to drive your 8 cylinder car around. I have an old GM car, the tires on which are NOT inflated properly. I shall drive it.

I will go to the grocery store and ask them to double bag.

I will then burn the bags.

I will also grill a steak because cows emit carbon and to grill I will have to use fossil fuels to heat it.

Do your share to emit more carbon than the phonies claim to save.

The Great Ugly Jean Purging of 2010

Lo!

Your Captain, not only be wise in the world of economics, but is also an accomplished ballroom dancer, extraordinary video game player, fossil hunter extraordinaire and all around funny and amusing guy. And thus, your beloved Captain would have thought this would be enough to satiate the intellectual and romantic desires of his beloved Natasha.

However, unforeseable to your humble Captain, he walked right into a trap without knowing it. Oh, it started innocently enough, but little did he know what was in store for him.

It all started when thanks to President Obama both your Captain and Natasha had no real work to do for about 2 months. Besides which we were told we didn't have to worry about our mortgage or paying for gas any more, so off we went to Missouri for a 6 week vacation. A mere week before this I had come down with a nasty bout of poison ivy, and was thusly aware of what it looked like. However, eager to find fossils in Missouri, I pulled over my motorcycle when I saw a promising strata of rock, running up to it, only to realize I went through a 20 yard patch of poison ivy.

It then became a mission to immediately get rid of the jeans I was wearing and buy a new pair. Stopping at the local Pamida, I bought a nice, big, baggy pair of jeans, perfect for riding my motorcycle.

However, Natasha protested. Not that I would swap poison ivy infected jeans for clean ones, but that the others were too baggy and did not show off "my cute little butt" (her quote, not mine).

I dismissed this as typical foolish female tomfoolery as I thought all jeans were the same. Sure some might fit better, but it was merely a whim of preference of women that would ebb and flow every other day, surely to be ignored because of it's irrelevance.

Now fast forward 6 months where the Minnesota winter has been replaced with a VERY early and VERY wonderful spring, permitting me already to put over 3,000 miles on my motorcycle. Not only has the weather allowed for me to bring out my bike early, it has also allowed me to start my seasonal running early. Your Captain is already running his goal of 7 mile runs which he usually attains come mid-May. Combine this with the wonderful economic boom promised to us by Barack Obama, and your Captain has more free time due to a lack of work which he has now dedicated in part to lifting weights.

What does this have to do with the Great Ugly Jean Purging of 2010, you ask?

Well, the combination of lifting weights AND running has resulted in...um...shall we say, a very Cappy Cap physique. So much so that Natasha, IGNORING MY INTELLECT AND PERSONALITY TRAITS, has now taken a new-found and cheap affection for my physical looks! Discarding my great economic insights and wonderful personality, she now barks orders at me to "take off my shirt."

I feel so cheap and used!

However, simple demands that I take off my shirt are the least of the costs of the Captain's new bod. The Captain's wardrobe has taken a beating as well, specifically jeans.

I had, I HAD, a nice collection of nice comfy jeans. Perfect for any kind of activity. Fishing, motorcycle riding, wearing, you name it.

But oh, no. No more. Those jeans just won't due according to the illustrious Natasha. And ever since this early spring sprung, she has declared war on my "Ugly Jeans."

The purge started much like Stalin's purge of his military officers, except with more vengeance, aggression and hatred. I was TOLD that I was going to get rid of my ugly jeans and replace them with NEW, BETTER FITTING jeans.

To this I had no choice.

And so, much like 1982 where my mom would take me to Goodwill and I would try on some stranger's jeans, with the tugging and the pulling and hemming and the hawing, Natasha took me to Old Navy (that's where the cool hip kids go if you didn't know) to replace my Ugly Jeans with new, "sexy" jeans ("sexy" apparently meaning they look worn and tattered like my old jeans, but cost 3 times as much).

And thus, at the ripe old age of 35, your Captain now has sexy jeans. The ugly jeans have been bannished, burned or otherwise taken care of, and now I can't ride my motorcycle for more than 10 miles without having to constantly...um..."adjust."

So men, beware. If you ever decide to work out, run, tone up and just become more sexy than you already are, realize there are consequences. Your women will no longer desire you for your intelligent conversation, your wittiness, or your knowledge of economics. No, they will become carnivorous temptresses, demanding a constant display of your body accentuated by "sexy jeans." You will be their little doll so they can dress you up in clothes to meet their shallow, lewd whims. You will become nothing but a piece of meat for their eyes to devour!

And alas, there's nothing you can do but grin and bear it.

How Does This Square with Reverse Mortgages?

Read the whole thing. I'll let you guys rip it apart.

Dow 11,000

Because I am in general a financial "party pooper," bringing in and highlighting facts, that "no, I'm sorry Suburban Sue, your house is not worth that much and you shouldn't have taken out that HUGE home equity loan to pay for your child's "masters in communications" degree," it is therefore behooved upon me to point out yet another sad fact for those who are woefully financially ignorant (which is most of the population).

I know you're all giggity giggity about the Dow breaking 11,000. But sadly, nobody paid attention to that all important economic lesson - CASH FLOWS DRIVE MARKET PRICES.

You see, prices can go up and down all they want, whether they are actually worth that price depends on the cash profits those assets generation. So yes, you can be very happy the Dow is up to 11,000, but did corporate earnings go up by a proportional amount?

Well, here's your answer;


You see, the PE ratio of the US stock market (as measured by Prof. Robert Shiller) compares the price of a stock to its earnings. Historically this has averaged around a ratio of 15 - 15 dollars in stock price for every dollar in earnings. And after the stock market crashed due to the housing market, stocks were ever so briefly "accurately valued." Meaning they weren't a steal or a great buy, nor were they overpriced.

Of course, that lasted about as long as sanity usually lasts in the financial markets and stock prices once again rallied, driving the PE ratio up to 22.10.

What does this mean for you the average investor? Well, for those of you who religiously invest in your 401k or 403b, you better pay very close attention to the prices you're paying for those stocks and mutual funds. For younger investors, I don't even know why you would invest in a stock market when not only it's overvalued, but it's progressively likely your "Roth" IRA or 401k plan will simply be nationalized and taken over by the government (much like they did in Argentina) to fund unfundable entitlement programs.

But I know, I know, I'm shouting into a hurricane. Why ruin everybody's good time?

Let's just party because an index broke an arbitrary number like 11,000.

The Wage Gap

Can an IT professional of the female persuasion please field this one?



With such intellectual dishonesty, the people at Newsweak wonder why their subscriptions are tanking.

Your Recession Medicine

I hear leading economic indicators are pointing to a recovery....well, not a GW circa 2002 economic recovery, but you know, actual positive growth in the private sector. In the meantime, enjoy the recession!

"...and then I will take her to the theater."

Let me tell you about a foreign friend of mine. We'll call him "Jose" just to keep him anonymous.

Jose came to the US several years ago. Highly trained in computer networking, he stopped in on one of my dance classes to learn how to dance. At that time he was actively engaged in pursuing American women. While growing up in his home country, American women, as well as the American singles scene was so glamourized on TV and the movies that he too wanted to participate in this wonderful world. He started by going "clubbing" in Minneapolis' daycare center...err....I mean "hipster" area - Uptown. He failed miserably and thus changed tactics by taking classes from "pick up artists."

Here he had limited success. He did learn the basic rules of ignoring and being indifferent, "negging" and so forth, resulting in a fair amount of dates, but the problem was that he was at heart a traditional man. Yes he wanted to play the scene, but it was for the ultimate goal of finding a wife, settling down and having children.

Sadly the "singles scene" in Minneapolis is NOT designed to produce high quality marriage candidates.

Thus when he was stood up, 505025'd, strung along, or just plain dumped when he started asking about getting serious, he become frustrated. Realizing at the age of 35 what most American native males do around 25, that finding a quality marriable woman is laughably impossible, he sank into a deep depression as he saw his imaginary wife and little Joses fade away.

However there was an unexpected life line of hope. Jose flew to Eastern Europe to do some mountain climbing, where at a small motel he stayed there was a nice central European woman. She ran the bed and breakfast he was staying at, cooked him meals, EVEN CLEANED HIS CLOTHES, and well...you can imagine what happened from thereforth.

Now, after two years of semi-annual visits, and constant contact on the phone, Jose is on his way back to this former Soviet country to marry this girl and bring her back to the states. I was driving him to the airport and asked him, "So when she gets here, is she going to work, or are you guys going to work on a family right away?"

And he said, "Oh, no. She will not work. I will go and work and make the money. She will stay at home and keep the house in order and make meals and bring up the children. I will work all day, come home and then I will take her to the theater."

It was a beautiful statement because whereas today people have been brainwashed to believe a woman staying at home doing the "womanly duties" is nothing more than a slave to the man, the reality is that Jose really does love this girl.

And the reason why is that she is not going to be some "slave" that he comes home to and yells at, "where the hell's my dinner, woman?!" It's the beautiful division-of-labor idea that one person would work, the other would work at home, they would raise a family and then my buddy Jose would look forward to nothing more than coming home and taking his wife to the theater.

Of course, what do those stupid Latino's and dumb Eastern European morons know about love and marriage? Look at how neanderthal Jose is, let alone how naive his fiance is. Why, don't they know the pinnacle of marriage is to have TWO people working TWO, if not, THREE JOBS, while they outsource the upbringing of the children to the nanny, or pay higher taxes to the state educational system? They then rush home where no food has been prepared and the children are slowly alienated from their parents. Let's not forget that Mrs. Jones-Hyphenated-Smith needs to get her masters is child psychology so she can better understand why little Johnny set fire to the couch. And Mr. Smith better work really hard to buy all those toys his children want, not to mention baseball practice, volleyball, student council, debate and racquet ball. And he better work doubly hard to buy his wife that new SUV she NEEDS, otherwise, she may just have to file for divorce because there wasn't enough jewelry to reconcile their differences.

Obviously Jose does not know what he's doing.

Bachelor Pad Economics

For all the single, swinging bachelors out there, permit me a great bit of financial advice.

Clippers.

Drop the $35 on a good pair of clippers and you'll earn back your money easy within a month or two.

Now some of you will complain that you are not barbers, let alone self-styling ones, and therefore you will not be able to cut your own hair.

That is why you hence forth resign yourself to the buzz cut.

No doubt some of you will earn back your clippers in just one shaving in that you drop $35 on a hair cut. Others it will take 3 or 4 shaves if you go to a Great Clips to earn your clippers. Regardless, by a year's time going by, you'll certainly earn more than you did your 401k.

I have also found it a great way to get pampered by women who want to cut your hair.

Don't ask me how it works, I've learned long ago to stop asking why.

Ah, Baby Rabies

A movie I shall not see.

Ready the Vomit Bags

I promise that I will remain a male, defend my loved ones with my life, destroy enemies that threaten my loved ones, be charming and charismatic towards you, support myself, and work out and stay in shape. And if that ain't good enough for you, then I'm sure one of those lovely men above are available for courtship.

In the meantime, here's an alternative.



Now, on a serious note, ladies, who would you rather date? The guys above of the guy below? Make your responses in the comments section, and I shall make a chart.

HAR!

HAR!!

Your Dizzy Fix

You will enjoy the recession;

Not a post

Link 1
Link2
LInk 3

Nice Charts

Something tells me "hope and change and flowers and chocolates" and in general wishful thinking and good thoughts is not going to solve this problem.

Ah, California

I love it.

Not a Post

For those of you who still tune in, these occasional "not a posts" are links to a podcast of one of my favorite shows, Garage Logic. The only problem is they only offer the previous day's broadcast, thus I need to post the link, but tweak the date to get previous days' broadcasts.

Link1
Link2

Housing Starts

Your economic chart of the day!




I love housing starts. Go buy my book!