Economic Lessons in Canada Abound

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

OUTSIDE OF THE US!

Yes, from scenic Thunder Bay, Ontario.

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

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

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

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

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

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

;P

Thunder Bay, Eh!?

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

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

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

The Housing Bubble Will Increase the Divorce Rate

Hee hee hee! Trouble in paradise?

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

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

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

Yeah, right, as if.

South America's Sole Adult

Alvaro Uribe

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

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

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

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

"You, check for poo."

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

To which Manny responds,

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

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

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

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

Thus, I asked myself, SINCE WHEN DO WE START BRIBING PEOPLE TO BEHAVE!!!!!?????

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

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

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

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

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

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

And then the insufferable agony of waiting until your dad came home to righteously pummel you, where that was worse than the punishment to the point you'd contemplate running away.

Not this, "well, it's time for a time out."

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

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

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

That's what I'm talking about.

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

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

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

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

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

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

Send Me Your Weak, Your Tired, Your Charts

Hi All,

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

CAPTAIN CAPITALISM'S ANNUAL CHART CONTEST!!!!

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

$15!

AND!!!!

A signed autograph of the Captain himself!

How can you NOT participate!?

E-mail your best charts to captcapitalism@yahoo.com

And I do honor my payments and prizes

Ask last year's winner, Doink!

BEST COMPLIMENT EVER!!!!

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

"You're like an evil Cary Grant."

Yes, yes I am.

Yeah, Right, "Poor"

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

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

Happy Happy Joy Joy

I would have thought Latin America would be poorly ranked.

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

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

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

The Museum of Communism

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

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

It again points out something I've always said;

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

http://www.muzeumkomunismu.cz/eng_find_us.html

How the Brits Will Stop the Housing Crash

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

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

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

Particularly the British.

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

But there are two things playing to their advantage;

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

2. (And although I don't have this confirm) the British are allowed to withdraw, tax and penalty free, a certain percent of their pension for other investments. Property in the US presumably qualifies.

This, no doubt, would be viewed by most overleveraged Americans as a good thing as this additional demand would increase the value of their homes.

My question is how many of those same Americans ignorantly blather on about the horrible evils of globalization.

The Baby Boomers' Worst Nightmare

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

The "Nifty Fifty" is a perfect example where back in the 50's and 60's if you invested in the (I think) top 50 companies in the US then "nothing could go wrong." Of course, if you invested in 1965, then you would have had to wait until Reagan started turning the economy and market around in 1983 to break even.

Such a fear, a prolonged spell of 0 or perhaps negative returns haunts the baby boomers as they're approaching and some entering retirement. Used to the roughly 12% annual returns stocks provided over the past 20 years (driven primarily by them flooding the market with their retirement dollars), if such a spell were to hit now, their entire retirement plan would fly out the window.

Thus, it was an honorable chart says I when I happened upon this little ditty a couple days ago.

Have you switched to fixed income yet?

Soon, there will be No Private Sector

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

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

Another Horrible Stock Tip from Captain Capitalism

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

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

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

The stock?

GOVX.

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

So please, whatever you do,

DO NOT INVEST IN GOVX!

PLAGUE, FAMINE AND CARROT TOP WILL ENSUE!

A POX UPON YOUR FAMILY AND GENERATIONS TO COME!

THE MACARENA WILL RETURN!

AND THE IRISH WILL DANCE TO IT!

AND THE BRITS WILL COOK

AND THE FRENCH WILL FIGHT!!!

DOGS AND CATS LIVING TOGETHER! MASS HYSTERIA!!!

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

What's Wrong with this Picture?

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

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

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

Thank the Chinese and the Arabs for Your High House Prices

What I find interesting is that, presumably, people that are much higher ranked than me, with much higher offices and fancier cars are paid the big time bookoo bucks to know more than I do.

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

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

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

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

Of course, the problem is what if China and the Arab nations get their fill of US government bonds and decide to stop loaning the US trillions of dollars? This would drive up interest rates and then put further downward pressure on our already deflating housing market.

Good thing they haven't started doing that!...Or have they?

They Took 'Ur Jobs! - The Best of Captain Capitalism

Thought this might be a funny one to repost. Sad though.

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2005/09/25/nivf25.xml&sSheet=/portal/2005/09/25/ixportaltop.html

To quote one of the commenters on this post "THEY TOOK 'UR JOBS!"

Happy St. Patrick's Day!!!

To the best Economists in the world!

THE IRISH!

Didn't Get to This

Wanted to talk about this on The Dave Thompson Show last week, but we didn't have time. Won't be back on the air for a while, but wanted to mention it because it is pretty freaking sweet.

http://www.news.com.au/story/0,10117,21363226-2,00.html?from=public_rss

Also here;

http://en.wikipedia.org/wiki/Shadow_Wolves

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