I wrote about Toxic Wives in the past, but referred to it as "Trophy Wife Economics."
Freaking hilarious to see not just the greedy scum bag business"men" who couldn't make a dime in profit, but to see their gold-digging wives actually having to face the prospects of finding (dun dun dunnnnnn)
A JOB!
NOOOO!!!!!!
Lesson to be learned;
Always lease a depreciating asset. Never buy.
Saturday, November 29, 2008
Wednesday, November 26, 2008
X-Box Sucks
If you are not a game aficionado, that's alright. All you have to do to be one is repeat after me;
X-Box sucks.
See, now you know pretty much what every other gaming aficionado knows.
Long story short, if you are thinking about buying X-Box for your kids or for that matter any Microsoft product, forget it. The problems are not worth it. The thing overheats, the thing freezes up and then when you get it repaired, THRICE, and call up Microsoft again, "Oh, well it's no longer under warranty so that will cost you $99.00."
So, let me save all of you economists out there a little bit of your finite lives.
It's not worth the time, let alone the money you will have to spend constantly resuscitating your X-Box 360. It's not worth the time having to mail the thing into Microsoft, let alone the hours you're going to spend on the customer service line. Just do yourself a big fat favor and get a Playstation or a Nintendo.
So if that helps anybody make their decision for what to get for Christmas, god bless 'em.
In the meantime I'm getting myself a Mac from hence forth and never a PC.
Oh, and to Sarah, the Microsoft customer "support" person, be happy in knowing I've cost Microsoft way more than the $99 you wanted to charge me to repair something that should have been working properly in the first place.
Enjoy being in a distant 3rd place when the next gaming console generation comes out.
X-Box sucks.
See, now you know pretty much what every other gaming aficionado knows.
Long story short, if you are thinking about buying X-Box for your kids or for that matter any Microsoft product, forget it. The problems are not worth it. The thing overheats, the thing freezes up and then when you get it repaired, THRICE, and call up Microsoft again, "Oh, well it's no longer under warranty so that will cost you $99.00."
So, let me save all of you economists out there a little bit of your finite lives.
It's not worth the time, let alone the money you will have to spend constantly resuscitating your X-Box 360. It's not worth the time having to mail the thing into Microsoft, let alone the hours you're going to spend on the customer service line. Just do yourself a big fat favor and get a Playstation or a Nintendo.
So if that helps anybody make their decision for what to get for Christmas, god bless 'em.
In the meantime I'm getting myself a Mac from hence forth and never a PC.
Oh, and to Sarah, the Microsoft customer "support" person, be happy in knowing I've cost Microsoft way more than the $99 you wanted to charge me to repair something that should have been working properly in the first place.
Enjoy being in a distant 3rd place when the next gaming console generation comes out.
Tuesday, November 25, 2008
And These People Have the Right to Vote
I'm angered that my vote is somehow canceled by theirs.
ht to Kate again (she's got some good stuff!)
A Distubing Trend
I know, I know. We're not socialist.
I know, I know. The democrats are not for socialism.
And I know, I know, the republicans cannot gear up the gall to call them that.
But if you look at government spending as a percent of the economy, you'll realize that (bar times of war) the overall trend in government spending has been to go up.
The problem is this chart only shows FEDERAL government spending and does not include state and local spending as well. If these are considered, overall government spending is at about 37%.
So the question I post to all you aspiring, junior, deputy, official and otherwise economists out there is, fine, we may not be socialist now, but if the democrats and Obama were to have their way (which they will) will you admit we WILL be a socialist nation?
This debate rages between me and my Obama supporting friends. That I am a "fool" a "moron" to suggest we're going to become a "socialist" nation. You fool, you do not know of what you speak. To which I respond "yes, the one economist in the group does not know what he's talking about. Oh sure, the sax player and the admin assistant and the lifetime student in journalism, they know what they're talking about when it comes to taxes and fiscal policy, but I am the moron of the group when it comes to these things." But that doesn't change the fact at what point, what level of government spending is a country deemed a socialist nation?
It's an important question to ask because if the republicans are "going to get tough" like they say they are, are they going to gear up the gall to call the democrats what they technically and economically would be considered; socialists?
This would be a brilliant PR campaign. They wouldn't be lying. They would be calling the democrats what they are. And (for once) they could make a clear, distinguishable difference between them and the democrats (not to mention a track record that will be against everything Obama does from hence forth and will come in handy come 2012).
Of course, relying of the current strategerists in the republican party to realize and recommend this would be like them fielding a candidate like Reagan again. But one can hope.
I know, I know. The democrats are not for socialism.
And I know, I know, the republicans cannot gear up the gall to call them that.
But if you look at government spending as a percent of the economy, you'll realize that (bar times of war) the overall trend in government spending has been to go up.
The problem is this chart only shows FEDERAL government spending and does not include state and local spending as well. If these are considered, overall government spending is at about 37%.
So the question I post to all you aspiring, junior, deputy, official and otherwise economists out there is, fine, we may not be socialist now, but if the democrats and Obama were to have their way (which they will) will you admit we WILL be a socialist nation?
This debate rages between me and my Obama supporting friends. That I am a "fool" a "moron" to suggest we're going to become a "socialist" nation. You fool, you do not know of what you speak. To which I respond "yes, the one economist in the group does not know what he's talking about. Oh sure, the sax player and the admin assistant and the lifetime student in journalism, they know what they're talking about when it comes to taxes and fiscal policy, but I am the moron of the group when it comes to these things." But that doesn't change the fact at what point, what level of government spending is a country deemed a socialist nation?
It's an important question to ask because if the republicans are "going to get tough" like they say they are, are they going to gear up the gall to call the democrats what they technically and economically would be considered; socialists?
This would be a brilliant PR campaign. They wouldn't be lying. They would be calling the democrats what they are. And (for once) they could make a clear, distinguishable difference between them and the democrats (not to mention a track record that will be against everything Obama does from hence forth and will come in handy come 2012).
Of course, relying of the current strategerists in the republican party to realize and recommend this would be like them fielding a candidate like Reagan again. But one can hope.
Monday, November 24, 2008
How the Current Account Deficit Explains What's at the Core of the Current Financial Crisis
I like to make things simple. And the reason I like to make things simple is not because I'm trying to dumb them down or provide a simplistic explanation of things, but ultimately when boiled down, things really are that simple. And this current financial crisis is no different.
Talk about mortgage brokers, SWAPs, bailouts all you want, what is ultimately driving this crisis is the fact that Americans are not producing enough to warrant the prices of our assets. Housing, stocks, you name it, all derive their value from the profits or income that can be produced from them. And if there is no profits or income, then there is no value in those assets.
For example, housing. Housing rose to unrealistic heights based on temporary and flighty demand as sub prime slime who could not afford those houses long term, flooded the market only to go bankrupt 3 years later. The problem is rents, the thing that ultimately gives property its value, did not go up. This is why a bubble formed and you are now experiencing dropping property prices. The markets finally realized that housing cannot "always go up" unless there is a corresponding increase in the rents, which never happened, ergo why Case Shiller is showing plummeting housing prices.
Stocks are another perfect example. The stock market, for decades, has been flooded by basically Baby Boomer and Gen X retirement money based on the principle that we should religiously and always invest in the stock market for our retirement. The problem is we are no longer investing in the stock market for the profits the firms generate, but rather because we were told by the government to use them as a retirement vehicle. Now, as corporations report horrendous corporate earnings, not to mention practically all of the financial services industry is filing for bankruptcy or a taxpayer bailout, the market is realizing that the ultimate driver of value of stocks (PROFITS) are non-existent, and ergo, why should those stocks have any value.
The problem, however, is that while the stock market and housing market are certainly very important to the economy, it does not address the overall economy. ie-the American people. How much "wealth" or "production" do we produce as an economy. And not only how much do we produce, but how much do we spend. ie- are we net producers or are we net parasites?
Take a guess which one we are.
The metric by which this is measured is the current account balance. It shows, simply, how much more or less do we produce versus consume. It basically looks at the national accounts, measures how much we made, and then how much we spent. And for the past 20 years, we have been spending more than we made.
Going from just a 0% of GDP balance in 1991, we have persistently and continually spent more than we made in this country, more recently spending 5% more each year than we made.
Now, I know that it is blasphemy to criticize or critique the Neo-American past-time of spending more than we make. That it is a crime punishable by death to suggest people be responsible and live within their means. But that still doesn't change the fact that Americans have essentially been becoming progressively "economically lazier" as time has gone on. We work less, spend more, and don't give a damn about how to pay for it, let alone ever have the intention to pay for it.
It is this that is causing asset prices all over the place to collapse. Stocks, housing, the dollar, as nobody, Americans or foreigners, are willing to invest their money in assets that are ultimately reliant upon Americans to churn profits out of them. We're too busy watching American Idol. We're too busy campaigning for Barack Obama. We're too busy majoring in sociology to hopefully become a "community organizer." None of which produce one ounce of GDP, income, or profits.
Meanwhile, I suggest you take a look and see what the Chinese, Arabs and Russians are majoring in, in college. And then take a look at their current account balances.
Talk about mortgage brokers, SWAPs, bailouts all you want, what is ultimately driving this crisis is the fact that Americans are not producing enough to warrant the prices of our assets. Housing, stocks, you name it, all derive their value from the profits or income that can be produced from them. And if there is no profits or income, then there is no value in those assets.
For example, housing. Housing rose to unrealistic heights based on temporary and flighty demand as sub prime slime who could not afford those houses long term, flooded the market only to go bankrupt 3 years later. The problem is rents, the thing that ultimately gives property its value, did not go up. This is why a bubble formed and you are now experiencing dropping property prices. The markets finally realized that housing cannot "always go up" unless there is a corresponding increase in the rents, which never happened, ergo why Case Shiller is showing plummeting housing prices.
Stocks are another perfect example. The stock market, for decades, has been flooded by basically Baby Boomer and Gen X retirement money based on the principle that we should religiously and always invest in the stock market for our retirement. The problem is we are no longer investing in the stock market for the profits the firms generate, but rather because we were told by the government to use them as a retirement vehicle. Now, as corporations report horrendous corporate earnings, not to mention practically all of the financial services industry is filing for bankruptcy or a taxpayer bailout, the market is realizing that the ultimate driver of value of stocks (PROFITS) are non-existent, and ergo, why should those stocks have any value.
The problem, however, is that while the stock market and housing market are certainly very important to the economy, it does not address the overall economy. ie-the American people. How much "wealth" or "production" do we produce as an economy. And not only how much do we produce, but how much do we spend. ie- are we net producers or are we net parasites?
Take a guess which one we are.
The metric by which this is measured is the current account balance. It shows, simply, how much more or less do we produce versus consume. It basically looks at the national accounts, measures how much we made, and then how much we spent. And for the past 20 years, we have been spending more than we made.
Going from just a 0% of GDP balance in 1991, we have persistently and continually spent more than we made in this country, more recently spending 5% more each year than we made.
Now, I know that it is blasphemy to criticize or critique the Neo-American past-time of spending more than we make. That it is a crime punishable by death to suggest people be responsible and live within their means. But that still doesn't change the fact that Americans have essentially been becoming progressively "economically lazier" as time has gone on. We work less, spend more, and don't give a damn about how to pay for it, let alone ever have the intention to pay for it.
It is this that is causing asset prices all over the place to collapse. Stocks, housing, the dollar, as nobody, Americans or foreigners, are willing to invest their money in assets that are ultimately reliant upon Americans to churn profits out of them. We're too busy watching American Idol. We're too busy campaigning for Barack Obama. We're too busy majoring in sociology to hopefully become a "community organizer." None of which produce one ounce of GDP, income, or profits.
Meanwhile, I suggest you take a look and see what the Chinese, Arabs and Russians are majoring in, in college. And then take a look at their current account balances.
Sunday, November 23, 2008
Hours Worked Per Year
The Baby Boomer phenomenon is not just a US creation. Most western nations have a Baby Boomer generation and thusly are faced with the same legacy issues in terms of social pensions (social security) and health care (medicare).
What's scary though is that instead of working more to pay for what is guaranteed to be 7 years of financial famine, the western world seems to be working less.
Additional nots is that Korea is doing quite well, though still declining and the world's "best" country according to the UN and other self-back-patters, Norway, works the least of us all (then again they do have oil).
What's scary though is that instead of working more to pay for what is guaranteed to be 7 years of financial famine, the western world seems to be working less.
Additional nots is that Korea is doing quite well, though still declining and the world's "best" country according to the UN and other self-back-patters, Norway, works the least of us all (then again they do have oil).
Saturday, November 22, 2008
Arianna Huffington Post
I'm going to explain this to you all so you understand.
Posers like Arianna Huffington have to rely on people aside from themselves to make themselves relevant.
Arianna, if memory serves me correctly, was married to a REPUBLICAN politician and then upon divorce all of the sudden decided to become a raging liberal. Was this because she genuinely believed in socialism?
No, of course not.
It was merely expedient and self-serving to her. She could find a career in socialism even though she genuinely may not have believed in it.
Just like Hillary Clinton, former college Republican, didn't believe in socialism either.
Her husband cheats on her, and unlike her intellectually honest feminist brethren, she sticks with the infidel none the less for political purposes even though deep down in side I'm willing to bet she damn well knows capitalism is the only way to go. Ergo, this the point I'm trying to make; these people are posers.
You must understand that not only do these people have no substance on their own, but therefore must parasite off of others. Their primary motivation is nothing as noble as "informing the people" or "advancing the rights of women" as much as it is "putting money in Arianna's/Hillary's pocket book" under the guise of "women's rights" or "social justice." And in this regard I truly pity their followers.
Did you really believe all the BS on the Huffington Post? Did you believe the founder had some kind of intellectual, ideological strain in common with you?
You fools!
You're just as dupable as Republicans who believed Bush would be a conservative.
You have to understand the Arianna Huffington is basically an old hag version of Paris Hilton.
No intelligence.
No ability.
No substance.
But, boy does she like other people's money...because...well...she certainly can't make any of her own.
She is a fraud and a fake.
And, as free markets are prone to do, they have proven it.
She now has to rely upon charity and handouts because she is not genuine, she is not real, she is a charlatan. She has to rely upon handouts, just like the scum bag wall street investment banker brigade has to rely upon tax dollars to bail her out.
Now I don't expect things like free markets and competition to permeate the minds of leftists any time soon. Nor could I ever hope to dream of leftists seeing the merits and benefits of such ideals.
All I'm pointing out is that your "queen bee" needs a subsidy because she couldn't cut it on her own. And maybe, just maybe, politics aside, you might want to consider why that is.
Posers like Arianna Huffington have to rely on people aside from themselves to make themselves relevant.
Arianna, if memory serves me correctly, was married to a REPUBLICAN politician and then upon divorce all of the sudden decided to become a raging liberal. Was this because she genuinely believed in socialism?
No, of course not.
It was merely expedient and self-serving to her. She could find a career in socialism even though she genuinely may not have believed in it.
Just like Hillary Clinton, former college Republican, didn't believe in socialism either.
Her husband cheats on her, and unlike her intellectually honest feminist brethren, she sticks with the infidel none the less for political purposes even though deep down in side I'm willing to bet she damn well knows capitalism is the only way to go. Ergo, this the point I'm trying to make; these people are posers.
You must understand that not only do these people have no substance on their own, but therefore must parasite off of others. Their primary motivation is nothing as noble as "informing the people" or "advancing the rights of women" as much as it is "putting money in Arianna's/Hillary's pocket book" under the guise of "women's rights" or "social justice." And in this regard I truly pity their followers.
Did you really believe all the BS on the Huffington Post? Did you believe the founder had some kind of intellectual, ideological strain in common with you?
You fools!
You're just as dupable as Republicans who believed Bush would be a conservative.
You have to understand the Arianna Huffington is basically an old hag version of Paris Hilton.
No intelligence.
No ability.
No substance.
But, boy does she like other people's money...because...well...she certainly can't make any of her own.
She is a fraud and a fake.
And, as free markets are prone to do, they have proven it.
She now has to rely upon charity and handouts because she is not genuine, she is not real, she is a charlatan. She has to rely upon handouts, just like the scum bag wall street investment banker brigade has to rely upon tax dollars to bail her out.
Now I don't expect things like free markets and competition to permeate the minds of leftists any time soon. Nor could I ever hope to dream of leftists seeing the merits and benefits of such ideals.
All I'm pointing out is that your "queen bee" needs a subsidy because she couldn't cut it on her own. And maybe, just maybe, politics aside, you might want to consider why that is.
Friday, November 21, 2008
Christmas Shopping Advice from The Captain
Christmas shopping season is upon us and as this is where most of us will not only spend the most amount of money in the year, but also receive the most amount in gifts, I thought it would be wise to give all of you in a public service sort of way some economic pointers to help maximize your utility when it comes to your Christmas shopping.
1. SHOP NOW! This is the last weekend before Black Friday. If you wait until the day after Thanksgiving, you are guaranteed to spend more than 3 times the amount in lines, traffic, not to mention increase your risk of a heart attack by 58%. If you go this weekend you will be able to walk in the malls, void of slow old people blocking your way or little children you constantly have to avoid tripping over or SUV driving soccer moms who decide to stop in the middle of intersections as they consult their maps/Tom Toms and then SLOOOOOOWLY turn out of that intersection. It would even be in your economic interests to take a day off from work to get your Christmas shopping done.
2. Given the economic crisis occurring and the practical guarantee we're going to go into recession, think about sentimental gifts made with your very own hands. For example, men, a poem is a incredibly rare (and incredibly cheap) gift to give to your beloved. Even your cold hearted, evil meanie captain wrote poetry in his youth. Regardless, the point is a poem goes much further than flowers, chocolates or other consumables and will give your beloved timeless warm fuzzies. Ladies, you too can partake in the frugal Christmas by giving your beloved, ahem, "gift" certificates. Gift certificates to things like being served a martini by a girl in a French maid outfit. Or perhaps being served a cigar...in a French maid outfit. Heck, basically just walk around in a French maid outfit and you can barely fail.
3. Parents, LISTEN TO ME! When I am king I will make it a crime, punishable by death if you buy your children clothes for Christmas. I don't know how many billions of dollars are wasted, every Christmas when parents buy their poor kids a sweater, a shirt or something no kid in the history of Christmas ever wanted. You see, as a parent your responsibility is to clothe your kid anyway. So don't cop out on this and use Christmas as an excuse to do what you are legally obliged to do. Christmas is for Kids. And kids want toys. Now keep in mind you don't have to buy a LOT of toys. Buying just one big one is enough (like a Wii...boy a Wii sure would be great! Even adults like Wii's! Especially video game playing economists! Yep, they SUUUUUURE love Wii's!). In buying one big gift you not only probably save money over buying them multiple little ones, but also save yourself time. You can also knock out multiple kids in one shot, video game consoles are great for this as you buy one for your children, not one specific kid.
4. Cash is king. Let me point out something about older folk and how they are wise. When you get older and become a grandparent, why do you think they give the kids money? Because it never fails. See, wisdom comes with age and older folk know that instead of having to shop in the first place, just go to the bank, get a $20 or a $10, put it in an envelop and by golly, you are guaranteed to make the kid happy. I remember having my radio show and I put the question out there, what do think kids prefer to get; cash or a random gift. I bet my producer it would be cash. Sure enough we had this sweet little 5 year old girl call in (her dad called in, but put her on the phone because she had an opinion and wanted to share it) and sure as all get out she preferred cash. Cash is a beautiful gift in that it not only saves you time, but it is the most efficient gift in that 100% of it goes to what the person wants. So if you don't know what the person wants, don't spend hours trying to figure it out, you don't have time for that. Give them the gift of cash (or a gift card if you want to get all "sentimental.")
5. Jewelry. Oh yes, you didn't see that one coming did you, men? How could our Captain, our cold hearted, indifferent about women, Captain suggest such a thing? What did we do to deserve this? Well hold on there now, there's rhyme and reason. First, jewelry functionally is worthless. But if you yourself have a very capitalistic wife, she will understand that part of any well-balanced portfolio is a little bit of exposure to commodities or precious metals. Now you can't give a barrel of oil as a gift, but you can buy gold or platinum in the form of jewelry. If you have a particularly understanding wife, she will agree that the jewelry is there first and foremost as a hedge against economic collapse and should the economy collapse, the jewelry must be hocked and melted down. You don't have to buy a lot, you don't have to buy anything fancy, but instead of investing in boring ol' commodities through your brokerage, why not have it beautifully adorned on your beautiful wife's face, all the while knowing, "Yeah, I'm insured against economic Armageddon."
6. And finally, what says I love more than a book about the housing crash? Sure you could get your beloved jewelry or diamonds. Sure you could get your father a tie. And sure, you could get your little ones toys. But will their lives really be complete without knowing fully what happened to the housing and financial markets? Do you think the kids will REALLY enjoy playing Wii when in the back of their minds at night they ask themselves "how did house price to rents ratios get so high?" And while your wife will be reading the poem you wrote her as you adorn her with the new necklace you bought her, can you both really enjoy the moment as deep down inside both of you are yearning to understand the relationship between monthly housing starts and unemployment? Make your Christmas complete (and avoid lines). Order "Behind the Housing Crash."
1. SHOP NOW! This is the last weekend before Black Friday. If you wait until the day after Thanksgiving, you are guaranteed to spend more than 3 times the amount in lines, traffic, not to mention increase your risk of a heart attack by 58%. If you go this weekend you will be able to walk in the malls, void of slow old people blocking your way or little children you constantly have to avoid tripping over or SUV driving soccer moms who decide to stop in the middle of intersections as they consult their maps/Tom Toms and then SLOOOOOOWLY turn out of that intersection. It would even be in your economic interests to take a day off from work to get your Christmas shopping done.
2. Given the economic crisis occurring and the practical guarantee we're going to go into recession, think about sentimental gifts made with your very own hands. For example, men, a poem is a incredibly rare (and incredibly cheap) gift to give to your beloved. Even your cold hearted, evil meanie captain wrote poetry in his youth. Regardless, the point is a poem goes much further than flowers, chocolates or other consumables and will give your beloved timeless warm fuzzies. Ladies, you too can partake in the frugal Christmas by giving your beloved, ahem, "gift" certificates. Gift certificates to things like being served a martini by a girl in a French maid outfit. Or perhaps being served a cigar...in a French maid outfit. Heck, basically just walk around in a French maid outfit and you can barely fail.
3. Parents, LISTEN TO ME! When I am king I will make it a crime, punishable by death if you buy your children clothes for Christmas. I don't know how many billions of dollars are wasted, every Christmas when parents buy their poor kids a sweater, a shirt or something no kid in the history of Christmas ever wanted. You see, as a parent your responsibility is to clothe your kid anyway. So don't cop out on this and use Christmas as an excuse to do what you are legally obliged to do. Christmas is for Kids. And kids want toys. Now keep in mind you don't have to buy a LOT of toys. Buying just one big one is enough (like a Wii...boy a Wii sure would be great! Even adults like Wii's! Especially video game playing economists! Yep, they SUUUUUURE love Wii's!). In buying one big gift you not only probably save money over buying them multiple little ones, but also save yourself time. You can also knock out multiple kids in one shot, video game consoles are great for this as you buy one for your children, not one specific kid.
4. Cash is king. Let me point out something about older folk and how they are wise. When you get older and become a grandparent, why do you think they give the kids money? Because it never fails. See, wisdom comes with age and older folk know that instead of having to shop in the first place, just go to the bank, get a $20 or a $10, put it in an envelop and by golly, you are guaranteed to make the kid happy. I remember having my radio show and I put the question out there, what do think kids prefer to get; cash or a random gift. I bet my producer it would be cash. Sure enough we had this sweet little 5 year old girl call in (her dad called in, but put her on the phone because she had an opinion and wanted to share it) and sure as all get out she preferred cash. Cash is a beautiful gift in that it not only saves you time, but it is the most efficient gift in that 100% of it goes to what the person wants. So if you don't know what the person wants, don't spend hours trying to figure it out, you don't have time for that. Give them the gift of cash (or a gift card if you want to get all "sentimental.")
5. Jewelry. Oh yes, you didn't see that one coming did you, men? How could our Captain, our cold hearted, indifferent about women, Captain suggest such a thing? What did we do to deserve this? Well hold on there now, there's rhyme and reason. First, jewelry functionally is worthless. But if you yourself have a very capitalistic wife, she will understand that part of any well-balanced portfolio is a little bit of exposure to commodities or precious metals. Now you can't give a barrel of oil as a gift, but you can buy gold or platinum in the form of jewelry. If you have a particularly understanding wife, she will agree that the jewelry is there first and foremost as a hedge against economic collapse and should the economy collapse, the jewelry must be hocked and melted down. You don't have to buy a lot, you don't have to buy anything fancy, but instead of investing in boring ol' commodities through your brokerage, why not have it beautifully adorned on your beautiful wife's face, all the while knowing, "Yeah, I'm insured against economic Armageddon."
6. And finally, what says I love more than a book about the housing crash? Sure you could get your beloved jewelry or diamonds. Sure you could get your father a tie. And sure, you could get your little ones toys. But will their lives really be complete without knowing fully what happened to the housing and financial markets? Do you think the kids will REALLY enjoy playing Wii when in the back of their minds at night they ask themselves "how did house price to rents ratios get so high?" And while your wife will be reading the poem you wrote her as you adorn her with the new necklace you bought her, can you both really enjoy the moment as deep down inside both of you are yearning to understand the relationship between monthly housing starts and unemployment? Make your Christmas complete (and avoid lines). Order "Behind the Housing Crash."
Thursday, November 20, 2008
Horses are Evil
What did I tell you about horses???!!!!
There is something there, I'm telling ya. Don't know what it is, but I damn well know now to steer clear of women with horses.
There is something there, I'm telling ya. Don't know what it is, but I damn well know now to steer clear of women with horses.
The "Depression" Index
A thing the media likes to do is measure the occurrence of one word or another to see if it's likely to come true. The most common example of this is the "Recession Index" where the word recession tends to predict actual recessions. However, what is interesting is "depression" is being cited more in the media ("media" consisting of The New York Times, the WSJ and the London Times) than even during the Great Depression.
This is just one of what is now an increasing number of charts showing various things out of whack MORE than they were right before the Great Depression.
P/E Ratios.
Total debt.
Housing prices to rents, etc.
All currently at higher levels (or at least before the stock and housing markets started to tank anyway) than what they were before the Great Depression.
To this day what I cannot understand is with these figures how it took Wall Street, economists and various other finance professionals to take until 200-freaking-8 to predict a recession. I was almost angry that the economy didn't go into a recession in the first half of 2008, let alone 2007 which is when I was predicting the economy would (arguably as early as 2006, but I'd have to check my posts).
Regardless, nobody listens to poor Cappy. And only if Wall Street did, would they, along with the rest of America be avoiding this current financial crisis.
This is just one of what is now an increasing number of charts showing various things out of whack MORE than they were right before the Great Depression.
P/E Ratios.
Total debt.
Housing prices to rents, etc.
All currently at higher levels (or at least before the stock and housing markets started to tank anyway) than what they were before the Great Depression.
To this day what I cannot understand is with these figures how it took Wall Street, economists and various other finance professionals to take until 200-freaking-8 to predict a recession. I was almost angry that the economy didn't go into a recession in the first half of 2008, let alone 2007 which is when I was predicting the economy would (arguably as early as 2006, but I'd have to check my posts).
Regardless, nobody listens to poor Cappy. And only if Wall Street did, would they, along with the rest of America be avoiding this current financial crisis.
Wednesday, November 19, 2008
Lamest... Christmas... Present.... Ever
Ug.
The people who actually buy this thing and give it to somebody as a gift are those people who hand out fruit and apples to kids on Halloween.
I can only see buying this as a means to insult a liberal friend and make them eat their own medicine.
In the meantime, do your children, friends and family a favor and don't buy them that "green card."
Buy them this instead.
(Because what kid doesn't love a book on economics?)
The people who actually buy this thing and give it to somebody as a gift are those people who hand out fruit and apples to kids on Halloween.
I can only see buying this as a means to insult a liberal friend and make them eat their own medicine.
In the meantime, do your children, friends and family a favor and don't buy them that "green card."
Buy them this instead.
(Because what kid doesn't love a book on economics?)
How Horses are to Blame for the Housing Crash
In my days in banking if there was one thing that went hand in hand with rich men applying for loans, it was horses.
If you had a shady real estate developer, there was a horse.
If you had some rich doctor or lawyer, there was a horse.
If you had some trust fund baby now slowing watching his parent's fortune erode, there was a horse.
And the reason there was a horse was not because they came riding into town on one, or were racing them, but their wives, without fail bought them.
This manifested itself on the personal financial documents of the people applying for loans. Typically what you'd see was a rich man making all the money (or at least borrowing all the money) and the wife, who was literally doing nothing, running some token business on some money her husband gave her to keep her out of his hair (I affectionately referred to this as "KHOMA" money - Keep Her Off My Ass - in m book). So what you'd see is the husband listing an AGI (adjusted gross income) of say $560,000 and the wife showing a perpetual loss on "Frieda's Farms" or "Heather's Horses" or some such dumb name on their schedule C.
Now while for the most part, if the husband was bringing in a decent amount of cash, I could see it definitely being worth dropping a couple grand on some horses to keep the wife out of his hair so he could effectively run the real business while she lost a grand or two on her horse hobby and play "Make Believe Businessman." But what was scary was just how many times I saw the horses (combined with other consumer spending on the part of the wife) that actually crippled and threatened the man's financial solvency.
One guy was an overweight guy and without a doubt had essentially bought his wife because he was too physically unattractive to find one. Naturally the wife, along with children, would rack up credit card bills that would wipe out what he earned, almost penny for penny. And of course
the single largest expenditure was her "horse business." So when he came in for a loan for his wife's "horse" business I was curious and started asking questions;
"So does she breed the horses?"
"Uh no."
"So she races them then?"
"Uh no."
"So she uses them to teach riding?"
"Uh no."
"Well, what does she do with them?"
"Well, she rides them and maintains them."
Meanwhile he wanted us to lend against this never-profitable operation.
Another hilarious instance was when one guy actually wanted to use his wife's horses as collateral. That if he defaulted on his business loan, then we could go and repossess the horses and sell them to recoup the money.
Well "yip yip yip yip yahoo."
Just what banks and bankers wanted to do.
Repossess on a "horse," feed it, store it, and then try to sell it.
What is sad though is that because horses were so prevalent when it came to dealing with the upper classes, they inevitably became collateral for more real estate deals than most people realize. Through the personal guarantee of the borrower, sometimes they would put up "All Business Assets" as collateral for the loan. And not just all business assets, but all personal assets as well. And though horses were never intended to be the primary form of collateral, invariably they did boost personal financial statements enough to make it look like the borrowers were solvent enough to guarantee the loan.
Alas, big dumb animals were tangentially backing up various real estate and other business deals.
Ultimately what I found is that horses are more or less a tell tale sign you're dealing with a "Bon Fire of the Vanities" type couple. The wife typically cares more about the horses than her husband. The husband is feverishly working to support his wife's spending habits and keep her loyal to him. And both are so vain about their appearances that every bit of asset and property is borrowed against and leveraged to the hilt.
But what gets me about the horses is "why horses?"
What is the freaking pull?
I suppose I could be asking the same question on any kind of frivolous consumer spending such as;
"Why shoes?"
"Why purses?"
"Why a boat you'll never use?"
But there is something about horses and trophy wives that I can't put my finger on, but I know is there.
Alas, perhaps the aspiring, junior, deputy, official or otherwise economists can tender some theories.
If you had a shady real estate developer, there was a horse.
If you had some rich doctor or lawyer, there was a horse.
If you had some trust fund baby now slowing watching his parent's fortune erode, there was a horse.
And the reason there was a horse was not because they came riding into town on one, or were racing them, but their wives, without fail bought them.
This manifested itself on the personal financial documents of the people applying for loans. Typically what you'd see was a rich man making all the money (or at least borrowing all the money) and the wife, who was literally doing nothing, running some token business on some money her husband gave her to keep her out of his hair (I affectionately referred to this as "KHOMA" money - Keep Her Off My Ass - in m book). So what you'd see is the husband listing an AGI (adjusted gross income) of say $560,000 and the wife showing a perpetual loss on "Frieda's Farms" or "Heather's Horses" or some such dumb name on their schedule C.
Now while for the most part, if the husband was bringing in a decent amount of cash, I could see it definitely being worth dropping a couple grand on some horses to keep the wife out of his hair so he could effectively run the real business while she lost a grand or two on her horse hobby and play "Make Believe Businessman." But what was scary was just how many times I saw the horses (combined with other consumer spending on the part of the wife) that actually crippled and threatened the man's financial solvency.
One guy was an overweight guy and without a doubt had essentially bought his wife because he was too physically unattractive to find one. Naturally the wife, along with children, would rack up credit card bills that would wipe out what he earned, almost penny for penny. And of course
the single largest expenditure was her "horse business." So when he came in for a loan for his wife's "horse" business I was curious and started asking questions;
"So does she breed the horses?"
"Uh no."
"So she races them then?"
"Uh no."
"So she uses them to teach riding?"
"Uh no."
"Well, what does she do with them?"
"Well, she rides them and maintains them."
Meanwhile he wanted us to lend against this never-profitable operation.
Another hilarious instance was when one guy actually wanted to use his wife's horses as collateral. That if he defaulted on his business loan, then we could go and repossess the horses and sell them to recoup the money.
Well "yip yip yip yip yahoo."
Just what banks and bankers wanted to do.
Repossess on a "horse," feed it, store it, and then try to sell it.
What is sad though is that because horses were so prevalent when it came to dealing with the upper classes, they inevitably became collateral for more real estate deals than most people realize. Through the personal guarantee of the borrower, sometimes they would put up "All Business Assets" as collateral for the loan. And not just all business assets, but all personal assets as well. And though horses were never intended to be the primary form of collateral, invariably they did boost personal financial statements enough to make it look like the borrowers were solvent enough to guarantee the loan.
Alas, big dumb animals were tangentially backing up various real estate and other business deals.
Ultimately what I found is that horses are more or less a tell tale sign you're dealing with a "Bon Fire of the Vanities" type couple. The wife typically cares more about the horses than her husband. The husband is feverishly working to support his wife's spending habits and keep her loyal to him. And both are so vain about their appearances that every bit of asset and property is borrowed against and leveraged to the hilt.
But what gets me about the horses is "why horses?"
What is the freaking pull?
I suppose I could be asking the same question on any kind of frivolous consumer spending such as;
"Why shoes?"
"Why purses?"
"Why a boat you'll never use?"
But there is something about horses and trophy wives that I can't put my finger on, but I know is there.
Alas, perhaps the aspiring, junior, deputy, official or otherwise economists can tender some theories.
Tuesday, November 18, 2008
War Deaths < Battle Deaths
I love when I get people who cite the 4,000 people who have died in the Iraq war and point to that as some kind of atrocity and that we should tuck tail and run. These are deaths in single BATTLES. Not wars;
Just providing a little needed perspective.
Just providing a little needed perspective.
I Guess I Wasn't "Off"
I woke up this morning at 1030 AM with no particular obligation.
And the reason I have no particular obligation is because I do not have children. If you don't have children you don't have obligation.
Additionally I have lived very frugally driving nothing by my 1990 Chevy and my 1996 VW. I only bought rental property to ensure I do not bear the full costs of my mortgage. I do not splurge on large ticket items, and though I do permit myself to indulge in a cigar and some finer booze, in the grand scheme of things I probably spend less money than people below the poverty line.
Ergo, my only real obligation today is to teach dance class later on tonight.
In between now and then I plan on using that time to work out, smoke a cigar, write this little post here, go running with a blue eyed babe and perhaps picking up the Captain's Bachelor Pad a bit (only on account my X-Box 360 is on the fritz, in which case I would have played some gamage for a couple hours before class).
Ergo, it's a great life. It's a wonderful life. It's a life most people wish they had. And even though the country is turning to a more socialist bent, in the grand scheme of things, I am still happy and content.
The same cannot be said for Lori Gottlieb.
Lori is a single mother, 30's I presume, and this recently-sent-to-me article confirms that I am indeed onto something and not just blowing smoke or running a self-pity run. The market for honorable, good and decent men is drying up faster than credit did during the housing/financial crash. I will say it again, as I have predicted other crashes before and then maybe someday, somebody, people will listen to the poor ole Captain, but men are exiting the market. They are leaving the game. The market is on the precipice of a crash.
This is sad as the timing of it could not be worse for women. As men have started their exodus, it is NOW (?) when they're in the 30's, perhaps with a couple kids, women start to realize that some semblance of attention has to be paid to what men want? You mean you can't just burden the guy with demands of having 4 children, the means to finance them and afford some discretionary income on top of it? You mean you just don't go to the grocery store and pick out your guy? You mean the guy also picks out you?
For Lori Gottlieb and her previous similarly-minded followers, it's kind of realizing in late 2007 that, "Wait, you mean property values don't always go up? I can't always take out money from my home equity line? You mean rents ultimately drive housing prices?" And thus the crash ensues.
However, I don't see it getting better, let alone a bottom to this particular market crash. The reason I say this is based on my past couple of posts and discussing with those of you who have participated, I see people are operating from the premise that it is presumed men want what Ms. Gottlieb wants; Marriage.
And here's where the bad news, gets worse;
The premise is false for a lot of guys.
Men are leaving the market. And this is the overall point I'm trying to make. They're gone. They're out of the club. They've left the party. The cats are out of the bag. The cows are out of the barn and making a run for the border. Elvis has LEFT the building. Which means they no longer care to get married. If they still did, the cats would still be in the bag, the cows in the barn, Elvis in the building, and the men in the market. I listed my itinerary at the top not to brag, but to show you that the alternative to a married life is not dreary, and dull, and lonely or lifeless. The bachelor life is actually quite easy in that men don't really need a fancy SUV to pick up the non-existent children. The bachelor life is affordable in that we throw in a pizza, maybe go out on happy hour to avail ourselves of some great-price apps, or perhaps we go out and treat ourselves to a fine dinner with our buds (and may I point out only have to pay for one dinner).
It is this that the Lori Gottlieb's of the world have to realize. They're not competing against other women for a dwindling supply of men. They competing against the bachelor lifestyle. They're battling the gravitational forces of a content, happy, and above all, a financial secure bachelor lifestyle. Void of divorce, void of having to support a family, void of any responsibility aside from oneself. It is an incomprehensible amount of freedom for a man to pursue and do whatever he wants, and in the literal sense allows them to be man-children (except now we have lot's of great new toys!)
Now I know those of you out there who are trying to help the good ol' Captain. I know those of you out there, and I agree with you, that there are good people out there. I know that.
However, my point is not a personal one, and certainly not one that applies to everybody. It is a generational and generalized one in that this is a trend. An economic observation that has ramifications for society at large. And all I am trying to point out is that when I see these "where is my knight in shining armor" stories, I find it necessary to point out a rapidly increasing percentage of the knights have hung up their armor and are now playing Call of Duty 4.
The question is whether the majority of love/marriage-lorn 30 something women realize that too.
And the reason I have no particular obligation is because I do not have children. If you don't have children you don't have obligation.
Additionally I have lived very frugally driving nothing by my 1990 Chevy and my 1996 VW. I only bought rental property to ensure I do not bear the full costs of my mortgage. I do not splurge on large ticket items, and though I do permit myself to indulge in a cigar and some finer booze, in the grand scheme of things I probably spend less money than people below the poverty line.
Ergo, my only real obligation today is to teach dance class later on tonight.
In between now and then I plan on using that time to work out, smoke a cigar, write this little post here, go running with a blue eyed babe and perhaps picking up the Captain's Bachelor Pad a bit (only on account my X-Box 360 is on the fritz, in which case I would have played some gamage for a couple hours before class).
Ergo, it's a great life. It's a wonderful life. It's a life most people wish they had. And even though the country is turning to a more socialist bent, in the grand scheme of things, I am still happy and content.
The same cannot be said for Lori Gottlieb.
Lori is a single mother, 30's I presume, and this recently-sent-to-me article confirms that I am indeed onto something and not just blowing smoke or running a self-pity run. The market for honorable, good and decent men is drying up faster than credit did during the housing/financial crash. I will say it again, as I have predicted other crashes before and then maybe someday, somebody, people will listen to the poor ole Captain, but men are exiting the market. They are leaving the game. The market is on the precipice of a crash.
This is sad as the timing of it could not be worse for women. As men have started their exodus, it is NOW (?) when they're in the 30's, perhaps with a couple kids, women start to realize that some semblance of attention has to be paid to what men want? You mean you can't just burden the guy with demands of having 4 children, the means to finance them and afford some discretionary income on top of it? You mean you just don't go to the grocery store and pick out your guy? You mean the guy also picks out you?
For Lori Gottlieb and her previous similarly-minded followers, it's kind of realizing in late 2007 that, "Wait, you mean property values don't always go up? I can't always take out money from my home equity line? You mean rents ultimately drive housing prices?" And thus the crash ensues.
However, I don't see it getting better, let alone a bottom to this particular market crash. The reason I say this is based on my past couple of posts and discussing with those of you who have participated, I see people are operating from the premise that it is presumed men want what Ms. Gottlieb wants; Marriage.
And here's where the bad news, gets worse;
The premise is false for a lot of guys.
Men are leaving the market. And this is the overall point I'm trying to make. They're gone. They're out of the club. They've left the party. The cats are out of the bag. The cows are out of the barn and making a run for the border. Elvis has LEFT the building. Which means they no longer care to get married. If they still did, the cats would still be in the bag, the cows in the barn, Elvis in the building, and the men in the market. I listed my itinerary at the top not to brag, but to show you that the alternative to a married life is not dreary, and dull, and lonely or lifeless. The bachelor life is actually quite easy in that men don't really need a fancy SUV to pick up the non-existent children. The bachelor life is affordable in that we throw in a pizza, maybe go out on happy hour to avail ourselves of some great-price apps, or perhaps we go out and treat ourselves to a fine dinner with our buds (and may I point out only have to pay for one dinner).
It is this that the Lori Gottlieb's of the world have to realize. They're not competing against other women for a dwindling supply of men. They competing against the bachelor lifestyle. They're battling the gravitational forces of a content, happy, and above all, a financial secure bachelor lifestyle. Void of divorce, void of having to support a family, void of any responsibility aside from oneself. It is an incomprehensible amount of freedom for a man to pursue and do whatever he wants, and in the literal sense allows them to be man-children (except now we have lot's of great new toys!)
Now I know those of you out there who are trying to help the good ol' Captain. I know those of you out there, and I agree with you, that there are good people out there. I know that.
However, my point is not a personal one, and certainly not one that applies to everybody. It is a generational and generalized one in that this is a trend. An economic observation that has ramifications for society at large. And all I am trying to point out is that when I see these "where is my knight in shining armor" stories, I find it necessary to point out a rapidly increasing percentage of the knights have hung up their armor and are now playing Call of Duty 4.
The question is whether the majority of love/marriage-lorn 30 something women realize that too.
Monday, November 17, 2008
The Economics of Conventional Courtship
There is a somewhat steaming debate occurring that I wasn't aware of, and I didn't realize that I hit that much of a nerve, but it is over more or less this idea of men (for lack of a better description) dropping out of the race or the "game" of dating. I'm not talking nerds or guys who got their first kiss when they were 30. I'm talking a trend I see of more and more "normal" guys just exiting the market and choosing not to marry let alone date.
This is just a comment I made to a poster which I wasn't intending on posting here, but after second thought, deemed it worthy of its own post.
Do realize that I do not tolerate any hatred or male-bashing. You either accept this is happening or at least is the opinion of thousands of men or not. And if you don't and start up with the victimization of sexism and misogyny BS your hours wasted on writing a response will be rejected;
...Having said that caveat, perhaps the best way to describe it is this;
The basic fundamentals, the basic laws and principles on which human attraction and courtship have been based, have been violated in that I think arguably for the first time, there is a progressively larger and larger percentage of the male population that no longer cares to pursue romantic or sexual interests. Be it because the proposition of chasing women in today's world is no longer appealing or that the alternatives of X-Box 360, cigars, cars, riches and never being poor due to too many "capitas" in "income per capita," are all that much more attractive, the basic rules of the game have changed with no real emotion or passion or desire having anything to do with it.
Men simply quit or are quitting in greater numbers. It's, again cold as this may sound, an economic decision.
The ramifications of this for conventional American courtship are quite earth shaking in that it more or less obsoletes it. If one of the sexes no longer cares to pursue the other, then the game is literally over. No more bar scene. No more marriage. No more children. No more family. No more divorce. None of it.
This is even more earth shaking when you think of the sociological/demographic ramifications. Declining birth rates is just one bit of evidence I think that eludes to this. Divorce rates would be another. But the consequences I would contend reach as far as the ultimate end of a generation/nation/culture/society as we know it. America will cease to exist in it's previous Cary Grant/John Wayne/Clint Eastwood form and turn into something we haven't seen yet nor can I fathom.
So for all the Megans and romantics out there, you have to understand, this isn't a choice, let alone anything anybody particularly likes. It's just what it is and people are responding to it. And not until the environment changes do I see a stop of the flood of men out of the market and back into traditional roles of father/husband, provider/bread winner.
The economics of it just isn't there.
This is just a comment I made to a poster which I wasn't intending on posting here, but after second thought, deemed it worthy of its own post.
Do realize that I do not tolerate any hatred or male-bashing. You either accept this is happening or at least is the opinion of thousands of men or not. And if you don't and start up with the victimization of sexism and misogyny BS your hours wasted on writing a response will be rejected;
...Having said that caveat, perhaps the best way to describe it is this;
The basic fundamentals, the basic laws and principles on which human attraction and courtship have been based, have been violated in that I think arguably for the first time, there is a progressively larger and larger percentage of the male population that no longer cares to pursue romantic or sexual interests. Be it because the proposition of chasing women in today's world is no longer appealing or that the alternatives of X-Box 360, cigars, cars, riches and never being poor due to too many "capitas" in "income per capita," are all that much more attractive, the basic rules of the game have changed with no real emotion or passion or desire having anything to do with it.
Men simply quit or are quitting in greater numbers. It's, again cold as this may sound, an economic decision.
The ramifications of this for conventional American courtship are quite earth shaking in that it more or less obsoletes it. If one of the sexes no longer cares to pursue the other, then the game is literally over. No more bar scene. No more marriage. No more children. No more family. No more divorce. None of it.
This is even more earth shaking when you think of the sociological/demographic ramifications. Declining birth rates is just one bit of evidence I think that eludes to this. Divorce rates would be another. But the consequences I would contend reach as far as the ultimate end of a generation/nation/culture/society as we know it. America will cease to exist in it's previous Cary Grant/John Wayne/Clint Eastwood form and turn into something we haven't seen yet nor can I fathom.
So for all the Megans and romantics out there, you have to understand, this isn't a choice, let alone anything anybody particularly likes. It's just what it is and people are responding to it. And not until the environment changes do I see a stop of the flood of men out of the market and back into traditional roles of father/husband, provider/bread winner.
The economics of it just isn't there.
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