Drive By Posting

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

This One's for Paulette

Here's the e-mail

captcapitalism@yahoo.com

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

Ruining My Image of Southern Belles

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

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

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

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

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

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

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



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

Join Captain Capitalism on the Dave Thompson Show!

Hey all!

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

You can listen on AM 1500 KSTP, but if you're outside the Twin Cities area, fear not, you can listen online at www.am1500.com

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

The Death of Health Packs

Sometimes you have to spend money to save money.

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

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

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

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

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

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

Well what the hell happened health packs????

I LIKED the health packs!

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

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

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

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

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

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

I Actually Feel Sorry for Bush

http://www.breitbart.com/news/2007/03/09/D8NOPDJO1.html

I see hypocrisy three.

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

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

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

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

"Anything to Rationalize Socialism."

The symptoms are simple;

They want wealth to be redistributed.

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

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

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

The Banks Shall Pay

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

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

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

Ah the joys of having commission based compensation.

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

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

Sadly, the banks shall pay for their ignorance.

Did CO2 Precede Warming or Vice Versa?

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

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

Gluttonous Anglos

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

For once I envy the French.

Those "Evil" Corporations

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

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



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


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

Perspective as to the Cost of War

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

Proposed Military Cutbacks by the Democrats

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

Say It Ain't So, Prodigal Joe!

Howdy all,

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

Alas, I am a victim of the free market.

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

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

Hope You Can Sleep Well at Night

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

They've Been There

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

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

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

Debt Service to Income

The theory was that lower interest rates (short term and long term) should allow us to purchase more house, more car and more, well, anything because we are able to afford the lower interest payments and therefore take out a larger loan allowing us to buy larger things.

And this is true. You are able to buy a nicer house or a fancier car with lower interest rates.

However, when these loanable dollars all flooded the housing market it drove housing prices rather high which meant you still pretty much got the same bang for your buck as you did before. It's kind of like when Wall Street pays its bonuses everything in New York gets more expensive so you really don't have that much of an increase in purchasing power.

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

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

Yes, a recession is certainly possible.

Time to Make with the Smooching!

So I was going to post a chart showing various countries' mortgages as a percent of disposable income.

But with today's weather, we're expecting about 18 inches of snow;

Which means only one thing;

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

Hopeless Cause

I largely view the majority of charity as a waste of money.

Of the bevy of various charitable programs since the Marshall Program, have any actually brought about a resolution to the problem they were intended to resolve? Of course not. Because charity is more about making people feel better about themselves than it is to legitimately and PRAGMATICALLY (ooooh! There's a word leftists hate) improve the lot of those less fortunate. And in a sick and twisted way, charity more often than not results in the very-well off worsening the lot of the very-poorly off solely for to make the very-well off feel good about themselves. It's sick.

I just pray the Gates Foundation with it's "means-testing" approaching might actually do some good in the world and fundamentally change how charity works.

Regardless, I found this chart to be interesting. People call it charity. Until I see charity actually improve the lot of the intended recipients, I'll call it naivete.

Ireland is Now Richer Than the US

I knew this day would come. The day Ireland would surpass the US in income per capita. Even though Ireland has a higher overall tax rate than the US as a percent of GDP (35% vs. 29%), its low corporate taxes would inevitably carry it through (12.5% vs. 40%).

However, I did notice that Norway was higher than the US as well, which enters us into whether or not we're comparing apples to apples on this very important statistics. The data comes from the CIA's World Factbook which claims it adjusts for PPP. But I've seen differing figures before from the World Bank, the OECD, the CIA, none of them seem to reconcile.

Whichever the case, the trend is the most important thing. And no more than 5 years ago it was very clear that Ireland was below the US in terms of standards of living. Now it seems they're neck and neck at the Galway races.