alaskaeagle

And Bernanke Didn't Think Unemployment Would Reach 10%

Mr. Banks,

It sounds like you were brainwashed by your teachers to spout the same c**p that you were taught. Jimmy Carter drove this country in to the ground with his unemployment rate and stagflation. He could not even rescue our hostages in Iran. History is easily distorted by and for the convenience of the socialistic left. I find it very telling that the left wing is monitoring this site to spew their revisionist Progresssive lines. You can tell your party bosses that I am a Democrat and a union member but I do not subscribe to the destruction of our way of life. Reagan brought our country out of the decline that the Democrats put it in for your information. He did it by giving us hope and belief that we were still a great country. Thank you.


On Nov 08 09:17 AM Ferdinand E. Banks wrote:

> Funny long_on_oil, but I make a point of telling my students that
> Reagan was the dumbest president in the history of the United States.
> He also ruined the lives of hundreds of thousands - or maybe millions
> of Afghans.
>
> And author, read some economic history. There is no relation between
> the 'great' depression and what we have now. And do you know something,
> there never will be.

Rational Market Theory and Black Swans in Healthcare Reform

This comment nailed it also. It is another entitlement. S.S. and Medicare are entitlements. The government always screws with entitlements to make them more costly and then they run out of money. S.S. would have worked if they did not add so many things to it. They, then, used the S.S. money that should have been invested to make money for the budget short falls.


On Aug 18 10:07 AM gu econ wrote:

> Ebworthen nailed it: patients are not directly responsible for managing
> and paying for their own health care. To correct, third parties
> (gov't, employer, insurance company, HMO) get involved to act as
> a governor to control costs, which otherwise the go totally out of
> control.
>
> Correcting would require some unpopular changes, starting with things
> like taxing employer provided healthcare and getting rid of Medicare.
> These are just subsidies that throw fantastic amounts of money into
> the system. A better system would be high deductible HSAs with catastrophic
> insurance on top, probably with some rules prohibiting coverage denials
> for pre-existing conditions (that aspect of healthcare would become
> socialized). What Whole Foods CEO Mackay has proposed is worth considering.
>
>
> No one really likes the current system, but Congress has shown itself
> to be utterly incapable of controlling the growth of middle class
> entitlement programs. All they do is pile on more benefits, a la
> the Medicare drug benefit. Social Security will run out of money
> in 2037 and Medicare will be out of money in 2017 (latest Administration
> projections). Who wants to saddle our children with another crushing
> entitlement progam?
>
> Does anybody really believe the U.S. government is up to this task?
> Is this the same US gov't that was going to protect us from Bernie
> Madoff? Please!

California's Pension, Education Costs: Out of Control

I have to agree with William Brandon. I have paid into the pension fund for the County of Los Angeles. My pension is also invested by fund managers. The County does split the contributions with the workers. Our pension has lost some money in this last crisis and we are required to pay additional funds to make up for the loss. Madoff did madoff with some of our money. I do not agree with the author that I am costing the State of California money. The author is correct to say that education is costing the State a lot of money but it is not going to the children or the teachers. The money is being wasted on all the managers and middle managers.


On Jul 12 05:21 PM William Brandon wrote:

> I don't know about the rest of CA's employees but teachers pay into
> their pension funds and the funds are invested by fund managers.
> It appears that you are proposing the same thing the federal government
> has done with social security, raid it for other purposes. I do
> agree that CA should not guarantee levels of benefits at the taxpayers
> expense if the investments have too much loss to sustain promised
> benefits, but I do hope that you are not implying that CA should
> raid the funds. CA teachers do not take part in social security
> and if they have contributed in other jobs, their earned social security
> benefit are dramatically reduced. On top of this CA cannot print
> money to pay it's debts (social secutiry for one)

Car Sales Will Rise Eventually

How old does a two year old "new" car have to be before it becomes and old car? The new cars are not selling and they will be in inventory when the new cars come out. Can anyone afford the new cars if they can not get loans? Will the prices of the previous year drop to affordable prices? The last years "new" cars will have to become used cars even if they were not sold. The dealers should just face reality and discount the new cars to move the inventory.


On Jul 02 09:18 AM Old Trader wrote:

> I'm not sure I'd be banking on a turnaround in auto sales anytime
> soon. The author is correct in saying that people will be moving
> up the value chain to late model used cars, which I suspect will
> be true, but then they'll hang onto THOSE longer than has been the
> case in the past. Any meaningful turnaround in new cars sales is
> at least several years off, imho. Of course, we might get a "Cash
> for Clunkers, Part 2", which might goose sales a tad.

Why Is California in Economic Trouble?

You are good. Everyone continue to blame Prop 13 but that is not the problem anymore. Most homes were sold as new and ARE NOT subjected to Prop 13. Most of the homes that were covered under Prop have been resold and are no longer covered by Prop 13. The problem with California is the people can not resist voting for every bond that is put on the ballot. We owe billions on bonds and the State Government keeps adding new programs that costs millions. People keep voting in the same tax and spend group year after year. I have been paying more and more taxes every year. That is going to end this year because I am retiring. I now hope the government is going to take care of me with all the stupid programs that they have passed. I expect my Democrats to welcome me as one of their new money vacuum. Actually, I expect to move out of California because I will not be able to afford the new fees and taxes they will pass to tax the low income group. You have a great insight to California's problem.


On Jun 01 06:31 AM User 353732 wrote:

> Let us count the ways.....
> 1. The iron reign of political vampires who grow fat on the blood
> of the unorganized and disorganized middle class, who slowly becomes
> weaker and weaker
> 2. contempt for the values, work, entrepreneurship and inspired risk
> taking that once made California the envy and model of the world
>
> 3. the inabity to distinguish between manufactured reality and truth
>
> 4. infatuation with transient fads that confuse slogans with results
>
> 5. a pervasive sense of entitlements and an uncontrolled desire
> for instant gratification
> 6. a government that thinks(a) debt is a gift from kind strangers
> rather than an obligation to investors and no comprehension that
> if this obligation is repudiated the consequences will be cruel indeed
>
> and (b) that high taxes, capricious and mindless regulations and
> hostility to small/medium businesses are the solution to all problems
> at all times
> 7. An ideology that routinely and reflexively encourages the growth
> of the parasitic economy at the expense of the productive economy
> and then blames the productive economy for not producing enough resources
> to expand the parasitic economy even faster
>
> California is in trouble because of multiple, self inflicted and
> repetitive wounds. The first step in a very long and slow recovery
> is to stop hurting itself but that means replacing the corrupt and
> entrenched elites. No external agent caused California's trouble
> and no external agent can or will cure California of its several
> pathologies.

Tax Revenue Slump: No Doubt in These Numbers

I am in the same age group. I am saving and buying gold. I do not need anything so I do not buy. My house is paid for and my credit cards are paid off every month. Obama scares me to no end of the world. We are speaking of trillions of dollars like I speak of one thousand dollars in my world. The problem is that the trillions will affect me if I live that long.


On May 29 10:23 PM realold wrote:

> I am a pre-boomer at age 65. I agree with you but would add that
> the current uncertainties and much feared results of an Obama administration
> cause me to spend far less. I have no idea how much inflation, low
> interest rates (CDs are a lot of my income), a sure increase in income
> taxes (the downside of IRAs for retirement) and all the other factors
> that make up my income/savings will change. Spending on anything
> doesn't sound wise right now does it? It is not just age, it is
> the economy, stupid. Nothing personal. I am just pointing out that
> uncertainity causes paralysis. We need real leadership and are at
> least four years away from getting it.

What Were the People of California Thinking?

I agree with you. I, too, voted against every measure except 1F. The Democrats have taken over the government in the state and have started the welfare state. They seem mindless that someone have to pay the bills. Their party have voted for every bond measure from "save the crickets" to "save the rodent". We have so many bonds that have been passed that it would make the USA debt look small. I would prefer that the state go bankrupt so the Democrats would have some control put on their spending. It would also force our "governator" to act like a true Republican. I am almost retired and do plan to leave the state. The golden has fled California and I am right behind it. I have no hope that the people of California will come to their senses and vote for a balanced government. I am also not looking for the "feds" to bail us our of this mess. We got our selves into it so let us work it out. We are not to "big" to fail. We need to be made smaller and leaner.


On May 21 10:24 AM east coast transplant wrote:

> I'm a Californian (and I don't surf). I voted against all the
> propositions and I'm not insane. And I don't want a Federal bailout.
>
> I want the politicians to do their job and cut spending -- there's
> talk of cutting 5000 state jobs on a base of something like 230k
> jobs -- That seems to be a small amount compared to the sacrifices
> that many companies and individual families have had to make in the
> current economic climate. In fact, why not cut 20,000 jobs. I worked
> for a company that laid off 2000 on a base of 20,000 - (I'm one of
> the 2000). I've learned to make sacrifices and get by with less.
> So too can the state.
>

Why Hyperinflation Is Not Coming

Hyperinflation is coming. This is a global economy. There may seem to be wealth destruction but it is really wealth redistribution. The money created is being sent out of country and will come back to haunt us. China can and will put the money back into the system when they feel it is the right time to do it. All they have to to is increase the velocity of the money supply to cause hyperinflation.


On Apr 28 09:42 AM Airelon Trading wrote:

> Indeed. Great article. I've been one of the ones during this entire
> crisis stating that we will NEVER see hyperinflation in the United
> States.
>
> Ever.
>
> I will add one point to the above article, that I believe, reinforces
> the authors point, under point #3, and it's a point that I believe
> that many people misunderstand.
>
> All of the "Money Supply" charts are completely and totally out of
> whack.
>
> It's because of one simple key, that I talked about at: investorandtrader.blog...
>
>
> Deleveraging? It's not a money supply increase when banks and institutions
> are given billions. It's deleveraging, which is asset control, and
> the conversion takes place instantly. It CANNOT come back out into
> the macro-economic flow. It's gone. It isn't coming back.
>
> But it's reported as a money supply increase.
>
> Which should be, quite frankly - illegal.

Banks And Consumers Say No to More Debt

Congress is the problem! We have stupid people getting elected and re-elected. They naturally rise to the top where they make stupid laws. There should be term limits to avoid stupid people from rising to the top. Seniority in congress is just as bad as seniority in unions. We need a constitutional amendment to limit the terms of Congress.


On Apr 21 09:00 AM doubleguns wrote:

> No jobs = no income.
>
> Why we have not invested the entire 3.7 trillion into creating jobs
> is just beyond me. Congress just doesn't get it. Now there wont be
> another large chunk of money to create jobs later, they blew there
> wad on foolishness and we are both broke and jobless.
>
> Wakeup America, we have a lot of problems ahead. Our wonderful congress
> is just part of the problem.

The Future of Newspapers

Informed public? They slant the news too much. How can the public be informed if the news is slanted? They have only one agenda and that is to misinform the public. There is no reporting of the news in journalistic manner anymore. It would have helped them to give all sides of the issue and let the public decide.


On Apr 08 09:16 AM Mad Hedge Fund Trader wrote:

> It certainly looks bleak. I bumped into Jim Lehrer last night, the
> legendary anchor of “The News Hour With Jim Lehrer” on PBS, as he
> breezed through the San Francisco Bay Area promoting his 22nd novel,
> “Oh, Johnny”. The ex-Marine, whose first big story was covering the
> Kennedy assassination in Dallas, had some cogent observations on
> the current demise of the US newspaper industry. Print media have
> traditionally been the originators of the news, the guys who went
> to the city council meeting and took copious, accurate, notes. For
> this, the paper got full page ads from the local car dealers and
> every other retail business. Now the car dealers are going under.
> The proliferation of new media, from radio to TV, the Internet, and
> smart phones means that the monetization of this content has moved
> downstream to be reaped by others. Talk radio, weekend news programs,
> comedy shows, even congressional debates, and yes, blogs (guilty),
> are feeding off of this news fount for free. The originating newspaper
> maybe gets a penny of each dollar of revenue spawned by their stories.
> Newspapers now have no choice but to cut costs by firing journalists
> and moving online. Thomas Jefferson said that “an informed electorate
> is essential for a democracy”. The big question is, when all the
> journalists are gone, where will the news come from? I have suspected
> all along that Truth, Accuracy, and Neutrality will be the big casualties
> of all of this. They will go the way of the full service gas station,
> free check in luggage on airlines, and home delivery of newspapers
> by teenage boys on bicycles.

Unconventional Wisdom: Consumers Are Reducing Debt in Recession

The people in the know are spending less and saving more. This is the way it should have been before the crisis. I stated before that Americans were a saving nation but have become a spending nation. They are becoming what made America great. I hope the government follows their lead and abandon their foolish course. Stop the printing press and let the failed companies fail.

Six Cars That Represent the Future of Driving

Are we talking about the same batteries that are exploding in laptops? Are we talking about batteries that have to be replaced and at what costs? Where will we store the toxic batteries? Ethanol has its problems too. It corrodes the pistons and valves because a product is water besides residue. Bus companies that tried it all converted to CNG because that fuel is clean burning. We will be creating toxic waste if we can not get rid or recycle the batteries.

China's Warning

Good article but China does not have a middle class as large as the USA. They have no intent of bringing the lower class up through education. Their political system needs class distinction to survive revolts.
The problems with the USA is our education system. We are "dumbing" down our young people. This may be a useful tool to create a socialist society of "no brainers". The second problem is our trade agreements. We have exported most of our manufacturing jobs overseas to save money. We do not have a manufacturing base anymore. We do not produce very much anymore. I lost 2 jobs because we exported the jobs to other countries. The third problem is the savings rate has dropped. We use to be a "savings" Country. We saved and that allowed our Country to invest. We now spend more than we save. It is heartening to see our savings rate go up even if it is hurting our Country for the time being. We can not go back to the spending like we did before until this crisis is over. The financial system encouraged the spending because it made them money. They need to fail because of their practice. This well get us back to the levels that are safe and economically sound.

Curious Predictions About SoCal Housing

We also have to look at the demographics. The "baby boomers" are getting ready to retire and most likely they will move out of state. They will decide that they can not afford the taxes, fees and cost of living. I know that I will be moving out as soon as I can get some of my money back from the house after I retire. California government has made it an unattractive place to retire with all the bonds, taxes, and fees that they continue to pass. Businesses are also looking at moving out because it has become unfriendly to them.


On Mar 18 04:20 PM henarl wrote:

> Because of California's fiscal emergency and ever increasing taxes,
> a lot of higher earning and tax paying residents are leaving Southern
> California and being replaced with lower earning immigrants, mostly
> from Mexico. These new residents will not be able to come up with
> the required down payments or qualify for mortgages, even at these
> reduced home prices. Expect lower median prices in SoCal for a long
> time.

International Valuation Standards: The Only Viable Alternative to Mark-to-Market

Great article! You have introduced me to more knowledge and I love to learn. It is also evident Greenspan did not understand IVF otherwise he would have raised the interest rate to bring the bubble down. It now appears that the market is on the low side and would be a great time to jump in. I do worry that the bubble (money expansion) created by the government has to explode in the future. They could control that by raising interest and removing the money as it is paid back. Thanks for the great article.