The Housing Bubble

1. It’s not ridiculous
2. It’s “princiPAL” not “princiPLE.” ( http://dictionary.reference.com/browse/principal see def # 12)
3. We’ll soon get to the point where people who are retiring with, say $3 Million, accumulated through thrift and living within their means, will be no better off than those who have saved nothing. Why? Because people will be considered too wealthy to get medicare, and Social Security and Public Health Care will be means-tested. How fair is that?

And if you have $5mm and your primary earning vehicle is CDs, then you really need a better financial advisor.

I should also add that I lost no money in the “Crash of 2008″. How did you do?

“I should also add that I lost no money in the “Crash of 2008″.”

I didn’t lose anything either, but I also missed several years of higher gains by playing it safe in treasuries. The seventies taught me to never trust anyone with money especially when times get rough. Lots of people out there that really don’t know how to earn an honest living.

I totally agree with your retirement savings observation, Reuven. In my little world I have a stack of BofA 0.25% / 3-month / $3,000.00 CDs that automatically reinvest the interest. Last quarter’s return was $1.76 per CD; never thought I’d see savers being treated so badly.

That would be funny if it weren’t so true.

Or to engage in capital flight by buying foreing mutual funds, my personal tactic.

As I’ve often said, I’m not the sharpest tool in the finance shed.

Is is actually possible for China to “call in” our debt? And if so, what would happen, if they did it tomorrow?

I’d like an answer to this too.

I guess the US and China are playing chicken to see who blinks. Presumably, if China calls in the debt, the US simply pulls back and retrenches into protectionism. If the US retrenches first, then there will be a revolt of some sort. Probably from Americans who will realize just how much stuff comes from China. Imagine not having the newest Nikes for school.

‘Maybe, given the fact that our “fiat” doesn’t seem to be worth much right now.’

Doesn’t a lower ‘worth’ of nominal currency units make nominal debt easier to repay?

“Doesn’t a lower ‘worth’ of nominal currency units make nominal debt easier to repay?”

And doesn’t the smart and cunning Chinese know this is in store for their Treasury holdings? And what is / would their action be in response to this?

“And what is / would their action be in response to this?”

Think of the Symbiosis as a marriage between one partner who works very hard and makes lots of money and another one who owns the credit card and shops a lot. I won’t mention any names here to protect the innocent, but you can think of these people as your FIL and MIL if that makes the example more real for you.

Now it turns out that FIL runs a company which employs many workers to manufacture worthless kitsch which MIL likes to purchase with her credit card. If FIL takes away MIL’s credit card, then she stops spending loads of dough on worthless stuff made at FIL’s company, and FIL has to lay off some of his workers. But to maintain the status quo, FIL has to keep giving MIL money to spend, for purchases of worthless kitsch made at FIL’s factory.

Quite a conundrum, neh?

Is is actually possible for China to “call in” our debt? And if so, what would happen, if they did it tomorrow?

Doesn’t seem like it, at least not as a one-time event. The treasuries they buy of course all have maturity dates. So the worst they could probably do would be to simply stop buying new treasuries, and allow the current ones to expire for redemption.

That being said:
- That’s still bad.
- It’s worth noting that their holdings of treasuries have been migrating more and more towards the short-term side.

However *that* being said - the Yuan is still pegged to the dollar. So unless they unpeg it, they’d be hurt economically as well, and badly.

PG - good analogy!

It’s worth adding though, that the MIL is not the only consumer of FIL’s business. So if the FIL feels that he’s being hurt worse than helped by MIL’s spending, then FIL may still be willing to take the hit, if he thinks that his business can still survive (and eventually thrive) on other non-MIL business.

PG PB I mean - sorry.

>Quite a conundrum, neh?

Yes yes, I am familiar with this unhealthy co-dependency. But with all unhealthy co-dependencies, it will END one day. I am interested in what the end game will look like and position accordingly before it happens.

To see how this will end I think you have to put yourself into the shoes of the Chinese Communist Party central planners.

So how would this end? If you are able to predict this you deserve the Nobel Economic Prize.

“…if he thinks that his business can still survive (and eventually thrive) on other non-MIL business.”

Come to think of it, my inlaws do have some polygamist ancestors. I see no reason it couldn’t happen again.

“So how would this end?”

I have to suspect the Chinese investment bubble will pop along the way. I am too frightened to contemplate what happens thereafter.

Whatcha talkin’ about PB?! There are no bubbles in China. Stick with the program.

“So how would this end?”

I have to suspect the Chinese investment bubble will pop along the way. I am too frightened to contemplate what happens thereafter.

I suspect the Chinese government will pop along the was as well. They have some weird demographics in that country.

Imagine not having the newest Nikes for school.

They’ll just move the factory to Mexico.

Chinese investment bubble? Gee, don’t they have a combination of transparant corporate governance and experienced investors to prevent that? /snark

talking heads are harping about Japan raising rates too soon ! to what .5%

See Friday’s bits bucket. Japan’s going through deflation right now. It’s worth noting though that there are a lot of differences between Japan as us though.

True, but the Chinese aren’t all that happy about the printing press thing either.

+1, alpha.

There is zero reason to repudiate the debt when you can print as many dollars as you need to pay it.

Countries that get into real trouble as those with debts that are denominated in currencies other than their own; in other words, they can’t print their way out of it.

The beginning of the end for the US$ will be if/when we ever have to issue debt that is not dollar-denominated.

Countries that get into real trouble as those with debts that are denominated in currencies other than their own; in other words, they can’t print their way out of it.

And luckily there isn’t anything that can go wrong when you try to print your way out of debt!

Which begs the question, when will the rest of the world cease their willingness to lend to us in dollars. I’m reminded of th laughline in the Austin powers when he says “sound as a pound.” Because at one time it was a currency of great stability.

“The dollars they hold are claims on U.S. assets”
not really, they’re only allowed to buy the scraps. See the Unicoal deal that was blocked.
Buying raw materials with dollars = find a greater fool to exchange their precious limited natural resources for worthless paper.

Well the argument can be made that the Unicoal deal just shows that we’re not desperate enough. Arguably though, we will be before this ends.

“Buying raw materials with dollars = find a greater fool to exchange their precious limited natural resources for worthless paper.”

So now we’re back to the dollar = worthless paper? Lol.

Seems like we HBBers were here about a year ago: Gold is the only true money, non-backed- fiat peices of paper are worthless, etc.

This worthless paper solves all my financial problems. What do you use to solve yours?

This worthless paper solves all my financial problems. What do you use to solve yours?

I use gold. The exchange rate to “dollars” keeps increasing, so everything is getting cheaper and cheaper for me.

Comment by Mike in Miami
2009-11-23 06:47:26
“The dollars they hold are claims on U.S. assets”
not really, they’re only allowed to buy the scraps. See the Unicoal deal that was blocked.
Buying raw materials with dollars = find a greater fool to exchange their precious limited natural resources for worthless paper.
———————–

From what I’m hearing, they are **already** buying up U.S. mines and real estate (maybe farmland?). They can just use U.S.-based companies to make the purchases for them.

I think they are already dumping their dollars.

OK, but in order to answer that, I need to know is the debt itself real or nominal?

The debt is nominal (unless you and I are talking about different debts).

We print the money and pay them back. This dilutes the dollar and decreases it value. So they are loosing a significant part of their investment. That’s standard procedure for any banana republic.

Ah, Ok, if the debt is nominal, it can be repaid nominally.
No problem. We could do it tomorrow.

Is this a great country, or what?

So far as I know, those who are currently purchasing US debt are doing so willingly — nobody is forcing them.

It may indeed be feasible - but as of last week, by virtue of a certain 60/40 count in the U.S. Senate - our ability to ever repay the debt just got a whole lot harder.

(Yes I know that’s a can of worms, but - to mix metaphors - it’s a can that’s the size of an elephant in the room.)

That vote was to allow themselves to *talk* about the bill. Nothing more. Talk is cheap.

Guess I’m (ashamedly) not aware of the ins and outs of the process - but isn’t the 60/40 count what’s required to bring the bill to a vote - but once it’s in a vote it only has to have a majority (51 votes) to pass, right?

So the “talking about it” portion is often actually the biggest hurdle, not the vote itself.

I could be wrong though.

“Ah, Ok, if the debt is nominal, it can be repaid nominally.”

But, and there’s always a but, after printing US dollars to pay back the treasury debt, no one will lend to the US nor accept US dollars for anything. If it isn’t mined, grown, extracted or manufactured in the US, it isn’t coming to the US.

If it isn’t mined, grown, extracted or manufactured in the US, it isn’t coming to the US.

So we’ll get our manufacturing base back? Hurray!
Seriously, at least we’re capable of being self-sufficient. Be funny if we had to resort to it and it worked out well.

There will have to be another 60/40 vote to bring it to a real “up or down” vote. It was all over the news this morning that there are a bunch of Senators who voted to allow it to be discussed that said they wouldn’t vote for it to come up for an “up or down” vote in its present form. Including Lieberman who wants the public option out before he will even think about it.

To underscore polly,

The vote was a cloture vote to move out of committee, NOT a cloture vote to close debate.

“If it isn’t mined, grown, extracted or manufactured in the US, it isn’t coming to the US.”

Am I being totally naive to think that this country would only return to drill baby drill, strip mining and nuclear and then Florida and Cali would have to bulldoze a few neighborhoods so we could grow the appropriate sources of vitamin C again? If we eliminated safety and environment regulation would that allow us to produce most of what we need? Or do parts of our infrastructure truly rest on resources only found elsewhere?

Well CarrieAnn it’s like this:

Environmental and safety regs are not holding back domestic drilling. Out right fear is. And local fees. That’s right. Local government fees. But there is also a geopolitical factor which is to deplete everyone else’s supply before we deplete ours.

As to rare raw materials, yes, there are many rare raw materials that we do NOT have on this hemisphere. You’ll have to look them up. I no longer remember off the top of my head.

Bauxite (key aluminum ore) is a good example of a not rare, but rather scarce material. We rank 14th in the world of reserves. Yet we consume the most.

bauxite scarcity = good news for iceland i think

= good news for az_lender

And don’t forget that the US has, by far, the biggest and heaviest hammer in the world and has shown it’s ability to use it.

Wow. What color’s the sky on your planet?

Maybe that was tongue-in-cheek? Doesn’t seem to fit your M.O.

I’m on planet reality. That is what has been happening for the last 30 years. We’ve been paying interest on a revolving line of credit that will never be paid back. And so it doesn’t matter what the principle becomes. 10T 100T 100 bajillion gazillion. Makes no difference. And everyone knows this including the people lending the money.

“We’ve been paying interest on a revolving line of credit that will never be paid back.”

Yah packman, just ask anyone who’s ever used a payday lender how well it works. They never run into any trouble.

Think of the debt as an interest only mortgage that never adjusts. As long as we pay the interest, we get to stay in the house. And if teh principle double or triples or quadruples, who cares?

This works only as long as interest rates don’t go up. If interest rates go up, it’s a whole ‘nother ball game.

+1 for neuromance - except for one thing. We don’t need for interest rates to go up to be in trouble - we just need for them to stop going down.

Eddie - saying the principle “doesn’t matter” is kind of like saying that falling off a cliff doesn’t matter. Sure - no one ever dies from falling off a cliff, but that dang sudden stop at the bottom gets you every time.

It was no mistake; it came off exactly as planned. Go back and look at the Club of Rome’s forecasts and predictions. Unless the “North” was willing to share its standard of living with the “South”, calamity was predicted. Since then, we (mostly middle class Americans) have shared by going “global”. Some havent bothered to share as much; theyve actually sucked more out of us: Norway, OPEC, Russia, Canada, Europe, Japan, Korea. Check out the dollar amounts sometimes….trillions, and the millions of jobs. What have we gotten in return??

DOD and many of the US black ops stuff has their own chip fab plant for this very reason. They don’t trust chips from China. 60 Minutes recently did a story on this. Can you imagine putting in a Chineese chip into a missle guidance system, no way.

I recently configured a CISCO ASA firewall for work and noticed it was made in China, luckily I don’t work in the govt side of the house or else I wouldn’t feel comfortable using it to secure anything.

A lot of “investors” getting into the precious metal game quite late and buying from unknowns on ebay, or some guy they met outside the pawnshop have been fooled by those ingots. They look surprisingly real, judging by the pictures of the fakes I’ve seen. I like dealing with Apmex. Great service, great product lines.

Heh. Obviously intended for the reseller market.

How hard is it to test that gold is real? Other than weighing or biting it? Neither of those tests seems too reliable. Sounds like the counterfeiters are getting good.

Sure would be ironic if the SHTF and nobody trusted physical gold either. I bet I know one long-gone poster whose ‘insane’ little head would explode.

For my physical gold, I buy krugerrands from a reputable local dealer who’s been in business for 50 years.

I wouldn’t trust anything on ebay, ever, that could possibly be counterfeit. I’ve seen counterfeit US pennies from rare dates. (It’s very easy to manyfacture an old copper penny.) I’d say most 1909-S/vdb pennies around are now fakes!

You can borrow until you can’t. The Federal debt is $12 Tr. What they promised to pay me in SSI is not “debt”, it is future planned expenditures. The future plan is subject to change.

Just my opinion, but the Feds could very well reduce expenditures drastically. How about closing 130 overseas military bases and two wars?

I’m guessing the ‘will of the people’ will be to repudiate before frugality. Too many special interests to fight government frugality (MIC, AARP, PS unions, etc).

The future plan is subject to change.

It’s contractually obligated. I suppose that could be considered to be “subject to change”, but then full repudiation would be similar. We’re talking about trying to avoid that.

How about closing 130 overseas military bases and two wars?

That would take care of about 10% of our deficit. And the other 90%?

(assuming that we wouldn’t need to increase spending in other national-security areas to make up for what we’ve lost)

Oddly, I was going through a box of 40 year old camping stuff last night, from my Philmont days. All of it is really high quality stuff, and everything I checked was “made in America”.

When I was in college in 1990, I used my grandfather’s Boy Scout mess kit (40’s vintage) to cook soup on the stove. It still works. I will put it in my disaster-preparedness kit.

You can get quality stuff made in China; you just have to pay for it.

Read this morning that the last saxophone made in the USA was in 2004. All overseas now! Chinese stuff is known to be horrible. Japan is good tho.

If I could just find an American made bass saxophone at an estate sale, that’d make a cool room decoration.

Check your local pawn shop. Then offer them 2/3 of the asking price.

If a pawn shop had one, it’d be $7000+

VaBeyatch,

I’ve started to notice that too. Dealing in vintage guitars has started to look very suspiciously like “money laundering” to ‘me’?

You see the same instruments pop every few months and sellers openly admit “I’ve never actually played it, but the guy I got it from said it was a ‘perfect 10!’

What makes it even ‘more’ suspect is, unlike just about everything else, there are ample guitar makers right here in the good old US of A. Tons… So this is starting to look like the C/L version of “250 ‘roses’ per hour”.

Spokaneman,

Well, what could ‘possibly’ be more depressing than the ‘Holidays’? ( Nothing “I” can think of? )

A great many of us are coming to the conclusion that having say, 1 or 2 really durable, well built coolers are a hell of a lot better than having scods of coolers “for every occasion”!.

I’m working on a very basic “roll away” portable kitchen for 2nd homes/vac. homes that has a gas stove, ice box and basic sink for washing dishes etc. It won’t require any power or plumbing and I’m pretty excitied about it.

Actually, the holidays are happier for me than in the past.

I think I’ve finally convinced my family that the holidays are for gathering together as a family and that the notion of lots of presents went away once the kids were grown.

For years, I’ve asked that any money to be spent on me be given to charity, and within the last couple of years I’ve actually seen that wish granted. It was a tough sell, the kids and my wife also to a certain extent, equate caring with spending.

This year, Daughter 1 is coming over for a few days at Christmas, and Daughter 2, who is in the military, gets leave so we were able to get her home for a few days as well. What the heck more do you need except a bit of good food?

The problem of giving (spending) has been somewhat solved with respect to the kids, the military daughter is enlisted personnel, so she doesn’t have a ton dough to spend (none in-fact) and Daughter 1 is just beginning her career and finding out how expensive it is just to live (shock). Now, if I can just convince my wife that very little spending is necessary, I will have achieved a degree of success. Its been a battle.

“I wish it were that simple. Remember, Grampa had far, far less available to him and certainly did not have the Madison Avenue Marketing machine”

I take it you’ve never watched Mad Men?

Battle? Heck, you’ve won a major war!

“I take it you’ve never watched Mad Men?”

Loved your story, Spokaneman.

We do the same ourselves. Only buy a couple of gifts for the kids and that’s it. We love the gathering/eating together with friends and family part much more.

Scales are accurate enough, but volume is a little more difficult to measure.

If I’m reading it correctly, your link shows $12 Tr, which is 100% of GDP, not 600%. We owe a year’s income, not six.

Apples to oranges. GDP is the revenue of the entire U.S., not of the federal government. The revenue of the federal government is only about $2.2T per year. So if you want to examine the debt level of only the government, you have to look at the revenue level of only the government.

I get it.

Is this what is popularly known as the “No Banker Left Behind Act”?

Prof,
Aren’ t the Fed and the Treasury 2 different organizations, the former being completely independent and unaccountable and able to do whatever the the he** it wants, and the latter able to do whatever the he@@ it likes with the consent of our otherwise useless politicians?

“…the former being completely independent and unaccountable and able to do whatever the the he** it wants, and the latter able to do whatever the he@@ it likes …?”

Wow — tough question!

“I don’t know that it would, but I do think it takes some time for land to become arable.”

My dad is an urban farmer. He dug up a good part of his suburban back yard lawn and converted it into a vegetable garden. A little fresh manure (preferably deodorized) supplemented by a compost pile can hasten the soil development process considerably.

Yes, but that was lawn, not a paved-over lot or site of a former building. Just wondering how that works.

Perhaps there is a difference between crops that are removed and grass / trees? If anything I guess the process of having the trees grow would help clean it up.

Whether it’s farmable for crops would depend on pollution (could be a major problem on old factory sites) and topsoil. In newer developments, topsoil is scraped off and sold before they build. In the old days they left it, but I’m not sure what they did at factories etc. Topsoil can be purchased (too expensive for large projects) or ‘built up’, but that’s not easy.

VaBeyatch is right that it would be a lot easier to grow trees and turn it into woodlands. Experiments on ‘reclaimed’ strip mines here in KY have even shown that trees do better starting in rough rubble (like what you’d have if you bulldozed everything but didn’t remove it) than on evenly plowed fields. It’s amazing how fast a forest can grow in these conditions.

not a paved-over lot or site of a former building. Just wondering how that works ??

There is a problem here if it was completed in the last thirty years or so…Because natural soil is expansive most construction pads and parking lots are now prepared with engineered material…The soil reports usual determine the over excavation of the natural soil that needs to occur and then replaced and compacted with engineered material…Bottom line is that some of these sites have no remaining top soil left making them basically sterile for any crop production…

Yes, crappy soil from building sites…ugh, the worst. The excavators will claim they “put the topsoil back” but it’s BS. They don’t give a rip.

Reading Francis Parkman’s histories of the area, I recall that the whole region was solid forest,at least in Pontiac. Maybe the trees will just reclaim it.

Its underway regardless of the issues:

http://features.csmonitor.com/gardening/2008/08/21/growing-green-in-detroit/

Silverback1011,

Good point. And.., if it takes 20 years, I suppose they’d best get busy? There’s also a hosy of “fast grow” hybrid trees they could plant as well.

Nice solution to a sticky problem.

Excellent point Silverback….The cost of soil remediation and disposal is astronomical…It renders many sites worthless…

PB,

Further, if the current administration is desperately attempting to find “make work” projects, this makes a lot more sense than many of the proposals we’ve already had tabled?

In fairness, anyone that’s ever been in the military -knows- how hard it can be to find stuff to keep people busy.

Tungsten and gold have a similar weight (supposedly, I’m not a metallurgist) hence the gold plating of tungsten bars. But something raised suspicions, so they drilled a few bars in Hong Kong and struck tungsten, allegedly. I have no idea if all this is true, but as noted below, it’s a story making the rounds and if true, I’m wondering what the implications are.

Density of Tungsten: 0.697 lb/in^3 [19.30 g/cc]
Density of Gold: 0.698 lb/in^3 [19.32 g/cc]

You can’t throw it in the bathtub like Archimedes did. But you can check the L lines in EDS.

you can check the L lines in EDS.

How many oz. of (real) gold does it take to buy one of those gizmos?

And this is my main issue about gold. If it’s to insure against a SHTF scenario, how many people are going to have these machines to insure they’re getting the real thing?

Lehigh, an EDS (coupled with an SEM) will run you $200K or so. I haven’t seen stand-alone EDS.

Anyway, resistivity is probably the cheapest and fastest test. I think you can do that with a DMM or a hand-held device, but my electronics is rusty.

And this is my main issue about gold. If it’s to insure against a SHTF scenario, how many people are going to have these machines to insure they’re getting the real thing?

That’s why coins are so nice. It’s a lot harder (and more expensive) to fake a coin than a large bar. Plus large bars (e.g. the kind held by central banks) aren’t feasible for use as retail currency anyhow. About the only thing a “person” could buy with a bar like that is a house.

Tungsten and Gold have very similar weight, though tungsten is very brittle, and also has a way higher melting point. So it’s very easy to detect, though you’d have to be willing to reprocess the gold in some fashion to do so.

It’s a lot harder (and more expensive) to fake a coin than a large bar. ‘Harder’ and ‘more expensive’ are relative terms. A government that already produces coins for circulation shouldn’t have too hard a time counterfeiting other country’s gold coins by plating tungsten slugs. China already produces 75% of the world’s tungsten from ores. China counterfeits all manner of manufactured goods already. Its lapdog North Korea already runs a profitable counterfeiting racket. Once put into circulation, who would know where plated gold coins originated?

So it’s very easy to detect, though you’d have to be willing to reprocess the gold in some fashion to do so.
Reprocessing the gold is not ‘easy,’ IMHO. However, I am sure there are many non-destructive testing procedures that can ferret out gold-plated lumps of tungsten from a heap of similar lumps of pure gold, for a price. It’s highly likely gold bar depositories have multiple testing devices in regular use to monitor their supplies, to prevent embezzlement by substitution, etc. They would, understandably, be highly reluctant to disclose these methods.

Once put into circulation, who would know where plated gold coins originated?

Not too hard. If it’s a Chinese panda for instance - it originated in (drum roll…..) the Chinese mint. There’s no way the Chinese mint would knowingly counterfeit their own coins.

Aside from that - if someone *else* is counterfeiting the coins themselves (e.g. a Chinese panda, US eagle, etc.); well that’s pretty much the same as counterfeiting any currency. It’s always a trade off between the expense of counterfeiting vs. the detectability of the counterfeits. In the case of gold coins it’s much easier for a non-professional to detect a counterfeit (e.g. gold-plated tungsten) than say a $100 bill.

Coins in generally are actually quite hard to counterfeit, in part because they’re not easy to produce, and flaws are generally easily detectable. Throw in the fact that tungsten’s not very coinable due to its brittleness, and I venture it’s just not feasible to do such a thing. It’s only really feasible with large bars, and in those cases usually the bars are tracked quite closely, so the source is usually easily found.

Math Lesson: you cant round off to four places when you start with only three, as in 0.697 lb/ cubic inch equals 19.30g/ cc. This is why you see all kinds of numbers for densities.

Take it up with matweb dot com.

Or better yet combo:

The elephant oil field in the mekong delta they found in the 60’s

They are waiting for the nam vets to die or are too old to care.

Been down on the farm ATE? Was it a funny farm? Anyway welcome back. You’ll be sorry to hear Oly’s AWOL again.

Alpha,

I think we should be checking 8up’s Green Acres for OlyGirl bones

Hi Alph!

Yeah, I miss the Oly Gal… I’m a tryin’ to stir her up though!

Where have you been ATE? I thought maybe you and Oly had eloped to Geoduck Island.

Those have been on since the prices was in the $600s. A near 100% return.

Alpha,

I think we should be checking 8up’s Green Acres for OlyGirl bones

“I think we should be checking 8up’s Green Acres for OlyGirl bones”

Hey, I also worry when I don’t know where Olygal is and she’s not physically accounted for. We teased her a lot.

Heck, she could suddenly swing down from a tree limb or pop up with a hatchet from behind a fern some dark and dreary rainy night. She used to talk about doing strange things to people and she keep a mental hit list.

You never know about that girl.

Good point. I really don’t know if gold will ever see $1000/oz again. But I am quite sure that there will be a parabolic spike and crash over the next 1/2 decade. The timing is uncertain, but sooner rather than later seems likely, given the information cascade currently underway of articles about new converts to the Gold Bug camp.

I agree with you on the timeframe of a half decade, but my thinking is 2012 or 2013 for the precious metals crash.

My asset allocation in PMs is now about 12.3%. Fifteen percent will be too high for me to stand it.

+1 Blue Skye…

“My friends are not buying gold, they are saving as much money as they can…”

So’s most everyone; Unfortunately for savers this forces interest rates for savers to go to zero.
But, for many people, the word is out: Cash is the place to be, even if the nominal rate of return for cash is zero the real rate of return for cash in a deflationary environment is a positive number.

This screws money managers. If cash is the place to be then why do people need to pay money managers a commission to go to cash when they can go to cash themselves for free? This sort of thinking forces money managers into chasing risky ventures in the hope of getting a good return for their clients so their clients won’t leave and take their money with them.

Thus “Commodities are up while demand on the street is down”.

All IMHO, of course.

This screws money managers. If cash is the place to be then why do people need to pay money managers a commission to go to cash when they can go to cash themselves for free? This sort of thinking forces money managers into chasing risky ventures in the hope of getting a good return for their clients so their clients won’t leave and take their money with them.

Good point. I wouldn’t want to be a low-level manager right now. Though the people on The Street seem to be doing pretty well.

HAHAHAHAHA

schip-emtala - etc………..
it’s all a freebie already

why hesitate to de-regulate ?

it brings costs down

Exactly. How much easier would it be to start up your own small biz, if you didn’t have to pay health care for your employees? And how much more flexible and mobile would our work force be, if their health care wasn’t tied to their jobs? It’s pro small-business. That’s why the big boyz no likee.

alpha-sloth,

Good point, I’d never even thought of it in those terms? And why not!? It’s sad that when considered in total, small biz in the U.S is like the 5th largest economy in the world ( but we keep letting people dump all over us? )

Now that a great many people have had their credit ruined in this meltdown, what chance do they -ever- have of pulling themselves up?

That’s why I’m going to advocate from this day forth, you have (2) s-e-p-e-r-a-t-e FICO Scores! One is your everyday, revolving credit score, cards, car payments etc. and the -other- is your REIC score! That way if people elect to “walk away” ( and remain current on their remaining obligations ) they can retain access to ’some’ credit.

If RE is your bag, then let your plastic slide into oblivion. Who cares! I sure don’t any more.

Exactly. How much easier would it be to start up your own small biz, if you didn’t have to pay health care for your employees? And how much more flexible and mobile would our work force be, if their health care wasn’t tied to their jobs? It’s pro small-business. That’s why the big boyz no likee.

After all, if all of the entrepreneurial types decide to bust loose from their corporate chains and tell the big boyz buh-bye, who will be left to work for the big boyz? Not many people, that’s for sure.

And how much more flexible and mobile would our work force be, if their health care wasn’t tied to their jobs? It’s pro small-business. That’s why the big boyz no likee.

After all, if all of the entrepreneurial types decide to bust loose from their corporate chains and tell the big boyz buh-bye, who will be left to work for the big boyz? Not many people, that’s for sure.

It’s much more than health insurance that ties people to big business, I’m afraid. And the last I checked, it is already possible to buy individual policies separate from one’s employment.

It is indeed possible to buy individual health insurance, but your pickings are a lot slimmer than they are in the group insurance world. They’re also pretty danged expensive.

Just because it’s possible to buy your own coverage doesn’t mean it’s affordable. Especially if you have a pre-existing condition.

LehighValleyGuy,

Existing conditions aside, it’s the whole “up & running” thing that turns most people to stone. Knowing it could well be a year, or three or ten before you can afford a policy ( getting older all the while ) that leaves many of us bound to our employers.

I agree, there’s a lot ‘more’ issues that bind us, but for the most part, they’re psychological or minimal at best? Like what, the employee break room? Cake at retirement ceremonies? Parking?

Of course the big boyz would always argue why don’t ‘they’ get free HC?

Jeez. Another oversimplified non-solution gets eviscerated.

Just because it’s possible to buy your own coverage doesn’t mean it’s affordable. Especially if you have a pre-existing condition.

You do need to buy insurance before you have a problem, this is true. It would also be un-affordable to buy homeowner’s insurance if your house is on fire. But a lot of affordability problems can be traced to mandated coverage rules (like mandating coverage for pregnancy even though this is often a desired condition) and malpractice issues.

I agree, there’s a lot ‘more’ issues that bind us, but for the most part, they’re psychological or minimal at best? Like what, the employee break room? Cake at retirement ceremonies? Parking?

Wow, do you really believe this? I WISH it were so. Big business has dominated the economic landscape since at least the late 1800’s, long before it became commonplace to give employees health insurance.

What if you worked for years at a co. that provided health coverage, and during that time developed high blood pressure, diabetes, whatever. Could you so easily find long term affordable coverage? Or are you almost trapped at your job- like an indentured servant? Would you be likely to leave and start your own small biz, or work at someone else’s start-up?

The previous policy is supposed to pick up all future costs associated with conditions you developed while insured under it. So it should be possible to find (affordable) new insurance as long as you don’t have a gap in coverage.

Sooo…Once you’ve worked somewhere where you get health insurance, you’re more or less guaranteed it in affordable form for life? As long as there are no ‘gaps’? Please provide a link.

asloth,

Google HIPAA.

DennisN- I googled it. (I think you and I have gone over this before.) Anyhoo, it basically says that group plans can’t deny you coverage for pre-existing crap if you previously had individual or group coverage that covered your condition.

So what? You still wouldn’t get covered if you left your job and started your own biz. It just allows you to squeeze into a group coverage plan-ie something a *big* business can afford to offer you, but not neceassarily a start-up.

Which was my original point, universal single payer coverage is pro entrepreneurship/ small biz, the health care status quo is pro big biz.

I suggest starting here:

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

It’s a pie chart of federal expenditure by major category.

You gotta cut aggressively and at the same time raise everyone’s taxes. Eliminate the mortgage deduction. Eliminate preferential treatment for capital gains. And eliminate ALL indexing for inflation (Federal pay scales, income tax levels, Social Security, Medicare/Medicaid, and all other entitlement payments). Oh, and raise the SS retirement age.

Or, default on the debt.

“The illegal we do immediately. The unconstitutional takes a little longer.” - Henry Kissinger

Bill,

Isn’t it just possible that we could phase out said programs over time? I don’t think anyone’s implying we’re going to unplug the vacuum cleaner by jerking on the cord from down the hall?

This will take time. Lots of it. If we started yesterday..? Additionally, any kind of public HC would ( at least initially ) have to involve only the most urgent, the most needy )

I sure hope no one is ‘thinking’ we can possibly provide it for ‘everyone’ that would want to, right out of the gate?

Politicians are generally already wealthy. They aren’t going to starve, but the poor will. Actually, they will rob the middle class.

The middle class might be a little tougher to clean out than you think; remember those Koreans in the LA riots? Multiply that by about a million. My take is that everyone who wanted a gun and some ammo for such an occasion has purchased same already. My fav gun store has had zero AR 15 type rifles in stock for the last year ( what few they got from manufacturers sold immediately), Saturday, had 26. Besides, the poor are generally too obese to be doing any serious robbing. They’ll outlast us on stored calories, though.

Bill, would that be the children or grandchildren… who don’t have jobs or a pay raise in years or medical financial problems of their own?

At the moment I know more cases of 30-somethings living off of parents, than the other way around. Of course, that could change quickly if SS & Medicare were suddenly reduced.

There was a great segment on 60 minutes last night detailing the high cost of dying these days. They identified on woman, who was in her 80’s, a retired nurse with a no herioc measures living will dying of liver and kidney failure, upon which the doctors and hospital performed 25 separate tests and procedures, including a Pap Smear, for crying out loud. The jist of the 60 minute segment was that most of the costs of health care reform could be paid by simply letting us old folks (I include myself in this) die somewhat naturally.

But big medicine has grown big sucking at the teat of Medicare and is not likely to wean itself willingly, but at some point it has to happen.

The problem is this - how do you define “die naturally”? There is no such thing. In reality we all die of *something* - be it cancer, heart disease, pneumonia, etc. etc. It’s just that as we age the list of somethings increases, and the chances of each given something increases, until eventually one of them gets us.

The big two of course are cancer and heart disease. But people die of heart attacks in the 40’s all the time. People die of cancer at 5 years old. Is that dying naturally? I have a cousin who is now 10, and has been fighting cancer for 6 years. His treatment has been extraordinarily expensive. Should the plug have been pulled on him 5 years ago?

What about people who live to be 105 years old (fairly common)? What if one of these people gets cancer at 75 - should they forego another 30 years of life in order to “die naturally”?

I’m not trying to make a statement about health care legislation, except to state that it’s in the eye of the beholder. Each treatment has to be taken on a case-by-case basis. And - as unfair and cold as it sounds - two of the inputs for the decision making has to be how much “bang for the buck” can be achieved, and how much of the cost is borne by the patient or not.

E.g. if a given 80-year-old cancer patient can go through a $20,000 treatment that has a 10% chance of extending their life just a few months or year or two, and if that cost is borne publicly (either by insurance, medicare, whatever), then it may not be worthwhile. However if that patient and/or their family is willing and able to bear that cost, then by all means it should be allowed.

packman,

We -all- struggle w/ those issues and I swear, hardly a day goes by where I don’t see an injustice. I haven’t exactly lived like an altar boy, and even at 50, I’m already outliving people that have never taken a drink in their lives.

Then you see people that have never done anything but help-them-SELVES and they have either the money or the access to keep alive when no one would even show up at their funeral.

More questions than answers I’m afraid.

+1, eco.

I’d raiseincome taxes extremely by doubling or tripling them on everyone and make the low income taxpayers again

Following your logic wouldn’t this cause the wealthy to move away? (And for that matter, why don’t they all move away from ’socialist’ europe, where they have universal health care and other abominations?)

There are wealthy people in Europe?

Check wikipedia, BiLA. 25 of the 100 richest people in the world are western European. Quite a few more if you include Russia or evil, socialist, nearly-European Canada.

Next misconception?

“Next misconception?”

Bono moves his wealth overseas to escape taxes.

Please give me a URL to disprove that statement.

“Thank you sir, may I have another?”

I guess wealthy Europeans are stupid, in general. Sacrificial animals.

Me too Palmy, I really miss her, and wonder if she is OK. When I started here, some time ago, Alad. dissapeared shortly thereafter.

( Not that it matters, but I had that Bowie album so I knew where he was at).

Anyway, I get a connect with people, emotional, and it is fine, beautiful, nice, and nothing to be ashamed of.

I think most will all agree here. Mis Oly. Sure do.

Hope she is safe.

f she is safe, everything is A-OK.

Hey coug! They are my lil’ buddies. It is good to be around kids, who could be your daughter.

That way, we all love each other. ( I have no children, so they ARE my “children”. It’s cool…

Both good girls, for sure. Thanks for asking.

ATE

eastcoaster,

Happy ( advance ) B’ Day!

Yeah, I’ve struggled w/ that too. There was… a time where I was strongly considering “keeping my powder dry” for The Great Real Estate Bottom-feeding Frenzy”, but it hardly seems worth it now?

Even if I ‘could’ land that beauty of a place in Vegas w/ a pool bigger than most people’s houses for a ’song’ ( what kind of neighbors would you have fer’ chrissakes? )

Unless I see radical change, there isn’t anything out there worth jeopardizing our relatively modest retirements as is? I mean, isn’t that half the articles we post here all day every day? “I was 55 y.o at the time and the wife and I figured owning a 2nd/3rd home would be a great way to build our retirement..?”

Yeah, the story is still out on those double bacon cheeseburgers with the large fries and the malts topped of with a few Marlboros, too. Average lifespan 1000 years ago, maybe 26. Most of the health related deaths today occur after,maybe, say 35. Gosh, mercury free environment or today’s environment?? Ill take today. Pass the tuna salad.

Carlos4,

I recall seeing Dennis Miller saying he was so frustrated by the current hysteria he wanted to see hot dogs w/ a cigarette built into the middle of it!

Prof. B.:

Love does not require that sacrifice. That is why it is called same.

Hope you feel better.

ATE

P.S. I am just trying to get her attention, ya know? How do you do that, when she is not typing?

Only hope she is a lurker, and yes, I wonder/worry about her well-being.

I found her on facebook a while back and it appears she’s not the type that appreciates being found in real life. Her loss if she doesn’t want to hang out with us any more :-). At least Shorty still loves you…if you can call that love.

Wow Carl:

I won’t go there, ya know?

Good info though, and thanks.

Maybe time to put the matter to rest…

I was just worried about her.

“I found her on facebook a while back and it appears she’s not the type that appreciates being found in real life.”

Huh? Why would anyone who values their privacy have a facebook page?

Yeah, never thought of that Bill.

Nobody missed me? That’s ok. I’m so busy reading articles about marxism and all that crap. hey, back later.

Speaking of missing, haven’t seen Neil chime in for quite some time.

He was finally able to retire after making it big on ConAgra (seller of Orville Redenbacher) stock.

I found her on facebook a while back and it appears she’s not the type that appreciates being found in real life.

Not that I blame her. Kind of creepy to go out looking for her “in real life” unless she specifically gave you her contact information for that purpose. Which I can’t imagine her doing.

I must’ve missed something. Why’d Oly quit posting? Hope it’s just a hiatus. She’s one of the most entertaining posters in here by far.

packman stole my ConAgra joke about Neil!

OKOK, great minds can run in the same channels

Kind of creepy to go out looking for her “in real life” unless she specifically gave you her contact information for that purpose. Which I can’t imagine her doing.

Hey, I’m a curious guy, and have no problem with everyone having my real ID, obviously. I just figured since she was making email addresses public, she must not be too stressed about it either. About that time she said she had the stalker problem (and said it wasn’t me), but apparently that made her want to keep a lower profile. I haven’t tried to contact her since then, but I see that her FB profile is no longer publicly visible.

Obviously :-).

Not very well. She’s headed for prison, nice boobs or not.

Good mythic imagery. And there’s (almost) nothing more phallic than a geoduck, so good symbolism too. (I figured she’s just hooked up with a new toyboy. But maybe you’re saying the same thing, only more poetically.)

“more currency in the workplace”

John, I ‘wish’ it was only that. In truth, just -not- knowing the score from last night’s game can be a real hinderance to your career.

Sadly I’ve even noted that in my Guard unit. No amount of expertise in any ‘other’ field can offset that deficit!

Wouldn’t it be more efficient for those who claim to hold a huge storage vault full of gold to sell it off to Chindian households and never tell anybody? If the vault is secret, who would ever know the difference?

That would work so long as no one ever was able to demand delivery. Sort of like Fort Knox or wherever the US “gold stockpile” is supposed to be these days.

On the other hand, if people wanted actual gold in preference to promises that “we are keeping it for you”, that plan would fall apart pretty quickly.

We put it on as a play in our high school 1968.

I’ll be happy to send you all of my net owned dollars.

Hmm, that seems to be approximately -$40,000, as I owe that much more in dollars than I have in the same currency.

Where do I send my debt? I’ll even pay shipping!

“I’ll even pay shipping!”

Thx for the late night laugh. I refer you towards the bottom of the Bits Bucket for Sammy Schadenfreude’s lurid SNL skit.

This is at the intersection of Campbell Ave. and Grant Rd., which is one of Tucson’s busiest.

I remember that shop!

Was that Tucson Cyclery?

It was Catalina Bicycle Shop.

It was Catalina Bicycle Shop.

That’s right. God, I was racking my brain - and it doesn’t really need the abuse - thanks!

If you get a flat tire every now and then do you give up driving?

What you describe happened to me with my capital one card this year. The due date was on a Saturday. I paid it electronically at 5:30pm or something like that. It posted on Monday and so I got the late charge and the interest charge. I called up the 800 number, spent 5 minutes on the phone, the rep said yeah, sorry about that, waived the fees and interest. She said with due dates on Saturdays, the payment has to be made by 3pm to count as that day as opposed to 8pm for weekdays.

As for the “deadbeat” charge, there are about 1000 credit card options out there. If my cards charge me that, I will take my business to ones that don’t. And that will take another 5-10 minutes to do.

So spending less than 30 minutes a year to accumulate thousands of dollars in tax-free benefits….hmmmm….yeah I think I’ll stick to using the credit cards and forgo the debit cards.

LOL, I do usually do exactly what Spokane said. Hmm…

FWIW I used to do the same. This year I was car shopping, I decided to get a new car for once in my life. I bought a 2009 Mariner, it’s a Ford product, and I love it.
The only other vehicle I was considering was an extended cab Dodge Dakota, but you probably wouldn’t want that as a kiddie/mom mobile.

I work with guys mainly, they told me my new car was “fem”, but it could be the color - light blue. It’s basically a tricked out Ford Escape. The mpg is decent and I’ve had to brake hard a couple times for accident avoidance - no fishtailing or skidding. Also its pickup is pretty good merging onto the highway even though I opted for the 4 cylinder rather than the 6.

If you get her a new car, will you put a big red bow atop?

I buy 2 year old Hondas or Acuras and get the 100,000 mile extended Warranty which you can negotiate down to around 1,000-1,500 and now you have another 60-70k knowing you are not going to have an expensive repair. I almost always pass other these warranty type deals but feel this is a decent piece of mind investment when it is the dealer warranty and you know your local dealer….

I’ve done both. Went the brand new route one time (2 cars ago). I decided I’m perfectly happy with 1 to 2 year old used with low mileage.

.
A year ago… I bought a 2 yr old Honda S2000 (convertible sports car.. similar to the BMW Z4) with 24,0000 miles on it from a local Honda dealer.

“Negotiated” with the sales dept… took ALL DAY. Went through all of the cliche sales tactics… but held my ground. This was just on the cusp of the great sag in car sales.. but it was kinda slow.. even back then.

I traded in a total hunk of junk car that I didn’t feel OK selling to someone else. Got top dollar for it.. after insisting on it.

Bought the extended warranty… after all negotiations.. cost me about $1,000. So far, I used it twice.. for a couple of little things. My main concern was if I had a problem w/ the automatic convertible top. I know those are very expensive to fix. Warranty (Honda warranty.. not some bogus 3rd party scam shop warranty) is good until mid-2012. I don’t put a lot of miles on it.. since I usually just drive locally.. so I’m covered until then.

I get sooooo much enjoyment driving this car… it is unbelieveable. I imagine that nowadays.. there are even BETTER DEALS… but you have to be a TOUGH NEGOTIATOR… or bring with you.. someone who is!!!

I have a ‘97 Volvo wagon (bought used 4 years ago, before I was totin’ a lil’ critter in the back seat).

It’s been a durable, dependable car, but the Chicago life is hard on any vehicle.

I bought 3 new and 3 used in my lifetime. Two of my new vehicles were kept for a long, long time with many, many ski trip miles w/minimal costs beyond maintenance. I always thought that happened because I was anal retentive about that maintenance schedule. Two of my 3 used cars had issues. Perhaps the earlier owners were not so loving or caring about longevity? My current car was purchased brand new. It’s 5 years old and I’ve had no payment for 18 mos now. It should easily go another 5 years. It still runs like its brand new. By the time my kids graduate it’ll be time for the 3rd parent car in their lifetime. ($39k/20 years isn’t doing too badly and maybe I’ll stretch the longevity on my current one even longer as a 3rd vehicle.)

Ditto. Love writing checks. I feel like I have more control over my finances that way.

I feel much the same. I pay all my bills by check because I know that when the banks and creditors get most everyone paying online, they’ll start charging a fee for online payment.

It’s foolish of me because, as my friend points out, I’m already paying a fee - postage - but I can’t help it, it’s idiosyncratic at this point, I guess.

So, ya’ll have holdouts like me and eastcoaster to thank that your bank hasn’t started imposing a 10-cent “online processing fee” yet.

I don’t know about the Mark of the Beast, but can foresee a cashless society being close at hand. A few years ago the Pentagon came up with a scheme called Total Information Awareness that was beyond Orwellian - luckily, enough of the sheeple protested that the office pushing the scheme was supposedly shut down. A cashless society would allow Big Brother to strip away any vestige of privacy from the sheeple and to track their every movement and transaction. Watch for such a scheme to be touted as a way to eliminate tax evasion and financial crimes.

That’s getting to be fairly common, we use that system for payments on account where I work. In a retail setting it really helps reduce or eliminate NSF checks.

So much for float. Think about the millions upon millions of checks that no longer need to fly around the country on airplanes at night. The whole system of paper check is mind boggling.

I had forgotten - it’s not a rev. to the UCC but a new Fed. statute.

Where’s polly when we need her?