Thursday, May 21, 2009

SAR #9141

Instead of minimum wages,

why don't we give maximum wages a try?

Governance 101: California is a fine example of what happens when you don't supervise the children. Democracy only works with an educated, rational electorate operating within a functional legislative structure. This is the future Nyquist & the GOP envision - government with no money. California Dreaming indeed.

Hang-Up: Corporate earnings are down over 30%, the markets are up over 30%. Sounds like another crank call.

Proud to be an American? If you are not sure waterboarding is torture, what about using a razor to make small slashes on a prisoner's genitals? Once a month. For years. And then dropping all charges and releasing the subject. After he confessed, of course. See, torture works.

Charterhouse: Pundits and stock hustlers claim the rally means the recession is over and you should buy stocks now. Any stocks, doesn't matter what, they're all going up. Or maybe not, for the chart shows the 52-week moving average is above the current S&P and that predicts more bearishness. Of course, I've got a seed packet that predicts I've got tomatoes by now, too.

Capitulation: Congress is letting the insurance companies, the pharmaceuticals, the for-profit hospitals and the medical suppliers write the healthcare legislation. It will be a rejection of the idea of a single payer health care system and a re-enforcement of health-for-profit by an insurance monopoly run 50 layered complexity of enrichment of the entrenched. More business as usual.

Toll'd Ya: In 2Q09, revenues for Toll Brothers, the largest US luxury home builder, dropped 51%, y/y.

Write if You Get Work: Despite massive "quantitative easing" and their continuing AAA rating from Fitch and Moody's, the British have managed to fall deeply into a deflationary cycle - ahead of the rest of the world. We wish them well as they enter the abyss - and ask that they drop us a postcard so we'll know what we can expect.

Six of One...: Bankers say that if they cannot gouge the poor they will be forced to gouge the rich - especially you tightwads who pay off the balance every month. One way or another they intend to get their pound or two of flesh.

Cart, Horse, Cart: The price of crude rose to near $60 a barrel as investors speculators drove stock markets higher on the unproven theory the US recession is ending easing. The higher prices will kill the recovery. Then the price of crude oil will rise as....

Revisionist Future: New analysis shows that by 2100 global warming will be twice the IPCC estimate, reaching 5.2ºC instead of a comfy 2.4º. Even this may understate the problem because some feedbacks, such as the melting of the permafrost and the subsequent release of methane) were not included. Don't panic yet, wait until it gets really, really scary. By the way, 5.2ºC is about 10ºF. Okay, panic.

Amazing Stories #628. Deere expects world-wide construction and forestry equipment sales to decline 42% and smaller utility tractors and turf equipment to fall 20%. So their stock goes up. Twilight zone.

The Irregulators: . The Obama administration is planning an entirely brand new regulatory body to monitor consumer financial products, like mortgages and credit cards, to protect the consumer from abject stupidity, credulity, and gullibility.

Alternative Universe: The Pension Benefit Guaranty Corporation resembles nothing so much as the Social Security Trust Fund. There is no money in either. PBGC is about $33 billion in the hole now, with GM and Chrysler careening down the street with $77 billion in underfunded pensions and $42 billion in totally unfunded pensions. (Others say the shortfall is only $10 billion, but that's not dramatic enough anymore.) Taxpayer? Is there a taxpayer in the house?

Porn O'Graph: Real debt, real wealth, real depressing.


aitrader said...

By the by, I think you meant buy not by or bye stocks.

CKMichaelson said...

airtrader - Right you are, 'buy' was the intended, but 'bye' is probably a better choice.

Kristine said...

re: porn o'graph...pretty enlightening. I've been looking for a graph that shows this for awhile. Do you have a source? Thanks

CKMichaelson said...

Kristine - the source is the Federal Reserve Bank of SanFrancisco, and the economics research letter is


Kristine said...

Thanks much!

The Anecdotal Economist said...

Re: Porn O'Graph...

Bringing household debt down to the long-term trendline certainly is one option, but it's the ugly, painful, messy one fraught with home foreclosures, auto repossessions, massive unemployment, personal and business bankruptcies and numerous bank failures as the overall levels of indebtedness are beaten down to sustainable levels.

On the other hand, suppose we merely inflate everything else (home values, stock market values and personal incomes) to the point the existing level of household debt is completely sustainable?

Problem solved...Wait, what? They tried that in Zimbabwe, Argentina, Weimar Germany?