Consensus usually indicates a serious mistake.
Lesson, What Lesson? GM – 61% owned by We the People - is buying AmeriCredit for $3.5 billion in order to give un-creditworthy customers a chance to end up in hock to them. It's part of their plan to expand their market by 'qualifying' buyers who haven't the resources to buy a car. Sound familiar? GM once owned GMAC which owned DiTech which was a giant in the sub-prime mortgage business. GMAC – through it's subsidiary Ally Financial – is into Uncle Sam for over $50 billion. How much do you think we'll lose on this new deal?
House Address: Sales of existing houses fell only 5.1% in June, y/y, mostly because of the lingering effects of the buy-a-house bribery. Available inventory was up 4.7% y/y at nearly 9 million houses. Median prices were up 1% y/y.
Forward, No? The future will resemble the present, only more so, right? Nope.
Myth: “Investors make estimates about all the potential profits down the road of a particular company, and price the potential growth or decline in a stock accordingly.” Maybe once upon a time, but today there are no investors, only speculators, gamblers. A stock is priced solely on the bigger fool theory, grounded in the delusional belief that the days of cheap credit continues. It does not; half the credit available in 2007 has disappeared and with it all hope for our credit-based economy.
Facts Not In Evidence: The shared delusion that China is “stuck with US treasuries” and must continue to support US fiscal foolishness ignores China's slow, stealthy but certain shift to strategic commodities, industries, and assured access to primary resources. While we may be able to fool ourselves, fooling the Chinese takes more subtlety.
We Have A Winner: The 'flation battle is over. Deflation has won on points.
Social Security's Bottom Line: One out of three Americans has no retirement savings. Fully half of all Americans have less than $2,000 set aside for retirement. Tell me again about doing away with Social Security or cutting the funding levels.
Smoke, No Fire: Unemployment claims are stuck at 460,000 again this week. Seasonally adjusted insured unemployment remains at the 4.5 million level. Congress finally got around to extending the unemployment benefits for the long-term jobless.
The Odds: When they tell you about the miracle of shale gas, remember that the “100 year supply” is what's possible – as in having a 10% chance of happening. The supply that's at least 50/50 probable only adds up to a 25 year supply. Salvation ain't what it used to be.
Inertia: We've already put enough CO2 in the atmosphere to guarantee a 3 foot rise in sea level by mid-century – even if we completely stopped emitting carbon dioxide today. But it wouldn't stop there, for in the half-century after that the effects of the carbon we've already put into the skies will keep on warming the earth and melting the ice and heating the seas, so the rise will be 6 to 9 feet by 2100. And more after that. But we are not going to stop, today or any day soon, so these are modest estimates. The gift that goes on giving. For centuries.
Oops... Governor Jindal, in an attempt to save Louisianan's oyster beds, had giant valves on the Mississippi opened to flush BP's oil back out to sea. Worked to some degree, but they forgot that oysters don't tolerate fresh water – the full impact of the oyster die-offs will last for years, far longer than the damage from the oil would have.
Porn O'Graph: Lost and Found.
5 comments:
Re Social Security - Jonathan Schwarz has a good "I predicted it" post, with quotes from 2007 and 2005, at
http://www.tinyrevolution.com/mt/archives/003343.html
RE: Smoke, No Fire
Unemployment insurance is paid 50-50 by employee and employer. Extending benefits once that money runs out is no longer unemployment insurance, it is welfare. By not holding true to the unemployment insurance programs real aim we are creating another fuzzy, incoherent government program.
Better to create a separate welfare program.
RBM
RBM - I don't believe “Unemployment insurance is paid 50-50 by employee and employer.” The Federal Unemployment Tax Act of 1939 imposes a 6.2% tax on employers on the first $7,000 in wages, with 5.4% of that “forgiven”, so the actual tax on employers (none on employees) is effectively $56 per employee per year ( 6.2%-5.4%= 0.8% x $7,000 = $56.). [And some states may have other formulas on top of this, but to my knowledge none involve taxing the employee.]
But you are right that any amount paid in “extended benefits” beyond the period established by the states (generlly 26 weeks, I think), is fully funded by tax receipts other than unemployment taxes. And yes, it is welfare. But in that this welfare is delivered through the unemployment benefits mechanism and is (at least remotely) tied to having worked, I don't see the harm in calling it extended unemployment compensation.
And creating a new "separate welfare program" in the face of Republican hostility to the lazy, shiftless unemployed would be a non-starter.
ckm
According to the last USGS item I saw Tropical Storm Bonnie is heading in the direction of New Orleans. Water water everywhere with a dash of oil courtesy of the house.
Hi!
Nice to see you back in action! I hope you had a very restful vacation.
My blog is dormant right now but I thought I would pass on a couple of links that you might be interested in seeing.
1) India develops $35 touch-screen laptop computer for education. This was reported in the Canadian Financial Post today but I can't find anything about it at CNET. Rather odd.
Google on "Financial Post Canada India develops world's cheapest 'laptop' at $35"
2) From CNET today Jul 23 : Google on "Report: NSA, Pentagon officials linked to child porn". Not all officials were prosecuted.
3) And I'm certain you will like this chart from Zero Hedge today : "ECRI Leading Indicator Breaches Critical -10 Threshold, Hits -10.5" which is probably the best indicator of a double dip.
May all beneficial wishes come true in beneficial ways!
Namke von Federlein
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