Where you stand determines what you see.
Get Shorty: Bill Gross/PIMCO continues to short US treasuries and now has a $10 billion exposure. He is holding $89 billion (37% of assets) in cash. Either Gross expects the complete collapse of the bond market, or is anticipating rapid inflation in the near term. It's all Greek to me.
Fear Itself: A Delta pilot kicked two Muslim men off his plane. The two were on their way to a conference on religious toleration.
Burnout: Protests, street fighting and brutal government repression continue not only in Bahrain, which the US ignores to please the Saudis, but also in Syria, Yemen and Libya. Yeah, remember Libya? Thought I'd mention it, because the media decided we'd lost interest.
Trojan Horse: The EU has decided that another bailout is the answer for the failed Greek bailout. It will not succeed - austerity does not work and the Greek debt burden is unsustainable. Meanwhile Ireland cheerfully admits it is broke and cannot (and thus will not) pay off its debts. And Portugal and Spain are watching, closely, what accommodations the EU/IMF and banks make.
Basics: How did it go so wrong? It had a lot of help from people who continue to make a lot of money off the trouble they started.
Swimming Hole: A new survey shows that US housing just had its worst quarter since 2008, with 75% of US houses losing value y/y and 28.4% of mortgaged houses underwater – a new record. Two million houses are in the foreclosure process and another 1.5 million seriously delinquent ones will soon join them in driving the price of houses ever further downward. Prices have now fallen for 57 consecutive months.
Clip & Save: “Experts: Gas prices to drop 50 cents by summer” Tape this one on the dash.
Close Your Eyes and Open Your Mouth: Laws pending in Iowa, Minnesota and Florida would make it a crime to film or photograph farms and farm operations. You don't wanna know and they most certainly don't want you to.
Predation and Democracy: Extrajudicial killing – execution, assassination, murder, pick a description – is becoming a standard operating procedure for US commanders. The specific tools range from Seal Team Six to CIA Special Ops to Special Forces and – most frequently – unmanned drones. The question about the legality of these operations, both on and more specifically off the battlefield needs to be addressed. There are about 450 different UAVs being made today. They will spread. How will we who now unleash our extrajudicial killers with impunity, how will we be treated in the future, as things unravel?
Wonderland: In the strange world of American economics, the fact tht more people are going further in debt is see “evidence” of greater willingness of consumers to borrow as “evidence” of economic improvement. Think on that a while.
Takeaway: The U.S. college education system as the largest scam in U.S. history. It is all about debt and educates mostly through the school of hard knocks.
The Hart of the Matter: War is changing. There will still be a need for a small conventional army and the Navy's carrier task forces are not going to slink away, but their missions will. Civilization's future enemies will be a class of international criminals, not battalions of soldiers. The US made a mistake in declaring a “War on Terror”, for it led us to believe that the military designed for the Cold War was somehow relevant to the task of apprehending these criminals. It is time our Defense strategy morphed not into General Petraeus' counterinsurgency force, but into highly sophisticated SWAT teams backed by effective technical surveillance and human intelligence – armed with arrest warrants.
Cheops: “Current levels of margin debt are now consistent with the Nasdaq bubble and just shy of the levels seen before the credit crisis.” Chasing up the prices of stocks and commodities with borrowed money works until it doesn't.
Porn O'Graph: I think I see the problem, Ollie! This bucket's got a hole in it.
4 comments:
SWAT teams with warrants? The only warrants that will ever be involved in Pentagon operations will be those that pilot the helicopters.
Our new team of SWATers is doing a better job of meeting out misery to foreigners. Special Weapons At Treasury Team "TurboTax" is making sure of that.
CKM,
I disagree with the link claiming that college is a "scam" but would say that this is an industry in which market competition does not seem to produce lower prices. Brad DeLong has been writing about this . . . using the example of a super high-cost liberal arts college (May 6):
"I think Swarthmore will do absolutely fine. If the willingness to pay for higher education drops significantly, they may have to abandon their commitment to need-blind admissions if they want to maintain their current business model, but I don't think that will happen--for them. Swarthmore, you see, is selling five things to its students and their parents:
1. A first-class set of discussion leaders as people read the books and learn the subjects to put a capstone on their education.
2. A first-class set of peers to serve as sounding boards, educators, and companions in that educational task.
3. A safe, protected, but stimulating environment in which the students can try out being an adult.
4. A comfortable upper-middle class lifestyle for four years.
5. The creation of a personal social network that spans some of the smartest and best-educated Americans of their cohort--people with the strongest work ethic around--who will serve as friends and friends of friends and contacts and contacts of contacts throughout their life.
All five of these strike me as rather valuable. There is the question of why other colleges haven't undercut Swarthmore--haven't offered the same five things for less--but until you attract the super-750 SAT students you cannot offer them, and no college that attracts the super-750 students seems in any hurry to greatly expand and take a larger share of the market by expanding and underpricing its peers."
Anony 11.27 - I rather agree 'All five of these strike me as rather valuable." But Swarthmore or St Johns is not 'college' when we are talking about college. That may be what college should be like and what college should be about ("trying out ways to be an adult") but mostly it is not.
Mostly college is overpriced babysitting which seduces parents into thinking their kid is going to make a living with a major in communication sciences or advanced interpretive dance or any of a thousand more "disciplines." The tuitions are unrelated to the value of the education and/or to the value of the degree in real dollars.
I've another item in tomorrow's SAR on this subject... For while I think most intelligent young people should be exposed to a liberal arts education, I would maintain that job training - which is what most students think they are getting - should take place in a different setting.
ckm
RE: Predation and Democracy: Seems inevitable that eventually someone will manage to pilot a drone(s), carrying a dirty warhead perhaps, into some "high value" target in the U.S. If the "police-state lite" Patriot Act resulted from 9/11 I shudder to think what we will allow (to be safe of course) when our own hi-tech weaponry is used against us.
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