Monday, November 2, 2015
Turns out that if you give sick people health insurance, they use it. Bummer.
Humble Pie: In an act of either confession or contrition, SF Fed President John Williams says that our persistent low interest rates may reflect a serious and lasting change in the US economy that does not fit with any of the explanations or expectations of economists or central bankers. In other words, the guys at the Fed don't know what's going on or what to do about it. The ECB's Mario Draghi agrees and cautions that “the slowdown is probably not temporary.” They're going to be sent to bed without supper.
Secrets Here And There: When our gang got around to telling us that the US “would begin direct action” against ISIS in Syria, “would begin” was somewhat disingenuous – some US boots have been on the ground there for some months. And if they were doing things right, it wasn't a secret to ISIS, just us.
Sad, But True: There is no free lunch. “Whether it’s the lotto or the stock broker or the fantasy sports leagues or Las Vegas, someone is always ready to take advantage of your desire for a free lunch. The sooner you start picking up the tab for your own meals, the better off you will be.”
Reinventing the Wheel: The folks at the Fed claim they are looking for some way to avoid another taxpayer bailout of the big investment banks. Couple of points: The taxpayers did not have to bail them out the last time – there was no legal nor moral reason to do so - the bailout was an enormous fraud. The way to avoid bailing out the TBTF banks is called Glass–Steagall, or used to be. Reinstating Glass–Steagall and putting a few dozen big bank senior officers in jail for felony fraud should work quite nicely. And at absolutely no cost to 99% of taxpayers. Count it as a lesson learned. Twice.
Prey Day Lending: There are companies out there which, apparently legally, con retired soldiers into selling part their pensions in return for small loans. Like $5,000 in return for 60 monthly payments of $510 from their pensions. That's $30,600, and is equal to about a 43% interest rate. Someone ought to be protecting the ones that have been doing the serving.
Thinking On Things: Supply and demand is supposedly the underlying basis for our economy. Except in the housing market. In the housing market, demand drives up the price and drives down the supply as people hold their houses off the market expecting bigger profits later on. And when potential buyers see prices rising, they hurry to buy and drive the prices up before prices are driven even higher. So, higher prices increase demand, just the opposite of what economists tell us should happen. Either they don't know what they're talking about, or we are not doing things right. Or both.
Perfection: In the third quarter US GDP grew (if that's the term for it) at a 1.5% annual rate, down sharply from the 3.9% we're supposed to pretend was reached in the second quarter. For the first three quarters of the year GDP has risen at a less than zippy 2.0% annual rate. Inflation is conspicuously absent, so the Fed will keep fighting it. They're getting quite good at solving the wrong problem.
Rules Is Rules: Back in the day there were rules prohibiting the use of religious organizations as cover for espionage. That was before Bush/Cheney. The good news is their Defense Department did not suborn a real Christian NGO; the bad news is they created and funded one out of the basement of the Pentagon and recruited God to spy on North Korea for them. And that's the Gospel.
Missing Inaction: Eight years ago the world's central banks began lowering interest rates to zero in hopes of stimulating the economy. If it doesn't work pretty soon, maybe they'll try negative rates. Oh, wait... Either the economy is failing, or the economists are.
Shelling Out: Shell's third quarter earnings took big hits from continuing low oil prices, the write-off of the Arctic adventure, and a suspension of development in a Canadian oil sands project. They also wrote off $2.3 billion as the cost of dumping shale oil prospects in the US.
Don't Touch That Dial: Microsoft knows you want Windows 10, so it is going to automatically download to your Windows 7 or 8 machine. Say goodnight, Gracie.
Porn O'Graph: The grossest product in US GDP is healthcare.
Posted by Charles Kingsley Michaelson, III at 7:27 AM