Monday, August 3, 2009

SAR #9214

The 'long run' is here.

3-Card Monte: Because 10 different states 'regulated' AIG's various entities, it was able to move assets from healthy units to questionable ones ahead of the arrival of the examiners.

The Idea: The single-payer system is not a “government-run health care system” but a health insurance system where at least 90% of expenditures go for actual healthcare, not to paperwork and profits.

The Best Is Yet To Be: In one Pittsburg, CA zip code only 15 of 530 bank owned REOs are on the market. Why?

Stopped Clock: Obama says that it will take "many more months" for the this mess to go away. That's once. How long before he's right again?

Back to the Future: The government's plan to bail out car dealers, reduce auto manufacturers' inventories and put a shine on the nascent recovery is but another attempt to return to the status quo of ever increasing consumer debt. Makes one wonder how much I can get for my old TV...

Benefit vs. Dole: Unemployment benefits now stretch to 79 weeks in 24 states and 46 - 72 weeks in others. But wait, there's more: Another extension is likely.

Old Faithful: Seven of Germany's 17 nuclear reactors failed to provide any electricity during July due to "technical breakdowns." Cheap, reliable power. Except when it's not.

Perspective: Some say we shouldn't worry about things like the housing bust or the crash in commercial construction, because consumer spending makes up 70% of US GDP. Yeah. But somebody has to produce something, or none of the rest of us can afford to get our hair cut. Even in a faith-based economy someone's got to pray.

Los Angeles Times: 1 in 10 Californians with a home loan is now in default. Does the governor's mansion have a mortgage?

Concentrate! If you can't snag a job with Goldman Sachs, the government is hiring "internment/resettlement specialists." And you get to wear body armour!

Short Version: "The US economy is on life support." That's the long version, too.

Minimized Wages: In the last year, worker's pay - except at Goldman Sachs - has grown the least of any similar period on record.

Contingency Planning: The US Navy is preparing to adjust to a world of rapidly diminishing sea ice, melting glaciers, rising sea levels, and increased storm severity - the likely consequences of global climate change. CO2 levels in the atmosphere are rising about 25% faster than the IPCC predicted only 2 years ago, and are on track to reach 450 ppm by 2040 instead of the hoped-for 60 years later.

Multiple Choice: Why do we need insurance companies? (a) They are a pre-existing condition. (b) Profits. (c) PAC contributions. (d) To reduce crowding at medical facilities.

More Mooring: Ten percent of the world's merchant ships are parked somewhere, waiting for business. Having sailors at home so long is hard on marriages.

Porn O'Graph: It's the GDP, stupid.


Unknown said...

"Does the [CA] governor's mansion have a mortgage?"

Arizona has the same idea! [not "The Onion"; from "The Arizona Republic"]

"Call it a sign of desperate times: Arizona Legislators are considering selling the House and Senate buildings where they've conducted state business for more than 50 years."

"Dozens of other state properties also may be sold as the state government faces its worst financial crisis in a generation, if not ever. The plan isn't to liquidate state assets, though. Instead, officials hope to sell the properties and then lease them back over several years before assuming ownership again. The complex financial transaction would allow government services to continue without interruption while giving the state a fast infusion of as much as $735 million, according to Capitol projections."

Charles Kingsley Michaelson, III said...

Steve - Ah, been there: July 30th SAR: Redundancy: Arizona legislators, having looked in the mirror, have decided to sell the House and Senate buildings, too.

Anonymous said...

Re: "The best is yet to be" The Zip Code is for Pittsburg, CA. Not Pittsburgh, PA.

Charles Kingsley Michaelson, III said...

Anony - Thanks for the correction - I suffer from the curse of cognitive geography...

mistah charley, ph.d. said...

Recently it crossed my mind to do the patriotic thing and let my fellow citizens assist me in putting a NEW CAR! on the road - but alas, although my pre-owned car in question has a retail value, even under the rosiest of specifications, well below the cash-for-clunkers subsidy, it is drinks gasoline too moderately to qualify.

Who knows if it's good or bad?

Charles Kingsley Michaelson, III said...

mistah charley - Ah, the old problem of the ethics and morals of the commons.

Demetrius said...

Insurances, there are companies that take the money, and pay out on claims. There are others, often owned by finance or investment merchants, who take the money, but do not pay out on claims, because the money is an income stream to be used for leverage elsewhere. The problem these days is telling the difference.

Anonymous said...

The Idea: The single-payer system is not a “government-run health care system” but a health insurance system where at least 90% of expenditures go for actual healthcare, not to paperwork and profits.

Would that "90% of expenditures go for actual healthcare" include over prescribed drugs as in:

That is just for starters. How about the operations, treatments, therapies prescribed by the Medical Community? Are they just profit generators or really efficacious medicine?

So, in a healthcare debate to assume American Medicine is ALL GOOD if only it could be afforded is naive, to say the least. Think again, please! Do some research and reading about American Medicine.

Keith Hazelton Anecdotal Economist said...

Re: Perspective...

Umm, showing GDP alone is like showing a corporation's Income Statement without showing the Balance Sheet and the Cash Flow Statement.

Yes, GDP hasn't faltered significantly, and yes, RE and NRE Investment are much smaller pieces of the pie, but by failing to look at the other measures (bal sheet and cash flow) you are making an erroneous assumption that Consumer activity can/will continue at a constant, or even growing, rate.

But, when we look at consumers' balance sheets, and cash flows, a different, and far more negative, picture emerges. Consumers have little additional borrowing capacity, and, in fact, agressively are attempting to delever by paying down debt (especially baby boomers who now have retirement savings religion). The asset side has been decimated by real estate and stock market declines, but the debts remain.

On the cash flow side, unemployed and under-employed individuals, and those who are afraid they may become un-/under-employed, make less than robust consumers.

Since the Balance Sheets and Cash Flow Statements currently are distressed, it eventually (as it aslready has), impact the GDP Income Statement. Counting on consumer activity to remain 70+% in the next decade simply is not sustainable.

Charles Kingsley Michaelson, III said...

AE: No, no. You went to the right pew. I think that depending on Consumer Spending to carry the economy is foolhardy at best and more likely delusional - for the reasons you cite. Sometimes the point is to reflect the foolishness of the groups delusions.

Charles Kingsley Michaelson, III said...

Anony 231PM - Reforming the entire American health care system at one swell foop is a non-starter. Each of us has our own favorite parts we'd like to see reformed (I'm old enough to be a victim of repeated unnecessary tests).

But if we've got to start with a baby step, my favorite would be the "public option" - give the for-profit insurers some competition and give those that can't get coverage elsewhere some coverage. I hope that a reasonable public insurance corportaion would work well enough to spur futher changes.

Yeah, delusional.