Tuesday, August 24, 2010

SAR #10236

If the economy is “on track”, where's the track taking us?

Petraeus' Plan:  “Money is one of the primary weapons used by warfighters to achieve successful mission results...”   according the the US Army Center for Army Lessons Learned.

Pace Yourself:   The breathless press excitedly scream that each of us now owes $43,000 as our part of the national debt.  Okay, that part's right. But it is not all due this week.  Over the next thirty years that works out to a more manageable $1,500 a year plus another $1,200 in interest (30 year treasuries pay about 2.7% these days).  Not quite so scary.  Unemployment lasting forever is a lot scarier to most of us.

New & Improved:  Consumer Metrics Institute's 91-Day Trailing Index foresees a 5.25% drop in GDP & the stock market – not the 2.45% increase that is the official estimate.  It'll be interesting to see how this works out, huh?

Briefing:  Here's the “net neutrality' issue:  The multi-tiered service (pay to play) would let the providers - ATT, Google, Verizon – decide which blogs and websites were rapidly available, which were slow to load, and which you simply cannot reach.   It's called censorship for profit, with the people's rights challenging the corporations' profits.  We've seen this movie before.

Brain Dead:  If you can buy money for 3% and sell it for 15%, how much shipping and handling should you charge?  (a) as much as you can get away with. (b) whack 'em again, Harry.

Commuter Special:  The Beijing-Tibet expressway leading into Beijing is experiencing a 62 mile long traffic jam that has so far lasted 9 days. Surpassing the US in so many ways.

One More Time:  Income disparities between rich and poor rise and fall with the rise and fall of financial regulation/deregulation and instability in the financial system.  That's another way of saying that when times get tough, the rich make out like bandits.  In 1928 the top 10% garnered 49% of total income. In 2007 it was... 49%.  My, my.  The rich get richer and the poor stay in their place, or else.

Warning:   Whatever you do, do not put your money in the stock market – we're running out of bigger fools.

Road Closed:   After being told for all our lives that home ownership was the path to the American Dream, now they're telling us we misunderstood them – our attempt to reach the American Dream through home ownership was designed to help the rich attain their dreams.

Match 'em:  In 2009 there were 4,644 civilian deaths in Iraq  (no, I don't know what 'civilian' means in this context).   There were over 16,000 in Venezuela that year.  Seems like there were nearly that many in Juarez last weekend.  No, it's not all Caesar’s fault.

One Born Every Minute:  People who have just bought houses believe house prices will rise 10% a year for the next decade.  And they'll be rich....

Back of the Envelope:  With all of the ho-ha about the small investor leaving stocks and buying bonds, I squinted at the graphic and deduced that in the last 4 years $300 billion has been “pulled out” of stocks, while $650 billion has been “poured into bonds”.  I think there's a little less than meets the eye to this story.


Anonymous said...

RE: Pace Yourself

Unfortunately, that number was for all 300 million of us and since most of that 300 million pay no taxes the number for the tax paying public is much higher than your comment implies. And... why should any of us be happy that our government has spent our money for next 30 years. It's an abomination!

Anonymous said...

But we'll have the memories... Vietnam, Iraq, Iraq again, Afghanistan, all the stuff the CIA did. The bailouts. Ah, you can't take that awya from us. It's already been taken.

Billy T.

OkieLawyer said...

@ Anonymous 10:29pm:

...since most of that 300 million pay no taxes...

This is actually a lie spread by the Tax Foundation and Libertarians (OK, same difference....). What they were careful to say was ... that only half the population (which is different from the working population...) pays no INCOME tax. But wage earners up to ~$104,000 per year pay payroll taxes instead of income taxes.

See the difference? It's a cute way of lying.

In any case, the richest should pay the lion's share of the taxes, especially since under the Pareto Principle they make the lion's share of the income and hold the lion's share of the wealth.


Re: One More Time

Another salient fact is that the wealthy make money on the way up or on the way down. As prices deflate, each dollar that you hold has more purchasing power. Smart investors also know how to invest "net negative" when the market turns bearish, again, making money when the market is going down; AND if you know what you are doing, you actually can make more money on the way down than on the way up.

Anonymous said...


I understand that. In 2007 146 million people worked. I suspect that number is what? 8 - 10 million smaller now.

The point was that the 44K number is not per taxpayer number, but per capita.

OSR said...

Back of the Envelope: Sounds right to me. After all, it was retail investors and their 401(k)s that funded the last two bubbbles. Regardless, you can have yourself a good look at the ICI's site which shows weekly cash flows . http://www.ici.org/research#statistics