Archive for November, 2010

Interesting Thing About Interest Rates (November 29, 2010)

Posted in Banks and Banking System, Economics, Federal Reserve, Inflation on November 29, 2010 by

. . .

K         “It really is hard to get rich when they are paying .000000001 percent per annum interest.”

J          “Unless it is compounded every second.”

K         “We are told that we should save, yet there is no economic incentive.  There is no interest when there is no interest.  Senior citizens who counted on a five to ten percent interest rate for their money to fund their retirements are being flat lined by the flat line interest rates.”

J          “Some of the negative economic impact of the contemporary economic excess is being inflicted on the current generation.  Doesn’t seem unfair.  Although there is more saving, only a thin sliver of the populace is saving because there is no other safe haven for the money.  The money is just parked.  Another problem may be brewing.  The banks are given free money by the federal government and are loaning it at positive but low rates to a few apparently credit-worthy borrowers.  What will happen in three years when interest rates are forced to go up and the rate of return on the current mortgages and deeds of trust is less sexy?  Will the banks try to call the loans early?  I assume the banks will enforce provisions precluding assignment of the obligations to get them off the books as quickly as possible.”

K         “They will find a way.  Some astute homeowners will secure a low interest rate mortgage and use the funds to invest in savings accounts that should start paying substantial interest rates.  That stratagem may be the only way to ride rising interest rates in the safest investments in a broken economy.  With so much money in the system and an unresponsive economy, we will see inflation.  Recent purchases of Treasury securities suggest that the smart money anticipates inflation.  When bread rises to $100.00 a loaf, the attendant changes in the economy will lead to interest on your bread rising from the current 00.001%.”

J          “Inflation will make all the current debt much less of an expense in real economic terms.  Inflation will expunge debt.”

K         “Anyone who saves is spent.”

. . .

Bumper stickers of the week:

Paying the highest rate allowed by law (but nothing is allowed?)

Anyone who saves is spent

O’Bama Arming Industry (November 22, 2010)

Posted in Guns, Market Solutions, O'Bama, Society on November 22, 2010 by

. . .

G         “I made a killing.”

A         “You’ve got to love it.  A totally private sector stimulus with no government funding at all.”

G         “None.  Totally self-executing.  The frenzy built up until the 2008 election and then exploded like wildfire, like gang busters.  One guy wanted a gun, any gun and bought a .243.  But I didn’t have any more .243 rounds, so he bought a few boxes of .308s.  It didn’t matter.  It was crazy.”

A         “I assume that he could use a ball peen hammer to pound the round into the receiver.”

G         “I don’t know what he planned to do.  By the Inauguration, there was almost nothing in the store.  And then the crazy thing, last summer, guys came back with the guns and asked to sell them back.  A lot of them were in financial trouble.  One guy’s wife was still giving him a ration of grief as they walked in the store.  It was painful.  If they were unfired and still in the original box, I bought them back at half price.  I can’t resell them as factory brand new.”

A         “I followed the price rise and availability of ammo throughout that time.  .22s rounds in the 525 box went from $14.99 in Nov. of 2007 to $19.99 in Nov. of 2009 to $18.99 today.  I lost my notes for the most pivotal time in Nov. of 2008.”

G         “I can find the price.”

A         “As you saw, in early 2009, boxes of every caliber were plucked off the palates in the aisle.  They never made the shelves.  Yet there was not a great run-up in prices.  Since Nov. of 2007, large caliber ammunition has gone up 24 to 29 percent.”

G         “The big box stores keep us honest, and we keep them honest.  There are just enough small owners like the two of us still hanging on.  The real money is in the gear like the sling, case, scope, scope rings, bore sight, the whole shooting match they walk out with.  My wife always worried in the past that there is no pay check or pension or health insurance or anything for us.  We are on our own.  We manage to keep the doors open.  I still come in early if someone needs to pick something up on the way to the office.  I’ve stayed late if someone is leaving on a trip in the morning and has to have something.  Whatever it takes.”

A         “The plight of the self-unemployed.  Today, the stores are stocked with ammo, the shelves are stacked.  Even .380s and .10s are readily available.  And you’re offering rebates?”

G         “Factory rebates.  On a few select rounds, mainly shotgun shells.”

A         “There is $5.00 in-store sale across town.  $16.99 a box.  At the big box store of course.”

G         “I’ll match it.  I’ve got to match it.”

A         “And $24.99 a box at another big box store.  I’ll pay a $2.00 premium to protect the market.”

G         “I can throw in a hat, but, get this, it is not from the same manufacturer.”

A         “Anything to keep you from throwing in the hat.  I should stock up today.  Based on the increasing cost of the components, I expect the price of ammunition to explode in the near future.  Ammunition soon will cost a fortune.”

G         “I really owe my fortune to O’Bama.”

A         “With all the O’Bama signs in here, you could’ve fooled me.”

. . .

Bumper sticker of the week:

What happens when you take an arrow out of the quiver, nock it with care, draw back purposefully, release while slowly exhaling and then look up to see that you have hit the bull’s eye?

America Recycles Day, November 15 (November 15, 2010)

Posted in Energy, Environment, Gas/Fossil Fuel, Global Climate Change, Global Warming, Society on November 15, 2010 by

. . .

C         “The day is not yet as famous as Groundhog Day.”

E         “And it is not a national or a state holiday.  America Recycles Day.  Celebrated in many communities.  For over a dozen years now, they say.”

C         “November 15 is nationally recognized but is not nationally known.  The day may become the equivalent of Earth Day observed in the Fall when the bounty has been harvested.  One day to encourage us to reduce, reuse and recycle.  America Reduces, Reuses and Recycles Day is a bit much.”

E         “And there were no America Recycles Day sales inserts in the paper to recycle.  One day to inform and involve and not spend.”

C         “Once again, however, we may be chanting to the choir.”

E         “The day and effort should be targeted to kids.  They can carry the message home and convey it to the adults.  Yet it is the kids who were told at home to deposit their gum wrappers in the trash who don’t toss their butts out the window.  Reaching those who toss their butts out the window is the challenge.”

C         “What types of vehicles are those butts flying out of?  I suspect that they are the two-gallons-per-mile rigs.  Gasoline is a resource, a resource is finite, gasoline is finite.  We need to get real.  And really reduce not just reuse and recycle.”

E          “Yet, I understand those who don’t worry about global warming because they are worrying about paying their heating bill.”

C          “The warm inner glow you feel when doing right does not warm the house.”

. . .  The PEAK (Promoting Environmental Awareness in Kids) program

Bumper stickers of the week:

Reduce, Reuse and Recycle

Don’t light up and turn out the lights

Take the Lead:  Install LED lights and turn them off

Be enlightened:  Lights out or there will be lights out

Build it tight, ventilate it right

Insulation is your friend

The cheapest energy is the energy you don’t use

Get your food from and close to the farm and field; don’t consume gas to feed your consumption

Take only pictures; Leave only footprints

Rational Fear: Still “Unusually Uncertain” (November 8, 2010)

Posted in "L" Shaped Economy, Bailout/Bribe, Banks and Banking System, Bernanke, Depression, Federal Reserve, Greenspan, Kleptocracy, Technology, Unemployment, Volker with tags on November 8, 2010 by

. . .

K         “Think about it.  Some maintain the blind conviction that the business cycle is ordained by nature like the tides to rise after it falls.”

J          “Faith in nature.  This season is bad so that the next season will be good because that is the way it is.  Good luck.”

K         “Some desire to return to unrestrained personal consumption and unbridled economic growth.  Even if it is attainable at this time it is not sustainable over time.”

J          “Faith in unchecked consumption.  With oil peaking and a world population that has not peaked, the prospects are not promising.  America had its opportunity to consume.  Other countries, particularly China and India, now want and have earned their opportunity to consume.  If the oil holds out.  And if the coal does not kill us.”

K         “Some believe that new technology will be pulled out of the hat and pull us out of this mess.”

J          “Faith in technological salvation.  The technology sector likely will continue to grow but not enough to propel the entire economy.  The tech world is producing some sexy developments and neat gadgets.”

K         “I’ve always supported free trade when it is truly free.  Decades ago, I could see that globalization would shift massive numbers of American jobs overseas.  They said the solution is to train and retool the America workforce.  The workforce is not retrained and retooled and may not be retrainable and retoolable.  Not many commentators in academic economics or in the financial press have a clue.”

J          “It is one thing to listen to Greenspan and know that everything he says is wrong, yet who is getting it right.  Knowing which way not to go in a maze is not the same as knowing which way to go.  Volker has a clue, yet he is on the sidelines.”

K         “Bernanke* has a clue.  Now that monetary policy has effectively failed, he is enacting what is effectively fiscal policy.  Fiscal policy is the province of the legislature, the Congress.  But Congress is broken.  The Humphrey-Hawkins Full Employment Act, an act of Congress, requires the Fed to promote full employment.  Perhaps he is actually trying to stimulate employment.”

J          “But there are no jobs, now or in the future.  Quantitative Easing II is nothing more and nothing less than TARP II implemented by the Fed rather than Congress.  The Fed’s purchase of bonds is nothing more and nothing less than a slick way to provide another bribe and bailout to Wall Street.”

K          “That is hard to dispute unless there are a few random hires here and there.  And he continues a tradition at the Fed of lying or at least deceiving the public.  He can do something.  He and the Fed regularly issue ‘Remarks’ and ‘Speeches’ on all manner of topics.  He should direct the Fed to issue a finding that a single bank with deposits and assets of more than 100 billion is a clear and present danger to the American economy and to the security and well-being of the Republic.  If a bank or other financial institution does not enter into an Enforcement Action with the Fed, close the resources of the Federal Reserve to the bank or financial institution.  In effect, require banks to downsize to manageable sizes.  They must be small enough to fail and to play well with others.”

J          “Won’t happen.  Our democracy is now a kleptocracy.”

K         “That won’t help employment, however.  But he could pull it off.  He can be bold.  He would have to play all his capital.  But for us citizens, however, the only things we have to fear are so many very real fears.”

. . .

Bumper stickers of the week:

The only things we have to fear are so many very real fears.

Don’t end the Fed, mend the Fed.

“And as things fell apart/Nobody paid much attention.”  “(Nothing But) Flowers” – Talking Heads

“This country’s hard on people, you can’t stop what’s coming.”  No Country for Old Men movie (2007)

In The Land Of Fury And The Home Of The Fearful (November 1, 2010)

Posted in Elections, Politics, Race, Society, Tea Party on November 1, 2010 by

. . .

J          “So much unfocused rage and undigested anger is raging across the countryside.”

K         “And Anger Mongering (AM) radio and Fox tv are the primary mouthpieces for the furor.  Follow the money.  A staggering amount of money is being amassed marketing hate and fear to the masses, one of the last growth industries in America.  Those inciting the masses are doing so for their own very narrow self-interest.  The cunning and the cynical are playing some voters for chumps and stooges.  Stun and cripple a person with fear and take his vote and his money.  Yet there is a perception that something is wrong grounded in the fact that something is wrong.  The frustration is magnified because it cannot be articulated.”

J          “And an articulate, informed and serene Black President who displays upper class sensibilities and syntax reminds Americans of the two underlying schisms and fissures in America – race and class.  Race is not an acknowledged issue, but race is an issue in most of the political races this year.”

K         “Confidence even devoid of arrogance and pretense threatens the insecure.  Look at the numbers.  Forty-five percent of the electorate responds to fear.  Market and exploit fear and appeal to another five percent and then get just one more vote.  Political victory.  That arithmetic really explains politics in America.  The real kicker is that the problems are far worse than all but the most informed realize and are far less likely to be resolved by current thinking.”

J          “It is all about jobs.  Ironic that some in France are rioting because they are to be given the opportunity to work an additional two years, albeit delaying their retirement, and Americans may riot to be given the opportunity to work.  When there are job openings, Americans are there hustling to get them.”

K         “True, yet Americans have not experienced any real hardship in recent decades and simply do not have the emotional software to deal with adversity with any perspective or dignity.”

J          “When the present and the future are so bleak, the past is strained through a filter to make it look far more idyllic than it ever was.”

K         “It is so much easier to hate and fear without reflection.”

. . .

Bumper stickers (signs) of the week:

45% + 5% + 1 = Victory

“The trouble with the world is the stupid are cocksure, and the intelligent are full of doubt.”                      Bertrand Russell

At the Stewart/Colbert Rally on October 30 on the National Mall:

I don’t want my country back, I want my country forward.

Those who work for the government should want the government to work.

God hates hate.

God fears fear.

God fears hate.

God hates fear.

Use your indoor voice

Although I don’t agree with you, I don’t think you’re Hitler