Bonds Gain From Stocks' Pain - Barrons.com
Comparisons with the housing bubble and the sovereign debt bubble (US included) would seem appropriate.
In both cases the borrowers (read now 'governments') borrowed far more than they could ever pay back and the lenders (read almost everyone) kept lending them money seemingly without considering the risk.
Greece went basically belly-up but all these governments think they can keep encouraging entitlement spending, etc. without really understanding that they need to grow the private sector, which underpins the economy.
Saturday, April 14, 2012
Wednesday, April 11, 2012
CHOICES: Global Worries Hit Markets Anew - Barrons.com
Global Worries Hit Markets Anew - Barrons.com
We each can make our own choices.
Since Obama and the Democrats excuse those who don't get an education or those that don't want to teach, they are left with few options but to take the capital from those that still have it (read: negative real interest rates).
At some point though, there will have to be cutbacks in taxes, regulations and union benefits - otherwise there won't be any capital or incentives to create jobs (a problem already prevalent in Europe and, from Dunkleberg's comments Friday on Bloomberg's Tom Keene show, already present among small business in the US).
If interest rates on government debt should normalize in the US things will be far from halcyon. But, the Democrats love Never-Never-Land, so who knows.
We all have access to information, it's up to each of us to do with it as we will.
We each can make our own choices.
Since Obama and the Democrats excuse those who don't get an education or those that don't want to teach, they are left with few options but to take the capital from those that still have it (read: negative real interest rates).
At some point though, there will have to be cutbacks in taxes, regulations and union benefits - otherwise there won't be any capital or incentives to create jobs (a problem already prevalent in Europe and, from Dunkleberg's comments Friday on Bloomberg's Tom Keene show, already present among small business in the US).
If interest rates on government debt should normalize in the US things will be far from halcyon. But, the Democrats love Never-Never-Land, so who knows.
We all have access to information, it's up to each of us to do with it as we will.
Unemployment Falls Fast in U.S. If Men Get College Degree - Bloomberg
Unemployment Falls Fast in U.S. If Men Get College Degree - Bloomberg
"... So-called middle-skill jobs, typically well-paying work that don’t require extensive higher education, are vanishing, dividing the labor force into high- and low-skill positions. While women are moving up the knowledge ladder, male educational attainment is growing at a slower rate...."
"... So-called middle-skill jobs, typically well-paying work that don’t require extensive higher education, are vanishing, dividing the labor force into high- and low-skill positions. While women are moving up the knowledge ladder, male educational attainment is growing at a slower rate...."
Sunday, April 8, 2012
THE FARMER ANALOGY: Job Growth Loses Steam - WSJ.com
Job Growth Loses Steam - WSJ.com
Another consideration here is that the US has high paying jobs with no one to fill them.
Facebook stated on Bloomberg in January that the salaries it pays its technical people have doubled in the last 5 years. Google increased salaries by 10% across the board last year.
In an 'entitlement' society where half the kids don't graduate from high school, there are huge numbers of Americans with no place in a technically and information demanding society.
But liberal educational philosophies and teachers unions are an utter impediment to encouraging kids to get an education or suffer the consequences. Too many people believe there should be 'no' consequences. Instead those who are successful are 'to blame' and should pay ever higher taxes.
Things are screwed up! (It reminds me of a story a South African told me about a white farmer and a black farmer (not to be racist but this is how the story goes). Both farmers grew corn and the black farmer was always envious of the corn crop of the white farmer. The farmers both planted their corn using a little wheel with cups in it where they would put the seed. They would roll the wheel down the row of future corn and that's how they'd plant their crop. The white farmer would put three seeds in each cup and the black farmer no more than one.)
The US has far too many policies that don't educate those who want to get ahead how to get ahead and success is vilified (read also taxed) to equalize economic outcomes.
Another consideration here is that the US has high paying jobs with no one to fill them.
Facebook stated on Bloomberg in January that the salaries it pays its technical people have doubled in the last 5 years. Google increased salaries by 10% across the board last year.
In an 'entitlement' society where half the kids don't graduate from high school, there are huge numbers of Americans with no place in a technically and information demanding society.
But liberal educational philosophies and teachers unions are an utter impediment to encouraging kids to get an education or suffer the consequences. Too many people believe there should be 'no' consequences. Instead those who are successful are 'to blame' and should pay ever higher taxes.
Things are screwed up! (It reminds me of a story a South African told me about a white farmer and a black farmer (not to be racist but this is how the story goes). Both farmers grew corn and the black farmer was always envious of the corn crop of the white farmer. The farmers both planted their corn using a little wheel with cups in it where they would put the seed. They would roll the wheel down the row of future corn and that's how they'd plant their crop. The white farmer would put three seeds in each cup and the black farmer no more than one.)
The US has far too many policies that don't educate those who want to get ahead how to get ahead and success is vilified (read also taxed) to equalize economic outcomes.
VISIONS AND LIES AND A FOGGY MIND: Job Growth Loses Steam - WSJ.com
Job Growth Loses Steam - WSJ.com
Comment by PD:
"...a general problem ever since the turn of the century... the middle class has had stagnant, at best, real income growth.
Many middle class, independent voters eagerly await a politician that can espouse a vision for setting us on a new trajectory. A vision that seems to acknowledge what many view as a long brewing problem rather than simply a vision of political opportunism."
Response:
As an example of what should change, in California education policy the goal is to equalize educational outcomes rather than opportunities. Thus, the money and effort goes into helping the dumbest, most needy kids rather than those with potential.
As a result, the latest statistics show 70% of LA kids not graduating from high school. The national average is 50%.
If people are going to get good paying jobs and demand (or be led to believe they are entitled to have) abundant health and retirement benefits, then the money has to come from somewhere.
If a society is encouraged to spend and not save and business and the wealthy are supposed to sacrifice their capital and incomes (the top 1% pay something like 51% of all income taxes and see all the recent articles on this), business and banks get bashed by Obama, then where are good paying jobs to come from?
With no education in a competitive global economy, those who would like to make an American 'middle class' demand on global resources (think our trade deficit), have to bring something proportionate to the table. Democrats would cringe at the idea of telling people this!!!
Comment by PD:
"...a general problem ever since the turn of the century... the middle class has had stagnant, at best, real income growth.
Many middle class, independent voters eagerly await a politician that can espouse a vision for setting us on a new trajectory. A vision that seems to acknowledge what many view as a long brewing problem rather than simply a vision of political opportunism."
Response:
As an example of what should change, in California education policy the goal is to equalize educational outcomes rather than opportunities. Thus, the money and effort goes into helping the dumbest, most needy kids rather than those with potential.
As a result, the latest statistics show 70% of LA kids not graduating from high school. The national average is 50%.
If people are going to get good paying jobs and demand (or be led to believe they are entitled to have) abundant health and retirement benefits, then the money has to come from somewhere.
If a society is encouraged to spend and not save and business and the wealthy are supposed to sacrifice their capital and incomes (the top 1% pay something like 51% of all income taxes and see all the recent articles on this), business and banks get bashed by Obama, then where are good paying jobs to come from?
With no education in a competitive global economy, those who would like to make an American 'middle class' demand on global resources (think our trade deficit), have to bring something proportionate to the table. Democrats would cringe at the idea of telling people this!!!
Friday, April 6, 2012
(Comment and Response) Econometric modeling re: Review & Outlook: Obama vs. Marbury v. Madison - WSJ.com - btbirkett@gmail.com
Gmail - Review & Outlook: Obama vs. Marbury v. Madison - WSJ.com - btbirkett@gmail.com
Comment:
Oh yes, good ole Capitalism. Let's keep the rich, rich, and lets keep the poor, poor. The reality is America values it's middle class, and our middle class is disappearing rapidly.
The Republicans and Democrats do nothing but bicker at one another. We can't accomplish anything because they are holding us back. Etc. Etc. Same ole story, different day. Mark my words, the U.S. is heading for some radical changes over the next 20 years…. You just wait and see ;) I'll be sure to reach and say, told you so.
Response:
As for big changes, you are clearly understating it.
The young are being taxed and forced to provide lavish benefits to public union employees (see tax rates on property in NY, sales tax rates, etc.). As a recent article said about NYC, there is no money to pay for road and infrastructure improvements because its all going to public employee pensions. It's the old saying about pigs getting fat and hogs ready to slaughter.
Rhode Island has led the way in reducing existing union pension benefits to current retirees. It is happening here in Portugal and especially Greece. The 1970's showed that printing money can't overcome the impediments of bad fiscal and regulatory policy.
As for change, it would seem likely that someone will be able to capture the youth vote to realize too much of their earnings and the funds to create job opportunities for them is going to non-producers.
As for healthcare costs, the money has to come from somewhere and the government needs to use all means at its disposal to try and keep the free and subsidized care system going. There is a huge sense of 'entitlement' among people in developed countries that didn't exist when I was growing up. (It's interesting that this sense of entitlement isn't there among young people I've met in Eastern Europe because they saw what it led to under Communism!)
So doctors who might only get reimbursed $40 under Medicare or Medicaid (paid for by government) charge private patients $80 or $120 to make up for it (the lower number being a negotiated rate with private insurance carriers; the higher price being the rate paid individually without insurance). There are also taxes on private policies which are used to subsidize public health care expenditures.
If you think about the 17% of GDP for healthcare, you have to recognize that as more and more resources are allocated to healthcare, more 'marginal producers' (read: higher cost, less productive, etc.) have to be brought in.
Also, when you think of healthcare demand, I gave you the California co-pay example. When it's free (or for the elderly close-to-free), more is used.
There is also a huge use of prescriptions in the US that has gone so far as to pollute the water supply in many areas with residual chemicals released in wastewater discharges.
If you get a chance, you might enjoy reading "Plagues and Peoples" by McNeil. (cheap as a used book).
Plagues and Peoples by William Hardy McNeill - Reviews ...
www.goodreads.com/book/show/46725.Plagues_and_Peoples
Rating: 3.8 - 618 votes
27 Oct 2010 – Plagues and Peoples has 618 ratings and 58 reviews. Naxa said: A groundbreaking work in epidemiological history. McNeil attempts to do two ...A lot is being written about the US deficit spending problem and there is a lot of effort - especially be Obama and the Democrats (but I'm not letting the Republicans off the hook here either) - to make people think this problem can be solved by taxes on the rich (let the Bush tax cuts expire, etc.). Too high taxes was a problem in the 1970s that the Reagan tax cuts corrected.
Half of Americas kids don't graduate from high school. They want a middle class lifestyle but the government says they should have it whether they work or not.
Someone said the other day that if the US had grown on trend (i.e. with better tax and regulatory policies and less bashing of business and the banks) under Obama (last 3 years), GDP in the US would be 12% higher! So, should we wonder what happened to some nice middle class jobs and the ability to employ a larger percentage of the workforce, this lost 12% is part of the answer.
Anyway, my old saying is that if I was a Jew in Germany in the 1930's, I would hope to have been able to know to leave. As such, I try and pay attention to things. I admit to spending more time on the big picture than the small though - so, who's perfect? I'm not saying I am.
History has lots of lessons for us; and, I don't know if you've ever had a course in econometric analysis and linear regression, but it's not just garbage-in-and-garbage-out, it's also about how you organize and select R-factor correlations.
In this sense, Art Laffer economist types do it one way (i.e. people like to keep their money and don't like high taxes and oppressive regulations) and Democratic Obama types do it in a totally different way (i.e. investment comes from demand and what bureaucrats decide is best; individuals that make to much shouldn't be allowed to keep it; government knows best - individuals don't; business is inherently evil and the benefactors of the poor who create nothing and take what they need from others are the worthy and should be in charge; etc.).
When you'd run the econometric projections, I suggest you'd get different results. The Democratic R-factors lead to Greece-like results.
Wednesday, April 4, 2012
A NATURAL BALANCE UPSET: Euro Zone Cuts Deeper Amid Criticism - WSJ.com
Euro Zone Cuts Deeper Amid Criticism - WSJ.com
Socialists always think "someone else" owes them a job. As such, the equation of "production = labor + capital + raw materials" gets distorted.
There should be a natural balance between those wanting work and entrepreneurs able and willing to create jobs.
When this balance is distorted, questions should be asked as to what is interfering. (Clearly taxes and regulations are part of the problem and the welfare state offsets incentives to find work.)
European policymakers seem to be ignoring the advice of people like Arthur Laffer (easily Googled).
Socialists always think "someone else" owes them a job. As such, the equation of "production = labor + capital + raw materials" gets distorted.
There should be a natural balance between those wanting work and entrepreneurs able and willing to create jobs.
When this balance is distorted, questions should be asked as to what is interfering. (Clearly taxes and regulations are part of the problem and the welfare state offsets incentives to find work.)
European policymakers seem to be ignoring the advice of people like Arthur Laffer (easily Googled).
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