Thursday, November 24, 2011

Brick Wall Dead Ahead

The German bond market just had a miserable auction, nobody showed up. And of course the Euro is in fine shape. How many would you like to buy?

The Congressional Super Committee had a senior moment; they lost the cape and the t-shirt with an S on it. It’s no big deal; whatever they forgot to do, wasn’t going to happen until 2013 anyway.

Egypt wants Democracy. I guess General Motors could name a new car “Democracy,” and we could sell it to them. That’s about as close to Democracy as they will ever get. Democracy is a little like a car, the wheels are your social institutions. So far they have the military and Islam, one wants to shoot the occupants, the other wants to load it with explosives.

Syria seems to have a problem with too much press coverage. Fidel Castro had a rather effective solution, a cigarette and a blindfold. To a lot of people in the world, order and stability are more desirable than Democracy.

Tear gas orders for this Holiday season are up. There isn’t a dry eye in the house in Syria, Greece or Egypt. And at UC Davis they are gassing students after they paid tuition. If they weren’t crying about the cost of tuition before they paid it, they were afterwards.

Then there is the deficit, it’s now at 15 trillion dollars. Congress is fighting over raising taxes to pay for all of this, but it hasn’t slowed down the spending. You really have to wonder why the worry to raise taxes or reduce spending, things are running just “peachy keen,” the way they are.

Then we have Freddie and Fannie. Down the street a two bedroom 1 ½ bath is going for $325K. Of course the 4 bedroom 3 bath a block away is going for $355K. The government is going to sell your kids the one for $325 with no money down.

Interest rates have gotten so low that you need to work 80 years before you have enough saved up to retire (if you factor in inflation, double that up to 160 years). I think Bernie Madoff will be getting out of prison about then. California’s CalPERS retirement fund is still claiming that it is earning 7 percent on investments. It kind of shows you where Bush’s “No Kids Left Behind,” found employment. It's a little like a mortuary issuing birth certificates, something has to be out of whack and you’re not sure just what it is.

Unemployment is “under control.” For some reason, the number of mattresses under freeway bridges seems to be on the rise as are the people camping in city parks.

Our leaders reassure us everything is OK; they claim to have saved us from a Great Depression. With Cities going bankrupt for the first time since the 1930’s, you have to wonder, is Obama a used car salesman in disguise? The thing that worries me are the potential Republican contenders, all of them have that used car salesman look.

Have a Happy Thanksgiving everyone.


Dan Mac said...

Happy Thanksgiving Jim.

Anonymous said...

Happy turkey's day and no complaint.

The so called middle class shall be resigned to the idea that they keep themselves in perpetual debt serfdom by working for the higher class at a low, competitive rate.

"For a few to be immortal, many must die", well spoken in movie "In Time". Just accept the status quo and move on with the American dream, lol.

dearieme said...

The state of the Euro:

Jim in San Marcos said...

Hi Dearieme

Thanks for the link.

The idea of the Euro breaking up is a little like the sinking of the Titanic. It is only believable after the event happens.

AIM said...

Somehow we continue to muddle along. How long can we put off having to deal with all of the private and public debt? Maybe forever? Someone has to pay eventually. Maybe not?

Time and events will be very unpredictable as long as governments and central banks continue to erroneously believe that they can effectively manipulate and manage capitalism and the economy of a country.

Anonymous said...

The brick wall keeps being moved back further and further so that we don't have a collision Jim.

Jim in San Marcos said...

Hi Anon 7:04

You are right.

I should have used a longer title in the article. "We have hit the iceberg and they are launching the lifeboats." The wall is a poor analogy for what is currently happening.

We have had the collision, we just haven't appreciated the implications---yet.

Jim in San Marcos said...


Reality has to come back to the market, and I don't see it yet.

As to who gets to pay the bill, we know the answer, and it kind of makes you mad.