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I've often heckled Ben Stein here but this week he's offering what I would call some rather decent advice to us as individuals. Unfortunately, I have commented that if every American started spending as miserly as I do then our country would be in even worse shape (as I very rarely visit any of this country's malls).
I had never heard of the "funemployment" term until now.
Get It Right Today, Be Glad Tomorrow
Now, let me be clear. Some people are simply not looking the reality of the situation in the face. There are some who, as my pal Frank Mottek from CBS describes them, are part of the "funemployed."
This would be the young woman I know, funemployed, with an immense monthly expense tab, just out of grad school, who used many of her borrowings for a vacation in Europe. Another simply had to spend time touring the fashion capitals of the continent -- on borrowed money. And there are many more.
Their turn to pay the piper is coming, and when it does there will be wailing and gnashing of teeth. Ernest Hemingway once quoted a friend on how he went broke: "Gradually, and then suddenly."
Friday: No Major Economic Releases
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[image: Mortgage Rates] Note: Mortgage rates are from MortgageNewsDaily.com
and are for top tier scenarios.
Friday:
• At 10:00 AM ET, *University of Michig...
56 minutes ago
14 comments:
ROTFLMAO
Good on Mark.
Kevin
Kevin,
Funfortunately, the funrealistic debt loads may become funbelievably funpleasant at some point.
Wow. What a difference an "F" makes. That almost sounds fun!
Once again, I'm reminded of the quote from a top guy at my former company.
"It's a fun environment with creativity and fun."
It was actually more of an "un" environment at the time due to the massive fraud, never ending layoffs, and ongoing morale problems!
Mark,
That's Phunny.
Kevin
Stag,
and ongoing morale problems!
That reminds me of another type of un work environment:
The beatings will continue until morale improves!
It's a management style that relies more on fear and less on greed.
U.S. Rescue May Reach $23.7 Trillion, Barofsky Says
http://tinyurl.com/kps2c2
That's an "F" sound, a couple of them actually one is the "F' word and the other is "F"leeced.
Kevin
Mark,
Good stuff!
mab & Kevin,
1. The deficits will continue until morale improves!
2. Morale will suffer until the deficits improve!
It's just a 10 year history and a glimpse of our future.
BTW, I flipped on the TV and Cramer was wearing horse blinders on Mad Money. He said that although things are bad, now is the time to buy because stocks are at depression prices but we've averted the depression.
How did we reach the point where the guy that told us that tech was the only place we should invest in 2000 ("Winners of the New World") screams Mad Money financial advice at us while wearing horse blinders? I'd really like to know.
The market (i.e. everyone) has determined this to be a normal, albeit extended recession. If companies are cutting costs, both they and the market anticipate a recovery in revenues. Thus stocks like CAT (almost every company has made or beat earnings by cutting costs) are being rewarded for potentially much better earnings in the future, all predicated on a return to normalcy.
But what if those revenues don't grow? That would be because this is no normal recession. Perhaps the country has been running well ahead of our capacity to produce and our actual wealth for some time, because we have been able to borrow and spend money so easily. Maybe we've borrowed our standard of living from the future -- from our children.
the amount of debt still out there is even higher than it was before the "de-levering" was supposed to occur. The tally of all the government bailouts is near $30 trillion. We're simply doing what the Japanese did in the 1990s: Transferring private debt to public debt.
So if you don't believe that we borrowed our children's standard of living, just look more closely at the amount of debt we're leaving for them to pay off. The Japanese have done this already -- but at least they have some savings to pass on to their children.
As the government becomes ever larger, it will all but annihilate the productivity of the country. Only productivity can increase real wealth, and only the market can create it. Revenues are the lifeblood of companies, and revenues are declining.
http://tinyurl.com/nsqety
Mr. Practical calling it the way he see it.
Kevin
Kevin,
That's how I see it too, and I'm even less optimistic.
I agree that we're borrowing our standard of living from our children. I disagree that productivity miracles will help much, if any. If we were to automate and/or outsource everything then what are today's children going to do to earn a living?
Stag,
If we were to automate and/or outsource everything then what are today's children going to do to earn a living?
Why can't they just become active and productive participants in the big CONsino? You know, the place where derivative bets exceed actual sales by 100 to 1. Liquidity baby. Bring it on in spades.
Mark
"If we were to automate and/or outsource everything then what are today's children going to do to earn a living?"
Munitions, tanks, bombs, weapons, war casualties you know the same stupid stuff that got us out of this kind of mess the last time our central bank and goverment did something this stupid.
Kevin
mab & Kevin,
You guys are fantastic!
I propose we go into business together.
We could use 100-1 financial weapons of mass destruction to build and deploy 100-1 actual weapons of mass destruction.
That's 10000-1 leverage, baby!
Oh crap. The black helicopters are circling the house again. I'll have to once again point out that I love sarcasm.
First there was the stone age. Then came the bronze age. Then there was the iron age. We now live in the irony age!
Next up... the stone age again! Woohoo!
http://en.wikipedia.org/wiki/Three-age_system
Stag,
Next up... the stone age again! Woohoo!
A quote from William Playfair:
...wealth and power have never been long permanent in any place.
...they travel over the face of the earth,
something like a caravan of merchants.
On their arrival, every thing is found green and fresh;
while they remain all is bustle and abundance,
and, when gone, all is left trampled down, barren, and bare.
BTW, Playfair appears to have led a very exciting life. He had many careers including banker and convict (oops, pardon the redundancy).
Playfair is also credited with inventing charts. Perhaps he is a distant relative of yours.
mab,
"Playfair is also credited with inventing charts. Perhaps he is a distant relative of yours."
Playfair and I go WAY back. It was my "sure thing" summer job. No joke! The following article from 2004 (the same year I turned bearish) REALLY makes my jaw drop.
"Historic Playfair Race Course to be demolished, developed"
http://www.thoroughbredtimes.com/national-news/2004/February/19/Historic-Playfair-Race-Course-to-be-demolished-developed.aspx
"Live racing ceased at Playfair in December 2000 when then-operators Lilac City Racing Association encountered financial trouble during the 43-day meeting."
I had no idea. That race track had pretty much been around since the invention of dirt.
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