Tuesday, June 30, 2009
Monday, June 29, 2009
read the entire essay
Ponzi scheme mastermind Bernard Madoff, 71, was sentenced Monday to a 150-year prison sentence. That means he will soon be sent to a real prison with real bars and violent offenders, not a "country club" for white collar crooks, experts say.
Madoff has been held at a Manhattan jail since March 12, when he confessed to 11 felony counts for orchestrating the largest Ponzi scheme of all time. For decades, Madoff stole billions of dollars from more than a thousand victims, while masquerading as a legitimate businessman through his investment firm.
Sunday, June 28, 2009
Saturday, June 27, 2009
Given our current tax code, the simplest way to bring down medical costs would be to fully tax health care benefits as wages and simultaneously increase the personal deduction by an amount significant enough to neutralize the effect of the tax increase. This would do two things. First, the uninsured would get a huge pay increase, enabling them to buy reasonably priced catastrophic policies. Second, those currently insured could opt out of expensive employer-provided plans, trading premiums for extra wages, then buy a more economical plan. The savings would go right into their pockets...
When Medicare was first proposed back in 1966, it cost $3 billion per year, and the projection was for inflation-adjusted annual costs to rise to $12 billion by 1990. The actual cost in 1990 was $107 billion, and the 2009 estimate is a staggering $408 billion! So much for government estimates on health care...
“Cap and trade” will do nothing to reduce pollution, yet it will drive up production costs throughout the economy – rendering us even less globally competitive that we are today. In addition to the huge cost of paying the tax, its enforcement involves the creation of an entire new bureaucracy, the costs of which will be borne by American consumers in the form of higher prices.
Years of reckless borrowing and spending have left us in a gigantic hole. Getting out of it requires that we make the most effective use of all available resources. We need labor and capital to operate as efficiently as possible so we can save and produce our way back to prosperity. Unfortunately, national health insurance and “cap and trade” are two steps in the wrong direction. Rather than getting us out of this hole, they will merely cave in the walls around us.
Friday, June 26, 2009
Their gambit got a boost this week, when the Congressional Budget Office did an analysis of what has come to be known as the Waxman-Markey bill. According to the CBO, the climate legislation would cost the average household only $175 a year by 2020. Edward Markey, Mr. Waxman's co-author, instantly set to crowing that the cost of upending the entire energy economy would be no more than a postage stamp a day for the average household. Amazing. A closer look at the CBO analysis finds that it contains so many caveats as to render it useless...
When the Heritage Foundation did its analysis of Waxman-Markey, it broadly compared the economy with and without the carbon tax. Under this more comprehensive scenario, it found Waxman-Markey would cost the economy $161 billion in 2020, which is $1,870 for a family of four. As the bill's restrictions kick in, that number rises to $6,800 for a family of four by 2035...
Americans should know that those Members who vote for this climate bill are voting for what is likely to be the biggest tax in American history.
The federal government is likely to spend $835 billion this year fighting the crises in the financial system and the economy, according to a new report by the Congressional Budget Office.
That spending represents about 6% of the nation's gross domestic product.
Of that amount, $340 billion is going toward the Troubled Asset Relief Program, which is being used primarily to bail out banks, insurers and the auto industry. Another $290 billion in 2009 outlays is being used to prop up mortgage giants Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500).
In addition, $187 billion is being used for economic stimulus and relief efforts such as extended unemployment insurance....
But over the long-term, CBO said, much greater pressure will bear down on the federal budget -- raising "fundamental questions about economic sustainability." That's because, barring any changes, federal debt is on track to greatly outpace economic growth over time.
The main culprits are the growth in federal spending on Medicare and Medicaid and, to a much lesser degree, Social Security. The growth rate in spending on those entitlement programs is due to two factors: the growth rate in health care spending and an increasing number of Americans growing old.
Today roughly 5% of GDP is spent on Medicare and Medicaid. By 2035, the CBO estimates, that number will double. The jump in Social Security spending is projected to rise from under 5% of GDP today to 6% by 2035.read the CNN article
Reducing greenhouse gases is the main aim of the sweeping energy bill currently up for debate in the House.
An 80% reduction is what most scientists say is needed to avoid the worst effects of global warming.
Putting the nation on track to meet this goal by 2050 will cost the average American household $175 a year by 2020, according to the Congressional Budget Office.
Under the plan, known as a cap-and-trade, polluters would have to pay to emit carbon dioxide into the atmosphere, something they currently do for free. Plus, the amount they can emit would decline each year (cap).
Industries would either pay for cleaner technology, or buy pollution permits in a secondary market (trade). Industries most affected include electric utilities, gasoline refiners, chemical makers, and steel and cement companies.
The huge costs in this system - over $100 billion a year - would normally be passed on directly to the consumer. But much of the money generated from the sale of these pollution permits is being returned to households and business as a series of tax credits and other allocations. These credits are what push down the annual household cost to a relatively low $175.
Consumers will mainly see this cost in the form of higher electric bills and gas prices. The impact on the Federal budget is minimal, with one analysis suggesting that it could actually increase revenues a bit.
My thoughts: $175 per household by 2020. Ha!!!! More like $2000 per household.
Thursday, June 25, 2009
Wednesday, June 24, 2009
The central bank said that the pace of the nation's economic decline is slowing and that household spending is showing signs of stabilizing.
It also said conditions in financial markets have generally improved in recent months, and that while businesses continue to cut back staff and spending, their inventories are coming into line with demand...
The Fed has now kept its federal funds rate, an overnight lending rate that impacts rates on various consumer and business loans, in a range of 0% to 0.25% since December. And despite suggesting that there are signs of progress, the Fed reiterated that "economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period."
There was no German miracle after World War II, he used to say; the glorious recovery was a result of economic logic working itself out through market forces. Once we understand the relationship between property rights, market prices, the time structure of production, and the division of labor, the mystery evaporates and we observe the science of human action making great things happen...
"What distinguishes the successful entrepreneur and promoter from other people," writes Mises, "is precisely the fact that he does not let himself be guided by what was and is, but arranges his affairs on the ground of his opinion about the future. He sees the past and the present as other people do; but he judges the future in a different way."
It is for this reason that entrepreneurial habit of mind cannot be implanted through training or education. It is something possessed and cultivated by an individual. There are no entrepreneurial committees, much less entrepreneurial planning boards.
The inability of governments to engage in the entrepreneurial act of faith is one of many reasons why socialism cannot work. Even if a bureaucrat can look at history and claim that his agency could have made a car, dry wall, or a microchip, that same person is at a loss to figure out how innovations in the future can take place. His only guide is technology: he can speculate about what might work better than what is presently available. But that is not the economic issue: the real issue concerns what is the best means given all the alternative uses of resources to satisfy the most urgent wants of consumers in light of an infinity of possible wants.
This is impossible for governments to do.read the entire essay
My thoughts: When you look at history and current events, it is difficult to understand why people still think the government can be more innovation and productive than the market economy.
Tuesday, June 23, 2009
Other big ticket items:
• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion
TOTAL: $3.92 trillionsource
The seasoning. Dizzy Pig Swamp Venom Rub and cheap yellow mustard.
19 pounds of pork.
Slathered with yellow mustard.
Heavily dusted with rub. About 4-5 ounces.
After 15 hours at 225 grate temperature.
I did one fat cap up and one fat cap down. Not much difference fat cap up in the future.
Remember after cooking, removing the bone(s) and fat. You get about 60-65% of pre-cooked weight.
Monday, June 22, 2009
Sunday, June 21, 2009
An iconic photograph of Albert Einstein was sold by a New Hampshire auction company Friday for $74,324, making it the most expensive Einstein photograph ever sold at auction, according to the auctioneers.The photograph was taken in 1951 while Einstein was celebrating his birthday at Princeton University. Photographer Arthur Sasse tried to convince Einstein to pose with a smile for the photo, but Einstein instead stuck out his tongue, producing one of the most recognizable images of the irreverent physicist.
Saturday, June 20, 2009
Friday, June 19, 2009
Thursday, June 18, 2009
Wednesday, June 17, 2009
A key index of prices paid by consumers showed the largest year-over-year decline since April 1950, primarily due to sinking energy prices, the government said Wednesday.
The Consumer Price Index, the Labor Department's key measure of inflation, has fallen 1.3% over the past year.
That's the largest decline in nearly 60 years, and is due mainly to a 27.3% decline in the energy index.
On a monthly basis, CPI rose 0.1% in May, after remaining flat the previous month. Economists surveyed by Briefing.com expected a 0.3% increase.
My thoughts: Double digit inflation will shock people who were not paying attention as the Fed ran the printing presses at full speed.
from Mark Perry:
If you can afford a cell phone or cable TV, you can afford basic health insurance. In Michigan, you can get basic health insurance through Blue Cross Blue Shield starting at $47.14 per month for those 18-30 years old (about the cost of a basic cell phone plan), and starting at $168.13 per month for another plan for individuals under 65 and families (not too much more than a cable TV plan with premium channels, and about the same as two cells phones at the monthly average of $77).
Saturday, June 13, 2009
After 3 hours at 275 degree grate temp.
After 4 hours. Sprayed with a combo of apple cider vinegar and apple juice every 30 minutes after the first 2 hours.
Plated and ready to eat after 4 hours and 15 minutes.
Notes: Next time grate temp at 230 degrees.
Friday, June 12, 2009
Stocks churned Friday, at the end of a mixed week on Wall Street, that nonetheless left the Dow industrials in positive territory for the year for the first time since January.
The Dow Jones industrial average (INDU) gained 28 points, or 0.3%, ending above its 2008 close of 8,776.39.
The Dow has now risen in 12 of the last 14 weeks, rising 33% in that time, for its best 14-week stretch since March 1975, according to Dow Jones.
My thoughts: Dead Cat Bounce.
Thursday, June 11, 2009
Household net worth fell to $50.4 trillion, according to the flow of funds report by the Federal Reserve. Americans' stock holdings plunged 5.8% to $5.2 trillion and mutual funds holdings slid 4.1% to $3.3 trillion, while their home value dropped 2.4% to $17.9 trillion.
The nation's households have now seen their net worth shrink for seven straight quarters. Family net worth had hit an all-time high of $64.4 trillion in the second quarter of 2007, thanks to the housing bubble and a strong stock market.
My thoughts: Will either of the above explanations matter? Or will the American people look at the much simpler graph below and assign blame based on the occupant of the White House when the largest budget deficit ever (in dollars) becomes reality? Or will it not be an in 2012 when we will have grown accustomed to trillion dollar deficits?
Wednesday, June 10, 2009
"In the long run, we are all dead but our children will be left to pick up the tab."
"Capitalism is a process, of success, failure and renewal, and for it to work properly, institutions must be allowed to fail, no matter there size or political influence."
Gary North offers an excellent commentary on the speech here.
The FED is on the back of the tiger. Hoenig sees this. He knows the financial system remains fragile. I presume that he knows that the only way to keep it solvent is for the FED to refuse to sell its assets to the general investment community. Bernanke knows this, too.
No matter how carefully the FED sells off debt, this policy will reverse the recovery. I mean the hoped-for recovery. It is nowhere in sight yet.
Tuesday, June 9, 2009
Monday, June 8, 2009
Friday, June 5, 2009
Still, the unemployment rate rose to 9.4% from 8.9% in April. Economists expected unemployment would increase to 9.2%.
It was the highest unemployment rate since August of 1983. And the official unemployment rate only captures part of the pain being felt by job seekers. More than a quarter of unemployed people have been out of work for six months or more, and the number of long-term unemployed reached nearly 4 million, the highest reading on records that go back to 1980.
There were also 9.1 million people who were working part-time jobs because they could not find full-time work or they had their hours cut back. This was also a record high.When counting people who wanted full-time work who are working part-time, as well as some of the people who are not counted as unemployed because they had stopped looking for work, the so-called underemployment reading rose to a record level of 16.4%.
read this CNN story
Job losses slowed dramatically in May, according to the latest government reading on the battered labor market, even as the unemployment rate rose to a 26-year high...
The unemployment rate rose to 9.4% from 8.9% in April.
read the CNN story
My thoughts: Unemployment is significantly higher than the Obama team intentional estimated. It is interesting to watch the media spin the new information in a positive direction. There was a 0.5% increase in unemployment. (anything above 0.2% in significant.) Unemployment just hit a 26 year high. But the headline is "job losses slow dramatically"