Great Food Truck Race – yeah, I watch Food Network, you got something to say?

GO HODGE PODGE!!

ETA: Nooo, not the Roxy truck!  They’ve got a truffle mayo!  And the Lime truck boys are pussies.

Dammit.  Take that Lime truck down, Hodge Podge.  I’m rooting for you.

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Published in: on September 18, 2011 at 7:55 pm  Comments (4)  

Drive-by blogging

Just a quickie, I’m to busy to blog at the moment.

Brilliant.

*standing ovation*

Published in: on September 16, 2011 at 8:47 am  Leave a Comment  

GDP 101

There are some remarkably savvy people hanging around here, and I’m betting all of you know what GDP is without my explaining it.

What GDP means is another story.  Most people don’t know what the GDP figure means in any in-depth manner.  Most people don’t need to know this.  It’s not generally considered to be vital information.  My education was in mathematics, and I didn’t know until the last decade (mathematics is a hard science, whereas economics is the art of mathematically predicting what a herd of cats will do next).

The GDP formula is simple by even middle school standards:  C + I+G +(x-m).  Consumer spending plus investment plus government spending (federal, state and local) plus next exports (exports minus imports) equals Gross Domestic Product.

Here’s what this means.

Government produces nothing for the economy, the only thing it is capable of doing is siphoning money out of the economy via taxes.  Further, taxes have a cumulative effect.  If your business will pay an extra $10k in taxes next year, you will not merely say, “C’est la vie, I have $10k less to spend in my business next year.”*  You will trim expenses somewhere to make up for that loss.  It may mean you cut one employee, or you switch suppliers (and then they make less money, and may cut an employee).  Someone, some where, loses a job.  This results not merely in your $10k leaving the economy, but also the spending of the person who lost a job.

An increase in taxes always affects either C or I in our formula, and at a higher figure than the actual taxes removed.

In the natural order of things, government has a parasitic relationship with the market and knows it.  All government spending is a burden upon the taxpayer and the economy, and government must carefully watch for precipitous spending lest it kill the very thing that feeds it.

And then we discovered debt.

These days, the fellow that lost his job lives on credit cards – spending money he doesn’t have and can’t pay back.

The government figured out that if raising taxes would lower GDP by decreasing either C or I, then it would simply borrow lots of extra money from others and promise to pay it back with raised taxes later.  Some day.  Probably.

This is exactly why today’s economy isn’t called a depression.  That’s defined by a 10% contraction of GDP.  C and I contracted like hell; government increased G hugely by adding 100% to government spending through money it borrowed, without the ability to pay back via tax revenue.

If you have ever successfully balanced a checkbook, you can see what is wrong with this picture.  Neither C nor I and damned well not G are figures which can be maintained.  The person who lost his job will not be able to live on credit cards forever – at some point the credit reaches its end and he can only spend what he earns.  Now extend this one person across the broader economy.  U-6 unemployment stands at 16.2% as of August – nearly double what it was four years ago.  And yet GDP has grown every quarter since?  I don’t think so.  16.2% will show up in C.  That is a fact which cannot be ignored any more than one can ignore gravity.

G cannot be maintained indefinitely.  If you think it can, go talk to a Greek.  No one can continually spend ever-increasing sums of money it does not have without eventually getting presented with a bill.  Not even countries.  It took Greece a long time to hit the limit on their credit card (decades, even), but they did eventually hit it.  We will too, and it won’t be decades from now, because we’re right behind Greece in all the debt-to-GDP statistics.  We’re so near the event horizon, we might have crossed it already.  I suspect we have (and if you’d like to know why, I direct you to my recent post wherein I proved that the bill for every individual – man, woman or child – in the state of Texas for their federal and state tax burden is $17,063.50 per year, and that does not include the money needed to pay the government debts).

Do you want to know what happens to countries when their credit cards get cut up?

This happens:

Greece’s gross domestic product per capita of $30,400 in 2008 was close to the European Union average. It was caused not by an exceptional surge in productivity, but mostly by huge subsidies and extensive borrowing. Greece’s continuing current account deficit, estimated by The Economist at 8.3 percent of gross domestic product in 2011 despite a severe recession, indicates that it remains deeply uncompetitive.

This suggests Greece may require living standards to decline by as much as 40 percent to become competitive…

And this:

Writing in the Die Welt newspaper, [German economic minister] Mr Roesler said: “To stabilise the euro, we must not take anything off the table in the short run. That includes as a worst-case scenario an orderly default for Greece if the necessary instruments for it are available.”

He said such a default would mean “re-establishing the affected state’s ability to function, perhaps with a temporary restriction of its sovereign rights”.

And let’s not forget this:

Another tactic for pulling the debt-stricken country out of crisis could be replacing “the obviously ineffective administrators” there, he added. Because Greek officials have failed at collecting outstanding taxes and selling state-owned assets as planned, Oettinger alleged, experts from other EU nations should be sent in to do their jobs instead. “They could operate without concern for resistance and end the inefficiency,” he told Bild.

Your standard of living cut in half while foreign nationals take over elected positions to make sure to extract from you repayment of money your government borrowed and spent.  That isn’t tinfoil nuttery, that’s actual quotes in the actual goddamned news.

Does no one read history books?  Statements such as the above are soft declarations of war.

This will not end well.  Not for Greece, not for Europe, and not for us.

 

*Or maybe you will.  Some people will say anything.

Published in: on September 12, 2011 at 8:45 am  Comments (5)  

Never forget

This day marks the 10th anniversary of an isolated terrorist event which our government gleefully seized as an opportunity to declare war on American citizens.

American politicians have now killed more young men and women in our military through their ceaseless political war than terrorist killed on that day.  Unlike the terrorists, the politicians demand we finance their actions.

This was the day which gave us the political overlords’ instruction that secret police action, warrantless searches and a list of who’s a Naughty American* is patriotic.  It was used against a 16 year old homeschooled North Carolina boy wherein someone claimed a bomb threat was phoned in.  There is no other evidence in this case.  The boy has been stripped of his due process rights, his mother was given little access to him and a judge issued a gag order which prevents anyone from finding out what has happened.  That is what we’re told is “patriotic”.

I don’t think that word means what they think it means.

In the ensuing ten years, the TSA have made no arrests (zero, none, a complete absence of a positive figure) that weren’t law-abiding Americans.  Their unconstitutional searches and violating the rights of billions of passengers in the last decade have assisted in the capture of absolutely no terrorists at all.

They did strip-search, arrest and spend a year prosecuting a normal middle class, middle-aged white American grandma though.  Over applesauce.

Spetember 11, 2001 was a day of infamy and no mistake.  Always remember the reign of terror visited upon us from that day forward and always, always remember who is behind it all.

Never forget.

 

*Many of whom are small children.  They must have been very naughty children indeed.

Published in: on September 11, 2011 at 10:57 am  Comments (1)  

There’s warm and happy thoughts, and then there’s this…

Y’all, keep a close eye on Greece this weekend.  It’s looking very serious.

I’ve been watching the Greek bonds for days.  The 1yr is sitting at 97.96% and the news is swirling with rumors of default, rumors of denial of default, rumors of failed auctions.

I know to many, who have no idea what this means, the instinctive reaction is to think that what happens waaaay over in some tiny Mediterranean island has dick-all to do with us.  Fight that instinct, because it is wrong.  German banks are in dire danger from the fallout of a Greek default – Merkel is frantically sandbagging as we speak.  The big French banks were already in deep trouble, and I’m talking CEO-eats-a-bullet style of thing.

The big deal with a global marketplace is that we’re all now tied together, much like slaves chained in the hold of a ship.  Toss one slave over, and the weight will drag everyone else down too.  No where is this more pronounced than the financial sector.

My read on this, which may of course be wrong, but unless you’re willing to put as much research into it as I have, you’d be a fool to dismiss out of hand:

Greece can’t be saved.  There’s no way.  Even if the world could find the funds, and Greek citizens could find the balls to fix their problems, it’d be a bad precedent because Italy is likely next on the chopping block and they’ll expect global bailout as well (Hey, Greece got bailed out, why not us?)  TBTF is an idiotic concept when applied to banks, the impossibility of the theory is exponentially greater when applied to whole countries.

It might be able to be sandbagged.  Detach, de-lever, cordon off the damage and sit tight for the ride.  If they do this, they still can’t save the French banks in the long run (too exposed, and to more crap than Greece) but they might be able to salvage enough of the German economy and the Euro to withstand some major shitstorms.

If everything goes perfectly, this weekend will be a nailbiter but come Monday it will be business as usual hereabouts.  For now.  Not so much for Greece, but we’ve known that for a long time.

If nothing goes right, US banking is going to be mass chaos on Monday morning.  Grab your sack with both hands.

Plan for the worst and then you can hope for the best.

Published in: on September 9, 2011 at 11:36 am  Comments (4)  

We can also invest in icebergs as a supply of potable water. I probably shouldn’t make references to old movies, it dates me.

In 2012, vote for the one politician who is truly on your side.

Vote for Nobody!

Nobody Cares!

Nobody will keep election promises.

Nobody will listen to your concerns.

Nobody will help the poor and unemployed.

If Nobody is elected, things will be better for everyone.

Nobody tells the truth!

Talk to your friends and family about the exciting possibility of voting for Nobody in 2012!

“We, the Anti-Electorate, do not believe there is a need for “strong leadership” in government. We are not drawn to “intellectual” authorities and political “heroes.” We are not impressed with titles, ranks, and pecking orders – politicians, celebrities, and gurus. We do not struggle for control of organizations, social circles, and government. We do not lobby the State for favors or permission to control those with whom we disagree. Rather, we advocate freedom. By its very nature, the State does not. Exercise your right to say “No” to the warfare-welfare system. Refuse to vote. Then tell your friends why.” — Wally Conger, The Anti-Electorate Manifesto

Props to my gal Kelly James, from whom I ganked the whole post.  Except the title.  I wrote every word of that title.

Published in: on September 8, 2011 at 8:38 pm  Comments (2)  

Investment advice

Periodically, fellows will ask me for my advice on the markets.  I’m well aware that most of them are approaching it with a talking dog in mind – oh look, an intelligent escort, hur hur.  I don’t know if anyone ever took my advice, though I’d be interested to find out how they did.  Watching my recommendations, they ought to have done well by it.

My response was the same no matter who asked.  First, the caveat that I am not a certified financial advisor, that I was not talking my book (sold the last more than a year ago) and they’re asking someone they met online.*  A year ago, I always said gold, silver, oil and, if you were feeling frisky, copper.  Six months ago, I told everyone to run like hell – take their ball and go home.  The market no longer exists, it’s been replaced with a casino, and while some lucky dog’s gotta win… it probably won’t be you.

Having an account with the Bank of Sealy isn’t a good long-term solution, though.  Whatever Bernanke says, we’re in an inflationary environment and, while keeping your life’s savings in your mattress means you won’t lose it as fast as you would in the market, the point is that you’ll still lose it as inflation erodes away its value.

Two potential solutions here, and they both involve investing in people rather than markets.

The traditional safe plays in an inflationary economy are debt and goods.  I understand the argument with debt; if you take on debt today, you’ll pay it back tomorrow with currency that is cheaper.  I still don’t like it.  This is not an economy wherein additional obligations would bring happy thoughts.  Thus it is that I favor the second play – buy stuff.  It’s the same argument as debt, only in the other direction and it leaves you holding something tangible.  Tomorrow, things will cost more due to currency devaluation/price inflation.  So buy it today.

Take, for e.g., your grocery bill.  You’re going to buy a certain amount of groceries every week no matter what.   Price inflation at the grocery store has been particularly rabid over the last year(s).  It may surprise you, but you can get quite a nice return by making your usual supermarket purchases in big bulk lots.  Say you find your brand of toothpaste on sale for 94 cents.  Buy two dozen of them.  A year from now, when your brand of toothpaste is $1.97, you’ve got yourself a tidy little profit.

Now parlay that out across your entire grocery bill.

Sure, you can’t do it with everything.  Fresh bread and meat, cream, produce, these things have to be bought fresh and cannot be stored as-is.  But if you’re sitting on a shitload of financials and are desperately looking for a better place to put it, trade it in for “things”.  You’ll use it all eventually, including a little place to retire on and a plot in the graveyard, and I guaran-damned-tee we aren’t going to have a strong dollar any time soon.

The first solution is to invest in yourself.  Buy all the things today, at the best price you can find, which you know you’ll be using eventually.  The second solution is to invest in others.

Small business creates more jobs in America than any other element of the market.  Small business owners work ridiculous hours and pour their blood, sweat and tears into their dream, all in the full knowledge that it may not work out.  What helps entrepreneurs the most is an injection of outside capital.

This solution is trickier.  You’ll have to find a likely person who you know to be a hard worker, with a great idea and solid business sense (and since everyone is a fucking moron these days, that’s a tall order).  Even then, you may not see a return if the business fails.  Still, all things being equal, investing in the local small businesses is a smarter move with a better likely return than in the stock markets.

And that’s my investment advice these days.  Let the stock markets go bugger themselves.  Invest in yourself, and invest in local business.

* Yes, for the most part, I think it’s silly to ask someone you met online what to do with your money.  But, since everyone I meet online is a grown adult and therefore old enough to wipe their own ass…  On the other hand, it’s demonstrably far better to listen to me than to fucking Cramer.

Published in: on September 8, 2011 at 8:00 pm  Leave a Comment