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And, yes, I DO take it personally: 04/11/2010 - 04/18/2010
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Saturday, April 17, 2010

Buenos Aires videoblogging

i took this video clip of a young man performing his martial arts exercises last week in buenos aires but, due to my rather slow upload connection there, couldn't upload it to youtube until i got back to the u.s... it was taken over in parque lima in barrio nuñez near my house...

he's really good...!

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Friday, April 16, 2010

Woo-hoo...! Goldman Sachs accused of fraud

holy shit...! an actual whiff of accountability...!
Goldman Sachs, which emerged relatively unscathed from the financial crisis, was accused of securities fraud in a civil suit filed Friday by the Securities and Exchange Commission, which claims the bank created and sold a mortgage investment that was secretly devised to fail.

The move marks the first time that regulators have taken action against a Wall Street deal that helped investors capitalize on the collapse of the housing market. Goldman itself profited by betting against the very mortgage investments that it sold to its customers.

a good sign...

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Wednesday, April 14, 2010

Heading back north...

it's been chilly and raining for the past two days here in buenos aires... guess it's a good time to head back to the good ol' united states of amerika...

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Tuesday, April 13, 2010

Joe is running in the red every month

from zero hedge, a guest post by graham summers...
It’s Impossible to “Get By” In the US

While the market cheers on the fantastic job “growth” of March 2010, the more astute of us are concerned with a growing tide of personal bankruptcies. March 2010 saw 158,000 bankruptcy filings. David Rosenberg of Gluskin-Sheff notes that this is an astounding 6,900 filings per day.

but wait, there's more...
In 2008, the median US household income was $50,300. Assuming that the person filing is the “head of household” and has two children (dependents), this means a 1040 tax bill of $4,100, which leaves about $45K in income after taxes (we’re not bothering with state taxes). I realize this is a simplistic calculation, but it’s a decent proxy for income in the US in 2008.

Now, $45K in income spread out over 26 pay periods (every two weeks), means a bi-weekly paycheck of $1,730 and monthly income of $3,460. This is the money “Joe America” and his family to live off of in 2008.

Now, in 2008, the median home value was roughly $225K. Assuming our “median” household put down 20% on their home (unlikely, but it used to be considered the norm), this means a $180K mortgage. Using a 5.5% fixed rate 30-year mortgage, this means Joe America’s 2008 monthly mortgage payments were roughly $1,022.

So, right off the bat, Joe’s monthly income is cut to $2,438.

According to the US Department of Agriculture, the average 2008 monthly food bill for a family of four ranged from $512-$986 depending on how “liberal” you are with your purchases. For simplicity’s sake we’ll take the mid-point of this range ($750) as a monthly food bill.

This brings Joe’s monthly income to $1,688.

Now, Joe needs light, energy, heat, and air conditioning to run his home. According to the Energy Information Administration, the average US household used about 920 kilowatt-hours per month in 2008. At a national average price of 11 cents per kilowatt-hour this comes to a monthly electrical bill of $101.20.

Joe’s now down to $1,587.
Now Joe needs to drive to work to make a living. Similarly, he needs to be able to drive to the grocery store, doctor, etc. According to AAA, the average cost per mile of driving a minivan (Joe’s a family man) in 2008 was 57 cents per mile. This cost is based on average fuel consumption, tires, maintenance, insurance, license and registration, and average loan finance charges.

Multiply this cost by 15,000 miles per year and you’ve got an annual driving bill of $8,550. Divide this into months (by 12) and you’ve got a monthly driving bill of $712.

Joe’s now down to $877 (I’m also assuming Joe’s family only has ONE car). Indeed, if Joe’s family has two cars (one minivan and one sedan) he’s already run out of money for the month.

Now, assuming Joe’s family is one of the lucky ones (depending on your perspective) they’ve got medical insurance. Trying to find an average monthly medical insurance premium for a family in the US is extremely difficult because insurance plans have a wide range in deductibles, premiums, and co-pays. But according to eHealth Insurance, the average monthly premium for family policies in February 2008 was $369.

So if Joe has medical insurance on his family, he’s now down to $508. Throw in cell phone bills, cable TV and Internet bills, and the like, and he’s maybe got $100-200 discretionary income left at the end of the month.

and here's the kicker...
If Joe:

1) Overpaid on his house
2) Didn’t have a full 20% down payment
3) Owns two cars
4) Eats at restaurants
5) Splurges on heating & A/C bills
6) Has any medical expenses aside from monthly premiums…

… he is running into the red EVERY month.


This is why there simply cannot be a sustainable recovery in the US economy. Because we outsourced our jobs, incomes fell. Because incomes fell and savers were punished (thanks to abysmal returns on savings rates) we pulled future demand forward by splurging on credit. Because we splurged on credit, prices in every asset under the sun rose in value. Because prices rose while incomes fell, we had to use more credit to cover our costs, which in turn meant taking on more debt (a net drag on incomes).

And on and on.

Does this mean the market is about to tank? Not necessarily, stocks have been disconnected from reality since November if not July. Bubbles (and we ARE in a bubble) take time to pop and this time around will be no different.

ya gotta love the "recovery"...

(thanks to kevin at cryptogon...)

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Monday, April 12, 2010

In 2010, there is absolutely no reason to equate a rising Dow Jones average with a good economy

by now, most everybody knows the dow is only an indicator of what's happening for the super-rich elites...
Dow Closes Above 11,000 on Earnings Optimism

The Dow industrials closed above 11,000 for the first time in almost 19 months on Monday as expectations of solid first-quarter earnings spurred buying in the financial, energy and industrial sectors.

The Dow Jones industrial average added 8.84 points, or 0.08 percent, to 11,006.19, according to the latest available figures.

i'm sure the chronically unemployed are cheered by this good news...

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Starting to look like fall here in Buenos Aires

some leaves are changing and falling on the streets and sidewalks... but spring is hitting most of the u.s. now with the cherry blossoms in d.c. almost past their peak...


so, wednesday night, i begin the long trek back to reno... yeah, i know... i'm just one of those "snowbird" wussies... at least i have the good grace not to winter over in arizona or florida...

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