Monday, November 22, 2010

The Tooth Fairy and Economic Realities

I visit a few different economic forums on a regular basis. One of my favourites is - I love that it provides articles on the micro including technical analysis and articles that focus on the macro which range from the psychology of trading to geo-political issues. I like that they have an active membership and that membership consists of divergent economic and political views. I have a learnt a lot there. Of course because it is an open forum, there are some viewpoints and comments I disagree with or find offensive. But, what the hey, I can always ignore those comments or respond to them.

But there are a few posters I just don't understand. Those are the posters that assume that this is just a temporary financial crisis and things will return to normal. Hmmm ... I don't think so. Just today Ireland is applying for an IMF/Euro bailout which will reward the insolvent banks for their bad behaviour (by propping them up) and penalize the middle and working classes by increasing their tax burden and cutting social services. Portugal and Spain are next. After that - the USA?

In any case - the Tooth Fairy. Recently, I had the opportunity to look after my 7-year-old neice and 4-year-old nephew for a week while their parents were out of town. I actually think I did a pretty good job - no cuts or bruises, kept them fed and somewhat clean and no major meltdowns with one exception.

The major meltdown came when the 7-year-old lost a tooth. Just listening to her and reading between the lines, I saw that she was questioning whether the Tooth Fairy was "real" or not. But she still wanted to believe. And somehow in her mind, she recognized that because her parents were away, the Tooth Fairy might not come - she likes science and thinks logically ;)

In the end the Tooth Fairy (moi) did come and delivered a little more than usual. My neice still is questioning but I think she has decided to extend and pretend for a little while (at least until she redeems all her baby teeth for cash).

I do see some parallels with some economic commentators and my niece. Children do not like change even though they are continually growing and changing - I think it is human nature. Some adults would like to see the economy go back to pre-crisis conditions  - or insist that it already has ... but ... I think we will need to grow and change whether we want to or not. When I look at all the data, logic tells me that we are in a sea change and may be in for stormy times ahead and to not look at, or plan for, those changes would be irresponsible.

Saturday, November 6, 2010

Bill Moyers Article - Highly Recommended

I came across a recent article by Bill Moyers which I highly recommend. The article is based upon notes for a speech delivered as part of Howard Zinn Lecture series at Boston University. In it, Moyers describes the current US governing system as a plutocracy or plutonomy and provides the historical context that shows how this state of affairs has come about. One fact I found especially interesting was Karl Rove's early fascination with Mark Hanna to whom the following quote is attributed:

"There are two things that are important in politics. The first is money and I can't remember what the second one is".

In the Moyer's article he describes increasing profits at Harley-Davidson mostly due to job cuts:

"Another story in the Times caught my eye a few weeks the one about Connie Brasel and Natalie Ford. The headline read: "Industries Find Surging Profits in Deeper Cuts." Nelson Schwartz reported that despite falling motorcycle sales, Harley-Davidson profits are soaring - with a second quarter profit of $71 million, more than triple what it earned the previous year. Yet Harley-Davidson has announced plans to cut fourteen hundred to sixteen hundred more jobs by the end of next year; this on top of the 2000 job cut last year."

And just today I saw this story posted on CNN (November 4 2010): Harley-Davidson to build bikes in India

Tuesday, November 2, 2010

Mid Term Elections: I Have Been thinking about this post for the last week

Just finished work and have not yet turned on my tv to hear about early results but I'm guessing I know where it its going to go. Bloodbath!

And it isn't that voters are voting for Republicans over Dems - voters are fed up with a two party system that supports corporate institutions over all else. Good article from Bruce Krasting about the failure of the democrats on understanding the issues.

On the other front, yeah the GOP has pushed millions in dollars for the tea party candidates and co-opted them - not at all what the original tea party represented:

Spiraling debt, dollar debasement, income disparity and lack of personal wealth - no wonder people are mad!

At this point not offering solutions just observing.