Stuff that sucks

Here's a very depressing but very realistic summary of the current outlook on retirement. My 401(k) has lost about 1/3 of it's value. But I'm lucky because I'm 29 and have only been saving for 6 years. I hope I get most of that money back. But with the way the stock market is changing, should I still invest? Or has this whole idea of retirement been just a complete sham? It feels like it has been. I have no trust for anyone in management. I feel completely disillusioned. There is no hope for change, because all you end up with is a compromise that is not what you wanted to begin with.

Why Baby Boomers Suck:

I am a member of Generation Y. The generation that wants is all, that deserves it all. The generation that did get it all. We are a generation that thinks we all deserve trophies at the end of Little League, even though our team is 1-7. We are the generation that has multiple valedictorians not because they are all smart, but because our terrible education system just couldn't say No and pick just one. I detest Generation Y.

As a son of parents born in 1955, I am a product of a generation that grew up listening to stories about the horrors of WWII, but didn't have to experience anything remotely like that War. Its a generation that began to come of age during the so-called counter culture of the late 60's. It's ironic to think back to that generation. Rebelling against authority, then carrying that rebellious nature through the 70's until the previous generation is finally on the way out in the 80's and unleashing all that pent up energy in every conceivable way. It's where we are now.

The Environment is trashed. The economy is trashed. The past 30 years, my lifetime has been one huge fuck-up. If anything, the baby boomers will be known as the generation of huge rewards with no responsibility. All marketing with no substance. What has been presented to us is the packaged bacon in the store, and what is hidden is the huge pig farm, slaughterhouse and genetic pig engineering which is the actual reality and truth.

I feel like we have passed the point of no return. I feel like my son is going to grow up into a world of nothing but mess. I feel very ashamed to be a part of all this. We call this civilized society. This is not civilized. This is just as gory and messy as the African Savannah. If God is watching, he's got to be thinking that things have really gotten out of hand in a very bad way.

I love my Ipod Touch

I love my Ipod Touch. It keeps getting more and more great apps! It's pretty good for gaming, with Simcity, Fieldrunners, and Wolfenstein 3d. (I can't wait for Doom!). The Touch also shines in other apps. Today I just downloaded the Wall Street Journal App for free. It appears to be very similar to the New York Times app, meaning you get all the content for FREE! This is great! People complain about the banner ads being too big or whatnot. Big deal, it's free. So far, the performance seems ok. The NYT app was really flaky for awhile, then was upgraded to v2.0 which was very stable.

My wife has an iPhone, and it sucks as a phone. Lots of dropped calls. What's the point of a modern phone if it drops calls like it's 1998? If it didn't drop so many calls it would be an incredible phone. I'm so glad I don't have to pay for an iPhone contract.

Case of the Mondays

Angry and succinct! I love it!

For decades now, a driving principle of corporate America has been that the cure for any problem is to pay workers less, make them do more, and get rid of benefits.

Wall Street thinks it deserves a raise, and gives it to itself!

Huh?

This cartoon doesn't make much sense to me. I think the labels are wrong.

Say you keep the super tanker labeled 'Free Market'. Shouldn't the pirates be called 'Greedy bankers' with a destroyer off in the distance that is labeled 'Congress'. Wouldn't that make more sense? This cartoon seems like someone in a bank drew it.

I saw this cartoon on The Big Picture and reading the comments after the post a lot of people have similar feelings to mine about the picture.

Angry White Man and the EPA

There is a once-popular term in our culture, coined the Angry White Man. Michael Douglas has portrayed one and most would consider Rush Limbaugh as the stereotypical example. You don't hear this term very often anymore. It was very popular during Clinton, but after Bush came to power, the term faded away. I don't have any murderous streaks, nor am I a fanatical right-wing true believer. However, I am white and I am angry. I am angry with the past 8 years. I am angry with how a lot of my civil liberties have been taken away using fear. I am angry that the current Administration is being so nice to the bankers, while behaving in a very different manner to the auto industry. The seemingly bi-polar attitude is confusing and disappointing.

Now onto the EPA. I was watching Frontline tonight and they were talking about how the Chesapeake Bay and Puget Sound are really messed up from pollution. This caught my attention as I live in the Seattle area. A though occurred to me as I did dishes after the program: Why isn't anyone framing the big banks as big polluters? Wouldn't that help the public and Congress understand just how crazy-good some of these bankers have it? We all know about the term 'Toxic Assets' (now "Legacy Assets") so why don't opponents to the bailouts frame the argument that these banks have completely polluted our clean waters of the economy, and to let the polluters do the cleanup with taxpayers picking up the tab is just silly. Has anyone tried to frame the situation like that? Does that argument even work here? What's needed is an EPA-style Superfund cleanup. Now a Superfund cleanup usually makes the responsible party(s) do the cleanup, but there is a lot of government oversight involved during the cleanup to make sure that the cleanup actually happens. These bailouts and TARP just seem like we are writing blank checks, with very little oversight and complete trust that the banks will 'do the right thing'. TPM has a great report card on the Obama Administration, and I agree with the grades given. I voted for Obama and am very supportive, but I just feel completely disillusioned and disappointed with how he's been treating the banking management.

So as an opponent to the bank bailouts, I am calling these bankers economic polluters and it is time that they paid for the cleanup. Paid for the cleanup with money, shareholder losses, reputation losses, etc.

I emailed the Planet Money guys about the Bankers as Polluters idea, so we'll see if they respond to my comments.

Generational Analysis, and JC windshield cracks

So there is this very interesting article on Minyanville that talks about how the current generation that is in power, the Baby Boomers have continued their philosophy of me first, no sacrifice. While I don't quite agree with all the authors say, I do think that the idea of 100-year, 4 generation cycles does hold some merit.

Prophets of Doom

This is sorta ironic, because right now I'm reading the excellent Masters of Doom, but here is a list of people who disagree with Obama's economic policies.

More criticism for Obama's economic policies

This time from a Nobel Prize-winning economist.

GO M's!!

So watching the game last night made me feel really good about this team. Having Jr. back gives me a thrill, but if they were 2-7 I would feel really bad for him and the team. But they are off to such a hot start. The last time I saw Ichiro hit a grand slam was when my in-laws were in town, and guess what? My mother-in-law is visiting right now. Coincidence? Probably.

It's really nice to be looking forward to watch the game each night and have a feeling of excitement and not dread. Last year totally sucked for sports in Seattle. I haven't been this pumped for the team in awhile.

Solar we can believe in

Now this is cool. I've always wanted to install panels on my house, but the cost is crazy. We don't as many sunny days as California, but the panels still work on cloudy days. Anyways, tying the cost to my property tax and the house is brilliant. If I move, I don't have to pay for the panels anymore, as the panels are tied to the house, not my credit card. That makes great sense, because the new owner is getting the benefits from the panels and is helping to pay for them too. I hope this deal makes it up here.

Icahn do it!

Carl Icahn says management in failed companies should be thrown out, but not by the government but by the shareholders. Whatever the method, I agree!

The House Upon a Rock

President Obama draws on one of the classic parables from the Sermon on the Mount in a speech today about the economy. While this sounds great and trustworthy, this still doesn't match what actions the Treasury have been taking.

And his actions with the 'state secrets' and other recent DOJ activities doesn't invoke a house on a rock, but on sand.

More stimulus, please

So there are some articles out there that suggest that more stimulus is needed. I agree. It's strange to me that we have some people saying that this is a crisis of liquidity, and that if we just get the banks balance sheets stable, then they will start lending again and all will be well. But who will they lend to? Every month more and more data is coming in showing that demand is down and people are saving more, even though they are refinancing their homes because rates are so low. But the extra money that comes from refinancing is either being saved or being used to pay down debt, not got out and buy more stuff. Look at the chart below:


The last time that the amount of debt that everyone had matched GDP was in 1929. THAT wasn't a liquidity crisis then and the same holds true today. So that means that just adding more money to the banks won't help, because what's really going on is not a crisis in liquidity, but really is a huge market correction that we borrowed too much and now we have to pay off all that debt we accumulated. It's like the economy is a casino, and we as citizens are the patrons of that casino. We've been gambling all this money and have been winning some, but just borrowing more. But now the crisis is like our bookie has come to collect his tab, so we stop gambling to pay off the tab. But since we've stopped gambling, the casino isn't making money so everything stops, jobs are lost, etc. So the government steps in and says "We'll just pay off the bookies so that people will start gambling again." But people aren't gambling because they realized gambling is stupid, the bookies suck, and there are better things to do with your money. So what now?

Newt Gingrich was on ABC's 'This Week with George Stephenopolis' (spelling, I know) and he said one thing that I completely agree with: Just get out all the bad news now and take the hit in the market. I totally agree with that. You can't keep sweeping the bad news that the banks are in way over their heads under the rug because it's likely that the dirt under the rug is so huge that it will all come out anyways and just prolonging it won't help everybody. What's great about this approach is that you let the news out, things go really bad, worse then Lehman bad, and then you can sell another stimulus package to congress. Now you can avoid giving out more bailout money to these idiot banks who don't deserve it and should go under. On a side note, I just love hearing these bankers advocate for a free market with no regulation. That's fine, but if you want it that way you have to accept the good with the bad. But banks want it (and are getting it) both ways. When times are good, they get rich. When times are bad, they get bailed out and stay rich. If they are such advocates for 'free markets' then they should lose their shirts when times are bad. The banks are like spoiled children who know they can have it both ways and refuse to (or can't) see any other reality. I say SCREW THE BANKS. Yes, I know that probably hurts me, but I think I'll be fine in the long run, and I will be giving my son less debt when I'm old and it's his turn to help run things.

So the only way out of this, and to really, truly get the economy going again, is to create jobs and make it so that people are saving, but they are also spending. That means stimulus. Wages need to increase to offset the fact that people won't be using debt to purchase more stuff. That has proven to be unsustainable over the long period. But wage increases, which have been stagnant over the last few years, provide real growth and actual extra money to people to spend. People like the middle class that actually have to buy things to get by.

Uh-oh

Banks told not to reveal results of stress tests. While the reasons seem plausible, what happened to Obama's promise of transparency?

Why? Is this a good thing?

9/11 Conspiracies

A few years ago, my wife and I were attending a Mariners ballgame. Before we entered the stadium, we walked by a person who was handing out homemade DVDs that had a documentary about how 9/11 was a conspiracy. I watched the film out of pure curiosity, and the evidence is quite compelling. The biggest problem that I can't get over with the conspiracy theory is the conpirators motive. The reasons given have been pretty lame, ranging from attempts to destroy Enron documents house in 7 World Trade Center, to the new owner of the Towers wanted to collect the insurance money on the buildings. They reasons for motive just don't hold up. The most compelling motive is also the most ghastly. But the evidence does. So I am on the fence with this one.

For further reading:
Slate article about firefighters and 9/11
Fire Fighters for 9/11 Truth
Architects and Engineers for 9/11 Truth
More sites @ Wikipedia

Today's Lunch Hour reading

When you read something nice about Obama's team, use the Slate primer to get the full story.

Obama's inexperience may be leading us down the wrong path.

Conspiracy or just Bush-era arrogance?

The evidence is mounting that Obama's economic team really are bought and paid for by Wall Street. I won't rehash the whole story when Glenn Greenwald does such a good job already. I am becoming more and more disappointed (or disillusioned) with Obama and his choices for economic advisers. I just don't like the feeling I'm getting in my stomach over this. Not only is the economic team playing games, but the DOJ's behavior towards continuing to conceal the Bush torture memos, plus dropping all charges in the Senator Ted Stevens scandal. I'm getting the feeling that the incredible arrogance and power that the Bush/Cheney administration amassed and passed onto Obama is proving to be too tempting to not use or relinquish.

Update: Bill Moyers is in on the action.

According to Politico.com, at his March 27 White House meeting with the nation’s top bankers, President Obama heard similar arguments and interrupted, saying, “Be careful how you make those statements, gentlemen. The public isn’t buying that…. My administration is the only thing between you and the pitchforks.”

Stand aside, Mr. President, and let us prod with our pitchforks to get at the facts

Financial Advisor survey

So I recieved a call from my financial advisor's firm asking me to take a survey on the quality of the service I've recieved. Everything was fine until the last question, which was something about if my account had performed above the market. In, why would you even ask that in this current climate?

Opening Day!!!

GO MARINERS!!!

I'm becoming afraid again...

Jeffrey Sachs says it's too easy to game the system

What is incredible is that lack of the most minimal transparency so far about the rules, risks, and procedures of this trillion-dollar plan. Also incredible is the apparent lack of any oversight by Congress, reinforcing the sense that the fix is in or that at best we are all sitting ducks.

My kind of thinking

Bill Moyers interviewed William K. Black on his show last Friday. Of the many gems is this one:

Now, going forward, get rid of the people that have caused the problems. That's a pretty straightforward thing, as well. Why would we keep CEOs and CFOs and other senior officers, that caused the problems?

Where's Waldo?

Reality vs what's needed

Thomas Friedman has it right on the money:

My own sense is this: The Obama package represents the sum total of what was minimally necessary to prevent systemic breakdown, what was politically possible with a Congress that was in no mood to shell out another dime to bail out Wall Street, and what was operationally preferable — at this time — which was a strategy that did not require nationalizing Citigroup & Friends.

Blame and Rants

For dartboard pictures, go here. For reasons as to why you need a dartboard, go here.

In a previous post, I listed out several 'ideologies' that I claimed have shown to be defective. After further consideration, I can't blame the theories for the mess, but instead I have to blame their application. For example, on a basis of pure theory, Socialism is an excellent theory if you are interested in bringing improvement to all people of your society. But in order for Socialism to work, you have to have everyone believing that the only way to better themselves is through helping everyone out. The Bible is very good at talking about things like this. That's right. The Bible. Usury is bad, says the bible. I'm rambling. Anyways, Socialism doesn't work. I don't think it ever will work because human beings are selfish creatures by nature, but we like to think we hold ourselves to high standards. While their are many people who do uphold these ideals, overall we far more interested in helping ourselves before others. If you have a truly free market, and the participants of that market want to uphold that market ideal first and then make profit, then free markets will work. But profit always comes first. Take our favorite mustached TV personality John Stossel of 20/20. He had a special on last fall where he tried to explain the more government regulation was bad, and he used Ice Skating and Brian Boitano as a 'politically incorrect' example. Read about his special in his WSJ Op-Ed. I read this and thought, "This is bonkers. It completely misses the point." He is right if the free markets exist and the first priority is to keep the free market healthy and uphold the ideal, which is what the ice skaters were doing by just going around in an orderly fashion. But the current application of the free market doesn't have health as the first priority. The first priority is profit. So what Stossel should have done was have the 100 skaters start skating and then tell them that the first one to make 50 laps gets the $10 million dollars cash that he has in a box next to him on the ice for everyone to see. Oh, and there arent' any rules and no one gets in trouble for anything they do. Then he would have had a bloodbath on his hands. That is how our free markets have been working. Now, if you can guide that market then the benefits are enormous and impressive. But you have to guide it, not let it go whilly-nilly. Too much regulation is bad. Too little is just as bad. Its a fine line, and line that shifts constantly.

I work for a Fortune 500 company, and last fall it was eaten by another company that if it was public would be a Fortune 100 company. A lot of my cynicism has come about from working in a large American corporation. For those of you who aren't in a corporation, just read the Dilbert that I have at the bottom of this blog. That IS corporate America. It's astonishing. What I find so amusing and angering about this crisis is these CEOs and their boards. They folks get paid billions of dollars in compensation. How do they justify this extravagence in compensation? They say that it is because of all the responsibility that comes with their job. Uh-huh. But when crap starts hitting the fan, they throw up their arms and say "Hey, I didn't know about this, it's not my job, blah blah blah" and they defer the blame. So why are they getting all this money if they aren't taking the responsibility that they say they have to earn all that money? How can anyone justify getting paid millions of dollars and then cut 10% of their workforce and then not accept responsibility when things in the company go bad? Why not cut 50% of their pay and use the savings to keep their people employed? THAT is a stimulus. You keep the middle class employed and you look good in the public eye because as the one on top, you are making a service for the benefit of your employees. You are taking responsiblity for their welfare. That's great marketing. This is what a lot of small business owners are doing. They are trying to keep their people employed any way they can. Pay cuts for them are the order of the day. Yet we let our corporate leaders keep their money. It's too much, just too much.

The counter to why don't CEOs take a pay cut is because of the market. The market demands compensation for its investment in public companies. That's true, but the market is or has become very short-sighted. 70% of the American economy depends on consumerism. So if people aren't buying, the economy and all the public companies earnings goes belly up. So isn't it in the long-term interest of the market to keep people employed so consumerism is maintained? Yes, we've been trying to do that in the past 30 years, but we've been buying on credit. But that's the topic of another post.

Greed or Stupidity

So David Brooks is saying that there are two 'guiding theories' about how we got into this mess, and that you can either believe one or the other. But why not take it a step further? While I personally am leaning toward the greed narrative, why can't you have large oligarchies behaving stupidly? Isn't it a compelling argument to think that these giant banks and their hubris coupled with their computer models led them to think that they could grow to enormous size, hedge their bets, AND grab more power in Washington? What was stopping them? Uh, nothing! So we need to break the banks (everyone besides the banks seem to agree on this) and then stop them from getting fat and stupid again.

So how do you go about breaking the banks? My hope is that Geitner's stress tests are his way neutralizing the idea of nationalizing the banks. There is a lot of resistance to nationalizing, but if Geitner can point to the stress tests and say, "Look here, there's nothing left to do but nationalize." then he has queledl the debate against nationalizing. However, he could also be using the stress tests to hide just how bad the banks' balance sheets are and then throw more money at them. Now I know that sounds like I think that Geitner is a conspirator or something. He's not. I do think that his reliance on experts and his own experience does have a whiff of conflict of interest to it, and I do think that the Wall Street power players are leveraging that to their advantage.

No Worries!

So Brad DeLong thinks that the Geitner plan is all good. Is he correct? I don't know. The thing is, NOBODY knows. What is so bizarre about economics is that it is a fuzzy field. There are no real ways to prove a hypothesis correct. There is so much psychology tied into Economics that it is almost like predicting the weather. My hope for this blog is to help me keep track of my own lines of thinking in a orderly way on subjects where there is a lot of different opinion. Now, I'm not paying much attention to 'conservative' or 'right wing' economists, and that is mostly because I have given up on their ideas. Trickle-down, laissez-faire, Ayn Rand's Atlas Shrugged, Libertarianism. These are ideas that I think have had their chance. Now some are still arguing for these ideas, but I don't think they will get anywhere.

Now more doom.

Are we headed for a corporate state?

This isn't good. The more I read about Geitner's PPIP plan, the more I dislike it. William Greider agrees. James Kwak has some thoughts on current legislation being considered by Congress to deal with 'too big to fail' institutions.

AIG Schenanigans

If you weren't upset over the AIG Bonuses (and some, including Obama say they are merely a distraction) then this surely will upset you.

Thoughts on the Banking Crisis

So I can't figure out what to think about the banking crisis. On the one hand, I don't want to go through a huge depression, but on the other hand I don't want to return the financial industry to where things were at in 2006, which is what Geitner and co. seem to be trying to do with their current plans. There is some awesome debate going on between liberal economists, with a line having been drawn in the sand. On one side you have folks like Paul Krugman who think that enough hasn't been done, and on the other side you've got Brad DeLong who thinks that things might be ok. I think that Simon Johnson has made a bunch of good points in his article The Quiet Coup. But he is coming under criticizm for being a former employee of the International Monetary Fund, which some say are partly responsible for this mess.

See my links to the left for some excellent blogs that I follow.