at some point we all have to talk about politics. i suppose it is ingrained in the American psyche from early on. (less now than with our parents) so lets see…

 Barrack Obama, he is the man! he wants to fix everything. i like that he has vision, that is great, i just wish that vision was less myopic. Sen. Obama wants to create more green-collar jobs (to the tune of an $160 BILLION dollar program), higher minimum wage (have you heard of inflation?), free/affordable health-care for everyone, and tax-free status for pensioners (even though employee pension plans are almost non existent nowadays). ALL great things… umm, one question? check please?!? where does all this money come from? SOMEONE has to pay. so we go back to our lesson on Social Security.

you pay in your whole life and then you get to be supported by the younger crowd when you are older. OK. great. lets look at a country that is arguably a perfect example of this. Germany, has social health-care and a wonderful pension program. which is supported by a 10% MANDATORY contribution to the State Pension fund on ALL income, 7% goes to the health-care system (both with an employer match). in addition to this, have you ever wondered why lots of Europeans ride bikes and walk? do you even know what gasoline costs over there? last time i bothered to do the Euro per liter/ Dollar per gallon exchange it was over $8/gal! still want to whine about our fuel prices?

So i think, maybe, he should explain a little better how he can accomplish all that he has promised, with no tax increase for, what did he say, 95% of Americans?

hmm… i think we should check the price of the meal before we order.

i have been having a fit over Bernake lowering the Fed rate to 2%… but i have been calming myself down and am starting to think a little more calmly.

it seems to me that continuously lowering the Fed makes for a shortsighted solution that is focused on the slowing economy. one that is more like a triage technique. it was good for when we first got in this pickle… but now that we are at the hospital, lets get some surgeons in here! we need to look at the whole picture, not just a slowing economy (imports are down and so are our exports), but the rising risk of inflation. I am in the party that says inflation is going to start causing a serious problem. we need to try to regulate that as best we can! cause as far as i can see we are looking at one of the worst inflation rates in decades if we don’t!

My colleague and i were discussing the problem of the Fed rescue net. it started with the discussion of Bear Sterns. 

As we all know Bear Sterns had a bit of a rough time… oh that’s right they are gone in a fire sale. a spectacular bonfire that consumed one of the biggest firms we had in the US.  it is my opinion that Bear could have actually pulled this gambit off, but just too many people were betting against them. that is ok. that is how risk works. c’est la vie.

my issue is actually with the Fed coming in to bail them out. now that we bailed them out, who do we bail out next? everyone. the Fed has to, they lost the choice to say: you dug this hole, climb out on your own. now every company and financial institution that finds itself exposed to too much sub-prime risk, will feel that it is “entitled” to help from the government.

my problem: what ever happened to personal responsibility? why do we, the tax payers, end up paying for every person that chose to defy logic and buy a home that they couldn’t afford? if they couldn’t pay the debt, it was supposed to reflect on their credit score and hence, how trustworthy they are. now they don’t even have to learn the lesson that is supposed to come from being burned. they don’t learn, because they know that the Fed is the safety net, they will always be bailed out.

This is not to say that someone can’t help them. if another institution wants to help that is fine! that is great. but, the Government can’t do this. it is only prolonging our misery. we are a democracy! not a Socialist regime! WE are the ones paying for all of this, that is the thing to remember when the Fed bails these people out.

just shy of $1000 per ounce. holy crap. i have even used this to hedge some of my portfolio. but you always need to be wary of this commodity, it has an almost completely negative beta.  negative beta means that if the market goes down, it will go up. that is why there are all those commercials on late at night about buying gold coins. when the economy goes to crap (as is the current market trend) the gold goes up.

just remember, as with all other things, sell when it is high. don’t keep it past its “due date.”

since i was filing my taxes today, i thought of this little problem that people have mentioned to me: 

there are many people that think that if the government needs more money they need to increase taxes. logic would dictate taxes are where the government gets all of its funding… and it is… but then again, it isn’t.

income taxes are a tiny part of where our sovereign’s money comes from. a pittance really. the majority of the US citizens are in the middle class that pays what? 15-25% ? that is nothing! 25% of 60k is only like 15k, that will never buy anything that our government needs. but the 34% they tax all corporations in this country? there is some real cash!

so the way that an income tax cut helps the economy is this: we have more money. we spend more on things that the corporations make/provide/etc.  then that corporation makes more money. then they give more of that money to the federal government, who buys more useless crap they don’t need and increase our national deficit. works out splendidly, right?