Cheesehead,

I recommend gardening. It is relaxing exercise with a rewarding end.

Finance wise, is anyone else seeing evidence of a second economic dip? There are several small indicators that are now in the red in spite of slight easing of employment numbers in a few states. Consumers still not spending being one of the major concerns.

DarJones

[quote=Fusion_power;208397]I recommend gardening. It is relaxing exercise with a rewarding end.[/quote]Did that while a house-owner. Indian corn was visually interesting, and all else was fun and okay. No room in apartment now.

[quote]Finance wise, is anyone else seeing evidence of a second economic dip?[/quote]Slow-to-become-apparent commercial real-estate bombs.

[quote=cheesehead;208419]Did that while a house-owner. Indian corn was visually interesting, and all else was fun and okay. No room in apartment now.

Slow-to-become-apparent commercial real-estate bombs.[/quote]There's always room to do gardening. You just have to set expectations appropriately.

Examples:

Bonsai or cacti for the patient aesthete.
Potted flowering plants for decoration.
Potted ferns, aspidistras, etc, for dimly lit areas.
Windowsill salads, chilli bushes, herbs, etc for food.
Mushrooms in completely dark areas. :smile:

An alternative approach: [url]http://www.guerrillagardening.org/[/url]

Paul

[url]http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=container+vegetable+garden&x=0&y=0[/url]

"Social Security to start cashing Uncle Sam's IOUs"

[URL]http://news.yahoo.com/s/ap/20100315/ap_on_bi_ge/us_social_security_ious;_ylt=AsoHI3d8nymnukNXaOJwKHLjOrgF;_ylu=X3oDMTNjanZoYnA1BGFzc2V0A2FwLzIwMTAwMzE1L3VzX3NvY2lhbF9zZWN1cml0eV9pb3VzBGNjb2RlA21vc3Rwb3B1bGFyBGNwb3MDNgRwb3MDNgRzZWMDeW5fdG9wX3N0b3JpZXMEc2xrA3NvY2lhbHNlY3VyaQ--[/URL]

[quote]PARKERSBURG, W.Va. – The retirement nest egg of an entire generation is stashed away in this small town along the Ohio River: $2.5 trillion in IOUs from the federal government, payable to the Social Security Administration.

It's time to start cashing them in.

... This year, for the first time since the 1980s, when Congress last overhauled Social Security, the retirement program is projected to pay out more in benefits than it collects in taxes — nearly $29 billion more.

. . .

... to illustrate the government's commitment to repaying Social Security, the Treasury Department has been issuing special bonds that earn interest for the retirement program. The bonds are unique because they are actually printed on paper, while other government bonds exist only in electronic form.

They are stored in a three-ring binder, locked in the bottom drawer of a white metal filing cabinet in the Parkersburg offices of Bureau of Public Debt. ...

One bond is worth a little more than $15.1 billion and another is valued at just under $10.7 billion. In all, the agency has about $2.5 trillion in bonds, all backed by the full faith and credit of the U.S. government. ...[/quote]

Hairdresser, Oboeist "hazardous jobs" in Greece
 

[url=http://www.nytimes.com/2010/03/12/business/global/12pension.html]Patchwork Pension Plan Adds to Greek Debt Woes[/url]
[quote]Vasia Veremi may be only 28, but as a hairdresser in Athens, she is keenly aware that, under a current law that treats her job as hazardous to her health, she has the right to retire with a full pension at age 50.

“I use a hundred different chemicals every day — dyes, ammonia, you name it,” she said. “You think there’s no risk in that?”

“People should be able to retire at a decent age,” Ms. Veremi added. “We are not made to live 150 years.”

Perhaps not, but it is still difficult to explain to outsiders why the Greek government has identified at least 580 job categories deemed to be hazardous enough to merit retiring early — at age 50 for women and 55 for men.

As a consequence of decades of bargains struck between strong unions and weak governments, Greece has promised early retirement to about 700,000 employees, or 14 percent of its work force, giving it an average retirement age of 61, one of the lowest in Europe.

[b]The law includes dangerous jobs like coal mining and bomb disposal. But it also covers radio and television presenters, who are thought to be at risk from the bacteria on their microphones, and musicians playing wind instruments, who must contend with gastric reflux as they puff and blow.[/b][/quote]
[i]My Comment:[/i] You know, as a software engineer I am surely at risk from the bacteria on my keyboard and mouse ... think I`ll do the only reasonable thing and ask my employer to allow me to retire at 50 with a full pension.
[quote]According to research by Jagadeesh Gokhale, an economist at the Cato Institute in Washington, bringing Greece’s pension obligations onto its balance sheet would show that the government’s debt is in reality equal to 875 percent of its gross domestic product, which is the broadest measure of a nation’s economic output. That would be the highest debt level among the 16 nations that use the euro, and far above Greece’s official debt level of 113 percent.

Other countries have obscured their total obligations as well. In France, where the official debt level is 76 percent of economic output, total debt rises to 549 percent once all of its current pension promises are taken into account. And in Germany, the current debt level of 69 percent would soar to 418 percent.[/quote]
[i]My Comment:[/i] At just a bit north of 500% debt-to-GDP, the U.S. is not in much better shape here, but at least we can "hug our early retirees with our nuclear arms", or something.

BullCrap Des Tages (Housing Spin)
 

The U.S. government has borrowed/spent/printed literally trillions of dollars in a desperate attempt to re-flate housing prices ... two key planks of that, the homebuyer subsidy and (more importantly) the Fed`s $1.25 trillion MBS-purchase program (a.k.a. "Let`s deliberately overpay for a trillion-plus in toxic mortgage-backed securities garbage for which there is no private market in order to keep borrowing rates artificially low") are set to expire in the very near future. I predict - based on the fact that the housing market has been less than frothy even with the massive prop job, and banks are still delaying foreclosure on millions of underwater properties in order to put off the resulting balance-sheet hit - that once the props are removed, mortgage interest rates will quickly climb by anywhere from a half to a full percent, and the market will nosedive once again. Which is why I was amused to read this rather-different take on Bloomberg today - I've take the liberty of once again highlighting all the [B]optimistic verbiage[/B] for your subliminal reading pleasure:

[URL="http://www.bloomberg.com/apps/news?pid=20601103&sid=aR8gttX52VgE"]Housing Real-Estate Recovery Signaled as Fed Unwinds[/URL]: [I]The U.S. housing market is poised to withstand the removal of government and Federal Reserve stimulus programs and rebound later in the year, contributing to annual economic growth for the first time since 2006.[/I]
[quote][B]Increases in jobs, credit and affordable homes[/B] will help offset the end of the Fed’s purchases of mortgage-backed securities this month and the expiration of a federal homebuyer tax credit in April. [B]Sales will rise about 6 percent this year, and housing will account for 0.25 percentage point of the 3.6 percent growth[/B], according to forecasts by Dean Maki, chief U.S. economist for Barclays Capital in New York.

“[B]I would bet even odds that we’re at a bottom and that we’re going to see improvement in the coming months[/B],” said Karl Case, co-creator of the S&P/Case-Shiller Home Price Index and a professor of economics at Wellesley College in Wellesley, Massachusetts.

An [B]improving market would allay concerns[/B] at the Fed that sales will relapse after the tax credit expires. It would also give Fed Chairman Ben S. Bernanke and his colleagues, who meet this week in Washington, a freer rein to ultimately raise the interest rate for overnight loans among banks from near zero.
...
[B]Homebuilders’ shares reflect the optimism[/B]. The 12-member Standard & Poor’s Supercomposite Homebuilding Index [B]hit a five-month high March 9 on speculation the expanding economy will boost sales[/B].

Recent housing data have been mixed...[B]Sales of new homes still are forecast to increase this year as the economy improves[/B], according to David Crowe, chief economist for the association in Washington, probably totaling 459,000 in 2010, up from 372,000 last year, he said.

Employment is key to the outlook, according to Patrick Newport, an economist with IHS Global Insight in Lexington, Massachusetts.

“[B]When people get jobs[/B], that’s when they move or decide to buy a bigger house,” he said.

[B]The U.S. may add as many as 300,000 jobs in March, the most in four years, thanks to an improvement in the weather, government hiring of temporary workers for the census and a growing economy[/B], said David Greenlaw, chief fixed-income economist at Morgan Stanley in New York.[/quote][I]My Comment:[/I] Note how all the quoted "experts" keep prattling about "new jobs" and "the recovery" and "increased credit", but not one of them says a damn thing about *where* any of these wonderful "recoverylicious" developments is going to come from. Oh wait, I see the Morgan Stanley moron actually mentioned the census hiring ... as a driver of home purchases? You get a 3-month-long $22-per-hour temp job with the Census, and that`s gonna make you run and splurge on a new home? Of course not - so praytell, where are all the millions of new good-paying jobs which are going to drive this smart recovery in the [strike]real estate bubble[/strike] housing market going to come from? Wait, let me guess - from a wave of hiring in the homebuilding and real-estate-servicing sectors, right?

Jeez, these delusional sell-side twits make it so easy...the rest of this overlong hope-gasmic article is more of the same, so I'll just summarize all the hopeful spin:
[quote][B]“The underlying trend is turning positive,”[/B] said Bruce Kasman, chief economist at JPMorgan Chase & Co. in New York. ... [B]Solid Footing[/B] ...
[B]The economy is projected to grow 3 percent this year ... It expanded at a 5.9 percent annual pace in the fourth quarter, the most in more than six years ... Credit conditions may also be improving...“This is an important step in the right direction[/B],” Peter Hooper, chief economist at Deutsche Bank Securities in New York, and his colleagues wrote in a report to clients last month...[B]Mortgage originations for the purchase of a home will rise to $745 billion this year and $822 billion next year, the highest since 2008[/B], according to forecasts from the Washington-based Mortgage Bankers Association....[B]
Falling home prices and low mortgage rates have made homes more affordable[/B], according to the Realtors’ association...[B]The average household had 177.8 percent of the income needed to purchase a property in January, the highest since a record 184 percent in April 2009[/B], when mortgage rates tumbled to 4.78 percent, according to data from the Realtors’ association...“[B]We don’t anticipate a massive widening of spreads once the Fed stops buying[/B],” [Mahesh Swaminathan, a mortgage strategist at Credit Suisse Holdings USA in New York] said..Once the Fed completes its purchases, the next obstacle for the market is the expiration of the tax credit for first-time home buyers. [B]The original credit helped boost existing-home sales by 4.9 percent to 5.16 million in 2009[/B], according to the Realtors’ association. The credit, which was slated to end on Nov. 30, was [B]expanded and extended through April....It was “certainly positive[/B], but it has not fueled a huge increase in sales,” Ara K. Hovnanian, chairman and chief executive officer of Red Bank, New Jersey-based Hovnanian Enterprises Inc., the nation’s seventh largest homebuilder by revenue, told analysts on March 3....[B]An improvement in the job market would spur household formation and help absorb the excess supply[/B], said Thomas Lawler, a former economist with Washington-based mortgage company Fannie Mae who now is an independent housing consultant in Leesburg, Virginia....[B]There may be 1.25 million new households in 2010 if the economy continues to expand[/B], he said....“[B]If we get a rebound, you could see excess supply disappear very quickly[/B],” Lawler said...“[B]The underlying trend in home sales is for gradual improvement[/B],” Maki of Barclays Capital said. “While activity will remain at low levels for some time, [B]the housing bust is essentially over[/B].”[/quote][I]My Comment:[/I] I feel much more positivastic after reading that well-researched, balanced piece of investigative journalism. Think I may spend lunch today looking through the local real estate listings...

I was disappointed to hear Karl Case's (IMO vastly premature) bottom-calling, however, especially as he's not a sell-side analyst.

[QUOTE=ewmayer;208498][quote]According to research by Jagadeesh Gokhale, an economist at the Cato Institute in Washington, bringing Greece’s pension obligations onto its balance sheet would show that the government’s debt is in reality equal to 875 percent of its gross domestic product, which is the broadest measure of a nation’s economic output. That would be the highest debt level among the 16 nations that use the euro, and far above Greece’s official debt level of 113 percent.

Other countries have obscured their total obligations as well. In France, where the official debt level is 76 percent of economic output, total debt rises to 549 percent once all of its current pension promises are taken into account. And in Germany, the current debt level of 69 percent would soar to 418 percent.[/quote][/QUOTE]This just shows a miscomprehension (or, more likely, a will to to mislead) from that economist : the French and Greek pension schemes are not based on capitalisation but redistribution (the same is the case for a lot of other European countries.)

Jacob

Hey, he's from the Cato Institute. What else did you expect? Look at his bio. His area of specialty is "Entitlement reform" aka we must destroy it to reform it. Don't take these guys seriously. They are loonies.

[QUOTE=S485122;208516]This just shows a miscomprehension (or, more likely, a will to to mislead) from that economist : the French and Greek pension schemes are not based on capitalisation but redistribution (the same is the case for a lot of other European countries.)[/QUOTE]

"Redistribution" still means you have to take it from somewhere in order to redistribute it ... unless the amount current and future retirees paid into whatever redistributive scheme applies is enough to fund their entire (average) retirement, the resulting shortfall is an unfunded liability and as such should be counted toward the country's total obligations.

And if you think the U.S. social security is based on capitalization, you are confusing "intention" with "how it works in practice."

So c'mon guys, instead of just pulling a lazy shoot-the-messenger "oh, he`s a *conservative* ... we can just ignore him..." act, pray do tell: To what extent are the pension obligations of these oh-so-fiscally-prudent countries actually being funded by ongoing pay-ins? And what kind of "historical rate of investment return" do the various funding models assume in their calculus? (Hint: if it`s more than roughly 3% above inflation going forward, it`s highly unlikely to meet its long-term targets).

Garo, I'm disappointed in you - resorting to knee-jerk political-affiliation-based judgments rather than paying even the slightest attention to the substance of the argument. Name-calling and cheap labels as a way of dodging the effort of critical thinking, very nice.

---------------------------

[url=http://money.cnn.com/2010/03/15/news/international/greece_debt.fortune/index.htm]U.S. States: Teetering on debt collapse[/url]
[quote]NEW YORK (Fortune) -- The term PIIGS has been coined to refer collectively to Portugal, Italy, Ireland, Greece, and Spain. Aside from being a cute acronym, the term describes the actions of these countries very aptly as they have acted "piggish" in issuing debt to support overzealous government budgets. While the American media has at times made light of these countries and their PIIGS moniker, the same mistakes are at play in creating domestic pigs.

If PIIGS refers to nations that have overspent and are now overleveraging to pay for their deficits, the United States is feeding from the same trough.

There are two key ratios used to highlight when a government is reaching the crisis zone of fiscal imbalance: the debt-to-GDP ratio and deficit-as-a-percentage-of-GDP. Historically, a debt-to-GDP of north of 90% and a deficit-as-a-percentage-of-GDP north of 10% have been the lines in the sand to watch. As governments cross these barriers, they enter the Pig Zone.

While the leaders of Greece can try to blame speculators for their fiscal issues, the reality is that hedge funds are betting against Greece based on years of the country budgeting well beyond its means. The Greek leaders have managed their nation to a debt-to-GDP ratio north of 110% and deficit-as-a-percentage-of-GDP that exceeds 12.7%. Blaming speculators may be political convenient, but it doesn't change the facts.
[b]
As we watch the Greece situation unfold, the fiscal metrics in the United States become even more concerning. According to my estimates, the United States is running a debt-to-GDP ratio of 84% and deficit-to-GDP of almost 11%.

The United States last defaulted on debt in 1933 by refusing to repay certain bonds in gold as promised. While we are not suggesting that a U.S. debt default is anywhere near imminent, the ratios outlined above are concerning and do place our federal government squarely in the Pig Zone.[/b]

Furthermore, dig into fiscal imbalances at the state level and the picture gets even worse. According to a recent study by the Pew Center, a nonpartisan think tank, there is a $1 trillion gap between $3.35 trillion in pension, health care, and other retirement obligations on state balance sheets versus the $2.35 trillion in assets to cover them. This is a massive future budgetary gap, which will have to be funded, at least partially, by debt.

So, which states are in the worst shape? In fact, an estimated 41 state pension programs are less than 10% funded. In addition, only 5% of the $587 billion liability for current and future retiree health care and other non-pension benefits is currently funded.

In fact, to deal with massive deficits, totaling approximately $290 billion, many states have tapped into their rainy day funds in fiscal 2009 and 2010 at levels not seen since the 2001 recession. Moreover, several states have dried up their funds to balance their current budgets, including Alabama, Arizona, California, Connecticut, Maine, New Jersey, Ohio, Oklahoma, and Pennsylvania.

In the table below I have highlighted the states that we believe are in the most dire straits... [[url=http://money.cnn.com/2010/03/15/news/international/greece_debt.fortune/index.htm]Full Article[/url]][/quote]
[i]My Comment:[/i] The 6 states - based on the metrics he describes in the article - at the head of the author's debt-default class of 2010 are California, Arizona, Michigan, Nevada, Florida and Illinois ... Note the neat trick the U.S. learned since the 30s ... by decoupling one`s currency from a hard-money standard, one can "default in stealth mode" to any degree one likes, by debasing the currency. Now there are limits even to that stratagem (cf. Weimar, Zimbabwe), so far "it has served us well", allowing the U.S. (among other things) to maintain a massively bloated military and in effect be in a near-permanent state of war somewhere in the world for the past 70 years: WW2 (direct U.S. involvement from 1941-1945), the Cold War (1945-1990), Korea (1950-1953), Vietnam (1953-1967), Gulf War (1990-1991), Somalia/Haiti/Bosnia/Kosovo (1992-1999), War-On-Terror/Afghanistan/Iraq (2001-present). So when we say the U.S. and its allies "won the Cold War",what is really meant is that the Cold War ended up bankrupting the soviet Union first.

And the author concludes with an interesting historical note which points out yet another of the many assumptions the equity markets are making, which have a basis only in all-too-recent secular-bull-market history:

[i]"Historically, according to Moody's, municipal bonds have defaulted at a rate of less than 0.1% versus corporate default rates of 9.7%, and have been considered the ultimate secure investments. That, of course, hasn't always been the case. In fact, in the 1930s municipal bonds in the United States defaulted at a rate of more than 30%.

Many municipal bond funds continue to assume historically low default rates. As we dig into state-level finances, the facts suggest a different future. Astute investors have already begun selling municipal bonds. As Warren Buffett recently stated, insuring municipal bonds "has the look of a dangerous business." It's hard to disagree."[/i]

[QUOTE=ewmayer;208550]"Redistribution" still means you have to take it from somewhere in order to redistribute it ... unless the amount current and future retirees paid into whatever redistributive scheme applies is enough to fund their entire (average) retirement, the resulting shortfall is an unfunded liability and as such should be counted toward the country's total obligations.[/QUOTE]It seems that for most people from the Unites States of America (and the English) the social security systems of Europe are a complete mystery.

Your "unless" is wrong in more than one sense : in the repartition model the current working people pay for the current retired people. There is no unfunded liability because it is not a capitalisation model. It has worked for many generations. With the productivity gains the system is completely viable (even when the population decreases). And now I am going to use one "unless" : it is viable unless the share of what is produced that goes to the providers of capital increases abnormally. Perhaps a thorough study of the Scandinavian models would be profitable for people like those Cato Institute "economists". I am afraid they are not mentally able to understand it.

Jacob