Misery Economic Theater 2011

[garo]

You don't. This is where a long-standing myth is busted and the fate of the individual becomes tied to that of the society he or she is part of.

[Christenson]

Originally Posted by garo

You don't. This is where a long-standing myth is busted and the fate of the individual becomes tied to that of the society he or she is part of.

Let's rephrase the question slightly then: How does an individual optimize his or her endgame, beyond preserving the ability to work and any job he or she may have? How to maximise the local effects of any savings?

[cheesehead]

Originally Posted by garo

You don't. This is where a long-standing myth is busted and the fate of the individual becomes tied to that of the society he or she is part of.

Same conclusion WOPR reached in "War Games":

"A strange game. The only winning move is not to play."

[Christenson]

Look, I know I'm going to lose something, we all are.....the question is how to minimize losses, since not playing (for example, by killing myself) isn't on my list of options. And I have this funny little bank account with a little bit of savings in it -- I want to maximise that. No, it's not with BoA...it's with someone else.

If it's about to become worthless, I might as well spend it now...or possibly join everyone else in owing a bunch of $$, because I'll be able to pay them off soon with much cheaper $$. 10 grand would make a nice GIMPs computer farm, don't you think?

[xilman]

Originally Posted by Christenson

Look, I know I'm going to lose something, we all are.....the question is how to minimize losses, since not playing (for example, by killing myself) isn't on my list of options. And I have this funny little bank account with a little bit of savings in it -- I want to maximise that. No, it's not with BoA...it's with someone else.

If it's about to become worthless, I might as well spend it now...or possibly join everyone else in owing a bunch of $$, because I'll be able to pay them off soon with much cheaper $$. 10 grand would make a nice GIMPs computer farm, don't you think?

Diversify as much as you are able. Some things will do better than others. If you've no idea which are going to be worse than other things, spreading your bets mean you don't lose as much if you get unlucky. Admittedly, you don't gain as much if you get lucky.

It's what I've been doing in recent times.

Paul

[Christenson]

OK, roll back the clock..it's 1990, you are in Japan...what was the BEST way to invest money? What was the BEST way to get or keep a job?

[xilman]

Originally Posted by Christenson

OK, roll back the clock..it's 1990, you are in Japan...what was the BEST way to invest money? What was the BEST way to get or keep a job?

Exactly what I said before: diversify.

Learn new skills and put them into practice. Meet people who work in fields different from your own --- network, in the sociological sense. Publicise your achievements and capabilities.


Paul

[ewmayer]

Amid all the emotionally-laden 9/11 reminiscences in the US media the past few days (which I've been doing my best to avoid, but it's impossible to not catch a random snip at least a half-dozen times a day if one wishes to leave the house and see other humans), I've heard precious little about the ongoing ruinous (and largely self-inflicted economic damage in the decade since by the "lapel-pin patriots" in the MSM.

The local paper had a piece about the effects on air traffic out of San Jose metro airport - the quote that really grabbed me was the last bit of the article:

New normal in post-9/11 aviation turns friendly skies into fortress in the clouds

Rules of engagement at the airport are always changing. Just this week, Homeland Security Secretary Janet Napolitano said she expected improvements in screening technology to do away with the hated requirement to remove shoes. However, it will take more than that to restore the friendly skies of pre-9/11 America.

George Donohue was the Federal Aviation Administration official who devised the screening system that was hurried into airports after the attacks. Now a critic of what he calls "security theater," he said most the system's current defenses are designed to stop "the stupid terrorist."

He no longer flies commercially if he can avoid it.

"I hate it now," he said. "It's like entering a police state."

And popular editorial cartoonist Mike Luckovich echoes the sentiment.

[ewmayer]

There was an amusing op-ed by NYT opinion columnist Gail Collins reprinted over the weekend in the local paper - see if you can spot the non sequitur:

Debating With the Stars

The Republican nominating campaign has thus far been one long primal scream from party members desperate to avoid making Romney their nominee. Really, they will look at anybody. Remember the Donald Trump moment? Michele Bachmann, Front-Runner? Who knows where their glazed eyes will turn next? Rudy Giuliani is now running around saying that he might get in the race “if I think we are truly desperate.”

Which they would really, really, really have to be.

The current front-running Mitt Alternative is Rick Perry, possibly the first major presidential candidate opposed to the direct election of U.S. senators since the advent of the Bull Moose Party. He did not do anything superweird at his maiden presidential debate, unless you count bouncing up and down and cocking his head a lot. Or claiming that the reason a quarter of the Texas population has no health insurance is because of government interference.

And Romney cleaned Perry’s clock on Social Security. Young Americans, if you dream of someday running for president, try not to write any books calling Social Security a Ponzi scheme.

I`ve heard similar variants on this theme which start with Perry`s skepticism vis-a-vis evolution and global warming (indeed ludicrous) and segue into a similar "...and let`s not even talk about Perry`s views on Social Security."

For readers (especially non-U.S. readers), the bit about "Romney cleaned Perry’s clock" refers to Mitt Romney taking Perry to task about Perry`s claim that Social Security is "a Ponzi scheme". That scored Romney some cheap PR points with progressives and SS recipients who have a vested interest in believing SS is a well-run social-safety-net program. So the easy way to belittle Perry`s take on Social Security is to lump it with his genuinely nutty statements on no small number of other issues.

Except that - darn facts, they can be such stubborn things - on this particular issue Perry happens to be correct: As run for at least the past 30 years and in its resulting current state, Social Security really *is* a Ponzi scheme. Bruce Krasting explains:

I’ve looked up a few definitions of what a Ponzi scheme is. This one is from an excellent source. The Securities and Exchange Commission defines a Ponzi as:

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.

Does Social Security constitute a Ponzi based on that definition? I think it does.

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

European markets hit again today, but here in the U.S., timely late-afternoon rumors of China bailing out Italy (yes, you read that right), ludicrous as they obviously were, sufficed to provide the cover for the oh-so-frequent last-hour market ramp-job. A ZeroHedge reader traced the rumors to "well-placed" sources:

The Financial Times has reported that there were unidentified Italian officials who had claimed that "those-a Chinese, they-a wanna a buya our bonds and stocks and every-a-ting-a." We wish to emphasize that this report was filed based on anonymous tips placed by untraceable cellular phones from men with very thick Italian accents claiming that our reporters should "just-a trust-a us, capeche?"

And the HFTs are clearly good at capeche-ing:

[fivemack]

Originally Posted by Christenson

OK, roll back the clock..it's 1990, you are in Japan...what was the BEST way to invest money? What was the BEST way to get or keep a job?

If you're in Japan, you get your job the year after graduating from university and you stay in it until you retire; with the big conglomerates, job security is still essentially perfect.

As for investment, basically you invested outside Japan; go for the US until the dot com bubble, take it out and keep it under the sink, back in on 9/15/01 and out in 2007. From about mid-2007, keeping the money in a bank in Japan wasn't a bad idea, at least if you like buying things that are priced in dollars - your yen buy nearly twice as many dollars now as they did then.

But hindsight is an unrealistically good investment measure, and the problem is that the world, rather than just Japan, is entering a zero-return state. And diversifying outside the world is quite difficult.

Buying the dips, like most other strategies, works until it doesn't; I've lost more on the stock market since July than I've received in my pay packets this year.

[ewmayer]

A solar-roofing firm in my area is using an interesting anti-Wall-Street angle in their latest TV ad:

PetersenDean: "The financial markets are just nuts"


And speaking of putting one's money in places where it will do good, last week`s "support your local prime-number-related forum" donation drive was a resounding success. Thanks to all the MET2011 readers who helped buy Our Dear Forum another year`s worth of bandwidth - you know who you are.