Another American holiday tradition: honoring our fallen soldiers by gouging travelers at the gas pumps.
Memorial Day is a day set aside to honor those who sacrificed their minds, bodies and lives defending our freedoms.
In recent decades many of our fallen heroes died in conflicts that also threatened the supply line and profit margins of big oil companies. To show it's gratitude Big Oil, along with Wall Street speculators, has kept the price of oil high.
Gee. Thanks.
While the price of oil does have a large part in the cost of gas, it isn't the only factor. For the past couple weeks the cost of oil has dropped almost $15 per barrel.
Big Oil doesn't produce the gas we use in our vehicles. Refineries do that. (Though some refineries are owned in part or outright by Big Oil.) The refineries in this country seem to be quite profitable despite running at 57 - 80% of capacity.
Where I live, there is a big refinery less than a mile outside of town. The gas stations in town that carry the brand of gas made at the refinery are always among the highest priced.
Either those gas stations are padding their profit margins by selling cheap "mother-company" gas for outrageous prices or the refinery itself is overcharging.
I suspect it may be both.
Which leads me to my next thought.
Usually gas stations don't make much on the sale of gas. They make most of their money selling the overpriced junk food, beverages and trinkets inside their store. However; I suspect they pad their fuel profits a bit more just before, during and after every major travel holiday.
Whether its just one link in the chain or the whole line that is gouging us at the gas pump, the end result is the same. They are grossly profiting from the deaths of our fallen soldiers who sacrificed their lives for higher ideals than increased profit margins.
Note: To our men and women in uniform, past and present, and to their families - thank you.
Comments
Please, keep your comments clean, civil and relevant. Cussing with foul language just for the sake of using foul language only proves the person to be an obnoxious, dull-witted fool.
The thoughts, opinions, and concerns of just one of millions of Americans who've fallen through the cracks.
Monday, May 28, 2012
Wednesday, May 16, 2012
Shabby's Economic Indicator
Earlier Ol’Shabby had a few thoughts collide to form an idea for a simple, straightforward economic indicator.
An economic indicator may be a report, a statistic, a regularly occurring seasonal trend, or any combination of those things. Economists use economic indicators to determine what is going on in the economy and to make predictions of the future.
(Given their track record over these past few years, most economists are either the class drop-outs, doing too many drugs, live on another planet, or are paid to NOT say what they really think.)
My idea for an economic indicator is based on two observations.
First, walking around my neighborhood and driving around town, I notice a lot of homes for sale. By the overgrowth of grass and shuttered windows some of those places look like they’ve been on the market for quite awhile.
Second, the local newspaper’s help-wanted section used to span several pages. In recent years it has dwindled to a handful of help-wanted ads in a single column. Most of the jobs listed are part-time, temporary, seasonal or on-call. Rarely is a job opening posted that would pay enough to afford one of the homes for sale.
Put these two observations together and you get this:
When the number of homes for sale far exceed the number of available jobs that pay enough to afford those homes, you don’t have an economic recovery!
Yeah, I know this flies in the face of what the main stream media is pumping out. Radical and revolutionary ideas like this usually do.
In the meantime, I’ll be waiting for my Nobel Peace Prize in Economics and my Pulitzer Prize for Creative Writing. They may be one and the same.
Comments
Please, keep your comments clean, civil and relevant. Cussing with foul language just for the sake of using foul language only proves the person to be an obnoxious, dull-witted fool.
An economic indicator may be a report, a statistic, a regularly occurring seasonal trend, or any combination of those things. Economists use economic indicators to determine what is going on in the economy and to make predictions of the future.
(Given their track record over these past few years, most economists are either the class drop-outs, doing too many drugs, live on another planet, or are paid to NOT say what they really think.)
My idea for an economic indicator is based on two observations.
First, walking around my neighborhood and driving around town, I notice a lot of homes for sale. By the overgrowth of grass and shuttered windows some of those places look like they’ve been on the market for quite awhile.
Second, the local newspaper’s help-wanted section used to span several pages. In recent years it has dwindled to a handful of help-wanted ads in a single column. Most of the jobs listed are part-time, temporary, seasonal or on-call. Rarely is a job opening posted that would pay enough to afford one of the homes for sale.
Put these two observations together and you get this:
When the number of homes for sale far exceed the number of available jobs that pay enough to afford those homes, you don’t have an economic recovery!
Yeah, I know this flies in the face of what the main stream media is pumping out. Radical and revolutionary ideas like this usually do.
In the meantime, I’ll be waiting for my Nobel Peace Prize in Economics and my Pulitzer Prize for Creative Writing. They may be one and the same.
Comments
Please, keep your comments clean, civil and relevant. Cussing with foul language just for the sake of using foul language only proves the person to be an obnoxious, dull-witted fool.
Tuesday, May 15, 2012
Jelly Bean Inflation
The other day I had a craving for jelly beans. So on my way home I pulled in to one of the two grocery stores in town to buy a pound of jelly beans.
I remember, when I was a kid, there was a five-and-dime in the town near where I grew up. Inside the store was a long, u-shaped glass counter and behind the glass were bins and trays full of different sweets and sugary delights. For a dime, a white paper bag containing a pound (usually topped off with an extra large scoop) of jelly beans could be had.
This and other old memories began to surface as the now adult me walked towards the bulk-candy section of the grocery store.
As I stood under the large hanging sign that proclaimed “SAVE BY THE POUND!” my memories of yesteryear were smacked-down by the reality of today.
$3.99 for a pound of generic jelly beans.
What the . . . ?
Ah, come on!
These are just generic, no-name, balls-of-sugar-and-food-coloring, jelly beans.
Four bucks?!
(And this didn’t include sales tax yet!)
I looked over the next couple bins to where the gourmet “Jelly Belly” brand was stored.
Oh, they only want $8.99 for a pound of those things.
Phttt!
I walked out of that store and drove to the other grocery store in town.
The second grocery store doesn’t have a bulk-candy section. The candy is sold, prepackaged, in one of the aisles.
$1.79 for a 15oz (not quite a full, 16oz pound) plastic bag of the store brand (generic) jelly beans.
$1.79?
Just shy of a pound?
I bought a bag to satisfy my sweet tooth and hoped the sugar rush would ease my depression caused by seeing massive inflation in real-time.
Comments
Please, keep your comments clean, civil and relevant. Cussing with foul language just for the sake of using foul language only proves the person to be an obnoxious, dull-witted fool.
I remember, when I was a kid, there was a five-and-dime in the town near where I grew up. Inside the store was a long, u-shaped glass counter and behind the glass were bins and trays full of different sweets and sugary delights. For a dime, a white paper bag containing a pound (usually topped off with an extra large scoop) of jelly beans could be had.
This and other old memories began to surface as the now adult me walked towards the bulk-candy section of the grocery store.
As I stood under the large hanging sign that proclaimed “SAVE BY THE POUND!” my memories of yesteryear were smacked-down by the reality of today.
$3.99 for a pound of generic jelly beans.
What the . . . ?
Ah, come on!
These are just generic, no-name, balls-of-sugar-and-food-coloring, jelly beans.
Four bucks?!
(And this didn’t include sales tax yet!)
I looked over the next couple bins to where the gourmet “Jelly Belly” brand was stored.
Oh, they only want $8.99 for a pound of those things.
Phttt!
I walked out of that store and drove to the other grocery store in town.
The second grocery store doesn’t have a bulk-candy section. The candy is sold, prepackaged, in one of the aisles.
$1.79 for a 15oz (not quite a full, 16oz pound) plastic bag of the store brand (generic) jelly beans.
$1.79?
Just shy of a pound?
I bought a bag to satisfy my sweet tooth and hoped the sugar rush would ease my depression caused by seeing massive inflation in real-time.
Comments
Please, keep your comments clean, civil and relevant. Cussing with foul language just for the sake of using foul language only proves the person to be an obnoxious, dull-witted fool.
Wednesday, February 22, 2012
Greek Default, Eurozone CDSs, American Banks on the Hook
A Greek default will cause big problems for Europe, America, and the rest of the world.
Greece has been on the verge of default for a couple years now. But each time Greece has been just about ready to go under, the Eurozone leaders and central banks cobble together some last minute scam, I mean, plan to keep Greece afloat and kick the can a little farther down the road. Then about a month later the whole thing unravels and the big wigs come up with another con, er, conjure up another plan to save Greece.
Detect any sarcasm there?
(And to clarify... the "Eurozone" is not the same as the continent of Europe. The Eurzone refers to the countries in Europe that use the Eruo as their currency. Not all of the countries in Europe use the Euro so those countries are not part of the Eurozone.)
If Greece is in such dire straights, then why is it that most the talking and deal making is done by the leaders of France (Nicolas Sarkozy) and Germany (Angela Merkel) and not so much from the leader of Greece?
It's because the French and German banks hold most of Greece's debt.
If Greece goes down, the large French and German banks will go down soon after. Those banks will drag down many other banks in Europe and the US.
Yup. The big banks in the US have got their hands caught in this cookie jar too.
The big American banks insured the big French and German banks with credit default swaps (CDSs).
Remember the big stink about AIG?
Back in 2008/2009 when all the big American banks were in trouble, AIG was the patsy stuck holding the bag and went down in flames because of CDSs. Now the shoe is on the other foot and the big American banks are stuck holding the CDS bag when the European banks get pulled under by Greece defaulting on its debts.
There are many theories as to what will happen when that time comes... and it will come.
One school of thought is that the Eurozone leaders won't allow Greece to officially default, thus triggering the credit default swaps that would most likely destroy what's left of the European and American economies.
(Turd Furguson Metals Report - Why Greece Matters and What It Means To You
http://www.tfmetalsreport.com/blog/3415/why-greece-matters-and-what-it-means-you)
Technically, mathematically, by all rights and definition, Greece will default but the Eurozone leaders and central bankers will demand, command, and strong-arm if they have to, every party involved not to declare Greece's default a default.
It's banana pudding.
It's flying pigs and polka-dotted elephants.
Call it whatever you want, but it is not, under any circumstances, a default.
(In the best Marlon Brando, Godfather impression you can muster.) - Capiche?
Another school of thought is that there are too many players and too many variables involved in this Greek tragedy to control so the whole thing is going to get real messy no matter what anybody does.
(The Economic Collapse Blog - 8 Reasons Why The Greek Debt Deal May Not Stop A Chaotic Greek Debt Default
http://theeconomiccollapseblog.com/archives/8-reasons-why-the-greek-debt-deal-may-not-stop-a-chaotic-greek-debt-default)
The banks, on either side of the pond, aren't coming clean as to how much they are truly exposed to Greek debt.
There are speculators betting big on Greece defaulting. We've seen what speculators can do to the price of oil, now similar sharks are sensing Greek blood in the Mediterranean waters.
Greece is going to have elections in April and the next batch of Greek politicians may give the Eurozone leaders and central bankers the finger.
And wouldn't it be convenient if there were some big global event to take people's attention away from the economic messes in Europe and the US?
Something, like... oh, maybe another world war kicked off by Israel and Iran?
Greece isn't the only headache for world leaders that could be conveniently snuffed-out by global war.
Then there is always the chance, however slim, that somehow this whole thing sorts itself out and there will be no big calamity.
Yeah, I'm not buying that one either.
The longer those involved keep denying and lying about the eventual default of Greece the worse it will be for the rest of us.
Comments
Please, keep your comments clean, civil and relevant. Cussing with foul language just for the sake of using foul language only proves the person to be an obnoxious, dull-witted fool.
Related Links:
Turd Furguson Metals Report - Why Greece Matters and What It Means To You
http://www.tfmetalsreport.com/blog/3415/why-greece-matters-and-what-it-means-you
The Economic Collapse Blog - 8 Reasons Why The Greek Debt Deal May Not Stop A Chaotic Greek Debt Default
http://theeconomiccollapseblog.com/archives/8-reasons-why-the-greek-debt-deal-may-not-stop-a-chaotic-greek-debt-default
Greece has been on the verge of default for a couple years now. But each time Greece has been just about ready to go under, the Eurozone leaders and central banks cobble together some last minute scam, I mean, plan to keep Greece afloat and kick the can a little farther down the road. Then about a month later the whole thing unravels and the big wigs come up with another con, er, conjure up another plan to save Greece.
Detect any sarcasm there?
(And to clarify... the "Eurozone" is not the same as the continent of Europe. The Eurzone refers to the countries in Europe that use the Eruo as their currency. Not all of the countries in Europe use the Euro so those countries are not part of the Eurozone.)
If Greece is in such dire straights, then why is it that most the talking and deal making is done by the leaders of France (Nicolas Sarkozy) and Germany (Angela Merkel) and not so much from the leader of Greece?
It's because the French and German banks hold most of Greece's debt.
If Greece goes down, the large French and German banks will go down soon after. Those banks will drag down many other banks in Europe and the US.
Yup. The big banks in the US have got their hands caught in this cookie jar too.
The big American banks insured the big French and German banks with credit default swaps (CDSs).
Remember the big stink about AIG?
Back in 2008/2009 when all the big American banks were in trouble, AIG was the patsy stuck holding the bag and went down in flames because of CDSs. Now the shoe is on the other foot and the big American banks are stuck holding the CDS bag when the European banks get pulled under by Greece defaulting on its debts.
There are many theories as to what will happen when that time comes... and it will come.
One school of thought is that the Eurozone leaders won't allow Greece to officially default, thus triggering the credit default swaps that would most likely destroy what's left of the European and American economies.
(Turd Furguson Metals Report - Why Greece Matters and What It Means To You
http://www.tfmetalsreport.com/blog/3415/why-greece-matters-and-what-it-means-you)
Technically, mathematically, by all rights and definition, Greece will default but the Eurozone leaders and central bankers will demand, command, and strong-arm if they have to, every party involved not to declare Greece's default a default.
It's banana pudding.
It's flying pigs and polka-dotted elephants.
Call it whatever you want, but it is not, under any circumstances, a default.
(In the best Marlon Brando, Godfather impression you can muster.) - Capiche?
Another school of thought is that there are too many players and too many variables involved in this Greek tragedy to control so the whole thing is going to get real messy no matter what anybody does.
(The Economic Collapse Blog - 8 Reasons Why The Greek Debt Deal May Not Stop A Chaotic Greek Debt Default
http://theeconomiccollapseblog.com/archives/8-reasons-why-the-greek-debt-deal-may-not-stop-a-chaotic-greek-debt-default)
The banks, on either side of the pond, aren't coming clean as to how much they are truly exposed to Greek debt.
There are speculators betting big on Greece defaulting. We've seen what speculators can do to the price of oil, now similar sharks are sensing Greek blood in the Mediterranean waters.
Greece is going to have elections in April and the next batch of Greek politicians may give the Eurozone leaders and central bankers the finger.
And wouldn't it be convenient if there were some big global event to take people's attention away from the economic messes in Europe and the US?
Something, like... oh, maybe another world war kicked off by Israel and Iran?
Greece isn't the only headache for world leaders that could be conveniently snuffed-out by global war.
Then there is always the chance, however slim, that somehow this whole thing sorts itself out and there will be no big calamity.
Yeah, I'm not buying that one either.
The longer those involved keep denying and lying about the eventual default of Greece the worse it will be for the rest of us.
Comments
Please, keep your comments clean, civil and relevant. Cussing with foul language just for the sake of using foul language only proves the person to be an obnoxious, dull-witted fool.
Related Links:
Turd Furguson Metals Report - Why Greece Matters and What It Means To You
http://www.tfmetalsreport.com/blog/3415/why-greece-matters-and-what-it-means-you
The Economic Collapse Blog - 8 Reasons Why The Greek Debt Deal May Not Stop A Chaotic Greek Debt Default
http://theeconomiccollapseblog.com/archives/8-reasons-why-the-greek-debt-deal-may-not-stop-a-chaotic-greek-debt-default
National Credit Rating Downgrade Costs Us All
The downgrade of the US's credit rating, by relation of the currency, downgrades the credit worthiness of every corporation, business, organization and person in the country.
(Reuters - United States loses prized AAA credit rating from S&P
http://www.reuters.com/article/2011/08/06/us-usa-debt-downgrade-idUSTRE7746VF20110806)
In a mostly debt based economy like the US's, credit worthiness is a big deal. That's why so many people with credit cards and people who are trying to get a home loan (or any kind of loan for that matter), obsess about their FICO score (their personal credit rating). A downgrade of credit worthiness makes it much harder to get loans and harder to pay off existing loans.
Here's how the some of the cascading affects of a national credit downgrade costs us all.
There are other AA+ rated countries in the world who have a much, much lower debt-to-income ratio than the US. That low debt-to-income makes those other AA+ (and the AAA) countries more attractive to global investors.
If you were a global investor, who would you feel more secure about lending money to - a nation that is bankrupt and governed by dysfunctional politicians or a nation that has very little debt and is governed sensibility?
(Hint - The US lost its AAA rating because of too much debt and incompetent politicians.)
Since America's economy is based mostly on debt, the country depends on cheap loans from foreign investors (lenders).
Other countries that have a stable currency, low debt, and positive economic growth are far more attractive to investors than the US. To win back those investors the US has to sweeten the pot by paying the investors (lenders) higher interest rates to get the loans and credit the US needs to function.
Higher interest rates for the federal government will result in higher taxes for the rest of us in order to pay for the rate increases.
Here's the double-whammy. A lot of interest rates on consumer credit and debt are based on the federal interest rates. The higher the federal interest rate goes the higher the consumer interest rates will go.
Higher taxes and interests rates for the general public could be enough to push the nearly flat-lining US economy into a full-fledged economic depression worse than the Great Depression of the 1930's.
The only way now for the US government to afford higher interest rates is to print more money in addition to the trillions of excess that have already been printed. This has a very high risk of triggering hyperinflation.
We're not just getting hit by the federal government debt; we're also getting smacked hard from all levels of government debt all the way down to local, small-town-USA debt.
Now with the best infomercial announcer voice you can image, "But wait... there's more!"
It's not just interest rates on government debt that's going up, it's also the interest rates on any bonds that businesses issue. You know, the places were people work?
Might explain why you haven't gotten a meaningful raise, if any at all, in such a long time.
Any time a government or a business sells bonds they are taking out loans, going into debt.
A bond is a type of loan, to paid with interest. Governments and businesses issue bonds to raise more money to pay for things.
For example; a city council votes to approve a bond issue to build an addition to the school so the school can handle the growing number of students. Investors give the city money in exchange for IOUs (bonds) to be paid back with interest by the city over a specified period of time.
The interest rate of many bonds is based on the interest rate for US federal bonds. If the interest rate for federal government bonds go up so will the interest rates on many other bonds throughout the country.
Higher interest rates make it more expensive for bond issuers (like the city in the above school bond issue example) to get the money they need for growth (more classrooms), maintenance (bridge repair), disaster recovery (flooding) or anything else they need loans for.
When bond issuers can't afford to pay the higher interest rates bond buyers (investors/lenders) are demanding (interest rate hikes) then the bond issuers can't get any more credit. This is a form of credit freeze. A credit freeze in a debt based economy means a lot of things come to a grinding halt - for everyone.
By losing it's AAA credit rating, the US government now has to pay higher interest rates on its debts. Taxpayers have to pay higher taxes to pay for those higher interest rates on government debt as well as paying higher interest rates on their own debts because those interest rates are based on the federal interest rates.
This compounding of interest on all debts, both public and personal, are costing us all dearly.
Comments
Please, keep your comments clean, civil and relevant. Cussing with foul language just for the sake of using foul language only proves the person to be an obnoxious, dull-witted fool.
Related Links:
Reuters - United States loses prized AAA credit rating from S&P
http://www.reuters.com/article/2011/08/06/us-usa-debt-downgrade-idUSTRE7746VF20110806
(Reuters - United States loses prized AAA credit rating from S&P
http://www.reuters.com/article/2011/08/06/us-usa-debt-downgrade-idUSTRE7746VF20110806)
In a mostly debt based economy like the US's, credit worthiness is a big deal. That's why so many people with credit cards and people who are trying to get a home loan (or any kind of loan for that matter), obsess about their FICO score (their personal credit rating). A downgrade of credit worthiness makes it much harder to get loans and harder to pay off existing loans.
Here's how the some of the cascading affects of a national credit downgrade costs us all.
There are other AA+ rated countries in the world who have a much, much lower debt-to-income ratio than the US. That low debt-to-income makes those other AA+ (and the AAA) countries more attractive to global investors.
If you were a global investor, who would you feel more secure about lending money to - a nation that is bankrupt and governed by dysfunctional politicians or a nation that has very little debt and is governed sensibility?
(Hint - The US lost its AAA rating because of too much debt and incompetent politicians.)
Since America's economy is based mostly on debt, the country depends on cheap loans from foreign investors (lenders).
Other countries that have a stable currency, low debt, and positive economic growth are far more attractive to investors than the US. To win back those investors the US has to sweeten the pot by paying the investors (lenders) higher interest rates to get the loans and credit the US needs to function.
Higher interest rates for the federal government will result in higher taxes for the rest of us in order to pay for the rate increases.
Here's the double-whammy. A lot of interest rates on consumer credit and debt are based on the federal interest rates. The higher the federal interest rate goes the higher the consumer interest rates will go.
Higher taxes and interests rates for the general public could be enough to push the nearly flat-lining US economy into a full-fledged economic depression worse than the Great Depression of the 1930's.
The only way now for the US government to afford higher interest rates is to print more money in addition to the trillions of excess that have already been printed. This has a very high risk of triggering hyperinflation.
We're not just getting hit by the federal government debt; we're also getting smacked hard from all levels of government debt all the way down to local, small-town-USA debt.
Now with the best infomercial announcer voice you can image, "But wait... there's more!"
It's not just interest rates on government debt that's going up, it's also the interest rates on any bonds that businesses issue. You know, the places were people work?
Might explain why you haven't gotten a meaningful raise, if any at all, in such a long time.
Any time a government or a business sells bonds they are taking out loans, going into debt.
A bond is a type of loan, to paid with interest. Governments and businesses issue bonds to raise more money to pay for things.
For example; a city council votes to approve a bond issue to build an addition to the school so the school can handle the growing number of students. Investors give the city money in exchange for IOUs (bonds) to be paid back with interest by the city over a specified period of time.
The interest rate of many bonds is based on the interest rate for US federal bonds. If the interest rate for federal government bonds go up so will the interest rates on many other bonds throughout the country.
Higher interest rates make it more expensive for bond issuers (like the city in the above school bond issue example) to get the money they need for growth (more classrooms), maintenance (bridge repair), disaster recovery (flooding) or anything else they need loans for.
When bond issuers can't afford to pay the higher interest rates bond buyers (investors/lenders) are demanding (interest rate hikes) then the bond issuers can't get any more credit. This is a form of credit freeze. A credit freeze in a debt based economy means a lot of things come to a grinding halt - for everyone.
By losing it's AAA credit rating, the US government now has to pay higher interest rates on its debts. Taxpayers have to pay higher taxes to pay for those higher interest rates on government debt as well as paying higher interest rates on their own debts because those interest rates are based on the federal interest rates.
This compounding of interest on all debts, both public and personal, are costing us all dearly.
Comments
Please, keep your comments clean, civil and relevant. Cussing with foul language just for the sake of using foul language only proves the person to be an obnoxious, dull-witted fool.
Related Links:
Reuters - United States loses prized AAA credit rating from S&P
http://www.reuters.com/article/2011/08/06/us-usa-debt-downgrade-idUSTRE7746VF20110806
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