Thursday, September 25, 2008
Enough is enough ...
When I heard our president poked his head out of his undisclosed hiding location to address the American people directly ... urging them to support his "economic rescue proposal" it was almost enough to drive me to running in the streets screaming.
This all coming from the party that is suppose to favor personal responsibility and a free market economy. This is where the rubber meets the road ....
Make no mistake, things are bad, they may even need to get WORSE before they get better but using US TREASURY dollars (also known as OUR MONEY) to prop up failing companies that mad bad investments is the WRONG answer.
These financial institutions made bad decisions. Nobody is perfect, we all make mistakes, hopefully we learn from them, move on and live a better life. Those who DO NOT learn from their mistakes will eventually perish. That's how evolution works, that's what life in the jungle is like.
In the short term it seems bailing out these institutions is the right answer .... it only compounds and delays a much bigger crisis. Like the child that touches a hot stove these institutions must learn from their mistakes OR perish. Granted some will fail outright ... and we will be all better off when they do. The stronger will survive and hopefully come out wiser.
This is not all philosophical, there are real economic consequences to the government artificially propping up the economy. The Treasury does not have this money in the bank, it will need to be borrowed. As the US government incurs more debt there is less confidence in our currency and the value of the dollar drops in the worldwide market. As the value of the dollar drops the cost of goods we sell overseas also drops ... but more importantly since we have a TRADE DEFICIT the cost of goods we purchase ... oil in particular ... rises. This all becomes an inflationary feedback loop.
Then let's not forget the hangover after the party. The government borrows money by selling debt in the form of treasury notes or bonds, these notes accrue interest. The government is not like an individual or a company ... it doesn't "make" money by converting the value in either labor or goods into cash .... it collects taxes. Taxes will need to be raised in order to cover the new debt service. Sure you can cut services to keep the tax bill the same, but how much of the federal budget is discretionary, will we cut defense ... I doubt it. We and our descendants will be paying for this.
Oh wait ... it still gets worse .... who is going to buy these Treasury notes .... well we don't have any money ... it will likely be foreign nationals .... China and our other good friends in the Middle East come to mind .... hint China has the cheap labor and The Saudis have the oil both of which get easily converted to cash. So now were basically shipping our nations wealth off shore. I don't even want to go down the "black helicopter" path and consider whether it is good for our national security for all these foreign nations having financial leverage against us. Has anyone considered this??
This is going to get worse before it's gets better ... yes you're going to see you 401K decline .... yes the value of your home mat decline ... but I feel a little pain now will make us better and stronger in the future.
PLEASE call ... don't even bother writing at this point .... it all happening to fast ... tell them you DO NOT SUPPORT any "economic rescue" or "economic bail out" ....
If you agree with me forward this on ..... if not I'm very WILLING to listen to any counter argument.
#posted by Rob Roschewsk @ 9:21 AM
Friday, September 12, 2008
ClearChannel to take over management of Radio station WWV
In a bold move to boost it's portfolio, Clear Channel Communications has signed a deal with the National Institute of Standards and Technology to take over time station WWV in Fort Collins Colorado.
In what seems like the most bizarre case of outsourcing yet, Clear Channel has insisted on several format changes to keep in line with other Clear Channel holdings. Consultants for Clear Channel have said the previous format was "dull and predictable." Additionally, the stations 50% modulation of clock ticks and 75% modulation of announcements was deemed "not loud enough"
The new station will now be known as "WWV - The Tick - All the time, all the time!!"
In addition to the standard frequencies of 2.5, 5, 10, 15 and 20 Mhz "the Tick" will now be broadcast on the web as well!!
Props to low noise productions for breaking this story ;-)
#posted by Rob Roschewsk @ 3:45 PM
Sunday, September 07, 2008
Mega Election Mashup
My recent fascination has been the concept of prediction markets, the trading of shares based on the likelihood of an events outcome. Admittedly there is a fine line between "investing" and "wagering" ... some have said playing the stock market is a form of legalized gambling ... but to borrow a quote from the fictional character Gorden Gecko: "Greed is, for lack of a better word, good"
People will say anything in a survey, but when it comes to parting with ones hard earned cash they might be a little more cautious.
Intrade is a prediction market where shares of predictions can be bought and sold. I have been watching them for a while but my curiosity peaked recently when shares of Sarah Palin began to trade furiously at least 12 hours before any media broke the story of her selection as Mr. McCain's running mate.
Using data from Intrade for the individual state elections I have developed this mashup of what the current electoral vote tally looks like. Based on this data ... it's going to be a nail biter with about 3 states deciding the race.
#posted by Rob Roschewsk @ 7:47 AM