Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Buried in the Times

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This is more of a comment cleaner than anything else, but here we go……….

I was enjoy the Sunday NY Times this morning, and wayyyyyyyyyy in the very back of the paper was a little article about the recent forecast for Medicare projecting solvency through 2029. The thrust of this report was that the health care reform would help matters, and in the report were quite a few rosy assumptions about how much better the economy would be getting Real Soon Now.

What's interesting is that Richard Foster, the chief actuary for Medicare and Medicaid, had this to say about the analysis, buried in the footnotes:

"…the financial projections shown in this report for Medicare do not represent a reasonable expectation for actual program operations in either the short range……or the long range."

I don't think this needs any additional commentary from me.

Unemployment Rate of 42%

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I've frequently found the so-called unemployment rate (ostensibly at 9.5%) to be irksome, since it leaves out tens of millions of people (for instance, those who have given up looking for jobs at all). I found this graph from the marvelous Zero Hedge site to be eye-opening.

0806-working

It shows the percentage of our population working is only about 58%. That, to me, is a far more meaningful figure. Now I realize that including schoolchildren and infants as part of the population might seem silly, but at least we're dealing with a metric that isn't subject to the whims of politically-driven government statisticians.

One might suppose that being back at the levels of the 50s, 60s, and 70s wasn't so bad – – well, I imagine that the reason for the surge in the 80s and 90s is because so many more women (who are also part of the population!) were working too.

The bottom line is that, for the whole of this millennium, the percentage of US citizens at work has been dropping very, very sharply.

Money for Nothing

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Good morning.

Yesterday evening, I was in my car listening to NPR, and the reporter stated that the upcoming federal deficit for the year would be over $1.5 trillion dollars.

0730-cowbell 

 

Even to someone as cynical as me, I was flabbergasted. It wasn't that many years ago when the nation's entire debt crossed the trillion dollar mark, and people were disgusted at the insanity. Now we're doing that entire amount, plus 50%, in just a single year!

The really gut-wrenching part was when they played Obama speaking about the economy. His two talking points, which he has repeated on a daily basis for months now, are:

+ This wasn't my fault; Bush handed me this disaster;

+ The economy is growing and improving (pfft!), but if we hadn't done the huge bailout and stimulus, it would be much worse

Listen, the results aren't impressive. Even the severely fudged numbers spewing from Washington show a completely anemic economy, and that's with trillions of dollars being poured into a system that will eventually reach ruination.

It occurs to me that we have created the Tori Spelling economy: one in which you have unlimited financial resources to throw at the problem, but no matter how much you spend on plastic surgery (or bailouts for investment banks and people who haven't worked for ages), it's still going to look something like this:

0730-spelling

Chinese Treasury Dump Brings Holdings to One Year Low

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Go here and read the Zero Hedge piece Chinese
Treasury Dump Brings Holdings to 1 Year Low if you have not
already seen it: http://www.biiwii.com/analysis

If
England is allowing us to monetize our debt under some kind of covert
agreement, it is probably not much different than the tools that the US
would use to directly monetize its own debt, given the cozy relationship
with our friends in the UK.

What is next, the seemingly way out
there prospect of Congress directing individuals to hold these treasury
instruments in their IRA's? You hold an IRA, you are in bed with the
government as they extend to you tax benefits in exchange for your
compliance and adherence to convention.

A couple years ago we put
an addition on our house. How'd we fund it? A loan? Ha ha ha…
regular after tax brokerage savings? Are you kidding me, I worked hard
for that 'money' and paid my taxes on it. It's mine. No, I liquidated
funds from the IRA's and paid the penalty and taxes up front.

I
have not contributed squat to the IRA's since my financial awakening.
After a financial adviser lost us 60% of our IRA's in 2000/2001 and I
yanked them away to learn portfolio management on the job, they are up
about 240% – adjusted for withdrawals and what not. This is the NFTRH
"Speculative" (as opposed to "capital preservation") portfolio.

The main point is that I do not regard
IRA's as serious investment accounts (although they are mighty
convenient vehicles up until liquidation) and have been on alert for
years as to stirrings in Washington about policy that may target these
massive repositories in waiting should the inflators become yet more
desperate for treasury buyers. England is a lurch in that direction if
what Zero Hedge speculates is at all near target.

Either way,
this is inflationary. The confidence in the long bond is not what the
chart says it is.