Prices move faster than traffic in China's gridlock

(image from 'politics and world')

What a story from China! A 60 mile traffic jam is going on its 10th day now, with drivers moving forward at half-a-mile per day. In an almost universally typical fashion, the local townsfolk who weave between cars with water or noodles, supplying the drivers with precious food and water, are being accused of price-gouging because they dare to sell the goods at higher than a certain previous price.

Think of this 10-day jam on the way home tonight, when you are in traffic for a few minutes!

Moral Hazard is coming home to roost

What a sad, sad, predictable, sad state of affairs.

I am disgusted to be living in an era when so many people are forging a new 'morality' of walking away from their contractual obligations; and - what's worse - when they are being encouraged to do so. Respect for contracts, property protection, and common decency seem to have been (unintentionally?) sacrificed in an effort to bail out mistakes big and small. Having seen high risk activity (corporate and private) 'rescued' by those taxpayers who have made prudent decisions, is it any wonder that the marginal homeowner is now more likely than ever to think it is OK to simply not re-pay the debt?

I don't know how it is possible to read these quotes from the New York Times without some sense of despair about the morality that has been encouraged by the moral hazard that well-intentioned actions have put in front of the nation's borrowers:

During the great housing boom, homeowners nationwide borrowed a trillion dollars from banks, using the soaring value of their houses as security. Now the money has been spent and struggling borrowers are unable or unwilling to pay it back.

"... the more money you borrowed, the less likely you will have to pay up.

“It rewards immorality, to some extent.”

“Americans seem to believe that anything they can get away with is O.K.”

Many also say that the banks were predatory, or at least indiscriminate, in making loans, and nevertheless were bailed out by the federal government. Finally, they point to their trump card: they say will declare bankruptcy if a settlement is not on favorable terms.

Fewer than 5 percent of these clients said they would continue paying their home equity loan no matter what. ... 85 percent said they would default and worry about the debt only if and when they were forced to.

“It’s come to the point where morality is no longer an issue.”

“I’m kind of banking on there being too many of us for the lenders to pursue,” [a defaulted homeowner] said. “There is strength in numbers.”

(Read the entire article from the NYT here)

Who here really thinks that this is a way to build a great society?

Bonds move stocks and currencies

Today the Fed announced that (among other things) it will buy Treasuries to help bolster the recovery (read: prevent a recession). This announcement, other things equal, should push up prices of Treasury bonds, push down their yields, push up stock prices, and also move currencies. People will expect that the Treasury yields will fall (or stay low), that return-seekers will be less likely to invest in dollar denominated assets and more in other currencies, leading to sales of dollars and purchases of other currencies, leading to a fall in the value of the dollar.

This analysis is nothing new, of course, but I do enjoy living in today's world of technology where such moves can be observed in real-time. Here are the post-announcement screenshots from Yahoo Finance:

(I am still pessimistic about the Dow)

'Who owns GM' and other car company relationships

According to this graphic linked on coolinfographics.com GM is owned by:

• US government: 61%
• United Autoworkers: 17.5%
• Canada: 11.7%
• Bondholders: 9.8%

Did you know?

Follow the link for more of the car company ownership relationships all around the world.

By the way (and unrelated) - I am now pessimistic about Dow.

Personal Income in Dallas - $39,514 (-3%)

According to the BLS release today, the per-capita personal incomes of the major Texas metro areas are (with the percentage change from 08 to 09 in parentheses):

Houston-Sugar Land-Baytown: $43,568 (-2.6%)

Dallas-Ft. Worth-Arlington: $39,514 (-3.0%)

Austin-Round Rock-San Marcos: $35,522 (-2.0%)

San Antonio-New Braunfels: $34,500 (+0.8%)

Waco: $30,731 (+1.0%)

Here is also a nifty little map of all the metro areas, classified by how much their incomes changed from 08 to 09. More orange means that the incomes increased more in these areas than in others, and more blue means that incomes decreased more here than elsewhere.

Worst paying college degrees

Here is a list of the worst-paying college degrees. What do they have in common?

Worst-Paying College Degrees in 2010
College Degree	Starting Pay	Mid-Career Pay
1. Child and Family Studies	$29,500	$38,400
2. Elementary Education	$31,600	$44,400
3. Social Work	$31,800	$44,900
4. Athletic Training	$32,800	$45,700
5. Culinary Arts	$35,900	$50,600
6. Horticulture	$35,000	$50,800
7. Paralegal Studies/Law	$35,100	$51,300
8. Theology	$34,700	$51,300
9. Recreation & Leisure	$33,300	$53,200
10. Special Education	$36,000	$53,800
11. Dietetics	$40,400	$54,200
12. Religious Studies	$34,700	$54,400
13. Art	$33,500	$54,800
14. Education	$35,100	$54,900
15. Interdisciplinary Studies	$35,600	$55,700
16. Interior Design	$34,400	$56,600
17. Nutrition	$42,200	$56,700
18. Graphic Design	$35,400	$56,800
19. Music	$36,700	$57,000
20. Art History	$39,400	$57,100

This is from Yahoo Finance.

Christopher Hitchens

From Christopher Hitchens on his terrible diagnosis and fight ahead:

"...

Against me is the blind, emotionless alien [his euphemism for terminal cancer], cheered on by some who have long wished me ill. But on the side of my continued life is a group of brilliant and selfless physicians plus an astonishing number of prayer groups. On both of these I hope to write next time if—as my father invariably said—I am spared."

Who would have thought that Christopher Hitchens would kindly refer to "prayer groups"?

I pray for him also.

Breakfast to cost more

Breakfast is an important meal. In Latvia they say "Eat breakfast yourself, share lunch with a friend, give dinner to your enemy".

It seems that the weather this year is cutting into supply of major breakfast ingredients - wheat, coffee, OJ - causing the prices to go up by 25% since June. I better load up on my bagels and coffee before the rise of ingredients' prices is reflected in the prices on supermarket shelves!

(from The Economist magazine)

Dallas City Budget

Dallas Morning News has created a nice interactive graphic for the Dallas City Budget.

Dallas General Fund Budget (09-10)

I didn't know Dallas spends $64 million on Parks and Recreation, did you? I do visit the trails at Cedar Ridge Preserve frequently and White Rock Lake occasionally (both of which are in the City of Dallas Parks), and they are both great! But $64 million annually does seem like a large number.

I need to go visit these parks more often!!

Map - Credit ratings of the various states

I was thinking about the budgetary problems of various states in the news recently, and I wanted to see a map overview of the various states' credit ratings. Here is the result:

Click map for larger view.

(map original; data from Financial Times)

Moody's and S&P provide credit ratings as they assess the fiscal position of states. The more "red" the state in this map, the higher the likelihood that those who lent money to the state might not see all of it repaid.

Texas Strong

Texas is a good state to call home during a bad economy! A nice write-up in the Atlantic briefly explains why Texas is doing well even amidst poor conditions in the national economy. Here are some facts about Texas:

• more people are moving to Texas than to any other US state
• more Fortune 500 companies are based in Texas than in any other state
• Texas economy would rank as 15th largest in the world, ahead of Australia, Turkey, Argentina
• Texas is the biggest exporting state in the US, exporting 33% more than the next on the list - California

God Bless Texas!