Archive for December, 2008

I’ll be on a blog-free vacation from today thru January 2nd so there won’t be any posts this week but I will return on January 5th.

What better way to celebrate Christmas than to go watch a movie about Nazis?   Actually, my family decided they wanted to watch Valkyrie a few days ago so we went.   The movie theater was packed, not a single seat available but the real problem was a guy sitting three seats down actually texting throughout the first 45 minutes of the movie!

Why do these idiots go to the movie theater if they want to be playing on their phone?   It got so bad that about  three people sitting nearby wanted to lynch this guy.   I felt like grabbing this idiots cell phone and tossing it as far as I could throw it.   The guy behind me nearly got up but his friend held him back saying, “no don’t do it” until the guy behind me got up and asked the guy to turn off his cell phone.

I just read this article that took the incident a whole bit farther:

Phila. man shot because family talked during movie

A South Philadelphia man enraged because a father and son were talking during a Christmas showing of The Curious Case of Benjamin Button took care of the situation when he pulled a .380-caliber gun and shot the father, police said.

I partially blame myself because I have a few simple rules about movies:

1. Never go to a movie on premiere day (or first week for that matter).   During the release of a popular movie, it’s likely all seats will sell out and it’s likely that there will be an increase potential for violence or other mob activity or idiots showing up at the cinema.   I compare this to the “black Friday frenzy” that killed a Wal Mart employee earlier this year.

2. Don’t go to a “low end” theater.   I normally travel a bit further to go to one of the most expensive theaters in the city to avoid these types of issue but timing was everything.  Expensive theaters also do several things:

  • They encourage cheap skates to go somewhere else
  • They encourage people who pay a premium for the service to really enjoy it.
  • They generally keep kids and teens out because they can’t afford the higher expense.
  • They usually keep the riff raff out.
  • Service and staff is generally better and faster.

I would love a movie theater chain to adopt a Costco style membership plan where you have to pay an annual fee to become a member and enter the theater.  This alone would solve many problems at the theater and I think it can be a sustainable model.

I also think theaters should get more into a “private viewing” mode where a dozen or more family members can go and view the movie in private without allowing other people in; it’s more likely family members will police each other regarding cell phones and speaking than total strangers.   It can easily be done because after the first couple of weeks of a movie release, the theater is pretty empty most of the time.

Ultimately I need to get that 65″ LCD and just watch movies at home where I can enjoy a good movie in peace and quiet.

Merry Christmas!

I find it odd that I haven’t read about a single hospital filing for bankruptcy or being close to insolvency despite every other sector: retail, commodities, manufacturing, energy, etc; all flirting with financing issues.   What gives?

There have been at least 500k jobs lost over the past few months and I would imagine that most unemployed people aren’t going to carry their expensive health insurance plans so where is the money coming from?

I would imagine that hospitals invest money in the market like any other industry but not a single peep about any hospital endowment losing money.  Not a single peep about hospitals insolvency.  Not a single peep about hospital layoffs.    I find this very odd although I understand that health care is a growing & booming field thanks to the baby boomers but something doesn’t add up.

Don’t laugh but perhaps one of the best things that has/will happen(ed) with the collapse of the big three is rethinking the need for car dealerships.   I’m not entirely sure why we even need these archaic showrooms when customization is what most people want these days.

If you’ve wandered about in any mall recently, you’ve likely run into kiosks selling computers (Dell), kiosks selling real estate (condos) and kiosk selling travel services so why not autos?   Have a couple of basic models scattered throughout the mall then have a computer that will allow you to customize your car the way you want it: leather/fabric, color, seat style, music options, etc.

Why pay for features you don’t want on a car at a lot?  Why give up features you want because that model is out of stock?

During the dot com boom there were many websites and even the auto manufactures that began to develop this model but states, fearing that their dealerships would shut down and cost jobs & tax revenue, passed laws requiring that a car could only be sold online through a dealership in their particular state thus killing the “direct from manufacturer delivery” model.

Unfortunately, dealerships are going under, jobs are lost and tax revenue is gone and we’re left with empty blighted dinosaurs formely known as “dealerships” throughout the country.

By using a mall kiosk to sell cars you’ll be guaranteed traffic every weekend, offer the consumer better choices by allowing customization and save the enviornment from ugly paved abandoned dealerships.

By the way…..this will save malls too!

How do you put into words what shouldn’t or couldn’t easily be put into words? I had intended on posting this after Christmas and I had intended on writing a long treatise complete with a set of references (see below) but I decided that the math would likely be way over too many people’s heads and this article would be glossed over by 99% of the people reading it.

Instead, I’m going to tell you as easily as I can that “it’s over” and there isn’t much, if anything, that can be done about it. What is over? Well, the banking system is over, the stock market is over, the credit system is over and our political system may be over soon too. The best case scenario might be marshal law until the whole thing can be rebuilt brick by brick.

Let me state clearly that I don’t think the world will come to an end without these things because modern humans have survived on this planet for the last 200,000 years without much of a banking system but the world as we know it, experience it and live it is going to drastically change. Lol! That’s perhaps the irony, the recent presidential election was about “change” and people are in store for a change that they did not anticipate or expect.

I am seeing an apparent logarithmic deflationary decay in many of the numbers coming out all over the place and the “bad” information is accelerating exponentially. Real unemployment is running somewhere between 12% and 18% and the job losses are accelerating. Real GDP is 3% negative and getting worse.

Chart of U.S. Unemployment

Chart Courtesy of

Chart of Growth in U.S.Gross Domestic Product (GDP)

Chart Courtesy of

Let me try to summarize some key points:

If 80% of the wealth is controlled by 20% of the populous, what happens when those top 20% start losing money by the billions? Think of the cascading fractals from a self contained “economic ecosystem” that is in logarithmic decay.   All of the “solutions” offered by the government goons do nothing more than simply transfer the pile of crap from point A (the losers that caused the problem) to point B (the tax payer).   These solutions “solve” nothing.   I get the sense that the only thing that will “fix” the system is replacing it (e.g. a total collapse).

We’ll see how the next 12 months unfold.

News Sources: Japan, Australia, China, Canada, Russia, UK

References: Damping Ratio, Hoover Index, Benford’s Law, Zipf’s Law, Lorenz Curve, Pareto Distribution, Gini coefficient

Where are all the PF Bloggers advising people not to buy new cars right now? It seems their advice was taken to heart and NO ONE is buying new cars and we have the big 3 in Michigan heading toward bankruptcy. Mercedes, BMW, Honda and Toyota aren’t doing too well either.

If there’s ever a time to see the net effect of the “don’t buy a new car” or “don’t take the depreciation hit” advice of the pf blog world now is the time to see it.

So what’s happened? Tens of thousands of auto workers are losing their job. Hundreds of dealerships have gone out of business. Hundreds of managers, sales people, title clerks, et al, have lost their jobs as well as some auto related industries going under too.

What about skipping the latte? How many Starbucks shops are shutting down? How many people are losing their jobs?

Don’t want credit cards? Hmmm….the banks are cutting credit card lines and the consumer along with the economy is on death watch.

Before anyone puts any words in my mouth, I’m NOT advocating, nor did I ever advocate, the extreme exuberance lifestyle any more or less than the extreme frugality lifestyle.

Without economic growth there will be no investment growth so until the consumer stabilizes, please don’t expect the market to recover to peak levels any time soon.   I know someone will argue that if people hadn’t extended themselves we wouldn’t be in this mess and while that statement is technically true, we wouldn’t have had the stock market returns (Dow 14k) of the last few years.

Motorola has announced the freezing of pensions and some companies are contemplating reducing or eliminating the employee matching on 401k plans.   Needless to say that if this begins to happen en masse it will kill the market much faster than anything else.

“If Congress fails to broaden the relief, we’ll see increasing numbers of plans frozen, more curtailment of 401(k) matches and significant job losses,” said Mark Ugoretz, president of the ERISA Industry Committee, or ERIC, which represents the retirement and health plans of the nation’s largest employers.”

I’ve written about reducing my 401k contributions on my 401k for 2009 from the max ($16,500) to just 6% ONLY because my employer matches 6% but if they decide to eliminate the match then there’s no point in contributing to a 401k.   My contribution gambit is based on the premise that I’m getting “free” matching money that will potentially offset losses from the previous year as I intend to invest all monies in bond & money market funds all throughout 2009.

I’m guessing people on the top income levels will think along the same lines and cease contributions to shore up cash, especially if there is no match and the market prospects for 2009 are pretty bleak.

I must ponder this some more…..

Oil has been trading around $40 to $50 per barrel lately and it seems that airlines should hedge the price of oil now rather than belly aching, whining and charging $150 “fuel surcharges” when oil goes back up.

Southwest has been doing this for a while but unfortunately they locked, if I’m not mistaken, at $70/barrel so ANY airline that wants to get a competitive edge should jump at the chance to lock in a few hundred thousand barrels at $40ish.

The first few airlines to do this won’t be begging the government for loans to stave off bankruptcy in a year or two when oil begins its climb back up.

I don’t get the whole Madoff scam but what really irks me is that yet another government agency failed to do anything to keep this from happening.   Who the hell are these guys that work at this agency?   Is there anyone competent there?

I’m glad to see I’m not the only one asking questions:

Madoff investors burned by SEC, too

  • Monday December 15, 2008, 11:28 am EST

Now that the Madoff fraud has been exposed there are still a slew of fundamental questions outstanding.

How did one man, Bernard Madoff, run such a massive, self-described Ponzi scheme? Is it really true no one else was involved? How much money has really been lost? Is it $50 billion? And even if it is only several billion, how does someone burn through that much cash? Where did it go?

The forgotten question:  Why is the SEC so incompetent?   Just like FEMA couldn’t seem to do anything right during Hurricane Katrina we now have another agency that can’t seem to do anything right either.  Sheesh.