Ruminations

I made note of how all three level of governments that represent me are hemorrhaging -- bleeding red ink. I am a doomer for sure, but I no doubt remain optimistic regarding our ability to avoid complete societal meltdown. The truth is, I have to...because although I claim my job at SMUD is bomb-proof, no job would be.

I personally think this nation of over-consumptive over-entitled clowns is wholly ill prepared, wholly, to manage any level of scarcity. Any level. That's why I'm considering a rational pre-emptive hoarding program so I'm better prepared. That's all. Nothing wrong with that.

Here's a nuclear scenario: the state of California's bipolar legislature utterly fails to compromise and allows the state to run fiscally dry within a few months. The state happens to be SMUD's largest single customer, and I cannot envision any possible condition where we pull meters due to non-payment. No...we'll do that for any of you chumps who are 90-days late, but there's no way we'd have the balls to do that to the gov'na. Instead, we'd take it in the shorts and immediately suspend every capital project on our books.

SMUD could be forced to provide power without payment indefinitely methinks. While we expect consumers to pay for power, we absolutely could not live with a scenario where we didn't make it available. This could mean immediate, brutal layoffs firings and we'd maintain the barest of crews necessary to keep some degree of power flowing. As a 3-year employee, lower than all other protection engineers on the totem, the felling axe would find my neck first.

For any sustained depression, I think I'm most certainly safe for the reasons outlined in my previous post. But I think it prudent, really, to consider the catastrophic. Hell, my role as blogger and social critic is to ruminate on things that everyone else is indisposed to dwell on. Look -- we've got every one of these fucking clowns in charge, every one, who failed to see this economic shitstorm on the horizon. Isn't it at least plausible they might find a way to completely fucker everything up?

The Unretired

My coworker Hagen, at or near retirement age with his home long paid off and with sufficient time served at a few employers to guarantee a pension, will not retire.

His funeral and his retirement party will fall on the same day. But his is a matter of choice, not circumstance, because he loves his job.

That's how I feel about my job, it is so interesting and fun that they almost don't have to pay me to do it. A consequence of this might be that I continue to work beyond what I would have to, which is something I would have never had said, never! two years ago.

Contrast this with the hordes of baby boomers now donning new attire at Lowes, Home Depot, Wal-Mart (or substitute any big box store name you can think of). Retirement for them will be deferred until the situation improves. For now, they are the Unretired.

Long hoping to extract home value in the form of reverse mortgages or selling high and moving low, these sources of 'income' have been wiped out. Straddled with debt if they did the cash-out re-fi for that new Buick and other consumer Jonesing, or straddled with no income because they counted on using their housal unit as a retirement ATM, the Unretired will shortly appear in droves, looking for any work, menial or otherwise, they can find.

And it likely won't be work they'll enjoy nor feel very secure about keeping. Not a good position to be in if TSHTF.

As the doomer, I have positioned myself in a bomb-proof soceitally required job that I love, with a willingness and ability to work for less, (much less), than I make now if it meant keeping a job. I carry sufficient cash and commodity reserves to survive (however unpleasantly) for 60 months if I did lose my job without having to tap into any retirement accounts or home equity. I carry very little debt, and could eliminate it completely with a modest 401(k) withdrawal. I'm not Mormon...but I am wondering...does it make any sense to stockpile food?

The action of stockpiling food would immediately take me from being just a frugal, economically resourceful fellow to a paranoid, maniacal, fringe survivalist, wouldn't it? I mean, who does that sorta shit in this day and age? No one I know.

The thing is, we live in a just-in-time society. Inventory doesn't exist. If our economy suddenly devolves into a CAT V storm, I'd be out there wrestling with every other Elk Grovian for basic essentials, and I am not one for that.

So...how about having just a few months supply of propane and non-perishable food on hand? Is this lunacy? I already have made accommodations for a long supply of insulin, something that if lacking in any calamity for a sustained period would cost my life.

Should I?

Sofa King

I have long considered energy efficiency improvements to my bat cave -- I need to re-insulate the attic, replace my 10 SEER AC unit, upgrade my water heater, and install a hot water recirculation pump to the kitchen sink. But with energy prices in the dirt, why should I?

Gasoline is less than two bucks. That means I'm gonna drive the Chevy truck a few thousand miles more this winter to duck hunt. With natural gas less than $8 per mmbtu, I'll forgo the cost of weatherstripping and its burdensome installation and just turn up the furnace a few more degrees. And I'm gonna open a window or two to exchange the air more frequently. It's healthier that way.

And as natural gas is cheap, so is Californian electricity. This coming summer, I'll be running my 4kW AC load till I'm chilled to the core, because it'll be too cheap to concern myself with it. I will be consuming the cheap energy that would have been much more expensive had those few million 'others' not been laid off in this recession. They're not my problem.

Because my water isn't yet metered, and as water is so damn cheap anyway, I will continue to waste several thousand gallons per year waiting for the kitchen sink hot water to flow instead of installing a recirc pump to save it.

I will hoard my cash and only buy these things in the remote future when either they finally break or when energy becomes too expensive to blow off. I am not an economic idiot, which is why I'm such a strong proponent of a price floor on energy. With prices Sofa King low, there is no reason, no reason!, that I should spend several thousand dollars in efficiency upgrades at this point. My stuff works, it isn't broken, so on an economic basis, I will defer efficiency.

Unicycle

I reported here how much the new, unlikely RT light rail extension to Elk Grove is going to cost. I say unlikely, because RT fails to respond to any of my e-mails and provides absolutely no revised information on the RT website. This project is as good as dead, in my opinion.

Today their lack of communication might be a function of these "tough economic times," but they've failed to communicate this project's status now for over two full years. Two years ago all things were bright and beautiful, no? OK, maybe two wars were going on...but who in Elk Grove gave a damn about them? No one. Which credit card to use to finance that new Blackberry was foremost on their minds.

Without any hope for light rail to the outlying southern hinterlands, and with no respectable jobs in said outlying southern hinterlands, Elk Grovians will be forced into their vehicles for at least the next two decades. I use 'forced' lightly, only because they all knew when they moved in that public transportation wasn't a viable option and besides, what better way to express your individuality than through private vehicle ownership? If you're frugal, a Ford sedan. If you're a pretentious prick, a BMW. Gay, a Subaru Tribeca. An alpha male jerkoff, a Chevy Blazer. On a public bus, however, you're just another fucking chump.

If and when this fabled Phase II extension from the Meadowview station to Cosumnes college is ever built (at the low cost of only one thousand dollars per inch), I will have a light rail station 2.06 miles from my door...the Franklin Station!

2.06 miles is a long-ass way to be hoofing it, however. I would do it once or twice, just to say I've done it. For 99.996% of our population, walking is out of the question. Walk 2 miles? Ha! You can't even get overweight Elk Grovians to walk two hundred feet between their cars and the entrance to Target. Walking is out of the question.

But biking two miles is almost as pointless, as I'd have the pleasure of manhandling my bike four times on and off the two trains to get to work. So I was thinking...unicycle.

I mentioned this idea to more than a few people recently. On paper is sounds plausible. But nearly everyone told me that I'd be debasing myself, as only miscreants, chowderheads, dolts and meatheads ride them. Is this accurate?

Everything I've ever seen and known about unicyclists support this statement. They are only ever associated with ballons, clowns, juggling balls and costume. I could see myself as the only Elk Grovian who commutes (in part) by unicycle, as someone who rides one on a utilitarian basis. To get to work.

Imagine riding one to get to work! That alone would have me blogging for several years...up and down Franklin Blvd., four miles a day on one wheel. Today my bike and my observations fuel this blog; imagine what one wheel might add!

I have a picture of me on my cousin's unicycle here on my street corner, holding onto my street lightpost. It is as hard as it looks. It's gonna take me forever to ride one of these damn things.

Six Thousand To One

The NBC evening news last night reported that the "typical American carries ~$16,000 in non-mortgage debt...a record amount."

Although I don't doubt that we're mortgaged up to our eyeballs, this figure is suspicious because they've earlier reported household debt levels. This might be a household number instead...but either way...it's a big number.

It was also reported that the average household carries $8,800 in credit card debt. So non-credit card debt is the difference, or $7,200.

Nonetheless, the critical point I want to make is this: that $7,200 figure represents permanent, systemic debt -- debt that can never and will never be paid down. If everyone everywhere paid off every dime of credit card debt the debt floor would remain at $7,200.

Why?

Because each American requires motorized perpetual transport, required because our suburban living arrangements force private individual automobiling, and everyone only puts the minimum down and finances the rest. I'll bet 99% of that $7,200 is wrapped up in motor vehicle loans...cars, SUVs, fishing boats, ATVs, dirt bikes, trucks, scooters, motorcycles, airboats, private jets, helicopters, ultralights and mopeds.

A lady in Pennsylvania was interviewed in the news segment and said that to pay off their debt, their family will have to go without "eating out, fancy coffees, books from the bookstores, and toys for the kids." And the obvious glaring omission from her list? Their fucking cars! and all the 'required' shit that goes with them -- Tom Tom Go in-car navigation systems, Lowjack, car alarms, smog fees, car stereos, tire shine, rear window tinting, maintenance bills, oil filters, seat covers, wiper blades, trailer hitches, accident deductibles, carpeted dashboards, bedliners, air fresheners, spare lamp bulbs, Blueteeth, insurance payments and registration fees.

The news segment panned across her beautiful new vinyl-clad, poorly-proportioned, two-story, raised-ranch shitbox, and sitting in the driveway is what looked to be about a $24,000 minivan. Odds on this being the only vehicle in the family? 6,000:1.

Americans can never dig themselves out of this systemic automotive debt. If they happen to pay their auto loans off, they'll be forced into another set of loans a few years later. This is the equivalent of paying interest only on a $7,200 loan forever...just another sunk cost to maintain our auto-centric lifestyles.

Event Horizon

Mired in debt, I wonder if the City of Sacramento will go through with their plans to renovate the north end of Martin Luther King Jr. Blvd. this spring.

Along with Franklin Blvd., MLK is the other north-south street I bicycle along to get to work...along with a few thousand other Elk Grovian thru-commuters. Its 'renovation' is deemed a public works project.

It is indeed the public realm. But of course I take issue with 'roads and bridges' as the only assumed public realm we have, and also that somehow they're going to be our savior from this approaching CAT V economic shitstorm. Listen carefully through all this bailout horseshit and you'll hear that we're going to put all these hundreds of thousands of out-of-work Merikans back to work repairing our crumbling roads.

First of all, couple several million fewer vehicles produced each year with a significant decline in VMT, and these 'public works' projects will be utilized even less than now. But no matter -- we'll blindly continue roadbuilding in the face of oil depletion, global warming, public realm degradation, fewer miles traveled, etc...because it feels good. Same with the Sacramento airport expansion, another multi-billion public works project for an industry that can't survive looming $70+ oil and whose customers are increasingly choosing Top Ramen at home instead of lobster at the Vegas Bellagio.

The event horizon of California's black hole of debt was only expanded when voters agreed in 2006 to float $20 billion in bonds to 'ease' congestion with proposition 1B. More delusional thinking, folks. You can never, never! build more lanes to ease congestion. It has never worked and it never will work. Building more lanes only leads to more lanes of congestion. You know what will ease congestion? Less driving! Living patterns that aren't wholly dependent on motoring! How about those? Huh?

My disparate, random postings on energy, economic debt, and our suburban shitscapes all have a common thread -- we mortgaged everything we had and most everything we ever will have into building housal units, destined for slumification in unsustainable suburban living arrangements, accessible only by perpetually motoring vehicles powered by declining energy resources, stuffed to the rafters with cheap foreign manufactured shit that was never needed and paid for with money that never existed.

Cash Is King

We are in a recession! Wa-hey!

This arbitrary and capricious determination of our economic state was announced yesterday...and apparently we've been in one now since December of ought seven. I no longer have to use quotations around 'recession' anymore.

Of course, all I had to do was ride my bike along MLJ Jr. Blvd. and 47th Ave. here in SACTOWN to see the obvious recession. Day workers congregate at this intersection looking for both unskilled and trade work -- ditch digging, couch moving, plumbing, lathing, etc. When there used to be a few hundred every morning, now their numbers have been reduced to a handful of souls still hoping to land any job.

The recession is one thing, a supposed period of negative GDP...and its effects on employment. Being employed, however, I'm much more interested in the deflationary boom we've been in for the past few months. After a prolonged drunk-on-credit fiesta we're waking up to a punishingly painful hangover, and with credit drying up, we're seeing a massive flight away from everything -- cars, gold, boats, equities, housal units, oil, copper...everyone is selling everything not nailed down to grab cash, or extending their tin cups for bailout cash...because, for the moment, Cash is King. Deflation is negative inflation...dollars in the future are worth more than they are today...nevermind that there might be fewer dollars.

When there is more debt to pay than assets to pay it, the pie is shrinking and the last person hoarding the cash is the only winner. A few winners, and a whole lot of losers...just like every other group of humans you can think of...a few winners and a whole lot of losers.

Look at the interest rates on any treasury bill...almost zero! People aren't worrying about garnering any future interest...they just want their cash equivalents to hold value, unlike everything else that's crashed and burned by 50-60-70%. W.C. Fields once remarked, presumably when sober, that he didn't care for a return on his capital. He only wanted a return of his capital.

The most important thing you can do in an extended deflationary period is unload your debt. Will this be a prolonged phenomena? Who knows.

Say you bagged a 3% rate (yeah, right) on your new 72-month payment plan on that new GMC Sierra. Your real interest rate is the nominal rate (3%) minus inflation, which is now negative. Your real rate is higher. It might be a lot higher.

I suppose I was an idiot an idiot! for spending the last 12-odd years paying down my mortgage. It made less sense during inflationary times, for sure. But if we assume a prolonged period of deflation (and why not, after 15 years of expanding credit) not carrying debt is virtuous.