Well, well, well...now that GMAC has been injected with $6,000,000,000 newly printed dollars, they said yesterday they've immediately implemented lending to people with lower credit scores (from 700 now down to 621) as well as offering financing at 0% for 5 years.
So, borrow from a debt ridden public to assist other indebted borrowers (with a dubious record of paying back what they owe) borrow more. That's the ticket -- pay off your gambling debts by gambling more.
But I have a question...if they are now charging 0% interest, where is the source of income used to pay back this $6,000,000,000? Perhaps the prices of GM vehicles are sufficiently inflated to offset zero percent interest. Or perhaps those with a 622 credit score will pay 18% interest. Either way, this is a shitload of money to pay back, and I'd really be surprised if we don't end up taking it in the shorts sometime down the road.
I saw the red tag special this last week for a '09 Cadillac Escalade, $57,180. They hybrid model is $67,779. No, GM's prices aren't inflated. The hybrid premium is about ten grand while the cost of a gallon of gas is about a buck and a half. If you drive the hybrid 15k miles a year and get 17 mpg instead of 14 mpg, it'll take 35 years to pay back that premium, not including what you're gonna shell out every 7 years for a new bank of batteries. But...you'll feel GREEN, won't you. What price, Green?
I'm green thinking of the lost dollars we just were forced to spend.
Tuesday, December 30, 2008
Monday, December 29, 2008
Two Shakes of a Lamb's Tail
Our fractional reserve system "creates" money whenever a bank loans. If I deposit a hundred thousand bucks in a bank and the bank loans out eighty thousand in a NINJA loan, there's a hundred eighty thousand floating around when there was really only a hundred thousand to begin with.
But now, the person who took out the eighty thousand loan defaults on his mortgage. Walks away. Leaves the keys in the mailbox and moves in to his brother's guest bedroom, eats his food, burns his furnace, and plays his niece's video games all day. The failure to pay back his mortgage is instant money destruction, flowing back into the black hole from which it came. If the money supply shrinks faster relative to GDP, we have deflation.
That's what I think is happening now. It makes no sense to carry debt, any debt, in a deflation. But do you think we're gonna flip right into inflation in 2009, what with Helicopter Ben "creating" hundreds of billions of dollars faster than two shakes of a lamb's tail? Anyone carrying a crippling, crushing, hopeless burden of debt (i.e., Uncle Sam, state governments, local governments, municipalities and most Merikans) always does better, much better, under inflation. It makes sense that we might find a way to just inflate our way out of our problems.
If hyperinflation is right around the corner, I'd prolly re-finance and carry out my energy efficiency directives now, to allow inflation to erode my debt before I have to pay it back.
What do you predict?
But now, the person who took out the eighty thousand loan defaults on his mortgage. Walks away. Leaves the keys in the mailbox and moves in to his brother's guest bedroom, eats his food, burns his furnace, and plays his niece's video games all day. The failure to pay back his mortgage is instant money destruction, flowing back into the black hole from which it came. If the money supply shrinks faster relative to GDP, we have deflation.
That's what I think is happening now. It makes no sense to carry debt, any debt, in a deflation. But do you think we're gonna flip right into inflation in 2009, what with Helicopter Ben "creating" hundreds of billions of dollars faster than two shakes of a lamb's tail? Anyone carrying a crippling, crushing, hopeless burden of debt (i.e., Uncle Sam, state governments, local governments, municipalities and most Merikans) always does better, much better, under inflation. It makes sense that we might find a way to just inflate our way out of our problems.
If hyperinflation is right around the corner, I'd prolly re-finance and carry out my energy efficiency directives now, to allow inflation to erode my debt before I have to pay it back.
What do you predict?
Y & T
Barack -- Mr. O -- Well, he's going to be plowing more money into freeways in today's dollars than FDR ever did to restore Europe and Japan. More money in today's dollars than Eisenhower ever did to build the interstate highway system. That's the plan to get our economy moving again.
We're gonna build hundreds and hundreds of thousands of new lane-miles when only yesterday (July, to be exact) we were all bitching about the price of gasoline, that we'd have to Drill!, Baby!, Drill! our way out of our supply problem. Now we're gonna solve all our economic ills through further consumption of a non-renewable resource by laying down non-renewable asphalt and allow a bailed out and likely bankrupt auto manufacturing sector to build more cars to motor upon them by drivers who only pretend to own them.
This is sustaining the unsustainable. The last thing we should be doing is to promote continued perpetual private automobiling but that's exactly what we're going to do, because it's all we're capable of.
Just yesterday we thought we had an oil supply problem. Just yesterday we saw transit ridership hit all time marks. Just yesterday we received another hint of what a supply disruption might bring. Just today, supplies are seemingly limitless. Just today, we are seeing the percentage of trucks and large vehicle sales rise again with cheap gasoline. Just today, transit ridership is down, transit funding is cut off, transit services eliminated, while borrowed billions are being allocated towards new freeways.
Yesterday & Today are being ignored. Tomorrow will look no different -- but with several million more acres of parking lots, several million more miles of roads, and several hundred million more motor vehicles.
We're gonna build hundreds and hundreds of thousands of new lane-miles when only yesterday (July, to be exact) we were all bitching about the price of gasoline, that we'd have to Drill!, Baby!, Drill! our way out of our supply problem. Now we're gonna solve all our economic ills through further consumption of a non-renewable resource by laying down non-renewable asphalt and allow a bailed out and likely bankrupt auto manufacturing sector to build more cars to motor upon them by drivers who only pretend to own them.
This is sustaining the unsustainable. The last thing we should be doing is to promote continued perpetual private automobiling but that's exactly what we're going to do, because it's all we're capable of.
Just yesterday we thought we had an oil supply problem. Just yesterday we saw transit ridership hit all time marks. Just yesterday we received another hint of what a supply disruption might bring. Just today, supplies are seemingly limitless. Just today, we are seeing the percentage of trucks and large vehicle sales rise again with cheap gasoline. Just today, transit ridership is down, transit funding is cut off, transit services eliminated, while borrowed billions are being allocated towards new freeways.
Yesterday & Today are being ignored. Tomorrow will look no different -- but with several million more acres of parking lots, several million more miles of roads, and several hundred million more motor vehicles.
The Service Sector
I understand Arizona retained the top state in population growth last year -- lots of people flocking to the sun belt apparently, but I was wondering, what sorts of jobs might be available in the desert -- are any derived from local resources?
I ask because Phoenix is ground zero for surburbanized sprawl, with leapfrog development separated by distances impossible to manage by transit and brutal daily temperatures that force an aging population into perpetual air conditioning. A person can breakfast bathed in AC comfort, motor to work in an AC equipped vehicle to an office cubicle conditioned all night long to ensure a comfortable temperature upon arrival, and return home to a home programmed to condition the air starting at 3:00 PM.
A quick visit to the bureau of labor statistics informs me that nearly 1/3rd of Arizona, 27%, is employed in the services sector, compared to 17% for the U.S. general. Marriage counselors, paralegals, vocational education specialists, graphic designers, public relations specialists, respiratory therapists, dental assistants, bailiffs, short order cooks, card dealers and hairdressers. Apparently, Arizona employs more people for the leisure and comfort of much smaller professional and management sectors. There are about 35% more automobile service technicians per capita in Arizona than in the rest of the US, on average. I wonder why.
To keep this sunbelt service machine running, they import timber from elsewhere, coal from elsewhere, oil from elsewhere, agriculture from elsewhere, natural gas from elsewhere, and a few hundred thousand new trucks and automobiles each year from elsewhere. They have no local economy, other than the selling and servicing of cars and the building of sprawl. It's an economic backwater now that homes ain't being built are cars ain't being sold. I've stated that you can't have a community without also having a local economy. Arizona produces little. It takes in federal dollars to support its disproportionate military sector and social security and medicare to support its ever aging population.
What would happen if faced with an chronic energy shortage or depression? I think the whole state would just shut down. After the entitled residents stopped their bitching and whining, they might end up abandoning their precious golf courses and the state might lose population in the long run. There's a reason that American deserts were never home to a few million indigenous or early European peoples.
It might someday return to those historic population levels.
I ask because Phoenix is ground zero for surburbanized sprawl, with leapfrog development separated by distances impossible to manage by transit and brutal daily temperatures that force an aging population into perpetual air conditioning. A person can breakfast bathed in AC comfort, motor to work in an AC equipped vehicle to an office cubicle conditioned all night long to ensure a comfortable temperature upon arrival, and return home to a home programmed to condition the air starting at 3:00 PM.
A quick visit to the bureau of labor statistics informs me that nearly 1/3rd of Arizona, 27%, is employed in the services sector, compared to 17% for the U.S. general. Marriage counselors, paralegals, vocational education specialists, graphic designers, public relations specialists, respiratory therapists, dental assistants, bailiffs, short order cooks, card dealers and hairdressers. Apparently, Arizona employs more people for the leisure and comfort of much smaller professional and management sectors. There are about 35% more automobile service technicians per capita in Arizona than in the rest of the US, on average. I wonder why.
To keep this sunbelt service machine running, they import timber from elsewhere, coal from elsewhere, oil from elsewhere, agriculture from elsewhere, natural gas from elsewhere, and a few hundred thousand new trucks and automobiles each year from elsewhere. They have no local economy, other than the selling and servicing of cars and the building of sprawl. It's an economic backwater now that homes ain't being built are cars ain't being sold. I've stated that you can't have a community without also having a local economy. Arizona produces little. It takes in federal dollars to support its disproportionate military sector and social security and medicare to support its ever aging population.
What would happen if faced with an chronic energy shortage or depression? I think the whole state would just shut down. After the entitled residents stopped their bitching and whining, they might end up abandoning their precious golf courses and the state might lose population in the long run. There's a reason that American deserts were never home to a few million indigenous or early European peoples.
It might someday return to those historic population levels.
Saturday, December 27, 2008
Gas Fees
I'm hoping this week that the California legislature kills the $0.18 per gallon gas tax and installs a new $0.39 gas fee. The governor didn't have an objection per se about this little Democrat end-around and perhaps this week he'll agree to sign on to it.
Oddly, the governor wants environmental reviews removed, more or less, to spur more road building while the legislature jacks up gas taxes. Watered down environmental review will now allow El Dorado county to more easily grab state money to fund a $41 million carpool lane expansion from the Sacramento county line to the Bass Lake road to help alleviate commuter and Red Hawk (kree-eh-ahhhhh) casino traffic. Beautiful. Let's build more lanes to encourage more gas usage.
In my view, a dollar in gas "fees" does not equate to a dollar removed from the California economy. Indeed, with a higher price, some people will be using less gasoline. It just won't be those in Elk Grove. No, it might be those on the economic margins in South Sacramento, but Elk Grovians will continue their gasoline usage because our city planning department mandated forced automobile usage with exclusive zoning and their intentional failure to integrate housing with an economy.
A gas fee will also marginally reduce the real price of gasoline as demand is slaked. More people will then choose higher efficiency. And because this greenest state in the nation also has the most vehicles and vehicles per capita, a gas fee would push oil exporting nations to subsidize our usage via a lowered real price.
A gas fee isn't a bad thing. It really isn't in my opinion. I certainly endorse it because:
Oddly, the governor wants environmental reviews removed, more or less, to spur more road building while the legislature jacks up gas taxes. Watered down environmental review will now allow El Dorado county to more easily grab state money to fund a $41 million carpool lane expansion from the Sacramento county line to the Bass Lake road to help alleviate commuter and Red Hawk (kree-eh-ahhhhh) casino traffic. Beautiful. Let's build more lanes to encourage more gas usage.
In my view, a dollar in gas "fees" does not equate to a dollar removed from the California economy. Indeed, with a higher price, some people will be using less gasoline. It just won't be those in Elk Grove. No, it might be those on the economic margins in South Sacramento, but Elk Grovians will continue their gasoline usage because our city planning department mandated forced automobile usage with exclusive zoning and their intentional failure to integrate housing with an economy.
A gas fee will also marginally reduce the real price of gasoline as demand is slaked. More people will then choose higher efficiency. And because this greenest state in the nation also has the most vehicles and vehicles per capita, a gas fee would push oil exporting nations to subsidize our usage via a lowered real price.
A gas fee isn't a bad thing. It really isn't in my opinion. I certainly endorse it because:
- I don't use much -- let all of you pay it. And if you don't want to pay it, don't drive so damn much
- It's a perfect consumption tax
- Pushes the cost of road building more to those who actually use the roads
- It might actually encourage alt.energy development
- Keeps us farther removed from invading Nigeria in 2019 to promote "democracy"
- We have the teeny, tiny issue of our $14,867,228,938 state deficit.
GMAC The Knife
It appears that once I'm done sending my mortgage payment to GMAC here in about 21 months, I'll be sending my tax payments to GMAC for the next 21 years. They've been TARPED.
I was sorta hoping GMAC would fail and I'd be able to write down my mortgage debt to them. Unfortunately, with their bailing they're gonna stick around for a while longer and now I still gotta make my mortgage payment.
Damn.
The number floating around the web is $6,000,000,000, which means you and I will be sending twenty tax dollars each to help keep my mortgage financing company in business. This shot in the arm will allow them to float even more credit to over-extended Americans to buy cars they don't want and can't afford, while the rest of our tax dollars will go to build several hundred thousand miles of new roads and bridges we'll need to carry all these newly financed vehicles. A solid use of our tax dollars, eh?
Out comes the flick knife, slicing off hunks of future wealth and feeding it to the newly approved bank holding company of GMAC.
I was sorta hoping GMAC would fail and I'd be able to write down my mortgage debt to them. Unfortunately, with their bailing they're gonna stick around for a while longer and now I still gotta make my mortgage payment.
Damn.
The number floating around the web is $6,000,000,000, which means you and I will be sending twenty tax dollars each to help keep my mortgage financing company in business. This shot in the arm will allow them to float even more credit to over-extended Americans to buy cars they don't want and can't afford, while the rest of our tax dollars will go to build several hundred thousand miles of new roads and bridges we'll need to carry all these newly financed vehicles. A solid use of our tax dollars, eh?
Out comes the flick knife, slicing off hunks of future wealth and feeding it to the newly approved bank holding company of GMAC.
Red Hawk
Elk Grove has new casino, Kemo Sabe.
Sacramento region now has Red Hawk (kree-eh-ahhhhh), fabulous new casino by Shingle Springs Miwok tribe. 2,000 slots, 75 tables, premier high limit room.
Dim-witted White Man no longer huddle family around AM radio on three-legged dinette for weekly powerball drawing. Now he can pack wife, gas up Pacer for few dollars, drive to Red Hawk (kree-eh-ahhhhh) on new, $200 million overpass off-ramp.
White Man feel good while losing rent money, because White Man know 1,750 jobs created. Red Hawk (kree-eh-ahhhhhh) now biggest employer in El Dorado county.
Sacramento region now has Red Hawk (kree-eh-ahhhhh), fabulous new casino by Shingle Springs Miwok tribe. 2,000 slots, 75 tables, premier high limit room.
Dim-witted White Man no longer huddle family around AM radio on three-legged dinette for weekly powerball drawing. Now he can pack wife, gas up Pacer for few dollars, drive to Red Hawk (kree-eh-ahhhhh) on new, $200 million overpass off-ramp.
White Man feel good while losing rent money, because White Man know 1,750 jobs created. Red Hawk (kree-eh-ahhhhhh) now biggest employer in El Dorado county.
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