Daily Digest - July 9
- An Increased Retirement Age Solves Nothing Without Real Reform
- Top-rated Mutual Fund ENDING Investment in Too Big to Fail Banks
- US Housing Crash; If It Bleeds, It’s Buried; Congress Fiddles While the Economy Burns
- Biggest Defaulters on Mortgages Are the Rich
- The Truth About the Consumer
- How Increasing Inflation Could Affect Housing Prices - Correlating Mortgage Rates And Housing Prices
- BP's Deepwater Oil Spill - Adding Mud to the Well
Many taxpaying Americans are understandably concerned about a congressional leader's trial balloon proposal to hike the normal Social Security retirement age to 70. Millions of Americans over age 55 cannot find suitable full-time work. A higher retirement age may mean more years of trying to get by on marginal employment. Furthermore, working Americans stand to get a smaller return on paid-in FICA taxes if the normal and early retirement ages are raised faster than currently scheduled. That said, Americans are living longer and putting a serious strain on the Social Security system. A failure to make Social Security financially sound could not only break the program but contribute to the economic downfall of the country.
Appleseed Fund, an equity mutual fund which invests in sustainable, undervalued companies, has amended its sustainability screening criteria to exclude "too-big-to-fail" banks, effective July 1st, 2010. Appleseed, the top performing mid-cap value fund over the three year period ending June 30th, 2010, has generated total returns exceeding the S&P 500 since inception by 12.2% per year. Appleseed is the first mutual fund to create an explicit exclusion for too-big-to-fail banks in its investment selection process.
Rumours of an economic recovery in the US seem to be greatly exaggerated. The mainstream media, Wall Street, and Washington have expanded their policy of 'extend and pretend' to 'if it bleeds, it's buried.
Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population. More than one in seven homeowners with loans in excess of a million dollars is seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.
The Truth About the Consumer (Davos)
The outstanding consumer debt as you may have noticed is $2.42 trillion. Is a lightbulb going off over your head yet? The American consumer has ADDED $200 billion of debt in the last 18 months. The delusion continues. Americans have done exactly the opposite of what they should be doing. The savings rate has plunged again and consumers are whipping out their credit cards and buying cars with 13% down and financing for 6 years.
I was talking with a friend who was telling me that it was the absolute perfect time to buy a house because housing prices have tumbled and interest rates are low. I asked him, "What happens to housing prices if there is inflation and rates go up?"
"Housing prices should go up with inflation as they do for all goods. Housing is a natural hedge for inflation"
Did my friend have a point? Yes and no.
Admiral Allen held another briefing yesterday in which he elaborated a little more about the procedures to be followed when the two wells, the relief (RW) and the original (WW) are joined. He also promised that in a briefing tomorrow, he will bring together the different numbers that have been used for well positioning - the measured depth and the true vertical depth – so that everyone can start talking from the same page.
However, in discussing the connection between the two wells he broke down the process into four parts, and to illustrate these I am going back to the figure that I used yesterday, and making a couple of modifications to it so that the process might be better understood. I am also going to revisit my gripe about the “band of brilliant minds” which Secretary Chu put together, but who seem unable, in a timely fashion, to decide whether to allow BP to change the cap on the well, or not.
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