Daily Digest

Daily Digest 8/8 - Mauldin on Pensions and China, Debt and Macy's, Worldwide Oil Drilling

Sunday, August 8, 2010, 1:06 PM
  • Mauldin: August Surprise from Obama? The Problem with Pensions. Whither China?
  • Battle Looms Over Huge Costs of Public Pensions
  • But Will It Make You Happy?
  • China To Issue 273-Day Book-Entry T-Bonds Next Week
  • China Construction Bank Approved To Open Branch In Sydney
  • Look at Macy's: U.S. Tax Code Encourages Companies To Rack Up Huge Debt
  • BP's Deepwater Oil Spill - The World Continues Drilling - and Open Thread
  • Bio-Bug: Car Run On Human Waste Is Launched

Economy

Mauldin: August Surprise from Obama? The Problem with Pensions. Whither China? (JRB)

I first wrote about public pension problems in 2003, suggesting that pensions would soon be underfunded by $2 trillion, as a long-term secular bear market would dampen returns. Turns out that I am once again proven to be a wild-eyed optimist.

Now let’s turn to China. I received this report from Simon Hunt (who is based in London, and who makes my travel schedule look positively pedestrian).

Battle Looms Over Huge Costs of Public Pensions (SolidSwede)

There’s a class war coming to the world of government pensions. The haves are retirees who were once state or municipal workers. Their seemingly guaranteed and ever-escalating monthly pension benefits are breaking budgets nationwide.

But Will It Make You Happy? (VeganD)

Today, three years after Ms. Strobel and Mr. Smith began downsizing, they live in Portland, Ore., in a spare, 400-square-foot studio with a nice-sized kitchen. Mr. Smith is completing a doctorate in physiology; Ms. Strobel happily works from home as a Web designer and freelance writer. She owns four plates, three pairs of shoes and two pots. With Mr. Smith in his final weeks of school, Ms. Strobel’s income of about $24,000 a year covers their bills. They are still car-free but have bikes. One other thing they no longer have: $30,000 of debt.

China To Issue 273-Day Book-Entry T-Bonds Next Week (pinecarr)

China's Ministry of Finance announced Friday it will float a batch of 273-day book-entry treasury bonds worth 10 billion yuan (1.48 billion U.S. dollars) next week.

China Construction Bank Approved To Open Branch In Sydney (pinecarr)

China's second largest bank, the China Construction Bank, said it has been approved by the Australian Prudential Regulation Authority to set up a branch in Sydney…The Sydney branch would be the bank's ninth outlet abroad, after branches in Hong Kong, Singapore, Frankfurt, Johannesburg, Tokyo, Seoul, New York and Ho Chi Minh City. The statement said the branch would be able to better serve trade and investment, and financial cooperation between China and Australia.

Look at Macy's: U.S. Tax Code Encourages Companies To Rack Up Huge Debt (pinecarr)

Macy's has become the great American department store, with 850 locations scattered across all but four states. And it has gotten there the great American way, by running up huge debts and flirting with default, or worse.

Energy

BP's Deepwater Oil Spill - The World Continues Drilling - and Open Thread (pinecarr)

One of the questions I was asked earlier in the spill was, "Do you expect other countries to stop drilling in deepwater locations, because of the oil spill?" My response was, "Maybe a bit, in a few locations, but in general I expect the drilling to continue." The world has so much equipment that uses oil as a fuel, and so little in the way of good substitutes, that it is really difficult for governments to decide to discontinue drilling.

Bio-Bug: Car Run On Human Waste Is Launched (Davos)

Excrement flushed down the lavatories of just 70 homes is enough to power the car for 10,000 miles - the equivalent of one average motoring year.

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9 Comments

DRHolden's picture
DRHolden
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Re: Daily Digest 8/8 - Mauldin on Pensions and China, Debt ...

RE: But Will It Make You Happy?

A great article, especially to see in the NY Times.  I've been preaching this to my wife and kids for years.  Maybe if they read it on the web they'll think more about it.

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Poet
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Down & Out: Letters From The Forgotten Man, Page 72

Sulfur Springs, Texas
December 11, 1934

President Roosevelt,
Washington, D.C.

Dear President:

I am in debt needing help the worst in the world. I own my own little home and a few live stock. Nine (9) head of red white face cattle and a span of muels. I have them all mortgaged to a man and he is fixing to foreclose me.

I have done all I could to pay the note and have failed on everything I've tried. I fell short on my crop this time and he didn't allow me even one nickle out of it to feed myself while I was gathering it and now winter is here and I have a wife and three (3) little children, haven't got clothes enough to hardly keep them from freezing. My house got burned up three years ago and I'm living in just a hole of a house and we are in a suffering condition. My little children talking about Santa Claus and I hate to see Xmas come this time because I know it will be one of the dullest Xmas they ever witnessed.

I have tried to compromise with the man that I am in debt to and he wont except nothing but the money or my stock and I can't borrow the money and I need my stock so I am asking you for help of some kind please.

So I remain,

Your humble servant,
N.S. [male]
Sulphur Springs, Texas.

P.S. That man won't even agree for me to have my stock fed.

Page 72, Down & Out in the Great Depression: Letters from the Forgotten Man, Edited by Robert s. McElvaine

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Poet
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Down & Out: Letters From The Forgotten Man, Page 117

[February, 1936]

Mr. and Mrs. Roosevelt
Wash, D.C.

Dear Mr. President:

I'm a boy of 12 years. I want to tell you about my family   My father hasn't worked for 5 months   He went plenty times to relief, he filled out application. They won't give us anything. I don't know why. Please you do something. we haven't paid 4 months rent, Everyday the landlord rings the door bell, and we don't open the door for him. We are afraid that will be put out, been put out before, and don't want to happen again. We haven't paid the gas bill, and the electric bill, haven't paid grocery bill for 3 months. My brother goes to Lane Tech. High School. he's eighteen years old, hasn't gone to school for 2 weeks because he got no carfare. I have a sister she's twenty years, she can't find work. My father he staying home. All the time he's crying because he can't find work. I told him why are you crying daddy, and daddy said why shouldn't I cry when there is nothing in the house. I feel sorry for him. That night I couldn't sleep. The next morning I wrote this letter to you. in my room. Were American citizens and were born in Chicago, Ill. and I don't know why they don't help us Please answer right away because we need it. will starve Thank you.

God bless you.

[Anonymous]
Chicago, Ill.

Page 117, Down & Out in the Great Depression: Letters from the Forgotten Man, Edited by Robert s. McElvaine

Dragline's picture
Dragline
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Posts: 54
Re: Daily Digest 8/8 - Mauldin on Pensions and China, Debt ...

Yes, spend your money on experiences and relationships, not on things, is some of the best advice I have every read.  It really is one of the keys to happiness, whether you choose to drastically downsize your life or not.

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rvwainscott
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Posts: 9
Re: Daily Digest 8/8 - Mauldin on Pensions and China, Debt ...

RE:  But Will It Make You Happy.

I think I'm ahead of the curve on this one.  My wife and I began downsizing about 5 years ago and now live on a tiny sailboat across from the Channel Islands in S. California.  We do not really have to worry about buying things that we do not need because there just isn't any room - it makes life so much simpler.

The boat has its own septic system, pressurized water system and it can generate its own electricity.  If, for some reason, I need to go far away then all I do is just pop up the sails and let the wind take me there.  We lowered our bills to the point that we only need to work about 20 hours a week and we spend the rest of the time at the beach, reading or sailing.

Because the ocean is a big and dangerous place, all of my neighbors have radios, maps, charts, survival gear, water purification systems, wind and solar electrical systems and the means to pull food from the ocean. I think we are much better off than the suburbs with regards to weathering a crisis.

There are uninhabited islands within a day's sail and we've discussed how we would caravan to them should the need arise. 

Simple is better.Laughing

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saxplayer00o1
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Posts: 4145
Chris Martenson on Tech Ticker video

Inflation or Deflation? "Yes," Says Chris Martenson, Who Sees 'Stagflation' Coming (Video...Tech Ticker)

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LogansRun
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Re: Chris Martenson on Tech Ticker video

I've been wondering where that was!  Thanks for putting it up!  I hope this gets into todays DD so everyone will see it!

 

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1891
Re: Chris Martenson on Tech Ticker video

I think things are really picking up, with Dr. Martenson getting into the mainstream. Ever since the presentation at Yahoo! headquarters, then the article on Yahoo! Finance, and now Tech Ticker on Yahoo! You'll know the big leagues have arrived when we see an appearance on CNBC or Fox or ABC appearance.

P.S. - I've looked everywhere. It looks like that 1-year food supply at Costco is the cheapest at $999 even if you didn't get for $799 with the $200 coupon back in December 2009. Other places are selling 1-year supplies for anywhere from $300+ to $1000+ HIGHER in price! I suspect prices may go higher as awareness and demand picks up. I wish I had the storage space (a public storage space won't do due to heat issues) - I only have a small apartment in a heavily-populated suburbia. Anyone found any supplies any cheaper?

Poet

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