Thursday, September 17

"I Gotcher Green Shoots Right Here"

One of the most reliable indicators of world economic conditions is shipping traffic. Here's a story in the UK's Daily Mail about the unprecedented decline in the amount of shipping world wide and - most shocking to me - the precipitous decline in the cost of renting a container ship.

This entire story is worth a read, but some of the highlights - if you are in a hurry are:
  • A massive fleet of empty container ships sits idle in the waters off Singapore. Apparently, world ship owners are just parking them there
  • The cost of chartering a bulk freighter has plunged from $300,000 last summer to $10,000 earlier this year.
  • It takes 3 years from the time a new ship is ordered till it is delivered. Come 2011, the world's biggest ship-building companies in South Korea will have nothing to work on, because no one is ordering new ships.
Here's a sea-level photo of some of those idle ships:

The Impending Doom of the US Dollar

Here's a fascinating story from Larry Edelson at Money and Markets about the US Dollar.  He writes from Asia:

We are now the laughing stock of Asia. Our dollars are no longer respected; our ambitions, no longer mimicked. Our way of life, often based on consuming far beyond our means, is being flat-out rejected.

I can’t even exchange a $100 bill on the street here anymore: Most of the street money changers will take euros, Singapore dollars, even Chinese yuan. But fearful of losing their shirt with sinking exchange rates, they don’t want U.S. dollars. Not long ago, I never traveled without my American Express card. Now, it sits in my office safe. Many in Asia no longer accept the card anymore. MasterCard and Visa are still OK, but they’re also losing market share to locally grown cards like Aeon.

The running joke in Singapore, Hong Kong, Bangkok, and Kuala Lumpur is that the U.S. is the place where even your pet could get a credit card or a home mortgage. So to Asians, the crisis we’re going through is our own fault. And although it was also caused by blunders in Western Europe and other regions, truth be told, they are mostly right.

When foreigners hold dollars, and those dollars lose value against their home currencies, then they lose purchasing power. The US Dollar has lost of 15% of its value since March. That means a street vendor who accepted dollars in March can now buy 15% less with those dollars than he could just six months ago. And what happened six months ago to trigger this decline? The Federal Reserve began dumping something north of $700 billion freshly created-out-of-thin-air dollars into their member banks.

The dollar is doomed unless the government slashes spending, but you can bet every last depreciating dollar you own that will not happen.

Wednesday, September 9

Rights & Responsibilities

According to the wisdom of the day, healthcare is a universal human right. When the term "universal right" is used, I cannot help but think of the Bill of Rights, where rights such as free speech, freedom of assembly and freedom of religion are enumerated. However, as best as I can tell, the people who use the term "universal right" as applied to healthcare mean something different than what I think of when I hear the term.

As I understand it, every right possessed by Person A implies a responsibility on the part of Person B. For example:

- my right to speak my mind means you have the responsibility to NOT prevent me from speaking my mind.
- my right to freedom of assembly means you the responsibility to NOT prevent me from assembling with whomever I want.
- my right to worship as I see fit means you have the responsibility to NOT prevent me from worshiping as I see fit.

However, there are also limits to your responsibility:
- you are not responsible to publish my speech
- you are not responsible to drive me to my meeting place
- you are not responsible to contribute to my religion

In other words, your responsibilities to my rights are negative - you are obligated to NOT PREVENT me from doing something. This is the simplest way to test whether something is really a universal right. The cool thing about this system of universal rights and obligations is that it requires no effort on my part to NOT PREVENT you from doing something. I don't have to take action nor do I have to spend time or money or effort to allow you to exercise your rights. My responsibility to you is to do nothing.

Does "universal healthcare" pass this test? Nope, not in the slightest.

In the current debate, if you have a right to healthcare, it obligates someone else to provide that care, does it not? If you have a right to be treated for cancer, then obviously some doctor has an obligation to treat you for cancer. If you have a right to diabetes medicine, then some drug company has the obligation to provide you that medicine, some doctor has the obligation to write the prescription, and some pharmacist has the obligation to prepare the medicine. And if the doctor, pharmacist or drug company somehow fail to provide that care, treatment and medicine properly, then apparently you have the right to sue them for malpractice which service - no doubt - some schmuck lawyer will be obligated to provide you.

Whatever else this may be, it is not a universal right. It sounds a lot like slavery to me: forcing someone else, against their will or their best interests, to provide time, labor and/or money for your wishes, wants and desires.

Those who claim that everyone has a "right" to universal healthcare obviously mean something different by the word "right" than the Founders meant when they penned the Bill of Rights.

Forgive me, but I fail to see how you have any right to obligate me to provide you healthcare. I just don't see it.

Tuesday, September 8

How much is a trillion?

Very well done slide show demonstrating the kinds of money required to keep Goldman Sachs, Morgan Stanley, Bank of America, Wells Fargo and Citibank from collapsing.

Wednesday, September 2

A Private Swiss Bank Is Pulling Out of America

This is a long read, but worthwhile. Wegelin & Co is a private Swiss bank founded in 1754. It is divesting itself of all American securities and will no longer act as an intermediary for clients who wish to own American securities through them.

What Does It Mean: The IRS is making it ever more difficult and complex for foreigners to invest in America. The IRS is trying to increase tax revenues, but the effect of these new policies will be a decrease in foreign investment in America. Wegelin & Co estimates the US will need an additional $2 Trillion in tax revenues to make up for the losses from foreign investors.

This is a terrific paper with a lot of very good information. It is well worth your time to read.

One of the most damning quotes comes in  the first few paragraphs. Remember, this is a Swiss bank's view of America:
...let us briefly recall the sort of tax authorities we are dealing with, and the sort of state they serve: a country that, over the last 60 years, has unquestionably been one of the most aggressive nations in the world. The USA has fought by far the largest number of wars, sometimes with, but mostly without a UN mandate. It has broken the international laws of war, maintained secret prisons, and fought an absurd war against drugs, with serious consequences both abroad (Columbia, Afghanistan) and at home (according to reliable sources, the tentacles of the narcotics mafia now reach well into political circles). With breathtaking moral duplicity, the USA maintains enormous offshore havens in Florida, Delaware and others of its states. The moralizers have joined sides with a nation that still makes extensive use of the death penalty, and that has a legal system under which lawyers can get rich on the misfortunes of their clients. Liability cases often end in verdicts with exorbitant damages, which makes business activity extremely risky, for medium-sized enterprises in particular. The moralizers provide intellectual support for a country that allows its infrastructure to collapse, and then stuffs convicts into hopelessly overfilled jails, after what are not infrequently dubious proceedings. They fund a nation that tolerates – or rather, causes – regular crises in the global financial system that it manages. A country whose underclass enjoys neither the benefits of an adequate education, nor a halfway functional health care system; a country whose economic system is increasingly inclined to over consumption, and in which saving and investing have increasingly become alien concepts, a situation that has undoubtedly been one of the driving forces behind the current recession, with all its catastrophic consequences for the whole world.
What Can You Do: The Declaration of Independence declares that "government derives its just powers from the consent of the governed." Once we - the people of these united States - cease to consent to this government, it will cease to possess any just powers, and will in fact be nothing more than a criminal organization, exactly like the mafia. What we can do is cease to consent to this government.

But Is It Right?

Graham Summers has a terrific article at Seeking Alpha that asks a simple question about the Goldman Sachs bailout:

Never mind the legality of this issue… it’s simply NOT RIGHT. End of story.

Some animals are more equal than others...