Cab Thoughts 2/11/12

Of the 200 billion, BILLION, dollars given to charity in the U.S. every year, one third or more goes to the infrastructure of raising it. Some "charities" are nothing but infrastructure.

A national test of 12th graders in the U.S. (called TIMSS) recently has scored them the lowest of all the developed nations so the government stopped giving the test.

The Death of Abundance
"A flat yield curve, in contrast, is a disincentive for lenders to lend unless there is sufficient downside room for yields to fall and provide bond market capital gains." This is a quote from William Gross from PIMCO, the biggest and best regarded bond manager in the western world. There are a number of factors that cause people to hold and not lend money (lending is essential for growth and development.) One is risk, the fear that you will not get your money back. The other is a flat yield curve, where people who lend money for a long term earn little more than those who lend for a short period. In essence, the low long term rates are such a bargain no one will lend. We have both situations now, the inhibition of lending because of the perceived risk involved and the flat yield where long term rates are so close to short term rates no one will lend. And, of course, short term loans can not be used to build any type of long term plan. So Mr. Gross asks, "Where does credit go when it dies?" It, like all things, disintegrates. "A 30-50 year virtuous cycle of credit expansion which has produced outsize paranormal returns for financial assets – bonds, stocks, real estate and commodities alike – is now delevering because of excessive “risk” and the “price” of money at the zero-bound. We are witnessing the death of abundance and the borning of austerity, for what may be a long, long time." (Another opposite, strongly held and well argued view is here:
"Abundance -- The Future is Better Than You Think", written by Dr. Peter H. Diamandis, X PRIZE Foundation Chairman/CEO, and Steven Kotler, Science Journalist.)



This anti-Catholic decision from the government is a meaningful one. The essence is the government's claim that they can define what a religious belief is, that this is a women's rights question and not a religious one. This has huge implications if unchallenged but, while a constitutional usurpation, it might work to the benefit if the Washington self-anointed. This will raise havoc with Romney's Mormonism and will cause great angst among the various stripes of Catholics. And antagonism. This brings all the religious problems to the fore. An ugly decision.

These decisions of the administration are so self-righteous and often so disruptive that one wonders after a while if this is not purposeful. One could not be wrong so often randomly; this looks as if it has taken some effort. Obama's hallmark statement that if coal-fired plants were closed as he wanted "electricity prices would necessarily skyrocket" is telling. He is working within a higher moral code which the rest of us may not see or understand. His cabinet meetings are sort of like a conclave of Cardinals. We are to hear, genuflect and, if not obey, at least accept.

The Bureau of Labor Statistics recently reported on the estimates of the top 20 occupations in the next 10 years. Of the top 20 occupations, just five require an associate's degree or more. All together, 30% of the projected job openings over the decade will require less than a high-school diploma, and 40%, only a high school diploma. Less than 20% will require a bachelor's or more. Almost three-quarters will require no more than brief on-the-job training, and 85% will require no previous relevant job experience.This does not fit the picture painted by our esteemed leaders. These jobs paint the picture of a poorly educated, low paying job force, low skilled and static. This does not look like the return of the middle class and anyone who says education improvements will make a difference on a national level is simply not being honest, at least with these numbers in front of them. The lack of a degree will certainly limit, but the degree may not advance.