Welcome back to The Investor's Coroner, an attempt to make both sense and fun of the current global markets and inform you of the happenings in the international market while planning a move to Shanghai.
It is the goal of the Investor's Coroner to make you laugh, help you learn and get into your pants you, sexy minx. Really, you look great today. Did you get a haircut?
The bubble that bursted (I make up words here, in case you're new) had a great deal to do with the housing market (as I'm sure you heard). Well, February allegedly turned out to be the first month where foreclosures lessened and existing housing sales increased. I say allegedly because, well the whole damn thing is a lie.
Lenders are holding foreclosed houses off of their books (i.e. not reporting them) because they are waiting for the government to bail them out. Basically, if they declare borrowers insolvent and foreclose, by reappraising the properties and attempting to sell them, lenders would lose roughly half of their loan value on the homes.
But, if the lenders keep the loans off the books and report the failed mortgage payments as losses resulting from the economic collapse, the government will bail them out to the tune of ninety to one hundred and five percent of their loan values. Basically, the government has removed incentive for banks to default, thereby discouraging lenders from the inconvenient business practice of recouping their own losses, which is great for the homeowners not paying their mortgages and still living in their homes and great for the lending institutions in need of help, but for the American taxpayer, the whole thing is an evil and twisted cluster fuck.
In simple terms: the United States Government is outbidding the private market and using tax dollars to make the banks richer. What a great time… to be a bank.
Certain teachers are making deals with advertisers so they can get the supplies necessary to teach their students adequately. And, if I may allow myself another bit of commentary here, that is fucking sad. Not the innovation on the part of the teachers. That's just good thinking. But everyone has been screaming about how privatizing education will ruin it and here go teachers voluntarily privatizing aspects of education because they can't afford not to. I guess what I'm saying here is: the US public education system is a laughable concept designed to keep people dumb so they are easily ruled.
But that's what I always say.
Here's my problem with the AIG Bonus gimmick: it's not the problem. The 165 million dollars paid out in retention bonuses to AIG executives was apparently actually designed to retain those executives who would aid in the dissolution of company divisions (i.e., organize the sale of profitable portions of the company to raise cash). Whether or not they should have been paid these bonuses is beside the point because they shouldn't have been bailed out anyway. Billions of dollars are going to stupid shit, so once again, why are we worrying about one turd?
Oh yeah, because distractions are important.
While the American media, congress and citizenry get all pissy about what is essentially a drop in the not so proverbial chum bucket that is this bailout plan, wagons of cash are being unloaded to dismantle the free market system in the name of a socialist republic. I'd say that change had come but this is really the same old story.
So anyway, some dude that worked for the AIG commodities department (an allegedly and in all probability very profitable department) got angry that his contractually obligated cash is getting yanked out from under him and resigned through an op-ed piece in the New York Times. Making him the richest fiscal conservative ever to get pissy in a New York Times op-ed piece. That's gotta make his momma proud.
Legislation that would allow credit card debt to be included in bankruptcy files is being considered. Allegedly, this legislation would prevent credit card companies from increasing interest rates at will. And that sounds like a good thing but here's the rub:
Lenders are getting less and less incentive to lend. In fact, they are essentially receiving a shit ton of incentive not to lend. Markets that the government claims to be stimulating are actually being frozen. Sure, the banks are being bailed out with government funds but said institutions of lending have no reason to attempt to bail themselves out with good loans. Which is to say, don't bother paying anyone back ever. After all, there's nothing in it for you.
World currencies are pegged to the dollar. This is to say that the dollar is considered the strongest and most reliable of all currencies. Because of this, almost every country invests in our treasury bills, including China which owns almost a third of our debt. Well, China is freaking the fuck out about the present administration's decision to print trillions of dollars out of nothing and throw them at the banks. China, along with a few other countries, are pushing to get the global currency market pegged to a new basket of currencies that would better represent the global market as a whole.
Basically, China feels that as the United States' best customer, it deserves some say so in how we maintain our dollar value. Which is to say that we are collectively owned by a large Asian country whose people hate us. What a topsy turvy world, eh kids?
Legislation may soon be introduced that would provide bailout dollars for the struggling newspaper industry and declare them as tax-exempt not for profit organizations. Which is to say that the government will gladly let newspapers avoid taxes and even give them money if the newspapers will stop writing such negative things about the government, which kind of gives new meaning to the term, "free press."
I'm sorry, did I write "new meaning"? I meant: no meaning. My bad.
Striking French workers recently held their boss hostage because… fuck him, that's why? This goes against everything I know about the French. And I got to say, if the economy is so bad that the French are growing backbones, well shit… mass hysteria and total dystopia just can't be that far away.
Okay, a little stock lesson here for you. Some companies, particularly those that are big and strong and provide a diversity of services that aren't going anywhere anytime soon, pay dividends like ten or twenty cents per share quarterly to those people who invest in them. Long term investors tend to ride out the volatility (price movements) of stocks that pay dividends because of the income. Buckle, however, is a retailer that provides clothing for teenagers, which is to say that its success rides the never-ending waves of fads and trends, which means that (in my humble opinion) they should never declare a dividend because they are a growth stock and not an income stock. So naturally, they declared a dividend.
Of course, I am often wrong about life so what the hell do I know?
New Innovations are Way Better than Pregnancy Scares
Scientists have developed a chip that mimics the human brain and actually thinks faster than humans do, which means we won't have to work anymore. Everyone can just put one of these chips in a robot, let the robot do their jobs and forget about all that nasty and tedious thinking for themselves stuff. In related news, have you seen the latest American Idol?
Well, someone finally found an alternative use for maggots. And I have to say it's about damn time. Apparently, maggots can be used to treat leg ulcers, which is awesome because I have like a shitload of maggots at my place (I've been saving them). No news yet on when scientists will want my maggots, but I'm anxiously awaiting that email.
Your Motivational Investment Quote of the Week
Happiness should always remain a bit incomplete. After all, dreams are boundless.
–Anatoly Karpov, Chess Grandmaster