Capitalogix

Ten Links for Your Weekend Reading

A sprinkling of dark humor ...

 

 

 

Here are some of the posts that caught my eye. Hope you find something interesting.

Lighter Links:

• Short-Term Thinking Is Often Our Biggest Problem: 3 Ways To Fight It Now. (FastCo)
• China’s Push to Put Astronaut on the Moon. (FT.com)
• There’s an Ape for That: Orangutans Use iPad to Communicate. (TheDaily)
• Take Two & Call Me In the Morning: Discovery of an Exercise Pill? (TechReview)
• Guys vs. Cartoon: It's not for knowledge that we went to college ... (Video)

 

Trading Links:

• Why is the Economy Doing So Well ... And Can It Continue? (Inc)
• Forecasting Toolkit Challenged by the ‘New Abnormal’. (FT)
• Update on Global Food Commodities. (Stratfor)
• The Visible Hand: Is State Capitalism a Viable Alternative to Free Markets? (Economist)
• What You Can Learn From Mitt's Tax Return. (WSJ)

More Ways to Visualize Big Numbers, Like a Trillion

Back in the 1960s, Illinois Senator Everett Dirksen famously quipped, "A billion here, a billion there -- pretty soon, you're talking real money."

To get a sense of how Trillions currently are discussed in Congress, watch this.

How quaint ... Recently, Trillion has become the new billion; especially when we're talking about government debt, government budget, and the budget deficit.

So, let's put a "Trillion" in better context.

What follows are a few creative ways to look at the U.S. government budget and what's happening to our national debt.

1. The U.S. Government Budget Compared to an American Household


This has been making the rounds.  I saw several copies on social media sites, and it puts things in a format most of us can understand easily.

 

 

 

I'm not sure of its source, but you can also see a version of it in this video showing CNBC correspondent, Rick Santelli, explaining the government budget and the budget deficit.

2. U.S. Government Debt Illustrated in Pictures

The national debt clock continues ticking.

Here is what the $15 trillion U.S. debt looks like when it is piled up in stacks of $100 bills.

Do you see the the tiny-in-comparison tractor trailer?  Squint, and you can see the barely visible human in front of it.

 

 Well, that put things in perspective.

 

So does this video.

 

 

 

You don't need the national debt clock to get a sense how big the deficit is becoming, or how hard it is to start reducing it meaningfully.

3. Or If You Just Like Simple Math...

The circumference of the earth is 24,738 miles.

If laid $15 trillion one-dollar bills end-to-end, it would be 1,444,000,000 miles long ... Enough to circle the earth's equator 58,390.5 times.

If you were to drive around the earth in your car 58,390.5 times at an average speed of 70 mph non-stop, it would take you 2,385 years to finish.

Click here for some other facts about "a trillion" ... or here too.

So What Does it All Mean?

These are some big numbers. But as Nicholas Vardy points out, the focus on U.S. debt ignores once crucial factor -- the value of the balance sheet or accumulated wealth of the United States. That figure probably stands between $150 trillion and $200 trillion. That amount is 10- to 13-times the size of the current U.S. government debt.

In other words, the U.S. is not going to the poor-house anytime soon.  But the trends are sobering, nonetheless.

Related Articles

• 34 Shocking Facts About US Debt (lewrockwell.com)
• Biggest Holders of US Government Debt - Yahoo! Finance (opsudwinger.wordpress.com)
• It's Not What You Owe, It's Who You Owe (reason.com)

Explaining Modern Finance and Economics Using Booze & Broke Alcoholics

Here is little story that makes it easy to understand what's been going wrong in Europe (and perhaps modern finance in general). 

From reszatonline

Helga is the proprietor of a bar.

She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar.

To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, but pay later. 

Helga keeps track of the drinks consumed on a ledger (thereby granting the customers’ loans).

Word gets around about Helga’s “drink now, pay later” marketing strategy and, as a result, increasing numbers of customers flood into Helga’s bar. Soon, she has the largest sales volume for any bar in town.

By providing her customers freedom from immediate payment demands, Helga gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages. Consequently, Helga’s gross sales volume increases massively.

Ahh, an opportunity.

A young and dynamic vice-president at the local bank recognizes that these customer debts constitute valuable future assets and increases Helga’s borrowing limit.

He sees no reason for any undue concern, since he has the debts (of the unemployed alcoholics) as collateral!!!

At the bank’s corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINKBONDS.These “securities” then are bundled and traded on international securities markets.

Naive investors don’t really understand that the securities being sold to them as “AA” “Secured Bonds” really are debts of unemployed alcoholics.

Nevertheless, the bond prices continuously climb! And the securities soon become the hottest-selling items for some of the nation’s leading brokerage houses.

Perhaps this isn't a great idea?

One day, even though the bond prices still are climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Helga’s bar.

He so informs Helga.

Helga then demands payment from her alcoholic patrons.

However, her clients, being unemployed alcoholics, cannot pay back their drinking debts.

Since Helga cannot fulfill her loan obligations, she is forced into bankruptcy.

The bar closes, and Helga’s 11 employees lose their jobs.

Overnight, DRINKBOND prices drop by 90%. The collapsed bond asset value destroys the bank’s liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.

The fall-out?

The suppliers of Helga’s bar had granted her generous payment extensions and had invested their firms’ pension funds in the BOND securities. They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds.

Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.

Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multibillion dollar no-strings attached cash infusion from the government.

The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who have never been in Helga’s bar.

Feel like having a drink?

Send the Year Out with JibJab's "2011 Buh-Bye" Video

From Charlie Sheen's #winning tweets, to the debt ceiling crisis, and global protests ... it seems the whole world went nuts in 2011. Let's reminisce about the most notorious moments of the year!

Here is the video.

 

Oh well ... crazy how fast time flies.  Best wishes for a great day and an even better year in 2012.

 

People Are Awesome [Video]

Start the New Year with a Wow! This will give you a different perspective on what's possible.

 

Worthy of full-screen mode viewing.

How committed do you believe these people were to to pursue and master such amazing ventures?

What could you do if you were willing to commit that fully?

Happy Holidays and Best Wishes for 2012

During this holiday season, I hope you are grateful for the things that are great in your life,
that you choose what you can use from the things weren't great …
and that you invest those lessons in your future.

The hardest part of finding a better way is often just remembering that there might be one.

___________________

 

Best wishes to you for a healthy, happy, and prosperous new year.

 - Howard

Sign up for my Weekly E-mail Newsletter

Uncle Jay's Singing Year in Review - 2011 Edition 2011

Silly, clever, and with a more than a hint of the truth ... Watch as Uncle Jay sings his year-end summary of the news.

 

 

 
Uncle Jay has a website he says "helps small minds understand big news".

Happy Holiday Season, and Best Wishes for the New Year.

 

Zeitgeist 2011: The Year In Review through Google's Top Searches

See what the World searched with Google's 2011 Zeitgeist.

Here is the video.

 

 

 

Don't expect too much; apparently, we are a shallow species.

All That - Infographic Showing What Happens in 60 seconds on the Internet

This infographic shows you what happens in 60 seconds on the Internet.

I just came from the malls, and based on the number of close parking spaces I found, a lot of people are doing their holiday shopping online.

This chart displays a wide range of actions taken (like e-mails checked, Tweets posted, or songs downloaded) each minute on the Internet.

 

Interesting.

Related articles

• Going Viral Visualized [INFOGRAPHIC] (mashable.com)
• How The Internet Looked in 1996 vs 2011 [Infographic] (socialtimes.com)

The Perfect Holiday Gift - A Yacht Built Like a Tropical Island

I know what I want for the holidays ... an amazing island built right on a beautiful yacht. 

 

 HT KD

This was created by UK-based Yacht Island Designs. 

As you can see, the design is inspired by tropical islands, with huts, a pool ... and to top that ... a volcano guaranteed not to erupt.

 

Since it's a yacht, it comes packed with VIP rooms, arcades, gym, lounges, spas and even a helipad. What a great place to do business? 

The back of the yacht has a retractable beach deck and dock.  Why go to the trouble of getting out to sea if you can't wake-board, jet-ski, or swim; right?

 

 

If you want to know how much it would cost to fuel-it-up or operate, it's probably not in your price range.

Hope you are having a happy holiday season.