Economics for the Citizen

Just a link post; I'd call Walter Williams my favorite economist, but I don't really have any favorites except for not-Krugman. But anyway, Walter Williams freakin' rocks, and he has small class notes for an intro econ course he teaches called Economics for the Citizen. It's both really good and also nice & short too. I highly recommend it.

Getting Ready for the Mortgage Defaults to Get Serious

No doom & gloom for a while, I must be losing my touch.... Here's something just to keep the stomach acids going:

There's a lot of buzz going around based on a super-big chart-filled presentation by some scare-mongers called "T2 Partners", who're attempting to use reality to scare customers into buying their services. Sadly, the reality they paint, is, well, real. Here're a few of said charts:

Here's the situation with regards to subprime mortgage rate resets:


Here's where we stand with regards to the Alt-A resets...


or scheduled resets in general:


The 64-thousand-dollar question of course is what this will do to bank valuations. No-one knows for sure how many of these mortgages will end up defaulting, but I'm suspecting that they're already factored into bank shares' trading prices.

With $1.7T of mortgages resetting over the next five years, during the worst economy seen in decades, the big question will be how will this affect the rest of the economy. Especially retail sales. No-one knows, but I'm wagering that those "V-shaped" recession wonks are wrong, and that the "U-shaped" wonks are also wrong. Given the way mean reversion versus a growth trend-line tends to work, I'm betting on an "L-shaped" recession that stays flat, just like the Japanese have seen (since we're repeating their mistakes).

This of course while we're debasing the currency so much that the Treasury Secretary got laughed off the stage in China.

We now return you to your regular sunshine filled day.

Progress in California

They just had an election yesterday on whether a convoluted scheme to change nothing and instead kick the proverbial can even farther into the future; it failed, hard.

And today they're announcing an 18% pay cut for elected officials.

It's not much, but it's a start. It'll be a long, long time before California will live within its budget, but it's a start.

Obama versus the Constitution

Eric Holder was interviewed today and explained that they're looking for a new SCOTUS appointee who "understands that the constitution is a living document that [must handle situations the founders never anticipated]". The "living document" buzz-phrase is code for "we only want to honor the constitution where it's convenient, but elsewhere will interpret it as we choose."

The more that this kind of crap is tolerated the less our rule of law is worth.

Concord Juice

Maddie bought me some pure Concord grape juice; not the crappy filler-eque juice used by leftover european grapes, but honest-to-Gort east-coast grapes that just taste purple.

I forsee wine-making experiments....