News in Print

Here are a few observations gleaned from a week of reading the newspaper and a magazine to which I subscribe.

1.    Big brother has really arrived.  It appears the government tracks and if it wanted to can read or hear every electronic communication you make, including phone calls, e-mails, etc.  We are of course assured that there are safeguards in place to prevent abuse, but then no one knew about the collection of this information until recently.

2.    There were three articles about cyber spying, cyber warfare, and the mining of “big data”. There are no body bags or explosions, just little electronic impulses in an unseen battle between governments, corporations and thieves.

3.    The average Social Security benefit to a retiree is about $15,000 per annum.  “Most” seniors receive approximately two thirds of their income from Social Security which means there are a lot of folks living on less than $25,000 per year.  Is there any wonder that there is a lack of aggregate demand?

4.    Is estimated that no more than 50% of Americans own stocks and of those that do, the majority own very little. Ergo, just a privileged and wealthy few are the beneficiaries of the long-running rally. Moreover, let’s say you invested $100,000 in the market and had a 15% paper return.  For openers you have to sell in order to realize the gain and then reinvest your principal and try your skill (luck?) again, and bear in mind that your after-tax return will pay for about two months of care in an assisted living facility in the metropolitan area.

5.    Over 50% of the sales of homes in Los Angeles County in the past quarter were all cash sales.  Some of the biggest buyers of homes in places such as Los Angeles, Phoenix, Atlanta and Las Vegas are giant investment funds, awash in cash and seeking double-digit returns. I would say what we have here is an unintended consequence of the Federal Reserve’s ridiculous continuation of its easy money policy.  Unless the economy grows substantially so that all those houses can be rented and later sold at a profit, the Fed is  creating yet another asset bubble which will end badly if the required returns do not materialize and the big Wall Street players move on in search of greener pastures. And pity on all the folks who want to buy homes and start families but alas need a mortgage?

6.    Finally, thanks to Michael Douglas, I now know more about oral cancer than I needed to know and that I’ve been behind my peers to boot.

I’m sure there is a pearl of wisdom buried here but I just can’t see it yet.