The Cynical Economist

Some States Weigh Unthinkable Option: Ending Medicaid - Huge budget shortfalls are prompting a handful of states to begin discussing a once-unthinkable scenario: dropping out of the Medicaid insurance program for the poor.

In Entitlement America, The Head Of A Household Of Four Making Minimum Wage Has More Disposable Income Than A Family Making $60,000 A Year - First of all, working one week a month, saves big-time on child care. But the real big-ticket item is Medicaid, which has minimal deductibles and copays. By working only one week a month at a minimum wage job, a provider is able to get total medical coverage for next to nothing. Compare this to the family provider making $60,000 a year. A typical Mississippi family coverage would cost around $12,000, adding deductibles and copays adds an additional $4,500 or so to the bill. That’s a huge hit.

Bernanke hints dollar standard is flawed – According to author and economist Richard Duncan this is the first time the Federal Reserve chairman has publicly pointed out that the international monetary system may have a structural flaw. In the dollar standard. Yeah? It took quite some time to make the discovery….

India’s Next Steps: Looking for a Stable Public Sector – The great Asian economies of India and China are currently the hot engines of world growth, but their growth is unlikely to be durable unless their governments evolve into stable, well-functioning democracies

Brazil unveils massive navy buildup plans – Brazil’s plans for a massive naval buildup, which would include nuclear-powered submarines, were greeted with concern that the country’s huge defense outlay would trigger copycat actions in neighboring Latin American countries.

Here’s the Real Story Behind the Bailout of Ireland – The pressure for a bailout of Ireland did not come from Ireland itself—it came from Eurozone officials.

Europe Takes Out the Bazooka – Ireland won’t be the last euro-zone country to be bailed out.

How Germany could come to kill the euro – …My current best guess is that the single currency will indeed eventually break up – and that the euro’s executioner will be Germany, the most powerful country and economy inside the European Union.

Germany’s FinMin Schaeuble: Euro Is At Risk In Ireland Crisis – “It is extremely important to show in Germany that what is being discussed so much internationally is indeed possible: to fight in a measured way the main causes of the crisis — excessive deficits in public budgets and liquidity bubbles in financial markets,” the minister said.

Coca-Cola recalls 88,000 glasses over lead readings up to 1000 times federal limit – DRINKING glasses depicting comic book and movie characters such as Superman, Wonder Woman and the Tin Man from The Wizard of Oz exceed US federal limits for lead in children’s products by up to 1000 times. How is it that China trying to poison us and our kids  AGAIN is not a major news in the mass media? Why the company executives are not in front of the congress explaining why they import dangerous products in the USA?

Give States a Way to Go Bankrupt – It’s the best option for avoiding a massive federal bailout.

Obama Replaces Costly High-Speed Rail Plan With High-Speed Bus Plan – LOL that was funny…

Dirty Little Secrets – China – (Video) – China’s massive growth is costing the health of its people and environment? Pollution is an issue which the authorities would rather hide. But the problem is becoming dangerous and it can no longer be ignored.

From Reuters
By Alina Selyukh

In college, Matthew Bergh was ahead of the curve, working part-time at a local Starbucks and setting aside a few thousand dollars a year to do what his parents taught him to do — invest.

n 2008 the markets crashed and the recession interrupted his financial dreams. “As of right now, I can’t invest,” Bergh said. “I’m saving.”

Eighteen- to 30-year olds, known as “Generation Y,” have taken a more conservative approach to managing their money — stashing it in a savings account or under the proverbial mattress.

This generation of investors came of age during a succession of economic earthquakes. They witnessed the dot-com implosion of 2000 and the more recent onslaught of plunging housing prices, the credit crisis, recession, double-digit unemployment and an annihilation of investor wealth.

“The younger generation has not seen a good stock market over their adulthood,” said Gordon Fowler, chief executive of Glenmede, a Philadelphia-based wealth manager for rich people. “That had to have some impact on the psychology of younger investors.”

Bergh, 22, started looking for a job in January, and sent out more than 200 applications. After graduating in May, he did what thousands of young Americans have been forced to do: he moved back in with his parents and took an internship with Microsoft Corp. His job search continues.

Among his other ways to conserve cash, he has postponed his investments.

Leslie Barrie, a 26-year-old journalist in New York, followed a similar path. After graduating from college in California, she moved in with her parents and pursued low-paying internships before she went to graduate school.

“I try to save as much as possible,” Barrie said. She wants to invest for her retirement, but the markets have discouraged her from doing anything other than keeping a savings account.

Even those who work in capital markets are leery.

One 28-year-old man who declined to be named because he is a hedge fund vice president said five years ago he kept about 10 percent of his finances in cash. Now, he keeps 70 percent.

LEARNING GRANDPARENTS’ LESSONS

Generation Y’s views on money echo that of another generation — their grandparents. Many of those people learned the value of saving and frugality because they grew up in the wake of the 1929 market crash and the Great Depression.

By contrast, their parents — the Baby Boomers — were buoyed by several major bull markets, soaring home values and the proliferation of easy consumer credit.

“Our parents lived it up on debt and then many of them saw their houses get foreclosed, and that was kind of a shock to us,” said Robert Eubank, a 20-year-old senior finance major and equity portfolio manager at a student-run investment group at Towson University in Maryland.

read the rest here

Lack of Hiring to Restrain U.S. Economy in 2011, Survey Shows - The economy in the U.S. will fail to strengthen in 2011 as companies limit hiring and consumers curb spending, a survey showed. Kiss your wishes for a happy new year goodbye…

Economists worried about U.S. inflation: survey - Steps by the Federal Reserve to pump more money into the U.S. economy through government bond purchases could stoke inflation, even though growth will remain moderate through 2011, a survey showed on Monday.

Riskiest Bonds Are Haven as Fed Seeks Inflation: Credit Markets – The riskiest junk bonds are providing a refuge for investors concerned that inflation will accelerate as the Federal Reserve attempts to bolster the economy. Geee, here is my dilemma: Do I bet on junk and lose my money or leave it to the inflation to “eat them”

PBOC Adviser Li Says China Can Consider Selling U.S. Treasuries – Chinese central bank adviser Li Daokui said China can consider selling U.S. Treasuries as a way to seek compensation for losses caused to its foreign exchange investments by the U.S.’s decision to undertake so-called quantitative easing.

Why You Should Be “Extremely Scared” by China’s Food Price Inflation -

45 ‘Patriotic Millionaires’ Call for Bush-Era Tax Cuts to Expire – “For the fiscal health of our nation and the well-being of our fellow citizens, we ask that you allow tax cuts on incomes over $1,000,000 to expire at the end of this year as scheduled. We make this request as loyal citizens who now or in the past earned an income of $1,000,000 per year or more.” LOL…They believe that the politicians know best of how to take care of us with their money…

Higher Taxes Won’t Reduce the Deficit – In the late 1980s, one of us, Richard Vedder, and Lowell Gallaway of Ohio University co-authored a often-cited research paper for the congressional Joint Economic Committee (known as the $1.58 study) that found that every new dollar of new taxes led to more than one dollar of new spending by Congress. Subsequent revisions of the study over the next decade found similar results.

TSA has met the enemy — and they are us - After Congress approved creation of the agency in late 2001, the TSA grew quickly from just 13 employees in January 2002 to 65,000 a year later. In the first year, agency workers confiscated more than 4.8 million firearms, knives and other prohibited items, according to a report by the U.S. Government Accountability Office. It is a miracle, how the US citizens managed to survived on flights prior to the creation of TSA. One may think there were gun battles on the planes…

TSA Checks for Prostate and Bowel Cancer - “Now when you fly through an American airport, we can also give you prostate check for men and also bowel cancer checks. Women will get all cavities checked. This is also part of the new Obama Health Care initiative as well as security for a trouble free flight,” Roger Sanchez, TSA operations director, at Newark airport told CNN. LOL go and read the whole thing it is funny

Strangling innovation with red tape – We are creating so much regulation – over tax policy, health care, financial activity – that smart people have figured out that they can get rich faster and more easily by manipulating rules on behalf of existing corporations than by creating net new activity and wealth. Gamesmanship pays better than entrepreneurship.

Greece’s Government May Shut Down on Cash Shortage – Parts of Greece’s government may be forced to “shut down” as early as next week if the country isn’t able to cover a revenue shortfall after its European Union partners delayed its next tranche of aid money

Germany Set for Record Deficit – German measures of fiscal consolidation so far have been helpful and successful, but nevertheless the budget deficit this year will be the highest ever, the finance ministry said Monday in its monthly report.

Portugal next as EMU’s Máquina Infernal keeps ticking – The Portuguese seemed baffled – and pained – that investors should link their country in any way with Greece or Ireland. I am afraid they must come to terms very soon with some unpleasant facts.

The ‘Build America’ Debt Bomb – The state and city fiscal mess is getting worse, yet the Obama administration wants Congress to make new taxpayer-subsidized bonds permanent.This is insane!

The Climate Cash Cow – A high-ranking member of the U.N.’s Panel on Climate Change admits the group’s primary goal is the redistribution of wealth and not environmental protection or saving the Earth.

FDNY pension board to review firefighters’ disabilities – If you are an ex-firefighter who has retired early, pulling down $74,624 a year in disability pay for asthma and other lung ailments, it is probably best not to be featured in the news competing in martial-arts kickboxing matches …

When University of Central Florida professor Richard Quinn suspected that some students had cheated on his exam, he gave a lecture on ethics to his class that he then put on YouTube.

In the lecture, Prof Quinn told the class he had enough evidence from statistical analysis and other investigatory techniques to identify most cheats, but instead of handing the list over to the university authorities for discipling, he proposed a deal. He said: “I don’t want to have to explain to your parents why you didn’t graduate, so I went to the Dean and I made a deal. The deal is you can either wait it out and hope that we don’t identify you, or you can identify yourself to your lab instructor and you can complete the rest of the course and the grade you get in the course is the grade you earned in the course.” Prof Quinn also added a requirement for those who came forward complete a four hour course in ethics. In return there would be no permanent record of the cheating.

He ended up uncovering over 200 students that had cheated on the exam out of about 700.

The Billion Prices Project @ MIT

A lot of data and charts…

So when BLS states, that there is no or little inflation …check out this guys data at The Billion Prices Project @ MIT

It may happen to be tracking the inflation more accurate LOL

The Billion Prices Project is an academic initiative that collects prices from hundreds of online retailers around the world on a daily basis to conduct economic research. They currently monitor daily price fluctuations of ~5 million items sold by ~300 online retailers in more than 70 countries.

This webpage showcases examples of average inflation indexes that they created to illustrate the type of statistical work that can be done with this data. Their team is currently working on developing econometric models that leverage the data to forecast future trends and conduct economic research

Must Watch Video

Roubini: Debt Nightmare Unfolding in Europe – Attempts to bail out the Irish banking sector via multinational loans will only increase debt burdens in Europe and lead to a nightmarish scenario there, says New York University economist Nouriel Roubini.

Municipal-Bond Funds Have Biggest Withdrawals Since 1992 on Issuer Outlook – Investors withdrew the most in almost 19 years from open-end U.S. municipal-bond funds in the week ended Nov. 17 as concern increased that cities’ and states’ finances are deteriorating.

Dollar to Become World’s `Weakest Currency,’ Drop to 75 Yen JPMorgan Says - “The U.S. has the world’s largest current-account deficit but keeps interest rates at virtually zero,” Sasaki said at a forum in Tokyo yesterday. “The dollar can’t avoid the status as the weakest currency.”

U.S. in Vast Insider Trading Probe – Federal authorities, capping a three-year investigation, are preparing insider-trading charges that could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders and analysts across the nation, according to people familiar with the matter.

AS THINGS FELL APART, NOBODY PAID MUCH ATTENTION – The American way of life – which is now virtually synonymous with suburbia – can run only on reliable supplies of dependably cheap oil and gas. Even mild to moderate deviations in either price or supply will crush our economy and make the logistics of daily life impossible.

US Housing Market Will Struggle in 2011: Poll – The U.S. housing market will stagnate next year as a steady stream of foreclosures and nagging joblessness sap the demand needed to mop up an excess of homes on the market, according to a Reuters poll.

Greece to raise VAT to meet terms of EU/IMF bailout – GREECE HAS pledged to raise VAT, freeze pensions and cut government waste further in 2011 to meet the terms of an EU/IMF bailout, after admitting it will miss this year’s targets.

VAT increase to wipe £5billion off UK economy – Nearly £5 billion will be wiped off Britain’s economic output by the rise in VAT to 20 per cent in January, spending watchdogs forecast today.

ECB head has ‘grave concerns’ on eurozone governance – The head of the European Central Bank Thursday expressed his “grave concerns” about economic governance in the euro area in what he called an “exceptionally demanding and uncertain” environment.

Medicare 23% Pay Cut for Doctors to Be Delayed 1 Month in U.S. Senate Deal – Medicare, the U.S. government health insurance program for the elderly and disabled, has cost control formulas that demand the rate cuts.

Healthcare Costs Up 7% by Sept. – The average, per capita cost of providing healthcare services in the United States rose by 7.08% for the past 12 months ending in September, a rate of growth that has slowed slightly, but which is still well above the 1.1% overall inflation for the same period, according to the latest monthly study by Standard & Poor’s.