Feb

16

How Hard are These Times, Really?

By admin

As I was driving home the other night listening to news about the bad economy on the radio, I couldn’t help but notice all the late model cars around me – no doubt full of people going home to watch their giant flat-screen televisions in HD. If this is as bad as it gets I think we are OK folks. You hear the news actually throwing around the D-word (depression), and it just strikes me as irresponsible sensationalism. All the news stations are fighting for the best ratings, so it logically follows that they probably think you will watch the news broadcast which promises to give you the worse news about the economy. After all, everything is fine or economy is in a small recession just sounds boring. The more they can scare you with their teaser bits the more likely you are to watch.

Using the word depression is pretty ridiculous. You know how much edible food gets thrown out every single day in the city where you live? Probably enough to feed some starving nations. There has only been one depression in American history and believe me people were not throwing out food. People were actually starving. Ever see pictures of the actual depression from the 1930’s? There were bread lines full of ordinary middle-class citizens waiting on government-issued rations of bread to feed their families! Those few people alive today who remember the depression from their childhood probably laugh at the comparison (assuming their hearing aides are working properly).

I brought this up during happy hour at the pizza parlor on Friday, and when I mentioned that there are no bread lines three people at the bar all chimed in together in replying not yet! …Which just goes to show you the mentality that the media is managing to instill in just about everyone. These people at the pizza joint are somewhat-intelligent folks who I see there all the time, and even they are showing signs of succumbing to this media brainwashing. My friends, as long as all the fast food restaurants on every corner still have that .99 menu there is no danger of bread lines or a 1930’s style depression.

Mama Riah and I went out to dinner Saturday at King’s Fish House. If you aren’t familiar with this franchise, it is a chain of good seafood restaurants with a casual atmosphere – that deliver a check which looks like you just ate in a snazzy fine dining establishment. We got there about 6:00 because we like to eat early. The place was busy and we managed to score two seats at the bar.

Over the course of the next hour and a half as we enjoyed our meal, the place became absolutely jam-packed standing room only. If the economy was terrible, don’t you think casual dining joints that are priced like high-end restaurants would be the first to suffer? By the way, we each had two drinks and split a seafood salad and each had a bowl of clam chowder for a total bill of $60. It is extremely easy for two people to break a three digit check here if they are in a feasting mood.

After dinner as we were leaving, I noticed the mall parking lot was still pretty full. I could see across the street into the ATT&T wireless store which was still open and had at least half a dozen customers in there buying new I-phones and Blackberries. You know how long the cost of one of those things could feed you for, if push came to shove?

What we have right now doesn’t even qualify as a noticeable recession. If we actually get one of those they’ll probably be calling it a national disaster. I’m almost rooting for it just so I can make my point better!

Papa Riah

Dec

30

A Bad Economy is Self-fulfilling

By admin

The media is very fond of telling us about the bad economy every time we turn around. How does that make you feel? Like going out and buying new furniture and then going out to dinner? Or like withdrawing all your money from the bank and hiding it in a cracker box? For most people it’s the latter. And you know why, right? You got it – because most people are mindless drones who don’t think for themselves and allow everything they hear and see to program their behavior. In short, most people are idiots. (I know you aren’t one of them or you wouldn’t be here reading my blog.)

It just so happens that Mama Riah and I went out a couple weeks ago and bought a new couch before going out to dinner. The furniture store was packed. They were selling stuff left and right. The nightly news would have me think that these places are nailing boards over the entrance as all the employees get into a 27-mile long unemployment line. But that’s not what is happening if you get off your butt and go look around for yourself.

However that doesn’t mean that a bad economy isn’t right around the corner. A real bad economy. One where credit dries up completely and people actually do stop spending. What you have seen so far ain’t nothing folks. Things could get bad. Real bad. And you know how that could happen, right? The media keeps pounding and pounding the idea of how bad things are until it resonates inside everyone’s brains and then people become scared. In other words, we all get brainwashed into a bad economy.

For some people this has already happened. In our local news last week there was a story about an elderly lady who heard the news about possible bank failures so she promptly withdrew all her money in cash. She stashed an envelope containing $10,000 in a cracker box. For some inexplicable reason she then decided that she didn’t want the crackers and would rather have the $2.63 cents back that she spent for them, no doubt because of the scary bad economy news stories.

You can guess the rest. She glued to top back together and returned the cracker box to the market and got back her $2.63. After a couple days she realized her mistake and went to the store to ask for her crackers back, explaining the situation. They told her that returned food boxes go back to the manufacturer and that she likely had lost her money.

By some miracle the cracker box got put back on the shelf and purchased by an extremely honest family who returned the box to the store and reported the found money. So the crazy old cracker lady got her money back (and didn’t bother offering a reward), but that isn’t the point of this story.

It is this: If you hear that the economy is bad and that information alters your behavior, you will be responsible for helping to create a worse economy than the present situation (whatever that may be). In my opinion the present situation isn’t bad at all, based upon what I observe around me. Take it from an out-of-work sub-prime mortgage lender! However if we allow ourselves to be brainwashed into a bleak picture of things, it will become our reality. Just ask the crazy cracker lady.

Papa Riah

Nov

15

Financial Bailout, Wrong Recipients

By admin

You don’t want to know what’s happening with the $700 billion (with a b) bailout money that was supposed to be earmarked for large financial institution’s foreclosure and mortgage-related losses. Trust me, you really don’t. Especially if you are the type who gets mad when the leaders of your country act foolishly, irresponsibly, and with self-interest as their first priority. This is one time when it’s definitely better to stick your head in the sand. In fact I don’t even want to watch the news any more, especially financial and political news. I’m sure I’m not alone there.

The whole idea behind the bailout was to rescue large financial institutions whose exposure to the subprime mortgage business (and foreclosed properties that can only be unloaded for large losses) was threatening their existence. That’s what it was for. Unfortunately between the time the legislation passed and now, which has only been a matter of weeks, lots of other uses for the money have popped up. Gee, who would have thunk?

Bank of America already received $25 billion (with a b) of that money. Now they are a company that is in good financial health and has never been involved in the mortgage business. They have no bad subprime loans, nor do they own any foreclosed residential homes. BOA is doing just fine charging their customers every time they talk to a teller. So how did they get their hands on that cash? Is it because they have a sign that says Bank on the front of their building? Or do they know the right person somewhere?

Today on television the mayor of Philadelphia made a desperate plea to use the money to bail out city governments – in particular, his city. When it was explained to him that the legislation which allocated the funds would not allow that, he responded that they need to give him some other money then – just like the auto makers are apparently getting. When asked where the money was supposed to come from, he said (and I kid you not) The federal government are the ones who print the money – just print some and give it to us.

As a reader of this blog I hope you understand why that doesn’t work. That crazy mayor might as well print the needed money himself – it will be worth just as much as all American currency will be if the federal government starts printing money to give to every failing entity. Heck, haven’t you made some investment decisions that didn’t work out? Have the government print you some money to bail you out.

The really scary thing is, what the government is actually doing with these bailouts isn’t much different than just printing the money. The effects are going to be the same – they just don’t realize it yet. Or perhaps they don’t care what happens to the next generation in America. By spending more and more money on an unlimited credit line that they have setup for themselves, they are setting a terrible example to the American consumer. The whole system could be bankrupt in our lifetimes, not in our grandchildren’s as we are all planning on. At least consumers have a point where their credit is maxed out. Our government can just keep borrowing – and because they can, they do.

Eventually all this government borrowing and printing money will come home to roost. When it does, expect the US dollar to be worthless – not only overseas but within our own country as well. How are you set on gold coins and gold bars? You might want to stock up on them the way things are going. Either that or you will need chickens, pigs, apples, and ears of corn for currency.

Papa Riah